Archive for February, 2012

US – DPRK “leap day deal” announced

Wednesday, February 29th, 2012

UPDATE 7 (2012-4-18): The IAEA now states that it is not likely to send an inspection team to the DPRK. According to the Voice of America:

The International Atomic Energy Agency says it is now unlikely to send a delegation to North Korea, after Pyongyang stated it is no longer bound by an agreement with the United States not to test missiles and nuclear devices.

Spokeswoman Gill Tudor made the announcement late Tuesday, ending hopes for the visit for which IAEA officials began negotiating with North Korea in March.

Earlier in the day, Pyongyang said it was breaking off a bilateral agreement to halt its nuclear activities and allow IAEA inspectors to enter the country after the U.S. suspended much needed food aid. Washington said North Korea did not keep its end of the bargain when it carried out its failed missile launch on Friday.

North Korea’s Foreign Ministry vowed to continue trying to fire a long-range rocket into space to place what it said was a weather satellite into orbit. It also vowed unspecified retaliation now that the agreement with the U.S. is no longer in place.

State Department spokesperson Mark Toner said Tuesday that Pyongyang’s statement was “not surprising, given their recent behavior.” He said he could not predict whether North Korea is laying the ground work for a future nuclear test, as some fear.

UPDATE 6 (2012-4-17): North Korea announced that it has scrapped the “Leap day deal“. According to KCNA (2012-4-17):

Thirdly, as the U.S. violated the Feb. 29 DPRK-U.S. agreement through its undisguised hostile acts, we will no longer be bound to it.

UPDATE 5 (2012-4-17): Following the launch of the Unha-3 rocket in April of 2012, the US has scrapped the “Leap Day Deal” to provide food aid for a suspension of the DPRK’s nuclear program. According to the Los Angeles Times:

The Obama administration announced shortly after the launch Friday that it was scrapping a Feb. 29 agreement to send 240,000 metric tons of food to North Korea, a promise made as inducement for Pyongyang to abide by previous U.N. resolutions and suspend its nuclear programs.

UPDATE 4 (2012-3-31): The DPRK attacks the US decision to suspend food assistance. According to Bloomberg:

North Korea criticized a U.S. announcement that it would suspend food aid if the Asian country carries out a planned “peaceful” satellite launch, calling it an overreaction “beyond the limit.”

Suspending food aid “would be a regrettable act” scrapping the entire Feb. 29 agreement between the two nations, North Korea’s state-run Korean Central News Agency said, quoting a foreign ministry spokesman it didn’t name.

North Korea drew rebukes from nations including the U.S. earlier this month when it revealed plans to launch an “earth observation satellite” in April to mark the 100th anniversary of the birth of state founder Kim Il Sung.

U.S. President Barack Obama, who visited Seoul for a Nuclear Security Summit this week, warned North Korea that its plan to fire a long-range rocket undermined prospects for future negotiations, while South Korea’s military said Kim Jong Un’s forces had moved the missile to a launch site.

North Korea’s announcement of a mid-April launch will make it difficult to move forward with the aid deal and broader efforts to get the regime back to negotiations on its nuclear weapons program, Obama said.

UPDATE 3 (2012-3-28): Food aid deal will be suspended if DPRK goes through with April rocket launch.  According to the American Forces Press Service:

Concerns that North Korea would resume provocative behavior on the international stage in 2012 have proven true, so the United States has suspended plans to provide nutrition aid to the impoverished nation, senior defense officials told Congress today.

“Our suspicions … were confirmed when North Korea announced on March 16 that it plans to conduct a missile launch between April 12th and 16,” Peter R. Lavoy, acting assistant secretary of defense for Asian and Pacific security affairs, told members of the House Armed Services Committee. “This grand launch is highly provocative, because it manifests North Korea’s desire to test and expand its long-range missile capability.”

Army Gen. James D. Thurman, commander of U.S. Forces Korea, testified alongside Lavoy in a hearing examining the security situation on the Korean Peninsula.

After a series of U.S.-North Korean discussions in late February, the North Korean government agreed to implement a moratorium on long-range missile launches — then announced plans for the launch just two weeks later, Lavoy explained.

The United States had agreed during the February talks to provide nutritional aid to North Korea. The World Food Program in November 2011 recommended targeted high-nutrition aid as critical to 3 million North Koreans most at risk for starvation.

Lavoy and Thurman both confirmed the United States will not deliver the planned nutrition aid.

“During those discussions, the United States made it very clear that a satellite launch would be a deal-breaker,” Lavoy told the panel.

Both men said U.S. officials have worked to “delink” humanitarian aid and political concerns, but defended the decision to suspend nutritional aid.

“The fact that North Korea so brazenly violated commitments that it just so recently agreed to … indicates that they’re not reliable,” Lavoy said. “We cannot expect them to meet … the commitments that they’ve agreed to that are associated with the provision of nutritional assistance to the needy population in their country.

