North Korean Economy Watch

Since the New York Times just published an interesting account of the Pyongyang Restaurant in Siem Reap, I thought I would write a quick post about my recent trip to the North Korean Restaurant in Vientiane, Laos (평양식당)–my first North Korean restaurant experience outside of the DPRK.

The restaurant is located just a couple of blocks from one of Vientiane’s most popular landmarks, Wat Pha That Luang:

I arrived at the restaurant on December 28, 2011, the date of Kim Jong-il’s funeral.  I was eager to see if the restaurant would be doing anything special to mark the occasion…and they did: they were closed for the week.  A sign on the door read in English and Lao something close to “Apologies, but we are closed for five days”.

As I stood at the front door reading the “closed” sign, one of the waitresses walked out and offered to serve me a drink in the adjacent outdoor seating area (where the grills are located). I accepted.

In what I believe was perfect Korean (sarcasm here), I asked if they served Taedonggang Beer.  But they only served “Beer Lao” (Which is just about the only beer you can get in the country—fortunately it is a tasty one). As I enjoyed my drink, I asked the waitress if the restaurant was closed because of the General’s death, and she made a sad face and nodded her head. So I finished my drink, paid, and continued on with my vacation.

On January 9, 2012, I returned to the restaurant for a proper meal. When I walked into the restaurant I felt like I was back in the DPRK. The decorations and smell came rushing back to memory.

There were no overt signs of propaganda in the restaurant—likely because the bulk of the customers are South Koreans.  The only subtle symbol that could be construed as propaganda would be the pictures of Mt. Paektu.  These, however, would likely be interpreted as just a symbol of Korea to the South Korean patrons. Mt. Paekdu was featured outside on a big sign posted to the front of the building and inside on a smaller painting…right next to the restaurant’s Christmas tree. The wall decoration and paintings primarily featured pictures of Korean landscapes, crashing waves, women in hanboks and of course Leonardo da Vinci’s Last Supper and Mona Lisa.

Surprisingly the menu featured several Tangogi (“Sweet” Dog meat) dishes. It was surprising to me because the Laotians  do not eat dog. But they probably do not eat here much either if only because of the prices. I ordered a Tofu and kimchi dish as a starter and topped it off with some Pyongyang cold noodles and Ryongthongsul (령통술) Soju (from Kaesong).

Of course there was dancing and karaoke as well:

The waitress/performers opened with Arirang, but then sang a couple of songs that the Chinese and South Koreans seemed to know.  I was also able to recognize “Pangap Sunmida” and “Whiperan”.  I requested a song but they just laughed and said no. I guess my tastes are out of date–even in North Korea.

Eventually I was invited to sing a karaoke song as well.  In tribute to Shane Smith, I thought about singing the Sex Piltols’ “Anarchy in the UK”, but I was just too tired and not interested in making a scene.

Before I left, I asked the waitresses where they went to university. They attended the Pyongyang University of Music and Dance (평양음악무용대학)–which was rencetly refurbished:

ADDITIONAL INFORMATION:
1. I have marked many of the DPRK’s restaurants on Google Earth, but not all of them. If you visit one, or know where one is, please let me know.

2. I have posted many articles on the DPRK’s domestic, joint venture,  and international restaurants.  You can read them here.

Pictured above (Google Maps): Korean Central History Museum on Kim Il-sung Square–site of the new coffee house.

According to a German reader:

A report published [2011-11-24] in the German Daily “Frankfurter Rundschau” reports on the opening of a “Viennese Coffe House” right on Kim Il Sung Square inside the Museum of Korean History (the one wih the “trumpet soldier”).

In brief: Austrian enterpreneur Helmut Sachers has opened this new Vienna style cofee house in October after training Korean service- and bakery staff. It says that it mainly serves the foreign community in Pyongyang, but alo an increasing number of Koreans appear to be able to pay EUR 2, the equivalent of 5000 Won, for a cup of cappucino.

Then reference is made to two older pizza-places and a a Swiss coffe house …. and various duty free shops serving the international community and wealthy North Koreans… which is contrasted with the children and young soldiers exercising on Kim Il Sung Square, who show indications of malnurishment.

