North Korean Economy Watch

AFP (Hat tip DPRK Studies)
Park Chan-Kyong
2/5/2007

Nuclear-armed North Korea is notorious for selling its missiles overseas but the hardline communist state also has a more improbable export — cute cartoon figures.

South Korean experts say the North’s animated movie industry brings the isolated country both precious hard currency and access to global IT expertise.

“Animation is one of the rare sectors where North Korea is following the global trend,” said Lee Kyo-Jung, an executive at the Korea Animation Producers’ Association (KAPA).

“It has been subcontracted to produce animation for North America, Europe and Asia,” Lee told AFP. Among the major clients are studios in France, Italy and China, he added.

Lee has visited the North to discuss the feasibility of the two Koreas jointly producing animated features, with North Koreans providing manpower and the South supplying equipment and finance.

The North for decades has used cartoons to imbue its own children with socialist ethics. Other cartoons screened there also bring some fun into drab everyday life.

“Tom and Jerry” is a prime-time hit in the communist state, Lee said. “They just love it. They see the US in the headstrong cat and North Korea in the wise mouse.”

The centre of North Korea’s animation industry is the April 26 Children’s Film Production House, known to the outside as SEK Studio. Its 1,600 animators have been downsized to 500 with the introduction of computerised equipment.

“SEK is one of the largest hard currency earners in North Korea,” said Nelson Shin, a North Korea-born US producer who worked on “The Simpsons”.

“SEK is a rare North Korean company that can directly engage in foreign trade and deploys representatives overseas,” said Shin, a frequent visitor to the North.

The state-run company worked for Shin’s US-South Korean studio KOAA Films on his 6.5-million-dollar animated feature “Empress Chung,” a Korean equivalent of the Cinderella story.

The movie was screened simultaneously in Seoul and Pyongyang in August 2005, becoming the first feature film jointly produced by the two nations.

“I was taken by surprise at their manual skill. I dare say the North Koreans are better than their peers in the South in terms of their hand skills,” Shin said.

Shin said Disney had subcontracted the TV series made for European viewers of the “Lion King” and “Pocahontas” to SEK.

North Korea’s animation industry began years before South Korea’s own in the mid-1960s. It dates back to the mid-1950s when it sent young artists to what was then Czechoslovakia to learn the craft, according to Lee of KAPA.

But South Korea has come from behind on the strength of its plentiful animators and computer technology. It earned some 120 million dollars through subcontracted work when the subcontract trade was at its peak in 1997.

Latecomers China, Vietnam and India are taking a growing share of the subcontracting market while South Korea is graduating from the labour-intensive work into creative products.

The growth in North Korean animation reflects the patronage of all-powerful leader Kim Jong-Il, a movie buff whose personal archive is said to comprise tens of thousand of films.

The country, becoming priced out of the lower-end work by latecomers, is now seeking to go upmarket to focus more on computer-assisted animation.

“For North Koreans, animation is not only a source of hard currency but also technology from the outside world. They are really keen on obtaining things like graphics technology,” said Kim Jong-Se, marketing director of Iconix Entertainment.

Iconix trained North Koreans in 3D animation when it subcontracted work to a company called Samcholli. The firm produced part of a cartoon series entitled “Pororo the Little Penguin” in 2003 and 2005.

The series turned out to be a big hit, selling in more than 40 countries.

Kim in late 2001 also helped produce “Lazy Cat Dinga,” the first animated series short of a full-length movie co-produced by the two Koreas.

“North Koreans are very good at doing what they are told but they have problems in using creativity,” Kim said.

Iconix Entertainment CEO Choi Jong-Il said both sides could benefit from splitting their roles.

“Joint projects will certainly bring benefits to both sides, with the South doing the overall planning and the North carrying out the main production,” said Choi.

After spending hours each day thinking about the North Korean economy, you sometimes need to take a break and chill.  So, I am introducing the NKeconWatch musical interlude.  This innaugural interlude is dedicated to the Marmot (who provides the link).

The Ryugyong blasts off. 

“Turn on, tune in, drop out.” -T.L.

Joong Ang Daily
Jo Dong Ho
2/3/2007

The New Year editorial is a frank admission of failure by Pyongyang.

After Kim Il Sung, the founder of North Korea, issued his first new year’s message, “Announcement to all North Korean people on the occasion of the New Year,” in 1946, those New Year’s Day messages have been an annual event in North Korea. Before the death of Kim Il Sung, they were messages of hope to the people, delivered by the Great Leader live on the achievements of the past year and plans for the new one.

