North Korean Economy Watch

Pictured above: (L) A low-resolution image of the Hyeasn-China bridge (Google Earth) (R) A ground level photo of the bridge.

According to the Daily NK:

Construction work on a bridge connecting Hyesan in Yangkang Province and Changbai in China’s Jilin Province is raising hackles in the corridors of Sino-North Korean economic cooperation.

According to a source in China, both China and North Korea recognize that the existing ‘Friendship Bridge’ spanning the Yalu River between the two cities cannot handle increasing trade volumes. In particular, increasing copper ore production from Hyesan Youth Mine (which has been developed with Chinese capital) is putting it under unsustainable strain.

However, while China wants North Korea to expand and reinforce the existing bridge, North Korea is apparently pushing for the construction of an entirely new bridge in a different location using Chinese capital.

North Korea’s reason is supposedly one of revolutionary history. According to the source, “Chosun is opposed to the expansion of the bridge because right next to the bridge on the Hyesan side there is a stone commemorating a visit by Kim Jong Il.”

The 5m x 2m granite stone in question was set in place to commemorate the time on June 5th, 1956 when Kim Jong Il and his Pyongyang No. 1 Senior Middle School comrades stopped there during a trip to Mt. Baekdu and looked around an old royal building.

However, money also appears to be an issue. “In particular,” according to the source, “they are stubbornly insisting that ‘if you need a bridge, you should bear the burden of its construction.’”

In any case, the limitations of the bridge in its current condition are perfectly clear. It only has one lane, meaning that transit in both directions is impossible, and, though only built in 1985, there are very real concerns that its concrete structure cannot handle the Chinese heavy vehicles transporting copper ore away from the mine.

One other problem for North Korea is that the bridge is connected to Hyesan Customs House; the road off the bridge passes through the middle of the blue-roofed customs house, while the second floor houses the customs office itself. Therefore, expansion of the bridge would also involve redesigning the customs house. Due to fast flowing waters to the east, the only direction in which it is possible to expand is to the west; however, that is exactly where the commemorative stone is. Not only that, it is also the location of the local Kim Il Sung Revolutionary History Museum and Kim Jong Suk Art Theater.

Therefore, the source said North Korea has put forward an area around 4km east of the existing Hyesan Customs House as a possible candidate location for a new bridge. However, the suggested area is relatively unfavorable in terms of river width and topography, which would drive up construction costs. Given that North Korea is demanding that China bear the weight of these costs, it seems unlikely that agreement will be reached under the current conditions.

In the words of the source, “Chosun is making totally nonsensical demands. No conclusion is likely for the time being.”

This is not the first time that bridges spanning the Sino-North Korean border have been a source of friction between the two countries. Following a similar spat in 2005, China simply completed reinforcement work on its own half of a bridge between Hoiryeong and Sanhe, leaving the other half in its original state.

Related material:
1.  A Chinese company has mad a substantial investment into the Hyesan Youth Mine.

2. China is building a new bridge to the DPRK just west of the bridge linking Dandong and Sinuiju.

Read the Daily NK story here:
A Troubled Bridge between Friends
Daily NK
By Kang Mi Jin
2011-11-1

UPDATE 1 (2011-11-4): 3 DPRK sailors dead, 8 still missing after ship sinks off east China coast (Xinhua):

The body of a missing DPRK (Democratic People’s Republic of Korea) sailor was found Friday, bringing the death toll from the Oct. 28 sinking of a cargo ship off the coast of China to three, with rescuers continuing to search for eight missing sailors, according to Chinese maritime officials.

The Panama-flagged Oriental Sunrise sank with 19 crew members aboard following a collision with the Panama-flagged cargo ship Hamburg Bridge at 7:35 p.m. off the coast of east China’s city of Qingdao in Shandong Province.

The first sailor to perish in the incident died after being rescued, as he was heavily injured. The body of another sailor was retrieved on Oct. 31. Eight of the other sailors have been rescued and rescue workers are still searching for the remaining missing, according to officials from the Qingdao Maritime Safety Administration.

Salvage operations for the sunken ship are also under way, the officials said.

All of the crew members are from the DPRK, according to the Qingdao Frontier Inspection Station.

