North Korean Economy Watch

I do not usually enjoy reading about people’s visits to the DPRK, but I actually learned a few details from this one.  According to the Wall Street Journal:

For all that, Pyongyang doesn’t actually shut down when the sun sets. To serve its trickle of visitors, the city offers its own version of nightlife. Besides foreign envoys shuttling in for nuclear discussions and businesspeople looking to make deals, about 2,000 Western tourists come to Pyongyang each year, many, like me, to attend the famous, stadium-size show called Arirang. It’s a spectacle of mass gymnastics, dance, military marching and incredible animated pictures created by thousands of people flipping colored cards.

The number of visitors could edge up. According to Koryo Tours, a Beijing-based agency specializing in trips to North Korea, the government has notified it that more Americans will be let in during the non-Arirang season (the show generally runs from August to October).

For tourists, the days are filled with sights that have what ruler Kim Jong Il calls “high ideological content.” (A government-supplied guide and minder comes along, day and night.) High on the list is the Mansudae Grand Monument, boasting a massive statue of the country’s late founder, Kim Il Sung, where visitors lay flowers and line up to bow in an orderly fashion. Another must-see is the USS Pueblo, a U.S. Navy intelligence ship captured off the coast of North Korea in 1968; conducting the tour the day we visited was an elderly man dressed in navy whites who was one of the sailors in the original boarding party. And then there’s the underground train system, with its mosaics of peasants revolting and huge chandeliers meant to look like stars.

But there’s also the unexpected, like the Pyolmuri Teahouse, a Western-style cafe whose name translates roughly as “constellation of the stars.” Opened in 2005 with the help of the nonprofit Adventist Development and Relief Agency, the cafe — equipped, as it proudly points out, with German-made ovens and Italian pasta-making machines — offers a tasty apple pie, a surprisingly decent cappuccino and a great chance to people-watch. Egyptian telecommuncations provider Orascom brought mobile technology to North Korea last year, and now demurely dressed teenage girls are accessorizing their hanboks, or traditional Korean dresses, with platform shoes and colorful, decorative, straps on their cellphones. (We tourists had surrendered our phones at the airport, along with our passports; they were returned just before we boarded the return flight.)

As evening approaches, take a stroll (minder in tow) along the deserted embankment of the Taedong River to Kim Il Sung Square. From this vantage point, you can photograph some picture-postcard views while it’s still light. An ideal place to watch the sunset is from the Tower of the Juche Idea, named for the country’s official ideology, a word typically translated as “self-reliance.” The 170-meter tower, built on the occasion of Kim Il Sung’s 70th birthday, is said to contain one white stone block for each day of his life to that point. (He died in 1994, at the age of 82, and while his son is now ruler, the elder Kim is “eternal president.”)

From the top there’s a panoramic view over the capital out to the surrounding mountains. The lack of cars on the roads — vehicles aren’t freely available for purchase — and scarcity of heavy industry means the air is remarkably clear.

Then it’s time to think about where to have dinner. Don’t dawdle; most Pyongyang eateries generally close by 9 p.m. The choices range quite widely, from hot pot at Chongryu Hot Pot restaurant to roast duck at Pyongyang Duck Barbeque Restaurant No. 1to Macanese fare such as egg tarts at the imaginatively named Macau Restaurant.

Whatever you pick, forget dining by candlelight. Here, it’s more likely to be by flashlight. On my first night, just as my tour group was tucking into a typical Korean meal of naengmyon (cold noodles) and bulgogi (barbecued beef) at Mangyongdae KITC restaurant, the lights went out. But the waitresses have come to expect power outages, and before we knew it they were coming around with huge flashlights, one for each table. The room lights still hadn’t come back on by the time we left about an hour later.

Checking out the city’s after-dinner scene is easy: There’s one nightclub and one casino, both located in the same place, the 1,001-room Yanggakdo Hotel, one of about a dozen hotels where foreigners are allowed to stay. (All the tourist hotels do offer some evening activities — like a karaoke bar — but the Yanggakdo is the place to be.) You won’t see any locals here; the entertainment venues are off limits to North Korean citizens.

