Archive for the ‘Companies’ Category

Q1 of Foreign Trade Magazine highlights

Friday, April 27th, 2018

The North Korean web portal Naenara has been negligent in keeping us updated with the latest publications from the DPRK. However, through USKI-SAIS I was able to obtain a copy of the most recent issue of Foreign Trade Magazine (2018-1). I post the most interesting parts (to me) below. I don’t have time to go through them and analyze them here, so if you are interested, you may do so.

Topics include:
1. Regulations of the DPRK for Labor in Economic Development Parks (apologies for image quality)

 

2. Pukchong Agriculture Development Zone

3. Law of the DPRK on the Chamber of Commerce

4. Waudo and Jindo Export Processing Zones

5. Prospect of processed goods export in the DPRK

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What North Korea’s 2017 budget report and 2018 projections tell us about its economy

Monday, April 16th, 2018

By Benjamin Katzeff Silberstein

What could be better on a rainy Sunday (at least for those of us on the U.S. east coast) than to delve a little deeper into North Korea’s 2017 budget reporting? I don’t have as much time as I would wish at the moment to give the topic the attention it deserves, so I would advise readers who wish to do more research on their own to use Ruediger Frank’s previous writing on the topic as a guide to making sense of the most recent budget report (see, for example, here, and here), in combination with information about the budget report itself.

Before delving into some points from the report, here’s the usual mantra about figures from North Korea: numbers should never be taken as exact, and their reliability is sketchy at best. It is impossible to tell for sure what is propaganda and what is actual, realistic information, and all figures should be taken as indicative only.

With that out of the way, here are some observations, in no particular order:

The economy has grown, according to North Korea’s own figures, but by less than previous yearsThat is, if you take Ruediger Frank’s view that growth of state budget revenue is a proxy for overall economic growth, which went up by 4.9 from the previous year. This is significantly lower than the past few year’s estimates and results, so in a way, it’s an admission of a real decrease in economic performance. Thus, it is an admission of sorts that the economy isn’t doing all that well at the moment. There are several potential reasons for this figure (which, again, may not even be true or accurate). Recall that exports only started dropping in any drastic sense from early fall last year, when Chinese sanctions enforcement began.

For 2018, the “envisaged” growth rate is much lower, at 3.2 percent. Perhaps this, too, is overtly optimistic given how difficult things seem at the moment. Or perhaps it’s a realistic anticipation of a real downturn, but no disaster.

The budget report recognizes that a significant share of economic activity occurs out of the central government’s handsThough North Korean publications do not explicitly recognize private economic activity, they’re less and less shy about talking quite openly about key facets of the marketized system. Frank pointed out previously, for example, that budgetary items such as revenues from provinces, according to some, essentially represent incomes from the non-centrally planned share of the economy. If this interpretation is correct, over a quarter of economic production (26.1%) is openly admitted by Pyongyang to be out of central planning hands. The share may well be more than the double of that in reality, depending on how you count. In any case, the budget report – and this isn’t new at all, I should point out – recognizes that a significant share of the economy is out of central government hands: “[…] 도,시,군들에서 자체의 수입으로 지출을 맞추고 많은 자금을 중앙예산에 들여놓을것으로 예견하였다 (Provinces, cities and counties are expected to balance expenditure with their own revenue and contribute lots of funds to the central budget)”.

The state foresees continued growth from private and semi-private enterprise revenue next yearTo see why, consider two budget posts that may appear especially peculiar for a nominally socialist economy: the social insurance fee (사회보험료수입금) and the real estate rent (부동산사용료수입금). The income from the former is expected to grow by 1.2 and 1.8 percent respectively. Revenues from the transaction tax (거래수입금) anticipated to grow by 2.5 percent. These, too, have been mentioned in previous budget reports so their appearance per se is not new. Information about what exactly they are is rather tricky to come by, and I’m grateful to my good friend and colleague Peter Ward for sending me excerpts from a 2010 North Korean dictionary (광명백과사전) on the social insurance and real estate rent fees.

The social insurance fee, basically, is just what it sounds like: a fee charged from “socialist organs and factories” as well as individual worker’s earnings, to help guarantee a decent life for “people who loose their ability to work [로동능력을 잃은 사람]” as well as the elderly and others in need. The real estate usage fee is explained as a revenue from “socialist organs and factories” charged in order for the government to maintain the quality and standard of its property, i.e., its buildings and land (which technically is all the land and all the buildings in the country). In other words, this is a fee charged to enterprises in a general sense, it seems. Both the social insurance fee and the real estate usage fee are probably best thought of as general revenue streams for the government, rather than income later used for a specific purpose. The transaction tax was first mentioned in the budget report for 2011, and is most likely a form of general tax on enterprise activity.

