North Korean Economy Watch

According to the Donga Ilbo:

North Korea has re-frozen and re-seized South Korean facilities at the Mount Kumgang resort that were reopened in the latest reunions of inter-Korean separated families.

An official at the South Korean Unification Ministry said Sunday that the North attached “frozen” labels on dining and container-type lodging facilities and a vehicle maintenance plant at the resort owned by Hyundai Asan Corp. of South Korea.

Pyongyang will also likely attach “seized” labels on a family reunion center owned by the South Korean government where the reunions took place.

You can read about the family reunions here.

Read the full story here:
NK Re-freezes S. Korean Facilities at Mount Kumgang
Donga Ilbo
11/15/2010

Institute for Far Eastern Studies (IFES)
NK Brief No. 10-11-13-1
11/13/2010

The construction cost for six inter-Korean cooperative industrial parks like the Kaesong Industrial Complex would carry a construction bill of 44 billion Won. According to “Analysis of Examples of Inter-Korean Cooperation in the Construction Field and the Direction of Industrial Park Development within North Korea,” a recent report by the Construction Economy Research Institute of Korea, “Promotion of the North Korean construction market by the [South Korean] construction industry would not only increase the limited demand for the South Korean construction [field], but will also provide new growth to our economy.”

According to the report, there has been almost no cooperative construction project within the construction field since 1988. On the other hand, tourism, industrial parks, physical fitness and religious projects have provided opportunities for construction companies. These projects generally call for construction equipment, materials, technicians and designs from South Korea, and land, labor, aggregate, etc. from the North. If six industrial parks on the same scale as the KIC were to be built, it would cost 43.09 billion Won. Of this, 4.07 billion won would cover government costs, while the actual cost of construction would be 39.02 billion won.

If the KIC, currently undergoing the first phase of construction, were to complete all three phases of the original plan, the 19.9 square-kilometer complex would house 2,000 businesses. The research institute calls for the completion of phases 2 and 3 in the KIC, as well as the construction of industrial parks at Rajin-Sonbong, Sinuiju, Haeju, Nampo, and Wonsan.

Rajin-Sonbong and Sinuiju are both ‘Free Economic Trade Zones’, and as special administrative zones, they offer large-scale industrial plots in an effort to attract foreign capital. In addition, it was agreed at the second inter-Korean summit, in October 2007, that Haeju would be developed. Furthermore, a light-industrial complex in Nampo, on the West Sea, and a heavy and chemical industry in Wonsan have been established.

The industrial zones, however, constitute only part of the construction demand. Roads and rails connecting the complexes, port facilities, power generation plants, cities to support production workers, and other derivative projects would also need to be constructed. In other words, the building of an industrial zone would lead to significant peripheral construction demand, as well.

Assuming that inter-Korean tensions were eased and North Korea decided to open itself up to the South, if construction on the six industrial zones could begin by the middle of next year, it is expected that they could all be completed by 2021. In addition, the construction and operation of the six zones could provide the impetus for quickly improving the North Korean economy, while also boosting the importance of South Korea to the North’s economy.

In order to see this accomplished, the research institute found that the government needs to boost activity in the KIC; expand the distribution network between the KIC, Kimpo, and Kangwa; guarantee free management authority in the KIC; iron out customs and transportation procedures; ensure a steady supply of North Korean laborers; and strengthen the ties between the KIC and North Korea’s domestic economy.

If, in the future, North Korea is to open its doors to cooperation, it is expected that foreign companies will also participate. Therefore, when considering long-term profits, it is necessary to spur interest in North Korea’s construction market. The research institute suggested that it was also necessary to construct a training center to teach North Korean construction workers the technical skills needed to ensure maximum potential.

According to Yonhap:

A former North Korean spy accused of collecting information on defectors from the communist state was sentenced Friday to five years in jail.

Prosecutors had charged the 63-year-old defendant, identified only by his surname Han, with handing over information about North Korean defectors to Pyongyang’s agents from 1996 until recently.

The Seoul Central District Court said harsh punishment was required in this case because if the court were to be lenient, “there may be other crimes and North Korea may try to take advantage.”

It said that there was consideration, however, for the fact that the defendant committed the crime out of longing for the family he left behind in North Korea.

The former spy from North Korea had switched sides in 1969 when he was arrested for infiltrating into the South on espionage missions. But the prosecution’s investigation discovered that he had been hired back by the North’s military in the process of trying to contact his family.

South Korea’s National Security Law prohibits its citizens from contacting North Koreans without government approval and engaging in activities benefiting the North.

Nearly 20,000 North Koreans, many of them women, have defected to South Korea as of the end of August this year since the 1950-53 Korean War, according to the Unification Ministry.

Read the full story here:
Former N. Korean spy sentenced to five years for espionage
Yonhap
Kim Eun-jung
11/12/2010

According to TradingMarkets.com:

Top South Korean steelmaker POSCO pledged Thursday to provide more jobs to North Korean defectors struggling to settle in their newfound capitalist homeland.

Under a memorandum of understanding (MOU) signed with the Unification Ministry, POSCO promised to hire more defectors at its “social enterprise” subsidiaries set up in part to help the underprivileged.

POSCO’s Songdo SE, one such firm, now employees 105 people from the needy classes of society, including 35 defectors from North Korea, and plans to increase the number of defector employees to 50 by next year.

The firm is in charge of building maintenance for POSCO Engineering & Construction’s new headquarters and POSCO Global R&D Center located in Songdo Free Economic Zone in the western port city of Incheon.

“What is most important for North Korean defectors is to help them to stand on their own economically,” Unification Minister Hyun In-taek said in a speech at the MOU signing ceremony attended by some 200 people, including the 35 defectors employed at Songdo SE and POSCO CEO Chung Joon-yang.

Chung said that Songdo SE will put priority on hiring North Korean defectors living in Incheon.

