North Korean Economy Watch

According to Yonhap:

North Korea is focusing more on diversified development of its economy and pushing regional industries to play a greater role in earning foreign capital, Pyongyang watchers said Sunday.

Observers in Seoul said that the Oct. 31 issue of “economic research” published in the North highlighted the need for regional governments to generate more revenue, bolster industrial output and earn more foreign capital.

According to papers in the research journal that offer a glimpse into how Pyongyang wants to run the country, factories in the provinces must strive to modernize and form close knit alliances with industries located in the capital city and with laboratories.

This call is similar to a speech given by Vice Premier Ro Du-chol on Wednesday at a ceremony marking the 40th anniversary of regional governments being given authority to generate profits and manage their respective budgets.

The senior official stressed that all cities and counties need to do their utmost to improve their economies and come up with necessary policy plans.

Such a move calls for redoubled efforts to attract overseas investments in mineral mines and other manufacturing facilities.

Ro’s remarks have been interpreted as Pyongyang paying more attention to regional economies and getting local authorities to take charge of providing for its citizens, instead of relying on the central government.

Related to such calls, the North recently announced that it will set up a total of 14 special economic zones across the country to pursue economic growth and bring in more investments. At present the communist country only has four such special zones, including those set up in Kaesong and the Mount Kumgang resort.

“There has been a trend coming into this year of the North paying closer attention to building up its regional economy,” said Cho Bong-hyun, an analyst at the IBK Economic Research Institute. The North Korean expert said that this may be a move by the North to bring about results on the economic front under the Kim Jong-un leadership.

Kim, who took over running the country following the sudden death of his father in late 2011, has called for the simultaneous development of the country’s nuclear capability and its economy.

This move is seen as a departure from the “songun,” or military-first politics, pursued by his late father, Kim Jong-il.

Read the full story here:
N. Korea focusing more on regional development: research journal
Yonhap
2013-11-10

UPDATE 3 (2013-11-14): North Korea accelerating economic reforms? Wages and prices to be self-regulated (IFES):

North Korea appears to be pushing for internal economic improvement measures. Chosun Sinbo, the pro-North Korean newspaper in Japan, released an article on November 6 that discussed various performance-enhancing management and operational changes that took place at the Pyongyang Essential Foodstuff Factory this year.

Chosun Sinbo referred to Kim Jong Un’s speech made last March at the plenary meeting of the Central Committee of the Workers’ Party about improving economic management and named the recent changes at the food factory as a pilot project for this purpose. The news article added that “There are studies to bring fundamental changes in economic management and specific measures are being made to turn this into a reality.”

The main systemic changes made at the Pyongyang Essential Foodstuff Factory were the increase in autonomy of the company and the enforcement of wage differential based on performance. Based on the principle of cost compensation, prices of products produced with raw materials at the factory may be freely adjusted after consulting with the state.

The news article further explained that “The principle of socialist distribution is a simple system of distributing as much as you earn and the cost of living is determined by labor productivity.”  It also reported that some of the employees’ wages increased. Such news is likely intended to advertise to the outside world about North Korea’s changing domestic economic policies.

The North Korean economic journal Kyongje Yongu has also been increasingly reporting on the principle of distribution based on economic performance. In the recent issue published on October 30, 2013 (issue No. 4), an article titled “The Principle Problem of Properly Implementing the Socialist Labor Wage System” criticized the equalization of product distribution as it decreases the enthusiasm of workers toward production: “The strength and life used during the process of labor must be compensated through the principle of earning the amount of your labor.” The article stressed that wages must increase with production and rationalized the need for such wage increase.

Chosun Sinbo and Kyongje Yongu articles reveal the long-term efforts by the North Korean government in enhancing research about economic improvement measures and expanding projects in various factories, companies, and cooperative farms to implement these measures.

Recently, North Korea launched the State Economic Development Commission and organized a number of international forums on special economic zones.  These can be construed as possible signals toward economic reform, as North Korea continues to make various changes in its internal economic policies.

UPDATE 2 (2013-11-7): Another story of note in the Daily NK ties factory wage increases to the ability of enterprises to negotiate prices with the state:

Choson Sinbo, the regular publication of the pro-North Korea General Association of Korean Residents in Japan (Chongryon), has published news of a Pyongyang-based food factory being used as a testing ground for independent economic management. The enterprise fixes prices semi-independently in discussion with the state and pays increased wages, the piece, published yesterday, explained.

The publication conveyed, “Pyongyang Essential Foodstuff Factory became a test unit and conducted research in order to enact changes to overall economic management. They are currently implementing these.”

It continued, “Of particular note is the organization of production and economic management based on cost compensation principles and the socialist rules of division. Pyongyang Essential Foodstuff Factory has enacted the measures for themselves and prepared the collateral to allow for expansion and reproduction.”

“This factory has shed the state planning model and sources its own materials, and in discussion with the state it has been able to set its own prices as it sees fit. There is also a measure currently being adopted that provides monthly allowances in consideration of the labor of the employees,” it further emphasized.

However, a high-ranking defector was skeptical when asked about the piece, telling Daily NK, “These factories produce things like soybean paste, soy sauce, salt and side dishes. They have always played the role of distributor to the people, so there is no way that they would be able to just set prices how they wish on these products. It’s likely that the measures focus on work teams making apple and pear beverages, liquor and beer; things that do not relate to improving the lives of the people.”

UPDATE 1 (2013-11-7): The Daily NK follows up on the DPRK’s strategy to bring official wages in line with the price level:

North Korea’s decision to drastically increase the wages of workers in parts of the heavy industrial sector is designed to boost morale and improve productivity, the better to expand the country’s capacity to generate foreign currency income from investments in the exploitation of its mineral resources.

As exclusively reported yesterday by Daily NK, major industrial concerns in North Hamkyung Province such as Kim Chaek Iron and Steel Complex have raised wages by a factor of approximately one hundred, from a derisory 3,000 won per month, around half the market price of a kilo of rice, to 300,000 won. Thus far, 100,000 won of the total has been paid in cash and the remainder in kind in an attempt to head off the very real danger of dramatic price inflation that would result from 100% cash payments.