Again, these revenue flows are not new, and neither is their reporting. But fact that these revenue channels are institutionalized parts of the official economy say something about how far North Korea has gone from the Stalinist economic model, even nominally speaking. In a fully planned economy, there would be no need for fees or taxes (and indeed, North Korea claims to be a tax-free society) because all production would be planned, and its results collected in full and distributed by the state. Fees and taxes are only necessary when economic production occurs outside of state hands, which likely about half or more of economic activity in North Korea does.

Conclusion

No reader should take this post to mean that the North Korean economy is doing well, improving, or remains untouched by sanctions. Politically, it would likely be very tough for the state to report a major downturn in a year of such scaled-up sanctions and international pressure. But the overall assessment, that things are getting tougher but are not yet catastrophic in any way, may well be accurate. The question is how long it can go on this way, and it seems to me that economic projections for 2018 may well be more optimistic than they should be. Of course, with China’s sanctions enforcement reportedly letting up in some respects, there might be more cause for optimism than we realize.

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Ri Jong Ho, high-level defector and former official in Office 39, says North Korea gets much more oil from Russia than previously known

Saturday, July 1st, 2017

Benjamin Katzeff Silberstein

In a fascinating interview by Kyodo News’s Tomotaro Inoue, Ri Jong Ho, a former high-level official in Office 39 of the Korean Worker’s Party, makes several fascinating claims about the supply of fuel to North Korea:

North Korea secures up to 300,000 tons of oil products from Russia each year through Singapore-based dealers, a defector who formerly managed funds for the leadership has told Kyodo News, posing a challenge for the United States as it seeks to isolate Pyongyang.

“North Korea has procured Russia-produced fuel from Singapore brokers and others since the 1990s…It is mostly diesel oil and partly gasoline,” Ri Jong Ho, 59, a former senior official of Office 39 of the Workers’ Party of Korea, said recently in the U.S. capital in his first interview with media under his own name.

Ri also said North Korea relies more on Russia than China for fuel to keep its economy moving, indicating that the U.S. drive for Beijing to restrict oil supplies over Pyongyang’s nuclear and missile programs will only have a limited effect.

“It is a wrong perception that North Korea is completely dependent on China,” he said.

Petroleum products have been shipped to North Korea by tankers leaving Vladivostok and Nakhodka, both in the Russian Far East, with the fuel widely used for cars, ships and trains, helping to support the North’s economy, Ri said.

Other sources familiar with the fuel deals said the petroleum products ending up in North Korea are often purchased by brokers who claim they are destined for China, with the items procured using forged paperwork.

Ri, who defected to South Korea with his family in October 2014, provided details of the activities of Office 39.

The secretive entity, said to have been established by former North Korean leader Kim Jong Il in May 1974, is subject to international sanctions as the United States and other Western countries believe it is engaged in illicit economic activities and the management of slush funds for the leadership.

He said North Korea has been trying to reduce its economic reliance on China, Pyongyang’s most important benefactor, since leader Kim Jong Un issued an order to expand trade with Russia and Southeast Asian countries in August 2014.

The order followed Chinese President Xi Jinping’s visit to South Korea a month earlier, during which he and then South Korean President Park Geun Hye expressed opposition to North Korea’s nuclear weapons development. It was the first time for a Chinese president to visit South Korea before traveling to the North.

Ri said the North Korean leader was “infuriated” by the visit, going so far as to call China an “enemy state,” and began taking measures to boost trade with Russia.

According to Ri, Office 39 has five central groups and systematically acquires foreign currency by sending laborers overseas as well as through gold mining and exports.

“It is an organization that manages the supreme leader’s coffers and the party’s funds to rule the country. It also leads trade activities to earn foreign currency,” Ri said. The office has enormous power as it is directly linked to the leadership and is independent of other government organs, he added.

Ri admitted that Office 39 has evaded U.N. sanctions by asking Chinese and Russian contacts to allow the use of their names for the opening of bank accounts for trade settlement.

The activities of Office 39 require the involvement of hundreds of thousands of people, including those in rural areas who produce items for export. Ri said the bureau is now headed by Chon Il Chun, first vice department director of the party’s Central Committee and a former classmate of Kim Jong Il, the current leader’s father.

