American released from North Korea

October 21st, 2014

The AP reports that Jeffrey Fowle has been released from the DPRK.

Read here.

Previous stories on the case here.

Here is additional coverage in Reuters, Daily NKThe Guardian.

Share

Pyongyang building collapse identified (UPDATED)

October 20th, 2014

UPDATE 9 (2014-10-20): Satellite imagery confirms the North Koreans are rebuilding on the site of last summer’s building collapse:

Building-collapse-2014-7-3

This image was taken on 2014-7-3, so it could be completed by now.

More at Radio Free Asia (in Korean)

UPDATE 8 (2014-7-7): NK News reports that the DPRK requested assistance in relationship to the collapsed building.

“The Korea Rescue Association got a request from the ‘General Bureau of Red Star Construction’ for assistance related to the Pyongyang apartment collapse, [and] on July 6th they submitted a request to visit North Korea,” a Daily NK translation of the statement said.

The statement added that the Korea Rescue Association requested entry into North Korea on June 26 to further investigate the situation, but were still awaiting a decision.

Unusually, the request for South Korean assistance appears to have come nearly four weeks after the May 13 accident occurred, on June 9.

UPDATE 7 (2014-7-3): NK News provides independent corroboration to North Korean claims that a Pyongyang apartment block collapsed on May 13, confirming the subsequent search, rescue and clean-up operation was completed in under just four days.

UPDATE 6 (2014-6-12): The Daily NK reports that  rumors are circulating in Pyongyang that the building collapse was the fault of Jang Song-thaek.

UPDATE 5 (2014-6-3): NK News has an exclusive report done with All Source Analysis on the building collapse. Includes great information and the first satellite images of the site after the collapse.

UPDATE 4 (2014-5-24): The Daily NK offers information purported to come from Pyongyang.

UPDATE 3 (2014-5-22): Everyone seems to agree that the decision to go public was made only after there was “nothing more to see here”. The motivation for going public with this story is unknown–even today accidents resulting in loss of life are rarely reported in the DPRK media. There are two (at least) theories. One theory is that foreign reporters were tipped off and began calling North Korean embassies asking questions. A second theory is that North Koreans were spreading news of the collapse via cell phone so the government needed to take public action. These theories are not mutually exclusive. We still do not know when exactly the building collapsed or how many were injured or killed. None of the injured victims have appeared in the DPRK media.

The speed with which the rubble was removed from the site is also remarkable. Where was it taken? Maybe one day a satellite image will appear that reveals the answer. However, judging from the official photos, it appears to me that some rubble was not removed, it was simply covered over with dirt.

UPDATE 2 (2014-5-21): Kim Jong-un followed up the building collapse with a visit to the Taesongsan General Hospital where he met with injured soldiers (construction workers?) and orphans. If there were any survivors from the collapsed building at the hospital, the media reports did not mention them. Next he visited new apartment housing for instructors at Kim Chaek University of Technology. Let’s hope these apartment buildings don’t collapse.

UPDATE 1 (2014-5-19): This was picked up by the following media: The Diplomat, 노컷뉴스, Radio Free Asia, 국제신문, Reuters. The Choson Ilbo used the information from this report but did not cite the source.

ORIGINAL POST (2014-5-18):

KCNA-collapse-building

Phyongchon-building-collapse-2

KCNA has announced the tragic collapse of a high-rise apartment building in Phyongchon District:

