Latest policy shift is feared to reduce domestic jobs
By Lee Hyo-sik
The government has decided to encourage domestic companies to head overseas and build production plants, even at the risk of endangering jobs in Korea.
For years, policymakers have urged local manufacturers to expand production facilities here to create jobs rather than go overseas. But with Korea's rising labor costs and other unfavorable business conditions, the government has no choice but to give up its "Made in Korea" policy drive and adopt the new "Made by Korea."
While announcing the 2016 economic policy plan, the Ministry of Strategy and Finance and other ministries said Wednesday they will build industrial complexes in China, Vietnam, Myanmar, Indonesia and other emerging Asian economies exclusively for domestic companies.
Beginning in June, Land & Housing Corp. (LH), the state-run infrastructure developer, will be mobilized to build industrial complexes abroad, not only for large local companies, but also for small and medium enterprises.
In addition, the so-called Korea Business Center will be set up in New York, Beijing and Ho Chi Minh City to provide legal, accounting and labor issue-related consulting services to Korean firms.
The latest policy shift reflects the country's deteriorating business environment as a result of soaring wages, excessive regulation, militant labor unions and other business-unfriendly factors.
"The shift to ‘Made by Korea' is a timely decision for Korea Inc., which has been suffering from weakening global competitiveness," said an executive at one of the country's business associations, who declined to be named. "Despite Korean government efforts to create a more corporate-friendly environment over the years, it has further deteriorated. Policymakers have finally realized that local companies are better off going overseas and producing goods outside Korea."
Cars, electronics and many other industrial goods can be made cheaper overseas, the executive said, stressing the government should extend support to local businesses when they make inroads in foreign markets.
"If Korean companies hire workers and produce goods abroad, this will adversely affect the local job market," he said. "Everybody knows this, but certain businesses cannot manufacture goods here because, if they do, they cannot compete in the global market. More and more businesses will head overseas in the coming years to establish a production base in foreign countries. Unless wages drop and other business conditions improve, there will certainly be fewer jobs here."
By Lee Hyo-sik
The government has decided to encourage domestic companies to head overseas and build production plants, even at the risk of endangering jobs in Korea.
For years, policymakers have urged local manufacturers to expand production facilities here to create jobs rather than go overseas. But with Korea's rising labor costs and other unfavorable business conditions, the government has no choice but to give up its "Made in Korea" policy drive and adopt the new "Made by Korea."
While announcing the 2016 economic policy plan, the Ministry of Strategy and Finance and other ministries said Wednesday they will build industrial complexes in China, Vietnam, Myanmar, Indonesia and other emerging Asian economies exclusively for domestic companies.
Beginning in June, Land & Housing Corp. (LH), the state-run infrastructure developer, will be mobilized to build industrial complexes abroad, not only for large local companies, but also for small and medium enterprises.
In addition, the so-called Korea Business Center will be set up in New York, Beijing and Ho Chi Minh City to provide legal, accounting and labor issue-related consulting services to Korean firms.
The latest policy shift reflects the country's deteriorating business environment as a result of soaring wages, excessive regulation, militant labor unions and other business-unfriendly factors.
"The shift to ‘Made by Korea' is a timely decision for Korea Inc., which has been suffering from weakening global competitiveness," said an executive at one of the country's business associations, who declined to be named. "Despite Korean government efforts to create a more corporate-friendly environment over the years, it has further deteriorated. Policymakers have finally realized that local companies are better off going overseas and producing goods outside Korea."
Cars, electronics and many other industrial goods can be made cheaper overseas, the executive said, stressing the government should extend support to local businesses when they make inroads in foreign markets.
"If Korean companies hire workers and produce goods abroad, this will adversely affect the local job market," he said. "Everybody knows this, but certain businesses cannot manufacture goods here because, if they do, they cannot compete in the global market. More and more businesses will head overseas in the coming years to establish a production base in foreign countries. Unless wages drop and other business conditions improve, there will certainly be fewer jobs here."
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