UPDATE: According to the Choson Ilbo:
North Korea recently announced it wants to create a bank to finance national development projects and appointed a Korean-Chinese businessman named Pak Chol-su to head what is to be called the [North] Korea Taepung International Investment Group, which is to attract foreign capital for the bank. The seven-member board of directors at the investment company include usual suspects like Kim Yang-gon, the director of the Workers’ Party’s United Front Department, Jang Song-taek, Kim Jong-il’s brother-in-law, and other key players.
But analysts say Pak, a foreigner, is the only one with the ability to attract overseas capital, leading to a sense among South Korean intelligence analysts that Pak was brought in to save what he can of the North Korean economy. It is not the first time. In 2002, the hermit country appointed Chinese-Dutch entrepreneur Yang Bin governor of the Sinuiju Special Administrative Region, though the plan belly-flopped when the Chinese arrested Yang on corruption charges.
According to North Korean sources, Pak was born in 1959, graduated from Yanbian University and has a master’s degree in business and commerce from another university in China. He later developed close ties with high-ranking North Korean officials selling Chinese gasoline in the North. “Since Chinese gasoline is used in cars, it is sold directly to North Korean military officers or key government agencies” since top officials are practically the only ones likely to have one, said one North Korean source. “Pak appears to have gained the confidence of high-ranking officials in the process.”
Pak is believed to have been responsible for setting up a secret meeting between Kim Yang-gon and South Korean Labor Minister Yim Tae-hee in Singapore last October. “Pak used his connections to help North Korea when it was looking for a contact point with the South Korean government after August last year, and it appears this position is his reward,” said Cho Bong-Hyun, a North Korea analyst with the Industrial Bank of Korea. There is speculation that Pak may be tasked with luring South Korean capital for investment in North Korea.
The Taepung International Investment Group was established in China and Hong Kong in September 2006 to lure foreign investment to North Korea. In 2007, Taepung signed an agreement with China’s Tangshan Iron and Steel to build a production plant in North Korea and was involved in getting the New York Philharmonic Orchestra to perform in Pyongyang in February 2008. The North announced last Wednesday that both Taepung and the bank would be headquartered in Pyongyang.
It remains to be seen whether Pak will generate the results the regime hopes for. Lee Jo-won, a professor of North Korean studies at Chung-Ang University, said, “Unlike the appointment of Yang Bin, there seems to have been a certain level of consent in terms of the role Pak will play. But without progress in the North Korean nuclear crisis, it’ll be virtually impossible for him to attract foreign investment.” One senior South Korean government official said, “Last year, North Korea apparently held an investment blitz in the EU and was disappointed to learn that continued economic sanctions due to its nuclear weapons program in effect prevent other countries from making any investment there.”
UPDATE: DPRK establishes national development bank in order to attract foreign capital
Institute for Far Eastern Studies (IFES)
NK Brief No.10-01-22-1
1/22/2010
On January 20, the (North) Korean Central News Agency (KCNA) reported that the North’s most powerful government organization, the National Defense Commission, ordered the establishment of a ‘National Development Bank’ to “carry out investment affairs for projects important to national policy and to conduct business with international commercial banks and international financial institutions.”
Furthermore, the committee decided to establish the main branch of the ‘Korea Daepung International Investment Group’ in Pyongyang, which will operate as an economic consortium attracting foreign monies and ensuring the flow of capital for the National Development Bank. The KCNA reported that an announcement was made at the Pyongyang Yanggakdo International Hotel explaining that “the first meeting of the Korea Daepung International Investment Group board of directors had opened, and that at the meeting, the National Defense Commission’s decision regarding the establishment of the National Development Bank and the mediation committee of the Korea Daepung International Investment Group had been created.”
The news agency went on to explain that the National Development Bank would conduct business with international financial institutions and commercial banks according to “modern financial standards and systems,” ensuring necessary investments in support of projects central to the promotion of national policy. The KCNA also reported that at the meeting, an order from Kim Jong Il was passed down with the title “On Ensuring the Operations of the Korean Daepung International Financial Group.”
Kim Yang-gun (a member of the National Defense Commission and director of the Unification Strategy Department) was selected as Chairman of the Korean Asia-Pacific Peace Committee, while Chinese-Korean Bak Cheol-su was chosen as president and chairman of the board. The 7-member board of directors is reportedly made up of representatives from the National Defense Commission, the Cabinet, the Ministry of Public Finance, the Korean Asia-Pacific Peace Committee, the Korea Daepung International Investment Group, and other related offices.
The board of directors meeting also discussed and voted on bylaws, a 2010 action plan and an annual budget for the Korea Daepung International Investment Group as well as activities for a preparatory committee for the establishment of the National Development Bank. It was also decided to form a secretariat for the board of directors.
In September 2006 the Daepung International Investment Group was established in Hong Kong by North Korean authorities in order to serve as a window for foreign investment, and the group was part of the effort in October 2007 to entice investment from the Chinese Tangshan Iron and Steel Group. It also played a role in bringing the New York Philharmonic Orchestra to Pyongyang in February 2008.
This latest measure appears to indicate that the North Korean leadership is taking a more aggressive drive to entice foreign capital, but it is not yet clear if the move will have any significant impact. It stands out that as sanctions enforced against the North by the international community make it difficult for Pyongyang to attract foreign investment, the North is stressing its intention to uphold “modern standards” for those willing to invest.
