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Seoul alters DPRK budget priorities

Thursday, October 9th, 2008

According to Yonhap:

Under the Unification Ministry’s budget plan for next year, the inter-Korean economic cooperation fund, aimed at promoting cross-border human exchanges and economic partnerships, will increase 8.6 percent to 1.5 trillion won from 1.3 trillion won this year.

The budget for humanitarian assistance accounts for 72 percent of the fund, a sharp rise from 43 percent this year, mainly attributable to hikes in rice and fertilizer prices, said the ministry in change of policy on North Korea.

“We plan to send 400,000 tons of rice and 300,000 tons of fertilizer to North Korea if needed,” Vice Unification Minister Hong Yang-ho told reporters.

The ministry has allocated 352 billion won to send rice and 291 billion won for fertilizer aid, he added.

The budget for inter-Korean economic projects, however, has been halved to 300 billion won in accordance with the Lee administration’s policy of linking them with progress in efforts to denuclearize the North, economic feasibility, financial capacity, and public opinion.

Meanwhile, the ministry has created a separate account for denuclearization costs in the inter-Korean cooperation fund, a measure to take into effect on Friday, a day after the second anniversary of North Korea’s nuclear test.

South Korea has delivered fuel oil and energy-related materials to North Korea under an aid-for-denuclearization deal last year in the six-way nuclear talks. Related spending has been categorized as energy aid.

Read the full article here:
S. Korea budgets $460 million for rice, fertilizer aid to N. Korea
Yonhap
10/9/2008

Posted in Energy, Food, Foreign aid statistics, RoK Ministry of Unification, Statistics, Trade Statistics | Comments Closed

North Korea on Google Earth

Thursday, October 2nd, 2008

North Korea Uncovered: Version 12
Download it here

About this Project: This map covers North Korea’s agriculture, aviation, cultural locations, markets, manufacturing facilities, energy infrastructure, political facilities, sports venues, military establishments, religious facilities, leisure destinations, national parks, shipping, mining, and railway infrastructure. It is continually expanding and undergoing revisions. This is the 12th version.

Additions include: Tongch’ang-dong launch facility overlay (thanks to Mr. Bermudez), Yongbyon overlay with destroyed cooling tower (thanks to Jung Min Noh), “The Barn” (where the Pueblo crew were kept), Kim Chaek Taehung Fishing Enterprise, Hamhung University of education, Haeju Zoo, Pyongyang: Kim il Sung Institute of Politics, Polish Embassy, Munsu Diplomatic Store, Munsu Gas Station, Munsu Friendship Restaurant, Mongolian Embassy, Nigerian Embassy, UN World Food Program Building, CONCERN House, Czech Republic Embassy, Rungnang Cinema, Pyongyang University of Science and Technology, Pyongyang Number 3 Hospital, Electric Machines Facotry, Bonghuajinlyoso, Second National Academy of Sciences, Central Committee Building, Party Administration Building, Central Statistics Bureau, Willow Capital Food House, Thongounjong Pleasure Ground, Onpho spa, Phipa Resort Hotel, Sunoni Chemical Complex (east coast refinery), Ponghwa Chemical complex (west coast refinery), Songbon Port Revolutionary Monument, Hoeryong People’s Library, Pyongyang Monument to the anti Japanese martyrs, tideland reclamation project on Taegye Island. Additionally the electricity grid was expanded and the thermal power plants have been better organized. Additional thanks to Ryan for his pointers.

I hope this map will increase interest in North Korea. There is still plenty more to learn, and I look forward to receiving your contributions to this project.

