N Korean footballers arrive in South

September 5th, 2002

BBC
9/5/2002

North Korea’s football team has arrived in South Korea for the first match between the two countries for nearly 10 years.

They will play on Saturday in Seoul’s main stadium – scene of South Korea’s unexpected success in the recent World Cup, when the team reached the semi-finals.

The two teams last met in 1993, when the South won 3-0. The new game comes at a time of tentative moves by the two countries to improve their relations.

In the past two weeks, North Korea has held talks at various levels with the South, Russia and Japan as Pyongyang makes new attempts to widen its links with the outside world.

Symbolic ceremonies

Hours before the North Koreans footballers arrived in the South, there were simultaneous torch-lighting ceremonies in the two countries.

These were held in a symbolic gesture of reconciliation marking North Korea’s participation in the Asian Games, to be held in the southern town of Busan later this month.

In South Korea, seven women dressed as angels lit a torch using sunlight reflected by a mirror at the summit of the country’s highest peak, Halla Mountain, on the southernmost island of Juju.

The North Koreans lit their torch on top of Mount Paekdu, the most sacred place of the country and the birthplace of their leader, Kim Jong-il.

The two torches will unite on the border on Saturday, and then a single torch will travel around South Korea to Busan.

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Breakthrough on North Korea links

August 30th, 2002

BBC
8/30/2002

The two Koreas have agreed to begin work on restoring road and rail links across their troubled border.

The agreement, which followed two days of economic talks in Seoul, is the latest sign that the secretive North is determined to end its diplomatic isolation.

The North has also agreed to receive Japanese Prime Minister Junichiro Koizumi for an historic visit in September.

The two countries have no diplomatic relations and no Japanese prime minister has ever visited.

Mr Koizumi was due to spend one day in the North on 17 September and hold talks with its leader Kim Jong-il.

“I want to discuss directly with him the possibility of restarting efforts to normalize our relations,” Mr Koizumi said.

Japan and South Korea’s eagerness to engage with North Korea appeared to sit at odds with American wariness towards the communist state.

On Thursday, a senior US diplomat warned that North Korea was the world’s leading exporter of ballistic missile technology and repeated President George W Bush’s assertion that it forms part of an “axis of evil”.

Mr Koizumi said he had discussed the visit with both US President George W Bush and South Korean President Kim Dae-jung. A Japanese official said the visit had been under discussion for more than a year.

North-South progress

According to the South Korean version of a joint statement issued on Friday, both sides had agreed to reconnect one railway line by the end of this year and construct a second by early next year.

Importantly, the two sides’ militaries will hold talks before work begins on 18 September.

The 4-kilometer-wide (2.5-mile-wide) demilitarized zone is heavily mined. Military co-operation is seen as a pre-requisite for the transport links, which have been cut since the end of the 1950-53 Korean War, to be restored safely.

South Korea said it had agreed to send 400,000 tonnes and 100,000 tonnes of fertiliser to North Korea on credit as soon as possible.

The North’s command economy has been unable to feed its people for several years and there have been widespread reports of famine.

Mr Koizumi’s proposed visit to North Korea was apparently raised at talks in Pyongyang this week between Japanese and North Korean officials.

Japan and North Korea relations are often tense, especially over Japanese allegations that some of its nationals were kidnapped to train North Korean spies.

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North Korea’s Bankers Study Reform

August 28th, 2002

From the BBC:

North Korea has reportedly sent a delegation of bankers to China to study financial reform.  The eight-strong team from North Korea’s central bank has arrived in the Chinese capital on a three-month study tour, the Financial Times reported.  The bankers’ mission is the latest sign that communist North Korea may be considering fundamental reforms.

An executive of one of China’s top four commercial banks who has met the Korean team as saying they are “very keen to learn”. The Chinese banker added: “But it feels strange for us as we are students of financial reform too. The student has become the teacher.”

The North Korean team is thought to be visiting China’s top four commercial banks – the Bank of China, the Industrial and Commercial Bank of China, Agricultural Bank of China and China Construction Bank.

They have reportedly asked how many customers a bank would need, highlighting the fact that North Korea’s banking system is at a rudimentary stage.

