Lack of prudence (KOR)

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Lack of prudence (KOR)

The Moon-Jae-in administration is allowing 23 projects costing 24.1 trillion won ($21.6 billion) to go ahead without preliminary feasibility study to “help achieve balanced development of the country.” On Tuesday, the government approved them from among 33 projects that would have cost a whopping 61 trillion won, mostly infrastructure construction projects. The projects were requested by 17 cities and provinces.

The government decided on the waivers to “narrow the growth gap between Seoul and other parts of the country” due to the concentration of companies, jobs and R&D facilities in the capital area. Prime Minister Lee Nak-yeon underscored the need for waivers after highlighting the deepening wealth gap between Seoul and other regions. Deputy Prime Minister Hong Nam-ki stressed the exemptions are aimed at realizing balanced development of the nation, not at stimulating the economy.

We cannot understand how the administration selected the 23 projects. It turns out 80 percent of them — which amounts to about 20 trillion won in costs — are infrastructure projects, while the remaining 20 percent are strategic projects to boost investments in R&D. For instance, 800 billion won are earmarked for the controversial construction of the Saemangeum International Airport and 1 trillion won are assigned to build roads along the southern and western coasts to promote tourism. The prospects for those two projects are not bright regardless of how you look at them. That’s why suspicions have arisen over the possibility the government is trying to get more votes in the next general election from local residents through pork-barrel spending.

Another concern comes from the massive budget needed. The government says the public doesn’t have to worry because its annual spending will be less than 2 trillion won since the projects will be implemented over the next 10 years. But civic groups remain doubtful. They say that if you include the 29 trillion won in projects already exempted by the government, it is on par with the 60 trillion won in projects exempted by the Lee Myung-bak administration.

As government spending comes from taxpayers, it must be spent carefully. Under the Moon administration, the welfare budget takes up 35 percent of the entire budget. Demand for welfare will increase in the future. The government cannot afford to secure the budget by issuing national bonds as Japan did. Fiscal insecurity shakes a nation. The government must use the budget prudently.

JoongAng Ilbo, Jan. 30, Page 30
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