So on New Year’s Day, North Koreans used to gather in front of radios or later, televisions, to participate in the “sacred ceremony” of listening to the leader’s message.

After his death, the live New Year message was replaced by a joint editorial of three newspapers, the organs of the North Korean Workers’ Party, the People’s Army and the Youth Vanguard.

That pattern was set only in 1995, but the nature of the message, the “message of hope,” was not changed at all.

But this year’s message has changed; it is gloomy rather than hopeful. Although the title, “With the high spirit of triumph, let’s open the golden days of the military-first Korea,” is colorful, in the text there are paragraphs that frankly admit the poor living conditions of today and give no hope for improvements in the near future. The text also confesses that there are no special means available to solve the many problems facing the isolated nation.

The joint editorial this year highlighted “economic revival” as the most urgent task North Korea is now facing. Departing from the traditional rhetoric of mentioning political ideology first and then going on to military affairs and the national economy, this year’s message referred to the economy first, which is unusual. Especially, this is the first time that the expression “economic development is our desperate need” has been found in a joint editorial since they were first published in 1995.

Unlike in the past, there is no detailed explanation of last year’s economic achievements. To the contrary, the editorial admitted that the economic difficulties, including food shortages, have persisted until now. The editorial says that North Korea has endured “its worst difficulties in the past 10 years” and has to solve the problem of feeding people “as it did in the past.”

That means that the North Korean economy is in very serious difficulty. Actually, there is a possibility that the North’s economy might have have had negative growth last year for the first time in seven years. Inflation is worse than ever, and the juche, or self-reliant, economy has rather crumbled into a U.S. dollar-reliant economy. The economy has deteriorated to the state where most North Korean residents cannot survive if they don’t engage in some sort of business. The focus of economic policy this year is on the improvement of people’s lives. It is unusual for North Korea, but the editorial frankly admitted that North Korea is “in desperate need” of consumer goods and even declared that the improvement of people’s lives was the “ultimate principle” that the North Korean authorities should work on attaining.

But the North Korean authorities have failed to present any practical strategies except the slogan of self-reliant economic revival. Since the beginning of the 2000s, the slogan “self-reliant revival” had disappeared, but it became the key word of the joint editorial. The editorial of the Rodong Shinmun, the organ of the North Korean Workers’ Party, even explained in its Jan. 8 issue that the spirit of this year’s joint editorial could be summed up as “building an economically strong nation and achieving self-reliant economic revival.” It is a message that “everybody should find their own way of living,” since it is not possible for the government to provide assistance to solve the many economic difficulties. But how can North Koreans solve all the economic problems with their own hands if they are not living in a primitive agricultural society? Ultimately, the North Korean authorities will have no other choice but to rely on outside help. There is no alternative but to seek help from South Korea while the North exerts diplomatic efforts of its own to ease economic sanctions.

Therefore, there is a large probability that the resolution of the North Korean nuclear problem through U.S.-North Korea talks and the six-party talks will progress unexpectedly smoothly. The joint editorial’s intensity of criticism against the United States is considerably lower than in past editorials. The U.S. strategy of using both a stick, freezing North Korean accounts at Banco Delta Asia; and a carrot, the possibility of guaranteeing the security of the regime and giving economic aid, was effective.

In order to get economic aid, North Korea will also engage South Korea in talks, a good opportunity for us. I hope we can fix the problems in that cooperation, such as the Kaesong Industrial Complex, where South Korean companies cannot employ or discharge North Koran workers by themselves or pay wages to workers directly, and rice aid to North Korea that is provided in the form of loans to avoid controversy over unreciprocated aid from Seoul.

*The writer is the head of North Korean Economy Research Team of the Korea Development Institute. Translation by the JoongAng Daily staff.

Yonhap
2/1/2007

North Korea’s weekly English-language newspaper is distributed in some 100 countries abroad, and its reporters are regularly sent overseas to receive intensive foreign language education, a pro-Pyongyang newspaper based in Japan reported Thursday.

The tabloid eight-page Pyongyang Times, launched in 1965, also runs a Web site featuring both English and French-language editions, reported the Chosun Sinbo, a Korean-language newspaper published by the General Association of Korean Residents in Japan.

“All of its reporters and newsroom staff receive professional language education, and North Korean authorities are eager to send the reporters and translators abroad for hands-on experience,” the newspaper said.

Choe Chun-sok, editor-in-chief of the Pyongyang Times, said North Korea’s October nuclear device test inspired them to continue to engage in media activities with an eye toward the world. “Recently, we dealt a lot with stories on U.S. policy to stifle and isolate our country, as well as Japan’s crackdown on Koreans living there,” he said.

