On October 6, Gyeongnam Governor Park Wan-soo outlined the direction of the 9th elected administration during a press conference at the Gyeongnam Provincial Office, emphasizing the need to optimize welfare spending amid increasing local financial burdens. He highlighted the importance of accelerating the transition to artificial intelligence (AI) in manufacturing and physical applications, while also integrating AI into disaster response for climate-related emergencies such as wildfires and heavy rainfall. Additionally, he expressed plans to continue discussions on the consolidation of administrative functions in the Busan-Ulsan-Gyeongnam region and the establishment of a unified headquarters for five power companies in Jinju.
The press conference followed the announcement of innovative measures for the 9th elected administration and included a Q&A session with reporters, attended by the Deputy Governor for Administrative Innovation and Growth, the Policy Planning Director, and heads of various departments.
Governor Park identified local financial constraints as one of the biggest challenges in implementing policies during his term. He noted that while the central government is increasing projects that require local matching funds, local governments have limited means to increase their own revenues. He has consistently called for a greater share of national taxes, such as corporate tax, value-added tax, and local consumption tax, but pointed out that institutional changes have been insufficient.
He explained that local revenues are heavily reliant on real estate-related taxes, making them vulnerable to fluctuations in the real estate market. Using the example of the rural basic income program currently implemented in Namhae County, he indicated that if this program were expanded to ten counties in the province with a 50% local funding share, the total burden on the province and municipalities could reach approximately 400 billion won.
Park stated that Gyeongnam has around 900 billion won in discretionary funds, expressing concern that expanding local matching projects could significantly reduce the resources available for self-initiated projects.
Regarding welfare policies, he emphasized the need to first assess the efficiency of existing programs rather than expanding new expenditures. He acknowledged that there are inefficiencies and duplications in welfare budgets, stating, "There are many welfare projects we have promised, and I cannot help but worry that we may not be able to fulfill them all 100%." He called for a reassessment of priorities in welfare spending and restructuring of lower-priority items in the operational budget.
Park maintained a cautious stance on issuing local bonds, stating that any bonds would be issued within the limits of debt repaid during the 8th elected administration, without increasing the overall debt compared to the start of that term.
According to Gyeongnam Province, the debt at the end of 2022, when the 8th elected administration began, was 1.27 trillion won, with a debt ratio of around 9%. By the end of this year, including the issuance of local bonds, the debt is expected to be about 1.1 trillion won, with a debt ratio of 7.1%.
Despite financial pressures, the transition to AI in manufacturing will be a key industrial policy for the 9th elected administration. Park referenced his recent visit to China's robotics industry, emphasizing the rapid development of humanoid robots and related components. He noted that while Gyeongnam and the domestic manufacturing sector have competitive advantages in machinery, parts, and materials, a more proactive approach is needed in developing finished products that combine AI and robotics, as well as in talent cultivation.
He announced plans to position Gyeongnam as a hub for physical AI manufacturing. The province explained that while existing smart factories automate production processes through data collection, the next step is to transition to a stage where AI can make independent decisions and perform tasks autonomously.
The province is linking the national industrial complex's AI transition with physical AI projects, aiming to develop foundational models in the manufacturing sector. The related physical AI initiatives are projected to cost around 670 billion won, with approximately 70 billion won allocated from the national budget this year. The goal is to develop an independent foundational model for the manufacturing sector by 2030.
Workforce development will also be prioritized, with Gyeongnam planning to provide training for about 3,000 individuals annually, from current employees to high-level talent. The province is also working on establishing a manufacturing AI data center and dedicated communication infrastructure for industrial complexes.
The specialized aerospace engine complex in the Changwon National Industrial Complex will be another major industrial policy focus. Gyeongnam plans to leverage private investments from companies like Hanwha Aerospace and government support to advance the project by 2035. The province aims to increase the domestic production rate of aerospace engines, currently at 20-30%, to 90%. Approximately 40 companies are expected to participate in the specialized complex project.
The application of AI will also extend to disaster response. In response to a question about using AI to predict wildfire spread and its application in Gyeongnam, Park stated, "I believe that large-scale disasters, whether wildfires, heavy rainfall, or typhoons, will become more frequent due to climate change," emphasizing the importance of AI-integrated disaster response systems and prediction programs.
He added, "We will study foreign cases to develop our own disaster response programs and measures in Gyeongnam," indicating a willingness to explore a Gyeongnam-specific disaster response system through collaboration with specialized institutions.
Currently, AI technology development and testing are underway in the wildfire sector. A provincial official explained that a system is in place to verify wildfire occurrences in real-time when smoke is detected, and once the technology development is completed, the Forest Service and provincial forestry department will collaborate to expand its field application.
AI is also being applied to flood response. Gyeongnam has established a system to assess flood and inundation risks by applying AI to over 550 CCTV cameras monitoring river levels, securing an additional 3 billion won from the national budget to enhance this system.
A provincial official noted that sufficient data accumulation is necessary for AI to assess risk situations, stating that the system is currently being refined through trial and error. A crisis management system is also being prepared to integrate and monitor disaster systems operating in various sectors, including firefighting, natural disasters, and wildfires.
Regarding the government's discussions on relocating public institutions and restructuring power companies, Gyeongnam will continue to push for the establishment of a unified headquarters for the five power companies in Jinju. Park highlighted that the headquarters of Korea South-East Power is located in Jinju, along with energy-related companies and institutions such as the Korea Electric Power Research Institute and Doosan Enerbility, as strengths in this endeavor.
Gyeongnam views South Chungcheong Province as a major competitor, noting that while South Chungcheong has a concentration of thermal power plants, Gyeongnam has a solid industrial base with energy companies and institutions, including the headquarters of Korea South-East Power.
Utilizing the existing headquarters and surrounding office spaces could also reduce additional costs, which is part of the rationale for attracting the headquarters. Gyeongnam plans to collaborate with local political circles and seek support from Busan and Ulsan for the headquarters' relocation.
On the topic of administrative integration in the Busan-Ulsan-Gyeongnam region, Park reiterated the province's unchanged position, stating, "Our stance on administrative integration remains the same," and that discussions on the necessity of integration with Busan and Ulsan will continue. However, he noted that recent discussions with local leaders indicated that both regions are currently more interested in special local government entities than in administrative integration.
Park expressed that even without forming a special local government entity, collaborative efforts through economic alliances or inter-municipal partnerships could be pursued. He stated, "If the mayors of Busan and Ulsan agree to integrate, I would like to proceed with the schedule immediately," but cautioned that unilateral claims for integration by one region could lead to conflicts, emphasizing the need for ongoing discussions.
On this day, Gyeongnam presented three major innovation measures for the 9th elected administration: innovation in governance, organizational culture, and public institutions. The province plans to expand citizen participation and field communication, improve the public institution evaluation system, and incorporate the AI transition of public services into management evaluation indicators.
* This article has been translated by AI.
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