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ROK government planning to resume construction and relax sanctions in Kaesong zone

Thursday, October 20th, 2011

Pictured above (Google Earth): The towns mentioned in the article below from which the Kaesong Industrial Zone could draw more labor: Pongchon (봉천), Kumchon (금천), and Phyongsan (평산).

Institute for Far Eastern Studies (IFES)
2011-10-20

According to South Korea’s Ministry of Unification (MOU), the “May 24 Sanctions” that went into effect after the sinking of the naval boat Cheonan was relaxed and began to permit the resumption of construction of businesses in the Kaesong Industrial Complex (KIC). In addition, plans to build fire stations and emergency medical facilities in the area are also currently underway.

After South Korean Grand National Party chairman Hong Jun-pyo visited KIC on September 30, 2011, the ROK government has reached the following decisions: 1) to allow the resumption of halted factory constructions; 2) to build a fire station and emergency medical facility; 3) to resume repair work for commuting roads for KIC employees; and 4) to extend the operations of commuter buses.

This means seven companies that received permits in the past to begin construction but stopped after the sanctions went into effect would be able to resume the halted construction projects.

According to the Ministry of Unification, the seven companies include three metal and machinery, three textile, and one electronic factories, taking up a total area of 103,527 square meters. The total site of production facilities of stage 1 businesses in the KIC reaches 2,171,900 square meters, in which the currently operating 123 companies take up 783,471 square meters. With the sanctions lifted, the total area of businesses in operation will reach 885,950 square meters.

In addition, five companies awaiting construction for expansion will have to wait a little longer. The authorities announced to discuss this issue at a later date, looking positively on their construction to resume shortly as well.

Also the MOU announced to push forward with the establishment of fire stations and emergency medical facilities, “to protect the properties and health of businesses and employees of the KIC. The plans to break ground for fire station will begin in mid-November and is expected to be completed by late next year.”

The layout for the KIC fire station was completed in December 2009 and 3.3 billion USD has been budgeted to fund the construction. The station will be constructed on a steel frame on a 3,305 square-meter lot with the total floor space to be around 2,182 square meters.

The Kaesong Management Committee has been operating a “fire/police station” from April 2005. But with occurrences of accidental fires since last winter, it has reinforced the number of fire engines and manpower – currently at a total of eight fire trucks and 36 fire fighters.

Medical facilities in the KIC will also be completed by the end of 2012 once the construction begins early next year. About 3 billion USD is set for this project.

Currently at the KIC, Green Doctor’s Cooperation Hospital is in charge of providing medical and health services in the KIC, with South Korea Green Doctor’s Kaesong Hospital treating the South Korean employees and North Korean Comprehensive Clinic treating the North Korean employees exclusively. The South Korea Green Doctor’s Kaesong Hospital is currently operated by volunteers at a clinic level. The hospital was in the process of improving the facilities to more than ten beds. However, this project was halted after the May 24 sanctions went in effect.

On another note, the MOU also announced that maintenance work for the road connecting Kaesong City to the KIC would begin. The road is normally used by North Korean employees of the KIC. It was also announced that the number and operation of commuter buses would increase to help with the commute. The buses operate in the 20 km radius; the plan is to increase that to 40 km. Since September 2010, the number of buses increased to 400.

There are plans to extend the service to cover the areas of Kumchon, Bongchon, and Pyongsang. However, the roads to these areas are unpaved and extension of transportation services to these areas will require negotiations with the North Korean authorities.

Although these measures will alleviate some of the problems faced by the businesses in the KIC, the MOU still stands firm on its position that North Korea must take responsibility and make formal apology for the Cheonan incident in order for a fundamental resolution of the situation to occur.