Version 12 available: Download it here

Posted in Agriculture, Animation, Architecture, Art, Automobiles, Aviation, Banking, Cell phones, Coal, Communications, Computing/IT, Construction, Copper, Dams/hydro, Education, Electricity, Energy, Environmental protection, Film, Finance, Fiscal & monetary policy, Food, Football (soccer), Foreign direct investment, Forestry, Gambling, Gasoline, General markets (FMR: Farmers Market), Gold, Golf, Google Earth, Health care, Hoteling, Hwanggumphyong and Wihwado Economic Zones (Sinuiju), International trade, Joint Ventures, Kaesong Industrial Complex (KIC), Leisure, Library, Light Industry, Lumber, Manufacturing, Mass games, Military, Mining/Minerals, Mt. Kumgang Tourist Special Zone, Music, Nuclear, Pyongyang Metro, Railways, Rason Economic and Trade Zone (Rajin-Sonbong), Real estate, Religion, Restaurants, Sea shipping, Special Economic Zones (Established before 2013), Sports, Television, Tourism, Transportation, Wind | 1 Comment »

North Korea juggles South, Japan, Russia, and US

Tuesday, September 30th, 2008

The DPRK’s recent efforts to reconstruct the Yongbyon 5MW nuclear reactor seem to have brought implementation of the “second” Agreed Framework to a halt, though it was already behind schedule. This week the US sent Chris Hill to Pyongyang to try and rescue the process which is hung up on verification protocol. The North claims to have sufficiently declared their nuclear capabilities and believe they should be removed from the US list of state sponsors of terror. The US does not believe this condition has been met and seeks to establish a protocol to verify if the North’s declaration is accurate.

Japan is also set to extend sanctions (due to expire) on the DPRK. According to Bloomberg:

Japan’s ruling Liberal Democratic Party decided to extend sanctions against North Korea for six months after their Oct. 13 expiration date, Jiji Press reported.

LDP lawmakers agreed to extend the sanctions because North Korea took steps to reactivate its nuclear program and made little progress in an investigation into Japanese nationals abducted by North Korean agents, Jiji reported.

Prime Minister Taro Aso’s Cabinet is likely to endorse the extension by Oct. 10., the Japanese wire service said.

The sanctions include a ban on North Korean imports and the entry of North Korean ships into Japanese ports. The extension will be the fourth since sanctions began after North Korea’s October 2006 nuclear test, Jiji said.

Just as the DPRKs hopes of restoring/establishing relations with Japan and the US start to dim, however, they have reached out to South Korea, with whom political relations had recently gone sour due to the South’s policy change from unsupervised aid provision under the “sunshine policy” to a quid-pro-quo relationship under a “policy of mutual benefits and common prosperity“. Additionally, the fatal shooting of a South Korean tourist in Kumgangsan led to a deterioration in cooperation between the two governments and suspension of the inter-Korean project (a cash cow for the North).

How much was the Sunshine Policy worth to the North? South Korean GNP lawmaker Jin Yeong, who analzed data submitted by the Unification Ministry and the Export-Import Bank of Korea, claims that the Kim and Roh administrations oversaw the transfer of 8.38 trillion South Korean Won in aid and loans since 1998.

Taking office in February 2003 after the second North Korean nuclear crisis emerged in September 2002, Roh doled out 5.68 trillion won to Pyongyang over his five-year term, double that of his predecessor Kim (2.70 trillion won).

Kim and Roh gave to North Korea 2.4 trillion won for building light-water reactors and in food aid; 2.5 trillion won to pin the price of rice aid to that of the global market; 2.8 trillion won for other aid including fertilizer; and 696 billion won in aid from advocacy groups and provincial governments.

In 2003, South Korean aid to the North reached a high of 1.56 trillion won. Then after North Korean leader Kim Jong Il declared that his country had gone nuclear in 2005, the Roh administration sent 1.48 trillion won to the North.

Jin said, “South Korea gave a loan with rice first in 2000. Payments on the loan are deferred for 10 years. Thus, we are to receive the first repayment installment in 2010. But most of the 2.4 trillion won in loans seem irrecoverable.”

PricewaterhouseCoopers Korea audited the fiscal 2007 accounts of Seoul`s inter-Korean cooperation funds, saying, “Considering the characteristics of the North Korean government, grave uncertainty exists over the possibility of redeeming the loans given to the regime. The ultimate outcome depends heavily on the conditions around the Korean Peninsula.”

