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External economic conditions remain unfavorable for the Korean economy, with oil prices resurging from the beginning of the year and overseas demand for Korean goods slumping. People are suffering from high consumer prices and weaker income, while companies and small business runners are bleeding on sluggish domestic demand. The global economic crisis is the worst since the Great Depression that would come once in a century. Korea's small and open economy is facing tough sailing ahead.
.jpg) minister of land, transport and maritime affairs |
The Ministry of Land, Transport, and Maritime Affairs (MLTM) will focus all capabilities in 2009 on helping the nation overcome external difficulties as soon as possible. We will turn this global recession into an opportunity to make another leap forward toward becoming an advanced country.
First of all, the ministry plans to invest 23.4 trillion won ($17 billion) in social overhead capital (SOC), a budget 25 percent bigger than that of 2008, for the early recovery of our economy. Sixty-five percent of this largest SOC budget in history will be implemented in the first half of this year. Our strategy is to lead revitalization of the public sector with the early execution of budget.
SOC investment is the strongest means to stimulate domestic demand since it is highly effective in creating jobs and boosting production. It is also meaningful investment for our future, because it is more efficient in reinforcing the national growth potential than one-off investments.
To maximize the effectiveness, the ministry designated 10 Korean-style New Deal projects as our top priority. We chose projects that would be most effective in inducing investment from the public and the private, thereby boosting domestic demand. They include investment in road and railway, four major river restoration, urban redevelopment and early development of industrial complexes.Forty-five trillion won will be injected into the 10 projects as early as possible throughout the year and around $79 trillion of production and 650,000 of employment are expected. We will also cooperate with relevant agencies to streamline the environment assessment study and preliminary feasibility study to speed-up the whole project.
The MLTM will also put priority on the normalization of the property market. First, excessive housing regulations that contradict the market order and the current economic situation will be reformed. For example, the ban on receiving the right to purchase pre-sold houses with price caps more than once within a certain period will be temporarily lifted for two years. The period during which resale of public building lots is restricted will also be shortened additionally. We expect these measures to be completed by March 2009.
Our ministry will eliminate transaction regulations in regions free of speculation with stable housing prices. Efforts to resolve the serious problem of unsold homes in local areas and to inject liquidity in the construction industry will be redoubled. Moreover, the allowed purchase volume of unsold homes with repurchase agreements will be revised to 1.5 trillion won from 500 billion won last year. Korea National Housing Corporation's purchase of unsold homes post-construction will continue.
Renewal of Territory Using Water
The MLTM will also put priority on the ``renewal of our territory utilizing water,'' and ``the revitalization of economy using rivers'' projects in 2009. The government is focusing on the Four Major Rivers Restoration Project, which will contribute to cleaning up the rivers that have been neglected until now. As a consequence, our territory will be refurbished and local economies will be boosted.
The major rivers ― Han River in Seoul, Geum River in Chungcheong and North Jeolla regions, Yeongsan River in South Jeolla Province and Nakdong River in Gyeongsang region ― have been vulnerable to natural disasters, and nearby areas have not been utilized sufficiently. In a nutshell, their functions have yet to be maximized. Moreover, the average cost for the restoration after disasters was 4.2 trillion won, whereas the investment in prevention was one trillion won for the past five years. It means we were using budget that could have been saved otherwise.
That is why we set up the multipurpose ``New Deal'' project to restore the rivers. We will be able to focus investment on preventing natural disasters that occur cyclically, and utilize the rivers as the foundation for local economic revival and national development. The ministry will inject around 14 trillion won into the project by 2011 to improve dikes, restore the environment surrounding streams, and build bicycle lanes and waterways. We expect damages from natural disasters to be prevented and the quality of people's lives enhanced. The rivers, the artery that cuts across our territory, will also become the developmental foundation for local governments.
Our specific plans are to secure flood storage areas by building small- and medium-sized dams and reservoirs. The wall of the dikes will be enlarged to make rivers and streams safer. Furthermore, improvements will be made to secure floodways if the dikes have shrunk due to excessive deposit, and small reservoirs will be developed to stabilize the water level.
For maximized utilization of the streams, the ecosystem of areas that are repeatedly flooded will be restored. For example, they could be turned into wetlands. Other areas will be developed for various purposes such as walkways, ecological parks, and places that people can enjoy culture and art.
