Chapter 405 |
The National Assembly Broadcasting Corporation was live-streaming the economic hearing.
Until Deputy Prime Minister of Economy Jeong Ki-soo and Chief of Policy Lee Eung-gwan appeared, the viewership ratings weren't particularly high. Most people would catch a glimpse on the evening news; how many would watch it in real-time?
However, as soon as Kang Jin-hoo appeared, the National Assembly Broadcasting's ratings suddenly began to skyrocket. Public broadcasters also aired related content, and internet news outlets continuously released breaking news about his statements.
The Parents' Association, camped out in Gwanghwamun Square, office workers on their breaks, people waiting for trains in the Seoul Station concourse—everyone was glued to their TVs.
The internet reaction was also fiery.
- LOL, he's a real problem-solver for his district.
- Look at the MPs from his own party flip-flopping ^^
- Ah! This is epic! So entertaining!
- Whenever Kang Jin-hoo shows up, the National Assembly Broadcast turns into an entertainment show LOL.
- But why are they even having this hearing? If South Korea's advanced industries develop, doesn't everyone benefit?
- If they said they'd make such investments in other countries, the government and the National Assembly would have pushed it hard.
- This is Hell Joseon, after all.
- Our Representative Ma Sang-tae seems to be in a comatose state again ㅜㅜ
- Who's up next?
- When is Yeon-kazaki coming on? I want to see Yeon-kazaki and Kang Jin-hoo face off.
- Traitor vs. Patriot LOL
- They keep calling her a traitor or a home-grown Japanese collaborator, but Representative Yeon Nakyeong is a true patriot!
- I agree with the comment above. It should be 'Japanese Patriot vs. Korean Patriot.'
***
The hearing was briefly suspended due to the commotion.
I received a warning to watch my words and sat down. Next, Representative Cho Jae-hoon of the Liberty Korea Party launched his offensive.
"The supplementary budget requested by the government includes the construction of the Saemangeum International Airport. However, according to this report, Saemangeum International Airport has low business viability. The government is pushing ahead with construction without even conducting a preliminary feasibility study, which is an act that overturns principles. Which citizen would find this acceptable?"
Surprisingly, it was a valid point.
There's nothing like SOC (Social Overhead Capital) projects to temporarily boost growth rates. That's why both central and local governments are so fond of civil engineering projects.
If an SOC project is truly necessary, there’s no problem. However, if it results in roads or facilities with few users, construction costs are spent, and maintenance costs continue to be incurred.
Since such incidents are rampant, a preliminary feasibility study must be conducted before SOC projects to ensure only essential ones proceed, but the government waived this requirement.
Even now, many believe that building an airport in Saemangeum is a waste of taxpayer money. However, since I stepped in, the situation has changed.
"Disneyland, Universal Studios, and integrated resorts have already been confirmed. If businesses and factories are established here as well, Saemangeum International Airport will become the next busiest airport after Incheon, Gimpo, and Jeju airports."
Representative Cho Jae-hoon pressed, "How can we believe that? Other SOC projects also initially presented rosy outlooks. But what happened after they were actually built? A preliminary feasibility study must be conducted immediately! Muan Airport alone incurs an annual deficit of over 10 billion won. So what will happen if Saemangeum International Airport is built here as well? If an annual deficit of tens of billions of won occurs, it will once again have to be covered by the people's hard-earned taxes. Who will take responsibility for this?"
I replied simply, "OTK Company will take responsibility."
At my words, Representative Cho Jae-hoon was flustered.
"Wha-what did you say?"
"I said OTK Company will take responsibility."
"Uh, no, how will you take responsibility?"
"We will implement a Minimum Revenue Guarantee. If Saemangeum International Airport incurs a deficit, OTK Company will cover that deficit amount."
“……”
Not just Representative Cho Jae-hoon, but everyone in the hearing room looked dumbfounded.
Minimum Revenue Guarantee (MRG).
Originally, MRG is a system implemented by the government to compensate private capital for losses when undertaking SOC projects as private investment ventures. But here I was, proposing that private capital would provide an MRG for a government project.
I said, as if to drive the point home, "We will apply the same to Saemangeum Port. This way, there will be absolutely no additional burden on the taxpayers' money. Then there shouldn't be a problem, right?"
"Uh, no, I mean..."
Unable to find a counter-argument, Representative Cho Jae-hoon unnecessarily lowered his voice and said, "I-I will keep watching!"
I nodded.
