The European Union has become a very crucial political and economic variable in Korea and Northeast Asia, since the members of the European bloc began to actively provide humanitarian aid to North Korea in the mid-1990s. They have suggested ways to make progress in the North Korean nuclear issue recently, showing keen interest in investment in the reclusive nation. Here’s Dr. Han Wan-sang from the Hyundai Research Institute to explain more details about the EU’s investment in North Korea.

The European Union seeks to increase investment in North Korea for five major purposes. It hopes to secure enough resources, develop key industries there, prepare for the possibility of market expansion, take advantage of the North’s cheap labor and use its tourism potential. The EU is making brisker investment in the areas pertaining to the first three purposes.

Korea Business Consulting, a British consulting firm, set up its branch office in Pyongyang in 2006 and the Orind group, also based in the U.K., is in the process of developing magnesite jointly with North Korea. In addition, Lafarge Group of France, the world’s largest cement company, acquired Egyptian firm Oracom Cement, which owned a 50-percent stake in Sangwon Cement Company in Pyongyang. Some European companies have already invested in various North Korea-related businesses, including developing basic facilities, modernizing telecommunication networks and railroad systems, and facilitating processing on commission and tourism, while vigorously collecting information about North Korea investment and expanding consulting business. So then, why has the EU become so active in North Korea investment?

North Korea will have to open up its society and move toward a market economy sooner or later in order to resolve its chronic economic difficulties. Currently, North Korea is rich in underground resources. The communist nation has five to six mineral resources, including magnesite, that are included the world’s top ten list in terms of deposits. North Korea’s resources market has enormous potential. Also, North Korea’s social overhead capital has yet to be established completely. If a particular country invests in this area first, it will be able to set its own technology standards earlier than any other investor. For those reasons, the EU is willing to make prior investment in North Korea, though it may be insignificant, having the potential of the North Korean market in mind.

The EU began to show interest in the North Korean market back in 1994. At the time, the EU executive committee adopted a report entitled “Towards New Asia Strategy” to strengthen cooperation with Asia. It has since taken a proactive stance in dealing with political and security issues in Asia. The EU has been maintaining channels of political dialogue with Pyongyang, even while stressing the principle of North Korea’s nuclear dismantlement and leading the passage of the U.N. resolution calling for human rights improvement in the North. In this way, the EU has continued engaging with North Korea, visibly and invisibly.

The EU-North Korea relations started to take shape around 1995 when the EU began providing humanitarian assistance to the North. The EU participated in the Korean Peninsula Energy Development Organization project from 1996 and started supplying food aid to the North the following year. Beginning 1999, the EU focused more on fertilizer aid and the test operation of collective farms in the isolated country. Both the governments and companies in Europe have increased trade with North Korea since 2000, though at an insignificant level. With the eruption of the North Korean nuclear crisis, however, authorities-level dialogue between the EU and Pyongyang seems to have slowed down. Still, companies have continued increasing trade and investment in the North.

The EU has been expanding its presence in North Korea since the two sides established formal diplomatic ties in May of 2001. The EU has become Pyongyang’s third largest trading partner, with the North’s trade with the EU amounting to 234 million dollars a year. As Dr. Han explained before, many European companies interested in North Korea investment concentrate their effort on securing resources in the socialist state. Many experts view North Korea as a rich repository of mineral resources that still remains unexplored. Amid the increasingly intense global competition for energy, the EU is expected to further increase investment in the North’s underground resources. Dr. Han has more.

The European companies don’t seem to expect their North Korea investment to produce results in the couple of years to come. Only after the nuclear issue is settled and the political and economic situations become stable in the North, will the companies reap the fruits of their current investment in North Korea. The EU will then be able to secure rich mineral resources in the North, which will be the biggest fruit. Exports of technology and facilities chosen by the EU in the process of developing the North’s basic industries and social overhead capital will be another significant outcome. In this respect, North Korea is emerging as a promising market with huge potential.

Companies of the EU seeks to secure North Korea’s rich resources over the long term, rather than to produce short-term profits. This is their major investment strategy. In a bid to help North Korea improve its economic fundamentals, the EU has invited North Korean officials since 2002 to offer them English training and hold workshops related to a market economy as well as various other economic forums. North Korea’s economic infrastructure is very poor at present. However, a huge amount of money is expected to pour into the North’s key industries, in line with the integration of the North into the international community. Pointing out Seoul’s inadequate effort toward North Korea investment, Dr. Han stresses the need for brisker cross-border investment.

