Current Status of Borderland Development Project in South Korea
and the Prospect
Woo Gyoung
Department of Real Estate Management, Kimpo CollegeI. Introduction
The military confrontation between North and South Koreas has continued after two sides
reached armistice in 1953, and the borderland in Korea has become the typicalunderdeveloped area as a number of regulations have been imposed in relation to military
operations for 50 or more years. Due to such particularities caused from the division of nation,
the land utilization has been regulated and there has been lack of investment for regional
development in the borderland in South Korea for more than 50 years. As the result, the area
has remained underdeveloped in overall economic sectors not to mention the quality of life of
the residents due to unbalanced growth compared with other regions. The residents undercontinuous control and regulations on their economic activities due to the particularities ofthe borderland have requested for the improvement of various systems and for support inorder to overcome the underdevelopment.
While the underdevelopment in the borderland continued, the exchange between two Koreas
on the government level and in the private sector has steadily expanded, and in the North andSouth Korean Summit Meeting held between President Kim Dae-jung and the Chairman of theNational Defense Commission Kim Jong-il in June 2000, they began to recognize theborderland as the place for revitalizing North and South Korean exchange, the place toprepare reunification, the place to manage, preserve and develop after the reunification
instead of the place of military confrontation between two sides. They also agreed that thearea requires political measures for revitalizing the local economy for the residents of theunderdeveloped borderland which has been bound with regulations for over 50 years.
According to the change of circumstances, the South Korean government established theBorderland Support Act in 2001 which focuses on the enhancement of welfare for theresidentsofthe

borderland,

revitalizing

local

economy,theenvironment-friendly

development, and the establishment of the foundation for exchange and cooperation inrelation to the development of North and South Korean relationship. According to theBorderland Support Act, 98 administrative areas (Eup, Myeon, Dong) are selected based on
the population density, aging index, Gross Regional Domestic Product (GRDP), and theComprehensive Development Plan for the Borderland comprised of 274 projects scheduledfrom 2003 to 2012 was established and has been pushed forward since 2003.
While half of the period scheduled for the Comprehensive Development Plan for theBorderland has passed, there has not been much progress in spite of circumstantial changes
due to the expansion of exchange between North and South Koreas. Under the circumstances,
this study introduces the contents of the Comprehensive Development Plan for the Borderland
which is currently being pushed forward in Korea as well as the progress and issues anddiscusses the development directions. This is the 5th year in the period of the Comprehensive
Development Plan for the Borderland and Korean government is also re-examining the plan
to look for improvements while planning the reorganization of the plan. This study will make aprospect for the development in the borderland in the future according to the actions ofKorean government.

Ⅱ. Borderland Development Plan and Current Status
1. Borderland Development Plan and Project
The borderland development project is a regional development project investing total
5,127.8 billion Won and comprised of 274 projects schedules for 10 years from 2003 to 2012targeting 3 regions including Incheon, Gyeonggi-do, and Gangwon-do. 45.6% of the total
investment will be allocated to Gangwon-do, 47.8% to Gyeonggi-do and 6.6% to Incheon. The
central government budget for 10 years is 2,164.9 billion, the local government budget is1,428.4 billion Won, and 1,534.5 billion Won will be invested from the private sector.
Summary of the Investment Plan for the Borderland Support Project (2003~2012)(Unit: Projects, 100 Million Won)

Division

No. ofDevelopment
ProjectsTotal

Project Investment PlanCentralLocal
Private Sector
Government
Government
Investment
BudgetBudgetTotal

274

51,07821,64914,284

15,345

Incheon

52

3,364

2,036

1,160

168

Gyeonggi-do

41

24,418

9,459

7,146

7,813

Gangwon-do

181

23,296

10,154

5,978

7,364

※ Data : Comprehensive Development Plan for Borderland 2003~2012 (Ministry of Government Affairsand Home Affairs)

