Archive for the ‘South Korea’ Category

Bank of Korea estimate of North Korean economy in 2015 published

Friday, July 22nd, 2016

I have added the report to my DPRK Economic Statistics Page. You can download the PDF here.

The Bank of Korea claims the DPRK economy shrank in 2015 by 1.1%

This number has numerous drawbacks which I have discussed before.

According to the Yonhap:

North Korea’s economy is estimated to have contracted 1.1 percent last year amid negative growth in most industries, South Korea’s central bank announced Friday.

The Bank of Korea (BOK) has issued an annual report on the estimated gross domestic product (GDP) of one of the world’s most secretive nations.

It said the communist country’s GDP shrank 1.1 percent in 2015 from a year earlier, the first negative growth since 2010.

The bank cited a drop in crop and mining output by 0.8 percent and 2.6 percent, respectively.

The manufacturing sector suffered a 3.4 percent decline. The electricity, gas and tap water business also tumbled 12.7 percent due to a fall in hydroelectric power production attributable to a drought, according to the BOK.

But the construction field posted a 4.8 percent rise, and the service sector grew 0.8 percent.

The North’s mining and manufacturing industries accounted for 32.7 percent of its GDP, down 1.7 percentage points from 2014.

The BOK put the North’s gross national income (GNI) at 34.5 trillion won ($30.3 billion), 45 times less than that of South Korea. The North has around 25 million residents, half of the South’s population.

The data also showed that the North’s trade volume totaled $6.25 billion, down 17.9 percent on-year.

Exports slipped 14.8 percent to $2.7 billion, and imports shed 20 percent to $3.56 billion.

The North is under heavy U.N.-led economic sanctions for its nuclear and missile activities.

Since no accurate economic data from North Korea are available, the BOK said the statistics are based on estimates using methodologies applied to gauge South Korea’s own economy. Thus, it’s not desirable to directly compare the data with those of other foreign nations, added the bank.

Here is coverage in the Wall Street Journal:

North Korea’s economy likely shrank last year for the first time in five years, South Korea’s central bank said, potentially increasing the ruling challenge for leader Kim Jong Un, who has promised to boost prosperity while confronting the U.S. and other nations with nuclear weapons.

The Bank of Korea said Friday that it estimated North Korean gross domestic product fell 1.1% in 2015, the first decline since 2010 and the largest fall since a 1.2% contraction in 2007.

North Korea doesn’t release official statistics or allow outsiders to make assessments of its economy from within the country. As a result, the BOK’s estimate of North Korean GDP is often cited as the best guess. It bases its calculations on information from Seoul’s spy agency and other authorities that study North Korea.

The biggest recent economic setback for North Korea has come from a sharp fall in the price of coal, its main export product, and a slowdown in China, its sole major trading partner. The South Korean central bank said the North’s external trade was valued at $6.25 billion in 2015—down 18% from a year earlier.

New international sanctions on North Korea following its nuclear bomb test in January this year and long-range rocket launch in February may increase the economic pressure on Pyongyang. For the first time, United Nations sanctions target North Korea’s commodities trade, while the U.S. has sought to cut off Pyongyang’s links to the international financial system.

North Korea insists it will continue to pursue twin policy priorities of nuclear weapons development for its defense while seeking to boost its economy. In his first speech in 2012, Mr. Kim said North Koreans should “not have to tighten their belts again” and has regularly visited economic projects such as factories and farms.

However, output in nearly all North Korean industries contracted last year, including agriculture, fishing, mining and energy, the South Korean central bank said in its report.

Construction was a rare bright spot, growing an estimated 5%, as Mr. Kim has pursued the redevelopment of areas of central Pyongyang, including major new housing projects. The Bank of Korea also estimated a 0.8% increase in service-sector output, reflecting the emergence of unofficial market trading and underground financial services.

The North’s per capita income was around $1,224 in 2015, the bank said, compared with South Korea’s $27,200.

