Investment-friendly Environment
Representatives of foreign business organizations and companies complained to Deputy Prime Minister and Minister of Strategy and Finance Hyun Oh-seok about regulations on ordinary wages and telemarketing at a luncheon meeting at Lotte Hotel in Seoul on February 12. In particular, they pointed out that those rules are inconsistent.
The meeting was attended by a total of 16 foreign business representatives, including heads of major business lobby groups representing foreign firms including the American Chamber of Commerce in Korea (AMCHAM), the European Chamber of Commerce in Korea (EUCCK), and the French Korean Chamber of Commerce and Industry. High-ranking officials of foreign companies such as Apple Korea, Citigroup Korea, AIG Korea, and Allianz Life Korea also attended.
At the meeting, Deputy Prime Minister Hyun promised to make Korea a more attractive country for investment, and appealed to attendees for more investment. He said, “Uncertainty in financial markets of some emerging economies has been growing, following the US Fed’s tapering of its quantitative easing policy.” He added, “But Korea is in a different situation, because the nation’s financial health is sound. Our current account balance is positive, and we have sufficient foreign-exchange reserves.”
The Deputy Prime Minister stressed that even though foreign invested companies are a main pillar of the world’s 13th largest economy, Korea’s request for investment is not one-sided. It means that there are a lot of things that the country can offer, including skilled manpower and infrastructure, to foreign companies. On top of that, the Korean government’s willingness to support is strong. He also promised to improve transparency of laws and implement its policies in a “stable” manner, eliminating any inconveniences that foreigners could encounter in doing business here.
After his remarks, however, representatives of overseas companies criticized the Korean government’s inconsistent regulations. In particular, the foreign business representatives urged the Deputy Prime Minister to address the ordinary wage problem as quickly as possible.
After the meeting, Steven Barnett, president & CEO of AIG Korea, said, “I mainly pointed out that regulations lack consistency,” adding, “There was much debate over restrictions on telemarketing, which were triggered by recent massive data leaks.” After the leakage of personal information, financial authorities banned financial companies’ non-face-to-face sales, including telemarketing calls, text messages, and e-mails, along with loan solicitation. Nevertheless, they allowed those unsolicited sales tactics again, as the job security of telemarketers became an issue. Barnett noted, “We acknowledge that personal information should be protected. But regulations need to be consistent.”
Many foreign representatives agreed that the current administration makes an effort to create a good investment climate, but at the same time it makes restrictions that are not helpful for foreign investment. Edouard Champrenault, Executive Director of FKCCI, said, “From the perspective of investors, uncertainty is the problem.” The executive director added, “A lot of things have changed under the current administration. And the regulatory environment has changed drastically.” In particular, he pointed out the ordinary wage problem. He commented, “Before making any decision, investors should think about the next ten years. But the ordinary wage problem is a big issue.” He concluded by saying, “We can make an investment decision only after the issue is settled.”