No one could ever accuse Lee Hwan-Kyun, CEO of the Incheon Free Economic Zone (IFEZ), of lacking ambition or optimism.

Like so many other investment promotion officials in so many other locations around the world, he wants South Korea’s manufacturing industry to be transformed into a high value added proposition, and to focus on IT and R&D. He wants to attract the regional headquarters of multinational corporations. He wants Korea to capitalise on China’s growth. But he has bigger hopes too.


“I want to create world peace,” he declares.

The road to this peace leads – strangely enough – through Pyongyang. Having dealt with North Korean officials during his time as a cabinet official and having served 30 years in government, Mr Lee is no naïve optimist. But he believes strongly that a North Korean nuclear deal (should it hold) and the possibility of the opening of this long-reclusive country is worth countenancing – it is a vision that, if realised, would present a huge, historic opportunity for Korea, diplomatically and economically.

Strong position

South Korea – which has the fourth largest foreign exchange reserves in the world – is in the lucky position to not be desperate for foreign cash and this strengthens its hand with regard to investment promotion, but other considerations weigh in. “Frankly speaking, the Korean economy does not need foreign capital – what we want is to attract advanced technologies and for multinational enterprises coming into the free zones to mix with leading Korean companies to create a seriously effective way for them to serve the north Asian market, including China.”

This strategy could be even more effective if North Korea opened up and transport routes could go straight through the peninsula into China, Russia and beyond.

Mr Lee is thinking big in terms of what role IFEZ could play in a peaceful Korean peninsula and in the Asian region. “My idea is to expand [the free zone concept] to the total area of Korea, and second to expand it to the north and attract manufacturing companies into North Korea. This would minimise the unification costs of the future, and relax the tension and stabilise the region.”

A united and peaceful Korea, he believes, could serve as a bridge between China and Japan, perhaps defusing simmering tension between these two powers as well as mediating between China and the US.

Steady growth plan

One ambition Mr Lee does not have, however, is for IFEZ to follow the Middle East-style model of rapid-fire growth, which he believes is unsustainable in the long run. “Economically speaking, Korea is very different” from the UAE, for example, he says. “Balance the growth, balance supply and demand – that is important.” But he is nonetheless keen to share best practice with and learn from the experiences of successful zone operators such as the Jebel Ali Free Zone Authority, with which IFEZ has a memorandum of understanding.

IFEZ is the result of 2003 government legislation which set up three free zones in South Korea (one in the centre of the country, one in the west and one in the east). IFEZ was the first on board and is more advanced in its development than the other two. “Many projects are under negotiation,” Mr Lee reports. “We still need to put in more infrastructure though – it takes time to create such an advanced city.”

Realising the grand ambitions for IFEZ and for Korea will require time, patience and no small amount of fortitude. But the energetic Mr Lee seems undeterred.

“Forget about the past of Korea – we can be leaders of the world,” he asserts. “Since the World Trade Organization launched, all countries have the same criteria and same starting point. So certainly we can be leaders, with pride and passion.”