A native of Wonsan on North Korea’s east coast, Ri was told to work in Pyongyang by the Central Committee in the mid-1980s. He operated a shipping company at Office 39’s Daehung group and later headed a trade control section in the group between 1998 and 2004.

The Daehung group earns revenue through farm exports and shipping operations, among other means. With exclusive rights to trade “matsutake” mushrooms and snow crabs, it was actively shipping those products to Japan before Tokyo imposed a total ban on trade with the North about 10 years ago.

The four other central groups are Kumgang, which dominates gold export activities, Daesong, involved in the shipment of processed products and intermediate trade overseas, Daesong Bank, in charge of the office’s banking operations, and a group dispatching workers to other countries.

Asked about the possibility that the foreign currency earned by North Korea is being used for its nuclear and missile development programs, Ri only said, “It is up to the supreme leader how to use the funds.”

North Korea receives 500,000 tons of crude oil each year through a pipeline from China, resulting in around 70,000 to 100,000 tons of gasoline and about 100,000 tons of diesel oil after refining, but the oil products are exclusively used by the North Korean army and are not good enough for cars that carry the elite, Ri said.

He also said crude oil purchased from other countries is refined by foreign companies based in China, leading to the importation into North Korea of an additional 50,000 to 100,000 tons of gasoline.

Full article here:
N. Korea procuring Russian fuel via Singapore dealers: defector
Tomotaro Inoue
Kyodo News
2017-07-28

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UK freezes KNIC assets

Monday, April 24th, 2017

According to The Guardian:

The UK has frozen the assets of a North Korean company based in south-east London after claims it funnelled cash to Pyongyang’s nuclear weapons programme.

The Korea National Insurance Corporation (KNIC) is registered at a property in Blackheath. The EU has already imposed sanctions against the company, which it describes as “generating substantial foreign exchange revenue which is used to support the regime in North Korea”. The move by Brussels followed an UN resolution.

The EU warned: “Those resources could contribute to the DPRK’s nuclear-related, ballistic missile-related or other weapons of mass destruction-related programmes.”

The company is registered to a detached property on Kidbrooke Park Road among suburban houses in an affluent part of London. Its entry on Companies House now describes KNIC as “closed” since 6 October 2016. Accounts show that in 2014 it had total assets of 130bn North Korean won, the equivalent of £113m.

According to EU sanctions imposed in July 2015, the KNIC’s headquarters in Pyonyang is linked to Office 39 of the Korean Workers’ party. In 2010 the US Treasury described Office 39 as “a secretive branch of the government of the Democratic People’s Republic of Korea that provides critical support to North Korean leadership in part through engaging in illicit economic activities and managing slush funds and generating revenues for the leadership”.

A spokesman for HM Treasury said: “We cannot comment on individual cases. However, the UK has fully complied and implemented the UN sanctions regime in relation to North Korea and North Korean companies.”

Through the EU regulations, the UK imposes restrictions on a range of goods from entering or leaving North Korea and imposes a travel ban and an asset freeze against people designated as engaging in or providing support for its programmes for weapons of mass destruction and ballistic missiles.

Under the same sanctions, the funds and economic resources have been frozen of four Hamburg-based North Koreans who ran the KNIC branch in Germany and two other regime officials who have since moved back to Pyongyang.

The Sunday Times, which first reported the freeze on the assets of the UK branch, reported that a North Korean man at the Blackheath property told it that the insurer’s main UK director, Ko Su-gil, had left Britain in September.

Read the full story here:
UK freezes assets of North Korean company based in south London
The Guardian
2017-4-23

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Daesong Bank launches Kumgil Card

Friday, December 16th, 2016

Simon Cockerell of Koryo Tours has posted images of a new prepay card offered by Daesong Bank (대성은행/Taesong Bank) called “Kumgil” (금길) or “Gold Road”:

The front of the card contains the brand name, logo (a diamond?), sponsoring bank name, and the phrase “electronic payment card”. I spoke with James Pearson at Reuters about the 16 digit number, and based on his research it does not appear to be directly related to the Foreign Trade Bank (FTB). Mr. Cockerell reports on his Instagram page that the card uses the same retail payment equipment as the Narae Card (which is controlled by the FTB), so that means the two banks (Daesong and FTB) have an established clearing mechanism to settle electronic balances (Q: Are other NK banks using this same equipment/part of the same network?). FTB is supposedly the official repository of the state’s hard currency reserves for the purposes of managing foreign trade and domestic hard currency transactions for imported goods, though it apparently does not have a monopoly on individual/company hard currency accounts. Daesong Bank (Taesong) is has been linked to the KWP’s Office 39.

