KOTRA Losing Competitiveness
KOTRA and its investment attraction agency, Invest Korea, are supposed to act as a spearhead for Korea Inc. in finding new markets and drawing new investment to the country but the two are falling short on both accounts.
Although they can't be blamed for everything behind dwindling foreign direct investment, statistics show there are few things the two can do to dodge the bullet.
First, according to OCED statistics, Korea is the only country among its 30 member states that has seen its FDI falling in recent years.
In 2006, the total that the 30 member states had attracted in terms of FDI amounted to $1.37 trillion, with Korea being the only country to see it go down. In the same year, Korea's FDI dropped 56.7 percent to $1.6 billion.
The OECD statistics showed Korea's FDI had dropped for three consecutive years.
However, Park Sung-ho, Invest Korea deputy director, said that Korea had increased its FDI over the same period, albeit modestly.
``In 2006, our FDI amounted to $12.3 billion,'' Park said, explaining that his tally was based on an ``reports'' basis, while the OECD statistics came as the result of subtracting outflows from inflows. It is not hard to see which reflects better the FDI situation in Korea between the two statistics.
``It is more about commitments than actual investments,'' Park said in an interview with The Korea Times. Park's remarks, however, appear to have his priority misplaced, in contrast to other statistics by the Korea Chamber of Commerce and Industry that showed seven out of 10 foreign investors don't want to continue to invest in Korea for a variety of reasons.
Then, KOTRA issued Monday a press release claiming the country's firms tend to go it alone in terms of investing overseas, suggesting that they should adopt other countries' methods of trying to strike partnerships apparently in order to reduce the accompanied risks.
KOTRA statistics took China as an example.
It said that out of a total of $20.4 billion in direct investments overseas, $14.3 billion or about 70 percent, was made without partnership and compared it with other countries. An official was quoted by Yonhap News as saying, ``Korean firms lack experience in international financial markets, which forces them to make investments without partners, and their cloistered corporate culture also plays a role in this unilateral investment method.''
Asked for the breakdown of investment and their method by the firm, KOTRA officials said that they don't have data but their conclusions and suggestions were based on data from other sources such as the Export and Import Bank of Korea.
Pressed on the issue, a KOTRA official said that Export-Import Bank also doesn't have any specific data.
KOTRA has 323 personnel dispatched to 69 countries around the world, employing more than 200 local employees, but their data and policy suggestions are not taken seriously by firms. Obviously, it is because KOTRA is not doing its homework properly.