North Korean Economy Watch

The DPRK’s Naenara web page posts PDF copies of the DPRK magazine, International Trade. No updates have been made for 2013, however, Choson Exchange points an interesting article from the Q4 2012 issue which contains interesting information on the DPRK mining sector.

Choson Exchange posted a high resolution .jpg from the most recent issue of International Trade and you can see it here.

The article, “Abundant Underground Resources and the Policy for Their Development,” provides information on the “DPRK Law on Underground Resources” which was allegedly adopted by Decree No. 14 at the fifth session of the ninth Supreme Peoples’ Assembly (1993-4-8: during the Arduous March).

The text of the law is not given, and most of the article is “fluff” language, but here are some interesting tidbits:

Institutions, enterprises and organizations can develop underground resources.  They are obliged not only to make mining equipment large, modern, and high-speed, and diversify transportation but to give priority to tunneling and introduce efficient mining methods to boost mineral output.

Development of underground resources is subject to the approval of the state organ of deliberation of underground resources development .

Institutions, enterprises and organizations engaged in underground resource development shall ensure high efficiency of investment pursuant to the design of underground resource development.

They shall ensure rational organization of mining to excavate ore bodies that conform to mining criterion and standard of calculating deposits of underground resources. But the practices of digging out only high-grade and thick ore bodies in good condition to excavate are prohibited.

Abandoning of ore and coal mines and their pits should be subject to the approval of the state organ of deliberation of underground resource development.

Institutions, enterprises, and organizations, concerned should actively tap the resources of geotherm, underground water and mineral water for the economic development and improvement of people’s [sic] life [sic].

The living environment of inhabitants and ecological environment of animals and plants, including land, resources and landscapes should not be damaged in the course of their development.

The DPRK policy of underground resources development makes a tangible contribution to protection and development of underground resources to fully meet the increasing demands of the national economy for raw materials and fuel, and thus gives the impetus to the building of a thriving socialist country.

UPDATE 1: Hat tip to a reader in the commentsection…Mr. Park was given honorary citizenship to the city of Pyongyang, not to the DPRK. This is the DPRK equivalent of getting the “key to the city”.

ORIGINAL POST: Here is the certificate of authenticity (as reported by Yonhap):

This award was given to the head of Pyonghwa Motors (now for sale).

Here is more information from Yonhap:

The head of inter-Korean automaker Pyeonghwa Motors said Tuesday that he was made an honorary citizen of Pyongyang late last year to reflect his contribution to North Korea’s development.

In an interview with Yonhap News Agency, Park Sang-kwon said he received the citizenship at the Mansudae Assembly Hall in the North Korean capital on Dec. 18.

Park has led the carmaker that started off as a joint venture between South Korea’s Tongil Group, run by the Unification Church, and North Korea. Production began in 2002, with the company producing about 2,000 vehicles every year.

He said his citizenship has a serial number of 002 and has an inscription saying that the honor is being bestowed because of his contribution to the fatherland and the Korean people. He is the first foreign national to have received the honor under the communist country’s new leader Kim Jong-un.

Kim Chin-kyung, the Korean-American president of Pyongyang University of Science and Technology was the first to receive an honorary citizenship in Aug. 2011 by late North Korean leader Kim Jong-il.

“The reason why they gave me the citizenship reflects recognition for the trust I have shown them and may be a sign that they want me to more freely engage in business activities,” he said. Park claimed that the citizenship can be seen as a sign that the North will allow him to start a new business in the country.

He then said that the reason why Tongil decided to turn over management of the carmaker last November was so it could focus on a wholly-owned business operation in the country. Last year, the business group created by late Rev. Moon Sun-myung also agreed to hand over control of the Pothonggang Hotel in Pyongyang.

The executive said he had asked the North to approve such a step.

“Pyeonghwa Motors has been generating profit for the past five years,” Park said. The businessman said that in the future, he wants to engage in the distribution of household necessities in North Korea, and in particular to Pyongyang.

He said there is a need to show that a wholly-owned (outside-invested) company that is not tied to a joint venture project with a North Korean partner can succeed in the country, which can act as an incentive for other foreign companies to invest.

He pointed out that Chinese companies that invested in the North are generally those that have not done well at home. He said that successful South Korean, Japanese and U.S. companies need to engage in business activities in the North.

“If 200 competitive South Korean companies operate in the North, there would be no reason for inter-Korean tensions, and it can actually help push forward the unification process,” he said.

Park, meanwhile, said the North is looking into the option of developing a ski resort near the 768 meter high Masik pass near the city of Wonsan on the east coast.

He said that United Front Department of the ruling Workers’ Party of Korea mentioned the development plan in December and claimed that North Korean leader Kim Jong-un gave the order personally. Kim has been running the country since the sudden death of his father Kim Jong-il in Dec. 2011.

“The North seems to want to develop a small ski resort first and build this up depending on demand,” he said.

