Amid strong international sanctions on North Korea, the cash-stripped communist country is focusing its efforts on attracting foreign investment by promising special treatment. Analysts are saying that the move is aimed at tackling the difficulties caused by deepening isolation and dismissing international criticisms and concerns over Pyongyang’s nuclear and missile development. They also suspect that North Korea is trying to demonstrate to the outside world that it is not really suffering from international sanctions. Here’s Professor Lim Eul-chul at the Institute for Far East Studies at Kyungnam University to explain.
For North Korea, escaping from international sanctions is one of the most important national tasks for now. The nation seems to believe that surrendering to the sanctions would hurt leader Kim Jong-un’s pride. North Korea wants to show its ability and determination to overcome the sanctions in any way it can. Although it is difficult to lure foreign investment in reality, Pyongyang’s recent efforts show that the nation will continue on its way, regardless of the sanctions. North Korea is trying to demonstrate both nationally and internationally that it will constantly attract foreign investment for economic growth, even while sticking to its nuclear and missile development.
A North Korean website called “Gumgangsan” has recently posted an investment guideline for a ferry business based in Goseong Port near Mt. Geumgang. The notice said that a foreign enterprise would be allowed to operate a 20,000-to 30,000-ton ferry with an investment of 10 to 20 million US dollars over the next ten years. It also promised special permission to run a casino on the ferry. It is an extraordinary offer, considering that gambling is banned in North Korea. A North Korean propaganda website “Ryukyong” has also said that the stalled project of developing the Sinuiju special economic zone will resume, calling the area an attractive destination for investment. The development project was carried out 15 years ago but fell apart later. However, it seems unlikely that a foreign company will be willing to invest in North Korea at a time when more and more countries are joining international sanctions against the regime.
For investors, the most important things to consider include political stability and a peaceful business environment in a particular country, as well as its stable relations with foreign nations. Practical conditions such as a simplified immigration process and tax benefits are also crucial. North Korea has already promised to guarantee the conditions. After all, the key is the ongoing international sanctions. With additional sanctions anticipated, it will be difficult for North Korea to find foreign investors. Most foreigners, unless they are extremely adventurous, will be reluctant to invest in North Korea in this situation.
N: With the Donald Trump administration tightening its North Korea policy, the U.S. House Foreign Affairs Committee passed new legislation on March 29. It is aimed at significantly strengthening sanctions on North Korea. The new act is designed to reinforce a North Korea sanctions law that came into effect in February last year. The sanction measures, which are far more extensive than those set by the U.N. Security Council, are expected to have a major impact on North Korea.
It seems the new bill is intended to close any loopholes in the existing sanctions on North Korea. For example, it seeks to halt supplies of crude oil and other petrochemical products to North Korea and includes a ban on employing North Korean workers overseas. It also aims to crack down on North Korean shipping and use of international ports and block the nation’s online trading and gambling sites. Overall, the strong bill is designed to cut off the sources of major income for North Korea. The new measures will prove much more effective than the existing ones.
Meanwhile, the Chinese government has made it clear that it is opposed to Washington’s move. In a regular briefing on March 23, Chinese Foreign Ministry spokeswoman Hua Chunying stressed that China has been executing the U.N. Security Council sanctions on North Korea faithfully. She reiterated the Beijing government’s previous position, saying that China opposes a country imposing independent sanctions on another country through domestic law. Attention turns to the respective positions of the U.S. and China on this matter.
Basically, China thinks that sanctions and negotiations should go hand in hand. It believes that sanctions have the purpose of drawing North Korea to the denuclearization talks. Given that, China doesn’t want to join any sanctions that might hinder dialogue itself or make the North Korean regime unstable, such as cutting off oil supplies or banning the employment of North Korean workers. China won’t accept Washington’s unilateral sanctions, either, as the two sides are showing widely different views. But the two sides do share the same view that it is necessary to resolve the North Korean nuclear and missile problem. In this respect, they may possibly come to a sort of compromise on the level of sanctions.
Diplomatic experts predict that North Korea will see its foreign income tumble drastically this year. According to Voice of America, North Korea’s foreign currency earnings in 2014 amounted to 3.6 to 4 billion US dollars, but this year, the nation is estimated to suffer some 800 million dollars in foreign currency loss due to international sanctions. Pyongyang’s series of missile provocations and deepening international isolation, following the murder of Kim Jong-nam, the half-brother of North Korean leader Kim Jong-un, will likely deal a serious blow to the nation’s hard currency earnings.
