[THE INVESTOR] South Korea's government will limit state financing for costly international events hosted by provincial governments, the Finance Ministry here said on Sept. 7.

In a government meeting on fiscal strategy chaired by Finance Minister Yoo Il-ho in Seoul, the government unveiled its decision to refrain from giving out unplanned money to local governments hosting international sports tournaments or exhibitions, according to the ministry.

“Big international events have placed a large financial burden on state coffers as provincial governments demand more money than they had first asked to receive,” Yoo said. “The central government has come up with a new policy to control such expensive events from the outset.”

Under the plan, local governments must conclude an agreement with the central government before hosting a massive event worth 50 billion won (US$45.8 billion) or more to promise that they will organize the project within the initial spending scheme.

Otherwise, they will receive penalties such as a budget cut from the central government, added the ministry.

The country has struggled to cover the expenses of lavish international events over the past few years, including the 2014 Incheon Asian Games, the 2015 Gwangju Summer Universiade and the Expo 2012 in Yeosu, which cost a combined 2.3 trillion won.

(theinvestor@heraldcorp.com)