Q: What are the most notable developments for FDI in South Korea at the moment?
A: I would start off by saying that our president [Park Geun-hye] emphasised the importance of FDI in her inaugural speech, delivered in February 2013. Since then, she has implemented various policies to improve the environment for foreign investment in Korea. She has eliminated unjustified and outdated regulations related to foreign investment. Consequently, FDI inflows have increased dramatically from 2013 to 2014, from $9.9bn to $12bn. In the following year, FDI increased by more than 35%, from $12bn in 2014 to $16bn in 2015. This year – as of the end of June – FDI inflows are already half the amount of the 2016 target.
[With regards to] our partner countries, up until 2012 we had received the largest amount of FDI from the US, then from Japan, then from the EU, with the least coming from China. But in 2015, this ranking order [was] the US, the EU, China and then Japan. So [the increase in Chinese investment] is a key development in Korea’s FDI.
Q: What FDI initiatives has the government been undertaking?
A: The Ministry of Trade, Industry and Energy in Korea is trying to establish a well-functioning, centralised communication channel between foreign investment companies and the relevant government agencies. Because they know that through this channel, foreign investors can bring new grievances or complaints to government [staff], and the government agencies – the relevant ones – can hear the complaints and they can seek the solutions to them.
Of course, we the Office of the Foreign Investment Ombudsman arrange meetings and forums. We hold biannual ministerial meetings, for example, and monthly deputy-ministerial meetings, and other similar meetings and forums. The government is also trying to pursue policy measures to promote FDI by lowering entry barriers for investors, and by eliminating grey zones to avoid unnecessary disputes. It is also trying to eliminate regulations related to the service sector because it realises the importance of the service sector as a promising future industry.
Q: As the ombudsman, what are the most common types of problems that you have to deal with?
A: It ranges from the small, trivial issues such as when [investors] fail to extend their visas, which we can take care of with ease. When they want to find good-quality young workers, we arrange meetings [between] foreign investment companies and students. We give [particular consideration] to students from local universities because in the Seoul metropolitan area they have better access to information about job placement and so forth. But students in local colleges [in more remote areas] have somewhat limited access to these opportunities… so we provide a forum and a place to meet and discuss employment possibilities with foreign companies. It is like match-making.
Sometimes we get involved in difficult grievances, especially when there is a difference in opinion or interpretation of the laws between the different agencies or governments. For example, the Ministry of Environmental Protection is very strict towards companies, regardless of whether they are domestic or foreign, whereas the Ministry of Industry tends to be more favourable towards the foreign investor. So when problems arise in grey areas, obviously different agencies of the government get in trouble too with foreign investors. But then we try to strike a balance so that the two agencies can reach a compromise.