[On the Reporter's Desk] Not an 'Administrative Failure,' but a Political Narrative That Shook the Investment Environment

Nonsan City Hall Panorama

Some local politicians from the Democratic Party have labeled the recent investment agreement between defense contractor Korea Defense Industry (KDI) and Yeongju City, North Gyeongsang Province, as an "administrative failure" on the part of Nonsan City.

However, when examining the flow of investment, it is difficult to view this matter solely as an administrative issue.

In November of last year, Democratic Party Assemblyman Hwang Myungseon described the KDI Nonsan plant as a "bomb factory," criticizing it as a facility that threatens the safety of residents. This sparked growing controversy within the local community.

Assemblyman Hwang’s remarks quickly spread throughout the region, and a provocative narrative labeling the city as a "city producing weapons of mass destruction" was repeatedly reproduced. Objective verification of the plant’s actual operations or its safety management system was pushed aside.

KDI completed the first phase of investment by building a plant in Yangchon-myeon, Nonsan City. This was the result of an official investment agreement and a successful attraction by Nonsan City.

However, as the company entered the phase of additional investment and business expansion, conflicts began to intensify. For the company, large-scale additional investment depends not only on permits but also on the level of local conflict and the stability of the political environment-both of which are key factors in their decision-making.

According to reporting, concerns were shared internally at KDI that prolonged political and social conflict in the Nonsan area could become a burden for business expansion.

KDI considered shifting its focus from conventional weapons to unmanned systems such as drones, AI, and robotics, and ultimately signed an agreement with Yeongju City, which offered a relatively stable investment environment. KDI explained this as an "alternative choice for additional investment," reflecting this line of reasoning.

Ironically, Assemblyman Hwang, who had strongly opposed the so-called "bomb factory," expressed a positive stance toward KDI’s plans to pivot to drones and R&D.

The strong opposition narrative was established first, followed by discussions on industrial transformation, and in the meantime, the company chose a location other than Nonsan.

Reducing this issue to an administrative failure misses the essence of the problem. It is more accurately an example of how political statements and narratives can disrupt the local investment environment and ultimately influence corporate decisions.

Before assigning blame to the administration, it is necessary to reflect on how the conflict was amplified and what opportunities the region missed as a result.