Avoid Concentration in Metropolitan Areas By Growing Local Economies

The blueprint for incoming government’s metropolitan area reorganization was outlined at a joint work briefing with the presidential transition team.

On Jan.21, officials at the government and the transition team reported the president-elect at the joint briefing that they will change the focus of the metropolitan area reorganization plan from curbing population concentration in the metropolitan areas to systematic management.

The core of the plan is to minimize the causing factors in population concentration in the metropolitan areas by relocating the administrative capital and promoting local economies and at the same time, by easing regulations on metropolitan areas. The new scheme for reorganization of metropolitan areas can be interpreted as an attempt to harmonize its conflicting goals that are to strengthen national competitiveness by developing metropolitan areas and to achieve balanced regional development by improving local economies. However, many experts pointed that it remains to be seen whether the incoming government will implement the new scheme with conflicting goals.

The incoming government will prevent the concentration in the capital areas by improving local economies. The president-elect’s election promise to relocate the nation’s administrative capital to the central Chungcheong Province highlights most his strong intention to curb on the concentration in the metropolitan areas. He appeared on Jan. 18 in the first TV forum since the end of the Dec.19 presidential election and stressed it is difficult to expect a new and bright future for the metropolitan areas without relocation of the capital.

Starting from Jan.21, the president-elect will receive reports from government ministries on the 10 policy goals in the incoming government for 10 days. Among the 10 day’s briefing period, he will make a five day tour to local governments to receive reports on decentralization, improvement of local economies, and localization. In addition, it has been known that the incoming government will enact an act concerning decentralization and install a special committee for balanced regional development.

The incoming government is considering the extension of the subject areas of the free trade economic zones which were designated by an act last year. The limited areas include Incheon, Pusan and Kwangyang in a bid to curb the capital concentration.

The incoming government places much emphasis on the competitiveness of the metropolitan areas to turn the nation into an economic center in the Northeast Asian region. As the presidential transition team changed its focus from curbing on the concentration in the capital areas to systematic management of the areas, it is drawing attention that it decided to ease the total permitted number of factory constructions.

Under the capital planning law, the system permitting only limited numbers of factory constructions a year is serving as a major instrument in curbing the capital concentration.

While the incoming government will increase the total permitted areas of factory constructions, it is planning to exclude the so-called “6T industries” such as information technology (IT) and biotechnology (BT) from the category.

Domestic industries have expressed their concerns over the limited factory construction permissions, citing that it will cause a hollowing in the manufacturing sector by limiting the number of factory constructions in the capital areas where is increasing demand in factories, thereby leading to factory relocations to overseas. The Korean business community is showing keen interest in the incoming government plan to ease the limitation on factory constructions.

Furthermore, the Ministry of Commerce, Industry, and Energy is planning to put an additional touch on a law designed to promote industrial concentration and factory constructions in order to strengthen high-technology industry in the metropolitan areas.

Ja-Ryong Koo bonhong@donga.com