North Korean Economy Watch

Writing for the Washington Post (December 30, 2007; Page A27), Francine Uenuma covers the DPRK defector-run radio stations in the South which broadcast for audiences in the North.

Who is in this game?
All told, Seoul has three privately run radio stations targeting the North: Open Radio for North Korea, Radio Free Chosun and Kim’s [Free North Korea Radio], the only one run by defectors, who are helped by a committed South Korean staff. Washington-based Radio Free Asia and Voice of America also broadcast to the North.

Tactics:
[FNK’s] broadcasts avoid overtly political messages in favor of cultural subjects. While for some North Koreans “politics is a matter of life and death,” others turn away from it, he noted. “We want to broaden our base as much as possible. For that purpose our radio programs are soft.”

Kim Yun-tae, director of Radio Free Chosun, said his station takes a similar approach. “At first we were doing more propaganda broadcasting, but we changed our minds,” he said. Added Kyounghee An, the station’s international manager, “We don’t think we can cause the collapse of the regime directly. . . . We think after listening, people can compare their real situation to Kim Jong Il’s propaganda and can change their minds, step by step.”

Radio Free Chosun broadcasts North Korean domestic news as well as stories of escapes, revisions to North Korean textbooks and dramas about Kim Jong Il.

The two stations run by South Koreans have defectors on staff who try to make the broadcasts palatable to a North Korean audience, smoothing out political and cultural differences in language, for instance.

Who is listening?
Determining how many people are listening to the stations’ broadcasts is impossible. Though jamming is an impediment, improved signals and electricity shortages that stop the jamming limit North Korea’s ability to block broadcasts completely.

Funding:
The South Korean government, eager to encourage good relations with the communist capital, Pyongyang, discontinued most of the programs its Korean Broadcasting System aimed at the North. But it has taken a hands-off approach to the private stations, broadcasters say, allowing them to operate but offering no financial support. All three services indirectly receive about $200,000 in U.S. government funds annually through the Washington-based National Endowment for Democracy.

Korea Times
Ryu Jin
12/28/3007

Hyundai Asan, the South Korean operator of various cross-border economic projects with North Korea such as Mt. Geumgang tourism program, said Friday that its operating profit this year is estimated to exceed 10 billion won (roughly $10.6 million).

“We saw a great upturn for our profits this year thanks to an increase in the number of tourists to Mt. Geumgang,’’ a ranking company official said. “According to our tentative calculation, the operating profit is expected to surpass 10 billion won.’’

Hyundai Asan, which began another tour program to North Korea’s border city of Gaeseong this year, expects that the company’s annual sales will reach 300 billion won this year, a notable increase from 220 billion won last year.

According to the firm, some 350,000 people crossed the border to the North to visit the mountain resort on the eastern part of the peninsula, up from last year’s 240,000, largely thanks to the launch of a new route up the inner part of the mountain in June.

Company officials anticipate that the tours will further prosper next year, as it plans to start a fresh tour program to Mt. Baekdu on the border between China and North Korea next May.

Founded in February 1992, Hyundai Asan has suffered losses for a long time. But its large-scale investment in the poverty-stricken Stalinist state is paying off at last. In 2005, the company went into the black with 5.7 billion won in operating profit for the first time.

Yonhap
12/27/2007

South Korea plans to develop two resource rich regions in North Korea that can benefit both countries and fuel cross-border economic cooperation, the government said Thursday.

The blueprint calls for more funds to be funneled into North Korea so prospective developers can conduct geological surveys and compile detailed data for future reference, the Ministry of Commerce, Industry and Energy said.

Resource-poor South Korea imports most raw materials to operate its heavy industry-centered economy. Lack of social infrastructure and mining knowhow have prevented North Korea from fully developing resources.

(more…)

Yonap
12/24/2007

As many as 245 self-claimed North Korean defectors sought asylum in Britain in the first 10 months of this year, a U.S. radio station reported Monday.

