Korean Puts US Twist on a Land Apart

An activist, American-educated governor works to turn his neglected province into an economic powerhouse

When You Jeong-keun gave up his American citizenship and returned to South Korea after 24 years away from his homeland, he had grand plans for his home province, North Cholla.

He wanted to right decades of economic discrimination and turn the province - a backward and underdeveloped region of 2 million people - into a thriving economic powerhouse. To start, Mr. You got himself elected governor.

From his new post, Governor You is pushing North Cholla to catch up with other areas favored by past rulers of South Korea, whose policies of uneven development spawned political parties that were defined by geography rather than ideology. Up against a democratic central government that still conducts its business in the same way, You is luring international investment to his province in the hopes of developing it.

His moment of inspiration came in high school after hearing the story of Alfred Marshall. The former British ethics professor, strolling through a London slum, decided that the practical discipline of economics, not ethics, was the way to help people.

South Korea was still recovering from the Korean War when You heard Marshall's story in 1960. At that time South Korea had a per capita annual income of $82, less than India's. You followed in Marshall's footsteps and studied economics, earning a doctorate in economics from the State University of New York in Binghamton. He stayed in America to teach at Rutgers University in New Jersey and was an adviser to three of the state's governors. Starting in 1984, he began spending a third of his year in South Korea, and a decade later, returned there permanently.

And although it now seems that South Korea doesn't need his skills anymore (per capita income now exceeds $10,000) his province still lags behind.

As the country developed in the years following the Korean War, the military rulers presiding over South Korea's economic miracle poured money into their hometown regions - Kyongsang and Taegu in the southeast - while North Cholla, home to the opposition pro-democracy movement, languished.

While some say the division of the country can be traced hundreds of years back to when the peninsula was three separate kingdoms, the roots of today's regionalism go back only a few decades.

In 1963, two years after his coup, Gen. Park Chung Hee won a free election by only 150,000 votes nationally, but took North Cholla Province by 300,000 votes. When he nearly lost a rigged election in 1971 to Kim Dae Jung of South Cholla Province, Mr. Park became worried about his grip on power and appealed to the people of his home region for their support in exchange for his. It was then, observers say, that he began ignoring the people of Cholla, who had supported him a decade earlier.

Regionalism festered, and was even cultivated by the ruling party. "It was a case of divide and conquer," says You in an interview, adding, "We used to be one of the wealthier provinces before industrialization."

Economic discrimination became cultural as well. Although things are slowly changing, Chollans complain of hiring discrimination by non-Cholla-based companies. Some South Koreans don't want to marry people from Cholla. On TV, devious and socially low characters speak with a Cholla accent.

After government troops massacred hundreds in a 1980 pro-democracy demonstration in Kwangju, South Cholla, the distrust between Chollans and the rest of the country intensified.

The rumor, says Lew Seok-Choon, was "that [the troops] were Kyongsang people, and they came to Kwangju to kill Cholla people." Opposition leader Kim Dae Jung "became a symbol of the oppressed," says Professor Lew, who teaches sociology at Yonsei University in Seoul.

All this seems remarkable in a country slightly larger than the size of Indiana, known for its nationalism and homogeneity.

"When I went to the US in 1970, I never realized [that coming from Cholla] was such a disadvantage," You says. Undaunted, Governor You jokingly tells his American friends that he is "well prepared for the task [of being governor] because I spent 21 years in New Jersey - a state that has an identity problem."

As a bowing assistant follows him with a portable phone, he confidently talks about industrial zones and infrastructure projects he hopes to see built.

The quest has sent him around the world: to Osaka, Japan, to set up a center promoting agricultural products from Cholla; to Kaliningrad, Russia, to look for economic cooperation; and to the US to make a pitch to investors.

Governing: American style

At home, You holds an annual "town meeting" in each of North Cholla's 18 counties. The governor imported the tradition from the US, aiming to make sure he's addressing the needs of his people. Questions are recorded and follow-up postcards are sent to citizens informing them of what action has been taken. Not surprisingly, he's been popular.

But getting development money is hard if one is underrepresented in South Korea's powerful central government. According to You, South Korea's first civilian president, Kim Young Sam, a native of Kyongsang, isn't doing much better than his predecessors to heal regional divides. "If one examines major appointments by Kim Young Sam," You says, key seats are filled by members of the president's high school alma mater.

The social networking made during high school is crucial in South Korea. Well over 100 Cabinet ministers have come from former President Park's high school in Pusan. Since 1961, You's high school in North Cholla, has produced only one Cabinet minister.

You says he must make twice as many visits to central ministries as other provincial governors to get funds in the central government budget allocated to his province. But he acknowledges that Seoul has initiated many of the projects he is pushing. But they materialize slowly - a second train line down the west coast has yet to be completed after decades of work, according to You.

While he must seek the central government's cooperation for building infrastructure, he isn't waiting for local investments alone to fill North Cholla's industrial zones.

Tammi Overby, executive director of the American Chamber of Commerce in Seoul, says a number of member companies are considering investing in North Cholla. "Of all the provinces [we've dealt with] he and his staff seem to be the most helpful in dealing with the American business community," she says.

You, who took office last year, won't have a hard time selling North Cholla to investors. Now that the area around Kyongsang-Taegu and the area around Seoul are saturated with industry, companies wishing to set up factories in South Korea have little choice but to build them on the west coast. Also, wages in Cholla are 5 to 10 percent lower than in the rest of the country. With the provincial government rolling out the red carpet, and the huge China market just across the Yellow Sea, it isn't a bad deal.

Things are looking up

Daewoo, a South Korean conglomerate, recently set up an auto factory in North Cholla. One company official says "It is very cost- effective and promising" and adds that it is in line with the central government's recent policy of fixing the unbalanced national development - one of President Kim Young Sam's election promises.

Things were looking up even before the activist governor came into office: Exports have tripled in the last four years, while imports increased 60 percent. Hyundai also has invested in plants, and the population of North Cholla, which had been shrinking since 1960, grew in 1995. Partly on account of its underdevelopment, the province now is the most rapidly developing area of the country.

Governor You may not be the only one frustrated by Seoul, which has only recently initiated local autonomy laws to promote democracy and economic development. Observers say local governance has a long way to go.

Just 10 percent of tax revenue is in the hands of local governments. "It's not just Governor You," says Yim Yong Soon, a professor of political science at Sungkyunkwan University in Seoul. "Every one of these governors has to get money."

North Cholla cannot provide special tax breaks or incentives compared with other provinces because any such incentives are strictly limited by the central government. But North Cholla officials say they are devoted to "getting things done" and offer "low-priced, quality land, and well-organized administrative support."

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