Posted in Automobiles, Construction, Economic reform, Foreign direct investment, Health care, Institute for Far Eastern Studies, Kaesong Industrial Complex (KIC), RoK Ministry of Unification, South Korea, Special Economic Zones (Established before 2013), Transportation | 2 Comments »

Some interesting recent publications and articles

Thursday, October 20th, 2011

1. “Relying on One’s Strength: The Growth of the Private Agriculture in Borderland Areas of North Korea”
Andrei Lankov，Seok Hyang Kim ，Inok Kwa
PDF of the article here

The two decades which followed the collapse of the communist bloc were a period of dramatic social and economic transformation in North Korea. The 1990-2010 period was a time when market economy re-emerged in North Korea where once could be seen as the most perfect example of the Stalinist economic model. The present article deals with one of the major areas of socioeconomic change which, so far, has not been the focus of previous studies. The topic is about the growth of private agricultural activities in North Korea after 1990. This growth constitutes a significant phenomenon which has important social consequences and also is important from a purely economic point of view: it seems that the spontaneous growth of private plots played a major role in the recent improvement of the food situation inside North Korea.

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3. Korea Sharing Movement anti-malarial program (Via Cancor)
Read a PDF of on the project here

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4. What is it like to teach at the Pyongyang University of Science and Technology (PUST)?
Find out from one instructor here. More on PUST here.

Posted in 1990s Famine, Agriculture, Arduous March, Black markets, Disease prevention, Economic reform, Education, Food, General markets (FMR: Farmers Market), Health care, International Aid, Korean Sharing Movement, Ministry of Forestry, Political economy, Pyongyang University of Science and Technology, South Korea | Comments Closed

Orascom plans to offer mobile Internet service in DPRK

Wednesday, October 19th, 2011

Via Geoffrey See at Choson Exchange:

On my last trip to Pyongyang, I had the opportunity to catch up with some Egyptian expatriates from Orascom Telecom Holding over popcorn and whiskey. They were also kind enough to bring our team clubbing into the wee hours of morning.

Orascom Holdings is three companies each headed by a different brother of the Orascom family. Orascom Telecoms is headed by Naguib Sawiris, while the resorts arm Orascom Development is run by Samir Sawiris, and the construction arm Orascom Construction by another brother. All three brothers have stakes in different assets in North Korea, with the infamous Ryuggyong Hotel owned by Samih Sawiris. As of May 2010, when I had met Samih Sawiris in Switzerland, he had yet to visit Pyongyang. Recent pictures from Pyongyang indicate that this has changed.

The most exciting development to us was Orascom’s 3G Internet service which was still under the testing phase. The plan is to roll out this service in the near future, although the service will only be available to resident foreigners in the initial phase. Approval for this service to be provided on a larger-scale to North Korean citizens, in any censored form, has yet to be given although the infrastructure to do so is in place. For foreign residents in Pyongyang, the service could offer cost-savings of up to 60-80 percent over current satellite internet offerings. There is no information on what security trade-off such a service might entail.

We also discussed text advertising and the current mobile service business. While text advertising is possible, there has yet to be approval for the company to run such a service. Currently, handsets cost Euro 50 each and there is a monthly subscription fee of 900 Won (we are not sure how this cost scales with usage). For reference, the unofficial exchange rate has fluctuated around 2500 to 3500 Won to 1 Euro this year.

Click here to see previous posts about Orascom and cell phones in the DPRK.

Posted in Cell phones, Communications, Construction, Email, Hoteling, Internet, Orascom Telecom Holding | Comments Closed

Choson Exchange Update

Thursday, October 13th, 2011

According to Choson Exchange:

In August this year, Choson Exchange, a non-profit focused on economic policy, business and legal knowledge exchange with North Korea (DPR Korea), implemented a study trip for DPRK policymakers to exchange policy ideas and experience in Singapore with policymakers. Thanks to the sponsorship of the Swiss Cooperation Office DPR of Korea, we were able to implement an insightful and engaging series of discussion with participating Koreans. We focused our program on younger Koreans, with 6 of the 7 North Koreans being under 40 years old, out of which 2 were under 30 years old. 3 institutions were represented in the visit, which involved 10 intensive days of meetings and discussions.

