Archive for October, 2015

KCNA reports on cost of Mirae Scientists Street?

Thursday, October 22nd, 2015


Pictured above (Google Earth): The Mirae Scientists Street under construction (2015-5-20)

According to the Korea Times:

North Korea has invested about 10 billion won in North Korean currency creating a big housing precinct for scientists in Pyongyang, Yonhap reported Thursday.

The Korean Central News Agency said the communist regime had spent about 9.9 billion won on 19 buildings to house 2,584 households and commercial and public facilities.

The first phase was completed on April 15, the birthday of late North Korean leader Kim Il-sung. Phase two was finished on the 70th anniversary of the founding of the North Korean Workers’ Party on Oct. 10.

Leader Kim Jong-un was quoted as saying the new street reflects the “love for people, respect for people and politics that puts people first” of the North Korean Workers’ Party.

For what it is worth KPW9.9 billion is approximately US$1.237 million on the black market, which comes to just $478/household assuming they each got an individual unit.

However, I would not get to hung up on these numbers, I cannot find any story in KCNA on the cost of Mirae Scientists Street, so until I hear an official estimate, I am going to put an * next to these numbers.

Here is what KCNA had to say about Kim Jong-un’s tour of the recently completed Mirae Scientists Street:

Pyongyang, October 21 (KCNA) — Kim Jong Un, first secretary of the Workers’ Party of Korea, first chairman of the National Defence Commission of the DPRK and supreme commander of the Korean People’s Army, went round Mirae Scientists Street, which was successfully completed as a model of Juche-oriented architecture and fairy street in the era of the Workers’ Party.
Feasting his eyes on the street, he said the longer one watches it, the more magnificent and spectacular it looks. He noted with pleasure that it proves visually the idea of the Workers’ Party of Korea of attaching importance to science and talents, it is a fashionable street of perfect combination of the Juche character, national identity, originality and formative art and unique one of our style which appeared in the capital city of Pyongyang as an icon of cultural efflorescence.

He said it is something unimaginable to build a street with flats for thousands of families and more than 150 public catering outlets in a matter of just one year by the existing method of construction. He noted with excitement that the completion of Mirae Scientists Street convinces everybody that the appearance of the country would undergo beyond recognition a decade later as everything is done in just one year instead of ten years.

Going round different places of the street, he learned in detail about the construction.

He said that it is fantastic, indeed, to watch the tower symbolic of the 53-storied skyscraper which has been built like an electronic track so that one may know it is Mirae Scientists Street even from distance, adding that formative art was applied to all the buildings at a very high level.

He was pleased that the flats have been constructed at the best quality and teachers and researchers would need to bring with them only hand luggage as their drawing rooms, parents’ rooms, rooms for couples, children’s rooms, kitchens, etc. are fitted with high-quality furniture and fixtures,

Hearing officials say foreigners will hardly believe that ordinary educators and scientists of the country will live free of charge in such deluxe apartment houses in the street on the picturesque bank of the Taedong River, he said that it is the advantages of the socialist system in the DPRK which capitalist countries can neither imitate nor build.

He praised the builders for having built all kinds of public catering and cultural and welfare establishments on the ground floors of the buildings in an impeccable manner to meet requirements of settlers.

He noted with appreciation that resting places and sporting parks have been built in a peculiar style so that residents might have good rest and do sports and greening in the residential area and the project for reinforcing banks of the river were done very well.

It is the steadfast will of our party to consolidate the foundation of socialism by dint of science and advance socialism with the power of the engine of science, he said, stressing the need to steadily increase substantial investment in the scientific researches on the basis of the successes and experience gained in the work for consolidating the material and technical foundations of different scientific research bases and improving the living standard of the scientists and researchers in recent years.

All the buildings of the street spruced up at a speed unprecedented in the history of construction are laudable structures of Songun Korea built by our service personnel and people with the will to create everything dear in their own style by their own efforts at a lightning speed, optimistic about the future, and they are valuable crystal of their patriotism, he said, extending thanks to the units of the Korean People’s Army and other units which participated in the construction, builders and helpers in the name of the Workers’ Party of Korea.

