Archive for the ‘South Korea’ Category

Impact of the ROK’s May 24 economic sanctions against the DPRK

Monday, May 31st, 2010

Institute for Far Eastern Studies (IFES)
NK Brief No. 10-05-27-1
5/27/2010

On May 24, the South Korean government announced, in response to the Cheonan incident, the cessation of inter-Korean exchanges and other sanctions against Pyongyang. These measures will directly impact the North, costing it 250~300 million USD. According to the Ministry of Unification, North Korea earned 245.19 million USD from inter-Korean cooperative schemes not related to the Kaesong Industrial Complex. This does not include additions monies for customs fees, transportation costs, mediation fees and other incidentals.

About 254 million USD worth of goods were produced on commission in the North after raw materials or partially manufactured products were sent from the South. 10~15 percent of this (25-38 million USD) covers labor and other costs. Therefore, by halting all exchanges and cooperative schemes other than the Kaesong Industrial Complex, North Korea stands to lose at least 200 million USD.

In particular, as the South has banned the import of North Korean sand and marine products, both known to be money-earners for the North’s military, it appears these sanctions have the potential to really pressure Pyongyang. In addition, preventing North Korean ships from using South Korean waters could cost an additional nine million USD. An additional 6 billion won-worth of government-related projects for the North has also been suspended. Ultimately, the cessation of inter-Korean exchange will cost North Korea 250~300 million USD.

The Korea Defense Institute estimates that through inter-Korean projects, tourism, and the Kaesong Industrial Complex, North Korea earned 180 million USD in 2004, but that jumped to 233 million USD in 2005, 341 million in 2006, and 534 million USD in 2007, before falling to 490 million in 2008, and 347 million USD last year.

It appears that the reduction in foreign currency earned by the North has somewhat impacted its economy. Now, the cessation of inter-Korean contacts means further reduction in the North’s access to foreign currency, possibly causing severe shortages of daily necessities because of a lack of trade and insufficient production capacity. If inter-Korean trade ceases, the North can no longer earn foreign capital from Seoul, and this could cause DPRK-PRC trade to drop off, if the North is unable to cover its bills.

It will also cause a loss of jobs for all those North Koreans involved in consignment production, fishing, farming, and other areas of the economy hit by the freeze in trade with the South. As the processing-on-consignment business has reached 30~35 million USD per year, labor involved in the industry nears that of the Kaesong Industrial Complex, and could mean the loss of as many as 40,000 jobs.

While the government has decided to maintain the Kaesong Industrial Complex, it plans to downsize the ROK manpower by 40-50 percent. The reason given is to be able to ensure the safety of the workers, but if the number of workers is cut by 50 percent, this cannot help but have a huge impact on production, raising concerns with North and South Korean employees alike.

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Seoul resumes radio broadcasts to DPRK

Tuesday, May 25th, 2010

According to teh Associated Press (5.25.2010):

South Korea is waging psychological warfare against North Korea today after a six year pause, and Pyongyang says its troops are bracing for war amid tensions over the sinking of a warship.

South Korea is blaring radio broadcasts into the North and placing loudspeakers at the border to blast out propaganda to punish Pyongyang.

Although the South Korean government has been out of the game for the last six years, plenty of others have been broadcasting into the DPRK: Free North Korea Radio, Open Radio for North Korea, Radio Free Chosun, Voice of America and  Radio Free Asia.   

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Some recent sanctions statistics

Tuesday, May 25th, 2010

According to Reuters:

The state-run Korea Trade-Investment Promotion Agency (KOTRA) said North Korea’s trade, including commerce with South Korea, fell 9.7 percent to $5.09 billion last year from 2008.

Excluding trade with the South, foreign commerce feel 10.5 percent to $3.41 billion last year, KOTRA said in a statement.

It said trade with China, the North’s sole supporter, amounted to about $2.7 billion.

The prospect of further sanctions as a result of the sinking of a South Korean naval vessel by a suspected North Korean torpedo in March would slow trade even more, KOTRA said.

“North Korea’s trade this year is seen shrinking further and depending more on China due to the U.N.’s continuous sanctions against the North and possibilities of further measures,” KOTRA said.

North Korea does not announce its own trade data and KOTRA said it compiled the data from the agency’s overseas offices.

Last week, Seoul released the findings of a report which concluded that a North Korean submarine had fired a torpedo that sank the Cheonan corvette, killing 46 sailors.

South Korea has repeatedly said it would not strike back at the North, aware that would frighten away investors already jittery about the escalating tension on the divided peninsula.

Washington has called for an international response, which could range from fresh U.N. Security Council sanctions on North Korea, although those might be opposed by China, to a statement of condemnation by the world body.

A range of international sanctions have been levied against North Korea in recent years for its missile and nuclear tests.

And according to Leon Sigal in 38 North:

… North Korean trade increased in the two years following the 2006 UN sanctions. Inter-Korean trade totaled $1.8 billion in 2007—about a 33 percent jump from 2006—then rose again to $1.9 billion in 2008. China trade also grew to roughly the same level in 2007, then shot up to $2.78 billion in 2008. North Korea’s total trade increased by more in 2008 than in any other year over the past decade and its economy grew by 3.7 percent according to the Bank of Korea.  

The most recent UN sanctions enacted in 2009 have had similar results. In response to the threat of sanctions, Pyongyang went ahead with a test-launch of a long-range rocket and a second, more successful, nuclear test. The UN Security Council, in response, enacted Resolution 1874 imposing sanctions on the DPRK. The prime target of the new sanctions was the bank accounts of North Korean entities involved in nuclear and missile trafficking. Given the many ways to circumvent the banking system, however, and the reluctance of governments to interpret Resolution 1874 as liberally as the United States did, it is still unclear how much of an impediment this will prove to be. As the Congressional Research Service concluded, “[F]inancial sanctions aimed solely at the DPRK’s prohibited activities are not likely to have a large monetary effect.”

Luxury goods were also a focus of the most recent U.N. sanctions—in the dubious belief that consumerism is as rampant among privileged North Koreans as it is in Georgetown or that Kim Jong Il’s hold on the elite can be loosened by denying them Rolexes or Mercedes imported from China. A Congressional Research Service analysis of Chinese trade statistics for 2008 indicates that Beijing’s exports of luxury consumer goods to North Korea was between $100 million and $160 million, mostly financed by Chinese credit. That trade is not likely to have dropped enough to make any appreciable difference on the loyalty of elites long accustomed to tight belts and even tighter social controls.

Again, the overall economic impact of the sanctions appears to have been limited. Overall, according to U.S. estimates, North Korea’s economy again grew at a 3.7 percent rate in 2009,[7] probably because of a more bountiful harvest. While North Korean exports to China are difficult to estimate because of the introduction of the new currency, imports from China in 2009 dropped sharply to below the 2007 level. Some of the drop was due to the global recession and price deflation.[8] Trade with South Korea fell 8.5 percent in 2009 but still totaled $1.7 billion—five times what it was a decade ago. Trade with Japan was cut to a pittance, though it is difficult to ascertain the extent to which cash remittances from Koreans in Japan still manage to circumvent sanctions. For instance, Tokyo discovered that the DPRK was exporting sanctioned food items such as mushrooms to China and they were then sold to Japan at higher prices. The only losers may have been Japanese consumers.

