North Korean Economy Watch

Europen Business Association
October 2007

18 European companies are participating at the European booth organized by the European Business Association (EBA) in Pyongyang. This has been the largest ever participation of European companies at a Trade Fair in Pyongyang. The 18 EBA-member companies come from 6 European countries and are engaged in banking, IT, pharmaceuticals, maritime transportation, railways, courier services, industry, mining, solar driven water pumps, energy saving technology, commodity inspection, cosmetics and other consumer goods and general trading. Some already operate in joint ventures with Korean partners or found other forms of close business cooperation, particularly in the fields of banking, mining, internet services, logistics, software development and pharmaceuticals.

The EBA will continue to make efforts to attract more European companies to invest and do business in the DPRK in the coming years and will share its experience to help make the endeavors of the newcomers and their Korean partners a success. The EBA closely cooperates with the DPRK Chamber of Commerce and the Korea International Exhibition Corporation to facilitate the participation at exhibitions, to intensify trade between European and DPRK-enterprises and to enhance the identification of suitable business and investment opportunities for European companies.

Pictures of the European booth will be published on http://www.eba-pyongyang.org/
Felix Abt, President
Dr. Barbara Unterbeck, PR-manager
European Business Association
President´s Office
Chang Gwang Foreign Residential and Office Building
10th Floor, No. 10-2
Central District
Pyongyang
The Democratic People’s Republic of Korea
http://www.eba-pyongyang.org/

Yonhap
Tony Chang
10/8/2007

South and North Koreas’ top health officials have tentatively agreed to cooperate in modernizing regional hospitals in the communist country, Seoul’s health minister said Monday.

“During unofficial talks with North Korean Health Minister Choi Chang-sik, we’ve agreed to seek joint projects to modernize provincial hospitals in the North,” Byun Jae-jin, South Korea’s health minister, told reporters.

Byun was part of a Seoul delegation that accompanied President Roh Moo-hyun during his summit with North Korean leader Kim Jong-il last week, where both sides also agreed to end military hostility and significantly expand inter-Korean cooperation in various fields.

The minister said last week that the two Koreas agreed to cooperate in welfare and medicine, possibly forming an inter-Korean medical body to deal with future peninsula-wide epidemics, Seoul’s top health official said Thursday.

Choi, along with other top North Korean officials, reportedly requested South Korea to construct a pharmaceutical factory in Nampo, near the North Korean capital of Pyongyang, according to Byun.

Seoul’s on-and-off aid to the communist state has mostly focused on food and other necessities, while medical supplies to North Korea have been largely organized by non-governmental organizations and other private agencies.

North Korea’s lack of basic medical supplies has often been cited in local and foreign media, with the country often requesting health-related supplies to combat diseases such as malaria and scarlet fever from the South.

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.

Yonhap
9/24/2007

North Korea is becoming more transparent and effective in dealing with disasters, spurred by both internal and external factors, an Asia-Pacific regional specialist said in his latest paper.

Dr. Alexandre Mansourov, a securities studies professor at the Asia-Pacific Center for Security Studies (APCSS) in Hawaii, noted five trends in the North Korean government’s responses over the past decade to nationwide shocks, including floods, typhoons, drought and avian influenza outbreaks.

Increasing transparency is one of the trends, with Pyongyang more quickly admitting to disasters that have struck the nation, he said in a paper (download here) released last week through the Korea Economic Institute in Washington.

It took North Korea several years to admit the impact of natural disasters in the mid-1990s that led to massive starvation and chronic food shortages. But in August 2000, when it was hit by Typhoon Prapiroon, North Korea released the news three weeks after it occurred, and in the two following years, when other typhoons struck, North Korea reported it within three to six days, Mansourov said.

Pyongyang immediately acknowledged flooding in August 2007, he said.

“Observers agree that the timeliness, details, and amount of coverage of flood damage and rehabilitation work in August 2007 is unprecedented.”

