Tuesday, November 04, 2003
STANDARD AND POOR'S WEIGHS IN ON THE DPRK: NORTH KOREAN COLLAPSE MORE LIKELY THAN GRADUAL REFORM
Now before we get all excited about the implications of how the objective business community sees things on the peninsula, it might be useful to ask "where were Standard and Poor's and the rest of the gang in the weeks and months before the Asian Financial Crisis in 1997? Did they see that coming too and downgrade their ratings accordingly? If not, is there any reason to expect that their prognostications are any more accurate this time around?
Standard & Poor's, the credit rating agency, said on Monday the collapse of Kim Jong-il's communist regime was more likely than gradual reform in North Korea and urged South Korea to build financial reserves to cope with the cost of reunification.
John Chambers, managing director for sovereign ratings at S&P, told reporters in Seoul that state collapse in North Korea was just a matter of time and could cause a bigger shock to the South's economy than the 1997 Asian financial crisis.
Now before we get all excited about the implications of how the objective business community sees things on the peninsula, it might be useful to ask "where were Standard and Poor's and the rest of the gang in the weeks and months before the Asian Financial Crisis in 1997? Did they see that coming too and downgrade their ratings accordingly? If not, is there any reason to expect that their prognostications are any more accurate this time around?
