 Posted: Tue 14:10, 08 Mar 2011 Post subject: North Korea is Open for Business |
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| Orascom, the Egypt-based telecoms group, has plans to add millions of North Korean subscribers to its 3G network.
It is not the only foreign company helping North Korea become a "mighty and prosperous nation" by 2012 – the stated aim of Pyongyang's regime. Although perceived as a hermit kingdom, impoverished North Korea is pushing to increase its already surprising number of foreign investors. Last month, the country announced that it was setting up a state development bank to encourage foreign investment, on the instructions of North Korean leader Kim Jong-il. Another body – the Korea Taepung International Investment Group – will help attract foreign funds to the bank. Taepung's deputy head is a prominent Korean-Chinese businessman,Financial outsourcing, sparking suggestions the bank will focus on China, the country's main trade partner already active in North Korea's mining sector. South Korean media have reported that Beijing and Pyongyang will jointly repair a railway from northern China to the North Korean port of Chongjin. This harbour could prove significant to global trade as China's extreme northeast has no direct maritime access. North Korea is also looking beyond Asia, even seeking to increase the number of tourists from its arch-foe, the US. Its key focus is on natural resources. Irish oil company Aminex says it was "warmly received" in Pyongyang last November and was assured that stalled exploration would likely restart. Colin McAskill, executive chairman of London-based financial adviser Koryo Asia,Data convention outsourcing, says the North Koreans are keen for him to start investment in projects to process minerals domestically. This will help Pyongyang add value to exports. Pyongyang is also seeking investors to work on the Taedonggang brewery, a plant it bought and shipped from Britain a decade ago. In February, a North Korean trade delegation is due to visit Europe, according to Paul Tjia, a Dutch consultant who is organising a European business delegation to Pyongyang in May. He hopes to take 10 to 15 potential investors. Mr Tjia, founder of GPI Consultancy, says European companies have been using North Korea's low-cost IT outsourcing sector to design web sites and software for administration, mobile phones and computer games. "It is a surprising fact but the level of IT knowledge is high and they are very aware of the latest software. North Korea has put a lot of effort into IT development, training and technical universities," he says. European studios are also known to be outsourcing the illustration of cartoons to North Korea,quality assurance companies, he adds. Although workers are cheap and technically capable, there are huge obstacles to investing in the poor one-party state. Pyongyang has a grim human rights record and is under tighter sanctions for detonating a second atomic warhead last May. It is effectively cut out of the global financial system,outsourcing software development, including the World Bank and International Monetary Fund. North Korea's national ideology of "Juche" is often translated as "self-sufficiency", but investors stress Pyongyang is happy to offer incentives to outsiders as long as sovereignty is respected. Ken Frost, a director of Phoenix Commercial Ventures, a company involved in North Korean joint ventures making electronics, software and artificial flowers, says the country's 25 per cent corporate profit tax has been cut to 10 per cent for foreigners. He expects further incentives to be offered this year. It is still unclear what direction international diplomacy will take on Pyongyang's atomic bomb programme this year and much may depend on whether South Korea brokers a summit. Whatever happens,Data processing companies, Remy Lardinois, managing director of Pyongsu Pharma, a Swiss drugs joint venture, says Pyongyang will be open for business. "The Democratic Peoples Republic of Korea has always been looking for foreign investment, even in times of political crisis," he says. "Picking the right local partner is what really matters." Copyright The Financial Times Limited 2010. You may share using our article tools. Please don't cut articles from FT.com and redistribute by email or post to the web. |
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