News / Asia

    S. Korean Economy Strong Despite North's Transition

    Body of North Korean leader Kim Jong Il lies in memorial palace Pyongyang, Dec. 20, 2011.
    Body of North Korean leader Kim Jong Il lies in memorial palace Pyongyang, Dec. 20, 2011.
    Jason Strother

    As North Korea undergoes a tightly guarded political transition following the death of Kim Jong Il, many South Koreans are closely watching for signs of instability. The government in Seoul is taking steps to shore up the economy and reassure investors, and so far it appears to be working.

    South Korean regulators are keeping an eye on food prices and other basic commodities on sale at markets.

    In 1994, after the death of North Korea’s founding leader, Kim Il Sung, the uncertainty in North Korea translated into anxiety in the South. Fearing the worst, South Koreans went on panic-buying sprees, stockpiling basic staples.

    But the passing of Kim Jong Il has led to a different situation, says Lim Soo-ho, an analyst at the Samsung Economic Research Institute in Seoul.

    "Many people believed that the South Korean economy would suffer a significant shock after the death of Kim Jong Il," Lim says via translator. But the impact was limited to only two days and now the market is stable again. Lacking any other provocations or instability, he says he does not see any other impact from Kim’s death.

    Lim says consumers here are not too worried about perceived instability in North Korea. South Koreans, he says, believe the situation always returns to normal with little or no impact to their lives, adding that South Korean government is not provoking North Korea and reassuring its own public about the situation.

    The South Korean stock index, the KOSPI, did drop by a few percentage points immediately following the news of Kim’s death on Dec. 19. But Lim says it recovered once the Moody’s credit rating agency said that South Korea’s rating would not be affected.

    The foreign business community in Seoul also feels confident in the economy here, says Tom Coyner, president of Soft Landing Consulting. He says, compared to other unexpected provocations from North Korea, like the 2010 shelling of the South’s Yeonpyeong Island, Kim Jong Il’s death did not make any noticeable difference in Korea’s business climate.

    “The business community usually looks at things normally a year and a half to a three-year basis," says Coyner. "Korea seems to be a country that operates on a crisis-du-jour basis, so we have Kim Jong Il dying, but gosh that’s not a big unexpected event, we knew he was in poor health and the business environment is taking it in stride.”

    But Coyner says given the little information available about Kim Jong Un, the son of the late ruler who is expected to take over, investors and other business leaders will have to wait and see how things play out.

    Other observers say Kim Jong Un, who received education in Switzerland, might be more likely to open up North Korea’s economy than his predecessors. And that is good news for South Korea.

    Hank Ahn, investments commissioner at Korea Trade-Investment Promotion Agency (KOTRA), a government agency that promotes doing business in South Korea, thinks it is likely the north will open up.

    “It's quite natural we can assume that North Korea will eventually open up its economy to the outside world," he says. "So it’s better for us: We can reduce our unification costs when the two countries are reunified, even if we don't know when. And besides, we can export our products to North Korea as well.”

    For now, opening North Korea’s economy will be a lower priority to more immediate concerns. The nation is in an official mourning period and all energy is focused on preparing for Kim Jong Il’s funeral on Dec. 28.

    You May Like

    Mother of IS Supporter: Son Was Peaceful, 'Role Model'

    Somali-American Abdirizak Mohamed Warsame pleaded guilty Thursday to charges of conspiring to provide material support to Islamic State militants

    Factions Shift as Civilians Die in Syrian War

    Scenario likely only to further confuse military situation on ground and potentially worsen humanitarian crisis that already has grown to epic proportions

    Presidential Hopefuls Woo Minorities, Evangelicals

    Four GOP candidates to speak at forum at Bob Jones University in Greenville, South Carolina

    This forum has been closed.
    Comments
         
    There are no comments in this forum. Be first and add one

    Featured Videos

    Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
    Two-thirds of World Faces Water Shortagei
    X
    February 12, 2016 7:31 PM
    Four billion people — or two out of every three on the planet — do not have enough water to meet their basic needs. That is far greater than previously thought, according to a new study that presents a more accurate picture of the problem. As VOA's Rosanne Skirble reports, the findings will help policymakers and the public craft solutions to address the threat.
    Video

    Video Two-thirds of World Faces Water Shortage

    Four billion people — or two out of every three on the planet — do not have enough water to meet their basic needs. That is far greater than previously thought, according to a new study that presents a more accurate picture of the problem. As VOA's Rosanne Skirble reports, the findings will help policymakers and the public craft solutions to address the threat.
    Video

