[VIEWPOINT]Following the public funds trail

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[VIEWPOINT]Following the public funds trail

Public funds are a hot political issue once again. The Grand National Party demanded parliamentary inspection of the government offices concerned, and the Millennium Democratic Party rebutted saying that the request is meant to deflect attention from suspicions over draft-dodging cases. The political issues will definitely lead to a continuous brawl in which assertions and political tactics will prevail rather than truth and logic.

Newspapers are full of gloomy reports of corruption in the process of public fund spending and the heavy burden on the people due to difficulties in retrieving the money. Nonetheless, the government is busy promoting its public funds program as an achievement, and it is kind enough to reveal who will pay back the funds and how much each remitter will pay.

Experts, who should give critical advice, talk in public hearings dubiously about the equality in the pay-back scheme according to different age groups, and some of them make further comments to support the government's point of view.

To make a long story short, we do not know enough about the public funds. I have continuously questioned the financial burden of the public funds since immediately after the foreign exchange crisis of 1997-98, and shamefully, I am still confused. Let us put aside excuses for lack of capability. We are not well informed about the public funds, anyway.

In the second half of 2000, books about the estimated figures of public funds and their whereabouts were published, and a finance watchdog committee was established. However, this occurred after the tremendous sum of 109 trillion won ($90.8 billion) had already been used.

The committee and the books were the result of compromises in the course of demanding an additional 40 trillion won to the initial 64 trillion won, which was far less than necessary. Most of the publicized information about the public funds is merely an elaboration on accounts that the nation would have perished if it had not been for the public funds, and practical information on the prospects of retrieving the public funds is scarce.

Recently, the government announced that 156 trillion won had been used as public funds and 69 trillion won of that sum is irretrievable. However, the loss was already expected to reach that amount. What is unfathomable is that the government made public what would be revealed at the possible end of its administration. The overbearing attitude of a government that offers selective information on the public funds but employs policies on its own is more of a problem.

What worries me is the arbitrary method used to redeem the 69 trillion won. The irretrievable amount will be made up for with 20 trillion won from financial institutes and 49 trillion won from the national budget over the next 25 years. This might sound like a solution. But it is not proper to suggest a solution without understanding the basic problems. It would just be a superficial answer.

Even though accelerated reforms and increased retrieval of the funds are not sufficient to solve the problem, the government is turning over payment of the funds to the people, as if a court has closed a case, without a convincing explanation on the increasing interest due by extending the time limit of retrieval.

Increasing the payment burden on banking agencies and raising the rate of corporate taxes would definitely affect consumers, workers and depositors. And yet, questions await answers.

Questions like why the results of reforms are not satisfactory after spending this astronomical amount of money, whether more money will be necessary, and who will be held responsible for all the faults in the process until now and how.

Approval from the people should be a precedent if the government decides on a tax hike to make up for the loss of funds. It is not that taxes should not be used, but they should be used properly with transparent evidence of use.

Parliamentary inspection of the administration should be done as well, not because it is requested by the Grand National Party but because the people want it. I sincerely hope that parliamentary inspection of the government would not be used as another election campaign ploy.


The writer is a professor of economics at Ewha Woman's University.

by Chun Chu-song

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