Archive for November, 2007

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Ignoring Buffett, Fabien Pictet Eyes North Korea Fund

Sunday, November 11th, 2007

Bloomberg
Bradley Martin
11/2/2007

Fabien Pictet & Partners Ltd., a British money manager that specializes in emerging markets, plans to establish a fund focused on joint ventures in North Korea.

Fabien Pictet has applied to North Korea’s embassy in London for permission to visit Pyongyang to explore opportunities, Chief Executive Officer Richard Yarlott said in an interview. The closely held firm initially would buy into South Korean companies doing business in the north, he said.

“It would be very difficult to put more than $50 million directly into North Korea,” said Yarlott, 47, who helps manage $750 million of bonds and equities. “But it would be very easy to put $500 million into listed South Korean companies and then later, as we see specific private equity opportunities, go with them.” He declined to give further details.

A North-South agreement on economic cooperation, signed Oct. 4, may foster cross-border projects in industries such as mining and shipbuilding. Still, that prospect isn’t enough to lure billionaire investor Warren Buffett to a northern plunge.

“Things would have to change a whole lot before we can make investments,” said Buffett, chairman and CEO of Berkshire Hathaway Inc., during a visit to South Korea last week.

Buffett, who owns shares of South Korea’s Posco, Asia’s biggest steelmaker by market value, rates the nation’s stocks as “modestly cheaper” than most around the world. The benchmark Kospi index’s price-to-earnings multiple of 15.4 for current year estimated earnings is the lowest in Asia-Pacific after Thailand.

London-based Fabien Pictet, set up in 1998, invests in countries from Brazil to the Ukraine.

It started a South Korean equity fund, Three Kingdoms Korea Fund Inc., in 2004 partly to be ready for a northern push, Yarlott said.

LG Corp., Hyundai

South Korean companies — including units of LG Corp., the country’s fourth-largest industrial group, and Hyundai Corp. — have $2 billion to invest over the northern border, he said.

Three Kingdoms Korea has had a total return of 88.5 percent from April 30, 2004, to Sept. 28 this year. South Korea’s Kospi has risen 126 percent in the same period.

Foreign investment in North Korea has been legal since 1984 and repatriation of profits since 1992. The country doesn’t permit private ownership of assets and hasn’t established a stock exchange.

South Korea’s closely held Hyundai Asan Corp., which started a northern tourism business in 1998, has been reported to be struggling to avoid or reduce operating losses.

London-based Anglo-Sino Capital Partners Ltd., which in 2005 created Chosun Development and Investment Fund to focus on direct investment in North Korea, last month doubled its investment target, citing strong interest.

“We have raised the fund from $50 million to $100 million,” Colin McAskill, chairman in London of Koryo Asia Ltd., the Chosun fund adviser, said in an interview.

The fund will concentrate on direct transactions with North Korean companies that have been active internationally and have track records as foreign currency earners, he said.

Some investors say it’s too early to call North Korea an emerging market.

“I’m 77 years old and the thought that the day would come in my time — it’s very flattering but it’s a long way off,” said Buffett, also known as the “Sage of Omaha.”

Yarlott said the country was changing. “North Korea, like China, will develop a stock market,” he said.

“At this rate, even the sage will get a look-in.”

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Posted in Anglo-Sino Capital Partners Ltd, Banking, Economic reform, Fabien Pictet & Partners Ltd, Finance, Foreign direct investment | Comments Closed

Chongryun feature on Japanese telivision

Sunday, November 11th, 2007

Via Youtube:

congryun.JPG

This feature is the only of which I am aware that so extensively covers the Chongryun in Japan.

Cick on the image to see it.

 

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North Korea Shuts Down Most of Its Complex Microbial Fertilizer Factories

Sunday, November 11th, 2007

Daily NK
Moon Sung Hwee
11/11/2007

A source inside North Korea reports that most of the country’s complex microbial fertilizer factories built during the mass starvation period in 1990s for increase of food production have been shut down.

