North Korean Economy Watch

According to Yonhap:

The joint South-North Korean industrial complex in the North’s border city of Kaesong saw its production expand 14.4 percent in 2011 from a year earlier, Seoul’s unification ministry said Monday.

The total production at the Kaesong Industrial Complex reached US$369.9 million during the January-November period last year, up from $323.3 million worth of production for all of 2010, according to the Ministry of Unification.

The output during the last month of 2011 has not been tallied yet, the ministry said, adding the on-year growth rate may be far greater.

Production for the first 11 months of 2011 marks a 25.7-percent growth from the same period in the previous year, the ministry also noted.

Monthly production hit $31.1 million in January last year and hovered near the $30-million mark every month last year, except in February, according to the ministry.

The ministry attributed last year’s output growth to an increasing number of workers at Kaesong.

North Korean laborers working at the complex reached a peak of 48,708 as of November last year, the ministry said. The comparable figure at the end of 2010 was 46,284, it said.

Yonhap also reports the following:

The provision of new laborers is seen as a signal of the new North Korean leadership attempting to maintain the joint industrial complex, the symbol of inter-Korean economic cooperation, despite the North’s repeated denunciations of the Lee Myung-bak administration for allowing only a former South Korean first lady and a businesswoman to visit Pyongyang to mourn Kim’s death.

“North Korea will provide about 400 more laborers to the Kaesong Industrial Complex on the 26th (of January) immediately after the Lunar Yew Year’s holiday,” a source at the Kaesong complex said.

A Unification Ministry official also said that he “heard that North Korea will soon increase the laborers at the Kaesong Industrial Park.”

The North had planned to increase the number of North Korean laborers late last month but suspended the plan due to the sudden death of Kim on Dec. 19.

Hundreds of South Korean factories in the industrial park employ 48,708 North Koreans as of the end of November last year, up 2,400 from a year earlier.

Read the full stories here:
Production at joint industrial Kaesong park expands 14.4 pct in 2011
Yonhap
2012-1-23

N. Korea to provide 400 new laborers to S. Korean firms in Kaesong: sources
Yonhap
2012-1-24

Pictured above (Yonhap): Food aid to be delivered to the DPRK (2012-1-27)

According to Yonhap:

Representatives of a South Korean charity group plan to visit North Korea next week to deliver 180 tons of flour aid to North Korea to help ease its chronic food shortages, officials said Friday.

The planned shipment by the Seoul-based Korea Peace Foundation marks the first flour assistance to the communist country following the death last month of North Korean leader Kim Jong-il.

The UNDP also made public that it will place a priority on the DPRK this year:

Radio Free Asia says the United Nations Development Programme will place a priority on improving food security in North Korea by reducing crop losses after harvests.

The U.S. based broadcaster said the UNDP plans to save more crops and improve seed production by revamping North Korea’s crop storage facilities and farm equipment such as threshers and grinders.

Around 15 percent of crops harvested in Pyeongyang are said to be damaged every year, while only 13 percent of the 150-thousand tons of seed produced meet international standards.

Food security is achieved by securing a certain amount of food, taking into account potential population increases, natural disasters and war.

Additional Notes:
1. I believe the “Korea Peace Foundation” is also the “Korean Conference of Religion and Peace (KCRP)”

2. Read about South Korea’s aid to the DPRK in 2011 here.

3. CNN also covered the story about South Korean food aid.

Read the full Yonhap article here:
S. Korean group to send first flour aid to N. Korea after Kim’s death
Yonhap
2012-1-20

According to Business Week:

North Korea’s trade expanded more than 20 percent in 2010 to $6.1 billion on growing business with China even as the economy shrank for a second year, South Korea’s national statistics office said.

Trade volume increased 22.3 percent in 2010 after a 10.5 percent decline in 2009, Statistics Korea said in its annual report today in Seoul. Commerce with China accounted for 57 percent, or $3.5 billion, of North Korea’s foreign trade, up from 53 percent in the previous year. The totalitarian state doesn’t report economic statistics.

North Korea’s gross domestic product contracted 0.5 percent to 30 trillion won ($26.1 billion) in 2010, compared with South Korea’s 1,173 trillion won, the Bank of Korea said in November. Per capita income was 1.24 million won compared with South Korea’s 24 million won.

