Fiscal Decentralization to Prioritize Regional Development

Starting next year, fiscal decentralization will be expanded, strengthening financial support for regions outside the Seoul metropolitan area. President Lee Jae-myung announced at the Central-Local Cooperation Council that the principle of 'prioritizing regional areas' will be applied, starting with the budget plan for the coming year.

President Lee emphasized at the Council that "Expanding fiscal decentralization is a task of our time and an essential element for achieving balanced regional development." He added, "We will do our best to distribute resources, which have been concentrated in the Seoul metropolitan area, to regional areas, contributing to revitalizing local economies and improving the quality of life for residents."

The meeting was attended by key heads of metropolitan local governments, including Gangwon Province Governor Kim Jin-tae, Incheon Mayor Yoo Jeong-bok, Gyeonggi Province Governor Kim Dong-yeon, and Seoul Mayor Oh Se-hoon, who presented their opinions on regional issues. Gangwon Province Governor Kim Jin-tae expressed concerns about the increase in local government financial burden regarding the basic income policy for farming and fishing villages, requesting that pre-consultation with local governments be strengthened in the policy decision-making process. He stated, "While a basic income policy is necessary to address the aging and population decline in rural areas, it is difficult to ensure sustainability if it places an excessive burden on local finances."

Incheon Mayor Yoo Jeong-bok proposed the introduction of a 'Prior Consultation System on Local Government Financial Burden,' which would mandate prior consultation between the central and local governments when implementing national subsidy projects. He argued, "National subsidy projects directly impact the lives of local residents, so institutional mechanisms must be established to ensure that local governments' opinions are fully reflected from the project planning stage." Gyeonggi Province Governor Kim Dong-yeon emphasized the importance of revitalizing regional economies and urged the central government to provide active support. He stressed, "Regional economies are the foundation of the national economy, and revitalizing regional economies is essential to securing national growth engines."

Specifically, he cited the case of Gyeonggi Province, adding, "The central government's support is crucial to drive regional economic revitalization through deregulation and attracting investment." Seoul Mayor Oh Se-hoon expressed his opinions on the reverse discrimination faced by Seoul, demanding deregulation in the Seoul metropolitan area and increased financial support. He pointed out, "As the capital of the Republic of Korea, Seoul significantly contributes to national economic development but faces difficulties due to excessive regulations and unreasonable financial allocations." He emphasized, "Deregulation and increased financial support are essential for Seoul to grow into a globally competitive city."

The government is considering legislating a regional balanced development evaluation based on a comprehensive review of the opinions presented at this meeting. Furthermore, it plans to accelerate the relocation of public institutions to regional areas to strengthen local autonomy. A government official stated, "Regional balanced development is a core task for the sustainable growth of the Republic of Korea, and we will strive to create tangible results through close cooperation with local governments." Regarding the relocation of public institutions, the government plans to specify the selection criteria and procedures for institutions to be relocated and prepare support measures to minimize disruption caused by the relocation.

This expansion of fiscal decentralization and the application of the principle of prioritizing regional areas are expected to contribute to resolving regional imbalances and revitalizing regional economies. The government plans to strengthen communication with local governments and expand policy support for resolving regional issues in the future. Meanwhile, the Central-Local Cooperation Council is a presidential advisory body established under the Local Autonomy Development Act, which deliberates and decides on policies to promote cooperation between the central and local governments.