Keith Chiddy, General Manager of ING Northeast Asian Bank

"It's strange that banks in other Asian countries do not recognize the fact that Pyongyang is a good place to do business," said Keith Chiddy, general manager of ING Northeast Asia Bank, currently the only foreign bank in the DPRK.

In an interview with The People's Korea Mr. Chiddy stressed "We believe that the potential of the DPRK is great. What is important is to take an advantage not of the future, but of what we have now."

He made this remark during the Eighth Northeast Asia Economic Forum which was held on July 28-30 in Yonago, Tottori Pref., Japan. The forum focused on establishing an economic zone and promoting peace and prosperity through cooperation in Northeast Asia.

The following is based on the PK's exclusive interview with him. -Ed.

A: ING Northeast Asia Bank is a DPRK registered bank, serving to meet the needs for DPRK business, customers and government.

Our major activity in the DPRK today is focused on helping DPRK companies' export and import business. They are our most important future clients. Basically, when we go to a foreign country, companies we want to serve mostly are local companies.

In many areas, for example, we are actively looking for buyers of DPRK products, and occasionally we fund overseas suppliers of goods to the DPRK. And we find ways to assist in putting together partners so that they can mutually trust each other.

In terms of banking, operations we are doing are very simple. We only have a few staff, and we are doing foreign exchange transfers, trade related activities and the introduction of clients.

We have now just three DPRK staffs. In the future, we are looking to increase our staffs. In selecting those three employees, we did a kind of written examination and conducted a series of interviews. Our policy is this; we are really looking for people who are committed to serving the DPRK, and are willing to work with foreigners.

DPRK people is very sincere, honest, reliable and hard-working. Some people may recognize well that ING Northeast Asia Bank can make a valid contribution to the development of the DPRK.

As for foreign exchange transfers, almost all foreign currencies we are handling are in U.S. dollars ﾑ like yen-dollars, mark-dollars and pound-dollars. So we are dealing mostly with other foreign currencies.

A: As for customers, we work with only foreign, international companies. In the DPRK, they are mostly joint ventures of foreign companies with the DPRK including China, Singapore, Hong Kong, U.K., etc. Among them are also included joint venture companies invested in by Korean residents in Japan.

Some American entities are also doing business activities in the DPRK with the approval of the U.S. government. They are basically humanitarian aid groups. Some American commercial businesses are also doing business in the country, but we are not involved in commercial business with the U.S.A.

We are not doing with business with individuals. Because, we are a corporate wholesale bank. Therefore, we don't encourage individuals to open accounts with us. We are not able to assist individuals in their needs.

We find our advantage of doing business in the DPRK is the present, not in the future. We are the only foreign bank which is actively doing business in Pyongyang. For our bank, this is the source of great satisfaction. Even if we don't expect to generate dividends for many years, we have an opportunity. This is very satisfying.

A: To be honest, I think it's very strange that Japanese banks, Chinese banks do not recognize that Pyongyang is a good place to do business. There is a lot of opportunities for foreign banks and for foreign companies to develop good relationships with DPRK companies.

The DPRK has a big potential. The good thing is we have recognized that, and it is a bad thing is that Japanese and Chinese banks have not recognized that.

We believe that the potential of the DPRK is great. For example, some time in the future the DPRK may decide to seek investments in Wonsan and Nampo. And we think that this could be successful. There will be export processing zones (EPZ) in Nampo and Wonsan. If that is realized, we would like not only to publicize this worldwide, but also try to find ways to contribute to the development of foreign companies in these areas.

Some observers are saying that doing business in the DPRK may bring risks. But this is not a correct viewpoint. After the financial turmoil in Asia, they've found that a risk itself is in such countries as Japan and south Korea. For ING Bank, risks involved in doing business in the DPRK are negligible.

This does not meant that we are not willing to help overseas Koreans in Japan in the day-to-day operations with the DPRK. We plan to do this.

If we lose money, in other words, suffer from risks, those are our own risks. There will be no guarantee or insurance. Because, this was the decision made by ING headoffice in Amsterdam, based on our own assessment of the current situation and potential of the DPRK.

It is not "if the DPRK develops...," but we know "the DPRK will develop." Therefore we are committed to supporting it in its development process. There is no doubt that the DPRK will develop rapidly.

A: As regards the Rajin-Sonbong Free Economic and Trade Zone, I have been there twice, and I expect to go there in the next few months. We are supporting two European investments. Although we do not have a physical presence in Rajin-Sonbong, we are working with trading companies active there as well as with potential investors. We also work very closely with the Golden Triangle Bank in Rajin.

Everybody has recognized the potential not only of Rajin-Sonbong but also of the whole of the DPRK. The question is which form should be adopted with joint ventures or 100%-foreign-owned companies, in order to develop this potential.

As for a way to solve the problem of financing infrastructure development in Northeast Asia including Rajin-Sonbong, the real problem is not just the development issue facing the Far East of Russia, Mongolia, Northeast China and the DPRK. The biggest problem facing this region as a whole, is the deflation cycle which is hitting south Korea and Japan. This is shown by the rapidly rising unemployment, the reduction in net output, etc. These are having a significant negative impact on the development in China, the whole of the Asian region, particularly in Northeast Asia.

A: ING Northeast Asia Bank will never be a leading bank in the DPRK. Foreign banks in any country basically account for only a small percentage of the total banking business of a country. We can be only a specialist. We focus on products that local banks cannot handle. That is the nature of our strategy of providing only the services people want. We are not to dominate the market and are not to provide the same services that every banks in that country provide.

As DPRK banks become more sophisticated, then our products will change. We will focus on the products which the DPRK banks are not handling. We would be pleased to find ways in which we can support and help the DPRK, not only as a consultant for companies but also as an advisor to the government.