Incheon Free Economic Zone (IFEZ): A Double-edged Sword for the Korean Government By: Da Young Kim

Screen Shot 2016-02-09 at 8.25.32 PM.pngIncheon Free Economic Zone (IFEZ): A Double-edged Sword for the Korean Government

By Da Young Kim, Staff Contributor

The Free Economic Zone is an area where business and economic activities of foreign investors are encouraged and promoted. Business-friendly treatments over the systems, conditions and regulations are distinguishable from not-so-free economic zones. Such favorable treatments include taxation support, free economic activities, high quality administrative services, favorable customs regulations and a convenient living environment.

In 2003, the South Korean government designated the Incheon Free Economic Zone (IFEZ) in an effort to “secure its preeminence as a business hub and accelerate competition with regional neighboring economies.”[1] The IFEZ is the first of three Free Economic Zones in South Korea, along with Busan/Jinhae and Gwangyang areas. Among those three designated Free Economic Zones, Incheon was the first designated area and is expected to “[have] the most potential.”[2] The IFEZ encompasses the regions of Yeonsu-gu (Songdo District), Jung-gu (Yeongjong District) and Seo-gu (Cheongna International City), located in the west coast, adjacent to Seoul. The total area is approximately 32,840 acres, three times the size of Manhattan in New York.

While the IFEZ arouses great excitement across the country with hopeful expectation and predictions that Incheon will become “a new source of national growth potential,”[3] there are few expressed concerns or considerations about environmental effects or problems that such development plan may bring to Incheon and the Korean Peninsula.

The IFEZ of Korea is often compared with China’s Special Economic Zones, including Shenzen, Shantou, Zhuhai, Xiamen and Pudong and benchmarking China’s splendid success and economic growth achieved in the SEZs for its own development. However, the Korean government does not seem to be paying enough attention to “severe consequences for the environment” which accompanied the “rapid economic development” achieved in the SEZs.[4] The explosive growth of population in Shenzen SEZ after the development in 1992 led to excessive landfills, tremendous increases in waste, deforestation and soil erosion.[5] Other problems include air quality problems caused by overconsumption of energy, water quality problems caused by industrial, human and animal waste, noise pollution, toxic contamination and the loss of wetlands.[6] Such environmental problems are not limited to the land of China. In fact, “yellow dust” from China crosses the borders and threatens the atmospheres of Korea, Taiwan and other east Asian countries.[7] Of course, we should not witch-hunt China for all of the environmental issues in the world, but it may be hard not to see those excessive developmental plans in China had contributing effects to ozone depletion and climate change which the east coast of the United States directly experienced just a few days ago in the deadly blizzard Jonas.[8]

The Korean government shall not be immunized from any criticism or remorse if and when such severe environmental consequences, which could possibly be caused by the economic developments in the IFEZ, threaten the health and well-being of the people in Korea and the world and of our planet Earth. Now, as standing in the middle of the IFEZ development period, Korea should be seeking not only more and better investment opportunities or development plans, but also more intensive and rigorous environmental regulations or protection projects, suitable for the fame and integral status of the “business hub” that is yet to come.

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[1] Promotion Background, Incheon Free Economic Zone Authority (2014), http://www.ifez.go.kr/eng/en/m1/background/screen.do.

[2] Chungjin Kim, A Study on the Development Plan of Incheon Free Economic Zone, Korea: Based on a Comparison to a Free Economic Zone in Pudong, China 1 (2007), available at https://scholarsbank.uoregon.edu/xmlui/bitstream/handle/1794/4212/kim_c_terminal_project.pdf?sequence=1.

[3] Incheon Free Economic Zone Authority, supra note 1.

[4] Joon H. Kim, Korean Environmental Regulations: Ready to Take on One of the World’s Largest Private Real Estate Development Projects? 15 Pacific Rim Law & Policy Journal 489, 493 (2006).

[5] Id.

[6] Id.

[7] Id.

[8] Jonas is a major blizzard which produced up to 3 feet of snow in parts of the Mid-Atlantic and Northeast United States from January 22-23, 2016.

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