North Korean Economy Watch

Institute for Far Eastern Studies (IFES)
NK Brief No. 10-11-22-1
11/22/2010

The Chosun Sinbo reported on November 15 that North Korea has erected hundreds of cellular signal towers throughout the country, providing phone service to every province, city, and town in North Korea. According to the report, the expansion of the North’s 3G network has really taken off in 2010, and the number of subscribers within the country has grown 2.5 times in the latter half of the year, as has the available coverage area.

This initiative has focused on setting up hundreds of cell towers near major highways, cities, and industries important to economic advancement. It was also reported that industry insiders had revealed that not only towns, cities, and provinces were targeted for the expansion of cellular service, but that there was a plan to erect towers in the back country, as well, and that authorities aimed to extend service to every village in the country by next year.

To this end, the Chosun Sinbo reported, the Pyongyang-based DPRK-PRC JV Checom Joint Venture Company has set up a “flow manufacturing process and is producing hundreds of high-performance cellular phones each day” and, “Related sectors are testing new devices and actively working on a project aimed at modifying the operating software to suit the needs of North Koreans.”

The paper also reported that North Korea’s academics and scientists collaborated to develop such a system in a short time, and that the system was also integrated into the nation’s Intranet. This system is different from the previous configuration in that videos, recordings, and text messages can be sent both ways, so that the system better supports an exchange of information rather than merely a transfer.

The paper emphasized that by providing distance education service to every local academic office, city and town library, and science and educational facility, the North has enacted a state-of-the-art, nationwide education system. In addition, by providing the infrastructure for real-time interactive lectures, workers and children in every region of the country can easily pursue their education by actively participating in a wide range of lectures.

According to the Choson Ilbo:

The Agostinho Neto Center of Culture is a massive national park that the Angolan government is building on 12,000 sq. m of land in the capital city Luanda in memory of its first president. On Oct. 24, the entrance was firmly shut with a black iron gate. Through barred windows, three or four Asian workers could be seen: they are staff of North Korea’s Mansudae Overseas Project Group of Companies, which earns much-needed foreign currency for the regime from massive construction projects and monumental sculpture in the developing world.

Initially, the Agostinho Neto Center was commissioned to a Brazilian construction company, but work came to a halt until the North Koreans took over at the end of 2007.

The North Korean workers are living together in temporary wooden accommodation in a corner of the construction site. There are reportedly 100 to 120 of them in Angola. North Korea supported independence movements and civil wars of some African countries, and has been involved in some large construction projects there based on the diplomatic ties built this way. The North provided military aid to the side currently in power during the Angolan civil war and is reportedly building other parks and peace monuments in Cabinda and Huambo, one or two hours away by plane from Luanda.

The Daily NK reported North Korea has earned at least US$160 million in construction projects in Africa since 2000. A South Korean resident in Angola said, “Although North Korean workers only get minimum living cost from their government, they make additional money by working on smaller-scale projects locally when they have some spare time waiting for equipment or materials to arrive.”

One North Korean worker said, “When we go to the site for work, we sometimes get Angolan traditional congee called Fungi. It’s delicious. We eat better here than in North Korea because we can get rice from Chinese construction firms.”

In a predominantly black residential area in Luanda, there is a pharmacy run by a North Korean doctor in a shabby one-story building. “I work at a national hospital in the morning, and run this pharmacy privately in the afternoon. This is the only way I can make the ends meet,” he said.

According to a local source, there are about 180 North Korean doctors across Angola, including about a dozen in Luanda. There are also North Korean doctors in Mozambique and Congo, and some practice oriental medicine. At the pharmacy, acupuncture costs $80 for the first treatment and $40 thereafter.

