Archive for the ‘International Governments’ Category

Singapore-North Korea trade deal

Tuesday, December 2nd, 2008

The Singaporean government is insuring investment in the DPRK…

Quoting from the article:

Singapore firms keen to expand into the largely untapped market of North Korea now have a foot in the door, thanks to two new agreements inked on Tuesday.

The Ministry of Trade and Industry (MTI) said that Singapore signed an Investment Guarantee Agreement (IGA) with the country on Tuesday.

Trade and Industry Minister Lim Hng Kiang and his North Korean counterpart, Mr Ri Ryong Nam, signed the IGA during the North Korean Foreign Trade Minister’s official visit to Singapore.

MTI said the IGA will help promote bilateral investment flows by protecting investors and their investments.

Under the agreement, investors will be accorded non-discriminatory treatment, compensation in the event of expropriation or nationalisation of their investments, and free transfer of capital and returns from investment – perennial ‘banana peels’ for businesses entering a less-developed and unexplored market.

Separately, the Singapore Business Federation (SBF) also signed a Memorandum of Understanding with the North Korean Chamber of Commerce.

According to the SBF, North Korea remains an unexplored market for many Singapore firms but there exists many opportunities for local businesses to tap into such as its high-quality yet affordable workforce and the abundance of natural resources.

Read the full article below:
S’pore, N.Korea ink trade deals
The Straights Times
Francis Chan
12/2/2008

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Kuwait funding DPRK water and sanitation projects

Wednesday, November 26th, 2008

UPDATE: According to the Pyongyang Times:

The Kuwait Fund for Arab Economic Development has decided to loan on the updating of sewage treatment facilities in Pyongyang.

The ceremony for signing a loan-giving agreement took place on November 19 at the People’s Palace of Culture, which was attended by a delegation from the Ministry of City Management led by Deputy Minister Ri Kang Hui and a delegation from the Kuwait Fund for Arab Economic Development headed by Deputy General Director Hesham Ebraheem Alwaqayan.

The fund will provide long-term low-interest loan for the technological renovation of sewage facilities in Pyongyang.

The loan will be spent on upgrading dozens of pumping stations.

The agreement was inked by Ri Kang Hui and Hesham Ebraheem Alwaqayan.

The Kuwait fund had loaned on the Pyongyang drinking water service reconstruction in 2003.

The DPRK ministry spent the loan on upgrading water purification plants, increasing water production capacity, updating and expanding drinking water service networks and establishing information system on drinking water service and completed the project in February last year.

ORIGINAL POST (2008-11-26): Although the DPRK is doing its best to chase away South Korean investment, the Kuwaiti government is providing Pyongyang with a USD$21.7 million loan to construct water and sanitation facilities.

The Kuwait Fund for Economic Development (KFAED) stated here on Sunday that it will sign a loan agreement with North Korea in a few days which is valued at KD 6.2 million (USD 21.7 million) to help in financiaing a sanitation system project.

In a statement to the media FKAED added the suggested project contributes in improving a the environment and public health by raising the performance of city sewage systems.

With this second loan, KFAED financing to North Korea is to come to KD 12.4 million (USD 43.4 million), going into development projects in water and sanitation sectors.  This is in addition to technical assistance of KD 153.5 thousand (USD 537,000).

I am unsure what exactly Kuwait’s play is here.  Altruism is well and good, but an unconvincing motive for such a hefty sum of money.  The only other narrative that I can imagine is awfully cynical:  If these sanitation projects are constructed by Kuwaiti contractors and engineers using Kuwaiti parts and supplies, then international development officials should be aware that the DPRK offers many opportunities to channel development funds into the coffers of supporters back home—you just have to make sure Pyongyang gets its cut.

Does anyone else have a theory?

Read the full story here:
Kuwait News Agency
11/16/2008

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Pyongyang University of Science and Technology (PUST) update

Sunday, November 23rd, 2008

The Pyongyang University of Science and Technology  (PUST) has launched a new web site (click here) featuring pictures of the campus nearing completion in Southern Pyongyang.  The university’s opening, however, is behind schedule—now planned for spring of 2009. 

According to an email from Norma H. Nichols, Director, International Academic Affairs Office, Yanbian University of Science & Technology, sent to the CanKor list:

I have been rather deeply involved in preparing for the new university [PUST] since its beginning stages. We did not open in May and we still cannot announce an opening this fall. We really do think it will happen, although we still do not have the desperately needed EAR from the US Commerce Dept. that would allow us to take in the equipment we think we need. –CanKor report #312

Click here to see the PUST campus (under construction) in Google Maps

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DPRK culture update: sports and film

Monday, November 17th, 2008

In football, North Korea won the under-17 women’s football World Cup yesterday with a come-from-behind 2-1 win over the United States in Auckland, New Zealand.