In addition, local areas will be able to enjoy qualitative development in line with the restoration project. For instance, we will hunt for historical and cultural heritages that can be used for tour products. We will also build water sports facilities to support leisure activities of the public and develop scenic river areas for further utilization. These ideas will be reflected in urban planning and the development of new building lots.
To this end, we have been establishing a master plan with specific action plans and financial arrangement for the Four Major Rivers Restoration Project since the end of last year. The master plan is to be completed by May this year. However, for swift action, the ministry will embark on the project in cooperation with relevant agencies from March, when the mid-term report will be released.
We also set up a consultative body for government support in January with the Prime Minister's Office for a pan-governmental effort. The Office of the Four Major Rivers Restoration Project, a dedicated team for the project, was also established. In addition, a local consultative body for each river was organized at the beginning of February to promote participation of the local governments from the initial stage of the project. Groundbreaking ceremonies for Andong and Naju, two of the seven areas designated for early start of the project, were held, and will also be scheduled for other areas during the first half of this year.
The Gyeongin (Seoul-Incheon) canal project is also one of our core projects. It had been delayed because of opposition from environmental organizations and controversy over its economic feasibility since 1996. I believe this is a project of utmost importance which will open a new chapter in Korea's logistics and tourism industry by connecting rivers with the ocean. Recently, the Korea Development Institute has conducted a study to re-evaluate its economic viability and we are planning to put the Korea Water Resources Corporation in charge instead of private companies.
The project will have diverse synergy effects in culture, tourism, and leisure sectors and the river areas will become an international landmark that represents the western side of our capital area. To this end, we will begin with the construction to connect the 3.8 kilometers between the Gulpo River and the Han River this March. The constructions of bridges, floodgates, and terminals will be based on fast-track bidding to complete them by 2012.
Expanding New Growth Engines
Third, the MLTM will not hesitate to invest for the future by pursuing ``green growth'' and developing new growth engines as its strategies.
First of all, in an effort to realize a low-carbon, green transport and logistics system, we will increase the transport share of low carbon transport modes such as railway and coastal shipping up to 15 percent and 22 percent, respectively, by 2012. To this end, the MLTM strives to open the Seoul-Busan and Seoul-Mokpo high-speed railroads earlier than the original schedule and to institutionalize the financial support for building ships for coastal shipping.
In addition, pilot projects for the Bus Rapid Transit (BRT) system will be continued for a faster and more convenient public transport system, and seven more bus only lanes will be established within the capital areas for an improved bus speed.
As to the railway system, the MLTM aims to greatly enhance passenger convenience by operating an express railway between Seoul and northwestern Gyeonggi Province, and constructing a deep underground express electric railway. In addition, investments in advanced construction technologies including super long-span bridge, and in future transport modes including the next generation high-speed railway and Maglev will be further increased to expand new growth engines.
In order to make the World Expo 2012 Yeosu successful, the MLTM will construct necessary infrastructures such as the exhibition hall in a timely manner, and continuously expand SOC for an effective transport connection. Accordingly, the land compensation began in January for the establishment of EXPO town, while the construction of exhibition hall will begin in August.
The MLTM is confident that although Korea's economy faces even graver challenges and crisis than ever, an earlier achievement of facilitated SOC investment and stabilized housing market will advance the overcoming of global economic crisis and another leap forward toward the leading economy.
Chung Jong-hwan is the first minister of the land, transport and maritime affairs which was established in February 2008 along with the launch of the Lee Myung-bak administration. After graduating from the Korea University, Chung started his public official career in 1971 and has been engaged mostly in transportation sectors. Until 1997, he held many posts at the Ministry of Transportation and the Ministry of Construction and Transportation, predecessors of the current Land, Transport and Maritime Affairs Ministry. Chung was head of the Korea Railroad from 1998 to 2001, and chairman of the Korea Rail Network Authority between 2003 and 2006. He was a chair professor at Woosong University. During his leadership, the Korea Railroad won various awards for management, high-quality service and marketing from the Korea Management Association, the Ministry of Commerce, Industry and Energy, and the Ministry of Government Administration and Home Affairs. |
