Economic Reform

I was recently in Pyongyang, at the invitation of the Korean Association for Economic Development, to participate in a two-day conference on special economic zones, co-sponsored by the University of British Columbia. It was one of the most surreal experiences of my life, which I am still trying to process. Members of our group who have previously visited the country say they perceived more openness and less fear among the people than in the past, but it remains a highly regimented society. Visible signs of commerce are completely absent. The only billboards show pictures of the Great Leader and Dear Leader or revolutionary slogans accompanying images of ferocious soldiers bayoneting the imperialists. Not a corporate logo in sight. Shops – the people do have to buy necessities and the occasional small luxury – are utilitarian, and their signage, though I can’t read Korean, is drab and functional: “Bread.” “Clothing.” “Furniture.” It may be the only country in the world without Coca-Cola.

Our hosts have asked me to return, to visit their zones and provide some advice, but they are not willing to pay anything close to my normal consulting fees. One thing they will have to learn as they try to engage with the outside world and attract foreign investment – if indeed that is what they do intend – is that foreign experts (I modestly include myself in that category) expect to be paid. It’s not as if the North Koreans are starved for funds or foreign exchange. The fleet of spanking new Mercedes S-Class sedans and SUVs that chauffered our group around the city, the big bottles of cognac and 18-year-old Scotch in the state-owned restaurants we were invited to, where the elite go to enjoy themselves, not to mention North Korea’s nuclear weapons program, are proof of that. Of course, to the degree that the country can rejoin the international community on less confrontational terms, it can go down the path well trodden by developing countries in Africa, Asia, and Latin America and ask for assistance from international donors to pay for my services.

Two weeks ago I was interviewed about my experiences on The Manzella Report, an international business news and opinion magazine that publishes interviews on YouTube. You can view the interview here: Are the North Koreans Ready for Change?

Like the North Koreans, I too may not be ready for prime time, but I am working on it.

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Andy Serwer writes today on the Fortune magazine website an article entitled “Can Jordan Build on its Relative Success?” Even the title is a give-away of modest expectations: “relative success”? The article lists some of Jordan’s undeniable achievements over the past seven or eight years: free trade agreements with the U.S. and the European Union that have caused exports to soar, some measure of macroeconomic stability, continued GDP growth even in the current economic crisis, improvements in education and health care, and reform and liberalization of several key areas of the economy. Having spent quite a lot of time working in Jordan, I agree with Mr. Serwer’s assessment of Jordan as the most secure and pleasant place to live in the neighborhood – in which he includes Egypt, Saudi Arabia, Iraq, Syria, Lebanon, and Israel – though Beirut’s nightlife and the topless sunbathers in Tel Aviv outshine any of Jordan’s more sedate attractions. But it is easy to overstate the case. [click to continue…]

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Zimbabwe, it seems, is preparing for a return to the international stage in something other than the role of pariah. According the official government newspaper The Herald, the government has just launched a “massive investment and tourism marketing drive that should see high-powered business delegations visit and court investors from 26 nations worldwide.” The 26 countries, all of which are to receive a visit before the end of 2009, include the United Kingdom, Brazil, United Arab Emirates, Kuwait, China, Russia, Iran, Australia, Japan, Spain, and that economic powerhouse North Korea. [click to continue…]

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I arrived a week ago in Minsk, capital of the former Soviet Republic of Belarus, as part of a small team of World Bank staff and consultants visiting for a week to conduct what is called a “mini-diagnostic” of the investment climate – or business enabling environment, as it is also called – and to identify areas in which reform is both needed and possible.

Over the past decade or more, investment climate reform has become a core product for the World Bank Group, which has been offered to at least a hundred countries. It is a reflection of the “Washington Consensus,” which I have written about in a previous post, and which is a statement of the market-oriented reforms and liberalization of the economy considered essential to achieve economic growth. [click to continue…]

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I have been in Minsk, the capital of Belarus, the past few days, working on a World Bank Group assignment to help improve the investment climate.  Minsk is a European-looking city with wide boulevards, grand neoclassical buildings, and a fairly prosperous air, most people fairly well-fed and well-dressed.  The streets are clean and free of crime, and there are none of the gangs of drunken youth or ominous clusters of mafiosi up to no good that I remember from previous trips to other parts of the former Soviet Union,   A fairly normal place, you’d think.

But Belarus  has a serious image problem. [click to continue…]

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