North Korean Economy Watch

According to the Daily NK:

The chairman of North Korea’s State Development Bank, Jeon Il Chun visited China on April 8, reportedly to try and bring Chinese investment to Daebong Mine, located near Hyesan, Yangkang Province.

Daebong Mine is one of North Korea’s major gold mines, managed under the auspices of the No. 39 Department of the Central Committee, a special department charged with raising funds for Kim Jong Il’s personal use. Jeon Il Chun is the person in charge of the No. 39 Department.

Attempts to sell shares in a gold mine directly controlled by the 39 Department, Kim Jong Il’s own private safe, to China seem to indirectly imply that Kim is suffering from a debilitating foreign currency supply crisis.

One Daily NK source in China who is well-acquainted with North Korean affairs reported that while Jeon was in China, he met with the management of three or four Chinese enterprises which already have investments in North Korea, and suggested investment conditions under which the North could transfer some of its mineral rights to them and receive capital investments in return.

The source said, “For now, as far as I know, executive managers of the No. 39 Department have been in contact with Chinese enterprises. Since the Workers’ Party is trying to sell shares in a gold mine, it seems the funding of the Party might be serious.”

“It is not clear whether or not this attempt was done on Kim Jong Il’s instructions, but attracting foreign investment in a gold mine is not a commonplace affair,” the source pointed out, adding that an investor has not yet been put in place.

What is the Daebong Mine for?

The Daebong Mine is a relatively large gold mine on the border of Woonheung and Gapsan in Yangkang Province. Until 2001, a Yangkang provincial foreign currency earning enterprise and the foreign currency earning department of the People’s Safety Agency jointly managed it. However, in May, 2002, it became a No. 39 Department affiliated enterprise.

The No. 39 Department has been raising private funds for the leader and Party operations under the Finance and Accounting Department of the Central Committee since the mid-1970s. According to defectors, it has the highest authority and the largest funds of all North Korea’s foreign currency earning enterprises. Especially, it has the ability to mobilize tremendous financial resources since it manages and controls supplies of gold and silver and rare non-ferrous metals.

A source from Yangkang Province explained, “According to Chongjin University of Mining and Metals and Kim Chaek University of Technology, the purity of the gold from the Daebong Mine is more than 76 percent, while production from Hoichang and Eunsan in South Pyongang Province is 63 percent and 61 percent respectively. More than 150kg of solid gold is produced annually, so this mine is known as the ‘loyalty mine’.”

“People say that the government earns four or five million dollars a year through this mine. Neither Yangkang Provincial Committee nor Hyesan Municipal Committee is involved with the business of the mine.”

The source added, “Since the No. 39 Department deals with the mine, only those discharged soldiers with good family backgrounds are dispatched there by the Central Committee. In October of last year, around 200 discharged soldiers with good family backgrounds came to the mine.”

Almost all the gold produced in the Daebong Mine is stored in Swiss and Austrian banks in gold bars.

A Chinese company had a contract with the DPRK’s Musan Mine which has been canceled for an unknown reason.

Click here to see what I believe is the mine’s location.

Read the full article here:
No. 39 Department Hawking Shares in Key Gold Mine
Daily NK
5/3/010
Lee Sung Jin

According to the Choson Ilbo:

North Korean leader Kim Jong-il’s youngest son and the heir apparent Kim Jong-un is already said to be busy amassing his own slush fund. Despite North Korea’s dire economic difficulties, Kim Jong-il himself is said to have stashed away between US$200-300 million every year to finance his lavish lifestyle and maintain the party elite’s loyalty to him.

With the money, North Korea would be able to import between 400,000 to 600,000 tons of rice, which would be enough to cover half the country’s food shortage of 1 million tons of rice per year.

Key departments within the Workers Party are pressuring agencies under their control to offer “loyalty funds” for the successor, a source familiar with North Korean affairs said. “A separate company has been established under the leadership of Kim Jong-un to secretly amass foreign currency.”

The source said Kim senior uses his slush fund to finance his expensive tastes, build monuments in his own honor and buy gifts for his loyal aides. Faced with increasing difficulties bolstering his slush funds under international sanctions, the Kim is said to have issued an ultimatum to his top officials in February, saying from now on he would judge their loyalty based on the amount they contribute to the fund.

The North is estimated to have imported more than $100 million worth of high-quality liquor, cars and other luxury goods in 2008. And also on the list are pet dogs, which the Kim family are said to adore. Kim buys dozens of German shepherds, Shih Tzus and other breeds from France and Switzerland every year. He also buys dog food, shampoo and other pet products as well as medical equipment for the dogs and has foreign veterinarians check their health.

