North Korean Economy Watch

Daily NK
Han Young Jin
10/16/2007

Several inside sources reported that a National Security Agency inspection group consisting of 40 agents was dispatched to Shinuiju on October 1st to keep control over the usage of cell-phones.

Mr. Kim, who resides in Shinuiju said that “An inspection group from Pyongyang is censoring the usage of cell-phones among citizens, staying in the office of the Province-Security Agency. They are tracing the frequency broadband of Chinese mobile communication to find users.

“At the beginning of last week, the agents unexpectedly entered several houses around 11p.m. in Bonbu-dong in order to arrest suspected cell-phone users. It looked like a spy roundup project. Although it failed to catch users, the citizens’ fear of the inspection group was quite enormous.”

He relayed that “If they find the numbers of the South Korean country code recorded in the confiscated cell-phones, the owners of the cell-phones will be severely punished.”

In 2003, North Korea planned to construct a mobile communication system on a nationwide scale, but it ceased abruptly for fear of damages to national security in 2004. China-North Korea traders and residents in the border areas have been using the Chinese mobile communication system for their businesses, but the control of the mobile usage has been strengthening since 2006.

Another source informed us that “the device that the Security Agency uses for detection is produced by ‘Rohdesch,’ a German company. No one can use cell-phones because the device can reportedly pick up the signals easily when the agents, allegedly carrying the device in their pockets, approach areas where people are using cell-phones.

The company mentioned by Mr. Lee is Rohde & Schwarz, a German company which produces broadcasting devices, radio communication systems and other precision gauges and devices.

An affiliate of the wireless radio wave detection department under the Ministry of Information and Communication said in a phone conversation with DailyNK that “it is difficult to find radio waves from a cell-phone if you are not adjacent to the cell-phone user. I presume that NSC may ransack only the limited area where the Chinese mobile communication’s signal can reach, that is, within a few kilometers of the border, to search for cell-phone users.”

An affiliate in charge of the Networking Device of SK Telecom explained that “the mobile phone detection device can catch phone signals when the phone is on and in use, just within a 2km radius. But even then, it is difficult to find the exact location of the user.”

The rumor seems not true that the National Security agents are searching for cell-phone users by carrying the detection device in their pockets.

Our source, Mr. Lee, said that “along the border areas, the only group of people who can use mobile phones legally are Chinese merchants. However, the authorities have asked them not to use the cell-phones, or if they must, use them only with the permission of the NSC.”

He added that “If someone is caught, the degree of punishment depends on to where he or she attempted to call. If they called someone in China, a $300 fine would be sufficient; but if the call was made to South Korea, they may be sent to long term reeducation camps following heavy interrogation from the NSC.

He said, “What did the South Korean President come here for? The Chosun (North Korea) regime’s attitude has never changed.”

Joong Ang Daily
10/5/2007
Moon Gwang-lip

A raft of economic deals, including easing restrictions for South Korean companies hoping to invest on the western part of North Korea, new rail lines and more effective cooperation between the two countries filled yesterday’s agreement.

President Roh Moo-hyun and his North Korean counterpart Kim Jong-il agreed to accelerate the expansion of the Kaesong Industrial Complex in the North Korean border city.

Some economists and businesspeople in the South hailed the accord as a possible initial step toward developing the entire western section of North Korea.

Lim Soo-ho, a researcher at Samsung Economic Research Institute, said the agreement will provide a driving force for the two Koreas to produce “substantial” economic exchanges.

“The agreement to upgrade the dialogue channel for economic cooperation shows the North’s willingness to push forward with wider inter-Korean economic exchanges,” Lim said.

In the joint declaration made yesterday on the final day of Roh’s three-day visit to Pyongyang, the two Koreas agreed to upgrade the Inter-Korean Economic Cooperation Promotion Committee, the discussion channel between the two nations, from a vice minister-level group to a minister-level group.

Lim said the North’s willingness to make deals “has already been shown by its agreement to improve the ‘three-tong.’ ”

Three-tong refers to the poor conditions of passage (tonghaeng in Korean), communication (tongsin) and customs clearance procedures (tonggwan), which have been singled out as the biggest hurdles for the North in attracting outside investment into the Kaesong Complex, where more than 20 South Korean firms employ about 15,000 North Korean workers.

In the agreement, the two leaders agreed to “promptly complete various institutional measures” to tackle those areas.”

Currently, entry to the Kaesong Industrial Complex is only granted several days after it is requested. Cell phones and the Internet are not available in the area due to a lack of facilities. It also takes considerable time to clear customs.

