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Foreign Investment to Reach Annual High in 1966

Korea's foreign investments were estimated to reach $2.8 billion in 1966, the highest annual record, mostly centering on the high-tech manufacturing sector. According to the Ministry of Finance and Economy, during the 11-month period, foreign investments accompanying high-tech expertise numbered 51 instances involving $303 million, up 100 percent in number of instances and 102 percent in value from a year earlier.

Korea's Paper Industry Move Up into Global Level

The Korea Paper Manufacturers' Association released the survey result that domestic paper producers were having an annual capacity of 8,992 million tons. Thus the domestic paper industry has a combined production capacity close to 9 million tons, to live up to its name as one of the ten largest global paper producers. Taking into account that current expansion and new establishment should go into full swing from 1997, then Korea's capacity is expected to stand at 10.83 million tons a year.

Retailer's Co-Making of Products Prevail

PBs (co-making of retailer's private brands) and NBs (manufacturers' national brands in a product are prevailing strategic for brand recognition. The so-called 'PNB' products are now popular as more merchants prefer to combine their low-price tactics of the PB good's line with the wide awareness of NBs, and thus increasing the products' value. Cash and carry outlet, Makro, also hinges on the PNB strategies in some foodstuffs. Retailers are depending on the co-branding since PBs are not familiar or reliable to consumers yet. The trend is thought to be a transition towards the stable marketing of PBs.

Kimch, Traditional Pickled Vegetable is Popular with Foreigners

Korean peculiar traditional pickled vegetable (Kimch) is gaining popularity among incoming foreign tourists. According to a survey by KNTO (the Korea National Tourism Organization) recently, foreigners preferred shopping for such products as garments, leather goods, Kimchi, foodstuff, and ginseng. According to the survey, Garments accounted for more than 33 percent of the entire shopping products, and Kimchi is being acknowledge better internationally.

Korean Consortium Took An Equity in Omani LNG Project

According to the Korea Economic Weekly, March 3, 1997, five Korean companies, named Korea LNG Co. or KLNG took unprecedented ownership position in Omani LNG project, which is being led by Oman LNG LLC (OLNG). This is the first time a Korean company has taken an ownership position in an LNG venture, either operating or under construction. Therefore this marks an important step in the development of relations and continued trade between Korea and Oman.

Yemen : Awaiting a kick-off

This is a full text of which Dr. Yahya Y. Almutawakel send it to Korea-Yemen Center. Dr. Yahya Y. Almutawakel is Head, Technical Office Ministry of Industry, Sana'a, Republic of Yemen. He also visited Korea last year. We thank for his deep concern about our center.

During the course of 1996, the performance of Yemen's economy has improved compared to the previous year. By the end of the year, many of the objectives of the stabilization program have been reached; and most important inflation has been contained while the exchange rate stabilized. These achievements resulted form controlling budget deficit, reducing growth in money supply and improving the situation of the balance of payments.

Fiscal and Monetary Situation

Inflation in 1996, measured by the consumer price index, has dropped to around 20% in comparison to about 63% in 1995. this sharp fall in the rate of inflation is attributed to improved fiscal and monetary policies. Improvement in the fiscal situation pertains to the government's success in holding up expenditure as well as to increased revenues due to higher world oil prices. Given the improvement in the public budget in 1996, government borrowing and hence increase in broad money supply was significantly reduced.

Exchange Rate and Balance of Payments

In 1996 the balance of payments exhibited an overall improvement, where the deterioration in the current account was more than compensated by a substantial improvement in the capital account. As a result, official foreign exchange reserves by the end of the year topped a billion dollar (almost five months of imports).

With the tight fiscal conditions and the improvement in the balance of payments situation, the value of the Yemeni rial vis-a-vis foreign currencies managed to stabilize during 1986 within the range of 125-133 rials for one US dollar. Furthermore, there was a small margin between the buying and selling rates(around one rial).

Investment and Growth

These positive developments have not so far been translated into real economic growth, nor reflected any significant inflow of foreign capital. The available data do not show any significant increase in agriculture and industry. Future growth in output and employment depends on growth in the non-oil sector. An acceleration in investment and hence growth require political stability, reforming the financial sector as well as starting administrative reform.

Continued high interest rates are a deterrent to new investment and growth. Lending rates were freed, while there is a minimum rate for commercial banks' deposits(20-22%0. With the reduction in inflation, interest rates became positive, putting a dampening effect on new investment and hence growth.

Also the role of the General Investment Authority has been reoriented from regulation to promotion, While investment incentives were reviewed to attract more investments. Moreover, as part of the economic reform program adopted by the government, a number of public enterprises would be sold or liquidated. This needs to be complemented by establishing a legal and economic regulatory framework for the government's privatization program, which is expected to attract substantial private investment.

This publication is consisted of  Korean, English, Arabic and the other languages concerned. The contents of the newsletter do not necessarily reflect either the position or the views of KYC.

也門 消息 KYC Newsletter  Publisher: Dr. Seong Min HONG, President , Editor: Dr. Joo Heon Kang, Director of Research, KYC.

Kwanak P.O. Box 49, Seoul151-600, Korea, Tel: 82-2-876-4249, Fax: 82-2-876-4349. Copyright ⓒ 1997-2008 KYC. All rights reserved.