Interesting article on the ambitious dream that is New Songdo City in Japan Focus. You know, the city that is being built from the ground-up on reclaimed land from the sea and trumped to be the next Dubai or Shanghai?
In this worldwide recession, building a new city from the ground up has been tough, but looks like the ball will keep rolling:
But problems or not, Songdo will keep going, [Mo Jongryn, a professor at Seoul’s Yonsei University] insists. “The government is in a big bind, and can’t pull out of the project. Once you start something this big it is unstoppable. Billions have been invested. If you stop at one-third, the money is lost and the people who are already there will be angry. You have to go all the way.”
A positive article on Songdo. Some recent negative news on Songdo. Looks like they at least have the bridge done.
{ 31 comments… read them below or add one }
The money’s already spent, or lost. It’s called “sunk cost.” The only further value by throwing more money at a physical plant project like that would be psychological (or political…).
I think the Bae, Kim & Lee firm is still quarterbacking this project for Gale. I certainly wouldn’t call Gale International “untested,” though, even if this is one of their most ambitious projects. I’d still bet it pays off in the end.
DLB
New Songdo City? Wasn’t “Songdo” the old name for “Kaesung,” back in Goryeo times, when it served as the capital?
Or am I asking an old question?
Jeffery Hodges
* * *
On the negative news front: Having now received more or less the same info from three independent sources (one in the Blue House) about the pending Board of Audit report recommending the govt take legal action against Gale for allegedly failing to fulfill its purported promises to “induce” (lure?) a designated level of other FDI to the project, I venture to say that the odds are now good that Songdo City will be the next Newbridge (anyone remember that one?) / Lonestar moment in the history of the Great Korea Bait and Switch Scheme called Seghyewa, and it will dwarf both in terms of the attempted de facto expropriation of foreign profits from investing in the Hub of Deception and the resultant impact on future FDI.
I wonder if Sejong City will be selling apartments now as well? I imagine they would be cheaper than those in Songdo.
New Songdo City will continue to be a moderately successful development for wealthy Korean families in the short run. Until there’s a major shift in the quality of Korean education, it cannot become the knowledge hub it is purported to become. Until there’s a culture shift, Korea will remain trapped in creating jobs pouring concrete and stamping out cheaper versions of mass produced products instead of developing new business models and leading innovation. A bunch of expensive buildings and a bridge don’t create new industries or the cosmopolitan community required to create say, an international banking hub.
The leadership in these projects have little or no experience in anything resembling what would be called a knowledge economy. And I bet few of them can hold a conversation in English. They rose to power during the dictatorship years and made millions pouring concrete and building widget factories while avoiding safety regulations, building standards and environmental impact assessments.
Every new development in Korea has the same lofty goal of being a “hub”. Korea is developing clusters of hubs. Maybe the new slogan should be “Knowledge Hub Cluster Luck” http://www.koreaherald.co.kr/NEWKHSITE/data/html_dir/2009/10/28/200910280055.asp
New Songdo City was built on tidal mudflats at the edge of “Old” Songdo which held an amusement park and lagoon, and Dongmak, which was a fishing village. The amusement park is still there but the lagoon is now a shallow pond. The tidal mudflats that have been eliminated were valuable ecologically and commercially. If New Songdo City is successful, developers and government will simply use this as an excuse to continue destroying the most distinctive and valuable asset the west coast of Korea has… and market each venture as “green technology hub” or “sustainable living” or whatever slogan they think will sell Korean investors. Because if you look carefully at the marketing and choice of infrastructure projects used to attract investors that have been produced by IFEZ, it’s not truly targeted at the international crowd… except maybe inadvertently to Chinese investors because they are so similar to Koreans in their taste for gaudy, expensive and purposeless architectural embellishments like fake suspension towers for bridges and energy inefficient colored lighting splashed everywhere. However, I am aware of not a single Chinese investor in New Songdo. And most of the land has already been snatched up by Korean speculators.
New Songdo City? Wasn’t “Songdo” the old name for “Kaesung,” back in Goryeo times, when it served as the capital?
No, it used to be Gaegyeong during Koryo days.
O fallacy of sunken costs, is there no bad idea you cannot sustain?
