Archive for November, 2007

North Korea Said “The South Invests in the North Due to Its Bankruptcy”

Saturday, November 24th, 2007

Daily NK
Yang Jung A

It turns out that the North Korean regime asserts to its people that the South has decided to invest in the North because the South’s shipping industry is doomed.

The North Korean authorities argued such at public lectures held in October to report on the results of the second Inter-Korean Summit, according to a report released on Wednesday by Good Friends, a Seoul-based aid organization for North Korea.

The report says that a cadre from Pyongsung delivered a public lecture saying, “South’s shipbuilding industry is on the verge of doom, and that is why it has decided to build a shipyard in Anbyun of Kangwon and to establish cooperative complexes for shipbuilding in Nampo in the West Sea.” The cadre also announced that two Koreas have agreed to transform the military demarcation line in the waters of the West Sea into ‘peace line’ and create a joint fishing zone there, the report says.

Nevertheless, the report says, “Most participants had no interest in the lecture. They could only care about putting some bread on the table and making money, instead of wasting time on discussing the country’s affairs”

According to the report, the North Korean people strongly oppose the recently market regulatory measures. It has been reported that the number of individuals who violate the measures is increasing.

“Lately, the chairman of People’s Committee in Pohang district of Chongjin was fired and demoted to a regular worker’s position because the chairman had complained about the state’s measure, which bans females under 45 years old from doing business in the market starting with December 1st this year,” the report says. The chairman is quoted as saying, “In today’s society, women are breadwinners. If women under 45 are banned from making a living in the market, who is going to earn bread and butter for their households?”

“In Sinam district of Chungjin, a female was arrested after having expressed discontent about the regulation. She was pulled along to a Social Safety office and underwent all sorts of hardships. Later, she was made to take criticism at a regular evaluation meeting of a women’s unit in her district, and then released,” says the report.

“In Pyongyang, agents on a mission to crack down anti-socialist activities are going the rounds of the households of individuals who do business in the market. The agents ask the individuals when and how they started business, what their children do, and where they procure sales items,” says the report.

The report also tells an account of an old couple who has retired from the party and recently visited by inspection agents. The report says, “Although the couple spent most of their life serving the party, they had to come to the market to make a living at their old age. The old couple felt very bitter about their situation. They grumbled against the regime saying that it frequently regulates the market and inspects those engaged in the business. The old couple was at a loss what to do.”


N. Korean graphite material to arrive in S. Korea on Saturday

Friday, November 23rd, 2007

Lee Joon-seung

North Korean graphite material made at an inter-Korean joint venture factory is being shipped to South Korea, the Commerce Ministry said Friday.

The 200-ton shipment from the factory near the city of Haeju left the North Korean port of Nampo earlier in the day and is expected to reach Incheon on Saturday, the Ministry of Commerce, Industry and Energy said.

“The shipment is significant because it is the first time that products made from minerals in the North have been shipped to the South after being manufactured at an inter-Korean joint venture company,” a ministry official said. The graphite can be made into heat-resistant bricks, pencils, ceramic melting pots and car brake linings.

South Korea’s state-run Korea Resources Corp. (KORES) holds a 50 percent stake in the US$10.2 million graphite processing plant along with the North’s Kwangmyung Trading Co.

The factory can produce 3,000 tons of processed graphite every year, with KORES entitled to 1,830 tons for 15 years as payment for its initial investment. The amount is equivalent to 15 percent of the graphite products the country imports every year. China, Japan and Germany are currently South Korea’s main suppliers of the material.

The state-run company signed the contract for the joint venture in July 2003, and commercial production began in April of this year. Initial test production began in April 2006.

The ministry also said the Jeonchon mine near the factory is estimated to hold 6.25 million tons of crystalline graphite ore.

Wonjin Co., a local carbon refractory brick manufacturer, signed a contract in September with the KORES to buy all the graphite from North Korea and market it in South Korea.


North Korean Market Research

Friday, November 23rd, 2007

Daily NK
Yoon Il Geun

Unlike its external gesture towards openness as observed in the case of a recent agreement to expand South-North economic cooperation, the North Korean authorities regulate market activities at home.

On October 3rd, the Workers Party delivered a public message that urges the North Korean people to have a proper understanding about the market and to eradicate anti-socialist activities which threaten people’s interest. According to the message, the state bans females who are less than 40 years old from doing business and orders them to get back to factory complexes.

In regard to the recent regulation imposed on the market, many experts on North Korean affairs explain that the North Korean authorities are trying to hold in check a nouveau riche class who have made a fortune in the market and stop the infiltration of foreign culture and news into the society.

Experts believe that the North has decided to regulate the market, the very source of living of its people because it posed a treat to the Kim regime.

