Gov`t Introduces Initiatives to Perk Up Economy

The Lee Myung-bak administration reportedly plans to lift bans on military protective zones, including Hwacheon and Yanggu counties in Gangwon Province and Paju City in Gyeonggi Province, on which construction in any fashion is strictly prohibited. Once deregulated, it will be easy to build or renovate buildings and structures on the land lots amounting to 109 times the size of Yeouido, which is the Korean “Manhattan,” and about seven times smaller than the island in New York.

In addition, welfare beneficiaries will see their cell phone bills reduced sharply. They will no longer have to pay the monthly subscription charge, and will pay only half of the money charged for airtime. Additionally, an individual who buys a house located outside the Seoul Metropolitan area will pay half of the current 2 percent acquisition and registration taxes, as long as the house will not be sold at the completion of construction.

The deregulation initiatives were announced yesterday by various agencies such as the Ministry of Strategy and Finance, the Korea Communications Commission, the Ministry of Land, Transport and Maritime Affairs, the Financial Services Commission, the Ministry of Education, Science and Technology, and the Small and Medium Business Administration.

First, the Finance Ministry will narrow the boundary of the military protective zones near the DMZ, freeing 220 square kilometers, an area equivalent to 75 times that of Yeouido. To free the land, the ministry will set the zone parameters from the current 15 kilometers from the DMZ to 10 kilometers.

In addition, bans on construction within a 1 kilometer radius of a military base will be relieved to a 500 meter radius. Then, land 34 times larger than Yeouido, or 99 square kilometers, will be deregulated.

The Korea Communications Commission will also dramatically cut the cell phone bills of welfare recipients. As early as October, service providers will not charge subscription fees to the beneficiaries, and will cut in half the airtime charge. Furthermore, people living just above the poverty line will receive 35 percent discounts in subscription fees and airtime charges. The special initiatives will return benefits to 3.7 million people in all. Now, only 73,000 Koreans are eligible.

To facilitate real estate transactions on unsold new houses in localities, the Land Ministry will not levy heavy capital gains taxes for one year on those who buy unsold units in localities in addition to their current houses, as long as they dispose of either of the houses within two years. In the meanwhile, the Financial Services Commission will provide guarantorship to those under 36 who wish to open their own businesses. Thus, an eligible applicant can take out a loan of up to 50 million won under the guarantorship.

The Education Ministry will also lower APRs on student loans by 1 to 3 percentage points for college students, and the Small and Medium Business Administration will set up a center next year to assist individuals wishing to start their own businesses.