According to a New Zealand sports web site:

The Koreans fell behind after two minutes to a freak own goal from a throw-in, but drew level through Kim Un Hyang with 13 minutes of regular time remaining.

Jang Hyon-Sun netted the winner in the second period of extra time, seven minutes away from a penalty shoot-out.

North Korea now boast both age-group women’s World Cup titles, having taken the under-20 version in Russia two years ago.

In film, the Daily NK reports that the popularity of South Korean films is giving way to American, Thai, and Chinese films:

In North Korea, the fervor of the South Korean Waves is on the wane; Korean dramas, which have spearheaded the spread of South Korean culture and progress since 2000, are no longer generating huge interest among North Korean citizens. The prevailing response of the citizens has been “I have seen enough” and “I have had my fill.”

A source form North Hamkyung Province said in a phone conversation with the Daily NK on the 2nd, “Nowadays, a Thai movie, “Ong-Bak (2003), Muay Thai Warrior,” is immensely popular among the younger generation. Chinese or American movies have become more popular than South Korean movies.”

The source added, “When South Korean dramas were first popular, adoration, curiosity, new storylines and exotic scenes generated a wave of interest, but people seemed to have had their fill.”

“Previously, Chinese people would bring back South Korean films when (North Korean) people requested DVDs, but now, and they mostly bring American or Chinese martial arts movies. According to smugglers working along the border, South Korean DVDs cannot be found in the homes of the Chinese.”

He evaluated thus, “More than anything, we like clarity and accuracy, but South Korean movies tend to be ambiguous. It frustrates me that they take and twist around words when the reality of the situation is clear.”

Gwon Myung Chul (pseudonym), who visited his relatives in China at the end of October, noted, “In Pyongyang, people can mostly acquire South Korean songs. With the rising popularity of South Korean songs, CDs containing these songs have come out, but they did not generate much interest.”

Gwon explained, “Recent Korean songs have not resonated with us emotionally and they have been difficult to understand. I don’t know what the people there (in the South) think, but rap or Pansori (traditional Korean narrative songs) are really difficult to listen to.”

He observed that “South Korean songs were better in the past” and listed off the Korean songs which he could sing, such as Noh Sa Yeon’s ‘Meeting’ and Kim Jong Hwan’s ‘For Love.’

Read the full article here:
South Korean Movies Not Popular Anymore in North Korea
Daily NK
Lee Sung Jin
11/4/2008

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Of troops and tourism

Thursday, November 13th, 2008

Troops: the Financial Times reports that the PRC (China) is increasing the number troops along its border with North Korea:

The Chinese military has boosted troop numbers along the border with North Korea since September amid mounting concerns about the health of Kim Jong-il, the North Korean leader, according to US officials.

Beijing has declined to discuss contingency plans with Washington, but the US officials said the Peoples’ Liberation Army has stationed more soldiers on the border to prepare for any possible influx of refugees due to instability, or regime change, in North Korea.

One official cautioned that the increase in Chinese troops was not “dramatic”, but he said China was also constructing more fences and installations at key border outposts. Wang Baodong, the Chinese embassy spokesman in Washington, said he was unaware of any increased deployments.

Tourism: Reuters reports that the DPRK has closed Sinuiju to entering Chinese tourists:

North Korea is restricting visitors from its ally and giant neighbour China, travel agents said on Thursday, including virtually closing off one of its main border crossings at Dandong.

Travel agents in China, who send a steady though small flow of tourists to impoverished and isolated North Korea, said they were still organising visits, though trips had to be made via air rather than by rail.

“The border has been closed since October. If you want to go to North Korea, you have to go to Shenyang and fly from there to North Korea,” said one travel agent in Dandong, referring to a northeastern Chinese city.

A Chinese rail official in Dandong said freight trains were still able to cross over into North Korea.

“There are four trains a week to North Korea. One train just left for there, though I don’t know if there are any passengers on it. I think most of the trains are freight trains,” the official said by telephone.

China’s relations with North Korea have long been characterised as being “as close as lips and teeth” after they fought side-by-side during the 1950-53 Korean War.

Read the full articles here:
China increases troops on North Korea border
Financial Times 
Demetri Sevastopulo and and Song Jung-a

North Korea restricts travel for Chinese visitors
Reuters
Ben Blanchard
11/13/2008

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South Korean priest to operate mission out of Pongyang hemp factory

Sunday, November 9th, 2008

Sometimes the headlines write themselves.

According to the Union of Catholic Asian News (excerpt):

For the first time in almost 60 years, a Catholic priest will stay in North Korea, and look after the welfare of local workers.

