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Tentatively, North Korea Solicits Foreign Investment and Tourism 投稿者 招き猫 日時 2002 年 2 月 20 日 17:12:15:

Tentatively, North Korea Solicits Foreign Investment and Tourism     By JAMES BROOKE From NY・Times


ONJUNG-RI, North Korea ・The display cases are in place, the tourists are here, their wallets filled with American dollars. Only the perfumes, whiskey and cigarettes are lacking to open the first duty-free shops in North Korea.

One hurdle remains to foreign investment. "If we sell $1 million a month, how do we get the money out?" Thakor P. Sharma said from Singapore when asked about the delay in opening his nine duty- free shops across North Korea. He expects to resolve the money-transfer issue this spring says he urges his North Korean negotiators to keep politics to one side, lecturing them that "money talks."

A new language of foreign investment, trade and tourism is filtering into North Korea, long written off as a granite-hard bastion of communism. Over the last 18 months, this "hermit nation" has gone on line with an e-mail service and signed its first onshore oil concession with a foreign company. In the months before North Korea became a charter member of President Bush's "axis of evil," this long-reclusive nation established diplomatic ties with 14 Western nations.

Although President Bill Clinton eased most restrictions on trade and investment with North Korea in June 2000, large American companies shied away from conducting business after efforts to establish diplomatic ties foundered at the end of the Clinton administration. Although Americans are free to travel to North Korea, President Bush has taken a hard line, arguing that the nation's missile exports and biological warfare capabilities are a threat to the United States.



James Brooke/The New York Times
In recent months, North Korea has taken tentative steps to welcome tourism and foreign trade. South Korean tourists pause on a hike into the Kumgang Mountains of North Korea.





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[On Tuesday, Mr. Bush arrives in Seoul for a two-day visit to South Korea. On Monday, in Tokyo, he starkly contrasted the divided halves of Korea, saying at a news conference: "On the one side of a parallel, we've got people starving to death, because a nation chooses to build weapons of mass destruction. And the other side, there's freedom."

[Last Friday, Mr. Bush said that if North Korea stopped exporting missiles, "we would welcome trade." In an interview with a Seoul paper, Joongang Ilbo, he added: "We would help welcome North Korea into the family of nations, and all the benefits, which would be trade and commerce and exchanges."]

This year, North Korea will get limited cellphone and Internet service and hold an arts festival and three trade fairs. It will also have a modern hotel, partly foreign-owned, open in Pyongyang, the capital ・all to attract foreigners.

"They are after tourism," said Nick Bonner, whose company, Koryo Tours, is offering package tours from Beijing for $1,590. After Mr. Bush lumped North Korea with Iran and Iraq as forces of evil, Mr. Bonner predicted that Americans would not be issued visas to attend the arts festival.

"North Korea has no choice," said Bradley O. Babson, a Washington economist who has studied North Korea for the World Bank. Referring to the end of communist ideology in China and Russia, he explained: "The neighborhood has become market-oriented."

With China's booming economy exerting a growing influence on North Korea, direct flights are to start next month linking Pyongyang with Dalian and Shenyang, two commercial centers an hour away by jet.

At the prodding of Russia, North Korea's largest creditor, plans are advancing for two big projects: a $250 million upgrade of the main rail line to allow goods to be shipped from Seoul to Europe, and a natural gas pipeline to link Siberian gas fields with South Korea.

North Korea may hold the key, but South Korea is the prize. South Korea has about 48 million people ・more than twice as many as North Korea ・and its economy, the 13th largest in the world, is 25 times as big. South Korean auto workers produce as many vehicles in two eight-hour shifts as North Korea turns out in a year.

After losing Soviet subsidies in the late 1980's, North Korea's economy contracted by about half, and its debt soared to around $12.5 billion. It is now heavily dependent on food and oil donations from the United States, South Korea and Japan.

But investment is trickling in. This spring, work is to start on a 2,317- square-mile oil exploration and production concession in North Korea, won last fall by Sovereign Ventures of Singapore. In July, cellphone service is to start under a joint venture of Loxley Pacific of Thailand and North Korea's telecommunications ministry. Human rights groups are proposing that foreign companies follow a code of conduct similar to the Sullivan principles that prepared South Africa for a post-apartheid society.

"I saw some Americans of Korean origin looking at oil and gas prospects," said Glyn Ford, a British member of the European Parliament who was in Pyongyang last summer for the opening of the British embassy. Given North Korea's power shortages and rundown ports, he said: "At the moment, very cheap labor is the only thing the North Koreans have going for them."

With more and more delegations traveling to Pyongyang, the number of foreign companies at this May's trade fair is expected to be triple last year's level. Two new fairs will be held this year, one sponsored by the European Union, one focused on information technology.

"Business people are feeling more comfortable now that the diplomatic platform is in place," said Roger Barrett, managing director of Foreign Business Development Associates, a Beijing company that took seven groups to North Korea last year. Mr. Barrett, a Briton who plans to open an office in the North Korean capital in April, said: "When you go around the office buildings in Pyongyang, you would be surprised by the number of European and Asian companies. There are about 20 or 30."

In 2000, most restrictions on American trade, travel and investment were lifted. John J. Schwartz, a vice president at Wente Vineyards of California, said the business mood he encountered recently in Pyongyang reminded him of market openings in Russia, Vietnam and Cambodia.

"In each newly developed market, they see capitalism as a fast buck," said Mr. Schwartz, who plans to sell wines in Mr. Sharma's duty-free shops. "It's always great to be the pioneer, the maverick ・but they are the ones that often get burned."

While visiting executives may be heartened to find a DHL counter in their Pyongyang hotel, the pitfalls of being a pioneer can be seen in this tourist enclave 130 miles to the southeast.


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