The value of investment by Korean multinationals dramatically rose from less than USD 100 million in 1985 to USD 19.4 billion in 2009, albeit decreasing somewhat in 2009 due to the worldwide economic downturn. Accordingly, the potential domestic impact of the rapid increase in overseas activities by Korean multinational enterprises has been a source of widespread public concern and a hotly debated issue. On one hand, FDI outflows generate fears that such investment displaces domestic employment and capital investment, resulting in reduced productivity－in other words, a hollowing-out effect. On the other hand, alternative perspectives suggest that growth in FDI abroad may increase levels of domestic activity by boosting productivity through offshoring of tasks losing competitiveness at home. Despite the economic and political debates on the effects of outward FDI, it is difficult to find rigorous empirical works of research that explore the performances of Korean multinationals in their overseas activities.
Motivated by this lack of evidence on domestic economic effects of Korean FDI abroad, this report aims to assess the performances of Korea’s outward FDI and draw policy implications. Using industry-level data from the NSO (National Statistical Offices), the effect of FDI by Korean MNEs on domestic productivity, trade and employment are examined. To better understand the mechanism behind the impact of FDI abroad on each economic indicator, we further estimate the size of the impact on production and employment by sector using the Korean Input-Output Table.
The main finding of this report suggests that a 1% increase in FDI abroad can raise industry productivity by 0.004~0.009%. The outflow of investment by Korean multinationals may negatively affect employment in the first year of investment, but this effect dissipates over time. The impact can differ across skill intensities. The employment of unskilled labor can decrease in the short term, but the statistical significance disappears in the long run. As for skilled labor, employment increases in the long run. An empirical study on FDI-trade nexus finds that foreign activities by Korean MNEs can increase both exports and imports. A 1% increase in outward FDI can raise exports by 0.07~0.08% and imports by 0.187~0.192% respectively. An analysis using input-output table further shows that the net effect of FDI on domestic production and employment can be significantly positive because the complementarity between FDI and trade outweighs the crowding out effects of FDI outflows on domestic capital.
The conclusion that can be drawn from the results of this report is that in the short run, outward FDI by Korean firms can lower production and employment through relocation of production sites. In the long run, however, structural adjustment via reduction in low value added work, specialization, and increase in trade volume can jointly contribute to facilitating productivity and expanding demand for skilled labor.
Based on the results, this report may allow firms to gain useful information in establishing strategic objectives regarding FDI outflows on one hand, and suggest important policy variables for policy makers to consider on the other.

This study aims to develop policy implications with focus on the development of the Korean green industry and its expansion into the Central America. In other words, it makes policy suggestions for improvement of the Korean green growth model and its application to Central America’s green industries. For more effective policy suggestions, this study brings out the valid concept of green industry based on a comparison of industrial categories in Korea and the Central America.
Considering the particulars of the Central American situation and its green industry development, the best concept of a ‘green industry’ categorized here (adopted with three industrial areas as a common denominator) are: environmental industry, renewable energy industry and energy efficiency industry. In addition, this study provides basic information on the general environment of the green industry in Central America; examines various environmental issues and environmental situations relating to water, air, land, forest and the ecosystem as a whole; and will also include environmental law, institution and programs at the level of the Central American Community (e.g. SICA) and each individual country. Based on these backgrounds, this study moves into earnest analysis of the actual situation inthe environmental industry, and its development in Central America and its 8 constituent countries. At the level of the regional community, the green industry in Central America has developed in water, basic sanitation, wastewater treatment and its management, which are urgently needed in individual countries as well.
In particular, many individual countries face problems with supply of drinking water, the lack of basic sanitation infrastructure, insufficient waste treatment facilities, recycling waste matter, air contamination, etc. even though the state has taken up many of the responsibilities of environmental industries except waste treatment and recycling. Many Central American countries have not provided proper environmental services given their small government budgets and intermittent economic instability. The distribution rate and the level of technology in such areas as sewage treatment and basic sanitation service are very low, that is the quality of service provided is poor and the system is not well-organized in its operation.