Since President Lee Myung-bak took office this year, exchanges between the two Koreas have been rare. Still, aid to the light-water reactor and the Gaesong industrial complex projects and civilian donations have continued, amounting to a combined 211.3 billion won. (Donga Ilbo)

It appears the Russians are doing their part to bring the North and South together through a project they can all agree on—building a natural gas pipeline from Russia to South Korea via the DPRK:

South Korea plans to import $90 billion of natural gas from Russia via North Korea, with which it shares one of the world’s most heavily fortified borders, to reduce its reliance on more expensive cargoes arriving by sea.

State-run Korea Gas Corp. signed a preliminary agreement with OAO Gazprom, Russia’s largest energy company, to import 10 billion cubic meters of natural gas over 30 years starting in 2015, the Ministry of Knowledge Economy said in a statement. The accord was signed in Moscow during President Lee Myung Bak’s three-day visit that began yesterday.

Gazprom Chief Executive Officer Alexei Miller said after talks today between Lee and Russian President Dmitry Medvedev that the exact delivery route hasn’t been determined and that shipments could begin as early as 2015.

“Russia suggested a pipeline via North Korea, which is expected to be more economical than other possible routes,” the minister said in a news briefing. “Russia will contact the North to discuss this.”

“Transporting gas through North Korea could be risky for South Korea,” said Kim Jin Woo, a senior research analyst at Korea Energy Economics Institute. “But the project will ease tensions on the Korean peninsula if Russia successfully persuades North Korea” to accept the plan.

North Korea could earn $100 million a year from the gas- pipeline project, the Ministry of Knowledge Economy said.

“Russia will supply the fuel in the form of LNG or compressed natural gas if negotiations with North Korea do not work out,” according to the ministry’s statement. South Korea and Russia will sign a final agreement in 2010 when a study on the route is completed.

South Korea is turning to Russia, holder of the world’s biggest proven gas reserves, as it faces intensifying competition for energy resources from China and Japan. Asia’s fourth-largest economy depends on gas for 16 percent of its power generation.

Under the agreement, a pipeline to South Korea will be laid via North Korea from gas fields on Sakhalin Island in Russia’s Far East. The pipeline would initially carry 10 billion cubic meters of gas a year, or about 20 percent of South Korea’s annual consumption. The cost of the gas link’s construction is estimated at $3 billion, the ministry said.

Read the full articles here:
South Korea Seeks $90 Billion of Russian Natural Gas
Bloomberg
Shinhye Kang
9/29/2008

Liberal Gov`ts Gave W8.38 Bln to North Korea`
Donga Ilbo
9/30/2008

Posted in Agriculture statistics, Energy, Finance, Fiscal & monetary policy, Foreign aid statistics, International Aid, International trade, Japan, Mt. Kumgang Tourist Special Zone, Natural Gas, Nuclear, RoK Ministry of Unification, Russia, South Korea, Special Economic Zones (Established before 2013), Statistics, USA | 1 Comment »

DPRK steps up efforts to improve power plants

Tuesday, September 30th, 2008

Instutie for Far Easter Studies (IFES)
NK Brief No. 08-9-30-1
9/30/2008

North Korea is accelerating projects to repair and upgrade power plants throughout the country in order to resolve its electrical shortage problems. According to the (North) Korean Central Broadcasting Station on September 25, oil pressure regulators on generators 1 and 2 at the Soopoong Power Plant on the Yalu River were replaced with more efficient digital regulators in order to increase power production capabilities. The broadcasters also announced on the 22nd that the Number 3 Boiler at the East Pyongyang Steam Power Plant, which supplies electricity to the Pyongyang area, is undergoing a major overhaul, just as its Number 1 Boiler did in July.

A ‘February 17 Shock Troop’ of scientists and technicians from Kim Il Sung University, Kim Chaek University of Technology, Pyongyang Machinery College, Han Duk Su Pyongyang Technical College, Pyongyang Computer College, and the Ham Heung Su College of Locomotive Power has been dispatched to the East Pyongyang plant and are working on overhauling and updating the equipment there.

