Economic Slump Halves Outbound Investment

The nation's investment in overseas markets tumbled nearly 50 percent for the first nine months of this year from a year ago, as Koreans shunned taking risks abroad due to lingering uncertainties surrounding the global economy.

The Ministry of Strategy and Finance reported Wednesday that the country's foreign direct investment (FDI) abroad reached $13.3 billion between January and September, down 48.7 percent from $26 billion a year ago

Among regions, Korea reduced its FDI in Asia most to 59.5 percent compared with the previous period, while in North America it declined 45.2 percent.

In terms of countries, investments in China plunged 92.9 percent to just $400 million from $5.7 billion tallied for the same period the year before. Money flowing to the United States dropped 81.7 percent to $700 million.

``We assume that firms have withdrawn their investments in Asia most because the business in the region is relatively weaker than those of North America,'' Ji Kyu-tek, an official in the international economic affairs bureau at the ministry, told The Korea Times.

However, the only exception was Russia, where investment increased 33 percent on the back of Hyundai Motors. The nation's number one auto maker has invested $620 million building factories in St. Petersburg.

Real estate and the loan industry dropped the most at 74.2 percent, while the manufacturing and mining industries declined 35.1 percent and 40.4 percent, respectively.

But one positive sign is that the ratio of decline lowered.

Ji said Korea is not alone as most countries are experiencing the same thing due to the global economic recession.

``FDI around the globe is getting lower. The FDI dropped 57 percent in the first quarter of this year compared to the previous period according to the world investment report which The United Nations Conference on Trade and Development (UNCTAD) released June,'' Ji added.