Kim Jong Un took over as leader of North Korea in December after the death of his father, Kim Jong Il. The regime has relied on economic handouts since the mid-1990s and an estimated 2 million people have died from famine, according to South Korea’s central bank. The United Nations and the U.S. increased sanctions on the country aimed at curtailing its nuclear weapons program after 2010 attacks that killed 50 South Koreans.

Chinese aid to the stricken country will probably increase as the government in Beijing seeks to avoid a flood of refugees from crossing the 880-mile (1,416 kilometer) border it shares with North Korea, analyst Dong Yong Sueng said. While food shortages have contributed to rising defections, North Korea has shown no willingness to ease sanctions by abandoning its nuclear weapons program.

Economic Dependence

“North Korea’s economic dependence on China will inevitably increase for the time being unless there’s some resolution to the nuclear situation,” said Dong, a senior fellow at the Samsung Economic Research Institute in Seoul. “China wants a stable North Korean regime and succession to avoid a potential influx of refugees.”

North Korea had a shortfall of as much as 700,000 metric tons of food last year, which could affect a quarter of the population, according to the United Nations Food & Agriculture Organization. China provides almost 90 percent of energy imports and 45 percent of the country’s food, according to a 2009 report from the New York-based Council on Foreign Relations.

China is preparing to consent to a North Korean request to provide 1 million tons of food in time for the April 5 anniversary of the birth of the country’s founder, Kim Il Sung, Japan’s Fuji Television said on its website. The report didn’t say where it obtained the information.

Providing Assistance

Chinese Foreign Ministry spokesman Liu Weimin today told reporters in Beijing that while he wasn’t aware of the report, “we have always been providing assistance to the DPRK within our capacity which we think will be conducive to the stability and development of the country.” DPRK is an acronym of North Korea’s formal name, the Democratic People’s Republic of Korea.

Kim’s military had over one million soldiers in active duty and 7.7 million reserve troops as of November 2010, today’s report said, citing South Korean Defense Ministry figures. The North operates under a military-first policy and has remained on combat alert since the Korean War ended in 1953 with a truce and not a peace treaty.

North Korea’s population rose to 24.2 million in 2010 from 24.1 million in 2009, about half of South Korea. Inter-Korean trade rose 13.9 percent from a year earlier to $1.9 billion last year, Statistics Korea said.

South Korea plans to set up a fund to raise as much as 55 trillion won to pay for eventual reunification with North Korea, Unification Minister Yu Woo Ik said in an interview with Bloomberg last October.

Read Sangwon Yoon’s full article in Business Week here.

The data in this article was pulled from a recent publication by Statistics Korea (Korean, English). You can read a press release of the publication here (in Korean). You can read the press release in English here (via Google Translate). It is not very good, so if a reader would care to take the time to translate this article, I would appreciate it. You can also download the press release as a .hwp file at the bottom of the article (download a .hwp reader here).

Statistics Korea did set up a North Korea Statistics page which you can see here. Unfortunately, it is only in Korean! I have, however, added it as a link on my North Korean Economic Statistics page.

UPDATE 1: The Daily NK also covered this story with the following report:

The income gap between North and South Korea is becoming ever wider, according to statistics released yesterday by Statistics Korea showing that South Korea’s per capita Gross National Income (GNI) in 2010 was $27,592, 19.3 times that of North Korea at $1,074. Last year the gap was 18.4 times.

In the (legal) foreign trade sector, the two Koreas also lived very differently. South Korea’s 2012 trading volume was $891.6 billion, 212.3 times North Korea’s $4.2 billion. North Korea’s exports were worth just $15 billion, its imports $27 billion.

As expected, North Korea’s trade reliance on China was highly significant (56.9%), partly because as strained inter-Korean relations started to bite, so inter-Korean trade declined as well: from 33.0% in 2009 to 31.4% in 2010.

Meanwhile, 61.0% of adults in South Korea are economically active, a number which rises to 70.2% in North Korea. Conversely, there are 3,134,000 college students in South Korea, but only 510,000 in North Korea.

In the energy industry sector in 2010, South Korea imported 872,415,000 barrels of crude oil, 226.4 times more than North Korea’s 3,854,000. The electricity generating capacity of South Korea is 10.9 times more than that of North Korea, too, though the generated amount was actually around 20 times bigger, the statistics allege.

Automobile production was no better; in South Korea (4,272,000), 1,068 times more than North Korea (4,000). Steel production in South Korea was 46.1 times that of North Korea, cement was 7.6 times more, and fertilizer 6.1 times.

