Korea’s FDI at all-time low

Do foreigners view Korea as unsuitable ground for investment?In what has been noted as an alarming trend, direct investment foreign investment in Korea has hit an all time low. The Net FDI in Korea, showed a drop of US$9.25 billion in 2004 from previous years and the consecutive three years till 2007 have also shown a steady decline. In fact in 2007 the net figures for foreign investment totalled a drastic $1.58 billion.

In 2008, the amount of FDI that left Korea in the first three months was $670 million, higher than figures that came in. Plenty of foreign companies withdrew their investment from Korea. This is an unhealthy trend for the Korean market in the investment market. Some of this could be attributed to excessive government regulations, labour unions problems, high living costs and lack of proper education for children.

According to the Organization for Economic Cooperation and Development, Korea is the only country in the 30 member nations of the OECD where FDI shrink has been noticeably low for the past three years.

Other countries in this region like, Malaysia, Indonesia, India, Brazil, and China or Vietnam, have not shown such alarming figures in foreign investment. Vietnam’s FDI rise was more than eight times, from $2.1 billion to $17.9 billion. India saw a rise from $2.6 billion to $15.7 billion.

It is alarming to see that not only are new investors not investing in the country, but alarmingly those who have already invested in this country have not shown any positive growth or reinvestment.

The past few years have seen many a foreign businesses withdrawing their investments from Korea. Companies like Nokia transferred some of its facilities in South Gyeongsang Province, Masan to China and India. Motorola is another company that has also moved its plant in Icheon, to China. Yet another big name in this trend is that of Philips, which withdrew its investments from a joint venture with LG in Korea.  Following the trend, Wal-Mart and Carrefour have ended their business transactions with the country.

The trend has given rise to alarming trends of economic slowdown and rising unemployment in Korea. The youth and the workforce are those who are directly affected.

M’sia investment inflow undaunted by political climate

Fresh reports from Kuala Lumpur, suggest that Malaysia is seeing plenty of investment from foreign shores in spite of its unstable political conditions. An example of this is Vivo Bio Tech Ltd, an Indian firm case which plans to invest $140 million in Malaysia. The investment is for building a research and manufacturing plant in Malacca. Confirming this Malaysian news sources add that this is in addition to Japanese, German, and American direct foreign investments worth 16.6 billion that have taken place since March.As per reports of the Malaysian Industrial Development Authority the country’s FDI inflow will surpass last year’s 33.4 billion ringgit. This comes as much awaited good news to the Malaysian troubled people.

Ex Mida director-general R. Karunakaran, says that the first four months of 2008 has seen investment worth 23.9 billion ringgit. These investments include projects by Germany’s Q-Cell, Japanese Ibiden Co Ltd, and US-based SunPower Corp and Honeywell International Inc. This is expected to raise the investment figures to nine billion ringgit.

Malaysia attracted a large number of foreign investors from countries like Saudi Arabia, Bahrain, Qatar, Kuwait, etc belonging to the Gulf Cooperation Council.

Malaysia faced the ides of March in the form of an election upset wherein the ruling Barisan Nasional (BN), a conglomerate of the three main ethnic groups, lost its traditional two-thirds majority support in parliament.

Amidst political turmoil and rising oil prices there was enough speculation about the investment figures, but this has been proved wrong much to the relief of the financial leaders. Much required global approval in the form of the Global Competitiveness Report of 2007-2008, which placed Malaysia in the 19th position from that of the 23rd in 2007 has been timely indeed.

In another achievement of sorts Kearney’s 2007 Global Services Location Index (GLSI) indicated that Malaysia was one of the top three best destinations in the world for investment in terms of outsourcing business.

Enter the Maoists?

With the end of the monarchy in Nepal, the country is geared for a Government where one sees the participation of various political outfits of every hue and ideology. The latest to join the ranks are the Maoists who have so long been identified by their armed rebellion against, political legitimacy. Though the transition to a democratic government seems far from problems the mood is optimistic bolstered by the fight for democracy also advocated and ushered in Nepal with the blessings of the Bush administration in the US.The entry into the main political fray by the Maoists is though challenged by long-held principles of the country that have opposed to the  involvement of  states or groups thought of as rogues. The (Maoist) Communist Party of Nepal which has won the majority of seats in the constituent assembly elections, is on the U.S. Terrorist Exclusion List. This also implies that members of the same are barred from travelling or owning property in the States.

In what is being termed of as a shift in US think tanks, top U.S. diplomats met with Maoist Chairman Pushpa Kamal Dahal, though of as probable next as prime minister. This though contradicts statements made by Deputy Assistant Secretary of State, Evan Feigenbaum, who told reporters that the Maoists are still on the terrorist lists.

An electoral victory for the Maoist’s leads to problems for some of Nepal’s neighbour’s especially India which has been providing military training to the countries army. It is feared that the Maoist electoral victory will lead to strengthening of Maoist rebel activities with the Naxalities within India too. The Maoist leader Prachanda has however denied any links with Naxalites in India.

