North Korean Economy Watch

UPDATE 75 (2011-12-5): The ROK will donate US$5.65 million to N. Korea through the UN. According to Yonhap:

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

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

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

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

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

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

Despite the South’s softer stance, North Korea recently threatened to turn Seoul’s presidential office into “a sea of fire” in response to South Korea’s military maneuvers near the tense western sea border.

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

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

…

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

UPDATE 74 (2011-12-2): The Choson Ilbo reports that the DPRK’s food prices are rising after the 2011 fall harvest, however, the price increase is not due to a shortage of output, but rather political directives. According to the article:

The price of rice in North Korea is skyrocketing, contrary to received wisdom that it drops after the harvest season. According to a source on North Korea on Wednesday, the rice price has risen from 2,400 won a kg in early October to 5,000 won in late November.

North Korean workers earn only 3,000-4,000 won per month.

This unusual hike in rice price seems to be related to preparation of next year’s political propaganda projects.

A South Korean government official said, “It seems the North Korean government is not releasing rice harvested this year in order to save it up” for celebrations of regime founder Kim Il-sung’s centenary next year, when the North has vowed to become “a powerful and prosperous nation.”

UPDATE 73 (2011-11-24): According to the Daily NK, DPRK television is calling on people to conserve food:

With barely a month left until 2012, the year in which people were promised a radical lifestyle transformation to coincide with the North Korea’s rebirth as a ‘strong and prosperous nation’, programs calling upon people to conserve food are now being broadcast by Chosun Central TV and the fixed-line cable broadcaster ‘3rd Broadcast’.

Chosun Central TV is broadcasting the programs as part of ‘Socio-Culture and Lifestyle Time’, which begins directly after the news on Thursdays at 8:40pm. The majority of the content is apparently now about saving food.

A Yangkang Province source told The Daily NK on Wednesday, “Recently the head lecturer from Jang Cheol Gu Pyongyang Commercial University, Dr. Seo Young Il, has been appearing on the program both on television and the cable broadcasting system, talking about saving food.”

In one such program, Professor Seo apparently noted, “In these days of the military-first era there is a new culture blossoming, one which calls for a varied diet,” before encouraging citizens to eat potatoes and rice, wild vegetables and rice and kimchi and rice rather than white rice on its own, and then adding that bread and wheat flour noodles are better than rice for lunch and dinner.

It is understood that older programs with titles such as ‘A Balanced Diet is Excellent Preparation for Saving Food’ and ‘Cereals with Rice: Good for Your Health’ are also being rebroadcast, while watchers are being informed that thinking meat is required for a good diet is ‘incorrect’.

Whenever North Korea is on high alert or there is a directive to be handed down from Kim Jong Il, both of Chosun Central TV and the 3rd Broadcast are used to communicate with the public. For this reason, some North Korea watchers believe the recent food-saving campaign may reflect a particularly weak food situation in the country going into the winter.

According to the source, one recent program showed a cookery competition involving members of the Union of Democratic Women from Pyongyang’s Moranbong District. During which, one woman was filmed extolling the virtues of potato soup, saying “If we follow the words of The General and try eating potatoes as a staple food, there will be no problem.”

Read all previous posts on the DPRK’s food situation this year blow:

(more…)

Pictured Above (Google Earth): Eermel Factory in Ulan Bator

Simon Ostrovsky, who produced this BBC piece on North Korean loggers in eastern Siberia, has produced a piece on North Korean workers in the Mongolian capital, Ulan Bator. I have posted his article in The Independent as well as a few related pieces and additional information below.

According to his article in The Independent:

Sitting astride rows of buzzing looms and distinguishable from their colleagues by the white make-up heavily applied to their faces, a few dozen North Korean women in a run-down Mongolian clothing factory are busily knitting garments to please minders from their Communist state.

They are part of a North Korean labour force tens-of-thousands strong, put in place across Asia to help the Stalinist regime meet its financial targets. And British consumers are unwittingly filling the dictatorship’s pockets through these workers, an investigation in Mongolia by The Independent and the investigative journalism project WorldView has found.

Sent in their hundreds, under an agreement between Mongolia and the Democratic People’s Republic of Korea (DPRK), the North Korean workers take jobs on construction sites and in factories across this Central Asian state, where they are closely monitored by overseers from their homeland. Some of them were found to be producing goods for popular UK clothing brands such as Edinburgh Woollen Mill (EWM).

“They’re hard workers, they don’t complain and they get stuck in, they’re quite skilled,” said David Woods, a British textiles professional brought on as a specialist at the Eermel clothing factory in the Mongolian capital, Ulan Bator. North Korea has been able to transplant elements of its highly centralised state to Mongolia, where labourers keep to a tight schedule dictated by their embassy for the duration of their three-year contracts. They also have to seek permission to speak to outsiders, unlike their Mongolian co-workers.

