North Korean Economy Watch

AFP (Hat tip DPRK Studies)
Park Chan-Kyong
2/5/2007

Nuclear-armed North Korea is notorious for selling its missiles overseas but the hardline communist state also has a more improbable export — cute cartoon figures.

South Korean experts say the North’s animated movie industry brings the isolated country both precious hard currency and access to global IT expertise.

“Animation is one of the rare sectors where North Korea is following the global trend,” said Lee Kyo-Jung, an executive at the Korea Animation Producers’ Association (KAPA).

“It has been subcontracted to produce animation for North America, Europe and Asia,” Lee told AFP. Among the major clients are studios in France, Italy and China, he added.

Lee has visited the North to discuss the feasibility of the two Koreas jointly producing animated features, with North Koreans providing manpower and the South supplying equipment and finance.

The North for decades has used cartoons to imbue its own children with socialist ethics. Other cartoons screened there also bring some fun into drab everyday life.

“Tom and Jerry” is a prime-time hit in the communist state, Lee said. “They just love it. They see the US in the headstrong cat and North Korea in the wise mouse.”

The centre of North Korea’s animation industry is the April 26 Children’s Film Production House, known to the outside as SEK Studio. Its 1,600 animators have been downsized to 500 with the introduction of computerised equipment.

“SEK is one of the largest hard currency earners in North Korea,” said Nelson Shin, a North Korea-born US producer who worked on “The Simpsons”.

“SEK is a rare North Korean company that can directly engage in foreign trade and deploys representatives overseas,” said Shin, a frequent visitor to the North.

The state-run company worked for Shin’s US-South Korean studio KOAA Films on his 6.5-million-dollar animated feature “Empress Chung,” a Korean equivalent of the Cinderella story.

The movie was screened simultaneously in Seoul and Pyongyang in August 2005, becoming the first feature film jointly produced by the two nations.

“I was taken by surprise at their manual skill. I dare say the North Koreans are better than their peers in the South in terms of their hand skills,” Shin said.

Shin said Disney had subcontracted the TV series made for European viewers of the “Lion King” and “Pocahontas” to SEK.

North Korea’s animation industry began years before South Korea’s own in the mid-1960s. It dates back to the mid-1950s when it sent young artists to what was then Czechoslovakia to learn the craft, according to Lee of KAPA.

But South Korea has come from behind on the strength of its plentiful animators and computer technology. It earned some 120 million dollars through subcontracted work when the subcontract trade was at its peak in 1997.

Latecomers China, Vietnam and India are taking a growing share of the subcontracting market while South Korea is graduating from the labour-intensive work into creative products.

The growth in North Korean animation reflects the patronage of all-powerful leader Kim Jong-Il, a movie buff whose personal archive is said to comprise tens of thousand of films.

The country, becoming priced out of the lower-end work by latecomers, is now seeking to go upmarket to focus more on computer-assisted animation.

“For North Koreans, animation is not only a source of hard currency but also technology from the outside world. They are really keen on obtaining things like graphics technology,” said Kim Jong-Se, marketing director of Iconix Entertainment.

Iconix trained North Koreans in 3D animation when it subcontracted work to a company called Samcholli. The firm produced part of a cartoon series entitled “Pororo the Little Penguin” in 2003 and 2005.

The series turned out to be a big hit, selling in more than 40 countries.

Kim in late 2001 also helped produce “Lazy Cat Dinga,” the first animated series short of a full-length movie co-produced by the two Koreas.

“North Koreans are very good at doing what they are told but they have problems in using creativity,” Kim said.

Iconix Entertainment CEO Choi Jong-Il said both sides could benefit from splitting their roles.

“Joint projects will certainly bring benefits to both sides, with the South doing the overall planning and the North carrying out the main production,” said Choi.

Daily NK
Kim Chan Ku
2/2/2007

The doll producing factory, ‘Pyongyang Sunpyong Stuffed Toy Factory’ was named by myself. Since such toy factory was first case in North Korea, the party officials had great interest in it and supported my business.

I had a chance to look at products in my North Korean factory for the first in six years in Pyongyang.

Female workers in the factory had contributed the most. The material they had to handle was rare in North Korea. For most of them, it must have been their first time looking at such material. Still, factory employees labored and started to produce dolls.

Dolls of white bear, brown bear, puppies and kitten were manufactured. Even I felt like being a child when I was looking at those dolls. Some of them were planned for export to South Korea while the rest would remain for North Korean kids. I was dreaming of North Korean children holding the dolls produced in my factory.

If production phase kept up, there would be more order from international buyers and I could be able to teach more skills and know-how to North Korean technicians.

My next objective was to gradually increase the production rate to a hundred thousand dolls per month. What I had achieved by then took about six months. One hundred thousands dolls per month seemed an easy task.