Start at the aptly named Revolving Restaurant, also known as the Swivel Restaurant, on the 47th floor. It has all the glamour of a 1980s airport lounge, but still attracts businesspeople and Russian exchange students. Grab a seat by the window and admire the lack of city lights as you circle around. Order a serving of soju. Traditionally made from rice, although sometimes also from acorns, it’s the national liquor.

Less-adventurous travelers could sample some of the country’s homegrown beer. The best-known brands are Ryongsong, Ponghak and Taedonggang. Taedonggang, which last year was bizarrely the subject of an advertisement on state TV, is made using equipment that once produced the likes of Brown’s Bitter and Mann’s Best Ale in Trowbridge, England. North Korea bought the shut-down brewery from its U.K. owner and had it dismantled and shipped over in 2000. The restaurant stays open until 1 a.m. or 2 a.m, or when the last customer leaves.

Sufficiently mellowed, head for the nightclub on the lower ground floor. You can groove to the beat of familiar pop tunes from the ’70s and ’80s (was that the Bee Gees'[nbsp ]”Stayin’ Alive,” or too much soju?) until about 3:30 a.m. if there’s enough business; otherwise the staff close the doors at about 1:30 a.m.

If you’re still not ready to call it a night and you’re feeling lucky, pop next door to the Egypt Palace casino. Replete with slot machines and tables for card games including blackjack, the casino is generally open until 4 a.m. But if you aren’t staying in the hotel, how long you can play depends on what kind of deal you can strike with your minder.

After that, there is only the 7 a.m. “workers’ siren,” a citywide wake-up call. It might serve to tell you whether you had too much soju.

On your last day in Pyongyang, by the way, brace yourself for one final, unexpected spending opportunity, befitting a state eager for hard currency. We’d already experienced one big earner, the shop selling souvenir stamps (such as an envelope bearing a Mona Lisa stamp, postmarked on the day of issue, about $7) and hand-painted propaganda posters (such as one showing flying pens attacking former U.S. President Richard Nixon). Now some tourism officials rushed onto our airport-bound bus with something more modern: videos of our three-day stay, going for just under $30. I couldn’t resist.

Courtesy of the advertising department of Korea International Travel Co., the 45-minute video compact disk features me and my 24 traveling companions as we played tourist, drinking beer at lunch and riding the escalators of the underground-train stations. These scenes are interspersed with footage of 80,000 performers at the Arirang mass games, and the whole thing is set to a rousing soundtrack mixing modernized folk songs, swelling orchestral passages and the worst elevator music I’ve ever heard.

Thankfully, there is no record of my night out. At least some things that happen in Pyongyang, stay in Pyongyang.

Couple of extra notes:

1. The Pyolmuri Cafe is the first place in Pyongyang to offer pizza.  They were delivering to the Koryo Hotel before the much publicized Italian Food Restaurant opened on Kwangbok Street.

2. Were is the Macao Restaurant?  Is that in the Yangakdo Hotel?

3. Where is the Mangyongday KITC restaurant?

Northeast Asia Matters posted a very helpful background paper on the Tumen Area Economic Development Project. According to Northeast Asia Matters:

Many in Northeast Asia wish to see the Tumen Basin develop into a place for economic cooperation and competition. One such plan is the Greater Tumen Initiative (GTI), formerly known as Tumen River Area Development Project (TRADP), being carried out under the auspices of the United Nations Development Programme (UNDP). The 20-year 80 billion USD plan calls for the creation of port facilities and transportation infrastructure in the region to support a multinational trading hub. Countries participating in the GTI are China, Mongolia, North Korea, Russia and South Korea.