Here is coverage in Reuters:

North Korea’s economy contracted in 2015 at the sharpest pace in eight years, an estimate from the Bank of Korea showed on Friday, as low global commodity prices landed a blow to exports, a key driver for the impoverished country’s economy.

The gross domestic product in North Korea last year fell a real 1.1 percent, South Korea’s central bank said, which was the first fall since 2010 and compares with a 1.0 percent gain in 2014. It also marked the fastest decline since a 1.2 percent drop in 2007.

Isolated North Korea does not publish economic data.

All sectors except construction and services declined, a likely burden for North Korean leader Kim Jong Un already under pressure from international sanctions against multiple provocations including a nuclear test in January.

“The key reason for the GDP contraction looks to be trade as global commodity prices fell while China demand also declined,” said a Bank of Korea official, who declined to be named as he was unauthorized to speak to media.

“North Korea’s main commodity exports are coal and iron ore, which likely all declined last year.”

Neighboring China is North Korea’s chief trading partner.

The Bank of Korea data showed exports in North Korea fell 14.8 percent last year in annual terms as mineral product shipments slumped 14.7 percent. This was far worse than a 1.7 percent decline seen in 2014.

Imports dropped a faster 20.0 percent last year, compared with a 7.8 percent increase in 2014.

The central bank official said trade is expected to worsen this year as it becomes difficult for North Korea to boost shipments with other countries with international sanctions likely to grow heavier following Pyongyang’s continued missile launches and nuclear threats.

Construction rose 4.8 percent last year, accelerating from a 1.4 percent gain in 2014, the same data showed.

Meanwhile, a 0.8 percent gain in services last year reflects North Korea’s economic shift towards capitalism as the black market there has become more pervasive. Financial services have also grown, which likely contributed to the gain, the BOK official added.

The Bank of Korea has released GDP data on North Korea every year since 1991 based on information received from related sources, including the Ministry of Unification.

Here are comments from The Institute for Far Eastern Studies (IFES):

North Korean GDP Dropped Estimated 1.1% in 2015

The Bank of Korea (BOK), South Korea’s central bank, released data on July 22, 2016 indicating that the North Korean economy shrunk by 1.1% in 2015. If this estimate is correct, this would mean that the North Korean economy contracted for the first time since Kim Jong Un came to power in 2012. At the same time, these estimates also indicate that the gap in per capita GDP between North and South Korea widened from 21.3 times in 2014 to 22.2 times in 2015.

The last time North Korea’s annual growth rate was below zero in BOK statistics was five years ago. Back in 2009, it was estimated to be -0.9%, edging up to -0.5% in 2010. However, the last four years have been a time of continued expansion according to the BOK with North Korea’s economy estimated to have grown 0.8% in 2011, 1.3% in 2012, 1.1% in 2013 and 1.0% in 2014. The estimated growth rate for 2015 was the lowest since the -1.2% of 2007.

The BOK’s data indicates that while growth sped up in North Korea’s construction sector in 2015, the performance of the agriculture, fisheries, mining, manufacturing, and public service (electricity, gas and water) sectors was poor.

In the mining sector, declining magnesite and iron ore production resulted in a 2.6% loss of output, while in manufacturing, both light and heavy industrial saw production decline and consequently the sector contracted by an estimated 3.4%.

Output in the public service sector fell by a dramatic 12.7%. The BOK highlighted a drought in 2015 as being a key contributory factor in this regard: reducing hydroelectricity output, as well as exerting a negative influence on steel and machine tool production. At the same time, gains in agricultural and fisheries sector, which had been estimated to be 1.2% in 2014, was partially reversed in 2015, with the sector believed to have contracted by -0.8%. Although output in the livestock and fisheries sector expanded rapidly, this was offset by declines in cereals production including rice and corn due to drought.

Conversely, the construction sector expanded by 4.8% as both output in building and public works-related construction rose. The service sector, principally public services, the wholesale and retail service sector, and communications, grew by an estimated 0.8%.