As for international cooperation to curb the North’s arms sales, the net effect is probably overstated. In 2005, even before sanctions were imposed, the global market for missiles—the big-ticket item—had dried up, as buyers like Iran and Pakistan opened their own production lines, although technological assistance still generated revenue for Pyongyang. Since the UN arms embargo, at least four shipments of arms have been interdicted. Their total value, never mind net profit, fell far short of the estimated $500 million a year North Korean arms sales are supposed to generate. How many of its exports evaded capture is not known.

Read the full stories here:
Sanctions hit North Korea’s crumbling economy: report
Reuters
Cheon Jong-woo
5/23/2010

Looking for Leverage in All the Wrong Places
38 North
Leon V. Sigal

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RoK to halt all trade with DPRK over sinking of Cheonan

Sunday, May 23rd, 2010

According to the Washington Post:

South Korean President Lee Myung-bak said Monday that his country is stopping all trade and most investment with North Korea and closing its sea lanes to North Korean ships after the nation’s deadly attack on a South Korean warship.

Lee also called for a change in Pyongyang’s Stalinist regime.

The tough measures, announced in an address to his nation, were bound to ratchet up pressure on the isolated Pyongyang government and add a new flash point in U.S. relations with China.

“Fellow citizens, we have always tolerated North Korea’s brutality, time and again. We did so because we have always had a genuine longing for peace on the Korean Peninsula,” he said. “But now things are different. North Korea will pay a price corresponding to its provocative acts.”

Lee then said that “no North Korean ship will be allowed to make passage through any of the shipping lanes in the waters under our control” and that “any inter-Korean trade or other cooperative activity is meaningless.”

A senior U.S. official, traveling with Secretary of State Hillary Rodham Clinton in China, said the United States will back “all the steps the South Koreans are going to announce.” In an indication of the seriousness with which the Obama administration views the drama between the North and South, home to nearly 29,000 U.S. troops, he added: “We have not faced something like this in decades.” Lee apparently has ruled out military action because he does not want to trigger an all-out war.

The official said that, based on talks over the past two days, Chinese officials have not accepted the results of a South Korean investigation — backed by experts from the United States, Australia, Britain and Sweden — that implicated North Korea in the attack on the 1,200-ton Cheonan that killed 46 sailors. As such, it is unclear whether Beijing will support Lee’s measures or his call, also made in the speech, to take the issue to the U.N. Security Council.

China’s reluctance to agree with the report underscores the challenges the United States faces as it seeks to forge closer ties to Beijing. The U.S. official also noted Sunday that China and the United States still do not see eye to eye on the details of planned economic sanctions on Iran for its failure to stop its nuclear enrichment program. Of specific concern, he said, are disagreements between Beijing and Washington about how investments in Iran’s oil and gas sector will be treated. China has committed to investing more than $80 billion in Iran’s energy sector; tightened sanctions against Tehran could threaten those investments.

Tough options for China

The attack and its aftermath also threaten China’s place in the region and could force it to make an unwanted choice between South Korea and North Korea — two countries that it has handled deftly since normalizing relations with Seoul in 1992. South Korea wants China, which is a permanent member of the Security Council, to back Seoul’s call to take the Cheonan issue to the council. So does the United States, the U.S. official said.

But that could risk hurting Pyongyang, and China appears committed to maintaining the North Korean regime above all.

“For China,” the U.S. official said, “they are in uncharted waters.”

China reacted slowly to the Cheonan’s sinking, waiting almost a month before offering South Korea condolences. Then it feted North Korea’s Kim in May, apparently offering him another large package of aid, Asian diplomats said. China’s attitude has enraged South Korea.

Michael Green, a national security official during George W. Bush’s administration, said the Cheonan crisis highlights just how differently China views its security needs than the rest of the players in Northeast Asia. For years, as China worked with the United States, Russia, South Korea and Japan to try to persuade North Korea to give up its nuclear weapons programs, these differences were obscured. But the Cheonan’s sinking has changed that.

According to Yonhap, the Kaesong Industrial Zone will be spared from the chopping block:

South Korean Unification Minister Hyun In-taek said Monday that Seoul will still maintain the joint economic project in Kaesong despite the attack, but will “respond with resolute measures” to any bid by the communist neighbor to undermine the safety of its workers.

“If North Korea ignores our careful consideration to preserve the complex even under current circumstances, and subsequently threatens the safety of our citizens there, we will never tolerate any harm to our citizens,” Hyun said.

Hyun was speaking at a joint press briefing with the foreign and defense ministers following President Lee Myung-bak’s nationally televised speech condemning the North for the ship sinking.

Hyun was apparently referring to the half-year long detention of a South Korean worker in Kaesong last year amid deteriorating political ties between the countries.

Also according to Yonhap, some aid projects will be maintained:

Lee announced his government will suspend all trade and exchange programs with the North except for the Kaesong project, while maintaining minimum levels of humanitarian aid for infants and children living in the impoverished communist country.

“Under these circumstances, any inter-Korean trade or other cooperative activity is meaningless,” the president said, adding that North Korean ships will no longer be allowed to use South Korean waterways as short-cuts.

Yonhap reports:

A suspension of inter-Korean trade would deal a “direct blow” to North Korea by blocking its major source of hard currency needed to govern the reclusive and impoverished country, a Seoul think tank said Monday.

The state-run Korea Development Institute (KDI), however, noted in a report that such a move could fail to achieve its intended goal if other global powers like China do not agree, highlighting the importance of securing international cooperation.

“North Korea’s trade with the South has accounted for up to 38 percent of its total trade volume and makes up 13 percent of its gross domestic product. With the dollars obtained through inter-Korean trade, the North has expanded its businesses with China. It (the trade with the South) also helped Pyongyang to cushion any negative external risks such as sanctions by Japan, while acquiring dollars needed to govern the country,” the report said.

“If we push for a measure to suspend the trade, it could translate into a decline in its trade with China and make it tough to find other business partners as a result, dealing a direct blow to its regime by blocking it from obtaining dollars,” it added.

The report noted that a trade ban by the Seoul government would have a maximum level of impact if China follows suit, which it expects could place Pyongyang under a situation where “it has to think about its life or death.”

Currently, the North depends on South Korea and China for up to 80 percent of its external trade and 35 percent of its GDP, according to the report. Especially, China provides many strategically important materials such as oil to the North.

The report said that if China decides to support the North, it would reduce the overall impact but it will still destabilize its regime in the long term by making it heavily dependent on its closet ally and fast-emerging global economic power.

“It would weaken the regime’s principle not to depend solely on a single country even for its trade based on the so-called juche (self-reliance) doctrine. Also China’s support would prompt opening of the reclusive nation to outside, making it more difficult for the regime to keep its tight grip on domestic market and those who want and push for market opening,” the report said.

“In summary, a political choice by China would have some impact but in the end, a trade suspension with the South would cause a significant amount of pain to the country. We need to have to push for such an action with self-confidence if there is a consensus, while taking diverse efforts to persuade China over such a measure, while establishing an international cooperative framework with the United States and Japan as well,” it added.

Business Week (Bloomberg) reports on the impact of UN sanctions last year:

UN sanctions imposed on North Korea after its second nuclear test in May 2009 caused the North’s international commerce to shrink 9.7 percent last year, according to the Seoul-based Korea Trade-Investment Promotion Agency. Stripping out South Korea’s one-third share, China accounted for 78.5 percent of North Korea’s commerce, the agency said. North Korea, whose leader Kim visited China earlier this month, doesn’t release trade data.

The New York Times also has good coverage

The full text of President Lee’s speech can be found here.

All previous posts on the Cheonan are here.

