Lee Chang-yong, the governor of the Bank of Korea, emphasized the need to cultivate a few key cities for balanced regional development. He noted that the concentration in the capital area is exacerbating the ultra-low birth rate and household debt issues, stressing the need for effective policy changes.
During a welcoming speech at the joint forum on 'Challenges for balanced development, and strategies through indicators' held on the 26th at the Bank of Korea's branch in Jung-gu, Seoul, the governor said, 'A cold evaluation of whether the method of distributing policy support among various regions has actually achieved the intended effect, as in the past, is necessary.'
The governor emphasized that 'the Bank of Korea has suggested concentrating core infrastructure and resources in 2 to 6 key cities to create living conditions that rival those of the capital area,' adding, 'In a situation where everything is concentrated in Seoul, the positive ripple effects that can be gained by developing key cities nearby are much more realistic than expecting the small cities in the provinces to benefit from the trickle-down effect of Seoul’s growth.'
The governor stressed that excessive concentration in the capital area is even hindering youths' marriages and childbirth. He stated, 'The fierce competition and high living costs are the fundamental reasons why young people hesitate to marry and have children, but nearly all core functions in fields like economy, education, medical care, and culture are concentrated in Seoul, making it difficult for young people to have other options.'
He added, 'Parents also take on debt to afford high housing costs in areas with good private education environments for the so-called “In-Seoul” universities.' He remarked, 'While Seoul maintains abundant jobs and high income levels in this process, the sustainability of our entire economy and individual happiness are sacrificed on the other hand.'
At the forum, the Korea National Statistical Office announced quarterly Gross Regional Domestic Product (GRDP) statistics for the first time. The governor remarked, 'The most important thing in the process of implementing policies for regional development is accurately understanding the regional economic situation,' adding, 'I am confident that the quarterly GRDP announcement will play a key role in setting the right direction.'
According to the Bank of Korea, as of the end of 2023, the market capitalization of dwellings by region is as follows: Seoul (2,320 trillion won), Gyeonggi (1,986 trillion won), and Busan (389 trillion won). A total of 67.7% of the market capitalization is concentrated in the capital area. The ratio of market capitalization to GRDP in 2023 was highest in Sejong (4.5 times), followed by Seoul (4.2 times).
Meanwhile, the governor garnered attention by mentioning Kwang-soo, a cast member of the popular SBS TV program 'I Am Solo.' He stated, 'A doctor working in a region of Gangwon Province appeared on the TV program, mentioning that he has become the only doctor in that area, making it impossible for him to leave.' He added, 'While I feel deep respect for his dedication as a doctor, concerns have also increased about whether the increasingly shrinking regional economy can rely solely on individual mission and commitment.'