Before nation founder Kim Il-sung’s birthday on April 15 this year, Kim imported around 200 high-end cars from China at a cost of some $5 million. A North Korean source said secret funds are also used to finance nuclear missile development and other state projects Kim Jong-il orders personally.

It is difficult to estimate the total amount of Kim’s slush fund. Experts can only guess that Kim has stashed huge sums of money in Swiss or Luxembourg bank accounts, as did other dictators like former president of the Philippines Ferdinand Marcos and ex-Iraqi leader Saddam Hussein. The international press estimates Kim’s slush fund to be worth around $4 billion.

Kim started amassing his slush fund as soon as he was picked as the next leader of North Korea in 1974 to be able to buy the loyalty of top officials. A special department within North Korea’s Workers’ Party called Room 39 which manages Kim’s slush fund by collecting the loyalty funds, exporting local staples including pine mushrooms and operating stores in hotels. A large portion of the $100 million to $200 million North Korea makes each year from exporting weapons, producing counterfeit dollars, smuggling fake cigarettes and selling drugs are also put into Kim’s slush fund.

A North Korean source said a lot of the cash profits generated by the joint tourism business with South Korea end up inside Kim’s personal slush fund too, judging by the fact that Daesong Bank and Zokwang Trading, which do business with the South, are both controlled by Room 39.

Early this year, Kim appointed his high school friend Jon Il-chun to head Room 39. Jon was made the chief of a state development bank North Korea opened recently to lure foreign investment. A South Korean government official said there are suspicions that Kim is diverting some of the profits of the state development bank into his own slush fund as well.

Read the full story here:
How N.Korea’s Ruling Family Swells Its Private Coffers
Choson Ilbo
4/28/2010

According to the Donga Ilbo:

North Korea seeks to directly handle tours to the Mount Kumgang area after forcing South Korea out of the venture, said a source on North Korean affairs yesterday.

Korea Taepung International Investment Group, an agency under the North’s powerful National Defense Commission, has reportedly recruited Chinese companies to help operate the tour since January this year.

The source said, “Negotiations have significantly progressed in certain aspects,” adding, “I understand the North Korean leadership is considering directly operating the Mount Kumgang tour by getting Taepung or an agency under the National Defense Commission to hire multiple Chinese companies as agencies after forcing the Hyundai Group out of Mount Kumgang and Kaesong.”

Another informed source said, “Since Taepung is an agency that holds overall authority over attracting investment for the North’s national development, the group is believed to be advising and supervising efforts to resume the Mount Kumgang tour as well.”

On this, a South Korean government source said, “Even if the North severs ties with Hyundai Asan Corp., complicated legal action will continue over the North’s violation of the contract,” adding, “No Chinese company will seek to serve as a comprehensive business operator, so the new plan appears to be the most practical alternative for North Korea.”

If Taepung or an agency under the defense commission starts to operate the tour directly, the tour program will likely be operated under a completely different system.

The tour’s South Korean operator, Hyundai Asan, has wielded comprehensive and monopolistic rights to the venture, but North Korea appears to have taken over as the operator, with multiple foreign companies taking part.

An agency under the North’s defense commission or military will likely step forward to operate the tour in lieu of Pyongyang’s Asia-Pacific Peace Committee under the ruling Workers’ Party or the Landmark General Development Bureau under the North Korean Cabinet.

And according to Yonhap:

Dozens of South Korean business officials will visit North Korea this week to comply with Pyongyang’s demand that they be present when the communist state freezes their assets at a joint mountain resort, officials said Monday, amid fears of further confiscation.

North Korea already confiscated five South Korean government-run facilities, including a family reunion center and a fire station, at its Mount Kumgang resort on the east coast last week.

The move reflected Pyongyang’s anger over Seoul’s refusal to resume cross-border tours that were halted in 2008 after the fatal shooting of a South Korean tourist by a North Korean guard near the resort.

North Korea insists it has done everything to explain the shooting and guarantee safety for future South Korean visitors. South Korea doubts the genuineness of the gestures, demanding an on-site probe participated in by its officials and tangible safety measures.

The tours earned millions of U.S. dollars for the sanctions-hit North Korean regime before they were suspended. The North Korean demand for their resumption comes as the isolated state struggles to curb its economic troubles that deepened under U.N. sanctions imposed for its two nuclear tests, the latest in May last year.

An official at Hyundai Asan, the chief South Korean operator of the now-suspended tours, said 40 people from 31 companies, including his own, applied for permits to visit North Korea on Tuesday.

