More Than One Trillion Won Left the Country for Korean Students Abroad

More than one trillion won went overseas as remittances to Korean students studying overseas from January to May 2004. Remittances to overseas relatives and emigration costs, which exceeded five trillion won from January to April, ballooned to 6.5 trillion won at the end of May.

This rapid outflow of money may bring about contraction in domestic consumption, causing economic stagnation.

The Bank of Korea (BOK) said on Wednesday that the money spent on overseas education stood at $891 million from January to May this year, a 32.9 percent increase from the previous year, which was $670.5 million. Given the won-dollar exchange rates during the period, it is an increase to 1.407 trillion won from 783.1 billion won.

Remittances to overseas relatives, emigration costs, and the amount taken out of the country by overseas Koreans, which was 5.27 trillion won from January to April this year, increased 23 percent to 6.5 trillion won at the end of May.

Meanwhile, Korea is likely to witness the biggest deficit in travel balance this year due to the surge in travel overseas. Korean people spent $3.48 billion (4.646 trillion won) in overseas travel during the first five months in 2004, a 14.6 percent increase from the same period last year.

The total travel deficit during the same period increased 21.1 percent to $2.07 billion, a 21.1% increase from the previous year including common overseas trip and studying and training abroad.

Korean people can only remit money to other countries as gifts, and to students studying overseas. Emigration costs or taking monetary amounts out of Korea are only applied to emigrants. Both remittances to overseas Korean students and money that is changed and brought out of the country by students themselves are included in the statistics.

Joong-Hyun Park sanjuck@donga.com