UPDATE 2: The Hankyoreh adds some critiques of the data:

“With inter-Korean relations so tense, it is no longer possible for us to do the kind of North Korean grain production estimates that were possible under the previous administration,” a government official explained on Tuesday.

2010 production figures for rice, corn, barley, beans, and other major grains were left blank in a Statistics Korea report on major statistical indicators in North Korea. The numbers were included in statistical data released in 2008, 2009, and other years.

A Statistics Korea official said, “We made several requests to the organization in charge, but they didn’t provide materials, so we couldn’t print them.” The Rural Development Administration is responsible for investigating North Korean grain production. Early every year, it has estimated and released North Korean grain production figures for the previous year. Since 2011, however, it has failed to release figures.

A government official explained, “Since inter-Korean relations were decent during the previous administration, it was possible to go to the North and get samples to use as a basis for estimates.”

“With inter-Korean exchange all but completely halted under the current administration, the basis for releasing estimates has disappeared,” the official added.

Some observers said the decision was motivated by concerns that South Korean public support for food aid to North Korea could grow if low figures are presented. The argument is that there is no reason the kind of grain production estimates that were possible in 2008 and 2009, while the Lee administration was in office, would not be so for 2010 alone. Observers are also expressing bafflement at the fact that only agricultural products were omitted from estimates at a time when even the number of cars is being estimated in the area of industrial products.

Kim Yong-hyun, a professor of North Korean studies at Dongguk University, said, “Recently, food aid negotiations have been taking place between North Korea and the US, and I suspect the government may have decided not to announce [the estimates] because it was too concerned about public sentiment in South Korea.”

The North Korea figures released Tuesday also showed South Korea‘s per capita gross national income of $20,759 to be 19.3 times North Korea’s $174 for 2010.

Lankov writes in the Korea Times:

This year, President Lee Myung-bak’s New Year address paid much attention to North Korea issues. The South Korean President warned the North against fresh provocations but the general tone of his speech was conciliatory.

Lee said that now is the time to put aside past problems and start to rebuild relations anew. Tellingly, he did not repeat that Seoul expects Pyongyang to apologize for the two military incidents of 2010 ― the sinking of the Cheonan and the shelling of Yeongpyeong Island.

Are there chances that Pyongyang will react to this charm offensive and rush to resume talks with Seoul? Don’t hold your breath ― such chances are very remote. Pyongyang decision makers understand perfectly well that an immediate detente is not in their long-term interests.

Pyongyang’s foreign policy goals are surprisingly easy to describe: They are regime security and obtaining unconditional aid (the former is an absolute priority with the latter a rather distant but still significant second). In other words, North Korea’s foreign policy makers want to squeeze as much aid as possible from the outside world but only so long as this aid comes without too many conditions which might have impact on regime security.

Since 2008, the North Korean state has found itself in a rather unpleasant situation: U.S. aid stopped almost completely while the amount coming from South Korea has dramatically decreased. In this new situation, North Korea has been left with just one aid provider ― that is, China. This is not a situation that Pyongyang’s elite is happy about.

Since the 1960s, North Korean diplomats have worked hard to ensure that their country would always have at last two overseas sponsors. It was preferable if the two sponsors had uneasy, if not hostile, relations, so that their rivalry could be used to ensure that only limited concessions would be given in exchange for aid.

For the early 1960s until the late 1980s, China and the Soviet Union were the sponsors. From the early 1990s, the Chinese continued and the Soviet Union was replaced by South Korea and the United States.

In order to decrease their dangerously high dependence on China, North Korean diplomats now want South Korea to resume large-scale aid ― in other words, to re-implement a version of the “Sunshine Policy,” the North Korean-directed policy of Kim Dae-jung and Roh Moo-hyun when they were president in 1998-2007.

North Korean leaders are careful observers of the ever-changing South Korean political scene. They have to be, since milking the South has long since become their major source of revenue. They hope that the coming parliamentary and presidential elections will be won by the Korean nationalist left.

This is understandable, since left-leaning politicians in South Korea have always been more willing to provide the North with aid, without asking too many awkward questions. In recent years, it seems that the left has lost part of its earlier enthusiasm for such a policy, but one should still reasonably expect that a left-leaning (or as it would proudly style itself, “progressive”) administration will indeed be more receptive to Pyongyang’s demands.

