Ahn Il-hwan, the second vice minister of the Ministry of Strategy and Finance, emphasized the importance of financial management, citing Japan’s’crocodile mouth’ graph, where national debt increases while national tax income decreases. It is analyzed that the ruling party indirectly expressed concern about the simultaneous promotion of national and selective disaster subsidies.
Source: Japan Ministry of Finance, Hyung-soo Park, visiting professor at Yonsei University
Vice Minister Ahn presided over the second investment execution inspection meeting at the government office in Seoul on the 4th, saying, “In order to overcome the corona crisis and protect the country that future generations can afford, wisdom is to allocate limited resources efficiently to the right place. It is important.” This is in line with the remarks on Facebook on the 2nd of Deputy Prime Minister Hong Nam-ki and Minister of Strategy and Finance that “the value of’the right place to apply where needed is very important and basic’ rather than’the more is better’ for financial management.” .
Vice Minister Ahn also said, “At a time when the role of finance and the public sector is more emphasized and demand is explosively increasing in various places in society, we must pledge to the vocation of fiscal management. In the context, it is necessary to recall the meaning of Japan’s’crocodile mouth graph’, which warned of the irreversibility of fiscal spending.”
While Deputy Prime Minister Hong Nam-ki is having a nervous war with the ruling party over the issue of the 4th disaster subsidy payment, Vice Minister Ahn, who oversees the budget of the Ministry of Equipment, made a remark to support Deputy Prime Minister Hong by referring to the’crocodile mouth graph’.
The’crocodile mouth graph’ refers to a debt structure in which national debt increases in the form of a’crocodile mouth’ due to continuous increase in expenditure and decrease in tax revenue.
Japanese finances resembling an alligator’s mouth. Graphic = Reporter Kim Joo-won [email protected]
Japan, which has greatly expanded welfare since 1973, paid for the welfare budget by debts when the economic bubble burst in the 1990s. As a result, Japan’s revenues and expenditures, which ran parallel until the end of the 1980s, changed their direction from 1990. The money you spend keeps paying, but the money you come in decreases, and the distance between them grows further. It became the shape of an open crocodile’s mouth.
In Japan, the ratio of national debt to GDP increased more than seven times from 32% in 1977 to 220% in 2019. In academia, there is great concern that Korea is following Japan’s precedent.
Park Hyung-soo, a visiting professor at Yonsei University, who served as the head of the Korea Institute of Taxation and Finance and the head of the National Statistical Office, said in a call with the JoongAng Ilbo, “Korea has already started the crocodile mouth graph in 2019, and it should be seen that it has progressed further.” It should be recalled that the state debt situation has become so severe that the mouth of the crocodile is open during the period and not closed afterwards.” He added, “We need to be more alert because the financial soundness of Corona 19 is bound to deteriorate.”
Vice Minister Ahn also said, “Considering that the efficiency of the public sector is linked to the public burden, the government as well as public institutions should take great care to ensure that even small resources are not wasted in the investment execution process and can be concentrated in the necessary fields.” said.
Sejong = Reporter Son Hae-yong [email protected]