Archive for March, 2014

Labor Standards and South Korean Employment Practices in North Korea

Tuesday, March 11th, 2014

Marcus Noland and the US-Korea Institute at Johns Hopkins have published an interesting report on South Korean labor practices in the DPRK.

You can download the report here (PDF). Noland’s blog post here.

You can watch the paper release talk:

Here is a summary of the paper:

By 2012, South Korean firms employed more than 50,000 workers in North Korea. Survey data indicate that the North Korean government has successfully circumscribed exposure of North Korean citizens both to South Koreans and to more market-oriented economic practices. South Korean investment in North Korea may well be beneficial both for the firms and the workers involved, but evidence of the sort of broader spillovers that proponents of engagement sometimes assert is not evident.

In the new USKI report, “Labor Standards and South Korean Employment Practices in North Korea,” Marcus Noland, Executive Vice President and Director of Studies at the Peterson Institute for International Economics and Adjunct Professor of Korea Studies at Johns Hopkins SAIS, examines key questions about the nature of South Korean employment practices in North Korea both inside and outside the Kaesong Industrial Complex and whether this interaction is likely to encourage North Korean economic transition. He also examines the international legal obligations of both Koreas to implement fair and equitable labor standards and suggests ways to encourage better labor practices by South Korean government and firms in North Korea.


Panel of Experts report out

Tuesday, March 11th, 2014

You can download the report here.

You can learn more about the panel here.

Here is coverage in Reuters.

Here is Scott Snyder on the report.


Sinphyong turns into tourism development zone

Tuesday, March 11th, 2014

According to the Pyongyang Times (2014-3-11):

Korea has been renowned for scenic beauty of mountains and rivers and has lots of scenic spots named after Mt. Kumgang, a celebrated mountain with unsurpassed scenery.

Among them, there is the Sinphyong Kumgang Scenic Spot in Phyonghwa-ri of Sinphyong County, North Hwanghae Province. Sinphyong Kumgang has also been called Little Kumgang Mountain.

Since ancient times, the area has been dubbed Tohwa Valley, meaning a beautiful valley covered with peach blossoms.

It is surrounded by high and steep mountains in the heart of the Ahobiryong Mountains in the middle of the country.

Sinphyong Kumgang is characterized by the beautiful sights of gorges.

The narrow and long Tohwa Valley is flanked by successive gorges and there are 72 noted places.

Waterfalls, ponds and fantastic rocks are found everywhere.

The fauna and flora are diverse. There are good tree species, Panax schinseng, songi mushroom, wild edible greens, bear, roe deer, pheasant, woodpecker, carp, goldfish, catfish and minnow.

There are sites of such temples as Kwanjok and Kirum which offer a glimpse of the private life of ancient Buddhist monks.

Kumgang Sujong spring water gushing out from a place near the scenic spot is widely known to different countries for its virtue in enhancing the beauty of women.

In different places of the scenic attraction there are resting sites, pavilions, observation platforms, sites for shower bath, fish ponds and fountains. There are also tourist, sightseeing and mountaineering roads stretching for over 8 kilometres.

The North Hwanghae Provincial People’s Committee has a plan to establish a Sinphyong Tourist Development Zone in some parts of the scenic spot comprising the areas of Kumgang Waterfalls Valley, Big Bear Valley and Small Bear Valley. It will offer comprehensive tourist services.

The zone is some 600 metres above sea level on average, which is ideal for mountaineering and physical training and favourable to building a tourist resort.

It is free from pollution and eco-friendly and expected to cover an area of 8.1 square kilometres.

A modern hotel with accommodation for hundreds of tourists, a golf course and other service facilities will be built.

The zone is easy of access as it is located in the middle of the tourist road between Pyongyang and Wonsan in Kangwon Province which is now being built into an international tourist city.

It is about 120 kilometres away from Pyongyang Airport, some 75 kilometres from Wonsan Port, nearly 142 kilometres from Sariwon, the capital of North Hwanghae Province, 8 kilometres from Sinphyong county town and about 30 kilometres from Jongbong Railway Station in Singye County, the nearest railway station.

Small as it is in area, Sinphyong Kumgang is a show-stopper for the original beauty of gorges, refreshing waterfalls, clean air and diverse fauna and flora.


