Economy, economic policy, trade, and business

2018
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Articles on current developments, compiled by Tim Beal.
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DECEMBER 2018

• VOA: All 121 N. Korean Vessels Fail Safety Tests This Year
  Write: 2018-12-29 14:09:13 / Update: 2018-12-29 14:30:14 Share Print VOA: All 121 N. Korean Vessels Fail Safety Tests This Year Photo : YONHAP News Voice of America reports that not one North Korean vessel has passed safety inspections this year. Based on data from the memorandum of understanding on port state control for the Asia-Pacific region, known as the Tokyo MOU, VOA said that a total of 121 North Korean vessels were inspected this year and all of them were found to have defects. North Korean cargo ship E. MORNING was found to have the most problems with 66 reported flaws. Only 35 of the 121 ships had fewer than five faulty areas. The report said that after 2015, when just one North Korean vessel was deemed safe in the inspections, all inspected ships from the North have been found to contain defects for three straight years. VOA said this is because North Korean vessels are very outdated. [Sanctions effect] [Media] [Agency]
• [Photo] KFTC to launch online database on chaebol
  Posted on : Dec.25,2018 14:51 KST Modified on : Dec.25,2018 14:51 KST The Korea Fair Trade Commission (KFTC) has launched a website that contains all the information it has collected on South Korea’s chaebol conglomerates and families. The site (www.egroup.go.kr) contains data gathered over the past 10 years and will be available to all South Korean citizens. The trial operation of the site began on Dec. 24 and is expected to officially launch on Feb. 1, 2019. The photo shows KFTC Chairman Kim Sang-jo. [Chaebol]
• Kim Jong-un Orders Halt to Border Casino Project
  By Cho Yi-jun, Kim Myong-song December 19, 2018 13:03 North Korean leader Kim Jong-un has ordered a halt to a casino project under construction in the North Korea-China border region, Radio Free Asia reported on Tuesday. Kim ordered officials to stop the entire "troublesome" casino project, according to a source in a Chinese border town who spoke to a North Korean trading company official who was there to lure investment. The regime also abruptly ordered a halt to the construction of a 30-story five-star hotel in Sinuiju last month because Beijing opposed a large casino near the Chinese border, RFA added. There is speculation that Kim, though eager to lure investment, backed down in the face of China's opposition. Instead, according to the Wall Street Journal on Monday, "North Korea has accelerated a little-known program to use its abundant coal supply to produce synthetic gas, helping the isolated nation reduce its dependence on foreign oil and withstand sanctions aimed at curbing its nuclear program." Coal gasification is the process of producing a synthetic gas similar to natural gas by making coal react with oxygen and hydrogen at a high temperature. Syngas can be used to generate power or manufacture industrial products. The North is using Chinese technology to install syngas production equipment at fertilizer, iron and steel, and cement plants, the daily quoted a diplomat as saying. [Coal gasification] [Casino] [China NK]
• The dangers of Ha-joon Chang’s “national state of emergency” statement
  Posted on : Dec.19,2018 16:27 KST Modified on : Dec.19,2018 16:27 KST Reverting to solutions of the past will not solve the current economic downfall Ha-joon Chang, professor at the University of Cambridge About 10 days had passed since the “national state of emergency” had been declared. Was my failure to spot any developments worthy of that sober language the result of faulty vision, or a mixture of numbness to safety concerns and imperviousness to crisis? After all, the person declaring the state of emergency had been Ha-joon Chang, globally renowned scholar and professor at the University of Cambridge. I should start by apologizing for my insensitivity to safety concerns and imperviousness to crisis. When an interview with such a scholar is published, the right thing to do is to pore over every word, underlining things and chewing the content over. Instead, I merely wrinkled my brow at the words “state of emergency” in the title, and nodded slightly at the part where he talked about the minimum wage. After the words “state of emergency” began showing up over and over in columns, editorials, and even podcasts, I made a belated show of penitence and went back to re-read it. In Jang’s estimation, the problems with the South Korean economy had been caused by a “collapse in mainstay industries due to inadequate investment over the past 20 years and a lack of new technology.” [Industrial policy] [Ha-joon Chang] [Investment]
• Nuclear Phase-out Could Mean More Power Imports from China, Russia
  By Ahn Joon-ho December 11, 2018 12:58 KEPOCO is seeking to import electricity from China and Russia to make up for lost power generation due to the government's nuclear phase-out plan, according to a report. At present, Korea generates 100 percent of its own electricity. KEPCO on Monday submitted the report to Liberty Korea Party lawmaker Jung You-sub, saying it wants to secure means to stabilize power supply as the government pursues a green energy policy. The Korean power monopoly wants to connect to power grids in Northeast Asia, importing electricity from China and Russia and exporting it to Japan. It would be part of a "Northeast Asia super grid" project proposed by Softbank CEO Masayoshi Son after the nuclear plant meltdown in Fukushima, Japan in 2011. But the project has been mired in differences between the various governments and due to the fact that it would have to involve North Korea. [Nuclear energy] [Imports] [China SK]
• Kim Jong-un inspects fishery stations, in first reported activity in 13 days
  Posted : 2018-12-01 12:18 Updated : 2018-12-01 16:04 This photo released by North Korea's state-run Korean Central News Agency, Saturday, shows North Korean leader Kim Jong-un visiting fishery processing plants in the country's eastern coastal region. Yonhap North Korean leader Kim Jong-un has inspected fishery plants in the country's eastern coastal region in his first reported public activity in 13 days, according to state media, Saturday. Kim visited three fishery processing factories run by the Korean People's Army (KPA) and carried out "field guidance," the Korean Central News Agency (KCNA) reported. The KCNA said Kim first visited the May 27 Fishery Station and was pleased that it had caught more than 60,000 tons of fish in a short period of time. [Fishery] [Kim Jong Un] [Inspection]

