A couple of new publications came out on the DPRK by some well known scholars:
“Hitting Below the Belt: Pyongyang Spills the Beans on Secret Summit Talks”
38 North
Aidan Foster-Carter
“Political Change in the DPRK: An interview with Stephan Haggard and Daniel Pinkston”
National Bureau of Asian Research
Following the recent agreement between the DPRK and the Associated Press, Reuters has announced that it is expanding its capabilities in the DPRK. According to the Press release:
NEW YORK, NY, Jul 11, 2011 (MARKETWIRE via COMTEX) — Reuters today announced an expansion of its relationship with the Democratic People’s Republic of Korea’s Central News Agency (KCNA).
The new agreement will provide Reuters access to news video from North Korea via satellite for timely distribution to broadcasters and publishers around the world. The Reuters News Agency will be the first international news organization to have a full time satellite dish in North Korea, delivering clean news video content in addition to the text and pictures covered by a previous agreement – a significant benefit to broadcasters across the globe.
We know the world’s broadcasters are seeking more news from North Korea, and this agreement will ensure our clients have a regular supply of up to the minute video stories from Pyongyang and across the country,” said Chris Ahearn, president of Reuters Media.
The agreement with KCNA covers both breaking and feature news video, and marks a significant expansion by Reuters in delivering news from one of the world’s most important datelines. As part of the arrangement Reuters will also be providing editorial training and KCNA will facilitate regular visits to North Korea by senior Reuters journalists.
So look for some new faces at “The Friendship”.
Pictured above (Google Earth): The recently completed Hana Electronics and restaurant building in Rakrang-guyok (락랑구역). See in Google Maps here.
Phoenix Commercial Ventures has recently launched a new web page and issued the following press release on their latest projects in the DPRK:
FOR IMMEDIATE RELEASE:
Hana Electronics Opens “The Restaurant at Hana”
Pyongyang/London, July 8th 2011
Phoenix Commercial Ventures Ltd (www.pcvltd.com) is proud to announce that Hana Electronics JVC (a 50/50 joint venture based in the DPRK) completed and moved into its new headquarters based near the T’ongil Market in Pyongyang in Q1 2011.
Having moved in and set up its production facilities, Hana has now opened a restaurant (“The Restaurant at Hana”) and related leisure facilities (swimming pool, sauna, hairdresser, bar, gym etc) in its headquarters.
The restaurant (which comprises a main dining room and several private ones) and leisure facilities are open to locals and foreigners alike. Food for the restaurant is sourced from local markets.
A video and photos of the restaurant can be viewed on the Phoenix website.
About Phoenix Commercial Ventures Ltd
Phoenix Commercial Ventures Ltd offers investors business and investment opportunities in the Democratic People’s Republic of Korea (DPRK), enabling them to take advantage of the economic reforms that are taking place there.
Phoenix Commercial Ventures Ltd maintains an office in Pyongyang, almost the only European company to do so, and operates with the following specific aims:
• Identify commercially viable investment projects in the DPRK, on a case by case basis
• Identify reliable local partners for all forms of business in the DPRK, either trade or investment
• Seek overseas investment sources for such projects
• Minimise the risk in such projects, by taking responsibility for supervision of the local set-up procedures and management of the projects
About Hana
Hana was established in May 2003. In 2004 it began manufacturing and selling DVD and VCD players, as well as pressing and selling CD’s.
When the company first began operations it employed barely a handful of people. Now it employs over 200 people, and has thus become a major employer with significant social responsibilities which it takes very seriously.
Hana have established a nationwide distribution network throughout the major cities in the DPRK. Whilst they manufactured and marketed CD’s, they had an exclusive long term contract with the Mansudae Arts Centre, which belongs to the Ministry of Culture, one of the partners in the JV, for 300 works including; movies, karaoke and other music.
They now produce and sell a range of DVD players, and will move into other consumer electronics products.
Hana is now ranked as one of the top three best performing joint ventures in DPRK, as assessed by the Ministry of Finance.
