Balanced growth plan aims to boost local autonomy, narrow inequality

Lee Han-joo, head of the State Affairs Planning Committee, announces the Lee Jae Myung government's five-year state governance blueprint during a public briefing at Cheong Wa Dae in Seoul, Wednesday. Yonhap

The Lee Jae Myung administration is set to advance a national balanced development plan focused primarily on fostering five regional mega hubs across the country, while enhancing the autonomy of Gangwon and North Jeolla provinces and Jeju Island, a presidential committee announced Wednesday.

As part of efforts to create “a nation where everyone prospers together,” the initiative also aims to narrow disparities between social groups, bridge the divide between large corporations and small businesses and foster cooperation between labor and management.

This balanced growth approach is one of the five key national policy goals, outlined in the five-year state governance blueprint unveiled by the State Affairs Planning Committee.

The so-called “five regional mega hubs and three special self-governing provinces” initiative is a centerpiece of the balanced growth strategy. The government has designated the greater Seoul area, southeast region, Daegu-Gyeongsang region, central region and Honam region as five major growth hubs. It also grants Gangwon and North Jeolla provinces and Jeju Island special self-governing status with significantly expanded autonomy and fiscal privileges.

The initiative seeks to foster tailored development based on each region’s industrial, cultural and tourism assets, while narrowing the gap between the Seoul metropolitan area and regional provinces.

The government plans to back this with concrete measures such as expanding transportation infrastructure linking the hubs, creating innovation clusters and completing the development of Sejong City as the administrative capital.

It will also move ahead with a second round of public institution relocations to align with core industries in each hub, maximizing job creation in the regions and encouraging population dispersion.

“We will simultaneously pursue governance, fiscal and institutional reforms to support this strategy and build a region-led growth foundation,” said Rep. Park Soo-hyun of the ruling Democratic Party of Korea, who oversees balanced national development measures for the presidential committee. Park promised visible results over the next five years.

President Lee Jae Myung enters the venue to attend the State Affairs Planning Committee’s public briefing at Cheong Wa Dae in Seoul, Wednesday. Yonhap

Alongside this flagship initiative, the presidential committee unveiled additional comprehensive plans for balanced growth encompassing local governance, livelihoods and the agriculture and fisheries sectors.

The proposal envisions a substantial devolution of central authority to local governments, along with an adjustment of the national-to-local tax ratio to 70-to-30 to enhance regional fiscal resources.

As of 2023, the ratio of national to local tax revenue in Korea stood at about 75 to 25, according to data from Statistics Korea. That ratio, according to a Korea Institute of Local Finance report released that year, was lower than in nations such as Canada, where local taxes accounted for 55.1 percent of total taxes, Germany, which stood at 53.7 percent and the United States at 46.5 percent.

The presidential committee also seeks to strengthen grassroots democracy by fully rolling out self-governing councils for residents and piloting a system in which township and neighborhood leaders are directly chosen by residents.

As part of measures to protect small and medium-sized enterprises (SMEs) and foster a fair business environment, the committee is proposing a Korean-style discovery system, stronger penalties for technology theft and a dedicated support framework to reduce the burdens of litigation on SMEs.

The plans further seek to enhance consumer protection by expanding the use of class action lawsuits, improving dispute resolution mechanisms, safeguarding rights in everyday sectors and increasing financial institutions’ responsibility for preventing repeated financial crimes.

In addition, the government will promote agriculture and fisheries as key national industries by boosting exports of food products, enhancing food security measures and implementing a basic income program for rural farming and fishing populations.

Including these pledges, the committee laid out 123 policy tasks under the five main goals, highlighting the Lee government’s commitment to enhancing the lives of all citizens.

The committee explained that a fiscal investment plan has been prepared to allocate an additional 210 trillion won ($152 billion) over five years from 2026 to 2030 to support the implementation of these tasks.

These plans will be finalized after undergoing the government’s final review and receiving approval from the Cabinet.