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NOVEMBER 2018

• Labor community in fierce opposition to expansion of unit periods in flexible working hour system
  Posted on : Nov.21,2018 16:48 KST Modified on : Nov.21,2018 16:48 KST Expansion of unit periods goes against Moon’s promise of reduced working hours Kim Myeong-hwan, head of the Korean Confederation of Trade Unions (KCTU), holds a press conference in front of the Blue House on Nov. 20, announcing its plan to hold a general strike on Nov. 21 in opposition to the expansion of unit periods in the flexible working hour system. (Kim Jung-hyo, staff photographer) “I will create 500,000 new jobs by reducing working hours.” This was the declaration in January 2017 from Moon Jae-in, considered at the time to be the Democratic Party’s leading contender for the presidency. Pledging to become the “jobs president,” Moon stressed, “If we abide by the legal limit of 52 working hours per week, we can create 204,000 jobs – even including ones in exceptional business categories – and we can create another 300,000 jobs simply if workers use all of their vacation time.” In addition to improving quality of life and allowing job-sharing through reduced working hours, his vision also included “changing quality of life that ranks in the lowest tier” and “allowing whole families to eat dinner and spend holidays together.” Have Moon’s rosy campaign pledges actually blossomed now that he has become president? Meeting with the leaders of the five main political parties on Nov. 5 in a “permanent governance consultation group,” Moon agreed to an expansion in unit periods under the flexible working hour system, which currently has a maximum period of three months. The move drew an outcry from the labor community – as an expansion in flexible working hour system unit times means the opposite of reducing working hours. The result has been a deepening divide of conflict between the administration and ruling party on one side and the labor community and civil society on the other. The “flexible working hour system” is actually one of several systems for flexible working hours, along with the elective, judged, and discretional working hour systems. As a system, it involves adjusting average working hours within the legal limits to increase times during specific periods of increased business and reduce them when less work is available. The business world has been calling for the unit period to be increased to over six months from its current three-month maximum to increase the scope of the system’s application. [Labour] [Moon Jae-in] [Renege]
• N.Korea Halts Work on 30-Story Hotel Near Chinese Border
  By Lee Kil-seong November 21, 2018 11:31 Construction of a 30-story hotel on the North Korean border with China has been abruptly halted, allegedly because Beijing took issue with Pyongyang's plans to build a casino there, Radio Free Asia reported Monday. One source in Dandong, China told RFA that construction was halted "suddenly" after more than 20 floors had been built, adding there are rumors that Chinese authorities belatedly found out about the casino plan. The Chinese government is struggling to rein in rampant overseas gambling by its citizens and may not want a casino so close to its border. But it is equally possible that something went wrong with the financing. Another source in Dandong reported rumors that the man behind the hotel, Dutch-Chinese billionaire Yang Bin, was trying to attract foreign capital to finance the construction. Yang, once considered one of the richest men in China, was appointed to run a special economic zone in Sinuiju in the North in 2002 but was later arrested by Chinese authorities on charges of tax evasion. A source said North Korea already operates a casino in the Rajin-Sonbong special economic zone near the Chinese border. "From North Korea's standpoint, it doesn't make sense to build a casino in Sinuiju, which is difficult to control access to, whereas in the Rajin-Sonbong special economic zone access is strictly limited to foreigners only. Besides, it seems unlikely that China would object to the construction of a casino on the North Korean territory." [China NK] [Gambling] [Yang Bin]
• Chaebol families increase control through holding company system
  Posted on : Nov.15,2018 10:24 KST Modified on : Nov.15,2018 10:24 KST Family ownership of HHIC Holdings nearly triples since 2007 How HHIC utilizes treasury stock, spinoffs and investment in kind in holding company transition When Hanjin Heavy Industries and Construction (HHIC) adopted a holding company system in 2007, the ruling family’s ownership of HHIC Holdings nearly tripled from 16.9% from 50.1%. This “magic trick” with the sharp rise in the family’s share was made possible through the use of three methods: acquisition of treasury stock (19.6%) just before the transition, the family’s simultaneous ownership of shares of both HHIC Holdings and the newly formed HHIC (operating company) established with the spinoff, and the investment in kind to replace the family’s HHIC shares with new HHIC Holdings shares. [Chaebol]
• Overseas Korean Businesspeople Visit N.Korea
  By Yoon Hyung-jun November 15, 2018 11:30 Some 80 overseas Korean businesspeople and about a dozen of their staff visit Pyongyang for four days starting Thursday to discuss investment opportunities. The Unification Ministry approved their visit, a spokesman said on Wednesday. They are members of the World Federation of Korean Association of Commerce, a group of overseas Korean businesspeople. They are expected to seek investment opportunities there in preparation for the easing of international sanctions against the North, while touring various agencies and facilities until Sunday. Founded in 1993, the federation consists of 246 business organizations in 68 countries. [Diaspora] [Business] [Sanctions] [US dominance]
• Workers Die in Factory Kim Jong-un Wanted Refitted
  By Kim Myong-song November 14, 2018 12:18 Four North Koreans workers died while trying to patch up a decrepit factory North Korean leader Kim Jong-un singled out for being "shabby" during a recent site visit. The Daily NK online newspaper on Tuesday quoted sources in North Hamgyong Province as saying the accident occurred at a bag factory in Chongjin in mid-September when the ceiling collapsed during construction. The daily said four workers died and dozens were hurt, 10 of them seriously. Kim had paid a visit to the factory in July and told workers, "Looking at the shabby condition, there are clearly problems in the way the regional party committee is doing things." He ordered a thorough review of the factory's operations and said officials responsible for the condition of the facility must be identified. The workers were apparently in a rush to refurbish the factory when the accident happened. [Canard]
• NK delegates to visit Pangyo Techno Valley
  Posted : 2018-11-14 17:00 Updated : 2018-11-14 20:25 By Kim Yoo-chul A group of senior North Korean officials will visit Pangyo Techno Valley, Thursday, a Seongnam City spokesman said Wednesday. Pangyo Techno Valley is a complex of technology firms in Seongnam, Gyeonggi Province. It focuses on information technology, biotechnology and fusion technology. "North Korean officials will visit the complex on Nov. 15. The visit was requested by North Korea. Specific details of their trip have yet to be fixed," the city spokesman said without elaborating further. [Detente] [S&T]
• Two Koreas to hold meeting to discuss aviation cooperation
  Posted : 2018-11-14 13:24 Updated : 2018-11-14 13:24 The two Koreas will hold a meeting later this week to discuss cooperation in the aviation sector, the unification ministry said Wednesday. The meeting will be held on Friday at the joint liaison office in the North's border town of Kaesong, according to the ministry. Son Myung-soo, a senior official of the transport ministry, will lead a South Korean delegation. His North Korean counterpart is Ri Yong-son, deputy director-general of the General Administration of Civil Aviation. The ministry said that the two Koreas will discuss "issues of mutual concern" related to inter-Korean aviation cooperation but did not provide further details.[Aviation] [Detente]
• Tideland Reclamation Progresses Apace in DPRK
  Date: 10/11/2018 | Source: KCNA.kp (En) | Read original version at source Share Button Tweet Pyongyang, November 10 (KCNA) -- In the DPRK big efforts have been paid to the reclamation of Honggondo, Ryongmaedo and Ansok tidelands. The project for reclaiming Honggondo Tideland is progressing apace to obtain thousands of hectares of new land by linking islands in the waters off Sonchon. The North Phyongan Provincial Tideland Reclamation Enterprise carried out the first dam construction in the first district of the second-phase project at over 90 percent. For the reclamation of Ryongmaedo Tideland, the South Hwanghae Provincial Tideland Reclamation Enterprise has sped up the construction of 5 000 meter-long main dyke after smoothly ensuring the blasting for blowing up 30 000 and 50 000 cubic meters of earth. The South Phyongan Provincial Tideland Reclamation Enterprise in charge of the project for reclaiming Ansok Tideland built 3 000 meter-long tide embankment by removing more than 200 000 cubic meters of earth and paving with stones 30 000 square meters of embankment in over 30 days [Infrastructure]
• Goldman Sachs economist to lead northern economic policy body
  Posted : 2018-11-08 17:09 Updated : 2018-11-08 17:23 Kwon Goo-hoon, new head of the Presidential Committee on Northern Economic Cooperation, gives an acceptance speech at Cheong Wa Dae, Wednesday. Yonhap By Park Ji-won Senior Goldman Sachs economist Kwon Goo-hoon officially began his duties as head of the Presidential Committee on Northern Economic Cooperation (PCNEC), one of the key policymaking bodies for the President Moon Jae-in government. President Moon Jae-in gave Kwon an appointment letter Wednesday. In the appointment speech, Kwon said, "I think it is the time to go into the stage of crystalizing (the policy) to make detailed and practical results through utilization of accumulated policies on northern countries and international cooperation networks." Moon Jae-in administration has been focusing on boosting ties with neighboring countries aiming at shifting away from U.S.-dependent diplomacy under the New Southern Policy and New Northern Policy. The New Northern Policy focuses on enhancing ties with Russia and Central Asia, while the New Southern Policy eyes ASEAN member states and India. [Diversification] [Goldman Sachs] [SK Russia]
• Defectors Blame Kim Jong-un for N.Korea's Economic Failure
  By Kim Myong-song November 05, 2018 12:56 The living conditions of North Koreans have deteriorated since the isolated state allocated huge sums of money to developing nuclear weapons and testing long-range missiles, prompting unprecedented U.S. sanctions. The conclusion comes from interviews the Institute for Peace and Unification Studies at Seoul National University conducted with 87 defectors who fled the North last year and this year. Only about one-third said they had enough to eat, and many said they went hungry "once in a while" or "often." Not many earned more than W100,000 in South Korean money a month. Asked what they felt was the biggest stumbling block to North Korea's economic development, about half blamed Kim Jong-un, and many cited the bureaucracy. About half said Kim is doing a poor job, though the rest still feel he is doing well even though they have fled the country. Asked why they defected, about half cited dissatisfaction with the regime or other political reasons, but a quarter gave economic reasons. [Defectors] [Sanctions] [Media]
• Inter-Korean military information exchanges resume on illegal Chinese fishing boats near NLL
  Posted on : Nov.3,2018 15:21 KST Modified on : Nov.3,2018 15:21 KST Additional step toward preventing unintended clashes and establishing maritime peace zone The South Korean Coast Guard patrols an illegal Chinese fishing boats near the Northern Limit Line (NLL) in the West Sea. (by Kim Bong-gyu, staff photographer) South and North Korean military authorities resumed information exchanges on Nov. 2 on third-party vessels illegally fishing in near the Northern Limit Line (NLL) area in the West (Yellow) Sea. The resumption comes a decade after information exchanges based on inter-Korean general-level military talks in June 2004 were suspended in May 2008. The measure is another step toward preventing unintended armed clashes and establishing maritime peace and joint fishing zones in the West Sea NLL area as specified in the two sides’ Sept. 19 military agreement. According to the South Korean Ministry of National Defense, South and North Korean military authorities exchanged information via their West Sea military communication line at 9 am that day on the current status of “illegally fishing third-country vessels” in the NLL area. The ministry explained that the measure would be “meaningful in terms of the suspension of land-, sea-, and air-based hostile activities and demilitarization of the Panmunjom Joint Security Area recently pursued by South and North Korean military authorities, as well as the establishment of peace on the Korean Peninsula.” At general-level talks in June 2004, the two sides agreed to use the West Sea military communication line to exchange information on third-party boats illegally fishing around the NLL – the “third party” here essentially referring to China. Notifications regarding the number, position (latitude and longitude), and fishing times of Chinese boats were exchanged between the Navy’s 2nd Fleet Command at Pyeongtaek and North Korea’s West Sea Fleet Command at Nampo before the exchanges were suspended in May 2008. [West Sea] [NLL] [Fishery] [Joint Korean]
• Kim Jong-un promotes Samjiyon as hub for potato production
  Posted : 2018-10-31 14:51 Updated : 2018-10-31 23:10 North Korea's leader Kim Jong-un inspected the Samjiyon Potato Farina Production Factory in Samjiyon County, Ryanggang Province, the state-run Korean Central News Agency (KCNA) reported Tuesday. KCNA-Yonhap By Jung Da-min North Korea's leader Kim Jong-un has visited the Samjiyon Potato Farina Production Factory for the second time this year, after a visit in July, the state-run Korean Central News Agency (KCNA) reported Tuesday. During his inspection of the factory, in Samjiyon County, Ryanggang Province, bordering China, Kim praised the county for "reaping a high yield in potato farming despite unusually unfavorable climatic conditions this year," KCNA reported. North Korea has been promoting the policy of "bringing about a revolution in potato farming" set by former leader Kim Jong-il in 1998. Commemorating the 20th anniversary of the policy, North Korea's party mouthpiece Rodong Sinmun on Oct. 1 highlighted Kim Jong-il and Kim Jong-un's focus on the drive "to settle the food issue of the people." Meanwhile, Kim also inspected a construction site in Samjiyon County, calling for early completion of the work by Oct. 2020, which marks the 75th anniversary of the Workers' Party of Korea. It was Kim's third inspection this year, following visits in July and August. [Potatoes]

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OCTOBER 2018

• South Korean stock market sees biggest plunge since 2008 crisis amid US-China trade war
  Posted on : Oct.29,2018 17:46 KST Modified on : Oct.29,2018 17:46 KST Additional risk factors include stagnant domestic economy and investor flight Fluctuations in major global stock indexes The South Korean stock market is reeling from the shock waves of its “black October.” As if recreating the plunge in stock values that happened with the global financial crisis’s arrival in Oct. 2008, KOSPI experienced its biggest monthly drop in ten years. Future prospects also appear bleak: in addition to external risk factors like the US-China trade war and US interest hikes, the numerous potential drags of stock prices include a stagnant domestic economy, investor flight, and escalating panic. Many in the securities world see a drop below the 2000 line – widely viewed as a psychological “safety net” – as not too far away.
• Moon faces growing criticism over economy
  Posted : 2018-10-29 15:59 Updated : 2018-10-29 19:36 President Moon Jae-in holds a Cabinet meeting, Oct. 23. The President is coming under criticism for his lack of interest in the economy. Yonhap Kim, Jang's fates hang in balance amid signs of crisis By Park Hyong-ki President Moon Jae-in and his economic team are increasingly coming under criticism for his alleged lack of interest in saving the economy while being fixated on reconciling with North Korea. His nonchalance is making room for more rumors and demands that Finance Minister Kim Dong-yeon and presidential chief policy adviser Jang Ha-sung can't work together. To this end, they are likely to be replaced at the end of 2018, something Cheong Wa Dae denied. Or else, analysts say the economy will become worse in 2019 as a crisis is brewing amid the onslaught of weak data, including the composite leading indicator (CLI). The CLI, which measures the future of an economic cycle over the next six to nine months, has declined for 17 consecutive months. [Moon Jae-in] [Economy]
• North Korean economist calls for expanding autonomy of enterprises
  Posted : 2018-10-29 17:15 Updated : 2018-10-29 18:50 Workers, technicians and officials celebrate the completion of a construction project at the Hwanghae Iron and Steel Complex on Sept. 30. KCNA-Yonhap By Jung Da-min Ri Ki-song in Pyongyang. AP A Pyongyang economist on Monday called for changes in the regime's economic policies to expand the autonomy of enterprises and ensure the responsibility of workers. North Korea's party mouthpiece Rodong Sinmun published the call in a column titled "An important demand to carry on the new strategic route of the party" by Ri Ki-song, a professor at North Korea's Academy of Social Sciences' Institute of Economy, who has promoted the North Korean economy in interviews with foreign media. Ri emphasized the importance of the "socialist system of responsibility management of enterprises," saying that national economic policies should focus more on improving the achievements of enterprises and workers by giving them more autonomy and responsibility. "It is important to take strong and practical measures so that the socialist enterprises, the basic units of production and management, can demonstrate their responsibility, initiative and creativity, with the socialist system of responsibility management of enterprises having effects," Ri wrote. [Economic reform] [Enterprise autonomy
• 100 Tons of Banned Goods Exported to N.Korea
  By Kim Myong-song October 26, 2018 10:32 South Korea sent some 100 tons of goods to North Korea this year that are prohibited under UN Security Council sanctions, including machinery, iron and steel products, electrical materials, and oil products. U.S. website NK News on Wednesday quoted customs data as showing that South Korea exported US$17 million of goods to North Korea and North Korea nearly $10 million worth of products to South Korea over the first nine months this year. Customs data also show that the Unification Ministry sent about 100 tons of banned goods worth W1 billion to North Korea (US$1=W1,138). They include iron and steel products, machinery including a reactor and boilers, copper, nickel, aluminum, and rolling stocks and their parts. It sent 82,918 kg of oil and diesel worth W103 million and generators worth W553 million in June and July. A ministry official said the goods were mainly shipped to North Korea to set up a cross-border liaison office in the North Korean border town of Kaesong and remodel or repair a meeting place for families separated by the Korean War. Inter-Korean trade volume sharply dropped from $1.2 billion in 2015 to $147 million in 2016 and less than $1 million in 2017. But at least on paper it increased to $27 million as of September this year. [Inter Korean trade] [Sanctions] [Detente] [US dominance]
• Korean Economy Faces Long Doldrums
  By Bang Hyeon-cheol October 26, 2018 12:15 Chronically low growth, an exodus of foreign stock investors and signs of slowing exports are casting dark clouds over the Korean economy. The Bank of Korea on Thursday said the economy grew just 0.6 percent in the third quarter, the lowest in nine years. Compared to same period of 2017, the economy grew two percent. Weak investments were mainly to blame. Construction investment plunged 6.4 percent, the biggest decline since the Asian financial crisis in 1998. Facilities investment also dropped 4.7 percent. Exports grew 3.9 percent, but that was only thanks to strong demand for semiconductors, while overall export growth was drastically lower than the 5.6-percent increase in the third quarter of last year.
  The intensifying trade war between the U.S. and China could have a huge impact on the Korean economy, which is heavily dependent on both countries for exports. [Economic growth] [Trade war] [Collateral damage]
• Seoul to open bank branches in North Korea only after sanctions are lifted
  Posted : 2018-10-26 17:26 Updated : 2018-10-26 17:26 South Korea will open bank branches in North Korea only after international sanctions are lifted in return for irreversible steps by the North to dismantle its nuclear weapons program, the top financial regulator here said Friday. Choi Jong-ku, chairman of the Financial Services Commission (FSC), told a parliamentary audit meeting that Seoul has not discussed cooperation with North Korea in the financial sector. "Opening bank branches in North Korea will be possible only after conditions are met," Choi said. North Korean leader Kim Jong-un and U.S. President Donald Trump pledged to work to end the North's nuclear weapons program at a landmark summit in June, but there has been little progress on the details of how to meet that goal. The U.S. has called on its allies to maintain sanctions on North Korea until the North takes concrete and irreversible steps towards denuclearization. Financial sources have said the U.S. Treasury Department called on South Korean banks to comply with sanctions on North Korea, in a thinly veiled warning against doing business with Pyongyang before it takes irreversible steps toward denuclearization. The Treasury Department emailed several commercial and policy banks and conducted conference calls on Sept. 20 and 21, according to the sources. The state-run Korea Development Bank and the Industrial Bank of Korea received calls from the Treasury Department, along with Kookmin Bank, Shinhan Bank and Nonghyup Bank. (Yonhap) [Inter Korean business] [US dominance] [Sanctions]
• Factory Owners to Visit Kaesong Industrial Park Next Week
  By Lee Yong-soo October 25, 2018 09:40 Plans are underway for South Korean business owners to visit the North Korean border town of Kaesong next week to inspect their factories in the shuttered industrial park there. Seoul is talking with Pyongyang to allow businesspeople who have invested in the Kaesong Industrial Complex to inspect their assets there, Unification Ministry spokesman Baek Tae-hyun told reporters Wednesday. They will go in several groups for a day each from Oct. 31. The move is widely viewed as a precursor to reopening the industrial park, which was closed in February 2016 after a North Korean nuclear test. Seoul already resumed power and water supplies there when it opened a cross-border liaison office last month. But Baek denied that the reopening is imminent and insisted the visit "has nothing to do with the reopening of the industrial park." Cheong Wa Dae spokesman Kim Eui-kyeom also said it will be impossible to reopen the complex until international sanctions are eased. Unification Minister Cho Myoung-gyon told lawmakers in a parliamentary audit on Oct. 11 that Seoul was discussing the visit but has no immediate plans to reopen the complex. Besides 123 mostly light-industry companies that had production facilities in the industrial park, 30 service businesses like convenience stores and restaurants have also applied to the ministry to come along. [Kaesong] [Inter Korean business] [Detente]
• [Photo] S. Korea negotiating for Kaesong complex business owners to visit North Korea
  Posted on : Oct.24,2018 16:27 KST Modified on : Oct.24,2018 16:27 KST The South Korean Ministry of Unification announced on Oct. 24 that its currently negotiating a visit to North Korea by business owners with investments in the Kaesong Industrial Complex. During a press briefing in Seoul, Unification Minister Spokesperson Baek Tae-hyun said the government is negotiating with North Korean authorities to allow entrepreneurs with investments in the Kaesong Industrial Complex to inspects their assets in North Korea. Although negotiations are still underway, it is expected that the visit will occur sometime next week. The business owners have been isolated from their assets since the Park Geun-hye administration shut down the complex in February 2016. They filed six requests to the Ministry of Unification to visit their facilities, but all of them were denied. (Hankyoreh archives) [Kaesong] [Inter-Korean Business]
• Chinese Travel Agency Woos Investment in N.Korea
  By Cho Yi-jun October 18, 2018 13:07 Chinese travel agency Young Pioneer Tours has established a company to invest in North Korea in the apparent hope that international sanctions against the isolated country will be lifted soon. Radio Free Asia on Tuesday said it was YPT that arranged the fateful trip to the North of U.S. student Otto Warmbier, who was arrested in Pyongyang for trying to steal a propaganda poster and died on return to the U.S. after a year and seven months in jail. The subsidiary has set up a website to recruit potential investors to do business in the North. The firm describes itself as providing customers with business information collected in the North as well as legal services related to doing business in North Korea and international sanctions. It also offers tailor-made analysis for customers and arrangements for news coverage or film shoots there. It says the firm is based in China and has several years of business experience in North Korea. [FDI] [China NK]