Read full article here:
South Korea to halt all trade with North Korea over sinking of Cheonan warship
Washington Post
John Pomfret
5/24/2010

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The sinking of the Cheonan

Thursday, May 20th, 2010

UPDATE 68 (2012-8-27): The Hankyoreh reports on a new study (order the study here) that asserts that the Cheonan could have been sunk by an abandoned South Korean mine.  According to the article:

An article has been published in an international academic journal arguing that the explosion that sank the South Korean Cheonan warship in March 2010 may not have been from a North Korean torpedo, but from a mine discarded by the South Korean navy.

This is the second scientific study on the Cheonan sinking published in an academic journal, the first being a seismic analysis published last year by Yonsei University Department of Earth System Sciences professor Hong Tae-kyung. That study supported the findings of the government’s joint investigation team.

In the study published in the international academic journal “Pure and Applied Geophysics,” Korea Seismological Institute director Kim So-gu and the Geophysical Institute of Israel’s Yefim Gitterman wrote that analysis of the seismic waves, acoustic waves and bubble frequency made it clear an underwater explosion took place.

They said the seismic magnitude of the explosion was 2.04, that of 136kg of TNT and equivalent to the individual yield of the large number of land control mines abandoned by the Korean navy after they were first installed in the 1970s.

The findings are noteworthy in that they differ greatly from those of the Civilian-Military Joint Investigation Group (MCNJIG), which found the cause of the sinking to be a North Korean CHT-02D torpedo with a yield of 250kg of TNT exploding at a depth of six to nine meters, producing a seismic yield of 1.5.

Read the full Hankyoreh story here.

UPDATE 67 (4/1/2011): A group of US lawmakers are working to add the DPRK back to the US list of state sponsors of terror.  According to Yonhap:

A bipartisan group of congressmen will soon submit legislation to re-designate North Korea as a state sponsor of terrorism for its torpedoing of a South Korean warship and shelling of a South Korean border island that killed 50 people last year, sources said Friday.

“I understand Rep. Ileana Ros-Lehtinen has almost completed drafting the legislation, and she is likely to submit the legislation as soon as possible,” a congressional source said, adding several other Republican and Democratic congressmen are expected to sponsor the legislation.

Ros-Lehtinen (R-FL), chairwoman of the House Foreign Affairs Committee, introduced similar legislation in May last year but it didn’t pass.

In June, she had wreaths laid at the tombs of the 46 South Korean sailors killed in the sinking of the warship Cheonan in waters near the western sea border with North Korea.

UPDATE 66 (3/31/2011): A member of North Korea’s National Defense Commission has now issued a statement about the Cheonan sinking, as well as a subsequent artillery shelling of Yeonpyeong Island by North Korean forces eight months later.  According to KCNA:

A spokesman for the inspection group of the DPRK National Defence Commission issued the following statement on Thursday:

One year has passed since warship “Cheonan” sank in the waters off Paekryong Island in the West Sea of Korea.

But the south Korean authorities and military warmongers, hell-bent on the inter-Korean stand-off and steeped in distrust in compatriots, are still linking the warship “Cheonan” sinking case with the DPRK and passing the buck for the Yonphyong Island shelling on it, escalating confrontation with it.

The inspection group of the NDC of the DPRK has already opened to the public the truth of the two cases twice.

At the outset of the occurrence of the “Cheonan” warship sinking case, the DPRK expressed regret at those who suffered the disaster from the viewpoint that they are members of the Korean nation though they were soldiers of the south Korean army who leveled guns at the DPRK.

Nevertheless, the south Korean authorities and military warmongers floated investigation results without any scientific ground and objective nature in a bid to deliberately lay obstacles in the way of achieving national reconciliation and unity and block the way of achieving peace and prosperity desired by all the fellow countrymen.

They have become evermore sinister and brazenfaced in their reckless anti-DPRK confrontation rackets with the first anniversary of the occurrence of the case as a momentum, in particular, only to touch off burning resentment of all the Koreans.

This situation compelled the inspection group of the NDC of the DPRK to re-clarify its principled stand internally and externally.

1. The south Korean authorities and military warmongers should no longer perpetrate such reckless act as linking the “Cheonan” warship sinking case with the DPRK.

Explicitly speaking once again, the DPRK has nothing to do with the case. This means something irrelevant to it can never be anything in which it is allegedly involved no matter how much water may flow under the bridge.

Any attempt to deliberately link the DPRK with the case while shunning this stark reality would only serve as a living testimony that they are only seeking to escalate confrontation with fellow countrymen and deteriorate inter-Korean relations.

The south Korean side walked out of the venue of the preliminary contact for opening the north-south high-level military talks without any patience. But it falsified the fact, claiming that the north was the first to walk out of the venue. They should stop such folly at an early date and no longer link the DPRK with the above-said case.

The further they bedevil inter-Korean relations while spreading the “story about the north’s involvement” full of lies and fabrications, the deeper pitfall of history they will find themselves.

The inspection group of the NDC will probe the truth about the “farce” by issuing the third and fourth statements till the above-said story has disappeared.

2. They should no longer work hard to pass the buck for the Yonphyong Island shelling on the DPRK.

Explicitly speaking, the above-said shelling incident was an unsavory case which occurred as they preempted a provocation against the DPRK.

Had they not preempted firing shells into the inviolable territorial waters of the DPRK, there would not have occurred the shelling on the island.

Various forms of firing exercises and drills targeted against the DPRK have frequently taken place in the areas of south Korea and waters around it for more than six decades since the division of the country. But the army of the DPRK has not taken any physical counteraction against them even once.

Any attempt to conceal the criminal preemptive shelling and shift the responsibility for it onto the other is an act of deceiving not only themselves but all the fellow countrymen and an anti-peace act little short of pulling the wool over the eyes of the whole world.

If they do not want to suffer the same disgrace as they did through the Yonphyong Island shelling incident, they should broad-mindedly halt such shameless act as shifting their blame onto the other and have a proper attitude to settle the issue.

Their oft-repeated talk about someone’s responsibility for the Yonphyong Island shelling would only harden the DPRK’s determination to protect the fair and aboveboard extension of the Military Demarcation Line in the West Sea.

3. The present south Korean authorities and military warmongers should stop the reckless anti-DPRK hysteria under the pretence of the two cases.

They are resorting to anti-DPRK confrontation rackets and reckless psychological warfare, anxiously waiting for “contingency” of someone to occur, and staging various forms of military exercises and drills, stoking a war atmosphere. But they should bear in mind that their much anticipated “contingency” is bound to take place in the south, not in the north.

Their anti-DPRK confrontation hysteria kicked up by them under the pretexts of the two cases is as foolish an act as shaking fist in the back lane after being hit hard in a street.

This is nothing but a thoughtless and traitorous action to calm down the distrust in the two cases shown by different circles of south Korea, settle the ever-growing “discord” in the south, adhere to the nonsensical “theory of principle” in dealing with the inter-Korean relations and stick to the wrong hard-line policy towards the north.

The inspection group of the National Defence Commission regards their anti-DPRK confrontation campaign being staged on the lapse of one year since the occurrence of the warship “Cheonan” sinking case as no more than a farce of “counting the age of a dead child”.

The DPRK wishes more ardently than anyone else to see the tension defused on the Korean Peninsula and achieve peace through the improved relations between the north and the south and this process leading to peace and prosperity of Northeast Asia and the rest of the world.

Precisely for this reason the DPRK proposed on its own initiative comprehensive dialogue and negotiations and has made every possible effort of goodwill to put them into practice.

