North Korean Economy Watch

Pictured Above (Google Earth): Pyongyang’s May Day Stadium (see in Google Maps here)–home of the Arirang Mass Games

UPDATE 1 (2011-8-15): According to Yonhap:

North Korea’s massive dance and gymnastics extravaganza Arirang has drawn more than 10 million spectators since it was first staged in 2002, Pyongyang’s state media reported Monday.

About 300 Arirang shows have been staged since 2002 and the number of people who watched the performance has topped the 10 million mark, including some 100,000 foreigners, Radio Pyongyang reported.

ORIGINAL POST (2011-8-5): According to the Korea Times:

A growing number of North Korean people are discontent over a widespread rumor that their regime is considering continuing a massive propaganda show for foreign tourists until 2015.

The North Korean regime had said the performance, Arirang, would end next year thus also ending the forced mobilization of hundreds of thousands of citizens as performers.

“Many people in Pyongyang are upset by the rumor that Arirang might be performed until 2015,” Radio Free Asia (RFA) quoted an unidentified Chinese source who recently visited Pyongyang as saying. “They say it’s hard to understand the reason for possibly keeping the show going, which nobody watches.”

The non-profit radio station headquartered in the United States reported that many Pyongyang citizens openly criticized the regime for extending the run of the show indicating a loss in people’s confidence in the regime.

Arirang was first performed in 2000 to mark the 90th birthday of the North Korea’s founder Kim Il-sung, father of the current “Dear Leader” Kim Jong-il.

The current version of the Mass Games, Arirang, aired first in 2002 then it took a break and resumed in 2005 (I know because I was there).  It has run annually since then with only slight modifications each year (CNC, China friendship, etc).

While most coverage of the mass games focuses on the ideological conditioning of the performers and the audience, I believe their true value to  the leadership is much more practical: Arirang training keeps the youth of Pyongyang occupied in group activities for extended periods of time.  There are few physical resources in the DPRK with which to urban children may be occupied during the summer, and idel hands are the devils workshop!

Read the full story here:
N. Koreans unhappy with Arirang show
Korea Times
Park Si-soo
2011-8-5

By Michael Rank

North Korea’s orphanages are full of malnourished children and food shortages in the isolated nation look set to get much worse, said a recent visitor who knows the country well.

Former member of the European Parliament Glyn Ford said shortages of food were affecting “tens of thousands of children, not just orphans, and there may be millions of people under threat of malnutrition” in North Korea.

Ford visited two orphanages in Hamhŭng (Hamheung), the country’s second largest city, where he was shown children who were extremely thin and clearly malnourished, and this had been confirmed by a European Union aid team. Each orphanage had about 300 children.

Ford said he had been encouraged by an EU pledge last month to provide emergency food aid worth 10 million euros ($14.3 million) to more than half a million people at risk of dying from serious malnutrition in North Korea, and that France and Germany had since added to this, making the assistance worth 14-16 million euros ($20-$22.8 million).

But at one of the orphanages he was told they had run out of EU food in June, and the children were suffering as a result.

The European Commission said the objective of the aid package was to lift around 650,000 people, mainly in northern and eastern provinces of the country, out of the hunger zone during the most difficult period of the worst year for food production in recent times. Food assistance will reach children under five who have already been hospitalised with severe acute malnutrition. Children in residential care will also be fed, as well as pregnant and breastfeeding women, hospital patients and the elderly.

An EU mission found in June that state-distributed food rations, upon which two thirds of the North Korean population depend, had been severely cut in recent months from 400g of cereals per person per day in early April to 150g in June: less than 400kCal – a fifth of the daily average nutritional requirement and equivalent to a small bowl of rice.

Ford told NKEW in a telephone interview that while there were clear signs of widespread hunger there was no sign, so far at least, of mass starvation, as happened in the 1990s, when hundreds of thousands, possibly millions, of people died.

