North Korean Economy Watch

According to the AFP:

North Korean refugees struggling to adapt to a bewildering new life in South Korea are increasingly getting sucked into insurance frauds as their first taste of capitalism.

Insurance scams have for years been common in the South, and fraudsters in recent years have targeted the refugees as sometimes unwitting accomplices.

“Sometimes defectors get involved because they don’t know how the insurance system works. They just have no idea what they are doing is wrong,” an official at the Hanawon resettlement centre told AFP.

All North Koreans who flee their impoverished communist homeland for the South must spend their first 12 weeks at the centre, which lies about 80 kilometres (50 miles) south of Seoul.

It offers job education, information on South Korea and basic survival skills — such as buying a subway ticket, opening a bank account and using a credit card.

From May it has also offered a new two-hour course on insurance fraud, with investigators from the Financial Supervisory Service (FSS) warning about the possible consequences.

“We expect that through education, defectors will think twice before making a decision to become an accessory to fraud,” the official, who supervises the course, told AFP on condition of anonymity.

Newly arrived refugees get government financial help but often must repay big debts to the brokers who arranged their escape via China.

This makes them susceptible to taking part in frauds, which focus on bogus medical insurance claims.

After the refugee has bought a private policy or enrols in a state scheme, or both, insurance company workers typically conspire with hospital administrative staff to issue fake certificates of treatment.

When a refugee has been reimbursed by the insurance company, and sometimes by the government, he or she hands over a portion to the accomplices.

“I received about three million won (2,700 dollars) and used the money to pay debts when I came to South Korea,” one woman in her late thirties told the JoongAng Daily newspaper.

Police in Gyeonggi province surrounding Seoul, a known centre for the scams, said that over the past five years ending March refugees received a total of 3.1 billion won from 31 insurance companies in bogus claims.

“It’s prevalent and we are constantly investigating to catch them,” said a provincial police investigator.

The watchdog FSS says refugees typically send 30 percent of their takings from the frauds to brokers in China and the rest to family still in the North.

In one case in 2008, police said they had charged 41 refugees accused of receiving a total of 420 million won through bogus medical claims.

“Insurance fraud has become almost the common thing to do among defectors after they come to South Korea,” Chun Ki-Won, a priest who helps the refugees, told AFP.

“The primary reason why insurance fraud is rapidly increasing is because it’s becoming harder for defectors to adapt to a new environment.”

Refugees find it harder than their southern-born counterparts to find well-paid jobs and some complain of discrimination.

In a survey conducted by legislator Kim Young-Woo, 66 percent of refugees described their living conditions as difficult.

Some 56 percent said their monthly income is below 500,000 won (450 dollars) — officially deemed to be the lowest sum on which families can manage.

About 17,000 North Korean defectors have gone through the Hanawon centre since it opened 11 years ago, and it is currently holding about 500 people.

Read the full story here:
Insurance fraudsters target North Korean refugees
AFP
10/17/2010

According to the Korea Times:

In Oct. 2006, a nuclear test was conducted in the remote mountainous area of North Hamgyeong Province, North Korea. This test did not come completely out of the blue. The North Korean government issued an official warning, thus becoming the first nation in history that gave prior notification about a coming nuclear weapons test. This openness might sound strange since we are talking about the world’s most secretive country, but it agrees well with the general character of the North Korean nuclear program. From its inception, the program was largely (but not exclusively) for show, it was aimed at impressing the outside world in order to manipulate it and get what the North Korean leaders wanted to get.

Even though North Korea joined the nuclear club only recently, its nuclear program has long history. It has remained the center of international attention since around 1990, but it began much earlier.

It was the mid-1950s when the first North Korean scientists arrived to work and study in the Joint Institute of Nuclear Research in the Soviet city of Dubna, not far from Moscow. This institution was created by the USSR or former Soviet Union for joint international research in nuclear physics, and until the early 1990s some 250 North Korean scientists underwent training there. Soon afterwards, in 1959 the former Soviet Union and North Korea signed their first agreement on cooperation in nuclear research. A similar agreement was concluded with China as well (Pyongyang never puts all its eggs in one basket!).

In the 1960s, the North Korean version of Los Alamos began to take shape. This role was assigned to the city of Yongbyon, a rather small town, located some 90 kilometers to the north of Pyongyang. It is interesting that, for reasons of greater secrecy, the nuclear research facility was called the “Yongbyon furniture factory.” The major article of infrastructure of this “furniture factory” was not a saw-mill but rather a small Soviet-designed research reactor, completed in 1965. In the 1970s, the North Korean scientists independently modernized the reactor, increasing its output.

