[Asia Exclusive] Thanks to 'K-Quarantine'... "Overseas Investors' Views on Korea Have Changed"

Interview with Jang Sang-hyun, CEO of Invest Korea
"South Korea's Global Status Has Changed Since COVID-19"
Korea Discount Is a Thing of the Past, Now It's 'Korea Premium'
Despite a 40% Global FDI Decline Forecast, South Korea's FDI Performs Well

[Interview = Asia Economy Lee Eun-jung, Head of Industry Department, Summary = Woo Su-yeon Reporter] "Since the outbreak of the novel coronavirus infection (COVID-19), I feel that overseas investors' perspectives on the Republic of Korea have changed. In the global market, the talk is no longer about the 'Korea Discount' but about the 'Korea Premium.' COVID-19 has become an opportunity to reevaluate Korea's social systems, crisis response capabilities, and civic consciousness."

On the 7th, at the KOTRA headquarters in Yangjae-dong, Seoul, the voice of Jang Sang-hyun, CEO of Invest Korea, was filled with confidence. Invest Korea (hereinafter IK) is a national investment promotion agency established within KOTRA to attract foreign direct investment (FDI). CEO Jang, who communicates directly with overseas investors, shared recent changes, saying that Korea is being reevaluated abroad after COVID-19.

Since his inauguration in September 2018, global adversities such as the US-China trade dispute, Brexit (the UK's withdrawal from the EU), and Japanese export restrictions have consecutively hindered investment attraction. However, last year, Korea's FDI performance ranked second all-time with $22.3 billion, achieving $20 billion for five consecutive years. CEO Jang, who promised to "show results," traveled tirelessly worldwide to contribute to achieving national goals. Last year, he was elected as a director for the East Asia and Southeast Asia region at the World Association of Investment Promotion Agencies (WAIPA) General Assembly in Warsaw, Poland, expanding his activities at the international organization level.

The atmosphere was not bad until early this year. However, from February, as the COVID-19 issue expanded, investment reviews and executions were temporarily suspended worldwide, including Korea. With business trips to meet overseas investors blocked, he said he briefly experienced 'mental breakdown.' Soon, together with his staff, he devised ways to attract investment through 'non-face-to-face (untact)' methods such as online video conferences and video production, and plans to strengthen untact methods in the second half of the year to continue exchanges with overseas investors.

Jang Sang-hyun, CEO of Invest Korea. / Photo by Hyunmin Kim kimhyun81@

- COVID-19 must have dealt a direct blow to global FDI. How was the atmosphere in the first half of this year?

▲ Until last year, Korea's FDI performance recorded $20 billion for five consecutive years, creating a very positive atmosphere. We were gaining momentum from this year, thinking, 'Let's do it properly,' when the COVID-19 outbreak occurred. Global FDI is expected to decrease by about 40%. Korea's FDI in the first half will also decrease, but compared to global FDI, the decline will be limited.

- Attracting overseas investment during the COVID-19 era must be very challenging. How are you overcoming these difficulties?

▲ It was really tough. Since my business trip to the US in January this year, I have not been able to travel abroad even once. Overseas, everyone was suspending work and staying home. I maintained communication with investors I personally know through frequent calls and online video conferences. We supported projects initiated last year until the end to ensure results.

It is fortunate that Korea is showing a rapid recovery after COVID-19. While the US is in a complete shutdown state, Korea's sites are operating without pause. Emphasizing this helped secure investments. We are striving to make the entire investment process non-face-to-face by sharing actual photos of development project sites using drones and producing online pitching promotional videos of domestic startups to distribute to overseas investors.

Jang Sang-hyun, CEO of Invest Korea. / Photo by Hyunmin Kim kimhyun81@

- Until recently, the financial market talked about the 'Korea Discount.' Can we now say that a 'Korea Premium' has emerged?

▲ In the past, the Korea Discount certainly existed due to inter-Korean relations, labor market rigidity, and corporate governance issues. However, the COVID-19 crisis has led foreign media to highlight Korea's high-level medical system, rapid diagnosis and quarantine, and mature civic consciousness, significantly changing Korea's standing. Especially, the safely conducted election in April amid the COVID-19 outbreak with the highest voter turnout in history impressed overseas investors with Korea's systemic stability. Also, as Korea's core industry, manufacturing, confirmed its role as a safe supply base, Korea's status in the global value chain (GVC) is expected to rise.

- What is the most memorable investment attraction case since your inauguration?

▲ Last year, supply stability in the core materials, parts, and equipment (SoBuJang) sector became a key issue due to Japan's export restrictions. To attract investment in this sector, we started a process with the government: strategy formulation → targeting investment candidates → investment attraction activities. Within five months, we attracted a developer and producer of 'photoresist for extreme ultraviolet (EUV),' a core item restricted by Japan, to Korea. Global chemical company DuPont promised to invest $28 million in Korea and build an EUV photoresist production facility in Cheonan, Chungnam. They could have chosen to expand in the US or Taiwan, but ultimately selected Korea, which is immensely gratifying. This case is significant as it domesticates semiconductor core materials that were entirely dependent on Japanese imports and diversifies supply sources.

- It has already been almost two years since your inauguration. How do you reflect on the past two years?

▲ First, I felt a strong sense of responsibility to perform well. The national goals themselves were not small, and in trying to achieve them, I pushed myself a lot. I think my IK colleagues who worked with me also had a hard time. I believe the good results until last year are thanks to the relentless efforts of my IK colleagues. In terms of work, we took various countermeasures at the IK level in response to Japan's export restrictions last year, and seeing tangible results now is gratifying. I also want to emphasize the great significance of continuous consultations with related organizations such as the Ministry of Trade, Industry and Energy, local governments, and Free Economic Zones (FEZ), which allowed us to share information and strengthen cooperation systems to understand what investors truly need.

- What are your future goals?

▲ In the first half of this year, I spent a lot of time contemplating the direction of foreign investment attraction in response to COVID-19. It seems necessary to deeply consider how to integrate various trending keywords such as digital transformation, untact, and changes in the global value chain into 'foreign investment attraction.' Personally, COVID-19 made me realize the importance of ordinary daily life. Spending intimate time and communicating with family and colleagues is also one of my important goals.