“It’s regrettable that the food aid is not moving forward,” he added. “The North Korean population really needs nutritional assistance. And we’re prepared to provide that to North Korea.”

Thurman said officials are working closely with allies and other partners in the region to try to discourage North Korea from launching the missile. Meanwhile, the general added, “we have been forced to suspend our activities to provide nutritional assistance to North Korea.”

Lavoy said the threatened launch would be in direct violation of U.N. Security Council resolutions 1718 and 1874, which prohibit North Korea from conducting any launches that use ballistic missile technology.

The launch would involve a North Korean-made Kwangmyongsong-3 polar-orbiting Earth observation satellite to mark the 100th birthday of late President Kim Il Sung, a spokesman for the Korean Committee for Space Technology said in a statement.

The late president’s birthday is April 15.

Lavoy said North Korea’s authoritarian government, founded by Kim Il Sung and subsequently led by Kim Jong Il and Kim Jong Un — his son and grandson, respectively — seeks to provoke other nations militarily as a means of demonstrating power to its people.

“Political successions are extraordinarily difficult when you don’t have a representative government, which is the case there, of course,” he noted. Kim Jong Un took power after his father’s death in December.

“What we’re seeing now and what we anticipate is provocative behavior, because, unfortunately, this seems to be the only way that the North Korean regime can try to demonstrate its bona fides to a population that is suffering terribly,” Lavoy added.

Thurman said North Korea’s “military first” policy diverts national resources away from food and essential services to the people.

“They maintain the fourth-largest conventional military force in the world, the world’s largest special operating force, and significant long-range artillery capabilities,” the general said. “Over 70 percent of their combat powers are arrayed within 90 miles of the demilitarized zone.”

South Korea, home to some 28,500 forward-based U.S. troops, is “a vibrant democracy, economic success and global security partner, currently serving beside us in Afghanistan and off the Horn of Africa,” Thurman said.

“In stark contrast, one of the world’s poorest, most closed and
most militarized countries, North Korea, lies less than 20 miles from the northern districts of Seoul, a city of over 24 million people,” he added.

The United States and South Korea have for 60 years maintained a close partnership aimed at deterring North Korean aggression and maintaining stability on the peninsula, Thurman noted.

“We are prepared to defend the peninsula and can do that,” the general said. “And we can repel any type of attack should the North Koreans decide to do that.”

UPDATE 2 (2012-3-23): North Korea has announced it will conduct another “Satellite” Launch (aka ICBM test).  Jeffrey Lewis writes about the unwinding of the “Leap-day deal” at Arms Control Wonk.

UPDATE 1 (2012-3-15):  The Choson Ilbo reports that the DPRK has agreed to allow more monitoring of food aid distribution:

The North apparently agreed during the latest meeting with U.S. officials in Beijing to increase the number of monitors to 70. Their task will be to check that the food reaches civilians who need it and is not diverted to the military. A diplomatic source in Seoul said the U.S. has decided to send monitors who are fluent in Korean to the North when it takes delivery of 20,000 tons of food aid per month over a year, as agreed.

Robert King, the U.S. special envoy for North Korean human rights, met on March 7 and 8 with An Myong-hun of the North Korean Foreign Ministry and agreed the terms, the source said.

North Korea accepted most U.S. demands, the source added. Washington apparently insisted that Pyongyang must accept U.S. requests to dispatch monitors to a particular regions at 24 hours’ notice.

After the talks, King said he was “very satisfied” with the results. The U.S. will brief the World Food Programme in Rome on the outcome on Thursday. The WFP then handles the provision of food aid along with five other aid groups based in the U.S. The aid, which takes the form of nutritional supplements rather than rice, will go to North Korean children between the ages of five and seven as well as pregnant women.

ORIGINAL POST (2012-2-29): According to the Associated Press (Via Washingotn Post):

The United States says North Korea has agreed to suspend uranium enrichment and agree to a moratorium on nuclear and long-range missile tests.

State Department spokeswoman Victoria Nuland also said Wednesday the North has agreed to allow International Atomic Energy Inspectors to verify and monitor the moratorium on uranium enrichment and confirm disablement of its nuclear reactor at Yongbyon.

Her statement says the U.S. will meet with North Korea to finalize details for a proposed package of 240,000 metric tons of food aid.

The Washington Post provides additional information:

The agreement is the result of talks between U.S. and North Korean negotiators late last week in Beijing — the first such negotiations since the death of North Korean leader Kim Jong Il and the elevation of his son Kim Jong Eun.

While U.S. leaders have insisted that the food aid for the impoverished country and nuclear disarmament are separate issues, North Korean officials have tied the two in past negotiation

Here is the official statement by the State Department:

U.S.-DPRK Bilateral Discussions

Press Statement
Victoria Nuland
Department Spokesperson, Office of the Spokesperson
Washington, DC
February 29, 2012

A U.S. delegation has just returned from Beijing following a third exploratory round of U.S.-DPRK bilateral talks. To improve the atmosphere for dialogue and demonstrate its commitment to denuclearization, the DPRK has agreed to implement a moratorium on long-range missile launches, nuclear tests and nuclear activities at Yongbyon, including uranium enrichment activities. The DPRK has also agreed to the return of IAEA inspectors to verify and monitor the moratorium on uranium enrichment activities at Yongbyon and confirm the disablement of the 5-MW reactor and associated facilities.