Read the full story here:
N.Koreans Struggle for Hard Currency in Africa
Choson Ilbo
11/20/2010

UPDATE 2: Here is the actual Treasury Department Press Release (11/18/2010):

Treasury Designates Key Nodes of the Illicit Financing Network of North Korea’s Office 39

11/18/2010
WASHINGTON – The U.S. Department of the Treasury today designated Korea Daesong Bank and Korea Daesong General Trading Corporation pursuant to Executive Order (E.O.) 13551 for being owned or controlled by Office 39 of the Korean Workers’ Party.  Office 39 is a secretive branch of the government of the Democratic People’s Republic of Korea (North Korea) that provides critical support to North Korean leadership in part through engaging in illicit economic activities and managing slush funds and generating revenues for the leadership. Office 39 was named in the Annex to E.O. 13551, issued by President Obama on August 30, 2010, in response to the U.S. government’s longstanding concerns regarding North Korea’s involvement in a range of illicit activities, many of which are conducted through government agencies and associated front companies. Korea Daesong Bank is involved in facilitating North Korea’s illicit financing projects, and Korea Daesong General Trading Corporation is used to facilitate foreign transactions on behalf of Office 39.

“Korea Daesong Bank and Korea Daesong General Trading Corporation are key components of Office 39’s financial network supporting North Korea’s illicit and dangerous activities,” said Under Secretary for Terrorism and Financial Intelligence Stuart Levey.  “Treasury will continue to use its authorities to target and disrupt the financial networks of entities involved in North Korean proliferation and other illicit activities.”

E.O. 13551 targets for sanctions individuals and entities facilitating North Korean trafficking in arms and related materiel; procurement of luxury goods; and engagement in certain illicit economic activities, such as money laundering, the counterfeiting of goods and currency, bulk cash smuggling and narcotics trafficking. As a result of today’s action, any assets of the designated entities that are within U.S. jurisdiction are frozen and U.S. persons are prohibited from conducting financial or commercial transactions with these entities.

UPDATE 1: Here is the US Treasury Department’s web page on North Korea.

ORIGINAL POST: According to Reuters:

The United States sanctioned on Thursday two North Korean companies linked to a group it accuses of drug smuggling and other “illicit” activities to support the nation’s secretive leadership.

U.S. sanctions against North Korea aim in part to persuade Pyongyang to abandon its nuclear programs, which the United States views as a threat to its allies South Korea and Japan. The North tested nuclear devices in 2006 and 2009.

The Treasury Department’s moves against Korea Daesong Bank and Korea Daesong General Trading Corporation will freeze any assets belonging to them that fall within U.S. jurisdiction as well as bar U.S. companies from dealing with them.

Their main aim is not to block North Korean assets in U.S. banks — analysts say there are unlikely to be any — but to discourage other banks from dealing with North Korea, thereby cutting off its access to foreign currency and luxury imports.

Perks and luxuries such as jewelry, fancy cars and yachts derived from North Korea’s shadowy network of overseas interests are believed to be one of the main tools Pyongyang uses to ensure loyalty among top military and party leaders to North Korean leader Kim Jong-il.

The Treasury described the two entities as “key nodes of the illicit financing network” of Office 39 of the Korean Workers’ Party, which it accuses of producing and smuggling narcotics to earn foreign exchange for the government.

“Korea Daesong Bank and Korea Daesong General Trading Corporation are key components of Office 39’s financial network supporting North Korea’s illicit and dangerous activities,” Treasury Under Secretary Stuart Levey said in a statement.

Heroin Production?
The Treasury designated the two under a recent executive order that targets entities that support North Korea’s arms trafficking, facilitate its luxury goods purchases and engage in illicit economic activities such as money laundering, drug and bulk cash smuggling and counterfeiting goods and currency.

President Barack Obama signed the executive order on August 30 allowing the Treasury to block the U.S. assets of North Korean entities that trade in arms or luxury goods, counterfeit currency or engage in money laundering, drug smuggling or other “illicit” activity to support the government or its leaders.

When that executive order was announced, the Treasury accused Office 39 of producing opium and heroin and of smuggling narcotics such as methamphetamine.