For example, Guatemala, Honduras and Nicaragua are very poor cases; particularly concerning basic environmental infrastructure. Thus more investment in this field is vitally necessary. Most Central American countries provide electricity with thermal power generation and use firewood in individual houses, thus emitting much CO2 into the atmosphere and contaminate the air. Due to much volcanic activity in this region, air contamination is increased further. It is expected that equipment or technology for air-pollution prevention is urgently necessary in this region. This makes it clear that Central American region has the highest potential for growth in the environmental industry and its markets. The case study of the renewable energy sector also shows great potential for cooperation.
Central America has a tropical climate, plenty of rainfall, abundant plant biomass, lots of sunshine and an active volcanic environment, which could give it another source of energy in the form of geothermal power. This region is also an ideal location for wind power generation, meaning the region has massive potential for development of renewable energy. Even though there is great abundance of natural resources, the rate of energy consumption in this region has increased an average 5.2% in the past decade and the region is experiencing power shortages. To resolve this problem, Central American summit meeting announced the 'Sustainable Central American Energy Strategy 2020' in 2007. This strategy aims to stabilize the system for producing energy through energy resource diversification, giving more consideration to the sustainable development model, involving a balance between the environment, economic growth and social equality. To achieve this aim, dependence on fossil fuel must be reduced and use of renewable energy increased, development of energy efficiency should be promoted, meaning energy saving is the most important strategy for this region.
In addition, power demand in the Central American region is expected to increase by about 5.1%-6.1%, keeping pace with the region's economic growth. Many individual countries in this region have considered renewable energy sources as well as alternative ones including hydroelectric generation, geothermal power, biomass, and wind power. Although the strategies and contents are different depending on the individual countries, most of them are strongly pushing forward strategies for renewable energy for supplying their power needs. Panama and Costa Rica and Guatemala have optimum conditions for future construction of hydroelectric power plants. El Salvador also has interest in developing hydroelectric power. Honduras and Nicaragua, on the other hand, have much interest in wind-power plants. In order to support these industries, many countries have institutionalized various economic incentives.
Central America has been characterized as underdeveloped in terms of its energy industry, thus they have great potential as an energy market, especially in the energy-efficiency sector. Confronted with high oil prices and problems related to climate change, the region has employed new energy strategies that attempted to do more than just react but actually increase the supply of renewable energy. Developing these sectors entails a high level of technology and much investment, but if other countries are willing to engage in cooperation, the focus on energy efficiency as a strategy for energy saving as appears to be the best option. For removal of political, financial and technological barriers, this region has come up with many measures by providing strategies and methods for rational energy usage, as embodied in the term ‘energy efficiency’.
The possibility of green industry in Korea and expansion toward this region depend on making active use of the current 'Central American Opportunity'. Cases of foreign advancement into the region, investigated throughout the last chapter, provide some good examples and increases Korea’s chance for entering the Central American green industry market. Though already researched deeply and extensively through SWOT analysis, policy suggestions and action plans for entering Central America and expanding Korea’s green industry into this region must consider many aspects including institutional, financial, technical and most of all the 'environmental', in its new agenda for international cooperation. Therefore, it must be handled in a gradual manner, towards real cooperation and business partnership.

The report focuses on how Korea should approach the ICT industry in Central America including Guatemala, Honduras, El Salvador, Belize, Nicaragua, Panama, Costa Rica, and the Dominican Republic, which are the members of the Central American Integration System (SICA). Central America's economic scale is relatively small relative to the world economy. However, it is a vital connecting point geographically between the North and South America. In the past, trade between Korea and the Central American countries were limited to the sewing industry and common trades. Today, trade relations in the ICT industry between Korea and the Central American countries have increased significantly.
Overall, various indices indicate that the scale of the digital economy in Central America is smaller than that of South America and other regions. Countries there have been moving toward digitization of their economies in order to compete, even though their indigenous ICT industry is in infancy and they are not yet ready to launch their own ICT development programs. Central American countries are trying to implement ICT in all sectors of the economy and society through cooperative projects with developed countries and international organizations.
