DPRK Economy, trade and business09

Economy, trade and business

2009
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Articles on current developments, compiled by Tim Beal.
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DECEMBER 2009

'Over 80% of N.Koreans Depend on Markets'
Around 80 to 90 percent of North Koreans buy daily necessities in the market and an average of one person per household is a trader, making it unlikely that the regime will succeed in reverting to a centralized economy, an academic says. Han Ki-bum, a North Korea expert and former National Intelligence Service agent analyzed the North Korean economy over the past 10 years and submitted a dissertation to Kyungnam University on Tuesday. Citing interviews with North Korean defectors and sources in the North, Han wrote, "Some traders promote fantasies about South Korean goods. When young customers approach, these merchants tell them, 'Look at the [South Korean] mark. It's the best. Take it or regret it later.'" [Marketisation]
N.Korean Workers Brave Hard Times in UAE
Hundreds of temporary shelters sit next to a sprawling construction site on Reem Island in Abu Dhabi, United Arab Emirates (UAE), where multiple development projects are under way. The camps house laborers from around the world. Three workers look Korean and turn out to be from North Korea. A skinny man who appears to be in his early 50s says, "I came here two years ago. There are around 100 of us here. I've been working in the Middle East for eight years now and made a lot of money. During that time I've gone home once every three years." He says he worked in Qatar and in Kuwait for six years and is a carpenter in Abu Dhabi.
One source in Abu Dhabi said, "North Korean workers make between $300 and $500 a month, but the North Korean government confiscates $150 and even $250 as loyalty payments, leading to a lot of conflict." North Korean labor export companies skim off an excessive amount of money from salaries. [Media]
North Korea’s announcement of its economic reform plan anticipated in the new year
Some experts are worried that North Korea’s style of market reform may lead to absorption by China’s economy There has been a lot of activity in the border area between North Korea and China in early December that experts attribute to changes in China’s Northeast Development Strategy and North Korea’s economic reform. Furthermore, they suggest there have been signals that there will be an economic reform in North Korea that will be launched in earnest starting next year. One expert in China who has had exchanges with high ranking North Korean officials for the past several years told a Hankyoreh reporter recently, “I have heard that North Korea will announce its plans for economic reform through the 2010 New Year’s Joint Editorial.” He added, “I have also heard that North Korea’s leadership has decided to move up the schedule for economic reform after Chinese Prime Minister Wen Jiabao’s visit last October.” [China NK]
2009 inspections by Kim Jong Il focus on economic, military sites
Posted Date : 2009-12-22 (NK Brief No.09-12-22-1) The latest on-site visit by Kim Jong Il, in mid December, marked the 156th inspection of the year. This is an increase of approximately 170 percent over last year. Among those accompanying the ‘Great Leader’, Secretary of the Central Committee of the Korean Workers’ Party Kim Ki-nam was seen most frequently, traveling with Kim Jong Il on 107 different occasions. Others seen frequently with Kim include Jang Sung-taek, brother-in-law and right-hand man, as well as Party Central Committee Vice-chairman Pak Nam-ki. According to North Korean media officials, Kim Jong Il’s on-site inspections this year include 64 visits to economically important locations, 43 to military installations, 13 to sites related to foreign affairs, and 36 to other sites, for a total of 156 visits. Kim made only 90 visits during 2008.
North Korea revises economic management laws
Posted Date : 2009-12-21 (NK Brief No.09-12-21-1) The Korean Central Broadcasting Station (KCBS) announced on December 16 that the North Korean Supreme People’s Assembly Standing Committee has revised the North’s Real Estate Management Law, the Commodities Consumption Level Law, the General Equipment Import Law, and other laws related to economic management. This on the heels of the November 30th announcement, when authorities announced across-the-board currency reform measures, apparently in an attempt to regain control of the country’s market economy.
North Korea announces new official prices: rice now 23 won per kilogram
Posted Date : 2009-12-16 (NK Brief No.09-12-16-1) In accordance with the recent currency reform in North Korea, new state-controlled prices were officially announced on December 9. South Korean NGO ‘Good Friends’ announced on December 13th that rice is now selling for 23 won per Kg, corn at 8 won per Kg, flour at 22 won per Kg, pork at 45 won per Kg and ‘matnaegi’, a common flavor-enhancing food additive, is selling for 45 won per bag. Other prices were also listed per kilogram, including crushed maize at 12 won, corn noodles for 10 won, soybeans from 9-13 won, soybean oil for 50 won, radishes at 5 won, artificial meat for 15 won, and cowpeas for 10 won.
Political and economic aims of North Korean currency reform
Posted Date : 2009-12-08 (IFES Forum No.09-12-8-1) by Kim, Keun-sik ((Professor, Kyungnam University, Department of Political Science)) For the first time in 17 years, North Korea has implemented total reform of its currency. Now many are scrambling to analyze the intention of, and the outlook for, such a move. Reports of serious social unrest are emerging from the North, and while there is no way to verify these claims, it does not appear that they are on a scale that would threaten the stability of the Kim Jong Il regime. The government still maintains strict control over its people. Under the reform, old currency is being exchanged for new at a 100:1 ratio for a wide range of political and economic reasons. Measures that limit the amount of money that can be exchanged and fix the rate at which it can be swapped had made the North’s old money useless. This appears to be an intentional political move. [Economic reform]
Report says North bans all foreign currencies
December 29, 2009 North Korea has issued a decree preventing its citizens from possessing or using foreign currencies, according to a Seoul-based North Korean news Web site yesterday. Citing its sources in North Korea, Daily NK reported the restriction would also apply to visiting foreign nationals. The Unification Ministry in Seoul could not immediately corroborate the report. Spokesman Chun Hae-sung said he had heard “various information and intelligence” on the North Korean situation following its currency revaluation in late November. Chun added that South Korean NGOs who have recently visited North Korea have told the ministry about different versions of the North post-currency reform - some saying the country was in chaos and others relaying that the North was relatively calm. [Media]
N.Korea Backtracks as Currency Reform Sparks Riots
North Korean authorities are apparently trying to placate people outraged at a shock currency reform announced on Dec. 1, raising the maximum amount of old bills that can be exchanged into new ones, sources in North Korea said on Monday. The decision follows reports of market riots in response to skyrocketing commodity prices that caught authorities on the back foot. Sources said the North on Dec. 6 raised the maximum amount of old bills that can be exchanged from 100,000 won per person to 500,000, still at a rate of 100:1 Authorities reportedly said this was only a first step, and eventually people would be allowed to exchange all their old bills into new ones if they deposit their money in the bank.
US Businessmen Delegation Here
Pyongyang, December 14 (KCNA) -- A delegation of U.S. businessmen headed by General Charles Boyd, president and CEO of the Business Executives for National Security (BENS), arrived here by air on Monday.
Kim Jong Il's Fake Currency "Reform"
by Marcus Noland, Peterson Institute for International Economics Op-ed in the Asia Wall Street Journal December 2, 2009 © Asia Wall Street Journal North Korea announced a surprise currency reform this week. The move isn't about good economics, however; it is yet another stratagem by the central authorities to short-circuit the development of an entrepreneurial class independent of the state. Currency reforms are not a bad thing in principle. Stable governments historically have used this tactic to draw a line under bad economic policies of the past, often after taming a hyperinflation. Good reforms typically involve knocking zeros off the old paper and issuing new currency, perhaps at approximate parity to major currencies such as the dollar or the euro to make it easier for citizens to hold their government accountable for macroeconomic performance. In recent years Turkey and Ghana, among others, have successfully implemented such reforms. [Inversion]
China eyes DPRK's mineral wealth
Wen Jiabao, China's premier, can hail his visit to North Korea as a bit of a diplomatic coup. Now the question is whether there is an economic dividend too. [China NK] [Minerals]
Symbolism of the New North Korean Currency: Heralding a Change of Power in North Korea?
By Rudiger Frank December 10th, 2009 Rudiger Frank, Professor of East Asian Economy and Society at the University of Vienna, writes, “Kim Jong-il is stepping out of the shadow of Kim Il-sung. He takes a great risk by exposing himself in such a way; but this is inevitable if he ever wants to be able to transfer power actively – either to his son, or to a collective. Technically, the new North Korean currency is an attempt to bring the economy back under control. But the picture of the elderly Kim Il-sung, the first-ever appearance of Kim Jong-il, and the reminder that these two leaders form a unity and that the Party is above the military also indicate that a power change in North Korea is drawing closer.” [Succession]
N. Korea trade dependency hits 40%
The North Korean economy's dependency on international trade is nearing 40 percent, a think tank reported yesterday. According to the Korea Development Institute's report on North Korea's economy in the 2000s, North Korea carried out international trade worth $5.64 billion last year. The cross border trade figure of $5.64 billion recorded last year is equivalent to about 40 percent of the North's gross domestic product, which is estimated to be about $15 billion. In the report, the KDI said that the figures show that North Korea's economy, which the regime boasted as having the most independent structure in the world, is taking a form increasingly dependent on the outside world. The report said that North Korea's cross border trade volume has risen rapidly, mainly due to increasing imports, and that such developments have been essential to the country's economic recovery. Since 2000, North Korea has managed to post positive growth rates. [Trade]
Swedish Store Pulls Plug on N. Korean Jeans
By THE ASSOCIATED PRESS Published: December 5, 2009 Filed at 11:57 a.m. ET STOCKHOLM (AP) -- A Stockholm department store on Saturday removed a new line of North Korean-made designer jeans from its shelves, saying it wants to avoid courting controversy through ties with the isolated communist nation. The PUB department store's management had not been informed that the label would be carried in its space, and pulled the plug when it became aware of it, said Rene Stephansen, the store's director. ''For us this is not a question of Noko Jeans -- this is a question about a political issue that PUB doesn't want to be associated with,'' he said. ''This is not the forum for the discussion'' of North Korea. The Noko Jeans line is the brainchild of three Swedish entrepreneurs who hoped their label would help break North Korea's isolation through increased trade with the West [Sanctions] [Softpower] [Agency]
North Korea Revalues Its Currency
By CHOE SANG-HUN Published: December 1, 2009 SEOUL, South Korea — North Korea has taken confiscatory steps to curb unofficial economic activity and suppress inflation, issuing a revalued currency and sharply limiting the amount of old money people can exchange for new bills, South Korean news reports said Tuesday. The measures appeared to be a crude form of shock therapy intended to severely punish people involved in black market trading, which had begun to take root in North Korea in recent years as the country’s central planning system broke down. If carried out as described by South Korean and Chinese news agencies, the adjustment would wipe two zeroes off the value of North Korea’s currency, the won, and allow people to exchange only about 100,000 to 150,000 old won for the new notes. That would effectively decimate private stores of cash wealth in local currency. At the official exchange rate, 100,000 won is the equivalent of $690, and at the black market rate it is worth only $35.
Denim Diplomacy? North Korea To Sell 'NoKo' Jeans In Sweden (VIDEO)
First Posted: 12- 2-09 10:14 AM | Updated: 12- 3-09 12:59 PM North Korea is making an attempt at international diplomacy...through denim. NoKo jeans, an initiative launched by three young Swedish advertising execs, has produced 1,100 pairs of jeans in the Hermit Kingdom that will go on sale in Sweden beginning Friday, December 4. Each pair will cost 1,500 Swedish kronor ($220), but they will only be available in black, due to the associations of blue denim with the U.S. "There is a political gap, there is a mental gap, and there is an economic gap," Jacob Astrom, one of the Swedish executives, told Reuters. "All contacts with the country are difficult and remain so to this day." Astrom and his team contacted North Korea via e-mail in 2007 and didn't expect a response. However, after a year, they were allowed into the country and the jeans were produced over the summer. According to the BBC, North Korea's biggest garment company said no to the project, "but eventually they struck a deal with the state's largest mining group, Trade 4, which runs a textile operation on its site." The jeans cannot be worn in North Korea, which follows a strict Socialist dress code. [Spin] [Agency] [Trade]
Currency Reform and Orthodox Socialism in North Korea
By Rudiger Frank December 3rd, 2009 Rudiger Frank, Professor of East Asian Economy and Society at the University of Vienna, writes, “In hindsight, we will realize that the currency reform of December 2009 might have been a short-term victory for the North Korean government, but that it was not able to root out private economic activities and in the long run contributed significantly to a dangerous loss of the system’s legitimacy.” The views expressed in this article are those of the author and do not necessarily reflect the official policy or position of the Nautilus Institute. Readers should note that Nautilus seeks a diversity of views and opinions on contentious topics in order to identify common ground. On Nov. 30th, 2009, the North Korean government implemented a currency reform, exchanging old against new won in a relation of 100:1. Shops were closed to ensure a smooth transition to the new currency. Reportedly, the maximum amount of money that could be converted this way has been limited in the range between 100,000 and 300,000 won per person. This is not big money; according to the unofficial exchange rate, this would be between 50 and 150 Euros.
North Korea Takes Aim at the Black Market
Just days before a visit by Obama's special envoy, Pyongyang is issuing new bank notes to reassert control over the economy By Moon Ihlwan For most of the decade, North Koreans fed up with the regime's economic policies have been voting with their wallets, shunning the government's official stores and instead shopping in free markets launched in 2002. In a rare attempt at economic reform, Pyongyang deregulated prices and introduced street and farmers' markets, allowing citizens to acquire food and daily necessities from the markets as the government reduced supply of rations. [Victim]
North Korea: barely open for business
Back to Action Asia insights No one has seriously suggested North Korea is likely to be a market for New Zealand businesses looking for untapped markets in Asia any time soon. There is no telling when unification might occur and even it were to, the risks of entering a market so economically challenged are likely to outweigh the benefits of doing business there for a long time. Andrew Salmon, a freelance correspondent in Seoul, looks at the current level of foreign business activity in North Korea and how South Korean companies are interacting with the Northern state. North Korea, on the surface, might appear to be an entrepreneur's dream: The last untapped market in booming Northeast Asia! However, given the tremendous risks – largely geopolitical, but also economic – implicit in the nation, there are few good reasons to explore this market at present. Moreover, unification appears as far off as ever. [Media] [Inversion]

