Archive for November, 2006

Business group dreams of North Korean branch

Monday, November 13th, 2006

Joong Ang Daily

Lars Hasjlund, the president of Junior Chamber International, an organization for younger entrepreneurs, said he looks forward to expanding into North Korea someday. “It is our dream and our sincere hope that we, as JCI, can provide leadership training and education in North Korea as well,” he said at the 61st JCI World Congress in Seoul.

“Promoting corporate leadership and social responsibility that fosters a healthier environment in the world is the objective of our organization,” said the president.

Mr. Hasjlund said this gathering is to exchange ideas and to network among members, emphasizing how JCI gives young entrepreneurs the opportunity to initiate projects all over the world, putting their leadership skills to the test.

Past members of JCI include John F. Kennedy, Kofi Annan, President Roh Moo-hyun, Bill Gates and Bill Clinton.

JCI Korea President Pyo Hyun-cheol said, “Our goal is to embrace and further disseminate the very slogan we have set for ourselves this conference, which is ‘into the JCI’ ― which means further integration to a bigger and much more developed JCI in the world.”

The JCI World Congress started yesterday and will continue until Saturday at the COEX convention center and other venues.

JCI has 200,000 members from 20 to 40 years of age in 110 countries. Korea first joined the community in 1954 and currently has 17,000 members, the third-largest JCI branch in the world.


North Korean Loggers in Siberia

Monday, November 13th, 2006

Korea Times:
Andrei Lankov

For the last few decades a visitor to Eastern Siberia would sometimes come across unusual logging camps: fenced off with barbed wire, they sported the telltale portraits of Kim Ilsung and Kim Jong-il. These are North Korean camps: from the late 1960s, North Korean loggers have been working in Russia’s Far East.

In the 1960s the timber shortage was felt both in North Korea and the USSR, but the reasons for the shortages were different.

The Russians had plenty of forest, but lacked labor. When the gulags were emptied after Stalin’s death, few people were willing to up and fell trees in remote corners of Siberia.

The North Koreans had an abundance of cheap labor, but almost no good timber. Thus, the two Communist states had a potential match made in heaven.

In March 1967, when the relations between the two countries began to recover after a serious chill, the logging agreement was signed.

According to the agreement North Korean loggers were allowed to work in designated areas of the Russian Far East.

They were housed in special labor camps, run by the North Korean administration. The timber was to be divided between the two sides: the Russians 60 percent and the North Koreans 40 percent.

At their peak in the mid-1980s the Far East joint logging projects employed over 20,000 North Korean workers. This means that some 0.5 percent of all North Korean able-bodied men labored there. Nowadays, the operations are smaller in scale, with some 8,000 workers employed. An additional 3,000 North Korean workers are employed in other joint projects in Russia (construction industry, vegetable gardening etc.). Since the workers were rotated every three years, it is likely that up to a quarter of a million North Koreans have taken part in this project over the decades.

Politically, this was not as dangerous as it might seem. Even in the 1960s, the Soviet Union had far higher standards of living and was much more liberal and permissive society than the North.

However, the North Korean workers were in the middle of nowhere, and kept under the watchful eyes of their supervisors in the nearly isolated camps. People who broke the rules were arrested and sent back to the North. If it was deemed too difficult or impractical, they could be killed on the spot _ the Siberian forests provided more than enough space for unknown burials.

The Soviets usually turned a blind eye to everything the North Korean administrators did. In the early 1990s the situation changed. During the heyday of perestroika, investigative journalists began to report on the conditions of the North Korean workers.

An expose of the prison maintained by the North Korean security police in one of the logging camps led to a particular public outcry. In those days the Russians felt a nearly universal enthusiasm for democracy and believed that Kim Il-sung’s regime would soon collapse.

There were also publications about the secret opium plantations and illegal harvesting of protected species of plants and animals _ both, frankly, long established pillars of North Korea’s foreign currency earning programs.