That such a substantial wage rise was only deemed feasible in enterprises with the potential to export primary or secondary resources for foreign exchange should not come as a surprise. Smaller domestic enterprises don’t have the liquid resources to take such a step. As with the Kaesong Industrial Complex, wages in cash and kind have always been more generous for workers in joint venture enterprises than elsewhere. The latest move reflects an extension of that reality.

At this early stage, experts believe that the measure is designed to create a business model for North Korea not unlike that on show at Kaesong, under which each province can improve its economic performance and attract greater quantities of foreign capital. By actively nurturing those rare businesses that are competitive in the regional environment, the country hopes to raise productivity overall.

A researcher with Industrial Bank of Korea, Cho Bong Hyun told Daily NK, “Raising salaries for enterprises in the minerals sector looks like an inevitable choice, since productivity couldn’t have been expected from light industrial enterprises when the operational level of most of those factories is so low.

Cho continued, “The Kim Jong Eun regime, which is currently concentrating on producing results in the economic sphere, made this decision based on the fact that for some time it has been earning foreign currency quite easily by exporting its mineral resources. They also hope that by raising salaries they can induce greater productive effort, since workers have not wanted to work properly since the public distribution system collapsed [in the 1990s].”

Yoon Deok Ryong, a senior research fellow with the Korea Institute for International Economic Policy added, “Kim Jong Eun has granted this autonomy to firms and raised wages in order to earn foreign currency and firm up his system. He wants to right the economy by discriminating in favor of businesses that are somewhat competitive.”

However, despite cautious enthusiasm for the latest step, the two experts cautioned that unless North Korea moves further in the direction of a market economic system, the measure might not prove effective.

Cho explained, “No matter how tightly the North Korean authorities seek to control economic activity, they will find it almost impossible to stop these wage rises inciting inflation and causing the value of the North Korean Won to nosedive even more. There is also the danger of conflict with between military and Party-Cabinet elements over the management of mineral resource enterprises that can be used to produce military goods.”

Yoon added that workers in enterprises excluded from the latest wage rises will not see the bigger economic picture, and will simply be aggrieved at there being no improvement in their own conditions. “Conflict is unavoidable,” he concluded.

ORIGINAL POST (2013-11-6): According to the Daily NK:

Wage levels for workers in some larger industrial enterprises have risen by a factor of approximately one hundred times, Daily NK has learned. The move, which was put forward as part of the “June 28th Policy” in mid-2012 and is designed to bring wages more into line with market price levels, appears designed to improve the productivity and competitiveness of major industrial concerns.

According to a source from North Hamkyung Province, the monthly wage of people working at Musan Iron Mine, Kim Chaek Iron and Steel Complex and Sungjin Steel Mill rose from an average of just 3000-4000 won up to 300,000 won in September and October. In an attempt to forestall the inflation that such a step would otherwise guarantee, 200,000 won of the payment is issued in goods, with just 100,000 won provided in cash.

The source explained to Daily NK on the 5th, “In September the order was handed down in the name of the State Economic Development Commission to Musan, Kim Chaek and Sungjin; it was about guaranteeing independence in terms of production and the authority to set salary levels. At the time most workers did not believe that they were going to be given a wage of 300,000 won, and are really surprised now that they are actually getting it.”

The source went on to assert that the same instructions have been handed down to all provinces, not only North Hamkyung. “Relatively more competitive” industrial enterprises in each province have been selected, he said, and are resetting wages at a higher level.

Explaining the system of payments in kind, the source said, “Because they are concerned about the danger of inflation being created by the wage rises, they give 200,000 won of it in rice, vegetables, side dishes, other necessities, and electronics. Only the remaining 100,000 won is given in cash.” Workers have been told “not to make purchases in public markets since the state is now providing for your daily needs,” although the instruction is not likely to be adhered to.

Predictably, the source revealed that the move has attracted attention from surrounding enterprises. “Workers who had been ‘off sick’ are coming back,” he said, “and workers from other enterprises have been descending on us after hearing that we are getting a lot of wages and other stuff.”

The move appears designed to increase the competitiveness of major industrial enterprises in North Korea, and to improve the attractiveness of joint ventures to companies in China.

At the time of writing, the dramatic wage increase has not generated rice price inflation in public markets in the North Hamkyung Province region. For example, the price of rice in Musan is currently stable at around 5,800 won/kg.

On this, the source concluded, “Because some of the wages have been given in kind, demand in markets will not rise for the time being.” However, he cautioned that later, when workers attempt to buy and sell the products they have received, instability and inflation could result.

Read the full story here:
Wages Rise 100x in Heavy Industry
Daily NK
Lee Sang Yong
2013-11-6

Pictured Above (Google Earth): The Pyongyang International Football School and support facilities

According to the Korea Herald (Yonhap):

International soccer’s governing body FIFA has provided funds worth $500,000 to build infrastructure to update a soccer academy in Pyongyang, a media outlet reported Thursday.

The International School of Football opened earlier this year and has been training North Korean youths between the ages of 6 and 13, according to a report by Radio Free Asia.

The Washington-based broadcaster said support was given as part of its “goal project” to help build football-related infrastructure in less affluent countries.

FIFA started providing support to the North from 2001 onwards, with around $2 million having been spent so far on six development projects.

Related to the school, North Korean media said its leader Kim Jong-un in June personally designated a name for the new facility that opened on May 31.

Read the full story here:
FIFA gives funds to improve soccer academy in N.K.
Korea Herald (Yonhap)
2013-10-31

According to KCNA (2013-10-28):

Agreements on Cooperation between Governments of DPRK, Mongolia Signed

Pyongyang, October 28 (KCNA) — An agreement on cooperation in the fields of industry and agriculture and an agreement on cooperation in the fields of culture, sports and tourism were signed here on Monday between the governments of the DPRK and Mongolia.