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NOVEMBER 2009

Ex-envoy advises investing in North
November 12, 2009 Maurice Strong, former UN envoy to North Korea, speaks at the Mirae Asset Securities Investment Forum yesterday. Provided by Mirae Asset Securities Investing in North Korea may sound like an extremely risky, even idiotic, idea, but Maurice Strong, former United Nations envoy to North Korea, said he believes there are lucrative investment opportunities in the Stalinist country. North Korea has recently ratcheted up efforts to attract more foreign investment, establishing a new corporation in Australia for that purpose, Strong said at the annual Mirae Asset Securities Investment Forum held in downtown Seoul yesterday. Strong advised adventurous investors to take the opportunity before it’s too late. [FDI] [Opening]
DPRK completes new plant distribution map
www.chinaview.cn 2009-11-09 20:54:52 Print PYONGYANG, Nov. 9 (Xinhua) -- The Democratic People's Republic of Korea (DPRK) has newly completed the "Korean Plants Distribution Map," which was helpful for protecting and making the best use of the plant. The map, made by the botanical institute of the State Academy of Sciences, clearly showed plant stocks in different parts of the country, the distribution of plant resources, and ecological features and utilization of plants, the official news agency KCNA reported on Monday.
Korea leads world in green stimulus, says World Bank
A World Bank economist yesterday lauded Korea for being a world leader in "green stimulus" and a role model for other countries trying to deal with climate change. "It is the strongest example in the world of a government trying to change the path of development and taking the advantage of crisis to do that," said Kirk Hamilton, lead economist of the World Bank. "So if more countries were following the Korean example under green stimulus investing in green technology, looking at green technology as a path forward for the economy, then there will be much more efforts going into dealing with the problem," Hamilton told The Korea Herald. The World Bank economist is currently in Seoul to participate in a three-day seminar on green growth and its contribution on regional development. The conference is jointly hosted by the World Bank and the Korea Research Institute for Human Settlement, a state-run research institute on regional development. [Green]
N.Korea Ends Experiment with TV Commercials
North Korea stopped TV commercials in late August, less than two months after they started to be shown in July. A Unification Ministry official on Sunday said occasional advertising of goods on [North] Korean Central TV started July 2 with a commercial for Taedonggang Beer but stopped on Aug. 29. Quoting a North Korea source, the Yonhap news agency reported that North Korean leader Kim Jong-il fired Cha Sung-su, chairman of the Central Broadcasting Commission in charge of all TV programs. Kim was said to have been "enraged" because he regards commercials as the thin end of the wedge of Chinese-style market reforms. The ministry said the firing has not been confirmed. /North Korean Central Television Another source said only a small group of North Koreans, mostly in Pyongyang, can enjoy the beer or Koryo ginseng advertised on TV, and the North apparently stopped the commercials to avoid stoking envy and unrest amid the current food shortage.
Kim Jong-il fires official over controversial ads
November 09, 2009 North Korean leader Kim Jong-il has sacked his television point man in anger over commercials that made a splash earlier this year by promoting the communist state’s beer and other local products, sources here said yesterday. “Recently, Kim saw the commercials while watching TV. He was enraged, asking where the commercials came from and describing them as the prototype of China’s early reforms,” one source said. Starting July 2, North Korean television played commercials that showed young women in traditional clothes serving frothy mugs of Taedonggang beer billed as the “Pride of Pyongyang.”
Know the Rules to Make the Most of Korea's FTAs
Lee Gang-yeon Korea's active free trade agreements cover a total of 16 countries in four regions, and the country has also signed FTAs with the United States and the European Union and a comprehensive economic partnership agreement with India, which are expected to come into force sooner or later. It is also negotiating FTAs with Australia, New Zealand, Peru and the GCC, and there are calls for similar deals with China and Japan. The FTAs in effect are designed as bridgeheads to major market zones. The strategy has been successful, but it is questionable if Korean businesses are prepared to take full advantage of it. According to a recent survey, the degree Korean businesses use the FTAs for goods exported is surprisingly low. Major reasons are that country-of-origin criteria differ from country to country in the FTAs, and that Korean businesses have yet to work out what the criteria are. [FTA]
Kim Jong Il Provides Field Guidance to Chemical Complex and Gasification Process Construction Site
Pyongyang, November 6 (KCNA) -- General Secretary Kim Jong Il provided field guidance to the February 8 Vinalon Complex and the gasification process construction site of the Hungnam Fertilizer Complex. The first leg of his guidance was the February 8 Vinalon Complex. After being briefed on the complex before a map on its production, he looked round the dyes and agricultural chemicals produced at the newly-built production processes for hours to acquaint himself in detail with the construction and production there.
More Modern Villages Appear in DPRK
Pyongyang, November 6 (KCNA) -- The number of modern rural villages is on the steady increase in the DPRK. Hundreds of thousands of modern houses have sprung up in the countryside over the last decade, taking the country as a whole. The villages are called ideal socialist ones as they are made up of such houses where electricity is widely used for lighting and heating and methane gas for cooking and a lot of fruit trees grow. 40 cozy new modern houses were built at the foot of Mt. Mira in Migok-ri, Sariwon City. The village is called "apricot village".
During the spring tree planting period alone several hundred million trees are planted throughout the country, bringing the average number of the trees planted by each person every year to 150 or 200. As a result, it is turning into a thick woodland and greenery.
Gravity-Fed Waterway Changes Meaning of Miru Plain
Pyongyang, November 5 (KCNA) -- A gravity-fed drinking water project has been completed in Unsan County, North Phyongan Province shortly ago so as to supply quality spring water to the residents in the county. These years have witnessed the completion of gravity-fed drinking water service projects in different parts of the DPRK.
North Korean food shortage to grow, crimes of necessity on the rise
Posted Date : 2009-11-02 (NK Brief No. 09-11-02-1) The North Korean agricultural ministry has announced that the countries food shortages are expected to be even greater next year. Edition 302 of the newsletter “North Korea Today,” distributed by the group Good Friends, reports that the Ministry of Agriculture announced harvest predictions for farms in North and South Hwanghae and Pyongan provinces, North Korea’s ‘ricebowl region’. It stated that if the country was to avoid a food crisis next year, everyone would need to strictly manage this year’s crops. It was also reported that the central party authorities in North Korea, after receiving the report, called for the opening of all customs houses in the border region and for trading companies to seek new avenues for trade. An order was passed down to “relentlessly trade with the outside in order to bring in much food.” [Sanctions] [Trade] [Inversion] [Food]
In North Korea, the military now issues economic orders
By Blaine Harden Tuesday, November 3, 2009 SEOUL -- North Korea's military, whose nuclear program vexes the Obama administration, has grabbed nearly complete command of the nation's state-run economy and staked out a lucrative new trade in mineral sales to China to make money for its supreme commander, Kim Jong Il. By Blaine Harden Tuesday, November 3, 2009 SEOUL -- North Korea's military, whose nuclear program vexes the Obama administration, has grabbed nearly complete command of the nation's state-run economy and staked out a lucrative new trade in mineral sales to China to make money for its supreme commander, Kim Jong Il. [Military economy] [Media]

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OCTOBER 2009

Korea's Service Industry Creates Little Added Value
Korea trails the rest of the OECD in terms of added value in the service sector. In a report released Friday, the Samsung Economic Research Institute (SERI) said added value in the service industry accounted for 55 percent of GDP as of 2007, placing Korea 29th among the 30 OECD members. Only Slovakia did worse with 48.7 percent. Added value per capita, or the labor productivity of service industry workers, stood at US$35,000 in 2007, placing Korea 28th in the OECD. That was only about half the figure of the second-ranking U.S. ($71,900). [Services]
Kim Yong Nam Meets Syrian Economic Delegation
Pyongyang, October 28 (KCNA) -- Kim Yong Nam, president of the Presidium of the DPRK Supreme People's Assembly, met and had a friendly conversation with the Syrian government economic delegation led by Minister of Economy and Commerce Amer Hosni Lutfi at the Mansudae Assembly Hall Wednesday when the latter paid a courtesy call on him.
Korea Lags Behind in Attracting Foreign Investment
In the global competition for foreign direct investment, Korea lags substantially behind China and India. China jumped to third place among global destinations for FDI last year with US$108.3 billion, up from sixth in 2007. India rose by seven notches from 20th to 13th with $42 billion. Both countries absorb foreign investment based on their enormous markets and abundant labor. The U.S. still tops the list with $316.1 billion, but China is catching up fast. [FDI]
Czech Factory Regrets Departure of N.Koreans
Nachod is a small village in the Czech Republic around three hours by car from the capital Prague. It is an isolated place sparsely dotted with farm houses. On the outskirts of the village is a two-story factory called Snezka that manufactures sheets for cars and travel bags. Until 2007, the factory was filled with North Korean women who had gone there to work. The European press described the women as "21st century slaves," being watched 24 hours a day by North Korean minders and required to wire most of their earnings back to North Korea. The Czech government eventually sent back all North Korean workers by 2007, including the 90 women who had been working for Snezka. North Korean workers pose for a group photo on Christmas eve in 2004 or 2005 at sewing factory Snezka in the Czech Republic. /Courtesy of Snezka North Korean workers pose for a group photo on Christmas eve in 2004 or 2005 at sewing factory Snezka in the Czech Republic. /Courtesy of Snezka As orders from European automakers skyrocketed, the number of staff at Snezka rose to around 700, but it was difficult to find cheap and dependable workers in such a remote place. That was when the North Korean Embassy in the Czech Republic called to offer the services of "loyal" workers. The first handful of North Koreans who were hired proved to be excellent workers and the factory kept on hiring more. "From an employer's perspective, they were ideal workers," one executive recalls. "Unlike Czech or Ukrainian workers, the North Koreans never wasted time drinking coffee and chatting. They were very good with their hands too. They were extremely accurate in their sewing, as if machines had done it." The executive objects to the term "21st century slaves." The North Koreans worked eight hours a day, five days a week in two shifts -- 6 a.m. to 2 p.m. and 2 p.m. until 10 p.m. Weekends earned them an extra 75 percent of their daily incomes, a standard uniformly applied to both North Korean and other workers. Factory staff say the North Koreans led a dull existence. Three or four lived in a house supplied by Snezka, and they traveled in groups of five or six even when they were going for a short walk around the factory. They rarely talked to other workers. One worker from Poland says, "I never heard them say a single word about their family, friends or hometowns." In time, around half of the 90 North Korean workers were able to communicate in Czech, but they were still said to be "quiet." englishnews@chosun.com / Oct. 28, 2009 11:51 KST [Sanctions] [Manipulation] [Spin] [Media] [Remittances]
Seoul Mulls Lifting Ban on Sand Imports from N.Korea
The government is considering resuming imports of sand from North Korea, a commodity suspected of being a cash cow for the North Korean military. According to an estimate by the Unification Ministry, the North earned more than US$36 million in cash in 2007 by selling sand to South Korea, roughly the equivalent to the combined annual salaries of about 40,000 North Korean workers at the joint Korean Kaesong Industrial Complex. The government stopped imports after the North fired a long-range rocket in April. [Sanctions]
Kim Yong Nam Meets Swiss Commodity Holding AG Delegation
Pyongyang, October 22 (KCNA) -- Kim Yong Nam, president of the Presidium of the DPRK Supreme People's Assembly, met and had a conversation with the visiting delegation of the Swiss Commodity Holding AG led by Chief Executive Ms. Shanti Sen at the Mansudae Assembly Hall Thursday.
Kim Jong Il Visits Newly-built Pig Farms
Pyongyang, October 22 (KCNA) -- General Secretary Kim Jong Il gave field guidance to the newly-built September 26 Breeding Pig Farm and October 22 Pig Farm. The first leg of his guidance was the September 26 Breeding Pig Farm. He went round the exterior and interior of the farm to acquaint himself in detail with its construction and management. He highly appreciated the shining feats of the soldier-builders, expressing great satisfaction over the fact that they have successfully built this modern farm in a matter of one year. [Military economy]
Kim Jong Il Visits Newly-built Apartment Houses
Pyongyang, October 20 (KCNA) -- General Secretary Kim Jong Il went round newly-built apartment houses in Mansudae Street. After being briefed on the street before a huge map showing its panoramic view, he made the rounds of various parts of the street including the newly-built apartment houses to learn in detail about its construction. He expressed his great satisfaction over the fact that party members and other workers, members of the youth shock brigade under the Ministry of Capital City Construction and all other builders have successfully carried out the vast project for building Mansudae Street equivalent to a large-scale street in a brief span of time. While going round the interior of various apartment houses built in diverse styles, no details escaped him ranging from room heating and water supply and drainage system to humidity removal from the kitchen cabinet, window shades in the rooms and door-knobs.
Inter-Korean exchange over 20% down in 2009
Posted Date : 2009-10-19 (NK Brief No. 09-10-19-1) Trade between North and South Korea has fallen more than 20 percent during the first eight months of 2009. Between January and September, exchanges between the two amounted to 929.7 million dollars, 24.1 percent less than the 1.2243 billion dollars recorded during the same period in 2008. [SK NK policy] [Sanctions]
Business opportunities in North Korea
A report and an invitation from Paul Tjia
In the current financial and economic situation, companies face many challenges. They must cut costs, develop new products and find new markets. In these fields, North-Korea might be an interesting option. Since a few years, it is opening its doors to foreign enterprises. The labor costs are the lowest of Asia, and its skilled labor is of a high quality. It established free trade zones to attract foreign investors and there are several sectors, including textile industry, shipbuilding, agro business, logistics, mining and Information Technology (computer games, animation) that can be considered for trade and investment. Heineken is an example of a Dutch company, active in North-Korea. Its beer is now widely available. In order to explore these business opportunities, a Dutch trade delegation visited North-Korea in September. A short report of this mission has been attached. Are you interested as well? Then join our upcoming mission in May 2010, when we will also visit the annual Pyongyang Spring International Trade Fair.
