|
While rival economies are briskly attracting foreign direct investment, FDI is falling in Korea. FDI, such as in building factories, is essential for continuing growth and creating jobs but foreign investors are increasingly turning away from Korea.
Korea is the only country among the 30 OECD member states whose FDI has dropped for three straight years. According to OECD data on Monday, the 30 member states attracted a record US$1.37 trillion in FDI last year, up 31 percent from 2006. But FDI in Korea fell 56.7 percent to $1.6 billion.
FDI in Korea has been falling steadily, from $9.2 billion in 2004, $6.3 billion in 2005 and to $3.6 billion in 2006. FDI in Japan and Mexico also dwindled until 2006 but both countries posted over 20 percent growth last year, leaving Korea as the only country to post negative growth for a third year.
Korea ranked 16th among the 30 OECD countries in FDI volume in 2004, but slid to 23rd in 2005, 28th in 2006 and 29th in 2007, with only Norway posting less.
Despite the global economic woes from high oil prices, FDI has increased sharply in the BRICs (Brazil, Russia, India and China) and ASEAN (Association of Southeast Asian Nations) nations. Foreign investment in these countries is often of the so-called "greenfield" type, centered on manufacturing such as company startups and facility expansion, which helps to maintain employment and growth of the host country.
FDI in India grew three-fold last year to $15.7 billion and doubled in Russia to $27.8 billion. The Central Bank of Brazil proudly forecasts that last month's FDI was an estimated $35 billion, the highest this year. Investment in Vietnam, Thailand, Indonesia and Malaysia also nearly doubled last year from 2006.
Jeon Young-jae, a researcher at Samsung Economic Research Institute, said, "Foreigners are reluctant to invest in Korea due to the saturated market, hawkish labor unions and various regulations."
(englishnews@chosun.com )
|