You can read a PDF of the German article here.  If a reader has the ability and inclination to provide an English-language copy of this article, I would appreciate it.

Pictured above (Google Earth): The recently completed Hana Electronics and restaurant building in Rakrang-guyok (락랑구역).  See in Google Maps here.

Phoenix Commercial Ventures has recently launched a new web page and issued the following press release on their latest projects in the DPRK:

FOR IMMEDIATE RELEASE:
Hana Electronics Opens “The Restaurant at Hana”
Pyongyang/London, July 8th 2011

Phoenix Commercial Ventures Ltd (www.pcvltd.com) is proud to announce that Hana Electronics JVC (a 50/50 joint venture based in the DPRK)  completed and moved into its new headquarters based near the T’ongil Market in Pyongyang in Q1 2011.

Having moved in and set up its production facilities, Hana has now opened a restaurant (“The Restaurant at Hana”) and related leisure facilities (swimming pool, sauna, hairdresser, bar, gym etc) in its headquarters.

The restaurant (which comprises a main dining room and several private ones) and leisure facilities are open to locals and foreigners alike. Food for the restaurant is sourced from local markets.

A video and photos of the restaurant can be viewed on the Phoenix website.

About Phoenix Commercial Ventures Ltd
Phoenix Commercial Ventures Ltd offers investors business and investment opportunities in the Democratic People’s Republic of Korea (DPRK), enabling them to take advantage of the economic reforms that are taking place there.

Phoenix Commercial Ventures Ltd maintains an office in Pyongyang, almost the only European company to do so, and operates with the following specific aims:

• Identify commercially viable investment projects in the DPRK, on a case by case basis

• Identify reliable local partners for all forms of business in the DPRK, either trade or investment

• Seek overseas investment sources for such projects

• Minimise the risk in such projects, by taking responsibility for supervision of the local set-up procedures and management of the projects

About Hana
Hana was established in May 2003. In 2004 it began manufacturing and selling DVD and VCD players, as well as pressing and selling CD’s.

When the company first began operations it employed barely a handful of people. Now it employs over 200 people, and has thus become a major employer with significant social responsibilities which it takes very seriously.

Hana have established a nationwide distribution network throughout the major cities in the DPRK. Whilst they manufactured and marketed CD’s, they had an exclusive long term contract with the Mansudae Arts Centre, which belongs to the Ministry of Culture, one of the partners in the JV, for 300 works including; movies, karaoke and other music.

They now produce and sell a range of DVD players, and will move into other consumer electronics products.

Hana is now ranked as one of the top three best performing joint ventures in DPRK, as assessed by the Ministry of Finance.

Hana is proud to have introduced a number of firsts, which show the evolution of the DPRK to a market economy. These include:

• Advertising – the Hana logo, together with the company’s telephone number, appear on every product and packing case

• Offering a guarantee – Hana has also introduced a six-month, no questions asked, guarantee on all products

• Distribution System – Hana have gradually established, from a zero base, a distribution system covering the whole country. They have set up sales offices – for example, in Chongjin, they now have one main office and 13 sub-branches; in Hamhung, they have one main office and 3 sub-offices, and also have offices in Nampo, Sariwon and Sinuiju. They plan to open more outlets, first in the other provincial cities, then in the smaller county seats

• Hana intends to diversify and expand their range of products.

• Hana moved into its newly constructed building, next to the T’ongil Market, in Q1 2011.

• Hana has also opened a restaurant (“The Restaurant at Hana”) and leisure facilities (including a swimming pool) in its new building. The restaurant and leisure facilities are open to locals and foreigners alike.

CONTACT INFORMATION:
Phoenix Commercial Ventures Limited
No. 901
International House of Culture
Ryonhwa-dong
Central District
Pyongyang
Democratic People’s Republic of Korea
Corporate Website www.pcvltd.com

According to the Daily NK:

It has been belatedly revealed that since the start of the 2000s, young women working in North Korean restaurants both in Pyongyang and abroad have been required to have double eyelid surgery.

A source with a long history of visits to Pyongyang explained to The Daily NK yesterday, “When I was in Pyongyang last year, I heard from someone related to the North that since the start of the 2000s all waitresses had double eyelid surgery on Kim Jong Il’s instructions,” and added, “It seems that Kim Jong Il places great importance on the appearance of workers in restaurants earning foreign currency.”

