URBAN AND INFRASTRUCTURE POLICY: Lessons from South Korea

                                                                                    Dr. Saumitra Mohan

In the rat race of development in an increasingly globalised world, resort to a trade-off between improved quality of life and systematic destruction of the natural habitat including land and environment often become unavoidable. Rapid urbanization and economic growth are visibly apparent everywhere today, but so are varied urban environmental problems in overcrowded cities. The complexity of the issue is ever-growing because slowing economic growth is not a favourable solution, but sustainable urban development is still a viable possibility.

It is in this context that South Korea appears to be a shining example of sustainable development despite initial compromises with the environment. Rapid development has enabled South Korea to catch up just in time with the demands of a globalised world, but at the cost of environment. However, specific initiatives have been taken as part of a conscious effort to move towards a sustainable development where modern technology has played a great role. And we were all witness to the magical turn-around in the South Korean economy from a Third World authoritarian country to a modern and prosperous liberal democratic state which has balanced the demands of economic growth with the requirements of the environment.

The Republic of Korea experienced an unprecedented increase in the rate of urbanization over the past 40 years since the end of the Korean War. The level of urbanization rose drastically from 35.8 percent in 1960 to almost 90 percent today. A combination of socialist and capitalist economic policies has spurred this industrialization. Since the 1960s, the government has been consciously pushing for an export-oriented development paradigm. A well-planned and strongly executed developmental framework has made South Korea what it is today i.e. a developed country with equitable regional growth.

In its drive for fast economic development, South Korea was helped by its cultural and ethnic homogeneity. The monolithic and mono-chromatic social profile was further reinforced by the desperation and helplessness of the South Korean citizens, buffeted and ravaged by a debilitating war with North Korea during 1950-53. Against this background, South Korea started out to focus on the human resource development of its population as well as a revolutionary land reform which later turned out to provide a solid foundation for its future economic growth. Its thrust on inculcating the values of self-dependence and discipline among its citizens through its innovative policies a la Saemaul Undong or the New Village Movement and firm execution of the same also helped its aspiration.

South Korea’s New Village Movement was an ingenuous effort to curb the widening rural-urban divide. This pioneering policy by the South Korean government attempted to foster community empowerment where performing villages were given incentives and support in terms of expertise and resources to help themselves in building agrestic infrastructures while non-performing villages were not encouraged. In the 1970s, the government provided each of 33,000 villages with 335 bags of cement and other materials to use the same for the good of community. The performers were encouraged while the non-performers were told to pull up their socks to deserve governmental support. Simultaneously, the government also attempted to curb the tendencies for rent-seeking and corruption by resorting to strong measures which later impacted its growth story positively.

The committed and visionary South Korean leadership also laid foundation for its balanced industrial growth by focusing on certain core industries namely heavy and chemical industries though one would also hurry to add that as a country, South Korea also benefited from the Cold War politics. South Korea carefully sided with the US camp after North Korea was attached to the coattails of the then Soviet camp. Its loyalty to the US even during the Vietnam War stood it in good stead by ensuring a steady flow of capital, resources and technical expertise to build itself from the scratch. The somewhat enlightened but autocratic leadership ensured that South Korea make the best of available circumstances and resources to achieve a place in the development sun for itself though its citizens did lose their basic liberties and civil rights during the first thirty years of its developmental odyssey.

South Korea, during this period, laid stress on meritocracy and incentivized its citizens and industrial houses through a policy of carrot and stick. However, in its urge for rapid growth and development, many corners were cut thereby resulting in compromises with the environmental desideratum. The urban landscape, even though filled with the billowing smokes and roaring factories, became uglier making the cities inhabitable. Hence, the South Korean government thoughtfully put in place measures to control unplanned urban growth by way of earmarking a greenbelt, built around the city of Seoul in the 1970s. Seoul's greenbelt now measures about 1,566.8 km2, which accounts for about 13.3 percent of the Seoul metropolitan area.

The greenbelt, as visualised, is essentially a "belt" of greenery surrounding the city limits which was aimed to arrest unplanned urban growth and create an infrastructure which would be in harmony with nature. Through this initiative, a positive effort was made to ensure a healthy quality of air and water for the local citizens. The complexities of urban planning require the authorities to cover a wide range of concerns, intertwining with social, economic, and environmental sectors of the city. And the South Korean government has ensured the same quite successfully.

