North Korean Economy Watch

From GPI:

In the current financial and economic situation, companies face many challenges. They must cut costs, develop new products and find new markets. In these fields, North-Korea might be an interesting option. Since a few years, it is opening its doors to foreign enterprises. The labor costs are the lowest of Asia, and its skilled labor is of a high quality. It established free trade zones to attract foreign investors and there are several sectors, including textile industry, shipbuilding, agro business, logistics, mining and Information Technology that can be considered for trade and investment.
 
European Business Mission (May 2010) & Pyongyang Spring International Trade Fair
Information Flyer Here(PDF)
In order to explore these business opportunities, we are organizing again a business mission to North-Korea (15 – 22 May). We will also visit the annual Pyongyang Spring International Trade Fair. This fair can be used by European companies to come in contact with potential buyers and suppliers in North-Korea. Information abouth both events has been attached.
 
North-Korean investment mission to visit The Netherlands (February)
There are investment opportunities in several areas, such as textiles; agro business (e.g. export of vegetables, fruit and flowers to South-Korea); mining (e.g. zinc, mica, tungsten, rare metals); real estate (e.g. office buildings); renewable energy (e.g. windenergy, batteries); Information Technology; electronics; chemicals and tourism. A high-ranking delegation from North-Korea will visit The Netherlands at the end of February, in order to discuss these opportunities in detail and to present specific investment projects. We can be contacted for further details.
 
New book on European – North Korean relations
Information Flyer Here (PDF)
This spring, the Hanns Seidel Foundation (Germany) will publish a new book about the relations between Europe and North-Korea. The publication: “Europe – North Korea: Between Humanitarianism and Business?” also contains two chapters about trade development and business issues – including my article on IT-cooperation. Its Table Of Contents has been attached.     

With best regards, Paul Tjia (director) 
GPI Consultancy, P.O. Box 26151, 3002 ED Rotterdam, The Netherlands
E-mail: paul@gpic.nl tel: +31-10-4254172  fax: +31-10-4254317 Website: www.gpic.nl

According to Yonhap:

The latest “Issue and Policy” report by the Science and Technology Policy Institute said North Korea has traditionally been strong in the polymer chemistry and single carbon material sectors, as well as in such biotech areas as animal cloning. It has also been competitive in nano science, mathematics, nuclear technology and missiles.

The report added that Pyongyang has in recent years built up its competitive knowhow in software, including the Linux computer operating system, as part of efforts to use science and engineering to bolster economic growth.

The communist country operates the Korean Computer Center and Pyongyang Information Center dedicated to improving the country’s software infrastructure.

“Cooperation can take place in relatively new fields such as nanotech, biology and chemistry where North Korea has traditionally been strong,” the report said.

The latest findings, however, said that because there are differences in the quality of research conducted by engineers and scientists from the two countries, cooperation should take place in stages.

In the report, the think tank recommended that South Korea first provide assistance to upgrade North Korea’s laboratory equipment and help train experts. After making inroads into these areas, Seoul can move to carry out full-fledged joint research and open laboratories where scientists from both countries can work together, the report said.

Read the full story here:
Two Koreas can cooperate in chemistry, biotech and nano science: report
Yonhap
1/6/10

eleROM, Sinji JV Group and Phoenix Commercial Ventures Ltd are proud to present learnwithelsi: an innovative new web-based e-learning platform.

learnwithelsi derives its name from the “el” of eleROM and “si” of Sinji. The system is jointly managed by eleROM and Sinji. Subscribers can use the system to manage and study educational courses. learnwithelsi combines the standard features of traditional e-learning platforms with additional features:

* Lectures can be presented real time, even when the lecturers and students are geographically disbursed
* The lecturer can interact with students via video link, whiteboard and instant messaging
* The lecture can be recorded and stored for future access (available from November)
* Every user has tools that enable him/her to create learning contents, manage training activities and interact with other users
* Additionally there are a host of other features; documents can be managed, online exercises created, learning paths created, group work coordinated, assignments produced, forums developed, agendas set, announcements can be made and statistics can be monitored.