The goal of GTI is to make the area into a free economic zone for trade to prosper and attract investment into the area. For China, the project would give traders in Northeast China easier access to major international ports without having to circumnavigate the Korean Peninsula and thus stimulating growth in China’s northeast rustbelt. For Russia, the project would give the ability to better exploit resources in Siberia and allow easier access to North Korea’s resource-rich hinterland; the area just to the south of the Tumen contains reserves of oil, minerals, coal, timber, and abundant farmland.

Development of the Tumen River area and North Korea’s participation in this project means inflow of hard foreign currency, improvements in infrastructure, and possible increase in industrial capacity. North Korea, with its bleak economy, therefore, will most likely continue to support the development of Tumen River area and increase its future involvement in the project as it seeks to break the economic isolation and hardship it has suffered since the collapse of most of its communist allies and the implementation of international sanctions.

Read the full paper here.

Institute for Far Eastern Studies (IFES)
NK Brief No.10-01-29-1
2010-01-29   

The director of the (North) Korea Institute of Social Sciences has publically stated that the shocking currency reforms announced last November were aimed at filling the state’s public finance coffers.

In an interview for the Choson Sinbo, a newspaper distributed by the pro-North ‘General Association of Korean Residents in Japan,’ director Kim Cheol Jun revealed, “[last year’s] currency exchange program in [North Korea] was effectively carried out…through the currency exchange, socialist economic management principles could be better realized and a public finance foundation was prepared on which leaping advancements in the lives of the people will be achieved.”

Many experts in South Korea and abroad had speculated that the North’s objective in revamping its currency was to boost public coffers, but this was the first time that anyone from North Korea had publicly alluded to such goal. Director Kim stated that last year was a year ‘carved into history’ as the year in which the nation was turned around toward the realization of the goals set for 2012, noting that new seeds had been developed to boost crop yields, and that double- and triple-cropping as well as improved potato and bean crops had been accomplished.

Director Kim also stated that a decisive turn-around had been made in resolving food shortage problems, noting the successful development of Lyosell as one example of improved production in North Korea. Lyosell is a silk-like material made from wood pulp transformed into cellulose, and is softer and more hygroscopic than cotton, yet almost as strong as polyester.

Director Kim added that last year also saw the completion of the Yeoungwon Powerplant, the Yeaseong River No. 1 Youth Powerplant, and the Keumya River Powerplant, as well as the installation of Computer Numerical Control (CNC) systems in the Taean Heavy Machinery Complex, the Cheollima Steel Complex, and the Hyecheong Construction Machinery Factory.

Following the currency reform, there was a total lack of policy to stabilize the lives of the North Korean people, and the ban on foreign currency, closing of markets and other control measures only pushed residents to the brink. On December 28, North Korean authorities released a memorandum completely banning the use of foreign currency, and since the beginning of the new year, markets throughout the country have been closed, causing people in the North to turn to barter in order to obtain food. However, the schedule for the closing of markets varies by region, and the state authorities have been unable to enforce state-set pricing as the government has been faced with more than a little resistance to the currency reforms.

Michael Rank

I posted last year about a British Korean War pilot who is buried in North Korea. This got me interested in MIAs (missing in action) in the Korean War more generally, particularly Americans as there was in the 1990s rather surprisingly a joint US-North Korean programme to recover their remains.

This Clinton-era project foundered after a few years, not at all surprisingly, but there are now, equally surprisingly, signs the North Koreans want to revive it.

Admiral Robert F. Willard, the head of U.S. Pacific Command, said on Jan 27: “We’re going to enter into discussions with [North Korea] [about MIAs]. That is what we know right now.”

“They are willing to talk about it and we’re willing to address the particulars with them.”

“It’s a complex problem. We’ve been in (North Korea for recovery missions) before, and it appears that we’re being invited to consider going back again,” Willard told reporters at Camp Smith, Hawaii, according to the Honolulu Advertiser. “It’s something that we’ll take seriously and we’ll enter into dialogue with them and find out where it will lead.”

