Archive for the ‘Singapore’ Category

Singaporean tourist ship Royale Star operating in DPRK

Tuesday, February 26th, 2013

Singapoer Ship-Rason/p>

Pictured Above (Google Earth): The location of the Singaporean ship at Rason Port (in Yellow). The pier to the right is rented by the Chinese.  The pier to the left is rented by the Russians.

 

UPDATE 2 (2013-5-19): The Royale Star has made its maiden DPRK voyage. Here is footage from KCTV. Here is footage from KCNA. Here is text from KCNA:

A departure ceremony of tour boat Royale Star for the first batch of Rason-Mt. Kumgang international tour makers took place at Rajin Port Saturday.

Present there were officials and other personages of the DPRK and Chinese institutions related to tourism, tourists and people in Rason City.

Jon Tong Chol, director of the Rason City Tourist Administration Bureau, and Zheng Yuanhui, owner of the boat, made speeches there.

The speakers congratulated the guests on having an opportunity to tour Mt. Kumgang, world famous mountain and a superb scenic beauty, as the first batch of makers of Rason-Mt. Kumgang international tour by the boat.

They wished the guests pleasant and happy days.

At the end of the ceremony the boat left the port.

UPDATE 1 (2013-3-6):  Yonhap offers more details on the ship and its mission in the DPRK:

Beijing-based Young Pioneer Tours said Pyongyang has authorized seven, four-day tours to the port and resort on its east coast from late April though mid October.

The Royale Star, a small cruise ship owned by a Singaporean shipping company, will be used to ferry foreign tourists, with the company claiming passengers will get a chance to see unique marine vistas off Rajin and Mount Kumgang, one of the top natural tourist destinations in North Korea.

The vessel is 138-meters-long, has a beam of 28 meters and is able to carry a large number of passengers and crew. The ship has a duty-free shop, hair salon, bar, rest areas and a restaurant-theater.

ORIGINAL POST (2013-2-26): According to KCNA:

Singaporean Tourist Ship Opens Business at Rajin Port of DPRK

Pyongyang, February 20 (KCNA) — The Singaporean tourist ship “Royale Star” opened its business with due ceremony at Rajin Port in the northeastern DPRK on Feb. 20.

Present at the ceremony were officials and other people of DPRK and Chinese institutions related to tourism and people in Rason City.

Kim Chun Hwa, director of the Rason International Travel Company, the director of the Yanbian Tianyu International Travel Company of China, and Zheng Yuanhui, owner of the ship, made speeches at the ceremony.

They said the start of business by the ship is of great significance in developing tourism in the Rason Economic and Trade Zone, adding it will contribute to bringing about a turn in the services for tourists.

They expressed thanks to the DPRK for its cooperation in the preparations for the start of the ship’s business.

They stressed the need to improve the services and inject fresh energy into Rason-Mt. Kumgang tour and the businesses in the zone.

At the end of the ceremony its participants toured cabins and other facilities of the ship.

A reception and an art performance were given on the same day.

Here is footage from KCNA:

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Jaeil Credit Bank deposit information

Monday, May 28th, 2012

Dr. Seliger has sent in some interesting information on financial products being advertised to North Koreans. I will post it over the next few days.

Today we will look at the marketing materials for the  Jeil Credit Bank in Pyongyang:

Here is what the marketing poster says:

외화저금안내 Currency savings guide

저금종류 리자률                (년리)% Interest Rate
Types of savings              (per annum)%

보통저금
Usual saving 1%

정기저금(6개월)
Regular Saving (6 month) 2.5%

정기저금(1년)
Regular Saving (1 year) 6%

정기저금(2년)
Regular Saving (2 year) 7%

정기저금(3년)
Regular Saving (3 year) 7.5%

정기저금(5년)
Regular Saving (5 year) 8%

정기저금(10년)
Regular Saving (10 year) 9%

제일신용은행은 자기의 이름 그대로 경영전략과 자금관리에서 신용을 제일 생명처럼 여기고 있으며 개인저금잔고를 절대로 남에게 보여주거나 알려주지 않습니다.
Jeil Credit Bank, as the name of itself, consider credit of management strategies and money management as our life and does not show or share ones account information to others.