He also said that despite the food shortages there were also signs that economic reforms of recent years were having a strong impact, and that in all populated areas roads were lined with rows of private stalls. “These blue plastic stalls are everywhere,” Ford said, adding that they were giving rise to

“kiosk capitalists” who were bucking the traditional, Stalinist economic system.

“This is a society where there are rich North Koreans. There are new cars and expensive consumer items in the shops. There is an economic elite rather than a Party elite,” he added.

Ford also visited the Kaesong (Gaeseong) Industrial Complex just north of the Demilitarised Zone, which he said consisted of large areas of waste land where plans for expansion had come to nought due to increased tension between North and South Korea.

The complex looked “a little bit sad”, he said, and the optimism that prevailed when he last visited it two or three years had dissipated. He said the zone continued to employ about 45,000 North Koreans, little changed from his previous visit, and hopes that it would employ 400,000 by 2015 now seemed highly unrealistic. “It was new then but the shining glow has gone off a bit,” he said, adding, “I noticed the gaps between the factories more than the factories themselves.” (Ford cited a goal of 400,000 workers eventually employed in the zone, but in 2006 a target of 700,000 was mentioned on the BBC’s Newsnight programme).

The complex, in operation since 2004, has around 120 factories, all South Korean-run, processing food and assembling clothing and machinery for export to the South.

Ford also said it seemed likely that the North Korea would open an embassy to the EU in Brussels before long, with a reciprocal EU embassy in Pyongyang. Although Pyongyang and the EU established diplomatic relations in 2001, embassies have not been opened due to French resistance, as France and Estonia are the only EU countries that do not have full diplomatic ties with North Korea.

France has cited human rights violations in its refusal to open an embassy in North Korea, but it has recently softened its line and has announced plans to open a “cooperation bureau” in Pyongyang. Ford said North Korea had long wanted to set up an embassy in Brussels and this now finally seemed likely, possibly by the middle of next year.

Ford, a British Labour Party MEP until 2009, spent about 12 days in North Korea, returning last Saturday. He has almost certainly visited North Korea more often than any other western politician, having been almost 20 times over the last 15-16 years. He was a member of the European Parliament’s Korean Peninsula delegation and in 2008 has published a book, North Korea on the Brink: Struggle for Survival.

Addendum: In January 2009 Ford hosted the first ever delegation from the Workers’ Party of Korea (WPK) delegation to visit Britain, when he pressed them to agree to reopen the dialogue that was  broken off in 2005.

According to Yonhap:

Trade volume between South and North Korea reached US$825 million in the first six months of the year, up 19.5 percent compared to the same period last year, the Unification Ministry said Wednesday.

The cross-border trade volume jumped more than 135 percent compared to the January-June period in 2009, the ministry said.

The figure suggests that a joint industrial complex in the North’s border city of Kaesong, a key source of inter-Korean trade, has not been affected by South Korea’s sanctions imposed on the North for its two deadly attacks on the South last year.

The industrial complex, an achievement of the first-ever inter-Korean summit in Pyongyang in 2000, combines South Korea’s capital and technology with the North’s cheap labor.

More than 47,000 North Koreans work at about 120 South Korean firms operating in the industrial zone to produce clothes, utensils, watches and other goods.

South and North Korea have recently raised the minimum monthly wage for the North Korean workers by 5 percent this year to US$63.814, according to the ministry.

Previous posts on the Kaesong Industrial Zone can be found here.

Read the full story here:
Inter-Korean trade via joint industrial zone increases 19 pct in H1
Yonhap
Kim Kwang-tae
2011-8-3

Pictured above (Google Earth): Korea Computer Center

According to the Associated Press (Via Washington Post):

South Korean police said Thursday they have arrested five people who allegedly collaborated with elite North Korean hackers to steal millions of dollars in points from online gaming sites.

The five, including a Chinese man, were arrested and another nine people were booked without physical detainment after they worked with North Koreans to hack South Korean gaming sites, the Seoul Metropolitan Police Agency said in a statement.

Members of the hacking ring, which included North Korea’s technological elite, worked in China and shared profits after they sold programs that allowed users to rack up points without actual play, police said.