North Korea is also showing institutional knowledge and a capacity for disaster management, with new organizations growing out of a decade of learning and experience, such as various provincial centers, the professor said.

The North Korean Red Cross Society has been exceptional, he said, working with the International Federation of Red Cross and Red Crescent Societies, and has made itself the leading agency in disaster preparedness and response.

Inter-agency coordination has also increased, with deputy prime minister-level working groups working closely together in each disaster since the flood of 2001, as there are preventive programs through which basic relief supplies are stored in town and villages.

For example, the 10-year strategy against avian influenza, worked out by the emergency commission in 2005, would have been unthinkable a decade ago, Mansourov wrote.

Another notable trend is the increasing cooperation between the North Korean government and international humanitarian community, gradually allowing joint needs assessments and monitoring, he noted.

Mansourov argued that external factors helped bring about the changes.

“International factors did make a difference in what happened in (North Korea), especially through the introduction of innovative ideas and dissemination of best humanitarian practices,” in addition to foreign aid, he said.

The scholar also argued that while the country’s top leader, Kim Jong-il, does control any institutional changes, there is also adaptation driven by needs.

“There has been some degree of autonomous institutional learning and adaptation; it is incremental in nature and caused by both positive and negative feedback from the environment regarding institutional performance in crisis situations,” he said.

Yonhap
9/21/2007

North Korea is at serious risk from contagious diseases following damage from recent floods, an official from North Korea’s Red Cross told a newspaper in Japan on Friday.

In an interview with the Chosun Sinbo, a pro-North Korean newspaper in Japan, Kim Eun-chul, a vice secretary-general at the Red Cross Society of North Korea, said, “What we are most concerned with now is the spread of infectious diseases in the severely damaged areas.”

“The destruction of the water supply facilities could result in various diseases including skin diseases and diarrhea, as well as flue.”

Kim showed his anxiety, saying that the communist country would not be able to cope with the diseases when they broke out, as many of the North’s public health centers are also destroyed from floods.

“More than 560 hospitals were destroyed and 2,100 medical offices were damaged. The medical supplies were wet and useless. We can’t even read charts as they were soaked,” he said.

“New patients with diarrhea are reported one after another. We are now relying solely on the emergency medicines provided by the International Federation of the Red Cross and Red Crescent (IFRC).”

The IFRC shipped US$1,69 million worth of medical aid to North Korea earlier this month, which can be used for three months, according to Kim.

Yonhap
8/31/2007

North Korea’s foreign minister Friday met with a U.S. delegation bringing emergency medical supplies to help North Korean victims of recent floods, the North’s official news outlet said.

The reclusive country has appealed to the international community for assistance to cope with massive flooding caused by heavy downpours that left at least 600 people dead or missing and about 100,000 people homeless in early August. The United Nations is seeking US$14 million to provide North Korea with food, medicine, drinking water and other emergency goods.

“Foreign Minister Pak Ui-chun met with guests from the United States who visited with emergency medical aid equipment donated by the U.S. administration and the non-governmental organization Samaritan’s Purse with regard to flood damage at the Mansudae Assembly hall,” said the one-sentence report carried by the Korean Central News Agency. It did not identify the U.S. guests.

Washington has so far pledged US$100,000 for the U.N. initiative, equally distributing the funds to two non-governmental relief organizations, Mercy Corps and Samaritan’s Purse, to deliver emergency aid to North Korea.

The heaviest rain in 40 years swept North Korea, which is poorly equipped to cope amid wide-spread deforestation. The severe damage caused the second inter-Korean summit to be postponed from late August to early October.

The most authoritative, publicly available map of North Korea
Version 4: August 29, 2007

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 fourth version.

Additions to the latest version of “North Korea Uncovered” include the city of Manpo along the Chinese border, KEDO, Kumgang Resort expansion, Kaesong Industrial Zone, as well as a few more parks, antiaircraft sites, dams, mines, canals, etc. I have also added more links in the menu which will tell the viewer a bit about the locations themselves. I have also changed the color scheme to make the collage easier to view.