But a ‘North Korean’ trouble occurred again. Since salary was set immobile, production cost was higher if output was low. When output was increased, the number of inferior goods also rose.

So I pushed the employees to work hard and cautiously at the same time with low rate of inferior goods. The reply was “we don’t work in a capitalists’ way!” Workers did not get paid more for extra production.

“The Great Leader comrade Kim Il-Sung and the Dear Leader comrade Kim Jong-Il already told us how to work. We only follow that.”

I could not find a word to respond.

Also, at the same time, I divided the 240 workforce into four divisions to stimulate competition. I planned to give them motivation by awarding the best division with flour. But such way was, for my employees, an ‘American imperialists’ way, not a Korean one.’

Despite such hardship, I tried my best. I focused not only on production rate but also general working environment to be comfortable and friendly. In order to do so, I turned on bright music inside the factory. Also, I emphasized the workers to make toys lively. Kids communicate with dolls that are lifelike and vivid.

the Economist
2/1/2007

Online dating in Pyongyang? Surely not

KIM JONG IL, North Korea’s dictator, has interests in modern technology beyond his dabbling in nuclear weaponry. In 2000 he famously asked Madeleine Albright, then America’s secretary of state, for her e-mail address. Mr Kim believes there are three kinds of fool in the 21st century: smokers, the tone-deaf and the computer-illiterate.

One of his young compatriots is certainly no fool. “Officially, our computers are mainly for educational and scientific purposes,” he says, before claiming: “Chatting on our web, I also met my girlfriend.”

Internet dating is only one of the surprises about the internet in North Korea, a country almost as cut off from the virtual world as it is from the real one. At one of the rare free markets open to foreigners, brand-new computers from China are sold to the local nouveaux riches complete with Windows software. Elsewhere, second-hand ones are available far more cheaply. In most schools, computer courses are now compulsory.

In the heart of the capital, Pyongyang, visitors are supposed to be able to surf freely through the 30m official texts stored at the Grand People’s Study House, the local version of the Library of Congress. The country’s first cyber café opened in 2002 and was soon followed by others, even in the countryside. Some are packed with children playing computer games.

But the world wide web is still largely absent. Web pages of the official news agency, KCNA, said to be produced by the agency’s bureau in Japan, divulge little more than the daily “on the spot guidance” bestowed by Kim Jong Il. No one in Pyongyang has forgotten that glasnost and perestroika—openness and transparency—killed the Soviet Union.

The local ideology being juche, or self-reliance, the country installed a fibre-optic cable network for domestic use, and launched a nationwide intranet in 2000. Known as Kwangmyong (“bright”), it has a browser, an e-mail programme, news groups and a search engine. Only a few thousand people are allowed direct access to the internet. The rest are “protected” (ie, sealed off) by a local version of China’s “great firewall”, controlled by the Korean Computer Centre. As a CIA report puts it, this system limits “the risks of foreign defection or ideological infection”. On the other hand, North Koreans with access to the outer world are supposed to plunder the web to feed Kwangmyong—a clever way to disseminate technical information to research institutes, factories and schools without losing control.

Yet even today, more and more business cards in Pyongyang carry e-mail addresses, albeit usually collective ones. A west European businessman says he is astonished by the speed with which his North Korean counterparts respond to his e-mails, leading him to wonder if teams of people are using the same name. This is, however, North Korea, and sometimes weeks go by in virtual silence.

In some places, North Korea’s internet economy seems to be overheating. Near the northern border, Chinese cell phones—and the prepaid phone cards needed to use them—are a hot black-market item, despite government efforts to ban them. The new web-enabled phones might soon give free access to the Chinese web which, for all its no-go areas, is a paradise of liberty compared with Kwangmyong. In this region, known for its casinos, online gambling sites are said to be increasingly active.

Last summer the police were reported to have cracked down on several illegal internet cafés which offered something more daring than the average chatting and dating. Despite the signs that North Korea’s web culture is ready to take off, internet-juche remains a reassuring form of control in the hermit regime.

Asia Times
Bertil Lintner
1/18/2007

While the West and Japan have targeted North Korea’s overseas bank accounts to curtail its weapons program, Pyongyang has recently turned to more ingenious ways of maintaining its international businesses through substantial exports of gold, silver and other valuable metals.

Pyongyang has apparently found a willing conduit to global buyers through its many business connections in Thailand, which has recently emerged as the isolated state’s third-largest trading partner after China and South Korea. According to official Thai Customs Department statistics, North Korea shipped 500 kilograms of gold worth 398 million baht (US$11 million) to Thailand last April.