In other accords, the two Koreas agreed on development projects in west coast areas of the North, including the establishment of cooperative complexes for shipbuilding in Anbyon and Nampo.

In addition, they agreed to create a “special peace and cooperation zone in the West Sea” encompassing Haeju. Civilian ships from North and South Korea will be allowed to pass through the Northern Limit Line, the de facto sea border between the two countries.

It was also agreed that freight rail services would be opened between Munsan and Bongdong.

“The agreements may be seen as the North preparing to develop its whole west coast region as an extension of the Kaesong Complex,” Lim said. “That is a positive sign for businesses interested in investing in the North.”

Business groups in the South welcomed the agreements, calling them substantial.

“I believe the inter-Korean summit this time will relieve businesses, at home and abroad, of concerns over uncertainty regarding investment in North Korea and encourage them to extend their investment in inter-Korean economic cooperation,” Yoon Man-joon, CEO of Hyundai Asan, which has exclusive rights to South Korean tourism to the North, was quoted as saying by Yonhap.

In a visit to Kaesong Industrial Complex last night, Roh said he won’t take political advantage of the new economic opportunities.

“The Kaesong Industrial Complex is a place where the two Koreas will become one and share in a joint success, not to make the other party more reformed and accessible,” Roh said. “We will work hard to make workers more comfortable working here. I wouldn’t call it reform or openness.”

He said reform and openness is considered good in the South.

The government said it is still too early to hazard a guess about the cost of putting the new plans into action.

“We cannot figure out yet how much money is needed to implement the new agreement,” said an official of the Ministry of Budget and Planning, who refused to be identified. “But we guess a lot of money is not needed for next year, as it is just a preparation period.”

Still, the government has earmarked 1.3 trillion won ($1.4 billion) for next year’s inter-Korean economic cooperation projects.  Of that, 900 billion won has been set for use by the government, with 430 billion won available to businesses involved in implementing the new agreement.

Daily NK
Kim Young Jin
8/24/2007

An inside North Korean source relayed that along the North Korean-China border region, businesses connecting North Korean civilians with relatives in the U.S. and in Japan charging exorbitant usage fees are receiving the spotlight.

Choi Yong Nam (pseudonym, 37), residing in Moosan, North Hamkyung, in a phone conversation with DailyNK on the 23rd, revealed, “International cell phones calls are directly made from North Korea or there are cases where North Koreans are directly brought to China to call their relatives in foreign countries.”

Choi added, “In order to be connected to families or relatives in South Korea, at least 200,000 won in South Korean currency (around US$215) is needed. To communicate with families in the U.S. or in Japan, at least 400,000 to 500,000 won are used up.” He minimizes the essential element of risk, but denounced that the price is baselessly expensive.

Choi explained, “However, China or regular phone calls are not charged such fees. Separated families, cases of requesting huge amounts of remittance from relatives in the U.S., Japan, or in South Korea, or the process of relatives trying to bring the families in North Korea to foreign countries require a high fee.”

Such a costly fee seems to be due to the control of cell phone use in North Korea. In order to prevent information leaks to the outside, the North Korea’s authorities have stepped forward using equipments such as “cell phone detectors.”

Another source said, “Getting caught while using cell phones is rarely pacified on the spot as it used to be before. Inspection and punishment are severe, but one can escape through bribery even though there is a difference in the amount.”

After inspections, the violators are taken to the police station and have to go through basic investigations.

Regarding the content of investigations, he said, “They investigate the place of usage, past call history, whether or not the calls are related to foreign countries (South Korea, Japan, and the U.S.). Then, they investigate whether or not the person has a previous conviction.”

Kang Soon Young (speudonym, 44) who is visiting relatives in Yanji, China, said, “There are at least 100 North Korea-born people who are making a living doing various kinds of projects (work) along the border area in Yanji alone.”

The border area project refers to the remittances for money sent to South Korea or abroad or river-crossings, smuggling, phone connections and various projects that are becoming active in Chinese cities sharing the border with North Korea.

He relayed, “Nowadays, the border patrol has been toughened, so crossing the river without going through people who work in such border area projects is almost impossible.”

On one hand, Mr. Kang relayed, “There was a public execution along the Hoiryeong Riverfront on the 10th. The executed was a man in his 50s with the crime of aiding and abetting river-crossings (defecting) and was charged with smuggling.”

October 20-27, 2007 (Beijing/Pyongyang)
GPI Consulting

GPI Consulting (Netherlands) is one of the few western companies that has done an audit of the DPRK’s IT capabilitites and has published about them.

