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A new perspective in spatial policy: Globalization

Decentralization policy

Growth management and the decentralization of Seoul have been the most enduring government policies pursued consistently since the early 1960s. In 1964, the government announced metropolitan population growth prevention measures to curtail in-migrants to the large metropolitan areas, particularly Seoul and Pusan. Retrospectively, the population in Seoul in the early 1960s was barely one-quarter of the size of the current population.

The objectives of the government policy advocated in the early 1960s were not much different from those of the 1970s and 1980s. However, many argue that the government's real objectives in pursuing growth control and population dispersal in Seoul were for reasons of national security. Under the military threat from North Korea, President Park Chung Hee was seriously considering constructing a new capital city further south in the area near Taejeon. Thus, it is conceivable that the growth control policy in the 1960s and 1970s was essentially aimed at serving national security objectives.

Since then, the government has announced a series of policy measures to control the growth of Seoul and the Capital region, including the Population Dispersal Plan for Seoul (1975), the Population Redistribution Plan for Capital Region (1977), the Restriction on Construction of Public and Large Buildings in the Capital Region (1982), and the Capital Region Readjustment Plan (1984). In addition, there have been two National Land Development Plans during the period 1972-1992 emphasizing the decentralization of Seoul and the Capital region and regional balance.

To achieve its policy objectives, the government relied heavily on regulations to restrict the construction of new facilities in the Capital region and to relocate certain activities from Seoul. In addition, under the Capital Region Readjustment Plan, the Capital region was divided into five zones within which activities are controlled with varying degrees of land-use restrictions. There are restrictions on "population-generating activities" in these five areas. For example, construction of new college campuses has been prohibited in all five zones, with one exception, while the numbers of student enrolments in the region are also strictly regulated by the government. The five areas are the Relocation Promotion Area, the Development Promotion Area, the Growth Management Area, the Environment Preservation Area, and the Development Reservation Area (see fig. 5.6). The restrictions on various activities in each zone are summarized in table 5.16.

Revisions to the decentralization policy

According to one estimate, in 1989 about 59 per cent of the factories in the Capital region were operating illegally. There are small firms engaged in activities different from their official operating permits. Despite the government's efforts to decentralize large metropolitan areas, specifically Seoul, there is evidence that agglomeration economies in Seoul and large metropolitan areas are still significant, favouring those industries located in Seoul (Hong, 1986).

Fig. 5.6 The Capital region and the five strategic areas

The decentralization policy, which relies heavily on direct regulatory measures, has not proved very successful during the past 30 years. The results of the very restrictive Capital Region Readjustment Plan have also been less than satisfactory. Population growth in the Relocation Promotion and Growth Management areas has been twice as fast as the national average (see table 5.17). Agglomeration economies in Seoul and the importance of the Korean tradition of face-to-face contact in various activities seemed to outweigh the planners' idealism and the government's regulations.

Table 5.16 Restrictions on activities in the five zones of the Capital region




Relocation Promotion

Growth Management

Development Promotion

Environment Preservation

Development Reservation

College: New X X + X X
Expansion + + + + +
Teaching institution + O O O O
Factory X X + + +
Public office + + + X X
Business and shopping complex + + + X X
Training facility X X + X X
Residential development + + O + +

Source: Ministry of Construction. X: not permitted; +: partial permit with review; O: permitted

Table 5.17 The annual population growth rate of South Korea and the Capital region, 1970-1990 (%)



South Korea

Capital region

Relocation Promotion

Growth Management

Development Promotion

Environment Preservation

Development Reservation

1970-75 2.3 4.5 4.7 8.9 1.7 -0.9 -0.9
1975-80 1.5 3.9 2.8 7.3 0.1 -0.1 -0.8
1980-85 1.5 3.5 2.9 6.6 0.1 0.7 -0.2
1985-90 1.5 3.2 2.2 6.6 1.4 1.0 0.1

Source: Economic Planning Board, Population and Housing Census, 1970-1990.

Recently, some of these restrictive measures have been reluctantly revised by the government. During the period 1990-1991, more than half of the manufacturing activities in the Capital region without operation permits were legalized. The number of categories of manufacturing allowed in urban areas was expanded from 17 industrial sectors in 1977 to 190 sectors in 1990. The restrictions on small-scale operations were lifted by raising the size of operation from 5 to 16 employees or more. In addition, the ceilings on college students in the Capital region have been relaxed to allow an increase of 2,000 students a year during the five years starting 1992.

