The Incheon Metropolitan City is one of the most dynamic cities in Korea. In 2017, its population surpassed 3 million and its gross regional domestic product (GDRP) ranked second among the nation's seven special and metropolitan cities. It beat Busan, the nation's second biggest city with a population of 3.5 million, for the first time. Mayor Park Nam-choon is determined to keep up the city's growth momentum and ensure that its economic growth contributes to enhancing the livelihood of Incheon citizens. The former lawmaker of the ruling Democratic Party has pldeged to listen carefully to each and every voice of the citizens as they are the true mayor of the city. BusinessKorea had an exclusive interview with Park to introduce his plans to make Incheon "the center of peace and prosperity on the Korean Peninsular and Northeast Asia." The following are excerpts from the interview. -- Ed.
Please tell us the main policy directions in running the city government in 2019.
In 2018, the city of Incheon took its first step toward the vision of "a city you want to live in, a city you want to build together." In 2019, all the officials in Incheon will do their utmost to enhance the happiness of citizens and speed up the development of the city. First of all, the city government will look all over Incheon to achieve a balanced development of the Original City Center, Old Town and New Town. Second, we will endeavor to promote peace and ensure that peace will be the driving force for prosperity in Incheon. Third, I will become a mayor who visits the central government and private companies to attract investment and improve the people's livelihood. Fourth, we will create Incheon where not one citizen is left out or neglected. Fifth, I will speak boldly to make sure that the citizens are proud of Incheon
Incheon is drawing attention as a growth engine for the Korean economy. Would you tell us the latest growth trend?
According to Statistics Korea's “2017 Regional Income Report,” Incheon ranked second in the nation for the first time since the survey began in 2003. Inchon's GRDP hit 84.59 trillion won (US$74.99 billion), second only to Seoul (372.11 trillion won) among the seven special and metropolitan cities in Korea. Busan ranked third, followed by Ulsan and Daegu.
Incheon’s economic growth rate hit 4 percent in 2017, the highest among the seven special and metropolitan cities. It ranked third in the nation after Gyeonggi Province (5.9 percent) and Jeju Island (4.9 percent) among local governments.
Incheon’s economy is led by the manufacturing and transportation industries, which account for 25.5 percent and 11.3 percent of the total, respectively. The transportation sector is expected to enjoy rapid growth this year as a cruise terminal will open in April and a new port has begun operation.
Incheon’s export volume has been increasing by a large margin every year. Please tell us about last year's performance and the prospects for this year.
The city of Incheon achieved US$40.8 billion in exports in 2018, up 3.9 percent from 2017. We achieved the US$40 billion milestone for the first time. It has become the only city among the nation’s seven special and metropolitan cities with six consecutive years of export growth.
Incheon’s export growth was led by companies in the free economic zone, continuous investment in facilities, and a sharp increase in shipments to Vietnam.
The exports of pharmaceuticals, which are being towed by Celltion and Samsung BioLogics, totaled US$1.9 billion last year, up 31.2 percent from the previous year.
Semiconductor exports fell slightly due to falling global demand, but the export volume remained at US$5.5 billion.
Thanks to SK Petrochemical's aggressive facility investment, the export growth rate of petroleum products and petrochemical intermediate raw materials has also remained double-digit for the second consecutive year.
Exports of steel sheets led by Hyundai Steel and Dongkuk Steel Co. also increased by 13.3 percent.
Yet exports of automobiles and auto parts fell 3.6 percent, in large part due to problems at General Motors in the United States.
Incheon’s export prospects are not bright this year as GM’s problems and the decline in semiconductor demand are expected to continue. The city needs to diversify its export items by encouraging small and medium-sized businesses to increase their share of exports. It is time for the central government and the city to increase support for small and medium-sized businesses.
The Incheon city government has been making efforts to improve its fiscal soundness in recent years. Where does it stand now?
The city of Incheon once suffered from financial difficulties to the point of being unable to pay allowances to the city government officials. But it is now close to entering the 10 percent range in debt-to-budget ratio.
