Does North Korea need to import 641,000 tons of grain, like the UN says?

December 12th, 2018

By Benjamin Katzeff Silberstein

That’s what the FAO says in a recent estimate. Here’s the Yonhap summary of the FAO report:

North Korea requires about 641,000 tons of grain this year as the impoverished communist nation produced a below-average yield, a U.N. food agency said in a recent report.

This would not be prohibitively expensive for the government to import.

The shortfall, which must be made up with foreign assistance and imports, is up from 458,000 tons estimated for 2017 in the quarterly Crop Prospects and Food Situation report released by the Food and Agriculture Organization of the United Nations.

Full article:
N. Korea needs 641,000 tons of grain: U.N. report
Yonhap News
2018-12-12

I have my doubts about the accuracy of these estimates. It’s highly unclear how the Food and Agriculture Organization (FAO) has conducted any recent food production surveys in North Korea to generate these new figures. Even when they did  such surveys on a regular basis, conditions were difficult as they were (at least to my knowledge) not able to freely visit farms and markets. The role of the markets in agricultural distribution is still not fully or officially acknowledged by the North Korean government. I’ve emailed FAO with questions about the basis for these numbers, and will update the post if or when they respond.

The problem is that the marketization of food supply makes it very difficult to create an accurate balance sheet for food needs and production. We don’t know precisely how much private plots produce, for example, or how much is imported outside of what the government reports to FAO. Again, all of this would be much easier to understand if more information was readily available about the FAO’s methods for this estimate.

Here is the actual report by FAO. You can find previous reports here.

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Mobilized North Koreans pay day laborers to take their spots at construction sites

December 11th, 2018

Benjamin Katzeff Silberstein

More and more people are now paying their way to getting out of mandatory mobilized labor, reports Daily NK:

There has been a rise in the number of North Koreans paying others to take their place in mandatory state-led construction projects, sources in the country report.

“Some North Koreans don’t want to work in state-led construction projects, so they find a way to send others as their replacement,” said a South Pyongan Province-based source on December 5. “It’s common for people to pay day laborers in Yokjong District, Pyongsong City, to work at construction projects.”

Generally speaking, enterprises, the Korean Socialist Women’s Alliance and Kim Il Sung-Kim Jong Ilism Youth Alliance send workers to participate in state-led construction projects. Recently, however, there have been more cases where others are sent to the construction sites instead of the designated workers, the source reported.

“The construction of the ‘Chongchongang Power Station in Tiers’ at the basin of the Chongchon River in South Pyongan Province is almost finished, but there are too many ‘replacement’ construction workers there,” he said.

The Women’s Alliance Special Labor Brigades in Pyongsong’s Yangji District sent a total of 15-20 people to the construction site, but many of these workers are in fact replacements for others who were mobilized for the project.

This suggests that North Koreans are paying more attention to their own personal lives than the fulfillment of their national duties.

During his 2016 New Year’s Address, Kim said, “The Paektusan Hero Youth Power Station, Chongchongang Power Station in Tiers, Sci-Tech Complex, Mirae Scientists Street, Jangchon Vegetable Cooperative Farm and many other structures of lasting significance and beautiful socialist villages that embody the Party’s ideas and policies sprang up, showing the mettle of the country which is advancing by leaps and bounds reducing ten years to one.”

North Korean state media reported in November 2015 that a ceremony celebrating the start of construction on Chongchongang power plant was held at the Huiceon No. 9 Power Plant, but the project has dragged on for three years due to construction problems, a separate source in South Pyongan Province.

“Some have voiced concern about issues with the construction plans for the power plant, ” he said, adding that the majority of the “replacement” construction workers who are paid to work on the construction sites are said to perform unsatisfactorily.

The organizations that traditionally send workers to construction sites are not fulfilling their responsibilities properly, either. The Women’s Alliance, Youth Alliance and enterprises don’t bother to check whether the right people are going to the construction sites, the source said.

“When a replacement is sent to a construction site, they are guaranteed three days of food, along with three days of wages equaling 60 yuan, along with another 20 yuan to pay for their transportation. So in total, they receive 80 yuan,” he said.

Replacement day laborers are also prevalent in North Korea’s agricultural sector, and receive three meals a day along with 20 yuan for eight hours of work.