◆ The growth of the market since the mid 1990s

In 1990s, the country’s economy collapsed and the state failed to distribute food to its people. Many starved to death, and those survived turned to the market

In those days, despite the state’s tight regulation, the North Korean people had to make their living by either selling in the market or smuggling to China anything they could find in the sea, mountain or river such as fish, pine mushrooms, hemp, alluvial gold, etc. Some even stole metal such as copper and white gold from refineries or dismantled equipments from plants or factory complexes, and smuggled them to China.

Many North Koreans were able to secure the minimum amount of purchasing power by selling national resources overseas. Moreover, many defectors started to send money to their remaining family members in the North, and helped secure the purchasing power of their family. It was around this time when Chinese goods started to flow into North Korea and a new type of market began to grow. The new type of market differed from the state-approved farmer’s markets in the past. For the first time, it became possible for North Koreans to earn bread for a day in the market.

◆ The growth of a new type of market

On July 1, 2002, the nearly bankrupted country adopted an economic improvement measure designed to improve the competitiveness of factory complexes. As many individuals illegally sold national resources overseas and factories were shut down, the state ran short of revenue and became unable to give wages to workers, officials and college professors. In order to solve the shortage, the state began to issue paper money to fill national treasury.

Unfortunately, that increased workers’ wage 10 to 15 times on average. Moreover, the exchange rate which was about 220 won per dollar on June 30, 2002 increased to 1,800 won per dollar nine months after the adoption of the July 1st Economic Management Reform Measure.

Foreign Policy, an American magazine of global politics listed North Korea once again this year as one of the world’s worst currencies and pointed out the problem of the country’s skyrocketing inflation. The magazine also pointed out that the price for rice has increased by 550 percent since the adoption of the July 1st Economic Management Reform Measure. It should be noted that rice is one of those items whose prices have increased the least.

◆ The more the market grows, the more it threatens the regime

As inflation continued, more people turned to the market to make a living and started to manage their economic life independently. Having noticed that, the authorities began to worry what kinds of changes the market would bring about.

The authorities’ foremost concern lies in the rapid spread of foreign information through the market. As North Koreans’ preference for products from South Korea and Japan increases, so does their interest in these two countries. Many defectors say that a countless number of foreign VCDs have been circulated among people through the market.

In addition, the state has lost authority as more people relied on the market and became self-sufficient and individualistic. Prevalent corruption has also undermined its authority.

Lastly, illegal activities have increased so much that they are threatening public security. In fact, the North Korean people nowadays would do anything to make money.

For instance, many party cadres, hospital workers and Red-Cross personnel are stealing aid supplies sent by the United Nations and advanced countries, and army personnel are selling military provisions including rice in the market. Furthermore, many violent crime incidents and lootings are taking place in the areas not under the government control.

“The army and gangsters are savagely looting the market” says a woman in her 50s says recalling her visit to Hwanghae Province prior to coming to Dangdong, China.

◆ The impact of adopting market regulatory measures

The growth of the market will likely deepen the crisis of the Kim regime. Any measure designed to restrict the market would backfire among people.

Since the second half of the year, the North Korean authorities have been promoting market regulatory measures in the hope of protecting the regime. Some have raised a possibility that the North might try to restore its public distribution system using international aid. However, unless the North continues to open its door, the country would never secure an amount of food enough to run the distribution system again.

“Kim Jong Il is aware of the importance of the market for people’s survival, so he tacitly approves its existence. However, when he feels that capitalism is spreading too quickly, he would try to control it.” says Gao Jingzhu, professor of Korean studies at Yanbian University.


Koreas to run cross-border freight train everyday from Dec. 11

Thursday, November 22nd, 2007


The two Koreas agreed Thursday to run a daily freight train service across the border starting in mid December to facilitate transportation of raw materials and processed goods between the South Korea-invested industrial park in the North’s border town of Kaesong and the South.

Starting the cross-border cargo rail service for the first time since 1951 was the key agreement reached at last week’s talks between Prime Minister Han Duck-soo and his North Korean counterpart Kim Yong-il in Seoul.


South Korea contributes more than US$4 million to First Environmental Project between Two Koreas

Thursday, November 22nd, 2007

According to

The United Nations Environment Programme and the Republic of Korea today signed an agreement for establishing a Trust Fund that addresses key environmental issues in the Democratic People’s Republic of Korea (DPRK). The Republic of Korea will contribute US$4.4 million in total for this project. The first venture of its kind on the environment between the two Koreas, the Trust Fund will tackle forest depletion, declining water quality, air pollution, land degradation and biodiversity in DPR Korea. It will also support eco-housing initiatives as well as conservation and management of the Taedong watershed, environmental education, integrated environmental monitoring system, clean development mechanism and renewable energy technology.

