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| President Moon Jae-in speaks at the start of his meeting with foreign businesspeople at Cheong Wa Dae, Thursday. Yonhap |
By Kim Yoo-chul
A permanent peace on the Korean Peninsula will provide big business opportunities for foreign firms, President Moon Jae-in said Thursday.
"I want you to focus more on the positive economic aspects of peace on the peninsula as I believe a peace-driven economy will help the Koreas become the world's most lucrative business market," Moon said during a meeting with foreign businesspeople at Cheong Wa Dae.
The inter-Korean summits held last year significantly helped South Korea see reduced geopolitical risks, the President added.
"Standard and Poor's (S&P), one of the world's top three credit ratings agencies, has maintained South Korea's sovereign rating at a record high, even higher than China and Japan."
Moon said South Korea's credit default swap (CDS) premium has remained at a record low since October 2007. The CDS premium is seen as a key criterion for calculating foreign currency funding, which positively impacts domestic companies.
"South Korea will help foreign investors here reduce the cost of doing business by further relaxing unnecessary regulations. We will offer you more incentives in return for your investment. These are the core strategies set by the government to bring in more foreign capital. I am expecting to see an increased role for foreign investors here, for bigger investments in areas relating to the Fourth Industrial Revolution," Moon said.
The meeting was attended by business representatives from 56 foreign companies operating in South Korea and nine business lobby groups including the U.S. and European chambers of commerce. The meeting was the first of its kind since Moon took office in May 2017.
The government's policy of engagement with North Korea including humanitarian aid and economic cooperation is designed to prevent an economic failure in the North and encourage the gradual reform of its economy and political system. But some critics say this engagement has been disrupted by international disputes over the North's suspected maintenance of weapons of mass destruction (WMD) programs.
President Moon noted that foreign firms have a significant presence here, accounting for 19 percent of the country's total exports, and providing 7 percent of all jobs as of last year.
"Foreign capital and foreign companies are on the same page as you invested here. South Korean firms have a weak presence in components and materials, but foreign firms are helping Korean companies offset such weakness," Moon said.
Foreign direct investment into South Korea reached a record high of $26.9 billion last year, an increase of 17.2 percent from 2017.
Asia's fourth-largest economy is suffering from prolonged low growth, widened income inequality and an aging population. To cope with the difficulties, the Moon administration is pushing to foster startups, Cheong Wa Dae said.
The failure of the U.S.-North Korea summit in Hanoi last month was a blow for the government, which had pinned hopes on the U.S. easing sanctions on North Korea that would lead to the reopening of inter-Korean projects including the Gaeseong Industrial Complex and Mount Geumgang tourism, and the start of connecting inter-Korean railways.
Those projects, stymied by sanctions on the North, are key to Moon's economic initiative that he sees as a driver for the South's moribund economy, which is suffering from its worst unemployment in a decade.
