Archive for the ‘International Governments’ Category

A new defector survey about market trade in North Korea, and what it says (maybe) about Kim Jong-un

Friday, August 28th, 2015

By Benjamin Katzeff Silberstein 

In Wall Street Journal, Jeyup Kwaak reports on a new defector survey by Seoul National University’s Institute for Peace and Unification Studies (08-26-2015) (added emphasis):

The Seoul National University Institute for Peace and Unification Studies annually surveys more than 100 North Koreans who defected in the prior calendar year. The results provide firsthand insight into developments in the isolated state, though its researchers said they shouldn’t be read as generalized facts due to the small pool of respondents.

[…]

The latest survey, of 146 North Koreans who escaped in 2014, shows significant growth from the previous year in the number of people saying they conducted private business activities and paid bribes to enable them. A little more than half said they received no money from the state, down from last year’s survey but up from the one released in 2013.

Experts say between half and three-quarters of North Koreans’ income comes from quasi-illegal market activities, such as trade of basic goods smuggled in from China, but sporadic crackdowns by national or regional security officials lead to irregular business and bribery. Defectors say officials often collect fees when they set up a booth at a market.

The results themselves do not present a new trend. Several previous defector studies indicate that markets are perhaps the most important source of income and sustenance for many (if not most) North Koreans. However, a few things are interesting to note.

The links may not be entirely clear, but it is at least symbolic that the current survey, albeit with a very small number of interviewees, suggests that support for Kim Jong-un and the leadership may not be waning, at the same time as market activity continues unabated. This at least calls into question an assumption that sometimes occurs that market trade would lead people to become more critical of the regime.

Again, too much shouldn’t be read too much into a small study with participants that probably are not geographically or socially representative of North Korea as a whole. Defectors as a group rarely are. But perhaps one could imagine that market trade being so institutionalized and regulated by the regime would make it more synonymous with the regime itself. I.e., if market trading is seen as something positive, maybe this reflects positively on the regime as well — perhaps the market has been co-opted.

The article also reminds us of the rather peculiar combination of dynamics seen under Kim Jong-un. On the one hand, market trade seems to continue unabated domestically, and initiatives like the new special economic zones and the agricultural reforms show that there is at the very minimum some new thinking going on.

But on the other hand, border controls have been tightened to a degree rarely seen since the mid-1990s, according to defector reports. Just today, DailyNK reports (in Korean) that resident in the Sino-Korean borderlands have seen their access to the Amnok river, often used for laundry by locals, increasingly restricted as of late. As the WSJ writes,

Just 614 North Koreans made it to the South in the first half of this year, compared with 2,706 in the 2011 calendar year, according to the most recent ministry data.

The drop in North Koreans who visited China on legal visas so far this year should perhaps also be seen in this context.

Taken together, the tightened border controls on the one hand, and the seemingly changing (one could say “progressive”) rhetoric on economic matters on the other, paint a mixed picture.

In the early days of Kim Jong-un, the question was whether he was a reformer or a hardliner. A few years into his rule, it seems he might be neither and both at the same time.

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The Kaesong Industrial Complex and inter-Korean tensions

Thursday, August 20th, 2015

UPDATE 1 (2015-8-24): The North and South Koreans have agreed to a solution to the situation. According to KCNA via Yonhap:

1. The north and the south agreed to hold talks between their authorities in Pyongyang or Seoul at an early date to improve the north-south ties and have multi-faceted dialogue and negotiations in the future.

2. The north side expressed regret over the recent mine explosion that occurred in the south side’s area of the Demilitarized Zone (DMZ) along the Military Demarcation Line (MDL), wounding soldiers of the south side.

3. The south side will stop all loudspeaker propaganda broadcasts along the MDL from 12:00, August 25 unless an abnormal case occurs.

4. The north side will lift the semi-war state at that time.

5. The north and the south agreed to arrange reunions of separated families and relatives from the north and the south on the occasion of the Harvest Moon Day this year and continue to hold such reunions in the future, too and to have a Red Cross working contact for it early in September.

