Professor Tullock began his career in the US State Department, where he had a front row seat to Chairman Mao’s defeat of Chiang Kai-shek. He was actually in Beijing the day the communists entered the city, and for several years afterwards, he worked the China and North Korea desks for the State Department.

Since moving to Virginia in 1999, I have been honored to work down the hall from Professor Tullock, and he has always been a great source of wisdom and humor.  I wish to congratulate him for his notable and prolofic career(s). 

Quoting from his article:

The author is not privy to the great secrets of the assorted intelligence services that are trying to penetrate the mysteries of Pyongyang palaces. That said, one cannot completely rule out a possibility that the Dear Leader’s most trusted doctor is actually on the United States Central Intelligence Agency’s payroll, or that a couple of senior North Korean generals report to Seoul on the recent decisions of Kim Jong-il’s inner circle.

Such high-level penetration is not completely impossible - but it is very, very unlikely. It seems that even the most cunning and successful intelligence services are faring very badly when it comes to cracking North Korean secrets. Things might be going relatively well as long as signal intelligence is concerned: satellites do miracles these days. However, satellites and signal interception and other technological gadgetry is good only when it comes to detecting hardware. No satellite or drone can tell much about human plans and intentions, or about the state of society, and this is where the real problems begin.

To start with, the North Korean state is deliberately designed to be a mystery for outsiders. No state is welcoming to foreign spooks, but most states limit their counter-intelligence efforts. After all, perfect secrecy, if achievable, is too expensive because it makes information exchange impossible and hinders economic life. The North seems to be unrestrained by these concerns. Pyongyang believes that total secrecy is the pre-condition of the regime’s survival, and clearly doesn’t worry too much about the economic efficiency of its system.

The major source of information about any country is its media. However, since the early 1960s the North Korean press ceased publishing economic statistics of any kind. All information about economic performance is a closely guarded state secret. Therefore, our knowledge of the state of the North Korean economy is largely based on guesswork.

Still, certain things are known quite well. For example, foreign trade statistics are easily deduced from the trade reports of countries which deal with North Korea. On the other hand, when it comes to even the most basic macroeconomic indicators, estimates vary greatly. North Korean per capita gross domestic product is believed to be somewhere between US$400 and US$2,000. Also, there are some topics which cannot be mentioned in official press or elsewhere, such as the existence of rationing or the need to apply for a permit before travelling outside the county.

North Korean watchers spend plenty of time perusing the Nodong Sinmun and Minju Choson, the two official North Korean dailies which are available overseas. Although boring and repetitive to the extreme - and full of endless eulogies to the ruling family - these newspapers sometimes indicate subtle changes in official policies and ideologies. Still, these are merely hints, and often too vague to be interpreted correctly or expediently.

More direct intelligence has come with great difficulty. The number of foreigners residing in North Korea remains very small. In the mid-1980s, there were some 600-700, over 60% of whom were Russians and Chinese. Today, foreigners remain closely watched and isolated. A foreigner cannot visit the private home of a North Korean even briefly - only institutions which are authorized to deal with foreigners can be visited. A short conversation on the street is possible, but it should not be for too long.

North Koreans allowed to visit “foreigners’ places” are carefully selected and know what not to talk about. Foreigners - even those with Asian features - stand out in North Korea and are carefully watched by a population trained to remain on guard against intrusions of perfidious aliens. Trips outside Pyongyang and a few designated areas remain strictly prohibited; when such a trip is authorized, a foreigner is always accompanied by minders.

The only group of foreigners to enjoy some freedom of movement in North Korea are Chinese - and these are often ethnic Koreans. Chinese authorities probably have the best information about the state of affairs inside North Korea, but their knowledge remains unknown to the outside world.

Despite all the difficulties, the world does know - or believes it knows - something about Pyongyang politics. Until recently, the major source of news and information about North Korea was Japan. This was largely determined by Japan’s some 600,000-strong ethnic Korean community.

Surprisingly, in the 1950s, most ethnic Koreans in Japan chose to side with Pyongyang and even technically became North Korean citizens. Their association, Chosen Soren, became a secretive state-within-the-state, a major source of money and intelligence for North Korean authorities. Leading members of Chosen Soren have always had privileged access to powerful figures in the Pyongyang hierarchy. Understandably, some information was leaked.

However, as a rule most Japanese reports on North Korean politics are well of the mark. In some cases “news” is planted by political interests, other times false reports are honest mistakes. It is even suspected that in some cases journalists have deliberately fabricated stories to increase sales of their papers.