Article source:
Day laborers paid to replace regular workforce at construction sites
Ha Yoon Ah
Daily NK
2018-12-11

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Chinese sanctions enforcement on North Korea: don’t jump to conclusion

December 7th, 2018

By: Benjamin Katzeff Silberstein

Is China enforcing UN sanctions on North Korea? Is “maximum pressure” still on and working? How much is China really trading with North Korea?

None of these questions can really be answered with the open-source information available at the moment. In fact, I doubt that any sources exist that could provide a conclusive answer. Much of the relaxation in Chinese implementation of the various bans and limitations on trade with North Korea likely comes from the Chinese authorities simply turning a blind eye, and how do you record trade that happens because you’re looking away?

The best information we have, unsatisfactory as it may be, comes from anecdotal observations along the border between China and North Korea. Nikkei Asian Review recently visited the border area and gives us an interesting and informative look at what the situation is like in the region. However, the information given through reports such as this one is not enough to jump to the conclusion that China has stopped enforcing sanctions on North Korea. As I explain further below, until we see significant, meaningful amounts of coal and textiles crossing the bridge, North Korea is still suffering immense losses in its export incomes from Chinese implementation of sanctions.

The problem is that this is, of course, hard to see with your own eyes when you visit the border areas. After all, you can’t see what’s not there. To be sure, report such as this one matter a great deal, and I’m not at all discounting its value. The fact that there’s immense, vibrant and dynamic economic activity going on by the Sino-Korean border is interesting in its own right, as it dispels the notion that North Korea is fully isolated economically. As Nikkei shows, that’s just not the case:

The number of trucks making their way across the Sino-Korean Friendship Bridge increased sharply in November, according to an executive of a housing materials supplier in the border city of Dandong.

Many carry plywood flooring, elevator components and other materials to construction projects in North Korea, while seafood heads in the other direction.

I saw similar goods transported over in great quantities in the summer of 2016, another point in time when China was supposed to be squeezing North Korea economically, according to the sanctions frameworks in place.

“These days, the bridge gets jammed with traffic, which is something we rarely saw after the sanctions resolution” in 2017, the executive said.

This is a similar impression to what we’ve seen in other news reports. Traffic declined drastically during the US-North Korea tensions of 2017, and the during the late summer and fall of that year in particular, when round after round of sanctions were levied on the country.

However, that traffic has increased from a relatively extreme low point is itself not evidence that sanctions no longer have any effect. Traffic alone does matter as an indication, but not much more. We need to know what is being shipped as well.

Increased bilateral trade serves both countries’ aims. Beijing wants to strengthen its influence over Pyongyang, while the Kim Jong Un regime needs to develop a struggling economy. Activity at the border area highlights attempts to rebuild ties.

About 70% of China-North Korea trade passes through Dandong. In late November, construction work could be seen getting underway in Sinuiju on the other side of the Yalu River, which separates the two countries.

A large, cylinder-shaped building is taking shape close to the bridge, in an area that also hosts an amusement park. According to local rumors, it is a hotel that will target Chinese tourists.

About 10 km to the south lies the New Yalu River Bridge, which is expected to replace the older crossing as the main cross-border artery when it opens. Many structures that look like new apartment buildings can be seen close to it on the Korean side.

The North Korean leader has shifted his focus to economic policy amid improving relations with China and South Korea.

Sinuiju will potentially be crucial to driving economic growth through trade with China. This past summer, Kim inspected cosmetics and textile plants in the city, and many believe Pyongyang has stepped up the development of nearby areas.

And just a few weeks ago, Kim Jong-un oversaw the Sinuiju grand redevelopment plan.

The sanctions imposed on the Kim regime over its nuclear and missile programs make it difficult for the country to rebuild its economy on its own.

China, which accounts for 90% of North Korea’s total trade in value terms, is backing efforts to revitalize the city.

Black North Korean clams are easily distinguished from the yellow Chinese variety, claimed a middle-aged woman at the Donggang Yellow Sea market as she hooked some out of a net and sorted them by size.

The Chinese authorities toughened controls on imports of clams, crabs and other seafood from North Korea immediately after the sanctions were imposed, but several wholesalers said smuggling in the Yellow Sea had picked up again this past spring.

North Korean seafood at the market, they claimed, was simply being packaged as if it came from China. The clams served at a restaurant in the city were all black.

The sanctions also restrict the acceptance of North Korean workers.

At a garment factory in suburban Dandong, however, there were a number of female laborers from across the border, and what appeared to be a North Korean merchant was seen staying at a luxury hotel in the area, neither of which would have been common sights just after the sanctions were imposed. These people most likely enter China on short-stay permits, rather than working visas.

