[Editorial] Government to Confess a Balanced Development on “Squandering Taxpayers’ Money”

The Ministry of Commerce, Industry and Energy and the Presidential Committee on Balanced National Development said in their own evaluation report yesterday that many projects for balanced development are redundant and have weak linkages between each other. This means that many such projects are confined only to construction of new buildings and the pursuit of some demonstration effects, and that follow-up efforts of the projects’ achievements have been insufficient. It is fair to say that the government has confessed that its balanced development projects are squandering enormous money from taxpayers. This is the stark reality of the balanced development initiative that will require 59 trillion won until 2008.

There are as many as 10 strategies for balanced national development that the presidential committee and government ministries have put forward without coordinating with one another. The strategies include a new administrative city, an innovation cluster, an innovation city, a corporate city, qualitative development of the Seoul metropolitan area, and development of backward areas. There are 75 items in assistance project for an innovation cluster which include overall management, location of start-ups, human resources and marketing. There are redundant projects going on. To establish innovation strongholds of local technologies, for example, the Ministry of Commerce, Industry and Energy is driving forward the local cooperation research center, while the Ministry of Information and Technology and the Ministry of Environment have a local software assistance center and a local environmental technology development center, respectively.

Even development projects for tourism and leisure purposes, which are known to be highly plausible, are raising concerns over redundant investments and poor management. A case in point is the development project for the southeast coast which is aimed at constructing a large-scale leisure town in Shihwa, Seosan, Saemangeum, Byeonsan, Haenam, and Yeongam. There are plans for building a golf course in almost all of the complexes, including 450 holes, the equivalent of 30 regular golf courses, in Saemangeum. The government should remember the Japanese government’s experience when it attempted to build thousands of golf courses in the name of regional development and faced a crisis due to oversupply.

Local governments on which the success of regional projects depends are playing insufficient roles. The government complains that local governments have failed to exercise their autonomous rights, but the underlying reason for that is the government took the lead in budget planning and selecting projects while excluding local governments. The corporate city is becoming the “corporate city without corporations,” as major large companies, including Samsung, are not attracted by it. That is the result of the significant reduction of incentives by the government in the logic of balanced development.

Overall restructuring of balanced national development projects is essential to prevent the projects from going bust and avoid reckless national development. Above all else, the government should prioritize the projects through a new analysis of plausibility and push forward them in order, according to the economic situation.