The back of the card reads:

주의사항 (Caution)
1. 카드앞면의 전자요소가 손상되지 않도록 주의하여주십시오.
Be careful not to damage the chip on the front of the card
2. 암호를 련속 3번 틀리게 입력하면 카드의 사용이 중지됩니다.
The card will stop working if you enter the wrong password 3 times.
3. 카드를 분실한 경우에는 즉시 카드발급지점에 알려주십시오.
If you lose the card, immediately notify the branch that issued the card.
4. 기타 제기되는 문제들은 카드발급지점에 문의하여주십시오.
For any other issue, consult the branch that issued the card.

This card is apparently for hard currency purchases only, and it was launched in early 2016. It is functionally the same as the Golden Triangle Bank Electronic Payment Card, Jonsong Electronic Payment Card, KoryoBank Electronic Payment Card, Narae Electronic Payment Card, Ryugyong Commercial Bank Electronic Payment Card, and Sowol Electronic Payment Card.

I should also mention that none of these are “debit cards” since they are not linked with a specific checking (demand) deposit. These are pre-pay cards only. These cards are essentially private digital currency issued by an established bank. The bank maintains control of the hard currency used to top off the cards, which it uses to generate income (float), while the card holder gains the convenience of not having to carry cash, which does offer some security from petty crime, but makes retail transactions more observable to security agencies.

Mr. Cockerell also posted the picture of a loyalty card for the Moran Shop (“Bar”):

He reports that “every time you spend money there it’s recorded on the card and when you reach $500 equivalent in total then there’s some free gift.”

I have written about some other loyalty programs here and here.

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Foreign Trade report on Slovenian delegation

Tuesday, May 17th, 2016

According to Foreign Trade (2016 v. 2, p.7):

News from DPRK Chamber of Commerce in 2015

The DPRK Chamber of Commerce invited a delegation of the Slovenian Chamber of Commerce headed by Yan Mishra, director of the external cooperation agency, to discuss the issues related with developing nongovernmental economic exchanges and trade and investment in the Wonsan-Mt Kumgang International Tourist Zone.

During their stay the delegation exchanged opinions about the practical issues arising in realizing economic exchanges and trade between the businesses of the two countries and agreed to develop bilateral relationship and cooperation to activate non-governmental economic exchanges.

And they discussed the issues about a possible visit to Pyongyang in 2016 by a delegation of the Slovenian Chamber of Commerce comprising businesses that wish economic exchanges and trade with the DPRK and its presentation of rolling stock and electric products like tractor, timber transporter and motor generator at the forthcoming Pyongyang International Trade Fair.

Another agenda item of discussion was a possible participation by the trade companies of the DPRK in the international trade fair to be held in Slovenia in 2016 and their visit to factories in the country.

The investment policy and environment in the DPRK and the work of economic development parks like the Wonsan-Mt Kumgang International Tourist Zone were introduced, and possibilities of investment and cooperation by businesses of the two countries in these parks were discussed.

In addition, the DPRK Chamber of Commerce arranged meetings between tens of local organs like the Korean Association for the Research and Development of Greening, Plant Import and Export Company, Kumsu Corporation, Korea Titanium Development and Trading Company, Central Imports Exchange Company and members of the Slovenian delegation so that they can exchange opinions on the matters of mutual concern.

DPRK Chamber of Commerce
Add: Central District, Pyongyang, DPR Korea
Tel: 0085-02-3815926
Fax: 0085-02-3814654

Screenshot of the article here.

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Insurance products promoted to target foreign investment enterprises

Tuesday, January 26th, 2016

Institute for Far Eastern Studies (IFES)

North Korea is promoting insurance products targeted at foreign-investment companies with increasing efforts to attract foreign capital through special economic zones.

On January 19, 2016, the state-run Korea National Insurance Corporation (KNIC) made an official announcement on its website on new insurance products for the economic development zones. It announced that KNIC is promoting various insurance products to protect life and property for foreign investment companies, including fire insurance and accident liability insurance for gas accidents, third party automobile liability insurance, and third party construction liability insurance.

In addition, KNIC announced that it will offer a variety of insurance products according to personal and business demands. The website elaborated, “in order to meet the growing insurance need in the economic development zones, KNIC is introducing development of various insurance products and to realize the international insurance trends and the diversification of the insurance sector to ensure the prompt insurance coverage to remain as credible institution among foreign companies.”