The United States still has profound concerns regarding North Korean behavior across a wide range of areas, but today’s announcement reflects important, if limited, progress in addressing some of these. We have agreed to meet with the DPRK to finalize administrative details necessary to move forward with our proposed package of 240,000 metric tons of nutritional assistance along with the intensive monitoring required for the delivery of such assistance.

The following points flow from the February 23-24 discussions in Beijing:

The United States reaffirms that it does not have hostile intent toward the DPRK and is prepared to take steps to improve our bilateral relationship in the spirit of mutual respect for sovereignty and equality.

The United States reaffirms its commitment to the September 19, 2005 Joint Statement.

The United States recognizes the 1953 Armistice Agreement as the cornerstone of peace and stability on the Korean Peninsula.

U.S. and DPRK nutritional assistance teams will meet in the immediate future to finalize administrative details on a targeted U.S. program consisting of an initial 240,000 metric tons of nutritional assistance with the prospect of additional assistance based on continued need.

The United States is prepared to take steps to increase people-to-people exchanges, including in the areas of culture, education, and sports.

U.S. sanctions against the DPRK are not targeted against the livelihood of the DPRK people.

Here is the statement in KCNA:

DPRK Foreign Ministry Spokesman on Result of DPRK-U.S. Talks

Pyongyang, February 29 (KCNA) — The spokesman of the Ministry of Foreign Affairs of the Democratic People’s Republic of Korea on Wednesday gave the following answer as regards questions raised by KCNA concerning the result of the latest DPRK-U.S. high-level talks:

Delegations of the Democratic People’s Republic of Korea (DPRK) and the United States of America (U.S.) met in Beijing, China on 23rd and 24th of February for the third round of the high-level talks between the DPRK and the U.S.

Present at the talks were the delegation of the DPRK headed by Kim Kye Gwan, the First Vice Minister of Foreign Affairs, and the delegation of the U.S. headed by Glyn Davies, the Special Representative of the State Department for the DPRK Policy.

The talks, continuation of the two previous DPRK-U.S. high-level talks held respectively in July and October, 2011, offered a venue for sincere and in-depth discussion of issues concerning the measures aimed at building confidence for the improvement of relations between the DPRK and the U.S. as well as issues related with ensuring peace and stability on the Korean Peninsula and resumption of the six-party talks.

Both the DPRK and the U.S. reaffirmed their commitments to the September 19 Joint Statement and recognized that the 1953 Armistice Agreement is the cornerstone of peace and stability on the Korean Peninsula until the conclusion of a peace treaty.

Both the DPRK and the U.S. agreed to make a number of simultaneous moves aimed at building confidence as part of the efforts to improve the relations between the DPRK and the U.S.

The U.S. reaffirmed that it no longer has hostile intent toward the DPRK and that it is prepared to take steps to improve the bilateral relations in the spirit of mutual respect for sovereignty and equality.

The U.S. also agreed to take steps to increase people-to-people exchanges, including in the areas of culture, education, and sports.

The U.S. promised to offer 240,000 metric tons of nutritional assistance with the prospect of additional food assistance, for which both the DPRK and the U.S. would finalize the administrative details in the immediate future.

The U.S. made it clear that sanctions against the DPRK are not targeting the civilian sector, including the livelihood of people.

Once the six-party talks are resumed, priority will be given to the discussion of issues concerning the lifting of sanctions on the DPRK and provision of light water reactors.

Both the DPRK and the U.S. affirmed that it is in mutual interest to ensure peace and stability on the Korean Peninsula, improve the relations between the DPRK and the U.S., and push ahead with the denuclearization through dialogue and negotiations.

Both sides agreed to continue the talks.

The DPRK, upon request by the U.S. and with a view to maintaining positive atmosphere for the DPRK-U.S. high-level talks, agreed to a moratorium on nuclear tests, long-range missile launches, and uranium enrichment activity at Nyongbyon and allow the IAEA to monitor the moratorium on uranium enrichment while productive dialogues continue.

Evan Ramstad analyses the differences be3tween the DPRK and US State Department statements in this Wall Street Journal article.

The New York Times offers some caveats:

North Korea has agreed in the past to halt its nuclear program only to back out, demanding more concessions or accusing the United States of reneging on its obligations. And the statement Tuesday from the North’s official Korean Central News Agency appeared to give the country’s leaders wiggle room again this time, saying that Pyongyang would carry out the agreement “as long as talks proceed fruitfully.”