On top of that, some loggers used the change in the international situation to defect to the South. In those days, defectors were still rare and thus welcomed in Seoul.

In 1992-1994 it appeared that the entire timber project would be discontinued owing to political considerations. However, the situation changed. The events of 1992-2005 made Russians quite skeptical about democracy, and very suspicious of idealistic crusades of any kind.

Thus, the North Korean camps were left alone to the great relief of the local Russian administrators and businessmen who make good money out of these projects.

For them, the North Koreans were but a source of cheap labor, and they did not care how these “Orientals” were treated by their supervisors.

When the initial Russian enthusiasm for a free press died out, the local politicians learned how to keep journalists away.

By the late 1990s, it also became clear that South Korea was not going to encourage the defection of the loggers. On the contrary, anecdotal evidence indicates that loggers who approach the local South Korean consulate are unceremoniously turned away.

Seoul does not need these impoverished and potentially troublesome brethren in our sunshiny days! Of course, some loggers run away, but largely in order to find better job opportunities in Russia’s black economy.

There are about a thousand such runaways hiding in Russia now, but the authorities tend to ignore their presence.

But what was the incentive for the North Koreans workers? The short answer is: money.

Really good money _ at least, by North Korean standards.


WFP suffering severe shortage of donations for N. Korea aid

Saturday, November 11th, 2006

From Yonhap

The leading U.N. relief agency still has only 12 percent of the donations it needs to help North Korea, with Russia being the largest contributor, according to its latest resources update.

The World Food Program (WFP) tally from Thursday showed that of the US$102 million required for recovery assistance for vulnerable groups in North Korea, it has received $12.7 million, or 12.43 percent of the targeted amount. (more…)


Mass Protest Incident in Hoiryeong

Thursday, November 9th, 2006

From the Daily NK

On Tuesday, a number of residents in Hoiryeong, North Hamkyong Province mass-protested in front of the Nammun (a south gate) market for “compensation of market refurbishment payment” and against the merger of Hoiryeong markets, according to a North Korean source.

The inside source told the Daily NK through a telephone interview that evening ,“From this morning, more than a hundred shopkeepers, their families and the residents of Nammun district rushed to the market management office to request compensation of market refurbishment fees and repeal of Nammun market closure.”

The informant said that the mass protested against the local government because they were stirred by the authority’s decision. It is extremely exceptional that such a mass protest occurs in North Korean society.

They formed lines to present their opinions and in the meantime, some traders shouted phrases such as “Refund the refurbishment payments!” The primitive type of protest in North Korea, in which any kind of private mass activities are forbidden, means much more than western societies’ demonstrations. “No one particularly led the incident,” the informer testified, “but outraged merchants poured into the management office as a group.”
Security officers forcefully dispersed the protestors and crowd.

He added that Hoiryeong local security officers, fearing a spreading of the protest, forcefully dispersed the protesters and crowd. And it was not clarified whether any of the protestors got arrested.

Nammun market is two kilometers southeast of Hoiryeong city, and a frequent place for shopping of food and other basic supplies by local residents.

The incident occurred when the market management officials started to remove the market.

The officials had been collecting three thousand NK won per trader as “refurbishment fees” since late October.

That morning, however, the market management office ordered all the markets in Hoiryeong to be combined with newly constructed Hoiryeong Market, which is located former Hoiryeong Southern middle school, unilaterally, and started to remove the shops in the Nammun market.

Shopkeepers of Nammun market, having been unaware of such a decision, could not accept the order, the informant told the Daily NK. And none of them was guaranteed with a spot at the new Hoiryeong Market; even if one was, there would be a lot of time and money to be spent before actually having a shop at the new market.

Those shopkeepers of the Nammun Market, waiting for the opening hour, saw the removal of their stands, and sought the management officials. When they found any official unavailable, an angry outburst came.
There was a violent clash among angry residents.

