North Korean Economy Watch

Korea Times
Kim Yoo-chul
9/28/2007

Samsung Electronics and LG Electronics are considering expanding investment in the TV business in North Korea, according to company sources Friday.

Such expectations came after the government confirmed that Samsung Group Vice Chairman Yoon Jong-yong and LG Group Chairman Koo Bon-moo will join President Roh Moo-hyun’s entourage for the inter-Korean summit on Oct. 2-4.

Expectations have arisen among business groups that the second inter-Korean summit will produce substantial results in creating more business opportunities in North Korea, though big firms responded less enthusiastically than they did seven years ago.

“As our vice chairman will go to North Korea, we will start reviewing the North Korean business,’’ a Samsung spokesman told The Korea Times.

Asked about the possibility to expand production of cathode-ray TVs (CRT) in the North, the spokesman declined to elaborate.

But a source familiar with the situation raised the possibility of more production of CRTs.

Samsung began producing CRTs in the reclusive country on an original equipment manufacturer (OEM) basis since late 2000, the year then President Kim Dae-jung visited the North.

LG, which has produced between 15,000 and 20,000 CRTs in the communist state since 1996, is also considering expanding its TV business there in a long-term perspective.

“Nothing has been confirmed yet. But the issue is a possibility,’’ an LG spokesman said.

He said there will be more discussions after Chairman Koo returns from Pyongyang.

Daily NK
Kim Min Se
9/19/2007

It was reported that the North Korean high officials and Chinese emigrants have been using the satellite antennas in Pyongyang and major cities in North Korea to get access to South Korean TV.

Previously it has been reported that the high quality antenna (Yagi Antenna) smuggled from China was used to intercept the South Korean ground waves, which allowed them to listen and watch South Korean news and drama through Japanese televisions in secrecy in Kaesung and Pyongyang.

The “Yagi Antenna” is a VHF receiver which is intercepted for television. This type of antenna is utilized as a receiver for waves from South Korean soil which has high risk of being detected by outside and enforces its usage around nighttime.

However, recently the high officials in North Korea use satellite antennas in secrecy to watch South Korean news and drama. Due to the restriction, the number of people utilizing this satellite service is restricted.

Song Myung Hak (pseudonym), a Chinese trader who went to Pyongyang last month said, “I was surprised to get a request from a friend of mine who worked as a North Korean diplomat on his request to obtain the CD of ‘Ways to Meet a Perfect Neighbor’ (South Korean drama series broadcasted on SBS). He said that he is watching it via satellite but he wanted to recap the episodes he missed.”

Song stated that, “The former diplomat had the satellite dish in his veranda and his entire family was watching South Korean TV. With the expansion of the culture of viewing South Korean TV, Kim Jong Il issued a ban, which is making everyone a bit nervous.”

He said, “If they get caught watching South Korean TV, the family could suffer.” He also added, “Because he was a former diplomat, who was used to living overseas and the life abroad, it was difficult for him to resist the temptation of watching South Korean TV and foreign news. I’m sure it’s the same way for all people.”

Song stated that, “The satellite dish is imported through China to North Korea. The most recently produced satellite dish is quite small in size and China takes care of the maintenance so all they have to do in North Korea is connect it to the TV.”

Kang Myung Gil (pseudonym), a South Korean businessman selling regular satellite antenna and satellite broadcasting Skylife on commission in Dandong, China, explained over the phone that, “The normal satellite antenna (antenna and receiver) costs 600 Yuan (approx. USD86) in total, including the installation costs. We are also receiving the service of Koreasat Mugunghwa 2 which can be received from North Korea as well.”

Kang said that, “There is no technical difficulty in receiving South Korean TV if they are on an elevated apartment with spacious veranda heading the Southern direction. All of the 7-8 channels including KBS1, KBS2, SBS, MBC, EBS, China HAO TV and others can be directly received.”