Present there from the DPRK side were Kim Yong Nam, president of the Presidium of the DPRK Supreme People’s Assembly, Pak Ui Chun, minister of Foreign Affairs, Ri Ryong Nam, minister of Foreign Trade, Kim Jong Suk, chairwoman of the Korean Committee for Cultural Relations with Foreign Countries, Pak Kil Yon, vice-minister of Foreign Affairs, Kwak Il Ryong, vice-minister of Land and Maritime Transport, Hong Kyu, DPRK ambassador to Mongolia, Jong Song Chan, vice general director of the General Bureau of Software Industry of the DPRK, and officials concerned.

Present from the Mongolian side were Mongolian President Tsakhiagiin Elbegdorj, Luvsanvandan Bold, minister of Foreign Affairs and Trade, Manibadrakh Ganbold, Mongolian ambassador to the DPRK, Khaltmaa Battulga, minister of Industry and Agriculture, Tsagaandari Enkhtuvshin, secretary general of the National Security Council, Tserendejid Byambajav, chief of the General Staff of the Armed Forces, Khabshai Erjan, vice-minister of Road Transport, Lundeg Purevsuren, national security and foreign policy advisor to the President, Amgalanbaatar Ganbaatar, advisor for mass liaison and mass policy to the President, Pureb Altangerel, secretary of state for the Ministry of Culture, Sports and Tourism, officials concerned and staff members of the Mongolian embassy here.

The agreement on cooperation in the fields of industry and agriculture was inked by Ri Ryong Nam, minister of Foreign Trade, and Khaltmaa Battulga, minister of Industry and Agriculture, and the agreement on cooperation in the fields of culture, sports and tourism by Kim Jong Suk, chairwoman of the Korean Committee for Cultural Relations with Foreign Countries, and Luvsanvandan Bold, minister of Foreign Affairs and Trade, on behalf of the governments of the DPRK and Mongolia.

Meanwhile, the 2013-2015 plan for exchange in the IT field between the General Bureau of Software Industry of the DPRK and the IT, Post and Telecommunication Bureau of Mongolia was signed.

Institute for Far Eastern Studies (IFES)
2013-10-16

The first chairman of the National Defence Commission of North Korea, Kim Jong Un, took office two years ago. Since then, construction of sports and entertainment facilities are reported to have increased considerably. According to the South Korean Ministry of Unification, North Korea’s Pyongyang Folk Park (September 2012), Taesongsan General Hospital (March 2013), and Haedanghwa Service Complex (April 2013) were recently completed. Since the launch of the Kim Jong Un regime, the Masik Pass Ski Resort and other similar sports facilities have been undertaken and are nearing completion.

In addition, the People’s Theatre (April 2012), Rungna People’s Pleasure Ground (opened in July 2012), Sunrise Restaurant (September 2012), and Unification Street Center (September 2012) have been recently renovated. In addition, the Mirim Riding Club, Pyongyang Gymnasium, Munsu Wading Pool, Aprok (Yalu) River Amusement park, Karma Hotel, and New Day Hotel and other hotels around Pyongyang are currently under renovation and repair. Entertainment and sports facilities around other major cities are being constructed as well. Furthermore, after the successful launch of Kwangmyongsong 3-2 last December, North Korea has begun to construct major residential complexes for scientists, granting them preferential housing in Unha scientist residence, Kim Il Sung University educator residence, and Pyongsong residence. Other large-scale housing projects are also reported to be under development.

In the wake of major celebrations in North Korea — such as the 100th anniversary of the birth of Kim Il Sung and 60-year anniversary of the “Victory in the Fatherland Liberation War” — a large memorial was erected and existing facilities were repaired. Specifically, the Korean People’s Army Exhibition of Arms and Equipment, Kumsusan Memorial Palace, War Victory Monument, and the Cemetery of the Fallen Fighters of the KPA were refurbished.

Unlike the large-scale construction of sports and entertainment facilities, new constructions of harbors, roads, power plants and other social overhead capital (SOC) is reported to be in decline.

Last August, North Korea’s trade with China has shown an 8 percent increase in exports and 6 percent decrease in imports, following a similar trend from last year. According to the South Korean Ministry of Unification, North Korea’s current trade volume with China is reported to be 4 billion USD (1.89 billion USD in exports and 2.2 billion USD in imports).

North Korea’s most popular export items are mineral resources such anthracite, coal, and iron ore. In the case of clothing products — which are mostly consigned processing — there has been an increase of 42 percent (200 million USD) against the previous year. Major categories of imports from China are crude oil, food, and fertilizers. Compared to the previous year, food imports have declined 57 percent (17.4 million tons), and fertilizer and crude oil imports are also showing gradual reduction at 27 percent (18.3 million tons) and 6 percent (34.6 million tons), respectively.

According to the Washington Free Beacon:

North Korea’s global network of state-run restaurants, most in China, are dens of espionage and sites of operations involving tens of thousands of overseas North Koreans who send the regime in Pyongyang more than $100 million in hard currency annually, according to U.S. and western intelligence officials.

In Asia alone, the U.S. government has identified 60 restaurants ranging from Nepal to Cambodia to Dandong, China – located along the Yalu River separating China from North Korea.

Additionally, North Korea has dispatched up to 40,000 guest workers abroad. The workers are forced to live in slave-like conditions and provide a large portion of their funds to the communist government, said officials who discussed intelligence on the operations on condition of anonymity.

North Korea’s restaurants have become important sources of currency. The restaurants make annual payments to Pyongyang of between $10,000 and $30,000, according to defectors from North Korea with direct knowledge.

From the 60 restaurants in Asia—including 44 in China, one each in Bangladesh, Burma, Malaysia, Nepal, Indonesia, and Laos, and five each in Cambodia and Vietnam—up to $1.8 million is remitted to Pyongyang.

Under Kim Jong-Il, Kim Jong-Un’s predecessor and father, all North Korean foreign intelligence stations were directed to procure their own funds. “The Reconnaissance General Bureau has been using its North Korean restaurants in Beijing to finance its operations,” one defector said.

The North Koreans operate 11 restaurants in the Chinese capital; six in Shanghai and six in Dandong near North Korea.