Hana is proud to have introduced a number of firsts, which show the evolution of the DPRK to a market economy. These include:
• Advertising – the Hana logo, together with the company’s telephone number, appear on every product and packing case
• Offering a guarantee – Hana has also introduced a six-month, no questions asked, guarantee on all products
• Distribution System – Hana have gradually established, from a zero base, a distribution system covering the whole country. They have set up sales offices – for example, in Chongjin, they now have one main office and 13 sub-branches; in Hamhung, they have one main office and 3 sub-offices, and also have offices in Nampo, Sariwon and Sinuiju. They plan to open more outlets, first in the other provincial cities, then in the smaller county seats
• Hana intends to diversify and expand their range of products.
• Hana moved into its newly constructed building, next to the T’ongil Market, in Q1 2011.
• Hana has also opened a restaurant (“The Restaurant at Hana”) and leisure facilities (including a swimming pool) in its new building. The restaurant and leisure facilities are open to locals and foreigners alike.
CONTACT INFORMATION:
Phoenix Commercial Ventures Limited
No. 901
International House of Culture
Ryonhwa-dong
Central District
Pyongyang
Democratic People’s Republic of Korea
Corporate Website www.pcvltd.com
Last night on the KCTV evening news (July 6), the DPRK unveiled the propaganda posters for the upcoming elections:
Click on the image for a larger version*.
The slogan at the bottom of the painting reads “일심단결의 위력을 시위하자”. Thanks to a helpful reader, this translates to “Let’s demonstrate the power of single-hearted unity”.
Click on image for a larger version*.
The slogan at the bottom of the painting reads “모두다 찬성 투표하자”. Again with thanks to a reader, this means “Let’s all vote yes”.
See translated KCTV footage here.
Marcus Noland writes about the elections as a form of social control.
The Daily NK has more on the elections:
North Korea has confirmed the date of the country’s next local People’s Committee elections. According to a report put out by Chosun Central News Agency (KCNA) today, the poll is set to take place on the 24th of next month.
Citing a June 13th release put out by the Standing Committee of the Supreme People’s Assembly, KCNA reported this morning, “According to Article 139 of the Socialist Constitution of the Democratic People’s Republic of Korea and the decision of local People’s Committees, province, city and county People’s Committee delegate elections will proceed on July 24th.”
North Korea’s constitution demands that it conduct elections to local committees every four years. The last, which occurred almost exactly four years ago, in July, 2007, saw 26,635 delegates elected to various committees.
At the end of May, The Daily NK cited an inside North Korean source as suggesting that the elections were likely to be in June, and that the authorities were involved in the process of voter registration.
However, such elections are a formality, while the process of voter registration is used partly as a way to threaten the families of defectors. One inside source, reporting on the contents of a people’s unit meeting in late May, cited a security official, “He said, ‘We will punish or exile families who either fail to take part in or miss it because they are not here. Contact people who have gone to China for trade or gone to live there illegally and tell them to come back without fail.”
According to the Voice of Russia, the election campaign is aimed at drawing the maximum turnout which in 2007 was officially 99.82% voters.
* Originally I used the images from KCTV, but since Yonhap later published better versions, I ammended the post to include them.
According to the China Daily:
China and the Democratic People’s Republic of Korea (DPRK) have agreed to share their experience and beef up cooperation in exploring and utilizing renewable energy.
The agreement was made during a meeting on Wednesday between senior Communist Party of China (CPC) official Zhou Yongkang and a delegation from the Korean Workers Party (KWP), led by Thae Jong Su, an alternate member of the KWP’s Political Bureau and member of the Secretariat.
Thae told Zhou that the main purpose of his current China trip is to learn from China’s experience in developing geothermal resources, as specified by the DPRK’s top leader, Kim Jong-il.
The DPRK hopes to use geothermal energy in its efforts to develop its economy and build a strong and prosperous country, Thae said.
Zhou, a member of the Standing Committee of the CPC Central Committee Political Bureau, told Thae that China would like to enhance its exchanges with the DPRK in the field in order to jointly improve their capability to develop and utilize renewable energy.
“I once worked in China’s oil industry for a long time, so I fully understood the importance of energy to a country,” said Zhou, who is also secretary of the Political Science and Law Committee of the CPC Central Committee.
Zhou served as vice minister of the Ministry of the Petroleum Industry from 1985 to 1988 and went on to work as deputy general manager of the China National Petroleum and Natural Gas Corporation from 1988 to 1996.