Since the 1950-53 Korean War, nearly 20,000 North Koreans have defected to the South to escape from hunger and political suppression in their communist homeland. But many of them have a hard time getting decent jobs due to their lack of South Korean-style education and social discrimination.

Read the full story here:
POSCO pledges to provide more jobs to North Korean defectors
TradingMarkets.com
11/9/2010

Writing in the Wall Street Journal, Evan Ramstad notes the following information about Rimjingang and Imjingang:

Japanese publisher Jiro Ishimaru has gotten a lot of attention over the past month for his new English-language book of articles from Rimjingang – the magazine about North Korea that’s written by North Koreans.

Over the past six years, he’s worked closely with a few dozen North Koreans to get insiders’ stories published.

Less well known is the North Korean defector in Seoul, Choi Jin-i, who worked closely with him until recently. She published a Korean version of the magazine while he handled Japanese.

They split earlier this year over funding differences. Mr. Ishimaru’s magazine is commercially-funded while Ms. Choi’s is supported by charitable contributions. Ms. Choi’s magazine now has a slightly different name. It’s called Imjingang.

Their writers are mainly North Koreans with the political and financial ability to visit China, where they can communicate freely.

For both Ms. Choi and Mr. Ishimaru, the biggest challenge is getting contributors to verify the information they report.

Mr. Ishimaru’s favorite scoop came last year. It was a video report that showed a 20-year-old textile factory in the North Korean city of Suncheon, long touted as a showplace industrial plant by North Korea’s state media, is actually unused and crumbling.

“The factory might have only run on opening day when the Great Leader (Kim Jong Il’s father Kim Il Sung) was there,” Mr. Ishimaru says. “There had been rumors inside the country that the factory never ran, but nobody outside the nation confirmed that. Our reporter went there and for the first time filmed the factory in ruins.”

Ms. Choi says her favorite article appeared in the magazine’s first issue in 2007. It was an analysis of North Korea’s economic situation by a high-ranking government official. She said she worked for more than a year to persuade the official to give an interview.

The quality of information in that interview surprised North Korea watchers. “Many South Korean scholars said they didn’t know there was an intellectual in North Korea,” Ms. Choi said.

And the surprise for me: The factory in Sunchon mentioned in the story is the Sunchon Vinalon Complex (not to be confused with the 2.8 Vinalon Complex in Hungnam).  I actually used the video mentioned in this story and matched it up with Google Earth Satellite imagery to confirm it was shot in the DPRK.  You can see the blog post and video here.

Read the Wall Street Journal article here:
North Korea by North Koreans; How the Magazines Work
Wall Street Journal
Evan Ramstad
11/8/2010

According to the AFP:

South Korea’s top court ruled Monday that possession of instrumental music with titles praising North Korea violates a tough national security law.

The supreme court upheld a two-year jail term, suspended for four years, given to a female activist identified only as Song.

Song was charged in 2008 with storing 14 MP3 music files with titles praising North Korea on a USB storage device.

State prosecutors accused her of violating the law banning distribution of pro-North Korean material.

A district court acquitted Song, saying the titles alone could not define the songs as praising the communist North.

But an appeal court ruled that the songs written by North Korea to praise its leadership contained “enemy-benefiting” expressions and threatened the South’s security — regardless of their lack of lyrics.

The supreme court supported the appeals court, saying it took into consideration “motivation” and various other circumstances.

South Korea bans distribution of publications or other material praising North Korea and unauthorised contact with its people. Offenders can face heavy jail terms.

As citizens of a modern open democracy, I would hope many South Koreans are embarrassed by this kind of silly censorship.   I have dozens of North Korean songs on my iPod and not once have they influenced my opinion of the DPRK.  They have made me laugh, however.

If you would like to hear the DPRKs song about “CNC”, which was introduced to South Korean factories back in the 1970s, click here.

Read the full story here:
S.Korea court rules pro-North music breaches law
AFP
11/8/2010

According to the AFP (via Straits Times):

South Korea has installed bullet-proof windows at an observatory in a border village to guard tourists against possible gunfire from North Korea, officials said on Thursday.

Three bullet-proof windows were fitted at the observatory pavilion at Daeseongdong village, inside the Demilitarised Zone (DMZ) which bisects the peninsula.

Daeseongdong, inhabited by about 200 people, is just half a mile from North Korean guardposts inside the zone. The pavilion was built in 1980 to give tourists a better view of the world’s last Cold War frontier.

Tensions have been high since Seoul accused Pyongyang of torpedoing one of its warships in March with the loss of 46 lives.

North and South Korean troops exchanged fire briefly last Friday across their land border, without apparent casualties.

‘The installation was made at the request of villagers who have felt uneasy at growing tensions,’ Kim Young-Sea, an official in nearby Paju city, told AFP. ‘They have been living within the range of North Korean gunfire. Since March, civilian visitors have not been allowed into the village due to security concerns.’ The bullet-proof windows are aimed at restarting the visits.

Here is a satellite image of “Freedom Village”.

Read the full sotry here:
Bulletproof windows at border
AFP via Straits Times
11/4/2010

Richard Stone writes in 38 North:

The curtain is rising on a bold experiment to engage North Korea’s academic community—and possibly shape the country’s future. On October 25, 2010, Pyongyang University of Science and Technology, or PUST, opened its doors to 160 elite North Korean students. By improving North Korea’s technical prowess, PUST might nudge the country’s tattered manufacturing-based economy toward an information-based economy.

“Our purpose is the globalization of North Korea through PUST. In that way, their economy can gradually develop, which will make it easier for reunification later,” says Park Chan Mo, former president of the National Research Foundation of Korea and one of four founding committee chairs of PUST. More initiatives are in store after South-North relations improve, says Oh Hae Seok, Special Adviser on Information Technology (IT) to South Korea’s President Lee Myung Bak. “The South is ready to assist the North by building an IT infrastructure and supporting IT education, as long as the North opens its door,” he says.

