SONGDO, KOREA – On October 19th, it was announced that the Songdo district of Incheon will be the site of the secretariat of the Green Climate Fund (GCF). The committee selected Songdo via a secret vote over competitors from other countries including Switzerland, Germany, and Mexico. The finalization of this decision is set to be made later this year in Qatar. Behind the backing of this announcement, city officials are expecting to see a substantial boost in the domestic service sector, both in terms of economic benefits as well as increasing the profile of the city as it is thrust into the spotlight.
Built from the ground up on 1,500 acres of reclaimed land along Incheon’s waterfront, Songdo is well underway towards the type of success that was envisioned by developers as the Smart City was built. As well as the GCF, around ten international organizations have already moved into the Songdo area, helping establish the area as a growing multinational hub. These organizations include the United Nations Economic and Social Commission for Asia and the Pacific sub-regional office for East and Northeast Asia.
A city official has said that the directors of the fund were particularly impressed by Songdo’s environment for business, residence, and education, all of which were emphasized during the construction of the city itself.
Although other international organizations exist, the GCF is the first major international organization to be headquartered in Songdo, and city officials hope to build on this momentum to continue the growth of the region. Now that this framework is in place, it is up to both the municipal as well federal government to lay the framework for continual expansion in the form of hospitals, international hotels, and schools that cater to foreigners, in order to keep up with the currently established infrastructure of cities like Singapore and Hong Kong.
When asked about the potential economic benefits that will result from this announcement, Korea’s Finance Minister Bahk Jae-wan had an optimistic outlook, stating that, “The economic impact is like a major giant global corporation moving in.”
Mr. Bahk added that as a result of the numerous meetings that will be held annually, the area will show a growing demand in the service and tourism industries including hotels, tourism, transportation, and finance. He sees this growth as a building block, and a potential gateway to open the door to employment for many young job seekers.
The Korea Development Institute, an autonomous economic policy think tank established the Korean government, complements Mr. Bahk’s optimism, predicting that the GCF will help allocate 380 billion won in economic effects each year.
This increase in focus will also require a more specifically skilled labor force. Particular attention will be focused on prospective employees who are skilled in the financial and tourism sectors, and this may show an influx in students who are seeking to become educated in this regard. Korean companies that are working on environmental initiatives will also be privy to various information regarding project the GCF is undertaking, and will be able to partake in them.
The GCF itself has laid the framework for plans to raise $100 billion annually until the year 2020. The funds from this initiative will be utilized to help hinder, as well as reverse, the effects of climate change. These lofty goals have garnered the GCF with comparisons as the “World Bank” of climate change.
In essence, the move of the GCF into Songdo will act as something of a test for the region. If the move is successful, other multinational organizations are almost certain to follow. Only time will tell how the region fares.