He said China has been actively promoting reforms in its energy sector during the country’s 12th Five-year Plan period (2011-2015).
Hailing the sound momentum of China-DPRK relations, Zhou recalled Kim’s successful visit to China earlier this year, during which Kim exchanged views with President Hu Jintao on major issues of common concern.
Kim also sent a congratulatory letter to Hu regarding the 90th anniversary of the CPC’s founding, Zhou said.
“We are glad to see that the two sides have engaged in high-level exchanges and substantial cooperation in various areas and made concerted efforts for common development and regional peace and stability,” he said.
Thae also conveyed greetings from Kim to Hu during the meeting.
The DPRK delegation is visiting China from July 5 to 9 at the invitation of the International Department of the CPC Central Committee.
Senior CPC official Liu Qi also met with the delegation later Wednesday afternoon.
Liu, a member of the Political Bureau of the CPC Central Committee and secretary of the Beijing Municipal Committee of the CPC, said China and the DPRK currently boast “frequent high-level visits, increasing strategic communication, deepening economic cooperation and active cultural exchanges.”
“China is ready to make joint efforts with the DPRK to implement the consensus reached by the two top leaders and further expand exchanges and cooperation in all areas,” Liu said.
Liu said that he hopes the people of the DPRK see continued progress in the country’s development under the leadership of Kim.
Liu also briefed Thae on Beijing’s economic and social development.
In response, Thae said the DPRK and China now enjoy prosperous ties, which have been carefully nurtured by the countries’ top leaders. The DPRK is willing to work with China to carry out practical cooperation and bolster relations to a new high, he added.
Read the full story here:
China, DPRK to boost renewable energy co-op
China Daily
2011-7-7
Pictured above (Google Earth, October 2010): (left) informal street market in Hadang-dong, (right) official market in Hadang-dong
According to the Daily NK:
Sources have reported a large increase in the number of ‘grasshopper traders’ in the alleyways around many of North Korea’s markets.
‘Grasshopper traders’ are individuals who conduct their trade activities without an official permit beyond official market boundaries, meaning that when security forces arrive they have to jump, like grasshoppers, to a new location. Growth in this kind of phenomenon would tend to suggest that the class of capital-holding middle class traders is shrinking, while the number of those trading day-to-day in order to make ends meet is growing. It is also related to the fact that official efforts to eliminate grasshopper trading are not as strict as they have been.
One source living in the traditionally more affluent capital, Pyongyang, explained to The Daily NK today that even there, “The number of grasshopper traders has increased a lot of late. There are too many to count,” adding that in the case of Hadang Market, the normal 100-200 grasshopper traders has grown to between 300-400 over a very short period.
Another source from Yangkang Province agreed, saying, “There are grasshopper traders camped in every alleyway around Hyesan Market. People are coming in twice the numbers they normally do, so cracking down on them is not easy.” Other local sources have revealed that markets in the provinces of North Hamkyung and Pyongan are in much the same state.
As expected, with an increasing degree of grasshopper trading comes an increasing number of market watch guards. However, whereas in the past those caught engaging in grasshopper trading stood to lose their wares, nowadays grasshopper traders are just warned about their conduct.
The Pyongyang source explained, “The number of market watch guards has increased by around ten, but their crackdowns are much weaker than they used to be. I know that the authorities have ordered them not to confiscate traders’ wares by force, just to enforce public order.”
This appears to be because the authorities fear that some of their excesses are inflicting too much harm on public opinion.
The Pyongyang source explained, “In many cases people oppose the young market watch guards’ attempts to take the belongings of traders by force, saying ‘they are worse than the Japanese’, and the authorities seem to care about that.”
Officials and the security forces are also being careful about their conduct because of fear of investigation, and this may also be affecting the market environment. Rumors are circulating which suggest that some cadres are being punished for things such as taking bribes.
On this point, the Pyongyang source added, “The central Party is conducting an inspection of the public organs charged with controlling the markets. The word is that people working for these organs are being investigated for things like taking bribes, going to the homes of traders to demand things, or just taking what they want from market stalls.”
