North Korean Economy Watch

By Michael Rank

Chinese tourism to North Korea seems set to boom, with groups from several provinces about to set off and Pyongyang clearly eager to earn much needed extra revenue.

Tourists are warned that they can’t bring in mobile phones and must “respect Korean customs” by avoiding getting into arguments and “not saying or doing anything which is not good for Chinese-Korean friendship”. They are also told not to aim their cameras at “things which may be seen as the dark side of life”, such as litter or people who are not properly dressed.

But demand is strong despite these restrictions, says a report from the booming, export-oriented province of Zhejiang.

The tourists are mainly middle-aged or elderly and include a large proportion of Korean war veterans, says the report, which notes how Pyongyang was devastated in the war and was the victim of 1,400 American bombing raids.

North Korea agreed to welcome Chinese tourists under an agreement signed in September 2008, but implementation was held up by bureaucracy and problems over high costs, and the doors are only opening this month, according to a report from the southern province of Guangdong. It says people are not put off by the fact that tours are quite expensive at about 5,000 yuan ($730) for five days or 6,000 yuan ($880) for six days, and applicants have to fill in plenty of forms and show their work ID and other documents.

The itinerary is much the same as for Western visitors – Pyongyang, the Myohyang mountains and Panmunjom – although in the North Korean capital the Chinese-Korean Friendship Tower is a must-see, featuring a memorial to the “martyrs” of the Chinese People’s Volunteer Army who fell in the Korean war, including Mao Zedong’s son Mao Anqing.

A total of 800 tourists from Wenzhou in Zhejiang are due to leave on April 20, as well as another group from the provincial capital Hangzhou. There are no direct flights at present, so they have to fly via Beijing, while tourists from Guangdong fly to Dalian or Shenyang and then take the train to Pyongyang via Dandong.

One Zhejiang travel agent goes so far as to say there is so much interest in North Korea that “It will become a tourism destination second only to Taiwan.”

Further tours are planned from Nanjing, Fuzhou, Jiangxi, Shandong and other cities and provinces, and border tourism is also booming, as noted in several reports on NKEW recently. According to the latest report, a tourism agreement has just been signed between the border town of Ji’an in Jilin province and Manpo, just across the Yalu river.

(h/t Werner) According to a reader the MAK Museum Vienna (Museum of Applied Arts, Museum of Contemporary Arts) will hold from May 9-September 5, 2010 a special exhibition of North Korean paintings, posters, and architecture in collaboration with the National Gallery in Pyongyang (located here-satellite image).

According to the MAK Museum:

FLOWERS FOR KIM IL SUNG
Art and architecture from the Democratic People’s Republic of Korea
19.05.2010 – 05.09.2010

Through large format paintings and contemporary positions in the areas of film, poster art, and architecture, the exhibition offers insight into the art production of the Democratic People’s Republic of Korea. In collaboration with the National Gallery in Pyongyang, MAK has put together a comprehensive show offering the first presentation of the gallery’s original works in a foreign museum.

For several months, visitors to MAK will have the opportunity to gain, in a world premiere, an impression of the culture of the Democratic People‘s Republic of Korea (DPRK). which has been isolated since its founding in 1948. Already in the past, MAK has offered insight into worlds beyond Western art and architecture movements with exhibitions, such as “Art and Revolution. Russian and Soviet Art 1919–1932” (1988), “The Tyranny of the Beautiful: Architecture in the Time of Stalin” (1994), “Architecture Again. The Havana Project” (1997), and “Cine Art. Indian Poster Painters at the MAK” (1999). After years of intense effort, it has been possible to arrange a collaboration with the National Gallery in Pyongyang that aims to present the officially recognized art of the Democratic People’s Republic, in context, and make transparent the development of art within the nation’s political framework. The paintings from the National Gallery, many of which present idealized everyday scenes, are able to offer revealing insight into this country’s largely unknown culture.

A majority of the work is comparable with Soviet Realism. Formally, the artists fall back on stylistic means from Realism and Romanticism: motifs from the working world and the revolutionary struggle are depicted in an academic painterly style, mediating a picture of the ideal world and showing new hero figures: workers, airplane crews and pilots are commonly the protagonists doing the “glorious and good.”