Sinji ’s and eleROM ‘s experience in software and e-learning guarantee the quality and reliability of the product. Additionally, learnwithelsi comes with 24 hour support.

Unlike other e-learning platforms, learnwithelsi is offered directly to training institutes for them to create their own courses; thereby enabling them to concentrate on the content of their courses, without having to worry about the technology.

The product follows the philosophy of SAS (software as a service). You don’t need to install anything on your server. You need only an Internet connection to use the platform.

Further system and functional enhancements will be made, eg as from November the video lecture can be recorded and stored for future access.

You can try a sample course on the learnwithelsi platform by clicking here. (login: sample, password: course).

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Here is a PDF of the  press release.

Institute for Far Eastern Studies (IFES)
NK Brief No. 09-11-04-2
11/4/2009

The North Korean monthly publication “Chollima” stressed in a recent (September, 2009) edition the need to improve efficiency in production and administrative activities, emphasizing that if the North is to succeed at becoming an “economic power,” then economic management and administrative activities need to become “informationalized.”

In an article titled “Informationalization of Economic Management and Administrative Activity,” the magazine stated, “In order to meet the demands for science and technology development in the era of the information industry, improvement of the socialist economic management has emerged as an important issue.”

The magazine also offered a solution, suggesting that computers and IT resources be ensured first in order to “informationalize” economic management and administrative activities, and that communications equipment be modernized, stating that construction of basic facilities was an urgent task.

In addition, program industries used in the economic sector should be developed, and planning, statistical, and accounting programs, in particular, need to be connected across the country.

Along with this, the magazine noted that the development of information science is closely related to that of information technology, and that research efforts regarding information science need to be strengthened. The article called for further development of basic elementary management systems education, information theory research, and, of course, systems engineering, legal administration, and other economic science fields.

“Informationalization” of economic management and administrative activities is based on IT resources, and focuses on automating statistical and accounting practices in order to strengthen economic management controls and to boost productivity and efficiency.

On August 11, the Rodong Sinmun also emphasized “informationalization,” referring to the current times as the “information economy age” and the “informationalization age,” stating that “today’s war, absent the sound of gunfire, is a war of brains, a technology war,” and, “technological revolution is bravely marching forward at breakneck speed.”

According to Reuters:

North Korea’s communications ministry was behind a series of cyber attacks against South Korean and U.S. websites in July, the South’s spy chief was quoted on Friday as saying.

Dozens of major U.S. and South Korean government and business sites were slowed or disabled with traffic generated by malicious software planted on personal computers unknown to their users.

South Korean officials said at the time that North Korea was a prime suspect.

“The attacks on Korean and U.S. Internet sites were traced back to circuits originating in China,” the South’s spy chief Won Sei-hoon was quoted as telling a closed-door parliamentary committee meeting by Yonhap news agency.

“North Korea’s communications ministry has been confirmed as leasing the line,” Won reportedly said.

Some South Korean government websites, including the Defence Ministry and National Intelligence Service, were affected in the wave of attacks that lasted several days but did not lead to a breach of sensitive material or damage to online infrastructure, the agencies said.

Read the full story here:
North Korea behind cyber attacks-South’s spy chief
Reuters
10/29/2009

According to the Daily NK:

North Korean citizens are not only sensitive to the style of their clothing or shoes, but also the brands of their accessories such as bicycles and MP3 players.

The reason behind the North Korean special emphasis on such items is apparent in the North Korean adage, “What one eats is not as important as what one wears.” It is not particularly evident whether one has eaten or not in the short term, but attire gives away the level of wealth in a household.

Just as household affluence is determined by the type of vehicle or house one owns in a capitalist society, the type of clothing or shoes that one wears, the particular brand of cigarettes in the pocket of a person or the kinds of objects one owns indicates the wealth of a person in North Korea and even decides the way in which a person is treated.