The source said, “Those factories built between 1996 and 1997 in Kyongsung county of North Hamkyung Province had produced fertilizers only for one year following the construction. The year after, they were shut down. Now, the factory buildings are cleared”

North Korean media has praised till quite recently about North Korea’s advanced technology for producing complex microbial fertilizers. They said that the country’s fertilizer-producing technology and nature farming methods helped solve the food crisis and protect the ecosystem of North Korea. South Korean media have also once positively reported upon North Korea’s new fertilizer-producing technology.

However, the source said, “The situation is pretty much the same across the country. Most factories had stopped operating the year after the construction. It was Kim Jong Il who gave orders to build those fertilizer plants. But many factories fell into ruins.”

North Korea had built more than one hundred complex microbial fertilizer plants throughout the country during the mass starvation period in 1990s because it needed quite an amount of fertilizers to increase crop production.

The agricultural technology, which uses complex microbial fertilizers is a natural farming method developed by Dr. Teruo Higa, a professor at Ryukus University, Okinawa, Japan and the founder of Effective Microorganisms(EM) technology. Since complex microbial fertilizers contain 100 times more nutrients than ordinary fertilizers, they are used in many places in South Korea such as Yichu city of Kyungki Province where environment-friendly agriculture method is being practiced.

When crop production rapidly decreased in the mid 1990s, the failure was attributed to soil acidification, and Kim Jong Il urged his people to spread burnt soil, decomposed grass and compound fertilizers composed of soil, manure and chemical fertilizers over the field.

Unfortunately, that did not work. Then, Kim Jong Il gave another order to produce complex microbial fertilizers in large quantities in an attempt to increase crop production. Upon his order, North Korea started promoting the construction of complex microbial fertilizer plants through Chongryon (General Association of North Korean Residents in Japan) and built more than one hundred factories nationwide for the period of one year including ‘Patriotic Center for Complex Microorganism,’ whose construction work was completed in June, 1997.

Many North Koreans had to use pure grain to make complex microorganisms instead of costly granulated sugar. However, that was a bad idea because there was food shortage across nation and a great number of people were staving to death. Moreover, North Korea should not have wasted grain for microorganism production in such situation because it takes three years to see any effect of the use of microorganisms on crop production.

Kim Yong Hwa (pseudonym), a defector from Hyesan city of Yangkang Province, who used to work at ‘Patriotic Center for Complex Microorganism’ said, “350 kg of corn is used to make one ton of fermentation solution. That amount of corn is sufficient enough to feed one person for an entire year. Overall, the plant had used 38 tons of corn during its first two- year operation.”

The defector said, “The workers received food ration, but it wasn’t enough. So, many people stole corn power and even fermentation solution from the factory.” The defector added, “When people heard that we were using corn to make fertilizers, they found it hard to believe at first, but soon flared up in anger, saying ‘those microorganisms are eating us.’”

The defector said, “In addition, we did not know what to do with microorganisms we had produced because we didn’t have gas and a means of transportation. Sometimes, containers for storing microorganisms were lost or broken. We also had difficulty to move around microorganisms because they were produced in liquid form.”

Kim said the locals did not believe the expert’s explanation that microorganisms would produce germs three years later, which produce nitrogen gas, and therefore make soil rich. He said that the locals disapproved the use of corn for the production of microorganisms, and had no interest in sowing microorganisms in the field. Therefore, Kim said, the plant had to close.

South Korean experts have continued to point out the problem of soil acidification in North Korea and encourage the use of organic fertilizers. Nevertheless, many defectors criticized the use of grain for the production of complex microbial fertilizers for being detached from the realities of food situation in North Korea.

Lee Min Bok, a defector who used to work at North Korean Academy of Agricultural Science, said, “Staring with 1979, soil acidification became a serious problem, and Kim Jung Il has been giving orders to improve soil condition. The use of microorganisms can better the condition to some extent. However, North Korea needs to come up with comprehensive policies on its agricultural structure, anti-flood afforestation, and the establishment of production systems for chemical and organic fertilizers to solve the acidification problem.”

The source inside North Korea said, “In 1996, the authorities began praising about the effect of complex microbial fertilizers. Disappointedly, there weren’t any significant effect. So, starting with 1999, many fertilizers plants began to shut down.” The source added, “Most plants fell into ruin except few large factories such as Patriotic Center for Complex Microorganism in Pyongyang and a fertilizer plant in Rasun.”

