Posts tagged ‘investment’
On 19 September 2011, in his bi-weekly radio address, President Lee Myung-Bak announced that the government would invest USD90 million in stem cell research during 2012 with the aim of developing the industry into a new economic “growth engine”. Read more
On 31 January 2011, the Ministry of Knowledge Economy (MKE) announced a target of USD15 billion in foreign direct investment (FDI) for 2011.
In 2010 Korea attracted approximately USD13.1 billion. Key sectors to be targeted will include green energy, biotechnology and information technology convergence, manufacturing and distribution services.
Investor confidence resulting from free trade agreements (FTAs) with Europe and the United States is expected to increase inbound investment from traditional source countries, however, particular attention will be paid to newer and potential sources, including emerging economies in Asia and the Middle East along with Russia and India.
The Ministry of Foreign Affairs and Trade (MOFAT) will this year open small diplomatic missions in Madagascar, Uganda and Rwanda.
The missions will be established as “mini offices” with one home-based diplomat stationed at each post. They will be supported by embassy staff in South Africa, Kenya and Tanzania, which have to date acted as bases for Korea’s non-resident accreditation in the targeted countries. At the end of an undefined trial period, the mini offices will be reviewed and a decision made on their potential expansion.
Madagascar, Uganda and Rwanda have become important trade and investment partners for South Korea as the competition for energy, mineral, and food resources increases. Korea has achieved a limited degree of success in its relations with Africa and is starting to draw greater interest through its development assistance program.
Korea’s transformation from a war-torn developing country, which was net aid recipient, to the world’s 13th largest economy and net aid donor, holds a degree of credibility that cannot be matched by other developed donors. However, the lack of trained Africa specialists with cultural and on-the-ground experience has to date seriously hampered the effectiveness of Korea’s development, trade and investment efforts. This was demonstrated by the disastrous unwinding in March 2009 of Daewoo Logistics efforts to purchase vast amounts of farmland in Madagascar.
The establishment of diplomatic missions in Madagascar, Uganda and Rwanda will allow an expansion of Korea’s development, trade and investment efforts in these countries and in the longer term build a much needed core of expertise in African affairs.
On 8 January 2011, the Japanese Government announced that it would lead a consortium to extract seabed mineral resources. The Natural Resources and Energy Agency will commission Japan Oil, Gas and Metals National Corporation (JOGMEC) to develop the system along with two private companies.
The Japanese Government estimates the value of seabed mineral resources in its territorial waters at approximately USD2.3 trillion, which would make it one of the world’s largest mineral deposits. Importantly, the areas targeted for exploitation are believed to hold not just sizeable deposits of gold and silver, but also rare metals and rare earth minerals.
The announcement comes one week after China’s Ministry of Commerce announced that the 2011 first rare earth export quota would be 11.4 percent down on the previous year.
Japan currently relies on China for more than 90 percent of its rare earth mineral imports. Korea has the industrial, technological and maritime capacity to develop seabed mineral resources but has to date limited its efforts to exploratory and experimental work. Further development will require closer cooperation with Pacific Island states, where both China and Japan have already invested heavily.
Korea’s target to secure greater access to energy, raw material and food resources has today been boosted by the announcement that the National Pension Service (NPS) will cooperate with Korea’s largest companies to establish private equity funds for joint investment in overseas assets.
Companies currently considering establishing private equity funds with the NPS include SK Group, GS Group, KT Corp, Hyundai Motor and Samsung Group. It is estimated that each fund could be valued at up to USD890 million. As administrator of the national pension scheme, the NPS currently manages approximately USD267.1 billion in assets, making it the world’s fourth largest pension fund. Each private equity fund will require approval by a fund committee chaired by the Ministry of Health and Welfare. However, with its asset portfolio still heavily weighted towards domestic bonds, approval will not present a significant hurdle.
The plan will provide a substantial boost to Korea’s efforts to secure to energy, raw material and food resources and puts Korea on more equal footing with key market rivals China and Japan.
On 27 December 2010, the Korean Ambassador to Indonesia signed a USD600 million bilateral framework agreement between the two countries, which will provide loans to Indonesia to aid in the financing of information and communication technology (ICT), infrastructure ‘green’ projects between 2011 and 2013.
The amount provided is a significant increase from the USD149.9 million development funding provided between 2007 and 2009. South Korea–Indonesia ties have been developing rapidly in recent years. Indonesia has become a key target for South Korea due to its economic growth; labour, natural, food and energy resources; and its investment climate, which has proven to ideally suited to Korean business.
However, the substantial growth in strategic and defence ties has drawn increased regional concern with the two countries now closely cooperating in the production and supply of fighter jets, training aircraft, submarines, armoured personnel carriers and strategic infrastructure.
