[“Good Friends” aims to help the North Korean people from
a humanistic point of view and publishes “North Korea
Today” describing the way the North Korean people live as accurately as
possible. We at Good Friends also hope to be a bridge between the North Korean
people and the world.]
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The Price of Land in Rasun Tripled in
Recent Years
Maintenance Work on Wonjongli – Rajin
Road to be Completed This Summer
Judicial Leniency towards Foreign
Investors
The Families of Anti-Japan Freedom
Fighters at the Top of the List for Moving in to 100,000 Residential Housing
Complex in Pyongyang
Young CEOs in their 40’s or 50’s are
Busy Looking for Chinese Traders
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The Price of Land in Rasun
Tripled in Recent Years
Land prices in North Korea’s Rasun
district are reported to have tripled in the past two years. Since last year’s
increase in investment by China and Russia, the land price is rising
accordingly. In particular, after securing the rights to build docks No. 4, 5
and 6 in Rajin port as well as securing the right to the ports for fifty years,
China decided to invest in airports for passengers and freights, a thermal
power plant and railways. An official from Rasun says that the rise in land
price in Rasun was to be expected given the level of foreign interest in Rasun
for investment. “To encourage foreign investment, banks started offering loans
using buildings or land as collateral. This is the most welcome news to the
people who had invested in Rajin by building factories there. It is because even after a lot of land
purchase, factory building, and investment, the rate of return was not too good
and the investors had been suffering from lack of funds. Now, if foreign
investors offer land or buildings as collateral, they can get loans from the
bank. However, they have to pay up to two-thirds of the collateral’s value as
interest.” In Rasun, it is easy to spot restaurants or stores run by Chinese,
and people from Russia or other countries are seen occasionally as well.
Maintenance Work on Wonjongli –
Rajin Road to be Completed This Summer
The
maintenance work on the road that connects Hunchun, China, to Wonjongli and the
port of Rajin is expected to be done by this summer. As of this June, about
two-thirds of the work is completed. The North Korean government planned on
finishing the work by the end of last year, but it has been much delayed
because of bad condition of the road as well as the death of Kim Jong-Il. Furthermore,
there are Chinese workers participating in the road construction and sometimes
there are conflicts between Korean and Chinese workers. One North Korean
manager said, “Korean workers and Chinese workers often have arguments, and
then someone loses his temper and hits the other person. The situation
sometimes develops into a group fight. Just a short time ago, there were two
Chinese workers who got into a fight with a North Korean worker, and the Korean
worker was beaten to death. The Chinese workers, terrified, tried to get rid of
the evidence by disposing the dead body far away, but they were caught by
security officers. Although it is rare that someone dies from these
altercations, there are frequent fights, with strong egos clashing with each other.
It is true that the Chinese are very proud.” Currently, China is paying all the
costs involved in the road maintenance work and re-building of the bridge to
Wonjongli - Rajin.
Judicial Leniency towards Foreign Investors
Last month in Rasun, there was an
automobile accident involving a Chinese citizen and the security authorities were
under a lot of duress. It is because a Chinese investor was involved in it. North
Korea amended and supplemented the “Act on Rasun Economic Trade Zone” which
established provisions for the personal security of foreign investors residing
within the area. Article 9 of the Act states that, “A foreign investor may not
be imprisoned or arrested without a legal basis and their residence may not be
searched. With respect to personal security and criminal matters, the treaty
between North Korea and the corresponding nation, if any, will preside.” This
legal provision was established to attract foreign investment more proactively
so that, in the event of any incident, a foreign investor would not be
interrogated, imprisoned, or arrested without an arrest warrant.
However, cases often arise
where punishment is waived even though a foreign investor was obviously at
fault because of the risk of alienating the foreign investors. The automobile accident which occurred last
month is just one such case. The
automobile accident occurred as an intoxicated Chinese investor was driving a
steep mountain road. While attempting to navigate the tortuous mountain path,
the driver swerved sharply to avoid an oncoming vehicle, and his car ended up
sliding down into the valley. Also in
the car was a Chinese co-worker and two North Koreans; a man and a woman. All men survived with some injuries but the
woman died on the scene. Since the law
prohibits North Koreans from riding a foreigner’s vehicle for personal reasons,
the court, after much consideration, found that the Chinese driver would not be
held liable for the woman’s death.
Although the local governmental party respected the ruling of the court,
it advised the perpetrator to pay a reasonable compensation to the victim’s
family as he was morally responsible for the victim’s death. It was rather difficult to reach a settlement
since the Chinese CEO offered $5,000 for compensation but the victim’s family
demanded more than $10,000. The
litigants were not able to reach an agreement for a month and the case was
finally settled with compensation, in the amount of $10,000, after the governmental
party conducted an aggressive arbitration in June. “In the end, the case was
settled with a large compensation but, had the party not intervened, the
Chinese investor would have been freed without any punitive action. Something like this occurs frequently because
the court is not abiding by the rules but instead tries to avoid antagonizing
China. It seems like this is because
China is prosperous and we receive a lot of financial help from China,” said an
official in Rasun.
The Families of Anti-Japan Freedom
Fighters at the Top of the List for Moving in to 100,000 Residential Housing
Complex in Pyongyang
While the construction is still going on
for the 100,000 residential housing complex in Pyongyang, 1,800 households were
allowed to move in, with a special consideration from the Central Party, to the
model houses. 300 houses were allotted to the families of anti-Japan freedom
fighters, and 500 houses were to the families of merits in the Korean
Liberation War. Remaining 1,000 houses were allotted to the newly appointed
officials of the Kim Jong-Un administration.
A Pyongyang
City Party official said that these model houses are under the jurisdiction of
the Central Party and not under Pyongyang City, and the electricity supply
system is different and the security is very strict. He said, “There is no
power failure due to the separate electricity supply system. Also other
convenience facilities are safely protected. It’s not possible for outsiders to
approach the complex, while residents are not allowed to contact outsiders and
security is tight.”
The
construction of the 100,000 residential housing complex in Pyongyang was one of
the major national projects and was a symbol of beginning of the Strong and
Prosperous Nation and to commemorate the 100th year of the Day of
the Sun, April 15. The project had drawn the attention of the Central Party and
was ordered to be completed by the 4.15 holiday. However, due to the shortage
of construction materials as well as financial hardship, only the outside structure
has been finished thus far. It is projected that for the general residents, the
move would be around the end of this year.
Young CEOs in their 40’s or 50’s
are Busy Looking for Chinese Traders
Many young CEOs in their 40’s - early 50’s who have been recently
appointed in North Korea are eager to visit China. Because most of them had
been to China with other CEOs as a member of delegations, they rarely have
individual relationship with the Chinese traders. They mobilize every method to
get to know Chinese businessmen and start trading business with them. The basic
approach is to obtain an introduction from their friends or colleagues in Pyongyang.
They may even approach acquaintances of friends to get an introduction.
However, due to low credibility, Chinese traders were reluctant to deal with
new faces that replaced familiar ones. An official who had visited China since
last fall describes the difficult situation by saying, “Chinese traders gently
say no, refusing to deal with you. Who would trust and open a business deal
with a person they just met, who they knew didn't have the ability to pay?” Since
a large-scale replacement of officials following the inspection of the
Department of Foreign Trade, the situation seems to get harder.