In particular, some of the young participants we selected for the program were able to ask astute questions on development issues and coordination among economic agencies. During the post-trip debriefing, participants highlighted specific aspects of Singapore’s economic development experience which they found particularly interesting and relevant for their country. They also gave feedback on policy ideas which they believe could be adapted to their country. Choson Exchange followed up on the discussions with consultations in Pyongyang 5 days after the program ended.

We would like to thank speakers who volunteered their time and experience at this event in their personal capacities. Speakers included:

– The former Chairman of Singapore Airlines, Singapore Stock Exchange, Temasek Holdings, Development Bank of Singapore, Nepture Orient Lines and Permanent Secretary at various Ministries

– The former Minister for Finance and Minister in the Prime Minister’s Office

– The Chief Economist for Bank of America Merrill Lynch in Southeast Asia

– The CEO of Centennial Asia Advisers and former Chief Economist for SocGen Asia-Pacific

– Directors and Economists at various Ministries in Singapore

– Private sector speakers or hosts from McKinsey & Co., Bain & Co., Goldman Sachs and Capital Group

We would also like to thank Member of Parliament Lily Neo for hosting dinners for the visiting delegation.

Posted in Choson Exchange, Education | Comments Closed

Plans for SEZ between China and the DPRK to Come Out at Year’s End

Thursday, October 13th, 2011

Institute for Far Eastern Studies (IFES)
2011-10-5

Dai Yulin, secretary of the Dandong Committee of the Communist Party of China, said in his interview with the China Daily on September 28 that concrete plans for the joint development projects between China and North Korea in the Hwanggumpyong and Rajin-Sonbong regions will be announced at the end of the year.

This past June, Dai stated both countries agreement to jointly develop Hwanggumpyong and Rajin-Sonbong as an economic development zone and reported smooth progress in its plans.

According to Secretary Dai, “The joint management committee between China and North Korea has already been formed to promote the Hamggumpyong development project. Both countries are getting up steam to advance the project.”

In addition Dai explained, “China has secured 10 square kilometers of national land to be used to support the joint development of Hamggumpyong.” He also added, “A think tank comprised of 72 experts was also established to advise and buttress the project.”

When DPRK Cabinet Premier Choe Yong Rim visited China last month, Dai commented, “Choe’s visit to China is underlined with North Korea’s strong interest in economic reform. All the high level officials in the economic sectors accompanied him on the trip.”

While visiting China for five days, Choe met with Premier Wen Jiabao and expressed strong motivation for strengthening trade and cooperation with China, especially to improve its infrastructure. He stated, “For those Chinese companies investing in North Korea, we will provide special accommodations to encourage more investments.” In response, Wen Jiabao commented, “China will do all it can to support North Korea, so that they may seek development method most appropriate for them.”

After the meeting between the two top officials, the two nations came to an agreement to cooperate in trade, investment, and infrastructure, resources and agriculture development.

Prior to meeting with Wen, Choe visited Lanxing Chemical Industrial Machine Co. After he paid his courtesy visit to President Hu Jintao of China in Beijing, he continued to make economic related visits to Baoshan Steel Group, Bailian Xijiao Goods Purchasing Center, and industrial facilities in Jiangsu Province.

After North Korea designated Hwanggumpyong Island as a free trade zone, China has signed a 50 year-lease agreement to develop the island. Despite being a “joint development” in name, in actuality, China has the exclusive development rights based on Chinese capital.

However, North Korea is requesting for revision of the name to “co-development between China and the DPRK,” a request that China is expressing some uneasiness over. The initial agreement was to “lease Hwanggumpyong Islands to China,” which gave exclusive and autonomous development and management rights to China in the zone.

China has articulated on many occasions the Hwanggumpyong project must be strictly based on market principles and expressed apprehension that Chinese businesses may be unwilling to invest in the area if North Korea continues to pursue to change it as a joint development.