PUST will test North Korea’s appetite for engagement. Perhaps most discomfiting to the North is that the new university is led and bankrolled by devout Christians. The North Korean government espouses atheism and takes a dim view on South Korean evangelists, particularly for their role in an “underground railway” in northeastern China that steers defectors to safe havens. PUST leaders and professors, primarily ethnic Koreans, have promised not to proselytize.

PUST’s main mission therefore is to lead North Korea out of a scientific wilderness. The North is light-years behind industrialized nations in many areas of science and technology. It excels in a few spheres. For instance, North Korea is notorious for its skill at reverse-engineering long-range missiles and fashioning crude but workable plutonium devices. Less well known, the North has developed considerable expertise in information technology—and has staked its future on it. “North Korea has chosen IT as the core tool of its economic recovery,” says Park. But it has a poor grasp on how to translate knowledge into money. “Instead of just giving them fish, we will teach them how to catch fish,” Park says.

There are serious risks in giving North Korea a technical assist, according to PUST’s critics. Opinion in South Korea is split on PUST; many people have voiced concerns. The chief worry is that PUST students could feed information or lend newfound expertise to the North Korean military. To minimize these risks, PUST’s curricula have been vetted by government and academic nonproliferation experts.

To proponents, the new venture’s benefits far outweigh the risks. PUST has been promised academic freedom, the likes of which has been virtually unknown in North Korea, including campus-wide internet access. “We hope that PUST will open channels to the outside,” says Nakju Lett Doh, an assistant professor of electrical engineering at Korea University in Seoul and member of PUST’s academic committee.

Few people of university age or younger can imagine a world without internet. But it’s rare a North Korean of any age has tasted this forbidden fruit. The government takes infinite care to shield innocent minds from corrosive facts about the Korean War, descriptions of life in modern South Korea, and western notions of freedom of expression, among other things. Instead, the Garden of Juche offers Guang Myung, or Bright Light: an Intranet not connected to the outside world.

When I visited Pyongyang on invitation from the DPRK Academy of Sciences in July 2004, my hosts gave me a tour of the Central Information Agency for Science and Technology’s computing center and showed me the Guang Myung home page, which reminded me of Yahoo. They claimed the system has tens of millions of records, including digital tomes on agriculture and construction as well as the complete writings of Kim Il Sung.

Since then, fiber optic cables have spread Guang Myung to the far corners of the nation. “The main purpose is to disseminate scientific and technological information,” says Lee Choon Geun, chief representative of the Korea-China Science & Technology Cooperation Center in Beijing. On a visit to Pyongyang a few years ago, Lee, an expert on North Korea’s scientific community, witnessed Guang Myung in action, including a live lecture broadcast over the Intranet. At the time, he says, Kim Chaek University of Technology had around 500 Pentium 4’s and 5’s connected to the system. He estimates that nationwide, tens of thousands of computers of all types are now linked in. However, it’s not clear how effective Guang Myung is outside Pyongyang, where clunky routers funnel information to ancient machines—remember 386s and 486s? Another major woe is an unstable electricity supply that regularly fritzes electronics. Lee, who has visited North Korea 15 times, says that when he asks what scientists need most, they request laptops, whose power cord adaptors and batteries can better handle electrical fluctuations.

Indeed, it’s a formidable job to erect an IT infrastructure inside a cocoon. South Korea has lent a hand. With the government’s blessing, private organizations in the South have sent approximately 60,000 IT publications—periodicals and books—to North Korean universities, and IT professors from the South have visited the North for lecturing stints, says Oh. South Korean groups have also helped train North Korean computer scientists in Dandong, China, just across the border from North Korea. The training center had to close earlier this year due to budget cuts, says Lee.

The juche philosophy embraces self-reliant efforts to gather technical information from abroad. North Korean diplomats are one set of eyes and ears. They collect journal articles, textbooks and handbooks, surf the Web and ship any seemingly useful information to Pyongyang, where analysts evaluate it and censors clear it for posting. When sent via internet, information is routed primarily through Silibank in Shenyang in northeastern China. North Korea has also deployed abroad around 500 IT specialists in the European Union and dozens more to China—in Beijing, Dalian, Shanghai, and Shenyang—to acquire knowledge for the motherland. “Through them a lot of information goes to North Korea,” says Park.

Such activity may seem like a packrat cramming its nest with equal portions of usable materials and shiny baubles. But it has paid off in at least one area: software development. “They are developing their own algorithms,” says Doh, an expert on control system theory. Even though North Korea’s programmers are almost completely isolated from international peers, they lag only about 5 to 6 years behind the state of the art in South Korea, Doh says. “That’s not that bad.” The Korean Computing Center and Pyongyang Information Center together have around 450 specialists, and universities and academy institutes have another 1,000 more experts on computer science, says Lee. And all told there are about 1,200 specialized programmers.

The programmers have enjoyed modest commercial success. The state-owned SEK Studios in Pyongyang has done computer animation for films and cartoons for clients abroad. And software developers have produced, among other things, an award-winning computer version of the Asian board game Go. “Their software is strong,” says Park, a specialist on computer graphics and simulation. “They are very capable.”

But the resemblance to IT as we know it ends there. “In North Korea, IT is quite different from what most people think,” says Lee. Most computing efforts these days are focused on computerized numerical control, or CNC: the automation of machine tools to enable a small number of workers to produce standardized goods. “Their main focus is increasing domestic production capacity,” says Lee. North Korea’s CNC revolution is occurring two to three decades after South Korean industries adopted similar technologies. And North Korea is struggling to implement CNC largely because of its difficulties in generating sufficient energy needed to make steel—so its machinery production capacity is a fraction of what it used to be—and it lacks the means to produce sophisticated integrated circuit elements.

Antiquated technology may be the biggest handicap for North Korea’s computer jocks. North Korea “doesn’t have the capacity to make high technology,” says Kim Jong Seon, leader of the inter-Korean cooperation team at the Science and Technology Policy Institute in Seoul. North Korea is thought to have a single clean room for making semiconductors at the 111 Factory in Pyongyang. Built in the 1980s—the Stone Age of this fast-paced field—the photomask production facility is capable of etching 3 micron wide lines in silicon chips. South Korean industry works in nanometer scales. The bottom line, says Kim, is that in high technology, “they have to import everything.”