North Korea began to display an interest in the production of complex microbial fertilizers because it had failed to produce enough manure and chemical fertilizers before. The South Korean government agreed to provide North Korea with 300,000 tons of chemical fertilizers this year and 400,000 tons next year.

According to Rodong Shinmun (North Korean state newspaper), Kim Jong Il spoke about the worldwide decrease in the production of chemical fertilizers, and stressed the importance of the use of microbial fertilizers in May, 2004.

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Posted in Agriculture, Labor conditions/wages, Manufacturing | Comments Closed

Google Earth North Korea (version 6)

Sunday, November 11th, 2007

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

kissquare.JPGThis 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.

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Posted in Advertising, Agriculture, Architecture, Automobiles, Aviation, Banking, Black markets, Committee for Cultural Relations with Foreign Countries, Communications, Computing/IT, Dams/hydro, Department Store No. 1, Economic reform, Education, Electricity, Energy, Environmental protection, Film, Finance, Fiscal & monetary policy, Football (soccer), Forestry, Gambling, Gasoline, General markets (FMR: Farmers Market), Golf, Google Earth, Hana Electronics Company, Health care, Hoteling, Hwanggumphyong and Wihwado Economic Zones (Sinuiju), Hyesan Youth Cooper Mine, Kaesong Industrial Complex (KIC), Kim Il Sung University, Korea Computer Center (KCC), Library, Light Industry, Mansudae creative Company (art studio), Manufacturing, Mass games, Maternity Hospital, Military, Mining/Minerals, Ministry of Culture, Ministry of Foreign Trade, Mt. Kumgang Tourist Special Zone, Musan Mine, Music, Nuclear, Pyongyang Embroidery Institute, Pyongyang Film Studio, Pyongyang Informatics Center (PIC), Pyongyang International Information Center of New Techn, Pyongyang International Trade Fair, Pyongyang Metro, Railways, Rason Economic and Trade Zone (Rajin-Sonbong), Real estate, Religion, Restaurants, Sea shipping, Special Economic Zones (Established before 2013), Sports, Steel, Supreme Peoples Assembly, Television, Tourism, Transportation, Water, Wind | Comments Closed

N. Korea Offers Evidence to Rebut Uranium Claims

Saturday, November 10th, 2007

Washington Post
By Glenn Kessler
11/10/2007
Page A01

North Korea is providing evidence to the United States aimed at proving that it never intended to produce highly enriched uranium for nuclear weapons, undermining a key U.S. intelligence finding, South Korean and U.S. officials said this week.

In closely held talks, the North Korean government has granted U.S. experts access to equipment and documents to make its case, in preparation for declaring the extent of its nuclear activities before the end of the year. North Korean officials hope the United States will simultaneously lift sanctions against Pyongyang as the declaration is made.

If North Korea successfully demonstrates that U.S. accusations about the uranium-enrichment program are wrong, it will be a blow to U.S. intelligence and the Bush administration’s credibility.

The U.S. charges of a large-scale uranium program led to the collapse of a Clinton-era agreement that had frozen a North Korean reactor that produced a different nuclear substance — plutonium. That development freed North Korea to use the plutonium route toward gathering the material needed for a nuclear weapon. Pyongyang conducted its first nuclear test last year, detonating a plutonium-based device, and has built a plutonium stockpile that experts estimate could yield eight to 10 nuclear weapons.

“They have shown us some things, and we are working it through,” a senior U.S. official said yesterday, speaking on the condition of anonymity because the talks are confidential. “We are having a discussion about things. Some explanations make sense; some are a bit of a stretch.”

“This is now in the process of being clarified,” a senior South Korean official said in an interview. “The North Koreans are now ready to prove that they did not intend to make a uranium-enrichment program by importing some materials.”

He said North Korea is attempting to show that the materials it imported — including 150 tons of aluminum tubes from Russia in June 2002 — were intended for conventional weapons programs and other dual-use projects, not for weapons of mass destruction.

The South Korean official said North Korea’s efforts mark an important shift. “In the past, North Korea simply said no,” he said. “Now they are trying to convince us.”