Many of the restaurants feature a traditional cold noodle dish and include song and dance numbers by North Korean waitresses and singers who intelligence officials say are also trained in the black arts of intelligence seduction.

The restaurant network is controlled by the North Korean military’s General Reconnaissance Bureau—specifically, Bureau 39, which is in charge of gathering hard currency for the regime. The Bureau is part of North Korea’s vast political police and intelligence system designed to keep the totalitarian communist regime of ruler Kim Jong-Un in power.

The General Reconnaissance Bureau is under Gen. O Kuk-Ryol, a National Defense Commission vice chairman, who has been directly linked by U.S. intelligence to North Korea’s production of counterfeit $100 bills so convincing they have been dubbed “supernotes.” The Treasury Department recent issued a new $100 bill with security features designed in part as a result of the North Korean counterfeiting.

The restaurants also have been linked to money laundering operations and other illicit activities by North Korea, whose agents in the past have been implicated in illegal drug trafficking.

The Pyongyang Koryo Restaurant in Dandong was opened in 2012 and is the largest franchise with more than 200 staff workers. It is located in a five story building on the Yalu River separating China from North Korea.

Another mission of the restaurants is to spy on South Korean travelers who frequent the restaurants. Defectors say waitresses at the eateries are trained in intelligence gathering with an emphasis on prying corporate secrets from business travelers.

The restaurants are also meeting places for North Korean intelligence officers and North Korean agents. Officials, businessmen, and overseas workers also frequent the restaurants to recruit targets for foreign intelligence services, including the Central Intelligence Agency (CIA), China’s Ministry of State Security, and South Korea’s National Intelligence Service, as well as other spy agencies.

You can read the full story here:
North Korea’s Overseas Restaurants Used for Espionage and Gaining Hard Currency
Washington Free Beacon
Bill Gertz
2013-10-15

Ruediger Frank writes in the East Asia Forum:

After decades of being divided into a population of a small and mostly invisible elite and everyone else, a middle class of about 2 million people is on the rise. These are the people who have mobile phones, use taxis and show a remarkable diversity in clothing and accessories. The local 7-inch tablet computer, ‘Samjiyŏn’, sells for US$180 and comes with the Android operating system and a number of apps such as a dictionary, changgi (Korean chess), and a collection of the works of the two deceased former leaders, Kim Il-sung and Kim Jong-il.

The quality of life in the capital differs significantly from the rest of the country. Some observers believe this will increase discontent; but it also smartly diverts attention away from the shiny examples of foreign metropolises spread on pirated DVDs and USB sticks, and offers the population a domestic Xanadu. The key question for social stability is thus not what peasants in the countryside dream about, but what middle-class Pyongyangites aspire to. Meanwhile, the number of solar panels and small windmills is rising, which is the countryside’s solution to having less privileged access to power.

Despite all the changes, many of the old problems remain unsolved. Prices rise, speculation is rampant and frustration grows in sync with corruption and an ever-more obvious gap between the poor and the new middle class. It would be unrealistic to imply that Kim Jong-un even theoretically had the chance to improve the lives of the majority of his people significantly within a year of taking over. But he has not been idle. Inequality in North Korea is a sign of deepening change. A growing income and welfare gap between individuals indicates that the economy is on the move away from socialist egalitarianism towards capitalist diversity.

Read the full report here:
North Korea’s rolling economic reforms
Ruediger Frank
East Asia Forum
2013-9-24

UPDATE 4 (2014-1-8): You can see the video here:

UPDATE 3 (2014-1-7): The Guardian offers additional information on the rap video trip here:

Pacman and Peso have granted the Guardian an exclusive preview of the video – as well as their first interview about an adventure in the world’s most despotic regime.

The genesis of their music video was a random encounter earlier this year with Ramsey Aburdene, a 25-year-old Washington-based investment banker who liked their music and became their manager. Aburdene had a friend who used to be in the military and specialises in getting people into Pyongyang, so they hatched the plan to shoot a rap video there.

No one involved in the trip could easily articulate why exactly North Korea was an appropriate backdrop for the music video. But they still managed to raise $10,400 on the crowd-funding website Kickstarter.

Interviewed recently in Aburdene’s bedroom in a shared house in Mount Pleasant, Pacman, 19, and Peso, 20, recounted their surreal, eye-opening experiences in North Korea.

They managed to film their rap video inside Pyongyang’s faltering metro, beside the demilitarized zone bordering South Korea, on a rice farm and in front of various North Korean monuments, not least the Kumsusan Palace of the Sun, an ornate mausoleum for Kim Il-sung, the so-called founder and eternal president of the country, and his son, Kim Jong-il.

Before arriving in North Korea, the group took part in a tour through Asian countries including China, Hong Kong and Mongolia. But it almost began in disaster in Beijing, when the rap entourage, which included some of Aburdene’s university friends, decided to hire motorcycles.

Peso, whose real name is Dontray Ennis, collided with a car near Tiananmen Square and, aware that he was not insured, fled. An angry crowd apprehended Pacman, whose real name is Anthony Bobb. “I was like, man, we ain’t going to North Korea. I’m gonna get locked up in Beijing,” Pacman recalls. “This shit gonna be on the news.”

After some ad-hoc diplomacy and a visit to a car repair shop, the group was let free, but missed their flight to Hong Kong, arriving late for the next leg of the journey – hosted by their main financial backer.

James Passin, a 41-year-old hedge fund manager who has poured millions of dollars in Mongolia, and also has business interests in North Korea, donated $5,100 to their Kickstarter campaign.

Described in BusinessWeek as ‘The American Who Bought Mongolia’, Passin was keen to be involved in the project. “He actually wanted to be in the North Korea video, but then his advisors told him it was probably better not to be,” Aburdene said.

Instead, Passin invited the rapping tour to Hong Kong, where he happened to be hosting his investor conference – and birthday celebration – in the Grand Hyatt hotel. Later, Passin flew the group to Ulan Bator, the capital of Mongolia. It was Peso’s favourite stop on the whole tour, not least because of the generous hospitality of their host. “The moment we arrived we got chauffeur rides to the hotel,” he said. “I had lobster with some fries while I was sipping on Sprite,” said Pacman.

