Korean govt. takes action against debt problems of public organizationsUpdated: 2013-12-12 (KST)
The Korean government is geared up to fight the mounting debt that public organizations face.
Unveiling a set of measures on Wednesday designed to bring the debt under control, it said 41 heavily-indebted public organizations will have to reduce their debt levels to 200 percent of their equity by 2017 from the current average of 220 percent.
The government will initially focus on 12 state agencies, including the Korea Electric Power Corporation, the Korea Land and Housing Corporation and a public foundation that doles out scholarships and tuition-linked loans.
"Those under intensive monitoring will have to release their debt-related information by the third quarter of next year, and the heads will face punitive measures, if they fail to improve their debt-equity ratio."
The 12 state agencies saw their combined debt expand by more than 220 trillion won, or roughly 210 billion U.S. dollars over 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.
The debt owed by the nation's 2-hundred-95 public organizations stood at around 470 billion dollars at the end of last year, nearly double from 2007 and almost 45 billion dollars more than the government debt.
The public organizations have been under fierce criticism for offering high salaries and other benefits to their employees despite their poor finances.
"Underscoring the government's determination to improve finances of 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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