Foreign businesses not following through on plans to invest in FEZs: report

Foreign businesses are not following through on their initial plans to invest in South Korea's free economic zones (FEZs), a report by the National Assembly Budget Office said Sunday.

The findings showed that of the 31 cases that could have brought in US$27.82 billion worth of overseas investment from 2004 onwards, there were 18 investments worth a combined $17.18 billion.

"The total actual investment that took place stood at about 58 percent of what should have arrived, while in monetary terms it reached 62 percent of the expected amount," said a budget office official.

South Korea wants to induce foreign investment in the FEZs of Incheon, Busan and Gwangyang. The special areas aim to help create more jobs and business opportunities.

The latest report also revealed most foreign investment coming into the FEZs were focused on building logistics and port facilities, which does not conform to a key goal of attracting foreign companies to generate high-quality, value-added jobs.

It said there were almost no cases involving investment in state-of-the-art projects.

There has been no headway on plans to build a new port in Songdo, within the Incheon FEZ, and construct a Chinatown in the same region, according to the report. Also, plans to attract 20 trillion won worth of foreign investment in a joint venture by POSCO, South Korea's number one steelmaker, and U.S.-based real estate developer Gale International is drawing very little interest from outside the country, it said.

The parliamentary budget office said concerns over labor-management strife, a lack of social overhead infrastructure, the relatively small domestic market and excessive administrative red tape are holding up large-scale investments.

Seoul, July 30 (Yonhap News)