So what should North Korea do to increase the chances of the South Korean left-leaning parties? Pretty much the only thing they can do is to “not” help the right, and this is exactly the reason why the recent conciliatory remarks by President Lee are likely to fall on deaf ears.

While the North Korea issue is marginal in South Korean politics, the left-leaning opposition can blame the Lee administration for its real (or alleged) mishandling of the North and the resulting instability on the Korean Peninsula (admittedly, this type of electoral rhetoric has a kernel of truth to it). Therefore, if the North agrees to play according to Lee’s rules, it will help the South Korean “conservatives” in presenting themselves as people who, at the end of the day, know how to maintain stability on the Korean Peninsula.

Of course North Korea would be rewarded if it were to talk right now. But from Pyongyang’s point of view it makes a great deal of sense to wait another year, in anticipation of the electoral success of the South Korean left. If the left is not successful in the end, then they can still easily make a deal with the next right-leaning administration. It is telling that in recent months the presidential contenders of the right have also indicated that they would be softer in their approach towards the North.

Therefore we should not expect a dramatic diplomatic breakthrough anytime soon. Fortunately though, we also do not have to be that afraid of fresh North Korean provocations. Consideration of South Korean electoral politics will probably mean that the North will try to avoid clashes with the South.

Read the full story here:
N. Korea’s political calculations
Korea Times
Andrei Lankov
2012-1-15

UPDATE 1 (2011-12-20): Due to the announcement of Kim Jong-il’s death on December 19, the lighting of the Christmas trees was cancelled.

ORIGINAL POST (BELOW):

Pictured above: How the DPRK should have responded to South Korean Christmas Trees

Last year I wrote a blog post about the large “Christmas tree” a South Korean church was erecting on a hilltop tower across the Han River from Jogang-ri, in Kaesong (37.752445°, 126.593120°). Here is a satellite image  (Google Earth) of the location:

This year, the South Korean government again rewarded the church with permission to raise the “Christmas tree”, and again, Pyongyang was not happy:

The North’s official website, Uriminzokkiri, called the plan “a mean attempt for psychological warfare” against the communist state and threatened to retaliate immediately if the lights are switched on.

…

The tree-shaped, 30-meter-high steel structure is illuminated by thousands of small light bulbs and can be seen from the North’s major city of Kaesong just north of the border, according to media reports.

“The enemy warmongers… should be aware that they should be held responsible entirely for any unexpected consequences that may be caused by their scheme,” it said.

“This issue… is not something to be ignored quietly,” it said.

My parents taught me that if someone is trying to annoy me–I should just ignore them.  Showing irritation will only invite further harassment. The DPRK chose to ignore this wisdom, and as a result, the South Koreans approved the construction of two additional “Christmas trees” along the border (three in total now). According to the Associated Press (via the Washigton Post):

The South Korean government allowed a Christian group to light a massive steel Christmas tree near the border last year for the first time in seven years as tensions flared in the wake of two deadly attacks blamed on the North.

That tree will be lit again this month, while South Korea has also decided to allow other Christian groups to light two other front-line Christmas trees, a Defense Ministry official said.

The decision is meant to help guarantee freedom of expression and religion, the official said on condition of anonymity, citing office policy.

…

South Korea’s military will bolster security near the three trees, located on the western, central and eastern portions of the border, the Defense Ministry official said. The trees will stay lit for 15 days starting Dec. 23.

So Christmas trees are increasing military tension along the DMZ. Fantastic. Since it is the holiday season, however, and we should all be feeling good about each other, etc., I wanted to offer the DPRK a more appropriate tactic to respond to the the South’s new “psychological warfare” techniques.  The DPRK already has one of the world’s tallest flag support structures erected near Panmunjom (The 160 meter edifice is technically not a flag pole)…why not just cover it in lights and put a big red star on top? It could even be powered with electricity from the Kaesong Industrial Complex (provided by the South). No South Korean organization could compete. The DPRK would win…it would have the “Tallest Christmas Tree in the World”! Of course, this would be escalation of a different sort.  The South Koreans would respond somehow…but the outcome would be preferable to military escalation!

Happy holidays and happy new year!

According to Yonhap:

South and North Korean linguistic experts have agreed to push to use the same spelling of place names, together with their Chinese counterparts, a Chinese scholar said Thursday.

The project is designed to promote better communication among South and North Koreans as well as ethnic Koreans in China.

The divided Koreas use the same alphabet known as “hangeul,” though decades of division following the 1950-53 Korean War resulted in dialectical differences and deviations in word meaning.

