SEJONG, Dec. 21 (Korea Bizwire) – South Korea’s government will push to reorganize the country’s numerous special economic zones that have failed to meet expectations, the finance ministry said Sunday.
The ministry said plans by 14 regional administrations to build more than 200 free economic zones, industrial innovation centers, and research and development zones have not moved forward as planned. Of these, the country has some 90 special regions dedicated to attracting foreign investments, eight large free economic zones and 13 free trade areas.
“As of March, about 43 percent, or some 145 square kilometers, of existing special economic zones have not been developed,” it said. There has been growing skepticism about special zones over the years, as they have not been able to attract sufficient investment. Some have said that having too many special zones is preventing concentrated investment that can lead to more growth.
State-run think tanks, such as the Korea Institute for Industrial Economics and Trade and the Korea Institute for International Economic Policy, are expected to announce results by the end of this month of studies on how to best restructure these zones, it said.
“Depending on the findings of the researchers, the government will move to review the feasibility of all special economic zones from scratch,” a ministry official said.
He stressed the goal will be to choose and concentrate resources in special zones that are making headway, and end favors for other non-performing areas.
The government will moreover move to prevent special zones from trying to compete for similar industries.
Policymakers announced in 2014 that they will ban further areas being designated as special zones, although they did not streamline existing ones, due to strong opposition from regional administrations.
The ministry said that plans will likely center on getting rid of large special zones that are too bulky to be developed quickly or reducing their size, and concentrating on lifting restrictions on small areas so development can move forward in a speedy manner.