Lee Chang-yong: "We Must Create at Least One Successful Case in Regional Hub Cities"

2024 BOK Regional Economy Symposium
Discussions on the Need for Hub City Development
"Changing Governance Structure Is Key to Solving Regional Disparities"

(Photo by Bank of Korea)

Lee Chang-yong, Governor of the Bank of Korea, stated, "To solve the (regional disparity) problem, we ultimately have to change the governance structure," adding, "We need to create at least one successful case that can replace Seoul and find a consensus."

Governor Lee made these remarks on the 19th after the '2024 BOK Regional Economy Symposium' held at the Signiel Hotel in Haeundae-gu, Busan. He said, "Hub cities involve vested interests, so it does not seem to be an easy problem to solve," and "For the current trend to change, the governance structure must be altered." The major challenge is how to reach an agreement when fostering specific minority regions as hub cities.

The governance structure he referred to encompasses the political and administrative domains of regional issues. When developing hub-centered cities, certain resources may concentrate in the hubs. At this time, surrounding areas may feel marginalized. Also, when dealing with regional policies, to create specific metropolitan areas or revitalize hub cities, both a vertical system at the central government level and a horizontal system at the regional level must operate simultaneously. The 'governance structure reform' mentioned by Governor Lee is interpreted as an approach that includes the operation of these vertical and horizontal systems along with cooperation with citizens.

Governor Lee continued, "No matter how much economic rationality and evidence are analyzed in Bank of Korea reports, fundamental problems are difficult to solve," emphasizing, "Although much effort has been made for balanced regional development, when there are no significant achievements, it is time for us to ask ourselves whether we can create at least one successful case that can replace Seoul and find a consensus."

Meanwhile, the symposium featured discussions on the necessity of developing hub cities. In Session 1, Professor Ma Kang-rae of the Department of Urban Planning and Real Estate at Chung-Ang University said, "With changes in industrial structure due to the Fourth Industrial Revolution, quality jobs have concentrated in hub regions (the Seoul metropolitan area)," adding, "To defend against population decline, local hub cities must be fostered." Following this, Jeong Min-su, head of the Bank of Korea's Regional Research Support Team, emphasized, "Half of the growth gap between the Seoul-Chungcheong area and other regions is due to productivity differences," and "We must invest intensively in non-metropolitan hub cities to build a metropolitan economic zone comparable to the Seoul metropolitan area."

Session 2 focused on the Southeast regional economy. Professor Lee Geun-jae of the Department of Economics at Pusan National University argued, "While the industrial linkage within the Busan-Ulsan-Gyeongnam (Bu-Ul-Gyeong) area has weakened, the linkage with the Seoul metropolitan area has strengthened," advocating for governance construction such as integrating administrative districts. Nam Ki-chan, a research fellow at the Korea Research Institute for Human Settlements, stated, "We need to consider a metropolitan regional labor market that connects central cities and surrounding cities as a whole," and "Changes such as expanding accessibility infrastructure that links surrounding areas centered on hub regions are necessary."

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