He expressed expectation and belief that all the builders would give fullest play to the inexhaustible mental power displayed in the construction of Mirae Scientists Street and make a positive contribution to turning Pyongyang City into a hub of Songun culture and the most magnificent and fashionable city of the world fame in all aspects and building the socialist country into a highly civilized nation.

He gave an instruction on inaugurating the street.

He was accompanied by Hwang Pyong So, Kim Ki Nam, Kim Yang Gon, O Su Yong, Jo Yong Won and Ma Won Chun.

Read the full story here:
N. Korea pours 10 billion won into street for scientists
Korea Times


20 DPRK officials defected in 2015

Wednesday, October 21st, 2015

According to the Choson Ilbo:

Twenty North Korean officials have defected to South Korea so far this year, the National Intelligence Service told a National Assembly audit Tuesday.

They were mostly diplomats but also include a high-ranking officer from the powerful Army politburo.

NIS chief Lee Byung-ho told lawmakers the number of North Korean officials defecting from overseas is steadily increasing. Lee added that all 20 who defected this year now live in South Korea.

Although they rank lower than the late Hwang Jang-yop, a senior Workers Party secretary, some are from the elite class, Lee said.

A North Korea source said the Army politburo member defected in April, when he was sent to Beijing for a trading company operated by the politburo.

The Army politburo is in charge of monitoring the activities of all North Korean soldiers and is considered a central part of leader Kim Jong-un regime. Its leader, Hwang Pyong-so, is the second-most powerful man in the state.

Early this year, a mid-level diplomat based at the Hong Kong office of Room 39, the Workers Party office that handles Kim’s slush funds, defected with his family.

Presumably these individuals did not go to Hanawon so their numbers will need to be added to the official numbers released by the Ministry of Unification.

Read the full story here:
20 N.Korean Officials Defected to S.Korea This Year
Choson Ilbo


KOTRA data on DPRK-China trade

Wednesday, October 14th, 2015

Below are charts published by KOTRA of North Korea – China trade.




Here is the source.


North Korean defectors in the USA

Tuesday, October 13th, 2015

According to UPI:

North Koreans, 186 in total, have resettled in the United States since 2006, two years after the North Korean Human Rights Act of 2004 was signed into law by President George W. Bush. Radio Free Asia reported on Monday the refugees now live in 18 states, and 26 of the 186 settled in Kentucky.

Next, California is home to 25 recent arrivals, followed by New York at 19, Colorado, 17, with Arizona, Virginia, each home to 15 new North Korean defectors. The remaining population is divided among Washington, Idaho, Texas, Indiana, Tennessee, Georgia, Florida, North Carolina, Maryland and Massachusetts, each state home to less than 10 North Koreans. In 2014, the United States granted asylum to 15 North Koreans, and five resettled in California and three in Utah. Others have taken up residence in Colorado, Illinois, Kentucky and Georgia.

Read the full story here:
More North Korean refugees in the U.S. calling the ‘Bluegrass State’ home
Elizabeth Shim


Kaesong Complex’s cumulative output reaches USD$3 billion

Monday, October 12th, 2015

Institute for Far Eastern Studies (IFES)

The Kaesong Industrial Complex has reached 3 billion USD (3.5 trillion won) in cumulative output since it started operation 11 years ago. According to the Ministry of Unification, between 2005 (when operation went into full swing) and July 2015, the complex’s total output reached 2,996,160 USD.

This year the Kaesong complex recorded a total of 320 million USD in output through July, an average of 46 million USD each month. This guarantees that cumulative production surpassed 3 billion USD sometime in August.

The annual output of the Kaesong Industrial Complex started at 14.9 million USD in 2005 and reached 180 million USD in 2007, exceeding 100 million USD for the first time.

Except for 2013 (when operations were suspended for about five months), output has grown rapidly each year since 2007, shooting up to 470 million USD last year.