The exhibition will also document with photos, original designs, and models, the special architectural development of Pyongyang, which was entirely destroyed during the Korean War (1950–1953). The model of the Juche Tower, landmark of the city, is hereby attributed special significance. In the Democratic People‘s Republic of Korea, the fine arts developed in a special way under the rule of State founder President Kim Il Sung and his son and successor President Kim Jong Il.

Taking recourse to historical role models, President Kim developed the “Juche” ideology, which postulates the concept of independence as the ideal view of the world. In art, promoted along with portraits and scenes showing heads of state, are primarily motifs displaying the country and life in the Democratic People‘s Republic of Korea in their most positive forms.

Curator Christiane Bauermeister
Consultant curator
Christiane Bauermeister
Project coordination
Dunja Gottweis

A catalogue will be published in conjunction with the exhibition.

Guided tours
Sat, Sun 4.00 p.m.
Continuous information service and short tours: Sat 2.00-4.00 p.m.

Special guided tours by advance booking: Gabriele Fabiankowitsch, phone (+43-1) 711 36-298, e-mail: education@MAK.at

According to the Korea Times:

The remains of a U.S. serviceman who went missing in action during the 1950-53 Korean War were recently returned to his family for burial, almost six years after they were excavated in North Korea, the U.S. Department of Defense said Thursday.

The soldier, Army Cpl. Stanley P. Arendt, was buried on March 29 in Palantine, Ill. with full military honors, the Pentagon said in a statement.

In May 2004, a joint U.S.-North Korean team excavated a mass grave near the town of Unsan after receiving a report that an elderly North Korean national had witnessed the death of U.S. soldiers at the site.

The team recovered remains and other personal artifacts that ultimately lead to the identification of seven soldiers.

Arendt was assigned to the 8th Cavalry Regiment in November 1950. According to the Pentagon, “Arendt’s unit was involved in heavy fighting which devolved into hand-to-hand combat around their command post” near Unsan.

Some 400 men were reported missing in action or killed in action during the battle at Unsan, the statement said.

The United States conducted more than 30 excavation missions in the North from 1996 to 2005, finding the remains of what it believed to be some 230 soldiers. It estimates that the remains of some 8,000 of its soldiers are still there.

The joint excavation project between the two countries was halted in 2005 due to tensions over the North’s nuclear ambitions.

On Monday, the North threatened to abandon its efforts to preserve the remains of U.S. soldiers who went missing during the war, unless the United States agrees to restart the project soon. In response, the U.S. State Department hinted the excavations could begin again after the North returns to the six-party talks on its denuclearization.

The project had been a source of hard currency for the North, which has reportedly been struggling with a worsening food situation and reeling from the effects of its disastrous currency revaluation.

Read the full story here:
Remains of US MIA From Korean War Returned
Korea Times
Kim Young-jin
4/9/2010

UPDATE 16: 10/27/2010 – Robert Park has spoken of long-term psychological problems stemming from his captivity in North Korea.  According to the Choson Ilbo:

The evangelical activist Robert Park, who was detained in North Korea for 43 days after crossing the border from China in December last year, has spoken for the first time on South Korean TV about the ordeal. “They have really thought about this. How can we kill these people, how can we starve these people, how can we enslave these people, how can we control these people,” the Korean American told KBS on Tuesday.

He pledged to devote the rest of his life to fighting for the demise of the North Korean regime and the human rights of North Koreans.

Park recalled how he crossed the Duman (or Tumen) River on Dec. 25 last year, and was immediately arrested and beaten. “The scars and wounds of the things that happened to me in North Korea are too intense,” he said. He added that to prevent him from divulging the details of his detention, the security forces carried out humiliating sexual torture. “As a result of what happened to me in North Korea, I’ve thrown away any kind of personal desire. I will never, you know, be able to have a marriage or any kind of relationship.”

He attempted a suicide immediately after he returned to the United States and had to be treated by a psychiatrist for seven months.

Park insisted that an apology he read on North Korean TV was dictated to him. Asked why he decided to enter the North illegally armed with nothing but a Bible, he said, “I hoped through my sacrifice, that people will come together and they will liberate North Korea.”