제일신용은행의 저금자들은 저금하는 날 혹은 저금 만기 전 임의의 날에 리자를 먼저 찾아 쓸 수 있으며 저금만기날이 아니라도 언제든지 필요하면 저금한 돈을 전부 되찾을 수 있습니다.
Jeil credit bank customers can withdrawal the interest before maturity at any time and if needed, all of the money from the savings can be withdrawn before maturity.

제일신용은행은 싱가포르와 50년간 합영계약을 맺고 있는 은행입니다.
Jeil Credit Bank has a 50 years joint venture contract with Singapore.

영업시간 월요일부터 금요일까지 오전 10시~12시 20분, 오후 14시~16시 20분
Business hours: Mon-Fri 10 am – 12.20 pm, 2 pm – 4.20 pm

제일신용은행
Jeil Credit Bank

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Kim Yong-nam tours Singapore factories

Sunday, May 13th, 2012

According to Yonhap:

North Korea’s ceremonial head of state Kim Yong-nam visited a foodstuff factory in Singapore on Saturday after talks with the city-state’s parliamentary leader, the North’s official news agency reported.

Kim, president of the Presidium of the Supreme People’s Assembly, and his party were briefed on the constant development of the typical foodstuff factory, the (North) Korean Central News Agency (KCNA) said in a brief dispatch from Singapore.

Kim and his party also watched a video on the management of the factory before looking around the production processes, it said, adding they also toured Hi-P International Pte Ltd., a manufacturer of electronic products, and a tourist islet.

On Friday, the No. 2 leader of the communist state held talks with Michael Palmer, speaker of the parliament of Singapore, according to the KCNA. The North Korean official will also visit Indonesia for talks with President Susilo Bambang Yudhoyono, the agency reported last week.

Read the full story here:
N. Korea’s No. 2 leader tours food factory in Singapore
Yonhap
2012-5-13

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Rason Trade Fair compendium

Wednesday, October 19th, 2011

UPDATE 6 (2011-10-19): I finally received a list of companies participating in the first Rason International Trade Fair. Below is a picture of the names of participating companies listed on a display at the show and a PDF of their names (in English). I apologize for any typos:

Here is a PDF of the company names in English.

Most are obviously Chinese companies, though there appears to be at least one American company listed in the mix, White Stone Corporation Co., Inc. USA!

UPDATE 5 (2011-8-22): KCTV produced video footage from the fair.

UPDATE 4 (2011-8-25): KCNA announces the closing of the first Rason International Trade Fair:

First Rason International Trade Fair in DPRK Closes

Rason, August 25 (KCNA) — The first Rason International Trade Fair was closed with due ceremony on Thursday.

Present there were Jo Jong Ho, chairman of the Rason City People’s Committee, officials concerned and exhibitors of different countries and regions.

In a speech a speaker referred to the fact that the fair was successfully progressed and an advance was made in conformity in favor of mutual interests in economy, exchange of science and technology and trade through wide-ranging contacts.

Diplomas were awarded to the exhibitors who presented excellent goods at the closing ceremony.

UPDATE 3 (2011-8-25)): KCNA publishes a short article advertising the economic advantages of Rason:

Rason Economic, Trade Zone with Bright Prospect of Development

Pyongyang, August 25 (KCNA) — Rason City, the DPRK, is situated in an important area which can link China’s three northeast provinces and Russia’s Far East region, both full of natural resources, and many Asia-Pacific nations with each other.

Rajin, Sonbong and Ungsang ports in Rason and Chongjin Port adjacent to the area provide good conditions for transit trade for Northeast Asia and other continents.

The sea off the ports does not freeze in winter, so they are not subject to seasonal restriction.