Yonhap
2/1/2007

North Korea has intensified efforts to stem the spread of South Korean pop culture in the communist state, even as South Korean movies and TV dramas gain popularity there, informed sources said Thursday.

“This year, North Korean authorities waged what they call ‘psychological warfare’ against ‘exotic lifestyles’ by cracking down on South Korean pop culture,” a senior government official said, asking to remain anonymous because of the sensitive nature of the issue.

According to a survey conducted on recent North Korean defectors to the South, South Korean video tapes and CDs enter North Korea via China. North Koreans having TVs, video players or personal computers at home watch them, and then swap the programs among peers or friends, another source said.

The popularity of South Korean media has been so great that a lead actress’s line in the hit South Korean movie “Sympathy for Lady Vengeance” became a household word in the North, while some North Korean youth are glued to such mega-hit TV dramas as “Fall Fairy Tale” and “Immortal Admiral Yi Sun-shin,” the sources said.

They further explained that the wave of South Korean pop culture does not stop at movies and videos. North Korean youth also enjoy sporting South Korean hairstyles and fashion, preferring tight pants and long front hair.

Since the 1950-53 Korean War, about 9,300 North Koreans have defected to South Korea, including about 1,578 in 2006 alone. The sealed border between the two Koreas has nearly 2 million troops deployed on both sides.

Wave of South Korean Trends in North Korea
Daily NK
Park Hyun Min
2/1/2007

A wave of South Korean actors and trends such as Jang Dong Gun, Bae Yong Joon and Won Bin which has washed throughout China, Japan and Taiwan has finally hit North Korean shores. Consequently, North Korean authorities are racking their brains trying to find a solution to this problem.

This wave of South Korean trends in North Korea comes from an influx of foreign movies and dramas in the form of VCD’s and videos. In particular, the phrase “worry about yourself!” from a Korean movie “Sympathy of Lady Vengeance” has become the latest catchphrase to spread throughout the country.

Regarding this, a South Korean government official said on the 31st “North Korean youths are becoming infatuated with popular South Korean dramas such as “Autumn in my heart” and “General Lee Soon Shin’” and revealed “Defectors say that people who do not watch South Korean dramas are treated as outcasts.”

In fact, according to a survey from Hanawon, an educational training centre for defectors, a growing number of travelers now cross the boarder possessing video tapes and C.D.’s. These goods then circulate amongst families in possession of T.V.’s videos and computers, particularly Pyongyang, where South Korean dramas and music are often heard.

Popular South Korean dramas have gradually infiltrated North Korea since the late 90’s. At the time, dramas such as “The Sandglass” describing the S. Korean Kwangju affair in 1980 and “Asphalt man” gained much popularity and since 2000, dramas such as “Winter Sonata” and “Stairway to heaven” have caught the attention of North Korean youths.

These South Korean movies and dramas do not stop at mere entertainment but rather are influencing the hairstyles and fashion of young North Koreans. Nowadays, many North Korean youth adopt “knife hair,” a hairstyle with thin sharp fringe points and “drainpipe trousers” are also a hit item.

A defector who entered South Korea in 2004 said “If a person is caught circulating any copies of capitalist materials, he or she may be dragged to the political gulags. However, if a person is found to be a viewer, then he or she may receive re-education or sent to the labor training camp or the re-educational camp for 6 months.”

In response to foreign culture which is finding its way into North Korea, authorities are aiming to strengthen public propaganda in order to block foreign ideologies. In particular, North Korean authorities have began considering mobilizing its groups of military youths for rearmament.

North Korea is concerned about the balance of its regime with the demands of the whole society increasingly changing. In preparation for this, it seems that North Korea is actively investing more in the light industry in an effort to stabilize public welfare.

The folks who brought us “The Game of their Lives” and “A State of Mind”  have delivered their third DPRK-based documentary, “Crossing the Line” about four American soldiers that defected to the DPRK.  It was shown at the Sundance Film Festival this week, and sorry to Simon, Nick and Dan that you did not win.

A section of the interview with the last remaining defector, James Dresnok, was aired on CBS this week.  It was very interesting, not only because we get a glimpse into the life of Dresnok, but also his children.  Click here to see the video clip.

The story below was also published in the BBC.

BBC
1/23/2007

In the 1960s four US soldiers separately defected to North Korea, and were little heard from again.

Now one – the last known former American GI left in the country – has spoken for the first time to British documentary-makers.

James Dresnok is something of a celebrity around the North Korean capital Pyongyang, his home for the last 44 years.