UPDATE 15: 8/30/2010 – Doubts raised over whether Gomes attempted suicide. According ot the Choson Ilbo:

The North’s official KCNA news agency on July 9 reported Gomes tried to kill himself “driven by his guilty conscience and by frustration with the U.S. government’s failure to free him.” It said he was being treated in hospital.

After the news, the U.S. administration quickly decided to send Carter to Pyongyang. In mid-August, a U.S. State Department medical team visited the North to check on the prisoner.

But in an interview with the New York Times last Saturday, Gomes’ uncle Michael Farrow denied he attempted suicide but had gone on hunger strike.

“I wouldn’t say that he was anywhere near sick at all,” the daily quoted Farrow as saying. “Naturally he probably had some discomfort of being away from home, but other than that he held up pretty good.” This suggests that Gomes was protesting against his detention.

Gomes arrived at Logan International Airport in Boston on the same plane as Carter on Friday and went home with his family without talking to the press.

UPDATE 14: 8/27/2010- Here is KCNA coverage of Cater’s visit to secure the release of Gomes:

Report on Jimmy Carter’s Visit to DPRK

Pyongyang, August 27 (KCNA) — Jimmy Carter, ex-president of the United States, and his party visited the DPRK from Aug. 25 to 27.

Kim Yong Nam, president of the Presidium of the Supreme People’s Assembly, met and had a talk with them.

He discussed with Carter the pending issues of mutual concern between the DPRK and the U.S.

Kim Yong Nam expressed the will of the DPRK government for the denuclearization of the Korean Peninsula and the resumption of the six-party talks.

In particular, he emphasized that it is the behest of President Kim Il Sung to denuclearize the peninsula.

Jimmy Carter made an apology to Kim Yong Nam for American Gomes’ illegal entry into the DPRK and gave him the assurance that such case will never happen again on behalf of the government and the ex-president of the U.S. He asked Kim Yong Nam to convey to General Secretary Kim Jong Il a message courteously requesting him to grant special pardon to Gomes to leniently forgive him and let him go home.

After receiving a report on the request made by the U.S. government and Carter, Kim Jong Il issued an order of the chairman of the DPRK National Defence Commission on granting amnesty to Gomes, an illegal entrant, pursuant to Article 103 of the Socialist Constitution of the DPRK.

Carter expressed deep thanks for this.

Earlier, the U.S. deputy assistant secretary of State for Consular Affairs and his party visited Pyongyang from August 9 to 11 in connection with the case of Gomes and met officials of the Foreign Ministry and a relevant legal body of the DPRK.

The DPRK side took measures as an exception to ensure that they met Gomes three times and confirmed his condition. The U.S. side offered gratitude for these humanitarian measures.

The measure taken by the DPRK to set free the illegal entrant is a manifestation of its humanitarianism and peace-loving policy.

During the visit Carter and his party met and had an open-hearted discussion with the DPRK’s foreign minister and vice foreign minister for U.S. affairs on the DPRK-U.S. relations, the resumption of the six-party talks, the denuclearization of the Korean Peninsula and other issues of mutual concern.

They also enjoyed a performance given by the State Symphony Orchestra.

The Pyongyang visit paid by Jimmy Carter, ex-president of the U.S., provided a favorable occasion of deepening the understanding and building confidence between the two countries.

UPDATE 13: 8/25/2010 – Jimmy Carter has arrived in Pyongyang for the second time in his life.

UPDATE 12: Jimmy Carter is reportedly gearing up to go and get Mr. Gomes.

UPDATE 11: According to All Headline News:

The United States confirmed on Monday that a four-person team visited Pyongyang recently to meet with 30-year-old Aijalon Gomes, who has been held captive since January.

Asked to comment on the visit, State Department spokesman P.J. Crowley told journalists, “It was a four person team: one consular official, two doctors, and a translator. We requested permission to visit Mr. Gomes. That permission from the North Korean Government was granted. The basis of the trip was simply our ongoing concerns about Mr. Gomes’s health and welfare.”

“They (the team from the State Department, Washington) were in Pyongyang from August 9 through August 11. I believe they returned on August 12,” said Crowley, adding, “They visited him (Gomes) in a hospital.”