No date has been agreed on restarting the search for the remains. More than 8,100 Americans remain unaccounted for from the Korean War, according to the Department of Defense.

During Operation GLORY in 1954, North Korea returned the remains of over 2,000 Americans, the Department of Defense says .

“Between 1954 and 1990, the U.S. was not successful in convincing North Korea to search for and return additional U.S. remains,” the Defense Prisoner of War/Missing Personnel Office (DPMO) states on its website.

“However, from 1990 to 1994, North Korea exhumed and returned what they claimed were 208 sets of remains. Unfortunately, their records and recovery methods have hampered U.S. efforts to identify most of these. The North Koreans co-mingled the remains and the associated personal effects. These difficulties underscored clearly the need for joint field activities in which U.S. expertise would guide the recovery process and improve the identification results.”

Larry Greer, director of public affairs of the DPMO in Arlington, VA, confirmed to me that the North Korean army “informed the United Nations that they were willing to talk about remains recovery operations. That was at a Panmunjom meeting on the 26th [Jan], our time. The U.S. has not yet responded.”

The US military newspaper Stars and Stripes last year quoted a US Defense Department anthropologist who had taken part in the hunt for MIA remains in the North as saying he was frustrated that the operation north of the border had been suspended.

“I am always disappointed when politics interfere with human rights and bringing closure to families whose relatives died in Korea so long ago,” said Jay Silverstein during a search for remains in South Korea close to the border with the North.

He said he hoped some day to return to North Korea to continue to search for the remains of U.S. service personnel. “I found the North Koreans very pleasant to work with,” said Silverstein, who was overseeing the excavations in Hwacheon county about eight miles from the border with North Korea.

“My experience was very positive. It gave me a lot of hope for the future … that relations between the North and the South and the West and the rest of Asia will someday be improved.

“I found [the North Koreans] to be very reasonable people. Very friendly. We could sit down and have a beer, or smoke a cigar, and talk. It was quite pleasant,” he added. [Surely the first time a US military official has ever said anything nice about North Koreans? Ed]

Apart from the suspended agreement with North Korea, the United States reached an agreement with China in 2008 “to formalize research in Chinese archives on Korean War POW/MIA matters.”

The Chinese side seems to have been reluctant to share much information with the Americans so far, but the Chinese news agency Xinhua reported last October that “Chinese military archivists have identified more than 100 documents that could lead to the repatriation of the remains of the United States personnel who disappeared during and after the Korean War”.

It added that “China’s People’s Liberation Army (PLA) Archives Department has been combing more than 1.5 million archives of the then People’s Volunteer Army (PVA), the Central Military Commission (CMC) and the PLA headquarters during the Korean War.

“Archivists have given at least four valuable archives found in the first 10 percent to the Defense Prisoner of War/Missing Personnel Office (DPMO) of the U.S. Department of Defense.”

The Chinese report mentioned how archivists had located the site where a U.S. bomber crashed in 1950 in the southern province of Guangdong. “After visiting the site and interviewing 19 witnesses who helped them identify the burial site of U.S. crew, they believe the possibility of finding the remains is high,” it added.

The DPMO’s Greer said that “We are making slow steady progress” in the joint archive project.

He said that in September 2009 the US hosted six PLA archivists for annual discussions and to review arrangements, and that the archivists provided additional information on the Guangdong crash site which was part of their annual report in June 2009.

In October 2009, General Xu Caihou 徐才厚, vice-chairman of the PLA’s Central Military Commission, presented four Chinese-language documents to Defense Secretary Robert Gates during a visit to Washington.

“The documents concerned the Guangdong site and a F-86 Korean War crash site in China about which we were already aware.We have requested permission to investigate the Guangdong Province crash site in April this year,” Greer told me in an email.

“At the September 2009 meeting we also discussed amending our arrangement to facilitate the transfer of actual documents from the PLA archives to us and to permit joint PLA archives-DOD accounting community remains recovery work in China. The amendment process is underway now, but not final,” he added.