That’s a challenge, because no country—China included—openly flouts UN sanctions on high-tech exports to North Korea. Any advanced computing equipment entering the country is presumably acquired through its illicit missile trade and disappears into the military complex. North Korea’s civilian computer scientists are left fighting for the scraps. One of only five Ph.D. scientist-defectors now known to be in South Korea, computer scientist Kim Heung Kwang, fled North Korea in 2003 not for political reasons or because he was starving—rather, he hungered to use modern computers.

To help North Korea bolster its budding IT infrastructure and not aid its military, PUST will have to walk a tightrope. School officials have voluntarily cleared curricula with the U.S. government, which has weighed in on details as fine as the name of one of PUST’s first three schools. The School of Biotechnology was renamed the School of Agriculture and Life Sciences because U.S. officials were concerned that biotech studies might be equated to bioweapons studies, says Park. North Korean officials, meanwhile, forbid PUST from launching an MBA program—a degree too tightly associated with U.S. imperialism. “So we call it industrial management,” Park says. “But the contents are similar to those of an MBA.”

Besides cleansing PUST of any weapons-grade information, Park and university representatives are working with the U.S. Commerce Department to win export licenses for advanced computing equipment and scientific instruments not prohibited by dual-use restrictions. Approval is necessary for equipment consisting of 10 percent or more of U.S.-made components. “You can attach foreign-made peripheral devices and reduce U.S. components to less than 10 percent, but that’s a kind of cheating,” Park says. “We want to strictly follow the law.”

This improbable initiative in scientific engagement was a long time in the making. PUST’s chief architect is founding president Kim Chin Kyung, who in 1998 established his first venture in higher education: Yanbian University of Science and Technology in Yanji, the capital of the Yanbian Korean Autonomous Prefecture in northeastern China’s Jilin Province, just across the border from North Korea. A businessman who studied divinity in university, Kim, who goes by his English name James, was accused of being a spy on a visit to North Korea in 1998 and imprisoned there for six weeks. He stuck with YUST, however, and in 2001, North Korean education officials visiting the university stunned Kim by inviting him to establish a similar university in Pyongyang. Kim got a rapturous response when he pitched the idea to YUST’s sponsors.

Progress came in fits and starts. PUST was originally envisioned to open in 2005, but work on the initial 17 buildings of the $35 million, 100-hectare campus in southern Pyongyang’s Rakrang district was completed only last year. North Korean education officials have promised the school academic freedom and internet access. Such startling privileges will be doled out byte by byte. “In the beginning, they are allowing us to do emailing,” says Park. Full internet access is expected to come after PUST earns their keepers’ trust. “To do research, really you have to use the internet. The North Korean government realizes that. Once they know students are not using the internet for something else, it should be allowed,” Park says.

While YUST and PUST may both have ardent-Christian backers and cumbersome acronyms, the atmosphere on the two campuses will be markedly divergent. In Yanji, encounters outside the classroom are common: faculty and students even dine together in a common hall. “YUST professors and students are like one family,” says Park.

In contrast, PUST students and faculty will inhabit two entirely different worlds that only merge in the classroom. The North Korean government handpicked the inaugural class of 100 undergraduates and 60 graduate students, including 40 grads who will study IT. All will study technical English this fall, then in March a wider roster of courses will become available after key professors and equipment arrive on campus. A student leader will shepherd students to and from class to ensure that no lamb goes astray. “There will be no way to teach the gospel,” says Doh.

PUST professors expect to be impressed with the students, selected from Kim Il Sung University and Kim Chaek University of Technology. “These are the most brilliant students in North Korea,” says Doh. PUST plans to ramp up enrolment to 2,000 undergrads and 600 graduate students by 2012. To expose these young, agile minds to a wide range of ideas, PUST plans to fly in a number of visiting professors during the summer terms. They also intend to seek permission for students from other Pyongyang universities to attend the summer sessions. As trust develops, PUST hopes that some of its students will be able to participate in exchange programs and study abroad.

PUST’s success may hinge on the disposition of North Korea’s leader in waiting. Kim Jong Un was tutored privately by a “brilliant” graduate of Université Paris X who chaired the computer science department at Kim Chaek University of Technology before disappearing from public view in the early 1980s, says Kim Heung Kwang, who studied at Kim Chaek before working as a professor at Hamhung Computer College and Hamhung Communist College. After defecting and settling in Seoul, Kim founded North Korea Intellectuals Solidarity, a group of university-educated defectors that raises awareness of conditions in North Korea.

According to internal North Korean propaganda, Kim Jong Un oversees a cyberwarfare unit that launched a sophisticated denial-of-service attack on South Korean and U.S. government websites in July 2009. South Korea’s National Intelligence Service blamed the North, which has not commented publicly on the attack. Kim Jong Un’s involvement cannot be confirmed, says Kim Heung Kwang. “But Kim Jong Un is a young person with a background in information technology, so he may desire to transform North Korea from a labor-intense economy to a knowledge economy like South Korea is doing.”

Another big wildcard is North-South relations. After the sinking of the Cheonan, South Korea froze assistance to the North. In the event of a thaw, “the South wants to build a digital complex” in the Demilitarized Zone (DMZ) or in South Korea similar to the Kaesong industrial complex, says Oh. This, he says, “would be the base camp of North Korea’s IT industry development.” North Korea has reacted lukewarm to the idea: It would prefer that such a venture be based in Pyongyang, says Lee. To facilitate denuclearization and help skilled North Korean workers adapt to market economics, the Science and Technology Policy Institute in Seoul has proposed the establishment of an Inter-Korean Science and Technology Cooperation Center modeled after similar centers established in Kiev and Moscow after the Soviet breakup.

