North Korean Economy Watch

Writing for the Washington Post (December 30, 2007; Page A27), Francine Uenuma covers the DPRK defector-run radio stations in the South which broadcast for audiences in the North.

Who is in this game?
All told, Seoul has three privately run radio stations targeting the North: Open Radio for North Korea, Radio Free Chosun and Kim’s [Free North Korea Radio], the only one run by defectors, who are helped by a committed South Korean staff. Washington-based Radio Free Asia and Voice of America also broadcast to the North.

Tactics:
[FNK’s] broadcasts avoid overtly political messages in favor of cultural subjects. While for some North Koreans “politics is a matter of life and death,” others turn away from it, he noted. “We want to broaden our base as much as possible. For that purpose our radio programs are soft.”

Kim Yun-tae, director of Radio Free Chosun, said his station takes a similar approach. “At first we were doing more propaganda broadcasting, but we changed our minds,” he said. Added Kyounghee An, the station’s international manager, “We don’t think we can cause the collapse of the regime directly. . . . We think after listening, people can compare their real situation to Kim Jong Il’s propaganda and can change their minds, step by step.”

Radio Free Chosun broadcasts North Korean domestic news as well as stories of escapes, revisions to North Korean textbooks and dramas about Kim Jong Il.

The two stations run by South Koreans have defectors on staff who try to make the broadcasts palatable to a North Korean audience, smoothing out political and cultural differences in language, for instance.

Who is listening?
Determining how many people are listening to the stations’ broadcasts is impossible. Though jamming is an impediment, improved signals and electricity shortages that stop the jamming limit North Korea’s ability to block broadcasts completely.

Funding:
The South Korean government, eager to encourage good relations with the communist capital, Pyongyang, discontinued most of the programs its Korean Broadcasting System aimed at the North. But it has taken a hands-off approach to the private stations, broadcasters say, allowing them to operate but offering no financial support. All three services indirectly receive about $200,000 in U.S. government funds annually through the Washington-based National Endowment for Democracy.

Korea Times
Ryu Jin
12/28/3007

Hyundai Asan, the South Korean operator of various cross-border economic projects with North Korea such as Mt. Geumgang tourism program, said Friday that its operating profit this year is estimated to exceed 10 billion won (roughly $10.6 million).

“We saw a great upturn for our profits this year thanks to an increase in the number of tourists to Mt. Geumgang,’’ a ranking company official said. “According to our tentative calculation, the operating profit is expected to surpass 10 billion won.’’

Hyundai Asan, which began another tour program to North Korea’s border city of Gaeseong this year, expects that the company’s annual sales will reach 300 billion won this year, a notable increase from 220 billion won last year.

According to the firm, some 350,000 people crossed the border to the North to visit the mountain resort on the eastern part of the peninsula, up from last year’s 240,000, largely thanks to the launch of a new route up the inner part of the mountain in June.

Company officials anticipate that the tours will further prosper next year, as it plans to start a fresh tour program to Mt. Baekdu on the border between China and North Korea next May.

Founded in February 1992, Hyundai Asan has suffered losses for a long time. But its large-scale investment in the poverty-stricken Stalinist state is paying off at last. In 2005, the company went into the black with 5.7 billion won in operating profit for the first time.

Yonhap
12/27/2007

South Korea plans to develop two resource rich regions in North Korea that can benefit both countries and fuel cross-border economic cooperation, the government said Thursday.

The blueprint calls for more funds to be funneled into North Korea so prospective developers can conduct geological surveys and compile detailed data for future reference, the Ministry of Commerce, Industry and Energy said.

Resource-poor South Korea imports most raw materials to operate its heavy industry-centered economy. Lack of social infrastructure and mining knowhow have prevented North Korea from fully developing resources.

(more…)

Yonhap
Byun Duk-kun
12/19/2007

Lee Myung-bak, almost certain to be South Korea’s next president, will likely continue engaging North Korea through economic cooperation, but the extent should rely deeply on Pyongyang’s commitment to full denuclearization, unlike his predecessor who has often been under fire for granting unconditional aid to the North, analysts said Wednesday.