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 Herald
Ahn Hyo Lim
8/24/2007

An international vaccine agency and North Korea have agreed to launch a joint project to fight diseases common among children in developing countries.

The International Vaccine Institute, based in Seoul, said yesterday that they will cooperate to conduct pilot vaccinations against Japanese encephalitis and haemophilus influenzae type b, which causes meningitis, on some 3,000 North Korean children by early next year.

Their project will also involve the establishment of a reference diagnostic laboratory in the communist country.

“Creation of a reference laboratory for diagnosis of Hib and Japanese encephalitis should not only help improve clinical management of children with these infections, but should also assist DPRK health authorities to better estimate the burden of these diseases in the DPRK,” said Dr. John Clemens, IVI director general.

Officials of the global vaccine R&D organization will visit Beijing later in the month to meet with North Korean health officials and discuss details of how they will cooperate, including the provision of vaccines and equipment, and the opening of the lab.

Haemophilus influenzae type b is the leading cause of bacterial meningitis among infants and children worldwide, killing an estimated 386,000 children every year.

Japanese encephalitis, primarily infects children in endemic areas across Asia, leaving approximately 60 percent of those who develop clinical illness either dead or neurologically disabled.

The IVI is an international organization devoted exclusively to developing and introducing new and improved vaccines to protect the world’s poorest people, especially children in developing countries.

It was established in 1997 as an initiative of the United Nations Development Program.

Yonhap
8/22/2007

Kimberly-Clark Corp., one of the world’s biggest makers of health care and sanitary goods, is considering opening a factory in a South Korean-built industrial zone in North Korea, according to the company’s senior executive on Wednesday.

Moon Kook-hyun, chief executive officer of Yuhan-Kimberly Ltd., Kimberly-Clark’s South Korean unit in Seoul, recently told reporters that the company’s “sewing plant” in China may take part in slots of the industrial complex in the North Korean border city of Kaesong.

“First of all, I plan to sign a preliminary contract (to take part in the Kaesong industrial complex) and then will persuade our head office,” Moon said.

Moon and Thomas Falk, chairman of Kimberly-Clark, visited the Kaesong industrial park in February.

Currently, state-run Korea Land Corp. is receiving bids from foreign companies which want to set up factories in Kaesong, located just 70 kilometers north of Seoul.

“If Kimberly-Clark applies to receive land for the Kaesong industrial park, there will be no difficulty,” said an official at Korea Land.

South Korea began building the industrial park in 2003 on a trial basis with the hope of creating a model for eventual reunification of the Korean Peninsula.

Currently, 26 South Korean plants employ about 16,000 North Korean workers who produce garments, kitchenware and a number of other goods.

If the industrial zone becomes fully operational by 2012, more than 350,000 North Korean workers will work there, according to the South’s Unification Ministry.

In a free trade agreement signed last month, the U.S. government said it would recognize the Kaesong-made goods as originating in South Korea.

Moon’s remark also came as optimism has been building over progress in resolving the North’s nuclear standoff.

North Korea has shut down its key nuclear facilities at Yongbyon under a February agreement, which was also signed by South Korea, the U.S., Japan, China and Russia.

It now has to disable the Yongbyon facilities and declare all of its nuclear programs in exchange for 950,000 tons of heavy fuel oil or equivalent aid.

Institute for Far Eastern Studies (IFES)
8/1/2007

INTER-KOREAN RELATIONS

Following two days of talks between economic representatives of the two Koreas at the Kaesong Industrial Complex, South Korea announced on July 7 that it would begin shipping raw materials to the North in exchange for DPRK natural resources. South Korea shipped 800,000 USD of polyester fabric on July 25, and is set to send the rest of the materials by the end of November. North Korea accepted South Korean prices for the goods, and will pay transportation, cargo working, and demurrage costs, as well. South Korea will pay for shipping, insurance, and the use of port facilities. On 28 July, a South Korean delegation left for the North in order to conduct on-site surveys of three zinc and magnesite mines. The team will spend two weeks in North Korea.

