'100 Days in Office' Kang Seok-hoon, KDB Chairman, Accelerates Busan Relocation and Restructuring

Kang Seok-hoon, Chairman of the Korea Development Bank, is explaining key issues at the 100-day inauguration press conference held on the 14th.

[Asia Economy Reporter Song Hwajeong] Kang Seok-hoon, chairman of the Korea Development Bank (KDB), who marked his 100th day in office, is expected to strongly drive various pending issues at KDB going forward. Since he firmly stated that the relocation to Busan, which has faced strong opposition from employees, is an irreversible national agenda, preparations are likely to begin in earnest. The sale of restructuring companies, including Daewoo Shipbuilding & Marine Engineering, is also expected to accelerate. Additionally, he plans to actively support key industries such as semiconductors to overcome the economic crisis.

On the 14th, marking his 100th day in office, Chairman Kang held a press conference to explain KDB’s major issues and present the future direction of the bank. During the conference, reporters asked many questions about the relocation to Busan, KDB’s biggest recent issue. Chairman Kang made it clear that the relocation to Busan is irreversible. He said, "The relocation of KDB to Busan was selected as a national agenda item, so it is my responsibility to carry out this national agenda well. The President publicly mentioned the relocation issue at the 7th Emergency Economic and Livelihood Meeting on the 31st of last month, and the Prime Minister and Deputy Prime Minister also confirmed it during the National Assembly Budget Committee’s inquiry. I hope people understand that I cannot overturn what the highest national leaders have decided."

Regarding the significance of KDB’s relocation to Busan, he explained that it was assigned the role of leading the revival of the Bu-Ul-Gyeong (Busan-Ulsan-Gyeongnam) region. Chairman Kang said, "In the past, the Bu-Ul-Gyeong region, centered on manufacturing, played a spearheading role in South Korea’s economic growth, but with the advent of the 4th Industrial Revolution era, the center shifted to the Seoul metropolitan area, and the Bu-Ul-Gyeong region relatively lagged behind. Not only the metropolitan area but also the Bu-Ul-Gyeong region must transform into a new 4th Industrial Revolution outpost, and ultimately economic development should be achieved on two axes: the metropolitan area and Bu-Ul-Gyeong. KDB’s relocation to Busan is to meet such demand."

For KDB’s relocation to Busan, legal amendments are necessary, but Chairman Kang revealed plans to proceed with expanding business assets and infrastructure even before the law is amended, indicating that preparations for the relocation will begin. He explained, "Even before the legal amendment, we plan to expand business assets and bases in the Bu-Ul-Gyeong region. The expansion of the Bu-Ul-Gyeong sales organization will proceed quickly by expanding the marine industry sector and increasing branch personnel, and it is expected to become visible around early next year." He added, "We also plan to establish an organization to prepare relocation plans in anticipation of future legal amendments."

Regarding employee opposition, he expressed his intention to continue persuasion. Chairman Kang was blocked by the labor union’s protest from his first day at work immediately after his appointment. Although he entered the office and held an inauguration ceremony two weeks after his appointment, employee opposition did not subside. They have been sharply confronting each other through overnight sit-ins and rallies in front of the chairman’s office. Kang said, "It is undesirable for KDB employees not to open their hearts and for the relocation to proceed just as the government directs. Since there is time until the legal amendment, I will make every effort to have deep discussions with many employees and have many opportunities to sincerely share each other’s thoughts."

On the 14th, the day of Chairman Kang Seok-hoon's 100-day inauguration press conference, employees held a rally opposing the relocation to Busan in the lobby on the first floor of the Industrial Bank headquarters.

Chairman Kang has previously played an important role in KDB’s whereabouts. In 2013, when he was a Saenuri Party member of the National Assembly, he proposed the Integrated KDB Act. This was a bill to reintegrate the Policy Finance Corporation, which had been separated due to privatization, with KDB. At that time, Busan-area lawmakers had proposed a law to relocate the Policy Finance Corporation to Busan, but at the request of financial authorities, Chairman Kang proposed the Integrated KDB Act, and the following year KDB was integrated, and the relocation of the Policy Finance Corporation to Busan was canceled. However, he is now in a position to lead the relocation to Busan as KDB chairman.

Before becoming KDB chairman, Kang served as a member of the National Assembly, economic secretary, and participated in the transition team of former President Park Geun-hye, and later served as a policy advisor in President Yoon Suk-yeol’s transition team, being recognized as a policy finance expert. Originally a professor, he entered politics by winning the 19th National Assembly election in 2012. In 2016, he was appointed economic secretary to the Presidential Secretariat. As the last economic secretary of the Park Geun-hye administration, Kang also concurrently served as policy secretary, a vacant position at the time. Having played the role of economic brain in two administrations, Kang believes that a sense of crisis is paramount regarding the current economic situation. He said, "Seeing former U.S. President Donald Trump introduce an America First policy and the subsequent President Joe Biden propose the Inflation Reduction Act, I could read the urgent sense of crisis the U.S. currently has. In the rapidly changing global economic situation, we must have a sense of crisis more than 10 times greater than the U.S."

Chairman Kang pointed out, "The two pillars that have formed the foundation of the Korean economy for decades?free trade and the principle of separating politics and economy?are collapsing. Free trade is being replaced by protectionism, and with the birth of the economic security era where security and economy are integrated, countries are focusing their national capabilities on nurturing their industries and securing global supply chains and safety."

Kang diagnosed, "Moreover, the Korean economy faces huge challenges such as digital and green transitions and the problem of ultra-low growth," and said, "I believe the ultimate goal of KDB is to raise the potential growth rate of our economy to overcome the upcoming ultra-low growth." He emphasized that KDB should take responsibility for increasing the gross domestic product (GDP) growth rate by 1 percentage point. To this end, he plans to select and support about five industries in the future. Kang said, "The first project will focus on supporting the semiconductor industry," adding, "We are considering supporting 30 trillion won over the next five years, including 10 trillion won for fabless foundries, 10 trillion won for fostering materials, parts, and equipment, and 10 trillion won for memory semiconductors." He presented KDB’s future vision as "breaking the low-growth cycle facing the Korean economy and becoming the spearhead for growth into a global economic powerhouse."

The restructuring of companies such as Daewoo Shipbuilding & Marine Engineering is also expected to accelerate. Kang said, "For Daewoo Shipbuilding & Marine Engineering to get out of its current state, a quick sale is necessary," adding, "The way to save Daewoo Shipbuilding is to have a new management entity that can strengthen research and development (R&D) and improve efficiency." Regarding HMM, he said that since it has become a normal company, a quick sale is appropriate. He also said that KDB Life Insurance’s sale conditions have improved due to higher interest rates compared to the past, and after preparation, it will soon proceed with the sale. Kang emphasized the importance of speed in restructuring companies on the brink of collapse. He said, "The principles of KDB’s restructuring have been prioritizing major shareholder responsibility, sharing pain among stakeholders, and sustainable management normalization, but in addition, immediate sale is necessary," adding, "It is better to proceed quickly with flexibility rather than dragging out time over sale price issues."

This content was produced with the assistance of AI translation services.