‘This multilateral cooperation with UNEP is of great significance for both South and North Korea and a huge step forward in addressing pressing environmental issues in DPR Korea,’said LEE Kyoo-Yong, Ph.D., Minister of Environment of the Republic of Korea.

The past decade has seen declining forests in DPR Korea due to timber production, firewood consumption, wild fires and insect attacks associated with drought, population growth and conversion of land to agricultural production. Pollution of rivers and streams has become severe in recent years, particularly in the Taedong River, which flows through central Pyongyang. DPR Korea’s reliance on coal for power generation, industrial processes and domestic heating also led to serious air pollution, particularly in cities like Pyongyang and Hamhung.

To counter this, the country has encouraged community, youth and children’s groups to establish tree nurseries and to participate in campaigns such as the National Tree Planting Day on March 2 every year. The government is currently strengthening legal control on effluent from factories by applying the’Polluter Pays Principle’ and has initiated mass media campaigns to inform the public of the need for water conservation.
Environmental protection was also recognized as a priority issue and a prerequisite for sustainable development after a series of natural disasters in the mid-1990s led to a critical drop in yields of major crops. In 1998, DPR Korea revised its constitution and designated environmental protection as a priority over all productive practices and identified it as a prerequisite for sustainable development. National laws on forests, fisheries, water resources and marine pollution were also adopted.

‘This agreement will build on the momentum that DPR Korea has begun. It will also go a long way in strengthening the spirit of cooperation between the two countries,’ said UN Under-Secretary General and UNEP Executive Director Achim Steiner.

Since 2000, UNEP has been working in partnership with the National Coordinating Committee for Environment and UNDP to strengthen the capacity of the national government for environmental assessment and monitoring and implementation of Multilateral Environmental Agreements. In 2004, UNEP and DPR Korea signed a Framework Agreement for Cooperation in Environment. The first DPR Korea State of the Environment report was also launched that year.


Kims’ Clear-Cutting of Korean Forests Risks Triggering Famine

Wednesday, November 21st, 2007

Bradley Martin
Hideko Takayama

In some parts of the world, floods and famine are acts of God. In North Korea, they’re acts of government.

For decades, the late North Korean dictator Kim Il Sung mobilized vast work teams to fell trees and turn the mountainsides into farmland, allowing rainwater to wreck roads, power lines and agricultural fields.

Following Kim’s death in 1994 — just before a flood- linked famine gripped the nation — his son and successor Kim Jong Il continued the sacrifice of forest cover until 2000, when he began encouraging reforestation. But the shift hasn’t reversed the damage, and some analysts warn that another famine, close to the scale of the 1990s disaster that may have killed millions of people, might occur as soon as next year.

“Next year’s food situation is quite serious,” said Kwon Tae Jin, a researcher at the Korea Rural Economic Institute in Seoul. The famine risk is greatest starting next spring, after the current harvest is used up, he said; North Korea’s best hope may be for more food aid from abroad as a result of its agreement to begin dismantling its nuclear-weapons program.

Floods in August and September left 600 people dead or missing by official count, and 270,000 homeless. “Corpses were dug out of the silt” still clutching vinyl-wrapped photos of the Kims, the official Korean Central News Agency reported.

`Bad Governance’

South Korea has similar rainfall but has largely avoided such calamities. The North’s flooding “is a product of bad governance, economic mismanagement, poor agricultural policy and haphazard short-term survival strategies of the starving, desperate population,” Alexandre Y. Mansourov, a Korea specialist at the Asia-Pacific Center for Security Studies in Honolulu, said in a study.

North Korea’s deforestation program dates back to a 1961 speech by Kim Il Sung. In a mostly mountainous country, he proclaimed, “it is necessary to obtain more land through the remaking of nature.” Not only tidelands but “hills throughout the country and plateaus” should be “brought under the plough,” he said.

“The hills and mountains still had trees, and I never heard of floods,” said Hiroko Saito, a Japanese woman who moved with her Korean husband to North Korea in 1961. Her husband joined one of Kim’s vast mountain work teams in the early 1970s, said Saito, now 66 and back in Japan.

Workers and Soldiers

The crews included “city workers, students, soldiers of the Korean People’s Army and anybody else who could move,” said Lee Wo Hong, a pro-communist Korean agricultural expert living in Japan who began spending time in North Korea as a teacher and adviser in 1981.

What he saw there turned him into a critic of Kim Il Sung’s agricultural policy, he said. The country “was filled with bald mountains” on which the North Koreans had planted fast-growing maize; even relatively light rain would wash the crop away.

Reclaiming marginal land appeared successful for a while as North Korea’s overall crop yields increased, agriculture specialist Edward Reed wrote in a 2001 University of Wisconsin study. “Yet from the mid-1980s on, there appears to have been a slow decline in production, probably due to soil depletion from overintensive production,” he said.

