By Lee Hyo-sik
Staff Reporter

Koreans' spending on overseas study or vocational training fell at its steepest rate in the first quarter of the year since the currency crisis 11 years ago. This drop is attributed, amid the global financial crisis, to Koreans' belt-tightening in general and the won's weakness against the dollar in particular.

According to the Bank of Korea (BOK) Sunday, Koreans studying and training abroad spent $770 million during the first three months of 2009, down 35.3 percent from $1.2 billion in the same period last year.

This is the largest decrease since the first quarter of 1998 when the country's overseas educational expenditures declined 40.1 percent year-on-year, following the Asian financial market meltdown.

Over the past few years, an increasing number of students and vocational trainees have headed abroad to enroll in foreign schools and spent record amounts of money.

Analysts here have said Korea's poor educational system and infrastructure has failed to keep locals from going overseas for high quality educational services, stressing that the country needs to make more efforts to upgrade the quality of Korean schools as well as the educational and residential environment to keep local students here and also attract more foreign students.

The central bank said the Korean currency has depreciated sharply against the greenback since last summer when the international credit market was devastated by the U.S. subprime loan defaults, deterring Koreans from heading overseas for study.

Foreign investors took dollars out of the country's stock and bond markets to secure greater liquidity, creating a dollar shortage here and pushing down the won's value.

However, the weakened won brought more non-Koreans into the country for education. Foreigners here spent $23 million for study and training in the first quarter, up 34.7 percent from a year earlier. It was the largest amount since the second quarter of 1995 when they spent $27 million on education.

Additionally, fewer Korean travelers headed overseas, while a record number of Japanese, Chinese and other foreign visitors came for shopping and leisure activities, riding high on their strong currencies.

South Koreans' overseas travel expenditures totaled $1.62 billion during the January to March period, down 57.1 percent from $3.76 billion in the same period last year, following a 59.5 percent year-on-year drop in the fourth quarter of last year. In contrast, foreign travelers spent $2.88 billion here, up 50.1 percent.

According to the Korea Tourism Organization, the number of outbound Korean travelers stood at 702,043 in March, down 28.6 percent from a year ago, while the number of foreign inbound visitors totaled 724,117, up 22.2 percent.

The nation's travel account posted a surplus for the second consecutive quarter. It posted $520 million in the black in the first quarter of this year, after a $700 million surplus in the final quarter of last year.

The BOK projected that the travel account may go into the red in the second quarter as the strengthening of the won in recent weeks is expected to encourage Koreans to head overseas, while discouraging foreigners to come and spend money here.

``Additionally, the spread of H1N1 influenza A across the globe may deter foreigners from traveling. But its effects on the travel account balance remains to be seen because the flu virus has also made locals more reluctant to go overseas,'' a BOK official said. The central bank expects the travel account to post a $100 million deficit this year.

leehs@koreatimes.co.kr