While it took the complex five years to reach 1 billion USD in cumulative output, it took only three additional years to surpass 2 billion USD by 2013, and just two more years to exceed 3 billion USD.

If the complex can maintain a similar rate of output in the second half of this year as in the first half (it produced 278 million dollars-worth in the first half), this year it will surpass an annual output of 500 million USD for the first time.

Even between March and May of this year, when tensions were heightened due to North Korea’s demands for a unilateral minimum wage increase, production was up 10-20 percent over the previous year. Thus, the Kaesong Industrial Complex has maintained a stable growth rate.

The number of resident companies at the complex has also increased significantly. While in 2005 only 18 companies did business at the complex, currently there are 124. Furthermore, the number of North Korean workers at the complex has risen nine-fold, from 6,000 at the beginning of its operation to approximately 54,000 at present.

Looking at the Kaesong complex companies by industry, textile companies account for over half of companies at 58 percent; machinery metal companies account for 19 percent; electronics companies, 11 percent; and chemicals companies, 7 percent.

The cumulative number of people who have visited the Kaesong Industrial Complex reached 1,100,000 this August, while 723,000 vehicles have visited the complex.


4th annual China-DPRK Economic, Trade, Culture and Tourism Expo

Sunday, October 11th, 2015

UPDATE 3 (2015-10-22): According to Yonhap (via the Korea Herald):

 North Korea and China signed preliminary trade deals worth $1.6 billion at their annual trade fair, a roughly 10 percent gain compared to deals signed at last year’s exhibition, according to a Chinese official on Thursday.

North Korea and China have jointly held the trade fair in October since 2012 in the Chinese border city of Dandong, and this year’s four-day fair ended on Sunday. Last year, the two nations inked trade deals worth $1.36 billion.

Pan Shuang, deputy mayor of Dandong, told the International Business Daily newspaper that about 100 North Korean business entities attended the North Korea-China Economic, Trade, Culture and Tourism Expo.

The number of North Korean business entities attending this year was similar to last year, but Pyongyang sent trade officials and diplomats to this year’s exhibition, Pan said.

At this year’s fair, North Korea and China also agreed to launch new tour routes linking the North’s border town of Sinuiju and Dandong, Pan said.

North Korea and China “further solidified their trade bridge through a wide range of exchange and cooperation” during the trade fair, Pan said.

China is North Korea’s economic lifeline and diplomatic backer, although their political ties remain strained over the North’s defiant pursuit of nuclear weapons.

Political relations between North Korea and China showed signs of a thaw after Liu Yunshan, the Chinese Communist Party’s fifth-ranked official, held talks with North Korea’s young leader Kim Jong-un earlier this month in Pyongyang.

UPDATE 2 (2015-10-11): According to Xinhua:

A 400-strong delegation from the Democratic People’s Republic of Korea (DPRK) will attend the fourth China-DPRK expo scheduled next week, said organizers.

The China-DPRK Economic, Trade, Cultural and Tourism Expo will be held from Oct. 15 to 18 in northeast China’s Dandong City, with more than 100 exhibition booths for DPRK companies.

China and the DPRK will also discuss the launch of new tourism projects to DPRK during the expo, according to organizers.

Firms from Russia, Mongolia, Pakistan, Thailand, Vietnam, Egypt as well as Hong Kong and Taiwan regions will seek business opportunities at the expo.

Dandong is a key hub for trade, investment and tourism between China and the DPRK. There are more than 600 border trade enterprises in the city, and trade with the DPRK accounts for 40 percent of the city’s total trade turnover.

The Guomenwan trade zone in Dandong is expected to open soon to boost bilateral economic cooperation.

UPDATE 1 (2015-10-2): Yonhap reports on the expo:

North Korea and China will launch a joint trade fair on Oct. 15, with some 400 Chinese companies expected to attend the annual exhibition, according to Chinese media on Friday.

North Korea and China have jointly held the annual trade fair in October since 2012, but the number of North Korean business entities attending the event last year was about 30 percent less than 2013.

