The projects that the Moon Jae-in administration has pushed through without preliminary feasibility studies since it was launched in 2017 cost about 88 trillion won ($79.5 billion) total, according to data from the Ministry of Economy and Finance.
The figure exceeds the 84 trillion won combined cost of all the projects exempted from feasibility surveys by the two previous administrations under Presidents Lee Myung-bak and Park Geun-hye.
In 2015, projects exempted from feasibility studies collectively cost 1.4 trillion won, but this figure jumped to 17.6 trillion in the first year of the Moon administration, followed by 12.9 trillion won in 2018, 36 trillion won in 2019 and 21.6 trillion won in 2020.
In the first two years of Moon’s tenure, children’s allowance and job subsidy programs accounted for the lion’s share of projects exempted from assessments of their economic validity. Then the government began to expand social overhead capital rapidly -- for example, by laying new railroads, including one built along the northeast coast last year as part of a project to revive exchanges and cooperation with North Korea.
To crown all that, on Nov. 26 the ruling Democratic Party of Korea proposed a bill to enact a special law to exempt a large project to build a new airport on Gadeokdo, an island belonging to Busan. This project is expected to cost more than 10 trillion won.
Gadeokdo was the last of three candidate sites in South Gyeongsang Province -- behind Gimhae and Miryang -- when a project to build a hub airport in the southeastern region was evaluated in 2016. Nevertheless, the party is pushing to build an airport there with the intent of winning over voters in the Busan mayoral by-election in April.
As residents in Daegu and North Gyeongsang Province reacted against the Gaedeokdo airport project, and citizens in Gwangju complained of inequity, the party is looking to enact similar legislation for projects to build new airports in Daegu and Gwangju.
If the airport projects kick off next year, the Moon Jae-in administration will likely be the first government to exempt more than 100 trillion won worth of projects from feasibility studies.
And yet the party and the government do not seem satisfied with that. Instead they seek alter the cutoff point and pave the way for more exemptions.
The national finance law calls for a preliminary feasibility review of projects costing more than 50 billion won in total and requiring more than 30 billion won in central government funds. The party and the government are considering raising those amounts to 100 billion won and 50 billion won, respectively. If they revise the law, an increase in the number of projects to be carried out without feasibility checks will be inevitable.
The construction industry has shrunk much lately, but it still accounts for 8.1 percent of the nation’s gross domestic product and 7.5 percent of employment. It is problematic to use the industry only as a means of stimulus, but be that as it may, there is no reason to disparage its economic contributions.
Moon and the Democratic Party condemned the Lee administration’s signature four-river refurbishment project, stigmatizing it as one of the government’s “evils.”
On his campaign trail, Moon pledged not to carry out civil engineering works. Then once his side seized power, they vowed to pour government money into public works while touting “balanced national development” and “regional New Deals.” This is a double standard.
The ruling party does not care about criticism that exempting projects from feasibility studies is effectively vote-buying. The party may think that voters are more likely to favor a project for them if it costs more. Attempts to win votes will get wilder as the by-elections for Seoul and Busan mayors draw near.
A feasibility study is the minimum safeguard to prevent a waste of tax revenue on an uneconomical project. The result of carrying out costly, economically infeasible projects is debt to be paid by future generations. The ruling party and the government must stop their pork barrel politics.