It is the consistent stand of the Workers’ Party of Korea and the state to prioritize the interests and conveniences of the people and hold them absolute and protect their lives and properties. But there occurred a serious accident in the construction site in Phyongchon District, Pyongyang on May 13 as the construction of an apartment house was not done properly and officials supervised and controlled it in an irresponsible manner. The accident claimed casualties. Right after the accident the state emergency mechanism was put into action to conduct an intensive campaign to rescue survivors, treat the wounded and arrange the scene of the accident. The rescue operation came to an end on May 17. Minister of People’s Security Choe Pu Il, General Officer of the Korean People’s Internal Security Forces Sonu Hyong Chol, Chairman of the Pyongyang City People’s Committee Cha Hui Rim, Chief Secretary of Phyongchon District Committee of the WPK Ri Yong Sik and other officials concerned met the bereaved families, citizens in the district and other Pyongyangites to express deep consolation and apology. Choe Pu Il said the responsibility for the accident rests with him as he failed to uphold well the WPK’s policy of love for the people. He repented of himself, saying that he failed to find out factors that can put at risk the lives and properties of the people and to take thorough-going measures, thereby causing an unimaginable accident. With nothing can he atone for the crime he committed against the people and he can never be pardoned, he said, repeatedly expressing deep apology to the bereaved families and other Pyongyang citizens. He made a firm pledge to make sure that the Ministry of People’s Security becomes a genuine security organ which always protects the interests, lives and properties of the people, true to the party’s noble intention of putting the popular masses above all. Sonu Hyong Chol said that he was chiefly to blame for the accident as he was in charge of the construction. He expressed heart-felt consolation and sympathy to the victims and the bereaved families and said he was making an apology, his head bent, to other Pyongyang citizens who were greatly shocked by the recent accident. The party has always stressed the importance of raising the quality of structure, but he did the construction in a slipshod manner as he did not have the proper stand of serving the people, thus causing such a serious accident, he said, making a solemn determination to do utmost to eradicate the aftermath of the accident and bring the living of the bereaved families to normal as early as possible. Cha Hui Rim said that the party has always called on the officials to become genuine and faithful servants of the people but he failed to have the proper control over the construction of the apartment houses as a man responsible for the living of the citizens of the capital city, thereby causing such a serious accident. He has no face to stand before the bereaved families and other Pyongyang citizens and feels deep compunction for them, he said, pledging to make sure that the officials of the Pyongyang City People’s Committee do their utmost to alleviate even a little the pain of the victims and the bereaved families and bring their living to normal at the earliest possible date and to prevent the recurrence of similar accident. Ri Yong Sik said that seeing for himself the victims in the scene of the accident, he felt as if his heart were falling apart and was too shocked to cry. He added that he could not raise his head for his guilty conscience as he failed to protect the precious lives of the people so much valued and loved by the party. He made an apology to the bereaved families and to the citizens in the district again, vowing to come to senses, though belatedly, and motivate the officials in the district to bring the living of the bereaved families to normal, take good care of them, find out every possible cause of accidents and take preventive measures and thus fully guarantee the lives and security of the people. Kim Su Gil, chief secretary of the Pyongyang City Committee of the WPK, said that the recent unexpected accident caused damage but there is loving care of our mother party which takes care of all people of the country and relieves their pain, adding that Marshal Kim Jong Un sat up all night, feeling painful after being told about the accident, instructed leading officials of the party, state and the army to rush to the scene, putting aside all other affairs, and command the rescue operation to recover from the damage as early as possible. All Pyongyang citizens are sharing sorrow with the bereaved families and victims, he said, adding that the party and the state are taking effective emergency steps to bring the living of the families of victims to normal and provide them with new houses. He called on all to overcome sorrow with courage.

Based on information in KCNA, I can offer a satellite image of the collapsed building (pre-collapse):

Collapsed building-Google-earth

The building was approximately 23 stories tall and approximately 15m x 23m per floor. Construction on the building began between May and September 2011 (image below)

Collapsed-building-September-2011

It is rather remarkable that the entire site could be cleared of debris in just four days. Additionally, I cannot see any serious damage to the surrounding buildings, though coverage is scarce. The neighborhood in which the collapsed building is located contains no less than 17  high-rises that are either under construction or recently completed. If I was living in one of these buildings I would not be feeling very confident right now.

