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DPRK seeks foreign capital through Rajin Port Development

Wednesday, March 10th, 2010

Institute for Far Eastern Studies (IFES)
NK Brief No.10-03-11-1
3/11/2010

North Korea is actively looking into further development of Rajin Port by extending China’s lease on port facilities for another decade, and granting Russia 50-year rights to Rajin port facilities, as well. Li Longxi, a deputy of the National People’s Congress and head of Jilin Province’s Yanbian Korean Autonomous Prefecture, revealed to a Yonhap News reporter in Beijing on March 8, “The North gave Russia the right to use Pier 3 for 50 years, and is actively looking into extending the right to use Pier 1 granted to China in 2008 for another 10 years.”

Rajin Port has five piers, with Pier 3 being larger than Pier 1. The rights to Pier 1 were granted to the Changli Group, which specializes in the manufacture of environmental materials in Dalian. 10-year use and development rights had already been granted to this company. Deputy Li explained, “China gained rights to Pier 1 in 2008, and is now in negotiations with North Korea over extending those rights for 10 years.” Therefore, if this agreement is reached, China will have exclusive rights to the pier until 2028.

Li added, “Currently, China is in the process of constructing the facilities necessary to use the pier, and will begin to move goods through the port when construction is complete.” It appears China has invested tens of millions of Yuan into this project. Li also pointed out that by being able to use Rajin Port, Yanbian, currently lacking export avenues, will be able to transport Jilin Province’s abundant coal resources, not only through the Yellow Sea to Shanghai and other domestic cities, but to Japan and other countries in the Asia Pacific region.

On February 28, Sun Zhengcai, CCP Secretary of Jilin Province met with North Korean Kim Yong Il, head of the Korean Workers’ Party International Department, and introduced to him China’s ‘Greater Tumen Initiative’ development project. At the time, it was reported that Sun explained to Kim that Jilin provincial authorities had reached an agreement with North Korea for joint venture to construct a network of roads and basic infrastructure facilities. Jilin provincial and city officials, as well as Changchun city representatives, are involved in the project. China is focused on the Tumen river basin and Rajin Port because of their strategically valuable economic role in developing the country’s straggling northeast region.

Russia is also eyeing Rajin Port, because if the port is developed, it could serve as an outlet to export Sakhalin and Siberian crude oil and natural gas to neighboring countries. In July of last year, Russia and North Korea reached an agreement to repair the rail connection between Rajin and Hasan and to improve Rajin Port facilities, investing 1.4 billion Euros. Japanese newspaper Sankei Sinbun quoted a source within North Korea as reporting that Jang Song Thaek, Party administrative chief and brother-in-law of Kim Jong Il, had recently travelled to Rasun (Rajin + Sunbong) and declared that the area would be fully developed within the next 6 months.

The Korea Daepung International Group, serving as North Korea’s window to foreign capital, is said to have a plan to entice international investment in order to support the Tumen river development plan, and plans to develop Rasun Special City and Chongjin Port into key outlets for DPRK-PRC-Russian trade and commerce in Northeast Asia. However, the participation, and investment, of private-sector enterprises will likely depend on the success of the Rajin Port development.

Posted in China, Foreign direct investment, Korea Taepung International Investment Group (Daepung Investment Group), Rason Economic and Trade Zone (Rajin-Sonbong), Russia, Sea shipping, Special Economic Zones (Established before 2013), Transportation, Tumen River Area Development Programme (TRADP) | Comments Closed

DPRK State Development Bank holds first meeting

Wednesday, March 10th, 2010

According to the AFP:

Sanctions-hit North Korea on Wednesday formally launched a development bank aimed at attracting foreign funds to revive its economy, state media reported.

Directors of the State Development Bank held their first meeting to elect officers and decide on a management structure and annual budget, the Korean Central News Agency said.

The bank, set up on the orders of leader Kim Jong-Il, will have “advanced banking rules and system for transactions with international monetary organisations and commercial banks,” the agency said.

It would invest in major projects and act as a commercial bank.

The bank is the latest move by the North to revive its ailing economy and rebuild crumbling infrastructure. In January it upgraded the status of Rason, a free trade zone near the border with China and Russia, to boost foreign trade.

…

Analysts have said the decision to found the development bank shows leader Kim is confident the six-party talks will eventually produce a settlement.

The board is made up of members of the National Defence Commission (NDC), the nation’s top ruling body; the Korea Asia-Pacific Peace Committee, a state agency in charge of exchanges with South Korea; the finance ministry; the Korea Taepung International Investment Group and two independent directors.

NDC representative Jon Il-Chun was elected director-general and Pak Chol-Su, described as a Korean resident in China, as his deputy.

Previous State Development Bank posts here.

