More than any other city, Incheon has potential for growth, and I think that national development cannot be achieved if Incheon can’t leap forward.Yoo Jeong-bok, the former Incheon Mayor (The Korea Herald, 2014)
What is Songdo New City?
Songdo New City, a part of Incheon in South Korea, looks different from the other areas of Incheon. Contrary to the rest of Incheon, Songdo is an island in Incheon and did not attract much attention, although, in the past, there was an amusement park for tourists (The Songdo Amusement Park). However, the status of Songdo began to change with the Songdo land reclamation project, which began in 1994 and was conducted by the Incheon city government to promote urban redevelopment. Recently, Songdo has gained attention from Incheon citizens as well as from foreign visitors and investors because of its convenience. Within Songdo, there are various state-of-the-art facilities such as the International Business District (IBD), shopping malls, and an international school, and a large public park – Songdo Central Park. The large Songdo Central Park Hotel complex, opened in 2014, is also situated across the road from the park. The transformation from a small island to a popular new city was possible because of the Incheon city government’s redevelopment project. They sought to develop Songdo as international, smart and ubiquitous city using private investment. In particular, they developed the IBD to attract many foreign businesses and investors.
A New Trend in Urban Development
For decades, the South Korean state has played an important role in urban development, which meant that many urban projects were selective and created regional disparities. This type of development is known as developmentalism, a political-economic ideology that the state directs many sectors. This trend began to change with the impact of neoliberalism. Neoliberalism is a political-economic ideology, which favours free market capitalism and has been influential throughout the world. Its representative policies are privatisation, business deregulation, and opening up markets. The 1997 Asian financial crisis pushed the South Korean government to open up its economy and to actively adopt these neoliberal-style policies. As a result, mega (very large scale) urban development and planning has experienced change and Songdo is a good example of how this stemmed from the rise of neoliberalism. The engagement of private sectors in the Songdo development is an aspect of the neoliberal approach. However, the Incheon city government was still influential in the Songdo construction process.
The Interplay between Developmentalism and Neoliberalism in Urban Development
Before the 1997 Asian financial crisis, overseeing developmental projects fell to the state, but the crisis precipitated a change in the South Korean political-economic landscape. The financial crisis was the most influential catalyst for South Korea’s wide acceptance of neoliberal- oriented political and economic policies, including urban policies. The Songdo development project is an example of a development that shows neoliberal elements in urban development – as such, the interplay or juxtaposition of developmentalism and neoliberalism is demonstrated. In Songdo, the local government and private companies played an important role in the whole development and new-style buildings arose which can attract capital accumulation.
Interestingly, while the developmental process of Songdo and its new facilities clearly represent some elements of neoliberalism, the traditional political and economic structures of developmentalism still remain. The fundamental reason for the Songdo development was based on national ambitious economic policies for globalisation. To overcome the financial crisis of 1997, the South Korean government focused on establishing East Asian global hubs – developing Songdo was a part of South Korea’s national-scale economic plan. Without the national economic strategies (which are traditionally a product of developmentalism), the Incheon local government would have been unable to actively proceed with the Songdo development project.
Collaboration with Private Companies in the Development of Songdo
The Incheon government launched the Songdo redevelopment project, but it lacked the budget to complete the entire development. Thus, public-private partnership was introduced. Two large construction companies joined the Songdo planning and development process: (1) Gale International, a private real-estate development company based in the United States; (2) POSCO Engineering and Construction Company (POSCO E&C), a subsidiary of the South Korean steel-making company. These two companies jointly worked with the Incheon city government. This is a significant point in South Korean mega-urban planning because for decades the central government was dominant in many developmental projects. The change of approach began with the rise of neoliberalism after the 1997 Asian financial crisis and led to new political and economic rules; urban development has since seen many changes. The development of Songdo illustrates the complex nature of the neoliberal approach and the detailed elements that are characteristic of each stage of the process.