Guest workers appear to have been one of the first areas in which China began relaxing control, shortly after Kim Jong-un’s spring 2018 visit to Beijing.

Chinese influence in North Korea’s construction sector also appears to extend well beyond the supply of materials.

“It is hard to imagine they have the technology to construct a round building,” said a senior official of a construction materials company in Dandong, speaking about the supposed new hotel on the other side. What is less hard to imagine, he assumed, is where the technical support was coming from.

Locals claim that a Chinese inspection team had gone over to look at the construction of roads linking the new bridge with the nearby town.

Full article and source:
China-North Korea border trade thrives again, despite sanctions
Daisuke Harashima
Nikkei Asian Review
2018-12-06

Again, all of this matters. But the question is just how much it matters when North Korean can’t export nearly the same quantities of coal and minerals to China that it has over the past few years. Some might argue that this trade, too, could simply be hidden and kept off of China’s books. I doubt it. Some, perhaps, but absolutely not all or even most of it, simply given the quantities we’re talking about here. I would think you’d have to do quite a few nighttime runs by ship across the Yalu river to get any meaningful quantities across hidden.

Consider the mere magnitude of the numbers we’re talking about here. I unfortunately don’t have time to dig up the latest data right now, but for a sense of proportion: in July of 2017, China imported only 2.7 million tonnes of coal from North Korea, a downturn of 75 percent. To my knowledge, this number hasn’t climbed significantly since, aside from some outlier months before various sanctions have taken effect, and the like. Chinese imports of North Korean coal account for 42.3 percent of total Chinese imports, according to one figure.

The point isn’t that North Korea is under perfectly applied “maximum pressure” by China. But that trade may be somewhat more porous than a year and a half ago doesn’t mean that North Korea’s economy isn’t experiencing immense difficulties under sanctions at the present moment. I’ll finish this post with a graph showing total volumes of North Korean exports of anthracite and iron ore to China between 2009 and 2015, a period of immense growth in these exports, based on UN Comtrade data. These incomes have been crucial for Kim Jong-un’s ability to orchestrate the massive infrastructure updates and construction projects we’ve seen under his tenure.

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Ri Yong Ho’s visit to Vietnam (or: the futile guessing game of North Korea’s developmental model of choice)

December 6th, 2018

By: Benjamin Katzeff Silberstein

North Korea’s foreign minister Ri Yong Ho recently visited Vietnam, prompting speculation about economic reforms in North Korea. KCNA (whose website is impossible to link to for individual texts):

Pyongyang, December 3 (KCNA) — The government delegation of the Democratic People’s Republic of Korea led by Foreign Minister Ri Yong Ho visited the Socialist Republic of Vietnam from Nov. 29 to Dec. 2.

During the visit Ri Yong Ho paid a courtesy call on Nguyen Xuan Phuc, prime minister of Vietnam, had talks with Pham Binh Minh, deputy prime minister and foreign minister, and was invited to a welcome reception given by the deputy prime minister and foreign minister.

During the courtesy call and talks both sides had an in-depth exchange of views and reached consensus on the issue of further developing the relations of friendship and cooperation between the two countries, provided and boosted by President Kim Il Sung together with President Ho Chi Minh, in various fields as required by the new era and other issues of mutual concern.

With the risk of sounding like a broken record: it seems that every time a North Korean official visits or mentions another country, especially those in the region, speculation follows about whether North Korea is soon to adopt the “model” of the country in question. It’s often unclear, however, what this would mean in practice. Would North Korea simply look at one, specific country’s institutions and laws, translate them to Korean and adopt them wholesale? Would North Korea adopt the same sort of sequencing of economic reforms, in the precise order in which the country in question adopted them?

Of course not.

Kim Jong-il, in his time, visited both Russia and China, and made comments to the effect that North Korea could learn from the countries’ economic systems. Kim Jong-un has visited not just China, but Singapore too. He may even come to Seoul before the end of 2018, and if so, he’ll likely visit construction sites and perhaps even factories operated by one or several of South Korea’s major conglomerates.

The point is that North Korean government officials and policy planners, like those of all countries, will naturally look for inspiration from around the world, from whatever country may have achieved the goals that the North Korean regime aspires to.

