Bordering On The Ridiculous - Brief Article - Statistical Data Included

Business Asia, July, 2000 by David Derosa

NOT LONG ago, South Korea was denouncing Kim Jong II, North Korea's eccentric leader, as a nuclear terrorist.

Now, South Korean President Kim Dae Jung turns up in Pyongyang to tell Kim Jong II: "We are one people. We share the same fate. Let us hold hands firmly. I love you."

Say what?

Whatever is going on, the import is that the Berlin Wall of Asia just fell; the border that divides the two Koreas is about to swing open, at least a little bit.

To avoid any confusion between the two Mr Kims, I will refer to Kim Jong II by his local nickname, "Dear Leader".

Mr Kim and Dear Leader were together in Pyongyang last month for historic talks that promise to greatly ease tensions between the two Koreas.

I applaud what is happening, but there are a few things I don't understand. For years now, we have been hearing that Dear Leader is off his rocker. He has been painted by the Western press as a drunk, a psychotic, an unreconstructed Stalinist, and a guy who cheats at golf.

Now suddenly Dear Leader is Dear Peacemaker? It doesn't square with common sense, so something is going on here.

Or did we misread Dear Leader? And what about all those stories and pictures of deprivation, even starvation? Aren't the North Korean children starving? Isn't North Korea on the verge of total collapse?

Frankly, all that Dear Leader had to do was ask for help and he probably would have received it. Any sign that he was ready to talk would not have been ignored. But wait -- maybe he is doing precisely that.

The clever part is that, as we have been told, the emphasis in this accord is for allowing reunions of divided families.

But think about this: when these families get together, the families in the South are going to come stocked up with a lot of food, medicine and money for their misfortunate kin in the North.

It's a lot less embarrassing then asking for foreign aid. Let the families do it.

I'm also waiting for the other shoe to drop. Will Dear Leader suddenly tell the world that he is going to drop his nuclear weapons project? All he has to do is name his price.

The only complication is that the Clinton administration has been going around telling everyone we need a strategic defence system to ward off a missile attack from rogue states like North Korea.

Still, I am led to wonder what China's role was in arranging this historic meeting and the signing of this accord. Maybe China has had a bellyful of Dear Leader.

China is trying to meld in with the international business community. What does it need with a tie to a crazy man who shoots rockets over Japan? Dear Leader has to get his house in order.

It may not be too much of a stretch to wonder if we didn't just get a peace dividend of sorts, by letting China have Most Favoured Nation status as a trading partner.

eye ON ASIA

North of the border Facts & figures about North Korea

population 21,386,109 (1999 estimate)

GDP real growth rate -5% (1998 estimate)

military expenditure 25-33% of GDP (1997 estimate)

telephones 1.4 million (1998 estimate)

televisions 2 million

infant mortality rate 25.52 deaths/1000 live births

life expectancy at birth TOTAL POPULATION: 70.07 years MALE: 67.41 years FEMALE: 72.86 years (1999 estimate)

land use ARABLE LAND: 14% PERMANENT CROPS: 2% PERMANENT PASTURES: 0% FORESTS & WOODLANDS: 61% OTHER: 23%

SOURCE: CIA WORLD FACT BOOK, 1999

COMMENT BY DAVID DEROSA(*)

(*) David DeRosa is president of DeRosa Research and Trading, and manages an investment fund. He is also an Adjunct Finance Professor at Yale School of Management.