KCNA reports on Kangryong Green Zone

December 9th, 2016

The Kangryong Green Zone was first announced on a promotional VCD given to foreign participants of a SEZ conference in Pyongyang in October 2013. However, the project was not formally announced in KCNA until July of 2014. KCNA has not mentioned it again until today.

According to KCNA:

Pyongyang, December 9 (KCNA) — The DPRK has pushed ahead with the project to develop Kangryong County of South Hwanghae Province into an international green model zone.

Kangryong County has favorable conditions for the project, as it is bound on sea rich in marine resources like sea cucumber and scallop. And its beachfront is abundant in energy resources, including wind, solar and tidal powers.

The county has circumstances favorable for sustainable development of agricultural production by means of bettering its ecosystem with organic farming method and introducing ring-shaped rotation production system.

In this regard, Hong Kil Nam, director of the Secretariat of the Korea Green Research and Development Association, told KCNA:

The county is highly potential to be a world-level green zone for its excellent natural ecological environment and good conditions for the development of fishery and agriculture.

With an increasing interest of the government in the county, a master plan for developing the whole county into an international green model zone was well matured in keeping with the reality of the DPRK and the world trend of development.

The master plan regards it as its principle to protect and improve the county’s natural ecological environment, set up a system of ecological circulation featuring the green zone, raise the utilization of resources and energy to the maximum and achieve the sustainable economic development. To this end, the plan includes such detailed projects as construction of an industrial zone for production of green goods, infrastructure and tourist zones with populated, forest and other areas.

Meanwhile, it is gaining momentum to draw up detailed plans and create a favorable environment for investment.

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30 Ancient Koguryo Tombs unearthed in DPRK

December 8th, 2016

Pictured Above (Google Earth): Chondok-ri ( 38.481739°, 125.927308°) with a 2km radius indicating the approximate location of the tombs

According to KCNA (2016-12-8):

Archaeologists of the DPRK Academy of Social Sciences have recently unearthed a large group of tombs dating back to Koguryo Kingdom (B.C. 277-A.D. 668).

In this regard, Dr. Cha Man Dal, head of an excavating party under the Archaeological Institute of the academy, told KCNA:

The group tombs are located on a hill, about 2 kilometers northeast of Chondok-ri seat, Pongsan County of North Hwanghae Province.

There are nearly 30 tombs in four rows in an area of 185 square meters with individual ones around it, which shows the area was a big burial site with hundreds tombs.

Most of tombs are 10 meters in diameter and 2 meters in height and the biggest one is 17 meters in diameter and 2.4 meters in height. The tombs are arranged at intervals of 10-20 meters and can be divided into the earthen one with a stone chamber and the other with two stone chambers, all of them with arch-style or inclined-plane ceilings before getting collapsed.

Unearthed from the tombs were human and horse bones, bronze spoons and decorations, silver-clad iron nails, iron handles of coffin, grey earthenware and other remains.

The newly-unearthed tombs and remains will serve as material evidence to give fresh understanding of advanced cultural development of Koguryo, a powerful state that existed in the East for a thousand years, and precious treasures showing the good qualities of the Korean nation.

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Musan Market damaged in flooding

December 8th, 2016

Other outlets have already covered the recent flood damage using satellite imagery (see here and here).  I added one small contribution in Radio Free Asia today…Here is a satellite image of the Musan Market (무산시장) taken before and after the recent flooding:

Images: Google Earth. Top: 2014-1-13, Bottom: 2016-9-14

Nearly half of it was washed away when the river rose.

I will have more to say on this topic after the holidays.

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New E-Commerce Website ‘Manmulsang’ Launched

December 8th, 2016

Institute for Far Eastern Studies (IFES)
2016-12-7

A new shopping website, ‘Manmulsang’, has been launched in North Korea. The North Korean site, announced that there is “recently in our republic a new shopping website [e-commerce] offering a wide variety of commercial services through the state computer network and mobile telecoms network.”

According to the site, Manmulsang was developed by Yonpung Commercial Information Technology Company, and allows users to find information about domestically produced and imported products, as well as to read information about the economic activities of vendors registered on the website. Additionally, it has features including an ‘e-shop’, ‘economic information’, ‘upload product’, ‘announcements’, ‘my products’, ‘restaurant information’ and ‘food order’.

