Lee to call for national unity to overcome economic trouble

SEOUL, Jan. 1 (Yonhap) -- South Korean President Lee Myung-bak plans to outline his policy direction this year in an address focusing on economic issues that will be broadcast live nationwide on Friday, his aides said.

In his 20-minute New Year speech, the president will appeal for national unity and burden-sharing to ride out the deepening economic woes, they added.

"President Lee plans to unveil his policy vision for the Year of the Ox through his first public speech in the New Year," an official at Cheong Wa Dae told Yonhap News Agency over the phone.

Lee will explain about the government's policy direction to weather the economic crisis and call for national unity for that, he added.

His New Year address on the first working day of this year comes a few weeks earlier than usual. His predecessor Roh Moo-hyun delivered the address on Jan. 23 in 2008.

Presidential secretaries said it reflects Lee's will for a swift move to tackle pending economic issues.

The government's efforts to create jobs and support underprivileged people will be introduced as well, they said.

On the security issue, the president will reiterate his willingness to get inter-Korean ties back on track via dialogue.

He will also unveil his vision for bolstering law and order, improving labor-management relations, and upgrading public education.

But Lee is unlikely to mention such political issues as his reported plan to reshuffle the Cabinet and reorganize the presidential office.
(5th LD) N. Korea vows to denuclearize, rebuild economy in New Year

By Kim Hyun
SEOUL, Jan. 1 (Yonhap) -- North Korea said Thursday that it will rebuild its ailing economy and aim for denuclearization in the New Year, in an apparent signal of its willingness to start afresh with the United States.

In a joint newspaper editorial that summed up policy goals for 2009, Pyongyang continued criticism of Seoul but made no hostile mention of Washington, just three weeks before the inauguration of a new U.S. administration.

"The independent foreign policy of our Republic to denuclearize the Korean Peninsula and defend the peace and security of Northeast Asia and the rest of the world is demonstrating its validity more fully as the days go by," the editorial jointly issued by the North's ruling party, army and youth military said.

Pyongyang sees the inauguration of U.S. President-elect Barack Obama on Jan. 20 as an opportunity to start afresh after eight years of largely sour relations with the outgoing Bush administration.

Six-party talks aimed at denuclearizing North Korea are on hold until Obama takes office. Washington removed Pyongyang from its terrorism blacklist as the talks proceeded in 2008, but the latest round ended without progress in December.

In an apparent gesture to the U.S., the editorial said North Korea "will develop relations with the countries friendly towards us."
It also eschewed Pyongyang's customary accusations of joint military exercises by South Korea and the U.S.

"Different from joint editorials of previous years, it did not throw any criticism against the United States while mentioning the realization of a denuclearized Korean Peninsula," Seoul's Unification Ministry said in a statement.

Pyongyang will continue to uphold its military-first policy, but this year's statement showed an increased focus on the economy -- particularly on feeding its people.

North Korea's harvest slightly increased in 2008, but the U.N. World Food Program says nearly a quarter of its population of 23 million still needs outside food aid.

"To relieve scarcity of food is a pressing problem," the editorial said. "We should concentrate all efforts on hitting this year's target of grain production with the extraordinary determination to solve food problems by our own efforts in any circumstances."
South Korea gave no food and fertilizer aid in 2008, and the suspension will likely continue in the new year due to damaged relations.

The North's ailing economy shrank 2.3 percent in 2007, following a 1.1 percent fall a year earlier, according to South Korea's central bank. The global economic downturn is expected to further drive down its export volume and aid from the outside
Koh Yu-hwan, a North Korea specialist at Seoul's Dongguk University, expects Pyongyang will try to improve international relations to get resources to rebuild its frail industrial infrastructure.

"The most notable part this year is its commitment to the economy," he said, "In the past, it talked a lot about leader Kim Jong-il and the military-first policy, but here it seems to say the country will restore its national system through its party and rebuild its economy."
The military-first policy, called "songun," was adopted by Kim in 1995, a year after his father and the country's founder Kim Il-sung died at age 82. The younger Kim's ascendancy marked the first-ever father-to-son power transfer in a communist state.
Still, North Korea vowed its unwavering loyalty to leader Kim Jong-il. Rumors of his ill health circulated as Kim went unseen in the public eye for more than 50 days until early October. Seoul and Washington officials believe Kim had a stroke in August and is now recovering. Kim, who turns 67 in February, has not nominated a successor.

"The glorious tradition of engraving an immortal heroic epic by dint of a harmonious whole in which the leader believes in the people and the people trust in and follow their leader absolutely should be inherited firmly," it said.

North Korea did not respond to the South's offer of dialogue. The editorial blamed Seoul for being "steeped in pro-U.S. sycophancy and hostility towards fellow countrymen."
Inter-Korean relations dipped to a record low during South Korean conservative President Lee Myung-bak's first year in office. Pyongyang suspended dialogue, and Seoul shipped no humanitarian aid to the impoverished North.

Unification Ministry spokesman Kim Ho-nyoun said South Korea will continue to offer dialogue.

"The New Year message was the way we expected it," he said. "We call for a conversion of inter-Korean relations. We will continue our efforts to resume inter-Korean talks."
North Korea has issued a joint newspaper editorial on the New Year's day as its policy blueprint since 1995. Some analysts say the message has less authority than before. Until 1994, Kim Il-sung read the New Year message aloud on television and radio.

