South Korean court backs plan to move part of capital
(Reuters)
Updated: 2005-11-24 15:39

South Korea's Constitutional Court ruled on Thursday the government could move two-thirds of its ministries to a proposed administrative area about 160 km (100 miles) south of the capital Seoul.

The decision was a partial victory for President Roh Moo-hyun but fell short of his original aim of moving the capital from Seoul, home to one in five of the country's 48.4 million people.

"Seoul still remains the backbone of politics and administrative functions," the court said in a statement.

Roh has pledged to develop other regions because economic activity is focused on Seoul.

The court said the new administrative town would not replace the country's capital, nor was it a move to divide the capital.

Fanned by the ruling, share prices in South Korean construction firms soared. The construction sector's index jumped more than 6 percent at one point before ending 4.2 percent up on the day.

The market as a whole unofficially closed up 0.76 percent.

In October last year, the court rejected a more ambitious $45 billion plan backed by Roh to move the capital to South Chungchong Province in the central part of the country.

Under a special law approved on Thursday, the presidential office, high courts and legislature would remain in Seoul along with the foreign, defence and unification ministries.

The ministries and agencies that do move will go to the same initially earmarked province. Roh ordered the project to start.

HARNESS OR HAMPER?

"We welcome the Constitutional Court's ruling," said Roh's spokesman, Kim Man-soo. "We expect to harness the people's will and national capacity to build a balanced developing society, ending wasting disputes."

Disappointed opponents said they feared property speculation.

"We'll fight to block the 'separation and movement of the capital'. It's purely political," said a citizens' group in a statement.

"It will turn the whole country into a speculative property market, ruin the country's economy and hamper sustainable economic development."

Others have argued moving the capital or parts of it would dent South Korea's international competitiveness just as it touts itself as a business and financial hub for Northeast Asia.

In last year's ruling, the court said since Seoul had been a Korean capital for 600 years, a constitutional amendment would be needed to make such a move. It said there was a "customary constitution" that implied Seoul was the capital.

Rather than drop the idea, the president diluted it. Roh's approval rating is below 30 percent, down from a peak of about 60 percent shortly after he took office in February 2003.

In its most recent decision, the court's judges ruled 7-2 in favour of a plan under which 12 of the government's ministries and 30 state-run organisations will move by 2012.

Park Geun-hye, lead of the main opposition Grand National Party, said on her party's Web site she respected the ruling.

Some critics say moving ministries south could send the wrong signal to North Korea, not least after the unification minister said last week the government envisaged at least economic union with the North within 15 years.