Korean President Lee Myung-Bak, on his visit to Panama in July 2010, created additional opportunities for Korean companies and contributed to building a new paradigm for the cooperation between Korea and the Central American countries. Through bilateral talks with Central American leaders on cooperation in economy and trade, President Lee emphasized that investment from Korean companies in ICT and infrastructure will contribute to economic development in Central America. In addition, he proposed that Korea is willing to take part in the Central American Economic Integration Bank (CABEI) as an offshore observer and develop relationships with Central American countries as Germany and Japan did. Thus, plans for the next stage involve outlining levels and a wide range of cooperation and partnership as well as membership requirements, conditions of cooperation, followed by efforts to diversify that cooperation.
Currently, one of the biggest challenges that the Central American countries face is finding suitable approaches for implementing appropriate digital technologies in areas of education, health and hygiene, environment, tourism, agriculture, culture preservation, and small and medium businesses. In particular, implementing digital technologies in education is a challenge, but the above countries are fortunate in this respect, as illiteracy rates are low. Thus, the expansion of telecommunications infrastructure will be a top priority.
In spite of the economic crisis in 1987, Korea has grown successfully into one of the world's ICT powerhouses and the promotion of venture business was a key factor in its success. Especially, success stories in on-line education, health care service, green/environment, rural tourism, digital contents development, and supporting small and medium size companies can be utilized in setting of strategic goals by the Central American countries.
Recently, efforts to penetrate the ICT market in Central American countries by developed countries have increased. Korea, as one of the world’s ICT powerhouses, must find effective ways to magnify the benefits for both sides based on their respective policies for the ICT industry.
This report is divided into five chapters. Chapter 1 describes the background and the motivation behind the research and the research methodology employed. Chapter 2 explains a variety of ICT indices collected from various international organizations including those for H/W, S/W, communications, Internet, and information technology. The indices were used to measure the current status of the ICT industry of the Central American countries. Chapter 3 shows their strategies for implementing ICT: why telecommunications was selected as a primary target sector; impact on employment and the impact small/medium size companies have on the national digital economy. It also includes suggestions for Korea to increase the level of cooperation in the future by examining the characteristics of ICT policies of Central American countries. Chapter 4 compares the level of cooperation between Korea and international organizations in Central America's ICT industry. The level of cooperation between Korea and the Central American countries by sectors was closely scrutinized. Based on the study on both international organizations and Central American countries, it proposes directions for Korea on future cooperation. Finally, Chapter 5 is an assessment of proposed directions of Korea vis-à-vis Central American's ICT industry. In this section, three steps for cooperation were identified: development of cooperation plans based on ICT policy devices in Central America, cooperation mechanisms based on best practices or success stories from Korea, and creation of projects through international organizations to support the development of ICT in Central America.
Currently the Central American countries are moving toward a digital network economy. However, due to outstanding issues such as informatization of the government, unequal benefits of digitization, poor health and hygiene levels, unemployment, insignificant economic growth, low productivity, etc. the countries do not have sufficient resources to focus on digitization alone. In the past, the countries tried to implement ICT based on an understanding that there was no direct relationship between ICT and economic growth. Nowadays, the countries are preparing for the digital era by looking into the relationship of the two factors more closely than ever. They understood clearly that such transition will affect the economy and society of their countries in various ways - positive economic growth, poverty reduction, transparency in transactions; access to digital services, more competitive small and medium businesses, job creation, more robust cultural identity, and enhanced communication.
In order to achieve these goals, the critical challenges for the countries involved are: establishing cooperative systems between the private and public sector; providing integrated policies with respect to the government's vision, set up education programs and technical schools, measure the impact of ICT implementation on the economy; improvement of social acceptance of informatization; enforcement of government-driven policies; promoting spillover effect; introduce ICT to build up the competitiveness of small and medium companies which will be the basis of their economy. In connection with central government policies, the respective governments should gradually enforce adoption of the informatization strategy at the local government level
According to the indices, overall level of informatization of the Central American countries is low. The study shows no consistency in the data categories. Implementation by country, region, business size, and even annual income were particularly inconsistent. Therefore it is important for Korea to find appropriate weights for the categories when Korea decides to enter the ICT market and expand cooperation with the ICT industry in Central America.