North Korea seeks investments from overseas Koreans

Friday, March 7th, 2014

Institute for Far Eastern Studies (IFES)

North Korea has been showing increased efforts in attracting economic investment from overseas Koreans. In particular, recent foreign media outlets run by overseas Koreans are showing increased emphasis on economic cooperation with North Korea.

In the March issue of the monthly magazine Joguk (Homeland) published by the General Association of Korean Residents in Japan (a pro-North Korea association), featured an interview with Park Kyung Jin, the director of Economic Cooperation Office for Overseas Koreans.

In the interview, Director Park described the plans for the organization: “We are diligently working to create an environment where overseas Koreans can successfully do business with North Korea.” He also emphasized that they are continually working to protect the rights and provide special legal treatment for overseas Koreans.

On February 24, US-based pro-North Korean website Minjoktongsin (Minjok Thongsin) introduced Kim Ji Hyuk and Ri Hak Song, department heads of the (DPRK) State Economic Development Commission in an article, “Where Is the North Korean Economy Heading?”

In the article, the officials stressed that North Korea is actively looking to foster economic experts and said, “We welcome the participation of experts, businesses, and organizations of overseas Koreans who wish to invest in North Korea.”

In addition, in order to increase economic cooperation with overseas Koreans, the commission introduced future plans of easing the travel process to and from North Korea including visa and other entry requirements.

North Korea is subject to international sanctions that limit its trade with most of the world and appears to be turning to overseas Koreans to overcome the country’s economic crisis. Rather than reaching out to other foreigners, North Korea is likely to be reaching out to overseas Koreans who share a common language and ethnicity, with relatively easier access.

Since the establishment of the Joint Venture Act in 1984, North Korea has worked extensively with the General Association of Korean Residents in Japan and with ethnic Koreans living in China. Since the launch of the Kim Jong Un regime, economic development zones (EDZs) are being set up across the country and ties with overseas Koreans are likely to be strengthened in efforts to further attract foreign investments into North Korea.


DPRK as e-waste conduit

Thursday, March 6th, 2014

According to Bloomberg:

How did North Korea become the conduit by which thousands of tons of old junk moved from the developed world into China’s bustling e-waste recycling industry?

As with any smuggling story, the tale starts with a prohibition. In this case, Chinese laws and regulations prohibit e-waste — most commonly understood as old, non-working electronics like laptops, monitors and mobile phones — from being imported into the country. The reasons are several, including a government interest in keeping used foreign goods from competing against new ones, and environmental concerns about how some of those goods are recycled. Nevertheless, China’s national-level environmental and customs authorities have long struggled to maintain those prohibitions against local ports and authorities — especially in south China — who view e-waste recycling as a good source of jobs, tax revenue, and used components to drive local industry. Of the several conduits through which e-waste has traditionally been smuggled, the most common and long-standing was over the Hong Kong-China border.

That all changed in February 2013 when — for reasons that are still unclear — Beijing announced “Green Fence,” a high-level crackdown on the import of prohibited waste and recycling exports, including old electronics. Nonetheless, here and there, imported old electronics still turned up in Chinese recycling facilities (I personally saw them).

The likely means, as described in state media after the North Korea bust, was convoluted. A Hong Kong “gang” allegedly received containers of used electronics from abroad. They arranged for them to be placed them on smaller ships bound for a “country in Northeast Asia.” The culprit’s identity is clear from the awkward phrasing. Criticism of North Korea in the Chinese press is exceedingly rare and -– needless to say — connecting the country to an e-waste smuggling ring qualifies as criticism. Were the country Japan, or even South Korea, it would have been named.

In fact, North Korea has long been rumored to be an e-waste recycling center. Since January 2008 a Chinese company based in Liaoning Province along the border has advertised for scrap to feed its e-waste recycling operations in North Korea itself. The facilities are located, according to the ad, in the port of Nanpo, and “take advantage of North Korea’s environmental policies and inexpensive labor resources.” There, the ad promises, prohibited e-waste can be dismantled and transformed into a product acceptable for export to China.

