North Korean Economy Watch

Josh points out this table from the UNHCR (originally published by RFA):

Click image for larger version.

UPDATE: According to Yonhap, Chinese and Australian ships were shipping the arms:

North Korean cargo carrying arms exports to Iran left a western port five days after Pyongyang’s nuclear test in May and was transferred aboard Chinese and Australian freighters before being seized by the United Arab Emirates (UAE) in July, according to an Italian company that handled the delivery.

Mario Carniglia, head of the international freight-forwarding firm Otim, said the containers, reportedly loaded with rocket launchers, detonators, and munitions, were shipped via the Chinese cities of Dalian and Shanghai and were transferred to an Australian vessel just after the U.N. Security Council adopted Resolution 1874 which bans the North from engaging in arms trade.

“(The containers) left the Nampo Port on May 30,” he said in a recent interview with Yonhap News Agency in Rome on Wednesday. A North Korean ship carrying the 10 containers arrived in Dalian two days later and a Chinese cargo ship moved them to Shanghai on June 13, he said.

“The containers were placed on (the Australian freighter) ANL-Australia in Shanghai,” he said, flipping through related documents.

The cargo was on its scheduled course until the UAE intercepted the ANL-Australia on July 22. The U.S. Navy had been focusing on trailing another North Korean vessel, the Kangnam 1, which appeared to be headed to Myanmar also carrying weapons exports.

The seizure was the first made under Resolution 1874 that calls upon all states to inspect cargo to and from North Korea if they have “information that provides reasonable grounds to believe the cargo contains” illicit weapons.

The Australian government said earlier, based on its own probe, that there were rocket-propelled grenades and other weapons in the seized containers, though Carniglia said his firm did not know the contents of the cargo.

He said North Korea provided documents identifying the content as “Oil Pumping Equipment.”

“We couldn’t see the contents as the containers were sealed when shipped from Nampo,” he said in the interview conducted in Italian. He refused to identify the exporter in North Korea, citing business ethics.

“All we were responsible for was handling the shipping from China to Iran,” Carniglia said.

He added that North Korea has not filed a complaint or asked for the return of the cargo, held at the UAE now for more than 50 days.

The UAE is reportedly in consultation with the U.N. sanctions committee on how to handle the seized shipment.

In a related move, the U.N. committee demanded an explanation from North Korea last month for the apparent arms export attempt.

The head of the North’s mission to the U.N., Sin Son-ho, sent a reply letter reiterating his country’s position that it is not bound by any U.N. resolution.

Sin also said that North Korea’s experimental uranium enrichment program is in a “completion phase,” claiming the country has made advancements in mastering an alternative route to producing nuclear weapons apart from its plutonium-based program.

ORIGINAL POST: According to Bloomberg:

The United Arab Emirates has seized a ship carrying North Korean-manufactured munitions, detonators, explosives and rocket-propelled grenades bound for Iran in violation of United Nations sanctions, diplomats said.

The UAE two weeks ago notified the UN Security Council of the seizure, according to the diplomats, who spoke on condition they aren’t named because the communication hasn’t been made public. They said the ship, owned by an Australian subsidiary of a French company and sailing under a Bahamian flag, was carrying 10 containers of arms disguised as oil equipment.

The council committee that monitors enforcement of UN sanctions against North Korea wrote letters to Iran and the government in Pyongyang asking for explanations of the violation, and one to the UAE expressing appreciation for the cooperation, the envoys said. No response has been received and the UAE has unloaded the cargo, they said.

…

he Security Council voted on June 12 to adopt a resolution that punishes North Korea for its recent nuclear-bomb test and missile launches through cargo inspections and enforcement of restrictions on financial transactions. The measure calls for the interdiction at seaports, airports or in international waters of any cargo suspected of containing arms or nuclear or missile-related materials going to or from North Korea.

According to the Wall Street Journal:

According to the Security Council diplomat, the weapons were carried on an Australian vessel, the ANL-Australia, which was flying under a Bahamian flag. According to an Aug. 14 letter sent to the U.N. sanctions committee, the exporting company was an Italian shipper, Otim, which exported the items from its Shanghai office.

“The cargo manifest said the shipment contained oil-boring machines, but then you opened it up and there were these items,” the diplomat said. ANL and Otim officials couldn’t immediately be reached to comment.

…

A spokeswoman for the Australian Department of Foreign Affairs and Trade said the Australian government is aware of the incident and is investigating to determine whether any Australian laws may have been broken.