Banks set guidelines to weed out nonviable builders, shipyards: report

SEOUL, Jan. 1 (Yonhap) -- Corporate restructuring efforts in South Korea are likely to accelerate as authorities will soon start evaluating struggling builders and shipyards before providing financial support for their survival, a local media report said Thursday.

The Korea Federation of Banks, which consists of local banks, has determined a set of guidelines to evaluate business conditions of those companies, the Korea Economic Daily reported, quoting industry sources.

Under the guidelines, creditor banks will categorize local builders and shipyards into four groups -- A, B, C, D. Companies falling into the "C" group will face a debt workout while those in the "D" group will be categorized as "non-viable" businesses and will face bankruptcy procedures, the report showed.

Those in the "B" group, meanwhile, will receive fresh loan support from the banks in return for self-restructuring programs, according to the report.

Evaluations will be done through a task force consisting of officials from local banks, credit appraisers and accounting firms. The process will begin with the top 100 builders and 26 small and medium-sized shipyards, the report said, citing an unidentified official. Officials from the bank association were not reached for comment.

The move comes as concerns are growing that a slowing economy could make things worse for already-struggling companies in the two sectors.

With a huge number of apartments left unsold, many cash-strapped construction firms are striving to service debts taken out during the 2005-2006 housing boom.

South Korean shipyards are also feeling the pinch of the slumping economy and a sharp decline in new orders, along with foreign exchange losses, are eroding their profitability. Some smaller players are facing a severe liquidity squeeze, according to industry watchers.
S. Korean defense minister warns of possible provocation by N. Korea

SEOUL, Jan. 1 (Yonhap) -- Defense Minister Lee Sang-hee urged his troops Thursday to bolster combat readiness for a possible conflict with North Korea especially near the disputed inter-Korean sea border in the Yellow Sea.

"Standing ready to fight is the most beautiful thing for soldiers," Lee said while inspecting the Command of the Second Fleet in Pyeongtaek, 70km south of Seoul, in his first official activity this year.

"I came here first as you operate near the Northern Limit Line (NLL), around which there is the most likely place that North Korea would take a provocative step," he said.

North Korea disputes the de-facto maritime border that was drawn unilaterally by U.S.-led U.N. forces at the end of the Korean War. The waters near the NLL in the Yellow Sea remain a potential flash point.

North Korea's naval boats often infringe the NLL in the hope of replacing the NLL with another border further south. Bloody naval skirmishes occurred in 1999 and 2002.

"Although the best way is to head off the enemy's provocation. In case of failure, however, it is your duty to end a clash in victory as fast as possible and stave off a bigger conflict," the minister stressed.
S. Korea's industrial export shipments plunge in Nov.

SEOUL, Jan. 1 (Yonhap) -- South Korea's industrial shipments for exports plunged in November as overseas demand was sharply dented amid deepening global recession woes, the government said Thursday.

The National Statistical Office (NSO) said that the industrial shipment index for exports fell 12.3 percent in November from a year earlier, the first contraction in nearly 7 years since January 2002. The fall is also the sharpest reduction since January 1990.

The lackluster figure is attributable to slumping exports, which dropped around 19 percent on-year in November, the NSO said.

Shipments of electronics parts, computers, communications equipment and vehicles bound for overseas markets were among the marked decliners, according to the NSO.

Fragile consumer sentiment here also resulted in a decline in shipments for domestic markets. The NSO said that shipments bound for domestic markets fell 14.3 percent in November from a year earlier.

This marked the second straight month of a year-on-year contraction and the sharpest fall in a decade, according to the NSO.

Equity fund investments up in Nov.

SEOUL, Jan. 1 (Yonhap) -- Outstanding equity fund investments grew at a faster pace in November than a month earlier as stock markets seemed to be gaining some stability, data showed Thursday.

According to the data provided by the Assent Management Association of Korea, outstanding investments in equity-fund products through which investors put in a fixed amount of money every month stood at 75.99 trillion won (US$60.35 billion) as of the end of November.

The amount is up 432 billion won from a month earlier, with the monthly increase sharper than a 40.5 billion won rise in the previous month.

Major banks, brokerages and insurers saw more inflows of money into their equity fund products, according to the association. Of them, Mirae Asset ranked first by luring a net 273.2 billion won for its products.

South Korean stocks suffered a highly volatile session throughout last year, raising fears that a further decline could prompt a massive cash exodus from equity fund products, which once helped boost the market above the 2,000-point level.

The Kospi, the nation's benchmark index, lost around 40 percent last year after plunging below 900 points in October. It gained some ground on bargain hunting in recent months, closing the year at 1,124.47.


Banks set guidelines to weed out nonviable builders, shipyards: report

SEOUL, Jan. 1 (Yonhap) -- Corporate restructuring efforts in South Korea are likely to accelerate as authorities will soon start evaluating struggling builders and shipyards before providing financial support for their survival, a local media report said Thursday.

The Korea Federation of Banks, which consists of local banks, has determined a set of guidelines to evaluate business conditions of those companies, the Korea Economic Daily reported, quoting industry sources.

Under the guidelines, creditor banks will categorize local builders and shipyards into four groups -- A, B, C, D. Companies falling into the "C" group will face a debt workout while those in the "D" group will be categorized as "non-viable" businesses and will face bankruptcy procedures, the report showed.