U.S.-North Korean relations have deteriorated since Obama took office, with his aides deeply unhappy about Pyongyang’s decision to conduct nuclear and missile tests last year as well as the March 26 sinking of the South Korean corvette Cheonan.

Forty-six South Korean sailors were killed in the incident, which the United States, South Korea and other nations blame squarely on North Korea. Pyongyang denies responsibility.

In the August 30 executive order, Obama cited the Cheonan’s sinking as well as 2009 nuclear and missile tests by North Korea as evidence it poses “an unusual and extraordinary threat” to U.S. national security, foreign policy and economy.

The Obama administration has been skeptical about returning to so-called six-party negotiations with the two Koreas, China, Japan and Russia under which Pyongyang committed in 2005 to abandon its nuclear programs.

U.S. officials say they do not want to talk for the sake of talking and North Korea must show some commitment to abandoning its nuclear programs.
Read the full story here:
U.S. sanctions two North Korean entities
Reuters
Arshad Mohammed
11/18/2010

Acording to Reuters:

North Korea is facing a grain deficit of 542,000 tonnes in the 2010/11 marketing year after the government only partially provided for grain import cover, the United Nations’ food agencies said on Tuesday.

North Korea’s cereal import requirement in 2010/11 is estimated at 867,000 tonnes, while the government plans to import commercially only about 325,000 tonnes, the Food and Agriculture Organisation and the World Food Programme said .

“The mission recommended to provide some 305,000 tonnes of international food assistance to the most vulnerable population,” the FAO and WFP said in a report after a joint mission to the country.

According to the New York Times:

Despite a relatively good autumn harvest in North Korea, the reclusive communist nation remains in dire need of food aid, especially for its youngest children, pregnant women and the elderly, according to two United Nations agencies.

In a new joint report, the World Food Program and the Food and Agriculture Organization said that North Korea, even after substantial imports, would have a shortfall in staple crops — mostly rice, grains and soybeans — of more than half a million tons.

The 2010 harvest was 3 percent higher than last year, the agencies said, despite an unusually harsh winter and alternating drought and flood conditions over the summer.

But even in the best of years North Korea is unable to feed itself. Government food distribution provides only half the necessary daily calories, the report said. People are thus left to fend for themselves with small hillside plots, kitchen gardens and the buying of or bartering for food on the black market.

Aid officials have estimated that the food aid program for North Korea was 80 percent underfunded and that nearly half the country’s children are malnourished.

“I saw a lot of children already losing the battle against malnutrition,” said Josette Sheeran, executive director of the World Food Program, after a visit to North Korea earlier this month.

“Their bodies and minds are stunted, and so we really feel the need there,” she said. , Agriculture is “the main contributor to the national income” in the North, the agencies said, although its percentage of gross domestic product has declined in the past decade to 21 percent from 30 percent. A lack of foreign currency and credit, made worse by international sanctions against the regime, prevented significant imports of fertilizer and pesticides as well as tires and spare parts for farm trucks and tractors.

In remarks before the Group of 20 summit meeting in Seoul last week, U.N. Secretary General Ban Ki-moon said he had “very serious concerns about the humanitarian situation” in North Korea, “especially for the very young children.”

Mr. Ban said the South Korean president, Lee Myung-bak, had pledged to him that the South would provide humanitarian assistance to the North’s children.

…

The two U.N. agencies said their report, which was released Tuesday, was produced by teams that went to most of North Korea’s principal agricultural regions.

As the teams traveled around, the report said, “it was evident that there were no cereals in stock in the warehouses visited.”

…

Additional Information:
1. Here is a link to stories about South Korean aid provided this year. 

