Hong says country needs the Gwangju model

The Gwangju model is being heavily promoted by the central government, which is offering up blueprints, incentives and manuals.

Last month, the Gwangju government and Hyundai Motor reached an agreement to create a joint venture that will create jobs and boost growth. It has become a template for the future as the government seeks to stabilize employment and keep the economy competitive.

Finance Minister Hong Nam-ki warns the model differs significantly from earlier policies aimed at incentivizing companies to invest outside Seoul. The Gwangju model requires significant cooperation, with the labor unions, the companies, the regional societies and the local governments all playing a constructive role.

The government reaffirmed its intention to announce two to three additional Gwangju-model projects in the first half of 2019. It said the first step will be the distribution of coexistence-model manuals in early March and holding presentations for local governments to speed up the process.

“Last month, we received news that an agreement was reached on the Gwangju job model,” Finance Minister Hong said Thursday during a joint press briefing which included the Ministry of Trade, Industry and Energy and the Ministry of Employment and Labor.

“Through negotiation and compromise between the labor union, the company, the public and the government in Gwangju, we now have a hope of creating 11,000 jobs.”

He added that Gwangju alone is not enough.

“Our economy’s ability to create jobs has been weakening. Finding new growth engines has been slow,” Hong said, adding that the government is aware that the job situation is difficult.

“The number of people leaving their hometowns in search of jobs is growing,” he said.

“A coexistence regional job model like that of Gwangju is a new breakthrough for our economy and furthermore will be the catalyst for a social compromise.”

As such, he said the government has come up with plans that will promote the adoption of the Gwangju model.

The government said both the central and local governments will be providing benefits to companies, including a 50-percent cut in acquisition taxes on land purchased to build factories and a 75-percent cut on property taxes for five years.

Local government subsidies are also being promised, and companies will be eligible for central government subsidies provided for the upgrading of facilities to smart factories.

BY LEE HO-JEONG [lee.hojeong@joongang.co.kr]