For now, that appears to be economic growth under continued one-Party rule. There are a number of countries that fit that description. Arguably South Korea does too, in a way, given that its economic growth miracle first began under harsh political oppression. There is simply little sense in debating what “model” North Korea will choose, because there is no reason to believe the country would adopt any one “model”, because that’s simply not how countries work.

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North Korea’s aid needs next year, same as this year?

December 5th, 2018

By Benjamin Katzeff Silberstein

Yonhap reports:

More than US$111 million will be needed for humanitarian assistance to North Korea next year amid international sanctions on the impoverished country, a U.N. report showed Wednesday.

The amount is similar to this year’s level targeted for 6 million people, according to the Global Humanitarian Overview 2019 released by the United Nations Office for the Coordination of Humanitarian Affairs.

While the number of people in need is expected to remain similar next year, sanctions imposed on North Korea will continue to constrain U.N. agencies and other humanitarian partners from providing assistance to the impoverished country, the paper said.

A total of 10.3 million people were estimated to be in need of humanitarian aid in North Korea in 2018, it said.

“While international sanctions clearly exempt humanitarian activities, they have unintentionally impacted humanitarian operations through a disruption of the banking channel, breakdown in supply chains and delays in transporting vital goods into the country,” the report said.

The funding for humanitarian aid to North Korea has decreased from $400 million in 2004 to $26.2 million as of November 2018, it said.

Article source:
U.N. says over US$111 mln required for humanitarian aid to N.K. next year
Yonhap News
2018-12-05

For the record: this is money that the North Korean regime has, but chooses not to spend on humanitarian needs.

It appears that the calculation of North Korea’s needs next year isn’t really a calculation, but just an assumption that conditions and needs will remain the same for the foreseeable future. This makes the estimate rather lacking in credibility, but given the strongly restricted access for humanitarian agencies to North Korea, they likely have little other choice but to repeat the most recent estimate.

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[Updated] Kim Jong-un oversees master plan for Sinuiju facelift and construction

December 5th, 2018

By Benjamin Katzeff Silberstein

A couple of weeks ago, KCNA carried a report of Kim Jong-un’s oversight of a grand, general reconstruction plan for Sinuiju, North Korea’s most important hub for trade with China.

North Korea, it seems, expects that trade primarily with China will continue to grow and remain the country’s most important source of foreign currency revenue for the foreseeable future. This is something to keep in mind through the speculations about US and other western investments in North Korea in the event that sanctions are lifted and denuclearization (whatever version of it) comes through.

The plans for Sinuiju are also notable simply because Sinuiju is not Pyongyang. There has been quite a bit of work done in the past few years, under Kim Jong-un, at extending the renovations drive and infrastructure construction to smaller, provincial cities (mostly provincial capitals). One message seems to be that Kim Jong-un’s ambitions and promises of economic development aren’t just for the elite, but for the population as a whole.

It’s unclear how the plans that Rodong speaks of are related to the Sinuiju International Economic Zone. An issue of the quarterly North Korean magazine Foreign Trade in 2015 indicated that renovations of Sinuiju would focus on infrastructure renewal, but as the example of the bridge to nowhere shows (see below), it’s unclear what actual progress is being made in reality on this.

Some specific thoughts and annotation below (my emphasis, except on the leader’s names, that’s all standard KCNA):

Pyongyang, November 16 (KCNA) — Kim Jong Un, chairman of the Workers’ Party of Korea, chairman of the State Affairs Commission of the Democratic People’s Republic of Korea and supreme commander of the Korean People’s Army, examined and guided the master plan for Sinuiju City together with leading officials of the party, administration and design organs of North Phyongan Province.

Learning about the implementation of the behests of President Kim Il Sung and Chairman Kim Jong Il for the construction of Sinuiju City and examining in detail the master plan for the construction of Sinuiju City and a diorama of the future city, Supreme Leader Kim Jong Un set forth the tasks and ways of successfully sprucing up Sinuiju City to meet the demand of the present era.

“The present era” = likely, the era of a growing middle class with demands for consumption and entertainment, many of which make their money through the markets and semi-private business.

He said that it is necessary to form the center of Sinuiju City deep up to the southern Sinuiju area with the statues of

Kim Il Sung and Kim Jong Il at the center square of the city as the axis, arrange high-rise apartments and public buildings at provincial and city levels in its surroundings in a dimensional way, successfully arrange the blocks of high-rise and skyscraper apartment buildings along the main axis and arterial road of the city and the bank of the Amnok River in formative artistic way and build many parks within the dwelling area and thus turn the city into the one in the park.