The points were later exchanged for cash through sites where players trade items to be used for their avatars. The police said the ring made about $6 million over the last year and a half.

A police investigator, who declined to be identified because the investigation was under way, said North Korean hackers were asked to join the alleged scheme because they were deemed competent and could help skirt national legal boundaries.

The police pointed to North’s Korea Computer Center as the alleged culprit. Set up in 1990, the center has 1,200 experts developing computer software and hardware for North Korea, the police said.

The National Intelligence Service, South Korea’s spy agency, was heavily involved in the investigation, the police said. Investigators suspect the hackers’ so-called “auto programs” could be used as a conduit for North Korean cyberattacks.

South Korean authorities have accused North Korea of mounting cyberattacks in the past few years. Prosecutors said earlier this year that the North hacked into a major South Korean bank’s system and paralyzed it for days. The North is also accused of mounting attacks on U.S. and South Korean websites. Pyongyang has denied the charges.

The New York Times adds the following details:

In a little less than two years, the police said, the organizers made $6 million. They gave 55 percent of it to the hackers, who forwarded some of it to agents in Pyongyang, the capital of North Korea. “They regularly contacted North Korean agents for close consultations,” Chung Kil-hwan, a senior officer at the police agency’s International Crime Investigation Unit, said during a news briefing.

Mr. Chung said the hackers, all graduates of North Korea’s elite science universities, were dispatched from two places: the state-run Korea Computer Center in Pyongyang and the Korea Neungnado General Trading Company. The company, he said, reports to a shadowy Communist Party agency called Office 39, which gathers foreign hard currency for Mr. Kim through drug trafficking, counterfeiting, arms sales and other illicit activities.

Read the full story here:
South Korean police say they’ve cracked down on ring working with North Korean hackers
Associated Press (Via Washington Post)
2011-8-4

UPDATE 1 (2011-8-3): Construction is underway on the project.  According to the Global Post:

A wall of royal blue sheet metal obscures the North Koreans’ operation from public view. When I approached the entrance, a man in a fedora and a tank top rushed over to slam the gate shut. A furtive look inside revealed fewer than a dozen scrawny workers and a scrub grass field still void of much construction.

Though local reports vary, North Korea will be paid between $10 and $17 million for some sort of monument or museum near the temples. The head of Cambodia’s culture ministry, Khem Sarith, confirmed construction of an “e-museum” but could not confirm the cost.

Nor could he explain why a country that offers its citizens scant electricity should win an “electronic museum” contract, especially after its monuments abroad have drawn both condemnation and ridicule.

The full story is well worth reading here:
North Korea propaganda unit builds monuments abroad
Global Post
Patrick Winn
2011-8-3

ORIGINAL POST (2010-4-27): According to the AFP (Via the Straits Times in Singapore):

A controlversial North Korean construction company is in talks to build an ‘e-museum’ of Cambodia’s famed Angkor temples, a senior official said on Monday.

Mansudae Overseas Projects wants to build a museum close to the temple complex that will feature a computer-generated simulation of the ancient monuments, Cambodian Culture Ministry secretary of state Khem Sarith told AFP.

‘They have plans to build an electronic museum detailing the history of Angkor Wat temples,’ he said, adding he supported the plans after discussions last week with a company delegation and North Korean ambassador Ri In Sok.

Previous work by the North Korean company building major monuments in African countries has been criticised for lack of transparency. Its 49-metre bronze Monument for the African Renaissance has caused outrage in Senegal over the sale of government land to finance the project and the president’s plan to keep 35 per cent of any profit it generates.

Mr Khem Sarith said the so-called e-museum would be ‘good for tourists to view the temples and then select the one that they want to see’. Studies and more discussion were still needed before construction could start on the digitally-rendered overview, Khem Sarith said. He said he would meet again with officials from the company in June to discuss the project further.