"Yes. Please do."
“……”
***
Representative Lee Jung-hye scowled at me.
We had a connection, if you could call it that, but she was someone I didn't particularly want to face. This was probably mutual.
Indeed, just facing each other was uncomfortable.
"To prevent environmental destruction, reckless national land development, and excessive allocation of the SOC budget to specific regions, the development speed must be controlled."
"Does 'controlling the speed' mean to do it faster?"
Representative Lee Jung-hye snapped, "It means to do it slowly!"
I retorted, "Even if construction starts immediately, it will take at least three years for the first batch of companies to move in, and five years for a significant population influx. If we talk about controlling the speed, would companies even want to invest?"
"So you're saying you'll push ahead recklessly without considering the adverse effects on the Seoul metropolitan area?"
"What adverse effects does Saemangeum development actually have on the Seoul metropolitan area?"
Representative Lee Jung-hye raised her voice. "Population and businesses could leave, couldn't they?"
"Honorable Member, wasn't it just last month that you criticized the government, saying measures must be taken to resolve the concentration in the metropolitan area and allow regional development? Why are you saying something completely different now?"
"Uh, no, that's..."
"So, are you saying we should completely abandon Saemangeum development, considering the adverse effects on the metropolitan area?"
"You shouldn't put it that way. To be clear, I'm not opposing Saemangeum development itself. It's just that other regions shouldn't suffer damage. That's why I'm talking about speed control."
She was beating around the bush, but what she ultimately wanted to say was simple.
In a word...
"Are you referring to falling Seoul housing prices as this 'damage'?"
Representative Lee Jung-hye did not deny it.
"For homeowners, that house is their entire fortune, their entire fortune!"
She was right.
While in other countries the proportion of real estate in household assets doesn't exceed 60 percent, in Korea it exceeds 80 percent.
If total household assets amount to 500 million won, the house is worth over 400 million, while cash and stocks are less than 100 million. With most household assets tied up in real estate, the entire nation is bound to be sensitive to property prices.
Indeed, who would be happy if their own house price fell?
There's a term called 'Externality.' It refers to a situation where an economic agent's activity generates benefits or costs for a third party.
Among various commodities, real estate, in particular, generates significant externalities.
"Honorable Member, what do you think is Korea's most serious problem right now?"
Representative Lee Jung-hye was flustered by my question.
"Excuse me?"
"It's the birth rate. Korea's current birth rate is less than one child per woman. While it's natural for birth rates to fall as countries become more developed, even considering that, Korea's situation is severe. Rapid aging and population decline are already becoming a reality. If the current trend continues, in 50 years, Korea's productive population will decrease from the current 37.5 million to 18 million, less than half."
Representative Lee Jung-hye bellowed, "Hey, we're talking about housing prices now, why bring that up?"
"I'm bringing it up precisely because we're talking about housing prices. A noteworthy fact is that if you look at statistics for married couples only, the birth rate is two. Meaning, if they marry, they have two children. But young people these days aren't getting married. What's the reason?"
What indeed could be the reason? A sudden increase in celibates and those choosing not to marry?
Well, that might be part of it, but the biggest reason is...
"It's because they don't have money. The largest portion of marriage expenses is housing. You need a place to live to get married, and you need to be married to have children. Since they can't afford a house, they don't get married, and since they don't get married, they don't have children. In fact, areas with falling homeownership rates have low birth rates, while new towns and other areas with high homeownership rates see higher birth rates."
No matter how much the older generation says, 'In our day, we started with a single rented room,' as long as the housing price problem isn't solved, recovering the birth rate is impossible.
"The government has invested tens of trillions of won to raise the falling birth rate, but it hasn't seen significant effects. To have and raise children, stable jobs and housing are needed, not temporary support. Saemangeum New City can solve both of these at once by providing quality jobs and housing."
I thought she would be persuaded by this point, but Representative Lee Jung-hye raised her voice even louder.
"Anyway, what are you going to do about the losses for homeowners in the metropolitan area?"
I shrugged.
"How can I do anything about that? People who own dozens of houses in Seoul or those who bought land in planned development areas in advance wouldn't listen to me anyway, no matter what I say."
It's not like I could compensate for falling house prices either.
I suddenly said, as if an idea had just struck me, "Ah! Come to think of it, Representative Lee Jung-hye, you're a multiple homeowner, aren't you?"
Representative Lee Jung-hye was startled.
