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Korea: New inflow of foreign direct investment (FDI)

Presentation by H.E. Amb . CHOI Jong-hyun 14 August 2012 NIAA Symposium on the Occasion of The 67 th Independence Day of the Republic of Korea. Korea: New inflow of foreign direct investment (FDI) . Contents. Korea in a Nutshell Korean Economy 101 Korea-Nigeria Relations

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Korea: New inflow of foreign direct investment (FDI)

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  1. Presentation by H.E. Amb. CHOI Jong-hyun 14 August 2012 NIAA Symposium on the Occasion of The 67th Independence Day of the Republic of Korea Korea: New inflow of foreign direct investment (FDI)

  2. Contents • Korea in a Nutshell • Korean Economy 101 • Korea-Nigeria Relations • Korean-Nigeria Economic & Trade Relations • Korean Businesses in Nigeria • Korean Investment in Nigeria • Suggestions for Closer Economic Partnership • Summary: Korea is

  3. Korea In a Nutshell • Population: 50 million • Landmass: 96,920 km² • 1/8 of Nigeria’s land territory • From a war-torn, post-colony situation… • Japanese colonial rule: 1910~1945 • Korean War: 1950~53 • Became a G-20 Member and a Donor country • Hosted G-20(2010)/Nuclear Security Summit (2012) • Produced UN Secretary-General

  4. Korean Economy 101 • GDP: USD 1.11 trillion (15th in the world) • Per capita: USD 23,749 • 7th largest trading nation in the world • Trade volume: USD 1.07 trillion(2011) • Global leader in various industries • Automobile, cell phone, semi-conductor, ship building, IT, steel, petro-chemical, construction, …

  5. Korea-Nigeria Relations • Diplomatic ties established in 1980 • The only Korean Cultural Centre in Africa • VIP visits increased since 2000 • President Chun (1982) • President Obasanjo (00, 06)  Pre. Roh (06) • President Jonathan: Mar. 2012 (NSS) • Countless Ministerial visits since 2011~ • Defense, Environment, Culture, Power, Trade and Investment, Youth, …

  6. KOR-NIG Economic & Trade Relations • Nig: Korea’s No.1 or 2 export destination in Africa • Compete with South Africa for that status • Trade balance: change in favor of Nigeria this year • Korean exports: petrochemical products , automobiles, AV equip., cell phones • Nigerian exports: Natural gas (95%), copper, lead (unit: $m)

  7. Korean Businesses in Nigeria • Construction: Daewoo, Hyundai, Samsung, … • Active partnerships with IOCs • Energy sector: KNOC, KEPCO • KNOC (Korea National Oil Company) • KEPCO (Korea Electric and Power Company) • Electronics: Samsung, LG • Trade: Hyundai, Daewoo, STX, … • Other areas: furniture, plastics, cosmetics (wig)

  8. Korean Investment in Nigeria (1) • Korean FDI in Nigeria is less than USD 200 million in total • Total FDI inAfrica minimal, compared with that in Asia or South America • 2.8 bn(1.5%) vs36 bn(China, 19%), 20.7 bn(SE Asia, 11%) or 15.2 bn(S America, 8%) • Recent big investment in a few cases (e.g. Madagascar No.1 FDI destination in Africa-one bn) • Nigeria : Relative increase in 2007-08, due to package deal on OPL 321/323 in 2006 • Reduced to 3-6 million per year, following dispute over the deal • Possible Explanation • Africa in general not high on agenda of Korean businesses? • Political transition / security challenges? • Dispute over OPL 321/323?(negative spill-over effect)

  9. Korean Investment in Nigeria (2) (unit: $m)

  10. Suggestions for Closer Economic Partnership • Brighter Future • Hyped-up interests from Korea • Began to perceive Africa as rising partners • Continent from ‘Hopeless’ to ‘Hopeful’ • Nigeria: Big potential to tap into • Biggest market in Africa • Many promising signs despite security challenges • Strong commitment to implement Vision 20:2020 • Sound economic management • Sustained economic growth in recent years

  11. Suggestions for Closer Economic Partnership • Suggestions • Continued & coordinated efforts to improve business climate • Confidence-building Measures • Amicable resolution of dispute over OPL issues • Speedy ratification of Avoidance of Double Taxation Treaty (signed 2006; still not in force) • Businesses thrive on predictability, transparency & stability

  12. Summary: Korea is… • Reliable partner for Transformation Agenda • Can support Nigeria’s endeavour to achieve Vision 20:2020 • We do not avoid challenge • Unique partner for Development • Eager to share its economic development experience & knowhow • Inter-government cooperation on the rise • Would like to seek further cooperation among business communities of Nigeria and Korea

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