The 12th Korea-OECD International Forum on Budgeting

• The 12th Korea-OECD International Forum on Budgeting, hosted by the Ministry of Economy and Finance (MOEF) and co-organized by the Korea Development Institute (KDI) and the OECD, took place at the OECD headquarters in Paris on September 25-26, 2024. Celebrating its 12th iteration, the forum gathered fiscal authorities from OECD member countries such as the United Kingdom, France, and New Zealand, along with domestic and international fiscal experts. The event aimed to share opinions on key fiscal issues and explore future directions under the theme of "Dynamic Economy and Fiscal Sustainability."

  

  In the opening remarks, Janos Bertok, Deputy Director of Public Governance at the OECD, expressed his hope that discussions would focus on introducing fiscal rules that balance economic growth and social mobility amid increasing global economic uncertainties.
  
  Following this, Byungseo Yoo, Director-General at MOEF, emphasized Korea's efforts toward dynamic economic reform, focusing on three major areas and ten key tasks, including intensive investment through expenditure restructuring and efforts to enhance fiscal sustainability.
  
  In his welcoming remarks, SangDae Choi, Ambassador of Korea to the OECD, highlighted the need to expand fiscal capacity to tackle domestic challenges such as low birth rates and an aging population, while stressing the importance of concentrated support in research and development and social mobility to boost economic dynamism.
  
  Dongchul Cho, President of KDI, underscored the need for policies such as building corporate growth ladders, nurturing talent, and introducing a performance-based income system. He further noted the increasing fiscal burden due to low birth rates and aging and emphasized the need for sustainable fiscal policies.

  

  The presentations and discussions were divided into three sessions under the themes of “Improving the Efficiency of Fiscal Expenditure,” “Role of Finance in Strengthening Growth Engines and Social Mobility,” and “Dynamic Economy and Fiscal Rules.”
  
  In Session 1, titled "Improving the Efficiency of Fiscal Expenditure," presentations were given by Lars Ostergaard, Deputy Budget Director of Denmark's Ministry of Finance; Étienne Genet, Senior Expert at the French Ministry of Economy, Finance and Industrial and Digital Sovereignty; and Wansoo Kim, Director at MOEF. The session covered international trends on securing fiscal flexibility, including fiscal performance evaluation, inter-departmental budget coordination, and re-prioritization of fiscal inputs.
  
  Session 2, titled "Role of Finance in Strengthening Growth Engines and Social Mobility," featured presentations by Ronnie Downes, Head of Trade at Ireland's Department of Enterprise, Trade and Employment, and former Assistant Secretary at the Department of Public Expenditure and Reform; Byungseo Yoo, Director-General at MOEF; and Stephane Jacobzone, Counsellor at the OECD. Discussions focused on strategies to enhance growth engines in major OECD countries, the current state of social mobility, and exemplary policy cases for promoting social mobility.
  
  In Session 3, titled "Dynamic Economy and Fiscal Rules," presentations were given by Lucia Piana, Deputy Head of Fiscal Policy and Surveillance at the Directorate-General for Economic and Financial Affairs of the European Commission; Thomas Braendle, Head of Economic and Fiscal Policy Analysis at the Swiss Federal Department of Finance; and Delphine Moretti, Senior Policy Analyst at the OECD. Seungryong Shin, Associate Fellow at KDI’s Department of Public Finance and Social Policies, participated as a discussant. The session emphasized the elements of effective fiscal rules, such as a constitutional basis and flexibility, and highlighted the importance of setting clear fiscal targets and rules.
  
  The forum concluded with consensus on the three principles of fiscal rules: reliability, simplicity, and flexibility, which should be balanced while reflecting each country's unique characteristics. It was also emphasized that successful introduction and operation of fiscal rules can only be achieved under political consensus and support. Based on these policy recommendations from major fiscal experts, Korea is expected to strengthen its dynamic economy and enhance fiscal sustainability.

• Written by:
  Dan Roh, Research Associate,  Research Outcome Dissemination Unit, 044-550-4451,  danroh28@kdi.re.kr