The government will revamp the evaluation and allocation system for the 1 trillion won Local Extinction Response Fund, which is given to areas at risk of disappearing due to population decline. The move follows criticism that eligible regions have focused only on simple facility construction to receive more funds, yielding little real effect in attracting people.
The Ministry of the Interior and Safety said on the 14th it will completely overhaul the Evaluation and Allocation System of the Local Extinction Response Fund for 2027.
The Local Extinction Response Fund was introduced in 2022 as a resource to support region-led efforts to address local extinction. The plan is to inject a total of 1 trillion won to improve living conditions in local governments and boost regional vitality.
Local governments have in fact developed new initiatives with the fund's support. Gimje in North Jeolla converted an idle, closed brewery into a base space for young people's startup and cultural activities. There, a range of projects are underway, including makgeolli production, youth housing support, and a guesthouse operation. In addition, Hongcheon County in Gangwon built a lease-type smart farm, and Danyang County in North Chungcheong built a public health center to address gaps in local medical services.
However, critics said these facilities have not actually been used for projects to increase the population and enhance regional vitality. Many also noted limits in producing results that residents can feel.
In response, the Ministry of the Interior and Safety (MOIS) decided to revamp the fund's evaluation and allocation system by reflecting input from experts and local governments.
First, it will expand the scope of use to projects that have a tangible effect on increasing the population, rather than simple infrastructure building. The goal is to allow the fund to be used for a variety of programs that improve residents' living conditions, such as jobs, housing, and care.
It will also encourage economic actors directly run by residents, such as village enterprises and cooperatives, to participate in fund projects. The aim is to create a virtuous cycle in which the fund is reinvested in the region.
Support will also be strengthened so that local governments can establish investment plans focused on solving local problems. Residents will directly participate in the process of identifying local conditions, setting targets for issues to address, and discovering tasks. Authorities will enhance the capabilities of public officials in charge of establishing investment plans and promoting projects related to the Local Extinction Response Fund, and will also provide consulting to support resident participation.
In addition, local governments will be guided to establish medium-term investment plans for the fund. Because medium-term plans take a long time, local governments had tended to focus on short-term investments to launch projects quickly and reap results just as fast. Under the new approach, the fund will be managed flexibly in line with medium-term plans set by local governments.
Kim Geun-ho, director general for balanced development at the Ministry of the Interior and Safety (MOIS), said, "To raise the level of effort by local governments, we have ensured that regions with excellent fund investment plans receive more resources," adding, "We will widen the ratio between the minimum and maximum amounts, and increase both incentive amounts and the share of higher tiers."
Authority and responsibility for the metropolitan support account will also be greatly expanded. This refers to resources that support linked projects across a wider area beyond basic local governments. Moving away from a simple reallocation method, its functions will be strengthened to include discovering linked and cooperative projects at the metropolitan level, supporting the establishment of investment plans for basic local governments, and identifying tasks to address local extinction.
Yoon Ho-jung, Minister of the Ministry of the Interior and Safety (MOIS), said, "We will continue to provide support by reflecting voices from the field so the fund can serve as an effective primer to produce results that residents can feel and to overcome the crisis of regional extinction."