ORIGINAL POST (2011-11-1): According to the Daily NK:

The body of a North Korean crew member who went missing following the collision of two cargo ships in the waters off Qingdao, China last Friday was found yesterday morning, according to China’s Xinhua News Agency.

The two freighters, both flying Panamanian flags, collided on the 28th at around 7:35 in the evening, resulting in the sinking of the 2750-ton ‘Oriental Sunrise’. The next morning, the sunken ship’s mast was visible above the waterline.

Nine of the nineteen North Korean crew members on board the ship were rescued at the time, while ten were registered missing. One of the rescued nine later passed away, two are still in hospital and the remaining six are being put up at a local hotel.

Search-and-rescue units dispatched from Qingdao have not been able to locate the other missing crew members, and the situation now looks bleak.

Meanwhile, the other vessel, the 336m ‘Hamburg Bridge’, is now under investigation at anchor in waters near where the accident took place. There is also an oil slick of 200-300m in length and 10m in breadth at the scene of the collision.

The exact cause of the incident has yet to be established.

According to Xinhua:

Nine sailors are still missing while two have been confirmed dead after their cargo ship sank Friday, said local maritime officials Tuesday.

The Panama-flagged Oriental Sunrise sank following a collision with another Panama-flagged cargo ship Hamburg Bridge at 7:35 p.m. in the sea area near Qingdao, Shandong Province.

The death toll rose to two as a sailor’s body was found on Monday, said officials with Qingdao Maritime Safety Administration.

Nine of the total 19 crew members aboard had been rescued, but one of the three injured died after treatment failed. The rescuers will continue to search for the missing for three more days, they said.

All the 19 crew members were nationals of the Democratic People’s Republic of Korea, according to Qingdao Frontier Inspection Station.

See previous posts related to the DPRK’s shipping industry and infrastructure here.

Read the full stories here:
2 Dead, 9 Missing in Collision at Sea
Daily NK
Tang Hwa-Kwee
2011-11-1

DPRK sailors still missing, two dead, after ship sinks off E China coast
Xinhua
2011-11-1

Pictured above (Google Earth): The towns mentioned in the article below from which the Kaesong Industrial Zone could draw more labor: Pongchon (봉천), Kumchon (금천), and Phyongsan (평산).

Institute for Far Eastern Studies (IFES)
2011-10-20

According to South Korea’s Ministry of Unification (MOU), the “May 24 Sanctions” that went into effect after the sinking of the naval boat Cheonan was relaxed and began to permit the resumption of construction of businesses in the Kaesong Industrial Complex (KIC). In addition, plans to build fire stations and emergency medical facilities in the area are also currently underway.

After South Korean Grand National Party chairman Hong Jun-pyo visited KIC on September 30, 2011, the ROK government has reached the following decisions: 1) to allow the resumption of halted factory constructions; 2) to build a fire station and emergency medical facility; 3) to resume repair work for commuting roads for KIC employees; and 4) to extend the operations of commuter buses.

This means seven companies that received permits in the past to begin construction but stopped after the sanctions went into effect would be able to resume the halted construction projects.

According to the Ministry of Unification, the seven companies include three metal and machinery, three textile, and one electronic factories, taking up a total area of 103,527 square meters. The total site of production facilities of stage 1 businesses in the KIC reaches 2,171,900 square meters, in which the currently operating 123 companies take up 783,471 square meters. With the sanctions lifted, the total area of businesses in operation will reach 885,950 square meters.

In addition, five companies awaiting construction for expansion will have to wait a little longer. The authorities announced to discuss this issue at a later date, looking positively on their construction to resume shortly as well.

Also the MOU announced to push forward with the establishment of fire stations and emergency medical facilities, “to protect the properties and health of businesses and employees of the KIC. The plans to break ground for fire station will begin in mid-November and is expected to be completed by late next year.”

The layout for the KIC fire station was completed in December 2009 and 3.3 billion USD has been budgeted to fund the construction. The station will be constructed on a steel frame on a 3,305 square-meter lot with the total floor space to be around 2,182 square meters.

The Kaesong Management Committee has been operating a “fire/police station” from April 2005. But with occurrences of accidental fires since last winter, it has reinforced the number of fire engines and manpower – currently at a total of eight fire trucks and 36 fire fighters.