Still, North Korea’s agreement to allow inspectors from the International Atomic Energy Agency to return to the country appeared to be a significant concession. After years of negotiations, North Korea expelled inspectors and went on to test nuclear devices in 2006 and 2009. American intelligence officials believe the country has enough fuel already for six to eight weapons.

If the North lives up to its agreement to stop uranium enrichment, it could help ease some anxieties in Washington over the program at a time when the administration, in an election year, is consumed with halting Iran’s nuclear program before Israel decides to stage an attack.

For the relatively young and inexperienced Mr. Kim, the agreement could be crucial to solidifying his hold on power and the backing of the powerful military, analysts in South Korea said. He needs to show in the early months of his rule that he is improving people’s lives after years of food shortages and a devastating famine. Bringing in 240,000 metric tons of food aid from the United States will surely help.

CNN reports (sorry, no link) that the details of this agreement were largely negotiated before Kim Jong-il passed away.

Additional Information:

1. Here are Scott Snyder’s thoughts on the agreement. Here are Joel Wit’s comments. Here are Gordon Flake’s.

2. Here is coverage in the Wall Street Journal, Los Angeles Times, The Guardian, and Stratfor.

3. Joshua Stanton (OFK) posted a transcript of the entire State Department briefing. Here is the State Department Briefing transcript from State.

4. I have kept a collection of significant news and satellite imagery of the DPRK’s nuclear facilities.  You can see the information here.

5. The DPRK lobbied very hard for food aid from the international community throughout 2011.

6. Here is a list of US – DPRK engagement in 2011Fox News also reports that an American ship has arrived in North Korea to assist in the search for the remains of Korean War MIAs.

7. More on the talks that preceded the announcement of the deal here

Read the full stories here:
U.S. says N. Korea has agreed to suspend uranium enrichment, moratorium on nuclear, missile tests
Associated Press (Via Washingotn Post)

N. Korea agrees to suspend uranium enrichment, nuclear tests
Washington Post
William Wan


Kangnam moved into Pyongyang

Wednesday, February 29th, 2012

Pictured Above (Yonhap): A comparison of atlas photos showing the inclusion of Kangnam in Pyongyang.

According to Yonhap:

North Korea has incorporated a key farming county into Pyongyang in what could be an attempt to provide a stable food supply for loyal residents in the capital.

The North had reduced the size of Pyongyang by relinquishing most of the capital’s south and a portion of its west to neighboring North Hwanghae Province, South Korea’s Unification Ministry said last year.

The move reduced the city’s population by about 500,000 to 2.5 million.

However, the North has now incorporated Kangnam County in North Hwanghae Province back into Pyongyang, according to a 2011 almanac map from North Korea, a copy of which was obtained by Yonhap News Agency.

“The move appears to be aimed at using Kangnam County as a supplier of food to Pyongyang residents as the rural area is a major agricultural producer,” said Kwon Tae-jin, an expert on North Korea at the Korea Rural Economic Institute in Seoul.

The North has relied on international handouts since the late 1990s when it suffered a massive famine that was estimated to have killed 2 million people.

Pyongyang is home to the ruling elite that governs the country through rations and a military-first policy. It is located in the southwest region of the country, which is believed to have a total population of 24 million.

Here is my post from last year about the removal of Kangnam, Junghwa, Sangwon, and Sungho from Pyongyang.

Read the full story here:
N. Korea incorporates key farming county into Pyongyang


US – DPRK joint Korean War MIA search

Tuesday, February 28th, 2012

UPDATE 1 (2012-3-20): The DPRK’s announced launch of the Kwangmyongsong-3  has brought an end to the program. According to the Associated Press:

The United States said Wednesday it is suspending efforts to recover remains of thousands of fallen service members in North Korea, the latest sign that a recent thaw in relations is over.

The U.S. was in the process of resuming the hunt for remains missing from the 1950-53 Korean War that had been on hold since 2005, the only form of cooperation between the two militaries.

But North Korea announced plans last week to launch a satellite into space by rocket — a step the U.S. says would violate a U.N. ban. That knocked back recent progress in negotiations on the North’s nuclear program, and has jeopardized a Feb. 29 agreement in which the U.S. was to provide food aid in exchange for a nuclear freeze.

The U.S. left open the door to resuming remains recovery if the situation improves.

North Korea says the rocket launch, intended to mark the centennial of the nation’s founder in mid-April, has peaceful aims. The U.S. and other countries suspect it would serve to test capabilities of a long-range missile. Pyongyang has also threatened a “sacred war” against rival South Korea, in response to recent U.S.-South Korean military drills.

The agreement on resuming the troop recovery operations was made last October, and the program was beginning this month. The U.S. had already sent equipment by ship, and an advance team had been due in the country this month. North Korea would have received millions in compensation this year for its support of the operations.

Pentagon press secretary George Little told reporters that North Korea has not acted appropriately in recent days and weeks and “it’s important for them to return to the standards of behavior that the international community has called for.”