One of the major changes in recent years is that the border between China and North Korea has become extremely porous. Since the mid-1990s, the Chinese border areas have been major windows into the North. There is also a large community of North Korean illegal migrants, whose numbers in the late 1990s probably reached 250,000. Now there are some 30,000-40,000.

Some of these migrants make good money smuggling; others are employed at Chinese construction sites and sweatshops. These migrants stay in touch with their families in the North and the spread of mobile phones has facilitated the instantaneous flow of information.

Such family ties are hardly akin to James Bond-style secrets, but they do transmit handy low-level information about regulations on market trade or rules concerning workers of local factories. Until some 10 years ago, even such basic information usually remained unknown to outsiders.

Some groups have made use of the situation to provide North Korean news to the world. Most prominent of these providers is the Buddhist charity group Good Friends whose staff is permanently stationed in the border cities, where they gather information from visiting North Koreans. The results are published in regular newsletters that are partially translated into English. These newsletters provide invaluable intelligence.

Among other groups using similar strategies, the DailyNK is an online newspaper specializing in North Korean news and has correspondents in the Chinese border cities of Dandong and Shenyang. Their reports are very useful in understanding North Korean society, but seldom deal with high-level politics.

Finally, there is a large and fast growing community of North Korean defectors in the South. In 2000, there were merely a thousand defectors, but today their numbers have reached 15,000. These emigrants are remarkably different from the defectors of Europe’s Cold War era. People who fled from the former Soviet bloc included intellectuals, journalists, scholars and writers. Most of the North Korean defectors were impoverished farmers in the northern provinces. Many fled their starving villages, spent a few years in China and then found their way to the prosperous South. Prominent defectors are few and far between.

Still, all defectors possess useful information concerning daily life in North Korean society. This understanding is the major improvement from one or two decades ago. Observers are aware of how North Koreans make money, what they eat and how much they pay for their groceries.

We should not forget, however, that our knowledge of North Korean politics remains limited. In some cases we know names, but those names are merely empty symbols, without much content. For example, there is much speculation about Kim’s successor. Will it be Chang Song-t’aek, Kim’s brother-in-law? Or will Kim Jong-il choose his firstborn son, Kim Jong-nam? Or perhaps his younger son, Kim Jong-chol? And what about the current ladyfriend of the Dear Leader, a certain Ms Kim Ok?

The fact is we know nothing about these people. We have no idea about their affiliations, their experiences, or their vision for North Korea’s future.

Read the full article here:
Riddles and enigmas from North Korea
Asia Times
Andrei Lankov
11/19/2008

Quoting from the article:

The volume of border trade between North Korea and China has plunged in the wake of the global financial crisis, the Hong Kong daily Ta Kung Pao said yesterday.

Trading in the market along the border line and approved by the Chinese government has effectively stopped, the report said. Such trading is also not categorized as international trade.

“We found such a result after inspecting 1,334 kilometers from Dandong down the Yalu River to the Tumen River over 20 days,” the daily said.

The trade of mineral resources was hit hardest. The price of yellow copper has fallen from 60 yuan (around 12,000 won) in March to 12 yuan. That of red copper has dropped from 100 yuan (around 20,000 won) per kilogram in April to 24 yuan.

Over the same period, the price of iron ore has plummeted nearly 70 percent from three to four yuan to 1.2 yuan.

The daily said North Korea’s largest copper mine in Hyesan suspended production as prices of mineral resources for export have fallen.

North Korean exports to South Korea via China have also sharply decreased.

A trader in Longjing said, “The global financial crisis has significantly affected border trade since last month. It is hard for North Korean merchants to bring goods to Chinese markets. But it is far harder to find North Korean merchants who cross the border to buy goods in China.”

Read previous posts on this topic here.

Read the full article above here:
N. Korea’s Border Trade With China Plunging 
Donga Ilbo
11/19/2008

The South Korean civic organization ‘Good Friends’ recently reported that North Korean authorities have prohibited North Koreans from working private plots in the mountains which had been cleared and used for grain production, and have recently begun replanting trees in these areas.

A source for Good Friends stated, “The Central Party decreed last September 29th, ‘The Fatherland’s mountains and fields must be adorned with green so that not one single desolate plot exists by the year 2012.’” Accordingly, garden plots are already being reclaimed from individuals and planted with trees.

