Record 180 participants in Q1 2014

Choson Exchange teammate Nils and a workshop leader in front of a funky restaurant decoration

Choson Exchange teammate Nils and a workshop leader in front of a funky restaurant decoration

Provincial Development

Two weeks back, our team endured a bumpy 4-hour ride to Wonsan from Pyongyang. We were heading there to conclude our fourth and final workshop in the country for March. Key topics focused on economic zone development, improving the environment for businesses, and on provincial development. Workshop leaders cautioned that initial investment amounts from outside might be small, but emphasized the importance of starting with small investments and recognizing it as a learning journey for local officials and for investors.

We started 2014 strong, completing 4 workshops in North Korea in the first four months and 1 workshop overseas. Workshops were split between the provinces, attracting participants from the provinces, and Pyongyang. Over the 5 workshops, we covered provincial development, improving the business and investment environment, entrepreneurship, and fiscal and monetary policies. In total, 180+ participants took part in programs in the first quarter of 2014.

Workshop leaders take a break in the provinces in what we think is the funkiest hotel - the Dongmyol Hotel in Wonsan has an atrium above the atrium on the fourth floor.

Workshop leaders take a break in the provinces in what we think is the funkiest hotel - the Dongmyol Hotel in Wonsan has an atrium above the atrium on the fourth floor.

During the workshops, I was also heartened to meet researchers who were interested in learning how to build an ecosystem to commercialize IT research. In North Korea, there is a tendency to focus on technical skillsets at the expense of figuring out a market and a business model for IT products. I am glad to see that there is recognition at least among some people that they need to balance technical skills with commercial savvy.


Women in Business

In particular, we would like to highlight a workshop we did for our Women in Business program. As we mentioned, we are in the last phase of this program. This program was set up to target female managers in the growing small and medium enterprise segment with training in business management skills and entrepreneurship. In March, we had 45 participants in the program, with 84% being females. This is the highest ever percentage of females we had for an in-country workshop, reflecting continued interest in this unique program. The female participants were incredibly bright, curious and full of questions. Our main regret was that we were unable to extend the length of the workshop to answer all those questions, despite requests from North Korean partners to do so.

Snowflake selling exercise had our Women in Business actively running up and down the workshop space

Snowflake selling exercise had our Women in Business actively running up and down the workshop space

Going forward, given limited funding support for this program, we are likely to start reducing the frequency of workshops for the Women in Business initiative. We expect to continue maintaining a low level of activity for the program. We will continue with other programs focused on policy and entrepreneurship, but look forward to having an active program dedicated to women in business again at some point. We would like to thank our workshop leaders, sponsors, volunteers and partners for the work we have been able to do this quarter.

Customer Loyalty Cards and Bottled Makkoli - More Marketing Tools Appearing

Pyongyang's Haemachi (Sunrise) restaurant and retail complex now has a new beer bar, serving Paulaner beers, almost certainly brewed at one of China's many Paulaner brewpubs. (Though it was claimed by staff that this was not a joint venture - "ha ha, everybody asks that!")

Beer. Paulaner Beer.

Beer. Paulaner Beer.

Not packed on a Saturday night.

Not packed on a Saturday night.

Despite being really chilly (in March) and serving beer that is basically inferior to many of the locally brewed options available, one thing did catch our eye:

There is now a haemachi-wide loyalty card, which operates as you'd expect: keep spending, earn points, use the points for things later.

They have thoughtfully included foreign guests in this scheme, as well.

Apparently, Rakwon (Paradise) Department Store was the first shop in town to have a customer loyalty program some years ago. They increasingly appear to be on the losing end of the retail boom in Pyongyang, however, as newer, glitzier places pop up. Rakwon appears more and more a vestige of the 1980s.

It has been moving into processed foods - another boom industry - and has begun bottling its beer and makkolli. Actually, this author would go so far as to say it might be the best makkolli in the world. So loyalty cards aren't everything. You still need a good product.

Simply the best:

No additives or preservatives here, friends.

No additives or preservatives here, friends.

More Taxis

A new fleet of taxis can be seen around town. We're told that the ranks of taxis in Pyongyang have now swelled to over 1000 cars, a dramatic increase in less than a year. The newest company in the game sports handsome maroon and green BYDs and like all the others, competes for customers outside hotels, universities, train stations and other popular shopping and leisure destinations. 

Easier to catch a cab than in Beijing, one suspects.

Easier to catch a cab than in Beijing, one suspects.

We couldn't find out to whom the new maroon cabs belong, but it is a different company to the one that runs the "Beijing Taxis" that popped up last year modestly in the spring, but then grew to a fleet of 800 by the end of the year.

