ID :
209677
Tue, 09/27/2011 - 11:57
Auther :
Shortlink :
https://oananews.org//node/209677
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(Yonhap Editorial) Gov't should show crisis management capability
SEOUL, Sept. 27 (Yonhap) -- The government Tuesday announced its budget proposal for next year and a mid-term fiscal management plan for 2011-2015. The focus of the government's budget plan is the creation of new jobs.
"It is inevitable to place the top policy priority on job creation in order to minimize the impact of the global fiscal crisis on the real economy," Finance Minister Bahk Jae-wan told reporters. "We drew up next year's spending plan as a jobs budget." To that end, the government will use 9.5 trillion won to create 562,000 jobs for younger people, senior citizens and others vulnerable to an economic slowdown. It is up from this year's 9 trillion won allocated for the same purpose, according to the ministry.
The government's plan to focus on job creation next year is regarded as proper as it is designed to establish a structure of growth, jobs and welfare. That the government aims to achieve a fiscal balance by 2013, one year ahead of its orginal plan, is also deemed to be desirable. "Moving up the schedule for a balanced budget by one year is to show our will to hand over the state coffers in better shape," Minister Bahk said. "We need to actively remove spending on non-essential and non-urgent projects and slim down."
In view of the European financial crisis, securing fiscal soundness cannot be overemphasized. What is important is the feasibility of the government's plan.
The global financial crisis originated in Europe is driving global financial markets to the state of panic and the slowdown in the U.S. economy is becoming more visible leaving the future of the world economy very uncertain.
The rosy financial plan of the government was based on the premise that the domestic economy will grow by around 4.5 percent next year. The government's growth prediction is similar to those by the International Monetary Fund (4.4 percent) and the Asian Development Bank (4.3 percent). However, it is much higher than those of domestic economic research institutes. The Samsung Economic Research Institute and LG Economic Research Institute put out a 3.6-percent growth prediction while the Hyundai Research Institute released a 4.0 percent growth prediction.
Domestic economic growth depends on how the world economy changes. It is a prevailing view that the economic recovery in the U.S. and Europe will take considerable time and may undergo a prolonged economic recession. In that case South Korea may have to increase financial spending and achieving a fiscal balance may take longer.
Creating jobs also poses similar problems. Job creation should be supported by economic growth and it cannot be realized with only the expansion of the government's budget. To that end, businesses should increase investments and employment, but they actually are moving to reduce them. The government should ease various regulations to encourage businesses to increase investment and employment
The government is also advised to confirm the effectiveness of the financial expenditures frequently so that state finances should not be wasted next year when the presidential and general elections are scheduled. The populist welfare pledges may hamper the operation of sound finance. The government should show its capability of managing economic and financial crises and the people should pay special attention to politicians' reckless campaign pledges for excessive welfare.
(END)
"It is inevitable to place the top policy priority on job creation in order to minimize the impact of the global fiscal crisis on the real economy," Finance Minister Bahk Jae-wan told reporters. "We drew up next year's spending plan as a jobs budget." To that end, the government will use 9.5 trillion won to create 562,000 jobs for younger people, senior citizens and others vulnerable to an economic slowdown. It is up from this year's 9 trillion won allocated for the same purpose, according to the ministry.
The government's plan to focus on job creation next year is regarded as proper as it is designed to establish a structure of growth, jobs and welfare. That the government aims to achieve a fiscal balance by 2013, one year ahead of its orginal plan, is also deemed to be desirable. "Moving up the schedule for a balanced budget by one year is to show our will to hand over the state coffers in better shape," Minister Bahk said. "We need to actively remove spending on non-essential and non-urgent projects and slim down."
In view of the European financial crisis, securing fiscal soundness cannot be overemphasized. What is important is the feasibility of the government's plan.
The global financial crisis originated in Europe is driving global financial markets to the state of panic and the slowdown in the U.S. economy is becoming more visible leaving the future of the world economy very uncertain.
The rosy financial plan of the government was based on the premise that the domestic economy will grow by around 4.5 percent next year. The government's growth prediction is similar to those by the International Monetary Fund (4.4 percent) and the Asian Development Bank (4.3 percent). However, it is much higher than those of domestic economic research institutes. The Samsung Economic Research Institute and LG Economic Research Institute put out a 3.6-percent growth prediction while the Hyundai Research Institute released a 4.0 percent growth prediction.
Domestic economic growth depends on how the world economy changes. It is a prevailing view that the economic recovery in the U.S. and Europe will take considerable time and may undergo a prolonged economic recession. In that case South Korea may have to increase financial spending and achieving a fiscal balance may take longer.
Creating jobs also poses similar problems. Job creation should be supported by economic growth and it cannot be realized with only the expansion of the government's budget. To that end, businesses should increase investments and employment, but they actually are moving to reduce them. The government should ease various regulations to encourage businesses to increase investment and employment
The government is also advised to confirm the effectiveness of the financial expenditures frequently so that state finances should not be wasted next year when the presidential and general elections are scheduled. The populist welfare pledges may hamper the operation of sound finance. The government should show its capability of managing economic and financial crises and the people should pay special attention to politicians' reckless campaign pledges for excessive welfare.
(END)
