The article was originally published by NewDaily and translated by OKN Correspondent.
President Yoon Suk Yeol will intensively undergo major surgery on public institutions. President Yoon called for a “drastic innovation,” referring to the lax management of public institutions.
He also demanded more fundamental measures, repeatedly emphasizing “regulatory innovation” last week. It refers to uprooting the “abuse of interest cartel” that blocks economic growth.
“The party is over.” President Yoon announces “big surgery” for public institutions
A key official in the presidential office said in a briefing at the Presidential Office in Yongsan on the afternoon of the 21st that President Yoon ordered an intensive restructuring of public institutions.
The president’s office explained that the background of President Yoon’s remarks regarding the innovation of public institutions was the rapid increase in the size and poor management of public institutions over the past five years. The high-cost, low-efficiency structure seems to have become fixed compared to the increased size of public institutions.
According to the Presidential Office, the number of public institutions increased by 29 over the past five years through the Moon Jae-in administration. The number of employees increased by 116,000, and the debt increased by 84 trillion won (65 billion USD). While the average employee remuneration was 8.3% higher than that of major firms, productivity fell. In addition, the number of public companies that could not even pay interest on borrowed money increased from 5 in 2016 to 18 in 2021.
The presidential official explained, “the cabinet meeting concluded that we should reform public institutions very intensively.”
At the cabinet meeting of the same day, Deputy Prime Minister of Economy and Minister of Strategy and Finance Kyung-ho Choo presented on the innovation of public institutions. He is also said to have repeatedly emphasized the need for intensive restructuring, saying, “the party for public institutions is over.”
“There have been some cases of moral hazard of the leadership and employees besides the lax management, which caused public outrage,” the presidential official said.
“Some have misused the company card during weeknights, and others have studied for their promotional exams in the library after writing off a trip for business. Thus, President Yoon pointed out such serious cases,” he added.
The official also said, “President Yoon pointed out that it was necessary to reduce costs by reducing the excessively spacious office space and selling luxurious office buildings to convert the buildings to monthly rent.”
“President Yoon also said that the public would view it positively if public institutions first show saving costs amid an emergency economic crisis,” he said.
He also mentioned, “in the case of high-paid executives, they should take the initiative by returning the treatment they received and reducing the excessive welfare system. The need for restructuring, such as selling unnecessary assets, was mentioned.”
In this regard, a task force (TF) will be formed in the Ministry of Economy and Finance to redeem costs to the national treasury through restructuring public institutions and return the costs to the socially weak and the underprivileged.
President Yoon says, “innovation of economic regulations starts with eliminating the abuse of interest cartel”
At the cabinet meeting on the same day, President Yoon also emphasized, “we cannot delay the innovation of public institutions any longer. We must put strict evaluation measures on public institutions and boldly reform lax management.”
“The debt of public institutions has risen sharply over the past five years, reaching 583 trillion won (530 billion USD) as of the end of last year,” he pointed out.
“Public institutions should be small in size but doing competent work. We need to make them trustworthy. We need to reform 350 public institutions, and it is a task that all departments should take on as a project for the entire country,” President Yoon emphasized.
“We need an intensive restructuring of the spending system. Money should be used where it is essential, and we should spend financial resources warmly and generously for the truly underprivileged who desperately need government support,” President Yoon demanded, saying that “the government cannot be an exception.”
Referring to the “private and market-led” economy at the cabinet meeting, President Yoon asserted, “we need to boldly reform the systems and regulations that are obstacles to firms.” In his first weekly meeting with Prime Minister Deok-soo Han, President Yoon also stressed that “regulatory reform is the growth of the country.”
“Innovative reform is not just reforming regulations and improving systems. We need to remove the interest cartel and unreasonable rent-seeking decisively, and only this way can we grow our economy,” the President said in raising his voice regarding this matter.
He asked each government department “not to be bound by the existing framework, but to take bold measures that are critical in the field.” Furthermore, he demanded that “each department must quickly implement policies that stabilize people’s livelihoods and revitalize the economy.”
“Last week, the US Federal Reserve raised interest rates significantly. Governments worldwide are taking all-out measures as the world is entering a crisis where it is difficult to predict what will happen next. We too have to concentrate all our capabilities,” he said, raising awareness of the crisis.
“Our economy is in a very difficult situation. Encourage all government officials and public institutions that they are aware of the crisis and work to revive the economy,” President Yoon requested. He also repeatedly demanded, “do not forget that the first, second, and third priorities of all policies are people’s livelihood.”
