Prosecutors are raiding the Statistics Korea as part of an investigation into allegations of "Moon Jae-in administration's statistical manipulation" requested by the Board of Audit and Inspection in October 2023. Yonhap News 

Director of the Free Market Center·Chairman of the Korea Financial ICT Convergence AssociationAs the October 15 real estate measures proved ineffective, the real estate statistics used in policy-making have become controversial. In particular, for the October 15 measures, instead of considering September statistics, only the June-August statistics were used to impose a land transaction permit system on all areas of Seoul. Residents in areas that would not have been subject to the restrictions if September statistics were considered are expressing strong public opinion. This is an example of statistics being distorted to rationalize policy. Even the statistics from the Korea Real Estate Board, under the Ministry of Land, Infrastructure and Transport, which are reflected in policies, were used as the basis for calculating the comprehensive real estate tax during the Moon administration, and they have been highly controversial for their inconsistency. At the time, the Board of Audit and Inspection also investigated former Minister of Land, Infrastructure and Transport Kim Hyun-mi for alleged distortion of real estate statistics. 

While various fake news stories are disrupting politics, economics, and society, fake economic news, in particular, grossly misleads economic policy and, on a smaller scale, causes significant disruptions to the economic activities of businesses and individuals, thus directly and indirectly inflicting considerable damage on people's livelihoods. Economics is inherently vast and complex, making it impossible to diagnose phenomena without economic statistics. Therefore, if economic diagnoses and policies are pursued based on flawed economic statistics, the damage will inevitably fall entirely on the citizens.

In the past, the Moon Jae-in administration, after a continuous economic downturn due to flawed economic policies since taking office in 2017, abruptly dismissed the Commissioner of Statistics Korea in 2018. The newly appointed Commissioner of Statistics Korea reformed the compilation method of the Composite Economic Index, which indicates economic conditions. The economy fluctuates due to trend, seasonal, and irregular cyclical factors. The reformed method analyzes economic trends by extracting only cyclical factors after removing trend, seasonal, and irregular factors. However, during the reform process, the update cycle of trend changes was shortened from annually (once a year) to semi-annually (twice a year), resulting in a shorter trend and a reduced amplitude of economic fluctuations. As a result of the reform, the declining economy suddenly stabilized and even showed signs of rising. Based on this, President Moon repeatedly mentioned that the economy would soon improve, neglecting economic countermeasures.

Government debt statistics and fiscal policy are common examples of policies based on distorted statistics. Korea uses government liability, as defined by its unique Fiscal Act, which includes only debts for which the government has direct repayment obligations, primarily those arising from government bond issuance. According to this standard, Korea's government debt to GDP ratio is in the 40% range, and it has rapidly increased under the current Lee Jae-myung administration, approaching 50%.

In contrast, most countries use government debt as recommended by the IMF in its "Government Finance Statistics Manual." Government debt includes government liabilities, guaranteed debt, debt incurred in the process of performing state functions by public institutions, long-term provisions for public servant and military pension funds, and central bank debt. U.S. government debt already surpassed $35 trillion last year (121% of GDP) and is projected to reach $37 trillion this year, accounting for 122% of GDP.

President Moon Jae-in, ignoring the difference between government debt and government liability, pursued expansionary fiscal policies, arguing that Korea had no fiscal problems because its ratio was significantly lower than that of developed countries. Under the Lee Jae-myung administration, a more aggressive expansionary fiscal policy stance continues for the same reasons.

The statistics related to the Moon administration's nuclear phase-out policy were also outrageous. Under President Moon's urging, "When will the shutdown of Wolsong Unit 1 be decided?", then-Minister of Trade, Industry and Energy Baek Woon-gyu and Ministry officials pressured the economic feasibility assessment of Wolsong Unit 1 to be manipulated, thereby damaging the nuclear industry ecosystem. To cover up the illegal act of early closure, they even committed criminal acts by deleting hundreds of related documents from their offices late on a weekend night. In relation to this, Kim Soo-hyun, former Senior Secretary to the President for Social Affairs, was prosecuted for charges including abuse of power and obstruction of the exercise of rights, and in June 2021, Baek Woon-gyu, former Minister, and Chae Hee-bong, former Secretary, were also indicted and brought to trial on similar charges.

It was confirmed in the National Assembly that the Moon Jae-in administration had intentionally not disclosed the report from the Ministry of National Defense in 2021 stating that the radar electromagnetic waves from the U.S. Forces Korea's Terminal High Altitude Area Defense (THAAD) base in Seongju, Gyeongbuk, "have no impact on humans and the environment." Regarding the '3 Noes and 1 Limited' principle, Moon administration officials had claimed it was the position of the Chinese government. However, an official document from the Ministry of National Defense explicitly stating it as a "bilateral agreement" between Korea and China was also confirmed. A document from the Ministry of National Defense dated December 4, 2019, titled "Results of Consultation at Director Level Regarding the Timing of Establishing the Evaluation Committee for Environmental Impact Assessment," revealed that it stated, "The Chinese side is expected to react strongly, considering the progress of environmental procedures for the Seongju base deployment as the deployment of THAAD and a violation of existing agreements between Korea and China." It also stated, "Existing agreements between Korea and China: 3 Noes Agreement, October 2017." It was revealed that the environmental assessment was delayed against this backdrop.

Statistics are the barometer for economic diagnosis. Statistical manipulation and distortion lead to policy distortion and ultimately result in the ruin of people's livelihoods, making it a serious crime of state betrayal. Over the five years of the Moon administration, there have been allegations of statistical manipulation in various areas, claiming that the economy declined, distribution worsened, and real estate prices surged due to flawed policies, and statistics were manipulated to show an economic rebound, improved distribution, and stabilized real estate prices.

As such, statistical manipulation and distortion are acts of state betrayal that lead to policy distortion. Specifically, by manipulating and distorting economic statistics to rationalize policies biased towards a particular ideology, and by pushing forward with flawed policies without correction, they cause the ruin of people's livelihoods. To properly diagnose the vast and complex economy, correct flawed economic policies, and promote livelihood stability, it is essential to first strictly punish those who manipulate economic statistics and to ensure that economic statistics are compiled properly, independently of politics.

Oh Jeong-geun, Director of the Free Market Center·Chairman of the Korea Financial ICT Convergence Association