Such projects, if they were to materialize, along with well-trained graduates from PUST, may help pull North Korea’s economy up by its bootstraps. “We are trying to make them more inclined to do business, to make their country wealthier,” says Park. “It will make a big difference once they get a taste of money. That’s the way to open up North Korea.”

Additional information:
1. Here are previous posts about PUST.

2. Here are previous posts about the DPRK’s intranet system, Kwangmyong.

3. Here is a satellite image of PUST.

Read the full story here:
Pyongyang University and NK: Just Do IT!
38 North
Richard Stone
11/1/2010

UPDATE 18 (11/08/2010): South Korean aid will finally be delivered to the DPRK on 11/09.  Here is more from the PRC’s People’s Daily:

Some of South Korea’s first government-financed rice aid in almost three years will be delivered to the flood-hit Democratic People’s Republic of Korea ( DPRK) starting Tuesday, the unification ministry said Monday.

Some of the 5,000 tons of rice currently in the Chinese city of Dandong will be sent to the northwestern DPRK city of Sinuiju, a city reeling from heavy rains in August, and the delivery will be completed by the end of next week, according to the ministry.

Three million cups of instant noodles, also part of the flood aid, have already been sent to Sinuiju, while some of the pledged one million tons of cement will reach the city later in the day, the ministry said.

As he took office in 2008, South Korean President Lee Myung-bak cut a free flow of rice aid to Pyongyang, which once amounted to 300,000 to 400,000 tons each year. A hard-liner toward Pyongyang, he also ended a decade of rapprochement under his liberal predecessors by linking aid to dismantlement of the DPRK’s nuclear programs.

UPDATE 17 (1o/29/2010): Here and here are photos of the aid arriving in China. 

UPDATE 16: According to the Korea Times, the shipment was delayed due to weather.

UPDATE 15: First aid shipment to go today (10/25).  According to Yonhap:

A shipment of rice was to depart a South Korean port en route to North Korea Monday, which will mark Seoul’s first government-financed rice aid to the communist nation in more than two and a half years.

A cargo ship carrying 5,000 tons of rice was scheduled to depart the port city of Gunsan for the northeastern Chinese city of Dandong on the border with North Korea. Another ship was also set to head from the port of Incheon to the Chinese city, carrying 3 million packs of instant noodles.

The Red Cross aid, which is aimed at helping the North cope with the aftermath of floods, marks South Korea’s first government-funded provision of rice to the North since President Lee Myung-bak took office in early 2008 on a pledge to link aid to progress in efforts to end Pyongyang’s nuclear programs.

Seoul also plans to send a shipment of 10,000 tons of cement to the North later this week.

A total of 13.9 billion won (US$12.3 million) came from the government coffers to finance the flood aid.

Also Monday, three Red Cross officials prepared to fly to the Chinese city to receive the rice and instant noodles there and transport the relief supplies by truck to the flood-hit North Korean border city of Sinuiju, according to officials from the Red Cross and the Unification Ministry.

The cargo ships are expected to arrive in Dandong around Wednesday.

Rice will be delivered in five-kilogram packages, and each package is marked with “Donation from the Republic of Korea,” South Korea’s official name.

In August, South Korea first offered to provide relief aid to the North after devastating floods hit the communist nation. North Korea later asked for rice, heavy construction equipment and materials.

UPDATE 14: S. Korea to send rice aid to N. Korea next month.  Accrording to Yonhap:

South Korea’s Red Cross will begin the shipment of 5,000 tons of rice and other aid materials next month to North Korea, which has been battered by summer floods, officials here said Sunday.

It would mark South Korea’s first government-funded provision of rice to the hunger-stricken communist neighbor since the conservative president, Lee Myung-bak, took office in early 2008 on a pledge to link inter-Korean ties to Pyongyang’s denuclearization.

The South’s government plans to convene a committee on inter-Korean exchanges on Tuesday to approve the use of taxpayers’ money earmarked for projects to improve relations with the North, the officials said.

“(The government) will report to the National Assembly on Sept. 28 and the committee will approve the aid worth 8 billion won (US$6.9 million) from the South-North Cooperation Fund (on the same day),” a Unification Ministry official said.

The rice shipment will depart from the port of Incheon, west of Seoul, on Oct. 25 and it will be delivered to the North Korean city of Sinuiju bordering China via Dandong, an adjacent Chinese town, he added.

Other aid items to be sent to the North in stages include 10,000 tons of cement, three million packs of instant noodles and some medical goods.

South Korea has ruled out the shipment of construction equipment, which the North requested, taking into account the possibility of the equipment being used for military purposes.

Seoul’s rice aid, although officials here stressed it is purely a humanitarian move, has been seen as a possible sign of a thaw in chilled inter-Korean relations. Military tensions have risen sharply since the sinking of a South Korean warship in March, which the South attributed to a North Korean torpedo attack.

South Korea suspended an annual shipment of 300,000-400,000 tons of rice to the North in 2008, citing little progress in efforts to end the North’s nuclear program.

UPDATE 13: Incheon Gov’t, Civic Group Sign MOU on NK Aid.  According to KBS:

The Incheon city government has signed a memorandum of understanding with a civic group to send 700 tons of corn to North Korean flood victims in Sinuiju.

The aid is worth 300 million won.

The city government and the Korean Sharing Movement obtained permission to provide the food aid from the Unification Ministry on September 14th.

The first shipment of corn will arrive late this month via an overland route linking the city of Dandong in China to the North Korean city of Sinuiju.

The remaining food aid will be delivered to North Korea by year’s end.

Previously, the Incheon city government announced a plan to send six shipments of milk and infant formula by December. The aid is valued at 100 million won.

The first shipment left Incheon port for North Korea on Saturday.

UPDATE 12: First shipment of aid has headed north.  According to the New York Times:

The nine trucks in the convoy carried 203 tons of rice that civic groups and opposition political parties in South Korea had donated for the victims of recent flooding in North Korea. The flooding is expected to worsen food shortages in the North, which even in a year of good harvests, cannot produce enough to feed its estimated population of 23 million people properly.

