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By Bertil Lintner, Asia Times Online, 24 April 2007
BANGKOK - The state of North Korea's information-technology (IT) industry has
been a matter of conjecture ever since "Dear Leader" Kim Jong-il famously asked
then-US secretary of state Madeleine Albright for her e-mail address during her
visit to the country in October 2000.
The answer is that it is surprisingly sophisticated. North Korea may be one of
the world's least globalized countries, but it has long produced ballistic
missiles and now even a nuclear arsenal, so it is actually hardly surprising
that it also has developed
advanced computer technology, and its own software.
Naturally, it lags far behind South Korea, the world's most wired country, but a
mini-IT revolution is taking place in North Korea. Some observers, such as
Alexandre Mansourov, a specialist on North Korean security issues at the
Honolulu-based Asia-Pacific Center for Security Studies (APCSS), believes that
in the long run it may "play a major role in reshaping macroeconomic
policymaking and the microeconomic behavior of the North Korean officials and
economic actors respectively".
Sanctions imposed against North Korea after its nuclear test last October may
have made it a bit more difficult for the country to obtain high-tech goods from
abroad, but not impossible. Its string of front companies in Hong Kong,
Singapore, Thailand and Taiwan are still able to acquire what the country needs.
It's not all for military use, but as with everything else in North Korea,
products from its IT industry have both civilian and non-civilian applications.
The main agency commanding North Korea's IT strategy is the Korea Computer
Center (KCC), which was set up in 1990 by Kim Jong-il himself at an estimated
cost of US$530 million. Its first chief was the Dear Leader's eldest son, Kim
Jong-nam, who at that time also headed the State Security Agency, North Korea's
supreme security apparatus, which is now called the State Safety and Security
Agency.
Functioning as a secret-police force, the agency is responsible for
counterintelligence at home and abroad and, according to the American Federation
of Scientists, "carries out duties to ensure the safety and maintenance of the
system, such as search for and management of anti-system criminals, immigration
control, activities for searching out spies and impure and antisocial elements,
the collection of overseas information, and supervision over ideological
tendencies of residents. It is charged with searching out anti-state criminals -
a general category that includes those accused of anti-government and dissident
activities, economic crimes, and slander of the political leadership. Camps for
political prisoners are under its jurisdiction."
In the 1980s, Kim Jong-nam studied at an international private school in
Switzerland, where he learned computer science as well as several foreign
languages, including English and French. Shortly after the formation of the KCC,
South Korean intelligence sources assert, he moved the agency's clandestine
overseas information-gathering outfit to the center's new building in
Pyongyang's Mangyongdae district. It was gutted by fire in 1997, but rebuilt
with a budget of $1 billion, a considerable sum in North Korea. It included the
latest facilities and equipment that could be obtained from abroad. According to
its website, the KCC has 11 provincial centers and "branch offices, joint
ventures and marketing offices in Germany, China, Syria, [the United] Arab
Emirates and elsewhere".
The KCC's branch in Germany was established in 2003 by a German businessman, Jan
Holtermann, and is in Berlin. At the same time, Holtermann set up an intranet
service in Pyongyang and, according to Reporters Without Borders, "reportedly
spent 700,000 euros [more than US$950,000] on it. To get around laws banning the
transfer of sensitive technology to the Pyongyang regime, all data will be kept
on servers based in Germany and sent by satellite to North Korean Internet
users." Nevertheless, it ended the need to dial Internet service providers in
China to get out on the Web.
Holtermann also arranged for some of the KCC's products to be shown for the
first time in the West at the international IT exhibition CeBIT (Center of
Office and Information Technology) last year in Hanover, Germany. The KCC's
branches in China are also active and maintain offices in the capital Beijing
and Dalian in the northeast.
Another North Korean computer company, Silibank in Shenyang, in 2001 actually
became North Korea's first Internet service provider, offering an experimental
e-mail relay service through gateways in China. In March 2004, the North Koreans
established a software company, also in Shenyang, called the Korea 615 Editing
Corp, which according to press releases at the time would "provide excellent
software that satisfies the demand from Chinese consumers with competitive
prices".
Inside North Korea, however, access to e-mail and the Internet remains extremely
limited. The main "intranet" service is provided by the Kwangmyong computer
network, which includes a browser, an internal e-mail program, newsgroups and a
search engine. Most of its users are government agencies, research institutes,
educational organizations - while only people like Kim Jong-il, a known computer
buff, have full Internet access.
But the country beams out its own propaganda over Internet sites such as
Uriminzokkiri.com, which in Korean, Chinese, Russian and Japanese carries the
writings of Kim Jong-il and his father, "the Great Leader" Kim Il-sung, along
with pictures of scenic Mount Paekdu near the Chinese border, the "cradle of the
Korean revolution", from where Kim Il-sung ostensibly led the resistance against
the Japanese colonial power during World War II, and where Kim Jong-il was born,
according to the official version of history. Most other sources would assert
that the older Kim spent the war years in exile in a camp near the small village
of Vyatskoye 70 kilometers north of Khabarovsk in the Russian Far East, where
the younger Kim was actually born in 1942.
The official Korean Central New Agency also has its own website, KCNA.co.jp,
which is maintained by pro-Pyongyang ethnic Koreans in Japan, and carries daily
news bulletins in Korean, English, Russian and Spanish, but with rather
uninspiring headlines such as "Kim Jong-il sends message of greetings to Syrian
president", "Kim Jong-il's work published in Mexico" and "Floral basket to DPRK
[North Korea] Embassy [in Phnom Penh] from Cambodian Great King and Great
Queen".
On the more innocent side, the KCC produces software for writing with Korean
characters a Korean version of Linux, games for personal computers and
PlayStation - and an advanced computer adaptation of go, a kind of Asian chess
game, which, according to the Dutch IT firm GPI Consultancy, "has won the world
championship for go games for several years. The games department has a display
showing all the trophies which were won during international competitions."
Somewhat surprisingly, the North Koreans also produce some of the software for
mobile phones made by the South Korean company Samsung, which began
collaboration with the KCC in March 2000. North Korean computer experts have
received training in China, Russia and India, and are considered, even by the
South Koreans, as some of the best in the world.
More ominously, in October 2004, South Korea's Defense Ministry reported to the
country's National Assembly that the North had trained "more than 500 computer
hackers capable of launching cyber-warfare" against its enemies. "North Korea's
intelligence-warfare capability is estimated to have reached the level of
advanced countries," the report said, adding that the military hackers had been
put through a five-year university course training them to penetrate the
computer systems of South Korea, the United States and Japan.
According to US North Korea specialist Joseph Bermudez, "The Ministry of the
People's Armed Forces understands electronic warfare to consist of operations
using electromagnetic spectrum to attack the enemy by jamming or spoofing.
During the 1990s, the ministry identified electronic intelligence warfare as a
new type of warfare, the essence of which is the disruption or destruction of
the opponent's computer networks - thereby paralyzing their military command and
control system."
Skeptical observers have noted that US firewalls should be able to prevent that
from happening, and that North Korea still has a long way to go before it can
seriously threaten the sophisticated computer networks of South Korea, Japan and
the US.
It is also uncertain whether Kim Jong-nam still heads the KCC and the State
Safety and Security Agency. In May 2001, he was detained at Tokyo's airport at
Narita for using what appeared to be a false passport from the Dominican
Republic. He had arrived in the Japanese capital from Singapore with some North
Korean children to visit Tokyo Disneyland - but instead found himself being
deported to China. Since then, he has spent most of his time in the former
Portuguese enclave of Macau, where he has been seen in the city's casinos and
massage parlors. This February, the Japanese and Hong Kong media published
pictures of him in Macau, and details of his lavish lifestyle there - which
prompted him to leave for mainland China, where he is now believed to be living.
Whatever Kim Jong-nam's present status may be in the North Korean hierarchy, the
KCC is more active than ever, and so is another software developer, the
Pyongyang Informatics Center, which, at least until recently, had a branch in
Singapore. Other links in the region include Taiwan's Jiage Limited Corporation,
which has entered a joint-venture operation with the KCC under the rather
curious name Chosun Daedong River Electronic Calculator Joint Operation
Companies, which, according to South Korea's trade agency, KOTRA, produces
computers and circuit boards.
The US Trading with the Enemy Act and restrictions under the international
Wassenaar Arrangement, which controls the trade in dual-use goods and
technologies (military and civilian), may prohibit the transfer of advanced
technology to North Korea, but with easy ways around these restrictions,
sanctions seem to have had little or no effect.
North Korea's IT development seems unstoppable, and the APCSS's Mansourov argues
that it can "both strengthen and undermine political propaganda and ideological
education, as well as totalitarian surveillance and control systems imposed by
the absolutist and monarchic security-paranoid state on its people, especially
at the time of growing conflict between an emerging entrepreneurial
politico-corporate elites and the old military-industrial elite".
So will the IT revolution, as he puts it, "liquefy or solidify the ground
underneath Kim Jong-il's regime? Will the IT revolution be the beginning of the
end of North Korea, at least as we know it today?" Most probably, it will
eventually break North Korea's isolation, even if the country's powerful
military also benefits from improved technologies. And there may be a day when
the KCNA will have something more exciting to report about than "A
furnace-firing ceremony held at the Taean Friendship Glass Factory".
Bertil Lintner is a former correspondent with the Far Eastern Economic
Review and is currently a writer with Asia-Pacific Media Services.
By Anna Fifield in Pyongyang, Financial Times, 12 March 2006
North Korean companies are seeking new banking channels to escape US financial
sanctions imposed for alleged counterfeiting and money-laundering, says one of
the isolated state's most influential businessmen. The
claim – if true – will alarm US officials trying to stop Pyongyang from
distributing counterfeit dollars and laundering money earned through illicit
activities, such as proliferating weapons of mass destruction.
"It is true we are having great difficulties but they cannot kill us," said Jon
Sung-hun, president of Pugang Corporation, one of the North Korean companies
whose assets have been frozen in the crackdown.
"Because of the US's terrible sanctions, all bank transfers are
impossible and we are also not able to carry cash between countries...
but we are finding other ways," Mr Jon told the Financial Times, denying his
company had been involved in wrongdoing.
"These days the world is multinational but they think they can catch us this way
because our country is a closed society, but they are just not clever enough."
Mr Jon declined to elaborate to avoid tipping off American authorities.
The freeze on eight North Korean companies and Banco Delta Asia in Macau, which
the US says has facilitated Pyongyang's illicit activities, has severely
constrained North Korea's ability to trade legally and illegally.
Officials say the measures are, in many ways, the perfect sanction
because they are hitting North Korea's elite, not the general
populace.
However, the actions have also derailed the six-party talks aimed at persuading
Kim Jong-il's regime to give up its nuclear ambitions, as well as injecting new
antagonism into an already fractious relationship. On
Friday, Washington rejected a North Korean proposal to set up a joint committee
to exchange information on financial matters, including steps to cope with
illicit activities and assist in international efforts
against money laundering.
North Korea made the offer at a meeting in New York last week where Treasury
department officials explained the US laws that triggered economic sanctions
last year. But the state department said US regulations to protect its financial
system were not subject to negotiation, while reaffirming its commitment to the
six-party talks.
"These American people must withdraw these foolish sanctions and they must talk to us," said Mr Jon, the head of a conglomerate involved in businesses as diverse as mining, motorbikes and pharmaceuticals.
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By Anna Fifield in Pyongyang, Financial Times, 13 March 2006
The words "North Korea" and "entrepreneur" are seldom heard in the same breath,
but as the world's most staunchly communist country toys with economic reform, a
new class of businessman is appearing on the streets of Pyongyang.
Kim Jong-il's regime is now encouraging conglomerates similar to South
Korean "chaebol" such as Samsung and Hyundai, which propelled the south's
transformation from agrarian nation to industrial heavyweight.
Around Pyongyang, state-run shops are advertising everything from medicines to
motorbikes made by diversified groups such as Pugang, Daesong, Sungri and Rungra
88. Their managers have grand ambitions not just at home but abroad as well.
"In parts of China, our mineral water – Hwangchiryong – is twice as
expensive as Evian of France," Jon Sung-hun, president of Pugang Corporation,
boasted to the FT over cups of ginseng tea in a Pyongyang.
"The people of the world think the quality of our goods and
commodities is very low so we are trying to produce better quality goods
than advanced countries," said Mr Jon, speaking perfect English and punctuating
every sentence with chuckles. "Our main focus will be on opening up new markets
in South Korea and China."
Although Pugang was established in 1979, such an export-driven expansion
strategy would have been unthinkable in "self reliant" North Korea a few years
ago. But the effects of the economic reforms of 2002
are becoming increasingly apparent in Pyongyang. The
most obvious consequence of the changes – which included allowing greater price
and wage flexibility – is the triple-digit inflation that has made rice
unaffordable for many North Koreans. But a
handful of company managers who were given greater autonomy are prospering.
A rotund 53-year-old sporting a navy blue "Mao suit" and purple-tinted glasses,
the cigar-smoking ("just like Winston Churchill") Mr Jon is the flag-bearer for
North Korean-style business. His photo appears in
foreign trade publications and Pugang websites say the group has capital of $20m
(€16.8m, £11.6m) and annual turnover of about $150m, meaning it comprises a
significant proportion of North Korea's estimated $2.5bn trade volume. (Mr Jon
declined to discuss profitability, saying only the company pays at least 15 per
cent of profits back to the state.)
While the US Treasury Department says that Pugang is part of the Korea Ryonbong
General Corporation and has been involved in proliferating weapons of mass
destruction, Mr Jon said it was merely an ambitious business with eight
divisions – incorporating mining, electronics,
pharmaceuticals, coins, glassware, machinery and drinking water factories.
"We want to show to the people of the world that we are progressing",
he said.
Pugang has branches or agents in China, Cuba, Germany, Bulgaria, Switzerland,
Pakistan, Malaysia, Egypt, Syria and Ethiopia, and is now exporting its
best-selling product – a blood purifier derived from soya beans called "royal
blood fresh" – that he says is safer than those produced in South Korea or
Japan. It is being marketed abroad and at home – a
country where people must have permission to travel even the shortest distance –
as an effective prevention against deep-vein thrombosis. In the UK it is
repackaged into boxes saying only "Made in Korea" and then exported to the US.