Returning briefly to Beijing, the group picked up some tailored silk suits in preparation for North Korea. But by then the situation in Pyongyang had changed.

It was the end of November, and Merrill Newman, an 85-year-old Korean War veteran, had been detained in North Korea. The State Department strongly discouraged American citizens against visiting North Korea, the first warning of its kind since Pyongyang began allowing tourists into the country in 1995.

Pacman and Peso were being compared to Dennis Rodman, the former basketball star who has developed unlikely friendship with Kim Jong-un. Unlike Rodman, who is currently in Pyongyang accompanied by a fleet of former basketball players, the DC rappers did not have the blessing of Kim Jong-un, or indeed anyone else from North Korean officialdom.

Instead, they had always planned to travel beneath the radar, shooting their video under the cover of a sightseeing tour. With the five-day trip just hours away, the entourage began to realise that an interview with the BBC was probably not the best way to maintain a low-profile. Shortly before boarding, they read a Gawker article mentioning how, despite the State Department advice, “a much-publicized trip by two DC rappers, Pacman and Peso, is going ahead as planned.”

“All the buzz we were getting, I thought we were gonna get hemmed up, captured,” said Pacman. His rapping partner agreed: “I was like: uh-oh. Are we gonna make it?” They put their worries behind them and flew to Pyongyang regardless.

When the aircraft doors opened, they walked out to the sound of snapping cameras. “As soon as I seen cameras, I started being myself,” said Peso. “I started flipping my jacket open, smoking my cigarette in front of the cameras, turn[ing] round to make sure they got the suit.”

Despite the the flurry of attention from Associated Press journalists at the airport, the rappers succeeded in going largely unnoticed in North Korea.

Each day, Pacman and Peso hopped on a tourist bus, which ferried them to approved locations across the country in the company of government-sanctioned tour guides. So as not to attract attention, they used a small, Canon camera to shoot video, filming segments surreptitiously whenever their minders were looking the other way. Microphones, headphones, or amplified music were out of the question. Instead, they improvised. “We were just spitting the voice that was in our head,” Peso said. “It was just work, work, work, non-stop.”

They were not helped by the sub-zero temperatures and snow. There was rarely heating in any of the buildings and the silk suits provided little comfort. “One of the North Koreans, he gave me his coat,” Pacman said. “I asked him if he wanted it back, and he was like, ‘Nah, just keep it for the rest of the night.’”

Memories such as that left both young men with a positive experience of North Korea. They still speak about their recollections in dreamy monologues. “The old ladies looked like they were carrying the heaviest things. The army people walking down the street had guns,” said Pacman. “You see a whole bunch of rice fields. People was riding bikes. The little kids was walking down the street by themselves, they must have been in first grade. But everybody waved.”

One month on, both Pacman and Peso say they still feel energised by their journey to North Korea. They look and sound more animated than before they departed, when the anxiety was showing on their faces. “No-one has made a music video in North Korea before. Or even thought about it,” Peso said proudly. Pacman said his rapping had improved since their return. “It sounds stronger, the words are coming faster, quicker,” he said.

Smiling, he remembers the elation he felt when they departed Pyongyang. “The first thing I thought was: we made it out,” he said. “We beat the odds.”

UPDATE 2 (2013-12-1): According to the Associated Press:

The two rappers said their trip shied away from politics.

“I mean we did not go there to be political. We just go down there to shoot our video and that about the reason why we went, not political,” said Pacman – whose real name is Anthony Bobb.

The duo from the Washington area spoke to reporters at an airport in Beijing upon their return from a five-day trip to North Korea.

More in The Guardian.

UPDATE 1 (2013-11-8): According to the Guardian:

Pacman and Peso have never traveled much beyond the poor suburb of Washington DC where they live. But after a successful internet fundraising drive, the unsigned hip-hop duo will next Saturday embark on a trip, to shoot a video they hope will jumpstart their career, with an unlikely destination – North Korea.

After raising $10,400 from their  Kickstarter campaign, the pair will first fly to China and then on to Pyongyang, where they plan to film songs such as “God Bless Amerika” on a party bus.

Neither of them have flown on an airplane. They say they only recently discovered that North Korea was a foreign country.

Comparisons are inevitably being made with Dennis Rodman, the former basketball player whose visits to North Korea resulted in an unlikely friendship with the country’s dynastic leader, Kim Jong-un. But Pacman, 19, and Peso, 20, unsigned artists in search of a record deal to lift them out of poverty, are on the cusp of a very different kind of trip.

The story of the rap duo’s adventure could only be forged in a place like Washington, a deeply divided city where separated communities only occasionally overlap. A few months ago, Pacman was walking through his neighbourhood, Congress Heights, when he came across a group of twentysomethings shooting a music video. He struck up a friendship with one of the group, a white, 24-year-old investment banker named Ramsey Aburdene, who has since been managing the pair in his spare time.

Aburdene, from DC’s affluent north-west quadrant, had an acquaintance who happened to be an expert on North Korea. Mike Bassett, 34, is a former Iraq war veteran who was lived for seven years in South Korea, four of them with the US army.

A self-described pacifist, Bassett has become a fixer for people interested in traveling to Pyongyang. A Master’s student at American University, he has coordinated several cultural exchanges and traveled extensively in the country since restrictions were eased in 2010.

He has arranged the two rappers’ flights and visas, and laid the necessary groundwork for their tour. Bassett insists North Korea is misunderstood in the eyes of the west, and says Pacman and Peso will be treated with courtesy. Still, he has felt it necessary to provide the young rappers with some cultural advice, and instructed them to amend some of their lyrics.

An entourage consisting of Pacman, Peso, Bassett and Aburdene, plus other friends, departs next Saturday. At their leaving party in Washington on Thursday, in a bar near Aburdene’s house, Peso and Pacman provided well-wishers with an introduction to their debut mixtape.

