North Korea is gaining fame among international investors. The country experiences a rapid growth in the number of entities who are attracted by investment opportunities in the country. Investors in the DPRK unanimously agree, that a lasting peace, stability, and the North Korean Governments strife to resolve the peninsula´s problems peacefully gives investors a higher confidence in North Korea as an investment opportunity.
Jon Sung Hun is the General manager ofPugang Pharmaceutical Company Ltd, in the DPRK
One of the main concerns for foreign investors and for potential new investors is the risk of war. Six decades of tension between the North and the South, fanned by geopolitical dynamics, create the impression that the risk for a war on the Korean peninsula is very high. Experts don´t necessarily agree.
“Some people say that war is likely to break out in North Korea, but this does not happen to be true”, said Robert Otto Schwammle, the President of Panchemie Co.; Ltd; Switzerland. Schwammle said:
“Peace is guaranteed by a strong defense power or a strong war deterrent. Everybody knows that North Korea has very strong armed forces, centered on nuclear armaments as a strong deterrent”.
Schwammle said that nobody will dare to launch an aggression against North Korea, although we see stubborn, provocatory acts from the sides of South Korea and the United States, saying:
“Moreover, the North Korean government exerts constant efforts to provide a lasting peace, e.g., they are trying to convert the Armistice Agreement into a durable peace agreement”.
Schwammle describes the confidence of the North Korean population in security and stability and the populations confidence in the policy of deterrence, saying:
“This is why, even when the artillery booms are heard from South Korea, the children in the North continue their jolly romps without fear and the people vigorously continue their work chanting happy songs as ever. The fast ongoing and huge development projects for the people´s entertainment and tourism, e.g., the Masikryong skiing mountain, the Mirim horse racing course, etc., serve as another evidence of the fact that a lasting peace has nested in North Korea”.
Schwammle´s assessment and description are corroborated by the fact that the queue of investment applicants is constantly growing despite the frequent anti-North war exercises on the Eurasian continent.
Another precondition for the successful development of an investment-attracting zone is a high degree of political stability. Nobody wants to invest in a region with a low degree of political stability, characterized by frequent strikes, anti-government demonstrations, work-stoppages, fighting between factions etc. A situation, in which powerful globalist stakeholders play one party and segment of a country´s population against the other, paralyzing the country to serve their own interests cannot happen in the DPRK.
Western propaganda tends to describe a one party system, such as practiced in the DPRK or in China as “dictatorial” without referring to the democratic processes within the government, within the military, within the party, the worker´s organizations and within other institutions.
Arguably, a one party system is as “democratic” as many democracies or even more so. North Korea has a high degree of political stability and its government has the approval of the overwhelming majority of its people. Gungaa Bayarjargal, the President of the Asia-Pharma Co., Ltd, Mongolia, said about the DPRK:
“As far as the degree of political stability is concerned, North Korea has the highest in the world. When the peace of North Korea and Asia was threatened, the great Comrade Kim Jong Un went all the way by a small wooden boat to the most dangerous place that nobody knew when to burst, where, with a child in his embrace, he took an important measure to safeguard the peace, and on his way back he gave on-the-spot guidance to the projects for the people’s wellbeing. The impregnable unity of the North Korean people around Comrade Kim Jong Un, an incarnation of love of humanity, serves as the greatest guarantee of the highest political stability and the eternal peace.”
Understanding North Korean culture and politics is not always easy for a foreigner. Especially foreign investors from western countries can have difficulties understanding the relationship between the government and the people and vice versa.
One way of describing it is, that the government regards the people as a haven and the people in turn, have a high degree of trust in the government´s decisions. Therefore, such problems as strikes, anti-government parades and work-stoppages are literally non-existent in the DPRK, and foreign investors have no need to worry about such distractions. Moreover, investors don´t have to worry that North Korean companies would unilaterally change or cancel contracts with their foreign partners.
Finally, an investment-attracting zone is characterized by a high degree of credibility. The “Credit first policy” is an important policy which the DPRK government has long been advocating in the field of foreign economic affairs. To implement this policy, the government grants rewards to entities of high credibility and criticizes or reprimands those of low international credibility.
It has simplified to a large extent the formalities to pass the goods through the frontier, minimized the duration of such formalities and optimized the quality of the goods, thereby making their commodities more competitive in the world.
