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[Editorial] Another Round Amid Side Effects of “Balanced Development”

[Editorial] Another Round Amid Side Effects of “Balanced Development”

Posted December. 13, 2006 07:13,   

한국어

The so-called “wave of money” will sweep across Yeongjongdo in Incheon. In the 5.8 million-pyeong “Free Economic Zone” equivalent to the new city of Bundang, the land reparation budget of five trillion won will be allocated from December 15. This brought about the emergence of upscale bars and foreign brand automobile dealers. Lawsuits among siblings as well as violence toward parents “demanding for some assets for a business” are not unheard of there. It is said that with the substitute land purchases expected, not only the areas around the free zone but also the near islets saw their land prices soaring by two to four times. However, more than seven out of the 10 compensation recipients are not from the region.

Yeongjongdo is the essence of the current government’s balanced regional development. The government has carried out a laundry list of numerous development plans that are hard to remember, including the Multifunctional Administrative City Information Center, Business City, Innovation City, Innovation Cluster, and International Free City. The government’s land compensation funds will reach 60 trillion in early next year since commencing in 2001, and on top of that, by 2008, an extra 50 trillion won will be released. These funds are the main culprit behind the skyrocketing housing prices in the metropolitan area. Realizing its mistake, the government is reviewing the plan of compensation in kind in which some part of the compensation is given in the form of other lands.

Worse, policy coordinator Byeon Yang-kyun at Cheong Wa Dae said, “We will come up with the ‘Second Balanced Regional Development Strategy’ in the first half of next year. We are currently reviewing extraordinary incentives.” This is the time for President Roh to minimize the side effects of the existing balanced development and stabilize the market when he has less than a year before his tenure ends. It is not the right time for him to try another reckless adventure, dubbing it “an extraordinary balanced regional development.” Is he going to deepen the repercussions with a pork-barrel policy for his next elections at a time of chaotic economy and public welfare?

Fundamental solutions to the real estate problems will not come about with evenly utilizating the land nationwide as more than half of the people are concentrated in the metropolitan area. Nevertheless, government policies need to be designed to accommodate the market principle. Reckless curbing of building factories in the metropolitan area and balanced development where tax is used to back up speculative funds would not be desirable at all.

Prior to pursing for a balanced regional development, it is important to have a sense of adjusting the right balance and intensity of the policy. Otherwise, both the region and the sub-region, both the haves and have-nots of land, would have deeper imbalance and economic disparities. For the past four years, only a minority of the people experienced benefits from the balanced regional plan and socio-economic costs and burden on the people have astronomically increased. Will the government ignore all these?