|
Foreign direct investment into Korea dropped to $3.6 billion in 2006, from $6.3 billion in 2005 and $9.2 billion in 2004. There were only three countries, including Korea, in the Organization for Economic Cooperation and Development that saw FDI drop for two-consecutive years. Moreover, most OECD member countries saw unprecedented improvements in FDI last year. The average rise in FDI was 22 percent, while Sweden saw FDI rise 172 percent. Canada was 97 percent, while the United States and England posted over 60 percent increases.
It is easy to spot cases of foreign investors turning away from Korea. ASML, the Dutch producer of semiconductor manufacturing equipment, planned to invest $300 million to open its Asia-Pacific headquarters in Korea. It went to Taiwan instead. Multinational pharmaceutical company GSK and Germany¡¯s Siltronic also planned to build a $300 million to $400 million factory in Korea, but ended up going to Singapore.
On a global scale, over $900 billion a year is spent on FDI. In 2005, just 0.8 percent of that global FDI volume went to Korea. That¡¯s 1/23 the amount that went to England, 1/14 of the amount that went to the United States, and 1/10 of China. Hong Kong and Singapore, whose economies are just a fifth and a seventh the size of Korea¡¯s economy, attracted between five to three times more FDI than Korea. Over the last five years, this administration has merely been showing off that its policies were ¡°investor friendly.¡± But in reality, its policies were just the opposite.
The government came out with a so-called ¡°balanced national development¡± plan that runs counter to global trends and imposed regulations after regulations against foreign businesses seeking to obtain factory space. Fickle economic policies, militant unions, complicated authorization procedures and backward education and living conditions haven¡¯t changed at all over the last five years. The Incheon, Busan and Gwangyang free economic zones, which had claimed to be a Northeast Asian ¡°hub¡±, were able to bring in only 34 cases of foreign direct investment over the last five years. Since it was launched in 1990, the Shanghai free economic zone was able to attract 2,646 instances of FDI, which is 80 times more than what Korea was able to achieve. And because of the government, which has been shouting out that it has not done anything wrong, Korea is being branded as an investment risk zone.
|
