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ROK government lightens Kumgang loan burden

Wednesday, March 1st, 2006

The government is being criticized for easing conditions on loans funded from the inter-Korean cooperation funds that were given to the Korea National Tourism Organization for Mount Kumgang tour projects. On Monday, the government decided to lower the interest rate on a loan given to the organization in June 2001 by 2 percent.

The organization originally received a loan of 90 billion won ($93.7 million) with an interest rate of 4 percent and repayment over a five-year period, after a three-year deferment. However, the payback period has now been extended to 10 years at an interest rate of 2 percent.

The Unification Ministry said yesterday that the organization asked the government to make changes to the conditions of the loan, arguing that under the tours’ current profit structure it was unable to repay the funds. This request was acceded to.

The ministry said that after an accounting firm had reassessed the loan, the decision was made with all relevant government organizations involved agreeing to make changes to its conditions.

Nevertheless, the argument that the profit level is too low for the organization to make its payments seems weak as the number of tourists taking trips to the North’s Mount Kumgang has increased over the years.

Only 57,000 people made the trip in the year the loan was granted but by last year the number of visitors had increased to 301,000.

The organization paid the 90 billion won to Hyundai for operating rights to the Kumgang hot springs and resort. Hyundai made a payment of 29 billion won to the North, for which it had been in arrears.

In response, some civic groups argued that public funds should not be used to finance such projects in the North.

Posted in International trade, Mt. Kumgang Tourist Special Zone, South Korea | Comments Closed

Japanese-Korean remittances

Tuesday, February 28th, 2006

Apparently the Japanes Post Office (who also holds many personal savings accounts) sends remittances from its depositors to North Korea.

In 2003, there were 503
In 2004, there were 506

Posted in Chongryun, International trade, Japan | Comments Closed

Want to Study/Work/Visit the DPRK?

Monday, February 27th, 2006

I Updated the information on Kimsoft:

The DPRK UN Mission in New York does not issue any visas at all under an agreement reached with the United States. Visas to Americans are issued by the DPRK Embassy in Beijing. You may contact Mr. Kim Ryong Hwan (A representative in Beijing of the Korea International Travel Company, Fax 011-86-1-532-4862) for visa or travel information.
Non-Koreans can reach Pyongyang by train or air by way of Moscow or Beijing. Some Japanese and Koreans resident in Japan are allowed to come to Wonsan by ship.

1. Short-term teaching or other works in N Korea: A letter of recommendation or introduction from Graham Bell, the Eugene Bell Foundation, the Carter Center or a Christian church organization may enhance the chances. If you are a Korean compatriot, all you have to do is either to make a stopover at the UN Mission and identify yourself or to send a letter to the Overseas Compatriots Aid Committee in Pyongyang.

A. Contact the DPRK New York UN Mission by email or smail or phone or Fax or go to New York to visit the mission:

Permanent Representative of the Democratic People’s Republic of Korea to the United Nations
515 East 72nd Street, 38-F, New York, N.Y. 10021
Telephone: (212) 972-3106
FAX (212) 972-3154

B. Write a letter direct to his or her target university or institution in North Korea, offering to teach English, history, engineering and etc. Upon receiving a positive response or letter of invitation, you are to visit the North Korean Embassy in Beijing (Phone: 532-1186 visa section: 532-4148 or 6639).

2. Travel to the DRPK:
*Koryo Tours: http://www.koryotours.com/
*I visited with the Korean Friendship Association: http://www.korea-dpr.com/

A. AIR KORYO, Flughafen Schoenefeld, D-12521, Berlin, Germany: Fax: +49 (0) 30 – 60 91 36 65.
B. Korea Publications Exchange Association, Ri Chang Sik, Fax: +850-2-3-814 632.
C. National Directorate of Tourism, Central District, Pyongyang, DPR Korea Tel: (2) 381 7201. Fax: (2) 381 7607.
D. Kumgangsan International Tourist Company, Central District, Pyongyang, DPR Korea, Tel: (2) 814 284. Fax: (2) 814 622.
E. General Delegation of the DPRK, 104 boulevard Bineau, 92200 Neuilly-sur-Seine, France, Tel: (1) 47 45 17 97. Fax: (1) 47 38 12 50. Telex: 615021F.
F. Regent Holidays UK, 15 John Street, Bristol BS1 2HR, Tel: (0117) 921 1711. Fax: (0117) 925 4866.
G. David Hunter — Edwards and Hargreaves Holidays Ltd, Portland House, 1 Coventry Road, Market Harborough, Leicestershire, England LE7 7HG, Fax 01858 433427 Tel: 01858 432123
H. Mr. Pak Gyong Nam, Manager — SAM Travel Service, Korea International Travel Company, Central District, Pyongyang, DPR of Korea, Tel: 850-2-817201, Telex: 5998 RHS KP, Fax: 850-2-817607
I. North Asia Consultancy & Services Co, Ltd is in a position to organise business missions into NK for European businessmen.NACS is organising on a regular basis sectorial fact finding missions to North Korea on behalf of the European Union Chamber of Commerce in (South) Korea.

