That’s the vision put forth by South Korea’s new president, Lee Myung-bak, who wants to reignite his country’s slow economy (GDP growth is down from 7 percent five years ago to 5 percent today) with the $16 billion canal project, which has come to be known as Korea’s “New Deal.” But the ambitious plan, the centerpiece of his election pledge, is now sharply dividing the nation. While Lee and his ruling camp (which won a slight majority in recent parliamentary elections) call the canal “a multipurpose project that can raise people’s happiness index,” opponents see it as an old-style development project that will destroy the environment while inflating taxes. Opposition parties have formed a rare alliance against the scheme. “The grand-canal project is an environmental, economic and cultural disaster,” says Moon Kook Hyun, an opposition lawmaker-elect and vocal anticanal environmentalist.

But for Lee, the canal isn’t just a campaign issue—it’s a pet project. The former chairman of Hyundai Engineering & Construction has played with the idea for more than 10 years. Despite his reputation as a free-marketer and cosmopolitan former CEO, Lee has often backed major state building projects. As Seoul’s mayor from 2002 to 2006, he rammed through a highly controversial project to tear down an elevated highway at the heart of the city in order to uncover a stream and restore nature to the urban core. Opponents worried about traffic, but the plan worked, and the river has become a beloved landmark. That success helped Lee win the presidency.

Now Lee wants to repeat that triumph. He says the canal will “ignite” his 747 Plan— to achieve 7 percent economic growth and a per capita income of $40,000, and to join the G7 by 2018. His government figures the canal will produce $38 billion in economic benefits (from tourism revenue and reduced transport fees) or 238 percent of the costs, while easing water shortages and lowering pollution. Dredging the Han and Nakdong will create larger catch basins to store water, and using ships that run on natural gas would cut emissions from diesel trucks. “The canal project is an environmental blessing, not a disaster as many opponents claim,” asserts Cho Won Chul, an engineering professor at Seoul’s Yonsei University, noting that there is a global move away from land to marine transport.

Civic groups say Lee is obsessed with old-style development that will invite flooding, destroy the environment and contaminate the water. Environmentalists say a single oil spill from huge ships cruising the river could wipe out precious drinking-water sources for the entire population. Opponents also say government forecasts ignore the cost of land purchases and overstate benefits; a study by one civic group puts costs at $50 billion and benefits at $4 billion. Hong Jong Ho, an economist at Seoul’s Hanyang University, predicts the canal will fail to lure people off South Korea’s well-developed roads and railways, but will spur land speculation along its banks. In fact, speculators have already pushed up land prices near the canal, raising charges that Lee’s real aim is win votes in the poor central region—the swing-vote constituency in the parliamentary elections. Many locals are openly hoping that the canal will bring business to a remote area bypassed by Korea’s economic boom.

But nationally, public opinion is turning against the project. After Lee’s election in December, nearly 50 percent of the population supported the canal. But in a Seoul newspaper survey last month, only 32 percent welcomed it, while 58 percent rejected it. Recognizing this shift, the Lee administration now says the plan will be pursued only after thorough public discussions. It also claims most costs would be covered by interested private contractors, not the government, in order to reduce the taxpayers’ burden. Opposition candidates were keen on making it a principal election issue. But the ruling party remained deliberately fuzzy about details, lest they hurt its candidates. Experts say Lee might have to scale down or even scrap the project if public opinion stays unfavorable. “This is such a huge project that can reshape Korea’s landscape,” says business professor Yoon Chang Hyun at the University of Seoul. “Going against public sentiment would be detrimental to Lee.” In the end, Korea’s maturing democracy may block its president’s statist dreams of moving the earth.