Once or twice, the crowd broke out into chants of “North Korea”. But no-one really seemed to know exactly why the pair were traveling to the autocratic state, least of all Pacman and Peso. “I’m a thrill-seeker, I don’t fear nothing,” said Pacman, a smiley, baby-faced teenager whose real name is Anthony Bobb. “I like an action movie. I can’t sit and watch a drama flick – it takes too long.”

Pacman said people keep telling him not to go; his aunt tried to talk him out of the trip and his mum told to him to watch his back. “Me personally, I don’t pay too much to politics, so I can’t say what is right. Then again, who is to say what is right and what is wrong?”

His serious-looking partner Peso, from Landover, said: “I’m excited – the only thing I’m not excited about is the plane.” He added: “We’re changing the game. Nobody has shot a video in North Korea like we’re about to do.”

Asked if he was worried for his safety, Peso, whose real name is Dontray Ennis, replied: “You don’t think this is a dangerous place to be living at right now? There’s your answer, then.”

The idea that Pacman and Peso are just as likely to be subject to arbitrary detention, arrest and mistreatment in the streets around their home as Pyongyang has become a theme in the promotion surrounding their trip. It was the thrust of a piece profiling the pair in the Washington Post, which helped them easily surpass their fundraising goal of $6,000. The 4,000-word feature gave the pair huge exposure in the city, not least because the reporter interviewing them, Monica Hesse, was stopped and searched by police in the process.

“We’re not trying to be political heroes or anything like that,” said Aburdene. “We understand there is terrible stuff going on in North Korea, but there is terrible stuff going on here that people aren’t straight up about.”

Both Pacman and Peso have spent time in jail for minor offences. There is no doubt their day-to-day lives are not comparable to that of of the predominantly white community that is fast gentrifying America’s capital.

Aburdene said that he trusts Bassett when it comes to protecting the party’s safety in North Korea. He is not worried they will be detained, but is concerned their footage might get confiscated and said he realised they may need to tread carefully. “Even if it’s not a standard, crazy, party-like thing, I’ll enjoy the anthropological side,” he said.

But beneath the bravado, there appears to be at least a hint of anxiety on the part of the two young rappers.

At one point during a pre-show interview, Peso seemed only half-joking when he talked about the pair maybe being killed in North Korea. “If we don’t die, it will probably be a big life-changer,” he said.

He looked a little uncertain, before adding: “Can I ask you a question? What do you think is going to happen when we go over there?

ORIGINAL POST (2013-9-18): US hip hop performers to film video in DPRK. According to the Washington Post:

A few weeks ago, a Kickstarter project was posted on the Internet featuring two young men who went by the names of Pacman and Peso. The duo and their producer were using the crowdsourcing site to raise money for a creative endeavor; they wanted to make a music video. A rap music video. They wanted to do it on a karaoke party bus. They needed only $6,000, a fairly modest sum, considering that this estimate also included lodging and two overseas flights. The video, you see, was going to be filmed in Pyongyang.

North Korea.

Rappers Pacman, 19, and Peso, 20, are raising $6,000 to make a music video. They want to do it on a karaoke party bus in Pyongyang, North Korea. Here, they spend time in the District and Maryland, making music and spending time with family and friends.

“This trip will be a fantastic opportunity for Pacman and Peso to meet young, dynamic people and significantly broaden their horizons,” read the proposal, which was posted Aug. 30, “in addition to jump starting their musical careers.” The title was straightforward and surreal: “Pacman & Peso Make a Music Video in North Korea.”

According to Yonhap:

North Korea has approved for the first time the hoisting of South Korea’s national flag and playing of its anthem on the communist country’s soil, the unification ministry said Friday.

The move comes as the North invited South Korean weightlifters to attend the 2013 Asian Cup and Interclub Weightlifting Championship to be held in the communist country, the Ministry of Unification said.

If realized, it will be the first time in history that South Korea’s national flag, the Taegeukgi will be raised and the national anthem performed in North Korea.

The ministry in charge of all inter-Korean relations said it approved the cross-border trip by the 41-member team made up of South Korean weightlifters and officials who plans to visit Pyongyang next week for a nine-day stay to attend the international sporting competition. The event is set from Sept. 11-17 in the North Korean capital.

Officials here said approval was given because the event is an international gathering organized by the Asia Weightlifting Federation, and Pyongyang vowed to guarantee the safety of the athletes from the South.

Such reconciliatory gestures from both sides are in line with a recent series of signs of thawing relations following a deal to restart the shuttered joint industrial park in the North’s border city of Kaesong and to arrange reunions for families separated by the 1950-53 Korean War.

In 2008 I attended a DPRK-ROK World Cup prelim match in Shanghai.  The game was supposed to be held in Pyongyang, but the North Koreans refused to allow the South Korean anthem and flag to be used (as the South Koreans had done).

Read the full story here:
N. Korea allows S. Korean flag hoisting, anthem for first time
Yonhap
2013-9-6

UPDATE 3 (2013-12-1): Macleans has more information on how Rodman arranged his second trip to the DPRK:

Sometime last spring, Dennis Rodman, the unpredictable, flamboyant NBA hall of famer, found he had a problem: How was he going to get back into North Korea?

As it happened, Rodman had a standing invitation from that hermetic country’s supreme leader, Kim Jong Un—a man Rodman has described as “my friend” ever since his first trip to the Democratic People’s Republic of Korea (DPRK) last March. But, the DPRK is not an easy holiday destination, and Kim hadn’t offered to send a personal jet.

Rodman’s first trip had been worry-free—it was arranged by the in-your-face media company Vice, which used Rodman’s allure as a former Chicago Bull (the ruling Kim dynasty has an enduring fascination with the team) to gain entry to the country and shoot an HBO documentary. But the Vice crew’s anti-Kim agenda had left North Korean officials, and Rodman himself, nonplussed. This time, Rodman wanted to go unencumbered by cameras and press people. So what to do?

“They tried to go to a travel agent, I guess, but obviously it doesn’t work that way,” says Joseph Terwilliger, a geneticist at the Columbia University Medical Center, who got involved in Rodman’s quest after successfully bidding on a basketball game with him at a charity auction. The pair shot hoops, but mainly they talked North Korea.