But it is the mining division that comprises the biggest part of
Pugang – it has more than 100 gold mines alone and is exporting gold in
the form of coins, made at two Pugang mints, rather than bars. It also produces
zinc, lead and magnesium concentrates. Despite its diversified, expansionary
nature, Mr Jon says the Pugang strategy is representative of a uniquely North
Korean approach to doing business.
"We recognise that [South Korea's] Samsung and Hyundai are good companies but they are not our models," he said. He also dismissed any suggestion that North Korea is increasingly adopting market principles. "A market economy is not the best choice for us," he said. "If we change our whole economy in one day and stop our central planning, then people will be surprised and will start starving."
Nevertheless, Mr Jon has some decidedly capitalist role models. "According to the list of top billionaires in the world, Bill Gates is number one, pharmaceuticals is number two, number three is motors and four is weapons," he said. "We are focusing on three of those." But Mr Jon denies rumours that he is a millionaire. "I'm just a salary worker – see," he laughs, holding open his empty wallet. And then he leaps up, walking past the floor-to-ceiling photo of Kim Jong-il to his waiting chauffeur-driven car.
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Pyongyang, March 9 (KCNA) -- Leader Kim Jong Il visited the Pyongyang Earth
Station on March 4, Juche 75 (1986). Over the last two decades, many successes
have been made in the modernization of communications. The modernization of the
station makes it possible to fully ensure reception and transmission of
telegraph, telephone and telex with other countries. And facilities including
switchboards and communication method based on high-technology have been
introduced and their operation computerized so as to remarkably boost the speed
and capacity of communications.
The establishment of TV relay system by satellites also makes it possible to
telecast more events and facts that are taking place at home and abroad. The
radio capacity has been improved and radio channels have been diversified.
During the "Arduous March" and forced march, the difficult years for the
country, the optical fiber cable has found its way to provinces, cities,
counties and rural villages. Meanwhile, cars and other transport means were
provided to post service and latest scientific and technological successes fully
introduced to strengthen the material and technical foundation in the field. The
modernization of communications is promoted this year, too, as required by the
Songun and IT era.
Chosun Ilbo reported that the DPRK plans to develop the country’s Bidan Island into a special economic zone, the Tokyo Shimbun reported Tuesday citing diplomatic sources. The DPRK intends to evict the island’s residents to build a financial center and other facilities that will be open to the outside world, the Japanese daily said. The daily said DPRK leader Kim Jong-il is apparently experimenting with a domestic version of what he saw during a visit to China’s special economic zone in January. At the time, Kim declared himself “very impressed.” ("N.KOREA TO SET UP SPECIAL ECONOMIC ZONE NEAR CHINA", 2006-03-07)
North Korea has asked South Korean companies for the first-ever pay rise for its
workers employed in an industrial park just over the border in the North. The
Reuters news agency reports the minimum monthly wage of $US50 for each employee
is paid to the North Korean state. But South Korean managers are unable to say
how much of the money finds its way to the thousands of workers at the Kaesong
Industrial Park.
The Kaesong site is run by South Korean company Hyundai Asan -- part of the
Hyundai group -- and is located a few hundred metres north of the heavily
fortified Demilitarised Zone border that divides the peninsula. The South Korean
Unification ministry says South Korea will negotiate wages that do not burden
the companies that operate there. Under labour regulations governing the park,
annual wage increases are capped at five percent, but the North, so far, has not
asked for any increase in wages.
By MIWA MURPHY, The Japan Times, Feb. 23, 2006
NEW YORK (Kyodo) North Korea does not need to be considered unpredictable or
evil as long as we exercise our knowledge and avoid speculation, according to
Hazel Smith, a social scientist who has traveled extensively in the country
since the 1990s and witnessed the worst of the famine crisis. Hazel Smith, an
expert on North Korea, speaks at New York's Korea Society earlier this month.
A professor of international relations at the University of Warwick in England,
Smith recently visited the Korea Society in New York to talk about her latest
book, "Hungry for Peace: International Security, Humanitarian Assistance, and
Social Change in North Korea."
The book draws on her extensive firsthand knowledge of the isolated country
gained through her capacity as a consultant and program adviser to the World
Food Program, UNICEF, the U.N. Development Program and the Caritas International
aid organization.
Smith said a major difference between today and the mid-1990s is that we now
have a substantial knowledge base about North Korea that makes the country
intelligible to the rest of the world.
"It's not mad, it's not irrational," she said, adding that knowledge and opinion
must be separated.
North Korea underwent a dramatic socioeconomic change in the early 1990s. After
the Cold War, self-sufficiency achieved during the previous decades began to
falter as the country lost access to cheap fuel from the Soviet Union that was
vital to its agriculture.
The economic collapse was followed by devastating floods and famine, which is
estimated to have killed 1 million people.
"Apart from the terrible tragedy, we need to ask ourselves, 'How did the 22
million survive?' because the state did not help them survive," she said.
"They survived because they spontaneously created a market economy. They
bartered, they swapped, they used contacts, particularly the middle-level party
officials throughout the country, and they created the market economy," she
said.
Smith said the government first tried to ignore the emerging, albeit primitive,
market. It then tried to roll it back but gave up in the early 2000s.
"The so-called economic reforms were a lag factor behind what the population had
done," she said.
There is a new class system developing in North Korea as a result of the massive
change in the 1990s, Smith said.
As the state lost its ability to provide for its people, millions of party and
security officials became the most desperate unless they had access to relatives
with food or foreigners, she said.
"The old elites are still there around (North Korean leader) Kim Jong Il's
family, but new commercial elites have been out to take advantage of the new
market opportunities," she said. "They might still live in Pyongyang's apartment
blocks and might still have no electricity half the time, but they can go out
and buy a secondhand Japanese car."
If the society has changed, has the people's attitude changed also? How strong
is the hold of Kim's ruling group?
"There is nobody that believes that they are living in the socialist paradise,"
she said. "They may not blame the leader directly, but often they will say it's
the 'officials,' which is a way of talking about the aspects of the government."
Smith, however, said people rarely ask questions about potential political
change because their priority, simply, is "to get enough food." There are still
chronic food shortages and that is not just because of the poor distribution
system, but is also because of geography -- only 15 percent to 20 percent of the
land is arable, she said.
Meanwhile, in her book, Smith analyzes North Korea's problematic relations with
Japan. She says North Korea's "structural, historical and cultural antagonism to
Japan" and Japanese skepticism about North Korea's intentions, combined with an
anti-Korean mentality, make for powerful barriers to improvement in cooperation.
Japan responded generously when it was approached by North Korea in the
mid-1990s for food assistance. But "the DPRK felt it was owed the assistance
because of the Japanese colonial past, and it made little attempt to hide this
perspective," she writes.
DPRK stands for the Democratic People's Republic of Korea, North Korea's
official name.
Japan ended the food aid in 2001. Smith writes Japan's decision was "quite
unlike that of the United States," which has argued that "humanitarian
assistance should be separate from political leverage" from President Ronald
Reagan through to the second Bush administration.
Japan and North Korea held their 13th round of normalization talks from Feb. 4
to 8 in Beijing but made little headway overcoming obstacles. If normalization
becomes a reality, will the economic aid from Japan, paid as an effective
reparation for Japan's colonial rule, help transform North Korea's economy?
Smith says that if Japan and North Korea strike even a "semi-deal," it will be
an enormous boost to North Korea's economy. But if money comes in too quickly,
it could "entrench the worst capitalist practices," such as corruption and
nonaccountability, unless North Korea adopts some change, she says.
In Japan, public opinion is tough on North Korea because of the abductions.
Smith says genuine human rights-based criticism of the abductions was "drowned
in the outpouring of organized anti-DPRK activity that omitted to mention past
Japanese human rights crimes against Koreans," citing rightwing groups and
hardliners touting economic sanctions.
Japan's political leadership has given in to a "populist chauvinism as a
substitute for hard political bargaining," she writes.
Smith says negotiating a resolution over conflicts involving North Korea is now
effectively left to South Korea and the United States, as China and Russia have
opted to adopt "mediatory diplomacy," resenting interference in their own
domestic affairs.
Japan Times reported that Japan has seen a sharp increase in the number of postal remittances to the DPRK in recent years. Citing Japan Post documents, Shu Watanabe, a House of Representatives member from the Democratic Party of Japan, told a Lower House panel the number of remittances to the DPRK was 1,560 in fiscal 2004, compared with 383 in fiscal 2002 and 506 in fiscal 2003. Japan Post will look at the details of the money going to the DPRK. ("SPIKE IN POSTAL REMITTANCES TO NORTH KOREA SCRUTINIZED", 2006-02-16)
(Feb. 16,2006)
1. Foreign trade
In 2005, North Korea's foreign trade volume, despite the worsening foreign
environments, are estimated to surpass 3 billion U.S $, compared to 2.860
billion US $ in 2004 thanks to several factors such as increase in trade volume
with China. North Korea's trade with China amounted to 1.5 to 1.7 billion U.S.
$, recording 15 % year-on-year increase rate while North Korea's trade with
Japan remained at 2 billion U.S. $, slightly down from the volume in 2004.
Minerals, marine products and steel were mainly exported to China from North
Korea while North Korea imported energy, cereals and meats from China. Major
export items to Japan included marine products, mineral fuels and electrical
machineries while cars, electrical machineries, , artificial filament textiles
were imported to North Korea.
2. The Status on economic cooperation with foreign countries.
(1) Seeking the expansion of economic cooperation with a focus on China, Russia,
and Asian as well as African regions.
North Korea centered its economic cooperative activities on former Soviet Union
blocks, such as China, Russia and Mongolia, and Asian as well as African
countries.
China
North Korea concentrated its efforts on strengthening economic ties such as
working out institutional guarantee measures through exchanges of high ranking
officials such as Premier Park Bong-ju and Chinese President Hu Jintao and
economic delegations.
Premier Park Bong-ju during his visit to China from Mar. 22-27, reached an
`accord on investment promotion and protection', gave on-site inspection to
Pudong areas in Shanghai and discussed the matters related to investment and
expansion of trade. The North Korean economic delegation headed by Ri Yong-nam,
vice minister of Trade paid a visit to China from Mar. 15 to 19 in order to
attend the first meeting of the `North Korean-Sino cooperation committee on
economy, trade and scientific technology' and discussed the ways of expanding
bilateral economic cooperation.
Besides this, the North Korean delegation from the Quality Supervision Bureau
led by vice director Park Seong-kuk paid a visit to China and made an agreement
on the `cooperative plan in standardization, measurements and quality control
from 2005 to 2006' and `cooperative plan in the field of quality authentication
from 2005 to 2006' on Apr.25.
During President Hu Jintao's visit to North Korea from Oct. 28 to 30, two
countries adopted a four-point agreement for advances in bilateral economic
cooperation, and reached an accord on North Korean-Sino economic and
technological cooperation on Oct. 28.
During Vice Premier Ro Tu-chol's visit to China from Dec.24 to 27, North Korea
and China reached an `accord on joint development of crude oil in the sea' on
Dec. 24. In the meantime, North Korean-Sino joint companies such as `Pyongyang
Import Goods Exchange Market', `Pyongyang Electrical Machineries Company',
`Pyongyang Bicycle Joint Company', were established in June and October. In
addition, the construction of the `Daean Friendship Glass Factory' was completed
on Oct. 9.
Russia
As with Russia, two-time visits to North Korea by Pulikovski, presidential envoy
to the Far East Federal District of Russia in August and October served as the
opportunity intensively to discuss the issue of expanding bilateral economic
ties while the North Korean delegation from the Ministry of Trade and the
Ministry of Posts and Communications each paid a visit to Russia, discussing the
ways of expanding bilateral cooperation in related fields.
Following the agreement on `cooperative plan in standardization, measurement,
and quality control' from 2005 to 2006 reached on Apr. 11, the North Korean
delegation headed by Park Myong-cheol, vice minister of the Ministry of Posts
and Telecommunications paid a visit on April, tried to strengthen cooperative
ties in the field of broadcasting and communication. During Pulikovski's visit
to North Korea from Aug. 14 to 17, two countries agreed on four measures on
bilateral economic cooperation. The agreed points included expansion of trade
and strengthening economic ties, employment of North Korean labor force in the
field of forestry, no tariff on export of Russian crude oil to North Korea,
bilateral efforts for seeking financial resources for the resumption of the
connection between the Trans-Korean Railroad and the Trans-Siberian Railroad.
Through the visit to Sakhalin Island by the North Korean delegation from the
Ministry of Trade, North Korea and Sakhalin Island reached an `agreement on
constituting the working-level committee on economy and trade' on Oct. 5. North
Korea and Russia sought to strengthen cooperative ties in trade, energy and
forestry in the Far Eastern Areas by holding the 8th meeting of the forestry
subdivision meeting of the economy and scientific technology cooperation
committee and adopting a protocol on cooperation in forestry.
Other countries
Regarding cooperation with Mongolia, the North Korean economic delegation led by
vice minister of Trade Lee Myong-san, paid a visit to Mongolia in order to
attend the `consultative committee on economic trade and scientific technology
between North Korea and Mongolia' from Jan. 27 to Feb. 8. In addition, the
Mongolian governmental economic delegation headed by vice minister of Industry
and Trade visited North Korea in September and discussed the issue of expanding
bilateral economic ties.
On the other hand, North Korea sought to expand economic cooperation with Asian
and African regions by reaching several economic accords. Kim Young-il, minister
of Land and Marine Transport visited Syria, adopting a bilateral accord on
marine transport on May 11. And the North Korean economic trade delegation
headed by Lim Kyong-man, minister of Trade paid a visit to Yemen, Kenya and
Uganda as well as Guinea, and adopted several economic accords.
In addition, the North Korean economic delegation led by minister of Trade, Lim
Kyong-man paid a visit to Cuba, Brazil and Venezuela from Oct. 31 to Nov. 22.
The delegation reached an `accord on trade cooperation with Venezuela' on Nov. 8
and a protocol of the `24th consultative committee on economy and scientific
technology' on Nov. 4.
