Korean govt’s public firm relocation plan ignites competition among local bodies

Korea Airports Corporation headquarters [Courtesy of Korea Airports Corporation]

South Korean regional governments are engaged in heated competition to host public institutions as the central government plans to establish a second relocation plan for more than 300 public entities currently based in Seoul and surrounding areas by the end of June.

According to the Ministry of Land, Infrastructure and Transport and the National Assembly on Wednesday, the biggest issue regarding the second relocation plan surrounds the regions the public institutions may move to rather than which entities will be relocated. Industry insiders note that there will be heated debate over the plan as it will likely be influenced by regional egoism rather than serving as a comprehensive strategy for balanced regional development.

The land ministry recently held a meeting with the labor unions of public institutions that were relocated to provincial areas under the first relocation plan to collect their opinions on the second plan.

The unions are said to have strongly insisted in the meeting that additional public firms should move to their innovation cities to create a bigger economic effect in the locations they are in.

Other locations that have been excluded in the first relocation plan, however, argue that the plan will continue to isolate them, which is against the goal of realizing balanced regional development.

Ten lawmakers from the ruling and opposition parties recently proposed a revision to the Special Act on Innovation City, which includes expanding the target sites for relocation of public institutions to areas other than innovation cities. The 11 innovation city governments, however, issued a joint statement, arguing that the second relocation of public institutions should be made within the existing innovation cities in line with a concentration strategy.

Major cities and provinces are hoping to host dozens of public institutions.

South Gyeongsang Province, North Chungcheong Province, Gwangju Metropolitan City, and Jeju Island are hoping to host Korea Airports Corp while Korea Racing Authority is wooed by South Gyeongsang Province, North Jeolla Province, and Jeju Island.

The overheated competition is posing a big burden on the government. There are concerns in particular that the relocation may be decided according to political interests.

“If the heads of local governments and lawmakers who are likely to run for general elections start making pledges to bring public institutions to their regions ahead of the elections next year, it may be difficult for the government to proceed with the relocation as planned,” said Ma Gang-rae, a professor of urban planning and real estate at Chung-Ang University. “We need to think about ways for the regions and public institutions to develop together.”