During the Japanese Occupation (1910–1945), Mokpo served as a crucial port for both commercial ventures and transportation, owing to its convenient location along the sea routes between the Japanese archipelago and the Chinese mainland. The large number of islands surrounding Mokpo have also served as a protective barrier, making the city less vulnerable to high tides and tsunami. During Japanese occupation, the city had large residential areas, which are now the city's historic districts, to accommodate the Japanese colonists. However, after the end of World War II, and following Korea's independence in 1945, the city slowly lost its position as a host to major government organizations and wartime industries. Mokpo's shortage of secondary industries and thus jobs caused a serious population drain. As a result, it was reduced to a mid-sized city of the Honam region.
Former president Kim Dae-jung earned full support from Mokpo's electorates during the presidential election in 1997, while other political rivals were accused of attempting to underdevelop the city in order to decrease its population. The city has attempted to improve its status in South Jeolla province, in spite of facing economic depression and complaints of many residents in the original downtown section.
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