Closer ties with Washington will also be prioritized by the incoming administration of conservative Lee, who has criticized President Roh Moo-hyun for alienating the U.S. in dealing with the nuclear-armed communist North.

The entrepreneur-turned-politician says he can and will increase the communist nation’s per capita income to US$3,000 in 10 years, if Pyongyang completely abandons its nuclear ambitions.

“There will be no immediate changes to the country’s North Korea policy if the North continues to move down the path of denuclearization,” Kim Woo-sang, a political science professor at Seoul’s Yonsei University and a key advisor to the president-elect for security and foreign policy, said in an earlier interview with Yonhap News Agency.

Under a six-nation deal, North Korea has to disable its key nuclear facilities and disclose all its nuclear programs by the end of the year in return for economic and energy assistance and political benefits.

North Korea began disabling the Yongbyon complex early last month, but has yet to make a full declaration of its nuclear programs amid a five-year dispute between Pyongyang and Washington over the existence of a secret nuclear weapons program in the North.

The nuclear crisis erupted in late 2002 when the U.S. accused the North of running a uranium enrichment program. North Korea denies having any uranium program.

Seoul has regularly provided hundreds of thousands of tons of food and other humanitarian aid to the North since the historic inter-Korean summit between then President Kim Dae-jung and North Korean leader Kim Jong-il in 2000.

The Lee administration will continue to provide such assistance strictly based on humanitarian views, but economic cooperation between the divided Koreas will suffer significant reduction should the communist nation choose not to give up its nuclear weapons, Kim noted.

Further development or continuation of “ongoing economic cooperation projects, such as the Kaesong industrial complex, will be left to the market,” Kim said.

“The government will no longer try to encourage South Korean businesses to move into the industrial complex by providing subsidies and other benefits as it currently does, but will try to foster a better environment so the businesses and foreign investors will invest voluntarily,” he added.

At an October summit in Pyongyang, President Roh Moo-hyun and the North Korean leader agreed to launch various other reconciliatory projects, but Lee has said some of those projects will be subject to reconsideration.

Another visible change in policy towards North Korea will come in the way Seoul deals with the nuclear issue, the Yonsei professor said.

“Mr. Lee puts more weight on the six-nation denuclearization process than anything else, so the new administration will never try to take its own initiative or try to pressure China to convince North Korea to denuclearize,” he said.

While seeking more international cooperation in denuclearizing the North, Lee is expected to move closer to the United States, an ally Lee says has served as a capstone for Seoul’s security and economic development since the end of 1950-53 Korean War.

“The governments of Kim Dae-jung and Roh Moo-hyun neglected Korea’s relationship with the United States. China and Japan are important partners, but the next government will be moving in a different direction, focusing on Korea’s traditional relationship with Washington,” Lee had said in September.

The 65-year-old Lee has also noted his administration may try to push back the timing of taking back the wartime operational control of South Korean troops from the United States, which is currently scheduled to occur in 2012.

“As Mr. Lee has repeatedly said, there will be no renegotiation of the transfer of wartime operational control, but the scheduled timing of the transfer could become very sensitive depending on security conditions surrounding the Korean Peninsula in 2012,” said Kim.

Yonhap
12/16/2007

South and North Korea are still far apart over setting up joint fishing areas along their disputed western sea border but they have made some progress in establishing similar zones off their shared eastern sea border, a South Korean government report said Sunday.

In a statement posted on its Website, South Korea’s Unification Ministry said working officials of both Koreas made some meaningful headway on a proposal to open their shared eastern sea border to fishing boats from both sides.

“The South and the North agreed to actively cooperate to allow South Korean ships begin fishing at designated areas in the North Korean side of the East Sea within 2008,” the ministry said, outlining a six-point agreement reached at a two-day inter-Korean working meeting that ended at the North’s border city of Kaesong on Saturday.

The two Koreas have yet to agree on many specifics on the eastern sea border, including where to set up the proposed joint fishing areas, but they agreed on some details, including how South Korea should pay for its fish catch in the northern side of the border, it said.

North Korea, among other things, agreed to allow South Korean ships to pay in goods, not cash, the statement said.

