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Yesterday, my colleague Marc Noland outlined some shenanigans at Kaesong; today, the Chinese variant. In August, we provided an overview of the Xiyang investment dispute. More information is now leaking out, as a result of a translation of a Chinese piece by the SinoNK team of Adam Cathcart and Roger Cavazos and reporting by Jane [...]
With its bloated military, numerous money-losing state-owned enterprises, and generous welfare benefits (at least for the privleged few) the North Korean state has a great demand for resources. Several recent stories revolve around a common theme of the trying to extract rents from foreigners. We start today with South Korea and the pipeline and take up some [...]
Ignoring the importuning of Grover Norquist, North Korea intends to crack down on tax avoidance at KIC according to multiple press reports. Operators in the complex are exempt from taxes for the first five years after reaching profitability, pay a reduced rate for the next three years, and pay at a 14 percent rate thereafter. [...]
South Koreans sometimes label Chinese investment in North Korea as “economic colonialism.” I normally discount these concerns as slightly paranoiac but a series a press reports from last week are starting to make even me wonder. First, multiple stories appeared in the Chinese and South Korean press describing an agreement between the China Overseas Investment [...]
One of the stories that we have been following is the development of the mining sector in North Korea. Yonhap is now reporting that according to the Seoul-based North Korea Resource Institute (NKRI), North Korea has nearly $10 trillion in underground minerals. As Scott Bruce points out in a recent piece, there are both financial [...]
At the interstice of the ferment over reform and reports of audits and inspections is the issue of property rights. As we observed earlier, the North Korean won is essentially worthless, so what matters is the ability to command foreign exchange. And what—apart from missiles—does North Korea produce that can generate foreign exchange? Minerals. So [...]
Rare earth metals have been in the news quite a bit due to growing concerns about China’s ability to exploit its market dominance in the production of these important inputs to electronics. Leonid Petrov recently created a stir with a piece in the Asia Times titled “Rare Earths Bankroll North Korea’s Future” which argued that [...]
In Kim Jong-un’s recent speech on land management he bemoaned “developing underground resources at random or creating disorder in their development.” According to GoodFriends, the government is following through, “because some powerful government entities – e.g., security departments, law enforcement agencies, Prosecutor’s office and Armed Forces – had ownership but, in its judgment, failed to [...]
Roughly once every few months some news story or report crosses my desk touting the value of North Korea’s mineral deposits. Back in 2009, the Swiss firm Quintermina stated that the country had the world’s second largest reserves of magnesite. A Goldman Sachs report put the sub-soil riches in at $6 trillion. Earlier this month [...]
Standard models of the costs of unification suggest that the amount of investment needed to raise North Korean per capita incomes to 60% of the South Korean level, are in excess of $1 trillion, or roughly equal to South Korea’s annual national income. (In comparison, the clean-up costs of the 1997-98 financial crisis were about [...]