Unmissable thanks to his 6ft 5in height and bulky frame, the 64-year-old has appeared in North Korean films, taught English at university and been a propaganda hero for the Communist nation.

“I have never regretted coming to [North Korea]. I feel at home,” he says, in the documentary Crossing the Line, which premiered at the US Sundance Film Festival on Monday.

James Dresnok was a 21-year-old army private when he decided to leave his post in South Korea one August afternoon in 1962 to cross into the North.

Three months earlier, Private Larry Abshier had become the first known US soldier to defect to the North, while patrolling the demilitarised zone between the two Koreas.

In the three years that followed, Specialist Jerry Parrish and Sergeant Charles Jenkins would follow Abshier and Dresnok across the border.

The four, who initially lived in the same house, found their new life tough in the early years. Mr Dresnok admits he did not want to stay. “I didn’t think I could adapt”.

A joint bid for asylum at the Soviet embassy in 1966 was rejected and the four were forced to undergo intense re-education, which included learning North Korea’s official Juche ideology.

It was at that point, Mr Dresnok says, that he decided he would try to fit in. “Man is the master of his life, and little by little I came to understand the Korean people,” he said.

All four married, were granted North Korean citizenship and – apart from starring as evil capitalists in a propaganda film called Nameless Heroes in 1978 – appeared to drop off the face of the earth.

In fact, so little was known about them that Larry Abshier had been dead for 13 years when the US defence department said, in 1996, it believed all four men were still alive. Jerry Parrish had in fact died in 1996.

Persistence

UK documentary-maker Daniel Gordon and his Beijing-based co-producer Nick Bonner were already familiar to North Korea’s film-making authorities when they asked them about the rumours of the four defectors.

Their 2002 film, The Game of Their Lives – about the North Korean football team that beat Italy in the 1966 World Cup and qualified for the quarter finals – had been a huge hit in the country.

They were working on their second film, A State of Mind – following two North Korean schoolgirls preparing for the mass games – when they asked for permission to make a film about Mr Dresnok and the others.

“We were initially told it was absolutely impossible,” Mr Gordon explained, “but we took that to mean it was possible.”

In June 2004, at a meeting they thought would be with the North Korean authorities, the filmmakers were brought face-to-face with James Dresnok and Charles Jenkins for the first time.

“The two men weren’t wholeheartedly keen on making the film. It had the potential to blow up in their faces. But at the end of the two-and-a-half hour meeting, they had come round,” Mr Gordon said.

Within five weeks of the meeting, however, Charles Jenkins’ story became known to the whole world when he left North Korea to be reunited with his wife in Japan.

Privileged

While the documentary is about all four defectors, the focus is undoubtedly on James Dresnok who is filmed fishing, going to a restaurant, the opera and having a medical check-up.

“I found him a fascinating guy,” Daniel Gordon says. “He has had such a unique experience of life.

“It is hard to understand from our perspective why an American soldier would choose to make his life in arguably the biggest US-hating nation on earth.”

James Dresnok describes how an unstable childhood and his first wife’s infidelity left him with a sense of hopelessness before he crossed the line into the North.

Since his defection, he has been married twice and has three children.

He taught languages and carried out translating work even though he, like the other three, had dropped out of school by the age of 15.

And he also appeared in several other films, apart from Nameless Heroes, and is still referred to as Arthur after a character he once played.

Mr Dresnok admits he lives a privileged life by North Korean standards, confessing that he got rice rations during the deadly famines of the late 1990s while others were starving.

“The government is going to take care of me until my dying day,” he tells the documentary team.

Daily NK
Kwon Jeong Hyun
1/25/2007

Since last year, North Korean authorities have been attempting to cut off all kinds of capitalist culture. Hence, another extensive hunt for Korean videos and radio broadcasts continues on.

North Korean authorities formed “109 Inspection Team” consisting of authority officials, inspectors from the National Safety Agency and Social Safety Agency, who have been focusing on regulating the major cities for watching and selling foreign VCDs. As of this year, the regions for inspection has extended to the provinces, an inside source informed. The regulations seem to have become an annual event.

The source from North Korea said “About 50 people who were caught watching foreign videos in the district of Woonsan, North Pyongan and now are being investigated” and “The preliminary hearing for about 10 people with no connections or who could not offer bribes, also the people found to be directly circulating the videos has ended and are now waiting a sentence.”

During the 80’s, video tapes were controlled by intercepting with electricity and any family found with videos in their video players were individually restrained. However, many families with video players also had chargers and so this method was ineffective. Now inspector groups consisting of 10~20 people have search warrants to thoroughly check all parts of the home.

