On the 3rd, the government announced its policy to relocate large-scale public institutions, signaling its determination to improve efficiency in the public sector. It plans to streamline overlapping functions and implement structural reforms by reducing the number of public institutions by 109, including the consolidation of five power generation subsidiaries under KEPCO and four port authorities. While there are controversies surrounding individual institutions, the overall atmosphere is positive.
However, relocating public institutions to local areas requires careful consideration beyond a few issues. Under the so-called "Five Poles and Three Special Zones" national balanced growth plan, this relocation involves over 350 central administrative institutions and approximately 150,000 people moving their belongings—a historic undertaking larger than the first phase of public institution relocation. There are concerns that the negative side effects of the overheated competition for attraction seen during that time may be repeated.
The first relocation phase began in 2005 during the Roh Moo-hyun administration and continued until 2019, dispersing over 150 institutions and around 50,000 employees to Sejong City and ten innovation cities. It has been evaluated that the results were insufficient due to an overemphasis on local residents' acceptance and equal distribution across regions. According to analyses by the Korea Institute for Industrial Economics and Trade (KIET), the rate of families relocating locally remained around 70%, failing to meet expectations in terms of dispersing the population from the capital region and generating regional economic ripple effects. The persistent skepticism that "relocating public institutions to local areas is useless" has deep roots in these failures.
Local governments, residents, and lawmakers are already rushing to attract valuable public institutions. This underscores the need for this relocation to adhere even more strictly to principles. Efforts should be made to enhance industrial agglomeration effects by considering the characteristics of public institutions and their linkages with regional strategic industries, companies, and research and development infrastructure. Of course, it is essential to carefully examine living conditions such as transportation, education, housing, and healthcare for public institution employees and their families.
Simply dispersing public institutions will not automatically achieve balanced development. Public institutions should serve as catalysts to attract companies that create quality investments and jobs. The relocation of the public sector to local areas is merely the starting point for balanced development.
What must be guarded against is a rushed race driven by political winds, characterized by a distributive approach. Relocation of public institutions has often been used as an election-time promise aimed at securing regional votes. Institutions that are suitable for the local industrial ecosystem and can generate agglomeration effects should be selected. Through selection and concentration, a virtuous cycle must be created, including attracting high-quality companies, creating jobs, and drawing in population.
in OPINION