Those in the "B" group, meanwhile, will receive fresh loan support from the banks in return for self-restructuring programs, according to the report.

Evaluations will be done through a task force consisting of officials from local banks, credit appraisers and accounting firms. The process will begin with the top 100 builders and 26 small and medium-sized shipyards, the report said, citing an unidentified official. Officials from the bank association were not reached for comment.

The move comes as concerns are growing that a slowing economy could make things worse for already-struggling companies in the two sectors.

With a huge number of apartments left unsold, many cash-strapped construction firms are striving to service debts taken out during the 2005-2006 housing boom.

South Korean shipyards are also feeling the pinch of the slumping economy and a sharp decline in new orders, along with foreign exchange losses, are eroding their profitability. Some smaller players are facing a severe liquidity squeeze, according to industry watchers.

(2nd LD) Assembly deadlock to continue into New Year

SEOUL, Dec. 31 (Yonhap) -- Opposition lawmakers exhausted from a nearly week-long sit-in at the National Assembly were poised to greet the New Year at the legislature as party leaders failed to reconcile differences over President Lee Myung-bak's economic bills.

Concerns of physical clashes between the two sides have been escalating after the Assembly chief invoked his authority late Tuesday night, requesting assistance from law enforcement authorities to break up the occupation of the assembly hall by the main opposition so that pending bills can be put to a vote.

In an effort to prevent a repeat of violent clashes that erupted last week over the ruling party's unilateral vote to introduce a free trade pact with the United States, Assembly Speaker Kim Hyong-o offered to mediate a meeting between party leaders.

Both parties turned down the proposal, however, with the ruling party agitated over the ongoing occupation of the parliament and the main opposition demanding several market-oriented bills be scrapped.

The liberal Democratic Party (DP) is seeking to prevent the ruling Grand National Party (GNP) from passing a US$30 billion free trade agreement (FTA) with Washington and other bills it calls "pro-conglomerate," including media ownership deregulation. The party says South Korea should wait until the U.S. Congress approves the FTA before voting on the legislation.

Occupying the main chamber is the party's last-ditch attempt to stop its ruling rival, which controls 172 seats in the 299-member unicameral house, from unilaterally passing the bills. The DP holds 83 seats.

"There will be no negotiations until the opposition party ends its sit-in," said GNP leader Park Hee-tae.

The ruling party officially requested the Assembly speaker to use his authority in putting 85 "key bills" it has selected to a vote and immediately forcing out any lawmakers who objected.

More time will be needed before the final decision is made, an aide to Assembly Speaker Kim said, adding that the "last thing we need is violence on the first day of the New Year."
More than 100 security guards mobilized by the Assembly speaker have been blockading the parliament since late Tuesday and are waiting for orders to forcefully expel opposition party lawmakers who have been occupying the legislature's main chamber for six consecutive days.

Nearly all members of the main opposition DP plan to camp out at the parliament all night, conducting drills to prevent themselves from being "dragged out" by guards. A "human chain" will be formed around the speaker's podium to stop him from opening a vote, the party said.

The confrontation threatens to deepen South Korea's economic paralysis as the country is on the verge of its first recession in a decade. Dozens of crucial economic rescue plans have been held hostage amid the partisan conflict.
Of the more than 2,600 bills that have been introduced to the legislature since it convened in May, fewer than 300 have been voted on so far. Some 300 will be automatically discarded at the end of 2008.



S. Korean president starts new year with visit to national cemetery

SEOUL, Jan. 1 (Yonhap) -- President Lee Myung-bak visited the national cemetery in Seoul Thursday in his first official act of the new year, asking people to have "hope and courage."
Lee was accompanied by Prime Minister Han Seung-soo, 15 other Cabinet members and senior presidential aides.

After paying tribute to fallen soldiers and others who were killed during their service to the country, Lee wrote in a visitors' book, "Let's all go forward with hope and courage in the New Year."
The group then headed to the presidential office and had rice cake soup, Korea's traditional New Year's Day dish, according to Cheong Wa Dae officials.

After breakfast, Prime Minister Han and the others joined in the cheer, "A crisis is an opportunity," they added. Han was apparently referring to the economic trouble now gripping South Korea and other nations.

The president plans to give pep talks over phone to South Korean soldiers abroad and officials at the soon-to-be-opened Naro Space Center in Koheung, South Jeolla Province.
Moody's "Asia Spotlight: Export Economies Can Bounce Back"

Seoul (Korea Newswire) December 31, 2008 01:22 PM -- Asian economies dependent on exports feel the cold winds blowing from Europe and North America. Exporters of electronics in particular feel the global slowing, as demand for high-end consumer electronics and high-tech production equipment is sensitive to changes in income. Recent large declines in exports and industrial production are nevertheless nothing new as the downturn in export-oriented economies is similar to that of 2001. Not until we observe a sustained slump will we be able to say this downturn will be postwar Asia's worst.

Last week, Japan's foreign trade data and industrial production figures for November booked significant declines. Foreign trade for the first 20 days of November was down 26.7% year over year, while industrial production for November was down 13.3% compared with one year ago. Taiwan's data were also poor; industrial production during November was down 28.4% year over year. Earlier this month, Taiwanese exports had booked a 23.3% annual fall during November, South Korea had reported an 18.3% drop, and Singapore’s non-oil exports were down 17.5%.

