North Korean Economy Watch

North Korea Uncovered: Version 12
Download it here

About this Project: This map covers North Korea’s agriculture, aviation, cultural locations, markets, manufacturing facilities, energy infrastructure, political facilities, sports venues, military establishments, religious facilities, leisure destinations, national parks, shipping, mining, and railway infrastructure. It is continually expanding and undergoing revisions. This is the 12th version.

Additions include: Tongch’ang-dong launch facility overlay (thanks to Mr. Bermudez), Yongbyon overlay with destroyed cooling tower (thanks to Jung Min Noh), “The Barn” (where the Pueblo crew were kept), Kim Chaek Taehung Fishing Enterprise, Hamhung University of education, Haeju Zoo, Pyongyang: Kim il Sung Institute of Politics, Polish Embassy, Munsu Diplomatic Store, Munsu Gas Station, Munsu Friendship Restaurant, Mongolian Embassy, Nigerian Embassy, UN World Food Program Building, CONCERN House, Czech Republic Embassy, Rungnang Cinema, Pyongyang University of Science and Technology, Pyongyang Number 3 Hospital, Electric Machines Facotry, Bonghuajinlyoso, Second National Academy of Sciences, Central Committee Building, Party Administration Building, Central Statistics Bureau, Willow Capital Food House, Thongounjong Pleasure Ground, Onpho spa, Phipa Resort Hotel, Sunoni Chemical Complex (east coast refinery), Ponghwa Chemical complex (west coast refinery), Songbon Port Revolutionary Monument, Hoeryong People’s Library, Pyongyang Monument to the anti Japanese martyrs, tideland reclamation project on Taegye Island. Additionally the electricity grid was expanded and the thermal power plants have been better organized. Additional thanks to Ryan for his pointers.

I hope this map will increase interest in North Korea. There is still plenty more to learn, and I look forward to receiving your contributions to this project.

Version 12 available: Download it here

The most authoritative map of North Korea on Google Earth
Download it here

This map covers North Korea’s agriculture, aviation, cultural locations, markets, manufacturing facilities, railroad, energy infrastructure, politics, sports venues, military establishments, religious facilities, leisure destinations, and national parks. It is continually expanding and undergoing revisions. This is the eleventh version.

Additions include: Mt. Paegun’s Ryonghung Temple and resort homes, Pyongyang’s Chongryu Restaurant, Swiss Development Agency (former UNDP office), Iranian Embassy, White Tiger Art Studio, KITC Store, Kumgangsan Store, Pyongyang Fried Chicken Restaurant, Kilju’s Pulp Factory (Paper), Kim Chaek Steel Mill, Chongjin Munitions Factory, Poogin Coal Mine, Ryongwun-ri cooperative farm, Thonggun Pavilion (Uiju), Chinju Temple (Yongbyon), Kim il Sung Revolutionary Museum (Pyongsong), Hamhung Zoo, Rajin electrified perimeter fence, Pyongsong market (North Korea’s largest), Sakju Recreation Center, Hoeryong Maternity Hospital, Sariwon Suwon reservoir (alleged site of US massacre), Sinpyong Resting Place, 700 Ridges Pavilion, Academy of Science, Hamhung Museum of the Revolutionary Activities of Comrade Kim Il Sung, South Hamgyong House of Culture, Hamhung Royal Villa, Pork Chop Hill, and Pyongyang’s Olympic torch route. Additional thanks go to Martyn Williams for expanding the electricity grid, particularly in Samjiyon, and various others who have contributed time improving this project since its launch.

Disclaimer: I cannot vouch for the authenticity of many locations since I have not seen or been to them, but great efforts have been made to check for authenticity. These efforts include pouring over books, maps, conducting interviews, and keeping up with other peoples’ discoveries. In many cases, I have posted sources, though not for all. This is a thorough compilation of lots of material, but I will leave it up to the reader to make up their own minds as to what they see. I cannot catch everything and I welcome contributions.  Additionally, this file is getting large and may take some time to load.

