I have the SAME EXACT problem, it's so frustrating. I've heard though that you need to get links from countries that are hosted in the country where you're trying to rank. That's what I've started doing now but it's a little difficult.
The links have nothing to do width that, or have less to do.
The way you rank is analyzed by your kw. If you target a specific country then the best way is to use kw in that country language and build link with that kw/kws.
Also the age of the domain is important so nothing strange if you can get more then #3 if in the first 2 position are website that are older then yours.
In serps also the visitors are important so G will look up for how many people are coming from that country and if many visitor of that country will click on you the it will start to rise in serps when other search for that kw.
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