North Korean Economy Watch

Daily NK
Lee Sung Jin
10/29/2007

South Korean housewives are afraid to open their wallets due to the threefold increase in the price of cabbage and radish compared to last year with the kimchi preparation season ahead. The skyrocketed price of cabbage in North Korea has also caused concerns about disturbance to the kimjang (kimchi preparation) season.

Lee Ok Ran (45), who trades in Hoiryeong, relayed in a phone conversation with DailyNK on the 25th, “Due to the flood damage and the delayed seedtime, the amount of the cabbage harvest has decreased significantly. In the middle of October, we have to enter the kimjang season, but are worried because the price of cabbage has risen exorbitantly. The saying that the price of cabbage is like the price of gold seems fitting now.”

Ms. Lee said, “Large cabbage has not been reaped yet, so cabbage from China has mostly been sold in the jangmadang (markets). Unripe cabbage made in North Korea is being sold at 450~500 won per bundle and Chinese-produced cabbage costs around 1,800~2,000 won.” Last year, North Korean-produced cabbage was sold for 200~250 won per bundle.

He explained, “Chosun (North Korea) cabbage has a lot of insect marks and the leaves are tough, but on the other hand, Chinese-produced cabbages have better quality, so generally reflect over a twofold difference in price. Mostly, the party leaders buy and eat these cabbages rather than average civilians.”

However, with the soaring price of North Korean cabbage, the cost of imported cabbage has increased significantly.

Ms. Lee added, “In the winter, there is only one type of a sidedish—kimchi–so they are called ‘a half-year’s gourmet food.’ At this time, if we cannot prepare kimchi, we will not see kimchi for the entire year next year.”

North Korean civilians have prepared for kimchi by harvesting cabbage or radish seeds, planted starting late July immediately after reaping wheat and corn, from the end of October.

The reality of the cabbage scarcity is due to the loss of the majority of cabbage, which had just started sprouting in early August, in the flood.

The North Korean Central News Agency and the Chosun Shimbo issued by Chongryon (General Association of North Korean Residents in Japan) reported on the 10th, “In some areas of South Pyongan and Kangwon, collective farm laborers plowed the fields submerged in the flood and have started re-sowing.”

The North Korean farmers started sowing cabbage and radish seeds again, but the amount of the harvest is expected to be half of the annual average amount. Due to this, North Korea’s “kimjang combat,” which is supposed to start the middle of October, is supposed to be hit with a huge setback.

In North Korea, using military language such as “combat” for important events is customary. Just as there is the spring rice-planting combat, the summer weeding combat, and the fall harvesting combat, the words, “kimjang combat,” are used during kimjang season.

In northernmost Yangkang, North Hamkyung, kimjang season begins in the middle of October. Come November, all regions of North Korea, such as South Hamkyung, Jagang, North Pyongan, South Pyongan, and Hwanghae are swarming from the combats.

However, the price of cabbage has exorbitantly this year and by kimjang season, the price of hot pepper and seasoning skyrockets, so the concern of North Korean ordinary people for surviving the winter will be raised a notch.

BBC
10/9/2007

Japan has extended economic sanctions on North Korea, citing a lack of progress in a row over Japanese nationals abducted by Pyongyang.

The measures - which ban imports from North Korea and visits by its ships - will continue for another six months.

A top official said Japan was seeking advances on both the abduction and nuclear issues.

The move comes exactly a year after North Korea carried out its first nuclear test, on 9 October 2006.

Since then, Pyongyang has agreed to end its nuclear programme in return for millions of dollars worth of aid.

It has closed its main Yongbyon reactor and last week committed to a timetable for disclosing and dismantling all its nuclear facilities by the end of the year.

Later this week, a US-led team of experts are due to visit North Korea, where they will begin supervising the process of dismantling its nuclear installations.

‘No progress’

Japan is one of the five countries involved in the nuclear deal with North Korea.

But a major sticking point in the bilateral relationship has been the issue of Japanese citizens abducted by Pyongyang in the late 1970s and early 1980s to train spies.

“We saw the need to extend the sanctions because there has been no progress over the abduction issue,” Chief Cabinet Secretary Nobutaka Machimura told journalists after the move was agreed at a Cabinet meeting.

North Korea admitted in 2002 that it had kidnapped 13 Japanese nationals. It has returned five of them and says the remaining eight are dead. It says the issue has now been resolved.