The source said “The people sentenced will probably get sent to the labor training corps but of these repeaters if any person has issues with ideologies or are condemned as responsible for selling the videos, then they will be sentenced to jail.” The source added “People who are sentenced to jail because of videos are normally imprisoned for 4~5 years, but many are released after 2~3 years on special occasions like Feb 16th (Kim Jong Il’s birthday) or April 15th (Kim Il Sung’s birthday).”

On a different note, the latest issue of Democratic Chosun (issued on January 13), the government paper, obtained on the 20th stated “Imperial activists are sticking to us from within until death in order to sow the seeds of capitalist” and ordered a firm response “We must stick to them (capitalists) and austerely cut them off.”

Asia Times
Bertil Lintner
1/18/2007

While the West and Japan have targeted North Korea’s overseas bank accounts to curtail its weapons program, Pyongyang has recently turned to more ingenious ways of maintaining its international businesses through substantial exports of gold, silver and other valuable metals.

Pyongyang has apparently found a willing conduit to global buyers through its many business connections in Thailand, which has recently emerged as the isolated state’s third-largest trading partner after China and South Korea. According to official Thai Customs Department statistics, North Korea shipped 500 kilograms of gold worth 398 million baht (US$11 million) to Thailand last April.

The following month, another 800kg of gold worth 635 million baht landed in Thailand courtesy of North Korea. Also, in June, 10 tons of silver worth 148 million baht was sent from North Korea to Thailand, followed by 12 tons worth 166 million baht last October.

In sum, North Korea exported 1.35 billion baht – or nearly $40 million – worth of precious metals to Thailand last year.

That is a substantial figure for North Korea, a country with an estimated gross domestic product of about $22 billion and whose total exports amounted to just over $1 billion, according to official statistics. Thailand is bound by the international sanctions imposed last October against North Korea by the United Nations in response to Pyongyang’s exploding an atomic bomb.

According to official Thai statistics, the gold and first consignment of silver were shipped to Thailand before the UN sanctions were imposed. But there is nothing illegal in North Korea exporting precious metals, unless, of course, the income from the sale can be tied directly to the country’s controversial weapons programs, which anyway would be extremely hard to prove.

Untapped riches
North Korea’s gold and silver mines remain largely untapped. According to Tse Pui-kwan, a Chinese-American chemist who joined the US Bureau of Mines in 1990, North Korea has significant deposits of copper, gold, graphite, iron, lead, magnesite, tungsten and zinc. When the Cold War ended and North Korea lost large amounts of foreign aid from both the Soviet Union and China, its mining industry fell into disrepair and extraction activities sharply declined.

But with new foreign cooperation, production has resumed, which the recent exports to Thailand clearly demonstrate. North Korea’s main gold mine is in Unsan county in North Pyongan province, about 150 kilometers north of Pyongyang. It was originally opened by a US firm in 1896, when Korea was still an independent and unified kingdom, and was later taken over by a Japanese company when the peninsula became a colony ruled by Tokyo in 1910.

Nearly a century later, consultants from Clough Engineering of Australia in 2001 inspected the same mine under the sponsorship of the United Nations Office for Project Services. They estimated that Unsan held 1,000 tons of gold reserves, which if true would make it one of the world’s major gold mines. Silver is also mined in the same area, while iron ore and magnesite are found in North and South Hamgyong provinces in the northeast.

North Korea’s extraction techniques are sometimes controversial. According to witnesses interviewed by the US Committee for Human Rights in North Korea for its 2003 report “The Hidden Gulag: Exposing North Korea’s Prison Camps”, there is a gold-mining labor camp near Danchun in South Hamgyong province, where thousands of prisoners are being held and forced to work under abysmal conditions.

In that same report, several witnesses claimed that “some of the mine shafts dated back to the early days of the Japanese occupation of Korea in the early 1900s. Accessing the veins of minable gold required descending and, later, ascending a wooden staircase 500 meters in length, using gas lanterns for light. Deaths from mining accidents were a daily occurrence, including multiple deaths from the partial collapse of mine shafts.”

The first attempt to modernize North Korea’s gold-mining industry was made by an Italian financier and former Foreign Ministry official, Carlo Baeli, who traveled to the country in the early 1990s and claims to be the first Westerner to do business with Pyongyang since the Korean War. He later wrote a book called Kim Jong-il and the People’s Democratic Republic of Korea, which was published in Pyongyang in 1990, obviously with official permission as it was printed by the state-owned Foreign Languages Publishing House.

