2018-06-21 05:28 KST  
Global Voices Online - The world is talking. Are you listening?
'Mr. Roh, Save Our Land...'
[Opinion] One entrepreneur asks for changes in South Korean policies on foreign direct investment
Bernard Moon (bernard)     Print Article 
Published 2005-09-09 05:38 (KST)   
Pride fills my heart when I contemplate how quickly a nation of 48 million and an area a little smaller than my home state of Illinois has risen to become the 10th most significant world economy. A smile calmly settles into place when I reflect on how Korea picked itself up from the ashes of its economic nightmare caused by the corruption and mismanagement from its chaebols and banks.

My passport states I'm an American citizen and my principles and thinking are clearly are born from the land of Jefferson and Lincoln yet I still consider Korea my land.

So as South Korea's current administration continues towards its downward spiral in terms of public favor and President Roh Moo Hyun's approval ratings fall to the cellar, my heart drops as he continues to initiate policies that damage the long-term economic health and development of South Korea.

I see "our land" at an important nexus in its economic and national development. South Korea has become a global model in the broadband and wireless industries while continuing its worldwide leadership in consumer electronics and semiconductor technology. It has moved beyond becoming a manufacturer of quality products to a leading innovator in numerous industries.

More importantly, the nation is slowly become a significantly contributor to major advances in science. From new discoveries in stem cell research to Kim Hyun Tak's recent "Mott Insulator" invention signals the next stage of development for South Korea. In becoming an established creator of leading technology, its value and influence in the world economy will increase. But the question is will South Korea gain from these advances? Will new companies be established, new jobs created, and wealth distributed to new people? Or will the chaebols and their owners continue to reap the benefits of these advances?

I believe these questions will be answered in how effectively South Korea develops its investment infrastructure and the overall venture capital and private equity industries. These are significant engines of new job growth and new wealth creation for decades in the U.S. and a lesson for South Korea to be mindful of. So the Roh administration's treatment of foreign direct investment firms baffles me. This is a critical juncture where the nation needs to cultivate global investment and transfer of knowledge into South Korea not the opposite.

Recently, private equity firms, such as Carlyle and Newbridge, were victims of "shock audits" where the National Tax Service (NTS) stormed their offices and took away various files without warning. These and numerous other firms are being investigated while Lone Star and Carlyle have been "assessed" taxes of more than $40 million. I've heard beyond investment firms the NTS will conduct audits of more than 140 foreign firms. This is a witch-hunt based on either stupidity or reflective of a desperate administration attempting to gain some positive national sentiment.

It seems to me that the Roh administration is not only desperate but lazy. They are taking the path of least resistance in dealing with the growing negative sentiment against foreign investment firms in Korea, which has grown over the past few years. While this mantra works in developing consumer products, what is really needed here are intelligent and informed decisions by South Korea's government.

It is easy to rally the uninformed elderly or ignorant college students about the evils of foreign investment. It takes courage and leadership to explain what really happens. How foreign investment firms only reap the benefit of their investment if they improve the operations of a company, which in turns benefits consumers and the overall industry, and how most do not even make a return worth their investment in the end. The real benefit of private equity and a real venture capital industry is the transfer of knowledge into South Korea's management and entrepreneurial talent, which it still sorely needs.

If President Roh really wants to redistribute wealth and create a real middle class in South Korea, part of his policy should be to foster a healthy entrepreneurial environment and where new companies have other opportunities beyond just getting crush by a chaebol in the domestic market or selling out to a chaebol. What does he do instead? His administration recently announces that foreign funds registered in previously agreed upon tax havens can be charged capital gains.

Please, President Roh, stop this madness. If you really are interested in the long-term health of South Korea and not satisfying some ignorant activists, please reconsider your policies against foreign direct investment. If you continue down this path, foreign capital will redirect itself to other markets. In this era where China is becoming more significant, South Korea is rapidly losing its luster and it should be doing the opposite in this new competitive landscape.

Do you expect to create an insular investment industry? I sincerely hope not because it will only create poorly manage investment funds similar to the banks a decade ago and probably a significant amount of corruption.

Are you really doing this for the health of Korea or the health of your approval ratings? Polls come and go, but these policies against foreign investment firms can effect generations to come. Is this the legacy your really want to leave behind? Please, President Roh, save our land and work for our future not against it.
Bernard Moon is vice president of business development at GoingOn Networks, a columnist at AlwaysOn, a leading Silicon Valley technology journal, and a blogger at BernardMoon.blogspot.com.
©2005 OhmyNews
Other articles by reporter Bernard Moon

Add to :  Add to Del.icio.usDel.icio.us |  Add to Digg this Digg  |  Add to reddit reddit |  Add to Y! MyWeb Y! MyWeb

Ronda Hauben
Netizens Question Cause of Cheonan Tragedy
Michael Werbowski
[Opinion] Democracy's Downfall
Michael Solis
Arizona's Immigration Bill and Korea
Yehonathan Tommer
Assassination in Dubai
[ESL/EFL Podcast] Saying No
Seventeenth in a series of English language lessons from Jennifer Lebedev...
  [ESL/EFL] Talking About Change
  [ESL/ EFL Podcast] Personal Finances
  [ESL/EFL] Buying and Selling
How worried are you about the H1N1 influenza virus?
  Very worried
  Somewhat worried
  Not yet
  Not at all
    * Vote to see the result.   
  copyright 1999 - 2018 ohmynews all rights reserved. internews@ohmynews.com Tel:+82-2-733-5505,5595(ext.125) Fax:+82-2-733-5011,5077