Hope for the best but prepare for the worst

THIS WEEK'S TOPIC: How do you see the latest developments on the Korean Peninsula? What impact is there, if any, for business in the region?

Chris Burton MD of Singapore and Malaysia Vistra

IT would be nice to think that some of the sting has been taken out of the North and South Korea relationship, if only for the poor people starving in the North and those living on a perpetual knife-edge in the South.

But we should be cautious. The North has a long history of reneging on its word. The nuclear test facilities have been badly damaged. The North lives in a world of perpetual paranoia about being attacked by the US.

In my view, this is a delaying tactic to move the rhetoric back from the brink for a period, to allow the test facilities to be rebuilt before weapons developments start again.

Do we really think this regime has changed its tune? I am sceptical.

As for business, no impact.

Business would be wise to be very cautious in the light of the historical volatility in the North/South relationship.

And I think economic sanctions are still in place against the DRPK?

Dileep Nair Independent Director Thakral Corporation Limited

IT is impossible to predict the final outcome of the current developments on the Korean peninsula. There have been many false attempts at negotiations, often with North Korea reneging on agreements tentatively reached.

Of course, times have changed, and there are new personalities around. Still, numerous hurdles have to be overcome - some very high. The US and South Korea insist on CVID - complete, verifiable and irreversible denuclearisation.

Achieving this would indeed augur a new era of stability, and renewed trade and investment in the Asia-Pacific. When US companies benefit from expanded markets for their products and services in the region, this could lead to lower US trade deficits, and thereby lower the current trade tensions and avert a trade war.

This, in turn, will be good for Singapore companies since trade is our lifeblood. So while we prepare for the worst, let us hope for the best.

Joel Ko Hyun Sik Co-founder and CEO Marvelstone Ventures

IT is a great pleasure to see the relationship between the South and North reaching a turning point and laying the ground work for a future win-win scenario, enshrined by a peace treaty.

The conflict between the South and North has deepened over the years, perhaps more than many outsiders appreciate.

However, through the recent summit, the Korean people have begun to see the curtain of hope being lifted and have started believing there could yet be peace and mutual prosperity on the peninsula.

This sea change will surely bring huge opportunities for business between the two Koreas, as well as other Asian economies like Singapore which have played an important role as mediators between the North and South over the years.

Leon Perera Chief Executive Officer Spire Research and Consulting

A COMPREHENSIVE Korean peace treaty and denuclearisation agreement are worthwhile goals to pursue. But it is unlikely that the North Korean leader will completely give up the short-range nuclear strike capability against South Korea and Japan which is ultimately the only guarantor of regime survival.

World leaders should use this window to persuade North Korea's establishment to commit to the more limited and realistic goal of investing more in a rules-based world order and economic openness.

At the same time, the logic of deterrence should be kept in place. This may lead to greater geo-political stability and economic development opportunities on the Korean peninsula.

Ray Ferguson Founder Caber Partners

RECENT developments have lifted a massive cloud- six months ago I was very worried as tensions between the two Koreas had all the hallmarks of a conflict happening for real.

If there was an actual problem that blew up there, it would have had a catastrophic impact.

This is a great example of world powers - the US and China - coming together to solve a problem, and this will definitely lift a cloud and have a positive impact on the global economy.

John Bittleston Founder & Chair Terrific Mentors International Pte Ltd

KIM Jong Un will follow through with his suggestion that he will denuclearise North Korea as long as adequate aid is flowing to his country which is in a dire situation. His leadership is threatened by revolution. The rest of the world will provide massive support.

South Korea will benefit from the giving almost as much as North Korea. Trade will follow and most Asian economies will benefit, as will the United States. President Donald Trump will be hailed as a hero who saved the world from nuclear war. The economic boom will extend for a further five years or more; Mr Trump, for another four.

Lim Soon Hock Managing Director PLAN-B ICAG Pte Ltd

NORTH Korea inadvertently compelled the major powers of US, China, Japan and South Korea to work together to bring about more stability to the region's geopolitical balance.

This can only be good for businesses not only in South Korea, the most affected victim of North Korea's intransigence and aggression, but for Asean as well.

The ultimate question remains - can Kim Jong Un be trusted to deliver on his commitments to live in peaceful coexistence with South Korea, the US and the region through denuclearisation?

If so, North Korea would offer another bourgeoning market for businesses, as the country seeks to catch up with others in the region.

Magnus Grimeland Founder and CEO Antler

EXCITED to see the improvements in relations. Means a lot to the region and the world. Really hope these promising first steps will lead to lasting positive change.

Stability and peace will lead to huge opportunities in the region. If everything is resolved, Antler would love to support in fostering sustainable innovation and growth.

Maren Schweizer Director Schweizer World Pte Ltd

A CONFLICT on the Korean peninsula is an extremely dangerous seat of fire. It would affect trade and growth in the region, because East Asia is so central to global shipping and manufacturing. Any escalation could disrupt trade and economic activity. Everything else is likely to suffer too, including emerging market currencies. Vietnam (as the second largest trading partner of South Korea) and Japan's economy (due to a potential yen boost) are very exposed.