There are hundreds of products available in the ‘e-shop’, with the site saying “this site has new and special service features that distinguish it from sites that have existed before: it allows users to read domestic and foreign economic information – economic information services – and to order food via food order services.”

North Korea has demonstrated an interest in e-commerce since 2005. In an article entitled ‘The features of e-commerce and issues with its development’ published in Sahoegwahakwon hakbo [Social Science Studies Review] (Issue 2, 2005), the author, North Korean professor Ri Haeng Ho, says “With the rapid development of information technology, new phenomena are evident that were not previously visible in the economy”. In the article, Ri introduces the features, advantages and tasks related to e-commerce.

Ri also says that “beyond the development of e-commerce, commercial distribution is expanding into previously unimaginable areas. . . . Trade is expanding through the internet, and e-markets are being launched, providing information relevant to the market price of traded goods and thus facilitating trade.” Thus, Ri states e-transactions are characterized by the openness of commercial activity, the centrality of small, specialized retailers, and the emergence new specialist brokerage services.

Ri also argued that “the introduction of e-commerce will, with the aid of information technology, maximize effectiveness in commercial transactions, reduce production costs and raise profit. . . . E-commerce can cut waste and maximize cost reduction.”

As advantages he listed: (1) saving manpower and time through overcoming physical distance, standards and divisions; (2) reducing prices through using virtual shops; and (3) minimize unnecessary production and waste.

Ri goes on to emphasize that while company-company and company-individual transactions are highly active, there is a need to expand electronic payment systems, deal with tax payment issues, revise relevant laws, and establish computer security systems.

An article entitled “General Understanding of e-commerce” carried in Social Science Studies Review (Issue 3, 2005) also asserts that “In order to creatively apply the results of e-commerce transactions to our country’s specific trade conditions and circumstances, there is a need to deepen research into e-commerce transactions.”

At the same time, the Swiss Agency for Development and Cooperation (SDC) opened the Pyongyang Business School in July 2005, and the school has taught e-commerce, advertising and public relations management, new product development and marketing strategy, among other subjects, to North Korean government cadres, trade company personnel, and foreign trade research institution personnel, most of whom are in their forties and fifties.

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Number of defectors up by around 17 percent in 2016

December 7th, 2016

By Benjamin Katzeff Silberstein

Reports Yonhap:

The number of North Korean defectors coming to South Korea rose 16.7 percent on-year in the first 11 months of the year, data showed Wednesday, as more elites and overseas workers chose to flee their home country.

A total of 1,268 North Koreans came to South Korea in the January-November period, compared with 1,086 the previous year, according to the Ministry of Unification.

As of end-November, the total number of North Korean defectors reached 30,062, it showed. The ministry said that the number of North Koreans coming to the South would reach around 1,400 this year, if it grows at the current pace.

The number of defectors reaching the South peaked at 2,914 in 2009, but the pace of growth has slowed down since 2011 as North Korean leader Kim Jong-un has strengthened border control and surveillance over the country’s population.

But this year, the pace has picked up, helped by a rise in defections by North Korean elites and workers toiling overseas, the ministry said.

North Korea is pressing its diplomats and overseas workers to send hard currency earnings home as it is squeezed by tough sanctions handed down by the U.N. Security Council.

Unification Minister Hong Yong-pyo said that the imposition of international sanctions has promoted more North Korean elites to escape the regime.

“North Korea is showing a sensitive response to the U.N. sanctions and is being stifled (under the sanctions regime),” Hong said at a forum earlier in the day.

I wonder if there is actual quantitative evidence to back up the claim that the increase is caused by elite defections. The proportion shouldn’t be too hard to count, though I’m currently not aware of statistics on this.

Full article:
Number of N.K. defectors up 16.7 pct on-year in first 11 months
Yonhap News
2016-12-07

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North Korea’s equalizing credit system?