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N Korean ‘defector’ goes home

August 21st, 2002

BBC
8/21/2002

A North Korean engineer who said he was forced to travel to South Korea against his will on a boat with 20 defectors has returned home to the Stalinist state.

Boat engineer Ri Kyong-song, 33, told South Korean officials that he had been detained against his will and wanted to be reunited with his family in the North.

Mr Ri walked back into North Korea on Wednesday, passing through the truce village of Panmunjom inside the Demilitarized Zone separating the two Koreas.

“Long live our great general!” Mr Ri called out as he crossed, referring to the North’s leader Kim Jong-il,

The 20 other North Koreans have sought asylum in the South.

The group had left North Korea by boat on Saturday and spent two days at sea before being intercepted by South Korean maritime officials.

It was the first direct maritime defection between the two Koreas in five years.

Tied up

South Korean officials said Mr Ri had made it clear that he was forced to travel to the South against his will and wanted to join the rest of his family in the North.

He told investigators that he had been imprisoned and tied up on the boat by other families who wanted to defect from the Communist state.

The head of the North Korean Red Cross had urged officials in the South to allow Mr Ri’s swift return on humanitarian grounds.

Both nations still remain technically at war, and share one of the world’s most heavily fortified land frontiers.

But despite the difficulties, the number of North Koreans reaching the South and seeking asylum continues to roughly double each year.

Nearly 600 have defected to the South this year, escaping food shortages and political repression in the North.

Aid groups estimate that tens of thousands of North Koreans are sheltering illegally in China, which shares a porous border with the North.

Beijing does not recognise them as refugees and has tended to send those caught back to North Korea.

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Kim Jong-il rolls into Russia

August 20th, 2002

BBC
8/20/2002

North Korea’s reclusive leader Kim Jong-il has begun a visit to the Russian far east.

The plane-shy leader’s private train crossed the two countries’ border at Khasan where he was met by regional officials as the train’s wheels were changed to fit the Russian gauge.

Mr Kim was accompanied by senior officials including the army’s chief of general staff, Kim Yong Chung.

He is expected to meet Russian President Vladimir Putin in the region’s main city, Vladivostok, on Friday.

Russian officials reported earlier that special care had been taken to ensure the North Korean leader’s train would not snarl up rail traffic in the region after a similar visit last summer caused widespread disruption.

“The railway authorities have… given an assurance that the timetable will be drawn up so that passenger train schedules are not violated,” said Yevgeny Anoshin, a regional official in Vladivostok.

Mr Kim was due to travel on to the defence industry town of Komsomolsk-on-Amur, 900 km (560 miles) to the north, after an hour’s stopover at Khasan. He is expected to visit defence plants there.

The North Korean leader earlier sent a message to Mr Putin in which he talked of the two countries’ relations entering a new phase.

Russian diplomats said the main reason for the visit was for Mr Kim to witness Russia’s experience of economic reforms.

North Korea has recently introduced a number of economic changes, including price and wage hikes. Analysts suspect the measures are designed to lift production and rein in the black market rather than a genuine reform of the state-controlled system.

North Korea has also embarked on a number of new diplomatic initiatives in recent weeks – meeting South Korean officials, planning talks with Japan and offering to host a US delegation.

Correspondents say all Pyongyang’s moves are being scrutinised to see if its often erratic behaviour can be trusted.

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Light from the North?

August 11th, 2002

Time
Donald MacIntyre
8/11/2002

Richard Savage kneels in the rich brown earth of a field on the outskirts of Pyongyang and reverentially spreads out the broad, green leaf of a young paulownia tree. The saplings have been in the ground for only a month but already they are a meter high; the first harvest could take place in just five years. Eyes shaded by his black cowboy hat, the Singaporean native gazes down the rows of juvenile trees, each worth thousands of dollars at maturity, with a satisfied grin. The experimental lumber crop has survived the harsh North Korean winter and is flourishing in the loamy soil. “The paulownia loves this,” he says. Glancing at another leafy plant, a new hybrid, he confides, “We’re going to let the Dear Leader name it.”

