Journal of the Korean Geographical Society, Vol. 46, No. 5, 2011(662~672) Songdo Free Economic Zone in South Korea: A Mega-project Reflecting Globalization? Kim Jun-Woo* · Young-Jin Ahn** 인천 송도 경제자유구역 개발 특성 -세계화를 반영한 거대 프로젝트인가?- 김준우*·안영진** Abstract：The actual mechanism of Songdo Free Economic Zone in Incheon, South Korea, has been provided. Contrary to previous researches, which either consider globalizing market force as naturally causing mega-projects or regarding the state as orchestrating mega-project in order to upgrade a national economy, this paper adopts a new approach. This approach acknowledges the importance of state in building Songdo. However, motivations of the bureaucrats were more about their own interest rather than that of the state. The plan of making Songdo a global business hub such as Singapore was not carefully planned. Boosting up local economy by initiating huge construction project and expansion of the bureaucratic organization were also important. The foreign school in Songdo, which is open to local children, is good news to high bureaucrats who are likely to send their kids abroad for education. Key Words : Songdo, Free Economic Zone, Business Hub, Incheon, South Korea 요약：이 논문은 우리나라 인천 송도 경제자유구역의 개발 기제를 밝혀보려고 한다. 세계화하는 시장의 힘이 송도 경제자유구역 개 발과 같은 거대 프로젝트를 실행하도록 추동한다거나 정부가 국가 경제를 한 단계 더 발전시키기 위해 거대 프로젝트를 추진하도록 한다고 주장하는 이전의 연구들과 달리, 이 논문은 새로운 설명 및 접근 방법을 모색해 보았다. 이 새로운 설명 방법은 송도 경제자유 구역의 개발에서 국가의 중요성이 인정되지만, 그 구체적 개발 배경 혹은 동기에서는 국가 자체의 이해관계보다 관료들의 이해관계 가 한층 중요하게 작용하였다는 점이다. 송도를 싱가포르와 비슷한 글로벌 비즈니스 허브로 구축한다는 계획이 체계적이고 사려 깊 게 수립되지 않았으며, 대형 건설 프로젝트를 시행함으로써 지역 경제를 활성화하고 관료 조직을 확대하는 것도 중요한 요인이었다. 지역 초중등 학생들을 위해 신설한 송도 외국인 학교는 교육 목적을 위해 자녀들을 외국으로 유학시키려는 고위 관료들에게는 좋은 뉴스거리였다. 주요어 : 한국, 인천, 송도, 경제자유구역, 비즈니스 허브 1. Introduction animal: the multi billion-dollar mega infrastructure project (Flyvberg, 2003: 1). Wherever we go in the world, we are confronted with a new political and physical To hear planner John B. Hynes tell it, the rise * Professor, Department of Sociology, Chonnam National Univeristy, [email protected] ** Professor, Department of Geography, Chonnam National Univeristy, [email protected] -`662`- Songdo Free Economic Zone in South Korea: A Mega-project Reflecting Globalization? of New Songdo City will be as dramatic as the Subsidies are provided on land, building, and resurfacing of Atlantis. With more than 4.6 million employment. Public documents are issued in square meters of office space and half a million foreign languages. Hospitals for foreigners will be people, a city larger than downtown Boston will provided. Even local labor regulations are eased. materialize off the western coast of South Korea, Businesses in the FEZ do not have to hire certain near Incheon, where once there was only water. quota of employees who are disabled, the Golf courses and parks will emerge like emeralds elderly, and with national merit. Unpaid holidays in the sun. New communities will magically take and unpaid leave are allowed (IFEZA, 2011). root in 35,000 homes (Newsweek, 2004 March 29). Infrastructure construction has been literally spectacular. The size of Songdo (53.4 square In the late 1990’s, the City of Incheon began kilometers), almost equal to the size of Manhattan reclaiming approximately 3,000 acres of land island, has not yet limited its ambition. In 2009, along the southwest edge of the Incheon City world’s fifth longest cable-stayed bridge (21.38 coastline (Gale Company, 2004). This man-made kilometer) bridge linking Songdo to Incheon island was originally planned for building International Airport was built (Incheon Bridge urgently needed homes in this industrial city Corporation, 2010). In charge of this project is nearby the Capital of South Korea. Incheon Bridge Corporation, a joint venture The fate of this new land took a sudden turn in between the UK-based AMEC and Incheon city December 2002. The Korean Central Government government (Korea Herald, 2009). then approved Incheon City’s request to Songdo international business district, with its designate three districts including Songdo as ‘Free $35 billion price tag, is one world’s ten largest Economic Zone’ (FEZ) with numerous tax construction projects (Engineering News Record, incentives and benefits (Gale Company, 2004). 