North Korea’s nominal Gross National Income (GNI) was estimated to be 34.5 trillion South Korean won (KRW), i.e. 2.2% of South Korea’s nominal GNI. Per capita GNI rose to 1.393 million KRW, an increase on the 2014 figure of 1.388 million, but still only 4.5% of South Korea’s per capita GNI.

The gap between North and South Korean per capita GNI rose from 21.3 times in 2014 to 22.2 times 2015. At the same time, combined North Korean commodity imports and exports declined by 17.9% to $6.25 billion (excluding North-South trade) compared to the previous year ($7.61 billion).

The year 2015 saw a decline in the price of minerals, including iron ore, internationally. Reduced demand for North Korean anthracite in China had an impact, with North Korean exports declining to $2.7 billion, a 14.8% decline year-on-year. Textile exports increased by 5.3%, but mineral product exports fell by 14.7%. Income (totaling $3.56 billion), chiefly from mineral products and textiles, thus shrunk by a dramatic 20%.

The difference in the scale of North Korean and South Korean trade volumes rose to 154.1 times in 2015 (an increase from 144.3 times in 2014). At the same time, according to South Korean Ministry of Unification statistics, inter-Korean trade rose by 15.7% year-on-year to $2.71 billion.

Here are comments by Marcus Noland.

Share

Not surprising: Inter-Korean trade to fall in 2016

Friday, May 13th, 2016

According to the Choson Ilbo:

Trade with North Korea is expected to be practically zero this year now the joint Kaesong Industrial Complex has been shut down.

According to a 2016 White Paper published by the Unification Ministry on Thursday, last year’s cross-border trade volume was a record US$2.7 billion, up 15.9 percent from 2014, thanks to an increase in trade through the industrial park.

But that accounted for 99.6 percent of all cross-border trade since other trade had already been suspended under earlier sanctions in the wake of the sinking of the Navy corvette Cheonan in 2010.

Now the industrial park has been closed there is no trade left, the ministry said.

Since the North’s latest nuclear test in January, Seoul has also halted humanitarian aid to the North. Last year, Seoul gave Pyongyang humanitarian aid worth W25.4 billion, up 30 percent from 2014 (US$1=W1,167).

Read the full story here:
Trade with N.Korea Falls to Near-Zero
Choson Ilbo
Kim Myong-song
2016-5-13

Share

DPRK builds replica Blue House

Wednesday, April 27th, 2016

Blue-house-replica-ROK

The-real-blue-house

Pictured above: (Top) South Korean military image of the replica blue house built in North Korea (Bottom) A Google Earth satellite image of the Blue House in Seoul.

The South Korean military is reporting that the North Koreans have built a replica of the Blue House in “Dewonri/Daiwonri”. According to the Japan Times:

North Korea is preparing to blow apart a replica of South Korea’s presidential Blue House on an artillery range outside Pyongyang, in an apparent propaganda exercise, the South’s military said Wednesday.

An official with the Joint Chiefs of Staff in Seoul said the North’s military had been detected building the half-sized replica at the Daiwonri range near the capital earlier this month.

“The North is apparently preparing to showcase a mock attack on the Blue House using the replica as a target,” the official said.

Around 30 artillery pieces, hidden under coverings, have been brought to the range.

“The exercise is believed to be aimed at stirring up hostility against the South, summoning up loyalty (to leader Kim Jong Un) and fueling security concerns in the South,” the official said.

I refer to this area as the “Taewon-ri (대원리) Artillery Range”, and I have previously written about it at NK News here. The Americans call the location “Sungho Dong Military Training Area”.

The South Korean military also released a second photo:

area-near-Taewon-ri

You can see this location on Google Earth at 38.944429°, 125.886490°, however the replica Blue House is too recently built to appear on Google Earth imagery.

Share

Kim Jong-un’s mother’s grave (Ko Yong-hui)

Friday, April 8th, 2016

I reported this in Radio Free Asia last week….

