North Korean Economy Watch

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

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

Here is what the marketing poster says:

외화저금안내 Currency savings guide

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

보통저금
Usual saving 1%

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

정기저금(1년)
Regular Saving (1 year) 6%

정기저금(2년)
Regular Saving (2 year) 7%

정기저금(3년)
Regular Saving (3 year) 7.5%

정기저금(5년)
Regular Saving (5 year) 8%

정기저금(10년)
Regular Saving (10 year) 9%

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

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can withdrawal the interest before maturity at any time and if needed, all of the money from the savings can be withdrawn before maturity.

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

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

제일신용은행
Jeil Credit Bank

According to the Wilson Center’s North Korea International Documentation Project (NKIDP):

NKIDP is pleased to announce the release of e-Dossier No. 5, “New Romanian Evidence on the Blue House Raid and the USS Pueblo Incident” and the addition of 28 new documents to its online Digital Archive.

The e-Dossier contains 28 translated documents from Romanian archives on two of the most serious flashpoints since the signing of the 1953 Korean War Armistice: the failed North Korean commando attack and attempted assassination of Park Chung Hee on January 21, 1968, commonly known as the Blue House Raid, and North Korea’s seizure of an American intelligence vessel, the USS Pueblo, on January 23, 1968.

The Romanian documents open an exciting new window into socialist bloc policies and perspectives on the Blue House Raid and the Pueblo crisis.

The e-Dossier features introductions from Mitchell Lerner, associate professor of history and director of the Institute for Korean Studies at The Ohio State University and author of The Pueblo Incident: A Spy Ship and the Failure of American Foreign Policy (University of Kansas Press, 2002), and Jong-Dae Shin, professor at the University of North Korean Studies in Seoul.

Click here to read “New Romanian Evidence on the Blue House Raid and the USS Pueblo Incident” in full

According to Swissinfo:

Agape international is a Swiss charity with about 60 development and aid projects on the go in 15 countries. It has been active in North Korea since 1995, where its focus is agriculture and energy.

Burckhardt travels to North Korea a couple of times a year and has even lived there for up to a few months at a time. Despite his knowledge, he has experienced ageism personally.

“As long as you don’t have grey hair, you cannot tell an older person to do something. I can make suggestions, but I cannot tell someone what to do,” Burckhardt told swissinfo.ch.

Agri-challenged
One area where North Korea has really needed advice is agriculture. After initial donations of food to help fight the famine of the mid-1990s, Agape has been helping local farmers improve their techniques.

(more…)

According to Reliefweb (2012-3-23):

According to the World Food Programme of the United Nations, one in three children is affected permanently by hunger, mal- or undernutrition to a degree so alarming that the children are too small for their age. Also one in four nursing mothers is mal- or undernourished – and we can imagine the consequences for the infants.

In order to help above all those who are weakened by diseases, we offer support in the form of food supplies and together with a local partner of humedica we sent another relief good shipment, this time containing 20 tons of rice, to the DPR of Korea on March 23.

The nutritious staple will be provided to the hospital in Haeju (Hwanghae-namdo province), where ill children, women and men are offered medical treatment during their stay as in-patients. Thanks to the humedica shipment, these patients will regain new strength.

Haeju is a city of 222,396 inhabitants. It is located at the western coast of the country, 140 kilometres south of the capital of Pyongyang. Located at a distance of seven kilometres and half from the town is Mount Suyang, which is above all famous for of its cataracts. The water of Mount Suyang falls down over cliffs of a height of 128 metres and a breadth of twelve metres into the depths of a picturesque little lake.

On the mountainside itself, there is an old fortification built in the Goryeo Dynasty that can be visited by tourists. Sights in Haeju are an old stone cooling house (also built in the Goryeo Dynasty) and a pagoda of five floors. Haeju is an important traffic junction; above all companies in the cement and chemical industry have set up their businesses there (Source of information: Wikipedia).

Since 1998, humedica has been sending relief shipments with a value of more than one million euros to the DPR of Korea. Besides food, seeds or special additional food these shipments also contain drugs, sanitary articles, medical equipment and every-day necessities.

Please support us with your personal contribution so that we will be able to help the people in this country also in future.

humedica e. V.
Donation reference “Famine relief North Korea”
Account 47 47
Bank Code 734 500 00
Sparkasse Kaufbeuren
SWIFT/BIC-CODE: BYLADEM1KFB
IBAN: DE35734500000000004747

According to  Choson Exchange:

In 2010, the DPRK revised the laws governing Rason Special Economic Zone.