The figures speak for themselves: Exports are down by a fifth to a quarter in these economies, which depend so heavily on exports to sustain their economic growth and development. One begins to wonder whether economic growth will fizzle and never return to solid rates. A look at data from previous downturns reassures us that sharp declines in exports and industrial production are not unprecedented and that growth can resume in these economies, even after export growth is slashed.

During the 2001 recession, Japanese exports dropped 14.5% year over year that December, and industrial production lost 13.7% during the same month. Though data for November 2008 show a sharp slowdown, industrial production declined slightly less than in 2001. True, the current drop in exports is severe, but the data series is volatile, so overseas shipments could rebound in coming months.

Though the contractions of November 2008 are large, they are matched by those of the previous recession. Exports and industrial production in Taiwan contracted during November 2008 to the same degree as in late 2001. Industrial production had also contracted in excess of 20% on an annual basis in late 2001. Exports dropped a stunning 44.9% year on year in August 2001. For South Korea and Singapore, the story is the same: Though today’s declines in exports are large, they are exceeded by those of the 2001 slowdown.

However painful the current slowdown may be, it is not unprecedented. The bursting of the dotcom bubble in 2001 caused declines in exports and industrial production similar to those caused by the bursting of the housing bubble. Large losses in wealth reduce consumer spending, in particular on luxury items such as electronics. Economies that specialize in consumer electronics, components used in electronic devices, and high-tech producer goods are doomed to suffer from a sudden drop in demand for their goods. Yet, within a year of their low point early this decade, these economies had recovered and were thriving.

Time will tell if the export-oriented economies will recover as swiftly this time as they did after the dotcom bubble burst. Not until we observe a prolonged slump in demand for electronics can we say that the downturn which commenced in 2008 will be much worse.

Tine Olsen is an economist in the Sydney office of Moody's Economy.com. Tine covers Taiwan, Greece and Israel. She has worked for the International Monetary Fund, the Copenhagen Stock Exchange, and the Danish Ministry of Foreign Affairs. She holds a Ph.D. from Monash University and an MSc and a BSc from the University of Copenhagen.

Editor’s Note:

To clarify the relationship between Moody's and Moody's Economy.com?both Moody's Investors Service and Moody's Economy.com are subsidiaries of Moody's Corporation. Moody's Economy.com is a separate legal entity to Moody's Investors Service. If sourcing this article please quote Moody's Economy.com.
Asia: Intra−Asian trade in freefall
Mon, Dec 8 2008, 14:12 GMT
by Flemming J. Nielsen
Danske Bank A/S


Based on South Korean trade figures released last week and trade figures released for Taiwan overnight it is possible to get some early indications of the development in trade in November. To be frank, these numbers look terrible.
• In both South Korea and Taiwan exports contracted sharply in November. In both countries export growth plunged to about -20% y/y (see chart 1). This is an early warning that the November numbers are probably going to look terrible. The Chinese trade figures for November are due to be released later this week. Currently the consensus is that China's export growth will slow to 14.9% y/y from 19.2% y/y in October. The November figures for South Korea and Taiwan indicate the Chinese export figures are going to be much weaker.
• Only Taiwan has released November data for exports to different regions. According to these data the recent plunge in exports has to a large degree been driven by a sharp drop in exports to other Asian countries since September. In November exports for other Asian countries were down 28% y/y, while exports to the US and Europe were down 14% y/y and 9% y/y, respectively. Exports to mainland China in November were down a whopping 42% y/y!

These data are consistent with other recent data such as manufacturing PMIs and German new manufacturing orders, indicating an unprecedented fast deterioration in manufacturing activity since September. This will hit Asia particularly hard with Asia being the main manufacturing floor of the global economy and currently there is considerable downside risk for the Asian economie
http://www.fxstreet.com/fundamental/economic-indicators/asia-intraasian-trade-in-freefall/2008-12-08.html

November Export Plunges 18 Percent


Korea’s November export was analyzed to have dropped 18.3 percent year-on-year, posting an all-time high fall rate in seven years since December 2001 (20.4 percent).



However, two-month consecutive trade surplus of $290 million could be achieved with import also plummeting 14.6 percent.



According to the Ministry of Knowledge Economy on Monday, Korea exported $29.26 billion last month and imported $28.96 billion to yield a $297 million monthly trade profit.



November export dove 18.3 percent against last year November, posting a two-digit drop rate since February 2002 (17.5 percent) when export had been sluggish due to the bursting of the U.S. dot-come bubble.



Ship export (35 percent) was the only item that upped year-on-year while all other items recorded minus figures.



Export growth for computers was the dullest at -55 percent, followed by household appliances (-51 percent), semiconductors (-44 percent), petrochemical goods (-37 percent), car parts (-31 percent), wireless communication sets (-26 percent), general machineries (-24 percent), liquid devises (-19 percent), oil goods (-19 percent), textiles (-18 percent), cars (-13 percent) and steel (-2 percent).



Exports to developing nations from November 1st to 20th, which accounts to 70 percent of Korea’s exports, fell 17.5 percent while exports for advanced nations also declined 8.3 percent. Excluding Middle East (30.6 percent), exports to all regions around the world dropped significantly.



Sales to China, which boasts the heaviest export weight for Korea, plunged 27.8 percent, followed by ASEAN (-16.2 percent), Japan (-13.5 percent), EU (-12.5 percent), Oceania (-6.2 percent), U.S. (-6.2 percent) and Central and South America (-5.8 percent).



