&#91EDITORIALS&#93Plant ban erodes economy

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[EDITORIALS]Plant ban erodes economy

The government policy that allows foreign-invested companies to build new factories in the Seoul metropolitan area but restricts domestic companies from doing so, is being criticized by the business community. Concerns such as Samsung Electronics Co. and Ssangyong Motor, which have pushed to build additional facilities in the Seoul area, question the fairness of the policy.
The discrimination against domestic industries started when foreign investment was urgently sought during the foreign exchange crisis in 1997. Korean companies reacted strongly to the plan for special economic zones, which were conceived as a way to attract foreign investment to Songdo in Incheon. If the government rejects Samsung’s plan to expand its facilities while permitting LG Philips LCD to build a liquid crystal display factory in Paju, Gyeonggi province, it will be a clear act of discrimination. The semiconductor industry is a technology-and labor-intensive industry that poses less of a danger of creating population concentration. We should consider the theory that productivity is halved when facilities are dispersed.
Industries prefer to be located in the Seoul area where infrastructure is excellent. If they jettison investment plans and relocate to other areas because the government does not allow new factories in the Seoul area, serious questions should be raised about policy in the Seoul area. The government failed to ease the population concentration around Seoul because of a confused policy and exceptions.
We know how important it is to curb population growth. But we cannot shy away from problems of business discrimination. Just as we do not give any benefit to domestic industries, we must not give discriminatory treatment to them.
It is time for us to think seriously about changing the paradigm of our policy on metropolitan areas to stay in line with the globalization era. It is necessary to review the problems of the metropolitan area in broader perspective, rather than seeing them from the view of balanced development of regions. We cannot turn away from the reality that businesses prefer to move to business-friendly places. We must consider what is good for our economic vitality and competitiveness.

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