The North Korean delegation led by vice minister of Posts and Telecommunications
Park Myong-chol, visited Germany and France from Apr. 9 to May 3 and sought to
import advanced technologies and expand cooperation in the field of
telecommunications. A delegation led by vice minister of Trade Kung Sok-ung,
toured six European countries from Oct. 25 to Nov. 22 and discussed the ways to
expand economic cooperation. In particular, North Korea's Koryeo Bank and the
U.K Global Group established a joint company called `Koryeo-Global Credit Bank'
in Pyongyang on Jun. 3.
(2) Making various investment promotion activities including exhibition fair and
investment fair.
In 2005, North Korea actively sought to introduce overseas products and advanced
technologies through the International Products Expos, and make inroads into
overseas markets. Following the 8th `Pyongyang International Product Expo' held
from May 16 to 19, the `First Pyongyang Autumn International Products Expo' was
held. North Korea also dispatched its `trade and economy delegation' to the
first `Northeast Asian Investment and Trade Fair' from Sep. 2 to 6 and held an
investment promotion fair targeting Chinese companies.
In addition to the Expos and Fairs, North Korea took advantage of investment
consulting meetings and economic seminars as occasions to improve environments
for economic cooperation, such as foreign capital inducement and acquisition of
advanced economy and practical trade skills. Several `North Korean Investment
Fairs'were held successively in the Amur River region on Jan. 15, Beijing on
Feb. 25, Sichuan on Mar. 5 and Jilin on Sep. 2.
Under the auspices of the North Korean Ministry of Trade and the UNDP, an
international trade discussion meeting was held in Pyongyang from May 4 to 5
where North Korean people acquired knowledge and information on advanced trade
policies and systems, and discussed the ways to enter into overseas markets as
well as to increase foreign trade.
A delegation from the Foreign Trade Bank attended the `Fourth General Assembly
of the World Association of Debt Management Offices' organized by the UNCTAD
from Jun. 14 to Jul. 2 and a delegation from the Chosun Central Bank attended
the 75th annual general assembly of the Bank for International Settlements from
Jun. 21 to Jul. 2.
On the other hand, the `second economic reform workshop' was held in Pyongyang
from Oct. 11 to 14, through which North Korea acquired advanced information and
focused on learning lessons from former socialist countries' transition into
market economy. And at the working-level meeting, concrete measures were
discussed to achieve the modernization of state-run enterprises, organizational
control for the improvement of productivity and quality, and incentive systems
for labor force management.
Peter Beck in YaleGlobal Online Magazine, 14 February 2006
If the Bush administration had hopes that cracking down on North Korea’s illicit
money laundering activities in Macao last fall would bring Pyongyang back to the
nuclear negotiating table, Kim Jong Il dashed them once and for all with his
field trip to China. Judging by North Korea’s shrill reaction, the sanctions did
hit Pyongyang where it counts, but rather than making North Korea more
acquiescent, the crackdown has pushed the nation further into China’s orbit.
This makes China’s role more important than ever for resolving the nuclear
standoff, and at the same time constrains Washington’s policy choices.
China’s relationship with North Korea is based on mutual economic necessity
rather than political loyalty or shared ideology. Relations are nowhere near as
close as the “lips and teeth” once proclaimed by Beijing. China’s pragmatic
leaders have difficulty relating to their Stalinist counterparts in Pyongyang.
The clothes worn by President Hu Jintao and Chairman Kim during their January
tete-a-tete spoke volumes: The urbane technocrat in a $1,000 suit meets the
recluse in a jumpsuit.
Chinese in regular contact with the North often quietly complain to interviewers
with the International Crisis Group – an independent non-profit NGO that
provides field-based analysis and advocacy to prevent deadly conflict – about
the never-ending difficulties of working with the North. More than a few Chinese
leaders feel Pyongyang is ungrateful for the sacrifices China has made since the
Korean War, which alone took at least 500,000 thousand Chinese lives. There is
not one public memorial in North Korea acknowledging China’s contributions, from
food to fuel to arms. Some analysts even suggest that Beijing would be willing
to abandon North Korea, if that would help in the quest to take Taiwan, and
question whether China would come to Pyongyang’s defense if a second Korean war
were to break out.
Beijing shares Washington’s goal of a nuclear-free North Korea, if for no other
reason than to discourage a nuclear arms race in region, with arch enemies Japan
and Taiwan then quickly trying to catch up. The problem is that Beijing places
far greater priority on North Korean stability and regime survival than on the
peninsula remaining nuclear-free. The cost of conflict or collapse in the North
is too great for Beijing to consider putting serious pressure on Pyongyang, so
long as Kim does not upset the status quo with an overly provocative act, such
as a nuclear test or transfer of nuclear material to a third country. Thus,
China is committed to the six-party nuclear talks as a means of keeping the
lines of communication open and maintaining the status quo. Beijing is satisfied
to play the role of convener and occasionally arbitrator, not dealmaker or
enforcer. Achieving a nuclear accord is purely optional.
As Pyongyang’s economic ties with Japan and the US have atrophied, China and, to
a lesser extent, South Korea have emerged as North Korea’s economic lifebuoys.
However, unilateral assistance is quickly being replaced by trade. Chinese
exports to North Korea rose more than 50% last year to break the US $1 billion
level - comprising nearly half of the North’s imports. During several visits to
the China-North Korea border, in both the east where most ethnic Koreans live
and refugees hide and in the west where most trade takes place, ICG researchers
observed trucks laden with rice and fuel entering the North and iron ore coming
into China. Moreover, China has become a source of crucial infrastructure
investment, including road and port facilities that would give China’s two
landlocked northeastern provinces of Jilin and Heilongjang easy access to
Japanese and South Korean markets. A wave of Chinese consumer goods is washing
over North Korea, accounting for over 80% of such products in North Korean
markets.
South Korean officials almost never admit it openly, but they are increasingly
worried about Beijing’s growing economic influence over the North. North Korea
watchers in Seoul are already referring to the North as “China’s fourth
northeastern province.” Given that China has released a development plan to
reinvigorate this region, such concerns are well founded. Speculation is no
longer whether Chinese forces would enter North Korea in the event of Kim’s
regime collapsing, but how much territory they would try to hold if it did.
Chairman Kim’s fifth and longest trip to China focused on the wellspring of
China’s economic reforms, giving rise to hopes in South Korea that the visit
portends deeper economic reforms and opening. Given reports of banners in the
North proclaiming the success of Kim’s trip to China and the extensive coverage
his trip received on North Korean TV during the Lunar New Year, it is reasonable
to conclude Pyongyang is committed to reform and opening its closed economy more
than ever. But whether that will be enough to be successful remains an open
question.
With the dramatic flair of the armchair movie director he professes to be, Kim
saved the most crucial part of his China trip for the very end: his meeting with
President Hu. China currently holds the biggest potential carrot and stick with
the North. The carrot is the $2 billion economic assistance package rumored to
be offered by Hu during his visit to Pyongyang last October. The stick is in the
form of American pressure to crack down on the North’s remaining banking
activities in China.
However, China opposes sanctions on North Korea because it anticipates they
would lead to instability and, while they would not dislodge the regime, would
damage the nascent process of market reforms and harm the most vulnerable
segment of the population. China’s opposition to aid conditionality and
infringements on sovereignty, as well as its general reluctance to embrace
sanctions, is related to its own quest for reunification with Taiwan – not to
mention human rights issues in Xinjiang and Tibet, and its own economic
interests in Sudan and elsewhere..
Washington must face the fact that there is virtually no circumstance under
which China would use its economic leverage to force North Korea’s compliance on
the nuclear issue. Even though the crackdown on North Korea’s illicit banking
activities in Macao demonstrated that China is not completely immune to outside
pressures to rein in bad behavior, Beijing is unlikely to shut down the North’s
remaining banking activities.
Given the military option is essentially off the table, Washington can either
sit down and undertake real negotiations with North Korea, or accept it as a
nuclear power. Waiting for China to compel North Korean compliance will only
give Pyongyang more time to develop its nuclear arsenal.
Until Beijing, Washington and Seoul can agree on common goals and strategies for
dealing with North Korea, the best we can hope for in the short term is to go
though the motions of negotiations. For now, perhaps the only goal all parties
can agree on is avoiding a crisis, but more meaningful engagement is needed if,
in the long run, North Korea is not to loom as a flash point in Sino-US
relations.
Peter Beck is the Northeast Asia Project Director for the International Crisis
Group. The project’s latest report – China and North Korea: Comrades Forever? –
can be viewed at www.crisisgroup.org.
By Ruediger Frank, September 13th, 2005
Introduction
One would think that after the last decade of intensive contacts, most people
dealing with North Korean officials have finally understood that these men and
women are neither maniac nor irrational, but rather highly professional and well
motivated. Yet to not everyone is ready to treat them as such.
Food aid is one sad example. Why would any state-educated North Korean, who
after decades of anti-capitalist training is constantly on alert, seriously
believe that countries which make their distaste for the regime and its leaders
more than clear almost on a daily basis are ready to provide any kind of
assistance without strings attached - even if they actually were? After all,
this technique is at least as old and as well publicized as Greek mythology and
the Trojan Horse. Consequentially, a deep sense of suspicion on the North Korean
side has to be expected and can indeed be observed.
Against this serious drawback, dozens of NGOs and their staff have worked hard -
much harder than is publicly recognized - for years to convince the North
Koreans at various levels by words and by deeds that they just want to help,
that they are sincere, and that humanitarianism is deeply imbedded in our
culture. And I would like to believe that these efforts were not at all
fruitless, that in addition to alleviating the burden of millions of vulnerable
people they created a fragile although certainly not overly huge amount of
trust.
Unfortunately, we might probably never know whether this shrinking violet ever
grew because it was trampled down under the heavy boots of Cold War warriors who
neither seem to really respect the work of humanitarian aid organizations as
such, nor have the necessary patience to wait until their own strategy produces
results. The latter is truly surprising. Imagine the old Greeks staging a
demonstration in front of Troja's walls complaining that the ingrate Trojans
only pulled one wooden horse inside their city instead of two, and that they
haven't placed the horse in front of the city's barracks so that the Greek
soldiers hidden inside can disarm the Trojan defenders without having to walk
too far.
At this point, it must be stated that I do NOT believe that the NGOs in North
Korea were acting as Western spies or as agents of regime change, and this is of
course where the Trojan Horse analogy is wrong. Their staff worked meticulously
to help suffering people and were not intending much more. However, it would be
naive to expect that the North Koreans ever fully believed that, as would be to
think the Western intelligence community would not have attempted to misuse the
unique access the NGOs have to this white spot on the world map. The pressure is
high; the 2005 report on Iraqi intelligence failures heavily criticizes the
?absence of reliable human intelligence sources inside both countries [Iraq and
North Korea] (see
http://www.counterpunch.org/nader03302005.html).
The North Koreans must always have suspected that Western aid would come at a
dear price. Yet at one point, because of the dire situation of their economy and
after a severe famine, they had no choice but to accept this aid and the
conditions under which is was provided. Among other humanitarian organizations,
the WFP was allowed to establish an office in North Korea that now has over 40
staff who regularly monitor 158 out of 203 counties, with an average of 500
field trips a month (http://www.wfp.org/newsroom/speeches/2005/050420_dir.pdf).
One would think that Western secret services just can't believe their luck and
try to behave as inconspicuously as possible to keep this unique potential well
of detailed and first-hand intelligence sputtering as long as they can.
However, there are voices in America that find it appropriate to demand that all
food aid going to North Korea be channeled exclusively through the WFP (see
http://www.hrnk.org/hunger/recommendations.html and special envoy Jay
Lefkovitz's hint at linking food aid to human rights at
http://english.chosun.com/w21data/html/news/200509/200509090020.html). They
heavily criticize South Korea and China for not doing so, and for thereby
undermining efforts to use food aid as a stick in an unsophisticated,
unidimensional quid-pro-quo game. Rather than understanding that only this
diversification of the sources and methods of foreign assistance made the WFP's
and the other NGO's work easier acceptable for Pyongyang, they demand a de facto
monopolization of food aid by a single organization. Nobel price winning Kim
Dae-jung's words about the importance of engagement seem to be gone with the
wind.
The frustration about the seeming lack of progress is as understandable as it is
noble, although many observers do report changes and some expectations are
simply unrealistic in scope and speed. The monopolization of aid in the hands of
just one organization is a rational demand, but can it survive a reality check?
Such a move would strongly increase the humiliating public awareness of the
North Korean aid receivership. Most importantly, it would lead to the country's
dependency - the word alone is like a red rag to Koreans - on one exclusive
source of aid which could then be turned it into a weapon in, for example, the
Six Party Talks. That is at least how Pyongyang in all likelihood perceives the
whole issue.
Would the North Koreans just sit by and watch how their declared adversaries dig
a tunnel under their fortress? They would be dangerously irrational if they
remained passive. Not all leaders in North Korea have loved the presence of the
WFP in their country and its intense monitoring anyway, so they might be just
glad for this opportunity to get rid of it. And so, it comes as no surprise to
read in the Chosun Ilbo (Sept. 08, 2005,
http://english.chosun.com/w21data/html/news/200509/200509080015.html) that
the World Food Program was asked to shut down its Pyongyang office. The
remaining hope is that this will turn out to be only half the truth, as it was
the case earlier this year when the announced closure of the OCHA office did not
take place.
We know what happens next. The North Koreans will be accused of not being
grateful, the South Koreans will be told that it is their fault, the already
not-so united front of the five nations at the Six Party Talks will be further
weakened, and the North Korean leadership will open a bottle of Champaign. The
status quo will have been preserved once again for a few more months or years.
Those who say the categorical demand for perfect monitoring was well intended
but not wise will, if lucky, be described as naive and told not to forget who
actually is evil and that it would be unthinkable to reward bad behavior. This
might all be true - but meanwhile, the people in the North will continue to live
under unchanged conditions, and we will know less about it.