It has never been announced in the North Korean media, but Kim Jong-un has “quietly” built a grave for his mother, Ko Yong-hui, on Mt. Taesong.

Ko-grave-2016-4-8

Pictured above (Google Earth): The grave of Kim Jong-un’s mother, Ko Yong-hui.

The site where the grave was built was cleared of a few small buildings by May 2012 (Kim Jong-il died in December 2011).  Construction appears to have been completed by October 2012.

Although the grave is on Mt. Taesong, it does not appear to be a revolutionary site. It is not featured on a nearby map of revolutionary sites on Mt. Taesong, and North Koreans are not being brought to it by the bus load (very little traffic in fact). Kim jong-un may have visited the grave unofficially, but never as a public ritual. The only foreigner I have spoken to who has visited the site saw only one guard on duty. So maybe someday years from now it is intended to be a revolutionary site, but not for now.

Back in 2010, Michael Madden posted this picture of Ms. Ko’s birthplace in Osaka, Japan. I was able to locate it on Google Earth at these coordinates:  34.663147°, 135.531080°

Ko-birthplace

Ko’s father (Kim Jong-un’s maternal grandfather) was buried on Jeju-do in South Korea, but the family had his grave moved to an undisclosed location to prevent it from attracting crowds. It is highly unlikely that Kim Jong-un will ever visit this grave.

UPDATE: A reader sent in this very helpful information:

Ko’s father is not buried on Jeju-Do! This grave is a so-called “가묘”, an “empty or fake grave”. The reason for erecting a “가묘” was to be able to perform the (in Korean culture) important ancestor rites, since they are actually without any remains of the deceased since their whereabouts are mostly unknown. Especially after the Korean War, many “가묘” were erected in Korea, because many family members just disappeared …

Here is more information about the “fake” tomb of Kim Jong Un’s grandfather in Jeju-Do: http://m.blog.daum.net/_blog/_m/articleView.do?blogid=0Li0k&articleno=7763730

Under the photo it is written “가묘” (for the empty/fake tomb)

On the tombstone you may read the following sentence:  “사정에따라 허총을 만들다” (because of circumstances an empty/fake tomb was made)

Here they use 허총, this word has the same meaning as 가묘.

Further the following is written on the tombstone:

“His name was 고경택 (Ko Kyong-thaek)

He was born in 1913, in 1929  he moved to Japan and he died in 1999.

The last two lines mention the name of his father (Ko Yong-ok) and his six sons: Ko Yong Hun, Bong Hun, In Hun, Kwang Hun, Chol Hun and Sang Hun.

His daughters (among them obviously Ko Yong Hui) are not mentioned.

Those 가묘/허총 (fake tombs) can also be seen in North Korea!

The Korean wiki-page about the Patriotic Martyrers Cemetery in Pyongyang includes the following information:

“대한민국에서 사망한 김삼룡, 김달삼, 최일천, 조봉암, 김종태, 최영도, 최백근, 이현상 등은 가묘 형태로 묘소가 마련되어 있다.”

 Roughly: (all the mentioned martyrs) died in South Korea, that is why a 가묘 had to be set up …
Share

The Kaesong Industrial Complex and inter-Korean tensions (2015)

Monday, December 21st, 2015

UPDATE 5 (2015-12-24): Koreas reach deal on land use fee at Kaesong complex. According to Yonhap:

South and North Korea have reached an agreement on the land use fee amount for South Korean firms operating a joint industrial park across the border, the Unification Ministry announced Thursday.

The deal calls for South Korean firms at Kaesong Industrial Complex to pay US$0.64 per square meter every year, it said.

The complex in the North’s border city of Kaesong opened in 2004 as a symbol of inter-Korean reconciliation. A total of 124 South Korean firms are running factories with about 54,000 North Koreans working in them.

Kaesong has served as a major revenue source for the cash-strapped North, while South Korea has benefited from cheap but skilled North Korean labor.

The South’s firms were exempted from land use fees for a decade under a 2004 deal. The two sides launched talks over the issue again in late 2014.