Phyongchon-collapsed-building

These buildings were part of the DPRK’s speed housing construction campaign to celebrate Kim Il-sung’s 100th birthday. Here is coverage in the New York Times. Here is coverage in Yonhap. Here is coverage in NK News. Here is coverage in the Wall Street Journal. Here is coverage by Choson Exchange. Here is coverage in the Washington Post. Here is coverage in the Daily NK.

Share

Recent CRS reports on the DPRK

October 7th, 2014

The Congressional Research Service “recently” published two reports which relate to the DPRK:

The U.S.-South Korea Free Trade Agreement (KORUS FTA): Provisions and Implementation
September 16, 2014: 2014-9-16-KORUS-Kaesong
June 2, 2011: Imports-from-North-Korea-2011

(Although this report focuses mostly on US-ROK issues, there is detailed discussion of the complex negotiations around the Kaesong Industrial Complex (KIC).)

Iran-North Korea-Syria Ballistic Missile and Nuclear Cooperation 
April 16, 2014: 2014-4-16-Iran-Syria-Missile

You can download most former CRS reports dealing with the DPRK here.

 

Share

Senior DPRK officials to visit Seoul for close of Asian Games

October 3rd, 2014

According to Reuters:

Three senior North Korean officials will make a rare visit to South Korea on Saturday to attend the Asian Games closing ceremony in what could potentially bring a breakthrough in tense ties between the rival Koreas.

Heading the delegation will be Hwang Pyong So and Choe Ryong Hae, who are senior aides to North Korea’s supreme leader Kim Jong Un, South Korea’s Unification Ministry spokesman told a news briefing.

The announcement of the visit comes as a surprise because Pyongyang has been issuing invectives toward the South and President Park Geun-hye, criticising her calls for Pyongyang to end its arms programme and improve human rights conditions.

Hwang is the head of the North Korean army’s General Political Department, a powerful apparatus loyal to the secretive country’s leader and a key post overseeing the 1.2-million-member military.

Here is coverage in the Associated Press.

Here is coverage in Yonhap.

Here is coverage in the New York Times.

Here is coverage in the Korea Times.

Here is coverage in the Washington Post.

Here is Aidan Foster Carter in NK News.

Interesting analysis on the story in the Daily NK which provides a rational for the visit based on domestic politics.

Additional Information

1. NK Leadership Watch has bios of the men: Hwang Pyong So, Choe Ryong HaeKim Yang Gon

2. Here are bios on Wikipedia: Hwang Pyong So, Choe Ryong hae, Kim Yang Gon

3. Here is the South Korean MOU leadership organization chart where you can see these individual’s positions within the system.

4. Andray Abrahamian writing in 38 North last year on sports.

Share

Hillside farming

October 1st, 2014

The US State Department’s Humanitarian Information Unit put out the following map of hillside farming in the DPRK.

US-DOS-HIU-DPRK-Food-shortage-2014-9-24

Click image for larger (PDF) version.

Share

DPRK Foreign Minister Ri visits UN

September 27th, 2014

UPDATE 1 (2014-9-27): Martyn Williams has posted video (translated into English) of Minister Ri’s full speech.

For those who do not wish to listen to the whole speech, here is a transcript (English, PDF).

ORIGINAL POST (2014-8-30): According to KBS:

North Korea’s Foreign Minister Ri Su Yong is scheduled to visit the United States in mid-September for a United Nations general assembly in New York. This marks the first time a North Korean foreign minister will visit the U.S. in 15 years.

Sources have said Ri has personally requested to make a keynote address at the session as a state representative.

The last time a North Korean foreign minister was present for a United Nations general assembly was in 1999 when Paek Nam Sun held the position. In 1992, Kim Yong Nam had visited the U. S. to attend the session.

As these were the only occasions a high-ranking North Korean foreign ministry official had taken part in the UN general assembly since the North became a member state in 1991, speculations have risen over Ri’s pending visit.

