North Korea seeks investors for brewery

For the boldest frontier market investor: North Korea is looking to raise $39 million from foreign investors to fund a new brewery in Wonsan, an eastern port city where leader Kim Jong Un has big development ambitions.

The isolated country recently announced more than 100 separate projects seeking foreign investment in the Wonsan-Kumgang Development Zone, a mountainous region where leader Kim keeps palaces and a summer residence.

"They're looking at this as a new East Asian business and tourism hub," said Michael Spavor, an independent consultant who is helping a Wonsan investment committee seek more than $150 million in foreign funds, including for the brewery. "It's a nice area, it's on the coast, and it has the same qualities and infrastructure that once made places like Shenzhen and Hong Kong such attractive investment zones," said Spavor, who will lead a delegation of investors to Pyongyang next month to discuss the brewery and other projects.

North Korea is home to over 20 special economic and development zones which use a grey market exchange rate to value the local currency and contain separate economic laws, even allowing foreign entities to sue the state in the event of a break of contract.

Still, the impoverished country whose formerly Soviet- style planned economy is increasingly market-driven, does not have a strong record of attracting or protecting foreign investments. Egypt's Orascom Telecom (OTMT.CA), which runs Pyongyang-based Koryolink - the country's sole mobile phone network - has not been able to withdraw its profits from North Korea despite a subscriber base of 2.5 million, according to a first quarter regulatory filing.