Two examples are the USB memory sticks and MP3 players which have started circulating there.

An inside source in North Korea testified, “Teenagers nowadays may not know how a computer works, but will carry at least one USB memory stick along with their keys. Middle school students living in cities have to own at least one MP3 player in order to be acknowledged as coming from a middle class background.”

So, in order to cement or exaggerate their social positions, youths go out and get an MP3 player, even if it means foregoing meals, and the parents who do not want to see their children getting alienated will save every penny to buy these ‘essential’ items.

Read the full story below:
Teenagers, the Generation Keeping up with the Times
Daily NK
Moon Sung Hwee, from Jagang in 2006
10/7/2009

GPI Consultancy
PDF marketing brochure here

One of the results of the recent visit of former US President Bill Clinton to Pyongyang is a renewed interest to explore business opportunities with North-Korea. The current improvements in the relations between North- and South-Korea will fuel this growing interest as well.

North-Korea is now opening its doors to foreign enterprises. It is competing with other Asian countries by offering skilled labour for low wages. It established free trade zones and several sectors, such as renewable energy, shipbuilding, agro business, textile, tourism, logistics and mining, can be considered for trade and investment. In addition, the country is attractive in the field of Information Technology (see photo).

Do you want to be informed about these interesting business opportunities? Then join our  unique afternoon seminar on Monday 21 September 2009 in Beijing. Three speakers from Europe will address various aspects of doing business in North-Korea, and  they will also share their own experiences. The program of this informative seminar is as follows:

15:30-16:00 hours  Registration and welcome of attendees

16:00-16:30 hours  General introduction: the latest developments in doing business with North-Korea

16:30-17:00 hours  North-Korea: an upcoming IT-outsourcing destination

17:00-17:30 hours  Experiences of some large European companies, such as ING and Unilever, in North-Korea

17:30-17:45 hours  Questions and answers

17:45-18:15 hours  Informal meeting

Several short videos (e.g. on software development and the Kaesong Industrial Zone) will also be shown. Details of the program, including the location, can be found in the attached file. Please feel free to forward this mail to other interested persons.

With best regards, Paul Tjia (director)
GPI Consultancy, P.O. Box 26151, 3002 ED Rotterdam, The Netherlands
E-mail: paul@gpic.nl tel: +31-10-4254172  fax: +31-10-4254317 Website: www.gpic.nl

GPI Consultancy
Sept 19-26, 2009
1820 Euros

“In the current financial and economic situation, companies face many challenges. They must cut costs, develop new products and find new markets. In these fields, North-Korea might be an interesting option. Inspired by the economic successes of its neighbouring country China , North-Korea has since a few years opened its doors to foreign enterprises. It established several free trade zones to attract foreign investors and there are several sectors, including textile industry, shipbuilding, agro business, logistics, renewable energy, mining and Information Technology, that can be considered for trade and investment.

North-Korea is competing with other Asian countries by offering skilled labor for very low monthly wages and by offering tax incentives. Last year, North-Korea’s exports rose with 23 percent and its imports with 32 percent. Do you want to explore new business opportunities for your company? Then join us from 19 – 26 September 2009 on our trade & investment mission to North-Korea. The program includes individual matchmaking, company visits, network receptions and dinners. Furthermore, we will visit the annual Autumn International Trade Fair in Pyongyang. We will also meet European business people who are working and living in North-Korea.

The mission is meant for entrepreneurs from various business sectors; tailormade meetings will be arranged by our local partner, the DPRK Chamber of Commerce. The program of this unique mission has been attached and we can be contacted for further details. In case you want to participate: please register as soon as possible, so we can start the visa-application procedure.”