South Korea has aggressively explored overseas resources, like drilling for oil in foreign countries. Why can’t South Korea develop resources just across the border? It wouldn’t be desirable to delay economic cooperation with North Korea due to political reasons. Even though the government may be hesitant to engage with Pyongyang politically, it should arrange an adequate economic basis on which companies can move quickly to the North. Regardless of the political uncertainties, including the nuclear standoff, it’s necessary for South Korean companies to preoccupy various development projects in the North, which will prove greatly beneficial.

Amid the quiet yet fierce war of resources, North Korea’s rich depository of mineral resources is emerging as a very attractive alternative. Attention is now being paid to which country will be able to set foot on the untapped North Korean market first. 　 [Interview] Literary Magazine Jointly Created by North and South Korean Writers
Literary figures from North and South Korea launched a literary magazine on February 5 this year, the first such occasion since the division of Korea. The magazine contains works of poets, novelists and critics from the two Koreas and overseas. Despite North Korea’s nuclear threats and the stagnant inter-Korean ties, the Korean writers were able to give birth to the magazine through constant meetings and dialogues. Today, we’ll meet with Jeong Do-sang, official of the South Korean side of the June 15th Inter-Korean Literary Society, who played a big role in launching the magazine. Let’s listen to Mr. Jeong talk about the significance of the new magazine.

I think people in North and South Korea had few opportunities to read literary works from the other side of the border. A number of North Korean works were introduced to the South late in 1989 when there was a campaign of learning North Korean literature correctly. But the works were mostly read by progressive student groups, not becoming known to the general public. Since then, North Korean works have seldom been found in the South. I’m glad to contain both North and South Korean works in this newly launched magazine. Readers can get a peep at the daily lives of ordinary citizens in both sides.

How did the literary works of the two Koreas manage to cross the line of division? Writers from both sides got together in October of 2006 to organize the June 15th Inter-Korean Literary Society. They promised to expand their literary scope to the other part of the inter-Korean border, and the joint magazine is the first fruit of their agreement. The first edition of the magazine includes ten poems and three novels from North and South Korea as well as two poems and one novel written by ethnic Koreans. It is a hard-earned outcome after a number of meetings and extensive discussions. It was pretty challenging for the writers to bring together the literatures of the two Koreas, which have evolved in antithetically different societies.

South Korean writers selected works that illustrate the everyday lives of citizens. North Korean works were supposed to be chosen by Northern writers. “21 Rounds of Gunfire” written by Han Woong-bin, for example, describes how North Korean soldiers and citizens become one. It doesn’t contain any ideological elements or propaganda whatsoever, but its main idea is based on the communist nation’s military-first policy. South Korean writers were rather circumspect about including the work in the magazine, so they exercised the veto. The North Korean side did the same thing for South Korean work “Crossing the Border” by Jeon Seong-tae. The novel revolves around a young man crossing the border between Cambodia and Thailand and briefly portrays his love with a Japanese woman. I imagine it was hard for North Korea to accept such a story.

The writers had much difficulty in selecting appropriate literary pieces. They also failed to receive funds from the South Korean government. So, the launch of the magazine progressed rather slowly, forcing South Korean writers to receive pre-orders of the magazine to collect funds. Their efforts and support from various social and cultural groups have finally produced the first-ever literary magazine jointly created by North and South Korean writers.

The magazine will consist of new works from now on. South Korean writers must take North Korean readers into consideration when writing, and vice versa. By doing so, they should be free from their own boundaries. That is, South Korean writers refrain from commercial or sensational pieces but focus more on literary works reflecting the genuine aspects of life. North Koreans, for their part, should stay away from military-first politics or blind worshipping of their state leader. They can instead describe in depth how North Korean citizens actually lead their lives. If writers of both sides manage to avoid employing excessive political elements in their works, they will be able to initiate two-way exchanges in their minds. I have high expectations for this new paradigm of inter-Korean literary exchanges.

Here’s hoping that the launch of the new magazine will help broaden the literary scope of both North and South Korea.