The South Koreans, who lost tens of thousands of soldiers in the war, would also like to hunt for their remains in the North.

President Lee Myung-bak said in a New Year’s address this would be an appropriate way to mark the 60th anniversary of the start of the Korean War.

But relations between the two Koreas are so frigid that I would lay a much bigger bet on the US search for MIAs restarting than on a similar agreement being signed between Pyongyang and Seoul.

With many thanks to Daily NK for drawing my attention to North Korea’s interest in reviving the MIA search.

The US has rejected the DPRK offer.  According to Reuters:

The United States on Thursday rebuffed a North Korean offer to reopen talks on finding U.S. soldiers missing since the Korean War, saying Pyongyang must first resume discussions on ending its nuclear ambitions.

According to Yonhap:

A diplomat at the North Korean Embassy in Ethiopia defected to South Korea late last year after seeking asylum at the South Korean Embassy in the African country, an informed source said Tuesday.

The 40-year-old North Korean man, identified only by his surname of Kim, stormed into the South Korean embassy in October and spent several weeks there before arriving in Seoul in November, the source said, asking not to be identified.

The relationship between the DPRK and Ethiopia goes way back…to some dark days in Ethiopia’s history. 

Here are a few previous posts on the DPRK-Ethiopia relationship

Read the Yonhap story here:
N. Korean diplomat based in Ethiopia defects to S. Korea: source
Yonhap
1/26/2010

(* = assist from the US Navy)

DPRK sailors (or DPRK flagged ships) have come under attack from Somali pirates three times since October 2007. 

In the first attack, the DPRK ship overcame the pirates with the assistance of the US Navy. More here. 

In November 2009, a North Korean crew was taken hostage by Somali pirates. I still don’t know what happened to them, but I hope they were released safely. More here. 

This week Josh points out an AP story about a third attackon a Yemeni-owned, DPRK-flagged vessel:

The U.S. Navy says it overtook a suspected Somali pirate skiff that tried to attack a commercial ship in the Gulf of Aden.

A Navy statement issued Sunday says a security team aboard the merchant vessel Napht Al Yemen 1 repelled the Jan. 20 pirate attack without U.S. help.

The USS Porter stopped and boarded the pirate skiff later that day.

The commercial ship is Yemeni owned but sails under a North Korean flag.

The incident marked a rare example of the U.S. military aiding North Korea, a reclusive rogue nation.

Piracy is among the fastest ways to make money in Somalia, a nation plagued by war and no functioning government.

Somali pirates seized 47 vessels last year. They currently hold about 200 crew members hostage.

According to the AFP:

A South Korean company said Tuesday it is planning a joint-venture factory in a free-trade zone in northeastern North Korea, the first such investment by Seoul in the faltering project.

Food processor Merry Co said Pyongyang last month approved its partnership with state-run Korea Gaeson General Trading Corp in the Rason zone near the North’s border with China and Russia.

“We’re going to have a first joint venture between the two Koreas in Rason,” Merry president Chung Han-Gi told AFP.

The North this month upgraded the status of the zone in an attempt to invigorate anaemic foreign investment there.

Chung said his company would invest 60 percent of the 7.5 million dollar cost of the new plant while its North Korean partner would put in 40 percent.

He said he would this week ask the South’s unification ministry, which must authorise all cross-border contacts, to approve the joint venture.

The communist state designated the Rajin-Sonbong Economic Special Zone — later renamed Rason — in 1991, its first such project. But little foreign investment materialised and senior officials who headed the project were reportedly sacked.

In recent years the North has begun trying to revive it, signing an accord with Russia to rebuild railways and the port there. China has also been exploring investment opportunities in the city.

The North’s leader Kim Jong-Il paid his first visit to the zone last month and state media said later that parliament has designated Rason as a municipality to upgrade its status.

South and North Korea have a joint-venture industrial estate at Kaesong near their border. Its operations have often been hit by political tensions, but the two sides were to start talks Tuesday on ways to develop it.