According to the source, the target of Kim Jong Il’s requirements includes workers at restaurants within Pyongyang fraternized by foreigners, including Korean and international restaurants in the Yanggakdo and Koryo Hotels, coffee shops and other shops.

But it also includes those sent to work in China (Beijing, Shanghai, Shenyang, Yanji), Southeast Asia (Thailand, Vietnam, Laos and Cambodia), the Middle East (Dubai), Nepal, the Kaesong Industrial Complex and Kaesong.

The reason why Kim Jong Il made the decision is supposedly connected with restaurant sales; the waitresses at such establishments are not merely waitresses, for they must also be talented singers and dancers, too.

According to the source, “They are mostly young university students born in Pyongyang, and I heard they get the surgery in hospital in Pyongyang for $17.”

North Korea pushed into the foreign restaurant market at first in the 1990s in an attempt to boost hard currency earnings. Now, with foreign currency earning businesses under both Party and military organs operating in the market, there are more than 100 North Korean restaurants worldwide.

According to the scale of the restaurant and number of waitresses, each is expected to earn a certain amount of foreign currency per year, and while getting a job in one of the restaurants naturally relies heavily on family and educational background, the waitresses are still watched more carefully by the authorities than ordinary North Korean citizens.

A former resident of Pyongyang told me that elite North Korean women were all getting this procedure done back in the 1980s.  It was very cheap and common.

Read the full story here:
Eyelid Surgery a Restaurant Must
Daily NK:
Kim Yong Hun
2011-5-20

According to the Choson Ilbo:

Siem Reap, Cambodia’s second largest city near the sprawling ruins of the Angkor Wat, has two North Korean restaurants, down from three since North Korea recalled all their expat staff after Kim Jong-il’s stroke in 2008 and returned only the employees of two of them. The restaurants rely on South Korean tourists for business since the town is a popular destination for them.

One of them, called Restaurant Pyongyang, sells the famous cold noodles or naengmyeon for US$7 a dish, while North Korean dancers perform and pour drinks for customers. It used to be a regular stopover for South Korean tourists, with tour agencies charging $30 for a visit and a meal. One tour guide said, “In Cambodia $7 a dish is already pretty expensive, but many tourists go to the restaurant because of its attractions.”

After North Korea’s sinking of the Navy corvette Cheonan in March last year, the South Korean Embassy in Cambodia asked tour agencies and South Korean residents’ association there to avoid sending visitors from the South there, but local sources say the plea fell largely on deaf ears. But the North’s artillery attack on Yeonpyong Island in November last year finally did the trick. The South Korean residents’ association in Siem Reap voluntarily boycotted the North Korean restaurants, and tour agencies also voluntarily took them off their itinerary.

The restaurants are apparently suffering. A member of the South Korean residents’ association said, “Almost all of the customers were South Korean tourists, but it seems that even the performances have stopped now there are no customers.”

Around 120,000 South Koreans a year reportedly visited the two restaurants, contributing to an estimated W200-300 million (US$1=W1,126) in monthly sales. North Korea runs over 100 restaurants in China, Vietnam, Thailand, Laos and Russia, which serve as a source of much-needed hard currency for the regime by sending home $100,000-300,000 a year.

The mood in Siem Reap is now desperate. Last month, a placard outside a South Korean restaurant criticizing North Korea’s attacks were torn down by seven people who appeared to be North Korean agents, in what expats there believe was another small-scale North Korean provocation. Tour agencies are also losing revenues after taking the restaurants off their itineraries. “We used to charge $30 per visit and took 30 percent of the profits, but not any more,” a tour guide said.

South Korean residents’ associations abroad rarely voluntarily boycott North Korean restaurants. The Okryugwan chain of North Korean restaurants in Beijing’s Wangjing district is still accessible to South Koreans. A South Korean Embassy official there said, “We asked residents to avoid the restaurant in November but did not force them.”

Meanwhile, a North Korean restaurant in Kathmandu, Nepal closed down in November after its North Korean manager defected to South Korea.

