ΆΓ Kyonggi Province- Stellar Form in Attracting FDI

Korea Times 2000.12.27

Kyonggi Province certainly has excellent industrial and investment conditions, but it has taken a team of experts, led by Gov. Lim Chang-yuel, to really make the system work.

``Kyonggi Province is the heart of the Korean economy, and providing investors with optimal conditions has made it possible for us to achieve outstanding results,'' Lim says.

Exactly how much? Well, Gov. Lim and his team have induced $6.4 billion in foreign direct investment since he took office in July 1998, and the amount is growing.

The performance has been so impressive that Kyonggi Province was recognized as the most outstanding province in attracting foreign direct investment, with the recent presentation of the first-ever presidential citation made personally by President Kim Dae-jung.

``When you consider the fact that Kyonggi Province encompasses a region around Seoul with a population of more than 22 million, the market potential is obvious,'' Lim points out.

With new and improved infrastructure facilities, including the soon-to-be- completed Inchon International Airport and the Pyongtaek International Port, the incentives for selecting KyonggiProvince as the destination for foreign investment are overwhelming.

``The concentration of higher learning institutions, the abundance of skilled and professional manpower and easy access to research and development facilities add to the attraction,'' Gov. Lim says.

In addition, he notes, the strategic location of Kyonggi Province, right in the center of the Korean peninsula, means that it is especially well-positioned to take advantage of the improving ties between South and North Korea.

The fact that KyonggiProvince and Gov. Lim is sitting in the middle of all of this is perhaps by no coincidence, since the governor has a resume that is hard to go up against.

In addition to holding a senior position with the International Monetary Fund and acting as an envoy to the World Bank, Lim has served as Commerce, Industry and Energy Minister and then Deputy Prime Minister and Finance and Economy Minister.

``On the whole, it is difficult to say that the climate for foreign investment in Korea is excellent, especially with the delay in the sale of Daewoo Motors and the sluggishness in the domestic stock market,'' the economic expert says.

However, there is really no basis to suggest that Korea is headed toward another financial crisis, since it has strong foreign reserves and the exchange rate has remained stable.

``The fact that we had gotten over the financial crisis did not mean that economic conditions were all sound and that there was no longer a need to complete the restructuring process,'' Lim says.

Fortunately, the central government is making concerted efforts to optimize investment conditions for foreigners, and provinces like Kyonggi- do are taking full advantage of this.

``Basically, we have to recognize the importance of foreign direct investment (FDI), not just from the perspective of an inflow of foreign capital and the creation of new jobs, but from the viewpoint that Korean companies can improve their competitiveness by learning from foreign experience and management expertise,'' Lim says.

In fact, the governor says, the inducement of foreign direct investment cannot be calculated in terms of money, since it accelerates the process of globalization of the Korean corporate society which is so vital in the 21st century.

On the part of the government, it has introduced the Foreign Investment Promotion Act and is operating such necessary organizations as the Korea Investment Service Center.

With this as the basis, Gov. Lim says, Kyonggi Province has done its own share in further improving investment conditions in the province and getting the message out to the foreign business community.

``Naturally, we are prepared to offer additional incentives to companies specializing in high value-added fields, more specifically, knowledge- based, information-oriented, cultural and tourism-related sectors,'' Gov.Lim explains.

For foreign companies introducing high technologies into Kyonggi Province, the administration is offering 100 percent exemption from provincial taxes for a period of 15 years, more than anywhere else in the country.

In addition to providing discounts for co-owning properties and assets, Kyonggi Province also offers various subsidies for training workers and generating new jobs.

As part of efforts to help reduce initial investments of foreign companies, Kyonggi Province has also set up an exclusive complex in Pyongtaek where the rent is considerably cheaper.

For those willing to purchase space in the exclusive industrial complexes, the province offers a matching fund against the discounts that are promised by the central government.

``Perhaps even more important is the fact that we are going out of our way to treat and regard foreign investors and companies the same way as any domestic enterprise,'' Gov. Lim says.

This means that small foreign companies can apply for a wide range of funds, including those for restructuring, to make sure that they feel at home in going about their business.

``There is so much that we can benefit from attracting foreign investment that it is only fair that we provide these investors with due incentives,'' the governor said.

He went on to say that Kyonggi Province is lucky in that its natural conditions for attracting such investments as just as good as what they bring to the Korean industry and economy.

``Our location at the heart of not only Korea but of East Asia alone is enough to lure any thriving business to Kyonggi Province, and the conditions just get better and better,'' Lim notes.