The following month, another 800kg of gold worth 635 million baht landed in Thailand courtesy of North Korea. Also, in June, 10 tons of silver worth 148 million baht was sent from North Korea to Thailand, followed by 12 tons worth 166 million baht last October.

In sum, North Korea exported 1.35 billion baht – or nearly $40 million – worth of precious metals to Thailand last year.

That is a substantial figure for North Korea, a country with an estimated gross domestic product of about $22 billion and whose total exports amounted to just over $1 billion, according to official statistics. Thailand is bound by the international sanctions imposed last October against North Korea by the United Nations in response to Pyongyang’s exploding an atomic bomb.

According to official Thai statistics, the gold and first consignment of silver were shipped to Thailand before the UN sanctions were imposed. But there is nothing illegal in North Korea exporting precious metals, unless, of course, the income from the sale can be tied directly to the country’s controversial weapons programs, which anyway would be extremely hard to prove.

Untapped riches
North Korea’s gold and silver mines remain largely untapped. According to Tse Pui-kwan, a Chinese-American chemist who joined the US Bureau of Mines in 1990, North Korea has significant deposits of copper, gold, graphite, iron, lead, magnesite, tungsten and zinc. When the Cold War ended and North Korea lost large amounts of foreign aid from both the Soviet Union and China, its mining industry fell into disrepair and extraction activities sharply declined.

But with new foreign cooperation, production has resumed, which the recent exports to Thailand clearly demonstrate. North Korea’s main gold mine is in Unsan county in North Pyongan province, about 150 kilometers north of Pyongyang. It was originally opened by a US firm in 1896, when Korea was still an independent and unified kingdom, and was later taken over by a Japanese company when the peninsula became a colony ruled by Tokyo in 1910.

Nearly a century later, consultants from Clough Engineering of Australia in 2001 inspected the same mine under the sponsorship of the United Nations Office for Project Services. They estimated that Unsan held 1,000 tons of gold reserves, which if true would make it one of the world’s major gold mines. Silver is also mined in the same area, while iron ore and magnesite are found in North and South Hamgyong provinces in the northeast.

North Korea’s extraction techniques are sometimes controversial. According to witnesses interviewed by the US Committee for Human Rights in North Korea for its 2003 report “The Hidden Gulag: Exposing North Korea’s Prison Camps”, there is a gold-mining labor camp near Danchun in South Hamgyong province, where thousands of prisoners are being held and forced to work under abysmal conditions.

In that same report, several witnesses claimed that “some of the mine shafts dated back to the early days of the Japanese occupation of Korea in the early 1900s. Accessing the veins of minable gold required descending and, later, ascending a wooden staircase 500 meters in length, using gas lanterns for light. Deaths from mining accidents were a daily occurrence, including multiple deaths from the partial collapse of mine shafts.”

The first attempt to modernize North Korea’s gold-mining industry was made by an Italian financier and former Foreign Ministry official, Carlo Baeli, who traveled to the country in the early 1990s and claims to be the first Westerner to do business with Pyongyang since the Korean War. He later wrote a book called Kim Jong-il and the People’s Democratic Republic of Korea, which was published in Pyongyang in 1990, obviously with official permission as it was printed by the state-owned Foreign Languages Publishing House.

Apart from painting a flattering portrait of the North Korean leader, the book describes Baeli’s first trip to Pyongyang in 1990, of which he wrote, “We were interested in investing in the mining industry, mainly in the extraction of gold and granite.” Baeli later signed a contract for a loan of $118 million to purchase mining equipment, and the goal was to resurrect no fewer than six gold mines across North Korea. The money was to be provided by international banks such as Midland Bank and the Naples International Bank. He also arranged for the mining equipment to be shipped from Italy.

But heavy flooding in the mid-1990s damaged both the equipment and the mines and, according to a 2006 report in Forbes magazine, Baeli today works as an adviser to the Pyongyang government at a tire-recycling plant. The car and truck tires are imported from Japan, get ground into granulate in North Korea, and are sold to China for road resurfacing, car mats and shoe soles. A lucrative business, perhaps, but not quite the golden dream Baeli had when he first arrived in Pyongyang nearly 17 years ago.

Another unusual partner in North Korea’s gold trade may have been the late Philippine dictator Ferdinand Marcos. In August 2001, the right-wing South Korean newspaper Munhwa Ilbo published a story claiming that Marcos in September 1970 had deposited 940 tons of gold bars at a Swiss bank in the name of the late North Korean dictator, Kim Il-sung. The report came from a former Marcos aide, and Munhwa Ilbo carried a copy of the bank-account certificate on its front page. The alleged gold bars were part of what a Japanese army general had looted from Asia during World War II, Munhwa Ilbo claimed.

That report was never independently confirmed, but it nevertheless reflects the mystique and speculation that still surround North Korea’s gold industry – and how little the outside world actually knows about it.