Apart from painting a flattering portrait of the North Korean leader, the book describes Baeli’s first trip to Pyongyang in 1990, of which he wrote, “We were interested in investing in the mining industry, mainly in the extraction of gold and granite.” Baeli later signed a contract for a loan of $118 million to purchase mining equipment, and the goal was to resurrect no fewer than six gold mines across North Korea. The money was to be provided by international banks such as Midland Bank and the Naples International Bank. He also arranged for the mining equipment to be shipped from Italy.

But heavy flooding in the mid-1990s damaged both the equipment and the mines and, according to a 2006 report in Forbes magazine, Baeli today works as an adviser to the Pyongyang government at a tire-recycling plant. The car and truck tires are imported from Japan, get ground into granulate in North Korea, and are sold to China for road resurfacing, car mats and shoe soles. A lucrative business, perhaps, but not quite the golden dream Baeli had when he first arrived in Pyongyang nearly 17 years ago.

Another unusual partner in North Korea’s gold trade may have been the late Philippine dictator Ferdinand Marcos. In August 2001, the right-wing South Korean newspaper Munhwa Ilbo published a story claiming that Marcos in September 1970 had deposited 940 tons of gold bars at a Swiss bank in the name of the late North Korean dictator, Kim Il-sung. The report came from a former Marcos aide, and Munhwa Ilbo carried a copy of the bank-account certificate on its front page. The alleged gold bars were part of what a Japanese army general had looted from Asia during World War II, Munhwa Ilbo claimed.

That report was never independently confirmed, but it nevertheless reflects the mystique and speculation that still surround North Korea’s gold industry – and how little the outside world actually knows about it.

Financial pressures
When the US took action against Banco Delta Asia in Macau in September 2005, labeling it a “primary money-laundering concern” for North Korean funds, very little evidence to substantiate the charges was ever produced. North Korea lost $24 million when the accounts it held with the bank in the name of a front company, Zokwang Trading, were frozen. Zokwang, which had been operating in Macau for decades, also closed its office and relocated to Zhuhai province across the border in China proper.

The action against Banco Delta Asia, a privately owned bank that the Macau government later had to prop up to prevent it from collapsing, was the second move against North Korea’s assets abroad. In a much less publicized action, North Korea’s only bank located in a foreign country – the Golden Star Bank in Vienna – was forced to suspend its operations in June 2004. The Golden Star was 100% owned by the Korea Daesong Bank, a state enterprise headquartered in Pyongyang, and was allowed to set up a branch in the Austrian capital in 1982.

For more than two decades, Austrian police kept a close eye on the bank, but there was no law that forbade the North Koreans from operating a bank in the country. Nevertheless, Austria’s police intelligence department stated in a 1997 report: “This bank [Golden Star] has been mentioned repeatedly in connection with everything from money-laundering and distribution of fake currency notes to involvement in the illegal trade in radioactive material.”

Eventually the international pressure to close the bank became too strong. Sources in Vienna believe the US played an important behind-the-scenes role in finally shuttering Golden Star’s modest office on 12 Kaiserstrasse in the Austrian capital. Until then, Vienna had been North Korea’s center for financial transactions in Europe and the Middle East. Visitors to North Korea have noted that euro coins in circulation in the country – the US dollar is not welcome in Pyongyang – invariably came from Austria. (Euro notes are the same in all European Union countries, but coins designate individual member countries.)

Last October, in response to Pyongyang’s nuclear tests, Japan froze a dollar-denominated account that North Korea’s Tanchon Commercial Bank held with an unnamed Japanese bank. The account had a balance of $1,000 and had not been active for nearly a decade, so the move was mainly symbolic: to demonstrate to North Korea that it cannot use banks in Japan for any deposits, big or small.

So it is hardly surprising that North Korea is looking for new ways to manage and maintain its international business interests and for new partners when it is increasingly locked out of most foreign countries. That is where Thailand apparently comes into the picture.

In 2004, trade between Thailand and North Korea for the first time overtook trade between Japan and North Korea. Previously, a string of North Korean-controlled front companies, managed by the Chosen Soren, or the Pyongyang General Association of Korean Residents in Japan, had supplied North Korea with computers, electronic goods and other vital items.

In 2003, North Korea’s total trade volume to Japan was just over $265 million and fell even lower in 2004. At the same time, trade between Thailand and North Korea rose to more than $331 million in 2004. Two-way trade between Thailand and North Korea totaled $328 million in 2005, with Thai exports to North Korea amounting to $207 million and North Korean imports to Thailand totaling $121 million.

