A Country Where Everyone Enjoys Equal Opportunity, Wherever They Live

Evaluation of the Yoon Suk Yeol Administration’s First 100 Days and Its Tasks / Balanced Regional Development

“Prosperity and abundance, economic growth itself, are the expansion of freedom.” This was President Yoon Suk Yeol’s opening message at his inauguration. He stressed that “everyone must become a free citizen embracing universal values, and freedom is by no means a winner-takes-all system.”

But is the world free? Is it just enough to prevent winner-takes-all outcomes? I believe two issues must be resolved for freedom to function. One is the restoration of market principles. We must untangle the distortions and structures of conflict stemming from unfair trade practices, the gap between large corporations and SMEs, the divide between regular and non-regular workers, and government regulations.

The other is overcoming regional disparities. The conflict between the Seoul metropolitan area and non-metropolitan regions is severe. Structural barriers between the central government and local governments are high. Local regions have virtually no opportunities. These problems must be corrected for freedom to flourish.

The Yoon Suk Yeol administration must be one that not only marks a simple change of government, but properly envisions and practices a nation of freedom based on fairness and common sense. One of the greatest obstacles to freedom—extreme regional disparities—has deepened the sense of deprivation and alienation in local areas. The asset value of apartments with the same specifications differs enormously depending on whether they are in Seoul or in the provinces.

Even students with excellent academic records struggle to find jobs simply because they are from the provinces. The playing field is already tilted. It is not fair at all, and from the standpoint of common sense, it has gone too far. That is why solving regional problems means realizing “spatial justice” across the national territory and restoring common sense. This is not an issue of ruling versus opposition parties, nor an ideological issue.

The regions are facing extinction. Many cities are at risk of disappearing due to various socioeconomic causes, including low birth rates, population aging, a demographic cliff, and excessive population concentration in the Seoul metropolitan area. Of 82 counties, 69 small and medium-sized cities—84%—are projected to disappear within the next 30 years.

The Seoul metropolitan area, which accounts for 11.8% of the national land area, surpassed the non-metropolitan regions in population in 2019 and, as of 2021, accounts for 50.4% of the population. Its share of GRDP (gross regional domestic product) has continued to widen since 2015, reaching 52.6% in 2020. Its share of total employment also surpassed that of non-metropolitan regions in 2017 and stood at 50.5% in 2021.

That gap is widening exponentially. If this continues, the metropolitan area will collapse under overconcentration, while non-metropolitan regions will be devastated by decline. Internally, imbalance is worsening; externally, national competitiveness is falling; overall, growth potential is being held back. It is no exaggeration to say that regional issues are tied to the very survival of the nation.

Regional Extinction Is a Matter of National Survival

The direct cause of regional extinction, and the core of the problem, is the outflow of young people. This is directly linked to population decline and accelerates aging in those regions. Local vitality declines, and even the young people who remain come to see the region as less attractive, creating a vicious cycle that leads to further population outflow.

In the end, quality jobs for young people are the best way to prevent regional extinction. If living conditions are also established so that people can enjoy education and culture, then the vicious cycle of population outflow can be turned into a virtuous cycle of population growth.

What should be done? Above all, the governance system must change. Committee organizations such as the current Presidential Committee for Balanced National Development or Committee on Decentralization are not enough. A structure in which the president appears only for an initial courtesy visit while dozens of meetings are held will never work. There must be execution capacity. At a minimum, the president must empower an organization that can work together with relevant ministers.

And the problem cannot be solved merely by relocating government agencies. Companies must be induced to move as well. Incentives in the form of tax benefits—such as corporate tax, capital gains tax, and inheritance tax—are essential, and they must be bolder. Local governments should also be allowed to design their own development paths and actively request the central government to remove regulations.

This is the Opportunity & Development Zone, the core policy of the Yoon Suk Yeol administration for balanced regional development. The education system must also be boldly reformed so that local students can work in their home regions and local universities can be linked with local industries. In particular, local communities must foster local creators.

