The impact of external political factors on business environment of South Korea
1. Relations between the two Koreas also affect the business climate. After the North-South Korean summit was held in June 2000, the range and frequency of inter-Korean contacts increased dramatically for a time. Seven cabinet-level meetings, including a Defense Ministerial, were held. Four reunions of families separated since the Korean War has been held, briefly reuniting several thousand members of divided families. However, key economic projects and agreements have not been implemented, including re-linking the main rail line between South and North, establishing a Special Economic Zone at Kaesong in the DPRK, and opening a land route for southern tourists to the scenic tourist zone of Mt. Kumgang in the North. Presently, there is little official contact between the two governments, but private exchanges continue. Although North Korea continues to maintain and develop its massive military force, military tensions on the peninsula have been reduced since the June 2000 summit.
2. The U.S.-South Korea relationship has continued to grow in breadth and depth after the independence of South Korea in 1948; the two countries are friends, partners and allies. South Korea and the United States today are working together, both in the region and in the rest of the world, to combat international terror and to advance democratisation and human rights.
3. The United States has a strong security relationship with the South Korea and is committed to maintaining peace and stability on the Korean Peninsula. The United States is obligated under the 1954 U.S.-Korea Mutual Defense Treaty to help Korea defend itself from external aggression. The United States maintains about 37,000 uniformed personnel in the country, commanded by a U.S. four-star general who is also commander of the United Nations Command. U.S. forces include the U.S. Second Infantry Division and air force squadrons.
4. In the past, South Korea served as political pygmy in the pockets of the U.S. in Asia. However, South Korea has repositioned herself as a balancer of security in the region that poses little threat to any of the other countries in the region. A good example is the 'sunshine' policy of cooperation and friendship with North Korea. Also, the distancing of South Korea from the U.S. and its willingness to criticize the policies of its former mentor, has given new credibility with China and North Korea. To better describe the current situation, South Korea is able to act as a mediator between N. Korea and US, Japan & China. This political situation can help South Korea to maintain a good relationship with those countries and her internal society stability. This is very critical for South Korea to develop her economy and improve her business environment. Also, the good relationships between those country help to promote the foreign investment to South Korea.