Chung said his firm’s joint venture at Rason, which would have some 200 North Korean employees, plans to produce canned and processed food including tuna for exports.

Merry, which also has a factory in Shanghai, will send Chinese engineers to Rason next month to install production facilities.

The Choson Ilbo adds some interesting details:

This is the first time that Pyongyang has allowed for direct business collaboration, set to take place between North Korea’s Gaeson General Company and the South’s Chilbosan Merry Joint Venture.

The firms are slated to split investment 60/40 and will work together to process and export canned marine and agricultural products starting in March.

UPDATE 1: As reader Gag Halfron points out, this is not the first DPRK-RoK joint Venture. Remember Pyonghwa Motors and Pyongyang’s fried chicken restaurant?

UPDATE 2: In the comments, Werner notes the following: http://www1.korea-np.co.jp/pk/149th_issue/2000101405.htm

Read the full articles below:
N.Korea OKs joint venture with South in trade zone
AFP
1/18/2009

First Inter-Korean Joint Venture to Be Established
Choson Ilbo
1/20/2010

 
Click on images for larger versions

According to Yonhap:

China will mend a rail link between one of its border cities and a North Korean port, a source familiar with North Korean affairs said Sunday, a move that indicates stronger economic ties between the two allies.

North Korea and the municipal government of the Chinese city of Tumen, which borders the North, have recently agreed to repair the railway linking the city with North Korea’s northeastern port of Chongjin, the source said.

Additional Information: 

1. Above I have posted Google Earth images of the China-DPRK border area and a simple map of the DPRK’s North Eastern railway system.

2. Long-time readers will remember that Russia recently installed Russian-gague railway track from the North Korean border to the city of Rason (Rajin-Songbon). It looks like both Russia and China get their own ports in the DPRK.

3. Chongjin is also home to both Russian and Chinese consulates. 

According to this SDC web page:

Following a decision made by the Swiss Parliament, the SDC’s special programme in North Korea will be discontinued at the end of 2011.

There was not much in the media on this, but a reader pointed me to this article:

Switzerland is standing by a decision to stop development aid to North Korea, which has focused on improving food security in the internationally isolated country.

The foreign ministry says it now has a strategy for the withdrawal of Swiss development workers from the communist country by the end of 2011.

In 2008 the government approved a motion by parliamentarian Gerhard Pfister demanding a halt to development aid in response to North Korea’s continuing nuclear ambitions.

“The atomic weapon programme violates international agreements. North Korea has shown itself to be utterly uncooperative, despite international efforts. It threatens to destabilise the region,” the motion said.

Although Switzerland has no official representation in the communist country, diplomatic relations were established in 1974.

The Swiss Agency for Development and Cooperation (SDC) has had an office in the capital, Pyongyang, since 1997 [Possibly located here]. According to the motion, the SDC justified its work there by saying that “supporting the reform process” should improve food security. The SDC cited a “tentative opening” of the country as a success.

Pfister maintains that today North Korea is no longer showing a “tentative opening” – rather the opposite.

The SDC’s main priority in the country has been aid projects aimed at improving the efficiency and sustainability of North Korean agriculture.

Consistent policy?

The central question is whether it is wiser to isolate a totalitarian regime or to cooperate with it. The attitude of the Swiss parliament and government is clear: stop development aid.

But is the issue simply black and white? On December 21 Switzerland celebrated – in the presence of the North Korean foreign minister – the 35th anniversary of diplomatic relations.

On December 28 Blaise Godet, the Beijing-based Swiss diplomat responsible for North Korea, told the Neue Zürcher Zeitung that Switzerland had nurtured a consistent policy of engagement and political dialogue. “We want to contribute to solutions,” he said.

As for the ending of aid at the end of 2011, foreign ministry spokesman Erik Reumann told swissinfo.ch that “the SDC would follow the decision of the government and parliament. A dismantling plan exists that will guarantee a well-organised withdrawal from North Korea”.