The two Koreas also spell differently in hangeul when naming places and countries, a phenomenon that often causes trouble in communication between South and North Koreans.

Most of the about 2 million ethnic Koreans in China can speak Korean, though they also use different dialects and spell the names of locations differently than Koreans.

North Korean linguistic experts have proposed unifying the spelling of place names on the Korean Peninsula and China, said Liu Yinzhong, a professor of Zhejiang Yuexiu University of Foreign Languages in China.

Liu, an ethnic Korean who studied at Kim Il-sung University in North Korea, said the project could help contribute to boosting mutual confidence and cooperation.

Chin Yong-ohk, an emeritus professor of Kyunghee University who is involved in the project, said Liu would visit South and North Korea to exchange ideas on the project.

South Korea has banned its citizens from visiting North Korea as part of sanctions on the North in retaliation for the sinking of a South Korean warship in 2010. The North has denied involvement in the sinking that killed 46 sailors.

South Korea has selectively allowed religious and private aid groups to visit the North as part of humanitarian projects.

Last month, the two Koreas held discussions in the North’s border city of Kaesong on resuming a separate project to publish a joint dictionary covering their different dialects.

The project, launched in 2005, was suspended last year after the North’s sinking of the South Korean warship.

Read the full story here:
Koreas push to use same spelling of place names
Yonhap
2011-12-8

According to Yonahp:

Top executives of more than 120 South Korean companies operating in the Kaesong Industrial Complex plan to meet in the North’s border city this week, in the first such meeting to discuss pending inter-Korean business issues, an organizer said Tuesday.

The CEO conference is scheduled to bring together the heads or local representatives of 123 South Korean firms and other related officials on Wednesday, said Bae Won-joo, one of the organizers of the meeting.

A Unification Ministry official said the meeting was designed to discuss issues related to the operation of the industrial complex. He did not give further details and asked not to identified, citing office policy.

Previous posts on the Kaesong Industrial Zone can be found here.

Read the full story here:
S. Korean businessmen to meet in N. Korea’s industrial park
Yonhap
2011-12-6

UPDATE 32 (2012-1-27): According to an article in the New York Times, inter-Korean trade and aid declined in 2011:

On Friday, the South’s Unification Ministry said that South Korean aid to the North fell to 19.6 billion won, or $17.5 million, last year [2011], down more than 51 percent from a year earlier [2010].

Inter-Korean trade fell by more than 10 percent [from 2010 to 2011] to about $1.5 million in 2011, the ministry said.

UPDATE 31 (2011-12-10): According to the Korea Times, the potential food aid is not being auctioned off.  It is being sent to South America. According to the article:

Seoul will send baby food originally offered as aid to North Korea to El Salvador following Pyongyang’s refusal to accept delivery, to help the South American country deal with damaging floods, officials said Friday.

The delivery consists of 190,000 packs of baby food that were part of a $4.4 million flood aid package to the North, which the Stalinist regime rejected two months ago amid high tension.

It was slated to depart from the port city of Busan via cargo ship for El Salvador, which has appealed for help to deal with floods that displaced tens of thousands earlier this year.

Seoul offered the aid, which also included biscuits and instant noodles, to help the North deal with torrential summer rains. But Pyongyang demanded cement and equipment instead and eventually shunned the offer altogether.

The rerouting of the items underscores lingering tension despite efforts to warm ties and eventually resume regional dialogue on dismantling the North’s nuclear program. Regional players want the situation on the peninsula to improve before the talks begin.

Pyongyang’s silence over the aid put a damper on the early signs of improvement. President Lee Myung-bak has been exercising a softer line since September, when he tapped close aide Yu Woo-ik as unification minister, including expanding humanitarian activities and cultural exchanges.

But the North, apparently seeking rice and other forms of massive aid, has recently slammed the flexible policy as political pandering to the South Korean public, which is gearing up for elections next year.

Such remarks come even as the unification ministry continues to approve northbound aid, including $5.65 million worth for infants, children and pregnant women through the United Nations Children’s Fund (UNICEF). Consultations are ongoing over how to provide more of the baby food. Seoul has also attempted to auction some of it off through a government website.

The North Korean regime is thought to be doing all it can to secure food and other handouts ahead of next April, when it will celebrate the 100th anniversary of the birth of its founder Kim Il-sung. Watchers say that the North is liable to alternate pressure and peace offensives to secure as much aid as it can through inter-Korean and multilateral channels.

