Foreigners Say “MBnomics” Will Succeed

○ 89% say pragmatic economic policy will help businesses

In a survey of foreign businessmen in Korea, 50 percent said Korea’s economic fundamentals are “good” and 2.4 percent said “very good” while 29.8 percent said “average” and 17.8 percent said “bad.”

Among 89.2 percent of the respondents, 19.3 percent said the new administration’s pragmatic economic policy would be “very helpful” to running businesses and 69.9 percent said it would be “helpful.”

And 76 percent said the pragmatic economic policy would be successful in the same context.

European Union Chamber of Commerce in Korea (EUCCK) Secretary General Jean-Jacques Grauhar said, “Korean public servants promised to create a foreign investor-friendly environment but the message was often not delivered throughout the government. The new administration, however, is expected to bring changes.”

As for the question about whether Korea will overcome the situation in which it is squeezed by Japan and China and advance toward becoming the hub of Northeast Asia, 44.6 percent of foreign businessmen said it is “likely” and 2.4 percent said it is “highly likely.” However, 28.9 percent said the chances are “average” and a combined 24.1 percent said “unlikely” and “highly unlikely.”

○ 63% say they will increase investment in Korea over the next five years

Optimism among foreign businessmen showed in that 63.1 percent said they are considering investment expansion in Korea over the next five years.

“The new administration’s tax cut policy and plan to minimize the size of government organizations will reduce the burden on businesses,” said a high-ranking employee of a Singaporean hotel chain. “If the convention and tourism industry develops as the Korean economy revives, hotel businesses will do better and may increase investment.”

In fact, Britain’s Standard Chartered Bank reported to the authorities that it would increase capital by $250 million and invest $160 million to acquire Korea’s Yearum Mutual Savings Bank. GE Capital of the United States also decided to invest $160 million in Hyundai Capital.

The government seems to be encouraged by the moves of foreign companies.

”There are growing expectations about the new administration’s deregulation and improvement in foreign investment policies,” said Moon Seung-wook, investment policy manager of the Ministry of Knowledge Economy. “Despite negative external factors, foreign direct investment is expected to grow from last year`s $10.5 billion to $12 billion this year.”

○ 34% pick deregulation as the most urgent task

The survey found that Korea should deal with some challenges to attract more foreign investment.

Many respondents (33.7 percent) said that deregulation for foreign companies is the most urgent problem to improve the business environment for foreigners in Korea.

Kazuhiko Hutakawa, chief executive of K-line Maritime Korea, a Japanese shipping company, said in an interview with The Dong-A Ilbo, “The Korean government should correct its tendency to reversely discriminate against foreign investors.”

The survey participants said Korea should work on “building the labor-management relationship that follows the rule of law” (24.1 percent), “minimizing Koreans’ antipathy against foreign companies” (12 percent) and “improving efficiency in the public administration service” (10.8 percent).

Lucas Veach, a McKinsey consultant, said, “Korea should have more labor market flexibility and make the public service faster and more convenient.”

In addition, one of the major challenges in attracting foreign investment is to enhance the residential environments, which include lowering the language barrier and improving conditions in medical and education services for foreigners.

In the survey, 34.1 percent of the respondents said expanding public English education is “very necessary” and 36.5 percent said it is “necessary.”

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