December 7th, 2016

Benjamin Katzeff Silberstein

Daily NK:

A deferred payment system is becoming popular in North Korea for garment production, manufacturing, and food services, wherein raw materials are provided for credit instead of cash. As marketization accelerates in North Korea, these types of private transactions are helping to build trust between finance providers and are opening the door to citizens who would otherwise not have enough money to start a business.
“Operating a restaurant near a train station or market has now become a possibility for more North Koreans than ever before, even those who are not members of the donju (newly-affluent middle class). Restaurants tend to have high profit margins and a lower risk of insolvency, which has merchants feeling more comfortable providing credit for such endeavors,” a source in Kangwon Province told Daily NK on December 2.
“As market controls are easing, suppliers are entering into intense competition with each other. Some merchants have begun to deliver restaurant supplies on credit to businesses that are performing well. In doing so, they have been able to capture larger proportions of the market.”
“This has opened up new possibilities for people with good business acumen that don’t have the capital to establish a business. Such individuals are able to acquire both a storefront and raw materials on credit. That has created more opportunities for new businesses to grow.”
Full article:
Credit system fuels new market entrants
Seol Song Ah
Daily NK
2016-12-07
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Orascom’s Ora Bank closes

December 5th, 2016

According to the Egyptian Daily News:

Orascom Telecom Media and Technology Holding will shut down Orabank, its affiliate bank in North Korea, due to US sanctions on the nation, according to an announcement on Sunday.

The company, owned by business tycoon Naguib Sawiris, added in a note to the Egyptian Exchange that shutting down the bank in Korea is a result of force majeure due to the sanctions imposed by the US Office of Foreign Assets Control on North Korea.

Orascom noted that its subsidiary in Korea will transfer all cash and liquid assets.

The company added that its subsidiary, Koryolink, will continue operating in Korea despite the sanctions.

Shortly after the banks closing was announced, Naguib Sawiris announced his resignation as CEO of OTMT . You can read the Press Release and coverage in Forbes.

According to the Chosun Ilbo:

Naguib Sawiris resigned a day after Orascom decided to shut down a branch of its affiliate bank Orabank in Pyongyang under sanctions imposed by the UN Security Council and the U.S. Treasury Department.

“Sawiris has done brisk business in the U.S. and Europe and has much of his assets in the West,” a source said. “So he has no choice but to look for an exit in the face of the sanctions.”

Sawiris has a U.S. passport and is therefore directly affected by sanctions that penalize U.S. citizens from doing business with the North, according to investigative website Finance Uncovered.

Orabank in Pyongyang is linked to Foreign Trade Bank of North Korea, which has been blacklisted by the U.S. for serving as a funnel for the regime’s nuclear weapons development.

Here are links to previous posts on cell phones, Orascom, and Ora Bank.

Here is coverage in North Korea Tech.

 

Read the full story here:
Sawiris shuts down affiliate bank in North Korea due to US sanctions
Egyptian Daily News
2016-12-4

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The November 2016 North Korea sanctions: some perspective

December 1st, 2016

By Benjamin Katzeff Silberstein

Responding to North Korea’s second nuclear test within one year in September, the United Nations adopted a new sanctions package yesterday, Wednesday November 30th. These are some of the main points:

  • By far, the most significant measure is a “cap” on imports of North Korean coal at $400 million or 7.5 million metric tons in a year, cutting its revenues by about $700 million per year. This is to supplement the current provision that coal can be imported when the proceeds go to livelihood purposes in North Korea, a provision that has proven to be a massive loophole (shocker!).
  • Four more minerals have been added to the sanctions list: copper, nickel, silver and zinc.
  • Exports of statues have been banned, targeting the somewhat peculiar North Korean practice of building statues in various African countries.
  • The resolution also limits the number of staff allowed at North Korean diplomatic missions, and forbids them from opening more than one bank account per person.

So what does this mean for the North Korean economy? Obviously, one shouldn’t speculate too much in advance. As always, China’s enforcement will be the main determinant. Here are some things worth noting:

First, while $400 million cap would certainly be a significant income loss for the North Korean regime, it might not be disastrous. It is worth remembering that North Korean government revenue from minerals exports already fluctuates heavily, since market prices do. Just for a sense of perspective, in 2015, North Korea’s export income stood at about $3 billion, and this was a decrease by 16.4 percent from the preceding year. In 2014, textile exports to China brought in around $800 million. Moreover, the $700 million revenue cut claim does not take into account the extent to which North Korea could make up for the loss through other sectors.