Medical facilities in the KIC will also be completed by the end of 2012 once the construction begins early next year. About 3 billion USD is set for this project.

Currently at the KIC, Green Doctor’s Cooperation Hospital is in charge of providing medical and health services in the KIC, with South Korea Green Doctor’s Kaesong Hospital treating the South Korean employees and North Korean Comprehensive Clinic treating the North Korean employees exclusively. The South Korea Green Doctor’s Kaesong Hospital is currently operated by volunteers at a clinic level. The hospital was in the process of improving the facilities to more than ten beds. However, this project was halted after the May 24 sanctions went in effect.

On another note, the MOU also announced that maintenance work for the road connecting Kaesong City to the KIC would begin. The road is normally used by North Korean employees of the KIC. It was also announced that the number and operation of commuter buses would increase to help with the commute. The buses operate in the 20 km radius; the plan is to increase that to 40 km. Since September 2010, the number of buses increased to 400.

There are plans to extend the service to cover the areas of Kumchon, Bongchon, and Pyongsang. However, the roads to these areas are unpaved and extension of transportation services to these areas will require negotiations with the North Korean authorities.

Although these measures will alleviate some of the problems faced by the businesses in the KIC, the MOU still stands firm on its position that North Korea must take responsibility and make formal apology for the Cheonan incident in order for a fundamental resolution of the situation to occur.

Pictured above: An American-made, petrol-guzzling Hummer H2 (MSRP 2008-$53,286; 10 mpg_-US;24 L/100 km; 12 mpg_-imp) in the parking lot of (I believe) the Yanggakdo Hotel in Pyongyang in September 2010.  The photo comes from here.

UPDATE 2 (2011-10-5): Accoridng to the Mainichi Daily News:

A man standing trial for illegally exporting luxury foreign cars to North Korea was a spy attempting to acquire foreign currency under the guise of a businessman, police allege.

An Sonki, 71, a North Korean resident of Japan, is being tried at the Tokyo District Court on charges of violating the Foreign Exchange Law for exporting three foreign luxury cars to North Korea in 2008.

An traveled to North Korea and China on 40 occasions over the past five years. He is believed to have worked as a broker between North Korea’s state-run companies and foreign firms, while ostensibly working for an electricity-affiliated company in Tokyo almost every day. He managed his own trading company, whose nominal president was a South Korean resident of Japan whom he was acquainted with.

The Metropolitan Police Department (MPD)’s Public Security Bureau had kept track of An since the 1990s because An invited North Korean trade missions to Japan and visited the North Korean passenger-cargo ship Mangyongbong while it was docked at a port in Japan.

The MPD launched a criminal investigation into the illegal export case in June and found that An belonged to a spy agency under the Korean Workers’ Party. An reportedly received instructions from the secretive agency by calling it about once a week from a public telephone.

The MPD also confiscated dozens of contracts and planning documents from locations linked to An. The documents pertained to joint crab and shrimp fishing with Russian companies; the processing and selling of kimchi with Vietnamese companies; scrapping and repairing of ships with Japanese and Chinese companies; cable copper trading with Zambian companies; and importing matsutake mushrooms and snow crabs to Japan.

An’s activities were apparently aimed at brokering joint ventures between North Korean state-run companies and foreign companies, as well as bringing supplies to North Korea. Investigators suspect that An was helping with North Korea’s acquisition of foreign currency and the improvement of power supply in the North.

An was reportedly living a frugal life, renting a six-tatami mat apartment room without a bathroom for 40,000 yen a month. The apartment was not equipped with an air conditioner or television. There was hardly any living ware in the apartment, except for a rice cooker and a compact refrigerator. His lunch box he brought to his company contained only rice and pickled vegetables. He always wore a suit, which was left by a deceased acquaintance. He rarely contacted his separated wife and child.

“I never thought of my own interests but acted in accordance with the agency’s instructions,” An was quoted as telling investigators.

An has not revealed much about the flow of his money. Investigators confiscated 1 million yen in cash and wads of receipts from traveling abroad, but the origin of those funds is unknown.