3. Information:
The European Union Chamber of Commerce : Tel : 822-543-9301~3; Fax : 822-543-9304; E-Mail : [email protected]

Young Koreans United of the USA, P.O. Box 12177, Washington, DC 20005-0677, tel. 202-387-2420

International Korean Alliance for Peace and Democracy, 2530 1/2 South Crenshaw Blvd., Los Angeles, CA 90016, tel. 213-733-7785.

Travel Time email, 1 Hallidie Plaza, Suite 406, San Francisco, CA 94102, USA ; phone +1-415-677-0799, fax +1-415-391-1856, 1-800-956-9327 (1-800-9-LOW-FARE) toll-free in the USA

Chugai (Phone: 81-3-3835-3654, Fax: 81-3-3835-3690) based in Tokyo. It is affiliated with Chongryun, the General Association of Korean Residents in Japan. It arranges package tours to Pyongyang every month.

The Kumgangsan International Group ( email or Web Page) handles investments in N Korea. This group also makes travel arrangements. It is operated by Ms. Park Kyung Youhn, a Korean-American woman, who is not associated with Chongryon.

Ryohaengsa Korea International, Pyongyang, Korea; Tel. (850) 2-817 201, Fax (850) 2-817 607

The DPRK Committee for the Promotion of External Economic Cooperation, Jungsongdong, Central District, Pyongyang. FAX 011-850-2-3814664 and Tel: 011-850-3818111,2,3 & 4.

4. Research and Other Scholarly Works: At present, no institution, center, school or university in the DPRK is ready for “official exchanges” with American counterparts. Such exchanges will likely come only after the two ‘enemy’ countries have signed a peace treaty and established diplomatic relations. However, Kim Il Sung University has established a sister rela tionship with Seton Hall University. American scholars and authors are allowed to examine North Korean archives on an individual basis. Contact the Society for Cultural Relations with Foreign Countries, Kim Il Sung University, the Party Revolutionaly History Institute or the Asia-Pacific Peace C ommittee.

5. Check with the DPRK UN Mission for the phone and fax number of other agencies: The DPRK UN Mission is not the only gate to North Korea. Americans and other foreigners are being invited to visit the DPRK by way of many other organizations in the States, Japan and other parts of the world.

North Koreans are being invited to visit the United States not necessarily through the good offices of the New York mission. Any American host can establish a direct access to North Korea by mail, fax, and phone or by personal courier.

Warning: There are ‘horror’ stories of bureaucratic bungling by the DPRK Beijing Embassy vis-à-vis invited American guests. They are partly true and partly untrue. A possible explanation is a poor communication between the prospective visitor, th e UN mission and the DPRK. The DPRK Embassy in Beijing makes it the iron rule not to issue a visa even to a carrier of a written invitation from a DPRK organization unless it has been instructed to do so by the Foreign Office in Pyongyang.

The prospective visitor is advised to make it double sure with the host organization or the UN mission that the host organization has arranged for issue of a visa through the Foreign Office and that a visa is ready in Beijing (Phone: 011-86-1-6532-1186 or 1189, FAX: 011-86-1-6532-6056. Visa Section: 011-86-1-6532-4148 or -6639).

Posted in Foreign direct investment, International trade, Tourism, USA | 2 Comments »

DPRK agrees to Chinese aid based on market principles

Saturday, February 25th, 2006

Kyodo News:

China has reached an agreement with North Korea to let the private sector, rather than the government, take the initiative in providing economic aid to Pyongyang and to respect market principles, sources familiar with China-North Korea relations said Saturday. According to the sources, the market-based approach is contained in a cooperation agreement in economy and technology signed by the two countries when Chinese President Hu Jintao visited North Korea in late October.