Some examples of investment opportunities in North-Korea:
1. http://www.gpic.nl/invest(hungsong).pdf
2. http://www.gpic.nl/invest(clock).pdf

GPI contact information:
Paul Tjia, Senior Consultant
GPI Consultancy, .O. Box 26151, 3002 ED Rotterdam, The Netherlands
E-mail: paul@gpic.nl tel: +31-10-4254172 fax: +31-10-4254317 Website: www.gpic.nl

UPDATE 2:  The Nosotek staff have produced a short video of the staff at work on their computers.  You can see it on YouTube here.

UPDATE 1: Here is a list of Nosotek’s services and prices.  Click here to read in PDF.

ORIGINAL POST: Nosotek is the first western IT joint-venture company in the DPRK.  According to their web page:

In DPRK, software engineers are selected from the mathematics elite and learn programming from the ground-up, such as assembler to C+, but also Linux kernel and Visual Basic macros.

Among them, Nosotek has attracted the cream of local talent as the only company in Pyongyang offering western working conditions and Internet access.

In addition to the accessible skill level Nosotek was set-up in DPRK because IP secrecy and minimum employee churn rate are structurally guaranteed.

Nosotek sells direct access to its 50+ programmers jointly managed by western and local managers.

Services can be invoiced through a Hong Kong or Chinese company.

Benefit from North Korea’s opening, outsource to Nosotek

Our special application development service offerings include:

1. Tailor-made eBusiness solutions
2. Integrated Content Management solutions
3. Application Development
4. Research & Development
5. Special Component Based Software Development
6. Videogame Development

Interestingly, Nosotek has a YouTube channel where you can see demos of the videogames being produced in the DPRK for mobile phones.  Check out their video demos here.

Here are some intereviews with the company’s directors: Volker Eloesser, Ju Jong Chol

The third edition of the SAIS U.S.-Korea Yearbook chronicles important developments in North and South Korea that characterized their relations with their allies and enemies in 2008. Each chapter was written by SAIS students in the course, “The Two Koreas: Contemporary Research and Record,” in the fall of 2008. Their insights were based not only on extensive reading and study, but also on numerous interviews conducted with government officials, scholars, NGO workers, academics and private sector experts in both Washington and Seoul.

The Yearbook is divided into two parts: South Korea’s Foreign Relations and North Korea’s Foreign Relations. In the first part, student authors explore the dynamic foreign policy changes that were brought about by the Lee Myung-bak administration, and how these policies affected South Korean politics both at home and abroad. In the second part, student authors explore how shifting power dynamics both in the United States, as well as among the member states of the Six-Party Talks, affected North Korea’s foreign relations in 2008.

Here are links to the North Korea chapters:
Chapter 6:  The Torturous Dilemma: The 2008 Six-Party Talks and U.S.-DPRK Relations, by Shin Yon Kim.

Chapter 7:  U.S. Alternative Diplomacy towards North Korea: Food Aid, Musical Diplomacy, and Track II Exchanges, by Erin Kruth.

Chapter 8:  North Korean Human Rights and Refugee Resettlement in the United States: A Slow and Quiet Progress, by Jane Kim

The US Korea Institute has also published a New Working paper:

“State Over Society: Science and Technology Policy”
Download Here
ABSTRACT: Since the late 1990s, the Kim Jong Il regime has laid an explicit emphasis on the role of science and technology (S&T) as an instrument of national power. Facing external security challenges, domestic economic stagnation, and rising political uncertainty stemming from the succession issue, North Korea has sought greater scientific and technological development for national revival. Yet few analysts have interrogated the contours of North Korea’s S&T policy or explored its dilemmas for the regime in Pyongyang. Considered a means of modernization, S&T strikes at the heart of manifold dilemmas facing the North Korean leadership as technology poses formidable challenges to the maintenance of political control by introducing new pressures to the balance of power between state and society. In this paper, Rian Jensen, a former USKI Student Fellow, identifies the goals of North Korea’s S&T policy, outlines its mode of implementation, assesses how science and technology is recalibrating North Korean state-society relations, and identifies key policy implications for the US government.