One South Korean diplomatic source said Ri was not attending the assembly “just to make a keynote speech,” but rather to engage in negotiations with Washington for a change in chilled relations.

Read the full sotry here:
N. Korea Foreign Minister to Visit U.S. For First Time in 15 Yrs
KBS
2014-8-30

Share

North Korea’s donor fatigue

September 25th, 2014

The Wall Street Journal reports on the difficulties the UN World Food Program faces trying to find supporters for its operations in North Korea:

The United Nations aid program for malnourished North Koreans may close after raising only a fraction of the money it needs to operate in the country, a senior U.N. official said in a call for donations.

“We may need to scale down or think about closing altogether,” Dierk Stegen, the Pyongyang-based North Korea head for the U.N. World Food Program, said in an interview.

The agency, which has operated in North Korea since 1995, could shut early next year if there is no indication it will be able to raise needed funds by the end of October, he said. One complication is that North Korea’s humanitarian crisis has been overshadowed by the conflict in Syria and Ebola outbreak, he said.

While North Korea is getting better at feeding its people, hundreds of thousands of young infants and their mothers remain chronically malnourished, he said.

Contributions from private organizations and the South Korean government in recent weeks have helped, but the program is far from its goal of $50 million, already a significant reduction from the original target of $200 million it set last year.

The North Korea food-assistance program has drawn flak from critics who say the regime takes advantage of the agency’s largess, devoting its resources to developing its nuclear weapons program and constructing amusement parks while its people suffer. Critics also say the agency can’t be sure its assistance is reaching the intended recipients.

Nicholas Eberstadt, a political economist at the American Enterprise Institute in Washington who has studied North Korea’s food situation, said that the WFP’s work in the country was “a disappointment—perhaps a terrible disappointment,” arguing that the agency has put up little resistance even as Pyongyang restricts oversight from foreign aid groups.

“Outside humanitarian assistance will not work in North Korea unless it is ‘intrusive’—and the WFP has no stomach for such work,” Mr. Eberstadt said.

Mr. Stegen acknowledged past shortcomings in its ability to monitor the distribution of its aid, but blamed a lack of funding and cited recent improvements in its access inside the country. He said that the WFP can now get permission within 24 hours to visit any school or household that is receiving its aid. In the past, two weeks’ notice was required.

Mr. Stegen said that criticism of a government’s priorities isn’t unique to North Korea, and urged donors to prioritize vulnerable infants over politics.

“Intervention and assistance on a humanitarian basis should be separated from political things,” he said.

Earlier this month, South Korea’s government approved $7 million in new funding to the WFP, its first such contribution since 2007. While South Korea’s conservative government has talked tough on North Korea, it has also pursued a policy of “humanity” toward the North, particularly infants and young mothers.

The U.S., by far the largest donor to the WFP’s North Korea work, hasn’t contributed since 2009, when Pyongyang tightened its rules on monitoring food aid by restricting the number of Korean-speaking monitors allowed into the country, according to a U.S. Congressional Research Service report published in April.

The WFP’s fundraising efforts have also been hampered by rising awareness of North Korea’s human-rights violations. Earlier this year, a special U.N. commission published a landmark 400-page report which said the regime selectively starves its population based on factors like political loyalty, and recommended the U.N. Security Council refer Kim Jong Un and other senior officials to the International Criminal Court.

Ahead of the U.N. General Assembly, U.S. Secretary of State John Kerry on Wednesday called North Korea’s system of prison camps “unfathomable” and a sign of what he described as “barbarity, inhumanity—I think you can call it evil.”

Mr. Stegen said North Korea had markedly improved its capacity to produce food for its people since a devastating famine in the 1990s. He said that fewer people in the country remain hungry today, even as the population has increased.

But he cautioned that the country’s agricultural efforts have focused too much on producing rice and other grains, at the expense of protein. That has led to malnourishment of infants and children under the age of four, he said, putting them in danger of stunting, even as Kim Jong Un has made a public show of encouraging fisheries as a potential source of protein.