The reality indicates that the nation is standing at the crossroads of detente and increased tension and peace and prosperity and war.

It is the stand of the Korean People’s Army to have bold dialogue or fight a real war.

The present south Korean authorities and puppet military warmongers should properly understand that they are standing on the crossroads of dialogue and war.

UPDATE 65: Production value at the Kaesong Industrial Zone returns to pre-Cheonan levels.

UPDATE 64: South Korea Abandons Demand for Apology Over Ship’s Sinking

UPDATE 63: DPRK offers samples to refute claims it sank the Cheonan.  According to Reuters:

North Korea offered on Tuesday to provide samples of its torpedoes to refute an international investigation that blamed Pyongyang for the sinking of a South Korean warship earlier this year.

UPDATE 62: Russia will not release its Cheonan report.  Read more in the Korea Times.

UPDATE 61: South Korea has issued another report claiming the DPRK is responsible.  Read about it here, here and here.

UPDATE 60: DPRK torpedo catalog includes name of torpedo exporter.

UPDATE 59: DPRK asked to hold summit before Cheonan incident.

UPDATE 58Russian team casts doubt on Cheonan findings.

UPDATE 57: The Daily NK reports that the alleged North Korean propeller came from Kagam, Kaechon county. 39°32’37.77″N, 125°50’47.24″E.

UPDATE 56: Barbara Demick writes about South Koreans skeptical of the government’s claims.

UPDATE 55: Nautilus Institute publishes inconsistencies in RoK Cheonan report.

UPDATE 54North Korean officials postpone warship talks with US (Washington Post)

UPDATE 53: UNSC condemns sinking but does not blame DPRK.

UPDATE 52: UNSC reaches deadlock.

UPDATE 51: North and South Korean ambassadors to South Africa exchange words at World Cup event

UPDATE 50: South Korea Rejects North on Joint Sinking Probe Idea

UPDATE 49: Cheonan Investigators Presented Wrong Torpedo Diagram

UPDATE 48: John McGlynn brings a skeptical eye to the Cheonan findings

UPDATE 47: Gomes has been threatened over the political fallout resulting from the sinking of the Cheonan.

UPDATE 46: EU Condemns N.Korea Over Cheonan Sinking

UPDATE 45UNSC raises no objections to RoK assessment of sinking.

UPDATE 44: 11 DPRK ships turned away from ROK waters 20 times.

UPDATE 43: South Korea adds regulatory barrier to inter-Korean trade.

UPDATE 42: Hankyoreh: Wide-ranging incompetence and cover-ups took place night of Cheonan sinking, audit reveals

UPDATE 41: South Korea has installed speakers along the DMZ (previously removed under the Sunshine Policy).  There seems to be some dispute about how many.  Korea Times says 2Yonhap says 11.

UPDATE 40: DPRK sends letter to UNSC.

UPDATE 39: Lankov was right.  The Russians are unconvinced. See here and here.

UPDATE 38: Russian experts complete investigation of Cheonan in Seoul but do not release findings. Lankov believes that the Russian government will come to know what actually happened, though their public comments will remain neutral.

UPDATE 37The Cheonan incident may have brought down the PM of Japan.

UPDATE 36: South Korea asks UN Security Council to act.

UPDATE 35: South Korea wants UN to send symbolic message, not increase sanctions.

UPDATE 34: China aims to be impartial.

UPDATE 33: Seoul still waiting for China to send an investigation team to examine the evidence.

UPDATE 32: Japan tightens sanctions.

UPDATE 31: South Korea refutes the DPRK’s counter-claims.  Read more here and here.

UPDATE 30: The South Korean govenrment delays propaganda broadcasts. Private groups continue to send propaganda. baloons.

UPDATE 29: The EU has cancelled a parliamentary delegation to the DPRK.

UPDATE 28: The Military Armistice Commission, under the United Nations Command (UNC), has completed its own investigation into the sinking of the “Cheonan” naval vessel.

UPDATE 27: The Russians have sent a team to Seoul to examine the ROK’s claims.

UPDATE 26: DPRK rejects ROK evidence. According to the AFP:

North Korea has flatly rejected evidence showing it torpedoed a South Korean warship with the loss of 46 lives, saying it does not even own a midget submarine allegedly used for the March attack.

The North’s powerful National Defence Commission (NDC), chaired by leader Kim Jong-Il, held a rare press conference on Friday and denied Pyongyang’s involvement, according to official North Korean media.

Major General Pak Rim Su, director of the policy department of the NDC, said the North does not have a 130-tonne “Yeono (salmon)-class” submarine, which the South says torpedoed its 1,200-ton corvette, the Cheonan, in the Yellow Sea.

“We don’t have anything like a 130-tonne Yeono-class submersible,” Pak was quoted by Pyongyang’s Chungang TV as telling reporters.

A multinational investigation led by Seoul concluded earlier this month that the March 26 sinking was caused by a torpedo attack from the North.

South Korean investigators said a Yeono class midget submarine had intruded into South Korean waters via international waters.

But Pak said: “It does not make any sense militarily that a 130-tonne submersible carrying a heavy 1.7-tonne torpedo travelled through the open sea into the South, sank the ship and returned home.”

But South Korea’s Yonhap news agency quoted South Korean officials as saying the North’s submarine fleet includes around 10 Yeono class submarines.

Pak also rebutted Seoul’s allegation that salvaged fragments of the torpedo matched design specifications that appeared on brochures the North allegedly sent to an unidentified potential buyer of North Korean torpedoes.

“Who in the world would hand over torpedo designs while selling torpedoes?” he said.

But Yonhap quoted an unidentified senior government official as saying that the South got hold of brochures sent by a North Korean state-run trading company to a potential weapons buyer that contain design specifications of three types of torpedoes.

Senior Colonel Ri Son Gwon dismissed as a “fabrication” a serial number hand-written on a torpedo fragment reading “1 bun” or number one.

South Korea said the serial number handwritten in Korean was strong evidence of Pyongyang’s involvement in the sinking.

“When we put serial numbers on weapons, we engrave them with machines,” Ri said. “We use ‘bun’ only for football or basketball players,” he said.

But South Korean investigators said the North also uses “bun” for numbering things to be assembled, attributing the information to defectors from North Korea.

Pak said the Seoul-led multinational team was not in a position to conduct an objective probe and attacked Seoul for rejecting Pyongyang’s demand to allow its own experts to investigate the cause of the sinking.

Voice of America has more.

UPDATE 25: Daily NK reports that DPRK is not on war footing.

UPDATE 24: China put in awkward position vis a vis South Korea, Japan.  See here, here, and here.

According to the New York Times:

Japan, which already bans trade with the North, said Friday that it would lower the limit on the amount of undeclared cash that could be carried to North Korea to 100,000 yen, or about $1,100, from the current 300,000 yen, or $3,300.

The maximum amount that can be sent to North Korea without being reported to the Japanese government was lowered to $33,000 from $110,000.

According to Washington Post:

A visit last week to Beijing and Seoul by Secretary of State Hillary Rodham Clinton served, at least, to put China on the spot. Ms. Clinton rightly pressed the Chinese leadership to consider the commission’s 400-page report. She spoke publicly about the need for “a strong but measured response” to the incident as well as cooperation on the future direction of North Korea, which some experts believe may be unraveling.