This all sounds very expensive. Meanwhile, North Korea faces largely unfunded humanitarian needs, which could be met relatively cheaply. In fact, the equivalent of one-sixth of North Korea’s total luxury goods imports in 2017 would be enough.

Saying that it is necessary to build many modern and majestic architectures rich in national character in order to build the city befitting to a gateway city of the country, he called for successfully arranging the public buildings such as theatre, cinema, sports village, ice rink and sci-tech library and service facilities including hotel and department store in a rational way and to be of modern taste.

Books have been written about the concept of “rationality”, so I won’t go into what the use of that phrase means in this context. But it does sound like what Kim is talking about is simply making Sinuiiju “modern”, with all of what that entails. These days, there’s quite a bit of reporting and chatter around about how Pyongyang, and other North Korean cities, have undergone stark modernizations during Kim’s tenure. This is clearly true, but it’s worth remembering the reason why these things are news: the presence of “service facilities”, “department store[s]” and the like, things taken for granted in much of the world, is still not widely spread in North Korea outside of Pyongyang. (This is also true for Wi-fi.)

He also gave a direction of sprucing up the present industrial areas and remodeling the railway station of the city and Uiju Airport in a modern way.

Speaking of infrastructure: this is the only part of the article where infrastructure is mentioned. It is interesting and notable that despite the attention and grand plans for Sinuiju, the new bridge connecting the city to Dandong had still not been connected to North Korea’s road network as of mid-February this year, as far as I can tell from satellite imagery. This is the most recent date for which imagery is available.

The end of the new bridge from Dandong, on the North Korean side. Photo: Google Earth.

Underlining the need to pay deep attention also to the creation of cultural environment including urban greening, he called for creating green belts near the city’s main road and around the industrial area to make sure that one citizen has 50 square meters of green tract of land, and for building city park, botanical garden and recreation ground in a cozy and peculiar manner to suit the specific conditions of the local city.

Again, that’s going to cost a lot of money, and not least, human effort. Citizens might be happy about green spaces, but they’ll be less so at having to go out and construct them through “voluntary” labor.

Noting that it is most important in urban construction to make sure that citizens don’t feel any inconvenience, he said that it is necessary to increase electricity production and make a maximum use of natural energy so as to round off the city electricity supply network system, perfect the heating system, put the water supply on an international standard and properly establish the system for purifying industrial waste water and sewage as the city has dense arrangement of residential quarters and industrial establishments.

Electricity and energy supply is one of the main achilles heels for the North Korean economy, and its industry is highly vulnerable to shortages in electricity supply. “Maximum use of natural energy” sounds like hydrogen power to me, which is North Korea’s most plentiful source of electricity. Aside from coal, that is, but given the export value of coal, its use for domestic electricity production comes with a high opportunity cost. In any case, the North Korean administration is clearly aware (and has been for decades) that energy is a big problem, and bringing it up in conjunction with a city plan inspection is likely a way of sending the message that the authorities are working on it. How exactly that is being done is less clear.

On the theme of energy in Sinuiju, it might be worth noting that the city is home to one of the country’s main oil refineries, the Ponghwa Chemical Factory, south of the city.

Ponghwa Chemical Factory, south of Sinuiju. Photo: Google Earth.

As I keep stressing all the time, the provincial party committees should pay special attention to the work of intensifying the provincial design organs and construction forces and put constant efforts on it and thus decisively raise the level of the building in the construction projects of local areas, he pointed out.

Calling for reviewing the master plan for Sinuiju City and the long-term goals for city construction in cooperation with powerful design organs of the country, remapping it out to be realistic and submitting it within a few months, he said that the Party Central Committee would discuss and decide on the plan after going through relevant procedures, and the construction of the border city would be conducted year by year and phase by phase with the state backing after setting the goals of 5-year plan.

Noting that the work of remodeling Sinuiju City for which President Kim Il Sung and Chairman Kim Jong Il gave instructions dozens of times is a very important task of carrying out their behests, he stressed the need to gain good fruition within a few years to come.

Article source:
Supreme Leader Kim Jong Un Guides Master Plan for Construction of Sinuiju
Political News Team
Rodong Sinmun
2018-11-16

[Updated 2018-12-6: I added a few details throughout the post, as well as satellite imagery.]