Hermit state, international pariah, charter member of the “axis of evil”?North Korea is hardly an obvious place for long-term investments like tree farms. The decrepit Stalinist economy depends on international handouts to prevent widespread starvation. The Dear Leader, strongman Kim Jong Il, runs the country like a medieval fief. But Savage is confident that his $23 million, 20,000 hectare Paulownia plantation south of Pyongyang will pay off. His Singapore-based company, Maxgro Holdings, is investing $5 million in North Korea this year, and he even has plans to build a resort there, complete with a 70-room hotel, horseback riding, trout fishing and all-terrain vehicles. “This is a mega-growth area,” he says. “If you don’t move now, you will have missed the boat.”

Whether Savage has boarded the Titanic remains to be seen, but there are increasing signs that North Korea at last may be opening its barbed-wire gates, economically and diplomatically. Last month, the authoritarian leadership increased food prices, set artificially low by the government, by as much as 50 fold, while increasing miners’ and scientists’ salaries by almost as much. Many observers say the reforms, including the elimination of some manufacturing subsidies, signal that Kim is edging toward a market economy instead of perpetuating a system in which North Koreans rely on virtually free handouts from the government.

Just as intriguing is the sudden burst of sunshine out of Pyongyang diplomats, the normally reclusive North Koreans are now clamoring to talk to Seoul, Tokyo and Washington all at once. Senior North Korean government officials are scheduled to travel to Seoul this week for ministerial-level talks, the first such tete-a-tete in nine months. Says Yim Sung Joon, a senior advisor to South Korea’s President Kim Dae Jung: “This is a very important moment for the two Koreas.”

On the agenda: everything from reunions of separated families to rebuilding a railway across the heavily mined dmz dividing North and South. In a surprise move, Pyongyang has already agreed to send athletes to the Pusan Asian Games next month, the first time North Koreans will take part in an international sporting event in the South. Japanese officials head to Pyongyang next week for talks that will include the awkward issue of Japanese nationals allegedly abducted in the 1970s and ’80s, Japan wants them back before the two countries can normalize relations. Meanwhile, North Korean Foreign Minister Paek Nam Sun met with U.S. Secretary of State Colin Powell for a 15-minute chat on the sidelines of the asean meeting in Brunei two weeks ago, the highest level encounter between the two sides since George W. Bush became President.

Is this the same country whose navy six weeks ago shelled South Korean patrol boats off the west coast of the peninsula, killing five sailors? It is, say observers, who speculate that the naval battle may have been an accidental clash rather than a deliberate provocation. The country’s recent reforms and overtures are, in fact, in keeping with an agenda dating back to the late 1980s, when the Soviet Union unraveled and left its client state, North Korea, without a dependable source of oil and food. The conventional wisdom has been that Kim is too scared of losing control to risk reform. But a devastating famine in the mid-’90s made it clear the country could not go it alone–that it must, to some degree, join the international economic community.

Frequent business visitors to Pyongyang say the North Koreans have been overhauling their investment laws and welcoming international trade delegations in the hope of attracting foreign capital. Government connections are still essential, but there are fewer layers of bureaucracy than in China, say experts on North Korean business practices. Once a joint venture is signed, getting things done is no tougher than in other developing countries. “I find it very refreshing to be here,” says Savage. “The guys are very straight.”

But North Korea’s agricultural output has fallen dramatically and its infrastructure is crumbling. Most of its factories have shut down and its electric power system is in shambles. The country has one of the worst credit ratings in the world and its currency, the won, is not convertible. Building the basic services that might make North Korea alluring to more foreign investors will take billions of dollars in loans from international lenders like the World Bank.

Lending cannot take place without assent from the U.S., and Washington won’t approve until North Korea allows inspections of all its nuclear weapons facilities. The country froze its nuclear program under a 1994 agreement with the U.S., in return receiving oil imports and a commitment–backed by South Korea and Japan–to build two light-water nuclear power plants in North Korea. Ground has been broken for construction of one in the port city of Kumho. But under the agreement, North Korea must allow the International Atomic Energy Agency to assess whether Pyongyang is living up to its promise to come clean on all of its nuclear programs, a process that could take several years. The U.S. and its partners want to begin soon. So far, Kim has refused to allow inspections to resume, and the standoff goes on. Says a Western diplomat: “The North Koreans are going to have to be viewed as extremely clean.”

