By 2014, there will be a new technology that allows marine shrimp farming in the middle of the Sahara desert. South Korea is the main leader of this project, as it agreed to funnel its technology and capital into the desert-based cultivation of shrimp.
This shrimp farming project is part of the economic cooperation partnership between Korea and Algeria, and the success of the project can further cement bilateral relations. The shrimp farming project in Algeria's Saharan desert had officially begun on May 20th, said the Ministry of Food, Agriculture, Forestry and Fisheries (MIFAFF).
Shrimps are popular food ingredients for high-end dishes in the region, and prices generally run steep.
The Korean government has enlisted the help of the National Fisheries Research & Development Institute (NFRD) and the Korea International Cooperation Agency (KOICA) to supply manpower and technology to build a shrimp farm in the middle of the world's largest desert.
Algeria's portion of the Sahara desert has an extensive underground water source beneath its sand layers, with a salt concentration of 4~5%. This will facilitate replication of the marine environment for the shrimp farm.
The project consists of building a research center and facilitating technology transfer. The commercially produced shrimps may be able to hit the markets by 2014, at the earliest.
The success of bringing marine farming, which usually takes place in rivers or oceans, to the world's largest desert will also help further the reputation of Korea as the main hand behind the Saharan miracle.
The government lowered its 2011 economic growth estimate by half a percentage point to 4.5 percent because of higher-than-expected energy prices and growing uncertainties in the global economy.
It raised its inflation forecast by a full percentage point to 4 percent.
The main economic policy goal for the second half of 2011 will be to fight inflation, the government said.
Explaining why the growth forecast was cut, Minister of Strategy and Finance Bahk Jae-wan said, "It is because we're firm on fighting inflation. Our fiscal policy is not on frontloading government spending, not like last year. "Because our economy heavily depends on trade, we had to reflect a slow recovery in the global economy," Bahk said. "But it is only a forecast and if we work together, we can bring the figure higher."
The Finance Ministry said it will maintain tight fiscal spending to control market liquidity and avoid fuelling inflation.
The government forecast is now closer to that of Korea's central bank, the International Monetary Fund and major investment banks. Both the Bank of Korea and the IMF predicted 4.5 percent growth and the Organization for Economic Cooperation and Development predicted 4.6 percent. In terms of inflation, the government's 4 percent estimate is now higher than the BOK's 3.9 percent but lower than the IMF's 4.3 percent and the OECD's 4.2 percent.
"It is more realistic, but even 4.5 percent growth will not be easy, though not entirely impossible," said Lee Geun-tae, a senior researcher at LG Economic Research Institute. "The global economic outlook has been downgraded due to inflationary pressure. International crude oil and food prices are still high although they subsided a little."Economic plans for the second half mostly consist of microeconomic policies, and without major changes in the external environment, the government's choices seem to be limited."
The Finance Ministry predicted faster economic growth and slower inflation in the second half as negative factors, such as a high crude oil price, foot-and-mouth disease and unfavorable weather conditions, will likely abate or disappear in the second half.
On the topic of boosting domestic spending, Bahk praised Samsung Group's decision to provide its employees with gift certificates that can be used domestically before the vacation season and said, "It is very desirable. I hope such efforts will spread in our society."
Public utility rates will be raised gradually, Bahk said. The plans to normalize utility rates will be unveiled next month, he said.
Minister of Knowledge Economy Choi Joong-kyung said there is no plan to cut taxes on oil although the ministry is in discussions with the Finance Ministry on lowering tariffs on crude oil imports. Choi urged oil refineries to keep offering a 100 won ($0.09) discount on gasoline and diesel prices, which were expected to end July 7. "It started with a good motive," he said of the discount, which was only supposed to last three months, "Oil refineries will earn the public's love if they continue with good intentions."
Among major policy changes for the second half of the year, the government will ease requirements for welfare recipients and their families.
The government will reform laws to close loopholes related to donations and inheritances at conglomerates. Some conglomerates founded privately held companies in which the founders' heirs and heiresses are major shareholders. Then the groups' affiliates outsourced businesses to the companies, increasing their share values and allowing heirs and heiresses to amass fortunes. The government and the ruling party decided to close the tax loopholes for those companies in July.
To boost the property market, the government will ease regulations on building new apartments as part of urban renewal. To cool an overheated property market in 2006, the government levied taxes on those developments. It will also allow new apartment buyers to sell their homes within three years of purchase, relaxed from the current five years.
Health insurance payouts for serious diseases such as cancer and diabetes will increase. The government will also help delivery men obtain accident insurance. Tax incentives will be offered to induce employment rather than capital investment.
Consumers visiting their nearest grocery store today will be the first to notice the effects of the free trade agreement with the European Union that kicks in today.
