Archive for July, 2008

Rajin SEZ electrified perimeter on Google Earth

Friday, July 25th, 2008

According to Lankov and Kim’s “North Korean Market Vendors: The Rise of Grassroots Capitalists in a Post-Stalinist Society” there is an electrified perimeter fence surrounding North Korea’s first  “special economic zone,” Rajin Songbon.

I have spent a lot of time looking at this area on Google Earth, but never seen the electrified fence.  Last night, however, I found it.  Before reading Lankov’s article, I thought it was a highway, or highway construction, on account of its approximate 35 mile/56 km length (as calculated using the Google Earth ruler).  The image of the perimeter (shown below) will be added, along with a few other new locations, to the next version of North Korea Uncovered (due in early August).


Click on image for larger version

And in case you missed it, Lankov’s article mentions North Korea’s largest market in Pyongsong.  Satellite imagery of this location is below.

Click on image for larger view



Russia-DPRK economic relations

Thursday, July 24th, 2008

From Dr. Leonid Petrov in the Asia Times:

Russia cooperation with North Korea
Since the early 2000s, overall relations between Russia and the DPRK have been improving. The DPRK’s importation of refined oil from Russia saw its first increase in 2002-2003 (from $20 million to $96 million) and was caused by the beginning of the US-DPRK nuclear confrontation and the subsequent demise of the international Korean Peninsula Energy Development Organization project that was to construct a light water reactor nuclear power plant in North Korea.

During 2004-2005, petroleum trade between Russia and North Korea grew from $105 million to $172.3 million. Until the six-party talks produced their first results, in the list of Russia’s exports to the DPRK, oil products dominated at 63%. Rampant corruption in both countries also let a trickle of Russian oil to be smuggled to North Korea unaccounted for.

In 2006, Russia was the DPRK’s third-largest trading partner after China and South Korea and absorbed 9% of the total $3.18 billion spent by the North on imports (approximately $286 million). The Kremlin’s approval of international sanctions against the former communist ally was accompanied by the curtailment of trade with the North. At the time of North Korea’s nuclear test in October 2006, Russia’s trade statistics showed that exports of petroleum had dropped 91.1% compared to the same period of the previous year.

The pragmatic mood in bilateral relations prevails, and these days Russia delivers oil and food to North Korea only in accordance with its obligations associated with progress at the six-party talks. This year, Russia has already delivered 100,000 tonnes of fuel oil to the DPRK in two batches and, according to Russian Deputy Foreign Minister Alexei Borodavkin, a top Russian envoy to the six-party talks, will deliver another 100,000 tonnes by October 2008. In June, the Russian government announced it would provide 2,860 tonnes of flour to the DPRK. According to an official KCNA news agency report, this food aid arrived at the border city of Sinuiju in the DPRK’s northern Pyongan province in early July.

Recently, for the first time in the post-Soviet era, North Korea saw a major Russian investment. In the city of Pyeongseong, the Russian auto plant KamAZ opened its first assembly line, specializing in the production of medium-size trucks named “Taebaeksan-96”. Although less than 50 trucks were assembled in 2007, this cooperation became an important milestone in the development of bilateral relations. While the project doesn’t violate United Nations sanctions on North Korea, it shows Moscow’s drive to expand its influence in the country. Ironically, the more trucks assembled the heavier North Korea’s dependence on imported fuel, engine oils and other petrochemical products.

The importance of the DPRK’s Rajin-Seonbong special economic zone to Russia’s national interests continues to grow. The state-run monopoly OAO Russian Railways is currently upgrading its railway connections with North Korea in Khasan-Tumangang, investing at least 1.75 billion roubles (US$72 million) into this project, and plans to participate in an ambitious plan to rebuild a trans-Korean railway. By connecting Rajin (and the rest of northern Korea) to its Trans-Siberian railroad, Russia hopes to benefit form the transit of South Korean and Japanese cargo which could be sent via its territory to Central Asian and European markets. Pyongyang seems to endorse these plans and other Russian initiatives, but does not commit any financial resources.

