Government unveils public sector overhaul

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Government unveils public sector overhaul

In response to growing criticism of public institutions for lax management practices, the government has come up with a comprehensive plan to overhaul the public sector with stricter rules.

The Ministry of Strategy and Finance announced a set of measures to help public entities improve their financial situations, enhance transparency, increase responsibility and boost their contribution to the national economy by creating more jobs.

“Since public corporations and institutions have been blamed for their rising debt, the government will focus on helping heavily indebted institutes,” said Lee Suk-joon, vice finance minister, at a briefing in Sejong yesterday. “However, we are not currently considering a measure to evict or dismiss those with massive debt.”

The total amount of debt at 295 public entities, including 30 public companies, 87 quasi-government organizations and 178 public institutes across the nation stood at 493 trillion won as of late last year. The figure shot up by 34 trillion won from the previous year.

In 2012, the institutes hired a total of 254,000 people, accounting for 40 percent of the government’s total civil servant workforce.

The 30 public corporations alone had sales of 181 trillion won, 128.3 percent that of Samsung Electronics last year.

In addition to the growing debt, the recent corruption scandal in the nuclear power plant industry has illustrated rampant bankrupt practices in the public sector, which has deepened public distrust, the ministry said.

As part of efforts to revamp the public sector, the Finance Ministry said the government will make those in the public sector lead the nation’s labor market by creating new jobs.

For the next four years, the government will require public institutes to add 70,000 jobs, contributing to the government’s goal of reaching a 70 percent employment rate.

For the past five years, there has been no job creation due to the last administration’s attempts to downsize public entities or integrate institutes with overlapping functions.

To eradicate the chronic problem of “parachute appointments” in the public sector, the government will empower the current nominee recommendation committee to have greater responsibility in selecting qualified candidates for executives or heads of public institutes.

Currently, the nominee recommendation committee has been recommending five candidates for one post on average to the public institution operation committee, which narrows the list to two or three.

The nomination process takes about 40 days under the current system, but the government wants to shorten it to 26 days by excluding the operation committee from the whole process.

As for qualifications of successful candidates, the government will announce higher standards in the near future.

“Professionalism will be considered the most important requirement, so promotions of internal candidates to top management posts will be made more frequently than before,” Lee said. “However, outside candidates, if qualified, will still be competitive.”

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