Nevertheless, a few brave pioneers have set up shop in North Korea in anticipation of better times. Swiss data-processing company Datactivity.com has run a joint-venture data-entry center in Pyongyang since 1997. Some South Korean companies have launched joint ventures in areas like animation and computer software. And Chinese traders do a booming business back and forth across the China-North Korea border. Robert Suter, who heads the Seoul office of Swiss power generation company ABB Ltd., says his firm is staking out a position in North Korea, “It is the same as it was in China years ago. You had to be there and you had to build trust.”

The question on many minds is whether Kim Jong Il, who has a history of trading friendly relations and empty promises for monetary assistance, is merely giving the world another head fake. His market reforms, according to skeptics, are designed not to liberalize the economy but to control the informal black markets that burgeoned during the famine, when the government could not feed everybody.

If North Korea is indeed serious about reform, it will begin by rebuilding its decimated manufacturing sector. The country needs to export goods if it is to earn hard currency to pay for the food and fertilizer it cannot produce itself. Cutting off subsidies to deadbeat factories is just a first step, and there is no evidence the government has a blueprint for moving further. “They aren’t scrapping the socialist system,” says Koh Hyun Wook, an expert on North Korea at Kyungnam University near Pusan. “These are makeshift moves to overcome the current economic crisis.”

Savage, the tree farmer, believes otherwise. He will be in North Korea with his Israeli irrigation engineers this week, setting up greenhouses and touching base with his North Korean partners. But he acknowledges his venture will require patience. The country “may be a bit backward,” he concedes, “but so what? If you are prepared to help, it will take off like a bloody bullet.” Or a paulownia tree.

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Posted in 2002 Economic reforms, Agriculture, Banking, Black markets, Computing/IT, Datactivity.com, Economic reform, Energy, Finance, Forestry, Labor conditions/wages, Maxgro holdings, Nuclear, Sports, Switzerland | Comments Closed

Football match unites Koreas

July 9th, 2002

BBC
7/9/2002

The North and South Korean football teams have played a landmark match in Seoul.

Their first game in nearly 10 years, dubbed the “Reunification Games”, ended in a 0-0 draw.

Some 60,000 fans packed the stadium waving the blue and white banners symbolising a unified Korean peninsula in a game free of political trappings.

After a frosty spell in relations last year, the North has made new attempts to widen its links with other countries with talks ranging between Seoul, Moscow and Tokyo.

The players entered the Sangam World Cup Stadium holding hands as crowds roared “Jo Kuk Tong Il!”, or “Unified Fatherland!”.

The BBC’s Seoul correspondent, Caroline Gluck, reports that Saturday’s match was not about winning or losing, but about uniting people and paving the way for future sports events.

The mainly Southern crowd kept up applause throughout the game for both sides but, our correspondent noted, it was especially loud for the Southern team’s four star players from the recent Wold Cup.

The game also acted as a taster for the North’s participation in the Asian Games, to be staged in the Southern port city of Pusan in three weeks’ time.

Positive message

The two teams did without their national anthems – if only because the Communist North’s anthem is banned under Southern law – and sang a traditional Korean folksong.

Chung Mong-joon, head of the Korean Football Association, said before kick-off that it would be a historic match which would unite people from the two states.

One elderly fan in the stadium who had moved from the North duing the 1950-1953 Korean War said it was time to set past bitterness aside.

“I came to the South because I hated Communists in the North,” Byun Jang-shik, 80, told The Associated Press.

“But I think it’s time for reconciliation. We can’t live hating each other forever.”

Since co-hosting the last World Cup and unexpectedly reaching the semi-finals, South Koreans have become passionate about football, our correspondent says.

But the authorities there decided to ban large open-air screenings of the match, fearing they could become politicised.

North Korea, which is still technically at war with the South, boycotted the World Cup but illegally broadcast highlights of the matches.

It did congratulate the South after its team came fourth in the Cup.

Reuniting families

In a further move towards improved relations, the first inter-Korean Red Cross talks have begun on restoring relations between families divided since the 1950-53 war.

Reports say both sides have already agreed in principle to open a permanent reunion centre but have disagreed over the location and the number of such places.

North Korea has insisted on Mount Kumgang as the sole location for a centre.

