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Weapons of Mass Destruction (WMD)

INTRO: The new thaw is relations between North and 
South Korea is stirring interest in the global 
business community. In the past few months North Korea 
has emerged from decades of isolation - slowly
opening itself to foreign influences and business 
executives hope foreign investors.  Hyun-Sung Khang 
looks at the prospects for making money in the world's 
most reclusive state.
            /// ACT OF CHEERING, UNDER AND HOLD ///
Ecstatic crowds greeted the South Korean President, 
Kim Dae-jung when he arrived in Pyongyang for his 
unprecedented summit with Kim Jong Il in June.
            /// BRING UP CHEERING AND OUT ///
Global investors were looking at the crowds also -- 
with a more commercial eye. Jeffrey Jones, President 
of the American Chamber of Commerce in South Korea, 
says that North Korean is one of the last untapped
markets in the world.
            /// JONES ACT ///
The opportunities to invest at this point are wide 
open because there's not much in there.  There are 
very few foreign companies, which are operating. They 
have a relatively large population of approximately 25
million people, and an economy which is not developed 
at all.  In terms of investment opportunities, it's 
white page waiting to be written.
            /// END ACT ///
This Coca Cola commercial jingle heard on televisions 
and radios throughout South Korea could soon be heard 
in the North as well. Following the inter-Korea summit 
in June, Coca Cola - that icon of Western capitalism - 
delivered a symbolic truckload of the fizzy drink
to North Korea.
Neil Drewett, of the advertising agency Ogilvy and 
Mather, says if the North does decide to do business 
with the outside world, multinational companies will 
lead the way.
            /// DREWETT ACT ///
Companies like Coca Cola and Proctor and Gamble like 
to be early entrants into any developing economy, 
because they are always looking for new opportunities 
for growth.  They are looking for opportunities for 
manufacture.  And also companies in the area of 
consumer goods operate in a very competitive way 
against each other.  It's very likely that if a 
Proctor and Gamble went into North Korea, a Unilever 
would follow. If a Coca cola went into North Korea, a 
Pepsi would follow, that's the competitive set of 
large multinationals.
            /// END ACT ///
Any would-be foreign investor into North Korea may 
well work hand-in-hand with one of South Korea's large 
industrial conglomerates, otherwise known as the 
"chaebols".  The chaebols have been a cornerstone of 
South Korea's economic growth in the last fifty years, 
but are now facing challenges from the Seoul 
government, which wants to see greater market 
competition.  As Neil Drewett says, while the 
authority of the chaebols may be reduced in the 
South, their role could well grow across the border in 
the North.
            /// DREWETT ACT TWO ///
We are talking about Koreans working with other 
Koreans and the model of development in the 1960s and 
1970s is very Confucian. It is based on hierarchy and 
it's based on a command economy.
            /// END ACT ///
Despite the North's new open attitude, companies are 
aware of the many obstacles to entering the North 
Korean market. David O'Rear of the Economist Group 
points out the hurdles.
            /// O'REAR ACT ///
Like pioneers crossing the American Continent, there's 
no law, there's no infrastructure, there are no banks, 
there are no lawyers, there are no accountants. 
However, there is a very, a very large, very hostile
bureaucracy that is going to have to be dealt with.
            /// END ACT ///
It is these difficulties which make foreign companies 
hesitate.  Many foreign investors have been stung by 
their experience in other newly opened markets and are 
yet to be convinced that the world's last Stalinist 
state is ready to open shop just yet. (signed)
28-Aug-2000 10:02 AM EDT (28-Aug-2000 1402 UTC)
Source: Voice of America

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