By Kim Da-ye
Bahk Jae-wan, the minister of strategy and finance, and Kwon Hyuk-se, chairman of Financial Supervisory Service (FSS), have spent a month and 100 days respectively in their new positions, and they have been tough periods.
The second half of the year doesn’t look any less dreary for the pair with unwavering inflation and a series of scandals tainting the reputation of the financial authority as well as businesses under its supervision.
Bahk’s biggest task is controlling consumer prices that soared 4.4 percent in June from a year ago. That clearly won’t be easy as the forced discount on petroleum products won’t last much longer.
The Ministry of Strategy and Finance said last week that price stability is its utmost priority and it will now swiftly deal with the high inflation by tightening the money policy and minimizing hikes in utilities prices.
Bahk will also have to lead the reform of the tax system in August and deliver the budget by the end of September in which he has to provide solutions for employment and welfare.
The balance between taxation and welfare recently emerged as a thorny issue with different interest groups failing to reach an agreement.
Students and civic groups have been strongly calling for halving university tuition fees, and the ruling Grand National Party (GNP) pledged on June 23 a 30 percent reduction by 2014.
The plan would require some 6.8-trillion won in taxpayers’ money and provides Park with a challenge, regarding to what extent the government would actually support the proposal and how it would come up with funding.
The finance ministry clearly vowed in the latest policy paper to maintain healthy national finance within the limit of the current budget by shunning unnecessary expenditure.
For Kwon, restoring the public’s confidence in the FSS will be crucial although his efforts could be challenged by the government’s plan to revamp its authority.
Kwon took office on March 28 and had to immediately handle the suspension of operations of the Busan Savings Bank and the subsequent revelations about rampant corruption within the FSS.
Both former and current employees of the authority have been charged for taking bribes from savings banks, and one politician even questioned the need for the FSS because of its cozy relationship with businesses, arguing that it could be integrated into the Bank of Korea or the Financial Services Commission (FSC).
Kwon has worked hard to clean up the institution by switching 71 percent or 185 of 262 team leaders and relocating 25 department heads.
He also banned the staff members from playing golf and drinking excessively.
Such efforts come in the face Prime Minister’s Office setting up its own task force to reform the FSS by weakening its regulatory powers.
Even that task force is known to be struggling. The team has been criticized for consisting mainly of bureaucrats and not being able to bring innovative changes to the FSS. A key member from the private sector also allegedly expressed last week his wish to quit the team.