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North Korea spent two million dollars on surveillance equipment

December 3rd, 2018

Benjamin Katzeff Silberstein

The spread of cell phones in North Korea, rather than being a catalyst for a Pyongyang Spring, is likely giving the regime more means and channels for surveillance. Daily NK reports:

The North Korean regime imported a large shipment of mobile phone wiretapping devices from China in May, local sources have reported.

“The authorities bought new electronic wave interruption devices and mobile phone wiretapping devices in May this year. The cost of the equipment was around 15 million yuan (2.45 billion South Korean won), according to a Ministry of State Security (MSS) official that I talked to,” a source in China close to North Korean affairs.

“The MSS official also told me that the equipment will be supplied to cities on the Sino-North Korean border, starting from Hyesan, Ryanggang Province, and then to Sinuiju, North Pyongan Province, and other cities. The cities are probably filled to the gills with high-quality electronic signal interruption and wiretapping devices now.”

Daily NK recently reported that North Korean law enforcement officials have installed new mobile phone wiretapping devices on the Sino-North Korean border to monitor international calls.

A number of residents calling relatives in South Korea have been arrested, and the MSS has demanded money from their family members in South Korea in return for their release.

The North Korean authorities have strengthened surveillance and wiretapping activities to prevent North Koreans who have access to outside information from sparking unrest in the country. These efforts have become particularly pronounced recently as inter-Korean relations have improved. Ultimately, the authorities want to prevent sensitive domestic information regarding denuclearization and nuclear development plans from leaving the country.

“For North Korean officials who depend on the regime staying in power, they know that the ‘information war’ with their own citizens and the international community is important and are set on preventing things from going in an undesirable direction,” one expert told Daily NK on condition of anonymity.

A separate source in Pyongyang also reported that MSS officials who misappropriated some of the funds used to buy the new equipment were purged.

“Several MSS officials were purged after it was found that they bought cheap equipment and embezzled the rest of the money. Another team of MSS officials had to go to China again to buy better equipment,” he said, adding that the officials who misappropriated the funds faced punishment after the equipment they bought did not operate as intended.

Article source:
North Korea spent $2M on surveillance and wiretapping equipment in May
Kim Song Il
Daily NK
2018-12-03

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One unfortunate factory manager, and North Korea’s command economy

December 2nd, 2018

By Benjamin Katzeff Silberstein

These days, with much interest in changes in the North Korean economy, it’s easy to get the impression that under Kim Jong-un, the entire system has been changed beyond recognition. While that is partially true, particularly in realms such as enterprise management, the following story in Daily NK reminds us that the role of planning in the North Korean economy isn’t by any means altogether gone:

Following an on-the-spot visit by Kim Jong Un, the director of a military supplies factory was reportedly stripped of his position and demoted to a forest logger position. He appears to have been punished for the factory’s failure to meet its annual production quotas.

“Kim Jong Un recently made an on-the-spot visit to the Kusong Machine Tool Factory in North Pyongan Province’s Kusong City,” said a North Pyongan Province-based source on November 21.

“The director of the enterprise was stripped of his Party credentials and fired from his position a day later, (and) demoted to the position of a common logger at the Rimsan Enterprise in Rimsan County, Jagang Province.”

The source further noted that “[Kim Jong Un] expressed concern about the failure of the company to meet its annual production quotas by the end of the year” and “the managing secretary was punished the following day to show others what can happen when quotas aren’t met.”

The state-run publication Rodong Sinmun reported on November 16 that Kim conducted an on-the-spot visit to Sinuiju, North Pyongan Province, and visited the factory in Kusong City.

North Korea’s state-run media typically reports on Kim’s movements one or two days after they occur, so his visit to Sinuiju and Kusong likely happened on November 14 or 15, with the director’s firing occurring on either November 15 or 16.

Kusong Machine Tool Factory is the country’s second largest machinery factory and produces various machinery, tractor parts, and industrial hardware.

The factory also appears to be producing military supplies, given Kim’s criticism of the factory’s failure to meet annual military supply production quotas.

The factory has advanced computerized numerical control (CNC) equipment, allowing it to produce precision components and produces parts for the military, including for nuclear weapons and missiles.

On or around November 15, Kim oversaw the test of an “advanced tactical weapon” at the testing site of the Academy of Defense Sciences near Sinuiju.

According to a separate source in North Pyongan Province, Kim Jong Un said during the visit that “officials working in the military supply industrial sector must have a high-level of revolutionary belief and loyalty to the Party so that they do not bow down to the persistent attempts to isolate and destroy us.”