U.S. intelligence first concluded in July 2002 that North Korea had embarked on a large-scale program to produce highly enriched uranium for use in weapons, saying it was constructing a facility that would be fully operational by 2005. “We discovered that, contrary to an agreement they had with the United States, they’re enriching uranium, with a desire of developing a weapon,” President Bush said in a November 2002 news conference.

U.S. officials have also asserted that a senior North Korean official admitted the existence of the program in an October 2002 meeting in Pyongyang between officials from both nations. North Korea later denied that any such admission took place.

After the administration accused Pyongyang of violating a 1994 agreement struck with President Bill Clinton to freeze its plutonium facilities, North Korea ejected U.N. inspectors from the country and restarted its plutonium reactor, allowing it to stockpile its weapons-grade material.

For years afterward, during the impasse over North Korea’s nuclear ambitions, the Bush administration insisted that North Korea first admit having the uranium facility, rejecting arguments from other nations that it was more important to freeze the plutonium facility in order to halt the nation’s production. After North Korea tested the nuclear device, the administration agreed to a deal in which Pyongyang froze and then disabled the plutonium facility in exchange for international aid.

Plutonium and highly enriched uranium provide different routes to building nuclear weapons. The North Koreans were able to reprocess 8,000 spent fuel rods — which had been held in a cooling pond and monitored by U.N. inspectors under the 1994 agreement — to acquire the weapons-grade plutonium. A uranium program would have required Pyongyang to build a facility with thousands of centrifuges to obtain the highly enriched uranium needed for a weapon. Iran’s nuclear program, which the United States alleges is intended for weapons, involves enriched uranium.

The administration this year began to back off its earlier assertions that North Korea has an active program to enrich uranium. In February, the chief U.S. intelligence officer for North Korea, Joseph R. DeTrani, told Congress that while there is “high confidence” that North Korea acquired materials that could be used in a “production-scale” uranium program, there is only “mid-confidence” that such a program exists.

David Albright, a former U.N. inspector and president of the Institute for Science and International Security, said in a report this year that there is “ample evidence” that North Korea was trying to put together a small-scale research program involving a few dozen centrifuges but that claims of a large-scale effort were flawed.

Albright said yesterday that the tubes acquired by North Korea needed to be cut in half and shaped in order to be used as the outer casings of centrifuges. If Pyongyang proves that the tubes were untouched, he said, it could “shatter the argument” that they were meant for a uranium program.

But Albright said it is difficult to see how North Korea could explain away a set of centrifuges that Pakistani President Pervez Musharraf said a Pakistani nuclear-smuggling network provided to Pyongyang. “I think the North Koreans are making a big mistake” if they deny they had any interest in uranium enrichment, he said. “They are going to create a lot of trouble if they stick to this.”

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N. Korea Shows Signs of Opening Up, After Decades of Self-Imposed Isolation

Friday, November 9th, 2007

Washington Post
Blaine Harden
11/9/2007
Page A14

Choi Won-ho has made six trips to North Korea in the past two years, struggling each time to convince the reclusive government there that the time was ripe for a chicken franchise.

“I told those guys that Kentucky Fried Chicken would come sooner or later,” said Choi, president of a company that has franchised 70 chicken restaurants in South Korea. “I told them it would be better to have an indigenous Korean brand, with takeout delivery.”

To Choi’s astonishment, his pitch is now falling on receptive ears in Pyongyang. This month, he plans to open the first foreign-run restaurant in the North Korean capital in the history of the Stalinist dictatorship.

North Korea is opening up to much more than fast-food chicken.

A team of U.S. experts is in North Korea this week to start disabling three key facilities at the Yongbyon nuclear site — just 13 months after the government of Kim Jong Il stunned the world by exploding a nuclear device. The disabling process was off to “a good start,” a State Department official said Tuesday.

And as part of an extraordinary spurt of diplomacy, senior officials from Pyongyang have been touring Southeast Asia, the Middle East, Africa and Russia in recent months. In the same vein, relations with five countries have been initiated or renewed since summer.

