North Korean Economy Watch

According to the Daily NK:

The North Korean authorities are currently employing various means to encourage frugality, an idea which has recently come to include ‘kwanhonsangje’ (the four ceremonial occasions; coming of age, marriage, funeral and ancestral rites).

In recent years there has been official criticism of the fact that engagement ceremonies, wedding gift exchanges between families and even the table for ancestral rites have become occasions full of over-spending, empty formalities and vanity.

Recently, Daily NK obtained a copy of the October issue of monthly magazine ‘Socialist Cultural Life’, to which social studies scholar Jang Seong Nam submitted a piece, ‘Let’s Perform Kwanhonsangje the Socialist Way’, in which he declared, “kwanhonsangje should be performed according to the demands of the Party and social development.”

The article emphasized, “We are taking the lead, seeing kwanhonsangje performed in the socialist way as a valid and unavoidable problem in the establishment of the new military-first socialist life.”

“Because old, feudalist, superstitious, empty formalities and bizarre foreign customs are not disappearing, we are strongly demanding action on this problem,” it went on, adding, “Rejecting bizarre foreign customs crushes the Imperialists’ policy of ethnic extermination under the banner of ‘globalization’.”

The article also looked in more detail at problem issues surrounding kwanhonsangjae.

“A sufficient engagement,” it proclaimed, “has two people and their parents meeting to confirm the marriage, and wedding ceremonies should be a gathering at someone’s home.”

Regarding funeral arrangements and ancestral rites, it recommended, “Commemorate a death by placing a medal or honorary certificate before an image of the deceased along with flowers, while the various commemorative services on the 3rd day or the birthday of the deceased should be eliminated.”

Getting into minutae, it added of a groom’s suit color, “Discard the convention of wearing a black or dark blue suit; men should wear bright colors according to season.”

In these ways, the article asserted, kwanhonsangjae becomes an aesthetic and modern set of customs with a uniquely Chosun ethnic color.

The piece appears to show both the state’s desire to restrain consumption but also to reassert ‘socialist’ attitudes and encourage nationalist attitudes, thus pushing back against the impact of foreign ideas coming in via overseas media, South Korean dramas and so on.

‘Socialist Cultural Life’ is distributed monthly to all official organs and enterprises. Its publisher, Labor Group Publishing House, publishes various other magazines including ‘Chosun Women’, ‘Worker’ and ‘Agricultural Worker’. As a part of the Party Propaganda and Agitation Department, its various publications are among the state’s most ubiquitous propaganda weapons after the daily Workers’ Party mouthpiece, ‘Rodong Shinmun’.

Read the full story here:
Celebrate the Socialist Way!
Daily NK
Lee Seok Young
2011-12-9

According ot the Choson Ilbo:

More and more North Korean women are marrying younger men as their superior earning power makes them increasingly eligible. Park Young-ja of Ewha Womans University’s Institute of Unification Studies told a seminar Thursday more women are becoming breadwinners as the North’s economic hardship deepens.

“Young women are avoiding marriage or opt for informal cohabitation. And an increasing number of women are choosing younger men so that they can have more control in the relationship.”

One female North Korean defector in her 30s said, “Even if the authorities tell people not to, men are living with women who are five or six years older, because these women have experience making ends meet.”

The number of divorces initiated by women is on the rise as well. The regime is threatening to expel divorcees, but to no avail. “North Koreans don’t take warnings from the regime seriously because they believe that there is no need to report marriage or divorce to the government,” Park said.

“Recently an increasing number of people don’t bother to register their partnership and just go their separate ways after a few months or years if they want.”

Hardship Changes Marriage Patterns in N.Korea
Choson Ilbo
2011-11-28

A recent story in the Donga-Ilbo asserts that prostitution and other forms of “adult business” are on the rise in the DPRK. Of course the article mentions neither when this specific trend became noticeable (from last year or from five years ago) nor does it mention the locality or magnitude of the trend.  Of course the claim is impossible to determine with any precision since such comprehensive time-series data is not available from the DPRK.  We do not even have good data on prostitution arrests, which would certainly understate the actual size of the industry. I believe it is fair to assume from the abundance of open sources, however, that prostitution has increased significantly in the DPRK since the arrival of the Arduous March.