The sides also agreed to hold a new round of working talks early next year to discuss Seoul’s provision of “fishing implements and gears that will constitute its fishing fees” and other related issues,” it said.

They have also agreed to begin construction on a joint fishery research and storage center in the North before the end of the year, for which a survey team of some 20 South Korean officials will travel to the North on Dec. 21-25, according to the agreement.

It’s unclear how such agreement on the eastern sea border would affect efforts by the two Koreas to ease tension along their acutely disputed western sea border, the site of two bloody naval clashes in 1999 and 2002.

During an October summit, South Korean President Roh Moo-hyun and North Korean leader Kim Jong-il agreed to turn the disputed western maritime border into a peace zone in which fishing boats of both sides would jointly operate.

High-level military officials of both sides met at the inter-Korean border village of Panmunjom last week to discuss the western sea border but failed to reach agreement.

North Korea insisted that the proposed joint fishing areas in the West Sea must be established south of the Northern Limit Line (NLL), an interim border unilaterally set by the American-led U.N. Command right after the 1953 end of the Korean War.

South Korea turned down the North’s demand, counterproposing that any joint fishing area in the area must conjoin waters on both side of the NLL.

Korea Times
Yoon Won-sup
12/9/2007

South Korea will provide 5,100 tons of steel plates to North Korea on Dec. 17 in a six-party deal that involves the provision of energy or alternatives to North Korea in exchange for the North’s disablement of its nuclear facilities by year’s-end, government officials said Sunday.

U.S. President George W. Bush sent a personal letter to North Korean leader Kim Jong-il last week urging him to keep his word on the disablement and declaration by Dec. 31.

The shipment is the first alternative to oil sent to the North under the agreement, although participants in the six-way talks have been taking turns to provide 50,000 tons of heavy fuel oil to the North every month recently.

Yonhap
12/8/2007

A ship carrying 1,400 tons of tangerines will leave Sunday for North Korea from a port on this southern island of South Korea to help promote peace and reconciliation between the two Korean states, island officials said Saturday.

They said that the tangerines grown by local farmers have been loaded onto a 3,500-ton ship, which will set sail for the North on Sunday afternoon. With crews including three South Koreans, the Panama-registered ship will arrive at Nampo, a western port town of North Korea, Tuesday, they said.

This is the first batch of 10,000 tons of tangerines that will be sent to the North this year. The officials said that the remainder will be delivered by the end of January next year at the latest.

They said that Jeju Island has sent 36,488 tons of tangerines and 17,100 tons of carrots to the North since 1998. It was humanitarian aid designed to promote peace and co-existence between the two Koreas, which remain technically at war after the 1950-53 Korean War ended in a truce instead of a peace treaty.

Yonhap
12/5/2007

A convoy of 10 South Korean buses drove into North Korea Wednesday across the heavily armed border to visit the city of Kaesong, launching a second tourism project between the two Koreas, said the South Korean company that developed the tour.

The one-day overland tour of Kaesong, a 90-minute drive from Seoul, offers ordinary South Koreans an unusual glimpse of North Korea, one of the world’s most isolated nations, said officials at Hyundai Asan, the company that offers the tour.

It is the second tourism project between the two Koreas by Hyundai Asan, a unit of the South Korean Hyundai conglomerate in charge of most business projects involving the North. Nine years ago it began a tour program to the North’s east coast mountain of Geumgang.

So far, the mountain resort has attracted some 1.5 million tourists, mostly South Koreans. North Korea receives US$50 for every $300 trip to the mountains.

Price of the one-day tour of Kaesong is 180,000 won ($195) per tourist with North Korea keeping $100 for each person, Hyundai Asan said.

Among the first batch of 360 tourists to Kaesong were 87-year-old Kim Yoon-kyung and four-year-old Shim Joo-eun, the South Korean company said.

They left Seoul at around 6:00 a.m. and are scheduled to return around 5:00 p.m., an official at Hyundai Asan said.

The tour of Kaesong offers visits to historical Buddhist temples, scenic waterfalls and other legacies of the city, which was the capital of the Koryo Dynasty that ruled the peninsula between A.D. 918 and 1392, the company said.