“The government hopes that the agreement will help South Korean firms focus on their businesses in a stable manner,” said a ministry official, asking not to be named.

The North initially claimed that the South should pay $1 per square meter for all areas that were supposed to be developed under the 2004 agreement, according to an industry source.

But Seoul insisted that it will pay only around half of the North’s offered price for the land that the South’s firms are actually using. They are currently using about 25 percent of the 1 million square meter land.

“The government hopes that the two Koreas could resolve other pending issues related to the operation of the factory zone through dialogue,” the official added.

The operation of the complex has been affected by the ups and downs of inter-Korean ties. In April 2013, the North abruptly suspended the operation of the complex for about five months, citing inter-Korean tensions.

Ending a months-long wage dispute, the two sides agreed in August to raise the minimum wage for the North’s workers by 5 percent to US$73.87 per month.

UPDATE 4 (2015-12-21): North and South Korea cannot agree on land use fees. According to Yonhap:

South and North Korea have been sharply divided over how much South Korean firms operating at a joint industrial park in the North should pay for land use, government officials said Monday.

The two Koreas are in talks over the payment by 124 South Korean firms over land use fees at Kaesong Industrial Complex where about 54,000 North Koreans are working, according to the officials at the Unification Ministry.

The complex in the North’s border city of Kaesong was opened in 2004 as a symbol of inter-Korean reconciliation. It has served as a major revenue source for the cash-strapped North, while South Korea has utilized cheap but skilled North Korean laborers.

The South has been exempted from land use fees for a decade, but the measure is set to expire this year.

The North claims that the South should pay US$1 per square meter for the total land that was supposed to be developed under the 2004 deal, according to an industry source.

But Seoul insists that it would pay around half of the North’s offered price for only the land that the South’s firms are currently using.

“The two sides are seriously involved in talks over the matter,” said a ministry official, declining to elaborate.

On Nov. 4, North Korea denied the entry of two South Koreans to the factory park amid speculation that it may be trying to gain leverage in the talks on the land use fee.

Two days later, the North averted its ban on the entry of the two including a vice chairman of the South’s committee on the inter-Korean facilities.

Ending a months-long wage dispute, the two Koreas agreed in August to raise the minimum wage for the North’s workers by 5 percent to US$73.87 per month.

UPDATE 3 (2015-8-25): Yonhap with additional information on the agreement:

Unification Minister Hong Yong-pyo said Tuesday that an inter-Korean deal struck earlier in the day marks the first time that North Korea had expressed regret over its provocations.

In the agreement, the North “expressed regret” over the recent injury of South Korean soldiers in the explosion of land mines laid by North Korea in the Demilitarized Zone (DMZ) separating the two Koreas.

“It is the first time that the North offered an apology and expressed regret after using the subject of North Korea (in its statement),” Hong said at the ruling Saenuri Party’s workshop.

“The biggest strength that led to this meaningful agreement was that the people stayed together,” Hong said.

The South also technically secured the North’s promise not to repeat such an attack, putting a clause into the deal that it will resume loudspeaker propaganda broadcasts along the DMZ if an “abnormal case” occurs.

“When North Korea did not show responsibility or demanded something unfair during the course of the dialogue and the negotiation, I mostly used a phrase that said ‘the people are watching,'” Hong said.

UPDATE 2 (2015-8-25): South Korean business community welcomes deal. According to Yonhap:

South Korea’s business community welcomed a landmark deal Tuesday on defusing inter-Korean tensions, pledging to rev up efforts to expand economic ties with North Korea.

After days of intensive high-level talks, the Koreas agreed to ease tensions sparked by Pyongyang’s landmine attack that injured two South Korean soldiers early this month.

Calling the agreement a great relief, the Federation of Korean Industries (FKI), the lobby for South Korea’s family-run conglomerates, said it will push ahead with overall plans for boosting economic cooperation with North Korea

“North Korea’s latest provocations were a source of concern because they could hamper inter-Korean economic cooperation,” an FKI official said. “We are greatly relieved at the news.”

