Today, South Korea is among the developed economies of East Asia, with a per-capita income of about $34,336 (PPP). In the 1960s, the Philippine economy was virtually at par with South Korea, with both countries recovering from their war years, although the latter had just come from a more recent bloody conflict with its northern counterpart in the 1950s. (The Philippine war years happened earlier in the 1940s.)

South Korea’s rapid transformation to a developed economy could be gleaned from its industrial strategies that began in the 1960s. In an exposure trip last week, our delegation was delighted to visit a tourist attraction that was also part of an important strategy for the local economic development of Gwangmyeong City.

Gwangmyeong Cave (or Gahak Mine Cave) was originally a mining site operated by the Japanese during their colonial rule. Producing gold, silver, copper, zinc and other minerals, the cave was the largest metal mine in metropolitan Seoul from 1912 to 1972. It spans 7.9 kilometers in length and reaches 275 meters in depth. According to coal-construction data, the cave produced over a hundred kilograms of gold until 1972, when its operations ceased due to a huge flood that submerged the area for many years.

The cave epitomizes the evolution of modern industries in Korea and serves as a historical landmark of the Japanese colonial period. With the bankruptcy of its operating company, the mine was closed down and was subsequently bought by a businessman who turned it into a warehouse for salted shrimp. In 2011 the city government, led by Mayor Yang Ki-dae, purchased the mine for 4.3 billion won (P182 million) and immediately began its redevelopment. The project was inspired by urban-revitalization projects in other countries, such as the conversion of the closed Zollverein Coal Mine Industrial Complex (Essen, Germany) into a major tourist venue with museums and exhibitions, the Westergasfabriek (Amsterdam, the Netherlands), and the Musee d’Orsay (Paris, France).

Having undergone a complete makeover, the cave reopened its doors in 2011 as a living museum and historical site. Its major attractions include an underground aquarium (Cave Aqua World), a music and art hall, a golden waterfall, golden paths and golden palaces. Apart from its historical importance, the cave offers another compelling reason for tourists to flock—the tasting of 78 varieties of fine wine from eight different Korean vineyards.

Today, the cave is a cultural tourism attraction with 1.5 million visitors annually. Its underground temperature is maintained at 12 degrees Celsius, which attracts more tourists in the summer season. Since it began charging admission fees in April 2015, its sales through June of this year have amounted to 7.9 billion won (P335 million). Indeed, the cave park has created hundreds of jobs that are critical to the city and its people. Moreover, it enables Gwangmyeong to share its cultural and artistic heritage with young people from Korea and the whole world.

Of course, several insights can be distilled from this case study. One, a local government can turn a disaster into an opportunity, especially if it uses its available resources wisely. It can also be engaged in a successful entrepreneurial activity in partnership with the private sector in the tourism industry. Two, although the cave theme-park project got its inspiration from other successful initiatives around the world, it has managed to improve on them. The Gwangmyeong cave, for example, is now being hailed as a major cave theme park in the world. Three, the creative economy and technological advancements can be harnessed in the transformation of a site into a tourist attraction. Four, a successful theme park can create positive externalities (spillovers) for other sectors in the local economy. The cave has spawned the development of other tourism-related sectors in the local economy. Last, attracting global talents and professionals can further enhance an already successful tourist site (e.g., design competitions in the cave, concerts of renowned artists, and so on).

These insights should inspire the Philippines to follow suit, as it tries to revitalize local industries and spur tourism, which is widely considered as an inclusive growth driver. The Philippine mining industry, in particular, has been the focus of a heated debate that weighs environmental sustainability and economic progress against each other. The Korean experience, however, suggests that these do not have to be mutually exclusive outcomes. Fostering a creative synergy between the private and public sectors can unleash a lot of economic potential from which many Filipinos will benefit.  The country for sure has a number of areas, including those affected by disasters, that can be turned into golden opportunities.

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Dr. Aldaba is dean of the School of Social Sciences at Ateneo de Manila University, while Peña-Reyes is a faculty member of the Economics Department under the said school. The other members of the delegation to South Korea are Dr. Olivia Habana (History), Dr. Maitel Ladrido (Communication), Sarah Lipura (Korean Studies), Oliver Quintana (Political Science) and Patrick Capili (Modern Languages). The team is grateful to Sogang University (c/o Dr. Dong-taek Kim) for being such a gracious host. Gamsahamnida!

Source: Business Mirror / by Eagle Watch – August 11, 2016, By Fernando T. Aldaba and Ser Percival K. Peña-Reyes