            South Korea’s ‘Ubiquitous City or U-City’ model intended at sustainable urban development was an epochal initiative involving cutting-edge technology to improve the quality of city life. Technology including high-speed internet was harnessed to ensure better access to the urban amenities which would not compromise the environment. The same also ensured a well functioning water supply system, transportation and a city surveillance system which would become the foundation of a safe and secure urban life for the South Korean citizens. The entire gamut of technological innovations provide a facile and high-speed access to smart services and information from anywhere in the urban conglomeration. We were witness to an operational state-of-the-art drinking water supply system and a very modernized transportation system. The micro-planning of each and every nuance of a public facility was really awesome and worth emulation in our country though the same was also very capital-intensive.

The futuristic ‘ubiquitous infrastructure’ provides everyone with an opportunity to access urban infrastructure and services regardless of time and location by using information technology devices as was very much visible during our visit to South Korea with its citizens interfacing with the technology on almost real-time basis. Similarly, another initiative namely U-infrastructure also has a significant implication for the emergence of a new paradigm for urban infrastructure planning which is ecologically sustainable and democratic in nature though one does feel that too much of dependence on technology may sometime prove prejudicial to the larger interests of a thriving society. South Korean cities like Seoul have become the world leaders today in the use of ICTs (information and communication technologies) in urban infrastructure planning and management.

The most encompassing of these technologies include the broadband convergence network. The interactive technologies hooked to the high-speed internet allow any device the ability to access information from the embedded devices within the specially designed system. The Personal Travel Assistant System (PTA) is another people-friendly initiative which delivers real-time information about public transportation including routes, arrival-departure timings and other eco-friendly options. This emission-free transportation system has greatly reduced the urban congestion in major urban cities of South Korea including Seoul.

The U-City model aptly addresses the sustainable development issue by focusing on a nature-friendly lifestyle. The urban residents in South Korea today have access to high-speed services and amenities through World Wide Web. It embodies the attribute of the ideal futuristic city in which public life is secured by way of a safe and secure environment through state-of-the-art technologies.

MUNICIPAL WASTE MANAGEMENT

High-income countries in East Asia, such as Japan, Hong Kong, and South Korea, with GDP per capita ranging from 23,331 to 37,385 USD, produce more wastes than countries with lower GDP such as India and Vietnam. As a part of the green infrastructure, eco-friendly municipal waste management is now possible using cutting-edge technology and practices. Municipal solid waste, or MSW, is a by-product of daily human life that is now being addressed by individual municipalities in South Korea. The composition of MSW varies greatly, but much of it is combustible into ash, while non-combustible materials such as glass and metals are shredded and recycled.

Most of the South Korean cities including Seoul metropolitan city exemplify the futuristic municipal body which utilizes high-end technology to improve the lives of its citizens and reduces municipal solid wastes in a way that improves the environment and benefits the local government. The ‘waste-to-energy’ incinerators generate sufficient electrical power, converting large volumes of trash into useable electricity. However, the whole combustion system still produces nefarious carbon emissions. In order to alleviate the amount of greenhouse gases emitted from the facilities, modern technologies have been harnessed to control the high level of emissions being released into the environment. Besides, South Korea has also successfully turned around most of its polluting dumping grounds into eco-friendly Nature Parks as showcased to us during our site visits in Seoul city.

INFRASTRUCTURE:

        The 1950-1953 Korean War destroyed much industrial infrastructure, and Korea had to start re-building itself from the scratch. As is well-known, the Korean economy was heavily dependent on foreign aid till 1961, with an unemployment rate of 25 percent and a per capita income of less than $100. However, just half a century later, Korea has become the world’s 12^th largest economy, transforming from beneficiary to benefactor of development aid. Today, South Korea is also ranked 11^th out of 148 countries in terms of excellence in infrastructures. At the forefront of this dramatic change has been the government’s investment in infrastructure and urban projects. The country’s infrastructure development was propped by an effective policy support. A very close coordination between its economic development plan, sectoral plans and budget ensured that the country does not lose focus. Its focus on following rigorous protocols for selection and evaluation of projects is very well reflected in the quality of the completed projects.

