SEJONG, Aug. 1 (Yonhap) -- South Korea will overhaul the country's free economic zones (FEZs), including downsizing or even closing some areas, as many of them have failed to attract as much foreign investment as expected, government sources said Thursday.
The government has designated FEZs across the country to provide diverse support including tax benefits and fewer regulations for foreign investment. But many of the special areas remain essentially ghost towns in terms of luring foreign investment.
"We are now reviewing the operation of FEZs across the board," a high-ranking government official told Yonhap on condition of anonymity.
He noted that the review is "comprehensive," looking at the overall efficiency of not just FEZs but also other specially designated economic and industrial zones. The review could result in downsizing or even closing underperforming FEZs, he added.
Another government official said that many of these zones were selected "not for economic purposes but for political reasons" under the name of so-called balanced regional development.
He noted that in terms of actual operational merits, the government had to designate only Incheon and Busan as FEZs in the first place.
Earlier, Finance Minister Hyun Oh-seok told reporters that the government will soon unveil a set of measures aimed at stimulating the country's FEZs, many of which remain lackluster in terms of attracting foreign investment.
He said that the measures could include scaling down the size of FEZs, in particular in the Saemangeum area, which is located on a large plot of reclaimed land in the southwestern section of the country. However, he did not mention shutting down underperforming FEZs altogether.
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