The BAI must act

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The BAI must act

The Covid-19 outbreak has challenged the entire world. The United States is enforcing a lockdown on 75 million citizens while all factories have been shut in Italy. In the wake of the worst global crisis since World War II, concerns about negative growth and massive layoffs stemming from a shutdown of manufacturing and services are ever-deepening in Korea. Deputy Prime Minister for Economic Affairs Hong Nam-ki expressed worries about the possibility of recessions for up to four years. Following an 11.7 trillion won ($9.4 billion) supplementary budget, the Moon Jae-in administration announced another 50 trillion won in emergency funds to help the struggling players in our economy. But that could be useless in the face of the red tape that forces applicants for emergency loans to wait two to three months to get the money they need.

A fitting corollary is a patient in need of an oxygen respirator, but unfortunately his or her arteries are blocked due to the deep-rooted bureaucracy of the Board of the Audit and Inspection (BAI) and the widespread culture of non-action in officialdom. Despite the urgency of the outbreak, government officials are blindly following their rule books.

Their extreme passivity exacerbates the hardships of the self-employed and mom-and-pop stores across the country. According to the Ministry of SMEs and Startups, only 9.2 percent of emergency funds were executed from Feb. 13 to March 10. As a result of the drastic enforcement of unpaid leave in the aviation, hotel, automobile and shipbuilding industries, contractors are on the brink of collapse. And yet, the head of the state-run Industrial Bank of Korea has been accused of violating the 52-hour workweek by a union after employees had to work overtime to process requests for loans.

The government revised the BAI’s guidelines Thursday to effectively deal with the economic crisis. Yet the effect remains to be seen due to a critical lack of specifics. Civil servants will hardly put the revision into action under such circumstances. The BAI has reacted by promising a “fast preliminary consulting” with ministries in need. But how many officials would dare to request such a “fast track”?

In a battle against an extraordinary enemy, all the decision-making should be streamlined. The Financial Supervisory Service, in particular, must simplify the process of companies getting loans from private banks. Otherwise, money cannot reach needy enterprises.

The government must take a cue from the Lee Myung-bak administration, which ordered the head of the BAI to join an emergency meeting led by the president. We hope President Moon does the same to hear plans by the BAI to save the economy.

JoongAng Ilbo, March 23, Page 30
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