Archive for June, 2011

Recent DPRK publications

Sunday, June 19th, 2011

Imports from North Korea: Existing Rules,Implications of the KORUS FTA, and the Kaesong Industrial Complex
Mark E. Manyin, Coordinator, Jeanne J. Grimmett, Vivian C. Jones, Dick K. Nanto, Michaela D. Platzer, Dianne E. Rennack
Congressional Research Service (CRS)
June 2, 2011

Download the PDF here.  This publication has been added to the list of previous CRS reports on the DPRK here.


Trade with China 1995-2009
Nathaniel Aden
Nautilus Institute
June 7, 2011

View the paper here.  A link to this paper has been added to the DPRK Economic Statistics Page. The Nautilus Insitute has also posted links to some very interesting presentations from the 2010 DPRK Energy and Minerals Working Group.


[Book] The Contemporary North Korean Politics: History, Ideology, and Power System (현대 북한의 정치: 역사, 이념, 권력체계)
Jong Song-Jang (정성장)
More information TBA, but see here and here (Korean).


[Book] Architekturführer Pjöngjang (German: Pyongyang Architecture Guide)
Philipp Meuser
Order here at Amazon. More here and here.


Comparison of NK and USSR

Sunday, June 19th, 2011

Andrei Lankov writes in the Korea Times:

The present author was born in the former Soviet Union and is frequently asked which period of Soviet history the current North Korea is reminiscent of?

I usually say that this question has no straightforward answer. The problem is that depending on what area you look, the associations are remarkably different. The developments in North Korea are not that different from those of the USSR, but in different areas the time seems to flow with a different speed.

North Korea’s official ideology and propaganda continues to be uncannily similar to late Stalinist Soviet culture, to the period of the late 1940s. The North Koreans are still served the same fare of ossified Leninism and strong nationalism, heavily spliced with eulogies to the leaders’ wisdom and benevolence.

It appears as if North Korean propaganda, as well as its official ideology, has been frozen in time since the late 1960s. One can take an article from Rodong Shinmun of, say, 1972 and then compare it with an article published yesterday only to find no major differences in language, style and reasoning.

At the same time, the general mood among educated urban North Koreans is quite similar to the mood which prevailed among the same social milieu in Moscow and Leningrad of the 1960s. People are still afraid to talk politics and most of them do not entertain serious doubts about the fundamentals of the system. They tend to believe that their economic problems have been created by a combination of natural disasters, collapse of the ‘socialist markets’ and, of course, an economic blockade maintained by the greedy U.S. imperialists and their shameless lackeys.

However, very few educated North Koreans nowadays buy the official propaganda message wholesale. They know that the official media lies, and sometimes lies quite shamelessly. While being more or less loyal subjects of their state, they entertain significant (and growing) skepticism about its institutions and the official pronouncements of its leaders.

It seems that social fear, once powerful and omnipresent, is diminishing. The North Korean state remains highly repressive, but the level of repressiveness is in steady decline. Nowadays North Koreans can do many things which would almost definitely have landed them in prison some 20 years ago ― in some cases, even mildly critical statements about the system are now tolerated.

Of course, open dissent is still unthinkable, but genuine enthusiasm is almost impossible to find. This is a picture, clearly reminiscent of the USSR of, say, year 1965 (albeit the North Korean state remains far more repressive than the Soviet Union used to be during Brezhnev’s rule).

The economic situation is different again. In economic terms, present day North Korea is similar to Russia in the early 1990s, the turbulent days that followed the collapse of the Soviet Union. At that time a large number of the Soviet people discovered that their official salaries would not suffice if they wanted to stay alive, so they began to look for additional sources of income. Ex-Soviet officials busily stole state property, whilst less lucky commoners relied on an assorted variety of small businesses, household workshops and subsistence farming.

This is very similar to present-day North Korea, even though the collapse of the socialist economy in North Korea led to far more damaging consequences than was the case in Russia –after all North Korea experienced a disastrous famine, while few if any Russians starved to death in the early post-Soviet period.