The KCNA story is here.

North Korean leadership Watch has more, including a picture of Jon Il-chun.

Read the full story here:
N.Korea launches bank to woo foreign capital
AFP
3/17/2010

Posted in Asia-Pacific Peace Committee, Banking, Finance, Fiscal & monetary policy, Korea Taepung International Investment Group (Daepung Investment Group), National Defense Commission, State Development Bank | Comments Closed

China to send $10 billion investment to DPRK

Tuesday, February 16th, 2010

UPDATE: According to the Daily NK, South Korea’s National Intelligence Service (NIS) claims $10 billion transfer is not likely:

The director of the NIS, Won Sei Hoon passed on the confirmation to a closed-door meeting of the Intelligence Committee of the National Assembly on Tuesday, after which members Chung Jin Suk of the Grand National Party and Park Young Sun of the Democratic Party revealed it to the press.

According to the two lawmakers, Won told the Committee, “Although North Korea is likely going around trying to invite 10 billion dollars of foreign investment, it seems that they have not attracted that much capital,” before predicting, “Unless the North solves the nuclear problem, it will be almost impossible to attract that much capital.”

He did add, however, “The Cabinet, Workers’ Party, military authorities and National Defense Commission have all seemingly been moving to try and obtain foreign capital. The appeasement attitude shown to the international community may be a part of their efforts to solve the problem of a lack of foreign currency.”

During the closed-doors meeting, Won also gave his opinion on a wide range of other issues pertaining to North Korea, including the inter-Korean dialogue and the truth of Kim Jong Il’s health status.

“It is not a deadlock situation because there is still dialogue,” Won said of the inter-Korean relationship. However, “Since North Korea’s attitude has not changed yet; it will take more time to resume the tours of Mt. Geumgang and Kaesong.”

Commenting on Kim Jong Il’s probable health condition, Won revealed that Kim has been making an effort to appear healthy, for example by removing age spots on his face, but, “While he has been visiting industrial sites, he has expressed nervousness about current issues and economic problems, and has a sharpened temper. His tendency of relying on old acquaintances and family members has been increasing.”

However, “I believe there is zero possibility of a coup. For the time being, it seems that the North Korean leadership can control its domestic society.”

ORIGINAL POST: According to Yonhap:

During his four-day visit to Pyongyang, the source said [Wang Jiarui, head of the international department of the Communist Party of China] held in-depth discussions about investments by Chinese companies via Daepung Group, an investment company that works to attract overseas capital to the communist state.

Total investments are expected to exceed the $10 billion mark, with a signing ceremony planned by North Korea’s State Development Bank in mid-March that is to be attended by foreign investors from involved nations, the source said.

“Over 60 percent of total investments, which will be announced next month, will come from China,” the source added, suggesting the Chinese government’s close involvement in building railways, ports and houses in North Korea.

…

China is North Korea’s biggest trading partner and an important provider of food and fuel. North Korea remains isolated from most of the world and has received virtually no foreign investment. The North’s GDP was estimated at around $26.2 billion in 2008 compared with $1.3 trillion for the South, according to the U.S. State Department.

Read the full story below:
N. Korea draws US$10 billion in foreign investments: source
Yonhap
2/15/2010

Posted in China, Economic reform, Foreign direct investment, Korea Taepung International Investment Group (Daepung Investment Group), State Development Bank | 3 Comments »

Thai authorities halt shipment of DPRK-made weapons

Thursday, February 11th, 2010

UPDATE 13: According to the Times of London, the weapons were headed for Hamas and Hezbollah:

An aircraft full of weapons seized in Bangkok last year was heading from North Korea to Hezbollah, the Lebanese militia, and Hamas, the Palestinian group, Avigdor Lieberman, the Israeli Foreign Minister, said yesterday.

The Thai authorities said that the aircraft was carrying 35 tonnes of weapons, including rockets and rocket-propelled grenades. The Thai Government informed the UN that the haul had been bound for Iran, which is believed to ship weapons to its ally Syria, which distributes them to Hezbollah or Hamas.

North Korea had the “intention to smuggle these weapons to Hamas and to Hezbollah”, Mr Lieberman said in Japan, where he was on an official visit. “This co-operation between North Korea and Syria [does not] improve the economic situation in their countries,” he added.

UPDATE 12: Thailand to release pilots. According to the AP (via the Washington Post):

Thai prosecutors dropped charges against the five-man crew of an aircraft accused of smuggling weapons from North Korea, saying Thursday the men would be deported to preserve good relations with their home countries.

The Attorney General’s Office said the decision was made after the governments of Belarus and Kazakhstan contacted the Thai Foreign Ministry and requested the crew’s release to face prosecution at home.