Eighty percent of overall bilateral economic trade between Russia and North Korea consists of cooperation, barter and investment-in-kind between the regional areas. The most active Russian regions trading with the DPRK are Eastern Siberia and the Far East. Maritime province (Primorsky Krai) itself exports to North Korea more than $4 million worth of refined oil per year. There are no oil fields in Maritime province and oil has to be borrowed through a chain of federal bureaucratic structures from the oil-rich areas of Eastern Siberia. Instead of money, the local governments agree to receive the labor of North Korean workers.

North Korean laborers in Siberia and the Far East were common under the Soviet system and they are still visibly present. In 2004, the Russian Federal Immigration Service issued 14,000 visas for foreign laborers, of whom North Koreans numbered 3,320 in 2005 and 5,000 in 2006. Since the DPRK has no other way to pay in goods or services, its government started paying for oil imported from Russia by dispatching thousands of laborers at zero cost. Following strong demand from local companies, just in 2006 regional authorities of Primorsky Krai agreed to issue an extra 5,000 working visas to North Koreans. This openness is contrary to local government policy that normally restricts the entry of labor from China.

DPRK citizens are sent to Russia to work as woodcutters and builders but some have also managed to find work in the agricultural and marine industry. Through the presence of these laborers, Russia has enjoyed a partial repayment of the DPRK’s post-Soviet debt through North Korean workers being contracted to work in mines and lumber mills in Russia’s Far East.

The wages they are able to make in Russia are far greater than what they would make at home. However, the foreign worker quota is set not by provincial governments but by Moscow, which often tries to put a stop to these programs due to the complexity of the matter. Part of this opposition stems from the fact that the North Korean workers in Russia still fall under DPRK laws and, therefore, are subject to intrusive supervision.

Among the most difficult but negotiable issues in the way of Russia-North Korea cooperation remains the problem of external debt. During the Soviet era, the DPRK incurred a debt of approximately $8 billion, which Pyongyang still owes to Moscow but cannot repay. This debt remains a stumbling block in most negotiations on new aid and development programs. However, this debt can potentially make trilateral Russian-Korean relations closer and stronger.

In January 1991, soon after the opening of diplomatic relations with South Korea, Moscow received $3 billion from Seoul in the form of a three-year loan. The collapse of the Soviet Union left this loan largely unpaid. The new Russian government in the 1990s provided South Korea with armaments worth $150 million to be counted as payment in kind for the remaining debt. In 2003, after bilateral negotiations on this issue were completed, part of this Russian debt was canceled and the remainder was rescheduled to be paid over the next 23 years.

Taking into account its own debts to the South, Russia could easily write off a significant portion of North Korean debt. To resolve this question, a certain agreement between all three parties is needed. To engage in a mutual and reciprocal round of debt cancelation, Russia might choose to see the North and the South as one country. Such an agreement would have unblocked the road for broader cooperation between Russia and the two Koreas, and simplified Russia’s energy cooperation with China and Japan.

The full article is worth reading here:
Russia is key to North Korea’s plight
Asia Times
Leonid Petrov


Inside Air Koryo’s new Tupolev

Wednesday, July 23rd, 2008

UPDATE: from Simon:

There’s no way that the suggestions [below] are the way that the passport popped up on screen, that isn’t how the application process works. Is it not more likely that they have a little scanner at the check-in desk and that’s how it popped up? Also when you run the magnetic strip of a passport though the passport control machines doesn’t this contain a picture of the passport that comes up on the screen? Anyway whichever way it is, it isn’t from a scanned copy of the passport being sent in advance, this isn’t how it works.

The new plane is indeed much better than the old ones, they show a movie (same one in both directions) currently it is Order-027 which has plenty of fights and is a reasonable film, nervous flyers like myself will probably not love the part where a helicopter explodes while the plane descends!

I read some report that said that the plane was bought reasonably cheaply due to poor sales of the model, also Air Koryo is a company run for profit after all (even if it doesn’t make any, subsidising airlines would hardly be unique to NK, who pays for any new planes for major airlines then?), so those funds would have been what paid for it most likely.

BTW the food on the Beijing – Pyongyang leg of the flight is still the same but they have reverted back to the ‘Koryo Burger’ that was much loved/hated previously, this time though the bun is vastly enlarged meaning that you have to bite through about 2 inches of bread on either side of the burger to get to it, as before, about 50% of passengers didn’t bother with it (burger at 9AM is a bit early for some)

ORIGINAL POST: A recent visitor to North Korea (Stephan) posted a set of photos on  Normally I am not impressed with North Korea tourist photos, but in this case, I was pleased because they are the first I have seen of the inside of Air Koryo’s new Tupolev.