*Ruediger Frank, a Distinguished Visiting Professor at Korea University, Seoul,
writes: And so, it comes as no surprise to read in the Chosun Ilbo that the
World Food Program was asked to shut down its Pyongyang office. We know what
happens next. The North Koreans will be accused of not being grateful, the South
Koreans will be told that it is their fault, the already not-so united front of
the five nations at the Six Party Talks will be further weakened, and the North
Korean leadership will open a bottle of Champaign.
Joong Ang Ilbo, 9 February 2006
A US official said yesterday that Washington would not consider goods manufactured at an industrial park in the North Korean border city of Kaesong as South Korean products in its free-trade negotiations with Seoul. "In our view, the agreement applies to goods produced only in South Korea and the United States," a senior economic official at the US Embassy in Seoul said at a background press briefing. Asked if that position was negotiable, he said, "We hope that the Kaesong issue won't be a major hurdle in reaching the comprehensive goal of signing the free trade agreement." South Korea has been attempting, with mixed success, to induce its trade partners to consider goods from the complex as domestic South Korean products. About 15 South Korean companies operate there.
Yonhap News Agency reported that the DPRK has been cited as one of the riskiest countries in the world for foreign investors. The Export-Import Bank of Korea said in its latest economic analysis that investors are increasingly wary of the DPRK. Its conclusion was based on risk assessments made by International Investment, PRS Group Inc., Euro-Money and the Organization for Economic Cooperation and Development (OECD). ("N. KOREA RANKED AMONG RISKIEST COUNTRIES FOR INT'L INVESTORS", 2006-02-05)
FEBRUARY 01, 2006 03:04 Dong-A Ilbo
Songchon County in South Pyongan Province is well known for its tobacco. During
the late 18th Century, the area’s tobacco was favored by Korea’s king for its
rich aroma and taste. The late North Korean leader Kim Il Sung once presented
two boxes of the area’s exquisite produce to then South Korean Central
Intelligence Agency Director Lee Hoo-rhak, who played an important role in the
drafting of the July 4, 1972 joint communique. There were rumors that the reason
Lee fell from his position a year later was because of his love for the
tobacco—along with wild speculations that Lee lost the support of then President
Park Chung-hee by smoking it behind his back.
But these days, the soil of the Songchon county is not what it used to be. It’s
been heavily polluted by chemical fertilizers, and the area’s only remaining
traditional tobacco plantation is what is known as the Ninth North Korean
Tobacco Production Facility. Songchon County tobacco adopted “Crown,” a British
brand name, in the early 90s and built a cigarette factory in Yongsong,
Pyongyang. At the same time, the North started manufacturing the “555” brand for
British American Tobacco (BAT) at a factory in Hoiryong of North Hamgyong
Province. Since then, the North has provided the tobacco for a number of
counterfeit brands as well, such as fake versions of Marlboro and BAT’s “Craven
A.” The target market for these products was usually China. There has even been
testimony that Chinese gangs invested in the production of counterfeit
cigarettes.
A special working group, known as the “Baekdoraji (white bellflower) group,”
developed among several northern region tobacco plantations during the mid
1990s. “White bellflower” is a pseudonym for opium. The group planted opium in
the area’s most fertile land and cultivated it. In July, even young students
pitched in to extract opium juice. Students often passed out during the process
because of opium’s foul smell, and it was standard procedure for ambulances to
be standing by. All that is left of the plant after the juice extraction process
are sweet yellow seeds that resemble hulled millet, which became a popular snack
among children, and which tragically led to many underage opium addicts. The
procurement of supplies and fertilizer for the “Baekdoraji group” was a priority
of the government. Even fertilizer from South Korea has been used for opium
plantation. Lately, however, opium production has been on the wane. The main
reason is because the opium is piling up in North Korea’s inventory.
by Mark Manyin, Congressional Research Service, 31 January 2006
This report summarizes US aid to the Democratic People's Republic of North Korea
(DPRK, also known as North Korea). It will be updated periodically to track
changes in US provision of aid to North Korea. A more extended description and
analysis of aid to North Korea, including assistance provided by other
countries, is provided in CRS Report RL31785, Foreign Assistance to North Korea.
Since 1995, the United States has provided over $1.1 billion, about 60% of which
has paid for food aid. About 40% was energy assistance channeled through the
Korean Peninsula Energy Development Organization (KEDO), the multilateral
organization established in 1994 to provide energy aid in exchange for North
Korea's pledge to halt its existing nuclear program. US assistance to North
Korea has fallen significantly over the past three years. The KEDO program was
shut down in January 2006.
Food aid has been scrutinized because the DPRK government restricts the ability
of donor agencies to operate in the country. Compounding the problem is that
South Korea and China, by far North Korea's two most important providers of food
aid, have little to no monitoring systems in place.
This may help explain why, in the summer of 2005, the North Korean government
announced it would no longer need humanitarian assistance from the United
Nations, including from the World Food Program (WFP), the primary channel for US
food aid. Part of Pyongyang's motivation appears to be a desire to negotiate a
less intrusive monitoring presence. In response, the WFP shut down its
operations and the United States has suspended its food aid shipments. The WFP
is negotiating a scaled-down "development" assistance program with the North
Korean government. It plans to present its plan to its Executive Board members
in February 2006. The WFP says that food conditions have worsened for some
groups since North Korea introduced economic reforms in 2002. US officials,
including President Bush, have indicated that United States development
assistance might be forthcoming if North Korea begins dismantling its nuclear
programs.
JANUARY 28, 2006 Dong-A Ilbo
On January 2, the North Korean Workers’ Party banned the use of “Ttororegi”
boats (wooden motor boats) for fishing. North Korean fishermen have had to use
rowboats to fish ever since. For the past 10 years, Ttororegis have been North
Korea’s main fishing vessels. About five meters long and capable of seating
three to four people, tens of thousands of Ttororegi equipped with four to five
horsepower engines used to ply their trade along the East and West Sea coasts.
Larger vessels are too expensive for North Korean fishermen to operate.
Sometimes the boats drifted into South Korean territorial waters.
Lee Sung Ju, a fisherman from Nason, North Hamgyong Province, exploded in anger
after learning of the ban, saying, “This is all because of the Russians.” Up
until two years ago, he was a successful fisherman. He owned his own Ttororegi,
and his fishing skills were good enough to earn him more than $1,000, yearly.
During winter and spring, he harvested octopus and sea urchin, and in summer and
autumn he caught cuttlefish for a living. His wife even graduated from a
prestigious university.
Though often life threatening, fishing is one of the most highly profitable
occupations in North Korea. Its popularity is roughly comparable to medicine in
South Korea. It is said that the three best jobs in North Korea are public
officials, fishermen, and women without husbands who often run profitable
businesses. Because marine products are easily sold to overseas consumers, North
Korea’s move toward capitalization is beginning in its fishing industry.
cuttlefish sells in the North at 30 percent of what it sells for in the South.
Though approximately 10 percent of that is then surrendered to relevant
authorities, there is no occupation more profitable in North Korea than fishing.
It also helps that exporting institutions keep raising prices. Fishermen are
popular as prospective bridegrooms in North Korea.
But Lee’s life took a turn for the worse last year. After setting out for a day
of cuttlefish harvesting in July, his boat drifted off Vladivostok, where he was
captured and treated as a spy by Russian officials. He was teased and told that
it was impossible for him to have drifted so far in such a puny boat. They threw
in him prison, where he met dozens of fellow North Korean fishermen who had been
detained behind bars for the same reason. When Russia sent Pyongyang its list of
imprisoned fishermen, the North Korean government announced to their family
members that they would have to pay 500,000 won ($200) to Russia each. Lee could
only return after his family paid the fine.
Last December, Lee heard that the North Korean Coast Guard apprehended the
Russian cargo vessel Ternei for illegal entry into North Korean territorial
waters. Lee was pleased. “Good. We should pay them back,” he said. Lee believes
that the Ttororegi ban resulted from Russian complaints. Although he feels that
innocent fishermen should not have to suffer the consequences, he has no choice
but to keep fishing in a rowboat.
by Myoung-Gun Lee, Donga Ilbo, 22 December 2005
December 15 marked the one-year anniversary of the Kaesong Industrial Complex,
the symbol of inter-Korean economic cooperation. Unification Minister Chung
Dong-young, who is visiting the USA, met with US Secretary of State Condoleezza
Rice on December 20 and said, "Next year's core business will be the development
of the main section of the Kaesong Industrial Complex." Chung also asked Deputy
Secretary of Commerce David Sampson for a US corporate presence in the
industrial complex.
This article deals with the potential and the problems of the Kaesong Industrial
Complex, and will evaluate whether the combination of South Korea's technology
and capital and the North's manpower will be able to open a new era in which the
two Koreas can prosper together.
"You can't sit on the production line like that," said a South Korean technology
supervisor. "Sorry. I'm not accustomed to this," responded a North Korean
worker.
The training room of "A" company in the pilot complex in the Kaesong Industrial
Park has recently been filled with non-skilled North Korean workers receiving
technology training. As only 10 percent of workers from the North have work
experience in this field, the company is spending a lot of time and resources in
giving technology training to the remaining workforce.
The biggest strength of the Kaesong Industrial Complex is cheap labour. An
average North Korean worker receives $57.50 (approximately 58,000 won) in
monthly wages. But the problem is the quality of the labour. North Korean
workers still lack technological skills. A total of 11 companies are operating
in the 28,000-pyeong pilot complex. Four other companies are preparing for
operation or building plants. The South Korean government is planning to develop
a one-million-pyeong main complex by late next year to attract 300 companies,
but it is still uncertain whether the North could provide sufficient quality
labour. Also, nobody knows how long labour costs would remain low.
Companies in the pilot complex want workers aged 35 or younger with endurance
and relatively good ability to acquire skills. An executive of "B" company said,
"Although we requested the North to fill the factory workforce with young
workers in their 20s and 30s, people in their 40s and 50s account for more than
half of the workforce." The president of "C" company said, "If one sets the
level of a South Korean worker at 100, that of a North Korean worker currently
stands at 60 to 70."
Nonetheless, companies in the industrial complex and the government generally
assess that the North's workers are acquiring skills more quickly than expected.
The government decided to open a job training center in the industrial complex
by 2007 to offer North Korean workers well-organized technology training. An
official at "D" company said, "It is worth trying if we can improve North Korean
workers' skills and eliminate waste resulted from a slowed supply of raw
materials and exports by streamlining traffic and the customs clearance
process."
There is prevailing concern that the North would lack the absolute amount of
labour force if companies begin to enter the main complex in full swing The
unification minister expects that 70,000 to 100,000 North Korean workers are
needed to operate 300 companies in the main complex. The unification minister
said last month in a lecture on the invitation of Korea-based diplomats, "About
1,000 companies will do business in the Kaesong Industrial Complex within three
years, and the workforce which currently stands at some 6,000 will grow to
300,000 to 400,000 in three or four years."
Dong Myeong-han, a director of inter-Korean cooperation at Small Business
Corporation, said, "Although only 11 companies are operating in the pilot
complex, manpower around Kaesong area is already stretched thin," and further
pointed out, "The problem is where we can get tens of thousands of workers that
will be needed in the future." In response, Pyongyang is just repeating that it
would input "military" or militia organization without unveiling a concrete
plan.
Seoul does not have a clear alternative either. An official said, "Technically,
the North should resolve the manpower problem, but it is hard to know where and
how it would provide it."
The regulation of labour in the Kaesong Industrial Complex states that wages for
employees shall not be raised by more than five percent of the previous year's
minimum wage, with the minimum wage being $50 a month. In this sense, there is
no need to worry about soaring wages.
However, an official at "E" company predicted, "If employees stage a strike
demanding a raise and the North authorities promote or support it when hundreds
of companies are operating in the complex, companies would not be able to
sustain their business there." For sure, there is also an opposing view, which
says that North Korean authorities will not allow soaring wages because they are
developing the entire North Korea into an industrial park modeled after the
Kaesong Industrial Complex.
There is a mixed view of cautious optimism and realistic concerns about the
future of the Kaesong Industrial Complex. Optimism is mostly based on the
willingness and necessity of South and North Korean authorities to make the
industrial complex a success. The issue is to prevent non-economic variables,
such as the North Korean nuclear problem, from hindering advancement of the
industrial complex, and to secure better profitability than other production
bases with cheap labour, including China and Vietnam.
by Kim Sung-jin, Korea Times, 16 December 2005
The gross national incomes (GNI) of South and North Korea showed the widest gap
ever in 2004. The National Statistical Office (NSO) said that South Korea's GNI,
the nation's real purchasing power, was 32.8 times larger than that of the
reclusive communist nation last year. A statistical comparison between the two
Koreas released Thursday by the NSO showed that North Korea's GNI stood at $20.8
billion last year, far smaller than $681 billion of the South. Per-capita gross
national income of the South reached $14,162, about 1,550 percent greater than
the North's $914. The gap in per person national income widened from $5,005 in
1990 to $10,398 in 1995, $10,084 in 2000 and $11,902 in 2003.
The widening gap is attributed to a recent surge in the South's per capita
national income, which jumped to $12,720 in 2003 from $11,499 in 2002, and the
dwindling income of the North. The North's per capital national income shrank to
$757 in 2000 from $1,142 in 1990, but recovered slightly to $818 in 2003. Seoul
and Pyongyang revealed greater disparity in gross annual trade. The combined
exports and imports of the South totaled $478.31 billion in 2004, about 167
times greater than $2.86 billion of the North. The gap in trade between the
South and the North peaked in 1999, when the South's trade was 178 times greater
than the North's. The North managed to narrow the gap down to 139.2 times in
2002 but it again widened to 155.9 times in 2003. The inter-Korean merchandise
transaction contracted by 3.8 percent from a year ago to $697.04 million.
The disparity was also evident in oil demand. The South imported a total of
825.79 million barrels of crude oil in 2004, 211.7 times as much as 3.9 million
barrels purchased by the North. The South had 60 times as many automobiles as
the North with the former owning a total of 14.93 million units and the latter
249,000 units. Compared with the figures in 1970, the number of cars in the
North grew only 360 percent in 2004 while that in the South increased by over
100 times. In addition, the South had 293 civil aircrafts while the North owned
a mere 20.
The South's population amounted to 48.08 million, twice the North's 22.71
million. South Korea ranks 25th in the world by population and North Korea 47th.