Crowley said that although the U.S. and Swedish officials on its behalf, “requested permission to bring Mr. Gomes home,” adding, “Unfortunately, he remains in North Korea.”

“We have had conversations directly with North Korea on this issue. We have encouraged them to release Mr. Gomes on humanitarian grounds and we will continue to have that direct conversation with North Korea as needed,” Crowley noted.

UPDATE 10: US in direct contact with DPRK re: Gomes (Daily NK)

UPDATE 9: (2010-7-19) Robert Park has apparently broken his silence to speak out for Gomes.  According to KOLD News 13 (Tucson, AZ):

For the first time since his release from North Korea, Tucsonan Robert Park is speaking out.

…

He’s speaking out now to send a message about Aijalon Gomes, a U.S. citizen who’s currently being held in North Korea.

“He’s a wonderful man,” Park said. “He’s a very good friend of mine.”

Gomes, a Boston resident, crossed into North Korea one month after Park did. Gomes has been sentenced to eight years in a North Korean labor camp. But North Korea has recently threatened to increase that punishment, by invoking the country’s “wartime law,” citing growing tensions with the U.S.

It’s still not clear exactly why Gomes entered North Korea, but based on limited communications with his friend, Park believes it’s because of him.

“He was very concerned about me,” said Park, who added that crossing into North Korea was uncharacteristic for Gomes. “He was so concerned that (I) was dead, so that’s why he took this risk and he just went in.”

Park says he’s now going on a hunger strike to raise awareness and urgency about Gomes’ situation.

“I’m on the third day of my hunger strike,” he said. “I plan to not consume any food until he is released, even if that means my death.”

Park is also urging Americans to contact lawmakers to intervene.

“If you would please contact your government leaders and plead with them, raise awareness with them concerning Aijalon Gomes’s case, and ask that they make a direct visit.”

UPDATE 8: KCNA reports Gomes attempted suicide:

American Prisoner Attempts Suicide
Pyongyang, July 9 (KCNA) — American Gomes serving a prison term in the DPRK recently attempted to take his own life, according to information available from a relevant organ.

Driven by his strong guilty conscience, disappointment and despair at the U.S. government that has not taken any measure for his freedom, he attempted to commit suicide. He is now given first-aid treatment at a hospital.

The Swedish embassy here representing the U.S. interests acquainted itself with the condition of the patient at the hospital.

According to the New York Times:

In April, North Korea sentenced Mr. Gomes to eight years of hard labor and fined him the equivalent of $700,000 for entering the country illegally and for “hostile acts.”

North Korea recently threatened to increase the punishment for Mr. Gomes under the country’s “wartime law,” saying worsening tensions with the United States had created a warlike situation on the Korean Peninsula.

Mr. Gomes’s motivation for entering North Korea is unclear. He had been teaching English in South Korea before his arrest in the North. In late April, he was allowed to speak to his mother by telephone.

UPDATE 7: DPRK threatens to increase punishment of Gomes over the Cheonan situation.  Apparenlty there is no North Korean word for “Double Jeapordy“.  According to the BBC:

North Korea said it would use “wartime law” against the 30-year-old if the US continued its “hostile approach” over the sinking of a South Korean warship.

….

According to North Korea’s state news agency, US requests to free Gomes will not be accepted while the dispute over the sinking of the warship continues.

Instead the Korean Central News Agency says “there remains only the issue of what harsher punishment will be meted out to him”.

“If the US persists in its hostile approach, the latter will naturally be compelled to consider the issue of applying a wartime law to him,” state media reported.

Analysts say “wartime law” could mean a life sentence or the death penalty.

UPDATE 6: Gomes has phoned home.  According to the AP (4/30/2010):

An American imprisoned in North Korea was allowed to speak to his family by telephone Friday, state media said.

North Korea sentenced Aijalon Mahli Gomes to eight years of hard labor and fined him $700,000 in early April for entering the country illegally in January and for an unspecified “hostile act.”

Gomes, from Boston, was the fourth American detained by North Korea for illegal entry in less than a year. He had been teaching English in South Korea.

The official Korean Central News Agency reported that Gomes spoke with family on Friday. The call was allowed after Gomes asked “for a phone contact with his family for his health and other reasons,” the report said.