Though we do not have any hard data, an interesting anecdote in the Donga-Ilbo  story (which I believe might be true) points not only to a general unofficial public acknowledgement of prostitution, but also shows a “North Korean sense of humor” about the situation:

Rumors say the term “8/3 couple,” meaning people engaged in extramarital affairs, is spreading widely. 8/3 refers to the day in August 1984, when then North Korean heir apparent Kim Jong Il instructed authorities “to use by-products from factories or workplaces to produce daily necessities for people.” The term is changed to sarcastically mean “pseudo” and “fake.”

From the interviews I have done with North Korean defectors, I have learned that “8.3″ references are a “common” put-down…meaning either “fake” or “low-quality”. It is entirely plausible to me that this term has made the transition to categorizing the prostitution industry as well.

You can read the full story here:
N. Korean women turning to prostitution, porn to earn money
Donga-Ilbo
2011-10-10

Tania Branigan visited Pyongyang for The Guardian and wrote a long article on North Korean culture.  Most of the information is familiar to long-time DPRK watchers, though there were a few nuggets of information I had not heard before.  I have posted these below:

But who knew that The Da Vinci Code was a hit in this strictly controlled city? That Céline Dion is a karaoke favourite? Or that the mass performances are not only a tribute to the leadership and motherland, but the way that many young people find partners?

…

Few foreigners see this city at all. Around 2,000 western tourists visited last year, plus perhaps 10 times as many Chinese visitors. The expatriate population, excluding Chinese and Russian diplomats, and including children, stands at 150.

…

There are certainly signs of change here: Air Koryo has new planes and three gleaming airport buses to ferry passengers from runway to terminal. Last week a vast new theatre opened, as did an apartment complex, although it may be destined for officials. The 105-storey Ryugyong hotel – more than two decades in construction – is finally glass-sheathed and due to open in 2012. That year will mark the 100th birthday of the country’s founder, Kim Il-sung. But it is hard to see how it can achieve its pledge to become “a great, powerful and prosperous nation” by then – even given the Stakhanovite industrial efforts lauded in its newspapers.

…

Pyongyang is lucky: no one is plump, but nor is there noticeable emaciation. Dr Andrei Lankov, associate professor at Kookmin University in Seoul, says the official income in Pyongyang is around 3,000 won a month, but many have ways of making money on the side and – unlike other North Koreans – its residents receive subsistence food rations. Most top those up at markets that are legal though never formally acknowledged (officials insist that “everything is public”). At the turn of the year, the government embarked on currency reforms to eradicate an increasingly independent group of “kiosk capitalists”. But wiping out hard-won savings caused highly unusual public discontent and even, reportedly, unrest.

You can read the full article here:
The cultural life of North Korea
The Guardian
Tania Branigan
10/15/2010

By Michael Rank

North Korean films are as hard to find as kimchi-flavoured ice cream, so Koryo Tours have done us a big favour by releasing on DVD Centre Forward (film trailer here), a highly watchable and fascinating Pyongyang production from 1978.

It’s the tale of talented novice footballer Cha In-son (Kim Chol), who’s been on the bench for Taesongsan for the last three years, but finally makes the team. Not everything goes well at first, and he’s forced to leave the field injured in his first match. But he sticks at it, and strongly supports the coach’s tough new training regime, unlike his complacent best friend and teammate, Chol-gyu, who thinks it’s unnecessary for such a successful team. Chol-gyu (Choi Chang-su) tries to distract him with drinking sessions, but In-son will have none of this, and eventually everyone’s won over to the coach’s demanding regime and Taesongsan ultimately win the North Korean equivalent of the Premiership.

The film, co-directed by Pak Chang-song and Kim Kil-in, is well paced (and only 70 minutes long) and the black and white camerawork is fluent and confident.

There’s a strong political message, inevitably. “Oh, we are the sports soldiers of the leader/ Let us glorify the honour of the motherland…,” goes the splendidly rousing theme song, and to underline the point, the coach reminds In-son, “The Fatherly Leader taught us that we should train harder to win every single game and we should turn our country into a great sporting nation. But we’re still not sweating enough, that’s why our football isn’t getting any better and we’re failing to achieve the teachings of the Fatherly Leader who taught us to make the country a kingdom of sport.”

