Korea.net : The official website of the Republic of Korea

Korea recorded a surplus of 27.65 billion dollars in 2011. The current account, the sum of the balance between exports and imports, registered a surplus of 3.96 billion dollars for December 2011, having been in the black for 22 consecutive months since March last year.

According to a report on the balance of payments issued by the Bank of Korea on January 30, Korea has kept the balance in the black for 14 years. The import and export of goods registered a surplus of USD 3.85 billion thanks to favorable exports, notably steel products and passenger cars. However, the import and export of services shifted to a USD 0.21 billion deficit, as the deficits in the travel and the business service accounts increased.

Meanwhile, direct investment recorded a net outflow of USD 0.84 billion, down from USD 2.08 dollars in the previous month, as outward investment decreased and inward investment by foreign investors increased.

Some concerns are being raised because the nation is expected to post a trade deficit in January.

“In 2010, the current account registered a surplus of USD 29.39 billion yet in January and February in the same year it recorded a deficit,” said Kim Yeong-bae from the Bank of Korea. “We’re not too worried about the results from this January.”

The Bank of Korea expects the current account to have a surplus of USD 13 billion for this year.

Meanwhile, the net barter terms of trade, the relative price of exports against the price of imports, has decreased since the third quarter of 2010. This downturn will continue, the Bank of Korea said. If the price of exports decreases or slightly increases when the price of imports greatly increases, the net barter terms of trade goes down.

Another influence on the net barter terms of trade is the decrease in the price of IT products -- the main export products of Korea --, while the import price of raw materials and oil increases.

By Jessica Seoyoung Choi
Korea.net Staff Writer

Social enterprises in Korea now can receive financial support from the Small and Medium Business Administration (SMBA).

The SMBA, along with the Credit Guarantee Foundation and the Small and Medium Industry Bank, recently established a special guarantee for social enterprises certified by the Ministry of Employment and Labor.

Social enterprises are companies that apply business strategies to the pursuit of philanthropic goals by offering jobs to the needy, welfare services, or other activities to improve the quality of life of local citizens.

The SMBA revised the Framework Act on Small and Medium Enterprises in June last year to set the foundation of institutional support for social enterprises. Under the revised act, it included social enterprises as small and medium-sized companies.

According to the special guarantee, social enterprises can apply for a maximum fund of 400 million won. For non-profit social
enterprises, a 100% guarantee along with 3.7% fixed interest is applied, while a 90% guarantee and 4.6% fixed interest apply to for-profit social enterprises.

Although the effectiveness of social enterprises' accomplishment of philanthropic goals will be reflected in a credit assessment, the screening process for borrowing funds can be reduced if the amount of support a company requests is less than 50 million won.

"To help the healthy development of social companies, the newly introduced business disclosure system will provide systemic business consulting services and help improve the transparency of business,” an official from the SMBA said.

By Jessica Seoyoung Choi
Korea.net Staff Writer