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SEPTEMBER 2018

• Top Business Leaders Accompany Moon to N.Korea
  By Lee Min-seok September 17, 2018 09:55 President Moon Jae-in is taking a 17-member business entourage with him to North Korea on Tuesday that includes heads of all South Korea's top conglomerates. On the list announced by Cheong Wa Dae on Sunday are Samsung chief Lee Jae-yong, SK chairman Chey Tae-won, LG chairman Koo Kwang-mo and Hyundai Motor vice chairman Kim Yong-hwan. Hyun Jeong-eun, the chairwoman of the smaller Hyundai Group which pioneered business with North Korea, will also come along. North Korea apparently asked for them to come along even though international sanctions make any concrete business deals a distant prospect. The business community here are grumbling that they are being forced to trudge along though palpable results are improbable and serve mainly as cheerleaders for Cheong Wa Dae's hopes for the future. [Kim_Moon1809] [Inter-Korean business]
• North Korea takes strong turn for market economy under Kim
  Posted : 2018-09-10 09:40 Updated : 2018-09-10 14:17 The Korea Institute for National Unification hosted a press conference titled "Eight major changes in North Korea's economic society in the days of Kim Jong-un" at the Press Center in Seoul on Thursday Korea Times photo by Jung Da-min By Jung Da-min Despite North Korean leader Kim Jong-un's much-publicized on-site inspections of a Pyongyang bag factory or a Sinuiju cosmetics factory and other manufacturing facilities, service industries such as trade, retail and lodging are the main forces behind its economy, experts say. "The economic development of North Korea has been faster than before with an accelerated market economy since Kim Jong-un took power, at least before the onslaught of international sanctions," Lee Seog-ki, senior research fellow at the Center for Global Industry and Trade told a Korea Institute for National Unification (KINU) forum in Seoul on Thursday. [Marketisation]
• North Korean newspaper emphasizes “self-sufficient economy” ahead of North’s foundation day
  Posted on : Sep.3,2018 17:02 KST Modified on : Sep.3,2018 17:02 KST Rodong Sinmun expresses North’s commitment to economic progress amid US sanctions North Koreans at a photo exhibition of Chinese architecture in Pyongyang on Aug. 28. (Yonhap News) Leading up to the 70th anniversary of the establishment of the North Korean government on Sept. 9, the Rodong Sinmun, the official newspaper of the Workers' Party of Korea (WPK), has been emphasizing a “self-sufficient economy.” Since there has been no relief from sanctions on North Korea since the North Korea-US summit in June, this appears to be aimed at underscoring the North’s commitment to an economic-focused policy line and encourage the activity of its “economic units.” “Production centers grounded in North Korean strength, technology and resources are being built all over the country, and an energetic movement is sweeping this land to perfect a self-sufficient economic structure and to establish the subjective production process,” said an editorial titled “Our Great Leader Is Revered by Our Powerful People’s Government” that ran on page two of the Sept. 2 edition of the Rodong Sinmun. [self-sufficient economy] [Juche]
• Financial firms 'studying' to cash in on North Korea
  Posted : 2018-09-03 15:01 Updated : 2018-09-03 17:45 By Park Hyong-ki Local financial groups are mobilizing their employees and executives to form internal preparedness teams focusing on studying North Korea to find potential business opportunities in the future. KB Financial, Shinhan Financial, Hana Financial and Woori Bank groups have either set up internal taskforces or had their subsidiaries establish them. They have been formed mostly to "research" North Korea and its economy, and draw up potential road maps for their market entry into the North under the scenario that U.N. sanctions get lifted and the two Koreas' relations develop amicably. [Banking] [Inter-Korean business]
• Korea Business News September 2018
  Op-Ed Roger Barrett - Korea Business Group CEO The likely State Visit of President Xi to the DPRK this coming September is the positive ‘icing on the cake’ of diplomatic relations in this extraordinary year of progress. The leaders of north and south have met twice this year already, soon to be three times, as indeed have President Xi and Kim Jong Un. The potential of the north and the southern parts of Korea is something that now both sides are taking very seriously, and indeed feature positively in many books written by Kim Il Sung, the founding father of the DPRK. The next round of talks will include the ‘Inter-Korean Railway (IKR)’ on the agenda. The 12th June Summit in Singapore went well - and full credit to Kim Jong Un for his 1st January speech which was further covered by the Nation’s Joint Editorial, which opened the door for the succession of top-level meetings. Credit too to President Trump for his wholehearted acceptance of the invitation to meet, packaged and delivered so specially and with perfect timing, and opening the door for the world to see.

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AUGUST 2018

• Income Disparity at All Time High
  By Lee Ki-hun August 16, 2018 11:14 Income disparity is at a record high, partly as an unintended consequence of the minimum-wage hike, which has forced some small employers to lay people off. According to a report by Kang Shin-wook at the Korea Institute for Health and Social Affairs, the Gini coefficient, a measure of wealth distribution, rose to 0.401 in the first quarter of this year, compared to 0.375 a year ago. [Inequality]
• S.Korea Plans to Start Railway Project with North This Year
  VOA News August 16, 2018 08:17 South Korea President Moon Jae-in says his government plans to begin a joint railway project with North Korea this year, while also linking "full-scale" inter-Korean economic cooperation with denuclearization progress in the North. During a speech on Wednesday commemorating the liberation of Korea at the end of World War II, Moon said, "It is the goal to hold groundbreaking ceremonies within this year for the reconnection of railroads and roads as agreed to in the Panmunjom Declaration. The reconnection of railroads and roads is the beginning of mutual prosperity on the Korean Peninsula." Moon and North Korean leader Kim Jong-un agreed to pursue increased economic cooperation when they met in April in the Panmunjom village located in demilitarized zone of the inter-Korean border area. At the Panmunjom summit, Kim also agreed to work toward the denuclearization of the Korean Peninsula. [Joint Korea] [Railways]
• Hana fixes eyes on North Korea
  Posted : 2018-08-15 14:53 Updated : 2018-08-15 17:59 Tweet Follow @koreatimescokr Hana Financial Chairman Kim Jung-tai, second from left, poses with athletes and coaching staff of the national luge team at a stadium in PyeongChang last Oct. 18, after delivering its sponsorship funds. Courtesy of Hana Financial By Park Hyong-ki Kim Jung-tai, chairman and chief executive of Hana Financial Group, will be heading for North Korea to watch a youth football match for the 4th Ari Sports Cup held in Pyongyang from Aug. 13 to 18, according to the Ministry of Unification and the South and North Korean Sports Exchange Association. [Banking] [Inter Korean business]
• How South Korea’s ‘New Economic Map’ Could Shift Northeast Asia’s Balance of Power
  The idea is simple, yet potentially transformative: connect South and North Korea to Russia, China, and Europe. By Patrick M. Cronin and Kristine Lee August 10, 2018 Since assuming office in May 2017, South Korean President Moon Jae-in is proving to be nothing short of a visionary. But the flurry of summitry surrounding North Korea’s nuclear program since the 2018 Winter Olympics in PyeongChang has overshadowed an equally ambitious plan that has been brewing in the Blue House for building toward peaceful reunification of the two Koreas. Moon’s proposition is a simple, yet potentially transformative one: create a railway system that connects South Korea and North Korea to Russia, China, and Europe. The goal is not simply to alter Pyongyang’s strategic calculations with regard to its still-active nuclear and related weapons programs but to turn the Korean Peninsula into a new growth engine for Northeast Asia. This could fundamentally alter the Northeast Asian regional balance of power, positioning North Korea as a critical node that connects East Asia to Eastern and Central Europe. [Eurasian landbridge] [Railways] [Wishful thinking]
• N.Korea Pushes South on Cross-Border Business Projects
  By Kim Myong-song August 01, 2018 11:50 North Korea on Tuesday accused South Korea of failing to live up to its end of an agreement signed by their leaders at their summit in April. The official Rodong Sinmun in an editorial complained that inter-Korean business projects "appear nice only on the surface, while no concrete progress has been made." "The owner of Cheong Wa Dae has changed, but [South Korea] does not dare mention the need to deal with the closures of the Kaesong Industrial Complex or Mt. Kumgang resort tours, for which the previous conservative administration is responsible, but is rather siding with foreign influences by placing new obstacles on top of the existing sanctions," the daily grumbled. It mentioned recent cross-border basketball games and talks to discuss sports, railway and highway projects and said they "merely end in creating an amicable atmosphere." It accused the South of "causing a huge fuss" by seeking U.S. approval "for a problem as small as connecting a military communication line in a tiny area along the West Sea." Officials from the two Koreas talk in the truce village of Panmunjom in Paju, Gyeonggi Province on Tuesday. /Newsis The complaint comes just after a U.S. State Department official warned South Korean businesses to abide by sanctions against the North. U.S. Secretary of State Mike Pompeo in a rare move last week called Unification Minister Cho Myoung-Gyon and urged Seoul to abide by the sanctions. Meanwhile, Vice Unification Minister of Chun hae-sung heads to Mt. Kumgang on Wednesday, presumably to prepare for reunions of families separated by the Korean War. The government said his visit has nothing to do with prospects of resuming package tours to the scenic resort. [Panmunjom Declaration] [US dominance]