The borderland development project is pushed forward in 7 different directions including theSocial Overhead Capital (SOC) construction, forest and environment conservation, industrialand tourism infrastructure development, living environment improvement, the establishmentof the foundation for North and South Korean exchange and the reunification, the excavationof cultural assets and the preservation of cultural heritage, and regional strategic programs.
Considering the expenses, the largest project is the industrial and tourism infrastructuredevelopment, and 42.4% of the total budget, 2,173.1 billion won, will be invested in 10years.29.5% of the total budget will be invested on the living environment improvement
program, and 11.7% will be invested to the regional strategic programs. The largest portionof the central government budget will be invested on the living environment improvement
program which takes 52.4% (1,137.9 billion won) of the total central government budget,

2,164.9 billion won. The central government budget takes relatively large portions in theindustrial

andtourism

infrastructuredevelopment(28.1%),

forestandenvironment

conservation (9.5%) and Social Overhead Capital (SOC) construction (7.0%). On the other
hand, the central government budget takes very low portions in 3 programs including theestablishment of the foundation for North and South Korean exchange and the reunification,
the excavation of cultural assets and the preservation of cultural heritage, and regionalstrategic programs. (The establishment of the foundation for North and South Korean
exchange and the reunification: 2.0% of the total central government budget, the excavationof cultural assets and the preservation of cultural heritage: 0.3%, regional strategic programs:0.6%)

2. Current Progress
Considering the progress in the borderland development project from 2003 to 2006 in eachsection, 66% of the total budget execution plan was invested in the Social Overhead Capital(SOC) construction. Regarding the investment results of each financial resource, the centralgovernment provided 83% of the investment plan, the local government provided 52% and theprivate sector provided 17%, the lowest rate of all.
In the forest and environment conservation section, 18% of the total investment plan was
carried out. The central and local governments showed low investment results as the central
government provided 28% of the investment plan, the local government performed 10%, andthe private sector provided 63% until 2006. In the industrial and tourism infrastructuredevelopment section, 32% of the planned investment was performed until 2006. The centraland local governments showed low investment results as the central government performed
9% of the plan, the local government provided 20%, and the private sector performed 54%.
The Ministry of Government Affairs and Home Affairs is in charge of the living environment
improvement section however it showed only 18% of progress until 2006. The central andlocal governments as well as the private sector showed low investment results as the central
government performed 16% of the plan, the local government performed 26%, and the private
sector performed 1%. Concerning the establishment of the foundation for North and South
Korean exchange and the peaceful reunification which takes 2% of the total investment plan,
the central and local governments as well as the private sector showed low investment
results as the central government provided 1% of the plan, the local government performed
14%, and the private sector performed 0.15%. Also in the excavation of cultural assets andthe preservation of cultural heritage section and the regional strategic programs section, thegovernment and private sector showed very small investment results, 20% and 11% until
2006 respectively.
The year 2007 is the 5th year in the Comprehensive Development Plan for Borderland, andthe progresses show that the underdeveloped regional circumstances have not made much
improvements as the population density remained relative low, the population continued todecrease (excluding some parts of Gyeonggi-do), the aging index is still high, and thefinancial independence is still low and remained at the level (28%) less than half of thenational average (54.2%).

Ⅲ. Issues and Development Directions in the Borderland Support Project
1. Current Status and Issues in the Borderland Support Project1) Need for the Reorganization of the System for Pushing Forward the Borderland Support
Project· Examine current progress and complement the evaluation system· Central and local governments have pushed forward inefficient projects· Central and local governments have pushed forward similar programs redundantly· The Comprehensive Development Plan for the Borderland has to be reorganized withflexibility according to the circumstantial changes2) Continuous Regulations on Borderland and Lack of Basis for Pushing the Project Forward· Continuous regulations on the exercise of private property right including the utilization ofthe land and buildings· Complaints of residents concerning unimproved and coarse living conditions· Development and economic activities are extremely limited due to regulations mostly from
the Military Installation Protection Act· No authority for expropriation of land and so forth for the development of borderland
3) Insufficient Fund Supply System· No separate system for stable fund supply· Central ministries and offices are not supportive of the borderland support program(Difficult to receive subsidies from the government)
4) No System for Supporting Companies inside the Borderland· No system for tax support such as reduction or exemption of tax· No system for supporting business activities of small and medium companies inside theborderland
2. Development Direction1) Establishment of Efficient Promotion System for the Borderland Support Program· Revision of the comprehensive plan and establishment of plans for cities and counties· Elimination of inefficient businesses in each ministry or office· Selection of new business item for establishing a firm system for promoting projects in theborderland