The shipment, coming just before the Korean harvest festival of Chuseok next week, also seemed to symbolize a newfound South Korean good will toward the North. It followed 530 tons of flour that a South Korean provincial government and civic groups sent on Thursday.

After President Lee Myung-bak came to power in Seoul in early 2008, South Korea had been reluctant to provide rice or any other major aid shipments to the North until its government in Pyongyang took significant steps to give up its nuclear weapons. The sinking of the warship, the Cheonan, further soured relations.

But in the past week, the South approved the civic groups’ donations, as well as a separate Red Cross plan to send 5,000 tons of rice. The approval followed conciliatory gestures by North Korea, including a plan to resume a Red Cross program of arranging temporary unions of families split by the 1950-53 Korean War.

The nine trucks in the convoy carried 203 tons of rice that civic groups and opposition political parties in South Korea had donated for the victims of recent flooding in North Korea. The flooding is expected to worsen food shortages in the North, which even in a year of good harvests, cannot produce enough to feed its estimated population of 23 million people properly.

The shipment, coming just before the Korean harvest festival of Chuseok next week, also seemed to symbolize a newfound South Korean good will toward the North. It followed 530 tons of flour that a South Korean provincial government and civic groups sent on Thursday.

After President Lee Myung-bak came to power in Seoul in early 2008, South Korea had been reluctant to provide rice or any other major aid shipments to the North until its government in Pyongyang took significant steps to give up its nuclear weapons. The sinking of the warship, the Cheonan, further soured relations.

But in the past week, the South approved the civic groups’ donations, as well as a separate Red Cross plan to send 5,000 tons of rice. The approval followed conciliatory gestures by North Korea, including a plan to resume a Red Cross program of arranging temporary unions of families split by the 1950-53 Korean War.

UPDATE 11: North Korea complains that it did not receive enough aid from South Korea.  According to UPI:

North Korea complained Sunday that a planned shipment of flood-relief aid from South Korea is much smaller than expected.

The state-controlled weekly Tongil Sinbo said the rice shipment the South Korean Red Cross said would feed 200,000 people for 50 days was not nearly adequate.

“After the lid was removed from the box of aid, there was only 5,000 tons of rice in it,” Tongil Sinbo said in a posting on the North’s official Web site.

The statement, which was monitored by South Korea’s Yonhap news agency, said the shipment would not last “even for a day.”

The Red Cross aid package, which includes rice and cement, was consigned to Sinuiju, a town near the Chinese border in a region hit hard by rain and flooding last month.

The shipment had been seen by diplomatic analysts as an easing of tensions between the two Koreas, Yonhap said. North Korea relies heavily on donations of rice and other supplies to prop up its economy.

Also, see this Yonhap story.

UPDATE 10: The Ministry of Unificaion is opposed to large scale food assistance—drawing a distinction between flood relief and large-scale food aid.  According to KBS:

Unification Minister Hyun In-taek says he is opposed to large-scale food aid to North Korea.

He said large-scale food aid is separate from humanitarian aid, and that all aspects of inter-Korean policy and the sinking of the “Cheonan” naval vessel should be considered.

Hyun made the remarks at a budget committee meeting on Friday when a main opposition Democratic Party member urged the government to send 500-thousand tons of rice to North Korea.

Hyun said that South Korea had sent large amounts of food aid on multiple previous occasions for what was called humanitarian assistance, but it is doubtful whether the rice had been distributed to people in need.

Adding to political pressure against further donations, the Choson Ilbo reports that the North Korean military is warehousing quite a bit of rice:

In a party caucus at the National Assembly on Thursday, Grand National Party floor leader Kim Moo-sung said calls for humanitarian food aid for the North are “inappropriate” at a time when the North “has as much as 1 million tons of rice in storage in preparation for war. We have to take this into consideration.”

The figure apparently comes from a report by the National Intelligence Service for the ruling-party leadership.

South Korea worries about a rice surplus when it stores only about 1.49 million tons this year. If it is true that the North is really holding back 1 million tons of rice for the military, it could have a profound effect on the ongoing debate over whether to increase aid for the North.

UPDATE 9: The first aid shipment has arrived.  According to Arirang News:

The first round of civilian emergency aid since recent flooding in North Korea was delivered to the border town of Gaeseong on Thursday.

The transport of 530 tons of flour on two dozen large trucks by Gyeonggi Province and non-governmental groups is also the first aid package from the South after it enforced punitive measures on Pyeonyang in May, in response to its sinking of the warship Cheonan.

And five South Korean personnel were permitted to cross the border to transfer the goods.

Kim Moon-soo, Governor Gyeonggi Province: “Many South Koreans have been wanting to provide assistance and there’s been a delay but we’re finally sending aid today. There are factors other than intent to consider.”

The group had been waiting since July for the government to give the green light to supply food aid worth about 240-thousand US dollars… enough to feed some 30-thousand children and other vulnerable groups for a month.

It is estimated that some 28 million square meters of agricultural land was swamped by rainfall of up to 324 milimeters in Gaeseong.

Kim Deog-ryong, Co-chair, Korean Council for Reconciliation & Cooperation: “Following the first round of aid, we plan to send additional second and third rounds in October. We hope nongovernmental efforts will eventually lead to continuous government-level assistance.”

The resumption of aid delivery to the North on humanitarian grounds will likely be succeeded by a series of foodstuffs, such as rice and corn, being transported through the Dorasan Customs, Immigration and Quarantine office, on top of the South Korean Red Cross’ pledged shipments of rice, cement and other supplies.

On Friday, more civilian aid consisting of 203 tons of rice is scheduled to be delivered to the flood-ravaged Shinuiju region.

Choi You-sun (reporter) “The South Korean government is maintaining a firm stance concerning its set of stringent measures against North Korea. But officials here say there are more applicants wishing to send provisions forecasting that there will be a significant increase in the amount of nongovernmental aid to the impoverished North.

