North Korea is believed to have potential as an outsourcing hub for western companies, CNN reported on Wednesday. "A few western entrepreneurs with businesses in the capital city, Pyongyang, are betting the future of the 'Hermit Kingdom' will bring profit," it said.
Just as many entrepreneurs who had opened business in China just before Beijing fully opened itself to the capitalist economy reaped huge windfalls, so these businessmen hope that having a business foothold in North Korea will give them an advantage when the North eventually opens up. European businesspeople especially believe that North Korea to be "one of the last frontiers."
Because the United States bans business with North Korea, Europeans are more active in doing business in the reclusive country. "Foreigners running joint ventures with state-run businesses are staking a claim on the economic prospects for the country, equivalent to opening a shop in Beijing before economic reforms took root, or starting an enterprise in East Germany before the Berlin Wall fell," CNN said.
Despite sanctions against North Korea by the UN Security Council, there are about 100 western businesspeople in Pyongyang, it said, citing a European entrepreneur there. What makes Pyongyang currently attractive is dirt-cheap but quality labor, which costs only half of China's, especially in making games for computer and mobile phones.
Volker Eloesser, a German who set up a game manufacturing business in Pyongyang, told CNN that "it was fairly easy to find English-speaking, IT-trained workers" as many of his 45 employees had experience of working for foreign companies in China, and a partnership with North Korea's General Federation of Science and Technology helps secure recruitment.
However there are increasing difficulties in taking North Korean employees overseas for training as visas are frequently denied amid sanctions imposed on the regime over its nuclear and missile developments, according to CNN.