As of December last year, the city government's debt amounted to 2.81 trillion won, with a debt to budget ratio of 20.1 percent. The debt ratio fell from 37.5 percent in 2014 to 33.4 percent in 2015, 30.4 percent in 2016 and 21.9 percent in 2017. If this trend continues, the debt ratio will fall to below 20 percent this year, reaching the 10 percent range. It is expected to post 18.7 percent at the end of 2019 and 16.1 percent at the end of 2020. The aggregate amount of debt in Incheon, which includes the debts of five city-run corporations and industrial complexes, is also decreasing by nearly 1 trillion won each year.
Creating jobs is the biggest challenge for central and local governments. What strategy is the city following to solve the job problem?
Incheon’s job indices have been improving. As of November 2018, Incheon's participation rate was 65.8 percent, up from 64.4 percent in the same period last year. The employment rate was 63.3 percent, surpassing Seoul and Busan to rank first among special and metropolitan cities.
For reference, the participation rates for other cities were 62.3 percent for Seoul, 61.5 percent for Gwangju, Daejeon and Ulsan, 60.6 percent for Daegu and 58.4 percent for Busan.
The employment rates for other cities were 62.9 percent for Ulsan, 59.9 percent for Seoul, and 59.3 percent for Gwangju and Daegu.
In particular, Incheon’s youth employment rate ranked first among the special and metropolitan cities for five consecutive quarters from the fourth quarter of 2017 to the fourth quarter of 2018. Last year, the national average of youth employment was 42.7 percent, and the average of the seven major cities was 41.2 percent. Incheon reached 47.9 percent.
For job creation and economic revitalization, I think it is important to create a growth ecosystem from a long-term perspective. The city of Incheon will make all-out efforts to power the growth of its economy through balanced urban development projects, including urban regeneration, and by using projects aimed at making Incheon the peace city of the Korean Peninsula and North East Asia.
In addition, we plan to explore blue ocean areas in cultural, sports, and tourism sectors such as MICE and eSports and focus on attracting investment in the biotech, robot, drone and aviation sectors.
To create many decent jobs, we will strengthen the manufacturing sector, which is the basis for the Incheon economy, and improve the employment environment of small and medium-sized companies. This way, we will lay the groundwork for the Incheon economy to take a leap forward this year.
In the New Year's message, you pledged to work hard to attract investment. Please tell us your performance last year and this year’s goal.
According to the Ministry of Trade, Industry and Energy's "Foreign Investment Trends," the amount of foreign direct investment arrivals in Incheon totaled US$4.8 billion last year, up from US$800 million in 2016 and US$900 million in 2017. Last year, it was the second-highest number of arrivals in Korea, after Seoul’s US$7.2 billion. We have set this year’s goal at US$900 million, of which the Incheon Free Economic Zone (IFEZ) is expected to attract US$600 million.
Would you sketch out your plans to create future growth engines for the city?
Incheon has 11 industrial parks, including the Namdong Industrial Park, which accommodate more than 10,000 companies. It is also developing large-scale high-tech industrial complexes such as Songdo Biotech Convergence Technology Park and Gyeyang Techno Valley. Global biotech, healthcare, automobile, and aviation companies are gathered in the Incheon Free Economic Zone (IFEZ) and are leading the growth of future industries for South Korea. The annual exports of Songdo, Cheongna and Yeongjong free economic zones totaled about 20.6 trillion won (US$18.26 billion), accounting for half of the total exports in Incheon.
We are planning to create a "Biotch-Medical Engineering-Creative Belt" connecting Songdo with the Namdong Industrial Complex to generate synergy between the Original City Center and the New Town.
At the same time, we will promote innovative growth of businesses by linking our plan to upgrade industrial complexes and support for companies’ transformation into smart factories. We are planning to expand the number of smart factories in Incheon from the current 117 units to 1,000 by 2022.