The businessman added that Pyongyang wanted to transform Wonsan into a special tourist zone and is interested in using a military airfield near the city to accept civilian flights carrying tourists. Wonsan is famous for its beaches and if a ski resort is opened on Masik pass, it could attract tourists year round.

Park claimed Kim Jong-un has gained confidence in managing the country in the last year and may move to increase investments into the tourism sector.

According to KCNA (2013-1-16):

Cooking Website Opened in DPRK

Pyongyang, January 16 (KCNA) — The Korean Association of Cooks opened a website “Korean Dishes”.

In this regard, KCNA met An Song Il, an official at the Sojae Cooking Information Exchange Company.

He said:

“The number of website visitors is on a steady increase, most of them being housewives.

The website offers cooking knowledge, experience and techniques. It also gives information and multimedia about Korean and foreign cuisines kitchen utensils and nearly 8 000 cooking methods.”

Kim Un Sim, a technician at the Hwanghae Iron and Steel Complex, said:

“I had needed to read cookbooks when I had to make a special dish.

But I can easily get cooking information through the website and learn a lot of cooking techniques.”

Ri Won Hui, a cook at the Ansanjong Restaurant in Pyongyang, said:

“The website is very helpful to upgrading cooking techniques and improving quality of dishes.”

The website was awarded the certificate of best software products at the 23rd National Software Contest and Exhibition.

Although KoryoLink’s corporate performance no longer appears in Orascom shareholder reports, Naguib Sawiris has given an interview in Forbes in which he offers some business details:

Sawiris has a 75% stake in Koryolink via his Orascom Telecom Media & Technology (OTMT) unit, with the remainder held by a company under the Ministry of Post & Telecommunications. He says revenues in 2012 should reach around €186 million ($145 million), with an average revenue per user of €8.6. The network only permits domestic calls and locally hosted data services. A separate cell network is available for foreigners in North Korea.

…

FORBES: How many subscribers does Koryolink have? How extensive is your coverage in DPRK?

NAGUIB SAWIRIS: Koryolink currently has more than 1.5 million subscribers. Coverage includes the capital Pyongyang in addition to 15 main cities, more than 100 small cities, and some highways and railways. Territory coverage is around 14%, and more than 90% population coverage. The subscriber base has been increasing at a very healthy rate from 950,000 at [year-end] 2011 to an estimated 1.7 million at [year-end] 2012.

FORBES: Under your joint venture with the Ministry of Telecommunications, when will Koryolink lose its exclusivity? What will happen after this period ends?

NS: Exclusivity was granted for a period of 4 years from launch. After the expiry of exclusivity in Dec. 2012, Koryolink received written confirmation that for an additional period of 3 years (until 2015) no foreign investors will be allowed in the mobile business. However, we are continuing to expand our network and services to further solidify our position [in order] to be ready for any possible competition.

FORBES: What is your role in the construction of the Ryugyong Hotel? What other real estate interests do you have in DPRK?

NS: This is a special investment that we are maintaining through our banking subsidiary in the DPRK, where Orascom has the right to operate this facility. The construction, repair and facade installations have all been completed last summer. We are planning to relocate Koryolink headquarters into the tower very soon to bring life to the building. There are no other real-estate investments in the DPRK, however, Orabank, our banking arm in DPRK, is actively working towards developing mobile-related businesses and projects.

Chris Green offers some great information (about which I have long wondered)  on the process required to acquire a cell phone:

First, the individual wishing to obtain a cell phone must go to his or her local Communications Technology Management Office (통신통화관리국 or CTMO; in provincial capitals only) or a subordinate arm of the same (in smaller cities) to obtain a three page application form. This form, once filled in, must be stamped by the Ministry of Public Security officer assigned to the individual’s workplace or, for those without official workplaces, attached to his or her local people’s unit.

Having paid off the public security official in cigarettes or cash (more often the former, according to this author’s sources, because it arouses less friction) he or she must submit the stamped form to the CTMO or equivalent, whereupon it is sent, with all the speed one would expect of the North Korean transportation network, to the Ministry of Communications in Pyongyang. At this point there is little else to be done but go away and pitch the proverbial tent, because at best it takes a month for the staff in the revolutionary capital to process the application.

Assuming, and it should not be assumed, that those checks done in Pyongyang don’t yield any incriminating evidence of wrongdoing (don’t forget, the North Korean legal system makes every adult a criminal in one way or another, something which can come back and haunt any individual whenever “rents” are desired), the individual will eventually be ordered back to his local communications office, whereupon he will be handed a payment form. He or she must then take this form to a bank, and engage with the separate, and no less inefficient, bureaucracy therein in order to pay the majority (though not all) of the cost of a phone and Koryolink network activation fee.[1]

The payment form, duly stamped by a functionary at the bank, must then be taken back to the CTMO or equivalent, whereupon it can be exchanged for half the stamped application form originally sought from the ministry in Pyongyang. Here, finally, the individual reaches a watershed moment: this form can actually be exchanged for a cellular telephone!