2. The DPRK has recently expressed skepticism over the motivations of foreign aid agencies.

3. Here is a PDF of the UN Special Report.  It is full of data and has been added to my Economic Statistics Page.

4. Here is a link to the UN report which you can read on line.

Read the full sotries here:
N.Korea faces 542,000 t grain deficit in 2010/11-UN
Reuters
11/16/2010

U.N. Urges Food Aid for North Korea
New York Times
Mark McDonald and Kevin Drew
11/17/2010

According to the Choson Ilbo:

The North Korean regime is enacting sweeping changes to the law to bolster state control. A source familiar with North Korean affairs on Tuesday said four North Korean laws covering economic planning were revised in April and laws governing management of Pyongyang were revised in March.

The revised laws, which the source claims to have seen, “show the central regime’s intention to control everything, from the economy to the daily lives of the people.” North Korea has changed or enacted at least 17 different laws since November last year, just before a botched currency reform.

The revised economic planning law deletes a phrase in Article 17, which stipulated that the economy is planned “in line with methods that are presented from lower levels.” According to the source, the regime inserted the phrase when it announced timid economic reforms in July 2001 in order to give more authority over production to individual factories and businesses. “The deletion of the phrase demonstrates the intention to retrieve that authority,” the source said.

Instead, the terms “provisional figures” and “control figures” were revived after their omission in 2001. “The term ‘provisional figures’ refers to the potential output each factory sets, while ‘control figures’ represent the actual output amount assessed by the central government,” the source said. “So the terms strengthen the centralized economic planning regulations of the past.”

In Article 27, a new clause was inserted which reads, “The planning of the people’s economy is a legal task.” The source said, “This means that the partial freedom given to individual factories over production has now been taken away completely.”

The law on the management of Pyongyang, which was revised on March 30, also stresses the role of the state. Originally, maintenance and management of the capital were up to the Pyongyang City People’s Committee. But under the revision it falls into the hands of the State Planning Committee and the Cabinet. Also, all Pyongyang residents over the age of 17 have been ordered to carry their resident identification cards at all times.

Also added were articles that bind the central government to guarantee housing and the supply of necessities for the residents of Pyongyang. This shows the clear intention of the regime to take charge of housing and goods supply. “Labor and commercial laws also contain clear intentions to bolster government control,” the source said.

Kim Yong-hyun of Dongguk University, said as conditions worsened after the failed currency reform and North Korean leader Kim Jong-il’s son has been lined up to succeed his father, “the regime seems to feel that tighter internal control is better than aggressive reform. Even if North Korea is looking to partially open up through economic cooperation with China, this will be difficult to achieve with such a conservative approach.”

The Donga Ilbo also covered the story.

Read the full story here:
N.Korea Reverts to Hardline State Control
Choson Ilbo
11/17/2010

According to Bernama:

North Korea has started to mass-produce cellular phones while trying to customize their operating systems to satisfy local needs, Yonhap news agency reported, citing a pro-Pyongyang newspaper as saying.

The report by Chosun Sinbo, run by a group of pro-North Korea residents in Tokyo and monitored in Seoul, came after Cairo-based Orascom Telecom Holding announced earlier this month that its mobile business in the communist state is rapidly expanding.

The number of mobile phone subscribers has at least quadrupled over the period of one year in North Korea, according to Orascom. The expansion doesn’t mean that the regime has eased its rules aimed at restricting the flow of information in and out of the country.

Chosun Sinbo said Monday in its report from Pyongyang that a firm known as Checom Technology Joint Venture Company has set up a “flow manufacturing process and is producing hundreds of high-performance cellular phones each day.”

Checom is a Pyongyang-based electronics and communications company, according to the Web site of Songsang Company, a Dandong, China-based firm that trades with North Korea.

Flow manufacturing is a build-to-order process aimed at minimizing inventory.

“Related sectors are testing new devices and actively working on a project aimed at modifying the operating software to suit the needs of local users,” Chosun Sinbo said.

“Central engineering rooms for mobile communications are also pushing a program to develop software for their main machines to meet the domestic environment.”

The report added that a video calling service has also been made available while “hundreds of base stations” that transmit signals have been set up across the country.

Orascom, which operates jointly with the local Koryolink, had said in its earnings report that video calling “resulted in a high level of demand, especially from the youth segment.”