During January-November 2006 – the latest statistics available from the Thai Customs Department – trade totaled about $345 million, with Thai exports accounting for $200 million and North Korean imports $145 million. Thai imports of gold and silver have pushed those trade figures higher.

North Korea’s trade with Thailand grew mainly under the previous government of Thaksin Shinawatra, who at one point proposed signing a free-trade agreement between the two countries. In August 2005, Thaksin was formally invited by Kim Jong-il to visit Pyongyang. The visit never materialized, and since Thaksin was ousted last year in a military coup, the future of Thai-North Korean relations is very much in doubt.

But gold and silver are highly fungible and North Korea apparently has lots of the commodities. It appears Kim Jong-il has for now found at least one golden path around the international sanctions imposed against his regime’s nuclear tests.

Well, if you are tired of paying all those middlemen for your treasured copies of The Great Leadership for the Victory of Building the Powerful State or The Great Leader Kim Jong Il Gives on-the-Spot Guidance to Various Sectors (Part 11), then www.NKeconWatch.com would like to point out where you can get these and other fine publications right from the horses mouth: Korean Publications (their site is a little slow).

Daily NK
Han Young Jin
1/10/2007

“North Korea’s Idolization – 40% of National Budget”
Enshrining Kim Il Song’s body at Kumsu Mountain Mausoleum – $890m

[edited-I shortened it a bit and corrected the author’s cinfusion of Kim Jong Il with Kim il Sung]

As Kim Jong Il made his appearance on the scene as successor in the 70’s, within 10 years the entire nation was covered with statues, and even today construction has not stopped.

Recently, historical monuments to Kim Jong Il’s great deeds have been constructed. at Jakangdo Weewon Electric Power Plant, North Pyongan Province Changsong County, Yupyong; South Hamkyong Province Yonpo; North Pyongan Province, Hyangsan County, Sangso-ri; and Yomju County Yongbok-ri, Bakchon County, Dansan-ri.

At recently constructed monuments, mosaics of Kim Chong Sok (Kim Jong Il’s birth mother) made of colored glass, tiles, and natural stone are prevalent.

North Korea’s Kim Jong Il is not wasting money worthlessly by creating this idolization propaganda. The reason that the construction of these monuments has not stopped, even during a period of economic crisis, is because his intention is to use the vulnerabilities of citizens and young people to induce a spirit of sacrifice as they gaze on the Great Leader and the General (Kim Jong Il)

Of course, although among adults there are not many who like Kim Jong Il, he is the leader of the country and is still going strong, the intention is to arm the youth with a way of thinking that tells them it is wrong to betray the General.

140,000 Idolization Propaganda Items

The most representative of all of the idolization propaganda is [Kimil sungs] resting place at the Gumsusan Masoleum.

In addition to the Masoleum, if you include the entire collection of each type of Kim il Sung idolization statues, Revolutionary Spirit Institutes, Historical Places, Battlefields, On-the-Spot Guidance Memorials, Eternal Towers, Slogan Boards and Engraved Slogans, and (the Kim) family’s idolization propaganda materials, the figure reaches about 140,000.

There are about 70 statues of [Kim il Sung] nationwide, erected on the hill at Mansudae and at each Province location. While there are [Kim il Sung] statues in the gardens of each National Security Agency building, there are Kim Father and Son plaster figures at each of the Research Institutes.

Nationwide, there are 200 Kim Father and Son Research Institutes; one large scale facility in each city and county, one each at national government and cabinet level agencies, and one at each of the city and county offices subordinate to the People’s Safety Agency, Regional Public Security Office, and the National Security Agency have been constructed. The size, furnishings, and maintenance of these institutes are better than that found in museums in the South.

Additionally, although small in size, Kim Father and Son Research Institutes can be found at each village and labor district. As there are about 30 villages and labor districts in each city-county, nationwide there are about 6,000 (200 X 30 = 6,000) of these institutes. The condition and furnishings of these buildings are the best in North Korea.

In the villages or labor districts, one of these institutes can be found at each subordinate farm, large operational team, 2nd Class and higher agricultural enterprises, and at each North Korean Army battalion and larger size unit. Taking these into account, nationwide there appear to be tens of thousands of these Kim Father and Son Institutes.

In the countryside, one can find representative idolization and propaganda figures nationwide in the construction of Eternal Towers and Jongil Peaks at Kumgang Mountain, Myohyang Mountain, etc., and slogans idolizing Kim Father and Son can be found on natural rocks.

The Eternal Tower found at the center of every province, city, county, and labor district nationwide, is commonly referred to as the “Longevity Tower.” The tower was inscribed with “We respectfully wish for our Great Leader’s longevity,” however, after Kim Il Song’s death in July of 1994, the inscription was changed to “”The Great Leader is with us forever.”

