Thursday, August 7, 2008

This & That

A short post tonight -- a couple of things that caught my attention.

The Korea Times has an article on the falling rate of direct foreign investment in Korea. As usual in the KT, it's a bit one-sided. "Korea Must Send Open-Market Signal," warns Chung Tong-soo, the head of the state agency responsible for attracting and reeling in foreign investors. "The days following the Asian financial crisis presented a unique opportunity for investors, but we don't see that kind of wave coming again." Those who remember the Asian financial crisis of a decade ago might well hope that Korea doesn't see that sort of wave coming again.

Among many reasons that contributed to this decline are a lack of investment opportunity, militant labor unions and excessive government regulations, said Chung, who took office in 2006.

"What was previously available as merger & acquisition (M&A) opportunities are no longer here because cash-rich Korean firms now outbid foreign investors,'' he said, stressing that the government's limit on foreigners' bidding due to technology outflow concerns doesn't help.

He said, in fact, the militant labor unions, labor laws and soaring wages are the biggest concerns for potential strategic investors who plan long-term investments in Korea.

Oh yes, those icky labor unions; foreign investors (including Korean companies investing in other countries) want a government that crushes labor unions. Soaring wages are such a problem -- you can't keep workers docile if they have enough money to pay their rising utility bills. (I suspect that the skyrocketing pay of foreign CEOs isn't considered a problem.) And how dreadful that domestic firms are so successful that they can outbid the foreigners. He also wants Korea to cut its corporate tax rates even further than it has already. I am sure Mr. Chung is just doing his job, but whose side is he on here?

I do love Korea, but I know it's no more perfect than any other country. At The Hankyoreh, there's a brief, sweet story about students at a school for North Korean defectors. It seems that refugees from Communist tyranny aren't always welcomed with open arms in the haven of freedom to the South, so there's an alternative school for them. (Photo above from The Hankyoreh.)