Archive for February, 2008

PBS Will Broadcast Concert From North Korea

Tuesday, February 19th, 2008

Update: Today the New York Times reports that the North Korean government has agreed to broadcast the New York Philharmonic’s Pyongyang concert live on state television.  Why is this interesting? First of all, this means that the US national anthem, and many other beautiful songs, will be played over North Korea’s airwaves–probably for the first time.  Secondly, communist countries are typically very hesitant to broadcast anything live. 

easttheater.JPGThe concert will take place in Pyongyang’s East Theater, located in the Munsu district on the east side of the city.

One thing is for sure, Politics aside, the performance will certainly be more interesting than the concert South Korea’s Shinhwa and Baby V.O.X. put on in Pyongyang! 

Original Post: 2/7/2008 
Today the New York Times (link requires free registration) ran a story on who will be broadcasting the New York Philharmonic’s concert in Pyongyang…

The New York Philharmonic’s concert in North Korea on Feb. 26 will be broadcast that evening on [New York’s local PBS station] WNET, Channel 13, and distributed two days later on PBS, broadcast officials said Wednesday.

In an unusual arrangement, ABC News will cooperate with WNET, New York’s public television station, to produce the broadcast.

Because of the time difference, the concert will actually take place before dawn New York time on Feb. 26. A live broadcast will be made available for any takers by EuroArts Music International, which produces and distributes classical music programming and has the rights to the broadcast outside South Korea.

The most interesting part of the story, however:

One place where the broadcast is still uncertain is North Korea itself. Government officials there have not said whether the concert will be shown on local television, according to Eric Latzky, the Philharmonic’s spokesman.

Given North Korea’s deep isolation and the government’s tight control over its citizens, the broadcast issue is of crucial interest. Orchestra officials said they had pressed hard to have the concert shown on North Korean television, to ensure that it would be heard by more than just a small audience of dignitaries. The broadcast of any event from North Korea is rare.

You can read the stories here:
Concert in North Korea to Be Broadcast Live
New York Times
Daniel Watkin

PBS Will Broadcast Concert From North Korea
New York Times
Daniel Wakin


More on the DPRK-Orascom deal…

Monday, February 18th, 2008

Since Orascom announced at the end of January that it was going into the cell phone business in the DPRK, there has been a lot of follow up reporting which has flushed out a broader picture of the DPRK’s attempts to launch a mobile phone network.

Today Yonhap is reporting that Pyongyang will likely go live with the Orascom project in April, although on a piecemeal schedule:

The measure will affect only Pyongyang, the North’s capital, this time and gradually expand to cover other major cities in the communist country, the Tokyo Shimbun said, quoting an unnamed North Korean official in Beijing.

North Korea has prohibited its people from using mobile phones since a deadly explosion occurred at the Ryongchon train station near the North’s border with China in April 2004. Debris of a mobile phone with adhesive tape attached to it was reportedly found at the scene of explosion, leading the authorities to impose the sudden ban in the belief that the mobile phone could have been used as a detonator.

More details of the deal also emerged:

Cheo [an Orascom subsidiary] secured a 25-year license and will invest up to US$400 million in network infrastructure. The North Korean state company owns a 25 percent stake in Cheo, Orascom said.

How accessible will the  new phones be?

Choi Yeong-cheol, 43, who defected from North Korea in 2006, said that senior party and administrative officials as well as trade workers were given mobile phones for free in 2002. “But ordinary people have not even dreamed of using a mobile phone because it cost them 170,000 North Korean won,” Choi told Daily NK, a Seoul-based Internet newspaper. The figure of 170,000 won is big money considering the average monthly payment for ordinary North Korean workers is up to 3,000 won (US$1) now.

The full article can be found here:
N.K. to lift mobile phone ban in April: Japanese daily


DPRK tries to increase “taxes” on bus (coach) market

Monday, February 18th, 2008

bus.jpgDuring the late 1990s, North Korea suffered a terrible economic collapse which resulted in famine and massive social dislocation.  During this time, most ministries and state-owned companies  were cash-strapped and unable to maintain their operations.  Out of desperation they turned to private investment for much needed revenues by outsourcing many basic services. (Individuals who were capable of taking up such opportunities were probably small in number at the time, but apparently now compose a healthy sub-section of the population.)

Outsourcing has benefited both the government and private entrepreneurs.  Outsourcing allows state-owned companies to receive capital financing from private individuals as well as a share of joint-venture revenues (tax revenues).  Private entrepreneurs need a legal business environment where they know they will not be subject to ex-post expropriation of profits.  Leasing the name of a government body gives them some of this legal cover.  This system is no doubt tolerated because it allows the government create space for entrepreneurship (and tax revenue) within the existing state structure while still maintaining de jure control of the means of production.   