“His activities are shrouded in mystery. We suspect that the importance of secret agents like him has been increasing in North Korea, which is under economic sanctions,” said a senior MPD official.

During the first hearing of the trial on Sept. 9, An demanded that all charges in the indictments be withheld. How much of his secret activities will be revealed depends on the questioning of the defendant during the ongoing trial.

UPDATE 1 (2011-7-7): According to the Mainichi Daily News:

A North Korean man under arrest for illegally exporting luxury foreign cars to Pyongyang by way of South Korea allegedly disguised the cars as destined for foreign embassies, it has been learned.

An Sonki, 71, a North Korean resident of Tokyo’s Bunkyo Ward, was earlier arrested by the Metropolitan Police Department (MPD) on charges of violating the Foreign Exchange Law for exporting luxury foreign cars to North Korea from Kobe in 2008 under the instruction of the Workers’ Party of Korea’s undercover agency.

According to the latest revelations, the North’s undercover agency instructed An to make the Indian Embassy in Pyongyang one of the final destinations of the exported cars apparently to prevent South Korean authorities from uncovering irregularities when the cars went through the South. The MPD is trying to work out all the facts of the case.

An is suspected to have exported three fancy foreign cars to Pyongyang on two separate occasions in 2008, ferrying the cars from Kobe Port. The export was undertaken by a Tokyo-based trading company called “Godo Holdings,” which is effectively managed by An. The MPD suspects that An is a North Korean agent.

According to the MPD’s Public Security Bureau, An had declared to Japanese customs that the consignee of the luxury cars was a delivery company in Seoul. However, the vehicles were ultimately shipped to North Korea by way of the South, where the items were re-registered as transit cargo. It is believed that the cars were declared as destined for the embassies when they cleared South Korean customs.

Investigators have confiscated from An’s home documents that described a plan to make the Indian Embassy and a Middle Eastern embassy in Pyongyang the final destinations of the cars.

“I was told to make the embassies the nominal destinations of the cars,” An was quoted as telling investigators.

Investigators have also confiscated a North Korean passport, a seal with the name of the undercover agency engraved, as well as a document describing a plan to establish routes to distribute the North’s agricultural and marine products to Japan, the United States and Europe. It has also emerged that An had traveled to South Africa in order to procure rare metals, according to investigators.

An reportedly belonged to a section of the North’s undercover agency that was in charge of Japan.

More on the interesting business dealings of the North Korean embassy in India below.

ORIGINAL POST (2011-6-21): According to KBS:

Japanese police have arrested a North Korean citizen on charges of selling luxury foreign cars to the North through South Korea.

Japanese media said that the North Korean man, who resides in Tokyo and was identified only by his surname “Ahn,” is charged with violating Japan’s foreign currency law.

Ahn is accused of illegally exporting three used Mercedes-Benz cars to North Korea without the Japanese government’s permission. The cars were shipped to the communist country from Japan’s Kobe port via South Korea’s Busan and Incheon between September and December 2008.

This is the first uncovered illegal export scheme to use South Korea as a stopover between Japan and North Korea. China is generally the popular channel for illegal exports between the two nations.

Japanese police also believe that Ahn is a North Korean spy.

Back in May, the DPRK detained two Japanese men for drug smuggling in Rason, and North Korean Embassy officials in India came under investigation for involvement in a luxury car smuggling case worth W100 billion (US$1=W1,091).

Read the full story here:
Japan Arrests N. Korean on Charges of Illegal Export
KBS
2011-6-21

Only weeks after helping launch the DPRK’s first Ultimate Frisbee tournament (see here and here), Koryo Tours launched the first bicycle tour of the DPRK. According to the Telegraph:

Beijing-based Koryo Group took 24 tourists from 10 nations on a 10-day tour of the most isolated nation on Earth.

The cyclists pedalled as far as 30 miles a day, often along dirt tracks in some of the most remote parts of the country, but also journeyed along the 10-lane Youth Hero Highway from Pyongyang to Nampo, on the west coast.

The itinerary is here. The Telegraph has a video of the tour here, and Koryo Tours has posted additional pictures here.