UPDATE 30 (2011-12-6): According to the Korean Herald the first auction of potential food aid (See Update 27 below) did not go so well, so Seoul is trying again:

South Korea plans a second attempt to auction off baby food originally intended for North Korean children, officials said Tuesday.

The move comes after nobody bid for 540,000 packs of baby food on Onbid, an auction Web site run by the state-run Korea Asset Management Corp.

South Korea plans to issue a second public notice and adjust the prices, said an official handling the issue at the Unification Ministry. He did not elaborate on further details.

The baby food is part of 5 billion won ($4.4 million) worth of emergency relief aid South Korea had planned to ship to North Korean flood victims earlier this year.

South Korea dropped that plan in October after differences between the two Koreas on the items to be sent. South Korea had insisted it would deliver baby food, biscuits and instant noodles to the North, instead of the cement and equipment its communist neighbor had requested.

Separately, South Korea has been in talks with local private relief agencies over how to donate another 290,000 packs of baby food to other countries, according to another ministry official.

She declined to give further details, saying consultations are taking place.

UPDATE 29 (2011-12-5): The South Koreans will donate US$5.65 million to the DPRK via UNICEF.  Accoring to Yonhap:

South Korea said Monday it will donate US$5.65 million (about 6.5 billion won) for humanitarian projects in North Korea through the U.N. body responsible for the rights of children.

The donation to the United Nations Children’s Fund, or UNICEF, will benefit about 1.46 million infants, children and pregnant women in North Korea, according to the Unification Ministry, which is in charge of relations with the North.

Seoul’s contribution will be used to provide vaccines and other medical supplies as well as to treat malnourished children next year, said the ministry.

There have been concerns that a third of all North Korean children under five are chronically malnourished and that many more children are at risk of slipping into acute stages of malnutrition unless targeted assistance is sustained.

“The decision is in line with the government’s basic stance of maintaining its pure humanitarian aid projects for vulnerable people regardless of political situation,” Unification Ministry spokesman Choi Boh-seon told reporters.

South Korea has been seeking flexibility in its policies toward the North to try to improve their strained relations over the North’s two deadly attacks on the South last year.

…

South Korea donated $20 million for humanitarian projects in North Korea through the UNICEF between 1996 and 2009.

Last month, the South also resumed some $6.94 million worth of medical aid to the impoverished communist country through the World Health Organization.

..

Separately, South Korea also decided to give 2.7 billion won ($2.3 million) to a foundation to help build emergency medical facilities in an industrial complex in the North Korean border city of Kaesong.

More than 47,000 North Koreans work at about 120 South Korean firms operating in the industrial zone to produce clothes, utensils, watches and other goods. The project serves as a key legitimate cash cow for the impoverished communist country.

UPDATE 28 (2011-12-1): Distribution of private aid monitored in N.Korea. According to the Hankyoreh:

“North Koreans know that the wheat flour aid they received came from South Korea.”

These were the words of Cho Joong-hoon, director of the Unification Ministry’s humanitarian assistance division, during a meeting with reporters Wednesday at the Central Governmental Complex in Seoul upon his return from a recent visit to North Korea to monitor the distribution of aid.

“The name of the South Korean private aid group, the manufacturing company, the date, and the address were all printed on the packages of flour,” Cho said.

Arriving in North Korea on Sunday with Kim Min-ha, co-chairman of the private group Ambassadors for Peace, and three others, Cho visited three sites to observe the distribution of the 300 tons of flour provided in aid. The site were the Namchol Kindergarten, February 16 Refinery Kindergarten, and Tongmun Nursery in Chongju, North Pyongan.

It was the first visit to any part of North Korea besides Kaseong and Mt. Kumkang by a government official in the one year since the Yeonpyeong Island artillery attack on Nov. 23, 2010.

Cho said that the distribution, storage, preparation, and supply of the flour were monitored and that everything was confirmed to be proceeding as planned.

On the situation on the ground, Cho said, “Judging simply from the nursery and two kindergartens, the children’s nutritional condition does not appear to be good.” Cho noted that no heating was being supplied to the facilities despite the cold weather.

Cho said that while North Korean authorities did not official request food aid, a request was made under unofficial circumstances.

Cho also noted that construction efforts were under way on a highway connecting Pyongyang with Sinuiju.

“It is not very far from Pyongyang to Chongju, but I think the trip took about four hours because of the detour around the highway construction,” he said.