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JULY 2018

• Firms under probe on illegal trade of N. Korean coal
  Posted : 2018-07-30 17:16 Updated : 2018-07-30 19:03 By Park Ji-won The nation's tax authorities are investigating four South Korean firms allegedly involved in the illegal trade of North Korean coal last year in violation of the U.N. Security Council (UNSC) sanctions against the North. An official of the Korea Customs Service said, "We are conducting an investigation and will decide whether to refer this case to the prosecution." The official said two shipping firms and two financial firms are being investigated, without revealing their names. If the allegations are true, they would be a violation of UNSC sanctions that ban North Korea from exporting coal and firms involved in the case will be placed on a sanctions list. "We cannot provide further details about the matter as there is an ongoing investigation," the official added. Panama and a Sierra Leone flagged vessels brought 9,000 tons of coal to the South Korean ports of Incheon and Pohang in October last year, the unification ministry said. Under U.N. Resolution 2371 adopted by the Security Council in August last year, transfer of North Korean minerals, such as coal, are prohibited. Regarding the media reports that there were four South Korean firms involved in the issue, the foreign ministry released a statement that government officials are conducting an investigation on the North Korean coal issue and will take all necessary measures. It said that "(an) import company is suspected of importing North Korean coal. The U.S. government didn't express concern about the issue and we are in close cooperation with the U.S. to faithfully implement the UNSC resolutions." Recently, the VOA reported North Korea's coal transferred to the Russian port of Kholmsk was reloaded and sent to Incheon and Pohang on Oct. 2 and Oct. 11, 2017, respectively. [Coal] [Sanctions] [US dominance]
• Gov't signals 'friendlier' chaebol policy
  Posted : 2018-07-27 15:15 Updated : 2018-07-27 18:06 By Park Hyong-ki The government has signaled that it is shifting its policy toward more friendly with conglomerates in a bid to inject new vigor into the slowing economy. Stepping back from an earlier anti-chaebol policy, President Moon Jae-in and top economic policymakers are seeking to meet business leaders and calling for expanding investment. The move comes as President Moon Jae-in's income-led growth has failed to achieve the intended outcome of creating more jobs, as his policies discouraged large enterprises from making new investments. [Chaebol]
• Kim Jong-un Still Touring Investment Zones
  By Kim Myong-song July 27, 2018 10:27 North Korean leader Kim Jong-un is still touring the country in an epic campaign to ready it for possible international investment, especially from China. Recently Kim inspected a food factory and a bag factory in Wonsan, Kangwon Province after his tour of some 20 facilities in the border provinces with China, the North's official Korean Central News Agency reported Thursday. Kim spend almost a month in the Chinese border region immediately after his third visit to China in June, and now he is visiting Wonsan, which is being developed as an international tourist destination including the Masikryong Ski Resort. He has focused chiefly on economic development zones and areas being developed for tourism where he hopes to draw Chinese investment. North Korean leader Kim Jong-un inspects a bag factory in Wonsan, Kangwon Province in this video grab from [North] Korean Central TV on Thursday. They include the Hwanggumpyong special economic zone and Apnok River economic development zone in North Pyongan Province. Samjiyon in Ryanggang Province is to become an ecotourism destination. In North Hamgyong Province, Kim also visited the Chongjin economic development zone, Orang agricultural development zone, and Onsong Island tourist development zone. Kim is clearly frustrated with the slow pace of economic development, launching several well-reported outbursts against incompetent management and "lazy" workers. "He's been on a tour of provincial regions because U.S. sanctions are weighing down on the regime and it's in a hurry to show tangible economic achievements ahead of the 70th founding anniversary on Sept. 9," a researcher with a state-run think tank here said. Kim was accompanied by his wife Ri Sol-ju on his visit to Kangwon Province, which suggests that his family are spending their summer vacation in a villa in Wonsan. [Kim Jong un] [Inspection; [SEZ] [FDI]
• More Ships Brought N.Korean Coal to S.Korea
  By Kim Myong-song July 26, 2018 09:39 Several more ships are suspected of bringing banned North Korean coal to South Korea, the Korea Customs Service has admitted. The government is already under fire for doing nothing about two ships that unloaded North Korean coal disguised as Russian product in South Korean ports. In a press release on Wednesday, Liberty Korea Party lawmaker Shim Jae-cheol said, "The Korea Customs Service has told my office that the Foreign Ministry notified the KCS of a list of several other ships, in addition to the Rich Glory and the Sky Angel, that are also suspected of shipping North Korean coal into South Korea" since the UN Security Council banned the trade last August. Coal is loaded on a barge at Nampo port in North Korea, in this satellite image taken on March 14. /VOA But the KCS did not submit detailed data to Shim saying "delicate foreign affairs and security issues" were involved. It also declined to submit its findings in a probe on the Rich Glory and the Sky Angel, saying the matter is still under investigation, Shim added. Meanwhile, North Korea has apparently resumed banned exports of iron ore to China. "Six to 10 truckloads of North Korean iron ore have been transported into China over the border bridge between Dandong and Sinuiju in July," a source in Dandong said. "Chinese customs officials have relaxed their checks." Under the UNSC resolution from last August, all North Korean mineral exports are banned. [Sanctions] [Coal] [US dominance]
• Study tour to North Korea 16 – 25 September 2018
  Rotterdam, 24 July 2018 How do the North Koreans view the international situation and the recent developments? What are business opportunities at the moment? What is the impact of the UN Security Council sanctions on North Korea’s economy? What changes will become visible to the visitor to Pyongyang? In this critical period, we organize a unique study tour, with a focus on economy, [Business] [EU] [FDI]
• Can SK E&C win new orders after Laos dam collapse?
  Posted : 2018-07-25 17:06 Updated : 2018-07-25 17:15 Lao Villagers evacuate after the Xepian-Xe Nam Noy hydropower dam collapsed in Attapeu Province, Tuesday (local time). / Reuters-Yonhap By Nam Hyun-woo SK E&C Vice Chairman Cho Ki-haeng SK E&C will have an extremely hard time in winning new overseas projects, following the collapse of a dam it was building in Laos, analysts said Wednesday. They are expressing concerns that the incident could raise serious doubts over trustworthiness of not only SK E&C, but also other Korean builders that are looking to secure contracts for construction projects in Asia and other parts of the world. [Reputation]
• Korean Tech Giants in Trouble as Chip Prices Plunge
  By Kang Dong-cheol July 24, 2018 09:29 Memory chip prices are plunging, casting dark clouds over the sole mainstay propping up the growth of Korea's biggest businesses. Chinese rivals are poised to start production of memory chips soon, potentially pushing prices down even further. According to market researcher DRAMeXchange, the spot price of DDR4 8Gb DRAM stands at US$7.90, down 17 percent from January this year. Prices fell below $8 for the first time last week. NAND flash (64Gb) prices fell 18 percent over the same period to $3.30. Spot prices reflect actual market prices and serve as key indices in forecasting future contract price trends. Prices are declining because demand has slowed while supply keeps growing. Output has surged due to the big data boom, but some industry watchers fear it may be nearing an end. One semiconductor industry insider said, "The boom over the last five years has already lasted longer than previous ones, so it's not unusual for the trend to shift now." Samsung Electronics and SK Hynix, Korea's top two listed companies, saw their share prices plummet on Monday. Samsung shares fell two percent compared to the previous session to W46,500 and SK Hynix's more than seven percent to W81,700. One domestic brokerage drastically lowered its target price for SK Hynix over concerns about worsening earnings. [ICT]
• 'North Korea needs economic reform to survive'
  Posted : 2018-07-22 15:39 Updated : 2018-07-22 18:31 North's economy suffers worst performance in 20 years By Kim Jae-kyoung North Korean leader Kim Jong-un should pursue economic reforms to rehabilitate the isolated country's moribund economy, according to William Brown, a Washington-based North Korea expert, Sunday. He believes that without proper reforms, the North won't be able to get its economy back on track even if it gets sanctions relief for giving up its nuclear weapons. William Brown "For Kim to realize his prosperity, much more than ending sanctions will be required," Brown, adjunct professor at Georgetown School of Foreign Service, said in a recent interview. "Economic reforms are clearly the only answer. I would say Chinese-style economic reforms need to get started and Trump can help that very positive process along." [Banality] [Economic reform] [Cliché] [China model]
• PRESS RELEASE: North Korea invites foreign investors and entrepreneurs to the Rason International Trade Exhibition in the Rason SEZ (2018-07-03)
  July 2, 2018 Michela Siuni North Korea invites foreign investors and entrepreneurs to the Rason International Trade Exhibition in the Rason SEZ FOR IMMEDIATE RELEASE: 2018-07-03 PYONGYANG, North Korea – The Democratic People’s Republic of Korea (North Korea) is inviting international exhibitors and guests to the 8th Rason International Trade Exhibition (RITE) from August 20th to 23rd, 2018 in the Rason Special Economic Zone (SEZ), located in the Northeast corner of the DPRK near its borders with Russia and China. The annual event, organized by the Rason Exhibition Corporation (REC), has been held every year since 2011 in the SEZ’s second-largest city of Songbong. However, this year, it will take place at the newly constructed Rason International Trade Exhibition Hall in neighboring Rajin. Official guests can attend the ‘Forum on Investment in the Rason Economic Trade Zone’, a comprehensive overview and discussion covering the current business and investment opportunities in infrastructure, real estate, manufacturing, labor export and other business projects presented by Korean and Chinese stakeholders as well as other investment representatives.
  • Exploring the Rason SEZ’s International Trade Exhibition, Future Investment Opportunities & the Economic Environment
    August 18th to 23nd, 2018 | Exploring the Rason SEZ’s International Trade Exhibition, Future Investment Opportunities & Economic Environment (6 Days / 5 Nights) June 27, 2018 Michael Spavor August 18-23, 2018 6 Days / 5 Nights Yanji | Tumen | Quenhe/Wonjong | Rajin | Songbong | Pipha Island | Hunchon | Yanji Note: We will be offering a 2-day extension to Kyongsong, Chongjin, Mt. Chilbo, and other areas of North Hamgyong province. We will update the program soon, please contact us if you are interested. Contact us if you are interested. *Note: This is NOT a tour or handled by a tour company. Tour companies are restricted to tourism activities and cannot have meetings with government and DPRK business people. This is an official delegation visit that includes unique interactions with DPR Korean business people and special access to investment and trade-related events as well as onsite visits. This would not be possible on a tourist visa. [Rason] [FDI]
• [Photo] Inter-Korean joint inspections begin for connecting inter-Korean railway
  Posted on : Jul.21,2018 14:54 KST Modified on : Jul.21,2018 14:54 KST Inter-Korean joint inspections for connecting South Korea’s Donghae Line to North Korean railways began on July 20. It was the first concrete implementation of inter-Korean cooperation since President Moon Jae-in was elected office. A delegation of South Korean 15 officials led by Hwang Sung-gyo, a senior official with the Ministry of Land, Infrastructure and Transport, visited North Korea to examine section of railways between the Mount Geumgang area and the Military Demarcation Line (MDL). In the above photo, the bus on the left transports the South Korean delegation, and the tracks on the right are the railways of the Donghae Line. [Detente] [Railways]
• Koreas begin inspections to connect railways
  Posted : 2018-07-20 16:56 Updated : 2018-07-20 20:48 Officials of South and North Korea check the condition of tracks at Kamho Station in the North, Friday. / Courtesy of Unification Ministry By Kim Bo-eun South and North Korean officials inspected a section of the railway along the North's east coast, Friday, as the first measure following an agreement to modernize the North's railroads and reconnect the lines between the two Koreas. A South Korean delegation of 15 officials led by a senior transport ministry official went to the North to examine a railroad section between the Mount Geumgang area and the Military Demarcation Line (MDL), eventually to connect the railway with the South. Seven North Korean officials joined the inspection They inspected Kamho, Samilpo and Mount Geumgang stations and found that the roadbed and tracks were in good condition. A joint study team also held their first meeting. [Railways] [Joint Korean] [Detente]
• S.Korea Unwittingly Imported Banned N.Korean Coal