There are few doubts that from the very early stages Pyongyang leaders seriously considered the possible military applications of their nuclear research program. But it seems that the North Korean nuclear program made a decisive turn towards military applications in the 1970s. At that time, South Korea was working hard to develop nuclear weapons of its own. For the North, which has always had good intelligence about its arch-enemy, these intentions was hardly a secret, so it seems that around 1975 the North Korean political leaders decided not to lag behind and sped up their own nuclear program.

However, the major obstacle on the path to the acquisition of nuclear weapons was the position of the former Soviet Union. Moscow took non-proliferation seriously, and did everything to control Pyongyang’s nuclear ambitions (incidentally, Washington treated Seoul’s nuclear plans in much the same manner). China also did not want a nuclear power across its border, so the usual North Korean strategy of playing Beijing against Moscow would not work in this case.

The Soviets made their continuing cooperation conditional on full-scale participation in the non-proliferation regime. In exchange for compliance, North Korea was promised technical assistance in building a nuclear power station of its own. Such a station was indeed a good option for a country which heavily depended on imported oil for power generation. Thus, Pyongyang bowed to the Soviet pressure complied and in 1985 signed the Non-Proliferation Treaty while secretly continuing with its nuclear weapons development efforts.

But soon the world changed. The communist bloc that both controlled Pyongyang’s nuclear ambitions and provided it with aid, collapsed around 1990. The foreign aid almost disappeared, and Pyongyang had to survive somehow in an increasingly hostile world.

The North Korean leaders came to a conclusion that in their peculiar situation the Chinese style policy of reforms would be too risky. Indeed, in a divided country, with South doing so much better than the North, attempted reforms were likely to produce German-style collapse, not Chinese-style economic boom. So, in order to keep their power and privileges the North Korean leaders had to avoid any changes in the system. It was a rational choice for them, even though this policy choice condemned hundreds of thousands to death by starvation and completely ruined the already weak economy.

Since the country was stuck with a remarkably inefficient economic system, it could not feed itself, so it badly needed foreign aid ― a lot of it. But the ruling elite, the few hundred families around the Kim’s hereditary dictatorship, also knew that the aid should come without too many conditions attached and, above all, with as little monitoring as possible. They needed food, above all, to feed the privileged and politically significant regions and social groups, leaving others to their sorry fate. Since a riot in the capital would be deadly dangerous for the regime, Pyongyang should be given some food. The police and elite military units should eat well, too, since their loyalty was vital for the stability of the regime. At the same time, the survival of, say, miners at some distant mining town was never a high priority for Pyongyang decision makers.

However, getting large-scale aid without many conditions would be a difficult, almost impossible task had not Pyongyang had in its disposal the already well advanced military nuclear program. From around 1990, the program became the major diplomatic tool which was used with the greatest skill in order to insure the continuous influx of foreign aid.

This is not to say that the nuclear program had no military significance whatsoever ― Pyongyang had some reasons to be afraid of a foreign attack. Pyongyang leaders were correct when they say privately that Hussein would probably still be living in his palace, if Iraq indeed had nuclear weapons. Nonetheless, from the early 1990s the major rationale behind the program has been not military deterrence, but rather diplomatic blackmail.

From around 1990, Pyongyang began to arrange leaks about its nuclear weapons program, while officially denying its existence. It threatened to withdrew from the non-proliferation treaty, and its officials promised to transform Seoul into a “sea of fire” if their demands would not be met.

The strategy worked. In 1994 the strangely named “Agreed Framework” treaty was signed in Geneva. An international consortium where the U.S. and South Korea were major donors, agreed to provide North Korea with light water reactors for power generation (those reactors cannot be used for production of weapon-grade plutonium) and also promised regular shipments of fuel oil. In exchange, North Korea promised to freeze its military nuclear program and accept international inspections of its nuclear facilities. It is widely believed that the U.S. negotiators were ready to give generous concessions because at that time they assumed that the North Korean regime would collapse soon. They were wrong: to the surprise of foreign observers, Kim Jong-il managed to stay in control of his starving country.

The indirect impact of the nuclear program was great as well. In the late 1990s and early 2000s, North Korea got what it needed: a lot of foreign aid without too many monitors. One can doubt whether the amount of aid would have been so large, had North Korean not been seen as a potentially nuclear country.

The so-called “second nuclear crisis” erupted in 2002 when it was discovered that North Koreans were cheating: they were secretly pursuing a uranium enrichment program. This was used as a pretext to the discontinuation of aid. After few years of unsuccessful negotiations, the North Korean diplomats decided to raise the stakes, and in October 2006 the first nuclear test was conducted. It worked: in merely few months, the U.S. agreed to make important concessions and aid was resumed. A new hike in tensions produced a new nuclear test in 2009.

