South Korea's formula for economic development

What is the secret of Korea's economic development when I am talking to Nepalese politicians and financial stakeholders? I have received the question many times. One of the various aspects of Korea's development is the positive steps taken by the government to bring in foreign direct investment and the proper utilization of investment.

If we look at classical economics, labour, capital and land are taken as the basic aspects of production. During the economic development of Korea, there was not enough capital to invest and it was not easy to raise. The government has been continuing its efforts to attract foreign loans and foreign investments to raise capital. Labor and land were available to us.

Korea has long experienced the various benefits of foreign direct investment during the country's economic development. Therefore, even today, the central and local governments to attract foreign investment Various Has continued to provide facilities and incentives.

Benefits of foreign investment

If Korea's experience is exchanged, the national economy and industry can benefit positively from direct foreign investment. Similarly we Through foreign investment, we got rid of the lack of investment resources internally and succeeded in creating sufficient employment in the domestic market. According to a study published last September, 295,000 jobs were created through foreign direct investment in Korea in the last 10 years.

Job creation is considered the best social welfare policy and employment can play a positive role economically and socially. Foreign investment can stimulate a country's economic development, create an industry and investment environment, and make local communities and economies viable. Foreign investment can lead to overall economic growth of the country by increasing local income and purchasing power.

On the other side, the technology and knowledge of companies established by foreign investment are transferred to the country of investment and Technical manpower also plays a positive role in production. Among the foreign investment industries in South Korea, there are many examples of technology transfer industries emerging globally today.

In order to do business in other countries, the presence of internationally renowned industries and investments plays a positive role in order to ensure the business goals, as the foreign-invested industries have the necessary information about their own countries. International trade can be possible through foreign direct investment. Foreign investment has a positive effect on the expansion of exports, and instead of monopolies in the domestic market, a market based on competition is created and consumers are easily accessible. Similarly, the facilities and equipment available through foreign investment help to increase the productivity of the labor force in the target country.

The possibility of foreign investment in Nepal in the eyes of foreigners

Looking at the Nepalese economy from the eyes of foreigners, there are both possibilities and weaknesses for attracting foreign direct investment.

Relatively competitive labor market, huge investment potential in energy sector, Himalayas and full of diversity The abundant potential of Nepal to attract foreign direct investment, including cultural heritage, is a topic that everyone ponders. To increase the attraction of foreign investment in Nepal, the investment process should be simplified. It seems necessary to provide sufficient skilled manpower and equal treatment to the investing companies as the indigenous companies. It is timely that the government of Nepal is in the process of drafting related laws with strong will to improve this sector.

It is indispensable to inform the related countries that there is a favorable environment for foreign investment in Nepal through the officials of diplomatic missions of various countries in Nepal. The main interest of the investors is to invest easily and earn profit and they prioritize the subject that can easily take the profit to their country.

In the same way, the government should play the role of an advocate to solve the problems that arise. In other matters, the provision of facilities such as tariff exemptions for bringing in foreign investment also plays a positive role. Visa Simplification of the system, tax exemptions at the initial stage also help to create an investment environment.

Korean company's investment in Nepal

Korean companies are closely monitoring the economic investment potential in Nepal. There are examples of some companies investing in Nepal and successfully conducting business.

For example, the Korean global company Samsung Electronics has been operating a state-of-the-art TV assembly plant since April last year in a joint venture with Nepal's Golcha Organization. Hyundai Motor Company is planning to start commercial production in May this year by establishing an automobile assembly plant in Nawalparasa district in partnership with a local company in Nepal.

Korea's South-East Power Company in the field of hydropower generation in Nepal in partnership with global financial institutions The Upper Trisuli-1, 216 MW water resource project in Rasuwa district is under construction with an investment of 650 million US dollars. This project aims to produce electricity in 2027.

The importance of large foreign investment is as important as the investment of medium industries. In the context of Nepal, I would like to inform you that the investment of Korean small and medium companies is also active. Employment In terms of creation, I would like to remind you that the role of small and medium enterprises is effective. For example, making fake hair The famous Korean company Haimo has invested 100 percent in a local company called Mandumo in Kathmandu. The company has trained more than 650 local female workers and is producing fake hair and exporting all the products to Korea and Japan.

According to the official statistics of the recently published foreign investment plan report of the Nepal government, from July of last year to March of this year, Korean companies have made the most investment plans in Nepal. During that period, an investment plan of 12.8 billion rupees has been announced on behalf of Korean investors. Among the foreign investment countries in Nepal, Korea has been in the top five places of investment. The interest of Korean companies to invest in Nepal can be taken as a basis for the continuous increase.

At the end of

Diplomatic relations were established between Korea and Nepal in 1974 and the relationship between the two countries has been very harmonious. By sharing our development experience, we are also aware that Nepal should not suffer the difficult situation experienced by Korea. Understanding the importance of employment, we have been providing employment opportunities to Nepali workers in Korea with the participation of the government by signing a labor agreement between the governments of the two countries in 2007.

More than one lakh Nepalis have experienced employment in Korea. Similarly, I would like to remind you that Korean companies are increasing their investment in Nepal. Thousands of Nepalis have got job opportunities in Korean investment companies operating in Nepal. This year in 2024, we have taken advantage of the golden opportunity of the 50th anniversary of the establishment of diplomatic relations between the two countries, and we have set a goal to further enhance our relations by organizing various programs throughout the year. The Korean government and our embassy are making continuous efforts to attract more Korean investment.

We are aware that the Nepalese government is making tireless efforts to create an investment-friendly environment to attract foreign investment. I would like to ask companies from all over the world to re-evaluate the potential investment areas in Nepal by creating an investment-friendly environment suitable for all sectors and to invest in a large amount and provide employment opportunities to Nepalis in their own country. Wishing success for the third investment conference which is going to be held at the end of April, I am confident that many achievements will be achieved.

(Theang is the South Korean Ambassador to Nepal)