“For many of the children of North Korea, it’s already too late,” said John Aylieff, the WFP’s deputy regional director for Asia. “They’ve been dealt a life sentence of impaired mental functioning and impaired physical development.”

A drought earlier this year has also meant a throttling back of government rations to ordinary citizens, which fell to about 250 grams a day, Mr. Aylieff said. That is less than half the targeted rations, and the lowest in several years.

As a result, the aid agency is expecting a surge in acute malnutrition this year. “We hope potential donors will see the humanitarian imperative,” Mr. Aylieff said.

Marcus Noland, an economist and North Korea expert at the Peterson Institute for International Economics in Washington, said that given the WFP’s funding problems, its ability to monitor its work would be limited.

“Trying to maintain an underfunded program in that environment is practically inviting an aid diversion scandal,” he said. But the WFP’s absence from North Korea would also likely exacerbate any food crisis.

“The advantage of having the WFP in-country in even a limited capacity is that they are pre-positioned to monitor conditions and respond if there is an emergency,” Mr. Noland said.

Read the full story here:
U.N. North Korea Food Program in Danger
Wall Street Journal
Jonathan Cheng
2014-9-25

Share

Second session of 13th Supreme People’s Assembly

September 25th, 2014

UPDATE 2 (2014-9-25): Kim Jong-un did not attend the SPA meeting.

According to the Wall Street Journal:

North Korea’s young leader wasn’t in his customary seat as the country convened its rubber-stamp parliament Thursday, adding to South Korean media speculation that Kim Jong Un may be ill.

Only part of the meeting of the Supreme People’s Assembly was shown on state TV, but Mr. Kim wasn’t present and apparently missed the meeting for the first time since he took power after the death of his father Kim Jong Il in December 2011, according to an official for the South’s Unification Ministry who spoke on condition of anonymity because of office rules.

The usually ubiquitous Mr. Kim, the third member of his family to rule the country, hasn’t been seen in state media since attending a Pyongyang concert on Sept. 3. He was shown limping on television in July and again earlier this month, and South Korean media have speculated that Kim has been ill, although there has been no discussion of the absence in the North’s state-run media.

According to Reuters:

Kim, who is considerably overweight, has not featured in state media broadcasts since appearing at a concert alongside his wife and former state entertainer Ri Sol Ju this month.

In July, he was seen walking with a limp at an event with key officials.

But analysts warned against reading too much into Kim’s absence.

“Kim Jong Il didn’t attend every time, either,” said Chris Green, a North Korea expert at Seoul-based Daily NK website. “Moreover, we know that the SPA primarily performs a demonstrative function, it is not a true decision-making body.”

UPDATE 1 (2104-9-25): KCNA reports on the second session of the 13th SPA. Most of the copy is dedicated to continuing education reforms, however at the end of the article, personnel changes at the National Defense Commission are announced:

It recalled Deputy Choe Ryong Hae from the post of vice-chairman of the National Defence Commission (NDC) of the DPRK due to his transfer to other post and Deputy Jang Jong Nam from the post of member of the NDC of the DPRK due to his transfer to other post.

It elected Deputy Hwang Pyong So to fill the vacancy as vice-chairman of the NDC of the DPRK and Deputies Hyon Yong Chol and Ri Pyong Chol to fill the vacancy as members of the NDC of the DPRK at the proposal of Marshal Kim Jong Un.

This list of NDC members (as of October 2013 )can be found here.

Reuters notes:

At the meeting, state media said, Choe Ryong Hae had been removed from the post of vice chairman of the National Defence Commission, a body chaired by Kim, and was replaced by Hwang Pyong So.

Hwang is a member of a powerful faction created in the 1970s under former leader Kim Jong Il, the father of the current leader, to boost a personality cult around his family.