A spokesperson for the UNHCR, Jennifer Pagonis, however, noted the British government needs to confirm whether they actually came from North Korea, the Radio Free Asia said citing a spokesperson for the office of the U.N. High Commissioner for Refugees (UNHCR).

Yonhap
Byun Duk-kun
12/19/2007

Lee Myung-bak, almost certain to be South Korea’s next president, will likely continue engaging North Korea through economic cooperation, but the extent should rely deeply on Pyongyang’s commitment to full denuclearization, unlike his predecessor who has often been under fire for granting unconditional aid to the North, analysts said Wednesday.

Closer ties with Washington will also be prioritized by the incoming administration of conservative Lee, who has criticized President Roh Moo-hyun for alienating the U.S. in dealing with the nuclear-armed communist North.

The entrepreneur-turned-politician says he can and will increase the communist nation’s per capita income to US$3,000 in 10 years, if Pyongyang completely abandons its nuclear ambitions.

“There will be no immediate changes to the country’s North Korea policy if the North continues to move down the path of denuclearization,” Kim Woo-sang, a political science professor at Seoul’s Yonsei University and a key advisor to the president-elect for security and foreign policy, said in an earlier interview with Yonhap News Agency.

Under a six-nation deal, North Korea has to disable its key nuclear facilities and disclose all its nuclear programs by the end of the year in return for economic and energy assistance and political benefits.

North Korea began disabling the Yongbyon complex early last month, but has yet to make a full declaration of its nuclear programs amid a five-year dispute between Pyongyang and Washington over the existence of a secret nuclear weapons program in the North.

The nuclear crisis erupted in late 2002 when the U.S. accused the North of running a uranium enrichment program. North Korea denies having any uranium program.

Seoul has regularly provided hundreds of thousands of tons of food and other humanitarian aid to the North since the historic inter-Korean summit between then President Kim Dae-jung and North Korean leader Kim Jong-il in 2000.

The Lee administration will continue to provide such assistance strictly based on humanitarian views, but economic cooperation between the divided Koreas will suffer significant reduction should the communist nation choose not to give up its nuclear weapons, Kim noted.

Further development or continuation of “ongoing economic cooperation projects, such as the Kaesong industrial complex, will be left to the market,” Kim said.

“The government will no longer try to encourage South Korean businesses to move into the industrial complex by providing subsidies and other benefits as it currently does, but will try to foster a better environment so the businesses and foreign investors will invest voluntarily,” he added.

At an October summit in Pyongyang, President Roh Moo-hyun and the North Korean leader agreed to launch various other reconciliatory projects, but Lee has said some of those projects will be subject to reconsideration.

Another visible change in policy towards North Korea will come in the way Seoul deals with the nuclear issue, the Yonsei professor said.

“Mr. Lee puts more weight on the six-nation denuclearization process than anything else, so the new administration will never try to take its own initiative or try to pressure China to convince North Korea to denuclearize,” he said.

While seeking more international cooperation in denuclearizing the North, Lee is expected to move closer to the United States, an ally Lee says has served as a capstone for Seoul’s security and economic development since the end of 1950-53 Korean War.

“The governments of Kim Dae-jung and Roh Moo-hyun neglected Korea’s relationship with the United States. China and Japan are important partners, but the next government will be moving in a different direction, focusing on Korea’s traditional relationship with Washington,” Lee had said in September.

The 65-year-old Lee has also noted his administration may try to push back the timing of taking back the wartime operational control of South Korean troops from the United States, which is currently scheduled to occur in 2012.

“As Mr. Lee has repeatedly said, there will be no renegotiation of the transfer of wartime operational control, but the scheduled timing of the transfer could become very sensitive depending on security conditions surrounding the Korean Peninsula in 2012,” said Kim.

Korea Herald
12/19/2007

Czech authorities have stopped extending visas of North Korean laborers in conformity with U.N. sanctions against Pyongyang and all will probably leave by year’s end, officials were quoted as saying by Associated Press.