China’s best response came Friday when Premier Wen Jiabao, on a visit to Seoul, reportedly told President Lee Myun-bak in a closed meeting that Beijing would not protect the North if it concluded that the North was responsible. South Korean officials took that as a hint that China might not oppose Mr. Lee’s plan to seek a U.N. Security Council resolution condemning the Kim regime. Yet China has offered no sign that it will take any action of its own to pressure the North, though it has far more leverage than any other country. Indeed, President Hu Jintao hosted Mr. Kim this month — and probably committed to supply him with more aid — even after the naval attack.

In the short term China’s behavior has benefited the United States. Watching Beijing defend the indefensible probably helped the Japanese government settle a dispute with the Obama administration over a U.S. base on Okinawa. It has shown South Koreans as well as people throughout Asia why the United States remains an indispensable guarantor of security in the region.

According to the LA Times:

South Korea and China are projected to do up to $200 billion in trade annually by 2012, according to Wen’s remarks Friday in Seoul; trade between China and North Korea is estimated at $1.5 billion.

UPDATE 23: The Financial Times puts together a list of scenarios which might explain the Cheonan’s sinking. I have paraphrased them below:

Revenge: North Korea wanted revenge for a sea battle in November, when one of its ships was badly damaged.

Succession: Some defectors have said he is trying to associate Jong-eun’s name with major successes in domestic propaganda.

Internal power struggle: Some analysts believe the attack could have been the work of a single rogue commander, possibly vying for patronage as the succession gathers pace. North Korea this month made the highly unusual announcement that it was removing Kim Il-chol, a senior admiral on the National Defence Commission, prompting speculation the navy could have exceeded its authority.

Reversion to hardline ideology: Some scholars say Kim Jong-il had, until last year, been increasingly open to advice from a more liberal faction, advocating market and currency reform. When this backfired, he had no choice but to listen more to Cold War-era ideologues.

Breakdown of command: Perhaps the most worrying of the possibilities is that Kim Jong-il is no longer in full command, possibly because of a stroke the North Korean leader suffered in 2008. This could mean the sinking was either the result of jostling commanders or poor judgment from Mr Kim himself. Andrei Lankov, a North Korea expert at Kookmin University in Seoul, believes the country has become a “rudderless ship” and that logical decision-making has fallen to pieces, as seen when Pyongyang revalued its currency to disastrous effect late last year.

Distract from economic woes: South Korea’s military intelligence argues the sinking of one of its warships by Pyongyang could distract from hunger and economic failure in the north.

Bitterness about G20 meeting in Seoul: Seoul has been turning its presidency of the G20 group of leading economies this year into domestic propaganda, parading how well it has developed economically since the Korean War of 1950-1953.

UPDATE 22: KCNA posts links to all of the DPRK’s official coments.

UPDATE 21: Lankov explains the inconsistent behavior of the South Korean government.

UPDATE 20South Korea halts all trade with the DPRK over the Cheonan incident.

UPDATE 19:(h/t Aidan Foster-Carter) DPRK military spokesman may be the same individual who led the capture of the USS Pueblo.  According to the Associated Press:

Evidence presented Thursday to prove North Korea fired a torpedo that sank a South Korean ship was fabricated by Seoul, North Korean naval spokesman Col. Pak In Ho told broadcaster APTN in an exclusive interview in Pyongyang.

He warned that any move to sanction or strike North Korea would be met with force.

“If (South Korea) tries to deal any retaliation or punishment, or if they try sanctions or a strike on us …. we will answer to this with all-out war,” he told APTN.

And according to KCNA (2003):

Pak In Ho, an officer and hero of the republic who was the head of the seven-member death-defying corps that captured the ship, briefs visitors on what the ship did, the combat for capturing it and the brazen-faced and crafty nature of the U.S. imperialists.

UPDATE 18: According to Reuters,  the United Nations Command (UNC) has launched an investigation into whether North Korea violated the Korean War armistice.  On Monday, South Korea will bring the case before the UNSC.

UPDATE 17: According to Voice of America,  the DPRK is demanding access to the ROK’s investigation of the Cheonan sinking.  Part of me wonders if the North Koreans even remember Park Wang-ja.

UPDATE 16: According to the Choson Ilbo:

…the submarine and support vessel left the base on Cape Bipagot, around 80 km from Baeknyeong Island on March 23 and maneuvered out of the sight of South Korean and U.S. intelligence. The ship apparently accompanied the submarine to provide support and offer aid in case the sub encountered difficulties. The submarine took a detour out into open seas and arrived in waters to the west of Baeknyeong Island on March 25. There it is believed to have awaited its prey 10 m under the surface for about a day.

cheonan-sinking-thumb.jpg

Click image for larger version

You can click here to see satellite imagrey of all the DPRK’s south-western naval facilities, including Bipagot.

Also according to the same story in the Choson Ilbo:

The submarine class was unknown until now. The 130-ton sub ranks between the shark (325 tons) and a Yugo class (85 tons). Air Force Lt. Gen. Hwang Won-dong, the chief of the intelligence analysis team, said, the sub “is similar to the shark-class submarine and was built recently for export, equipped with night-vision equipment and other high-tech gadgets, as well as a unique structure to enhance its stealth capabilities.” Intelligence experts say the sub is the same as the three “Ghadir” class midget submarines the North exported to Iran.

Planeman has some terrific information on the sub type.  Check out these pictures from Bluffer’s Guide to Iranian Naval Power: Sub outside, Sub interior.

According to his web page:

Dimensions: L 29m, W 2.75m
Displacement : 120 tons dived
Crew: ?
Endurance: ?
Speed (est): 11kts surfaced, 8kts submerged
Powerplant: Diesel-electric

Armament: 2 x 533mm (21”) torpedo tubes with 2 torpedoes, Skhval rocket torpedoes or ~4 mines. Possibly submarine launched anti-ship missiles but unsubstantiated.

Of North Korean design, the IS-120 Ghadir (Qadir) submarine closely resembles the North Korean “P-4 Class”.

Some models of the Ghadir appear to have conventional cruciform tail fins with conventional propeller instead of the North Korean sub’s unconventional control plane arrangement and co-axel twin propeller. Photos of a production boat however show the unusual under-tail hydroplane position as per the North Korean boats. The coaxil twin props of the P-4 is replaced by a single skewed skrew in the usual place, plus a small ducted skrew mounted above, possible steerable. The exact reasoning for the two propellers is not clear but it is likely that the smaller one is intended for slow/quite running and counter-drift. Its mast and unusual snorkel (which folds backwards into the hull -casing when not in use) is almost identical however. It is possible that there are several iterations of boat with varying tail arrangements and snort-mast stowage (some appear to remain above the deck when folded).

Another charactristic which has yet to be explained is a small container mounted externally on the forward deck just ahead of the sail. This resembles an oil drum. One guess might be compressed gas.

Estimates of the size of this submarine vary greatly but video evidence confirms that there’s barely enough room to stand up in the hull.

UPDATE 15: More media (H/T NKnews.org)

North Korea threatens war in English-language radio broadcast: Audio clip on YouTube.

Clinton Condemns Attack on South Korean Ship
New York Times
Mark Landler
5/21/2010

U.N. Command to probe whether N. Korea violated armistice
Yonhap
Kim Deok-hyun
5/21/2010

Int’l Experts Agree on Cheonan Findings
Choson Ilbo
5/21/2010

How Did N.Korea Sink the Cheonan?
Choson Ilbo
5/21/2010

UPDATE 14: (5/20/2010) Today the South Korean government officially accused the DPRK of intentionally sinking the Cheonan with a torpedo from a submarine.  Here are a number of stories and documents:

Seoul vows retaliation after confirming N.K. torpedo sank warship
Yonhap
Kim Deok-hyun
5/20/2010

Irrefutable Evidence Implicates N.Korea, Says Lee
Choson Ilbo
5/20/2010

Cheonan Sinking: Photographic Evidence
Daily NK
5/20/2010

Pentagon won’t say ship sinking is an act of war
AP via Washington Post
Anne Flaherty and Matthew Lee
5/20/2010

The BBC offers a PDF of the findings of the investigatory panel.  It is available in PDF here.

