North Korean Economy Watch

Last week, North Korea was accused of  launching a series of annoying DOS attacks on web pages across the planet.  While doing some research on this story, I stumbled on “Hermit Surfers of Pongyang” by Stephen Mercato at the CIA.  This story highlights the ways the DPRK is using the Internet to support their system.  Below are some excerpts from the article:

Facilitating scientific research

The Internet has greatly enhanced the ease with which North Korea can acquire foreign data. Researchers can surf the Internet via a connection routed through the Ministry of Posts and Telecommunications.  The accomplishments of Dr. Hwang Tok-man, a researcher on the biology faculty of Kim Il-song University, illustrates P’yongyang’s embrace of IT. Her research focus has been the structural and functional analysis of proteins, or proteomics. She also has explored the intersection of biology and information technology, compiling a “huge” structural database. Using an IBM Aptiva S-series computer and data from the Protein Database of the US Department of Energy’s Brookhaven National Laboratory, she and a colleague examined the structure-function relationships of cellulases, enzymes that break down cellulose. They used the Align, Clustal V, and FASTA programs to compare the amino acid sequences and exploited overseas protein sequence databases to study the molecular evolution of a nuclease, an enzyme that splits nucleic acids.

The Internet has also eased the collection burden born by pro-DPRK Koreans living overseas. An article on the Web site of the Korean Association of Science and Technology in Japan (KAST), part of the [chongryun], describes the benefits of the Internet for KAST members who gather information in Japan for North Korea:

Data Dissemination 

In addition to enhancing foreign collection capabilities, the Internet has made dissemination of data within North Korea easier. Researchers based outside the capital no longer need to travel to P’yongyang for necessary information. For example, members of the Academy of Sciences, located on the outskirts of the capital, have for years commuted into the city on a particular train that “serves the convenience of the scientists to frequent the Grand People’s Study House and other organs.” Scientists now can access data of the GPSH, CSTIA, Kim Il-song University, and other data repositories via “Kwangmyong,” the DPRK S&T Intranet developed in 1997. Kwangmyong consists of a browser, an e-mail program, news groups, a search engine, and a file transfer system, programs developed by CSTIA. The online version of CSTIA’s Kwangmyong 2001 dictionary allows on-screen translation.

The Internet in the DPRK

While allowing researchers to use the Internet to keep current with global trends in science and technology, P’yongyang has been able to retain control over unwelcome political information. The government can promote scientific exploration while keeping researchers in country and under surveillance. Computers conducting Internet searches are more readily monitored than the photocopying machines that served to spread forbidden political tracts in the former Soviet Union. With Internet searches easily tracked and the penalties for political dissent grave, it is difficult to imagine scientists straying from technology sites. The same applies to the domestic Intranet, where technicians exchanging e-mail messages on political issues would run a serious risk of late-night knocks on the door by members of the security forces.

Read the full article here.

From GPI Consulting:

In the current financial and economic situation, companies face many challenges. They must cut costs, develop new products and find new markets. In these fields, North-Korea might be an interesting option. Inspired by the economic successes of its neighbouring country China, North-Korea has since a few years opened its doors to foreign enterprises. It established several free trade zones to attract foreign investors and there are several sectors, including textile industry, shipbuilding, agro business, logistics, renewable energy, mining and Information Technology, that can be considered for trade and investment.

North-Korea is competing with other Asian countries by offering skilled labor for very low monthly wages and by offering tax incentives.  Last year, North-Korea’s exports rose with 23 percent and its imports with 32 percent. Do you want to explore new business opportunities for your company? Then join us from 19 – 26 September 2009 on our trade & investment mission to North-Korea. The program includes individual matchmaking, company visits, network receptions and dinners. Furthermore, we will visit the annual Autumn International Trade Fair in Pyongyang (see photo). We will also meet European business people who are working and living in North-Korea.
 
The mission is meant for entrepreneurs from various business sectors; tailormade meetings will be arranged by our local partner, the DPRK Chamber of Commerce. The program of this unique mission has been attached and we can be contacted for further details. In case you want to participate: please register as soon as possible, so we can start the visa-application procedure.
 
With best regards,
Paul Tjia (sr. consultant ‘global sourcing’)
GPI Consultancy, P.O. Box 26151, 3002 ED Rotterdam, The Netherlands
E-mail: paul@gpic.nl tel: +31-10-4254172  fax: +31-10-4254317 Website: www.gpic.nl
 
N.B. some examples of investment opportunities in North-Korea:  
http://www.gpic.nl/invest(hungsong).pdf and http://www.gpic.nl/invest(clock).pdf 

GPI’s marketing flyer is here.

