Doing Business in NK Easier Than Thought
Korea Times
Jane Han
10/3/2007
A Stalinist regime, erratic regulations and language barriers may be topping a long list of reasons why business should not be done in Pyongyang, but a longtime advisor to companies operating in North Korea dismissed those concerns, as he welcomed the ongoing inter-Korean summit as a positive sign for investors all over the world.
“The summit offers encouragement to investors everywhere because it’s reassuring to see that the two Koreas are talking to each other with a long term vision in mind,” Roger Barrett, the British founder of Beijing-based Korea Business Consultants, said in a Korea Times interview Wednesday. “The summit and sustainability go together.”
Although the ongoing summit that began Tuesday will make a positive impact toward Pyongyang investment, Barrett _ currently working with about 15 to 20 companies actively in business in the North _ said the economic outcome is being underestimated and the Western media failed to link the summit with a business boost and investor confidence.
“Imagine President Bush took the heads of GE and Microsoft to Iraq _ that would show strong signs,” he said, implying that President Roh’s special entourage of 18 local CEOs wasn’t given adequate attention.
The managing director of the non-political, non-partisan business consultancy servicing clients mainly from Europe, Southeast Asia, South America and South Africa said the summit and the recent six-party talks can robustly trigger investment in North Korea’s wide-ranging businesses.
“The country needs demystification because there are so many misconceptions,” he said, explaining that perceptions and sanctions are the biggest problems companies must overcome at first.
Barrett admitted that North Korea’s nuclear test last October brought financial sanctions that scared many companies away and the number of inquiries generally dropped, but said a lot of the situations can be worked around _ as it goes in any other country.
“It’s easier than people think to do legitimate business in North Korea. It’s not as tough as China,” he said, referring to the fact that many investors worldwide still jump into China’s economy. “When it comes to North Korea, people continue to speculate and guess.”
Barrett, who frequently travels to Pyongyang with investors, said the central government’s support is strong.
“Is there any country in the world that doesn’t want foreign investment?” he said, emphasizing that the obvious answer goes the same for North Korea. “Many people think that the government regulations keep changing because it does change _ it’s constantly improving.”
Better communication, expanded infrastructure and stable energy and power supplies are some of the factors that need improvement, said Barrett, who has specialized in foreign investors entering the Pyongyang market for the past decade.
Among the some 200 foreign-invested companies operating in the Stalinist state, he said mining, mineral, metals and manufacturing are the most popular business sectors.
“A majority of the investors who start a business end up staying, as they enjoy the benefits of being one of the first starters in Pyongyang,” Barrett said, adding that cost-effective labor and natural resources are two of the biggest plusses.
“Come spring and autumn, flights going out from Beijing to North Korea are full,” he said. “The country and business environment are definitely more normal than people think,”
