[Yoon Administration Economy] Focused Management of Public Institutions with High Financial Risk... Incentives for Self-Help Efforts

New Government Economic Policy Direction

[Asia Economy Sejong=Reporter Kwon Haeyoung] The Yoon Seok-yeol administration is introducing the 'High Financial Risk Institution Intensive Management System' to reform public institutions burdened with massive debt. Through periodic inspections, it plans to streamline the functions and workforce of public institutions, shift from a seniority-based system to a job performance-based system, and provide incentives to institutions that voluntarily pursue innovation.

The government announced these details on the 16th as part of the 'New Government Economic Policy Direction.'

First, intensive management will be conducted for institutions with high financial risk. Among 39 institutions that prepare mid- to long-term financial management plans based on business and financial risk indicators such as debt ratio and return on total assets, about 10 institutions will be selected to establish soundness plans according to mid- to long-term financial goals. The soundness plans will include annual debt reduction targets, business restructuring, and plans for selling non-core assets. Investment, workforce, and fund management for these institutions will also be strengthened.

Additionally, periodic functionality tests of public institutions will be conducted to adjust tasks and personnel that compete with the private sector or overlap with other public institutions.

In particular, to encourage voluntary innovation in public institutions, incentives will be provided if they undertake self-initiated task and workforce reorganization or the liquidation of investee companies. The government will regularly conduct surveys on welfare operation status and check compliance with innovation guidelines, reflecting these in management evaluations.

Incentives will also be given to institutions that advance job-based pay, and efforts will be made to expand job transition training and private-sector dedicated positions. Through this, the plan is to transform the public institutions' compensation, personnel, and organizational management system from seniority-based to job and performance-based.

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