Posted in Cabinet, Economic reform, Foreign direct investment, Hwanggumphyong and Wihwado Economic Zones (Sinuiju), Institute for Far Eastern Studies, Rason Economic and Trade Zone (Rajin-Sonbong), Special Economic Zones (Established before 2013) | Comments Closed

Koryo Bank unveils new debit card

Wednesday, October 12th, 2011

Dr. Bernhard Seliger of the Hanns Seidel Foundation writes in to notify us about the DPRK’s new Koryo Bank (고려은행) debit card.

Click image above to see the front and back of the card.

There is an information flyer available in the DPRK:

According to the translator this is what it says:

Electronic Paying Card (Debit Card)

1. Introduction
* Electronic Paying Card is a cash card with which cardholders can make a payment when buying a merchandise or receiving a service instead of money. We provide the very best customer service, convenience and security.
* Cardholders (including foreign cardholders) can freely make a payment in foreign currency at electronic paying card affiliates.

2. Instruction
*Issuing a card and making a deposit: Card is issued at Koryo card issuing branches. Foreign currency is converted into equivalent North Korean won at a current exchange rate (purchasing price) when cardholders or to-be make a deposit. Issuing a new card is free of charge. Issuing a card, cardholders should register a private password to prevent use of a third party. Using the card cardholders should remember the password to verify identity.

*Procedure of the payment: Card holders are allowed to purchase goods and services within the available balance of the account. Card payment machine verifies identity by crosschecking with the password you enter. If the information is confirmed to be correct upon identification, merchants or acquirers proceed to make the payment. After purchasing, the balance is diminished by the payment.

*Cash Withdrawal: Cardholders who want to withdraw a part or the entire of the remaining balance can be served at Koryo Bank Card issuing branches. The exchange rate is the current selling price.

3. Notice: Cardholders observe the followings as regards to using the card.
*Due to its delicate electronic procedure while the card is to be used, it is recommended not to damage the electronic part of the front.
*Remembering and entering the password correctly is important, since the payment procedure is suspended after 3 times of password errors.
*If the card is destroyed or lost, cardholders should go to the Koryo bank where the card is issued and report the loss and the damage.
*With verifying identity and the balance of the card, a new card is issued.
*Cardholders shall remain liable for the loss incurred by their negligence.

4. Questions and hot line
*When there is a question, a loss, duplication or a lost electronic paying card, Call 462-6315.

Koryo Bank

This is not the only debit card available to foreigners in the DPRK. Dr. Seliger also wrote in earlier this year to inform us of the DPRK’s Narae (나래) debit card.

Here are previous posts on Koryo Bank.

Posted in Banking, Finance, Fiscal & monetary policy, Hanns Seidel Foundation, Koryo Bank | Comments Closed

GPI launching November DPRK business delegation

Wednesday, October 12th, 2011

In an email from Paul Tija:

In the current financial and economic situation, companies face many challenges. They must cut costs, develop new products and find new markets. In these fields, North-Korea could be an interesting option. It is opening its doors to foreign enterprises, its labor costs are the lowest of Asia, and its skilled labor is of high quality. It established free trade zones to attract foreign investors and there are several sectors, including textile industry, agro business, fishing, shipbuilding, logistics, mining/rare metals and Information Technology that can be considered for trade and investment. Most of the North-Korean trade is currently taking place with its neighbours and the amount of production of the South-Korean factories in North-Korea continues to increase. The trade between North-Korea and China jumped from US$1,97 billion in 2007 to $3,47 billion in 2010. A growing number of European firms are exploring the country as well – for example companies currently producing in China, and where the wages are rising fast.

In early November, I will lead a Dutch business mission to North-Korea (already fully booked), but a second mission will take place as well, from 13 – 19 November. Do you want to explore new business opportunities for your company? Then join me on this unique trade and investment mission. The program includes individual matchmaking, company visits, network receptions and dinners. Furthermore, we will meet European business people who are working and living in North-Korea. At the beginning of the tour, in Beijing, we will take part in the seminar: “Doing business with DPRK” (tentative). After the trip to Pyongyang, we will return to Beijing, where you can take a connecting flight or extend your stay in China.