So, by now the nuclear crisis has continued for two decades, and it seems that it might easily continue 25 years. The North Korean government understands that a nuclear weapon is their major diplomatic card, and they are unlikely to surrender it under any circumstances. The outside world is disunited and, frankly, lacks any means to influence Pyongyang. So, we are quite likely to see more nuclear tests (largely successful) and more nuclear negotiations (largely unsuccessful) in the years or even decades to come.

Satellite imagery recently revealed new construction at the Yongbyon facility.

Read the full story here:
North Korea conducted first nuclear test in 2006
Korea Times
Andrei Lankov
10/10/10

UPDATE 3: NKnews.org offers a description of both missiles.

UPDATE 2 (DPRK-Iran cooperation): Arms Control Wonk has more on DPRK-Iran cooperation.  The picture below would probably make Ruhollah Khomeini spin in his grave:

UPDATE  1 (Nodong Missile): Arms Control Wonk has more on a second Nodong missile that has some Iranian influences.

Aviation Week also offers a good summary:

North Korea’s weaponry is showing design characteristics associated with the Shahab 3, Iran’s most advanced missile. Such evidence is leading some international analysts to the conclusion that the ballistic missile development ties between the two countries are active and producing improvements in the arsenals of both.

While it would seem doubtful that complete missiles or missile sections are being shipped — given the close scrutiny by the West of North Korea shipping — components and engineering data could move relatively easily by air and diplomatic pouch.

For years, Iran has been the junior partner in the relationship and used the conduit to acquire No-dong and other missile technologies to build its own systems. Now, Israeli officials have noted the first public emergence in North Korea of the BM-25 Musudan, a weapon they believe has already been supplied to Iran.

It is believed to the first time the road-mobile, liquid-fueled, intermediate-range ballistic missile has been shown to anyone outside the North Korean military. The public unveiling took place Oct. 10 during a military parade attended by the country’s leader, Kim Jong-il, and his son and apparent leader-designate, Kim Jong-un.

The BM-25 is a derivative of the Russian-designed, SS-N-6 submarine-launched ballistic missile, although it has been increased in length to add range. North Korea showed several of the missile and wheeled launchers during the parade, although the operational status remains uncertain owing to a lack of flight trials detected by outside observers.

The parade also showcased a No-dong ballistic missile with a tri-conic nosecone. That configuration is typically associated with Iran’s Shahab-3, causing some analysts to suggest technical information gleaned by Tehran in flight trials is being fed to Pyongyang. Such a move would suggest Iran has made considerable progress in developing its indigenous missile engineering expertise.

The latest Iranian ballistic missile developments indicate the missiles “are much more sophisticated and reliable than the [early] Scud designs,” says Arieh Herzog, director of the Israel Missile Defense Organization. “The inertial navigation systems are better and improved guidance in the final phase makes some of them accurate to without about 100 meters.”

The migration of the BM-25 to Iran has major security implications for Europe, since it would give Tehran the ability to strike targets in southern Europe. For Israel, the introduction of the BM-25 would have relatively modest impact on its strategic calculation, since Iran already has the ability to strike Israeli cities with ballistic missiles, but it would allow Iran to disperse its launchers over a much larger area in the eastern part of the country.

ORIGINAL POST (Musudan Missile): Although Kim Jong-un stole the headlines at at the military parade, the North Korean military also reportedly paraded several new missiles.  According to the AP:

Japanese public broadcaster NHK reported Sunday that the parade included three never-before-shown types of missiles and launching devices.

One was thought to be a new “Musudan” intermediate-range ballistic missile with a long, narrow head, similar to a ball-point pen, NHK said. It has a range of 3,000-to-5,000 kilometers (1,860-to-3,100 miles) and would be capable of hitting Japan and Guam, NHK said.

South Korea’s Defense Ministry said it could not immediately comment on the report. Call to South Korea’s top spy agency seeking comment went unanswered on Sunday.

Arms Control Wonk has much more.

The Choson Ilbo follows up.

Here are lots of great pictures from a Chinese site.

NTI Global Security follows up:

North Korea was reported to have unveiled three previously unseen ballistic missiles and launching apparatus during a major armed forces parade Sunday, according to the Associated Press (see GSN, March 17).

One new missile was believed to be a Musudan intermediate-range ballistic missile, which can travel 1,860 miles to 3,100 miles and could reach Guam and Japan, according to Japanese television channel NHK.

Missiles were prominently displayed at the parade with the words “Defeat the U.S. Military. U.S. soldiers are the Korean People’s Army’s enemy” written on them.

“If the U.S. imperialists and their followers infringe on our sovereignty and dignity even slightly, we will blow up the stronghold of their aggression with a merciless and righteous retaliatory strike by mobilizing all physical means, including self-defensive nuclear deterrent force,” North Korean army General Staff chief Ri Yong Ho said at the parade.

South Korean defense and intelligence officials did not offer comments on the report (Jean Lee, Associated Press/Google News, Oct. 10).