Read the full story here:
Grasshopper Numbers Rising Fast
Daily NK
Choi Cheong-ho
2011-7-4
Picture above from the Daily NK.
According to the Donga Ilbo:
China has begun cracking down on North Korea`s narcotics trade in China along with South Korean intelligence, having seized 60 million U.S. dollars worth of drugs from the North last year, according to a South Korean government source Monday.
“It’s only a fraction. The volume of drug trafficking in China will be much greater than that,” the source said.
This is the first time for China to unveil the volume of narcotics made in North Korea.
Beijing had been reluctant to raise the matter in public though it found Pyongyang`s increased drug trafficking as a threat. China diplomatically protects the North in nuclear issues but started a crackdown with South Korea apparently because it can no longer tolerate the North`s narcotics, which threatened China`s three northeastern provinces bordering the North.
The drugs seized by Beijing are said to have the best quality, going beyond the level individuals can produce. So Pyongyang is considered to be manufacturing narcotics on the national level at factories.
“China is pretty much pissed off,” a diplomatic source said, adding, “China believes that North Korea’s drug trafficking has grown more serious since last year.”
Though Beijing did not specifically mention the North when it stressed a crackdown on drugs, it implied North Korean-made narcotics.
In a previous post, we linked to a Newsweek story on the Chinese crackdown:
Twenty years ago, Yanji had only 44 registered drug addicts. Last year, the city registered almost 2,100 drug addicts, according to a 2010 Brookings Institution report, with more than 90 percent of them addicted to meth or similar synthetic drugs. Local officials acknowledge that this is very likely a gross undercount and that the actual number may be five or six times higher. “Jilin Province is not only the most important transshipment point for drugs from North Korea into China, but has itself become one of the largest markets in China for amphetamine-type stimulants,” the Brookings report said.
Chinese authorities recently conducted a provincewide crackdown, code-named Strong Wind. But for law enforcement, the drug presents a particular problem. Unlike other drugs, it’s nearly impossible to trace the origin of meth. Still, officials, residents, and experts believe that much of the methamphetamine consumed in this Chinese region is manufactured across the border in North Korea, a longtime exporter of drugs. “Clearly,” the Brookings report said, amphetamine-type stimulants “from North Korea have become a threat to China in recent years.”
In an article published last year, Cui Junyong, a professor at Yanbian University’s School of Law, posited that a large amount of the illegal drugs ingested in Yanji came from North Korea. Supporting his point, the border patrol last year arrested six North Koreans in a high-profile bust, including a dealer named “Sister Kim.” Although sources estimate that a gram of meth in North Korea costs roughly 10 times the price of a kilo of rice—about $15—it’s still much cheaper than in China.
“Selling ice is the easiest way to make money,” says Shin Dong Hyuk, who was born in a North Korean concentration camp in 1982 and escaped to South Korea in 2005. Every defector, he added, “knows about ice.”
Perhaps because of its alliance with its benighted neighbor, the Chinese government has been extremely careful about pointing its finger at North Korea; reports on drug busts in Jilin province euphemistically refer to the drugs as coming from a “border country.”
“We don’t publicize” the drugs coming from North Korea because it would touch on “the good relationship between China and North Korea,” an official, requesting anonymity, from Jilin’s anti-drug unit says. But he adds, “Of all the drugs we’ve seized this year, it’s mostly been ice, because that’s our main drug here.”
…
According to Yun and others, North Korea’s methamphetamine production is centered in Hamheung, the site of a chemical-industrial complex built by the Japanese during World War II, which has a high concentration of chemists and was reportedly one of the worst-hit cities during the famine.
…
Earlier this year, a US Department of State report to the Congress alleged that the DPRK’s state-sponsored drug production was on the wane–though “private” production and trade along the Chinese border remained a problem. According to one report:
In an annual report submitted to Congress, the US State Department said “no confirmed instances of large-scale drug trafficking” involving the North Korean state or its nationals were reported in 2010.
It said there was not enough information to confirm that the communist state was no longer involved in drug manufacture and trafficking “but if such activity persists, it is certainly on a smaller scale”.
This is the eighth consecutive year that there were no known instances of large-scale methamphetamine or heroin trafficking to either Japan or Taiwan with direct North Korean state involvement, it said in the 2011 International Narcotics Control Strategy Report.