Read the full story below:
N.Korean Restaurants Abroad Feel the Pinch
Choson Ilbo
1/10/2011

NPR published a story about a North Korean restaurant in Dubai.  According to the article:

The Dubai branch of the Okryu-Gwan restaurant is tucked into the corner of a nondescript business park in Dubai’s Deira neighborhood. In the dining room, the all-female staff is dressed in colorful gowns and robes. Most speak decent English and are happy to guide newcomers to Pyongyang cuisine through the menu.

The signature naengmyon cold noodles are recommended, but the menu is extensive, with varieties of kimchi, the pickled cabbage dish popular on both ends of the Korean peninsula, as well as Korean meat and fish dishes. It’s not quite as spicy as they do it in Seoul, says one waitress pressed for the difference between North and South Korean cooking.

As the food begins to arrive, a synthesizer strikes up a theremin-sounding introduction, and soon the waitresses are onstage, belting out Korean songs and decades-old American pop.

The Okryu-Gwan restaurants are an important source of hard currency for Pyongyang, says Marcus Noland, a North Korea expert with the Peterson Institute for International Economics in Washington, via e-mail.

Since so few North Koreans get to travel, Noland says, being picked to work in the restaurants is a plum assignment.

Potential staff members are thoroughly vetted for political reliability, he added, and pressure may be used against family members to minimize the risk of defection. But as long as the restaurants meet their monthly revenue quotas, the regime tends not to interfere.

Dubai’s Okryu-Gwan is tiny compared with the cavernous original in Pyongyang, which recently celebrated its 50th anniversary. The official North Korean news agency reported that leader Kim Jong Il himself provided “on-site guidance” when the restaurant added a 60,000-square-foot extension.

The foreign branches do have their advantages, however: Unlike the average North Korean, I did not have to endure a lengthy waiting list to purchase a ticket from my work unit to get in.

If any readers can find this restaurant on Google Earth, please let me know.

Read the full story here:
Dubai Restaurant Offers A Taste Of North Korea
NPR
Peter Kenyon
12/31/2010

Item number one: the DPRK’s domestically produced film camera, Hakmujong-1 (학무정-1):

This picture comes via the Russian blog “Show and Tell Pyongyang”. You can read about this camera in the original Russian here.  You can read about it in English (via Google Translate) here. This is the same blog that informed us about the DPRK’s PDA device and the DPRK’s Linux OS, Red Star.  He also has some fabulous pictures of the Kim Jong-suk Pyongyang Silk Mill here.

Item number two: DPRK’s domestic “Coke”:

This photo comes from the collection of Eric Lafforgue.  If you have not already seen his photos, please do yourself a favor and click over.

The soda is “Crabonated” which is a pretty funny typo.  Also worth noting are the lengths they have gone through to copy the Coca-Cola brand–as if they are trying to win back market-share from the foreign firm.  The colors, red, black, silver and white are the same.  The familiar cursive English “C” at the beginning of the word is a close copy.  They even tried to replicate the Coke “wave” by adding a literal wave in a similar curve along the bottom of the advert.

Item number three: DPRK caviar (Okryu Restaurant)

“Thanks to our leader Kim Jong-il we have managed to breed sturgeons.  People from Pyongyang and other provinces can come here to taste caviar and turtle meat.”

See the full video here. Here is a satellite image of the restaurant.

Item number four: Women’s fashion

Uriminzokkiri has posted a clip on DPRK women’s fashion to their Youtube account.  You can see it here.  I have blogged about women’s fashion before here and here.

Item number five: New Koryolink advert (Koryolink is the DPRK’s new 3-G mobile phone service founded by Orascom)

The video comes from this NK web page.  For South Koreans I posted it to my Youtube account.  You can see it here.

Item number six: DPRK verison of The Diary of Anne Frank

Michael Rank has scanned the introduction and uploaded it here.

Item number seven: Happy new year!

According to the Choson Ilbo:

The Okryugwan chain of North Korean restaurants opened its first China branch in Beijing in 2003. Located in the Wangjing district, which has large numbers of Korean residents, it apparently makes more than W7 million (US$1=W1,141) a day in revenues.

The chain is most famous for naengmyeon or cold noodles, but its beef rib stew and kimchi are also popular, and customers can buy them to take home. Seasonal North Korean delicacies such as steamed crabs from the East Sea or wild mushrooms are also served.

