The South Korean government has decided to provide up to 5 trillion won annually, totaling up to 20 trillion won over four years, to promote administrative integration among metropolitan local governments. This initiative aims to shift from a capital-centric growth model to regional-led development as a top national agenda. On January 16, Prime Minister Kim Min-seok emphasized that balanced regional development is a survival strategy for a sustainable future, not just a policy consideration. The special integration cities will be granted status equivalent to Seoul, along with priority relocation of public institutions and industrial revitalization measures.
To support these integration cities, the government plans to establish new fiscal grants and reallocate national resources. The special integration cities will gain financial autonomy to plan and execute key local projects. The number of deputy mayors will be increased to four, with their ranks elevated to vice-ministerial level, strengthening the organizational status. Key positions such as Fire Chief and Planning Coordination Director will be operated at the highest level, and personnel management autonomy will be expanded.
During the second phase of public institution relocation in 2027, the government will prioritize the special integration cities, with specific institutions to be determined based on regional preferences and industrial conditions. The transfer of duties from national special local administrative agencies within these cities is also planned. To foster a business-friendly environment, the government will offer employment subsidies, training support, reduced land lease fees, and local tax reductions. Additional support will be provided for investment promotion and cultural industry zones, with enhanced tax incentives for new special districts.
The government expects these policies to create a virtuous cycle of regional economic revitalization, job creation, and strengthened local finances. Prime Minister Kim highlighted that regional-led growth is essential for national development and that integration is key to achieving genuine local autonomy. A government-wide fiscal decentralization task force has been launched, comprising 12 members from both public and private sectors, to discuss ways to improve fiscal conditions for regional-led growth. Chief of Staff Yoon Chang-ryeol stressed the importance of balancing fiscal autonomy and responsibility, aiming to realize advanced resident and community autonomy.
This policy marks a significant shift toward empowering local governments with greater autonomy and resources, moving beyond mere administrative restructuring. The combination of substantial fiscal support, public institution relocation, and industrial incentives is likely to curb population outflow, stimulate local economies, and create quality jobs. Strengthening local fiscal independence and execution capacity is expected to play a pivotal role in alleviating capital region concentration and achieving balanced national development.