The North last week demanded “real estate proprietors and agents” attend the implementation of its plan to freeze their assets, which include hotels, a golf course and a variety of shops.

Officials at the Unification Ministry in Seoul said they plan to grant the permits.

“It is our basic stance that we respect the decisions of the companies,” spokesman Chun Hae-sung said.

Dozens of South Korean firms possess 360 billion won (US$320 million) worth of real estate in the mountain tourist zone.

During a meeting with Hyundai Asan officials stationed at the resort Monday morning, North Korea did not specify which companies should attend the freeze this week, a ministry official here said.

“The North Korean authorities remained ambiguous,” the official said, declining to be identified. “That will leave the door open for anyone wanting to visit North Korea this week.”

South Koreans fear Pyongyang may be taking steps to confiscate more South Korean assets. The North seized the Seoul government-run facilities 10 days after freezing them and expelling personnel.

South Korea has pledged retaliatory measures without being specific. A senior Unification Ministry official, who spoke on the condition of anonymity, said Monday the measures would be announced by early May.

South Korea also warned North Korea will be to blame for any further deterioration of relations between the divided states.

The Korea Herald speculates on how the South Korean government might retaliate:

The government is reportedly considering limiting the volume of agricultural and marine products from North Korea or tightening regulation of imports in other ways.

Certain North Korean items, such as sand, hard coal and mushrooms, already require the unification minister’s approval each time someone wants to bring them into the South. Seoul could expand the number of such items, making the import process more troublesome.

Currently, South Korean materials going into the joint industrial park in the North’s border town of Gaeseong and products rolled out from factories there account for more than 60 percent of inter-Korean trade.

Last month’s inter-Korean trade volume amounted to $202 million, 63 percent of which were goods going in and out of the Gaeseong park.

Since cross border tours to Mount Geumgang have been stalled, most of the remaining inter-Korean trade volume (35 percent) consists of agricultural and marine products.

Although the growth of inter-Korean trade has slowed under the Lee Myung-bak administration, South Korea is still the North’s second largest trading partner after China, according to the Unification Ministry.

Inter-Korean trade accounts for about 30 percent of the North’s trade with other countries, while China takes up about half.

The Seoul government could also further restrict nongovernmental aid to the North, which it has limited ever since Pyongyang launched a rocket in April last year.

It could also engage to the international community about the North’s “wrongful measures.”

Read the full stories here:
N. Korea to Directly Take Over Mt. Kumgang Tour
Donga Ilbo
4/26/2010

S. Koreans to visit N. Korea as Pyongyang moves to freeze their assets
Yonhap
Sam Kim
4/26/2010

Seoul may cut trade with N. Korea
Korea Herald
Kim So-hyun
4/25/2010

UPDATE 4: Here is the DPRK Pavilion’s web page (h/t NKNews.org).

UPDATE 3: A video of the DPRK pavilion at the Shanghai expo can be seen here.

UPDATE 2: Voice of America offers a description of the interior of theD PRK’s Pavilion:

Inside, there is a replica of Pyongyang’s Juche Statue, a small waterway that represents the North’s Taedong River, a traditional bridge and large fountain with colored lights.

On top of the fountain, a group of white marble statues of naked boys encircle two others. One boy holds the other up in the air as he lifts a dove into the sky.

In one corner, there is a small cave that contains a reproduction of a mural from the North’s Koguryo Tombs, a World Heritage site.

Along a wall, beneath the phrase “Paradise for the People,” a row of television sets plays videos depicting everyday life in North Korea.

Some of the videos show North Koreans leisurely bowling, playing golf and ice skating. Although some of the footage appears to be recent, other shots seem to be decades old.

Many who visited the pavilion Tuesday say that aside from the fact that there were no lines to get in, they wanted to visit because, as they put it, North Korea is so mysterious.

UPDATE 1:  The Shanghai Expo has posted some information on the DPRK’s Pavilion. Here are some of the details:

Theme: Urban Development of Pyongyang, the Capital of DPR Korea (Prosperous Pyongyang based on the River Taedong Culture)

Pavilion Features: The pavilion perfectly merges national characteristics of DPRK together with its modern beauty. Outer walls are decorated with national flags and a winged steed bronze statue. Main items exhibited in the pavilion include Juche Tower, Taedong River, Korean-style pavilions, rockeries and small stone caves. All of them present a prosperous and modern Pyongyang based on the traditions of DPRK, where education, science, culture and sports have achieved great development during its long history.

