September 30, 2019 12:39
Korean businesses are moving their investments abroad at record levels.
According to the Ministry of Economy and Finance on Friday, Korean investment overseas rose 13.3 percent in the second quarter compared to a year ago to a record US$15.1 billion.
A staffer at the ministry said, "It's unavoidable for Korean businesses to increase overseas spending because they need an overseas market presence and must acquire advanced technological knowhow."
The problem is that they cut back on domestic investment to pay for it. According to Statistics Korea, spending on domestic facilities has fallen for nine months, from -10.4 percent in November 2018 to -4.7 percent in July this year.
To make matters worse, foreign direct investment in Korea plummeted 38.1 percent to $6.7 billion over the same period.
"Red tape, high taxes and excessively high wages have prompted businesses here to shunt their investments overseas," said Yoon Chang-hyun at the University of Seoul. "High unemployment is going to be continued until domestic and foreign businesses see an enticing investment environment being created here."
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