The Korea-US FTA and the Incheon Free Economic Zone (IFEZ) aim at the same goal of 'the improvement of competitiveness through opening up'. As a result, each will help the other.

With regard to free trade between Korea and the United States, IFEZ plans to lead the free trade by providing a business and residential environment that lives up to the global standard, including education and medical services.

Through the settlement of the Korea-US FTA, Korea has prepared an opportunity for improving the international business conditions through the alleviation of businessrelated regulations and the advancement of the system. By expressing a strong will regarding trade and investment, Korea has improved the external level of trust regarding the Korean market. In the end, these will become a firm foundation for IFEZ's materializing the inducement of prominent, overseas corporations and technological transfer.

Present situation of the IFEZ

The IFEZ has been the most active among the free economic zones in KoreA: Entering into the fourth year ever since the designation of IFEZ, the efforts so far have been showing visible results. This year, the Incheon Free Economic Zone Authority (IFEZA) has been accelerating development and investments under the slogan of 'speedy management'.

As for the main results of the development, a convention center will be opened in October next year. An international school will be opened from the fall semester of next year. The frame construction of a 64-storey residential and commercial complex building has been nearly finished. When the architectural design work of the 151-storey Incheon Tower is completed within this year, the construction work for the tower will begin in the beginning of next year. At present, Incheon Bridge, which will connect Songdo and Yeongjongdo, has been 50% completed. Its construction will be finished in October 2009. And the extension construction work for the Incheon subway is underway. Moreover, not so long ago, the construction work for five parks, with the total area of 450,000 pyeong, was finished, and, currently, they have become rest areas for citizens of Incheon.

As for the investment inducement results, as of July 2007, 21 contracts worth US$17.1 billion have been concluded. If MOU's are included, the monetary amount reaches about US$30 billion.

Competitiveness of IFEZ

Compared to China and Singapore, the IFEZ started late. Or, in other words, the situation is that, while IFEZ is currently in the initial phase of development, other competitor cities have already made their positions as corporate cities firm. IFEZ has the tasks of proceeding with development and investment at the same time and reducing the gap with competitor cities.

Eventually, the important thing is the competitiveness of the IFEZ. In terms of the geographical location, infrastructure, human resources, urban design, IFEZ clearly has differentiated competitiveness. In addition, in order to construct a hightech business city that surpasses competitor cities, IFEZ has been pursuing the development project with three major differentiation strategies. IFEZA said that it will make IFEZ definitely surpass competitor cities, without fail, in ten years from now.

As for IFEZA's differentiation strategies, firstly, it will make the world's first U-City. Ubiquitous systems will be introduced into the whole of the city for a hightech work and residential environment. Secondly, IFEZA will make an eco-city. Thirdly, IFEZ will be born as a beautiful city.

Directions and tasks for development

The ultimate purpose of the development of IFEZ is to transform the Korean economy into an economy based on high value-added industries. By attracting high value-added industries, such as knowledge- based industries, tourism, leisure, etc, IFEZ plans to lead the Korean economy in breaking away from the manufacturing industry economy. It plans to become Asia's new business hub that creates, develops, and spreads new values through industry-academia linked clusters.

For such goals, IFEZA has its own differentiated development plans with regard to multinational corporations, knowledge-based industries, aviation, logistics, tourism, leisure, international finance, etc.

As above, IFEZA has clear and definite visions and development plans. The most important task for proceeding with IFEZA's projects as planned is to make firm the central government's interest and support. Inasmuch as IFEZ is a large-scale national policy project for the improvement of national competitiveness in the 21st century, the central government's bold support in terms of administration and finance is indispensable. IFEZA has been intimately working with the central government for this.

Directions for investment support

Considering the fact that IFEZA has been competing with world-class cities overseas, enabling IFEZA to freely engage in work activities without being entangled in complicated, domestic administration regulations is the best investment support. The project plans, administrative procedures, work activities, residential environment, etc must meet the global standards.

Another thing that is needed is the offering of business incentives that do not fall behind those of competitor cities. In order to attract first-class enterprises and research institutes into IFEZ, the presentation of suitable and exceptional treatment is needed. The fact that IFEZ is under development from 20 to 30 years later than competitor cities and the fact that many countries in Asia, such as Singapore, are desperately working for investment inducement must be kept in mind. In order for foreign corporations to invest in IFEZ, business incentives that do not fall behind those of other cities are needed.

The following are excerpts from an interview recently held by the Korea IT Times with Lee Hwan-kyun, CEO of the Incheon Free Economic Zone Authority (IFEZA) -- Ed.

Q: Could you please introduce IFEZ to us

A: IFEZ is a business city that was born as a stepping-stone for the Korean economy to actively cope with the whole world's economic trend of infinite competition and the rise of the economic sphere of Northeast Asia. IFEZ has the highest priority goal of playing the role of a spearhead in the Korean economy's making rapid progress as an advanced economic runner in the 21st century, coming out of the previous tendency to be centered on manufacturing, through the inducement of 21st century-type high value-added industries and highest technologies.

Q: Briefly, what is the meaning of the settlement of the Korea-US FTA to IFEZA

A: We view that, thanks to the settlement of the Korea-US FTA, the investment inducement into IFEZ will accelerate.

Q: What are the difficulties due to the dispersion of approvals and regulations related to IFEZ

A: There are a lot of difficulties due to the dispersion of the approvals and regulations related to IFEZ's development and investment attraction in many entities.

At present, due to the lack of an organization fully in charge of the integrated management of the rights, regulations, etc related to free economic zones, IFEZ's development and investment inducement have been slowed down.

In the past, when there was an intention to invest on the part of a foreign corporation, government officials of all relevant government ministries and offices gathered in one place and processed the work rapidly. However, now, a case can be proceeded with only after each of the many government ministries and offices related to development and investment matters have made approvals.

Related to approvals and regulations, such competitor cities as Shanghai and Hong Kong have currently been offering advanced conditions that cannot be compared with Korea. In the end, unless Korea's current system is improved, there will be cases in which foreign corporations decide not to come to IFEZ despite the diverse business incentives and opportunities. This is a time at which the central government's bold conversion of awareness is needed.