North Korean Economy Watch

KCNA
4/17/2007

General Secretary Kim Jong Il sent educational aid fund and stipends amounting to 238,000,000 yen to the General Association of Korean Residents in Japan (Chongryon) for the democratic national education of the children of Koreans in Japan on the occasion of the 95th birth anniversary of President Kim Il Sung. 

The educational aid funds and stipends sent so far by Kim Il Sung and Kim Jong Il to Chongryon in 153 installments total 46,006,223,000 yen.

KCNA
4/14/2007

Esmaeil Babaei Ragheb, Iranian charge d’affaires ad interim here, arranged a reception on April 13 on the occasions of the Day of the Sun and the 14th anniversary of Kim Jong Il’s election as chairman of the DPRK National Defence Commission.

Present on invitation were Yang Hyong Sop, vice-president of the Presidium of the Supreme People’s Assembly, Rim Kyong Man, minister of Foreign Trade, Jong Yong Su, minister of Labour, and officials concerned.

Staff members of the Iranian embassy here were on hand.

The Iranian charge d’affaires said in his speech that President Kim Il Sung who liberated the Korean people from the foreign domination made an immortal contribution to strengthening and developing the non-aligned movement.

He noted that the election of Kim Jong Il as chairman of the DPRK National Defence Commission provided a sure guarantee for the accomplishment of the revolutionary cause of Juche pioneered by Kim Il Sung.

The Iranian government and people extend full support and solidarity to the Korean people in their struggle against imperialism and for achieving the country’s reunification, he stressed.

Yang Hyong Sop in his speech noted that the revolutionary cause of Juche pioneered by Kim Il Sung has been successfully carried forward by Kim Jong Il, adding that the Korean people would wage a dynamic struggle under the Songun revolutionary leadership of Kim Jong Il.

He said that the friendly and cooperative relations between the DPRK and Iran provided by Kim Il Sung together with the top leaders of Iran have grown stronger under the deep care of the leaders of the two countries.

He noted that the Korean people would as ever boost the friendly and cooperative relations with the Iranian people in their efforts to reinforce the national defence power to cope with the U.S. high-handed and arbitrary practices and develop the national economy.

Daily NK
Kang Jae Hyok
4/16/2007

In commemoration of the anniversary of Kim Il Song’s 95th birthday (Apr. 15), North Korea has been preparing various spring festivities including the “Arirang” performance.

The number of foreigners visiting North Korea during this time is also expected to escalate.

Recently, the DailyNK confirmed through Chinese merchants that bribery and gifts had been exchanged between North Korean authorities. It is these during these seasons of Kim Il Song and Kim Jong Il’s birthday and the founding of the Workers Party and the Republic that bribes are most favorable.

For the past 4 years, Ma Il Su (pseudonym, 43) a Chinese merchant living in Jilian has been importing North Korean agricultural produce and herbal medicines to sell in China. In a telephone conversation with the DailyNK, he informed on the 12th, “I have prepared a special gift to give to North Korean authorities for when I enter the country on the 14th.”

He said, “On the whole, anyone trading with Chosun (North Korea) also offers gifts to them… The best offering is in the form of money.”

“Offering cash to the nation is the best but there are times when electronic goods are also given” he said.

Ma continued, “In order to trade in Chosun, you need the cooperation of authorities on your side” and said, “To charm the hearts of authorities, gifts must be given frequently. The best way to do this is by offering gifts at times of Kim Il Song and Kim Jong Il’s birthday.”

“You should go to the People’s Committee and offer the gifts to the chairman directly saying, ‘I sincerely pray for the Great Leader’s health and Chosun’s growth.’ Then they (the North Koreans) become ecstatically excited they do not know what to do” he said.

When asked whether or not gifts had to be offered to individual authorities Ma said, “You cannot trade if you do not offer bribes to authorities… Officials prefer cash as well as watches or electronic goods such as widescreen TV’s. In particular, they like watches made from South Korea.”

“I have already arranged for sheets of Chinese currency to give to individual authorities in timing with Kim Il Song’s birthday” he said and added, “Nowadays, offering bribes has become a norm in North Korea. There would be chaos if a gift was not offered.”

Ma said, “I am aware that my fellow tradesmen are offering gifts of similar nature” and estimated, “If we collect the amount of gifts offered by the Chinese, there should be quite a lot.”