Czech authorities stopped renewing residency permits for North Korean workers on Jan. 25 in line with U.N. Security Council Resolution 1718 adopted in October 2006 and laborers have gradually left since then, the Interior Ministry said in a statement.

The sanctions are aimed at punishing North Korea for carrying out its first nuclear test, on Oct. 9, 2006 _ a test that prompted international condemnation.

Among other things, the resolution allows cargo to and from North Korea to be stopped and inspected for prohibited goods, bans the import and export of certain military material, and freezes the assets of, and bans travel by, individuals and companies involved in the country’s programs to produce weapons of mass destruction.

On average, several hundred North Korean laborers have been working in various clothing and shoe factories in the Czech Republic since 2001, the ministry said.

The laborers have been leaving the country as their visas expired and all were expected to be gone by the end of the year, said Katerina Jirgesova, a spokeswoman for the Czech foreign police.

While 331 North Korean workers were still in the country in May, only 134 remained on Nov. 27, she said. Police have investigated allegations that the workers were used as a source of revenue for the North Korean government, she said, but she added adding that no wrongdoing could be determined. The allegations reportedly were made by a former North Korean diplomat and a major Czech labor organization.

None of the workers applied for asylum in the Czech Republic, she said.

There do not appear to be many North Korean laborers in other parts of Europe. The Italian labor ministry said it did not have a program of this nature. Officials in Portugal and the Netherlands said there were no North Koreans employed in their countries.

Olympic torch ‘going to N Korea’
BBC
12/16/2007

North Korea will host a leg of the 2008 Beijing Olympic Games torch relay, state media has reported.

The flame, which is due to pass through 22 cities in the four months before the Games, is expected to reach North Korean capital Pyongyang on 28 April.

Chinese and North Korean officials made the agreement in Pyongyang, said the official Korean Central News Agency.

A day earlier the torch is scheduled to pass through the South Korean capital of Seoul on its way north, say reports.

The torch, which will be lit at Olympia in Greece on 25 March, is due to cover five continents before the event begins on 8 August.

The planned 137,000-km (85,000-mile) relay route will include a trip to the top of Mount Everest.

The two Koreas have agreed to send a joint team of officials to the Beijing Olympics by train, as part of reconciliation efforts after their 1950-1953 civil war.

Coca-cola And Samsung Billboards to Appear in Pyongyang
Daily NK
Park Hyun Min
12/17/2007

Coca-cola and Samsung billboards, viewed by the North Korean regime as symbols of “American capitalism” and “Imperialistic culture,” will soon be visible in downtown Pyongyang just on April 28, 2008.

The China-based Huanqiu Times reported that the Beijing Organizing Committee of the 2008 Olympic Games (BOCOG), the Chosun (North Korea) Olympic Committee, and the Pyongyang People’s Committee signed an agreement to cooperate during the 2008 Olympic Torch Relay.

Samsung, Coca-cola, and Lenovo (a Chinese IT company), three of the main companies sponsoring the Beijing Olympics, will be allowed to advertise their products by cars when the Olympic Torch Relay passes through Pyongyang on April 28.

The three companies will be able to distribute pamphlets to North Korean citizens, but the extent of the content of these pamphlets will limited to the history of the respective companies’ sponsorship of the Olympic Games. Outdoor billboards will not be permitted along the relay path.

Additionally, with the exception of Shanghai-Volkswagen (the official car company of the 2008 Olympic Torch Relay), car companies will not be allowed to reveal their logos during the event.

The upcoming Torch Relay marks the first time in Olympic history that the Torch will pass through Pyongyang. Fifty-seven members of the Chosun Olympic Committee, six representatives from the three sponsorship companies, one member of the International Olympic Committee, and four Chinese diplomats will act as torchbearers in the event.

