Hustling for Early Economic Perk-up

MOSF crisis management committee oversees early budget releases to turn economy around

The Ministry of Strategy and Finance (MOSF) held the 17th Crisis Management Measures Meeting led by Minister Yoon Jeung-hyun on July 15 to check on the results of the government economic stimulus package implemented in the first half and to decide on the direction of fiscal policies to speed up the economic recovery in the second half, Director Yoon Jeung-shik, of the Fiscal Execution Management Division at the MOSF, said.
The government released a total of 167.5 trillion won from its budget and 4.4 trillion won from the supplementary budget totaling 171.5 trillion won in the first half to overcome the economic crisis and relieve the economic downturn.
Minister Yoon said at the meeting that the central government, local autonomous entities and government-run companies have done all they can in the first half to build a base for economic recovery through the early execution of the funds needed for various public projects to arrest the fall of the economy triggered by the Lehman Brothers fiasco last year.
The minister said the government would have to be thorough in the execution of the balance of the budget and check on how the execution is implemented to ensure a speedy economic recovery. He went on to say that the government has to make sure that people can feel the government's efforts to create jobs and implement other projects for a secure livelihood for them without a hitch.
The execution of the budget in the first half consisted of the release of 167.1 trillion won or 64.8 percent of the total annual budget for 2009, 11 trillion won or 4.2 percent more than planned. Of the released funds, 52.9 trillion won have been released for various projects related to creating jobs and a stable livelihood for the public, equivalent to 70.6 percent of the funds earmarked for those areas this year, 47.8 trillion won or 63.8 percent of the allocated funds for those areas.
In the area of boosting economic growth, the government allocated 11.7 trillion won over 3,106 projects, with 9.3 trillion won so far executed for 2,579 projects, equivalent to 79.3 percent of the allocated funds. Another 55.7 trillion won was spent to purchase goods and services from SMEs, or 87.9 percent of the allocated funds for the first half.
The early execution of budget has been smooth on account of adequate preparation and jobsite-centered execution and control, an improved budget execution system and the positive participation of related government agencies.
The Budget Execution Special Inspection Committee held meetings twice a month for 11 meetings in the first half to make sure that the early releases of the government budget go smoothly by improving the system and informing the related organizations, local autonomous entities and government-run companies of the direction of government policies on the early budget releases.
By the end of June, 65 organizations, including 40 from the central government and 25 state-run companies, conducted 1,400 on-the-spot inspections to ensure that the early release of funds were on the right track for a speedy solution to various problems in the way of the early execution of the government budget and the continued innovation of the systems in support of the speedy execution of the funds.
To further speed up the early execution of funds, such processes as the quick bidding system, the expansion of advance payments, providing funds to the local entities before they secure funds and the simplification of preparations before bidding for projects and other necessary steps were improved.
By frequently using the speedy bidding system, the period needed to secure projects from issuing project orders to contract signing has been cut to 20-38 days from the usual 70-90 days.
The advancement of payments will be increased by 10 percent to support contractors' cash holdings and a system to check up on subcontractor payments will be introduced for their protection.
As of the end of June, out of the 49.8 trillion won in total contract amount, 14.6 trillion won or 29.3 percent consisted of advance payments. nw

Minister Yoon Jeung-hyun of the Ministry of Strategy and Finance.