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Archive for June, 2010

Kim Jong-il visits Sinuiju, successor Kim Jong-eun takes up on-site guidance

Thursday, June 24th, 2010

Institute for Far Eastern Studies (IFES)
NK Brief No. 10-6-23-2
6/23/2010

Kim Jong Il visited Sinuiju on June 17, spending three days inspecting industrial facilities with third son and possible successor Kim Jong Eun. One visit was to a shoe factory, at which Kim Jong Il observed modernized technology and production equipment. On another stop, at the Sinuiju Cosmetics Factory, Kim Jong Il met with the factory manager and foremen, providing them and the laborers with encouragement. Kim Jong Eun also made an appearance at the meeting, indicating that the effort to install him as the next North Korean leader has progressed to the point at which he is being directly introduced to the people.

According to a Daily NK report quoting a source in Sinuiju, Kim Jong Il’s automobile procession to Sinuiju was “impressive”, and was “about twice as large” as previous processions. The report also noted that Kim Jong Eun exited a care and met directly with workers at the cosmetics factor and at Rakwon Machine Complex, and that “Kim Jong Eun took most of the responsibility for [Kim Jong Il’s] protection entourage and for the on-site guidance.”

That on-site guidance parties have grown considerably larger than in other years is partly due to the fact that Kim Jong Eun is accompanying his father, but also because many more other officials are also traveling with Kim Jong Il. On-site guidance has transformed from that of giving business advice to actively promoting succession by Kim Jong Eun. According to one source, Kim Jong Eun took the lead on everything from succession issues to on-site guidance during this latest visit. In addition, central authorities were said to have encouraged business and city officials to follow Kim Jong Eun.

Last December, documents for indoctrinating cadres were distributed by Party officials. The propaganda praised Kim Jong Eun, calling him ‘the number-one guard of [Kim Jong Il], stepping first to the General’s on-site guidance visits to every site without regard to any conditions; in all weather, any temperature or wind and any landscape.’ In the documents, Kim Jong Il is quoted as saying, “The Captain has been assisting me with lots of my work,’ noting that Kim Jong Eun is taking part not only in his father’s security, but also in on-site guidance.

Kim Jong Eun’s actions during the latest visit to Sinuiju show that he has gained enough power in the protection bureau to be directing the bodyguard contingent assigned to his father, and his influence and authority is evident through his on-site guidance. Kim Jong Il’s visit to Sinuiju, which serves as a gateway for trade with China, could be part of preparations for large-scale economic cooperation with the PRC. Last December, Kim Jong Il visited Rason City, the site of the country’s first free trade zone, and declared Rason a ‘Special City’ in an effort to attract foreign investment from Beijing and abroad. Sinuiju and Rason will serve as conduits for economic cooperation and trade with China.

Posted in Institute for Far Eastern Studies, Political economy | Comments Closed

South Korea mulls covering inter-Korean trade losses

Thursday, June 24th, 2010

According to Yonhap:

South Korea is considering providing about 100 billion won (US$84 million) of rescue funds to hundreds of its companies hamstrung by a ban on cross-border trade with North Korea, a senior government official said Wednesday.

The ban has been in effect since a month ago after South Korea concluded from a multinational investigation that North Korea was to blame for the deadly March 26 sinking of its Cheonan warship.

Read the full story here:
S. Korea mulling huge rescue funds for troubled inter-Korean trade firms
Yonhap
Sam Kim
6/23/2010

Posted in International trade, South Korea | Comments Closed

What happened to Naenara and .kp?

Wednesday, June 23rd, 2010

Is anyone else out there having trouble accessing the Naenara site (aside from those of you in South Korea)?

The North Korean web service, Naenara (Wikipedia page here, though not much info), used to be posted on two domains: Kcckp.net and Naenara.kp. It looks like these sites are down—as well as their foreign language services: /en (English), /fr (French), /ja (Japanese), /ru (Russian), /ko (Korean), /ch (Chinese).

