[Editorial] 'Enterprise City' Program and Land Prices

The Ministry of Construction and Transportation says that as long as a given area does not have the potential to be hit with "indiscriminate development" it is going to select cities for the government's "enterprise city" program without putting a limit on how many there can be. That appears to be a change in policy from last year, when six initial areas were chosen and the intention was to add one or two each year. It also says it is considering ways to give conglomerates incentives to join in on these projects. It is utterly impossible to understand why the government is in such a hurry.

There are still unanswered questions about whether the "enterprise cities" will provide so much economic and common benefit as to warrant giving private companies privileges such as the opportunity to purchase land using eminent domain and the right to enjoy "development gains." Was that not exactly why the government was planning to prove the positive effect with a few select test cases? From the start it was too much to have selected six test areas, and it is an act of deception towards the people to make it a nation-wide program before it has anything to show for it, and for that matter before the shovels have hit the ground.

One worries that this is just going to upset land prices across the country. Much of the reason prices have fluctuated so much is because of the construction of the "comprehensive administrative city" and the "innovation cities." However, land prices in "enterprise cities" have also risen considerably. At least the other two projects are unavoidable for being part of the larger national task of deterring overconcentration in the greater capital region and balanced national development, but that is not the case with enterprise cities, which are not an urgent need and have unproven benefits. Already there are sixteen places around the country that say they want to participate in the enterprise city program. There is going to be a storm of speculative real estate investment if they all jump on the bandwagon because of regional elections, each one of them demanding to be selected.

Policy has to have itemized priorities, and its programs will have different paces. Right now the priority needs to be stable land prices. The Construction and Transportation Ministry is just pathetic for coming out with a policy that could re-ignite land prices. Furthermore they're being called "enterprise cities" but just about two out of three are going to be primarily suited for tourism and recreation, with golf and leisure facilities. The right approach for the government to take would be to concentrate its efforts on the "administrative city" and the "innovation cities" and, if it has any energy left, it should go about the preliminary test runs slated for the enterprise city program.

The Hankyoreh, 14 February 2006.

[Translations by Seoul Selection]