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North Korean oil tanker in Lybia (UPDATED)

Thursday, March 13th, 2014

UPDATE 4 (2014-3-17): US Navy Seals have boarded the Morning Glory.According to the BBC:

The raid by Navy Seals took place in international waters south of Cyprus, said spokesman Rear Adm John Kirby.

The Morning Glory’s evasion of a naval blockade at the eastern port of Sidra prompted Libya’s parliament to sack Prime Minister Ali Zeidan last week.

The oil terminal has been under the control of militia wanting autonomy for eastern Libya since July 2013.

Meanwhile, there has been a deadly attack on the barracks in the main eastern city of Benghazi.

This was their first attempt to export oil from rebel-held areas. It is not clear where the tanker was headed.

Adm Kirby said the operation had been authorised by President Barack Obama and that no-one had been hurt.

“The Morning Glory is carrying a cargo of oil owned by the Libyan government National Oil Company. The ship and its cargo were illicitly obtained,” he said, adding that it would now be returned to a Libyan port.

The vessel was flagged in North Korea but officials in Pyongyang said it had been deregistered because of the incident.

It was said to have been operated by an Egyptian company.

DPRK as e-waste conduit

Thursday, March 6th, 2014

According to Bloomberg:

How did North Korea become the conduit by which thousands of tons of old junk moved from the developed world into China’s bustling e-waste recycling industry?

As with any smuggling story, the tale starts with a prohibition. In this case, Chinese laws and regulations prohibit e-waste — most commonly understood as old, non-working electronics like laptops, monitors and mobile phones — from being imported into the country. The reasons are several, including a government interest in keeping used foreign goods from competing against new ones, and environmental concerns about how some of those goods are recycled. Nevertheless, China’s national-level environmental and customs authorities have long struggled to maintain those prohibitions against local ports and authorities — especially in south China — who view e-waste recycling as a good source of jobs, tax revenue, and used components to drive local industry. Of the several conduits through which e-waste has traditionally been smuggled, the most common and long-standing was over the Hong Kong-China border.

That all changed in February 2013 when — for reasons that are still unclear — Beijing announced “Green Fence,” a high-level crackdown on the import of prohibited waste and recycling exports, including old electronics. Nonetheless, here and there, imported old electronics still turned up in Chinese recycling facilities (I personally saw them).

The likely means, as described in state media after the North Korea bust, was convoluted. A Hong Kong “gang” allegedly received containers of used electronics from abroad. They arranged for them to be placed them on smaller ships bound for a “country in Northeast Asia.” The culprit’s identity is clear from the awkward phrasing. Criticism of North Korea in the Chinese press is exceedingly rare and -– needless to say — connecting the country to an e-waste smuggling ring qualifies as criticism. Were the country Japan, or even South Korea, it would have been named.

In fact, North Korea has long been rumored to be an e-waste recycling center. Since January 2008 a Chinese company based in Liaoning Province along the border has advertised for scrap to feed its e-waste recycling operations in North Korea itself. The facilities are located, according to the ad, in the port of Nanpo, and “take advantage of North Korea’s environmental policies and inexpensive labor resources.” There, the ad promises, prohibited e-waste can be dismantled and transformed into a product acceptable for export to China.

The smuggling ring was allegedly doing something similar, although its “transformed” e-waste clearly did not meet environmental standards. In North Korea the bulky e-waste was dismantled (steel cases would be removed from old desktop PCs, for example), segregated into marketable components like computer chips for re-use, and then sent to Dandong, a Chinese city and port on the Yalu River, directly across from North Korea. From there, the goods were trucked south, to recycling and re-use centers in Guangdong Province, a straight-line distance of roughly 1,800 miles.

Read the full story here:
Did North Korea Recycle Your Laptop?
Bloomberg
Adam Minter
2014-3-6

Posted in Black markets, China, International trade, Sea shipping, Transportation | Comments Closed

The rise and fall of the Rakwon Chicken Specialty Restaurant (a case study in inter-Korean business)

Tuesday, February 18th, 2014

UPDATE 4 (2014-2-18): Western tourists are still visiting the restaurant (meaning it has a contract with KITC). The restaurant still has the sign “Rakwon Chicken Specialty Restaurant”, though it is a different color than the original. See tourist video here and here.

