S. Korea aims to attract more "green growth" foreign investment

By Lee Joon-seung
SEOUL, May 27 (Yonhap) -- South Korea aims to attract more green growth-related
foreign direct investment (FDI) to help bolster the sluggish economy, the
government said Wednesday.
The Presidential Council on National Competitiveness said it has selected 17
eco-friendly new growth industries that could attract investment by up to 100
foreign companies.
It said to make South Korea more attractive for overseas businesses the
government will double the size of the cash grants it can offer businesses and
temporarily scrap the minimum limit on inbound investment that could receive such
support.
Concentration on green growth, which covers advanced reusable energy
technologies, clean transportation and efficient lighting is a key economic
strategy of the Lee Myung-bak administration.
"At present the government provides cash grants equaling around 5-10 percent of
total funds that arrive in the country, but this has been deemed inadequate,"
said Lee Dong-geun, a deputy minister at the Ministry of Knowledge Economy. The
minimum investment amount that triggers eligibility to receive support currently
stands at US$10 million.
The official in charge of trade and investment promotion said while 10 billion
won has been set aside this year as cash grants, the total can be increased if
investment takes place.
"Because there is considerable interest in green growth areas like wind, solar
power and fuel cells, an adjustment in cash grants could be used as extra
leverage to win deals that can have positive impact on the economy," he said,
adding the new measures are primarily designed to help relatively smaller-scale
FDI.
Seoul started giving cash grants from 2005 with 15 billion won handed out to
three foreign companies so far. These companies had pledged to spend 150 billion
won in the country.
The Knowledge Economy Ministry, meanwhile, said FDI is an important means to help
breath new life into the domestic economy and create new work.
As of last year, foreign companies provided work for 320,000 people, accounted
for 184 trillion won in sales, and exported $55.3 billion worth of goods.
Seoul said earlier in the year that it wants to attract $12.5 billion worth of
FDI this year, with the total standing at around 3.6 billion as of early this
week or a 0.5 percent gain from the same five month period last year.
In the first quarter, inbound FDI plunged 38.2 percent on-year to just $1.6
billion as companies around the world cut back on investments.
yonngong@yna.co.kr
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