In North Korea, the collapse of the state-run economy and rationing system plunged a majority of the population into the world of the grass-roots market economy. No reliable statistics are available, but researchers tend to agree that roughly three-quarters of average household income in North Korea is now derived from private economic activities of different kinds.

Like their early post-Soviet peers, North Korean officials are always on the lookout for a nice bribe. They also don’t mind quietly transforming state property into their own personal property– many North Korean enterprises ostensibly still owned by the government are actually private nowadays. Meanwhile other North Koreans sell, buy, smuggle, farm unofficial plots, run individual workshops or find employment with such workshops.

So, we have a curious picture. Ideology still pretends that almost nothing has changed in the last 50 years (it’s telling that the official media has never mentioned the market economy, as if it doesn’t exist). The political consciousness is less dominated by the state, but still remains under its control.

However, the North Korean state has almost completely lost control of the economic life of its people. This picture has no parallels in the history of the Soviet Union or, for that matter, in the histories of other ex-communist countries, even though all its elements (if taken separately) would appear familiar to the people with Soviet-era experience.

Read the full story here:
Comparison of NK and USSR
Korea Times
Andrei Lankov


Executive Order 13466

Sunday, June 19th, 2011

UPDATE 2 (2011-6-19): According to Yonhap, a researcher at the Congressional Research Service (CRS) asserts the goal of Executive Order 13466 is to essentially facilitate ratification of the KORUS FTA by preventing the importation of goods made in the Kaesong Industrial Zone into the United States:

A recent executive order issued by U.S. President Barack Obama is partly aimed at banning the imports of products made at an inter-Korean industrial park in Kaesong, a North Korean border town, ahead of the ratification of a free trade pact with South Korea, a Congress-affiliated researcher said Wednesday.

Dick Nanto, a specialist in industry, trade and foreign affairs with the Congressional Research Service (CRS), noted that the April executive order prohibits the direct and indirect entry of North Korean goods.

“The Treasury Department’s Office of Foreign Assets and Control said goods, services and technologies from North Korea may not be imported into the United States directly or indirectly without license,” he said at a forum hosted by Korea Economic Institute.

He said the wording “indirect” was inserted in consideration of Congress’s objection to the inclusion of Kaesong products in the South Korea-U.S. free trade agreement, or KORUS FTA.

“That includes any country — China, South Korea — any country that uses a product of North Korea in the process or as part of the process,” Nanto said.

UPDATE 1 (2011-4-19): Haggard and Noland have a good discussion on the EO.

ORIGINAL POST (2011-4-19): First of all, here is the Executive Order:

Executive Order — Prohibiting Certain Transactions with Respect to North Korea

By the authority vested in me as President by the Constitution and the laws of the United States of America, including the International Emergency Economic Powers Act (50 U.S.C. 1701 et seq.) (IEEPA), the National Emergencies Act (50 U.S.C. 1601 et seq.), section 5 of the United Nations Participation Act of 1945 (22 U.S.C. 287c) (UNPA), and section 301 of title 3, United States Code, and in view of United Nations Security Council Resolution (UNSCR) 1718 of October 14, 2006, and UNSCR 1874 of June 12, 2009,

I, BARACK OBAMA, President of the United States of America, in order to take additional steps to address the national emergency declared in Executive Order 13466 of June 26, 2008, and expanded in Executive Order 13551 of August 30, 2010, that will ensure implementation of the import restrictions contained in UNSCRs 1718 and 1874 and complement the import restrictions provided for in the Arms Export Control Act (22 U.S.C. 2751
et seq.), hereby order:

Section 1. Except to the extent provided in statutes or in licenses, regulations, orders, or directives that may be issued pursuant to this order, and notwithstanding any contract entered into or any license or permit granted prior to the date of
this order, the importation into the United States, directly or indirectly, of any goods, services, or technology from North Korea is prohibited.

Sec. 2. (a) Any transaction by a United States person or within the United States that evades or avoids, has the purpose of evading or avoiding, causes a violation of, or attempts to violate any of the prohibitions set forth in this order is prohibited.