“When there are suggestions that they might launch ballistic missiles, when they make bellicose statements about South Korea, and engage in actions that could be construed as provocative, we think that it’s not the right time to undertake this effort,” he said.

He said at some point the U.S. hopes to restart the recovery effort.

More than 7,960 U.S. servicemen are unaccounted for from the Korean War, which ended without a formal peace treaty, leaving the adversaries in a state of war. Some 5,300 of the missing are believed to be in North Korea.

Pentagon spokeswoman Tara Rigler said North Korea had refused to take agreed steps, including permitting the U.S. advance team into the country, and had politicized the remains recovery operations by linking them to the recent U.S.-South Korean military exercises.

She said no U.S. personnel are currently on the ground in North Korea.

The announcement is the latest setback for family members of veterans of the conflict who have lobbied hard for a resumption of the recovery operations. Of the nearly 8,000 missing service members, the remains of just 192 have been recovered and identified so far, based on remains handed over by North Korea or retrieved between 1996-2005.

“It’s heartbreaking to have such a humanitarian, positive mission be continually caught up in political storms,” said Richard Downes, who leads a volunteer group representing families of Korean War MIAs.

See also this story in the Washington Post and this in the Herald Tribune.

ORIGINAL POST (2012-2-28): According to Fox News:

The U.S. military says an American ship has arrived in North Korea to support the hunt for the remains of soldiers missing-in-action from the Korean War.

Chief of the U.S. Pacific Command, Adm. Robert Willard, said Tuesday the ship is offloading equipment at Nampho, a port city west of the capital, Pyongyang.

The U.S. and North Korea agreed in October to restart the search for thousands of American service members, a sign of easing tensions between the wartime enemies.

The program is due to begin formally on March 1, with a U.S. advance team arriving in Pyongyang later in the month.

The search was suspended in 2005 during tensions over North Korea’s nuclear program. The U.S. cited misgivings about the security of its personnel.

Read more about the origins of this project here.

Read the full story here:
US ship in North Korea to prepare for remains hunt
Fox News


DPRK issuing exit permits for food importers

Tuesday, February 28th, 2012

According to the Daily NK:

The North Korean authorities are expediting the issuance of exit permits for people wishing to visit relatives in China but who agree to return to the country with one ton of food within 40 days. A considerable number of people have obtained permits on this basis in the last week, according to a source who spoke with Daily NK yesterday.

The source, from North Hamkyung Province, told Daily NK, “At the start of last week, my people’s unit head advised us, ‘Anyone able to return to the country with a ton of rice before April 5th should apply for a short-term exit permit to the National Security Agency now.’”

The source added, “More than 20 people per day are crossing over into China via Namyang Customs House after getting prior approval this way in Chongjin, Myongchon and Kilju. Others are finding lodgings in Onsung to wait their turn.”

The permit issuance policy is being implemented nationwide, according to information received by Daily NK. Many people are said to be departing via customs facilities both in Hyesan and further west in Shinuiju under the same deal.

Provincial branches of the Party are keen to issue the permits because they are under pressure to provide special food distribution for the 100th anniversary of Kim Il Sung’s birthday on April 15th, a responsibility Pyongyang is said to have passed on to the provinces in its entirety.

According to the source, the NSA’s provincial anti-espionage head has been telling travelers attending a briefing at the border control office there that their trips “have been made possible by the compassion of Kim Jong Eun,” and threatening that anybody minded to overstay their permit or who is unable to meet their food quota upon their return will be barred from leaving the country indefinitely.

Usually, exit permits are granted on the following basis: ▲ a maximum of 5 degrees of separation between inviter and applicant; ▲ a maximum stay of 3 months; ▲ a minimum of one year between permits. However, this time the authorities are reportedly allowing travelers who have already visited China within the last year to reapply.

Though rare, the policy shift is not unprecedented. For example, a similar pact with would-be permit recipients was offered by the authorities immediately after Kim Jong Il’s trip to China in May, 2011.

Such a loosening of border controls comes with a number of side-effects, not least that it brings down prices in the jangmadang, offering a valuable boost to individual purchasing power.

As such, kilo of decent rice was selling for 3,200 North Korean won early last week in Chongjin, a source from the city told Daily NK yesterday, but as of Monday this had fallen to 3,000 won, with 1 Chinese Yuan dropping from 605 to 600 North Korean Won.

“Given the situation, ordinary people are happy that the price of rice has fallen,” the source commented. However, he added, there is a high degree of skepticism in the market about how many of the travelers will actually return when the time comes.

Read the full story here:
NK Trading Exit Permits for Rice
Daily NK
Lee Seok Young


DPRK per capita GDP grows 4.7% in 2011

Sunday, February 26th, 2012

UPDATE 2: Here is a translation of part of the paper:

2011 North Korea GDP per Capita 720 dollars

HRI Speculation Model of North Korea GDP: Hyndai Research Institute developed ‘HRI North Korea GDP Speculation Model’ to speculate North Korea’s GDP per Capita using the ‘Child Mortality Rate Report’ of 2011 August. In order to enhance the explicability of the original ‘HRI North Korea GDP Speculation Model’, in this report, the model has been modified adding annual agricultural production rate into consideration.