The program of this mission has been attached. In case you are interested to participate: please contact us as soon as possible, so we can start the visa-application procedure. If you are not able to join, then it is also possible for us to do marketresearch and to take part in local meetings in Pyongyang on your behalf.

See the Brochure and itinerary here (PDF).

With best regards, Paul Tjia (director)
GPI Consultancy, P.O. Box 26151, 3002 ED Rotterdam, The Netherlands
E-mail: [email protected]
tel: +31-10-4254172
fax: +31-10-4254317
Website: www.gpic.nl
Twitter: twitter.com/PaulTjia
LinkedIn: nl.linkedin.com/pub/paul-tjia/1/445/958

Posted in Foreign direct investment, GPI Consultancy | Comments Closed

DPRK-China Trade Volume Reaches Record High at 3.1 Billion Dollars

Thursday, September 29th, 2011

Institute for Far Eastern Studies (IFES)
2011-9-29

This year’s trade volume between China and the DPRK reached an all time high.

According to the (South) Korea Trade Investment Promotion Agency, the trade volume between China and North Korea between January and July of 2011 recorded 3.097 billion USD, surpassing last year’s 3.472 billion USD by 88 percent.

This is the second year since 2008 for the yearly trade volume to continue to break the record of the previous year.

During the same period, China exported 1.783 billion USD and imported 1.314 billion USD to North Korea. Compared to the same period last year, exports increased by 53.3 percent while imports increased by 169.2 percent, and its trade surplus decreased by 30.4 percent.

The main exports of China are oil, diesel freight vehicles, nitrogenous fertilizers, and grains while the top imports were anthracites, steel, and non-alloy pig irons.

The total amount of fertilizer North Korea imported between January and June totaled 193,960 tons (equaling about 39.88 million USD), a hike of 91 percent against last year’s 99,588 tons (25.4 million USD).

The price per ton of imported fertilizers was 188 USD for ammonium sulfate fertilizer (164,456 ton) and 346 USD for urea fertilizers (25,577 ton). Last year, 59,110 tons of ammonium sulfate fertilizer and 45,310 tons of urea fertilizer were imported. A drastically higher amount of ammonium sulfate fertilizer was imported this year compared with the previous year, the cause of which is speculated to be either a radical decrease in the fertilizer production in North Korea or an attempt to improve the country’s food production.

The total amount of grains imported from China from January to June totaled 149,173 tons, a boost of 5.5 percent from the previous year. The price of grain per ton went up from 372 USD to 404 USD, a rise of 8.6 percent. The cost of imported grain increased 14.4 percent against last year, an increase from 52.7 million USD to 63.1 million USD.

The grains imported were corn (38.2 percent), flour (37.5 percent), rice (16.9 percent), and bean (7.2 percent). Compared to last year, corn and flour imports rose while rice and bean slightly decreased. This year’s average price per ton of grain was 661 USD for bean, 538 USD for rice, 395 USD for flour, and 304 USD for corn.

Posted in Agriculture, Agriculture statistics, China, Food, Institute for Far Eastern Studies, International trade, Statistics, Trade Statistics | Comments Closed

Pyongyang International Film Festival 2012

Monday, September 26th, 2011

Pictured above (Google Maps): Pyongyang International Cinema Hall, home of the Pyongyang International Film Festival.

Koryo Tours sent out the following press release today:

Dates announced for the 13th Pyongyang International Film Festival – Pyongyang, DRPK (North Korea), 20th – 27th September 2012.