Actually, both are correct, when the place that became the main capital of Koryo (sub-capitals were located at Donggyeong (modern-day Gyeongju and the former capital of Silla), Namgyeong (modern-day Seoul), and Seogyeong (modern-day P’yŏngyang) was established, the name was changed initially from Songak to Gaegyeong. However, Gaegyeong also came to be called Songdo. Sorry, don’t remember offhand, exactly when or why.
Sperwer: It’ll be interesting to see if and how the attack on Gale plays out. No good deed goes unpunished in the hub of hubs.
Recently the Saemangeum (sp?) FEZ powers-that-be (read: the Chollabuk-do governor) decided to ditch foreign PR and focus on domestic, which certainly backs the theory that domestic investment, or at least votes for the governor, is the real goal.
@ #6,
I really haven’t come up with a soild opinion one way or another with the ginormity of Songdo. On the surface of it, sounds a lot like another seeming shot at the moon and (what appeared to be an) enormous waste of precious investment capital: Pohang Iron & Steel. Look at how terrible that investment turned out to be!
Yet, there is a big difference. Infrastructure begats products. You invest in a steel mill and you get steel. You invest in a factory and you get widgets so on and so forth. If you build big office buildings will you begat a financial district? Maybe, but you need more than big shiny office buildings. You need a change of laws, culture, philosophy, etc. However, it always upsets me when you have people from one culture say that people from another culture are not capable of such and such achievement because they are not more like the culture you came from. It does strike me as a little culturally arrogant. It’s as arrogant as a Christian missionary from the 19th century thinking that an entire continent is damned and savage because they didn’t have the same religious beliefs.
Hong Kong and Singapore are Asian financial centers. I wonder what the Englishmen first thought of the natives (mostly southern Chinese) when they first landed on those piles of rocks? I wonder if they ever thought that these people from a backwards very unWestern culture would ever build what they ultimately got built over time.
Japan, Korea and now China is (or already has in Japan’s case) modernizing without listening to a lot of macro economic advice from Western experts. Russia listened to Western Economists and sold all their government assets quickly and that gave rise to the Russian Oligarchs and vast upheaval in their society. Sometimes I think the Russians should have never listened to the West and had more of a gradual modernization and economic liberalization like China.
Pronunciation is the same and the pine (song 松) character, but the Goryeo name has city do 都, while the “new town” has island do 島.
Thanks, Antti.
Jeffery Hodges
* * *
@11
I’m sure most of the Englishmen looked down on the natives they “discovered” oh, so many years ago. However, you(we) are comparing Chinese to Korean culture in this context of building global hubs. And key cities in China have, for thousands of years, been multi-cultural hubs and centers for globalization. Plenty of Koreans remain fixated on their “pureness” and the value of their homogeneous group think. And with competition in other areas of Asia continually growing, this isn’t exactly conducive to developing a global knowledge hub. Do you disagree?
Maybe you could redefine what you mean by “culturally arrogant”?
Once you heard them, you’ve heard them all. I remember reading the very same negative things about Incheon Airport when it was being built. Same thing with the KTX. And about how Korea was going to land flat on its ass hosting the World Cup 2002. On and on. But in the meantime, look at the shape of most of the western economies built on sinking debt and greed. Do they have any right to lecture anyone?
Antti,
What do you think about STX’s acquisition (and operation) of Aker Yards? Do you happen to know what most Finns think about it?
@WangKong936 and cm
Yeah, you go ahead and run from the truth and logical arguement. You should leave Korean globalization issues to experts in Korea who are working in the trenches.
vince,
Why not? Korea’s development and globalization is ultimately the responsibility of the Koreans is it not?
However, the more foreign capital goes into an investment that just happens to be located in Korea then the more relevant foreign advice and experts are. But POSCO was built primarily with money that Korea scripped and saved and got from Japan via the Normalization Treaty so it was theirs to spend and/or squander. The World Bank said the idea was insane and didn’t lend any money to the effort. Well that’s their business. They can lend money to whomever they want to. If they do, then their experts can offer as much advice as they want to, etc.
So… if Korea provides most of the capital, then it’s their responsibilty and success and/or failure is in their hands. If Korea uses foreign capital then they should not only be more open to foreign advice, they should also be accountable as well. Songdo is mostly Korea’s money so far. Let’s see how they do with it. That’s my logic and it appears sound to me. Does it to you?