What’s going on in Pyongyang
Korea Times
Andrei Lankov
5/20/2010

UPDATE 13: South Korea to formally accuse the DPRK.  According to the Washington Post:

South Korea concluded that North Korea was responsible for the attack after investigators from Australia, Britain, Sweden and the United States pieced together portions of the ship at the port of Pyeongtaek, 40 miles southwest of Seoul. The Cheonan sank on March 26 after an explosion rocked the 1,200-ton vessel as it sailed on the Yellow Sea off South Korea’s west coast.

The officials, who spoke on the condition of anonymity because South Korea has yet to disclose the findings of the investigation, said subsequent analysis determined that the torpedo was identical to a North Korean torpedo that South Korea had obtained.

Of the countries aiding South Korea in its inquiry, officials said that Sweden had been the most reluctant to go along with the findings but that when the evidence was amassed, it too agreed that North Korea was to blame. A spokesman for the Swedish Embassy declined to comment.

China has called on both parties to remain calm, but its fence-sitting risks damaging its ties with South Korea, East Asian officials said. “China wants to be a wise giant treating all parties the same,” said a senior diplomat. “But somebody committed murder here. This is ridiculous. This is a barometer for China. We are watching how they respond.”

To that end, South Korea will request that the U.N. Security Council take up the issue in an effort to tighten sanctions on North Korea, the officials said. The United States has indicated it would support such an action, U.S. officials said. President Obama and Lee spoke via telephone on Monday, according to the White House. Lee briefed Obama on the probe, the White House said, and the two “committed to follow the facts of the investigation wherever they lead.”

The Obama administration is also leaning toward relisting North Korea as a sponsor of terrorism, a move that would open the door for even more sanctions that could strike at the heart of North Korea’s economy.

Japanese Foreign Minister Katsuya Okada told his South Korean counterpart on Monday that Japan would also support taking the issue to the Security Council, the Japanese news media reported Tuesday.

It is unclear whether Beijing would support taking the issue to the Security Council; a senior Chinese official said China would first need proof that North Korea launched the attack.

Analysts said China would be reluctant to take strong measures against North Korea because its main interest is to keep the country intact. North Korea’s collapse would create hundreds of thousands of refugees and probably lead to the emergence of a Western-leaning united Korea on China’s border.

Also of interest….North-East Asia Matters translates a Choson ilbo piece which reports on the importance of some recovered torpedo fragments. According to the report, ” the joint investigation team reportedly was able to retrieve a pair of torpedo propellers in relatively good shape last week in the mud near the location where the Cheonan went down. After comparing the serial number imprinted on the retrieved propellers to a known North Korean sample, the investigation team reportedly found the font and the imprinting style used in the serial number of the retrieved propeller to be a match to the North Korean sample. Read more here.

More updates via NKnews.org:
1. Choson Ilbo on the torpedo serial numbers.
2. S. Korea briefs envoys of China, Russia, Japan on warship sinking

Read the full article here:
South Korea to officially blame North Korea for March torpedo attack on warship
Washington Post
John Pomfret and Blaine Harden
5/19/2010

UPDATE 12: South Korean Ministries asked to stop DPRK aid.

UPDATE 11: South Korea freezes spending on the DPRK.

UPDATE 10: Bermudez speculates on the DPRK’s submarines.

UPDATE 9: South Korea is examining DPRK trade and investment.

UPDATE 8: Here are the DPRK’s naval bases in the area where the Cheonan sank.

UPDATE 7: Seoul considers how it can respond should the DPRK be behind the sinking of the Cheonan.  It considers resuming broadcasts across the DMZ, reducing imports from the DPRK, and refraining from giving the DPRK a free feed of the World Cup.

UPDATE 6: According to the New York Times explosive residue has been detected on the Cheonan:

“It is true that traces of RDX, a chemical substance used in making torpedoes, have been found,” Defense Minister Kim Tae-young said Monday, referring to a component common to many military explosives. He said that there was “a high possibility” that a torpedo was the cause of the explosion, but that it was also too soon to conclude definitively that it was the cause.

The material was found on the ship’s smokestack and in samples of sand from the site of the sinking, said Rear Adm. Moon Byung-ok, a spokesman for the investigation team. He noted that RDX is also used in making mines.

UPDATE 5: Evan Ramstad writes in the Wall Street Journal how this event could influence the South Korean elections:

As South Korea gets closer to understanding what happened to a naval ship that sank near the maritime border with North Korea last month, the incident is shaping up to be a major influence on a legislative election in June that will be the political event of the year here.

The sinking of the Cheonan patrol ship on March 26 is already the most difficult challenge President Lee Myung-bak has faced since he took office in early 2008. It led to the death of 46 South Korean sailors—the most in a military incident here since the 1980s. And it raised suspicions of North Korean involvement, because it occurred near the inter-Korean maritime border where the South’s navy sent a North Korean vessel back in flames after a skirmish last November.

It also happened as South Korea nears the biennial legislative election on June 2, a vote that comes near the halfway point of Mr. Lee’s five-year tenure and, until the Cheonan incident, appeared likely to be a referendum on his policies and handling of the economic crisis.

“Generally speaking, people have a fairly high level of satisfaction with Lee government, especially over the economy,” says Kang Won-taek, a political scientist at Soongsil University in Seoul. “But people tend to use this election, like the U.S. mid-term election, to send a warning signal against the incumbent government.”

Now, the Cheonan sinking has added a new element. Politicians from Mr. Lee’s ruling conservative Grand National Party and a related faction are staking out a hard line in case North Korea is involved. The leader of a minority conservative party has already called for a military strike.

Meanwhile, opposition politicians, in progressive and nationalist parties, are using the incident to criticize Mr. Lee’s administration, with some seeking the resignation of top military officials.

North Korea stepped into the fray this weekend when its state-run news agency on Saturday relayed a commentary from an unidentified military source that blamed South Korea for the sinking and said Mr. Lee’s government was trying to use it against the North. However, the statement did not explicitly deny North Korean involvement in the sinking.

Last week, a salvage crew raised the stern of the ship from 37 metersof water and investigators found the bodies of 36 sailors inside. The stern sank first, while the bow floated for several hours as 58 sailors clung to it and were rescued.

Mr. Lee and top defense officials have said they won’t be able to determine what caused the sinking until the ship is fully recovered. Another salvage crew will begin lifting the bow, which settled in about 21 meters of water, as soon as Monday.

Survivors say the Cheonan was rocked by an external explosion. A preliminary examination of the stern confirmed that assessment, the military’s chief investigator said Friday, but he added that it will take more time to know whether it was struck by a torpedo or a mine.

If North Korea is found to be involved, Mr. Lee and his party may get a boost in what Mr. Kang called a “rally around the flag effect.” The political scientist added, “At the same time, the Cheonan case shows some poor performance of the incumbent government in military affairs and will lead to some discussion of political accountability.”

If North Korea is found to have caused the sinking, Mr. Lee will face a difficult decision over how to respond. Mr. Lee hasn’t publicly discussed his options, but analysts say they include economic penalties like cutting off more trade with Pyongyang, a return to the use of radio broadcasts to send messages to North Koreans and a variety of military strikes.