About 100 North Korean business entities will take part in the four-day trade fair, which will be held in the Chinese border city of Dandong, according to Chinese media reports.

Besides North Korea and China, companies from Hong Kong, Vietnam, Mongolia and Thailand will join this month’s North Korea-China Economic, Trade, Culture and Tourism Expo.

In the latest sign that Pyongyang and Beijing are trying to increase economic cooperation despite strained political ties, North Korea and China will launch a border trade zone in Dandong on Oct. 15 when the trade fair opens.

The Guomenwan trade zone in Dandong, where more than 70 percent of bilateral trade between the two nations is conducted, would cost a total investment of 1 billion yuan (US$157 million), state-run Xinhua news agency reported in August.

ORIGINAL POST (2015-7-12): Adam Cathcart informs us that the fourth China-DPRK Economic, Trade, Culture and Tourism Expo will be held this year. Info on the first, second, and third expos here.

Here is the website for the event (in Chinese).

According to Cathcart:

The going-forward of the 2015 fair was announced in Dandong at a hotel by the city’s vice-mayor; no North Koreans were listed as attending. Nor were any DPRK officials in attendance[.]


Kyongwon Economic Development Zone

Thursday, October 8th, 2015

KCNA has announced a new Economic Development Zone:

Kyongwon Economic Development Zone to Be Set Up in DPRK

Pyongyang, October 8, 2015 18:24 KST (KCNA) — The DPRK decided to set up the Kyongwon Economic Development Zone in some areas of Ryudasom-ri, Kyongwon County, North Hamgyong Province.

The sovereignty of the DPRK is exercised over the zone.

A relevant decree of the Presidium of the Supreme People’s Assembly was promulgated on Oct. 8.

According to the Institute for Far Eastern Studies (IFES):

Establishment of New Economic Development Zone in North Hamgyong

North Korea revealed on October 8, 2015 that it will establish the Kyongwon Economic Development Zone in North Hamgyong Province. “An economic development zone will be formed in part of Ryudarisom-ri in Hamgyong Province’s Kyongwon County,” North Korea’s state-run Korean Central News Agency (KCNA) announced.

According to the KCNA, the Standing Committee of the Supreme People’s Assembly released the ordinance establishing the Kyongwon Economic Development Zone on October 8. It did not however, disclose any specific details, stating only that “the Democratic People’s Republic of Korea exercises its sovereignty.”

Currently there are 16 locations in North Korea that have been designated as regional economic development zones (EDZs): the Chongjin EDZ, Hyesan EDZ, Manpo EDZ, Amnok River EDZ, Wiwon EDZ, Hungnam Industrial Development Zone, Chongnam Industrial Development Zone, Hyondong Industrial Development Zone, Sukchon Agricultural Development Zone, Pukchong Agricultural Development Zone, Orang Agricultural Development Zone, Chongsu Tourist Development Zone, Onsong Island Tourist Development Zone, Sinpyong Tourist Development Zone, Songnim Export Processing Zone, and the Wau Island Export Processing Zone.

There are also seven central-level EDZs: the Rason Special Economic Zone, Wonsan-Kumgangsan Tourist Region, Kaesong Industrial Region, Sinuiju International Economic Zone, Kangryong International Green Model Zone, Onjong High Tech Development Zone, and the Mubong International Special Tourist Zone.

At an EDZ investment briefing session held in Pyongyang on September 21, 2015, Korea Economic Development Association’s general secretary Kim Chon Il explained, “We have made it so that each province can directly manage and develop their local development zones, meeting the demands of the socialist economic management principles of guaranteeing centralized economic management principles and the identity of each region.”

He added, “As we ensure practical economic benefits matching the development principles of economic development zones to the natural geographical conditions of the relevant region, we are starting under a comprehensive plan on a small scale and are achieving results. Going forward we will gradually expand.”


China slowdown hits North Korea’s exports

Thursday, October 8th, 2015

Alastair Gale writes in the Wall Street Journal:

China’s economic slowdown and a plunge in coal prices are depriving North Korea of critical foreign currency, threatening to stir discontent among the small, elite class that the nation’s mercurial dictator relies on for support.

