North Korean Economy Watch

Daily NK
Yang Jung A
6/21/2007

Kim Jong Il underwent a Percuteneous Transarterial Coronary Angioplasty (PTCA) performed by German doctors in mid-May.

An inside Japanese source well acquainted with North Korea reported by telephone on the 20th that Kim Jong Il received medical treatment from doctors of the Berlin Heart Center in mid-May and was back at work a day later.

This source said that North Korean authority asked the German doctors to closely examine Kim Jong Il’s health and perform surgery if necessary. The examination revealed a myocardial infarction, but no other serious heart condition.

According to the doctors, Kim’s health was not bad except for kidney hypertrophy and some symptoms of diabetes. After examination he received the relatively simple PTCA treatment instead of surgery.

PTCA expands a narrow artery by inflating a tiny balloon. The balloon is introduced into the artery through catheter. It is an effective treatment for coronary artery diseases without the use of thoracotomy, and results in high success rates and few complications. Patients need just a couple of days’ rest. Dr. Jung Yong Suk, a heart specialist at the Sunrin Hospital in Handong University, explained to the Daily NK that “PTCA is a medical treatment for coronary arteries supplying blood into the heart. If Kim Jong Il required the procedure, he may have some problem in his coronary arteries, but it is uncertain if it is a stricture of the heart or myocardial infarction.”

The Japanese source said that the “German doctors promised to keep Kim Jong Il’s procedure a secret and to coordinate a faked story with North Korea authority.” Therefore, the spokesperson of Berlin Heat Center revealed that 6 members of the center stayed in Pyongyang from May 11th to the 19th, treating only three laborers, a nurse, and a scientist.

A North Korea expert speculated that Kim Jong Il might be addressing health concerns prior to the year end South Korean Presidential Election and further nuclear negotiations. Many groundless reports have circulated regarding possible Kim Jong Il heart surgery. A Japanese magazine, Shukan Gendai, claimed that Kim Jong Il received coronary artery bypass surgery for myocardial infarction.

Original claim:
Kim Jong-il had artery surgery in May
Korea Herald
6/14/2007

North Korean leader Kim Jong-il was operated on by a team of German doctors last month to open a blocked artery, a person connected to the Kim regime said.

While doctors from German Heart Institute Berlin arrived in Pyongyang prepared to perform major surgery on Kim, they found only one clogged artery, the person said. The 65-year-old Kim, who suffers from diabetes and high blood pressure, recovered well from the surgery, said the person, who asked that his name not be used because North Korea wanted the operation kept secret.

The person said while other members of North Korea’s elite go abroad for medical treatment, only Kim is important enough to have a team brought into the country. Barbara Nickolaus, a spokeswoman for the institute in Berlin, confirmed that the doctors had been in Pyongyang, and said they were there to treat three workers, a nurse and a scientist.

Kim’s health has been the subject of repeated recent speculation. Chosun Ilbo, South Korea’s biggest daily newspaper, said late last month that South Korean and U.S. intelligence agencies were checking reports Kim was suffering from heart, kidney or liver disease.

The Japanese weekly magazine Shukan Gendai said on June 8 a team of six doctors from Berlin was in Pyongyang from May 11 to 19 and conducted heart-bypass surgery on Kim.

The North’s official Korea Central News Agency said Kim visited factories in North Pyeongan Province near the border with China and spoke with workers on June 7, or less than three weeks after the German doctors left North Korea.

NK Daily, a Seoul online news organization staffed by defectors from North Korea, reported on June 11 it had confirmed the report with an “inside source” in North Korea who said the apparently vigorous Kim’s June 7 schedule lasted until 1 a.m.

Since the 1970s, when he was unofficially designated as successor to his father, Kim Il Sung, Kim Jong-il’s health has been the subject of speculation.

“Kim does have diabetes and high blood pressure,” said C. Kenneth Quinones, a retired U.S. State Department Korea specialist who teaches at Japan’s Akita International University. “But there is no firm evidence that either has worsened recently.”

Kim, who has three sons in their 20s and 30s, hasn’t publicly said whether one of them or someone else will be his successor in the world’s only communist dynasty.

U.S. Concern

“The State Department is concerned about his health, at least until he publicly designates an heir,” Quinones said.

Kim’s failure to keep to his usual quota of appearances, such as visits to work units to deliver what the official Korea Central News Agency calls “on-the-spot guidance,” often triggers speculation.

Given North Korea’s nuclear program, all reports about Kim’s health have to be taken seriously, said Michael Breen, author of “Kim Jong-il: North Korea’s Dear Leader,” a biography.

“One day the reports will be true,” Breen said. “So we can never ignore them.”

Chosun Ilbo reported in May that Kim had been on official activities 23 times between Jan. 1 and May 27, half the number reported during the same period in 2006.

At an April 25 military parade, Kim’s eyeglass lenses were different from his usual sunglasses, leading to speculation his diabetes had worsened, making his eyes more sensitive to sunlight, the newspaper said. That was a “false alarm,” Quinones said. He said Kim was actually wearing “transition” lenses that turn darker according to the sun’s brightness.