UPDATE 3 (2014-2-17): The Hakyoreh updates us on the fate of the inter-Korean chicken restaurant:

In 2005, Choi made his first trip to North Korea to inquire about chicken imports. Soon he had changed plans: he would open his own restaurant there selling South Korean-style chicken. Acquaintances tried to talk him out of it, but he was determined. “I went to Pyongyang and I could see there was money in it,” he recalled. And with economic cooperation between South and North at an all time high, he didn’t see much of a political risk either.

He went back and forth to Pyongyang a few times looking for partners. Finally, in June 2007, he opened up the Rakwon Chicken Restaurant, selling South Korean-style chicken on Puksae Road in the Kaesonmun neighborhood of Moranbong District. His North Korean partner provided the building and staff; Choi was responsible for the interiors, ingredients, recipes, and management system. He reached a deal where he took 70% of profits with a total investment of 500 million won (US$470,000). The opening drew a lot of media attention at the time, with write-ups in the South Korean press and foreign outlets like the Washington Post and Japan’s NHK.

Early on, he did strong business selling at fairly steep prices – the equivalent of US$11.30 for a single bird. His clientele came mainly from the city’s upper class and Chinese visitors. Sales of 100 million won (US$94,000) a year looked to be in sight. “My plan was to open up 100 restaurants in the North,” Choi said.

But in 2008, less than a year after he opened the restaurant, Lee Myung-bak took office as South Korean President. Lee’s administration put a stop to the previous decade’s policies of engagement and cooperation with North Korea, opting for sanctions and containment instead.

“There was a promise between the two sides, and I never thought that would be rejected completely,”Choi said. “Suddenly, that was the reality.”

Bit by bit, exchange ground to a halt. A March 2008 shipment of ingredients through Nampo turned out to be Choi’s last interaction. He had not yet received a single share of revenue.

Then came the announcement of the so-called “May 24 measures” in 2010. Following the sinking of the ROKS Cheonan warship the preceding March, Seoul had called a complete halt to all exchange and economic cooperation with North Korea.

“All the May 24 measures did was drive it home,” Choi insisted. “Most of the economic cooperation had been choked off long before that.”

For the next four years, Choi wasn’t able to set foot in North Korea. Without his support, the restaurant lost its chicken focus and began selling ordinary cuisine. Choi’s other business began to suffer too.
“I’d put my house and buildings up as collateral to borrow the 500 million won to invest in the North,” he said. “Then, to top it all off, there was the US financial crisis. Things began to go downhill rapidly in South Korea, and my business started to fall apart.”

UPDATE 2 (2009-1-1): The BBC offers an update of the new chicken restaurant:

The governments may not be on the best of terms but a South Korean businessman seems to have found a way to North Koreans’ hearts: their stomachs.

Choi Won-ho, the owner of a fried chicken chain, was told he was doomed to fail when he opened his first branch in the impoverished North last year.

But encouraged by his progress so far, he is already preparing to open another one.

Mr Choi runs a fast food franchise in South Korea with a total of 70 stores.

He opened one more last year – no real challenge you might think – except this extension to his fried chicken empire is in the heart of one of the most secretive and business-unfriendly places on the planet.

But Mr Choi says the citizens of Pyongyang have been queuing in front of his shop which is taking around $1,000 a day.

He is now preparing to meet North Korean officials in January to finalise the approval for a second outlet.

His customers are almost certainly all members of North Korea’s elite, a country in which the World Food Programme says up to 9m people will face urgent food shortages this winter.

Relations between the two Korea’s have been at a low since the conservative government of President Lee Myung-bak came to power in the South in February.

North Korea has severed official contacts, stopped all cross-border tourism and restricted entry to a joint industrial zone built with southern money.

But despite the chill, Mr Choi’s fried chicken venture seems to be sizzling.

Read the full story here:
South Korea Chicken Success in NK
BBC
John Sudworth
2009-1-1

UPDATE 1 (2008-11-1): The restaurant is set to open in February 2008. According to Yonhap:

An inter-Korean joint-venture chicken franchise will open its first store in Pyongyang early next month, the head of the franchise’s South Korean partner said Friday.

The store set to open in early February will provide a food delivery service using motorbikes for the first time in the communist country, Choi Won-ho, president of the South Korean company said.

No North Korean restaurants offer food delivery service now, according to defectors from North Korea.

Fried, grilled and steamed chicken dishes as well as draft beer are available for delivery, he said, adding the food will be prepared in the North Korean style.

