Keynote Speech of Autonomous Decentralization and Local Finance Expansion Seminar
Date April 20th, 2015 | Venue National Assembly Library
It is a great pleasure to be here today. I am the mayor of Seoul, Park Won-soon.
Celebrating the 20th anniversary of local autonomy by election, I think it is highly significant that we have this opportunity to share opinions on strategies for autonomous decentralization and local finance expansion. I would like to extend my sincere gratitude to the president of the Seoul Institute Mr. Kim Soo-hyun, the president of the Korean Local Government Law Association Mr. Kim Dong-geon, the president of the Korean Association of Local Finance Mr. Lee-sam and everyone concerned for your great efforts in preparing this significant event. I would also like to thank the scholars and experts who will conduct presentations and discussions in the seminar. I believe that your farsighted perspective will serve as a great support for the growth and development of local autonomy.
Era of Cities – Era of Regions
On April 8th, Seoul hosted an international event for 5 days seen around the world: the International Council for Local Environmental Initiatives (ICLEI). It was the largest in the history of the Council, with delegations of over 2,000 people from 1,200 cities of 87 countries all around the world. I was elected as the president of ICLEI and chaired the Seoul conference. The climax of the event was the adoption and announcement of the Seoul Declaration, which contains nine tasks to reduce greenhouse gas and prevent global warming. It was a great achievement of governance between metropolitan cities across borders, who together determined to lead in the creation of a sustainable future of the Earth as world cities and local governments.
The world is moving towards an era of cities, an era of regions. It is an era of practical communication, exchange, and cooperation between cities, regions, and people across borders between countries. The world’s greatest scholars are emphasizing the importance of cities and local governments, a trend seen around the world. The distinguished sociologist Benjamin Barber left a famous saying, “Presidents say principles, but mayors pick up trash.” In his book “If Mayors Ruled the World: Dysfunctional Nations, Rising Cities,” he argues that in this time when urban problems are becoming world problems, cities and local governments should take the lead in solving urban problems. The futurologist Alvin Toffler also argued that decentralization is the answer, emphasizing that decentralization is the political order of the future.
In this era of globalization and urbanization, genuine decentralization serves as a pivot on which major cities in the world can address various urban problems. For example, Japan’s national law used to strictly restrict autonomous organizations, but since 2003, the modified local autonomy law has given the right of legislating ordinances and autonomous organization to cities. As a result, organizations can operate in autonomy in accordance with regional characteristics, leading to stronger national competitiveness.
What, then, is the situation in Korea?
“Adult” Local Autonomy –Two Faced with lights and shadows
This year celebrates the 20th anniversary of the opening of local autonomy since the first national local election was revived in 1995. Local autonomy has now reached adulthood. Still, our local autonomy is only at the level of a minor, under the authority of the national government. They say Korea is not a country of local autonomy but instead a country of central autonomy, and they take the cynical view that it is “20% autonomous,” because local governments are in charge of 20% of finance and office work. This is the stark reality of today’s local autonomy.
Most importantly, many cities and local governments are negotiating and carrying through land disbursements, establishing local infrastructure, reducing corporate taxation, and incentivizing the creation of jobs to attract corporations. But what about these local governments? They are helpless governments, unable to effectively promise or guarantee anything because the central government is in charge of all these financial tools.
Of course, in the 20-year history of our local autonomy, we have a lot of significant achievements in which citizens have led the local societies, the administration of services for citizens were enhanced in their quantity and quality, and finally governance was carried out through cooperation with citizens. The Seoul government is also making efforts to further local autonomy by leading the administration of communication, cooperation, and participation with citizens during the fifth and sixth administrations with the attitude that “citizens are the mayor.” We are implementing projects customized for Seoul’s regional characteristics, such as providing environment-friendly free meals in elementary and middle schools; halving the tuition fees of the University of Seoul; the establishment of the Seoul Citizen Welfare Standards, which all Seoul citizens enjoy without any discrimination; the implementation of 102 projects in Seoul Citizen Welfare Standards; the Seoul Basic Security System; the operation of the Patient Relief Hospital; the establishment of 300 national and public day care centers; and the provision of support for baby boomers and Second Life Support Centers in preparation for the ageing society all over Seoul. Only when a local government practically earns its autonomy in this manner is it able to provide citizens with administrative services that correspond to regional circumstances and give citizens the corresponding benefits. Genuine local autonomy is therefore crucial to continue Korea’s growth and development and respond to various administrative demands, and it will directly lead to national competitiveness.
Despite efforts to implement regionally unique policies by Seoul and other local governments, we still have many challenges to overcome to realize genuine local autonomy in Korea. First of all, it is painful that the distribution structure of our national tax and local tax remains the same. Welfare demands such as a basic pension and the reform of the beneficiary system are skyrocketing, but tax revenues of local governments are not enough to fund resources for welfare. Shall we take a look at the case of Seoul? 86% of the social welfare budget and 68% of the gender equality and family budget are for welfare policies to cover national projects (national and municipal expenditures). This limits the welfare policy implementation required for Seoul. In addition, 74% of the social welfare budget is for public assistance and social insurance such as basic security, basic pension, and disability allowance, all functions of the national government. As government subsidies accounts for more and more, the dependency on the government is intensifying. National subsidy programs, of which a certain part of the finance must be supported by Seoul, nearly doubled from 32 trillion won in 2007 to 61 trillion won in 2014. The increase in national subsidy programs has decreased the funds available for Seoul matching grants. That is why welfare functions need to be redistributed to charge universal services at the national minimum level, such as free childcare and basic pension, on the central government based on national resources, and to charge optimal services at the discretion of local governments on local government based on regional resources. The limitations in the current organizational operation keep local government heads from efficiently operating the organizations, creating many drawbacks in preemptively and effectively responding to a variety of administrative demands such as economy, regeneration, safety, welfare, and national projects. Autonomy in organizational operation will be a critical issue to achieving genuine local autonomy.
The great paradigm shift to decentralization of governance is the answer. Local autonomy and decentralization are crucial tasks that our society must push towards. Decentralization is not led by a particular entity. It is a nation-to-region issue, as well as region-to-region cooperation based on citizens’ cares and concerns.
The national government announced the Local Autonomy Development Master Plan, which comprehensively contains major tasks of local autonomy by reflecting and diagnosing the history of 20 years of our local autonomy. Of course, it might not be able to satisfy all the expectations of local governments, related academic circles, and civic organizations. Depending on their point of view, they consider different problems to be urgent. However, it is certainly a positive change that the society now shares the view on addressing common tasks such as expanding independent resources by securing local government finances and expanding rights for autonomous organizations and autonomous legislative rights. To move it beyond being just a plan, we have to show it in action and practice.
Not only for the development of local governments, but also for the continuous development and new growth of the country, and furthermore to secure the national competitiveness in the world, the paradigm of governance must be changed. Our future is in decentralization. The competitiveness of the city and the country depends on genuine local autonomy. New growth depends on coexistence and autonomy.
When citizens are happy, the city is happy. When the cities are happy, the whole country is happy. We should not forget this simple and clear truth. I hope today’s seminar will be the starting point of opening the door towards the way of governance, that of genuine autonomy. I expect that the year of 2015, the 20th anniversary of local autonomy by election, will be a historical turning point to open the door towards an era of local autonomy. Seoul will be with you. Thank you v