“To charge them in Thailand could effect the good relationship between the countries,” said Thanaphit Mollaphruek, a spokesman for the Attorney General’s Office. “We have decided to drop all the charges and deport them to their home countries.”

“To charge them in this case would not be a benefit to Thailand,” he added.

The crew – four Kazakhs and a Belarusian – were expected to be released later in the day, said their lawyer Somsak Saithong.

…

Thailand’s Foreign Minister Kasit Piromya indicated earlier this month the men would be released, telling reporters in Geneva the government had “suggested to the office of the attorney general to release them because the U.N. resolution does not oblige Thailand to … bring up charges on the pilots and the crew.”

Thursday’s decision was likely to spark international criticism. The weapons’ ultimate destination remains a mystery, though Thailand has said the plane’s final destination appears to have been Iran. Experts have also voiced concerns that authorities in the former Soviet republics have turned a blind eye to illicit activities of air freight companies that use Soviet-era planes to fly anything anywhere for a price.

A Thai government report to the U.N. Security Council, leaked to reporters in late January said the aircraft was bound for Tehran’s Mahrabad Airport.

But Thai government spokesman Panitan Wattanayarkorn said subsequently that “to say that the weapons are going to Iran, that might be inexact.”

“The report only says where the plane was going to according to its flight plan, but it doesn’t say where the weapons were going to,” he said. “It’s still under investigation, and the suspects are under our legal system.”

Investigations by The Associated Press in several countries showed the flight was facilitated by a web of holding companies and fake addresses from New Zealand to Barcelona designed to disguise the movement of the weapons.

Read previous posts on this topic below:
(more…)

Posted in International trade, Iran, Korea Mechanical Industry Co., Military, Syria, Thailand | 8 Comments »

Head of Office 39 replaced

Thursday, February 4th, 2010

According to the Guardian:

It is the nerve centre of North Korea’s money-making operations, the department dedicated to raising hard currency for Kim Jong-il while his country teeters on the brink of collapse.

Room 39 is responsible for some legal ventures, such as the country’s limited exports of ginseng and other items. But according to defectors, most of its energy goes into drug-trafficking, sales of weapons and missile technology, and the production of counterfeit US dollar bills.

Today, it was reported the department’s head – Kim Jong-il’s personal finance manager – has been sacked, possibly in response to international action against the alleged illegal moneymaking. South Korea’s Yonhap news agency said Kim Dong-un was dismissed because he had been blacklisted by so many foreign governments, including the EU in December, leaving him unable to travel on behalf of Room 39’s legal companies. He has been replaced by his deputy, Jon Il-chun, Yonhap said, citing an unidentified source.

Housed in an unremarkable government compound in Pyongyang, Room 39 oversees 120 companies and mines, accounting for a quarter of all North Korean trade and employing 50,000 people, according to Lim Soo-ho, a research fellow at the Samsung Economic Research Institute. He said Kim’s dismissal may be part of attempts to get around international sanctions.

While its inner workings remain a mystery to all but its occupants and the family they serve, Room 39’s role in enabling the regime to survive even in times of widespread famine and international pressure, has come under greater scrutiny since the imposition last year of tough UN sanctions over its nuclear programme.

…

Some of the money generated by Room 39 is used to buy the loyalty of senior party officials, a role that may take on greater prominence as Kim Jong-il, who suffered a stroke in 2008, prepares to hand over power to his third son, Kim Jong-un. Analysts have estimated that illegal activities account for up to 40% of all North Korean trade and an even higher share of total cash earnings.

Additional information:

1. More on the EU travel ban is here.

2. Office 39 is reportedly located here. Kim Jong Il’s office is reportedly nearby here.

3. This week the KWP’s finance director, Pak Nam-gi, was also let go.

4. Mike Madden notes the new director’s appearance with KJI at an “On the Spot Guidance” visit this week. Mike also points to a possible appearance the Korea Taepung International Investment Group meeting.

Posted in Banking, Bureau 39, Finance, Fiscal & monetary policy, Korea Taepung International Investment Group (Daepung Investment Group), Political economy, Worker's Party | Comments Closed

First meeting of Korea Taepung International Investment Group held

Thursday, January 21st, 2010

UPDATE: According to the Choson Ilbo:

North Korea recently announced it wants to create a bank to finance national development projects and appointed a Korean-Chinese businessman named Pak Chol-su to head what is to be called the [North] Korea Taepung International Investment Group, which is to attract foreign capital for the bank. The seven-member board of directors at the investment company include usual suspects like Kim Yang-gon, the director of the Workers’ Party’s United Front Department, Jang Song-taek, Kim Jong-il’s brother-in-law, and other key players.