Pavilion Highlights
Highlight 1: The Juche Tower Model — 4.5-meter-high model of Juche Tower is exhibited in the pavilion.
Highlight 2: Symbol of Taedong River — winding river flows across the pavilion, reminding people of the stretching Taedong River.
Highlight 3: National Section and Stone Caves — national section and stone caves are exhibited on the right side of the pavilion. Inside the cave the world heritage of tomb murals in Jiangxi County and paintings of DPRK style are displayed.

Here are some photos of the DPRK’s pavilion (h/t Daylife):

And here are some photos from the Shanghai Scrap blog:

ORIGINAL POST: According to the PRC’s People’s Daily:

China welcomes countries including the Democratic People’s Republic of Korea (DPRK) to participate in the 2010 Shanghai World Expo, a Foreign Ministry spokesman said Tuesday.

…

DPRK Chamber of Commerce Vice-Chairman Ri Song Un told Xinhua on March 18 that the country had already finished preparatory work for the 2010 Shanghai World Expo, its first Expo appearance.

Situated in an area of 5.28 square kilometers at the core the city of Shanghai to exhibitions, events and forums, the six-month expo starting from May 1 will attract about 200 nations and regions and international organizations’ participation, as well as 70 million visitors from home and abroad.

Read the full story here:
China welcomes DPRK in attending Shanghai World Expo: FM spokesman
People’s Daily
3/30/2010

Click image for larger version

UPDATE 6:  According to KCNA:

Kim Yong Nam Attends Unveiling Ceremony

Pyongyang, April 4 (KCNA) — Kim Yong Nam, president of the Presidium of the DPRK Supreme People’s Assembly on an official goodwill visit to Senegal, participated in the ceremony for unveiling the “Monument to Revival of Africa” on Saturday.

The monument represents in a formative artistic way the strong stamina and will of the African people to bring about their bright future by their own efforts while aspiring after independence and building of a new society. It has been successfully built in a short span of time with help of Korean technicians.

Present at the ceremony were Senegalese President Abdoulaye Wade and heads of state and government from at least 20 African countries, representatives of different international and regional organizations, diplomatic envoys of different countries in Dakar and thousands of its citizens.

Incumbent and former presidents of African countries and representatives of international and regional organizations said at the ceremony that this wonderfully-built monument is pride of not only Senegal but also Africa.

They expressed belief that the African people would make greater progress with the conviction of the future.

UPDATE 5: Senegal unveils £17m African Renaissance statue built by North Korea’s Mansudae Overseas Investment Group.  According to the Gaurdian:

Senegal’s vast African Renaissance monument was unveiled yesterday amid criticism that the 49-metre bronze statue is a presidential vanity project and waste of money.

The representation of a man, woman and child emerging from a volcano was inaugurated at a ceremony featuring hundreds of drummers and dancers.

The statue, which cost £17m and is taller than the Statue of Liberty, stands on a hill overlooking the capital, Dakar. It marks Senegal’s 50 years of independence, and the president, Abdoulaye Wade has said he hopes it will become a tourist attraction.

Wade, 83, who is expected to seek another term in office at elections in 2012, said the monument commemorated the entire continent. “It brings to life our common destiny,” Reuters reported him saying at the launch ceremony. “Africa has arrived in the 21st century standing tall and more ready than ever to take its destiny into its hands.”

Wade has faced criticism for spending so much money on the structure when Dakar residents living in its shadow endure regular power blackouts and flooding. He has angered both Senegal’s Christian minority and some within the Muslim majority population.

Wade apologised to the former group after likening the monument to Christ, while some imams have condemned the Soviet realist-style statue as idolatrous. Other have expressed concern at the thigh-length hemline skirt worn by the female figure.

UPDATE 4: According to Access Asia’s Weekly Website Update – 1st April 2010:

Senegal may not have much to attract tourists, but it does now have something most other potential holiday destinations don’t – a 50 metre high bronze monument crafted by North Koreans. It’s a quick bit of profit for Pyongyang. Hopelessly corrupt and slightly potty Senegalese president Abdoulaye Wade wanted a tall bronze statue – and what he wants, he gets. Actually it’s taller than the Statue of Liberty in the very-difficult-to-get-a-visa-in-these-days United States of America. Called “African Renaissance” it stands on a hill near Dakar International Airport and represents a heroic couple apparently about to launch their child into the sky, for some reason unspecified.