The Pyongyang Steam Power Plant, in the Pyongchun neighborhood of Pyongyang, is also undergoing major upgrades in preparation for winter, with boilers Number 2 and 7 overhauled and back on-line and Number 4 Boiler’s overhaul in its final stage. Electrical facilities on the Boojeon River, Jangja River, Daedong River, and Nam River, as well as the Taechun, Seodusu, and Samsu Power Plants, are all undergoing upgrades on power generation equipment and water flow systems.

North Korea is also pushing forward with the building of new power production facilities at the Yesung River Power Plant, Wonsan Centennial Power Plant, Urang Power Plant, Youngwon Power Plant, Geumya River Power Plant, Baekdu Mountain Military-first Centennial Power Plant, and the Geumjin River Guchang Power Plant. Cabinet officials from the government’s construction bureau have been dispatched to each location in order to ensure the early completion, while legislation supporting the construction of small and mid-sized power plants is also being pushed.

As North Korea celebrates the 60th anniversary of its founding, it is emphasizing economic development, and to this end, has completed construction of the Number 1 Generator at the Yesung River Centennial Power Plant, the Sungchun Power Plant, and the first stage of construction at the Wonsan Centennial Power Plant. In the 2008 New Year’s Joint Editorial, the government promoted the construction of large-scale hydroelectric facilities as well as small and mid-size power plants, along with modernization of existing power production equipment, in order to increase electrical production.

Posted in Coal, Dams/hydro, Electricity, Energy, Oil | Comments Closed

New CRS reports on North Korea available

Tuesday, September 23rd, 2008

I have updated the list of Congressional Research Service (CRS) reports published on North Korea and posted them here. I have also added a hyperlink under “pages” on the menu tab to the right.

Updates include:
US Assistance to North Korea: July 31, 2008
North Korean Ballistic Missile Threat: January 24, 2008
North Korea’s Nuclear Weapons Program: January 21, 2008
North Korea’s Abduction of Japanese Citizens and the Six-Party Talks: March 19, 2008
The Kaesong North-South Industrial Complex: February 14, 2008
The North Korean Economy: Leverage and Policy Analysis: August 26, 2008

Posted in Agriculture, Agriculture statistics, Demographics, Energy, Foreign aid statistics, GDP statistics, International trade, Manufacturing, Military, Mining/Minerals, Political economy, Statistics, Trade Statistics, USA | Comments Closed

Yongbyon and beyond…

Monday, September 22nd, 2008

UPDATE: Inspectors barred.

North Korea has barred international inspectors from a nuclear reprocessing plant that produces weapons-grade material and intends to restart activity there in a week, the International Atomic Energy Agency said on Wednesday.

The decision by North Korea comes as the Vienna-based nuclear agency also announced it had completed on Wednesday the removal of all seals and surveillance cameras from the reprocessing plant, one of several sites at its vast Yongbyon nuclear complex. The removal was carried out following a formal request to the agency by the North two days ago.

…[T]he North Koreans “also informed IAEA inspectors that they plan to introduce nuclear material to the reprocessing plant in one week’s time. They further stated that from here on, IAEA inspectors will have no further access to the reprocessing plant.”

The inspectors have worked there, living in guest quarters on the site, since July 2007. (Herald Tribune)

ORIGINAL POST: North Korea has formally requested that the IAEA remove its seals and surveilance equipment from the Yongbyon processing facility. According to the Associated Press:

North Korea had said that it was making “thorough preparations” to start up Yongbyon, which it began disabling last year under a now-stalled disarmament-for-aid deal.

“Some equipment previously removed by the DPRK during the disablement process has been brought back” to Yongbyon, ElBaradei told the closed meeting in comments made available to reporters. DPRK is the abbreviation of North Korea’s official name, the Democratic People’s Republic of Korea.

While the reactor remains shut down, “this morning, the DPRK authorities asked the agency’s inspectors to remove seals and surveillance equipment,” he said (Associated Press).

According to Bloomberg, the South Korean government responded to this news by threatening to cut off promised energy assistance (previously negotiated as a reward to the DPRK for denuclearization progress).

South Korea has so far delivered about 40 percent of a promised 1 million tons of energy aid to North Korea (Bloomberg).

According to the Australian Broadcasting Corporation, South Korea has also delayed shipment of “aid materials” to the DPRK including “steel pipes”.

