[Editorial] Local Cities Should Find Measures to Boost Economies

Once Hyundai Heavy Industries Co., the world`s largest shipbuilder, finishes construction of its new shipyards at the Gunjang Industrial Complex, located in Bieungdo-dong, Gunsan, North Jeolla Province, in August 2009, it will have annual sales of 3 trillion won by building 28 ships every year. The shipyard in Gunsan will create 10,000 jobs, including 8,400 of its own employees and 2,000 workers for suppliers. It will also spend 500 billion won on labor costs each year. Gunsan city government will gain local taxes amounting to 5.5 billion won each year. If heads of local governments want to lure plants to their own areas, they should learn lessons from Kim Wan-joo, governor of North Jeolla Province, and Mun Dong-shin, mayor of Gunsan.

Kim and Mun visited the headquarters of Hyundai Heavy Industries 60 times when the shipbuilder was looking for a new place to build shipyards after the company’s shipyard in Ulsan reached full capacity. They struggled to induce the Ministry of Maritime Affairs & Fisheries to rezone the land for harbors so as to allow the shipbuilder to build its own shipyard. The approval process, which usually takes around 18 months, was also shortened to just 15 days. Kim Yang-won, director of investment promotion of North Jeolla Province, even said, “We were determined to do everything but steal. We literally played the role of a real estate agent and lobbyist.” Even though the shipbuilder initially intended to build just a ship block plant, it was attracted to the administrative service and finally decided to build its own full-scale shipyard by increasing its investment by 400 billion won.

A firm can revive a city. The miracle of Ulsan, which had long been considered a secluded seaside village, is well known across the world. Citizens on Geoje Island have already experienced annual per capita income of 30,000 dollars as shipbuilders have enjoyed their heydays for a decade. Samho-myeon, Yeongam-gun, in South Jeolla Province, has been raised to a larger administrative district since its population surged after Hyundai Samho Heavy Industries was introduced. Government officials of Donghae, Gangwon Province struggled to lure an investment of 130 billion won from LS Cable, the nation`s leading cable producer, earlier this year, in an effort to follow the successes of other cities.

The Roh Moo-hyun government tried to pursue balanced national development while designating innovative and corporate cities. The policy created some side effects, including soaring real estate prices across the nation. However, it is not efficient for the central government to support the development of local areas. Real innovative cities and corporate cities can be established and create jobs only when local governments are ready to provide what corporations need. Heads of local governments whose areas were designated as innovative cities should take a page from the case of Gunsan, instead of relying on the president’s office.

The Federation of Korean Industries will hold an investment fair to bring together 16 local governments and corporations for two days beginning June 26. I hope there will be more cases similar to the one between Hyundai Heavy Industries and Gunsan.