However, the pain is actually quite a long way short of being over. In a moment of uncharacteristic efficiency, the actual cell phone shop is often directly outside the communications office, but in a moment of karma-balancing inefficiency, it doesn’t open much, carries a limited amount of product and is pitifully understaffed. As a result, queues are long, as are waits. Assuming an individual lives long enough to reach the front of such a queue, he or she is finally offered the opportunity to hand over another $70-$100 and depart the scene with a brand new phone.

Writing in the Daily NK, Kim Kwang-jin explains how people are getting around this burdensome regulatory process:

Therefore, the source said, “Middlemen in larger cities are getting multiple phones activated in random people’s names and then taking them to smaller cities to sell. Alternatively, households that don’t have any problem getting that kind of approval are mobilizing the names of their entire families to get phones, which they are then selling on to the middlemen.”

“The end users are buying these cell phones for $300 to $500 from the middlemen or from private sellers. This saves them having to go to the trouble of applying to Koryolink,” he added.

A basic Koryolink phone can be purchased officially for roughly $270- $300, excluding bribes and extraneous costs. The price of one of these semi-legal phones depends on duration of use and model. The best product, the T1, a clamshell design, is the latest and costs more than $500. The next mid-range model is the T3, another clamshell; there is also a similarly priced phone with a slide design. The budget offerings are the T95 and T107. Differences in price are mostly attributable to differences in sound quality rather than the designs, sources assert.

In addition, there are also phones available for use within individual provinces. These products, which are similar to the so-called “city phones” that were briefly permitted in the late 90s but soon got withdrawn, cost just $70 at the time of writing.

Geoffrey See of Choson Exchange also offers some insight on Ora Bank’s mobile-related business projects:

However, it appears that Naguib, Chairman of Orascom, might have other ideas. In his words, “Orabank, our banking arm in DPRK, is actively working towards developing mobile-related businesses and projects.” The 3G network provides a platform for a range of other services that emerging market economies would need including remittances and payments through mobile banking and mobile payments. Given the primitive development of the services sector, mobile provides an opportunity for Orascom to upend the services industry in North Korea.

This was something I was originally looking at in North Korea. Payments are currently messy in the country. On a previous trip, I remembered an account of a North Korean trying to pay the handphone bill. Apparently the payment went to the wrong account, and the North Koreans spent the morning calling and shouting at some people to make the mistaken beneficiary return the money so that the payment could go to the right account. For what mobile banking and payments could potentially look like in North Korea, check out M-pesa.

Read the full story here:
Pyongyang Calling For Egyptian Telecoms Tycoon Naguib Sawiris
Forbes
Simon Montlake
2012-11-18

Institute for Far Eastern Studies (IFES)
2012-11-15

The Choson Sinbo, a Japan-based pro-North Korean newspaper, reported on November 9 that the role and the authority of the North Korean cabinet are increasing, especially in the planning and implementation of North Korea’s economic policies.

“North Korea is establishing new order and actions to maximize the potential of its national economy. The cabinet-government system and the cabinet-oriented system are being strengthened as economy-related matters are decided in cooperation with the cabinet,” the newspaper said.

The newspaper also commented that many North Korean news outlets are reporting on DPRK Premier Choe Yong Rim’s activities in detail, including his frequent visits to economic units, saying that “the central and regional party committees are committed to provide support and encouragement to the cabinet and various administrative and economic institutions so the workers can assume responsible roles in the economy.”

Putting the cabinet in charge of the economic sector is a major break from the past, where the Workers’ Party of Korea (WPK) enforced strict restrictions and control over all administrative and economic institutions.

In addition, the news also suggests that the recent economic revitalization efforts are being stressed at a different level than in the past. The report also mentions that North Korea is promising to “boldly go forward with all projects beneficial to the people of North Korea.”

Many high ranking economic officials from the cabinet are quickly moving in to take high-ranking positions in the WPK. Typically, economic experts remain in the cabinet for many years to develop their expertise.

However, this is quickly changing, as can be witnessed from recent appointments in the WPK. Han Kwang Bok, the former vice premier and minister of electronics industry was recently appointed as a director in the central committee of the WPK. Kwak Bum Ki, who was the vice premier of the cabinet (from September 1998 to June 2010) was recently promoted to the position of party secretary and director of the WPK’s Finance and Planning Department (since this past April’s Party Conference).

These recent promotions in the economic departments of the WPK show that people are being replaced by high-ranking and experienced officials from the cabinet, particularly in the departments of light industry, finance and planning, and science and education.

These changes and promotions of economic experts suggest that heavier emphasis is being placed on economic development and improvement of the people’s livelihoods.

North Korea’s recent changes in the cabinet and the WPK — although limited only to the economic sector — indicates a major shift in the decision-making process. The WPK normally creates policy and the cabinet executes it. However, by placing officials equally across these two bodies, it appears as though efforts are being made to minimize the friction between the two organizations and increase the effectiveness of the economic policy through cooperation.