As the administration has called it the “Local Era,” the Yoon Suk Yeol administration’s balanced regional development policy represents a major paradigm shift. The administration’s policy agenda—including Opportunity & Development Zones, pilot districts for expanded educational autonomy, local creators, and institutional reform for decentralization—contains a mechanism for changing the country’s growth engine from one led by the central government to one led by local governments and local communities, and from a bureaucracy-centered model to one that strengthens autonomous private-sector innovation.

From the transition committee stage, the Yoon Suk Yeol administration for the first time established a Special Committee on Balanced Regional Development as a parallel organization. Building on the committee’s efforts, the government recently adopted “A Local Era Where Every Part of Korea Is a Good Place to Live” as a national policy goal, and selected 10 national tasks along with three promises: genuine region-led development, job creation through innovative growth, and maximizing each region’s unique characteristics. The direction can be summarized in the following points.

First, practical policies are needed to induce companies to relocate to and invest in non-metropolitan regions. Through unprecedented tax benefits and bold regulatory easing, as in the Opportunity & Development Zone, various innovation clusters should be formed and allowed to develop on that basis.

Second, living conditions such as education and culture must be improved so that non-metropolitan regions become “places where people can stay.” Many families cannot leave the metropolitan area because of their children’s education. It is necessary to pilot education freedom zones that expand consumers’ freedom of educational choice, including through alternative schools. Space should also be broadened for local creators to engage in activities producing diverse content in the regions.

Third, ways must be found to prevent outstanding regional talent from being taken by the metropolitan area. Ultimately, this comes down to quality jobs. By creating special zones in the four megacities similar to Pangyo Valley, the incentive for people to move into the metropolitan area must be weakened. To foster local talent, it is also necessary to build industry-academia ecosystems and significantly transfer authority over university operations to local government heads.

Fourth, the leading role of local governments is crucial. In the Opportunity & Development Zone framework, local governments design the basic structure, including decisions on specialized areas and industries, workforce development plans, and requests for the removal of government regulations. The planning capacity of local governments is absolutely essential. Of course, this must be accompanied by expanded authority for local governments and strengthened fiscal capacity.

Mechanisms to secure accountability according to authority—in other words, to prevent moral hazard—must naturally also be strengthened. The start was grand. For the first time, a special committee dedicated to regional issues was established at the transition committee stage, and over two weeks it toured 12 regions and even held public reporting events. For the first time, a regional issue was adopted as a national policy goal.

However, even now, 100 days after the launch of the Yoon Suk Yeol administration, the governance system needed to drive this forward has still not been created. A control tower must be established without delay. The current Committee on Decentralization and Presidential Committee for Balanced National Development are reportedly to be merged into the Local Era Committee. A new implementation body, centered on personnel aligned with the new administration’s philosophy and policy direction, must be created urgently.

Serious preparations must begin for follow-up tasks to implement the vision and agenda for balanced regional development. The 5th Five-Year Balanced Regional Development Plan (2023–2027) must be established, and the role and operating direction of the Special Account for Balanced National Development must also be newly reconsidered so that not only its overall size is expanded, but also the share of locally autonomous accounts is increased. Necessary related laws and regulations—including the Government Organization Act, the Special Act on Balanced National Development, and the National Finance Act—must also be quickly revised and legislated.

What is balance? It does not mean making the speed of development identical in every region. It means ensuring equal opportunities for development. President Yoon Suk Yeol emphasized a world in which equal opportunities are enjoyed everywhere. I sincerely hope that becomes reality. In this Local Era, I look forward to equality of opportunity.

Younghwan Kang, Editorial Board Member, Mirae Hanguk; President, Daejeon Urban Strategy Institute

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Original title: 어디에 살든 균등한 기회를 누리는 나라

Author: Young-hwan Kang

Date: 2022-08-23

Source: https://www.cfe.org/bbs/bbsDetail.php?cid=press&idx=24920