Oh Kyun, Director of the Seoul Institute: "Repeated Universal Payments Could Destabilize the Market... Support Priorities Must Be Set More Precisely"

"If universal payments are repeated, instability could increase further. It is necessary to set support priorities in a more sophisticated manner."

Oh Kyun, director of the Seoul Institute, believes that welfare should be based on "sustainable livelihood stability." Given the limited financial resources, he argues that selective and strategic support, based on effectiveness and necessity, is needed rather than simple universal support.

On September 30, one day before the 33rd anniversary of the institute's founding, Oh Kyun met with us at the Seoul Institute in Seocho-dong, Seoul. Regarding the government's issuance of consumption coupons, he said, "In the short term, they can stimulate consumer sentiment and have a positive effect on domestic demand recovery." However, he also expressed concern that "if universal payments are repeated, consumption may be concentrated in certain industries or the asset market may be stimulated, leading to greater instability."

"Regulatory reform" is also an area he prioritizes for restoring people's livelihoods. This is why, even after taking office as director, he continues to serve as the chair of the Administrative and Social Affairs Subcommittee of the Presidential Regulatory Reform Committee. Oh Kyun stated, "Deregulation may cause side effects and lead to disputes over responsibility, but local government and central government officials need to have more will and actively consider these issues."

As the head of the Seoul Institute-Seoul's official think tank and the largest convergence research institute in Korea-Oh Kyun's role is noteworthy. In March, he became the 30th president of the Korea Council of City and Provincial Research Institutes, building a foundation for cooperation through communication with research institutes nationwide. In line with this, he selected "consolidation of local autonomy" as a key project for the council and began research on "measures to transfer central government authority." He said, "To support this, we held expert forums to discuss institutional improvements and ways to secure fiscal autonomy," adding, "We will continue to present grounds and alternatives to persuade the central government and the National Assembly." The following is a Q&A.

Oh Kyun, director of the Seoul Institute, emphasized "regulatory reform" in an interview with Asia Economy on the 30th, stating, "Local government and central government officials need to have more will and actively think about it." Photo by Yoon Dongju

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-Seoul City also expressed concern that the issuance of consumption coupons could stimulate the asset market. This seems to imply that selective support is necessary.

▲As seen in the case of emergency disaster relief funds during the COVID-19 period, there was an immediate increase in sales for small business owners and the self-employed. However, in Seoul, where volatility in the housing and asset markets is high, side effects must be carefully managed. For example, substantial support should be focused on groups whose livelihoods are directly affected, such as low-income households and small business owners. Tailored support should be designed for industries that can lead to revitalization of the local economy and job retention.

-Seoul City and its districts must bear the financial burden for the government's issuance of consumption coupons. There are calls to change unreasonable systems such as the ratio of national treasury subsidies.

▲For the issuance of consumption coupons, Seoul City must shoulder about 350 billion won, and the districts about 250 billion won. Only Seoul is subject to a different national treasury subsidy ratio, making it inevitable to issue local bonds. Although Seoul's budget appears large, more than 65% is legally mandated spending, such as support for districts, the Office of Education, and national subsidy projects, so fiscal capacity is limited. This issue should be addressed from the perspective of expanding local fiscal authority and balanced national development. We will continue to present grounds and alternatives to persuade the central government and the National Assembly.

-Seoul City has declared this year the first year of regulatory abolition. Are there any areas the institute should address together?

▲In the housing sector, we are supporting the activation of supply by streamlining licensing procedures and abolishing unreasonable regulations. In emerging industries, we are creating an environment so that future industries such as artificial intelligence, bio, and robotics are not hindered by ambiguous regulations. Led by the Regulatory Innovation Research Group, we will reflect policy realities and citizens' voices in our improvements. We will present directions that can achieve both "economic resurgence" and "improvement of citizens' quality of life."

-Seoul City is promoting "accompanying the disadvantaged" as a selective welfare support policy. Some say a broader approach across various fields is needed.

▲The Seoul Institute is strengthening its research foundation and support so that the principle of accompanying the disadvantaged is reflected throughout the entire policy process, from establishing standards at the design stage to implementation checks and post-evaluation. Going forward, this will evolve to address the digital divide, support vulnerable groups within the middle class, and spread specialized projects in each district. We will continue to closely examine blind spots in the implementation process and conduct research that citizens can truly feel.

-The institute is focusing on research in artificial intelligence (AI) through organizational restructuring. What is the future research direction?

▲Internally, we are introducing large language models (LLMs) and AI-based data analysis to our research work. We are also working to generate new policy ideas by utilizing research reports and Seoul City data accumulated over the past 30 years. As the use of AI expands, issues such as ethics, security, data bias, and personal information protection are becoming increasingly important. Therefore, we are conducting systematic research on countermeasures for side effects and marginalized areas.

-Recently, Seoul City announced a real estate policy focused on "private sector-led redevelopment projects." What should the Seoul Institute consider?

▲Private sector-led projects are the right direction in terms of efficiency and speed compared to the public sector. However, relying solely on private redevelopment projects has limitations in establishing balanced housing policies that ensure housing stability for ordinary citizens and encompass various social groups. Therefore, complementary strategies such as expanding public rental housing through diverse approaches, including the Mirinae House initiative, should be implemented in parallel. We will focus more on research such as housing supply and demand forecasting, analysis of demographic changes, long-term demand projections using digital twins and big data, developing linkage models between redevelopment projects and public housing, and proposing ways to streamline procedures and adjust regulations.

-There are claims that Seoul has reached the limits of development. What tasks are needed to strengthen urban competitiveness?

▲As Seoul marks the 80th anniversary of liberation, it must prepare for the next 80 years. Policy should focus on enabling citizens to enjoy daily life and maintain a pleasant life cycle. Seoul's competitiveness depends on realizing values such as social inclusion and cultural appeal, including responding to the climate crisis, technological innovation, and accompanying the disadvantaged. We will work to concretize these values in policies and systems.

-As director of the Seoul Institute, you have completed half of your three-year term. What are your goals for the remainder of your term?

▲During the first half of my term, I focused on integration with the Seoul Institute of Technology. Now, we must produce visible outcomes in convergence research. We will strengthen convergence research to combine new technologies such as AI and big data with life-oriented tasks, including responding to the climate crisis, ensuring the safety of aging infrastructure, and welfare and care. We also need to concentrate our research capabilities on software fields such as culture, arts, and tourism, where research has been relatively lacking.

On the 30th, Oh Kyun, director of the Seoul Institute, stated in an interview with Asia Economy, "Going forward, the Seoul Institute will strengthen convergent research to integrate new technologies such as AI and big data into practical, everyday tasks." Photo by Yoon Dongju

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