By Jane Han
Staff Reporter
For Cho Hwan-eik, the past 10 months heading the Korea Trade-Investment Promotion Agency (KOTRA) has been no easy task with fresh challenges sparked from the global financial crisis making it tougher to facilitate trade and investment.
Exports of the country's key durable goods have been dwindling and foreign direct investment in South Korea tumbled almost 40 percent on-year in the first quarter of 2009, but the veteran economic expert still keeps his cool, betting that Asia's fourth-largest economy has hit the bottom.
``We've turned the corner and I'm confident that our economy will recover fast, very fast,'' Cho said in a recent interview with The Korea Times.
He said the fundamental problems that prompted the financial crisis still remain unresolved, but the pain felt from the mayhem has and will become less intense.
Cho's optimism comes at a time when recent mixed reports and signals have been befuddling policymakers and economists alike. Some say the worst of the region's financial crisis may be over, while others claim that worst is still ahead.
South Korea avoided recession in the first quarter by expanding 0.1 percent, largely on the back of the government's stimulus spending and aggressive rate cuts. At the same time, however, the nation shed the biggest number of jobs in a decade in March, while demand for locally made goods continues to wane.
The 59-year-old acknowledged that both positive and negative factors currently coexist, but emphasized that South Korea, in many aspects, is put at an advantage compared to other major economies.
``The financial crisis is serving as an opportunity for domestic industries to step up their game and press on with overseas expansions,'' he said, exemplifying that semiconductors, ships and other top Korean made exports have ramped up their market share in recent months.
Korean brands and products are going to be revisited by cash-strapped consumers around the world, said Cho, who held numerous key economic posts in past governments, including presidential secretary for economic affairs, vice minister of the Ministry of Commerce, Industry and Energy, and president of Korea Export Insurance Corporation.
``This crisis is a chance for local firms to break away from their sandwiched position in between Japanese and Chinese makers,'' he said, urging that Korean companies need to capitalize on the timing as much as possible.
Although overall exports are declining, the weak won has been helping companies' bottom line. Korea's trade surplus hit a record high for the second-straight month in April thanks to favorable exchange rates and a sharp drop in imports.
Cho, who oversees KOTRA's 94 overseas offices, stressed, however, that domestic brands must step up their edge in order to remain competitive in the days after the crisis.
They need to continue cutting the so-called Korea Discount _ the amount by which foreign buyers and investors undervalue Korean products and stocks _ and turn ``truly global,'' he said, explaining that top marquee brands such as Samsung and LG electronics should transform their identities even more.
Lawmakers fighting in the National Assembly, Korean travelers' lack of etiquette abroad and mistreating visiting foreigners, Cho says, all contribute to chipping away the value of Korea as a whole.
On struggling GM Daewoo and Ssangyong Motors, Cho said foreign investors may get a negative impression of Korea if the government keeps dragging its feet on what to do.
``A solution should be sought soon. The sooner the better,'' he said, stressing that such developments collectively send a message to investors.
The KOTRA head is widely considered a hands-on leader, who travels overseas from the United States to China to meet with buyers and investors to get their first-hand feedback.
Assessing the agency's investment-drawing efforts so far, Cho expressed discontent without reservation.
Foreign direct investment (FDI) in South Korea totaled $1.67 billion in the January to March period, down 38.2 percent from a year earlier, according to the Ministry of Knowledge Economy's recent report. The fall is the steepest drop since the country saw a 48.4-percent drop in the first quarter of 2003.
``There are plenty of new areas we can explore to draw inbound capital,'' he said, adding that KOTRA and the government shouldn't limit providing support to the manufacturing sector, but also back exporting in the areas of services, technology and finance.
He said KOTRA must continuously transform to explore new ways to build business opportunities instead of relying simply on traditional methods.
Since taking office in July 2008, Cho aggressively reshuffled his staff, spread across the world, implemented tailored support for small- and medium-sized enterprises and kicked off active overseas networking and large-scale investment fairs to help makeover the once-faltering image of KOTRA.
``We're an organization with 47 years of experience. We're present everywhere from Sudan to Swedan,'' said Cho. ``Times are tough, but the experience pays off.''