Gov`t to Spend Billions on Provincial Development

The government yesterday pledged to inject 14 trillion won (10.2 billion U.S. dollars) in the nation’s four major rivers of Nakdong, Han, Geum and Yeongsan to simultaneously revive seven leading project areas including Daegu, Busan, Andong in North Gyeongsang Province, Yeongi County in South Chungcheong Province, and Hampyeong County in Naju, South Jeolla Province.

For balanced national development, tax benefits will go to businesses that move from the Seoul metropolitan area to provincial regions by extending the reduction period for corporate and income taxes from seven to 10 years.

The Presidential Committee on Balanced National Development decided on these measures in a meeting on regional development chaired by President Lee Myung-bak at the presidential office.

A combined 42 trillion won (30.6 billion dollars) will be injected into the second-phase policy package aimed at reviving provincial economies, revitalizing the four major rivers, and pursuing balanced regional development.

When adding 56 trillion won (40.9 billion dollars) earmarked for state-owned projects and provincial development, the combined budget will reach about 100 trillion won (72.93 billion dollars) over five years.

In the meeting, President Lee urged the simplification of unnecessary bureaucracy for the river project and for the government to come up with measures to that end.

The government will inject 13 trillion won (9.48 billion dollars) to revitalize provincial economies, including cuts in corporate and income taxes to business owners in less developed areas over the next five years.

It also plans to double relocation subsidies for businesses moving from metropolitan areas to the provinces.

To drastically improve the standard of living in 163 regions, 15 trillion won (10.9 billion dollars) will go into fostering development and improving the standard of living in agriculture and fisheries, extending regional medical and welfare services, and development of regional culture and environment.

The government will also pursue effective and balanced development for use of national land by supplementing development projects focusing on metropolitan areas and the Chungcheong, Jeolla and Gyeongsang provinces.

The Lee administration is expected to announce the third-phase measure for its balanced regional development project after revising the law in the first half of next year.

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