They are organizing an IT delegation to visit the DPRK this October.  Here is their marketing flyer and itinerary: NK-IT-tour.pdf

From the Marketing Flyer:

North Korea offers interesting business opportunities in several fields, such as software development, production of computer games, animation and cartoons, data entry en digitization. In order to provide detailed information about the IT opportunities in North Korea, a unique IT Study Tour will take place from 20 – 27 October 2007.

The trip to North Korea will focus on offshoring in the field of IT and BPO (Business Process Out-sourcing). We expect participants from IT- and software organizations that are investigating offshoring, or from consultants researching new offshore locations. Companies interested in exploring a new potential export market are also welcome to join the tour.

Europe still lacks sufficient knowledge about the promising North Korean IT sector. The goal of the business mission is to give the participants detailed information about offshoring, and especially about the opportunities in North Korea. We will strive to have participants from large, small and medium sized companies taking part in the IT study tour.

In order to make a business trip of 7 days attractive, the delegation will visit various companies in Pyongyang in the field of IT, animation, cartoons, computer games and BPO. The business mission will have an informal character with a visit to a university and also with attention to cultural and tourist elements. The participants of the tour will meet in China (Beijing); after returning from North Korea, an extension of the stay in China is possible.

The organizer of this mission is KCC (Korea Computer Center), a major IT services provider in North Korea with offices in several cities, including Pyongyang and Beijing. The European contact for this business mission will be Mr. Paul Tjia, founder and director of GPI Consultancy, Rotterdam, The Netherlands.  Established in 1995, GPI Consultancy is a specialized Dutch consultancy firm in the field of offshore sourcing. It is regularly involved in IT study tours to various offshore countries in Asia.

Daily NK
Han Hee Yoen
8/5/2007

With the lack of construction of the infrastructure which supports cell phones and internet usage inside the Kaesung Industrial Complex, business management is increasingly becoming difficult.

At the “Inter-Korean Economic Cooperation and US-Korea FTA” conference held at the National Library on the 2nd by the Civil-Headquarters for Activating the South-North Economic Cooperation in Korea and 21st Century North-East Asia Peace Forum, Lee Im Dong, the secretary general of the Kaesung Industrial Complex Committee of Enterprises exposed difficulty, “The Kaesung Complex is facing a lot of hardship due to insufficiency of infrastructure needed for business and political influences at home and abroad.”

Lee revealed, “There are a lot of problems, such as the transportation and customs process, communications issue, labor power, absence of employment flexibility, and effectiveness. These problems should definitely be resolved, but these are impossible problems for the individual enterprises, so the government has to step forward.”

He said, “Cell phones and internet cannot be used inside the Kaesung Complex, so it takes significant amount of time and effort because the products that the buyers want can only be understood over fax and phone.”

Kim Joong Tae, the team manager of the Inter-Korean Economic Cooperation Team under the Ministry of Unification, revealed, “We are improving domestic laws, strengthening communication with enterprises, realizing transportation of joint economic commodities by pursuing formal rail operations, and expanding systematical apparatus at the level of the state.”

Kim also explained, “As for private investment into North Korea, the government and conservative media have upheld an emphasis of self-responsibility of businesses based strictly on market economic principles. The critical point in the government’s aid policy is the agreement issue with principles of the market economy, constraints in financial resources, or North Korea’s lack of understanding of the market economy.”

On one hand, Professor Kwon Young Kyung from the Education Center for Unification said, “Various efforts from the Kaesung Complex (stated during the FTA) is needed to satisfy the standard of establishment of the Committee on Outward Processing Zones on the Korean Peninsula. Most of all, the roadmap for resolving the North Korean nuclear issue, according to the February 13 Agreement, needs to progress smoothly, so that the denuclearization of the peninsula can actively take place.”

Daily NK
Kim Young Jin
7/24/2007

The North Korean government, with the approaching Provincial People’s Assembly delegate elections on the 29th of this month, stepped-up one level the management of citizens and regulation of cell phones.

Kang Ki Ok (pseudonym), a civilian of Hyesan in Yangkang Provicne, said in a phone conversation with the reporter on the 20th, “Nowadays, I am afraid to turn on my cell phone. The People Safety agents and the National Security agents inspect us with fury in their eyes. People who use cell phones during the election season are punished, so there are people who bury their phones by putting them into jars.”

The North Korean government, when the People’s Assembly election season comes around every four or five years, concentrates on regulating the society by observing the movement of citizens and examining the registration cards.