This booklet, scanned into pdf form, sketches out the new laws in both Korean and English (English is in the back half). It was at this time that the authorities removed Rason from provincial administration, giving it more autonomy in some ways, while also giving authorities in Pyongyang a more direct link to planning for the SEZ.

Potentially interesting clauses include:

– Ships regardless of nationality are permitted to port (article 26)

– Business licenses can be revoked if DPRK law is “seriously” violated. (article 15)

– Prices will be set between the buyer and seller, though some basic consumer goods may be fixed by the local government. (article 26)

– Disputes may be resolved by arbitration either in the DPRK or a 3rd country. (article 45)

Additional information:

1. Download a PDF of the full publication here.

2. Previous posts on this topic here.

3. Choson Exchange home page.

UPDATE (2012-3-15): Ironically, we have coverage of the photo exhibit from the Associated Press:

“Daily life is really what I try to focus on when I’m there. … It’s unscripted, it’s candid,” said AP Chief Asia Photographer David Guttenfelder, who took some of the photographs in the show, and who has made who has made many reporting trips to North Korea since 2010.

“For people to see their own life in other people’s lives, I think it has a lot of power to break down barriers.”

“Windows on North Korea: Photographs From the DPRK,” is a joint exhibition by The Associated Press and the state-run Korean Central News Agency, and features a mix of archival and contemporary images.

The show was timed to open before the 100th anniversary of the birth of the nation’s founder, Kim Il Sung, on April 15, and comes two months after the AP expanded its operations in Pyongyang to include writers and photojournalists. The AP became the first international news organization to have a full-time presence in the secretive communist country when it opened a video bureau in 2006.

The photographs “give us rare views of the Democratic People’s Republic of Korea, a nation of great interest to the world, though little known,” said Kathleen Carroll, executive editor of the AP.

North Korea and the United States have never had formal diplomatic relations, and the two nations have experienced tensions over the years, particularly over Pyongyang’s nuclear ambitions. North Korea has tested two atomic devices in the past six years.

Tensions had recently eased somewhat. Late last month, the United States and North Korea announced an agreement that calls for Pyongyang to freeze its nuclear activities in exchange for food aid. But a surprise announcement by the North Koreans on Friday that they plan to blast a satellite into space on the back of a long-range rocket could jeopardize that agreement.

The exhibit’s organizers said they hoped the show would help foster better understanding between the two countries.

“My expectation is that this will be the first step in some peaceful reconciliation, and in a few years there will be trade, cultural exchange and tourists from each country coming to (the) other,” said Donald Rubin, who co-founded The 8th Floor gallery hosting the exhibit.

Images on display included a 1953 KCNA photograph showing residents helping to rebuild Pyongyang’s central district after the Korean War, AP photos documenting visits by such prominent foreigners as Jimmy Carter, Bill Clinton and Madeleine Albright, as well as everyday scenes ranging from sunbathers at the beach to shoppers inside a modern department store.

“It is our hope that this exhibition would give exhibition-goers visual understanding of the people, customs, culture and history of the DPRK, thereby helping to deepen mutual understanding and improve the bilateral relations,” Kim Chang Gwang, KCNA’s senior vice president, said in an address at the show’s opening.

“In this exhibit, we are offered two perspectives of the DPRK — as viewed by her native daughters and sons from KCNA and by AP journalists visiting to chronicle news and daily life there. We can appreciate the different styles and techniques and points of view,” Carroll said. “These photographs also show us that different people can find common ground.”

The show also includes images taken by KCNA journalists who participated in a joint workshop in October led by AP instructors. It runs from March 15 to April 13 at The 8th Floor gallery, which was established to promote cultural and philanthropic initiatives.

The AP, an independent news cooperative founded in New York and owned by its U.S. newspaper membership, has operations in more than 100 countries and employs nearly 2,500 journalists across the world in 300 locations.

ORIGINAL POST (2012-3-10): According to Yonhap:

A group of North Korean journalists left for the United States Saturday to attend a photo exhibition set to open next week, marking the centenary of the birth of the North’s late founding leader, Kim Il-sung, the country’s media said.

The North’s delegation, led by Kim Chang-gwang, vice director of the Korean Central News Agency, will attend the opening ceremony of the photo exhibition scheduled for March 15, the news agency said in a report.

The photo exhibition, to be jointly organized with The Associated Press, is scheduled to run until April 13, two days before the late leader’s 100th birthday, the American news agency said in its Web site.

…

The photo exhibition is part of joint programs being pushed by the KCNA to promote its nascent relations with the U.S. news agency. The AP opened a bureau in Pyongyang in January, the first international news agency with a full-time presence in the reclusive country to dispatch texts, photos and video.