       Since the early 1960s, South Korea has demonstrated an impressive record of economic performance. Much of its success stems from a commitment to infrastructural development. In the period between the early 1960s and the late 1990s, several factors enabled Korea to realize sizable economic benefits from infrastructure investments. Strong leadership and efficient coordination for installing the infrastructure necessary to spur economic performance, a well-defined focus and priorities on infrastructure for development, and willingness and flexibility were the critical factors. The South Korean planning and investment in its human resources and their capacity building also reinforced its infrastructural initiatives by providing the necessary trained manpower as was needed to support and sustain these initiatives. Its thrust on vocational training and quality of its pedagogy was another hallmark of its human resource development policy.

         South Korea's first Five-Year Development Plan (1962-66) focused on developing the light industries and an import substitution. Infrastructure to support these activities included the construction of critical railways and several small highway projects. The second Five-Year Development Plan (1967-71) sought to stimulate exports, which grew by nearly 50 per cent per year during this period. Investment in railways continued, and highway construction also accelerated. Korea's first major highway project was to connect the country’s two largest cities, Seoul in the north-west and Busan in the south-east. This project was particularly momentous because not only did it establish a vital industrial corridor in Korea, it also served as a symbol of Korea's emerging self-confidence.

        Nevertheless, South Korea’s investment in infrastructure during the 1960s was certainly not enough. Finding it increasingly difficult to remain competitive in labour-intensive light industries, South Korea shifted its focus to heavy and chemical. Starting with the third Five-Year Development Plan (1972-76), the South Korean government identified new priorities, policies, and infrastructures needed for giving a solid foundation to the overall economic development of the country. These inter alia included petrochemicals, steel and ship-building. Comprehensive infrastructure development programmes were planned to develop the country's airports, seaports, highways, railways and telecommunication systems to support these industries.

         Through the 1980s, South Korea visualised policies that laid stress on economic stabilization, private sector liberalization and deregulation. The government put less stress on the heavy and chemical industries and paid more attention to high quality consumer goods while downscaling government spending. Infrastructure investment, however, remained fairly high to reach eight per cent of the Gross National Product in the first half of 1980s. In 1985, the government started taking several measures to stimulate the economy. The authorities also established a supplementary budget to stimulate demand and increase infrastructural investment. All these measures spurred the economic growth to unprecedented levels.