Click on image to see larger version at flickr.

Veterans of Air Koryo’s older planes are familiar with the on-board speaker announcement welcoming visitors to the Juche paradise led by the Great Leader, Kim Jong Il.  Now travelers can expect a professional video!

The food looks the same.

In true communist fashion, there is still a business class section.

And for the intelligence coup…below is a photo of North Korea’s (new?) passport control system.  It appears to be Windows-based.  It also appears that there is a database and ethernet (?) connection between the North Korean embassy in Beijing, the Foreign Ministry in Pyongyang, and Sunan Airport.  I draw this conclusion because it seems like the passport control officer in the photo is looking at a digital scan of the passport ID page.  This means the image was probably captured when the visa was issued in Beijing and it was sent to a central database to be pulled up when it the passport is scanned.  Anyone have a better idea?

UPDATE: according to the photographer, he delivered a scan of his passport to KITC (Korea International Travel Company) in Beijing.  KITC probably sent the image via email to the DPRK embassy.  So what kind of wire network connects the DPRK embassy in Beijing with the Foreign Ministry/Sunan Airport back home?  I would like to think there is a dedicated/encrypted line, or satellite feed (rented from China), but I would not be surprised if the DPRK embassy just emails the images to someone back in Pyongyang who puts them on an internal network.

Click on image for larger version

(hat tip to benms)


Lankov and Kim on North Korean market vendors

Wednesday, July 23rd, 2008

“North Korean Market Vendors: The Rise of Grassroots Capitalists in a Post-Stalinist Society”
Andrei Lankov and Kim Seok-hyang
Pacific Affairs, Vol. 81 Iss.1 
(subscription required)

The article deals with the social changes that have taken place in North Korea [from 1994-2002], when the collapse of the centrally planned economy led to the growth of private commercial activity.  This activity remains technically illegal, but the relevant bans and restrictions have rarely been enforced due to endemic corruption and disorganization of the state bureaucracy.  The article is largely based on in-depth interviews with North Korean black market operators [who have defected to South Korea].  It traces their origins, the type and scale of their business, and changes in their mode of operation.

The article demonstrates that the “second economy” came to dominate North Korean economic life by the late 1990s, since authorities’ attempts to limit its scale were largely ineffective.  The growth of the “second economy” produced new grassroots capitalists who sometimes came from underpriveledged social groups, but more typically represented people with good official connections.  It is also remarkable that foreign connections (usually with China) played a major role: to a large extent, merchandise sold at the North Korean markets either came from overseas or was exported overseas eventually, and in many cases the merchants’ initial capital was also provided by relatives residing overseas.

Some highlights:
1. Changsa is the North Korean word for “dealings in the marketplace.” Tonju is the word for money changers/lenders meaning “master of money”. 
2. Public Distribution System (PDS) rations were cut for the first time in 1973.
3. The DPRK system restricted market activity primarily through three mechanisms: limited size of family farming plots, inminban surveillance system, and travel permits.
4. Before the arduous march, North Koreans were not inclined to resort to market trade.  These transactions were seen as ethically suspect.  Once the famine hit, people took up market trading remarkably quickly.
5. Before the arduous march, bribery was rare, even though patronage and indirect forms of corruption were rampant.  Mid-level bureaucrats had to vie for preferred access to poor-quality consumer goods, better schools, and study trips abroad.
6. At the height of the arduous march (1997), production was at 46% of capacity.
7.  North Korean traders seldom if ever have to deal with the protection racket.  When asked directly, respondents did not mention threats from mobsters as one of their security concerns (I wonder if this is still the case).
8. Pyongsong market is reputed to be the largest in the country.  It is just outside Pyongyang, making it accessible to citizens inside the capital as well as those who cannot get permits to enter the city (Pictured below with Google Earth coordinates).


Click on image for larger view

9. Financial services such as money-changers and private loan sharks offer loans at 5%-30%/month.
10. Most North Korean merchants know South Korea is a rich country.  They also avoid surveillance since these activities are done at state-owned enterprises and study sessions.