When combined, Korea has the 18th-biggest population in the world. The
male-to-female ratio stood at 101.6:100 for the South, meaning that there are
101.6 men per 100 women, while the North's population consisted of 96.7 men per
100 women. The NSO said the sex ratio balances when combining the population of
the South and the North, but the male population has been growing at a faster
rate in both the South and the North since 2000.
By Seo Dong-shin & Joint Press Corps, 15 September 2005
PYONGYANG, North Korea _ North Korean officials pledged not to abandon the
tourism business at Mt. Kumgang, which is run by Hyundai Asan from the South,
according to Unification Minister Chung Dong-young, who is visiting Pyongyang
for the 16th round of inter-Korean Cabinet talks.
Ri Jong-hyuk, vice chairman of the North’s Asia-Pacific Peace Committee which
oversees the tourism business with the South, will soon meet Hyun Jeong-eun,
chairwoman of the South’s Hyundai Group, to resolve the frictions, Chung told
reporters Thursday, quoting unnamed North Korean officials. Hyundai Asan, a
business arm of the Hyundai Group, has had de facto exclusive rights to organize
South Korean tourists’ trips to the North, since the late Chung Ju-yung, founder
of the group, initiated the project in 1998.
But relations have turned sour recently after Hyun sacked Hyundai Asan CEO Kim
Yoon-kyu for his alleged embezzlement. Kim has participated in the tourism
project from the beginning with late chairman Chung and has built close ties
with North Korean officials. The North responded to Kim’s dismissal last month
by announcing it would halve the number of South Korean visitors to Mt. Kumgang
from this month to 600 per day.
The North’s change of attitude came a day after Minister Chung said the Seoul
government would actively mediate between North Korea and Hyundai as the tourism
business at Mt. Kumgang involves the South’s taxpayers’ money. ``I stressed that
the recent steps of the North angered the public opinion in the South and that
the breakdown of the Mt. Kumgang tours, a symbolic business for inter-Korean
economic cooperation, would be bad for the North as well as the South,’’ Chung
said.
North Korean officials agreed, while saying that they were ``very disappointed’’
with the rupture in the business caused by Hyundai’s internal feuding and that
they had had doubts on the company’s will to pursue the business further,
according to Chung. But they had no intention to drop the business altogether
and made it clear that they believed ``things will get better,’’ Chung said. The
unification minister also said it would be ``common sense’’ to expect the North
will continue the tourism business with Hyundai.
Earlier, rumors had it that the North might change its Southern business partner
to Lotte Tours. On Tuesday, the company claimed that it received an offer to
participate in the tourism project from the North. Chung, who is deeply involved
in the 6-nation talks on the North’s nuclear programs, said that he delivered a
U.S. message to the North which he received from Christopher Hill, U.S.
assistant secretary of state in Seoul Monday.
In the message, the U.S. said that it hoped substantial progress would be made
at the six-nation talks in Beijing, Chung said. ``Hill said that the U.S.’ will
to normalize its ties with North Korea remains unchanged and that the Beijing
talks are a good opportunity to build mutual trust between them,’’ Chung said.
Chung said he also delivered a message from Japanese Prime Minister Junichiro
Koizumi to the North, which called for an early resumption of the talks to
normalize ties between Japan and North Korea. The North did not respond
immediately, but South Korean delegates told their Northern counterparts that it
would help improve their bilateral relations, according to Chung.
The Korea Times reported that former Hyundai Asan CEO Kim Yoon-kyu, who was fired by Hyundai for his alleged embezzlement, has expressed his willingness to continue to play a role in boosting economic cooperation between the ROK and the DPRK. "The inter-Korean economic cooperation projects should continue to work toward the reunification of the separated Korea", Kim said. ("KIM HOPES TO CONTRIBUTE TO S-N COOPERATION", 2005-09-15)
The Korea Herald reported that the DPRK put more strain on its ties with Hyundai Asan by proposing yesterday that Lotte Tours Co. to take part in the tours to Gaesong. "The action that the North has taken is clearly a management intervention, and their offer to Lotte is a clear breach of trust," said Im Wan-geun, the director of the Inter- orean Economic Association. Hyundai Asan officials call for exclusive rights to the tours, saying it signed a contract with the DPRK government in 2000 that includes Gaesong as one of its exclusive tours. The DPRK contends that the recent change is due to alterations made to its tourism policies. Lotte officials say they need time to consider the offer. ("NORTH KOREA GIVES HYUNDAI COLD SHOULDER IN GAESEONG TOUR", 2005-09-14)
By Ruediger Frank, September 13th, 2005
One would think that after the last decade of intensive contacts, most people
dealing with North Korean officials have finally understood that these men and
women are neither maniac nor irrational, but rather highly professional and well
motivated. Yet to not everyone is ready to treat them as such.
Food aid is one sad example. Why would any state-educated North Korean, who
after decades of anti-capitalist training is constantly on alert, seriously
believe that countries which make their distaste for the regime and its leaders
more than clear almost on a daily basis are ready to provide any kind of
assistance without strings attached - even if they actually were? After all,
this technique is at least as old and as well publicized as Greek mythology and
the Trojan Horse. Consequentially, a deep sense of suspicion on the North Korean
side has to be expected and can indeed be observed.
Against this serious drawback, dozens of NGOs and their staff have worked hard -
much harder than is publicly recognized - for years to convince the North
Koreans at various levels by words and by deeds that they just want to help,
that they are sincere, and that humanitarianism is deeply imbedded in our
culture. And I would like to believe that these efforts were not at all
fruitless, that in addition to alleviating the burden of millions of vulnerable
people they created a fragile although certainly not overly huge amount of
trust.
Unfortunately, we might probably never know whether this shrinking violet ever
grew because it was trampled down under the heavy boots of Cold War warriors who
neither seem to really respect the work of humanitarian aid organizations as
such, nor have the necessary patience to wait until their own strategy produces
results. The latter is truly surprising. Imagine the old Greeks staging a
demonstration in front of Troja’s walls complaining that the ingrate Trojans
only pulled one wooden horse inside their city instead of two, and that they
haven’t placed the horse in front of the city’s barracks so that the Greek
soldiers hidden inside can disarm the Trojan defenders without having to walk
too far.
At this point, it must be stated that I do NOT believe that the NGOs in North
Korea were acting as Western spies or as agents of regime change, and this is of
course where the Trojan Horse analogy is wrong. Their staff worked meticulously
to help suffering people and were not intending much more. However, it would be
naive to expect that the North Koreans ever fully believed that, as would be to
think the Western intelligence community would not have attempted to misuse the
unique access the NGOs have to this white spot on the world map. The pressure is
high; the 2005 report on Iraqi intelligence failures heavily criticizes the
“absence of reliable human intelligence sources inside both countries [Iraq and
North Korea]” (see
http://www.counterpunch.org/nader03302005.html).
The North Koreans must always have suspected that Western aid would come at a
dear price. Yet at one point, because of the dire situation of their economy and
after a severe famine, they had no choice but to accept this aid and the
conditions under which is was provided. Among other humanitarian organizations,
the WFP was allowed to establish an office in North Korea that now has over 40
staff who regularly monitor 158 out of 203 counties, with an average of 500
field trips a month (
http://www.wfp.org/newsroom/speeches/2005/050420_dir.pdf ). One would think
that Western secret services just can’t believe their luck and try to behave as
inconspicuously as possible to keep this unique potential well of detailed and
first-hand intelligence sputtering as long as they can.
However, there are voices in America that find it appropriate to demand that all
food aid going to North Korea be channeled exclusively through the WFP (see
http://www.hrnk.org/hunger/recommendations.html and special envoy Jay
Lefkovitz’ hint at linking food aid to human rights at
http://english.chosun.com/w21data/html/news/200509/200509090020.html). They
heavily criticize South Korea and China for not doing so, and for thereby
undermining efforts to use food aid as a stick in an unsophisticated,
unidimensional quid-pro-quo game. Rather than understanding that only this
diversification of the sources and methods of foreign assistance made the WFP’s
and the other NGO’s work easier acceptable for Pyongyang, they demand a de facto
monopolization of food aid by a single organization. Nobel price winning Kim
Dae-jung’s words about the importance of engagement seem to be gone with the
wind.
The frustration about the seeming lack of progress is as understandable as it is
noble, although many observers do report changes and some expectations are
simply unrealistic in scope and speed. The monopolization of aid in the hands of
just one organization is a rational demand, but can it survive a reality check?
Such a move would strongly increase the humiliating public awareness of the
North Korean aid receivership. Most importantly, it would lead to the country’s
dependency - the word alone is like a red rag to Koreans - on one exclusive
source of aid which could then be turned it into a weapon in, for example, the
Six Party Talks. That is at least how Pyongyang in all likelihood perceives the
whole issue.
Would the North Koreans just sit by and watch how their declared adversaries dig
a tunnel under their fortress? They would be dangerously irrational if they
remained passive. Not all leaders in North Korea have loved the presence of the
WFP in their country and its intense monitoring anyway, so they might be just
glad for this opportunity to get rid of it. And so, it comes as no surprise to
read in the Chosun Ilbo (Sept. 08, 2005,
http://english.chosun.com/w21data/html/news/200509/200509080015.html) that
the World Food Program was asked to shut down its Pyongyang office. The
remaining hope is that this will turn out to be only half the truth, as it was
the case earlier this year when the announced closure of the OCHA office did not
take place.
We know what happens next. The North Koreans will be accused of not being
grateful, the South Koreans will be told that it is their fault, the already
not-so united front of the five nations at the Six Party Talks will be further
weakened, and the North Korean leadership will open a bottle of Champaign. The
status quo will have been preserved once again for a few more months or years.
Those who say the categorical demand for perfect monitoring was well intended
but not wise will, if lucky, be described as naive and told not to forget who
actually is evil and that it would be unthinkable to reward bad behavior. This
might all be true - but meanwhile, the people in the North will continue to live
under unchanged conditions, and we will know less about it.
Agence France Presse reported that according to energy experts, the DPRK’s power grid is too primitive to handle the capacity that would be provided by the nuclear plants it is demanding. The DPRK wants the international community to complete construction of two light-water reactors, under the auspices of the Korean Peninsula Energy Development Organizaton (KEDO). “To consume the electricity generated by such reactors, North Korea would need a power grid 10 times the size of what they now have," said ROK nuclear expert Kang Jungmin. ("NORTH KOREA NEEDS POWER, BUT SHOULD IT BE NUCLEAR?", 2005-09-12)
North Korea reportedly turned up its nose at any more food aid from the UN and
asked the World Food Program early last month to shut its Pyongyang office. A
South Korean official said the North last year also vowed to turn down any
further humanitarian aid from international bodies, and Seoul was trying to work
out what exactly Pyongyang wants.
There are said to be two reasons. One is that Seoul promised the North
substantial food aid that allowed Pyongyang to cover its shortfall to some
extent. It was initially estimated to be short 890,000 tons of food this year,
but the gap has been narrowed after the South offered 500,000 tons and China
150,000 tons. It also appears North Korea's domestic food production increased
once the South provided 400,000 tons of fertilizer.
Pyongyang is also riled by attempts by the WFP, which was providing about
100,000 tons of aid, and other international bodies to monitor where the aid is
going. The WFP continually tries to check whether food aid is being diverted to
the military. Last year, when its shortage grew serious, Pyongyang cooperated
with the monitoring efforts by the WFP, but now it says they are interference in
its internal affairs.
Experts say the Stalinist country is trying to reduce aid from bodies that want
to see where their aid is going and replace it with aid from South Korea and
China, which stand accused of not doing enough to monitor distribution. "The
international community is demanding that Seoul gives aid to the North through
international bodies with sure monitoring systems,” says Kwon Tae-jin, a fellow
of the Korea Rural Economic Institute (KREI). “If we cannot cooperate with the
international community, the effectiveness of our aid could be halved."
However, a South Korean official denied food aid from Seoul could be diverted to
the military. Each time it sends 100,000 tons of aid to the North, Seoul says it
verifies distribution in four areas including Pyongyang. “This year, we'll
conduct about 20 monitoring sessions," a government official said.
By Anna Fifield in Seoul, The Financial Times, 11 September 2005
A London-based fund is offering adventurous investors the chance
to participate in one of the last frontiers of global finance, through the
soon-to-be launched $50m Chosun Development and Investment Fund dedicated to
North Korea.
The communist stronghold – with its moribund economy, irascible regime and proud
possession of nuclear weapons – might not seem like an obvious place to seek a
return, but the fund's managers say it offers rewards commensurate with the
risk. It has the added aim of trying to help North Korea pull itself out of its
economic malaise.
"We want people to know that there is an alternative way to help North Korea,"
said Colin McAskill, chairman of Koryo Asia, the fund's investment adviser, and
a director of Anglo-Sino Capital, the fund manager. "We also want to give the
North Koreans a chance to prove themselves in the commercial world by complying
with international law and completing their commitments," said Mr McAskill, a
Briton who has had business dealings with North Korea since 1978.
The fund manager has submitted a licence application to the Financial Services
Authority in London and now is heading to Hong Kong, Beijing and Seoul to drum
up interest in the Chosun fund, whose name means "North Korea" in North Korean.
It aims to raise $50m, with the option of doubling that amount if interest is
high, to invest in sectors that can earn foreign currency for North Korea –
particularly mining and minerals – and that will help regenerate the economy.
"This is going to be a means for them to have cashflow other than from arms and
counterfeit goods," Mr McAskill said.
The fund might also help North Korea to repay some of the London Club debt on
which it defaulted in 1976, now worth about $1.6bn including $900m in interest.
Although North Korea might not present the most stable of environments, Kim
Jong-il's regime declared embarked on tentative economic reforms three years
ago. Amid spiraling inflation and widening social disparities, it is now trying
to maintain control while seeking further foreign capital.
The fund managers concede the environment might seem somewhat inhospitable, but
say returns will reflect that, as well as offering the chance to participate in
larger and more lucrative ventures later. Anglo-Sino is chaired by Robin Fox,
vice chairman of Dresdner Kleinwort Benson until 1996, and its advisers include
Lynn Turk, a former State Department official who led the US's first diplomatic
delegation to Pyongyang in 1994 and helped negotiate that year's nuclear treaty.
