104 State-Owned Corporations` Debt Amount 444 Trillion Won

104 state-owned corporations` total amount of debt reached 446 trillion698.4 billion won last December, increased by the average of 27 billion won per year for the last three years.

According to the resource submitted to the committee on budget and accounts of the Grand National Party (GNP) by Ministry of Finance and Economy (MFE), the total amount of the state owned corporations` debt has increased from 365 trillion 77.4 billion won (1997) to 416 trillion 224.5 billion won (1998), to 401 trillion 558.9 billion won (1999), to 446 trillion 698.4 billion won (2000). The total debt increased by 81 trillion 621 billion won for three years, 22.4 percent up.

Pointing out that the increase of the state-owned corporations` debt has led to enhance the burdens to the people, the GNP requested the measure to lessen the debt. But the government has responded that a considerable amount of the debt is the deposited funds of the financial institutions or the asset in the form of Social Overhead Capital (SOC).

The total debt of 68 corporations excluding the financial institutions and their subsidiaries, has increased from 80 trillion 823.9 billion won (1997) to 109 trillion 277.6 billion won (2000), by 28 trillion 453.7 billion won (35.2 percent).

Especially, for 25 subsidiaries of corporations that the government owns less than the 50 percent of the shares, the debt has increased from 1 trillion 501.6 billion won (1997) to 5 trillion 517.1 billion won (2000), by 4 trillion 15.5 billion won (2.7 times increase). For example, the debt of Koret Trust Inc., a subsidiary of Korea Asset Management Corporation, increased from 14.3 billion won to 714 billion won, and the debt of Korea Telecom IDMC, a subsidiary of Korea Telecom increased from 1.1 billion won to 10 billion won.

For parent corporations, the debt has also increased 19 trillion 102.6 billion won to 25 trillion 507.3 billion won for the same period, by 33.5 percent (6 trillion 404.7 billion won). Especially, the increase rate of the short-term debt (83.3 percent) was much higher than the increase rate of the long-term debt (15.4 percent, 2 trillion 156.8 billion won).

State-owned Corporations whose short-term debt has largely increased, were Korea Asset Management Corporation (13.9 billion won to 190.2 billion won), Korea Cigarette and Ginseng (447.9 billion won to 1 trillion 23.6 billion won), and Korea Appraisal Board (8.1 billion won to 41.5 billion won), and Daehan Pipeline Co.(30.5 billion won to 130.8 billion won).

The debt increase rate of parent corporations that the government`s shares are over 50 percent, was 29.6 percent. Especially, Korea Agricultural and Rural Infrastructure Corporation (2 trillion 700.4 billion won to 3 trillion 754.6 billion won), Korea Electric Power Corporation (29 trillion 608.5 billion won to 32 trillion 695.1 billion won), Korea Highway Corporation (5 trillion 625.6 billion won to 11 trillion 597.8 billion won), and Korea Land Corporation (7 trillion 277.3 billion won to 11 trillion 257 billion won) recorded a sharp increase of debt.

Lim Tae-Hee, the Chairman of 2nd policy committee of GNP, told that ``most state-owned corporations have invested on the new businesses or have used to improve workers` welfare with their profits, while not having paid the debt. The government should change its consciousness as not taking seriously of debt by the state-owned corporations.``

Ministry of Finance and Economy explained that ``in case of the financial institutions supported by the public fund, their debt increased, but the increase of debt has derived from the increase of deposited funds. Therefore, it is unreasonable to raise the problem simply with the scale of debt. There should be some evidence that the debt has increased due to the irresponsible management.

Ministry of Planning and Budget in charge of the reform of the state-owned corporations, upheld that ``corporations have increased their investment to various SOCs. And the increased debt in highway, harbor, construction, power plant, etc., is not problematic because their assets have increased along with the debts.

Song In-Soo issong@donga.com