Especially, the Government’s measures taken for concessionary encouragement, protection and guarantee of compensation for the foreign enterprises entering the DPRK, greatly contribute to upgrading the credibility of this country.
Next, to assume optimum attraction for investments the zone should have already attained economic enrichment by itself without previous large aid and investments from the outside; the level of common knowledge of the people there at should be high; and the frequency of common crimes should be at the minimum or none.
Over the last 60 years, the DPRK has built up on the ruins of war, a powerful self-reliant national economy and has made great scientific progress. The DPRK has developed nuclear power and successfully developed the capability to launch and artificial satellite into earth´s orbit.
Although it remained for a long time a victim of constant economic sanctions of the United States, to say nothing of large aids and loans from outside. The economic successes of the DPRK is attributable to wisdom in political leadership and the superiority of the socialist economy, which endows the country with resilience against measures such as sanctions. The socialist economic model also endows the country and its economy with resilience against the capitalist systemic weaknesses which follow in the wake of speculations which have been so detrimental to the United States and the world economies.
Evidently, the ups and downs of capitalist economies have inherent risks as well as contradictions. A few years ago, in the United States, the stocks of the building industries were foreseen to jump to astronomical heights, so astronomical amounts of private, public and governmental securities were issued and sold. Speculation and criminal mismanagement have caused the bubble to burst in 2007, plummeting the world into a global financial crisis which is still being aggravated by aggressive quantitative easing policies and bailouts.
The U.S. American City of Detroit, the domicile of General Motors fell into bankruptcy and all the 50 States are suffering from the financial crisis. The annual financial deficit of the United States exceeded 1 trillion US dollar for 4 successive years and an alarming number of US citizens are dependent on social welfare and food stamps, and unable to cover medical bills. The total assets of billionaires in the USA reached 2.05 trillion last year, when it rose by 8 % as compared to the previous year. Speaking in terms of stability, the social impact of this self-inflicted crisis is bound to have long-lasting and destabilizing effects on the United States, which have not even begun to show, but which are becoming ever more obvious and alarming.
In the DPRK on the other hand, the perspectives and values of enterprises and commodities are correctly forecast on a scientific basis, and the economy rotates following the scientific, objective and dynamic plan worked out through wide discussions with the producers. Despite some economic hardship, such phenomenon as crisis, excessive production, random issuing of securities etc. never happened in the DPRK, and the entire production power serves the economy in the most rational way.
20 years ago, for example, the North Korean Pugang Pharmaceutical company correctly foresaw that the world-wide demand for medicines would rise to very high levels and started to concentrate efforts on developing world-class quality medicines. The Kumdang-2 injection and the health supplement “Royal Blood-Fresh” were developed and became the world top-seller. The products are being mass exported to over 30 countries. This is attributable to the government´s politicy, which is based in a love of humanity and strife for the development of the country.
With regards to space technology, the DPRK has manufactured, launched and retains several artificial satellites which are to 100 % based on technology that was developed in the DPRK. With regards to industrial development, most industries are modernized on the CNC basis, and there are many other examples that the North Koreans have reached high standards and a high degree of competitiveness in the fields of high-technology.
Moreover, the population of the DPRK enjoys a high level of general education and minimal crime rates. All citizens of the DPRK enjoy 12 years of free and compulsory education, which benefits the people, the country in general, as well as foreign investors who find a population with a high level of education in North Korea. Speaking with foreign investors in the DPRK, their general statements could be summarized as:
“Look at the Rajin-Sonbong Zone and the normalized Kaesong Industrial Zone. The number of investors who want to make profits by investing in North Korea shall grow faster than the investors`competition to invest in North Korea shall turn fervent”
Ultimately, investment and cooperation across borders, including the inner Korean border will in itself contribute to stability, security and a lasting peace too. During his 2013 New Year’s speech, the DPRK head of state said that the DPRK would be transformed into a regional economic powerhouse. The United States policy of illegal sanctions fails at stopping this progress, as does the policy of tension and annual returning military exercises and bellicose propaganda.
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Co-authored by Jon Sung Hun and Christof Lehmann.
Jon Sung Hun is the General Manager of Pugang Pharmaceutical Co., Ltd, in the DPRK and an expert on the DPRK´s business and investment policy. Christof Lehmann is the Editor-in-Chief of nsnbc international and has been working as independent political adviser for over 25 years.
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