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Vol. 8 No. 14 WE COVER THE WORLD Wednesday February 4, 2009  |
Korea Inc. Jumps In
To Assuage Slump
Dateline Korea—As The World Bank predicts worldwide
growth to edge up 0.9 percent this year, down from the 2.5 percent gain estimated
for the previous year, in South Korea the state-run Korea Development Institute
has just forecast South Korea's gross domestic product (GDP) will gain just
0.7 percent for the whole of 2009.
Such a development in conjunction with the liquidity
crunch caused by the U.S. financial crisis has seriously affected South Korea's
ability to export goods and to attract new foreign direct investment (FDI),
crucial for economic growth.
Export volume of $371US.5 billion in 2007 accounted
for 38.3 percent of South Korea's $969.9 billion GDP in 2007.
The need to fuel exports and increase investments
took on more urgency following the announcement by the Bank of Korea that
fourth quarter exports plummeted 11.9 percent on-quarter in the steepest drop
since Seoul started tallying in 1970.
The contraction in exports caused companies to cut back on investment, which
declined 16.1 percent on-quarter, with industrial production and domestic
consumption falling accordingly.
"The decline in exports and related repercussions
is creating unprecedented challenges that require preemptive measures by the
government," said Knowledge Economy Minister Lee Youn-ho.
Seoul said it expects growth to move up 1 percent
on-year to $426.7 billion in 2009, down from its previously set target of
$450 billion, that it now admits cannot be reached.
However some insiders believe, even the adjusted
target may be hard to reach.
But now comes word that the South Korean government
is pulling out all the stops and will take an active role in bolstering exports
and attracting more foreign investment to help overcome economic challenges
facing the country.
The ministry in charge of industry, commerce
and energy said it will lead a special inter-governmental task force charged
with making policies and responding quickly to market demands.
The task force—made up of officials from
the Small and Medium Business Administration, regional governments, umbrella
business groups and the Korea Trade-Investment Promotion Agency – are
being tasked to work together to avert a possible collapse of the country's
export infrastructure and help companies expand into relatively untapped emerging
markets in the Middle East and Latin America, while increasing market shares
in advanced economies.
The task force is being designed from the outset
to help particular industries expand their overseas market presence.
The depreciation of the Korean Won versus the
dollar is one tool that planners here feel can be used to raise price competitiveness
of locally made goods abroad.
But as part of this effort, the government has
increased funds set aside to cover export insurance by 40 trillion Won to
170 trillion this year.
The funds can cover export insurance and be
given as emergency relief to cash-strapped small and medium-sized enterprises.
Other measures call for helping companies take
part in trade fairs and hosting events to allow foreign buyers to meet manufacturers.
The ministry said it will spend 70 percent of
the 140 billion Won in state funds earmarked for export marketing support
in the first half of 2009.
"Key among the government's efforts will
be attracting M&A money as South Korea implements restructuring of the
public sector and seeks new owners of companies that received bailout funds
during the Asian financial crises of 1998," said Moon Sung-wook, head
of the ministry's foreign investment policy division.
"The shock of the global slump is affecting
the national economy more seriously than previously anticipated, and since
it may be hard for conditions to rebound on their own, the government should
take steps to reduce the blow," said Kwon Soon-woo, director of macroeconomics
research at the Samsung Economic Research Institute.
Other private-sector economists from Hyundai
Research Institute said Seoul must use all available means to help local companies
deal with the crisis, but without violating international trade rules.
They pointed out that despite weak domestic
demand, South Korea's growth grew 4-5 percent from 2004 largely as the result
of robust exports.
Gordon Feller
Two Airbus A319 departed
early Monday morning from Milan Malpensa to Barcelona and Paris CDG—
the maiden flights of newly established Lufthansa Italia. Until next
April the Italian offspring of LH will knit their network tighter
by adding six more European destinations to their flights to and from
Malpensa Airport. These are London Heathrow,
Madrid, Lisbon, Brussels, Budapest and Bucharest. The expansion of
the Italian subsidiary (100%) of German carrier Deutsche Lufthansa
AG will be backboned by six A319 that LH announced to base at Milan
Malpensa.