6. The north and the south agreed to vitalize NGO exchanges in various fields.

ORIGINAL POST (2015-8-20): The two Korea’s literally just finished hammering out a new agreement on “wages” for North Korean workers at the Kaesong Industrial Complex. However, with the ink barely dried, a new round of escalating conflict between the Koreas is affecting operations at the KIC…

According to Yonhap:

South Korea said Friday it will limit the entry of its nationals into a joint industrial park in North Korea following the exchange of artillery fire between the two sides.

The Unification Ministry said it will only permit South Korean businessmen directly involved in the operation of factories at the Kaesong Industrial Park to enter the complex.

But other South Koreans, including those working at subcontractors, will not be allowed to move in and out of the complex in the North’s border city of the same name, the ministry said.

South Korea fired back at North Korea on Thursday following the North’s firing of shells at a South Korean front-line military unit in the western area of the heavily fortified border. No damage was reported.

A total of 124 South Korean small and medium-size enterprises operate factories at the industrial park, the last remaining symbol of inter-Korean reconciliation. About 54,000 North Koreans work there.

South Korean businessmen safely returned to the South from the complex on Thursday despite the North’s provocation.

The ministry said it has taken measures to ensure the safety of South Koreans who are temporarily staying in the North.

Read the full story here:
S. Korea to partially ban entry into joint industrial park
Yonhap
2015-8-20

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DPRK visitors to China drops in H1 2015

Thursday, August 20th, 2015

According to the Daily NK:

The number of North Koreans who visited China through legal means has dipped this year.

Data on the number of foreigners who went to China in the first half of this year indicate roughly 89,700 North Koreans crossed into the country, according to figures from China’s National Tourist Office cited by the Voice of America [VOA] on Wednesday.

This a 2.2 percent drop from the 91,800 visitors who were there during the same period last year, indicating the numbers are heading toward a two-year decline, it reported.

The figures from this report are only limited to those who visit through legal means and do not reflect illicit trips or defectors who enter the country.

Roughly 52 percent of North Koreans traveling to China reportedly went looking for jobs at restaurants or factories. The number of job-seekers inched up by 3,300 on-year, according to the VOA.

Men outweighed the number of women from the North, making up roughly 85 percent at 76,500. Only 13,200 were female visitors.

The total number of foreigners who went to China in the first six months of the year was at roughly 12.3 million. The greatest number of travelers came from South Korea at slightly over 2.1 million, while North Korea placed 20th on the list.

Read the full story here:
N. Koreans on visas to China drops
Da
Lee Dong Hyuk
2015-8-20

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DPRK – China Trade in 2015 (UPDATED)

Tuesday, August 11th, 2015

UPDATE 2 (2015-8-17): Marcus Noland weighs in on the H1 2015 KDI report.

UPDATE 1 (2015-8-11): KDI reports that DPRK-China trade continues to fall in 2015. According to Yonhap:

North Korea’s trade with China plunged more than 10 percent in the first five months of 2015 due mainly to a drop in raw material prices, a report showed Tuesday.

North Korea’s outbound shipments to its neighbor sank 10.3 percent on-year to US$954 million in the January-May period, while imports plunged 14.3 percent to $1.09 billion, according to the report by the Korea Development Institute (KDI).

“Bilateral trade was down 12.5 percent compared to the year before with exports of anthracite coal and iron ore affecting overall numbers,” KDI said. “Compared to the year before, when trade fell 4.8 percent, this year’s drop is more pronounced.”

The think tank based its assessment on data provided by the International Monetary Fund, the United Nations and the Korea International Trade Association.

North Korea’s exports of coal to China declined 1.6 percent in dollar terms, with the number for iron ore nosediving 70.3 percent.

Falling exports and a subsequent drop in earnings were probably felt by Pyongyang, which will have to consider other means of generating hard currency.

Compared to 2013, when the North’s exports of coal reached its peak, this year’s numbers represent a 24.6 percent drop.

“The contraction is noteworthy because the North actually diversified the places it shipped coal to in China,” the KDI said.

In regards to iron ore, exports declined, both in terms of volume and prices, with the weakening of China’s steel industry directly impacting trade. Exports stood at 600,000 tons, down from 1.11 million tons, with the value standing at $22.96 million.

