Though foreign investors remain concerned about South Korea’s unique regulations, difficult labour system and economic uncertainties, the biggest worry continues to be North Korea. In the words of Edward Kelleher, CEO of the Seoul branch of the Bank of America and the president of the Foreign Bankers’ Group in Seoul: “North Korea is the biggest problem in Korea, and if the Roh Moo-hyun government can get it fixed in a manner that doesn’t hurt the South Korean economy, that will help relieve a lot of people.”
North Korea’s nuclear threats continue to puzzle many in the south, as most are still not sure how real it is. President Roh notes regularly: “North Korea has not yet confirmed the existence of nuclear weapons. So we need to seriously consider the North’s statement in determining whether it has developed nuclear arms or not.”
The government still stands firmly for the “peaceful” approach and stresses that cooperation between Seoul, Washington and Tokyo is crucial to dealing with North Korea.
“I believe that what matters most to easing tensions with North Korea is a continuation of the solid alliance between the US and Korea,” said Kim Jin-pyo, deputy prime minister and finance-economy minister, during a visit to the US in April.
In this sense, there is some comfort. Mr Roh was praised widely at home for his performance in the US, when he made his first official call on US President George Bush in early May. Many had been worried about the meeting, as the Korean leader had flashed some anti-American sentiments during the pre-election campaign.
Thus, the agreeable meeting between Mr Roh and Mr Bush helped ease some tension among the investors currently in South Korea and for those interested in future investments.
There is some strong anxiety, however, on the latest troop redeployment talks by the US. Some Koreans interpret it as being part of US’s move to prepare for attack on North Korea. Critics have also pointed out that Korean troops will have to make up for the departing US combat division, which will lead to an increase in the national defence budget and arms purchase.
President Roh’s visit to the country’s other major political and economic partner, Japan, in early June has also met with approval with some Koreans and foreign investors, who say the meeting was “forward-looking” though Mr Roh was criticised bitterly by some for not addressing historical issues, such as the Korean War.