Similarities with Switzerland

While the Swiss government and parliament want to end development aid to North Korea, former justice minister Christoph Blocher, a leading figure in the rightwing Swiss People’s Party, has written in detail about his visit to the country – on a hiking holiday.

The self-confessed anti-communist noted in the Weltwoche weekly magazine in November that “one thing North Korea and Switzerland have in common is that both countries want to keep their autonomy and are working for a safe future”.

In Pyongyang Blocher said he came across “normal conditions”, but admitted that “we only had access to those areas and streets considered presentable”. Nevertheless, he continued, “the streets are tidy and the Korean people are all clean and decently dressed, and go everywhere on foot. People walk”.

But Blocher agreed that the food situation was unsatisfactory.

The Swiss Agency for Development and Cooperation (SADC) web page is here.Here is a report they helped produce: Tools for building Confidence on the Korean Peninsula.

Institute for Far Eastern Studies (IFES)
NK Brief No.10-01-19-1
2010-01-19

Last year, despite the impact of the economic recession, North Korea’s second nuclear test and other issues hindering inter-Korean exchanges, the previously sharply shrinking value of North-South Korean trade appeared to steady.

According to a report from the South Korean Customs Administration released on January 18, inter-Korean trade last year was down 8.5 percent from the previous year, amounting to 1.66608 billion USD. Exports to North Korea were worth 732.62 million USD, while 933.46 million USD worth of goods were brought into South Korea, giving Seoul a 200 million dollar trade deficit. Inter-Korean trade hit its lowest point last year in February (100.89 million USD), but since then showed slow-but-steady growth, hitting 173.18 in September.

In the aftermath of last year’s economic recession, together with the North Korean nuclear test, naval clashes in the West Sea in the area of the Northern Limit Line, etc., there were many difficult issues in 2009, but as inter-Korean trade numbers recovered in the fourth quarter, tensions eased slightly. Despite strained political tensions between the two Koreas, trade seemed not to be seriously affected, as DPRK goods were offloaded from a North Korean ship at Incheon Harbor and replaced with silica used for metal casting just six days after a clash between North and South Korean naval ships.

While growing trade is positive, this is the second year in a row South Korea has recorded a trade deficit with the North. In 2008, Seoul’s cross-border imports exceeded imports by 53.96 million USD. With Lehman Brothers’ collapse in September 2008 and the economic stagnation that followed, the South continued to record trade deficits for 15 straight months, until November of last year.

In December 2009, South Korean trade was back in the black (23.91 million USD) for the first time in 16 months. Looking back over time, it can be seen that inter-Korean trade has improved considerably over the years, recording a mere 705.68 million USD in 2004, 1.08872 billion USD in 2005, climbing to 1.3796 billion in 2006 and 1.79494 billion USD in 2007, and 1.82078 billion USD in 2008.

The import of North Korean sand, mushrooms, and smokeless charcoal briquettes in October 2009 required the permission of the South Korean government. This reflects Seoul’s more strict controls over management and oversight of inter-Korean trade following the sanctions and heightened concerns over cash deliveries to Pyongyang after its second nuclear test on May 25, 2009. Since the nuclear test, the South Korean government has limited the import of North Korean goods to only those that could ease losses being suffered by South Korean manufacturers.

According to the South Korean Ministry of Unification, among North Korean exports to the South in 2008, sand was the largest (according to value) export, with charcoal ranking ninth and (pine) mushrooms ranking eighteenth. 

Yonhap offered a short blurb: 

Trade between South and North Korea declined 8.5 percent on-year in 2009 due mainly to the worldwide economic slowdown that sapped demand and investments, a government report said Monday.

The Korea Customs Service (KCS) said inter-Korean trade reached US$1.66 billion last year, down from a record high of $1.82 billion tallied for 2008.

Read the full article here:
Inter-Korean trade falls off 8.5 pct in 2009
Yonhap
1/18/2009