According to the Daily NK:

According to the Northeast Asian Broadcasting Institute (NABI), the authorities made their first move in March this year, replacing the shortwave transmission equipment at Kanggye Transmission Station in Jagang Province with modern equipment made by Beijing BBEF Electronics Group Co. Kanggye Transmission Station is one of three high output shortwave transmission facilities in North Korea, with the other two being at Pyongyang and in Gujang County, North Pyongan Province.

The measures come pursuant to a June 2011 agreement signed between the North Korean Ministry of Communications and BBEF, under which the latter is required to provide North Korea with modern radio and television transmission equipment and training in its use.

North Korea has two shortwave broadcasters; Chosun Central 1st Broadcast and Pyongyang Broadcast. The first is for the domestic and international audience while the latter serves the international audience only, leading to the assumption that North Korea is replacing its existing transmitters in order to improve its broadcasts targeting South Korea. With the sort of modern equipment arriving from BBEF, North Korean broadcasts will be receivable anywhere in South Korea, no matter where in the North they are broadcast from.

According to NABI, North Korea’s shortwave broadcasting capacity was previously very weak due to worn out and broken equipment. Signal strength was particularly weak, meaning that listeners tended to receive a different channel even when tuned directly to the intended broadcast frequency. According to one defector from Pyongyang who arrived in South Korea in June 2011, the signal strength of Chosun Central 1st Broadcast was so weak at times that it was even unlistenable in most regions of North Korea.

However, the quality has recently improved dramatically, as Park Sung Moon of NABI explained to Daily NK, saying, “Recent analysis of North Korea’s shortwave Chosun Central 1st Broadcast and Pyongyang Broadcast reveal that they are being broadcast clearly and consistently, without interference or signal shifting.”

“In particular, Pyongyang Broadcast is much better than it used to be, but the overall broadcast situation has gotten a lot better,” Park added, going on, “It looks like they have imported the Chinese transmission equipment to improve their South Korea broadcasting.”

Professor Choi Hyung Jin of Sungkyungwan University Information and Communications Department agreed, adding, “If a transmitter is old and worn out then it either takes excessive power to function or the signal strength weakens. Either way, the effect of the broadcast system itself is detrimentally affected. Notably, listeners often cannot hear the broadcast. If you want people to listen, you have to improve your transmitters.”

The other side of the coin is that improved shortwave transmission strength stops incoming signals from reaching listeners.

According to one defector who used to be a part of the Party Propaganda and Agitation Department, “They know that when the Chosun Central 1st Broadcast signal strength is weak, it regularly arrives with outside broadcasts mixed in. I think they want to stop this happening.”

Though I have located many communications towers on satellite imagery of the DPRK, I have yet to definitively identify any of the DPRK’s short wave radio broadcast towers (Pyongyang, Kujang, Kanggye). If you have any information on them, please let me know.

I have located this massive broadcast center in Myohyangsan, but its purpose is unknown to me.

Read the full story here:
North Korean Shortwave Getting Stronger
Daily NK
Mok Yong Jae
2012-10-31

UPDATE (2012-11-1): The Institute for Far Eastern Studies issues a summary of the Cabinet meeting:

North Korean Cabinet Standing Committee Meeting Held, Results for Third Quarter People’s Economy Announced

North Korea announced the results of the people’s economy plan for the third quarter and named construction as its major accomplishment. In particular, many monumental edifices of the Songun era were built and recognized to have strengthened the material and technical foundation of its national economy.

The Korean Central News Agency (KCNA) reported on October 22 that such economy achievement was reported at the extended meeting for the Cabinet Standing Committee.

According to the KCNA, evaluation of the major sectors of people’s economy was made at the Cabinet meeting, commending the construction of thousands of new factories and companies.

In particular, construction of various new buildings were introduced including the new National Gift Hall, along with Pyongyang Folk Village, Rungna People’s Pleasure Ground, Rungna Dolphinarium, Sunrise Restaurant, and other modern cultural and service facilities. In addition, new buildings were built in campuses of Kim Hyong Jik University of Education and Koryo Songgyungwan University as well as other monumental edifices and major light industry factories. Such constructions are attributed to the improvement of consumer goods production and accredited to be advancing the modernization of people’s economy.

Additionally at the meeting, power and coal production was reported to have improved and production for major industrial products such as air compressors, transformers, jack hammers, coal wagons, power cables, cement and salt were also specified to have increased, contributing to the development of local industries.

Specific cases from Changsong County and Hoeryong City were presented to emphasize the improvement of local industries. The industrial production volume was claimed to have exceeded by 107 percent for the local industrial development plan for the quarter and adding strength to the modernization process for the local industries.

In the agricultural sector, considerable damage was reported for the third quarter as the North experienced floods and typhoon but asserted repair efforts for the damages took place appropriately.

The national budget income plan for the third quarter was recorded at 109.6 percent while local budget income plan was explained to have exceeded by 113.4 percent.

