Korean govt. takes action against debt problems of public organizationsUpdated: 2013-12-11 (KST)
The Korean government is all geared up to fight the mounting debt that public organizations face.
Unveiling a set of measures on Wednesday to bring the debt under control, it said 41 heavily indebted public organizations will have to reduce their debt levels to 2-hundred percent of their equity by 2017, from the current average of 220 percent.
Initially, the government will focus on 11 state companies, including Korea Electric Power Corporation, the Korea Land and Housing Corporation and a public foundation doling out scholarships and tuition-linked loans.
The 12 state agencies saw their combined debt expand by more than 220 trillion won, or roughly 210 billion U.S. dollars, in the previous five years to more than 390 billion dollars last year, making up over 80 percent of the debt owed by all public organizations in the nation.
Those under intensive monitoring will have to regularly release debt-related information and their heads will face punitive measures if they fail to meet the required debt-equity ratio by the third quarter of next year.
The debt owed by the nation's 295 public organizations stood at around 470 billion dollars at the end of last year, nearly double that of 2007 and almost 45 billion dollars more than the government's debt.
The public organizations have been under fire for offering high salaries and other benefits to their employees despite their poor finances.
Underscoring the government's determination to improve the finances of the state-run agencies, it also decided to release a detailed report on their financial health in October every year.
Hwang Ji-hye, Arirang News.
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Cut their high salary. They're suppose to serve the people, not themselves.