You'll never be "marooned" in Pyongyang again! "Marooned"! Ha!

You'll never be "marooned" in Pyongyang again! "Marooned"! Ha!

There are also new red taxis dotted around town, in smaller numbers, but we're told those are not a new company, just upgrades for older fleets. Competition appears to be dragged the older, established players to improve their service, it seems.

Shiny.

Shiny.

Will North Korea's latest investment agency last to 2015?

(August 2014) Construction continues in Rason, at the oldest North Korean Special Economic Zone, with the help of the Chinese

(August 2014) Construction continues in Rason, at the oldest North Korean Special Economic Zone, with the help of the Chinese

In March last year, DPRK approved a new Special Economic Zone (SEZ) policy that saw the designation of multiple SEZs across the country. This was unveiled to Western press with relative fanfare through a conference organized in Pyongyang in October that year. Supposedly spearheading this initiative was the new State Economic Development Commission (SEDC). As of early this year, it still remains uncertain how exactly the institutional setup for SEZ management will look like, with multiple layers of institutions and authorities claiming some affiliation with zone management and investment attraction for the zones. For an excellent summary of SEZ initiatives in DPRK, check out Brad Babson’s piece in 38North.

The SEDC appears to be a mishmash of several departments that were moved over from the Joint Venture & Investment Commission (JVIC), alongside the repurposing of a body under the Cabinet known as the State Economic Development Bureau. The SEDC Chairman is reportedly Kim Ki Sok, who previously was a vice-Chairman at JVIC.

Given the fluid institutional basis for many of the new economic institutions in North Korea, it is even possible that the SEDC and JVIC could be merged again at some point in the future.

From a policy standpoint, it is not immediately obvious that a separate and new organization should manage SEZs. After all, if JVIC is pitching itself as a one-stop shop for investors, investors should have access to information on all the potential investment avenues. Was the SEDC carved out of JVIC because investment amounts attracted by JVIC did not match up to expectations? Did ambitious individuals, who decided they could carve out their own economic fiefdom, set up the SEDC, or was it founded based on a conscious policy of strengthening development initiatives and empowering investment attraction efforts? Should efforts focus on strengthening existing investment attraction bodies, rather than the constant reshuffle and establishment of new entities? These are key questions that we need to study to understand the trajectory of North Korea’s economic initiatives. Both JVIC and SEDC, alongside many other entities, claim overlapping jurisdictions over investments into these new zones.

Supposedly, the SEDC has undergone significant management changes since Jang’s purge. Jang Sung Taek was rumored to be closely affiliated with the SEDC’s formation. Was this true? And if so, did his execution permanently impair this new entity? What does this mean for the future of SEDC? Will a new team take over its management and be given significant powers, or will SEDC be winded down or reabsorbed back into JVIC?

Let’s see what 2014 brings for this latest contender in the investment game. The field is often filled with high-profile contenders who have often faded into obscurity. Remember the Taepung group?

Star Cluster - the Cheese Place

There is a pretty darn good fondue place in Pyongyang - Cafe Pyolmuri (Star Cluster, in English). OK, so this isn't exactly news, in the sense that it isn't new or important in any grand sense, but it is both of those things to us, because sometimes when you're in-country for awhile, all the restaurants start to look the same. 

"A Group of Stars", not red, not five-pointed.

"A Group of Stars", not red, not five-pointed.

Pyolmuri has been around for awhile, we'd just not heard of it. Indeed, TASS reported on fondue back in 2011

And apparently, Adra, an aid organization run by Swiss Adventists, opened a Swiss café a few years ago, serving cheese fondue. We're not sure if this is the same place, but since this restaurant has plenty of booze, we'd have to guess that maybe it isn't an Adventist joint.

The genial owner, who has business cards in English claiming an Italian restaurant specializing in dairy foods, told us that Italian chefs had trained the local staff. Indeed, their pizza was pretty tasty, though not as good as the fondue. (Still, pine nut, mushroom and spinach is a pretty cosmopolitan option.) One of our Swiss trainers on our last trip to Pyongyang was even allowed to poke around in the back to see how they do it. He was particular about fondue, but gave his official stamp of approval - "It's not home, but pretty good for what they have to work with."

Something in common with regional friends - see the Pictures of Asians Taking Pictures of Food Tumblr

Something in common with regional friends - see the Pictures of Asians Taking Pictures of Food Tumblr

They use a white wine base (no Kirsch around these parts) and a blend of imported and local goat's cheese, which had that pleasant 'goaty' tang to it. We're not sure where the goat's cheese comes from as there are several goat farms in the country. The DPRK began focusing on goat husbandry in the early 2000's to provide dairy, inspiring the "All Families Should Extensively Raise Goats" campaign. A decade ago, GRS started work on a goat farm, too. 