Time offers a short update on the DPRK’s technology sector.  According to the article:

The country’s Dear Leader has quietly launched an educational offensive to ramp up his country’s computing skills and build an internationally competitive IT industry, moves that experts say have been strongly encouraged by Kim’s oldest son, Jong Nam, who directs the Korea Computer Center. Grade-school kids are now drilled in Pascal and other computer languages, while gifted students are channeled into science and technology programs at Kim Il Sung University and Kim Chaek University, which some have dubbed the MIT of North Korea. Although currently stalled because of troubled bilateral relations with South Korea, another technical university, Pyongyang University of Science and Technology (PUST), is scheduled to open soon; foreign professors are supposed to eventually teach there, in English.

“They understand IT is critical for their development,” says Frederick Carriere, executive director of the New York–based Korea Society, who plays a pivotal role in bilateral programs with both halves of the Korean peninsula. This includes helping to broker a seven-year-long academic exchange between Syracuse University and Kim Chaek, which recently was able to open the country’s first digital library, using open-source software.

“I’d like to see more incentives for the DPRK to participate in this kind of standards-based [open-source] work, because through that participation, you get investment in the world of the sort that presumably reduces the likelihood of certain types of conflict,” argues Stuart Thorson, an IT and governance expert at Syracuse who oversees the program with Kim Chaek, which he says has been hampered by ineffectual U.S. export controls.

Those export controls, of course, are just a symptom of the growing international tensions between Pyongyang and the West. Whether it’s the country’s recent nuclear tests and heated rhetoric directed toward its southern neighbor or the standoff over its jailing of two U.S. reporters, the unstable relations make it more difficult for Kim to deliver on his IT promises.

Even more problematic are the regime’s overriding security preoccupations. Key power and telecom transmissions are buried underground, which complicates much needed maintenance and upgrades. More communications also means eroded state control, which is a vital regime concern. There are currently only a little more than 1 million domestic phone lines — about 5 per 100 inhabitants — although just 10% belong to individuals or households. Unauthorized international calls abroad can lead to fines and arrest and in one case reportedly led to the public execution of a plant manager in October 2007, according to Good Friends, a Seoul-based aid organization. The same fears of the outside world will mean a very cautious and slow opening of the Internet, which is now reserved for trusted government officials and foreigners.

“It would be nice to think that a new high-tech day is dawning over North Korea, but that would be a mistake,” argues David J. Smith, chief operating officer and director of the North Korea Project at the National Institute for Public Policy, a U.S. foreign policy think tank. “North Korea’s high-tech ventures will fail to save its economy without a systemic overhaul, of which the regime is incapable.”

Given a chance, though, North Koreans’ native intelligence does flourish. Two years after first entering a team in the IBM-sponsored Computer Olympics (the International Collegiate Programming Contest), the North Koreans made it into the finals. “They are capable of handling very complicated software, and the results are extremely good,” says Paul Tjia, a Dutchman whose GPI Consultancy has arranged for several European clients to outsource work to North Korean programmers. At Seoul’s Unification Ministry, IT expert Lee Duk Haeng says Samsung and Korean Telecom are among a handful of South Korean firms currently using North Korean engineers.

There are already hundreds of North Korean software engineers working in China, in border cities and elsewhere, according to Heejin Lee, a professor at Yonsei University, who has conducted fieldwork in the region. Most work as subcontractors for South Korean, Japanese or Chinese firms — sometimes in joint ventures — and Lee says there are numerous clandestine firms. The North Koreans earn high marks for their scientific and mathematical skills and come substantially cheaper than their Chinese counterparts — $300-$500 a month, one-third the cost of a Chinese engineer, or half the price of an Indian one, he says.

UPDATE: The first joint venture software company in the DPRK (which handles a number of outsourced projects) is Nosotek.  Here is an interview with the vice president Ju Jong Chol and German president Volker Eloesser.

Read the full article here:
North Korea Tries to Ramp Up Tech Infrastructure
Time
Ken Stier
6/22/2009

UPDATE: Excellent information in the comments. 

ORIGNAL POST: Last week many press reports claimed that the DPRK’s newly launched 3-G mobile phone service includes limited Internet access.  To take one example from the Associated Press:

North Korea has begun limited Internet service for mobile phone users, a government Web site reported, months after launching an advanced network in cooperation with an Egyptian telecoms company.

The service allows North Koreans to access a Web site through their phones to see news reports carried by the country’s official Korean Central News Agency as well as news about the capital Pyongyang, according to the government-run Uriminzokkiri Web site.

Uriminzokkiri did not give any further details in its report Thursday on whether the service is restricted to the capital Pyongyang or is available elsewhere.

The number of mobile phone users had reached 20,000 by the end of March, including some foreigners, Tokyo-based Choson Sinbo newspaper, considered a mouthpiece for the North Korean regime, said earlier this month.