But analysts say Pak, a foreigner, is the only one with the ability to attract overseas capital, leading to a sense among South Korean intelligence analysts that Pak was brought in to save what he can of the North Korean economy. It is not the first time. In 2002, the hermit country appointed Chinese-Dutch entrepreneur Yang Bin governor of the Sinuiju Special Administrative Region, though the plan belly-flopped when the Chinese arrested Yang on corruption charges.

According to North Korean sources, Pak was born in 1959, graduated from Yanbian University and has a master’s degree in business and commerce from another university in China. He later developed close ties with high-ranking North Korean officials selling Chinese gasoline in the North. “Since Chinese gasoline is used in cars, it is sold directly to North Korean military officers or key government agencies” since top officials are practically the only ones likely to have one, said one North Korean source. “Pak appears to have gained the confidence of high-ranking officials in the process.”

Pak is believed to have been responsible for setting up a secret meeting between Kim Yang-gon and South Korean Labor Minister Yim Tae-hee in Singapore last October. “Pak used his connections to help North Korea when it was looking for a contact point with the South Korean government after August last year, and it appears this position is his reward,” said Cho Bong-Hyun, a North Korea analyst with the Industrial Bank of Korea. There is speculation that Pak may be tasked with luring South Korean capital for investment in North Korea.

The Taepung International Investment Group was established in China and Hong Kong in September 2006 to lure foreign investment to North Korea. In 2007, Taepung signed an agreement with China’s Tangshan Iron and Steel to build a production plant in North Korea and was involved in getting the New York Philharmonic Orchestra to perform in Pyongyang in February 2008. The North announced last Wednesday that both Taepung and the bank would be headquartered in Pyongyang.

It remains to be seen whether Pak will generate the results the regime hopes for. Lee Jo-won, a professor of North Korean studies at Chung-Ang University, said, “Unlike the appointment of Yang Bin, there seems to have been a certain level of consent in terms of the role Pak will play. But without progress in the North Korean nuclear crisis, it’ll be virtually impossible for him to attract foreign investment.” One senior South Korean government official said, “Last year, North Korea apparently held an investment blitz in the EU and was disappointed to learn that continued economic sanctions due to its nuclear weapons program in effect prevent other countries from making any investment there.”

UPDATE: DPRK establishes national development bank in order to attract foreign capital
Institute for Far Eastern Studies (IFES)
NK Brief No.10-01-22-1
1/22/2010

On January 20, the (North) Korean Central News Agency (KCNA) reported that the North’s most powerful government organization, the National Defense Commission, ordered the establishment of a ‘National Development Bank’ to “carry out investment affairs for projects important to national policy and to conduct business with international commercial banks and international financial institutions.”

Furthermore, the committee decided to establish the main branch of the ‘Korea Daepung International Investment Group’ in Pyongyang, which will operate as an economic consortium attracting foreign monies and ensuring the flow of capital for the National Development Bank. The KCNA reported that an announcement was made at the Pyongyang Yanggakdo International Hotel explaining that “the first meeting of the Korea Daepung International Investment Group board of directors had opened, and that at the meeting, the National Defense Commission’s decision regarding the establishment of the National Development Bank and the mediation committee of the Korea Daepung International Investment Group had been created.”

The news agency went on to explain that the National Development Bank would conduct business with international financial institutions and commercial banks according to “modern financial standards and systems,” ensuring necessary investments in support of projects central to the promotion of national policy. The KCNA also reported that at the meeting, an order from Kim Jong Il was passed down with the title “On Ensuring the Operations of the Korean Daepung International Financial Group.”

Kim Yang-gun (a member of the National Defense Commission and director of the Unification Strategy Department) was selected as Chairman of the Korean Asia-Pacific Peace Committee, while Chinese-Korean Bak Cheol-su was chosen as president and chairman of the board. The 7-member board of directors is reportedly made up of representatives from the National Defense Commission, the Cabinet, the Ministry of Public Finance, the Korean Asia-Pacific Peace Committee, the Korea Daepung International Investment Group, and other related offices.

The board of directors meeting also discussed and voted on bylaws, a 2010 action plan and an annual budget for the Korea Daepung International Investment Group as well as activities for a preparatory committee for the establishment of the National Development Bank. It was also decided to form a secretariat for the board of directors.

In September 2006 the Daepung International Investment Group was established in Hong Kong by North Korean authorities in order to serve as a window for foreign investment, and the group was part of the effort in October 2007 to entice investment from the Chinese Tangshan Iron and Steel Group. It also played a role in bringing the New York Philharmonic Orchestra to Pyongyang in February 2008.

This latest measure appears to indicate that the North Korean leadership is taking a more aggressive drive to entice foreign capital, but it is not yet clear if the move will have any significant impact. It stands out that as sanctions enforced against the North by the international community make it difficult for Pyongyang to attract foreign investment, the North is stressing its intention to uphold “modern standards” for those willing to invest.