Choe had been widely seen as a new right-hand man to Kim Jong Un after he purged his uncle last year, but had since fallen back into the shadows.

“Hwang’s appointment as NDC Vice Chairman shows that he has truly risen to become the regime’s de facto number two official,” said Michael Madden, a North Korean leadership expert and contributor to the 38 North website.

Hwang was appointed “according to the wishes of Marshall Kim Jong Un”, the North’s official KCNA news agency said.

Here is the full story:

2nd Session of 13th Supreme People’s Assembly of DPRK Held

Pyongyang, September 25 (KCNA) — The 2nd Session of the 13th Supreme People’s Assembly (SPA) of the DPRK was held at the Mansudae Assembly Hall Thursday.

Present there were deputies to the SPA.

Officials of the party, armed forces and power organs, public organizations, ministries, national institutions and the fields of science, education, literature and art, public health and media attended it as observers.

All the participants observed a moment’s silence in memory of President Kim Il Sung and leader Kim Jong Il.

SPA Chairman Choe Thae Bok made an opening address.

The session discussed agenda items on summing up the implementation of “On Enforcing Universal 12-Year Compulsory Education”, the Ordinance of the SPA of the DPRK, and an organizational matter.

Deputy Pak Pong Ju, premier of the Cabinet, made a report on the first agenda item.

The reporter said that the 6th Session of the 12th SPA held in September, Juche 101 (2012) promulgated Ordinance on Enforcing Universal 12-Year Compulsory Education in line with the new requirements of the developing revolution.

According to the report, a work for successfully enforcing the schooling has been dynamically pushed forward as the one involving the whole state, all people and the whole society and signal successes have been made in it.

The work for operating the six-year secondary schools by dividing them into three-year junior secondary schools and three-year senior secondary schools has been wound up in a brief span of time. The first phase programs for the universal 12-year compulsory education were worked out in a matter of one and half years and textbooks of new contents and style were compiled.

Expenditure has been increased in educational field at the state budget, the State Planning Commission, the Ministry of Finance, provincial people’s committees and relevant institutions have ensured funds needed for educational work as planned, thus strengthening the material and technological foundation of schools.

Over the past two years since the promulgation of the ordinance new classrooms have been built or constructed on an expansion basis at schools across the country and many school things produced.

The reporter referred to the tasks facing the field of education.

He underlined the need to build well the ranks of teachers and decisively raise their qualifications and roles.

The general senior secondary schools should teach students with main emphasis on general secondary knowledge and senior secondary technical schools should make preparations in a responsible manner for giving education in basic technology to suit the economic and geographical peculiarities of the relevant areas while giving general education in conformity with the operation of senior secondary technical schools, new type schooling, on a trial basis, he noted.

He also underlined the need to positively push ahead with the work for putting the nation’s universal general secondary education including genius education on a new high stage, reinforce the research forces at educational and scientific research institutions and increase their responsibilities and roles.

He called for improving the conditions and environment for education to be fit for the appearance of a highly civilized socialist country.

Speakers at the session renewed their resolution to decisively improve the quality of education to meet the realistic requirements of the developing education in the age of knowledge-based economy and suit the trend of the world and thus train the younger generation as more dependable revolutionary talents of Juche type equipped with perfect general secondary knowledge, modern basic technological knowledge and creative ability.

The session adopted “On Comprehensively Enforcing Universal 12-Year Compulsory Education and Decisively Improving Its Quality”, the Decision of the SPA of the DPRK.

It discussed the second agenda item.

It recalled Deputy Choe Ryong Hae from the post of vice-chairman of the National Defence Commission (NDC) of the DPRK due to his transfer to other post and Deputy Jang Jong Nam from the post of member of the NDC of the DPRK due to his transfer to other post.

It elected Deputy Hwang Pyong So to fill the vacancy as vice-chairman of the NDC of the DPRK and Deputies Hyon Yong Chol and Ri Pyong Chol to fill the vacancy as members of the NDC of the DPRK at the proposal of Marshal Kim Jong Un.