Jin Hee Myung (pseudonym), an Chinese emigrant originally from Shinuiju, also installed satellite broadcasting service in her apartment. He said that even though overseas Chinese are also under surveillance, they do not receive as harsh of treatment by the North Korean authorities.

He added, “My wife loves to watch South Korean drama so much that I had to risk the consequences and install it. The satellite dish is so small that unless our house is searched thoroughly, there is no worry of being caught.”

In North Korea, if one is caught watching South Korean TV for a long time, they may be put into jail or receive harsh punishments. However, it is the experts’ general analysis that with the expansion of foreign cultures, it will be more difficult for North Korea to control this trend.

Choson Ilbo (Hat Tip DPRK Studies)
8/30/2007

Three South Korean terrestrial TV stations agreed in July to pay tens of millions to North Korea annually for footage from North Korea’s state-run Korean Central Broadcasting Station. An SBS executive said South Korean TV stations have used TV pictures aired by KCBS for free, but in July, the Korean Foundation for South-North Economic and Cultural Cooperation, as a proxy of the North Korean TV station, concluded negotiations with three TV stations whereby SBS will pay about W20 million every year to KCBS through the foundation. MBC will pay slightly more than that, and KBS will pay about W30 million.

The foundation, chaired by United New Democratic Party member Im Jong-seok, was established in 2004. It held talks with the three terrestrial networks for a year and a half. In the talks, the three argued it was unreasonable for South Korean TV stations to pay for North Korean footage in programs that aim at promoting mutual understanding, and they generally rejected the idea of unilaterally paying North Korea when the North does not pay South Korean broadcasters for footage.

Daily NK
Han Young Jin
8/6/2007

Frequently in the last couple years, it’s been said within North Korea and among defectors that “North Korea has changed a lot.”

North Korean citizens say, “North Korea is not in the same situation as it was in 10 years ago. The biggest difference is that nowadays, people will do whatever it takes to make money. Also, they confidently raise their opinions to the authorities.”

It is hard to find merchants being called out as “opportunist factions.” It’s also different than the mid-90s when people would sell whatever they could. The market is specializing in items and broadening as well. The market is taking its form.

North Korean authorities have also expanded micro-level autonomous management systems to factory enterprises as they are unable to give out rations.

Of course there are people who make ends meet but most people are merchants. It is hard to find people who work as “servants” or housemaids or people who starve to death. They unanimously say, “It is enough to suffer once. Even cows don’t fall into pits that they’ve fell into once.” This is to say that there will no longer be horrific incidents such as the Great Famine of the mid-90s.

We listened to five defectors who recently entered South Korea on changes in the situation of North Korean residents.

I’m the one who farmed

“I’m the one who farmed. Why should I hand it over to the government?” Defector Kim Kyung Sik [pseudonym] from Onsung, South Hamkyung Province, who came to South Korea in March, 2007 says, “There was an incident with a riot as laborers collectively protested the increase of land tax in 2006.”

After the measures taken on July 1st, 2002, North Korea had laborers other than farmers farm on designated areas according to household and expanded the policy of submitting a portion of the harvest to the government.

Concerned that this measure would be seen as a revolutionary liberal step, North Korea assigned the land according to company title and gave a square around 992 meters to each laborer in the company.

Kim said, “As people farmed on their own land, laborers would work wholeheartedly and there would not even be a patch of grass on the farming land. Because people would find some way to get fertilizer to spread, the size of the fruits was also different.”

He said, “As it became fall, the Management Committee (collective farm’s Leading Group) and the collective farm who had designated the land gave orders to hold off on the fall [harvest] until the standards of grain exchange came from above. Along with this an incident occurred and tens of laborers protested.”

Choi, a woman from the same region said, “As the laborers of Onsung Mine were told to submit 10% of the yield to the government, laborers strongly opposed saying ‘Who had farmed this?’ ‘Why should we hand it over to the government?’ It happened in 2003.”

Accordingly she said, “After dividing the land to the laborers, there has been a sharp decrease in the number of people starving. It will be hard to reverse such tide of change.”

