As the Incheon Free Economic Zone (IFEZ) marks the 4th anniversary, its efforts began to bear fruits. The IFEZ has made many achievements. A convention center will begin its operations in October 2008 and an international school will open in the same year. A 64-story apartment complex is being built and construction work on the 151-story Incheon Tower will begin early next year. A bridge linking Songdo and Yeongjongdo will be completed in October 2009, and extension work of the Incheon subway is underway as well. Five parks which have been created by the IFEZ are providing Incheon citizens with places to take a rest.
There also are positive factors for the future of the IFEZ, such as the ROK-US free trade agreement and the 2014 Incheon Asian Games. Progress in South-North reconciliation is another favorable factor for the success of the IFEZ. For the past four years after its launch, recognition for the IFEZ has improved and an increasing number of investors have shown keen interest in this special region. Through maintaining a close relationship with central government, the IFEZ will make efforts to get rid of obstacles for its development and investment and to promote speedy management.
The following is an interview with Lee Hwan-kyun, Commissioner of the Incheon Free Economic Zone (IFEZ) -- Ed.
Q: The IFEZ is considered to be more active than the nation's other free economic zones. What do you think are the secrets of its success
A: The IFEZ has clear visions and a number of advantages that have contributed to its success. The IFEZ has definite visions to provide a new driving force for the national economy in the 21st century and to become the best business hub in Northeast Asia. When the IFEZ is successfully completed, it will play a key role for South Korea to transform to an economy centering high value-added business from the current manufacturing industry-oriented one. In addition, the IFEZ will be the center of Asia in which new business value is formed, developed and expanded.
Unlike other free economic zones in Korea, the IFEZ has established a complex logistics base and can easily secure highquality labor. Proximity to markets in the nation's Metropolitan areas is another merit.
The IFEZ has established air, maritime and inland logistics systems. Incheon International Airport ranked top in terms of customer satisfaction and was the world's second-largest international cargo handling airport in 2006. Incheon Port is trying to become a worldwide container port and is recording the nation's highest growth in terms of shipment. In addition, bridges, expressways, high-speed railroads and subways, which are under construction, will further promote development of the IFEZ.
The IFEZ is close to the markets of Seoul with its 2,300 population, and the vicinity can be used as a foothold for the South-North economic exchanges due to the proximity to the Gaeseong Industrial Complex in the North. Because it is close to metropolitan areas, the IFEZ also can utilize experience and know-how in advanced industries like IT and BT owned by the nation's high-quality labor.
Q: Would you tell me about the IFEZ's strategies to differentiate it from similar zones in foreign nations, like Dubai and Pudong
A: The IFEZ is promoting its business based on three strategies to make it different from other economic zones. The strategies are to make the IFEZ a the world's best UCity by introducing a ubiquitous system for the entire city; to make it an advanced Eco- City by securing more green zones and hydrophilic space; and to make it a beautiful city with buildings to be designed following the worldwide trends. As a result, the IFEZ will be a landmark in Asia.
I want to stress that these things are possible because the IFEZ is a completely different , new advanced city that will be constructed on new land, unlike Shanghai and Singapore.
Q: What kind of advantages can foreign investors enjoy
A: The biggest advantage for foreign investors is that the IFEZ can provide a stable foothold to foreign companies which want to operate in Northeast Asia that is an emerging giant market. The IFEZ will work as a bridge which can minimize investment risks stemming from investment in emerging markets such as China and can make use of investment opportunities.
The IFEZ also provides incentives in connection with administrative matters and taxes to foreign investors. Foreign firms operating in the IFEZ will benefit from tax cuts and those owning advanced technologies will be able to receive financial assistance from the IFEZ. Special services will be offered to foreign investors for their convenience.
Besides, as English is spoken within the IFEZ, the problem of communication among people of different nationalities will be greatly eased.
Q: Would you explain the IFEZ's directions of development and future tasks
A: The ultimate goal of development of the IFEZ is to transform the national economy to one with its basis in high value-added industries. By attracting companies engaging in high value-added industries such as IT, tourism and leisure, the IFEZ will take initiative in the nation's efforts to break from the manufacturing-oriented economy. Through academy-industry cooperation clusters, the IFEZ will emerge as Asia's new business hub creating, developing and expanding new values.
To this end, each district of the IFEZ has its own development plan based on its characteristics. Songdo district will be a center of multi-national businesses and IT industries, Yeongjong district will be a base of air logistics and tourism and leisure industries, while Cheongra district will focus on international finance and leisure industry.
The IFEZ development began in 2003 and will be completed in 2020. The most important task at present is to successfully finish important development projects timed with the opening of the 2014 Incheon Asian Games.
Construction of most infrastructures will be completed before 2014 and the bridge linking Yeongjong Island and Songdo will be built in 2009. The Yonsei University-affiliated global complex will begin its operation in 2010 and a 151-story tower in Songdo is scheduled to be completed in 2013.
Construction of a Songdo international business zone containing a convention center, the 65-story Northeast Asia Trade Tower and an international school will be completed by 2014. The IFEZ will remove all the negative factors hindering development and investment through a close relationship with the government and will accelerate speedy management.
Q: What are the IFEZ's unique merits and demerits compared with free economic zones in neighboring countries
A: In comparison with its counterparts in China and Singapore, the IFEZ was launched later. The IFEZ is in its earlier stage of development, while its rivals are settling their statuses as business cities. In consequence, the IFEZ should narrow gaps with its rivals by promoting development and investment at the same time.
After all, the most important thing is that the IFEZ should have a competitive edge. Fortunately, the IFEZ is certainly equipped with differentiated competitive power in terms of its geographical position, infrastructure, human resources and urban design.
Moreover, the IFEZ is pushing forward development projects based on three differentiated strategies to construct an advanced business city to beat the rival cities. After a decade, the IFEZ will decisively gain the upper hand on those cities.
Q: What are the problems of the nation's free economic zones and could you suggest ways to resolve those problems
A: Considering that the nation's free economic zones are competing with the worldwide cities in the foreign countries, we should support them by making them freely do business activities without being affected by the nation's complicated administrative regulations. Business plans, administrative procedures, business activities and residential environments should be established according to international standards.
In addition, business incentives of the same level of foreign cities competing to a business center in the region should be provided to free economic zones. In order to attract top-ranking companies or research institutes, it is necessary to offer appropriate incentives to them. We should bear it in our mind that the IFEZ has developed two or three decades later than rival cities and Asian nations such as Singapore are striving to attract investment. To attract foreign investment, we should give it as many business incentives as we give to other cities.