Provinces find natural sources for more cash

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Provinces find natural sources for more cash

It’s been 10 years since direct elections of mayors, provincial governors and other local administrative heads began in Korea. Prior to these elections, the government appointed people to fill these positions.
There have been changes, but not so many that one could say that Korea has entered a new era of decentralization. Indeed, some say that in those 10 years, the differences between Seoul and the rest of Korea have only become more pronounced.
But here and there, towns and counties are showing signs of taking charge of their destinies. Rather than blame the concentration of resources in Seoul, these communities have used their own resourcefulness to enhance their own competitiveness. Their stories offer good examples for other regions.

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How an idea for a mud festival hit pay dirt

BORYEONG, South Chungcheong
The small town of Boryeong wasn’t much to look at. Its only attraction was a beach of powdered shells. But after 1994, when Park Sang-don was elected mayor of Daecheon (with Boryeong included in his jurisdiction), it was a different story.
Mr. Park happened to see an American movie called “The Player,” which had a scene in which the lead actress took a mud bath. That gave him an idea for reviving the region, whose shoreline was rich in mud.
The first thing he did at work the next day was give the videotape of “The Player” to a city official, Myeong Hee-cheol, ordering him to research ways to make an event out of mud. Mr. Myeong went to the Korea Research Institute of Chemical Technology, which informed him that Boryeong’s mud was rich in aluminum, which is known to improve blood circulation.
That July, Mr. Myeong created five mud baths in a tent on Daecheon beach, charging 50,000 won ($43) for 20 minutes. It attracted only about 10 customers a day. The city cut the price to 10,000 won, which didn’t help much. In 50 days that summer, the mud baths had only about 600 customers.
But the government wasn’t ready to give up. It signed a deal with a company to develop mud cosmetics. The process involved mixing Boryeong mud with water, grinding it into flour, drying and then sterilizing it. But a good marketing plan was never developed, and the mud cosmetics didn’t catch on.
In 1997, the city government gave it one more try, asking Jeong Gang-hwan, a professor of tourism at Paichai University, for help. Mr. Jeong’s idea: an annual mud festival in July, where tourists were encouraged to play all sorts of games in the mud under the hot summer sun.
Pictures of mud-covered tourists began appearing in newspapers and on television. About 310,000 tourists came to the first festival in 1998; by last year, the number had jumped to more than 1.31 million.
At last year’s six-day festival, about 400 local restaurants made 6.5 billion won, and about 300 lodging facilities made 8.1 billion won.
The success of the festival helped Mr. Park climb the political ladder; he’s now a lawmaker in the governing Uri Party.
Says Mr. Park, “Ideas will occur to you when you have passion, even if you’re not a genius.”

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The perfect Korean wine? This farmer is determined to make it

A wine connoisseur might be reluctant to choose a bottle of grape wine labeled “Made in Korea” over a more familiar Beaujolais Nouveau or cabernet.
At any rate, Korean wine purchasers didn’t seem eager to try an “all-Korean genuine grape wine” called Chateaumani that was introduced in 1997. This wine ― whose name came from the French word “chateau” and from Mount Mani in North Chungcheong province ― didn’t quite have the taste that an epicure would go for. Even if it had, it might not have mattered much, as the wine essentially went unnoticed by consumers.
“It needs to work on its brand value to compete with other brands,” said Kang Shin-hyum, an analyst at Samsung Economic Research Institute.
But the creator of Chateaumani was less interested in making the perfect wine than in saving the Korean grape farmer.
In Yeongdong county in North Chungcheong province, about 4,600 of the 20,000 farms were grape producers; they accounted for 10 percent of Korean grape production.
A farmer, Yoon Byeong-tae, who is now the president of Wine Korea, thought of making wine when he was looking for a way to boost the domestic grape market in 1993. He started to make wine with his grapes and began trying to persuade grape farmers that a winery should be built to save the local economy.
At that time, wine was not much in demand in Korea, and the farmers were reluctant to jump into something unfamiliar, especially since their grapes were less sweet than European ones. But 500 million won ($432,000) was invested and the winery was built.
The “secret” of making the Chateaumani came from Mr. Yoon’s own studies; he read foreign books and toured Korean wine factories. The initial result was not a success.
But Wine Korea is expecting its breakthrough this year. This summer, retail giants Homeplus and Lotte Mart began carrying Chateaumani. It has a sales goal of 5 billion won ($4.3 million) for 2004.
Why the change? Mr. Yoon says he’s been studying his craft undercover. “You can say I was dishonest, but I got employed at French, Italian and American wineries so that I could learn more,” said Mr. Yoon. “I got help from winery experts and built a new factory with better filters that will produce the right taste that I want.”
More Chateaumani is currently fermenting in a cave in Maecheon that Japanese troops used to store ammunition during World War II.
“It’s cool, it’s safe and it helps make the best, most unique Korean wine,” said Mr. Yoon.

