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DPRK replaced Minister of Commerce

Monday, April 7th, 2014

According to Yonhap:

North Korea has replaced its commerce minister last month, according to state-run media report Saturday, amid efforts to phase out supporters of Jang Song-thaek, the executed uncle of the current leader.

North Korea’s radio broadcaster Pyongyang Broadcasting Station reported that new Commerce Minister Kim Kyong-nam was in attendance at a food festival marking the birth anniversary of the country’s founder.

It was the first time that Kim Kyong-nam was introduced as commerce minister by North Korean media, but it appears likely the replacement took last month during the nationwide election.

Kim’s predecessor Ri Song-ho, who took office in 2012, failed to be re-elected to the Supreme People’s Assembly in the parliamentary election on March 9.

The food event was held from Wednesday through Friday in commemoration of the April 15 birth anniversary of Kim Il-sung, the current leader’s grandfather.

Experts say the replacement of the minister post is likely a follow-up measure to last December’s execution of Jang, the once powerful uncle of Kim Jong-un.

The March election was seen by some as a way for young leader Kim Jong-un to fill up the Assembly with people close to him and consolidate his power in the reclusive country.

As of this posting, the new minister has not been announced on KCNA.

Read the full story here:
N. Korea ousts commerce minister
Yonhap
2014-4-5

Posted in Ministry of Commerce | Comments Closed

Sinuiju-Kaesong high-speed rail project (UPDATED)

Monday, April 7th, 2014

Pictured Above (KBS): A map of the planned high-speed rail project

UPDATE 4 (2014-4-29): The Choson Ilbo reports that Ms. Choi has returned from the DPRK:

The Organisation for Co-Operation between Railways (OSJD) has decided to hold two major meetings, the Commission on Freight Traffic in 2015 and Conference of General Directors in 2019, in Seoul.

KORAIL president Choi Yeon-hye made the announcement at Gimpo Airport on Monday after returning from an OSJD meeting in Pyongyang. It is unprecedented for an associate rather than full member to host the conference.

The OSJD is an organization of 27 former and current communist countries, including Russia, China and North Korea.

“We don’t know yet whether the North will attend the meetings in 2015 and 2019, but the participants unanimously decided to hold them here, and the North didn’t oppose it, so we expect them to come,” she added.

The annual conference of general directors alternatively takes place in Asia and Europe, but exceptionally the 2019 meeting will also be held in Asia following the 2018 meeting in Vietnam.

The government here is keen to work with the railway body to link South Korea to Eurasia via North Korea.

Here is coverage in Yonhap.

UPDATE 3 (2014-4-22): The Choson Ilbo reports that the head of Korail has left for the DPRK:

KORAIL president Choi Yeon-hye is appropriately on her way to North Korea by train.

Choi left for Pyongyang on a train from Beijing on Monday afternoon to attend a meeting of the Organisation for Co-Operation between Railways (OSJD), KORAIL said Monday.

The OSJD is an organization of 27 former and current communist countries, including Russia, China and North Korea.

The government approved Choi’s request to visit to the North on Sunday after the North sent her a letter of invitation. She got a visa from the North Korean Embassy in Beijing the same day.

The train runs from Beijing to the North Korean border city of Sinuiju in 24 hours, where she switches trains for the 225 km stretch to Pyongyang.

A KORAIL executive said, “Choi’s visit is the North’s first approval of a South Korean official’s visit” since the South imposed sanctions against North Korea in 2010.

She is the first senior South Korean figure to visit Pyongyang since the inter-Korean summit in 2007.

President Park Geun-hye is keen to connect South Korea to Eurasia by railway, which requires cooperation from the OSJD.

Here is coverage in Yonhap.

UPDATE 2 (2014-4-7): KBS has a report (in Korean) on the project. See the report here. Seoul Village has translated some of the details.

Construction would last 6 years, with two waves that have not been fully detailed yet:
1st stretches: 80 km
From the North: Sinujiu Station – Tongrim Station (Sinujiu-Dongnim, 40 km)
From the South: Kaesong – Yonan (Gaesong-Yeonan, 40 km)
2nd stretches: 296 km

From the North: Tongrim – Chongju – Sinanju – Pyongyang (Dongnim-Jeongju-Sinanju-Pyongyang, 147 km)
From the South: Yonan – Haeju – Sariwon – Pyongyang (Yeonan-Haeju-Sariwon-Pyongyang, 149 km)

UPDATE 1 (2014-4-7): Korail may be involved in the high-speed rail project. According to the Hankyoreh:

News of a recent agreement between North Korea and China to build an international high-speed railroad and highway between Sinuiju (a city on the Chinese border) and Kaesong is raising questions about the fate of a scheduled North Korea visit on Apr. 24 by Korail CEO Choi Yeon-hye.

