Archive for January, 2019

Gas prices down in North Korea after Kim’s China visit

Thursday, January 31st, 2019

By: Benjamin Katzeff Silberstein

A while back, I speculated that fuel prices in North Korea might go down after Kim Jong-un’s visit to China. This is precisely what happened, Daily NK reports. Causality is of course impossible to prove, but given circumstances (and the historical pattern of fuel price movements, which I write about in a forthcoming working paper), a connection doesn’t seem unlikely.

“The cost of 1 kg of fuel has fallen by around 2,500 KPW from 13,000 KPW two weeks ago,” said a North Hamgyong Province-based source on January 22. “The fall of 2,500 KPW per kg is a lot, so it’s being welcomed by merchants.”

The drop in fuel costs has impacted gasoline prices in the country’s northern region, with the source adding that truck drivers he spoke with have reported that the fuel prices in Pyongyang are similar.

Despite the restrictions on oil imports into the country due to international sanctions, smuggling across the country’s porous sea and land borders have kept gasoline supplies (including diesel) steady in the country, the source said.

The cost of fuel in North Korea last year fluctuated considerably due to sanctions pressure. News outlets reported last year that fuel prices reached 27,000 KPW per kg in early January 2017, a 60% spike from December 2016 prices.

The prices dipped back down to around 15,000 per kg, before settling at 15,500 KPW in December 2018. This suggests that gasoline prices in North Korea are more sensitive to international sanctions than other commodities like rice.

The recent fall in prices is likely due to a reduction in the price of smuggled fuel from China and the rising volumes of diesel fuel being refined and sold in the country.

Domestically refined diesel is generally supplied to the military and state-run factories, but also finds its way to the markets through different avenues. The source reported that there is now more diesel fuel being circulated in the markets.

Also, see this on the general ease of smuggling conditions/border controls after the visit.

Full article:
Optimism rising as fuel prices dip in North Korea
Kang Mi Jin
Daily NK
2019-01-28

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Samsu hydropower plant fails to meet demand

Thursday, January 31st, 2019

Benjamin Katzeff Silberstein

The Samsu Power Plant, a hydroelectric power station located in Ryanggang Province, is failing to provide sufficient levels of electricity to nearby areas, leading to frustration among local residents, sources in North Korea report.

Kim Jong Un’s New Year’s Address placed an emphasis on hydroelectric power to resolve the country’s chronic electricity issues, but parts of the existing hydroelectric infrastructure are failing to perform. The outcome is fomenting concerns over whether the construction of new hydroelectric power plants will resolve the fundamental issues facing North Korea’s lack of electricity.

“The Samsu Power Plant has cracks where water is flowing out, and the plant cannot produce enough electricity,” said a Ryanggang Province-based source on Monday. “The construction of the power plant left almost the entire farming area in Samsu County submerged in water and locals were forcibly relocated to other areas. Residents are unhappy because the power plant isn’t producing much electricity.”

The power plant was built in 2007, but operations were halted in 2014 due to leaks in the dam. Repairs were made but the leaks are still a common occurrence five years later, while the plant is failing to produce much electricity at all.

Hyesan and the greater Ryanggang Province area continuously face electricity supply disruptions, which impact local companies and factories in the area.

“There’s not much electricity, so people are calling on the designers and builders of the dam to be punished via legal action,” said a separate source in Ryanggang Province.

“Locals are also showing dissent toward plans to build another mid-sized power plant in the area due to the failure of the Samsu Power Plant.”

The Samsu Power Plant has problems with its poor construction, but its location is also deemed by some to be suboptimal for producing hydroelectricity.

“The Ryanggang Province area is so cold in winter that the water freezes and this causes issues for electricity production at the dam,” said a defector from Ryanggang Province. “There’s not much rain either, so it’s doubtful whether the dam can produce much electricity, particularly considering the amount of money that was invested in it.”

Full article:
Samsu Power Plant fails to meet demand, frustrating local residents
Mun Dong Hui
Daily NK
2019-01-31

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UN panel says North Korea is selling fishing rights

Thursday, January 31st, 2019

Benjamin Katzeff Silberstein

One of the many ways in which North Korea earns hard currency is sales of fishing rights to vessels from China. This is also supposedly one of the reasons for the North Korea “ghost ships” drifting to Japan. Because many fishings rights near North Korea are sold to Chinese vessels, North Korean boats have to go further out, often without adequate fuel supplies. Kyodo News reports that the UN panel of experts will soon publish their report detailing some of these fishing rights sales, which breach the sanctions currently in place:

The claim is based on information provided by two unnamed member states, though one has been identified as Japan, according to officials in Tokyo.