On a less overtly political level the role of the women in the film is fascinating. In-son doesn’t seem to have a girlfriend, and the love interest, as it were, is provided by his pretty sister,  Myong-suk. She is the star member of a dance troupe and her hard work and dedication is an inspiration for her brother, while she is just as devoted to him, going off to talk to the coach about his prospects when he is feeling despondent. And she takes time off from her dancing duties to iron her brother’s clothes, while his mother washes them for him as he rests, exhausted.

There’s some wry comedy in the relationship between In-son’s mother and best friend Chol-gyu’s grandmother. After her grandson’s string of successes on the pitch, she feels right at home in the world of football and knows all the jargon, and she’s apt to be a bit condescending to In-son’s mum to whom she has to explain terms like “left back” and “having an off day”.

There’s a bit of melodrama when In-son is concussed during a match – don’t worry, he makes a miraculous recovery – and his mother who is watching the game on television wants to rush to the stadium to be with her son. But then she realises she can’t face seeing In-son apparently seriously injured, and Chol-gyu’s granny tells her, “You’re not ready to be a footballer’s mother yet.”

Interestingly, neither In-son or his friend seem to have fathers, and this emphasis on mother figures seems to underline what Brian Myers says in his excellent book The Cleanest Race (Order here) about the roles of mothers and motherliness in North Korean politics and society.

This is the perfect film to see ahead of the World Cup in South Africa next month, in which North Korea have qualified for only the second time ever. Not for nothing has Centre Forward been hailed as “the best North Korean-themed football movie of all time” and there’s no doubt that the Choson Art Film Studio is a truly worthy winner of the Kim Il-sung medal and the National medal, first class.

Andrei Lankov writes in the Wall Street Journal about the growing role women have come to play in the North Korean economy.  According to the article:

A joke making the rounds in Pyongyang goes: “What do a husband and a pet dog have in common?” Answer: “Neither works nor earns money, but both are cute, stay at home and can scare away burglars.”

North Korea is still a strongly patriarchal society, so the popularity of jokes deriding men is a surprising sign of shifting attitudes. The cause is also a surprise—women are running the country’s booming unofficial economy.

A decade ago North Korea went through a man-made social disaster which exceeds everything East Asia has experienced since Mao’s ill-conceived experiments of the 1960s. An estimated 600,000-900,000 people perished in the 1990s famine, which was largely a product of the government’s unwillingness to reform the economy. The social and economic structure of a Stalinist society collapsed. Antiquated iron mills and power plants ground to a halt, and the rationing system did not provide enough food for the average citizen to survive.

Facing this challenge, North Korean society reacted in an unusual way: It rediscovered the market economy. Unlike China, where capitalism was re-introduced from above by Deng Xiaoping and his fellow reformers, in North Korea its growth has been largely spontaneous. Nonetheless, by 2000 market exchange, both illegal and semilegal, came to play a decisive role in the lives of North Koreans.

This worried the Kim regime’s leaders, who understand full well how the marketplace undermines their political control. In recent years they launched a number of policies aimed at undermining markets. The recent currency reform was meant to deliver another blow to the markets by annihilating the capital of private businesses. It backfired, though, and the economic situation worsened considerably.

However, the nemesis of the regime, the market vendors of North Korea, are by no means the kind of street toughs one might encounter in the black markets of other countries. North Korea’s “new capitalism” of dirty marketplaces, ancient charcoal trucks and badly dressed vendors has a distinctly female face. Women are overrepresented among the leaders of the growing post-Stalinist economy—at least at its grassroots level, among the market traders and small-time entrepreneurs.

This is partly due to a distinctive feature of North Korean society. Until around 1990, markets played a very slight role in the North Korean economy. Almost everything was rationed by the state. In those days, the North Korean state required every able-bodied male to be employed by some state enterprise. However, some 30% of married women of working age were allowed to stay at home as full-time housewives.