Money given by Chinese merchants to the People’s Committee first reaches the respective local authorities of the Party → higher party authorities → central authorities in Pyongyang, and finally is offered as a bribe to Kim Jong Il. In the end, the money is donated into Kim Jong Il’s private fund and used for his personal pleasures.

Following the July 1st measures in 2002, North Korea-China trade has expanded significantly with hundreds of Chinese merchants filtering into North Korea everyday. In accordance with Ma, the number of people offering bribes to North Korean authorities seems to be considerably large.

Yonhap
4/16/2007

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

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

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

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

Private donations totaled $8,474 as of Thursday.

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

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

New York Times
Michael R. Gordon
4/15/2007

The Ethiopian government has denied that it violated United Nations sanctions by carrying out a secret purchase earlier this year of military equipment from North Korea.

The Central Intelligence Agency reported in late January that an Ethiopian-flagged ship had left a North Korean port and that its cargo probably included tank parts and other military cargo, according to American officials.

The purchase of tank parts would violate restrictions on dealings with North Korea imposed by the United Nations Security Council in a resolution adopted in October. The Security Council acted less than a week after North Korea tested a nuclear device.

The Bush administration decided not to press Ethiopia to reject the shipment, and the vessel was not inspected after it took its cargo to a port in Djibouti for overland transport to Ethiopia. Some American officials said the shipment was most likely a Security Council violation.

In a statement issued Friday, the Ethiopian Foreign Ministry acknowledged that it had received a cargo shipment from North Korea on Jan. 22, but asserted that it did not include prohibited items like tank parts.

“This shipment contained spare parts for machinery and engineering equipment and raw material for the making of assorted ammunition for small arms,” the Ethiopian statement read. “The United States Embassy in Addis Ababa might have been aware of Ethiopia’s importation of the said cargo from North Korea. “However, the fact is that Ethiopia did not purchase arms or any other item covered by Resolution 1718 under the contractual agreements,” the statement read, referring to the Security Council measure. Ethiopia said the shipment was carried out under the terms of several contracts that were signed with North Korea in June and was paid for in advance.

The State Department has declined to comment on the details of this episode.

Ethiopia purchased $20 million worth of arms from North Korea in 2001, according to American estimates, and American officials say this pattern has continued. Ethiopia has an arsenal of Soviet T-55 tanks and other Soviet-style equipment. The United States has sought to persuade Ethiopia to wean itself from its longstanding reliance on North Korea for inexpensive Soviet-era military equipment.

The United States has had close ties with Ethiopia. American officials say that Ethiopia was provided with American intelligence about the location of Islamist forces before its recent offensive in neighboring Somalia. On Jan. 7, American AC-130 gunships launched two strikes on terrorist targets from an airstrip inside Ethiopia, according to American officials. Ethiopia has said such reports are a fabrication.

Previous Washington Post Story below…

(more…)

Daily NK
Han Young Jin
4/13/2007
 
There are big three holidays falling in April at the same time: the 95th Kim Il Sung’s birthday (Apr. 15), the 75th foundation anniversary of the People’s Army (Apr. 25) and the 15th anniversary of Kim Jong Il’s ascension to the throne (Apr. 20). According to DailyNK sources, all North Korean cities are busy to preparing for Kim Il Sung’s birthday events, along with Army preparation for a large scale military parade in Pyongyang.

From mid-April to mid-May, the mass-performance “Arirang” will feature 100,000 students participating in the 25th “Spring Friendship Spring Festival” and other memorial events for Kim Il Sung. Other events will include the release of a documentary movie, “Being with the great military-first Leadership”, to commemorate the 14th anniversary of Kim Jong Il’s inauguration as the Chairman of the Defense Committee of North Korea.

Designed to inspire popular nationalism, the April events will occur on an unprecedented scale and will include the participation of the General Federation of Trade Union, the Kim Il Sung Socialist Youth League, the Union of Agricultural Working People, and the Union of Democratic Women.

The Choson Sinbo of Chongryon (the General Association of North Korean Residents in Japan) is creating a cheerful atmosphere through the release of an article, “the Solar Holiday (Kim Il Sung’s birthday, Apr. 15) in this year is the great fest for the winners.”