Mr Woods showed a reporter a James Pringle-brand cashmere sweater made for EWM with a £140 price-tag already affixed, ahead of shipment to the UK, as he gave a tour of the factory. He described how its 80 female North Korean employees were housed and fed on site under a scheme managed by North Korea’s embassy, earning up to £200 per month.

Another Eermel employee told The Independent that the women’s labour fed the coffers of the North Korean regime, echoing the North Korean practice across Asia where tens of thousands of North Koreans are estimated to be employed on behalf of their government. “We are paying to Korean workers like Mongolians, the same salary,” said Bayar, Eermel’s director for exports, who like many Mongolians uses only one name. “But… we are transferring the money to the account of the [North Korean] embassy. How they split the salary, we don’t know.”

It’s a surprising move for a regime that regularly tries to keep its citizens in the dark about world events and strictly controls access to information at home. The fact that North Korea has allowed so many of its citizens to leave and glimpse the outside world reflects the severe economic situation the country has faced since the collapse of its one-time sponsor, the Soviet Union, and, more recently, international sanctions over its nuclear-weapons programme. It’s also an example of how Pyongyang has been able to adapt and continue profiting from a globalised economy while keeping most of its population at arm’s length.

In Mongolia, the practice goes back to 2004, according to leaked US embassy cables released by WikiLeaks in August. The cables, penned in 2006, describe how a representative of North Korea, who was “extremely professional in both manner and appearance”, approached a Canadian-owned gold mine to offer workers for $1.50 (90p) per day.

Another 2006 cable says: “The working and living conditions of these labourers raise the concern that they are subject to coercion, and are not free to leave their employment… the DPRK workers are monitored closely by ‘minders’ from their government, and many are believed to be subject to DPRK government pressure because of family members left behind in North Korea. The workers reportedly do not routinely receive direct and full salary.”

North Korea watchers warned that the work-abroad programmes should not be seen as a step by Pyongyang towards more openness. “As far as the regime is concerned, sending groups of people to foreign countries where they don’t speak the language and can be sequestered in barracks or factory dorms is a much safer option than granting to foreign investors in North Korea the kind of freedom and mobility they demand,” Brian Myers, a Seoul-based North Korea analyst, said.

The scheme has been hugely successful with businesses in Mongolia, which are attracted by the North Koreans’ rock-bottom labour costs and an unparalleled work ethic. One of the few countries with warm ties to the Stalinist state, Mongolia has increased its quota of North Koreans allowed to work in the country from 2,200 to 3,000 in 2011, according to the Ministry of Labour and Social Welfare.

The workers are even more popular in Russia, where 21,000 laboured in the first quarter of 2010 alone, according to the Russian migration agency. And many more are believed to be working in China, where the statistics are not made public.

Part of that army of workers are the seamstresses at Eermel, a hulking Soviet-era cashmere factory in the Mongolian capital that produces sweaters and other cashmere garments for the EWM retail chain and a number of lesser-known UK labels including Hush, Moray and Brodie. Clothing racks in Germany, Italy, Australia, Japan and beyond are also stocked with Eermel garments, according to Mr Woods. That means international isolation has not stopped North Korea from tapping global consumer markets.

North Korea’s culture of secrecy makes it difficult to get accurate data on the workers’ contract terms. The private interests using its labour force seem to understand that continued co-operation depends on maintaining the code of silence. After a short phone call to the North Korean embassy, Eermel factory officials refused to allow The Independent to interview any of its North Korean employees.

And at the Mongolian foreign ministry, officials were tight-lipped about how much the North Koreans’ labour is worth to Pyongyang in cash transfers, preferring to focus on benefits to the individual labourers. “For the families of the individuals who work [here] that could be helpful,” State Secretary Tsogtbaatar Damdin said. But when asked if he knew what portion of their salaries the North Korean labourers were allowed to keep, he said: “If they owe some commitments to their county we would rather not intervene in that area.”

The deal could be worth over £7m annually to North Korea if the Eermel factory workers’ wages are representative of those across Mongolia. It’s no small sum when compared to North Korea’s gross national product, estimated by the CIA to equal only $40bn in 2008. EWM, for its part, confirmed that it was supplied by the Eermel factory in Mongolia and that there were North Koreans among the workforce there, but said it was told by the factory that the North Koreans’ wages were paid directly to the workers, not the North Korean government.

The Scottish company quoted Eermel as telling it: “We do not pay any commission to the North Korean government, any North Korean Agency or anyone else. We pay the workers directly.” That stands in stark contrast to what The Independent was told by factory officials in Mongolia. But even though their contract terms are secret and are likely in violation of a raft of international agreements on workers’ rights, the practice has its supporters among North Korea watchers. They believe North Koreans working abroad will share their experiences of the outside world when they return home, perhaps in the long run leading to social and political change within the country.