Speculating 2011 North Korea‘s GDP per Capita: According to the calculations of the modified ‘HRI North Korea GDP speculation model’, North Korea’s GDP per capita of 2011 was 720 dollars, 32 dollars increased from the previous year’s 688 dollars. North Korea’s GDP per capita is less than 3% that of South Korea which is $23,749. Even compared to other Communist nations such as China($5,194), Laos($1,204), Vietnam(1,362), North Korea’s economy is significantly deficient. Nations holding similar average income with North Korea is Bangladesh($690) and Nepal($644) of Asia, and Zimbabwe($735) of Africa.

Background on 2011 North Korean Economy’s growth

Domestic background: North Korean Economy is analyzed to have experienced a concentrated growth due to government’s planning and showering of its resources. According to FAO(Food and Agriculture Organization), North Korea’s agricultural production total has increased 7.2% from 4420 thousand tons in 2011 to 4740 thousand tons in 2012. Also, North Korean government focused their resources on food preservation, building 100 thousand households, and resolving electricity problem.

International Background: Internationally, DPRK-China trade expansion, Gawesung Factory, International Society’s aids were the three main backgrounds. DPRK-China trade total experienced a steep increase of 62.4% from 34.7 billion dollars in 2010 to 56.3 billion dollars in 2011. Gawesung Factory’s trade was 17 billon dollars which is a 17.7 % increase from 2010’s 14.4 billion dollars. International Society’s aid towards DPRK spiked the highest of 9, 7710 thousand dollars since 2007, which is more than three times that of 2, 1780 dollars from the pervious year.

UPDATE 1 (2012-3-13): Marcus Noland weighs in on the report’s findings here.

ORIGINAL POST (2012-2-26): According to Yonhap:

North Korea’s per-capita gross domestic product probably expanded more than 4 percent in 2011 from a year earlier on an improved grain harvest and intensified state efforts, a report said Sunday.

The North’s per-capita GDP for last year is estimated at US$720, up 4.7 percent from $688 a year earlier, Hyundai Research Institute said in the report based on the communist country’s infant mortality rate and grain production.

The North’s 2011 per-capita GDP amounts to a mere 3 percent of that for archrival South Korea.

“The increase stemmed from better grain crops,” the think tank said. “Pyongyang also stepped up its efforts to meet its goal of building a strong and prosperous nation in 2012.”

According to data by the U.N. Food and Agriculture Organization, North Korea’s grain production reached 4.74 million tons last year, up 7.2 percent from a year earlier.

Other positive factors were North Korea’s expanded trade with China, its staunchest ally and largest benefactor, the existence of an inter-Korean industrial complex in the border city of Kaesong and aid from the international community, according to the report.

Pyongyang’s trade with China surged 62.4 percent on-year to $5.63 billion last year, the report said.

I have been unable to locate an original copy of this report.  If you have a copy please send it to me.

Read the full story here:
N. Korea’s per-capita GDP grows 4.7 pct in 2011: report


Private US aid to the DPRK

Friday, February 24th, 2012

According to the Baptist Standard:

A Korean Texas Baptist with a 17-year track record of relief ministry in North Korea made two trips there in recent months to deliver 50 tons of flour and 1,100 pairs of warm socks and other supplies for orphans.

Yoo Jong Yoon’s most-recent trip to North Korea ended just two weeks before the death of the nation’s supreme leader, Kim Jong-il.

Yoon—former Korean mission field consultant with the Cooperative Baptist Fellowship —delivered $28,000 worth of flour and supplies provided by CBF, Texas Baptist Men , the Korean American Sharing Movement of Dallas and several individual donors.

At their recent board of directors meeting and annual convention, TBM agreed to provide another $10,000 in 2012 to meet needs in light of North Korea’s longstanding food shortage. TBM’s ongoing involvement in hunger relief, humanitarian aid and development projects in North Korea dates back to the mid-1990s.

Yoon anticipates delivering 60 tons of corn in May and another 60 tons in September. One ton of corn provides for about 2,200 meals, he explained.

Yoon also secured memoranda of understanding from the government that could open the doors to providing support for an English-language teaching institute and medicine, supplies and equipment for a hospital in Wonsan City in Kwangwon Province.

Read the full quote here:
Baptist food deliveries continue in North Korea
Baptist Standard


DPRK’s Air Koryo to open Pyongyang, Harbin charter flight

Friday, February 24th, 2012

According to Xinhua:

Air Koryo of the Democratic People’s Republic of Korea will launch a charter flight route between Pyongyang and the northeastern Chinese city of Harbin on April 27, local Chinese airport authorities said Friday.