Although it’s unlikely that Seoul-Pyongyang economic cooperation will make immediate headway, the FKI will gradually go ahead with the necessary steps, including the establishment of economic offices in the capitals of both Koreas, he added.

The agreement also came as good news to South Korean firms currently doing business at the inter-Korean industrial complex in the North Korean border town of Kaesong.

“The firms underwent a lot of troubles amid the worsened relations between the two Koreas, so (now that they have reached a deal,) we are hoping for improved business conditions down the road,” said Jeong Gi-seob, chairman of the association of 124 South Korean small and medium-sized companies operating at the zone.

The South Korean companies operate factories at the industrial park, the last remaining symbol of inter-Korean reconciliation, employing about 54,000 North Korean workers.

The Korea Chamber of Commerce and Industry (KCCI) also promised to play its part in promoting economic relations with the North following the latest agreement.

“The business community will redouble efforts to lay the practical groundwork for the mutual development of the two Koreas,” a KCCI official said. “We also hope that a thaw in inter-Korean relations will lead to more exchange as well as the normalization of economic ties.”

UPDATE 1 (2015-8-24): The North and South Koreans have agreed to a solution to the situation. According to KCNA via Yonhap:

1. The north and the south agreed to hold talks between their authorities in Pyongyang or Seoul at an early date to improve the north-south ties and have multi-faceted dialogue and negotiations in the future.

2. The north side expressed regret over the recent mine explosion that occurred in the south side’s area of the Demilitarized Zone (DMZ) along the Military Demarcation Line (MDL), wounding soldiers of the south side.

3. The south side will stop all loudspeaker propaganda broadcasts along the MDL from 12:00, August 25 unless an abnormal case occurs.

4. The north side will lift the semi-war state at that time.

5. The north and the south agreed to arrange reunions of separated families and relatives from the north and the south on the occasion of the Harvest Moon Day this year and continue to hold such reunions in the future, too and to have a Red Cross working contact for it early in September.

6. The north and the south agreed to vitalize NGO exchanges in various fields.

ORIGINAL POST (2015-8-20): The two Korea’s literally just finished hammering out a new agreement on “wages” for North Korean workers at the Kaesong Industrial Complex. However, with the ink barely dried, a new round of escalating conflict between the Koreas is affecting operations at the KIC…

According to Yonhap:

South Korea said Friday it will limit the entry of its nationals into a joint industrial park in North Korea following the exchange of artillery fire between the two sides.

The Unification Ministry said it will only permit South Korean businessmen directly involved in the operation of factories at the Kaesong Industrial Park to enter the complex.

But other South Koreans, including those working at subcontractors, will not be allowed to move in and out of the complex in the North’s border city of the same name, the ministry said.

South Korea fired back at North Korea on Thursday following the North’s firing of shells at a South Korean front-line military unit in the western area of the heavily fortified border. No damage was reported.

A total of 124 South Korean small and medium-size enterprises operate factories at the industrial park, the last remaining symbol of inter-Korean reconciliation. About 54,000 North Koreans work there.

South Korean businessmen safely returned to the South from the complex on Thursday despite the North’s provocation.

The ministry said it has taken measures to ensure the safety of South Koreans who are temporarily staying in the North.

Read the full story here:
S. Korea to partially ban entry into joint industrial park
Yonhap
2015-8-20

Share

Rajin – South Korea water shipment

Monday, December 7th, 2015

According to Yonhap:

Containers carrying bottled water produced near North Korea arrived in South Korea on Monday via a North Korean port as part of a three-way logistics project involving the two Koreas and Russia, government officials said.

Ten containers full of bottled water produced at Erdaobaihe in northeastern China arrived at Busan, South Korea’s southeastern port city, earlier in the day after leaving from the North Korean city of Rajin bordering Russia, officials said.