By the early 1990s, yields dropped so low that hungry North Koreans went to the mountains to bring even more land under cultivation. Meanwhile, increased demand for firewood — the result of an energy shortage caused when former communist trading partners halted cut-rate fuel exports — added a new incentive to strip the mountainsides.

Death Toll

The results came to the world’s attention in 1995, with the worst floods in a century. The lost farmland contributed to a famine — already under way — that killed somewhere between 600,000 and 1 million North Koreans, according to “Famine in North Korea: Markets, Aid, and Reform,” by Stephen Haggard and Marcus Noland. Other estimates put the death toll as high as 4 million.

As floodwaters poured into coal mines, the energy shortage worsened and the state-run economy all but collapsed. Economic recovery — which didn’t begin until 1998 — was halted by further catastrophic floods in 2006, when the economy again shrank, according to an estimate by South Korea’s central bank.

A report on North Korea’s environment as of 2003, jointly prepared by North Korean government agencies, the United Nations Environment Program and the United Nations Development Program, blamed severe “land degradation” on “conversion of forest land in hilly areas to agricultural land.”


The report portrayed Kim Il Sung as a forest-planting enthusiast from as early as six decades ago. Nick Nuttall, a spokesperson at UNEP headquarters in Nairobi, said the agency was “not in a position to comment” on why the report didn’t mention Kim’s mountain-clearing policy.

While the report said reversing the environmental damage through reforestation has become “an all-out campaign,” hungry people have continued cultivating crops between the tree seedlings, according to Han Young Jin, a defector from the North who lives in South Korea.

As the branches spread, “people would tie the sprigs together so the trees could not grow,” Han wrote on a defector-staffed Web site, Daily NK. “When the trees inevitably died, new saplings would be planted.”


Selling to survive

Wednesday, November 21st, 2007

Financial Times
Anna Fifield

Pak Hyun-yong was, by North Korean standards, an entrepreneur. Too much of an entrepreneur. During the famine that ravaged the country in the late 1990s, Mr Pak watched his family die of starvation – first his younger brother, then his older sister’s children. Then, eventually, his sister too.

Somehow he pulled through this period, dubbed by the regime as “the arduous march”, and was spurred into taking some very non-communist, almost subversive action. He began selling noodles.

Every day he would take 10kg of “corn rice” – a poor North Korean imitation in which dried kernels are fashioned into grains – and turn it into noodles. Then he would get on his bicycle and pedal around his home town of Hamhung on the east coast, bartering the noodles for 12kg of corn rice: 10kg for tomorrow’s noodles and 2kg for his remaining family.

“The police would come by and try to persuade me not to sell the noodles, saying that I should not succumb to capitalism and that the Dear Leader would resolve our food shortages,” says Mr Pak, who escaped from North Korea a year ago and is upbeat and energetic considering the hardships he has endured.

Now 32, he is in hiding in a bleak, remote village in northern China not far from the North Korean border, together with his wife, with whom he escaped, and their new baby. They live in a one-room house with no bathroom – protected by locals who are helping them settle.

“The [North Korean] police even threatened to imprison me if I didn’t stop selling. Suddenly I realised that North Korea was a country where they would stop people’s efforts to survive,” he says, sitting on the warm floor of his house, still dressed in the apron he wears to work in a nearby butchery.

“I heard that China was a rich and modern country – that they had tractors and that people could eat rice every day, even in rural areas,” he says, shaking his head. “Chinese dogs wouldn’t eat our rice – they would ask for better.”

In almost 20 interviews along the border with China, ethnic Koreans born in China and North Korean escapees, some of whom had been in the isolated state as recently as two months ago, describe a country where change is taking place from the ground up rather than under the direction of its leader, Kim Jong-il.

North Korea remains the most tightly controlled state in the world. But recent escapees tell of the changes that are being driven by necessity in areas near China, especially in the cities of Rajin and Hoeryong in the north and Sinuiju at the southern end of the border.

While it would be an overstatement to say that this represents the type of nascent transition to free-market reforms that has occurred in countries such as Russia and China, the worsening state of the North Korean economy is leading to widespread trading and the emergence of a fledgling merchant class crossing into China, the escapees say.

Some agricultural markets – rather than just state markets – were permitted during the “economic improvements” of 2002, but ad-hoc markets have since sprung up around the country with the tacit approval, if not the encouragement, of the regime. These markets are now the backbone of North Korea’s creaking economy as the regime provides almost nothing by way of rations any more.

The parlous state of the economy is probably the driving factor behind Mr Kim’s decision to roll back his nuclear programme. The six-party denuclearisation talks are making surprisingly good progress, analysts say, as his regime seeks heavy fuel oil for its rusting industries and an end to economic sanctions.

