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Business Developments in Asia Offer Hope for 2004 - 2003-12-22


South Korea's central bank warns of a threatening credit card debt crisis, as the country's largest credit card company is being sold December 31.

South Korea's top banker Park Seung says the country's credit card debt problem is serious and may be worse than published figures suggests.

At the end of October, the country's eight credit card companies held nearly $6 billion of outstanding bad loans, equal to 12 percent of their total assets. Mr. Park says the figure might be 20-30 percent higher if refinanced loans were included. But he is optimistic that the problem will ease early next year.

Next week, LG Card, the country's largest credit card company, is to be auctioned off to its eight creditors. The successful bidder is expected to extend fresh loans to the company, which would later be converted to equity. The ailing company faces default on millions of dollars in loans despite an earlier bailout package from its parent company, LG, one of South Korea's biggest conglomerates.

In Hong Kong, the unemployment rate has dropped to 7.5 percent in the three months ending in November. Financial Secretary Henry Tang notes that the jobless rate is now back to its level prior to the outbreak of Severe Acute Respiratory Syndrome (SARS), which crippled many businesses.

"I believe this is because there is increased confidence that the future economy is going to be reasonably well and so therefore, jobs are being created in order to cater to for an increased demand," he said.

In July, the unemployment rate hit a record of 8.7 percent as many hotels, restaurants and shops laid off workers. Those businesses suffered because the SARS outbreak kept tourists away from the city.

Many U.S. investors in Pakistan say they will increase their investment in the country over the next 12 months. In a survey by the American Business Council in Pakistan, 93 percent of its members feel domestic economic conditions have improved. Pakistan's economy is expected to grow 5.3 percent this fiscal year.

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