Financial pressures
When the US took action against Banco Delta Asia in Macau in September 2005, labeling it a “primary money-laundering concern” for North Korean funds, very little evidence to substantiate the charges was ever produced. North Korea lost $24 million when the accounts it held with the bank in the name of a front company, Zokwang Trading, were frozen. Zokwang, which had been operating in Macau for decades, also closed its office and relocated to Zhuhai province across the border in China proper.

The action against Banco Delta Asia, a privately owned bank that the Macau government later had to prop up to prevent it from collapsing, was the second move against North Korea’s assets abroad. In a much less publicized action, North Korea’s only bank located in a foreign country – the Golden Star Bank in Vienna – was forced to suspend its operations in June 2004. The Golden Star was 100% owned by the Korea Daesong Bank, a state enterprise headquartered in Pyongyang, and was allowed to set up a branch in the Austrian capital in 1982.

For more than two decades, Austrian police kept a close eye on the bank, but there was no law that forbade the North Koreans from operating a bank in the country. Nevertheless, Austria’s police intelligence department stated in a 1997 report: “This bank [Golden Star] has been mentioned repeatedly in connection with everything from money-laundering and distribution of fake currency notes to involvement in the illegal trade in radioactive material.”

Eventually the international pressure to close the bank became too strong. Sources in Vienna believe the US played an important behind-the-scenes role in finally shuttering Golden Star’s modest office on 12 Kaiserstrasse in the Austrian capital. Until then, Vienna had been North Korea’s center for financial transactions in Europe and the Middle East. Visitors to North Korea have noted that euro coins in circulation in the country – the US dollar is not welcome in Pyongyang – invariably came from Austria. (Euro notes are the same in all European Union countries, but coins designate individual member countries.)

Last October, in response to Pyongyang’s nuclear tests, Japan froze a dollar-denominated account that North Korea’s Tanchon Commercial Bank held with an unnamed Japanese bank. The account had a balance of $1,000 and had not been active for nearly a decade, so the move was mainly symbolic: to demonstrate to North Korea that it cannot use banks in Japan for any deposits, big or small.

So it is hardly surprising that North Korea is looking for new ways to manage and maintain its international business interests and for new partners when it is increasingly locked out of most foreign countries. That is where Thailand apparently comes into the picture.

In 2004, trade between Thailand and North Korea for the first time overtook trade between Japan and North Korea. Previously, a string of North Korean-controlled front companies, managed by the Chosen Soren, or the Pyongyang General Association of Korean Residents in Japan, had supplied North Korea with computers, electronic goods and other vital items.

In 2003, North Korea’s total trade volume to Japan was just over $265 million and fell even lower in 2004. At the same time, trade between Thailand and North Korea rose to more than $331 million in 2004. Two-way trade between Thailand and North Korea totaled $328 million in 2005, with Thai exports to North Korea amounting to $207 million and North Korean imports to Thailand totaling $121 million.

During January-November 2006 – the latest statistics available from the Thai Customs Department – trade totaled about $345 million, with Thai exports accounting for $200 million and North Korean imports $145 million. Thai imports of gold and silver have pushed those trade figures higher.

North Korea’s trade with Thailand grew mainly under the previous government of Thaksin Shinawatra, who at one point proposed signing a free-trade agreement between the two countries. In August 2005, Thaksin was formally invited by Kim Jong-il to visit Pyongyang. The visit never materialized, and since Thaksin was ousted last year in a military coup, the future of Thai-North Korean relations is very much in doubt.

But gold and silver are highly fungible and North Korea apparently has lots of the commodities. It appears Kim Jong-il has for now found at least one golden path around the international sanctions imposed against his regime’s nuclear tests.

KCNA
1/11/2007

The Pyongyang Law Office, an independent corporate body, has started its operation to provide services for the solution of legal matters arising in various sectors. Ho Yong Ho, chief of the office, told KCNA that his office provides legal services upon application and assignment by foreign-invested businesses (equity or contractual joint ventures and wholly-foreign owned enterprises) and Koreans in overseas as well as by the institutions, establishments, organizations and citizens at home.

As for the categories of services, he said:

It introduces the laws and regulations of the DPRK on foreign-related matters, Kaesong Industrial Zone, Kumgangsan Tourist Zone and others.

It also holds legal consultations concerning the selection of the investment project, establishment and operation of foreign businesses, dissolution and bankruptcy of businesses, concerning documents of legal nature including feasibility study reports and memorandum of association, concerning trade, transport, finance, insurance, intellectual property, real property and concerning civil law relations between corporate bodies, corporate body and individual and so on.

