[Opinion] Let's Revive the Ministry of Economy and Finance's 'Planning'

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The Ministry of Economy and Finance was established during the Lee Myung-bak administration in 2008. It is an organization that integrated the financial sectors of the former Planning and Budget Office and the Ministry of Finance and Economy. The Planning and Budget Office, as its name suggests, strategized on where to allocate the budget and was responsible for budget formulation, execution, and management. It also oversaw tasks related to fiscal innovation and public innovation. Additionally, it integrated the economic policy formulation and coordination functions of the Ministry of Finance and Economy.

During the Park Geun-hye administration in 2013, the Minister of Economy and Finance concurrently held the position of Deputy Prime Minister, making it the de facto control tower for economic policy. It oversees major economic and fiscal policies, formulates budgets and funds, and manages significant tasks such as foreign exchange, national treasury, taxation, international finance, and public institution management.

One of the most important tasks of the Ministry of Economy and Finance is to establish mid- to long-term national development strategies. The most challenging issue Korea currently faces is low birthrate and aging population. For this reason, the Ministry’s Future Strategy Bureau includes the Future Strategy Division and the Population Economy Division. Separately, the Presidential Committee on Low Birthrate and Aging Society (Jeogowi) develops related strategies. The Ministry of Health and Welfare also has a Population Policy Office with practical divisions such as Population Policy Coordination, Birth Policy, and Elderly Policy.

Just by looking at the names of these organizations, there are ambiguous aspects. Even if each ministry clearly divides its areas of responsibility, it is difficult to clearly define jurisdiction when considering where newly arising tasks should be handled.

In particular, although Jeogowi is directly under the President, it is evaluated as failing to serve as a control tower for low birthrate and aging-related issues. Since last year, the National Assembly has repeatedly pointed out the need for a new organization to handle population issues, as Jeogowi lacks policy implementation or drafting functions.

Currently, even if Jeogowi suggests policy directions, it is of little use if the practical organizations scattered across ministries do not share the goals. If policies are not directly executed but merely passed on to ministries, the driving force behind the policies diminishes. From the perspective of government organizational governance, the structure makes it difficult for a ‘committee’ to perform its role effectively. This is also why many committees directly under the President or Prime Minister end up as short-lived activities or remain nominal and ineffective.

So far, ideas to replace Jeogowi have included proposals such as "creating a Population and Family Agency" or "establishing a Population Bureau under the Ministry of Health and Welfare." These are generally interpreted as intentions to create a separate ministry or bureau-level government organization to comprehensively handle population issues. The government, however, maintains the position that it is preferable to address shortcomings by reinforcing Jeogowi’s own functions and personnel. Kim Young-mi, Vice Chair of Jeogowi, said at the National Assembly’s Special Committee on Population last year, "The population crisis is very complex and requires inter-ministerial coordination and linkage," adding, "There are doubts about whether combining scattered policies into a single bureau or ministry would be effective."

Formulating and implementing national strategies to address population issues was originally within the Ministry of Economy and Finance’s scope. Collecting diverse opinions from various ministries and turning them into national policies, as well as budgeting for them, are tasks the Ministry excels at. If the Deputy Prime Minister, who is also the Minister of Economy and Finance, directly oversees population issues, policies can be promoted more swiftly. Allowing the Ministry of Economy and Finance to demonstrate its ‘planning’ capability to solve national challenges would be the first step closest to the correct answer compared to other alternatives.

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