On Sunday, South Korean foreign minister Yu Myung-hwan told KBS, a South Korean TV network, that the country will likely first ask the United Nations Security Council to become involved in imposing a penalty if North Korea caused the sinking.

Much of the North Korean commentary released Saturday on the sinking was devoted to its effect on South Korean politics. North Korea’s authoritarian government has for years favored nationalist politicians in the South and has heaped criticism on Mr. Lee since shortly after he took office.

“If public opinion is built to claim that the accident occurred due to ‘an internal factor’ and its cause is not properly clarified, the group of traitors will be held directly responsible for it and, accordingly, will not be able to escape a heavy defeat in the forthcoming ‘June 2 local elections’,” the commentary said.

The language bore the assumption—which is standard in North Korea—that South Korea is actually a wayward part of a country that Pyongyang should run, is governed by traitors to its regime and conducts unfair elections. The commentary went on: “This will lead to the split of the conservative camp including the ‘Grand National Party’ and the weakening of its ruling power, throwing the group into an inescapable predicament.”

UPDATE 4: The Cheonan has been recovered and signs point to an external explosion (torpedo or mine).  According to Reuters (via MSNBC):

The likelihood North Korea sank a South Korean naval ship near their disputed border rose when Seoul said on Friday an external explosion probably caused the ship to split in two, killing dozens.

South Korea’s defense minister said this month the 1,200-tonne Cheonan may have been hit by a torpedo, immediately putting suspicion on North Korea and stoking concerns that the incident could start a conflict on the long divided peninsula.

“Conclusively, after a visual inspection, there is a higher chance of an outer explosion than an internal one,” Yoon Duk-yong, a top investigation official, told a news conference.

UPDATE 3: Aidan Foster-Carter provides context for the sinking.  Read his piece in the Asia Times here.

UPDATE 2: Andrei Lankov offers a rationale for the South Korean government’s handling of the situation.  According to the Herald Tribune (via the New York Times):

On the evening of March 26, Cheonan, a 1,200-ton South Korean corvette, was on patrol in coastal waters near the disputed border with North Korea when its stern was suddenly torn away by a powerful explosion.

The warship sank within a few minutes, taking the lives of 46 sailors. The South Korean government initially assumed the warship was attacked by a North Korean submarine and put its military on high alert.

However, the next morning the South Korean government began to work hard to dismiss or at least downplay the probability of a North Korean attack. President Lee Myung-bak and his officials warned against “premature conclusions” and emphasized that there was no definite evidence linking the Cheonan disaster to North Korea.

They might be right: despite occasional bouts of bellicose rhetoric, North Korea is currently in a negotiating mood (that is, seeking to squeeze more money from the outside world). But the evidence points to an external explosion roughly equivalent to that of 180 kilograms of TNT, so a mine or torpedo are the most plausible explanations.

If so, why is the Seoul government dismissing such an option? There are good reasons for this. If North Korean involvement was established, the Seoul government would face a hard choice: it would have to retaliate or be seen as spineless. This is a lose-lose situation for South Korea, since it has no way of “punishing” the North.

Full-scale war is out of the question. The military balance leaves almost no doubt that a war would be won by the South (with some American involvement), but the price of victory would be unacceptably high.

The Seoul metropolitan area, home to half of South Korea’s population, lies within range of a heavy concentration of North Korean artillery. A massive artillery barrage would leave many thousands dead and devastate vital parts of the country. Any advance north across difficult and heavily fortified mountainous terrain would also be very costly — not to mention the costs of postwar reconstruction.

So nothing short of a massive North Korean attack on major population centers in the South would likely be seen by Seoul as sufficient cause for a large-scale military operation.

Limited actions, such as raids against the North Korean naval and military installations, would make the Seoul government look strong in the eyes of voters, but would create many problems for which the same voters would soon start blaming the government.

Plus, such raids are useless. Kim Jong Il and his henchmen would not lose sleep if they learned that a few dozen North Korean sailors or soldiers were killed in a South Korean attack. In the North, even the death of many thousands is politically irrelevant so long as they are not members of Kim’s inner circle. At the same time, such raids would scare investors away from South Korea and damage its financial rating.

Financial sanctions, such as closing the Kaesong industrial park, a joint South-North economic development, or freezing the few remaining exchange projects, might seem attractive at first glance, but in the long run could be counterproductive. Contrary to some assumptions, the Kaesong park and other exchange projects are damaging for Kim Jong Il, since they represent a potentially dangerous contact with the outside world.

Without any means of retaliating, Lee Myung-bak’s administration may have decided to play down the likelihood of North Korea’s involvement or at least portray it as one of several possible explanations.

Whether North Korea was involved or not, the Cheonan affair is a sober reminder that if North Korea did choose to become aggressive again, not much could be done to counter it. Partial operations might be impressive but are inefficient, and large-scale retaliation would likely be quietly blocked by the South Koreans. This is understandable — they’re the ones who live on the front line.

(more…)

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RoK archaeologists return south after excavating Manwoldae Palace

Wednesday, May 19th, 2010

According to Yonhap:

A group of South Korean archaeologists returned home Tuesday after ending a months-long joint excavation of an ancient palace in North Korea, a Unification Ministry official here said.

The 11 archaeologists had teamed up with their North Korean counterparts since March to excavate the remains of Manwoldae, a royal palace of the Goryeo Kingdom (918-1392), in the North Korean border town of Kaesong.

The group decided to return about three weeks earlier than scheduled because enough progress was made, ministry spokesman Chun Hae-sung said, dismissing speculation that rising tension on the peninsula forced them to come back.

The results of the excavation will be announced in a seminar later this year, he said. The palace was built over a century ago, and only the ruins of its foundations exist today.

Here is a satellite image of Manwoldae Palace.

Read the full story here:
S. Korea archaeologists return after excavating ancient palace in N. Korea
Yonhap
Sam Kim
5/18/2010

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RoK halts sand imports from DPRK

Wednesday, May 19th, 2010

According to Yonhap:

South Korean companies have suspended their sand imports from North Korea, one of the longest-running economic cooperation projects between the countries, as tension mounted over the March sinking of a South Korean warship, a Seoul official said Tuesday.

Seven South Korean companies have stopped sending cargo vessels to North Korea since Monday, Unification Ministry spokesman Chun Hae-sung said.

“We warned them to be careful about the safety of their employees” because political tension is rising between the Koreas, Chun told reporters.

He denied that the government pressured the companies into suspending their imports, saying they “voluntarily” halted their operations after the warning.

“There are fears that further deterioration in the inter-Korean ties may undermine their businesses,” he said.

The suspension is the latest in a series of developments that indicate worsening ties between the Koreas after the warship sank near the border with the North, killing dozens of seamen.

South Korea suspects the North was behind the tragedy and is set to announce the results of its weeks-long probe into the sinking later this week, vowing a stern response to those found responsible. Pyongyang denies any role in it.

The cargo companies have brought more than 38 million tons of sand from North Korea since 2004, the ministry said in a statement. Most of the sand came from the western coastal city of Haeju.

The trade, despite its small scale, was considered a symbol of reconciliation because it was seen as mitigating tension along the maritime border between the Koreas.

Their navies have clashed three times near the Yellow Sea border since 1999, the latest in November of last year.

Since last week, South Korea has also stopped funding government-level exchanges with North Korea and urged hundreds of companies to refrain from starting new ventures with Pyongyang.

