http://www.businessweek.com/articles/2013-01-07/why-is-googles-eric-schmidt-going-to-north-korea

North Korea

Why Is Google’s Eric Schmidt Going to North Korea?


Google Executive Chairman Eric Schmidt arrives at Pyongyang
International Airport on Jan. 7, 2013.

Photograph by David Guttenfelder/AP Photo

Google Executive Chairman Eric Schmidt arrives at Pyongyang International Airport on Jan. 7, 2013.

It’s official: Google (GOOG) Executive Chairman Eric Schmidt will be spending a few days in North Korea. Schmidt and former New Mexico Governor Bill Richardson took off from Beijing on Jan. 7 for Pyongyang. The nine-person delegation will have a private, four-day visit, but there’s no additional information about whom they’ll be seeing and what they’ll be doing in the Democratic People’s Republic of Korea, the land that the official North Korean website calls “the genuine workers’ state in which all the people are completely liberated from exploitation and oppression.”

A place so great might be hard to leave. But assuming Schmidt and Richardson can bear to depart a place where “the workers, peasants, soldiers and intellectuals are the true masters of their destiny,” we’ll know more on Jan. 10, when the group is scheduled to be back in China and, according to Richardson’s office, the former diplomat will have a news conference.

As with so many things related to North Korea, there’s a lot of mystery surrounding this trip. To begin: It’s unclear why Schmidt is going. Richardson, a former ambassador to the United Nations, wants to win the release of an American citizen who was detained by the North Koreans in November. But the New Mexico Democrat has led missions in the past to talk to the North’s repressive leaders and hasn’t had the need to take along a prominent business executive—especially one who leads a company with the slogan “Don’t Be Evil.”

So why take along Schmidt this time? I asked North Korea expert Stephen Haggard, a professor at the University of California at San Diego’s School of International Relations and Pacific Studies who, with Marcus Noland, writes for the blog North Korea: Witness to Transformation. Haggard says he and others who study the Pyongyang regime are puzzled by this latest twist. “Everyone in the North Korea watchers community is scratching their heads about this,” he says.

Odder still, Schmidt is accompanied by Jared Cohen, director of Google Ideas, a research center that Google calls “a think/do tank that convenes unorthodox stakeholders, commissions research, and seeds initiatives to explore the role that technology can play in tackling some of the toughest human challenges.” Cohen, a former Department of State official under Condoleezza Rice and Hillary Clinton, doesn’t seem like the sort of guy whom the North Koreans would welcome enthusiastically. According to the San Jose Mercury News, last summer Cohen spotlighted “nearly a dozen North Korean defectors” at a conference in Los Angeles where they “gave harrowing accounts of privation and coerced criminal activity including drug sales.”

Google has in the past been open to people representing the regime, though. In 2011 a dozen members of a North Korean delegation traveled to the U.S. on a trip co-sponsored by the Asia Foundation, according to South Korean newspaper the Chosun Ilbo, and one destination was Google headquarters in Silicon Valley. The North Koreans also went to New York, the newspaper reported, where they visited Citigroup (C) and Bloomberg News, says Orville Schell, director of the Center for U.S.-China Relations at the Asia Society (Bloomberg LP is the parent company of Businessweek.com). If the North Korean government were serious about reform, ties with Google could be helpful. “North Korea is really the last frontier in some ways,” Asia Society Korea representative Peter Beck told the Voice of America. “It is really the most isolated country when it comes to the Internet, and Google could be a very powerful way of bringing more of the Internet to North Korea.”

That assumes North Korea wants Google or anybody else to bring more of the Internet to the country. UC San Diego’s Haggard is skeptical that third-generation Communist leader Kim Jong Un is interested in the Google guys’ ideas about the Internet as a poverty-fighting tool for developing countries. “The general take in the [North Korea watcher] community is that this is somewhat a naive venture,” he says. Pointing to a recent Associated Press report about a campaign to prevent smugglers from importing TVs and mobile phones that North Koreans could use to access forbidden information, Haggard says “the direction things have been taking on the ground in North Korea has been basically backwards in respect to information control and control of the border.”

Still, some optimists believe the country is starting to open to the rest of the world. For instance, Jim Rogers, the famed investor whom I wrote about in the yearend double issue of Bloomberg Businessweek, told me in November he thought North Korea was not unlike China in the late 1970s, when Deng Xiaoping was just starting economic reforms that would expand the Chinese economy globally. Rogers was similarly upbeat in an interview with Steve Forbes published last May, predicting “wildly exciting things” as the two Koreas moved to reunify. “There’s going to be a merger soon of North and South Korea, and that’s going to be a very, very exciting place,” he said.

Haggard doesn’t believe such dramatic change is coming soon to the North, although he does see increased trade and investment from China helping to move things along. With the Pyongyang regime allowing more Chinese companies to operate in the country, there is some progress in building what he calls a “more market-oriented system.” Haggard, though, is waiting for signs the regime is going to build on that foundation to implement Deng-style reforms. “So far,” he says, “we haven’t seen any of that.”

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Einhorn is Asia regional editor in Bloomberg Businessweek’s Hong Kong bureau. Follow him on Twitter @BruceEinhorn.

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