Legal services are offered on the principle of fairness, promptness and legality and on the basis of the facts, laws and contracts, while the service performer is held accountable before the party concerned and the law for the service offered.

Application for the legal service may be made in person or written form, or by means of communications device. Foreign investors are well advised to consult the office prior to their investment in the DPRK, which will prove a wise choice for the guarantee of their investment security.

Daily NK
Han Young Jin
1/10/2007

“North Korea’s Idolization – 40% of National Budget”
Enshrining Kim Il Song’s body at Kumsu Mountain Mausoleum – $890m

[edited-I shortened it a bit and corrected the author’s cinfusion of Kim Jong Il with Kim il Sung]

As Kim Jong Il made his appearance on the scene as successor in the 70’s, within 10 years the entire nation was covered with statues, and even today construction has not stopped.

Recently, historical monuments to Kim Jong Il’s great deeds have been constructed. at Jakangdo Weewon Electric Power Plant, North Pyongan Province Changsong County, Yupyong; South Hamkyong Province Yonpo; North Pyongan Province, Hyangsan County, Sangso-ri; and Yomju County Yongbok-ri, Bakchon County, Dansan-ri.

At recently constructed monuments, mosaics of Kim Chong Sok (Kim Jong Il’s birth mother) made of colored glass, tiles, and natural stone are prevalent.

North Korea’s Kim Jong Il is not wasting money worthlessly by creating this idolization propaganda. The reason that the construction of these monuments has not stopped, even during a period of economic crisis, is because his intention is to use the vulnerabilities of citizens and young people to induce a spirit of sacrifice as they gaze on the Great Leader and the General (Kim Jong Il)

Of course, although among adults there are not many who like Kim Jong Il, he is the leader of the country and is still going strong, the intention is to arm the youth with a way of thinking that tells them it is wrong to betray the General.

140,000 Idolization Propaganda Items

The most representative of all of the idolization propaganda is [Kimil sungs] resting place at the Gumsusan Masoleum.

In addition to the Masoleum, if you include the entire collection of each type of Kim il Sung idolization statues, Revolutionary Spirit Institutes, Historical Places, Battlefields, On-the-Spot Guidance Memorials, Eternal Towers, Slogan Boards and Engraved Slogans, and (the Kim) family’s idolization propaganda materials, the figure reaches about 140,000.

There are about 70 statues of [Kim il Sung] nationwide, erected on the hill at Mansudae and at each Province location. While there are [Kim il Sung] statues in the gardens of each National Security Agency building, there are Kim Father and Son plaster figures at each of the Research Institutes.

Nationwide, there are 200 Kim Father and Son Research Institutes; one large scale facility in each city and county, one each at national government and cabinet level agencies, and one at each of the city and county offices subordinate to the People’s Safety Agency, Regional Public Security Office, and the National Security Agency have been constructed. The size, furnishings, and maintenance of these institutes are better than that found in museums in the South.

Additionally, although small in size, Kim Father and Son Research Institutes can be found at each village and labor district. As there are about 30 villages and labor districts in each city-county, nationwide there are about 6,000 (200 X 30 = 6,000) of these institutes. The condition and furnishings of these buildings are the best in North Korea.

In the villages or labor districts, one of these institutes can be found at each subordinate farm, large operational team, 2nd Class and higher agricultural enterprises, and at each North Korean Army battalion and larger size unit. Taking these into account, nationwide there appear to be tens of thousands of these Kim Father and Son Institutes.

In the countryside, one can find representative idolization and propaganda figures nationwide in the construction of Eternal Towers and Jongil Peaks at Kumgang Mountain, Myohyang Mountain, etc., and slogans idolizing Kim Father and Son can be found on natural rocks.

The Eternal Tower found at the center of every province, city, county, and labor district nationwide, is commonly referred to as the “Longevity Tower.” The tower was inscribed with “We respectfully wish for our Great Leader’s longevity,” however, after Kim Il Song’s death in July of 1994, the inscription was changed to “”The Great Leader is with us forever.”

During 1996-1997, when millions starved to death, the citizens complained loudly about the importation of granite and special cement from overseas for use in the construction of these towers.

Constructing Idols with Special Materials Imported from Overseas

The statues and gypsum figures found at the Kim Father and Son Institutes, as well as other art forms are created and maintained by Art Creation Companies located in each of the Provinces, including the Mansu Dae Creative Company, and the April 15 Cultural Creative Team.

Within the Mansu Dae Creative Company is separated by categories consisting of the Arts and Crafts Creative Team, the Business Art Creative Team, the Engraving Art Creative Team, the Cinema Creative Team, the Statue and Gypsum Creative Team, and the Chosun Paintings Creative Team, and specializes in creating symbols used to idolize Kim Father and Son.