The airline will offer a round-trip flight between the cities every Monday and Friday, a spokesman with the Heilongjiang Provincial Airport Group Management Co. Ltd. said.

The new service will meet the travel demands of nationals from both countries, the spokesman said.

Harbin, known as China’s “Ice City,” is the capital of Heilongjiang Province, which borders Russia.

Read the full story here:
DPRK’s Air Koryo to open Pyongyang, Harbin charter flight


S. Korea approves medical aid to DPRK by civic groups

Thursday, February 23rd, 2012

According to Xinhua:

South Korea has approved humanitarian aid to the Democratic People’s Republic of Korea ( DPRK) by civic groups here, the latest in the flow of private aid to the estranged neighbor, local media reported Thursday.

With the approval, two South Korean aid groups, Nanum International and the Eugene Bell Foundation, plan to send medical equipment including X-ray machines and diagnostic reagents for tuberculosis, according to Yonhap News Agency.

South Korea suspended almost all exchanges with the DPRK following their border incidents in 2010, but has occasionally allowed humanitarian assistance to the impoverished neighbor.

Civic groups need government permission for DPRK-bound aid.

The original Yonhap story is here.

Read the full story here:
S. Korea approves medical aid to DPRK by civic groups


WFP to [not to] extend emergency mission to DPRK

Wednesday, February 22nd, 2012

UPDATE 1 (2012-2-24): The Choson Ilbo reports that the UN WFP is not extending its DPRK mission. According to the article:

The World Food Programme plans to end its emergency aid mission to North Korea in March as originally scheduled.

Citing officials from the WFP, Radio Free Asia reported Thursday that its emergency operation for the most vulnerable groups in the North, including children, pregnant women and the elderly, will end next month.

The organization said once the emergency program is over it will switch back to its smaller-scale assistance program, which provides food to roughly 3.5 million women and children in need of immediate nutritional support.

Meanwhile, the report added that the UN-affiliated organization had only raised about 30 percent of the funds needed to support North Koreans as of Wednesday.

ORIGINAL POST (2012-2-22): According to the Korea Herald:

The U.N. World Food Programme is planning to extend its Emergency Aid mission to North Korea beyond the original deadline of March.

The Emergency Operation, which started in April, aimed to address a dangerous and worsening food crisis in North Korea. It focused on the most vulnerable groups, women and children, of which there were 3.5 million in need of immediate support to prevent starvation.

The WFP has been able to work with North Korea in carrying out the operation, under very stringent rules.

Although the WFP has experienced some successes, a difficult 2011 has meant that the mission was unable to fully address the growing crisis, and an extension of the emergency operation is needed.

“We are currently finalizing plans for the operation beyond this point, but it will certainly continue to focus on the provision of nutritional assistance to the most vulnerable women and children,” WFP Asia spokesman Marcus Prior said.

Despite making progress in the latter stages of 2011, the WFP was unable to fulfill the goals of the original mission.

“Because of relatively slow funding at the outset, and the time taken to purchase and ship the food to the DPRK, distributions were at a very low level through the lean season months of May to August,” Prior said. DPRK stands for the Democratic People’s Republic of Korea, North Korea’s official name.

“At one point in the middle of 2011, production of specialized nutritious foods at factories supported by WFP came to an almost complete standstill,” said Prior. WFP documents say that during that time “much of the population of DPRK suffered prolonged food deprivation.”

The WFP says there is a “chronic gap” between the daily nutrients needed and the nutrients North Koreans have access to, with the situation more crucial for women and children.

Recent studies have shown that malnutrition in the first 1,000 days from conception can have permanent consequences for both physiological and intellectual development.

With a recent U.N. estimate that one-third of North Korea’s children under 5 are malnourished, the continuing crisis could have catastrophic implications on their future and not just their immediate food needs.

The WFP also reported through interviews with health officials that there was a 50 to 100 percent increase in the admissions of malnourished children into pediatric wards compared to last year.

The latest WFP DPRK report has called for more international aid that will be needed for the continued efforts, as the food from the original mission begins to reach its limits.

“We continue to have supplies available to see us through the next three to four months, but will require significant new funding to ensure these distributions can continue through the later, most difficult, lean season months of this year.”

Although the WFP does not collect data on the death toll caused by the 2011 food shortage, the latest report did say that another year of the same prolonged food deprivation will have a serious impact on the North Korean population.

My compendium of DPRK food stories in 2011 is here.

Read the full story here:
WFP to extend emergency mission to North Korea
Korea Herald
Hamish Macdonald


Kwangbok Department Store

Tuesday, February 21st, 2012

UPDATE 1 (2012-2-21): According to the Korea Times, this store is now providing people with a legal window to exchange local for hard currency:

North Korea is apparently allowing foreign currency to be exchanged at unofficial, black market rates at a newly-renovated department store in Pyongyang, according to a diplomatic source who recently visited the country, Tuesday.