Even amid international sanctions, North Korea is expected to try to draw foreign investment in a desperate move to rebuild its economy and show that it will never give way to the sanctions. North Korea believes it can still withstand the sanctions, even though the situation has become worse. Once the nation manages to upgrade its nuclear and missile capabilities to a certain level, it will probably use them to gain the upper hand at future negotiations.
North Korea is expected to struggle to find a breakthrough in various ways in order to overcome the extensive international sanctions and escape from diplomatic isolation.
[Interview] Defector Opens Restaurant in S. Korea to Start Second Life
This is a Japanese-style ramen restaurant located in Yeongdeungpo-gu District, western Seoul. It has been about a hundred days since North Korean defector Lee Seong-jin opened this place, which is drawing an enthusiastic response from customers.
It sure has been busy today. We ran out of bowls and cups. When the seats are all occupied, I call it one round. Today, I saw two and a half rounds, which means more than 80 people came. I guess we served 90 people today. It’s like hitting the jackpot.
Lee came to South Korea in 2004 when he was 15 years old. During his childhood in North Korea, he witnessed his younger sister dying due to the lack of food. After the painful experience, he dreamed of becoming a chef.
My sister was two years younger than me. One day, when I was seven, my parents left home to earn money, and my sister and I were at home. There was nothing to eat, and we went to the hills at the back of the house to pick some pears. It was winter, and we ate frozen pears which had fallen on the ground. That evening, my sister foamed at the mouth. It seemed she couldn’t digest the pear. She died after that. The next day, my family buried her in the mountains and held a ritual for her. After that, I found myself hoping to make some food for my poor sister and that is where my interest in food began.
After resettling in South Korea, Lee graduated from a high school specialized in cooking and studied culinary arts in college to nurture his dream of becoming a chef. After graduation, he sold snacks to office workers at a food truck during weekdays and gimbap rice rolls to hikers near the mountains on weekends. Then he participated in a program called “OK Chef Project,” which was created by local companies and social organizations with the purpose of helping North Korean newcomers adjust to South Korean society. Thanks to his active participation in the training program, Lee became the first North Korean trainee to open his own restaurant.
The goal of the project was to help 100 North Korean defectors start their own businesses successfully. At first, 80 people applied for the program but 20 were selected. There were various training courses, including cooking and service education. I chose the cooking course, since I was fond of making food. My family members were surprised and glad to see me opening my own store at a young age. They said they believed that I would be able to do a good job.
Lee has two workers at his restaurant. He cooks food, of course, but he also attends to customers, cleans the place and even washes dishes as well. He works so enthusiastically because he wishes to succeed in his work. But more importantly, he hopes to show other people that North Korean defectors can do something well. And he also tries to help neighbors in need to the best of his ability.
I’m a North Korean defector, but there are many people who are in a more difficult situation, such as elderly people who live alone and have few things to eat. I hope to provide them with meals once a month. I’m not sure if my plan will proceed well, but I believe I can grow myself by helping them. It’s the first step toward my own training. I’ll soon meet officials at a local social welfare center to discuss my plan. I’m excited, but I’m a little bit nervous, too.
The workers at his restaurant also came from North Korea. Lee is considering teaching them his cooking skills and business expertise to assist them in their resettlement and self-support, just as he successfully started his business with the help of people around him. He plans to expand his business to open another eatery to share food that he used to eat in North Korea when he was little.
If my current business turns out well, I want to sell North Korean food later. I’m wondering how customers here will respond to it. In North Korea, my family was poor, and I ate street food frequently. I want to focus on North Korean street food, including rice with artificial meat or tofu rice.
Lee calls his restaurant a dream place, where he realized his dream of having his own restaurant and he also encourages his friends to pursue their dreams to become a chef. At this place, he is now cherishing an even bigger dream.
I wish to set up a cooking school in my hometown after unification. I hope to open a restaurant as well so that students can learn how to cook at the school and then work at the restaurant. I imagine a lot of people in North Korea hope to learn how to cook. At present, however, it is simply impossible to do that. But their dreams will come true after Korea is unified. Now, my dream is to help them realize their dreams by establishing a cooking school and a restaurant in the North.
We do hope that Lee’s “dream place” will spread throughout North Korea in the near future.