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Business Profile
Economy: The Democratic People’s Republic of Korea has a Soviet-style command economy based on heavy industry. The country has rich mineral deposits, including most of the major base metals, as well as gold, silver and tungsten. Since the main industrial infrastructure was developed in the 1950s, development resources have gradually shifted to light industry and latterly concentrated on automation and modernisation. Most trade is conducted with the Russian Federation, Japan and China, where a number of joint industrial ventures have been set up. These measures have only partially compensated, however, for the serious loss of trade with the former Soviet Union, which precipitated North Korea’s economic decline during the 1990s. Estimated at four per cent per annum, this contraction has been compounded by a series of serious floods. Although most evidence is anecdotal – in the absence of detailed official information – it is clear that the North Korean people have suffered severe shortages and, in some areas, starvation. The recent improvement in relations with the South will, Pyongyang hopes, produce some economic dividends but, given North Korea’s current pariah status in Washington, this may take some time. The North Koreans have yet to adopt any of the political or economic reforms seen in China, Russia and Eastern Europe. China is the most likely model, but so far North Korea has gone no further than devaluing the won (a largely artificial measure since the won is not convertible) and cutting the subsidies on some basic goods.
Business: Suits are required. Business transactions will take place outside the office, generally in the evening, as visitors are not allowed to enter offices.
Commercial Information: The following organisation can offer advice: The DPRK Committee for the Promotion of External Economic Cooperation, Jungsongdong, Central District, Pyongyang (tel: 333 974; fax: 381 4498).
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