The Musudan is not known to have yet been launched in a test flight, proliferation analyst Joshua Pollack said on the website Arms Control Wonk. He cited the weapon’s flight range at roughly 1,550 miles to 1,860 miles. The missile is said to be based on the Soviet submarine-launched R-27, which is notably shorter in length than the Musudan.

The North Korean missile was initially unveiled in a 2007 armed forces parade; however, that event was closed to international media, the Chosun Ilbo reported. The South Korean newspaper reported the Musudan had a range of about 1,860 to 2,490 miles.

Evidently, some 12 Musudan missiles are fielded at missile installations in the North Hamgyong and South Pyongan provinces. The system can reportedly travel further than any other weapon in the North’s arsenal, including the Rodong missile with an 810-mile range, the newspaper reported.

“We’re looking at a new missile,” Pollack stated. “The lack of a known testing record prior to deployment raises all sorts of questions. Was it tested in another country, for example?” (Joshua Pollack, Arms Control Wonk I, Oct. 10).

The outside world also saw for the first time Sunday a new version of the medium-range Nodong ballistic missile, which was outfitted with what appeared to be a “separating re-entry vehicle,” Pollack noted.

“The question naturally arises: how long have the North Koreans had weapons of this type?” he wrote.

South Korean and U.S. news organizations initially began reporting on the Musudan missile in 2003, “so it’s certainly possible for Pyongyang to sit on these developments for years, if they wish,” he wrote.

The targeting precision of North Korean theater-range missiles such as the Nodong has been reported to have increased since July 2006 missile tests. The separating re-entry vehicle on the Nodong could explain some of that improved accuracy, Pollack stated.

Pollack indicated that details remain unclear regarding the third weapons system cited in the AP article (Joshua Pollack, Arms Control Wonk II, Oct. 10).

Read the full AP story here:
NKorea’s Kim, heir apparent son at lavish parade
Associate Press
10/9/2010

According to KBS:

A Japanese daily says North Korean officials have regularly bribed Japanese traders since Tokyo banned the export of luxury goods to North Korea in June of last year.

The Sankei Shimbun says North Korean officials in charge of importing luxury goods invited Japanese businesspeople to posh restaurants in places such as Dalian, China, several times and induced them into making illegal shipments.

Sankei said the North would first wire a lump sum of money in the several 100-million-won range to Japanese traders and then place orders for specific products afterwards.

In Japan, six smuggling cases of luxury goods to North Korea via China have been uncovered since June of last year.

Read the full story here:
Sankei: NK Bribes Japanese Firms to Import Luxury Goods
KBS
10/7/2010

Institute for Far East Studies (IFES)
NK Brief No. 10-10-4-1
10/4/2010

Trade between the two Koreas in the first half of 2010 totaled 980 million USD, 51.3 percent more than the 650 million dollars-worth of trade last year. North Korea’s trade with China was also up, by 16.4 percent, to 1.28 billion USD. Kim Jong Il has made two trips to China and the North has taken other steps to boost cross-border trade with the Chinese.

According to a recent report comparing inter-Korean trade to that between North Korea and China, North-South trade in 2007 equaled 91 percent of Pyongyang’s trade with Beijing, but as inter-Korean relations chilled, that number fell to 65 percent in 2008. This year, that number climbed back up to 77 percent, largely because the Kaesong Industrial Complex, which has avoided political entanglement, has grown 96 percent since last year. Textiles and home electronics top the list of goods in inter-Korean trade, while minerals are the top item traded across the DPRK-PRC border.

North Korea’s import of South Korean goods increased by 63 percent to 430 million USD, while the North’s Chinese imports rose a mere 25 percent, but still totaled 930 million USD. 36 percent of South Korean exports to the North are raw materials for North Korean textile production, while 120 million USD-worth of electronics make up the second-largest export industry. Making up the largest sector, 27 percent (250 million USD) of North Korea’s imports from China are made up of minerals and crude oil, while textiles make up 12 percent and base metal resources make up 8 percent. South Korean imports have also grown 43 percent, to 550 million USD, since last year. In comparison, Chinese imports from North Korea shrunk one percent to 340 million USD. Clothing and other ready-for-market textiles made up 44 percent of North Korean exports to the South, while electrical and electronic goods made up 17 percent. Coal, iron, and other key resources made up 51 percent of DPRK exports to China, while zinc and other base metals make up approximately 20 percent.

According to the Choson Ilbo:

A university in North Korea set up with South Korean funding has opened a research center devoted to studying former North Korean leader Kim Il-sung’s “Juche” or self-sufficiency ideology.

Pyongyang University of Science and Technology, which was established with South Korean funding, opened the research center after erecting a monument honoring Kim Il-sung, Grand National Party lawmaker Yoon Sang-hyun of the parliamentary Foreign Affairs, Trade and Unification Committee said Tuesday.