But Japan wants concrete proof of the deaths and believes that several more of its citizens were taken. There is huge public concern over the issue in Japan.

Talks in Mongolia last month aimed at resolving the dispute came to nothing.

The abduction row was not the only factor behind the decision, Mr Machimura said.

“We also took into comprehensive consideration the overall situation involving North Korea, including the nuclear issue,” he said.

A foreign ministry official told the Associated Press news agency that Japan wanted to see concrete steps from Pyongyang towards disabling its nuclear programme.

The sanctions - imposed last October after North Korea’s nuclear test - prevent visits by the Mangyongbong-92 ferry, the only direct link between the two countries, and ban imports from the impoverished nation.

They have now been extended until 13 April, officials said. The decision needs the endorsement of parliament, but the opposition have already agreed to the step.

Institute for Far Eastern Studies
NK Brief No. 07-10-2-1

DPRK-U.S. RELATIONS
North Korean and U.S. officials kicked off the month of September with meetings held in Geneva on the 1st~2nd. The bilateral talks focused on how to implement the February 13 agreement. After two days of talks, U.S. Assistant Secretary of State Christopher Hill stated he is “convinced” the North will disable nuclear programs by year’s end, a timeline offered by the DPRK negotiators. North Korean press reported that the DPRK would be removed from the U.S. terrorism roster and sanctions imposed under the Trading with the Enemy Act would be lifted in return.

On September 7, Hill announced that North Korea had invited nuclear experts from the United States, Russia, and China to the DPRK in order to survey nuclear facilities and recommend dismantlement plans. The experts examined North Korean nuclear sites from September 11 to September 16.

On the same day, U.S. President Bush stated Washington would consider a peace treaty with North Korea in return for the North’s abandonment of nuclear arms.

On September 17 it was reported that North Korea had admitted that it had earlier procured materials needed to build uranium enrichment centrifuges. The admission regarded the import of 150 tons of hard aluminum pipes, enough for 2,600 centrifugal separators.

On September 20, the DPRK was removed from Washington’s list of countries producing illegal drugs. The North was added to the list in 2003.

On September 28, U.S. President Bush authorized 25 million USD worth of energy aid for North Korea. These funds could be used to provide the DPRK 50,000 metric tons of heavy fuel oil, equal to the amounts provided by China and South Korea as part of the February 13 agreement.

DPRK-JAPAN RELATIONS
Two days of talks between North Korean and Japanese diplomats began on September 5 in Mongolia, with both sides expressing confidence that there would be progress. Wartime compensation issues were discussed, although Japan continued to link normalization of relations with kidnapping issues.

Following the talks, North Korea stated that kidnapping issues were resolved with Japan, while Japan stated that both sides reiterated existing positions. On the same day, Japan rejected a DPRK request to allow North Korean ships to dock in Japan in order to pick up aid for flood victims.

On September 30, Chief Cabinet Secretary Nobutaka Machimura said Japanese economic sanctions on North Korea would be extended for another six months due to “basically no progress” on abduction issues.

DPRK-SYRIA ARMS COOPERATION
Reports began coming out of Israel in early September that reconnaissance flights over Syria had taken pictures of North Korean nuclear supplies and materials. Following Israeli air strikes, it was reported that Special Forces had entered Syria and confiscated material that appeared to be of DPRK origin. Conflicting reports stated that the facilities struck were missile storage facilities, rather than of a nuclear nature. North Korea has denied any nuclear cooperation with Syria.

DPRK-UAE RELATIONS
North Korea established ambassador-level diplomatic ties with the United Arab Emirates on September 18. A joint statement said the two countries aim to “enhance understanding and boost the links of friendship and cooperation between their two peoples.” Ties with such an oil-rich nation on friendly terms with Washington could be significant as the North moves to dismantle nuclear facilities.

ROK-DPRK ECONOMIC COOPERATION
It was reported on September 4 that stock prices of South Korean companies engaging in inter-Korean economic cooperation have shot up on news that the DPRK will dismantle nuclear programs. This includes not only those companies operating in the Kaesong Industrial Complex, but also firms involved in providing electricity and other projects planned in exchange for the North’s denuclearization.