It is also expected to be reported that more than 15 Chinese fishing vessels were inspected and found to be carrying licenses from North Korea, officially known as the Democratic People’s Republic of Korea, during the reporting period of January-November 2018.

It is anticipated that information obtained from fishermen who were questioned will reveal that around 200 Chinese fishing vessels were operating in North Korean waters. Based on another interview, it was discovered that the price of a single fishing license cost about 50,000 yuan ($7,250) per month.

The fishing vessels apparently displayed fishing permit number plates that were attached to the outside of the vessels, flown on flags, or both in combination.

These actions violate a Security Council resolution adopted in December 2017 in response to Pyongyang’s ballistic missile launch the previous month. In it, the 15-member council clarified that any sale of fishing rights by North Korea was strictly prohibited.

Last September, Japan’s Foreign Minister Taro Kono highlighted concerns about the sale of fishing rights as well as ship-to-ship transfers of petroleum products as two examples of the North’s “sophisticated efforts to evade and circumvent” past resolutions.

The resolutions were imposed on the country in escalating fashion as it carried out a total of six underground nuclear tests and numerous missile launches using banned equipment.

Each year, the panel prepares its report based on information analyzed by its eight members, who have expertise on a variety of issues such as nuclear nonproliferation and export trade control.

Full article:
N. Korea likely to be accused of illegally selling fishing rights
Kyodo News
2019-01-31

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Rice for Party membership in North Korea

Monday, January 28th, 2019

Benjamin Katzeff Silberstein

Daily NK:

“A ceremony was held in December to issue the new Party membership cards. Suddenly, the managing secretary ordered all of the new Party members to contribute one ton of rice to the state,” said a Sinuiju, North Pyongan Province-based source.

“I heard about the story right after it happened. One particular man had worked hard to become a Party member and had given bribes to higher-ups to speed up the process. So he was really taken aback by what happened.

“He was granted membership in mid-December thanks to a recommendation from his workplace and attended a ceremony later to receive his membership card. But the managing secretary suddenly told them after the ceremony ended that they had to immediately contribute one ton of rice each, which caused an uproar among the attendees.”

The man ended up borrowing rice from neighbors and friends to meet the quota, but he now faces the difficulty of having to pay back the debt, which according to current market rates amounts to over 500 USD.

“I worked hard with the belief that getting a Party membership card would be the best thing for me, but now I’ve just been saddled with debt,” he said, according to a separate source in North Pyongan Province close to the matter, who noted that “other people are in dire straits because of this.”

“People tell me that becoming a Party member isn’t as much of an honor as it used to be, and that you can survive without a membership card. All you need is money.”

The growing marketization that North Korea is experiencing has led many residents to avoid Party membership. Members are required to attend all Party-related activities and are thus less free to engage in private business activities than non-members. If Party members are caught engaging in such activities, they may be expelled and placed on a surveillance list.

North Koreans with poor “songbun,” or social status, are increasingly offering bribes to join the Party, which has led many North Koreans to believe that membership is not as prestigious as it was in the past.

Full article:
North Korean authorities demand rice from new Party members in North Pyongan Province
Ha Yoon Ah
Daily NK
2019-01-28

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Miners punished for absenteeism

Monday, January 21st, 2019

Benjamin Katzeff Silberstein

Daily NK:

“Around 50 Musan Mine workers who failed to show up for work were recently sentenced to disciplinary labor. Depending on the number of days were missed, the workers received sentences ranging from a month to a maximum of six months,” said a North Hamgyong Province-based source on January 17.

“They now have to cut down trees in the mountains and participate in construction projects. The construction projects are mainly focused on government and apartment buildings in and around Musan.”

Musan Mine has faced a number of difficulties since Kim Jong Un came to power. In mid-2013, the mine was reportedly operating well with authorities promising in September of that year to raise the wages and ration levels of miners as an incentive to increase the flow of iron ore into China. This was seen as achievable if the authorities were going to receive their expected payments from China for the exported products.

Wages for miners were increased 100-fold at the time and miners welcomed the fact that 200,000 KPW of their 300,000 KPW monthly salaries were paid as non-cash items including rice, vegetables, side dishes, daily necessities and even electronic devices.

The situation, however, did not last for long. The authorities were unable to maintain their monthly wages after North Korea’s nuclear and missile tests led to international sanctions and the banning of exports.

According to a separate source in North Hamgyong Province, as they had to earn money to survive, many of the miners chose to pay their way out of working at the mine in order to conduct private business activities at the markets, an arrangement referred to as “8.3 Earnings or 8.3 Money.”

