Post-Lecture Brief on North Korea's Economy/Business Environment

This is our report from our lecture series on Finance and Economic Strategy in Pyongyang. It captures things we learn that will enable us to provide better training, and helps to inform readers on North Korea's business and economic environment. Highlights are below. Need and demand for skills upgrading | Lecturers agreed that there is a strong need for training as participants' financial knowledge and skills, with a few exceptions, are shallow. This is also reinforced by our survey findings. More importantly, participants expressed strong interest in further training programs, which is not always the case in North Korea.

Managing Knowledge-Based Economies & FDI of key interest | Based on discussions with participants, knowledge-based economies and the management of FDI inflows are of great interest to our audience.

Newly-formed economic institution non-operational as yet | An institution meant to play a key role in economic development and was formed in recent years have not yet become operational.

Feedback on Korea Times Article

An article from Korea Times recently appeared on our work. We would like to add some comments to further clarify some of the statements that came out in the article: “Choe Thae-bok highly commended our work [this refers to the OpenCourseWare and Wikibooks initiatives we have, not the economic and financial workshops] and sent the president of Kim Chaek University and the vice president of the State Academy of Sciences to meet with us privately,” [...]

They were not in North Korea for political purposes, but their presence attracted enough attention from North Koreans. Reporters from the North’s official Korean Central News Agency also tagged along with them [The KCNA people only interviewed us on one of the days. Unfortunately, they were not so keen on the OCW/Wikibooks idea and just wanted to get comments on Pyongyang from people in favor with higher-ups] .

Apparently, the North Koreans were quite impressed by their academic backgrounds too [This point was made because we were surprised at what the North Koreans we met knew about US academic institutions, and their respect for them]. [...]

In Pyongyang, See and his group members taught North Koreans how to use computers for e-training in finance [this is a reference to OpenCourseWare]. They also offered lectures on the U.S. subprime crisis and the possibility of the Chinese yuan as an international trade settlements currency [We also presented and discussed Singapore's model of strong government with liberal markets]. [...]

“The North Koreans [we met - a subset of North Koreans for sure] were actually quite sophisticated people [some of them - others we trained can be very clueless]. They know what’s happening in the outside world,” said a financial analyst who went to Pyongyang with See, but preferred not to be identified.

“The financial institutions we met are very keen to have us train them and help build the institutions ― especially the newly formed State Development Bank. There is an incredible demand for training,” See said.

Post-Training Report to North Koreans

I have attached a report sent to our North Korean partner institutions indicating areas of training that is much needed in future sessions. This is a truncated report, and we will follow up with a more complete report later for Choson Exchange visitors. Our confidentiality policy means that we only broadly summarize some of our discussions with our North Korean counterparts. ------------------------------

There is room for extensive cooperation on training with Daesong Bank, the State Development Bank, and other financial institutions as our lecturers feedback and survey results from the training session at Kim Il Sung University e-library (12 participants with lectures recorded and re-broadcast on the intranet) indicate that skill sets for finance (e.g. modeling with excel) is severely lacking and awareness of global financial institutions and models is low.

We recommend more intensive training sessions in-country with a focus on building skill-sets in investment selection, accounting, macro-economics, financial modeling with computers and legal training. This should be complemented with further training abroad that emphasizes building networks and visits to key financial institutions to learn from them.

Above is a picture taken from our lectures on the Singaporean development experience

Finance & Economics Strategy Lecture (13-14 Sept) in Pyongyang

Lecture Series in Finance and Economic Policy 13 – 14 September 2010 Location: Pyongyang Audience: Academics, Government Officials and Business Professionals from Banking Circle

Topics

We will also include breakout sessions where participants are divided up among the three lecturers to discuss in greater depth the questions raised during the lecture.

Introduction to Choson Exchange: Objectives and What We Can Do | This will be a short introduction to our people, our interest in business, economics and law training, and how we can help.

Growing the Financial Sector in Singapore through Economic Strategy-Making | An Economist from Singapore will discuss how Singapore designs its economic strategies, how the government co-exists with and complements markets and how it uses economic strategy work to support the growth of the financial sector..

The OpenCourseWare Revolution: Using Computers for E-Training in Finance & Other Fields | This session will talk about how Choson Exchange can use OCW materials to deliver training electronically throughout the year and couple this with live lectures and language assistance to ensure effective delivery of education. We will run some demos of electronically-delivered lectures from some of the world’s foremost scientists and economist at Yale University and the Massachusetts Institute of Technology (MIT). The US Subprime Crisis & its Impact on Risk Management | A risk manager from an international investment bank will discuss the causes of the US subprime crisis and its impact on how the financial sector and investment banks evaluate the riskiness of their assets.

An International Banker’s View: The RMB as an International Trade Settlements Currency? | A banker with experience across 4 continents at an international bank will introduce China’s development from a banking perspective before explaining the potential for the Chinese Renminbi to be a currency for settling international trades. This lecture will also study the degree to which the RMB is internationalized, the impact this has on structuring trade financing and the benefits and drawbacks inherent in internationalization of currencies.

Thematic Workshops | Participants will be broken up into smaller groups in order to have in-depth discussions with lecturers on the above topics. The topics are meant to motivate discussions on deeper structural issues, and the workshops allow us to create an informal atmosphere for discussions. Workshop themes include:

- Financial Sector & Economic Development - Financial Sector Stability – Tools for Proper Credit Evaluation - Making Trade Work – the Role of the Financial Sector

Roundtable Session | At the end of the first day, we will collect questions from participants on economic and financial topics. These will be organized into thematic issues, which will be discussed at a roundtable involving all lecturers. This format is meant to generate debate among participants as the diverse backgrounds of our lecturers mean that they might not necessarily share the same viewpoints on financial or economic issues. Roundtable session includes:

- The Future of the Financial Sector