If Korail does participate in the project, it would bring South Korea one step closer to the Asian continent via the North Korea-China high-speed rail project, which comes on the heels on North Korea‘s Rajin-Hasan development project with Russia.

South Korean businesspeople in China who are closely involved in the high-speed rail project said on Apr. 6 that a contract for the railway/highway construction was signed in Beijing on Feb. 24 by North Korea’s State Economic Development Commission, chaired by Kim Ki-sok, and a Chinese consortium headed by the Shangdi Guanqun investment company. The line would be 376 km in length and connect Sinuiju with Chongju, Sukchon, Pyongyang, Haeju, and Kaesong, with the five-year construction beginning in 2018 with a budget of US$21 billion, or around 22 trillion won. The method would be a Build-Operate-Transfer (BOT) arrangement, with an international North Korean-Chinese consortium providing the investment and delivering the line to North Korea once the costs are recouped. A survey team for the Chinese consortium is reportedly scheduled to visit North Korea in late April.

The chances of South Korea participating are higher in the wake of President Park Geun-hye’s speech in Dresden on Mar. 31. There, she declared that an “organic linkage between South Korean capital and technology and North Korean resources and labor could contribute to building a future economic community on the Korean Peninsula.”

She also said she planned to “achieve shared development for the Korean Peninsula and Northeast Asia both through collaborations with North Korea and Russia, as with the current Rajin-Hasan distribution project, and collaborations with North Korea and China focusing on Sinuiju.”

Further increasing the possibility of South Korean participation are guidelines handed down in January by North Korean leader Kim Jong-un, who said North Korea should work with China and South Korea on an international line through a privately funded BOT arrangement.

Meanwhile, Korail is awaiting Ministry of Unification approval on a request to allow CEO Choi Yeon-hye to travel to North Korea to attend a general directors’ conference for the Organisation for Co-Operation between Railways (OSJD), which is scheduled to take place on Apr. 24.

“Our basic position is to approve visits to North Korea in cases of international events,” said an official from the ministry on condition of anonymity, adding that a final decision would be made “after discussions with the other agencies.”

But Korail remains cautious about the possibility of future cooperation, whatever the outcome for Choi’s visit ends up being. Speaking on condition of anonymity, a source there said, “We’re preparing data on things like a plan to expand cargo transport for different continental rail zones, which is one of the topics on the agenda at the OSJD meeting.”

“We’ve never officially examined the North Korea-China high-speed rail project, and it doesn’t look like it would be economically feasible anyway unless a section is opened between Seoul and Kaesong,” the source added. “Anyway, the government has not decided on participating, and that‘s not a matter that KORAIL can weigh in on by itself.”

ORIGINAL POST (2013-12-20): High Speed Rail and Road Connecting Kaesong-Pyongyang-Sinuiju to be Built
Institute for Far Eastern Studies (IFES)
2013-12-20

On December 8, 2013, North Korea reached an agreement with a consortium of international companies to construct highways and high-speed railroad connecting Kaesong, Pyongyang, and Sinuiju.

The agreement between North Korean authorities and a consortium representing the Chinese companies was signed in both Chinese and Korean by Kim Chol Jin, Vice-Chairman of State Economic Commission of North Korea and representatives from state-owned enterprises of China’s Commerce Department.

The construction period was designated as five years and businesses will operate the rail for 30 years and return the operation rights to North Korean government in the form of a BOT (build-operate-transfer) project, worth a total of 15 trillion KRW. The high-speed rail will be a double-track system with a speed of more than 200km per hour, and the construction of four-lane highway will be built adjacent to the railway. Fence will also be built to prevent unauthorized access to the railway.

The construction zone will cover the areas of Kaesong, Haeju, Sariwon, Pyongyang, Sinanju, Jongju and Sinuiju, approximately 400 km in total length and from Sinuiju will connect to Chinese cities via railway while from Jongju will connect with the Rajin-Sonbong SEZ (special economic zone) to the Russian Khasan railway to be linked with the Eurasian railway.