The reconstruction projects of the Rajin-Khasan railway and Rajin Port launched in Juche 97 (2008) will make it possible to reduce the transport distance from Asia to Europe, sharply cutting down the transport fee.

The Rajin-Khasan railway will serve as a transport route between the DPRK and Russia and between Asia-Pacific and European nations.

Rason City has seafood, agricultural product and wild vegetable processing bases operated by Korean trading companies. The city also boasts of many ponds, lakes and bays favorable for fresh-water fish culture and offshore farm.

Its natural and geographical environment is suitable to an international tourist resort. There are sea-bird, seal and other animal sanctuaries in the area with beautiful islets, like Pipha and Sol.

Some foreigners have already launched business in the area and an increasing number of investors are interested in the zone.

Rason City with amazing geographical and economic conditions is likely to greatly contribute to the development and prosperity of Northeast Asian nations.

UPDATE 2 (2011-8-21): The first Rason International Trade Fair opens Monday. Some interesting information below:

Pictured above (Google Earth): The Rason International Trade Fair Exhibition Hall (See in Google Maps here)

Also, a reader sent in this promotional flyer which is full of information on the trade fair:

See images of the flyer here: Part 1, Part 2, Part 3.

Video footage of the trade fair can be seen here.

UPDATE 1 (2011-8-17): The First “Rason International Product Exhibition” to be Held in Rajin-Sonbong Special Economic Zone
Institute for Far Eastern Studies (IFES)

Rajin-Sonbong or “Rason Special Economic Zone” is a co-development project developed by North Korea and China. The Rason SEZ International Product Exhibition is scheduled to take place from August 22nd to 25th — an exhibition targeted to attract foreign investors to the region.

According to the KCNA article released on August 14, “The exhibition will display a wide array of items from various countries including vehicles, pharmaceutical and clothing products.” It was said that the exhibition promises be an important event to encourage cooperation and exchange with various countries in trade, economic and science, and technology sectors.

This event is expected to not only bring Chinese but also European and other foreign companies into the economic zone, pushing investment into the area.

There is also talk of developing Rason into an international tourism zone to attract tourists from China, Russia, and Japan.

After the closing ceremony of the exhibition, visits to Rajin Harbor, Mangyongbong ferry, and the amusement park are scheduled in order to provide sightseeing tours for the participants to the exhibition.

Mangyongbong ferry, well-known in the past for transporting North Koreans living in Japan back to North Korea, is gaining special attention itself as a new tourist attraction. This cargo-passenger ferry is expected to be utilized further for tourism in the near future, including bringing Chinese tourists from Dairen and other harbors in China to Nampo Harbor close to Pyongyang.

In the late 1950s, Mangyongbong ferry began to shuttle North Koreans in Japan from Niigata Harbor to Wonsan Harbor near Pyongyang. From 1984, it was used to transport cargo into Japan, but this was halted in 2006 due to economic sanctions against North Korea which followed in response to North Korea’s missile and nuclear tests.

There are two ferries in North Korea with the name Mangyongbong. The Mangyongbong-92 will be introduced in Rajin Harbor to maximize the demonstration effect. The Mangyongbong, weighing 3,500 tons, is much smaller and older and inadequate to be used as a ferry.

The Mangyongbong-92 was built in 1992 to commemorate the 80th birthday of Kim Il Sung. The ship was built with funds collected from Chongryon (i.e., the General Association of Korean Residents in Japan). It was estimated to cost over 4 billion JPY at the time, weighing about 9,700 ton with a capacity to hold 350 passengers.

On another note, the fourteenth annual Pyongyang Spring International Product Exhibition held this May hosted over 280 companies from 10 countries. 100 Chinese companies participated in the exhibition. Since then, Chinese corporations from Liaoning and Dandong are reported to have placed contract orders worth 800,000 USD.

 

ORIGINAL POST (2011-8-15):

Pictured above (Google Earth): Rason geographic border (in red) and security perimeter fence (Yellow).