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Gangwon bets wind farms blow more tourists, dollars its way

The harsh winds along Daegwallyeong ridge, in Gangwon province, are becoming a source of untapped revenue for Gangwon residents, who hope that using wind to generate pollution-free electricity will not only raise money but increase tourism to the region.
In its latest project, last November, the province built wind turbines on a Daegwallyeong ranch. The province expects income of 220 million won ($190,000) from selling electricity this year, and 22.9 billion won per year starting June 2006, when more facilities will be completed.
The plateau in Gangwon province’s Pyeongchang county, 1,100 meters (3,610 feet) above sea level, is an optimal site for wind turbines. Its 3,000 hectares (7,413 acres) of grassland were once home to 4,000 cows; there are now fewer than 1,000.
With overproduction of milk in 1990s, farmers reduced their herds. Now wind turbines stand there, spinning and humming.
With financial support from a government initiative to develop alternative energy sources, Gangwon province chose Daegwallyeong as its site for wind turbines, which need a minimum windspeed of three meters (10 feet) per second to generate electricity.
“Wind blows southwest at an average speed of 6.7 meters per second in Daegwallyeong,” said Yoo Neung-soo, a professor of mechanical engineering at Kangwon National University. According to Mr. Yoo, in Denmark, where wind power is more common, wind velocity averages 5.5 meters per second.
In April 2002, the province bought four medium-sized wind turbines, each with a 660-kilowatt capacity, for 6 billion won. Three began commercial power generation last November (the fourth was damaged by Typhoon Maemi).
Through private investment, the province plans to raise 150 billion won to build 49 generators by the end of 2005, each with a two-megawatt capacity. They are expected to start generating power for commercial use in June 2006.
In all, the province expects 210,000 megawatts per hour ― a considerable amount, but dwarfed by the 1.1 million megawatt-hours generated by the Chungju Dam, Korea’s biggest water power plant.
Provincial officials also hope the wind turbines, along with the Daegwallyeong ranch, will attract tourists.
A company, Happy Green, is operating a lodge, sheep ranch and botanical garden at the site. Last year, 120,000 people visited, and more than 250,000 visitors are expected this year.

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Jeju officials discover island’s mineral water is rich in profits

JEJU ― In September 2002, the head of Coca-Cola’s Asian branch visited the office of Jejudo island’s then-provincial governor, Woo Geun-min, offering a handsome price for the rights to Jejudo’s mineral water.
Mr. Woo did not hesitate in his response: “No.” The governor believed he couldn’t turn a gift from God over to a foreign company.
In January, Coca-Cola again offered to buy the rights ― the request coming from its North American offices this time. But the company was turned down again.
What lured this global company all the way to Jejudo to make a business proposal? The answer lies in the water of the volcanic island, which is said to be rich in flavor and health benefits. All Jeju’s city government has to do to earn an annual profit of 10 billion won ($83.3 million) is tap this resource below ground.
The idea of selling the water was new to Jeju citizens when Governor Shin Gu-beom first came up with it in 1995. During his stay in the United States during the 1970s, Mr. Shin saw locals buying mineral water from supermarkets, which shocked him.
“Back then, we could never imagine the price people would pay for water,” Mr. Shin recalled. “Then the idea hit me that Jeju is rich in water ― why not sell water as well?”
But he wasn’t the first to come up with the idea. A Korean company had already started such a business, selling Jejudo water to foreign embassies and Korean airlines.
When Mr. Shin cemented his plans by establishing Jeju Provincial Development Corp., it was sued by the mineral water company. Jeju’s government lost the case and an appeal.
But public opinion was with the provincial government and its argument that the water belonged to all Jeju citizens, not a private company. The government persuaded the company into giving up the business. In 1996, it gave in and dropped the suit.
Now the government was free to start its business, but nationwide distribution proved a challenge. After some deliberation, Mr. Shin accepted an offer of partnership from a Korean ramen company, whose distribution network seemed to guarantee success. So Jeju mineral water, named Jeju Samdasu, was brought onto the market in 1998, and had the biggest share of the market within six months.
Now the Jeju government is getting ready to sell the water in China; marketing studies are under way.


by Kim Bang-hyeon, Ahn Nam-young, Hong Chang-eop, Yang Seong-cheol

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