Increase of “Audio-Video Places”

Recently in large cities of North Korea, places to screen multimedia CDs or videos called “Audio-Video Places” – comparable to video rooms in South Korea – have increased. As it is set in a square 50 meters that is decorated like a small theater and plays movies, citizens of the region have been reacting positively.

Defector Suh Kang Chul [pseudonym] from North Hamkyung Province Chongjin who had defected July 2006 said, “There are three screening rooms around the Chongjin Train Station. It is 50 won to see a film. You must watch 2-3 films at once to be satisfied. This is not a small amount of money.”

Screening rooms of North Korea renovate the interior of a building and with the goal to screen “North Korean or Russian films,” they receive the government’s approval. However, most play Chinese or Hong Kong movies. As long as they don’t play South Korean, American, Japanese or pornographic films, there are no severe punishments. The reason people go to screening rooms is because movies are screened for 24 hours without a power outage.

Suh said, “If there is a power outage, the store owner hurries to change to a car battery to play the film. The films people like are Bruce Lee’s “The Big Boss” (1971) and “Fists of Fury” (1972) or Jet Li’s action films.”

Foreign multimedia have been a strong catalyst to change the thoughts of North Koreans. Even Korean dramas that have been copied on to CDs have secretly spread the “Korean Wave” in North Korea. Bae Yong Joon of “Winter Sonata” is recognized as a famous actor.

Many years ago, the “109 Inspection Team” (Bureau to oversee VCDs and videos) was established to regulate illegal screenings and even on the 3rd, in the name of the People’s security, there was an order that “Public officials, institutions, entities and groups must rid all karaoke rooms, movie rooms, computer rooms that were established without the government’s approval for the purpose of making money.”

However, Kim says, “as the ratings of Korean dramas rise, it becomes a situation that cannot be controlled.” Thus, most of the viewers are tied to the Security Agency or an acquaintance of the People’s Safety Agency that it will not be easy to eradicate this problem.

North Korean authorities have made declarations on the “Exposure of Liberalist Corrupt Culture” but in reality the regulating institutions have stopped at indirect responses.

In a phone conversation with a reporter on the 2nd, an internal North Korean news source also said, “It is planned that the Great North Korean Defamatory Broadcasting that was based around the Kaesung area will now move to the Tumen River area. People have been saying that there have been many cases where people are tricked into believing the broadcasting and betraying the country or watching Korean films to get fantasies and crossing the border, but such acts will be severely punished.

Since China’s star Olympic athletes have signed endorsement contracts with western sports apparel firms, their Chinese competitors have looked to the “Land of the Morning Calm” to help them cash in on the ‘08 Olympics (and beyond)…

Press release here (PDF): News_Release_Sponsorship_17Jan07.pdf

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Female Weightlifters, Spanish Basketball Stars, and Kim Jong-il
Slate
Jacob Leibenluft
7/25/2007

Chinese companies can’t compete with the world powers when it comes to locking up megastars. Olympic gold-medalist hurdler Liu Xiang, who will likely emerge as the biggest Chinese star of the Beijing games, has a deal with Nike. One of China’s leading sports-marketing consultants told me that every starter on the national basketball team has a deal with a foreign brand. Yi Jianlian, whom the Milwaukee Bucks selected with the sixth pick of the NBA draft, had a Nike contract by the time he was 16.

…

At the same time, Chinese shoe companies’ Billy Beane-like quest for hidden value has led to a few questionable decisions. Most sneaker companies would shy away from sponsoring the North Korean Olympic team. At the 2004 Summer Games in Athens, the DPRK won a grand total of five medals, none of them gold. Besides, the Hermit Kingdom doesn’t exactly conjure up the kind of brand associations most shoe companies are looking for. But Erke’s sponsorship of North Korea has a simple explanation. North Korea’s strongest sports include gymnastics, table tennis, and diving, all of which draw huge support and TV audiences in China.