KCNA even gave an “interesting” shout out to the bike tour:

DPRK Directs Effort to Developing Tourism

Pyongyang, September 27 (KCNA) — The DPRK is directing much effort to developing tourism, with an eye to promoting the understanding, harmony, friendship and cooperation among nations and people of the world.

The country joined the United Nations World Tourism Organization (UNWTO) in September Juche 76 (1987) and the Pacific-Asia Tourism Association (PATA) in April 1996.

On September 27, World Tourism Day, Hong In Chol, a department director of the State General Bureau of Tourism, told KCNA:

The number of travel companies and people interested in the DPRK tourism is steadily increasing in Asian and European countries.

In particular, many tourists have visited the DPRK in the period of the grand gymnastic and artistic performance “Arirang” through international air routes and chartered flights from Shanghai, Xi An and Haerbin of China and Kuala Lumpur of Malaysia.

We have travel offices in China, Malaysia and Germany and plan to open such offices in other countries.

The bicycle tourism which took place in the DPRK some time ago under the sponsorship of the “Koryo Tours”, a British tourist agency, was very interesting.

The country’s tourist destinations have taken on a new look under the deep care of the Workers’ Party of Korea and the government, while the project for modernizing the infrastructure of tourism is progressing apace.

We will diversify the tourist program with cultural, sports, bicycle, golf and treatment tourism and improve all services.

Institute for Far Eastern Studies (IFES)
2011-9-14

At the seventh China Jilin and Northeast Asia Investment and Trade Expo (NEASIAEXPO), the North Korean delegation actively promoted the Rajin-Sonbong (Rajin) Economic and Trade Zone to attract investment.

During the expo, the DPRK’s Ministry of Trade and China’s Ministry of Commerce and People’s Government of Jilin Province co-sponsored the “(North) Korean Business Day and China-DPRK Trade and Investment Session” at the Changchun International Conference and Exhibition Center on September 7. Hwang Chol-nam, the vice mayor of Rason City, briefed the attendees on the current situation, advantages, and special benefits of his city.

According to Hwang, “The spacious 470 square-kilometer Rason Economic and Trade Zone is one of the largest economic trade zones,” and advertised the geographic and economic advantages of Rason as the “transportation hub of Northeast Asia that connects China and Russia via Tumen River and with Japan across the East Sea.”

He also introduced the three ports in the region. “Rajin Port is equipped with the annual loading capacity of 3 million ton and Sonbong Harbor is able to transport 2 to 3 million ton of oil while Ungsang Harbor is able to handle up to 600,000 cubic-meter of lumber annually.” He also boasted the ports to be deep enough where it does not freeze during the winter.

Rason was also introduced to have received the “special city” designation in 2010 and will grow to have a population of one million. The recently amended “Law on the Rason Economic and Trade Zone” was revised and supplement with over 50 articles.

Hwang also elaborated on the eight preferential policies providing special tax benefits to foreign investors. He asserted, “The government of North Korea will guarantee the investment of the foreign investors by not nationalizing or demanding requisitions. For inevitable cases where such demands occur, proper compensation will be provided.”

The income tax is also at 14 percent, which is 11 percent lower than other areas in North Korea. For companies with business plans over ten years, foreign capital companies will receive three years of tax-free benefit starting from the profit earning year and two years thereon after will receive 50 percent tax-free benefits. According to Hwang, over 100 foreign companies and offices are operating businesses currently in the special economic zone.

He also announced that the current highway construction project connecting Rajin with Wonjung is expected to be completed in October, and that the Tumen-Rajin port railway system is to be upgraded to a broad gauge railway next month.

Specifically, Russian Railways reached an agreement with North Korea to repair the Hasan-Rajin Railway and improve the Rajin port facilities, especially focusing on Pier 3. The plans include upgrading Rajin as a container harbor to be capable of transporting twenty-foot equivalent units annually. Russia and the DPRK have already conducted measurement and geological surveys and reached the process design phase.

However, Seo Gil-bok, the DPRK’s vice minister of commerce, stated in a speech that North Korea would “actively work hard to make the Rason region a successful collaboration between the DPRK and China,” saying further that they would “pull out all the stops to realize the goals agreed by the best leaders from both nations.”

