Local extinction fund to distribute W50b based on performance evaluations for first time

Ministry of Interior and Safety to assess provincial investment plans to strengthen capacity to address local extinction

Evaluation-based allocation of 50 billion won aims to encourage tailored regional projects

The central building of Government Complex Sejong [Ministry of Interior and Safety]

South Korea will for the first time allocate part of its local extinction response fund based on performance evaluations, with 50 billion won ($37.3 million) of the provincial support account to be distributed on a differentiated basis according to each province's investment plan assessment.

The Ministry of Interior and Safety announced Sunday that it is introducing a performance-based allocation method for the provincial support account, which had previously been distributed automatically using a formula based on population and fiscal conditions.

The local extinction response fund is a financial resource established to support locally led efforts to address population decline, providing 1 trillion won annually from 2022 through 2031. It is divided into a basic support account of 750 billion won distributed to population-declining areas and a provincial support account of 250 billion won allocated to all provinces and metropolitan cities except Seoul and Sejong.

The provincial support account has been used for formula-based allocation of 150 billion won, evaluation-based allocation of 50 billion won, and the creation of a regional revitalization investment fund worth 50 billion won.

The evaluation focused on the role of provincial governments in leading the identification and planning of projects from a region-wide perspective, and on their ability to generate outcomes through coordination and cooperation among cities and counties.

Assessors examined four criteria: the substantive planning and coordination role of each province, the necessity and effectiveness of pursuing projects at the provincial level, the identification of projects suited to local conditions and residents' needs, and the feasibility of implementation.

Gangwon Province and South Chungcheong Province were named top performers and will each receive 6.6 billion won. Busan, Daegu, North Chungcheong Province, North Jeolla Province, South Gyeongsang Province and Jeju each earned an "excellent" rating and will receive 3.4 billion won apiece. Gwangju, Daejeon, Ulsan, Gyeonggi Province and North Gyeongsang Province will each receive 2.6 billion won, while Incheon and South Jeolla Province will each receive 1.7 billion won.

The ministry said it plans to use the introduction of the evaluation system as an opportunity to ensure the provincial support account serves as a resource for tackling challenges that individual local governments cannot address on their own, and for promoting inter-regional cooperation.

Minister of Interior and Safety Yun Ho-jung said the evaluation system was designed to encourage provinces to plan projects with the entire region in mind and to drive cooperation among cities and counties to improve outcomes in addressing local extinction. "We will continue to expand inter-regional cooperation based on local characteristics and residents' needs, and manage the local extinction response fund more effectively so that it leads to tangible change and renewed vitality that residents can feel," he said.

thlee@heraldcorp.com