The 'San-eun Busan Relocation' That Will Change Pace After General Election Results... Aftershocks Continue

The labor and management of Korea Development Bank (KDB) are paying close attention to the results of the 22nd National Assembly election. This is because President Yoon Seok-yeol and the ruling party are focusing on relocating KDB to Busan. If the ruling party gains the upper hand, the relocation plan is expected to gain momentum; if the opposition wins, the relocation plan promoted by the government and ruling party may lose some of its driving force. However, since both ruling and opposition parties share a consensus on regional balanced development, there is growing speculation that the issue will inevitably be reignited in some form during the next election process.

On the 10th, the creditor meeting of Taeyoung Construction was held at the headquarters of the Korea Development Bank in Yeouido, Seoul. Signs opposing the relocation to Busan were placed in various spots, and reporters were waiting outside the door. Photo by Huh Younghan younghan@

According to the financial sector on the 9th, the partial amendment bill to the KDB Act, which was first proposed by People Power Party lawmaker Seo Byung-soo in January 2022, has yet to be brought before the full meeting of the National Assembly’s Political Affairs Committee and remains at the subcommittee stage. The amendment seeks to change Article 4, Paragraph 1 of the law, which states "KDB shall have its headquarters in Seoul Special City," to "KDB shall have its headquarters in Busan Metropolitan City." This is the final procedure remaining after all administrative steps for the Busan relocation have been completed.

The plan to relocate KDB to Busan was triggered during the last presidential election when President Yoon presented it as a key pledge for the Busan region. Since taking office, President Yoon has strongly pushed for the relocation. In May of last year, the Ministry of Land, Infrastructure and Transport designated KDB as a public institution subject to relocation, and Kang Seok-hoon, the newly appointed chairman of KDB trusted by President Yoon, established the Southeast Investment Finance Center in Busan and conducted consulting related to the Busan relocation, accelerating the process.

However, strong opposition from the KDB labor union and the cautious stance of the opposition party have slowed progress on the amendment to the KDB Act. While the opposition does not oppose the relocation of KDB to the provinces per se, it advocates a cautious approach, emphasizing the need for further discussion and review regarding the relocation of policy financial institutions.

Since there has been little progress on the KDB relocation over the two years since President Yoon took office, the financial sector expects the speed of the Busan relocation to be determined by the results of this general election. If the ruling party secures a majority or a large number of seats, the amendment to the KDB Act is expected to accelerate, if not within this National Assembly term, then soon after. Han Dong-hoon, the emergency committee chairman of the People Power Party, also raised his voice during the election campaign, saying, "We will definitely accomplish the relocation of KDB to Busan."

If the opposition party, which advocates caution, becomes the majority, there is speculation that the government and ruling party’s efforts to amend the KDB Act could face setbacks. The opposition is aligning with labor groups, nominating Park Hong-bae, former chairman of the Korean Federation of Trade Unions’ Financial Labor Union, as the 8th candidate on the proportional representation list of the satellite party "The Democratic Union."

However, the financial sector believes that even if the government and ruling party’s amendment to the KDB Act loses momentum due to the election results, the idea of relocating KDB to Busan itself will not lose strength. Both ruling and opposition parties share a consensus on regional balanced development. The Democratic Party of Korea has previously proposed multiple bills, including one by lawmaker Park Jae-ho to designate KDB’s headquarters in Busan, and another by lawmaker Kim Doo-kwan to delete the provision limiting KDB’s headquarters to Seoul.

The fact that the Busan-Gyeongnam (PK) region, once considered a stronghold of conservative parties after the merger of the three parties, is gradually becoming a battleground also supports this interpretation. Park Jae-ho, a Democratic Party candidate running for a third term in Busan’s Nam-gu district, recently announced a campaign pledge to "develop Nam-gu into a financial, transportation, and tourism hub through the relocation of KDB," stating, "I will push forward the KDB relocation pledge as the chairman of the Political Affairs Committee if re-elected."

A financial sector official said, "The attempt by the government and ruling party to relocate KDB’s headquarters may depend on the election results, but the idea of relocating to the provinces itself will not lose vitality," adding, "With the rapid decline of local regions to the point where self-deprecating remarks like 'The Old Man and the Sea' are made, and with the opposition gaining momentum in PK, discussions can be revived anytime during the nationwide local elections two years from now or the presidential election three years later."