IFEZA Spreads Its Wings
- Has signed 17 contracts, MOUs and LOIs worth $20.8 billion

The Incheon Free Economic Zone Authority (IFEZA)'s bid to attract foreign investments is likely to gain momentum in two years since its establishment in 2003, a ranking IFEZA said. Ahn Yong-daw, director general of the Investment Promotion Bureau at the IFEZA, forecasts that it would take at least two years for its full-fledged contacts with would-be investors to be converted into fruits.
Foreign investments have trickled in the early 2002 even before the IFEZA was established as the authority of Korea's first Free Economic Zone (FEZ) surrounding the Incheon International Airport in October last year. Leading the pack of investors who have recognized the potential of the Incheon FEZ is Gale Co., a United States real estate developer, which inked a deal on the development of the International Business District in New Songdo City, part of the FEZ area, on March 20th, 2002. As recently as last Nov. 11, Gale International Korea, a 70/30 joint venture between Gale Co. and POSCO Engineering and Construction, broke ground for the Songdo International Convention Center as the virtual start of the full-fledged development of New Songdo City.
Ahn said the IFEZA has so far signed 17 investment deals, MOU and Letter of Intent agreements worth $20.8 billion. Part of the development of the FEZ area had been already launched in the late 1980s, and its efforts to lure foreign investments will be put into high gear next year at least two years after the establishment of the IFEZA. The IFEZ area needs to be developed as a new development model of the Korean economy under the support of the central government and the people, said Ahn, adding that a process of institutionalizing FEZs is just the beginning of the ambitious IFEZ development plan. The government has pitched for foreign investors three economic zones in Incheon, Busan-Jinhae and Gwanyang as part of its plan to develop Korea as a Northeastern economic hub, capitalizing on its geographical advantage and superb logistical and industrial infrastructure.
Foreign companies tend to attach priority on relieving restrictions and stable labor relations, and they rather are less sensitive to tax exemptions and tax credits, he said.
As part of its efforts to improve living conditions for foreigners, he cited an open-minded attitude toward foreigners, better communication, and the construction of diverse amenities for foreigners and simplifying their emigration procedures. Discrimination between foreign and domestic corporations needs to be phased out in the long-term perspective, he said.
The Incheon Free Economic Zone covers three smaller areas - Songdo, Yeongjong and Cheongna - spanning a total of some 63 million pyeong or 219 million square meters, one-fifth of Incheon's total area. The IEFZA targets four hubs - High-tech Hub accommodating IT, BT and other R&D clusters; logistics hub centering around Incheon International Airport; the International Business Hub aimed at housing headquarters of multinational and domestic corporations wanting to capitalize on the manufacturing base in northern China. The Cheongna area will be developed as a tourism and leisure hub encompassing tourist courses in mountainous, coastal areas and islets, diverse maritime sports and entertainment facilities, including international theme parks.
The government has come up with the Northeast economic hub project because, caught between two economic giants, China and Japan, Korea's economy faces the risk of being "nut cracked." The FEZ areas strive to be the test bed for building up a new economic development model for Korea, which has joined the ranks of economies with slower growth rates. nw