Officials from the New York Philharmonic were welcomed this fall to Pyongyang, where they inquired about holding a concert next year, and a North Korean taekwondo team made its first visit to the United States in September. Last week, the U.S. Navy helped out a North Korean cargo ship that had been attacked by pirates off the coast of Somalia.

In the wake of a summit last month with South Korea, the North is also opening up to a new kind of tourism. It will allow nonstop flights from Seoul to a mountain resort called Mount Baekdu.

The decision — ballyhooed this week on the front page of a state-controlled North Korean newspaper — would for the first time in 62 years give travelers a direct connection from South Korea to the resort without a detour through China.

All this seems to add up to something of significance in the long effort to persuade North Korea to abandon nuclear weapons and emerge from decades of self-imposed isolation, according to Christopher R. Hill, assistant secretary of state for East Asian affairs and the principal U.S. negotiator in six-nation nuclear talks.

“In the past, North Korea often spoke of their isolation as a great benefit for their country,” Hill told reporters in Tokyo last weekend. “I think they’ve understood it now as something that is actually harming them, and that the best-case scenario for what they’re doing is to believe that perhaps it is part of an overall effort to open up.”

Hill said that not everyone in North Korea agrees that opening up is a good idea and that whatever happens is “going to be a slow process.” In Seoul, South Korean Defense Minister Kim Jang-soo told reporters that the North is continuing to buy weapons. “We cannot conclude that the threat from North Korea has been reduced,” Kim said.

But Hill sounded genuinely optimistic about the North’s recent gestures.

He said officials in China, which shares a border with North Korea and is its most important ally, have also noticed signs of economic reform in the North. “The Chinese, who probably know the DPRK best, believe that there is an effort on the part of the DPRK to open up,” Hill said, using the initials of the North’s official name, the Democratic People’s Republic of Korea.

North Korea’s recent high-level contact with Vietnam, another communist state that has opened its economy, is “very interesting,” Hill said. North Korea’s premier, Kim Yong Il, who is in charge of economic policy, traveled last week to the Southeast Asian country, where he visited a port, a coal mine and an industrial zone.

A breakthrough in the six-party talks occurred last month, when Pyongyang agreed to disable its nuclear-processing facilities and disclose all of its nuclear programs in exchange for aid, trade and a U.S. agreement to move toward removing the country from its list of states that sponsor terrorism.

The cause of that breakthrough, in the view of many Western and Korean analysts, was a burst of intense and pragmatic U.S. diplomacy after North Korea’s nuclear detonation last year.

Since Hill’s subsequent outreach to his diplomatic counterparts in North Korea, Kim Jong Il has come to believe that he can negotiate with the Bush administration, said Koh Yu-hwan, a professor of North Korean studies at Dongguk University in Seoul.

“The Bush administration is not going to be around for long, and North Korea is worried about losing momentum,” Koh said. The economy of the North desperately needs the outside investment that would come if the United States removes the terrorist listing, he noted.

If that designation is still in place when Bush leaves office in January 2009, officials in North Korea fear they will have to start all over with a new administration, costing them years, Koh said. “The North cannot wait that long,” he said. “The economy there is in too much trouble. The reason you see noticeable change in the North now is that they have an incentive to act.”

Even with that incentive, any opening up of North Korea is certain to be slow and quirky.

A case in point is Choi and his push north with fast-food chicken.

Choi received an e-mail this week from his joint-venture partners in Pyongyang demanding changes in the words and the font used in brochures for the chicken restaurant. The partners are from a government-owned company.

The e-mail said the brochures could not include any descriptions of chicken dishes derived from English. “Chicken fry-ee-doo,” a term widely used in South Korea, was unacceptable and must be changed to more authentic Korean language, the e-mail said.

The partners from Pyongyang also insisted that the chicken brochures be printed in the official North Korean national font.

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Posted in Economic reform, Foreign direct investment, Restaurants | Comments Closed

Are the Residents of Samjiyeon Subject to Forced Mass Relocation for Baekdu Mountain Trip Project?

Friday, November 9th, 2007

Daily NK
Moon Sung Hwee
11/9/2007

The conservative wing in South Korea purported that the opening of the direct Seoul-Baekdu air route would not lead to reforms and open-door policies of North Korea as proved in the case of Geumkang Mountain sightseeing. Hyundai Asan Co. and Korean Asia-Pacific Peace Committee of North Korea have just made a contract for the direct airline staring May next year.