The US is still maintaining its aid commitments as agreed to under the six-party talks. According to the Choson Ilbo (quoting the Congressional Research Service), the US has already paid the DPRK $20 million to dismantle the Yongbyon facility (famously blown up earlier this year) in addition to:

Spending close to US$1.3 billion on aid to North Korea since 1995, including: approximately 2.5 million tons of food worth over $700 million (since 1995), approximately $150 million on fuel oil provisions, and $400 million on the KEDO light water reactor.

This year the U.S. government plans to donate an additional 500,000 tons of food and an additional $100 million in oil shipments.

The DPRK claims this turnabout is a response to the US government’s failure to remove it from the list of state sponsors of terror (a symbolic gesture as it carries little economic significance). The US claims that the DPRK did not meet the disclosure requirements necessary for it to justify taking such action.

In July 2008, the Congressional Research Service published a paper on the DPRK’s terrorism list removal. Read it here.

Read the full articles below:
(more…)

Posted in Energy, International Aid, International trade, Nuclear | 3 Comments »

Pyongyang publicizes economic situation on 60th anniversary of the DPRK

Thursday, September 11th, 2008

Institute for Far Eastern Studies (IFES)
NK Brief No. 08-9-9-1
9/9/2008

In order to inform the North Korean public of the current economic situation on the 60th anniversary of the establishment of the Democratic People’s Republic of Korea (Sept. 9), state-run media outlets in the North are reporting on the construction or expansion of factories and facilities in each region of the country.

According to reports by (North) Korean Central Broadcasting, Pyongyang Broadcasting and other North Korea media outlets, three to four production facilities per month began operations through July, and seven facilities opened last month. The news is also reporting that six new facilities have been completed or have begun operations during what little time has passed this month.

It appears that North Korea is concentrating its efforts on expanding production facilities in the mining and metalwork production realm, despite facing difficulties brought on by resource and material shortages. Construction work to increase the Kumduk Mining Enterprise’s mineral conveyance system capacity in Danchon, South Hamyong Province, the heart of the iron and zinc-producing region, was completed at the end of last month, as was the first stage of construction on the refurbishment of the Danchon Mining Equipment Factory. Construction on a new production factory extracting primary elements from coal was completed this month at the Moonpyoung Refinery in Kangwon Province, where gold and other minerals are mined. Authorities are toting the new facilities as “One More Monumental Creation of the Military-First Era.”

North Korean media outlets are also reporting on economic developments affecting food supply to the North Korean population. In the town of Singye, North Hwangae Province, the Singye Sweet Potato Processing Plant, which produces noodles, sweets, and other food products from sweet potatoes, went into production at the beginning of August. It was also reported that in the middle of last month, construction was completed on a computerized meatpacking plant at the Kangseo Pork Processing Facility in Pyongnam. On the third of last month another pig farm in Kanggye, one which Kim Jong Il complemented during an on-site inspection in January, calling it “one more modern livestock facility for Jagang Province,” also began operations.

The Generator No. 1 and the pressure tube at the Wonsan Centennial Power Plant were completed in the middle of last month, and the water flow channel for Generator No. 2 at the Baekdu Mountain Military First Centennial Power Plant and the Pyongnam Military First Centennial Power Plant were completed at the beginning of this month.

In reporting the completion of power plant construction projects, the media announced that they “would be able to contribute to the improvement of the lives of the people and the normalization of factory and enterprise production.”

Posted in Electricity, Energy, Food, Light Industry, Manufacturing, Mining/Minerals | Comments Closed

Download glitch fixed: North Korea Google Earth (version 11)

Thursday, August 14th, 2008

The most authoritative map of North Korea on Google Earth
Download it here

This map covers North Korea’s agriculture, aviation, cultural locations, markets, manufacturing facilities, railroad, energy infrastructure, politics, sports venues, military establishments, religious facilities, leisure destinations, and national parks. It is continually expanding and undergoing revisions. This is the eleventh version.