Many foreign media and correspondents were present at the event to cover the “Korean Business Day.” At the event, North Korea actively promoted the Rason Economic and Trade Zone by also presenting a promotional video of the zone.

Below is some short, light North Korea fare for the holiday weekend (in the USA).

1. Kim Jong-il’s Train

The title “First peek into Kim Jong-il’s train” in a recent JoongAng-Ilbo article (later picked up by the Choson Ilbo) kind of irked me since I posted pictures and video (viewed over 8,000 times) of Kim Jong-il’s train back in May. The article claims such glimpses are rare, but this is not the case.  The train has been prominently featured in all the documentaries of Kim Jong-il’s trips for decades.  I have uploaded six different videos of Kim Jong-il’s train to YouTube which have been released over the years.  You can see them all: here, here, here, here, here and here.

2. Ultimate Frisbee

Pictured above: Taesongsan Park–site of the DPRK’s first ultimate frisbee tourney

Koryo Tours, which sponsored the DPRK’s first cricket match (2008) and first golf tournament (2005), recently wrapped up the country’s first ultimate frisbee tournament. Pictures available on Facebook.

3. Picture Guessing Game

What is in this box behind Kim Jong-il?

What is inside the sleeve of this security agent guarding Kim Jong-il?

4. Early Korea in Film

A reader sent me an hour-long documentary of Korea shot by German monks in the early 1900s. Fantastic footage.  You can watch the whole piece here.

Pictured above (Left) a screenshot from video footage shot in Korea in the early 1900s. The building is the Jangan Temple (장안사) in Kumgangsan. On the right is a Google Earth satellite image of where the temple used to stand before it was destroyed in the Korean War.

5. North Koreans frolicking by the pool

Since the summer has officially come to an end, I thought I would cap it off with this video of North Koreans playing in the water.

38 North
Andray Abrahamian
2011-8-29

A bus bumps and bruises its way along the unpaved road, carrying would-be investors to Rason’s First Rason International Trade Exhibition which ran from August 21-25, 2011, in Sonbong. The windows are open, until a crimson humvee barrels past, its powerful suspension dancing on the road, leaving behind a plume of beige dust. The bus windows snap shut, the still air quickly gets hot and more than one of the passengers wishes we were Chinese high-rollers, being whisked to the Emperor Casino and Hotel, which sits beautifully on Korea’s East Sea, overlooking Bipa Island and flanked by lush green mountains and crystal waters.

The passengers of the humvee-part of the casino’s fleet-will long be checked in and gambling their fortunes away by the time we complete our two and a half hour journey. However, it won’t always be this way. Rason’s 50km road to the border is finally being upgraded. Indeed, the 2.5 hour journey took 3.5 hours in June. Since then, the road has been widened, the first stage of the construction plan, allowing for traffic to flow both directions more easily and smaller passenger vehicles to overtake the more cumbersome truckers who ply the road.

Its construction is an important sign in the development of the Rason Special Economic Zone. Rason, an amalgamation of the names of the area’s two biggest cities, Rajin and Sonbong, could theoretically be a vibrant hub for both logistics and manufacturing. It is located in the far Northeast of the Democratic People’s Republic of Korea, bordering Russia and China. It has abundant, cheap labor and the region’s northernmost ice-free port. It has been a legal entity since the early 1991, but has struggled to reach its potential in the face of ambivalence from Pyongyang and difficult geopolitical circumstances.

Local administrators have bold plans for this experiment in economic opening-up and to develop as the Rason Municipal People’s Committee has imagined, an efficient road link with China’s Northeastern provinces is vital. For about a decade, improvements to the road have been “under discussion” and “coming soon,” but it is now undeniably underway. Work began in May of this year…READ MORE HERE

According to Yonhap:

North Korea unveiled Sunday its business plans to redevelop a troubled mountain resort in the isolated country, after seizing South Korean properties in the complex once considered a symbol of inter-Korean reconciliation.

The move is expected to further deepen the dispute over the resort at Mount Kumgang, with South Korea vowing to take all possible measures, including legal action with an international tribunal, against the North’s decision to “legally dispose” of Seoul-owned assets there.

The business plans were presented to Yonhap News Agency by Park Chol-su, head of Daepung International Investment Group, which serves as a window to North Korea to attract foreign capital.

