“If the central government promises more efficient assistance, the IFEZ will rank with Singapore, Hong Kong and Shenzhen much earlier than scheduled,” IFEZ Authority commissioner Lee Jong-cheol said with conviction. He added, “Though it has designated six free economic zones nationwide, a variety of regulations have hindered the attraction of foreign investment and improvement of national competitiveness, which is the very raison d’etre of the zones, such as by limiting tax incentives, deterring non-Korean medical institutions and tying the hands of domestic enterprises.” The commissioner then made some policy suggestions for dealing with such drawbacks.
First of all, he brought up deregulation and a new way of thinking about (FDI(Foreign Direct Investment). “The current approach of making much of the absolute amount of FDI, which was to overcome the shortage of foreign exchange reserves during the 1997-1998 Asian Financial Crisis, does not work any longer and I believe we should focus on how many jobs, global enterprises and innovative future growth technologies are brought in,” he commented. According to his explanation, various indices need to be made to assess the competitiveness of foreign-invested companies.
He also called for deregulation with regards to the Seoul Metropolitan Area Readjustment Planning Act. “Many elements of the legislation, such as factory location limit, are prohibiting the construction of plants or extension in the IFEZ, and major Korean companies are hesitating to move there because of such restrictions.”
Lastly, to provide a better living environment to non-Koreans, he demanded relevant laws be enacted for the establishment of foreign medical institutions, accounting surpluses be allowed to be remitted overseas, and the qualification for founding educational institutions be eased to cover for-profit organizations.
“By leading the government to repeal as many regulations as possible, we will expedite the preparation of business-friendly conditions,” he remarked, stressing that he and his staff are ready to grow the IFEZ into a business hub second to none in Northeast Asia and home to leading global enterprises.
In the meantime, the Songdo District is transforming itself into a world-class waterfront city. The combined area of bodies of water totals 9.6km2, roughly 18% of the district and many of these have been exposed to contamination, such as algae. To tackle this problem, the IFEZ Authority is to outsource a plan on water treatment and waterfront utilization, with the deadline set at the end of next year. Subsequent design work will be underway from then before construction begins in January 2014. The overall projects, worth 1.2 billion won, are scheduled to be wrapped up in early 2016.
“Various cultural facilities will be available when the water pollution is properly controlled,” he said. “Then, more profit models will be developed from the waterfront areas, raising the brand value of the zone and facilitating the attraction of investment.”