The consortium working group is planning to visit North Korea to confirm the specific construction plans. It was tentatively decided that the formal contract be signed in Pyongyang based on the proposal submitted by the consortium.

The subject of agreement is a multinational consortium of international investment group, which also includes a South Korean company, which is known as a company involved in North Korean mineral resources development. Once the project is in progress, there are plans of bringing other South Korean companies into the project.

In exchange, businesses will obtain the development rights of extracting gold from Hyesan City (Ryanggang Province) and iron ore in Musan (North Hamgyong Province). North Korean officials are claiming that this project was the legacy of Kim Jong Il and welcomed the participation of South Korean companies.

In March 2011, former North Korean leader Kim Jong Il is reported to have instructed that inter-Korean exchange programs be continued. Upon the completion of the railways and highways, the Presidium of the Supreme People’s Assembly will proclaim international road operations to ensure its stable operation.

The operation rights will be given to the consortium for 30 years while the ownership rights will be shared by the North Korean government and the consortium.

China is also building new railway lines up towards the North Korean border.

Posted in China, Economic reform, Foreign direct investment, Railways, State Economic Development Commission (SEDC), Transportation | Comments Closed

North Korea’s new space agency: NADA!

Monday, March 31st, 2014

For real.

NADA-2014-04-01-04-01

This is the second best name for a space agency after “NOVA”.

Joshua Pollack’s response: “NADA to Envy”.

Chris Green’s response: “Not A Defense Agency. Not Actually a Defense Agency. Nothing About Defense at All. Etc.”

Russia and DPRK discuss economic opportunities

Saturday, March 29th, 2014

What are the opportunities? Rason port, Iron Silk Road (Rail), Kaesong Industrial Complex, gas pipeline.

According to RIA Novosti:

Russia and North Korea have signed a new protocol to transition to using the ruble for payments between the two countries as part of an effort to boost annual bilateral trade to $1 billion by 2020, Russia’s Far East Development Ministry said Friday.

The announcement came as Russian officials have expressed a desire to explore new markets for the country’s businesses, following the introduction of sanctions by the West in reaction to Moscow’s stance over Crimea. Russian leaders have simultaneously reassured international investors the country remains open for business, and there are no plans to restrict international commerce.

The protocol announced Friday came following a visit of a Russian delegation to the Asian country for a meeting of a standing bilateral commission, timed to mark the 65th anniversary of a cooperation agreement between the Soviet Union and North Korea.

The parties agreed to move towards settling payments in rubles as well as adopting further measures to boost bilateral trade, including easing visa procedures and providing for Russian access to proposed special economic zones in the country, the ministry’s statement said.

The ministry reaffirmed the countries’ mutual interest in joint projects with South Korea, including international connections for railways [Iron Silk Road], gas pipelines and power lines.

The Russian delegation also proposed the entry of Russian businesses into the Kaesong Industrial Park, a special economic zone in North Korea just north of Seoul where South Korean companies are allowed to employ northern workers.

The two sides identified areas for further cooperation, including a transshipment complex at the port of Rason and technical cooperation for the modernization of North Korea’s mining sector, automobile industry and electric power plants.

According to the statement, during the talks Russian Far East Development Minister Alexander Galushka emphasized that achieving such goals would only be possible if stability is maintained on the Korean peninsula.

The next meeting of the bilateral commission is scheduled for June in Russia’s far eastern Vladivostok.

Here is what Yonhap reports:

North Korea and Russia have agreed to boost economic ties by pushing for trilateral projects involving South Korea, including a plan to support Russian companies’ entry into an inter-Korean industrial complex, a media report said Saturday.

The agreement between the two was made earlier this week when Russia’s Far East Development Minister Alexander Galushka visited the North for a five-day run until Friday to explore ways to boost bilateral economic cooperation, according to the Russian news agency RIA Novosti.

“The Russian delegation proposed the entry of Russian businesses into the Kaesong Industrial Park, a special economic zone in North Korea just north of Seoul where South Korean companies are allowed to employ northern workers,” the RIA Novosti reported, citing the ministry.

…

Officials of Seoul’s unification ministry, which handles inter-Korean affairs, welcomed the agreement between the North and Russia, while stressing the importance of Russia’s prior consultation with the South.

“Russian companies’ making inroads into the Kaesong park is desirable in terms of the internationalization of the complex … It would also prevent the North from unilaterally reversing its agreement with Seoul over the Kaeesong operation,” the ministry official said, requesting anonymity.