  By Kim Jin-myung July 18, 2018 10:32 Some 9,156 tons of North Korean coal disguised as Russian product were exported to South Korea last October. Seoul did not stop the shipments even when it was tipped off about the real origin of the coal, though the importers are being investigated by the Korea Customs Service. North Korea is banned from exporting coal under UN Security Council sanctions. The government searched two ships registered in third countries, that carried the coal from a Russian port but took no action against them even though it had the authority to seize and detain them under a fresh UNSC resolution effective from December last year. They freely entered several South Korean ports on 24 occasions since late last year. According to a report by the UNSC, the North began illegal exports of coal by ship-to-ship transfers after exports were banned in late August last year. Six ships flying a Russian flag were involved in the shipments to South Korea. Four ships -- three North Korean and a Togo-registered freighter ship -- sailed to Kholmsk, a port in southern Sakhalin, with coal loaded at Wonsan and Chongjin in North Korea in August and September last year. Coal is loaded on a barge at Nampo port in North Korea, in this satellite image taken on March 14. Satellite images obtained by the UNSC show that these ships were unloading the coal at Kholmsk. There they were picked up by the Panama-registered Sky Angel, and the Sierra Leone-registered Rich Glory. The Sky Angel arrived in Incheon on Oct. 2 last year with 4,156 tons of North Korean coal and the Rich Glory at Pohang on Oct. 11 with 5,000 tons worth US$325,000. According to the Foreign Ministry here, the South Korean government was tipped off that the coal was highly likely from North Korea. But the South Korean importers had already completed import procedures by submitting documents claiming that the coal was Russian. The government said until October last year there was no provision in the UNSC resolutions that obliged it to seize ships involved in the violation of sanctions, and the charges were insufficiently clear. But that does not explain why the government failed to seize the ships when they arrived after that. A fresh resolution adopted on Dec. 22 stipulates that "Member States shall seize, inspect, and impound any vessel in their ports" if the vessel was involved in activities like illegal exports "through deceptive maritime practices." Officials show that the Rich Glory entered Incheon, Busan, Pyeongtaek, Gwangyang, and Mukho on as many as 16 occasions between late December and July 6 this year. The Sky Angel entered Masan, Gunsan, Ulsan, and Pyeongtaek on eight occasions. Read this article in Korean [Sanctions] [Coal] [US dominance]
• North Korean leader rebukes officials' complacency against economic drive
  Posted : 2018-07-17 16:36 Updated : 2018-07-17 17:43 North Korean leader Kim Jong-un talks with officials at a dam construction site in Orangchon, North Hamgyong Province, in this photo released by the Korean Central News Agency, Tuesday. / Yonhap By Kim Rahn North Korean leader Kim Jong-un has chided ranking officials in charge of the economy for being "incompetent" during his on-site inspections, saying he was "speechless" at their idleness and unnecessary red-tape, according to the North's state media, Tuesday. His remarks were the latest in a series of reprimands against ranking officials at the Cabinet and the ruling Workers' Party following inspections at factories and infrastructure construction sites, amid his shifting of focus from developing nuclear weapons to building the economy. The Korean Central News Agency (KCNA) reported that Kim recently inspected eight locations in North Hamgyong Province, including construction sites of Yombunjin Hotel and a hydroelectric power plant in Orangchon, a resort in Onpo and a bag factory in Chongjin. Kim was furious at the delayed construction of the dam in Orangchon, as only 70 percent of the construction work has been done since it was started 17 years ago, according to the KCNA. Upon hearing that officials in charge of the construction have not inspected the site for years, Kim lashed out at them, saying he was "speechless." "The officials only check papers without setting up a single measure for practical and speedy economic development," he was quoted as saying by the KCNA. [Kim Jong Un] [Bureaucracy]
• North Korea leader asks to protect forest in border region
  Posted : 2018-07-15 14:27 Updated : 2018-07-15 18:36 North Korean leader Kim Jong-un speaks to his aides during his visit last week to a farm in Samjiyon County, where a township is being built. He stressed that the project should not lead to forests being destroyed. / Korean Central News Agency By Yi Whan-woo Speculation is growing that North Korean leader Kim Jong-un is making a priority of forestation in rebuilding the economy, after he visited Samjiyon County in the border region. The Korean Central News Agency (KCNA) reported on July 10 that Kim visited the county in Ryanggang Province, where a town is being built. He said the project should be divided into the areas of education, dwelling houses, modern streets, industry, sports and cultural education, commercial service and tourism. He also stressed that the project should not lead to the destruction of forests in the region and cited the need for "a good design of forestation and tree planting." His instruction appears to be in line with inter-Korean cooperation on forestry. This is the not the first time that Kim has emphasized environmental protection. In February 2015, Kim said the country should be turned into "thick woodland and greenery," noting that "bare mountains and earth-covered ones should never be handed to posterity." [Reforestation]
• S.Korean Officials to Visit N.Korean Business Zone
  english.chosun.com July 12, 2018 10:04 Song Young-gil A dozen members of a presidential committee will be crossing the border on Friday to visit a special economic zone in North Korea. The Unification Ministry approved their trip on Wednesday. They include the committee's chair Song Young-gil. The group will travel to the northeastern border region of Rajin-Sonbong, where the North operates a special economic zone, to attend a business seminar hosted by Russia and check out the industrial port. [Inter-Korean business] [SEZ]
• N Korea Science and Technology Part 4: Advances in Sustainable Farming and Renewable Energy
  Jul 10, 2018 | Analysis, DPRK | 0 comments N Korea Science and Technology Part 4: Advances in Sustainable Farming and Renewable Energy By Kim Soobok (Translation and edits by Hyun Lee) Continued from Part 3 On my visit to the Namhung Youth Chemical Complex in 2012, I learned about the place as merely a production plant for chemical fertilizers and plastic products. The total number of people at the plant at the time was 12,000, but they said only a fraction of them — 3000 to 4000 — were workers at the plant and the rest did “other work.” Back then, I didn’t understand nor did I know enough to question what that means. Only after learning about the methods North Korea was introducing to encourage local food self-sufficiency did I understand that the remaining 8000 people not directly involved in production at the chemical complex were part of what they call “rear operation.” They are responsible for the reproductive work of raising pigs, chicken and ducks as well as growing rice and vegetables to feed the workers at the plant and their families. [Sustainable agriculture] [Renewable energy]
• “Big Three” Korean Shipbuilders & Their Huge Shipyards in a World of Overcapacity and Collapsed Orders
  by MC01 • Jul 7, 2018 Years of “growth at any cost” led to accounting fraud, huge government bailouts, and murky restructuring plans. By MC01, a frequent commenter on WOLF STREET: Worldwide orders for newly built commercial vessels peaked in 2007 at 85.3 million Compensated Gross Tonnage (CGT) and have never recovered, despite the boom in the intercontinental maritime trade, especially with East Asia. After a historic collapse in 2016, orders ticked up in 2017, but to a still desperately low 20.2 million CGT (new shipbuilding orders via Sea Europe): Three countries came to completely dominate this market as of 2017: China (34%), Korea (31%), and Japan (19%), according to Japan’s Ministry of Land, Infrastructure, Transport and Tourism (MLIT), which also points at a major issue: overcapacity. The shipbuilding industry has been plagued by overcapacity since 2010 and, with new competitors emerging in cheap-labor countries such as India and Vietnam, it seems oversupply will get worse over the next few years. Nowhere is overcapacity more evident than in Korea, where shipbuilding alone accounts for 6.5% of the GDP and where the Big Three shipbuilders alone directly employ over 200,000 workers: Samsung Heavy Industries (SHI), Daewoo Shipbuilding and Marine Engineering (DSME), and Hyundai Heavy Industries (HHI). [Shipbuilding]
• Inter-Korean forestry cooperation talks launch in Panmunjeom
  Posted on : Jul.4,2018 17:17 KST Modified on : Jul.4,2018 17:17 KST Inter-Korean talks for forestry cooperation began on July 4 in the House of Peace on the South Korean side of Panmunjeom. Vice Minister of the Korea Forest Service Ryu Kwang-soo headed the South Korean delegation, while Environmental Protection Ministry Deputy General Director Kim Song-jun led the North Korean side. The inter-Korean forestry talks are resuming for the first time in 12 years. The delegations are expected to discuss measures for revitalizing North Korea’s forests, which have undergone massive devastation. According to date released by the Korea Forest Service, North Korea has lost 32 percent of its forests since 2008. [Deforestation]
• Financial expert suggests trust fund support for NK’s early development
  Posted on : Jul.4,2018 17:28 KST Modified on : Jul.4,2018 17:28 KST Export-Import Bank of Korea director Eun Sung-soo (pictured) said the international community could apply the “Palestinian example” of trust fund support for North Korea’s early development funding prior to its admission to international financial institutions. In a talk with reporters for the second half of 2018 at the Korea Federation of Banks in Seoul’s Myeong-dong neighborhood on July 3, Eun fielded questions on the “scale and methods” of financial support for North Korea’s development. “North Korea’s development and financial support will need to be pursued over a 30- to 50-year time frame,” he said. “Progress will first need to be made on North Korea’s denuclearization, and the lifting of international sanctions will have to be achieved as a requirement,” he added.
• Cross-Border Railway Impossible, N.Korean Defector Claims
  By Kim Myong-song July 02, 2018 09:56 Thae Yong-ho, the former No. 2 man in the North Korean Embassy in London, sounded a warning in a recent memoir against plans now under discussion between the two Koreas to upgrade railway lines across the border. In his book, Thae wrote, "Linking the South and North by railway will be difficult because it involves costs to relocate defensive military installations along the North Korean coast. It's a pointless discussion." The two Koreas discussed reconnecting the railways during the first inter-Korean summit in 2000 but the project was eventually scrapped for that reason. "The North Korean military believes the Incheon Landing was the reason the tides of the Korean War turned against it and spent decades setting up massive defensive fortifications along the East Coast railway line," Thae said. "If construction begins aimed at modernizing the railways, the coastal defense positions must be rebuilt," he added. "Due to the limitations of the North Korean system, which is beyond remedy, it has become evident that the construction of a railway crossing the Korean Peninsula is impossible." [Detente] [Railways] [Thae Yong Ho] [Defector industry]
• 'Forex act' may boost inter-Korean projects
  Posted : 2018-07-02 20:30 Updated : 2018-07-02 22:40 By Kim Jae-kyoung Exploiting Korea's Foreign Exchange Transaction Act could pave the way for the two Koreas to bolster economic cooperation, said Tony Michell, a Seoul-based specialist on the Korean Peninsula. "In general this (foreign exchange act) retards the Korean economy and handcuffs the Korean financial industry, but in the case of North Korea it will help," Michell, a visiting professor at KDI School of Public Policy and Management, said in a recent interview. Michell explained the act will enable the South to make payments in won to the North without violating various sanctions on Pyongyang. Since the act prohibits the offshore use of Korean won without permission from the Ministry of Strategy and Finance and the Bank of Korea, the won is difficult to use outside of South Korea. From his perspective, the fact that South Korean won cannot be converted in normal offshore transactions protects the money from being used for military uses and may assist in allowing the U.N. to grant a waiver to reopen the Gaeseong Industrial Complex. "Coincidentally under the present South Korean Constitution, all of North Korean territory is considered South Korean territory, so the use of the Korean won in the North is technically entirely legal and constitutional under the Korea Foreign Exchange Transaction Act." [Inter-Korean business] [Sanctions] [US dominance]
• Singaporean consultant optimistic about business opportunities in NK
  By Kim So-hyun Published : Jun 26, 2018 - 17:36 Updated : Jun 26, 2018 - 18:59 SINGAPORE -- When Michael Heng, a business strategist and former professor, heard that the US and North Korea were going to hold a summit, he felt it was finally time for something to happen in the reclusive state. He asked his friend, an official at the North Korean Embassy in Singapore, if he could take some Singaporeans on a mission to tap future business opportunities in the North. A day after the summit between US President Donald Trump and North Korean leader Kim Jong-un in Singapore earlier this month, the North’s Korea Committee for the Promotion of International Trade sent an invitation to Heng, the 63-year-old director of recruitment firm People Worldwide Consulting, to bring Singaporean businessmen to the country. “If Singaporean companies don’t start moving now, they won’t have a chance in North Korea because once they open up, they will do business mainly with the South Koreans,” Heng told The Korea Herald. “I think the (United Nations) sanctions on North Korea will begin to ease by the year-end.” The five-day trip from Sept. 18 will accommodate 18 participants to explore market opportunities in North Korea and meet with its “movers and shakers,” according to Heng. Twelve firms including a textile manufacturer, an air-conditioner component maker and an event company that organizes trade fairs have already paid participation fees of 4,950 Singapore dollars ($3,647, if departing from Singapore) or SG$4,500 (if joined from Beijing) per person, and another four are expected to make their payments. [Sanctions] [Business]
• Household Debt Just Keeps Growing
  By Kim Ji-seop June 30, 2018 08:18 Korea's household debt is expected to surpass a staggering W1,500 trillion soon (US$1=W1,113). According to the Bank of Korea on Wednesday, total household debt stood at W1,468 trillion in the first quarter of this year, up a whopping eight percent from the same period of 2017 at a time where economic growth is barely three percent. Since 11 million households were indebted as of March last year, that means each of them owes W133 million. [Debt]