In addition, the Korea Education Fund site is also down (http://www.koredufund.org.kp/). I picked up one of their brochures last time I visited the DPRK and posted it here.

..and the Committee for Cultural Relations with Foreign Countries (CCRFC or Taemun) web page is also down: http://www.friend.com.kp/

A quick search of the .kp domain (The DPRK’s country level domain assigned by ICANN) reveals only three other functional web pages:

1. The domain registry lookup site: http://kcce.kp/

2. KPNIC domain registration guidelines (which are well worth reading): http://www.kcce.kp/en_Guideline.php

3. And this document:

조선민주주의인민공화국 망령역이름
변경신청서

1. 변경신청목적
2. 변경신청기관명
3. 변경신청기관주소

변경신청내용
1. 등록된 망령역이름
2. 변경하는 망령역이름
3. 신청자
이름
직장,직위
전화번호
전자우편주소
주소
3. 변경신청기관의 영문표기
4. 변경신청기관의 영문략자표기

Posted in Chongryun, Communications, Internet | 3 Comments »

Mansudae Overseas Development Group Projects

Wednesday, June 23rd, 2010

According to the Daily NK:

North Korea has earned more than $160 million in the last ten years thanks to the construction of sculptures and other edifices in countries across Africa.

A Daily NK source in China revealed on the 18th, “Since 2000, North Korea has been earning colossal quantities of dollars through contracts for the Mansudae Overseas Project Group of Companies under the Mansudae Art Institute to construct sculptures.”

Mansudae Art Institute is an organization primarily dedicated to the idolization of Kim Il Sung and Kim Jong Il through public works, one whose construction of edifices such as the Juche Tower and Arch of Triumph in Pyongyang has added to the status of the country.

It has also been building revolutionary monuments in African countries such as Ethiopia since the 1970s in order to maintain cordial relations with socialist states, but in the early 2000s started doing work in African countries to earn foreign currency as well.

According to the source, North Korea has earned $66.03 million from Namibia alone thanks to the construction of the Presidential Palace ($49 million); the Cemetery of National Heroes ($5.23 million); a military museum ($1.8 million); and Independence Hall ($10 million).

It has also earned almost $55 million from Angola via the António Agostinho Neto culture center ($40 million); Cabinda Park ($13 million); and the Peace Monument ($1.5 million).

Additionally, the North has constructed a basketball stadium ($14.4 million) and an athlete academic center ($4.8 million) in the Congo, earning almost $20 million dollars in total.

Thanks to the Monument to the African Renaissance in Senegal, the North has made another $12 million dollars.

There are around 19.8㎢ set aside for a vacation spot for the president of Equatorial Guinea, which is supposed to earn Mansudae around $800,000, not to mention a government office building ($1.5 million), Luba Stadium ($6.74 million) and conference halls ($3.5 million).

The source also reported, “The money earned from these construction projects is managed by the No. 39 Department. Some of these dollars are used for domestic governance, while the rest go to secret accounts in Switzerland or Macau to become Kim Jong Il’s secret funds.”

Here are the images from the story including a table of financial data (which I would take with a grain of salt):

Additional Information:

1. I blogged here about the Derg Monument in Ethiopia.

2. I have located some of the Mansudae Overseas projects mentioned in this story (as well as numerous other places not menioned in this story: Egypt and Syria, Zimbabwe, DR Congo). However, here are GeoEye satellite images of some of the Namibia and Angola projects mentioned above courtesy of Google Earth:

Namibia National Heroes Acre (22°39’46.02″S, 17° 4’41.06″E):

Namibia State House (22°35’28.83″S, 17° 6’2.76″E)

Cultural Center of António Agostinho Neto (Mausoleum) (8°49’24.73″S, 13°13’8.52″E)

Posted in Bureau 39, Construction, Finance, Google Earth, Mansudae creative Company (art studio), Mansudae Overseas Development Group, Namibia, Uncategorized | Comments Closed

Room (Bureau) 38 allegedly restored

Wednesday, June 23rd, 2010

According ot the Choson Ilbo:

North Korea in March restored a special department in the Workers Party codenamed Room 38 which manages leader Kim Jong-il’s coffers and personal slush funds, it emerged Monday. The North last fall merged Room 38 with Room 39, which manages party slush funds.