South Korea’s National Intelligence Service concluded Kim’s health probably wasn’t in serious decline, according to a person who spoke with service agents.

At the April parade in Pyongyang, South Korean agents watched Kim review troops for two hours with no signs of fatigue, a sign his health isn’t fragile, said the person, who asked not to be named because of the sensitivity of the information.

Chain-Smoker

Kim is a former chain-smoker whose lifestyle — including a reported fondness for cognac and delicacies — may contribute to his diabetes and high blood pressure. His father died, reportedly of cardiovascular disease, at 82 in 1994.

Questions about the younger Kim’s health were heightened during a long disappearance in the late 1970s, prompting speculation he was dead or seriously incapacitated from injuries in a car accident caused by people opposed to a hereditary succession.

After his formal elevation to succeed his father in 1980, the official media portrayed him as a tireless worker for the people’s welfare even at the risk of his own health.

Kim looked pale and thin at the ceremony designating him as successor, causing North Koreans to write critical letters to officials for failing to take care of his health, official media reported at the time.

Kenji Fujimoto, a Japanese chef who served Kim at his Pyongyang palace, said in a pseudonymous book he wrote about the experience that the North Korean leader would complain about the medicine he had to take.

In the book, “The Private Life of Kim Jong-il,” Fujimoto quoted Kim as saying, “Do I have to keep taking these pills every day until I die?” (Bloomberg)

For international readers: The Congressional Research Service is an organization that puts together issue briefs and legislative histories for congressional staff.  They are one of the first places US Congressional staff go to learn about a topic.

In April, the Congressional Research Service published a document on the North Korean Economy.  The full report, as well as some past reports, can be downloaded here.

Executive Summary

This report provides an overview of the economy of the Democratic People’s Republic of Korea (DPRK) or North Korea, its external economic relations, attempts at reform, and U.S. policy options. Along with the United States, North Korea’s major trading partners — China, Japan, South Korea, and Russia — form the socalled “six parties,” who are engaged in talks, currently restarted, to resolve issues raised by the DPRK’s development of nuclear weapons.

The economy of North Korea is of interest to Congress because it provides the financial and industrial resources for Pyongyang to develop its military, can be used as leverage in negotiations, constitutes an important “push factor” for potential refugees seeking to flee the country, creates pressures for the country to trade in arms and illegal drugs, is a rationale for humanitarian assistance, is tied to Pyongyang’s nuclear program, and creates instability that affects South Korea and China. The North Korean threat to sell nuclear weapons material could be driven in part by Pyongyang’s need to generate export earnings. The dismal economic conditions also foster forces of discontent that potentially could turn against the Kim regime — especially if knowledge of the luxurious lifestyle of communist party leaders becomes better known or as the poor economic performance hurts even Pyongyang’s elite.

Economic conditions in North Korea currently seem to be improving but have been dismal for those out of the center of power. Mass starvation — eased only by international food aid and other humanitarian assistance — has stalked the countryside. Over the past 15 years, industrial production in North Korea has shrunk considerably. The country has embarked on a program of economic reforms that include raising wages, allowing prices to better reflect market values, reducing dependence on rationing of essential commodities, trimming back centralized control over factory operations, and opening foreign trade zones for international investment.

North Korea has extensive trading relationships with China and South Korea and more limited trade with Japan and Russia. Because of U.S. economic sanctions and lack of normal trade relations status, U.S. imports from North Korea in 2006 were nil, while U.S. exports consisted of $3,000 worth of books and newspapers.  The DPRK has been running an estimated $1.8 billion deficit per year in its international trade accounts that it funds primarily through receipts of foreign assistance and foreign investment as well as through various questionable activities, such as sales of weapons, transporting and producing illegal drugs, and counterfeiting brand name products and currency.

U.S.-led financial sanctions on North Korea have disrupted that country’s trade. In the six-party talks, economic assistance (including fuel oil) is a major bargaining chip. Economic policy options include increasing or easing economic sanctions, preventing shipments of illicit cargo, normalizing relations with Pyongyang, negotiating a trade agreement, allowing the DPRK to join international financial institutions, and removing the country from the terrorism list. This report will be updated as conditions warrant.

Yonhap
4/16/2007

The U.N. World Food Program (WFP) has only been able to gather one-fifth of the amount of recovery aid it is seeking for North Korea, with less than a year left in the aid program, according to the agency’s tally on Sunday.

A resourcing update for North Korea dated Thursday showed the WFP received donations totaling just short of US$21 million, accounting for 20.53 percent of the aimed $102 million. The donations include $3.2 million carried over from previous operations.

Russia remained the biggest donor with $5 million, which is almost 5 percent of the total. Switzerland provided $2.57 million.

Germany donated $1.66 million. Other contributors include Cuba, Denmark, Ireland, Luxembourg, Italy and Poland.

Private donations totaled $8,474 as of Thursday.

The United Nations has contributed $2.3 million, or 2.25 percent of the total.

Called “protracted relief and recovery operation,” the project runs from April 1, 2006, to March 31, 2008.