Franciscan Father Paul Kim Kwon-soon says he will stay in Pyongyang, probably beginning in late November, and serve as a “social worker” for factory workers in the first joint North-South business venture.

Returning to South Korea from a visit, Father Kim told UCA News on Nov. 4 that North Korea is allowing him to run a newly built welfare center in Pyongyang that houses a soup kitchen, a free clinic and a public bath, even though “they know I am a Catholic priest.” As a visitor, he will have to renew his visa every two months.

According to Father Kim, the three-story welfare center he will manage is within the factory premises and will provide the workers with services such as medical checkups, meals and haircuts. It will have the capacity to offer free meals to up to 1,500 workers a day.

“I can say that the center will be a turning point in the humanitarian aid to the North,” the priest noted. “We only could send aid materials” in the past, he pointed out, whereas he can now bring aid materials to the North and provide direct service.

Saebyol General agreed last February to establish the center after three years of “great efforts” on the part of his Order of Friars Minor, Father Kim explained.

During the four-day visit to the North, Bishop Lazzaro You Heung-sik of Daejeon presided at the opening ceremony of the center on Oct. 30, the priest reported.

On Nov. 1 Bishop You, former president of Caritas Corea, the Korean bishops’ social service organization, celebrated a Mass at Changchung Church, the only Catholic church in North Korea, to thank God for opening the center. About 50 South Korean Catholics including eight priests and four Religious took part. No North Korean Catholics attended.

Father Michael Lee Chang-jun, secretary of Caritas Corea, accompanied Bishop You. He told UCA News on Nov. 5 that he wished “the center could provide its service not only for the workers, but other North Korean people in the neighborhood.”

Cecilia Lee Seung-jung, North Korea program manager for Caritas Internationalis, the worldwide confederation of Caritas organizations, earlier called the agreement on the center a significant development. She pointed out that inter-Korean exchanges have been limited since the current government in Seoul assumed office last February.

Records of South Korea’s Unification Ministry show aid to North Korea from the South Korean government and civil groups amounting to US$63.6 million from January to September 2008, while in 2007 it totaled US$304.6 million.

According to Church sources, North Korea maintains that 3,000 Catholics in North Korea practice their faith at “home worship places” across the country, with no residing priest or nun. Between 1949 and 1950 all priests and nuns who remained in the North were executed or disappeared.

It is very interesting that the mission will be operated out of a South/North joint venture company rather than North Korea’s Changchung Cathedral in eastern Pyongyang.  There are countless reasons why concerned parties believe this to be a superior arrangement.

To learn more about Pyongyang’s new hemp factory, click here.

To read the full story mentioned ablove, click below:
Catholic Priest To Work In North For Social Welfare
Union of Catholic Asian News
11/6/2008

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What is the DPRK’s strategy for international economic integration?

Tuesday, November 4th, 2008

Although removal from the US list of state sponsors of terror carries little economic significance for the DPRK, its government has made this one of its top policy priorities.  Now that this has been accomplished, we must ask what the DPRK’s next move is in terms of international economic integration.  Will they push for removal of more economically-significant legal barriers which isolate them, to a large degree, from global markets (indicating reform is an important policy goal), or will we continue to see mixed signals and muddle-through policies (indicating a desire to maintain the status quo)? 

We cannot answer this question without knowing the DPRK’s overall strategy.  Today, however, a North Korean academic quoted in the Japanese media acknowledges that de-listing changes little economically, and signals that we should not expect to see much change in the DPRK’s economic environment:

Ri Gi Song, professor at North Korea’s Academy of Social Sciences, told Kyodo News in an interview that other international sanctions are still in place and “there should be no illusions” about the country’s trade environment.

“The delisting from the terror list is expected to have a certain level of beneficial impact, but this does not mean that all (international) economic restrictions have been taken away,” he said.

Ri also said Japan’s sanctions against North Korea have not had a major impact on the country’s economy but are hurting Korean residents of Japan who do business with North Korea.

“There is little impact from these restrictions on the economic development of the country, but I think there is an impact on businessmen of Chongryon,” he said, referring to the pro-Pyongyang General Association of Korean Residents in Japan.

“The Korean residents of Japan cannot come and go as they please,” Ri said.

Japan’s sanctions include a ban on port calls by North Korean vessels including a cargo-passenger ferry that provided a major means of transportation for Koreans in Japan traveling to North Korea. The sanctions also ban imports from North Korea and exports of luxury goods to the country.

The sanctions were first imposed in 2006 in the wake of an impasse in the issue of past abductions of Japanese nationals by North Korea. The sanctions are subject to review every six months and were extended in October for the fourth time.