On September 20 it was announced that the ROK government plans to request a 50 percent increase for inter-Korean cooperative projects in next year’s budget. The Ministry of Planning and Budget will request 822 million USD for cross-border projects, as well as 580 million USD for humanitarian assistance.

On September 27, it was reported that the ROK government was reviewing a proposal to jointly develop Nampo, Haeju, Najin, Sunbong, Wonsan, and Shinuiju. The North has requested development of heavy industries, while South Korea seeks cooperation on light industrial projects.

SIX-PARTY TALKS
The latest round of six-party talks opened in Beijing on September 27, with both the U.S. and DPRK negotiators promising progress. On September 30, talks were ended to allow delegates to return to their home countries to work on a ‘nuts and bolts’ joint statement. U.S. delegate Hill stated the delegates were close to agreeing on a definition of facilities, and that the proposed joint statement was very detailed. Before returning to Pyongyang, Kim Kye-gwan was quoted as saying that the North can report nuclear programs, but will not declare nuclear weapons by the end of the year. An ROK official stated that the North’s position was acceptable to Seoul. Negotiators are also thought to have agreed to begin removal of ten core devices from three nuclear facilities beginning in November. The joint statement is scheduled for release on October 2.

DPRK FLOODING
Acting UN Coordinator to the DPRK Jean-Pierre de Margerie stated on September 3, “The level of damage to infrastructure, to communications, to crops, to farmland and to households, is considerable,” but also pointed out, “The [DPRK] government has improved its level of cooperation by giving us unprecedented access to the field to conduct our assessments of the damage.”

ESPIONAGE IN THE DPRK
Li Su-Gil, spokesman for the DPRK National Security Service, reported on September 5 that several foreigners had been arrested along with a number of DPRK citizens accused of spying for a foreign country; Specifically, for having “collected official documents and information on the DPRK’s important military facilities, and spread the idea of so-called democracy and freedom to the people.” The identities and nationalities of those arrested were not revealed.

Japan Focus
Tessa Morris-Suzuki
3/15/2007

As the slow and difficult negotiations on North Korean denuclearisation unfold, one small group of a hundred people or so in Japan are watching proceedings with a unique personal interest. Some are Japanese, others ethnic Koreans. All are survivors of one of the modern world’s most bizarre, tragic and utterly forgotten “humanitarian” projects.

Between 1959 and 1984, these few were among the 93,340 people who migrated from Japan to North Korea in search of a new and better life. There were several particularly ironic features of this migration. First, it took place precisely at the time of Japan’s “economic miracle”. Secondly, although it was described as a “repatriation”, almost all those who “returned” to North Korea originally came from the south of the Korean peninsula, and many had been born and lived all their lives in Japan. Third, the glowing images of life which tempted them to Kim Il Sung’s “worker’s paradise” came, not just from the North Korean propaganda machine but from the Japanese mainstream media, supported and encouraged by politicians including key members of Japan’s ruling Liberal Democratic Party.

After decades in North Korea, around one hundred migrants have now escaped the harsh realities of life there, and made the perilous return journey back to Japan. Other survivors of the same project who managed to escape have settled in South Korea.

The story of their migration has been almost entirely unheard by the rest of the world. But it urgently needs to be heard, not least because it involves an injustice that resulted in the deaths of thousands of people, and is still causing the deaths and untold suffering today. The history of this migration also reveals the complexity of postwar Japan’s connections with North Korea: and without understanding this, it is impossible fully to understand the impasse which their relations have now reached.

As secret documents from the Cold War era are declassified and testimony from survivors emerges, the true story of this mass movement is now starting to emerge for the first time. We now know that it was the product of a deliberate policy, very carefully designed and implemented at the height of the Cold War by the North Korean and Japanese governments often working in concert, and supported in various ways by the Soviet Union, the United States and the International Red Cross movement. It is a history that sheds important light on the complex background to Northeast Asia’s contemporary conflicts. It also evokes chilling echoes of other coerced or manipulated migrations, including the repatriation of Eastern Europeans to the Soviet Union and other Communist countries in the immediate post-war era.

The story starts in the mid-1950s at the height of the Cold War. Some 600,000 Koreans were living in Japan, most having migrated to Japan from the southern part of the Korean Peninsula during the colonial period (1910-1945). Having been unilaterally designated “foreigners” by the Japanese government, they had no legal right to permanent residence and faced continual discrimination, prejudice and poverty. South Korea was then an impoverished nation under the authoritarian rule of Yi Seung-Man (Syngman Rhee) and had no interest in taking them back.