(b) Any conspiracy formed to violate any of the prohibitions set forth in this order is prohibited.

Sec. 3. The provisions of Executive Orders 13466 and 13551 remain in effect, and this order does not affect any action taken pursuant to those orders.

Sec. 4. For the purposes of this order:

(a) the term “person” means an individual or entity;

(b) the term “entity” means a partnership, association, trust, joint venture, corporation, group, subgroup, or other organization;

(c) the term “United States person” means any United States citizen, permanent resident alien, entity organized under the laws of the United States or any jurisdiction within the United States (including foreign branches), or any person in the United States;

(d) the term “North Korea” includes the territory of the Democratic People’s Republic of Korea and the Government of North Korea; and

(e) the term “Government of North Korea” means the Government of the Democratic People’s Republic of Korea, its agencies, instrumentalities, and controlled entities.

Sec. 5. The Secretary of the Treasury, in consultation with the Secretary of State, is hereby authorized to take such actions, including the promulgation of rules and regulations, and to employ all powers granted to the President by IEEPA and the UNPA as may be necessary to carry out the purposes of this order. The Secretary of the Treasury may redelegate any of these functions to other officers and agencies of the United States Government consistent with applicable law. All agencies of the United States Government are hereby directed to take all appropriate measures within their authority to carry out the provisions of this order.

Sec. 6. This order is not intended to, and does not, create any right or benefit, substantive or procedural, enforceable at law or in equity by any party against the United States, its departments, agencies, or entities, its officers, employees, or agents, or any other person.

Sec. 7. This order is effective at 12:01 a.m. eastern daylight time on April 19, 2011.

Here is the text of the letter to Congress:


April 18, 2011

Dear Mr. Speaker: (Dear Mr. President:)

Pursuant to the International Emergency Economic Powers Act (50 U.S.C. 1701 et seq.) (IEEPA), I hereby report that I have issued an Executive Order (the “order”) that takes additional steps to address the national emergency declared in Executive Order 13466 of June 26, 2008, and expanded in Executive Order 13551 of August 30, 2010.

In 2008, upon terminating the exercise of certain authorities under the Trading With the Enemy Act (TWEA) with respect to North Korea, the President issued Executive Order 13466 and declared a national emergency pursuant to IEEPA to deal with the unusual and extraordinary threat to the national security and foreign policy of the United States posed by the existence and risk of the proliferation of weapons-usable fissile material on the Korean Peninsula. Executive Order 13466 continued certain restrictions on North Korea and North Korean nationals that had been in place under TWEA.

In 2010, I determined that the Government of North Korea’s continued provocative actions destabilized the Korean Peninsula and imperiled U.S. Armed Forces, allies, and trading partners in the region, and warranted the imposition of additional sanctions, and I issued Executive Order 13551, expanding the national emergency declared in Executive Order 13466. In Executive Order 13551, I ordered blocked the property and interests in property of three North Korean entities and one individual listed in the Annex to that order and provided criteria under which the Secretary of the Treasury, in consultation with the Secretary of State, may designate additional persons whose property and interests in property shall be blocked.

The United Nations Security Council, in Resolutions 1718 and 1874, requires Member States to take certain measures to prevent, among other transactions, the importation of certain goods and services from North Korea. The sanctions contained in Executive Order 13551 strengthen the implementation of these Resolutions.

I have issued the order today to further address the national emergency with respect to North Korea and ensure implementation of United Nations Security Council Resolutions 1718 and 1874. The order also complements executive authorities under section 73 of the Arms Export Control Act to ensure that all imports from North Korea are consistent with the import restrictions described in that provision, even when relevant designations under that provision are not in effect. To accomplish these goals, the order prohibits the direct or indirect importation of goods, services, and technology from North Korea. Unless exempt, all imports into the United States from North Korea must be authorized.

The order leaves in place all existing sanctions imposed under Executive Orders 13466 and 13551.

