President-elect Park Geun-hye hinted at issuing bonds to raise funds needed to support her campaign pledges during a meeting with reporters Wednesday. She stated, ``There may be a need to issue state bonds to meet promises to help improve people’s livelihoods.’’
No wonder politicians try to fully deliver on their pledges after being elected. This is all the more so, considering Park’s political trademarks of ``principle’’ and ‘’trust.’’
But overblown adherence to campaign pledges could cause serious side effects and this undesirable situation is about to unfold here.
A case in point is the latest conflict over a draft bill to include taxis as public transportation pushed in a rare show of nonpartisan unity ahead of the Dec. 19 presidential election. Since the poll, the governing Saenuri Party is making it clear that it will join forces with the main opposition Democratic United Party to pass the bill despite a host of problems.
Designating taxis as a form of public transport is unprecedented in any country in the world. Furthermore, at least 2 trillion won in taxpayers’ money must be provided for taxis each year, when they are usually used by relatively well-off people.
Park’s pledge to cut delinquent borrowers’ debts by up to 70 percent is also cited as product of populist rhetoric because of the lack of reality in its implementation. Aside from the difficulty of raising 18 trillion won in funds to address the problem of delinquent borrowing, the biggest victim of the proposal will be dutiful borrowers who have been faithfully repaying their debt. Simultaneously, the risk of moral hazard will hit the nation because it will clearly set a bad precedent.
Park’s promise to raise 48 trillion won for welfare without raising taxes is also in doubt. Her aides say the pledge is feasible if the incoming administration merely fine-tunes the current tax system ― for example, limiting tax deductions granted to high-income earners. But experts say such fine-tuning will only result in 500-600 billion won in increased taxation a year at best.
The culmination of Park’s populist pledges is a hurriedly-built promise to shorten mandatory military service by three months to 18 months made on the eve of the election day. Park’s rival candidate, Moon Jae-in, made a pledge to this effect much earlier to appeal to young voters. Military experts say the pledge is problematic in many respects, given a shortage of manpower in army barracks and the huge amount of money needed to compensate for the anticipated troop shortage.
It’s no exaggeration to calculate that about 131 trillion won is needed to deliver all of her campaign pledges. We, in this regard, believe that it’s all but impossible to keep promises while maintaining the nation’s fiscal soundness amid the global economic downturn.
The President-elect needs to re-examine her campaign pledges even now and confess courageously to the nation about these problems. And then she must readjust her order of priorities with regard to her pledges and boldly drop unrealistic ones.