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A nation expelling businesses

Posted April. 27, 2015 07:19,   


A chairman of a big Korean company received great hospitality during his business trip to Vietnam as if he were a guest of the state. The Vietnamese authority let the chairman and his entourage pass the immigration without inspection. Local police cars led the chairman’s vehicle and there was no traffic jam as the transportation authority controlled traffic lights on the way. The businessman told his acquaintances, “I was surprised to see a great transformation that Vietnam has achieved and felt mixed feelings due to the stark contrast to Korea’s situation.”

The reason why Vietnam, which is still under the banner of socialism, treated a Korean businessman with warm hospitality is probably the socialist nation judged that such foreign investment into the local economy would boost jobs and incomes, and contribute to economic development. As several states in the U.S. pledged unprecedented supports to attract factories of the Hyundai and Kia Automotive Group, even advanced nations make efforts to create a business-friendly environment for local and foreign companies. “In this era, a nation’s power is determined by how many strong firms it has,” said Motoshige Itoh, professor of Tokyo University in Japan.

It is a misconception that a foreign manufacturing facility creates jobs for blue-collar workers only. Some 15 percent of the total jobs created by a factory constructed in a foreign nation is the managerial posts for white-collar workers, said Choi Ji-sung, vice chairman of Samsung Group’s Future Strategy Office. It is also not true that Korean businessmen are building facilities in foreign nations due to lack of patriotism. “I’d like to expand manufacturing facilities in Korea where I was born. However, enormous gap in labor costs, strict regulations and strong labor unions have made me turn to other nations to invest,” said a local businessman. Such appeals from Korean businessmen must not be taken lightly.

Of course, local businessmen’s wrongdoings must be strictly punished as seen in the case of Dong Kuk Steel Mill Chairman Jang Se-ju, to whom an advance arrest was filed for charges of embezzlement and gambling. However, it is not a true justice to blame firms and businessmen all together due to some "rotten apples." It is pity to see that Korean politicians regardless of ruling and opposition are hostile to large companies and call for corporate tax increase, which is hardly pursued in other nations. “Great businessmen have built Europe and the U.S. into the world powers. Currently, such businessmen are making China into a strong nation,” said Robert Mundell, professor of Columbia University. If Korea becomes a nation that expels companies, rather than a nation that attracts corporates, its national image would be tainted and a gloomy future would loom large bringing pains to the future generations.