Interview Blog, Germany
(click here for all their North Korea-related interviews)

“Phoenix Commercial Ventures Ltd is a venture capital company that offers investors business and investment opportunities in the DPRK” – Interview with Ken Frost (CFO of Phoenix)

Klaus-Martin Meyer: Mr. Frost, you are member of the Board of Phoenix Commercial Ventures Ltd, a company that offers investors business and investment opportunities in the Democratic People’s Republic of Korea (DPRK) otherwise known as North Korea. Would you mind introducing yourself and your company as well to our readers?

Ken Frost: Phoenix Commercial Ventures Ltd is a venture capital company that offers investors business and investment opportunities in the DPRK, enabling them to take advantage of the economic reforms that are taking place there.

Phoenix is owned and run by four experienced professionals, who are based in London, Paris and the DPRK. The Board has between them many years of international business experience, and an invaluable network of well placed contacts. Phoenix offers a unique service, by being able to offer direct access to the DPRK.

Phoenix Commercial Ventures Ltd specialises in project finance in the DPRK. As is well known, the business environment is difficult, and the company targets very specific investment projects; these are small enough to manage and have the capacity to generate foreign currency, either through export or import substitution.

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

• Identify commercially viable investment projects in the DPRK, on a case by case basis
• Identify reliable local partners for all forms of business in the DPRK, either trade or investment
• Seek overseas investment sources for such projects
• Minimise the risk in such projects, by taking responsibility for supervision of the local set-up procedures and management of the projects

The Board of Phoenix Commercial Ventures Ltd consists of nationals of the UK, France and the DPRK. The European flavour is enhanced by the fact that most of the counterparties and suppliers in the various projects are also European, and the DPRK government views Phoenix Commercial Ventures as a prime conduit for European business and investment in the DPRK.

One of the directors of Phoenix Commercial Ventures is also General Manager and CEO of the Daedong Credit Bank, the only western-invested foreign bank in the DPRK. Based in Pyongyang, this is a 70-30 joint venture between a UK financial management company based in Hong Kong and the Korea Daesong Bank, one of the main DPRK banks.

Phoenix Commercial Ventures is unique in having this connection with a reliable, locally based financial institution. The synergy benefits include a wider exposure to local business contacts in differing fields; as well as an additional degree of control, made possible by the fact that the various joint venture projects have to maintain their accounts with the bank.

We have a number of projects within DPRK, including two 50/50 joint ventures:

- Hana Electronics JVC, a consumer electronics company now ranked as one of the top three best performing joint ventures in DPRK, as assessed by the Ministry of Finance.

- Sinji JVC, whose main areas of operations are retail, software and bonded processing.

Full details about our company can be found on our website www.pcvltd.com

I am the CFO of Phoenix and am a chartered accountant with over twenty years international experience of FMCG industries, consumer electronics, rough diamond distribution and the Internet. I have worked in KPMG, Philips Electronics, De Beers and run my own Internet company. I am also a Scholar on Gerson Lehrman Group Councils.

In November 2007 I reached the finals of Accountant of the Year held by the Association of International Accountants at the President’s Awards Dinner 2007. This award is designed to recognise organisations’ accountancy stars.

In January 2007 I was awarded, based on recommendations from fellow members of the ICAEW, a New Year’s Honour by AccountingWeb. The award was for my services to the accountancy profession in opposing the merger of the ICAEW with other accountancy bodies.

In November 2006 I was awarded an honorary fellowship of the Institute of Professional Financial Managers (IPFM), for my services to the accountancy profession.

In January 2006 Accountancy Age placed me on their Financial Power List for 2006. I was 11th on their list of the top 50 of “The Ones To Watch”. The list identified the “most influential names to look out for” in the world of finance for 2006.

Klaus-Martin Meyer: We read on your website “offers investors business and investment opportunities in the Democratic People’s Republic of Korea (DPRK), enabling them to take advantage of the economic reforms that are taking place there.” Can you tell us what kind of opportunities this could be?

Ken Frost:There are three main areas of investment opportunities open to investors, which we can facilitate within the DPRK:

1 Small scale investments ($500K or less) yielding good levels of return (20% or more).

These investment opportunities are in local production (consumer goods, bonded processing, software etc) for domestic market consumption and export. These utilise the advantages that DPRK has over all the other countries in the region namely:

- 99% literacy
- skilled/disciplined/hard working workforce
- well educated workforce, many speak a good level of English
- lowest wage rates in the region

Phoenix has a number of opportunities that it can offer investors in this area; eg bonded processing, consumer manufacturing, clothing manufacturing and software development.

