The establishment of the Southeast Region Investment Corporation, a presidential campaign pledge by Lee Jae-myung, is seeing disagreements over the investment issue. The bill currently proposed by the Democratic Party of Korea includes a plan for joint investment by state-run banks and the relevant local governments, but the local governments have conveyed their opposition to the National Assembly.
The government also presented a plan to establish the Southeast Region Investment Corporation as an institution under the Korea Development Bank, but it is reported that local governments oppose it over concerns about a reduced role. In local communities and the financial sector, some say the corporation's launch is faltering due to intertwined political complications.
According to the financial sector and the National Assembly on the 16th, Busan City recently conveyed to the National Policy Committee its view of "minimizing local government investment" in relation to the "Act on the Establishment and Operation of the Southeast Region Industrial Investment Corporation." The bill proposed by Democratic Party lawmaker Min Byung-deok includes a plan for the 3 trillion won capital of the Southeast Region Investment Corporation to be jointly shared by three state-run banks—industry, export-import, and corporations—and by local governments including Busan, Ulsan, and South Gyeongsang. Busan City conveyed its opposition to this. It is reported that Busan effectively prefers a plan in which local governments do not invest.
As an alternative, the government is said to be reviewing a plan to establish the corporation as a 100% subsidiary of the Korea Development Bank. However, Busan City is reportedly opposed out of concern that if only the Korea Development Bank invests, the capital will shrink and the functions will be reduced.
There are also ongoing disagreements over the method of establishing the institution. The government is pushing to establish it as a corporation, while Busan City is demanding a state-run bank structure. On top of this, the Ministry of Economy and Finance expressed a negative view on creating a new institution, saying "the corporation's role would overlap with existing policy finance institutions such as the Korea Development Bank and the Export-Import Bank of Korea, raising concerns about inefficiency."
In the financial sector, some interpret the clash of opinions among the National Assembly, ministries, and local governments over the establishment of the Southeast Region Investment Corporation as a power struggle ahead of the next Busan mayoral election. Jeon Jae-soo, the Minister of the Ministry of Oceans and Fisheries, who is actively pushing for the establishment of the Southeast Region Investment Corporation and the transfer of the Ministry of Oceans and Fisheries and HMM to Busan, is widely expected to run as the Democratic Party's Busan mayoral candidate in next year's local elections. In response, People Power Party Busan Mayor Park Hyung-joon is said to be not cooperating with government policy.
The People Power Party is raising concerns that the government's policy on Busan City is a stepping stone for Jeon, the Minister, to run for Busan mayor. People Power Party lawmaker Jeong Dong-man said, "We are worried that Minister Jeon's position at the Ministry of Oceans and Fisheries is being used to build credentials for a Busan mayoral run."
A financial industry official said, "We understand that the recent acceleration of the HMM sale is being led by Jeon, the Minister, rather than the line ministry."