Additions include: Mt. Paegun’s Ryonghung Temple and resort homes, Pyongyang’s Chongryu Restaurant, Swiss Development Agency (former UNDP office), Iranian Embassy, White Tiger Art Studio, KITC Store, Kumgangsan Store, Pyongyang Fried Chicken Restaurant, Kilju’s Pulp Factory (Paper), Kim Chaek Steel Mill, Chongjin Munitions Factory, Poogin Coal Mine, Ryongwun-ri cooperative farm, Thonggun Pavilion (Uiju), Chinju Temple (Yongbyon), Kim il Sung Revolutionary Museum (Pyongsong), Hamhung Zoo, Rajin electrified perimeter fence, Pyongsong market (North Korea’s largest), Sakju Recreation Center, Hoeryong Maternity Hospital, Sariwon Suwon reservoir (alleged site of US massacre), Sinpyong Resting Place, 700 Ridges Pavilion, Academy of Science, Hamhung Museum of the Revolutionary Activities of Comrade Kim Il Sung, South Hamgyong House of Culture, Hamhung Royal Villa, Pork Chop Hill, and Pyongyang’s Olympic torch route. Additional thanks go to Martyn Williams for expanding the electricity grid, particularly in Samjiyon, and various others who have contributed time improving this project since its launch.

Disclaimer: I cannot vouch for the authenticity of many locations since I have not seen or been to them, but great efforts have been made to check for authenticity. These efforts include pouring over books, maps, conducting interviews, and keeping up with other peoples’ discoveries. In many cases, I have posted sources, though not for all. This is a thorough compilation of lots of material, but I will leave it up to the reader to make up their own minds as to what they see. I cannot catch everything and I welcome contributions. Additionally, this file is getting large and may take some time to load.

Posted in Advertising, Agriculture, Architecture, Art, Automobiles, Aviation, Banking, Biotech, Cell phones, Central Broadcasting Station, Coal, Committee for Cultural Relations with Foreign Countries, Communications, Computing/IT, Construction, Dams/hydro, Demographics, Domestic publication, Education, Electricity, Energy, Environmental protection, Film, Finance, Food, Football (soccer), Foreign direct investment, Forestry, Gambling, Gasoline, General markets (FMR: Farmers Market), Golf, Google Earth, Health care, Hoteling, Hwanggumphyong and Wihwado Economic Zones (Sinuiju), Intranet, Joint Ventures, Kaesong Industrial Complex (KIC), Kim Il Sung University, Korean Buddhist Association, Labor conditions/wages, Leisure, Library, Light Industry, Lumber, Mansu Art Studio, Manufacturing, Mass games, Maternity Hospital, Military, Mining/Minerals, Ministry of foreign Affairs, Ministry of Foreign Trade, Ministry of People’s Armed Forces, Ministry of Post and Telecommunications, Ministry of Public Health, Mt. Kumgang Tourist Special Zone, Musan Mine, Nuclear, Oil, Phoenix Commerical Ventures, Pyongyang Embroidery Institute, Pyongyang Film Studio, Pyongyang International Information Center of New Techn, Pyongyang International Trade Fair, Pyongyang Metro, Pyongyang University of Medicine, Radio, Railways, Rason Economic and Trade Zone (Rajin-Sonbong), Real estate, Religion, Restaurants, Sea shipping, Sports, Steel, Supreme Peoples Assembly, Tourism, Transportation, Wind | 6 Comments »

South Korea energy assitance to DPRK

Tuesday, August 12th, 2008

Despite tensions between North and South Korean this year, South Korea is still delivering promised energy aid to the North:

Under a six-nation accord signed last year, South Korea has started delivering energy assistance to North Korea.

This week’s shipment included 600 tons of round steel bars.

Seoul has so far provided assistance worth 124,000 tons of heavy fuel oil.

Read the full story here:
South Korea supplies the North with energy
Birmingham Star
08/08/08

Posted in Energy, Foreign aid statistics, International Aid, Oil, South Korea | Comments Closed

Interview with Ken Frost, CFO, Phoenix Commerical Ventures

Monday, July 28th, 2008

Interview Blog, Germany
(click here for all their North Korea-related interviews)

“Phoenix Commercial Ventures Ltd is a venture capital company that offers investors business and investment opportunities in the DPRK” – Interview with Ken Frost (CFO of Phoenix)

Klaus-Martin Meyer: Mr. Frost, you are member of the Board of Phoenix Commercial Ventures Ltd, a company that offers investors business and investment opportunities in the Democratic People’s Republic of Korea (DPRK) otherwise known as North Korea. Would you mind introducing yourself and your company as well to our readers?

