Election-time public works smack of dipping into the pork barrel

By Choi Sung-jin

Since last month, government officials have announced the start of one large public-works project after another, as if they had been suddenly awakened to the importance of social infrastructure.

Officials at the Ministry of Land and Transportation said the series of announcements was just a coincidence, as related agencies have completed their feasibility studies and funding has become plentiful in these times of low interest rates.

Not so, say most experts. “As major elections near, every government tends to do all it can to attract voter attention,” said a former economic bureaucrat. “Most administrations start with various economic reforms in their early days, but they feel tempted to bolster the economy through large construction projects toward the end of their tenure.”

Some of the large public-works projects announced recently are those which had earlier been rejected or shelved because of excessive costs or other reasons, the experts noted.

A case in point is the plan for the new expressway linking Seoul to the new administrative town of Sejong. The Roh Moo-hyun administration first pushed for the project in 2003 to help ease traffic congestion around the capital. The Lee Myung-bak government approved the project but fell short of starting construction because of the cost of nearly 7 trillion won ($6 billion). This project resurfaced in the run-up to local elections last year as an election pledge of the ruling Saenuri Party, and ground for the project will finally be broken soon.

Ideas for building airports for 50-seat passenger planes on some islands also have long been raised and shelved because of their uncertain commercial viability and adverse environmental effects. That left only a few projects, such as the second airport on Jeju Island and a highway connecting Seoul to eastern coastal cities, as completely new ideas.

Government officials defend these social infrastructure projects as killing two birds with one stone _ creating new jobs and reinvigorating regional economies. Private economists also acknowledge such beneficial effects to some extent, because a considerable portion of the expenditures will get into the hands of residents in the form of land compensation and provide work for idled construction companies.

The problem is most of these projects are scheduled not by long-term development plans for the good of the nation but by the political calendar, they said, pointing out that the parliamentary elections are only five months away and the proposed expressway to Sejong will mainly benefit the Chungcheong area, a swing province.

Such hurriedly-concocted projects sometimes lead to conflicts with locals, as is the case with the second airport in the southernmost resort island, which is faced with fierce opposition from residents.

The most serious problem of the so-called social overhead capital (SOC) projects, however is that they cannot be the fundamental means of stimulating growth in the long run, but will only increase government debt and weaken its fiscal health.

“The construction of roads and ports as pushed by the government can stimulate the economy only when the nation is on a normal economic cycle in which booms and slumps altercate,” said Prof. Chun Seong-in of Hongik University. “As Korea is now at the beginning of a long period of low growth, it cannot escape from a slump through public works alone. Indeed, this could lead to Korea going through a fiasco similar to what Japan went through with its lost two decades.”