He showed a photograph as proof and added, “We must immediately halt further aid for the university, which has turned into a school that propagates the personality cult surrounding the Kim dynasty.”

The university was established with donations gathered by South Korea’s Northeast Asia Foundation for Education and Culture in order to help North Korea to train experts in information and technology, agriculture and biosciences and international trade. North Korea provided the land and labor while South Korea handled the hiring of faculty and management.

The university was scheduled to open in April this year but has apparently yet to begin operations. “North Korea rejected our offer to open an MBA school while demanding that the Juche ideology be included as a prerequisite for graduation,” Yoon said. He added Seoul must make sure to transfer no technology through the university, “since North Korea may use it to develop weapons of mass destruction.”

Satellite imagery of the Pyongyang University of Science and Technology (PUST) can be seen here.

Previous PUST posts can be seen here.

Read the full story here:
S.Korea-Funded University in Pyongyang ‘to Preach Stalinist Ideology’
Choson Ilbo
10/6/2010

According to the Choson Ilbo:

The Defense Ministry is preparing to enlarge the range of propaganda broadcasts and float radios to North Korea, which is refusing to admit responsibility for the sinking of the South Korean Navy corvette Cheonan in March.

During a National Assembly audit of the Defense Ministry and the Joint Chiefs of Staff on Tuesday, Defense Minister Kim Tae-young said the ministry is preparing to switch the format of propaganda broadcasts from FM to AM and float balloons carrying AM radios to the North so that North Koreans can listen to the broadcasts.

The South has in the past sent many radios to the North, Kim said. He added the balloons will also carry propaganda leaflets.

“We’ve already put psychological pressure on the North merely by installing loudspeakers for propaganda broadcasts at 11 locations” along the military demarcation line, the minister claimed. But he added that the government will not start the broadcasts and send the leaflets, which are ready, until the North launches a fresh provocation and there is therefore an urgent need to put pressure on the North.

The New York Times offers some good supplemental information:

After six years of quiet along the border, South Korea has reinstalled 11 sets of psychological warfare loudspeakers, Defense Minister Kim Tae-young said Tuesday in Seoul. He said his ministry had switched its transmitters to the easier-to-receive AM band and was ready to send thousands of AM radios and propaganda leaflets across the border using helium balloons.

A continuing balloon and leaflet campaign by South Korean civilians has angered the North Korean government, which suggests that it has been effective. The leaflets ridicule the North Korean leader, Kim Jong-il, and call for people in the North to rise up. North Korea insisted that the leaflet issue be put on the agenda of recent bilateral military talks.

…

North and South Korea agreed in 2000 to dismantle the loudspeaker systems along the border and to stop radio transmissions. There have been no loudspeaker blasts since 2004, although South Korea made a show of putting some speakers in place in May, after the sinking of a South Korean naval vessel, the Cheonan, in March. Forty-six sailors were killed. The North has denied any involvement.

Read the full story here
Gov’t in Drive to Send Radios to N.Korea
Choson Ilbo
10/7/2010

Ruediger Frank writes in 38 North:

“Finally,” one is tempted to say. The years of speculation and half-baked news from dubious sources are over. The leadership issue in North Korea has been officially resolved. Or has it?

The third delegate’s meeting[1] of the Worker’s Party of Korea (WPK) on September 28, 2010 answered a few questions. Still, it left some unanswered and posed quite a few new ones as well. In the end, Kim Jong Il emerged the undisputed leader. But has his legitimacy become more independent of his father than it used to be? Kim Jong Un has been introduced to the people. Does this mean he is going to succeed Kim Jong Il? Or will he succeed Kim Il Sung? Kim Jong Il’s sister Kim Kyong Hui has been promoted to the rank of general and is part of the party leadership. Is she supposed to support her nephew, or is this part of a strategy to more broadly enhance the family’s power? Her husband Jang Song Thaek is also on board. Will he share the caretaking job with his wife? Are there any other members of the extended Kim family on the team?

The Hard Facts

(1) On Monday, September 27, 2010, Kim Jong Un was mentioned for the first time in official North Korean media when he was promoted to the rank of general. Now, at last, we know for sure how to write his name (we use the official North Korean version for English; it would be Kim Jong-ùn according to McCune/Reischauer).

(2) On the same day, Kim Jong Il’s sister was promoted to the same military rank as her nephew.

(3) On September 28, 2010, one day later, the first delegate’s meeting of the WPK in 44 years and the biggest gathering since the last (Sixth) Party congress in 1980 opened after a mysterious delay. It had originally been announced for “early September.”

(4) Contrary to western media speculation, Kim Jong Il did not step down nor did he hand over any of his powers to his son. Rather, he was confirmed as the current leader of the party, the military, and the country.