The brief dispatch from North Korea’s capital Pyongyang provided no further details on the call.

KCNA also said Gomes had contact in prison with a Swedish Embassy official to whom he handed a “written petition.” The report said that happened before the phone call but wasn’t specific.

The United States and North Korea do not have diplomatic relations, and Sweden handles U.S. interests in the North.

UPDATE 5: Gomes has been sentenced.  According to the BBC:

North Korea has sentenced a US citizen to eight years’ hard labour for illegally entering the country, state news agency KCNA has said.

The man, named as 30-year-old Aijalon Mahli Gomes, from Boston, admitted his wrongdoing in court, KCNA reported.

Gomes had worked as an English teacher in South Korea, and reportedly crossed the border from China on 25 January.

Swedish diplomats were allowed to attend the trial, as the US has no diplomatic presence in North Korea.

Gomes, described by colleagues as a devout Christian, was also fined 70 million won ($700,000; £460,000 at the official exchange rate). It is not clear why he entered North Korea.

Goodwill gesture?
Despite the jail sentence, analysts suggested Gomes could be freed before too long as Pyongyang tries to improve bilateral relations with the US.

“The North is not going to hold him for eight years,” Professor Kim Yong-Hyun of Seoul’s Dongguk University told the AFP news agency.

“It is likely to suspend the implementation of the sentence and expel him as a goodwill gesture toward the United States.”

Gomes was the fourth American citizen to be accused of entering the country in the past year. In February, North Korea freed Robert Park, who had entered the country from China by walking over a frozen river.

He had reportedly wanted to highlight human rights issues in North Korea, but was said before his release to have admitted his “mistake”.

Last year two US journalists, Laura Ling and Euna Lee, were also arrested by North Korea on the border with China.

They were sentenced to 12 years’ hard labour but freed in August after four months in captivity, as part of a diplomatic mission spearheaded by former US President Bill Clinton.

According to KCNA:

Central Court Gives American to 8 Years Hard Labor

Pyongyang, April 7 (KCNA) — A trial of Aijalon Mahli Gomes, male U.S. citizen, was held at a court of justice of the Central Court of the DPRK on Tuesday.

An examination was made of the hostile act committed against the Korean nation and the trespassing on the border of the DPRK against which an indictment was brought in and his guilt was confirmed according to the relevant articles of the criminal code of the DPRK at the trial. On this basis, the court sentenced him to eight years of hard labor and a fine of 70 million won.

The accused admitted all the facts which had been put under accusation.

The presence of representatives of the Swedish embassy here to witness the trial was allowed as an exception at the request of the Swedish side protecting the U.S. interests.

(more…)

By Michael Rank

The Chinese government is planning to increase tourism to North Korea as part of plans to boost tourism in China’s rustbelt northeast, according to a newly published official report (MS Word download here).

The report focuses mainly on domestic tourism, but also mentions plans for increased numbers of Chinese tourists to cross into North Korea. Tours include from Changbai county in Jilin province to the North Korean city of Hyesan, just over the border, and from Yanji and Hunchun to Bangcheon, which is also just over the border. Other tours are to include the east coast North Korean port of Rajin and Vladivostok in Russia well as South Korea and Japan. North Korea-related aspects of the 32-page report are summarised here  (both reports are in Chinese).

Incidentally in researching this article I discovered that various cross-border tours are advertised on the internet, e.g. a one-day tour from Tumen that includes Namyang-gun, the home  village of Kim Il-sung’s first wife, Kim Jeong-suk, mother of Kim Jong-il, and also the spot where China, North Korea and Russia meet. Cost: 140 yuan ($20), but we can assume they are for Chinese citizens only.

The government report says it is planned to increase the number of tourist trips from and around northeast China from 350 million to 800 million a year between now and 2015.

Andrei Lankov adds in the comments: In the borderland areas they sell a number of tours tgo NK (Chinese citizens only), with costs between 180 RMB (one day tour from either Yanji or Dandong) to 2500 RMB (four days to Pyongyang). Koryo Tours people told me that until 2009 in order to apply one had to be not merely a Chinese citizen, but a registered resident of the three north-eastern provinces. According to Koryo tours people, this restriction has been lifted, but few people from outside Dongbei are interested.

