Shrinking localities pin hopes on 'living populations' to spur growth

Localities with shrinking populations are trying to attract nonresidents with purchasing power, focusing on frequent visitors and transient populations who can boost the local economy.

Photo of Gongju in South Chungcheong. The Ministry of the Interior and Safety designated 89 de-populating localities on Oct. 18, 2021. The government in 2021 decided to invest a trillion won ($765 million) to save those regions from extinction. In South Chungcheong, there are nine population-decreasing regions, including the cities of Gongju, Nonsan and Boryeong, and Buyeo and Cheongyang counties. [YONHAP]

Localities with shrinking populations are trying to attract nonresidents with purchasing power, focusing on frequent visitors and transient populations who can boost the local economy.

Specifically, localities are targeting nonresidents who visit more than once a month and stay longer than three hours. Localities believe their spending can keep their communities alive.

This new, more flexible strategy follows the failure of conventional policies to enlarge residential populations. As fertility rates plummet, rural populations have never recovered.

As a result, small rural communities outside the greater Seoul area and other major cities like Busan are on the verge of extinction.

“The futures of those localities look grimmer if the authorities only count residents per past methodologies,” said Choi Seul-ki, a KDI School of Public Policy and Management professor.

“New measures are attempts to invigorate regions [facing extinction risks] by incorporating new types of population.”

Last year, Korea legislated the concept of a “living population” that embraces permanent residents, transient visitors who spend more than three hours in the region every month and resident foreigners.

Statistics Korea will begin counting the living population in 89 depopulating regions nationwide this year, releasing the data on a quarterly basis.

Blue-colored regions are de-populating regions nationwide according to the Ministry of the Interior and Safety. [SCREEN CAPTURE]

Local governments are rushing to attract as much a living population as possible.

The city of Namwon in North Jeolla enacted the country's first ordinance to draw a living population of 100,000 to the community.

The city is reviewing a plan to provide free accommodation vouchers and discounts at public facilities and tourist spots if people obtain the online Namwon Sarang citizen card.

Several localities are even competing to bring prisons to their neighborhoods. Visits by the inmates' family members can boost the living population of the regions in question.

Cheongsong County in North Gyeongsang, which already has four prisons, jumped into a bid to host another new prison. The residents endorse the move.

Cheongsong County in North Gyeongsang [JOONGANG PHOTO]

“Local behavior is changing because facilities that were once avoided or perceived as NIMBY facilities can prompt the inflow of population and economic investment,” Choi said.

Gokseong County in South Jeolla renovated its hanok village to entice “bleisure” visits combining business and leisure. Haenam County in South Jeolla runs an agricultural learning program, and Wando County in the same province offers a retreat program where participants can relax amid natural surroundings.

“Precisely determining the living population can help local government strategize population policies,” said Seol Dong-hoon, a sociology professor at Jeonbuk National University.

An abandoned house in Hwasun County in South Jeolla. As of 2016, there were around 50,000 abandoned houses in rural regions in the country. In 2022, the figure went up to 66,000, according to the Ministry of Agriculture, Food and Rural Affairs. [YONHAP]

“For instance, regions suffering from the outflow of the living population — including visitors and residents — can relocate population to other regions and restore their environment,” Seol added.

Experts believe the strategy will help rural localities nurture their potential, too.

“Local governments and authorities will make investments for transient and temporary visitors and create new markets,” said Cho Young-tae, a professor at Seoul National University.

“The days when they built infrastructure only for residents are over. New business ecosystems can emerge if local governments ease regulations or lower hurdles to entice startup companies,” Cho said.

Japan, with its super-aged society — where more than 20 percent of the population is over 65 — has been pushing population policies using the concept of “relational population,” similar to Korea’s living population.

Japan has been running a hometown tax program allowing people to make donations to localities of their choice in return for tax deductions since 2008. The contributions fund local-specific projects.

Germany went one step further, allowing people to register two addresses.

The measure provides public and administrative services to people in their secondary neighborhoods. Around 1.2 million Germans have two addresses. People with two addresses are required to pay taxes for their secondary address.

Children campaign around their neighborhood to bring new residents to their town in Namhae County in South Gyeongsang in July 2020. The demonstration took place amid rising concern over school shutdowns and village extinction. [YONHAP]

Experts say detailed plans are needed for the new strategy to work.

Specifically, an increase in the living population could put greater demands on municipalities' money and resources as more people use public infrastructure and facilities in the region.

The central government might need to scale up subsidies or tax sharing with local governments to fund such costs.

Policies to help foreigners settle are also needed as they are included in the living population.

“Complex taxation problems can occur if Korea takes similar steps to Germany,” Cho said. “If this happens, Korea can retreat to old population policies. Korea should pursue a more flexible direction.”

BY LEE SOO-JUNG, YI WOO-LIM [lee.soojung1@joongang.co.kr]