The newly released records show that from 1955 onwards, some Japanese bureaucrats and politicians (notably members of the ruling party then and now) began to develop strategies to encourage Koreans in Japan to “return” instead to North Korea. Knowing that this was a politically explosive issue, they tried to keep their role in the scheme covert and to ensure that the exodus was carried out under the auspices of the neutral and humanitarian Red Cross. However, as a leading Japanese Red Cross official put it, his government’s real aim was “to rid itself of several tens of thousands of Koreans who are indigent and vaguely communist”.

Via their national Red Cross Societies, Japan made secret contact with North Korea in 1956 and 1957, urging its government to accept a substantial influx of Koreans from Japan. The Japanese government and Japan Red Cross officials placed intense pressure on the International Committee of the Red Cross to lend its name and support to a mass “repatriation”, thus enabling the scheme to be presented to the world as an apolitical, humanitarian venture. To this end, they provided the international body with some highly questionable information.

Meanwhile, the limited welfare payments available to Koreans in Japan were being drastically slashed - a measure that must surely have made the prospect of life in communist North Korea look more appealing. At the same time, the Japanese Red Cross was engaged in a secret search for ships to carry out the project.

At first, the North Korean response to the proposal was cool. It was happy to accept a small number of “true believers”, but it was having enough problems feeding its own people in the wake of the Korean-US War without accepting a mass inflow of immigrants. In 1958, however, North Korean leader Kim Il Sung dramatically changed course. Apparently seeing the scheme as a valuable source of skilled labor, and as an international propaganda coup which might damage Japan’s relations with South Korea and the US, he issued a public welcome to ethnic Koreans from Japan, promising them housing, jobs, education and welfare.

Immediately, propaganda campaigns began to sweep through Japan’s Korean community, orchestrated by a local pro-North Korean organization, but amplified by a flood of articles in the Japanese mass media. A special “Repatriation Cooperation Society”, involving politicians from across Japan’s political spectrum, was set up to distribute information encouraging Koreans to “return” to North Korea. Leading members included former Prime Minister Hatoyama Ichiro and prominent ruling-party politician Koizumi Junya (whose son Koizumi Junichiro was to become Prime Minister in 2001).

Another troubling aspect revealed by declassified documents is the United States attitude toward the scheme. The US State Department was at that time focussed on renegotiating its all-important security treaty with Japan, a process for which it relied on the enthusiastic cooperation of Japanese Prime Minister Kishi Nobusuke (grandfather of the present Japanese Prime Minister, Abe Shinzo).

The US appears to have been unaware of the secret contacts between Japan and North Korea in 1956 and 1957. When it first became aware of the repatriation plan a couple of years later, the Eisenhower administration regarded it with concern. But once the Japanese and North Korean Red Cross Societies reached an agreement on a mass “return” in mid-1959, the Eisenhower administration did not take any practical steps to halt the unfolding tragedy.

US Ambassador in Tokyo Douglas MacArthur II (who played a key role on the US side) told his Australian counterpart in 1959 that the “American Embassy had checked Japanese opinion and found it was almost unanimously in favour of ‘getting rid of the Koreans’”. At this sensitive moment in US-Japan relations, the State Department was clearly cautious of intervening in a scheme that was an obvious vote-winner for the Kishi regime. Besides, MacArthur personally sympathised with the public emotion, commenting (as the Australian Ambassador at the time reported) that “he himself can scarcely criticize the Japanese for this as the Koreans left in Japan are a poor lot including many Communists and many criminals.”

In fact, although some were doubtless ideologically committed to the Kim Il Sung regime, those who “returned” to North Korea included tens of thousands of people whose only dream was a better future for themselves and their families: people who included entrepreneurs, technicians and university lecturers as well as the poor and unemployed. While most were ethnic Koreans, their number also included over 6,000 Japanese nationals (mostly spouses of Korean men). Many thousands, of course, were children.

The International Red Cross “confirmation of free will”, which was set in place to guarantee to the world that this was a voluntary migration, proved (despite the best intentions of some of those involved) to be little more than a public ritual, too poorly-staffed, lacking the necessary information, and carried out too late in the day to have its intended effect.