Creations in the image of Kim Father and Son are made by Creative Branch Number 1. No one other than those assigned to Creative Team Number 1 can manufacture this type of art. Those assigned to this team have received special certification that allows them to draw the images of Kim Father and Son, only after having passed a political test and receiving certification from the Party, and certification of their skill.

While there are about 500 people working in the Mansu Dae Creative Company, the Art Creation Companies in each of the Provinces have about 30 in residence propaganda agitators in each of the cities and counties. The Special Finance Branch of the central government provides unlimited funding to cover the costs required to manufacture these items, and provides appropriations for purchasing high quality goods from overseas.

Covering tens of thousands of square meters in the Baekdu Mountain area, there are Grand Monuments at Bochonbo, Samjiyon, and the Hwangjae Mountain area where several thousand people manage idolization propaganda materials.

If Kim Father and Son have been to any of the Historical Revolutionary sites or battlefield sites, a museum is constructed there. For example, if Kim Father or Son has visited a farmhouse, persons at the farmhouse are no longer permitted to enter it, and personal effects are thereafter protected and managed by experts.

When Labor Party propaganda workers come up with a new competitive idolization idea, it is a happening that calls for a humorless presentation. When visiting Songjin Steelworks, Kim Il Sung used his hand to gauge the thickness of a steel plate and the very next day this several ton piece of steel was taken to the museum and placed on display. In this way, the competition among flatterers to display their loyalty has become a reason for the sharp increase in idolization propaganda.

Damaging Nature with Carved Slogans

At spots of beauty like Baekdu Mountain and Mohyang Mountain, etc., there are colossal carved slogans on the mountainsides.

▲ At Sobaeksu Valley, the professed hometown of Kim Jong Il, the six granite letters of the “Jong Il Peak” slogan placed on the mountain at Changsu Peak weighs 60 tons each and were put in place by helicopter.

▲ At Hyangno Peak on Mount Gumgang, the letters in the mountainside slogan “Chosun’s Famous Gumgang Mountain Is The World’s Famous Mountain. Kim Il Sung – September 27, 1947,” are 20 meters high, 16 meters wide with stokes of each character 3 meters, and a depth of 1 meter.

▲ On the rock at Mohyang Mountain’s Yusan Waterfall, the letters in the slogan “The Comrade Great Leader Kim Il Sung Is With Us Forever – July 8, 1994,” are 3 meters high, 2.3 meters wide and the letters “Kim Il Sung” are 3.2 meters by 2.5 meters.

▲ The letters at Gumgang Mountain Manpokdong and Bopguidong waterfalls reflecting “The Great Leader Kim Il Sung Is With Us Forever – July 8, 1994,” are 8 meters high and 5 meters wide.

▲ The engraved letters at Gumgang Mountain’s Waegum River Guryong Waterfall that reads “Chosun! Let’s Boast of our 5,000 Year History – Honored to Have Escorted the Comrade Great Leader Kim Il Sung – July 8, 1994,” are 4 meters high and 3 meters wide and the letters at Gumgang Mountain Gukji Peak saying “Hangil’s Female General Kim Chong Suk,” are 5 meters by 6 meters.

▲ Baekdu Mountain’s Hyangdo Peak’s “Baekdu Mountain – The Revolution’s Holy Mountain – Kim Jong Il February 16, 1992,” is done in embossed white lettering so that when it snow they won’t be covered.

▲ Gumgang Mountain’s Oknyo Peak lettering that reads “Gumgang Mountain is Chosun’s Driving Spirit – Kim Jong Il,” is 11 meters high and 8 meters wide.

In addition to this, Kim Father and Son idolization slogans on trees and engravings can be found in uncountable numbers at every well know place and tourist spot across the nation.

Daily NK
Kim Yong Hun
12/25/2006

Oh Kwang Chul, president of the Korea Trade Bank (NK) and chief delegate of North Korea in ‘Banco Delta Asia financial sanctions working group,’ was once caught for smuggling 2 million dollars in France in 1992.

According to the Donga Ilbo’s report on February 12, 1993, Oh, director at the Chosun Foreign Trade Bank’s Paris branch at that time, was carrying 2 million dollars cash in a traveler’s bag at Paris Charles de Gaulle international airport in October, 1992, when French customs caught Oh and took him into custody.

In 1992, French regulation on foreign currency required prior-declaration for carry out of more than fifty thousands francs. Oh violated the rule and paid two hundred thousands dollars fine.

A former defector Oh, who had worked in North Korea’s trade and finance departments, confirmed the fact that president Oh had served for the North Korean state bank in Paris. “O” knew president Oh well and described him as one of the most talented bureaucrats in North Korea’s trade and financial affairs, along with Paik Hyun Bong chairman of the Foreign Economic Cooperation Committee and Kim Hyung Nam, head manager of Chollima Steel Kombinat.

