South Korea aims to cut state spending by 2.5 trillion won ($2.54 billion) this year as part of efforts to enhance the efficiency and competitiveness of government organizations, the finance ministry said Tuesday.
The saved money will be used mainly to reinvigorate the national economy and stabilize the livelihoods of ordinary people, the Ministry of Strategy and Finance said in a press release.
President Lee Myung-bak has been pushing for a 10-percent budget cut as part of his drive to downsize the government and enhance competitiveness in the public sector by introducing business-style management. South Korea, Asia's fourth-largest economy, assigned 257.3 trillion won for its 2008 state budget.
Last month, the ministry in charge of the nation's budget and financial policies said that it will trim around 2 trillion won this year first and then push to save 18 trillion won in spending next year in line with the government's frugal spending plan. It also plans to review all state-led projects from the "zero base."
The ministry said it will spend the money gained as a result of the cost-cutting efforts this year in creating jobs, stabilizing livelihoods of ordinary people, providing better public services and more tax cuts.