No more politically-tinged budgets

The government-set guidelines for the 2002 budget compilation attest to how difficult it will be for the government to manage state affairs next year. Because the projected income scale is limited due to the persistent economic slowdown and fiscal demand is rapidly increasing, the government has laid down a set of principles calling for curbing new projects to a maximum extent while freezing budget outlays for basic programs at the current level. Yet it is doubtful that the proposed policy goal will be attained under the present circumstances. Fiscal requests from government agencies for next year have increased about 65 percent compared with the current state budget scale, indicating the difficulties ahead for the government`s budget compilation. At this juncture, the government should take stringent actions to curtail proposed budget spending.

Notwithstanding, we are skeptical about the fact that the 2002 budget guidelines are formulated on the assumption of five percent economic growth. This runs against prevalent economic growth projections made by the Korea Development Institute and other economic research institutions, which hover around four percent for the coming year, lower than their previous estimates. Specifically, a series of new inflexible expenditures such as for the expansion of compulsory education and increased state subsidies for medical reform programs are on the waiting list. In this regard, it is unknown what hidden cards the government has, at a time when less expenditures are required due to expected fiscal constraints. What concerns us most is the presidential and other elections to be held next year. As a matter of fact, there is no denying that successive governments have compiled politically influenced budgets in connection with the major elections in past years. And undeniably, during the initial process of budget formation, the former and present governments underlined financial retrenchment policies, but later such tight-money budgets were craftily adulterated with through political intervention mindful of the elections. For now, the question is whether the government will be able to establish an integral budget program free from political influence.

The compelling reason that next year`s money bill should differ from previous ones is the ominous financial situation at present. The nation is now experiencing a prolonged economic downturn starting with the unparalleled financial crunch that broke out in late 1997. And the government has pronounced that it would come forward with a balanced spending bill from 2003, but its commitment would be rendered naught if next year`s budget is spoiled by the election.

If the financial woes persist, it is the general public that must shoulder the burden. It should be recalled that the public funds to be injected next year and interest on state bonds will amount to 1.75 trillion won. In this light, budget planning authorities need firm resolve not to knuckle under to any political pressure or influence. At the same time, the political sphere requires self-restraint in this connection. How much state debt the incumbent government will hand over to the next administration hinges on how it compiles the 2002 budget bill. The people will closely watch the process of budget formulation.