It was reported on 17 July that North Korea proposed a joint fishing zone north of the ‘Northern Limit Line’ dividing North and South territorial waters to the west of the peninsula. Seoul turned down the offer.

Inter-Korean military talks broke down early on 26 July after only three days of negotiations as North Korea insisted on the redrawing of the Northern Limit Line.

North Korea demanded on 27 July that workers in the Kaesong Industrial Complex be given a 15 percent pay raise. The North Korean workers will not work overtime, weekends or holidays beginning in August unless the raise is granted.

It was reported by the Korea International Trade Association on 26 July that inter-Korean trade was up 28.6 percent in the first six months of 2007, totaling 720 million USD.

RUSSIA-DPRK INVESTMENT

It was reported on 19 July that Russia and North Korea have agreed to connect Khasan and Najin by rail, enlisting investment from Russian oil companies interested in an inactive refinery at Najin Port capable of processing up to 120,000 barrels per day. The project is estimated to cost over two billion USD.

MONGOLIA-DPRK RELATIONS

During a four-day visit to Mongolia by Kim Yong-nam beginning on 20 July, the two countries signed protocols on cooperation on health and science, trade and sea transport, and labor exchange issues. This follows on the heals of an agreement to allow South Korean trains to travel through North Korean territory on to Mongolia in route to Russia and Europe.

JAPAN-DPRK PROPAGANDA

Japan took one step further to recover abductees in North Korea this month when the government began broadcasting propaganda into the DPRK intended for Japanese citizens. The broadcasts are made in Korean and Japanese (30 minutes each) daily, and updated once per week.

U.S.-DPRK PEACE PROSPECTS

U.S. Ambassador to the ROK Alexander Vershbow stated that Washington was prepared to negotiate a permanent peace regime on the Korean Peninsula by the end of the year if North Korea were to completely abandon its nuclear ambitions.

EGYPT-DPRK INVESTMENT

The Egyptian company Orascom Construction Industries announced a 115 million USD deal with North Korea’s state-owned Pyongyang Myongdang Trading Corporation to purchase a 50 percent state in Sangwon Cement. To put this in perspective, the deal in worth more than four times the amount of frozen DPRK funds that had caused six-party talks to break down and delayed the implementation of the February 13 agreement.

NORTH KOREAN SOCIETY

The Economist reported on 7 July that, according to foreigners living in the North’s capital, concern for petty law appears to be weakening. Citizens are reportedly smoking in smoke-free zones, sitting on escalator rails, and even blocking traffic by selling wares on the streets.

It was reported on July 11 that a letter sent earlier in the year by the North Korean Red Cross indicated severe shortages of medical supplies. The letter stated that North Korea would accept any medicine, even if it was past expiration, and accept all consequences for any problems that arose from using outdated supplies. The (South) Korea Pharmaceutical Manufacturers Association had no choice but to reject the request.

Events were held on July 11 in North Korea in order to promote women’s health and well-being issues. Marking World Population Day, a North Korean official stated that the DPRK has cooperated with the UN Population Fund since 1986, and is now in the fourth phase of cooperation.

Seeing entertainment venues as a “threat to society”, North Korean security forces have been implementing a shutdown of karaoke bars and Internet cafes. These venues mainly cater to traders in the northern regions of the country.

It was reported on July 13 that construction of North Korea’s first all-English language university was nearing completion. The Pyongyang University of Science and Technology, funded largely by ROK and U.S. Christian evangelical groups, will hold 2600 students and offer undergraduate and post-graduate degrees in business administration, information technology, and agriculture.

Local elections were held on 29 July for DPRK provincial, city, and country People’s Assemblies. 100 percent of 27,390 candidates were approved with a 99.82 percent turnout reported.