ORIGINAL POST (2014-9-4): According to KCNA:

DPRK Supreme People’s Assembly to Be Convened

Pyongyang, September 5 (KCNA) — The Second Session of the 13th Supreme People’s Assembly of the Democratic People’s Republic of Korea will be held in Pyongyang on September 25, Juche 103 (2014).

A relevant decision of the Presidium of the Supreme People’s Assembly was promulgated on Sept. 4.

Information on the first session of the 13th SPA can be found here.

Information on the election of the 13th SPA can be found here.

Here is what the Daily NK has to say:

It is the norm for the SPA to convene each spring to carry out the core responsibilities of ratifying personnel changes and hearing budgetary reports. Two of the more noteworthy results of the meeting in April this year were then-Director of the KPA General Political Department Choe Ryong Hae being made a deputy in the National Defense Commission, and Ri Su Yong being handed the foreign affairs portfolio. Ri, a seasoned diplomat, is scheduled to speak to the UN General Assembly later this month.

Conversely, second sessions do not occur every year as a matter of course; rather, they are convened when necessary for the accomplishment of Workers’ Party objectives. One such session convened on September 25th, 2012, for instance, resulted in wide-ranging changes to the state education system, most notably the addition of a 12th year of mandatory schooling.

As a result, attention is set to focus on personnel shifts and the possibility of major policy announcements.

Share

Energy supply in the DPRK’s SEZs

September 11th, 2014

The Nautilus Institute has published an interesting paper on energy infrastructure in the DPRK’s initial four special economic zones: Rason, Hwanggumphyong, Kaesong, Kaesong, and Kumgang.

Here is the publication information and  a link:

“Supplying Energy Needs for the DPRK’s Special Economic Zones and Special Administrative Regions: Electricity Infrastructure Requirements”
Nautilus Institute
Roger Cavazos & David von Hippel
2014-8-19

Here is the introduction:

The Democratic Peoples’ Republic of Korea (DPRK) uses special economic zones as a mechanism for engaging in commercial activity with other nations without substantially converting its economy to a market model; earning hard currency while reducing some of the social and political risks associated with a broader opening of the DPRK economy. The DPRK recently announced its intent to increase the number of Special Designated Zones, including Special Economic Zones (SEZ) and Special Administrative Regions (SAR) in the country by fourteen.[1] In most cases, these Special Designated Zones (we will use “Special Zone”, or “SZ”,as the generic term in this Working Paper to apply to Special Designated Zones) will require energy supply (and demand) infrastructure that is now missing, or insufficient, at all existing and proposed Special Zone sites. Even though past is not prologue—and the mechanisms for supplying energy needs to new SZs may be different than those used in the past, this paper seeks to briefly describe already existing Special Zones in terms of their present energy requirements. Present requirements provide rough estimates of the energy requirements of the newly proposed zones. Specifically we examine: the Rason Special Economic Zone and Special Administrative Region, the Hwanggumphyong Special Economic Zone, the Wihwado Special Economic Zone, the Kumgang Mountain Tourist Area, and finally, the Kaesong Industrial Zone. These specially designated zones ideally contribute to economic development in North Korea as well as provide economic benefits to the Chinese and Russian provinces bordering North Korea. Chinese plans to resuscitate and/or invigorate the economies of their three Northeast provinces bordering North Korea would certainly be moved forward by trade with a richer North Korea and access to strategic North Korean ports just across the border. Although this paper does not cover Russian plans, the motivations for Russian investments in North Korean SZs are likely similar—the desire to boost the economies of the areas of the Russian Far East that adjoin the DPRK, and to improve access to markets in Asia.

