The DPRK is market of 24.5 million people with an enormous business potential, due to relatively low levels of foreign business activities. The country has an abundance of mineral wealth, other natural resources and a highly educated, well-trained and motivated workforce.
Sectors such as mining, energy, agriculture and IT are open to foreign investment; indeed the DPRK Government is actively encouraging foreign investment these areas.
As with other previously closed economies, such as Central and Eastern Europe, early entry means a lack of competition and the potential for a close working relationship with the Government.
Phoenix Commercial Ventures is uniquely positioned to assist foreign businesses and investors with investments and business opportunities in the DPRK.
DPRK has developed diplomatic and trade/business relationships with; Italy, the Philippines, Australia, Great Britain, Germany, Canada, Luxembourg, Greece, Brazil, New Zealand, Kuwait and most recently the European Union. There has also been a fundamental improvement in the friendly ties within the Korean peninsula.
These positive changes have led to improvement in the business and investment climate.
The DPRK is undertaking small experiments with free market economy principles that would have been unthinkable a couple of years ago. There are now 24-hour stores operating in Pyongyang, and six to seven places providing computer access as well.
About 150 bars and 350 restaurants are operating in the capital Pyongyang.
Restaurants, cafes, karaoke and pool halls are running late into the night as long as there are customers.
In order to make up for the shortage of goods and provide some flexibility in distribution, the DPRK has introduced free market influenced economic measures. Quote from the JoonAng Daily:
“The people of the DPRK have tasted what it’s like to live in a free economy. Their minds already have started to adopt to such a change.”
Kim Yong-sul, DPRK Vice Minister for Trade, is quoted as saying at a Pyongyang meeting of overseas ethnic Korean businessmen October 25 2004:
“In the past, we only allowed foreign companies entry into specialized economic zones, but now, we will allow them to set up in other places around the DPRK..If [overseas Koreans] wish to participate in the development of the mineral industry in the DPRK, we can grant rights, and the same goes for establishing a bank.”
He reportedly said Pyongyang was taking a “series of steps to lessen investment restrictions in each industry” and to reduce taxes. The meeting was attended by 164 Korean businessmen from countries including the United States, Japan, Russia and Germany, and 78 representatives from DPRK companies.
When Pyongyang announced economic reform measures in 2002, the focus was on easing economic regulations for its people, but the focus has since shifted toward attracting foreign investment.
In September 2002 the DPRK government announced the establishment of a special administrative region (SAR) at Sinuiju. In certain respects the location of the new zone was not surprising: the DPRK have been talking about doing something in the Sinuiju area since 1998. Yet in other respects the announcement was extraordinary. The DPRK announced that the zone would exist completely outside the DPRK’s usual legal structures; that it would have its own flag and issue its own passports; and that land could be leased for fifty years.
The DPRK has also now removed the less than 50 percent foreign ownership ceiling in joint ventures.
Many businesses, formerly run by the communist party and the military, are currently managed by the cabinet.
Economic changes in the DPRK will become visible; as universities are teaching market economy, and young technocrats in their 40′s are taking charge of economy related policymaking bodies.
The Kim Il-sung University has been teaching students market economy principles since March 2003. The DPRK’s viewpoint on the market is changing.