DPRK Cabinet adopts ‘Border region management provision’

Tuesday, July 22nd, 2008

Institute for Far East Studies (IFES)
NK Brief No. 08-7-22-1

On July 18, the North Korean Cabinet publication, “Democratic Choson’, revealed that the cabinet had recently adopted the ‘Border Bridge Trade Complex Management Activities Provision’.

According to the newspaper, the provision spells out to whom the rules and regulations must be applied regarding the orders and management activities of the border bridge trade complex. In addition, “by being adopted, the provision firmly creates regulations on foreign economic activities that cross over border bridges and has prepared the legal support for unceasing improvements of the border bridge trade complex’s management activities.”

North Korea relies on border trade with Chinese areas such as the city of Dandong, in Liaoning Province, and the Yanbian Korean Autonomous Prefecture, as cross-border trade shot up to over 200 million USD last year.


Tom and Jerry

Tuesday, July 22nd, 2008


I am told that in the 1980s Tom and Jerry was a poplar show on DPRK and USSR state television.  In the DPRK they even kept the names Tom and Jerry.


Mongolia to hire North Korean workers

Tuesday, July 22nd, 2008

From Daily Business News Mongolia:

At the submission of the Government of Mongolia, the Parliament ratified Mongolia-North Korea Inter-governmental Agreement on exchanging work forces on the 20th of July, 2007. According to the Agreement, Ministry of Social Welfare and Labor of Mongolia is to negotiate in the near future with Foreign Trade Ministry on realizing the agreement and exchange of work force, especially number and need of work force, the minimum wage /by USD/, labor conditions /normal and abnormal/, social welfare /social insurance/ and therefore those interested in employing North Korean wok force in 2009 should formulate their TORs accurately as well as submit them to the MSWL within 23 July. Currently orders should be submitted on the basis of position vacancy since number of workers is not specified yet.

Read more here.


DPRK competes in International Mathematical Olympics

Monday, July 21st, 2008

UPDATE: I know all of you were wondering how the DPRK fared in the 2008 International Mathematical Olympics!  It is certainly the most under-reported story of the year!

North Korea improved over last year’s performance to capture 7th placeThe team’s individual results can be found hereUn Song Ri led his team to victory scoring a 97.94% and capturing 12th place individually.

Scoring ahead of the DPRK: China (PRC), Russia, USA, Republic of Korea, Iran, Thailand. 

ORIGINAL POST: I was perusing the Korean Friendship Association web site this morning, and noticed this post:

Author: Alejandro Cao De Benos
Subject: International Mathematic Olympics

A Delegation of 6 DPRK students (16 to 19 y.o.) and 2 professors from KIM IL SUNG University and Pyongyang Middle School Number 1, are now in Madrid to participate in the International Mathematic Olympics.

On 15th will be the opening ceremony, 16th and 17th the exams. 21st will be the closing ceremony. (100 countries participate)

After the exams, they are invited by the organizing Committee to tour Madrid city center, Aranjuez, Toledo, Salamanca and enjoy typical Flamenco dance.

I just said goodbye to them after sharing 5 days in the capital. They are studying day and night, eager to get the best marks in the competition.

Ri dongji, best of success for all the team!!

This competition originates in the former USSR and Warsaw Pact countries.  Some quick background info can be found on the competition’s Wikipedia site and official site.

Here are the annual results (grouped by country) since the competition started in 1959.  Of all these years, the DPRK (PRK) only competed in 2007-Hanoi (8th place – see team results here), 1992-Moscow (16th place – team results here), 1991-Sweden (Disqualified – the only team ever disqualified.  Not sure why—anyone out there know?), and 1990-Beijing (19th place – team results here).  Here are the results for all the individuals who have competed on the DPRK team.

Here is where the 2008 team’s results will be posted.  The web page gives a contact name (Ham Yong Chol) and email address.  Some enterprising journalist out there should try to get a story.  


(UPDATE) China asks some North Koreans to leave ahead of Olympics

Monday, July 21st, 2008

UPDATE 2: According to the Associated Press:

[A South Korean] NIS official, who asked not be named, citing an internal policy, told The Associated Press that China had no plans to close all bridge links with North Korea “out of concerns of diplomatic friction with North Korea.”

