S. Korean financial firms vulnerable to security breaches: regulator

Cabinet to tighten economic control

Cabinet to tighten economic control

Pyongyang establishes agency to handle investments from overseas Koreans

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Published : 2013-12-29 20:06
Updated : 2013-12-29 20:06

North Korea’s cabinet will tighten its grip on the economy after the shock execution of leader Kim Jong-un’s uncle, whose control over key sectors weakened the country’s finances, a senior official said.

North Korea has also established a government agency to facilitate investments by overseas Koreans, another official was quoted Sunday as saying.

Jang Song-thaek, the once-powerful uncle and political mentor of the young leader, was executed on Dec. 12 on charges of corruption and plotting a coup, but his growing influence over a lucrative minerals business angered Kim Jong-un and other top officials.

Jang’s excessive intervention contributed to the North’s economic troubles, Kim Jong-ha, chief secretary of the secretariat of the cabinet said in an interview with the Choson Sinbo, a pro-Pyongyang newspaper in Japan.

“The cabinet will fulfill its function properly as a control tower of the economy,” he said, adding that it was trying to regain control over projects and put them in order.

North Korea will also move to independently produce and reprocess coal and other natural resources for exports, the official said.

The impoverished but mineral-rich North has sought for years to bolster its crumbling economy by increasing exports of minerals. It has sold mining rights to Chinese investors, who now control much of its resources business.

Jang’s purge and execution sparked speculation that he had lost out in a power struggle with hard-line army generals, but South Korea’s spy chief Nam Jae-joon told parliament Monday that his fall had stemmed from his attempt to control lucrative state businesses, especially those related to coal.

The Choson Sinbo backed Nam’s claim and quoted the cabinet official as saying that Jang had put state businesses under his control.

About 88 percent of North Korea’s total foreign trade last year involved China, according to figures earlier this year from South’s Korea Trade-Investment Promotion Agency.

It said exports to China ― mostly coal and iron ore ― were worth $2.4 billion in 2012.

South Korea estimates the total value of mineral deposits in the North at $6.3 trillion.

Meanwhile, Pyongyang established the “economic cooperation office for overseas Koreans” in August to provide support and guidance for investments from Koreans living overseas, the agency’s chief, Pak Kyong-jin, said in an interview with Minjoktongsin, a pro-North Korean website operated by a U.S.-based Korean.

“An increasing number of overseas Koreans have been visiting the North to discuss investment issues. We have established the agency to handle these issues exclusively,” he was quoted as saying, adding that the agency will begin operation in earnest in January.

Pak said he would advise potential investors to focus on construction and light industries for the time being, rather than resources development projects that require massive amounts of capital.

The interview was seen as part of efforts to show the outside world that the North’s economic policies will remain unchanged despite the execution of Jang.

(From news reports)

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