The Daepung Group rose to prominence in 2007 as a new window for attracting foreign investment into the North when it reached agreements with China’s Dangshan Steel and Iron Group, the country’s 3rd largest steel company, and Datang Power to form a joint venture to build a 1.5 million-ton processing plant and a 600,000 kW coal-burning power plant in the Kimchaek Industrial District.

ORIGINAL POST: According to KCNA:

Pyongyang, January 20 (KCNA) — The first meeting of the Board of Directors of the Korea Taepung International Investment Group took place at Yanggakdo International Hotel on Wednesday.

It was attended by directors of the board of the group and officials concerned as observers.

Conveyed there were an order of the chairman of the DPRK National Defence Commission “On ensuring the activities of the Korea Taepung International Investment Group” and decisions of the DPRK NDC “On establishing the State Development Bank” and “On setting up the Coordinating Committee of the Korea Taepung International Investment Group”.

At the meeting Kim Yang Gon, chairman of the Korea Asia-Pacific Peace Committee, was elected director-general of the board of the group and Pak Chol Su, a Korean resident in China, permanent deputy director-general and president of the group.

The board of directors is made up of seven persons including representatives of the National Defence Commission, the Cabinet, the Ministry of Finance and an office concerned of the DPRK, the Korea Asia-Pacific Peace Committee and the Korea Taepung International Investment Group.

The meeting decided to set up a secretariat of the board of directors and named its members.

It deliberated and decided on the draft rules of the Korea Taepung International Investment Group, its action program and financial budget bill for 2010, a resolution on starting the operation of a preparatory committee for establishment of the State Development Bank and other agenda items related to the work of the group.

Kim Yang Gon made a keynote report and Pak Chol Su an address on the work of the group at the meeting.

The group, an external economic cooperation body, will play the role of an economic complex ensuring the induction of investment and finances for the State Development Bank, and it will be headquartered in Pyongyang.

The State Development Bank is to provide investment on major projects to be carried out according to the state policy after being equipped with advanced banking rules and system needed for transactions with international monetary organizations and commercial banks.

The Choson Ilbo has more:

North Korea will establish a state development bank which will deal with international financial organizations and commercial banks and invest according to state policies, the official [North] Korean Central News Agency reported Wednesday. The decision was made by the powerful National Defense Commission, which is headed by leader Kim Jong-il.

It will also set up an international cooperation agency called the Joson Daepung International Investment Group to take charge of attracting investment for the bank, KCNA said.

KCNA claimed the bank has “modern financial rules.” Kim Yang-gon, the director of the Workers’ Party’s United Front Department, has been named chairman of the Joson Daepung Investment Group, and Pak Chol-su vice chairman.

A North Korean source said Pak is a Korean-Chinese businessman who maintains relations with South Korean officials and businessmen. He apparently once arranged a secret inter-Korean meeting.

Pak is also believed to have been involved in a secret meeting held between Labor Minister Yim Tae-hee and Kim Yang-gon in Singapore last October.

Rumor has it that Jang Song-taek, Kim Jong-il’s brother-in-law and the director of the Administrative Department of the Workers’ Party, is also on the board of directors.

North Korea will establish a state development bank which will deal with international financial organizations and commercial banks and invest according to state policies, the official [North] Korean Central News Agency reported Wednesday. The decision was made by the powerful National Defense Commission, which is headed by leader Kim Jong-il.

It will also set up an international cooperation agency called the Joson Daepung International Investment Group to take charge of attracting investment for the bank, KCNA said.

KCNA claimed the bank has “modern financial rules.” Kim Yang-gon, the director of the Workers’ Party’s United Front Department, has been named chairman of the Joson Daepung Investment Group, and Pak Chol-su vice chairman.

A North Korean source said Pak is a Korean-Chinese businessman who maintains relations with South Korean officials and businessmen. He apparently once arranged a secret inter-Korean meeting.

Pak is also believed to have been involved in a secret meeting held between Labor Minister Yim Tae-hee and Kim Yang-gon in Singapore last October.

Rumor has it that Jang Song-taek, Kim Jong-il’s brother-in-law and the director of the Administrative Department of the Workers’ Party, is also on the board of directors.

(From a reader): The Korea Taepung International Investment Group (조선태풍국제투자그룹) will attract and coordinate investment – ostensibly from China as a founding member is a Korean Chinese. The group’s charter came from Kim Jong-il , Chairman of the NDC, and its board members include Kim Yang-gon, chairman of the Korea Asia-Pacific Peace Committee (who was elected chairman of the board), Pak Ch’ol-su, a Korean-Chinese (elected standing vice chairman of the board and president), and seven persons representing the NDC, Cabinet, Ministry of Finance, relevant ministries, Korea Asia-Pacific Peace Committee, and the Choson Taep’ung International Investment Group. This seems to be a major salvo in North Korea’s current campaign to ease international tensions, curry desperately needed investment, and ultimately get the country back on its centralized economy track.

