Seoul courting investments from private sector

Home > Business > Economy

print dictionary print

Seoul courting investments from private sector


Development of virtual reality content like games and animations mostly by small and medium companies as well as start-ups, halal- and kosher-related products such as cosmetics and food as well as digital contents and even pet-related businesses are just a few of the industries that the government plans to foster by encouraging investments from the private sector.

Additionally, Uijeongbu, a city in Gyeonggi bordering northern Seoul, will get a major facelift with the development of massive theme parks and shopping malls once the U.S. military base stationed there relocates.

These were just a few of the measures that the government unveiled on Thursday in the hopes of reinvigorating the economy by encouraging investment from the private sector through enhanced incentives such as tax benefits and additional deregulations to finance new industries with strong growth potentials and start-ups that would be contributing to diversification and furthermore help it become a source of new major export items.

According to the Ministry of Strategy and Finance, the goal of the total 185 projects that were presented is to attract a minimum 3.6 trillion won in investment from the private sector and contribute to creating quality jobs.

The new plan came two days after the government unveiled measures that were targeted at boosting the service industry.

“Our economy has yet to see a firm recovery while companies’ investments are withdrawing because of uncertainties at home and abroad,” said Finance Minister Yoo Il-ho on Thursday during a government joint briefing held at the government complex in downtown Seoul. “Under such circumstances countries across the world and [global] companies are competitively speeding up, hoping to secure the lead in the new global era that has opened up by the fourth industrial revolution through aggressive investment and innovation. If we become inert in investing in our future because the immediate economy is uncertain, the future will never be ours.”

The Korean government has decided to ease regulations as well as enhance infrastructure of halal and kosher businesses ranging from food manufacturing to cosmetics so that it would be exported to the growing halal and kosher markets.

The global halal market is projected to expand from $3.2 trillion in the global market to $5.2 trillion by 2020 while the kosher market is expected to grow from $250 billion to $440 billion during the same period.

Additionally the Korean government said starting in the third quarter it will ease the requirement on tourist visa for Middle East countries that have no association with terrorists in the hopes of attracting more tourists while increasing the convenience such as translators and increasing the number of prayer rooms at hotels and halal restaurants.

“Until now halal and kosher were mostly centered on food but we have decided to expand that support to cosmetics as well as content development,” said Cha Young-hwan, head of the policy adjustment bureau at the finance ministry.

The government is also supporting the expansion of the pet industry especially as pets are now becoming a significant partner as society is aging rapidly and single households are increasing.

The number of households that now own pets have grown. While the number of houses with pets accounted for 17.4 percent of all households in 2010, it expanded to 21.8 percent last year.

The support includes deregulations that would help easily set up nonprofit veterinary hospitals with high quality equipment while turning veterinary nurses as government certified professionals.

The government will also reform the pet medicine distribution laws to make it more affordable. Also to improve the quality and protection of pets, the pet breeding farms will now have to get government approval for its business.

The government will be forming a VR cluster in Sangam, Seoul, where currently many of the broadcasting stations are located.

“The goal is to increase the cooperation between conglomerates that excel in manufacturing globally competitive VR equipment with contents developed by Korean SMEs and start-ups,” said Cha. “Korean conglomerates like Samsung Electronics already have the top notch VR equipment that is popular overseas. However, it has been noted that even with such high quality equipment when promoting overseas there isn’t much high quality contents that could compliment the equipment and this is where we think the SMEs and start-ups should develop on.”

The government said the cluster in Sangam will create an environment where SMEs and start-ups would have easy access to expensive equipment provided by the conglomerates that would help them in creating the contents.

Starting in the last quarter of this year the government will provide maximum 30 percent on VR R&Ds while starting in the third quarter it will work on a joint government and public sector project worth 60 billion won in investments in creating a VR game and experience center as well as a theme park.

A 20 billion won investment fund will be created this year, whereby the government will finance 12 billion won. It will be used for companies that develop VR technologies and contents. An additional fund of 20 billion won will be created next year as well.

The government will ease regulations including extending the lease on sport stadiums for 25 years while allowing more profit takes for private companies as part of plans to boost the local sports industry.

Also it plans to create a K-Sports town that will be financed by the private sector.

The government plans to ease regulations that are currently considered to hold back five major projects from the private sector including the creation of K-pop cluster by the entertainment company YG and a theme park based on the popular children’s animated penguin Pororo in Uijeongbu.

An observatory development at the top of the mountain in Gangwon has also been held back by environment-related regulations.

Log in to Twitter or Facebook account to connect
with the Korea JoongAng Daily
help-image Social comment?
lock icon

To write comments, please log in to one of the accounts.

Standards Board Policy (0/250자)

What’s Popular Now