According to KCNA:

First Rason International Trade Fair to Be Held

Pyongyang, August 14 (KCNA) — The first Rason International Trade Fair will be held in the DPRK from August 22 to 25.

Vehicles, medicines, garments, etc. presented by companies of different countries and regions including the DPRK will be displayed at the fair.

The fair will contribute to boosting cooperation and exchange among countries and regions in fields of trade, economy, science and technology.

The DPRK is no stranger to trade fairs. By my calculations, the DPRK has hosted the Pyongyang Spring International Trade Fair since 1998 and the Pyongyang Autumn International Trade Fair since 2005. These events, which draw vendors from across the planet, are held at the Three Revolutions Exhibition in Pyongyang.

This is the first trade fair of which I am aware that is being held outside of Pyongyang. The Rajin-Sonbong area was the site of the DPRK’s first experiment with special economic zones. Although it did not generate the expected level of interest, North Korean authorities are hoping that this time around they will be able to capitalize on their proximity to the Chinese market (see here and here).

Additional Information:

1. Previous posts on Rason here.

2. Previous Posts on the Pyongyang International Trade Fair here.

3. The Chinese have been upgrading the road that links the Rason port with the Chinese border.

4. A few days ago I posted a preliminary list of DPRK trade companies published in Foreign Trade magazine. I imagine that more than one of them will have a presence at the trade fair.

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The Rason Economic and Trade Zone to Adopt the Singapore Model

Thursday, June 30th, 2011

Institute for Far Eastern Studies (IFES)
2011-6-25

Since the June 8 and 9 groundbreaking ceremonies for joint development projects between North Korea and China were held, attention has been directed toward North Korea’s international economic activities. The Japan-based newspaper, Chosun Shinbo, featured an interview article regarding these collective projects, including the areas of Hwanggumpyong and Wiwha Islands and the Rason Economic and Trade Zone.

According to North Korea’s Committee of Investment and Joint Venture, Rason Economic and Trade Zone is, “an important national undertaking following the teachings of Kim Il Sung. . . . Rason will soon become the entrepot port like Singapore, enhancing the lives of North Korean people.”

In addition, it was mentioned that the development of economic zones in Hwanggumpyong and Wiwha Islands will solidify the already strong DPRK-China friendship and expand the boundaries of international economic relations.

According to North Korea’s Committee of Investment and Joint Venture, politically, “Stable political atmosphere allow investors to engage freely in investment activities and necessary legal measures were taken creating favorable legal conditions for foreign investments. This includes the establishment of Joint Venture Law (of 1984) and other related laws.” Economically, “All the necessary substructures supporting the business operation are set. Workers will all be provided free 11-year education and tax rates are the lowest in the region and for those investors investing in sectors that the DPRK is promoting, will be provided with preferential treatment.”

North Korea is encouraging foreign investments especially in the industrial, agricultural, transportation, construction, financial, and tourism sectors. In particular, adopting state-of-the-art production technology is considered most important. This is to increase the area’s competitiveness in the international market through the production of items that have high export value. However, investment restrictions are placed preventing exports on natural resources like ore and coal.

The Committee also stressed the accomplishments of economic cooperation with China and Egypt and revealed plans of passing a double tax avoidance agreement with China, who is the largest foreign investment for North Korea.

The Egyptian company Orascom Telecom has invested in telecommunications, construction, and financial sectors in North Korea. The president of Orascom is said to have met with Kim Jong Il early this year, announcing his plans of expanding investment in the country.

In addition, the Committee reiterated building an independent national economy does not exclude international economic relations. It explained, “We are trying to resolve our shortcomings through international economic activities while maximizing our domestic technology and resources. This is the principle of socialist economic construction.

