A new survey of business opinion has revealed the belief that if North Korea were to embark on a reformist path; South Korea’s sovereign credit rating could rise by as much four steps.
According to the survey of 300 foreign companies by the Korea Chamber of Commerce and Industry (KCCI), 65.3% of companies believe that North Korean reform would cause South Korea’s credit rating to rise.
40.6% of these guessed that it would rise by two steps, while a further 38.1% said one step.15.6% said three and 5.7% said four.
International credit ratings firm Fitch Ratings currently gives South Korea the credit rating ‘A+’. The survey suggests that if North Korea were to reform or open, this credit ratings could rise to the level of Japan (AA), Saudi Arabia (AA-), Hong Kong (AA+) or the U.S. (AAA).
KCCI explained the importance of this, saying, “An increase in the credit rating of a country improves conditions for overseas financing and causes expanded foreign investment.”
One out of three respondent companies (34.7%) said that if North Korea were to reform and open they would expand investment and employment in the South.
When asked about when North Korea will promote the open door policy they support, 39.1% said ‘3-5 years’, while 37.6% said ‘5-10 years’, 9.0% said ’10-20 years’, 7.5% said at least 20 years and 6.8% said ‘1-2 years’. The areas where reform is deemed most likely are tourism, resource development and light industrial development.