There is a limited but growing amount of information available to understand how these Special Zones are defined by North Korean policy, how they are currently faring in terms of economic performance, and what future zones will likely require in terms of energy usage. There is also a growing body of rules and regulations by which North Korea and China plan to govern these zones. Except for the Kaesong industrial complex, it appears that all these zones are significantly short on the energy infrastructure necessary to supply their modest current demands, let alone any future projected demands. North Korea’s decision to declare several such zones in North Korea’s interior may possibly indicate a desire to stitch together North Korea’s electrical transmission and distribution networks which are currently more a patchwork of regional grids rather than a unified national grid. Previous Special Zones have always been on or near North Korea’s periphery. Because previous zones were located on the DPRK’s frontiers, they were largely able to “plug in” to already developed electricity transmission and distribution systems on the other side of the border (in China, Russia or South Korea). While we present no specific calculations here, the cost to renew the DPRK’s entire transmission and distribution (T&D) system will certainly cost billions to tens of billions of dollars which could consume on the order of 10 percent or more of North Korea’s GDP for 5 to 10 years, assuming, as estimated by Republic of Korea (ROK) sources, that North Korea’s GDP is in the neighborhood of 40 billion dollars. The costs of T&D renewal are thus well beyond anything North Korea is likely to be able to afford to do in the short-term on anything but a piecemeal basis.

Despite gaps in our knowledge of how Special Zones in the DPRK have formed and operate or will operate, there is a substantial amount of information available from English, Chinese and Korean-language sources describing the basic plans for investment and the businesses that North Korean, Chinese, and in some cases Russian partners hope to develop in some Special Economic Zones. What is missing from the plans for which information is available, however, are detailedplans for building the energy infrastructure required to support the amount of economic activity (in factories, ports, hotels, workers quarters, and other elements of the SZs) envisioned. The electricity infrastructure required to support the economic plans is modest by most industrial standards. The existing infrastructure in most of the SZs, however, is grossly inadequate, and thus will require significant international investment to allow the SZs to operate as planned.

Investing in SZ infrastructure is likely to be more complex than a typical industrial investment. Sources of investment funds for SZ infrastructure could include businesses from a number of nations, and/or government or multilateral funds. Each potential lender/investor will have its own criteria for deciding on whether a given investment is reasonable or too risky. In theory, involving a number of different actors from different nations in DPRK SZ infrastructure investments would help to diversify the risk borne by any given company or nation, and to create a broader constituency for working with North Koreans using business practices that comply with international law and standards. In part, a broader constituency of coordinated investors could also help to discourage the “rent-seeking” by officials that is often a part of projects in the DPRK (and in many other countries). Because the amount of infrastructure-building required is high, there is significant potential for illegal rent-seeking, that is, for example, for DPRK authorities to inflate the price of “surveys” or permits, or the cost of securing import rights for equipment needed for the SZs, in order to gain personally from the transaction.

Working conditions in SZs will be another area of concern for investors and for foreign firms seeking to operate facilities in new or existing SZs. Anecdotal reports suggest that industrial facilities in general in the DPRK tend to operate with limited evident concern for worker safety. In the absence of pressure from investing companies, it is also likely that working conditions will remain poor and dangerous, as there does not appear to be a significant set of DPRK regulations related to industrial safety. Nor, for that matter, does there appear to be a well-established and well-funded government body dedicated to establishing, monitoring and enforcing industrial safety regulations.

This paper describes several of the Special Zones now operating in or in the advanced planning process in the DPRK, together with what is known about plans for their development. For each, it provides a description of the likely energy requirements, based on what can be determined regarding planned activities at each site, and examines adjoining energy infrastructure to identify probable degrees of energy shortfalls that foreign investors, working with DPRK counterparts, will need to overcome. Some of issues and policies that policymakers inside and outside of the DPRK will need to consider in order to arrange for the financing and construction of the requisite infrastructure to operate the SZs.

You can download the PDF here.

Share

DPRK fun: Guess how many members of the women’s team are civilians

September 11th, 2014

DPRK-national-team-2014

Share