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JUNE 2018

• Koreas to conduct joint study on linking motorways
  Posted : 2018-06-28 17:08 Updated : 2018-06-28 21:32 South Korean delegates, led by Vice Transport Minister Kim Jeong-ryeol, center, are greeted by North Korean officials as they cross the border line at Panmunjeom for talks on reconnecting roads, Thursday. / Courtesy of Unification Ministry By Park Ji-won, Joint Press Corps The two Koreas agreed Thursday to form a joint research team to study reconnecting roads across their border and modernizing the highways in the North. In working-level talks at Tongilgak, the northern side of Panmunjeom, delegates from the two Koreas agreed to check on the conditions of the North's highway between Gaeseong and Pyongyang on the western side of the Korean Peninsula in early August, and the roads between Goseong and Wonsan on the east coast afterward. Goseong is a North Korean city north of the border, with South Korea having a city with the same name south of the border. Connecting and modernizing roads was part of the Panmunjeom Declaration reached at the April 27 inter-Korean summit,. The two agreed to jointly conduct the design and repair work for the roads and hold a groundbreaking ceremony as soon as possible, when necessary steps are taken. But they did not mention anything about constructing roads between the North's Gaeseong and the South's Munsan, just south of the border. If the 19-kilometer section is completed, vehicles could travel from Seoul all the way to Pyongyang. The two Koreas pushed for building a highway between Gaeseong and Munsan in 2015, but the plan fell through due to strained relations between the two countries after the North's fourth nuclear test in January 2016. The talks were led by the South's Vice Transport Minister Kim Jeong-ryeol and the North's Pak Ho-yong, vice minister for land and environmental protection. Earlier on Tuesday, the two Koreas talked about connecting railways between the two countries and modernizing the North's railway system. For that, they will start a joint study in late July. [Detente] [Logistics]
• Does Korea Face Japan-Style 'Lost Decade'?
  By Jang Sang-jhin, Lee Dong-hwi June 26, 2018 13:04 Korea is at risk of a drawn-out economic slump that is worse than Japan's "lost decade" in the 1990s, according to some projections. The forecast is based on economic indicators that resemble Japan's when in the early stages of the doldrums, with the difference that Korea's youth unemployment and household debt are even worse. The first indicator of Japan's slump was a sharp decline in private consumption. The average 3.6-percent growth during the 1980s dropped to 1.9 percent in the 1990s. A similar trend is happening in Korea. Private consumption grew 4.3 percent on average from 2000 to 2007 but has slowed to 2.2 percent. It increased 2.6 percent in 2017, but that falls to 1.6 percent excluding the amount of money Koreans spent overseas. ? Youth Unemployment The crisis facing Korea is most apparent in two different age groups: youth and the elderly. Last year, Korea's youth unemployment rate stood at 9.5 percent and last month it rose even further to 10.5 percent, a record for the month of May. [Economic crisis] [Stagnation]
• North Korea’s reconstruction should be viewed as integration, not reunification
  Posted on : Jun.14,2018 16:51 KST Modified on : Jun.14,2018 16:51 KST Samsung Securities report suggests “Complete, Visible, Irreversible Prosperity” on Korean Peninsula A report from the Samsung Securities North Korean investment strategy team The standards for calculating the costs of North Korea’s economic reconstruction should be discussed in terms of “integration” rather than “reunification,” analysts are arguing. Analysts also predicted the city of Wonsan is likely to become a landmark for North Korean economic openness. A June 13 report by the Samsung Securities North Korean investment strategy team titled “Toward the CVIP Era on the Korean Peninsula” outlined possible scenarios for inter-Korean economic cooperation, predicting the recent North Korea-US summit in Singapore would become a “historic inflection point” with “an economy arriving in place of nuclear weapons and missiles.” [Absorption]
• Business Training for Frontier Entrepreneurs
  Saturday, August 18, 2018 12:00 PM North Korea's frontier entrepreneurs have guts, ambition, and grit — but they lack the hands-on experience and practical business skills only a good mentor can provide. If you want to see a part of the DPRK that remains invisible to the average tourist, join this trip and share your skills in marketing, finance, management, and related fields with ambitious North Koreans who are eager to learn from you. [Training]
• Korea Joins Countries Using Trans-Eurasian Railway
  By Hong Jun-ki June 08, 2018 10:54 South Korea became a full member of the Organization for Cooperation between Railways on Thursday, enabling it to run trains on the Trans-Siberian Railway and the Trans-China Railway. The Ministry of Land, Infrastructure and Transport said the 46th OSJD Ministers Conference in Kyrgyzstan unanimously accepted Korea as a full member. The OSJD was established in 1956 as a cargo transportation agreement among 12 countries including Russia, China and North Korea. It now has 28 full members. "By becoming a full member, Korea signs all agreements with OSJD member states that are needed for the use of the Eurasian railways," the ministry said. Seoul had been trying to join the OSJD since 2015 but was thwarted by opposition from North Korea. Instead, South Korean officials since attended the conference as observers. But this time North Korean Minister of Railways Jang Hyok supported South Korea's accession, saying, "Relations between the two Koreas have improved since the inter-Korean summit on April 27." Chinese and Russian delegates also spoke in favor. But for the moment membership is symbolic since new tracks will have to be laid across North Korea and other parts of the line if South Korean trains are to run on them. [Railways] [Eurasian landbridge]
• America’s gig economy is smaller now than before Uber existed, official data show
  by Danielle Paquette and Heather Long June 7 at 12:12 PM Email the author Uber has come to symbolize the gig economy. (Lucy Nicholson/Reuters) Companies like Uber and Lyft — which offer workers flexible work without being employed by a traditional company — have been held up as transformational forces in the American economy. Many predicted more firms would follow Uber’s lead, turning America into a nation of freelancers who have a distant and tenuous relationship with employers. But the so-called gig-economy, which has drawn billions of dollars in venture capital and praise and deep criticism from policymakers, appears not to have caused the massive disruption to the economy that many thought. A new report from the Bureau of Labor Statistics, the first in 13 years, says the share of American workers in these types of jobs has shrunk from 7.4 percent in 2005, before Uber and its like existed, to 6.9 percent in 2017. The report, released Thursday, confounded economists who had expected that companies like Uber would have much more significantly changed the workforce. The findings suggest that while the nature of work may be changing in certain fields like transportation, there is no dramatic shift away from traditional employment in the economy. [Gig economy] [Casualization]
• Korea Business News June 2018
  OP-ED: Roger Barrett, Korea Business Group Managing Director
  During our May Mining Minerals and Metals Mission to Pyongyang last week, which grew to include a 'Legal and Investment Mission', we were all both pleased and invigorated by the very favourable impressions afforded to us by the senior government officials we met every morning and afternoon throughout the mission. The first time visitors to the country were especially impressed by the enthusiasm and good English of the officials we met - some department heads and some up to Vice-Minister level. Of course we met 'real' (local) business people too - and bumped into many old friends from various sectors who were both exhibiting at and visiting the Pyongyang International Trade Fair (PITF). On Monday, the first evening, we wined and dined with our hosts, who can provide us with the necessary visas for first-time visitors within 7 days. We then drove the next day to visit the second day of this year's PITF, where we met with the Official Organisers, who will be holding the Autumn PITF again in September 2018. Our mission members were amazed how crowded it was there, and how many foreign and local companies had booths there - most noticeably the Chinese from North-East China, who do not need a visa to go there. But there were exhibitors from many other countries present too. On Tuesday afternoon we met with the Director of the Electronics Industry and his colleagues, who are all old friends, and have hosted me many times before. We met with other Ministries, most noticeably the Ministry of Trade, and other business people and trade and tourism senior officials, and the Legal officials every morning and afternoon during the rest of the week. On Friday afternoon we took ’time-out’ to meet the United Nations (UN) including the UNDP officials both local and foreign. Imagine our surprise, during a visit to the beautiful tree-lined Embassy District (not unlike the Beijing embassy district, but a few degrees cooler), when our relaxed and trouble-free programme and mission members 'had a bomb dropped on us …’ [KT_summit_cancellation18] [Revival] [Trade Fair]

