Buffett could buy North Korea as gift for Obama

Give it up for Kim Jong Il: No one, and I mean no one, upstages like the North Korean leader.

Just ask US President Barack Obama, whose speech before some 20,000 people in a picturesque Prague square was relegated to the inside pages by Kim's rocket launch on the weekend. It didn't matter whether it failed (as the US claimed) or succeeded (as North Korea argued). It almost stopped the world in its tracks.

Korea's launch is decidedly bad news for a global economy with too much on its plate already. Yet there were winners and losers in this week's dramatic news from Pyongyang.

First, the winners, since it's a short list. Leading this group is Kim himself. Think about it: North Korea's economy, according to 2007 World Bank data, is worth almost $26bn.

It's not fair to compare that with the $14 trillion US economy, so let's go with Warren Buffett.

The Berkshire Hathaway Inc. chairman, according to Forbes magazine, lost as much in the last year as the collective output of North Korea's 23 million people. Even after losing that much, Buffett was worth an estimated $37bn as of mid-March.

It's tempting to fantasise about Buffett just buying the place. He has given away tens of billions of dollars. Imagine the good that could come from buying out the Kims and giving North Korea to Obama. It will never happen, of course, but one can dream of a Buffettland above the 38th parallel.

Yet that really does put things in perspective. The second-wealthiest man in the world could buy Kim's Hermit Kingdom and still have enough for Mongolia and Namibia, too.

And here you have this nation that could easily be purchased by a single US investor essentially holding entire parts of Asia hostage.

Rocket scientists arguing the missile was a dud miss the point. It eclipsed speculation that Kim's Stalinist regime is on its last legs (even if it really is). Gone is talk of Kim's health, after a stroke last year, or plans for a successor. And even if Kim is more afraid of the world than we are of him, the domestic public-relations value was just priceless.

That leads us to the other winner: any rogue state looking to buy arms from officials in Pyongyang.

The Taepodong-2 rocket is hardly cutting-edge weaponry. US officials still are concerned that publicity surrounding North Korea's launch will drum up brisk demand from Iran and other nations.

The list of losers is far longer. At the top are the inhabitants of the Democratic People's Republic of Korea. What a contradiction in terms: there's nothing "democratic" about the place and its people are unfortunate pawns in the cult of personality that sustains the disastrous Kim dynasty.

Rather than raising their standard of living, Kim is seeking to boost his own standing. The cost will be less food and financial assistance flowing to a desperate population. If Kim's people had a say in all this, he would be out of power.

The US, Japan and South Korea also are losers. It was a final slap at the Bush administration, which painted its move to drop North Korea from its state-sponsored-terrorism list as a big success. For Obama, it's a foreign-policy crisis he didn't need with the US economy sliding.

Japan has some egg on its face for announcing the rocket firing a day early. As it corrected its mistake, Kim almost seemed to be toying with an anxious Japanese government. North Korea's launch came after numerous warnings from Japan, showing how little leverage Asia's biggest economy has over its enemy.

South Korea lacks options, having halted most assistance to the North. Kim's provocations also are bad news for an economy grappling to stay afloat amid the global crisis. Being south of Pyongyang means credit raters must consider the risk of war on the Korean Peninsula. The rocket launch won't help things.

Count China among the losers, too. It's tempting to see a sign of strength in China's refusal to call for tougher sanctions against North Korea at an emergency United Nations Security Council meeting. In reality, Kim's missile was very poorly timed for China's government.

Officials in Beijing are plenty busy shielding their $3.3 trillion economy from a global recession. Now, North Korea's biggest trading partner is on the spot to rein in a decidedly unpredictable regime. Expect the US and Japan to increase the pressure on Chinese President Hu Jintao to have a talk with Kim.

It's no secret that China wants to avoid the collapse of a nation with which it shares a sizeable border. Less well-known is China's desire to keep the US and North Korea at odds. Better ties between officials in Washington and Pyongyang might counteract the influence of those in Beijing.

Doing North Korea's bidding isn't helping China's global image any more than shoring up despots in Africa with energy and mineral purchases. At least not while Kim grabs the spotlight and shakes up the world.

William Pesek is a Bloomberg News columnist. The opinions expressed are his own.

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