Internationalization of the enclave, a symbol of inter-Korean detente, is one of the key topics for inter-Korean meetings aimed at ensuring its normal operations and further invigorating the complex. The Kaesong park resumed operations in September, more than five months after the North unilaterally closed it in anger over Seoul-Washington joint military exercises.

“But it is crucial for Russia to discuss the matter with our side first as it is basically operated by the South Korean authorities,” he added.

A handful of companies from China, Australia and Germany have so far expressed interests in making an investment in the Kaesong complex, prompting the Seoul government to review holding joint presentation sessions with the North to lure investors from overseas, according to another ministry official.

Here is additional information from Yonhap on recent shipments from Russia to the DPRK:

Russia exported US$21.16 million’s worth of jib cranes, machinery used mostly for cargo handling at ports, to North Korea last year, accounting for nearly 22 percent of its total exports to the North, according to the report by the Korea Trade-Investment Promotion Agency (KOTRA). The amount surpasses that of Russia’s traditional export goods such as coal, petroleum and bituminous oil.

There were no records of the machines being exported to North Korea the year before, with the 2011 amount standing at $139,000.

North Korea and Russia maintain economic relations that include a project that would make North Korea’s northeastern port city of Rajin a logistics hub by connecting it to Russia’s Trans-Siberian Railway. North Korea is said to have agreed to a long-term lease of the No. 3 dock at Rajin port to Russia and that it is modernizing facilities there. The cranes may be for such modernization efforts, the KOTRA report said.

Also noteworthy is Russia’s exports of ambulances to the North, amounting to approximately 10.1 billion won ($9.45 million), the fourth largest in terms of value. Ambulances are a relatively new product on the trade list.

KCNA’s reporting of the meeting was much more muted:

DPRK Premier Meets Minister of Development of Far East of Russia

Pyongyang, March 26 (KCNA) — Pak Pong Ju, premier of the DPRK Cabinet, met Alexandr Galushka, minister of the Development of Far East of Russia who is chairman of the Russian side to the Inter-governmental Committee for Cooperation in Trade, Economy, Science and Technology between the DPRK and Russia, and his party.

He had a friendly talk with them who paid a courtesy call on him at the Mansudae Assembly Hall on Wednesday.

Minutes of Talks between Governments of DPRK, Russia Signed

Pyongyang, March 26 (KCNA) — Minutes of talks on cooperation in trade, economy, science and technology between the governments of the DPRK and Russia were signed here Wednesday.

Present at the signing ceremony were Ri Ryong Nam, minister of Foreign Trade who is chairman of the DPRK side to the Inter-governmental Committee for Cooperation in Trade, Economy, Science and Technology between the DPRK and Russia, and officials concerned, Alexandr Galushka, minister for the Development of Far East who is chairman of the Russian side to the Inter-governmental Committee, and his party and Alexandr Timonin, Russian ambassador to the DPRK.

Ri Ryong Nam and Alexandr Galushka signed the minutes of the talks.

Read the full story here:
Russia, North Korea Agree to Settle Payments in Rubles in Trade Pact
RIA Novosti
2014-3-28

N. Korea, Russia to discuss supporting Moscow firms’ advance into Kaesong park
Yonhap
2014-3-29

Posted in Banking, Economic reform, Finance, Fiscal & monetary policy, Foreign direct investment, Health care, Kaesong Industrial Complex (KIC), Ministry of Foreign Trade, Railways, Rason Economic and Trade Zone (Rajin-Sonbong), RoK Ministry of Unification, Russia, Sea shipping, South Korea, Statistics, Trade Statistics, Transportation | Comments Closed

Choe Hyon Chol on Rason development

Wednesday, March 26th, 2014

According to Naenara, Choe Hyon Chol is the section chief of the State Economic Development Commission (SEDC). He has previously been identified as a director of the Korean Association of Economic Development. In a recent interview with Naenara, he discusses the benefits of investing in the Rason Economic and Trade Zone.

Before getting to the interview, however, it is worth noting that the Rason Economic and Trade Zone was set up before the creation of the State Economic Development Commission and it was “controlled” by Jang Song-thaek. Since Jang’s purge, it appears that Rason (and probably Hwanggumphyong) have been moved to the SEDC’s portfolio–that is, under the control of the cabinet.

Here is the interview:

Reporter: Would you please give me a briefing on the Rason Economic and Trade Zone that is now under development.