2 Natural resources

DPRK has proven abundant natural resources worth several trillion dollars; eg coal, gold, copper, titanium, lead, zinc, nephelite, nickel, magnesia, graphite etc.

The investment required would be of a higher order than the small scale investments above, $1M plus. The money would be used to bring existing mines back to production, by pumping out flood water and renewing worn out capital equipment.

Phoenix has, via its working relationship with CPEEC, a number or opportunities in the natural resource sector that it can offer genuine investors.

3 Infrastructure development

Clearly investment in infrastructure is the costliest form of investment. However, given the dilapidated state of the roads, railways, ports, electricity grid etc it is necessary if the economy is to be revived.

DPRK also has a keen interest in infrastructure development focussed on green/renewable energy areas.

Phoenix has on it books a profitable renewable energy project that would suit a serious, well financed and experienced green energy investor.

The DPRK is the final economic frontier and is a “green field” site. Its primary advantages are:

- Location (physical position between Russia, South Korea, China and in AP)
- Location (historical, all the major players now want to move forward)
- Location (resources, it has abundant rich resources both mineral and human capital – high literacy, well educated etc)

Klaus-Martin Meyer: What are the main differences between your company and a conventional venture capital company that is investing for example in internet our biotech companies?

Ken Frost: Companies such as those you mention are industry-specific, whereas ours is location-specific. Our company is relevant to people who might want to invest in the DPRK.  We work in the DPRK and have a physical presence in the DPRK, other “conventional” venture capital companies do not.

Klaus-Martin Meyer: Are there any differences to other investment companies?

Ken Frost: We apply the same principles to potential investments as any other professional investment company, we look at:

- the risk
- the returns
- the quality of the local management
- the quality of the business plan
- the size of investment
- the share offered for that investment etc

We also pay very close attention to corporate governance issues such as; financial reporting, management structure and ethics etc. We have a code of conduct which can be seen on our website.

Phoenix Commercial Ventures Ltd is committed to being a responsible corporate citizen and to the pursuit of a sustainable future, both economic and social.

Phoenix Commercial Ventures Ltd adheres to three fundamental ethical principles:

- Integrity
- Competence
- Courtesy

To this end Phoenix Commercial Ventures Ltd has developed a Code of Conduct, which sets out to ensure that these principles are followed in its operations. The Code of Conduct governs Phoenix’s business decisions and actions. The Code applies equally to corporate actions, and to the behaviour of individual employees when conducting business on behalf of Phoenix.

We work very hard with our local management teams and business partners to ensure that international standards re reporting, corporate governance and ethics are understood and followed.

Klaus-Martin Meyer: What are your plans for the company’s future? How do you see Phoenix Commercial Ventures in five years time?

We see the coming period for Phoenix as that of being continued growth.

In our view there will be a major upswing in economic relations between the DPRK and other countries over the coming months/years. Phoenix Commercial Ventures is uniquely placed to take advantage of, and to respond to, that upswing.

We are one of the very few organisations to have made successful joint ventures in the DPRK. We are also one of the very few organisations to have people with many years’ experience, and cultural sensitivity, actually on the ground in Pyongyang. You cannot run a business by email!

According to Michael Rank in the Telegraph:

North Korea is planning to recycle waste that is so polluted other countries refuse to handle it.

Through a Chinese-language website (link here) the country is seeking supplies of plastic and electronic waste which “can be processed in [a North Korean port] but which other countries and territories are restricted from dealing in”, reflecting the country’s dire economic plight and its scant regard for international norms.

Isolated and desperately poor, North Korea is a beginner so far as toxic waste is concerned, although in 1996 it signed a deal with Taiwan to dispose of its nuclear waste from atomic power plants.

South Korea reacted furiously to the deal and Taiwan was eventually forced to back down and cancel the agreement.

