A visible rift has emerged between Busan Mayor Jeon Jae-soo and Park Hong-bae, chair of the Democratic Party of Korea's Busan chapter, over whether to pursue the relocation of Korea Development Bank to the city.
Jeon included KDB on the list of institutions targeted for relocation at a second public-institution relocation task force meeting he chaired recently, and city officials confirmed the bank holds top priority in documents submitted to the central government. Park, who sponsored legislation to establish a new southeastern regional investment bank, has openly questioned whether moving KDB to Busan would deliver any real benefit — sending conflicting signals from within the same party.
Park introduced the bill to establish and operate a southeastern regional policy finance corporation on July 3. The legislation calls for creating a policy finance institution tailored to the leading industries of the Busan-Ulsan-South Gyeongsang Province region, redirecting policy finance resources concentrated in the Greater Seoul area. The proposed capitalization stands at 5 trillion won ($3.5 billion), larger than the 3 trillion won each proposed in rival bills introduced by lawmakers Min Byeong-deok and Kim Jeong-ho. The three bills are set to be reviewed together by the National Assembly's Political Affairs Committee during the regular session in September, with key sticking points including the capitalization level and the ratio of local government contributions. Park, a proportional-representation lawmaker, sits on the Political Affairs Committee in the second half of the 22nd National Assembly.
Park has said KDB's investment in the Busan-Ulsan-South Gyeongsang area came to only 33.7 billion won in 2024 and 22.5 billion won in 2025, arguing the bank's relocation "would not be of great help to the regional economy or industry." He went further, saying that because 70 percent of the customers of KDB, the Export-Import Bank of Korea and Industrial Bank of Korea are concentrated in Seoul and the metropolitan area, their core functions would inevitably remain in the capital region even after a move. He predicted all three policy finance institutions would be dropped from the second round of public-institution relocations entirely. When he announced his candidacy for the Busan chapter chairmanship on July 22, he said what Busan needs is not the roughly 30 billion won in annual investment KDB currently provides, but a southeastern regional investment corporation capable of deploying 40 to 50 trillion won.
Mayor Jeon, by contrast, put KDB and other state-owned financial institutions back on the relocation target list at the Monday task force meeting, and said in an interview the same day: "Whether it's KDB, Industrial Bank of Korea, the Export-Import Bank, or NongHyup — if it's possible, we need to bring in at least one more."
A Busan city official said Tuesday that the southeastern investment corporation is a matter of "establishment," not "relocation," and therefore falls outside the public-institution relocation discussions. "Pursuing the southeastern investment corporation does not mean we are giving up on attracting KDB," the official said.
The official also confirmed that KDB had held the top priority when the previous administration under Mayor Park Heong-joon submitted its relocation proposal in February, and that the bank remains the top priority on the revised relocation list drawn up in July after Jeon took office. The contrast is stark: the Busan chapter chair has publicly declared KDB will be dropped from the second relocation round, while the mayor continues to list the same institution as his top target.
Jeon offered a warm assessment of Park's election as Busan chapter chair in the Monday interview, saying the difference between having 18 Democratic Party lawmakers from Busan versus 17 "is like night and day" and that Park "will be a great pillar of Busan's Democratic Party." He also defended Park's past opposition to the KDB relocation, saying it "will actually inspire trust, as it shows he is someone who was faithful to his own role."
With the mayor and the Busan chapter chair of the same party now holding divergent positions on the KDB relocation, reconciling their differences over a regional policy finance strategy is expected to face a real test before the government announces its second relocation road map in September.
kaf2002@heraldcorp.com