The stand-owners and their families went to the office and asked accountable senior officials for compensation, which they did not receive. One protestor reportedly shouted, “It is ridiculous to walk five kilometers (to the new Hoiryeong Market) to buy a piece of Tofu!”

It was informed that amid the protest there was a violent clash among angry residents. When a man watching the demonstration said it was meaningless to protest, shopkeepers assaulted him for collaborating with the officials.

As soon as an act of violence happened, tens of security officers came to the site and dispersed the protestors and bystanders. Meanwhile, traders vehemently resisted and abused the security guards.

The newly built Hoiryeong Market is constructed at the site of closed Hoiryeong Southern middle school with about 700 sale stands, which are one meter long and a half meter wide. A down payment of 200,000 NK won (US$690) and daily rental fee of 10 to 30 won are required for a stand. Black market exchange rate is over 3000 won per US dollar while official one is 140 per a dollar.


Ministry: Workers’ wages at Kaesong go to supplies

Wednesday, November 8th, 2006

Joong Ang Daily

Amid continued concern that money spent on the Kaesong inter-Korean industrial complex fuels Pyongyang’s military, the Unification Ministry said yesterday that most of the wages paid by South Korean companies buy daily supplies and food for North Korean workers.

Song Yong-deung, 66, a Korean-Australian who operates a Kaesong-based food and supply company jointly owned by North Korea, told the ministry that his company regularly provides goods to North Korean workers, according to a press release from Goh Gyeong-bin, an official in charge of the complex. Song’s company gets money from North Korean authorities, who in turn accept the wage payments from the South Korean companies operating the complex. The North Korean workers do not directly receive their salaries.

According to data provided by Mr. Song and the ministry, South Korean firms pay an average of $600,000 per month in wages, of which about 45 percent is deducted for fees such as insurance and taxes. In March, after the deductions, a total of $295,000 was paid to the North, of which $219,000 went to Mr. Song’s company to purchase goods, such as rice, for the workers.

Unification Ministry officials said yesterday the bulk of the information provided by Mr. Song matched Seoul’s own assessment on how the money sent to the North is being used. Asked why the ministry has not tried in the past two years since the complex opened to verify how the money sent for wages was being used, Yang Chang-seok, a ministry spokesman, said Seoul has repeatedly asked the North to provide a detailed account of the cash flow, but other than stating the workers bought supplies, little information has been provided.

“Given the nature of the North’s closed society, confirmation itself is problematic,” the spokesman said.

The efforts by Seoul to cast a light on the flow of the money being paid to the North comes at a time when Washington is pushing Seoul to curb inter-Korean projects, citing transparency issues over money sent to the North. Over the weekend, President Roh Moo-hyun vowed to continue with inter-Korean projects in a policy speech addressed to the National Assembly. Currently, there are 15 companies operating at the complex employing 9,632 North Koreans.

The announcement came as U.S. delegation visited Seoul this week to discuss how to implement the United Nations sanctions resolution against the North.


ROK offers aid for Reunions to DPRK

Monday, November 6th, 2006

From Yonhap

Seoul to resume flood aid for N. Korea if separated family reunions restart

South Korea may resume its humanitarian assistance for impoverished North Korea following an improvement in inter-Korean relations, the head of South Korea’s National Red Cross said Monday.

The Red Cross chief’s remarks come amid international efforts to punish the communist nation for its nuclear test on Oct. 9. Pyongyang agreed last week to return to international negotiations over its nuclear weapons program.

“I believe the Red Cross societies of the North and the South would be able to discuss the issue of resuming shipments of (South Korea’s) remaining flood recovery aid to the North once the most desperate humanitarian issue (between the two Koreas), which is the issue of separated family reunions, is resolved,” Han Wan-sang told reporters.

Han’s remarks came partly in response to an alleged offer by North Korea’s No. 2 official Kim Yong-nam to hold Red Cross talks to discuss the resumption of separated family reunions. The offer was made public by a group of legislators and officials from South Korea’s minor opposition Democratic Labor Party (DLP) who visited Pyongyang last week.

