North Korea is seeking over €6.8 million (USD$7.7 million) in foreign direct investment in a range of projects across the domestic economy, several proposals carried by a Ministry of External Economic Relations-run website revealed on Tuesday.
The projects, which span everything from foodstuffs to transportation, are being proposed by the Korea Foreign Investment and Economic Cooperation Committee (KFIECC), and partners can invest in the form of equity or a “contractual joint venture.”
The most costly plans are for the “reconstruction and modernization” of the Chongjin Bus Factory in North Hamgyong Province.
Potential investors are being asked to contribute €3.5 million to fund “up-to-date processing machineries, heat-painting equipment, loading and discharging equipment, inspection equipment, various steel plate processing equipment, fittings-manufacturing equipment.”
Another of these proposals would see international investors contribute €1.3 million to the Anju Pump Factory in South Pyongan Province – reported by state media last year to be involved in the supply of power pumps to Pyongyang’s marquee Ryomyong Street development.
Also on offer is a one million euro investment in the Nampo Welding Rods Factory, and an unspecified investment in the Pyongyang Tractor Spare Parts Factory.
The proposals do not include details of the projects’ schedule, operational costs, or estimated Return On Investment (ROI).
But their partial focus on the domestic light industry and consumer goods sector is noteworthy: the sector has become a key pillar of the country’s economic development plans in recent years.
DPRK leader Kim Jong Un in his New Year’s Speech called on light-industry factories to “produce and supply more diversified and quality consumer goods with domestic raw and other materials.”
“State-owned enterprises are probably looking for machinery that cannot be produced domestically, and perhaps materials that they cannot currently afford to buy,” said Peter Ward, an NK Pro analyst focusing on the North Korean economy, in reaction to the investment plans.
While investment proposals by North Korea often appear in the country’s open-source internet publications, those projects typically focus on attracting foreigners to the country, such as hotels, restaurants, or casinos.
A recent proposal uploaded on the same Ministry of External Economic Relations-run website last week, for example, saw the Korean International Exhibition Corporation (KIEC) say it was seeking international investment for plans to construct a new exhibition center and a 30-story hotel in Pyongyang.
“These investment opportunities are particularly interesting because they include enterprises that largely target the domestic market,” Ward said.
“Most of the proposals also reference ‘satisfying domestic demand’ as the primary purpose of investment.”
One proposal, he pointed out, seeks one million euros’ foreign money for the Sinpo Canned Fish Plant – close to the country’s “largest fishing complex.”
“It is also known to be closed to tourists for military reasons,” he said.
That project hopes to upgrade the plant’s technology and equipment, the proposal says, to assist the factory in “meeting domestic and international demands.”
It’s not precisely clear what “international” demand could refer to: United Nations Security Council resolutions currently ban the export of seafood from North Korea, once worth USD$295 million.
International sanctions will likely pose other hurdles to potential investors, with last year’s Resolution 2375 prohibiting the setting up of “joint ventures or cooperative entities” with the North.
Featured image: Rodong Sinmun
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