The Robot Land project, which will be built around the Cheongna Robot Tower, will spearhead the growth of the robot industry in South Korea. In addition, we are developing a software convergence cluster in Songdo where outstanding venture companies in information technology, software and biotechology convergence industries will be nurtured.
Incheon is growing rapidly, but the decline of the Original City Center is also accelerating. Growth is concentrated in the New Town, including the free economic zones. In this year's New Year's address, you promised to promote a balanced development among the Original City Center, Old Town and New Town. What projects are planned?
In the process of industrialization, Incheon has followed an excessive "select and focus" strategy, which resulted in urban imbalances. The biggest damage that urban imbalances do is that they hinder sustainable development of a city. In the end, balanced development is needed for sustainable and innovative growth. An alternative to this problem is the central government's “City Regeneration New Deal” policy and the city government’s “Balanced Development Roadmap” initiative.
The central government's urban regeneration project is intended to revitalize old city centers and create jobs through business models tailored to their characteristics. On the other hand, the city government’s initiative is designed to present and carry out an overall roadmap so that the urban regeneration projects of central and local governments can be carried out comprehensively and systematically. The development projects for the New Town as well as the Original City Center and the Old Town need to be melted together in the framework of balanced urban development and sustainable development. We are working to develop a well-organized communications channel and discussion structure to ensure that these projects are carried out not by the city government but by citizens and private-sector expert groups.
Incheon is expected to benefit most when tensions on the Korean Peninsula eases and inter-Korean exchanges become brisk. What goals and visions do you have in promoting inter-Korean exchanges?
My vision is that Incheon becomes the center of peace and prosperity on the Korean Peninsula and in Northeast Asia. To achieve this, we are approaching the West Sea peace project with four principles.
First, we will enhance the quality of life and economic benefits of people in the five islands of the West Sea through inter-Korean exchanges. Secondly, cross-border exchange projects will be promoted first in areas where Incheon has competitive edge. Thirdly, Incheon will become the gateway to inter-Korean exchanges, becoming a window for personnel and materials exchanges across the border. Fourth, peace is to be the medium for solving various urban problems and imbalances and disconnections in the city of Incheon.
However, inter-Korean exchanges have a big impact not only on the Korean Peninsula but also on the international situation, which makes it difficult for local governments to get ahead in advance. But once the gate opens, there will be a full-scale interaction from then on, so you need to have a good action plan. So I focused on laying the foundation for the future.
First of all, we have appointed an official with a lot of experience and know-how in the inter-Korean exchanges as the inter-Korean exchange and cooperation officer. Second, we are encouraging public officials to study and prepare for inter-Korean exchanges. Third, we will develop and expand the “Peace Index” to ensure that North Korean projects directly connect to the lives of the citizens. Fourth, we are actively working with the central government and local politicians to ensure that the starting point of the West Sea Peace Highway is Yeongjong Island.
This year, we will promote cooperation with North Korea to operate joint fishing zones and joint seasonal fish markets in the West Sea. We will also activate the council of district heads to strengthen cooperation among districts of the city in promoting peace projects. In addition, we will promote cultural and historical exchanges between the two Koreas, and cooperation with local governments of North Korea such as Nampo and Haeju. In addition, we will actively develop and utilize the Peace Index so that citizens can feel the real improvement of their livelihood through peace.
Ever since you took office, you have repeatedly said, "Citizens are the mayor." Please tell us what measures you are going to implement to encourage citizens’ participation in the operation of the city government.
The core of the concept is that “citizens have the power to decide on important city issues." An online petition system has been in effect since December last year as a key window for this purpose. The mayor is required to respond directly to an issue that drew sympathy from more than 3,000 citizens, and issues that won sympathy from more than 10,000 people will be discussed by the Incheon Public Opinion Committee.
In addition, the city government has appointed a communication cooperation officer to handle the business of communicating with and cooperating with citizens. It has also appointed an urban regeneration coordination officer to facilitate communication and cooperation between citizens or private expert groups and the city government in carrying out urban regeneration and urban balanced development projects.