According to NK Leadership Watch: In the video footage of the meeting (1/20/2010 on Elufa.net) Kim Chang-sun can bee seen. He is on Kim Jong il’s secretariat.

The Pyongyang Times has more here.

Posted in Banking, Finance, Korea Taepung International Investment Group (Daepung Investment Group), National Defense Commission, State Development Bank | 1 Comment »

First DPRK-RoK joint venture in Rason announced

Tuesday, January 19th, 2010

According to the AFP:

A South Korean company said Tuesday it is planning a joint-venture factory in a free-trade zone in northeastern North Korea, the first such investment by Seoul in the faltering project.

Food processor Merry Co said Pyongyang last month approved its partnership with state-run Korea Gaeson General Trading Corp in the Rason zone near the North’s border with China and Russia.

“We’re going to have a first joint venture between the two Koreas in Rason,” Merry president Chung Han-Gi told AFP.

The North this month upgraded the status of the zone in an attempt to invigorate anaemic foreign investment there.

Chung said his company would invest 60 percent of the 7.5 million dollar cost of the new plant while its North Korean partner would put in 40 percent.

He said he would this week ask the South’s unification ministry, which must authorise all cross-border contacts, to approve the joint venture.

The communist state designated the Rajin-Sonbong Economic Special Zone — later renamed Rason — in 1991, its first such project. But little foreign investment materialised and senior officials who headed the project were reportedly sacked.

In recent years the North has begun trying to revive it, signing an accord with Russia to rebuild railways and the port there. China has also been exploring investment opportunities in the city.

The North’s leader Kim Jong-Il paid his first visit to the zone last month and state media said later that parliament has designated Rason as a municipality to upgrade its status.

South and North Korea have a joint-venture industrial estate at Kaesong near their border. Its operations have often been hit by political tensions, but the two sides were to start talks Tuesday on ways to develop it.

Chung said his firm’s joint venture at Rason, which would have some 200 North Korean employees, plans to produce canned and processed food including tuna for exports.

Merry, which also has a factory in Shanghai, will send Chinese engineers to Rason next month to install production facilities.

The Choson Ilbo adds some interesting details:

This is the first time that Pyongyang has allowed for direct business collaboration, set to take place between North Korea’s Gaeson General Company and the South’s Chilbosan Merry Joint Venture.

The firms are slated to split investment 60/40 and will work together to process and export canned marine and agricultural products starting in March.

UPDATE 1: As reader Gag Halfron points out, this is not the first DPRK-RoK joint Venture. Remember Pyonghwa Motors and Pyongyang’s fried chicken restaurant?

UPDATE 2: In the comments, Werner notes the following: http://www1.korea-np.co.jp/pk/149th_issue/2000101405.htm

Read the full articles below:
N.Korea OKs joint venture with South in trade zone
AFP
1/18/2009

First Inter-Korean Joint Venture to Be Established
Choson Ilbo
1/20/2010

Posted in Foreign direct investment, Joint Ventures, Korea Kaeson General Trading Corp, Merry Co., Rason Economic and Trade Zone (Rajin-Sonbong), South Korea, Special Economic Zones (Established before 2013) | 6 Comments »

Book review Tuesday: Lankov and Foster-Carter

Tuesday, December 15th, 2009

Book Review 1: The Cleanest Race: How North Koreans See Themselves-And Why It Matters
Author: B.R. Meyers
Reviewed by: Andrei Lankov
Review Publisher: Far Eastern Economic Review (the last issue)
Order this book on Amazon here

Most books on North Korea focus on the nuclear issue, that never-ending soap opera of the international diplomacy. In the rare cases when North Korean domestic dynamics are taken into account, the authors (most of whom do not speak or read Korean) concentrate on the official pronouncements of the regime.

Brian Myers takes a fresh approach. He largely ignores what the regime tells the outside world about itself, but concentrates instead on what North Koreans themselves are supposed to believe, paying special attention to the North Korean narratives and mass culture, including movies and television shows. North of the DMZ, mass culture is not about entertainment. Rather it is a lighter version of propaganda whose task is to deliver the same message, but in more palatable form.

As in the case in the Soviet Union, Pyongyang uses works of fiction to send signals which cannot be transmitted otherwise due to current political considerations. For example, when North Korean media found a few kind words for South Korean President Kim Dae Jung who visited North Korea in 2000 with impressive amounts of giveaway cash, North Korean novels still ridiculed him as a pathetic double-dealer.