Koryo Tours brings some exciting news for those seeking to visit the DPRK–Hamhung will now be open to tourism–even US tourists. Sign up for the Koryo Tours newsletter on their web page here.

According to the newsletter:

1. Democratic People’s Republic of Korea (DPRK) drops restrictions on US tourists.
Until recently, American tourists had only been allowed into North Korea during the Mass Games for a maximum 4-night stay. Fortunately in 2010, everything has changed – we can now welcome US citizens on both group and independent tours all year around (we took US citizens on our group tours in February and March, and can confirm these changes are in effect). Check out our complete list of tours and travel options at and see what’s new!

2. Hamhung city to open to tourists
We at Koryo Tours have long prided ourselves on being the only company allowed to offer original DPRK programming, and 2010 has already proven to be a windfall. After years of continuous efforts, we are thrilled to announce our brand-new tour to Hamhung, a major industrial city on Korea’s east coast. Those on our August 7 – 16/17 Liberation Long Day Tour will be the first Western tourists to ever visit this area (again, US citizens are welcome). Our new itinerary adds a two-night Hamhung stay to the already packed ten-night schedule that includes trips to Mount Paekdu, Pyongyang, Kaesong, and other areas). Details are still in flux, but as with everywhere else, we will maximise interaction with locals and see as much as time allows. Plan on staying one night in Hamhung proper and one night at the brand new Majon beach resort, where again, no Westerners have ever been. We are now taking applications from anyone who wants to be among the first tourists in history to go to this major city and its stunning surrounding areas on either a group or independent tour. As for our returning travellers we offer special discounts, so if you were looking for an excuse to go back, this may be the trip of a lifetime for you.

3. Rajin-Sonbong/Chongjin/Vladivostok Tour
Even among the select travellers who have ventured into North Korea, Rajin-Sonbong  (Rason) remains a mystery…a remote area (even by DPRK standards) that shares a northern border with China and Russia and not possible to enter from North Korea proper.  Rason sees almost no tourists at all (literally not one western tourist in 2009!) but keeping up our tradition of breaking new ground, Koryo is preparing a 3-country, 3-time zone, 3-language tour. We start in Yanji, part of China’s Korean autonomous region, then head down to the North Korean coastal city of Chongjin, and  cross overland to Mt. Chilbo (you will be the first Western tourists to arrive there by land). After that, we head back to the free-trade zone and ride the international rail, bus and boat into Russia. We finish our tour in the jewel of Russia’s Far East, the previously closed city of Vladivostok, where travellers can either return to Beijing, fly on to Tokyo or Seoul, or even hop on the Trans-Siberian and keep going . This tour is slated for July; details are still being hammered out, but if you’re interested in seeing these mysterious, fascinating places that are as different as they are unforgettable, please contact us at info@koryotours.com

4. Centre Forward
Koryo Tours has always been more than a travel company; among other projects, we have a long history of filmmaking in the DPRK. While preparing to shoot our latest feature film, we obtained the rights to a North Korea football (soccer if you like!) movie, made in 1978 and never exported abroad – until now. Featuring DPRK film star Kim Chol, Centre Forward tells the story of a young player who reaches the first team only to see the squad hit with a crisis of confidence. Will they be able to get back to the top of their game? Remastered and subtitled with a DVD extra that interviews Rim Jong Sun the 1966 football hero who was consulted on the film. Check out the trailer at Youtube option or at  Youku option.

(Please pass this link on so we can get some viral action going!) In a World Cup year that features North Korea for the first time since 1966, this is a topical and fascinating glimpse into the sporting culture of an unknown country. For film freaks, sports fans and DPRK watchers everywhere, this is a must-see! The DVD is available for purchase at 200rmb (20EUROs) and ready in June – please contact  info@koryogroup.com for more information.