“I recently received a photo of the store’s interior design from our North Korean business partner, Rakwon General Trading Corporation, along with the offer to open the first store before the 66th birthday of North Korean leader Kim Jong-il,” Choi told Yonhap News Agency by phone. “After opening, I will use radio and newspaper ads to promote the business.”

Kim’s birthday, which falls on Feb. 16, is the most festive holiday in the North.

The North Korean company will provide land, some 20 low-cost workers, chicken, and draft beer. The early-stage investment, equipment, cook and spicy chicken will come from the South Korean chicken franchise called “Matdaero Chondak,” Choi said.

The first “Rakwon” chicken restaurant in Pyongyang will have the capacity of seating about 200 people, he added.

The businessman said he will visit North Korea next week to discuss the opening of the store.

“I hope the business will thrive enough so that we can open store No. 10 in Pyongyang,” he added.

Read the full story here:
Inter-Korean joint venture chicken franchise to open first store in Pyongyang
Yonhap
1/11/2008

ORIGINAL POST (2007-11-3): A South Korean entrepreneur is investing in a new fried chicken restaurant in Pyongyang:

According to Reuters:

A South Korean businessman plans to begin a fried chicken delivery service in the North Korean capital, with the first foreign-run restaurant in a country that struggles to feed its own people.

Choi Won-ho, head of a fried chicken franchiser that has about 70 restaurants across South Korea, said Friday he is opening a 50-table restaurant in Pyongyang on Nov. 15. It will also deliver chicken and draft beer to homes.

“I have wanted to be the world’s best chicken brand,” Choi told The Associated Press in a telephone interview.

“But I thought it makes no sense to conquer the world without sharing food with our compatriots. That’s why I went there first,” he said. “I plan to get into the Chinese market via Pyongyang.”

He laughed off concerns his venture may be too risky in the impoverished and isolated country of 23 million, where the elite citizens of the capital are much better off than others.

“I don’t think that I’m going to lose money at all,” he said.

It will be the first foreign-run restaurant in North Korea, according South Korea’s Unification Ministry.

Choi, 48, who has been in the fried chicken business for 15 years, said he hired an ethnic Korean Chinese as the main cook for the Pyongyang outlet and taught him all his cooking know-how. About 20 North Koreans will also work at the restaurant and five scooters will be used for deliveries, he said.

Choi said he invested about 500 million won (US$551,339, ?382,264) in the joint venture with a North Korean trading firm that will take 30 percent of the profits from the business.

North Korea is one of the poorest countries in the world and has relied on foreign food aid to feed the population for more than a decade since natural disasters and mismanagement devastated its economy.

Relations between the two Koreas have improved significantly since their first-ever summit in 2000, spurring a series of exchange projects between the Cold War rivals that fought the 1950-53 Korean War. That conflict ended in a truce, not a peace treaty, leaving the two sides still technically at war.

According to the Joong Ang Ilbo:

South Koreans are making two very different attempts to improve the culinary life of impoverished North Koreans.

First, a South Korean fried chicken franchise will open the only foreign-run restaurant in North Korea, targeting family dining on special occasions.

Second, the labor union of a South Korean conglomerate has built a plant in Pyongyang to provide cheap corn noodles to northerners who suffer from food shortages.

Choi Won-ho, who runs Matdaero, a 70-store fried chicken franchise in the South, said yesterday he would open a restaurant in a joint venture with a North Korean state-run trading company, near the Arch of Triumph in central Pyongyang on Nov. 15.

The restaurant will both receive walk-in customers and deliver chicken and draft beer to homes. Such places are common in South Korea, but it will be the first chicken joint of its kind in North Korea.

Choi has invested 500 million won ($551,000) in the restaurant’s cooking facilities, interior decoration and delivery scooters. He will split the profit 70-30 with the North Korean firm.

Choi, 48, who has been a chicken entrepreneur for 15 years, said there should be sufficient demand despite North Korea being one of the world’s poorest countries, because he plans to offer lower prices to locals.

“I will charge about $3 for a whole chicken for North Koreans and at least $12, the same price as in South Korea, for tourists from the South and other countries,” Choi said yesterday by phone. “One whole chicken will be enough for a four-member family, so the price of $3 will not be too burdensome for special occasions.”

The store will hire about 20 North Koreans to take telephone orders, fry the birds and make home deliveries. It will have seating for 50.

