Chungbuk Free Economic Zone may close

This is the second of a series highlighting the country’s free economic zones. — ED.

Local economic hub may shut down amid mounting criticism

By Lee Min-hyung

North Chungcheong Province Governor Lee Si-jong

The fate of the Chungbuk Free Economic Zone (CBFEZ) in North Chungcheong Province is up in the air, with its plans to attract investment ending up in failure.

The government designated the CBFEZ as one of the nation’s eight free trade hubs in 2013, as part of its efforts to turn the region into an industrial cluster housing eco-friendly, bio and IT businesses.

But the much-hyped plan has drawn little attention from investors here and abroad, due to the regional government’s inept handling of the years-long economic policy.

In particular, public outrage reached its peak in April when North Chungcheong Province Governor Lee Si-jong announced he would stop funding for the CBFEZ’s years-long “eco-polis” project. This was aimed at establishing an industrial cluster in Chungju, focusing on auto parts, renewable energy and logistics businesses.

The decision came as the eco-polis drive failed to attract enough capital from here and abroad, with the CBFEZ posing a serious financial burden on the regional government. At that time, Lee explained the local government had failed to narrow the gap with private investors over details of the funding. This would have added an even more serious burden on the city and regional economy if the CBFEZ project was pushed ahead with despite predictions of little growth potential, Lee said.

The regional government has since cut the CBFEZ workforce over growing criticism that it has wasted taxpayers’ money for years without generating any tangible outcomes.

“The CBFEZ has cut the eco-polis team from 12 to eight since April when the project came to an end,” an official from the team said. “We will come up with follow-up measures for local residents who took part in the project at least until the end of the year.”

He said nothing has been decided over whether the team will be disbanded and its workforce will be relocated next year.

Other projects pushed by the CBEFZ, include the “aero-polis” and “bio-valley” project in Cheongju.

Last week, the CBFEZ held an event to win investments for the aero-polis plan whose primary goal is to establish a state-of-the-art aerospace and logistics cluster around Cheongju International Airport.

But the drive is also facing an uncertain outlook, hit hard by weak investment.

Last year, Asiana Airlines gave up its plan to invest in a maintenance, repair and operation project around the airport there, putting a damper on the CBFEZ’s aero-polis drive. The company said the decision was because of the weak business value in the area.

The bio-valley project is also in a dilemma after the CBFEZ recently failed to win a mega investment of 2 trillion won ($1.77 billion) from Iran. No outstanding foreign or local investment has since been made on the bio-polis drive there.