Doing Business in the DPRK: A Personal Perspective

May 2nd, 2012
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Recent signs of progress and reform slowly emerging from within the DPRK such as the “leap day deal” have been hampered by the North Korea’s Unha-3 rocket launch and its increasing vitriol targeted at South Korean President Lee Myung-bak.  The fluid and often hostile nature of politics on the Korean Peninsula, along with strict international sanctions, has meant that foreign economic investment into the DPRK has been extremely limited for some time.

But to assume business in the DPRK is impossible or impractical is simply incorrect. In this interview, NKNews speaks to Roger Barrett, Marketing manager of Korea Business Consultants: a businessman who has been involved in trade and investment in the DPRK since the 1990’s. Having weathered the difficulties inherent in such business, and having been witness to many of the extraordinary events that have taken place in that country over the last two decades, Barrett offers his own unique insight here on how he came to do business in the DPRK, how such business is carried out, and what he thinks the future holds for this intriguing country. In Barrett’s view, the horizon is a little sunnier now for the DPRK – and the time is right for investment.

NKNEWS: When and why did you decide that you wanted to do business in the DPRK?

Roger Barrett: In 1993 I was sent to set up the Hong Kong Telecom office in South Korea. The first week I was there a guy came up to me and whispered furtively, ‘would Hong Kong Telecom be interested in doing business in…’ then he looked over his shoulder… ‘North Korea?’ I replied that we’d be very interested in a project up there. And that’s how it got started: My first visit was in January 1994.

NKNEWS: We hear a lot about the DPRK’s poor reputation for commercial reliability – meaning many companies refuse to grant them credit. Do you find North Koreans easy to deal with? Do they make good business partners and customers?

RB: Comparatively, yes, because they really do want to do business. In fact they really must do business. They have a lot of resources and need help developing them: through technological assistance, financing or just normal business development.

The Koreans, on a very human level, appreciate foreigners who see through the politics and demonization: they just want to get on with their jobs. This is especially true of North Koreans with jobs in foreigner-facing positions: for instance, those working at the Ministry of Foreign Trade, or Ministry of Foreign Affairs.

I have never personally come across some of things they have been accused of (like trading counterfeit dollars). Instead I would argue they are very easy to do business with, because they are so focussed on acquiring what their country needs.

As for the sort of partners they are, I have found them to be reliable, as they put good feeling and sustainable business ahead of personal needs.

NKNEWS: Many investors are scared away from doing business in the DPRK because they fear that

a)      they will, by injecting cash into the DPRK economy, prop up the regime there

b)    because the prevailing perception of North Korea is so overwhelmingly negative, that their own reputation as a company will suffer if they are seen to do business there.

What is your response to these views?

RB: This point about ‘propping up a regime’ is a distraction from the main issue, which is that every country, family and person needs social and personal development. This comes, by necessity, from injecting money into the economy which then percolates down through the people. The sanctions interrupt this flow and development: they do harm to the government, that’s true, but they also hurt the people. It is, in my view, partly why there is unnecessary suffering in rural areas: natural disasters and poor agricultural planning certainly play a role, but it is irresponsible to ignore the very real impact the sanctions are having on the North Korean people’s quality of life. Doing business in the DPRK will stimulate the economy, lead to economic progress and, very probably, to a warming of relations between DPRK and its neighbours. Reluctance on the part of businesses to invest in the country will – and has – lead to economic stagnation, which will do more harm than good in the long term.

NKNEWS: The response to DPRK aggression and nuclear activity has been to impose strict sanctions on the country. How have these affected business and what options remain open for potential investors?

RB: Words like, nuclear, belligerent, militaristic and hostile appear over and over again in reference to North Korea, leading many to believe that the only economic areas North Korea cares about are its military and nuclear sectors. The reality is that food, furniture, clothing and IT manufacture are absolutely crucial: KBC has dealt with numerous companies who specialize in these areas. There are a whole host of other industries which have very great potential: mining, manufacturing and renewable energy to name a few. These are all industries which have potential for development without harming anybody’s interests. For businesses from countries not prohibited from doing business in the DPRK (such as the US, Japan and South Korea currently), these sectors present excellent opportunities for investment as there is currently so little competition.

NKNEWS: What is KBC’s role in attracting or conducting business in the DPRK?

RB: We specialize in successful market entry for foreign companies from everywhere except those forbidden by their own governments. We provide a comprehensive and customized package of information and insight as well as introductions to projects and partners. We also arrange visits to Pyongyang with a view to securing investment. We offer a kind of turn-key package for those who wish to pursue successful business, trade and investment into the market.

NKNEWS: And finally: The last few months have been turbulent for the DPRK, after the death of the DPRK’s Dear Leader Kim Jong-il and the failed “Leap Year” Deal.  With over twenty years experience in the country you have witnessed and observed similar periods of potential change in the DPRK. What do you think the future holds for the DPRK?

RB: I believe that steady and sustainable change is around the corner for the DPRK. This can be speeded up by the creation of more job opportunities for the people if industry and the economy are allowed and encouraged to expand in the way that the DPRK’s neighbours have achieved in the last two or three decades. This can be achieved through good leadership, international education and understanding as a platform for progress. Rome wasn’t built in a day: changes and progress in terms of normal economic development don’t happen overnight. But the DPRK has a lot going for it: the population has a near 100% literacy rate; they are industrious and have a resource rich nation and modern energy solutions. We shouldn’t underestimate the power of the people’s pride: in the DPRK it is a real motivating factor, and could propel the nation forwards after the forthcoming 100th anniversary celebration. Combined with the potential for a new sunshine policy when the South Korean government changes and replaces the current president, Lee Myung-bak, we could see real progress over the next couple of years. The country could prosper in the future.

For more information on KBC, please contact [email protected]

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