Terwilliger told Rodman he knew exactly who could help: Michael Spavor, a Canadian he’d first met at the bar of the Yanggakdo International Hotel in Pyongyang some years ago, and who has developed a reputation for being one of those rare things—a foreigner whom the North Koreans have come to trust, and who can get things done in that country.

Spavor, 38, is not what you’d expect from an emissary to North Korea. An affable, mild-mannered type who grew up in a Calgary suburb, he first became intrigued by North Korea during a short stay in Seoul in the late 1990s, when, flipping through the Lonely Planet travel guide, he stumbled across the section on the DPRK—“just a little sliver in the back,” he recalls. “It was the most interesting part of the whole book.”

He went on to live in Pyongyang for six months in 2005, working as a teacher at a school affiliated with a Vancouver-based NGO. He’s been in and out of the DPRK ever since, developing key contacts in the regime along the way. Spavor speaks the North Korean dialect—a more formal variant of the southern—so fluently that he fools people on the phone, and he ran a school specializing in DPRK Korean in Yanji, the city in a largely Korean corner of northeast China where he now lives.

Not your typical line of work, and occasionally it raises eyebrows. Passing through the U.S. a few weeks ago, his unusual travel itinerary raised red flags with a customs official. Spavor asked if the officer had heard about Rodman’s trip to North Korea in early September. Sure, he had. “I organized it,” Spavor told him. “It was a blast.”

It was, in some ways, a bro vacation. Rodman’s entourage included; Christopher Volo, a mixed-martial-arts fighter, and Terwilliger, the Columbia prof, who also happens to be a pro tuba player. Terwilliger had become fascinated by the DPRK as a kid listening to shortwave radio from Pyongyang; he’d been on North Korea’s propaganda mailing list for years and found the material he received “interesting.” Together, the men sang, drank, ate and laughed with Marshall Kim, as he likes to be known, at his seaside retreat, a “seven-star” home-away-from-home that Rodman later compared to Ibiza.

“In the media, Marshall Kim Jung Un is portrayed as serious,” Spavor told Maclean’s in an interview. “But we were able to see a more charismatic, friendly side to him. He has a good sense of humour.”

Spavor carries official pictures, taken by a state photographer, of the encounter on his iPhone, and though he’s wary of whom he shows them to—Spavor is fastidiously careful in regards to everything DPRK-related—it’s clear from the shots that this was a casual affair enjoyed by Rodman, his entourage, and by Kim, who is thought to be around 30.

“Dennis and Marshall Kim talked, and Michael and I tried to translate as much as we could,” explains Terwilliger.

Then he corrects himself.

“I mean, Michael translated as much as he could to Korean,” he says. “I was more translating Dennis to English.”

The two Rodman visits to North Korea have received their share of ridicule—North Korea, after all, is a pariah state, with a troubling human rights record and a history of threatening its enemies, including the U.S., with nuclear destruction. But, Spavor, who has led many similar, though lower-profile, cultural-exchange tours there—students and faculty from Cambridge, Harvard and McGill have seen North Korea from the inside, thanks to his ministrations—saw Rodman’s visits as “a chance for international relationship-building, in this case, through the medium of sport.”

Asked if such an endeavour makes him an apologist for what many consider a pretty nasty regime, Spavor won’t be drawn in. “I’m really in no position to comment on political and human rights issues,” he says. “Those issues are better discussed between governments.”

During his time living in Pyongyang, Spavor was able to observe “regular, everyday life”—people going to work, young couples walking hand-in-hand, vibrant markets. “I met a lot of really beautiful people—so sweet,” he says. “It was contrary to what I’d heard, that they were cold. You hear about this mysterious, unfriendly place.”

He credits his good contacts in North Korea with his capacity to interact with the North Koreans on their own terms—a rapport he picked up while eating, drinking and singing with them during his brief time living there. “I really learned how to party with North Koreans—to party and enjoy myself in their environment,” he says. “I have a rare and odd skill that enables me to connect the DPRK to other people.” Spavor celebrated his birthday in North Korea in November, feasting on North Korean birthday cake, which he says was delicious.

It was his relationship with the North Korean regime that helped Spavor spirit Rodman through Beijing, where the basketball legend sought to keep a low profile, and onto a flight with Air Koryo, the North Korean airline. “You know, it’s not easy hiding a six-foot-seven black guy with tongue piercings and tattoos in China,” says Terwilliger.

Indeed, Spavor has carved out a reputation as a street-smart, savvy conduit, someone the North Koreans know is capable of discretion.

“If you sent a traditionally diplomatically minded person, it would be very difficult for such a person to deal with North Korea,” says Andrei Lankov, a professor at Kookmin University in Seoul and a leading authority on North Korea. “Michael has a great deal of common sense, and he’s a very normal guy, but also very smart. He understands the society and he’s not afraid to experiment and do things that are unusual.” Hence, Spavor’s willingness to engage with the North Koreans on the basketball court.

Spavor’s unusual relationship with the North Koreans is driving plans, bankrolled by the colourful Irish bookmaking company Paddy Power, to mount a basketball exchange between the U.S. and the DPRK in January, when between 10 and 12 former NBA players—Spavor won’t name names—are due to arrive in Pyongyang to help coach North Korea’s national basketball team.

And it is Spavor, as a Canadian, whom officials in North Korea’s ministry of sport approached with the idea of setting up a hockey exchange between North Korea and Canada. The project is still in its early stages, but Spavor says there is interest from the NHL. He envisions NHL players and coaches arriving next autumn or winter to help train the country’s national team. As it turns out, the North Koreans do play hockey, in the International Ice Hockey Federation’s Division III category, which also includes such lesser hockey nations as South Africa, Ireland and Greece. He’s also looking into organizing another sports exchange between North Korea and Canada—this one centred on skiing (the DPRK is poised to open its first ski resort, at the Masik Pass, on the country’s east coast).

The DPRK is borrowing from American culture in other ways, too. Spavor carries with him the Samjiyon, a North Korean-made tablet computer loaded with North Korean books, and with the republic’s answer to Angry Birds, a computer game called Gomuchong—rubber gun—that looks remarkably similar to the one-time iPhone sensation. Another stab at a cultural exchange? Perhaps. It may also be piracy.

