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Territorial Development National Land Development

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National Land Development

Improving regional competitiveness

From the mid-1990s, there was strong push for deregulation so that the private sector would take the lead in economic development. The private sector assumed a greater role in land development, which had once been the preserve of the state sector. Individuals were allowed to carry out land development projects in “semi-agricultural areas” as aresult of changes to the national land use plan. In August 1994, the Act on Attracting Private Capital for Infrastructure Facilities was enacted to promote the financing by private capital of infrastructure investment projects. Consideration was given to selecting special economic zones to attract foreign capital. The Act on Foreigners’ Land Acquisition and Management was enacted to help foreign investors acquire domestic land easily. The Special Act on the Relaxation of Regulations over Business Activities was enacted to ease rules concerning land use associated with business activities.

Agricultural regulations were also relaxed in connection with the need to improve the competitiveness of the domestic agricultural sector in response to the opening of the local agricultural market with the signing of the Uruguay Round agreement. Under the Farmland Act, amended in January 1996, the ceiling on the ownership of farmland of 7.35 acres was abolished in “agriculture promotion areas.” The ceiling on farmland ownership outside the agriculture promotion area was raised to 12.25 acres. The longstanding principle that farmland should belong to working farmers, together with the farmland ownership ceiling that had been maintained since 1948, were relaxed or abolished, indicating a switch in emphasis in the agricultural policy from equality to production efficiency.

The Kim Young-sam administration put stress on the establishment of large-scale integrated local economic structures to promote balanced regional development while strengthening local competitiveness in aglobalized economy. The strategy focused on eight select areas.1) This development approach was an extension of the regional growth center strategy, but it encompassed a wider range of large provincial cities, industrial complexes and outlying areas with a strong capacity for growth, rather than focusing on the role of a single city as practiced under the regional growth center strategy.

One of the representative regional development projects promoted in the 1990s was the West Coast Development Project. A relatively backward area in terms of production and household income, the west coast area, comprising South Chungcheong and North and South Jeolla, was a major target for development in terms of achieving balanced regional development. The development project included the creation of the Gunsan Industrial Park (which would serve as a launch pad for trade with China), the Gunsan-Janghang Industrial Complex, and the construction of the 352 km-long West Coast Expressway.

Policy measures taken for the capital region in the 1990s were focused on increasing national competitiveness in response to globalization. This was different from the regional development policies adopted in the 1980s, which stressed balanced national development. The new government believed balanced development should not be pursued at the expense of market forces since this could result in a distorted economic structure. The New Five-Year Economy Plan reduced the number of land use zones from five to three for more flexible land use, adopted special assessment charges levied on activities causing overpopulation instead of relying on regulations relating to physical space, and eased regulations on the total size of areas zoned for factory sites in the capital region.

In July 1994, under the amended Enforcement Ordinance of the Act on Industrial Location and Establishment of Factories, large-sized businesses engaged in seven high-tech sectors, such as computer and electronics, were allowed to expand their facilities by up to 30 percent in “growth management zones” in the capital region.

With increased local autonomy and the easing of various regulations that had been imposed under the National Land Use Zoning Act, local governments started vying with each other to attract high-tech businesses and international events. For example, the Pusan International Film Festival, which started in 1996, has joined the ranks of the world’s top five film festivals.

It has been pointed out, however, that the revision of National Land Use Zoning Act, especially the integration of land use zones from five to three, caused reckless development and adverse side effects, such as environmental damage, particularly in the capital region, due to a lack of systematic planning supervision.

Source : SaKong, Il and Koh, Youngsun, 2010. The Korean Economy Six Decades of Growth and Development. Seoul: Korea Development Institute.

NOTE


1) Including Asan Bay, Daejeon-Cheongju, Jeonju-Gunsan-Janghang, Gwangju-Mokpo, Gwangyang-Jinju and a new industrial complex on the west coast.

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