I have not yet been able to locate the story on Uriminzokkiri, but according to a follow up story in the AP:

The Korean-language Web site as seen on an ordinary computer screen also allows viewers to listen to North Korean music, get information about books, art and investment opportunities in North Korea and even engage in Internet chatting. It was unclear, however, if those services were available in the mobile version.

So the “Web site” is actually a portal, and I am 99.99% sure that  it is not connected to the Internet at all but to either the DPRK’s intranet network, called “Kwangmyong,” or to a newly built self-contained computer network.  As an aside, however, many North Koreans (in Pyongyang anyhow) are aware of the internet. 

Strangely, here is an advertisement of sorts about the DPRK’s mobile network which several readers have sent to me.  I believe this was produced by the Chongryun, but this is merely a guess:

Click on image for You Tube video

Here is a little history on the DPRK’s experiences with mobile networks (via teleography):

Mobile phones are tightly controlled in North Korea and were banned until November 2002. Two months later incumbent fixed line telco Northeast Asia Telephone and Telecommunications (NEAT&T) launched GSM-900 services under the banner SUN NET. However, cellular devices were once again banned following an explosion on a train in June 2004, which was thought to have been triggered remotely by a wireless handset. In January 2008 Egypt-based telecoms operator Orascom Telecom announced to the surprise of most that CHEO Technology, a joint venture between itself (75%) and Korea Post and Telecoms Corp (25%), had been awarded a licence to operate 3G wireless services by the government. Under the terms of its licence, CHEO is permitted to provide mobile telephony services for 25 years, the first four of which on an exclusive basis. The company launched the country’s first 3G network in the capital in December 2008 under the name Koryolink. By April 2009 CHEO had reportedly signed up 20,000 subscribers and its 3G network had been expanded to include the main road running up to the northern city of Hyangsan, with national coverage expected by 2012.

Read more here:
NKorea opens limited Internet cell phone service
Associated Press (via Forbes)
5/21/2009

NKorea allows limited Internet cell phone service
Associated Press (via Yahoo)
Kwang tae Kim
5/22/2009

DPRK citizens forbidden from entering Google offices?
According to this article in Britain’s Daily Mail:

When you visit the shiny headquarters of Google UK, just a stone’s throw from Victoria Station in London, the receptionist asks you to log-in on a computer with a touch screen.

How else would you sign in? This is one of the centres of the cyber universe.

And then something strange happens. Before you can be issued a pass, the computer asks you to enter into a ‘ nondisclosure agreement’ with Google Inc., a 499-word document.

You must agree not to disclose any confidential information that you might stumble upon while in the building.

In particular, the Participant (that’s you) ‘hereby certifies that he/she shall not  –  directly or indirectly  –  sell, export, re- export, transfer, divert, or otherwise dispose of any hardware, software, source code or technology . . . without obtaining prior authorisation from Google and the appropriate government authorities’.

In addition, you must even certify that you are not a citizen of Cuba, Iran, North Korea, Sudan or Syria.

Some readers will recall a similar incident with LinkedIn a few weeks back (which has since been resolved).

Jackie Chan
Following Jackie Chan’s comments that he believed Chinese people “need to be controlled,”  some Hong Kong residents created a Facebook group dedicated to sending him to the DPRK.  If you are a member of Facebook, check out the group page here.

Great Photos
(Hat tip to David) The Boston Globe posted a great set of photos from North Korea’s boder with China.  I am not easily impressed with photos of the DPRK, but these are good.

(Addition Al Jazeera)
Last night Scott Snyder and Alejandro Cao de Benos were on Al Jazeera’s Riz Khan.  Part 1 here.  Part 2 here.

I came across this video (in Dutch with some English) featuring Leonid Petrov and Paul Tjia.  It contains some interesting information on North Korea’s computer programming industry.

Click on image to see film 

Paul Tjia of GPI Consultancyin the Netherlands has been running technology business delegations to the DPRK for several years.  Their next delegation will be taking place this May.  To learn more, you can read the marketing leaflet in PDF here.

North Korea Uncovered v.16
Download it here

The most recent version of North Korea Uncovered (North Korea Google Earth) has been published.  Since being launched, this project has been continuously expanded and to date has been downloaded over 32,000 times.

Pictured to the left is a statue of Laurent Kabila of the Democratic Republic of Congo.  This statue, as well as many others identified in this version of the project, was built by the North Koreans. According to a visitor:

From the neck down, the Kabila monument looks strangely like Kim Jong Il: baggy uniform, creased pants, the raised arm, a little book in his left hand. From the neck up, the statue is the thick, grim bald mug of Laurent Kabila (his son Joseph is the current president). “The body was made in North Korea,” explains my driver Felix. In other words, the body is Kim Jong Il’s, but with a fat, scowling Kabila head simply welded on.

