Gangwon-do to Reduce Debt by 34% by the End of Next Year... Accelerating Fiscal Innovation
60% Reduction Targeted During the 8th Term of Gangwon Province's Civil Administration
[Asia Economy Reporter La Young-cheol] Gangwon Province is undertaking high-intensity fiscal reforms, including repaying local government debt, to restore fiscal soundness.
In particular, it plans to institutionalize strengthened procedures such as local council approval for guarantee debt and central investment review for local government investment projects including guarantee debt.
Gangwon Province stated on the 8th, "While aiming to reduce debt by 60% during the 8th term of the elected Gangwon provincial government, we plan to reduce debt by 34% by the end of next year."
According to the province, the total debt of Gangwon Province, which was 1.0243 trillion won in the first year of the 8th term, will be reduced by 294.2 billion won (28.7%) by the end of the year, bringing the total to 730.1 billion won.
This is due to the fact that no second supplementary budget was made, so the originally planned debt issuance of 160 billion won this year did not occur, and the repayment of 205 billion won in guarantee debt for Gangwon Jungdo Development Corporation (GJC) was made using its own resources.
Also, by early repayment of debts of 29.2 billion won and 26.6 billion won maturing at the end of next year, the year-end debt amount will decrease to 674.3 billion won, and the province plans to reduce a total of 350 billion won (34.2%) in debt by next year.
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Meanwhile, regarding the fact that there was no approval from the provincial council for the increase in guarantee debt amount related to the Legoland development project on November 27, 2014, the province decided to proactively strengthen local government debt management in accordance with the Ministry of the Interior and Safety's announcement on the 7th about strengthening local government debt management.
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