[Dong-eun Lee / JYJ]
(5th LD) N. Korea vows to denuclearize, rebuild economy in New Year

By Kim Hyun
SEOUL, Jan. 1 (Yonhap) -- North Korea said Thursday that it will rebuild its ailing economy and aim for denuclearization in the New Year, in an apparent signal of its willingness to start afresh with the United States.

In a joint newspaper editorial that summed up policy goals for 2009, Pyongyang continued criticism of Seoul but made no hostile mention of Washington, just three weeks before the inauguration of a new U.S. administration.

"The independent foreign policy of our Republic to denuclearize the Korean Peninsula and defend the peace and security of Northeast Asia and the rest of the world is demonstrating its validity more fully as the days go by," the editorial jointly issued by the North's ruling party, army and youth military said.

Pyongyang sees the inauguration of U.S. President-elect Barack Obama on Jan. 20 as an opportunity to start afresh after eight years of largely sour relations with the outgoing Bush administration.

Six-party talks aimed at denuclearizing North Korea are on hold until Obama takes office. Washington removed Pyongyang from its terrorism blacklist as the talks proceeded in 2008, but the latest round ended without progress in December.

In an apparent gesture to the U.S., the editorial said North Korea "will develop relations with the countries friendly towards us."
It also eschewed Pyongyang's customary accusations of joint military exercises by South Korea and the U.S.

"Different from joint editorials of previous years, it did not throw any criticism against the United States while mentioning the realization of a denuclearized Korean Peninsula," Seoul's Unification Ministry said in a statement.

Pyongyang will continue to uphold its military-first policy, but this year's statement showed an increased focus on the economy -- particularly on feeding its people.

North Korea's harvest slightly increased in 2008, but the U.N. World Food Program says nearly a quarter of its population of 23 million still needs outside food aid.

"To relieve scarcity of food is a pressing problem," the editorial said. "We should concentrate all efforts on hitting this year's target of grain production with the extraordinary determination to solve food problems by our own efforts in any circumstances."
South Korea gave no food and fertilizer aid in 2008, and the suspension will likely continue in the new year due to damaged relations.

The North's ailing economy shrank 2.3 percent in 2007, following a 1.1 percent fall a year earlier, according to South Korea's central bank. The global economic downturn is expected to further drive down its export volume and aid from the outside
Koh Yu-hwan, a North Korea specialist at Seoul's Dongguk University, expects Pyongyang will try to improve international relations to get resources to rebuild its frail industrial infrastructure.

"The most notable part this year is its commitment to the economy," he said, "In the past, it talked a lot about leader Kim Jong-il and the military-first policy, but here it seems to say the country will restore its national system through its party and rebuild its economy."
The military-first policy, called "songun," was adopted by Kim in 1995, a year after his father and the country's founder Kim Il-sung died at age 82. The younger Kim's ascendancy marked the first-ever father-to-son power transfer in a communist state.
Still, North Korea vowed its unwavering loyalty to leader Kim Jong-il. Rumors of his ill health circulated as Kim went unseen in the public eye for more than 50 days until early October. Seoul and Washington officials believe Kim had a stroke in August and is now recovering. Kim, who turns 67 in February, has not nominated a successor.

"The glorious tradition of engraving an immortal heroic epic by dint of a harmonious whole in which the leader believes in the people and the people trust in and follow their leader absolutely should be inherited firmly," it said.

North Korea did not respond to the South's offer of dialogue. The editorial blamed Seoul for being "steeped in pro-U.S. sycophancy and hostility towards fellow countrymen."
Inter-Korean relations dipped to a record low during South Korean conservative President Lee Myung-bak's first year in office. Pyongyang suspended dialogue, and Seoul shipped no humanitarian aid to the impoverished North.

Unification Ministry spokesman Kim Ho-nyoun said South Korea will continue to offer dialogue.

"The New Year message was the way we expected it," he said. "We call for a conversion of inter-Korean relations. We will continue our efforts to resume inter-Korean talks."
North Korea has issued a joint newspaper editorial on the New Year's day as its policy blueprint since 1995. Some analysts say the message has less authority than before. Until 1994, Kim Il-sung read the New Year message aloud on television and radio.

MOSF Forecasts $2 Billion Current Account Surplus for November


Ministry of Strategy and Finance (MOSF) raised its outlook for November current account balance from the previous $1 billion surplus to $2 billion surplus.



MOSF projected in the Green Book on December 4, “November current account balance will illustrate a surplus of approximately $2 billion.” This is double MOSF’s original forecast which had been maintained at $1 billion until the end of November.



A MOSF official explained, “Trade account had originally been considered to balance out but tentative calculations showed November trade balance account to yield $300 million surplus. The outlook was readjusted accordingly.”



Meanwhile, Korea’s October current account balance had recorded $4.91 billion in black-ink backed by rallied travel account and current transfers account.



MOSF also commented on the current economic situation, “Upward trend in prices is slowing down but real indexes, such as production, domestic economy and export, are turning towards negative figures while downturn risk is being expanded due to stagnated world economy.”



The ministry disclosed, “Overall economic contraction is being witnessed at an early stage, such as greatly reduced export. Strengthening financial functions will be promoted to maintain jobs and revitalize the real economy. Meanwhile, enthusiastic policy efforts must be made to lessen difficulties for low-income class and SMEs.”



