IFEZ, Potential
Magnet of Foreign
Investment
Emerges as the logistic hub of Northeast Asia

Two years have passed since the Incheon Free Economic Zone (IFEZ) was inaugurated as Korea's first free economic zone aimed at facilitating foreign investment, creating a foreign business-friendly environment and enhancing living conditions of foreign residents under the government's ambitious Northeast Asian business hub scheme. Despite such a short period of time, IFEZ is shaping up as the logistics hub of Northeast Asia by capitalizing on such strong points as its geographic advantage of being located at the center of the economic block of Northeast Asia, emerging as a colossal world market.
In reality, the economic bloc of Northeast Asia is becoming as a colossal market in comparison with the EU and NAFTA in the 21st century. Even observing the aspect of population, the Northeast Asia region is huge with a population of 2 billion, which surpasses the EU market with a population of 400 million and NAFTA market with a population of 1 billion.
Take a look into Northeast Asia's portion of global containers transport surging from 38 percent in 1990 to 48 percent in 2002, indicating that the logistic hub of the globe is being transferred to Northeast Asia.
The region has also witnessed remarkable economic growth rates. Experts are forecasting the economic bloc of Northeast Asia to continuously grow by 6 to 7 percent with the global economic growth rate of 2 to 3 percent in the future. The center of such changes in the economy lies with the rapid growth of the Chinese economy.
IFEZ is located at the center of the economic block of Northeast Asia drawing the attention of the world. As the advance base into China, IFEZ has a geographical advantage connecting China, North America and Europe. It is noteworthy that China's coastal cities, including Qingdao, Tianjin and Dalian, and Japan are situated less than two hours in flight time, and as many as 51 cities, each with more than 1 million in population, are located within three and half hours in flight time centering around Incheon.
Another advantage for IFEZ to become the logistics hub of Northeast Asia is that it is establishing the sea and air multimode logistics system. Incheon International Airport and Incheon Port are playing a role in both areas in order to rise as the hub of Northeast Asia.
Incheon International Airport has already entered the world? top three in logistics transportation and top 10 in passenger transportation. The airport will process 44 million passengers and 4.5 million tons of freight by 2008, and will gross ultimately to be the gateway of Northeast Asia by processing 100 million passengers and 7 million tons of freight by 2020.
Incheon Port, which opened in 1983, is also attracting the attention as the hub of the Asia-Pacific economy and the pivotal point of East Asia in the 21st century. Incheon Port is becoming serious about expanding facilities, including establishment and enlargement of Songdo New Port, North Port and South Port. With the opening of the Incheon Container Terminal invested by Port of Singapore Authority in July last year, it has provided a stepping stone for becoming an international port with a competitive edge through opening of the out port era along with a reduction of port charges.
The positive goals of attracting investments into the Incheon Free Economic Zone (IFEZ) are "A task of Reviving Our Economy"s its first goal, and "A Task of Opening North Korea through Linking with the Gaeseong Industrial Complex"as its second goal. IFEZ CEO Lee Hwan-kyun said, "First, the attraction of investment in the IFEZ could be a "Shortcut in Reviving Our Economy."The attraction of foreign investment will enhance the efficiency of our economy still more by introducing both overseas cutting-edge technology and advanced management technique, the activation of stagnant economy through creation of employment, and the settlement of new advanced-type industrial structure of all things."
"Secondly, the attraction of investment in the IFEZ could become 'A Catalyst of Opening North Korea.' The launching of the Gaeseong Industrial Complex provides North Korea with an opportunity to learn about a market economy, improving the relations between South and North Korea based on economic benefits. A distance between Gaepung-gun of Gaeseong, North Korea, and Ganghwa-gun of Incheon is merely 1.4 km. Such strategic bridgehead for opening North Korea enabling support for the success of the Gaeseong Industrial Complex,"he said.
According to Lee, those three areas could become international peace zones when establishing a manufacturing area of the Gaeseong Industrial Complex with an area of 82,000 acres as a supporting base of the IFEZ and linking with capital of Seoul.
When such is accomplished, the Demilitarized Zone (DMZ), the only vestige of the Cold War Era, will be no longer be a DMZ any longer, and could be reborn as "DMZ (Dream-Making Zone), nurturing a dream of unifying South and North Korea. We assure you that such a cornerstone opening "A Triangular Belt of Peace"is possible." "Now we will build a beautiful bridge like the Golden Gate Bridge in the IFEZ, namely the Incheon Bridge to connect Songdo City with Yeongjong-do. We can say that a bridge like the Golden Gate Bridge brings literally tremendous benefits to the local economy. The bridge not only provides a vital link in the area's highway system, but it also attracts tourists to enhance the income of local residents,"Lee said. The Golden Gate Bridge in San Francisco is one of the world's most beautiful bridges. Millions of people make trips to visit the bridge and admire its scenic landscape, with a lovely shade of "International Orange,"or orange vermilion.
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 Incheon International Airport.
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 20, 2002. Last November 11, Gail 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.
The government has pitched foreign investors in three economic zones in Incheon, Busan-Jinhae and Gwanyang as part of its plan to develop Korea as a northeast economic hub, capitalizing on its geographical advantage and superb logistical and industrial infrastructure.
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 IFEZ targets four hubs - High-tech Hub accommodating IT, BT and other R&D cluster; logistics hub centering on Incheon International Airport; 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 surpassing tourist courses in the mountainous, coastal areas and islets, diverse maritime sports and entertainment facilities, including international theme parks.
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IFEZ CEO Lee Hwan-kyun
IFEZ CEO Lee Hwan-kyun shakes hands with Giuliani, ex-mayor of New York after discussing the IFEZ during his visit to the United States.