The Committee of Investment and Joint Venture was established last July, which is a central state organization under the Cabinet overseeing joint ventures and investments. It is in charge of guiding, supervising and administering the inducement of investments from abroad. It is a government body on the level of the Ministry of Trade, which it has close affiliations with. The Ministry is a central organization controlling general trade activities while the Committee is mostly responsible for attracting foreign investment, joint investment, and ventures.

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Kim Jong-chol still likes Eric Clapton

Tuesday, February 15th, 2011

Back in 2006, Kim Jong-il’s second known son, Kim Jong-chol (김정철), was photographed at an Eric Clapton concert in Germany.  Well, according to Yonhap, he is still a fan today:

Kim Jong-chol, the second son of Pyongyang leader Kim Jong-il, was seen at a concert by world-renowned guitarist Eric Clapton in Singapore, a South Korean broadcaster reported on Tuesday.

Kim, dressed in black pants and a T-shirt, was accompanied by some 20 men and women at a concert hall in Singapore on Feb. 14, two days ahead of his father’s birthday, according to Korea Broadcasting System (KBS).

UPDATE: some pictures and apparently Kim Jong Chol’s sister: Choson IlboDaily NK

Read the full story here:
N. Korean leader’s 2nd son seen in Singapore: KBS
Yonhap
2/15/2011

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Singapore reportedly toughens DPRK trade laws

Friday, October 29th, 2010

UPDATE (10/29/2010): According to the Straits Times:

Singapore has tightened its trade controls by imposing new prohibitions on transactions with North Korea and Iran.

Singapore Customs said in a statement on Friday that the latest regulatory revisions, effective from Nov 1, are timely in the light of ongoing global efforts to curb illicit diversions of controlled goods and technology to rogue entities and sanctioned countries such as North Korea and Iran. Both countries stand accused of trying to start nuclear weapons programmes.

At present, prohibitions on them include arms or related materials, certain vacuum systems and pumps, compressors and gas blowers. They also cover luxury goods such as cigars, wines and spirits and even plasma televisions. But in the revised list, there will be new prohibitions on any arms as defined by the United Nations Register of Conventional Arms, and related materials.

These include among other things: weaponry, battle tanks, combat aircrafts, warships, armoured combat vehicles. The latest amendments to the list of prohibited imports, exports and goods to or from North Korea and Iran are in line with recent United Nations Security Council Resolutions’ sanctions imposed on the two countries, as well as Singapore’s continuous commitment to its international obligations.

Singapore’s trade with North Korea and Iran accounted for less than 0.4 per cent of the Republic’s total trade value of $747 billion last year. The small amount of trade typically revolved around commodities and other agricultural, tobacco and consumer goods.

Traders are strongly encouraged to implement effective internal export control compliance measures to screen the consignees and end-users of their exports, Singapore customs said.

ORIGINAL POST: According to Today Online:

After relying on its existing laws for more than a year, Singapore is adding more bite to its implementation of United Nations sanctions against North Korea.

According to documents on the Government’s electronic gazette website, the Republic is introducing additional legislation to meet its obligations to the resolution adopted in June last year by the UN Security Council (UNSC).

From Nov 1, it will be an explicit offence to breach the measures imposed by the UNSC on various individuals, entities and goods and services from the hermit kingdom.

The prohibitions will apply to all persons in Singapore and any Singaporean abroad and cover a wide range – from financial and bunkering services to the supply and procurement of certain items.

These not only include military-related material but also luxury goods, if it is believed to be in relation to any person who might be involved in North Korea’s weapons programmes. The Singapore Customs website lists 14 categories of luxury goods, such as cigars, wines and spirits, fur products, perfumes and cosmetics, plasma televisions, personal digital music players and luxury cars. Works of art and musical instruments are also included.

When the UNSC adopted the resolution last year, Singapore’s Permanent Representative to the UN, Ambassador Vanu Gopala Menon, had informed the council that the city-state had the “necessary legislative framework in place to meet its obligations”. Such laws include the Strategic Goods (Control) Act, the Merchant Shipping Act and the Immigration Act.