“It’s every North Korean worker’s dream to be selected [to work abroad],” Andrei Lankov, a professor of Korean studies at Kookmin University in Seoul, said. “They cannot make even remotely as much inside North Korea. And on top of that, they are coming back and they bring knowledge about the outside world. They are closely supervised and they have to be very cautious, because their families back in North Korea are essentially hostages, but… this knowledge in the long run is going to change North Korean society.”

There is evidence that the North Korean workers will go to extreme lengths to avoid going home and live in perpetual fear that their minders will make them do so. “I met one man who broke his arm and was hiding it from his superiors for over a month because he was afraid he’d get sent back to North Korea if they found out about it,” said Koh Kwang Sub, a member of the South Korean business community in Ulan Bator. Mr Koh, who owns a local pharmacy, said he was able to meet workers and hand out medical supplies every few weeks when their managers were away. “It would be nice if they could work here and go back home safely, but they have no medical help and sustain a lot of work-related injuries,” he said.

The fully stocked store shelves and proliferation of mobile phones here must come as a surprise to a first-time visitor brought up to think North Korea is the world’s most advanced nation. Has the realisation led many of the workers to try defecting? “I really can’t talk about that,” said Ha Kyeong Yun, a South Korean entrepreneur who employs 30 North Korean army veterans at his farm in the northern Mongolian town of Sharin Gyol. But the answer is probably that very few, if any, have. “Their hierarchy is very rigid. They’re from the military and they maintain their rank relations.”

It’s also no coincidence that all of the male North Korean workers are at least 40-years old. All have families back home who would pay the price for what amounts to a crime against the state under the country’s system of hereditary discipline.

All of this makes the North Koreans very dedicated workers. At Eermel, Mr Woods said he was very proud of the company’s hard-won relationship with EWM and praised the North Korean staff. “Why they come over from North Korea to Mongolia I’m not entirely certain,” he said. “They work hard and we’re happy to have them here.”

A global market

Mongolia The practice of using North Korean workers goes back to at least 2004. A new deal was signed in 2008 that allowed for more than 5,000 workers to come to Mongolia until 2013. There are currently around 3,000 in the country.

Russia There are some 21,000 North Korean workers in the far east of the country, where they work in logging camps. They reportedly have just two rest days a year.

China No reliable statistics exist, but there are thought to be thousands of North Koreans working in China. The numbers in Dandong, a city close to the border, is said to have soared in recent years.

Here is a related story in the Daily NK.

Here is some information on Eermel (Evseg):

Founded in 1982 and privatized in 1994, Eermel (Evseg TM) is on its way to becoming a strong competitor in the world market of quality cashmere and camel wool products. Today, it is the second largest manufacturer of Cashmire in Mongolia, after Gobi Cashmere Industry.

Presently, Eermel has over 600 workers and has capacity of washing 500.0 tons and de-hairing 90.0 tons annually, making it highly efficient in key segments of Cashmire production. The company now has four production lines of textile, knitting, sewing and quilting, and produces more than 380 different types of end-products available for customers to purchase at prestige stores throughout Mongolia. The company exports dehaired cashmere to Switzerland, China, United Kingdom, Hong Kong, Italy, Japan and the USA, and exports knitted yarns to Japan, Italy, China, United Kingdom and Mexico. Russia continues to be the largest recipient of Eermel Cashmire exports.

In addition to Cashmire, Eermel is Mongolian trading company that trades in coal, cobalt and copper and is also an importer of consumer goods to Mongolia. 50 percent of Eermel’s shares are owned by the everyday workers of the plant.

The company has been selling public shares since November 28, 1992 with the initial price of 100 MNT per 1 unit of stock.

According to KBS:

The British government is planning to expand its English education program in North Korea as the U.K. considers it having positive effects on bilateral relations.

Voice of America reported that U.K.’s Foreign Office Minister Lord Howell said Wednesday that the English programs will be expanded from three universities to six universities by the end of the year.

The minister also said the British government signed a memorandum of understanding with a North Korean educational committee last month on a new plan to operate English teaching programs for the next three years.

Read the full story here:
UK to Expand English Program in NK
KBS
2011-7-19

2012 DPRK tour dates: Koryo has posted travel dates for 2012, including a tour for Kim Il-sung’s 100th birthday.  Check the dates and itineraries here.

2011 Ultimate Frisbee tourney: Pyongyang will be home to its first ever Ultimate Frisbee tourney this summer.  August 27th.  Sign up now.

Ultimate Frisbee in North Korea. The most interesting sports thing you’ve ever done. Unless you’re Usain Bolt, who isn’t responding to my friend request.

The cost will be 890 Euros. This includes flights from and back to Beijing, tourist stuff Saturday and Monday, pizza, all other food that isn’t pizza, hotel, fields, entertainment. Visa fee (not optiona, 50 Euro) and ticket to the mass games (optional, but would be weird not to go: 80, 100, 150 or 300 Euro options) will be extra. North Korean microbrewed beer will be extra, but cheap (and good).

