North Korean Economy Watch

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Here is a PDF of the  press release.

The UN panel responsible for implementing UNSC resolutions pertaining to the DPRK has written a report (which is not yet publicly available) claiming that the DPRK continues to evade UN sanctions. According to two different Bloomberg stories :

“The Democratic People’s Republic of Korea has established a highly sophisticated international network for the acquisition, marketing and sale of arms and military equipment,” said the report by a Security Council panel established in June to assess the effectiveness of UN sanctions.

The report said arms sales banned by the UN “have increasingly become one of the country’s principal sources for obtaining foreign exchange.” North Korea has used “reputable shipping entities, misdescription of goods and multiple transfers” to hide arms smuggling, according to the report, which has been circulated within the Security Council and not yet publicly released.

…

North Korean companies and banks that have been barred from foreign transactions are circumventing the prohibition through subsidiaries, according to “indications” from some member governments, the report said. The Korea Mining Development Trading Corp., cited in April for violations of UN sanctions, “continues to operate through its subsidiary companies,” according to the report.

The Kwangson Banking Corp. and Amroggang Development Bank substitute for or act on behalf of Tanchon Commercial Bank and the Korea Hyoksin Trading Corp., the UN panel said authorities in unspecified countries have determined. The U.S. earlier this year froze the assets of the Kwangson and Amroggang banks.

The UN panel said North Korea is believed to have exported arms to countries in Africa, Southeast Asia, the Middle East and Latin America. Only a “very small percentage” of North Korea’s illegal arms trade has been reported or discovered, the report said.

An example of attempted trade in contraband was reported in August by the United Arab Emirates, which seized a ship carrying North Korean-manufactured munitions, detonators, explosives and rocket-propelled grenades bound for Iran.

According to Reuters:

The Security Council imposed the sanctions, including arms embargoes, asset freezes and travel bans, in resolutions in 2006 and 2009, in response to North Korean nuclear tests and ballistic missile launches. This year for the first time, it listed eight entities and five people who were being targeted.

A report obtained by Reuters on Wednesday was the first to be written by an expert panel set up by the Security Council in May to vet implementation of the sanctions. It is due to be discussed in closed-door council consultations on Thursday.

The six experts said there were several different techniques employed by the isolated communist state to conceal its involvement.

“These include falsification of manifests, fallacious labeling and description of cargo, the use of multiple layers of intermediaries, ‘shell’ companies and financial institutions to hide the true originators and recipients,” the report said.

“In many cases overseas accounts maintained for or on behalf of the DPRK are likely being used for this purpose, making it difficult to trace such transactions, or to relate them to the precise cargo they are intended to cover.”

The experts said North Korea likely also used correspondent accounts in foreign banks, informal transfer mechanisms, cash couriers “and other well known techniques that can be used for money laundering or other surreptitious transactions.”

On illicit arms shipments, the report raised the case of the seizure of a “substantial cargo” of weapons from North Korea. It was apparently referring to arms seized in August by the United Arab Emirates from an Australian-owned ship.

The report also said the North continued to import luxury goods intended for its leadership, despite a U.N. ban. It noted that in July, Italy blocked the sale of two yachts that police said were destined for North Korean leader Kim Jong-il.

The panel, which began work just two months ago, said it would work on recommendations to the Security Council for further firms and individuals to be put on the sanctions list as well as goods whose import by North Korea should be banned.

It also promised more exact definitions of small arms — the only kind of arms Pyongyang can import under existing sanctions — as well as of luxury goods.

Marcus Noland has cleverly named the strategy of tracking down North Korean military financiers and arms dealers “Wac-a-mole“.

Read the full stories below:
North Korean Global Arms Smuggling Evades Ban, UN Panel Says
Bloomberg
Bill Varner
11/18/2009

North Korea Arms Trade Funds Nuclear-Bomb Work, UN Panel Says
Bloomberg
Bill Varner
11/19/2009

North Korea maneuvers to evade U.N. sanctions: experts
Reuters
11/18/2009

Blane Harden wrote an excellent article for the Washington Post on the KPA takeover of state-owned trading companies and how these companies are increasing natural resource exports to China.  (As an aside, China has just recently ceased publishing North Korean trade data).  This is interesting because just a year-and-a-half ago we were discussing Jang Song-thaek’s anti-corruption campaign which was supposed to be closing down KPA companies and making them reapply for export licenses with the Ministry of Foreign Trade (meaning the WPK could start dipping into the revenue pools).

Quoting from Mr. Harden’s article:

The potential profits are eye-popping: China is one of the world’s most voracious consumers of raw materials, and North Korea’s mineral reserves are worth $5.94 trillion, according to an estimate by South Korea’s Ministry of Unification. China has been critical of North Korea’s nuclear program and missile tests, but it also has vastly increased its economic ties with Kim’s government.