N.Korean Financial Reform 'Could Save Trillions'
Kim Byung-yeon Kim Byung-yeon Hundreds of trillions of won costs could be saved by financial reform in North Korea before reunification, claims Kim Byung-yeon, a professor of economics at Seoul National University. "After reunification, West Germany gave aid worth W2,000 trillion to East Germany," Kim said Monday. "But Hungary was able to switch over to the capitalist economy with less than 2 percent of the money Germany had spent." Kim recently contributed to a book titled "Financial Sector Reform in Transition Economies: Implications for North Korea" for the International Monetary Fund, which lays out a roadmap for North Korean financial reform. Seven former and incumbent economists at the World Bank and the IMF co-authored the book. "If North Korea is to move to a market economy, it's essential to reintroduce financial brokers that turn savings into investment, so financial reform must come before reunification." Kim says the unitary bank (North Korea's central bank), which carries out functions of central and commercial banks, should be separated into two entities, followed by restructuring and privatization of the commercial bank as a way to get rid of bad debts. "However, if that is done with North Korea's own money, then only the privileged class whose members have accumulated money through corruption or foreign trade would profit, so South Korean banks must take part in the process of privatization," Kim said. He added in view of the experience of East European nations, it will take at least 10 years for North Korea to complete financial reforms. [Takeover] [Unification]
North Korea claims record production gains through ‘150-day battle’
Posted Date : 2009-10-12 (NK Brief No. 09-10-12-1) It has been boasted that North Korea’s ‘150-day Battle’ to boost the economy (April 20-September 16) resulted in record-breaking jumps in DPRK production numbers, and it has been suggested that that by 2012, some enterprises will “attain production numbers higher than the best numbers recorded at the end of the 1980s.” This claim was made by Ji Young-il, the director of the Chosun University Social Science Research Institute, which is run by the pro-Pyongyang “General Federation of Korean Residents in Japan.
N.Korea's 1st Fast-Food Restaurant Opens
North Korea's first fast-food restaurant selling hamburgers and waffles has opened in the center of Pyongyang. Although there are hamburger joints in North Korea, this is the first full-fledged franchise-style fast-food restaurant there. The Choson Sinbo, a Pyongyang mouthpiece in Japan, last Saturday reported the fast-food restaurant opened at the Kumsong Intersection in Pyongyang early last month and plans to open a branch in downtown Pyongyang in the near future. According to the newspaper, the restaurant has an "affiliation with a Singaporean company specializing in waffle joints." The Singaporean company supplies only the facilities, while the local operation hires staff and supplies raw materials. [Opening] [IJV]
Modern Ostrich Farm
Pyongyang, October 9 (KCNA) -- There is a modern ostrich farm in a beautiful place on the outskirts of Pyongyang. The farm with a large acreage has breeding and young ostrich cotes, hatchery, playground and others which have been built in a peculiar way. It is equipped with all necessary facilities. The introduction of advanced breeding method is promoting the course of acclimatizing ostrich indigenous to tropical desert of Africa to the country and a good ecological environment is provided. The farm also produces quality fodder with local raw materials. The fattening cotes teem with ostriches. The well-furnished ostrich meat processing factory is producing not only quality leather and feather but also fresh meat, meat processed goods, eggs and egg craftworks. When he visited it some time ago, Kim Jong Il said that it was important for the improvement of the people's living, adding that the ostrich breeding should be encouraged.
NK’s First Fast Food Outlet Enjoying Popularity
This handout picture released by restaurant chain Waffletown USA shows workers posing at North Korea’s first fast food restaurant, Samtaesong (Three Big Stars), in Pyongyang. A Singaporean entrepreneur has opened the first fast food restaurant in North Korea and he is already drawing up expansion plans just months after opening the first shop, AFP reported. The first branch of ``Samtaesong (Three Big Stars)'' started operating in May in Pyongyang after Patrick Soh got the first license awarded to a foreign fast food outlet. Soh, 56, holds the franchise in several Asian countries under the title of ``Waffletown,'' a relatively obscure brand compared to the likes of McDonald's, KFC and Pizza Hut. "There is a potential to develop this business over there," Soh was quoted as saying. He is bullish on the prospects of fast food in the isolated Stalinist state. According to AFP, burgers, called "minced beef and bread" in North Korea to mask their American association, are the biggest attraction at the eatery, which also sells fries, crispy Belgian waffles, fried chicken and ? the latest addition ? hotdogs. "It is not only the locals who enjoy the food. Even the foreigners like the food," Soh told AFP in an interview at a Singapore outlet of Waffletown. Soh will make his fourth trip to Pyongyang this month to explore the feasibility of opening a second outlet there. If all goes smoothly, it should be up and running in early 2010, said Soh, who is not deterred by problems like power outages and the unavailability of some items in Pyongyang. Soh made his first trip to Pyongyang in November last year, taking four days to survey the site and see whether the fast food concept was workable in one of the world's few remaining communist states. [Opening] [IJV]
Korea-China Tunnel 'Could Generate W275 Trillion'
An undersea tunnel linking South Korea's west coast and China's Shandong region could generate economic benefits worth W275 trillion (US$1=W1,166) for Korea, China and Japan, a study says. The study was unveiled at an international seminar on the tunnel in Seoul on Thursday. It was organized by the Gyeonggi Research Institute (GRI) under the sponsorship of China's Shandong Academy of Social Sciences. GRI vice president Cho Eung-rae said if the tunnel is built, it will produce economic benefits worth W116 trillion for Korea, W150.7 trillion for China, and W8.6 trillion for Japan. Linking express railways in the two countries, the tunnel would shorten travel from Seoul to Shanghai to five hours and 31 minutes and to Beijing to four hours and 26 minutes, he said. This could result in creating a huge economic sphere linking about 24 million people in the Seoul area with some 272.1 million in the Beijing and Shanghai regions. One participant said such a tunnel could eventually be part of a route linking Japan to Europe. Xu Yunfei, a senior engineer with the Shandong Research Institute of Communications, said, "If a Korea-China tunnel turns out to be a success, the construction of a Korea-Japan tunnel could also be pushed. If these tunnels link overland railways in Central Asia afterwards, it could create a modern version of the Silk Road." [Railways]
N.Korea's 'Struggles' an Apparent Failure
/North Korean Central News Agency-Yonhap /North Korean Central News Agency-Yonhap North Korea launched a "150-day struggle," a press-ganged mobilization to increase production of collective farms from April 20 to Sept. 19 on the road to building a "powerful and prosperous nation" by 2012. No sooner had the one struggle ended than a "100-day struggle" ensued. But what exactly is the point?
SMEs at Kaesong Complex Short of Manpower
Small and medium-sized businesses at the joint Korean Kaesong Industrial Complex are short-staffed. According to data the Korea Industrial Complex Corporation submitted to Grand National Party lawmaker Kim Gi-hyeon on Wednesday, small factories at the industrial park have asked for more North Korean workers since October 2007, with 969 vacancies as of late September this year. But only five were filled. Of the 31 small workshops at the industrial park, 25 need more staff. The current number of North Korean workers at the 31 factories is 3,930, with 24.5 percent more personnel needed for a full operation of the SMEs. "South Korean SMEs moved to the Kaesong industrial park because of the cheap labor there, so it's a big problem if that labor is not available."
DPRK admits sanctions pressure, stresses frugality
Posted Date : 2009-10-07 (NK Brief No. 09-10-7-1) The March 2009 issue of the North Korean journal Economic Research emphasized that with the strengthening of international economic sanctions against the North, actively participating in the “Battle for Savings” was essential in all sectors in order to construct a “strong and prosperous nation.” The recently obtained academic journal called on readers to broaden the “savings battle” in an article titled, “Strongly Spreading the Battle for Savings Is an Important Measure for the Construction of an Economically Strong Socialist Nation.” The article stressed that the “savings battle” was necessary for the successful completion of large-scale industrial construction projects, such as the Huicheon Power Plant, as well as the construction of hundreds of thousands of private homes and pubic facilities. North Korean authorities consider these projects essential to the successful construction of a ‘strong and prosperous nation’ by 2012, the year marking the 100th anniversary of the birth of the late Kim Il Sung. [Sanctions]
Transformation and Modernization of North Korea: Implications for Future Engagement Policy
By Bradley O. Babson
October 7th, 2009 This is an excerpt. The full report is available at: This paper was produced as part of the project “Improving Regional Security and Denuclearizing the Korean Peninsula: U.S. Policy Interests and Options.” http://www.nautilus.org/DPRKPolicy.html These reports are also available on the National Committee on North Korea web site: http://www.ncnk.org/resources/news-items/DPRKPolicy_interests_and_options The Nautilus Institute and NCNK, have commissioned additional reports in support of this project. These reports, addressing topics such as the DPRK nuclear program, interdiction, Russia’s stake, will be released later this year. Bradley O. Babson, an independent consultant, outlines the economic changes currently underway in the DPRK and notes, “American interests in transformations taking place inside the country and in economic as well as security relations with its neighbors and the international community”. The report details these transformational changes and offers policy options for two separate scenarios. One scenario assumes continued “North Korean intransigence coupled with escalatory and retrogressive actions” while the other identifies options if there is “a fresh start in bilateral and multilateral engagement”.
Objectives for Transformative Engagement In constructing specific actions for integrating policies that will influence the course of transformation of North Korea into an overall strategy of engagement, overall objectives should include: • Encouraging expansion of markets and decentralized decision-making by enterprises, collective farms, households and local governments. • Supporting adoption of appropriate regulation and social safety nets, while resisting regressive efforts to stifle markets and reassert the dominance of the Public Distribution System. [US NK policy] [Inversion] [Regime change] [Arrogance]
China eyes N Korea's mineral wealth
Wen Jiabao, China’s premier, can hail his visit to North Korea as a bit of a diplomatic coup. Now the question is whether there is an economic dividend too. After bear hugs with Kim Jong-il and co-operation deals, Mr Wen engineered the geopolitical compromise he wanted, with the North Korean leader on Tuesday announcing he might return to international talks on dismantling his nuclear weapons programme if he gets the kudos of direct talks with the US first. Mr Kim’s announcement did not guarantee fresh six-party talks between Beijing, Seoul, Moscow, Tokyo, Pyongyang and Washington but restored political goodwill. Yet if resource-hungry China hopes revived camaraderie will also grant it a large bite of North Korea’s massive untapped mineral wealth, analysts and diplomats warn, Beijing could be sorely disappointed. North Korea’s mineral wealth is receiving close scrutiny, with South Korea’s government this week valuing reserves at $6,000bn (€4,070bn, £3,670bn). Encouraged by data on metals, Goldman Sachs last month predicted the economy of a unified Korea could rival Japan’s by 2050. Until the 1970s North Korea was the wealthier half of the peninsula. [NK China] [Minerals]
Latvia-China Railway to Boost Korea’s EU Exports
President Lee Myung-bak, right, shakes hands with Latvian Prime Minister Ivars Godmanis at Cheong Wa Dae, Tuesday. Prime Minister Godmanis also attended a luncheon meeting hosted by the heads of Korea's four biggest business organizations in Seoul. / Korea Times By Jung Sung-ki Staff Reporter The Latvian prime minister expressed hope Tuesday that his country and South Korea would establish a strong economic partnership in the future. Ivars Godmanis, 58, who was on a four-day visit here from Sunday, said in an interview that the Latvian government is discussing a railway connection with China, which could help transport South Korea products to European nations more easily than shipping them by sea. ``We have had discussions here about our proposal for logistics support and transportation of Korean goods to the Baltic region and Europe,'' Godmanis, the highest-level Latvian official to visit South Korea since the two countries established diplomatic ties in 1991, said, referring to talks with his South Korean counterpart Han Seung-soo in Seoul Monday. ``This is just an idea, but we're realistically and seriously talking to the Chinese government regarding the railway connection,'' he said, expecting it would take 12 to 15 days to transport goods from South Korea to Europe by railway, far shorter than the 35 days by sea. [Railway]
Current Crisis Is Opportunity, Says KOTRA Head
KOTRA CEO Cho Hwan-eik By Jane Han Staff Reporter For Cho Hwan-eik, the past 10 months heading the Korea Trade-Investment Promotion Agency (KOTRA) has been no easy task with fresh challenges sparked from the global financial crisis making it tougher to facilitate trade and investment. Exports of the country's key durable goods have been dwindling and foreign direct investment in South Korea tumbled almost 40 percent on-year in the first quarter of 2009, but the veteran economic expert still keeps his cool, betting that Asia's fourth-largest economy has hit the bottom.
orean brands and products are going to be revisited by cash-strapped consumers around the world, said Cho, who held numerous key economic posts in past governments, including presidential secretary for economic affairs, vice minister of the Ministry of Commerce, Industry and Energy, and president of Korea Export Insurance Corporation. ``This crisis is a chance for local firms to break away from their sandwiched position in between Japanese and Chinese makers,'' he said, urging that Korean companies need to capitalize on the timing as much as possible. [Crisis]
The financial crisis and South Korea one year after
Large exporters have seized opportunities during S. Korea experiences V-shaped recovery, while small and mid-size businesses continue to suffer Yesterday marks one year since the beginning of the global financial crisis that began last Sept. 15 with the collapse of Lehman Brothers. The KOSPI index is steadily climbing towards 2000 again, and the exchange rate between the Won and the dollar has recovered a trend of stability. South Korea’s foreign reserve stores have also fattened up once again. The South Korean government is now bickering with the Bank of Korea over the timing of an exit strategy, including a possible increase in the interest rate, for reining in the funds released during the crisis. Compared to a year ago, these are nice worries to have. The big fire is out. It is too early, however, to conclude that the embers have been fully extinguished. [Crisis]
Kim Jong Il Gives Field Guidance to Establishments in Pyongyang
Pyongyang, September 29 (KCNA) -- General Secretary Kim Jong Il gave field guidance to light industrial establishments in Pyongyang. The first leg of his guidance was the newly-built Taedonggang Foodstuff Factory. After being briefed on the factory in front of a huge map showing its panoramic view, he went round its interior and exterior to acquaint himself in detail with its construction and production there.