North Korea first launched a mobile phone service in Pyongyang in November 2002, but banned it after a deadly explosion in the northern Ryongchon train station in April 2004, possibly out of concern that it could be used in a plot against the regime.

In 2008, the country reversed its policy and introduced a 3G mobile phone network in the joint venture with Orascom.

However, the overall “mobile penetration” remains at 1 percent in the country that has a per-capita GDP of US$1,900 and a population of 22.8 million, according to Orascom.

Read the full story here:
North Korea begins mass-producing cell phones to meet local demands
Bernama (Malaysia)
11/15/2010

According to the Choson Ilbo:

A senior researcher at North Korea’s National Academy of Sciences has been arrested on espionage charges, it emerged on Tuesday.

A high-level North Korean source quoted rumors that Kim So-in, who is believed to have been in charge of the North’s nuclear and missile development, and his family were arrested by the State Security Department and taken to the notorious Yodok concentration camp in May.

A math prodigy who received his doctorate in his early 20s, Kim was said by the state media to have been behind the supposed launch of the North’s first satellite — an event widely believed to have been a long-range ballistic missile test.

The source said Kim is accused of assisting his father Kim Song-il, a researcher at the Yongbyon Nuclear Complex, in delivering top secret documents on nuclear development to a foreign agency.

The security department is nervous because many senior officials in various areas are suspected of attempting to earn dollars by selling confidential information, with top secret documents about the regime’s nuclear and missile development being leaked abroad, the source added.

Pak Kyong-chol, an official in the Committee for the Peaceful Reunification of the Fatherland, has also recently been sent to a labor camp for spying, and Kim Won-bom, the chief of the Wonsan office of the North Korean military bureau in charge of earning hard currency, has been arrested after US$1.5 million was found at his home.

And a senior official at the Kumgang bureau of the Majon Mine has been taken into custody for stashing away $100,000 after selling confidential information in conspiracy with military officers.

Senior officials are trying to sell confidential information because of economic difficulties since the botched currency reform late last year and the Chinese government’s recent crackdown on drug and counterfeit dollar transactions.

The security services have been ordered by regime heir Kim Jong-un to look out for “unusually rich” senior officials, the source added.

Read the full story here:
N.Korea’s Chief Nuke Scientist ‘Held for Spying’
Choson Ilbo
11/10/2010

Institute for Far Eastern Studies (IFES)
NK Brief No. 10-11-8-1
11/8/2010

North Korea held an extended meeting of the entire Cabinet in order to discuss the types of projects to be pursued in the last quarter of the year, and to strategize on how these projects should be implemented.

On October 28, the CHOSUN SHINBO reported on an article in the MINJU CHOSUN, which is under the control of the North Korean Cabinet. According to the article, efforts are being made to strongly construct the foundation upon which exemplars of the ‘military-first’ era will be erected. Production lines and facilities in all realms of the People’s Economy need to come into alignment with CNC, and efforts need to be made toward modernization, environmental protection, and reforestation. In particular, the Cabinet has pledged to decisively improve city management and restore socialism in cities and agricultural villages. Efforts will be focused on restoring socialist principles to economic management and ensuring that the centrally planned national economy is implemented.

The newspaper also reported that the North’s Cabinet held discussions on how to successfully fulfill all the goals set for the third quarter while creating a strategy to meet all of the targets set for the annual People’s Economy. It is unknown exactly when this meeting was held, but Premier Choi Yong-rim and other Cabinet members were all in attendance, as were city and town People’s Committee representatives, committee members from factories and farming communities, economic planners, and managers from critical factories and organizations.

As officials discuss economic reforms, the sixth annual autumn Pyongyang International Trade Fair was held from October 18-21, and it saw a greater Chinese presence than the thirteenth annual spring trade fair held last May. This could be the result of Kim Jong Il’s August visit to China. According to the newspaper, seventeen countries were represented by over 140 companies (48 from North Korea, 93 from abroad) — This was three countries and over twenty companies more than were at the spring fair. India participated for the first time this fall.

