By Kim Yoo-chul
Korea Times Correspondent
MANILA, Philippines ― South Korea will have to step up efforts to attract more foreign investment by creating an environment friendly to foreign businesses with more benefits, a renowned foreign researcher has said.
``Korea's faster business shift and greater focus on a friendly investment environment are quite positive when it comes to attracting more investment from such foreign investors as Middle Eastern funds,'' Federico M. Macaranas, a former economics advisor to the First Philippine Fund in New York, said in an interview with The Korea Times.
``As more countries have implemented stricter rules to monitor power consumption and environmental waste, growing awareness among consumers about using eco-friendly technology will push up demand,'' the former confidant of former Filipino President Fidel Valdez Ramos said on the sidelines of the 7th business forum organized by the Asian Institute of Management (AIM).
Since veteran financier David Eldon joined the presidential transition team in line with President-elect Lee Myung-bak's strong pledge to form a ``business-friendly'' government, attention has been focused on ways to boost foreign investment in Korea.
Foreign investment dropped 6.5 percent year-on-year to $10.5 billion last year from $11.2 billion in 2006, according to recent data from the Ministry of Commerce, Industry and Energy. The figure was $11.6 billion in 2005.
``The government is expected to give much broader tax and administrative incentives to companies constructing plants with eco-friendly technologies, which would also be a good sign for idle foreign investors,'' he said.
Macaranas is the executive director of the AIM Policy Center, the Institute's think tank on public policy, where he holds the Fidel V. Ramos Chair in Public Policy Studies. He is a former dean of the AIM Center for Development Management, where he teaches economics and environmental analysis. He joined the Institute in March 2000.
From flat-panel, shipbuilding, home appliances to steel-making, local manufacturers have been struggling to secure next growth engines under challenging market circumstances.
Asked about the possibility the South Korean market could open up as much as Dubai's, he said a few cities could do so under the same blueprint.
``I expect the next government to strengthen tie-ups with ASEAN nations rich in natural resources,'' he said.
David Eldon, the sole foreign adviser on the presidential transition team, has mentioned the ``Dubai model'' several times in proposing policies by saying many regulations in the financial service sector have hampered capital inflow.