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Ex-Pres. Lee’s advice for welfare spending and Sejong City

Ex-Pres. Lee’s advice for welfare spending and Sejong City

Posted February. 24, 2015 07:17,   


Former President Lee Myung-bak said, “Maintaining the current level of welfare spending will create a huge burden after 10 years pass. The government should have provided selective welfare from the beginning.” The comments came amid his conversation with Dong-A Ilbo’s chief editor Bae In-joon, which took place right after the 60th anniversary memorial ceremony of Inchon Kim Seong-soo on Feb. 16. Lee`s words shall be regarded as a candid advice from his own experiences as a former president.

In fact, the government’s welfare budget has jumped from 92 trillion won (approx. 82.89 billion U.S. dollars) in 2012 to 115 trillion won (approx. 103.61 billion dollars) this year, an increase of 23 trillion won (20.73 billion dollars) over the past four years. In the meantime, the national tax income has dwindled by 22 trillion won (19.83 billion dollars) since 2012. The National Assembly Budget Office forecasts that the government’s debt will be snowballing to reach 2,000 trillion won (1.80 trillion dollars) by 2030 due to aging of population and decrease in the number of economically active people. It is quite doubtful whether the national finance can sustain such rapidly increasing welfare budget in the future.

The current welfare system has taken on the character of populism as the pro-Park faction (group of supporters of President Park Geun-hye), which gripped leadership of the ruling Saenuri Party, started a free-for-all welfare competition with the opposition party before the 2012 presidential election. In July of the same year, when the free-of-charge childcare for infants up to two years old was in jeopardy due to lack of finance, the ruling party came into confliction with the administration when making a decision over whether or not to revise the free-of-charge childcare welfare. Nevertheless, then-presidential candidate Park Geun-hye made a campaign pledge of "Nuri education course," which expanded the target of free childcare welfare to include three to five-year-old children, resulting in increase of the scale of universal welfare. The high-level policy discussion meeting among the ruling party, administration and the presidential office will be held on Wednesday with the ruling Saenuri and high-level officials from the new Cabinet. This meeting must serve as a venue to recognize the dire situation of welfare finance and to discuss detailed countermeasures.

Former President Lee also expressed regret on the revised plan of Sejong City, saying, “Chairmen of Samsung and LG groups had signed on the Sejong City development project. If the project had been implemented as planned, the city would have been developed as a state-of-the-art hub for businesses.” As of December last year, 36 central administrative agencies completed relocation to the city. The biggest purpose of the city construction was balanced regional development. However, the current Sejong city is not producing the expected effects that could have been generated if it had been developed as a business-oriented city. Public officials working in Sejong City are spending annually transportation fees amounting to 15 billion won (approx. 13.51 million dollars) to travel back and forth to Seoul, wasting a lot of time on the way. It is hard to estimate the administrative inefficiency caused by this. If the North and South Koreas are unified, the public opinion is highly likely to be split over an issue of relocating the administrative capital to or creating a capital of the unified Korea in Demilitarized Zone (DMZ).

It is true that the recently published memoir of the former president contains factors of self-justification. Yet, it also contains diagnosis of the welfare issue and an inconvenient truth about the administrative capital named Sejong, which were learned from Lee`s five-year state administrative experience. What can be taken from his comments is lying on the current administration’s choice.