South Korea's FDI inflow lags behind global peers

Foreign direct investment (FDI) in South Korea hovered below that of global peers last year, data showed Thursday, apparently due to the lack of positive leads in the local economy. South Korea's FDI inflow came to US$9 billion in 2012, down 11.9 percent from $10.2 billion tallied a year earlier, according to the data compiled by the United Nations Conference on Trade and Development (UNCTAD). The number lags behind $119.7 billion for China, which edged down 3.4 percent over the cited period. India and Malaysia saw their FDI inflow reach $27.3 billion and $10 billion, respectively, last year. Market watchers said the drop in FDI in Asia's fourth-largest economy is mainly attributable to the lack of positive developments, which made foreign investors seek other investment destinations. "Considering (the dull) investment environment, South Korea's FDI inflow is expected to remain sluggish down the road," said Kim Yoo-shin, a researcher at the state-run Export-Import Bank of Korea (Eximbank). Developing countries in Asia, Latin America, and Africa saw their combined FDI inflow reach $608.4 billion in 2012, down 3.2 percent from a year earlier, while advanced countries including the United States saw their FDI inflow plunge 32.1 percent over the cited period to $548.9 billion. Meanwhile, the report added that South Korea's overseas direct investment came to $23.2 billion last year, rising sharply from an average of $13.8 billion tallied in 2005-2007, ahead of the 2008 global financial crisis. "Local firms should make efforts to take over undervalued companies based in the eurozone to acquire their technology and distribution network," said Lee Jae-woo, a researcher at Eximbank. South Korea spent $5.5 billion in acquiring foreign firms last year, while China and Japan invested $37.1 billion and $35.6 billion, respectively, over the cited period, the UNCTAD data added.