January 16, 2014 08:21
North Korea is the first thing that comes to the mind of foreigners when they think about Korea.
For the third year in a row, North Korea ranked at the top of the image foreigners most often associated with Korea, according to the Presidential Council on Nation Branding.
The reclusive dictatorship clearly has a negative impact on international perceptions of South Korea. A prime example of the North Korean risk was just after the North conducted its third nuclear test in March of last year and ratcheted up tensions on the peninsula, prompting foreign investors to leave and sending local financial markets into a tailspin.
It was a sobering reminder of the so-called "Korea discount," which results in Korean shares being undervalued.
The council surveyed 50 countries in cooperation with the Samsung Economic Research Institute and found that although South Korea ranks 13th in the world in terms of economic and technological prowess, it ranks only 17th in terms of overall national image. Experts believe that reunification would narrow the gap to a great extent.
Kim Keun-soo, a former member of the council, said, "It's the common view of experts that Korea's brand is generally underrated by around 30 percent due to the North Korean security threat. Reunification would resolve this undervaluation."
In a recent survey of global investment banks, five out of six projected Korea's sovereign credit rating would rise by two notches following reunification.
The Institute for Industrial Policy Studies believes that an increase in South Korea's national image and brand value by one notch would enable companies here to benefit from a rise of more than 10 percent in export prices.
Intangible benefits would also follow. The nation would get a solid boost in confidence leading to a greater say on the international stage and play a larger role in inducing global cooperation.
That is also seen as bringing South Koreans closer together. Kim Jeong-tak at Sungkyunkwan University said, "If the public becomes more confident about the country buoyed by positive views from overseas, it is likely to see increased social cohesion, leading to speedier resolution of internal conflicts and a better social environment reminiscent of advanced countries."
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