Separately, the labor union of Hyundai Motor Company, Korea’s top automaker, said in a statement that it has completed an 1,800-square-meter corn-noodle plant in Pyongyang. The plant can produce two tons of corn noodles a day, it said.

Hyundai Motor’s 44,000 unionized workers agreed in August to help a South Korean humanitarian group build the noodle factory. Workers donated about 12,000 won each, 500 million won in total, for the facility.

“The plant will be a great help to relieve the food problems of North Koreans,” Chang Kyu-ho, a spokesman for the labor union, said. “Corn is a staple food for North Koreans.”

Read the full stories here:
Fried chicken franchise goes North
Joong Ang Daily
Moon So-young
11/3/2007

S Korean businessman to debut fried chicken at first foreign-run restaurant in North Korea
Reuters (Via DPRK Studies)
Jaesoon Chang
11/3/2007

Posted in Alcohol, Automobiles, Civil society, Economic reform, Foreign direct investment, Price liberalization, Restaurants, South Korea, Transportation | Comments Closed

A new electronic entry system launched for the Kaesong Industrial Complex

Thursday, February 6th, 2014

Institute for Far Eastern Studies (IFES)
2014-2-6

A pilot operation of the new electronic entry system, or radio frequency identification system (RFID), to facilitate the travel to and from the Kaesong Industrial Complex (KIC) was completed on January 15 and pilot operation began from January 28, 2014.

According to a Ministry of Unification (MOU) official, “The construction of the system began from December 11 last year and it was completed this month on the 15th. The trial operation period will begin from the 28th.”

The RFID system was agreed upon last September at the second meeting of the South-North Joint Committee for the Kaesong Industrial Complex in order to improve the South Korean companies’ access to the KIC.

The new RFID system will replace the paper document inspection with an electronic card system and personnel screening will be reduced to 5 seconds from 13 seconds while vehicle screening time will be reduced to 7 seconds from 15 seconds.

In particular, the reduced inspection time will facilitate the travel and ease the heavy traffic during Monday mornings and Friday afternoons: for personnel screenings, from 17 minutes to 5 minutes; for vehicle inspections, from 19 minutes to 8 minutes.

However, the existing personnel and vehicle access to the KIC which requires a 3-day advance notice still remains in effect, and the mobility of personnel and vehicles will still be strictly monitored and chaperoned by the North Korean military.

On the other hand, the fourth round of the sub-panel meeting was held on January 24 to discuss the operation of the RFID system, Internet connectivity, and simplification of customs process at the KIC.

In regards to the streamlining of the customs process, the two countries agreed to change it from ‘complete’ to ‘selective’ examination, but differences still remain over the ratio to be applied to the selective probe.

As for the issue of Internet connection, it is still in the infant stage and the two sides agreed to resume the negotiation on February 7.

Posted in Automobiles, Communications, Internet, Kaesong Industrial Complex (KIC), South Korea, Special Economic Zones (Established before 2013), Transportation | Comments Closed

Economic gap between the two Koreas

Monday, December 23rd, 2013

According to Yonhap:

Trade and economic levels between South and North Korea remained quite wide last year, data showed Monday, pointing to prolonged lackluster business and economic conditions in the reclusive North.

According to the data by Statistics Korea, South Korea’s total trade volume stood at US$1.07 trillion as of 2012, which is 157 times larger than the North’s $6.8 billion. In particular, the South’s exports came to $547.9 billion, 188.9 times larger than those of the North.

The nominal gross national income (GNI) levels between the two Koreas also remained wide.

The GNI for the South was estimated at 1,279.5 trillion won ($1.21 trillion) last year, 38.2 times larger than the North, the data showed. On a per-capita basis, South Korea’s GNI was 18.7 times larger than that of the North.

South Korea also outperformed the North in infrastructure and other social overhead capital spending.

The South’s road network totaled 105,703 kilometers, which compared with the 26,114 km for the North, the data showed. The South had the power generating capacity of 81.8 million kilowatts a year, which is 11.3 times larger than the North.

The only category that the North outperformed the South was in coal production. It produced a total of 25.8 million tons of coal last year, about 10 times the amount of coal produced by the South, according to the data.

The two Koreas had a combined population of 74.4 million, with the South holding a population of about 50 million, the data showed.

The statistics agency has been providing such information on the North every year since 1995 as a way to provide a glimpse into the economic and industrial conditions of the reclusive country.