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MAY 2018

• Energy Engagement Options To Support A Korean Peninsula Denuclearization Deal
  David Von Hippel And Peter Hayes May 28, 2018 I. Introduction In this essay, the authors outline “an array of possible energy sector assistance projects that might be implemented as part of an overarching agreement with the DPRK to denuclearize the Korean Peninsula. Most of these options have elements that can be implemented in the short-term (for example, capacity-building and humanitarian aid), and medium-term (for example, demonstration projects), and can be implemented in a manner that matches the need for energy assistance calibrated to the denuclearization process that may be set in motion by a US-DPRK summit.” David von Hippel is Nautilus Institute Senior Associate. Peter Hayes is Director of the Nautilus Institute and Honorary Professor at the Centre for International Security Studies at the University of Sydney. [Energy] [NK deal]
• A meaningful plan for North Korea's development
  Posted : 2018-05-27 11:28 Updated : 2018-05-27 11:28 By Emanuel Pastreich We must feel sympathy for the North Korean government officials suddenly faced with slick corporate operators from Koch Industries, or elsewhere, who come in to overwhelm them with gaudy presentations, to bribe them and to do everything in their power to get them to hand over the keys to their resources so they can be exploited for the benefit of investors who will never step foot in North Korea. That process is all too well known. We saw it done in the case of Saudi Arabia and other Gulf states in which originally British Petroleum, and then Standard Oil (and later others) seduced a small group of the elite with the allure of riches and created a society in which natural resources are ruthlessly exploited for the sake of foreign investors, and a handful of Saudis, and the domestic infrastructure, let alone education and social services, are left in a state of deep decay. North Korea will need our help and our timely advice on how to respond to these challenges in a meaningful manner. The possible rape of North Korea can become the rape of Korea. [Development] [Bizarre]
• North Korea no longer identified as risk factor in state of South Korean economy
  Posted on : May.14,2018 16:09 KST Modified on : May.14,2018 16:09 KST Bank of Korea survey lists protectionist policies, increased trade pressures, and household debt as major economic indicators Global protectionist policies, increased trade pressures, and accumulating household debt were named in a Bank of Korea (BOK) survey as the biggest risk factors for the South Korean financial market. It’s a sharp contrast with just six months ago, when geopolitical risks associated with North Korea were given as the main factor. [Detente] [Tribute]
• Greenhouses become new source of income in N. Korea
  Posted : 2018-05-13 16:16 Updated : 2018-05-13 16:46 By Yi Whan-woo North Korea is increasingly building greenhouses in coal-mining areas as part of efforts to rebuild its economy hit by U.N. Security Council (UNSC) sanctions, according to sources familiar with Pyongyang. The measure comes after the UNSC sanctions aimed at curbing exports of North Korean coal, one of the country's main income sources, were introduced because of the North's nuclear program. "We can't export coal, so we've changed our lifestyle," a source in South Pyongan Province said on condition of anonymity. The source claimed provincial residents were building greenhouses to "make a living," adding, "It will be hard to find a household that hasn't built a greenhouse in the coal mine regions." Another source said more than 80 percent of residents in Tokchon, a provincial city, had greenhouses, which the authorities had encouraged. The greenhouses are used to grow cucumbers, tomatoes, and peppers. The vegetables are sold to Sinuiju and Pyongyang using taxis and privately operated trucks. Many in the region previously worked in the coal industry, but have been trying to make money in other ways after the UNSC adopted Resolution 2321 in 2016. The resolution is designed to restrict North Korea's annual exports of coal to $400 million or 7.5 million tons, whichever is lower in value, to punish Pyongyang for its nuclear program. In August 2017, Caritas Internationalis, a group of more than 160 Catholic charities worldwide, said it built 10 greenhouses in North Korea between January and August of the same year to grow vegetables for tuberculosis and hepatitis patients. It said the greenhouses were built in Gangwon and South Pyongan provinces with German support. It added that it had built 11 other greenhouses and repaired eight in Gangwon, Jagang and South Hamgyong provinces in 2016. [Greenhouses] [Sanctions] [Innovation]
• N.Korean Official Admits Crippling Impact of Sanctions
  By Kim Myong-song May 09, 2018 12:45 An official at Room 39, a North Korean agency tasked with earning valuta for leader Kim Jong-un's private coffers, has admitted that international sanctions are having a crippling effect. In an article in the December edition of a Workers Party newsletter, Ri Chol-ho wrote foreign traders "have refused to engage in trade, because they are unable to export any food-production equipment or materials due to measures taken by their respective governments who are adhering to U.S. imperialist sanction resolutions." He also revealed that gas stations were forced to close down due to sanctions. "Just take for example [gas stations], which have halted [sales] due to sanctions imposed by the enemy," Ri said. [Sanctions] [Effect] [Media] [Heading]
• North Korea seeks to open new flight route over South Korea: ministry
  Posted : 2018-05-08 16:41 Updated : 2018-05-08 16:41 North Korea is seeking to open a new international flight route via South Korean airspace in an apparent move to expand its diplomatic outreach and exchanges with the outside world, Seoul's foreign ministry said Tuesday. Pyongyang recently made the proposal to the International Civil Aviation Organization (ICAO) to create the flight route to a third country, which links the flight information regions (FIRs) in Pyongyang and the South Korean western port city of Incheon. The FIR, assigned to an ICAO member, is a specific region in which basic air traffic services are provided for the safe and efficient passage of flights. "The issue of establishing a new flight route that the North has raised through the ICAO is being reviewed by (Seoul's) Ministry of Land, Infrastructure and Transport," ministry spokesman Noh Kyu-duk told reporters. [Air Koryo]
• South Korean convenience shop CU hopes to reopen in Gaesong
  Posted : 2018-05-06 15:41 Updated : 2018-05-06 18:17 An empty Family Mart inside the Gaesong Industrial Complex in North Korea in September 2017. / Korea Times file By Ko Dong-hwan In February 2016, South Korean convenience store chain CU was evicted from an inter-Korean industrial park in the border city of Gaesong in North Korea as bilateral tension increased and Pyongyang shut down the joint economic venture indefinitely. But as the inter-Korean summit on April 27 at Panmunjeom took a dramatic positive turn and tension eased, the Gaesong Industrial Complex may reopen. If this happens, the 124 South Korean companies that operated in the complex could, if they choose, get their businesses back ? including CU, the only convenience store chain there. "We feel like we are on thin ice as we are closely monitoring how the joint economic venture will turn out following the summit," a CU official said Sunday. "Our decision depends on the bigger geopolitical issue." The official hopes CU can return to the industrial park. He believes all the companies involved are "not simply there to make big bucks" but a result of the two countries' efforts to contribute to inter-Korean economic growth. "As soon as the industrial park reopens, we will resume normal operations that provide a service of convenience to other employees from neighboring companies," he said. [Kaesong]
• N.Korea Promotes Rosy Outlook on Trade
  By Lee Kil-seong May 02, 2018 13:08 The North Korean consulate in Dandong, China, held a seminar for officials and traders in the region shortly after the inter-Korean summit forecasting imminent prosperity for the isolated country. "North Korea will soon become a trading powerhouse," an official at the consulate said last Saturday, according to Radio Free Asia on Monday. North Korean leader Kim Jung-un "met with South Korea's president and took practical measures necessary for North-South economic cooperation." It added Kim "decided to halt nuclear tests and dismantle the nuclear test site, and inter-Korean economic exchanges that had been cut off will resume soon." One staffer at a trading company there said, "The consulate stressed that economic sanctions would be scrapped if the North Korea-U.S. summit goes successfully, while trade conditions with China will be changing favorably." Another source in China said the North Korean regime "has instructed trading companies to attract foreign investment and promote joint ventures" taking advantage of the turn in the tide. The source added North Korean trade representatives were instructed not to hesitate to attract money even from South Korea. [Trade] [FDI]
• Most Businesses Would Return to Kaesong Industrial Park
  April 30, 2018 13:26 Seventy percent of South Korean companies that used to operate in the joint-Korean Kaesong Industrial Complex would return if cross-border relations improve, a survey shows. The companies await further assurances from the South Korean government when it comes to preserving their assets in the business park. A committee representing the companies, which are mostly mid-sized light-industry manufacturers, met on Monday to discuss the timing of their potential return to the complex and what to ask the government for. South Korea closed down the complex in February 2016 after a North Korean nuclear test. In the survey of 101 businesses that operated at Kaesong late last month, 27 said they would return as soon as the industrial park reopens, while 70 wanted to wait to gauge the new circumstances. Only four said they will never go back. Among the reasons for returning, 80 cited the complex's competitiveness, most pointing to the cheap labor force. Almost all or 98 predicted that it will reopen during President Moon Jae-in's term in office. But they were unsure of the exact time, with 39 saying some time this year, 20 next year and 40 in 2020-2022. At the time of the closure, it was believed that most of the wages paid to around 50,000 North Korean workers were taken by the regime, possibly to fund the North's nuclear weapons and missile development. When he was running for president, Moon pledged to reopen the complex, but the issue was not discussed during last week's inter-Korean summit as strict international sanctions remain in place. [Kaesong] [US dominance]
• 2 Koreas Won't Discuss Cross-Border Business Projects
  By Lee Yong-soo April 26, 2018 12:49 Economic cooperation will not be on the agenda of Friday's inter-Korean summit, sparing the government's blushes over rash proposals like reopening the Kaesong Industrial Complex. "Economic cooperation isn't a major agenda item," a senior Unification Ministry official told reporters Tuesday. "That will be possible only if there is progress in inter-Korean relations as a result of denuclearization." The government's hands are at any rate tied as UN Security Council sanctions against North Korea forbid practically all business cooperation. Resuming inter-Korean projects like the joint Kaesong Industrial Complex or package tours to the Mt. Kumgang resort, which used to serve as cash cows for the regime, would violate the sanctions, which are unlikely to be eased until North Korea makes significant progress in scrapping its nuclear program. The U.S. will also continue its maximum pressure campaign until it can see the concrete results in the "complete, verifiable and irreversible denuclearization" of North Korea, according to a White House spokesperson on Monday. North Korean leader Kim Jong-un could still throw a curveball at the summit by bringing up the projects in a bid to soften the sanctions, where he sees Seoul as the weakest link. The regime changed its doctrine from "parallel development of nuclear weapons and the economy" to "economic growth" at the latest session of the Workers Party Central Committee on April 20. "That's a kind of message that South Korea should play a role in building up the North Korean economy," a researcher at a government-funded think tank here said. "We need to open up the possibility but also emphasize that the top priority should be denuclearization." [Kaesong] [US dominance]

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APRIL 2018

• Korea Business Group - Mining and General Mission to DPRK May 2018
  Change is in the air. Judging from yesterday's summit between the North and the South, it's clear there is a strong desire and clear will for a dramatic shift in course on the peninsula. Cutting edge investors will want to strike while the iron is hot, and go have a 'proper-gander' now. The DPRK is well positioned for take off in more than a few ways. Let Korea Business Group (KBG) help position you to take full advantage. Sign me up! The following itinerary for our Mining and General Mission (‘MGM’) can be customised to fit individual and/or company needs. Contact us for details. Itinerary for Sat. 21st to Sat. 28th May 2018 [Mining]
• Rapid Relief Of Humanitarian Stress From Energy Sanctions: Building Energy Efficiency And Solar Pv Measures For Rapid Installation In Pyongyang
  David Von Hippel And Peter Hayes April 18, 2018 In this essay, the authors outline a program that could insulate about 10 percent of the household dwellings in Pyongyang and a solar-cell powered micro-grid that would demonstrate the way to rehabilitate the DPRK’s power grid, both achievable cheaply and within six months of start, as part of a post-summit deal to denuclearize the Korean Peninsula. [Energy]
• 'We are future vegetables'
  Posted : 2018-04-03 08:25 Updated : 2018-04-03 16:52 Plants grow at Miraewon's Fresh Farm III, a factory-style smart farm that grows leafy plants and herbs in an automated environment. / Courtesy of Miraewon Two South Korean smart farms are leading the way in using a technically advanced agricultural system with a huge future around the world. By Ko Dong-hwan They may be farms, but there are no signs of soil or smelly manure. Instead, the sound of water flowing, a breeze, a pleasant temperature and bright artificial lights fill the indoor space of "smart farms" in South Korea. In this environment, countless numbers of different leafy plants thrive in multi-layered beds. Humans rarely frequent the enclosure, which looks similar to a laboratory. Apart from a cleaner with a vacuum cleaner that sucks water from empty plant beds, not a soul bothers the plants. A closer look at the crops reveals antenna-looking fixtures as small as a human finger installed here and there. Unlike the quiet space, the real game happens outside the enclosure ? "played" by computers. Reading data transmitted from the antennas, the computers care for the plants, varying temperature, light intensity and water flow amount, and remote-control the enclosures' environment to maintain ideal conditions. The operation goes on round-the-clock, regardless of outside factors like seasonal effects, weather conditions, human error or animal intrusions. Plants grown in artificial environments, controlled by state-of-the-art artificial technologies, may seem odd to some people. Yet, considering how efficiently smart-farming uses natural resources and energy to produce healthy crops continuously, the concept may well become a reality in a major way. [Horticulture] [Innovation]