Ken Frost: Phoenix Commercial Ventures Ltd is a venture capital company that offers investors business and investment opportunities in the DPRK, enabling them to take advantage of the economic reforms that are taking place there.

Phoenix is owned and run by four experienced professionals, who are based in London, Paris and the DPRK. The Board has between them many years of international business experience, and an invaluable network of well placed contacts. Phoenix offers a unique service, by being able to offer direct access to the DPRK.

Phoenix Commercial Ventures Ltd specialises in project finance in the DPRK. As is well known, the business environment is difficult, and the company targets very specific investment projects; these are small enough to manage and have the capacity to generate foreign currency, either through export or import substitution.

Phoenix Commercial Ventures Ltd maintains an office in Pyongyang, almost the only European company to do so, and operates with the following specific aims:

• Identify commercially viable investment projects in the DPRK, on a case by case basis
• Identify reliable local partners for all forms of business in the DPRK, either trade or investment
• Seek overseas investment sources for such projects
• Minimise the risk in such projects, by taking responsibility for supervision of the local set-up procedures and management of the projects

The Board of Phoenix Commercial Ventures Ltd consists of nationals of the UK, France and the DPRK. The European flavour is enhanced by the fact that most of the counterparties and suppliers in the various projects are also European, and the DPRK government views Phoenix Commercial Ventures as a prime conduit for European business and investment in the DPRK.

One of the directors of Phoenix Commercial Ventures is also General Manager and CEO of the Daedong Credit Bank, the only western-invested foreign bank in the DPRK. Based in Pyongyang, this is a 70-30 joint venture between a UK financial management company based in Hong Kong and the Korea Daesong Bank, one of the main DPRK banks.

Phoenix Commercial Ventures is unique in having this connection with a reliable, locally based financial institution. The synergy benefits include a wider exposure to local business contacts in differing fields; as well as an additional degree of control, made possible by the fact that the various joint venture projects have to maintain their accounts with the bank.

We have a number of projects within DPRK, including two 50/50 joint ventures:

– Hana Electronics JVC, a consumer electronics company now ranked as one of the top three best performing joint ventures in DPRK, as assessed by the Ministry of Finance.

– Sinji JVC, whose main areas of operations are retail, software and bonded processing.

Full details about our company can be found on our website www.pcvltd.com

I am the CFO of Phoenix and am a chartered accountant with over twenty years international experience of FMCG industries, consumer electronics, rough diamond distribution and the Internet. I have worked in KPMG, Philips Electronics, De Beers and run my own Internet company. I am also a Scholar on Gerson Lehrman Group Councils.

In November 2007 I reached the finals of Accountant of the Year held by the Association of International Accountants at the President’s Awards Dinner 2007. This award is designed to recognise organisations’ accountancy stars.

In January 2007 I was awarded, based on recommendations from fellow members of the ICAEW, a New Year’s Honour by AccountingWeb. The award was for my services to the accountancy profession in opposing the merger of the ICAEW with other accountancy bodies.

In November 2006 I was awarded an honorary fellowship of the Institute of Professional Financial Managers (IPFM), for my services to the accountancy profession.

In January 2006 Accountancy Age placed me on their Financial Power List for 2006. I was 11th on their list of the top 50 of “The Ones To Watch”. The list identified the “most influential names to look out for” in the world of finance for 2006.

Klaus-Martin Meyer: We read on your website “offers investors business and investment opportunities in the Democratic People’s Republic of Korea (DPRK), enabling them to take advantage of the economic reforms that are taking place there.” Can you tell us what kind of opportunities this could be?