The source said people could exchange euros, dollars and yuan at kiosks at Kwangbok Area Supermarket, which recently opened after refurbishment and is said to resemble department stores in the South. The North has long kept the value of its local currency artificially high.

Euros were being exchanged at the rate of one euro for 4,420 North Korean won, while the official rate is around 130 won per euro, the source said.

“They are exchanging hard currency at a rate that seems to be an unofficial rate,” the source told The Korea Times. “People can also shop at the department store using foreign currency by taking their receipts to the booths.”

The source added that the exchange rates were written on a board inside the kiosks.

ORIGINAL POST (2012-1-6): See the original post below.


Pictured Above: (L) The original facade of the “Kwangbok Department Store (광복백화점)”. (R) The new facade of the “Kwangbok Area Supermarket (광복지구상업중심)”

Here is KCNA coverage of the opening of the facility (Posted to YouTube):

Astute observers will notice the American beer, Pabst Blue Ribbon, featured prominently in the beer section.

Here is coverage of the opening in KCNA (2012-1-5):

Pyongyang, January 5 (KCNA) — The Kwangbok Area Supermarket was opened with due ceremony on Thursday.

All business service at the supermarket built as a commercial service center has been put on IT and digital basis. Customers can buy varieties of goods according to their taste and requirements in the sales rooms on each floor stacked with household appliances, electronic products, foodstuff, fibre, sundries and others.

Present there were officials concerned, officials of the Korea Taesong General Trading Corporation, officials and employees of the Kwangbok Area Supermarket, members of the Feihaimengxin Trading (Beijing) Co. Ltd. staying in the DPRK and the Chinese embassy here.

O Ryong Il, general president of the Corporation, said in his speech that the work to build the supermarket was successfully completed under the energetic leadership of leader Kim Jong Iland the dear respected Kim Jong Un and the positive efforts of the peoples of the two countries.

He expressed belief that the supermarket would help towards improving the people’s living standard and promoting the well-being of the two peoples through better service and management.

Xue Rifei, executive managing director of the Feihaimengxin Trading (Beijing) Co. Ltd., said in his speech that Kim Jong Il and Kim Jong Un gave field guidance to the supermarket on December 15, 2011 and named it the Kwangbok Area Supermarket.

He expressed the expectation that an effort will be made to reenergize the supermarket to win high appreciation for its best management, service and credit.

The Korea Taesong General Trading Corporation is a sanctioned organization, and according to the US Treasury, it is a “key node” in the illicit activity of Office 39. According to NK Leadership Watch:

One of the participants at the opening ceremony was Jon Il Chun (Chon Il-chun), deputy director of the Korean Workers’ Party’s Finance and Accounting Department and section chief of Office #39.  Mr. Jon accompanied Kim Jong Il on a visit to the Kwangpok store in mid-December 2011, which was KJI’s last reported public appearance before his death.

On a more casual note, the supermarket marks a point of administrative departure from the way department stores are typically managed in socialist countries. The Kwangbok Department Store (the former name) was one of Pyongyang’s premier formal retail outlets. For decades it operated in the same way as other socialist department stores: customers ended up standing in three lines before they were able to collect their merchandise (one line to order, another line to pay, and another line to pick up). The new Kwangbok Supermarket has adopted a market-style check out line. Though unnoticed by foreigners, this is the first such check out line I have seen in a North Korean department store.

This point was also highlighted in AP coverage:

A separate story in KCNA notes that the shop will sell both foreign and domestic goods:

The supermarket is supplied with home and foreign-made products which are in demand in the country.

Although I have not acquired data specific to this store, I believe it is reasonable (even rational) to assume that if the supermarket sells imported goods it will charge had currency for them. This opinion is based on the following assumptions: 1. The Chinese investors will not accept North Korean won under any circumstances. 2. The goal of Office 39 is to acquire hard currency for the Kim family. 3. North Korean retail outlets frequently post prices in multiple currencies so I don’t see any reason why it would be different here. Today a plurality of North Koreans can easily acquire foreign exchange.

Here is my working assumption of the business model: Chinese partner acquires merchandise and imports it to the DPRK. Sales in hard currency go towards allowing the Chinese supplier to recover its costs. Chinese partner either earns a profit from a markup it charges Kwangbok or it divides the profit with Office 39 along some agreed percentage.

If Chinese profits are earned from a cost-plus markup that it charges Kwangbop, then the partnership is closer to an exclusive supplier deal rather than a true joint equity deal. The North Koreans could cheat on this deal by finding cheaper suppliers and decreasing its purchases from the Chinese partner. If after-sales profits are split between the Chinese and Office 39, then both partners will need auditors on hand to make sure the books are accurate. The Chinese partner will also need a good relationship with the Chinese embassy if it runs into problems with the DPRK managers should they unilaterally change the terms of the contract (the split).

A Chinese firm reportedly tried to invest in the Pyongyang Department Store No. 1 several years ago. Not much seemed to happen, but maybe there is some more info here.