North Korea also offered to recycle the North Sea Brent Spar oil storage platform, which Royal Dutch Shell had proposed dumping in the deep Atlantic in 1995.

This caused an environmental furore, with Greenpeace claiming that the structure was full of oil and burying it at sea would result in serious pollution.

An enterprising young North Korean official in London unexpectedly offered to come to the rescue, suggesting that his country could dispose of the structure, saving Shell and the British government from further embarrassment.

The offer was turned down as Shell didn’t want to be seen turning to a regime as dubious as North Korea, but Greenpeace’s own reputation took a serious knock when it was forced to admit that it had enormously over-estimated the amount of oil remaining in Brent Spar’s storage tanks.

North Korea’s waste recycling plans are part of a much bigger, £5 million ($10 million) project to enlarge a port on its west coast and develop it into an export base including a duty-free zone.

“There are no limits, any business taking advantage of [North] Korea’s low labour costs for intensive processing is welcome,” the website states.

Although the port is not named, it is almost certainly Nampo, which is close to the capital and is the largest harbour on North Korea’s west coast. The development covers 30,000 square metres (320,000 square feet) and is “expandable”.

The port currently accepts vessels of up to 10,000 tonnes but the plan is to increase this to 50,000 tonnes.

The project is pitched at Chinese companies, and interested parties are asked to contact a firm in the Chinese city of Dandong on the North Korean border.

A deal with China would help to counterbalance a recent agreement with state-owned Russian Railways to build a £50 million ($100million) container terminal on North Korea’s east coast as part of a £1.5 billion ($3 billion) plan to create a rail corridor linking South Korea with Europe via North Korea and Russia.

Russian Railways wants to turn the port of Rajin into a hub capable of handling 320,000 containers a year for shipment from South Korea to Europe.

Russia and China have fought bitterly over rights to refurbish Rajin. A few years ago China appeared to have won out when a 50-year deal was announced with the Chinese border city of Hunchun, but this came to nought and Russia was the ultimate winner in the battle to revitalise the north-eastern port and ultimately link it with Europe.

UPDATE 1: Chinese language website (source) here.

UPDATE 2: Follow up here.

To read the full story click here:
North Korea in bid to recycle toxic waste
Telegraph
Michael Rank
6/30/2008

Pyongyang, May 19 (KCNA) — A campaign for putting Pyongyang on a new look has been vigorously launched with the approach of the 60th anniversary of the foundation of the DPRK.

The city is abustle with the work of paving most of the streets with asphalt, greening areas along streets and painting buildings.

More than 20 streets including Ryongnamsan, Ponghwa, Yongung, Changgwang and Hyoksin Streets and their sideroads and roads leading to and in parks, recreation grounds and other cultural resorts around Moran Hill and along the Taedong River have been already asphalt-surfaced.

According to the data available, the pavement project has been carried out over 50 per cent.

Great efforts are also directed to the projects for paving sidewalks with color blocks and for repairing and building infrastructure including water supply and sewage works.

The finishing touch is being given to the work of transplanting good species of trees including ginkgo and cryptomeria and flower shrubs and additionally planting turf.

Meanwhile, the project for plastering and painting buildings is also at its height.

From the Nautilus Institute (presentations at bottom):

Background
Energy insecurity is a critical dimension of the North Korean (DPRK) nuclear challenge, both in its making, and in its reversal. One of the Six-Party Talks working groups, the Economy and Energy Working Group, is largely devoted to this topic, and energy assistance will play an important role in the process of denuclearization of the DPRK. Nautilus Institute maintains a unique database and set of quantitative and qualitative analytic tools to evaluate and track the DPRK’s energy economy, and has maintained working relations with North Korean scientists and technical personnel from the energy sector for more than a decade. With this capacity, Nautilus has provided a stream of policy analyses and briefings at their request to US, ROK and other officials on the DPRK’s energy needs, its likely negotiating postures and demands, and possible negotiable options. The need for such expertise in support of the Six-Party Talks is increasing.

