The farther from Seoul, the more central government funding: 229 cities, counties and districts to receive tiered support across four regions starting next year

[Financial News] Starting next year, government support will increase for areas farther from Seoul that face a high risk of population decline or have weak economic conditions. The government will divide the country’s 229 cities, counties and districts into four regions and vary central government funding according to local conditions. The central government’s support rate for Local Love Gift Certificates will also rise from the current maximum of 7% to 9%.
The Ministry of the Interior and Safety said the Cabinet approved an amendment to the Enforcement Decree of the Special Act on Local Autonomy, Decentralization, and Balanced Regional Development, which contains these measures, on the 20th.
The Local Priority Index being introduced is a standard for determining the level of government support by assessing factors such as each region’s level of development and risk of population decline. Previously, support rates varied depending on whether an area was in the Seoul metropolitan area, outside it, or designated as a population-decline area. Going forward, local conditions will be taken into account in greater detail.
The index will take into account factors including distance from Seoul, population change rates, the total fertility rate, the aging index, changes in the number of businesses and employees, gross regional domestic product, and fiscal self-reliance. The system will give greater priority to areas farther from Seoul while also considering each region’s economic strength and risk of population decline.
The country’s 229 cities, counties and districts will be divided into four regions, from Region 1, where the need for preferential treatment is lowest, to Region 4, where it is highest. Region 1 has 58 areas; Regions 2 and 3 have 55 each; and Region 4 has 61. The index scores and rankings for individual regions will not be made public to prevent stigmatization and excessive competition between regions. The index will be recalculated every year.
The central government’s support rates for Local Love Gift Certificates, currently 3% for the Seoul metropolitan area, 5% for areas outside it, and 7% for population-decline areas, will change next year to 3% for Region 1, 6% for Region 2, 8% for Region 3, and 9% for Region 4. As a result, local governments in population-decline areas that fall within Region 4 will see their support rate rise by 2 percentage points, from 7% to 9%.
The government plans to use the Local Priority Index not only for Local Love Gift Certificates but also for other policy areas, including finance, taxation, regulation, and procurement. Each ministry will determine which areas qualify for support and the level of preferential treatment for each region, in line with the nature of its programs.
Starting on the 21st, the Ministry of the Interior and Safety will give 12 days’ advance public notice of a draft directive setting out detailed calculation criteria and plans for using the index. After gathering feedback, it plans to finalize the operating criteria and the regional classifications for each city, county and district.
Yun Ho-jung, the minister of the interior and safety, said, “We have established the Local Priority Index for the first time to provide stronger support to local areas and overcome the Seoul-centered, single-pole system.” He added, “I will work to ensure it is used widely across national policies.”


[email protected] Lee Bo-mi Reporter