The official also said China would not ask all North Koreans in China to leave, saying that Beijing plans to crackdown on North Koreans who illegally stay in China and Beijing plans to restrict renewing visas for North Koreans. 

UPDATE 1:  According to the Associated Press, China plans to close all the bridges to the DPRK during the Olympics, starting next month.  This will have a devastating impact on trade with Sinuiju, Manpo, Hyesan, Hoeryong, and many other trading hubs along the Chinese border.

ORIGINAL POST: According to an interesting article in Bloomberg (thanks to reader) China is acting to reduce the chances that North Korea issues will interfere with coverage of the Olympic games in Beijing this summer.

According to the article:

China asked some North Korean work units to leave the country or move their business operations during the Olympic Games, according to documentation from the North Korean embassy obtained by Bloomberg News.

Citing security issues, China asked North Koreans, except trade representatives and government-dispatched personnel, to leave by July 31 and not return until the end of September, the Korean-language statement said. The embassy in Beijing gave the order to North Koreans in a July 11 directive, according to a copy of the document obtained by Bloomberg News.

The order took effect from July 13 and those who delay departure would be fined or not allowed to reenter China, according to the document. Workers scheduled for dispatch to China from July 1 should delay their departure until Sept. 25, it said.


It isn’t clear how authoritative the directive is. Five North Korean businessmen contacted by Bloomberg news provided different departure dates, or said they were not affected by the directive. The people refused to be identified in print, citing possible recriminations.

A press attaché at the Chinese embassy in Tokyo who declined to give his name said he wasn’t aware of the directive and that there would be no way to confirm its existence.

Read the articles here:
China asks some North Koreans to leave ahead of Olympics
Hideko Takayama

Report: China to shut down all bridges linked to NKorea during Olympics
Associated Press

China to step up inspections at border with North Korea during Olympics to stop migrants
Associated Press
Kwang-Tae Kim


(UPDATED) South Korean tourist fatally shot at Kumgang

Monday, July 21st, 2008

UPDATE 13-August 28:   Yoon Man-jun stepped down as CEO of Hyundai Asan over the July 11 killing of the 53-year-old South Korean woman by a North Korean soldier at the North’s Diamond Mountain resort, the company said in a statement. The company quoted Yoon as saying that he wanted to take “moral responsibility” for the death. (ETN news)

UPDATE 12-August 8: Despite bringing a halt to tourism in Kumgangsan, South Korea sent arrears to the DPRK.  From the Choson Ilbo:

Despite stalemate over the shooting death of a South Korean tourist at North Korea’s Mt. Kumgang, tour operator Hyundai Asan made its July payment for tours to North Korea.

Asan said Thursday it paid US$675,250 to North Korea to cover costs accrued by 10,380 South Korean tourists who visited the mountain resort on July 1-11, until the tours halted after a South Korean tourist was shot and killed by a North Korean soldier at Mt. Kumgang.

Update 11-August 8: DPRK to expel all remaining ROKs from Kumgnag starting August 10.   

UPDATE 10-Auguts 4: KCNA issues statement. 

UPATE 9-August 3: Though no date was given, North Korea intends to expell most remaining South Koreans from Kumgang (Yonhap):

North Korea’s official media said earlier in the day that Pyongyang will expel all “unnecessary” South Korean personnel from the Mount Geumgang resort, where a South Korean tourist was shot dead by a North Korean soldier last month.

More than 260 South Korean workers are stationed at the scenic resort, according to Hyundai Asan, the South Korean tour organizer. 

UPDATE 8-July 26: North Korea succeeds in preventing shooting concerns from being mentioned in official summary of ASEAN meeting.

UPDATE 7- July 23: South Korean government prevents South Korean civic groups from visiting DPRK until the North’s government agrees to participate in shoting investigation. (Donga Ilbo) 

As of Tuesday, six organizations had been offered invitations to visit the DPRK (Donga Ilbo):

One hundred members of the Korean Teachers and Educational Workers’ Union applied for permits to visit North Korea during August. In addition, 120 South Gyeongsang Province officials including Governor Kim Tae-ho are reportedly planning to visit the regime.