He continued, “[Officials] must show a high-level of loyalty and revolutionary enthusiasm toward the Party to achieve yearly quotas […] Failing to achieve state-set plans is evidence that [officials] are losing the fire in their enthusiasm toward the Party.”

Kim also emphasized that innovations must occur for the success of his centerpiece Nuclear Weapons and Economy Dual-track Policy

“Under the collective guidance of the Party Committee, we must eradicate the failure of this factory to unconditionally carry out the revolutionary duties that the Party has granted it, and ensure the great winds of innovation blow strongly so that the nuclear weapons and economic dual-track policy continues unswervingly along its present course,” he said, according to the source.

Full article:
Factory director dismissed after visit by Kim Jong Un
Mun Dong Hui
Daily NK
2018-11-29

What does this tell us about the North Korean economy?

For one, it reminds us that quotas are still very much in place and enforced, at least in some sectors of the economy. Arguably, munitions manufacturing is different and special because of its significance for national security. Still, we don’t actually know with certainty what spheres of North Korea’s economy that still operate under centrally planned rules and procedures. Likely, virtually all do to some extent, with enforcement and rigidity varying greatly between sectors.

It also reminds us of the strong link between economic production, productivity and political loyalty. In a system such as North Korea’s, economic production failures are never just economic in nature. If a factory manager doesn’t reach the quotas given by the state, it can’t be because conditions for production make it impossible. It has to be because of a lack of ideological rigor.

In other words, even with the decades of marketization, several central tenets of the old system still remains.

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South Korea gets sanctions exemption for railway survey

November 24th, 2018

Benjamin Katzeff Silberstein

Reuters:

South Korea said on Saturday it had received sanctions exemptions from the U.N. Security Council for a joint survey of inter-Korean railways, the first step towards reconnecting rail and road links cut during the 1950-53 Korean War.

In April, the leaders of the two Koreas agreed to adopt practical steps to reconnect railways and roads as part of efforts to improve bilateral relationships.

“The sanctions exemption has big implications given that the project has garnered recognition and support from the United States and the international society,” South Korea’s presidential spokesperson Kim Eui-kyeom said.

He expressed hope of quick construction of the railways, which he said will take inter-Korean cooperation to a new level.

South Korea requested an exemption for deliveries of fuel and other equipment needed to conduct the railway survey in the North, Yonhap News Agency said.

Pyongyang is under wide-ranging U.N. sanctions for its nuclear weapons and ballistic missile programs.

In October, the two Koreas agreed to carry out joint field studies on transport plans, with a ground-breaking ceremony in late November and early December.

But the plan was delayed amid stalled talks between Washington and Pyongyang following an unprecedented summit in June at which the two sides agreed to work toward nuclearization and peace on the Korean peninsula.

Full article:
South Korea secures U.N. sanctions exemption for inter-Korean railway survey
Hyunjoo Jin
Reuters
2018-11-24

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Mt Kumgang tours unlikely to be resumed this year, because of sanctions

November 19th, 2018

Benjamin Katzeff Silberstein

Reports Yonhap, with comments by ever-optimistic Hyundai Asan officials:

The head of Hyundai Group on Monday expressed reservations about any quick resumption of a stalled tour program to North Korea’s scenic mountain resort.

“At this point, the situation is difficult for the tour program to be resumed within this year, but I think it will be done in the near future,” Hyundai Chairwoman Hyun Jeong-eun told reporters after returning from Mount Kumgang on the North’s east coast.

She made a two-day visit to Mount Kumgang to celebrate the 20th anniversary of the cross-border tour program.

Earlier in August, Hyun had said she expects the project to be resumed within this year.

She said no detailed discussions on economic cooperation between the two Koreas had been made during her visit.

“We are preparing so that the inter-Korean economic projects can be resumed when the U.S. lifts sanctions,” Hyun said, adding that there is not much for a private enterprise to comment on the matter.

About 100 South Koreans and 80 North Koreans officials, as well as some 500 North Korean residents, attended the first celebratory event in four years at the east coast resort. It was jointly organized by Hyundai Group and the North’s Korean Asia-Pacific Peace Committee, a North Korean body that handles inter-Korean affairs.

Full article:
Tour program to Mount Kumgang unlikely to be resumed this year: Hyundai chief
Yonhap News
2018-11-19

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