The Busan-Jinhae Free Economic Zone (BJFEZ) ranked 1st overall in the 2015 performance evaluation of seven free economic zones, followed by the Incheon Free Economic Zone (IFEZ) and the Gwanyang Bay Area Free Economic Zone (GFEZ).

The Economic Free Zone Commission held its 85th session on May 31 and announced the results of the 2015 performance evaluation of seven FEZs across the nation, said Dir.-Gen. Kwon Oh-jung of the Planning Office of the Free Economic Zones under the umbrella of the Ministry of Trade, Industry and Energy. 

The evaluation, which made its debut in 2010, was conducted by a committee consisting of fewer than 15 outside experts based on overall evaluations, including paper and on-site observation evaluations. 

According to the outcomes of the 2015 evaluation, the economic zones saw “development rate” rise to 60.1 percent in 2015, up 5.7 percentage points from 2014, which is higher than the average 4.9 percentage points seen between 2004 and 2014. The rise in the development rate was owed to restructuring and efforts to develop the FEZs. A combined 10.83 square kms in the IFEZ and the BJFEZ, which had been unplanned due to delayed development, has been restructured for development, while seven districts, part of the undeveloped areas, are now under development. 

Korean companies’ investments into the FEZs amounted to 4.19 trillion won in 2015, a 44 percent jump over 2.91 trillion won in 2014. Foreign direct investments (FDIs) into the FEZs stood at $1.46 billion in 2015 on a report basis, a decline from $1.82 billion in 2014. The 2015 figure represents a 7 percent share of the total FDI the nation attracted during the year. 

Continuing the progress of development and expanded investments, the FEZs saw the number of employees rise 6,200 to a combined 96,000 in 2015.  

By five segments, the BJFEZ topped the category of “attracting investments,” while the IFEZ ranked first in the category of the implementation of development projects. The GFEZ topped in the category of project/institutional operation, corporate support, and settlement environment. 

The best practices explored during the evaluation will be shared and spread, and they will be utilized to max out the attracting of investments. 

The IFEZ’s ability to attract investments to its bio complex is one of the best practices concerning development and investment that was analyzed during the 2015 evaluation. Such bio makers as Centrillion, Samsung BioLogics and DongA Socio Group have moved into the bio hub in Incheon, making it a single city with the world’s largest-ever bio-medicine production capacity. In order to attract investments into the bio complex, the IFEZ signed a deal on investments with Samsung BioLogics in 2011. Under the agreement, the first plant, dedicated in July 2012, was put into operation in 2015, and the second was dedicated in February 2015. A ground-breaking ceremony to build a third plant took place last December, building a bio-drug production hub. The second and third phase projects cost a combined 1.6 trillion won and create approximately 1,300 jobs. In the case of the completion of the third phase, an additional 700 jobs will be created.  

Likehome invested $2 million and launched a project to build a 1,200-room dormitory for employees of tenant companies of the IFEZ in cooperation with KEA Limited Partnership. The dormitory project in the Incheon Knowledge Information Complex, which was launched in 2015, is designed to solve a shortage of boarding houses for employees of tenant companies. When the dormitory is dedicated late this year, it will likely improve living conditions for employees of tenant companies. Rents vary from 450,000 won for a one-person room to 500,000 for a two-person room, cheaper than those of the existing officetels of a similar size. 

The BJFEZ has been credited with solving Dudong District’s long-standing problem of underdevelopment. is the subject of class action complaints by introducing a method of exchanging land parcels and gaining substantial ground in the execution of projects in the district. 

The BJFEZ plans to develop the district into a housing-cum-advanced port logistics city by 2018. Fifteen logistics companies will move into a 358,660-square meter area, and 22,000 people of 8,007 households will be settled down into a housing area. The project will have a spill-over effect to the industry and local economy worth 3.5 trillion won and creating 5,000 jobs. Landowners of the land swap area will be allowed to execute their property rights in August. 

Sixty-eight companies — two Korean and sixty-six foreign-invested firms — have moved into the New Port Hinterland District of the BJFEZ. Fifty-eight companies are in operation, and 10 companies’ logistics centers are now under construction. The district attracted $22 million in investments from two Japanese logistics companies. Nippon Express, the global No. 4 logistics company, invested $12 million in 2015 in building a logistics center, which is expected to pursue value-added business models beyond the simple cargo working, storage and logistics. Naigai Trans Line Korea invested $10 million in 2015 in constructing a logistics center to offer diverse value-added logistics services. 

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Skyscrapers spring up in Songdo, part of the Incheon Free Economic Zone. (Photo:IFEZ)

Sprawling port area of the Busan-Jinhae Free Economic Zone.(Photo:BJFEZ)

The BJFEZ aims to develop Myeongji District into a full-fledged international business-oriented city with such diverse themes as commerce, office, culture and housing, as well as multi-purpose buildings, including hotels and international conference facilities. The district has attracted $28 million in FDIs on a report basis as of Sept. 24, 2015, and FDI amounts are expected to surge to $100 million in the future.  

The GFEZ launched a project to develop the Sepung General Industrial Complex in October 2015. The project has gained ground as it has been designated as an area for developing bio/chemical businesses under the schemes of city and provincial industry strategies. The complex obtained the go-ahead for a functional chemical material cluster R&D center after passing a feasibility study and securing 5.6 billion won in national finding. It signed MOAs with four bio material packing companies and MOUs with two foreign companies. 

The Gwangyang Container Berth Hinterland Area (East Side and West Side) attracted new tenant companies and FDIs from four companies 27.7 billion won from Koreans companies and $30 million from Chinese companies, raising the possibility of fostering an industry of importing and processing fishery products from Southeast Asia, then re-exporting them to China, creating the synergetic effects of the effectuation of the Korea-China FTA. 

The Yulchon 1st Industrial Complex, targeting the primary metal and machinery equipment industries, attracted 308 billion won from nine new Korean investors, including Hyundai Steel and GSDK. 

The Daegu-Gyeongbuk Free Economic Zone attracted $45 million in investments from two foreign automobile companies into the Yeongcheon Industry Complex. In particular, The FEZ formed a one-stop support task force, offering a fast-track process — taking two weeks to hold a groundbreaking ceremony following the signing of an MOU with Ada Corp., a joint venture with China. 

Last December, the Yellow Sea Free Economic Zone signed MOUs to attract a combined 90 billion won from four companies for investments into the Poseing District. 

On April 27, 2015, prior to the lifting of the international community’s sanctions against Iran, the Chungbuk Free Economic Zone signed a deal for the establishment of Iran’s traditional medical research institute in the Osong Biovalley, calling for $2 billion over the next 10 years. 

The East Coast Free Economic Zone attracted Canada’s Dundee Corp. as a developer of the Mangsang District into a world-class tourism city. Dundee 360 East Coast Development is a special purpose company, established by Dundee Corp., and will be responsible for purchasing land, building infrastructure, developing content and operations. It is an example of a foreign developer’s implementation of a development project in Korea. A master plan for the development of Mangsang Resort City was established in May 2016.

Commissioner Jin Yang-hun of the BJFEZ said, “We’ll devote ourselves to accelerating our investment and development efforts based on the outcomes of the evaluation with the BJFEZ playing as a driving force behind the revitalizing of the local economy as a center of the Southeast Marine Economic Belt.” He extended thanks to his staff, who devoted themselves to receiving such a good evaluation.