So popular are the restaurants that a knockoff has popped up in Shanghai employing Korean Chinese instead of North Koreans.

North Korean restaurants are also famous for the performances put on by their staff, who sing not only their country’s folk and pop songs but also South Korean pop songs. Staff at the Shanghai Okryugwan reportedly sing even American pop songs like the “Titanic” theme.

Most of the North Korean staff are graduates of Jang Chol Gu University of Commerce or attended professional culinary school in Pyongyang. Earlier this year, a beautiful waitress at a North Korean restaurant in Siem Reap, Cambodia gained near-celebrity status in South Korea after a picture of her was posted on the Internet.

North Korean restaurants began opening overseas branches during the 1990s. Okryugwan has outlets in China, Vietnam, Thailand, Cambodia, Laos, Mongolia, Russia, Nepal and Dubai. North Korean provincial governments, their affiliated agencies and other organizations raced to open restaurants abroad, and now there are more than 100.

Depending on the size of their staff, the restaurants must wire back between US$100,000 and $300,000 to North Korea each year. Those with poor revenues are forced to close, so they advertise heavily, even featuring ads in South Korean community journals abroad.

The North Korean staff have experience working at restaurants in Pyongyang and spend around three years abroad. Even if they come from privileged backgrounds in the North, they are still vulnerable to the temptations of capitalism. In Qingdao, China, a North Korean restaurant was forced to close for months because its staff absconded. Last week, the manager the Okryugwan in Nepal apparently fled to India with a stash of dollars that were supposed to be sent to the North.

But with a drop in the number of South Korean customers following North Korea’s artillery bombing of Yeonpyeong Island, compounded by the defections, North Korean restaurants abroad may face a cold winter.

Read the full story here:
Why N.Korea Values Its Restaurants Abroad
Choson Ilbo
Oh Tae-jin
12/15/2010

According to the Choson Ilbo:

South Korean intelligence officials breathed a sigh of relief on Sunday. They had finally located Jon Il-chun, the head of a special department in North Korea’s Workers Party that manages Kim Jong-il’s slush fund. Jon, who had eluded intelligence officials for the past six months, was finally spotted on a North Korean TV broadcast featuring one of leader Kim Jong-il’s so-called on-the-spot guidance tours in Pyongyang.

The 69-year-old Jon went to high school with Kim (68) and was appointed head of the department, known as Room 39, early this year. It manages 17 overseas branch offices and around 100 trading companies and even owns a gold mine and a bank. The US$200-300 million those companies make each year is funneled into Kim’s secret bank accounts around the world.

Room 39 is targeted each time the U.S. and other foreign governments apply financial sanctions against North Korea. Kim replaced its head early this year because the former director, Kim Tong-un, was put on an EU list of sanctioned individuals late last year, making it impossible for him to manage the leader’s secret overseas bank accounts.

Due to the importance of the department and the clandestine nature of its business, the director of Room 39 rarely appears in public, but he sometimes accompanies Kim Jong-il on guidance tours when they involve organizations linked to Kim’s slush funds, an intelligence official said.

In the TV clip on Sunday, Jon is seen with Kim on an tour to Hyangmanlu, a popular restaurant, and Sonhung food manufacturing plant. A North Korean defector who used to live in Pyongyang, said the restaurant was built in the 1990s by a wealthy ethnic Korean from Japan and is located in a busy part of Pyongyang. “It was always packed with wealthy party officials,” the defector said, adding the party manages the restaurant so the entire proceeds probably go into Kim Jong-il’s coffers. He added there is a strong possibility that the food factory also belongs to the party.

The last time Jon appeared on North Korean TV was on June 20, at the opening of a mine in Yanggang Province. A North Korean source said the Huchang Mine is a famous copper mine that had been closed for some time but must have reopened. “Judging by the fact that Jon took part in the opening ceremony, it appears to be one of many mines run by Room 39.”