Testimony from the small number of former “returnees” who have recently slipped across the border out of North Korea recalls the shock they felt on first arriving and realising the desperate poverty of the country to which they had come. Their plight was made worse some years after the start of the “repatriation”, when the North Korean government began to regard “returnees” from Japan with growing suspicion and prejudice. Thousands were sent to labour camps. Of these, many were never heard from again.

Today in Japan, relatives of those who “returned” to North Korea in the Cold War years watch the difficult process of nuclear diplomacy quietly but with intense concern. The support they send through unreliable communications channels is often the only means of survival for family members left behind in North Korea. While the story of the Japanese kidnap victims of North Korea has dominated news headlines, this tragic story of the 93,340 who were “returned” remains little known, and hostility to North Korea (as well as fears for the fate of relatives in the North) makes it difficult for the small group of survivors now living in Japan to raise their voices. Fears of a mass “re-return” of the ethnic Koreans who left under the repatriation scheme is also a little-discussed factor at work in Japanese government calculations on its relationship with North Korea.

The slow process of dialogue that began at the Six Party Talks in Beijing holds out a faint ray of hope for the future of these divided families. In the meanwhile, it is surely time for their story finally to be told.

Video Here:
http://myspacetv.com/index.cfm?fuseaction=vids.individual&videoid=14645562

Tessa Morris-Suzuki is Professor of Japanese History and Convenor of the Division of Pacific and Asian History in the College of Asia and the Pacific, Australian National University. Her book Exodus to North Korea: Shadows from Japan’s Cold War will be published next month at Rowman and Littlefield. Contact e-mail: tessams@hotmail.com.

Japan Today (Hat Tip DPRK Studies)
8/3/2007

Three executives of a seafood company in Sanyoonoda, Yamaguchi Prefecture, were found guilty Thursday of importing North Korean littleneck clams in February in violation of the foreign trade control law.
 
The Shimonoseki branch of the Yamaguchi District Court sentenced Yoshio Fujioka, 69, director of Toen Boeki KK, to two years in prison suspended for three years, and his brother Noboru Fujioka, 59, president of the firm, and Yuzo Fujioka, Yoshio’s 41-year-old son and a director at the firm, to 22 months in prison suspended for three years. The court fined Toen Boeki 15 million yen and an affiliated firm 500,000 yen.

Institute for Far Eastern Studies (IFES)
8/1/2007

INTER-KOREAN RELATIONS

Following two days of talks between economic representatives of the two Koreas at the Kaesong Industrial Complex, South Korea announced on July 7 that it would begin shipping raw materials to the North in exchange for DPRK natural resources. South Korea shipped 800,000 USD of polyester fabric on July 25, and is set to send the rest of the materials by the end of November. North Korea accepted South Korean prices for the goods, and will pay transportation, cargo working, and demurrage costs, as well. South Korea will pay for shipping, insurance, and the use of port facilities. On 28 July, a South Korean delegation left for the North in order to conduct on-site surveys of three zinc and magnesite mines. The team will spend two weeks in North Korea.

It was reported on 17 July that North Korea proposed a joint fishing zone north of the ‘Northern Limit Line’ dividing North and South territorial waters to the west of the peninsula. Seoul turned down the offer.

Inter-Korean military talks broke down early on 26 July after only three days of negotiations as North Korea insisted on the redrawing of the Northern Limit Line.

North Korea demanded on 27 July that workers in the Kaesong Industrial Complex be given a 15 percent pay raise. The North Korean workers will not work overtime, weekends or holidays beginning in August unless the raise is granted.

It was reported by the Korea International Trade Association on 26 July that inter-Korean trade was up 28.6 percent in the first six months of 2007, totaling 720 million USD.

RUSSIA-DPRK INVESTMENT

It was reported on 19 July that Russia and North Korea have agreed to connect Khasan and Najin by rail, enlisting investment from Russian oil companies interested in an inactive refinery at Najin Port capable of processing up to 120,000 barrels per day. The project is estimated to cost over two billion USD.

MONGOLIA-DPRK RELATIONS

During a four-day visit to Mongolia by Kim Yong-nam beginning on 20 July, the two countries signed protocols on cooperation on health and science, trade and sea transport, and labor exchange issues. This follows on the heals of an agreement to allow South Korean trains to travel through North Korean territory on to Mongolia in route to Russia and Europe.