The Daepung Group rose to prominence in 2007 as a new window for attracting foreign investment into the North when it reached agreements with China’s Dangshan Steel and Iron Group, the country’s 3rd largest steel company, and Datang Power to form a joint venture to build a 1.5 million-ton processing plant and a 600,000 kW coal-burning power plant in the Kimchaek Industrial District.
ORIGINAL POST: According to KCNA:
Pyongyang, January 20 (KCNA) — The first meeting of the Board of Directors of the Korea Taepung International Investment Group took place at Yanggakdo International Hotel on Wednesday.
It was attended by directors of the board of the group and officials concerned as observers.
Conveyed there were an order of the chairman of the DPRK National Defence Commission “On ensuring the activities of the Korea Taepung International Investment Group” and decisions of the DPRK NDC “On establishing the State Development Bank” and “On setting up the Coordinating Committee of the Korea Taepung International Investment Group”.
At the meeting Kim Yang Gon, chairman of the Korea Asia-Pacific Peace Committee, was elected director-general of the board of the group and Pak Chol Su, a Korean resident in China, permanent deputy director-general and president of the group.
The board of directors is made up of seven persons including representatives of the National Defence Commission, the Cabinet, the Ministry of Finance and an office concerned of the DPRK, the Korea Asia-Pacific Peace Committee and the Korea Taepung International Investment Group.
The meeting decided to set up a secretariat of the board of directors and named its members.
It deliberated and decided on the draft rules of the Korea Taepung International Investment Group, its action program and financial budget bill for 2010, a resolution on starting the operation of a preparatory committee for establishment of the State Development Bank and other agenda items related to the work of the group.
Kim Yang Gon made a keynote report and Pak Chol Su an address on the work of the group at the meeting.
The group, an external economic cooperation body, will play the role of an economic complex ensuring the induction of investment and finances for the State Development Bank, and it will be headquartered in Pyongyang.
The State Development Bank is to provide investment on major projects to be carried out according to the state policy after being equipped with advanced banking rules and system needed for transactions with international monetary organizations and commercial banks.
The Choson Ilbo has more:
North Korea will establish a state development bank which will deal with international financial organizations and commercial banks and invest according to state policies, the official [North] Korean Central News Agency reported Wednesday. The decision was made by the powerful National Defense Commission, which is headed by leader Kim Jong-il.
It will also set up an international cooperation agency called the Joson Daepung International Investment Group to take charge of attracting investment for the bank, KCNA said.
KCNA claimed the bank has “modern financial rules.” Kim Yang-gon, the director of the Workers’ Party’s United Front Department, has been named chairman of the Joson Daepung Investment Group, and Pak Chol-su vice chairman.
A North Korean source said Pak is a Korean-Chinese businessman who maintains relations with South Korean officials and businessmen. He apparently once arranged a secret inter-Korean meeting.
Pak is also believed to have been involved in a secret meeting held between Labor Minister Yim Tae-hee and Kim Yang-gon in Singapore last October.
Rumor has it that Jang Song-taek, Kim Jong-il’s brother-in-law and the director of the Administrative Department of the Workers’ Party, is also on the board of directors.
North Korea will establish a state development bank which will deal with international financial organizations and commercial banks and invest according to state policies, the official [North] Korean Central News Agency reported Wednesday. The decision was made by the powerful National Defense Commission, which is headed by leader Kim Jong-il.
It will also set up an international cooperation agency called the Joson Daepung International Investment Group to take charge of attracting investment for the bank, KCNA said.
KCNA claimed the bank has “modern financial rules.” Kim Yang-gon, the director of the Workers’ Party’s United Front Department, has been named chairman of the Joson Daepung Investment Group, and Pak Chol-su vice chairman.
A North Korean source said Pak is a Korean-Chinese businessman who maintains relations with South Korean officials and businessmen. He apparently once arranged a secret inter-Korean meeting.
Pak is also believed to have been involved in a secret meeting held between Labor Minister Yim Tae-hee and Kim Yang-gon in Singapore last October.
Rumor has it that Jang Song-taek, Kim Jong-il’s brother-in-law and the director of the Administrative Department of the Workers’ Party, is also on the board of directors.
(From a reader): The Korea Taepung International Investment Group (조선태풍국제투자그룹) will attract and coordinate investment – ostensibly from China as a founding member is a Korean Chinese. The group’s charter came from Kim Jong-il , Chairman of the NDC, and its board members include Kim Yang-gon, chairman of the Korea Asia-Pacific Peace Committee (who was elected chairman of the board), Pak Ch’ol-su, a Korean-Chinese (elected standing vice chairman of the board and president), and seven persons representing the NDC, Cabinet, Ministry of Finance, relevant ministries, Korea Asia-Pacific Peace Committee, and the Choson Taep’ung International Investment Group. This seems to be a major salvo in North Korea’s current campaign to ease international tensions, curry desperately needed investment, and ultimately get the country back on its centralized economy track.
According to NK Leadership Watch: In the video footage of the meeting (1/20/2010 on Elufa.net) Kim Chang-sun can bee seen. He is on Kim Jong il’s secretariat.
The Pyongyang Times has more here.