According to the story in the Daily NK, the regulations for establishing a legitimate passenger bus company under this system (or “coach” company for readers in Her Majesty’s Commonwealth) are fairly strict.  Once an individual acquires a bus (appx US$6,000-10,000), he has to register it with the government body for whom he is working.  Revenues are then split 70/30 (the government taking 30%) for three years, after which the individual is required to “donate” the privately acquired bus to the state-owned enterprise.  This policy literally gives North Korean entrepreneurs just three years to recoup their investments!

The response of the North Korean business community was predictable:  investors sell the buses before the three years are up or they forge registration papers.  This is not hard to do in the DPRK.  In fact if you have just one other associate who owns a bus in similar condition, all you need to do is trade with him every three years and re-register the new vehicle. 

Word of this game has finally reached the top and they have responded by increasing their share to 70% of passenger bus revenues–leaving just 30% for the purchaser of the vehicle.  It is unclear from the story if investors are still required to “donate” their busses after three years, but realizing that the confiscation of buses was not enforceable, the North Korean government probably just opted for a larger share of the revenue over time.

The good news is that it is not likely that many people pay 70% of revenues either.  After-all, someone has to collect these taxes and he has needs too.  Sounds like some kind of arrangement could be reached…

You can read the full story here:
North Korea Regulates Operation of “Service Car”
Daily NK


The reports of my death are greatly exaggerated..

Sunday, February 17th, 2008

It seems opposition efforts to spare the South Korean Ministry of Unification were not entirely successful. Yonhap is reporting that even though the ministry will retain its name, much of the rest of it is on the chopping block.

Sources said that if the ministry is retained, its five divisions and one office may be reduced to a single office and three bureaus, with part of its work transferred to the other ministries.

The ministry’s five division headquarters — including unification policy, economic cooperation and cultural exchange — are likely to be reorganized into smaller bureaus, with public relations and information analysis to come under the direct control of the minister.

The office in charge of the Kaesong industrial complex may be turned over to the newly created Ministry of Knowledge-based Economy.

However, the ministry may retain control of inter-Korean dialogue headquarters, the inter-Korean transit office, and a settlement support team for people who have fled North Korea.  (Yonhap)

Although I personally favor an engagement policy with the DPRK, sending the signal that MoU standard practices will no longer be tolerated might actually encourage the DPRK to use donated funds and supplies in an acceptible way.  Remember: carrots AND sticks.  See the game theory here.  However, since the DPRK’s new game seems to play the US, China, Russia, and South Korea off of each other, some are concerned that pushing the DPRK too hard on accoutability and transparency in managing their donations might simply shift North Korea more firmly into China’s corner–which according to Lankov, they already have a strong incentive to do… 

Original Post: 2/8/2008
In the political shake up following the recent South Korean elections, incoming President Lee Myung-bak floated the idea of merging the Ministry of Unification (responsible for the North Korea protfolio) with the South Korean Foreign Ministry.  The story is here.

Today, Reuters is reporting that the Unification Ministry is here to stay.  Afterall, the first rule of bureaucracy is, “Why have one ministry when you can have two at twice the cost!” 

South Korean lawmakers have agreed to spare the ministry responsible for relations with North Korea and reject a call for its closure made by the president-elect, local media reported on Saturday.

The compromise allows the Unification Ministry to stay while lawmakers try to strike a deal to shut other ministries in a plan backed by Lee to streamline government, local media reported lawmakers as saying.

Critics say Lee’s proposal to close the ministry primarily responsible for relations with North Korea could send the wrong signal to Pyongyang, which has long accused Lee’s conservative party of plotting to keep the peninsula divided.

The Unification Ministry has been at the centre of criticism that the outgoing government had been too soft on the impoverished North, pouring aid across the border despite internationally condemned missile and nuclear tests. (Reuters)

The full article can be found here:
South Korea to keep ministry on North: media
Rhee So-eui

New gov’t to downsize Unification Ministry


“Crossing the Line” now out on DVD

Saturday, February 16th, 2008

crossing.jpgThe third film by Dan Gordon and Nick Bonner is now out on DVD.  

The film’s official web site is here.

Order the film on here.

Nick and Dan, what’s next?


English education in the DPRK

Saturday, February 16th, 2008

English education in North Korea is on the increase.  On each of my visits in 2004 and 2005 I saw classes of all ages learning English–from elementary school students to older professionals.  (I wonder if Chinese tourists are taken to Chinese language classes?)

While visiting Pyongyang in 2005, I met a Canadian woman who was teaching English at the Grand Peoples’ Study House, and she seemed to be doing a good job teaching “conversational” English.  Here is a photo of one of her student’s notepads.