This project ensures that the underlying data and technical analysis available at Nautilus is as up-to-date as possible, and that analysis and policy advice are available when needed by US and other officials.
The Second DPRK Energy Experts’ Working Group (2008) served to provide information and views from key experts in the field to inform the Nautilus DPRK energy sector analysis update. Experts in attendance at the meeting provided both pertinent, recent data and special insights that are being used to help to make the database as reflective as possible of actual conditions in the DPRK. This in turn provides crucial input to the analysis needed to help to inform the parties to the 6-Party talks regarding possible approaches to DPRK energy sector redevelopment.

In addition, the DPRK Energy Experts Study Group Meeting served, as did the first Meeting, as an opportunity for experts on the DPRK to exchange views on the appropriate “next steps” in DPRK energy sector redevelopment. Key outcomes of this discussion are being reflected in the updated DPRK Energy Sector Analysis. In the process of discussions, the experts in attendance helped to further develop and elaborate-as well as providing input on the prospects for-the activities and means by which the various parties concerned with Korean peninsula affairs might engage and work with the DPRK to help resolve both the DPRK’s energy problems, and, in so doing, begin to address and ameliorate the regional and global insecurities of which the DPRK’s energy problems are a key part. In particular, through the focus of the second day of the meeting on Building Energy Efficiency, progress was made on consideration of possible benefits from and approaches to improving the effectiveness of energy use in the crucial DPRK buildings sector.

The Second DPRK Energy Experts Study Group Meeting convened by Nautilus and its partners will was attended by experts in a variety of areas related to energy supply and demand in the DPRK-including electricity, coal and other minerals, the DPRK economy as a whole, trade into and from the DPRK, and the DPRK’s rural household and agricultural sectors, and energy use in buildings in general in the DPRK and elsewhere (the primary topic of the second day of the Meeting)-to review and discuss the results of existing and newly-commissioned research, and to provide insights from their own experience and their own research. A total of approximately 15 experts on the DPRK and on matters related to DPRK issues attended the Meeting, not including an additional 15 experts, representatives from the organizations partnering to fund and organize the meeting (Nautilus, Tsinghua University, USDOE), including observers from bilateral aid agencies associated with a number of countries, from international organizations, from the business sector, and others, who also lent their expertise to the workshop. On the second day of the workshop, supported by funding from a private foundation, a five-member delegation from the DPRK also attended the meeting, providing presentations and insights of their own on energy use in DPRK buildings, and on related energy sector problems and plans in the DPRK.

Presentations:
Presentation: North Korea’s Mineral Resources and Inter-Korean Cooperation
By Woo-jin Chung

Presentation: Nautilus Institute’s Analysis of the DPRK Energy Sector and DPRK Energy Paths: Update
By David von Hippel

Presentation: Analysis on DPRK Power Sector Data & Interconnection Option
By Yoon Jae-young

Presentation: DPRK Energy and Energy-Related Trade with China: Trends Since 2005
By Nate Aden

Daily NK
Park Hyun Min
12/28/2007

The future dream of North Korea’s teenagers is no longer to become party leaders or soldiers, or even join the Party, but to become “merchants.”

“Good Friends,” an aid organization for North Korea, said through “Today’s News on North Korea” No. 104 on the 27th, “Most of the elementary and senior middle school students nowadays, upon being asked what they would like to do post-graduation, say they would like to be merchants.”

The source relayed, “Many of their peers have stopped going to school and have started doing business. It is too burdensome for some students to attend school, so they sell noodles or vegetables by sticking around the jangmadang (markets) and contribute to their families’ livelihoods.”

(more…)

The most authoritative map of North Korea on Google Earth
North Korea Uncovered: Version 6
Download it here

This map covers North Korea’s agriculture, aviation, cultural locations, manufacturing facilities, railroad, energy infrastructure, politics, sports venues, military establishments, religious facilities, leisure destinations, and national parks. It is continually expanding and undergoing revisions. This is the sixth version.

Additions to the newest version of North Korea Uncovered include: Alleged Syrian nuclear site (before and after bombing), Majon beach resort, electricity grid expansion, Runga Island in Pyongyang, Mt. Ryongak, Yongbyon historical fort walls, Suyang Fort walls and waterfall in Haeju, Kaechon-Lake Taesong water project, Paekma-Cholsan waterway, Yachts (3), and Hyesan Youth Copper Mine.