Individuals who travel Mt. Geumkang by land will pass Yuongwoong Middle School, and Onjeong-ri and Yangji village on both sides of the road, all of which are walled off from tourists. Even in Geumkang Mountain, many places are enclosed with iron railings and armed soldiers are guarding them.

Many defectors originally from the Mt. Baekdu areas say that the locals have relatively ease access to the mountain, and so the sightseeing tour of Baekdu Mountain would bring considerable impact on the locals.

The sightseeing tour of Mt. Baekdu passes through Lake Cheonji and Yimyungsoo Waterfall, both of which are popular visiting places for many locals, and Samjiyeon ski resort is located in nearby villages.

Furthermore, every year hundreds of thousands pay a visit to many revolutionary sites in Mount Baekdu. When the tour begins in May next year, the locals and visitors would inevitably run into South Korean tourists. Many people wonder what the North Korean authorities would do about the contact before tourism begins.

According to the Hyundai Asan Co., tourists will fly a direct airline to Samjiyeon Airport and stay at either Sobacksu Visitor’s Hall or Begaebong Hotel. Then, they will visit Sobaeksu Forest, Yimyungsoo Waterfall, Mangchun Peak, Jangkoon Peak and Cheonji Lake.

Tourists must pass through the downtown of Samjiyeon in order to get to Mount Baekdu from Samjiyeon Airport. Unlike Onjong-ri located nearby Geumkang Mountain, it is difficult to close off many places in the Baekdu Mountain areas especially those densely populated villages around Yimyungsoo Waterfall and Samjiyeon ski resort.

In July, 2005, Hyundai Corporation had also once made a contract with North Korea for the development of the Baekdu Mountain areas for tourism. But it was not successful back then because North Korea had a conflict with the Hyundai over economic cooperation and so grew reluctant to cooperate with the corporation as the day for a pilot sightseeing to Mt. Baekdu approached. Moreover, It was difficult for the North Korean authorities to ignore the fact that hundreds of thousands of people make a field trip to many revolutionary sites in the Mt. Backdu areas every year.

The Mt. Baekdu areas have many national treasures such as Mt. Baekdu Billet publicized as Kim Jong Il’s birthplace, the so-called “slogan tree” (referring to those cherished trees which are inscribed with anti-Japanese slogans and the eulogy for Kim Il Sung, and supposedly carved by Kim Il Sung’s soldiers during his anti-Japanese struggle), and many other historical sites and monuments. In fact, Mr. Baekdu is considered sacred and lies at the center of “Su-Ryeong Absolutism” (the idolization of the late Kim Il Sung). The North Korean authorities use the national treasures in Mt. Baekdu to mystify Kim Il Sung and Kim Jong Il.

The itinerary of North Korean people who make a field trip to Mt. Baekdu for two nights and three days is planned as follows. First, they arrive to Samjiyeon Pond by train, and visit Kim Jong Il’s birthplace and Samjiyeon Monument. Next day, they go to Lake Cheonji. On the last day, they pay a visit to the first slogan tree at Gunchang Billet and Begaebong Billet, and Yimyongsoo Waterfall. The problem is that the itinerary of North Korean field trippers is the same as that of South Korean tourists.

Therefore, it is not clear yet whether the North Korean authorities would really open the tourist route in the Mt. Baekdu areas for South Koreas as scheduled in May next year.

It seems that the North Korean authorities allowed the development of Mt. Baekdu because they now have the knowledge and skill to manage tourism business from years of experience of operating Geumkang Mountain tourism business. In addition, the North Korean authorities might have figured out that tourism business normally does not directly lead to reforms and open-door policies.

It is impossible for the North Korean authorities to relocate all residents in the Mt. Baekdu areas. Therefore, they will likely relocate those who have “bad family background” among the residents. (North Korea is highly stratified by class based on family background.) Moreover, the authorities will likely build a block wall designed to keep the residents from encountering South Korean tourists, and construct a new road for tourists.

