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| An artist's impression of Jeonju Financial Center / Korea Times file |
By Kim Bo-eun
Korea has often been criticized for a populist approach to policies in key industries. Previous administrations claimed the relocation of state-run institutions, once concentrated in Seoul, to across the country was a means to drive the growth of provincial areas.
But this has led to questionable outcomes such as having the state pension fund moving to Jeonju, 240 kilometers south of Seoul, which has little related infrastructure. This in turn has resulted in a brain drain at the world's third-largest pension fund.
Following the National Pension Service's (NPS) relocation in February 2017, then-presidential candidate Moon Jae-in pledged to designate Jeonju as Korea's third financial center after Seoul and Busan. But government feasibility studies conducted in 2019 after Moon's election concluded the city lacked the infrastructure needed for the plan.
The plan appeared to have derailed, but discussions have re-emerged ahead of the presidential election in March.
Presidential candidates of the ruling and opposition parties, however, have refrained from clarifying their stance on the plan, given they need the votes from regional voters, but view the Jeonju financial center plan as being unrealistic.
The ruling Democratic Party of Korea's candidate Lee Jae-myung said last month, "It is difficult to understand why the NPS relocated to Jeonju."
The main opposition People Power Party's Yoon Suk-yeul, in the meantime, said studies would take place "for Jeonju to become a center for investments that can contribute to the economy of North Jeolla Province."
Regional authorities have sought to bring key state-run institutions such as the Korea Investment Corporation, the Export-Import Bank of Korea and Korea Development Bank (KDB) to Jeonju.
But the greatest barrier is a lack of interest from financial firms in setting up operations there, due to the lack of accessibility and infrastructure. Foreign companies' presence is regarded as being essential for a global financial center, but the regional government has found it difficult to attract even local firms.
Other views are that it doesn't help to disperse financial centers across the country, when Korea's cities lag in competitiveness as financial hubs. Seoul ranked 16th in the Global Financial Centers Index published by the London-based think tank Z/Yen last year. Busan ranked 36th.
The government in 2009 designated Busan as the second financial center and relocated a number of state-run financial institutions, including the Korea Exchange, to the southern port city.
But Busan has struggled to attain competitiveness as a global financial city, and has opted for a focus on maritime finance.