Jon was also spotted at Kim’s inspections of two fisheries companies last year and one this year. A Unification Ministry official said, “North Korean exports of fisheries products are handled by the party or the military and they’re sources of revenue for Kim Jong-il’s slush fund.” Fisheries products accounted for the second largest North Korea’s W1.64 trillion exports to South Korea last year, amounting to W173 billion or 16.3 percent. Textiles totaled W477 billion or 44.8 percent.

“This is one of the reasons why we blocked imports of North Korean fisheries products” following the North’s sinking of the Navy corvette Cheonan, the official said.

Additional Information:

1. Michael Madden has written a biography of Jon Il-chun here.

2. Here is a satellite image of the Hyangmanru Restaurant.  Here is a satellite image of the Sohung Foodstuff Factory (right next door).

Read the full story here:
Elusive Manager of Kim Jong-il’s Slush Funds Pops Up Again
Choson Ilbo
12/15/2010

UPDATE (1/3/2011): According to the Choson Ilbo:

North Korea has shut down a restaurant in Kathmandu and recalled all of its staff after the manager absconded with the takings in late November.

South Koreans in Kathmandu said the 13 to 15 North Korean staff of the Kumgangsan restaurant were recalled to the North right after the manager fled.

But the Kathmandu branch of the Pyongyang Okryugwan restaurant chain, which had been misidentified as the one where the manager worked, is still in business in a back alley about 1 km across the street from Kumgangsan.

Most South Korean tourists and about 400 expats in Kathmandu have stopped going to the restaurant since the South Korean Embassy in Nepal wrote to expats and tour operators asking them to refrain from visiting North Korean restaurants after the North’s torpedo attack on the Navy corvette Cheonan in March last year.

“Please refrain from visiting North Korean restaurants that are becoming sources of funds for the Kim Jong-il regime. Anyone who has visited such restaurants will be subject to investigation on charges of violating the Inter-Korean Exchange and Cooperation Law and the National Security Law upon returning home,” the embassy warned in an email.

A South Korean resident said the Kumgangsan and Okryugwan restaurants had depended largely on South Korean customers, so their sales must have dwindled.

The Kumgangsan manager, identified as Yang, reportedly came to South Korea via India. Nepalese police released two South Koreans who were arrested after North Korea accused them of kidnapping him and were deported on charges of violating immigration law.

UPDATE (12/23/2010): According to the AFP, the Nepalese have released the two South Koreans who allegedly assisted the North Korean to defect.

Nepal has released two South Koreans held for their alleged involvement in the case of a missing North Korean, the South’s foreign ministry said Thursday.

The two men, who live in Nepal, were ordered to leave the country within 15 days after being freed, the ministry said.

Yonhap news agency said the pair were accused of helping a North Korean surnamed Yang flee the Himalayan nation across the border into India, after which he defected to the South.

A local media report in the Himalayan country had said they were arrested following pressure from Pyongyang’s embassy in Kathmandu, which wanted them charged with kidnapping Yang.

South Korean newspapers have said Yang was the manager of the local franchise of an overseas restaurant chain operated by the North.

The franchises are an important source of scarce foreign currency for the cash-strapped regime.

Some 20,000 North Koreans have fled their homeland and arrived in South Korea since the end of the 1950-53 war, almost always through a third country.

UPDATE (12/15/2010): According to the Choson Ilbo the defector left with some substantial funds from the DPRK restaurant in which he worked.

ORIGINAL POST (12/14/2010): According to the Choson Ilbo:

A North Korean who went missing in Nepal recently had been the manager of a North Korean restaurant there, it emerged on Monday.

A diplomatic source said the man, identified as Yang, managed the Kathmandu branch of the Pyongyang Okryugwan restaurant chain and had been there for about a year. It seems he defected and is believed to be in New Delhi, India now.

Overseas branches of Okryugwan are a main source of hard currency for North Korea, and the regime carefully selects managers. The North is apparently very sensitive about Yang’s defection, according to South Korean intelligence, because he made off with a stash of dollars that were supposed to be sent to the North.

The North Korean Embassy has asked the Nepali authorities to investigate two South Koreans identified as Choi and Sun who it says had friendly ties with Yang and kidnapped him. Choi and Sun have been arrested, and South Korean Embassy officials are negotiating for their release.

Read the full story here:
N.Korean Restaurant Manager Absconds from Nepal
Choson Ilbo
12/14/2010