(5) From 1945 until 1980, the WPK held six Party Congresses and two conferences or delegate’s meetings. This means that on average, the WPK had one major Party event every 4.4 years. However, over the next 30 years, it had none. The 21st and so far last plenum of the WPK was held in December 1993. Now, the defunct leadership structure of the WPK has been restored and the delegates elected 124 members of the Central Committee (CC) and 105 alternates. From among the members, 17 were named to the Politburo (PB) of the CC, and 15 as alternates.

(6) The Politburo is headed by a Presidium or Standing Committee of five people, with Kim Jong Il at the top as the general secretary of the WPK.[2] It also consists of Kim Yong Nam (82 years old),[3] Choe Yong Rim (80 years old),[4] Jo Myong Rok (82 years old)[5] and Ri Yong Ho (68 years old).[6] The latter was promoted the day before the delegate’s meeting to the post of vice marshal. He ranks above Kim Jong Un and his aunt and is rumored to be a member of the Kim family, which if true, implies a particularly strong base for loyalty. Given the advanced age of most of its members, if the Presidium is not newly elected in a few years, who will remain? This makes Mr. Ri particularly interesting.

(7) All three known close relatives of Kim Jong Il received posts in the WPK. Kim Jong Un became vice chairman of the Central Military Commission (see below). His aunt Kim Kyong Hui became a member of the Politburo and her husband Jang Song Thaek was made an alternate. The names of regular and alternate members were not provided in alphabetical order, indicating a certain hierarchy. Kim Kyong Hui’s name was listed last out of 17 and Jang was 5th out of 15. A day later, he was 14th (out of 15) on a list of short bios of regular and alternate Politburo members. Kim Kyong Hui was the only member in addition to Kim Jong Il for whom no details were provided.

(8) Except for the Central Committee, there is not a single leadership organ where all three close relatives of Kim Jong Il hold a post. Kim Jong Un is excluded from the Politburo altogether; Kim Kyong Hui is not on the Central Military Commission; and Jang Song Thaek is only an alternate Politburo member. We could speculate that Kim Jong Il wants to prevent having too high a concentration of power in the hands of one of his relatives. He has made sure that the most crucial instruments of power are staffed with the most loyal of his followers who will be ready to walk the extra mile and fulfill his strategic decisions with all the energy of a family member and co-owner.

(9) As was expected, Kim Jong Un has not (yet) become a member or an alternate member of the Politburo, the second-highest leading organ of the party, but did receive a high-ranking post in the WPK’s Central Military Commission. As far as we know, this is essentially the organization through which the Party controls the military, and hence the most powerful of the WPK’s organs. It is no coincidence that this commission is chaired by Kim Jong Il himself. His son comes next in the hierarchy—he is the first of the commission’s two vice-chairmen. Jang Song Thaek is a member, too, but the one with the lowest rank, so it seems. His name was listed last out of 19. Kim Kyong Hui is not a member of the Central Military Commission.

(10) On September 29, 2010, an unusually long and detailed KCNA article was published with profiles of all Politburo members. In addition, a large group picture was published that showed the delegates and the complete Central Committee, including Kim Jong Un. The photo rather openly revealed the true hierarchy within the Party leadership; only 19 people were sitting in the front row, the others were standing. Kim Jong Un sat just one space away from his father, while Kim Kyong Hui sat five spaces away from the center. In a KCNA report on the taking of this picture, Kim Jong Un’s name came fourth after the Politburo Presidium members Kim Yong Nam, Choe Yong Rim and Ri Yong Ho. Kim Kyong Hui was number 18, and Jang Song Thaek was number 23 on that exclusive list of 33 leaders.

(11) A total of 14 department directors of the Central Committee were appointed, among them Jang Song Thaek and Kim Kyong Hui. However, contrary to predictions by many analysts, Kim Jong Un does not seem to have been appointed director of the Organization and Guidance Department (OGD), a post his father held before he was announced as Kim Il Sung’s successor.[7] This could be due to a number of reasons. Either, Kim Jong Un already effectively held that post—we may not know since the last time such positions were given officially was 1980—or the division of labor (and power) within the party has changed, for example in the context of the Military First Policy. In that case, the OGD post may simply not be as important as it used to be. This would imply that the Central Military Commission now makes all the important appointments, and the OGD is merely an administrative unit like any human resources department.

(12) The North Korean media published a message from China’s leader Hu Jintao only a day after the delegate’s meeting. He stressed the deep and traditional friendship, close geographical relationship, and wide-ranging common interests of the two countries. Hu pledged to defend and promote the bilateral relationship, always holding fast to it in a strategic view under the long-term discernment no matter how the international situation may change (KCNA, 29.09.2010). This was a message to the North Korean people and the international community: China is going to support the new North Korean leadership (model).