An official from the trade fair told the newspaper that the increased participation from Chinese companies was a direct result of Kim Jong Il’s recent visit to China’s northeastern region and the improved economic relations between Pyongyang and Beijing that came out of that visit. From machinery and equipment to steel products, electronic goods and light industrial products, food, pharmaceuticals, traditional herbal medicines and chemical products, over 57,000 products in over 2,300 different categories were on display. This is more than 600 categories of goods not seen last year.

Foreign companies participating in the fair signed contracts with North Korean offices for sales, technology exchanges, joint ventures, and investment opportunities, building on the ‘Introduction and Negotiations on the Investment Environment of the Democratic People’s Republic of Korea’ held on October 18.

Michael Rank

North Korean officials have claimed that there are 500 “house churches” where Christians can worship in a country that has been widely accused of ruthlessly persecuting believers, sometimes to death.

Two British parliamentarians who visited North Korea late last month quote officials of the Korean Christian Federation as making the claim, although they note that “other sources question this and we were unable to verify these figures.”

At Bongsu Protestant church in Pyongyang (satellite image here) they were told that 20,000 Bibles and hymnals had been printed and that there were 13,000 Protestants in North Korea.

Lord Alton and Baroness Cox visited a new Protestant seminary in Pyongyang with 12 students and 10 teachers, as well as Catholic and Russian Orthodox churches in the capital.

In their report, Building Bridges, Not Walls they describe how seminary students “pursue a five-year course and are then admitted to the Korean Christian Fellowship as pastors upon graduation.”

“The Protestant church expressed a desire to establish links with Protestant, particularly Presbyterian, churches in the UK, and appears to receive support from Korean-American Christians in some parts of the United States.”

Alton and Cox, both devout Christians, said North Korean officials had reiterated an invitation for the Archbishop of Canterbury, Dr Rowan Williams, to visit Pyongyang. The invitation was first extended by the speaker of the Supreme People’s Assembly, Choe Tae-bok, when he visited Williams at Lambeth Palace in London in 2004 and whom Alton and Cox met again last month.

The invitation seems to have caused some embarrassment to the archbishop. A spokeswoman for Dr Williams told NKEW she had no knowledge of it and failed to respond when asked to check further into the matter.

Alton and Cox, who were paying their third visit to Pyongyang, said Choe had accepted an invitation to visit Britain again next year.

The group also visited the Supreme Court, where “it was evident that the defendant in a trial is already deemed a suspect, as reflected in the structure of the courtroom in which the defendant is placed in small, wooden enclosure, seated on a small, very uncomfortable stool, in contrast to more comfortable chairs for others.

“The Senior Law Officer confirmed to us that the principle of innocent until proven guilty does not apply in the North Korean judicial system.

“‘Most defendants are those whose crime has already been revealed, before indictment, by investigation by the police. When a person comes to court, we do not think of them as innocent,’ he said.

“Furthermore, it appears that the legal defence available for the defendant would only become actively involved in the process once the ‘suspect’ is brought to trial and all the relevant evidence has been prepared.

“We would urge the DPRK authorities to ensure that the accused receives legal assistance before the trial stage,” Alton and Cox say in their report.

They frequently asked whether they, or any foreigners, could visit a prison, including the notorious Yodok prison camp, and were told emphatically “no”.

Alton and Cox also discussed security issues with North Korean officials, including Vice Minister for Foreign Affairs Kung Sok-ung.

who told them that his government’s position on peace and security “remains unchanged – to settle the issues through negotiation and dialogue, and to secure stability through peaceful means.”

There do seem to be signs of internal change, however. Senior North Korean officials told the group that the country is entering a period of “momentous change”, and the report notes that “It is also interesting that the emphasis in North Korea has changed, from a focus on its ‘Songun’ or ‘military first’ policy, to a new objective of establishing a ‘great, prosperous and powerful nation’ by 2012.

