[FOUNTAIN]Strong ideas needed for fiscal policy

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[FOUNTAIN]Strong ideas needed for fiscal policy

Until the two agencies were merged into the Ministry of Finance and Economy, the Economic Planning Board and the Ministry of Finance had completely different styles. The Economic Planning Board was known for its liberal style, while the “Mofia,” a nickname for Ministry of Finance officials, was synonymous with conservative bureaucrats. Economic Planning Board officials used to leave the doors open when they were in the office, but Ministry of Finance executives kept their office doors shut while working but open when they were out.
The two agencies were often at odds with each other. The Ministry of Finance was the most powerful government agency commanding actual economic policy such as finance and taxation, and running the national treasury. Only the Economic Planning Board, created in 1961, could check the Ministry of Finance with its powers to oversee economic policies and budget. The Ministry of Commerce, the predecessor of the Ministry of Commerce, Industry and Energy, and other agencies could begin discussions with the Ministry of Finance only after approval by the Economic Planning Board.
That changed 10 years ago when President Kim Young-sam’s administration integrated the Economic Planning Board and the Ministry of Finance into the Ministry of Finance and Economy. After the merger, the Ministry of Finance and Economy had final authority on policy decisions.
Critics are concerned that the biggest problem with the establishment of the Ministry of Finance and Economy is the absence of an outside entity that can generate fresh ideas for management of the Korean economy. Some even blame the integration of the two ministries for the Korean economy’s 1997 collapse. Recently, Koreans are concerned that we do not have a commander for the economy. The opinions of the deputy prime minister are often reversed by Blue House advisers. There is a belated effort to create a consultative body among the governing party, government and Blue House officials. However, the consultative body is likely to be swayed by political interests and current issues. There is no entity that can take a step back and forecast the future of the Korean economy and suggest policy directions. When policies on current issues lack consistency, we may long for a new Economic Planning Board.

by Lee Se-jung

The writer is an editorial writer for the JoongAng Ilbo.
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