I have delegated to the Secretary of the Treasury the authority, in consultation with the Secretary of State, to take such actions, including the promulgation of rules and regulations, and to employ all powers granted to the President by IEEPA and the United Nations Participation Act as may be necessary to carry out the purposes of the order. In particular, this delegated authority may be used to establish a process to consider licenses for imports from North Korea that are consistent with the purposes of the order.

The order is effective at 12:01 a.m. eastern daylight time on April 19, 2011. All executive agencies of the United States Government are directed to take all appropriate measures within their authority to carry out the provisions of the order.

I am enclosing a copy of the order I have issued.


According to the Wall Street Journal:

Monday’s order further expands on an executive order imposed in August 2010 (pdf), and another in 2008. Both remain in effect under this order. In a letter to the House Speaker and the president of the Senate, Obama said the order prohibits the direct importation of goods, services or technology from North Korea.

“Unless exempt, all imports into the United States from North Korea must be authorized,” the letter says.

The goal of the latest executive order is to further implement two United Nations Security Council resolutions, 1718 and 1874, which tasked member states to prevent certain transactions and imports from North Korea. The latest issuance sends a signal that the prior orders weren’t enough, however.

Treasury is tasked with coming up with rules on how to enforce the sanctions and issue import licenses under the order. It went into effect at midnight Tuesday.

The US Treasury also blacklisted another North Korean bank. According to Reuters:

The U.S. Treasury on Tuesday imposed sanctions on North Korea’s Bank of East Land over transactions with a blacklisted North Korean arms maker that it said has exported torpedoes to Iran.

The Treasury said the action was taken under an August 2010 White House executive order that aims to thwart North Korea’s arms trade, luxury goods imports, narcotics trafficking and money laundering.

The move seeks to freeze any Bank of East Land assets that may be under U.S. jurisdiction and bans U.S. entities from transactions with the institution, also known as Dongbang Bank.

The Treasury has fought a long-running sanctions battle against illicit activities of the North Korean government, including its alleged manufacturing of high-quality counterfeit $100 bills known as “supernotes.”

“Bank of East Land is a major conduit for facilitating North Korea’s conventional arms trade,” David Cohen, the Treasury’s acting under secretary for terrorism and financial intelligence, said in a statement.

“Today’s designation exposes North Korea’s efforts to circumvent sanctions to conduct illegal activities and degrades its ability to abuse the international financial system,” Cohen said.

The Treasury said Bank of East Land has facilitated transactions for Green Pine Associated Corp, a North Korean arms manufacturer and exporter that was previously placed on the U.S. sanctions list. It said Green Pine produces submarines, military boats and missile systems and has exported torpedoes and technical assistance to Iranian defense-related firms.

In 2007 and 2008, the bank also facilitated transactions involving Green Pine and two blacklisted Iranian financial institutions, Bank Melli and Bank Sepah, the Treasury said. The Iranian state banks previously were sanctioned under an executive order aimed at curbing Iran’s nuclear and missile development efforts.

In 2005, the Treasury blacklisted a small bank in Macau, Banco Delta Asia, which cut off Pyongyang’s primary conduit to the international financial system at that time. The move was separate from sanctions aimed at curbing North Korea’s nuclear program but added pressure on the reclusive communist regime to bring it back to multilateral nuclear talks.

Here is the US Treasury Department’s North Korea sanctions page.


Friday Grab bag: a little bit of everything

Friday, June 17th, 2011

1. Google has uploaded some beautiful new satellite imagery of Pyongyang. Some parts of it are easier to see than others, and I have not gone through it all, but here are some fun, quick discoveries:

1. There appears to be a new aircraft runway in Ryongsong-guyok (룡성구역, 39.127835°, 125.777533°).  Maybe not, but maybe.

2. The Ryugyong Hotel is looking more and more like a space ship:

3. We can see 2012 building construction all over the place.  Below are the new apartments Kim Jong-il recently visited (L) at the foot of Haebang Hill and (R) behind the Central District Market (for artists).

Here and here are the KCNA stories about Kim’s visits to the sites.

Here is a photo of the artist-housing under construction.