With a legal basis in the country’s “August 3 (8.3) Movement” which calls on enterprises and factories to obtain their own raw materials for production, “8.3 Earnings” permits workers to pay a specified fee each month to their place of employment in exchange for allowing them to skip work and engage in their own private business activities.

Musan Mine, however, is seen as a critical piece of infrastructure to the North Korean state. Located in Asia’s largest iron ore depository, the mine contains an estimated 4.9 billion tons of accessible iron ore underground. Kim Jong Un’s New Year’s Address emphasized the country’s “self-sufficiency” in effect implying that Musan Mine would be a major pillar to achieving that goal.

“The authorities needed to ensure that miners not showing up for work understand who’s in control,” an additional source in North Hamgyong Province reported.

Full article:
Miners handed severe punishment for absenteeism
Lee Sang Yong
Daily NK
2019-01-21

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North Koreans swamped with state-mandated work after Kim’s New Year’s Speech

Friday, January 18th, 2019

Benjamin Katzeff Silberstein

Daily NK:

A source in North Hamgyong Province told Daily NK on Janaury 16 that “people are busy carrying out the social tasks that began earlier this year.” The tasks focus on manure collection and material support in an effort to boost production numbers in time for Kim Il Sung and Kim Jong Il’s upcoming birthdays.

“Members of the Socialist Women’s Union of Korea who conduct business in the markets rather than a formal workplace have to contribute a total of 1 ton of manure, or 150 kilos each per day,” she added. “Those working in companies have to meet their own manure targets of each collecting 10 kg of human waste, 30 kg of dog/cow/lamb or other animal droppings, and 50 kg of humus soil.”

If they fail to meet their quotas, they are forced to work night shifts. Many are having to continue working in their day jobs while also trying to meet their ‘manure battle’ quotas.

That being said, the total amount of manure authorities are targeting for collection this year is 200-500 kg (per adult). This marks a reduction from last year, and is a development that residents have expressed some relief about.

Even Socialist Women’s Union of Korea members are noting that the “situation has improved.” In the past, the government set quotas for specific types of manure to be collected, but this year it has only presented a total quota requirement. The government may be aiming to prevent any interruptions in the market activities of union members.

A separate source in South Pyongan Province said that while high school students were each given 300 kg and middle schoolers 100 kg manure collection quotas, elementary students were not given any quotas to fulfill despite previously being “unconditionally mobilized” into such drives in the past.

“Carrying sacks or backpacks, inminban leaders are going around and collecting two eggs and 7,000 won from each person within their districts for the manufacture of gifts to be handed out to children on Kim Jong Il and Kim Il Sung’s birthdays (February 16 and April 15, respectively),” he added.

In some cases in the past, residents would avoid opening their doors to the inminban leaders, anticipating that the officials were going to request donations.

Full article:
North Koreans swamped with “state-sponsored tasks” in the new year
Ha Yoon Ah
Daily NK
2019-01-18

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South Korea and the US consider what incentives to offer North Korea in negotiations

Wednesday, January 16th, 2019

Bloomberg reports that sanctions relief may be used as an incentive for North Korea in the current negotiations, by South Korea and the US. The better question is, how could it not…?

Foreign Minister Kang Kyung-wha told a news conference Wednesday in Seoul that the allies were reviewing various packages of incentives that Washington could bring to the table in the meeting. While Kang provided few details other than to say restarting stalled business projects were being discussed, the term can cover everything from sanctions relief to moves to formalize the end of the 1950-53 Korean War.

[…]

Negotiations between the U.S. and North Korea have sputtered since Trump and Kim Jong Un signed an agreement during their first meeting in June to “work toward complete denuclearization of the Korean Peninsula,” without defining the phrase or setting any deadlines. North Korea argues the deal implied a step-by-step approach, where each of its actions are met by U.S. responses, while Trump administration officials assert that Kim Jong Un accepted his country’s “final, fully verified denuclearization.”

Kim Jong Un warned in his New Year’s address this month that he could be forced to take a “new path” in talks if Trump didn’t relax sanctions pressure. He pressed for U.S. concessions to reward his decisions last year to halt weapons tests and dismantle some testing facilities, without offering additional steps.

Full article:
U.S., South Korea Mulling Incentives for Kim in Nuclear Talks
Youkyung Lee
Bloomberg News
2019-01-16

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North Koreans react negatively to KJU’s speech, says Daily NK

Wednesday, January 16th, 2019

Daily NK reports on popular reactions to Kim Jong-un’s New Year’s Speech:

“It’s winter, but those who failed to prepare for it are not going to work nor are they going to any criticism sessions, lectures or study sessions,” a source in South Pyongan Province told Daily NK. “Workers’ Party of Korea (WPK) Organization and Guidance Department (OGD) and Propaganda Department officials are not sure how to respond to the situation.”