UPDATE 8: The Ministry of Unification seems to have approved the private aid donations mentioned in UPDATE 7.  According to the AFP:

South Korea’s government said Wednesday it has approved a plan by local groups to send flood relief aid to North Korea, amid growing signs of a thaw after months of tension on the peninsula.

The Unification Ministry said it approved Tuesday requests to send emergency supplies worth a total of 2.24 billion won (1.2 million dollars) including 203 tons of rice.

The aid for flood victims in Sinuiju and Kaesong also includes flour, bread, blankets and instant noodles, said spokesman Chun Hae-Sung, adding the first shipment of 400 tons of flour would be sent Thursday.

It was the second time this week that Seoul groups have announced help following floods that hit the city of Sinuiju on the China border and the town of Kaesong, just north of the inter-Korean frontier.

UPDATE 7: In addition to the aid offernd by the South Korean government (in the posts below),  private organizations in South Korea are offering flood assistance.  According to Yonhap:

The Korea Sharing Movement and the Join Together Society (JTS) plan to ship 400 tons of flour to the North Korean border city of Kaesong via an overland route on Thursday, an official said. The Gyeonggi provincial government helped fund the assistance.

Separately, the Korean Council for Reconciliation and Cooperation, a coalition of pro-unification civic and social groups, also plans to send 130 tons of flour to the North on Thursday.

And in another Yonhap story:

An umbrella trade union said Wednesday it seeks to send about 100 tons of rice, possibly by land, to North Korea to help the flood-hit nation.

The Federation of Korean Trade Unions (FKTU), which claims up to 900,000 members across the country, said it is in talks with its North Korean counterpart to determine the exact delivery route and size of the aid.

UPDATE 6: The South Korean government is trying to figure out how to prevent aid from being diverted to the military.  According to the Choson Ilbo:

“Rice can be stored for a long time and is easy to divert to the military,” the official said. “But rice flour or noodles are harder to store for longer and are more likely to be given to the victims instead of being transported to military warehouses.”

The government offered the North 10,000 tons of corn following the reunion of separated families on the occasion of Chuseok or Korean Thanksgiving last year reportedly because this was less likely to be used for military rations. North Korean defectors say they were rarely given any rice supplied by the South, while rice bags with the lettering of the South Korean Red Cross stamped on were seen in military facilities close to the heavily armed border.

During the famine in the late 1990s, the North received corn flour aid from the U.S which the authorities then distributed through ration stations, a defector recalls.

But processing over 100,000 tons of rice into flour and other products may not be realistic as it would cost a lot of time and money, a Unification Ministry official said.

UPDATE 5: According to the Donga Ilbo:

Yoo Chong-ha, head of the (South) Korean National Red Cross, said in a news conference Monday that the Red Cross will send 10 billion won (8.6 million U.S. dollars) worth of aid comprising 5,000 tons of rice, 10,000 tons of cement, three million packages of instant noodles, and medicine.

He also suggested a working-level meeting of Red Cross organizations from both sides in Kaesong Friday on Pyongyang’s proposal for reunions of separate inter-Korean families.

On the volume of rice aid, Yoo said, “Around 80,000 to 90,000 people in (the North Korean city of) Shinuiju are known to be displaced, and 5,000 tons of rice can feed 100,000 people for 100 days,” translating into 500 grams a day per person.

The South’s Red Cross said it set the amount given that international aid organizations allocate 300 to 500 grams per person when they send rice assistance to the North.

The budget for buying the rice was 7.7 billion won (6.6 million dollars), or 1.54 million won (1,330 dollars) per ton based on the price of rice Seoul purchased in 2007.

Even if the South Korean government provides rice aid to the North, the combined amount will be around 10 billion won as the South’s Red Cross proposed to the North last month.

Excluded from the aid package was heavy equipment that the North requested. Most of the 10 billion won in aid will come from a South Korean government fund for inter-Korean cooperation.

UPDATE 4: And the picture becomes clearer.  According to the Guardian:

The $8.5m (£5.5m) package, to be funded by the government, is the south’s first aid shipment to its neighbour since the sinking of a warship in March reduced bilateral relations to their lowest point for years. Seoul says its vessel was sunk by a North Korean torpedo, a claim Pyongyang denies.

The countries may also resume reunions for families separated by the 1950-53 Korean war, which ended in an uneasy armistice but no peace treaty. The reunions were suspended after a South Korean woman was shot dead by a guard during a visit to the North Korean tourist resort of Mount Kumgang, in 2008.

UPDATE 3: Some specifics come out.  According to Yonhap:

S. Korea’s Red Cross announces 5,000 tons of rice aid for N. Korea’s flood victims

UPDATE 2: South Korean farmers demand ROK government send aid to DPRK to keep rice prices high.  According to the AFP:

Thousands of South Korean farmers rallied Friday, demanding the government stop a fall in rice prices by shipping surplus stocks in state silos to North Korea.

The farmers urged President Lee Myung-Bak to resume an annual shipment of 400,000 tonnes of rice to the North, which suffers severe food shortages. The shipment was suspended in 2008 as relations soured.

About 3,000 farmers took part in morning rallies in a dozen cities and counties, said the Korea Peasants’ League, which represents farmers, adding more were under way or planned in the afternoon.

“Resuming rice aid to North Korea is a short cut to stabilising rice prices and also improving inter-Korean ties,” league spokesman Kang Suk-Chan told AFP.

The government makes an annual purchase of rice from farmers to stabilise prices amid falling national demand, but is predicting a bumper harvest this year.

Unless some stocks are sold off, the agriculture ministry says the South’s strategic rice reserve will soon reach an all-time high of 1.49 million tons, twice the 720,000 tonnes considered necessary for emergencies.

Last week minister Yoo Jeong-Bok said the government would sell about 500,000 tons of the reserve this year to companies that make alcoholic beverages and processed food ingredients.

