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Korea’s experience as a catalyst of industrialization in Africa

31/05/2018

 

The story of Korea’s successful industrialization serves as a perfect example for Africa to overcome its constraints in housing financing, complex land tenure systems, and the scarcity of reputable developers.

Korea, the host country of the 2018 African Development Bank Annual Meetings, is now among the most industrialized nations on earth after focusing on strategic financing in smart cities and state-of-the-art transport systems.

During a panel discussion on “The role of infrastructure as a catalyst of industrialization: Korea’s experience and lessons,” Korean experts explained how the Government and the private sector collaborated to achieve their goals.

“The sustained, massive provision of new affordable housing since the 1980s has resolved South Korea’s housing shortage and overall housing conditions have greatly improved,” said Daesik Choi, a Research Fellow at the Korean Land and Housing Institute.

“We are now at the forefront of the modern housing trend and have committed 80% of the US $36 billion for a project on low carbon and green growth in urban settlements.”

Kyungsoo Jeon, General Director of Overseas Project Division, Korea Expressway Corporation, noted that investment in transport systems must be made for the future and not for current trends, to beat the inevitable demographic and commercial pressures.

He gave the example of the Korean Gyeongbu Expressway, a 428-kilometre road built in the 1950s for a cost of about US $430 million.

It was an unpopular investment at the time that had many people criticizing the Government for investing heavily in a road when Korea had little traffic.

“Looking at the investment now, it is a powerful engine for the Korean economy, providing exporters across the country with cheap transportation. It is the second oldest and most heavily travelled expressway in the South,” Kyungsoo said.

“Such projects may look costly at the start, but when they start serving people, they can change the economy forever. This is something we hope that many African economies can learn from.”

Unlike Korea, most of Africa’s urbanization agenda has failed to enhance the housing welfare of low-income households and provide smart cities with modern transportation systems.

Discussion participants noted that few Sub-Saharan African Governments could finance the development of modern infrastructure systems themselves and needed to attract private and foreign investments. To do so, however, requires that Africa improve its rule of law and create a business-friendly environment.