The Bank of Korea: "Regional Balanced Development Policy Should 'Select and Concentrate' on Hub Cities"

A proposal has been made that a balanced development strategy of 'selection and concentration,' supporting regional hub cities by area, is necessary to curb the concentration of the domestic population in the Seoul metropolitan area.

The Regional Economy Survey Team of the Regional Economy Department at the Bank of Korea (BOK) explained in the 'BOK Issue Note' titled "Interregional Population Movement and Regional Economy," published on the 2nd, that "it is necessary to shift the development strategy, which has focused on evenly distributing budgets to all regions, to a hub city-centered approach to dramatically improve policy effectiveness and efficiency."

The report stated, "Past governments have consistently pursued regional balanced development policies and contributed significantly to regional economic development; however, the decline of non-metropolitan large cities continues, showing limitations," and added, "to provide quality jobs and services in non-metropolitan areas, it is necessary to enhance industrial scale and urban competitiveness centered on hub large cities by region."

According to the analysis by the Regional Economy Survey Team, the tendency to move to the Seoul metropolitan area is much stronger in rural areas than in large cities, it is difficult for small and medium-sized cities in non-metropolitan areas to achieve high growth in an era of population decline, and considering the radial road network formed in non-metropolitan areas, a growth strategy focused on hub cities can be an efficient and feasible balanced development paradigm.

Analysis of data from major countries also showed that concentration on hub cities in non-metropolitan areas actually suppresses concentration in the Seoul metropolitan area. The Bank of Korea's analysis of OECD country data revealed that the higher the proportion of the population in hub city areas (2nd to 4th largest cities) in regions excluding the metropolitan area, the lower the proportion of the metropolitan area population.

In particular, in Japan, which has actively responded to the recent crisis of regional extinction, net inflows to the top 10 cities outside the Tokyo metropolitan area have increased since the 2010s compared to the 2000s, while population inflows to the capital Tokyo metropolitan area have decreased.

According to the report, under a scenario assuming that movement from hub cities to the metropolitan area decreases to 10% of the current level, and half of the movement from non-metropolitan areas to the metropolitan area is replaced by movement to hub cities, significantly increasing inflows to hub cities, the population proportion of the metropolitan area could fall below half (49.2%) by 2053, 30 years later. The current population proportion of the metropolitan area in 2023 is 50.6%.

Accordingly, the Bank of Korea suggested, "It is necessary to concentrate major SOC (social overhead capital), cultural and medical facilities, and public institution relocations in hub cities, activate metropolitan organizations that integrate management of hub cities and adjacent areas, and promote movement within the region." It also added that if multiple hub cities are created, selection and concentration are needed for the infrastructure and industries to be accumulated in each hub city, and that knowledge industries should be concentrated in city centers and distances between clusters shortened.

This suggestion conflicts with the ruling party's current 'Mega Seoul' plan. Earlier, on the 30th of last month, the People Power Party decided as a party stance to incorporate Gimpo City into Seoul and announced various follow-up measures, including the enactment of a special law at the party level and discussions on forming a separate promotion organization. The ruling party's position to expand the capital's size conflicts in content with the report's intent to reduce concentration in the metropolitan area through the growth of hub cities.

However, a Bank of Korea official drew a line, saying, "Since this research was conducted independently of the Mega Seoul concept, it is difficult to say whether it opposes or supports the concept currently under discussion in the political sphere."

[Image source=Yonhap News]

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