Read the full story here:
Trade, economic gaps between 2 Koreas remain wide: data
Yonhap
2013-12-23

Posted in Automobiles, Coal, Demographics, Energy, GDP statistics, International trade, Mining/Minerals, South Korea, Statistics, Trade Statistics, Transportation | Comments Closed

Contract signed for Onsong Economic Development Zone

Friday, December 13th, 2013

Pictured above (Google Earth): The approximate location for the North Hamgyong Provincial Onsong Island Tourist Development Zone

According to China’s Global Times:

A contract has been signed between North Korea and a Chinese border city to develop a special economic zone in North Hamkyung Province, one day after North Korea removed Kim Jong-un’s once all-powerful uncle from his post.

North Korea on Monday signed the contract for Onsong Economic Development Zone with Tumen, a Chinese city under the administration of Yanbian Korean Autonomous Prefecture in Northeast China’s Jilin Province, South Korea’s JoongAng Daily reported Thursday.

On Sunday, North Korea dismissed Jang Song-thaek, widely considered the second-most powerful figure in the country, and expelled him from the Workers’ Party of Korea. Jang was accused of “anti-party, counter-revolutionary factional acts” and womanizing.

Considered an economic reformist, Jang led a delegation to China in August last year to discuss the development of two economic zones in Rason City and the Hwanggumpyong and Wihwa islands near the Chinese border.

An official from Tumen said the city government expressed concerns regarding possible postponement of the contract signing due to Jang’s ouster, but North Korea requested they sign the contract as scheduled, according to the daily.

“Jang’s involvement in economic projects had been diminished significantly this year, so his purge would not have much impact on the speed of economic reform in North Korea,” Kim Kyu-chol, head of non-government Forum for Inter-Korean Relations, a Seoul-based group monitoring inter-Korean business relations, told the Global Times on Thursday. “Actually economic reform will speed up next year as North Korea will focus on the economy next year, the third of Kim Jong-un’s rule.”

North Korea was in the process of forming the new National Committee for Economic Development earlier this year, which technocrats who had prior experience with the nation’s former economic development bureau, will have joined, Kim Kyu-chol said.

North Korea also reached an agreement with China on Sunday over a 380-kilometer high-speed railway to connect Sinuiju, the city across the border from Dandong in Liaoning Province, through to Pyongyang and Kaesong, South Korean Democratic Party lawmaker Hong Ik-pyo told a seminar at the National Assembly.

Pyongyang’s insistence on inking the contract sends a signal that its economic ties with China will not be affected by Jang’s dismissal and that North Korea wants to strengthen cooperation with China, said Jiang Longfan, a North Korea expert at Yanbian University.

“Kim wants to consolidate his absolute authority through purging Jang, but in the meantime the commitment to economic development has to be maintained to win people’s support,” Jiang said.

Sinuiju Special Zone located at the estuary of the Yalu River is expected to see the ground-breaking of a major project in February next year, with backing from Hong Kong. North Korea also signed a contract with investors from Singapore, Hong Kong, and the Chinese mainland to invest in the Kangryong Green Development Zone in South Hwanghae Province in mid-November, Tongil News reported on Tuesday.

The Onsong Economic Development Zone is one of the 14 special economic zones North Korea has designated this year to attract foreign investment.

North Korea planned to develop the zone into a tourism resort that includes a golf course, swimming pool, horse racing, and restaurants to attract foreigners, said Jin Hualin, an expert on North Korea economy at Yanbian University.

“But the exact development agenda hasn’t been set as Tumen will invite investors to make their decisions,” he said.

He is optimistic about the economic prospects for the zone, which, located in mysterious North Korea, will be attractive to foreigners, he said.

Next year, North Korea aims to host 1 million foreign tourists and thus further tourism projects are expected to be announced, Kim Kyu-chol said.

Some 250,000 foreign tourists, more than 90 percent of whom were Chinese, visited North Korea last year, Kim said.

