Pohang, Cheonan receive positive responses from foreign investors

Pohang City in North Gyeongsang Province provides administrative support by deploying a civil servant each to foreign invested companies. The city also appoints civilian experts in legal, tax, customs and labor affairs as counselors of hardships, and provides professional counseling. During heavy snowfall in winter last year, civil servants removed snow on roads in the foreign investment complex. The number of foreign investments attracted by Pohang City has increased from one case last year to five cases (125 million U.S. dollars) this year. This is an outcome of efforts made by civil servants, who put job creation as top priority of the city administration. In the first ever survey of investment satisfaction among 1,578 foreign invested companies nationwide by different autonomous governments, which was conducted by the Korea Chamber of Commerce and Industry, Pohang City has ranked atop in the nation.

Cheonan City in South Chungcheong Province, which earned the highest marks in investment environment including executive ordinances, operated mobile counseling service with KOTRA, and resolved more than 100 cases of difficulties. The city is also exerting efforts to create a foreign company complex by investing 12.5 billion won (10.7 million dollars) from the city’s budget. Cheonan City has attracted a cumulative total of 350 million dollars of foreign investment in 78 cases over the past three years.

Last year, reported foreign direct investments (FDI) in Korea amounted to 19 billion dollars, and the value of actual FDI came to 11.5 billion dollars, both reaching all-time high, but a look into details reveals causes for concern. While green field investment designed to build factories or found businesses only amounted to 15.2 percent, investments for M&As, which could instantly flight when the Korean economy deteriorates, increased by 60.3 percent. China’s investment growth in Korea marked a 147.2 percent increase, Japan’s investment declined 7.5 percent, while concentration of Chinese direct investment in Korea is not a situation that can necessarily be welcome.

Regardless of whether they are domestic companies or foreign companies, local governments that attract more investment can increase jobs and income for residents. What is important is the mindset of civil servants at local governments in striving to remove and reduce obstacles, including rigid labor market, militant labor union and anti-business sentiment. The most critical variable that determined the results of assessment for respective local governments in the latest survey was also civil servants` attitude.

Currently, countries of the world are making all-out efforts, ranging from heads of state to local governments, to attract investment in the manufacturing sector, considered the "root" of the economy. Indian Prime Minister Narendra Modi, who is endeavoring to attract foreign investment by trumpeting “Made in India” in a bid to nurture the Indian manufacturing industry, urged the international community, saying “Be it plastic, automobile, satellite, or processed food, please come to India and produce them.” In order to address conditions that serve as stumbling blocks to investment, not only local organizations, but also the central government and political circles should realize the reality, and put plans into practice.