Continue Reading here…

Bookr review 2: North Korean Posters
Editor: David Heather
Reviewed by: Aidan Foster-Carter and Kate Hext
Review Publisher: Print Quarterly, December 2009 issue (Vol XXVI no 4), pp 429-31.
Order this book on Amazon here

North Korean art is hardly well-known, but it has recently seen something of a surge. For this David Heather can claim some credit, and does. As he boasts in his brief (just one page) preface to this block of a book, “I held the largest exhibition of North Korean Contemporary Art in the West in June 2007 in the heart of London and managed to fly the North Korean Flag in Pall Mall for probably the first time ever” (p.7, capitals in original).

That militant tone, here tongue in cheek, is deadly serious in North Korean Posters. On page after gaudy page angry Korean heroes curse and smite the foe, mostly Americans with hook noses. Fists, tanks and sledgehammers crush; bayonets lunge and stab; rockets rain down – including on a shattered US Capitol (p. 138), in blithe disregard of post-9/11 sensitivities.

In a year when North Korea has been censured by the UN for testing a nuclear device and a long-range missile, such images can only reinforce stereotypes of what Koen De Ceuster in his introduction calls a country “often misrepresented and largely misunderstood” (p.9). Yet there is more to North Korean art than this, as anyone who attended David Heather’s shows at La Galleria can attest. (For those who missed out, images and comment can still be found by searching Philip Gowman’s London Korean Links website, an indispensable resource.)

Here one finds a commercial tie-in modestly unadvertised in North Korean Posters. The said posters, plus a range of other artworks – various genres of painting, tapestry and ceramics – may be purchased via www.northkoreanart.org, which proclaims that: “La Galleria Pall Mall has the privilege to be the only Gallery outside DPR Korea to be permitted to sell art and represent individual artists from North Korea. We can certify that all the works are original and authentic, made and signed by the artists themselves in Pyongyang.” These posters, here described as “Propaganda Popart” (sic), can be yours for £250 each (unframed) plus postage.

“Individual artists”? Not one is named in the book under review. Nor are the pieces dated; so one cannot trace the evolution of styles or themes, let alone particular artists. By contrast, the first volume in this series by Prestel – Soviet Posters, featuring Sergo Grigorian’s collection (2007) – is divided into six periods; each work is dated, with notes on artists and other detail. The absence of such basic data in North Korean Posters is a serious omission. De Ceuster’s useful Introduction gives the broad context, yet is oddly free-standing. With few exceptions the posters are left to shout for themselves, with no information except basic translations of the slogans – which, bizarrely and inconveniently, are printed sideways rather than below.

Furthermore, when is a North Korean poster “original and authentic”? De Ceuster notes that “hand-painted reproductions find ready buyers abroad.” Northkoreanart.org is silent on this key question for collectors: what exactly does your £250 buy, an original or a copy? (Also its comments on the actual art are trite, even illiterate: gouache and propaganda are misspelled.)

The ambiguities go on. Curiously, Northkoreanart does not say who exactly is its partner in Pyongyang, but its sister site LaGalleria.org reveals this as the Mansudae Art Studio. Yet a search swiftly brings up mansudaeartstudio.com, based in Italy and claiming to be “the only official web-site of the Mansudae Art Studio in the West,” which pipped Heather to the post with an exhibition in Genoa in May 2007. Will the real Mansudae reps please stand up? The Italian site is far more educative. Through it one can buy The Hermit Country, which despite a clichéd title (it must have miffed the comrades) is a much better, broader book on modern North Korean art, not limited to posters. The moving spirits here are a pair of Pier Luigis: Cecioni, a collector who owns 600 works; and Tazzi, an idiosyncratic but insightful critic.

For a serious academic survey, Jane Portal’s aptly titled Art Under Control in North Korea (Reaktion/British Museum, 2005), with its fully integrated text and illustrations, is essential. The current art scene in Pyongyang was recently described in an excellent piece by Adrian Dannatt in March’s Art Newspaper. This is big business, on an industrial scale. Mansudae has a thousand artists producing “at least 4,000 top level original works a year [and] a factory-style section producing copies for western hotels;” while abroad it claims to have held over 100 shows in some 70 countries.

Perhaps there are yet more ‘sole agents’ out there? North Korea lends itself to a Columbus complex. People who happen upon it often imagine they are the first ever to do so, and even when disabused they like to claim a special niche. Scepticism is in order, on many counts.