Chosun Ilbo reported that the DPRK is trying to attract foreign investments at a meeting of overseas Korean entrepreneurs taking place in Mexico City. The meeting kicked off on Wednesday, and it's the first time the DPRK has been represented in the global business network.- DPRK participants said they want to see how the capitalist economy works and learn international business techniques.- All participants voiced their hope to see business activities between the two Koreas increase. ("NORTH KOREA HOPES TO ATTRACT FOREIGN INVESTORS", 2005-09-09)
Yonhap News reported that the DPRK argued Saturday that it has made a big advance in various sectors ranging from electricity to farming since it adopted the "military first" policy two decades ago.- "For the past 10 years, the country has seen a great advance in industrial development," the Korean Central Television Broadcasting Station said. "The hydroelectricity capacity more than doubled compared with 1995."- "Small and large fishing farms were created, and so the total size of fishing increased more than five times compared with five years ago and the production of fish farms rose more than seven times," the broadcaster said. ("N. KOREA CLAIMS LEAP IN INDUSTRIAL DEVELOPMENT SINCE 1995", 2005-09-03)
North Korea’s gap between rich and poor has been growing since the Stalinist country started economic reforms in 2002. While some have managed to better themselves to form something of a nouveau riche class, more than 70 percent are now getting only about half the needed calorie intake from state-run food distribution centers, the Financial Times reported Friday.
The World Food Program’s North Korea director Richard Ragan told
the paper the wealthy are concentrated in five cities, including Pyongyang. They
are the group that can be seen going to work on their bicycles, which cost
triple the average monthly salary in North Korea. The newly affluent work mostly
in retail and service industries and include tailors, ice cream sellers and bike
repairmen who make money in general markets, which have multiplied to some 300
since 2002. Some farmers selling surplus produce are also part of what passes
for a wealthy class in North Korea.
Most of those working in industrial production subsist below the minimum level,
and tens of thousands of industrial workers in towns like Hamhung or Kimchaek
are losing their jobs. Among those able to work, 30 percent are unemployed, and
70 percent of the population receives 250-380 grams of food a day from state-run
food distribution centers -- no more than half the necessary daily intake of
nutrients. The FT said the country as a whole is experiencing 130 percent
inflation but poverty is no longer shared equally.
Chosun Ilbo reported that the gap between rich and poor in the DPRK has been growing since the country started economic reforms in 2002.- Most of those working in industrial production subsist below the minimum level, and tens of thousands of industrial workers in towns like Hamhung or Kimchaek are losing their jobs. Among those able to work, 30% are unemployed, and 70% of the population receives 250-380 grams of food a day, or about half the necessary daily intake of nutrients, from state- un food distribution centers.- The DPRK as a whole is experiencing 130% inflation but poverty is no longer shared equally.- According to the WFP's DPRK Director Richard Ragan, the wealthy are concentrated in five cities, including Pyongyang. ("GAP BETWEEN RICH AND POOR IN NORTH KOREA GROWING", 2005-09-02)
by Yoo Jee-ho, JoongAng Daily, August 30, 2005
Hyundai Asan Corp. officials said yesterday that North Korean government officials asked the company to reduce the number of South Koreans visiting the Mount Kumgang resort, in response to the recent dismissal of Kim Yoon-kyu as chief executive.
North Korea's request was discussed at a meeting at Mount
Kumgang last weekend, according to Hyundai Asan officials, when the North Korean
side reportedly clarified that its demand was based on Mr. Kim's dismissal. "We
had been aware of North Korea's concern over Mr. Kim's status," said a Hyundai
Asan official. "But we never expected this would have any direct influence on
our business."
Since the 1990s, Mr. Kim is known to have played an instrumental role in
launching Hyundai Asan's tourism projects in North Korea, including at Mount
Kumgang since 1998. He was also a key figure in reaching an agreement in July
which is expected to allow South Koreans to visit Kaesong and Mount Paektu.
However, he was fired on Aug. 19, reportedly due to corrupt behavior.
Observers say his dismissal was motivated by current Chairwoman Hyun Jeong-eun's
desires to make Hyundai a family-run company. Ms. Hyun's daughter was recently
hired and accompanied her mother to North Korea, where she met with Kim Jong-il
in July. Drawing around 1,200 South Korean tourists a day so far this year to
Mount Kumgang, Hyundai Asan had expected the resort to help provide its first
profitable year since the company's founding in 1999.
Anna Fifield, Financial Times, August 15-23, 2005
...We journalists are always writing about how North Korea is the most reclusive
country in the world. Not having been to Turkmenistan or Togo, I am not
qualified to state whether this is true. But I have nevertheless been conducting
my own social survey over the past few days to assess just how much seeps into
this “outpost of tyranny”, as the Bush administration puts it.
What I have discovered is not typical across North Korea – I have been largely
confined to Pyongyang, most of whose 1.5m citizens are members of the Korean
Workers’ Party and are therefore the most privileged. The people with whom I
have interacted outside the capital are usually specially trained to deal with
foreigners. But I have been collecting some anecdotal evidence to try to shed a
little more light on this most unknown of places.
Poor Mr Ri – my guide, translator and beer-drinking companion – has been
subjected to a slew of questions in the name of this experiment. We have
discussed the minimum number of pixels needed in a digital camera, the merits of
Tchaikovsky over hip-hop, the Michael Jackson trial, and German ketchup. But I
discarded his answers on the grounds that he is a well-travelled diplomat and
therefore not representative.
So I moved my interrogation to Mr Baek, our driver, an everyday Korean with two
teenage sons, who whiles away the hours waiting for me by reading the selected
works of Kim Jong-il. Mr Baek reveals an entirely different picture from Mr Ri.
He has never heard of Britney Spears or David Beckham, and admits he doesn’t
know the Pope has died or the renminbi has been revalued, after which he tells
me he doesn’t care much for newspapers. ( Mr Ri chips in at this stage with word
of a coup d’état in Mauritania).
Over at the Revolutionary Museum of Culture, a testament to Kim Jong-il’s love
of cinema, the guide showing me the props of North Korean classics such as Sea
of Blood and Our Nation Our Destiny, scrunches up her face when I ask her if the
names Julia Roberts, Tom Cruise or Steven Spielberg mean anything to her.
She has seen some Russian and Chinese films, but tells me she has yet to watch
one from South Korea or the US. (Traders are reportedly bringing in stacks of
South Korean television series, but I have yet to meet someone who will admit to
having watched them.) She gets her own back by asking if I have seen any North
Korean movies.
Then at one of the North’s most successful state companies, the Pyongyang wire
factory, which makes electrical and telecommunications cables, the manager gives
me a blank stare when I say the name Bill Gates.
Sure, it was somewhat unfair of me to ask mainly about western stars and events.
But if these names, which are known relatively widely in Asia as well as the
west, mean nothing to these privileged citizens, one can only wonder if any
outside information is available to the bedraggled people I saw sitting outside
Pyongyang station, let alone the 20m-plus North Koreans who do not live in the
capital.
In this nation, information is power. Recent television news has featured a
programme of natural disasters in other countries – perhaps preparing the ground
for news of another food shortage in North Korea – and has a predilection for
reports that cast a bad light on the US.
When I dropped in on an English class in the Grand People’s Study House – the
600-room, 30m tome library and general self-improvement centre overlooking Kim
Il-sung Square – the students were discussing the Gaza pull-out and the Iraqi
constitution. But they keep abreast of world events only through the
aforementioned state media, because the internet is still banned for private
users and highly restricted even for state institutions.
However, consumerism is increasingly coming to North Korea. From my highly
scientific research, I can unequivocally state that: The Asian love of the
Burberry pattern has spread to North Korea, most frequently in the form of
shirts. I have also seen Koreans carrying fake Louis Vuitton bags.
There are a surprising number of cars on the roads of Pyongyang, including new
Audis with private licence plates and gleaming Volkswagen Passats with state
plates, Hyundais from the imperialist flunkey South Korea, as well as a
catalogue of badly panel-beaten trucks and buses that would be in vintage
collections (or scrapheaps) in the south.
Foreign dishes are generally available in hard currency restaurants. In one
place serving the usual array of seafood dishes and kimchi pickles, Mr Baek
ordered curry washed down with iced coffee from a can, while Mr Ri and I drank
Heineken. I was offered Parmesan cheese for my tofu.
In Tongil market, a showcase bazaar that the authorities like foreigners to see
as evidence of its openness, a shopper with local currency can buy cosmetics
from South Korea and Japan, Italian biscotti, Donald Duck and Tweety Bird
paraphernalia, and multimedia computer speakers from China.
Once known as the Hermit Kingdom, it seems North Korea is increasingly
tolerating the inward flow of foreign goods, if not yet information. But the
latter can surely not be too far behind Mickey Mouse and Coca-cola....
By ANNA FIFIELD, 19 August 2005, Financial Times
In a business world overrun with MBAs, it can be difficult to stand out from the
crowd. But one new qualification is guaranteed to jump off the CV: a degree from
the Pyongyang Business School.
As North Korea's economic reforms trickle through to the factory level, company
managers in this communist stronghold are now learning about market research,
buyer behaviour and even e-commerce.
With its first graduates having just received their diplomas, the privately-run
Pyongyang Business School is setting its sights on offering a Master of Business
Administration.
"We want to help this country to develop and also to find qualified people for
our own enterprises here," says Felix Abt, the ABB and Sandvik representative
who acts as the school's director and chairman of the European Business
Association in Pyongyang.
"We think all these efforts with food aid are not leading far. It's better to
make sure there is food security and that industry can earn enough hard currency
to pay for fuel and raw materials," Mr Abt says.
While it remains the most tightly sealed country in the world, North Korea is
tentatively opening up to foreign investment and to the ideas that have created
an economic explosion in neighbouring China. English teachers in Pyongyang
report that, when asked what they want to be when they grow up, children are
increasingly answering "businessman".
Company managers have more scope than ever since the economic reforms of 2002,
when previously centralised decision-making was devolved to state corporations.
This means they have had to learn the basics of capitalist-style management,
such as how to turn quick profits. The business school, funded by the Swiss
government's Development Corporation Agency, was established to help teach these
new concepts.
Lecturers are flown in from companies including ABB, the engineering group and
SKF, the ball-bearing maker, as well as several international banking firms and
other well-known global companies.
Seminar texts have titles such as "Introduction to international commercial law"
and "Strategy and strategic management," and 30 students from state shoe
factories, medicinal producers and industrial plants have just graduated from
the first intake.
Kang Chun-il, one of the graduates, told a state publication the course had
helped him set high aims for the high-technology service centre he manages,
which offers a digital imaging facility and electronic reading room.
"Our aim is to raise the country's economy and technology to a world-leading
level as soon as possible and, with this in mind, we welcome all partners who
want true and practical co-operation with us," Mr Kang said.
Even at the University of National Economy, which still rigorously adheres to
North Korea's unique juche (self reliance) philosophy, some cautious
modifications have been introduced.
"Our courses have changed, particularly with regards to modernising the national
economy," says Seo Jae-yong, a professor at the technical institute, which
teaches managers working at state, provincial and county level. "We are looking
at the experiences of China and the Soviet Union and trying to strengthen our
economy and encourage grass-roots creativeness."
The concepts of efficiency and profit are becoming more mainstream. The regime's
New Year message, which sets out the priorities for the next 12 months, urged
North Koreans to "effect an unprecedented boost in production on the basis of
the solid foundation for building a great prosperous powerful nation".
Not that teaching capitalist theory to people who have grown up on a diet on
Marx, Lenin and juche philosophy is plain sailing.
Foreign investors say that when discussing SWOT (strengths, weaknesses,
opportunities and threats) analysis with their North Korean partners, local
managers have difficulty identifying any weaknesses in the "socialist paradise"
system. So in Pyongyang, the W is often changed to a C for future capabilities.
Some fundamental concepts seem likely to remain foreign for some time. "There is
now substantial interest in economic management but we don't emphasise
profit-making," says Professor Seo at the economic university.
"Capitalists think that economic management means increasing profit for
themselves but from our point of view, we need to make more money so we can
contribute to the national economy."
Источник: РИА "Новости", 19.08.2005 (in Russian)
Полпред президента России по Дальневосточному федеральному округу Константин
Пуликовский считает свой визит в КНДР результативным и обнадеживающим. Об этом
сообщил в четверг пресс-секретарь полпреда Евгений Аношин. По его словам,
Константин Пуликовский провел плодотворные переговоры с главой КНДР Ким Чен Иром,
премьер министром Пак Бон Джу, руководителем Госплана страны Ким Гван Рином.
Приоритетное значение на этих переговорах было уделено перспективам делового и
торгового сотрудничества регионов российского Дальнего Востока с КНДР, отметил
пресс-секретарь полпреда.
Пуликовский посетил в Пхеньяне крупную российскую компанию "Трест", которая
успешно создает совместных предприятий в КНДР, в том числе - нефтепереработке,
разведке энергетических ресурсов. Сейчас компания "Трест" совместно с
Внешторгбанком КНДР приступает к созданию совместного коммерческого банка,
который будет вести финансовую и инвестиционную деятельность в Северной Корее,
отметил Аношин.
"На всех переговорах, в отличие от прошлых встреч, речь преимущественно шла о
больших конкретных проектах. Пуликовский в беседе с Ким Чен Иром отметил, что
крупный российский бизнес готов активно участвовать в развитии нефтепереработки
и металлургии КНДР, создании совместных предприятий в других сферах экономике, в
том числе - транспорте, портовом бизнесе", - сказал Аношин.
В беседе с премьер-министром КНДР Пуликовский заявил, что ежегодно крупнейший в
Северной Корее металлургический комбинат "Ким Чак" потребляет до 50 тысяч тонн
угля. Почти пятую часть твердого топлива на комбинат поставляет Россия. Полпред
заявил, что это предприятие готово полностью закрыть потребности
северокорейского комбината в угле.