The itinerary includes two full days and three nights of touring. The tournament is a one day hat. We leave Beijing early Saturday and return early Tuesday. Participants should be in Beijing by Friday afternoon in order to collect visas get final info at Koryo Tours.
All nationalities except South Korean can participate.

Write an email to pyongyanghat@gmail.com if interested in attending and want more info.

If you know you’re in, write simon@koryogroup.com and ask for the necessary forms to get it going.

It ain’t cheap, but it will be amazing. We’re looking to get deposits by June 30th.

Tentative Itinerary for Ultimate Frisbee Tour
Thurs 25th Aug: Pickup in Beijing -Introduction to “Extreme Pollution Ultimate”, dinner at Dong Bei Ren Restaurant (Not included in tour fee)

Fri 26th Aug: Briefing/Collect Visas at Koryo Tours office in Beijing

Sat 27th Aug: N/A Arrival by Air Koryo flight from Beijing at 14:20, Fountain Park, Mansudae Grand Monument, Kim Il Sung Square, ARIRANG MASS GAMES

Sun 28th Aug: Taesongsan Park for Frisbee Tournament, picnic lunch Frisbee tournament, evening trip to Kaeson Youth funfair, dinner at Korean restaurant

Mon 29th Aug: Juche Tower, Mansudae Art Studio, Pyongyang Metro (extended ride on the subway), Arch of Triumph, USS Pueblo, Pizza Restaurant Lunch, FRISBEE CLINIC AT LOCAL MIDDLE SCHOOL. Paradise Micro-Brewery, Foreign Languages Bookshop, Farewell dinner at Duck BBQ restaurant, evening Karaoke option.

Tues 30th Aug: 9:00 Air Koryo Flight to Beijing. End of tour.

Previously, Koryo Tours hosted the first cricket match (2008) and first golf tournament (2005) in the DPRK.

Middlesbrough Women’s Football Team booklet: It has been posted to the Koryo Tours web page. You can download it here (PDF).  Learn more about this effort here and here.

By Michael Rank

The remains of a British pilot who was killed in the Korean war have been handed over to British officials at Panmunjom, after being buried for several years near Pyongyang.

The North Korean news agency KCNA said the body of Desmond Hinton had been disinterred at the request of his family, who in March “asked for bringing his remains back home.”

“Authorized by the DPRK government, the Panmunjom Mission of the Korean People’s Army conducted a series of survey which led to accurately unearthing and ascertaining the remains of Hinton and relics left by him and buried them on the spot with care as requested by his bereaved family and provided the family members with facility so that they might visit his grave,” it added.

Several years ago Desmond Hinton’s brother David, relying on reports of how Desmond was shot down over Pyongyang on January 2, 1952, managed to track down his remains and, with the help of the North Korean army and the British embassy, arranged for them to be buried near where his aircraft came down. He visited the site in 2004 and told me he was content for his brother’s remains to lie buried in North Korea.  I reported on this remarkable story in some detail here.

But the family have apparently had a change of heart recently about leaving Desmond’s remains in North Korea, although none of them was immediately available for comment.

Although Desmond was a flight lieutenant in the Royal Air Force he was one of 41 RAF pilots flying for the United States Air Force when he died.

A British Ministry of Defence spokesman said it could not be confirmed that the remains were those of Desmond Hinton, and that they would be subject to DNA testing.

“We can confirm that the Democratic People’s Republic of Korea has passed remains to the British authorities. We are unable to confirm the nationality or identity of the remains at this time. A detailed forensic analysis will now take place. We are very pleased with the cooperation we have received from the authorities of the Democratic People’s Republic of Korea,” he said in a statement.

The spokesman said that as far as he was aware no family members were present at the handing over of the remains at Panmunjom. He added that it would be usual for the remains to be buried in the United Nations Memorial Cemetery in Busan, South Korea, but it was up to the family to make the final decision once identity had been confirmed. Some 885 British troops lie buried at Busan, more than any other nation.

KCNA said this was the second set of British remains to be sent across the DMZ. It said that “The remains of J. Edmuns, a second class private of the British Army, were handed to the British side on October 30, 1995″ but gave no details. The British Defence Ministry spokesman said he also had no details of this, although a British diplomat said he was aware of such an event in the 1990s.

KCNA said in an unusually conciliatory report, “Expressing deep gratitude to the government of the DPRK for having made every sincere effort for this humanitarian undertaking, the British side predicted that such cooperation would mark a good occasion in developing the relations between the two countries.

“The Panmunjom Mission of the KPA clarified the stand to render positive cooperation in the future, too in unearthing and sending back remains, the humanitarian work for healing the wounds caused by the past Korean War. ”

Additional information:
This story was covered in The Guardian, Daily Mail, and Yonhap.

