KDB relocation emerges as last-minute campaign issue in Seoul, Busan mayoral elections

Seoul Mayor Oh Se-hoon, right, of the ruling People Power Party, and Song Young-gil of the main opposition Democratic Party of Korea, both candidates for Seoul mayor, cast their ballots on the first day of the two days of early voting for the June 1 local elections in Seoul, Friday. Yonhap

Experts say understanding the policy lender's unique roles is crucial for country

By Yi Whan-woo

The rival mayoral candidates for both Seoul and Busan are capitalizing on President Yoon Suk-yeol's plan to relocate the Korea Development Bank's (KDB) headquarters outside the nation's capital in their last-minute campaigns to woo voters in the June 1 local elections.

Yoon wants to move the state-run KDB to Busan in the name of balanced regional development, which collides with Seoul's goal of becoming a global financial hub by enhancing the networks and infrastructure of financial firms already heavily concentrated in the city.

The rival candidates are either for or against the president's plan, not in tandem with the policies of the party they belong to, but rather in tandem with the interests of the city they are from.

Their strategy is odd, considering that candidates usually pursue their respective party's policies.

In Seoul, both Oh Se-hoon of the ruling People Power Party (PPP) and Song Young-gil of the main opposition Democratic Party of Korea (DPK) are pledging to make full-fledged efforts to nurture Seoul as a global financial hub.

The incumbent mayor of Seoul who is looking to serve his fourth non-consecutive term, Oh is not explicitly criticizing the KDB relocation plan. But he implicitly expressed his disapproval of the idea by saying, "I will turn Seoul's financial district of Yeouido into a strategic location that successfully incorporates financial support that is scattered across multiple areas."

Former DPK Chairman and National Assembly representative Song has indeed been openly opposed to Yoon's plan. During a signing ceremony with the Korean Financial Industry Union (KFU) on policy cooperation, Wednesday, he argued that Seoul can "take a leap toward a global financial hub only if the KDB stays in the city."

Headquartered in Seoul, the KFU is an umbrella group of unionists of financial firms nationwide. It has been strongly denouncing the relocation plan and has been calling on Mayor Oh to take action to prevent it from happening.

Song also said, "I as the next mayor will show up at a Cabinet meeting of the Yoon administration and strongly express my concerns over moving the KDB out of Seoul."

Busan Mayor Park Heong-joon, right, and his wife, cast their ballots on the first day of the two-day period of early voting for the June 1 local elections in Busan, Friday. Yonhap

Busan mayoral candidate Byun Seong-wan, right, of the main opposition Democratic Party of Korea, and his wife, cast their ballots on the first day of the two-day period of early voting for the June 1 local elections in Busan, Friday. Yonhap

In Busan, PPP candidate and incumbent Mayor Park Heong-joon is going the extra mile to materialize Yoon's plan by pledging to host not only the headquarters of the KDB but also that of the Export-Import Bank of Korea (Eximbank), another sate-run lender from Seoul.

The DPK contender for Busan mayor, former Acting Mayor Byun Seong-wan, is even more enthusiastic than Park over the possible KDB relocation plan. He has promised to relocate the KDB and Eximbank, plus National Federation of Fisheries Cooperatives, to Busan, as the country's largest port city.

A government-affiliated financial institution, the federation is tasked with lending and providing other financial support for the fishing industry.

Experts contacted by The Korea Times, Friday, said that the conflicting campaign strategy clearly reflects a dilemma that Korea faces in its goal of using finance to become a global industrial leader on the one hand and to bolster regional economies domestically on the other hand.

They said that a more thorough understanding is needed of the role of the KDB in policy lending, state-led corporate structuring and M&As, as well as other areas, to make a decision on the future of the KDB and its location, in relation to national interests.

"There's no right or wrong concerning the candidates' pledges on the KDB relocation plan. Each side has a justifiable argument and a nationwide discussion will be needed after the local elections to come to a consensus," said Kwon Oh-in, the economic policy director at the Citizens' Coalition for Economic Justice, a civic activist group.

Speaking on the condition of anonymity, a senior KFU member said that the union is against the relocation plan because it believes staying in Seoul "helps the KDB the most, serving its purpose."

"For example, most of the foreign capital is centered in Seoul, and you can't communicate with foreign investors interested in KDB-led M&As efficiently if you are in distant area from Seoul," he said.

Asked to provide any ideas for supporting the financial industry in Busan without relocating the KDB, he suggested bolstering the roles of regional firms such as Busan Bank.

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