President Oh is born in 1959, graduated from National Economics Institute in Pyongyang and studied in Russia. He was promoted to the Korea Trade Bank’s after 2000, in a wave of shift in generation in the government.

Oh was elected representative of the Supreme People’s Assembly in 2003 and participated in the UN Conference on Trade and Development in Geneva, Swtizerland in 2005.

Korea Trade Bank provides financial services for foreign trade in North Korea, such as settlement, foreign currency exchange, certification of payment for trade companies and decides exchange rates.

Yonhap
12/24/2006

Chinese firms have bought a controlling stake in one of the largest copper mines in North Korea, industry sources said Sunday.

Sources familiar with business cooperation between North Korea and China said Hebei-based Luanhe Industrial Group and another privately owned company signed a deal that gives the firms control over Hyesan Youth Cooper Mine in Yanggang Province.

Joong Ang Daily
12/19/2006

Despite United Nations sanctions aimed at preventing the North Korean government from buying luxury goods for its ruling class, government sources here said a North Korean trading company is still busy providing Kim Jong-il loyalists with their perquisites.

Tian Ming Trading Company, in the center of this former Portuguese enclave now with the same China-affiliated status as Hong Kong, says its main business line is carpets, and little more. Three office workers said there were no North Koreans at the company and that it has never traded with North Korea. The company’s president was out of town on business, they said.

But a source with close ties to the trading economy here said that Park Su-dok, a 53-year-old North Korean, is in Macao and obtained a visa as an employee of the company.

Another source said, “Tian Ming is a joint venture by North Korean and Hong Kong investors, and its main business is buying luxury goods from Hong Kong for shipment to North Korea.” He added that Tian Ming’s president, a Hong Kong resident, is buying luxury watches, gold products and expensive liquor at North Korea’s request, using a Hong Kong branch office for the purpose.

Other Macao government officials said 18 North Korean firms were registered in Macao as of late November, and 115 North Koreans carry Macao visas as employees. Twenty have become Macao citizens, they added.

Since Washington threatened to impose sanctions on Banco Delta Asia here, allegedly for helping North Korea launder cash from its alleged dubious business lines, some of those companies have shut down. Ten are still in limited operation, however, these government sources said.

Separately, a South Korean banker in Hong Kong told the Joong-Ang Ilbo that a North Korean businessman had visited him in an attempt to sell gold bars through one of the South Korean bank branches in Hong Kong.

The banker reportedly spurned the overture, although the transaction would not have violated any South Korean laws or regulations on North-South dealings. He said he simply did not want to get involved in such a deal given the international attention being paid to commercial dealings with North Korea. The banker suggested that the offer may have been a sign of the foreign currency problems North Korea is facing because of the UN sanctions and U.S. pressure on financial dealings with North Korea.

Banco Delta Asia has said that between 2003 and 2005, it had sold 9.2 tons of gold bars that it had purchased from the North, where gold production is estimated to be about 25 tons per year, mostly for export.

Wall Street Journal
12/18/2006
Gordon Fairlcough, p.A1

Close-Out Sale: North Korea’s Elite Shop While They Can

A North Korean businesswoman with heavy makeup and a bouffant hairdo studied herself in a mirror as she modeled fur-lined leather coats at a small store in [Dandong, China] this frigid northeast border city.

During a three-day excursion late last month, the woman also tried on shoes and looked at large-screen television sets before buying furniture and fresh fruit and heading home to Pyongyang, North Korea’s capital city.

The United Nations has called for a crackdown on luxury-goods shipments to North Korea as a way of pressuring the country to drop its atomic-weapons programs, which came under new fire after an October nuclear test.

If anything, the uncertainty about the flow of fancy goods appears to have whetted the appetites of some privileged North Koreans — whose impoverished country cultivates a Spartan socialist image.

In Dandong, North Koreans, many wearing lapel pins with a picture of North Korea’s founding dictator, Kim Il Sung, stroll through hotels and department stores. Signs are often written in Korean, with storekeepers advertising computers, karaoke machines and the erectile-dysfunction drugs Viagra and Cialis.

A few North Koreans have bought new cars at a Toyota dealership near the Dandong customs checkpoint, according to a salesman. One man paid about $50,000 in cash for a luxury sedan.

Gold is also gaining a following. Wang Xiaoju, a saleswoman at the jewelry counter at Xin Yi Bai Department Store, says North Korean women come in nearly every day, mostly to buy gold chains and other gold jewelry.

Women from the North also are frequent visitors to a riverfront spa, favoring milk baths and massages, according to staff there. A saleswoman at the Xin Yi Bai L’Oreal counter says North Koreans are regular customers. Among the big sellers: body sculpting cream for women who want to look thinner.