The scenic mountain is the only tourist attraction in the north open to South Koreans.

For its part, South Korea wants a second site at Dorasan Station, the last stop on the railway linking the two countries.

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North Korea breaks silence on South

June 22nd, 2002

BBC
6/22/2002

The state-run media in Communist North Korea have reportedly broken their silence over the success of South Korea in the World Cup.

According to foreign residents in Pyongyang, North Korean television broadcast edited highlights of South Korea’s World Cup match against Italy, which ended in a surprise 2-1 victory for the South Korean side, earning them a place in the quarter-finals.

The television footage was aired five days after the match, but it was the first time the Communist state has broadcast anything about the South Korean team.

It has shown some games but until now has omitted to tell its own people that they are taking place in South Korea or that the South is even competing.

Its main television bulletin on Saturday made no mention of South Korea’s quarter-final victory over Spain, devoting itself instead to praise for leader Kim Jong-il and coverage of the lavish Arirang cultural festival.

Some commentators see the Arirang festival as an attempt to upstage the World Cup.

North Korean television has shown the football games without asking permission or paying a fee. It has also displayed match schedules, but consistently left out South Korea.

Fans aware

This does not mean that North Koreans have been unaware of the progress of the southern team.

Diplomats in the North Korean capital, Pyongyang, told the South Korean news agency Yonhap that locals saw Korean signs displayed around the football grounds and must have realised the Cup is being held in the South.

According to the southern newspaper Munhwa Ilbo, North Korean soldiers manning the Demilitarised Zone that separates the two countries were cheering for South Korea’s squad as the South broadcast commentaries of the games and news of the World Cup across the border by loudspeakers normally reserved for propaganda.

“They actually cheered on Tuesday when Korean player Seol Ki-Hyeon scored the equaliser in the Italian match, and Ahn Jung-Hwan scored the golden goal in extra time,” a South Korean military source told the newspaper on Saturday.

Southern officials have said North Korean television introduced only 15 of the final 16 games, leaving South Korea out.

A North Korean escapee told Yonhap: “North Korean residents regard the blank space in the match schedule of international matches as indicating South Korea. Even though the North Korean authorities have not publicised South Korea’s advance … residents will naturally know how well the South’s team has fought a good fight.”

Anti-US propaganda

Propaganda commentaries on North Korean television aimed at South Korean audiences have however made it clear that the Cup is taking place in the South, and that the South is playing.

Such a commentary on 12 June said US team players in the South were living in “anxiety and terror amid tight security for fear of being attacked by South Koreans in an atmosphere where anti-US sentiment has been intensified”.

The television showed pictures of Taegu stadium, where the South Korean and US match took place on 10 June, surrounded by riot police, along with pictures of the heavily-guarded US Embassy in Seoul.

“[They] are extremely restless and fearful, frightened by the South Korean people’s unprecedented escalating anti-US sentiment and their bold struggles against the United States. We should say that this is all too well-deserved,” the television said.

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Pyongyang gets its first Internet cafe

May 27th, 2002

From NKChoson.com:

An Internet cafe, called ‘PC room,’ has recently opened in the North Korean capital city of Pyongyang for the first time, according to the Internet homepage Monday of a South Korean businessman doing business there.

Jangsaeng General Trading Co., a joint venture between the North’s Pan-Pacific Economic Development Association of Korean Nationals and software company Hoonnet of South Korea, opened the 66-square-meter PC room in its building, Hoonnet President Kim Beom-hoon said.

From the Asia Times:
The same businessman that set up the internet cafe also set up an online gambling site based in Pyongyang.  Since 2002 Kim Beom hoon (or Kim Pon Hun), set up (www.jupae.com) hosted in Pyongyang.

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Pyonghwa Motors factory in Nampo

April 6th, 2002

KCNA
4/6/2002

Kim Yong Sun meets S. Korean delegation

Kim Yong Sun, chairman of the Korean Asia-Pacific Peace Committee, met a delegation that had attended a ceremony of commissioning the Pyonghwa Motors General Factory at the People’s Palace of Culture today and had a talk with it in an atmosphere overflowing with compatriotic feelings.