The seizure could also raise fresh questions about North Korea’s intentions. After taking an aggressive stance against the West earlier this year, Pyongyang appears to have softened its rhetoric, releasing two captive American journalists and sending a delegation to meet with South Korea’s president.

Read more here:
UAE Seizes North Korean Weapons Shipment to Iran
Bloomberg
Bill Varner
8/28/2009

Cargo of North Korea Matériel Is Seized en Route to Iran
Wall Street Journal
Peter Spiegel and Chip Cummins
8/29/2009

According to the AAP via The Age (Australia):

Australia has granted $3.75 million in humanitarian aid to North Korea.

Foreign Affairs Minister Stephen Smith said the funds comprised $2 million for the World Food Program for emergency food for North Korea, $1 million for Unicef for emergency water and water sanitation supplies and $750,000 for the Red Cross.

Read the full story here:
Australia grants $3.75m aid to N Korea
The Age
1/13/2009

The Nautilus Institute has published an aritcle by Leonid Petrov on 60 years of Australian/DPRK relations.

Topics covered: on again/off agian diplomatic history, Australian foreign policy, bilateral relations, DPRK engagement with Australia, Pong Su (drug smuggling), denuclearization, economic sanctions, DPRK canberra embassy closing.

You may read the article on line here.

You may download a PDF of the article here: petrov-australia-dprk.pdf

Unlike most other nations’ embassies, North Korean offices must not only self-finance their operations but they must also send money back home.  It looks like they were finding it hard to make a living in Canberra.  Though an enjoyable town, Canberra is so far from most of the economic action in Australia that they were probably unable to close any deals.  In the future, they should consider opening a consulate in Sydney–if they can afford the rent.

Joong Ang Daily
1/23/2008

North Korea can’t afford the bills anymore, so it will close its embassy here, Australia’s foreign ministry said yesterday.

North Korean diplomats informed Australian officials in November that the four-person embassy, located in a diplomatic quarter of Australia’s capital Canberra, would shut in February.

“The embassy advised that they plan to continue with non-resident diplomatic accreditation from Jakarta,” a foreign ministry spokesman told Reuters. The mission said in a letter it was closing due to “financial reasons.”

“The DPRK said it would consider reopening if its financial situation improves,” the spokesman said, referring to the North’s official name, the Democratic People’s Republic of Korea.

Australia is one of few Western countries to have diplomatic ties with the reclusive state. Pyongyang opened its embassy in May 2002.

In September 2006, Australia announced sanctions against 12 companies and one person connected with financing Pyongyang’s nuclear weapons program, including a visa ban on North Korean nationals and on North Korean shipping.

Yonhap
6/10/2007

Products made in an inter-Korean industrial park in the first four months of the year were valued at US$48.1 million, about 24 percent of which, or $11.3 million worth of products, were exported, South Korea’s unification ministry said Sunday.

Last year’s comparable figure during the cited period was 18.4 percent, or $2.3 million, according to the ministry.

The industrial complex, located in the North Korean border city of Kaesong, is one of two flagship projects the South operates with the North in the spirit of reconciliation that developed following the historic inter-Korean summit in 2000.

Over 13,000 North Korean workers are currently employed by 22 South Korean companies there. They produce garments, utensils and other labor-intensive goods.

The biggest importer of Kaesong-made goods was the European Union (EU), followed by China, Russia and Australia.

The ministry did not give figures on how many goods made in the industrial park the countries imported.

Austrailian Associated Press
4/27/2007

Australia will provide almost $4 million in humanitarian aid to a hungry and malnourished North Korea.

Millions of the 23 million people in the communist country are living in poverty.

Foreign Minister Alexander Downer said Australia’s $4 million commitment will focus on improving the health, hygiene and nutrition of North Koreans.

“Thirty-seven per cent of North Koreans suffer from chronic malnutrition, and two-thirds of North Korean children do not receive enough food because of a one million tonne food shortfall,” Mr Downer said in a statement.

“Many North Koreans also lack access to clean water and sanitation.”

Mr Downer said Australia’s assistance will be provided through a number of United Nations agencies and the International Red Cross.

About $1.5 million will go towards UNICEF’s water and sanitation program.

A further $1.5 million will provide food for 1.9 million people through the World Food Program.

The rest of the money will be spent on emergency health and essential medicines, disaster management, water supply and sanitation.

