ΆΓ Foreign Direct Investment Falls 20 Pct Last Month

Korea Times 2001. 4.  6

Foreign direct investment has been falling drastically, by 20 percent last month and 77 percent over the first quarter, showing that conditions for investment are worsening.

According to the Ministry of Commerce, Industry and Energy yesterday, foreign direct investment was tallied at $800 million last month, down 19.1 percent over the same month of last year.

On the other hand, the cumulative foreign direct investment in the first three months was $4,506 million, up 64.5 percent from the corresponding period of last year.

However, when taking into consideration that the sale of assets worth $2,960 million by SK Telecom to an investment broker is not an actual case of foreign investment, the volume is just 56 percent of that of the first three months of last year.

In terms of the number of cases of investment, it similarly fell by 12.4 percent to 340 in March and 10.6 percent to 847 in the first quarter, testifying to the lack of interest among foreign investors.

``Naturally, the downturn in the stock market is a discouraging factor but industrial activity overall is strong and the depreciation of the Korean won against the dollar should be a positive sign for foreign investors,'' a MOCIE official said.

By region, investments from Japan fell by an obvious margin of 27.6 percent and the European Union by 3.8 percent while those from other countries increased by 105.6 percent.

However, the heavy increase in the investment from other regions was mainly because of the SK Telecom transaction with Signum IX of Singapore, one which can only be nullified should the latter fail to strike a deal with a third party.

Despite the apparent drop in foreign investments, the MOCIE remains optimistic that it will be able to reach its annual goal of $15 billion this year, the third consecutive year in which they would exceed $10 billion.

``We are confident that attracting foreign equity into SK Telecom will be successful in the first half of this year, which means that we are doing better than expected,'' one MOCIE official said.