"Foreign Investment Performance in Economic Free Zones Down 56% Over 4 Years"

FDI Share in Free Economic Zones Shrinks from 10.8% to 4.4% Nationwide
Serious Discrepancy Between Reported and Actual Amounts... Gangneung and Donghae at 3.9% Over 10 Years

Incheon Free Economic Zone Authority.

[Asia Economy Reporter Moon Chaeseok] Foreign direct investment (FDI) attraction performance in economic free zones has decreased by 56% over four years. Considering that economic free zones were established to promote foreign investment and balanced regional development, this performance is seen as disappointing.

Source: Office of Shin Jeong-hoon, Democratic Party of Korea.

According to data submitted by the Ministry of Trade, Industry and Energy to Shin Jeong-hoon, a member of the National Assembly's Industry, Trade, Energy, Small and Medium Enterprises Committee from the Democratic Party of Korea, FDI performance in economic free zones has sharply declined to the lowest level in the past five years.

It decreased from $2.3 billion in 2016 and $1.69 billion in 2018 to $1.02 billion last year. The performance last year was down 55.7% compared to 2016.

The share of FDI performance in economic free zones compared to the entire country is also shrinking.

It continuously decreased from 10.8% in 2016 to 7.4% in 2017, 6.3% in 2018, and 4.4% in 2019.

Source: Office of Shin Jeong-hoon, Democratic Party of Korea.

Moreover, there is a serious gap between reported amounts and actual arrivals. Over the past decade from 2010 to June this year, the average ratio of actual FDI arrivals to reported amounts by economic free zones was only 44.5%.

The annual arrival ratios were 39% in 2015, 37.4% in 2016, 33.7% in 2017, and only 25.5% last year.

During the same period, the regional average arrival ratio was lowest in the East Coast area (Gangneung and Donghae, Gangwon) at 3.9%.

Hwanghae (Pyeongtaek and Siheung, Gyeonggi) was 7.4%, Gwangyang Bay area (Yeosu, Suncheon, Gwangyang in Jeonnam and Hadong in Gyeongnam) 24.7%, and Saemangeum Gunsan 36%, all showing low figures.

Representative Shin said, "The government should focus on attracting key industries in each zone, such as strategic industries with high value-added effects, high-tech fields, and sectors with high production inducement and employment creation effects. Especially, projects expected to involve large-scale investments or have significant ripple effects should be continuously managed to ensure actual investments are made."

This content was produced with the assistance of AI translation services.