The mineral water was produced at a factory run by Nongshim, South Korea’s largest noodle maker, in Erdaobaihe, a town close to Mount Baekdu in North Korea, the highest peak on the Korean Peninsula.

The shipment is part of the two Koreas’ third pilot operation of the project, which calls for shipping some 120,000 tons of Russian coal to three South Korean ports from the North Korean port city of Rajin.

The coal, which was transported from Russia’s border city of Khasan on a re-connected railway, arrived in South Korea in late November.

The so-called Rajin-Khasan logistics project is a symbol of three-way cooperation and an exception to Seoul’s punitive sanctions against Pyongyang following the North’s deadly sinking of a South Korean warship in 2010.

In November 2014, the first shipment carrying 40,500 tons of Russian coal arrived in South Korea without incident in the first test run of the project. The second test was conducted in April.

The project is also part of President Park Geun-hye’s vision for a united Eurasia, known as the Eurasia Initiative, which calls for linking energy and logistics infrastructure across Asia and Europe.

Read the full story here:
Containers carrying bottled water arrive in S. Korea via N. Korean port
Yonhap
2015-12-7

Share

Koreas, Russia start third test run for Rason coal shipments

Tuesday, November 17th, 2015

According to Yonhap:

South and North Korea kicked off another test operation Tuesday of their joint logistics project to ship Russian coal to the South through a port near the border with Russia, government officials said.

Some 120,000 tons of Russian coal will be delivered to three South Korean ports on a ship from the North Korean port city of Rajin after being transported from Russia’s border city of Khasan on a re-connected railway in the third run of the so-called Rajin-Khasan logistics project. The trilateral project will be carried out until Nov. 30.

It is a symbol of three-way cooperation at a time when inter-Korean exchanges have become stagnant following the deadly sinking of a South Korean warship by the North in 2010.

In November 2014, the first shipment carrying 40,500 tons of Russian coal smoothly arrived in South Korea in the first operation of the project. The second test was conducted in April.

The initiative involves three South Korean firms — top steelmaker POSCO, shipper Hyundai Merchant Marine Co. and state train operator Korail Corp.

A group of some 20 government and company officials are set to cross the border between Russia and North Korea on a bus later in the day after they departed from Vladivostok a day earlier, according to the Unification Ministry.

They will stay in the North’s city till Friday to check the Rajin port’s capacity to handle shipments and to see how smoothly vessels can be berthed there, the ministry said.

The South Korean firms will decide on whether to clinch a formal contract based on the outcome of the pilot operation. It is highly likely that the signing of a formal deal could be delayed into next year.

“It is unclear when the formal contract could be signed,” said a ministry official, asking not to be named.

The project is also part of President Park Geun-hye’s vision for a united Eurasia, known as the Eurasia initiative, which calls for linking energy and logistics infrastructure across Asia and Europe.

The project is regarded as an exception to South Korea’s punitive sanctions on the North, which has suspended almost all trade and exchange programs, apart from a joint factory park project in the North’s border city of Kaesong.

Read the full story here:
Koreas, Russia start third test run for logistics project
Yonhap
2015-11-17

Share

Civilian inter-Korean exchanges up in latter half of 2015

Monday, November 9th, 2015

According to Yonhap:

The number of South Koreans visiting North Korea has shot up since the two Koreas reached a deal in August to spur inter-Korean civilian exchanges, government data showed Monday.

The number of South Koreans who traveled to the North reached 418 in the January-September period, excluding those who moved in and out of the joint industrial park in the North’s border city of Kaesong, according to the data by the Unification Ministry.

But in October alone, the number of such people came in at 880 as the two Koreas held several joint events such as an inter-Korean project to excavate the ancient palace site and a workers’ football friendly.

The October tally did not include the South Koreans who crossed the border for the reunions for families separated by the 1950-53 Korean War, held on Oct. 20-26.

The increase in such exchanges is due to the two Koreas reaching a landmark deal on Aug. 25 to defuse military tension.

The value of humanitarian assistance to North Korea has also increased, according to the ministry.