Certainly, recent escapees from North Korea describe a desperate situation inside the country. Somewhere between 10,000 and 30,000 North Koreans are thought to be living in hiding in the north-eastern provinces of China, especially in Jilin and Heilongjiang, areas considered backward by Chinese standards.

The Financial Times travelled throughout this region to meet North Koreans while seeking to avoid endangering their lives. (North Koreans who are repatriated from China face detention in labour camps or worse, and even those who are not caught put the lives of family members at risk by talking to journalists. For that reason, names have been changed.)

“In Rajin, all the factories have stopped,” says Oh Man-bok, a 22-year-old who escaped in September from the city near the borders with Russia and China, considered relatively prosperous because it is one of the North’s main trading channels. “The men still have to go to work and have their name checked off but there is nothing to do. Sometimes they sit around and sometimes they go home. They don’t get paid but sometimes, in a good month, they get 15 days’ worth of corn in rations,” he says.

That means women are increasingly becoming the breadwinners, going to the mountains to collect edible plants or to the market to sell home-made snacks. “People survive by selling. They do whatever they can to earn money – selling fried dough sticks or repairing shoes and clothes,” Mr Oh says. “But it’s very difficult to earn enough to survive and even in Rajin, many people have to eat porridge made from the whey left over from making tofu.”

Rajin and Sinuiju, as the main thoroughfares for trade with China, have been more open than the rest of North Korea for some time, but the experiment with capitalism that has been taking place in these two cities now appears to be expanding to Hoeryong.

The city of Hoeryong can be clearly seen from the Chinese side of the border, which is marked by a shallow river only 20 metres wide in places. On the bridge between the two countries, the Financial Times watched North Korean trucks trundle into China and dozens of Chinese – and a few North Koreans wearing badges stamped with the image of Kim Il-sung, Mr Kim’s late father and founder of the state – lug bags across.

A Chinese border official says that about 100 a day cross the bridge from the Chinese side, mainly going to visit family members, although in summer as many as 300 go on tour packages to the beach on North Korea’s east coast. About 10 North Koreans a day cross into China for trading or to see their relatives. “With Rmb1,000 [$135, £65, €92] they can come to China even if they don’t have family here. So they often borrow money to come here and buy things for trading in the market in Hoeryong,” the official says.

Bribery appears to be becoming more widespread as trade and travel increases – from a few cigarettes needed to pass through internal checkpoints to the few hundred renminbi expected at border crossings. “Everyone wants to be a border guard these days,” says one Chinese-Korean trader. “They don’t explicitly say, ‘Give me money’ – they just keep going through your paperwork and asking you questions until you offer them money.”

Again, Pyongyang seems to be aware that this is happening and allows it as a way to keep people happy – rotating border guards every six months to give officials from around the country a chance to earn extra money, according to escapees.

In Hoeryong, the market used to be beside the bridge on the outskirts but this year it was moved to a school building right in the centre of town. Its 180,000 residents enjoy a relatively privileged existence because Kim Jong-il’s late mother was born there.

The market has become central to the city and to people’s lives, driven by grassroots demand, says Song Mi-ok, an ethnic Korean living in China who has made several trips to the city recently. She has gained access by visiting fake relatives, a family to whom she pays Rmb1,000 every time she pretends to visit them.

“You can find everything there,” she says of the market, which opens at 7.30am and closes at dusk. “People usually start by selling food that they have grown or made, using the profits to move into goods trading.”

North Koreans say one can buy everything in the markets “except cat horns”, as their expression has it. Rice given as aid from South Korea is on sale and people even display the bag – even though they risk having it confiscated by the authorities – because people know that South Korean rice is of high quality, Ms Song says.

One kilogram of rice in Hoer­yong market costs 900 North Korean won – a huge amount in a country where the average wage for a government employee is about between 3,000 and 4,000 won a month, or slightly more than one US dollar.

“There are a lot of people buying and it’s all money trade; there’s no bartering now,” Ms Song says. “North Koreans are poor, so it’s quite surprising to see people with a lot of money. They don’t receive money from the state – it’s all money they have made themselves.”

One Korean-Chinese man who visited relatives in Hoeryong last year also describes an increasingly active drug trade. It is not uncommon, he says, to be approached by people in their twenties or thirties selling a white narcotic called “ice” – probably a form of crystal methamphetamine. The drug fetches 20 times the North Korean price in China, making smuggling a lucrative business, but the punishment for drug trafficking in China is so severe that Hoeryong dealers try to sell it to visiting Chinese.

The markets are thriving thanks to new border regulations. While the number crossing illegally has dropped because of tighter restrictions in both countries, the number of North Koreans who are allowed to cross into China legally has steadily increased, according to several Korean-Chinese who help those who make it across the border.