Официальный визит Пуликовского в КНДР прошел с 14 по 17 августа. Он был
приурочен к торжествам, посвященным 60-летию освобождения Корейского полуострова
от японских оккупантов. (in Russian)
В центре Пхеньяна, рядом с отелем "Корё", в котором останавливаются в основном
иностранцы, открылось кафе швейцарского типа "Пёльмури", сообщила, базирующаяся
в штате Мэриленд благотворительная организация ADRA International.
В новом кафе иммется булочная, где продается 22 вида различной выпечки и хлебцов
и ресторанчик, предлагающий около 35 западных блюд. В ресторане, рассчитанном на
30 посадочных мест имеется также две приватных комнаты.
Проект связан с пекарней ADRA в Северной Корее, которая выпекает ежедневно 11
тыс.фунтов булочек и бисквитов и снабжает ими две пхеньянские школы. В данной
программе также участвуют гуманитарные агентства World Food Programme (WFP) и
German Agro Action (GAA).
Проект, стоимостью $80,000, частично финансировался швейцарской розничной сетью
MIGROS и отделением ADRA в Швейцарии, при участии правительства КНДР.
На церемонии открытия кафе присутствовало 80 человек, включая северокорейских
правительственных чиновников, представителей ООН, иностранных дипломатов и
представителей местных общественных организаций.
Прибыль от работы кафе планируется использовать для благотворительной
деятельности ADRA International в Северной Корее.
Открытие западного кафе в Пхеньяне, наряду с появившимися здесь несколько лет
назад закусочной, торгующей гамбургерами и Интернет-кафе – это еще один
маленький знак о том, что на Севере постепенно начинают дуть ветры перемен.(in
Russian)
By Donald Greenlees International Herald Tribune, FRIDAY, AUGUST 12, 2005
SEOUL In May, Kelvin Chia, one of the first foreign lawyers to receive a license
to practice in North Korea, took a party of Indonesian miners on an investment
tour. Visiting a coal mine outside Pyongyang, the group was surprised by the
welcome from North Korean officials and found that the basic road and power
infrastructure serving the mine site was in a better condition than they
expected. Chia said the mining company - which he declined to identify for
commercial reasons - is likely to soon enter a joint venture with the North
Korean operator to further develop the mine.
Since being granted the right to open an office in Pyongyang last October, Chia,
who is from Singapore, says his firm has been approached by about 20 companies
from Europe, Southeast Asia and Australia with an interest in investing in
communist North Korea's shaky economy. Chia's firm was the first wholly owned
foreign legal practice in North Korea. "I think there is an upsurge of interest
in that country," said Chia, who is based in Singapore but runs an office of two
lawyers in the North Korean capital and has plans to expand.
Chia's recent experience mirrors that of other hardy business people who have
persisted with North Korea in the past decade, despite a nuclear crisis and U.S.
commercial embargoes. Some business people equate the current level of investor
interest with the early 1990s, when foreign companies, including some
multinationals, started a spate of investments in the hope that North Korea's
largely self-imposed isolation would end.
While the latest round of six-nation talks to dismantle North Korea's nuclear
weapons program remains inconclusive, a handful of Asian and Western investors,
some with earlier experience in doing business there, are again considering
possibilities in defiance of Washington's desire to use economic seclusion as a
bargaining tool.
These investors, mainly manufacturers and miners, are being enticed back by low
wages, plentiful mineral resources and a regime that appears increasingly
prepared to support foreign investment and open its economy.
Pyongyang has signaled plans to open investment promotion offices within its
embassies in Singapore and Malaysia, according to Chia, who maintains regular
contact with North Korean officials. A revised foreign investment law, passed by
the North Korean Supreme People's Assembly in 2004, relaxed some conditions on
foreign investment and permitted full foreign ownership of some ventures. The
assembly has also strengthened intellectual property rights laws.
A South Korean government official said that Pyongyang also recently started to
approve visas for foreign buyers to enter the joint North-South industrial park
at Gaeseong, just north of the demilitarized zone. The official said 19 visas
had been approved as of mid-July for buyers from Germany, Japan, China and
Australia. Investment in Gaeseong is restricted to South Korean companies.
Tony Michell, a business consultant based in Seoul, has received permission to
take a group of eight investors to North Korea in September in the first of what
he said would be monthly investment missions. The first group will comprise
European and Asian business people, none of whom are from China or South Korea,
the countries with the largest investment in the North.
Michell, who introduced a number of companies to North Korea during the last
upswing in investment interest from 1993 to 1995, said there had recently been
"a revival of interest." "This comes up to the 1993 level of interest," said
Michell, managing director for Asia of the Euro-Asian Business Consultancy,
adding that if the United States dropped its economic embargo "this would be a
humdinger of an emerging market."
Still, potential investors in North Korea have to weigh a long history of
failure. Of the eight companies Michell introduced during the early 1990s, only
one investment survives. An investment bank based in Hong Kong, Peregrine,
entered a joint venture to establish Daedong Credit Bank in Pyongyang. Peregrine
collapsed, but Daedong is marking a decade in business.
The experience of North East Asia Telecom, a Thai firm, is sobering. It set up a
mobile phone network, but since May 2004 use of mobile phones has been suspended
by the North Korean government as part of a security crackdown.
New investment largely dried up after October 2002 when U.S. officials claimed
that North Korean officials had admitted during talks to possessing a nuclear
weapons program. There is general agreement among investment advisers and
economic analysts that if the nuclear impasse can be resolved foreign investment
will accelerate.
The nuclear crisis erupted as North Korea was implementing a series of measures
to open its economy and increase appeal to investors, like giving state-owned
enterprises greater freedom to operate commercially, removing price controls and
allowing its currency, the won, to be exchanged for the euro, which was adopted
in December 2002 for all foreign currency transactions.
Analysts of the North Korean economy say those reforms remain largely on track
and paved the way for an upsurge of direct investment in 2004 from China, North
Korea's main economic partner. Ahn Ye Hong, who studies the North Korean economy
for the Bank of Korea, the South Korean central bank, said that investment from
China rose from $1.3 million in 2003 to $173 million in 2004. He said this
investment was driven by China's desire to "obtain as much of North Korea's
resources as it can," particularly iron ore. He expects a further significant
increase in Chinese investment this year.
The South Korean government is also seeking to increase direct investment in the
North. Although the bulk of South Korean investment has gone into just two
projects, Gaeseong and the Mount Geumgang tourism development, recent talks
between the two Koreas explored the possibility of investment in upgrading or
repairing mines that have fallen into disuse.
An official in South Korea's Ministry of Unification said an inter-Korean
economic cooperation meeting in Pyongyang between Sept. 28 and Oct. 1 would
discuss the proposal further. The official, who requested anonymity due to
restrictions on speaking publicly, said it was likely any South Korean
involvement in redevelopment of the mines would be carried out by a joint
enterprise between the government and the private sector.
Объем межкорейской торговли за первые семь месяцев этого года увеличился, по
сравнению, с прошлым годом на 55% и составил $580 млн. Корейская международная
торговая ассоциация (КМТА) объясняет увеличение стремительным равзитием
Кэсонского индустриального комплекса в копе с туристическим бумом на
Кымгансанском курорте.
В период с января по июль объем южнокорейского экспорта на Север увеличился на
более чем 70% и составил $400 млн., а поставки из Северной Кореи возросли на 24%
и общая сумма их достигла $160 млн. Северокорейские товары, поставляемые на Юг
это в основном сельскохозяйственная и рыбная продукция, а также товары,
произведенные в индустриальной зоне в Кэсоне. Южнокорейские поставки на Север в
основном состоят из строительных машин, оборудования а также другой продукции
тяжелого машиностроения. (in Russian)
Reuters, Thu Aug 11, 2005
SEOUL (Reuters) - North Korea is known for producing ballistic missiles and a
nuclear weapons program. But cuddly cartoon characters? "Empress Chung" will be
the first major feature animated entirely in communist North Korea to enjoy a
wide release in a capitalist country when it opens in South Korea on Friday. |
"Empress Chung" was produced and directed by Shin, who also runs AKOM Production
Co., the South Korean animation studio that has been animating "The Simpsons"
since that show premiered in 1989.
The Hollywood makers of "The Simpsons" turned to AKOM to tap into a network of
highly skilled South Korean animators who could draw the show and cut down on
costs because of their lower wages. Shin has turned to North Korean animators
because they are highly skilled. And even cheaper than those in the South. The
estimated cost for animators in North Korea is about one-seventh that of other
low-cost centers such as China, according to industry reports.
It took Shin eight years to make the film and numerous trips to China to set up
a liaison office to facilitate work with the North Korean animation studio SEK
and trips via China and then on to Pyongyang to oversee production. "The market
economy is coming to North Korean animation," Shin told Reuters.
EXPORTING CUDDLY CREATURES
North Korea's impoverished economy is desperately in need of hard foreign
currency. The reclusive state is shunned by most of the world for its highly
authoritarian rule and is currently the focus of a multinational effort to curb
its nuclear ambitions. Animation has been one of the few things that North Korea
-- branded by the Bush administration as being an "outpost of tyranny" -- has
been able to sell to overseas investors.
State-owned SEK Studio was founded in 1985 and has grown into one of the largest
animation studios in the world with a staff of over 1,500, according to
entertainment industry publications. The studio has done animation work for
Italian, French and Spanish productions and has made its own TV shows featuring
cuddly animals who live in a cutesy world devoid of propaganda extolling the
North's Great Leader Kim Il-sung and his "juche" doctrine of self-reliance.
North Korean universities produce the artists who staff SEK. At international
entertainment trade fairs, SEK has booths where it tries to sell its products
and cut deals for international productions. Shin met SEK officials at an
entertainment industry trade fair in Singapore in the late 1990s. He discussed
his idea for the movie, took a business card from an SEK official and a few
years later was talking business with the company.
PYONGYANG PREMIERE
Shin was thinking of animating about 40 minutes of his movie in South Korea and
40 minutes in North Korea, but he was eventually won over by the skill of SEK
and decided to animate the whole thing at their studio in Pyongyang. Shin was
born in what would become a part of North Korea but went South with his family
when a child during the Korean War.
He took about 15 trips to SEK's studio to oversee production, where a staff of
about 500 worked on the movie. "They exactly followed my direction and knew
exactly what to do. It was a good time for work," Shin said.
"Empress Chung" is a Korean folk tale about a young girl who embarks on a
mission to return the sight of her blind father, even it means battling a
monstrous sea god. The film has already made its way to the festival circuit and
picked up a few awards along the way.
The North Korean version will be different from the South Korean version in only
one facet. The voices in the version that will show in Pyongyang have been
recorded by North Korean actors so that they will speak in the North's dialect.
10 Aug 2005, Source: just-style.com
159 South Korean garment and fabric producers are looking to set
up factories in the Kaesong industrial complex in North Korea, Asia Pulse
reported The Ministry of Commerce, Industry and Energy as saying. The companies
are said to be planning investment worth 483 billion won into the
North Korean economy, creating 38,000 local jobs.
66 of the interested business are textile and clothing producers and 29 are
dyeing companies, with other possible investors being fabric, fibre and yarn
manufacturers. North Korea aims to establish Kaesong as a labour-intensive
industrial zone.
28 ноября 1991 г. верховное народное собрание Корейской
Народно-Демократической Республики приняло закон КНДР "О Раджин-Сонбонской
свободной-экономической зоне" ("Расой"). Впервые в новейшей истории Северной
Кореи государство разрешило вести на своей территории экономическую деятельность
иностранным компаниям, в т.ч. и компаниям капиталистических стран. Целью
создания зоны объявлено превращение ее в центр интенсивных внешнеэкономических
связей. Для этого она должна стать районом международных транзитных грузовых
операций, центром обработки и переработки ввозимых товаров и экспортного
производства; районом отраслей высокой технологии и районом интенсивного
международного туризма.
Современная экономическая торговая зона "Расой" (ЭТЗ "Расой") -это участок
территории КНДР на границе с Россией и Китаем, площадью 492 кв. км и населением
160 тыс. человек. ЭТЗ "Расой" рассматривается правительством КНДР как наиболее
предпочтительная территория для транзитных перевозок, торговли, производства
экспортных товаров, финансовых операций и услуг.
На основе принятых законов КНДР: "Об иностранных инвестициях", "Об иностранных
предприятиях", "Об аренде земли" - иностранному инвестору в ЭТЗ "Расой"
гарантируется свободный выбор форм делового участия: ведение экономической,
торговой и финансовой деятельности в форме договорного или акционерного
совместного предприятия, а также в форме индивидуальных инвестиций.
Разрешение на регистрацию иностранного предприятия в зоне выдает Министерство
внешней торговли КНДР в течение 80 дней со дня получения заявления, к которому
прилагаются устав компании, технико-экономическое обоснование и банковские
реквизиты. При положительном решении инвестор в течение 30 дней регистрирует
свое предприятие в Комитете экономического сотрудничества Народного комитета ЭТЗ
"Расой", и после регистрации он в 20-дневный срок должен встать на учет в
налоговых и таможенных органах КНДР.
В соответствии с Законом КНДР "Об иностранных предприятиях", зарубежным
компаниям разрешается создавать иностранные предприятия, специализирующиеся в
области электроники, связи, машиностроения, пищеобрабатывающей промышленности,
легкой промышленности, транспорта, оптовой и розничной торговли, сфере
обслуживания. Законодательно запрещено создавать предприятия, угрожающие
национальной безопасности государства.
В ЭТЗ "Расой" разрешен ввоз товаров, не запрещенных законодательством КНДР, где
они могут храниться, перерабатываться, монтироваться и демонтироваться,
сортироваться, упаковываться, реэкспортироваться и т.п. Освобождены от обложения
таможенной пошлиной в зоне следующие товары: товары, доставленные в зону для
дальнейшей переработки и последующего экспорта; материалы, необходимые для
производства и экспортные продукты; товары для личного потребления и
канцелярские товары; строительные материалы; транзитные грузы.
Таможенные пошлины для каждого вида товаров рассчитываются отдельно и в среднем
составляют 3% от суммы контракта; налог с продаж определен в размере 1%.
Основными валютами в ЭТЗ "Расой", которыми разрешается оплачивать счета,
являются корейская вона, американский доллар, японская йена и китайский юань.