Kim is increasingly creaming off a significant slice of Chinese mineral revenue to fund his nuclear program and to buy the loyalty of elites, according to “North Korea, Inc.,” a recent report by the United States Institute of Peace, a Washington-based group funded by the U.S. Congress.

The report echoes the views of North Korean analysts in South Korea, Japan and the United States, who say the military has elbowed out other ministries and the Korean Workers’ Party to take control of exports that earn hard currency. The military is also sending trucks to state farms to haul away as much as a quarter of the annual harvest for its soldiers, analysts say.

“The military is by far the largest, most capable and most efficient organization in North Korea, and Kim Jong Il is making maximum use of it,” said Lim Eul-chul of the Institute for Far Eastern Studies in Seoul.

North Korea is perhaps the world’s most secretive and repressive state, but it makes no attempt to hide the ubiquitous role the military plays in the daily lives of the country’s 23.5 million people. Soldiers dig clams and launch missiles, pick apples and build irrigation canals, market mushrooms and supervise the export of knockoff Nintendo games. They also guard the country’s 3,000 cooperative farms, and help themselves to scarce food in a hungry country.

…

Missile sales were for many years major earners of foreign currency, according to a report for the Strategic Studies Institute by Daniel A. Pinkston, who is now a Seoul-based analyst with the International Crisis Group. But the cost of the arms trade has gone up and sales have declined as a result of U.N. sanctions imposed after the North’s nuclear tests in 2006 and this year, South Korean analysts say.

The military has thus turned to its new Chinese cash cow. As the army has taken over management of mines in North Korea, mineral exports to China have soared, rising from $15 million in 2003 to $213 million last year. Led by those sales, the North’s total trade volume rose last year to its highest level since 1990, when a far more prosperous and less isolated North Korea was subsidized by the Soviet Union.

A unique advantage the Korean People’s Army brings to foreign trade is a well-disciplined workforce that has to be paid — nothing. Soldiers receive food, clothes and lodging, but virtually no cash. This competitive edge makes military-run trading companies especially attractive to the North’s leadership, according to the Institute of Peace report.

Based on confidential interviews with recent North Korean defectors, four of whom said they worked for trading companies run by the military, the paper concludes that a “designated percentage of all revenues generated from commercial activities . . . goes directly into Kim Jong Il’s personal accounts.” The rest of the revenue flows into the operating budget of the military.

The full article is worth reading here.

Additionally, the report by the Institute of Peace cited above, “North Korea, Inc.”, can be downloaded here. The paper is on my reading list this weekend, but here is the introduction and conclusion:

Introduction: Assessing regime stability in North Korea continues to be a major challenge for analysts. By examining how North Korea, Inc. — the web of state trading companies affiliated to the Korean Workers’ Party (KWP), the Korean People’s Army (KPA), and the Cabinet — operates, we can develop a new framework for gauging regime stability in North Korea. Insights into the Democratic People’s Republic of Korea (DPRK)1 regime can be gained by examining six core questions related to the DPRK state trading company system. First, what are DPRK state trading companies and how did they emerge? Second, how do DPRK state trading companies operate? Third, what roles do they play? Fourth, why are DPRK state trading companies important? Fifth, what major transformations are taking place in the DPRK state trading company system? Sixth, what are the implications of the manner in which this system is currently functioning?

Conclusion:  Despite lingering problems with the fragmented Public Distribution System, the challenges of chronic food shortages, and a deteriorating economic infrastructure system, the DPRK regime has proven to be remarkably resilient. By operating North Korea, Inc. — a network of state trading companies affiliated to the KWP, the KPA, and the Cabinet — the regime is able to derive funds to maintain the loyalty of the North Korean elites and to provide a mechanism through which different branches of the North Korean state can generate funds for operating budgets. During periods when the DPRK’s international isolation deepens as a result of its brinkmanship activities, North Korea, Inc. constitutes an effective coping mechanism for the Kim Jong Il regime.

While North Korea remains an opaque country, we now have greater access to unique defectors with the following characteristics — prior experience working in DPRK state trading companies and current business dealings with former colleagues in North Korea through channels in China. By closely examining DPRK commercial activities and capabilities, a new field of North Korea analysis can be structured to produce insights into the internal dynamics of the DPRK regime. This new line of inquiry would help to broaden our understanding of an evolving North Korea.

Institute for Far Eastern Studies (IFES)
NK Brief No. 09-11-02-1
11/2/2009

The North Korean agricultural ministry has announced that the countries food shortages are expected to be even greater next year. Edition 302 of the newsletter “North Korea Today,” distributed by the group Good Friends, reports that the Ministry of Agriculture announced harvest predictions for farms in North and South Hwanghae and Pyongan provinces, North Korea’s ‘ricebowl region’. It stated that if the country was to avoid a food crisis next year, everyone would need to strictly manage this year’s crops. It was also reported that the central party authorities in North Korea, after receiving the report, called for the opening of all customs houses in the border region and for trading companies to seek new avenues for trade. An order was passed down to “relentlessly trade with the outside in order to bring in much food.”