The 1993-1997 Five-Year Economic Development Plan visualised a grand programme with emphasis on improved living standards with upgraded housing, environment and urban traffic. It also aimed at expanding public transportation as well as development of communication standards with a view to resolve society's infrastructural deficits. Securing adequate power was one of the government’s emergent priorities. During the 1960s, the power generation facilities were unevenly distributed regionally, resulting in unstable supplies. Many electric power facilities were destroyed during the Korean War, resulting in regular power shortages. The Korean government merged three existing electric companies (Chosun, Kyungsung, and Namsun) on July 1, 1961 to establish the Korea Electric Company (KECO) to improve the supply of electric power before executing the economic development plan. As a result, the level of power generation reached 285,223.8 gwph in 2001 from 9167.4 gwph in 1970. Emphasis was also laid on developing the green nuclear power which today provides a considerable amount of nation’s power supply. However, it is notable that even with exceptional growth, South Korea still imports more energy than it produces.          While new information technology such as mobile phones and the Internet is showing unprecedented growth, South Korea’s progress in telecommunication sector is still far from satisfactory. Telecommunication has been the backbone of South Korea’s economic development. Infrastructures in the social service area, such as medical facilities and water supply though have had relatively low priority in South Korea to begin with. However, the development of such infrastructures improved immensely after the 1980s when the economy started performing well economically. Much of the momentum for infrastructural investments came early because of strong political leaders who had huge authority and autonomy in framing and implementing policies.           The main sources of funding for South Korea's infrastructural development included taxation, designated funds, public pension funds, and private funds not to speak of the foreign grants and loans. Given that most of the needed infrastructural projects are deemed to be potentially profitable, private financing has been considered to be one of the better ways to fund them. Better choices for private funding include industrial estates, freight depots, waste-water and municipal waste treatment facilities, and local toll roads. Incentives for attracting private funding include allowing public agencies to acquire land, pairing marginal projects with profitable projects, arranging long-term financing from public funds and allowing tax exemptions.             The main thrust of South Korea’s infrastructure policy has been to judiciously and cautiously encourage more and more private participation in all infrastructure sectors namely power, gas, transportation, airports, ports, telecommunications, water and sewage facilities, by providing tax and other incentives to private investors, and also by improving the investment selection processes. This includes new incentives for foreign investors including exemption of 10 percent value-added tax upon completion of target facilities, government guarantee of up to 90 percent of operating revenue, bonus for early completion and permission for excess profit resulting from lower than expected construction costs, compensation for losses due to exchange rates movements, acceptance of diversified development modes, increase of the profit level approved by the government from 10 percent to 18 percent, buy-out option in the event of franchiser bankruptcy and carefully-planned debt relief measures.         Transportation services in South Korea are operated mostly by the private or quasi-private sectors, excepting railways and subways. The transportation services run by the private sector function in a fairly competitive atmosphere, and are considered to be efficient. However, these services are greatly limited in their capacity to improve their service because of restrictive price controls. Though government has long been contemplating private sector participation in ports, the same has been put on hold owing to national security concerns.          High Speed Rail projects are administered by the Ministry of Construction and Transportation, while all other railways are run by the Korea National Railroad. South Korea's High Speed Railway project has been one of the most problematic projects and suffers from a serious shortage of finances. South Korea's subway system is managed and operated by the local city governments. The most troublesome case is the Seoul Metropolitan Subway Corporation (SMSC) where tariffs do not cover construction costs, and attempts to adjust tariffs have not been very successful in the past though sustained efforts are being made to make it profitable.          Thus, for developed and developing countries alike, the ability to build a knowledge-based economy depends on their capacity to use the global system of the generation and transmission of knowledge. To develop such a capacity, the following elements are required: 1.      Dynamic information infrastructure to facilitate the effective communication and processing of information; 2.      Educated population that can create and use knowledge; 3.      System of research centres, universities, think tanks, firms and other organizations that can tap into the stock of global knowledge, adapt it to local needs, and create new knowledge; 4.      An economic and institutional regime that provides incentives for the efficient use of existing knowledge, and 5.      The creation of new knowledge and entrepreneurship.               Developing a powerful information infrastructure, therefore, requires the support of the many stakeholders involved in its use such as government, business, individual users, telecommunication and information service providers. They must work together on establishing an information infrastructure strategy that involves identifying the opportunities and needs for a better information and communication system in the economy.              As it appears, South Korea’s emphasis on a balanced regional development with spatio-temporal planning has provided it a rock-solid foundation for its economic growth which has made it join the league of the developed countries. South Korea’s infrastructural development was closely linked to the economic growth plan where the government identified the specific infrastructural needs of various regions and executed the same with greater and better efficiency. The steadfast commitment to high quality infrastructure and to bridge the rural-urban chasm was also based on a sustainable long-term vision. Such a policy was also rooted in a vision to maintain the competiveness in export markets and to support a more balanced developmental framework.          However, one does feel that apart from the meticulous planning, implementation of the national policy and a committed leadership, South Korea does appear to have benefited greatly from the Cold War politics of the post-World War II developments by aligning with the camp led by the United States of America. It not only gained in terms of financial and technological help, but also got to get away with the democratic deficits of its governance system in its formative days. Also, the monolithic character of its society ensured that it did not have much socio-cultural problems to deal with. All this provided South Korea with a head-start which India could not have thought of simply because of the complex and diversified nature of its society and politics and hence, in some respects the two countries do appear incomparable.          Having said this, one does feel that all the developmental strides that South Korea has made in the last few decades and its sterling performance in resolving the existential problems of its people through an imaginative mix of vision and execution are worth emulation. South Korea’s performance in such sectors as mass rapid transport system, solid waste management, ship-building, heavy and chemical industries, information technology, telecommunication, city surveillance system and infrastructure is really commendable and many of these models could be very well replicated in India though the same do have huge financial involvement. One only hopes that India shall learn its lessons from South Korea to ensure a better future for its citizens. *The views expressed here are personal and don’t reflect those of the Government.