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SEPTEMBER 2009

North Korea names new head of public finance
Posted Date : 2009-09-24 (NK Brief No. 09-24-1) North Korea’s Supreme People’s Assembly Standing Committee has removed Kim Whan-su from his position as head of public finance, naming Pak Su-kil as the new financial chief and giving him the title Deputy Prime Minister. This news was carried by (North) Korea Central Broadcasting on September 18. This brings the number of North Korean deputy prime ministers to five, and the inclusion of the prime minister of public finance is meant to further strengthen public finance capacity. This is but one more indication of the importance North Korean authorities have placed on economic reform policies and the establishment of a Strong and Prosperous Nation by 2012. The other four deputy prime ministers are Kwak Bum-ki, Pak Myung-sun, Rho Du-chul, and Oh Su-yong.
North Korea shuffles cabinet in effort to build a strong and prosperous nation
Posted Date : 2009-09-22 (NK Brief No. 09-22-1) In order to meet the goal of building a ‘Strong and Prosperous Nation’ by the year 2012, North Korean authorities are reshuffling some positions within the Cabinet, which is its ‘Economic Headquarters’. During the first session of the 12th Supreme People’s Assembly (SPA) last April, Kim Jong Il launched his third regime, and now less than 6 months later, is restructuring the Cabinet. For example, the National Science and Technology Council, which was merged into the Cabinet Academy of Science (now the National Academy of Science) in 1998, has been re-established.
The closing of Pyongsong wholesale market
Posted Date : 2009-09-18 (NK Brief No. 09-18-1) The Network for North Korean Democracy and Human Rights (Nknet) reported that previous wholesale market near in Pyongsong Plaza and the provincial committee building has completely closed its doors in mid-Jun. Currently, there are two markets being operated in a reduced form in two separate districts. The newly formed jangmadang in two districts are extension of previous alley markets and it is reported to be under construction but still operating. The size of the new market is said to encompass between seven to eight thousand seats compared to thirty to forty thousand seats of the former Pyongsong Wholesale Market.
Kaesong Industrial Complex: is a sceond reprieve possible?
Posted Date : 2009-09-21 (ICNK Forum No. 09-21-1) by Lim Eul-chul (Professor (Institute for Far Eastern Studies, Kyungnam University)) After a long lull, the Kaesong Industrial Complex project is beginning to recover. North Korean authorities, having now asked for a 5 percent raise for North Korean workers within the complex, seem to have abandoned their earlier demand, made in June, that wages be increased 400 percent to 300 dollars per month. This, along with the North’s decision to remove border-crossing restrictions implemented on December 1, indicate Pyongyang’s decision to work toward resolving issues burdening the businesses in the KIC.
Frozen Inter-Korean relations & the impact on the Kaesong Industrial Complex
Posted Date : 2009-02-11 (ICNK Forum No. 09-2-11-1) by Eul Chul Lim (Professor, The Institute for Far Eastern Studies, Kyungnam University) ISSUES WITH THE KIC PROJECT AND THE RESPONSE OF THE TWO KOREAS The main difficulties surrounding the Kaesong Industrial Complex have come into even sharper relief following the launch of the Lee Myung-bak government. Of particular concern has been the delay in implementation of the agreement from the first round of North-South prime ministerial talks over the implementation of the October 4 Declaration, which included matters related to the development of the KIC such as the construction of dormitories for North Korean workers and the resolution of the 3C issues (communications, customs, conveyance). Delays in the construction of dorms in the area around the KIC, the building of a day care facility for the children of workers, and repair of the highway between Kaesong and Pyongyang has led to issues concerning stable access to the North Korean labor pool.
Assessment of the 2008 DPRK economy, outlook for 2009
Posted Date : 2009-02-02 (ICNK Forum No. 09-2-2-1) Kang-taek Lim (Korea Institute for National Unification) Suk-ki Lee (Korea Institute for Industrial Economics and Trade) Young-hoon Lee (Bank of Korea) Eul-chul Lim (Institute for Far Eastern Studies, Kyungnam University)
In the 2008 North Korean New Year’s Joint Editorial, Pyongyang established the year 2012 as “The Year of the Perfect Strong and Prosperous Nation,” while labeling 2008, “The Year of Turnabout,” and, “The Year of the Betterment of the Livelihoods of the People.” As the year marked the 60th anniversary of the establishment of the Democratic People’s Republic of Korea (DPRK), the regime projected a highly motivated façade, but there was no sign of new changes in the North’s economic policies. [Sanctions] [Development strategy]
Firm in Kaesong gets quality kudos
September 26, 2009 North Korean workers helped a South Korean company operating at a joint factory park win a top product quality certificate, a business body here said yesterday. Sungrim Precision, established in 1993, set up a plant at the complex in the North’s border town of Kaesong in April last year to produce plastic caps for food containers. Currently, the company employs 88 North Korean workers at the plant, plus three managers from the South. According to the Korean Chamber of Commerce and Industry, the ratio of defects per million parts produced at Sungrim Precision’s Kaesong plant was below 0.00001 over the last six months, a level considered virtually defect-free. [Quality]
United Korea economy could pass Japan: Goldman Sachs
By Jonathan Thatcher Reuters Monday, September 21, 2009; 1:55 AM SEOUL (Reuters) - A united Korea -- combining Asia's fourth biggest economy with one of its poorest -- could surpass that of Germany or Japan in economic might in the next 30-40 years, U.S. investment bank Goldman Sachs said on Monday. Though North Korea's planned economy system looks to be on the edge of collapse, it offers a large and cheap workforce, a wealth of minerals that the resource-poor South currently has to import to feed its industry and the likelihood of gains in productivity and its currency once economic reforms take hold. "We project that a united Korea could overtake France, Germany and possibly Japan in 30-40 years in terms of GDP in U.S. dollar terms," it said in a report. [Unification benefit]
Goldman Sachs Has a Different View of Korean Unification
Economist Optimistic That North Korea's Growth Potential Could Benefit South
* September 22, 2009 By Evan Ramstad SEOUL--A united South and North Korea could boast an economy larger than France, Germany and possibly Japan by the middle of the century, according to a Goldman Sachs Group study that may shake up conventional wisdom about unification. Since the reunification of West and East Germany 20 years ago, South Korean leaders and economists have convinced many people here that reuniting with North Korea will be costly and disruptive. In the latest gloomy forecast, a government think tank last month said that the tax burden ratio, or proportion of tax revenue to gross domestic product, would need to rise by two percentage points and stay that way for 60 years to pay for reunification. In the study released Monday, Goldman Sachs economist Kwon Goo-hoon says the risks of reunification need to be re-evaluated, particularly in the wake of the rapid development of countries like Vietnam and Mongolia that also had state-run economies like North Korea's. His study contains North Korean data that he acknowledges may not be accurate and assumptions about future behavior that may not pan out. Even so, its tone is more optimistic than previous studies that contributed to South Koreans' ambivalence about unification. [Unification benefit]
North Korea Said to Shut Market in Bid for Control
By CHOE SANG-HUN Published: September 19, 2009 SEOUL, South Korea — North Korea has shut down its largest unofficial market in a sign that the Communist government was intent on quashing, or at least better controlling, market activities that it had tolerated for years, Seoul-based organizations monitoring the country said last week. The market, on the outskirts of Pyongyang, was closed sometime in June and vendors were dispersed to two or three smaller nearby markets, according to the Network for North Korean Democracy and Human Rights, or NKNet, which says it monitors the North using informants from inside the country.
Two Koreas Reach Deal on Wage Increase at Kaesong Complex
South and North Korea have agreed on the scale of wage hikes for North Korean employees at the Kaesong Industrial Complex. The Unification Ministry in Seoul said the government has agreed to accept Pyongyang's proposal of a five-percent increase in wages after consulting with South Korean firms operating in the industrial park. This means workers with the lowest monthly salary of about US$55 will now get $58. With this agreement officials said North Korea appears to have withdrawn its previous demand for a four-fold rise in wages. [Kaesong] [Overtures]
North Korea makes overtures to normalize Kaesong project
South Korean authorities are slow to move beyond 5 percent wage hike agreement for workers in Kaesong, leaving dormitory and land rental fees on the table » South Korean representatives to the inter-Korean Kaesong talks were met by North Korea‘s demand that Kaesong Industrial Complex employees‘ monthly wages should be raised 300 dollars, and return through the Dorasan C.I.Q. located in Paju city, Gyeonggi Province, June 11. North Korea submitted a plan Thursday to apply a 5 percent hike from last year’s wages for North Korean workers at the Kaesong Industrial Complex starting Aug. 1, 2009 to the end of July 2010. Analysts are interpreting this as signaling a withdrawal of their demand for wages be raised to 300 dollars per month presented at working level Kaesong talks in June. [Overtures] [Kaesong]
Goat Milk Products Available
Pyongyang, September 11 (KCNA) -- Kefir and other goat milk products are available in roast goat-meat restaurants in different parts of Pyongyang. Choe Yun Hui, manager of the Kefir Shop under the Commercial Management Department of the Pyongyang City People's Committee, said that its district branch shops provide people with fresh goat milk products and increase their assortments to improve their dietary life. The Roast Goat-meat Restaurant in Puksong-dong No. 1, Phyongchon District, serves ten-odd dishes such as kefir, cheese, roast meat with kefir juice, fried food mixed with cheese, fried potato and bread flour and goat-meat ball. The kefir branch shops in all districts are teeming with customers of all ages. Kefir stands come into being in streets of the capital to present a new scene this summer.
N. Korea Proposes 5% Wage Hike for Gaeseong Workers
By Kang Hyun-kyung Staff Reporter North Korea proposed a 5-percent increase in wages of workers in the Gaeseong Industrial Complex on Friday, signaling a shift from its demand that the South must pay $300 in wage hikes at inter-Korean talks in June. The sudden conciliatory gesture came days after the North released water from the Hwanggang Dam on the Imjin River, which killed six South Koreans. Unification ministry spokeswoman Lee Jong-joo said that the government received a proposal from the North that it would like to sign a contract for a 5-percent wage hike for workers at the joint industrial complex. Currently, the average minimum monthly income for North Korean workers is approximately $55. [Kaesong] [Overtures]
Louis Vuitton Wins Suit Against Counterfeiter
At left is a Santa V-branded bag, which a Seoul-based manufacturer imitated from the iconic Louis Vuitton speedy bag. By Jane Han Staff Reporter Louis Vuitton Malletier, a unit of French luxury goods maker LVMH Moet Hennessy Louis Vuitton, said Thursday that it has won a lawsuit filed last year against a Korean wholesaler, which has been manufacturing and selling imitation bags under the brand Santa V for the past 18 years. This is the first time the luxury goods retailer has raised a trademark infringement claim in South Korea, sending a warning to domestic abusers of the iconic luxury label. [IPR] [Brand] [Counterfeit] [IM]
Underground Economy Accounts for 28 Percent of GDP
By Jane Han Staff Reporter South Korea's underground economy has shrunk slightly in recent years, according to the National Assembly ? but it is still bigger than those of advanced economies. This means that more workers, merchants and consumers here exchange goods and services under the table without paying any taxes. The country's estimated underground economy, or black market, accounted for 27.6 percent of its gross domestic product (GDP) in 2005, the fourth-highest among the Organization for Economic Cooperation and Development (OECD) members, the National Assembly Budget Office's analysis of 28 countries showed Tuesday. [IM]
N. Korea boosts incentives for foreign investors
SEOUL, Sept. 4 (Yonhap) -- North Korea has taken steps to attract more overseas investors by scrapping extra land use fees and introducing selective import rules that can help foreign-owned companies maintain a market share, a Chinese newspaper said Friday. According to the Jilin Newspaper, the official daily of China's Jilin Province, a North Korean official promoted the new foreign-investor friendly measures during a recent trade exposition held in the city of Changchun. [Opening] [FDI]
DPRK banks’ role strengthened to increase security of personal holdings
Posted Date : 2009-09-04 (NK Brief No. 09-9-4-1) The latest issue of the Kim Il Sung University newspaper (2009, no. 2, April) acknowledged the international society’s sanctions against North Korea, and in a bid to encourage a self-determinant resolution to the country’s economic problems, the paper called for “the utmost circulation of dormant cash,” emphasizing the role of the bank. The paper stressed that strengthening the role of the bank was a crucial part of ensuring the country’s socialist system continued to operate. It also stated that elevating the position of the bank and circulating currency were essential elements of ensuring that North Koreans were not reliant on foreign assistance, and that they were able to solve their problems independently. In the article encouraging currency circulation, it was stated that “the oppressive isolation policy of the imperialists grows worse every day,” but that by maximizing capital circulation, domestic economic problems could be resolved and the North could complete its bid to create an economically strong nation even more quickly. [Sanctions] [Banking]
Inter-Korean economic cooperation Kaesong office reopens
As North Korea lifts Dec. 1 bans and cross border train service resumes, additional steps towards normalizing relations remain South Korean staff returned to work at the Consultation Office for the North-South Economic Cooperation in Kaesong (Gaeseong) Monday. The office had been closed by North Korea on Dec. 1. All restrictions placed on Dec.1 have been normalized. North Korea had informed South Korea on Aug. 20 that it would lift all bans pertaining to limitations on exit and entry and stay at the Kaesong Industrial Complex, reopen the office, and resume train service between Panmun and Paju stations. [Kaesong]
Korea Lags Behind in Services Industry
By Kim Jae-kyoung Staff Reporter Despite the government's efforts over the past few years, the nation is still lagging behind in the services industry, the Bank of Korea (BOK) reported Monday. The central bank said that the country has made progress in its transition to a services-driven economy but has a long way to go to catch up with advanced countries, such as the United States and Britain.
Korea Jangsaeng J.V. Company
Pyongyang, August 29 (KCNA) -- The Korea Jangsaeng J.V. Company is a DPRK's famous production base of Koryo medicine and health foods. It, located in Taedonggang District of Pyongyang, meets the requirements of GMP in all aspects of environment, sanitation, building, products examination. It has an integral production process. [IJV]
Seminar: “Doing business with North-Korea”
(Beijing, 21 September 2009) In the current financial and economic situation, companies face many challenges. They must cut costs, develop new products and find new markets. In these fields, the Democratic People’s Republic of Korea (DPRK, also known as North-Korea) is an interesting option. North-Korea is opening its doors to foreign enterprises. It established several free trade zones to attract foreign investors and there are several sectors, including textile industry, shipbuilding, agro business, logistics, renewable energy, mining and Information Technology, that can be considered for trade and investment. North-Korea is competing with other Asian countries by offering skilled labor for low monthly wages and by offering tax incentives. Last year, North-Korea’s exports rose with 23 percent and
Doing business in North Korea
Videos on doing business in North Korea from the European Business Association in Pyongyang [IJV] [ICT] [Opening]
North Korea – doing business in a demanding environment
Felix Abt
Despite political obstacles within the system and internationally, it is possible to set up successful business in North Korea, says Felix Abt. Identifying partners and exploring market potentials are difficult tasks. Having completed them, one can count on a dedicated workforce. [IJV]
The Network of German companies doing business in Asia
Profile Since its foundation in 1900 the OAV works as a strong network of German companies with activities in the Asia-Pacific region. The OAV is a privately held non-profit organization financed by its more than 500 corporate members
Dreaming an impossible dream? Opening, reform and the future of the North Korean Economy
By Ruediger Frank [June 30, 2009] North Korea’s leadership seems intent on clawing back from the economic reforms of 2002, despite evidence that reform is the only alternative to economic collapse. University of Vienna economist Ruediger Frank argues that the international community should hold its nose, accept North Korea’s status as a nuclear power, and encourage it to return to a policy of reform and opening. AFTER THE MISSILE LAUNCH IN APRIL and the second nuclear test in May 2009 it seems less realistic than ever to think about opening and reform in North Korea. Inter-Korean relations are deteriorating almost daily. Hard-line orthodoxy has been returning to North Korea since late 2005 at an alarming pace as the country enters an era of socialist neoconservativism that emphasizes self-reliance and mass campaigns, cracks down on previously promoted market activities and stresses anti-imperialist struggle more fiercely than throughout most of the last decade. Foreign policy is in sync, retracting the progress of the recent past, canceling agreements and adding military provocation to the increasingly strident rhetoric in the official media. But is there no hope for improvement? To understand the options for the future, it is useful to consider and evaluate the developments that have led us to where we are now. [Economic reforms]

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AUGUST 2009

DPRK preparing for jump in construction demand
Posted Date : 2009-08-13 (NK Brief No. 09-8-13-1) As North Korea continues to pursue the creation of a Strong and Prosperous Nation by 2012, it is now reportedly building a large-scale construction materials facility to meet expected growth in building demand. North Korean authorities have designated the Daedong River Tile Factory, visited by North Korean leader Kim Jong Il on the 13th of last month, as a large-scale construction materials distribution center, and expect the second stage of its construction to be complete by April 2012.
Understanding New Opportunities to Enhance Human Security in the DPRK
By John S. Park August 20th, 2009 This article was presented at the 5th Jeju Peace Forum, Aug. 11-13, 2009. John S. Park, Senior Research Associate and Director of Northeast Asia projects at the U.S. Institute of Peace’s Center for Conflict Analysis and Prevention and an Associate with the Harvard Kennedy School’s Managing the Atom Project, writes, “NGOs and government organizations seeking to achieve economic development goals can work closely with Chinese merchants to leverage routes and mechanisms to increase the flow of goods across HamJi. In doing so, these various players can substantially help improve human security in a key part of North Korea.” [Trade]
What Is Hyundai's Business Outlook in N.Korea?
Since Hyundai Group chairwoman Hyun Jeong-eun has reached a five-point accord on inter-Korean exchanges and cooperation with North Korean leader Kim Jong-il, the prospects for the conglomerate's business activities in the North are brighter. Hyundai Asan's package tours to Mt. Kumgang have been on hold since July last year when a South Korean tourist was fatally shot in the mountain resort. Group tours to Kaesong have been suspended since Dec. 1, when the North enforced a travel ban. Tourism to Mt. Kumgang and Kaesong could resume by Chuseok or Korean Thanksgiving on Oct. 3 provided the government approves it. An Asan staffer said package tours to Mt. Kumgang can be resumed "at any time" because Hundai personnel have remained at the resort and managed the hotel and other tourist facilities. Some 34,000 tourists had booked the Mt. Kumgang tour in advance since February. But South Korea is demanding a written guarantee of the safety of tourists from the North, so it remains to be seen what inter-governmental talks can achieve. [SK NK policy] [Inter Korean business]
Koreans 'Would Spend More on Ethical Products'
Eight out of 10 Koreans say they would buy the products of a company that makes a contribution to society even if they are more expensive. In a survey of 800 adults over 19 years of age released by the Federation of Korean Industries on Sunday, 78 percent of respondents said they are willing to buy the products of a company actively involved in charity. Asked why a company should give to charity, 24.5 percent pointed to a better corporate image and 19.8 percent to a better brand image. Some 72.2 percent agreed that involvement in charitable causes can help a corporate image. Some 69.3 percent of the respondents also believed that a company should publicize its charitable activities, while 28 percent opposed the idea. The favorite cause was scholarship programs, followed by aid to the poor and environmental and regional support. [Green] [IM]
Kim Jong Il Gives Guidance to Newly-built Shop
Pyongyang, August 16 (KCNA) -- General Secretary Kim Jong Il gave on-site guidance to the newly-built Pothonggang Shop. He went round the exterior and interior of the shop for hours to acquaint himself in detail with its construction and display of goods. It is the steadfast will of the WPK to build every edifice in the era of Songun to be absolutely perfect not only in form and content but also in distant future, he said, stressing the need to ensure the construction of even a shop or a dwelling house at the highest level for the people's benefit and convenience. Noting that the Pothonggang Shop has important mission and role to play in further improving the diet of Pyongyang citizens, he advanced highly important tasks that would serve as guidelines in intensifying service activities suited to the intrinsic demand of the socialist commerce. To improve the supply of goods to the inhabitants is an indispensable requirement proceeding from the supreme principle of our Party activities, he said, adding: Nothing is more important for our Party than to provide the people with bountiful and cultured life.
Korea's Advanced Battery Technology Is Key to Edge in 'Green' Auto Market
U.S. automaker General Motors is developing a car to be released in late 2010 that can travel 98 km on just one liter of gasoline. The Chevrolet Volt is powered by an electric motor until it reaches a speed of 64 km/h, when a small combustion engine kicks in. With the engine recharging its batteries, it can travel up to 483 km. If it is used to commute only 50 to 60 km a day, the Volt does not require any gasoline. The Toyota Prius, which is the icon of environmentally-friendly and fuel-efficient automobiles, can travel 20 km/l. Mitsubishi's latest creation i-MiEV, which is powered by electricity only, can travel up to 62 km/l if its electricity costs are calculated as gasoline costs. Japan still leads the world in "green" auto technology, but the U.S. is becoming a serious contender. Even as it faced bankruptcy, GM continued to invest money in developing the Volt. Hybrid vehicles are currently the most popular kind of green cars and Japan is the leader in the field [Green] [Auto]
Hyundai-Kia Replaces Ford as World's No.4 Automaker
For the first time ever Hyundai-Kia Automotive Group has driven Ford out of the number four spot in the global auto sales ranking. [Decline]
Korean brands lag behind Japan in Chinese market
August 11, 2009 Korean cultural content may be popular in China, the world’s largest market, but when it comes to brand recognition Korea falls far behind Japan. [Brand] [Country image]
Kim Jong Il sets sights on increasing processed food rationing in order to improve the daily lives of the people
Posted Date : 2009-08-10 (NK Brief No. 09-8-10-1) North Korean authorities, recognizing that rationing of processed foods is directly linked to the daily lives of the residents of North Korea, are concentrating on a policy of increasing distribution as part of the campaign to build a ‘Strong and Prosperous Nation’ by 2012. The policy calls for the construction of regional food processing facilities throughout the country and using domestic ingredients for all processed foods. In addition, the government plans to undertake diversification of small-scale factories in order to produce soybean paste, soy sauce, cooking oil and other staples, as well as noodles, rice-cake and other foods, all kinds of side dishes, and alcoholic beverages.
Business mission to North-Korea (update)
North-Korea offers unexpected business opportunities. Last month, a company from Singapore opened the first fastfood-restaurant in Pyongyang. This is an example of the open-door policy of North-Korea, and it will be an interesting experience for us to taste a hamburger (with kimchi) during our upcoming business mission to North-Korea (19 - 26 September). [Opening]
Ideological Risk versus Economic Necessity: The Future of Reform in North Korea
By Ruediger Frank
After the launch of a three-stage rocket in April and the second nuclear test in May 2009 it seems less realistic than ever to think about opening and reform in North Korea. Inter-Korean relations are deteriorating almost daily. Hard-line orthodoxy has been returning to North Korea since late 2005 at an alarming pace as the country enters an era of socialist neoconservativism that emphasizes self-reliance and mass campaigns, cracks down on previously promoted market activities and stresses anti-imperialist struggle more fiercely than throughout most of the last decade. [Economic reform] [Opening] [Agency] [Marketisation]
Consumer Goods Exhibition Opens
Pyongyang, August 3 (KCNA) -- A national exhibition of August 3 consumer goods was opened at the Three-Revolution Exhibition on Monday. Displayed there are ironware, electric appliances, clothing, grass-work, agricultural products and sundry goods produced by industrial establishments, housewives' work-teams in ris, townships and districts (dongs), reutilization production work-teams of direct sales shops in cities and counties and home welfare service workers across the country. The products draw attention of visitors as they have satisfactorily met the Koreans' taste and their requirements for living.

