Transcript PowerPoint 프레젠테이션

Linking Policy, Planning and Budgeting :
Korean Experience and Challenges
February 6, 2007
Kang Ho Lee ([email protected])
Director, Growth Strategy Division
Ministry of Planning and Budget
Republic of Korea
0
1. Background of Fiscal
Reforms in Korea

Forecasting on additional spending in the future
– Need extra resources, 1,100 trillion won for vision 2030

Reallocation of expenditure between economic and
social welfare resulted in aging and polarization
problems
– social welfare as % of total expenditure :
9.9% (1980) → 25.2% (2005)  40.0% (2030)
– % of the population over 65: 7.2% (2000)  14.4%(2019)  24.1%(2030)

Increasing national debts after 1997’s Korean financial
crisis
– % of GDP : 12.3(1997)  23.0(2003)  33.4(2006)

Need to enhance the efficiency in public spending
1
1-1. Forecast of Fiscal Resources
in Vision 2030
Extra resources in need : 2% of GDP (avg]
More Spending
w/o
Inst. Reform
Total
Expen
diture
Savings from
Inst. Reform
under
Vision 2030
3% of GDP
2% of GDP
Current System
2
1-2. The Change of Resource Allocation
in Vision 2030
• Increase of social welfare expenditure in the budget
: 9.9% (1980)  25.2% (2005)  40.0% (2030)
• Decrease of economic spending in the budget
: 26.0% (1980)  19.9% (2005)  10.0% (2030)
ratio of budget
50.0
welfare
40.0
30.0
20.0
10.0
Economy
0.0
1980
1990
2000
2005
2010
2020
2030
3
1-3. National Debt Ratio of GDP since
1997
Ratio(%)
33.2
30
23.0
33.4
32.9
32.3
31.3
25
18.6
20
15
National Budget Support to
Economic Crisis(￦49 Trillion)
12.3
10
IMF Economic
Crisis
5
0
-5
’97
’98
’99
’00
’01
’02
’03
’04
’05
’06
’07
’08
’09
‘10
2. Framework of Major Fiscal
Reforms
System
Top-down
Budgeting
Program Budget
Performance
Management
National
Fiscal Management
Plan
Increased
efficiency
Operation
Enhanced
linkage
Building an advanced
Public Expenditure Management System
Legal
Framework
National
Fiscal
Act
in 2006
5
2-1. What organization is
responsible for budget reforms?




President has initiated budget reforms in 2003
MPB has taken actions on budget reforms after that
Congress passed the National Fiscal Act last year
Lots of discussion between MPB and line ministries
President
MPB (Budget M)
Congress
Line Ministries
<History of budget ministry>
 EPB (Deputy Prime M), 1960s~1994
 MOFE (Deputy Prime M), 1994~1998
 MPB (Minister), 1998~present
6
3. Linking Budget to Plans
3-1. NFMP(MTEP)
 Discordance of 2007 budget between ’06~’10 NFMP
and’04~’08 NFMP
– Difference of total expenditures : 1.8%
– Difference of Revenue : 4.4%
(unit : trillion won)
2007 Budget in NFMPs
’04~’08(2004)
’05~’09(2005)
’06~’10(2006)
Expenditure
234.2
234.8
238.5
Revenue
263.0
253.6
251.8
Managed fiscal balance
(Ratio of GDP, %)
0.3
1.1
1.5
National Debt
(Ratio of GDP, %)
28.8
31.7
33.4
GDP growth rate
5%
4.9%
4.6%
7
3-2. Program Budgeting
 Program budget is a critical “building block” to link NFMP,
Top-down budgeting, and PMS in a whole Process
– For NFMP: provide program initiatives to
represent medium-term national priorities
NFMP
(MTEF)
– For Top-down Budgeting: provide the
consultative bases to decide expenditure
ceilings between line ministries and MPB
Program
Budget
Top-Down
Budget
PMS
– For Performance Management System:
provide the units to link resources and results
8
4. Challenges to Performance
Management System(1)
① Low incentives from performance evaluation
② Too focused on the adequate category (85% of 2007 budget)
③ Difference between evaluating year and reflecting year
④ Difficulties in building effective evaluation index
9
4. Challenges to Program Budget (2)
① Align the annual budget classification with the
classification in the NFMP
② Keep programs within the organizational structure
③ Combine all activities according to program objectives
regardless of revenue sources
④ Simplify the grouping of object levels
10
4. Challenges to MTEF and
Top-down Budget (3)
① Time constraint on the MTEF
② How to meet expenditure ceilings
③ Mainly focused on the next year budget
④ Unit in setting expenditure ceilings :
program or subsection
⑤ How to harmonize the top-down budget and
deliberation process
11
Thank You
12
Overall Scheme of Vision 2030
Overall Scheme
Vision
Korea: New Stride of Hope for New Opportunities
Goals
Innovative, vibrant
Economy
Safe, equitable
Society
Strategy
Maintaining
Growth
Momentum
Advanced
Social Welfare
System
Vehicles
Institutional
Reforms
Upgrading
Human
Resources
Vision
Action Plan
Stable, posed
Nation
New
Social
Capital
All-out
Globalization
Proactive
Investment
13