The Haebang Hill apartments are built on the former location of the “Monument to the Fallen Fighters of the Korean People’s Army”.  See a picture of this former monument here.


2. DPRK TKD in USA. As I mentioned a couple of days ago, a North Korean Taekwondo team toured the northeastern US this week.  I wish I could have seen one of the shows…but here are some clips from the New York show on Youtube: Part 1Part 2Part 3Part4.

They did a great job and are tremendous athletes.  I hope they are able to return soon–and make it a little further south.


3. DPRK sand animation. This week KCNA posted some very interesting video of a “sand art” demonstration.  Very skilled performance. A viewer was able to rip the video and post it to YouTube.

Pictured above is the “Ryugyong Hotel fireworks” part of the performance.  Part 1 of the piece is here.  Part 2 of the piece is here.  The whole performance is well worth watching. If I could ever be a tourist to the DPRK again, I would want to see one of these performances.

UPDATE: A special thanks to Prof. Stephan Haggard for offering a helpful explication of the piece.

In a similar vein, this piece remains my favorite of the genre (from Ukraine).


2. Kim’s Train (Retro). Last week I posted recent video footage taken from inside Kim Jong-il’s train.  This week I post some retro footage taken in the 1970s(?):

You can see the video here.  The room set up is essentially the same, though Kim’s tastes have obviously changed!


3. The CNC backpack.

Here is the source.  Learn more about CNC here.


4. A North Korean artist reproduced da Vinci’s Last Supper for an art show in Russia. See the Russian-language version of the BBC here (picture-8 ). (h/t L.P.)



DPRK opens paved Kowon-Hamhung highway

Friday, June 17th, 2011

Pictured above (Google Earth): The approximate route of the new Kowon-Hamhung highway

Here are the KCNA stories on the new highway in chronological order:

Pavement Project of Kowon-Hamhung Highway Finished

Pyongyang, May 26 (KCNA) — The pavement project of the Kowon-Hamhung highway in South Hamgyong Province was finished recently. The highway began to be reconstructed on an expansion basis in mid-March.

Some 600,000 cubic meters of earth were cut or filled on the ground, over 250,000 cubic meters of sand and gravel tamped and nearly 700,000 square meters of road paved with concrete.

Trees have been planted and flowerbeds made on both sides of the highway. Slopes are being swarded and accident-preventing stones and waymarks installed.

Revetment, conduit and culvert projects will be completed soon.

The reconstructed highway will help facilitate transportation in the area and promote the country’s economic growth.

Highway between Kowon and Hamhung Reconstructed

Pyongyang, May 31 (KCNA) — The highway between Kowon and Hamhung was successfully rebuilt.

The completion of this project helps to satisfactorily ensure the cargo transport for various domains of national economy, provide people with good conditions for travel and radically improve the environment in this area.

Builders finished the projects for paving the highway and building many structures, etc. in a matter of 60 odd days.

More than 40,000 trees of good species were planted and an area covering hundreds of thousands of square meters was put in turf, turning the landscape of the highway beautiful.

New Motorway Opened to Traffic in DPRK

Pyongyang, June 17 (KCNA) — A project for rebuilding Kowon-Hamhung motorway on an expansion basis has been completed in the DPRK.

During the project, the army and the people carried out concrete pavement and building of scores of bridges and retaining walls in single-minded unity.

The completion of project made it possible to contribute to the economic development of the country and renewed the looks of the land to meet the requirement of the Songun era.

A ceremony of opening the road to traffic took place on Friday. Present there were Premier Choe Yong Rim, Minister of the

People’s Armed Forces Kim Yong Chun, Chief Secretary of the South Hamgyong Provincial Committee of the Workers’ Party of Korea Kwak Pom Gi, officials of relevant organs, servicepersons, officials and builders of South Hamgyong Province, working people and helpers.

Conveyed at the ceremony was a message of thanks of the WPK Central Military Commission addressed to soldier-builders and inhabitants and helpers of South Hamgyong Province who performed labor feats in the project.

There were a report and speeches there.

