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The government has come out with a comprehensive plan to encourage continued foreign investment. Proposed incentives include financial assistance, or cash grants, as well as tax and location-finding assistance. There are also plans to improve the climate for expatriates, including support relating to the establishment of schools and hospitals. Everything you see in countries leading the way in making themselves attractive for foreign investment is there.
Look at what¡¯s being proposed on paper, and the plan is as good as anywhere else. The problem, rather, is whether they¡¯re ready to make it happen. Lining up the formal incentives like at some department store doesn¡¯t make foreign companies rush in with bags of money. Investors have to be able to feel for themselves that Korea has truly become an attractive place to do business. Leaders have to believe that attracting foreign investment is the only way the country¡¯s going to survive, and they have to let themselves be seen as obsessed with making sure the plan works.
To begin with, there has to be a clear roadmap for labor-business relations. Law and principles have to be maintained, and visible measures such as increased flexibility in the labor market must be implemented. The government then needs to lead the way in bringing major changes in the public¡¯s feelings toward foreign companies, as public sentiment is generally exclusivist toward them. In allowing for various benefits for foreign schools and hospitals, the government needs to work to win understanding from the parties with interests in these areas who oppose such measures.
Foreign investment is worth that much. Ireland was an underdeveloped country in Europe, but now it¡¯s an advanced one, earning $30,000 in national per capital income. It was all made possible because the country succeeded in bringing in $11 billion a year in foreign investment.
The president has to show more resolve than anyone in making it happen, and he has to demonstrate courage here as well. He will only be able to do this by making demands of those in his support base. The eyes of the world and the people are watching the president¡¯s will and determination.
Sept. 3, 2003
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