Asia Times: Korea to cancel foreign investment plans



	February 9, 2000	atimes.com

The Koreas

Korea to cancel foreign investment plans

SEOUL - The South Korean government is expected to cancel its plan to sell off its stakes in public entities to foreign investors in view of the national interest, the Finance and Economy Ministry said Tuesday.

Opposition to the sales was relayed to the Planning and Budget Ministry, which recently voiced a similar opinion. The Finance and Economy Ministry noted that there is no longer any inter-ministerial difference on the matter.

There is no particular reason to justify the plan to sell off shares of profitable public entities to foreign investors at a time when the nation is in no urgent need of dollars after overcoming the foreign exchange crisis, it added.

Moreover, foreign investors can buy the shares if public entities are listed on the stock market, and foreign sales could destabilize foreign exchange rates due to an inflow of dollars.

''Foreign sales were intended in the first place to secure dollars and help improve management efficiency. The goal of dollar infusion has now been fulfilled, and improving management efficiency can be attained through other means such as management tie-ups,'' a ministry official said.

''So it is desirable to dispose of the shares at home in connection with the privatization of the public entities.'' ''One of the most important policy tasks for this year is to maintain a balance in external trade,'' he said.

If excess inflow of the dollar leads to the appreciation of the won, it will cause exports to fall off and aggravate the current-account balance. Thus the nation's foreign credibility will sag and in a worst-case scenario, foreign investors will pull out investment.

In the same vein, the ministry has put up for review its plan to sell off its stake in Korea Tobacco and Ginseng Corp.

(Asia Pulse/Yonhap)

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