North Korean authority intends to take a triumphant stance due to the thaw in U.S. relations, the resumption of six party talks, and perceived diplomatic victories after the nuclear test. The 1998 national slogan, “The Construction of the Strong Prosperity Nation” is believed to have been accomplished this year because of the test.

Previously, military parades were used to emphasize tension between the U.S. and North Korea. However, the upcoming parade is intended to be a victory celebration of a win in confrontation against the U.S. In the past when North Korea has been the beneficiary of positive world opinion, it capitalized by strengthening its domestic surveillance and political education systems. The April events are in furtherance of their strategy to maintain military tension while simultaneously whipping up nationalistic, nuclear pride. 

Yonhap
4/14/2007

A festive mood was pervading North Korea Saturday as the birthday of the communist state’s late founder drew near, with a series of exhibitions and gatherings being held, the North’s state media reported.

Pyongyang has staged art, sports and dance events annually for the birthday of Kim Il-sung, which falls on April 15, and is also known as the Day of Sun. Kim died of heart failure on July 8 1994 at the age of 82, and his son Kim Jong-il took power afterward.

Art troupes from China, Russia, Japan, Kazakhstan, India and Indonesia staged performances in Pyongyang on Saturday, the third day of the country’s April Spring Friendship Art Festival, according to the North’s state media.

A flower exhibition for “Kimilsungia,” an orchid named after Kim, was opened Friday with the North’s and foreign officials in attendance. The exhibition will be run until Thursday.

The festive mood is expected to culminate when the North stages the pro-unification Arirang festival Sunday through May 20. It is one of the North’s major gymnastics events and is popular among both Western and South Korean visitors.

Foreign delegations also have arrived Pyongyang to celebrate Kim’s birthday, the state media reported.

An Indonesian delegation made a visit to the North’s Mansudae Assembly Hall on Friday and conveyed a present to the incumbent North Korean leader via Kim Young-dae, the North’s No. 3 leader. It also toured Mankyongdae, the birthplace of the late founder in a rural village near the North Korean capital.

A Russian delegation also paid homage to a Kim Il-sung statue at the Mansudae Assembly Hall, while a Mongolian delegation paid visits to art exhibition halls and other sites to commemorate the birthday.

Science Magazine
Vol. 316. no. 5822, p. 183
DOI: 10.1126/science.316.5822.183
Richard Stone
4/13/2007

In a dramatic new sign that North Korea is emerging from isolation, the country’s first international university has announced plans to open its doors in Pyongyang this fall.

Pyongyang University of Science and Technology (PUST) will train select North Korean graduate students in a handful of hard-science disciplines, including computer science and engineering. In addition, founders said last week, the campus will anchor a Silicon Valley-like “industrial cluster” intended to generate jobs and revenue.

One of PUST’s central missions is to train future North Korean elite. Another is evangelism. “While the skills to be taught are technical in nature, the spirit underlying this historic venture is unabashedly Christian,” its founding president, Chin Kyung Kim, notes on the university’s Web site (www.pust.net).

The nascent university is getting a warm reception from scientists involved in efforts to engage the Hermit Kingdom. “PUST is a great experiment for North-South relations,” says Dae-Hyun Chung, a physicist who retired from Lawrence Livermore National Laboratory and now works with Roots of Peace, a California nonprofit that aims to remove landmines from Korea’s demilitarized zone. To Chung, a Christian university is fitting: A century ago, Christianity was so vibrant in northern Korea, he says, that missionaries called Pyongyang “the Jerusalem of the East.”

The idea for PUST came in a surprise overture from North Korea in 2000, a few months after a landmark North-South summit. A decade earlier, Kim had established China’s first foreign university: Yanbian University of Science and Technology, in Yanji, the capital of an autonomous Korean enclave in China’s Jilin Province, just over the border from North Korea. In March 2001, the North Korean government authorized Kim and his backer, the nonprofit Northeast Asia Foundation for Education and Culture (NAFEC), headquartered in Seoul, to establish PUST in southern Pyongyang. It also granted NAFEC the right to appoint Kim as PUST president and hire faculty of any nationality, as well as a contract to use the land for 50 years.

NAFEC broke ground in June 2002 on a 1-million-square-meter plot that had belonged to the People’s Army in Pyongyang’s Nak Lak district, on the bank of the Taedong River. Construction began in earnest in April 2004. That summer, workers–a few of the 800 young soldiers on loan to the project–unearthed part of a bell tower belonging to a 19th century church dedicated to Robert Jermain Thomas, a Welsh Protestant missionary killed aboard his ship on the Taedong in 1866.