In the first 10 months of this year, Chinese exports of fur coats and fake furs to North Korea soared more than sevenfold from the year-earlier period, according to Chinese Customs figures. Exports of televisions and other consumer electronics were up 77%, while perfumes and cosmetics were up 10%.

Some North Koreans are even buying real estate in Dandong. One high-rise building, where three bedroom apartments go for nearly $100,000 each, has sweeping views of a decrepit North Korean village with crumbling cinder-block houses across the border. A North Korean buyer recently purchased one of the units with cash, according to the building’s sales agent.

“Life is quite comfortable” for senior party members, military officers and traders, who have prospered despite widespread shortages of food, fuel and medicine in North Korea, says Pak Yong Ho, a former high-ranking North Korean official who defected to South Korea two years ago.

North Korea’s Communist Party has long had overseas agents in Macau, Switzerland and elsewhere dedicated to maintaining supplies of luxuries for top military and government personnel, according to former North Korean officials. Their jobs, in the wake of the U.N. sanctions, could get much harder.

The U.N. so far has let individual countries decide which high-end products to block. Washington has barred U.S. companies from selling everything from iPods to Harley-Davidson motorcycles. But that move was largely symbolic, as there is very little direct trade between the U.S. and North Korea.

Japan, which has for decades been a source of luxuries for the North Korean ruling class, has banned exports of 24 fancy products from caviar and gems to watches and art.

But the key to whether the sanctions will work is in the hands of China, North Korea’s largest trading partner.

A steel-girder bridge here spans the Yalu River, connecting Dandong to the city of Sinuiju in North Korea. That has helped Dandong, whose name means “Red East,” become a popular shopping destination for North Koreans with money. It is unclear how much that will change because of the sanctions.

So far, China hasn’t disclosed what specific kinds of high-end exports — TVs or luxury automobiles, for instance — it will block. A Chinese foreign-ministry spokeswoman, Jiang Yu, has said the list “should not be allowed to impact normal trade transactions” between the socialist neighbors.

North Korean leader Kim Jong Il, whose own taste for expensive French cognac and other imported luxuries is well known, uses money and goods liberally in an effort to buy the loyalty of the elite, according to U.S. and South Korean officials. Some of these officials say that depriving the ruling class of its creature comforts could alienate them from Mr. Kim, long known as “Dear Leader.”

But many North Korea watchers and North Korean defectors doubt that the elite would revolt against Mr. Kim’s government, because their fates are so closely tied to his now. “Under this regime, the privileged have had a very good life,” says Kim Dok Hong, the second-highest North Korean official to defect. “If the regime collapses, the people they’ve mistreated will be looking for revenge.”

At the peak of the famine that killed more than a million North Koreans in the mid-1990s, Mr. Pak, the former government official, says his parents weren’t short of food. Their home had three refrigerators regularly replenished with imported provisions by the Communist Party. Mr. Pak uses a pseudonym to protect family members still in the North from government retribution.

“The elites have had more freedom to do their own business” since economic overhauls in 2002, says Yang Chang Seok, a senior official at South Korea’s Unification Ministry, which oversees relations with the North. “People have earned a lot of money from trading.”

These days in Pyongyang, members of the ruling class are ferried around in imported cars and live in well-appointed — and well-guarded — apartment complexes. Their children race around city parks on in-line skates and play American computer games.

Says Mr. Pak: “If you can afford to pay, there’s nothing you can’t get.”

Joong Ang Daily
12/14/2006

A group of South Korean ginseng farmers will plant and process the medicinal herb in North Korea in the first inter-Korean ginseng venture.

Representatives of the United Korea Ginseng Farming Association Corp., based in South Chungcheong province in South Korea, will visit Pyongyang-based Kwangmyongsong General Corp. to discuss setting up a plant in the North Korean capital, said Lee Kyeong-hoon, president of the ginseng farmers’ association.

“North Korean ginseng is the most expensive in overseas markets,” Mr. Lee said. “We expect higher profits in Hong Kong and China selling products grown in healthier soil and with traditional cultivation methods only available in North Korea.”

South Korea’s government received criticism from the opposition Grand National Party because of its support for North Korean projects like the Kaesong industrial complex after North Korea tested its first nuclear bomb on Oct. 9 and launched missiles in July.

The government rebuffed the criticism, saying the projects don’t support the North Korean weapons program.

Ginseng, a root herb mostly found in Korea, northern China and eastern Siberia, may help improve the survival of cancer patients, according to a March study by the Nashville, Tennessee-based Vanderbilt-Ingram Cancer Center.

North Korea is providing the buildings, water and electricity while the South Korean association is supplying ginseng seeds and processing facilities.