What Have We Learned?

The Party meeting provided final proof of what has often been doubted since Kim Jong Il took over as leader of North Korea after 1994. All the other things one might say about him notwithstanding, Kim Il Sung undisputedly was an able politician. He did not choose his eldest son Kim Jong Il as his successor by chance. Despite his health problems, Kim Jong Il is (still) able to play the power game. He paved the way for a new leadership without turning himself into a lame duck. He did so by not leaving any important posts to somebody else—although, at the same time, he did not monopolize those positions. He distributed power among a core group of family members and his father’s loyalists, while also ensuring that none of them can be certain to be significantly higher-ranking than any of their colleagues. As in juche, where in the end everything depends on the judgment of the leader, power in North Korea remains Kim’s sole domain. At the same time, he has done what any good CEO does: delegate authority to avoid energy-consuming micro-management of each and every aspect of his job.

The most important decision regarding human resources has been the introduction of Kim Jong Un as a member of the top leadership of the Party and of the military. He will now have to quickly develop a record (at least on paper) of spectacular achievements, so that he can be quickly presented to the people as the most logical and capable candidate for the next leadership post. Since Kim Jong Un was appointed with a clear reference to the military, Kim Jong Il appears to be following the same strategy his father did after 1980. At that time, North Korea analysts noticed that the late O Jin U, the top military official, was always standing close to Kim Jong Il. It would now be logical to expect that like his father before him, Kim Jong Un will be responsible for the promotion of top military officers, thereby ensuring their loyalty.

In terms of strategic decisions, its seems that the succession from Kim Jong Il to Kim Jong Un will be different from the last changing of the guard in 1994. As early as 2008, it seemed likely that the role of the Party would be strengthened substantially. The restoration of the WPK’s formal power organs and the many biographical details that were provided on the top leadership circle, including the group photo, indicate that the new leader will not be as autocratic as his predecessors. The new leadership will have more faces; we could observe something similar a few months ago in the case of the National Defense Commission. This is the reflection of a trend, not a spontaneous event.

What seems most notable is the renewed emphasis on Kim Il Sung as the sole source of legitimacy in North Korea. Kim Jong Il is not going to replace him, which would have been a precondition for the perpetuation of the current system of leadership. Therefore, in a sense, Kim Jong Un and all those who come after him will be, like Kim Jong Il, successors of Kim Il Sung.

Concerning the process of power transfer, as expected, a multi-stage approach is unfolding. At least one more stage will be needed. Chances are good that this will take place at the Seventh Party Congress, whose date is as of yet unannounced. 2012 would be a good time considering the health of Kim Jong Il and that year’s auspicious meaning—the 100th anniversary of Kim Il Sung’s birthday. As stated above, Kim Il Sung was a capable politician. He was clearly aware of the fact that sooner or later, his son would face the succession issue. It would be a great surprise if he hadn’t talked about this with him and jointly developed a rough plan as to how create a sustainable model of power succession. The two problems Kim Il Sung could not consider, simply for technical reasons, were who exactly would show the necessary capabilities to become the next successor, and how much time Kim Jong Il would have to oversee and guide that process.

The year 2008 indeed marked a watershed when, because of his illness, Kim Jong Il realized the need for a quick solution. The last thing an autocrat wants is to create the impression of being forced to act, and of time running out. So he used the already fixed year 2012 not only as the year of the celebration of his father’s 100th birthday, but also as the year when great changes will happen and the gate to becoming a Strong and Prosperous Great Country will be opened. From this perspective, I would argue that Kim Jong Il is indeed fighting a “speed battle,” but in the form of compressing a process that was planned long ago and supposed to last longer, rather than creating such a process from scratch and hastily.

The China Factor

The message of support from Hu Jintao along with the two visits of Kim Jong Il to China before the delegate’s meeting immediately lead to the question: What type of North Korea will China support? Clearly, the last thing China wants is for North Korea to collapse. Such a situation would create a serious dilemma for Beijing. It could either do nothing and watch the U.S. sphere of influence expand right to its border, or it could actively interfere. This would instantly shatter all Chinese efforts to display itself to the carefully watching countries in the region as a peaceful giant that is a real alternative to protection by the United States. In the end, this is what North Korea is all about—competition between Beijing and Washington. Pyongyang knows this.

A third path may be open to China. The North has realized that the economic reforms of 2002, which focused on agriculture and hence closely resembled the Chinese example of 1979, were in principle a good idea, but that conditions were so unlike those in China that the results inevitably differed. In principle, the understanding that economic reform is necessary remains but reservations against the political side effects of such reforms have grown substantially due to the chaos that emerged in the aftermath of the 2002 measures. Given North Korea’s structure as an industrialized economy, reforms need to take place in industry.