When in the early 1990s the old system began to fall apart, men continued to go to their jobs. At first glance this might appear irrational, since most state-run factories came to a standstill, subsidized rations were not delivered and an official monthly salary would barely buy one kilo of rice.

Nonetheless, North Koreans expected that sooner or later things would eventually return to what they thought of as “normal”—that is, to the old Stalinist system. They were not aware of any alternative. They also knew from experience that people who showed any disloyalty to the state—for instance those who cooperated with South Korean authorities during the Korean War—were discriminated against for the rest of their lives. Even the children of such “unreliable elements” faced many official restrictions. So men believed that it would be wise to keep their “official” jobs for the sake of the family’s future.

The situation of women was different. They had time, and their involvement with private trade was seen as less dangerous—precisely because of the patriarchal nature of a society where only males’ behavior really mattered. In some cases women began by selling household items they could do without or homemade food. Eventually, these activities developed into larger businesses, and today at least three-quarters of North Korean market vendors are women.

For many North Korean women, the social disaster of the 1990s has become an opportunity to display their strength and intelligence. In recent months those women have become the primary target of government policies designed to destroy private enterprises. But the experience of the last two decades suggests that the women are likely to continue wearing the pants.

Read the full article here:
Pyongyang’s Women Wear the Pants
Wall Street Journal
Andrei Lankov
4/16/2010

According to the Choson Ilbo:

South Korean goods remain popular among well-to-do North Koreans, especially women, Open Radio for North Korea station reported on March 25.

The defector-run radio station said one North Korean official bought South Korean goods including a robot vacuum cleaner, air conditioner, heater, underwear, and cosmetic goods worth US$3,000 in December last year. He was quoted as saying his wife asked him to buy them and was very happy with them, so her circle of friends asked him to buy the same things for them.

South Korean goods are apparently no longer confiscated in customs. The official said customs officers do not mind as long as the goods are for personal use and not for sale. Control by Chinese customs is stricter than in North Korea.

It said South Korean robot vacuum cleaners are thought to be cheaper than Japanese ones, and the batteries last longer. South Korean underwear and cosmetic goods suit North Koreans better than those imported from other countries.

Read the full story here:
Rich N.Korean Women Lead Craze for S.Korean Goods
Choson Ilbo
4/3/2010

Although the Korea Times titles the article, “Privileged North Koreans Enjoy S. Korean Movies,” the article is about neither privileged North Koreans nor South Korean films.  Rather, this interesting article by Andrei Lankov is about official attitudes towards sexual relations in the DPRK. 

Quoting from the article:

When communism was a radical revolutionary movement, it was decisively in favor of sexual liberation. When communists took power in Russia in 1917, they immediately introduced one of the world’s most liberal family and marriage laws, de-criminalized adultery and abortion, and greatly simplified divorce while putting in place some safeguards for women with children.

However, in Russia this attitude began to change from the early 1930s. The worldview promulgated as Stalin’s era continued, came to view sex as largely reproductive, something that should be confined to the bedroom of a properly married couple, and not discussed in public.

So the dominant attitudes to sex in the Soviet society of the 1940s were not that much different from the America of those years. And this was the attitude that was exported to the nascent North Korean society.

In the North, this approach was soon taken to the extreme. From the late 1950s even the slightest references to sexual activity were purged from North Korean art. Only villains could be depicted as thinking about sex, while the positive heroes were always asexual. Divorce was made difficult, almost impossible.

It seems that the government control, along with the activities of the neighborhood watch groups, the infamous “inminban,” helped to maintain the officially endorsed standards of sexual behavior. The powerful few sometimes could have extra-marital affairs, but they were an exception.

I also know of some cases when women got pregnant from premarital sex ― like a female soldier who once “did it” with her boyfriend in the late 1970s.

But once she found out that she was pregnant, she knew she was in serious trouble: if discovered, a pregnancy would lead to a dishonorable discharge from the army, after which nobody would allow her to return to her family in privileged Pyongyang.

Fortunately, her boyfriend and his well-connected family stood by her, pushed all the right buttons and arranged for an immediate discharge from the army, followed by marriage (they have two children now, and live happily in Seoul).