[Dong-eun Lee / JYJ]
South Korea Oct current account turns to surplus
Wed, Nov 26 2008, 23:22 GMT
http://www.afxnews.com
SEOUL, Nov 27 (Reuters) - South Korea's current account swung to a seasonally adjusted surplus of $3.41 billion in October from a revised $2.65 billion deficit in September, central bank data showed on Thursday.
Before seasonal adjustment, South Korea posted a current account surplus of $4.91 billion in October, compared with a revised $1.35 billion deficit in September, the Bank of Korea said in a statement.
On Tuesday, the finance ministry said October's current account was expected to post a surplus of over $1.5 billion and around $1 billion in November.
For the first 10 months of the year, South Korea produced a seasonally adjusted current account deficit of $7.66 billion, reversing from a $7.72 billion surplus for the same period in 2007 and heading for its first annual deficit in 11 years.
Growing current account deficits, a foreign sell-off in local financial markets and a deepening squeeze in dollar funding have all combined to send the won plunging recently to its lowest level since the 1997-98 Asian financial crisis.
The government has said the sharp falls in oil and raw materials prices since they hit historic highs earlier this year would help South Korea's current account turn back to a surplus in the fourth quarter.
Meanwhile, separate data released by the central bank showed that South Korea's overseas borrowing fell by a net $20.4 billion in October after a net increase of $0.16 billion in September.
South Korea's provisional current account data (balance, seasonally adjusted, in millions of dollars, rounded):
Oct * Sept * Aug
Current account 3,408.6 -2,650.0 -4,804.6
Goods account 2,016.5 -1,632.6 -3,093.7
Services account -431.4 -1,300.3 -1,770.6
Income account 1,216.2 255.7 280.4
Current transfer 607.3 27.2 -220.6
^Capital account -25,530.8 -4,776.7 5,325.4
* revised
^ unadjusted for seasonal patterns
(Reporting by Cheon Jong-woo; Editing by Keiron Henderson) Keywords: KOREA ECONOMY/CURRENT
(jongwoo.cheon@thomsonreuters.com; +82 2 3704 5665; Reuters Messaging;jongwoo.cheon.reuters.com@reuters.net)
[Editorial] Year for Economic Recovery and National Rebuilding

895 words
1 January 2009
Dong-A Ilbo Daily
English
(c) 2009 Dong-A Ilbo Daily. All Right Reserved

A new year has begun. The entire world is at a crossroads in 2009 between overcoming the economic crisis and falling further into a quagmire. Though the Korean economy is not suffering from an accurate illness seen in the 1997 Asian financial crisis, it is certainly not under favorable conditions. When the economy was hit by the crisis 11 years ago, it was relatively easy to receive emergency loans from the International Monetary Fund since only a certain number of Asian countries were undergoing hardship. A boom in the global economy also helped Asian countries overcome the economic turmoil. Sound national finance was also a key factor that helped cure the ailing financial industry.
With economic woes spreading fast all around the globe in both the financial and real economies, Korea’s major export markets such as the United States, China and the European Union are also witnessing a deepening economic slump. Korea posted a double-digit decrease in exports over the same period last year. Given that the size of the domestic market is small, the country cannot overcome the economic crisis unless exports pick up.
More worrisome is that Korea can be the biggest victim of a possible contraction in global trade that occur due to stronger U.S. protectionism. It is also frustrating to see a strong opposition from the two countries’ lawmakers against the ratification of the bilateral free trade agreement, which is sure to be of assistance in overcoming the crisis. It is also important that Korean quickly conclude a free trade agreement with the European Union.
The Korean government`s role is growing increasingly important given the economic crisis. Like other world major economies, Korea also needs dramatic stimulus packages and restructuring. There is no cure-all to create enough jobs while saving all existing businesses and jobs at the same time. Only when state-run and privately owned companies induce rational restructuring in areas with lax management and inefficiency can jobs can be created and competitiveness can be enhanced. According to market principles, the number of jobs increases when companies are allowed to weed out unqualified staff, since it opens up new opportunities to others and makes the job market more flexible.
The number of new jobs will likely fall far short of expectations in the New Year. It is imperative that both management and labor make concessions and weave wisdom together to endure hardships by choosing pay cuts rather than a layoff and sharing jobs.
If the government, politicians and businesses closely cooperate and put their heads together in order to revive the economy and solve the economic hardships of the people, nothing will be impossible. Koreans inherited genes that help them excel in overcoming difficult times. Korea is one of the few countries that have become an industrialized nation based on democracy in just a half century, rising from the ruins of war. Koreans are the ones who have achieved this feat.
Korea must strengthen their social safety net and policies that look after people who are not only ready to face globalization and fierce competition. In the process, however, tension could arise between the haves and have-nots, regular and temporary workers, and large and small companies over the distribution of financial resources and polices. It is important to note that policies that punish big business and the rich for the sake of helping the weak will rather hamper economic growth and cause greater pain to the low-income class.
The Lee Myung-bak administration should clearly explain what it will do to promote national interests and improve the livelihood of the people and understanding. President Lee should also show strong leadership and not hesitate to communicate and embrace his opponents. Only then will more people join in efforts to overcome the economic crisis.
Countries are amassing national potential as much as possible to resolve the economic crisis. Despite this, certain Korean politicians and activists are scattering national strength that should be devoted to economic revival. To those who agitate the Korean people based on groundless accusations and illegal and violent demonstrations, the government must show respect for the law.
2009 should become “the year of Korean restructuring,” during which the country overcomes the economic crisis and normalizes society. There is no sillier thing than fears due to differences in economice difficulty. Depending on action, Korea could join the ranks of advanced nations earlier than planned or remain as a developing country forever. Korea must invest in education that cultivates people of talent and science and technology that will produce a future growth engine even more actively than it did over the economic boom.
Korea should more aggressively invest in its future growth drivers, such as IT, nanotechnology, biotechnology and alternative energy. The four-river redevelopment project should also eventually become an investment for a better future.
Withdrawing is not the only solution to overcome hardship. With the proper political leadership that makes the people unite and join the efforts, Korea can move forward no matter how strong the wind or waves are. Let us pull the boat together with strong determination and have the best hope for the New Year.
Roll up our sleeves once more to make an advanced Korea. The more fearful the future is, the tighter Koreans should hold another staff`s hand.
Document DONGAI0020081231e5110000a