However, if the itinerary of North Koreans overlaps with that of South Korean tourists, two groups will inevitably have an encounter with each other. Even if North Korean field trippers go on foot and South Koreans travel by bus, two groups will confront each other at tourist attractions such as Samjiyeon Pond, Samjiyeon Monument, Begaebong Peek, Gunchang, and Lake Cheonji.

The North Korean authorities may have North Koreans make a field trip to Mt. Baekdu between November and April during which Samjiyeon Airport has to be closed due to ice on the runaways, and therefore the sightseeing trip is unavailable.

In other words, Mt. Baekdu will be available for half a year for North Korean field trippers and for the rest half for South Korean tourists. However, that is not likely to be a solution since it is difficult to make a trip to Mt. Baekdu during winter due to bad weather conditions. Indeed, the authorities have been restricting the field trip to Mr. Baekdu during the winter period.

A defector from Yangkang Province said, “The authorities may build a new road for tourists or change the tourism schedule.” The defector added, “Once the tour begins, North Korean field trippers will take more interest in South Korean tourists than the legendary struggle for revolution by Kim Il Sung and Kim Jong Il.”

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Posted in Civil society, Foreign direct investment, Special Economic Zones (Established before 2013), Tourism | Comments Closed

North Korea opens up its mountain

Friday, November 9th, 2007

Asia Times
11/9/2007

[excerpt]
North Korea said this week it will allow a South Korean business group to start sightseeing tours of a scenic mountain on its border with China next year, as agreed at a recent inter-Korean summit of leaders.

Pyongyang’s contract with the Hyundai Group will enable South Koreans to visit the 2,744-meter-high Mt Paektu by direct flight. Currently, South Koreans can only visit the Chinese side of the mountain.

“Both sides agreed to start the tour of noted places on Mt Paektu from May of 2008,” the (North) Korean Central News Agency (KCNA)said of the contract signed between Hyundai Group chairwoman Hyun Jeong-eun and Choe Sung-chol, vice chairman of the Asia-Pacific Peace Committee, a North Korean state organization handling inter-Korean affairs.

Hyun, back from a five-day trip to North Korea, met reporters in Seoul and confirmed the contract. “Under the agreement, Hyundai Group will have exclusive rights to operate the tourism business to Mt Paektu for 50 years,” Hyun said, disclosing that she also met with the North’s top leader, Kim Jong-il, during her stay in the communist country.

The sightseeing tour of the tallest mountain on the Korean Peninsula expands Hyundai’s business with North Korea, which currently includes a cross-border tour of Mt Kumgang on the North’s east coast. More than 1 million South Koreans have visited the mountain since the tours started in 1998.

Most Koreans regard Mt Paektu as a holy area where their mythical leader, Tangun, descended from heaven and established a kingdom. North Korea claims that its current leader, Kim Jong-il, was also born there 65 years ago, an event heralded by the appearance of a double rainbow over the mountain and a new star in the heavens. (However, former Soviet Union records show he was born in Siberia, in 1941, where his father, Kim Il-sung, commanded the 1st Battalion of the Soviet 88th Brigade, made up of Chinese and Korean exiles.)

North Korea also claims that the mountain was a base for the independence movement against Japan’s colonial rule of Korea led by the communist nation’s founder, Kim Il-sung, in the early part of the 20th century.

Hyundai has been at the vanguard of business with North Korea since its founder, Chung Ju-yung, crossed the heavily armed demilitarized zone with truckloads of cattle in 1997. Hyundai’s business in North Korea also includes the Kaesong industrial complex, where about two dozen garment and other labor-intensive South Korean firms operate with the labor of more than 15,000 North Korean workers. The project started as a result of the first-ever inter-Korean summit in 2000.

Establishing tourism to Mt Paektu was a lifelong dream of Chung Ju-yung, who died in 2001. Chung handed over the group’s North Korean business arm to his fifth son, Mong-hun, who committed suicide in 2003 amid suspicions that the group was involved in the government’s secret transmittance of huge sums of money to Pyongyang in return for the 2000 summit. His wife, Hyun, immediately took charge of the business.

“My trip to the North was very productive,” Hyun said. “Details of the Mt Paektu business will be discussed at the working level.”

