Korea's Lost Opportunity

SEOUL: Hyundai Motors is ready for prime time in Korea's auto business after formally acquiring majority stakes in both Kia Motors and Asia Motors for $951 million on Tuesday. But the sale of two Korean car companies to another Korean car company reflects a sad truth about the country's -- and the region's -- prognosis for recovery from its current doldrums: South Korea is still scared of the global economy.

When parts of the bankrupted Kia Group were auctioned off in October, many economists wanted to see the Ford Motor Co. win the bidding. "Letting Kia go to a foreign corporation would have signaled that Korea was ready to accelerate growth by opening itself up to foreign direct investment," says TIME senior economics reporter Bernard Baumohl. But Korea apparently wasn't ready -- Ford's name mysteriously disappeared from the list of suitors. Now Hyundai is now one of the Big Two in Korea's more-insulated-than-ever auto industry, and would-be foreign direct investors -- whose dollars are badly needed -- have another reason to keep taking their business elsewhere.