President Yoon's 'I XX' Budget Faces Obstacles from the Start of National Assembly Budget Review

President Yoon's Budget Pledged at Last Month's September Global Fund Financial Pledge Meeting
Budget Policy Office's Analysis Report Points Out Budgeting Methods
Need to Utilize General Account Transfers More Than New Projects

President Yoon Suk-yeol is speaking at the 7th Global Fund Replenishment Conference held in a building in New York, USA, on the 21st (local time).
[Image source=Yonhap News]

[Asia Economy Reporter Naju-seok] The budget related to the ‘Global Fund’ promised by President Yoon Seok-yeol during his visit to the United States has been stalled at the initial stage of the National Assembly’s review. This is the budget that sparked controversy after President Yoon used ‘vulgar language’ towards the National Assembly.

According to the National Assembly Budget Office’s analysis of next year’s budget on the 2nd, the government has prepared a budget of 100 billion KRW as a new project under the name of the Global Health Contribution Project for next year. The Budget Office pointed out regarding this project, "The newly established Global Health Contribution Project is partially allocated to the general account due to a shortage of funds in the International Disease Eradication Fund, which previously carried out the project. This does not align with the project’s performance management and the purpose of establishing the fund. Therefore, it is necessary to maintain the project as a fund project by utilizing transfers from the general account."

This project was the budget promised by President Yoon on September 22nd when he attended the 7th Financial Pledge Meeting of the Global Fund. At that time, as he left the meeting room, President Yoon said, "If these XX in the National Assembly don’t approve it, what will Biden do, feeling embarrassed?" which caused controversy. Later, Kim Eun-hye, the Chief of Public Relations, explained in a briefing that the concern was directed at the opposition party and the National Assembly, not the U.S. Congress. It meant that if the National Assembly, especially the ruling Democratic Party, which holds the majority, does not handle this project, it would be embarrassing for the President. Subsequently, during the verification process at the Presidential Office, President Yoon stated that he "finds it difficult to recall" the remark, raising further controversy over whether vulgar language was used.

The Budget Office’s budget analysis report is one of the key reference materials for lawmakers when reviewing the budget, along with the preliminary review reports from the relevant standing committees. This year, the Budget Office was the first to point out this project among the Ministry of Foreign Affairs’ individual projects, with the issue focusing on the method of budget formulation.

Originally, South Korea has operated the International Disease Eradication Fund to combat diseases through global vaccine development and distribution, supporting international organizations such as the United Nations Conference on Trade and Development (UNCTAD) and the Coalition for Epidemic Preparedness Innovations (CEPI). The main source of income for this fund (over 90%) is the departure tax, known as the departure fee. The problem is that while the departure fee collected was 41 billion KRW in 2019, the amount sharply decreased to 1.3 billion KRW last year due to a drastic drop in travelers caused by COVID-19 and other factors, resulting in reduced funding. The Ministry of Foreign Affairs explained that, in response, some of the fund’s projects were transferred to the general account due to the reduced fund resources.

The Budget Office stated, "Classifying and allocating projects that have been supported according to the purpose of the fund’s establishment into both the general account and the fund due to a shortage of resources makes it difficult to track project progress and manage performance." It also said, "Paying specific contributions to the same international organization from different sources complicates financial management. Rather than separating the funds, it is more efficient to temporarily use transfers from the general account to support the fund’s projects."

A fiscal expert expressed skepticism about the agreement of the Ministry of Strategy and Finance, although the Ministry of Foreign Affairs and others might prefer to have separate accounts rather than their own funds for such budget formulation. Lee Sang-min, Senior Research Fellow at the Nara Salrim Research Institute, said, "Just as it is better to buy a soccer ball with your mother’s money than your own, it is natural for the Ministry of Foreign Affairs to want to secure resources through the general account rather than its own fund," but he also pointed out, "It is questionable that the Ministry of Strategy and Finance, which acts as the gatekeeper of the budget, failed to filter this out."

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