North Korea unilaterally called off a scheduled round of the Red Cross-sponsored programs to reunite families separated by the division of the Koreas in July. The cancellation came after Seoul’s suspension of its regular humanitarian assistance, mostly rice and fertilizer, for the communist nation following the North’s launch of seven ballistic missiles earlier that month.

Analysts here believed the North would demand the resumption of Seoul’s humanitarian aid for the communist state in return for holding a new, or delayed, round of separated family reunions as the North Korean official, who serves as president of the Presidium of the Supreme People’s Assembly, was quoted as telling the visiting DLP officials that the Koreas must jointly work to resolve various humanitarian issues between the two.

Han said the reunions must be held without any conditions, also adding that the resumption of his country’s regular economic assistance for the North is a political issue.

He, however, said the sides could discuss resuming at least part of Seoul’s humanitarian assistance to the North at the next round of the separated family reunions when, or if, they are held.

“But issues that can be discussed from a humanitarian perspective can be discussed while pursuing other humanitarian projects,” he said.

The South Korean government pledged to give the one-time flood recovery aid, consisting of some US$50 million worth of rice, medicine and construction equipment, to the North in August, but has delayed its shipments since the North’s Oct. 9 nuclear test.

The Unification Ministry refused to comment on the North’s alleged offer, saying it has yet to receive any official report from the opposition party or an offer from the communist state.

The Koreas have held 14 rounds of separated family reunions since the historic inter-Korean summit in 2000, but over 90,000 people from the South alone remain separated from their loved ones since the end of 1950-53 Korea War.

The countries officially remain in a state of war as the Korean War ended with a cease-fire, not a peace treaty.


Russia and DPRK at the beginning

Monday, November 6th, 2006

From the Korea Times:
Andrei Lankov

First Embassy

The Cold War propaganda in the West, and particularly in South Korea, used to present North Korea as a puppet regime, completely dependent on Moscow. This propaganda image was patently wrong in the 1950s, let alone 1960s.

However, in the early stages of its history, before the Korean War, North Korea indeed could be described as a Soviet dependency.

The first speech of Kim Ilsung, delivered in October 1945 at a mass rally in Pyongyang, was written in the Soviet Army headquarters and then translated into Korean by a Soviet officer.

All major political pronouncements and most of the important speeches of the North Korean dignitaries were initially given to Soviet supervisors for editing and approval.

In the North Korean armed forces, all appointments above battalion commander had to be cleared with the Soviets. And all major political events had to be discussed with the Soviets beforehand.

The major task the Soviets strove to achieve in the late 1940s can be described as the ‘communization of Korea.’ They wanted a stable and efficient local regime that would become a reliable junior partner for Moscow in the region.

This policy was implemented by a remarkable group of people who came to Korea from Stalin’s USSR and stood for everything that was good and bad in the Soviet bureaucracy of the era. They were brutal, efficient, determined, ruthless, and intelligent. They belonged to the same cast of cadres who transformed a backward agrarian Russia into a superpower (and killed millions in the process).

The major role in Soviet diplomacy of the pre-war era belonged to Colonel General Terentii Shtykov, a member of the Military Council (political commissar) of the First Far Eastern front. In fact, in 1945- 48, he was the supreme ruler of North Korea, the principal supervisor of both the Soviet military and the local authorities.

General Shtykov was a party functionary rather than a military officer. He was a farmerturned- worker who came to Leningrad in the 1920s, was recruited to the Communist Party and made a remarkable career in Stalin’s Russia. By 1945, Shtykov held the rank of Colonel General, then the highest possible for a political commissar (besides him, only three political officers had the same rank in the entire Soviet Army).

He was an autodidact: a poor farmer’s son and had only attended primary school, but few people could guess that the general had almost no formal education.

In 1948, when the Soviet troops were withdrawn from Korea and the newly established DPRK was recognized by Moscow, it was only logical that Shtykov became the first Soviet ambassador to Pyongyang.