New town development and balanced growth

In the late 1980s, the positions of the government and planners gave in to development pressure arising from the housing shortage. Following the development of the Green Zone in Kaepo, Koduk, Mokdong, and Madeul plain on the outskirts of Seoul, five large-scale new town development projects are planned for the vicinity of Seoul. They are Bundang, Pyungchon, and Sanbon to the south of Seoul and Ilsan and Joongdong to the west (see fig. 5.6). The total population of the five new towns is expected to reach 1.2 million, with a total area of 294 km2.

These new towns will all be within 20 km and one hour's commuting distance from the central business district of Seoul. Accessibility to Seoul from the new satellite cities will be improved by the construction of an intraregional transportation network. A mass transit system will be established between Seoul and the satellite cities by means of an electrified rail system.

Unlike the existing satellite cities, which are oriented towards industrial development, the new towns will be inclined towards tertiary industries. According to the government blueprint, Ilsan, located near to Kimpo Airport, for example, is planned to house international business and hotels with European-style residential developments. Many have reservations about the effectiveness of this ambitious housing construction project in improving housing conditions for the poor and homeless, while some government economists assert that the new town projects are mainly responsible for lowering the price of housing in 1991 and 1992 in Seoul. However, the real controversy lies in the fact that the new housing stocks in the Seoul metropolitan area could serve as a reservoir for people and economic activities still willing to move into the area. Thus, this new town policy seems to be a departure from the policy of decentralization and growth control in Seoul.

The new town development would appear to be a frontal blow to the long-standing philosophy of many Korean planners. However, as mentioned earlier, under the great force of the market mechanism and economies of agglomeration, Seoul and the Capital region attract the bulk of economic activities and migrants from the rural areas. Housing conditions in Seoul, especially for squatters in the romantically nicknamed Moon Village (Daldongnae), have become a social issue and a serious political liability. With planners still trying to decide how to reconcile spatial balance and the effectiveness of "oversized" major metropolitan regions, political needs seem to have prevailed in constructing new towns in Seoul metropolitan area. The new town development controversy, thus, continues.

Spatial policy in globalization

In the midst of globalization, South Korean industry is in the process of restructuring. The South Korean economy faces harsh competition in world markets. The price competitiveness of Korean manufacturing products has been sliding with rapid wage increases in recent years. The competitive advantages in labour-intensive, standardized mass production lines have been snatched by the newly industrializing labour-abundant countries, particularly South-East Asian countries and China. Domestically, the policies of balanced regional growth and decentralization remain as the untarnished goal of many planners. However, the overwhelming power of agglomeration in Seoul and the Capital region, channelled through the market mechanism, may have been eloquently demonstrated in Seoul and the Capital region.

The disparity between the target and the actual growth in Seoul and the Capital region has also contributed to creating severe bottlenecks in various infrastructure and housing projects. The high cost of living, housing costs in particular, in Seoul and the Capital region seems to lead the increases in general wages and prices and, thus, the production costs of the nation.

To revitalize Seoul and the Capital region, redirection of the policy from growth control seems inevitable. The goal of regional balance should still be pursued, but the policy should be in the form of indirect economic measures encouraging regional growth in the provincial areas. The economies of agglomeration of Seoul and the Capital region should be maintained as long as feasible to support industry's competitiveness in world markets. At the same time, regional balance should be pursued in the form of decentralized concentration by encouraging the growth of large cities, rather than forcibly dispersing growth from Seoul to the backward regions. The global functions of Seoul need to be developed further so that it can serve as a gateway to the world for South Korea and play a global role to match that of the global cities of the world.


Globalization is the reality of the 1990s. In the coming years, many nations will go through industrial restructuring to accommodate a new international division of labour. In consequence, there will be a large increase in international trade and in cross-border movements of labour and machinery, FDI, and other forms of international cooperation. After two decades of compressed economic growth, the comparative competitiveness of South Korean industries is being contested in world markets. During the past few years of democratization, labour costs increased far more rapidly than in Taiwan, Singapore, and Hong Kong. On the other hand, South Korean industries are lagging behind in technological development to offset the wage hike. Major South Korean export sectors, such as textiles and consumer electrics, are losing their competitive edge to China and the ASEAN countries. After a short-lived trade surplus in the three years 1986-1989, the trade deficit exceeded US$10 billion in 1991. In these circumstances, South Korean companies are forced to search for new areas of investment (FDI) and trade partners abroad.

The growth of Seoul and the Capital region has been regarded as resulting from the compressed economic growth of the nation. The government initiated the decentralization policy for Seoul and the Capital region in the early 1960s. In spite of restrictive policy measures, population and industrial activities in the region have been growing. The economies of agglomeration in Seoul and the Capital region continue to attract various industries including producer services and high-tech and information-oriented industries.