One of the objectives of North Korean leader Kim Jong Il’s visit to China in January was to confirm this approach, the sources said.

The sources also said a cooperation agreement in economy and technology signed by a Chinese delegation led by Vice Premier Wu Yi during their visit to North Korea in early October is separate from the agreement with the same name signed during Hu’s visit later that month.

The earlier agreement calls on China to continue providing materials and technological cooperation for the Da’an Friendship Glass Factory near Pyongyang. It also allows North Korea to export glass products made at the factory.

Posted in China, Economic reform, Foreign direct investment, International trade | Comments Closed

Thomas J. Payne Market Development

Sunday, February 19th, 2006

From their website:

Tom J. Payne frequently travels to the north of China to Liaoning Province and the commercial region of the DPRK. Specifically, we are active in the Dandong region which is the main city bordering on North Korea. This allows us a close up view and quick jaunts into the Worker’s paradise. Our friends at the Liaoning Import Export Corporation conduct around 90 percent of their business with the North, and trade food, for steel. They operate duty free stores and restaurants in the capital city and even sell automobiles to VIP communist leaders. Here are just a few images from the frontier. Give Tom a call if you want to learn more about what is really going on in North Korea. [email protected] (Although we are not allowed to do anything, there, we certainly know people who are!) Until last week! The doors are now open, and we will be presenting information on doing business with the Hermit Kingdom!

He ansers the following quesitons:

What is the business climate like?
Do the North Koreans Pay their Bills?
Are there small business opportunities?
Are there private businesses operating in the DPRK?
What about all of the aid organizations etc…
What can a foreigner source in the DPRK?
What do the North Koreans Need?
Will the political climate change?
How does a westerner survive there?
Can you access the internet from there?

Posted in International trade, Thomas Payne | Comments Closed

Macau bank drops N Korean clients

Thursday, February 16th, 2006

According to the BBC:

A Macau bank accused by the US of laundering money for North Korea has agreed to dissolve all links with the communist state.

The US Treasury said Banco Delta Asia had acted as a “willing pawn” for North Korea to channel money through Macau.

Macau’s authorities took control of the bank last year after the fraud claims led to a run on its deposits. Customers withdrew 10% of total deposits after the allegations surfaced.

Officials said the bank would end ties with North Korean clients and tighten its anti-money laundering procedures.

Posted in Banking, China, Illicit activities, International trade, USA | Comments Closed

The Times, They Are ‘a Changin’

Wednesday, February 15th, 2006

A New report, Hungry for Peace: International Security, Humanitarian Assistance, and Social Change in North Korea, compiled by Hazel Smith, a former adviser to U.N. humanitarian agencies who lived in North Korea for two years, claims that the right kinds of aid could have the effect of opening up the country…becuse the place has already opened up quite a bit.

This view contrases with this one, which says that outside efforts to leverage foreign aid to gain concessions will fail because China and South Korea provide all sorts of assistance that requires no quid pro quo.

From the Press Release:

“There are too many analyses of North Korea that assume that this is a society that never changes and that it’s monolithic. The influx of hundreds of aid workers in the late 1990s, followed by South Korean businessmen, has made old images of the North outdated. Massive social change resulted from the famine that killed a million people made a bankrupt socialist government unable to stop the marketization of the economy.”

The bottom-up erosion of rigid social controls allowed junior officials and some of the population of 23 million people to become exposed to United Nations and other aid workers, diplomatic missions and South Koreans, Smith told Reuters.

While the hard-line communist government of leader Kim Jong-il has resisted any kind of political liberalization, she said, “party officials at the middle level no longer pay so much attention to what the state tells them.”

“There’s a big fragmentation in the country these days,” Smith said, describing a fight between officials who want to restore a command economy and those who think the North must follow China in adopting a market economy.

The more senior leaders believe they can use South Korean and Chinese aid, and maintain North Korea’s political system in a federation with the South. Smith says this is impossible.

But below them are younger, pragmatic technocrats who are “very aware that the regime as it stands is not sustainable and admire what South Korea has done,” she said.

The competition between economic modernizers and old guard security officials gives potential leverage for the United States and other countries at the six-party talks aimed at convincing North Korea to abandon its nuclear weapons.

“There are avenues for negotiation because there are economic outcomes which the North Koreans want,” said Smith.

Dangling economic incentives would help modernizers win, Smith said. South Korea’s modest investments to support nascent civil society and bring North Korea into the outside world was “the best of all the feasible options”.

