[Editorial] Developing New Cities Contradicts Moving Capital

President-elect Roh Moo-hyun has pledged to move the capital to Daejun. Nonetheless, Kim Dae Jung administration has decided to build up 2-3 new cities within the Seoul metropolitan area. These plans contradict each other. The incoming administration intends to move the capital of this country to Daejun to rein in the burgeoning of the metropolitan area and to develop the country in a balanced way. Under these circumstances, the outgoing Kim administration is pledging to push ahead with its plan. Hard to understand the intention of the Kim administration.

Once the capital moving project gets started in earnest, the demand for new houses in the current capital will be severely cut down. Thus, development of new satellite cities shall be considered in association with the project. If it follows that development of those cities is not necessary, the government has to pour the resources earmarked for the development into the "new capital" project.

The main purpose for developing new satellite cities lies in stabilization of the real estate market by providing a massive volume of houses. The development, however, creates lots of jobs and induces heavy investment in various fields of society such as construction, education and services. Consequently, it accelerates the increase of population in the metropolitan area. With more people moving in, the government has to build more houses and roads, attracting plants seeking a rich pool of labor workers equipped with a good infrastructure, and, eventually sparking a chain reaction.

The policy to develop new satellite cities was announced last September to rein in the skyrocketing land price. With steam fizzling out of the real estate market, Seoul and its satellite cities are facing a specter of a long-term recession. It may be a good idea to regulate the real estate market. But, if the bubble bursts all of sudden, numerous individuals will have to file bankruptcy, eventually piling up uncollectible debts for banks.

The Kim administration seems to think that, just by building up new cities around Seoul, it could disperse out the residents in the Kangnam (or Southern part of Seoul) area to those cities. Simply, too idealistic. If new cities are to be built up as planned, the government has to pour astronomical amount of money in building more highways to relieve the beltway highways already suffering from congestion.

For these reasons, the development plan of Kim Dae Jung administration should be nullified, or at least modified in accordance with the "capital-moving" project of the incoming Roh administration.