In April, the government gave approval to Ace Gyeongam, a foundation run by bed maker Ace, to send fertilizer to North Korea for the first time since 2010, when Seoul imposed sanctions on the North over a deadly warship sinking that year.

Ace Gyeongam also provided a small amount of fertilizer and other assistance needed for a greenhouse project in North Korea last month.

South and North Korea saw more vibrant civilian exchanges, but there has been no progress over high-level talks as the North has not responded to South Korea’s proposal to have preparatory contact for such inter-Korean dialogue.

Read the full story here:
Civilian inter-Korean exchanges on the rise: data
Yonhap
2015-11-9

Share

20 DPRK officials defected in 2015

Wednesday, October 21st, 2015

According to the Choson Ilbo:

Twenty North Korean officials have defected to South Korea so far this year, the National Intelligence Service told a National Assembly audit Tuesday.

They were mostly diplomats but also include a high-ranking officer from the powerful Army politburo.

NIS chief Lee Byung-ho told lawmakers the number of North Korean officials defecting from overseas is steadily increasing. Lee added that all 20 who defected this year now live in South Korea.

Although they rank lower than the late Hwang Jang-yop, a senior Workers Party secretary, some are from the elite class, Lee said.

A North Korea source said the Army politburo member defected in April, when he was sent to Beijing for a trading company operated by the politburo.

The Army politburo is in charge of monitoring the activities of all North Korean soldiers and is considered a central part of leader Kim Jong-un regime. Its leader, Hwang Pyong-so, is the second-most powerful man in the state.

Early this year, a mid-level diplomat based at the Hong Kong office of Room 39, the Workers Party office that handles Kim’s slush funds, defected with his family.

Presumably these individuals did not go to Hanawon so their numbers will need to be added to the official numbers released by the Ministry of Unification.

Read the full story here:
20 N.Korean Officials Defected to S.Korea This Year
Choson Ilbo
2015-10-21

Share

Kaesong Complex’s cumulative output reaches USD$3 billion

Monday, October 12th, 2015

Institute for Far Eastern Studies (IFES)

The Kaesong Industrial Complex has reached 3 billion USD (3.5 trillion won) in cumulative output since it started operation 11 years ago. According to the Ministry of Unification, between 2005 (when operation went into full swing) and July 2015, the complex’s total output reached 2,996,160 USD.

This year the Kaesong complex recorded a total of 320 million USD in output through July, an average of 46 million USD each month. This guarantees that cumulative production surpassed 3 billion USD sometime in August.

The annual output of the Kaesong Industrial Complex started at 14.9 million USD in 2005 and reached 180 million USD in 2007, exceeding 100 million USD for the first time.

Except for 2013 (when operations were suspended for about five months), output has grown rapidly each year since 2007, shooting up to 470 million USD last year.

While it took the complex five years to reach 1 billion USD in cumulative output, it took only three additional years to surpass 2 billion USD by 2013, and just two more years to exceed 3 billion USD.

If the complex can maintain a similar rate of output in the second half of this year as in the first half (it produced 278 million dollars-worth in the first half), this year it will surpass an annual output of 500 million USD for the first time.

Even between March and May of this year, when tensions were heightened due to North Korea’s demands for a unilateral minimum wage increase, production was up 10-20 percent over the previous year. Thus, the Kaesong Industrial Complex has maintained a stable growth rate.

The number of resident companies at the complex has also increased significantly. While in 2005 only 18 companies did business at the complex, currently there are 124. Furthermore, the number of North Korean workers at the complex has risen nine-fold, from 6,000 at the beginning of its operation to approximately 54,000 at present.

Looking at the Kaesong complex companies by industry, textile companies account for over half of companies at 58 percent; machinery metal companies account for 19 percent; electronics companies, 11 percent; and chemicals companies, 7 percent.

The cumulative number of people who have visited the Kaesong Industrial Complex reached 1,100,000 this August, while 723,000 vehicles have visited the complex.

Share