In this position, Shtykov was assisted by a remarkable group of people, mostly in their 40s and 50s. Colonel Ingnatiev supervised the development of the North Korean bureaucracy and arranged the foundation of the Korean Workers Party in 1946.

He was also an early champion of Kim Il-sung, whose rise to the political heights would never have happened without Colonel Ignatiev’s support.

Another part of the Soviet bureaucracy in the North was known as the ‘office of the political adviser.’ This nebulous name was used by the local office of the MGB (the KGB’s predecessor), run by the enigmatic and efficient Armenian, Colonel Balasanov. Balasanov was an intelligence operative specializing in East Asia. His agents were responsible for a range of clandestine activities in the North and South, as well as for supporting the South Korean Communist insurgency that began in 1947 and was secretly supplied from the North (and, of course, from the USSR).

One also has to mention the brilliant Dr. Tunkin, an expert on international law, who was responsible for negotiating with the Americans (or breaking the negotiations off: as every diplomat knows, sometimes the ability to not achieve anything is as important as the ability to achieve something).

In the late 1940s, Ambassador Shtykov became a supporter of Kim Il-sung’s plan to invade the South. Both Shtykov and Kim spent a long time lobbying Moscow for permission to attack, and assuring Stalin that victory would be swift, cheap, and easy. It was not.

The ill-advised invasion of the South seriously damaged Shtykov’s career. He was recalled to the USSR and appointed to an insignificant post (when we recall the situation those days, he should consider himself lucky to have stayed alive). Other people left, too: after all, in the post-1953 period Korea stabilized and lost much of its strategic importance.

Dr. Tunkin embarked on successful academic career that would eventually grant him a place in the Encyclopedia Britannica, and Col. Ignatiev was killed in an American air raid.

In the early 1950s, these ‘old Korean hands’ were replaced by a new crop of diplomats who were, frankly, of much inferior quality.


North Korea’s Profession: Entrepreneur

Sunday, November 5th, 2006

From Businessweek:
Joe McDonald

In the midst of tensions over North Korea’s nuclear program, a Western company is there searching for oil. Another just bought a bank.

“North Korea is hungry for business,” said Roger Barrett, the British founder of Beijing-based Korea Business Consultants, who recently took 11 Asian and European clients to Pyongyang to play golf and make contacts.

A small group of Westerners are taking on the challenge of doing business in the isolated North, hoping to get in on the ground floor as its communist rulers experiment with economic reform.

The obstacles are daunting. A Stalinist dictatorship, bureaucracy and language barriers. Foreign sanctions that block most financial transfers, making it hard to get paid and to get supplies. And now worries that United Nations sanctions imposed after North Korea’s Oct. 9 nuclear test could be expanded to a general clampdown on trade.

But the Westerners talk positively about the North as a business environment, with skilled workers and leaders who they say welcome foreign investment.

“They are very skillful and hardworking,” said Felix Abt, a Swiss businessman who oversees two ventures in Pyongyang, one that makes business and game software for sale in Europe and another that makes antibiotics and painkillers for the domestic market. “It’s sometimes faster to get licenses and necessary approvals here than it is in China or Vietnam.”

Barrett said that even as the U.N. Security Council debated the latest sanctions on the North, he got inquiries from investors interested in its rich mineral resources and low-cost manufacturing work force.

“Investors are rushing into China, but labor costs there are escalating, and companies are looking for an alternative,” Barrett said. North Korea “has absolutely the capabilities to take off like South Korea.”

So far the largest foreign business community in North Korea is from China, its main source of trade and aid.

South Korea accounts for most of the North’s foreign investment, with stakes totaling $620 million in an export-manufacturing zone and a resort for foreigners. China’s investments total just $31 million, according to the Chinese Commerce Ministry.

