A claim has been raised that the Korea Regional Economic Development Institute under the Ministry of Trade, Industry and Energy, established to foster regional industries, is not fulfilling its role. Although it has been set up in major regions nationwide, critics said it has failed to receive proper institutional and financial support due to structural limitations.
The Ministry of Trade, Industry and Energy on the 19th held the "regional industry policy forum for balanced regional growth" at the K-BALANCE 2025 at the Ulsan Exhibition and Convention Center (UECO) in Ulju-gun, Ulsan, in the afternoon.
Attending the forum were the regional economy coordination division of the Ministry of Trade and Industry (MOTI); Song U-gyeong, senior research fellow at the Korea Institute for Industrial Economics & Trade (KIET); Jang Jong-won, head of the Gyeongbuk Regional Economic Development Institute; Lee Hui-hun, former head of the Gangwon Regional Economic Development Institute; and Bae Su-hyeon, principal research fellow at the Busan Development Institute.
Participants at the forum agreed that the role of the regional industry promotion institute has become unclear. They said the institute was established in the early 2000s in nine regions in the form of planning teams. After going through forms such as evaluation teams and support teams, it is now operated as promotion institutes in 14 regions. Its main role is planning and evaluation management of projects to foster regional industries.
As the organizational form changed several times, the institute's role was reduced. Jang Jong-won, head of the Gyeongbuk Regional Economic Development Institute, said, "I have worked in the organization for more than 20 years, and my affiliation has changed four times, and the projects under management have also decreased," and added, "Among the 14 regions, those that receive support from local governments are in a better situation, but those that do not have no funds for employee salaries, so staff are taking unpaid leave."
The reason the institute is struggling financially is that it can only plan and evaluate government-related projects. Even these projects continue to decrease. When the institute asks local governments for help, it is said they cannot provide support because the institute is neither a local government grants-funded agency nor a public institution. Jang said, "As the government announced the five axes and three specialized zones strategy and rolled out regional growth projects, central support and legal and institutional frameworks are needed so the institute can play an active role."
Lee Hui-hun, former head of the Gangwon Regional Economic Development Institute, also said, "Since the scope of management targets in regional projects has been reduced, the institute is in financial difficulty," and added, "Even if we try to expand projects, we do not meet the eligibility requirements. No matter how hard we try, there is no way to do it."
Bae Su-hyeon, principal research fellow at the Busan Development Institute, said, "The institute has a long history, but it has become ambiguous because institutions and finances do not support it," and added, "The authority over the institute does not lie with the regions; the central ministries do everything." He then said, "It is like creating a soccer team to play soccer and then telling it to play baseball."
Accordingly, there is an analysis that the institute's status and role should be strengthened in step with the push for the five axes and three specialized zones strategy. Song U-gyeong, senior research fellow at the Korea Institute for Industrial Economics & Trade (KIET), said, "Support for the autonomy, decentralization, and balanced development-related tasks of the Presidential Committee for Decentralization and Balanced Development at the city and provincial level should be expanded so the institute can play an active role," and added, "The discovery, planning, and evaluation of projects under the integrated competitive bidding system should also be supported."