Ten years have passed since Incheon Free Economic Zone was established with the aim of becoming a Northeast Asian business hub.
Korea’s first free economic zone has attracted foreign investment and international organizations since its establishment.
IFEZ Authority is now seeking success in a new area, aiming to become a center of high-value service industries. Following are excerpts from an interview with IFEZ Authority commissioner Lee Jong-cheol.
|IFEZ commissioner Lee Jong-cheol (IFEZ)|
Korea Herald: What is your evaluation of the 10 years of the IFEZ?
Lee Jong-cheol: Despite the global economic slump, IFEZ has emerged as a core region enhancing the nation’s value on the strength of Incheon citizens’ support and the IFEZ staff’s efforts. I feel pride on that point.
While looking at the visitors’ book written a year ago, I found an eye-catching entry: “Those who have dreams rule the world.”
This year marks the 10th anniversary of IFEZ. In other words, the nation’s first free economic zone authority was launched 10 years ago to strengthen its competitiveness through a new growth engine.
It is a complete change: High-rise buildings, big companies and world-class universities are standing in this place, which was once a mud flat.
KH: IFEZ is being reborn as a hub of the service industry in Korea. Why did you select the service industry?
Lee: As you know, the pressing issue facing the nation is low growth and low productivity. In the current time of low growth without employment, service industries can solve both problems ― growth and employment.
The manufacturing business-led industrial structure will find it difficult to see continued growth and to create many jobs.
Actually Samsung Biologics has decided to invest 2.1 trillion won ($1.96 billion) in Songdo in the IFEZ, but the number of jobs created has so far been fewer than 1,000.
On the other hand, the 300 billion won project to build a Shinsegae complex shopping mall in the Choengna international business district is expected to create more than 5,000 jobs.
We can say the service industry will be a “Blue Ocean” and a growth engine when it is assembled with international business activities.
In comparison with its rival cities, Hong Kong places too much emphasis on shopping, Macau on casinos, Singapore on medical tourism and casinos, and Dubai on international business. But the IFEZ can offer complex services including health care, education, entertainment and tourism.
The IFEZ aims to grow into an international city. To be a place where many people around the world visit, it needs to foster a service industry.
KH: What problems need to be solved in the IFEZ?
Lee: Over the past 10 years, IFEZ has achieved much progress despite the global economic slowdown. The achievements include easing regulations on offering citizenship in return for real estate investment, widening the scope of beneficiaries from tax incentives and setting up rules on the opening of foreign medical hospitals.
But for another takeoff, we need the central government’s active support for the development of the IFEZ.
For instance, domestic companies should be allowed to receive benefits that foreign-invested companies enjoy, such as reduction of corporate and income taxes. That could help turn eyes of domestic companies seeking to find industrial sites overseas. Hong Kong, Singapore and Shanghai treat domestic and foreign companies equally.
KH: What plan do you have to develop the Yeongjong and Cheongna zones?
Lee: It is true that the two zones lag behind Songdo in terms of development and investment.
But we expect the Yeongjong zone to be revitalized soon, as the nation is preparing for the opening of aviation training and engine maintenance centers. Furthermore, BMW is currently building its driving range there.
In the Cheongna zone, several projects, including ones to build a Shinsegae complex shopping mall, the Hana financial town and a robot theme park are progressing smoothly.
KH: What are the IFEZ Authority’s plans?
Lee: The answer is simple. We will kill two birds with one stone, which means the achievement of both economic growth and job creation by hosting high-valued service business including education, health care, distribution, tourism, entertainment and leisure. That will help IFEZ become the nation’s frontline base for service industries.
By Seo Jee-yeon (firstname.lastname@example.org)