The KDI said Pyongyang’s No. 1 import item from its neighbor was filament yarn, followed by cargo trucks and petroleum products. Imports of yarn and petroleum products were down, while shipments of cargo trucks rose.

In bold above I have highlighted what appears to be bad news for North Korean coal exporters. I was surprised to see this because an earlier report by Bloomberg indicated that North Korean coal exports to China had increased by 25% this year (over 2014).  However, it is worth pointing out that the Bloomberg report focuses on the actual quantity of coal crossing the border and KDI  reports on the value of the coal crossing the border. The only way both reports can be true is if the North Koreans are again taking lower prices from the Chinese for their coal compared to their international competitors. Another explanation for the conflicting reports could arise if there was a significant difference between Chinese customs data (Bloomberg) and that used by the International Monetary Fund, the United Nations and the Korea International Trade Association (KDI). I don’t have enough experience with these data sets to know how consistent they are.

Benjamin Katzeff Silberstein offers a link to the report here (in Korean only).

Read the full story here:
N. Korea’s trade with China tumbles this year: KDI
Yonhap
2015-8-11

ORIGINAL POST (2015-4-26): Yonhap reports that DPRK – China trade has fallen in the first quarter of 2015:

Trade between North Korea and China, its economic lifeline, slipped 13.4 percent on-year in the first three months of this year amid frayed bilateral ties, data showed Sunday.

Bilateral trade volume fell to US$1.1 billion in the January-March period, compared with $1.27 billion for the same period last year, the Beijing unit of South’s Korea Trade and Investment Promotion Agency (KOTRA) said, citing Chinese customs data.

China is North Korea’s top economic benefactor, but its political ties with Pyongyang have been strained since the North’s third nuclear test in February 2013.

No crude oil was officially sent to North Korea from China for all of last year.

China’s shipments of crude oil to North Korea were also absent during the first quarter of this year.

South Korean diplomatic sources in Beijing, however, have cautioned against reading too much into the official Chinese trade figures because China has provided crude oil to North Korea in the form of grant aid in the past and such shipments were not recorded on paper.

Read the full story here:
N. Korea’s trade with China dips 13.4 pct in Q1
Yonhap
2015-4-26

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The drought that didn’t matter, North Korea says – thanks to agricultural reform?

Monday, August 10th, 2015

By Benjamin Katzeff Silberstein

During the past few months, the World Food Program (WFP) has made reoccurring pleas for increased food assistance to North Korea to alleviate the food shortages expected from a severe summer drought. The North Korean government made similar statements and claimed that the drought was the worst one to occur in 100 years. Aid to the country was subsequently increased from the originally planned level, due to the drought. But now, one North Korean official is saying that food production ended up increasing, after all, thanks to agricultural reforms.

A recent brief by the Institute for Far Eastern Studies at Kyungnam University (IFES) cites a July issue of Tongil Sinbo, a North Korean state-run weekly newspaper. There, Chi Myong Su, director of the Agricultural Research Institute of the Academy of Agricultural Sciences in the country, says that

“the effectiveness of field management system (pojon) from cooperative farm production unit system (bunjo) is noticeable and succeeded in increasing grain production despite the adverse weather conditions.”

The article cited by IFES highlights the smaller work-team structure as key to the success of the reforms. Also, it almost outright states that greater economic incentives were the main factor (although they call it “enthusiasm” and “patriotism”):

“Despite the adverse weather conditions last year, the high grain yield was possible due to implementation of scientific farming methods and field management system to increase enthusiasm of farmers,” and “based on this experience, many cooperative farms across the country will expand subworkteam management system to field management system.”

This is interesting for several reasons.

First, the agricultural reforms seem increasingly pronounced. Though other reforms were reportedly backtracked earlier this year, the government seems eager to claim success for the road travelled in agriculture.

I have written elsewhere that the data doesn’t necessarily support a claim that reforms are working. There is still reason to be skeptical – after all, a North Korean government official claiming that his government’s policies are working is not surprising – but even the claim itself is interesting.