This is particularly interesting because there are no known pictures of a Kim Jong il statue.  The only KJI statue that is reported to exist is in front of the National Security Agency in Pyongyang.  If a Kim Jong il statue does in fact exist, it might look something like this.

Thanks again to the anonymous contributors, readers, and fans of this project for your helpful advice and location information. This project would not be successful without your contributions.

Version 16 contains the following additions: Rakwon Machine Complex, Sinuiju Cosmetics Factory, Manpo Restaurant, Worker’s Party No. 3 Building (including Central Committee and Guidance Dept.), Pukchang Aluminum Factory, Pusan-ri Aluminum Factory, Pukchung Machine Complex, Mirim Block Factory, Pyongyang General Textile Factory, Chonnae Cement Factory, Pyongsu Rx Joint Venture, Tongbong Cooperative Farm, Chusang Cooperative Farm, Hoeryong Essential Foodstuff Factory, Kim Ki-song Hoeryong First Middle School , Mirim War University, electricity grid expansion, Tonghae Satellite Launching Ground (TSLG)” is also known as the “Musudan-ri Launching Station,” rebuilt electricity grid, Kumchang-ri suspected underground nuclear site, Wangjaesan Grand Monument, Phothae Revolutionary Site, Naedong Revolutionary Site, Kunja Revolutionary Site, Junggang Revolutionary Site, Phophyong Revolutionary Site, Samdung Revolutionary Site, Phyongsan Granite Mine, Songjin Iron and Steel Complex (Kimchaek), Swedish, German and British embassy building, Taehongdan Potato Processing Factory, Pyongyang Muyseum of Film and Theatrical Arts, Overseas Monuments built by DPRK: Rice Museum (Muzium Padi) in Malaysia, Statue de Patrice Lumumba (Kinshasa, DR Congo), National Heroes Acre (Windhoek, Namibia), Derg Monument (Addis Ababa, Ethiopia), National Heroes Acre (Harare, Zimbabwe), New State House (Windhoek, Namibia), Three Dikgosi (Chiefs) Monument (Gaborone, Botswana), 1st of May Square Statue of Agostinho Neto (Luanda, Angola), Momunment Heroinas Angolas (Luanda, Angola), Monument to the Martyrs of Kifangondo Battle (Luanda, Angola), Place de l’étoile rouge, (Porto Novo, Benin), Statue of King Béhanzin (Abomey, Benin), Monument to the African Renaissance (Dakar, Senegal), Monument to Laurent Kabila [pictured above] (Kinshasa, DR Congo).

Wednesday 4 March, 14:00 – 17:30
KVK The Hague, Randstadzaal
Koningskade 30, 2596 AA  Den Haag

This event is sponsored by GPI Consultancy (see previous posts here).

Speakers include:

Willem Lobbes, boardmember of the Dutch Korean Tradeclub, Director of Lobbes Insurance Consultants

Representative of the DPRK Embassy in Bern, Switzerland

Egbert Wissink, CEO of NovolinQ BV

Professor Evert Jacobsen, University of Wageningen

Kees van Galen, CEO VNC Asia Travel
 
Paul Tjia, Director of GPI Consultancy

The AGENDA can be found here (PDF).

The REGISTRATION FORM can be downloaded here.

According to Yonhap:

A group of South Korean information technology experts and businessmen will visit North Korea next month on a rare trip to the communist country amid frozen cross-border exchanges, organizers said Thursday.

The 80-member group is scheduled to tour North Korea’s major IT centers and hold a joint software exhibition during its Feb. 7-11 visit, said the non-governmental South-North Cooperation for IT Exchange. They also plan to donate 5,000 IT books and journals to the North.

“IT books we have delivered so far were mostly Korean language books, and the North Koreans requested original texts. So we collected some foreign language texts this time,” said Kim Jin-hyung, a member of the team and professor from the Korea Advanced Institute of Science and Technology (KAIST).

Through annual visits since 2006, the IT organization has delivered about 30,000 technical books and latest journals. Yoo Wan-ryung, chief of Seoul-based Unikotech Korea which has promoted investment in North Korea, participates in this visit, organizers said.

Read the full article here:
S. Korean IT experts to visit N. Korea
Yonhap
1/15/2008

According to an anonymous qoute by a South Korean intelligence official in the Choson Ilbo:

“Especially, North Korea developed its own DVD player in 2006 with a view to developing its own IT industry, this ironically provided momentum for the spread of South Korean soap operas.”

I had assumed the DPRK imported DVD players. 

Read the full article here:
Pyongyang Bids Korean Wave to Recede
Choson Ilbo
12/26/2008