N. Korea offers promising investment areas

Food-processing and garments are promising for short-term investment and steel and chemicals for long-term investment in North Korea, according to a South Korean bank report.

Korea Development Bank projected the current status of North Korea's major industries and promising areas for investment in its recent report about North Korean industries.

When compared with South Korea, North Korea is lagging in steel, petrochemical, consumer electronics and synthetic fiber industries. However, the North is close to the South's production capacity in chemical fertilizer and non-ferrous metals, the bank estimated.

For short-term investment, food, textiles, garments, footwear and home appliances are promising industries by taking advantage of North Korea's abundant labor with less than US$10 million investments to minimize risk and collect return within a year, the bank said.

For the long term, the bank said, steel, chemicals and other technology and capital-intensive industries are promising, while auto parts, electric and electronic parts, office electronics and other technology-intensive industries would be appropriate for mid-term investment for returns on investments within one to two years.

Meanwhile, the North Korean economy suffered minus growth for nine consecutive years until 1998. Last year, it recorded a 6.2% growth rate in gross domestic product thanks to financial aid from the international community. Still, its annual trade remained at the US$1.4 billion level since 1998, which is nearly a half of its trade in 1990, when it recorded US$4.72 billion, according to the KDB report.