Focusing first on talks between North and South Korea by their leaders are very important for a better understanding as the world community and Pyongyang have differing interpretations of denuclearisation.

It will take time and continued dialogue to build up the sense of trust and the security assurances that could make permanent de-escalation a possibility and extinguish this dangerous nuclear and economic fire.

Edwin Khew Teck Fook President The Institution of Engineers, Singapore

THE recent meeting of leaders of North and South Korea signified a change in political will, possibly driven by Kim Jong Un's desire to address his country's struggling economy. If all obstacles can be addressed, it would open North Korea's doors to foreign investment.

However, without specific plans to support and due to the depth of the issues between the two countries, their relationship will continue to be shrouded in uncertainty and not likely to cause any significant impact on businesses in the short to medium term.

For now, businesses can only hope that the pledge to complete denuclearisation will be followed through, to enhance stability in this region.

Sheena Chin Country Director Veritas Storage Singapore Pte Ltd

THE latest developments on the Korean peninsula are encouraging, but aren't the end in themselves. The will to seek agreement and continue the dialogue is a positive first step, but a lot of hard work remains to be done, as irreversible denuclearisation is the ultimate end goal.

Currently, South Korea is a major exporter of many intermediate products. It is also the biggest producer of liquid crystal displays and a key automotive manufacturing country.

Hence, peace and stability in the Korean Peninsula are critical for businesses, as any major conflicts will inevitably disrupt the economy in the wider region, given the extensive trade linkages between South Korea and the rest of the countries.

Tan Chong Huat Managing Partner RHTLaw Taylor Wessing LLP

WHILE everyone understands that reconciliation can end abruptly, we at RHTLaw Taylor Wessing and our Korean Asean Plus Group partner DR & AJU are optimistic that reconciliation will impact businesses positively, especially on investments into Korea.

Over 90 per cent of the South Korean business people formerly in the North's Kaesong Industrial Complex are willing to return.

Amid rumours that Korea's chaebols are planning development projects in the North, shares of South Korean construction firms and real estate prices in the border region Paju, South Korea, are rising.

Investors no longer see Paju as risky, but instead believe the region is likely to experience rapid development as inter-Korean opportunities arise.

Ana Dhoraisingam Chief Executive Officer, Singapore PineBridge Investments

AT PineBridge we view these historic developments on the Korean Peninsula as very positive.

In recent years, the heightened geopolitical risk in that part of the world has remained a major political distraction and created excessive volatility in the markets.

While a true armistice will still be a long time coming, positive steps towards lasting peace in the Korean Peninsula should reduce the risk premium embedded in some regional risk assets and help credit spreads narrow.

If international sanctions are lifted in time, we see a boon to companies in neighbouring countries engaged in the healthcare, logistics and travel sectors. From a broader regional perspective, we expect Asia to be one of the main beneficiaries of what appears to be the first steps towards lasting peace in the Korean peninsula.

Tan Mui Huat President and Chief Executive Officer, Asia International SOS

THE April 27 summit between the two Korean leaders reinforced the positive diplomatic momentum we have seen since the beginning of this year and augurs well for businesses with interest in the peninsula. This lull of tension will continue in the next several months.

However, close monitoring is required as there are many contentious details to work through that increase the risks that talks will fail. Any such failure would re-ignite tensions.

Organisations operating in the peninsula should maintain planning for a "low probability, extreme impact" event to ensure their resilience and the safety of their workforce.

It is critical to have a clear and objective decision making tool that includes pre-determined triggers that identify genuine escalation and are tied to the policies on the movement of personnel, such as inbound travel and relocation to and within South Korea and the region.

Robin C Lee Group COO Bok Seng Group

WHEN I watched the scene of the two Korean leaders holding hands and stepping into each other's lands, a warm and fuzzy feeling engulfed me.

Comparing with just months ago when test missiles were sent flying all over, this is indeed a welcome cordiality. This is certainly a positive move towards peace not just for the Koreans but also for greater Asia.

Let's cross our fingers and pray that this is not mere rhetoric but sustainable concrete action.

For business, we can expect better things ahead as unhealthy sanctions may be lifted to encourage trade and investments, albeit slowly. What the world needs to see now is a positive outcome of the coming meeting between Kim Jong Un and Donald Trump, as a prelude to the enduring peace treaty needed for a more stable world.

Ian Lee Regional Head, Asia-Pacific The Adecco Group

STATISTICS are hard to come by but based on estimates, decades of stagnation and isolation have created a huge gap in economic, technological and social development in North Korea.

So the proposal for denuclearisation is a welcome step in the right direction which needs to be followed up with real action by the two Koreas and the US.

If the "new era of peace" does materialise, we can expect the North Korean economy to open up, greatly boosting stability and economic development in the Korean peninsula and beyond in the region.

The country will have an urgent need for talent, trade and technology, presenting immense opportunities to the region's businesses. But the true opportunity will be a humanitarian one - that of uplifting the lives of millions of people.