Additionally, she was paid in Euros; lived in the Central District (unlike most expats who are confined to the Yangdakdo Hotel and the Munsu diplomatic neighborhood); and she was recruited in China.

There can’t be too many Canadian women teaching English in Pyongyang, so I wonder if she is the same teacher featured in this Yohap story on the DPRK’s TEOFL exam scores:

Canadians seem to dominate the English profession in Pyongyang, another one was featured in this Yohap story on the DPRK’s TEOFL exam scores:

The average TOEFL score in the computer-based test by North Korean nationals has improved from 178 in the 1998-1999 period to 189 in 2003-2004 and 190 in 2004-2005.

The annual number of North Korean citizens taking the test, which stayed around 1,000 before June 2000, topped 4,000 in the 2003-2004 period and surpassed 6,000 in 2005-2006.

According to North Korean defectors in Seoul, Pyongyang has emphasized the importance of learning English since the 1970s.

“People are very eager to learn so there is a lot of improvement. Some of my students scored 500 on the (written) TOEFL exam,” Jake Buhler, a Canadian who taught English in North Korea for three months in 2004, was quoted by the radio station as saying.

English is now taught at all middle and high schools as well as universities in North Korea, according to Shin Eun-hi, a North Korean defector who taught English at the prestigious Kim Il Sung University and a foreign language college in Pyongyang. North Koreans previously avoided from learning English, calling it a language of U.S. imperialists.

However, she said only a small number of select people receive high-level English education. “The North Koreans who take the TOEFL are mostly students studying in third countries like China, Foreign Ministry officials and spies headed overseas,” another defector told Yonhap News Agency, requesting anonymity. “Such people are not inferior to South Koreans in their English skills.” 

The full article can be found here:
N. Koreans, S. Koreans have similar TOEFL average: report


‘Back to the future’ for Pyongyang’s markets?

Friday, February 15th, 2008

When looking at North Korea’s cities on Google Earth one can’t help but notice the number of monuments to the Great Leader.  But if you are looking for the true heart of the cities, in other words where all the people are, you need to look closely for North Korea’s markets.  They do have them–in all of the major cities visible on Google Earth:

pyongyangmarket.JPG kaesongmarket.JPG
wonsanmarket.JPG sinuijumarket.JPG
(Clockwise from upper left) Markets in Pyongyang, Kaesong, Sinuiju, and Wonsan

This week, the Daily NK reported that the new regulations and crackdowns on market activity are meeting with resentment in Pyongyang. 

What happened?  Supposedly Pyongyang’s new Party Chief Secretary suggested to Kim Jong Il the idea of converting the jangmadang into farmers markets (in other words only selling agricultural goods from the countryside as in the past), and Mr. Kim approved it.

As of January 15, public announcements were placed on the entrances of marketplaces detailing what could/could not be sold in the market.  Violators are subject to having their goods confiscated by inspection units (these sorts of policies are ripe for promoting corruption).

Ever entrepreneurial, North Korean sellers simply adapted, shifting location from inside the marketplaces to back-alleys.  Seemingly, they are still subject to inspection and confiscation in these local neighborhoods, but apparently the risk is lower.  Several of these street markets are also visible on Google Earth:


But others have decided to stay put in the markets and simply hide their goods:

A portion of the people still secretly trade in the jangmadang. Simultaneously avoiding the inspection units, they refrain from putting out the goods and bargain with customers by holding up signposts. When they tell the passing-by customers, “This is what I have,” a bargain is reached. Of course, the goods are temporarily stored at a nearby residence and taken out after the bargain. (Daily NK)

Lankov also discussed the regulations and games people play to avoid the market inspection units here

The full article can be found below:
Jangmadang Will Be Converted to Farmers Markets
Daily NK
Jung Kwon Ho


North Korea Now: Will the Clock Be Turned Back?

Friday, February 15th, 2008

This morning I received an email from a reader at the Brookings Institution who shared an article by one of their visiting fellows.  Much of it was about US/DPRK foreign policy, but I thought the following excerpt was interesting from a social change perspective:

On a recent visit to Pyongyang, this author was impressed by the sheer scale of new economic phenomena in DPRK. In terms of variety of goods, activity, and scale, markets in North Korea’s central areas (less in the provinces) remind of Chinese provincial markets. Numerous restaurants serve good—and very cheap, by Western standards—food to customers flocking to them. New “service centers” (eundokwon), combining shops, saunas, and restaurants under one roof, have sprung up and are run by highly placed entities such as Party departments and “offices.” Every branch of the Party, military, and local authorities now operates trading companies. Real business managers have appeared, some engaged not only in the “shuttle” trade with China but in bigger projects (in construction, for example), and some corporations have amassed a considerable volume of business. Judging by the author’s experiences in the 1980s and 1990s, these “new Koreans” are much more realistic and open to contact with outsiders than was the case before. There are changes in the official line as well: North Korean economists explained that now, out of several hundred thousand products manufactured in the country, only several hundred are now centrally planned. For the vast majority of manufactured products, managers of the state-owned enterprises are given a free hand to determine their production targets and to get what they need through the “socialist wholesale market.”

