Rival Parties Contest National Debt Calculations

State debts have become a high-profile issue of dispute between political parties in the run-up to the general elections. The opposition Grand National Party (GNP) yesterday attacked the government for failing to overcome the IMF crisis, saying, "Our national debt works out at $9,000 per citizen."

Lee Han-gu, head of the GNP's policy bureau, announced that state debt exceeded $400 billion as of the end of last year. National direct debts reach only $99.9 billion (including central government debt of $84.6 billion and local government debt of $15.3 billion), but Lee added to this sum payment guarantees of $72.9 billion (comprising loan guarantees of $14.4 billion and credit guarantees of $58.5 billion), potential debt from national pension funds of $257.4 billion, and public funds of $18 to $40 billion.

Kim Won-Kil, head of the MDP's policy bureau, rebuffed the GNP criticism, saying, "The IMF classifies only direct government debt as national debt." According to his analysis, state debt stands at only $99.9 billion. He assured taxpayers that they would not take the burden of public funds, and pledged that "the government will achieve a balanced budget by 2004."

But Lee has reiterated his concerns, saying, "When JP Morgan evaluated the state debts of Asian countries last year, it included debts incurred by public enterprises." Pointing out international trends which have tended to expand the debt categories applicable to calculations of national debt, Lee said, "Considering the Korean context, in which the government pays interest on bonds issued by the Korea Deposit Insurance Corporation, it is fair to include potential debts in state debts."

Kim Jeong-ryul, a professional committee member of the opposition United Liberal Democrats (ULD), commented , "Guarantee liabilities are correctly included in state debts."

by Koh Jeong-ae