Korea Herald
Yoav Cerralbo
2/26/2007

Last week, the Australian government announced that it would be sending a diplomatic team to North Korea to help strengthen bilateral ties.

In Seoul, Australian Ambassador Peter Rowe spoke about this news with The Korea Herald, explaining that the Australian team will be looking at ways they can help in energy, aid and safeguards expertise.

“These are things that Australia can contribute,” he said.

Rowe said that Australia, a strong proponent of the Nuclear Nonproliferation Treaty, would be “happy” to provide expertise and training in nuclear safeguards as part of North Korea’s dismantling process.

This bilateral exchange is not new to both countries. After the 1994 framework agreement, Australia helped to train and install safeguards in North Korea.

“That was when we started to develop the bilateral relationship,” he said. “It was only as the North Koreans were doing things like missile and nuclear tests that we had to run backwards.”

He added that Australia wants to see North Korea as a constructive, positive member of the international community.

“If North Korea wants to join the international community in this process, that is return enough for us because it contributes to regional security and stability,” the ambassador said.

The diplomatic mission would be coordinated with the other members of the six-party talks and as the secretive and unpredictable regime fulfills the benchmarks that were set up in the deal, Australia would be there in support and would reciprocally increase the relationship.

The idea of this mission, Rowe said, is to urge North Korea to fulfill the obligations they’ve undertaken in this most recent agreement. “That will be its main task.”

At the six-party talks recently, fueled-starved North Korea agreed to start the process of shutting down their Yongbyon nuclear reactor within 60 days in return for initial aid equal to 50,000 tons of heavy fuel oil after international inspectors have confirmed the shutdown.

“I’m reasonably confident that North Korea will go with the commitments they made for the first 60 days,” he said.

BBC
10/16/2006

Australia is to ban North Korean ships from entering its ports in response to its claimed nuclear bomb test, the foreign minister has announced.

Alexander Downer told Parliament the move would help Australia make a “quite clear contribution” to other sanctions agreed by the UN on Saturday.

The UN resolution imposes both weapons and financial sanctions on the North, but despite the unanimous vote, disagreements have emerged between the members of the council.

Beijing has indicated that it still has reservations about carrying out the extensive cargo inspections that Washington says are called for in the resolution.

Ship inspections

Australia is one of the few countries to have diplomatic relations with North Korea, but its trade ties are limited. In 2005, imports amounted to A$16m ($12m).

“If we are to ban North Korean vessels from visiting Australian ports then I think that will help Australia make a quite clear contribution to the United Nations sanctions regime.”

Japan, which banned North Korean ships from its ports last week, is looking at whether it can provide logistical support for US vessels if they start trying to inspect cargo ships going to or from North Korea.

The restrictions imposed by Japan’s pacifist constitution may require the government to pass new laws to allow that to happen.

In a further diplomatic drive, US Secretary of State Condoleezza Rice is due to arrive in Japan on Wednesday.

She reportedly intends to reassure the country that Washington will provide adequate protection in the event that North Korea obtains a viable nuclear weapon - a message she will later take to South Korea.

‘Heavy responsibility’

The UN resolution against North Korea was agreed after lengthy negotiations.

It imposes tough weapons restrictions, targets luxury goods and imposes a travel ban on some North Korean officials.

It also allows the inspection of cargo vessels going in and out of North Korea for banned materials, although the resolution was weakened slightly at China and Russia’s insistence, to make this provision less mandatory.

Beijing’s UN envoy, Wang Guangya, said immediately after the vote that China urged countries to “refrain from taking any provocative steps that may intensify the tension”.

Both Russia and China are concerned that inspections could spark naval confrontations with North Korean boats.

But the US ambassador to the UN, John Bolton, told American television that China had voted for the sanctions and therefore “China itself now has an obligation to make sure that it complies.”

Joong Ang Daily
Ser Myo-ja, Lee Sang-il
9/20/2006

Japan and Australia yesterday announced new sanctions against North Korea in another sign of increased financial pressure on the communist state, which has declared it possesses nuclear arms.

The announced purpose of the sanctions was to push Pyongyang back to six-party talks in Beijing to disarm the country in return for diplomatic recognition and financial aid.

In Washington, U.S. officials also signaled that additional sanctions against the North may be in store.

In Tokyo, the cabinet approved a partial freeze on North Korean assets in Japan, imposing restrictions on 15 North Korean agencies or companies and one individual.

“This shows the resolve of the international community and Japan,” said Shinzo Abe, the chief cabinet secretary and heir-apparent to Prime Minister Junichiro Koizumi.