Kaesong is also the site of an inter-Korean industrial complex with some 26 South Korean companies manufacturing clothes and kitchenware there.

For years South Korea has been engaging in economic cooperation with North Korea as part of its effort to bridge the economic gap with its impoverished neighbor and prepare for reunification. South Korea’s economy is 35 times bigger than the North’s.

The effort is gaining momentum as North Korea has started disabling its nuclear weapons program and its relationship with the U.S. is improving.

Christopher Hill, the chief U.S. negotiator in international talks aimed at persuading North Korea to dismantle its nuclear program, is on a three-day visit to the North’s nuclear complex in Yongbyon, which produces weapons-grade plutonium, to check the progress of the disablement of the North’s nuclear facilities.

At the same time, the deputy prime ministers of the two Koreas are in a three-day meeting in Seoul to discuss a wide range of economic cooperation projects that South Korean President Roh Moo-hyun and North Korean leader Kim Jong-il agreed to during their summit in October.

According to Environmentalexpert.com:

The United Nations Environment Programme and the Republic of Korea today signed an agreement for establishing a Trust Fund that addresses key environmental issues in the Democratic People’s Republic of Korea (DPRK). The Republic of Korea will contribute US$4.4 million in total for this project. The first venture of its kind on the environment between the two Koreas, the Trust Fund will tackle forest depletion, declining water quality, air pollution, land degradation and biodiversity in DPR Korea. It will also support eco-housing initiatives as well as conservation and management of the Taedong watershed, environmental education, integrated environmental monitoring system, clean development mechanism and renewable energy technology.

‘This multilateral cooperation with UNEP is of great significance for both South and North Korea and a huge step forward in addressing pressing environmental issues in DPR Korea,’said LEE Kyoo-Yong, Ph.D., Minister of Environment of the Republic of Korea.

The past decade has seen declining forests in DPR Korea due to timber production, firewood consumption, wild fires and insect attacks associated with drought, population growth and conversion of land to agricultural production. Pollution of rivers and streams has become severe in recent years, particularly in the Taedong River, which flows through central Pyongyang. DPR Korea’s reliance on coal for power generation, industrial processes and domestic heating also led to serious air pollution, particularly in cities like Pyongyang and Hamhung.

To counter this, the country has encouraged community, youth and children’s groups to establish tree nurseries and to participate in campaigns such as the National Tree Planting Day on March 2 every year. The government is currently strengthening legal control on effluent from factories by applying the’Polluter Pays Principle’ and has initiated mass media campaigns to inform the public of the need for water conservation.
Environmental protection was also recognized as a priority issue and a prerequisite for sustainable development after a series of natural disasters in the mid-1990s led to a critical drop in yields of major crops. In 1998, DPR Korea revised its constitution and designated environmental protection as a priority over all productive practices and identified it as a prerequisite for sustainable development. National laws on forests, fisheries, water resources and marine pollution were also adopted.

‘This agreement will build on the momentum that DPR Korea has begun. It will also go a long way in strengthening the spirit of cooperation between the two countries,’ said UN Under-Secretary General and UNEP Executive Director Achim Steiner.

Since 2000, UNEP has been working in partnership with the National Coordinating Committee for Environment and UNDP to strengthen the capacity of the national government for environmental assessment and monitoring and implementation of Multilateral Environmental Agreements. In 2004, UNEP and DPR Korea signed a Framework Agreement for Cooperation in Environment. The first DPR Korea State of the Environment report was also launched that year.

Daily NK
Moon Sung Hwee
11/7/2007

A source inside North Korea reported on November 5th that the North Korean Ministry of Education lately directed every school to stress the importance of the Korean language education and to encourage the use of the mother tongue.

In a phone interview with DailyNK, the source said, “At workplace, there are those who read out to the workers a handbook titled ‘Let’s maintain our superior morals and actively promote the use of our mother tongue!’”

In the March 2007 edition of “Learning Culture & Language,” Jong Soon Ki, the most well-known linguist in North Korea and a professor at the Institute of Linguistics of Social Science Center, urged the public to stop admiring English and Chinese language, saying, “The difference of our mother tongue between North and South Korea has been getting larger since the division of Korean.”