With food shortages this year and last, and now news that there will be food problems next year as well, it is rumored that there is a growing number of angry people in the normally mild-mannered Hwanghae Province. In addition, this is driving a growing number of people to turn to crime in order to put food on the table. On October 26, Free North Korea Radio quoted a source as stating, “As rumors spread across North Korea that large-scale famine, the likes of which were seen in the mid-1990s, will again sweep through country next year, anxiety is shooting up among the people and crimes of necessity are on the rise.”

According to the source, “Crimes of necessity, like pillaging granaries on farms, are spreading like never before as people act quickly to ensure food supplies,” and, “Fighting has grown fierce between people trying to maintain their standard of living.” Furthermore, “The number of people in the Dancheon region of South Hamgyeong Province just ‘sitting down and starving to death’ is exploding,” and, “Not long ago, there was even one incident of and armed soldier guarding a threshing floor of one farm being attacked by a gang of thieves.”

The source explained, “People are well aware that this year yielded poor harvests, but that they cannot rely on aid from the international community because of the Kim Jong Il regime’s indiscriminant pursuit of nuclear development.” The source also added, “These days, people are rationalizing illegal activities in the belief that ‘you can rely on no one but yourself.’”

It was also reported that in Hyesan, Hyeryeong, Onseong and Musan, most food prices are at higher levels than what are usually seen in the spring, despite the fact that it is now fall harvest season. According to Free North Korea Radio, October 23rd prices of rice, flour and corn in Hyesan, Hyeryeong, Onseong, and Musan were as follows: Hyesan, rice = 2,550-2,750 won/1 kg, flour = 2,400-2,600 won/1 kg, corn = 850-900 won/1 kg; Hyeryeong, rice = 2,500-2,800 won/ 1 kg, flour = 2,400-2,700 won/ 1 kg, corn = 800-1,000 won/1 kg; Onseong, rice = 2,450-2,600 won/ 1 kg, flour = 2,500-2,700 won/1 kg, corn = 700-900 won/1 kg; Musan, rice = 2,500-2,700 won/1 kg, flour = 2,400-2,600 won/1 kg, corn = 850-1,000 won/1 kg

The US Treasury Department has targeted  the Amroggang Development Bank for its connections with the Tanchon Commercial Bank.

According to Reuters:

Tanchon was previously hit with sanctions by both the United States and the United Nations Security Council for its involvement in Pyongyang’s proliferation activities.

Treasury said assets of Tanchon under U.S. jurisdiction are frozen and Americans are banned from any dealing with it. It said that Tanchon’s president, Kim Tong Myong, also was being added to the list of weapons proliferators.

Treasury described Amroggang as a Tanchon-related company run by Tanchon officials. It said Tanchon helps finance Korea Mining Development Corp’s sales of ballistic missiles and has been involved in Komid’s ballistic missile transactions with an Iranian industrial group.

The US has sanctioned several companies and banks this year (here, here, here).

The UN Security Council has also sanctioned several companies and individuals (here).

Here is a link to the Treasury Department Statement.  Some text below:

Amroggang, which was established in 2006, is a Tanchon-related company managed by Tanchon officials.  Tanchon, the financial arm of the U.S. and UN-designated North Korean company Korea Mining Development Corporation (KOMID), plays a role in financing KOMID’s sales of ballistic missiles and has also been involved in ballistic missile transactions from KOMID to Iran’s Shahid Hemmat Industrial Group (SHIG), the U.S. and UN-designated Iranian organization responsible for developing liquid-fueled ballistic missiles. KOMID is North Korea’s premiere arms dealer and main exporter of goods and equipment related to ballistic missiles and conventional weapons.

A North Korean individual Kim Tong Myong was also designated today for acting on behalf of Tanchon.  Kim Tong Myong has held various positions within Tanchon since at least 2002 and is currently Tanchon’s President.  He has also played a role in managing Amroggang’s affairs using the alias Kim Chin-so’k.

Read the full Reuters article here:
Treasury puts North Korean bank on blacklist
Reuters
10/23/2009

UPDATE 2: Well apparently the World Council of Churches is in bed with the North Korean Ministry of Foreign Affairs.  According to their most recent press release:

Nearly 140 leaders from the world’s churches, North and South Koreans among them, have called for the formation of an inter-Korean confederation even before complete reunification of Korea can take place. Agreement was reached at the close of a three-day meeting in Tsuen Wan, Hong Kong where the Christian leaders expressed unrelenting hope for peace and reconciliation among Koreans, despite the stark realities of the ongoing division of the Korean peninsula.