JAPAN-DPRK PROPAGANDA

Japan took one step further to recover abductees in North Korea this month when the government began broadcasting propaganda into the DPRK intended for Japanese citizens. The broadcasts are made in Korean and Japanese (30 minutes each) daily, and updated once per week.

U.S.-DPRK PEACE PROSPECTS

U.S. Ambassador to the ROK Alexander Vershbow stated that Washington was prepared to negotiate a permanent peace regime on the Korean Peninsula by the end of the year if North Korea were to completely abandon its nuclear ambitions.

EGYPT-DPRK INVESTMENT

The Egyptian company Orascom Construction Industries announced a 115 million USD deal with North Korea’s state-owned Pyongyang Myongdang Trading Corporation to purchase a 50 percent state in Sangwon Cement. To put this in perspective, the deal in worth more than four times the amount of frozen DPRK funds that had caused six-party talks to break down and delayed the implementation of the February 13 agreement.

NORTH KOREAN SOCIETY

The Economist reported on 7 July that, according to foreigners living in the North’s capital, concern for petty law appears to be weakening. Citizens are reportedly smoking in smoke-free zones, sitting on escalator rails, and even blocking traffic by selling wares on the streets.

It was reported on July 11 that a letter sent earlier in the year by the North Korean Red Cross indicated severe shortages of medical supplies. The letter stated that North Korea would accept any medicine, even if it was past expiration, and accept all consequences for any problems that arose from using outdated supplies. The (South) Korea Pharmaceutical Manufacturers Association had no choice but to reject the request.

Events were held on July 11 in North Korea in order to promote women’s health and well-being issues. Marking World Population Day, a North Korean official stated that the DPRK has cooperated with the UN Population Fund since 1986, and is now in the fourth phase of cooperation.

Seeing entertainment venues as a “threat to society”, North Korean security forces have been implementing a shutdown of karaoke bars and Internet cafes. These venues mainly cater to traders in the northern regions of the country.

It was reported on July 13 that construction of North Korea’s first all-English language university was nearing completion. The Pyongyang University of Science and Technology, funded largely by ROK and U.S. Christian evangelical groups, will hold 2600 students and offer undergraduate and post-graduate degrees in business administration, information technology, and agriculture.

Local elections were held on 29 July for DPRK provincial, city, and country People’s Assemblies. 100 percent of 27,390 candidates were approved with a 99.82 percent turnout reported.

Daily NK
Kwon Jeong Hyun
7/27/2007

An order was made by North Korean authorities prohibiting the use of all Japanese cars until the year 2009. Though this only applies to old cars manufactured before 2003, it seems that the orders are being enforced stronger than expected.

The drivers seat of cars manufactured after 2004 are being changed to the right hand side by the Japanese Chongryon (General Association of North Korean Residents in Japan), informed a source on the 25th.

In addition, all Japanese cars have been banned from entering Pyongyang excluding cars with permits (such as governmental or company cars). As a result, many Japanese delivery services are experiencing hardship.

This kind of order was made around Kim Jong Il’s birthday on February 16th by central authorities with inspection conducted by the transportation department of the Social Safety Agency in both the rural districts and Pyongyang.

These orders were made amidst a time when relations between North and South Korea had worsened and when a broken down Japanese car blocked the road while Kim Jong Il was on his way to worship at his the Kim Il Song Memorial.

Regarding this, one safety traffic official of Pyongyang city informed, “Cars which have been produced with the South such as the “Hweparam (whistle)” and “Arirang” are being regulated by the nation. National income is being increased by selling these. Further, the regulations were enforced to control the people who were making lots of money by trading cars illegally.”

The Pyeonghwa Motors which operates under the control of the Unification Church has been working in collaboration with North Korea. Since 2002, cars and mini buses have been supplied after parts had been put together at the factory.

This order by North Korean authorities has been enforced strongly and has lasted much longer than expected. Hence many traders and individuals are expressing discontent.

Japanese cars are being sold at ridiculously low prices with yet another year and 2 months remaining until the ban is lifted. People who took out loans in order to purchase the cars are being pressured by their debtors, a source informed.

Korea Herald
7/8/2007

Japan should refrain from its hostile policy toward North Korea and actively take part in a six-party actions plan to achieve a nuclear-free Korean Peninsula, a pro-North Korean newspaper in Japan said Saturday.