The KNIC first began to operate fire, automobile, gas accident liability insurances to tenant companies in the Kaesong Industrial Complex from 2005.

Meanwhile, North Korea’s Presidium of the Supreme People’s Assembly (SPA) adopted the insurance regulation along with property regulation for the Economic Development Zone (EDZ) last July. The insurance regulation consisted of four chapters and 52 articles, but specific details were not disclosed. However, details on insurance contracts, insurance offices, as well as installation and operation of the insurance office were revealed.

Previously, North Korea enacted new EDZ laws in May 29, 2013 which guaranteed special privileges for economic activities conducted in special economic zones as specified in the law. On November 6, 2013, three EDZ Operational Regulations were adopted (management institutional regulations, establishment regulations, and business establishment and operational regulations) by the Presidium of the SPA.

This new property insurance policies and regulations appear as a new measure to ensure added legal protection to improve investment environment of foreign capital from the three existing operating regulations.

In February 2015, Ri Sun Hak, department director of the Ministry of External Economic Relations, stated in an interview with the KCNA, “Our country is fully equipped with the legal environment to protect the legitimate rights and interests of investors.” The news also depicted ‘foreign investment law,’ ‘economic development law,’ and ‘external economic arbitration law’ were newly enacted or revised. The foreign investment laws was revised to streamline investment formalities and to provide various services for foreign-investment companies.

However, the question still remains as to gauge the effectiveness of North Korea’s insurance operations. As the international community, including the UN Security Council, is likely to impose stronger sanctions to condemn North Korea’s fourth nuclear test, the solvency of North Korea’s insurance companies remains uncertain and unreliable.

In addition, the KNIC’s Germany branch and President So Tong Myong (Seo Dong-Myung) are both on the EU’s list of sanctions, which is likely to act as an impeding factor for smooth insurance operations. The EU listed six KNIC senior employees to the sanctions list subject to an EU-wide asset freeze and travel ban.

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Mansudae ODG building Angkor e-museum

Sunday, December 6th, 2015

Angkor-emueum-3

Pictured Above (Google Earth, 2012-10-26): An image of the Angkor E-Museum under construction in Siem Reap Cambodia

UPDATE 7 (2016-2-1): The Guardian publishes more information on the museum.

UPDATE 6 (2015-12-6): The museum opens! According to the Khmer Times:

After five years of building and delays, the $24 million Angkor Panorama Museum in Siem Reap was opened on Friday by Deputy Prime Minister Sok An, cementing growing ties between the Kingdom and North Korea, especially in Siem Reap.

Mr. Sok An said the 6,000 square meter building reinforced both cultural and economic ties.

The project was signed in 2011, under which North Korea’s Mansudea Overseas Project Group will run the museum with the government under a build-operate-and-transfer operation for 10 years until it is handed over to the Apsara Authority.

In the meantime, profits will be split evenly.

“We did not sell this land. We have a joint committee and we studied the investment project on all fronts before the government approved it. We treat foreign investment equally,” said Mr. Sok An.

“We need more tourist products such as this to attract visitors to Cambodia. The museum… is another tourism attraction that features, through the painting [mural] inside the museum, how our Khmer ancestors went about their daily activities during Angkorian time,” he said at the opening ceremony attended by an estimated 1,000 people, including South and North Koreans.

The project caused concern with South Korea, fearing it could be used for propaganda in the province, which is the country’s biggest tourist attraction. The Angkor Wat temple complex was listed for protection by the UN cultural organization UNESCO in 1992.

The new museumincludes work from 63 North Korean artists.

North Korean ambassador Hong Ki Chol told the crowd: “It was well built in a picturesque place, surrounded by Angkor temples – the pride of Khmers. We are proud that this museum was built to show Cambodian culture in the prestigious era of Angkor.”

“I am confident the museum will make a positive contribution to giving a comprehensive understanding of ideas about all the Angkor temples and promote tourism,” he said.

Cambodia received 4.5 million tourists last year, a 20 percent increase on the previous year and accounting for about 16 percent of the country’s gross domestic product. The Kingdom is targeting 8 million tourists by 2020.

“We want to see tourists stay longer in Cambodia,” said Mr. Sok An, who is also chairman of the Apsara Authority. ”The longer they stay, the more it benefits our people and the economy.”

UPDATE 5 (2014-6-14): The museum is still not open. According to an article in the Phnom Penh Post:

Siem Reap is home to North Korea’s first overseas museum, a $15 million tribute to Angkor set in a Khmer-style building which is not yet open to the public.

Although construction began in August 2011, the doors have still not opened and the car park has not been built.

The operations manager, who gave his name only as Kim, said the museum would open in three or four months, and blamed the delay on the unfinished car park and ticketing booth.

But sources within the South Korean community say the slow progress is due to the plan to build an information centre about the temples, which has caused a rift with the Apsara authority, which manages the complex.

UPDATE 4 (2104-1-20): It is January 2014, and the Museum still has not opened. A recent visitor, however, offers images of the museum and some details. According to the article:

The Grand Panorama Museum is a gift to cement the “glorious friendship between Korea and Cambodia”, says a young translator from Pyongyang, capital of the hermit state.

The building site is still strictly off-limits as I visit but, despite the secrecy, the man in charge relents and provides a short tour.

The museum is right next to the new ticket booths for the temple complex. The avowed aim is to take visitors back to the heyday of Khmer culture, which flourished in Angkor between the 12th and 15th centuries.

The museum’s interpretation is not so much scholarly as glitzy, with otherworldly music and coloured lights. It also showcases the North Korean style of ultra-realist painting. A huge face of the Buddha looms at the entrance.

“A true-scale copy of the stone-hewn figures at the Bayon Temple,” says the building chief. The giant painting looks remarkably like a photograph. “Exactly,” beams the official. “But it’s not a photograph – it’s Korean art.”

The big Buddha is a product of the Mansudae art factory in Pyongyang, which employs a thousand artists turning out paintings in oil, acrylic and watercolours in the “social realist” style. Abstraction is not allowed.

The panorama is viewed from a platform in the centre of a circular room. The entire wall is a single vast picture, 13 metres tall and 130 long. It depicts the many temples and everyday scenes from the 12th-century Khmer era – or at least daily life as imagined by North Korean artists.

The official word is that all the scenes were painted “following consultations with Cambodian historians”, the site supervisor is anxious to point out. The finished product is strong on battles, with lots of bloodshed.

“We have a panoramic museum like this in Pyongyang too,” says the supervisor. Is it about ancient Korean history? “No, it’s about the Americans’ war.”

The illusion of being at the centre of the Khmer empire is extended by all manner of fake walls, cannons and plastic trees between the raised platform and the panorama wall. The models carefully match the objects visible in the painted panorama.

“We will have wind and fog-making machines so that the trees will rustle,” says the young translator.

The museum also offers scale models of the sprawling temple complex and a 3D theatre where films depicting temple construction will be screened.

North Korean art is on sale in the foyer, along with cute souvenir dolls dressed in what the North Koreans say is the authentic Khmer national costume.

One huge oil painting in the shop is definitely not for sale. It depicts a snow-covered landscape in Korea’s mountains with a little hut in the foreground highlighted by a shaft of sunlight.

“That is the birthplace of our Great Leader,” the supervisor says reverently. “The picture is here on loan.” The late North Korean founding father Kim Il-sung is revered like a god.

The article offers some pictures as well:

Angkor-emuseum-1

Angkor-emuseum-2

UPDATE 3 (2013-1-8): NK News explains some of the features the museum will contain and reports that it will open in April 2013.

UPDATE 2 (2011-11-26): Accoridng to AKP (Cambodia):

Cambodia has allowed the Democratic People’s Republic of Korea to build a cultural information centre (or welcome centre) in Siem Reap, the home of Angkor, as part of the government’s effort to attract more tourists, according to the Press and Quick Reaction Unit of the Council of Ministers.

In a meeting on Thursday, Deputy Prime Minister H.E. Dr. Sok An told the North Korean Ambassador H.E. Ri In Sok that Cambodia’s Apsara Authority is working with North Korean experts to build the centre, which will serve as a welcome centre for tourists who want information about Cambodia’s Angkorian history.

Officials of the Apsara Authority for the Protection and Management of Angkor and the Region of Siem Reap are working with 60 Korean experts and concerned institutions to ensure that the building design will feature the cultural values of both Cambodia and Korea.

The building, 70 metres in diameter and 124 metres in height, will be decorated with artistic works and drawings. Korean officials say that the world’s biggest artistic drawing will be displayed at the centre.

Dr. Sok An, who is also Minister in Charge of the Office of the Council of Ministers, told the ambassador that the centre will represent not only the image of the Democratic People’s Republic of Korea but also the good bilateral relations of the two Asian nations.

