Rogers expect North Korea to collapse from within
By Kim Jae-kyoung
SINGAPORE — South Korea must build a nation ruled by law to retool its economy as it faces an economic and political turning point, according to legendary investor Jim Rogers.
In a recent interview here, Rogers, chairman of Rogers Holdings, said it is time for Korea to wind up old practices such as collusive links between business and politics.
He believes chaebol and state leadership built modern Korea, but now their roles need an overhaul for the country to move forward.
His advice comes as the country reels from its worst political scandal that has engulfed President Park Geun-hye and Samsung Group, the nation's largest family-run conglomerate. Samsung heir Lee Jae-yong was arrested on charges of bribery and embezzlement in connection to the corruption scandal.
"Maybe Korea has gotten to a certain stage," he said. "All of this turmoil — political turmoil and company turmoil — is because Korea has got to an inflection point."
The multimillionaire investor said that to go beyond the inflection point, the country should reform its economic system that is dominated by a few big conglomerates.
"That (chaebol) is causing Korea's problems," he said. "Chaebol built Korea's economy, which is good, but they have gotten too big and too powerful, and they are corroded."
The Singapore-based investor said that to make the economy more efficient and competitive, the government should let markets determine the fate of companies and individuals.
"The first thing you should do is let people fail and stop propping up these people," he said. "It is the way the world is supposed to work."
Rogers said North Korea is likely to collapse from within in the coming years because the reclusive country has been greatly exposed to the outside.
"If there is nobody to succeed Kim Jong-un, they may collapse from within," he said. "The Soviet Union collapsed from within. East Germany collapsed from within. It was because people got exposed to the outside world.
"Now in North Korea, they are exposed to the outside world. Revolutions come when people's expectations rise. Nowadays, they have visitors from Russia and China. North Koreans now know that China and South Korea are better off, so they want the same thing."
Rogers, who has visited the isolated country twice, said unification will pave the way for South Korea to become more prosperous.
The global investor said that once unified, he is willing to invest his wealth in the Korean Peninsula.
Rogers warned that Korea could be one of the biggest victims if U.S. President Donald Trump starts trade wars with major trading partners.
"There are going to be trade wars, which are going to affect South Korea," he said. "Maybe it's time for a crisis or semi-crisis in Korea. Korea will suffer more than most because the U.S. is a major trading nation."