North Korean Economy Watch

The Nautilus Institute has published a new paper by Alexandre Mansurov on the DPRK’s communication and technology sectors.  The press release and a link to the paper are below:

PRESS RELEASE

The DPRK mobile communications industry has crossed the Rubicon, and the North Korean government can no longer roll it back without paying a severe political price. The most the authorities can do now is probably to manage its rapid expansion in such a way that will ensure that the interests of the political regime and state security are taken care of first.

While traditionally, the State Security Department monitored most communications on a daily basis, the implication of this explosion of mobile phone use is that communication in North Korea has transitioned from a panopticon of total control to a voluntary compliance system where the government makes an example of a select group to try and force the rest of the country to stay in line.

Alexandre Y. Mansourov, a Nautilus Institute Senior Associate, comprehensively examines information technology in North Korea. As of 2008 the regime launched a world-class 3G mobile communications service, which gained almost 700,000 users in less than three years of operation, revealing an insatiable demand for more robust and extensive telecommunications services among the North Korean general population.

Download the report here

About the Nautilus Institute: Since its founding in 1992, the Nautilus Institute (www.nautilus.org) has evolved into a thriving public policy think-tank and community resource. The Institute addresses a myriad of critical security and sustainability issues including the United States nuclear policy in Korea and energy, resource and environmental insecurity in Northeast Asia. Over the years, Nautilus has built a reputation for innovative research and analysis of critical global problems and translating ideas into practical solutions, often with high impact.

For more information, contact the Nautilus Institute at nautilus@nautilus.org or at 415 422 5523.

Here is Yonahp coverage of the report.

According to Yonhap:

North Korea has begun to demand that every personal and electronic storage device in the country be registered in an apparent effort to crack down on outside information that may contain sensitive news about Middle East uprisings, a government source said Friday.

The measure took effect early this year and has led to the confiscation of a considerable number of electronic devices, the South Korean source said, declining to be identified.

The communist country is also allowing its notoriously harsh policing organ to have the right to approve the use of a mobile phone by an individual, the source said.

More than 300,000 mobile phones are believed to be in use in North Korea, which strictly controls the flow of information in and out of its territory in an effort to keep its 24 million people brainwashed and make them conform to the regime.

And according to the Straits Times (Singapore):

Pyongyang has ordered institutions and households to report on how many computers and even portable data storage devices such as USBs and MP3 players they own, early in 2011, according to a Seoul government source.

The North Korean police agency is in charge of keeping track of the IT gadgets possessed by everyone, presses criminal charges against those who failed to report and even confiscates many of the gadgets, the source said.

…

The reclusive communist state has been running a unit of authorities for years to crack down on North Koreans watching South Korean soap operas or foreign movies, which they call ‘non-socialist video’.

Pyongyang is also reinforcing a crackdown on use of cellphones and the Internet. It is estimated that more than 400,000 mobile phones are being used in North Korea. North Koreans are required to get government permission to use cell phones. They are also banned from bringing them into the country or using cell phones bought overseas.

Foreign members of international non-governmental organisations working in North Korea were also told to follow domestic regulations on cell phones.

It appears that the DPRK is attempting to treat these products the same way it has treated radios for decades.  Lankov writes in his book, North of the DMZ:

Certainly, a person with some technical knowledge can easily make the necessary adjustments and transform such a receiver into a real radio. To prevent this from happening, the police undertake periodic random inspections of all registered receivers. Controlling the correct use of radio receivers is also an important duty of the heads of the so-called people’s groups or inminban. The head of an inminban can break into any house at any time (even in the dead of night) to check for the possible use of a non-registered receiver.

If a North Korean has access to foreign currency, he or she can buy a foreign-made radio set in one of the numerous hard-currency shops. However, after purchase the radio set was subjected to minor surgery in a police workshop — its tuning had to be fixed, so it could only receive official Pyongyang broadcasts (it appears this practice is declining in recent years).

The control was never perfect…

Of course it is questionable as to whether the inminban play a reliable role in “law enforcement” these days.  Instead, individuals in these positions seem to play an increasing role in shielding their residents from Pyongyang’s dictates rather than assuming a pure-exploitation position.  In the past we have seen how inminban effectiveness can affect local real estate prices.  Also, when the government needed to apologize for the disastrous “recent” currency reform, they did so in person to the inminban representatives.

Given the proliferation of electronic devices, particularly in Pyongyang, in combination with the capacity of local police to carry out this mission, I believe the actual result of this policy will be the registration of “some” electronic devices along with the hiding and bribing required to keep others off the books.  So inspection police just got a raise!

Pictured above (L – R): Jang Song-thaek, Naguib Sawiris, and Kim Jong-il

According to Martyn Williams:

The CEO of Egypt’s Orascom Telecom has been given a rare honor during his current trip to Pyongyang: an audience with Kim Jong-il and dinner hosted by the reclusive leader for the businessman whose firm owns a majority of North Korea’s only 3G cellular network.

Naguib Sawiris arrived in the North Korean capital on Friday and was received on Sunday by Kim Jong-il, the Korea Central News Agency reported on Monday.

Kim Jong-il, “warmly welcomed his DPRK visit taking place at a time when Orascom′s investment is making successful progress in different fields of the DPRK, including telecommunications,” the report said.

Orascom holds a 75 percent stake in Cheo Technology, which operates North Korea’s only 3G cellular network.

The network, the remaining stake in which is held by the government, uses the Koryolink service name. It has seen fast growth in subscribers and currently claims more than 300,000 accounts in just the two years since its launch.

After starting first in Pyongyang, the network has been expanded to cover provincial capitals and smaller cities and a 3G signal is now within reach of 75 percent of the population, the company said in November last year.

The Orascom group has made several other investments in the country. In 2007 it invested in a cement factory and in late 2008, at around the same time it launched the 3G network, it opened a local bank. The company has also been tied to renewed construction work at Pyongyang’s pyramid-shaped Ryugyong Hotel. The iconic building was halted in 1992 and has remained vacant ever since.

According to the AFP:

North Korean leader Kim Jong-Il has met the head of an Egyptian company that provides a mobile phone service in the impoverished communist nation, state media reported Monday.

Naguib Sawiris, chairman and CEO of Orascom Telecom Holding, has been visiting the North since Friday. His company has provided a mobile phone service in the North jointly with a local firm since late 2008.

Kim “warmly welcomed his DPRK (North Korea) visit taking place at a time when Orascom’s investment is making successful progress in different fields of the DPRK, including telecommunications,” the North’s state news agency KCNA said.

Kim had “a cordial talk” with Sawiris and hosted a dinner for him, it added.

Orascom said last year that mobile phone subscriptions in North Korea had more than quadrupled in the space of a year — to 301,199 by the end of September 2010 from 69,261 a year earlier.

However, it said overall “mobile penetration” remains at one percent in the country, which has an estimated per-capita GDP of 1,700 dollars and a population of 24 million.

North Korea strictly controls access to outside information and fixes the tuning controls of radios and televisions to official stations.

It began a mobile phone service in November 2002 but shut it down without explanation 18 months later and began recalling handsets.

But in December 2008 the country introduced a 3G mobile phone network in a joint venture with the Egyptian firm.

The Egyptian group in 2007 sealed a 115 million dollar deal to invest in a North Korean cement plant. It is also reportedly involved in completing construction of the 105-storey Ryugyong Hotel in the capital.

Martyn has more at North Korea Tech.

UPDATE: Martyn Williams writes in PC World (11/5/2010):

A new PDA (personal digital assistant) has hit stores in North Korea, according to a student who writes a blog from the secretive state.

The device, which doesn’t appear to carry any branding, has a color touchscreen display that occupies its entire front, according to photos published on the “Pyongyang Show and Tell” blog. The Russian-language blog is maintained by a Russian student who is studying in the country.

Installed software includes a Korean dictionary and translation dictionaries pairing Korean to and from Russian, English, Chinese and German, the blog report said. There are several basic utility programs and an electronic map of the country although the PDA does not feature GPS (global positioning system).

There is also no wireless networking so data transfer has to take place via a USB connection to a Windows or Linux computer. Data can also be transferred via MicroSD card, which is the same as used in domestic cell phones.

“Comparing it to modern things like, let’s say, the iPad, it’s nothing,” the blog’s author, who didn’t wish his name to be used, told IDG News Service via email. “It’s still good as a dictionary, except I don’t see any other advantages.”

It’s not the first PDA in North Korea.

In 2003 the country’s media said “Hana 21,” a PDA developed by the Samilpo Information Center, had been put on sale. The device included English-Korean and Korean-English dictionaries as its main function and also had several games and a basic word processor. Input was by pen and touchscreen.

According to published images of the Hana 21, the two devices are different.

At the time the Hana 21 was said to cost around 200 euros (US$182 at the exchange rate of the time).

The new PDA that hit stores recently costs around US$140.

“It’s still hard to buy for a Korean, but there are many people who keep their money for years and can afford it,” the student said via email.

PDAs have long been out of fashion in many countries after their features and functions were duplicated by smartphones. North Korea has a 3G cellular network, but most cell phones have only basic features.

ORIGINAL POST: Show and Tell Pyongyang introduced the world to the DPRK’s version of Linux: Red Star.  Now he has introduced us to the DPRK’s new Personal Digital Assistant (PDA).

Here are pictures from the Russian web page:

According to the Russian-language web page (via Google Translate):

A few weeks ago in North Korea has started selling the first PDA. In all the computer shops you can see the advertising of the new items. [I] offer a small review of this device.

On sale are a few options. The difference between them – is the amount of internal memory and a built-in slot for the stylus. The most feature-rich [costs] $ 140 and has 8 gigs of internal memory and a slot for the stylus, so you do not accidentally lose it.

In addition, there is a slot for MicroSD memory cards – the same as in the local mobile phones.

The main function of which is worth noting (and more generally for which there is a fly sabzh), an electronic dictionary Samhyn (삼흥) with the Russian language. It is no secret that South Korea produced electronic translators, but, according to eyewitnesses, the Russian language is absent in them as fact. And in this case, Russian-Korean and Korean-Russian dictionaries most voluminous in the number of vocabulary words. Besides, there are English, Chinese and German. Also has a large Korean Wiki Grand Korean Dictionary.

So for me personally, the main value of the PDA – is an electronic dictionary, which can carry with them always and everywhere. And the rest is not so important.

So what else is there? There is a map of Korea’s system of teaching foreign languages (English, Chinese). By the way, about a month ago there was an opportunity to put maps on your mobile phone. Application free of charge and requires activation. Put it on a large computer center of the city. []

Device has access to TV, headphones and a USB-slot. Possible to connect devices to both Windows, and Linux (in this case, Red Star)

On the whole – everything is simple and works quite well. At the moment, the firmware needs some work, not all features fully implemented, but the Korean comrades promise to update and refine.

If anyone else has more information, please let me know.

Martyn Williams writes in IT World:

The girl in the video looks like she’s about 12 years old. Thin, dirty and with a vacant look on her face, she tells the cameraman that she’s actually 23 and she survives by foraging for grass to sell to wealthier families for their rabbits.

The sobering footage was shot in June this year in the province of South Pyongan, North Korea, and provides a glimpse into the life of one person who lives far from the military parades and fireworks last month marking the 65th anniversary of the Workers’ Party of Korea.

It was shot on a cheap camera by a man who goes by the pseudonym Kim Dong-cheol, a North Korean with a double life. In addition to his job as a driver for a company, Kim also works as a clandestine reporter for AsiaPress, a Japanese news agency that’s taken advantage of the digital electronics revolution to get reports from inside North Korea.

AsiaPress works with six North Koreans they’ve trained as journalists. They’re given instruction in operating cameras, using PCs and how to use cell phones so they don’t attract the attention of authorities. Then, every few months, they meet with AsiaPress representatives just over the border in China to hand over their images.

“When we started training journalists in 2003 or 2004, getting cameras into North Korea was a real problem,” said Jiro Ishimaru, chief editor of the news agency, at a Tokyo news conference on Monday. “Nowadays, within North Korea you are able to have your pick of Sony, Panasonic or Samsung cameras.”

The material they produce is often startling and documents a side of the country the government doesn’t want the world to see.

In another clip also captured by Kim, a North Korean woman argues with a police man. Asked for a bribe, she screams at him and pushes him. “This cop is an idiot,” she shouts.

For most journalists, getting into North Korea is a tough task. Getting outside of the capital Pyongyang to see the lives of average people in the countryside is very difficult. Seeing the sort of poverty or disagreement with authority that Kim caught on camera is impossible.

Most of the shots are recorded surreptitiously and the small digital cameras make smuggling images easier than from older tape-based models.

“You used to have to tape video cassettes to your stomach,” he said. “But it’s very easy to hide an SD Card somewhere on your body.”

AsiaPress isn’t the only media working with reporters or informants in North Korea. Outlets including Open Radio for North Korea and Daily NK also receive reports from correspondents inside the country that add additional information, understanding and sometimes rumor to what’s happening inside the country.

The reports are typically sent via cell phones connected to a Chinese mobile network. Signals from Chinese cellular towers reach a few kilometers into North Korea and are difficult to monitor by the state’s telecom surveillance operation.

Recently, North Korean authorities have woken up to the flow of information across the border and are trying to stop it.

“The greatest headache I face is telecommunications,” Ishimaru said.

Mobile detection units patrol the border looking for signals from within North Korea and, if found, attempt to triangulate their source.

“The number of these units has been increasing, so if you spend a long time on the phone the police will come and search your house,” said Ishimaru. “People have become frightened of using the phone.”

If caught the punishment can be severe. Earlier this year a man faced a public firing squad after he was caught with a cell phone and admitted to supplying information to someone in South Korea, according to a report by Open Radio for North Korea.

The risk such reporters face leaves their agencies open to criticism that they are putting people in unnecessary danger, but Ishimaru said his reporters all want to provide a true picture of life inside North Korea to the rest of the world. He pays them between $200 and $300 per month.

The digital media revolution isn’t one way. It’s estimated that half of all young people in major cities have watched pirated South Korean TV dramas.

“Media around the world has gone digital and that’s also happened with North Korean propaganda,” said Ishimaru. “But even the wealthy and those in authority don’t want to watch propaganda films and movies about Kim Il-Sung and Kim Jong-Il. They want to watch something that’s more entertaining.”

The shows are recorded from South Korean satellite TV broadcasts in China and burned onto DVDs or Video CDs that soon make it over the border and into North Korean markets.

There are occasional crackdowns, but even the police want to watch the dramas.

“Although there are crackdowns and things are confiscated,” he said, “I don’t think there is anyway the leaders can put a stop to this.”

Read previous posts about Rimjinggang here

Read the full story here:
How digital technology gets the news out of North Korea
IT World
Martyn Williams
11/2/2010

Accordign to Yonhap:

South Korea’s Red Cross is pushing to set up its own communications channel with its North Korean counterpart so that it can carry out humanitarian missions independent of cross-border political tensions, the organization’s chief said Thursday.

“We’re talking with the government on the need to work with the North Korean Red Cross through an independent means of communication,” Yoo Chong-ha, president of the Korean National Red Cross, said in an interview with Yonhap News Agency.

“Government-level dialogue is between governments. The role of the Red Cross has to be separate,” Yoo said.

The Red Cross, although tasked with non-political projects such as relief aid and family reunions, has at times served as an alternative track for contact and talks between the two Koreas, who are technically still at war after the 1950-53 Korean War ended in a truce.

“The Red Cross is not a subsidiary agency to the Unification Ministry. It is not appropriate for all concerned that the Red Cross should work on behalf of the government,” Yoo said in the interview. The chief will be heading to the North to oversee a round of family reunions that begin on Friday.

Currently, there is no channel linking the Red Cross chapters of the two Koreas. Their sole hotline at the truce village of Panmunjom was severed as part of Seoul’s package of punitive measures announced in May after holding the North responsible for the deadly sinking of a warship that killed 46 sailors.

Yoo said he would tell his North Korean counterpart, Jang Jae-on, of the importance of resuming humanitarian exchanges, regardless of political tensions, when he visits North Korea.

In Red Cross talks this week that reopened for the first time in a year, the North asked Seoul to provide tens of thousands of tons in rice and fertilizer aid in exchange for expanding family reunions.

“This is not an issue for the Red Cross” to deal with, said Yoo, with skepticism on whether such aid draws results.

Read the full story here:
S. Korean Red Cross seeks independent communications channel with Northern counterpart
Yonhap
10/28/2010

Vladimir Lenin is often quoted as saying “The Capitalists will sell us the rope with which we will hang them”.  This popped into my head this morning when I read this story in the Choson Ilbo:

Unification Minister Hyun In-taek on Tuesday admitted that the fiber optic cables South Korea provided have made it more difficult to spy on North Korea. Hyun was answering a question from a lawmaker at a session of the National Assembly’s Foreign Affairs, Trade and Unification Committee. “I understand that there is a problem or a loophole” in South Korea’s intelligence-gathering ability, he said.

Grand National Party lawmaker Chung Jin-suk expressed worries that South Korea’s ability to gather intelligence was weakened by fiber optic cables which the South Korean government supplied to the North in the past. “I suspect that some of the 45 km-long fiber optic cables may have been diverted to lay a communications network between frontline Army units in the North,” he said.

Hyun said Seoul has “no plan as of now to comply with an additional request from the North for more fiber optic cables.”

The South Korean government sent 20 km, 15 km and 2 km-long copper cables to the North in 2002, 2005 and 2007, which were meant to be used for inter-Korean military communications. Last year, the South supplied the North with 45 km-long fiber optic cables, two sets of optical termination equipment, and two sets of optical measuring instruments.

Under an agreement, a 25 km portion was supposed to be laid on the east coast, and another 20 km portion on the west coast. It is difficult to wiretap a network of fiber optic cables, Chung said.

“We haven’t checked yet whether the cables were used simply for the inter-Korean military communications network or for the expansion of a new communications network for frontline units,” Chung said.

He said if copper cables were replaced with fiber optic cables, then that would make intelligence gathering much more difficult in cases like the sinking of the Navy corvette Cheonan, where there is a suspicion of North Korean involvement.

Read the full story here:
Seoul ‘Hampered Its Own Ability to Spy on N.Korea’
Choson Ilbo
4/14/2010

According to Business Week:

As many as 1,000 North Koreans use handsets that connect to Chinese networks to tell people in the South about subjects ranging from food shortages to leader Kim Jong Il’s health, said Ha Tae Keung, a South Korean who runs a Seoul-based radio station that broadcasts daily to the North.

Ha’s Open Radio for North Korea is one of several groups gathering information from people on phones that only work near the 1,400-kilometer (870-mile) border with China. The risks are absolute: One caller was executed, Ha’s employees heard, leading Open Radio to curb contact with informants.

“To us, it’s about breaking news,” said Ha, who receives U.S. congressional funding through the National Endowment for Democracy. “To them, it’s a matter of life and death.”

North Korea accuses the U.S. and South Korea of financing such organizations to conduct “a black propaganda campaign,” the Korean Central News Agency said last month. Kim’s government glorifies his achievements as “the great sun of the nation,” who repels “U.S. warmongers and South Korean puppet forces.”

…

Defection and disclosing “national secrets” are deemed treason under North Korea’s criminal code and are punishable by death, according to a copy posted on the Web site of South Korea’s Unification Ministry. Listening to “anti-state radio” is punishable by up to five years in a labor camp.

Radios are pre-tuned to government programs and owning computers without permission is forbidden, according to the Feb. 17 UN report. Security squads raid homes looking for contraband, it said.

While mobile phones are allowed in and around the capital of Pyongyang, their use is forbidden near the border, the UN said. Legal cell phones in North Korea, many operated by Cairo- based Orascom Telecom Holding SAE, can’t be used for international calls, a U.S. State Department human-rights report released in March said.

SIM Cards
More than 10 North Korean informants for Open Radio use phones with pre-paid SIM cards bought in China that work as far as 10 kilometers across the border, Ha said. Pre-paid cards accounted for 82 percent of all users at Beijing-based China Mobile Ltd., that country’s biggest operator, in 2007.

Illegal phones started appearing as early as 2000, when defectors living in China and South Korea had them smuggled across the border to relatives, said Sohn Kwang Joo, chief editor at Seoul-based Daily NK.

Read the full story here:
North Korea Open Radio Prompts Wonder About Riches Over Border
Business Week
Bomi Lim
3/31/2010

According to the Financial Times:

Orascom Telecom, the Egypt-based mobile network operator, says its subsidiary in North Korea, Koryolink, has acquired 100,000 subscribers in its first year and expects to add millions more in the next five years.

The expansion plans come as the isolated country of 24m, which says it wants to be considered a “mighty and prosperous nation” by 2012, steps up efforts to attract foreign investment.

Pyongyang’s economic ambitions come in the face of tough international sanctions on its nuclear arms programme.

“We see that there is a very big plan for an economic boom,” said Khaled Bichara, chief executive of Orascom. “They are really looking to have, by 2012, a much stronger economy. We believe that mobiles and eventually international communication will definitely be part of this.”

Koryolink, a pre-pay system, has been available in Pyongyang and Nampo, the capital’s port, since December 2008. To help expand the network from there, Mr Bichara said North Korea was laying fibre-optic cables in the provinces.

Orascom was installing its most technologically advanced 3G network in North Korea, he said. The 2010 target for user numbers was ambitious but Mr Bichara declined to put a figure on it.

“I think if we achieve the target of this year, that will be a big milestone,” he said. “The number will be big enough to make Koryolink look like a significant company for us because the revenues per customer are interesting and we believe that this business will have customers in the millions within the next four or five years.”

Mr Bichara said the subscription figures showed that mobile phones were not limited to elite members of the military and communist party, as many observers had speculated.

However, the handset price of €140 ($195) put a mobile phone out of most people’s grasp.

So far, Koryolink offers only a basic voice and text messaging service. International calls and roaming services are not provided but Mr Bichara said starting them would be simple given the sophistication of the network being installed.

Koryolink is a joint venture in which Orascom has a 75 per cent stake. The rest is owned by Korea Post & Telecommunications Corp, the state fixed-line provider.

Thanks to a reader for sending this to me. 

Read the full article here:
N Korea operator looks to millions of 3G users
Financial Times
Christian Oliver and Heba Saleh
2/3/2010

According to the Associated Press:

Military officials from the two Koreas communicated through new fiber-optic cables to help facilitate the travel of 330 South Koreans heading to an industrial complex in the North on Wednesday, Unification Ministry spokeswoman Lee Jong-joo said.

South Korea has sent fiber-optic cables and other equipment to the North to help its communist neighbour modernize its military hot lines with the South, she said.

The new hot lines replaced outdated copper cable hot lines that will remain as spare lines, said Lee, the spokeswoman.

The new hot lines will serve as a key mode of communication for border crossings for people travelling to and from the joint industrial complex at the North Korean border town of Kaesong, she added.

I assume the upgrade to fiber optic means that the bureaucracy of border crossing has been computerized.  Rather than reading information across the phone line border officials can now send it electronically (including photos) to speed up processing on the North Korean side of the border.

Read the full story here:
Divided Koreas open new, updated military hot lines to facilitate border crossings
Associated Press (via Winnipeg Free Press)
12/29/2009