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Rampant irregularities involving state subsidies

Posted December. 04, 2014 06:21,   


The state and local autonomous governments provide subsidies for private organizations or businesses in accordance with their policy goals. The amount of such subsidies increased from 30 trillion won (27 billion U.S. dollars) in 2006 to 50.5 trillion won (45.4 billion dollars) last year, accounting for 14 percent of the state budget. As the huge amount of money is doled out to various fields, such as modernization of cattle sheds, fuel subsidies for cargo trucks and vessels, occupational training and even Korean traditional wrestling games, government subsidization has become the hotbed for irregularities and corruption. Some people even say that finders are keepers.

The prosecution and the police announced Wednesday that as a result of their joint investigation, they caught 5,552 people who illegitimately received or misused nearly 311.9 billion won (287.7 million dollars) in state subsidies, detaining 253 of them. The amount was nearly double the estimation by the Office for Government Policy Coordination under the Office of the Prime Minister last year.

The latest investigation reaffirmed that irregularities involving state subsidies are widespread from public health and welfare sectors to culture and sports. By type, misuse of subsidies accounted for 53 percent, while subsidy fraud was 40 percent. At a time when state subsidies amount to over 50 trillion won (45 billion dollars), the government`s sloppy management of subsidies, misuses and frauds have become chronic structural malaises.

The government plans, albeit belatedly, to abolish subsidized projects involving irregularities or require fraudulent recipients to compensate up to five times the amount of subsidies they received. It is necessary to accelerate the legislation process for the plan. In addition to the law enforcement agencies` continued crackdowns, the government should overhaul its management system for state subsidies.