A world city is characterized by the competitiveness of its residents. The global competitiveness of the residents makes the city global. Therefore, a global city is one with "environments" favouring the competitiveness of the residents. With Seoul's stringent regulations to control metropolitan growth, bottlenecks are created in transportation, housing supply, and other infrastructures. The quality of life has been deteriorating, especially as regards air and water pollution and severe traffic congestion. For the nation's competitiveness, the residents of Seoul should be competitive in world markets. Therefore, it is necessary to revitalize the "environments" of Seoul by modifying the spatial policy of growth control in Seoul and the Capital region.

In relation to its city size and the export orientation of the national economy, the city of Seoul is relatively deficient in terms of its international activities. But some new factors are likely to change the role of Seoul in the world system. First, South Korea became a member nation in the United Nations, along with North Korea, in October 1991. South Korea will thus participate more widely in UN-related activities. Seoul will house most of these activities and their office space. With the liberalization of services under United Nations agreements, an influx of various service activities is expected from the advanced nations, especially in producer services such as banking, insurance, communications, and professional services. With the increasing trend towards regional cooperation in the Pacific Asian countries, Seoul will become a major centre of regional cooperation in the Far East.

The long-standing government policy of decentralization for the Seoul-Capital region has obviously been ineffective in controlling the further agglomeration of Seoul. Although the signs of a population "J" turn from the region have very recently been detected, especially in manufacturing activities, the concentration of producer services and information in Seoul is increasing. At the same time, Seoul's role as a central city is increasing.

The restructuring of various spatial policies seems to be inevitable. The new emphasis of planning in Seoul and the Capital region should be on restructuring the functions of the area more efficiently. With globalization, the management of the growth of the region became important. Therefore, the growth control policy in Seoul and the Capital region should be coupled with growth management to enhance the efficiency of the spatial system of the region and the government's efforts to develop large cities in the provincial areas.


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Globalization and the urban system in Taiwan

The nature and development trend of the national urban system
Structural change
The spatial dimension of economic structural change
The international dimension of the urban system
The impact of globalization on the mega-city of Taipei
Policies and policy implications

H. H. Tsai


There has been a close association between the growth of exports and urbanization in Taiwan, because export growth has stimulated industrialization, and industrialization has spurred further urbanization and the formation of a national urban system.

Taiwan is endowed with only a small amount of land and limited natural resources. Nevertheless, the island has achieved an economic miracle that is widely admired. During the past four decades, the government has adopted a variety of policies and strategies to promote Taiwan's economic development. In the years immediately following the retrocession of Taiwan to the Republic of China, the government wisely channelled US aid to investments that provided the basis for further development and helped stimulate the growth of agriculture. Support from agriculture fostered the take-off of industry, which, in turn, provided positive feedback to agriculture. Within a relatively short time Taiwan had an agricultural surplus to sell abroad. Strategies for the development of labour-intensive import-substituting industries and the establishment of export-oriented industries were later introduced to promote industrialization. Rapid industrialization, in turn, has been the driving force behind urbanization and urban growth.

According to the cumulative causation concept proposed by Jaffe (Jaffe and Stewart, 1951), "As commercial and manufacturing activities greatly expand, it becomes necessary for a much larger proportion of the population to assemble in large aggregations in cities, for only in that way can these activities be carried on efficiently. The large-scale growth of urban centres, in turn, is one of the elements that affect the rate of population growth." In Taiwan's case, a city tends to develop wherever an export-oriented industry is located.

The liberalization of world trade since the late 1950s has stimulated demand for exports manufactured in Taiwan. This helped Taiwan gain a foothold in world markets, making export-oriented industries the engine of Taiwan's industrialization. Furthermore, technology can be transferred easily, either by technical cooperation with foreign companies or through overseas investment. Such transfers have been another source of Taiwan's industrialization. Both export-oriented and technology-intensive industries are urban oriented and have created job opportunities in urban areas.

Population has thus been attracted to the cities, speeding the process of urbanization. In addition, overseas capital has flowed into urban infrastructure, housing, power, and transportation. Urban living conditions have been improved and living standards raised, further augmenting the growth of cities.

This chapter first presents a brief sketch of the national urban system in Taiwan, and then describes the macro-structural change in population and employment. It then examines the spatial dimension of economic structural change and the international dimension of the national urban system. An analysis of the impact of globalization on the mega-city of Taipei and its policy implications is also provided.

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