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JULY 2009

The Politics of Inter-Korean Economic Cooperation: 1998-2009
Leonid A. Petrov Introduction It has been ten years since the Democratic Peoples’ Republic of Korea (DPRK or North Korea) embarked on a path of change. The first major course correction occurred in 1998 when the DPRK amended its constitution. A new cost accounting system in economic management was introduced, and a new political line of Songun (Army-First Politics) was promulgated in addition to the Juche ideology of national self-reliance. Although this adapted form of Marxism-Leninism continued to guide the country on its way to “Korean-style socialism,” the proposed changes would bring some elements of economic liberalisation and commercialisation of the economy. As part of this cautious plan, several enclaves scattered across the country were allocated by the DPRK government exclusively for inter-Korean cooperation. [Economic reform] [Agency]
Int’l trade in North still focuses on minerals
July 21, 2009 North Korean trade still relies heavily on commodities, according to data from the Korea Trade-Investment Promotion Agency yesterday, with minerals turning out to be the largest export and import categories. Last year North Korean exports totaled $1.13 billion, a 23 percent jump from 2007, according to the report. Of that amount, minerals accounted for $466 million, an increase of 33.5 percent from the previous year. Minerals made up 41.3 percent of all exports from the Stalinist country. Overseas shipments of non-metallic goods followed at 16.8 percent of exports or $190.3 million, a 229 percent gain from last year’s export. Mineral exports from the North have grown every year since 2004, when they totaled $152 million. They took a large leap to $243 million in 2005, increased slightly to $244.4 million in 2006 and then leapt again to $349.5 million in 2007. For imports, too, minerals accounted for the largest share last year, at 25.9 percent of all inbound products or $694.8 million, an increase of 41.4 percent from 2007. Total imports were up 32.8 percent to $2.68 billion. The state-run Kotra said that North Korea has been trying to transform its export structure to focus on manufactured goods by spending more on light industry since 2003. However, the country has experienced trouble doing so, as both exports and imports continue to be dominated by commodities. All of North Korea’s oil is imported from China. The amount the country spent on the fuel increased 46.9 percent from $281.9 million in 2007 to $414.3 million last year as global oil prices spiked. [Trade]
North Korea launches beer advert
North Korea's first TV beer commercial is set to be "the new look of Pyongyang" North Korea's latest launch is not missiles, but a TV advertising campaign for a locally-brewed beer. In a rare nod to commercial motives in the resolutely communist nation, the TV advert features a thirsty worker holding a mug of frothy beer. [marketisation]
S. Korean automaker in Pyongyang sends first business profit home
By Kim Hyun SEOUL, July 15 (Yonhap) -- A South Korean automaker operating in North Korea said Wednesday it has posted its first net profit and remitted part of it home, the first southbound money transfer by an inter-Korean venture. Pyeonghwa Motors Corp. made a net profit of US$700,000 for the fiscal year ending in February and sent $500,000 to its headquarters in Seoul via a bank account in Hong Kong, its spokesman Roh Byoung-chun said. The automaker began production in 2002 as a joint venture between North Korea and the Unification Church of South Korean Rev. Moon Sun-myung, who was born in the North. Its plant in Pyongyang produces sedans and small buses with some 340 employees, and its customers are mostly local businesses. [Inter-Korean business] [FDI] [Sanctions]
N. Korean automaker aims to return to peak production by 2012
By Kim Hyun SEOUL, July 14 (Yonhap) -- North Korea's sole home-grown automaker seeks to expand its annual production capacity to 10,000 units by 2012, a level not reached since its peak in the 1970s, a pro-Pyongyang paper said Tuesday. The Sungri Motor Complex, which started production in 1958, has gone downhill as the country suffered economic downturns and severe famine in the decades following the 1970s.
Kim Jong Il Gives Field Guidance to Newly-Built Taedonggang Tile Factory
Pyongyang, July 13 (KCNA) -- General Secretary Kim Jong Il gave field guidance to the newly-built Taedonggang Tile Factory. Being briefed on the factory in front of a big map showing its panoramic view, Kim Jong Il went round its interior and exterior to learn in detail about the construction of the factory and production there.
Pyongyang Strikes Back: North Korean Policies of 2002–08 and Attempts to Reverse ‘De-Stalinization from Below’
By Andrei Lankov
July 10, 2009 This article originally appeared as Andrei Lankov, “Pyongyang Strikes Back: North Korean Policies of 2002–08 and Attempts to Reverse ‘De-Stalinization from Below, ’”Asia Policy, no. 8 (July 2009): 47–71. Copyright (c) The National Bureau of Asian Research. http:www.nbr.orgpublicationsissue.aspx?id=184 Andrei Lankov, Associate Professor at Kookmin University in Seoul, writes, “It is difficult to believe that any effort to reverse the tremendous social changes of the past fifteen years will be completely successful. Still, the period of largely unhindered de-Stalinization from below is over. North Korean authorities are working hard to re-Stalinize the country and to revive the old patterns of a centrally planned and heavily controlled state socialism.” [Marketisation] [Development strategy]
DPRK market closure reports deemed rumor
Posted Date : 2009-07-08 (NK Brief No. 09-7-8-1) North Korea’s main wholesale market, in Pyongysong, was temporarily closed for just over a week during mid-April, but it has reportedly been open and operating normally since then. It was rumored, and reported here, that the Pyongysong Wholesale Market was shut down in mid-June. There was a report that officials felt the market had grown too large, and there was a plan to divide it into East and West Markets. However, reports of these plans have now been deemed nothing more than rumor. A source in Kangdong-gun stated that there has been much talk of closing markets since the beginning of the year, but that no measures have been enforced and everything is operating normally. Another source reported that many traders are traveling to and from Sinuiju and Pyongysong, and that their numbers have been growing since the onset of summer. [Disinformation] [Marketisation]
Wind Power Resources Widely Used in DPRK
Pyongyang, July 6 (KCNA) -- The Democratic People's Republic of Korea directs great attention to the production of electricity by use of wind power along with hydraulic power. Unchon County of South Hwanghae Province has set up thousands of wind power generators in dwelling houses and public buildings by making best use of the rich wind power resources. The wind power generators for families ensure electricity to room lighting, TV and others for their cultural and emotion life. [Green] [Energy]
Hyundai continues to set sails for business in N. Korea
Hyundai Group chairwoman Hyun Chung-eun announces, “Hyundai will never abandon business with North Korea,” during a Hyundai Dragon Ship Competition, July 4. Chairwoman Hyun spoke at a ferry in the Han River with board members and approximately 1,000 employees on board. In the ceremony’s opening address Hyun said, “Businesses operating in North Korea are losing their minds over the long term interruption of the Mt. Kumgang and Kaesong city tour programs, and it has likewise posed some difficulties for Hyundai.” Hyun added, “However, Columbus was able to find the new continent with a shortage of food on only a ‘dream and a hope.’” She continued to emphasize a will for continuing business with North Korea. Hyundai experienced a profit loss of 130 billion Won last month from the suspension of their Mt. Kumgang tours.
European Trade and Investment Mission to DPRK
Eur_TI_Mission.pdf In the current financial and economic situation, companies face many challenges. They must cut costs, develop new products and find new markets. In these fields, North-Korea might be an interesting option. Inspired by the economic successes of its neighbouring country China, North-Korea has since a few years opened its doors to foreign enterprises. It established several free trade zones to attract foreign investors and there are several sectors, including textile industry, shipbuilding, agro business, logistics, renewable energy, mining and Information Technology, that can be considered for trade and investment. North-Korea is competing with other Asian countries by offering skilled labor for very low monthly wages and by offering tax incentives. Last year, North-Korea’s exports rose with 23 percent and its imports with 32 percent. Do you want to explore new business opportunities for your company? Then join us from 19 - 26 September 2009 on our trade & investment mission to North-Korea. The program includes individual matchmaking, company visits, network receptions and dinners. Furthermore, we will visit the annual Autumn International Trade Fair in Pyongyang (see photo). We will also meet European business people who are working and living in North-Korea. The mission is meant for entrepreneurs from various business sectors; tailormade meetings will be arranged by our local partner, the DPRK Chamber of Commerce. The program of this unique mission has been attached and we can be contacted for further details. In case you want to participate: please register as soon as possible, so we can start the visa-application procedure.
Inter-Korean Working Contact for Revision of Contracts on KIZ Made
Pyongyang, July 2 (KCNA) -- A north-south working contact for the revision of the contracts on the Kaesong Industrial Zone (KIZ) was made on the spot on Thursday. At the contact, the north side expressed regret over the fact that no progress has been made in the working contact though it made sincere efforts as evidenced by its advancement at the previous contacts of the constructive proposals for reexamining and renegotiating the work in the KIZ as required by the changed north-south relations and the present reality, etc. It is necessary, above all, to refrain from doing anything to create difficulties in the way of the working contact, the north side held, recalling that unpleasant things contrary to the contact are taking place in south Korea without let-up and the campaign for "sanctions" and reckless remarks calling for confrontation in the systems are getting undisguised there. Noting that even the "basic plan for defence reforms" simulating a "preemptive attack" and "contingency" is made public, the north side continued: [Kaesong]
Sanctions Come Amidst Reported Growth of North Korea’s Economy
by Karl Friedhoff (intnd@keia.org) and Nicole Finnemann (nmf@keia.org) The month of June has been an inauspicious one in recent Korean history—marking the outbreak of the Korean War in 1950, and naval skirmishes in 1999 and 2002—and June 2009 now brings its own bit of history to the Korean peninsula. Following more than two weeks of negotiations, the United Nations Security Council finally unveiled Resolution 1874—the international response to the late-May nuclear test conducted by North Korea. The resolution comes at a time of increasing tensions, and intelligence analysis from several nations signal that the DPRK may be preparing for a long-range missile test—possibly in the direction of Hawaii—and a potential third nuclear test. North Korea, via its central news agency, the KCNA, reacted predictably. [Cliche]
N.Korean Economy Grows Faster Than S.Korea's
For the first time in a decade North Korea's economy grew more than South Korea's. The central bank says the North's gross domestic product grew 3.7 percent in 2008 from the previous year while the South's only grew a little over 2 percent. But the impoverished state's GDP growth comes after two years of contraction, apparently thanks to a boost in crop production due to better weather and economic and energy aid to North Korea by countries in six-party nuclear talks in return for nuclear dismantlement. The Bank of Korea says since these are short-term factors, the growth does not mean the Stalinist country’s economic conditions have improved. [Spin]