Second, the statement raises questions about monitoring and data gathering capacities, both of the regime and relief organizations in Pyongyang. Again, just a few months ago, alarm bells were ringing about a potential food shortage, and now, a regime official claims that food production has increased. What was the basis of the WFP and regime claims that a food shortage was imminent a few months ago, and what has changed since those claims were made?

Another recent IFES brief also deals with North Korean press reports about the agricultural reforms. It quotes a Rodong Sinmun article from earlier in the summer that brings up some adjustment problems that farmers have had, such as learning how to properly use fertilizers. The most interesting part in my opinion is the following:

The newspaper stressed that “when all farmers claim ownership of their field and subworkteam, one can create innovation in the farming operations.”

Thus, it seems like Pyongyang wants to encourage experimentation and diversity in production methods. This would be a potentially important step towards more efficient agriculture. Perhaps it is part of a pattern. Provinces have reportedly gotten significant leeway in setting up their respective special economic development zones, which could also be a way to encourage experimentation in policies and management methods.

According to the Tongil Sinbo article, reforms are set to expand further in the country given the alleged success. Perhaps it won’t be too long before we can learn more about them through assessments by multilateral organizations like WFP.

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US marine insurance company fined for North Korea dealings

Friday, August 7th, 2015

According to UPI:

A New York marine insurance firm has agreed to pay fines for violating U.S. sanctions against North Korea, Cuba and Iran.

Insurance provider The Navigators Group, Inc. admitted the company provided North Korea vessels with marine insurance, according to a statement from the U.S. Treasury’s Office of Foreign Assets Control on Thursday.

OFAC said Navigators had committed a total of 48 violations: The firm was found in violation of North Korea sanctions including Executive Order No. 13466 and various sanctions against Iran, Cuba and Sudan.

The firm has agreed to pay a reduced fine of $271,000 — down from an initial penalty of $750,000. Of the $750,000 amount, $570,000 was a fine for North Korea sanctions violations.

OFAC said the penalty was reduced after Navigators voluntarily disclosed information of its violations and cooperated with investigators.

Navigators earned $1.1 million in insurance premiums between 2008 and 2011 from 24 individual policies for North Korea vessels.

Between 2009 and 2010, the firm delivered $12,000 in payouts.

Despite sanctions, North Korean ships remain active at sea.

Read the full story here:
New York marine insurance company fined for North Korea dealings
UPI
Elizabeth Shim
2015-8-7

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DPRK refugees in the USA

Tuesday, August 4th, 2015

According to UPI:

The United States is now home to 186 North Korean refugees who first began to arrive in 2006 – two years after the North Korean Human Rights Act of 2004 was signed into law by President George W. Bush.

The North Korean refugee population in the U.S. is still small and just a fraction of other communities, Voice of America reported on Tuesday.

Major refugee communities in the U.S. include 1,078 Burmese, 879 former nationals of the Democratic Republic of the Congo and 818 Somalis.

In fiscal year 2015 – which began in October 2014 for the State Department – Washington granted asylum to one or more North Koreans per month.

In July, the United States accepted four North Korean refugees, the second highest for the fiscal year.

As refugees North Koreans receive some financial support, including a monthly stipend between $200 and $300 for eight months to cover food and medical expenses, South Korean news agency Yonhap reported.

After a year of residence, refugees are eligible for permanent resident status and after five years are permitted to apply for U.S. citizenship.

But the financial support Washington provides North Korean refugees pales in comparison to the support South Korea provides similar defectors.

Seoul’s resettlement dollars awarded to North Koreans have decreased over the years as more North Koreans find their way to the South, but a North Korean defector still qualifies for $5,967 in financial grants, in addition to $11,000 that goes toward long-term housing.

In some cases the U.S. government works with NGOs to resettle the North Koreans, but problems have surfaced in recent years.

In July, The Washington Post reported how a U.S.-based North Korean refugee was deprived of food by his American foster family in Richmond, Va., because they wanted to make their budget stretch.

Joseph Kim, who was then 16, said he found himself hungry in the world’s wealthiest country after years of surviving on weed soup and roasted grasshoppers in North Korea.