Analysts said this appears to be linked to hurried infrastructure building efforts, including highway servicing and construction, amid recent moves by North Korea to rebuild its economy through a stronger economic partnership with China.

UPDATE  27 (2011-11-29): Seoul auctions off “unwanted” DPRK food assistance. According ot the Korea Times:

South Korea has taken steps to auction off some baby food originally intended for North Korean children, an official said Tuesday.

The move comes nearly two months after South Korea dropped a plan to send 5 billion won ($4.3 million) worth of aid to North Korean flood victims, citing no response from the North as the reason for the change of plan.

South Korea had insisted it would deliver baby food, biscuits and instant noodles to the North instead of cement and equipment requested by the North.

South Korea’s Red Cross, which handles relief aid to the North, gave public notice of a bid for 540,000 packs of baby food on Onbid, an auction website run by the state-run Korea Asset Management Corp.

Separately, South Korea has been in talks with local private relief agencies over how to donate the other 290,000 packs of baby food to foreign countries.

Unification Minister Yu Woo-ik has ruled out rice aid to the communist country unless Pyongyang admits to last year’s deadly provocations.

South Korea suspended unconditional aid in 2008 and imposed sanctions on the North last year in retaliation for the sinking of a South Korean warship that was blamed on the North.

The North has denied involvement in the sinking that killed 46 sailors. It also shelled a South Korean border island in November 2010, killing four South Koreans.

Still, South Korea has selectively allowed religious and private aid groups to deliver humanitarian and medical assistance to North Korea.

Also on Tuesday, a Unification Ministry official and four civilians were to return home after a rare trip to the North aimed at ensuring that South Korea’s recent private aid had reached its intended beneficiaries.

UPDATE 26 (2011-11-25): According to Yonhap, ROK officials are traveling to the DPRK to monitor food aid:

A South Korean official and four civilians left for North Korea on Friday on a rare mission to ensure that recent aid from Seoul had reached its intended beneficiaries, an official said.

The trip comes a day after North Korea threatened to turn South Korea’s presidential office into “a sea of fire” in anger over Seoul’s massive military maneuvers near the tense sea border.

…

The Unification Ministry official and four civilians were to arrive in the North’s capital later Friday via Beijing, according to the Unification Ministry, which handles inter-Korean affairs.

It is first time that North Korea has allowed a South Korean official to travel to the isolated country to monitor aid since a conservative government took power in Seoul in 2008.

They are scheduled to visit a day care center and two other child care facilities in the northwestern city of Jongju to monitor how 300 tons of flour were distributed to children and other recipients, according to a civic group.

Ambassadors for Peace Association, a civic group that is partly funded by the Unification Group, donated the flour to Jongju, the birthplace of Unification Church founder Moon Sun-myung.

The civic group said the monitors also plan to discuss details on another 300 tons of flour aid before returning home Tuesday. Some members of the civic group are associated with the controversial Unification Church.

Read previous posts on the ROK’s aid to the DPRK in 2011 below:

(more…)

According to Yonhap:

South Korea will create an exclusive unification account as part of its efforts to prepare for a future merger with North Korea, Seoul’s point man on Pyongyang said Wednesday.

The government plans to set up the unification account in an inter-Korean cooperation fund that is currently worth about 1 trillion won (US$869 million).

The fund already has a separate account earmarked for inter-Korean projects, according to the Unification Ministry in Seoul, which handles North Korean affairs.

Unification Minister Yu Woo-ik made the announcement during a meeting with South Korean reporters on the last day of his three-day trip to Beijing.

The development underscored Seoul’s longstanding commitment to unifying with North Korea. The envisioned account, which needs parliamentary endorsement, is part of South Korea’s efforts to help cushion the cost of re-unification with one of the poorest countries in the world.

A state-run think tank has estimated that the initial costs for the integration of the two Koreas could range from 55 trillion won (US$47 billion) to 249 trillion won ($216 billion).

The estimate, which is projected to cover the first year of integration, was based on the assumption that the two neighbors could be unified two decades from now, according to the Korea Institute for National Unification.

Yu said the government does not have an immediate plan to levy a tax on citizens to help finance the potential unification, though he left open the possibility of collecting a tax.

South Korea has been working on details of a so-called unification tax since last year when President Lee Myung-bak floated the idea of using taxpayer money to help finance unification.