Farmers claimed the ministry’s move would fail to stop the fall in prices. They want the government to lift the 2008 ban and to purchase this year’s harvest at higher prices.

Subsidised farmers grow more rice than South Koreans want to eat. The country’s consumption of the staple fell in 2007 to its lowest level for decades as people ate more meat and vegetables.

Cross-border tensions this summer have run high over the sinking of a South Korean warship with the loss of 46 sailors. The North vehemently denies involvement but the South has cut off most cross-border trade.

Read the full story here:
S.Korea farmers demand rice shipment to N.Korea
AFP
9/10/2010

UPDATE 1: The DPRK accepts the ROK’s aid offer.  According to the BBC:

North Korea has responded to an offer from South Korea of emergency food and medical aid, saying it would prefer to receive rice and building materials.

The South Korean offer, worth more than $8m (£5m), was made last week after severe flooding in the North.

South Korea says it is considering the North’s request.

The aid would be the first large-scale shipment since South Korea blamed its impoverished northern neighbour for sinking one of its warships in March.

South Korea blames Pyongyang for sinking the Cheonan with a torpedo, killing 46 crew.

North Korea denies any role in the incident and has demanded its own investigation.

Food aid

North Korea’s Red Cross said it would prefer rice, cement and heavy construction equipment – items it said were necessary for flood recovery efforts, according to Seoul’s Unification Ministry and Red Cross.

The South’s offer excluded rice – a staple which Seoul has stopped sending to Pyongyang amid strained relations.

North Korea has been hard hit by floods caused by heavy rains in July and August, especially in its northern areas bordering China.

This week a South Korean newspaper published pictures of people sleeping in tents and queuing for water in the city of Shinuiju.

They were taken by an undercover source who also reports rare public complaints that the North Korean leadership is not doing enough to help.

Read the full story here:
North Korea accepts flood aid offer from South
BBC
9/7/2010

ORIGINAL POST: South Korea offers flood aid to the DPRK. According to the BBC:

South Korea has made its first offer of aid to North Korea since it accused Pyongyang of sinking one of its warships in March.

South Korea’s Red Cross has offered 10bn won ($8.3m, £5.3m) worth of flood aid to its impoverished neighbour.

The offer came hours after the United States imposed new sanctions on the North in response to the sinking.

South Korea blames North Korea for sinking the Cheonan on 26 March with a torpedo, killing 46 crew.

North Korea denies any role in the incident and has demanded its own investigation.

FOOD AID
North Korea has relied on food aid from China, South Korea and aid agencies to feed millions of its people since a famine in the 1990s resulted in the deaths of hundreds of thousands.

But the communist country has been hard hit by floods caused by heavy rains in July and August, especially in its northern areas, bordering China.

“The aid includes medical kits, emergency food and supplies,” a Unification Ministry official said, quoting the Red Cross message sent to North Korea.

The offer has yet to be accepted by the North.

Under President Lee Myung-bak, the South has stepped back from its earlier “sunshine” policy of unconditional aid and has linked the provision of aid to progress from the North on ending its nuclear programme.

A South Korean offer of about 10,000 tonnes of corn to North Korea in October 2009 was the first official aid to its hungry neighbour for almost two years.

The year before, the South had offered 50,000 tons of corn but the North rejected the shipment amid high tensions.

‘TOO EARLY’
The offer came after North Korea reportedly indicated it was ready to return to six-party talks over ending its nuclear ambitions.

Parts of North Korea have been badly affected by severe flooding Leader Kim Jong-il told the Chinese president that he wanted to see negotiations resumed during a visit to China last week, Chinese state media said.

The talks – which involve the two Koreas, China, Russia, Japan and the US – have been stalled since December 2008 over Pyongyang’s missile and nuclear tests.

But South Korea is demanding an apology for the warship sinking before any return to the negotiations.

Japan also says the time is not right to resume talks.

On Tuesday its foreign minister, Katsuya Okada, told China’s visiting nuclear envoy, Wu Dawei, that it was still “too early” to think about a return to talks.

On Monday the US imposed additional sanctions on North Korea, targeting trade in arms, luxury goods and narcotics.

Read the full story here:
South Korea offers aid to flooded North
BBC
8/31/2010

Accordign to Yonhap:

South Korea’s Red Cross is pushing to set up its own communications channel with its North Korean counterpart so that it can carry out humanitarian missions independent of cross-border political tensions, the organization’s chief said Thursday.

“We’re talking with the government on the need to work with the North Korean Red Cross through an independent means of communication,” Yoo Chong-ha, president of the Korean National Red Cross, said in an interview with Yonhap News Agency.

“Government-level dialogue is between governments. The role of the Red Cross has to be separate,” Yoo said.

The Red Cross, although tasked with non-political projects such as relief aid and family reunions, has at times served as an alternative track for contact and talks between the two Koreas, who are technically still at war after the 1950-53 Korean War ended in a truce.

“The Red Cross is not a subsidiary agency to the Unification Ministry. It is not appropriate for all concerned that the Red Cross should work on behalf of the government,” Yoo said in the interview. The chief will be heading to the North to oversee a round of family reunions that begin on Friday.

Currently, there is no channel linking the Red Cross chapters of the two Koreas. Their sole hotline at the truce village of Panmunjom was severed as part of Seoul’s package of punitive measures announced in May after holding the North responsible for the deadly sinking of a warship that killed 46 sailors.

Yoo said he would tell his North Korean counterpart, Jang Jae-on, of the importance of resuming humanitarian exchanges, regardless of political tensions, when he visits North Korea.

In Red Cross talks this week that reopened for the first time in a year, the North asked Seoul to provide tens of thousands of tons in rice and fertilizer aid in exchange for expanding family reunions.

“This is not an issue for the Red Cross” to deal with, said Yoo, with skepticism on whether such aid draws results.

Read the full story here:
S. Korean Red Cross seeks independent communications channel with Northern counterpart
Yonhap
10/28/2010