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MARCH 2018

• N.Korea Feels Pinch of Intensifying Sanctions
  By Kim Myong-song March 16, 2018 13:14 Intensifying international sanctions are dealing a serious blow not only to the North Korean economy but also to the regime's ability to earn hard currency, according to U.S. intelligence. One defector who used to work for a North Korean trading company overseas said, "I was asked to come to the U.S. Embassy last week and was interviewed by acting ambassador Marc Knapper and other U.S. officials about the regime's secret funding activities." The defector, who claims to maintain contact with North Koreans working for the overseas offices of Room 39, which handles leader Kim Jong-un's private coffers, added, "Sanctions against North Korea have led to a sharp decline in annual earnings at the eight companies run by Room 39 and I was told that the regime's finances were hit hard." He said one trading company that sends hard currency to Room 39 is struggling with deteriorating business, with its income being reduced to 1/10. Another company that operates ships said it now merely runs 10 of its entire fleet of 40. [Sanctions effect] [Defector]
• Study tour to North Korea 20 – 29 May 2018
  Surprisingly, North Korean leader Kim Jong-un and US president Trump are to meet in person by May. How do the North Koreans view the international situation and the recent developments? What are the current business opportunities ?What is the impact of the UN sanctions on North Korea’s economy? In this critical period, we organize a unique press mission, with a focus on politics and economy. North Korea is facing a growing number of international sanctions, and banned export items include key products as coal, seafood and textiles. It can also import less, in particular oil. Before this latest round of sanctions, the economy of DPRK grew at its fastest pace in 17 years in 2016. Actually, its economy has grown steadily in the Kim Jong-un era, due to several pragmatic policies. Is it still possible for North Korea to continue this growth when foreign trade has become much more difficult? State media reports suggest that the economic development strategy of 2018 will be more heavily focused on expanding light industry and agriculture. There will be a shift from importing consumer and industrial goods to domestic manufacture. [Trade] [FDI]
• Korea Times poll shows 57% disapprove of Korean beers
  Posted : 2018-03-08 14:45 Updated : 2018-03-08 16:59 Models promote HiteJinro's Max Special Hop at Cheonggye Square near Cheonggyecheon Stream in Jongno-gu, Seoul. The Korea Times' 24-hour online poll showed 57 percent of the respondents disliked Korean beers, particularly the products of major conglomerates like OB, HiteJinro and Lotte. / Korea Times file By Ko Dong-hwan More than half of people who tried South Korean beers, including perennial top seller OB's Cass, said they didn't like them. In a 24-hour poll conducted by The Korea Times March 6-7, among 340 respondents, 57 percent said "No" when asked whether they liked Korean beers. The poll was conducted online and the questions were in English so Koreans' opinions were not properly reflected. People gave a variety of reasons for liking or disliking the beers. "They taste like an accident in a chemical lab," one respondent said. Another said Koreans "dump soju (a popular liquor with alcoholic levels of about 20 percent) into Korean beer to make it taste better," which shows "how bad the beer tastes." One netizen dubbed all major Korean beers "awful," branding Cass and Hite, the two leading brands, "the worst beers in the world." "Even Korean restaurants in London sell Japanese brands," another anti-Korean beer netizen quipped. The detractors claimed the beers were like "dirty water," "bland" or "watery." Another even argued that Korean beers weren't brewed properly and people who drank them reek of alcohol, which doesn't happen with real beers. One respondent praised China's Qing Dao beer. Another claimed that Korean beers are "far worse than those from nations such as Japan, China and Thailand." While they were critical of the beers of major brands like OB and Lotte, they admitted that craft beers from Korean micro breweries deserved praise. "There are some fantastic craft beers in Korea, which is why I say I ‘like' Korean beer," one respondent said. The fans of Korean craft beers like them enough to list the local brewing companies, including Magpie, Hand & Malt, Gorilla, Table Booth and Maloney's. T.O.P from K-pop boy band BIGBANG acts in a commercial for OB's Cass. / Korea Times file "I do like some Korean beer," one netizen said. "Just not the light lagers made by the big conglomerate Korean brewers like Cass, Hite, Kloud and OB. Those beers are as boring as the Budweiser, Coors or Miller brewing companies from the U.S." Korean beer fans, on the other hand, acknowledged that the Korean products are merely different from other beers. One came up with the analogy that Korean lagers and exotic craft India pale ale (IPA), or dark European beers, are like "apples and oranges." "It is important to moderate our expectations accordingly," the netizen said. They were aware that many non-Koreans disliked Korean beers. But they said such opinions were "exaggerated." "Korean beer is very mediocre and it's not as terrible as a lot of them say," one netizen said. Another Korean beer fan argued that an evaluation of beers must be based on what it is consumed with it. "With the kinds of bold and spicy food that Koreans typically like to consume, this kind of (bland) beer may be just the right thing," the netizen said. [Beer]
• South Korea cuts 'inhumanely long' 68-hour working week
  President introduces 52-hour work week to help improve quality of life and boost birth rates Benjamin Haas in Seoul Thu 1 Mar 2018 03.08 GMT Last modified on Thu 1 Mar 2018 16.00 GMT South Koreans work about 400 more hours a year compared with workers in the UK and Australia. Photograph: Yonhap/AFP/Getty Images Employees in one of the most overworked countries in Asia are about to get a break after South Korea passed a bill to reduce the typical work week in an effort to improve quality of life and boost employment. South Korea’s National Assembly overwhelmingly passed the law which cut the maximum weekly work hours to 52, down from 68. The law comes into force in July and will apply to large companies before being rolled out to smaller businesses. The cut was a campaign promise by President Moon Jae-in, who also secured a 16% increase in the minimum wage this year. [Labour] [Demographics] [Unemployment]

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FEBRUARY 2018

• Firms pin hope on Olympics for restarting Kaesong complex
  2018/02/09 11:20 By Choi Soo-hyang SEOUL, Feb. 9 (Yonhap) -- South Korean companies that operated factories at the now-shuttered joint industrial park in the North's border city of Kaesong said Friday they hope the 2018 PyeongChang Winter Olympics will help pave the way for the resumption of operations. Saturday will mark two years since South Korea abruptly pulled the plug on the special industrial complex just north of the demilitarized zone that had been hailed as a key symbol of economic cooperation between the two Koreas. The action was taken to punish Pyongyang for its fourth nuclear test and a long-range rocket launch. Shin Han-yong, the head of a task force that represents 124 South Korean firms, said he hopes the Olympics will restore severed inter-Korean ties, as well as set the ground for the restoration of long suspended dialogue between Pyongyang and Washington so work can restart at the complex. [Kaesong] [Olympics18] [Detente]
• Gold Cup Food Processing Plant
  January 22, 2018 It was a chilly November morning in Pyongyang, and after three consecutive days of workshops with over a hundred North Korean entrepreneurs, we were ready for some sightseeing. Our partners extended an invitation to visit the Gold Cup food processing plant on the outskirts of the city and we were happy to accept. Gold Cup is situated in Pyongyang’s Mangyongdae district. This name will be familiar to many as the birthplace of Kim Il Sung, Kim Jong Un’s grandfather and the country’s first (and only) President. However, whilst a pilgrimage to the hallowed ground of Kim’s humble beginnings is a rite of passage for many visitors to the capital, the nearby industrial area is somewhat off the beaten track. A guide awaited us on arrival in traditional Korean dress and proceeded to take us on a tour of the factory. First impressions were that, like most places on show to foreigners in North Korea, it was impeccably clean and tidy. I had read that Kim Jong Un had visited the factory in person at the start of the year, delivering his usual on-the-spot guidance. (They say the Queen thinks the whole world smells like fresh paint; perhaps Mr Kim does too.) [Light industry]
• The amazing architecture of the DPRK
  Posted by stalinsmoustache under DPRK | Tags: archictecture | [6] Comments One of the top items in our next visit to the DPRK is the architecture. Since the USA destroyed nearly all the standing buildings (along with 20 percent of the population) in the Korean War, the country had to be rebuilt. The initial phase was heavily inspired by Stalin baroque from the 1950s, with significant assistance from architects from the DDR (East Germany). As Calvin Chua – a Singapore architecture who has been engaged in the latest phase – puts it: ‘Then we have the modernist era in the 60s and 70s, which was followed by the revival of vernacular Korean architectural elements, like Korean hipped roofs, built with concrete in the 80s’. The latest phase is part of a boom in construction since 2014, especially since the DPRK’s economy has kicked along with its own version of the ‘reform and opening up’. Crucially, architecture concerns not merely individual buildings but the larger issues of spatial reconstruction. A reasonably informative article can be found here. It has collections of stunning images, of which I can give only a sample. They come from different periods, mostly from Pyongyang but also Hamhung in the north. [Architecture]
• Economic Study Tour to Pyongyang April 2018
  What will be the impact of the recent UN sanctions on North Korea’s economy? What are currently potential business opportunities? What changes will become visible to the visitor to Pyongyang? In this critical period, we organize two study tours to the country, in order to provide information about these topics. North Korea is now facing a growing number of international sanctions, and banned export items include key products as coal, seafood and textiles. North Korea can also import less, in particular oil. Before this latest round of sanctions, North Korea's economy grew at its fastest pace in 17 years in 2016. Actually, the North Korean economy has grown steadily in the Kim Jong-un era, due to several pragmatic policies. Is it still possible for North Korea to continue this growth when foreign trade has become much more difficult? State media reports suggest that the economic development strategy of 2018 will be more heavily focused on expanding light industry and agriculture. There will be a shift from importing consumer and industrial goods to domestic manufacture. Perhaps the current round of talks with South Korea might result in more joint activities, for example related to the inter-Korean tourism project that brought hundreds of thousands of South Koreans to Mount Kumgang and to Kaesong. In addition, there are various economic sectors where international trade is still allowed. Study tour (general character): 10 - 17 April 2018 Are you interested in learning about the political and economic developments? Then you are welcome to join our upcoming study tour in April. The program has a general character and includes various visits in Pyongyang. During this period, we can witness the birth anniversary of Kim Il-sung on 15 April, and attend some cultural events, such as the Spring Friendship Art Festival. We will also travel south to Kaesong and the DeMilitarized Zone at Panmunjom. During the tour, there will be options for formal and informal discussions with Koreans. The draft program of this mission, which will start and end in Beijing, has been attached. In case you are interested, then a quick reply is requested. [Trade] [FDI] [EU]

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JANUARY 2018

• N.Korea's Food, Oil Supplies Dwindle Amid Sanctions
  By Kim Myong-song January 25, 2018 11:36 Pyongyang is suffering from acute shortages of food, electricity and oil in the wake of international sanctions over its nuclear and missile programs. Sources said the shortages are already being referred to as the third "arduous march," a term recalling the deadly famine of the 1990s. Serious electricity shortages resulted from shutdowns of two main power plants in Pyongyang that lasted more than 10 days so far this year. Coal mines have not been able to produce enough supplies, and whatever coal has been mined cannot be transported due to the power shortage, according to a source. Coke imports from China have stopped due to the sanctions, causing operations at the two power plants to grind to a halt. Even the apartments of the party and military elite often go without power and heating. The only areas of Pyongyang that get regular power supplies are the elite Ryomyong and Changchon districts. "There is no electricity, so people who are given rations of corn cannot go to the gristmills and have to do the grinding at home," the source added. Food rations in Pyongyang have fallen by half, and there is barely any white rice. The state handed out rations of potatoes instead for the New Year. Oil supplies have also dwindled, sending prices of heating and cooking oil through the roof. Diesel oil, which used to cost 13,000 North Korean won, or about W1,800, per liter in November last year has soared to 16,000 to 17,000 North Korean won. Even people who are willing to pay 20,000 won per liter are having difficulties finding supplies. The oil shortage has halted heating, and hospitals are flooded with people with cold-related illnesses. The latest UN Security Council sanctions slashed oil supplies by a third, and exports of North Korean minerals have also been banned, leading to a 23.8-percent decline in the North's shipments to China in the third quarter of last year. [Sanctions effect]
• Energy Insecurity In The DPRK: Linkages To Regional Energy Security And The Nuclear Weapons Issue
  David Von Hippel and Peter Hayes January 3, 2018 In this essay, David von Hippel and Peter Hayes conclude that: “A package of such engagement measures, starting small and building as agreements on nuclear weapons security issues are made and implemented, should be a key component of negotiations toward settlement of the DPRK nuclear weapons stalemate, creation of a nuclear weapons-free zone in Northeast Asia, and related issues.” This report may be downloaded as a PDF file (1.5MB) here. It is published in abbreviated form as an Asia Pacific Leadership Network Policy Brief here. This report was prepared with funding from Open Society Foundation and Ploughshares Fund for the 2017 Institute for Foreign Affairs and National Security (IFANS) Conference on Global Affair, “Nuclear-Free Korean Peninsula: Strategies and Action Programs for the Moon Jae-In Administration”, Korea National Diplomatic Academy (KNDA), Seoul, Republic of Korea, December 11 and 12, 2017. Hosted by IFANS and KNDA, co-organized by IFANS, Nautilus Institute, and the Open Society Institute, and sponsored by the Republic of Korea Ministry of Foreign Affairs and the Asia Pacific Leadership Network. [Energy]
• Exports Growth to Stagnate This Year
  By Kim Seung-bum January 02, 2018 10:02 The government has set this year's export growth target at just a quarter of the 2017 achievement, which marked a record high. The reason is the strengthening won, which makes Korean products more expensive overseas, and the spread of protectionist trade policies. Trade Minister Paik Un-gyu on Monday said exports rose 15.8 percent in 2017 to US$573.9 billion but added that the 2018 target is up only four percent. [Exports]

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