North Korea is declaring 2012, the year which marks the 100th anniversary of the birth of Kim Il Sung and the 70th birthday of Kim Jong Il, ‘The Year Opening the Gates to a Strong and Prosperous Nation’.

The source stated that local residents in Booryung, North Hamm planted corn, potatoes, beans, and millet on those plots, relying on them for between 3 and 6 months worth of food, and that with the new decree prohibiting farming, more people would die. 

*NKeconWatch: The DPRK just recently replaced its Minister of Forestry.  This is his first large-scale policy initiative. 

North Korea’s capital city of Pyongyang appears to be getting a facelift. The (North) Korean Central Broadcasters has reported that a city beautification project is underway in Pyongyang.

An apartment-erecting crane is building a new skyscraper, while construction has been restarted on the 16-year old remains of the shell of the Ryukyung Hotel as large-scale construction equipment and barges crowd the river as piles of construction materials can be found at each construction site.

Pyongyang insiders report that efforts getting underway in this anniversary year marking 60 years since the founding of the country are part of an effort to make Pyongyang a completely new city by 2012, when the North will mark the 100th birthday of its eternal president, Kim Il Sung.

Pyongyang is being developed as a ‘showcase capital’ for international visitors to the poverty-stricken North, as the North Korean people refer to Pyongyang as the ‘capital of the revolution.’

Recently, South Korean representatives from organizations providing aid to the North have reported being been surrounded by new construction of hotels and other buildings and the refurbishment of older buildings such as the Pyongyang Grand Theater.

What is curious is that the origin of the capital needed for these large-scale construction projects appears to indicate growing investment from foreign enterprises. The Ryukyung Hotel construction is reportedly being supported by a United Arab Emirates (UAE) company.*

A South Korean entrepreneur recently in Pyongyang quoted a Pyongyang official as saying, “The Ryukyung Hotel will be complete within three years,” and that the Daedong River Hotel construction was almost in the finishing stages with the help of foreign investment.

In January of this year, the Egyptian wireless communications company Orascom announced it would invest 400 million USD in order to construct the North’s first wireless communications network.

Also, North Korea’s foreign trade appears to have grown this year, especially because, as energy demand has sharply increased, the North’s export of mined materials to China appears in early calculations to have expanded considerably.

* NKeconWatch: This is the first I have heard about a UAE firm.  Previously, discussion centered only around Orascom.

According to a New Zealand sports web site:

The Koreans fell behind after two minutes to a freak own goal from a throw-in, but drew level through Kim Un Hyang with 13 minutes of regular time remaining.

Jang Hyon-Sun netted the winner in the second period of extra time, seven minutes away from a penalty shoot-out.

North Korea now boast both age-group women’s World Cup titles, having taken the under-20 version in Russia two years ago.

In film, the Daily NK reports that the popularity of South Korean films is giving way to American, Thai, and Chinese films:

In North Korea, the fervor of the South Korean Waves is on the wane; Korean dramas, which have spearheaded the spread of South Korean culture and progress since 2000, are no longer generating huge interest among North Korean citizens. The prevailing response of the citizens has been “I have seen enough” and “I have had my fill.”

A source form North Hamkyung Province said in a phone conversation with the Daily NK on the 2nd, “Nowadays, a Thai movie, “Ong-Bak (2003), Muay Thai Warrior,” is immensely popular among the younger generation. Chinese or American movies have become more popular than South Korean movies.”

The source added, “When South Korean dramas were first popular, adoration, curiosity, new storylines and exotic scenes generated a wave of interest, but people seemed to have had their fill.”

“Previously, Chinese people would bring back South Korean films when (North Korean) people requested DVDs, but now, and they mostly bring American or Chinese martial arts movies. According to smugglers working along the border, South Korean DVDs cannot be found in the homes of the Chinese.”

He evaluated thus, “More than anything, we like clarity and accuracy, but South Korean movies tend to be ambiguous. It frustrates me that they take and twist around words when the reality of the situation is clear.”

Gwon Myung Chul (pseudonym), who visited his relatives in China at the end of October, noted, “In Pyongyang, people can mostly acquire South Korean songs. With the rising popularity of South Korean songs, CDs containing these songs have come out, but they did not generate much interest.”

Gwon explained, “Recent Korean songs have not resonated with us emotionally and they have been difficult to understand. I don’t know what the people there (in the South) think, but rap or Pansori (traditional Korean narrative songs) are really difficult to listen to.”

He observed that “South Korean songs were better in the past” and listed off the Korean songs which he could sing, such as Noh Sa Yeon’s ‘Meeting’ and Kim Jong Hwan’s ‘For Love.’

