DPRK sets up insurance firm to attract FDI

According to Yonhap:

North Korea has established an investment insurance firm recently in what is believed to be an effort to attract more foreign investment by reducing risks stemming from uncertainties in the communist nation, a source said Sunday.

The North’s firm is expected to purchase reinsurance from an international company, the source said. The system is similar to an insurance measure that South Korea’s government has been operating to compensate its businesspeople for lost investment in the North.

It marks the first time Pyongyang has introduced such an insurance system for foreign investors.

“For foreign investors, this could ease concerns about investment loss risks stemming from uncertainties of North Korea,” said the source familiar with economic affairs in the communist nation. The source said, however, that it is questionable how effective the measure will be in drawing outside investment.

North Korea has long sought to attract foreign investment to revive its broken economy, but with little success because investors stayed away from one of the most closed nations, which is under international sanctions over its pursuit of nuclear and weapons of mass destruction.

The source also said that the word, “reform,” has been used among North Korean bureaucrats, and that this could signal that Pyongyang may announce a set of bold economic reform measures around April’s commemoration of the 100th birthday of late North Korean founder Kim Il-sung.

“Reform” has been considered a taboo word in the North, along with the term, “openness,” because Pyongyang has rejected international calls for it to reform and open up to the outside world as part of a U.S.-led attempt to topple the autocratic regime.

Should Pyongyang take any economic reform measures, they would mark the first such steps since new leader Kim Jong-un took over the isolated nation after his late father Kim Jong-il died of a heart attack in December.

Read the full story here:
N. Korea sets up insurance firm to attract more foreign investment
Yonhap
2012-3-11

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  • Azelea_smile

    A step in the right direction. Hopefully, they are getting practical advice from people with relevant experiences over long time to make it really workable, somehow, and not leaving it to become no more than just a minute’s news item.


An affiliate of 38 North