South Korea’s public expenditure growth rate relative to gross domestic product (GDP) is 11%, which is less than half of the OECD average. However, the country is not safe from the increase of such statistics since there are factors such as rapid aging and North Korea variables.
The OECD also recommended that South Korea should achieve a balanced budget in 2013 and maintain debt at lower level in preparation for future expenditure including the aging and severe global recession.
Moreover, a variety of fiscal policies need to be taken care of, especially the introduction of reducing tuition fees in half. The general financial aid enables more students go to college or university, causing education and the labor supply and demand mismatch problems. In addition, once a policy is adopted it is difficult to withdraw it.
However, before election, many political parties have suggested the reduction of college tuition to receive a positive vote from college students. Thus, it is hard to change the policy which they’ve already promised to implement.