Second, the likelihood of full and consistent Chinese sanctions enforcement remains fairly low at best. Historically, we have seen a pattern where China will increase enforcement during certain time periods, or take single measures that receive a lot of attention (such as the Hongxiang inquiry) but where things return to normal pretty quickly. Case-in-point: the unusually strong sanctions from earlier this year, and the promises of Chinese enforcement, ending with record trade in coal. Obviously the “livelihoods” exemption provided a large enough loophole, particularly after the announcement by the US and ROK that THAAD will be deployed in South Korea. It is difficult to see why this cap would be impossible to circumvent. After all, China is (presumably) responsible for gather the data and for ringing the alarm bells when said cap is reached. (See also Adam Cathcart’s essay on the recent Sino-North Korean rapprochement at Sino-NK).

Third, and relatedly, history tells us that many, many factors other than the international sanctions regime determine Chinese imports of North Korean coal. Domestic demand is arguably far more important as a determinant than sanctions, as evident by the fact that declines in imports of North Korean coal often fluctuate much more with demand than with sanctions.

As always, we can only wait and see, but at the face of it, these new sanctions seem far from revolutionary.

(Update 2016-12-02)

Japan, South Korea and the United States have announced additional, multilateral sanctions independent from those by the U.N. Joshua Stanton over at One Free Korea argues that some of the measures potentially carry some real impact power. For example, they include North Korea’s national carrier Air Koryo. Moreover, they sanction China’s Hongxiang Industrial Development, making it the first time that a single Chinese company is directly targeted by South Korean sanctions. Yonhap:

“We have expanded the number of those subject to sanctions by adding to the list 35 entities and 36 individuals that are playing a critical role in developing weapons of mass destruction and contributing to the North Korean regime’s efforts to secure foreign currency,” Lee Suk-joon, the top official in charge of government policy coordination at the Prime Minister’s Office, told reporters.

Included in the blacklist were Choe Ryong-hae, a vice chairman of the Central Committee of the ruling Workers’ Party, and Vice Marshal Hwang Pyong-so, director of the military’s general political bureau, both of whom are regarded as close aides for North Korean leader Kim Jong-un.

The Workers’ Party and the State Affairs Commission were also added along with other entities suspected of supporting the regime’s efforts to export its coal and generate earnings.

In particular, Dandong Hongxiang Industrial Development and four of its executives were included on the list, marking the first time that a Chinese firm is facing South Korea’s unilateral sanctions.

The company is under investigation on suspicions that it exported aluminum oxide — a nuclear bomb ingredient — to the North at least twice in recent years. In September, the U.S. blacklisted it along with its owner and other company officials.

With the latest action by Seoul, a total of 79 individuals and 69 entities will be subject to sanctions in connection with the North’s nuclear programs. The government announced a blacklist in March as a follow-up move to the UNSC’s Resolution 2270 adopted in the wake of the North’s fourth nuclear test in January.

Any financial transactions with them will be prohibited, while their assets in South Korea will be frozen. The blacklisted people will also be banned from entering the country, which is seen as a symbolic action given that there are no exchanges between the two Koreas.

Other prohibitive measures include blacklisting the North’s state-owned airline Air Koryo on suspicions that it helps its regime transfer workers abroad, and move cash and other embargoed materials into the isolated country.

The Seoul government has also toughened its maritime sanctions by banning any ships that have traveled to the North within the past one year, an extension from the previous 180 days, from entering South Korean ports.

In addition, a watch list “tailored” to enhance the monitoring on activities related to the North’s submarine-launched ballistic missile capability will be prepared and shared with the international community, it said.

Full article:
S. Korea blacklists scores of N. Koreans, entities linked to nuke, missile program
Yonhap News
2016-12-02

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Where do North Korea’s nuclear scientists go shopping?

November 27th, 2016

yongbyon-market-2016-8-21

Pictured Above (Google Earth): A 2016-8-21 image of the general market (종합시장) at the Yongbyon Nuclear Research Center residential complex.