U.S. regulations allow American companies to trade with North Korea under limited conditions, though tensions between the governments and lack of diplomatic relations raises the risk of doing business. Britain, Germany, Sweden and other Western governments, meanwhile, have official relations with Pyongyang.

North Korea’s foreign trade has risen sharply, though the total was less than $4 billion last year, according to South Korean and Chinese government figures. Trade with the South soared by more than 50 percent in 2005 to just over $1 billion.

Most trade is carried out by North Korean state companies, not private entrepreneurs. And some partners are shying away. Trade with Japan, once the North’s No. 1 trading partner, tumbled from $1.3 billion in 2001 to just $200 million last year amid tensions with Tokyo over North Korea’s abduction of Japanese nationals in the 1970s and ’80s.

The Europeans’ chamber of commerce in Pyongyang had 12 members when it was launched last year. They include delivery company DHL Express, an Italian law firm and a German venture founded in 2003 to provide Internet access to foreign businesses in Pyongyang.

This tentative foothold follows the slow pace of economic reform in North Korea. Only in 2002 did North Korean leader Kim Jong Il allow limited free enterprise to revive a decrepit economy, which teetered in the 1990s following the loss of Soviet aid and then collapsed amid widespread food shortages. Still, foreign observers say officials are reluctant to give up control, despite prodding from Beijing, which wants faster reforms to reduce its ally’s dependence on aid.

Abt, the Swiss businessman, moved to Pyongyang in 2002 after seven years working in Vietnam, another Asian communist economy in the throes of reform.

“I heard that some economic reforms were in the pipeline, and I was quite thrilled to experience the beginning,” said Abt.

Now his Vietnamese wife takes their 14-month-old daughter to play at an international school. After work, he goes out to sing karaoke with North Korean co-workers.

But Abt has felt the bite of efforts to pressure the North.

Foreign banks have been leery since Washington last year sanctioned Macau’s Banco Delta Asia, which the U.S. said helped the North launder money. China told its banks this month to curtail financial transfers to or from the North.

“It’s getting difficult to make bank transfers to suppliers or to get money from customers,” Abt said.

He worries that the factory might have to shut down if U.N. sanctions block imports of required chemicals on the grounds that they also could have military uses.

Barrett said his clients have lost access to $11 million in Banco Delta Asia accounts that were frozen by the U.S. sanctions.

Colin McAskill, a British businessman who has done business with the North since the 1970s, is lobbying Washington to fine-tune its sanctions so the bank’s customers can withdraw money that was made legally.

McAskill is chairman of Hong Kong-based Koryo Asia Ltd., which said in September it was buying a 70 percent controlling stake in Daedong Credit Bank, North Korea’s first foreign-owned financial institution. The bank, which is 30 percent owned by a North Korean bank, serves foreign companies and has accounts at Banco Delta Asia.

North Korea also has turned to Western investors in hopes of developing oil resources and reducing its near-total reliance on China for fuel. It awarded a 20-year exploration concession last year to Aminex plc, a London firm.

Aminex is helping the North Korean government deal with other foreign companies, and in exchange gets to pick where it will drill for oil, its chief executive, Brian Hall, said by phone from London.

Aminex hasn’t felt any effects from the nuclear tumult, Hall said.

“We have good relations and no problems with the agreements but are closely watching the political situation,” he said.


North Korea Sending Workers for Oil

Friday, November 3rd, 2006

From the Donga

It is being reported that North Korea has increased its oil imports from Primorsky, Russia every year and made its payment by sending labor abroad due to its payment incapability.

According to the government of Primorsky yesterday, North Korean oil imports increased from 62,000 dollars in 2001 to 4.4 million dollars last year. Considering that the export price for Russian Urals oil has increased 35% during the past four years, North Korean oil supplies imported from Primorsky have been more than a 42-fold increase.

“Primorsky, which does not have oil resources, exports oil to North Korea through the federal government and in compensation we get labor instead of money due to North Korean incapability of making its payment,” said Primorsky experts on North Korea.