“Rooms 38 and 39 were merged to simplify Kim Jong-il’s slush funds,” said a North Korean source. “But when it became difficult to secure hard currency due to international sanctions, Room 38 seems to have been restored because there was a feeling that Room 39 alone can’t meet the need.”

Room 38 is reportedly led by Kim Tong-il, who heads three regional departments in charge of earning hard currency.

Room 39 tries to maximize earnings from gold and zinc mining and farming and fisheries. It also manages stores and hotels exclusively for foreigners in Pyongyang. Room 39 seems to have suffered badly due to the recent suspension of inter-Korean trade. “Taesong Bank and Zokwang Trading, which received remittances from Mt. Kumgang tourism, are both controlled by Room 39, and is also in charge of the exports of agricultural and fisheries products,” said a government source.

Kim Jong-il needs dollars to maintain the party elite’s loyalty to him and his heir presumptive. He is said to have told party bigwigs in February, “From now on I will judge your loyalty based on the amount you contribute to the fund.” His son Jong-un is also said to be amassing separate slush funds for his own use.

But international sanctions on exports of weapons, counterfeit dollars, fake cigarettes and drugs remain in place, and the United States is pushing ahead with additional financial sanctions over the North’s sinking of the South Korean Navy corvette Cheonan in March. Pyongyang was dealt a heavy blow in 2005 when the U.S. froze US$25 million in the Banco Delta Asia in Macao which was apparently for Kim’s personal use.

Kim earlier this year appointed his high school friend Jon Il-chun head of Room 39. Jon was also named chairman of the National Development Bank, established early this year with a view to conducting normal international financial transactions to induce foreign investment. “North Korea seems to be planning to divert part of foreign investment to Kim’s slush fund,” said a government official.

NK Leadership Watch has more.

Read the full story here:
Kim Jong-il Restores Special Department to Swell Coffers
Choson Ilbo
6/24/2010

Posted in Agriculture, Banking, Bureau 38, Bureau 39, Counterfeiting, Drug smuggling, Finance, Finance and Accounting Department, Fiscal & monetary policy, Gold, Illicit activities, Mining/Minerals, State Development Bank | Comments Closed

DPRK promotes environemntal efforts

Wednesday, June 23rd, 2010

According to Reuters:

There are no private cars in North Korea and countless factory chimneys have not belched smoke in years, but state media said on Tuesday scientists were inventing new ways to cut air pollution and protect the environment.

The country “has directed a great effort” to research environmental protection, the state news agency KCNA reported.

“Researchers have developed a new material for removing exhaust fumes from automobiles so as to cut the greenhouse gas emissions and reduce air pollution 35-40 percent,” it said, without elaborating.

It also said “units” in the capital, Pyongyang, that caused pollution had been registered, suggesting that dirty industries were under pressure to get clean.

“They are now developing a gas and dust arrester necessary in production processes and new materials needed to secure environmental safety of products,” it said.

The isolated communist country’s state-run media periodically boasts revolutionary innovations in science and technology, despite a moribund economy and chronic food shortages.

Perhaps the most visible in recent years have been related to the relatively well-funded — and well-fed — military. North Korea has conducted two nuclear tests since 2006 and several missile launches, upsetting its neighbours.

North Korean scientists also invented a device using “locally available materials” to incinerate hospital waste, KCNA said, and the Environmental Protection Institute of the Ministry of Land and Environmental Conservation had intensified research into pollution-free vegetable production.

Here is the original KCNA story:

Scientific Achievements of Environmental Protection

Pyongyang, June 22 (KCNA) — The Democratic People’s Republic of Korea has directed a great effort to scientific researches for environmental protection.

Researchers have developed a new material for removing exhaust fumes from automobiles so as to cut the greenhouse gas emissions and reduce air pollution 35-40 percent.

