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S. Korea Plans to Bring W60b Foreign Investment into Service Industry
Source: koreaherald.com
Source Date: Tuesday, September 14, 2010
Country: Korea (Republic of)
Created: Sep 20, 2010

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The government plans to attract 60 billion won ($51.7 million) in foreign investment within the next five years to upgrade the local service industries and create 150,000 jobs.

The four industries focused upon are information services, tourism, logistics, and a division combining the financial, education and medical services industries, a joint statement of the Ministry of Knowledge Economy and relevant agencies said. .  

“This is the government’s first concrete plan to bring foreign funds into the services industry, an effort to diverge focus from the manufacturing industry,” it said. 

A total of 13 government ministries and the Foreign Investment Committee have agreed to better the investment environment through deregulation and intensive promotion of the benefits being offered.  

Foreign entities looking to develop smart grid technologies or energy services in Korea can now tap into the government fund. Cash support of up to 40 percent will be granted for smart grid companies and the amount loans set aside for energy services companies will be increased to 300 billion won from the current 135 billion won.

The maximum borrowings allowed, 50 billion won per company, will also be removed.  

As for the tourism industry, the government decided to expedite marina developments by abolishing the eligibility requirement for investors.

The Ministry of Land, Transport and Maritime Affairs has been working to create 43 world-class marinas harbors across the country for the next decade but recently faced criticism for its slow progress.

To overcome insufficient accommodation, the government will induce more investments from low- to mid-budget hotel chains such as Best Western, Ibis and Tokyo Inn.  

Investments in R&D will also be invited and value-added service business models such as 3-D contents development will be encouraged with tax breaks.  

Proceeded accordingly, the plan will generate 150,000 jobs and raise $2.5 billion of incremental profit for the services industry in the next five years.  

The government has been increasing efforts to size up the service industry to create jobs in demand and move up the supply chain with the rising manufacturers in the emerging markets.  

Manufacturing industry accounted for a record 27.6 percent of the country’s GDP in the second quarter, reflective of Korea’s excessive reliance on exports and thus overseas markets, the Bank of Korea said Monday.

Officials and analysts have been calling for more efforts to build up the country’s service industry as a way to ensure sustainable growth.
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