Open Days University, European Commission Title Regional Development Policies in Korea: Recent Trends Presenter: Young-Chool Choi Professor, Department of Public Administration, and Director, Social Sciences Research Institute, Chungbuk National University, KOREA; President, Korea Association for Policy Analysis and Evaluation

I.Regional Development in Korea: Current Conditions and Problems Governments Policies for Addressing Regional Problems The Governments Regional Development Model Contents

I. Regional Development in Korea: Current Conditions and Problems 1 Problem 1: Concentration of population on the capital region and consequent conflicts between capital and non-capital region The population has been concentrated on capital region since 1960s 4 Figure 1 Map of capital and non-capital region

Table 1 Proportion of the population in terms of capital and non-capital region s (%) CategoryNationwideCapital Region Proportion of capital region (%) Population/Housing area(km 2 )('07) population(thousands)('07) housing supply rate(%)(.06) Regional Economy GRDP(billion, Korean currency)('06) 851,789406, manufacturing factory('05)117,20567, bank deposit(billion, Korean currency) 592,721407, Function University('06) government organisation('06) hospital('05)49,56625,

Population trend of capital and non- capital region Population proportion Non-capital Region capital Region Source : Statistics Agency year Figure 2 Population trend

Regional Development in Korea: Current Conditions and Problems 1 Problem 2 : deepening of regional disparity Worsening of Gini Coefficient: The 2003 Gini Coefficient of Korea is 0.18, higher than the OECD average of Figure 3 Gini Index of TL3 regional GDP per capita

Gini Index of GDP per capita and per cent of population in regions with low GDP per capita, 2005 (TLS) Figure 4 Classification of Countries according to Gini index of GDP per capita

AreaPopulationGRDPGRDP Per Capita Capital Region East South Region Daekyung Region Honam Region Chungcheong Region Kangwon Region Jeju Region Source: Regional Development Commission (2009) Note: Area is based on 2005, and GRDP on 2004 Problem 3: Regions lack of global competitiveness There is a lack of competitiveness in the regions Table 2 Comparison of domestic regions with OECD 324 regions (unit: rank)

1 Problem 4: failing to respond to regionalisation and decentralisation (global mega-trend) There has been a maintaining of outdated local government areas and structures (two-tier structures). In addition, overlapping and ineffective projects for balanced regional development have been undertaken. Also, many projects are similar in nature and overlap functionally, causing inefficiency. 4

Examples of projects implemented since 1970s are as follows: 1970s 1980s 1990s 2000s 2010s New Community Development Movement(1971) Island Comprehensive Development Project (1988) Small-sized Town Project (1972) Isolated and Insulated Area Development Project (1990) Settlement Infrastructure Expansion Project (1990) Countryside Village Project (1991) Mountain Village Development Project (1994) Fishing Village Project (1994) Development Promotion Area Project (1995) Area Specification Development Project (1997) Culture and Toursim Resources Development Project (1999) Fishing Village-experiencing Project (2002) Traditional Theme-based Rural Development Project (2002) Green Rural Village- Experiencing Project (2002) Military Borderland Development Project (2003) Regional Specification Development District Project (2004) Specified Item Support Project (2004) Hometown Industry Support Project (2004) RIS Project for Rural and Mountainous Regions (2004) New Vitalization Project for Rural Area (2004) Village Comprehensive Development Project (2004) Eliciting Urban Residents into Rural Area Project (2006) Elementary Sphere of Life Development Project (2008) Figure 5 Examples of projects implemented

II. Governments Policies for Addressing Regional Problems Policy 1: strengthening regional competitiveness by super regionalisation From 16 provincial development to 5+2 super regional development (present structure =16 Provinces, 230 Districts) Figure 6 Classification by region

5+2 super regional development strategy Figure super regional development

Policy 2: Making an elementary sphere of life development plan and utilizing it to alleviate regional disparities The lives of rural area residents should be improved by making an elementary sphere of life development plan (for health, education, transport, jobs, etc.) and supporting it Figure 8 Map of 163 elementary spheres of life

Policy 3: devolving power to local government Central government power should be devolved to local government. This involves: -devolving functions of special purpose authorities into provincial government -devolving local financial and administrative power into provincial and district government Development-related power should be strengthened at local level

Categorical grants should be transformed into block grants Each department examines each detailed project, endorses it and allows local government to implement it (Figure 8, left) A responsible, integrated department examines projects at group level, and gives discretion power to local government. Hence, local government can undertake its resource use planning and implement this on its own (Figure 8, right) Dept ADept BDept E Dept D Dept C district 117 district Dept A Figure 10 Comparison of before and after grant system Categorical Grant-Based System Block Grant-Based System Unit: Billion

Policy 4: relocating departmental bodies to non-capital region Nine departmental bodies out of 16 are to be relocated to a region. Around 10,000 civil servants are to be relocated. Therefore, the capital city, Seoul, and Sejong City, a newly created administrative complex city, are to be twin polar regions, with a view to lessening regional disparities.

Sejong City 134km Figure 11 Location of the new administrative complex city Twin polar regions strategy

Policy 5: developing regions strategically by making the most of a region's characteristics Diverse mega projects (e.g. high-tech health care complex, international science business belt projects) are to be undertaken at regional level. Also, new growth-driving industry are to be created by associating each region with its neighboring region in terms of resource use and linkage effect.

Policy 5: Developing regions strategically by making the most of region's characteristics Diverse mega projects (ex: high-tech health care complex, international science business belt projects) to be made at regional level New growth-driving industry to be created by associating each region with its neighboring region in terms of resource use and linkage effect

Policy 6: making the most of growth potential The Principle of Relative Advantage Strategy is to be operated. Also, there is to be a strategy for maximizing the whole growth potential of the nation

III. The Governments Regional Development Model Beit East Sea Energy Tourism Beit Military Borderline Capital City Region Kangeon Region Daekyung Region Chungcheong Region East Soutn Region Honam Region South Sea Beit Jeiu Region West Sea New lndustry Beit Figure 12 The regional development model