Promoting Administrative Integration with Daegu City
North Gyeongsang Province once drove the growth of South Korea’s key industries, including the electronics and steelmaking industries. But it lost much of its past glory and has in recent years been seeking to recreate itself as a prosperous region with a powerful industrial base. Early this year, Governor Lee Cheol-woo unveiled a new vision for North Gyeongsang Province: Making it a global mega city that goes beyond Korea to compete in the global arena. For this, he says, the province will pursue administrative integration with Daegu City. When integrated, their population will top 5.2 million, the third largest after Seoul and Gyeonggi Province. The two regions will also jointly promote the construction of a new international airport that will cost tens of trillions of won and change their future. In an interview with BusinessKorea, Lee sketched out these and other projects he is planning to implement to make his province a new thriving growth hub based on future industries. The following are excerpts from the interview. – Ed.
Q: Over the past two years, you have been working hard to bring about change and innovation and lay the foundation for economic growth in North Gyeongsang Province. Would you tell us about the results?
A: We have achieved considerable results based on our pursuit of change and innovation. Above all, we had two special laws enacted for the region – one on state compensation for victims of an earthquake that hit Pohang in November 2017 and the other on the restoration of the important relics in Gyeongju, the capital of the Silla Dynasty (57 BC – 935 AD).
We have also secured a platform for fostering new industries that will lead the Fourth Industrial Revolution. For instance, we have persuaded the central government to designate Pohang as a special regulation-free zone for development of battery recycling technologies and a special R&D zone for small and medium-sized companies. We have also succeeded in making Gyeongju the venue for the proposed state-run research institute on small modular reactors.
The central government will also provide one trillion won to create an ICT convergence industrial complex by connecting the Gumi Industrial Complex and small industrial complexes in neighboring cities. The Gumi Industrial Complex will also be upgraded into a smart industrial complex.
Among other things, we have got the ball rolling for the construction of a new international airport to be used by the citizens of Daegu and North Gyeongsang Province. We have also initiated the process of administratively integrating Daegu and North Gyeongsang Province, which will change the future of the two regions. Our vision is to create a global mega city that can go beyond Korea to compete in the global arena.
Q: Would you tell us about North Gyeongsang Province’s recent responses to the COVID-19 crisis?
A: We have experienced an unprecedented terrible disaster caused by COVID-19. Since the first confirmed case occurred in our region on Feb. 19, dozens of people tested positive every day, prompting many people in the region to come forward and make desperate efforts to contain the virus. There was a day when as many as 122 confirmed cases occurred, causing us to panic.
In the end, we had no choice but to stick to the principles and make swift responses. We took the initiative in helping the nation overcome the crisis by running the 3T system of test (diagnostic tests), trace (epidemiologic surveys) and treatment. Our initiatives included securing a large number of beds, operating everyday treatment centers, implementing cohort isolation and developing North Gyeongsang-style face masks.
Recently, the disease has been brought under control in North Gyeongsang Province as indicated by the growing number of days with no confirmed case at all or one or two cases a day.
Q: What efforts have you been making to stabilize the local economy and help small and medium-sized enterprises and small business owners cope with the devastating impact of the crisis?
A: North Gyeongsang Province has taken one of its hardest economic hits. The most urgent task is to precisely analyze the tangible and intangible damage done to the region and help it overcome the impact early. To that end, the provincial government is providing liquidity support of one trillion won each to small business owners and small and medium-sized enterprises. We are also doing our best to keep the most vulnerable people employed and provide incentives for companies not to lay off workers.
Consumer confidence is more important than anything else. We sought to boost the weakened consumer sentiment by providing emergency disaster relief funds for the bottom 85 percent of the households and stimulate the local economy by launching construction projects ahead of schedule.
At the same time, we will upgrade the regional industrial structure by promoting the industries that will lead the Fourth Industrial Revolution, including the vaccine industry, new drug development projects and the electric vehicle battery industry. In addition, we are planning to concentrate our efforts on launching large-scale projects that will determine the future of the region, including the relocation of the integrated new international airport.
Q: North Gyeongsang Province has famous cultural and tourism areas such as Gyeongju and Andong. But they are hit hard by the prolonged social distancing campaign. Would you walk us through the measures the provincial government has taken to promote tourism?
