As the absurdly coiffed and probably deranged Kim Jong-Il fingers his nuclear button, not even the ballsiest hedge fund manager would contemplate investing in the prospect of Korean reunification. But I could name one secretive London investor who took a big punt back in the 1980s, buying a bundle of North Korean government debt at a tiny percentage of its nominal value on the off-chance that it will one day be redeemed at par by a united Korean treasury. I guess he’s going to have to hold on for a few years yet.
It wasn’t such a mad idea, though. In the days when I was a regular visitor to Seoul, everyone I met there believed as an article of faith that the heavily militarised border along the 38th parallel would one day melt away. Kinship, cultural chauvinism and a long perspective largely outweighed fear of attack from the north, even though central Seoul regularly came to a halt for civil defence exercises. The peninsula had been divided before and always reunited, I was reminded, notably by the Silla kings in the 7th century and the Koryo dynasty in the 10th. Those of a more pragmatic outlook pointed out that the north’s assets — coal, iron ore, agricultural land, 23 million consumers — would make a potent combination with the south’s industrial strengths.
In the current stand-off, there has been little mention of reunification as a desirable outcome — either because China opposes the idea, or because it’s not worth talking about until Kim Jong-Il’s dissolute habits finally carry him off. As for trying to invest in it, let us recall the cautionary tale of Chung Mong-Hun, the head of South Korea’s Hyundai industrial group, who channelled $186 million through his companies into what he claimed were ‘development rights’ in the north.

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