Based on the study of ICT policies and strategies of Central American countries, the countries can potentially become good partners for Korea in ICT, and target areas that Korea might want to penetrate are as follows: e-Government; ICT in education, health and sanitation; rural informatization; IT industry clustering and informatization of provincial governments. Even though the e-Government index and other economic indicators show a lack of financial stability for independent establishment and operation of communications infrastructure and e-Governments, the countries are evidently quite willing to reach digital society through international loans or cooperation with foreign governments. Along with continued monitoring of their plans for informatization, Korea should select a strategy that focuses on e-Government projects, reducing the digital gaps between the private and public sectors, IT education and training, e-Learning, etc.
Korea must compete with countries such as the United States, Europe, India, and Malaysia who already have established prior presence in Central America. Under the circumstances, Korea is advised to develop creative partnerships that allow Koreans to apply their competitive experiences locally. In order to achieve this goal, it is necessary to establish and operate a cooperative system of ICT experts and regional specialists who understand the culture, history, and language of Central America. Because business entities should be principal actors, it is important for them to understand the processes of cooperative projects based on Green IT which have been organized by international organizations for development in Central America. Business entities should create an ICT market and demonstrate complete understanding of that market in Central America.

  The Central American region has not been blessed with a good economic environment: with inferior conditions, narrow territories, poor natural resources, underdeveloped economies, low income, and small consumption markets etc., compared to South America or Mexico. But, the region is not without some favorable conditions for promoting economic development by attracting foreign investment: a geo-economic location near the huge North American market, its position as a bridge between markets in North and South America, along with plentiful yet relatively low-wage labor forces. With these economic conditions, Central America has attracted some attention from foreign investors in the 1980s as a favorable processing base for re-export to North America and the EU.
Korea has maintained an interest in Central America since the Cold War era in order to secure diplomatic support of Central American countries in the UN, as Korea had to compete diplomatically with North Korea on matters pertaining to the Korean peninsula. But in the 1990s, a general transformation of socialist economies to capitalism market economy occurred in many parts of the world with the end of the Cold War and the fall of communism in the Eastern Europe and the USSR. Korea adjusted its focus on Central America from diplomatic to economic, as an overseas processing base to promote re-export for small and medium size enterprises which were losing their cost competitiveness owing to rapid rise of wage-levels in Korea. Central America maintained its value for Korea, but it was no longer political; the value now stemmed from their mutual economic partnership.
Central America, for its part, has maintained political stability with the exception of the coup d'etat in Honduras that occurred in June of 2008. Domestic economies in the region recovered from the economic recession and grew steadily based on increased export and overseas family remittances. The region also has strengthened economic relationships to promote an environment favorable to exports through the expansion of FTA agreements with other economic regions, concluding not only the CAFTA-DR with the United States but also with the EU.
These efforts to maintain stability both politically and economically contribute to improvements that lead to FDI attractiveness. But, according to a direct field survey on FDI environments, they have some terms and conditions that foreign investors (including Korean entrepreneurs) have to consider and examine cautiously as they plan to invest in the Central American region including the Dominican Republic.

 The Central American region has not been blessed with a good economic environment: with inferior conditions, narrow territories, poor natural resources, underdeveloped economies, low income, and small consumption markets etc., compared to South America or Mexico. But, the region is not without some favorable conditions for promoting economic development by attracting foreign investment: a geo-economic location near the huge North American market, its position as a bridge between markets in North and South America, along with plentiful yet relatively low-wage labor forces. With these economic conditions, Central America has attracted some attention from foreign investors in the 1980s as a favorable processing base for re-export to North America and the EU.
Korea has maintained an interest in Central America since the Cold War era in order to secure diplomatic support of Central American countries in the UN, as Korea had to compete diplomatically with North Korea on matters pertaining to the Korean peninsula. But in the 1990s, a general transformation of socialist economies to capitalism market economy occurred in many parts of the world with the end of the Cold War and the fall of communism in the Eastern Europe and the USSR. Korea adjusted its focus on Central America from diplomatic to economic, as an overseas processing base to promote re-export for small and medium size enterprises which were losing their cost competitiveness owing to rapid rise of wage-levels in Korea. Central America maintained its value for Korea, but it was no longer political; the value now stemmed from their mutual economic partnership.
