Published : 2014-08-04 21:27
Updated : 2014-08-04 21:27
The South Korean government announced Monday that it will disband some districts and areas within the country’s free economic zones as they have failed to submit development plans and attract foreign investment.
The Ministry of Trade, Industry and Energy said that some 10 districts and portions of four districts in eight FEZs will no longer be part of the zones, beginning Tuesday.
“Under the FEZ law, the designations of those areas in the zones will be automatically canceled as they have not shown any concrete plans over the past three years,” a ministry official said.
The number of free economic districts will be cut to 88 from 98, and the total size of the country’s FEZs will be reduced by 21.6 percent to 335 square kilometers from 428 square kilometers, the ministry added.
In 2003, South Korea designated three areas ― located in Incheon, Jinhae-Busan and Gwangyang Port on the southern coast ― as FEZs for the first time to realize government efforts to make Korea a business hub of Northeast Asia.
However, some areas have been suffering development setbacks due to insufficient foreign investment and the economic slowdown.
The Yongyu-Muui area in Incheon rescinded its plan to create the so-called “8City,” a multifunctional tourism city, after it failed to secure funds for the project.
Inactivity in the districts triggered complaints from those who own property in the areas.
The government will allow them to exercise their rights to construct buildings.
The ministry also said that it would focus on developing the remaining free economic districts.
“By eliminating the dormant FEZ districts, the ministry expects to accelerate development in the rest of the areas,” the official said.
“To help speed up their development, the government will come up with ways to attract foreign investment while removing excessive regulations.”
Meanwhile, experts warned that the government could face criticism for its reckless FEZ designations, noting that some districts still could not find project managers and operators.
Also, residents from the districts are likely to demand compensation from local governments and FEZ authorities for losses stemming from the cancellation.