Read the full story here:
N.Korea inks border town economic deal
Global Times
Sun Xiaobo and Park Gayoung
2013-12-13

Posted in China, Economic Development Zones (2013), Hwanggumphyong and Wihwado Economic Zones (Sinuiju), Kangryong International Green Model Zone, North Hamgyong Provincial Onsong island tourist development zone, Railways, Rason Economic and Trade Zone (Rajin-Sonbong), Sinuiju International Economic Zone, Special Economic Zones, State Economic Development Commission (SEDC), Tourism, Transportation | Comments Closed

DPRK announces Kaesong “High-Tech Industrial Park” and international “Toll Road”

Wednesday, November 13th, 2013

UPDATE 1 (2013-11-13): KCNA reports on a groundbreaking for the new “Latest Science and Technology Development Zone” in Kaesong:

Construction of Kaesong Latest Science, Technology Development Zone Starts

Kaesong, November 11 (KCNA) — The ground-breaking ceremony for building the Latest Science and Technology Development Zone was held in Kaesong City on Monday.

Present there were Jang Su Nam, representative of the Peace and Economy Development Group, officials concerned, builders, employees of the zone and foreign figures concerned and guests.

Jang said in his address that the construction of the zone would help promote the friendship and develop the cooperation among various countries.

He stressed that the DPRK provides foreign businesses with all conditions for investment.

He expressed belief that the construction of the zone would be completed as soon as possible thanks to the positive efforts of the builders and figures concerned.

Then foreign figures made speeches.

They expressed conviction that the construction of the zone would contribute to promoting the economic development in the region and improving the Korean people’s living standard.

They expressed hope that the figures concerned of various countries would support and encourage the successful construction of the zone.

KCNA also published these two articles (2013-10-13):

Building of High-Tech Industrial Park Will Be Conducive to South-South Cooperation: Diplomats

Pyongyang, November 13 (KCNA) — A ground-breaking ceremony for building a high-tech industrial park was held in Kaesong, the DPRK on Monday.

Addressing the ceremony, Diare Mamady, Guinean ambassador to China, said:

Promoting such a project will enhance the confidence building, the economical growth, the trade and other exchanges and improve the overall cooperation with all neighboring countries of the DPRK.

The project is opening a wide way to an integrated cooperation between Asian countries but not limited to that only, it is paving a new route for south-south cooperation, inspiring developing countries in their search of integrated economies to widen their narrow markets and transfer technologies to launch their development.

Shared growth should be the key philosophy of south-south cooperation, which has to be widespread by economical entities like “Peace Economic Development Group”, in view to cultivate and keep sustainable peace, necessary to the well being of nations.

I would like to express all our greetings and extend congratulations to the great leadership of DPRK, to seize this opportunity which is enlightening its constant and sustainable peace policy.

Making a speech at a press conference held at the end of the ground-breaking ceremony, Multi-Kamara Abubakarr, ambassador of Sierra Leone to China, extended his heart-felt congratulations to Kim Jong Un, supreme leader of the DPRK, for making the visionary decision behind the landmark project and accelerating the economic and social development for the country and people.

He continued:

In the light of my experience from 20 odd years-long service in UNDP and roving ambassadorial activities in over 10 Asian countries, I am convinced that the project is of great potential and that the establishment of the park will put an emphasis on promoting economic development in the region and improving the living-standards of the Korean people.

and…

High-Tech Industrial Park to Be Built in Kaesong, DPRK

Pyongyang, November 13 (KCNA) — The Peace Economic Development Group started the construction of a high-tech industrial park in Kaesong City, the DPRK, with a ground-breaking ceremony on Monday.

Present at the ceremony were Jang Su Nam, representative of the group, officials concerned, builders, employees of the park, foreigners concerned and other invitees.

The group is a consortium of China’s Hong Kong, Singapore, Australia, Middle East and Africa.

The park will have an IT center, hotel, dwelling houses, school and other buildings, as well as a power plant.

Heh Teck Siong, general manager of the group, told the ceremony that it was a great honor for the group to take part in the economic development of the DPRK.

He went on to say:

We are the developers of the high-tech industrial park in Kaesong.
The spirit of our group is to build up economic win-win cooperation with global partners and especially with Asian countries.

We believe that the park will contribute to the economic, confidence and security improvement in the region, and the quality of people’s life.

I am pleased to notify to the friends from the world that the park is kicking off.

Jang Su Nam said in his address that the DPRK government has shown deep care for the industrial park, providing all conditions for enterprises of different countries to invest in it.

The completion of the park will encourage the Korean people in the efforts for building a knowledge-based economic power and greatly contribute to deepening friendship and developing cooperative relations among different countries, he added.

He expressed belief that the construction of the park would be completed at an early date thanks to the energetic efforts of its builders and personages concerned.

