Tuesday, September 22, 2009

Goldman Sachs evaluates North Korea?

If the nay sayers do not see movement on dealing with the DPRK [Democratic People's Republic of Korea aka North Korea], the mighty investment house of Goldman Sachs' analyst suddenly discover the economic clout, Pyongyang would bring to a re unified Korean peninsula. Goldman Sachs smells money in Korea. Suddenly, in spite of its planned economy, the economic strong suit of North Korea suddenly emerges like a genie out long time imprisoned in a bottle.
The mighty Wall Street investment banking house's conclusion that one Korea would surpass the Germany and Japan in growth in the next 30-40 years. Now, that's hedging one's bets!
Pointing out the DPRK mineral wealth which the ROC [Republic of Korea aka South Korea] lacks, North Korea would benefit from the lessons Seoul's first world economy can teach it.

Goldman Sachs is peddling warmed over rice. And it is engaging in gimcrack research on what anyone with mild curiosity could copy from the 'Encyclopedia Britannica'. Until now, for the US
the DPRK has been a 'pariah state', and one unworthy of attention. This has dramatically changed, the more especially owing to Washington's inept diplomacy in discussions with Pyongyang on a host of questions, not the least being its nuclear programme.

Within the last fortnight the US state department announced 'quietly' that the Obama administration will engage in direct talks with North Korea; for its part the DPRK will soon rejoin the six party talks in Beijing which he swore that it would never do.

Citizen Bill Clinton 'private mission of mercy' has opened the floodgates of diplomatic activity on issues with North Korea. And South Korea's hard line president Lee Myung bak has soften his approach to the North, in line with Washington's change of heart.

Even the doyen of business magazines 'Fortune' in its 15 September 2009 issue carried a long article on 'the man who loves North Korea', a certain Mr. Kim, originally from the ROC now living in the US, who is building a private science and technology university in Pyongyang, which the articles says will also award MBAs.

Goldman Sachs' analysis talks of the weaknesses of the North Korean ecovnomy which the pundits and talking heads have been predicting complete collapse for the last 15 years, but it does not track the flexibility that Pyongyang has initiated or overtaken by severe famine which loosened coontrol of family farming and open air 'free' markets, nor the slow reforms put in place. It fails to appreciate that the fiercely nationalistic North Korean state acts in its own interests on its own terms.

Nonetheless, the Goldman Sachs 'report' is a bellwether for the big bracket banks and business to look seriously at investing in North Korea, and of course, with the long term view of re unifying the divided Korean peninsula.

Guam Diary wonders how much the house that Goldman and Sachs built pays attention to history and the political realities of both Koreas. But you can count on one thing, where Goldman Sachs sticks it nose in, there is lots of money that it is hoping to be made!

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