The source said that the North Korean authorities started to place high importance on the native tongue in an attempt to stop the surge in the use of the Chinese and foreign languages which have been spread to the country through the circulation of South Korean soap operas since 2000.

After the food crisis in the mid-1990s, the number of defectors, border traders, and Chinese businessmen investing in North Korea have increased, which helped the Chinese culture spread into the country. Many young North Korean began to display interest in Chinese movies, Chinese products and the Chinese language. It became popular among them to read out the brand names of Chinese products in Chinese.

In North Korea, people use the Chinese words “yaoyunji (搖運機)” or “yaoyun (搖運)” for a remote control. They do not use its Korean name “wonkyuk-jojonggi,” translated and adopted by the North Korean authorities.

As for a cell phone, people use its Chinese name “Dakeda (大可大)” or “Souji (手機)” rather than its North Korean name “Sonjeonhwa (literally meaning a handphone).” Blue jeans are called “Niuzaiku,” in the border areas, a refrigerator is called its Chinese name “Bingxiang (冰箱)” and VCD “Woicidie.” Indeed, many products or medical supplies are called their Chinese names such as “Kouhong” for a lipstick.

The use of foreign languages has become more prevalent across the country especially since 2003 when the frenzy over Chinese culture was replaced by its South Korean counterpart. It is particularly noticeable that North Korean people no longer call South Korea “South Chosun” as they used to but call it “Hankuk (meaning the Republic of Korea).” In these days, the young people in Pyongyang look down on those who still use the old name, “South Chosun.”

The source said, “South Korean culture is taking over the Chinese one, and the demand for the South Korean films and products is increasing. People learn new words from South Korean soap operas and these words are becoming popular.”
The source added, “I guess this is because South Korea is better off than China, and people have a sense of homogeneity towards South Korean people.”

“Nowadays, when people go to restaurants, they do not use the words “siksa annae” or “siksa pyo,” a Korean name for a menu. Instead, many people just call it “menu” as it is pronounced in English and widely called so in South Korea,” said the source.

The source continued, “We can see how rapidly the South Korean culture has spread into the country by the fact that many people no longer use the Chinese name for a cell phone, Shouji (手機) and instead use the name ‘Hyudaephone’ as it is called in South Korea.” The source said, “At Jangmadang (markets), people casually say the names of South Korean products as they are such as “Cuckoo (rice cooker)” or “Color TV.”

When asked about the popular words adopted from South Korean culture, he listed following words: “diet,” “wellbeing,” “music video,” “sausage,” “single,” “wife,” “dress,” “pop song,” and “fast food.” (See that all of them are English words. In South Korea, people use many English words like the one listed here in everyday life)

32-year old Kim Kyung Wuk (pseudonym), who defected from Kyungsung county of North Hamkyung Province and recently came to South, also confirmed this phenomenon.

Kim said, “In the past when people feel distressed, they expressed their feeling using the word, ‘uljukhada’. But now many young people use the words ‘jajeong’ or ‘stress’ as South Korean people do.” Kim added, “The North Korean people did not know the word ‘stress’ when they first heard it from South Korean movies they watched only three years ago. But now even the old people know the new word.”

Many defectors say that many new words adopted from South Korean TV dramas are being spread into the country especially among the young people such as “miss-Korea (a beautiful woman),” “show (fake),” “ssonda (I will treat you),” “hwakeun (passionate),” “single” and “wife.”

Kim said, “Those who watch South Korean dramas and listen to its music take a great interest in everyday language of the South, and try to adopt it as long as they could escape the state’s regulation.”

Defectors said that the current phenomenon illustrates that North Korean people admire the South Korea and greatly hope for reforms and open-door policy.

Lee Chul Min, the operating manager at the Association of the North Korean defectors said, “For those who live in a closed society, exposure to foreign cultures can be a really fresh experience. It is natural of them to admire more advanced societies and cultures.” Lee added, “The current frenzy over South Korean culture will help bring a change into North Korea and overcome the differences between two Koreas.”