The 12th century Angkor Wat temple complex is Cambodia’s main tourist attraction. It is located in the northwestern province of Siem Reap, where the ancient Khmer empire built some 1,000 temples spread over 160 square kilometres.

I have pretty extensive list of Mansudae Overseas Development Group projects from across the planet.  If you are aware of a North Korean built project in your country, please let me know.

(Thanks to a reader)

Read the full story here:
‘e-museum’ of Angkor temples
AFP (Straits Times)
4/26/2010
John Cosgrove

Sebastian Strangio points out a few interesting facts in the Asia Times about DPRK defection through Cambodia:

1. The Cambodian government has quietly worked to facilitate the processing of North Koreans as they move onto South Korea.

According to the US cables, the processing of North Korean arrivals is done in a quiet, ad hoc manner. In an October 2006 dispatch (06PHNOMPENH1927), Om Yentieng, one of Prime Minister Hun Sen’s advisors, was quoted as saying that the processing of North Koreans in Cambodia was “the result of an understanding reached between the prime minister and the South Korean ambassador to Cambodia”.

Secrecy was clearly a priority for the South Koreans. In a July 2007 cable (07PHNOMPENH925) documenting a meeting between South Korean and US officials to discuss the fate of five North Korean refugees in Cambodia who were seeking resettlement in the US, the South Koreans were “preoccupied with conveying their desire that the ROK [Republic of Korea - South Korea] pipeline for North Korean refugees not be publicly revealed”. They also demanded it remain separate from Washington’s own North Korean “refugee processing pipeline”.

A dispatch from April 2008 (08PHNOMPENH316) expressed gratitude to Cambodian officials for “expeditiously processing” the exit permits of two North Korean individuals who departed for the US on April 16. American officials were also “impressed” at Cambodian immigration officials’ “discreet handling” of the cases of another group of North Koreans who departed the previous November.

“During the quiet November departure, no one at the airport noticed the North Koreans’ comings and goings,” it stated. (According to figures released by the Office of Immigration Statistics at the Department of Homeland Security in May, the US resettled more than 100 North Korean refugees between 2006 and 2010 under legislation to help improve human rights conditions in the reclusive country.)

2. Cambodia is no longer a major hub in the underground railraod.  Thailand is now the prefered destination.

It appears, however, that Cambodia has since declined in importance as a conduit for North Korean defectors in favor of a route through Laos into northern Thailand. Pastor Chun Ki-won, head of the Seoul-based refugee aid group Durihana said that Cambodia – along with Mongolia – was one of the few Asian countries willing to aid North Koreans at the start of the 2000s when refugee flows were still relatively low.

Durihana has helped around 900 North Korean defectors reach South Korea over the years. Chun’s first aid mission, which he undertook in July 2001, involved the smuggling of a North Korean woman and her child from northeast China to Phnom Penh via Vietnam. Cambodia increased in importance after December 2001, Chun said, when he was arrested in a Chinese crackdown trying to smuggle a group of refugees across the Mongolian border.

Chun said that due to increased vigilance by Vietnamese authorities, most North Korean refugees now arrive in Southeast Asia via Laos and Thailand. The claim is mirrored in figures from the Thai Immigration Bureau which reveal a 50-fold increase in North Korean arrivals from Laos, from 46 in 2004 – around the time arrivals in Cambodia seem to have begun their decline – to 2,482 in 2010. 870 North Korean refugee arrivals have already been recorded between January and April of this year.

In a 2006 cable from the US consulate in Chiang Mai (06CHIANGMAI79), one official predicted that the increase in North Korean refugee arrivals – then still fairly contained – “may yet be the tip of the iceberg”. “[E]vidence suggests that the stream of refugees is unlikely to decrease, with a network of Christian missionary organizations in Thailand and southern China cooperating to bring in more refugees through Yunnan province, Burma [Myanmar], and Laos and into Thailand’s Chiang Rai province,” the cable stated.

Read the full story here:
All aboard North Korea’s refugee railroad
Asia Times
Sebastian Strangio
2011-8-3

Pictured above (Daily NK): A DPRK ID card from 2004.  Click image for larger version.