Mr. Hinton’s remains were buried in Kuso-ri near the Sunan Airport. You can see a satellite image of the village here: 39°14’26.55″N, 125°42’58.17″E

I still have not had time to pay much attention to this story, but here is the coverage by the major British media outlets:

The Economist:

SVEN GORAN ERIKSSON, a Swedish football manager of some repute, is a man known as much for his wide travels as he is for his colourful love life. After scoring great success in Italy, he managed the national teams of England, Mexico, and the Côte d’Ivoire. Even seasoned Sven-watchers however were surprised when he rocked up in North Korea in 2009.

This week it was reported that he had been there at the behest of one Russell King, a convicted conman, who had managed to convince a London financial institution, the government of North Korea, and Mr Eriksson himself that he was managing billions of dollars on behalf of the Bahraini royal family.

A report on the BBC’s investigative news programme “Panorama” (or, if you’re outside the viewing area) has it that Mr King, who is now believed to be on the lam in Bahrain, first convinced directors of small investment bank First London Plc to hand over 49% of the company to him, in return for his apparently colossal business. This done, he used First London to finance an investment in Notts County, a Midlands football club with a proud history, now plying its trade in the lower divisions.

Mr Eriksson, drawn in by the promise of shares in Swiss Commodity Holdings (SCH), a vehicle of Mr King’s, was duly installed as football director at County. He was joined there for a time by another fellow dupe, Sol Campbell, an ex-Arsenal and England star. Messrs King and Eriksson ventured to Pyongyang on SCH business, where they are reported to have made a deal with officials in the North Korean government to grant them exclusive rights to the impoverished nation’s gold mines. “I was in the palace and they were handing over to the North Korean government so-called shares”, Mr Eriksson told BBC’s investigative news programme “Panorama”. “They used my name”, he laments; there was even talk of him managing the North Korean football team.

Those who follow developments in North Korea tend to prefer casting Kim Jong Il as an evil genius—crazy like a fox—rather than as merely crazy. While there can be no doubting that he has it in him to run circles around America and China, the Dear Leader appears to be no match for a silver-tongued conman of Russell King’s stature.

The Guardian:

The Serious Fraud Office is looking into an elaborate scam that took in the former England football manager Sven Göran-Eriksson, former spymaster Sir John Walker and the North Korean government.

Investigators are also looking at how the same fraudster took control of almost half of a London investment bank without paying for the shares.

First London plc – the investment bank whose shares were listed on the Plus stock exchange and whose advisers included Tim Yeo MP and Air Marshal Sir John Walker, a former head of defence intelligence – subsequently went into administration with debts of £8.7m.

BBC Panorama has discovered that Russell King, a convicted fraudster, took control of 49% of First London by claiming he was managing billions of dollars for the Bahraini royal family. The case has been referred to the SFO – which only looks at the country’s highest value frauds – by the Financial Services Authority.

An FSA spokesman said: “In this case the acquisition of control occurred without the FSA having been given the prior notice which the law requires it to be given. Had it been given proper notice it would have been in a position to consider whether it should use its powers to object to and prohibit the change of control. The FSA subsequently identified a number of concerns and pursued a series of leads into what was an extremely complex corporate structure. It would be inappropriate for us to comment further at this time due to confidentiality issues.”

The Panorama programme will show how King then used the name of the bank and its high-profile advisers to give credibility to deals.

They included an attempt to obtain funding for a new company that claimed to have assets worth $2tn and the short-lived takeover of the Football League’s oldest club. In 2009, King was behind a controversial takeover of Notts County which promised to bring millions of pounds of investment from the Middle East. The investment, which appeared to have been guaranteed by First London, never materialised and the club was left £7m in the red – but not before Eriksson agreed to join County as director of football. Nottingham police are investigating.

The coach’s contract included a clause entitling him to €11m of shares in a little-known company called Swiss Commodity Holding, which had been set up a few months earlier and was claiming to have assets worth $2tn from the exclusive rights to North Korea’s gold, coal and iron ore.

King persuaded the former England manager to visit the rogue state as part of an SCH delegation and Eriksson was present at a meeting with the North Korean leadership. “I was in the palace and they were handing over to the North Korean government so-called shares,” he tells the programme. “I asked them how much and what they told me was not millions, it was billions of dollars. They used my name. Of course they did. At the end it became a big, big mistake.”

Panorama’s investigation shows that King was secretly running SCH, which was considering a public listing.

Documents detailing SCH’s claims were prepared by First London plc. The investment bank also sent Walker, who sat on the bank’s advisory board, to check out King and his associates. The air marshal tells the programme: “What do I think of Russell King? Not a lot. He was good at chat, but that was his business. He was a con man. I was taken the same way Sven was taken. They just wanted names.”

