|Lee Hwan-kyun |
CEO of the Incheon Free Economic Zone Authority
Incheon Free Economic Zone Strives to Advance $20,000 per capita GDP Goal
We're employing a differentiated strategy to compete against such jurisdictions as Singapore and Hong Kong that operate as advanced free economic zones, and the Pudong Special Economic Zone in Shanghai, China. In fact, the whole country should be declared a free economic zone to encourage North Korea to reform its economy, said Lee Hwan-kyun, CEO of the Incheon Free Economic Zone Authority.
In a recent interview with Korea IT Times, the CEO said that the Authority has paved the way for the nation to achieve a per capita gross domestic product (GDP) of $20,000 in the near future by actively fostering next-generation growth engine industries such as logistics, information and technology (IT), and tourism.
In particular, he pointed out that the central government's support is absolutely necessary now as the Free Economic Zone project is an international project to compete with Singapore, Hong Kong, and Shanghai. Mr. Lee said, "If a revised bill about the establishment and operation of a foreign school in the zone is not passed by the National Assembly, the national Free Economic Zone project will lose the confidence of foreign investors."
He said that despite difficulties in attracting foreign investment mainly owing to the protracted economic slowdown, the Incheon Free Economic Zone Authority has attracted commitments of about $20 billion worth of investment through 11 memoranda of understanding (MOUs), but if the National Assembly does not approve the revised bill, he fears losing the confidence of foreign investors.
He emphasized the importance of a broad range of infrastructure such as green spaces, a mass transit system, and an international school, an international hospital, and world-class cultural facilities, insisting that for foreign investors, these are the barometers with which to assess Korea's business environment.
The CEO said that the National Assembly promised to pass the bill in question, saying that the Authority has concluded a MOU with the University of Pennsylvania School of Medicine to establish a branch in the zone.
In the interview below, Mr. Lee expresses his faith in the ability of the Incheon Free Economic Zone to contribute to the Korean economy as well as produce other economic benefits.
Q: Could you comment on the recent activities of the Incheon Free Economic Zone Authority and its future plans.
|The Songdo knowledge/information industrial complex's DEC|
A: So far, the Authority has attracted about $20 billion in investment through 11 MOUs, despite difficulties in attracting foreign investment due to the slow down in the national economy.
Our Authority has secured land for the international business complex (1.67 million pyeong) and the knowledge/information industrial complex (803,000 pyeong) in the Songdo area to meet foreigner investors demands.
At the same time, we have composed a development roadmap for the purpose of completing the first stage of the project by 2008. Our Authority will mobilize all its administrative heft toward the cause of developing the first stage of the project without hindrance and boosting foreign investment in the zone.
The results of the authority's efforts to attract foreign investment indicate we secured commitments on foreign investment totaling $20.7 billion as of October 2004 through 5 contracts, 5 MOUs, and 4 letters of intent (LOIs).
In the Songdo area, a total of $16.52-billion worth of investment was registered for the construction of a new harbor in Songdo, a bio complex, an international business area, and the Songdo knowledge/information industrial complex's DEC.
The area of Youngjong has enticed a total of $4.192 billion involving the construction of a DHL/TNT logistics center, a golf course, a world pulse project, and a Chinatown.
Q: What is your opinion on the Songdo New City development project and the contribution of the Incheon Free Economic Zone to the Korean economy
A: The Free Economic Zone was created to improve the management environment for foreign investment and living conditions for foreigners. It is also part of a national development strategy to create a new growth engine for the purpose of attracting foreign direct investment (FDI) and boosting the national economy in the 21st century.
The Zone is expected to play a bridgehead
role in paving the way for the opening of North Korea and the reunification of North and South Korea.
I believe that in 2008 when the first stage of the Free Economic Zone will be completed, the Zone will greatly contribute to achieving a national per capita GDP of $20,000 and emerge as the center of Northeast Asian economy and logistics, and which can compete with Hong Kong, Singapore and Shanghai on an equal footing.
Q: Would you comment on the economic effects of the Songdo New City development project and the significance of Incheon regional development
A: The Incheon Free Economic Zone is expected to bring about such economic ripple effects as the production of goods and services worth 312 trillion won, and creation of value added worth 128 trillion won, as well as creation of jobs for 4.84 million people by 2020.
The Songdo New City development project is also likely to push up national GDP by an additional 1 percent as well as reduce the unemployment rate by 0.2 to 0.3 percentage points.
Thanks to such efforts, the development of Incheon will allow the port city to be reborn as a gateway to Northeast Asia, rather than remaining simply as a gateway to Seoul.
Q: Would you explain the authority's efforts to attract multinational corporations and expand local infrastructure and other facilities
A: First of all, in the case of Songdo area, currently 3.06 million pyeong out of a total of 16.11 million pyeong has been reclaimed and the remaining 770,000 pyeong of shore land is scheduled to be reclaimed by June 2005.
For foreign companies locating in the Free Economic Zone including Songdo, the Incheon Free Economic Zone Authority can claim reductions or exemptions on national taxes and local government taxes up to 100 percent during the first three years of business and up to 50 percent during the following two years. What's more, our Authority operates a one-stop administration service with fully qualified project managers who can support the entire investment process from investment consultation to business commencement.
The Incheon Free Economic Zone Authority is striving to make Incheon the most competitive city in the world, equipped with an advanced IT infrastructure, a ubiquitous computing system and an environment-friendly traffic system.
Q: Could you comment on the importance of the Incheon Free Economic Zone as a national project for the purpose of advancing national prosperity in the 21st century
A: Thanks to the Chinese economy that is emerging as the largest market in the world along with Europe and North America, global-level corporate interest is now concentrated on Northeast Asia's advanced country areas -- Korea and Japan.
To effectively compete with other countries, a new economic approach is required. Situated between a booming China and a resurgent Japan, the Incheon Free Economic Zone is well placed to take advantage of these trends.
Q: What plans do you have for each of the areas in the Zone
A: The Incheon Free Economic Zone consists of three areas; Youngjong, Chungra, and Songdo. Youngjong area will be developed as a logistics hub complex. Yongyu and Mueido, on about 2.13 million pyeong of land will be fostered as a global-level leisure tourism complex for both tourists and visiting business people.
The Chungra area, covering 5.41 million pyeong will be developed as a complex accommodating activities ranging from entertainment, and sports to international finance. Meanwhile, an international business center and a knowledge information industry complex, and a new harbor will be built in the Songdo area by 2008.
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