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North Korea: The Country That Never Pays You Back


"You don't get back to international credit markets by showing utter contempt for creditors," say experts.



The state-run Mansudae Overseas Project Group of Companies "sends renowned artists abroad for the production of peculiar art objects," according to one Chinese source. "It has created a large number of monuments, panoramas and interior decorations of hotels and other service facilities, as well as decorative sculptures for parks in Zimbabwe, Togo, Benin, Egypt, Algeria, Ethiopia, Malaysia, and so on."

Mansudae has reportedly earned almost $200 million from its African projects since 2000, with the most well-known example being the African Renaissance Monument in Dakar.

"Only the North Koreans could build my statue," Senegalese President Abdoulaye Wade, told the Wall Street Journal in 2010.


Because they work cheap.

"I had no money," Wade said, pointing out that North Korea was willing to accept a parcel of government-owned land as payment -- which they immediately resold.

While the monument was roundly panned by art critics, the piece did have its fans -- former Libyan leader Moammar Gadhafi apparently sent Wade a letter asking where he could get one of his own.

Information Technology

"In an attempt to make a great leap forward, the government… seized upon the promotion of information technology as a strategic priority," wrote the Petersen Institute's Marcus Noland.

In fact, information technology has become a pillar of North Korea's attempt at joining the 21st century -- and the hermit kingdom's deep bench of programming talent has attracted outside investment.

"I understood that the North Korean IT industry had good potential because of their skilled software engineers, but due to the lack of communication it was almost impossible to work with them productively from outside," said Volker Eloesser, founder of Nosotek, a German firm which established a joint venture with Pyongyang's General Federation of Science and Technology. "So I took the next logical step and started a company here."

Difficult, to be sure, in a place where, according to one British citizen that has done business in the country, "(they) don't understand basic Western business concepts, like a contract or due diligence."

Managing a staff is also quite different in the DPRK. One guide says:

The working week in DPRK is slightly different than in other countries, mainly because office staff have to participate in several activities not related to their work. All workers and office staff have internal meetings on Mondays, collective work assignments on Fridays (in the fields or at construction sites), political study sessions on Saturdays, and a day off on Sunday. Business meetings should be planned on Tuesdays, Wednesdays, and Thursdays to get the best chances of effectively meeting the desired people.

Nosotek's website notes a few additional regulations with which clients need to be familiar:

  • Communication between the engineers and the customer will only take place by email or Nosotek's bug tracking server. Phone calls are not possible.
  • Chatting is only possible with members of Online Programming teams.
  • Emails exchange will only take place once per day, answers to questions will be giving on the following day, sometimes two days later.
  • The customer accepts that it might happen that email communication is interrupted for one or two days for technical or administrative reasons.
  • In case the customer sends political propaganda or agitation, Nosotek has the right to cancel the project without returning the prepaid fees.

It seems that North Korean workers are paid much like North Korea's creditors -- very, very little, if at all. Like Abdoulaye Wade, those that outsource to Nosotek are likely attracted to the prices; the company notes on its corporate site that "the DPRK has the lowest rates worldwide."

Lo and behold, things have gone relatively smoothly for Eloesser in North Korea.

"We are quite successful," he told the German edition of the Financial Times. "One time, we were even in the top ten in the App Store. Our customers do not want us to mention the name of our company or our employees' names on the product."

Nosotek has actually produced at least two iPhone (AAPL) games with North Korean labor -- The Big Lebowski Bowling and Men in Black: Alien Assault.


Not familiar with Computer Numerical Control? You obviously haven't been to North Korea lately.

Andray Abrahamian, Executive Director of Choson Exchange, a non-profit organization that conducts economic and business training in Pyongyang, describes CNC as being "pervasive and invaluable to modern production lines, yes, but ultimately a technology that usually rouses little emotion."

He continues:

Not so in the DPRK, where pretty much every citizen knows what it is, knows it is good for their country, and knows that it is cutting edge stuff.

For almost two years, citizens of North Korea have been exposed to a lengthy campaign extolling the virtues of CNC. For example, there have been repeated hour long broadcasts on North Korea's lone TV channel, giving pretty dry and technical explanations of how the machines cut, drill, and whatnot. The program would not fare well on a multi-channel television system.

More exciting means of promoting the technology exist, however. The pivot of these pop culture promotions is a popular song which bubbled up sometime late in 2009.

The song, called "Attain the Cutting Edge," is "available on karaoke machines nationwide" and the lyrics "include reminders that CNC is 'an example of self- reliance and strength' and that 'the people's pride is high…let's build a science-technology great power.'"

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