The highway from Hamhung to Kowon, however, is only half of the distance needed to connect Hamhung to the Pyongyang-Wonsan paved highway.  I am unsure if the remainder of this route has already been completed or if it remains to be done as a separate project.

The distance of road that was paved is approximately 60km.


DPRK forests continue to shrink

Friday, June 17th, 2011

UPDATE (2011-6-23): Today the Nautilus Institute sent out more interesting resources on the state of the DPRK’s forests.  Check them out below:

“Forest and Other Biomass Production in the DPRK: Current Situation and Recent Trends as Indicated by Remote Sensing Data”
Power Point Presentation by  Seung-Ho Lee (June 2006)

“Unbearable Legacies: The Politics of Environmental Degradation in North Korea”
Peter Hayes, August 30, 2009

ORIGINAL POST (2011-6-17):


Pictured above (Google Earth): A North Korean propaganda slogan on a mountain-side urging “Let’s plant more trees!”

This should be nothing new to regular readers of this site, but according to a recent article by Yonhap:

Deforestation in North Korea is taking place at a rapid pace as people cut down trees for fuel and turn forest into farmland, a report by a state think tank here said Friday.

An average of 127,000 hectares of forest in North Korea have been destroyed on average every year for the past two decades, the Korea Forest Research Institute (KFRI) said in the report based on data by the United Nations Food and Agriculture Organization.

I have not been able to locate the report on the KFRI web page.  If any readers are able to locate it, please send it to me.

An earlier report found that in two adjacent biosphere reserves across the border of China and North Korea, over one half of primary forest landscapes have been deteriorated by exploitive uses, including seed harvesting and systematic logging.

You can read a number of previous posts on similar topics here: Ministry of ForestryForestry, and Lumber.


Statistics on DPRK – PRC trade

Friday, June 17th, 2011

Yonhap has published a short article on the difficulties of analyzing North Korean trade data.  According to the article:

Data on North Korea’s trade with other countries is scarce, and there are stark contrasts in recent estimates from South Korea and the International Monetary Fund (IMF) in terms of both volume and composition.

North Korea’s imports and exports, excluding those with South Korea, reached US$4.17 billion last year, according to a report published last month by the South’s state-run Korea Trade-Investment Promotion Agency (KOTRA). The North’s trade with China — its chief ally and benefactor — amounted to some $3.5 billion, or 83 percent of the reclusive state’s total trade with other countries, the report said. Inter-Korean trade, meanwhile, reached $1.91 billion in the same period.

The findings were based on an analysis of annual trade reports filed by countries that deal with North Korea, as Pyongyang does not provide its own economic data.

The IMF, however, estimates North Korea’s total trade volume at 5.91 billion euros ($8.39 billion) last year, about double KOTRA’s figure, according to a recent report by the Voice of America (VOA), which cites the European Commission. The IMF estimates North Korea’s trade with China at some $3.9 billion, which is similar to KOTRA’s estimate, but accounts for a much smaller proportion of the total volume at 46 percent.

These figures are also based on data from North Korea’s trade partners, but appear to include some of these countries’ exports and imports with South Korea, according to experts.

The IMF’s estimates may be affected by errors in distinguishing the North from the South, while KOTRA’s South Korean staff are able to filter out many of these mistakes, the experts said. The trade agency’s figure may also be smaller because it relies on official data from governments, while the IMF collects its material from a wide range of sources.

“We do not reflect figures that we do not see as normal trade, such as foreign aid or under-the-table transactions,” a KOTRA official said on the condition of anonymity.