Retailers are discounting much of their wine stock equivalent to the tariff to give consumers a taste of what's in store for them when tariff-free goods fill their shelves. And in the coming weeks, supermarket prices will fall in varying degrees as tariff-free or reduced-tariff goods are brought in. Prices will fall for an array of products, including tea, coffee, pasta, almonds, pork belly, chocolate, tequila and vodka.
Wine prices will drop an average of 11 percent today. At the recent Wine Expo in France, Lotte Mart announced plans to expand its selection by 10 brands. Homeplus agreed with its mother company, Tesco, to increase its wine lineup by almost 40 percent. "Although the products currently being sold in the market have already been imported [and were exposed to tariffs], we have made the decision to lower prices since consumers have high expectations on the July 1 date," said an official from Keumyang International, a foreign wine and liquor importer.
The FTA has been years in the making. The two sides embarked on negotiations in May 2007. After eight rounds of negotiations in Brussels and Seoul, a final agreement was reached in July 2009. Then in October of last year, the two sides officially signed off on the pact.
Today marks provisional ratification of the deal, meaning that 99 percent of the agreement will go into effect immediately. After the pact is signed by all 27 EU member nations, it will go into full effect. The deal will cut tariffs by 99 percent on Korean exports to the EU over the next three years, while tariffs on EU imports to Korea will be slashed 96 percent.
The trade pact will shave a noticeable amount of money off consumers' receipts. Tariffs on imported tea, coffee, pasta and almonds will be wiped out immediately. And since the tariff for European tea was currently 40 percent as of yesterday, Korean consumers might be saying "tea time" more often.
The price of pork belly has become burdensome in Korea recently but when tariff-free European pork reaches butchers, consumers will see immediate savings of up to 2.5 percent, which will extend to 25 percent in the next decade, falling 2.5 percent each year.
Consumers will also save on big-ticket items, especially imported automobiles as tariffs are gradually reduced.
The biggest winners
Korean companies will benefit from preferred access to the largest economic trade zone in the world.
In particular, Korea's automobile industry will see some of the biggest benefits, as the 8 percent tariff imposed on Korean made vehicles will be wiped out over five years, while the same will happen for the 10 percent tariff imposed on vehicles made in EU nations that are imported to Korea.
As for Korean exports, vehicles equal to or exceeding 1,500 cubic centimeters (1.5 liters) will have tariffs wiped out in three years, while those with less than 1,500cc will need to wait five years. The 8 percent tariff on vehicle parts will be wiped out immediately, creating more opportunities for Korean companies to enter the EU market.
Industry experts expect the added price competitiveness to help Korean automakers to increase their market share in the European market. The Korea Institute for International Economic Policy expects exports from the auto sector to increase by $1.4 billion this year.
In Korea, import carmakers got a head start when they cut prices equivalent to tariff cuts weeks ago. Volvo, Mercedez-Benz and Peugeot have lowered their prices, while BMW, Volkswagen and Audi are planning to follow suit.
"The trade industry welcomes the ratification of the Korea-EU FTA. It's more significant than existing FTAs, since it includes the globally leading economic zone," said Sakong Il, chairman of the Korea International Trade Association. "Even with the importance of the EU market, Korean imports only took up 1 percent of all of the EU's imports last year, and we hope that the FTA helps more Korean products to be made available in the EU market, as well as boosting Korea's trade volume to exceed $1 trillion."
The biggest losers
The trade deal will not benefit everyone. Korea's agricultural and cosmetics industries are expected to struggle to compete with cheaper, and in many cases, better products.
Europe's big three cosmetics companies - Sephora, Douglas and Marionnaud - might make life difficult for Korean cosmetics companies. But Korean brands say they are not worried since the tariff reductions will be gradual. And the Korean agricultural industry, which has struggled to modernize and raise efficiency to keep costs down, will receive government support to help it compete.
The government agreed to support the agricultural and fisheries industry to the tune of 21.1 trillion won ($19.8 billion won) over the next 10 years, while Seoul will pony up 2.2 trillion won over the same period to support the livestock, cosmetics and medical instrument industries.
Experts forecast exports of pork, dairy and stock farm products will increase by $7 million, while imports will rise $37.5 million. "The FTA with the EU, the largest economic zone and an important partner for Korea, will create an opportunity to increase investments and trade and strengthen the partnership between the two sides," said the Ministry of Foreign Affairs and Trade through a statement yesterday. "We will continue to promote and explain the benefits of the Korea-EU FTA and support our companies to fully utilize the FTA."Experts warn that while the FTA will create new opportunities for international trade, companies, especially small ones, face significant disadvantages compared to multinational corporations
- Ministry forecasts hitting milestone in Nov., making Korea 9th to do so
The government said yesterday that it expects the country will achieve its trade target of $1 trillion this year, which would make Korea the world's ninth economy to reach the milestone.
