NKorea’s Economy is the Focus Now
- President Kim shifts to Economy, ditches Nuclear testing
President Kim Jong Un’s suspension of NKorean nuclear tests has economic focus.
Kim’s statement at a ruling party meeting Friday includes a pledge to seek a “favorable” international environment for economic development so that he can put the economy “on an upward spiral track.”
It means he is seeking the help of other countries for developing his economy, including the lifting of trade, financial and energy sanctions that hardened every time NKorea detonated a nuclear bomb.
The Big Q: Can NKorea could emulate the kind of economic success that SKorea has achieved?
The Big A: NKorea is viewed as a wildcard and frontier market that could offer rewards for the business community because of its central location in a booming region encompassing China, Japan and South Korea.
“Everything about North Korea spells potential,” says Kim Young-hui, “North Korea can be a bridge linking the peninsula to as far as Europe via China. Imagine how much cargo could flow on that Asian highway.”
China has been hoarding the rare earths and other minerals in NKorea, estimated to be worth as much as $6-T, North Korea’s reserves of Gold, copper, zinc, coal, magnesite and molybdenite could attract buyers from countries other than China, allowing Kim to diversify his sources of income if he opens up his country.
The nation of 25-M people also provides a labor force that remains largely untapped. SKorea has shown that a business model combining its capital and know-how with NKorean labor can work when it ran an industrial park in the NKorean border City of Gaeseong.
NKorea’s isolation has rendered SKorea as an Island in the world of commerce.
If it opens, it could win transportation fees by allowing SKorea to export its goods to the rest of the world by land. SKorean President Moon Jae-in, set to meet with Kim on 27 April, has already suggested his country could receive Nat Gas supplies from Russia through NKorea while cargo flows to Europe.
That means building roads and other infrastructure in NKorea.
Shares of South Korean builders and cement makers rose earlier this week on hopes for business with NKorea, sending Hyundai Engineering & Construction Co. Ltd. as much as 9.5% higher on 8 April.
A thaw in relations may reopen the cross-border tours that stopped in Y 2008.
President Kim’s promise to halt nuclear tests is still far away from US and SKorean demands that all nuclear programs be halted.
Kim fears for the lack of a nuclear deterrent, and for a flow of information that could turn his people against him.
“Whether Kim can be North Korea’s Deng Xiaoping will depend on how the international community can guarantee its security for denuclearizing and offer a chance for economic development,” said Cheong Seong-chang, a North Korea researcher at South Korea’s Sejong Institute.