Central America, for its part, has maintained political stability with the exception of the coup d'etat in Honduras that occurred in June of 2008. Domestic economies in the region recovered from the economic recession and grew steadily based on increased export and overseas family remittances. The region also has strengthened economic relationships to promote an environment favorable to exports through the expansion of FTA agreements with other economic regions, concluding not only the CAFTA-DR with the United States but also with the EU.
These efforts to maintain stability both politically and economically contribute to improvements that lead to FDI attractiveness. But, according to a direct field survey on FDI environments, they have some terms and conditions that foreign investors (including Korean entrepreneurs) have to consider and examine cautiously as they plan to invest in the Central American region including the Dominican Republic.

Since 2004, all over the world has been focusing on continuous high economic growth and rising international status of India. Along with international trend, Korea is also keeping up studies on India and its changes. But as most of studies are tried to cover the whole India, there has been limitations to understand Indian regional market more practically and specifically. Actually, India has too various languages, religions, and tribes to consider as one country. In order to provide more practical information for Korean companies and government that are interested in Indian market, it is necessary to collect and analyze region-wise and state-wise information.
The purpose of this study is to provide assessments on investment environments as well as basic information of Indian regional market. For the first step, we divided India into four parts; East, West, South, and North. And then, advanced market research for major states and basic market research for minor states was conducted according to four parts.
The study is comprised of Basic Investment Environments, Manufacturing & Market Environments, and Political & Economical Openness for each state. And analysis on risk factors and assignments of four parts were conducted based on above market research, and assessments and implications of the study are provided on the last part of each report. For this study, first of all, we collected and classified region-wise and state-wise information. Second, field researches for manufacturing environments and market environments were conducted for major 13 states. Last, in order to understand political environments and risk factors, we gathered opinions from Indian experts and Korean companies in India through interviews and meetings.
This report is a study on Western Part which includes Gujarat, Maharashtra, and Goa. States on the Western Part are major driving force of Indian Economy. Especially Gujarat and Maharashtra are major industrialized states in India and take half of Indian manufacturing industry.
In terms of economy scales, Maharashtra is the largest economy in India with 13.3% of Indian GDP. The FDI inflows into Maharashtra is about USD 14 billion from 1999 to 2007 and it is almost 20% of whole FDI inflows in India. Gujarat is newly industrializing state and very active to attract foreign investment.
In terms of manufacturing environments, Maharashtra and Gujarat are developing the largest number of industrial parks in India. Most of industrial parks in this region are equipped with the best level infrastructures in India and have good accessibility to other regions. As those industrial parks play important role in state export and economy, other states also started to develop industrial parks.
In terms of market environments, income and consumption level of people in western India are higher than other region. Per capita income of Goa is the highest level in India, and it is almost 3 times higher than Indian average.
However, there are also some risk factors in Maharashtra and Gujarat. For Maharashtra, lack of industrial sites near Mumbai and slow treatment of legal claim could be a problem. And For Gujarat, companies should keep in mind religious conflicts and labor disputes in the state.

Since 2004, all over the world has been focusing on continuous high economic growth and rising international status of India. Along with international trend, Korea is also keeping up studies regarding India and its changes. But as most of studies are tried to cover the whole India, there has been limitations to understand Indian regional market more practically and specifically. Actually, India has too various languages, religions, and tribes to consider as one country. In order to provide more practical information for Korean companies and government that are interested in Indian market, it is necessary to collect and analyze region-wise and state-wise information.
The purpose of this study is to provide assessments on investment environments as well as basic information of Indian regional market. For the first step, we divided India into four parts East, West, South, and North. And then, advanced market research for major states and basic market research for minor states was conducted according to four parts.