    Video Gateway to Mecca: Historical Old Jeddah

    Local leader Sami Nawar's family has been in the Old City of Jeddah for hundreds of years and takes us on a tour of this ancient route to Mecca, also believed to be the final resting place of Adam's wife, Eve.
    Video

    Video New Technology Aims to Bring Election Transparency to Uganda

    A team of recent graduates from Uganda’s Makerere University has created a mobile application designed to help monitor elections and expose possible rigging. The developers say the app, called E-Poll, will make Uganda's democratic process fairer. From Kampala, VOA's Serginho Roosblad reports.
    Video

    Video As Refugees Perish, Greek Graveyards Fill

    Aid workers on the Greek island of Lesbos say they are struggling to bury the increasing number of bodies of refugees that have been recovered or washed up ashore in recent months.  The graveyards are all full, they say, yet as tens of thousands of people clamor to get out of Syria, it is clear refugees will still be coming in record numbers. For VOA, Hamada Elrasam reports from Lesbos, Greece.
    Video

    Video Russia Bristles at NATO Expansion in E. Europe

    Russian Foreign Minister Sergei Lavrov is meeting Friday with the head of NATO after the Western military alliance and the United States announced plans for the biggest military build-up in Europe since the Cold War. Russia has called NATO's moves a threat to stability in Europe. But NATO says the troop rotations and equipment are aimed at reassuring allies concerned about Russia as VOA's Daniel Schearf reports from Moscow.
    Video

    Video To Fight Zika, Scientists Target Mosquitoes

    Mosquitoes strike again. The Zika virus outbreak is just the latest headline-grabbing epidemic carried by these biting pests, but researchers are fighting back with new ways to control them. VOA's Steve Baragona takes a look.
    Video

    Video Mosul Refugees Talk About Life Under IS

    A top U.S. intelligence official told Congress this week that a planned Iraqi-led operation to re-take the city of Mosul from Islamic State militants is unlikely to take place this year. IS took over the city in June 2014, and for the past year and a half, Mosul residents have been held captive under its rule. VOA's Zana Omar talked to some families who managed to escape. Bronwyn Benito narrates his report.
    Video

    Video Scientists Make Progress Toward Better Diabetes Treatment, Cure

    Scientists at two of the top U.S. universities say they have made significant advances in their quest to find a more efficient treatment for diabetes and eventually a cure. According to the International Diabetes Federation, the disease affects more than 370 million people worldwide. VOA’s George Putic reports.
    Video

    Video NATO to Target Migrant Smugglers

    NATO has announced plans to send warships to the Aegean Sea to target migrant smugglers in the alliance's most direct intervention so far since a wave of people began trying to reach European shores.
    Video

    Video Russia's Catholics, Orthodox Hopeful on Historic Pope-Patriarch Meeting

    Russia's Catholic minority has welcomed an historic first meeting Friday in Cuba between the Pope and the Patriarch of Russia's dominant Orthodox Church. The Orthodox Church split with Rome in 1054 and analysts say politics, both church and state, have been driving the relationship in the centuries since. VOA's Daniel Schearf reports from Moscow.
    Video

    Video Used Books Get a New Life on the Streets of Lagos

    Used booksellers are importing books from abroad and selling them on the streets of Africa's largest city. What‘s popular with readers may surprise you. Chris Stein reports from Lagos.
    Video

    Video After NH Primaries All Eyes on South Carolina

    After Tuesday's primary in New Hampshire, US presidential candidates swiftly turned to the next election coming up in South Carolina. The so-called “first-in-the-South” poll may help further narrow down the field of candidates. Zlatica Hoke reports.
    Video

    Video Smartphone Helps Grow Vegetables

    One day, you may be using your smartphone to grow your vegetables. A Taipei-based company has developed a farm cube — a small, enclosed ecosystem designed to grow plants indoors. The environment inside is automatically adjusted by the cube, but it can also be controlled through an app. VOA's Deborah Block has more on the gardening system.
    Video

    Video Exhibit Turns da Vinci’s Drawings Into Real Objects

    In addition to being a successful artist, Renaissance genius Leonardo da Vinci designed many practical machines, some of which are still in use today, although in different forms. But a number of his projects were never realized — until today. VOA’s George Putic reports.