The restrictions on financial transactions were directed, Tokyo said, at figures related to North Korea’s missile and nuclear programs.

After North Korea test-launched a barrage of missiles in early July, Tokyo barred the entry of a North Korean ship to its ports for six months and forbade the entry of North Korean government officials into Japan.

Australia, one of the few Western countries that had diplomatic relations with North Korea, acted the same day, imposing similar bans on financial transactions by people and companies it said were involved in North Korean arms programs.

Foreign Minister Alexander Downer told the press, “This supports and complements similar action taken by Japan today and previous actions taken by the United States, and sends a strong message to North Korea.”

In Washington, a State Department official told Korean journalists in a background briefing that the United States might reimpose sanctions lifted after an accord in 1994, which temporarily reduced tensions over the North’s nuclear programs. He said a proposal to restore the sanctions existing before 1994 was being studied. The relaxation was modest; U.S. companies were allowed to offer telephone service to North Korea and import some raw materials.

In Seoul, Song Min-soon, the Blue House senior security advisor, reacted cautiously to the announcements, saying it would be “inappropriate” to comment on sanctions imposed by other governments. He said the matter was one for capitals to decide, based on a United Nations Security Council resolution critical of North Korea’s missile and nuclear programs and those nations’ own laws.

Separately, Beijing rebuffed a U.S. invitation to a meeting Thursday of financial ministers in New York to discuss North Korea.

From the BBC:
New sanctions target North Korea

Japan and Australia have announced new financial sanctions against North Korea, stepping up pressure on the secretive state over missile tests.

The sanctions will freeze the transfer of money to North Korea by groups suspected of having links to its nuclear or missile programmes.

The move, which follows similar action by the US, comes after Pyongyang launched several missiles in July.

South Korea has urged other countries not to push the North into a corner.

The South is worried that the North may retaliate by carrying out a nuclear test, which would destroy any remaining hope of a diplomatic solution to the stand-off.

Japanese government spokesman Shinzo Abe said the new sanctions were in line with a United Nations resolution which denounced the missile tests.

The Japanese measures affect 15 groups and one individual, and will come into effect later on Tuesday, according to Japanese media.

The Australian measures applied to 12 companies and one person, according to Foreign Minister Alexander Downer, who said the sanctions were “consistent with our strong international stand against the proliferation of weapons of mass destruction.”

Media reports said the two lists were almost identical.

Tough stance

North Korea’s decision to test-fire seven missiles in July - including a long-range Taepodong-2 which is believed to be capable of reaching Alaska - angered the international community.

A UN resolution demanded that North Korea suspend its ballistic missile programme, and barred all UN member states from supplying North Korea with material related to missiles or weapons of mass destruction.

In the immediate aftermath, Japan imposed limited sanctions, including a decision to ban a North Korean trade ferry from Japanese ports and a moratorium on charter flights from Pyongyang.

The new measures also called for closer scrutiny of those wanting to send money or transfer financial assets to North Korea.

“By taking these measures, we have demonstrated the resolve of the international community and Japan,” said Chief Cabinet Secretary Shinzo Abe.

“I do not know how North Korea will respond, but I hope North Korea will accept the UN Security Council resolution in a sincere manner.”

The BBC correspondent in Tokyo, Chris Hogg, says there is still some doubt about how effective these sanctions will be.

Although Japan looks to be clamping down on North Korea, other countries that exert a strong influence on the country - notably China and South Korea - are reluctant to impose similar measures.

Following the Japanese announcement, China restated its opposition to sanctions and called for further dialogue.

Nuclear fears

In addition to fears over North Korea’s missile programmes, the international community is also worried about its nuclear intentions.

The United States, China, Japan, Russia and South Korea have repeatedly tried to persuade the North to abandon its nuclear programme.

But the so-called six-party talks have been on hold since November 2005, because North Korea refuses to attend until Washington lifted economic restrictions against it.

Exactly a year ago, North Korea agreed in principle to give up its nuclear weapons programme in return for economic help and security guarantees.

The move was greeted by surprise and relief, but a joint statement issued at the time failed to bridge the wide gulf between North Korea and the US. One year on, the North remains as isolated as ever.

The region remains on alert in case Pyongyang decides to follow up on the July ballistic missile tests with a nuclear test.

Analysts say the North has enough plutonium for several bombs, but has yet to prove it can build a reliable weapon.