The KCNA said the New York exhibition will showcase photos archived by two news agencies, including the North’s late founding leader and his deceased son Kim Jong-il who died of heart failure in December last year, as well as people and life in the communist state.

Additional information:

1. Here is the coverage of the KCNA delegation’s departure from Pyongyang reported by KCNA.

2. Here is the web page of the exhibit.

3. Extensive comments and additional information at OFK.

4. Foreign Policy writes about the conditions under which the aP operated in the DPRK.

5. How the AP selected its North Korea reporter

Pictured above (Rodong Sinmun): New propaganda to build awareness of the upcoming KWP conference.

Institute for Far Eastern Studies (IFES) (2012-3-7):

North Korea announced the Workers’ Party of Korea (WPK) Conference would be held in mid-April. Regarding the conference, Rodong Sinmun released an editorial on February 29.

The newspaper editorial titled, “DPRK to Greet WPK Conference with High Political Enthusiasm” commented, “the Party conference is of particular significance in the party development and accomplishment of the Juche revolution as it will open at a historic juncture when a new century of Kim Il Sung’s Korea starts.”

The editorial goes on to elaborate on the significance of the party conference:

The WPK has marked a new historic turning point in its development.

Kim Jong Un is standing at the head of the WPK and revolution.

Under his guidance the Korean revolution is making more dynamic advances and registering signal achievements in the efforts to build a thriving nation.

The party and revolution have a rosier prospect as the bloodline of Mt. Paektu is given steady continuity generation after generation and the center of the leadership and unity remains unshakable.

With Kim Jong Un at the helm of the WPK, it is shedding its rays as a steel-strong party with the greatest dynamism, a revolutionary one with a strong sense of organization and firm unity and principle and as a great mother party genuinely serving the people, deeply rooted among them.

It is the immense pride that the revolutionary comrades-in-arms of Songun are united closer around the Central Committee of the WPK, sharing thought and intention with Kim Jong Un and keeping pace with him.

The forthcoming conference of the WPK will offer an opportunity of increasing its position and role as a powerful political staff for the Songun revolution, steadfast in monolithic ideology and leadership.

The newspaper highlighted the keywords for the upcoming conference will be Kim Jong Il, Kim Jong Un and the party.

The news also emphasized that teachings of Kim Jong Il, his ideology and achievements will be upheld as the sole principle of the party. In addition, the editorial articulated songun politics will be continued as a way to advance the defense industry with Kim Jong Un as the head of the Central Committee of the WPK.

Lastly, the editorial reiterated “under the leadership of the party, revolution and miracle can be created to improve the lives of the people and to complete the construction of powerful nation.”

The Daily NK also reports that security in Pyongyang has already been tightened.

Institute for Far Eastern Studies (IFES)
2012-2-29

North Korea is likely to make an official announcement of its new economic development plan in April to commemorate the centennial anniversary of Kim Il Sung’s birthday, which is also celebrated as a national holiday in North Korea as the “Day of the Sun.” In addition to the new economic plan, North Korea is also planning to align organizations and establish appropriate legislations in the foreign economic sector. The Daepung Group was recently consolidated with the Joint Venture and Investment Committee (JVIC).

According to an unnamed North Korean source, “many organizations in North Korea with overlapping functions or with unsatisfactory performance were merged as a part of promotion of North Korean socialism. The Daepung Group was merged as a bureau under the JVIC.”

The two chiefs of the Daepung International Investment Group (Daepung Group) were Workers’ Party of Korea (WPK) Unification Strategy Department Director Kim Yang Gun, who served as the chairman of the board, and Pak Chol Su, a Korean-Chinese businessman, who headed the group as the president and elected standing vice-chairman. They were in charge of attracting large foreign investment needed for the “10-Year State Strategic Plan for Economic Development (2011-2020).”

The WPK Director of Administration Jang Song Thaek is in charge of the Daepung Group and the JVIC and is likely to have ordered the merge of the two organizations to increase work efficiency. Kim Yang Gun’s position as the head of Daepung weakened after the souring of inter-Korean relations despite his efforts to bring investment from the South. As a result, Kim will likely step down from his position and Pak Chol Su and the executive management of the JVIC will likely manage the Daepung Group in the future.

The JVIC has also faced changes in its organization with the appointment of Ri Gwang Gun as the new head of the JVIC. Other foreign investment companies and related organizations were merged and the roles of the directors were revised.

The Beijing office of the JVIC has opened its doors in December 30 last year. North Korea is likely to dispatch experts and professionals from various organizations to provide “one-stop service” to attract more investment to North Korea, starting from this April.

Kim Chol Jin is the person in charge of the JVIC Beijing Office. The Rason Special Economic Zone (SEZ) and Hwanggumpyong SEZ will have a change in leadership, as Hong Suk Hyong will replace Kim Il Young as the new vice-chairman.