NAFEC’s fundraising faltered, however, and construction halted in fall 2004. The group intensified its Monday evening prayers and broadened its money hunt, getting critical assistance from a U.S. ally: the former president of Rice University, Malcolm Gillis, a well-connected friend of the elder George Bush and one of three co-chairs of a committee overseeing PUST’s establishment. “He made a huge difference,” says Chan-Mo Park, president of Pohang University of Science and Technology (POSTECH), another co-chair. South Korea’s unification ministry also quietly handed PUST a $1 million grant–more than it has awarded to any other North-South science cooperation project. This helped the school complete its initial $20 million construction push.

At the outset, PUST will offer master’s and Ph.D. programs in areas including computing, electronics, and agricultural engineering, as well as an MBA program. North Korea’s education ministry will propose qualified students, from which PUST will handpick the inaugural class of 150. It is now seeking 45 faculty members. Gillis and other supporters are continuing to stump for a targeted $150 million endowment to cover PUST operations, which in the first year will cost $4 million. Undergraduate programs will be added later, officials say. PUST, at full strength, aims to have 250 faculty members, 600 grad students, and 2000 undergrads.

PUST hopes to establish research links and exchanges with North Korea’s top institutions and with universities abroad. “It is a very positive sign,” says Stuart Thorson, a political scientist at Syracuse University in New York who leads a computer science collaboration between Syracuse and Kimchaek University of Technology in Pyongyang. “Key to success will be achieving on-the-ground involvement of international faculty in PUST’s teaching and research.”

Some observers remain cautious, suggesting that the North Korean military could use the project to acquire weapons technology or might simply commandeer the campus after completion. A more probable risk is that trouble in the ongoing nuclear talks could cause delays. At the moment, however, signs are auspicious. Park, who plans to teach at PUST after his 4-year POSTECH term ends in August, visited Pyongyang last month as part of a PUST delegation. “The atmosphere was friendly,” he says. “The tension was gone.” The Monday prayer group continues, just in case.

Choson Ilbo
4/12/2007

Last year a Chinese company took a 51-percent stake in Hyesan Youth Cooper Mine in Yanggang Province, North Korea. Hebei-based Luanhe Industrial Group now has the right to develop the mine for the next 15 years.

North Korea also sold a 50-year development claim to the Musan iron mines, Asia’s largest open-air mine, to China’s Tonghua Iron & Steel Group. Since 2006, North Korea has sold the rights to develop more than 10 mines to Chinese firms.

KDB Research Institute, an affiliate of Korea Development Bank, has raised concerns with a report released Wednesday that details China’s intensive investment in North Korean natural resources. According to the report, since 2002 China has invested US$13 million (US$1=W932), more than 70 percent of its total investment in North Korea, in iron, copper and molybdenum mines.

The major investors come from the three northeast provinces of Heilongjiang, Jilin and Liaoning. They have moved the focus of their investment from small-scale, commercial opportunities to strategic deals to secure energy resources, the report said.

According to the report, China’s Wukang Group bought the rights to dig the Yongdeung mine, North Korea’s largest hard coal mine, and another Chinese company invested in a North Korean project to develop an oil field in the West Sea. The North has also allowed Chinese fishermen to fish off the coast of Wonsan, a North Korean port city on the east coast, in return for 25 percent of the catch.

Since North Korea lacks funds while China suffers from a shortage of natural resources the two are forming joint development projects, said KDB Research Institute researcher Chung Eui-jun, the writer of the report.

Andrei Lankov, a North Korea expert at Kookmin University in Seoul, said in the Wall Street Journal last July that the Chinese government seems to have made a strategic decision to encourage Chinese firms to invest in North Korea as a way to maintain its influence with its long-time ally in the post-Kim Jong-il era.

It will probably be on display in the International Friendship Exhibition soon…

Gift to Kim Jong Il from American
KCNA
4/10/2007

General Secretary Kim Jong Il was presented with a gift by the visiting governor of New Mexico State, U.S. 

Governor Bill Richardson handed the gift over to Kim Yong Dae, vice-president of the Presidium of the Supreme People’s Assembly of the DPRK, Tuesday