Move, merge or disappear. Hundreds of South Korean public institutions and their employees still do not know which fate awaits them.
The government on Thursday put roughly 350 public institutions based in the Seoul metropolitan area under review for relocation while separately unveiling a sweeping restructuring plan that would reduce the number of public entities and subsidiaries by 109 through mergers, consolidation and other changes.
Yet which institution will move where — and when — will not be decided until the fourth quarter. Relocation is to begin in 2027.
The government says it wants to minimize the number of institutions allowed to remain in the capital region and move quickly, even using rented buildings rather than waiting for permanent headquarters to be built. What remains missing is an equally clear institution-by-institution standard and, more importantly, the sequence in which restructuring and relocation will take place.
That is not an argument for delaying relocation itself. Moving more public functions and quality jobs out of the overcrowded Seoul metropolitan area is necessary if South Korea is serious about correcting the country's increasingly lopsided economic geography. Nor should the government retreat simply because unions object, or compromise by parceling out a few institutions to every region.
The government's stated goal of clustering institutions with related functions around existing innovation cities and linking them with local industries and universities is also sound. Properly executed, public institutions can serve as anchors for regional business ecosystems rather than isolated government compounds.
The problem is that there is still too little in the "second" relocation to show how the government will avoid the shortcomings of the first.
Linking public institutions with universities and local industries, improving living conditions and building self-sustaining regional hubs are not new promises. They were central ambitions of the first innovation-city program as well.
That first relocation did produce results. Roughly 48,000 public-sector employees moved outside the capital region, innovation-city populations increased and regional hiring expanded.
But the National Assembly Budget Office's latest assessment also shows what went wrong. The projects it examined were delayed by an average of 28.6 months from their original schedules and generated an additional 645.6 billion won ($465 million) in costs. The rate of employees relocating with their families reached only 71 percent, while actual occupancy of industry-academia-research cluster sites stood at just 56.6 percent.
Buildings and employees moved, but families and businesses proved harder to transplant.
For the next round of relocation, the government is adding another layer of complexity by combining relocation with wholesale institutional restructuring.
Merging agencies with overlapping functions before clustering them around industries that fit a region could produce stronger institutions and more credible regional growth centers. But getting the order wrong could make the second relocation more disruptive than the first.
If an institution is assigned to a city only to be merged or abolished soon afterward, headquarters and personnel may have to be reorganized again. A region that celebrates winning an institution could find that much of its function disappears after consolidation. Employees could be required to make life-changing decisions before even knowing what organization they will ultimately work for.
The government has announced both reforms, but it has not sufficiently explained how the two will intersect. It should make clear whether functional restructuring comes first, whether relocation decisions will follow, or how the two processes will be coordinated before regional assignments are made.
The uneven pace among institutions makes transparency still more important.
Decisions on the Financial Services Commission, the Financial Supervisory Service and state-run financial institutions have effectively been pushed into the fourth quarter. The Korean Financial Industry Union is set to stage a general strike Friday, with opposition to unilateral relocation of financial institutions among its key demands alongside a 4.5-day workweek and higher wages.
The union argues that finance depends unusually heavily on concentrations of skilled workers, regulators, companies and market networks and that forcibly moving headquarters could weaken policy-finance functions.
Public-sector employees cannot reject a national relocation policy simply because moving is inconvenient, nor should the intensity of opposition from a particular organization determine how quickly government policy applies to it.
But neither can the government answer legitimate concerns with little more than telling them to go because balanced development is important.
The government must publish consistent criteria explaining why one institution should move and another should stay, how the special requirements of industries such as finance will be assessed, and how restructuring decisions will affect relocation. Otherwise, institutions with the strongest unions or political connections will inevitably appear to have more influence over the timetable.
While the government spends the next several months studying the issue, regional governments will launch increasingly aggressive campaigns to attract institutions and agencies in Seoul will assemble arguments for remaining there.
Employees and their families face a more personal calculation. They must make decisions about homes, children's schools, spouses' jobs and care for elderly parents without knowing whether their workplace will move, merge with another institution or cease to exist in its current form.
The government has presented principles for the second relocation. What it has not yet presented are convincing remedies for the failures exposed by the first.
Speed matters. So does determination. But speed without sequence risks creating precisely the delays, additional costs and resentment the government says it wants to avoid.
If the fourth quarter produces little more than a table matching institutions with cities, the second relocation will amount to a larger and faster version of the first.
Balanced development cannot be measured simply by how many headquarters leave Seoul. It will be judged by whether families stay, businesses follow, skilled workers remain and regional economies are stronger years after the moving trucks have gone.
Before ordering hundreds of institutions onto the road, the government should show where it is taking them — and what it intends to build when they arrive.
Copyright ⓒ Aju Press All rights reserved.