Однако вся бухгалтерская отчетность должна вестись только в корейских вонах.
Курс обмена иностранной валюты по отношению к корейской воне устанавливается
банком ЭТЗ Расой "Золотая дельта" ("Golden Triangle Ваnk"), в котором
иностранный инвестор обязан открыть валютный счет и счет в корейских вонах.
Иностранное предприятие, зарегистрированное в ЭТЗ "Расой", облагается налогом с
дохода предприятия в размере 14%; если же оно вкладывает инвестиции в
производственный сектор экономики, то ему предоставляются следующие льготы:
предприятие освобождается от выплаты налога на прибыль на 3 года после первого
года, когда была получена прибыль; ему снижается налог на 50% на последующие два
года, если компания будет работать в зоне более 10 лет; предприятие,
инвестирующее в инфраструктуру зоны более 60 млн. вон (около 265 тыс. дол. США),
освобождается от выплаты налога на прибыль на 4 года после первого года, когда
была получена прибыль; ему снижается налог на 50% на последующие 3 года.
Комплектация, предприятий с иностранными инвестициями трудовыми ресурсами
осуществляется через отдел по управлению трудовыми ресурсами Народного комитета
ЭТЗ; управляющий персонал и квалифицированные сотрудники для особых видов работ
могут быть наняты в других странах. Минимальная заработная плата корейских
рабочих установлена в размере 80 дол. США в месяц.
Для ведения хозяйственной деятельности в ЭТЗ "Расой" иностранная компания может
взять землю в аренду на максимальный срок до 50 лет. Правила аренды земли
включают соблюдение следующих процедур: арендатор изучает предоставленную
информацию о земле и подает заявление об аренде земли приложением копий
регистрационных документов компании; организация, сдающая землю в аренду, в
20-дневный срок уведомляет заявителя о своем решении; организация и арендатор
заключают контракт, в котором оговорены площадь и порядок использования земли,
цель и срок аренды, итоговое вложение инвестиций, период, в течение которого
осуществляется строительство и т.п.
С разрешения организации, сдающей землю в аренду, арендатор имеет право передать
(путем продажи, субаренды, дарения или наследования) или отдать землю под залог
третьей стороне. Срок, на который передается или отдается в залог право на землю,
не должен превышать срок аренды, указанный в контракте.
Размер арендной платы за 1 кв. м составляет в г. Раджин 0,46 дол. США, и она
должна быть выплачена в течение 90 дней после подписания контракта на аренду
земли. Тариф на электроэнергию составляет 0,038 дол. США за, 1 квт/ч, воду -
0,033 дол. США за куб. метр.
ЭТЗ "Расон" включает порты Сонбон и Раджин, открытые для любых грузовых судов,
за исключением плавсредств Республики Корея и США. Портовые сборы (вход и выход,
судна водоизмещением до 500 т, его недельная стоянка) составляют около одной
тысячи дол. США, что намного меньше по сравнению с российскими портами.
Стоимость перевалки одной тонны грузов в порту Раджин колеблется в пределах от 2
до 5 дол. США в зависимости от характера груза.
Благодаря усилиям Народного комитета ЭТЗ "Расон" в зоне на основе Закона "Об
иностранных инвестициях" зарегистрировано около 200 иностранных и совместных
предприятий и представительств. Основными результатами иностранных вложений
инвестиций стали:
- гостиничный бизнес - пятизвездочный отель "Имперор" (инвестиции Гонконга и
Тайваня до 180 млн. дол. США), гостиницы "Самхын", "Тонбук", "Енгиль" (инвестиции
КНР), гостиница "Раджин" (инвестиции КНР и КНДР);
- международная и междугородняя телефонная связь - "Телефонная компания
Северо-Восточной Азии" (инвестиции Тайваня и Великобритании). К концу 2001 г.
инвестировано около 12 млн дол. США, включена мобильная и пейджинговая связь, а
также обеспечен иностранным компаниям доступ в Интернет;
- международные транзитные перевозки (зарегистрирован филиал китайской
судоходной компании "Хентон", имеющей контейнеровоз на линии порт Раджин - порт
Пусан (Южная Корея) и перевалка грузов через порт Раджин с последующим выходом
на железную дорогу КНР;
- ресторанный бизнес и услуги такси (японские рестораны "Рахэ", "Кымъен", "Намсангак,
многочисленные китайские рестораны, совместные корейско-японские компании "Сейбу"
и "Хохын", предоставляющие услуги такси);
- рыбная отрасль (созданы многочисленные корейско-китайские и корейско-японские
предприятия по реализации морепродуктов, выловленных в ЭТЗ "Расой");
- торговая деятельность (китайские магазины "Самхьш", "Тонбук", "Мивон", "Енгиль"
и др.. японские - "Рахэ", "Кымъен", "Пэккын");
- туризм (корейская "Туристическая компания").
Ведутся переговоры о привлечении иностранных инвестиций для строительства
гидроэлектростанции, реконструкции и строительства сети современных
автомобильных дорог, модернизации деревообрабатывающего завода, реконструкции
крупнейшего в Северо-Восточной Азии Сонбон-ского нефтеперерабатывающего завода.
Таким образом, в ЭТЗ "Расой" созданы правовые и организационно-экономические
основы для привлечения иностранных инвестиций и предпринимателей. Однако, как на
этапе становления зоны, так и в настоящее время основным инвестором ЭТЗ пока
остается Китай. Западноевропейские страны, Япония и страны Юго-Восточной Азии (многочисленные
делегации которых часто посещают Расой) не спешат вкладывать капитал в
северокорейскую экономику, прежде всего в силу наличия политического фактора.
За 9 лет после принятия решения о создании свободной экономической и торговой
зоны в Северо-Восточной Корее в районе зоны достигнуты определенные успехи.
Реконструированы дороги, перестраиваются порты, увеличено производство
электроэнергии, полным ходом идет строительство жилых и административных зданий.
Расширена сеть гостиниц и санаториев. Положительным показателем является рост
международного грузооборота трех портов, однако капиталовложения финансируются
почти исключительно государством.
Некоторые иностранные фирмы и банки открыли в зоне свои представительства, но
они не спешат с инвестициями, особенно в производство. Серьезные
широкомасштабные проекты немногочисленны и ограничиваются в основном
иностранными фирмами, принадлежащими этническим корейцам, проживающим за рубежом.
Однако развитие китайских свободных экономических зон начиналось с того же
самого.
Отличие СЭТЗ Раджин-Сонбон от подобных зон в КНР состоит, во-первых, в том, что
северокорейская зона является как бы островом в чуждой социально-экономической
среде. Социалистические социально-политические основы экономики КНДР до сих пор
незыблемы в отличие от Китая, где после успешного проведения реформ свободные
зоны обслуживают не только иностранных инвесторов, но и быстро растущий частный
сектор в китайской экономике. Частный китайский капитал играет заметную роль в
развитии самих зон. По этой же причине доверие иностранных инвесторов к
китайским зонам несравненно больше, чем к СЭТЗ Раджин-Сонбон.
Во-вторых, внутренний рынок и ресурсы КНДР вообще и районов, прилегающих к СЭТЗ,
неизмеримо меньше, чем соответствующие рынки и ресурсы в Китае. В отличие от
бурноразвивающейся экономики Китая успехи прилегающих к северокорейской СЭТЗ
регионов - самой Корейской Народно-Демократической Республики и российского
Дальнего Востока представляются иностранным деловым кругам проблематичными.
В-третьих, экономический потенциал корейской диаспоры за рубежом не сопоставим с
финансовыми возможностями хуа-цяо.
В-четвертых, в КНДР нет таких особых внешнеполитических условий, как в Китае в
связи с вхождением Гонконга в состав КНР, когда гонконгская буржуазия стремится
укрепить свои позиции в экономике Китая, а удобнее всего вкладывать финансовые
средства в связи с многочисленными льготами в свободных экономических зонах.
Тем не менее, стремление правительства КНДР создать свободную экономическую и
торговую зону в Северо-Восточной Азии - явление положительное. Независимо от
темпов притока капиталовложений и роста товарооборота СЭТЗ она способствует
развитию Северо-Востока республики и международному региональному сотрудничеству
в первую очередь между КНДР и восточными районами Китая и России. Развитие зоны
представляет значительный интерес для российских экспортеров, экспедиторских
компаний и инвесторов. (in Russian)
AP, 8 August, 2005
SEOUL, South Korea (AP) — North Korea faces a serious food
shortage because the country probably won't meet its agricultural production
target for the year, the World Food Program warned Tuesday.
North Korea has relied on foreign aid to feed its 23 million people since
disclosing in the mid-1990s that its government-run farm system had collapsed. A
resulting famine is believed to have killed some 2 million people. The WFP tries
to feed about 6.5 million North Koreans — more than a quarter of the population.
"My sense is that we have a crisis in front of us that requires the
international community to respond and provide resources so that we can do our
work," said James T. Morris, executive director of the U.N. agency. Morris said
the communist country had forecast growth of 3% in farm production this year, a
figure the agency doubts will be achieved. "Our conversations with people
throughout the country suggest that's not likely to materialize," Morris said.
"Earlier this year, the price of maize and wheat was increasing rapidly." Morris
said rising food prices, the government's limited experiments with market
reforms as well as reduced aid from overseas have all aggravated the crisis.
The reforms, which include allowing farmers to sell part of what they grow,
"have had some positive impact on small farmers but a very negative impact on
people in urban areas and people who work in industrial areas," Morris said.
While the price of produce has shot up, wages have stayed the same for city
dwellers and factory workers, he said.
In addition, the amount of livestock managed by North Korean households declined
from last year, and the WFP noted a substantial increase in people foraging and
gathering wild food, nuts and roots in May and June, Morris said.Energy
shortages are also harming food production by making it hard for farmers to
operate mechanized equipment and produce fertilizer, Morris said.
Many analysts believe the North's acute need for energy prompted it to return
last month to international talks in Beijing aimed at getting it to abandon
nuclear weapons development. The participants — China, Japan, North Korea,
Russia, South Korea and the United States — went into recess Sunday and will
reconvene in the Chinese capital later this month.
Morris said there is evidence that the overall situation in North Korea has
improved in recent years, citing "astounding progress" in child nutrition. Some
7% of children under age 7 suffered from acute malnutrition in 2004, he said,
compared with 9% in 2002 and 16% in 1998. The number of chronically malnourished
children had also fallen to 37% in 2004, compared with 42% in 2002 and 62% in
1998.
...Решаясь на ведение дел с японцами, надо отчетливо понимать,
что как бизнес-партнеры они довольно тяжелые люди. Так же, как и мы, японцы
очень медленно запрягают, но потом быстро едут. Поэтому особенно трудно работать
с японцами на начальном этапе, когда ведутся вступительные переговоры,
утверждаются проекты и составляются бизнес-планы. Они отмеряют не семь раз, а
значительно больше, что ведет к непониманию и появлению у части отечественных
бизнесменов мнения, что с японцами вообще нельзя ни о чем договориться. Но, как
и ожидание моря денег, это мнение в корне неверно. Попробуем разобраться, почему.
Совсем рядом с Японией есть очень похожая на нее внешне страна – Корея. Культура,
язык в своем грамматическом строении, религия – все, на первый взгляд, очень
схоже. При этом корейцы абсолютно не похожи на японцев. Японцы тонки и
изворотливы, корейцы резки и прямолинейны. Японцы никогда не скажут «нет»,
корейцы на переговорах любого уровня в состоянии сказать и твердое «нет» и не
менее твердое «да». После долгого общения с японцами это шокирует. Ждешь от
собеседника запутанных, завуалированных ответов, а он тебе «режет правду-матку».
Что же тогда говорить о европейцах, если даже корейцы, близкие по происхождению
к японцам, не смогли полностью скопировать японский опыт! Японскую систему
подхода к бизнесу скопировать невозможно и не нужно этого делать! Японцам тоже
надо это знать – любая их компания, приходящая к нам со своим бизнес-уставом и
пытающаяся все переделать под себя, обречена на крах. Увы, так же как наши
коммерсанты не понимают особенностей японского менталитета, так и японцы не
понимают особенностей русских. Все это создает и множит иллюзии, преодолеть
которые крайне сложно... (in Russian)
U.S. Embassy; Seoul, South Korea, Flash Fax Document Number: 5711, Date: April, 1995
1. This cable summarizes information obtained from meetings with
Korean Development Institute (KDI) officials as well as from two unclassified
publications:
-- "Status of North Korea's financial system and expected reform in North
Korea's financial world in case economic integration takes place," written by
Dr. Chun Hong-Taek, and published by KDI in January 1994. Chun notes that his
information is from open sources as well as interviews with South Korean
companies that have done business with North Korea.
-- "North Korean trading companies and financial institutions," published by the
National Unification Board (NUB) in October 1994. The NUB notes that the data in
its publication is based on contract forms between South and North Korean
trading corporations and other open sources, such as "Foreign trade of the DPRK"
(published by the DPRK International Trade Promotion Committee, editions of
January 1993 to June 1994) and "Directory of DPRK Foreign Trade Organizations,"
(published in March 1994 by Japan's East Asian Trade Society).
2. A few observations about the information:
-- It provides a snapshot of individual North Korean financial institutions,
such as a bank's areas of specialization (if any), its address, key personnel,
and its correspondent banks overseas. It does not provide information on current
financial transactions.
-- There are some differences in the information provided by the KDI and NUB,
especially regarding subordination/jurisdiction. For example, the KDI
publication notes that all banks are subordinate to the Central Bank, which
itself is subordinate to the State Administration Council (SAC). The NUB,
however, indicates that some banks are directly responsible to the Central Bank,
while others are responsible to the SAC.
-- Neither the KDI nor NUB publication lists any North Korean financial
institution as having a correspondent agreement with Ashikaga Bank in Japan -- a
relationship that has been discussed in the press.
-- Because of the date of information, newly created banks, such as the Ing-North
East Asia Bank (reftel), are not included below.
-- Likewise, the KDI and NUB include the names of several banks that may not be
currently operating (such as Lyongaksan Bank), may have merged, or may have been
renamed.
3. According to KDI officials and the two documents mentioned
above, North Korean financial institutions include...
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