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Economy Over three years of Economic Reform that became internationally transparent in July 2002 have generally not been the focus of most media attention. It can be stated that economic reforms began soon after the sudden break up of the former Soviet Union took place in 1989, when North Korea needed to adjust to losing its barter trading partners. The early experiment with market economy took place soon after in the Tumen River area, where the Rajin-Sonbong Economic Trade Zone was established in 1994. The Greater Tumen area has recently been re-vitalised by the Changchun Investor Forum from 2-4 September 2005. Steady market measures improving the investment climate and international diplomacy all went hand in hand from 1999. In the first half of 2000 a total of 45 countries established diplomatic relations, bringing the number of countries with diplomatic relations with the DPRK to 163. North Korea continued experimenting with special zones by establishing the Kaesong Industrial Park, and this continues to develop considerable momentum with over 150 South Korean companies established in this area on the north side of the De-Militarised Zone (DMZ). Mainland China and South Korea are the biggest trade partners of North Korea, with trade with China going up 38% to $1.02 billion in 2003, and trade with South Korea going up 12% to $724 million in 2003 since the start of the experiment. It is reported that the number of mobile phones in P'yŏngyang rose from only 3,000 in 2002 to approximately 20,000 during 2004. As of June 2004, however, mobile phones became forbidden again. A small amount of capitalistic elements are gradually spreading from the trial area, including a number of advertising billboards along certain highways. Recent visitors have reported that the amount of open-air farmer markets have increased in Kaesong, P'yŏngyang, as well as the China-North Korea border, bypassing the food rationing system. Pyongyang International Trade Fair Dominated by Chinese Companies
The fair drew more than 60 companies from China, including Shougang (steel), FAW (trucks), Bosing, and electronics firms TCL Digital Fantasy and Changhong, reflecting the increasing Chinese interest in the DPRK market. Thirty companies from elsewhere included long-time investor Loxley Pacific Telecom of Thailand, Advanced Technologies International Trade of Romania, Vogue bathroom fittings of the UK, Malaysia External Trade KOLAND to fund Kaesong development The Korea Land Development Corporation (KOLAND) is to provide all the funding forthe Kaesong Industrial Complex, according to a report in the ROK newspaper Chosun Ilbo.
If the Kaesong Industrial Complex goes ahead as planned, by the year 2008, the DPRK will earn the equivalent of US$7.754 billion, and even as much as US$12.5 billion in annual profit from it, according to a study done by Hong Soon-jik, a researcher at the Hyundai Research Institute. Tongil Street market bustles with buyersBy Yom Song Hui, Choson Sinbo/The People’s KoreaAt the beginning of the 1990s, in the previous century, Tongil Street, 120 metres wide and over 4 kilometres long, was built in the southern district of the capital city of Pyongyang. A market has newly come into being there. Not long ago I visited this market, guided by Im Yong Chol, an official at the commercial guidance office of the Pyongyang City People’s Committee. Reforms bring in a new kind of market Arts and crafts going, going …
We dropped in at the seafood counter first. As in front of the fruit, vegetable and meat counters, so were there many people before the seafood counter. The fixed counter was built of granite of good quality. Visible on the counter were fishes and shellfishes of different sizes.” Saleswoman Kim Kyong Ok wearing a refreshing, airy dress of light sky-blue colour like other saleswomen said to us: “The carps, crucian carps and shellfish you see here on the counter were all caught in the River Taedong. Of course, there are some fish caught by other people, but the fish caught by my father-in-law are the greatest in number. “Since he has become an old-age pensioner, he keeps on fishing in the River Taedong. This is good for his health. And the surplus fish caught by him that we don’t eat are sold here so as to buy daily necessities.” It is said that foreign visitors to the market do not pass by this counter without buying some fish, for they know that fishes living in the River Taedong are tasty. “Dozens of counters run by organizations and enterprises can also be found in our market. The goods produced over and above the production plan to be fulfilled on all indices laid down by the state and the goods made from byproducts at official organizations and enterprises are brought to our market so as to put them on sale,” said the chief of the market. Then she led us to the counter run by the Raknang Garment Factory. Two saleswomen were selling more than ten kinds of goods, such as a variety of shirts, skirts and trousers. There were dozens of market keepers and they were in charge of the health examination of the salesmen and saleswomen and the sanitary quarantine of commodities. It took us three hours to go round all the counters in the market including those dedicated to household goods, fibres and sundries. When leaving the market, the chief of the market said: “To us the running of the market differs little from a field still unexplored. But it is clear that we should make research into the way of its running by making the ensuring of the people’s living our first consideration. We will strive to correctly solve all problems concerning our work on such a principle in future.” Hearing this, I learned that she was planning a great deal for the effective running of the market.