Read the full article here:
South Korean Movies Not Popular Anymore in North Korea
Daily NK
Lee Sung Jin
11/4/2008

Until the late 1960s Das Capital, the selected works of Engels and books and publications related to the dialectical materialism and metaphysics were set on my father’s bookshelf.

However, in 1968 or 1969 the authorities took away every book claiming, “Let’s establish Juche.” Since 1970, there was no house where books related to Marx and Engels remained. The only books with regard to an ideology were the analects and selected writings of Kim Il Sung.

The generations that learned Marxism are those who took lectures in universities from 1950 to early 1960s. Since 1967, there have been no lectures on Marxism and no professors who used the publications of Marx.

Since 1970, theories of philosophy or even dialectical materialism have been fabricated as Kim Il Sung’s analects, and theses of Marx and Engels have been revealed as Kim Il Sung’s ones, placing at the forefront the words, “According to the Supreme Leader, Kim Il Sung.”

Finally, later Kim Jong Il even got rid of such things. He made people study only the Juche Ideology as he took away the dialectic. Even the issue on productive forces and their relation to the means of production in the Marxist theory were dealt with in the Juche Ideology. They didn’t teach cadres the dialectical materialism in the Communist College.

The Party omitted the line, “the Chosun Workers’ Party struggles to practice Marxism-Leninism,” replacing it with “the Kim Il Sung Ideology,” at the 6th Party Convention in October, 1980.

Read the full article here:
North Korean Intellectuals Oppressed and Watched
Daily NK
Kim Seo Yeol
10/22/2008

I believe these should be taken with buckets of salt, but here they are nonetheless.

Also on the menu are links to the following information:
North Korea Academic Resources
North Korea Blogs
North Korea Books
North Korea CRS Reports
North Korea Films

If you have anything to add to any of these resources, please let me know. 

ORIGINAL POST: Hyundai Asan (HA) was having a good year up through July 2008.  At that point, inter-Korean trade volume had experienced a 23% year-over-year  increase—reaching US$880 million.   Commercial trade comprised 94% of this volume, up from 78%, and the number of firms conducting inter-Korean trade reached 526, up from 324.

…and then a South Korean tourist was shot by North Korean soldiers at HA’s flagship project, the Kumgang tourist resort.  Shortly after the shooting, the South Korean government halted tourism to Kumgangsan until the DPRK agreed to launch a joint investigation into the shooting and guaranteed the safety of tourists—which never happened.  As a result, the newly constructed six-star “Kumgang Ananti Golf and Spa Resort” desigend by Korean- American architect Min Sung Jin, sits unused, and revenues at HA are likely to fall to as low as 220 billion won (US$165 million), from about 300 billion won last year (Yonhap).

Despite the troubles at Kumgangsan, the joint-Korean projects on the west coast (Kaesong Industrial Zone and Kaesong tourism) remained unaffected.  The Kaesong Industrial Zone, the most ambitious and risky project, has continued to receive support from both the North and South Korean governments, and the Kaesong tours have grossed the North Korean government nearly $10 million since the project was launched in December 2007. 

Since I operate on the assumption that people will never turn down free money, even communist governments, I have been skeptical that the DPRK would jeopardize these investments.  As of this week, however, it looks like my assumption is wrong.  It seems the DPRK remains intent to cut off its nose to spite its face.  On November 9, 2008:

A North Korean military team visited an inter-Korean industrial complex in Gaeseong, North Korea, last week to check personnel and facilities there.

Local experts speculated that the unprecedented survey is aimed at putting pressure on the South, whose civic groups continue to send propaganda fliers containing criticism of the North’s dictatorship.

Five military officials looked around the industrial park, Moon Moo-hong, chairman of the Kaesong Indutrial District Management Committee (KIDMAC), said.

“They made the rounds of 11 companies in the complex in the morning and asked about the amount of investment, capital, the number of workers, their salaries and working conditions,” he said.

The officials, in military uniforms, asked about how long it would take to empty the complex several times during the six-hour inspection, he added.

They did not show an amicable attitude either, saying they were not visiting to give out business cards and they had nothing to talk about.