A lecture about nuclear weapons was recently held at a farm in Sunchon, South Pyongan Province, but only 80 out of the farm’s 500 employees attended. The lecture was held again the next day after another announcement, and then only 50 people showed up for it, according to the source.

Daily NK reported in November that the North Korean authorities had begun holding lectures to commemorate the first anniversary of the state referring to it as the “day nuclear weapons were completed” and emphasize Kim Jong Un’s achievements.

According to a December 2018 article in the Rodong Sinmun, the Party Committee of the Jagang Province’s Forestry Management Department held a “commentary” and a “very emotional propaganda speech” to encourage logging during the winter, while Jagang Province’s Usi County held a number of ideological and political activities aimed at showing off the superiority of the North Korean state and encouraging greater production.

It is rare for North Koreans to deliberately avoid attending lectures held by the WPK’s Propaganda and Agitation Department in such numbers. The situation may be partly due to the fact that many factory and farm workers pay fees in order to avoid official work duties assigned to them by the state.

Fees can be paid to receive an exemption from work, allowing citizens to conduct their own private business activities. The practice took off after state-run companies and other organizations became unable to pay proper wages. Private business activities can rake in significantly more money than official wages.

Moreover, North Koreans who actually attended the lectures reacted negatively to them, saying that the lecture content is out of touch with reality.

“Those who attend the lectures don’t really listen to what’s being said – rather, they just talk about their own business and concerns about getting food and surviving the winter,” said a source in Ryanggang Province. “The lectures about nuclear weapons are so far from what concerns people that no one even listens to what’s being said.”

Article source:
Many North Koreans react negatively to state lectures
Mun Dong Hui
Daily NK
2019-01-16

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Popular mobilization for manure collection in North Korea

Tuesday, January 15th, 2019

Daily NK reports that large-scale mobilization is underway in North Korea, for citizens to gather manure for agricultural use:

The North Korean authorities have launched a new “battle” to support the aims of Kim Jong Un’s New Year’s Address, and are moving to restrict residents from engaging in private business.

The country held a massive rally on January 4 at Kim Il Sung Square to garner support for the aims set out in the address. Another rally was held outside Pyongyang where Kim Jong Un pledged to continue North Korea’s economic development.

“The government decided that the first ‘battle’ of the New Year in support of Kim Jong Un’s address was to be held from January 4-10,” said a Ryanggang Province-based source on Sunday. “Orders for the battle were handed down on January 5 and mobilization began thereafter.”

The new battle focused on the annual drive to collect manure (including night soil) for biological fertilizer from farms in the country’s agricultural regions, while city residents focused on improving their collection rates. The “manure collection” in rural areas also involved organizations and people from the cities.

In an effort to ensure that an atmosphere of total mobilization was created, local police actively restricted freight trucks, vans and other vehicles transporting goods and people from driving on the streets during the course of the battle.

“The authorities threatened to send private business people violating the order to disciplinary labor centers (rodong dallyeondae),” a source in South Hamgyong Province reported.

Local provincial governments generally engage in “battles” at the beginning of each year in tandem with the annual New Year’s Address, but it’s unusual for the whole country to hold a battle for an entire week.

Full article:
North Korea’s population mobilized for manure collection
Kim Yoo Jin
Daily NK
2019-01-15

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Mobilization for manure collection after KJU’s New Year’s Speech

Tuesday, January 15th, 2019

Benjamin Katzeff Silberstein

“The government decided that the first ‘battle’ of the New Year in support of Kim Jong Un’s address was to be held from January 4-10,” said a Ryanggang Province-based source on Sunday. “Orders for the battle were handed down on January 5 and mobilization began thereafter.”

The new battle focused on the annual drive to collect manure (including night soil) for biological fertilizer from farms in the country’s agricultural regions, while city residents focused on improving their collection rates. The “manure collection” in rural areas also involved organizations and people from the cities.

In an effort to ensure that an atmosphere of total mobilization was created, local police actively restricted freight trucks, vans and other vehicles transporting goods and people from driving on the streets during the course of the battle.

“The authorities threatened to send private business people violating the order to disciplinary labor centers (rodong dallyeondae),” a source in South Hamgyong Province reported.

Local provincial governments generally engage in “battles” at the beginning of each year in tandem with the annual New Year’s Address, but it’s unusual for the whole country to hold a battle for an entire week.

Full article:
North Korea’s population mobilized for manure collection
Kim Yoo Jin
Daily NK
2019-01-15

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