President Wade couldn’t afford the statue so he called in Pyongyang as specialists in providing oversized tat. They did, in return for a prime chunk of real estate in exchange. Pyongyang has since sold the land on, making a tasty profit. Senegal, still mired in poverty, now has Africa’s daftest statue and some dodgy property developers in charge of a chunk of their land – fair swap?

UPDATE 3: Great photos here (h/t Marmot)

UPDATE 2: The Wall Street Journal fills in some more details on the Monument:

This month, workers from Mansudae Overseas Project Group of Companies, a North Korean design firm, were putting the finishing touches on a giant copper sculpture of a family. Senegal President Abdoulaye Wade will inaugurate the African Renaissance Monument in April to mark the 50th anniversary of the country’s independence from France, a ceremony he expects the president of North Korea’s Parliament to attend.

“Only the North Koreans could build my statue,” says Mr. Wade, sitting in a red velvet chair in his palace. Moreover, they offer monuments at a good rate, he says: “I had no money.”

North Korea is mainly known for a totalitarian regime overseeing economic failure. But it has also produced a successful export business—building monuments to freedom and independence. The statues’ selling point: They are big, simple and cheap.

Over the past decade, Mansudae has built dozens of statues and monuments for cash-strapped African countries. Botswana cut the ribbon on a memorial to three tribal chiefs in 2005. Neighboring Namibia boasts a bronze of its founding president wielding an AK-47.

The African Renaissance is Mansudae’s biggest work yet, measuring 164 feet high and crowning two barren hills in Dakar called “Les Mamelles” at the westernmost point of Africa. That makes it taller than either the Statue of Liberty (151 feet) or Rio de Janeiro’s Christ the Redeemer (100 feet). The statue depicts a father holding a baby in his left arm. The man’s right arm is around the waist of the baby’s mother. The three are reaching out to the sky and out to the ocean.

“Its message is about Africa emerging from the darkness, from five centuries of slavery and two centuries of colonialism,” says Mr. Wade.

Africa’s rash of nationalistic monuments, statues and shrines has made Mansudae’s signature aesthetic of socialist realism fashionable. In Benin, for example, a statue of a 19th-century king holds his hand up, symbolically forbidding the French to enter.

Socialist realism is popular “because people can access it easily,” says Mary Jo Arnoldi, curator for African Ethnology at the Smithsonian Institution. It is easy to understand for illiterate populations, she says. “But aesthetically, it’s not going to win any prizes.”

In Senegal, however, the statue has been a beacon of discontent, sparking angry newspaper editorials and protests from religious leaders. The statue’s sultry mother figure, dressed in a wisp of fabric that reveals part of a breast and a bare leg, has offended imams in this majority-Muslim country.

Financing details for the project have been murky, and some taxpayers are outraged by the very idea of it when power outages occur daily and university students strike over rising fees. Mr. Wade had no budget for the African Renaissance, so instead offered a prime chunk of state-owned land in exchange, which North Korea has since resold at a large profit, he says.

However, a panel near the base of the monument lists the official budget as $25 million, though foreign government officials estimate its cost at around $70 million. Mr. Wade says he plans to keep 34% of the profit from entrance fees and merchandise for a personal foundation.

The North Korean role is of less concern, though labor unions do lament that Mansudae got the job when an estimated 49% of the population is unemployed: 150 North Koreans are building the statue, helped by just 50 Senegalese. Mamadou Diouf, the head of the Confederation of Autonomous Unions of Senegal, says the project doesn’t look African.

“If [building the statue] was a priority for our country, it could have been done by Senegalese workers in a manner much more in line with our values,” he says.

A short video related to this story can be seen here.

The monument’s location is here.

UPDATE 1: The Guradian brings us up to date with the monument’s construction:

According to the Guardian:

The statue shows a muscular man in a heroic posture, outstretched arms wrapped around his wife and child. Nearly 50 North Korean workers were brought in to build it, because of their expertise with bronze art, and some Senegalese have complained of its communist-era design. It has also drawn criticism from Muslims, who make up 94% of Senegal’s population, because of Islamic prohibitions on representations of the human form.

Abdoulaye Wade, Senegal’s octogenarian president, has compared the work to some of the west’s best-known landmarks, and some Senegalese do regard it as a symbol of pride that has economic spin-offs.

Alassane Cisse, a Senegalese delegate at the world summit on arts and culture in Johannesburg, South Africa, said: “All cities need signatures, but in Dakar we have had only monuments which existed during colonisation. Africa needs its own great monuments like the Eiffel tower and the Statue of Liberty. This symbol of African renaissance will motivate people to rehabilitate and work with Africa.”