North Koreans with relatives in China but not in South Korea are allowed to apply for passports to cross the border. This is creating a new group of migrant workers – those who are legal but working for themselves and their families rather than for the state. “Young people come here to work for one or two months and earn some money – they’re coming from Pyongyang as well as the regions,” says Ri In-chol, an ethnic Korean missionary from China who supports border crossers, legal or otherwise.

“They pay Rmb300-Rmb400 to get a passport and then they can cross. There is now a much freer flow because Kim Jong-il realises that this is the only way to keep the people alive. They take back money, used sewing machines and used clothes from their relatives that they can sell in the markets,” Mr Ri says.

Although Chinese clothes are most prevalent, North Koreans prefer South Korean products for their higher quality. “The labels have to be cut out of South Korean clothes, so if they don’t have a label then people assume that they’re South Korean and they like them more,” says another Chinese-Korean who has recently visited Rajin.

Indeed, Mr Ri says that North Korean officials are picky about what they will let through. “When North Koreans come to China they are allowed to take used clothes back. But when Korean-Chinese people want to give clothes to their relatives in North Korea, they have to be new because otherwise the officials think they are being looked down on,” he says. (Jeans and short skirts, seen as representative of American immorality, are still not allowed.)

The economic changes – particularly the lessening dependence on the state – are potentially destabilising for Mr Kim’s regime because they weaken the tools of control. That means that there is a fine line between what is permissible and what is not. “Kim Jong-il is tolerating this much openness because people need to survive, but if he wakes up one morning and sees capitalism is spreading too far, he will order it all to be stopped,” says Gao Jing­zhu, professor of Korean studies at China’s Yanbian University, near the border.

“North Korea is small, so if there is too much change it will threaten the sustainability of the regime and it will collapse,” Prof Gao says. “North Korea is in a dilemma.”

Good Friends, a Seoul-based civic group that monitors life inside North Korea, this month said Pyongyang was cracking down on women working in street markets. “The authorities have judged that female merchants have reached a point that threatens the country’s government,” Good Friends quoted a North Korean official in China as saying.

“The men are tied to their workplaces but they don’t receive proper rations,” the official reportedly said. “This has shifted the men’s burden of supporting their families on to the women. With trade directly linked to the people’s survival, the crackdown isn’t going well.”

Indeed, it may already be too late. The increased economic interaction with China means that the flow of information to North Koreans is steadily increasing. “People’s awareness and illusions have changed,” says one Chinese-Korean who drives trucks into North Korea.

This is just the kind of contact that threatens Mr Kim’s regime, which has kept the 23m-strong population under control by cutting off access to the outside world and telling them they live in a socialist paradise. Mr Ri, the missionary, says: “People living in open areas like Rajin and Hoeryong are more exposed to the outside world but that is not the case when you go further into North Korea. So even if it is becoming more open, you never know when that is going to change. They will still come after you if you are involved in political activities.”

But recent escapees from North Korea say that people are increasingly discussing – in private – one topic that they say would have been unimaginable until very recently: the eventual death of the Dear Leader. “State control is still as strong as before but now, when people gather together as families, they say that the system is really wrong. That never used to happen before,” says Mr Pak, the man who left Hamhung last year.

“Kim Jong-il always says he will feed the people and make them happy, but that has not happened. There are many people who hope that Kim Jong-il will die soon,” he says, shrugging his shoulders. “I have to admit it: the state is already kind of breaking down.”


Mount Paektu pilgrimage packages for 2008

Monday, November 19th, 2007

Joong Ang Daily
Ser Myo Ja

Seo Myeong-hee has traveled the world to see the pyramids of Egypt, the Great Wall of China and the Grand Canyon in the United States, but she said her visit to Chonji, the crater lake on the peak of Mount Paektu, was the best trip of her life.

“It was a beautiful sunny day in May last year. I was just taken away by the magnificent view,” Seo, 57, recalled of her visit to the mountain that straddles the border between China and North Korea. “After walking along the ridge for about three hours, we were there. The lake was a mysterious blue, and there were wildflowers everywhere.”

Standing 2,744 meters (9,002 feet) tall, Mount Paektu has been worshipped for centuries as the place of Korea’s ancestral origins. In addition to its beauty, it is this rich cultural tradition that prompted Seo, like many South Koreans, to travel through China to see the mountain, since there is currently no way to visit the area via North Korea. “It was a five-day trip, but mostly we spent time in Chinese towns seeing ancient ruins of the Goguryeo Kingdom and other tourist attractions,” she said. “The highlight was definitely Mount Paektu, but you have to sit on the bus for many painful hours to actually get there.”