There is a well-established blueprint for this; we call it the East Asian model. In short, it consists of a strong state that controls a few big players in the economy—zaibatsu or keiretsu in Japan, chaebol in Korea, and the state owned companies in China. A core requirement for this model to succeed is a huge source of finance, coupled with a strong political partner that, for a while, is willing to turn a blind eye on protectionism. The United States played that role partly for Japan, and very strongly for South Korea. China is now willing to do this service for North Korea under certain political conditions.

Many signs point in the direction of North Korea “returning” to the path of orthodox socialism, or at least to its East Asian version. “Rule by the Party”—a collective with a first among equals at the top—is not only a key component of any socialist textbook case, it is also characteristic of the Chinese model since 1978. After two leaders of the Mao Zedong type, North Korea may now be getting ready for one similar to the position that the current Chinese President, Hu Jintao, occupies in China—that is, a strong leader who rules as the head of a collective. With some luck, Kim Jong Un might even turn out to be a Deng Xiaoping—a man who has the power and vision to use this post to initiate and execute crucial reforms.

For the same reasons that President Obama has a tendency to take visiting dignitaries to my favorite hamburger restaurant in Arlington, VA, the North Koreans have designated “friendship farms” for countries the North Koreans enjoy or expect to enjoy cozy relations.  Below I have identified a few for you to check out on Google Earth.

DPRK-Iran Friendship Ripsok Cooperative Farm

Coordinates: 39°28’34.69″N, 125°29’48.92″E
This farm has been mentioned in this capacity in KCNA four times: here, here, here, and here.
Date first mentioned: May 17, 2007

DPRK-Russia Friendship Kochang Cooperative Farm

Coordinates: 38°58’3.82″N, 125°36’4.67″E
It has been mentioned in KCNA at least 26 times.  See here.
Date first mentioned:  June 23, 1999

DPRK-China Friendship Thaekam Cooperative Farm

Coordinates: 39°15’4.41″N, 125°41’53.06″E
This farm has been mentioned at least 29 times in KCNA.  See here.
Date first mentioned: June 1, 1997

I have also located friendship farms for: Laos, Poland, Cuba, Bulgaria, Vietnam, Malaysia,  Indonesia, Germany, Palestine, Cambodia, Mongolia, India, Syria, Nigeria, Libya, Egypt, New Zealand, Yugoslavia, and Pakistan.

The United States does not yet have a friendship farm in the DPRK, but maybe someday it will be Osan-ri in Sunan-kuyok, Pyongyang. This is where the Fuller Center plans to launch a housing project. Their planned location and site plans are posted below.

Jimmy Carter, who founded Habitat for Humanity, has recently endorsed this project. (UPDATE: more here and here)

Thanks again to Google Earth and GeoEye.

According to the Donga Ilbo:

More than half of North Korean defectors living in South Korea say they earn under 500,000 won (440 U.S. dollars) per month and suffer hiring discrimination, the results of a survey released Thursday said.

A combined 222 defectors nationwide were surveyed Sept. 15-30 and the study’s results were given to ruling Grand National Party lawmaker Kim Young-woo.

Of the respondents, 76 percent were women in their 20s to 40s. The gender and age ratios were similar to those of the estimated 20,000 defectors in the country, including those expected to enter South Korea by year’s end.

The study said 118 (56 percent) of 211 respondents said they earn under 500,000 won a month, or less than the minimum cost of living (504,344 won) per capita set by the Health and Welfare Ministry. Those who earned more than 500,000 won but under one million won (880 dollars) accounted for 21 percent (44), between one million and 1.5 million won (1,320 dollars) 16 percent (34), and between 1.5 million and two million won (1,760 dollars) five percent (10).

On discrimination in hiring, 93 of 216 respondents (43 percent) said they felt “slight” discrimination and 41 (20 percent) “strong” discrimination. Among 213 respondents, 115 (54 percent) said they earn less than a South Korean for the same work, and 58 (27 percent) out of 206 respondents said they felt ostracized due to their identity.

On their living conditions, 105 (48 percent) of 219 respondents said they are “poor” and 39 (18 percent) “very poor,” while 64 (29 percent) said they lead “moderate” lives, five (two percent) “affluent,” and six (three percent) “very affluent.”

A 40-something North Korean female defector urged South Koreans to show consideration for defectors on the questionnaire.

“We are a family of five. My husband is in bed due to hip surgery. Those unable to work due to illness have a very hard time making a living. I do my best to earn a good living but realize that this is impossible for those who have no power. We are heartened by your words of encouragement. We’d be very happy and grateful if you understand our difficulties and take care of us,” she said.

Read the full story here:
NK Defectors Complain of `Cold Lifestyle` in S. Korea 
Donga Ilbo
10/1/2010