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[May 24. 2016 Korea times] Presidential trips promote FDI
- Date : 2016.07.12
- Views : 412
Presidential trips promote FDI
By Jeffrey I. Kim
Confucius (551-479 B.C.) was a Chinese social philosopher. His writings have greatly influenced East Asian life and thought. "Confucius" is a Romanization of the Chinese Kong Fu Zi. He emphasized study and practice at an early age. He left a great number of his analects. His analects are often quoted. One of the best analects quoted among the intellectuals is, "Is it not a great pleasure when friends visit from distant places?" Means of transportation at that time were poor and a long-distance journey was extremely tiring. At times they had to risk their lives. So seeing a friend who came from a long distance was such a pleasure.
This sentiment is not confined to the East Asians alone. People in the rest of the world would feel the same way. They will all heartily greet their friends coming from long distances. Their friendships will be strengthened as they meet together after a long while.
In modern times, presidential trips from distant places serve many purposes. Traveling long distances by air is tiring. Flying long enough to change the time zones can be physically exhausting. So the head and the people of the host country pay respect to the head of the visiting foreign country. For these reasons, the presidential trips do not merely strengthen personal friendships among the two countries but firm up their economic ties as well. As a consequence, the economic fruits of the state visits will be enjoyed by the citizens of both countries.
Presidential trips to foreign countries are often classified into three categories by significance -- state, formal and working. They are all important and the classification is based more on protocols, not necessarily the substance of the meeting itself.
The visiting head of state is usually accompanied by an entourage of senior government officials and by delegations made up from trade organizations.
President Park will take her 21st overseas visit, making a state visit to three countries in Africa and also France starting from May 25. Since her presidential inauguration, President Park has made overseas visits 20 times covering a total of 37 countries. During the presidential visit, business leaders join her journey to explore potential business opportunities in the host countries. Their business trips with the president have been extremely productive. This time a total of 169 businessmen representing 166 companies are joining President Park's state visit.
The global business environment in today's world is full of risks and uncertainties. It has become more difficult to decide whether or not to make foreign investments. This is because the degree of business uncertainties and the magnitude of investment risks have increased considerably. However, the friendly meeting of the two heads of state will significantly reduce business risks and economic uncertainties.
While operating businesses in the host country, foreign investors encounter numerous problems, some expected, some not expected. A large proportion of the problems have a lot to do with unjustifiable regulations. President Park is well known to be the warrior fiercely fighting against regulations. It can be argued that President Park's firm position on deregulation certainly helps the foreign investors to invest in Korea.
This argument is supported by some statistical evidence. FDI in Korea is rising. It has been increasing since 2013. The amount of FDI jumped from $14.5 billion in 2013 to $19 billion in 2014 and further increased to more than $20 billion last year.
Over the period 2014-2015, the FDI from the middle east increased by more than 500 %, the FDI from China by 66.4%, and the FDI from the US by 52%. All these figures support the argument that the state visits by President Park contributed to the drastic expansion of Korea's FDI. While visiting the countries, the President suggests promising infrastructure construction projects in which the two countries jointly participate.
However, it should not be construed that state visits promote FDI only. A state visit brings the citizens of the two countries closer to each other, thereby strengthening their friendship and mutual trust. This is the foundation for maintaining steadfast economic partnership. For these reasons, President Park's state visit is always welcome for Korea.
Jeffrey I. Kim is a foreign investment ombudsman, a presidentially appointed troubleshooter for investors and entrepreneurs from overseas. He earned a Ph.D. in economics at the University of Chicago and taught at the University of Colorado, Boulder, and Sungkyunkwan University.
Link : http://koreatimes.co.kr/www/news/opinon/2016/05/137_205334.html