Koryo Tours has been the official Foreign Representative for the biennial Pyongyang International Film Festival since 2002 when they first submitted their film on the North Korean World Cup football team of 1966 The Game of Their Lives to a packed North Korean audience. “It was the first time that the North Koreans had seen just how their fans were received in 1966 – and the first foreign-made documentary about their country to be shown in their country. Myself and director Dan Gordon were pinched by the girls in the hotel restaurant as they wanted us to help get tickets to the best screenings” said Nicholas Bonner, co-producer of the film. “It will be some time before the festival becomes the Cannes of the East but we hope to get one or two film stars for the experience of a lifetime… probably one of the few places they can avoid being mobbed. The motto of the festival is independence, peace and friendship and is a great way of showing locals what is going on in the world of cinema.”

Perhaps the festival’s biggest achievement was the screening of the British Film Bend It Like Beckham at the festival in 2004 (seen by an audience of 12,000 locals) which cleared the path to make it the first western film to be broadcast nationwide on December 26th 2011. “We spoke to Gurinder Chadha, the Director, who was thrilled her film had been seen by a country who just adore football and of course it was the ideal film to show, full of hope – it has become unbelievably popular in the country and a talking point for everyone.

Koryo Tours director Nicholas Bonner is asking for submissions:

“Ealing Studios, The Goethe Institute and various embassies have all presented films but there is always room for more. Romantic comedy and period dramas are popular and we have managed to show films as diverse as Mr. Bean, the Swedish horror comedy Frostbiten to the South African drama Cry, The Beloved Country and UK’s Elizabeth I: The Golden Age.”

Koryo Tours will run an exclusive tour for tourists during the festival and will include screenings of North Korean films such as the classic Flower Girl (very popular in China during the 1970’s), a visit to the North Korean film studio with mock up streets and meeting various North Korean film celebrities.

For further information and images contact: [email protected]
Tel: +86 (10) 6416 7544
Website: www.pyongyanginternationalfilmfestival.com

Posted in Film, Koryo Tours, Tourism | 1 Comment »

Koryo Tours completes first bike tour of DPRK

Friday, September 23rd, 2011

Only weeks after helping launch the DPRK’s first Ultimate Frisbee tournament (see here and here), Koryo Tours launched the first bicycle tour of the DPRK. According to the Telegraph:

Beijing-based Koryo Group took 24 tourists from 10 nations on a 10-day tour of the most isolated nation on Earth.

The cyclists pedalled as far as 30 miles a day, often along dirt tracks in some of the most remote parts of the country, but also journeyed along the 10-lane Youth Hero Highway from Pyongyang to Nampo, on the west coast.

The itinerary is here. The Telegraph has a video of the tour here, and Koryo Tours has posted additional pictures here.

KCNA even gave an “interesting” shout out to the bike tour:

DPRK Directs Effort to Developing Tourism

Pyongyang, September 27 (KCNA) — The DPRK is directing much effort to developing tourism, with an eye to promoting the understanding, harmony, friendship and cooperation among nations and people of the world.

The country joined the United Nations World Tourism Organization (UNWTO) in September Juche 76 (1987) and the Pacific-Asia Tourism Association (PATA) in April 1996.

On September 27, World Tourism Day, Hong In Chol, a department director of the State General Bureau of Tourism, told KCNA:

The number of travel companies and people interested in the DPRK tourism is steadily increasing in Asian and European countries.

In particular, many tourists have visited the DPRK in the period of the grand gymnastic and artistic performance “Arirang” through international air routes and chartered flights from Shanghai, Xi An and Haerbin of China and Kuala Lumpur of Malaysia.

We have travel offices in China, Malaysia and Germany and plan to open such offices in other countries.

The bicycle tourism which took place in the DPRK some time ago under the sponsorship of the “Koryo Tours”, a British tourist agency, was very interesting.

The country’s tourist destinations have taken on a new look under the deep care of the Workers’ Party of Korea and the government, while the project for modernizing the infrastructure of tourism is progressing apace.

We will diversify the tourist program with cultural, sports, bicycle, golf and treatment tourism and improve all services.

Posted in Bicycles, Koryo Tours, Tourism, Transportation | 2 Comments »

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