Songdo Development as a New Starting Point in South Korean Urban Planning
The Songdo New City project is a meaningful case because it is one of the clearest examples showing the overall political and economic change in South Korea. Gale International and POSCO E&C have massively influence the building of diverse facilities in Songdo. Together, these companies built the Songdo International Business District, a convention centre, canals and Songdo Central Park. Their engagement was significantly different from previous urban development projects in that both companies had an invested interest in the successful construction of Songdo. In addition, the Incheon municipal government were more influential than the central government, in contrast to most previous urban developments. After political liberalisation, the local governments were more able to obtain their own political power within their administrative districts. This political change also contributed to the transformation of urban planning processes. Thus, along with Gale International and POSCO E&C, the Incheon local government actively advanced the development of Songdo.
Songdo as One Area of the Incheon Free Economic Zone (IFEZ)
The IFEZ will not only serve as the growth engine of this country, but it also represents Incheon’s passion and pride. We will see to it that the IFEZ can boost the services industry through market testing and deregulations”Lee Jong-cheol, Commissioner of the IFEZ Authority (The Korea Herald, 2014)
A free economic zone (FEZ) is a special district which has business-friendly conditions to attract more foreign investment. After the 1997 Asian financial crisis, the South Korean government strived to recover and promote the country’s economy by implementing economic strategies aimed towards the global market. Besides business and finance, the Incheon free economic zone (IFEZ) aimed to provide a hub for research and development in many sectors: new technology, logistics, biomedical research, and car manufacturing (YouTube: Incheon Free Economic Zone, Northeast Asia Economic Centralization).
Initially, Songdo gained little attention before its land reclamation, which has been ongoing since 1994. Songdo was nominated as a FEZ in 2003; this was important because it helped to attract many people from outside of Incheon to Songdo, even foreign companies and universities. The current landscape of Songdo is a result of a public-private partnership between two companies and the Incheon city government. However, this large-scale urban planning was impossible without the national economic strategies for pursuing globalisation. Therefore, the underlying driver of the construction of the IFEZ is rooted in the South Korean central government’s economic plans.
East Asian Urban Development
With neoliberal approaches emerging in East Asia, the landscape of urban development has also experienced many changes. Compared to previous development processes, the involvement of the private sector has become crucial and diverse facilities have been established. Furthermore, cities no longer serve a simple residential purpose and perform various functions to effectively compete in the global market. Songdo New City embodies the new trend for mega-urban planning.
Nevertheless, the role of the South Korean state cannot be easily overlooked in the East Asian context. Interestingly, the trajectory of the Songdo development also demonstrates the features of state-led development. The South Korean government sought to promote its economy by developing FEZs and so take a leading role in the East Asian economy. Constructing Songdo was aimed at fulfilling the central government’s intentions. Therefore, Songdo New city is an outcome of combined neoliberal-oriented policies and government-led economic development; as such, it illustrates the interplay between developmentalism and neoliberalism in South Korean urban development. The underlying driver for mega-urban planning was macro-economic strategies at the national level.
To comprehensively understand East Asian urbanism, exploring developmental trajectories is necessary because East Asian countries have experienced completely different growth paths. Specifically, the Four Asian Tigers (the high-growth economies of Hong Kong, Singapore, Taiwan and South Korea) have demonstrated East Asia’s capabilities in propelling their economic growth upwards within a short period of time. This is a noticeable historical feature that has remained in their political and economic structures. The spatial policies are not exceptions and contextualising them is essential for understanding how East Asian urbanisation is affected by the legacies of state-led development.
Incheon Free Economy Zone Authority (2005) IFEZ White Paper. Incheon: Incheon Free Economy Zone Authority.
Park, B. (2008) ‘Uneven Development, Inter-scalar Tensions, and the Politics of Decentralization in South Korea’, International Journal of Urban and Regional Research 32(1): 40–59.
About the author
Yeonsu Lee has recently completed her MSc degree in International Development at LSE, after studying political science and international relations in South Korea. She has spent most of her time in Incheon and the city is relatively less known in the world. As a citizen of Incheon, she wants people to know more about the city, particularly Songdo New City where a symbol of new urban development in South Korea.