Seeing Green in Golf Courses

What a difference a half century makes.

Fifty years ago, the government was struggling to provide adequate shelter for everyone after war had devastated the peninsula. Now, it is squaring off to build more golf courses to ensure a better future.

In perhaps the most curious remedy for the nation's economic malaise, Finance Minister Lee Hun-jai wants up to 180 more golf courses to be constructed.

At stake, according to officials, are billions of won that are being spent by Korean golfers overseas, nearly 90,000 new jobs, contracts for a depressed construction industry, and a foreign tourism attraction for Korea.

Normally it takes two to four years for a golf course application to pass through a government bureaucracy that resembles a golfer's nightmare of bunkers, water hazards and high wind.

Lee, however, wants the government to approve construction licenses in the next few months, setting up a heated autumn debate with environmentalists and economic analysts who don't see a easy chip shot for the economy.

Still, no one is denying that demand for tee times far outstrips supply, prompting a rapidly growing number of golfers to play the game abroad. With the nation shifting toward a five-day workweek, the attraction of playing in other countries is expected to keep growing, sucking economic gains right out of the country.

The Ministry of Finance and Economy expects about 500,000 people will go overseas to play golf next year, and spend 500 billion to 600 billion won on their overseas golf trips.

The number to traveling golfers this year is expected to reach 300,000 to 400,000, many more than the 100,000 to 150,000 estimated for 2003.

"We need to have more golf courses for our economy," said Bahk Byong-won, deputy finance minister, who has been in charge of the whole idea of deregulating golf-course construction over the past three years. "It will help reduce our travel account deficit and stimulate domestic demand."

The Bank of Korea recently reported that Korea's service account posted a deficit of $730 million in August, up $100 million from the previous month, as the number people traveling overseas surpassed 900,000 for the first time. It was the largest monthly deficit ever.

By developing more golf greens, the government also hopes to stimulate the construction industry and create more jobs. Toughened government regulations have sharply curtailed housing construction this year, pushing several construction companies to the brink of bankruptcy. That has sent officials scrambling to adjust policies to stimulate more construction.

Building 230 golf courses could create 87,000 jobs and raise the nation's gross domestic product by an additional 0.6 percent, according to Finance Ministry calculations. Currently, there are 262 golf courses in Korea, including 68 currently being built and 15 licensed for construction.

The Korea Chamber of Commerce and Industry estimates that 250 golf courses would generate a 5 trillion won in revenue per year, producing the same economic effect as 320 small and midsize companies in 12 industrial zones.

Encouraged by these expected economic benefits, local governments already are rushing to build golf courses.

On Aug. 31, North Jeolla Provincial Government said it would create a 540-hole golf complex in Saemangeum after 2006. This is bigger than the world's largest golf complex with 180 holes in China.

Not wanting to miss out, the South Jeolla Provincial Government is planning to build a 108-hole golf complex in Haenam by 2010.

Smaller regional governments are also developing plans, and big business groups and construction firms, including LG, CJ, Hanwha, Sung Won, ShinChang and Booyoung, are also pursuing the new business opportunity.

Critics, however, say building more golf courses would not help boost Asia's third-largest economy and could rather destroy the natural environment.

The golf course strategy also appears to challenge the government's concerns over land management. Arable land has declined an average of 202 square kilometers a year since 1990 due to development, according to the Ministry of Construction and Transportation. Last year, farmland covered 18,460 square kilometers, 12.5 percent less than in 1990, the ministry said in a recent report that called for steps to ensure Korea's food supply.

Critics also warn that the economy may fall into a bigger trouble because many local golf courses could go bankrupt as occurred in Japan if the government approves too many golf greens.

"We don't have demand for more than 500 golf courses," said Baek Sung-joon, a researcher at the Construction and Economy Research Institute of Korea. "

Hwang Ho-sup, a director-general of the Korea Federation for Environment Movement, says golf courses are drying up underground water and poisoning the land with chemicals.

An 18-hole golf green uses about 1,000 tons of water a day for free, which is the average amount needed for 50 households for one month, he said. Korea is classified as a water shortage country by the United Nations.

Also, besides a shortage of tee times, weather is a key reason why Korean golfers travel overseas to play golf. Many like to leave the country during winter, between November and March, to play in Southeast Asia, southern China and the southern half of the United States.

Some also question whether building more golf courses can attract more foreign tourists. "There are no strong reasons yet why local and foreign golfers should play golf in Korea," said Chung Moon-keun, of the Economic Trend Department at the Samsung Economic Research Institute.