Humanitarian organizations such as Good Neighbors International, Nanum International and the Korean Sharing Movement will reportedly send 40-150 delegates to the North in August (for the former two) and September. In addition, North Korean officials invited around 120 members of Peace Three Thousand, and the representatives of the two will meet in Gaesong on Saturday to discuss the invitation.

These organizations [would] stay two to four days in North Korea and [] attend joint meetings with the North Korean Teachers’ Union, visit North Korean industrial facilities, tour Mount Baekdu, and attend an Arirang performance – a play propagandizing the regime.

UPDATE 6- July 21: Suspension of the Kumgang Tours will cost the DPRK $20 million per year.  If South Korea suspends the Kaesong tours (to the city, not the industrial zone) it will cost the DPRK government $15 million. (Choson Ilbo)

Maybe these numbers are sinking in. According to the Donga Ilbo:

North Korean officials recently followed one after another in expressing their perplexity regarding the incident, and fell over themselves to invite a horde of South Korean civic groups in August. These recent moves by the North have led some to believe that the North Korean authorities have somehow changed its stance towards the South.

An American source who recently met with North Korean officials in China and a working-level official at a South Korean civic group also said, “North Korean authorities told us that the shooter was a ‘very young’ person.”

The source added, “North Korean authorities told us that the incident equally took them aback. They added that especially at a time when the South Korean authorities are anxious to give them 50,000 tons of corn, those who thought the incident was intentional simply do not know anything about their regime.”

Unification Ministry spokesman Kim Ho-nyun also confirmed the Dong-A Ilbo’s report that North Korea invited a large group of South Korean visitors to Mount Baekdu and Pyongyang.

The Choson Ilbo remains skeptical

UPDATE 5 – July 17: The North’s story has changedDPRK rejects South’s inspectors. Seventy percent of officials of the United Front Department who were in charge of foreign affairs with South Korea were expelled from their positions early this year. It seemed to be an initiative step for taming the Lee administration and controlling the South’s policy (Daily NK).

UPDATE 4 – July 15: South Korea ups the ante by threatening to suspend tours of Kaesong unless the DPRK participates in the Kumgang shooting investigation (Bloomberg). 

NKeconWatch analysis: Suspending tours to Kumgang is relatively expensive for both North and South.  Hyundai and the South Korean government spent a lot of money developing the facilities, and by this time, the North Koreans who were earning from the project have grown accustomed to the cash flow.  The tours of Kaesong are different, however.  The South invested relatively little capital in the Kaesong tours, so suspending them idles few of their resources but hits the pocketbooks of the North Koreans who sponsor the program.  Could the Kaesong Industrial Zone be turned into a bargaining chip? 

UPDATE 3 – July 14: South Korea officially casts doubt on North Korea’s portrayal of events leading up to the shooting based on CCTV video and an eyewitness account. (Choson Ilbo) 

UPDATE 2: This story in the Korea Times (h/t ROK Drop) seems to indicate that there was a witness to the shooting and that there were no substantial barriers or warnings that vacationers could wander into a restricted military zone.   

UPDATE 1: The North Koreans expressed regret for the shooting, but says the responsibility lies entirely with Seoul.  They also refuse to cooperate with the South Korean government in an investigation of the incident citing that they have already sorted things out with Hyundai Asan. Although South Korea’s President Lee Myung-Bak ignored the situation in a parliamentary speech he gave shortly after the shooting, the Unification Ministry has now publicly stated that the shooting was “wrong by any measure, unimaginable, and should not have occurred at all.” 

ORIGINAL POST:Tourism numbers at the Kumgnag resort were up this year, despite high political tensions. 

From the AP:

A North Korean soldier fatally shot a South Korean tourist Friday at a mountain resort in the communist North, prompting the South to suspend the high-profile tour program just as South Korean’s new president sought to rekindle strained ties between the divided countries.

The news of the unprecedented shooting of a 53-year-old woman at Diamond Mountain resort emerged just hours after new President Lee Myung-bak delivered a nationwide address calling for restored contacts between the two Koreas, which have been on hold since he took office in February.

Kim said South Korea would suspend future Diamond Mountain tours until it completes an investigation. The other some 1,200 tourists already at the resort are to complete their tours as scheduled by as late as Sunday, said Hyundai Asan, the South Korean company that operates the resort.

Links to full stories below the fold: