North Korean Economy Watch

According to the Daily NK:

According to the Northeast Asian Broadcasting Institute (NABI), the authorities made their first move in March this year, replacing the shortwave transmission equipment at Kanggye Transmission Station in Jagang Province with modern equipment made by Beijing BBEF Electronics Group Co. Kanggye Transmission Station is one of three high output shortwave transmission facilities in North Korea, with the other two being at Pyongyang and in Gujang County, North Pyongan Province.

The measures come pursuant to a June 2011 agreement signed between the North Korean Ministry of Communications and BBEF, under which the latter is required to provide North Korea with modern radio and television transmission equipment and training in its use.

North Korea has two shortwave broadcasters; Chosun Central 1st Broadcast and Pyongyang Broadcast. The first is for the domestic and international audience while the latter serves the international audience only, leading to the assumption that North Korea is replacing its existing transmitters in order to improve its broadcasts targeting South Korea. With the sort of modern equipment arriving from BBEF, North Korean broadcasts will be receivable anywhere in South Korea, no matter where in the North they are broadcast from.

According to NABI, North Korea’s shortwave broadcasting capacity was previously very weak due to worn out and broken equipment. Signal strength was particularly weak, meaning that listeners tended to receive a different channel even when tuned directly to the intended broadcast frequency. According to one defector from Pyongyang who arrived in South Korea in June 2011, the signal strength of Chosun Central 1st Broadcast was so weak at times that it was even unlistenable in most regions of North Korea.

However, the quality has recently improved dramatically, as Park Sung Moon of NABI explained to Daily NK, saying, “Recent analysis of North Korea’s shortwave Chosun Central 1st Broadcast and Pyongyang Broadcast reveal that they are being broadcast clearly and consistently, without interference or signal shifting.”

“In particular, Pyongyang Broadcast is much better than it used to be, but the overall broadcast situation has gotten a lot better,” Park added, going on, “It looks like they have imported the Chinese transmission equipment to improve their South Korea broadcasting.”

Professor Choi Hyung Jin of Sungkyungwan University Information and Communications Department agreed, adding, “If a transmitter is old and worn out then it either takes excessive power to function or the signal strength weakens. Either way, the effect of the broadcast system itself is detrimentally affected. Notably, listeners often cannot hear the broadcast. If you want people to listen, you have to improve your transmitters.”

The other side of the coin is that improved shortwave transmission strength stops incoming signals from reaching listeners.

According to one defector who used to be a part of the Party Propaganda and Agitation Department, “They know that when the Chosun Central 1st Broadcast signal strength is weak, it regularly arrives with outside broadcasts mixed in. I think they want to stop this happening.”

Though I have located many communications towers on satellite imagery of the DPRK, I have yet to definitively identify any of the DPRK’s short wave radio broadcast towers (Pyongyang, Kujang, Kanggye). If you have any information on them, please let me know.

I have located this massive broadcast center in Myohyangsan, but its purpose is unknown to me.

Read the full story here:
North Korean Shortwave Getting Stronger
Daily NK
Mok Yong Jae
2012-10-31

Paul Tjia of GPI Consulting has written an article in the August issue of the American magazine Communications of the ACM on outsourcing in the DPRK. Here is a link to the article (PDF):

Inside the hermit Kingdom: It and Outsourcing in north Korea

Here is a blurb from Mr. Tjia:

Somewhat unexpectedly, the Democratic People’s Republic of Korea has a sizeable IT sector. Some 10,000 professionals work in the field, and many more have IT degrees. They are already engaged in outsourcing contracts for other countries, and keen to expand further.

UPDATE 13 (2012-8-23): The Institute for Far Eastern Studies reports on Jang’s visit to China:

Jang Song Thaek’s Visit to China: Outcomes and Limitations
Jang Song Thaek, vice chairman of National Defence Commission of North Korea recently visited China and is raising many speculations about the outcome of the visit.

From August 13, Jang led 50 North Korean delegations to China, including high ranking officials such as Ri Kwang Gun, the chairman of the joint venture investment committee, Ri Su Yong, the former chairman of the same committee, and Kim Hyung-jun, deputy foreign minister. Together with the Chinese officials, Jang visited Rajin-Sonbong (Rason) special economic zone, and Hwanggumpyong and Wiwha Islands, and discussed the issues of expanding economic cooperation with China.

Jang attended a meeting with China’s Minister of Commerce Chen Deming, titled the Third Meeting of the DPRK-China Joint Steering Committee for the Development of Hwanggumpyong and Rason Districts. In addition to the meeting, Jang visited Jilin and Liaoning Provinces, asking for China’s active assistance and investment in these areas.

Jang also met with Wang Jiarui, head of the International Department of the Communist Party of China (CPC) Central Committee, President Hu Jintao and Premier Wen Jiaobao in Beijing to discuss the future economic cooperation between the two nations and to request for China’s further economic assistance.

North Korea was successful in obtaining positive response from China, promising to help the economic development of North Korea. China has agreed to provide electricity and other necessary infrastructures, including roads and communication network, to push forward with the joint development of Hwanggumpyong and Rason.

However, it is still unclear whether Jang’s visit to China will lead to actual revitalization of bilateral economic cooperation. Chinese companies are still cautious about investing in North Korea with its inadequate infrastructures and legal framework and volatile political situations posing as risks to their investments. Other than labor force export, natural resources development and agricultural and fishery product trades, there is yet to be other model for successful economic cooperation.

Chinese companies consistently argued investment in North Korea can be viable only under the condition that government guarantees or other safety mechanisms are provided to protect the investments of the Chinese companies.

However, in the recent agreement signed by Jang Song Thaek and Chen Deming, two sides have agreed to abide by the principle of development cooperation, to be “led by the governments, based on enterprises, and to achieve mutual benefit and win-win through market operation.” Thus, Chinese government has expressed its intentions to not provide government guarantees for the investments and North Korea has not put forth appropriate policy to soothe the apprehensions of the investors.

Moreover, there are more hurdles to be overcome in Rason and Hwanggumpyong development. Although China gains access to the East Sea through Rason, serving as an important logistics and manufacturing hub in the Northeast Asia reaching South Korea, Russia, and Japan, still no major investment is seen in the area due to the poor industrial infrastructures and basic industries.

Hwanggumpyong and Wihwa Islands are also faced with challenges of its own. Geographically it sits in close proximity to Dandong, in the Chinese territory and while North Korea is pursuing for joint development in the area, China is still passive in the development of this area. This area also frequently fall victim to severe flooding, costly in repairs and maintenance.

China is likely to continue to support North Korea’s economic revitalization efforts and the security of its regime. For North Korea, direct aid is limited and economic cooperation is the most effective option for economic recovery but until it fully accepts the international norm and open up to the outside world, it will be difficult to achieve full economic revitalization.

UPDATE 12 (2012-8-22): Marcus Noland comments on the visit and the agreement here.

UPDATE 11 (2012-8-20): The Choson Ilbo reports that Jang received no official support from Beijing as a result of the visit:

Jang left without receiving any pledges of material support from Beijing, a high-ranking government official here said on Sunday.

Asked about a reported request for US$1 billion in loans from China, the official said, “I have yet to hear of any economic support from China to North Korea, whether it involves $1 billion or $1 dollar. China stressed market principles to Jang.”

UPDATE 10 (2012-8-18): The Hankyoreh reports on a number of investment deals that were inked between the DPRK and Chinese enterprises:

The success of the zones’ development is crucial for North Korea in its current push for economic reforms and improvements to living conditions. This accords with Beijing’s strategy of leading Pyongyang into a gradual normalization through reforms and openness, with an eye to eventually resolving its nuclear program issue.

Another positive signal for Pyongyang is the string of Rason investment declarations by large Chinese corporations following Jang’s visit.

The Yatai Group, a major construction and real estate conglomerate, signed a contract with the Rason people’s committee to develop a construction materials complex in the city. On Friday, the large state-owned Ludi Group announced it would also be investing in Rason. Its director, Zhang Yuliang, announced in an interview with the People’s Daily website people.com.cn that his company would be taking on the construction of basic facilities at Rason, including a power grid.

UPDATE 9 (2012-8-18): Xinhua reports on Wen’s meeting with Jang:

Jang is in China for the third meeting of the joint steering committee for developing and managing the Rason Economic and Trade Zone and the Hwanggumphyong and Wihwa Islands Economic Zone.

Wen said both sides should give priority in developing and managing the zones as well as implement the consensus reached by the joint steering committee.

The premier said the two governments should strengthen the leadership and planning of the cooperation on the zones, improving laws and regulations; encourage relevant regions for active participation with close coordination; and let the market play its role creating favorable conditions for land and tax.

He called on the committee to encourage businesses to invest in the zones and help enterprises solve their problems, and improve customs and quality inspection services to help with bilateral cooperation.

UPDATE 8 (2012-8-18): Reuters reports on Jang’s visit with Wen Jiabao.

Premier Wen Jiabao encouraged North Korea to allow “market mechanisms” help revamp its economy, state media said on Saturday, and laid down other pre-conditions as China tries to wean its impoverished ally off its dependence on Chinese aid.

…

As well as allowing freer rein to market forces, the Chinese premier also recommended Pyongyang encourage economic growth by improving laws and regulations, encouraging business investment and reforming its customs services.

China’s President Hu Jintao also met Jang in a clear show of support for the North and its new leadership. Jang is seen as the driving force behind reforms that the isolated and destitute North is believed to be trying and for which it desperately needs Chinese backing.

…

So far North Korea has received around $300 million in non-financial direct investment from about 100 Chinese companies, mainly in the food, medicine, electronics, mining, light industry, chemicals and textile sectors.

China’s exports to North Korea rose 20.6 percent last year to $2.28 billion from 2010, while imports plunged 81.4 percent to $147.4 million, according to Chinese customs figures.

Those numbers are dwarfed by trade with South Korea, China’s third-largest trading partner.

UPDATE 7 (2012-8-17):

Hu Jintao Receives DPRK Delegation
Beijing, August 17 (KCNA correspondent) — President Hu Jintao, general secretary of the C.C., the Communist Party of China, met the delegation of the DPRK-China Joint Guidance Committee led by Department Director of the C.C., the Workers’ Party of Korea Jang Song Thaek who paid a courtesy call on him at the Great Hall of the People in Beijing on Friday. The delegation took part in the third meeting of the DPRK-China Joint Guidance Committee for the joint development and management of the Rason Economic Trade Zone and Hwanggumphyong and Wihwado Economic Zones.

Jang Song Thaek conveyed greetings of the dear respected Kim Jong Un to Hu Jintao.

Expressing deep thanks for this, Hu Jintao requested Jang Song Thaek to convey his warm greetings and sincere congratulations to Kim Jong Un.

Hu Jintao, on behalf of the party, government and people of China, expressed sincere sympathy and consolation over the recent flood that hit the DPRK, causing huge damage.

He hoped that the Korean people would eradicate the aftermath of the disaster and bring the living of the people in the afflicted areas to normal as soon as possible under the leadership of First Secretary Kim Jong Un.

Noting that China and the DPRK are friendly neighbors linked by the same mountain and rivers, he said that the policy of the Chinese party and government to attach importance to and develop the China-DPRK friendship from the strategic viewpoint and on long-term basis would remain unchanged in the future, too.

He expressed his willingness to strengthen the high-ranking visits, cooperation in various fields and the exchange of views on international and regional problems and upgrade the bilateral relations to a new level as agreed by both sides.

He was rejoiced over the fact that the development of the two economic zones has entered a practical phase thanks to the common efforts, wishing that a good example of economic cooperation would be set.

The Chinese party and government support the Korean comrades following the road of development suited to their actual conditions and wish them greater success in their efforts to build a thriving nation under the leadership of First Secretary Kim Jong Un, he said.

The talk proceeded in a comradely and friendly atmosphere.

Present there were members of the DPRK-China Joint Guidance Committee, Ji Jae Ryong, DPRK ambassador to China, Chen Deming, minister of Commerce of China, Wang Jiarui, head of the International Liaison Department of the C.C., the CPC, Zhang Ping, head of the National Development and Reform Committee, Shi Xuren, minister of Finance, Wang Min, secretary of the Liaoning Provincial Committee of the CPC, Sun Zhengcai, secretary of the Jilin Provincial Committee of the CPC, Zhang Zhijun, executive vice-minister of Foreign Affairs, Chen Jian, vice-minister of Commerce, and Liu Hongcai, Chinese ambassador to the DPRK.

UPDATE 6 (2012-8-16): Xinhua reports on the visit:

The Rason Economic and Trade Zone will focus on the development of raw materials, equipment, high-tech products, light industry, the service sector and modern agriculture, the MOC said after the meeting.

It will gradually become an advanced manufacturing base, as well as an international logistics center and regional tourism center for northeast Asia.

The Hwanggumphyong and Wihwa Islands Economic Zone will focus on the development of the information industry, tourism, modern agriculture and garment manufacturing, the ministry said.

The DPRK passed and promulgated the Law for the Rason Economic and Trade Zone and Law for the Hwanggumphyong and Wihwa Islands Economic Zone in December 2011, Shen said.

“Construction on the two economic zones has entered the stage of introducing enterprises to invest in the zones,” he said.

The two sides will continue to make joint efforts to make laws and regulations, make detailed preferential policies, improve construction planning inside the zones and attract companies to invest in the zones.

“Both sides will make full use of their respective advantages and build the zones into models of China-DPRK economic and trade cooperation and platforms for economic and trade cooperation with the rest of the world,” Shen said.

The MOC said Tuesday that China and the DPRK will continue to follow the principle of “government-guided, enterprise-based, market-oriented and mutually beneficial” cooperation in developing the two economic zones.

The meeting was jointly presided over by Minister of Commerce Chen Deming and Jang Song Taek, chief of the central administrative department of the Korean Workers’ Party.

UPDATE 5 (2012-8-16):

Chinese Officials Vow to Make All Efforts to Implement DPRK-China Agreed Points
Pyongyang, August 16 (KCNA) — The delegation of the DPRK-China Joint Guidance Committee sojourned in Jilin and Liaoning Provinces, China on Tuesday and Wednesday.

Department Director of the Central Committee of the Workers’ Party of Korea Jang Song Thaek, head of the delegation of the DPRK-China Joint Guidance Committee, met and had friendly talks with Sun Zhengcai, secretary of the Jilin Provincial Committee of the Communist Party of China, in Changchun City and Wang Min, secretary of the Liaoning Provincial Committee of the CPC, in Shenyang.

Sun Zhengcai extended congratulations to the successful third meeting of the above-said committee.

He said that Jilin Province is a significant place featured by historic relics on President Kim Il Sung and leader Kim Jong Il, recollecting with deep emotion the days when he was received by Kim Jong Il who visited the province in 2010.

The Jilin Provincial Committee of the Communist Party of China and the Jilin Provincial People’s Government will make efforts to implement the points agreed at the third meeting of the China-DPRK Joint Guidance Committee, he concluded.

Wang Min said he was pleased with the achievements made by the Korean people in building a thriving socialist nation under the leadership of the dear respected Kim Jong Un.

He underscored the need to contribute to boosting the traditional Sino-DPRK friendly relations provided by the leaders of the elder generations of the two countries by stepping up the joint development of the Hwanggumphyong and Wihwado Economic Zones.

UPDATE 4 (2012-8-15): The Associated Press reports on the meetings:

The ministry said the two sides signed a number of cooperation agreements related to their development of the two special economic zones: Rason on the Korean Peninsula’s northern tip and Hwanggumphyong, an island in the Yalu River that marks their border to the southwest.

It said plans for Rason would see it becoming a manufacturing base, logistics center and tourism hub, though the new agreements were still primarily focused on basic infrastructure, such as a plan to transmit electricity directly to the zone overland from China.

The Hwanggumphyong zone will focus on information technology, tourism, agriculture and garment manufacturing, it said.

Rason has recently begun to develop thanks to Chinese infrastructure projects, but Hwanggumphyong has languished since ground was broken last year.

The China Daily said in an editorial Wednesday that Chinese investment in the zones would help North Korea’s battered economy and improve stability on the Korean peninsula.

“The DPRK is in urgent need of capital to help revitalize its waning economy,” the paper said. “It can be expected that as a result of the agreements, Chinese investment in the special economic zones of the DPRK will increase rapidly.”

It noted that bilateral trade last year was $5.7 billion, up from $3.5 billion in 2010.

UPDATE 3 (2012-8-14): Ri Chol was among the group of DPRK leaders traveling to Beijing.

UPDATE 2 (2012-8-14): The Daily NK reports on Jang’s trip to China:

The level of popular interest in Jang’s visit is a reflection of two things: first, his relative importance in the North Korean power structure, and second, the fact that he is the highest North Korean official to visit Beijing since the official launch of the Kim Jong Eun regime late last year. Both these facts serve to make it highly likely that the remit of the trip extends quite a long way past the economic agenda cited by KCNA, presumably to encompass political and military concerns as well.

According to one diplomatic source in Seoul, “Kim Jong Eun quite possibly assumes that China harbors some anxiety about his newly launched system. Jang will probably explain the recent purging of former Chief-of-Staff Lee Young Ho, since this only made China more concerned.”

Sohn Gwang Joo, a senior researcher with the Gyeonggi Research Institute, went further, declaring, “The main reason behind Jang’s trip to China is to emphasize that ‘Chosun-China friendship transcends generations’, and that without the political, economic and military support that comes from that friendship, the Kim Jong Eun system cannot be maintained.”

“When Jang Sung Taek meets with high-level cadres including Xi Jinping, the two will discuss the issue of a bilateral summit,” Sohn added, noting the likelihood that such a summit is likely to occur after China’s own leadership transition in October.

Lee Tae Hwan, a researcher with the Sejong Institute, noted also that there is certainly more to the visit than KCNA made public, explaining, “There are a bunch of people who can solve economic problems like those at Rasun, Hwanggeumpyong and Wihwa Island, it doesn’t have to be someone as influential as Jang Sung Taek.”

“Therefore, Jang’s trip to China is not a working-level visit. He is raising the level of bilateral communication.”

UPDATE 1 (2012-8-14):

Third Meeting of DPRK-China Joint Guidance Committee Held
Beijing, August 14 (KCNA) — The third meeting of the DPRK-China Joint Guidance Committee for the joint development and management of the Rason Economic Trade Zone and Hwanggumphyong and Wihwado Economic Zones was held in Beijing on Tuesday.

Present there were members of the delegation of the DPRK-China Joint Guidance Committee led by its DPRK side Chairman Jang Song Thaek who is department director of the Central Committee of the Workers’ Party of Korea and Ji Jae Ryong, DPRK Ambassador to China.

Also present there were members of the delegation of the China-DPRK Joint Guidance Committee led by its Chinese side Chairman Chen Deming, minister of Commerce of China and Liu Hongcai, Chinese Ambassador to the DPRK.

The meeting reviewed the work done for developing them since the second meeting of the joint guidance committee.

In the Rason Economic Trade Zone, a master plan for developing the zone was mapped out, reconstruction of ports and railways made brisk headway, the project for reconstructing Rajin-Wonjong highway is nearing its completion and a work has made brisk headway in various fields including tourism and agricultural cooperation and measurement for the transmission of electricity from China was finished.

In the Hwanggumphyong Economic Zone, favorable preconditions were created for substantially starting the development project including the fixing of the spot for border passage according to the drafted detailed plan.

The meeting stressed the need to quickly start the Wihwado Zone development and show the world the will of both sides for the development of both zones.

At the meeting, both sides appreciated as the successes made since the second meeting the amendment, enactment and announcement of the law on the two economic zones, the agreement of development plans, the establishment of management committee, the work of various panels of the joint guidance committee, the training of management officials of the two economic zones, the promotion of already started projects, the border passage and positive progress in tele-communication cooperation through the joint efforts of the two governments.

Both sides reaffirmed that it plays an important role in consolidating and developing the traditional relations of DPRK-China friendship to invariably implement the historic agreement on the joint development and management of the two economic zones reached between the top leaders of the two countries in line with mutual interests.

Both sides said in unison that to develop the two economic zones of weighty significance in boosting exchange and cooperation in all fields between the two countries, developing economy and achieving regional stability and prosperity is in line with the common interests of the two peoples.

They agreed upon a series of matters of jointly pushing forward the top priority processes in creating environment favorable for investment in the two economic zones to meet international standard and mutual interests.

They agreed to make sure that the two governments support and encourage local governments and enterprises push forward this work now that all the matters related to the development of the two economic zones were agreed upon and have reached the phase of implementation. They also agreed to positively promote the development of the Wihwado zone.

They agreed to hold the fourth meeting of the Joint Guidance Committee in Pyongyang in the first half of 2013.

Minutes of the third meeting and the Agreement on Economic and Technological Cooperation between the Governments of the DPRK and the PRC were signed by Jang Song Thaek and Chen Deming.

A ceremony of declaring the establishment of the Management Committee of the Rason Economic Trade Zone and the Hwanggumphyong Economic Zone took place and relevant documents including The Basic Agreement on Investment in Port and Industrial District of the Rason Economic Trade Zone, A MOU on setting up the Management Committee of the Hwanggumphyong Economic Zone for Joint Development and Management between the North Phyongan Provincial People’s Committee of the DPRK and the Liaoning Provincial People’s Government of the PRC and A MOU on Designing Processes for Basic Facilities in the Hwanggumphyong Economic Zone for the Joint Development and Management between the North Phyongan Provincial People’s Committee of the DPRK and the Liaoning Provincial People’s Government of the PRC were signed during the meeting.

The Chinese Ministry of Commerce gave a reception in connection with the successful third meeting that day.

ORIGINAL POST (2012-8-13): According to KCNA:

DPRK Delegation Leaves for China
Pyongyang, August 13 (KCNA) — A delegation of the DPRK-China Joint Guidance Committee Monday left here for Beijing, China to take part in the third meeting of the committee.

It was headed by its DPRK side Chairman Jang Song Thaek who is a department director of the Central Committee of the Workers’ Party of Korea.

The meeting is reportedly to discuss the joint development and joint management of Rason Economic Trade Zone and Hwanggumphyong and Wihwado Economic Zone.

UPDATE 6 (2012-9-24): The Associated Press reports that WIPO didn’t violate sanctions. According to the article:

The U.N. patent agency says it has been cleared of breaking sanctions against North Korea by sending computers to the regime in Pyongyang.

The Geneva-based World Intellectual Property Organization said Monday that a U.N. panel found it had not violated any of three U.N. Security Council resolutions by providing technical assistance to North Korea.

In July, the Foreign Affairs Committee in the U.S. House of Representatives launched an investigation into whether WIPO had violated U.N. sanctions by sending computers and other technology to Iran and North Korea.

WIPO has insisted it did nothing wrong in providing ‘‘standard IT equipment’’ to the patent and trademark offices in those two countries. The Iran review is still pending.

UPDATE 5 (2012-7-24): A preliminary assessment by the State Department has concluded that WIPO did not violate U.N. sanctions when it sent materials to the DPRK. According to a State Department briefing on July 24:

QUESTION: Two small things. One on WIPO, if that’s how it’s pronounced. WIPO. So following suggestions that WIPO allowed the transfer of banned technology to Iran and North Korea, has the United States been able to mount its own investigation of this?

MS. NULAND: Well, first and foremost, to repeat what we said here last week, we share the concerns raised here in Washington, in the media, regarding these equipment and software transfers by WIPO. We’ve been concerned since we first learned that they had transferred equipment to both North Korea and Iran. We’ve been in contact with WIPO and urged them to institute substantive safeguards.

Our own preliminary assessment, but we are still seeking more information from WIPO, is that there doesn’t appear to have been a violation of UN sanctions. However, this has now been referred to the sanctions committee for them to make their own determination, so we will await the views of the respective UN sanctions committees. We are also seeking more information from WIPO so that we can conclude our own work on whether there was any violation of U.S. law, but we don’t yet have everything that we need in order to make that assessment.

QUESTION: I understand that you don’t yet have everything you need to make a final assessment. But based on what you have, are you able to make a preliminary assessment as to whether or not any U.S. laws were broken?

MS. NULAND: I don’t have a preliminary assessment for you. We’re still seeking some more detail from WIPO.

QUESTION: And then one last thing. I believe there was supposed to have been a hearing in the House today on this that got canceled, I think because the WIPO officials were not going to be available to testify. Are you – given that you don’t yet have all the information that you want, are you satisfied that you are getting enough cooperation from them?

MS. NULAND: Well, we are continuing to work with them, and that is a conversation that is ongoing. I think we are – we have seen a number of positive steps from WIPO with regard to their procedures going forward that are important. For example, they have agreed to a commission that will have an external and independent auditing ability with regard to their projects to try to prevent this kind of thing from happening in the future. As I said, they’re going to seek a retroactive opinion from the sanctions committee, which wasn’t evident at the beginning of this. And they’re also going to ensure that any future projects are reviewed by their legal counsel. But we are still working with them on some of this U.S. stuff that we need.

QUESTION: But you don’t feel like they’re stonewalling you on this?

MS. NULAND: We do not. No.

Here is what the Chicago Tribune had to say about the canceled House committee hearing:

On Tuesday, the ranking Republican and Democrats on the U.S. House Foreign Affairs Committee accused Gurry of preventing two senior WIPO staff members from testifying before a planned committee hearing, forcing its cancellation.

The staff members asked to testify were James Pooley and Miranda Brown, a source familiar with the matter said.

“Director-General Gurry is obstructing this committee’s investigation of WIPO’s transfer of U.S.-origin technology to rogue regimes under international sanctions — a transfer that occurred on his watch,” Republican chairwoman Ileana Ros-Lehtinen and ranking Democrat Howard Berman said in a statement.

A WIPO spokeswoman was not immediately available to comment on the statement. Gurry told Reuters late last week that he would allow “a properly competent person” to testify.

…

Lawmakers have suggested that the United States freeze contributions to WIPO until they are satisfied it is cooperating, although this would likely have a limited impact on the U.N. agency, which relies on member state contributions for only 10 percent of its budget.

UPDATE 4 (2012-7-19): WIPO has issued this statement on their web page:

Information and Clarifications Concerning WIPO’s Technical Assistance Programs
Geneva, July 19, 2012
PR/2012/717

Following some recent media attention and requests for information from certain member states relating to WIPO’s technical assistance programs, WIPO Director General Francis Gurry provided the following information and clarifications concerning the actions that have been undertaken, or are being undertaken, by the Organization in relation to the provision of technical assistance to countries that are the subject of United Nations (UN) sanctions.

The Director General reiterated that the Secretariat is treating concerns relating to the Organization’s technical assistance programs to countries that are the subject of UN sanctions with the utmost seriousness.

The actions undertaken include:

1. Following the expression of initial concerns over the provision of standard IT equipment to patent and trademark offices for the processing of intellectual property (IP) applications, new internal procedures were established and made operational on May 1, 2012. Under these procedures, all managers must refer any activity proposed in a country subject to UN sanctions to WIPO’s Legal Counsel for guidance and clearance. The Legal Counsel will, wherever necessary, consult the appropriate UN Sanctions Committee. Additionally, any work plan for a country subject to UN sanctions will be submitted at the commencement of each calendar year for guidance by the appropriate Sanctions Committee.

2. The provision of standard IT equipment to the IP offices of the Democratic People’s Republic of Korea (DPRK) and the Islamic Republic of Iran that occurred in the preceding years, within the context of the Organization’s business modernization program for IP Offices in developing countries, is being referred to the relevant UN Sanctions Committees for their information and guidance.

3. The initial steps are being undertaken for a full external and independent review of the technical assistance provided to countries subject to UN sanctions.

4. A new internal instruction has been issued ending any provision of IT hardware in any of WIPO’s technical assistance programs.

The Director General reiterates his commitment to transparency and re-affirms the readiness of the Secretariat to continue to provide any information requested by any of the member states of the Organization.

While the legal advice received with respect to the technical assistance provided to DPRK and Iran was that the technical assistance was not in breach of UN Sanctions, it is hoped that the measures outlined above will provide assurance that the Organization is treating this matter with the seriousness that it warrants.

For further information, please contact the Media Relations Section at WIPO:

Tel: (+41 22) – 338 81 61
Fax: (+41 22) – 338 81 40
E-mail

(more…)

A valued reader sends in this great photo taken in Pyongyang back in the early 2000s:

Click image for larger version

The picture is of a computer in Pyongyang running a North Korean anti-virus program.  The Program is called KJAV (Korea Juche-Oriented Anti-Virus). The use of English in the software tells me that this product was intended for export rather than for domestic use, but who knows, there could be a few computers in the DPRK running KJAV. I have yet to read any publications by the “Three Stars of Paektu” (or do we have four now?) on the role that Juche ideology plays in the development of anti-virus software, but I am sure there is a connection…somewhere.

And I also received this older example of North Korean “Konglish”:

The poster is for the 13th Annual World Festival of Youth and Students which took place in Pyongyang back in 1989. The caption of the poster reads “How the forever night of Pyongyang it is!”

According to the Joong Ang Ilbo:

North Korea was caught attempting cyberattacks on Incheon International Airport using viruses planted in game programs, according to the Seoul Metropolitan Police Agency.

A 39-year-old South Korean game distributor was arrested on Sunday for involvement and charged with violating the National Security Law. The National Intelligence Service helped arrest him, police said.

According to the police, the South Korean man, identified by the surname Jo, traveled to Shenyang, northeastern China, starting in September 2009 and met agents of an alleged North Korean trading company. He allegedly asked them to develop game software to be used in the South.

The North Koreans were actually agents from the North’s Reconnaissance General Bureau, and Jo was aware of that, police said.

Jo purchased dozens of computer game software for tens of millions of won, which was a third the cost of the same kind of software in the South. The games were infected with malignant viruses, of which Jo knew, an official at the police agency said.

Jo sold the games to South Korean operators of online games. When people played the games, the viruses used their computers as zombies, through which the cyberattack was launched.

So-called “a distributed denial-of-service attack,” this cyberattack against Incheon International Airport occurred two or three times in March 2011, police said. The attack was fended off by the intelligence authorities in the South.

The police and intelligence authorities also suspect that the North’s Reconnaissance General Bureau is behind a technical glitch in the flight data processor that paralyzed air traffic control at Incheon International Airport for nearly an hour last Sept. 15. It’s not clear if Jo’s viruses were linked. The glitch disrupted the departures of 18 airplanes from the airport. Initially, the Ministry of Land, Transport and Maritime Affairs said it wasn’t linked to North Korea.

AFP reports some slightly different details:

Cho, who was detained on May 23, sold the programmes to South Korean game operators, according to police.

They said the malicious software would paralyse users’ computers and steal personal information. It was not immediately clear how many computers may have been infected.

Cho is also accused of allowing North Korean agents to use his server for distributing denial-of-service (DDoS) attacks on the South’s online systems.

He is alleged to have kept personal information on hundreds of thousands of people from major portals at his home.

Read the full stories here:
Incheon Airport cyberattack traced to Pyongyang
Joongang Ilbo
2012-6-5

S. Korean held for selling N. Korean malware
AFP
2012-6-4

This week, KCNA announced the following:

The Korean Association of Cooks has opened “Korean Dishes”, an Internet homepage.

The homepage deals with common knowledge and theories on variety of dishes and how to cook them.

It also offers such data as origins and anecdotes about dishes and global trend in cooking development.

It has a distinctive catalogue for serving housewives’ convenience. When a visitor chooses any food material in the
catalogue, she can get detailed information about lists of dishes prepared with it and their cookery.

The homepage contains multimedia on national and foreign dishes. Through homepage visitors can exchange their knowledge and views with each other and acquire a wide-ranging cooking.

An official of the Korean Association of Cooks told KCNA that this homepage serves as a close companion for cooks and housewives.

Although the KCNA story does not mention the URL, it is nearly visible on the screen shot taken in the top left photo.  I talked about it with Martyn Williams (check out his database of North Korean web pages here)  and we agreed that it is http://www.cooks.org.kp/index.php. This web page, however, is not actually available on the “world wide web”. It appears to be available only to readers of the DPRK’s intranet, Kwangmyong, which is available through domestic computer terminals and I believe partially through the KoryoLink 3-G phone network.

Some other points of interest:

1. The screen shots indicate that that the North Korean intranet web pages are compatible with the Mozilla Firefox browser.

2. The North Korean intranet pages are prefixed with “http://www.” indicating that though they are not currently on the global Internet, it would be very simple to make them so. This means that the computer programmers in the DPRK are building the network with an infrastructure that would not preclude eventual unification with the global Internet.

Additional Information:

1. Read Martyn William’s analysis of the web pages here.

2. The indispensable STALIN Search Engine provides past KCNA articles on the “Korean Association of Cooks“.

UPDATE 1 (2012-2-28): The Japanese police have raided the heaquarters of Chongryun (Chosen Soren), the Pro-DPRK General Association of Korean Residents in Japan, over its alleged ties to the computer smuggling ring. According to the BBC:

Japanese police have raided the offices of a pro-North Korean organisation suspected of a role in the illegal shipment of computers to North Korea.

Japan maintains a total ban on exports to North Korea.

It is part of a range of sanctions over North Korea’s nuclear programme and its abduction of Japanese nationals in the 1970s and 80s.

Earlier this month police arrested a businessman accused of exporting PCs to North Korea through China.

On Tuesday, about 100 riot police entered the Tokyo offices of an organisation connected to the Pyongyang-affiliated General Association of Korean Residents in Japan, officials say.

Because there are no diplomatic relations between the two countries, the association has functioned as North Korea’s de facto embassy in Japan.[

The raid came after prosecutors last week indicted Lee Soon-Gi, 49, who is accused of illegally exporting 100 second-hand personal computers to North Korea through China, officials said.

The affiliate organisation may be involved in the shipments, police say.

But the association has strongly criticised the raid which it described as an “unjustified and illegal investigation”.

ORIGINAL POST (2012-2-19): According to the Yomuri Shimbun:

The president of a Tokyo-based dealer in secondhand personal computers exported more than 4,000 items to North Korea, according to investigation sources.

Many of the items are believed to have been sold on the black market to senior members of the ruling Workers’ Party of Korea, the sources said.

Lee Sungi, president of Popura-Tec, was arrested earlier this month by the Metropolitan Police Department’s Public Safety Department on suspicion of violating the Foreign Exchange and Foreign Trade Law.

The 49-year-old has been arrested on suspicion of exporting 100 notebook computers to North Korea. In addition, Lee has told police that he shipped more than 4,000 personal computers and liquid-crystal displays to that country on four occasions from 2008 to 2009.

A North Korean trading company based in Dalian, China, brokered the deals, selling the products to a computer shop in Pyongyang, the sources said.

The shop was run by a North Korean computer engineer who once worked at a Chinese company as a software developer. He reportedly contacted Lee in March 2007, saying: “There’s demand for about 1,000 personal computers a month [in North Korea]. I’m interested in buying Japanese products,” according to the sources.

E-mails he sent to Lee suggested there were hundreds of computer shops throughout North Korea, of which 20 were in the capital. However, most of the country’s computer users do not use these shops because they cannot afford to buy their products.

Instead, they usually buy their computers through the black market, the sources said.

Most of the personal computers Lee exported from Japan were secondhand products, including some that had been leased to central and local government offices, according to the sources.

The North Korean computer engineer reportedly sold about 500 products per month to the black market, setting prices at 200 dollars or less for a desktop computer, and a maximum of 300 dollars for a notebook computer, the sources said.

This was still expensive for North Korea, which meant only senior members of North Korea’s ruling party and other wealthy individuals could purchase them, according to the sources.

It is reportedly common for North Korean computer users to buy new products when their items break down because there are almost no after-sales services in the country, according to the sources.

On February 2, 2012 we learned about a separate PC smuggling ring which moved computers from Japan to the DPRK.

Read the full story here:
4,000 PCs, displays said exported to North Korea
Yomuri Shimbun
2012-2-19

Institute for Far Eastern Studies (IFES)
2012-2-1

Since Kim Jong-un’s first election as the vice-chairman of the Korean Workers’ Party Central Military Commission (CMC) on September 28, 2010, Kim Jong-un was reported to have made 33 accompanied onsite inspections with Kim Jong-il and a total of 61 visits at industrial sites.

Out of the 61 total visits, Kim Jong-un inspected the following industries: power/electricity (5 times); metal (3 times), machinery (12 times); agricultural (4 times); light (5 times); food (14 times); and industrial (4 times). Construction sites of Huichon Power Stations were visited four times while the Huichon Ryonha General Machinery Plant and the Kanggye General Tractor Plant were also visited multiple times.

Kim Jong-un’s “economic learning” began while accompanying his late father Kim Jong-il on onsite inspections. Even when Kim Jong-il was alive, Kim Jong-un was most likely to have made preliminary visits to these industrial sites for a closer assessment as a part of his duty as the vice-chairman of the CMC.

The significance of the recent visits mainly lie with inspections to the Huichon Power Stations (located in Jagang Province) equipped with 300,000 kW of power generation capacity. Huichon Power Station was an important national strategic project which was often emphasized by Kim Jong-il, “The construction of the power plant must be completed before the centennial birthday of the Great Leader (Kim Il-sung) with great efforts from the entire party, military and the people.”

The electricity produced at the Huichon Power Station is likely to be distributed primarily in the Pyongyang area around the two national holidays, the Day of the Shining Star (Kim Jong-il’s birthday) and the Day of the Sun (Kim Il-sung’s birthday). Currently, power line constructions are still underway in Pyongyang.

At Huichon, constructions of additional terraced power plants are under planning using the currents from the Yangtze and Cheongcheo Rivers. The electricity produced from these plants is likely to be distributed to the industrial areas in Jagang Province, which is central to the machinery and national defense industries.

Important policy implications can be found from Kim Jong-un’s past accompaniment to the Huichon Ryonha General Machinery Plant with Kim Jong-il. This plant is currently emphasized as Kim Jong-un’s accomplishment and revered as, “the industrial revolution of the new era,” and a “site of CNC (Computer Numerical Control) breakthrough.” In addition, Kim Jong-un’s economic leadership is acclaimed for placing prominence on the state-of-the-art technology and “knowledge-based economy.”

Kim Jong-il visited the Huichon Ryonha General Machinery Plant on October 28, 2011 with Kim Jong-un and inspected the CNC assembly line, CNC processing plant, and CNC machineries. He stressed, “Modernization must be promoted in all sectors and levels founded on the state-of-the-art technology. The achievements in the CNC technology should serve as the stepping stone to move forward toward a higher level of science and technology.”

Similarly on October 27, 2011, Kim Jong-il visited the Yangtze River Machinery Plant* with the younger Kim and stressed, “Powerful economic nation that we are seeking is knowledge-based economy which is only possible when CNC technology and automation is realized that can create material wealth through little resources, efforts, and energy.”

The “knowledge-based economy” will likely become the trademark of Kim Jong-un and esteemed as following the “teachings of Kim Jong-il.” Kim Jong-un’s recent industrial site visits were concentrated on the cutting edge production facilities equipped with modernized and automated production processes.

* NKeconWatch: I believe this name is an error and the correct location is the Jangjagang Machine Plant.

According to Yonhap:

North Korea is stepping up efforts to develop smartphone applications, a move that underscores its commitment not to be left behind in the fast moving world of information technology.

Choe Hyok-chol, a North Korean professor, said research projects are under way to introduce Android smartphones, according to a video clip posted on YouTube.

He explained a bar code application on Android smartphones has improved the time it takes to recognize information contained in bar codes. The video appears to have been recorded on Oct. 27 when the North held an exhibition on programs.

The move comes as more than 1 million North Koreans are subscribed to mobile phone services provided by Egypt’s Orascom Telecom, according to a news report, in a sign of growing mobile penetration in the reclusive country.

The Android operating system is the most widely used smartphone software around the world with hundreds of manufacturers building handsets based on the free and open platform.

You can see the video clip on YouTube here.

Read the full story here:
N. Korea steps up efforts to develop smartphone applications
Yonhap
2012-2-4