When contacted, a Ministry of Foreign Affairs spokesperson said the Republic “is obliged to implement the UNSC Resolutions on North Korea. We take these obligations seriously”.

But in his letter dated Aug 3 last year, Mr Menon also said that a regulation was being drafted to give effect to the provisions of Resolution 1874 (2009), which had been imposed in response to North Korea’s second nuclear test in May last year.

The upcoming legislation comes more than a year after the Monetary Authority of Singapore prohibited financial institutions from carrying on transactions and services with North Korea relating to banned material and listed individuals.

Few companies incorporated in Singapore have dealings with North Korea, though.

One such company is Maxgro Holdings.

According to its website, it is a concession owner and infrastructure development company that holds a 70-per-cent stake in a joint venture with the Pyongyang government to grow eight million hard-wood timber trees on a $23-million, 20,000-hectare plantation near Pyongyang. Other dealings with the Communist state include pharmaceutical and tourism projects.

Previous Singapore/DPRK posts can be found here.

Read the full story here:
S’pore toughens laws against trade with N Korea
Today Online
Esther NG
10/8/2010

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DPRK helping probe in Singapore

Monday, August 30th, 2010

According to the AFP:

The North Korean embassy is helping with investigations into a traffic incident involving one of its vehicles in the city-state’s brothel district, Singaporean officials said.

“The Ministry of Foreign Affairs has been in touch with the DPRK ambassador on this matter,” a ministry spokesman said in a statement issued late Friday.

“The DPRK ambassador has assured us that the DPRK embassy respected Singapore’s laws and would extend its full cooperation with the authorities in resolving the issue.”

The Democratic People’s Republic of Korea (DPRK) is the North’s official name.

Singapore police told AFP Saturday an investigation into the incident was still ongoing.

The traffic incident took place in the pre-dawn hours of Thursday in Geylang when a parked car was hit by the embassy vehicle, according to an earlier police statement.

“No one was in the stationary car, which suffered a slight dent at the rear,” the police statement said.

Geylang is Singapore’s red light district, where prostitutes openly offer their services on pavements and in licensed brothels, with short-time motels scattered along the neighbourhood’s narrow streets and lanes.

Read the full story here:
N.Korea helping to probe crash in Singapore
AFP
8/28/2010

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Aminex to begin oil exploration in the DPRK

Thursday, June 3rd, 2010

UPDATE 2: According to Yonhap:

North Korea has inked a 10-year contract with British oil and gas company Aminex to explore and extract oil on the seabed off the country’s east coast, the Financial Times (FT) in London reported on June 1.

For the deal, North Korea presented Singapore-registered Chosun Energy as its representative to establish a 50-50 joint venture, Korex, with Aminex, the FT said, noting a filing with Singapore’s Accounting and Corporate Regulatory Authority.

Chosun Energy is an investment holding company operated by North Korea with a paid-up capital of US$1.2 million, according to the newspaper. But the newspaper did not elaborate further details on the company.

Korex will search for oil in an area of 50,681 square kilometers (20,272 square miles) in parts of North Korea’s east coast, Aminex said in a statement.

The contract with the British company, which is listed in London and Dublin, was signed around mid-May in London by officials from the North’s oil company and a head official for Aminex.

“Officials from North Korea’s state oil company traveled to London two weeks ago to conclude the 10-year contract. Lord Alton, chairman of Britain’s parliamentary North Korea group, says he showed the officials around parliament,” the FT added.

North Korea has contacted foreign companies and investors to attract foreign capital for searching for its rich natural resources, including crude oil. In 1997, the North claimed it had reserves of 5 to 40 billion barrels of oil.

North Korea has maintained ties with Animex since 1998. Aminex has been hunting for potential oil reserves in the North Korean portion of the Yellow sea since it signed with the country for joint oil and gas development in January 2005.