Having witnessed the processes eventually leading to the denunciation of the command economy in the USSR, and the transition to a market-based economy, this author can testify that there are striking resemblances in certain aspects of contemporary daily life in the DPRK to the USSR in the 1970s and 1980s (the Chinese experience in the1980s, with private enterprise officially sanctioned, is less similar). At that time in the Soviet Union, a vast black market of goods and services began to form in major cities. Many of its dealers became (often after a prison term) the leading businessmen of the post-Soviet era.

For example, at that time there was no private property for apartments in Moscow or elsewhere, and no real estate market officially existed. But at the same time almost any Soviet in the course of his life would “change” one apartment for a better one, paying considerable sums of money to the former “owner.” Some shadowy dealers would buy apartments outright, bribing officials to get a “registration” (propiska), and many made a profession of acting as a “go-between.” Similar activities are sprouting like mushrooms around North Korea. A one-room apartment in Pyongyang is said to cost about US$5000, less in local areas. However, real estate in some small cities close to Pyongyang boast the same high prices, as various kinds of dealers and traders, who are not permitted to settle in Pyongyang, buy apartments there. Foreign currency flows freely and, like in the USSR, most things can be obtained for money. A Russian joke said: “if it is illegal, but very much desirable, it is not prohibited.”

The ground for developing market relations is well prepared. The “royal economy” serving the ruling class (Kim Jong-il’s immediate retinue and the top nomenklatura or kanbu), and a large part of the internationalized sector (joint ventures and free economic zones) operate on market principles. The next step, should the country’s leaders admit the need for developing the country and sustaining their power, should be “setting the rules of the game” by providing a legal framework for what already exists. For that, however, external security should be guaranteed to the regime—irreversibly and comprehensively. Only then will the hard-liners, who fear—with good reason—that reforms would invite subversion of the regime, be confident enough for real progress to take place. Nevertheless the words “reform” and “openness” (especially because of their “Chinese connotations”) are unacceptable to Pyongyang, and Kim Jong-il himself stated as much during his talks with Roh Moo-hyun in October 2007. Under the present leadership Pyongyang, any economic reforms would most likely never be called such and would take place in an unpublicized manner without discussion, which is not helpful in terms of public relations with the West and negative international sentiment about the regime.

The full article can be found here:
North Korea Now: Will the Clock Be Turned Back?

Georgy Toloraya, Visiting Fellow, Center for Northeast Asian Policy Studies


The gratuitous game theory of official support

Friday, February 15th, 2008

Yesterday’s post on accountability and South Korean aid to the North got me thinking about game theory again.


The South Korean Ministry of Unification has a dominant strategy to lend/give/invest in North Korea for ostensibly two reasons: 1. If the MoU does not, their raison d’etre goes away.  2. South Korea will ultimately see a payoff if a development strategy works in the DPRK.

Contracting with North Korea, however, is essentially a prisoner’s dilemma (see chart above), and North Korea has the ability to cooperate or defect.  However, the North Koreans have rational expectations, so they know the Ministry of Unification has a dominant strategy to cooperate.

Therefore the Nash equilibrium is for the South to keep cooperating and for the North to keep defecting.  In a repeated game, cooperation evolves over time as trust develops and defection decreases.  Because of South Korea’s dominant strategy,however, the North never has an incentive to cooperate–so we end up with an “anti-folk theorum” where defection is the only incentive compatible outcome over time.

Addendum: The game could be radically different for private investors, however, who are in a more credible position to say “no”–leading to defect/defect moves (because South Korean investors are not as politically constrained and can recognize sunk costs).  These moves result in neither gains nor losses for either side, however, because both sides have the ability to bargain, cooperation that is mutually beneficial can evolve over time as it should.


DPRK military on Google Earth

Thursday, February 14th, 2008


As many readers know, I have been mapping out North Korea’s military facilities (along with many other things) on Google Earth for some time.  Having never served in the military, I am not qualified to speculate on what many military locations are, but I discovered a web page that has a phenomenal explication of specific locations, even including 3-D overlay images (two  of the may comparisons are at the top of this post).

Anyone who is interested in Google Earth, or North Korea’s military infrastructure, needs to check out the full offerings at “Fortress North Korea” on “”.

And if you have not done so, download “North Korea Uncovered v.8” on Google Earth here.  Sorry Google Maps users, the file is too large.