Download it to your Google Earth here! 
(substantial improvements over version 1)

Using numerous maps, articles, and interviews I have mapped out North Korea by “industry” (or topic) on Google Earth. This is the most authoritative map of North Korea that exists publicly today.

Agriculture, aviation, cultural, manufacturing, railroad, energy, politics, sports, military, religion, leisure, national parks…they are all here, and will captivate anyone interested in North Korea for hours.

Naturally, I cannot vouch for the authenticity of many locations since I have not seen or been to them, but great efforts have been made to check for authenticity. In many cases, I have posted sources, though not for all. This is a thorough compilation of lots of material, but I will leave it up to the reader to make up their own minds on the more “controversial” locations. In time, I hope to expand this further by adding canal and road networks.

I hope this post will launch a new interest in North Korea. There is still plenty more to learn, and I look forward to hearing about improvements that can be made.

Daily NK
Kim Young Jin
6/12/2007

Recently, it has been reported that businesses in charge of facial plastic surgery and skin maintenance are becoming more popular among the wealthy class.

Through a survey DailyNK conducted on actual living conditions in the Northeast region of North Korea, it was discovered that massage rooms, steam baths, beauty-related enterprises (plastic surgery and skincare maintenance) are the main thriving businesses.

Beauty-related businesses such as these prevail in relatively large-sized cities, such as Chongjin in North Hamkyung, Hamheung in South Hamkyung, and Wonsan in Kangwon. This trend seems to follow the up and coming wealthy class who have risen through doing business in North Korea.

Skin maintenance and plastic surgery which has caused a stir among the women in Shinuiju and Pyongyang have spread to inland countrysides within the last several years.

Double eye-lid surgery, eyebrow tattoos, and others can be simply performed by a plastic surgeon doctor or beauty operation specialists, so it has been widely popular among young women.

The cost of plastic surgery, in the case of double eye-lid surgery, was 500 North Korean won per one-eye in 2004, but the asking price has been 1,500 won since 2006. The North Korean exchange rate was recently 2,980 won per dollar.

In addition to double eye-lid surgery, breast augmentation has been spreading to a portion of upper-class women. The popularity of the breast enlargement surgeries demonstrates an encouragement of beauty among North Korean upper-class women.

◆ “Massages” a rage, centered on large-scale cities = Chinese-style health massages cost around 10,000 (US$3.4) North Korean won per hour and for an additional 2~30,000 won, on-the-spot sex with a female masseuse is possible.

This survey, based on the latter half of May, took place by focusing on the price of commodities in five cities, such as Kim Chaek and Chongjin City in North Hamkyung, Danchun and Hamheung in South Hamkyung, and Wonsan Kangwon.

The results of the survey showed that the region with the highest standard of living in the Northeast region is Wonsan City of Kangwon. The reason why Wonsan has a relatively high standard of living is that it has been a central place of trade with Japan.

If North Korea and China’s trade can be represented by Shinuiju, then Wonsan has played that role with trade with Japan. However, it has recently been severely targeted by the suspension in North Korea and Japan’s trade.

Wonsan’s upper-class restaurants are known to show aggressive service by shouting “Welcome” when guests come in, by decorating the interior of restaurants, and by adopting a Chinese-style waiter and waitress system.

In addition, Japanese secondhand goods have been highly traded in Wonsan. Electronic rice cookers, sewing machine, fans, TVs and other Japanese thrift goods are commonly traded and have more reasonable prices than the other regions.

Newly released 2-3 person electronic rice cookers are around 13~150,000 won, fans around 7~80,000 won, used gas stoves around 15~200,000 (approx. US$50.34~67.10), used TVs around 20~250,000 won, and flat-screen TVs over 350,000 (approx. US$117.50) won.

The supply of electricity is not an issue, so it is provided 24 hours long and electricity is better-supplied than in Hamheung.