“The continued lack of public reports of drug trafficking with a direct DPRK (North Korea) connection suggests that such high-profile drug trafficking has either ceased or been sharply reduced,” the report said.
The report said, however, that trafficking of methamphetamines along the North Korea-China border continues and press reports about such activities have increased in comparison to last year.
“These reports… point to transactions between DPRK traffickers and large-scale, organised Chinese criminal groups” in locations along the border.
“Press reports of continuing seizures of methamphetamine trafficked to organised Chinese criminals from DPRK territory suggest continuing manufacture and sale of DPRK methamphetamine,” the report said.
This and continued trafficking in counterfeit cigarettes and currency suggests that “enforcement against organized criminality in the DPRK is lax”, it added.
Additional Information:
1. Back in March, Andrei Lankov wrote about this situtaion.
2. Earlier this year, the DPRK arrested some Japanese men in Rason for “trafficking and counterfeit”.
3. In June, China intercepted a meth shipment from the DPRK.
4. Marcus Noland also has posted on this topic.
UPDATE 1 (2011-7-13): Marcus Noland wrote some comments on the DPRK’s trade with China:
In an earlier post we argued that North Korea’s trade dependency on China, while large and rising, is frequently exaggerated in public discussions. According to press reports, the Korean Development Institute has apparently gone some way in rectifying this situation, determining that China accounts for 57 percent of North Korea’s trade—a far cry from the 80 percent derived from the KOTRA figures that ignore North-South trade, yet still well above the 30-40 percent we obtain on the basis of IMF figures. Like KOTRA, the KDI figures appear to be missing trade—their overall estimate for total North Korean trade, approximately $6 billion, is well below the $8-11 billion reported in recent years by the Fund. Those figures are not unimpeachable—just take a look on our recent posting regarding their FDI data, but it is striking that the numbers diverge by such large margins.
ORIGINAL POST(2011-7-7):
Trade with China: According to the APF (2011-7-6):
North Korea’s reliance on China for trade deepened last year after South Korea severed most ties with Pyongyang, accusing it of torpedoing of one of its warships, a think-tank said Wednesday.
The state Korea Development Institute said in a report the North’s trade with China was worth $3.47 billion last year, up 29.3 percent from a year earlier.
Such trade accounted for 56.9 percent of its total trade of $6.09 billion last year, up from 52.6 percent in 2009.
The trend intensified this year, with the value of North Korea-China trade nearly doubling to $1.43 billion during the first four months from the same period a year earlier.
This was mainly due to a sharp rise in the North’s coal exports, the institute said.
In contrast, the North’s exports to South Korea plunged from an average $40 million per month in January-May last year to a mere $1 million per month in the first four months of this year.
“The North drastically expanded exports of such strategic materials as coal to China” after its trade with the South was almost cut off, the report said.
This sudden surge in exports contributed to energy shortages in the North during the past winter.
Here is the report home page (Korean). Here is the report (Korean-PDF)
Trade with South Korea: According to Yonhap:
Trade between South and North Korea shrank more than 14 percent in a year following economic sanctions imposed on the North in retaliation for its sinking of a South Korean warship, the Unification Ministry said Sunday.
Total inter-Korean trade dropped to US$1.73 billion in the year spanning from June last year to May this year, declining 14.41 percent from $2.02 billion in the same June-May period a year earlier, according to the ministry.
The decline came after the sitting Lee Myung-bak administration declared on May 24 last year its resolution to bring the North’s March 26 sinking of the South Korean warship Cheonan to the United Nations Security Council.
The South also imposed economic sanctions on the North in reaction to the ship attack that killed 46 crew members. The North has denied responsibility for the attack.
General trade and processing trade, in which North Korea imports resources and manufactures them to re-export to the South or another country, plunged 76.45 percent to $165.9 million during the cited period, the ministry said. Both of the trade types have been banned since the May resolution.
Inter-Korean trade has shown an even steeper downtrend since the beginning of this year as pre-paid manufacturing orders, which were exempt from the trade ban, nearly came to an end, according to the ministry.
During the January-May period, cross-border trade stood at $685.2 million, down 21.5 percent from the same five-month period last year, it said.
