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Korea Exim News

Record-Breaking FDI Volume by Public Institutions in 2010

Date 2011.04.20 View 28164
□ On April 11, Korea Eximbank (www.koreaexim.go.kr, Chairman Yong Hwan Kim) announced that foreign direct investment (FDI) by public institutions in 2010 reached USD 5.9 billion.

○ According to the report “FDI Trends of Public Institutions in 2010” by the Overseas Economics Research Institute, FDI in 2010 increased by 27.8% to USD 5.9 billion year-on-year due in large part to resource development efforts by public institutions such as Korea Oil Corporation and Korea Gas Corporation.

○ This year’s FDI amount, the highest ever by public institutions, follows consecutive annual increases in FDI for nine years since 2002.

□ Accumulated FDI by 29 public institutions as of the end of 2010 totaled USD 16.22 billion, or 10% of the accumulated FDI total of USD 163.4 billion made by Korea.

○ FDI of USD 5.9 billion by public institutions in 2010 represents a 6.8-fold increase over that in 2006 of USD 870 million and 25.4% of total investments by Korea (USD 23.2 billion) in 2010.

○ In particular, investments in the mining industry comprised the largest portion of FDI by public institutions, accounting for 78.9% of investments made by Korea in the mining industry. This is analyzed to be a direct result of the government’s policy for public institutions to specialize in large-scale natural resource development projects.

○ Regionally, with the acquisition of Britain’s Dana PIc, Korea’s investment in Europe has increased by 265.4% compared to the previous year.

○ By country, the top five investment destinations were the United Kingdom, Canada, Indonesia, Australia, and the Netherlands. In terms of resource development investment destinations, the countries of Madagascar, Peru and Yemen received a significant proportion of investments.

○ For the past two years, major pension and institutional funds such as the National Pension actively invested overseas in real estate as well as finance and insurance sectors. In 2010, FDI by pension and institutional funds totaled USD 2.49 billion which accounts for 11% of Korea’s total investments.

□ An official from Korea Eximbank stated, “The recent increase in investments by public institutions is a result of government policies to increase independent resource development rates for major resources and is a trend which will likely continue. In order to raise the global competitiveness of public institutions and secure new growth engines, public institutions need to diversify methods for entry into overseas markets.”