Slowing exports narrow current account surplus November

541 words
31 December 2008
Joins.com
English
(c) 2008 Joins.com.

Korea posted a current account surplus for a second month in November, the central bank said yesterday, raising hopes it could help ease downward pressure on the sliding local currency. The current account surplus reached $2.06 billion in November, down from a revised record $4.75 billion surplus the previous month, the Bank of Korea said in a report. The surplus sharply narrowed as a global economic slump dented exports. In the first 11 months of this year, the country posted a current account shortfall of $7.12 billion. The current account is the broadest measure of trade, service and investment flows into and out of the country. The surplus comes as the Korean currency has declined about 28 percent to the U.S. dollar so far this year. A cumulative shortfall of the current account, coupled with rising overseas debt and sell-offs of local stocks by foreign investors, has been putting downward pressure on the local currency.
The Korean currency closed at 1,259.50 won to the dollar yesterday, up 3.50 won from Monday's close. The BOK predicted that the country's current account will remain in the black in December. 'Although exports are declining as they are hit by a global recession, the country's current account will likely remain in the black as falling oil prices are decreasing imports,' Yang Jae-ryong, head of the central bank's balance of payments statistics team, told a press conference. 'Although the current account surplus halved from the previous month, the worst may have already passed, which could help stabilize the foreign exchange market,' said Chun Chong-woo, a senior economist at SC First Bank. The goods balance posted a surplus of $994.6 million in November, down from a revised $2.63 billion surplus the previous month as exports sharply declined due to the global recession while falling oil prices decreased imports. Customs-cleared exports declined 19 percent year-on-year to $29 billion last month and imports fell 14.9 percent to $28.9 billion. The shortfall of the service account, which includes Korean spending on overseas trips, widened to $130 million in November, compared with a revised $54.8 million a month earlier. The capital account, which tracks cross-border investments, posted a net outflow of $12.1 billion in November, down from a record net outflow of $24.8 billion a month earlier as repayment of foreign loans by local banks decreased amid improving overseas borrowing conditions. Economists, however, remained cautious about faltering exports, which account for about 60 percent of the local economy. 'The narrowed current account surplus raised concerns over falling exports. A global recession has spilled over into emerging markets and it may not be easy for Korea to post a large current account surplus next year as expected,' said Jun Min-kyu, an economist at Korea Investment and Securities Co. The central bank said that the country is expected to log a current account shortfall of $4.5 billion this year, marking the first annual shortfall in 11 years. But next year, the country's current account is expected to swing to the black, reaching around $22 billion, it added. Yonhap
Document JOONAI0020081231e4cv0000w



• Excluding the income account shortfall, however, March`s current account surplus was little changed from January and February, Cho explained, noting Korea`s sales abroad remained robust. (출처: The Korea Herald)
조 국장은 “그러나 소득수지 적자를 제외하면 3월의 경상수지 흑자는 1-2월에 비해 거의 변하지 않았습니다”라고 말하며 우리나라의 수출이 계속 호조를 보이고 있음을 강조했다.
• Widened investment deficits led to a shortfall of $660.7 million in Korea`s capital account, while the current account, which measures the flow of goods, services and money transfers, had a surplus of $2.5 billion. (출처: The Korea Herald)
투자 적자폭 확대로 우리나라의 자본수지는 6억6070만달러의 적자를 기록한 반면 상품, 서비스, 송금 흐름을 보여주는 경상수지는 25억달러의 흑자를 나타냈다.


