Foreigners to boost investment in Korea

Despite a Korean economic slump, foreign-invested firms here plan to increase their investments over the next couple of years, a survey showed Monday.

According to the survey, conducted by the Korea Trade-Investment Promotion Agency (KOTRA) among 220 foreign-invested firms, 52.3 percent said they would either surely boost their investments or probably do so. The exact figures were 30 percent and 22.7 percent, respectively. Only 6.4 percent said that they would probably reduce their investments and 2.3 percent said that they would surely do so or withdraw from Korea. Thirty-nine percent said that they would maintain the current level of investments. In the survey, 87.3 percent expected that their profits would increase this year, while 12.7 percent gave the opposite view.

On the Korean economic outlook for the next two years, 53.2 percent said they were optimistic while 28.2 percent reported being pessimistic. The remaining 18.6 percent forecast that the situation would remain unchanged.

More than half of the respondents predicted that the environments for investment and business would be similar to those last year in terms of taxation, customs clearance, labor and factory establishment. Specifically, 28.6 percent said that an improvement had been made in the field of customs clearance.

Meanwhile, 27.7 percent said that things had deteriorated in the labor sector. About 27 percent of foreign-invested firms cited financial restructuring as the greatest challenge facing the Korean economy while 25.4 percent pointed to the improvement of transparency.

Twenty-six percent urged Korean companies to boost the transparency of their management, while 17.5 percent and 16.1 percent called for technological development and reform of the governance system, respectively.

Cheong Yeong-Tae ebizwiz@donga.com