And regarding prostitution…

Prostitution, common in North Korean cities in colonial times, was eradicated in the early 1950s, and former prostitutes and gisaeng (high-class courtesans) were either exiled from the major cities or “re-educated through labor.”
…
However, the situation began to change in the early 1990s when the old system collapsed under the weight of economic difficulties. This influenced everything in North Korea, including the sexual behavior of its inhabitants.

After all, Koreans can now engage in premarital or extramarital sex without taking too many risks: the state does not care about such matters as much as it used to, and finding a suitable place and time is also much easier.

The emerging “black market capitalism” was (and still is) dominated by women who have acquired a great measure of economic freedom and independence, meaning that they are less inhibited about having affairs with men they like.

The female merchants travel a lot, they are essentially beyond the reach of the state, and they feel themselves far more confident than ever before.

In a sense, the sexual adventures of these women can be seen as a sign of their liberation. However, these lucky women are a minority. Others have fared much worse. The social disruption and famine of the late 1990s pushed many women into prostitution.

Some of them can be found in Chinese brothels, but it seems that the majority have to ply their trade within North Korea, where their situation is even worse (but never reported by the media).

Nowadays, North Korea has a number of private karaoke rooms ― a development which would have been positively unthinkable some 10 years ago. Some of those rooms serve as a cover for prostitution.

They have even devised ways to advertise this to a passerby, so a patron can know if sexual services are available in the particular outlet. The code words are “selling beds” or, more poetically, “selling flowers.”

Another cover for prostitution is provided by the private inns which proliferated some 10 years ago and operate with a disregard of the strict laws governing internal movement in North Korea.

It seems that sometimes the same inns can provide a space for lovers as well ― as long as they can pay the rather high fees.

Additional thoughts:
1. I have posted a number of stories dealing with divorce in the DPRK.  You can read them here.  Apparently it is common now.  According to this article, divorce settlements compose the most cases in the DPRK court system.

2. Prostitution is visible in the DPRK as every guest to the Yangakdo Hotel can attest.  However these workers are all foreigners (Chinese) on contract.  Some tourists do claim to have successfully liaised with a local Korean, but these stories are rare. 

Read the full article here:
Privileged North Koreans Enjoy S. Korean Movies
Korea Times
Andrei Lankov
7/24/2009

Why is this topic being discussed on North Korean Economy Watch?

Well, economics is often accused of being an “imperial” science by other disciplines because, broadly defined, economics looks at human choice and the constraints, trade-offs, and incentives under which these choices are made.  This broad definition irritates sociologists, anthropologists, and political scientists because economists are always moving in to explain social phenomenon on their “turf.”  In this light, though, economics does have something to say about sexual social norms because they play a significant role in a significant number of every-day choices that people make, particularly in what are traditionally considered “economic choices”…even in North Korea.

On to the topic…
One would think that in North Korea—where personal associations and loyalties are particularly important and highly regulated—that non-marital sexual encounters would be highly suspicious and discouraged, but a recent article in Radio Free Asia makes the opposite claim:

[W]hen it comes to the privacy of the bedroom, even the all-powerful North Korean Workers’ Party is largely hands-off, according to North Korean defectors.

Intellectuals and artists in the Workers’ Paradise have long espoused a fairly open and liberal set of views around sexual relationships, according to former North Korean artist and defector Lee Yoon Jeong, despite a widespread lack of sex education for young people.

Apparently, pre-, extra-, and post- marital sex is so common that even the Workers Party doesn’t ban it:

Lee said high divorce rates, and the tendency for Party officials to have mistresses and extra-marital affairs, meant that the Party was reticent about dictating to the people about their love lives.

“The Workers’ Party is truly in no position to regulate relationships between men and women,” she told reporter Jinhee Bonny. “The authorities may control everything, but they could never dictate matters of love between North Korean men and women.”

The artcle also makes the claim that prostitution is fairly common now and that illegal abortions are taking place.  If this is the case, then North Korea is only the second communist country I am aware of where abortion is/was technically illegal (the other being Ceauceascu’s Romania).  Does anyone know any differently?

