[Letters] Korea can still attract more foreign investorsThe current global economic turbulence offers Korea another opportunity to test its economic resilience in times of trouble. The country’s quick recovery from the global financial crisis and robust reaction to the aftermath of the recent downgrade of the U.S. credit rating has been extraordinary. Korea is been an economic and developmental model, owing to the short span of time it overcame poverty and the desolation of war to emerge as one of the Asian economic tigers.
But even with such a noteworthy report card, Korea’s real economic strength and potential still remains under the radar. This can be attributed to the fact that Korea has been a closed society for decades compared to such countries as Japan. Though there have been significant efforts to market Korea to the world through committees such as the Presidential Council on National Competitiveness and the Presidential Council on Nation Branding, more can be done to make Korea more attractive, particularly to foreign investors.
Korea’s investment policy makers should consider a redesigned dogma from the traditionally highly regulated environment to a foreign-friendly platform. This can be done by relaxing key restrictions in the principal factors defining external investment procedures.
Of vital necessity is the revision of regulations and laws related to Foreign Direct Investment and the labor environment for the foreign workforce. With generally stable fundamental economic structures, Korea’s potential to attract more FDI is substantial. This prospect has been evidenced by a 13.8 percent or $13.07 billion increase in FDI last year, marking the highest level in a decade even amid stagnation in the global FDI flows.
Consequently, Korea can be an investment destination if it will significantly open up its economy to foreign investment with a goal of modernizing the economy and creating more opportunities for new products and services in the country. To increase cash flow as well as the flow of goods, the free trade agreements that Korea is close to ratifying must represent fundamental change in Korea’s economic institutions, making them inviting to FDI.
To do this, however, Korea will have to face some short-term challenges in its domestic industries. Here, the temptation of protectionism must be overcome for the country to emerge as welcoming and buoyant toward foreign investments. This change should also carry the attributes of transparency and efficiency as prerequisites for attracting foreign investors.
More so, Korea should amicably address issues surrounding imbalanced business practices and eliminate regulations that are not of the global standards or do not accommodate foreign corporate needs. Specifically, Korea needs to lower corporate taxes and reduce unnecessary administrative restrictions on investment and business operations. The consequence of these radical revisions will not only increase external investments but also raise the country’s annual economic growth to its current 5 percent growth target for the year.
Ultimately, the effort for attracting foreign investors must be a joint venture of all of Korean socio-economic, political and environmental aspects.
The branding of Korea as an investment hotspot can be built on the successes of hosting major international events including the FIFA World Cup, the Group of 20 summit, the IAAF World Championships and the upcoming Pyeongchang Winter Olympics.
Benson Kamary, a freelance journalist,
a Ph.D candidate at Kosin University and the secretary general of the Kenya Community in Korea