Tashkent, Uzbekistan (UzDaily.com) -- Experts from the Institute for Forecasting and Macroeconomic Research (IPMI) studied the experience of South Korea in attracting foreign direct investment.

In the early stages of its development, most of the capital and technology invested in Korea’s economic development was introduced through borrowing and licensing rather than through direct investment. Back then, commercial and government borrowing accounted for more than 80% of total foreign capital inflows until 1980.

This trend continued into the 1990s. Recognizing the need to attract FDI to high-tech industries, in the second half of the 1980s, South Korea began to develop an appropriate policy. The active phase of its implementation began in the 1990s.

The policy measures taken included:

- tax incentives for direct investment in high-tech industries;

- simplification of investment procedures since 1992;

- liberalization of FDI and the implementation of the corresponding five-year plan, starting from 1993.

The reform program covered 4 main areas:

- financial sector;

- corporate sector;

- government sector;

- labor market.

Based on the experience of South Korea, the following conclusions can be drawn:

- reforms should be phased, depending on the conditions of development and global changes, since there are no universal rules for economic success;

- a key indicator of the effectiveness of the FDI attraction policy is the growth in export volumes, which shows a parallel increase in the competitiveness of products in the global market;

- the policy of attracting FDI should be targeted and offer good conditions mainly for industries that are priority for the host country;

- tax holidays and other types of incentives can be declared mainly for high-intensity business related to technology, research and development business and companies operating in foreign economic zones.

- Improving the investment environment should include the elimination of any difficulties not only in the field of labor, taxation, finance, foreign exchange and administrative services, but also in the field of education, housing, medical care, transport, the process of entry and exit and culture.