Ri said he does not think North Korea’s centrally planned economy will be affected by the current global financial turmoil that began with the U.S. subprime mortgage meltdown.

“I don’t think it will have a direct impact on our economy, as our economy is not part of the capitalist market mechanism,” he said. (Kyodo – link requires subscription)

As an aside, Mr. [Dr.?] Ri might be surprised to learn just how exposed his country is to the “capitalist market mechanism”.

(Hat tip to Oliver for the article)

The full article can be read here:
N Korea Trade To Gain From U.S. Terror Delisting: N Korea Expert
Kyodo (subscription required)
11/4/2008

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Famine in North Korea Redux?

Monday, November 3rd, 2008

Peterson Institute Working Paper
WP 08 – October 2008
Stephan Haggard and Marcus Noland

Read the paper here

Abstract: In the 1990s, 600,000 to 1 million North Koreans, or about 3 to 5 percent of the precrisis population, perished in one of the worst famines of the 20th century. North Korea is once again poised on the brink of famine. Although the renewed provision of aid is likely to avert a disaster on the scale of the 1990s, hunger-related deaths are already occurring and a dynamic has been set in motion that will carry the crisis into 2009. North Korea is a complex humanitarian emergency characterized by highly imperfect information. This paper triangulates quantity and price evidence with direct observation to assess food insecurity in North Korea and its causes. We critique the widely cited UN figures and present original data on grain quantities and prices. These data demonstrate that for the first time since the 1990s famine, the aggregate grain balance has gone into deficit. Prices have also risen steeply. The reemergence of pathologies from the famine era is documented through direct observation. Although exogenous shocks have played a role, foreign and domestic policy choices have been key.

Keywords: Famine, North Korea
JEL codes: Q1, O1, P2

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Pyongyang Hemp Textiles Co.

Thursday, October 30th, 2008

UPDATE: A Catholic Priest will be operating a mission out of the factory.  Read more about this here. 

ORIGINAL POST: Yes, you read the title correctly.  Billed by Yonhap as the first inter-Korean joint venture in Pyongyang:

Pyongyang Hemp Textiles is a cooperative effort between the South’s Andong Hemp Textiles and the North’s Saebyol General Trading Co., with a total investment of US$30 million shared equally by the two sides, according to the officials.

Around 1,000 North Koreans will be working for the textiles and logistics firm, which is built on 47,000 square meters of land in Pyongyang, they said.

…The opening ceremony for the joint venture was delayed for close to two months due to deteriorating inter-Korean relations, which worsened after a South Korean woman was shot to death while traveling the communist country in early July. Pyongyang refused to apologize for the shooting, and denied requests from Seoul to cooperate in a fact-finding mission into the death.

If anyone has any idea where this company is located on Google Earth, please let me know. 

According to Wikipedia, which is not an authoritative source:

Industrial Hemp is produced in many countries around the world. Major producers include Canada, France, and China. The United States is the only industrialized nation to continue to ban industrial hemp. While the Hemp is imported to the United States more than to any other country, the United States Government does not distinguish between marijuana and non-psychoactive Cannabis used for industrial and commercial purposes.

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South Korea eases DPRK investment regulation

Thursday, October 30th, 2008

The South Korean government seems to have made some significant changes to the way business is to be conducted between themselves and the North.  It seems regulations have been eased on South Korean companies seeking permission to operate in the North—and some new subsidies have been put on the table.

From the Korea Times:

The government Tuesday abolished a system under which companies here must receive a permit to do business in North Korea.

As a result, companies which have been seeking to operate in the reclusive state would see simplified procedures when they start inter-Korean projects.

The Cabinet approved revisions of the law governing trade and cooperation between South and North Korea.

Under the previous licensing system, a permit for both companies and projects were necessary.

But now, companies have to get approval for their projects only and inter-Korean cooperation programs designated by a presidential decree can proceed without the approval.

If firms get the license in a dishonest way, the government can cancel it.

In a bid to diversify trade between the two Koreas, the revision allows services and intangible things as well as goods to be exchanged.

The government also approved a revision bill to encourage foreign investors to invest in inter-Korean trade.

It says that foreigners who invest $10 million or more can get some incentives such as cash grants.

The legislation on South-North cooperation was introduced in 1990 to support exchanges and cooperation between the two Koreas.

The Ministry of Unification has a committee under itself to coordinate related policies and make a decision on important inter-Korean cooperation issues.

To promote economic, cultural and social exchange projects, a permit from the minister has been required.

If caught violating the law, the person will be sentenced to up to three years imprisonment or fined up to 10 million won ($6,770).

Read the full article here:
Inter-Korean Business Procedures Simplified
Korea Times
Kim Sue-young
10/28/2008

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