[Column] Public Institutions Claim "Never Had a Party"... Sighs Over Blocked Promotions and New Hires

Deputy Prime Minister and Minister of Economy and Finance Choo Kyung-ho [Photo by Yonhap News]

[Asia Economy Reporter Kim Bo-kyung] "'The public institution party is over'? We have never had a party."

The Yoon Seok-yeol administration, which advocates for a smaller government, has officially begun downsizing public institutions. A large-scale restructuring, including workforce reduction, downsizing of executive positions, and functional consolidation, is expected to take place across all 350 public institutions. Recently, various ministries, including the Ministry of SMEs and Startups, submitted innovation plans prepared by their affiliated public institutions to the Ministry of Economy and Finance. The collected innovation plans will be reviewed and approved by the Public Institution Management Committee (chaired by the Minister of Economy and Finance) and are expected to be finalized by the end of this year.

Though called innovation, it is essentially austerity management. Going forward, public institutions are expected to tighten their belts in management to secure fiscal soundness. According to the 'New Government Public Institution Innovation Guidelines' announced by the Ministry of Economy and Finance in July, detailed measures such as △refraining from unnecessary business trips △avoiding simple promotional advertising expenses and souvenirs △reducing public utility and fuel costs are specified. Beyond managing public institution finances frugally, a 'stingy' spending diet is anticipated.

[Image source=Yonhap News]

Already, complaints are emerging here and there within the 11 public institutions under the Ministry of SMEs and Startups that the reporter covers. Since their role is to execute support projects for small and medium enterprises and small business owners rather than profit-making business ventures, they are far from the wasteful management the government is concerned about. In response to Deputy Prime Minister and Minister of Economy and Finance Choo Kyung-ho's remark that "the public institution party is over," some responded, "We have never had a party," while others sighed, saying, "Promotions are blocked, and hiring new employees next year seems unlikely." While there is agreement with the innovation purpose of improving work efficiency and productivity, the forecast of tight finances has created a restless and depressed atmosphere within the institutions.

Institutions under the Ministry of SMEs and Startups are reportedly proposing various workforce and budget reduction measures such as reducing the proportion of executive positions, consolidating departments, and cutting operating expenses by 10%. Some have announced plans to return the chairman’s official residence or reduce reception rooms to improve asset efficiency. Public institutions are classified as 'public enterprises,' 'quasi-governmental agencies,' and 'other public institutions' based on staff numbers, total revenue, and asset size. There is a possibility that the Korea Institute of Startup & Entrepreneurship Development may be downgraded from a quasi-governmental agency to an other public institution by raising these classification criteria. The Korea Institute for SMEs and Startups recently had a vacant vice president position, and it has been confirmed that there are no plans to appoint a new vice president. A public institution official stated, "Our situation is completely different from some public enterprises that caused controversies due to luxury buildings and chronic deficits," and added, "The intensity and direction of innovation need to be carefully set."

This content was produced with the assistance of AI translation services.