Park assures U.S. firms over Korea investment

By Korea Herald

President notes foreigners are buying Korean bonds; GM reaffirms 8 trillion won investment plan

  • Published : May 9, 2013 - 19:56
  • Updated : May 9, 2013 - 19:56
WASHINGTON ― President Park Geun-hye on Wednesday (Thursday Korea time) met with prominent business leaders in Washington, D.C. and stressed the attractiveness of Korea as an investment destination despite the North Korea risk.

On the second-last leg of her U.S. trip, Park attended a roundtable and luncheon hosted by the U.S. Chamber of Commerce. One hundred and seventy leading figures from American business such as GM Chairman Daniel Akerson and Lockheed Martin CEO Marillyn Hewson attended, as did many of Park’s business delegation.

“We will deal boldly with needless red-tape and we will breathe fresh energy into all facets of economic activity. Taken together, these efforts will make Korea a destination of choice both for American investors and other foreign businesses,” Park said in her speech delivered in English.

“Notably, foreigners are increasingly becoming net purchasers of Korean bonds. I am inclined to believe this is a vote of confidence” in the resilience of the Korean economy and in Korea’s track record of turning adversity into opportunity, Park added.
President Park Geun-hye receives welcoming applause after her opening speech at a luncheon hosted by the U.S. Chamber of Commerce at Willard InterContinental in Washington on Wednesday. On her left is Paul Jacobs, chairman of the U.S.-Korea Business Council, and on her right is Steve Van Andel, vice chairman of the U.S. Chamber of Commerce. (Yonhap News)

The U.S. participants praised the Seoul government’s efforts for a so-called creative economy and reaffirmed their investment plans for South Korea.

According to the presidential office, Seoul attracted foreign direct investment worth $380 million from seven U.S. enterprises such as the Boeing Company, Almost Heroes LLC and Curtiss-Wright on the occasion of the president’s U.S. visit.

The roundtable also became the site of heated discussion due to an interview GM’s Akerson gave last month that indicated his company could consider moving its production line in South Korea if the North Korea risk grew.

At the meeting with Park, Akerson was quoted as saying the company was “not abandoning” Korea and was planning to invest around 8 trillion won in the country in the next five years.

But he also talked about the two key obstacles that his company faced, which were the weak yen and the latest court rulings in Korea regarding the scope of the “ordinary wage,” according to Cho Won-dong, chief secretary for economy at a press briefing held in Los Angeles, the last stop of Park’s trip.

GM Korea lost a lawsuit raised by its labor union regarding the standard payment, or the basis upon which severance pay is calculated. The court ruled in favor of the union that bonuses must be included in the ordinary payment, Cho explained.

The issue was also raised during Park’s breakfast meeting with Korean businesses, during which a medium-sized company owner broached the subject, saying it could become a major obstacle to businesses operating in the country and that it could spread to small companies down the road.

Park, during the luncheon, reportedly said, “It is not only a problem faced by GM, but the entire Korean economy,” indicating her attention to the matter.

Park also evaluated the progress of the Korea-U.S. free trade agreement and pledged economic cooperation would continue to grow on the basis of a robust security posture.

Earlier in the day, Park held her first face-to-face encounter with the heads of the country’s biggest conglomerates since her inauguration. The 52-member delegation included chairmen Huh Chang-soo of the Federation of Korean Industries, Sohn Kyung-shik of the Korea Chamber of Commerce and Industry, Lee Kun-hee of Samsung Electronics, Chung Mong-koo of Hyundai Motor Group, Koo Bon-moo of LG Group, Kim Chang-geun of SK Group’s top decision-making SUPEX Council and Shin Dong-bin of Lotte Group.

Moon Jin-kook, head of the Federation of Korea Trade Unions, the nation’s largest labor umbrella group, also accompanied the delegation, showing a “united front” to portray a robust business environment despite external risk factors, namely North Korea.

Representatives of small and medium-sized companies such as chairmen Kang Ho-kap of the Association of High Potential Enterprises of Korea and Nam Min-woo of the Korea Venture Business Association also joined.

The session, held over breakfast in Washington, was also considered a moment of reconciliation for Park and the top business leaders, as they had an uneasy start upon Park’s election on the back of so-called economic democratization.

“It is all the more pleasant to see you all in the U.S. as we could not have the opportunity to do so in Korea,” Park told the participants in an opening speech.

“The occasion has been effectively turned into an example of investor relations as you have accompanied me to show that the Korean economy is being stably managed as foreigners have anxiety due to recent provocations by the North.”

She praised the big wigs’ moves toward ending the practice of giving preferred contracts to its affiliates and making irregular workers regular employees and urged them to continue to try making a fair market economy and expand investment.

In response, Lee Kun-hee showed support for Park’s creative economy pledge, saying that it was important to create an environment where large conglomerates, small and mid-sized companies and venture businesses could mutually grow together.

“Samsung will put utmost efforts to bring about specific accomplishments in terms of creative economy and stand at the vanguard to making our economy robust by maximizing investment and jobs,” Lee said.

Chung Mong-koo also promised wider investment into research and development, and said, “We will try the hardest to create high-quality jobs that can spread out to the entire industry by actively pursuing win-win growth with smaller businesses.”

Koo Bon-moo pledged LG would fulfill its social responsibilities as well as pursuing investment and employment. He also urged the president to provide policy support so that large businesses could invest in fostering future scientists and engineers.

By Lee Joo-hee, Korea Herald correspondent