They have also put the environmental management of industrial establishments on IT basis.

Meanwhile, they have registered units causing environmental pollution in Pyongyang and confirmed methods and procedures for preventing pollution. They are now developing a gas and dust arrester necessary in production processes and new materials needed to secure environmental safety of products.

Besides, they have invented a new device to destroy by fire such wastes from hospitals as contaminated injector and bandage with locally available materials.

Scientists of the Environmental Protection Institute of the Ministry of Land and Environmental Conservation have intensified a research in pollution-free vegetable production.

Read the full Reuters story here:
N.Korea says puts “great effort” into environment
Reuters
6/22/2010

Posted in Automobiles, Environmental protection, Environmental Protection Institute, Health care, Manufacturing, Ministry of Land and Environment Conservation, Transportation | Comments Closed

Japanese Firms Suspected of Selling North Korea Possible Missile Parts

Wednesday, June 23rd, 2010

According to Kyodo (via Breitbart):

Police are set to arrest two company presidents Tuesday on suspicion of illegally exporting to North Korea machines which can be used in the development of weapons of mass destruction, investigative sources said.

Fukuoka and Kumamoto police have decided to arrest the two in the Kyushu region, southwestern Japan, for the alleged violation of the foreign trade control law as the machines in question include a power shovel, which falls under Japan’s “catch-all control” regulation requiring export license, the sources said.

The Japanese government decided in May to strengthen coordination between its ministries to rein in surreptitious exports to North Korea in the wake of the sinking of a South Korean warship that Seoul has blamed on Pyongyang.

A power shovel is designated among items subject to the export control regulation as it could be converted into delivery means and launch pads for ballistic missiles such as Rodong and Taepodong missiles.

Earlier this month, a trader and his wife in Shimonoseki, Yamaguchi Prefecture, were arrested on suspicion of violating the foreign trade control law by illegally exporting cosmetics to North Korea despite a ban on the export of “luxury” items to the country.

Read the full article here:
2 firm heads to be arrested for alleged illegal exporting to N. Korea
Kyodo (via Breitbart)
6/22/2010

Posted in International trade, Japan, Military | Comments Closed

Market stuff

Monday, June 21st, 2010

The North Korean government’s attempt to regulate and close wholesale markets has been well documented. Reports at the time had indicated inconsistent levels of success. If recent reports are true, however, market participants might have won a temporary reprive from Pyongyang’s edicts. But the North Korean government might have successfully closed one market in the town of Nyongwon(녕원: 39.8288444°N, 126.5459556°E), or at least forced it to temporarily relocate, by flooding it.

The problem seems to have been caused by the water level maintained by the Taedong River Dam in Tokchon (덕천). Maybe the level of water in 2007 was unusually high. There do appear to be several other facilities that are flooded. However, we do not have enough satellite imagery to determine what happened.

On a more positive note, we do have satellite imagery of the formalization of the Sinsang Market (신상: 39.6518138°N, 127.4163115°E).

The latter image above was taken on Christmas Eve 2007.

Pyongyang’s Hyongjiesan Market (형제산구역: 39.0539763°N, 125.7224°E) seems to have sprung up in one place but was temporarily relocated to a more formal facility before moving back to its original location. I do not know how to explain these moves.

Pyongyang’s Sadong Market (39.0035985°N, 125.824281°E):

Here is a clandestine video of the Sadong Market (Filmed in January 2009).

And what does the North Korean government think of these markets? They are not happy with them. This BBC video clip does not offer much new information about the DPRK but it does deliver at least one official willing to be interviewed on the DPRK’s economic policies (at the 11:50 mark).

Posted in Uncategorized | Comments Closed

DPRK earns $10m at 2010 World Cup

Monday, June 21st, 2010

According to the Choson Ilbo:

North Korea will receive at least US$10 million from FIFA for fielding its national team in the World Cup. The figure amounts to three month’s wages for the over 43,000 North Koreans working in the joint Kaesong Industrial Complex.