The outgoing North Korean Ambassador Ri In Sok, who is leaving Cambodia on Nov. 26 after a four-year term, told Dr. Sok An that North Korea wants unification with South Korea as soon as possible.

The ambassador was grateful to the deputy prime minister and the Royal Government of Cambodia as a whole for facilitating his diplomatic mission in Cambodia.

“I am pleased with the bilateral cooperation. I am pleased with the tremendous progress made by Cambodia over the past years,” said Ambassador Ri In Sok in the meeting.

The ambassador said the Democratic People’s Republic of Korea continues its good relations with the Royal Government of Cambodia thanks to the diplomatic legacy of the relations between His Majesty King Norodom Sihanouk, now retired, and the late Kim Il-Sung, leader of the Democratic People’s Republic of Korea.

Additional information:

1. Voice of America also picked up this story

2. NK Leadership Watch also covered the story.

3. The Mansudae Overseas Development Group (MODG) is also building/has already built an e-museum in Siem REap. Learn more here.

4. Here are previous posts on the DPRK and Cambodia.

UPDATE 1 (2011-8-3): Construction is underway on the project.  According to the Global Post:

A wall of royal blue sheet metal obscures the North Koreans’ operation from public view. When I approached the entrance, a man in a fedora and a tank top rushed over to slam the gate shut. A furtive look inside revealed fewer than a dozen scrawny workers and a scrub grass field still void of much construction.

Though local reports vary, North Korea will be paid between $10 and $17 million for some sort of monument or museum near the temples. The head of Cambodia’s culture ministry, Khem Sarith, confirmed construction of an “e-museum” but could not confirm the cost.

Nor could he explain why a country that offers its citizens scant electricity should win an “electronic museum” contract, especially after its monuments abroad have drawn both condemnation and ridicule.

The full story is well worth reading here:
North Korea propaganda unit builds monuments abroad
Global Post
Patrick Winn
2011-8-3

ORIGINAL POST (2010-4-27): According to the AFP (Via the Straits Times in Singapore):

A controlversial North Korean construction company is in talks to build an ‘e-museum’ of Cambodia’s famed Angkor temples, a senior official said on Monday.

Mansudae Overseas Projects wants to build a museum close to the temple complex that will feature a computer-generated simulation of the ancient monuments, Cambodian Culture Ministry secretary of state Khem Sarith told AFP.

‘They have plans to build an electronic museum detailing the history of Angkor Wat temples,’ he said, adding he supported the plans after discussions last week with a company delegation and North Korean ambassador Ri In Sok.

Previous work by the North Korean company building major monuments in African countries has been criticised for lack of transparency. Its 49-metre bronze Monument for the African Renaissance has caused outrage in Senegal over the sale of government land to finance the project and the president’s plan to keep 35 per cent of any profit it generates.

Mr Khem Sarith said the so-called e-museum would be ‘good for tourists to view the temples and then select the one that they want to see’. Studies and more discussion were still needed before construction could start on the digitally-rendered overview, Khem Sarith said. He said he would meet again with officials from the company in June to discuss the project further.

The 12th century Angkor Wat temple complex is Cambodia’s main tourist attraction. It is located in the northwestern province of Siem Reap, where the ancient Khmer empire built some 1,000 temples spread over 160 square kilometres.

I have pretty extensive list of Mansudae Overseas Development Group projects from across the planet.  If you are aware of a North Korean built project in your country, please let me know.

(Thanks to a reader)

Read the full story here:
‘e-museum’ of Angkor temples
AFP (Straits Times)
4/26/2010
John Cosgrove

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Growth of ‘knowledge economy’ in the Kim Jong Un era

Thursday, November 19th, 2015

Institute for Far Eastern Studies (IFES)

According to a report published by the Science and Technology Policy Institute (STEPI), since the beginning of his rule, Kim Jong Un has clarified the ‘knowledge economy’ as important as he actively restructures the science and technology system, promotes the high-tech industry, expands education, and boosts the morale of scientists and technicians.

The report, entitled ‘Changes and Implications of the Science and Technology Policy in the Kim Jong Un Era,’ noted that in contrast with the extensive purging of key officials like Jang Song Thaek and Hyon Yong Chol, North Korea’s scientific world has received considerable preferential treatment and is heading the development of the North Korean-style ‘knowledge economy.’

Since coming to power, Kim has pursued a number of projects favoring scientists, including Unha Scientists Street, Wisong Scientists Residential District, and Mirae (‘Future’) Scientists Street. He has also provided private housing to teaching faculty at Kim Il Sung University and Kim Chaek University of Technology.