The members of the elections preparations committee, composed of National Security agents, chairmen of People’s Units, and head officials of each provincial unit, are ordered to strictly investigate illegal acts occurring in their regions and to control them. Illegal acts are punished at the end of the elections.

According to Mr. Kang, the outflow of information has been secured at the border region with the upcoming delegate elections, so concentrated cell phone regulation were carried out. Further, the control of the border has been toughened recently, so the escape fee has skyrocked to the North Korean currency of 1 million won (approx. US$1,075).

Another source relayed, “Safeguarding Kim Il Sung, Kim Jong Il statues and research offices have been toughened by inspection units composed of each organ and enterprise farming laborers. Further, they are making sure that historic places and vestiges of battle are not destroyed.”

This source said, “Youth Leagues have also organized inspection units and are regulating unemployed persons and are strictly making sure that juveniles do not watch South Korean dramas and listen to illegal CDs and South Korean songs.”

On one hand, related to election preparation, each city, district, and county candidates were posted at the election site and citizens over 17 have gone into preparations such as conducting voter registrations through the election committee.

The source also relayed that the People’s Safety Agency have actively stepped up inspections by summoning civilians who have gone out to foreign sites to catch clam and mine gold for survival.

When the movement of the North Korean authorities to strengthen the solidarity of the regime was presented through this election, the citizens, in fear of being punished as trial cases, have produced a cautious atmosphere.”

At the time of the Supreme People’s Assembly elections in 2003, when thefts or acts of violence occurred, perpetrators were stringently punished regardless of whether or not they were members of the Workers’ Party. Further, in the case that teenagers got into fist fights, the parents were disciplined and jointly held responsible.

Mr. Kim, who defected in 2006, said, “At the time of the 1991 provincial elections, in the province where we were living, teenagers got into a fist fight. One of the gangs who started the fight accused the opponent of “stirring a political event destroying elections” and went to the parents and got compensation for damages by threatening them.”

Korea Herald
7/12/2007

North Korea has ordered the closure of karaoke bars in an apparent attempt to stem outside influences on the isolated communist country, AP reported, quoting a South Korean civic group as saying Wednesday.

Separately, the North’s Ministry of People’s Security conducted house-to-house overnight inspections in areas near the border with China earlier this month to search for cell phones and illegal video CDs, the Good Friends aid agency said in a newsletter, according to the report.

It reported that the ministry said in a directive last week that the move against karaoke outlets was a ”mopping-up operation to prevent the ideological and cultural permeation of anti-socialism,” according to the aid group.

Violators were warned they would face punishment, including deportation to other regions within North Korea.

The group did not say how it obtained the information. Its previous reports on the North’s isolated regime have been reliable.

It was not clear how many karaoke bars the country has.

AP said officials at South Korea’s top spy agency, the National Intelligence Service, were not immediately available for comment.

Freedom House
5/1/2007

North Korea comes in last place again: 197

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

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

The Christian Post
Michelle Vu
4/29/2007

In a country described as a spiritual vacuum surrounded by the watchful eyes of a totalitarian regime and oppressed by a quasi religious cult centered on its leader’s family, North Koreans desperate to keep the Gospel alive have found innovative methods to smuggle in the Word of God.

Whether it is through human transport of Bibles or North Koreans risking their lives to testify to their families upon return or balloons filled with Christian tracts, the Word of God is penetrating the country where being openly Christian can result in execution.

From within the country, evangelism is taking place through disguised missionaries and North Korean Christians repatriated by China or returning on their own free will, according to North Korean defectors at the Open Doors USA panel discussion this past week on religious persecution in North Korea.

One North Korean defector, Ms. Eom Myong-Heui, said that she was evangelized through a Chinese-Korean missionary disguised as a businessman while still living in North Korea.

Eom – who is now an assistant pastor of a church in South Korea for North Korean defectors – said that she was desperate for food during the North Korea famine in the 1990s and had resorted to partnering with the disguised missionary businessman to earn money.

The Korean-Chinese missionary would teach her the Bible whenever they met and eventually Eom became a Christian.

Yet she and the other North Korean defector on the panel agreed that the best method to spread the Gospel in the closed society is through training North Korean refugees.

“The best and most effective way is using the North Korean refugees,” stated Eom, who said defectors can call their family and relatives in North Korea and share the Gospel.

Eom explained that she speaks to her two daughters still in North Korea through a cell phone from China that cannot be monitored by the North Korean government.

“We can train those North Koreans as strong believers and connect to relatives in North Korea … and conversations can spread [the] Gospel,” she said.