Setting Up Shop in N. Korea: Car Firm Plunges In
Los Angeles Times
Barbara Demick
3/28/2002

Company linked to Sun Myung Moon’s church is to open an assembly plant in April.

At first glance, there couldn’t be a more improbable business proposition than opening an automobile factory in North Korea, where hardly anybody owns a car or knows how to drive. Even more surprising is that the company making this investment is an affiliate of the Unification Church, headed by the thumpingly anti-communist Rev. Sun Myung Moon.

Against all odds, Pyonghwa Motors next month is opening a $55-million auto assembly plant where there once were rice paddies in the western coastal city of Nampo. It is one of the largest private ventures in North Korea, a bastion of militant communism that only recently has cracked open its doors to foreign investment in a desperate quest for hard currency.

“This country was so closed that nobody, not God, not Buddha, could get in the last 50 years without a visa,” Park Sang Kwon, the president of Pyonghwa Motors, said at a news conference Friday in Seoul, the South Korean capital, where the company is headquartered. “Nobody, even in my own company, believed it was possible to build an automobile in North Korea. Only I believed.” Initially, the assembly line will turn out Fiat Sienas, a compact model, but Pyonghwa Motors hopes to develop its own model for the North Koreans.

The communist government, which also owns a stake in the company, has contracted to buy 1,000 cars in the first year. After that, the company hopes to sell vehicles in China, Russia and, if the political situation allows, South Korea. The plant has the potential to turn out 20,000 cars a year.

The unlikely relationship between the Unification Church and North Korea dates to 1991, when Moon visited the country’s founder and chief ideologue, Kim Il Sung. That paved the way for Moon, an archconservative who nonetheless supports dialogue with the North, to buy two hotels in Pyongyang, the North Korean capital, including the 161-room Potonggang, which boasts of being the only hotel in the isolated country with satellite television.

The North Koreans also allowed Moon’s followers to develop Jongju, the northwestern town where Moon was born, into a pilgrimage site–another coup for the Unification Church because the communist nation bans all practice of religion.

In addition to the car assembly plant, Pyonghwa wants to open a department store, gas stations, automobile showrooms and what the company described as a “World Peace Center” in Pyongyang to promote cultural and educational exchanges.

Pyonghwa officials say they hope the investments will advance the reconciliation process between the two Koreas, estranged for more than half a century. Indeed, the name of the company means “peace” in Korean.

“We will show the North Koreans brotherly love through this project,” Park, the company president, said Friday, flashing slides for journalists of North and South Korean employees working together in building the assembly plant, then clowning around as they pose for a photograph.

From a financial viewpoint, the company hopes that low labor costs will allow it to turn out automobiles more cheaply than elsewhere in Asia. The company now employs about 200 North Korean auto workers who are paid an average of $120 a month.

“We are bound to succeed,” Park said. “There are no unions, low labor costs. The workers are very clever, very quick to learn, and they are harshly controlled by their superiors.”

Among the extraordinary problems that Pyonghwa has encountered in trying to do business in North Korea is the erratic power supply and poor transportation system. The new plant is situated next to a 2-year-old highway linking Nampo with Pyongyang, 25 miles to the northeast. However, the road was constructed with picks and shovels; it does not accommodate heavy trucks well and frequently needs repairs. Merely putting up a sign over the front gate of the factory was a struggle, in which capitalism ultimately triumphed over communism.

“This is the first time anybody was allowed to put a company logo on a billboard in North Korea,” Park said.

The plant’s grand opening, scheduled for April 5, comes as North Korea is going through a particularly rough patch in trying to attract foreign investment. The rapprochement with South Korea has ground to a halt, while President Bush’s characterization of North Korea as part of an “axis of evil” has hardly induced companies to invest.

There also have been a number of well-publicized failures. Hyundai, the South Korean conglomerate, recently had to turn to its own government for a bailout to rescue its 3-year-old venture bringing tourists to North Korea’s scenic Mt. Kumgang.

“We advise companies to look carefully, to cross-check everything as much as possible before doing business in North Korea,” said Jean-Jacques Grauhar, secretary-general of the European Chamber of Commerce in Seoul. “We don’t think the legal framework is satisfactory at this stage, and the general way of doing business is not yet developed.”

