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FACILITATING DPRK MARKET ENTRY SINCE 1999

North Korean underground investors fund state projects - report

6/30/2016

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Reuters - 
Devoid of consumer high street banks, North Korea has seen a recent rise in underground financing and investment, much of which supports state-managed projects, a South Korean report said on Thursday.

The system grew out of the famine of the 1990s, when North Korea's official economy all but collapsed and paved the way for an informal network of private market traders, smugglers and investors to meet a desperate demand for food and goods.

The rise of these guerrilla bankers was fueled by the regime's inability to fund state projects after the crisis, said the report, released by South Korea's state-run Export-Import Bank of Korea (KEXIM).

"The evolution of private financing is expected to stimulate both the market economy and economic reforms," the report said.

Private financing has "evolved into a market with its own supply and demand structure, and since the 2010s has developed a remittance system too," according to KEXIM.

A now moneyed class of these early investors are known as "donju", a Korean word meaning "masters of money".

It is they who are behind this underground banking phenomenon, the report said.

Some of the richest people in the North Korean underground economy are money-lenders who change cash at a black market exchange rate roughly 80 times higher than the state's officially-publicized exchange rate of around 100 won to the dollar.

That unofficial exchange rate of around 8,000 won to the dollar is now widely used to price goods and services across North Korea and more accurately reflects the market value of the won.

With their experience of trading in hard currency, some of those money-lenders now manage the surplus capital owned by the "donju", the report said.

Much of this underground money funds North Korean public-private partnerships, whereby state enterprises raise money from underground private North Korean investors to fund construction and other projects in the official economy.

The report said it is this demand from the state economy on these unofficial venture capitalists which has helped fuel the boom in underground banking.
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Private Real Estate Buying and Selling Gains More Official Recognition 

6/28/2016

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​Private sales and ownership of real estate has been going on for some years now, but it never got much official recognition. According to New Focus International, that may be changing: 
The North Korean government has recently allowed the possession and sale of real estate for citizens, to a limited extent. 

​A New Focus correspondent inside North Korea reported through telephone: “Until now, the North Korean government had deemed the private purchase of land or real property as illegal. However, there has been an obvious increase recently in the number of construction companies building apartment blocks and so forth. It appears that the state has realised the limitations of the current legislation and are taking countermeasures. These include new rules relating to the boundaries of newly-constructed buildings, or where land can be bought, and the penalties, mainly confiscation, for exceeding those boundaries.”
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"AIIB unlikely to lend any support to North Korea"

6/28/2016

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Via The Hankyoreh: 
The Asian Infrastructure Investment Bank (AIIB) is almost certain not to invest in North Korea-related projects for the time being, it has been confirmed.

Speaking at a press conference on June 25 for the bank’s annual conference in Beijing, the Chinese-led, multilateral development bank’s president Jin Liqun fielded a question on its plans to invest in or support projects in non-member states like North Korea.

“In terms of projects for non-member states, they can receive investment once they become member states,” he replied.

While something of a generality, his remarks would suggest no route for North Korea to receive AIIB assistance as a non-member. The bank currently limits membership application eligibility to International Bank for Reconstruction and Development (IBRD) and Asian Development Bank (ADB) members. While it is taking new applications through September, the prospects of North Korea joining as a non-member of both are likely.

​Jin also showed a subtle change in position toward North Korea. As recently as his Sept. 2015 South Korea visit as AIIB president-designate, Jin voiced a positive stance on the matter.


“North Korea is a country that the Investment Bank very much wants to help, and we hope it can join as a member of a multilateral development organization,” he said at the time.
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Insights Into A North Korean's Grey Market Hustle

6/27/2016

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Daily NK released an interview today with "A North Korean resident from North Pyongan Province residing in China on a personal travel visa..."  

This is a highly recommended read (it's not too long) for its candidness, and it's packed with lots of revealing info. Some choice bits: 
​
Many say that people’s livelihoods have become a lot more stable under the Kim Jong Un regime. Would you agree?
The market prices may have stabilized but people’s everyday lives have not. For people in the city, if they trade at the market every day, they’ll make enough profit to buy some rice, and on good days, they’ll even make enough to save some on the side. But when rice and other farm produce prices are stable, it makes life more difficult for people in the farming communities. This is because people on collective farms can only sell grain in order to buy other daily necessities. So if rice prices stay at the current 5,000 KPW level, they will need to sell dozens of kilograms of rice just to generate enough profit to buy a single piece of clothing.

What brought you to China?
I used to make money by selling food like mock meat with rice [rice stuffed into a wrap made with imitation meat] in front of the train station. I would be on the run from the police on the train all day. When the train comes in, I would run over to passengers and sell the food. My face would get so tanned from being in the sun, and I would be drained. That, I could endure, but when I would get all my food confiscated, that was really tough. My husband works at a state factory and doesn’t receive rations or a monthly salary properly, so he is not very helpful. No matter how much I sold, it would earn us just enough to eat cornmeal mixed in with rice. One day, I just thought the idea of living like this to die one day was so pathetic. 

And how's this for some perspective: 
​
What are your future goals? 
The more time I spend here, the more my goals change. I had decided that I would just try to earn enough seed money to start a business, but having made that money already, I want to make more. I guess this is what people mean when they say that even the ocean cannot fill a person’s greed. Right now, my main goal is to help my parents and siblings. I especially want to buy my siblings a house so they have some stability.