“Philip Lee,” a North Korean defector now living in South Korea. added that some North Koreans are even willing to return to the North and spread the Gospel. Lee, whose real name is withheld for security reasons, said that one of the main ministries in his church composed of North Korean defectors is to train strong Christian leaders who are willing to return to North Korea and witness.

But he noted that even refugees forcefully returned to North Korea can become powerful witnesses.

Lee recalled a repatriated North Korean Christian named Brother Luke who would daily urge his prison guards and officers, “You should believe in Jesus! You should accept Jesus!” Luke reportedly continued his exclamations even during torture and before a judge in court, according to Lee. Before his martyrdom one year later, one prison guard had accepted Christ.

Meanwhile, other North Korean defectors have found innovative ways to spread the Gospel in the North while still remaining in South Korea.

Lee Minbok, founder of North Korea Christian Association, began sending large balloons filled with thousands of Christian tracts across the North-South border about three years ago. Lee, previously a scientist in North Korea, is mostly joined by a small group of defectors or those who have worked with North Korean refugees. The balloons are said to land in North Korea within 20 minutes to 1 hour from its departure in the South.

“I’m proud that North Korea is angry,” said a grinning Choi Yong-Hun, a volunteer at NKCA and a South Korean who spent nearly four years in prison in China for helping North Korean refugees, to The Christian Post. “They ask, ‘Who sent it?’ We say that God sent it. It is a very effective way to send the Gospel.”

Other ways given to evangelize North Koreans include smuggling in Bibles, as Open Doors has done over the past ten years; Christian radio broadcast; and through organizations working with North Korean refugees along the border in China.

Last week’s panel discussion in Washington was part of North Korea Freedom Week, Apr. 22-29, which seeks to raise awareness of the brutal North Korean regime and to urge stronger actions by the U.S. government and international community to press North Korea on its human rights abuse.

The week mainly ended on Saturday with international protests against China’s violent treatment or North Korean refugees at Chinese embassies around the world.

Choson Ilbo
4/9/2007

“Why are so many crosses out there?” “Why do most children wear glasses?” “Can I see your mobile phone?” These were just a few of the many questions North Korea’s youth football squad had over the weekend. On the pitch, they are not different from young South Korean players. But moving around by bus or train, they were full of curiosity about the things they saw. Twenty-three members of the under-17 football team have been staying in South Korea for 20 days.

Many questions
The lobby of the Suncheon Royal Tourist Hotel at 9 a.m. on Saturday. The North Korean soccer squad look trim in their black uniform, shoes in hand. They had countless questions for the South Korean officials of the Sports Exchange Association accompanying them. “What is the cross for?”, one asks, and when told asks again, “What is a church?” The answer seemed to baffle them. When an official explained that many young South Koreans wear glasses because they use computers a lot, one team member said, “In North Korea, only few children and scholars who read lots of books wear glasses.”

The players were particularly taken by mobile phones. They wondered how people could make calls without lines and play games or take pictures with their phones. Whenever officials from the association used their mobile phones, the North Korean youngsters gathered to see their phones.

When shown magazine photos and asked to pick the most beautiful among actresses, Jeon Ji-hyun, Song Hye-gyo and Beyonce Knowles, they chose Beyonce Knowles, still insisted they didn’t care.

◆ They enjoyed playing chess and cards when taking a rest.

The squad had three meals in their hotel restaurant and only left the hotel for training for three hours in the morning and afternoon. In the hotel, they spent most of the rest of their time playing Chinese card games and chess. They did not watch TV except football games. When the team was moving to Suncheon by bus, one player started reading a memoir by former North Korean leader Kim Il-sung, and others asked to borrow it.

Ri Chan-myong, the head of the North Korean youth squad, and the other eight North Korean officials accompanying them drank together with South Korean officials of the sports exchange association. The North Korean officials drank a lot, finishing off 200 bottles of soju or Korean distilled liquor during their 11 days in Jeju.

◆ “I miss my parents”

Five members got wounds in the middle of training. Those players sometimes said, “I miss my parents.” North Korean soccer players, who did not talk much when they first arrived in Jeju, began talking on the third days. At first, North Korean soccer squad ate only Kimbab(rice rolled in dried laver) and Kimchi, now they eat sushi, sliced raw fish, cake and fruits such as banana, apple and pineapple. North Korean soccer squad will move to Seoul on April twelfth and depart for North Korea on twentieth after having a friendly match on fourteenth. Kim Kyung-sung, chief executive member of the South and North Korean Sports Exchange Association, said, “North Korean soccer team is considering going out before they leave but nothing is confirmed.”