The smuggling ring was allegedly doing something similar, although its “transformed” e-waste clearly did not meet environmental standards. In North Korea the bulky e-waste was dismantled (steel cases would be removed from old desktop PCs, for example), segregated into marketable components like computer chips for re-use, and then sent to Dandong, a Chinese city and port on the Yalu River, directly across from North Korea. From there, the goods were trucked south, to recycling and re-use centers in Guangdong Province, a straight-line distance of roughly 1,800 miles.

Read the full story here:
Did North Korea Recycle Your Laptop?
Adam Minter


DPRK fertilizer imports (2013 – Jan 2014)

Tuesday, March 4th, 2014

According to Yonhap:

North Korea’s fertilizer imports from China skyrocketed in January from a year earlier, data showed Tuesday, pointing to Pyongyang’s efforts to increase agricultural output.

The North brought in 35,113 tons of Chinese fertilizer in January, a huge increase from 2 tons from a year earlier, according to the data by the Korea Rural Economic Institute (KREI).

Such an amount is unprecedented for January, as the impoverished communist country used to buy a limited amount of fertilizer in winter, according to KREI experts.

The January figure is also two times bigger than the 17,416 tons for December, according to the data.

“Different from its previous pattern of buying fertilizer in spring, North Korea seems to be taking a very proactive move to secure fertilizer a long time ahead of its usual schedule. This means that the North is putting a priority on improving its farm output,” said KREI researcher Kwon Tae-jin.

It is in line with its leader Kim Jong-un’s policy goal of boosting food production, experts said.

In his New Year’s message, the young leader said all efforts “should go for agriculture … in order to build a strong economy and to improve the people’s livelihoods.”

Last year, Pyongyang bought a total of 207,334 tons of fertilizers from China, down by 18 percent from the previous year.

“This year, the trend is expected to be reversed given the January data and the fact that China has lowered duties,” Kwon added.

Read the full story here:
N. Korea’s fertilizer imports from China soar in Jan.


Prospects for North Korea’s anthracite exports to China

Monday, March 3rd, 2014

Institute for Far Eastern Studies (IFES)

For North Korea, anthracite exports are a major means of foreign currency earnings and the country’s top export item to China. Exports are expected to continue to rise this year.

China’s year-on-year import of anthracite from North Korea increased 39.7 percent (16.49 million tons) from the previous year, accounting for 41.5 percent of the total amount of anthracite import for China (39.66 million tons). North Korea has now surpassed Vietnam as the top exporter of anthracite to China.

Other than natural resources, North Korea has virtually no other major export commodities to offer. The recent standstill in inter-Korean economic cooperation and toughened international sanctions has made it difficult for North Korea to earn foreign currency. Thus, North Korea has pushed for a steady increase in its hard coal exports to China. North Korean anthracite is considered to be of relatively high quality, maintaining a higher unit price (10 USD/ton) than Vietnamese anthracite.

Currently, China’s steel industry is the largest consumer of the North Korean anthracite, with the main consumers being local steel companies in Liaoning, Hebei, and Shandong Provinces, as they are geographically closer to North Korea and have easy access to shipping ports.

The market for North Korean anthracite is expected to expand. Since last year, the Chinese government began to implement wide-ranging air-pollution management measures. As a result, Chinese authorities designated the Hebei Province and the surrounding areas of Beijing and Tianjin municipalities as key areas to improve and control air pollution. With the help of allocated subsidies from the central government, local governments began to distribute hard coal briquettes to homes in farming villages. China’s major anthracite producing areas are in remote mountainous regions. So the demand for North Korean anthracite briquettes is anticipated to increase.

Late last year, the former head of the (North) Korean Workers’ Party Jang Song Thaek was accused, charged and executed for, among other “anti-state activities,” selling the country’s “precious [natural] resources” (presumably to China) at very cheap prices. But his execution does not appear to have made a significant impact on the anthracite trade between the DPRK and China. With China’s growing demand for North Korean anthracite, the export volume is expected to rise.

However, some argue that despite the growing demand North Korea’s coal production capacity is limited and will experience difficulties. Currently, North Korea has already suppressed significantly its domestic demand in order to meet the export volume. North Korea’s mining facilities are said to be old and badly in need of repairs, but large investments from Chinese companies that could be put toward this endeavor are reported to have dried up.