Read the full article here:

Love and Sex in North Korea
Radio Free Asia
Jinhee Bonny
4/18/2008

Institute for Far Eastern Studies (IFES)
NK Brief No. 08-2-5-1
2/5/2008

Kim Jong Il’s first visit of the year was reported on January 6 to have been to the Ryesonggnang hydro-electric power plant. Generally, the leader’s visits in the first months of the year, along with the New Year’s Joint Editorial, which focused on economic recovery, set the tone for the coming year’s policies. His second inspection of the year was to a military unit.

Defectors claim that prostitution is on the rise in North Korea, and on January 9, the aid group ‘Good Friends’ reported that the DPRK has begun to close massage parlors as part of a crackdown on prostitution. The agency reported that in the DPRK there was a “steady campaign to weed out decadent foreign culture,” and that in September, DPRK soldiers were ordered to avoid alcohol, sex, and money.

On January 16, it was reported that Kim Jong Il had instructed all DPRK institutions to reduce their bureaucracies, including senior staff, by thirty percent.

Figures released by North Korea’s Korean Central News Agency indicate that the DPRK’s population had increased to 23.6 million in 2004, the latest available figures. According to DPRK figures, the population has grown from 22.1 million in 1996.

North Korea announced the closure of its Australian embassy on January 22. While the DPRK will continue to maintain diplomatic relations with Australia, it apparently can no longer afford to maintain an embassy in Canberra.

According to a report released by the International Red Cross, North Korea has the largest number of people in the world killed by natural disasters over the past decade. The report states that 458 thousand North Koreans have died from natural disaster, 38 percent of the disaster-caused deaths in 220 countries from 1997-2006.

A U.S. Senate investigation reported that the DPRK funneled as much as 2.7 million USD through a bank account set up from UN development projects. The report stated that North Korea used the UN account due to fears that the United States would block its ability to transfer money internationally.

DPRK Nuclear Negotiations

2008 opened with the United States and Japan releasing statements expressing their disappointment at North Korea’s failure to meet its December 31 deadline to fully disclose the extent of its nuclear programs, while North Korea’s New Year’s Joint Editorial called for “stability on the Korean Peninsula and peace in the world” as well as an end to hostile U.S. policies. A U.S. White House spokesman stressed that there was still opportunity to move forward with negotiations, stating, “the important thing is that we get a declaration that…needs to be full and complete,” not whether the declaration is made by the deadline.

On January 4, North Korea claimed it had met its obligations to come clean on its nuclear programs, and that it had provided Washington with a list of its nuclear programs in November. Pyongyang also threatened to bolster its “war deterrent” because Washington had failed to provide promised aid following the declaration. Washington denied that any complete declaration had been made.

A senior Russian diplomat was quoted on January 11 as saying that while Russia regrets the slowed state of progress in talks on DPRK nuclear issues, Russia will fulfill its promise to provide the North with fuel oil. 50,000 tons of fuel oil were delivered on January 20~21.

According to a book of figures recently published by the National Statistical Office, ”Comparison of North and South Korean Socio-economic Circumstances”, the DPRK”s crude imports over the past several years bottomed out at 2,325,000 barrels in 1999, then rose to 4,244,000 barrels by 2001. Since 2001, imports have steadily fallen until only 3,841,000 barrels were imported in 2006, recording the least imports in the last five years.

North Korea opened its first online shopping mall in January. The site offers items from fourteen categories ranging from machinery and building materials to stamps and artworks. The site, www.dprk-economy.com/en/shop/index.php, is based in China.

Orascom Telecom, a Cairo-based phone operator, has been granted the first commercial license for provision of mobile phone services in North Korea. The license was granted to CHEO Technology, a subsidiary that is 25 percent-owned by the state-run Korea Post and Telecommunications Corporation.

DPRK Abduction Issue

The Cambodian Foreign Minister announced on January 16 that his country had been working behind the scenes to find a resolution to the DPRK-Japan abduction issue. The minister stated, “Cambodia is in a position where it can hold high-level meetings with North Korea, and it has the ability to persuade North Korea.”

Inter-Korean Affairs

The incoming Lee Myung-bak administration announced on January 4 a plan to develop an international cooperative fund to support North Korea’s economy. The plan is said to call for World Bank and the Asia Development Bank to help, and for South Korea to provide 40 billion USD.