5. Korea vs. Japan Women’s Football
On May 23rd Korea DPR take on Japan in a qualifying match for the 2011 Women’s World Cup. The DPRK ladies are perennial challengers for football’s highest honours, so this should be a good game against regional (and historical) rivals Japan. Come with Koryo Tours to Pyongyang and cheer the team along with the home crowd! For information, see:
http://www.koryogroup.com/travel_NEWItinerary_0.php

6. Turkmenistan May 2010 Tour
In continuing our tradition of trips to weird and wonderful places, we are in our fifth year of tours to the Republic of Turkmenistan (next tour May 11 – 18), with an especially exciting programme. See stunning sites such as the capital city of Ashgabat (Pyongyang meets Las Vegas!) as well as ancient fortresses, giant bazaars, mega-mosques and horse racing, camp in the desert next to a giant flaming gas crater, visit the Caspian sea port of Turkmenbashi and travel by bus, plane, boat, and even horse and camel to get there. Join us on this memorable trip to a remarkable place. The ininerary is here.
[NKeconWatch: I went on this tour and recommend it!]

7. Amazing Mass Games Photos Available: Link to the website
Koryo Tours helped photographer Werner Kranwetvogel get unprecedented access to the Mass Games- absolutely sublime images- on his last trip Werner had access to the ground level but on return to Germany found his lens had a fault…and back he came to Pyongyang…but his images are testament to his drive.

Scott Snyder wrote a good piece on recent developents in Rason fo rthe Jamestown Foundation’s China Brief:

The Rajin-Sonbong region in North Korea (also known as Rason following a 2004 administrative reorganization by central authorities) is an underdeveloped backwater near the far northeastern tip of the Korean peninsula bordering Jilin province of China and Primorsky Krai of Russia. Although the area is far from the nerve center of the North Korean regime, Pyongyang, Rajin-Sonbong has strategic significance as the northern-most year-round ice free port in Northeast Asia and therefore is an attractive geostrategic transit point for the shipment of goods to landlocked Northeastern China and the Russian Far East. For this reason, recent reports of new Russian and Chinese investment deals following a rare personal visit by North Korea’s supreme leader, Kim Jong Il, to Rajin-Sonbong in December of last year merit closer scrutiny.

Rajin-Sonbong has been the focal point of periodic efforts by Pyongyang to experiment with economic reforms since it named the area a free economic trade zone in late 1991. At that time, the Rajin port was an essential piece of a UN-sponsored regional development effort known as the Tumen River Area Development Project (TRADP)—which encompasses areas within China, Mongolia, Russia and South Korea—but the project never attracted sufficient international investment to take off. The spotlight returned to Rajin-Sonbong briefly in 1996 when North Korea sponsored an investor forum there in an attempt to stir up interest in a revamped set of investment laws for the region, but few investors came and North Korea’s famine later that year diverted attention away from the effort. 

(more…)

According to the Economic Times of India:

Pramod Mittal, the younger sibling of steel tycoon LN Mittal and head of Global Steel Holdings, is negotiating with the North Korean government for a stake in the country’s Musan Iron Ore mines, estimated to hold reserves of more than seven billion tonnes. The move by Global Steel is aimed more at accessing the mineral resource, as the ore is in sharp demand with steelmakers expanding capacity and iron ore miners moving to a quarterly price regime to meet growing markets in Asia and Africa.

Mr Mittal, who is chairman of Global Steel, a closely-held company of the Mohan Lal Mittal family, had visited Pyongyang last week to talk to senior government officials to work out the modalities of a share of Musan’s reserves. The ML Mittal family consists of elder son LN Mittal, Pramod Mittal and younger brother Vinod Mittal, who looks after the Mumbai-based Ispat Industries. When contacted, Pramod Mittal declined to comment. “Our visit to North Korea is to further business interests. We are not looking for any stake in Musan,” he told ET .

According to people familiar with the development, Global Steel could likely be negotiating with Pyongyang for development rights to Musan for a fixed peiod, where Global Steel would do the mining and get to buy an agreed portion of the reserves. Typically, in the mining industry, such development rights are for a long term period of 20 to 50 years.

Global Steel, which is registered in the tax haven Isle of Man, has steelmaking operations in Bulgaria and Nigeria and a 20-year management contract to operate Zimbabwe Iron & Steel. Although Global Steel has a small steelmaking capacity of just more than 2 million tonnes, iron ore from Musan would not be used for Global Steel’s operations. Global Steel also owns two coal blocks in Mozambique where ArcelorMittal, controlled by elder brother LN Mittal, also has coal mines. While the Mittal family has maintained that Global Steel has no link to ArcelorMittal, the world’s largest steel company has been reportedly keen on Global Steel’s assets.

