[EDITORIALS]Daegu’s ‘Milano’ pipe dreamThe Daegu municipal government’s ambitious “Milano Project” for boosting the local economy is on the brink of cancellation. The goal of the project was to use the local fiber industry as a basis for transforming Daegu into an international fashion capital like Milan, Italy.
The Board of Audit and Inspection has asked the city government to reconsider its plan to create a fashion industrial complex ― the core of the Milano Project ― arguing that its feasibility and fundraising measures were insufficient. The agency may have used the word “reconsider,” but what it meant was that the project should be stopped.
The board also noted that 13 projects in Korea worth a total of 3.6 trillion won ($3.5 billion), all of them undertaken as “regional development projects,” are in similar straits. These include a promotional center for the shoe industry in Busan and a “bio-town” project in Gangwon province. The board’s ruling is sure to be a disappointment to local interest groups that had high expectations for those projects.
With the ruling, the central government’s financial support for the projects will be suspended. Ultimately, the Milano project will come to a halt. Each local government may have to decide whether to continue its project on a smaller scale or to cancel it.
We think developing the industries best suited to each area is the most appropriate way to achieve balanced development. But it is hardly possible to succeed if local municipal governments push such projects beyond reasonable expectations.
This ruling demonstrates that it is not a good idea to start enterprises of this sort without fully studying their feasibility, while relying on the central government for funding.
It turns out that the Daegu government and the Ministry of Commerce, Industry and Energy launched the plan to create an industrial complex before they had even analyzed the feasibility of the Milano Project or made fundraising plans. The plan would have created a complex that was too big to be justified by the demand. The local government had nothing but enthusiasm. Neither promotional strategies nor even voluntary contributions from private companies had been arranged.
The success of local development projects like these depends on realistic studies of their feasibility, as well as the active participation of private companies.