[Editorial] Another bill to pay

The government has reaffirmed that it would implement without fail all regional development promises that President Park Geun-hye made during her election campaign last year.

It is praiseworthy for the administration to try to follow up through the president’s campaign pledges. Yet the problem is that it simply lacks the required wherewithal.

Finance Minister Hyun Oh-seok has reported to the ruling Saenuri Party that it would cost the government 124 trillion won to deliver on all of the 105 regional development projects that Park promised.

Add that to the 135 trillion won that the government needs to secure over the next five years to finance Park’s campaign pledges aimed at expanding welfare and revitalizing the economy.

The combined cost of 259 trillion won is way beyond the government’s funding capability. To foot the bill, it has to raise more than 50 trillion won a year during Park’s five-year term.

In May, the government reformed the budget to meet the 135 trillion won welfare bill. It decided to cut down on expenditures and reduce tax benefits for the rich and corporations. It also declared war against the underground economy.

Despite these efforts, it is unclear whether the government will be able to pay the bill. Tax revenue continues to fall short of the target due to the prolonged economic slowdown.

Under these circumstances, adding another 124 trillion won to the bill will simply break the government’s back. To alleviate its funding burden, the government plans to tap into private investment.

But private investors won’t put their money into development projects unless they are given guarantees that their investment will be profitable. Providing such guarantees, however, will increase project costs, which will ultimately be transferred to local residents.

Considering the government’s limited financing ability, it is advisable to cancel projects that fail to pass feasibility studies. Yet, Hyun said the government would push ahead with even those that lack feasibility by making adjustments to their original plans.

One may wonder why the government is so eager to follow up on Park’s regional pledges. The reason is the ruling party’s desire to win next year’s local elections.

The party’s performance in a region will depend to a large degree on how far the government goes in implementing Park’s promises geared to it.

So the party has been pressuring the government to carry out Park’s regional pledges without modifications. Whether they are feasible or not matters little to it.

But if political considerations prevail over economic logic in fulfilling campaign pledges, the outcome will be a disastrous waste of taxpayers’ money.

Many of Park’s regional campaign promises were made without careful assessment of their benefits and costs. This calls for prudence on the part of the government in translating Park’s pledges into action.