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Outlook for Inter-Korean Trade Looking up Next Year: KDI Survey

2003-12-05

Considerably better inter-Korean trade was forecast for next year in a survey the Korea Development Institute (KDI) conducted November 12-18 on 42 experts and 212 South Korean entrepreneurs doing business with North Korea.

The results of the survey, made public Wednesday (December 3), show that the "outlook index for inter-Korean economic cooperation" registered 129.6 out of a possible 200 points by business people and 154.5 by experts, the figures being the best since the half-yearly check began in November 2001.

The outlook index is calculated based on the current situation as 100. The figure 200 is the best and zero being the worst in the pulse taking of inter-Korean business conditions.

All 33 respondents out of the 42 experts were more positive in their prospects for 2004 than the entrepreneurs, answering that next year's inter-Korean trade will surpass or at least remain at the same level as this year.

Businessmen engaged in simple trades, rather than those engaged in trade under processing-on-commission basis, and those, whose sales in North Korea exceeded 20 percent of their total sales, rather than those under 20 percent, came out more positive in their North Korea approach.

Of 212 business people 130 responded to the survey, titled "Outlook for Inter-Korean Trade." Of the respondents, 83.8 percent said they will expand or maintain the current levels with regard to North Korea trade in 2004, while 5.4 percent said they will suspend it.

Asked to enumerate important factors affecting inter-Korean trade, 35.4 percent of the entrepreneurs listed logistics infrastructure, communications and electricity, 25.4 percent political and diplomatic problems, 20.4 percent administrative matters, and 15.4 percent problems involving systems.

Concerning the same question, the experts' dominant opinion was the process of the six-party talks on North Korea and other political and diplomatic matters. Poor infrastructure and problems involving systems were raised by 18.2 percent while administrative matters increased only 3.0 percent.

Queried about the profitability, less than half (44.6 percent) of the business people replied in the affirmative. By business, 58.3 percent of those engaged in trade under the processing-on-commission basis said they make profit, while only 39.5 percent of those engaged in simple trades said so.

Agricultural and fishery products and other primary industry goods accounted for 58.5 percent of the goods traded, followed by textiles (16.9 percent) and electric/electronic goods (6.2 percent), according to the survey.

Source : www.korea.net