South Koreans who deal with North Korea “know this is not a very militarily strong country — it’s a weak country, it’s very vulnerable and its people are fed up with the past decade and a half of poverty,” said Smith.

Posted in Economic reform, International trade | Comments Closed

China Trade Boosting DPRK GNP

Tuesday, February 14th, 2006

According to the Asia Times:

2/14/06

SEOUL – North Korea’s economy would have posted minus growth if it had not been for its rapidly growing trade with China, the South Korean central bank’s research unit said Monday.

North Korea-China trade has been rising by an average 30% every year since 2000, boosting the communist state’s economic growth by 3.5% every year, according to the Institute for Monetary and Economic Research.

As of 2004, the bilateral trade accounted for 39% of the North’s total trading volume, and also made up 77% of annual increase in the North’s trade volume, the institute said. North Korea’s economic growth could have dipped below zero if it were not for such a sharp increase in its trade with China, the institute said. Such a sharp increase in bilateral trade is the result of North Korea’s low production capacity and cheap prices of Chinese goods, it said.

Geographical proximity also boosted the trade. The fast growth of the Chinese economy will result in increased trade with North Korea and induce more market elements in the Stalinist state in the coming years, the institute predicted.

As a result, the inclusion of China in South Korea’s economic cooperation with the North will be one of the options that the government could consider in its policy, it added.

Posted in China, International trade | Comments Closed

Japan threatens to tighten the screws (again)

Monday, February 13th, 2006

According to Yahoo News:

Highlights:

Kyodo) _ Japan plans to apply regulations tightly to issues related to North Korea to put pressure on Pyongyang after bilateral talks made little headway on the abduction and other bilateral issues — without imposing economic sanctions for the time being, government sources said Monday.

The government has urged municipalities which provide tax breaks for a pro-North Korean organization’s facilities to consider whether such preferential treatment is appropriate, according to Abe.

The government may also study tightening customs screening of travelers who take souvenirs back to North Korea under a system to allow simplified customs checks for souvenirs worth up to 300,000 yen, the sources said.

Posted in International trade, Japan | Comments Closed

DPRK conterfitting cigarettes?

Monday, February 6th, 2006

According to Time Magazine:

A confidential report compiled by investigators working for a coalition of major U.S., European and Japanese tobacco companies indicates that North Korea has developed a highly lucrative source of hard currency: counterfeit cigarettes. The report dated June 29, 2005, offers a unique glimpse of the scale and sophistication of North Korea’s illicit-cigarette industry, which has allegedly counterfeited a vast array of brands—from Marlboro to Davidoff. The report estimates that production from 10 to 12 North Korean factories in the counterfeiting business may total 41 billion cigarettes a year, generating annual revenues of $520 million to $720 million. It’s not clear how much of this money flows to the regime of dictator Kim Jong Il, whether in duties or payments “for protection,” but the report speculates that its share of the profits may amount to $80 million to $160 million a year. That would be quite a windfall at a time when the North’s economy is reeling and the U.S. is trying to pressure Kim to abandon his nuclear-weapons program by cracking down on his regime’s income from business exploits as diverse as trafficking drugs and counterfeiting $100 bills.

Pyongyang has consistently dismissed U.S. allegations that it’s engaged in such illegal activities. But according to the report, some of these cigarette factories are directly owned by North Korea’s military and the internal-security service, giving the state “total control” over these operations. In other cases, says the report, the North’s contribution is primarily to provide a “safe haven” to factories run by overseas counterfeiting syndicates. Three of the factories that are said to be located in the Rajin area on the northeast coast of North Korea are allegedly run or financed by crime syndicates from Taiwan. One of these factories, equipped with second-hand equipment from China, has allegedly counterfeited such brands as Mild Seven, Dunhill and Benson & Hedges. According to the report, another factory in Rajin employed 120 people and was run by Chinese supervisors and technicians; North Korean officials were allegedly paid a “tax” on the factory’s cigarettes, which were then exported in fishing vessels owned by a Taiwan crime syndicate. Indeed, the report claims that a chief attraction of running such a business in North Korea is that the “regime’s willingness to allow dedicated, deep-sea smuggling vessels to use its ports provides the gangs with a secure delivery channel.”

Posted in Counterfeiting, Illicit activities, International trade, Rason Economic and Trade Zone (Rajin-Sonbong), Tobacco | Comments Closed

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