Seven out of 10 South Koreans believed that the costs of unification would outweigh its benefits, according to a recent telephone survey, in the latest sign of public concern over re-unification’s economic burden.

The National Unification Advisory Council, a presidential advisory body on unification, released the results of last week’s poll of about 1,000 people.

The Korea Herald also reported on this story.

Here are some previous posts on reunification costs:

1. KINU study looks to mineral wealth to cover unification costs

2. DPRK risk ‘biggest drag on Seoul’s credit rating’

3. OECD on Korean unification costs

4. Reunification costs

5. Working through Korean unification blues

6. 3 Million NK Refugees Expected in Crisis: BOK

Read the Yonhap story here:
S. Korea pushes to create independent unification account
Yonhap
2011-11-23

The Korea Times reports that Seoul has ended the government’s practice of sending propoganda flyers into the DPRK:

Seoul has suspended its launches of anti-regime pamphlets into North Korea, a military source said Tuesday in the latest sign of easing tension on the peninsula.

The decision comes nearly a year after the South resumed the controversial launches in retaliation for the North’s deadly shelling of Yeonpyeong Island on Nov. 23 last year. The pamphlets are floated across the border attached to giant helium balloons.

The source, who spoke on condition of anonymity, said the launches have been stopped for “a few months” and that the decision was made in view of the “government’s efforts to improve inter-Korean ties,” Yonhap News Agency reported.

Ending an 11-year moratorium, the government resumed the launches and allowed citizen groups to send their own balloons after the shelling that killed four people.

The North has called loudly for the halting of the act, calling it a “war action.” On several occasions, it threatened to fire on border sites where civilians float the balloons, which typically carry pamphlets information on the outside world, including news of the popular uprisings in the Middle East, as well as DVDs and dollar bills.

The source said the military would continue to broadcast anti-regime messages from giant loudspeakers placed near the border. Those were resumed after a 6-year moratorium in response the North’s sinking of the warship in which 46 sailors were killed.

Tension between the sides have been high since 2008, when the Lee Myung-bak administration, seeking a fundamental change in the Pyongyang’s belligerence, implemented a hard line policy that slashed aid to the North and tied its provision to denuclearization steps.

The icy relations have thawed somewhat since July, when the two Koreas sat down for surprise talks in a bid to resume six-party talks on the North’s denuclearization.

Seoul also replaced its hard-unification minister with Yu Woo-ik, who has gradually expanded inter-Korean exchanges under a more “flexible” approach.

In further sign of warming, Seoul completed its delivery of hepatitis B vaccines intended to reach 1 million children in the North, a unification ministry official said.

Worth $942,300, the vaccines were delivered to the North through international relief agencies in the South in two installments. It coincided with Seoul’s recent decision to deliver $6.94 million worth of medical aid northward through the World Health Organization.

Private sector activists continue to send leaflets.

The Daily NK reports that NLL incursions by DPRK ships have decreased:

New statistics have shown a significant reduction in the number of detected North Korean intrusions across the Northern Limit Line (NLL) this year.

According to the data, ‘Intrusions across the Northern Limit Line in the Past Six Years’, submitted by Song Young Sun to the National Assembly Defense Committee, there have only been 16 intrusions this year to November, representing only 1/6 of the 95 intrusions which occurred last year.

This is also the lowest number of intrusions over the last six years; fewer than 2006 (21), 2007 (28), 2009 (50) and 2010 (95).

Commenting on the data, Song told the committee, “It seems that the military authorities have strengthened their military patrols and the government is improving inter-Korean relations, and so the North seems to be controlling tensions in that area.”

To give a sense of a desire for reduced tensions between  the two Koreas, here is a list of recent stories from my “South Korea” post index:

1. ROK to resume food and medical aid.

2. Seoul to begin Kaesong road repairs.

3. ROK government planning to resume construction and relax sanctions in Kaesong zone

4. South Korea to allow firms to resume Kaesong construction

I wonder if the trend has anything to do with this.

However, there are some recurring serious issues:

1. The Cheonan and Yonphyong 

2. KEDO

3. Kumgang

Read more here:
Seoul halts flying leaflets to N. Korea
Korea Times http://www.koreatimes.co.kr/www/news/nation/2011/11/116_98791.html
Kim Young-jin
2011-11-15

NLL Intrusion Numbers Falling
Daily NK http://www.dailynk.com/english/read.php?cataId=nk00100&num=8413
Park Seong Guk
2011-11-16