The study is comprised of Basic Investment Environments, Manufacturing & Market Environments, and Political & Economical Openness for each state. And analysis on risk factors and assignments of four parts were conducted based on above market research, and assessments and implications of the study are provided on the last part of each report. For this study, first of all, we collected and classified region-wise and state-wise information. Second, field researches for manufacturing environments and market environments were conducted for major 13 states. Last, in order to understand political environments and risk factors, we gathered opinions from Indian experts and Korean companies in India through interviews and meetings.
This report is a study on Northern Part which includes Haryana, Uttar Pradesh, Rajasthan, Punjab, Uttarakhand, Jammu & Kashmir, Himachal Pradesh, and Madhya Pradesh. And NCR (National Capital Region) is also included in this region. This region is known to us with the richest state in India; Punjab and increasing numbers of industrial parks in Rajasthan.
In economic size, Uttar Pradesh has the largest economy among 8 northern states with 8% share of Indian GDP. And following Haryana and Rajasthan, the economic size of Madhya Pradesh was relatively larger than other northern states with 3.1% share of Indian GDP. In economic growth, Haryana showed the highest economic growth rate, 8.6%, in this region during last 5 years (2004~2008).
In terms of manufacturing environments, it is difficult to get industrial site near NCR because of lack of empty space and high land price. However, a lot of industrial parks are developing along with NH-8 which connects Delhi to Rajasthan. As the development of DMIC (Delhi-Mumbai Industrial Corridor), this area would play important role in future industrial and economic development in India.
Northern states are regarded as favorable investment market with good infrastructure, positive attitude of state government to foreign investment, abundant of high-skilled labor, and low tax rate.

Since 2004, all over the world has been focusing on continuous high economic growth and rising international status of India. Along with international trend, Korea is also keeping up studies regarding India and its changes. But as most of studies are tried to cover the whole India, there has been limitations to understand Indian regional market more practically and specifically. Actually, India has too various languages, religions, and tribes to consider as one country. In order to provide more practical information for Korean companies and government that are interested in Indian market, it is necessary to collect and analyze region-wise and state-wise information.
The purpose of this study is to provide assessments on investment environments as well as basic information of Indian regional market. For the first step, we divided India into four parts East, West, South, and North. And then, advanced market research for major states and basic market research for minor states was conducted according to four parts.
The study is comprised of Basic Investment Environments, Manufacturing & Market Environments, and Political & Economical Openness for each state. And analysis on risk factors and assignments of four parts were conducted based on above market research, and assessments and implications of the study are provided on the last part of each report. For this study, first of all, we collected and classified region-wise and state-wise information. Second, field researches for manufacturing environments and market environments were conducted for major 13 states. Last, in order to understand political environments and risk factors, we gathered opinions from Indian experts and Korean companies in India through interviews and meetings.
This report is a study on Eastern Part which includes West Bengal, Orissa, Chhattisgarh, Bihar, and Jharkhand. Eastern states are not very familiar with us, except Kolkata which had been the capital of India under the control of the British, and a project by POSCO in Orissa.
Eastern states are relatively behind in various aspects including economic development. West Bengal is the 4th largest economy in India which takes almost 11% of Indian GDP. But the state is backward stepping in terms of its economy, because of the political conflicts with local communist party in power. Besides West Bengal, other states have small economy and each of them take just 2~3% of Indian GDP. And the level of industrial development in this region is very low, and states have a few of industrial parks with poor infrastructure system. However, Chhattisgarh and Bihar is currently experiencing rapid economic growth with its abundant natural resources.
It is recommended to consider various risk factors to invest to eastern region, such as dangers form Naxalite, political conflicts, lack of infrastructure including industrial parks, and unfavorable attitude of state governments to foreign companies.

 Since 2004, all over the world has been focusing on continuous high economic growth and rising international status of India. Along with international trend, Korea is also keeping up studies regarding India and its changes. But as most of studies are tried to cover the whole India, there has been limitations to understand Indian regional market more practically and specifically. Actually, India has too various languages, religions, and tribes to consider as one country. In order to provide more practical information for Korean companies and government that are interested in Indian market, it is necessary to collect and analyze region-wise and state-wise information.