Speaking about her meeting with the North Korean leader, she said “I met him for the first time in two years. He asked about my daughter and we talked a lot about personal things.” Hyun said she is happy to realize her father-in-law’s dream.

In addition, the North’s Asia-Pacific Peace Committee decided to grant Hyundai Group the right to conduct tours of the Kaesong area. “Both sides agreed to start the tour of historic sites and scenic places in the Kaesong area from early December 2007,” the KCNA reported.

Meanwhile, the South Korean government, together with the Hyundai Group, plans to survey Mt Paektu this month to prepare for the start of tours next year, industry sources said. “The preliminary survey by government officials and Hyundai will thoroughly check Mt. Paektu,” said an official from Hyundai.

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Posted in Economic reform, Foreign direct investment, Special Economic Zones (Established before 2013), Tourism | Comments Closed

DPRK Workers’ party focuses on building economic powerhouse

Thursday, November 8th, 2007

Institute for Far Eastern Studies (IFES)
NK Brief No. 07-11-8-1
11/8/2007

According to the November 6th issue of the Chosun Shinbo, a newspaper published by the General Association of (North) Koreans in Japan, North Korea has taken an opportunity at the “National Meeting of Secretaries of Cells of the Workers” Party” (Pyongyang, October 26~27), the first held in the last 13 years, to shift the focus of the Workers’ Party to “building a great economic nation”. North Korea also specifically reported the policy goal of building the North into an economic powerhouse by issuing reports through each of its media outlets. In the October 23rd edition of the Workers’ Party newspaper, Rodong Shinmun, Party officials called for a “struggle to create a great economic nation.”

According to the Chosun Shinbo, “By tasking the highest organs of the Party with focusing on the realization of economic policy, we are effectuating a shift in operations to cope with a new era,” and, “at this conference, the construction of the Party’s great economic nation was organized, and the project and plans for increasing the role of Party cells were discussed.”

Party cells are the smallest units of the Workers’ Party, and these cell secretaries are responsible for the front line of Party policy implementation. The Workers’ Party Central Committee’s congratulatory address at the conference stressed the need for a “united march to construct a great economic nation and improve the lives of the people,” and stated that the Party understood that economic issues were at the heart of Party cell concerns.

In the conference report, it was stressed that it was Kim Jong Il’s firm determination and will that “through Military-First politics, not only are the country and military number one in our ideology, but that we make economics number one as well, in order to live well without feeling envious of others.” According to the newspaper, “As the political environment surrounding North Korea is changing, when this conference’s decision to stress the goal of building a great economic nation is carried out by the highest organs of the Party, it will be an important shift in all Party undertakings.”

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Posted in Economic reform, Worker's Party | Comments Closed

Trade between divided Koreas rises 23 percent in first 10 months

Wednesday, November 7th, 2007

Yonhap
11/7/2007

Bilateral trade between the two Koreas increased by 23 percent in the first 10 months of the year due mainly to an increase in shipments of goods produced at the South Korea-built industrial complex in the communist North, the Unification Ministry said Wednesday.

The two-way trade volume jumped to nearly US$1.44 billion in the January-October period, up from $1.16 billion from a year earlier, according to the ministry.

“The rise mainly comes from a 48 percent increase in the amount of goods shipped from Kaesong,” a ministry official said, adding trade in some other areas, such as minerals and fisheries, increased by nearly 50 percent year-on-year.

Exchanges in non-commercial areas, however, dropped by 18 percent, according to the ministry official.

Seoul hopes cross-border trade will continue to increase over the coming years as the sides are about to launch a second development plan to expand the Kaesong industrial complex, where about two dozen South Korean companies are currently employing some 10,000 North Korean workers.

The joint industrial complex is expected to house over 2,000 South Koreans businesses and employ as many as 500,000 North Koreans when it is fully developed by a target year of 2012.

President Roh Moo-hyun and North Korean leader Kim Jong-il have also agreed to develop the North’s western Haeju area as a special economic district in the second-ever inter-Korean summit held in the North Korean capital of Pyongyang early last month.

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Posted in Foreign aid statistics, International trade, Kaesong Industrial Complex (KIC), Trade Statistics | Comments Closed

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