Choe: As you know, northeast Asia becomes one of the global development regions with a great potentiality, for the countries in this region have comparative advantages in respect of availability of production factors such as economic conditions, natural resources and economic and trade relations.

The Rason Economic and Trade Zone, situated on the western shore of the lower Tuman River in the northeastern part of Korea, borders on China and Russia, and Japan with the sea on the east. Its geographical location offers immense economic and traffic advantages as a transportation hub as well as a bridgehead of the continent.

Occupying an area of 470 km2, it has Rajin Port with an annual handling capacity of 3 million tons of cargoes, Sonbong Port with a handling capacity of 2 million tons of oil and Ungsang Port with a handling capacity of 600 000 m3 of timbre. The sea off the ports is deep and not frozen even in winter.

Rajin Port, in particular, has favourable conditions for creating cargo handling capacity of over 100 million tons without building a breakwater thanks to the Taecho and Socho islands in front of it.

The zone has also advantageous traffic connections with neighbouring countries.

Rajin-Wonjong class-B road (51 km), Rajin Port-Tumen railway (158 km) and Rajin Port-Khasan railway (51 km) are under construction or nearing completion.

The Rason Economic and Trade Zone is endowed with abundant tourist resources such as beautiful seascape, lake and bathing resorts, and 20-odd islands including Pipha, Taecho, Socho and Al islands.

In view of these favourable geopolitical and economic conditions, the DPRK government declared Rason city as an economic and trade zone on December 28, 1991 and held an international investment seminar with participation of entrepreneurs from 27 countries under the sponsorship of the UNDP and UNIDO in September 1996. It also raised Rason city to the status of special city on January 4, 2010 and agreed with China on the issue of joint development and management of Rason Economic and Trade Zone and Hwanggumphyong-Wihwado Economic Zone in May 2010.

In November 2010 the DPRK and the Chinese governments signed the Agreement on Joint Development and Management of Rason Economic and Trade Zone and Hwanggumphyong-Wihwado Economic Zone and organized the DPRK-China Joint Guidance Committee. The second session of the committee was held in June 2011 in Yanji, Jilin Province, China and its third session in August 2012 in Beijing. Besides, both governments concluded the agreement on establishment and operation of management committee for Rason Economic and Trade Zone, the master plan for DPRK-China joint development of the zone, the framework agreements on investment in ports, industrial districts and power transmission within the zone and investment and cooperation for construction of a new border bridge between Wonjong and Quanhe, the agreements on investment and cooperation for a high-efficiency agricultural model district and investment and cooperation for building-materials industry and the master plans for Sonbong-Paekhak industrial district and Rajin port industrial district.

The development of the zone in which a hundred and scores of businesses from different countries of the world are now active is in its initial stage but the number of potential investors with exceptional interests in the zone is increasing as days go by.

Reporter: How is the present state and prospect of the zone?

Choe: I shall begin with the progress of city construction.

The city is divided into residential quarters, industrial district and traffic junction district. The residential quarters consist of economic and trade area and peripheral area; the economic and trade area is subdivided into Rajin, Sonbong, Ungsang, Kulpho-Uam and Chonghak areas and the peripheral area into Tumangang, Hongui, Wonjong and Huchang areas. The industrial area embraces Changphyong, Yokjon, Chonggye, Sinhung, Tongmyong, Namsan and Andong areas.

The traffic junction district includes Rajin, Sonbong and Ungsang ports, Rajin, Ungra and Sonbong railway stations and Chongjin-Wonjong and Chongjin-Tuman River roads.

The Rajin Port, a transit trade port, is the hub of international cargo transit transportation and transport of exports and imports of entrepreneurs who invested in the zone.

The port has assignments to transport marine products for export from the East Sea of Korea and every kind of cargoes from and to northeast area of China and Far East Region of Russia.

The Rajin Port consists of three wharves; wharf No. 1 is designed to be renovated and operated by China Dalian Chuang Li Co., Ltd. and wharf No.3 by Rason International Container Transport J. V. Company to be set up according to the contract with Russian Rail Trade Co., Ltd.

The project of Rajin-Wonjong road started in April 2011 and completed in October 2012, and the power transmission project is now under way.

Currently, three railways run through Rason.

In the whole section of the Pyongyang-Tumangang line, standard gauge track

(1,435 mm) is laid from Pyongyang to Rajin and combined-gauge track with standard gauge and broad gauge (1 520 mm) from Rajin Railway Station to Tumangang Railway Staion, leading to Khasan Railway Station.

