[Editorial] Korea’s House of Cards

The Roh Moo-hyun government, in its budget plan for next year, which will be the fifth year of this regime, chose to take the way of expanding the deficit by levying more taxes and overspending the national treasury.

The biggest cause that will increase the budget next year is the welfare policy that insists on distribution. On the other hand the investment on social overhead capital construction or R&D is frozen. This budget plan does not prepare for the future, and the government leaves only debts to the next generation.

The government seems to have neither the capability nor the willingness to persuade the nation by presenting a cost-profit analysis explaining the amount of results achievable through a certain level of investment. Its expenditure on things that suit the “code of the regime” hints that it is reckless enough to just let it burst, without calculating carefully the ability of the nation to support the spending or the effectiveness of it.

It is the public sector that includes the government itself and the public enterprises that has prospered over the last 3.5 years since the start of the current government. It raised the number of public servants by 26,000 and plans to add 3,200 more next year. Despite such facts, the ministries demanded that 120,000 more public servants be employed by 2010. A private enterprise would provide much better services to the people with one-third of the number.

335 committees were created in Cheong Wa Dae and ministries excluding the ones targeted for consolidation, but 58 of them, which is 17%, did not hold one meeting last year. Still the elite public officials in the bureau and division chief ranks have to be summoned by the committee to be directed by 386 generation or B grade professors. As the works are conducted forcibly under incapable directors and fixed codes, spending swells up and effectiveness disappears.

The national competitiveness is turning out in inverse proportion to the size of the government. South Korea stepped down from the 19th rank to the 24th last year in the national competitiveness ranking inquired into by the World Economy Forum. The biggest cause is the slide down by 9 steps to the 47th rank of the systemic effectiveness in the public sector. As a result of walking along the route not of “a small government and a big economy” but of “a big government and a small economy” and going against the trend of the world, the government was delivered with such receded grades.

The public enterprises are making themselves busy with job creations for the jobless people in the politics. Out of 196 high official retirees from Cheong Wa Dae, 61 are living in clover working in government subsidiaries. The Korea Gas Corporation has almost filled the positions in the 1~3 ranks such as the president and the auditor through “parachute appointment (appointment ordered from above).” In the early days the government looked out for the public opinion, but now it does not bother to hide its ways of having its own people in the vacancies. They have blamed the “dogs’ silence” for their failure to look after the “Ocean Story" crisis, but now they seem to have covered their ears so as not to hear the barking of the dogs. Administrational effectiveness is unlikely in this type of a public organization.

It is demanding to mention the cases of squandering the national budget, and the management of pensions is a mess, too. When the integration of pensions that overlap with one another would not be satisfying, the government increased the number of pensions from 57 in 2004 to 61 now. The mean yearly salary of the chairmen of the three government-run banks was 636 million won in 2004. No wonder people call it a ‘god-given job.’

In the “Vision 2030” plan presented by the government as a mid- to long-term strategy, thoughts about how to raise earnings are absent and only the rosy picture of welfare prevails. The government is expanding the welfare budget based on its distribution policy, but the poor class gained 250,000 households over the last two years. Dealing with the poor class through fiscal policies has its limitations and is ineffective. It is not possible to relieve the poor class through the failed model of socialism such as expanding the livelihood prestige and offering social (public) jobs, without creating employment and chances for high-level training.

This government has no interest in the strategy of raising the potential growth rate through demanding restructuring and system reforms. It has been making an array of the fiscal expansions, but the growth rate has stayed below the average growth rate of the world economy since this government took over. With the education and the science education captured by the code of fairness, we cannot but be worried how we should support future generations.

National security has been weakened by an immature cry for independence, and the national defense cost has expanded a great deal. All the strategies of the government are the results of misjudgment which will give bad influences to the post government eras. This is what happens when the government is seized by ideologies and lacks practical thoughts. It even gives the impression that it stands aloof from the matters of survival.

If it were a private enterprise, it would have collapsed much earlier or have its CEO replaced several times. As a government that faces no competition or the worries about bankruptcy, a rival-less monopoly literally, it is still insisting on its narrow route. The situation is that a group of people incapable even of managing a small business suddenly took over a nation and is driving it into the swamp of insolvency.