Needless to say, security at the Yongbyon Nuclear Research Center is tight, and not much is known (publicly anyhow) about the lives of the people who live there. However, with commercial satellite imagery (and a little know-how), we can get a glimpse of life inside the security perimeter.

No doubt the residents of the compound live in “gilded cages,” enjoying above-average standards of living but under greater control and surveillance. However, in June of 2003, the year that the DPRK legally converted decades-old “farmers’ markets” to “general markets” (a change that involved not only a change in name, but also a change in administration), the DPRK constructed a new general market for residents of the Yongbyon Nuclear Research Center which appears to have replaced the smaller outdoor farmers’ market.

yongbyon-market-2003-6-2

Pictured above (Google Earth: 2003-6-2): Construction of the new general market outlined in yellow. Structure of the former farmers market that was torn down in orange.

The market appears to be composed of four warehouses each with a floor-space of appx 550 square meters (2,200 square meters total). It is possible that each building specializes in some form of commerce (food, household goods, etc). In some of the historical imagery of the market we can see people outside meandering between the buildings.

It is interesting to think that there are vendors here who are probably not related to the nuclear program. No doubt these individuals would have to be granted security clearances to work in this market.

But perhaps most notably about the residential quarter, we can see 15 new apartment buildings being constructed over the last couple of years.

yongbyon-housing-2014-9-24

(Google Earth: 2014-9-24)

yongbyon-housing-2015-11-9

(Google Earth: 2015-11-9)

yongbyon-housing-2016-8-21

(Google Earth: 2016-8-21)

I do not know if these new apartments are for scientists or janitors, but their construction marks a not-so-subtle signal that employment in the area is on the increase.

Here is coverage of my work on this post in RFA and KBS (English, Korean).

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North Korean leader visits fishing station on the East Sea, emphasizes raise in catch

November 22nd, 2016

Institute for Far Eastern Studies (IFES)

Kim Jong Un visited a fishing station in the East Sea (Sea of Japan) area, and ordered that the catch be raised. Under leader Kim Jong Un, phrases like ‘the Golden Sea’ and ‘Socialist scent of the Sea’ have become prominent. The Korean Central News Agency (KCNA), North Korea’s official wire service, reported that Kim visited the May 27 and August 1 Fishing Stations and conducted on-the-spot guidance.

The report stated that “Workers in the people’s army fishing sector and fishermen fulfilled their annual target set for them by respected comrade Kim Jong Un by November 7th by waging a fishing battle. They achieved dazzling success in catching 10,000 tons of sailfin sandfish, and continue to raise the amounts caught.”

Kim, first visiting the May 27 Fishing Station, indicated his satisfaction, saying, “I put many issues aside to come and convey this extraordinary news of success in the fishing industry to all the people. . . . Seeing the fishing station and apartments unfold before me like a picture as I was coming here was worth the trip. The East Sea area has a town in a state of ecstasy.”

The KCNA also reported that the May 27 fishing station had been built on the orders of Kim Jong Un, who also visited the site while it was under construction back last year in March. “It is another pride of the Songun era, with all the necessary and cutting edge facilities needed for the production of aquatic products and for the lives of fishermen.”

Having seen the fishing station, Kim said: “The People’s Army has shown how the Party’s policy, which states that using the mental energy of people one can create something from nothing, can be achieved. . . . The docks of the East Sea overflow with the smell of fish. I feel pleased to think of the parents who sent their children to guard the fatherland feeling happy when they smell this.”

Following this, Kim visited the August 1 Fishing Station, and said: “Seeing the fish piled high like a mountain for enough supply until next September I feel very happy, and feel all my fatigue leave me. . . . The organization at this facility is most satisfactory.” The Fishing station supplies orphanages, kindergartens, schools and nursing homes across the country with fish.

Kim Jong Un also discussed achievements in resolving the following problems: scientific fishing that enables fish to be caught regardless of the season; achieving a high standard of expertise, modernization and use of information technology in production and operations, introducing modern fishing methods, and increasing the catch; guaranteeing that fishing happens on more than 300 days, not allowing the seasons to keep the seas empty; equipping facilities with high quality refrigeration; taking a deep interest in the lives of fishermen; and stimulating energetic competition between fishing stations and individual boats.

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