• In November, customs-cleared exports grew 12.2 percent to $25.89 billion from a year earlier. (출처: The Korea Herald)
11월 통관기준 수출은 258억 9000만불로 1년 전보다 12.2퍼센트가 증가했다.
• Customs-cleared exports grew 6.9 percent year-on-year to $22.97 billion from a year earlier. (출처: The Korea Herald)
수출은 통관 기준으로 전년대비 6.9% 증가한 229억7,000만달러를 기록했다.
• According to a preliminary tally by the Ministry of Commerce, Industry and Energy, customs-cleared exports reached $9.93 billion, compared with $12.01 billion a month ago. (출처: The Korea Herald)
산업자원부의 잠정 집계에 의하면 통관기준 수출액은 99억 3000만불이었는데 전월에는 120억 1000만불이었다.
• Customs-cleared exports showed strong growth for the second consecutive month, despite the strengthened domestic currency against the U.S. dollar, high oil prices, Hurricane Katrina, and strikes at the nation`s two biggest automakers that dented production, the ministry highlighted. (출처: The Korea Herald)
원화 강세, 고유가, 허리케인 카트리아, 국내 최대 규모의 두 자동차업체에서의 파업 등에도 불구하고 통관 기준으로 우리나라의 수출은 2달 연속 견조한 증가세를 기록했다고 산자부는 강조했다.
• Customs-cleared exports expanded 11.2 percent in May from a year earlier to $23.17 billion, compared with a 6.7 percent gain the previous month. (출처: The Korea Herald)
통관 기준 수출은 전월의 6.7퍼센트 증가에 비해 5월에는 전년 동기보다 11.2퍼센트가 늘어난 231억 7000만불이었다.
• In December, customs-cleared exports rose 17.9 percent to $23.27 billion, compared with a 31.3 percent increase the previous year, according to the central bank`s report. (출처: The Korea Herald)
중앙은행의 발표에 따르면 12월에 수출은 통관기준으로 17.9퍼센트가 늘어난 232억 7000만불이었고 전년 같은 기간에는 31.3퍼센트가 늘어났었다.
• Exports were tallied at $21.2 billion on a customs-cleared basis, up 38 percent year-on-year, while imports rose 20 percent to $19.1 billion. (출처: The Korea Herald)
수출은 통관 기준으로 총 212억달러로 전년동월 대비 38% 증가했고 수입은 20% 늘어난 191억달러를 기록했다.
• Exports spiked 37 percent year-on-year to $21.5 billion on a customs-cleared basis, while imports grew 27.4 percent to $18.8 billion. (출처: The Korea Herald)
수출은 작년 4월보다 37%가 증가한 215억달러(통관 기준)에 달했고 수입은 27.4%가 증가한 188억달러로 집계됐다.
• Exports growth will slow to around 22.7 percent year-on-year on a customs-cleared basis, for a yearly growth of 30 percent to total $252 billion, according to the BOK. (출처: The Korea Herald)
한국은행에 따르면 수출증가율은 통관기준으로 전년대비 22.7퍼센트 정도로 감소하여 연간 증가율 30퍼센트에 총 2,520억불에 달할 것이라고 한다.

Gov't Expects $4-Bln Trade Surplus in 4Q

2008-11-24 10:14:38

The government predicts a four-billion-dollar trade surplus in the fourth quarter, despite the economic recession.

In a Sunday meeting chaired by Prime Minister Han Seung-soo to appraise the economic situation, the government said it expects the trade surplus to continue because, although export figures are worsening, imports are also on the decline on falling raw material prices.

Korea's debt-to-gross domestic product ratio stands at 33 percent, much lower than the 60-to-70 percent levels in other countries. The government says the nation still has fiscal and currency leverage it can use to decrease the severity of the financial situation.

Officials say the government is allocating loans to small businesses at an increased rate and has promised to simplify loan application procedures.
Exports Post 9 Months of Double-Digit Growth

2006-11-01 13:41:14

The country's exports have posted double-digit growth for nine straight months, but the overall trade surplus has slackened compared to last year.

A Commerce Ministry report says that exports grew eleven-point-five percent year-on-year to 28 billion U.S. dollars in October for a two-point-five billion-dollar trade surplus.

The October growth comes despite having only 20-point-five working days for the month, two days shorter than average due to the Chuseok holiday. But the daily import and export figure was up 20 percent from last year to reach an all-time high.

Shipments from January to October totaled two-hundred-66 billion dollars, up 14 percent from last year, but the overall trade surplus dropped 42 percent, plunging to eleven-point-five billion.

The ministry noted sturdy growth despite the holidays and predicted that this year's exports would top three-hundred-20 billion dollars, some two billion more than in previous forecasts.

The yearly trade surplus is also expected to reach 12 billion after topping eleven-point-five billion in October.
Korea’s Trade Surplus Peaks to $1.2 Billion in October


Korea’s trade balance rallied into black-ink in five months with October balance achieving a $1.2 billion surplus.



The stagnated world’s real economy stemmed from the U.S. financial crisis barely managed exports to hang onto a two-digit growth but plunged oil prices also pulled down import growths, yielding this year’s second monthly surplus.



According to the Ministry of Knowledge Economy (MKE) on November 3, Korea exported $37.89 billion last month while importing $36.67 billion to record a monthly trade surplus of $1.22 billion.



Consequently, Korea’s accumulated trade deficit from January to October this year may have declined to $13.45 billion but attaining the annual outlook of $6 billion deficit which had been revised by MKE last month still seems difficult.



October exports only upped 10.0 percent year-on-year, reaching half the 22.7 percent growth rate that had been posted from January to September this year. Imports also rose 12.0 percent to be significantly dulled than the 34.2 percent increase that had been achieved between January and September.



Among key exported items, cars (-14 percent) suffered a two-digit decrease due to economic depressions of advanced markets such as the U.S. and Europe while exports for semiconductors (-26 percent), household electronics (-28 percent) and computers (-37 percent) also dropped with vacuum in Christmas demands.



The depressed real economy also lowered export growths for textiles (6 percent), auto parts (6 percent) and general machineries (4 percent) to one-digit figures.