The previous chairman of the JVIC, Ri Su Yong, who was also the former ambassador of the DPRK to Switzerland, is now serving as the new advisor to Kim Jong Un at the Secretary’s Office.

*Addendum: Choson Exchange has been talking about this for a couple of months.  See posts here (2012-3-4),  here (2010-2-13) and here (2012-1-10).

According to Xinhua:

South Korea has approved humanitarian aid to the Democratic People’s Republic of Korea ( DPRK) by civic groups here, the latest in the flow of private aid to the estranged neighbor, local media reported Thursday.

With the approval, two South Korean aid groups, Nanum International and the Eugene Bell Foundation, plan to send medical equipment including X-ray machines and diagnostic reagents for tuberculosis, according to Yonhap News Agency.

South Korea suspended almost all exchanges with the DPRK following their border incidents in 2010, but has occasionally allowed humanitarian assistance to the impoverished neighbor.

Civic groups need government permission for DPRK-bound aid.

The original Yonhap story is here.

Read the full story here:
S. Korea approves medical aid to DPRK by civic groups
Xinhua
2012-2-23

Institute for Far Eastern Studies (IFES)
2012-2-16

The KCNA announced on February 9 that the “Foreign Investment Bank Law” was modified and supplemented. According to the report, the amended law included “those businesses in operation for over ten years are exempt from income tax on the profit collected in the first year and Bank of Chosun [Bank of North Korea] will be exempt from business taxes on the interest revenue collected from loans provided to companies on favorable terms.”

The previous law already had regulations about exemption of transaction taxes but nothing on business tax. The foreign investment company and foreigner tax law regulated that two to ten percent of profit to be paid by the foreign companies in service and construction sectors.

While the prior law stated, “tax exemption will be provided for the first year for income tax on those businesses over ten years old, and 50 percent exemption will be given in the next two years,” the “50 percent limit” was omitted in the amended legislation.

According to the KCNA, “The law has 5 chapters and 32 articles which included the contents of categorization and specification for areas to establish foreign investment banks, property rights, and autonomy on business management.”

On February 10, the KCNA announced that the Foreign Investment Company Registration Law, Foreign Investment Company and Foreigner Tax Law, and Foreign Investment Company Bankruptcy Law were amended.

In reference to the ordinance of the Supreme People’s Assembly Standing Committee signed on December 21, 2011, provided that this law consisted of 6 chapters and 34 articles with specifics on business establishment, address, tax, and tariff registrations. However, no other details were given.

On January 30, the KCNA also reported the “Labor Law of Foreign Investment Company” was amended and supplemented. This law consists of 8 chapters and 51 articles on hiring and labor contracts, rest, protection, social insurance, and security.

In addition, the “Financial Management Law of Foreign Investment Company” and “Fiscal Law of Foreign Investment Company,” was also modified. However, no other details were provided.

The KCNA has reported that North Korea modified foreign investment laws previously in 1992, 1999, and 2004. This year marks the fourth amendment.

The news elaborated, “The DPRK is encouraging foreign companies to investment in our country based on complete equality and reciprocity and will not nationalize or collect the invested asset,” reiterating the safety and security of foreign investment.

Some analyze the recent amendment as an effort to attract more foreign investment into the country. Similarly, North Korea has recently announced the Special Economic Zone Act for the development of Hwanggumpyong and Wiwha Islands.  In addition, the state-run Academy of Social Sciences published a newsletter emphasizing the rational tax investigation for foreign companies.

The Daily NK also reported on this development:

On February 10th, Choson Central News Agency (KCNA) reported fresh amendments to North Korea’s laws governing foreign investment.

KCNA revealed, “Chosun’s law on the registration of foreign-funded enterprises has changed. 34 articles in 6 chapters of the law, which was made according to a December 21st, 2011 decision of the Standing Committee of the Supreme People’s Assembly to cover the founding, residence, taxation and customs of businesses, have been amended.”

As is ordinarily the case, specific amendments were not included in the report.

On February 9th, North Korea also announced revisions to its Foreign Investment Bank Law issuing exemptions from consumption tax. Last month also saw revisions to banking as well as labor and financial management laws.

The amendments appear aimed at assuaging the fears of Chinese enterprises over issues such as the threat of expropriation. Indeed, China is said to have last month rejected initial laws governing the management of special economic zones at Hwanggeumpyeong and Wihwa Island nr. Shinuiju for a variety of reasons.

Read the full story here:
NK Investment Laws Get Another Makeover
Daily NK
Kim Tae Hong
2012-2-13