FIFA gives the 32 teams playing in the World Cup $1 million each for preparation costs. After playing three matches in the first round, each team is given an additional $8 million no matter if it advances to the next round or not. From this year, every club that has a player in the World Cup receives $1,600 per day, per player. The paid period begins two weeks before the opening of the tournament and ends a day after the final match of each contending team.

For North Korea, the period lasts until this Saturday as it plays its final first-round match against Cote d’Ivoire on Friday. Less the three players who play for foreign football clubs — Jong Tae-se, An Yong-hak and Hong Yong-jo — the North will be given a combined $960,000 for the remaining 20 players on its team. Mostly soldiers, they are affiliated with six domestic clubs. FIFA’s payment is made to each club, but as the North’s are all state-run clubs, Pyongyang has secured at least $9.96 million so far.

If North Korea makes it into the qualifying round it will be awarded an additional $9 million. The teams playing in the quarter-final receive $14 million each and those in the semi-final $18 million each, while the winner takes home $30 million.

With its national team playing in this year’s World Cup, North Korea has also signed a $4.9 million deal under which Italy-based sports apparel maker LEGEA will provide the North with jerseys and training gear for four years.

Read the full article here:
N.Korea to Earn $10 Million for World Cup
Choson Ilbo
6/21/2010

Posted in Finance, Fiscal & monetary policy, Football (soccer), International trade, Sports | 3 Comments »

More reports of easing market regulations

Friday, June 18th, 2010

According to the Washington Post:

Because North Korea operates in secrecy and isolation, outside observers rely on informants and accounts from defectors. In this case, experts agree that the food shortage is dire. Several analysts who monitor and travel to North Korea agree that in recent weeks, Pyongyang has abandoned almost all rules about who can spend money and when. That would seem to indicate that Kim — who once equated free-market trading with “egotism” and a collapse of social order — now wants to rehabilitate markets that were damaged months earlier.

As of May 26, the government no longer forces markets to close at 6 or 7 p.m., has dropped the rule restricting customers to women older than 40 and has lifted a ban on certain goods being sold. One city official in the city of Pyungsung informed the Good Friends humanitarian group that the living standard had “drastically decreased since the currency exchange, and the government cannot provide distribution so they have to bring the market back up.”

Read the full article here.

IFES has also reported this move.

It should be noted that both of these reports cite this Good Friends report:

Blanket Permission to Open Markets “Everyone can do business”
Authorization of public market is included at the core of the 5.26 Party directives. The North Korean authorities decided to allow everyone to have access to markets and overturned their original plan to close down the general market and exercise strong control over market. They announced that there will be no time restrictions, product control or age limitation. In reality, they allowed Democratic Women’s Union’s weekly prohibition from market operation during official work so people can work at market regardless of Democratic Women’s Union hours. Their only condition was to participate in labor mobilization. Pyungsung City, which suffered the most since last year’s decision to prohibit general market, is now allowed to open business and cancel other market regulations. A city official described the background on allowing of the market, “The living standard drastically decreased since the currency exchange and the government cannot provide distribution so they have to bring market back up.” He added, “There are increasing deaths from starvation so opening market is a reasonable resolution. Death due to starvation has gone out of control.” However, although the market doors are open wide, products are not being distributed and there is no cash flow. Market has shrunk that a businessman who used to make 3,000 won a day is barely making 200-300 won a day.

Good Friends is a valuable source of information but their reports should be taken with a grain of salt.

Posted in Food, General markets (FMR: Farmers Market), Good Friends | 1 Comment »

North Korean Economy Watch

Archive for June, 2010

Kim Jong-il visits Sinuiju, successor Kim Jong-eun takes up on-site guidance

South Korea mulls covering inter-Korean trade losses

What happened to Naenara and .kp?

Mansudae Overseas Development Group Projects

Room (Bureau) 38 allegedly restored

DPRK promotes environemntal efforts

Japanese Firms Suspected of Selling North Korea Possible Missile Parts

Market stuff

DPRK earns $10m at 2010 World Cup

More reports of easing market regulations

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