King had gained control over First London plc shares after convincing the bank that he was managing billions of dollars of Bahraini cash by introducing some of its executives to senior members of the royal family. But Fawaz Al Khalifa, president of the Bahraini Information Affairs Authority, says King was lying about his royal connections: “He might have met members of the family here or there, but we have no financial connection to him or his company.”

King, who was jailed for insurance fraud in 1991, denies running Notts County, SCH or First London plc.

However, the programme has obtained dozens of emails and testimonies showing he was secretly pulling the strings, including some where he refers to himself as Lord Voldemort, the character from the Harry Potter books who can never be named.

First London plc’s parent company, First London Group plc, is still in business. In a statement, its lawyers said the failure to notify the FSA about the change in ownership was a mistake: “This was simply an error and not done for any ulterior or questionable motive. As far as our client is aware the FSA were satisfied that the information provided was in compliance with all legal and regulatory requirements. Our client is unaware of any investigation by the FSA or SFO into its activities so far as they relate to or involve Russell King.”

BBC:

The Serious Fraud Office is examining a con that took in Sven-Goran Eriksson and the North Korean government, BBC Panorama has learned.

Investigators are also looking at how the same conman stole a football club and broke a bank.

Convicted fraudster Russell King persuaded the former England manager to join Notts County FC as director of football and to visit North Korea.

Mr King denies any fraud and said he was just a consultant on the deals.

Mr Eriksson was appointed at Notts County in 2009 following a takeover that promised to bring millions of pounds of Middle Eastern investment.

“For me as a football man it was fantastic, building a club from the bottom of League Two and having the funding to do it, to be a Premier League club. It’s like a dream, so I signed. Big mistake,” he said of the deal.

Milk bill
The promised money never arrived and the club was left £7m in debt. Mr Eriksson says there were early signs that all was not as it seemed.

“I started to have doubts when they came and told me the milk bill has not been paid,” he said.

Mr King claimed his Swiss-based mining company had assets worth almost $2 trillion because it had the rights to North Korea’s gold, coal and iron ore.

He told Mr Eriksson the Notts County cash would come from that mining deal. He then persuaded him to join a delegation visiting Pyongyang.

“I was in the palace and they were handing over to the North Korean government so-called shares,” Mr Eriksson told Panorama.

“I asked them how much that was and what they told me was not millions, it was billions of dollars. They used my name. Of course they did. At the end it became a big, big mistake.”

‘Con-man’
Russell King’s business deals had credibility because they appeared to have the backing of First London plc, an investment bank with advisers including Conservative MP Tim Yeo and Air Marshal Sir John Walker, a former British spymaster.

The bank sent Sir John, a former head of defence intelligence, to check out Mr King and the Korean deal, but he was also taken in.

Sir John said of the deal: “What do I think of Russell King? Not a lot. He was good at chat, but that was his business. He was a con man. I was taken the same way Sven was taken. They just wanted names.”

Mr King also managed to get control of almost half of First London plc without paying a penny for the shares, after he convinced its bankers he was managing billions of dollars for the Bahraini royal family.

But Fawaz Al Khalifa, President of the Bahraini Information Affairs Authority, says that Mr King was lying about his royal connections: “He might have met members of the family here or there, but we have no financial connection to him or his company.”

First London PLC went into administration last year with debts of £8.7m and the Financial Services Authority (FSA) has been examining the deal that gave King control of 49% of its shares. The FSA has now passed its finding to the Serious Fraud Office (SFO).

“In this case the acquisition of control occurred without the FSA having been given the prior notice which the law requires it to be given,” said an FSA spokesman.

First London plc’s parent company, First London Group plc, is still in business. In a statement, its lawyers said the failure to notify the FSA about the change in ownership was a mistake that had been rectified:

“This was simply an error and not done for any ulterior or questionable motive. As far as our client is aware the FSA were satisfied that the information provided was in compliance with all legal and regulatory requirements.

“Our client is unaware of any investigation by the FSA or SFO.”

Lord Voldemort
Mr King, who was jailed for insurance fraud in 1991, denies any involvement in the running of Notts County or First London plc.

But Panorama has obtained dozens of emails and numerous testimonies that show he was secretly pulling the strings at Notts County.

King even referred to himself as Lord Voldemort, the character from the Harry Potter books who can never be named.

The club had been owned by a supporters’ trust, but Mr King persuaded the fans to sell it for just £1 after they met one of his supposedly wealthy benefactors in Bahrain.

Abid Hyat Khan was introduced as a Middle Eastern prince, but Panorama has discovered he is actually on the run from British police.

He absconded from the UK in 2008, when he was due to stand trial for allegedly stealing almost £1m. Khan denies posing as a prince.

The BBC’s Panorama show can be found here.

According to TheyWorkforYou.com:

January 11, 2011

Lord Moonie (Labour)
To ask Her Majesty’s Government how many North Korean diplomats are stationed in London and how many British diplomats are in North Korea; and what representations they have made to those diplomats in London about concerns over recent cross-border incidents on the Korean peninsula.