2) Promotion of Development for Each Resource and Each District based on Selection andCentralization· Natural Ecological Resources Development, Facilities Resources Development, Cultural
Assets Development, Human Resources Development
3) Scale of Development Project Concerning Regional Characteristics and Borderland
Characteristics· Determine the scale of regional development project by reflecting the characteristics ofthe borderland· Calculation of the differentiated development scale for the borderland centering on
facilities and characteristics of the location
4) Development of Theme Village Network Reflecting Characteristics of the Borderland· Develop a network of similar theme villages inside the borderland· Disperse specialized villages in order to help the development of neighboring areas5) Development of Support System for the Promotion of the Development· Development of borderland specific resources in connection with experts· Human network between residents and experts· Promotion of borderland support programs led by local residents
6) Relieve Regulations on Utilization of Land inside Military Installation Protection District· Reduce the restricted and protection area in the adjacent land of the Military Demarcation
Line, relieve regulation on entering or leaving the area and develop conditions forresidential settlements· Redesignate significant Military Installation Protection District, improve the consultation
system with the military authorities in relation to the Military Installation Protection District· Remove the Military Installation Protection District in the area with frequent popularcomplaints
7) Provide Basis for Securing Financial Resources for the Borderland Support Programs8) Improve Support System for Companies inside Borderland

Ⅳ. Prospect
Many studies have been made on the borderland as the major subject of interest in theorthodox political geography for postwar dealings after W.W.II. There have been many
functional changes in the borderland near the demilitarized zone of Korea, currently the only

divided nation in the world. In the 1960's, South Korea had given emphasis on developing thenational economy than the reunification or the exchange with North Korea. But in the 1970's,
the North and South Korean exchange began through the demilitarized zone as both sides hadTalks between the South and North Korean Red Cross Societies, led the search campaign forseparated families, had meetings between high-ranking members of the authorities, andbegan North and South Korean Adjustment Committee Meetings. In the 1990's, the North andSouth Korean exchange and cooperation programs began through political approaches as wellas the North Korea support plans of private organizations and private companies. After theKaesong Industrial District was established and the Mt. Geumgangsan tour program began,
the interest in the borderland concerning the use and preservation and the use of the area
after reunification as well as the revitalization of the local economy which has been
underdeveloped due to various regulations.
After the North and South Korean Summit Meeting in June 2006, Korean government
decided to give political support for the borderland which was degraded into anunderdeveloped area due to various regulations imposed in past 50 years. For this, they
established a 10-year plan comprised of 274 projects which starts from 2003 and has beenpushing forward the plan however there has not been much progress due to lack of thesystem for pushing forward the borderland support program, programs with low effectiveness,
redundancy of programs, continuous regulations on areas neighboring the borderland, andlack of financial resources for the project.
The Comprehensive Development Plan for the Borderland started in 2003 however there
has not been much progress while half of the scheduled period has passed. This study hopesthat the local economy of the borderland is substantially revitalized in 5 years in the future byidentifying the reasons for the poor progress and establishing and executing countermeasures.
For this, it is necessary to reorganize the project supervision system which has become
problematic in the borderland support system, restructure the programs that are redundant orless effective, select programs suitable for the characteristics of the borderland, andreexamine the plan. This is the 5th year of the Comprehensive Development Plan for theBorderland, and the Ministry of Government Affairs and Home Affairs is reexamining the planon the whole and is planning to entirely reorganize the strategy, system and programs. The
Second North and South Korean Summit Meeting will be held in October this year. This study
hopes that the underdeveloped economy of the borderland is revitalized in the coming 5 years
through effective plans after the Second North and South Korean Summit Meeting and thereorganization of the Comprehensive Development Plan for the Borderland.