Business as usual seems to be the consensus from foreign businesses and chambers of commerce in South Korea over the announcement of North Korean leader Kim Jong-il’s death on Monday.
North Korea’s secretive leader died of a heart attack on Saturday sparking concerns both at home and abroad.
“At the moment, the events and the way things are going to roll out will not affect business,” said Rob Edwards, chairman of the British Chamber of Commerce in Korea.
The American Chamber of Commerce expressed their support for the South Korean and U.S. governments’ two presidents’ statements that “peace and stability on the Korean peninsula remain the highest goal.” AMCHAM represents more than 2,000 members and more than 1,000 member companies operating in South Korea.
The European Chamber of Commerce, which represents 830 members from the 27 countries in the region as well as the overseas business community, is also wishing for a peaceful and smooth transition that will lead to a more settled relationship between South and North Korea.
“We hope that (the transition) will eventually evolve into a business opportunity in the North for our members who have already heavily invested in the South,” said EUCCK Secretary-General Jean-Jacques Grauhar. EU member states have invested almost $60 billion in Korea since 1962.
Italian Chamber of Commerce Secretary-General Roberto Martorana explained that the world economy cannot afford “dangerous jolts to its uncertain economic equilibrium. We are confident that Europe can also play a role” in conducting talks with North Korea over the transfer and future settlement of power.
Eric Thorpe, managing partner at Edge-Publicis Consultants, a public relations company that works with many foreign chambers of commerce and companies, told The Korea Herald that “the change in North Korean despots in 1994 had zero effect on business here in the South and I don’t see the latest transition having any negative effect either.”
Thorpe has been working in Korean business both in the country and from abroad since 1993.
Investors in Korea reacted accordingly to the death of Kim, sparking a selloff that rattled financial markets at home, Japan and as far south as Australia.
“As it was witnessed, foreign investors are extremely sensitive to uncertainties,” said Grauhar from the EUCCK.
The benchmark KOSPI index lost 3.43 percent on Monday while the local currency dropped 1.4 percent against the greenback on the day the news broke of the iron-fisted leader’s demise.
“(Kim’s death) was a short-term business and market reaction, it will bounce back pretty soon,” said Edwards. “At the end of the day, the fundamentals of South Korea’s economy compared to Europe are very sound and money needs to be invested. Korea is a good stable market with good potential earnings.”
On another note, the challenges for North Korea to move forward are greater than at any time in its recent history, said Robert Ward, Economist Intelligence Unit director for Global Forecasting.
“Little wonder then that fears are running high among its neighbors that North Korea will seek to flex its military muscles in order to quell dissent at home and that domestic instability could spill over into the broader region,” said Ward.
By Yoav Cerralbo (
yoav@heraldcorp.com)
