[EDITORIALS]The benefit of company towns

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[EDITORIALS]The benefit of company towns

Following passage of a special law on company towns at the National Assembly, the Ministry of Construction and Transportation has announced a plan to select demonstration projects for a company town. Several local governments have started to compete to invite such projects. For the development of underdeveloped areas and the balanced development of the nation, we hope that the construction of company towns makes rapid progress.
But the reaction from businesses that are to participate in the project is lukewarm. There should be profits when the businesses participate in the construction of a company town. But the government is showing a strong will to take most of the development profits for the national coffers. At the same time, it is setting difficult conditions for the establishment of schools and hospitals in a company town. In short, the inducement for businesses’ participation in a company town will depend on the extent to which development profits will be allowed to the businesses and the extent to which the establishment of urban facilities related to a company town will be allowed.
The reason the population concentration in the Seoul metropolitan area is so high lies in its complex amenities, including workplaces and educational, medical and cultural facilities. For the construction of a successful company town, regulations on such facilities must be relaxed.
At the same time, the central government must consider delegating the administrative and regulatory rights over the construction of a company town to local governments. If each local government decides on land expropriation or construction of basic public facilities by consulting with businesses, and is given a free hand to decide to what extent it will allow businesses to take profits from the development, it will be a good example of decentralization.
In connection with building a company town, the role of the central government should be limited to deciding whether the company town fits in with the national territorial development plan and whether it is environmentally sustainable, and to showing what the central government can provide in support of the plan, like tax benefits.
If various company towns are built across the nation, we can achieve balanced national development without pouring in budget money to create an “administrative city,” causing inefficiency in administration.
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