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The Korea Herald (31 August, 2004)
By Kim Jung-min




The government is considering easing regulations barring companies from building factories in the Seoul metropolitan area, the Ministry of Construction and Transportation said yesterday.

Under a two-stage plan proposed by the ministry and a presidential advisory body, Korea's conglomerates and multinational companies will have an easier time building new facilities in the capital area encompassing Seoul, Incheon and Gyeonggi province, construction officials said.

"We intend to ease regulations step by step while maintaining our existing policy," Construction Minister Kang Dong-suk said yesterday during a news conference at the Gwacheon government complex on the outskirts of Seoul.

He said the major change to regulations is intended to attract investment from high-tech businesses to the metropolitan area. The ministry is also considering relocating most 268 government offices located in the metropolitan area to other 12 cities.

The announcement came one day after the ruling Uri Party proposed cutting taxes and increasing government spending in a desperate effort to stimulate a long-awaited economic recovery.

Many analysts see the move as an attempt to diffuse widespread discontent among residents in the Seoul metropolitan area with President Roh Moo-hyun's controversial plan to relocate the administrative capital.

Seoul Mayor Lee Myung-bak warned that the capital relocation project would undermine the city's attempt to transform itself into a financial and high-tech industrial center of Northeast Asia. In July, the government picked Cheong Wa Dae, Cabinet ministries and scores of other major government bodies to move from Seoul to the planned new administrative capital by 2014.

Many experts speculate that the government may shift away from its current policy that is merely focused on controlling expansion in the Seoul metropolitan area.

The government has tightly restricted companies from building or expanding their facilities in the Seoul metropolitan area since 1994. It was intended to break up the concentration of power and wealth in the area which accounts for 47.6 percent of the country's population and nearly a half of the country's gross domestic product. Moreover, around 85 percent of national government offices and 91 of the 100 largest companies are located in the Seoul area.

Government officials, however, pointed out that the proposed plan does not mean any dramatic change to the existing policy restricting expansion of the metropolitan area.

At present, Korean companies and joint-venture companies with multinational corporations in high-tech businesses are relatively free from building or expanding their production lines in the metropolitan area.

Construction officials said the ministry will announce details of revised regulations by the end of this year.

(jungmin@heraldm.com)