UPDATE 1: According to the AFP:

The head of a London-based energy firm that signed a deal to search for oil off North Korea said on Thursday he hoped to start exploring in a year but was closely monitoring tensions on the peninsula.

Aminex PLC executive chairman Brian Hall told AFP he expected “field work in about a year” off the communist nation’s east coast and aimed to “find substantial reserves”.

However, relations on the peninsula have become strained after North Korea was accused of carrying out a torpedo attack on a South Korean warship in March that left 46 sailors dead and stoked fears of an armed conflict.

Pyongyang has denied involvement in the sinking and threatened war in response to a trade suspension and other reprisals by the South.

Asked about the timing of the North Korea contract, Hall said “we have been working with (the) North Koreans for over a decade and an agreement such as the one we have recently signed takes many months to negotiate”.

He added: “Naturally we will keep a very close eye on the tensions on the peninsula, as we have done during previous incidents, but our project is of a long-term nature and well thought through.”

Aminex announced last week that an associate company had signed a 10-year contract with North Korea to search for oil in an area of about 50,681 square kilometres (20,272 square miles) in the Korean East Sea.

Hall declined to give an estimate of the potential deposits.

The contract was signed by Korex — a 50-50 venture between Aminex and Singapore-registered Chosun Energy — and the Korean Oil Exploration Company, the North’s state oil firm.

Victor Shum, an analyst with energy consultancy Purvin and Gertz, said there was every chance that oil would be found in the area but stressed the reserves must be of a significant size in order for exploration to progress further.

“The question is whether any oil reserves that may be discovered there are going to be economically viable to extract,” Singapore-based Shum told AFP.

“I think there has been interest certainly by oil companies so there is therefore a possibility of something there … So far the production isn’t large,” he said.

Aminex, with listings on the London and Irish stock exchanges, describes itself as an upstream oil and gas company with concessions in several countries including the United States, Kenya and Egypt.

According to a filing with Singapore’s Accounting and Corporate Regulatory Authority obtained by AFP, Aminex’s partner Chosun Energy is an investment holding company with a paid-up capital of 1.2 million dollars.

It listed its address as the German Centre in Singapore, a building that hosts small and medium-sized foreign companies, and named three directors — an American, one Briton and a Singaporean.

But staff at the German Centre told AFP the company had moved out.

Singapore is a major financial centre and corporate hub, attracting companies from all over the world because of the ease of doing business and access to funding.

North Korea, one of the world’s most impoverished countries, is starved of energy and foreign exchange after decades of isolation as well as economic sanctions, but is believed by US officials to have up to six nuclear weapons.

South Korea’s ban on most trade with North Korea in response to the ship sinking will cost the communist state hundreds of millions of dollars a year, according to figures from the Seoul-based Korea Development Institute.

ORIGINAL POST: According to the Financial Times:

Aminex, listed in London and Dublin, has formed a company, Korex, to pursue the project jointly with Chosun Energy, a Singapore-listed company that identifies James Passin as one of its directors, according to a filing with Singapore’s Accounting and Corporate Regulatory Authority.

Mr Passin is a New York-based fund manager. His Firebird Global Master Fund II half owns Chosun Energy and targets resource deals in frontier markets.

Officials from North Korea’s state oil company travelled to London two weeks ago to conclude the 10-year contract. Lord Alton, chairman of Britain’s parliamentary North Korea group, says he showed the officials around parliament.

Brian Hall, chairman of Aminex, acknowledged the contract had been concluded at a sensitive time given the rising tensions between Seoul and Pyongyang, but stressed he had opened ties with energy-starved North Korea in 1998. Since then, securing output rights from an exploration block had been “stop-go”.

Additional Information/thoughts: 
1. Here is a previous short post on Aminex.

2. The economics literature overwhelmingly suggests that natural resource windfalls are generally bad news for weak states/developing countries—often fueling corruption, repression, and violence.  The windfall almost never translates into better general working conditions or increases in general income (Botswana being an exception).  There are plenty of papers out there making this point (“Natural Resource Curse”), so feel free to refer to your favorite.