Two years ago, North Korea had granted development rights on Musan to China’s Tonghua Iron & Steel Group for a period of 50 years. However, Pyongyang recently terminated that agreement without offering any reason. People connected with the issue said Global Steel is negotiating with Musan on the amount of investment needed for developing the mines and also on building infrastructure, which is integral to any mining activity.

While the talks with Pyongyang is at an initial stage, under the previous agreement with Tonghua, the Chinese company had reportedly agreed to put in about 7 billion yuan, and had also planned to produce 10 million tonnes of iron ore each year. Of the total investment, about $240 million was for building roads and railways from Musan to Tonghua in China. The Musan iron ore mines are close to the Chinese border. The secretive North Korean government has recently been sending out feelers to global mining companies for developing its vast mineral deposits, said to contain one of the world’s largest reserves, closely rivalling Brazil.

The Musan Mine is the DPRK’s largest and satellite imagery of it can be seen here.

Here is a story about Tonghua’s Musan deal. 

Read the full story here:
Pramod Mittal eyes stake in North Korea’s Musan mines
The Economic Times
MV Ramsurya
4/5/2010

Jin Hualin, dean of the College of Economics and Management at Yanbian University, talks about Chinese investment in Rason in China’s Global Times.  Here is an excerpt:

GT: If China does continue to rent Rajin harbor for another 10 years, what will the effects be?

Jin: China has reached an agreement to rent a pier at Rajin Port for another decade. A Dalian-based Chinese company has invested 26 million yuan ($3.8 million) in the reconstruction of Rajin Port No.1 Pier. Park also said that China may enjoy more favorable conditions there, such as more berths.

I think Chinese companies’ participation is good for promoting the North Korean economy and building logistical infrastructure in the area, which is beneficial to China, North Korea and the Northeast Asian countries.

When the Sino-Mongolia route is finished, raw materials and natural resources from Mongolia can be shipped to Japan and South Korea via Rajin harbor, and then China’s northeastern regions and North Korea can both benefit.

GT: What should China do to promote Northeast Asian cooperation and devel-opment?

Jin: I suggest Chinese governments at all levels consider the following issues. They should accelerate trade and tourism and build cooperation on logistics, and support Chinese companies going global and investing in North Korea.

Actually, China now has many companies capable of investing abroad. The point is foreign countries’ investment environment.

We should strengthen cooperation on education with North Korean universities and colleges, sending students to study there and exploring research in new areas together.

We can also strengthen regional cooperation. We can designate China’s Hunchun city and North Korea’s Rason city as pilot cities and permit China’s commercial banks to open yuan-based accounts in Rason’s commercial banks.

Relations between Northeast Asian countries are subtle and complicated because of geopolitical contradictions, different political systems, the influence of the Cold War, historical issues, territorial disputes and sentiments caused by historical and territorial issues.

Mutual distrust fundamentally hinders cooperation. China needs to take the responsibility to promote regional cooperation and make it institutionalized and legally guaranteed as soon as possible.

GT: How do you evaluate the political and economic risks for Chinese companies going into North Korea? What advantages do Chinese companies have?

Jin: There are always political and economic risks involved in trade between different countries. The first major solution is to establish a mutual investment guarantee agreement, so that the two countries’ economic cooperation will be protected legally.

We hope that North Korea can keep the stability and consistency of its policies and issue development policies that is in line with international conventions. As long as North Korea adopts consistent policies, Chinese companies won’t encounter great political and economic risks there.

China and North Korea are believed to enjoy good mutual trust. China has experience from its reform and opening-up and plenty of investment capability. North Korea has a good educational foundation, low labor costs, and rich natural resources.

Chinese companies are active participants in investing in North Korea and I believe they’ll do well there.

Read the full interview here. Hat tip to Adam.

The guys at NOKO Jeans did an interview discussing the process of launching a business venture in the DPRK.  Read the interview here.

The group also posted some very nice pictures of their train ride to Pyongayng here.  The whole set is worth checking out, but here is one that I liked:

And who says entrepreneurship is dead in Europe?  One of the guys on the team put his images into a photo album which he is selling on line here.