Special Bill Should Be Enacted
to Speed up FEZ Development

Proposals to ameliorate FEZs are presented during the Sea and Economic Parliamentary Forum

Aspecial bill should be enacted to eliminate all permits and licenses within six free economic zones (FEZs) including Daegu, a proposal claims. Kim Sang-yeol, vice chairman of the Korea Chamber of Commerce and Industry (KCCI) told a forum that laws on the free international city, administrative city and innovative city should take the form of a special act, the Act on the Free Economic Zone, and should be made a special law to immediately consider such things as the easing of restrictions and the delisting of limits on development. He made the proposal at an inaugural meeting of the Sea and Economic Parliamentary Forum held at the Seoul Press Center on Sept. 4. The forum was jointly headed by Rep. Park Sang-eun of the Grand National Party and Rep. Kang Chang-il of the Democratic Party.
A poor investment environment, vulnerable living conditions and insufficient incentives
are attributable to a poorer achievement in attracting foreign investments into FEZs than expected, said Kim, adding that a proposal on making the Act on the Free Economic Zone a special law was reported to the presidential panel on strengthening national competitiveness in May.
He noted that a special act can be readjusted easily even if it contradicts ordinary codes, allowing FEZ projects, which often take more than 20 years, to advance.
Rep. Park said in a speech, "It is essential for the state to provide support for development and create an environment for attracting foreign direct investments in order to invigorate
the Free Economic Zones and make them successful."Chae Wook, president of the Korea Institute for International Economic Policy, stressed the central government's financial support in his keynote speech. "The success stories of such economic hubs as Dubai, Singapore, Hong Kong and Dublin have something in common: the central government's enthusiastic concern and financial support,"he said. "China's central government has provided aggressive support in developing the infrastructure of free economic zones,"he added as an example.
Prime Minister Han Seung-soo said in a speech, "The maritime industry is one of the core industrial sectors for low-carbon emissions and green growth, so Korea will expand its investments into maritime energy sources, including tidal power and the development of future maritime resources.
"He said the nation will build up infrastructure for elevating Korea into a logistics hub of Northeast Asia and creating a convenient and fast logistics environment.
Lee Heon-seok, commissioner of the Incheon Free Economic Zone Authority (IFEZA), said there is a widespread perception that the FEZs are "not free."
The FEZs in Korea have equal or unfavorable tax systems compared to Singapore, Shanghai and Pudong. Tax exemptions are offered only to foreign investment companies, not Korean firms, which also suffer an additional burden because they are subject to the restrictions under the act on ameliorating the Seoul Capital Area
The operation of the Free Economic Zone Committee is feared to be getting less efficient as the minister of the Strategy and Finance Ministry, which controls the committee, has been lowered from the status of deputy premier to minister and permits and licenses for each ministry remain unchanged. Despite different strategies and conditions of each of the six FEZs, a centrally controlled system could cause many problems in terms of efficiency and effectiveness.
The commissioner said steps need to be taken to raise the central government's financial support, requisite for implementing FEZ projects, as the law requires. Under law, the state is required to finance half of the expenses for building up infrastructure within the FEZs. However, the central government financed 14.1 percent of 2.86 trillion won spent for the construction of infrastructure of the Incheon Free Economic Zone for the past five years. The financial support is equivalent to a meager 2 percent
of the 21.45 trillion won the IFEZA has spent or will spend on infrastructure buildup costs by 2020. Authority should be delegated to local governments, as each provincial government is allowed to have authority and autonomy in developing each special economic zone and attracting foreign investments there.
The green light for implementing FEZ projects should be delegated to mayors or governors, a cap on real estate selling prices should be eased and the establishment of elementary,
middle and high schools should be made in time, he said. Special laws should be enacted to facilitate foreign investments in FEZs, improve the employment of foreign labor within FEZs and ease immigration rules.
Lee suggested that the boundary of the IFEZ should be expanded to brace for a boost in inter-Korean economic activities, and advanced biotech, robot and financial centers should be designated within the IFEZ. nw

(from left) National Assembly Speaker Kim Hyong-o, Prime Minister Han Seung-soo and Rep. Kang Chang-il, speakers of the inaugural meeting of the Sea and Economic Parliamentary Forum held at the Seoul Press Center on Sept. 4.

Gale International CEO John Hynes speaks at the Sea and Economic Parliamentary Forum. (far right photo) National Assembly Speaker Kim Hyong-o exchanges hands with NewsWorld President Elizabeth M. Oh.

Rep. Park Sang-eun of the Grand National Party, who jointly heads the Sea and Economic Parliamentary Forum.