The updating project of Rajin-Namyang railway has been agreed with China in October 2012 and the construction of Sonbong-Paekhak industrial district, building materials industrial district, high-efficiency agricultural model district and Wonjong-Quanhe border bridge is in full swing.

When the construction projects of power line, railways, ports and border bridge are brought to completion, the Rason Economic and Trade Zone will be turned into a promising economic and trade zone of the world standard.

Next, tourism is booming in this zone.

Rason has eight bays and 21 islands, big and small.

There are Pipha, Chujin and Kalum Headland tourist attractions furnished with hotels, restaurants and sea bathing grounds along the coast.

Rason abounds in natural monuments, mineral water, spring water and marine products, and sea birds and coastal scenery strike tourists with admiration.

As mentioned above, the Rason Economic and Trade Zone is a special economic zone equipped with all conditions favourable for preferential trade and investment, transit transportation, tourism and financial and service businesses.

The DPRK government is constantly encouraging foreign investors to invest in intermediate trade, industry, agriculture, construction, transport, communications, science and technology, tourism, service and finance.

Today the development prospect of the zone is optimistic.

We are looking forward to an active investment in development projects of the zone, promising high profit with small investment.

Reporter: Thank you for kind explanation.

State Economic Development Commission of the DPRK

PDF of the interview here.

Posted in Cabinet, Hwanggumphyong and Wihwado Economic Zones (Sinuiju), Railways, Rason Economic and Trade Zone (Rajin-Sonbong), Sea shipping, Special Economic Zones (Established before 2013), State Economic Development Commission (SEDC), Transportation | 1 Comment »

Zimbabwe signs $5m contracts with DPRK for statue and museum

Wednesday, March 12th, 2014

According to the Christian Science Monitor:

The cost of Bona Mugabe’s wedding on March 1, attended by the heads of state of South Africa, Zambia, and Equatorial Guinea at Mugabe’s private home in Harare’s plush Borrowdale suburb, cost $5 million.

Just after the wedding, plans leaked out that Mugabe’s Zanu (PF) government clandestinely signed North Korea, one of its old friends, to build two statues of Mugabe at an estimated cost of $5 million.

The statues were commissioned by the minister of local government, Ignatius Chombo.

One is a nearly 30-foot high bronze image worth $3.5 million to be placed in Harare; the other is a $1.5 million version to be placed in a $3.8 million museum to be built in Mugabe’s rural Zvimba home, in Mashonaland West. Building statues of leaders is something North Korea has considerable experience doing.

Read more about the story at Bloomberg and Bulawayo 24.

I have documented many of North Korea’s Africa projects on this web page. See here.

Read the full story here:
Mugabe splashes $5m on N. Korea statues
Christian Science Monitor
Mxosili Ncube
2014-3-12

Posted in International trade, Mansudae creative Company (art studio), Mansudae Overseas Development Group, Statistics, Trade Statistics, Zimbabwe | Comments Closed

North Korea seeks investments from overseas Koreans

Friday, March 7th, 2014

Institute for Far Eastern Studies (IFES)
2014-3-7

North Korea has been showing increased efforts in attracting economic investment from overseas Koreans. In particular, recent foreign media outlets run by overseas Koreans are showing increased emphasis on economic cooperation with North Korea.

In the March issue of the monthly magazine Joguk (Homeland) published by the General Association of Korean Residents in Japan (a pro-North Korea association), featured an interview with Park Kyung Jin, the director of Economic Cooperation Office for Overseas Koreans.

In the interview, Director Park described the plans for the organization: “We are diligently working to create an environment where overseas Koreans can successfully do business with North Korea.” He also emphasized that they are continually working to protect the rights and provide special legal treatment for overseas Koreans.

On February 24, US-based pro-North Korean website Minjoktongsin (Minjok Thongsin) introduced Kim Ji Hyuk and Ri Hak Song, department heads of the (DPRK) State Economic Development Commission in an article, “Where Is the North Korean Economy Heading?”

In the article, the officials stressed that North Korea is actively looking to foster economic experts and said, “We welcome the participation of experts, businesses, and organizations of overseas Koreans who wish to invest in North Korea.”

In addition, in order to increase economic cooperation with overseas Koreans, the commission introduced future plans of easing the travel process to and from North Korea including visa and other entry requirements.