The drain on income comes as North Korea continues to plow its limited resources into its armed forces. On Saturday, the isolated state is set to hold a military parade to mark the 70th anniversary of the founding of its ruling party. It has also declared plans to launch satellites, seen by the U.S. and others as a way to test ballistic missile technology.

The value of North Korean exports to China, by far Pyongyang’s biggest trade partner, fell 9.8% through August from the year-earlier period, Chinese data show, accelerating from a 2.4% decline last year.

Adding to the pressure on Pyongyang is China’s attempt to scale back its bloated steel industry, the main customer for North Korea’s biggest export product, coal.

The scenario leaves North Korea’s young leader, Kim Jong Un, vulnerable. North Korea depends on China to buy most of its exports, but ties between the longtime allies have become strained over North Korea’s nuclear brinkmanship. To boost exports, Pyongyang has little option but to turn to its only other significant trade partner, South Korea.

All of this means Mr. Kim has less foreign currency to underwrite the lifestyles of the North Korean elite whose support is essential to maintaining his grip on power.

“Raising living standards for the North Korean apparatchik class is extraordinarily dependent on trade with China in a single commodity,” said Marcus Noland, executive vice president of the Peterson Institute for International Economics, a Washington research group. “A slowdown in revenues will create discontent.”

The depth of possible repercussions is hard to gauge because of North Korea’s opaque economy and political system. There are no clear outward signs of government instability, and prices of daily necessities such as rice—often an indicator of economic shocks—remain steady, said Nicholas Eberstadt, a political economist at the American Enterprise Institute, a Washington think tank.

North Korea continues to press ahead with infrastructure projects, such as the recent opening of a new international airport terminal near Pyongyang. The emergence of semiprivate businesses such as taxi companies in recent years has provided the state with fresh sources of income, said Go Myung-hyun, an expert on North Korea at the Asan Institute for Policy Studies, a Seoul-based think tank.

And China’s ban starting this year on highly polluting types of coal somewhat shields North Korea’s coal exports from a fall in demand because they are mostly high-quality anthracite, a type that produces little smoke.

Still, the fall in trade revenue increases the challenge for Mr. Kim, who has said economic development is a top policy priority despite his reluctance to embrace Chinese-style economic reforms, such as privatizing state businesses. In 2012, Mr. Kim said in a speech that citizens should “not have to tighten their belts again,” and North Korea’s state media frequently tout the construction of apartment buildings and leisure facilities as examples of progress.

Andrei Lankov, a professor at Kookmin University in Seoul, says the regime has been trying to reduce its dependence on China, which now absorbs as much as 90% of Pyongyang’s exports, compared with around 50% in the early 2000s, according to the Korean International Trade Association in Seoul. The value of those exports last year was $2.9 billion, Chinese customs data show.

One sign of that concern came in late 2013 when Mr. Kim executed his own uncle, Jang Song Thaek, an official who was widely seen as a proponent of closer trade links with Beijing. State media blamed Mr. Jang for “selling off precious resources of the country at cheap prices.”

Pyongyang’s diplomats have traveled extensively around the world over the past year, including a rare foreign ministry visit to India in April. Still, many nations remain wary of boosting trade links as North Korea continues a nuclear standoff with the U.S. and other nations.

Last year, North Korea and Russia signed an ambitious economic development agreement, but while Pyongyang and Moscow have warmed politically—reflecting shared hostility toward the U.S.—few economists see much potential for significant growth in bilateral trade; North Korea’s exports to Russia totaling just $10 million in 2014.

U.S. and South Korean diplomats say that greater international scrutiny has crimped another North Korean revenue stream: illicit arms and drugs.

Many economists say South Korea is the North’s only near-term option to offset declining trade income from China and may have motivated Pyongyang in August to reach an accord to end a confrontation after the two sides exchanged artillery fire.

“South Korea is the one potentially interested partner that could provide a significant boost to North Korea’s economy,” said Troy Stangarone, senior director for congressional affairs and trade at the Korea Economic Institute in Washington.