Back in February, Marcus Noland had this to say about KOTRA trade statistics (in regards to the % of the DPRK’s trade comprised of transactions with China):

The canard’s origin is in the odd way that the official (South) Korea Trade-Investment Promotion Agency (KOTRA) reports data on North Korean trade.  KOTRA excludes trade with South Korea, the North’s second largest trade partner after China, from North Korean international trade figures, treating these cross-border exchanges as “domestic.” (Funny, I’ve never noticed a minefield separating Maryland and Virginia or encountered heavily armed guards manning the Texas-Oklahoma border.) Then, to compound matters, KOTRA seems to have stopped following some of North Korea’s trade with Middle Eastern countries. The explanation could be budget cuts; there is also speculation that it is politics—dovish South Korean governments were reluctant to report North Korean involvement with dodgy Middle East regimes; or it could be general disinterest.  Whatever the reason, the breadth of KOTRA’s coverage of North Korean trade in the Middle East has dropped considerably, further exaggerating China’s prominence.

The upshot is that there is a huge divergence between the figures produced by KOTRA and those derived from UN and IMF data.

Read the full story here:
S. Korea, IMF differ over volume of N.K. trade


NSA agents in Hyesan under greater scrutiny

Friday, June 17th, 2011

Pictured above (Google Earth): Hyesan City’s Kanggu-dong (강구동), Wiyon-dong (위연동), and Songpong-dong (송봉동) mentioned in the Daily NK story below.

According to Daily NK:

A source from Hyesan revealed the news yesterday, saying, “On the 11th, an NSA agent responsible for the Kanggu area of Hyesan committed suicide at his office. In one soldier’s testimony during the process of an investigation into the border guard unit, it came out that he had aided smuggling and defections, and had taken bribes. Out of fear of punishment, he killed himself.”

According to the source, there has recently been one other similar case in the city. In that instance, an NSA agent responsible for the Wuiyeon area killed himself at his house during April, apparently during an NSA investigation centering on the fact that an abnormally large number of defector families were there.

In another instance, NK Intellectuals Solidarity recently reported a case from February, where an NSA agent covering the Songbong area of the city killed himself at the time of his arrest by smashing his head into a wall. In that case, however, the NSA investigation was focused around the sale of 1kg of narcotics.

This is causing tension in the city, the source went on, explaining, “They are warning people not to gossip to others about issues related to the National Security Agency. The rumor now circulating is that there will be an in depth investigation by the central Party soon, so the feeling here is uneasy.”

In North Korea, a local NSA agent is responsible for roughly 1,000 households or less. Through roughly 40 or 50 people’s unit heads and Women’s Union cadres, the agent obtains information on the activities of local people and passes on instructions to them, thus playing a key role in the preservation of the system.

For smugglers and defectors, stepping outside this surveillance net is both important, and also hard. For that reason, smugglers commonly buy off NSA agents. Sources and defectors both agree that abetting defection is rarer, since it is punished more harshly, with whole extended families facing extreme consequences.

Ordinary city residents, meanwhile, are not sad to see the back of any agent who takes his own life, the source added, pointing out that they are one of the most hated groups in North Korea.

Hyesan is an ideal location from which to stage a defection.  Though it is the capital of Ryanggang Province (Yangang, 량강도) , it is both geographically and administratively remote—on the Chinese and DPRK sides of the border.  The border itself is a very shallow, sometimes dry, Yalu River basin which is lined in both directions with railway service.

Read the full story here:
Spate of NSA Agent Suicides in Hyesan
Daily NK
Lee Seok Young


DPRK-ROK oil exploration deal allegedly inked

Thursday, June 16th, 2011

According to the Korea Herald (h/t L.P.):

A number of economic cooperation projects appear ready to take shape between North Korea and China.

A businessman here claimed the North and China have signed a more concrete agreement last year following up on a 2005 preliminary deal to jointly develop an offshore oil field.

“The North has agreed with China to jointly develop an offshore oil field in the waters off Nampo,” a western coastal town, said Kim Young-il, chief executive of a South Korean trading firm and inter-Korean trade adviser to the Korea International Trade Association.

“The North Korea-China agreement on joint development of the oil field seems to have taken place last year.”

It is estimated that some 20 billion tons of crude oil is buried under the Bohai Gulf continental shelf which stretches across the Korea Bay between the North Pyongan Province and China’s Liaoning Province, Kim said during a policy debate session hosted by a legislator.

