Fund Evaluation Group Recommends Integration of Broadcasting and Communications Development Fund and Information and Communications Promotion Fund... Establishment of Expenditure Restructuring System Needed

Report on the '2020 Fund Evaluation Results' at the State Council Meeting

[Asia Economy Reporter Joo Sang-don] The Fund Management Evaluation Team recommended integrating the Broadcasting and Communications Development Fund and the Information and Communications Promotion Fund, and establishing an expenditure restructuring system based on performance evaluation.

The Ministry of Economy and Finance announced on the 26th that it reported the '2020 Fund Evaluation Results,' conducted by forming the Fund Evaluation Team, to the Cabinet meeting.

Fund evaluation is a system that evaluates the necessity and operational status of funds annually in accordance with Article 82 of the National Finance Act, consisting of fund retention evaluation and asset management evaluation.

The retention evaluation assesses the appropriateness of fund retention and the suitability of project and financial structures by evaluating one-third of all funds (67 in total) each year. As a result of evaluating the retention appropriateness of 24 funds this time, 22 funds were deemed appropriate to retain. However, the evaluation team recommended integrating the Broadcasting and Communications Development Fund and the Information and Communications Promotion Fund considering the acceleration of convergence and complexification of information and broadcasting communications due to the development of Information and Communications Technology (ICT), unification of fund management institutions, and identical fund revenue sources. They also advised establishing a solid expenditure restructuring system based on performance evaluation to enhance the effectiveness of integration and respond to the demands of the 4th Industrial Revolution.

Discussions on integrating the two funds began in earnest in October 2018 when Assemblyman Byeon Jae-il of the Democratic Party of Korea introduced the 'Partial Amendment Bill to the Broadcasting and Communications Development Basic Act' to integrate the Information and Communications Promotion Fund and the Broadcasting and Communications Development Fund. This was pursued 10 years after the former Ministry of Information and Communications was split into the Ministry of Knowledge Economy and the Korea Communications Commission, which led to the separation of ICT funds. However, this bill is expected to be automatically discarded with the end of the 20th National Assembly's term.

A Ministry of Economy and Finance official explained, "The Ministry of Science and ICT and the Korea Communications Commission are working on integrating the two funds," adding, "We plan to propose related legislation to the 21st National Assembly to proceed with the integration of the two funds."

Additionally, the Fund Evaluation Team rated the asset management system, policies, and returns of 44 funds (excluding the National Pension Fund) at 71.5 points, maintaining the previous year's level (71.5 points). Four funds?the Government Employees Pension Fund, Broadcasting and Communications Development Fund, Private School Teachers' Pension Fund, and Small and Medium Venture Business Startup Promotion Fund?received an 'Excellent' rating. Conversely, the Agricultural and Fishery Household Savings Encouragement Fund received a 'Very Poor' rating due to inadequate asset management systems.

The separately evaluated National Pension Fund received a 'Good' rating, rising one level from last year's 'Average.' It achieved favorable operational results with a return rate of 11.34% and earnings of 73.4 trillion KRW by actively responding to the global stock market boom. It was positively evaluated overall in both quantitative and qualitative assessments due to efforts to diversify investments, including organizational restructuring to expand overseas and alternative investments. However, the evaluation team recommended establishing financial stabilization measures and asset management goals reflecting a long-term investment perspective, considering recent trends of low birth rates, low growth, and low interest rates.

The Ministry of Economy and Finance plans to submit the fund evaluation results to the National Assembly by the end of this month. These results will be reflected in the 2019 public institution management evaluation and utilized in establishing the 2021 fund operation plan.