Following the meeting, major tasks for the economy for the fourth quarter were discussed. They included elevating the cities and counties to serve as regional bases, early response system to repair damages caused by natural disasters, and preparation to promptly carry out the 12-year compulsory education plan.

The law for the 12-year compulsory general education was recently adopted by the cabinet at the Supreme People’s Assembly meeting on September 25.

ORIGINAL POST (2012-10-22): The world was watching the most recent Supreme Peoples’ Assembly meeting for announcements of changes to the DPRK’s economic policies. However, little of substance was publicly announced.

According to Yonhap, the DPRK also held a recent cabinet meeting–date unknown. A cabinet meeting is where we would expect more serious deliberation of economic policies taking place. According to the article, however, the meeting featured rather standard agenda items (as best I can tell):

North Korea has held a cabinet meeting to discuss the country’s economic issues, a Chinese state media said Monday, as the communist regime reportedly makes efforts to reform its sickly economy.

The People’s Daily reported on its Chinese-language Web site that North Korea’s cabinet members recently gathered to review the country’s third-quarter economic performance and discuss targets to be achieved in the fourth quarter.

The meeting was presided over by North Korean Prime Minister Choi Yong-rim, the report said, citing the cabinet’s mouthpiece “Democratic (North) Korea”.

The report did not disclose when the meeting was held.

In the third quarter, North Korea saw a substantial increase on-year in its output of electricity and coal, the report said.

It also boosted production of air compressors, transformers, mining machines, wire, cement and other industrial products in the July-September.

Accordingly, the local industry has achieved an output level 7 percent higher than its original plan, while local budget revenues were 13.4 percent higher than original estimates, the Chinese newspaper said.

The North Korean cabinet members shared the view that the fourth quarter will be an important period for the regime to achieve its annual economic target for this year.

In a bid to achieve this year’s target, the country will continue to focus on producing electricity and coal, the report said.

The cabinet also agreed to fully implement universal 12-year compulsory education, promulgated at the Supreme People’s Assembly last month.

Speculation has recently risen that the secretive regime will take legal steps to start economic reforms as new leader Kim Jong-un is seen to be seeking to consolidate his power partly through fixing the broken economy.

Last month, a seminar aimed at attracting foreign investment in North Korea was held in a Beijing hotel.

Read the full story here:
N. Korea holds cabinet meeting to discuss economy
Yonhap
Kim Young-gyo
2012-10-22

According to the Daily NK:

News of a cabinet reshuffle being slowly and indirectly revealed by the North Korean state media is generating interest in analytical circles.

On the 17th, Chosun Central News Agency, in the process of unveiling the newly completed Tongil Street Fitness Center, revealed that the Minister of Sport has been removed, with Ri Jong Moo being cited instead of former incumbent Park Myung Cheol.

This is the third such change revealed in recent days. On October 4th, former Minister of Agriculture Ri Kyung Sik was revealed to have been replaced by Hwang Min, while on the 15th it was Kim Jae Seong’s turn to replace former Minister for the Electronics Industry Han Gwang Bok.

All three of the incumbents had been in-post for a number of years, adding intrigue to the news. 71-year old Park was made Minister of Sport in 1998, while 66-year old Han had been covering the electronics industry brief since 2009. 64-year old Ri, meanwhile, was made Minister of Agriculture in 2003, relieved of his duties in 2009 and then returned to post in 2011.

Read the full story here:
Cabinet Reshuffle as 3 Ministers Replaced
Daily NK
Park Seong Guk
2012-10-18

Back in March 2011, KCNA posted this video clip to their web page:

Unfortunately for the North Koreans, actions speak louder than words.

The North Koreans appear to be worried that the unwanted attention brought about by the Xiyang story will have a negative effect on investment in the country’s special economic zones along the Chinese border. In order to combat these growing negative perceptions among Chinese investors, the North Koreans have begun holding a series of invitation-only seminars to tout the benefits of investing in Hwanggumphyong and Rason.

Here is coverage of the seminar in the Global Times (PRC) of the most recent seminar:

The officials told Chinese investors attending a seminar in Beijing that North Korea will allow the Chinese yuan to be used in business transactions, offer tax incentives to targeted industries and ease visa requirements.

North Korea is hoping to spur development of the Hwanggumpyong and the Wihwa Islands, two special economic zones on the Yalu River, which also runs through the Chinese border city of Dandong, Liaoning Province, reported the Beijing News. Favorable policies regarding the Rason Economic Trade Zone, which is closer to Jilin Province, were also discussed.

A North Korean official told the seminar that his country hopes to transform the economic zones into “world-class business districts.”

More than 200 Chinese companies, including State-owned enterprises and private corporations, participated in the seminar.

China’s Vice-Minister of Commerce Chen Jian said cooperation between China and North Korea on the development of the new economic zones is going smoothly.

Despite the enthusiasm from officials on both sides, entrepreneurs expressed concern over the veracity of the country’s legal framework needed to protect their investment.

