Investment in the Local Extinction Response Fund

The government will provide KRW 1 trillion (750 billion this year) in local extinction response funds every year for 10 years from this year to allocate funds to 25% of metropolitan governments and 75% of basic local governments. The Ministry of Public Administration and Security announced on the 8th that it will establish and announce standards on the allocation of local extinction response funds for the full-fledged operation of local extinction response funds introduced to actively respond to local extinction crises caused by population decline. Prior to this, the Ministry of the Interior and Safety designated 89 regions as areas of population decline last year as the problem of local population decline became serious, and introduced local extinction response funds by revising the Framework Act on Fund Management and Enforcement Decree.

 

This local extinction response fund will be established in a union composed of 17 cities and provinces, and the union entrusts the affairs necessary for the operation and management of the local extinction response fund to the Korea Local Finance Mutual Aid Association. Since January, the Ministry of the Interior and Safety and the Korea Local Finance Association have been establishing an office organization, enacting and revising union regulations necessary for fund management, and forming a local extinctive response fund review committee to deliberate on major matters such as fund management plans. In addition, a distribution plan has been established so that the local extinction response fund can be used for projects suitable for the purpose of responding to local extinction as well as autonomous resources of local governments.

 

Since local extinction response funds are limited resources, 95% of basic support accounts are provided to 89 population-reducing areas for efficient use, and 90% of regional support accounts are distributed intensively to cities and provinces in charge of population-reducing areas. However, considering that some local governments that are not designated as areas with a decrease in population also need preventive management through preemptive responses to population decline, 5% of basic support accounts will support 18 additional areas. In addition, 10% of the metropolitan support accounts will be supported differently depending on the population and financial conditions, but some cities and provinces, such as Seoul and Sejong Special Self-Governing City, will be excluded from distribution.

 

When 107 local governments first analyze regional conditions and submit their investment plans to the Fund Deliberation Committee, the final distribution amount is determined at the union meeting after evaluation and consultation with the Fund Deliberation Committee. The evaluation of the investment plan is based on regional local response goals, feasibility, efficiency, feasibility of the project, linkage between projects, and appropriateness of the implementation system. Specific matters such as the composition of the evaluation team and the establishment of an evaluation plan will be decided by the association in the future and guided to the local government.

 

The regional support account is distributed in consideration of the designated ratio of the population reduction area and the average value of the population reduction index, and the final distribution amount is determined at the union meeting after consultation and advice from the Fund Deliberation Committee. Meanwhile, the project to promote local extinction response funds is not top-down support determined by the central government level, but a bottom-up support policy led by local strategies and investment plans. Therefore, regions need to establish creative and differentiated plans by themselves by closely analyzing the phenomenon of population decline by region and actively utilizing various localized resources.

 

To support this, the Ministry of the Interior and Safety plans to guide the best practices promoted by the region so that it can be used to establish investment plans, and use various fields and local experts to support consulting for condition analysis and investment plans of local governments. In particular, this year is the first year of its introduction, and if local governments simultaneously establish investment plans for this year and next fiscal year's projects and submit them by May, the distribution will be confirmed within August after evaluation, consultation, and advice.

 

Minister of Public Administration and Security Jeon Hae-cheol stressed, "We hope that the local extinction response fund will be invested in creative projects planned by the region, serving as a priming water for the region to respond to population decline and the crisis of local extinction." In the future, we will actively strive to strengthen institutional support by supporting various government subsidies and policies so that the Ministry of Public Administration and Security and other related ministries can comprehensively support them, he said.