Further, the “105 factory (furniture production factory)” in Wonsan produces furniture which is delivered to the Central Party and the quality, compared with the cost, is supposed to be the best in North Korea.

Industrial goods in Chungjin are relatively economical, but Chinese-made color TVs and flat-screen newly-released TVs are sold for 20~250,000 and 350,000 won, respectively. Used bicycles imported from Japan is sold for 10~150,000 won.

In Chongjin, the number of taxis have risen lately, but because of the expensive cost, not too many people take advantage of it. Going 4km costs around 5,000 won. Taxis that are operating are either Chinese used taxis or imported cars which are past the expiration date.

◆ The price of rice narrowly rises = In Hamheung, the cost of taxis is supposed to be slightly higher than Chongjin. There are not too many people who ride taxis, so the rate is doubled beyond the center of cities and in remote places.

The cost of penicillin has risen significantly in Chongjin, with the spread of the measles, the scarlet fever, and other infectious diseases since last winter. Chinese penicillin is hard to acquire due to its reputation for having poor quality and North Korean penicillin is sold at Jangmadang (market) for 500 won per one.

The cities considered to have low standards of living are Kim Chaek of North Hamkyung and Danchun in South Hamkyung. The size of the jangmadang (market) is smaller than in other regions and there is a limit in the variety of goods. Steam baths or massage places do not even exist. The price of medical goods are also supposed to be exorbitant.

The specialty of Kim Chaek City is its low cost of nails. The Sungjin Steel Works Complex in Kim Chaek produces nail by melting steel and sells them, which is sold for 2,200 won~2,500 won per kg in Hoiryeong, at 1,200 won in Kim Chaek. However, not only is the weight heavy and is difficult to package, but the usage by civilians is not very high, so the incidence of sale to other provinces is low.

In Danchun, the price of fruit is very expensive, so it is not sold by the kilogram unit, but is sold individually. One medium-size apple is sold for up to 800 won.

On one hand, the price of rice in North Korea’s northeast region showed a narrow upward tendency in the latter half of May at the end of the spring shortage season. Corn, the staple of low-income civilians, did not show a huge change.

Freedom House
5/1/2007

North Korea comes in last place again: 197

Asia-Pacific Region: The Asia-Pacific region as a whole exhibited a relatively high level of freedom, with 16 countries (40 percent) rated Free, 10 (25 percent) rated Partly Free, and 14 (35 percent) rated Not Free. Nevertheless, Asia is home to two of the five worst-rated countries in the world, Burma and North Korea, which have extremely repressive media environments, as well as several other poor performers such as China, Laos and Vietnam, all of which use state or party control of the press as the primary tool to restrict media freedom.

Several bright spots worth noting include Nepal, where wide-ranging political change led to a dramatic opening in the media environment, and Cambodia and Indonesia, which also featured positive movement. Asia saw many negative developments in 2006, however, continuing the downward regional trajectory noted in last year’s survey. Coups and military intervention led to the suspension of legal protections for press freedom and new curbs imposed on media coverage in Fiji and Thailand. Intensified political and civil conflict during the year contributed to declines in Sri Lanka, East Timor and the Philippines. Heightened restrictions on coverage, as well as harassment of media outlets that overstepped official and unofficial boundaries, negatively impacted press freedom in Malaysia, China and Pakistan.

Daily NK
Choi Myung Chul
4/19/2007

I defected at a young age and arrived in South Korea in 2004, where I was admitted into third of year of middle school. In North Korea, I had been attending school and was in second year high school.

At first, I found it difficult assimilating into a South Korean school. Social interests were different and the fact that 9 out of 10 South Korean children enjoyed going to an internet café and playing games was intriguing on its own. Though I find computer games challenging and fun today, back then it was hard enough trying to figure out a computer, let along mastering a game.

There are no opportunities to see computers in North Korea. That’s because no one owns a computer. Comparatively, North Korea is like South Korea in the 1970’s. I played outside with top spins, paper-flipping, slides and soccer. I also caught fish as our family lived in Hoiryeong nearby the Tumen River, though catching fish was not only a game but our means of survival.

