SEJONG, Feb. 18 (Korea Bizwire) – South Korea will make efforts to prevent rising North Korean risks from hampering foreign investment in the country following North Korea’s latest nuclear test and rocket launch, the trade minister said Thursday.
After carrying out an alleged hydrogen bomb test in early January, Pyongyang defiantly launched a long-range rocket on Feb. 7, which Seoul and Washington consider to be a cover for a ballistic missile test.
In response, Seoul shut down the operations of a joint factory park in the North Korean border city of Kaesong, the last remaining symbol of their cooperation, raising inter-Korean tensions to their highest point in years.
“The government will provide swift and exact information and minimize any misunderstandings in order to block North Korean issues from crimping foreign investment,” Trade Minister Joo Hyung-hwan said in a meeting with foreign businesses in Seoul.
“South Korea puts its top policy priority on clearing any bottlenecks that hinder foreigners from making investments here.”
Foreign direct investment reached a record high of US$20.9 billion last year, up 10 percent from a year earlier.
But South Korea experienced massive outflows of foreign capital in the stock market last year out of worries that Asia’s fourth-largest economy is losing steam.
Its economy grew 2.6 percent in 2015, while exports, the key economic driver, posted negative growth for every single month throughout last year.
In January, outbound shipments plummeted 18.5 percent on-year, marking the fastest decline in six and a half years.
“South Korea is one of the most attractive countries to invest in despite such geopolitical risks and an economic downturn,” said Joo, referring to the country’s $1.4 trillion gross domestic product and a network of bilateral free trade deals.
He promised to lift legal and financial regulations on foreign investment and expand benefits including lower rent and R&D aid for foreign investors.’