WangKong936:
You have changed the topic of the discussion too many times for me to bother following it. And, you have resorted to the logic “it’s Korea’s problem, why give a shit?”
I work in Korea for Koreans, and I’m tackling the issue of selling Korean technical services to global customers. You have no idea if I’m Korean or not. And frankly, it doesn’t matter.
You have proven you have nothing to offer on this topic.
vince,
To me it appears that you changed what you wanted to talk about in comment 17.
If you still want, I can directly address your # 14. You just didn’t seem like you wanted to talk about it after your 17.
Hong Kong and Singapore are financial centers located in Asia that happened to have been created and fostered by Western capital and expertise, with Asians themselves being late-comers to a party staged and organized by others; so they are not particularly suggestive of the likelihood that the re-invent the wheel crowd in Korea will succeed in doing the same (nor that they won’t).
Not simply “Western” expertise, Sperwer — both places’ legal systems are based on the English common law. The other up-and-coming financial hub that Korea’s desperate to benchmark is Dubai, which built a (possibly ephemeral) boom out of nothing. Dubai’s secret? Not just the English common law applied to those legal problems, but judges imported from common-law jurisdictions to interpret and apply the English common law.
If Korea wants to build a financial hub where there is no natural reason to have a financial hub, it would seem to be a good idea to bring over the English common law system — its laws, courts, and personnel — which makes the financiers comfortable. What are the odds of that?
Just another foreign owner of Finnish shipyards after the Norwegian company, I guess. Sure, the worry in the shipbuilding circles has been that Koreans would pack up the cruiser building and ship it to Korea, but the opinion seems to be it’s not going to happen. The Turku Shipyard (that built the Oasis of the Seas megacruiser) just announced the intention to lay off 400 of the staff of 2000 next year, but I don’t think anyone connects that to the Korean ownership, because the dismal state of the business is well known.
Yeah, I know, Brendon, but such niceties clearly are beyond the ken of our audience.
Parts of it are; parts are not. Conflating them, like “forgetting the history of “Asian” financial hubs to make them truly Asian, seems like just another trick from the Korean “My Way” kit bag.
I don’t know why Korea would want to become a “knowledge” economy (or any other variation of that vacuous term e.g. “information” economy) in the first place.
Becoming a “knowledge” economy as far as the US is concerned has meant importing ever increasing numbers of unskilled Third World helots along with quite a few skilled H1B types (thus squeezing both the lower and middle classes), and growing a bloated, parasitic financial sector. And the result has been that real median wages have stagnated for 40 years, with consumption fueled by increasing amounts of unsustainable debt substituting for the loss of income, hyper centralization of wealth (net assets), growing inequality, etc. In effect the US is rapidly being turned into Latin America-North.
Unless it wants to become a Third World, Latin American style dump, Korea should completely ignore the neoliberal nostrums being peddled by the globalists and their useful idiots (e.g. “vince”).
You mean it isn’t already, with kimchi filling in for bananas?
Both places also include English as one of their official languages. Perhaps Korea should also designate English as one of their official languages. Then maybe a great financial center will magically arise.
No, at least not yet. It certainly could happen if the globalist policymakers get their way.
Re: “I don’t know why Korea would want to become a “knowledge” economy (or any other variation of that vacuous term e.g. “information” economy) in the first place.”
That’s why your opinion on this topic is moot. If you don’t understand why Korea is investing trillions of won in developing new technology and services to compete globally for a share in these high value markets, maybe you should go put your nose back in Sarah Palin’s new book. Trying to link 8 years of Republican deregulation of financial markets (and deregulation of everything else) and the resulting collapse of the US economy to this topic is sort of retarded.
However, Brendan’s point about the use of English Common Law is very interesting. I’m very happy he looked up from Sarah’s book to make that comment.
There are always numerous models operating simultaneously in a nation’s economy. And these models are simply abstractions. Korea can make widgets, produce handphone IP and have a thriving art and design services industry, all at the same time. A nation who’s successful economy is dependent on export can’t afford to go into protectionist mode. Korean programmers so far, are totally missing out on income from creating Korean focused apps for the iphone for instance… and avoiding real competition in the market.
You didn’t understand the tone, meaning, and point of my comment.
And your response is just a rambling series of vacuous bromides.
You must log in to post a comment.
{ 1 trackback }