As Dannatt says: “it could not be easier to assemble a collection of contemporary DPRK art … but it could not be harder to source the originals.” He quotes Nicholas Bonner, the doyen of collectors in this area – he began in 1993, and is curating a major exhibition in Brisbane in December – on how many ‘original’ works are in fact copies, and how to tell the difference. Bonner’s website Pyongyangartstudio.com, showcasing his gallery in Beijing, makes no monopoly claims but focuses on the actual art. Interestingly Bonner eschews the propaganda genre, but has a fascinating selection of film posters: a far less aggressive variant, ignored by Heather. He is also scrupulous in specifying that what he offers are “hand painted copies.”

But back to the book. North Korean Posters is a sadly missed opportunity. It reiterates visual cliché, but gives almost no context – historical, political, artistic – for these specific works. It is just a picture book to flick through: no dates, no dimensions, no artists. For a publisher of Prestel’s stature these are shameful lapses. Is the image somehow meant to speak for itself?

Absent such essentials, this is just another twist on commie chic – like Che Guevara T-shirts. It is all very postmodern and cynical. Once upon a time North Korea was communist. Some of these posters are about ideals people believed in, as they strove to build a better society. In today’s DPRK, a half-starved neo-feudal tyranny, one of the few ways to earn hard cash is factories of well-trained draughtsmen flogging second-hand images – bilious or kitsch, take your pick – to gullible, exoticizing Westerners. (Here as in all else, the contrast with South Korea’s brilliant and original art scene is acutely painful.) The laugh is on us too, if we just gawp at these admittedly striking visuals. Have we lost our minds? Do we care to know what we are we looking at? Neither Heather nor Prestel seem bothered. Caveat lector – et emptor.

I used a copy of Soviet Posters and North Korean Posters to make this artistic discovery.

Posted in Art, Civil society, Mansudae creative Company (art studio) | 1 Comment »

Syria’s Tishreen War Panorama

Wednesday, December 2nd, 2009

Visitors to Pyongyang’s Victorious Fatherland Liberation War Museum (Location here) will be interested to know that the DPRK has exported its museum technology to Syria’s Tishreen War Panorama (Location here).

The images are from this web page.

According to an official web page (I think), the panorama dimensions are 129.5m x 7.8m. It was painted by Kim Sing Chol, O Kwang Ho, Ri Jae Su, Ri Kap Il, Kim Chol Jin, Choe Song Sik, Ri Jong Gap, Kim Ki Dok, Cha Yo Sang, Ri Yon Nam, and it opened on 6th October 1999. These artists are employees of the Mansudae Overseas Development Group (Art Studio).

I thank a reader for sending me this information. I have been mapping North Korean projects in Africa, Asia, and the Middle East on Google Earth. Here are some I have blogged about: Monument to African Renaissanace, Zimbabwe Hero’s Park, Ethiopia’s Derg Monument, Kinshasa Kabila Statue, and quite a few more. If you are aware of any North Korea projects in your area please let me know.

UPDATE: Cairo’s October War Panorama is also built by the North Koreans. It appears to have nearly identical architecture. It is located here.

Posted in Architecture, Construction, Google Earth, Mansudae creative Company (art studio), Mansudae Overseas Development Group, Syria | 6 Comments »

DPRK joint venture releases e-learning software

Thursday, November 19th, 2009

eleROM, Sinji JV Group and Phoenix Commercial Ventures Ltd are proud to present learnwithelsi: an innovative new web-based e-learning platform.

learnwithelsi derives its name from the “el” of eleROM and “si” of Sinji. The system is jointly managed by eleROM and Sinji. Subscribers can use the system to manage and study educational courses. learnwithelsi combines the standard features of traditional e-learning platforms with additional features:

* Lectures can be presented real time, even when the lecturers and students are geographically disbursed
* The lecturer can interact with students via video link, whiteboard and instant messaging
* The lecture can be recorded and stored for future access (available from November)
* Every user has tools that enable him/her to create learning contents, manage training activities and interact with other users
* Additionally there are a host of other features; documents can be managed, online exercises created, learning paths created, group work coordinated, assignments produced, forums developed, agendas set, announcements can be made and statistics can be monitored.

Sinji ’s and eleROM ‘s experience in software and e-learning guarantee the quality and reliability of the product. Additionally, learnwithelsi comes with 24 hour support.

Unlike other e-learning platforms, learnwithelsi is offered directly to training institutes for them to create their own courses; thereby enabling them to concentrate on the content of their courses, without having to worry about the technology.

The product follows the philosophy of SAS (software as a service). You don’t need to install anything on your server. You need only an Internet connection to use the platform.

Further system and functional enhancements will be made, eg as from November the video lecture can be recorded and stored for future access.

You can try a sample course on the learnwithelsi platform by clicking here. (login: sample, password: course).

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Here is a PDF of the press release.

Posted in Computing/IT, Education, Phoenix Commerical Ventures, Sinji JV group | 2 Comments »

North Korean Economy Watch