All that, though, is about to change. Last month’s inter-Korean summit finally opened the door for South Koreans to fly directly to the mountain. It promises to be a popular destination once the infrastructure is complete.

In 2005, North Korean leader Kim Jong-il promised Hyundai Asan Chairwoman Hyun Jeong-eun during a visit to Pyongyang that he would allow a tour program for Mount Paektu. Nothing was done for more than two years, however, until the October summit between Kim and President Roh Moo-hyun resulted in a deal to allow passengers to fly from Seoul to an airport on the mountain.

With cooperation from the Korea National Tourism Organization, Hyundai Group’s North Korea business arm, Hyundai Asan, has begun preparations in cooperation with North Korea’s Asia-Pacific Peace Committee, which handles civilian inter-Korean projects.

Hyundai Asan, which has the sole franchise to operate tours to the North from South Korea, plans to begin offering tours to Mount Paektu in May 2008. The only other tour program from the South allows visitors to travel to Hyundai’s resort at Mount Kumgang, a project that began in 1998. A South Korean team including officials from the KNTO, the Roh administration and Hyundai will make an on-site survey of Mount Paektu before the end of this month.

Yoon Man-joon, president of Hyundai Asan, told the JoongAng Daily in an interview Thursday that he is extremely optimistic about the tour project. Yoon and Hyun visited the mountain personally early this month.

“The Mount Kumgang tour had more of a symbolic meaning, because it was the first opportunity for South Koreans to go to North Korea for tourism,” Yoon said. “Mount Paektu, however, has much more potential to succeed solely as a tour program.”

Yoon thinks demand will be high and response immediate once the tours begin. “Mount Kumgang is praised for its scenic beauty, but Mount Paektu is more than that,” Yoon said. “The place is the origin of all Koreans, and it is an extraordinary experience for us to visit there.”

Seo could not agree more. “When I saw Chonji, the crater lake, I became so emotional that I almost cried,” she said. “The lyrics of our national anthem even begin with the mountain ― ‘Until the East Sea’s waves are dry, and Mount Paektu is worn away, God watch o’er our land forever!’”

The mountain has long been considered sacred. In Korea’s creation myth, Hwanung, a son of the Lord of Heaven, was allowed to descend onto Mount Paektu with 3,000 followers and found the City of God.

There a tiger and a bear told Hwanung that they dreamed of becoming human, and Hwanung gave them 20 cloves of garlic and a bundle of mugwort, ordering them to eat only those foods and remain out of the sunlight for 100 days. The tiger failed, but the bear endured and eventually was transformed into a woman.

The bear-woman then prayed for a child, and Hwanung took her for his wife. A son, Dangun, was born, and he built the walled city of Pyongyang and called his kingdom Joseon. Not to be confused with the Joseon Dynasty, the kingdom is referred to in Korean history as Gojoseon or Ancient Joseon. Historians believe his kingdom began in 2,333 B.C.

This mythology is still marked on the modern Korean calendar, with Oct. 3 celebrated as Gaecheonjeol, or National Foundation Day, which marks the establishment of the first Korean kingdom.

The opening of Mount Paektu is not without controversy. Other travel agencies have expressed their displeasure with Hyundai Asan’s monopoly on tours to the famous mountain. On Nov. 13, Shim Joong-mok, the president of the Korea Tourism Association, held a press conference and said the group wants a share of the potentially lucrative market. He said the association, which represents more than 20,000 travel agencies in Korea, may take legal action if their request is not met.

Hyundai Asan President Yoon rebuffed the demand. “The agreement we have with North Korea for exclusive rights to Mount Paektu tourism is a legitimate commercial deal,” Yoon said. “They act as if we received this right for free, but we have made vast investments in North Korea over the past nine years and earned the North Korean authorities’ trust. The tour program was given in return.”

Yoon said the tourism industry should respect market principles. “It would be the same for any other beautiful mountain. Would it make sense for me to develop a resort under an exclusive contract and then have other travel agents demand that they also want to do business there?” Yoon asked. “The travel agents’ demand is unreasonable.”

According to a Hyundai Research Institute report, it will cost up to $1.26 billion to develop a resort on the mountain comparable to the facilities in Pyeongchang, the South Korean city that hopes one day to host the Winter Olympics.

Yoon said he is confident about the Paektu program’s potential, citing his recent visit to the mountain. “There are two lodging facilities built by North Korea on the mountain. One is Sobaeksu State Guest House and the other is Baegyebong Hotel. Both are modern, and they will be usable after some modifications,” Yoon said.

He said the survey team, which will leave before the end of this month, will also study what work is needed for Samjiyon Airport on Mount Paektu to begin receiving flights from South Korea. “We will have a better idea after surveying the runway and traffic tower,” he said, adding that Korean Air and Asiana have both expressed interest in flying to North Korea.