The relay will begin at the Tower of Juche Idea. Sights along the route will include the May Day Stadium, Kim Il Sung University, the Chosun-China Friendship Tower, the April 25 House of Culture, the National Liberation War Memorial Hall, Pot’ong Gate, the People’s Palace of Culture, the Pyongyang Gymnasium, Kim Il Sung Plaza, the Chollima Statue, the Arch of Triumph, and the Kim Il Sung Gymnasium. The total distance will be 20 kilometers.

The Pyongyang leg of the relay will begin after the South Korean leg is complete. The Torch will cross the DMZ by airplane and will be run through downtown Pyongyang from 2p.m. to 8 p.m. on the 28th of April.

Yonhap
12/16/2007

South and North Korea are still far apart over setting up joint fishing areas along their disputed western sea border but they have made some progress in establishing similar zones off their shared eastern sea border, a South Korean government report said Sunday.

In a statement posted on its Website, South Korea’s Unification Ministry said working officials of both Koreas made some meaningful headway on a proposal to open their shared eastern sea border to fishing boats from both sides.

“The South and the North agreed to actively cooperate to allow South Korean ships begin fishing at designated areas in the North Korean side of the East Sea within 2008,” the ministry said, outlining a six-point agreement reached at a two-day inter-Korean working meeting that ended at the North’s border city of Kaesong on Saturday.

The two Koreas have yet to agree on many specifics on the eastern sea border, including where to set up the proposed joint fishing areas, but they agreed on some details, including how South Korea should pay for its fish catch in the northern side of the border, it said.

North Korea, among other things, agreed to allow South Korean ships to pay in goods, not cash, the statement said.

The sides also agreed to hold a new round of working talks early next year to discuss Seoul’s provision of “fishing implements and gears that will constitute its fishing fees” and other related issues,” it said.

They have also agreed to begin construction on a joint fishery research and storage center in the North before the end of the year, for which a survey team of some 20 South Korean officials will travel to the North on Dec. 21-25, according to the agreement.

It’s unclear how such agreement on the eastern sea border would affect efforts by the two Koreas to ease tension along their acutely disputed western sea border, the site of two bloody naval clashes in 1999 and 2002.

During an October summit, South Korean President Roh Moo-hyun and North Korean leader Kim Jong-il agreed to turn the disputed western maritime border into a peace zone in which fishing boats of both sides would jointly operate.

High-level military officials of both sides met at the inter-Korean border village of Panmunjom last week to discuss the western sea border but failed to reach agreement.

North Korea insisted that the proposed joint fishing areas in the West Sea must be established south of the Northern Limit Line (NLL), an interim border unilaterally set by the American-led U.N. Command right after the 1953 end of the Korean War.

South Korea turned down the North’s demand, counterproposing that any joint fishing area in the area must conjoin waters on both side of the NLL.

Yonhap
12/11/2007

(NKeconWatch: Joshua over at OFK also has a contribution to this)

A senior U.S. senator introduced a resolution setting conditions for removing North Korea from the U.S. list of terrorism-sponsoring nations, one of the key incentives offered for Pyongyang’s denuclearization.

Sen. Sam Brownback (R-Kansas) submitted Resolution 399 on Monday and so far has three co-sponsors.

The resolution urges the administration not to lift the designation until it can be demonstrated that North Korea is no longer engaged in proliferation of weapons of mass destruction and no longer counterfeiting American currency.

It also demands proof that a North Korean ruling party bureau, believed to be running illicit financial activities including drug trafficking and counterfeiting, has been made inoperable.

The senator also demands that the terrorist-nation designation remain until all U.S. overseas missions have been instructed to facilitate asylum applications by North Koreans seeking protection as refugees.

North Korea was put on the list in January 1988, soon after its agents blew up a South Korean civilian aircraft. Brownback’s resolution demands North Korea’s accounting of Japanese nationals abducted by the North as well as of surviving South Korean prisoners of war.

“If the United States takes the step of removing North Korea from the terrorism list, let’s at least make clear the conditions for such a removal,” Brownback said, adding, “I question the merits of the State Department’s decision to remove North Korea from its terrorist list.”