A government official asking to remain anonymous said the visit can be read as a threat to drive out South Korean companies from the complex. (Korea Times)

Who was leading the military delegation? Lt. General Kim Yong Chol:

Kim is widely known as Pyongyang’s chief delegate to inter-Korean general-level talks in South Korea, but this time, he assumed the title of policy chief of the National Defense Committee, the most powerful organization in the North. While inspecting infrastructure and companies at the complex, he reportedly asked, “How long would it take for South Korean companies to pack up and go home?” (Donga Ilbo)

Economically, this is a terrible move:

The complex employs 35,000 North Korean workers who earn 55 dollars a month (63 dollars including social insurance), an amount considered extremely high by North Korean standards. Though the communist regime deducts a significant sum from their salaries, workers there are clearly healthier and better fed than their malnourished neighbors. If each of these workers is assumed to be part of a family of four, the complex feeds 140,000 North Koreans. (Donga Ilbo)

Yet yesterday, the implicit threat to close the border was made explicit:

[On] Wednesday, North Korea’s military threatened to “strictly restrict and cut off” all overland passage through the military demarcation line starting Dec. 1 in protest over Seoul’s “confrontational” policy. (Yonhap)

and

A Red Cross office in the North with the only civilian phone link will shut. (BBC)

Hyundai Asan Corp. said that it has yet to receive an official notice from North Korea on the suspension of its tour program to a historic city in the North, despite Pyongyang’s announcement to restrict border crossings. (Yonhap)

So what has made the DPRK so angry that its leaders are willing to take such drastic action?  Judging only from the public statments by the DPRK’s military spokesmen, it seems to be the proliferation of balloons and anti-Kim Jong il leaflets that human rights groups are sending across the DMZ.   

This seems bizarre because balloons have been crossing the DMZ for decades.  The North Korean villages along the DMZ know exactly how to deal with these leaflets and it is fairly routine for work groups to be organized to go pick them up.  Additionally, North Korea’s leaders are smart enough to know that the South Korean government has no legal authority to prevent its citizens from undertaking these activities.  So the DPRK’s ultimate goals here must be greater than stopping human rights groups from sending the balloons.

Ironically, it is the same human rights groups that are sending the balloons across the border who are most vocal about closing down the Kaesong Industrial Zone and ending the Kaesong tourism project. This is because they believe that the revenues generated by these projects are diverted to support the government with little going to the actual workers.  If the North Korean government ends these inter-Korean projects it will be delivering its most vocal opponents a double victory—the DPRK will end up with more balloons and less South Korean money.  If I was in the business of sending balloons across the DMZ, I would be sending out fundraising letters right now telling potential donors how effective my strategy is. 

Anyhow, if all of this was not strange enough, North Korea has slowed dismantling of the Yongbyon reactor (again), claiming the US owes it energy aid, and asserted that they never agreed to a nuclear verification deal which gives inspectors permission to collect samples and remove them from the country for analys.  Are they just trying to squeeze more concessions out of the Six-Party talks? Or is this a calculated political strategy?

The Chinese military has boosted troop numbers along the border with North Korea since September amid mounting concerns about the health of Kim Jong-il, the North Korean leader, according to US officials.

Beijing has declined to discuss contingency plans with Washington, but the US officials said the Peoples’ Liberation Army has stationed more soldiers on the border to prepare for any possible influx of refugees due to instability, or regime change, in North Korea.

One official cautioned that the increase in Chinese troops was not “dramatic”, but he said China was also constructing more fences and installations at key border outposts. Wang Baodong, the Chinese embassy spokesman in Washington, said he was unaware of any increased deployments.

Tourism: Reuters reports that the DPRK has closed Sinuiju to entering Chinese tourists:

North Korea is restricting visitors from its ally and giant neighbour China, travel agents said on Thursday, including virtually closing off one of its main border crossings at Dandong.

Travel agents in China, who send a steady though small flow of tourists to impoverished and isolated North Korea, said they were still organising visits, though trips had to be made via air rather than by rail.

“The border has been closed since October. If you want to go to North Korea, you have to go to Shenyang and fly from there to North Korea,” said one travel agent in Dandong, referring to a northeastern Chinese city.

A Chinese rail official in Dandong said freight trains were still able to cross over into North Korea.

“There are four trains a week to North Korea. One train just left for there, though I don’t know if there are any passengers on it. I think most of the trains are freight trains,” the official said by telephone.

China’s relations with North Korea have long been characterised as being “as close as lips and teeth” after they fought side-by-side during the 1950-53 Korean War.

Read the full articles here:
China increases troops on North Korea border
Financial Times 
Demetri Sevastopulo and and Song Jung-a

North Korea restricts travel for Chinese visitors
Reuters
Ben Blanchard
11/13/2008