“North Korea has significant iron ore and coal reserves, but I wouldn’t rush to invest unless I am sure it can be protected by their law,” a Chinese mining entrepreneur who requested anonymity told the Global Times.

The Daily NK provides additional details:

What the People’s Daily article did do was make clear how the two sides foresee the function of the SEZ areas. Rasun, it said, “will focus on the development of raw materials, equipment, high tech products, light industry, the service sector and modern agriculture.” Conversely, Hwanggeumpyong and Wihwa Island “will focus on the development of information industries, tourism, modern agriculture and garment manufacturing.”

The Chinese Ministry of Commerce has also moved to back efforts to stimulate interest in the SEZs.

The Hankyoreh offers some additional details on this and previous seminars:

Cars pulled up one after another on Sept. 26 in front of the Bridge Art Center in downtown Beijing, where a big blue sign read “Introduction to the Choson (North Korea) investment environment and counseling on investment areas.” The Chinese corporate executives who stepped out of the vehicles filed into the venue for a briefing on investment in North Korea.

The North Korean Committee for the Promotion of Economic Cooperation and China’s private GBD Public Diplomacy and Culture Exchange Center staged the event over two days in the hope of attracting investment by introducing “promising investment areas” for Chinese entrepreneurs.

The event was invite-only. Attendees walked around the venue, where they were asked not to take pictures. A screen at the front of the conference room displayed videos on the Rason and Hwanggumpyong special economic zones and the tax breaks available to investors. Around 100 Chinese businesspeople sat in their chairs to watch.

At the entrance was a list of around thirty participating North Korean businesses. Many were in areas such as natural resource development (iron and gold mining), seafood farming, and garments. Trade companies also stood out on the list, including the Daesong General Trading Corporation and the Jangsu Trading Company. Thirty-six officials from state-run North Korean businesses provided information about 43 investment projects. The afternoon saw one-on-one talks between North Korean officials and Chinese executives.

A senior official with GBD said hundreds of Chinese businesses would be participating on Sept. 26 and 27.

“There are quite a lot of Chinese businesses interested in investing in North Korea,” the official said.

On the invitations, the organizers touted the investment briefing as an “important opportunity for Chinese businesses to invest in North Korea.”

“Choson’s new leader Kim Jong-un declared that economic development and improving people’s livelihoods are important goals of the Workers’ Party of Korea,” they read.

This is just one of many such briefings that North Korea has organized all over China. On Sept. 7, a counseling session was held in Changchun, Jilin province, for “North Korea Day and China-Choson trade investment projects.” Another investment briefing on Sept. 9 was staged concurrently with the 16th China International Fair for Investment and Trade in Xiamen, Fujian province. A joint China-North Korea economic trade briefing on Oct. 14 in Dandong, Liaoning province, is scheduled to include counseling sessions for the three areas of trade, investment, and labor between 60 North Korean national trade company officials and 100 Chinese businesspeople.

Meanwhile, the Chosun Investment Office of Joint Venture and Investment Committee, North Korea’s body for attracting foreign investment, signed a contract in Beijing on Sept. 22 with China Overseas Investment to set up an exclusive North Korea investment fund of 3 billion RMB, or about US$476 million.

China’s private investors have shown much interest amid signs of change from Pyongyang, but sources said this had not yet led to actual investments.

“In staging investment briefings, North Korea is showing that it has decided on a course of change for the sake of the economy and the public welfare,” said a source in Beijing.

“In China, people have kept asking for Pyongyang to establish more laws and regulations to allay the fears of businesses investing there, so it’s going to take some time to see the kind of investment North Korean really needs for its own economic development beyond things like mining,” the source added.

Reuters also seems to have been invited:

But after listening to a presentation from Chinese and North Korean officials at one of Beijing’s most expensive hotels laying out the supposed allure of the two zones, the head of one company gave an emphatic “no” when asked if she was convinced.

“We’re not thinking about it at the moment,” said Li Guilian, chairwoman of Dalian-based clothing company Dayang Trands. “We might go and have a look at Hwanggumphyong, but I don’t think we’ll invest.”

She nodded her head vigorously when asked if she thought it was risky investing in such an isolated and backward country.

“Investors need first of all to consider the environment. If there’s a problem with the environment, then there’s no way people are going to commit money,” Li told Reuters.

Pictured Above (Google Earth): The Mansudae Assembly Hall, meeting place of the Supreme People’s Assembly. To the east of the Hall is the new Peoples’ Theater and new housing apartments along Changjon and Mansudae Streets.

A rare “second session” of the DPRK’s Supreme People’s Assembly was held on September 25th. The unicameral legislature, with little de facto authority, usually holds a single meeting in April of each year. The last special “second session” was held in June 2010 (see below for more information).

This 6th session of the SPA was widely anticipated outside the DPRK because many analysts believed the country would be announcing a plethora of economic adjustment measures. See here for background. None of this was discussed publicly.