Here is a link to one of the articles in Korean. The “Peace Economic Development Group (평화경제개발그룹)” appears to be a different organization than the “Economic Development Commission/Association”. I am not sure how/if they are related.

Television footage of the groundbreaking ceremony can be found here.

ORIGINAL POST (2013-10-18): According to KCNA:

Consortium to Invest in DPRK

Pyongyang, October 17 (KCNA) — A consortium consisting of Jurong Consultants and OKP Holdings of Singapore, P＆T Architects ＆ Engineers Ltd. of Hong Kong, China and other well-known companies of the East Asia and the Middle East is taking part in developing projects in the Democratic People’s Republic of Korea.

The consortium agreed with the DPRK’s related organs on collaboration in building the Kaesong Hi-Tech Industrial Park and Highway Toll Road from Capital Airport to Pyongyang City.

The projects will soon begin.

North Korea Tech provides the following links: Jurong Consultants, OKP Holdings, P&T Architects and Engineers. P&T Showed up earlier at

According to AFP:

South Korea’s Unification Ministry spokesman said it had no official comment, but stressed the project had ‘nothing to do with the existing Kaesong zone’.

OKP Holdings said its involvement was “in the preliminary stages”, while Jurong and P&T both declined to comment.

The Kaesong Hi-Tech Industrial Park will be different from the Kaesong Industrial Park–which is rather low-tech by western standards. South Korean citizens, firms, and agencies are forbidden from making high-tech investments in the DPRK by the Wassenar Arrangement, which is why none of the participating firms listed by KCNA are from the ROK.

It is possible that the new Beijing Capital Airport – Pyongyang Toll Road could utilize the new Yalu/Amnok River Bridge.

Posted in Automobiles, Economic reform, Foreign direct investment, Kaesong Hi-Tech Industrial Park, Peace Economic Development Group, Transportation, Uncategorized | 1 Comment »

International railroad cargo law passed

Friday, November 8th, 2013

Institute for Far Eastern Studies (IFES)
2013-11-8

It was recently confirmed that North Korea has passed the International Railroad Cargo Law, Decree No. 2041 at the Presidium of the Supreme People’s Assembly on December 14, 2011. Under this law, foreign investors in the country are provided legal protection of civil rights and interests.

The Law consists of chapters on the fundamentals of the International Railway Cargo Law; planning and contracts for international railway cargo; and transporters of international railway cargo. According to the law, international railroad business will be placed under the jurisdiction of the “Central Railway Transport Guidance Agency,” and will be accountable for all freights of exports and imports going in and out of the country.

The law proclaimed, “There will be strict system and order in the international railway freight system to ensure smooth transports of goods.” Specifically, the international railroad freight plan, A national planning agency will establish annual plans by quarterly and deliver it to the “Central Railway Transport Guidance Agency,” and the agency will make detailed monthly reports and transfer that information to relevant institutions, enterprises, organizations who used the railroad.

The transport contract is to be made between the transporting company and the owner of the freight and it must bear product name and quantity of the cargo being shipped, departing and arriving border stations, sender and receiver of the cargo, conditions and period of transport. In the law, it also explains export or import of prohibited materials or items that may interfere with the international railway cargo will be strictly restricted.

The law also states, the transporter must notify the recipient of the cargo two hours before the cargo arrives at the final destination, and in case of, delay or loss of goods, compensation for damages must be provided. The amount of compensation cannot exceed the amount of all the goods combined. The cargo owners must pay the transporting company for the services and prices incurred for transporting cargos and wages for labor. The cost will be determined by the State Price Commission.

Violation of contract will allow transportation agencies to claim indemnity for the damages and must submit documents with amount and grounds for claim, documents for transporting goods, and filed accident report at the station by a fixed date and submit the dossier to the railway transport authorities. The railway transport agency must process the claim within three months from the date of report.

The law also provides details on sanctions and conflict resolution. If a delay occurs, the party that is responsible must pay compensation for delays or those that interfered with the normal transporting operation, the law provides for administrative and criminal liability to the responsible party. As for conflict resolution, any disputes should be resolved through negotiation, but for those cases that are not resolvable, it must be resolved through arbitration or by trial.

This law is considered as a measure in preparation to revitalize the railway projects with Russia and China.

Posted in Railways, Supreme Peoples Assembly, Transportation | Comments Closed

DPRK revises law to boost railway cooperation with foreign nations

Wednesday, October 30th, 2013

According to Yonhap:

North Korea has revised a law to help the isolated country expand railway cargo cooperation with foreign countries and attract investment, a report said Wednesday.