Dong-A Ilbo special team confirmed in an interview with the government of Primorsky that North Korea has been increasing its labor exports from 3,320 workers at the end of last year to 5,000 workers until late of this year. The current number of abroad sending workers is the greatest ever since Statistics Committee of Primorsky analyzed statistics of North Korean labors in 1993.

The government of Primorsky allowed only some North Korean labor force imports. Recently, however, it is reported that they have increased the scale according to the increasing demand from local companies in Russia.

A government official of Primorsky stated over a phone call with reporters on October 30, “We have limited the number of labor permits since foreign workers are taking away employment from Russian workers.” The official did not specifically mention the reason of the recent growing North Korean labor forces because “the person in charge is away at the moment.”

However, Professor Larisha Jabrobskaja at the Far Eastern Research Center in Vladivostok, who has studied North Korean labor problems for 15 years, explained the reason as, “North Korea, suffering from a chronic trade deficit since the 1990s, is sending labor abroad in an attempt to make its payment.”

He added, “Considering the current trade structure of Primorsky, which its oil import to North Korea accounts 70% of the total exports, it seems Primorsky is swapping oil for North Korean labor.”

“North Korea is planning to expand its oil import through attracting Russian energy corporations in the Rajin-Sonbong Economic Special Zone and the Primorsky’s project to expand its oil and coal export is taking shape these days,” according to the government of Primorsky.

Most of the workers who were forced to enter into Russia in the 1990s worked as woodcutters, but nowadays they work in various fields including construction, agricultural and marine industry.

Local Russians in Primorsky said, “North Korean workers usually get disadvantaged when they look for jobs after the entry and also when they exchange money through North Korean executives, even by offering bribes.”


N. Korea warns against changes to inter-Korean tourism program

Wednesday, November 1st, 2006

From Yonhap

North Korea on Wednesday said it would take “stern measures” against South Korea following any changes to a tourism program to the North’s Mount Geumgang, a South Korean project recently accused of funneling hard currency to the communist state.

“Foul attempts are underway in the South by (South Korea’s) Grand National Party to destroy the Mount Geumgang tourism project, which is a symbol of North-South economic cooperation,” said a spokesman for the North’s Korean Asia-Pacific Peace Committee in a statement carried by the country’s Korean Central News Agency.

“We will always treasure the hope and wish of South Korean peoples toward Mount Geumgang, but we make it clear that we would have no choice but to sternly take corresponding measures if an irreversible situation is created by the Grand National Party,” it said.

The statement follows claims by the South Korean opposition party that cash paid to the communist nation in return for the North’s opening of the inter-Korean border to allow South Korean tourists to the mountain could be helping the North’s nuclear and other weapons of mass destruction programs.

The opposition’s claims and demands to halt the inter-Korean project intensified after Pyongyang conducted a nuclear test on Oct. 9, defying all international warnings and appeals.

The U.N. Security Council has adopted a resolution on North Korea that prohibits the transfer of any financial resources or other materials that could benefit the North’s weapons program.

Seoul refuses to shut down cross-border roads to the North Korean mountain and a North Korean border town, Kaesong, where the two Koreas are jointly developing a large-scale industrial complex for South Korean firms.

Hyundai Asan, the South Korean developer of the Mount Geumgang resort, pays an average US$1 million a month to the North Korean committee in admission fees for South Koreans traveling there, while the country’s firms operating at the Kaesong complex are paying about US$600,000 each month in wages to some 8,700 North Koreans working there.

One of the ways, partly proposed by the opposition GNP, to cut currency inflows to the communist nation was to pay the fees and wages in goods, instead of cash.

The North, however, said the idea is not even worth mentioning, saying it is as outdated as it is absurd.

“The Grand National Party, which puts the interests of foreign forces before those of the nation and tries to realize its scheme to take power by violating the nation’s interests, would pay high prices,” the North Korean statement said, adding the country will closely watch South Korea’s move.