Editorials
Public-sector overhaul must not fizzle out again
The government’s sweeping restructuring plan must deliver real efficiency, debt reduction and regional growth rather than repeat past failures.
Under the government’s second-phase plan to relocate public institutions, announced on Sept. 3, central government ministries, including the Ministry of Justice and Ministry of Gender Equality, as well as public institutions in the Seoul metropolitan area, will begin moving to Sejong in the first half of next year. Government Complex Sejong and the surrounding area are seen on Sept. 3.
YONHAP
On Thursday, the government unveiled the largest public-sector restructuring plan in Korea’s history, aiming to reduce the number of public institutions by 109. Five power-generation subsidiaries of Korea Electric Power Corporation (Kepco). will be consolidated, while Korea Land and Housing Corp. will be split into two entities.
More than 350 public institutions in the Seoul metropolitan area will also begin relocating to other regions in 2027, with exemptions kept to a minimum. Central government agencies remaining in the capital region, including the Ministry of Justice and Ministry of Gender Equality and Family, will move to Sejong beginning in the first half of next year. The prosecution and police agencies will also relocate to newly constructed headquarters.
The direction is sound: trimming an increasingly bloated public sector while promoting balanced national development.
What matters, however, is not the headline figure of 109 institutions but whether the reform proves effective. Successive administrations have attempted public-sector restructuring, only to retreat from debt and workforce reforms in the face of labor union resistance.
The Park Geun-hye administration, for example, declared that the “party is over” for public corporations but failed to eradicate lax management. Other administrations likewise avoided fundamental reforms, including increases in public utility rates.
Meanwhile, Kepco’s debt alone has ballooned to 210.7 trillion won ($155.1 billion), leaving it in the extraordinary position of asking Samsung Electronics and SK hynix to prepay about 25 trillion won in electricity bills. Combined debt at 37 major public institutions, now totaling 778 trillion won, is projected to approach 1 quadrillion won by 2030.
To avoid repeating past failures, the government must streamline staffing structures and intensify efforts to reduce debt.
The proposed consolidation of Kepco’s generation subsidiaries also requires rigorous scrutiny. It follows President Lee Jae Myung’s remark, “I don’t know why these were split up. Didn’t that just create five presidents?” This time, functionality, efficiency and public benefit must be the overriding criteria, with reform pursued consistently through a transparent process.
The first wave of public-institution relocations, launched under the Roh Moo-hyun administration, moved 150 institutions and about 50,000 employees out of the Seoul metropolitan area between 2005 and 2019.
The second wave should strengthen regional growth hubs further. Rather than dividing institutions among regions as political spoils, relocation should connect each region’s leading industries with universities and research institutions. Housing, education and other living conditions must also improve enough to attract businesses and talented workers.
Only when consolidation and relocation produce genuine government innovation and regional growth can Korea finally break the familiar pattern of public-sector reforms beginning ambitiously and ending with a whimper.
This article was originally written in Korean and translated by a bilingual reporter with the help of generative AI tools. It was then edited by a native English-speaking editor. All AI-assisted translations are reviewed and refined by our newsroom.