"Though the country's exports will slow down because of a decelerating U.S. economy and possible further monetary tightening in China, Korea will be able to reach its target of $1 trillion in trade volume this year," Han Jin-hyun, director general for trade at the Ministry of Knowledge Economy, told reporters yesterday.
Earlier this year, the ministry raised its target for exports from $513 billion to $557 billion, while increasing its import forecast from $488 billion to $528 billion. It also rose its trade surplus forecast to $29 billion from $25 billion. The ministry expects Korea to surpass the $1 trillion mark sometime in late November.
Despite external shocks in the first half, such as the massive Japanese earthquake in March as well as rising international oil prices, Korea's overall trade volume reached a record-high $533.4 billion. Exports rose 24.4 percent year-on-year to $275.4 billion, while imports gained 26.6 percent to $258 billion. The six-month trade surplus was $17.4 billion.
In June, $48.2 billion of goods and services were exported, while imports totaled $44.9 billion, surging 14.5 percent and 27.4 percent, respectively.
The ministry attributes the country's robust exports in the January-June period to high demand for Korea's petrochemicals, ships and automobiles, of which shipments surged on-year by 71.8 percent, 29.5 percent, and 25.1 percent, respectively.
In particular, record sales by Hyundai Motor and Kia Motors contributed greatly to the country's overall export volume. According to the two automakers yesterday, Hyundai sold a record 1.95 million cars in the first half, which is a 10.6 percent on-year increase, while Kia's sales jumped 25.3 percent over the same period to a six-month high of 1.24 million units.
However, overseas shipments of information technology goods fell on-year in the first half. Outbound panel shipments dropped 4.8 percent on-year, and computers fell 7.8 percent.
By region, Korea's exports to Japan rose the most, increasing 49.9 percent in the first half, followed by Asean nations (up 38.1 percent), the United States (up 20.1 percent), the European Union (up 19.3 percent), and China (up 16.6 percent).
Imports are driven by demand for crude oil, which rose by 46.8 percent on-year in the first half, while gas demand increased 26.9 percent, and coal demand shot up 46.4 percent.
Korea's trade target of $1 trillion comes amid lingering concerns for the global economy in the second half.
The ministry expects the country's exports will be driven by high overseas demand in automobiles as well as increased IT orders. The import volume of crude oil, petrochemical products, coal, steel and gas for the upcoming months is seen as remaining high.
The Korea International Trade Association (KITA) recently expressed confidence that the country will join the top-nine countries in the world in trade this year: the United States, Germany, China, Japan, France, Italy, United Kingdom and the Netherlands. Korea's trade volume reached a record of $823 billion last year.
According to KITA, when Korea surpasses $1 trillion in trade this year, it will have taken 6 years to go from $500 billion to $1 trillion, while the average for the other countries was 8.4 years.
Today, more than three out of 10 Koreans who subscribe to landline phone services use what is called Voice over Internet Protocol (VoIP), or Internet telephony.
Internet telephony emerged as telecom companies, faced with the stagnant landline phone market, were looking for a breakthrough.
According to the Korea Communications Commission yesterday, the number of Internet telephony subscribers broke the 10 million mark at the end of last month - about five and a half years after the service was introduced in Korea in 2006.
The biggest charm of Internet telephony has been its affordable rates. Internet telephony rates are 80 percent cheaper for intercity calls, 20 percent lower for calls to mobile phones and 95 percent cheaper for international calls.
Yet it took Internet telephony some time to catch on. After all, it took just a year and four months for the number of smartphone subscribers to surpass 10 million in Korea.
There were complications with the service at first, the KCC admitted, such as bad connections and the mandatory use of the 070 prefix.
In 2006, there were only 330,000 subscribers and the following year, 610,000 - accounting for a mere 1.4 percent and 2.6 percent of all landline phone subscribers in the country.
The KCC belatedly acknowledged people's reluctance to accept the 070 prefix - which was often mistaken for spam because telemarketers' numbers usually begin with the same or a similar prefix. In 2008, it announced that Internet telephony customers would no longer have to change their phone numbers.
The regulator says that was the main driver behind the recent surge in Internet telephony subscribers.
"Internet telephony is now Koreans' daily communications medium," the KCC said in a statement, adding that it expects the number of subscribers to reach 11 million by the end of the year. "We will continue to offer various services to VoIP users to alleviate the burden of communications fees."
- 61 percent of retailers will reduce prices to reflect a decrease in tariffs
More than 60 percent of Korean retailers plan to lower prices of imports from the European Union (EU) following the implementation of a bilateral free trade deal, a poll showed yesterday.
