The repayment of the government’s share of public funds injected during the 1997 financial crisis will conclude next year. As the 2002 government promise of repayment within 25 years comes to fruition, Lee Hyung-il, the first deputy minister of the Ministry of Finance and Economy, has been nominated as a candidate for economic deputy prime minister. This nomination comes at a time when the long journey of public fund repayment is nearing its end, with an economic bureaucrat who managed the initial repayment system now in line to lead economic policy.
According to the Ministry of Finance and Economy on September 3, the government plans to allocate 7.9226 trillion won in next year’s budget to fully repay the remaining debts from public funds incurred during the financial crisis. It has been nearly 30 years since large-scale public funds were injected to stabilize the financial market and restructure failing financial institutions after the 1997 crisis.
As the nominee for economic deputy prime minister, Lee has a deep connection to public funds. He entered public service after passing the administrative examination in 1992 and began working in the Financial Policy Bureau in 1999, shortly after the financial crisis. From May 2001 to February 2003, he worked in the Office of the Public Fund Management Committee, overseeing tasks related to public funds and financial restructuring.
The Public Fund Management Committee was established to manage the restructuring of failing financial institutions and the operation and recovery of public funds following the financial crisis. Lee’s tenure at the committee coincided with a critical transition from large-scale public fund injections to a recovery and repayment system.
In September 2002, the government developed a repayment plan for public funds, establishing a long-term repayment strategy where the government and financial sector would share the burden of anticipated losses. The actual repayment process began in 2003, centered around the Public Fund Repayment Fund, during the same period Lee worked at the committee.
Since then, the government has been recovering the injected public funds through the sale of financial institution shares and the collection of bad debts, while continuously repaying the debts of the Public Fund Repayment Fund.
According to the National Assembly Budget Office, the remaining debt of the Public Fund Repayment Fund was 15.0712 trillion won at the end of last year. The government repaid 7.1486 trillion won this year and plans to allocate 7.9226 trillion won in next year’s budget to fully repay the remaining debt.
If the repayment proceeds as planned, the government’s share of repayment will conclude 24 years after the formal repayment process began in 2003. The Public Fund Repayment Fund is scheduled to be liquidated by the end of 2027, according to relevant laws.
Park Hong-keun, Minister of the Ministry of Economy and Finance, stated at a Cabinet meeting on September 1, “Next year, we will complete the repayment of public funds injected to respond to the financial crisis,” adding, “We will fulfill the government’s promise made in 2002 to repay within 25 years.”
As the repayment of public funds approaches its conclusion, Lee was nominated as deputy prime minister and minister of the Ministry of Finance and Economy on August 30, nearly 25 years after he handled related tasks at the Public Fund Management Committee.
Since his time at the committee, Lee has held key positions in the economic and financial sectors, including director of economic analysis and comprehensive policy at the Ministry of Finance and Economy, director of economic policy, and vice minister. He also served as the head of the Statistics Korea before becoming the first deputy minister of the Ministry of Finance and Economy.
During his tenure in the financial policy sector immediately after the financial crisis, key issues included the restructuring of failing financial institutions, stabilizing the financial market, and managing public funds. Currently, major challenges include fiscal management, household and corporate debt, stabilizing financial and foreign exchange markets, and responding to external uncertainties.
If he passes the National Assembly confirmation hearing, Lee will oversee overall economic policy as deputy prime minister and minister of the Ministry of Finance and Economy. His extensive experience in financial policy and public fund management will likely be highlighted during the confirmation process.
* This article has been translated by AI.
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