N. Korea boosts incentives for foreign investors

SEOUL, Sept. 4 (Yonhap) -- North Korea has taken steps to attract more overseas
investors by scrapping extra land use fees and introducing selective import rules
that can help foreign-owned companies maintain a market share, a Chinese
newspaper said Friday.
According to the Jilin Newspaper, the official daily of China's Jilin Province, a
North Korean official promoted the new foreign-investor friendly measures during
a recent trade exposition held in the city of Changchun.
"We revised pertinent laws and regulations so as to relegate land use fees, which
have been paid annually by foreign-invested companies to their (North) Korean
partners that loan the land," Yun Yong-sok, a senior official at the
international investment department of the North's Ministry of Foreign Trade, was
quoted by the paper as saying at the expo. North Korea's Radio Pyongyang reported
a delegation's trip to the Chinese expo on Aug. 26.
Foreign investors have so far paid annual land use fees to the North Korean
government in addition to a one-off lease payment, which will be still levied
after the revisions.
The measures come as North Korea faces tightening international sanctions over
its May nuclear test. The U.N. sanctions ban North Korea's arms trade, a major
source of income for the impoverished country, and closely scrutinize cash flows
to the North.
North Korea also introduced "state support measures," such as banning imports of
goods that are already produced in adequate quantities within the North by
foreign companies to ensure investors' profits, Yun was quoted as saying.
Foreign companies that invest in science and technology in the North will get
additional tax incentives, but those who take North Korean minerals, timber or
fish abroad will be levied a new "resource tax" to protect the country's natural
resources, Yun added.
Hong Ihk-pyo, an analyst with the state-run Korea Institute for International
Economic Policy in Seoul, said North Korea's investor-friendly measures
"transform its commerce system to correspond with the market economy."
North Korea aims to build a "great, prosperous and powerful nation" by 2012, the
centennial of the birth of the country's founder, Kim Il-sung, and the 70th birth
anniversary of the current leader.
In 2008, North Korea's economy grew for the first time in three years, recording
3.7 percent, but its gross national income still accounted for less than 3
percent of South Korea's, or US$24.8 billion compared to $934.7 billion.
hkim@yna.co.kr
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