He added that the site has exhibition, multimedia and conference rooms, as well as a top-floor viewing platform giving a bird’s eye view of Dakar. “It will be a cultural place. Around the monument there will be a theatre and shops. Many tourists will visit there, so the economic effects will benefit the population.”

But the president has sparked anger by maintaining that he is entitled to 35% of any tourist revenues it generates, because he owns the “intellectual rights”.

Critics say the £17m could have been used for more pressing concerns. Djiby Diakhate, a sociologist at Dakar’s Cheikh Anta Diop university, told the Associated Press: “Senegal is going through a profound crisis. Our economy is dying. People are struggling to eat. We should be spending money helping people survive.”

ORIGINAL POST: As some readers may be aware, I have been tracking down monuments and buildings constructed by North Korea’s Mansude Overseas Project Group.  To date, I have tracked down quite a few (see North Korea Uncovered for the full list).

One such find is the “Monument to the African Renaissance” in Dakar, Senegal.  See this Voice of America story for background.  Well, a friend of mine recently visited Dakar and snapped this photo of the monument’s construction:

Click on image for larger version

I believe we can see a leg on the lower left.  The majority of the construction so far seems to be support.

Note to readers: if you are aware of any other North Korean-built (or operated) buildings/monuments/businesses/restaurants in your country, please let me know. I do not believe a comprehensive list of these projects exists, so getting this information together now will certainly be valuable to future historians. How is that for motivation?

According to the Korea IT Times:

The number of science and technology institutions in North Korea is estimated to hover around 300; about 200 institutions have been officially confirmed. Therefore, the North is unable to focus on building the hardware industry, which requires massive capital input and long-term investment, and is left with no choice, but to be keen on nurturing IT talent geared toward software development. As a result, the North has been producing excellent IT human resources in areas like artificial intelligence, needed for controlling man-made satellites and developing arms systems, and programming languages.

The following IT institutions are in charge of fostering the North’s software industry: DPRK Academy of Sciences, Korea Computer Center (KCC), Pyongyang Information Center (PIC) and Silver Star, which is currently under the KCC.

In particular, the creation of the PIC, modeled on the Osaka Information Center (OIC) at Osaka University of economics and law, was funded by Jochongnyeon, the pro-North Korean residents’ league in Japan, and was technologically supported by the UNDP. The Jochongnyeon-financed KCC has been responsible for program development and distribution; research on electronic data processing; and nurturing IT talent.

Thanks to such efforts, nearly 200,000 IT talents were fostered and about 10,000 IT professionals are currently working in the field. Approximately 100 universities such as Kim Il-sung University, Pyongyang University of Computer Technology and Kim Chaek University of Technology (KUT) – and 120 colleges have produced 10,000 IT human resources every year. At the moment, the number of IT companies in the North is a mere 250, while the South has suffered from a surplus of IT talent. Therefore, inter-Korean IT cooperation is of great importance to the two Koreas.

As aforementioned, the North has set its sights on promoting its software industry, which is less capital-intensive compared to the hardware industry. Above all, the North is getting closer to obtaining world-class technologies in areas such as voice, fingerprint recognition, cryptography, animation, computer-aided design (CAD) and virtual reality. However, the North’s lack of efficient software development processes and organized engineering systems remains a large obstacle to executing projects aimed at developing demand technology that the S. Korean industry wants. What is more, as the North lacks experiences in carrying out large-scale projects, doing documentation work in the process of development, and smoothing out technology transfer, much needs to be done to measure up to S. Korean companies’ expectations.

Thus, the North needs to build a system for practical on-the-job IT training that produces IT talent capable of developing demand technology- which S. Korean companies need. In addition, it is urgent for both Koreas to come up with an IT talent certification system that certifies both Koreas’ IT professionals.

Read the full story here:
North Korea Needs to Set Up Practical IT Training and Certification Systems
Korea IT Times
Choi Sung
4/2/2010

According to the Associated Press (via Los Angeles Times):

The North Korean’s note, scrawled in pen, was simple: “I want to go to South Korea. Why? To find freedom. Freedom of religion, freedom of life.”

The ex-logger, on the run from North Korean authorities, handed the note over to a South Korean missionary in the Russian city of Vladivostok last week in hopes it would lead to political asylum.

Just before he was to meet Thursday with the International Organization for Migrants, a team of men grabbed him, slapped handcuffs on him and drove off, rights activists in Moscow said Friday. He was spirited away to the eastern port city of Nakhokda, where he is sure to be handed back over to North Korean officials and repatriated to his communist homeland, activists said in Seoul.