North Korea is subject to international sanctions that limit its trade with most of the world and appears to be turning to overseas Koreans to overcome the country’s economic crisis. Rather than reaching out to other foreigners, North Korea is likely to be reaching out to overseas Koreans who share a common language and ethnicity, with relatively easier access.

Since the establishment of the Joint Venture Act in 1984, North Korea has worked extensively with the General Association of Korean Residents in Japan and with ethnic Koreans living in China. Since the launch of the Kim Jong Un regime, economic development zones (EDZs) are being set up across the country and ties with overseas Koreans are likely to be strengthened in efforts to further attract foreign investments into North Korea.

Posted in Economic reform, Foreign direct investment, State Economic Development Commission (SEDC) | Comments Closed

State Economic Development Commission and the Jang purge

Wednesday, February 26th, 2014

Two officials at the State Economic Development Commission have apparently been reinstated following their removal during the purge of Jang Song-thaek. According to Yonhap:

Kim Ki-sok and Kim Chol-jin, chief and deputy chief of the North’s State Economic Development Commission, had been sacked in connection with the purge and execution of leader’s uncle, Jang Song-thaek, in December last year, but have been reinstated after undergoing an “ideology re-education,” the source said on the condition of anonymity.

“Kim Ki-sok and Kim Chol-jin were forced to resign from the posts after being involved in the case of Jang Song-thaek, but reinstated as they were considered not so close to Jang,” the source said.

After reinstatement, Kim Ki-sok, chief of the North Korean commission, made secret visits last week to Beijing and Shenzhen, southern China, during which he met with Chinese business people, according to the source.

Here is what the Choson Ilbo had to say:

A source in Beijing said Kim visited Beijing, Shenzen, Singapore and Malaysia last week. He met with businesspeople interested in developing North Korea’s special economic zones.

Kim also met with Chinese officials who had experience in developing special economic zones, the source said. In Singapore, Kim discussed the development of a tourism zone in Wonsan.

But he apparently returned empty-handed.

Diplomatic sources in Beijing say North Korea is poised to push for more economic exchanges with China after elections for its rubber-stamp parliament on March 9. It will form a new team to handle the initiative now that Jang and his associates have been purged.

Prime Minister Pak Pong-ju or Ri Su-yong, a deputy department chief in the Workers Party who used to manage the coffers for former leader Kim Jong-il, may pay an official visit to China, according to sources.

Read other posts about the State Economic Development Commission here.

Read the full story here:
N. Korea reinstates key officials on economic projects with China
Yonhap
2014-2-26

Posted in China, Economic Development Zones (2013), Economic reform, Special Economic Zones, State Economic Development Commission (SEDC) | Comments Closed

Babson on post-Jang economic management

Monday, February 24th, 2014

Writing in 38 North, Bradley Babson comments on the effect Jang Song-thaek purge will have on North Korea’s economic management moving forward:

With Jang’s demise there is now a potential opportunity to make fundamental changes in the North Korean economic management and financial systems. Removing his influence over major foreign exchange earning enterprises operating outside any institutionalized supervision means that some other mechanisms must be put in place to manage these important national resources. Whether this will lead to a more rational system of cabinet-managed financial institutions serving an economic development strategy endorsed by Kim Jong Un is a basic question. Early indications are that the cabinet will be empowered to exercise more centralized control over the economy,[2] but how far this will extend into the fragmented financial system remains to be seen.

One indicator of possible significant change is whether the KPA will regain its former economic independence or become more closely integrated with national economic and financial management. This is important for improving efficiency in allocation of resources for economic development and having more control in balancing security expenditures with investments in the general economy.

Another indicator will be whether the existing system that provides funds for sustaining luxury goods patronage for the Pyongyang elite and for showcase projects like equipping the new Masik Pass ski resort, will be handed over to new more loyal technocrats to manage. Or will the Cabinet be given more latitude to shape the future political economy and distribution of wealth, given the reality that access to market power is becoming more valuable for the Pyongyang elite than receiving patronage? This would be a major change that could lead to new incentives for more rational economic management. Acknowledgment that markets are here to stay would open the possibility of addressing the need to build new financial institutional capabilities required for mobilizing and regulating private savings and economic activity. This would also help focus attention on ways to improve macroeconomic management of the mixed state-directed and market economy system.