In addition to its assembly line, Pyonghwa is refurbishing used cars imported from Japan for resale in North Korea. That business opened early last year and has brought in about $300,000 in sales.

There are 3,000 passenger cars in North Korea for a population of 23 million. All are said to belong to the government or top officials.

Pyonghwa also owns a Fiat assembly plant in Vietnam and has tried various automotive projects in China, which so far have been unsuccessful.

The company’s affiliation with the Unification Church is unclear. Several businesspeople in Seoul said it is part of the church, although company officials said it is merely owned by individuals who are church members, including Park, who owns about 80%.

“This really has nothing to do with religion, and the fact that our president is a member of the church doesn’t affect the way the company does business,” said Lee Hyun Tak, a Pyonghwa official.

Unification Church to sell 1,000 cars in N.Korea in ’02
Reuters
Samuel Len
3/22/2002

The automotive arm of South Korea’s Unification Church said on Friday it has finished building a $55 million car assembly plant in famine-hit North Korea, whose government has pledged to buy 1,000 cars each year.

“North Korea wants to develop its own model as soon as possible,” Park Sang-kwon, the company’s president, told a news conference in Seoul.

Business prospects in the reclusive country seemed to glow shortly after President Kim Dae-jung of South Korea held an unprecedented summit in 2000 with North Korean leader Kim Jong-il.

But relations between the neighbours chilled last year and have come under even greater pressure after President George W. Bush labelled North Korea part of an “axis of evil” in January.

North and South Korea remain technically at war as the 1950-53 Korean War ended without a peace agreement.

Undaunted by this atmosphere, Pyeongwha Motors Corp, the first South Korean company to build an auto plant in the north, says it sees a burgeoning market.

Pyeongwha, which means “peace” in Korean, is a joint venture with North Korea’s Ryonbong company. The assembly plant in the port city of Nampo will be capable of rolling out up to 20,000 cars annually when it opens on April 5.

Two years ago, Pyongyang completed a spanking new, 10-lane highway linking the port city of Nampo to the capital, he said.

All that’s needed, Pyeongwha says, are cars to fill the empty roads of a country of 23 million people. However, there were just 3,000 passenger cars among the 290,000 to 300,000 vehicles in North Korea in 1999.

NORTH KOREAN CAR EXPORTS?

The Unification Church, founded in 1954 by Reverend Sun Myung Moon and famed for mass wedding ceremonies, is also a considerable business force in South Korea. Its interests range from refining titanium to pharmaceutical products.

“We were chosen because we approached them with an offer to develop our own offspring,” he said. “We want to fill North Korea with cars and then export them.”

Exports could begin anywhere from 10 to 15 years down the road, with North Koreans preferring to export an indigenous model fitted with a Pyeongwha engine, Park said.

The orders from the North Korean government alone would be enough for the company to break even. Ssales are expected to rise to 2,000 to 3,000 cars next year, he said.

The plant assembles one model for domestic sales, the Siena compact designed by Italy’s Fiat SpA FIA.MI.

Pyeongwha has imported used Japanese cars into North Korea and refurbished for resale using North Korea’s cheap labour. It has been selling 20 to 30 cars a month, at between $10,000 to $15,000, mainly to foreign businessmen and diplomats, Park said.

Park painted a picture of life in the North Korean capital far different from the horrific images of outer regions described by aid workers.

“There’s a nine-hole golf course in the city, as well as a driving range,” built by ethnic Koreans in Japan, Park said.

Wikipedia:

Stockholders
70% Pyonghwa Motors (Seoul) (owned by the Unification Church)
30% Ryonbong Corp.

Car models
Hwiparam (휘파람 – Whistle) – based on the Fiat Siena
Ppeokkugi (뻐꾸기 – Cuckoo) – based on the Fiat Doblò
Premio (also known as Cuckoo 3) – based on a Dandong Shuguang pick-up
Pronto (also known as Cuckoo 2) – based on a Dandong Shuguang SUV
Junma – apparently based on the SsangYong Chairman

Video from DPRK state television

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Posted in Economic reform, Foreign direct investment, Manufacturing, Pyonghwa Motors, Religion, Ryonbong General Corporation | Comments Closed

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