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JUNE 2009

Gov't Sued for Blocking Inter-Korean Business
A company involved in inter-Korean economic cooperation projects is suing the South Korean government for damages sustained because the government repeatedly refused to grant permission to their employees to travel to North Korea. [SK NK policy] [Inter-Korean]
Taedonggang Beer
Pyongyang, June 25 (KCNA) -- The beers including black beer and rice beer made by the Taedonggang Beer Factory are these days popular with the Pyongyang citizens. Beer houses are crowed with working people who look pleased with their successes in the current 150-day campaign. It was Juche 91 (2002) that the just built Taedonggang Beer Factory began supplying beer to the citizens. The cold and soft Taedonggang beer rich in gas content immediately came into great favor among the customers by catering to their tastes. Its fermentation degree is 77.5 percent. The beer houses distributed rationally in residential quarters regularly serve beer carried to them directly from the factory. The refrigerator vans carrying beer have a traffic privilege on the streets of Pyongyang like cars carrying soybean milk to children. The citizens call Taedonggang beer "cold yet warm beer" as it is associated with the warm care of General Secretary Kim Jong Il for the people.
Foreign business activities in DPR Korea
Chongryon's TV broadcast Foreign business activities in and with the DPR of Korea which includes the meeting with EBA can be found here on Youtube.
The following explanation is given on Youtube: "The purpose of this film is to highlight the legitimate business opportunities available in the DPR of Korea taken by partners such as Lafarge, Orascom, and Russian Railways. Smaller investments are also highlighted such as the PyongSu pharmaceutical joint venture. "
Other clips
- http://www.youtube.com/watch?v=eJytd8VNQro
- http://www.youtube.com/watch?v=MMZfsv8P2mM
Inter-Korean exchange, investment reduced as relations crumble
Posted Date : 2009-06-16 (NK Brief No. 09-6-16-1) The amount of inter-Korean exchange has shrunk considerably this year, as tensions between the North and South continue to mount. According to the ROK Customs Administration’s inter-Korean trade office, cross-border transactions between January and April of this year fell 24.8 percent from 2008; trade amounted to 426.35 million USD, down from 566.92 million USD during the same period last year. South Korean imports were down only 9.5 percent, at 260.19 million USD, but exports to the North amounted to a mere 59.4 percent of the amount sent last year, recording 166.17 million USD. 54.9 percent of these goods (by value) traveled across the border by passing through Dorasan Station; 32.8 percent went through Incheon Harbor; 6.4 percent through Busan Harbor, 1.6 percent through Sokcho Harbor; and 1.1 percent passing through Goseong. [SK NK policy]
Foreign investors eyeing developments in N. Korea: Standard Chartered CEO
By Kim Soo-yeon and Lee Youkyung SEOUL, June 19 (Yonhap) -- Amid growing tension on the Korean Peninsula, foreign investor sentiment toward South Korea will depend on how the North Korean nuclear issue develops, the head of Standard Chartered Plc said Friday. [Dilemma]
North Korean art on full display
At the recent Nha Trang Sea Festival fine art from the Democratic People’s Republic of Korea was exhibited in Vietnam for the first time ever. Duc Hanh reports The largest collection of paintings from the Democratic People’s Republic of Korea (North Korea) ever shown in Southeast Asia was put on display at the Nha Trang Sea festival last week. The paintings were produced by more than two dozen artists with recognized artists – so-called Merited artists – and emerging talents all contributing.
The painting collection belongs to Swiss businessman Felix Abt and his Hanoi-born wife Doan Lan Huong, who lived and worked in Pyongyang for seven years, where they got to know and love North Korean arts. At present Abt and his family mostly stay in Nha Trang, Vietnam where they manage their own website Pyongyang-painters.com, one of the very few on-line galleries outside North Korea permitted to sell art and to represent the country’s leading artists as well as new talents.
Companies Getting Ready for Exodus from Kaesong
Growing uncertainty over the future of the joint-Korean Kaesong Industrial Complex is driving South Korean firms operating there back across the border. Apparel manufacturer Skinnet on Monday became the first company to decide to stop operations at the complex. Stopping short of full withdrawal, some South Korean firms have already brought some of their facilities back to the South. Other firms have transferred production from Kaesong to China or Vietnam. The moves are seen as preparations for a full withdrawal from the complex.
1st S.Korean Company Pulls Out of Kaesong
The first South Korean company decided Monday to withdraw from the Kaesong Industrial Complex amid constant uncertainty over the future of the inter-Korean project. The apparel company, which mainly makes fur and leather clothes, decided to withdraw from Kaesong completely and filed an application to wind up the business on Monday, a government official said.
Kim Jong Il Visits Kosan Fruit Farm
Pyongyang, June 7 (KCNA) -- General Secretary Kim Jong Il gave field guidance to the Kosan Fruit Farm. After being briefed on the farm before its map on prospective plan, he went round different parts of the farm including a newly-built orchard to acquaint himself in detail with the modernization of orchard and fruit production. He gave a high appreciation of the fact that the party members and other working people of the farm created the orchard of 700 hectares, finished the construction of network of its facilities and dwelling houses for several dozens of households and the building of nursery on an expansion basis and did a lot of other work in one year.
DPRK's Efforts for Combating Climate Change
Pyongyang, June 5 (KCNA) -- The climate change is now posing a great menace to the human existence. The United Nations Environment Programme set forth the theme "Your planet needs you! Unite to combat climate change!" for this year and called upon all the countries to turn out in the drive for combating the climate change. Jong Yong Nam, vice-chairman of the Central Committee of the Nature Conservation Union of Korea, said in an interview with KCNA on the occasion of the World Environment Day (June 5) that the DPRK has set the prevention of the climate change as an important state policy and taken substantial measures for it since it entered the "United Nations Framework Convention on Climate Change", and continued: Great efforts have been directed to restoring the forests destroyed owing to the climate change. The DPRK set the entire people in motion to strictly ban the illegal deforestation and to cover the whole country with forests. At the same time, it also concentrated much effort on building minor hydro-power stations which have no impact on the climate change, thus creating lots of hydro-power generating bases. [Green]
Korea Business News May/June 2009
Peninsula Shocks - "Kaesong Zone in Turmoil" - DPRK Wants to Be Respected - "UNDP to Resume DPRK Operations" - All-out effort for peace ECONOMY - DPRK Starts 150-Day Drive to Raise Production - "China to Strengthen DPRK Trade Ties" - UN Slaps Sanctions on 3 DPRK Firms - DPRK Trade Hits Record US$3.8 Billion - "Economic Revival in Tumen Area" - Mobile Phone Internet Service Available in DPRK INTER KOREAN - Seoul Closes DPRK Aid Bureau - ROK Lawmaker Visits DPRK - "N,S Korea Should Cooperate in Solar Energy" CULTURE & SPORTS - US Christian Bands Perform in Pyongyang - DPRK, China to Build Tour Rail Route - Italian Restaurant Opens in Pyongyang KOREA COMPASS - Koreans in Japan - Korean Proverb
UNDP to Resume DPRK Operations" Yonhap reported that officials of the United Nations Development Program (UNDP) were to visit the DPRK in late May to discuss the reopening of its office there and the resumption of projects suspended two years ago, a ROK government source said. UNDP officials visited Seoul in early May, and discussed the matter with ROK officials, the source said on condition of anonymity. [UNDP]
Two Koreas to Discuss Troubled Joint Factory Project
North and South Korea have arranged a meeting next week to discuss operations at a troubled joint industrial zone. South Korea is expected to use the meeting to press for the release of a South Korean manager of the zone who has been detained by the North since March.[Kaesong]
[Analysis] Forecast grim for June 11 inter-Korea Kaesong meeting
Some experts project that N. Korea may notify S. Korea of changes in Kaesong contracts, while others suggest possibility of linking meeting to June 15 Joint Declaration anniversary » In this June 3, 2009 image provided by DigitalGlobe, North Korea’s sophisticated new missile base at Dongchang-ri is seen. The base is ready for use, according to an independent imagery analyst. (AP Photo/DigitalGlobe) North Korea announced the date and place for a follow-up meeting between South Korean and North Korean authorities to discuss Kaesong (Gaeseong) Industrial Complex Friday morning. The announcement came unexpectedly amid heightening tensions on and outside the Korean Peninsula following North Korea’s recent second nuclear test. For this reason, experts’ forecasts for the Kaesong meeting scheduled for June 11 are fairly grim. The first Kaesong meeting, which signaled the first attempt at official inter-Korea dialogue since Lee Myung-bak was inaugurated, was held on April 21.

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MAY 2009

How the Kaesong Complex Made Things Worse in N.Korea
The Kaesong Industrial Complex was started in 2002 to promote, as the slogan had it, Korean co-prosperity. Once the industrial park is completed in 2010, it was said, it would accommodate over 2,000 South and North Korean and foreign firms to employ 250,000 people and produce US$150 billion a year. Kaesong would become a global free trade city, specializing in manufacturing, finance, commerce and tourism, and become "a breakthrough guaranteeing the South's long-term growth potential."
Insurance policies changed for projects in North
The Lee Myung-bak administration has modified its state-run insurance policy for South Korean companies that have invested in North Korea by increasing the amount of compensation for possible loss incurred from hindrances in the inter-Korean economic projects, including the Kaesong Industrial Complex. The inter-Korean economic cooperation insurance is intended to make up for South Korean companies’ losses incurred from a possible failure of a joint project between the two Koreas, according to the Unification Ministry. The ministry said a company which does business with North Korea used to be entitled to up to 5 billion won ($4 million) of insurance payouts, but the amount has been increased to up to 7 billion won for possible disturbance in their business.
North proposes new road rules, fees in Kaesong
May 21, 2009 In an apparent attempt to tighten its control of the Kaesong Industrial Complex, North Korea gave South Korea a draft proposal late last month for tougher rules on road use in the business park, the JoongAng Ilbo has learned. Under the proposed regulations, the North would ban certain vehicles that cause excessive air pollution and damage roads. It also would assess a range of new fines on South Korean businesses and workers in the area, such as $30 for jaywalking and $1,000 for illegally blocking streets. Fees for damaging asphalt or concrete would run $50 per square meter, and the South would have to perform year-round road maintenance work or face additional fines. The North’s Central Special Development Guidance Bureau, which oversees the complex located just north of the border, handed the draft to its counterpart agency in the South, according to sources from South Korean businesses operating in Kaesong
DPRK suggests KIC business withdrawal
Posted Date : 2009-05-19 (NK Brief No. 09-5-12-1) On May 15, North Korea announced that agreements on land rent, wages, and other issues regarding the Kaesong Industrial Complex were no longer recognized, and that South Korean businesses not willing to accept the North’s new demands were free to leave the KIC. The North’s representative bureau delivered its message through the Kaesong Industrial District Management Committee, announcing, “We declare null and void the rules and contracts on the land rent, land use tax, wages, all sorts of taxes, etc. which we have so far applied to the south side in the [KIC] out of special favor, guided by the spirit of the June 15 Joint Declaration.”
North’s trade hits record $3.8 billion
May 19, 2009 North Korean trade with the outside world, excluding South Korea, hit a record $3.8 billion last year despite rising tensions on the Korean Peninsula. Trade jumped 29.7 percent compared with 2007, the Korea Trade-Investment Promotion Agency, a South Korean trade agency, said in a report issued Monday. Last year, North Korea’s exports rose 23 percent to $1.13 billion, while imports climbed 32.7 percent to $2.69 billion, the report said. The country still posted a trade deficit of $1.56 billion for the year. The report also showed that China’s influence on North Korea’s moribund economy is rising quickly. The communist nation exported $750 million worth of goods to China and imported $2.03 billion last year. “North Korea’s trade with China hit a record last year and keeps growing,” the report said. “In the face of the global economic slump and the North’s rocket launch, North Korea’s external trade is expected to shrink this year. But China’s influence on the North Korean economy is likely to grow further,” it noted. Inter-Korean relations have been frozen since the South Korean government of President Lee Myung-bak took office in early 2008 pledging to get tough on the North’s regime. Seoul has since halted shipments of food and other aid to Pyongyang. Tensions mounted further after North Korea fired a rocket on April 5. Yonhap [NK China] [Trade]
Closing Kaesong Industrial Complex Would Hit N.Korea Hard
North Korea earns some US$33.52 million a year from the Kaesong Industrial Complex, making the inter-Korean joint venture a significant cash cow for the impoverished country. If, as seems increasingly likely, the industrial park is closed, the simple economic loss from stopping operations is not the only blow the North will suffer. Experts speculate the closure could also cause social and political problems following an explosion of discontent by North Koreans who lose their jobs at a time when they are already suffering a food shortage.
Kaesong Complex closure may become a big burden for the two Koreas
N. Korea may lose 34 million dollars in wages per year, while S. Korea would face up to 6 trillion won in company damages The Kaesong Industrial Complex has experienced ultra fast growth since the pilot site was launched in December 2004. Its production has since increased 251.4 million dollars, or 17 times its first year production figures of 14.9 million dollars. The trade related Kaesong Complex amounted to 808.4 million dollars in 2008, which consisted of 44.4 percent of the total inter-Korea trade in the same year. As of April, there were 104 companies that were operating their factories in Kaesong that had hired approximately 40 thousand North Korean workers. Approximately 100 companies received land use permits, and 33 companies are in the midst of constructing their factories there. However, the factories in Kaesong are now showing a sluggish growth rate with the worsening of inter-Korean relations. From January to March, the growth rate of trade related to Kaesong was only 0.6 percent. If the Kaesong Industrial Complex closes, it would be a considerable burden to both Koreas. North Korea would lose 34 million dollars in wages per year and approximately 40 thousand jobs. If support personnel who work in Kaesong were included, the damage estimates would be higher. The potential negative effect on global investments in North Korea could serve as another factor. The damages for South Korea will not be insignificant either. Company damages for factories in Kaesong would range from 1.36 trillion won to 6 trillion won. Furthermore, the ripple effect to inter-Korean trade cannot be estimated.
North Korea Demands Higher Pay at Industrial Park
By Choe Sang-Hun Published: May 15, 2009 SEOUL, South Korea — North Korea said Friday that South Korea must leave a joint industrial park unless it unconditionally agrees to higher wages for Communist workers (sic) and other demands from the North. The two countries have run the complex in the border town of Kaesong since 2004, hoping that it will serve as a pilot project for economic integration. About 100 South Korean factories hire relatively cheap North Korean labor to make shoes, electronic parts and kitchen utensils there. But the project has been caught up in political feuding over the past year, as a new South Korean government has taken a harder line against the North, and the North has heightened tensions with Seoul.
North Korea announces nullification of all “Kaesong agreements”
Kaesong Industrial Complex may close in the face of North Korea’s declaration of “accept new articles or leave” » The officials of the Kaesong Industrial District Management Committee make calls while sitting outside of the Dorasan CIQ in Paju city located in Gyeonggi Province, May 15. “South Korean companies and their personnel at the Kaesong Industrial Complex must unconditionally accept the articles we have delivered. If they have no intention of executing them, they may leave the Kaesong Industrial Complex.” North Korea sent South Korea a hardline notification given in the name of the Bureau of Central Special District Development, North Korea’s institution responsible for managing the Kaesong (Gaeseong) Industrial Complex on Friday.
Second Kaesong meeting between two Koreas is uncertain
S. Korea demands the detainee issue as a prerequisite, while N. Korea wants to limit agenda to wage and land use fees It is reported that there are some difficulties in reaching an agreement on the agenda and schedule for a follow up Kaesong (Gaeseong) meeting between the two Koreas. The first Kaesong meeting, which signaled the first attempt at official inter-Korea dialogue since Lee Myung-bak was inaugurated, was held on April 21. As of May 13, whether there will be a second Kaesong meeting was uncertain.
N. Korea Declares Gaeseong Contract Invalid
North Korea said Friday it has nullified all contracts with South Korea on the operations of a joint industrial venture in Gaeseong and told South Korean firms to leave the park if they cannot accept it. "We declare the nullification of all incumbent regulations and contracts regarding the Gaeseong industrial complex," the North's government agency in charge of the border-town industrial park said in a statement carried by its official Korean Central News Agency. While threatening to terminate the existing contract terms, the agency vowed to install a set of revised regulations and contracts. "The South Korean firms and pertinent personnel of the industrial complex should unconditionally accept the revisions, and if they don't have intentions to accept them, they can leave," the statement said. [Kaesong]
12th Pyongyang Spring International Trade Fair Opens
Pyongyang, May 11 (KCNA) -- An opening ceremony of the 12th Pyongyang Spring International Trade Fair took place at the Three-Revolution Exhibition Monday.
They stressed that the DPRK would make positive efforts to develop economic exchanges and cooperation with all countries friendly towards it on the principle of equality and mutual benefit and boost the international solidarity with the world peace-loving people in the future, too. At the end of the ceremony, the participants looked round the machine tools, electric and electronic equipment, petrochemicals, vehicles, medicines, articles of daily use and foodstuffs displayed by companies and organizations of the DPRK, China, Russia, Germany, Malaysia, Syria, Sweden, Singapore, Australia, Austria, UK, Italy, Indonesia, Vietnam, Thailand, Poland, Turkey and Taipei of China.
Economic Revival Comes to the Tumen River
Construction work on a 63-km freeway linking Tumen and Hunchun in Northeastern China began in 2003 and has got as far as the village of Mijiang. It is one segment of the 482-km expressway linking Hunchun with Changchun, the capital of Jilin Province. When it is completed early next year, it will open a logistics corridor connecting the center of northeastern China to the East Sea across the Tumen River.
The Tumen River Area Development Program is showing signs of coming back to life 17 years after it was conceived.
But not all is rosy. As China and Russia compete to gain the leading role in developing the region, their cooperative relationship could break down. Major business conglomerates shun investment in Northeast Asia region due to North Korea's unpredictability. One senior Samsung executive in China said political stability is key to attracting investment and added that the company would take a wait-and-see attitude for now. [Sanctions] [Spin]