The countries remain technically at war after the 1950-53 Korean War ended in a truce rather than a peace treaty.

Read the full story here:
S. Korea halts sand imports from N. Korea amid tension
Yonahp
http://english.yonhapnews.co.kr/northkorea/2010/05/18/88/0401000000AEN20100518007600315F.HTML
Sam Kim
5/18/2010

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RoK ministries asked to suspend aid to DPRK

Wednesday, May 19th, 2010

According to the Donga Ilbo:

The Unification Ministry said Monday that it has asked ministries to suspend aid to North Korea requiring government budget.

The ministry had issued recommendations to delay the signing of new contracts and the shipment of materials to the North to companies involved in inter-Korean cooperation.

Ministry spokesman Chun Hae-sung said, “We sent official letters to 10 related ministries, including the Strategy and Finance Ministry, the Health and Welfare Ministry, and the Korea Forestry Service Friday asking for the temporary suspension of assistance projects for North Korea run by those ministries.”

“This measure has been taken in light of the North’s seizure of South Korean real estate in the Mount Kumgang area and the grave nature of inter-Korean relations of late.”

Seoul has also begun efforts to survey inter-Korean projects conducted by the 10 ministries. Last year, the ministries ran a budget of six billion won (5.2 million U.S. dollars) to assist the North.

The Unification Ministry also contacted companies involved in inter-Korean cooperation, excluding those operating at the Kaesong Industrial Complex, to refrain from making new contracts, investment and visits Tuesday and Wednesday last week.

With analysts saying Seoul has taken a series of measures in the wake of the Cheonan sinking, a Unification Ministry source said, “Since the situation in inter-Korean relations has gotten grave and highly treacherous, we informed related ministries as a preemptive measure to reduce risks.”

Unification Minister Hyun In-taek also told reporters Monday, “We can hardly say that we’ve taken any practical countermeasures.”

Read the full story here:
Ministries Asked to Suspend Aid to N. Korea
Donga Ilbo
5/18/2010

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RoK freezes DPRK funds

Monday, May 17th, 2010

According to the Christian Science Monitor:

South Korea said Monday it was freezing government funds for North Korea, just days before the findings of an international investigation into the sinking of the Cheonan warship are scheduled for release.

Tensions have been high since the Cheonan was torn in half by an unexplained explosion and sank on March 26, killing 46 South Korean sailors. It is widely suspected that the explosion came from a North Korean torpedo, but the South has avoided directly accusing the North, saying it will wait until the results of the investigation are announced.

But South Korea’s decision to scale back contact with North Korea may be a sign that it is preparing for the probe’s findings, which will be released by Thursday. The South suspended funding for government-level exchanges with North Korea at 10 ministries. Seoul has already asked South Korean companies not to ink new deals with Pyongyang or send resources across the border, reports Agence France-Presse.

After the Cheonan report is released the South is expected to ask the United Nations Security Council to place new sanctions on the culprit. AFP reports that the South is also considering halting trade with the North and resuming loudspeaker broadcasts on the border that criticize the North’s regime in Pyongyang.

Because Russia and China have vetoes on the Security Council the South is hoping to present “a smoking gun” indicating the North’s involvement. That would leave Russia and China little room to oppose more sanctions on Pyongyang. South Korean Defense Minister Kim Tae-young has said the report will leave little doubt as to who was responsible and after its release South Korea would “work out the next step in a clear and stern manner.”

Read the full story below:
South Korea freezes North Korea money ahead of Cheonan warship sinking report
Christian Science Monitor
Kristen Chick
5/17/2010

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RoK examining DPRK trade and investment

Sunday, May 16th, 2010

According to Yonhap:

Unification Ministry spokesman Chun Hae-sung told reporters that the government has urged about 200 companies to refrain from signing new deals or supplying resources to North Korea.

“We thought there were possibilities the companies may suffer unexpected losses under the uncertain and murky circumstances” on the Korean Peninsula, Chun said.

Last month, North Korea confiscated or froze South Korean assets at a joint mountain resort on its east coast in anger over Seoul’s refusal to resume cross-border tours.

The move prompted South Korea to pledge retaliatory measures. Inter-Korean relations further eroded amid suspicions that an elusive North Korean submarine attacked a South Korean warship on March 26, killing 46 crew members.

Chun said the ministry warning did not apply to the more than 110 South Korean companies operating in the North Korean border town of Kaesong, where they employ about 42,000 North Korean workers to produce labor-intensive goods.

Inter-Korean consignment trade, in which vendors here supply raw materials to North Korea to be assembled into final products, amounted to US$254 million last year, Chun said. The vendors have favored factories in Pyongyang and the western port city of Nampo.

A multinational investigation is under way in South Korea to examine the suspected North Korean attack on the South Korean corvette Cheonan near the western inter-Korean border. North Korea denies any role.

Observers say the South Korean retaliatory measures are likely to come after investigators announce their results, which are expected as early as next week.

Also according to Yonhap:

North Korea’s moribund economy is projected to lose about US$370 million a year and about 80,000 jobs if inter-Korean trade is entirely suspended, a Seoul-based civic group said Sunday.

“If inter-Korean trade is fully halted, North Korea will lose $230 million a year in trade of agricultural goods,” the civic group said in a statement.

There would be also a loss of $49 million for the North if the Kaesong complex is shut down, the group said. Other losses came from already-suspended tourism between the two Koreas.

And according to the Choson Ilbo:

The government has worked out a package of sanctions to take if North Korea is found to have been behind the sinking of the Navy corvette Cheonan on March 26. It will also be kind of counterblow to the North’s seizure and freezing of South Korean property in the Mt. Kumgang resort area late last month.

A senior government official on Wednesday said the sanctions formulated at the initiative of the Unification Ministry include banning sand imports from the North which were worth some US$70 million to the North in 2008. The imports were banned after the North launched a long-range rocket in April last year but were resumed in October.

South Korean firms that have already paid can proceed but no fresh deals can be struck.

Another target may be fisheries products. Of the total W1.06 trillion (US$1=W1,142) worth of worth of imports from the North last year, fisheries products were second with W173 billion or 16.3 percent after textiles (W477 billion or 44.8 percent).

A ministry official said, “Fisheries products are sold by companies under the North Korean military or government that specialize in earning dollars, so a ban would deal a blow to the regime.” But the regime does not cream off much from textile exports because South Korean firms depend chiefly on the joint Korean Kaesong Industrial Complex. Most of the money funneled to the North is meant as wages for North Korean workers.

The downside is that hundreds of importers of North Korean fisheries products would suffer. The government is also worried about skyrocketing prices. North Korean merchant ships could lose their right to pass through the Jeju Strait, granted them under an inter-Korean maritime agreement concluded in 2004.

A ban would mean higher fuel costs as the ships would have to make a detour through the high seas, a government official said.

The ministry submitted a report on the sanctions package to Cheong Wa Dae right after the North announced last month it was seizing South Korean property in Mt. Kumgang, but the government at the last moment decided to put it off.

“It seems that the government will make an announcement about a response to the sinking of the Cheonan and the North’s seizure of property in Mt. Kumgang next week, when the findings of the Cheonan investigation are out,” the official said.

Read the full stories below:
S. Korea moves to curb trade with N. Korea
Yonhap
Sam Kim
5/13/2010

Seoul Prepares Sanctions Over Cheonan Sinking
Choson Ilbo
5/13/2010

N. Korea to suffer dearly from halt in inter-Korean trade: civic group
Yonhap
5/16/2010

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