[BOK Focus] Why the Controversy over 'Gimpo Seoul Incorporation' Requires Attention to the Bank of Korea Report

Intense Criticism Focused on the Capital Region
Need to Prevent Concentration by Strengthening Hub Cities
Improvement Required in Policy Effectiveness and Efficiency

"There is no case in advanced countries worldwide where over 50% of the population is concentrated in just about 10% of the land area. Considering the current situation where the concentration in the Seoul metropolitan area continues despite decades of balanced development policies, it raises doubts about whether maintaining the current policy direction is appropriate." (Bank of Korea report on interregional population movement and regional economy)

Amid the heated controversy over the ruling party's push to incorporate Gimpo City in Gyeonggi Province into Seoul, a report by the Bank of Korea strongly criticizing the concentration in the Seoul metropolitan area has become widely discussed among experts. Although there is fierce debate that this is merely populism aimed at securing votes from the Gimpo region ahead of next year's general election, the People Power Party is pushing hard, making the Gimpo-Seoul incorporation a major political issue. While pro and con opinions from political circles and stakeholders clash, the presidential office issued an official statement the day before saying that "consultations are underway from various angles."

In this atmosphere, the reason the Bank of Korea's report is attracting attention is that it candidly criticized the drawbacks of metropolitan concentration point by point and argued that the development strategy, which so far focused on evenly distributing budgets to all regions, needs to be completely reconsidered. Experts point out that as each political party and local government repeatedly pursue only their political interests and regional benefits, voices considering the country's future comprehensively have disappeared. In response, the Bank of Korea proposed a realistic alternative to foster regional hub cities.

◆Accelerated Decline in Birthrate Due to Youth Outflow from the Seoul Metropolitan Area= According to the Bank of Korea's report "Interregional Population Movement and Regional Economy," published on the 3rd, about 50% of the population is concentrated in the Seoul metropolitan area, which accounts for approximately 12% of the national territory, showing an unprecedented level of concentration globally. This concentration has intensified recently due to active population movement among the youth. In particular, the accelerated outflow of young people to the metropolitan area not only places a heavy burden on the non-metropolitan regional economies but also accelerates population decline due to reduced birthrates.

In fact, over the past 20 years, the birth loss in the Honam region in 2021 due to youth outflow was as high as 49.7% of the number of births, while the Daegyeong and Dongnam regions were at 31.6% and 21.9%, respectively. When young people leave, birthrates decline, and aging accelerates, regional economies face significant constraints on industrial growth and job diversity, which in turn becomes a factor causing further population outflow. Even the Seoul metropolitan area, which attracts youth, suffers from intensified competition due to excessive urban density, which suppresses marriage and childbirth, undermining social sustainability. The deepening regional disparities ultimately cause side effects that weaken the stability and growth foundation of the national economy.

[Image source=Yonhap News]

◆Side Effects of Seoul's Unipolar System... Hub Cities Not Fulfilling Their Roles= The Bank of Korea particularly noted that the gap between major cities in Korea and Seoul has widened in most fields such as economy, culture, and healthcare since 2015. As the unipolar system centered on Seoul solidifies, other major cities, which should generally attract population from surrounding areas, are failing to fulfill their roles. The government has long pursued regional balanced development policies to break the vicious cycle of population outflow and regional economic deterioration, contributing to improving the quality of life in underdeveloped areas and expanding self-sustaining growth bases. However, the concentration in the metropolitan area has only intensified, showing the limits of policy efforts.

According to the Organisation for Economic Co-operation and Development (OECD), the degree of concentration in the Seoul metropolitan area is severe compared to major advanced countries. This year, the population ratio of Seoul to Busan is 2.8 times, which is a larger gap between the capital and the second-largest city than in comparable major countries with similar land and economic scales (around 2 times). In major countries such as Germany and Japan, concentration in hub cities outside the capital has actually helped curb capital concentration, but in Korea, hub cities are failing to fulfill their roles, accelerating metropolitan concentration.

Jung Min-su, deputy head of the regional economy research team at the Bank of Korea, suggested, "The development strategy, which has so far focused on evenly distributing budgets to all regions, should be shifted to focus on hub cities to dramatically improve policy effectiveness and efficiency." He added, "If hub cities in each region recover their scale and central functions to maximize the industrial competitiveness and agglomeration economy of the entire region, it is a realistic way to alleviate one-sided concentration."

◆160 Trillion Won Budget Spent Over 20 Years, Yet Metropolitan Concentration Deepens= The government is currently establishing the 5th National Balanced Development Plan (2023?2027). The Bank of Korea views that rather than the existing strategy of evenly distributing budgets to all cities, selecting and intensively nurturing "core hub cities with potential" is an effective alternative to enhance policy effects and prevent metropolitan concentration. Despite investing over 160 trillion won in the past 20 years, metropolitan concentration has only intensified, so sticking to past regional balanced development strategies cannot solve the problem. The proposal is to focus policy on nurturing hub cities such as Busan, Daegu, Gwangju, and Daejeon to reduce the gap between the metropolitan and non-metropolitan areas. However, the Bank of Korea clarified, "This report was conducted independently of the ruling party's Gimpo-Seoul incorporation mega-Seoul controversy," emphasizing that "the purpose is to reduce the drawbacks of metropolitan concentration by fostering hub cities."

Hong Seok-cheol, standing member of the Presidential Committee on Ageing Society and Population Policy, said, "As the metropolitan area absorbs youth from local areas, metropolitan concentration intensifies, and regions are engaged in a zero-sum game to attract young people." He evaluated, "The metropolitan concentration phenomenon acts as a factor accelerating low birthrates, and the plan to nurture core hub cities to reduce the gap between metropolitan and non-metropolitan areas can be a realistic alternative." He added, "However, considering birthrates, not only the metropolitan area but all regional cities are experiencing simultaneous declines, which indicates that jobs, housing, and quality of life collectively affect birthrates. It is time to seek concrete measures and solutions to prevent the metropolitan concentration phenomenon and the crisis of local extinction in the long term, rather than engaging in futile political debates."

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