Mayor Yoo Jeong-bok of Incheon Metropolitan City.(Photos:Incheon City)

The Incheon Free Economic Zone (IFEZ) is proud what it achieved last year in the area of foreign investment attraction. It attracted $1.714 billion last year, bringing total foreign direct investment in the zone so far to $6.769 billion. The figures came to around 95.7 percent of the total FDI attracted by the eight free economic zones last year and 9 percent of the total FDI invested in all the free economic zones around the country, which amounts to $19.05 billion.

IFEZ is proud of the fact that it made a huge contribution to the economic growth of the country last year, not only for Incheon.

IFEZ plans to do this year what it has done all along, which is to ease regulations and design experimental areas. 

It will ease regulations as it focuses on service businesses to set up shop in the IFEZ to make the zone an advanced base for the service industry. The zone also plans to invite large business firms to its industrial areas through a drastic regulatory reform dedicated to improving the business environment, leading the way to the vitalization of the IFEZ.

The excellent achievement that IFEZ made last year include the relocation of Daewoo International to Songdo International City in the zone to join such large business firms as ADT Caps, POSCO Engineering, POSCO A&C and others. The University of Utah of the U.S. and the Ghent University from Belgium also opened their Songdo campuses, in a step to making Songdo an international educational hub. 

Incheon Mayor Yoo Jeong-bok, IFEZ Commissioner Cho Dong-am, and LH President Lee Jae-young hold a copy of an MOU on the implementation of the landmark Cheongna International City Tower on Nov. 10, 2014.

The Yongjong district and the Cheongna district did well last year, too, although the speed of their developments have not been able to match that of the IFEZ. In the case of Yeongjong Island, it won a license to build a resort and gambling complex for foreigners from the Ministry of Culture, Sports and Tourism, which is being promoted by LOCZ (Lipo and Caesars). The developer broke ground for the construction of Paradise City, and CTF of Hong Kong officially submitted its intention for investment to formally build a base for the development of the huge project on the island. In addition, Hana Financial Town broke ground and so did City Tower, a landmark building in the zone, which is being pushed by IFEZ.

Among the noticeable developments: a project being promoted by a number of Korean businessmen in the U.S. found a way to solve the ownership rights for a project. Songdo Landmark City Ltd. also solved its problems, opening the way for the development of the Nos. 6 and * districts in the zone.

But things don’t look as bright for IFEZ this year as many Korean business firms are increasing their overseas investments. But the government’s policies to block the outflow of funds from the country, and the policies to boost the growth of the service industry, should help the IFEZ in its drive to make the zone a hub for the service industry, especially because of the government’s policies to ease the real estate market. The government policies are expected to be a big boost for the IFEZ’s various development projects in the zone.

IFEZ could go shoulder-to-shoulder with Hong Kong and Singapore as a global business hub if it does all right with its projects this year, but if it doesn’t, it will fall behind those cities and be just an average economic zone, which is a big concern for IFEZ.

IFEZ’s experimental areas designation and others included in the draft of the Economic Free Zone Designation and Operation Special Law Part Reform Plan has been submitted to the National Assembly for approval. The bill is still in the Industrial Committee of the Assembly and the easing of regulations to create an ecological system and set up experimental areas are still to be realized, slowing down the development of the zone.

A view of the Songdo International Business City in Incheon Free Economic Zone.(Photos:IFEZ)

IFEZ will turn itself into a base for the Creative Economy, an advance base for the service industry, and attract investors with top business conditions. It also aims at turning the zone into a Green Smart City. Those are the three most important objectives for the zone this year in boosting its position as a global business hub city.

IFEZ will go all out to be designed as a model district to ease regulations in recognition of its qualities. It makes up 0.1 percent of total land in Korea and 0.4 percent of the population.

That’s good enough to be considered the top model for the experimentation of loosening regulations. The zone will ultimately be a reform base in strengthening the national economy and securing future growth. 

IFEZ also has a plan to cut the minimum investment from 700 million won per investor to 500 million won for foreign investors in order to allow more people to get permanent visas to stay in Korea. That was encouraged by President Park Geun-hye in her New Year speech in which she said the deregulation of the Capital Area will be allowed from this year.

IFEZ will also go ahead with a plan to set up Smart MICE District in the zone, alongside its plan to develop the service industry, to make the zone an advanced base for the service industry. The MICE Industry is connected with many industries, including convention facilities. But in view of the industries function separately, it plans to develop contents, platform, and network, among others, for their fusion. IFEZ will give a strong push to strengthen the MICE Industry to boost competitiveness by promoting the second phase of construction of the Songdo Conventia. It will be successfully leased by completing the selection of the SPC project owner by June so ground can be broken for the project as planned.

The LOCZ resort complex will break ground and boost the competitiveness of the Yeongjong Island Multiple Resort. There are already strategies to build it bigger and more complex with ease access. CTF, one of the four richest groups in Hong Kong, got a license to invest $1 billion on the island. Paradise City’s project is on course to be completed by June 2017, with its first stage project well under way.

Songdo City will soon be the largest bio hub in the world, with bio-production capacity rising to 330,000, liters far above San Francisco’s 240,000 liters and Singapore’s 160,000 liters. The city still wants to attract global business firms, with high-level technologies with high value-added products, such as Sigma Aldrich of the United States to make the city an Asian-type model for the bio-industry.

IFEZ will also go ahead with a strategy to turn itself into a global base for such growth industries as IT and BT. Incheon City gave a big push to the eight strategic industries as its future growth engines. The zone will also help develop electronics parts and electronics equipment with the development of environmentally friendly automobiles. Also, industries related to the semiconductor chip manufacturers will be extensively sought after to locate their plants in the zone. IFEZ will also give a big push to invite the investors for the global and Asian training centers and engineering service facilities.

A nightly view of  part of the Songdo International Business City with the NEAT Tower in the center.