However, the volume of trade via the Kaesong industrial complex, an inter-Korean joint economic project, rose 24.2 percent to $1.55 billion over the past year, the ministry added.
According to Yonhap:
North Korean leader Kim Jong-il has focused his inspection tours on economic facilities in the first six months of the year, an official said Wednesday, indicating that he wants to improve his country’s faltering economy ahead of next year’s landmark centennial anniversary of his late father’s birth.
Kim made 63 public appearances during January and June, the largest number ever compared to the same period in previous years.
On 28 of the outings, the North Korean leader inspected economic facilities, Unification Ministry spokeswoman Lee Jong-joo told reporters.
Kim “has been increasing activities on economic areas since 2008,” she said.
The North has vowed to improve light industries and agriculture as part of its stated campaign to build a prosperous and powerful nation next year, the centennial of the birth of the country’s late founder, Kim Il-sung, the father of current leader Kim.
The move comes amid doubt about whether the North can make any economic breakthrough by next year.
North Korea has built some 500 houses in its capital of Pyongyang, far short of its goal of building 100,000 houses by next year, according to the National Intelligence Service, Seoul’s spy agency.
…
During the first half of this year the North Korean leader inspected just one military unit and made 13 other military-related public appearances, including art performances, Lee said.
Meanwhile, Kim’s son and heir apparent, Kim Jong-un, accompanied his father on 35 inspection trips, more than 80 percent of which were related to the military.
This year I have actually been keeping a spreadsheet of KJI’s guidance trips. I have a list of 80 public appearances by Kim Jong-il and 47 could be considered economic. It is kind of hard to determine since many facilities are actually dual-use and provide goods for both the civilian and military economies. Also, many “cultural” activities in which Kim Jong-il partakes are actually military-related since he attends them with KPA leaders. Anyway, I have provided the full list of KJI’s public appearances and links to the relevant KCNA stories in this Excel spreadsheet. You can do your own calculations.
Pictured above (Google Earth): Suspected location of Kaeson Middle School (Google Maps)
According to the Philippine Department of Foreign Affairs:
Foreign Affairs Undersecretary for Policy Erlinda F. Basilio turned over to the Pyongyang Kaeson Middle School a Philippine donation of Philippine and ASEAN books, as well as a computer set consisting of one desktop computer, one laptop computer, and one printer last July 1.
Undersecretary Basilio was in Pyongyang with other Philippine officials to take part in scheduled Policy Consultations with the Foreign Ministry of the Democratic People’s Republic of Korea (DPRK).
Established in August 1960 and located in Pyongyang’s Moranbong District, Pyongyang Kaeson Middle School was designated the Philippines-DPRK Friendship School on 23 August 2010, as part of the 10th anniversary of the establishment of diplomatic relations between the two countries. The school is run by nine officials and 79 teachers, and has a student population of 1,454.
The donation was undertaken in cooperation with the Philippine Embassy in Beijing and the PH-Korea Friendship Society, based in Pyongyang.
The Philippines and the DPRK established diplomatic relations on 12 July 2000.
Additional information:
1. The DPRK routiney names schools and farms as “Country X-DPRK Friendship school/farm”. For example, the Songyo Secondary School is also the “DPRK-Mongolia Friendship School”. I have written about “friendship farms” before (here and here).
2. The PH [Philippine]-Korea Friendship Society is an “organization” in the “TaeMun” (대문) portfolio. 대문 is the North Korean abbreviation for 대외문화련락위원회, or in English, the Committee for Cultural Relations with Foreign Countries. I say “organization” because in reality this friendship society, like all of the others, contains only one or two part-time members. TaeMun takes its origins from an imported Soviet office named the All Union Society for Cultural Relations with Foreign Countries (Всесоюзное общество культурных связей с заграницей), known in the West by the acronym VOKS (from the Russian “BOKC”). Historically, its job was to create sympathetic constituencies in foreign countries and provide the North Korean government with an alternate channel of foreign information, but since the Arduous March they have transformed their mission to focus more directly on resource acquisition. There is some tension between TaeMun and the DPRK Foreign Ministry. TaeMun has a web page here.
3. Here are some previous posts on the DPRK-Philippines relationship: here, here, here and here.