UPDATE 2 (2011-8-3): According tothe Daily NK:

North Korea is apparently gearing up to make one of its regular changes to the nationwide system of ID cards. According to inside sources, the authorities have been gathering in the current ID cards from citizens, a process that has been completed in some areas including parts of Yangkang Province.

Notably, the new ID cards are set to include information on an individual’s job. For more than ten years, North Korea has kept watch on the activities of the people via their places of work, meaning that the inclusion of a person’s job on his or her ID card implies modifications to the existing system of controls.

A Pyongyang source explained, “People’s unit chairpersons have been taking IDs from the people and presenting them to the People’s Safety Ministry (PSM) since earlier this year. The rumor is that a new card clearly recording a person’s job, family and marital relations will come out, just like the old card.”

Another source from northerly Yangkang Province confirmed the story, saying, “We already gave in all our ID cards,” and adding, “I just heard from the PSM agent in charge of citizen registration that the new ID cards would be exactly the same as the old style ID card, including family, marriage and job.”

Understandably, having to give in existing ID cards has made life difficult for those people needing permission to travel, since every time they want to go anywhere they have to visit the local People’s Safety Ministry office to retrieve their card and explain the situation in order to get a permit.

Similarly, people had to retrieve their cards in order to vote in local elections on the 24th of last month, before returning them to the security authorities.

All the sources The Daily NK spoke to about the changeover regard the addition of job information as the most interesting aspect of the new card. As the Pyongyang source explained, the current ID cards do not include job information, meaning that the authorities “don’t know what work we are doing, and so are unable to control us properly. As a result of this, talk about the release of the new card is doing the rounds.”

One Chinese-Korean who regularly visits China for trade agreed, adding, “The absence of jobs from the current ID makes management of citizens difficult, so word is that they will completely return to the old style cards.”

Until 1999, North Korea included all the information now being mooted on ID cards in the shape of a small passport shaped book; however, the authorities then moved to a single card-based system featuring just name, birth date, address, marital status, an image and an ID number.

In North Korea, everyone over the age of 16 has an ID card, a system that began on September 1st, 1946. They have been regularly changed as part of official record keeping for the purposes of control. Previous known changeovers occurred in 1953, 1958, 1964, 1974, 1984, 1999, and 2004.

UPDATE 1 (2010-5-12): According to the Daily NK:

A source from Pyongyang reports that a new national identification card will begin to be issued on May 17th in the capital, and thereafter the project to replace old cards and issue the new version is supposed to begin in the provinces.

This project is the culmination of a project begun in 2004, when the North Korean authorities tried to computerize citizen databases and issue a new form of ID card but were apparently not able to complete the project due to a lack of funds. Now, they have resumed the project for those who did not receive the new ID card in 2004 and those who turned 17, the legal age for receiving the card, between 2004 and 2010.

The source explained during a phone call with a Daily NK journalist today, “Since early May, people’s unit chairpersons have been calling door to door to let residents know about the new ID card and check the record of who lives where.”

He added, “Those who are away from their recorded locations for any reason have been instructed to return and receive the new ID cards.”

The new ID card is plastic, and contains a picture and personal information such as name, gender, race, birthplace and residence. Alongside the process of issuing the new ID card, computerization of resident records will also resume. Therefore, families of defectors and people in China temporarily are about to get in hot water.

The source said, “This must be a risk to households which are found to contain missing persons or absent members. Some of those whose family members already left for China or elsewhere will doubtless go to local People’s Safety Ministry offices to explain their situation and offer bribes.”

In the case of defector families, if they have not previously reported missing family members, they will be treated as suspicious, and be placed under increased monitoring. However, the families of those who are visiting China legally with permits will also have problems.

The basic permit issued by the authorities is generally like a single entry visa, valid for at least thirty days plus a ten-day extension. However, most visitors tend to stay in China to earn money for up to a year. After returning home, they have to offer bribes to the National Security Agency (NSA), which polices the border, to avoid punishment.

