At the Bank of Korea and Statistics Korea Joint Forum on Balanced Regional Development
Ripple Effect from Nearby Hub Cities Surpasses Trickle-Down Effect from Seoul’s Growth
Quarterly GRDP Will Play a Key Role in Balanced Development Policy
"For balanced regional development, it is necessary to intensively invest core infrastructure and resources in 2 to at most 6 hub cities to improve the quality of jobs, education, and cultural services, and to create living conditions comparable to the Seoul metropolitan area."
On the 26th, Lee Chang-yong, Governor of the Bank of Korea, stated this at the Bank of Korea and Statistics Korea joint forum held at the Bank of Korea in Jung-gu, Seoul, under the theme "Tasks for Balanced Development and Strategies through Indicators." He said, "We must coldly evaluate whether the regional balanced development policy, which has so far been implemented by dispersing support across various regions, has achieved its intended effects."
Governor Lee said, "When I say this, some may ask if other regions outside the hub cities will be left behind. However, in the current situation where everything is concentrated in Seoul, it is much more realistic to expect ripple effects from the development of nearby hub cities than to rely on the trickle-down effect from Seoul’s growth for small cities in the provinces," emphasizing this point.
He diagnosed that balanced regional development would be a measure to reduce side effects such as fierce competition and high housing costs caused by excessive concentration in the Seoul metropolitan area. Governor Lee explained, "These side effects are the fundamental reasons why young people hesitate to marry and have children, but since core functions such as economy, education, medical care, and culture are concentrated in Seoul, it is not easy for young people to have other options. Parents also take on debt to afford high housing prices and live in areas with good private education environments to achieve the goal of so-called 'In-Seoul universities.'" He diagnosed that while Seoul maintains abundant jobs and high income levels, the sustainable growth of the entire Korean economy and individual happiness are being sacrificed in this process.
What is important in the policy implementation process is to accurately grasp the economic situation of each region. Governor Lee introduced, "The key indicator for this is the Gross Regional Domestic Product (GRDP) statistics from Statistics Korea." He emphasized that just as it is difficult to establish national economic policies without Gross Domestic Product (GDP) statistics, it is unimaginable to discuss regional economic policies without GRDP statistics. He added, "Publishing GRDP quarterly is not easy even for major advanced countries, but Statistics Korea has achieved the accomplishment of estimating quarterly GRDP based on vast data accumulated over a long period and expertise."
Governor Lee said, "Just as GPS is essential for navigation systems to find the way, I am confident that GRDP will play a key role in setting the right direction for balanced regional development policies," and added, "I hope that the cooperation between the Bank of Korea, which estimates GDP, and Statistics Korea, which is responsible for GRDP, will create synergy and lead to more meaningful outcomes in the future."
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