Here is KCNA coverage of the session:

Sixth Session of 12th SPA Held

Pyongyang, September 25 (KCNA) — The Sixth Session of the 12th Supreme People’s Assembly of the DPRK was held at the Mansudae Assembly Hall Tuesday.

Kim Jong Un, first secretary of the Workers’ Party of Korea, first chairman of the DPRK National Defence Commission and supreme commander of the Korean People’s Army, was present at the session.

Deputies to the SPA were present there.

Officials of party, armed forces and power bodies, public organizations, ministries and national institutions and those in the fields of science, education, literature and arts, public health and press were present as observers.

The session decided on agenda items of the session.

On Enforcing Universal 12-Year Compulsory Education

Organizational Issue

Deputy Choe Thae Bok made a report “On Enforcing Universal 12-Year Compulsory Education.”

He said that the DPRK government will enforce the universal 12-year compulsory education to drastically improve and strengthen the secondary general education and further consolidate the socialist education system to meet the requirements of the developing revolution and the times.

The new educational system is aimed at helping the younger generation round off the secondary general education by teaching them general basic knowledge and basic knowledge of modern technologies in the period of the 12-year systematic education which consists of one-year pre-school education, five-year primary school education, three-year junior middle school education and three-year senior middle school education, reporter noted.

He referred to the issues arising in successfully enforcing the new education.

Then followed speeches.

The speakers said that the enforcement of the universal 12-year compulsory education at this significant period when the new century of Kim Il Sung and Kim Jong Il’s Korea started is the firm determination and will of the WPK to steadfastly carry forward and glorify the idea and cause of Generalissimos Kim Il Sung and Kim Jong Il who devoted their all to the future of the country all their life.

The enforcement of the new education provided a sure guarantee for putting secondary general education onto a higher stage and effecting an epochal turn in the work to train able revolutionaries in keeping with the requirements for the building of a thriving nation, they noted.

Ordinance of the SPA of the DPRK “On Enforcing the Universal 12-Year Compulsory Education” was adopted at the session.

The session discussed organizational issue.

Hong In Bom, chief secretary of the South Phyongan Provincial Committee of the WPK, and Jon Yong Nam, chairman of the Central Committee of the Kim Il Sung Socialist Youth League, were elected members of the SPA Presidium to fill the vacancies.

Choe Hui Jong was recalled from the post of chairman of the Budget Committee of the SPA and Kwak Pom Gi elected chairman of the budget committee.

Issues Concerning Enforcement of Universal 12-year Compulsory Education Discussed at SPA Session

Pyongyang, September 25 (KCNA) — Deputy Choe Thae Bok made a report on enforcing the universal 12-year compulsory education at the sixth session of the 12th Supreme People’s Assembly of the DPRK held on Tuesday.

According to the report, the DPRK government will enforce the universal 12-year compulsory education to drastically improve and strengthen the secondary general education and further consolidate the socialist education system to meet the requirements of the developing revolution and the times.

The universal 12-year compulsory education represents the development of the universal 11-year compulsory education that has been enforced by the DPRK government, and a new higher stage of the secondary general education.

The new education system is aimed at helping the younger generation round off the secondary general education by teaching them general basic knowledge and basic knowledge of modern technologies in the period of the 12-year systematic education which consists of one-year pre-school education, five-year primary school education, three-year junior middle school education and three-year senior middle school education.

The reporter said that the enforcement of the universal 12-year compulsory education is a huge task to be carried out as a nationwide movement with the involvement of whole society. He elaborated on it.

The order and phases for the enforcement of the system shall be fixed properly and be thoroughly carried out, he said.

An important task for enforcing the universal 12-year compulsory education is to properly shape the educational contents and improve the methods of education, he added.

He called for stepping up the work for improving the curricula which constitute a basis in arranging the educational contents, and confirming the general goal of the secondary general education, goals of the courses of study and the scope and level of educational contents. He also underscored the need to write and publish necessary textbooks at an early date.

He also underlined the need to strengthen education in computer technology and foreign languages with a main emphasis on the education in general basic knowledge in the field of basic sciences including mathematics, physics, chemistry and biology.

He also called for kicking off an intensive drive for creating new and substantial educational methods and generalizing them as well as actively introducing test methods for correctly assessing the abilities of students.

All the schools should carry out the positive drive to put the teaching, experiments and practical training on an IT basis, computerize the educational administration and management and establish information communications network between the education committee and educational institutions across the country so that teachers and students can receive information necessary for the education in time, the reporter noted.

He also called for successfully building up in a substantial way the ranks of teachers who are directly responsible for education and drastically raising their levels and roles.

Increased state investment in the educational field and provision of educational conditions are a sure guarantee for the successful enforcement of the universal 12-year compulsory education, he said, and continued:

The expenditure for education should be markedly increased in the state budget, and electricity, equipment and materials needed for education be provided on a preferential basis.

