낙후지역개발을 위한 지역개발법인의 활용방안에 관한 연구

A Study on the Establishment of the Regional Development Corporation in Depressed Regions in Korea

&nbsp;&nbsp;The study focuses on the establishment of the Regional Development Corporation (RDC) in Korea as an attempt to promote private investment in depressed regions. Specifically, RDC targets the Development Promotion Zone that covers most depressed regions in Korea and designated by the Ministry of Construction and Transportation. RDC is established by joint contribution from public and private sectors. According to the law of balanced regional development, local governments and private investors can establish RDC jointly for regional development projects.<BR>&nbsp;&nbsp;RDC is a type of the Special Purpose Company (SPC) established to attract private sectors including financial institutions for regional development projects that are implemented usually by public sector. SPCs, similar to RDC in terms of the organization of the company and transaction structure among participants, include those for infrastructure construction such as roads and sewage treatment facilities. Unlike the SPCs established for single project of infrastructure construction, RDC implement multiple projects of regional development. RDC is excepted to improve the effectiveness of regional development programs by implementing multiple projects related each other as a package compared to implement single project using SPC.<BR>&nbsp;&nbsp;Participation of private financial sector is a key factor to establish RDC, enabling to reduce the problems that arise from the shortage of financial capabilities of private investors in the Development Promotion Zone. The baseline for the participation of financial institutions in the RDC is capital gains, which can be complemented by policy incentives. Unlike urban areas, most depressed regions cannot offer reasonable profits to developers, requiring assistance of central and local governments. The assistance to the private sectors participated into RDC should be understood as a compensation, not special treatment, for the contribution to enhance public interests.<BR>&nbsp;&nbsp;Policy suggestions are: the improvement of basic conditions for the participation of private investors including a simplification of the attraction plan of private investment for regional development; enhanced power for land expropriation and exemption of taxes and charges to private developers; extended exemption of local taxes and expropriation of the corporation tax; and financial assistance, tax exemption and deregulation to RDC.