Excerpt from Jim Rogers book “Street Smarts :
In 2007, my wife Paige and I received permission to visit North
Korea. I wanted to go there because I sensed that changes were coming.
Now I am not a tour group kind of person. I like to make my own way
and create my own itinerary, to decide where to go and what to eat. That
is not an option in North Korea, where we had government minders every
minute we were there. Walking down the main thoroughfare in Pyongyang, I
saw a barbershop, and because I needed a haircut, I ducked inside,
where an old man sitting on a stool stood up in shock when I started
pantomiming the use of scissors with my hands. I was summarily pulled
outside by one of our minders. A haircut, he assured me, was not on the
agenda.
By 2007, I think, only something like three hundred Americans had
been to North Korea since before the Second World War — there was some
strange statistic like that. Virtually no Americans had been allowed to
go there since General Douglas MacArthur’s troops went across in the
early 1950s.
It was clear to me that the North Koreans knew that their country
needed changing. And it was not hard to understand why. All the North
Korean generals, as young officers, thirty years ago, were sent to
places like Beijing, Moscow, and Shanghai. Today they go as generals and
see the changes that have taken place, and when they return to
Pyongyang they say to themselves: Look at what is going on in those
places, and now take a look at where we live — nothing has happened
here, this place is still a disaster.
The country’s supreme leader, Kim Jong-un, was educated at a private
school in Switzerland. It is very unlikely that a guy who is thirty
years old and spent his formative years in Europe is going to come back
and say, “Boy, I really like this, with no bars, no entertainment, no
cars, no nothing.”
These men have been exposed to the outside world, and they know what
is going on there. And in my view that is why North Korea is about to
open up. And when it does, it will be a formidable player on the world
stage. The Chinese are already pouring in. Up in the northwest, they are
building new bridges connecting the two countries. There are new trade
zones up there. So change is happening.
Everywhere we went we could see propaganda posters calling for one
country, two systems — which was the prevailing mantra in the late 1990s
when Hong Kong went back to China. If the propaganda is to be believed,
the country, despite what you might read in the United States, is keen
for unification. A unified Korea would be an economic powerhouse. The
only opponents of such a positive step are the United States and Japan.
If North and South Korea unite, Japan will be faced with a huge new
competitor, much more powerful a competitor than South Korea is right
now. There will be a country of seventy-five to eighty million people
right on the Chinese border, with lots of cheap, disciplined labour and
natural resources in the north and lots of capital, expertise, and
management capabilities in the south. Such a country would run circles
around Japan. The cost of doing business in Japan is high and getting
higher. Among other things, the Japanese do not have a lot of cheap
labour anymore.
Japan is against unification for obvious reasons. I am not sure why
America is against it, other than simple inertia. For American
bureaucrats, who are intellectually lethargic, characteristically slow
to change their thinking, a divided Korea is a way of life. Several
thousand US soldiers are stationed in South Korea — it is something of
an industry, and an entire bureaucracy subsists on the industry’s
continuity.
Where are the investment opportunities in North Korea? one might ask.
I invest in markets, and there is no market there, so I would have to
find companies, maybe Chinese or other Asian companies, that would
benefit from the opening up of North Korea. I do not know of such
companies right now. But North Korea is ripe for factories, hotels,
restaurants, pretty much anything at this point. North Korea has nothing
— no mobile phones, no Internet. Like Myanmar, the country lacks
everything from the most basic goods and services to the highest
technology. Yes, Myanmar has the Internet, but very little penetration.
Yes, both countries have soap, but not nearly enough. Yes, both
countries have electricity, but not nearly enough.
Tourism, I believe, presents investment opportunities in North Korea.
There are only twenty-five million North Koreans, so there is not going
to be a big boom in their travelling the world, but there is probably
going to be a big boom in South Koreans visiting North Korea. There will
be a staggering business in marriage, because there is a huge shortage
of girls in South Korea. South Korean men can look for wives in Los
Angeles or Queens, but the main source of Korean brides is going to be
North Korea. The north does not suffer from the demographic problem that
plagues the South.
I am dying to find a way to invest in both North Korea and Myanmar.
The major changes in these two countries are among the most exciting
things I see right now, looking to the future.
Jim Rogers started trading the stock market with $600 in 1968.In 1973 he formed the Quantum Fund with the legendary investor George Soros before retiring, a multi millionaire at the age of 37. Rogers and Soros helped steer the fund to a miraculous 4,200% return over the 10 year span of the fund while the S&P 500 returned just 47%.
_2.jpg)