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Long suffering companies and individuals
who have found doing business with the airports of India difficult should
welcome India’s new aviation regulator - the Airports Economic Regulatory
Authority (AERA) that comes into effect by March 31 of this year with the
mandate to allow everyone in the aviation business here to know what to expect
across a whole range of subjects.
According to a Ministry of Transport official
Air Cargo News FlyingTypers spoke with:
"AERA has to be in place by March 31,"
the official said.
“Once AERA becomes operational, Indian
airports will have a tariff regulator in line with international practices.
“AERA's prime objective is to create a
level-playing field and foster healthy competition between airports, encourage
investment in airport facilities, regulate fares and protect passenger interests.”
The authority will approve the tariff structure—especially
airport charges, including air navigation charges—and will monitor the
infrastructure standards at airports.
Charges for navigation services that are levied
by the Airport Authority of India (AAI) will also be subject to AERA's approval.
Aera will also ensure protection of users, and
issue guidelines for efficient and economical operations of notified airports.
AERA will set tariffs once in five years. But
it can, in the public interest, amend the tariff from time to time during
this period.
The authority will also have powers to penalize
any government agency, airport authorities and airline operators for failure
to comply with its orders and directions.
Abu Dhabi Speeds Relief
“This conference
will provide excellent networking opportunities including one to one
meetings with UN and World Food Program (WFP) aviation officers to
discuss practical details of humanitarian operations and social functions,”
Cesar Arroyo who heads the WFP Aviation Safety Unit said.
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Consequently, the airline left a vacuum at Milan’s International
Airport, which LH Italia intends to fill step by step.
International
humanitarian governmental organizations and non-governmental organizations
taking part include the European Commission’s Humanitarian Aid
Office (ECHO), the International Committee of the Red Cross, Médecins
Sans Frontières, Mission Aviation Fellowship and others. 
operations
within the airport's security perimeter. "ICSFs play an important
part in helping small- and medium-sized Indirect Air Carriers meet the
new requirements..," said TSA's Air Cargo Division General Manager
Ed Kelly .
. . Air Cargo News FlyingTypers learned that
SAS in a battle for survival is selling
all their daughter companies except BLUE 1, while getting rid of 14
short haul and 2 long haul routes and cutting 8,600-9,000 jobs. SAS
is also planning to out source or close ground handling and part of
its cargo department we are also told .
. . Elsewhere in case somebody needs to tell you, The
Airports Council International 
(ACI)
said that cargo traffic is likely to keep weakening in the next six
months, reflecting a darkening global trade and business picture. "Further
deterioration in the air freight sector can be expected over the next
two quarters, reflecting the constricted global trade and commerce environment
in which we are operating," ACI World Director General Angela
Gittens said . . . United
Airlines that managed to lose $1.3 billion last year is to launch
the first-ever nonstop service linking Washington,
D.C. with Moscow's Red Square from
March 29 . . . JetBlue
Airways also awash in red ink for 2008 added a daily service
between Orlando, Florida and Bogota,
Colombia, its first route to South America .
. . In Dubai the first
phase of the world's biggest airport Dubai World
Central, because of “delays in construction”, is
now scheduled to 
open
in 2010 instead of this year due to “a number of factors mostly
relating to the readiness of infrastructure and the capability of Dubai
International to more than cope with existing traffic,” Dubai
Airports CEO Paul Griffiths said .
. . Maputo International Airport
that serves Mozambique in Africa, opened
a new cargo terminal built by the Chinese company An
Hui Foreign Economic Construction Corporation that started operations
on Monday. New facility includes electronic systems and control software
for the registration of cargo . . . 
MNX.
Tom formerly held the position of Senior Vice President – Services
for the Americas and Asia Pacific and is based at MNX’s Los Angeles
Headquarters. He has over 25 years of experience in the air express industry.