During 1996-1997, when millions starved to death, the citizens complained loudly about the importation of granite and special cement from overseas for use in the construction of these towers.

Constructing Idols with Special Materials Imported from Overseas

The statues and gypsum figures found at the Kim Father and Son Institutes, as well as other art forms are created and maintained by Art Creation Companies located in each of the Provinces, including the Mansu Dae Creative Company, and the April 15 Cultural Creative Team.

Within the Mansu Dae Creative Company is separated by categories consisting of the Arts and Crafts Creative Team, the Business Art Creative Team, the Engraving Art Creative Team, the Cinema Creative Team, the Statue and Gypsum Creative Team, and the Chosun Paintings Creative Team, and specializes in creating symbols used to idolize Kim Father and Son.

Creations in the image of Kim Father and Son are made by Creative Branch Number 1. No one other than those assigned to Creative Team Number 1 can manufacture this type of art. Those assigned to this team have received special certification that allows them to draw the images of Kim Father and Son, only after having passed a political test and receiving certification from the Party, and certification of their skill.

While there are about 500 people working in the Mansu Dae Creative Company, the Art Creation Companies in each of the Provinces have about 30 in residence propaganda agitators in each of the cities and counties. The Special Finance Branch of the central government provides unlimited funding to cover the costs required to manufacture these items, and provides appropriations for purchasing high quality goods from overseas.

Covering tens of thousands of square meters in the Baekdu Mountain area, there are Grand Monuments at Bochonbo, Samjiyon, and the Hwangjae Mountain area where several thousand people manage idolization propaganda materials.

If Kim Father and Son have been to any of the Historical Revolutionary sites or battlefield sites, a museum is constructed there. For example, if Kim Father or Son has visited a farmhouse, persons at the farmhouse are no longer permitted to enter it, and personal effects are thereafter protected and managed by experts.

When Labor Party propaganda workers come up with a new competitive idolization idea, it is a happening that calls for a humorless presentation. When visiting Songjin Steelworks, Kim Il Sung used his hand to gauge the thickness of a steel plate and the very next day this several ton piece of steel was taken to the museum and placed on display. In this way, the competition among flatterers to display their loyalty has become a reason for the sharp increase in idolization propaganda.

Damaging Nature with Carved Slogans

At spots of beauty like Baekdu Mountain and Mohyang Mountain, etc., there are colossal carved slogans on the mountainsides.

▲ At Sobaeksu Valley, the professed hometown of Kim Jong Il, the six granite letters of the “Jong Il Peak” slogan placed on the mountain at Changsu Peak weighs 60 tons each and were put in place by helicopter.

▲ At Hyangno Peak on Mount Gumgang, the letters in the mountainside slogan “Chosun’s Famous Gumgang Mountain Is The World’s Famous Mountain. Kim Il Sung – September 27, 1947,” are 20 meters high, 16 meters wide with stokes of each character 3 meters, and a depth of 1 meter.

▲ On the rock at Mohyang Mountain’s Yusan Waterfall, the letters in the slogan “The Comrade Great Leader Kim Il Sung Is With Us Forever – July 8, 1994,” are 3 meters high, 2.3 meters wide and the letters “Kim Il Sung” are 3.2 meters by 2.5 meters.

▲ The letters at Gumgang Mountain Manpokdong and Bopguidong waterfalls reflecting “The Great Leader Kim Il Sung Is With Us Forever – July 8, 1994,” are 8 meters high and 5 meters wide.

▲ The engraved letters at Gumgang Mountain’s Waegum River Guryong Waterfall that reads “Chosun! Let’s Boast of our 5,000 Year History – Honored to Have Escorted the Comrade Great Leader Kim Il Sung – July 8, 1994,” are 4 meters high and 3 meters wide and the letters at Gumgang Mountain Gukji Peak saying “Hangil’s Female General Kim Chong Suk,” are 5 meters by 6 meters.

▲ Baekdu Mountain’s Hyangdo Peak’s “Baekdu Mountain – The Revolution’s Holy Mountain – Kim Jong Il February 16, 1992,” is done in embossed white lettering so that when it snow they won’t be covered.

▲ Gumgang Mountain’s Oknyo Peak lettering that reads “Gumgang Mountain is Chosun’s Driving Spirit – Kim Jong Il,” is 11 meters high and 8 meters wide.

In addition to this, Kim Father and Son idolization slogans on trees and engravings can be found in uncountable numbers at every well know place and tourist spot across the nation.