According to the report by the Korea Transport Institute (KOTI), Pyongyang changed its international railroad cargo law in December 2011 that regulates contracts, damage claims, fares, restrictions and dispute settlements.

The North had created its first railway law in 1987, but this revision marks the first related to cooperation with foreign countries, it said.

“The changes in particular are noteworthy because it outlines investment protection and pledges that the government will legally uphold the rights of investors and their interests,” the transportation institute said.

Pyongyang will take administrative and legal actions against people who obstruct international rail traffic, and promises to take disputes that cannot be settled through negotiations to court or through a binding arbitration process, it added.

The think tank, meanwhile, said that the changes were primarily made to transform the port of Rajin near the Chinese and Russian borders into a regional logistics hub.

Last month the North announced the reopening of a railway service linking Rajin with the Russian city of Khasan. Work on the railway line took five years to complete.

In addition to the railway law, KOTI said Pyongyang has shown interest in attracting foreign investors who will carry out so-called built-operate-transfer contracts, aimed at modernizing the country’s dilapidated infrastructure.

“The move by the North to emphasize profitability reflects signs that the country is becoming more open to the outside world compared to the past,” said Chang Yong-seok, senior researcher at the Institute for Peace and Unification Studies at Seoul National University.

He said such changes aim to entice much needed foreign investment by offering actual profits.

Read full story here:
N. Korea revises law to boost railway cooperation with foreign nations: report
Yonhap
2013-10-30

Posted in Economic reform, Foreign direct investment, Railways, Rason Economic and Trade Zone (Rajin-Sonbong), Transportation | Comments Closed

China acts to curb DPRK oil imports

Sunday, October 20th, 2013

According to the Asahi Shimbun:

China is holding petroleum that was heading to North Korea from Iran in an apparent attempt by Beijing to maintain its control over Pyongyang, sources said.

According to Chinese sources, the petroleum was part of North Korea’s contract to import about 500,000 tons of condensate, a light oil, from Iran. North Korea, seeking to diversify its energy sources, started discussions on the deal last year.

The agreement was reached with the cooperation of a major Chinese state-run petroleum company.

The condensate is believed to have been shipped from Iran over a number of occasions on tankers registered to a third nation. But Chinese authorities ordered the tankers to stop when they reached the Chinese coast in the Yellow Sea this spring.

The ships were then towed to ports in Dalian, Liaoning province, and Qingdao, Shandong province. Sources said the condensate remains in those ports, which have restricted access to outsiders.

China is believed to have asked North Korea to pay about $2 million (about 196 million yen) for storage expenses.

“Once China realized that North Korea was beginning to depend on Iran for petroleum, China began using various measures to remain engaged so it can maintain its influence over North Korea,” a diplomatic source knowledgeable about relations between China and North Korea said.

Under the North Korea-Iran contract, Pyongyang is to pay Tehran for the condensate, but the condensate itself must be first sent to a Chinese state-run petroleum company.

“Because North Korea does not have the most advanced refineries, it had to ask China to refine the condensate,” a source in the petroleum industry said.

It is unclear what legal basis China is using for holding up the shipments because condensate and other petroleum products needed for daily living are not banned under U.N. economic sanctions imposed against North Korea.

However, one source involved in the transaction said, “As part of the economic sanctions that were imposed against military actions taken by North Korea, inspections were carried out by Chinese authorities, which asked that the petroleum be kept at the port.”

…

Until now, China is said to have provided about 80 percent of the petroleum used in North Korea. The main means of transport were through a pipeline that runs along the Yalu River between the border of the two nations as well as by ship.

According to Chinese customs statistics, the export volume was about 520,000 tons a year.

…

“Not only has a ban on petroleum export shipments been imposed by China, but the total import volume through the pipeline has also been reduced to one-third the level of the same period of the previous year,” a source involved in trade between China and North Korea was told by a North Korean government source in September.

China remains North Korea’s biggest backer, even with the contract with Iran.

Read the full story here:
China holding up shipment of Iranian petroleum to North Korea
Asahi Shimbun
Koichiro Ishida
2013-10-20

Posted in China, Energy, Gasoline, International trade, Iran, Oil, Sea shipping, Trade Statistics, Transportation | Comments Closed

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