[Feature] Jeonnam-Gwangju Integrated Special City’s ‘20 Trillion Won Over 4 Years’... Will It Change Lives Beyond the Numbers?

Government Task Force to Outline Fiscal Support Plan by Mid-Next Month
New Grant Tax and Support Funds Under Review
"Fiscal Autonomy Will Decide Success or Failure of Integration"
Relocation of Public Institutions and Industrial Incentives Discussed
Civil Society: "Ultimately, It's About Jobs"

The financial foundation for the Jeonnam-Gwangju Integrated Special City, a support plan worth up to 20 trillion won over four years, is expected to take shape around the middle of next month. As the government has signaled unprecedented financial support as a core incentive for administrative integration, the local community is paying close attention not just to the size of the budget increase, but to how much autonomy will be guaranteed in the way the funds are distributed.

The key issue of this support plan is whether the Integrated Special City can secure genuine fiscal sovereignty, allowing it to design its own future industries and address regional issues, moving beyond the current local finance structure, which has relied heavily on central government-designed national projects.

According to coverage by The Asia Business Daily on May 15, the "Integrated Fiscal Support Task Force (TF)," comprising officials from the government and relevant ministries, is currently working on a support plan for the Jeonnam-Gwangju Integrated Special City, which is expected to be finalized by mid-next month.

An image depicting the concept of the 'Jeonnam-Gwangju Integrated Special City,' which connects Jeonnam and Gwangju into a single administrative region. Created using ChatGPT to aid in understanding the article.

Previously, the government announced plans to provide up to 5 trillion won per year—totaling 20 trillion won over four years—in fiscal support to the Integrated Special City. In addition, the government is considering measures for reallocating national resources, such as establishing a new (tentatively named) "administrative integration grant tax" and introducing dedicated administrative integration support funds.

This approach is fundamentally different from the existing national subsidy programs, where the central government dictates the allocation of funds. The core of the new plan is to empower the Special City with the "fiscal strength" to independently design and execute its own budget in line with local needs.

The institutional framework is already beginning to take shape. On May 8, the Ministry of the Interior and Safety, Gwangju City, and Jeonnam Province held the launch ceremony for the "Jeonnam-Gwangju Integrated Special City Preparation Committee" at the National Asian Culture Complex in Gwangju, marking the start of full-fledged deliberation and coordination.

At the event, Kim Minjae, Vice Minister of the Ministry of the Interior and Safety, stated, "The Jeonnam-Gwangju Integrated Special City, which will launch on July 1, will become the nation's third-largest ultra-wide economic zone with a population of 3.18 million people and a GRDP of 159 trillion won. From next year, we will grant it status and authority equivalent to Seoul Special City, and through a pan-government support committee, we will provide full support to ensure the Integrated Special City settles in quickly."

Kim Minjae, Vice Minister of the Ministry of the Interior and Safety, is delivering a greeting at the launch ceremony of the Jeonnam Gwangju Integrated Special City Preparation Committee held on the afternoon of the 8th at the National Asian Culture Complex in Gwangju. Photo by Song Bohyun

Beyond '20 Trillion Won Support'... Securing Fiscal Autonomy Is Key

The critical issue for the local community is not the "20 trillion won" figure itself, but the actual distribution method. The effectiveness of integration will depend on whether the funds are provided as "block grants" that the Integrated Special City can manage independently, or as "national projects" that require approval from each ministry.

An official from Gwangju City commented, "The real benefit hinges not on a simple increase in the budget, but on how much of the available resources can be used autonomously by the region. In particular, it is crucial that the new support funds are excluded from the calculation of the standard fiscal revenue so that there is no 'balloon effect' where other national funding is reduced." An official from Jeonnam Province also noted, "Whether the funds are allocated as grants or through special accounts, the perceived impact will depend on how much the approval process by central ministries is streamlined."

Some have also raised the need for the "Integrated Special Grant Tax" to be operated separately. If the annual 5 trillion won in funding is incorporated into the existing local finance system as is, a surge in the standard fiscal revenue could result in the budget for other projects being cut, creating negative side effects.

Accordingly, there are growing calls to manage the finances of the Integrated Special City separately from the existing system, thereby ensuring the region's independence to make long-term industrial strategy and investment decisions on its own.

Public Institutions and Industrial Incentives... 'Ultra-Wide Economic Zone' Experiment

The government's support plan is not limited to finances. Discussions are underway to transfer administrative authority equivalent to that of Seoul Special City, and to give priority consideration to the Integrated Special City in the second round of public institution relocations scheduled for 2027.

Specifically, expanding the number of deputy mayors and strengthening autonomy in organizational structure and personnel, as well as upgrading key positions, are under review. Other incentives include expanding support for investment promotion and cultural industry promotion zones, deregulation, and tax benefits to attract businesses.

Kang Hyoseok, Head of the Jeonnam Administrative Integration Preparatory Task Force, is holding a meeting related to the maintenance and legislative notice of the Jeonnam-Gwangju Integrated Special City autonomous regulations at Jeonnam Provincial Government Office on the morning of the 12th. Photo by Sim Jinseok

A representative from an economic group in Gwangju remarked, "Up to now, budget support has been a short-term remedy, but now we need fundamental changes that can transform the structure of industries and jobs themselves. If the relocation of public institutions linked to strategic industries such as AI and future mobility materializes, the city's growth engine will be completely restructured."

"Ultimately, Citizens' Lives Must Change"

However, there are still many hurdles to overcome. Both cities and provinces have requested government support for costs required for launch preparations, such as organizational restructuring and integrating information networks. After integration, issues like office allocation, organizational consolidation, and balanced regional development could become sources of conflict in the future.

Citizens express both hope and concern. A thirty-something office worker met in Seo-gu, Gwangju, said, "There were grand plans in the past as well, but they did not stop the outflow of young people. The only real measure of integration will be whether actual jobs that can change my life are created, rather than the '20 trillion won' figure."

The Jeonnam-Gwangju Integrated Special City is now being tested as a model for local autonomy. The government's promised "20 trillion won over four years" is not simply compensation. The success or failure of the integration will hinge on whether these funds translate into autonomous capacity for the Special City, and whether the megacity vision leads to tangible progress in industry, jobs, and the quality of life for citizens.

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