Daepung invited this week a group of foreign business executives and journalists to the resort to explain the business plans. During the four-day trip beginning Sunday, the group will visit Mount Kumgang via ship after departing from the northeastern port city of Rason.

The plans call for North Korea to redevelop the resort into an international tourist and business zone by building golf courses and hosting casinos from China and Western nations.

Using a railway linking Beijing to Pyongyang and the resort, North Korea plans to attract tourists from the United States, Japan, China and Hong Kong, Park said.

The North is also seeking to run tours linking Rason and Mount Kumgang by ferry, with an eye to woo Chinese tourists.

Under the first-stage plan, the North’s state agency will build energy and electricity facilities at an area of 60 square meters in the resort and let foreign business partners develop part of the area with their own projects, Park said.

North Korea plans to collect taxes from foreign partners to operate their facilities, according to Park. The area will be open to foreigners, but remain off-limits to ordinary North Koreans.

Additional Information:

1. According to the JoongAng Ilbo, the ship that will be used to ferry travelers from Rason to Kosong (Changjon) is the Mangyongbong 92. The ship will have to use a dock built by Hyundai-Asan. Hyundai is known to have spent around 170 billion won ($157,000) on the pier and the roads linking the pier to the resort.

2. The Daily NK adds a few additional details on the investment zone.

3. A timeline of Kumgang events, from the shooting until today, can be found here.

Read the full story here:
N. Korea unveils business plans for troubled mountain resort
Yonhap
2011-8-28

Institute for Far Eastern Studies (IFES)
2011-8-24

Kim Jong Il’s visit to Moscow on August 20 is sparking interest for the future of economic cooperation between the two countries.

According to the KCNA, Russian President Dmitry Medvedev expressed interest to increase trilateral cooperation between the ROK-DPRK-Russia in the gas, energy, and railroad sectors. In the message sent from Medvedev to mark the 66th anniversary of independence from Japanese colonial rule, “plans to expand cooperation with the DPRK and the ROK in gas, energy, and railroad industry” were emphasized.

The cooperation projects are evaluated to have “great economic and political significance contributing to the stability in Northeast Asia and denuclearization of the Korean peninsula.”

In July 4, the KCNA reported that the delegates from the Russian energy giant Gazprom headed by Chairman Alekhsandr Ananenkov visited Pyongyang to discuss energy cooperation, although details of the visit was not elaborated. Ananenkov was reported to have met with North Korean officials in gas and oil industriesto discuss bilateral cooperation in these areas.

Russia has also expressed interest in linking gas pipelines to export natural gas to South Korea via inter-Korean railroad system.

A spokesperson of the foreign ministry of the DPRK reported on the recent visit from the vice-foreign minister and chief representative of Russia on Six-Party Talks, Aleksei Borodavkin, this past March. In the statement, the Russian government expressed concerns for improving inter-Korean relations and stressed prospects of the tripartite economic cooperation projects with North and South Korea including the construction of railways, gas pipeline, and a transmission line linking the three countries. The DPRK also expressed support for the upcoming economic cooperation projects.

In result, the main agenda in the bilateral economic cooperation between Russia and North Korea entails railway, gas pipeline, and transmission line construction.

President Lee Myung-bak has met with the Russian president Medvedev in September 2008 in Moscow. At the summit, the two presidents reached an agreement to pursue projects to export Russian PNG or pipeline natural gas to South Korea through a pipeline via North Korea from 2015.

Immediately following the summit, South Korea’s Korea Gas Corporation (KOGAS) and Russia’s Gazprom signed a memorandum of understanding (MOU) to jointly study the possibilities of constructing a long-distance pipeline running from Vladivostok. Under the contract, Russia will send at least 7.5 million tons of natural gas annually for a period of 30 years through a pipeline to South Korea via North Korea.

This joint study between ROK-Russia is expected to serve as a momentum in bringing diverse economic cooperation between North and South Korea as well.

While it is still premature to judge the long-term outlook for such trilateral economic cooperation, its effects are anticipated to contribute to stability and peace in the Northeast Asian region.

Additional Information: here is a summary of the recent Kim Jong-il — Medvedev summit.