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APRIL 2009

Samsung Tops List of Patents in China
Samsung Electronics applied for the most patents among foreign companies in China last year. The Korean Embassy in Beijing on Monday quoted a report by China's State Intellectual Property Office which said Samsung Electronics filed 2,799 patents, followed by Panasonic with 2,222 and Philips with 1,764. LG Electronics ranked fifth with 1,214. Four Japanese companies including Sony at fourth, Toshiba at sixth and Toyota at eighth and three American companies -- IBM at seventh, GM at ninth and Qualcomm at 10th -- were in the top 10. In terms of countries Korea ranked fourth, filing 9,320 patents, behind Japan, the U.S. and Germany. Out of the total 828,328 patents filed in China last year, foreign companies took up 13.4 percent. China has seen the number of patent applications and trademark registrations soar four-fold since 2002. [IPR]
S. Korean businesses experience success in China’s market
S. Korean firms relocating to Quingdao are surviving the economic crisis by meeting domestic demands Qingdao, China--On the afternoon of April 23, all kinds of metals shine in a store located in the northern Chinese port city of Qingdao. The store “Semi,” owned by 49 year old Park Gwi-yong, is known as the “First Shop owned by a South Korean” on the Qingdao street which bustles with stores selling raw materials for accessories. Although the sun is close to setting, telephone calls continue to ring at Park’s store and employees are busy handling clients.
DPRK, Russia Cooperate in Forestry
Pyongyang, April 27 (KCNA) -- A protocol of the 13th meeting of the forestry subcommittee of the DPRK-Russia intergovernmental committee for cooperation in trade, economy and science and technology was signed in Pyongyang on Monday. Present at the signing ceremony from the DPRK side were Ji Kwang Hae, vice-minister of Forestry, and officials concerned and from the Russian side were members of the Russian forestry delegation led by Ivan Matsorov, vice-minister of Industry and Commerce, and Valery Sukhinin, Russian ambassador to the DPRK. The protocol was inked by Ji Kwang Hae and Ivan Matsorov.
Researches to Create Evodia Daniellii Benn Forests
Pyongyang, April 27 (KCNA) -- The Institute of Forests of Economic Value under the Branch Academy of Forestry is now engaged in energetic researches for the creation of forests of highly productive evodia daniellii benn. By deepening researches to adopt high yielding species, the scientists of the institute have completed new technology including methods of fast treatment of seeds and opened a prospect for raising the yield more than 50 percent. They have also completed a new method of branch grafting to improve the existing evodia daniellii benn into a high-yielding variety. Scientists are going out to local areas to prepare for introducing high-yielding grafted branches in hundreds of hectares of woodland.
World Intellectual Property Day Observed
Pyongyang, April 26 (KCNA) -- The DPRK government will as ever increase its efforts to protect the intellectual property and develop it in cooperation with the World Intellectual Property Organization. Minju Joson Sunday says this in a signed article dedicated to the "World Intellectual Property Day". It continues: The 35th General Assembly of WIPO held in 2000 set April 26 as the "World Intellectual Property Day." This day is marked with diverse events every year. The organization set it as its main duty for this year to conduct the work for invention and creation in the environmental field including the issue of decreasing the emission of carbon dioxide. The rapid development of the society resulting from the growth of the information industry and intellectual economy essentially requires the legal protection of human intellectual creations. [IPR]
Foreign companies give a breath of hope to Kaesong Complex
The industrial zone continues as a model of economic cooperation even as inter-Korean relations falter With a Hyundai Asan worker detained and inter-Korean relations soured, concerns are growing for the fate of the Kaesong (Gaeseong) industrial complex located in North Korea’s border town. A German buyer’s recent decision to expand business ties with a shoe manufacturer in the complex is giving hope that the joint business project between South Korea and North Korea will continue. Under a memorandum of understanding signed on Thursday, Samduk Tongsang Co. said that it will increase supply to Me & Friends, a large-sized German shoe retailer that has 1500 shops in 29 countries across the globe. The South Korean company said the MOU was signed after Michael Alexander, head of Me & Friends, visited the factories of Samduk in Kaesong. “Mr. Alexander saw how North Korean laborers continue to work without problems and was satisfied with the products we produce,” a Samduk official said. Samduk exported 8 million dollars worth of products to Me & Friends last year under the original equipment manufacture (OEM) method, and expects the overseas shipments to exceed 10 million dollars this year.
Companies fret over fate of Kaesong
April 25, 2009 A dozen representatives of South Korean companies at the Kaesong Industrial Complex voiced their concerns over worsening business conditions in the North during a meeting yesterday with Unification Minister Hyun In-taek. The occasion came after North Korea said earlier in the week that it would review “special benefits” that had been granted to South Korea at Kaesong. The North said it would force the South to start paying land-use fees next year, four years earlier than stipulated under the existing agreement, and to raise wages for North Korean workers.
[Editorial] Kaesong as safety valve for inter-Korean relations
In the first official inter-Korean meeting since the start of the administration of President Lee Myung-bak North Korea proposed renegotiating all of the special measures its granted regarding the Kaesong (Gaeseong) Industrial Park. While it is somewhat unexpected to have North Korea focusing on business matters at a time when relations are so poor, we cannot assume its motive is entirely about its “cash intake.” Indeed, since it has opened a channel for possible dialogue, it is now time for South Korea to offer a prudent and profoundly different kind of response.
Russia, China could open rail link via N. Korea this year
15:23 | 22/ 04/ 2009 VLADIVOSTOK, April 22 (RIA Novosti) - A new international rail transport corridor linking Russia and China via North Korea could open in 2009, a regional issue of the popular Russian business daily Kommersant said on Wednesday. The First Cargo Company, a subsidiary of Russia's rail monopoly RZD, and China's Yanbian Haihua Imports & Exports Trade Company recently signed the deal. North Korea is expected to join the agreement in May 2009. The rail line is expected to link the Russian settlement of Khasan, the North Korean border town of Tumangang and China's Tumen. "The Chinese side has already delivered fuel, a locomotive and variable gauge wheel sets, so that Russian rail carriages can travel along the narrower North Korean track," the newspaper said, citing a spokesman from the Russian company. Around 50-60 rail carriages a day could currently use the rail link. However, China said it was ready to rebuild the 120-km (75-mile) North Korean section of the rail line to increase its cargo capacity tenfold, up to 500-700 rail carriages a day, as soon as North Korea joins the project.
Joint Project Puts 2 Koreas at Odds Again
By CHOE SANG-HUN Published: April 21, 2009 SEOUL, South Korea — North Korea threatened to withdraw cheap labor and other incentives for South Korean factories in a joint industrial complex during rare but brief talks between the countries on Tuesday. [Kaesong]
N. Korea wishes to revisit inter-Korean Kaesong complex agreements
Analysts interpret Kaesong’s fate hinges on South Korea’s PSI participation North Korea told South Korea on April 21 it wanted to “reexamine the contents of standing contracts between North Korean and South Korean authorities regarding the Kaesong (Gaeseong) Industrial Park.” A Seoul government official said that during a meeting between the two sides North Korea said South Korea had not abided by its agreements regarding Kaesong. North Korea expressed wanting to reconsider the deal. Formally speaking, North Korea sold Hyundai Asan a 50-year land lease to the Kaesong Industrial Complex. The Kaesong Industrial Complex could be at a major crossroads.
Seoul officials say that in talking about wanting to revisit inter-Korean agreements about the complex, North Korean officials also issued what was described as a warning in response to Seoul’s decision to become a full participant in the US-led Proliferation Security Initiative (PSI). Meanwhile, observers speculate that the Cheong Wa Dae (the presidential office in South Korea or Blue House) is agonizing over whether to temporarily delay the timing of the announcement of its decision to fully participate in PSI or to delay it indefinitely. Many will be watching to see what President Lee’s final decision is on the matter. [Kaesong] [PSI]
DPRK sets 2009 budget at 3.45 billion USD
Posted Date : 2009-04-13 (NK Brief No. 09-4-13-1) On April 9, North Korea opened the first session of the 12th Supreme People’s Committee, at which this year’s budget, 5.2 percent larger than that of last year, was passed. Pyongyang set the 2009 budget at 482.6 billion Won (1 USD=140 Won). At this meeting, North Korea’s newly appointed Minister of Finance Kim Whan-su reported on last year’s budget and introduced the spending plan for 2009. While details were not revealed, it was noted that the overall budget had grown by 5.2 percent, with expenditures up 7 percent. The 2008 budget had been set at 451.5 billion won. It was also reported that last year’s spending was 1.6 percent over-budget, but that 99.9 percent of budgeted expenditures had been carried out. Minister Kim reported that taxes from Chinese enterprises and related national businesses had grown by 5.8 percent, and that cooperative organizations were up 3.1 percent, production earnings were up 6.1 percent, real estate income had grown 3.6 percent, and social insurance had brought in an addition 1.6 percent.
October 15, 2008 - Towards a Northeast Asia Security Community: Implications for Korea's Growth and Economic Development
Korea Economic Institute, Washington
- Prospects for a Northeast Asia Security Framework
  • Scott Snyder
- From a Fault Line to a Catalyst: An Emerging Korean Confederation and the Contour of a Northeast Asian Security Community •
  Key-Young Son
- Toward a Northeast Asian Security Community: Implications for the North Korean Economy
  Bradley Babson
- Features of a Peace Dividend for the Two Koreas
  Paul Chamberlin
- Toward a Northeast Asian Security Community: Implications for South Korea’s Economy
  Soon Paik
- A Peace Dividend for North Korea? The Political Economy of Military Spending, Conflict Resolution, and Reform
  Bernhard Seliger
Hyundai Asan Staffer Arrested in N.Korea
North Korea on Monday morning arrested a Hyundai Asan staffer working at the joint Kaesong Industrial Complex on charges of insulting the regime. A South Korean government official said North Korea claims the staffer denounced the political system, and "sought to corrupt a North Korean female worker and cajole her into defecting from the North." The veracity of the claim could not be confirmed.
Mass-breeding of Sabina Chinensis in DPRK
Pyongyang, March 30 (KCNA) -- Much effort has been made to mass-breed Sabina chinensis by botanists of the DPRK. The ornamental aromatic tree is good for environmental protection and widely used in making medicines and others. Its utility field is being enlarged steadily. In order to meet the growing demand for the trees, the researchers, basing themselves on the scientific exposition of the biological features of the tree, have put the sapling production method by stem cutting on a scientific base according to species of trees and processes and succeeded in its application to production. In the past the propagation of the tree was mainly relied on the transplantation of wild trees growing in mountains and the method of producing saplings from seed. The sapling production by the new air-tight method of planting cuttings makes it possible to remarkably increase the propagation rate of the tree as against the old methods, and produce thousands of saplings from a mother tree. The saplings bred by the new method have rooted in and around the Revolutionary Martyrs Cemetery on Mt. Taesong, Mausoleum of King Tangun, Central District Landscaping Company and other parts of the capital to add beauty to the city. The new method is greatly helpful toward covering the whole country with trees within a few years.

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MARCH 2009

Satellites and salads as the DPRK moves toward construction of a strong and powerful nation
Posted Date : 2009-03-26 (NK Brief No 09-3-26-1) North Korea has given notice that it will launch a rocket to place its ‘Kwangmyongsong 2’ satellite into orbit some time between the 4th and 8th of next month. The Choson Sinbo, the newspaper run by the pro-Pyongyang ‘General Association of Korean Residents in Japan’, carried an article emphasizing that the launch of the satellite will be an important step in the construction of a ‘Strong and Prosperous Nation’ by the year 2012.
DPRK bans goods from markets
Posted Date : 2009-03-20 (NK Brief No. 09-3-20-1) According to the North Korea Intellectuals Solidarity group (www.nkis.kr), North Korean authorities released a list of goods banned from markets across the country on March 15. The ban goes into effect on April 1. The official list is said to include almost all wares currently being sold in the North’s markets, effectively banning market operations and practically outlawing private trade. It was also reported that notices posted in the Hyesan and Wei Yan markets, in Yanggang Province, included not only a list of over 200 goods banned from sale, but also dictated the price at which allowable goods were to be sold.
Q & A on the Rescission of North Korea from the State Sponsor of Terrorism List
US Department of Commerce
Q: How does the President’s announcement affect U.S exporters?
There is no change for U.S. exporters. Pursuant to Section 746.4 of the EAR, the Department of Commerce will continue to require a license for the export or reexport to North Korea of items subject to the EAR, except food and medicine classified as EAR99. Once the rescission takes effect, the Department of Commerce plans to amend the EAR to remove North Korea from Country Group E:1 and make other conforming changes to implement the rescission. Removing North Korea from Country Group E:1 will raise the threshold value for calculating the de minimis level of foreign goods destined to North Korea to 25% controlled U.S. content. Currently as a member of Country Group E:1 the threshold value for North Korea is 10%. [Sanctions]
The (unexpected) hazards of doing business in ‘a dangerous country’
Felix Abt was the Swiss-born initiator and first President of the European Business Association in Pyongyang, Director of the Pyongyang Business School, and Managing Director of the international joint venture pharmaceuticals company, Pyongsu Pharma. Despite the US government’s lifting of the application of the Trading with the Enemy Act (TWEA) with respect to DPRK, and notified rescinding North Korea's designation as a State Sponsor of Terrorism in 2008 it appears that US government departments still apply sanctions emanating from those acts. This email from Felix was received 19 March 2009 Tim Beal
Dear Tim, A European life insurance company cancelled my life insurance because I am a dangerous person living in a dangerous country. Credit card organisations cancel credit cards for such persons in such countries, health insurance companies come up with other reservations and limitations and the latest organisation that has just expelled me is the social and business networking organisation LinkedIn with a very curious explanation (see below). I thought that the US eased its embargo policies towards the DPRK, but obviously I was mistaken. [Sanctions] [Dissension]
Hyundai’s opportunity to avoid a crisis
Woo Jong-won, Professor of Economics, Saitama University Column] Hyundai Motors is doing well. Over in the highly contested North American market, Toyota sold 30 percent less in January of this year compared with 2008, while Hyundai saw a 15 percent increase in sales for the same period. Toyota’s poor results have led the company to lay off more than 3,000 irregular employees since September of last year, and yet Hyundai Motors is basically maintaining its current number of employees. You even hear people joke about how, in Korea, you can enjoy life-long employment.
More fundamentally this is a matter of Hyundai’s inability to grow out of the “developing country mode” of depending on price. Toyota workers usually work 2,000 hours a year while Hyundai’s workers work 2,400 hours, with no small number of them working more than 3,000. Hyundai tries to gain cost competitiveness through long hours that permit a higher plant operation ratio and lower hourly wages.
Kim Jong Il Gives On-the-Spot Guidance to Sungri Motor Complex
Pyongyang, March 17 (KCNA) -- General Secretary Kim Jong Il gave on-the-spot guidance to the Sungri Motor Complex. He first went round the monument to the on-the-spot guidance given by President Kim Il Sung standing in the compound of the complex and historical buildings. Kim Il Sung visited the complex 14 times since the historic day he chose the site of the complex on October 20, 1950, foreseeing the future of the triumphant country. He clearly indicated the road to be followed by the complex and worked heart and soul for the development of the motor industry.
No Future for Kaesong without North Korean Pledge
After effectively holding around 720 South Korean workers prisoner in the Kaesong Industrial Complex since Friday, North Korea on Monday allowed 453 of them to return home. But there have been major difficulties in running the industrial complex as North Korea prohibits the entry of South Korean workers and raw materials and other goods. If the situation persists until Friday, when the "Key Resolve" joint military exercises between South Korea and the United States comes to an end, 90 percent of the factories in the complex are expected to shut down. North Korea has used the joint military drills as an excuse to impose the unilateral ban.
Casting doubt on Gaeseong’s future
[Editorial] It is inexcusable that North Korea has again, beginning Friday, prohibited Southerners from travel to and from the Gaeseong (Kaesong) Industrial Complex. If arbitrary decisions like this continue it will cast doubt on the complex’s future. Southern companies that have invested there are already being hurt by this. [Kaesong]
Construction of Hydroelectric Power Stations Changes Looks of Country
Pyongyang, March 6 (KCNA) -- Many hydroelectric power stations have been built in the DPRK these years, which are greatly conducive to the economic construction and the people's livelihood and have changed the looks of the country beyond recognition. The large-size hydroelectric power stations built in Kangwon, North Hwanghae and North Phyongan Provinces are supplying ample electricity to the economic sectors. The commissioning of the Wonsan Youth Power Station and Ryesonggang Youth Power Station No.1 made it possible respectively to solve the problem of drinking water in Kangwon Province and to irrigate fully the vast rezoned Yonbaek Plain. The power stations built along Taeryong River protect these areas from flood damage like embankment. Hundreds of minor power stations constructed over last ten-odd years are providing enough electric power to local industry factories so as to put their production on normal track and to dwelling houses for their lighting and heating [Energy]
N.Korea Warned Kaesong Firms Over Staff Pay
South Korean firms will be ordered to close down or pay fines if they delay pay for North Korean staff at the joint Kaesong Industrial Complex, North Korean authorities reportedly told the firms in November. The Kaesong Industrial Council on Wednesday said North Korea last November notified South Korea's Unification Ministry and the Kaesong Industrial Complex management committee of 27-point labor rules in the Kaesong Industrial Complex. Under the rules, South Korean firms will be fined up to US$2,000 if they delay a month's pay and ordered to suspend operations for 10 days and pay an additional 300 percent of basic pay to staff who have worked for more than 24 hours without a break if they delay pay for two months. The council worries that now firms in the Kaesong complex are receiving fewer orders due to the recession, they could face heavy costs if the rules are strictly applied. A total of 93 South Korean firms are currently operating in Kaesong. They are paying about $75, including the minimum wage and social security, per month on average to each North Korean worker.
The WTO Is Crumbling
As trade protectionism sweeps across the world, the World Trade Organization is crumbling. For Korea, whose exports account for more than 40 percent of its GDP, strengthened trade protectionism would be a terrible blow. The WTO system is being shaken in its foundations as countries around the world including the United States, China, Japan and the EU provide massive amounts of aid money to their financial, automotive and home appliance industries. The United States has already set aside US$17.4 billion in rescue funds for General Motors, as well as $1,500 in tax cuts for each car purchase. France, Germany and England also came out with support measures for their automotive industries. The government of Taiwan has decided to assist in the creation of a huge mergers and acquisitions fund for its semiconductor manufacturers. [Protectionism]
North Korea Fund Seeks $50 Million After Terror Label Removed
By Bradley K. Martin Feb. 24 (Bloomberg) -- A U.K. businessman is seeking to raise $50 million to invest in North Korea, reviving a 2005 plan after the U.S. government removed the communist regime from its list of countries that support terrorism. ChosunFund Pte. Ltd. will join with North Korean partners for mining and energy projects, Colin McAskill, founder of the Singapore-incorporated fund, said in an interview. “The country holds huge natural resources but is capital starved and lacks the technology and management skills with which to develop them,” McAskill said. North Korea’s economy collapsed in the 1990s with the demise of communist regimes in Eastern Europe that had provided aid and favorable trade terms. McAskill scrapped the original fund after U.S.-imposed sanctions that led to a freezing of North Korean deposits at international banks. [Terrorism list] [FDI] [Opening]
Economic Mission to North-Korea (9 – 16 May 2009)
In the current financial and economic situation, companies face many challenges. They must cut costs, develop new products and find new markets. In these fields, North-Korea might be an interesting option. Inspired by the economic successes of its neighbouring country China, North-Korea has since a few years opened its doors to foreign enterprises. It established several free trade zones to attract foreign investors and there are several sectors, including textile industry, shipbuilding, agro business, logistics, mining and Information Technology, that can be considered for trade and investment.
Do you want to explore new business opportunities for your company? Then join us from 9 - 16 May 2009 on our trade & investment mission to North Korea. The program includes individual matchmaking, company visits, network receptions and dinners. Furthermore, we will visit the annual Pyongyang Spring International Trade Fair. The mission is meant for European entrepreneurs from various business sectors; tailormade meetings will be arranged by our local partner, the DPRK Chamber of Commerce.
Kim Jong Il Provides Field Guidance to Musan Ore Mining Complex
Pyongyang, February 23 (KCNA) -- General Secretary Kim Jong Il provided field guidance to the Musan Ore Mining Complex. He went round historic relics and data associated with the giant footsteps of President Kim Il Sung. The Munsan Mine has turned into a leading large iron ore producer under the wise guidance and meticulous care of the President, he said, adding that the undying revolutionary feats of the President will shine long in the history of the country.