Toby Koh Group Managing Director Ademco Security Group

KIM Jong Un has surprised the world with his peace offering. I expect him to negotiate hard for terms that he wants. He is a wily statesman at a young age and has shown that he is willing to go to extremes to achieve what he wants. I am hoping that his posturing is a real hope for peace on the Korean peninsula which will in turn be welcomed across Asia.

Perhaps Mr Kim has seen the rapid transformation that China has gone through over the last 30 years with the Communist Party still firmly in control, and feels that is now the best option for North Korea. Mr Kim is the supreme leader in the North and is confident that he will be able to bring progress and prosperity to his country while maintaining his dictatorship.

Olive Tai Co-founder and Managing Director beautiful.me and Synagie.com

IT'S going to be very interesting exploring business opportunities with a unified Korea! As business leaders doing a lot of cross-border trade, we now have access to a bigger manpower pool, and a lot of natural resources to explore. As a business owner, I am of course a little concerned with the issue of trust if we are to consider investing in a new Korea, especially in the northern territory.

There is also the issue of security - I cannot have my staff find themselves facing the prospect of a military situation. Once both Koreas iron out their economic policies, and adopt a unified open trade policy that is anti-protectionist and possibly a tax haven (for companies investing in the north), then yes, South-east Asia will welcome a new trading partner!

Zaheer K Merchant Regional Director (Singapore & Europe) QI Group of Companies

THE series of (erratic) developments on the part of the DPRK (although it is a breakthrough, I concede) should be viewed with some scepticism.

A declaration of denuclearisation is merely one aspect, however major, of the road towards lasting peace on the Korean Peninsula. Unless there is systemic change in its form of government, and understanding of the intent behind the seeming truce with some verifiability, it is difficult to see how economic objectives as announced can be met.

It follows that the impact for businesses thus remains unclear, though it all looks positive now. Sanctions may be lifted, collaborations formed and a bigger market in a "united" Korea opened. But these remain on paper only.

David Leong Managing Director PeopleWorldwide Consulting Pte Ltd

SUCH rhetoric and posturing are always confidence-boosting for the global markets because it is a peace resolution for a long-drawn conflict in Asia. North Korean leader Kim Jong Un plays his joker card well and beyond many politicians' and pundits' expectations as it is the most improbable outcome. Just months ago he was playing a high-risks war game with US president Donald Trump taunting him.

If peace is truly restored to the region, Asia is likely to see phenomenal growth with high demand by an economically deprived North Korea. Myanmar was the last exciting Asian story in recent years; this time around it may be North Korea giving the buzz to Asia.

Jay Shah CEO OpenDNA

THE recent meeting between the leaders of North and South Korea surprised many but reaped some positive discussions afterwards, with talk of complete denuclearisation.

With the rapprochement, economic vibes on the Korean peninsula have taken a positive turn. Regional security and political stability are of paramount importance when making business decisions. While the outlook is positive, it is too early to speculate on the outcome.

There are two sides to the coin. On one side, for all we know, it could be one of Kim Jong Un's notorious attempts to engage and mislead. On the other side, it could potentially be a serious and genuine move by Mr Kim to work towards positive relations with the South. This would mean economic progress globally and boost business confidence.

Only with time will we find out which side the coin will land on.

Dora Hoan Group CEO Best World International Ltd

IT was certainly a very welcome event of the century seeing the two Korean leaders finally locking hands in unison at their summit. I am optimistic about the prospects and results of their meeting.

China's reform and opening up have achieved great success, whereas North Korea still maintains a closed-door policy. Kim Jong Un made a surprise trip to Beijing in March, his first outside the North since coming to power in 2011. That visit marked a big shift for him. With his readiness to seek the help of other countries to develop his economy, I am optimistic that Mr Kim will do right for his people. His willingness to reconcile with Mr Moon Jae In was a first step in the right direction.

North Korea as a frontier market offers a central location in a booming region encompassing China, Japan and South Korea. If North Korea can close its nuclear facilities, and the United Nations can gradually relax the economic embargo on the country, there will be considerable positive impact for the East Asian economies.

US president Donald Trump and Mr Kim are due to meet soon. We hope their talks will achieve progress towards a future of peace and prosperity for the entire Korean Peninsula.

Andrew Chan CEO ACI HR Solutions

WHILE 2017 was a shaky year for geopolitics in the Korean Peninsula, the meeting between Kim Jong Un and Moon Jae In on April 27 has boosted market confidence in the region for 2018. The rapprochement between them does seem to be genuine too, with the stated goal of working towards complete denuclearisation of the Korean Peninsula, and lifting of sanctions on the DPRK.

With talk of the Nobel Peace Prize for the key players, including US President Donald Trump, already being bandied about, Mr Moon reportedly said : "President Trump can take the Nobel prize. All we need to take is peace."

I see the development as highly positive and a step in the right direction.

Lynette Seah Founder & CEO Alpha7

POSITIVE outcomes are expected from this new era of peace. The interesting questions here are - how open will North Korea be with its foreign investment policy and how can/will it leverage on big data to boost its economy?

Data is a powerful asset any organisation (and country) can have to improve their economic growth.