Mr. Park Young Sun is the mayor of Guri City in Gyeonggi province, South Korea. After graduating from Kongju National Teachers College, he joined the Korean diplomatic service and served the Ministry of Foreign Affairs in various capacities. He has also worked in the Ministry of the Interior and the Blue House, the two top power centers in Korea’s leadership hierarchy. He has also represented Korea at the United Nations Headquarters conference on ‘World Mayors’, where he delivered a keynote address as a representative of Korea. In addition, he is currently a faculty member of Hanyang University Graduate School. Recently he sat down with Dr. Lakhvinder Singh, managing editor of Asia-Pacific Business and Technology Report.
Q: Thank you for talking to us today. Your city is very beautiful and clean. While coming to your office I was very much impressed by the natural surrounding in the countryside.
Thank you for coming. Yes. Our city is very beautiful and clean. That is the reason it is attracting a large number of people from all over the world to come and live here.
Before we talk about the ‘NCD’ special project, I would like to know more about Guri City, especially its culture and the people.
Guri is adjacent to Seoul. It just takes 30 minutes from downtown Seoul to come here. Our city has a very convenient transportation system both in surface transportation as well as the subway system. Also Guri is located near the Han riverside. As you can see we have a highway between Incheon and Seoul as well. When we fix up the Jamshil weir properly, big ships will be able to pass through Han river. So our city will have connectivity by both road, rail as well as river. To your question regarding the people and culture, our city has a very long and rich cultural history. It has been witness to many historical events in the past. More than 500 years of history of the Joseon Dynasty can be observed here. Many Joseon kings are buried in royal tombs here. Dongu-Reong, the burial site of seventeen Joseon Dynasty kings and queens, has been listed as a UNESCO world Heritage site. Thus our city occupies a very important historical place in Korea’s cultural and political history.
Now coming back to our main focus of the day, please tell us about the project “NCD”. What does “NCD” stand for?
“NCD” stands for Nature, Culture, and Design. N means that we have the Han River and beautiful nature, with Ecological Environment as our theme. C comes out from the rich culture of Guri City. D means Design. We call this project “NCD.” I would also like to tell you some special characteristics of Guri City. First of all our population is almost 0.2 million, yet around 3 million people who live around this area can reach at Guri within 30 minutes. Secondly, two five-star hotels are located within 10 minutes of Guri City. Thus it is very convenient for foreigners to visit here.
What kind of foreign business companies you are expecting to attract to this project? What kind of industries and businesses do you want to invest in Guri city?
Let’s talk about Guri project in some more detail. We are going to attract the hospitality and design industry. The nature of the design industry is that any buildings such as hotels, resorts, or high class residences are included in that. For example, if an investor has a plan to build in an area, he can make a choice for all procedures related with building projects such as design, interior material, colors etc. Our design center will be the place which can handle of all these procedures. Unfortunately, there is no such center providing all services under one roof anywhere in Asia today. Our center will be the first of its kind in Asia. Currently most of the needs of the design industry in Asia are met by a small design center in Shanghai, China. But it may not be able to meet the growing needs of Asia as it becomes rich and prosperous. Currently most of this industry in Asia is dominated by foreigners, especially experts from the USA. The time has come when Asia needs to develop its own resources. Our design center is an effort in that direction. Currently, we are in the 21st century, and the hub of international development is coming to Asia. As you know, Europe is going down, USA is in difficult circumstances, there is not much to talk about South America except Brazil. Overall, Asia is expected to become the epicenter of economic growth in the near future. Consumption of luxury goods and services is expected to increase.
Is Asia expected to become the hub of luxury goods and services?
According to data, 70 percent of the supply of all luxury goods in the world comes from Asia. We thought that we would need a hub city which can lead the hospitality design industry in Asia. Our experts suggested that this kind of design industry should be located in Korea, especially in Guri City. The reason for this is that Guri city is located in a very strategic place. It lies at the very center of Korea’s hub of economic activity. Secondly it has a very large chunk of land available for this project very near to Seoul. Not many cities in Asia can boast such a large available near to their main metropolitan and capital city. The case of Guri City as a hub of hospitality design industry in Asia is thus very strong. I will also like to add here we are concerned not only about designers who will come and work here. We also want to focus on various small and big events such as conventions, forums, seminars, expos, and trade shows in our center. Additionally, we have a plan to build an entertainment park. We are expecting a large number of foreign visitors coming here. To accommodate their demand we need to build new hotels. For example, if any expo is held here, we will need a minimum of 40,000 rooms to meet the demand. The official name of this project is ‘Hospitality Contract Design’, and we hope that Guri will be the hub city of Asia very soon.
How many new hotels you are planning to build under this project?
For now we have plans to build three new hotels. We have already signed an MOU with Starwood Capital Group to build one of the three luxury hotels. All together there will be 1000 new rooms in this hotel. The MICE industry is growing in Asia. We focus to capture this grow potential. These days, Singapore and Shanghai are investing huge amounts in the MICE industry. So far Korea hasn’t gone the right way in this regard and thus has a very small market share. After we build the design center we hope to capture the major share of market in this sector. The design industry brings out two million people annually. In case of Las Vegas they do many things such as electronic shows and so on. Fifty to sixty percent of our programs will be similar to those of Las Vegas.
What is the current status of the project?