A: Statistics show that the number of tourists to North Gyeongsang Province fell 70.6 percent on year in March and 66.2 percent in April. In particular, reservation rates of hotels and travel agencies plummeted 98.5 percent on year, which means that they were virtually closed.
North Gyeongsang Province is home to 20 percent of Korea's cultural assets and five of the nation’s 14 world heritages. It also boasts green forests of the Baekdudaegan Mountain Range, fresh water of the Nakdong River and the clean East Sea. The provincial government is pushing for special measures for post-corona tourism that utilize the region’s rich natural resources.
North Gyeongsang Province is not only the best place for healing but a very safe place for travelers. The province comes in first in Korea in terms of the number of novel coronavirus tests and the first region to bring the infections under control. In addition, it is striving to establish a safe and healthy food culture through strengthened quarantine and a campaign to enjoy food safely. We have launched the Gyeongbuk Tourism Grand Sale, opening public facilities to tourists free of charge and offering discounts on accommodations. The provincial government is the first in Korea to provide special vacation allowances to company workers from other parts of the nation who come to North Gyeongsang Province to spend their holidays.
Q: Two years ago, you made a pledge to attract 20 trillion won in investment during your four-year term. How is the progress at the moment?
A: Despite difficult domestic and international conditions, North Gyeongsang Province has so far attracted about 11.87 trillion won worth of investment, including 9.14 trillion won in 138 cases from domestic companies such as GS E&C (100 billion won), SK Bioscience (100 billion won), Bearing Art (300 billion won), and POSCO Chemical (250 billion won), and 466.5 billion won in 14 cases from overseas companies, including Hyundai Mobis and ARC (100 billion won) and CoorsTek (47.3 billion won).
Q: The recent COVID019 crisis has led to a collapse of the supply chains of Korean companies operating in overseas countries, creating the need for the relocation of their business sites. What is your strategy for attracting these companies?
A: North Gyeongsang Province plans to actively attract these companies by using three reshoring strategies.
First of all, we are planning to give priority to them when choosing tenants for plant sites in industrial complexes and national and public land plots, raise the limits of the central government’s subsidies for companies investing in local areas, and increase the ratio of the provincial government’s support for smart factories.
Moreover, the provincial government plans to set up a “Gyeongbuk-type employment support system” by providing incentives, including tax benefits and plant site support, to investors, helping investors secure outstanding human resources, creating a business-friendly environment, and providing management support packages. By doing so, the provincial government will create jobs and attract investment at the same time.
Q: In response to the central government’s push for a Korean version of New Deal, North Gyeongsang Province announced Gyeongbuk-style Smart New Deal. Would you please tell us more about it?
A: Our strategy is to promote Digital New Deal tailored to the region. We will focus on projects related to artificial intelligence, 5G untact healthcare and smart living care. At the same time, we will push for the establishment of a regulation-free zone for the hemp-based biotech industry, a special R&D zone for small and medium-sized companies, a special industrial complex for venture companies, and a smart industrial complex. Through these efforts, we will upgrade the industrial landscape of North Gyeongsang Province.
We will also lead the central government’s Green New Deal initiative by fostering the secondary battery industry, energy-harvesting technologies and the hydrogen fuel cell industry. On top of that, we will grow the nuclear energy industry through the establishment of a new research institute specializing in small modular reactors and the Heavy Water Reactor Decommissioning Technology Institute.
Q: What are the key projects you will focus on in the second half of your term?
A: Above all, I will focus on the relocation of the integrated new international airport and the administrative integration of Daegu and North Gyeongsang Province. These two projects should make the two regions prosperous again. The envisioned new airport is a mammoth-sized project that will cost tens of trillions of won. It is also the biggest and most important New Deal project that will open a new air way for Daegu and North Gyeongsang Province and rebuild Korea in the post-coronavirus era.
We will also speed up administrative integration between Daegu and North Gyeongsang Province. When integrated, their population will add up to 5.21 million, making them the third largest local government in Korea after Seoul and Gyeonggi Province. Then we can compete with the Seoul metropolitan area at home and with the world abroad. In the future, we will concentrate our efforts on developing an integration framework. We will collect opinions from experts and people from all walks of life through debates and public hearings.