S. Korea to Revamp Local Extinction Fund, Focus on Population Growth

The South Korean government has announced a major overhaul of its ‘Local Extinction Response Fund’ (지방소멸대응기금), a critical initiative designed to support regions grappling with severe population decline. The fund, which allocates approximately 1 trillion won (about US$750 million) annually, will shift its focus from merely constructing facilities to investing in projects that actively attract new residents and deliver tangible improvements in local quality of life.

First introduced to combat the demographic challenges faced by numerous rural and smaller urban areas, the fund addresses the ‘local extinction’ phenomenon – a term referring to the gradual disappearance of communities due to low birth rates and the migration of young people to major metropolitan centers like Seoul. This trend leads to an aging population, dwindling economic activity, and a strain on public services.

Under the revamped system, which is set to be fully implemented by 2027, the evaluation and allocation criteria for the fund will be entirely redesigned. The Ministry of Interior and Safety, which oversees the fund, stated that future investments will prioritize outcomes that residents can directly experience, such as job creation, enhanced social services, improved infrastructure, and cultural programs, all aimed at making these regions more livable and attractive.

This strategic shift underscores the government’s commitment to balanced national development and ensuring the sustainability of all regions across South Korea. By concentrating resources on effective, population-driving initiatives, the goal is to reverse demographic trends and foster vibrant communities nationwide.

Source: 행정안전부 보도자료 — Original Article (Korean)