Saemangeum to Fuel North Jeollas Industralization
By Do Je-hae
The identity of North Jeolla Province as a national breadbasket is expected to be transformed over the next 10 years with the completion of a free economic zone, in an area that is often considered one of Korea's most underdeveloped regions.
The province's reclaimed Saemangeum area and port city of Gunsan will jointly house an international business complex by 2020, devoted to boosting the automobile, shipbuilding and machinery industries, and tourism.
``North Jeolla's main economic contribution to Korea has formerly been its granaries. The ongoing Saemangeum landfill, however, will significantly alter the way we take part in national growth,'' Lee Choon-hee, commissioner of the Saemangeum Gunsan Free Economic Zone (SGFEZ) Authority, said in an interview with The Korea Times.
``A late bloomer in industrialization, North Jeolla Province, or Jeonbuk, has particularly high hopes for the role of the free economic zone in ultimately reshaping the industrial landscape of Korea,'' Lee said.
Saemangeum Landfill Project
With a 30-year bureaucratic career, the 54-year-old has taken part in development projects in almost all parts of the country. However, he maintained that he has never seen anything like the Saemangeum reclamation in terms of its historical and industrial significance.
``The project will ultimately give Korea an additional 401 square kilometers of land, equal to two-thirds of the total area of Seoul or 160 times the size of Yeouido. It is simply the largest such project since the founding of the nation and one of the world's largest landfills,'' explained the administrative expert in construction and transportation.
The government first embarked on filling the Saemangeum estuary in 1991 to create more land and a freshwater reservoir along the country's southwestern coastline.
The centerpiece of the monumental project is the Saemangeum Seawall, a 33-kilometer barrage in the West Sea connecting Gunsan, 270 kilometers southwest of Seoul, with the other major Jeonbuk cities of Gimje, Buan and Iksan. The adjacent waters will be reclaimed for industrial, agricultural and tourism development as well as the eradication of water shortage problems.
The seawall, situated south of Gunsan, is the longest such facility in the world. It will open for transportation and tourism services in December. Local officials said that an estimated 6 million tourists will visit the seawall and adjacent maritime leisure facilities on its signature island of Gogunsan per year.
Main SGFEZ Features
There are currently six free economic zones in the country, including the metropolitan cities of Incheon, Busan and Daegu, which are already established as the country's key industrial players.
Korea launched the SGFEZ Authority less than a year ago to oversee the construction of the SGFEZ and develop administrative services for the domestic and overseas businesses to be housed there.
The background for establishing a free economic zone in the southwestern coast is closely associated with Korea's urgent need to compete with China, one of the world's fastest growing economies.
``The economic rise of China has opened Korea's eyes to the strategic importance of nurturing the business potentials of the West Sea area by establishing high-tech industries,'' Lee said.
Korea designated the Saemangeum and Gunsan area as its sixth and final free economic zone in May 2005, pronouncing its design would make full and strategic use of the Saemangeum reclamation, and fulfill Jeonbuk's long aspirations for a national project that would secure balanced development for the region.
Lee explained that the SGFEZ, spanning 66 square kilometers and budgeted at 5 trillion won, has three main features ― an industrial complex, tourism and leisure facilities and finally, research, education, and residential areas.
The industrial area will account for more than half of the total space of the free economic zone, with another 33 percent to house research centers, as well as homes and schools for domestic and international workers of tenant businesses.
``Besides focusing on knowledge-based industries (automobiles, shipbuilding, machinery, high-tech parts and components), the SGFEZ will be devoted to developers of renewable energy and bio technology,'' Lee said.
Foreign Investors in SGFEZ
Industry experts have said that the key to the success of a free economic zone is to expand tourism facilities and attract visitors from home and abroad.
Last week, the SGFEZ secured its first foreign investment from a Saudi Arabian developer, which has committed to building one of the largest hotels in the country in the Saemangeum area by 2012.
Officials of the S&C and Gunsan City signed a memorandum of understanding (MOU) on June 25, sealing the company's $236 million investment to build a 47-story leisure facility as a landmark of the SGFEZ on the scenic island of Bieung, serving as a gateway to Saemangeum.
``Saemangeum's infinite potential led us to make this commitment, which will hopefully prompt more foreign investment, especially from the Middle East, to the region,'' the president of the S&C told reporters at the signing of the MOU.
The global economic downturn does not make for the best of circumstances in attracting foreign businesses, but Lee said that some hopeful signs are emerging, as in the case of the recent Middle East engagement.
In particular, recent reports indicate that businesses based in China are interested in future Saemangeum investments.
``We are still trying to raise the profile of the SGFEZ in the global business community. Since the opening of the SGFEZ Authority, we have constantly maintained contacts with interested corporations from other parts of Asia, Europe and the United States,'' Lee said.
Advantages of the SGFEZ
The SGFEZ Authority is determined to follow up the case of the Saudi Arabian investment with many more similar initiatives in the years ahead with a host of incentives and advantages that are unique to the SGFEZ.
``The biggest advantage of the free economic zone is its spacious and affordable land, providing a long-term lease up to 100 years to domestic and foreign companies,'' Lee said, stressing that no other free economic zones in the country offer such extensive and generous lease terms.
Currently owned by the state, the reclaimed areas are not bound by any private ownership and pertinent regulations, backing the SGFEZ's position that that its leasing process is simpler and faster than those of other similar ventures in the country.
``In addition, we offer eased regulations for income and corporate taxes for foreign investors for the first seven years of business and give cash incentives mounting to 5 percent of the total investment per corporation,'' Lee said.
It has also established online one-stop service portals and call centers in various parts of Saemangeum to facilitate administrative procedures for potential domestic and foreign investors.
In 2003, Korea joined a long list of countries, including China, India, Malaysia and the United Arab Emirates, in designating Free Economic Zones (FEZ) with light taxes for two specific reasons.
``A free economic zone in Korea first serves to create more friendly business conditions for foreign investors and secondly, to seek a balanced growth of all provinces,'' said Lee of the SGFEZ Authority.
A key national agenda item of the previous Roh Moo-hyun administration was seeking balanced regional development. It paid particular attention to placing formerly underdeveloped provinces such as North Jeolla or Chungcheong provinces on the industrial map of the country through new development ventures.
Lee served as vice minister of the construction and transportation ministry under the Roh administration and is a staunch supporter of the FEZ initiative currently underway across the nation ― Incheon, Busan-Jinhae, Gwangyang Bay Area, West Sea, Daegu-Gyeongbuk and Saemanguem-Gunsan.
``The project is part of the country's efforts to develop sustainable growth engines for all parts of Korea. Such efforts must be maintained in the future,'' he said.
Ultimately, the FEZs are aimed at building world-class cities with an optimal business environment based on policies of global standards and catering to multinational and multicultural communities. They will additionally be equipped with quality schools, hospitals, transportation and tourist facilities.
Lee thinks that the FEZ project could also lead to changes in Korea's relative hesitance to embrace foreigners.
``Korea will hopefully become more open toward foreigners and global businesses through more international exchanges, an integral element of the FEZ project,'' Lee added.
Some reports of the international media attacked Korea for creating too many free economic zones. However, the government contends that each of the six zones have their own geographical and industrial merits that will lure foreign investors, transforming Korea into an international business hub for Northeast Asia in the long run.
Besides the SGFEZ, some parts of the Incheon Free Economic Zone are also housed on reclaimed areas, namely Songdo, home to the Incheon International Airport.