UPDATE 2 (2013-9-8): Just as Kenji Fujimoto taught us the name of Kim Jong-un, Rodman has revealed to the world the name of Kim Jong-un’s daughter. According to The Guardian:

Dennis Rodman has already described Kim as an “awesome guy”. On Sunday, he told the Guardian the leader was also a “good dad” to his baby daughter, whom he named as Ju-ae.

“The Marshal Kim and I had a relaxing time by the sea with his family,” Rodman said of his recent visit to the world’s most isolated country. “We shared many meals and drinks where we discussed our plans to play a historic friendship basketball game between North Korea and the US as well as ways to develop their basketball team.”

“I held their baby Ju-ae and spoke with Ms Ri [Sol-Ju, Kim’s wife] as well. He’s a good dad and has a beautiful family. Kim told me, ‘I’ll see you in December.'”

Rodman plans to organise a basketball game between American and Korean teams.

“Kim is a great guy, he loves basketball, and he’s interested in building trust and understanding through sport and cultural exchanges,” Rodman said. “I know in time Americans will see I’m just trying to help us all get along and see eye to eye through basketball and with my friendship with Kim I know this will happen.” Further details on the basketball match are expected on Monday.

If the Rodman in Pyongyang story wasn’t unusual enough, there is an extra twist – it is being sponsored by an Irish bookmaking firm, which cheerfully admits it has no experience of international diplomacy.

Paddy Power used Rodman for a promotional stunt involving bets about the new pope, after which the eponymous son of the founder of the firm went for “pizza and a few glasses of wine” with the ex-NBA star in Rome. Rodman then explained his “basketball diplomacy” idea.

Despite thinking it was “all a bit bonkers”, Power decided to get involved. He said: “If you’d told me about this 12 months ago I’d have got the men in white coats to take you away. It’s an unusual idea to say the least.”

Power stressed that the project did not mean that the company or Rodman “endorse or support” one of the world’s most repressive regimes, which has an appalling human rights record.

The company consulted a Korea expert at the International Crisis Group thinktank, which argues that this is not entirely a stunt.

“Someone might say that Dennis Rodman provides political legitimacy to the regime, or it can be treated as a propaganda coup,” said ICG’s Daniel Pinkston, who has been an expert on North Korea for 30 years. “I think that’s greatly exaggerated. If you have a former president of the United States, that factor might be much greater. But someone like Dennis Rodman can’t do that. He can’t lift sanctions – he doesn’t have that power or authority.”

“The risks and costs are very, very low, and what you’re creating is a channel for the exchange of ideas. It’s a very small channel, but it’s there.”

He said the interaction between Kim and Rodman sent out a signal to the world – and to North Koreans. “Here’s someone who’s one of the most nonconformist individuals you can think of. And here’s the leader, embracing him. That is an implicit signal – it’s OK to be different.”

The New York Times also reports:

On Monday, Mr. Rodman said Mr. Kim gave him the right to write a book about him.

…

Mr. Rodman said he would put together a team of 12 former N.B.A. stars to travel to Pyongyang in January for one week. He said he hoped to recruit people like his former Chicago Bulls teammate Scottie Pippen and Karl Malone. They will play a North Korean team on Jan. 8 and another game two days later, he said. Mr. Kim promised a stadium and 95,000 fans.

Mr. Rodman said he planned to travel to Pyongyang in December to help select and prepare a North Korean team. A second set of games between the teams will be played in June in Europe, according to an agreement between the North Korean minister of sports and Mr. Rodman that was read during the news conference on Monday.

Mr. Rodman said he accepted Mr. Kim’s request for him to train the North’s Olympic basketball team.

UPDATE 1 (2013-9-7): Reuters reports that Dennis Rodman has left without Kenneth Bae.

Former U.S. basketball star Dennis Rodman returned on Saturday from his second visit to North Korea this year where he again met the reclusive country’s leader Kim Jong-un, but did not come back with jailed American missionary Kenneth Bae.

…

“That’s not my job to ask about Kenneth Bae. Ask Obama about that. Ask Hillary Clinton,” he told a throng of reporters. “I don’t give a shit.”

…

Rodman showed reporters in Beijing pictures of him meeting Kim, and said he had given Kim a gift of his Bad Boy vodka, which “he loved”.

“He is my friend for life. I don’t care what you guys think about him. I don’t give a shit about what people around the world think about him,” he added.

Rodman’s latest trip was sponsored by Irish bookmaker Paddy Power.

ORIGINAL POST (2013-9-7): Back in February Dennis Rodman made headlines by visiting the DPRK with the Harlem Globetrotters for a trip arranged by the new Vice show on HBO.

On September 3, Rodman returned to the DPRK for his second trip.

Here is coverage in Rodong Sinmun:

Supreme leader Kim Jong Un met ex-NBA star Dennis Rodman and his party on a visit to the DPRK.
He warmly greeted them and had a cordial talk with them.

Warmly welcoming Dennis Rodman visiting the DPRK again as a friend in a good season, Kim Jong Un told him that he might visit the DPRK any time and spend pleasant days, having a rest.

Saying he feels very grateful to Kim Jong Un for sparing a precious time to meet him and his party despite his tight schedule, Dennis Rodman said this is an expression of good faith towards the Americans.

He said that he was fortunate to revisit the DPRK as he has friendly relations with broad-minded Marshal Kim Jong Un.

Dennis Rodman evinced his will to contribute to boosting diverse sports and cultural exchange with the DPRK.

He presented Kim Jong Un and his wife Ri Sol Ju with a gift he prepared with the deepest respect for them.

Kim Jong Un, together with him and his party, watched a basketball match between the April 25 Team and the Amnokgang Team.

Kim Jong Un hosted a dinner for Dennis Rodman and his party.

Expressing his heartfelt thanks to Kim Jong Un for spending a lot of time for him and his party and according them the warmest hospitality, Dennis Rodman said he would remember this visit as an unforgettable beautiful memory all his life.