Chosun Sinbo, a pro-North Korean newspaper published in Tokyo, said on Saturday that Japan should be out of the six-party discussions if it continues to avoid the energy assistance program.

Japan, a member of six-party nuclear disarmament talks, is at odds with North Korea over about a dozen Japanese citizens kidnapped by North Korean agents decades ago. Japan refuses to provide any economic aid to the North until the kidnapping issue is resolved.

Under a deal adopted on Feb. 13, North Korea is to receive 1 million tons of heavy fuel oil in exchange for shutting down its key weapons-related nuclear facilities. South Korea is responsible for the first shipment of 50,000 tons.

Bloomberg
Hideko Takayama
6/28/2007

Kim Jong Il no longer supports the government of North Korea.

Kim is a 66-year-old businessman who owns a shoe factory in Kobe, Japan. In 1997, he resolved to switch his citizenship to South Korea from North Korea after deciding that “I could no longer support a government that allowed children to starve to death.”

Since then, thousands of North Korean residents in Japan have made the same decision. And that is bad news for the other Kim Jong Il — the one, no relation to the businessman, who has ruled North Korea since 1994.

For the last four decades, Japan’s North Korean residents have sent billions of yen in money and goods back home to their relatives and the Pyongyang regime. As more and more of them switch their allegiance to South Korea, they are choking off the flow of resources to an isolated and impoverished country already coping with trade sanctions.

While there is no way of knowing exactly how much they have sent, Katsumi Sato, director of the Modern Korea Institute in Tokyo, estimated that in the early 1990s, the annual total was some 60 billion yen ($600 million) in money and supplies.

“The cash and goods sent from Japan in the late 1980s were bigger than their national budget,” Sato said. “It was North Korea’s lifeline.”

Forced Labor

Japan was home to more than 600,000 Koreans in the 1970s, according to Japanese government figures. Roughly 330,000 were loyal to the South and 280,000 supported the North. They were the descendants of forced laborers Japan brought back from the peninsula during the era of colonial rule from 1910 to 1945, or Koreans who came to Japan looking for work.

South Korean residents now number about 400,000, according to the Korean Residents Union, a pro-South group. North Koreans are estimated at less than 50,000. The Chosensoren, an organization founded in 1955 to represent the interests of North Koreans who live in Japan, doesn’t disclose how many members it has.

One wave of North Koreans switched allegiance in the mid- 1990s after visiting their relatives and witnessing their suffering as a result of the famines that killed as many as 3 million people. Hundreds more switched when North Korea’s Workers Party secretary Hwang Jang Yop defected to South Korea in February 1997 and openly criticized Kim’s regime.

Demographic Forces

The shift reflects demographic as well as political forces. Older North Koreans are dying; some younger ones are becoming naturalized Japanese citizens. Other younger residents have fewer direct ties with their North Korean relatives and find other ways to spend their money.

One 27-year-old computer programmer dreamed of a honeymoon in Italy, then he hit a snag: He needed a fistful of time- consuming approvals and permits to travel. So he became a South Korean and heads to Italy this summer. He asked that his name not be used because he still has some loyalty to North Korea and feels uncomfortable about the switch.

Japan’s decade of recessions and slow growth has also taken a toll on the flow of cash and supplies sent to the homeland. Much of the money has come from North Korean residents running pachinko gambling halls, an industry with annual sales of 28 trillion yen ($231 billion), according to the Japan Productivity Center for Socio-Economic Development. But even these popular parlors have felt a financial pinch.

Seeking Protection

In April, a pachinko chain owned by a former North Korean resident and known as Daiei — no relation to Kobe-based retailer Daiei Inc. — filed with the Tokyo District Court for protection from creditors under the Civil Rehabilitation Law.

“With the slump in Japan’s economy, many North Koreans here lost their businesses,” Kazuhiro Kobayashi, who wrote “Kim Jong Il’s Big Laugh” and other works on North Korea, said in an interview. “I believe the amount of funds flowing to the North from Japan is less than a twentieth of what it was.”

One sign of North Korea’s woes: Last week, the Tokyo District Court ordered the Chosensoren to pay 62.7 billion yen to cover unpaid debt or face the seizure of its headquarters in lieu of payment.