Both India and China, important neighbours for Nepal have shown keen interest in Nepalese political developments. On its part Maoist leader Prachanda has said that Nepal would try and maintain good relations with both the countries.

The new Nepalese Government will face plenty of political and economic challenges that are predominant in the country. According to sources in the Asian Development Bank, Nepal is still one of the poorest nations in the world. According to recent reports by World Food Program, about 2.5 million people in rural areas of Nepal are in need of immediate food assistance. This is in addition to an additional 3.9 million people who face a risk of starvation due to food insecurities and increasing prices of food.

Another of the major problems lies in deciding the future of twenty-three thousand guerrilla fighters of the People’s Liberation Army, who are in the UN-monitored cease-fire camps. According to Prachanda, they should be integrated into the existing 95,000 Nepalese army but this suggestion has been opposed by the military administrators.

G-8 summit’s greenhouse decision ‘unsafe’

Environmentalists downplay a decision, made by the most powerful countries in the world, to reduce greenhouse gas emissions by 50% by 2050.

The summit, held in Japan, decided to set the goal as such so that it was compliant with “economic growth and energy security,” as said by leaders in a statement. The leaders also said in order for the goal to be reached they will need the help of all major economies, including India and China.

Critics argue 50 percent reduction in the given time frame isn’t enough. The year 2020 is highly recommended as a safe target for emissions to be cut in half.

Members of Oxfam International, a group that dedicates itself to fighting poverty and injustice, dressed as leading officials and held balloons representing carbon emissions in an act to demonstrate a more serious situation regarding greenhouse emissions. “At this rate, by 2050 the world will be cooked and the G-8 leaders will be long forgotten,” Anthony Hill, a spokesperson for Oxfam International, stated. “The G-8’s endorsement of a tepid 50 by 50 climate goal leaves us with a 50-50 chance of a climate meltdown. Rather than a breakthrough, the G-8’s announcement on 2050 is another stalling tactic.”

The European Union is more eager to reach a higher target. They would like to cut the emissions as they were in 1990 by 25 to 40 percent by 2020. Japan, the United States, and Canada are opposed to such a target.

Ben Wikler, a member of the environmental campaign AVAAZ, blames the governments’ childishness and lack of responsibility for the decision. “The failure to act on 2020 targets is a failure to take responsibility, and our members around the world feel that there is a childishness to not taking responsibility.”

The director of the WWF Global Climate Initiative, Kim Carstensen, agrees the decision was an unsafe one.  “So little progress after a whole year of minister meetings and negotiations is not only a wasted opportunity, it falls dangerously short of what is needed to protect people and nature from climate change.”

The United States was the only party among 175 to reject the Kyoto Protocol, a plan to limit atmospheric levels of greenhouse gases, ten years ago. A reason given for the opposition was the protocol did not restrict emissions in India and China. Last year, at the Bali conference, the United States signed an agreement for negotiations involving a reduction in carbon dioxide emissions. The White House claimed their effort alone is useless. “The negotiations must proceed on the view that the problem of climate change cannot be adequately addressed through commitments for emissions cuts by developed countries alone. Major developing economies must likewise act.”

In 2009, in Copenhagen, Denmark, there will be another Bali pact. The event is designed to be a guide for more climate talks.

Direct China-Taiwan flights begin

In what is being seen as a major initiative to improve relations, by Chinese and Taiwanese Governments, first regular and direct flight services have started operation from China to Taiwan. Commenting on the same, China’s official on Taiwan affairs said that ‘this was a new start’ in trying to improve relations between Beijing and Taipei.The move comes in the wake of improved relations since Taiwan’s new president, Ma Ying-jeou, came to power in May. The arrangements for direct flights, is a big step towards improving relations between strained nations.

The flights that will operate from Friday to Monday will connect five major cities of China and Taiwan.

The first China Southern Airlines flight, a part of this arrangement had 250 passengers aboard and was met with traditional water sprinkling ceremony.

China Southern Airlines, company chairman Liu Shaoyong, described the moment as ‘a sacred’ one, even as lion dancers and aboriginal singers welcomed passengers at the airports.

The new flight agreement is being touted as a drive that will prove to be a good deal for both the new Taiwanese President Ma Ying-jeou, and the countries tourism. This brings in a ray of hope for a boost to Taiwan’s flagging economy.

Local businessmen are appreciative that this move is sure to bring in a good deal of business to the local market. In what is seen as a major achievement, the two sides have agreed to an increased number of Chinese tourists who can visit Taiwan. The number will rise to 3,000 per day from 18 of July.

Skeptical and more practical solutions were however offered by a group of those who believed that direct cargo flights, would have been a better idea to improve China-Taiwan relations.

These new chartered flights will take a round about route, through Hong Kong airspace; this is because Taiwan’s military is on constant alert for any kind of possible air attack from the mainland. This is also because civilian flights cannot be allowed to clutter cross-straits radars, says military sources.

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