At that time, the greatest obstacle to our play was hunger. When you run around and play, you need food to regain your energy. There were even times we had no strength to sit up and play. Rather we lay, slumped. During those times, we sat around day-dreaming. We would play truth or dare and pretend to smoke with cigarette butts we had secretly collected and talked nonsense while lamenting over our lives.

Satisfying hunger through the generosity of an affluent friend

We often had fights with kids from other schools. There was one incident where a child even got his head seriously hurt, but back then your friends were all you had. Even as we lay lifeless, I felt secure because of my friends.

Though I was starving, I even got to watch TV, that is during the short times our village was supplied energy. Though the majority of us were poor, one of my friends had a TV in his home, as his mother had done well at the markets. Even though only one station was broadcasting, the North Korea program, it was still very fun. I remember seeing one movie, “Order 027” which was about the People’s Army invading the Blue House (South Korea’s presidential building). The action wasn’t too bad, even interesting to a point.

Once in a blue moon, a friend would come into some money and then we would go to the markets to buy snacks. We bought bread made of corn powder and tofu rice. Even though the serving was small, my friend always shared his food with me.

Actually, all our friends did this. It was a time where we were all starving, yet we were willing to share our food, even half a corn cob.

Then one day, my mother left and I starving of hunger, left for China. On my way to Dalian in search for relatives, I was caught and forcefully repatriated back to North Korea. So I went looking for my best friend Hakjoo. Hakjoo and I had grown up together and had experienced so many things including severe hunger.

Offer to escape but offer denied

I informed Hakjoo of my plans and tried to persuade him to come. He replied, “Nevertheless, my homeland is here. If I died, I am going to die here. I cannot go with you.” We got into a huge argument and he said I had been brainwashed by capitalism.

Ever since we were little, we studied that Chosun (North Korea) was a socialist paradise and learned of Kim Jong Il and Kim Il Song’s revolutionary history. Even at that time, many of us were ignorant of the outside world. My friend’s loyalty to the great leader stood firm and he denied leaving our motherland.

By the time I had seen and heard of China, my devotion to Kim Jong Il had disappeared. I tried to convince Hakjoo that China was rich in food and much more abundant than North Korea but, failed to persuade him. I remember him saying, “Still. How can I desert our leader and our motherland?”

Hakjoo did not agree with my dreams but he still wished me health and safety. He also promised me that he would not report me to the authorities and said, “Don’t worry. But you must go in safety. Do not get caught and be safe.”

North Korea is a society where each person regulates one another. It is a society where trust is nonexistent. However, I trusted that friend and because I believed that he would not report me, I was able to safely defect the country.

As I left, I said to me friend, “I will return without fail… I’ll see you then.”

That was ’98. I found my way to my relatives home in Dlian, worked as a farmer in China for 3 years and then at a restaurant for 3 years.

At first, I planned to live in China. I had no intention of coming to Korea as I felt it would then be harder for me to return to North Korea. However, I could not continue to live hidden as an illegal immigrant and in the end, I followed the footsteps of another friend in 2004.

Whenever I face a hard time I think, ‘If I came with Hakjoo, it wouldn’t have been so hard,’ If we had defected together, the hardships in China and the loneliness would not have been so bad.

No matter how difficult the task, that friend always pulled through. However, he is not here now and so all the decisions have to be made by me. It’s tough because there is not one person I can fully trust and be dependent on.

But I am going to live well. Every day, I have just enough to scrape by and though it’s not easy, I am attending university. When I return to North Korea one day, there are many things for me to do. My dream is to construct a company there and rebuild a North Korea that has fallen to devastation.

And above all, I study because I made a promise to my friend. When I return to my hometown, my aim is to meet my friend standing tall and proud.

Check out his revolutionary platform on Youtube

Promo for the World Festival of Youth and Students