In the past, the Chosensoren might have collected money from North Korean residents in such a situation. That’s now much more difficult, not only because of the North Korean business failures, but also because many residents criticize the organization for serving as a watchdog or even a branch office of the government in Pyongyang.

Medical Supplies

North Korea has also found it increasingly difficult to transport cash, medical supplies, clothing and other goods from its residents in Japan.

In the past, most of this cargo would travel on the North Korean vessel Mangyonbong, which docked on Japan’s northwestern coast. The ship also carried 90 percent of the parts for North Korean missiles, according to testimony in 2003 before a U.S. Senate subcommittee by a North Korean engineer who defected.

After North Korea test-fired several missiles over the Sea of Japan in July 2006, Japan banned the Mangyonbong from its ports. It banned all other North Korean ships after the underground nuclear test last October, as part of its economic sanctions.

The flow of North Koreans changing citizenship shows no sign of abating. In Tokyo alone, residents have been switching at a rate of roughly 100 a month since 2006, according to statistics from the South Korean consulate in Tokyo. In February 2007, the latest month available, 120 switched.

For Bae Soo Hong, the 46-year-old president of a construction company near Osaka, it was Kim Jong Il — the ruler, not the businessman — who made him decide to change.

When Kim acknowledged during a 2002 meeting with Japanese Prime Minister Junichiro Koizumi that North Korea had abducted Japanese citizens, “I knew it was time,” Bae said. He became a South Korean citizen this month.

Yonhap
Sohn Suk-joo
6/27/2007

North Korea warned Wednesday that Japan would “pay a dear price” if it continues to crack down on a pro-Pyongyang organization based there.

“If Japanese reactionaries keep clamping down on Chongryon in violation of our republic’s dignity and sovereignty, our anger at Japan will explode and they will have to pay a dear price for that,” said the Rodong Sinmun, the organ of the North’s ruling Workers’ Party. Chongryon is the shorter Korean name for the General Association of Korean Residents in Japan.

The angry statement comes a week after a Japanese court sanctioned the seizure of the premises of Chongryon’s headquarters due to its failure to repay debts. Since the group was founded in 1955, it has acted as the representative organization of North Korea in Japan. The two nations have no diplomatic relations.

Later in the day, four chapter leaders of Chongryon issued a joint statement accusing the Japanese government of having made an “unprecedented political terrorist act” against the group, said the Choson Sinbo, a Korean-language newspaper published by Chongryon in Japan.

The pro-North Korean group teeters on the brink of bankruptcy, as Japan’s Resolution and Collection Corp. (RCC) is to start procedures to confiscate the organization’s building and compound. RCC claims that the debt was part of nonperforming loans extended by 16 now-defunct credit unions associated with the group.

The RCC, which took over the nonperforming loans from the credit unions, claimed that Chongryon must pay 62.7 billion yen (US$508 million) since the money was purportedly handed over to Chongryon in an arrangement with the credit associations.

North Korean authorities protested the decision since the premises were the most likely candidate for North Korea’s embassy in Japan when the two sides agree to normalize diplomatic ties. The talks have bogged down because of their dispute over the past and abduction issues.

North Korea and Japan have never established diplomatic relations since the North was founded in 1948. The major hurdle to their normalization negotiations was how much and in what terms Japan should pay for its colonization of Korea from 1910 to 1945.

The court ruling comes as the embattled Chongryon has yet to ride out the shock after North Korean leader Kim Jong-il confessed in late 2002 that the communist country abducted 13 Japanese people to train spies in Japanese culture and language in the 1970s and 1980s.

Kim’s admission triggered a chain reaction of defections from the group. Now it claims about 80,000 members, although critics say about 30,000 are actively engaged in the group. The membership pales in comparison with 420,000 in the 1970s.

In an effort to prevent the premises from being seized, Chongryon tried in vain to sell the head office for 3.5 billion yen ($28.4 million) to an investment advisory company headed by Shigetake Ogata, a former chief of the Public Security Intelligence Agency.

But the court said the deal should be declared null and void because the ownership changed hands without an actual financial transaction.

“Chongryon chapter leaders and the Korean people are angry that Japan stigmatized Chongryon as a criminal organization by taking issue with the lawful business deal,” said the Choson Sinbo, which usually reflects the views of North Korea.