In recent developments that have stirred considerable concern in South Korea, the Board of Audit and Inspection has revealed that the housing price statistics were systematically manipulated during the Moon Jae-in administration from January 2018 to October 2021. This significant disclosure has intensified the ongoing discourse around governance in the country, already unsettled by political turmoil following former President Yoon Suk Yeol’s declaration of martial law late last year and his subsequent removal by the Constitutional Court.
According to the nearly three-year-long investigation conducted by the nation’s supreme audit institution, the Korea Real Estate Board (REB) was pressured on at least 102 occasions to alter key housing market data. These alterations were reportedly orchestrated by the presidential office and the Ministry of Land, Infrastructure and Transport to portray the administration’s real estate policies more favourably by artificially reducing reported growth rates or suggesting price declines contrary to actual market trends. The REB faced threats of budget cuts and staffing reductions should it resist compliance, highlighting a coercive environment to distort official data.
The manipulation extended beyond the housing sector, with discrepancies noted between government data and private sector statistics, particularly those released by KB Kookmin Bank, a highly regarded source of housing market trends. Internal government documents revealed attempts to undermine independent data providers through proposed measures such as a certification system for private statistics and the imposition of fines, aiming to suppress public scrutiny and control the narrative on housing price trends.
This scandal, detailed in a final report, also implicated the falsification of other economic indicators, including income figures and employment statistics. The revelations challenge the integrity of official statistics in South Korea, with ramifications far beyond flawed policymaking. As highlighted by Yoo Choon-sik, a former Reuters economics correspondent, these manipulations erode public trust in government, financial markets, and institutions. Yoo emphasised, “Statistical integrity is indispensable for sound governance... Good governance ensures that power serves the people, not political agendas. Trust in governance is not a given; it must be earned through integrity and accountability.”
The gravity of the scandal is underscored by comparison to international precedents. Yoo cited similar instances in other nations, including Greece’s misrepresentation of budget deficits leading to an economic crisis, Argentina’s manipulation of inflation data under the Kirchner administrations, and allegations of inflated economic growth figures in China. These examples illustrate how distorted statistics can mislead investors, complicate policymaking, and damage a country's international reputation.
The forthcoming snap election scheduled for 3 June has spotlighted the urgency to address governance issues. The incoming government will confront numerous pressing challenges, from responding to US tariff hikes to advancing South Korea’s competitiveness in global AI innovation. Nonetheless, Yoo urged that restoring public trust in official statistics should be a top priority. He recommended implementing independent oversight, reinforcing legal safeguards, and pursuing institutional reforms to safeguard data from political interference.
This call for renewed focus on statistical integrity comes amid ongoing concerns over governance in South Korea and amid efforts to stabilise public confidence following a period of political unrest. The collective expectation is that adherence to transparency and accountability in government data will contribute to more reliable policymaking and strengthen democratic institutions moving forward.
Source: Noah Wire Services