Police in Vladivostok refused to comment. A senior South Korean diplomat in Vladivostok said he had no information. Officials from the U.S. consulate in Vladivostok could not be reached for comment.

The 51-year-old would be the third North Korean logger in Russia in a week to make a bid for asylum. On March 9, two other North Koreans who had fled their jobs as loggers managed to get into the South Korean consulate in Vladivostok.

Russia’s RIA Novosti news agency reported last week that two North Koreans climbed a fence, ran past the guards and entered the consulate, saying they wanted political asylum. ITAR-Tass carried a similar report.

The incidents focused attention on the precarious existence of tens of thousands of North Koreans sent by the impoverished regime to work in neighboring Russia.

Russian government figures from 2007 put the number of North Korean laborers at 32,600, most of them working in logging in the remote east.

The Rev. Peter Chung, a Seoul-based activist, said there are about 40,000 North Korean loggers in Russia, but that some 10,000 of them have fled their work sites. Some are finding work as day laborers while others are in hiding as they try to map out how to win asylum in foreign diplomatic missions.

The North Korean described the conditions as unbearable. His government took half his meager wages, while the North Korean company operating the logging camp took 35 percent. He kept just 15 percent — about $60 a month — an arrangement that rendered him “virtually a slave,” he told activists.

He eventually fled the logging camp, taking odd jobs to survive. He also became a Christian, Chung and Kim Hi-tae said, which could draw severe punishment, even execution, back home.

The successful asylum bid of two other former North Korean loggers inspired Kim to make a similar attempt, Chung said.

Previous posts on the North Korean loggers in Russia can be found here. More here. And here. And here.

Read the full story below:
3rd North Korean logger attempts to defect in Russia, propelled by dream of ‘freedom of life’
Associated Press (via Los Angeles Times)
Kim Kwang Tae
3/19/2010

Institute for Far Eastern Studies (IFES)
NK Brief No.10-03-11-1
3/11/2010

North Korea is actively looking into further development of Rajin Port by extending China’s lease on port facilities for another decade, and granting Russia 50-year rights to Rajin port facilities, as well. Li Longxi, a deputy of the National People’s Congress and head of Jilin Province’s Yanbian Korean Autonomous Prefecture, revealed to a Yonhap News reporter in Beijing on March 8, “The North gave Russia the right to use Pier 3 for 50 years, and is actively looking into extending the right to use Pier 1 granted to China in 2008 for another 10 years.”

Rajin Port has five piers, with Pier 3 being larger than Pier 1. The rights to Pier 1 were granted to the Changli Group, which specializes in the manufacture of environmental materials in Dalian. 10-year use and development rights had already been granted to this company. Deputy Li explained, “China gained rights to Pier 1 in 2008, and is now in negotiations with North Korea over extending those rights for 10 years.” Therefore, if this agreement is reached, China will have exclusive rights to the pier until 2028.

Li added, “Currently, China is in the process of constructing the facilities necessary to use the pier, and will begin to move goods through the port when construction is complete.” It appears China has invested tens of millions of Yuan into this project. Li also pointed out that by being able to use Rajin Port, Yanbian, currently lacking export avenues, will be able to transport Jilin Province’s abundant coal resources, not only through the Yellow Sea to Shanghai and other domestic cities, but to Japan and other countries in the Asia Pacific region.

On February 28, Sun Zhengcai, CCP Secretary of Jilin Province met with North Korean Kim Yong Il, head of the Korean Workers’ Party International Department, and introduced to him China’s ‘Greater Tumen Initiative’ development project. At the time, it was reported that Sun explained to Kim that Jilin provincial authorities had reached an agreement with North Korea for joint venture to construct a network of roads and basic infrastructure facilities. Jilin provincial and city officials, as well as Changchun city representatives, are involved in the project. China is focused on the Tumen river basin and Rajin Port because of their strategically valuable economic role in developing the country’s straggling northeast region.

Russia is also eyeing Rajin Port, because if the port is developed, it could serve as an outlet to export Sakhalin and Siberian crude oil and natural gas to neighboring countries. In July of last year, Russia and North Korea reached an agreement to repair the rail connection between Rajin and Hasan and to improve Rajin Port facilities, investing 1.4 billion Euros. Japanese newspaper Sankei Sinbun quoted a source within North Korea as reporting that Jang Song Thaek, Party administrative chief and brother-in-law of Kim Jong Il, had recently travelled to Rasun (Rajin + Sunbong) and declared that the area would be fully developed within the next 6 months.