The role of organizations patronizing schools should be raised and the officials of all units including provincial, city and county people’s committees should pay deep attention to the education and push forward the work for the enforcement of the universal 12-year compulsory education in close combination with the model education county movement.

Educational and scientific research institutions should strengthen study for raising the quality of the universal 12-year compulsory education on the basis of a correct review and analysis of the present state of education of the country and the worldwide education trend. They should analyze and systematize scientifically and theoretically the new and advanced teaching methods and experience created in practice and generalize them.

The reporter stressed the need to step up the work for successfully enforcing the universal 12-year compulsory education true to the noble intention of the dear respected Kim Jong Un manifested in his ardent love for the younger generation and the future.

Ordinance of DPRK SPA on Enforcing Universal 12-Year Compulsory Education Promulgated

Pyongyang, September 25 (KCNA) — Ordinance of the DPRK Supreme People’s Assembly on enforcing universal 12-year compulsory education was promulgated at the sixth session of the 12th SPA held in Pyongyang Tuesday.

According to the ordinance, the DPRK government enforced the compulsory primary education in 1956, compulsory secondary education in 1958 and Korean-style unique universal 9-year compulsory technical education which closely combined secondary general education with basic technical education and education with production in 1967.

In 1972 the DPRK government introduced the universal 11-year compulsory education, the first of its kind in the world.

The enforcement of the universal 11-year education was a just measure for raising the level of free compulsory education, improving the contents of education and bringing up the new generations to be able revolutionaries and competent socialist builders intensely loyal to the party, the leader, the country and its people as required by the era and the developing revolution.

The DPRK is now demonstrating its might as a dignified military power possessed of nuclear deterrent, a country that manufactures and launches satellites. Korean-style CNC technology and flexible production system have been introduced to the different domains of the national economy and a great number of Juche-based and modern heavy and light industrial bases and grand monuments have been built. This is associated with the feats and merits of young scientists and youth who have grown up, receiving the universal 11-year compulsory education.

The Workers’ Party of Korea and the DPRK government are set to enforce the universal 12-year compulsory education reflecting the present requirements for building a prosperous socialist country in all fields now that the requirements for education have risen higher than ever before.

The enforcement of the universal 12-year compulsory education is a step reflecting the dear respected Kim Jong Un’s noble outlooks on the country, the younger generation and future and it is a great event that demonstrates before the whole world that the DPRK is dynamically advancing toward an educational power and a highly civilized socialist country.

The universal 12-year compulsory education is the most just and advantageous education for drastically raising the quality of education to meet the requirements for the development of education in the age of knowledge-based economy and the trend of the world and bringing up the younger generation to be Juche-type able revolutionaries possessed of ample secondary general knowledge, modern basic technology and creative ability.

The SPA of the DPRK discussed the issue of enforcing the universal 12-year compulsory education and made a decision.

According to the decision, the universal 12-year compulsory education shall be enforced in all areas of the DPRK.

The universal 12-year compulsory education shall be enforced free of charge and all children from 5 to 17 years are obliged to receive this education.

This education consists of one-year pre-school education and five-year primary schooling, three-year junior middle schooling and three-year senior middle schooling.

The six-year middle schooling shall be enforced from the 2013-2014 school year, divided into three-year junior middle schooling and three-year senior middle schooling.

The work for converting the four-year primary schooling to five-year primary schooling shall go through the preparatory phase to be started in the 2014-2015 school year and this shall be finished in 2-3 years.

Educational system and education of special courses of study shall be decided as separate issues.

Measures shall be taken to solve the shortage of teachers resulting from the enforcement of the universal 12-year compulsory education, raise their qualifications and improve educational methods.

State investment in education shall be increased and conditions and environment necessary for the enforcement of the universal 12-year compulsory education be created.

Administrative guidance and legal control shall be strengthened for the successful enforcement of the universal 12-year compulsory education.

Here is additional coverage of the session by various outlets:

1. The Daily NK got the scoop on the education reform.

2. Yonhap coverage here and here.

3. Evan Ramstad at the Wall Street Journal.

4. Carol Williams at the Los Angeles Times.

5. NK Leadership Watch.

6. NK News.

Additional Information:

1. 5th Session of the 12th Supreme People’s Assembly (regular session: 2012-4)

2. 4th Session of the 12th Supreme People’s Assembly (regular session: 2011-4)

3. 3rd Session  of the 12th Supreme People’s Assembly (extra session: 2010-6): KCNA 1, KCNA 2, KCNA 3, KCNA 4, KCNA 5, KCNA 6, KCNA 7, KCNA 8, here, here, and here.

4. 2nd Session of the 12th Supreme People’s Assembly (regular session: 2010-4): KCNA 1,KCNA 2,  here, and here.

5. 1st Session of the 12th Supreme People’s Assembly (regular session: 2009-4):  KCNA and here.

6. Elections for the 12th Supreme People’s Assembly were held in March 2009. See here, here, here.

7. Previous posts on the Supreme People’s Assembly