2010). In early 2001, the City of Incheon granted The goal of the city and central government is POSCO E&C - a subsidiary company of POSCO, to turn Songdo into ‘the Hub of Northeast Asia’ the 2nd largest steel manufacturer in the world - (Gale Company, 2004). New Songdo is to be one with a 6month developer designation to act as of many aspiring ‘gateways’ to China, and will be the lead Master Plan Developer for the first 1,500 competing for that trade with rivals from acres of reclaimed land at New Songdo City. This Singapore to Japan. Government officials promise designation was subject to POSCO obtaining a foreign companies easy access to a nearby harbor foreign development partner with a majority and newly built Incheon International Airport interest in the venture. The purpose of that located in Yeongjong FEZ (Newsweek, 2004 condition was to encourage foreign investment March 29). The $5 billion Incheon International capital and user groups to New Songdo City, as Airport opened in 2001. It is capable of handling well as to insure that this new city be designed up to 50 million passengers annually (Gale and built above and beyond normal Korean Company, 2004). standards (Gale Company, 2004). The Gale In order to lure foreign investments, Songdo Company teamed up with POSCO. Around FEZ offers various incentives and better living Songdo Central Park, which is 8.5 times smaller conditions for foreigners. Tax reduction includes than New York’s Central Park, skyscrapers such possible 100% exemption of customs duties, as Songdo International Convention Center and corporate tax, income tax, and regional tax. 65-story Northeast Asia Trade Tower are located Public land can be leased up to 50 years. (Korea Herald, 2009). -`663`- Kim Jun-Woo · Young-Jin Ahn Even though filled with modern man-made 2. The state and globalization in wonders, Songdo has a long way to go to mega-project: a new approach compete with other Asian business hubs such as Singapore and Hong Kong. A report published by a government-funded research institute points out Previous researches on mega-project such as the same problem and calls for measures to solve Songdo Free Economic Zone have been static the problem (Korea Institute for International and simple. Shortcomings in previous literature Economic Policy, 2011). As of the end of April come from its preoccupation with economic 2009, Songdo and two other zones in Incheon aspect. Especially two groups who each embrace had received just under $500 million of a pledged the market and the state as driving force of mega- $6.6 billion in foreign investment, with Songdo project. This section will show that both camps developers Gale and POSCO accounting for a are not capable of fully explaining Songdo. A large share (Reuters, 2009). new approach, which acknowledges the The light and shadow of Songdo raise importance of the state and also admits its questions to be answered in the rest of this limitations, will be explored here. paper: What is the relationship between the state Market-oriented urbanists relate mounting inter- and globalization as far as mega-project such as city competition with globalization. Mega-projects Songdo Free Economic Zone is concerned? are manifestations in the built environment of the intensity of urban restructuring associated with overt urban competition (Douglass, 2000). According to this viewpoint, governments are Figure 1. Incheon Free Economic Zones Source: Songdo Free Economic Zone Authority, 2011. (http://www.ifez.go.kr/jsp/eng/business/business1.jsp, Accessed on 2011 May 15) -`664`- Songdo Free Economic Zone in South Korea: A Mega-project Reflecting Globalization? being compelled to invest in maga-projects to implementation of pro-market policies, remain competitive in ever-more globalizing deregulation becomes a political virtue and economy. The examples are abundant in Asia: consequently increases privatization ..... The Hong Kong’s Chek Lap Kok airport, Kuala planning and implementation of Songdo, a joint Lumpur’s Multimedia Corridor, and Shanghai’s venture between and American developer (Gale Pudong development. International) and a Korean construction firm To Douglass, globalization also means (POSCO E&C), was possible when the Korean shrinking power of the old traditional state. The government passed legislation allowing foreign difficulty of Asian developmental state is a good real estate investment under the auspices of the example of globalization eating away the power IMF (Steiner & Salmon, 2008). of the state: However, some urbanists are more cautious The potential for successfully formulating and about the linkage between mega-project and realizing longer-term visions is embedded in on- globalization. Olds (1998: 377) argues that the going transformation of the development model of Can$3 billion Pacific Place urban mega-project in state-corporate led societal guidance that created central Vancouver, the redevelopment of one- the ‘miracle economies’ of Pacific Asia over the sixth (80 hectares) of Vancouver’s central city, past several decades but which is no longer can not be explained sufficiently by ‘a standard viable. This highly centralized, exclusive and economic sense’ which would conceive of this opaque system of planning under a strong development process as being reflective of a ‘developmental state’ is now being effectively search by the Li Group (i.e., multinational challenged by three major forces: the rise of civil capitalists) for profit (capital accumulation), in society creating pressures for a more response to perceived opportunity (a rent gap) in decentralized, democratic form of politics; conjunction with sufficient demand (from pressures from powerful international agencies consumers).