The Korea Daepung International Group, serving as North Korea’s window to foreign capital, is said to have a plan to entice international investment in order to support the Tumen river development plan, and plans to develop Rasun Special City and Chongjin Port into key outlets for DPRK-PRC-Russian trade and commerce in Northeast Asia. However, the participation, and investment, of private-sector enterprises will likely depend on the success of the Rajin Port development.

According to the AFP:

Sanctions-hit North Korea on Wednesday formally launched a development bank aimed at attracting foreign funds to revive its economy, state media reported.

Directors of the State Development Bank held their first meeting to elect officers and decide on a management structure and annual budget, the Korean Central News Agency said.

The bank, set up on the orders of leader Kim Jong-Il, will have “advanced banking rules and system for transactions with international monetary organisations and commercial banks,” the agency said.

It would invest in major projects and act as a commercial bank.

The bank is the latest move by the North to revive its ailing economy and rebuild crumbling infrastructure. In January it upgraded the status of Rason, a free trade zone near the border with China and Russia, to boost foreign trade.

…

Analysts have said the decision to found the development bank shows leader Kim is confident the six-party talks will eventually produce a settlement.

The board is made up of members of the National Defence Commission (NDC), the nation’s top ruling body; the Korea Asia-Pacific Peace Committee, a state agency in charge of exchanges with South Korea; the finance ministry; the Korea Taepung International Investment Group and two independent directors.

NDC representative Jon Il-Chun was elected director-general and Pak Chol-Su, described as a Korean resident in China, as his deputy.

Previous State Development Bank posts here.

The KCNA story is here.

North Korean leadership Watch has more, including a picture of Jon Il-chun.

Read the full story here:
N.Korea launches bank to woo foreign capital
AFP
3/17/2010

UPDATE: According to the Daily NK, South Korea’s National Intelligence Service (NIS) claims $10 billion transfer is not likely:

The director of the NIS, Won Sei Hoon passed on the confirmation to a closed-door meeting of the Intelligence Committee of the National Assembly on Tuesday, after which members Chung Jin Suk of the Grand National Party and Park Young Sun of the Democratic Party revealed it to the press.

According to the two lawmakers, Won told the Committee, “Although North Korea is likely going around trying to invite 10 billion dollars of foreign investment, it seems that they have not attracted that much capital,” before predicting, “Unless the North solves the nuclear problem, it will be almost impossible to attract that much capital.”

He did add, however, “The Cabinet, Workers’ Party, military authorities and National Defense Commission have all seemingly been moving to try and obtain foreign capital. The appeasement attitude shown to the international community may be a part of their efforts to solve the problem of a lack of foreign currency.”

During the closed-doors meeting, Won also gave his opinion on a wide range of other issues pertaining to North Korea, including the inter-Korean dialogue and the truth of Kim Jong Il’s health status.

“It is not a deadlock situation because there is still dialogue,” Won said of the inter-Korean relationship. However, “Since North Korea’s attitude has not changed yet; it will take more time to resume the tours of Mt. Geumgang and Kaesong.”

Commenting on Kim Jong Il’s probable health condition, Won revealed that Kim has been making an effort to appear healthy, for example by removing age spots on his face, but, “While he has been visiting industrial sites, he has expressed nervousness about current issues and economic problems, and has a sharpened temper. His tendency of relying on old acquaintances and family members has been increasing.”

However, “I believe there is zero possibility of a coup. For the time being, it seems that the North Korean leadership can control its domestic society.”

ORIGINAL POST: According to Yonhap:

During his four-day visit to Pyongyang, the source said [Wang Jiarui, head of the international department of the Communist Party of China] held in-depth discussions about investments by Chinese companies via Daepung Group, an investment company that works to attract overseas capital to the communist state.

Total investments are expected to exceed the $10 billion mark, with a signing ceremony planned by North Korea’s State Development Bank in mid-March that is to be attended by foreign investors from involved nations, the source said.

“Over 60 percent of total investments, which will be announced next month, will come from China,” the source added, suggesting the Chinese government’s close involvement in building railways, ports and houses in North Korea.

…

China is North Korea’s biggest trading partner and an important provider of food and fuel. North Korea remains isolated from most of the world and has received virtually no foreign investment. The North’s GDP was estimated at around $26.2 billion in 2008 compared with $1.3 trillion for the South, according to the U.S. State Department.

Read more about the Korea Taepung International Investment Group and the DPRK State Development Bank here.

Read the full story below:
N. Korea draws US$10 billion in foreign investments: source
Yonhap
2/15/2010