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S. Korea unveils measures to boost regional economy

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Published : 2014-03-12 10:47
Updated : 2014-03-12 10:47

South Korea said Wednesday that it will ease regulations on the use of areas freed from "green belt" development restrictions, a move intended to bolster regional economies through brisk investment.

The government also designated dozens of regional development blocks and said it will provide support for business projects led by regional governments so that they can boost their growth engines.

The moves were decided at a trade-investment promotion committee chaired by President Park Geun-hye to spur development of regional economy.

"So far, the central government has unilaterally pushed for one-size-fits-all regional (development) measures, which led to low level of satisfaction and were limited in creating jobs and inducing corporate investment," the government said.

"We will now push for a change in the paradigm under which local governments take the lead in drawing up their own development strategies and programs, while the central government provides all-out support for them," it added.

The government designates certain areas as green belts in order to preserve forests and prevent reckless development by restricting construction of homes, factories and other commercial facilities. Even after the restrictions are lifted, the areas can only be used for building homes.

The government now plans to ease such restrictions to allow the construction of commercial facilities and factories "depending on circumstances facing each area."

About 8.5 trillion won ($7.9 billion) is expected to be invested over the next four years in 17 related development projects in such areas sized at 12.4 square kilometers, the government said.

In a related move, the government plans to ease regulations on development of mountain areas in a way that would make it easy to construct leisure and new renewable energy-related facilities. The plan also allows the construction of "peripheral" facilities to hospitals such as parking lots in preserved mountain areas.

The government said that it designated a total of 56 regional development blocks and will push for development projects that local governments have proposed in order to nurture their own growth engines.

Since January 2013, the government has received a total of 2,146 projects from local governments. It will finalize the list of projects it will support by the end of July.

In order to induce corporate investment in less-developed regions outside Seoul, the government said it will expand tax benefits to companies moving their headquarters or offices to provincial areas.

The government expects that these measures would induce about 14 trillion won worth of investment in provinces.

The regional development measures come amid growing concerns that provincial areas are suffering a steady decline in populations and a lack of job opportunities, undercutting the overall economic vitality there. (Yonhap)

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