As a result, more and more researchers are receiving significantly more than just their salaries. At the same time, North Korea is restructuring the R&D system, establishing research centers, extending on-site support for production, and creating for-profit companies.

The report also explained that the regime is continuing efforts pursued during the Kim Jong Il regime, such as the five-year technological development plan, the expansion of computer numerical control (CNC), and the use of the Internet. As it does so, it is pushing forward new endeavors like the establishment of the ‘Science and Technology Hall,’ cyber education, cyber healthcare, and the expansion of electronic payments. Thus, it is improving the level of informatization in North Korea.

“Like the science and technology-centered politics of Kim Jong Il, the Kim Jong Un regime has stressed science and technology in its pursuit of a knowledge economy because it recognizes the importance of this field in building a strong nation and solving the energy and food problems facing the country,” the report claimed.

In particular, around the 60th anniversary of North Korea’s National Academy of Science in December 2012, the regime embarked on an extensive reorganization of the academy. Major targets of the reorganization included the biotechnology and energy fields (critical fields to solving the food issue); high-tech fields like information technology (IT), nanotechnology, and automation; as well as the environmental sector and high-return sector.

In addition, in the beginning of 2015 North Korea dissolved its top software development agency, Korea Computer Center (KCC), leaving only the organization that develops the ‘Red Star’ computer operating system and reorganizing the whole agency as a profitmaking organization. Moreover, in the 4th Five-Year Plan (2013-2017) for scientific and technological development, solving the food and energy issues was emphasized more than in the past.

The report also mentioned the development of tablet PCs and the spread of electronic commercial transactions. In the summer of 2012, North Korea launched three tablet PC models called Samjiyon, Arirang, and Achim. Since then, more models like Woollim, Ryongheung, and Noul have been rolled out. Regarding electronic payments, the use of debit cards like the Narae card, which requires a 4-digit pin number and can be recharged at various shops and hotels, is spreading rapidly.

In regards to these changes, the report stated, “Kim Jong Un’s science and technology policies reflect North Korea’s industrial setting and private demand and are more rational as they correspond with international trends.” However, the report argued that support for key industries is shrinking, and their ability to survive on their own is insufficient. Given the difficulty of establishing a virtuous cycle of investment and profit calculation under the current policies, it concluded that the sustainability of these policies is low.

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North Korea promotes French investment in cement company

Thursday, September 10th, 2015

Institute for Far Eastern Studies (IFES)

North Korea recently promoted its cooperation with foreign companies, highlighting a North Korean cement company that has received investment from a French corporation. This is viewed as a strategy by North Korea to attract foreign investment by publicizing examples of foreign capital in the country.

On September 1, 2015, North Korea uploaded an article on its foreign website ‘Naenara’ promoting the Pyongyang Sangwon Cement Joint Venture, which the French cement company Lafarge has invested in. President of the company Yun Chae Hyok was quoted as saying, “Through each other’s efforts the company is raising the quality of cement by expediting the modernization of the production process as well as increasing production to contribute actively to the country’s primary construction targets.”

Regarding the Sangwon Cement Joint Venture, the Naenara article stated, “The quality of limestone is good, the reserves are plentiful, and from a transportation perspective, the location is good […] The production process is automated, and the company is using supplementary materials, including limestone, in production, so the outlook is very good.” The article also introduced the company Lafarge. “The French building materials company Lafarge, which has more than 200 cement factories, is a corporation that specializes in the production of cement and plaster as well as aggregate and concrete,” it explained.

Naenara also reported that in 2014 the joint venture company built ‘Affiliate Furnace No. 1,’ and according to a decision made by the board of directors in June 2015, next year it will complete construction of ‘Affiliate Furnace No. 2.’ It is believed that North Korea’s intent in promoting the Sangwon Cement Joint Venture is to attract investment from other foreign companies by publicizing examples of foreign capital in the country.

The Pyongyang Sangwon Cement Joint Venture was created when Lafarge invested in North Korea’s Sangwon Cement Complex. In 2007 the Egyptian company Orascom, which is currently invested in North Korea’s Koryolink, acquired 50% of the shares in Sangwon Cement and prepared to invest in the company, but in December of that year it passed its shares and the related mining rights to Lafarge. At the time Lafarge commented, “Given the rapidly growing demand for cement in North Korea, the potential for Sangwon Cement Factory is large.” The company went on to update factory equipment and expand investment in machinery and facilities.

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