3. I would be weary of building an offshore oil rig in the DPRK.

4.  If oil is discovered in Korea’s East Sea, look for Japan, South Korea, and Russia to begin “drinking from their milkshake”.

Read the full stories here:
Oil firm says N.Korea exploration to start in a year
AFP
Bernice Han
6/2/2010

Anglo-Irish group seeks North Korean oil
Financial Times
Christian Oliver, Kevin Brown
6/1/2010

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DPRK Merchants (1)* vs. Somali Pirates (1)

Tuesday, March 16th, 2010

UPDATE: Well I am very surprised. Someone (probably a Singaporean) paid the ransom for the North Korean crew. According to the AFP:

Somali pirates on Tuesday freed a chemical tanker with 28 North Korean sailors on board after receiving 3.5 million dollars in ransom, a maritime official said.

The Virgin Islands-owned, Singapore-operated MV Theresa VIII was hijacked on November 16 some 180 nautical miles northwest of the Seychelles.

“It was freed today. The crew is safe,” said Andrew Mwangura, the head of the East African Seafarers Assistance Programme.

Mwangura said a 3.5 million-dollar ransom was paid to free the tanker.

The European Union naval force off the Somali coast confirmed the payment of a ransom.

“An unknown ransom was exchanged on the morning of 16 March and the ship is now underway and heading out to sea,” the EU NAVFOR said in a statement.

“No immediate assistance has been requested but EU NAVFOR will continue to monitor the situation,” it added.

The ship had been moved between the pirates’ stronghold coastal villages of Garaad and Harardhere in northern Somalia.

Its captain, whose nationality was not revealed, died a few days after the hijacking in which the pirates opened fire.

The MV Theresa VIII was headed to the Kenyan port town of Mombasa, its initial destination, Mwangura said.

The Somali pirates, who raked in at least 60 million dollars in ransom money last year, currently hold at least six ships and around 120 seamen hostage.

There is also a DPRK flagged vessel that was hijaked by Somali pirates in February.  As best I can tell, this vessel is still being held for ransom.

ORIGINAL POST: In October 2007 the US Navy assisted some North Korean merchants in their victory over Somali pirates.  In a grudge match this week, however, the North Koreans succumbed to the new Somali pirate team.  The score is now 1-1.

According to the BBC:

A chemical tanker with a crew of 28 North Koreans has been hijacked by pirates in waters off Somalia, the EU’s naval force (Navfor) says.

The MV Theresa VIII, a Singaporean-operated tanker, was taken on Monday in the south Somali Basin, 180 nautical miles north-west of the Seychelles.

It had been heading for Mombasa, Kenya, but was diverted north, Navfor said.

The MV Theresa VIII, the owner of which is based in the Virgin Islands, is a tanker of 22,294 deadweight tonnes, said Navfor, the EU naval force operating in the region to protect shipping.

Some thoughts:

1. Globalization in action: The ship is owned by someone in the Virgin Islands, managed by a Singaporean company, operated by a North Korean crew, and taken hostage by Somali pirates.

2. As sad as it sounds, hiring North Korean crews might be an effective anti-piracy strategy.  Here is why: Pirates hold (a) the ship, (b) the cargo, and (c) the crew as hostages to be traded for ransom. Using simple expected value calculations, this means that the rational pirate will pillage if:  [P(probability of success)] x [$(a+b+c)] > the next best opportunity to earn income.  This ignores risk tolerance, but you get the idea. If you lower the $ value of the payload by hiring workers who will not earn a ransom, then the expected value of the captured ship falls and fewer pirates will attack.  If this plays out in a way that the Somalis lose money on North Korean crews (because who is going to pay their ransom), we should expect to see more shipping companies hiring North Korean crews and painting North Korean flags on their vessels! Old ships + North Korean crew + agricultural goods = waste of time for pirates.

*  win with assistance from the US Navy.

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