Lord Howell of Guildford (Minister of State, Foreign and Commonwealth Office; Conservative)
There are five diplomats from North Korea based in London. The Foreign and Commonwealth Office employs approximately 10 staff in Pyongyang. This includes UK-based civil servants and locally engaged staff. For operational and security reasons, we cannot provide a more detailed breakdown. Senior officials in the UK, and our ambassador to Pyongyang, expressed to the North Korean authorities grave concern about the recent cross-border incidents, and urged restraint.

According to the New York Times:

But on Sunday, The Associated Press reported, North Korean television audiences were given a rare break from this routine when the British comedy “Bend It Like Beckham” was shown there. The film, which stars Parminder Nagra as a young woman from a Sikh family with dreams of soccer stardom; Keira Knightley as her best friend; and Jonathan Rhys Meyers as the dreamy coach they both have eyes on, was shown over the weekend by the arrangement of the British Embassy. According to the BBC, a message was shown during the film saying that the broadcast was done to mark the 10th anniversary of diplomatic ties between North Korea and Britain.

In a message on his Twitter account, Martin Uden, the British ambassador to South Korea, wrote: “Happy Christmas in Pyongyang. On 26/12 Bend it like Beckham was 1st ever western-made film to air on TV.” The A.P. said the North Korean broadcast of the two-hour movie was only an hour long, so please, no spoilers about the film’s subplots about religion and sexuality, or which of the women Mr. Rhys Meyer’s character ultimately chooses.

UPDATE from a Koryo Tours newsletter:

In 2004 Koryo Tours together with Ealing Studios and the British Embassy screened the film Bend it Like Beckham at the Pyongyang International Film Festival, it was seen by over 12,000 Pyongyang citizens and was the film they raved about…during the festival we were inudndated with requests for tickets from the Yanggakdo hotel staff. During the film the coach tells the heroine of the film to make a decision about her life…and this was translated as her following the Juche way!

In 2009 Koryo Tours was asked by the British Embassy in Pyongyang to assist with ideas for marking 10 years of diplomatic relations- and football was what we came up with. In October 2010 we took Middlesbrough Women’s football team to play two local Korean sides (to a total of 14,000 fans and nationwide tv broadcast) and on Boxing Day the film Bend It Like Beckham was broadcast in Pyongyang- and that is a massive ‘first’ with everyone in Pyongyang talking about it!

Our colleague Hannah Barraclough is working on bringing over the April 25th women’s team in 2012 to play in Europe. If you want any details or have any ideas on how to help with this project please let us know.

Here is a link to the ambassador’s Twitter feed.

To be honest, I am not sure about the claim that it is the first western-made film shown on DPRK TV. I know that the Bonner/Gordon film The Game of Their Lives was shown unedited on DPRK television, though it is about the DPRK and they were involved in the filming.  Tom & Jerry is on DPRK TV to this day, though it is not a film. Titanic was shown in DPRK cinemas.  Any other examples?

Read the full story here:
North Korea Gets a Special Kick Out of ‘Bend It Like Beckham’
New York Times
Dave Itzkoff
12/20/2010

Pictured Above: Love North Korean Children Bakery (Sonbong, DPRK)

Michael Rank writes in the Asia Times:

North Korea is a land of hunger and poverty but the children of Hahyeon primary school look reassuringly healthy, thanks to a small, British-based charity that runs three bakeries in this isolated and highly secretive country.

The children receive their midday meals courtesy of Love North Korean Children, [1] which bakes 2,500 mandu or steamed buns each day for pupils in 20 schools in and around the northeastern coastal city of Sonbong, near the Chinese border.

“If we did not provide these buns the children would go hungry,” said the charity’s founder and powerhouse, South Korean-born George Rhee.

Rhee works indefatigably to make sure that his bakeries have sufficient supplies of flour and other essential items, all of which have to be imported from China, something of a logistical and bureaucratic nightmare.

“All of our food gets to the children. None goes to the North Korean army or government,” said Rhee, and as he travels to North Korea from London up to 10 times a year, he is in a position to know.

Rhee, 52, told how he was inspired to found Love North Korean Children as a result of his own childhood experiences. He was one of eight children – he has six brothers and a sister – and when his father’s land reclamation business went bust, it left the family penniless. His parents were forced to put him and his twin brother in a children’s home.

The home was a cruel place and the children often went hungry, and it was this experience that made Rhee decide that he wanted to help the children of North Korea.

“At first I was thinking of opening an orphanage, but the government wouldn’t allow that. They say North Korean leader Kim Jong-il is our father, so there is no need for orphanages. So then I decided to open a bakery,” Rhee recalled.

Rhee first visited North Korea in 2002, and opened the charity’s first bakery the following year, in Rajin, close to Sonbong. I visited him there last month. He recently handed over responsibility for the Rajin bakery to a Korean-American group, but he also runs a bakery in Pyongyang, and this year opened a new bakery In Hyangsan, about 150 kilometers north of the capital.