Since I need to go back at some point, I’m trying to learn some kind of trade instead of just making money. At the moment, I’m paying tuition at a Chinese private academy to learn how to give people foot massages. I think diligently learning such advanced skills from other countries is an investment for the future. 

​Read the rest
. 
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Dandong Unveils Plan to Hold China-N. Korea Expo in October

6/10/2016

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​Via KBS World Radio: 

"The city of Dandong in China’s southeastern Liaoning Province has announced that it will host the fifth China-North Korea Economic, Trade, Culture and Tourism Expo from October 15th to the 18th.
 
"The China Council for the Promotion of International Trade’s Dandong committee made the announcement through its Web site on Friday.
 
"A source in Dandong said the announcement is significant as it had been uncertain whether the expo would be held due to the international community’s fresh sanctions against the North. 

Continue reading. 
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Sign Of The Times At The Pyongyang Trade Fair

6/9/2016

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Aram Pan, the Singaporean photographer who runs DPRK 360, recently posted a long video at the Pyongyang International Trade Fair. He walks around the grounds and his two lovely guides explain the products to him and where they come from.

​The details you can observe here really show a lot, and one that stands out is at 12:18 - you see a transaction taking place in US dollars...at the Cuba booth (actually you see a lot of greenbacks trading hands). The times they are a-changin'. For the better. 
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"DPRK Today" Endorses Donald Trump?

6/6/2016

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Last week scholar Han Yong Mook took the pages of DPRK Today to write an op-ed on why Donald Trump is the best candidate for North Korea. 

DPRK Today is a North Korean website that focuses primarily on tourism and culture. Compared to other state media, DPRK Today is pretty light on politics. For a North Korean website it is also one of the most connected to American social media with its own Twitter, YouTube, Tumblr, Google+ and Pinterest pages among others.

​It carries far less editorial weight than publications like Rodong Sinmun or The Pyongyang Times, and the fact that this editorial was published in DPRK Today suggests that someone is trying to test the waters of Western public opinion rather than make an explicit endorsement of Donald Trump by the Kim regime. That's not to say the editorial didn't require approval from upstairs, but there is some distance for deniability in it. 

That is, of course, not how the Western media is reporting it. What you will see on CNN and Fox is that North Korea Has Endorsed Donald Trump, when in reality a scholar has been given some leeway in a not very influential publication to float an idea. 

NK News has translated the good parts, with Mr. Han saying “In my personal opinion, there are many positive aspects to the Trump’s ‘inflammatory policies...Trump said ‘he will not get involved in the war between the South and the North,’ isn’t this fortunate from North Koreans’ perspective?”

Trump recently said in a New York Times interview that US allies Japan and South Korea should start paying more for the American defense commitment to those countries, or risk a US withdrawal. 

“Yes do it, now..." Mr. Han said in his editorial. “Who knew that the slogan ‘Yankee Go Home’ would come true like this? The day when the ‘Yankee Go Home’ slogan becomes real would be the day of Korean Unification.”

The most important part of the editorial, however, was this: “The president that U.S. citizens must vote for is not that dull Hillary — who claimed to adapt the Iranian model to resolve nuclear issues on the Korean Peninsula — but Trump, who spoke of holding direct conversation with North Korea.”

Not that dull Hillary.

This guy gets it. Good job Mr. Han. I know Crooked Hillary has already stuck, but hopefully Mr. Trump takes this suggestion as from a man of his own heart. #NotDullHillary.
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"North Korean Facebook" Gets Hacked and Shutdown

6/6/2016

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From The Korea Times: 

North Korea launched its own version of Facebook -- "Best Korea's Social Network" -- on Friday but shut it down soon after a Scottish teenager hacked into it.

According to CNN Money, Doug Madory, the director of Internet analysis firm Dyn DNS, found the website on a North Korean server and told the media it was available to people outside the isolated country at 
www.starcon.net.kp.

But within hours of its launch, Scottish teenager Andrew McKean hacked the website by using "admin" and "password" for the login details.

He said he could "delete and suspend users, change the site's name, censor certain words, manage the ads and see everyone's emails."

The website not only looked like Facebook, but had similar functions such as uploading a cover photo and profile picture, finding friends, sending messages and posting a status message. 

Madory said: "[I'm] not sure this was an official North Korean government project. But someone inside the country had to have done this."

He said the website was hosted in North Korea, unlike other North Korean websites, which were hosted in China. 
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"North Korean Facebook" Gets Hacked and Shutdown

6/1/2016

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From The Korea Times: 

North Korea launched its own version of Facebook -- "Best Korea's Social Network" -- on Friday but shut it down soon after a Scottish teenager hacked into it.

According to CNN Money, Doug Madory, the director of Internet analysis firm Dyn DNS, found the website on a North Korean server and told the media it was available to people outside the isolated country at www.starcon.net.kp.

But within hours of its launch, Scottish teenager Andrew McKean hacked the website by using "admin" and "password" for the login details.

He said he could "delete and suspend users, change the site's name, censor certain words, manage the ads and see everyone's emails."

The website not only looked like Facebook, but had similar functions such as uploading a cover photo and profile picture, finding friends, sending messages and posting a status message. 

Madory said: "[I'm] not sure this was an official North Korean government project. But someone inside the country had to have done this."

He said the website was hosted in North Korea, unlike other North Korean websites, which were hosted in China. 
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