According to the survey of 619 retailers, wholesalers and manufacturers by the Korea Chamber of Commerce and Industry (KCCI), 61.3 percent of the retailers said that they will reduce prices of EU imports to reflect the decrease in tariffs eliminated or lowered by the free trade agreement (FTA) that took effect on July 1.
Nearly 50 percent of the wholesalers surveyed also said they will cut prices, with 50.3 percent of the manufacturers polled saying they will do the same.
The Korea-EU FTA calls for abolishing or phasing out tariffs on 96 percent of EU goods and 99 percent of Korean goods within three years after the accord takes effect.
The KCCI survey showed that 69.6 percent of the respondents believed imports of EU products would register a big increase as a result of the implementation of the FTA. "The lowering or elimination of tariffs will lead to increased imports and tougher competition with local products, contributing to price stability and giving consumer spending a shot in the arm," said the KCCI.
Korea's consumer prices surged 4.4 percent in June from a year earlier, quickening from the previous month's 4.1 percent gain.
The state-run Korea Institute for International Economic Policy said in a recent report that the FTA would help boost Korea's exports by $11 billion and its economic growth by 5.6 percent.
Trade between the 27-member economic bloc and Korea totaled $92.2 billion last year, rising around 17 percent from 2009.
Korea aims to increase its market share in the EU to 3 percent within three years.
In a radio interview, Trade Minister Kim Jong-hoon said increasing market share from 2.6 percent at present is possible since the FTA gives local businesses an edge over rivals in other countries. "It could take up to three years for rival countries vying for the EU market to have an FTA in place, which allows Korean companies a head start to grab the market," Kim said.
The accord, which took effect on Friday, is the most ambitious trade deal that Korea has ever finalized, and is the first of its kind between an East Asian country and the EU.
Seoul has said that the FTA could help two-way trade with the 27-member economic bloc go up as much as 20 percent in the long run.
Kim said that as of July 1, 76.6 percent of all tariffs levied by the EU on Korean products have been abolished, which would exert positive influence on trade. In addition, Kim said that while there is some concern of EU-made cars making inroads into the local market, such a development could be offset by a rise in locally made car exports.
Vice Minister for Industrial Affairs and Global Industrial Cooperation Moon Jae-do traveled to Jakarta last week for the fourth Korea-Indonesia Energy Forum.
The forum was an occasion to advance energy partnerships and explore new opportunities for cooperation. Vice Minister Moon pointed to energy and resources as a key sector in which stronger partnerships will significantly rev up the Indonesian economy.
"Korea and Indonesia already have a very successful mineral resources and oil field partnership," the Vice Minister said in his congratulatory speech. "Now it is time to build on what we have achieved, intensify ongoing cooperation, and strengthen our cooperative ties with future projects in mind."
Possible areas of cooperation include overseas oil and gas projects, the establishment of natural gas distribution networks, and the development of mines in Indonesia. Korea also wants to work with Indonesia to make its mining sector more eco-friendly and to increase the use of renewables, especially photovoltaic energy.
Indonesia is one of Korea's foremost energy partners, with ties that date back to 1979. After holding 22 consultations over nearly 30 years, in 2007 the two countries decided to establish an annual Energy Forum and engage in broader discussions.
Korea's economy continues to face a high level of inflation despite continued improvements in employment and overall economic situations, a finance ministry report said yesterday.
External uncertainties such as the lingering fiscal crisis in Europe remain high, so the government will keep a close tab on factors at home and abroad, according to the Ministry of Strategy and Finance.
"We are still faced with a high level of inflation, although overall economic and employment continue to recover," the ministry said. "We also have to pay close attention to external uncertainties, such as the fiscal crisis in Europe and a possible slowdown in major economies."
The assessment comes as Korea struggles with rising inflation, fueled by higher oil and commodity prices. The government twice announced a "war" against inflation this year. Korea's consumer prices have continued to rise.
Last month, the nation's consumer price index, a major gauge of inflation, jumped 4.4 percent from a year earlier, exceeding the government's increased annual inflation target of 4 percent for the sixth straight month.
Last week, the government hiked its 2011 inflation target from 3 percent to 4 percent, while lowering its growth outlook from 5 percent to 4.5 percent.
Finance Minister Bahk Jae-wan told reporters that the downward revision of economic growth can be understood as "our strong will to bring inflation under control."
The report reaffirmed that the government's top priority should be to tame inflation. It will also work hard to strengthen its fundamentals for sustainable economic growth.
Office of Commercial Affairs, Royal Thai Embassy in Korea
Source : http://www.depthai.go.th