“This was set out in a communiqué by the Workers’ Party of Korea on 11 October, marking its sixty-fifth anniversary, in which it spoke of building a ‘dignified and prosperous’ nation.

“This change of emphasis is very welcome, and presents the international community with another important opportunity.”

“We believe the time has come for North and South Korea and the United States, with assistance from others in the international community including the United Kingdom (as a former combatant nation which saw 1,000 of its servicemen lose their lives in the Korean War), a neutral country such as Switzerland or Sweden (who were among the countries given responsibility in 1953 to oversee the armistice), and, above all, China, to work to find ways to turn the armistice into a permanent peace.

“A Beijing Peace Conference at which North and South could resolve their differences should be convened once the necessary preliminary brokering has been completed.

“We also believe grave human rights concerns should be discussed through a process of dialogue and constructive, critical engagement, in parallel with a resumption of the Six-Party Talks concerning security, in the same way as the Helsinki Process was established by President Ronald Reagan and Margaret Thatcher with the Soviet Union. It is time for peace, and it is time for Helsinki with a Korean face”.

They add that “DPRK officials made it clear that a permanent peace, and reunification of Korea, is their priority, and they emphasised their commitment to negotiating a peaceful resolution through dialogue.”

For an interview with Baroness Cox after her previous visit to Pyongyang in 2009 click here.

According to the Daily NK:

It has been confirmed by The Daily NK that North Korea failed in a recent attempt to import beef from New Zealand for the purpose of providing special gifts to cadres on Kim Jong Eun’s birthday, January 8, after the plan ran afoul of the New Zealand government, which froze the funds.

According to a source from North Korea today, “$170,000 remitted by ‘Myohyang Bureau’ to a New Zealand bank in October to import parts for Japanese tourist buses and beef has been frozen by the New Zealand authorities.”

The source added, “The New Zealand authorities are investigating whether or not the money is related to (North Korea’s) drug dealing.”

The source explained, “The beef is for special distribution to cadres on the Youth Captain (Kim Jong Eun)’s birthday, while the parts of Japanese buses are to repair buses operated by the Tour Bureau,” adding, “Myohyang Bureau is alarmed that there might be a snag in Comrade Youth Captain’s birthday special distribution.”

In North Korea, workplaces have already started to prepare presents for Kim Jong Eun’s birthday. There are two types of presents: the first is from cadres to Kim Jong Eun; and the latter is special distribution to cadres in Kim Jong Eun’s name. However, even though the special distribution is like a gift handed out by a monarch, factories and Party organs have to prepare it. According to the source, the Myohyang Bureau’s duty this time is to supply beef.

The Myohyang Bureau is directly in charge of tour events including Arirang performance-related tours and Mt. Baekdu and Geumgang tours. It sends the profits from these businesses involving foreign tourists to the No. 39 Department of the Central Committee of the Party.

The source explained further, “Due to Japanese sanctions against North Korea, the Tour Bureau has not been able to obtain parts for Japanese buses, so the Myohyang Bureau asked a New Zealand business partner to obtain them for them. In doing that, they also asked for beef.”

“Since the Myohyang Bureau sent the money via a secret bank account held with a bank in Latvia to a bank in New Zealand, it incurred the suspicion of the New Zealand government. Money is still money, but the bigger problem is to expose the Latvian account.”

This is the first time that a Latvian account has been linked to North Korea, adding to known secret accounts in Switzerland, China, Macau and the Caribbean.

The source said, “The Myohyang Bureau opened the account in the name, ‘RUSKOR International Company Ltd’ in a bank of Latvia,” adding, “The account name is the connecting of the words Russia and Korea.”

“Gift rations” have been in the news a lot lately.  Links to previous posts about the DPRK’s “gift rations” can be found here.

Read the full story here:
North Korean Funds for Beef Frozen by New Zealand
Daily NK
Park In Ho
11/5/2010