On January 7, it was reported that Lee Myung-bak’s presidential transition team had asked the ROK Unification Ministry to slow the pace of inter-Korean economic projects and to link them to progress in the six-party talks. The incoming administration has promised not to link humanitarian projects such as rice and fertilizer aid to nuclear negotiations.

The Lee Myung-bak administration announced plans for downsizing the South Korean government, including disbanding of the Ministry of Unification. Opposition to the plan points out the role played by the ministry in improving inter-Korean relations, while proponents to the plan of relegating the ministry’s duties to the Ministry of Foreign Affairs and Trade applaud the move to align North Korea policy with standing foreign policy directives.

On January 14, it was reported that Lee Myung-bak had asked the United States to further engage in talks with DPRK military leaders, while presenting a balanced approach, stating that “our people don’t support the idea of giving lavish aid to the North nor do they want to irritate it too much, I believe.” He went on to add that the United States holds the key to easing DPRK fears of opening up.

The net worth of inter-Korean exchanges totaled 1,797,890,000 USD in 2007, up 33% from the 1.35 billion USD in the previous year. The almost 1.8 billion dollars in trade recorded in 2007 is the highest to date, and is equal to 65 percent of the DPRK”s non-Korean trade volume of 2.996 billion USD in 2006.

The Seoul-based International Vaccine Institute announced on January 14 that it will soon begin inoculating approximately six thousand North Korean children against bacterial meningitis and Japanese encephalitis.

The two Koreas began working-level military talks on January 25, marking the first talks of the year. During talks, the North proposed reducing the frequency of the inter-Korean rail services, citing a lack of cargo. The Southern delegation felt that the frequency was an important indication of inter-Korean cooperation. The two sides agreed to continue daily runs, but to reduce the number of empty carriages in the future.

North Korea is still not as attractive to businesses as other Asian neighbors. A survey released by the (South) Korea Chamber of Commerce and Industry on January 28 indicated that China and Vietnam are more attractive to ROK businesses. According to the survey, 80 percent of businesses have difficulties starting or operating businesses in North Korea.

An ROK special envoy returned on January 23 from Moscow after proposing a joint ROK-DPRK-Russian cooperative project in eastern Siberia. President-elect Lee Myung-bak sent a letter to Russian President Vladimir Putin pushing for cooperation of “North Korea’s workforce, Russia’s resources and capital, and [South] Korean technology.”

U.S.-DPRK Relations

On January 9, amidst reports concerning possible DPRK-Syria nuclear connections, it was reported that in 1991 Israel was posed to strike a ship suspected of delivering missiles from the DPRK to Syria, but was dissuaded by Washington.

A U.S. State Department official stated on January 22 that North Korea had met the legal criteria to be removed from the U.S. list of state sponsors of terrorism. This came just after reports of conflicting opinions within the Bush administration, with Secretary of State Condoleezza Rice sharply rebuking Special Envoy on North Korean Human Rights Lefkowitz, who stated that North Korea is not serious about nuclear disarmament. Rice went so far as to say that Lefkowitz “certainly has no say on what American policy will be in the six-party talks,” dismissing his negative position on the failure of North Korea to meet its obligations. The White House later stated that North Korea must make a full declaration of its nuclear activities before being removed from the list.

Five officials from the DPRK recently visited the United States in order to learn how to treat and prevent tuberculosis, a serious concern for the North that is “practically non-existent in most developed countries.” The officials were invited by The Korea Society, which is based in New York.

DPRK-PRC Relations

According to the PRC General Administration of Customs, China’s oil exports to North Korea were the same in 2007 as they were in 2006. China sent 523,160 tons of oil to North Korea in 2007.

A senior PRC Communist Party official traveled to Pyongyang for a meeting with Kim Jong Il on January 30. Wang Jiarui, director of the International Liaison Department of the Chinese communist party, was to convey a message to Kim, inviting him to the opening ceremony of the Beijing Olympics. While Kim reportedly told Wang that there would be no change in the DPRK stance on nuclear negotiations, he also assured the Chinese envoy that North Korea had no intention of harming DPRK-PRC relations.