ABSTRACT
In 1962 the Republic of Korea promulgated its first economic development plan projecting rapid economic growth. Foreign funds were to be utilised primarily for the acquisition of capital goods and advanced technology not locally available, rather than as equity. Tax privileges under the Foreign Capital Inducement Act and other tax laws were granted. Income and corporation taxes on enterprises with foreign capital were exempt, or were reduced in proportion to the percentage of the total equity which foreign investors held. Creating a hospitable environment for the development of the heavy and chemical industries involved the Korean government in substantial investment in supporting facilities. The demand for foreign technology in Korea may reflect a lack of confidence in domestic capacity for research and development. Korea has chosen the petrochemical industry as one of the major industries in the promotion of its industrialisation.