Fishermen’s wives’ sales
Counters heave with fresh fruit and vegetables
Market Revolution Sweeps DPRK Tongil – ‘reunification’ – in Korean is North Korea’s first formal experiment with limited capitalism. The collapse of the local food-distribution system, and the relatively booming economies of neighbouring China, South Korea and Russia, are forcing the North Koreans to reassess their long-entrenched, orthodox communist system. European cigarettes, Japanese TVs and foreign shoes are reaching Tongil from China. Chinese businessmen sell the goods to North Korean merchants and they bring the produce to market, all with the tacit approval of the authorities. Chinese citizens can enter North Korea without visas. Ironically, this is because they are fellow communist states. The Chinese, however, are bri Flower blast into the market Apart from the goods sold in Tongil, Chinese Flowers blast colour into the market and North Koreans are collaborating in less-formal business relationships. They are ‘illegally’ selling mobile phone services near the frontier. When foreigners arrive in North Korea, they must deposit mobile phones with the authorities. All North Korean cell phones are monitored, but the Chinese cells give North Koreans an opportunity to speak to the outside world without being intercepted. Local officials admit this is a ‘major problem.’ As for more basic needs, the Tongil market supplies diverse foods. There seems to be no shortage of rice, vegetables and meat in a country that is suffering a reported deficit of 400,000 tonnes of grains. North Korean trade officials said they have revolutionized their agriculture policy. Until the outbreak of famine several years ago, the government told the farmers what to produce. It was a complete command economy. Now the farmers are urged to produce what they consider to be appropriate: rice, cabbage or other staples. The farmers are also encouraged to sell an agreed quota of their produce in private outlets like the Tongil market. “The problem,” says Cha Yong Sik, deputy director general in the powerful People’s Committee for the Promotion of International Trade - North Korea’s Trade Ministry – “is that they cannot move quickly enough. Change comes very slowly.” There are also major production problems. While visiting the countryside, it’s immediately apparent that there are very few tractors, and little or no harvesting equipment. Trucks for transport are primitive and scarce. The farmers often plough with oxen and the work is backbreaking. Over dinner at Pyongyang’s Min Jo Shik Tang restaurant, Mr. Cha says: “We are working to promote joint ventures with South Korean companies in the Demilitarized Zone just north of the frontier.” The Min Jo Shik Tang is a nightclub with traditional folk singers, excellent Korean food and many Chinese and South Korean delegations. Both South and North Koreans love to sing. In this restaurant, they often sing songs about dreams of reunification. Reunification has also become a buzzword for South Korean investment into the impoverished North. Joint ventures could be the next stage in North Korea’s internal economic revolution. About 130 kilometres south of Pyongyang is Kaesong, a city of 250,000 people and full of sharp contrasts. Outlined with wide boulevards and typically stark socialist apartment complexes, there are only a handful of cars and vehicles. Thousands of people move about on bicycles, by foot or carrying produce on oxen, under the gaze of the portraits of the founding father Kim II Sung and the current leader, his son, Gen. Kim Jong II. Kaesong, however, is facing radical change. A few kilometres outside the city, the South Korean automotive giant, Hyundai, has started earthwork on a multi-year project to build a complex of factories, offices, a railway to the South Korean industrial hinterland and apartments for workers. According to senior vice-president Jae Won Shim, this would be a nearly $20 billion investment that could provide up to 250,000 jobs. That would be a quarter of a million North Koreans exposed to an infrastructure of high tech computers, the Internet and outside communications. It could also mean the beginning of the end of North Korea’s self-imposed isolation. | |
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an interview with Ri Su Dok, president of the Korean International Exhibition Corporation (KIEC). Present at the opening ceremony, held on May 16, were Vice-Premier Ro Tu Chol, Minister of Foreign Trade Rim Kyong Man, diplomatic envoys and embassy officials in Pyongyang. Rim Kyong Man gave a congratulatory speech, which was followed by an opening address by Ri Su Dok. 
Development Corporation (MATRADE), Atlas Corporation, Atlas Copco Group of Sweden, HS International Trading BV of the Netherlands, shippers OTIM of Italy, and trade consultants Royal Team Corporation of Taiwan. 
nging in vigorous capitalism. 