The purpose of this study is to provide assessments on investment environments as well as basic information of Indian regional market. For the first step, we divided India into four parts East, West, South, and North. And then, advanced market research for major states and basic market research for minor states was conducted according to four parts.
The study is comprised of Basic Investment Environments, Manufacturing & Market Environments, and Political & Economical Openness for each state. And analysis on risk factors and assignments of four parts were conducted based on above market research, and assessments and implications of the study are provided on the last part of each report. For this study, first of all, we collected and classified region-wise and state-wise information. Second, field researches for manufacturing environments and market environments were conducted for major 13 states. Last, in order to understand political environments and risk factors, we gathered opinions from Indian experts and Korean companies in India through interviews and meetings.
This report is a study on Southern Part which includes Tamil Nadu, Karnataka, Kerala, Andhra Pradesh. Southern states are relatively familiar with us, since it covers Chennai in Tamil Nadu and Bangalore in Karnataka which are famous investment regions of Korean companies. Especially, Tamil Nadu is the most attractive destination of Korean company and already a lot of Korean companies are operating in this region.
In economic terms, Karnataka and Tamil Nadu play leading role in southern Indian economy. Each of two states takes 8% of Indian GDP and have higher economic growth rate than Indian average. And the amounts of FDI inflow into both states are also similarly higher than Indian average. Kerala is little bit behind in economic development, but it has high potential with excellent human resource.
In terms of manufacturing environments, Tamil Nadu is the most industrialized state in the southern India and manufacturing industry of Tamil Nadu takes 9% of total output from whole Indian Manufacturing industry. In Karnataka, the tertiary industry with IT industry in Bangalore became one of the main pillars of Indian economy. Kerala government takes effort to differentiate the state with media and entertainment industry, furthermore developing video entertainment industrial complexes.
In market environments, southern states show relatively high consumption propensity than other region. Especially, the monthly per capita consumer expenditure of Kerala urban as well as rural people is the highest level in India.
Southern states have relatively favorable investment environments with abundant labor resource and evenly developed industries than other regions. And state governments are active to attract investments. However, risk factors to enter into southern Indian market still exist. Generally, southern India is politically unstable; especially Tamil Nadu shows regional political behavior and conflicts with central government. Andhra Pradesh has abundant natural resource, but it is the main activity area of Naxalite.

This paper analyses China’s aid policy and strategy, and studies its aid implementation in practice with focus on organizational structure, aid modality as well as the volume of its assistance. To better understand the characteristics of Chinese aid, this paper first reviews the evolution of China’s position as a donor and recipient over the past 60 years and then explores the ‘Beijing Consensus’ in comparison to the ‘Washington Consensus’ as a new development paradigm.
The growing trend is that emerging donors from the developing world have stronger influence in international aid architecture more than ever with its increasing volume of assistance and the unconventional way of aid delivery. China, as one of the world’s fastest growing economies, is exercising its soft power as a diplomatic tactic and economic tool to secure natural resources overseas and export markets in developing countries. The fundamental direction of Chinese aid policy is based on national value of mutual benefits, non-interference, no conditionality and self-help development that have been sustained since the 1960s. The current form of Chinese aid relying strongly on preferential loans combined with economic cooperation package originated in 1994 when the Chinese Exim bank was established.
It should be carefully examined that the perception towards Chinese aid is polarized among traditional donor societies. On the positive side, China contributes to the overall volume of global aid and fills the serious financial gap in developing countries. The Chinese aid model is also interpreted as an alternative development paradigm with an emphasis on the government’s role in introducing the market economy. Yet there are opinions in opposition, expressing concerns over non-conformity of China’s independent aid practices with international guidelines set and agreed by OECD DAC donors. The most common criticism is around its non-conditionality and the high proportion of tied loans.
As Korea is poised to strengthen cooperation with other emerging donors and diversify its aid modality though South-South Cooperation and Triangular Cooperation, it is important to have a balanced perspective on Chinese aid and search for effective strategies to work with China. This paper suggests in its conclusion the possibility of joint projects and sharing of development experience in Asia and Africa region.