Commerce Secretary William Daley's upcoming business-development mission to South Korea sends a clear signal to the international business community that a ''New Korea'' is now open for business.
Thirteen months after President Kim Dae-Jung's inauguration, South Korea is being hailed as one of the few success stories arising from the Asian economic crisis.Working with the United States and its other global partners, Korea has overcome enormous challenges and is on its way to revitalize and strengthen its economy. Korea's comprehensive economic restructuring program is creating a more competitive, transparent, and open economy for the 21st century.
Korean government, business, and labor leaders clearly recognize that faithfully implementing fundamental restructuring initiatives are vital to the nation's economic recovery. Reforming key segments of the economy, opening markets to foreign business, and developing a support system for foreign investors are just some of the significant changes that Korea is undertaking to take a global economic leadership role once again.
The International Monetary Fund and international credit rating agencies agree that economic stabilization is well advanced and the economy is beginning to recover. Korea is also the first Asian country to begin repaying its IMF assistance loans.
Although tough tasks remain, the darkest days of Korea's economic crisis are firmly behind us.
Members of Secretary Daley's trade mission will find that Korea is making unprecedented changes in the way business is conducted, offering new opportunities for companies on both sides of the Pacific to substantially boost trade and investment.
While Korea's economic downturn, combined with the scarcity of trade financing, severely affected U.S.-Korean trade in 1998, prospects are much more promising in 1999.
Recently released trade statistics confirm that the decline in U.S. exports - 34 percent in 1998 - stabilized in the second half of last year. U.S. exports to Korea rebounded to near pre-crisis levels by the end of 1998. The United States in fact recorded a $271 million trade surplus with Korea in December, its first monthly trade surplus with Korea since July 1997.
On the investment front, foreign investors are playing an important role in facilitating Korea's economic recovery. Korea attracted record levels of foreign investment in 1998 despite the country's worst economic downturn in decades. U.S.-affiliated firms continue to be the largest source of foreign investment, accounting for 33.6 percent ($2.9 billion) of investment activity in 1998.
Foreign firms have already announced plans to invest an additional $1.25 billion during the first two months of 1999, a 288 percent increase compared to activity in the same period last year, with U.S. firms committing $475 million (60 projects).
Korean companies, now more than ever, are actively seeking U.S. investors through joint ventures, equity infusions, and asset sales, as they streamline operations to become more competitive. Officials predict that Korea will attract more than $15 billion in foreign investment this year.
Korea is firmly committed to transforming its economy into an open, market-based system. Although there are significant challenges ahead, Korea has taken the responsible route of reform, and the rewards are clearly beginning to pay off for both U.S. and Korean firms.