Read the full story here:
State Department: 186 North Korean refugees now reside in the United States
UPI
Elizabeth Shim
2015-8-4

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Aid to North Korea up by 110 percent in July

Tuesday, August 4th, 2015

According to UPI citing World Food Program sources, aid to North Korea increased by more than 100 percent from June to July of this year:

Food aid to North Korea more than doubled from June to July and over 3,000 tons were distributed to pregnant women and children, according to the World Food Program.

Damian Kean said Monday the July delivery of 3,231 tons of highly nutritional food items for infants and expectant and nursing mothers is this year’s largest, Voice of America reported.

In June, the World Food Program said 1,528 tons of food was sent to North Korea, and aid reached a low in February when only 1,187 tons of food reached the reclusive country.

South Korean news agency Yonhap reported the July food aid package was the biggest in 19 months, but the number of aid recipients decreased from 632,000 to 620,000 between June and July.

The World Food Program’s fundraising goal of $168 million – needed to provide highly nutritional food packages to 1.8 million hungry North Koreans – has only reached half, or $82.9 million, of its target number.

The U.N. organization has postponed the termination of its North Korea food aid program, due to an ongoing drought in the country that is posing risks to the food supply.

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North Korean-supplied missiles to Yemen

Wednesday, July 29th, 2015

According to Yonhap:

Scud missiles fired into Saudi Arabia by Yemeni rebels in recent months came from North Korea, a South Korean intelligence official said Wednesday, in the latest case that illustrated North Korea’s support for the weapons programs of some countries in the Middle East.

Saudi Arabia has shot down about 40 percent of some 20 Scud missiles fired by Yemen’s Houthi rebels, said the official, who is familiar with the issue.

He did not give further details on how South Korea reached the conclusion that the missiles originated from North Korea. He spoke on condition of anonymity because he was not authorized to speak to media.

Missile exports have long been a major source of hard currency for North Korea.

“North Korea has sold missiles to Yemen and sent missile engineers to that country in the 1990s,” said a former North Korean official, who was in a position to know about the arms deals.

Another former North Korean intelligence official in Seoul said North Korea sold many Scud missiles to countries in the Middle East, noting Egypt was the hub of North Korea’s arms trade in the region.

The two former North Korean officials, who later defected to South Korea, asked not to be identified, citing the issue’s sensitivity.

North Korea’s Scud-B missiles and Scud-C missiles have a range of 300 kilometers and 500 kilometers, respectively, according to South Korea’s Defense Ministry.

Read the full story here:
Scud missiles fired into Saudi Arabia from Yemen traced to N. Korea: official
Yonhap
2015-7-29

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ROK re-configures inter-Korean cooperation fund

Monday, July 27th, 2015

According to Yonhap:

The Unification Ministry said Monday it has decided to overhaul ways to operate a government fund designed to promote inter-Korean cooperation in a bid to offer humanitarian aid to North Korea on a project basis.

South Korea set up the Inter-Korean Cooperation Fund in 1991 in order to facilitate inter-Korean exchanges and economic cooperation. As of end-June, the fund stood at an outstanding 12.4 trillion won (US$10.7 billion).

The ministry said it will overhaul ways to run the fund so as to provide project-based assistance to the North, a departure from its current practice of offering only emergency relief.

To this end, the government plans to specify the areas where civilian groups could offer humanitarian aid such as healthcare, agriculture and forestation.

“Through the overhaul, necessary aid including food and others could be delivered (to the North) on a project basis,” Jeong Joon-hee, the ministry spokesman, said in a regular press briefing.

South Korea has almost suspended its massive assistance to North Korea at the government level since 2010, when it imposed economic sanctions on Pyongyang following the North’s attacks on a South Korean warship and a border island that year. But Seoul has continued to allow civilian groups to extend aid to the North.

Seoul said in May that it will encourage more civic groups to increase support to North Korea in non-political areas if they are deemed to promote national unity and reconciliation.

Read the full story here:
S. Korea to overhaul fund on inter-Korean cooperation
Yonhap
2015-7-27

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