Okay, okay, not really an investment recommendation, but a research curio from Goldman Sachs: an assessment of North Korea risks, examining the chances (and costs) of integration between North and South.
Some nuggets from Goohoon Kwon’s report, dispatched to GS clients at the weekend:
We project that a united Korea could overtake France, Germany and possibly Japan in 30-40 years in terms of GDP in USD terms, should the growth potential of North Korea be realised. This projection would put the size of a united Korea in 2050 firmly on a par with, or in excess of, that of most G-7 countries, except for the US.
In fact, according to this chart, it would be bigger than Britain:
That said, in the current divided state North Korea has seen per capita income fall 23 per cent over the past 20 years, leaving the country far below local former planned economies like Mongolia and Vietnam. Per capita income has fallen from 12 per cent of South Korea’s in 1993 to 5.5 per cent in 2008, according to Bank of Korea.
The local planned system appears to be on the verge of collapse, official currency rates are a joke, and the only part of the economy operating on any level of normalcy appears to be the Goesung Industrial Complex – a joint venture between North and South that accounts for about half of inter-Korean trade and which has continued to operate despite gyrating geo-political relations.
More details in the usual place.
Related links:
North Korean Economy Watch – Curtis Melvin, graduate student in economics at George Mason University