Read the full story here:
The Demise of Jang Song Thaek and the Future of North Korea’s Financial System
38 North
Bradley Babson
2014-2-24

Posted in Banking, Central Bank, Debt, Economic reform, Finance, Fiscal & monetary policy, Foreign Trade Bank | Comments Closed

Changes made to North Korean education system

Monday, February 10th, 2014

At 6th session of the 12th Supreme People’s Assembly in September 2012, the government announced the creation of a new school year–raising the number of compulsory school years from 11 to 12.

You can read more at the link above, but here is how the new system compares with the old:

OLD:
Kindergarten (유치원): 1 year
Primary School (소학교): 4 years [formerly Primary School was called “People’s School”]
Secondary/Middle School (고등중학교): 6 years
Total: 11 years

NEW:
Kindergarten (유치원): 1 year
Primary School (소학교): 5 years
Junior Secondary School (초급중학교): 3 years
Senior Seoncdary School (고급중학교): 3 years
Total: 12 years

The new naming convention has been applied to KCTV, which now regularly refers to 초급중학교 and 고급중학교.

However, it appears that there are also more substantive changes being made to curriculum and these still have a ways to go before they are completely implemented. KCNA has [superficially] discussed some of these in two articles this year. Here they are:

Preparations for 12-year Compulsory Education in Active Progress
Pyongyang, January 27 (KCNA) — Preparations for introducing the universal 12-year compulsory education system are progressing apace in the DPRK.

According to Kim Song Il, a department director of the Ministry of General Education under the Education Commission, the 12-year education system will begin in the country on April 1 this year and go into the full enforcement through a transition stage of three years.

New programs, drawn up in accordance with the 12-year education, will be given to kindergarteners (higher class) and first-year pupils of primary schools and junior and senior secondary schools this year.

The new educational system is aimed to train all schoolchildren to be talents equipped with ample knowledge, sound moral character and good health.

New subjects necessary for secondary schoolchildren will be added in the system. Textbooks are edited with emphasis on preserving the Juche character and national identity, and priority will be given to heuristic method in teaching.

Meanwhile, various kinds of courses for teachers are going on in all provinces, cities and counties to generalize the new teaching methods created in Pyongyang and other areas.

Also, efforts have been made on a nationwide scale to increase the number of teachers and provide school things and other conditions for enforcement of the new education system.

and…

Big Efforts Directed to Improving Education in DPRK
Pyongyang, January 30 (KCNA) — Officials of the Ministry of Higher Education under the Education Commission of the DPRK have striven to bring about a new turn in the education this year.

Attention was paid to improving the contents, methods, conditions and environment of education and measures taken to raise the quality of the heuristic teaching methods and introduce them into education.

The officials are now working to widely introduce the newly-developed simulation software and generalize good experiences throughout the country.

Meanwhile, big efforts have been channeled into reinforcing teachers and applying advanced foreign educational methods to local educational work.

The officials are stepping up the work to perfect educational system in some universities, including Pyongyang University of Architecture and put the university education on an IT basis.

They also channel efforts into renewing educational environment of universities, including Kim Il Sung University and Pyongyang Jang Chol Gu University of Commerce.

And they pay deep attention to supplying students with textbooks and reference books in good time.

Yonhap also reported on Changes being made to the DPRK education system (2014-2-2):

North Korea is promoting a double major system and other reform measures at its universities, a magazine reported Sunday, in what experts here said were efforts to boost students’ freedom and emulate schools in capitalist nations.

“In accordance with demands of the new year, projects to innovate the education systems are being pursued,” said an article published in the Jokuk monthly magazine obtained by Yonhap News Agency. The magazine, whose name means “My Nation” in Korean, is read by North Korean nationals residing in Japan.

“The second major system is being implemented and other reformative measures are also being taken in order to accomplish our education objective of spreading science and information,” said the article titled “How bright North Korean scientists are nurtured.”

The magazine also noted that universities are downsizing their curriculum as part of the education reform efforts.

The undergraduate-level diploma courses for liberal arts and social science at the North’s leading Kim Il-sung University used to be a five-year program, but they were shortened by six months in 2002. They now will be shortened further to a four-year program.

Experts here said such reform measures reflect influences from capitalist education systems, where the double major system is allowed under a four-year undergraduate diploma curriculum.

“North Korea’s push for greater student freedom as reflected in its adoption of the double major system seems to be in line with the development of a market economy in North Korea in which more individual autonomy is allowed,” said Lim Eul-chul, a research professor at Kyungnam University.

North Korea expanded its 11-year compulsory education system by one more year in 2013, matching the 12-year basic education plan used in South Korea.

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