The South imposed economic sanctions on the North in 2010, blocking most bilateral trade, in response to the sinking of a warship that killed 46 sailors. Trade has since edged up and Seoul says it is willing to discuss increasing economic cooperation if progress is made in other areas, such as reuniting families separated by the Korean War.

Lee Jong-kyu, a research fellow at the Korea Development Institute in Sejong, South Korea, said the North may also seek new revenue by ramping up its exports of manual laborers to places such as Russia and the Middle East, try to boost tourism or build up light industry. North Korea also has tried to reboot plans for foreign investment in special economic zones—with little success, say foreign officials.

Ultimately, while Chinese diplomats express frustration with the regime in North Korea, it is unlikely that Beijing would allow its volatile neighbor to become destabilized by a fall in trade and spark a humanitarian disaster on its doorstep, observers say.

“If Beijing is a generous uncle, this will not prove to be a perilous problem because uncle will send more allowance,” Mr. Eberstadt said.

Read the full story here:
Cash Crunch Hits North Korea’s Elite
Wall Street Journal
Alastair Gale


Naenara reports on Wonsan SEZs

Wednesday, October 7th, 2015

Naenara carried an interview with Choe Yong Dok, Director of the Economic Zone Development of Kangwon Provincial People’s Committee.

In the interview, Director Choe commented on the Wonsan-Mt. Kumgang International Tourist Zone and the Hyondong Industrial Development Zone.

I tried copying the text here, but was not successful. Here is the PDF.


Stall fees raised for market vendors

Wednesday, October 7th, 2015

According to the Daily NK:

Daily NK has learned that the fees vendors pay for the right to sell goods varies depending on their goods and is now applicable to stall and street merchants alike. Home appliances and industrial items carry the most expensive stall fee, according to inside sources. This is because these products tend to be large, they sell for a high price, and they have good profit margins.

In a telephone conversation with the Daily NK on the 6th, a source in Yanggang Province said, “The stall fees for market traders are either 1500 KPW [0.18 USD], 1000 KPW [0.12 USD], or 500 KPW [0.06 USD] according to the size and type of product. The fees for sellers on the street are based solely on the type of product, since size is less of a factor for those outside the market.”

Daily NK crosschecked this news with an additional source in the same province and a separate source in South Pyongan Province.

She explained that the small stalls are approximately 1.5 meters wide and are mainly used by food and fish vendors. Medium-sized booths [1000 KPW] are good for sellers of rice, cigarettes, and other household goods while the largest booths are 2.5 meters wide and home to the appliance and industrial goods sellers; these set a given merchant back 1500 KPW.

“As the number of stalls in the marketplace has increased, so have the profits for the authorities, who collect on the fees. In the past, the stall fees were uniform for all sellers, but now the regime has found a way to make more money by customizing the pricing model according to the stall size and the product’s profit margin.”

“Just a few years ago, there was very little regulation of the market. In this lax environment, we saw large increases in the number of market vendors and street sellers. Sellers could move about freely between areas and markets to try to get the best price. Now things are much stricter. To sell X, you first have to pay the fee to sell X.”

“Additionally, both market sellers and street merchants have to pay a fee now. In the past, the fee was exclusively for sellers in the marketplace, but now everyone has to fork over the cash in order to get a badge or label authorizing them to sell that day. Inside the marketplace, the market managers make the rounds at least once a day to make sure everyone is abiding the rules,” she said.

“Now they also make rounds outside of the market at least twice a day to make sure all those merchants are paying for the right to sell. The fees for street merchants are 500 KPW for vegetables and 1000 KPW for light goods. The market managers aggressively police the area to ensure that everyone has the appropriate credentials.”

According to the source, the market traders are only checked once a day because it is easier to track them down and verify that they’ve paid the stall fees. Outside traders go all over the place to sell their goods, which is why the market managers go out twice a day to check on them.

Read the full story here:
Stall fees raised for market vendors
Daily NK
Kang Mi Jin