“The joint exploration would be economically viable because, once about a third of the oil reserve can be extracted, they can extract between 7 and 8 billion tons, enough to meet China’s entire demand for nearly 30 years,” Kim said.

Read the full story here:
Communist allies seek strategic interests
Korea Herald
Kim So-hyun


Losses grow for South Korean firms invested in DPRK

Thursday, June 16th, 2011

Pictured above (Google Earth): Kangso Mineral Water Processing Factory (Google Maps)

According to the Hankyoreh:

Former DD Trading Chairman Lee Dae-sik, 74, still has trouble sleeping when he thinks about the events of the past few years. In that time, he has had to shut down an effort in the North Korea that was earning 4 to 5 billion won ($3.7 million to $4.6 million) in annual sales just a few years ago, as a result of the Lee Myung-bak administration’s hardline policy against North Korea.

“At the time I was investing in North Korea, we had the Inter-Korean Exchange and Cooperation Act, and I never dreamed they would halt North Korea projects. Now the government will not let us do an effort it granted approval for, something we had been doing consistently. It is just…”

During an interview with the Hankyoreh at a cafe in the Hawolgok neighborhood of Seoul’s Seongbuk District on Tuesday evening, the day before the eleventh anniversary of the June 15 Joint Declaration, Lee was too overcome with emotion to finish his sentence. He is one of the many South Korean businesspeople who have suffered as a result of the government’s restrictions on trade with North Korea. According to a January-February survey of companies engaged in North Korea efforts, the 104 companies that responded sustained an average loss of 3.9 billion won ($3.6 million) as a result of the May 24 measures restricting inter-Korean trade.

Lee is a first-generation North Korea entrepreneur who has been engaged in trade with the country since the Kim Young-sam administration in 1994. Originally the operator of a shoe factory in Busan, Lee struggled with the competition of cheap labor in China and Northeast Asia and searched for a change before finally taking the leap into North Korea. At first, he imported Pyongyang soju and agricultural products like bracken, balloon flower roots, and pine mushrooms.

“After the June 15 summit in 2000, the North Koreans grew more flexible in their attitude and became easier to deal with,” he recalled.

Lee, who steadily expanded the range of his operations over the years, began an effort in 2005 with Pyongyang’s Kangso Yaksu. This mineral water, North Korean National Treasure No. 56, is naturally carbonated and contains minerals like calcium and iron. After securing exclusive sales rights from North Korean authorities, Lee completed construction on a production plant the next year at an investment of 3 billion won. According to the conditions of the contract, Lee sent the cost of the water and the raw materials for the bottles, along with caps and labels, and the North Koreans operates the factory and sent the water produced.

“We imported it to South Korea under the brand name of ‘Gangseo Cheongsan,’ and sales increased from an initial level of 100 thousand to 200 thousand bottles a month to 300 thousand to 400 thousand bottles a month,” he said.

But stormy clouds appeared on the horizon when the Lee Myung-bak administration took office in 2008. As inter-Korean relations grew chilly due to the shooting death of a South Korean tourist at Mt. Kumkang in July of that year and North Korea’s missile launch and nuclear test in April and May of 2009, respectively, the Lee administration placed restrictions on contact with North Korea by civilians.

“When you apply for contact with North Korea, the government tells you to ‘please refrain from doing so,’” Lee said. “They say ‘please refrain,’ but who is going to refuse a request from the government? They are basically telling you, ‘Don’t do it.’”

The decision left Lee unable to send the promised payment and bottle materials to North Korea and to receive the water. One day, a fax came in from North Korea. It notified Lee that the contract was null and void, as he had not supplied the raw materials or collected the water produced. “We had ten or so employees, and they all went their separate ways,” Lee sighed. “Fifteen years of work in North Korea, and all I have left now is a pile of debt.”

“North Korea said it would sell China the water produced at the facilities I invested in,” Lee added.

“Even so, they told me they would restore my rights if I am able to work again like before, so I really hope the inter-Korean trade restrictions are lifted right away so that I can do business freely.”

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Losses continue for businesses engaged in inter-Korean trade
Park Byong-su