Most of the procedural formalities are already completed. We have sent official letters to the President of Korea, the Ministry of Land and other concerned ministries, as well as the U.S. Ambassador in Korea. The letter included this message: “Over 2000 companies are ready for the Guri project, and we are requesting the release of the Green Belt for NCD project”. Also, we have demanded some benefits for our foreign investors. We have requested permission for the building of “foreigner only” apartments, as we are expecting more than 2000 families will come and live here.
What is the expected cost of the project? What kind of investment have you already made?
The total expected cost of the project will be around US$9.2 billion. We already have around 2 billion in committed investment. When the project is fully operational we expect more than 2000 companies will invest here. Now we are waiting for the release of the green belt by the government. As soon as we have it, this project will run in full swing. As you know the regulation of foreign trade is very high in Korea. In the recent past foreign investment has had trouble coming into Korea. For example, we are under much tighter regulation trade rules compared with China, Hong-Kong, Singapore, Australia, and India. We need to solve this immediately. Every investor should be able to come to Korea freely. We have already recommended all concerned ministries that the Guri project deserves to be chosen as a national agenda. We have requested the government to take it as national policy, and we have got a very positive response from Central Government. Currently there are many stumbling blocks for foreign capital coming to Korea. Should these not be done away with? Nowadays in China, Hong Kong or Singapore, there are very few stumbling blocks. Should we not also make investing in Korea more foreign friendly?
How much foreign investment are you expecting to attract for this project?
As I said earlier currently around US$2 billion in total has already been committed. We already have signed an MOU with 1500 companies from among 2000 companies which are planning to come here. If you are to ask me how much the foreign total money coming in is, we are looking at around $20 billion as investment by foreigners. What are the main companies which have so far committed to this project? We have seven international fund groups in the investment sector interested in this project.
There are other investors also?
Yes. There are some investment fund groups. They have made a consortium. When do you expect the project to be completed? When is the estimated deadline? We divided the project into three phases. Phase 1 will be finished by the end of 2016
Please explain all the phases. Firstly, what does phase 1 involve?
In phase 1 we plan to complete a design center, two hotels, and foreigners’ living space. Here I am talking about apartments and an international K- 12 School, (kindergarten to high school). And the design graduate school will also be completed in phase 1. As for phase 2, this is part of the commercial area, and citizen apartments, an international hospital and township for foreigners and the private homes are to be built by 2018. In phase 3, an amusement park and culture center are to be built by 2020.
You mentioned the main problem is the green belt issue. Apart from that, are there any other problems or difficulties which you can foresee that can cause potential delay of the project?
No. There are none. Our biggest issue of concern is the release of the green belt only. Nothing else bothers us. We have been talking to state government and federal government officials for five years now. We are very near to solving this epic problem. After the presidential elections we hope the new government will make a call on this. Are you already getting good response from the government? What are your expectations? We are in negotiations with the government. They agreed with this and are satisfied with our proposal. We are beginning to complete the procedural formalities. We have already completed many. But some are still left.
How hopeful are you about the successful completion of the project?
Very hopeful. We have two main cores of this project. The first is that whether or not 2000 companies will move in. This issue is already solved, more or less. Seed investment by foreign investors has already come in also. And another core of the project is profitability. How much profit we are convinced to get from this project? This question is yet to be answered. But we are sure this project will be very beneficial to Guri, Korea and Asia as a whole. As you know we are faced with a worldwide economic downturn. Remarkably, India, China and Vietnam are leading the global economic growth. Therefore, demand for hospitality construction design is increasing in Asia. After coming up to our Guri design center, they won’t have to go to the U.S. or Europe. They will prefer to use our closer one which also has all the world class facilities. We are convinced of the future success of this project.
If this project is successful as planned, how will Guri City benefit economically, as well as non-economically? Please give some specific examples.
First of all, it leads to huge job creation. According to a report from Seoul National University, it will create around 110,000 new job vacancies. The project is also expected bring high tax returns for the city. When financial resources in Guri are increased, Guri City becomes a rich area. Apartment costs will rise, and in the process citizens of Guri will be able to collect more money for their land holdings and properties. On a national overview, the economical ripple effect is expected to be 7 trillion Korean won. As I mentioned before, after we become the hub of the Asian design industry sector, industries such as textile industry, ceramics and furniture industry will come alive again with high-value additions from design industry.
This question is very important for us. Once the Guri project is competed, Guri City will become an international spot on the world map. So far it is a local city only, so we are going to be looking at quite a sudden transformation. This will surely have some social effects. What is your thinking on such socioeconomic effects on the native population? Is your government ready to meet the challenges forced by this social-economic mobility?
As you can see from the location, the design center will be built around the HanRiver. Around existing apartments, there is empty land of almost 1000 acres. Currently, Guri City consists of both provincial area and the local city. When it becomes international, Guri City may have some negative effects on economical and social fronts. Old citizens might be a little shocked, for one thing. We know this and we are well prepared to handle it. But Guri is different from other areas such as Kangwon-do, Junra-do, and Kyungsang- do. Those are provincial cities. But Guri is more similar with Seoul, as seventy to eighty percent of Guri citizens just sleep in Guri and work in Seoul. And of course Seoul citizens are globalized already. So we don’t worry bout this front too much. Nevertheless, an international city will come into the Han River area which is very close to Seoul. Foreigners will move in there. For some time, it may be a little tense, but as time passes, the citizens of Guri will view it very naturally. So we do not see much trouble from it.
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