Disclaimer: I cannot vouch for the authenticity of many locations since I have not seen or been to them, but great efforts have been made to check for authenticity. These efforts include pouring over books, maps, conducting interviews, and keeping up with other peoples’ discoveries. In many cases, I have posted sources, though not for all. This is a thorough compilation of lots of material, but I will leave it up to the reader to make up their own minds as to what they see. I cannot catch everything and I welcome contributions.

Version 5: Download it here (on Google Earth) 

This map covers North Korea’s agriculture, aviation, cultural locations, manufacturing facilities, railroad, energy infrastructure, politics, sports venues, military establishments, religious facilities, leisure destinations, and national parks. It is continually expanding and undergoing revisions. This is the fifth version.

Additions to the latest version of “North Korea Uncovered” include updates to new Google Earth overlays of Sinchon, UNESCO sites, Railroads, canals, and the DMZ, in addition to Kim Jong Suk college of eduation (Hyesan), a huge expansion of the electricity grid (with a little help from Martyn Williams) plus a few more parks, antiaircraft sites, dams, mines, canals, etc.

Disclaimer: I cannot vouch for the authenticity of many locations since I have not seen or been to them, but great efforts have been made to check for authenticity. These efforts include pouring over books, maps, conducting interviews, and keeping up with other peoples’ discoveries. In many cases, I have posted sources, though not for all. This is a thorough compilation of lots of material, but I will leave it up to the reader to make up their own minds as to what they see. I cannot catch everything and I welcome contributions.

I hope this map will increase interest in North Korea. There is still plenty more to learn, and I look forward to receiving your additions to this project.

Korea Times
Jane Han
10/2/2007

Economic cooperation topping the agenda for the inter-Korean summit, plus the van of corporate decision makers traveling to the North together, begs the question: Will the trip bear fruit for two-way business?

Chung Mong-koo of Hyundai-Kia Automotive Group, Chey Tae-won of SK Group, Koo Bon-moo of LG Group and Hyun Jeong-eun of Hyundai Group, who are among the 18 CEOs accompanying President Roh Moo-hyun as part of a special entourage, showed signs of hope as they departed for Pyongyang on their three-day trip that started Tuesday.

“I hope the talks will go well and further the ongoing business between the two Koreas, while opening doors to new areas as well,” said Hyundai Chairwoman Hyun.

Unification Minister Lee Jae-joung was also optimistic as he detailed some of the items, including North Korea’s expansion of social overhead capital (SOC) and construction of railroads, which may be discussed among leaders of both sides.

“As there has been much progress in the peninsula over the past seven years, we’re hoping that this experience will set a milestone in history,” he said in a television interview.

These hopes may be translated into reality through at least two scheduled business leader meetings during the summit period.

“The definition of economic cooperation between the two Koreas, so far, has implied one-way support from Seoul,” said Koh Il-dong, a research fellow of the Korea Development Institute (KDI). “But now, it’s time to break free of that old understanding and move toward real cooperation.”

And “real cooperation” is what the North bound corporate executives are looking to, as they hint some of the possibilities they have in mind.

Among the top three business topics expected for discussion _ natural resource developments, roadway and railway distribution system expansions and dockyard construction _ Hyundai-Kia Automotive Group is said to be interested in building railroad cars through its shipping affiliate Glovis, and also measure the feasibility of SOC businesses, while POSCO showed interest in forestation.

Although company officials said forestation is just a possibility, as the steel maker has shown its interest in securing carbon credit overseas, industry insiders say the opportunity will be advantageous for POSCO if cooperation comes through.

And as speculations rose that SK Group may be considering communication and energy projects in the North, company officials said plans are open for review if the right offer is made.

LG and Samsung, which are said to be mulling over their specialty areas of electronics, seem to be in the same scouting stages as others.

“Each company needs to be given the time and circumstances to carry out through market research,” said Dong Yong-sueng, a research fellow of the Samsung Economic Research Institute (SERI), implying that those are some of the accommodations that must be worked out if business is to happen.

Contrary to the high hopes, economic experts pointed out that some corporations would be wary of cooperating with North Korea, as it may ruin their reputation in the global market.