Vietnam to face no FDI competition from North Korea: experts

By Dang Khoa   June 28, 2018 | 07:43 am GMT+7
Vietnam to face no FDI competition from North Korea: experts
A vendor is pictured in a shop in a newly constructed residential complex after its opening ceremony in Pyongyang, North Korea, April 13, 2017. Photo by Reuters/Damir Sagolj

'There is no concrete evidence that North Korea is moving to build trust among investors.'

North Korean leader Kim Jong-un is looking to replicate Vietnam’s socio-economic success story, but is far from being a competitor just yet, experts say.

In response to murmurs in the business sector about North Korea becoming a foreign investment rival if sanctions imposed on it are lifted, Ngo Tri Long, former director of Market Research Institute under the Ministry of Finance, told VnExpress International that it was too soon to entertain such concerns.

“The matter is still very much a diplomatic one, and there are too many uncertainties about the lifting of restrictions,” he said.

How open North Korea will be to foreign investment is also not clear at this point, he added.

“Unlike Vietnam, which is very open to foreign investors, there is no concrete evidence that North Korea is moving to build trust among investors.”

While meeting with his southern counterpart Moon Jae-in in April, Kim Jong-un told the South Korean President that he prefers Vietnam’s model over China's because Vietnam has maintained a great relationship with the U.S., an anonymous government official told Pulse.

Kim Jong-un believes that strengthening his relationship with the U.S. is essential to attracting foreign investors.

In an article last month, The Guardian reported that South Korean conglomerate Hyundai Group has already set a team to explore North Korea’s investment potential.

Other South Korean firms like tech giant Samsung, retail giant Lotte, telecom company KT Corp are also eyeing the North Korean market with interest.

Russia gas company Gazprom has partnered with state-run Korea Gas Corp to learn more about potential opportunities before venturing into what Reuters calls a high-risk investment destination.

Tran Dinh Thien, former director of the Vietnam Institute of Economics, said that even if there is no clear sign that Pyongyang will emerge out of its relative isolation any time soon, Vietnam can use this potential economic pressure to change its strategies and tactics to attract more foreign firms.

“With more political stability and more experience in working with overseas companies, Vietnam should continue to leverage this strength among investors,” he said.

Thien said North Korea can use the situation to its advantage.

“North Korea can learn from Vietnam’s mistakes and successes to make itself more appealing,” he said. “If all tariffs are lifted, Pyongyang has to strongly compete with other countries since it will still be new to the market with many uncertainties.”

 
 
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