"Uh, no, why are you bringing that up here? This is where I ask the questions! Representative, please only answer the questions asked."
I pretended not to hear her and continued, "Between your name and your husband's, you own 11 properties in Seocho-gu, 2 in Gangnam-gu, and 1 each in Songpa-gu and Gwangjin-gu. A total of 15. Aren't you perhaps doing this because you're worried your property values will fall?"
As if I’d struck a nerve, Representative Lee Jung-hye pointed her finger and screamed, "Shut up! Shut up!"
***
After several more representatives had their turn, Representative Yeon Nakyeong finally appeared.
Representative Lee Jung-hye, once a presidential candidate, had been pushed out of party leadership due to her election defeat and the weakening of the pro-Park Si-hyeong faction within the party. It was then that Representative Yeon Nakyeong, with the support of the non-Park faction, seized control of the party.
As the leader of the Liberty Korea Party, she made various moves, and thanks to that, the ruling party's approval ratings rose significantly. Consequently, ruling party supporters are said to be secretly hoping she remains the leader of the Liberty Korea Party.
Representative Yeon Nakyeong said, looking at her documents, "You've requested to purchase Saemangeum land."
"That's right."
"For what purpose are you trying to buy it?"
"For business activities. It's land for OTK Company's headquarters, subsidiaries, factories, research institutes, and so on."
The office land I was acquiring would become the very heart of Saemangeum if the development proved successful. Like the center of Gangnam in Seoul, perhaps?
Representative Yeon Nakyeong's eyes glinted like a hawk spotting prey.
"Are you planning to speculate on land before even starting development?"
"It's not speculation; it's driven by necessity."
"All Saemangeum land was created with taxpayers' money. So, if taking it at a bargain price, not even covering the development costs, isn't speculation, then what is?"
I had already anticipated such criticism.
"Establishing a company in a barren field is like creating an oasis in a desert. If an oasis appears, a village can form around it. If companies move into land sold cheaply and the area is revitalized, the value of the remaining land will skyrocket, hundreds of times its current worth. This will be a great benefit to the nation."
Attracting companies by first offering land cheaply and then selling residential or commercial facilities at high prices is a common method in new city development. If they charged the full price from the beginning, which company would want to come?
"Saemangeum land is limited. If OTK Company takes a large portion of the land, doesn't that mean other companies will have less opportunity to move in?"
I said, dumbfounded, "There's so much surplus land right now that they're planning to install solar panels on ten percent of the total area."
Because company move-ins had been so sluggish, the government recently announced a plan to turn Saemangeum into a solar power complex—a project involving a staggering 570 billion won from the government budget and 10 trillion won from private capital.
For reference, solar power has a very low energy generation density. The electricity produced this way wouldn't even match that of a single TWR. It's truly an idea that could only arise from an abundance of land and money.
Fortunately, this plan was canceled when I joined hands with the Saemangeum Development and Investment Agency.
Representative Yeon Nakyeong pressed relentlessly, "In any case, OTK Company stands to make enormous profits from Saemangeum, which was developed with taxpayers' money, doesn't it? You embarked on this development for the development profits, yes or no?"
The reason I was trying to develop Saemangeum New City was because I had seen a premonition. If not for that, I wouldn't have bothered with such a troublesome endeavor.
Separately, it was also true that it was profitable. If the development proceeded as planned, OTK Company's profits would reach tens of trillions of won.
But if I said that outright, she would cling to it endlessly, wouldn't she?
So, in times like these...
"It's because of patriotism."
As if it were a completely unexpected answer, Representative Yeon Nakyeong was flustered.
"Excuse me?"
"I said it's because of patriotism. A purely innocent heart that loves the country."
Representative Yeon Nakyeong shouted, incredulous, "No, since when on earth have you been patriotic!? You're doing all this to make money. Who doesn't know that!?"
Indeed.
I, too, wondered since when I had become so patriotic. But a person doesn't always need to be truthful.
"It's a misunderstanding. I am trying to develop Saemangeum solely out of patriotism and love for our people, for the sake of the country and its citizens."
Representative Yeon Nakyeong continued to shout, "Lies! That's a blatant lie!"
Did that matter?
I continued without changing my expression, "Why is it a lie for a Korean to love Korea? This is perfectly natural. That's why I didn't attend the JSDF founding anniversary event. On this occasion, Honorable Member, how about you try cultivating some patriotism?"
Representative Yeon Nakyeong's eyes widened in fury.
"Wha-what did you say!?"