The modernization of the airport may also be expensive. The Ministry of Construction and Transportation said in a report last month that repairs will cost 280 billion won ($304 million).

The price of the tour program is also still to be decided. “It will be competitive with tour programs via China,” Yoon said. “We don’t want to make it too expensive or too cheap.”

Seo said she paid 1.2 million won for her five-day package to visit the mountain via China. “I didn’t think it was too expensive,” Seo said. “If I can fly to the mountain in just two hours at a similar cost, I will be more than willing to go one more time.”

Running a tour program for Mount Paektu is also tricky because there are only few weeks in the year when Chonji Lake can be seen in good weather. “I was happy because the May weather was fantastic,” Seo remembered. “The tour guide said we were lucky because many groups could not see the magnificent view due to the weather.”

According to Yoon, Hyundai Asan is reviewing other plans to use the mountain’s winter weather as a possible attraction for sports and hot springs.

The new tour may take away one small attraction of the Chinese route ― a chance to see the low-key North Korean border with China. “The border is not heavily guarded,” Seo said. “Our guide even allowed us to cross the border on foot. The North Korean guard smiled at us, and we took a souvenir photo together. I gave him a chocolate, and he was really thrilled.”


N.K. officials visit Wall Street over access to global financial system: sources

Monday, November 19th, 2007


A North Korean delegation is visiting Wall Street to meet financiers and attend a seminar that could help the isolated communist country gain access to the international financial system, sources here said on Sunday.

The six-member delegation led by Ki Kwang-ho, a director at the North Korean Finance Ministry, arrived here on Thursday for the two-day-long session, which starts Monday. The U.S. side is to be represented by Deputy Assistant Treasury Secretary Daniel Glaser and other officials involved in ending Pyongyang’s suspected illicit activities.

The visit by the North’s delegation, the first of its kind, comes about one year after the release of some US$25 million in North Korean funds that were frozen at a Macau bank over their alleged connection to money laundering and other illegal activities.

Although the assets were released in a one-time transaction through the international financial system, the North has said it wants full access to the system without financial sanctions from the U.S., which has considerable influence over the global market.

The delegation’s visit also coincides with recent progress in the multilateral negotiations for North Korea’s nuclear disarmament, in which Washington is negotiating with Pyongyang on the removal of the North from its list of state sponsors of terrorism and the termination of the application of its Trading with the Enemy Act.

Washington, one of major shareholders in the International Monetary Fund and other lending institutions, is obliged by law to oppose any loans to countries on the list.

The North Korean financial officials met with financiers at the heart of global finance here Saturday to discuss international financing for the isolated communist state, informed sources said.

Donald Gregg, chairman of the New York-based Korea Society, quoted the North Koreans as saying Friday that they came to learn about ways to get access to the international financial system.

While attending a seminar sponsored by the National Committee on American Foreign Policy, the North Koreans asked about know how to join the IMF and other international financial institutions, the former U.S. ambassador to South Korea said.

Another North Korea expert, however, predicted a long and bumpy road ahead for the North, saying the isolated, impoverished communist state needs a lot of manpower, experience and technologies before joining the international financial system.


Hyundai Asan plans to add Pyongyang to tours of N. Korea’s highest peak

Monday, November 19th, 2007


A South Korean company operating businesses in North Korea said Monday it plans to add the North’s capital to the itinerary for future tours of the North’s highest peak, located on the border with China.

Hyundai Asan, the North Korean business arm of Hyundai Group, is preparing to launch tours of Mount Paekdu in May next year, after the leaders of the two Koreas agreed to establish direct flights from Seoul to the mountain at the second-ever inter-Korean summit early last month.

“We already asked South and North Korean authorities to include Pyongyang in the tour route to Mt. Paekdu,” said Yoon Man-joon, chief executive officer of Hyundai Asan.

Yoon said he was “optimistic” about adding the North Korean capital to the route because the North shared a “similar view as a business partner.”

Yoon made the remark during a press conference at North Korea’s Mt. Geumgang, where the company operates the only South Korean tourism business in the North, to mark the ninth anniversary of the start of the tourism project.

Although Yoon gave no exact timetable for the Pyongyang tours for ordinary South Koreans, company officials hinted they will probably be available in early 2009.

The Mt. Geumgang tourism program, which started in 1998, is the only one that gives foreign tourists an opportunity to easily see parts of North Korea.

Hyundai Asan is believed to pay hundreds of millions of U.S. dollars to North Korea in fees for the program, which has drawn more than 1.5 million tourists.

At the inter-Korean summit last month, President Roh Moo-hyun and North Korean leader Kim Jong-il agreed that their countries would work together on a wide range of economic projects, even though the two states are still technically at war because the 1950-53 Korean War ended in an armistice.