However, if the situation is revealed during the new ID card project, it will be a bigger issue which might not be solved with a bribe for the local NSA. Therefore, such people face a serious worry.

In North Korea, the People’s Safety Ministry is in charge of management and control of the residents’ database. In the mid-1990s, when the precursor to the Ministry, the People’s Safety Agency, was registering all residents’ identifications, the Shimhwajo Case, one of the biggest purges in North Korean history, took place.

Read the full story here:
New ID Card Project Ready for Launch
Daily NK
Yoo Gwan Hee
2010-5-12

ORIGINAL POST (2010-3-5): According to the Daily NK:

A rumor that the North Korean authorities are working towards issuing a new form of identification card to all citizens is circulating, according to sources inside North Korea.

This rumor has been reported from some areas of Shinuiju and Yangkang Province. However, there has been no word from Pyongyang or any other provinces.

To date, North Korea has tended to issue new ID cards once every 10-15 years. However, the last time was in 2004, which has led some to suggest that there might be additional reasons for the changes this time besides standard administrative requirements.

Indeed, this may have been borne out by a Daily NK source from Shinuiju, who cited a cadre from a neighborhood government office as saying to him, “We decided to change the form of the ID card because spies from the South Korean intelligence agency (National Intelligence Service) are trying to infiltrate our society by copying our cards,” leading another source to comment, “We are so busy and the situation is so terrible, so why must we try to switch it?”

Free North Korea Broadcasting (Free NK) has released the same news, citing a source from Daehongdan in Yangkang Province. “The authorities are reorganizing and confirming all identification records,” the source explained to Free NK, “We presume that once the process is complete; they will change the ID card system.”

One defector familiar with the system added a further rationale for the possible move. “The reorganization is designed to confirm whether residency records are correct by making citizens re-register their residency in their locality,” he said, “This can also be a measure used to identify defectors and vagabonds.”

There is a market for North Korean ID cards in China.  Find out why here.

Read the full story here:
North Korea Changes ID Cards
Daily NK
2010-3-5

Another North Korean is suing for an inheritance claim in South Korean courts.  According to the Joong Ang Ilbo:

A North Korean man is seeking to inherit part of the assets left behind by his father who died in the South, government and court officials here said yesterday, just weeks after a similar case ended in assets being split among family members across the two Koreas.

The man in his 50s is currently preparing to file a lawsuit with the help of an agent in China and a lawyer in South Korea, the officials said on condition of anonymity. The man’s late father reportedly left behind an inheritance worth millions of dollars.

The alleged case comes on the heels of a similar inheritance dispute that ended earlier this month after a Seoul court mediated the split of assets worth 10 billion won ($9.35 million) between South and North Korean family members of a North Korean man who died here in 1987. It was the first time North Koreans were awarded assets left by a relative in the South.

The lawyer in charge of the new case visited South Korean ministries last month to discuss the possibility of transferring assets out of the country, according to a government official.

The large amount of assets involved in the recent inheritance lawsuits has raised suspicions of the North Korean regime’s involvement, the official added.

“Judging from the recent cases, it seems like the North Koreans are filing lawsuits with detailed knowledge of their parents’ inheritance. Wouldn’t that be difficult without the [North Korean] government’s help?” the official said.

An earlier report indicated that a new South Korean law is supposed to go into effect in January 2012 which prevents inheritance claims from being sent to the DPRK without the permission of the Seoul government.  This would mean that if this case can be resolved quickly (slim chance) the funds might find their way back to the DPRK.

After January 2012, should North Koreans continue to file these cases, we can expect that Pyongyang would put them on the table in any kind of inter-Korean negotiations.  This could potentially make a few North Koreans opposed to reconciliation between the two governments since it would imply the South Koreans would release the funds to the North Korean government rather than holding them in escrow for the individuals themselves.

Read the full story here:
N. Korean man sues to get father’s inheritance
Joong Ang Ilbo
2011-8-1