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FEBRUARY 2009

Kim Jong Il Gives Field Guidance to Factories in Wonsan City
Pyongyang, February 12 (KCNA) -- General Secretary Kim Jong Il provided field guidance to factories in Wonsan City. He was accompanied by Ri Chol Bong, chief secretary of the Kangwon Provincial Committee of the WPK, Pak Nam Gi, department director of the WPK Central Committee, and Pak Myong Chol, councilor of the NDC of the DPRK.
Refugees' Remittances to N.Korea 'Growing'
The number of North Korean refugees who remit money to their families in the North is rising. "Some 15,000 North Korean refugees have settled in the country, and over 6,000 of them are remitting money to North Korea," a government official said. "We understand the size of the remittances is also growing." An official with a refugee organization said there must be more than 10,000 who remit money to their families in the North.
Kim Jong Il Gives Field Guidance to Industrial Establishments
Pyongyang, February 4 (KCNA) -- General Secretary Kim Jong Il gave field guidance to the February 8 Vinalon Complex and the Ryongsong Machine Complex seething with the drive for effecting a new revolutionary surge. Accompanying him were Kim Ki Nam, secretary of the Central Committee of the WPK, and Pak Nam Gi, department director of the C.C., the WPK. The first leg of his guidance was the February 8 Vinalon Complex.
Kim Jong Il Provides Field Guidance to Co-op Farm
Pyongyang, February 3 (KCNA) -- General Secretary Kim Jong Il gave on-the-spot guidance to the Tongbong Co-op Farm in Hamju County. He was accompanied by Kim Ki Nam, secretary of the WPK Central Committee.
S. Korea's Exports Tumble Record 33%
South Korea's exports plunged a record 32.8 percent in January from a year earlier as the worldwide economic slump cut into overseas demand for locally made goods, Yonhap News reported quoting a government report Monday. The country's exports reached $21.7 billion, with imports decreasing 32.1 percent to $24.6 billion for a trade deficit of $2.9 billion, according to the report by the Ministry of Knowledge Economy. It was the steepest drop since the country started announcing monthly tallies in 1980, while the drop in import numbers is the highest reached since July 1998. The deficit is also a turnaround from a trade surplus of $542 million in December.
DPRK steps up calls to resolve food shortages unassisted in the new year
Posted Date : 2009-01-29 (NK Brief No. 09-1-29-1) While the international community has expressed concerns that it does not appear that the North Korean food crisis will be resolved this year, on January 22, the [North] Korean Workers’ Party newspaper, Rodong Sinmun, carried an article emphasizing “the way to overcome the food problem is through our own labor,” and stressing that the North needed to “work out our salvation by our own efforts.” In an article titled “Food Crisis that Must Be Urgently Resolved,” the newspaper emphasized that is was “naïve” to think that, under the current circumstances, some entity would decide to come in and solve the food crisis, and that “aggressive efforts are necessary to resolve the food problem on the principle of working out our salvation by our own efforts.”
In addition, it emphasized that with the current freeze of South Korean aid and the North’s shortage of fertilizer, it was important to boost production of organic fertilizer. The KCBS called for a seed revolution, double cropping of potatoes, and cultivation of beans, along with combining the efforts of agricultural and livestock industries and the development of aquaculturing, pisciculturing and fishing efforts.
Highlights of the Joint New Year Editorial
Korea Business News January 2009
Every New Year's Day, the DPRK issues its policy guidelines for the new year in the form of a joint editorial carried by the Rodong Sinmun, representing the Korean Workers' Party, the Joson Inmingun, representing the Korean People's Armed Forces, and the Chongnyon Jonwi, representing the Youth Vanguard. The 2009 Joint Editorial highlights the need to increase electricity production throughout the nation, from thermal and hydro power stations, as well as alternative sources. Electricity supply should be increased, to supply facilities specifically mentioned as; iron & steel plants, metals industry facilities, chemical plants, light industry, manufacturing and textiles as well as the rail network. Increased coal production, metals industry, housing and food sectors all receive special mention.

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JANUARY 2009

DPRK outlines region-specific economic growth plans
Posted Date : 2009-01-23 (Nk Brief No. 09-1-23-1) Following the recent North Korean New Year’s Joint Editorial and its calls for economic measures, on January 5, more than 100,000 people attended a rally in Pyongyang at which customized economic tasks were presented for each of the North’s provinces, taking into account each region’s particular industrial concentration or specialty. According to North Korean media reports on January 20, Pyongyang stressed reforms in steel, power, coal, railway, and other sectors it considers ‘Priority Sectors of the People’s Economy.” It also presented tasks for the promotion of housing construction, refurbishment of pig farms, and the increase in production of farms and light industries providing daily necessities to the people of the North.
Renewable Energy in the DPRK
NCNK Newsletter Vol. 2, Issue 1 January 13, 2009 “About ten years ago in my hometown in New Jersey,” explains Victor Hsu, National Director of World Vision International’s program in the DPRK, “I began to notice that the school zebra crossing signs were powered with solar panels. Each time I drove by the school I would wonder when the DPRK would begin to adopt the use of solar energy.” Four and a half years ago, the Democratic Peoples Republic of Korea (or DPRK, the official name of North Korea) reported its intention to do just that. At a May 2004 Asian Energy Security Workshop convened by the Nautilus Institute, the DPRK delegation’s paper on energy planning incorporated renewable energy sources.1 The paper described the DPRK government’s plan to promote the development and utilization of solar energy, the construction of passive and active solar buildings and a “test-solar building for fifty households in Pyongyang.”
N. Korea plans free trade zone on island
Toru Makinoda Yomiuri Shimbun Correspondent SHENYANG, China--North Korea plans to develop Wi Hwa Island in the Yalu River, which separates the country and China, into a free trade zone for which Chinese will not need visas, according to sources following China-North Korea relations. North Korea apparently wishes to bring food and other goods in short supply into the country from China by strengthening border trade with its neighbor. Pyongyang's move to beef up trade with China in this way can also be seen as an attempt to pressurize South Korean President Lee Myung Bak's administration, which is reviewing the country's conciliatory stance toward North Korea, the sources said. Wi Hwa Island, which is part of the North Korean city of Sinuiju, is about 15.5 square kilometers in size [SEZ]
S. Korea's Jeju Island to build 'black pig' farm in Pyongyang
SEOUL, Jan. 16 (Yonhap) -- South Korea's Jeju Island will send equipment to build a pig farm in Pyongyang on Friday to raise the island's local specialty, black pigs, officials said. The Jeju provincial government set up the "South-North Black Pig Breeding Cooperation Project" with North Korea when a group of Jeju citizens visited Pyongyang in late 2007. The project has finally kicked off after a year-long delay caused by frozen inter-Korean relations, the island officials said. Jeju will send farm equipment worth 220 million won (US$159,190), such as pens, feeders, heat lamps and ventilators, later on Friday aboard a ship also carrying tangerines and carrots as part of the island's annual aid to the North. [SK NK Aid]
DPRK bans South Korean, overseas goods from markets
Posted Date : 2009-01-20 (NK Brief No. 09-1-20-1) It was revealed by Open Radio for North Korea on January 19 that DPRK authorities had handed down a decree to begin enforcing a ban the sale of imported goods in markets across the country on January 20. On January 3, North Korean authorities announced a measure to the Sinuiju Citizen Association and in the Chaeha Market banning the sale of imported goods, telling traders in the market to get rid of imported goods they had with them. According to the report, the market management office in Sinuiju (operated under the control of the City People’s Committee) posted the decree at the entrance to the Chaeha Market, emphasizing that goods manufactured overseas were banned, while goods made domestically with imported materials were allowed to be sold. The report added that among goods banned from sale, those made in South Korea would be cracked down on especially hard.
DPRK Won exchange rate continues to climb
Posted Date : 2009-01-15 (NK Brief No. 09-1-15-1) The exchange rate for the North Korean won shot up approximately 13-15 percent at the end of last year, and has maintained this high rate into January, according to an article in the on-line newsletter, “Open News for North Korea,” on January 12. According to the inaugural edition of the newsletter, the exchange rate last year was around 3,200 won per USD, or 460 won per Yuan, with only slight fluctuations, but shot up to 3,630 won per USD and 530 won per Yuan in December. In the first weeks of the new year, it has fallen only slightly, to 3,540 won per USD, and 530 won per Yuan. According to traders who import and export between North Korea and China, “The sudden rise in the exchange rate appears to be related to trade regulations on goods imported from the North,” and they stressed, “After North Korea protested to China about inferior Chinese goods leading to accidents around the country, China decided to set an example, and unilaterally imposed [trade] restrictions.”
DPRK announces plan to solve clothing shortage
Posted Date : 2009-01-06 (NK Brief No. 09-1-6-1) Jo Jong-woong, assistant director of the North Korean Department of Light Industry, announced that this year, efforts would be concentrated on production of daily necessities, with a priority on resolving clothing issues. In an interview on January 4 with the Chosun Sinbo, mouthpiece for the General Association of [North] Korean Residents in Japan, Jo stated, “Currently, the most important sector is textiles,” and, “regarding the easing of the people’s problems, and regarding our production of necessities as well, we have decided to move forward with resolving issues related to clothing shortages first.” Jo emphasized that the government had been working since 2006 to revitalize the Pyongyang Weaving Factory, and since last year, with all equipment upgraded, quality and production capacity had been increased “several times over.” He also stated that as much as possible, domestic resources would be used for raw materials, with those unavailable or in short supply being imported in order to meet demands of the factories.
Kim Jong Il Visits Wonsan Youth Power Station
Pyongyang, January 6 (KCNA) -- General Secretary Kim Jong Il visited the newly-built Wonsan Youth Power Station and encouraged the workers all out in their new year's drive. He was greeted on the spot by Pak Jong Nam, secretary of the Kangwon Provincial Committee of the WPK, and Ro Kil Jong, vice-chairman of the Kangwon Provincial People's Committee, and other leading officials of the province and the power station. He went round power station Nos. 1 and 2 which started the production of electricity to learn about the construction, management and operation of the power station.
N.Korea Reshuffles Economic Posts
North Korea has reshuffled two cabinet ministers and appointed a new man to a key post in the Workers' Party. North Korean state media reported that Kim Tae-bong was appointed new metal industry minister and Hur Tack new power industry minister. They replace Kim Sung-hyun and Pak Nam-chil. Kim Kyong-ok as newly-named first deputy director of the ruling party's Organization Guidance Department that controls the party, Army and administration and is headed by leader Kim Jong-il.
Foreign Exchange Reserves Rise to $201.2 Billion
South Korea's foreign exchange reserves rose in December for the first time in nine months as a weaker U.S. dollar boosted the dollar value of assets in other currencies, the central bank said Monday. The nation's foreign reserves totaled $201.22 billion as of the end of December, up $720 million from a month earlier, Yonhap News reported quoting the Bank of Korea (BOK). Foreign reserves consist of securities and deposits denominated in overseas currencies along with International Monetary Fund reserve positions, special drawing rights and gold bullion. The country's foreign reserves had declined for the eighth straight month in November as the foreign exchange authorities tapped their dollar holdings to bolster the sliding local currency and ease a dollar crunch. "Despite a dollar liquidity supply by foreign exchange authorities to ease market jitters, the foreign reserves rose last month due to higher investment profits and a rise in the dollar conversion value of non-dollar assets, including the euro," Ha Keun-cheol, an official at the BOK, was quoted as saying. [Reserve]
Korea Posts Current Account Surplus but Exports Plunge
Korea posted a current account surplus for a second month in November, but with an export decrease in the double digits, the news is less than reassuring. The Bank of Korea on Tuesday said the current account surplus reached US$2.06 billion in November thanks to falling prices of oil imports and a travel account surplus for a second month caused by the weak won. Customs-cleared exports in November declined 19 percent year-on-year, halving the current account surplus from the previous month, when Korea recorded an all-time high $4.75 billion surplus. In the first 11 months of this year, the country posted a cumulative current account shortfall of $7.12 billion. Exports of major items including cars, household electronics, semiconductors, and petroleum-based products decreased to all countries except the Middle East. Exports to the European Union fell 20.5 percent, to Japan 16.4 percent, to the U.S. 14.1 percent and to China a massive 32.9 percent.
Joint New Year Editorial Issued
Pyongyang, January 1 (KCNA) -- Rodong Sinmun, Josoninmingun and Chongnyonjonwi Thursday issued a joint editorial titled "Glorify this year as a year of a new revolutionary upsurge sounding the general advance."
The following are excerpts from it:
Hope-filled New Year Juche 98 (2009) that will mark a turning point in the Korean revolution and the building of a great, prosperous and powerful nation has dawned. The DPRK that has emerged victorious under the banner of Songun has entered an era of a new leap. Last year Juche 97 (2008) was a year of historic turn which had written a chapter of brilliant victory in the proud 60-year annals of the DPRK. The Workers' Party of Korea put forward a far-reaching target to open the gate to a thriving nation in 2012 that marks the centenary of birth of President Kim Il Sung by representing the requirements of the developing revolution and the aspirations of the people and aroused the whole Party, the entire army and all the people to a new general offensive.
N. Korea Vows to Rebuild Economy in New Year Message
North Korea said Thursday that it will rebuild its ailing economy and aim for denuclearization in the New Year, in an apparent signal of its willingness to start afresh with the United States. In a joint newspaper editorial that summed up policy goals for 2009, Pyongyang continued criticism of Seoul but made no hostile mention of Washington, just three weeks before the inauguration of a new U.S. administration, according to Yonhap News. "The independent foreign policy of our Republic to denuclearize the Korean Peninsula and defend the peace and security of Northeast Asia and the rest of the world is demonstrating its validity more fully as the days go by," said the editorial jointly issued by the North's ruling party, army and youth military.

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