Ken Frost:There are three main areas of investment opportunities open to investors, which we can facilitate within the DPRK:

1 Small scale investments ($500K or less) yielding good levels of return (20% or more).

These investment opportunities are in local production (consumer goods, bonded processing, software etc) for domestic market consumption and export. These utilise the advantages that DPRK has over all the other countries in the region namely:

– 99% literacy
– skilled/disciplined/hard working workforce
– well educated workforce, many speak a good level of English
– lowest wage rates in the region

Phoenix has a number of opportunities that it can offer investors in this area; eg bonded processing, consumer manufacturing, clothing manufacturing and software development.

2 Natural resources

DPRK has proven abundant natural resources worth several trillion dollars; eg coal, gold, copper, titanium, lead, zinc, nephelite, nickel, magnesia, graphite etc.

The investment required would be of a higher order than the small scale investments above, $1M plus. The money would be used to bring existing mines back to production, by pumping out flood water and renewing worn out capital equipment.

Phoenix has, via its working relationship with CPEEC, a number or opportunities in the natural resource sector that it can offer genuine investors.

3 Infrastructure development

Clearly investment in infrastructure is the costliest form of investment. However, given the dilapidated state of the roads, railways, ports, electricity grid etc it is necessary if the economy is to be revived.

DPRK also has a keen interest in infrastructure development focussed on green/renewable energy areas.

Phoenix has on it books a profitable renewable energy project that would suit a serious, well financed and experienced green energy investor.

The DPRK is the final economic frontier and is a “green field” site. Its primary advantages are:

– Location (physical position between Russia, South Korea, China and in AP)
– Location (historical, all the major players now want to move forward)
– Location (resources, it has abundant rich resources both mineral and human capital – high literacy, well educated etc)

Klaus-Martin Meyer: What are the main differences between your company and a conventional venture capital company that is investing for example in internet our biotech companies?

Ken Frost: Companies such as those you mention are industry-specific, whereas ours is location-specific. Our company is relevant to people who might want to invest in the DPRK. We work in the DPRK and have a physical presence in the DPRK, other “conventional” venture capital companies do not.

Klaus-Martin Meyer: Are there any differences to other investment companies?

Ken Frost: We apply the same principles to potential investments as any other professional investment company, we look at:

– the risk
– the returns
– the quality of the local management
– the quality of the business plan
– the size of investment
– the share offered for that investment etc

We also pay very close attention to corporate governance issues such as; financial reporting, management structure and ethics etc. We have a code of conduct which can be seen on our website.

Phoenix Commercial Ventures Ltd is committed to being a responsible corporate citizen and to the pursuit of a sustainable future, both economic and social.

Phoenix Commercial Ventures Ltd adheres to three fundamental ethical principles:

– Integrity
– Competence
– Courtesy

To this end Phoenix Commercial Ventures Ltd has developed a Code of Conduct, which sets out to ensure that these principles are followed in its operations. The Code of Conduct governs Phoenix’s business decisions and actions. The Code applies equally to corporate actions, and to the behaviour of individual employees when conducting business on behalf of Phoenix.

We work very hard with our local management teams and business partners to ensure that international standards re reporting, corporate governance and ethics are understood and followed.

Klaus-Martin Meyer: What are your plans for the company’s future? How do you see Phoenix Commercial Ventures in five years time?

We see the coming period for Phoenix as that of being continued growth.

In our view there will be a major upswing in economic relations between the DPRK and other countries over the coming months/years. Phoenix Commercial Ventures is uniquely placed to take advantage of, and to respond to, that upswing.

We are one of the very few organisations to have made successful joint ventures in the DPRK. We are also one of the very few organisations to have people with many years’ experience, and cultural sensitivity, actually on the ground in Pyongyang. You cannot run a business by email!

Posted in Automobiles, Banking, Central Bank, Copper, Daedong Credit Bank, Daesong Group, Economic reform, Electricity, Energy, Environmental protection, Finance, Foreign direct investment, Gold, Hana Electronics Company, Joint Ventures, Light Industry, Manufacturing, Mining/Minerals, Phoenix Commerical Ventures, Railways, Sea shipping, Sini JVC, Transportation | Comments Closed

North Korean Economy Watch