He puts the cost of flour and equipment for the Sonbong and Pyongyang bakeries at about US$6,300 each per month, and for the Hyangsan bakery at almost double that, as it feeds twice as many children.

Rhee is a minister in the Assemblies of God Church and has its backing for his charity. Most of the costs are borne by three Dutch Christian foundations, the Barnabas Fund, Stichting Ora and Dorcas Aid International, but Rhee hopes to build more bakeries in North Korea and recently went on a fundraising trip to South Korea to talk to local companies and churches.

“There is a lot of interest in what we are doing. I am hopeful that we will be able to raise more money to open more bakeries,” he said.

Rhee said he hopes to open a fourth bakery in Haeju, the hometown of his late father, who escaped by boat to South Korea at the height of the Korean War in 1951.

“The North Korean government says we can. The only question is money,” he added.

Although the children at the Sonbong school looked healthy and well fed, they are among the lucky ones. Rhee said some of the children whom his bakeries feed are thin and pale, even with the extra food they receive from Love North Korean Children.

“I have even seen dead children in the streets. The situation for children in North Korea is terrible,” he stressed.

The United Nations World Food Program (WFP) bears this out. It says 33% of the population is undernourished and 23% of children under five are under-weight for their age.

“Public rations are reportedly far from sufficient and daily food consumption for most households is poor”, the WFP reports. Many people are forced to survive by cutting down on the number of meals per day, eating more wild foods – grass and bark in some cases – and less maize and rice, and reducing portion sizes for adults so that children can eat.

Although conditions have improved since the mid-1990s, when hundreds of thousands, possibly millions, of people died in a terrible famine, North Korea remains one of the world’s poorest countries.

Aid workers and diplomats say the government bears much of the blame, with an inflexible, highly centralized food-distribution system that results in a large proportion of the population going permanently hungry.

The WFP tactfully avoids blaming the government, referring to “a lack of arable land, poor soil management, insufficient water reservoirs to combat drought, shortages of fuel and fertilizer, outdated economic, transport and information infrastructure, and a general vulnerability to natural disasters”.

It quotes the Food and Agriculture Organization as saying North Korea needs to import 25% of its grain requirements, “but economic constraints mean the DPRK [Democratic People's Republic of Korea] will struggle to meet its food import needs.”

All this means that small organizations like Rhee’s do a valuable job in feeding people who would otherwise go hungry, although the paranoid, xenophobic nature of the regime makes their work extremely challenging.

Until recently, a number of South Korean charities were active in North Korea, but the Seoul government ordered them out after the sinking of the naval ship the Cheonan in March in which 46 South Korean sailors died.

The South Korean government blamed North Korea for the sinking, and relations between the two countries, cool at best, went into the deep freeze.

Surprisingly perhaps, Rhee strongly supports the Seoul administration’s tough line, as he believes most of the South Korean charities were naive and were unable, or unwilling, to prevent the North Korean government from diverting much of the food they provided to the million-strong army.

“I support President Lee Myung-bak in this,” Rhee said. “These South Korean organizations were foolish” in not monitoring where food and other supplies were going.

Love North Korean Children was not affected by the ban, however, as it is a British-registered charity and Rhee, who has lived in the UK for 20 years, is a British citizen.

“The North Koreans cooperate well with us. It isn’t easy but we help to make sure that people get fed,” he said.

I had unexpected proof that the North Koreans appreciate Rhee’s efforts. During my visit to North Korea, officials constantly complained to me about photographs I was taking and at one point deleted some pictures on my camera.

I was concerned that they would delete more photographs when I left the country, as frequently happens.

I need not have worried, however. The customs officer who checked my camera at the North Korean-Chinese border was well disposed towards us, as his children were fed by Love North Korean Children. He took just a quick look at my photographs and waved us through.

You can see the author’s photos from Rason here.

Read the full story here:
British bakeries a lifeline in North Korea
Asia Times
Michael Rank
10/27/2010

According to Yonhap:

Britain has named a female career diplomat as its next ambassador to North Korea, the Foreign and Commonwealth Office said Tuesday.

The office said Karen Wolstenholme has been appointed as its envoy to the Democratic People’s Republic of Korea, which is the official name of the communist country. She is to succeed London’s current ambassador to Pyongyang Peter Hughes in September 2011.

Wolstenholme joined the foreign office in 1980 and was previously posted to Moscow, Brussels and Wellington.

She headed various regional teams from 2003 before being named First Secretary, Deputy UK Permanent Representative to the Organization for the Prohibition of Chemical Weapons based in the Hague in 2007.

I wish Mr. Hughes all the best in the future.

Read the full story here:
Britain taps woman as next ambassador to N. Korea
Yonhap
9/28/2010