ΆΓ  Foreign investment fell sharply in November

Korea Herald 2000.12.07

According to figures compiled by the Ministry of Commerce, Industry and Energy, reported foreign investments amounted to $1.54 billion last month, 50.5 percent down from the same period last year.

Consequently, the accumulated foreign investment from January through November of this year grew only 2.6 percent to total $13.71 billion from the same period of last year.

Officials predicted that it would be hard for the nation to achieve this year's foreign investment target of $16 billion.

Funds from major investors such as the United States and Europe, sharply decreased to be $2.17 billion and $4.02 billion respectively during the Jan.-Nov. period, down 38 percent and 30 percent from the same period last year.

On the other hand, Japanese investments grew a whopping 47.3 percent to total $2.02 billion while those from such tax havens as the Cayman Islands, the Virgin Islands, and Bermuda came to $5.48 billion, up 101 percent year-on-year.

However, the ministry reported, the number of FDI cases was up 60.9 percent in November to stand at 341. Between January and November, 3,800 cases of FDI were reported, up 109 percent from 1,810 cases during the same period last year.

By business category, investment in manufacturing companies rose 0.8 percent to be worth $6.4 billion and those in service businesses increased 5.1 percent to be $7.2 billion.

Nearly 90 percent of foreign investors made investments through such means as establishing new corporations, participating in capital increases and acquiring new shares.

Officials said that the FDI in November seems to be quite insignificant because it is compared with that of the same period of last year, when the nation's corporations were all out to attract foreign capital to meet the debt-to-equity ratio of 200 percent and recorded an all-time high monthly FDI of $3.1 billion.

The FDI figure was also pressured by labor disputes and delayed corporate and financial restructuring last month, they said.

"To achieve the target of FDI this year, it is essential for the nation to regain the credibility of foreign investors through speedy restructuring and consistent policy implementation," said an official.

He added that the stable labor-management relationship is also a big issue concerning foreign investors.