“It is important that the United States sends a loud and clear message to the North Korean regime that we will remain vigilant,” he said.

Delisting North Korea is one of the key benefits the U.S. offered in return for Pyongyang’s disablement of its core nuclear facilities and full disclosure of its atomic programs, the steps toward full dismantlement agreed on by six nations — South and North Korea, the U.S., China, Russia and Japan.
  
Getting off the list would free North Korea from a number of restrictions prohibiting meaningful economic and political assistance and exchange from the U.S. and the international community.

In Seoul, a Foreign Ministry official expressed concerns the resolution, if passed, could undermine progress in the nuclear disarmament talks, but said it did not pose any immediate threats to the six-nation deal on the denuclearization of the North.

“Delisting North Korea does not depend on the resolution, but whether the North fully discloses its nuclear programs,” the official, who is deeply involved with the nuclear talks, said, asking not to be identified. “Obviously, nothing has been changed so far. The U.S. administration can still delist the North if and whenever it chooses to.”

Daily NK
Jung Kwon Ho
12/11/2007

Several sources in China have relayed that it is rumored North Korean authorities are planning to take extreme measures to prevent the sale of industrial products at the jangmadang (markets) next year.

One Chinese merchant, whom DailyNK met in Dandong, China on the 6th, said, “Rumors are circulating that a measure preventing all kinds of Industrial products from being sold in the jangmadang will be implemented next year, making Chinese merchants involved in trade between North Korea and China nervous.”

He informed that “In place of industrial products, only farm produce from the fields of homeowners will be allowed to sell in the jangmadang. Marine products that up to now have been selling in the jangmadang will only be made available at appointed marine shops, meat products at food shops, and industrial products at state operated stores.”

The Chinese source also maintained that, “There are quite a few overseas Chinese who, not knowing what will happen, have bought loads of industrial products with the idea that this might be their last chance, and they have brought them into the North.”

The North Korean authorities began unfolding a series of market regulations immediately following the Inter-Korea Summit in October. These included such policies as limiting the types of items for sale and imposing a minimum age limit on female merchants. However, limiting the sale of industrial products themselves, after having abolished permanent markets, can be seen as a means of returning to “agricultural markets,” where farmers traded only vegetables and a surplus of produce.

According to other Chinese merchants with whom DailyNK met in Dandong on the 3rd, “Under the name of the North Pyongan Party Committee in Shinuiju, a three-day meeting was held between the Secretaries of the Party and of the Army and enterprise managers, from November 20th to the 22nd.”

They informed that “The meeting was held to discuss whether to prohibit jangmadang operations and put people who have been trading in the market to work at enterprises or factories, since regular provisions will resume starting next year.”

The recent efforts to regulate the markets have been analyzed as means to revert the standard of societal regulation to that of the pre-90s by restoring the provision system and normalizing factory operations. However, such an extreme measure is likely to give rise to serious civilian opposition, so there are doubts as to whether or not it can be realized.

The North Korean civilians, before the mid-90s, relied on a complete provision system supplied by the State, which included the provision of goods such as soap, clothes and other necessities. However, after the food shortage, the national provision system completely collapsed. As a result, civilians began acquiring most necessities, goods and food items through the jangmadang.

However, agricultural markets, where miscellaneous cereals, vegetables and other agricultural items raised in home gardens were traded, existed around the time when North Korea’s provision system was in normal operation.

Following the execution of the “July 1st Economic Management Improvement Measure” of 2002, the North Korean government established general markets which brought simple agricultural markets out in the open in February 2003. Since then, individuals leasing stands from the city mercantile department have been able to sell all kinds of industrial products as well.

One source in Chongjin stated in a phone conversation on the 6th regarding the recent rumors, “If the sources are Chinese merchants, than the rumor is not likely groundless. A majority of citizens sustain their livelihoods through the jangmadang.”

He agreed that “It is highly feasible that measures to toughen the regulation of industrial products in the market will be executed.”