As part of the campaign, Kim Jong Il made numerous visits to goat farms in the 2000s. Here's a video about about a 2008 visit, in case you are not very busy for the next 11 minutes:

Whatever one thinks of the 'extensively raise goats campaign', the cheese sold at Star Cluster to take home is quite good, if not cheap: 17 USD per kilo.

Straits Times - Linking the Hermit Kingdom

Full-page Straits Times spread on Choson Exchange and Geoffrey See.

Full-page Straits Times spread on Choson Exchange and Geoffrey See.

The Straits Time ran a recent piece on Choson Exchange's work and on the background of Managing Director Geoffrey See. Worth a read, especially if its a slow news week. After all, there is only so much North Korea election news you can read right?

 

Straight out of university, See has made some 30 trips to North Korea over the past five years, taking 35 international experts to conduct business and legal training in Pyongyang and Wonsan to some 700 North Koreans. He has also brought over 40 high-potential North Korean managers, bureaucrats and entrepreneurs to Singapore for training.

He's done it mostly pro bono, sleeping on couches, eating cheap street food and going for months without salary. At the end of 2012, he even left a top-dollar consulting job with Bain & Company in Boston to do this full-time.

The founder of the Singapore-based non-profit Choson Exchangelives for his dream: to see North Korea eventually integrated into the international system, its economy prospering and its people enjoying a higher standard of living. But his means to that admittedly bold end are more practical than provocative. He seeks to provide North Koreans with the knowledge and tools to improve the Hermit Kingdom's economy and enable it to interact with the global capitalist system, should it, in time, decide to.

2014: Time for website updates

Welcome to Choson Exchange’s new site!

Give the leanness of our operations, we have always thought about revamping the website but never got around to making it a priority. Thanks to the work of a volunteer with Choson Exchange, we now have an amazing new website, with the following features:

  • Focus on our blog: Our blog have been a primary forum for us to share the work we do, and greatly enjoy, in North Korea training young professionals. We have always believed that our work provides us a different angle from which to view the country and its people. We hope that the stories from our work, or our perspective on Korea-relevant issues, contribute to a deeper understanding of an emerging generation in the country.
  • Easier navigation: You can now navigate to all pages of our site from the top banner navigation, which exists on every page.
  • Community discussions: We welcome the community to engage in meaningful discussions on our site, comments may be written under each blog entry.
  • Optimized mobile views: Our new site format makes it easier to read on mobile devices. Read the Choson Exchange blog on the go!

Our team spent a considerable time curating the kinds of data and information to help others understand the work that we do.

Volunteers are the foundation of our work, and a key reason why we can do so much with so little. Our website volunteer has also helped us with various program strategies, and played a role in drawing up the Women in Business program. We are glad for her support, and for the support of other passionate volunteers and workshop leaders.

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Rason and Beyond: SinoNK's Tumen Triangle Project

2013 was the first year that we did not visit the Rason International Trade fair, not out of a lack of interest, but when invitations go out barely 3 weeks before the event... Indeed, trade fair promotion, integration beyond the borderlands and investor expectations are issues on which we'd like to work with Rason officials and business people.

As Geoffrey puts it in the most recent edition of SinoNK's Tumen Triangle Project, "local officials there argued that they were at the forefront of knowledge and experimentation in this area, given their long-history as a special zone." Yet, as with so many other projects in the DPRK, "despite agreements to start programs, nothing ever happened."

This trip also featured CE enjoining locals that in the future we should work together and these proposals met with positive responses. Rason's Yanji rep, at the very least, "was excited at the prospect of training, and at our focus on young professionals. He said, 'you are young. I am young. We should be working together!'"

This edition of the TTP also includes fascinating contributions from a variety of sources. Of particular interest is an article by two longtime UK diplomats, Warwick Morris and James E. Hoare, who describe a trip Yanbian in 1990 at a time when Britain "neither recognized the DPRK nor had any form of diplomatic relations with it."

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Pop-Up Pyongyang: Training Locals through Small-Scale Projects

(This is part 2 of a two part series by Calvin Chua. The first part can be found here.) Apart from delivering basic infrastructure, such as smooth roads, constant electricity and water supply, leaders in the DPRK need to rethink whether large-scale physical projects, especially for the tourism and service sector, are the only way to achieve their grand visions.

Instead of looking at fulfilling big quantitative targets, perhaps it is time they look towards small-scale quality interventions within the existing city as a possible alternative. These small projects could include short-term pop-up spaces that could host restaurants, cafes and exhibitions, common elements within the developed world but currently absent in North Korea.

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