 Cars pass along the 33.9-kilometer seawall road at Saemangeum, North Jeolla Province, during a trial opening in this Feb. 15 file photo. The central and provincial governments plan tax breaks and other incentives for foreign investment there. / Courtesy of North Jeolla Province |
By Cathy Rose A. Garcia
Staff reporter
Hopes are high for the Saemangeum project in North Jeolla Province, but there are questions about the so-called future East Asian hub's ability to compete for foreign investments, especially with China.
Success for the Saemangeum project lies in the government's ability to attract private sector investments, according to Brian Newman, CEO of Green Cities Asia.
Other critical success factors include Saemangeum achieving the ``Green City'' vision; government execution of the project; planning and infrastructure; and management of its scale.
``Government also needs to carefully manage expectations. Be realistic about the time frame of the project. It's not a 10 or 20 year project. It is a 50 year project. Development would take time... And at the end of the day we want quality," Newman said, during the ``Hard Talk on Saemangeum'' at the Lotte Hotel, downtown Seoul, Friday.
A panel of real estate experts and government officials debated the feasibility, challenges and opportunities facing the Saemangeum project. The 33.9-kilometer seawall in the West Sea opened April 27 and is being developed to become a tourism and industrial complex by 2020. The seawall was built at the cost of $2.6 billion by the government, but the entire development of the area is expected to cost up to $18.1 billion, which includes private sector investment.
However, Saemangeum is competing with China, and other countries, for foreign investments.
Nevertheless, Julie Ahn, managing director of the investment department at DTZ Korea, said Saemangeum can leverage China's growth for its own development. With its central location in the Pan-Yellow Sea region, the area can be a gateway to the lucrative Chinese market.
``Competing with China is a challenge... But we need to make use of China's growth. We can be the stepping stone for investors who are interested in making investments in China. Saemangeum can be a city through which they can enter China. So how we promote Korea's strengths and leverage its capabilities will determine our future success,'' Ahn said.
Kim Young-mahn, investment strategy director of the Saemangeum Gunsan Free Economic Zone Authority, said there are on-going efforts to attract foreign and domestic investments, and to invite companies involved in green industries, entertainment and tourism businesses.
Also, Kim Hun-jung, director of the Executive Office of Saemangeum Development Planning at the Prime Minister's Office, said the government is attempting to create a more investment-friendly environment.
``The government is trying hard to stimulate foreign investments through infrastructure, transportation, regulations, systems and development of a business model to create a value chain,'' said Kim.
Saemangeum will have a high-class transportation infrastructure such as a new sea port, highway system, and railway as well as an expanded Gunsan airport. Tax breaks and incentives are also being dangled to encourage foreign investments.
Saemangeum also has to compete with other free economic zones in Korea. ``We need healthy competition. It is the only way to strengthen competitiveness and develop the region. Saemangeum has its unique characteristics that are necessary to become an East Asian hub. We have the full potential to realize this,'' Kim said.
Domestic investments in Saemangeum are being encouraged, as well as private and public sector partnerships. ``Domestic investments are needed to prove that Korea is confident and sends a signal to foreign investors that domestic investors are supporting this project. Foreign investors will come if they see there are benefits to this,'' Ahn said.
There is much potential in Saemangeum as a ``Green City,'' as it is expected to follow the low-carbon, green growth development model. Newman believes that Saemangeum becoming Korea's first real ``green city'' can help make it stand out from other economic zones.
``There is a wonderful opportunity here to implement a Green Economy model. It's not just about supporting corporations in green technology, but about taking all the wonderful entrepreneurial and technical expertise and bringing it and demonstrating it in a new city model... It is about city development, transportation and renewable energy,'' Newman said.
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