ΆΓ  [Foreign Investment Ombudsman] FDI, Short-cut to Globalization of Businesses

KoreaTimes 2000.11.13  

By Kim Wan-soon Investment Ombudsman Anyone who watched Japan win the recent Asian Cup tournament will not hesitate to realize that the level of Japanese soccer has surpassed that of other countries in Asia. This however, was not achieved in a single day. Rather, it was the result of Japan's strenuous efforts toward globalization, breeding young players through overseas training and importing capable foreign coaches, for instance.

In similar cases, the brilliant performances of Park Chan-ho in the U.S. Major League and the victories of Park Se-ri and Kim Mi-hyon in the U.S. LPGA are also owed to their earlier advance onto the world stage, enabling them to compete with world class players.

The same lesson goes for enterprises. There are no more effective means than attracting foreign investment for domestic companies in their bids to sharpen their competitive edges as world-class firms. They need to adopt advanced and transpa ent managerial know-how and technologies of foreign companies, thus eradicating their outdated business practices.

As President Kim Dae-jung has often cited, the inducement of foreign investmen has the effect of ``catching five birds in one stone.'' First, it helps to activate smooth funneling of foreign capital. Additionally, it helps to generate jobs, increase tax revenues, expedite the introduction of advanced managerial tactics and technologies and promote sound competition.

For instance, Belgium's Interbrew, which acquired Oriental Brewery on the bring of bankruptcy, succeeded in raising the managerial efficiency of the local firm though rectification regarding settlement on credit terms and preferential transaction among related subsidiaries, in particular. Fuji Xerox Korea also managed to realize a surplus management by getting rid of bad loans and inventories since it took over Korea Xerox which was suffering from long-standing deficit management.

The exchanges of human resources and commodities in the process of enticing foreign firms would help companies to enhance competitiveness. Wary of failure n narrowing the trade deficit with Japan, the government has initiated efforts to attract investment from Japan's parts and material businesses. Although belated, it is every welcoming. Foreign investment may also prod domestic enterprises to follow suit in terms of management strategy, marketing and service. In the process, domestic enterprises may be able to improve their financial state and realize transparency and profit-first management.

Foreign investors are no longer ``heterogeneous'' elements. In order to surviv the boundless competition, we need to accept and learn from them.

The answer to the problems facing the domestic enterprises has become clear. It is nothing other than to have the global standard take a firm root here, through ``transparent and open'' management.