The call for a confederation came in a communiqué developed by the group at the end of their international consultation on Korean reunification. The “Tsuen Wan Communiqué” says the confederation option would involve progressive steps such as peaceful co-existence and the furthering of economic cooperation between the two Koreas.

The proposal for an inter-Korean confederation was presented to the group jointly by church leaders from North and South Korea on the final day of deliberations.

The “confederation system would respect both governments”, said the Rev. Kang Yong Sop, chairman of the Korea Christian Federation of North Korea, in a presentation to the group on Friday morning.

“North and South Korea must first recognize each other’s systems and engage in cooperation in any field possible, and institutionalize the results,” said Suh Bo Hyug, a member of the National Council of Churches in Korea’s reconciliation and reunification committee: “Only then will they move closer to reunification.”

The communiqué was the outcome of a consultation on peace, reconciliation and reunification of the Korean peninsula held 21 to 23 October 2009, sponsored by the World Council of Churches (WCC) and the Christian Conference of Asia (CCA).

Of course the confederation plan was raised by Kim Il sung years ago and the DPRK is still pushing that vision as an intermediary step towards reunification.

And if there was any doubt remaining:

They also called for all sanctions against North Korea imposed by the United Nations Security Council to be lifted, for immediate bilateral talks between the United States and North Korea, and for North and South Korea to implement fully the 15 June 2000 North-South Joint Declaration and the 4 October 2007 Declaration, both of which spelled out a number of goals and steps toward reunification.

UPDATE 1:  The WCC issued an interesting press release following their visit to the DPRK.  Here is an excerpt:

Visiting North Korea at the invitation of the Korean Christian Federation of North Korea, Kobia and the delegation visited three churches on Sunday 18 October.

In addition to visiting the Bong Soo Church the delegation also visited the Chilgol Church in the capital, Pyongyang, and a house church of 12 members in the town of Sunam which is near Pyongyang.

Continuing with the Corinthian example Kobia told the Bong Soo congregation that no church is more important than the other. “The body is whole when all the parts cooperate with each other,” he said. “Therefore in his letter to the churches in Corinth, Paul appeals to the community to recognize each other as being a very important part of the body.”

The Bong Soo Church was constructed in 1987 with funding from the North Korean government and the Presbyterian Church of Korea. The church is thoroughly modern with a full sound system, balcony and music text on a large screen in front of the church, a video camera system, a high-lofted ceiling and an area for a large choir.

Bibles and songbooks line the seating areas for the congregations. Within the church compound is a recently constructed theological seminary where 12 students are now enrolled to earn degrees in evangelism.

The Bong Soo worship service overflowed with music from the choir, soloists and several women’s groups, mostly singing traditional hymns. Asked if the abundance of music was especially for the WCC delegation, a congregation member said no, “this happens every week.”

The smaller congregation at the Chilgol Church, which the WCC delegation also visited, has been in existence since the late 1800s. The current building is relatively new, as the original building was destroyed in the Korean War by the U.S. bombing of Pyongyang.

A WCC delegation member asked the congregation about the noticeable absence of children in the churches. While acknowledging this is a challenge within North Korean society, they said the children are involved in a broad range of other activities and some will at a later age come to church. They said it was their job to teach their children at home about Christianity.

On Sunday afternoon the WCC delegation visited a house church of 12 members who meet in a home in the community of Sunam outside of Pyongyang. They said the house church movement within North Korea is growing.

The church meets on Sundays, sitting on the floor of the living room of a member’s home. One member brings an accordion to accompany the singing. The singing in the North Korean church tends to be extraordinarily rich and is a key part, along with prayer and teaching, of any worship service.

Read the full press release here.

ORIGINAL POST: According to the press release on their web page (written before departure):

The visit is at the invitation of and being organized by the Korean Christian Federation (KCF) of North Korea and will take place 17 to 20 October.

“We will be meeting with the churches, government officials and learning about the life and witness of churches in North Korea,” said Dr Mathews George Chunakara, director of the WCC Public Witness programme and the Commission of the Churches on International Affairs, who will be a member of the delegation travelling with Kobia. “We will be participating in the worship service at Bong Soo Church in Pyongyang, where the WCC general secretary will preach.”

The churches in North Korea are involved in social development and humanitarian aid assistance, and the members of WCC’s ecumenical fellowship have been supportive to the KCF for the past several years, said Chunakara.

The visit is taking place at a time when intense multilateral diplomatic efforts and negotiations are under way on issues related to denuclearization of North Korea and resumption of Six Party Talks, which were stalled for some time after North Korea withdrew from the talks.

Although North Korean leader Kim Jong-il is said to have made the announcement to Chinese Premier Wen Jiabao in Pyongyang last week during his three-day visit that North Korea would return to the Six Party Talks, it is also reported that Kim Jong-il said the return would be dependent on the progress of its planned bilateral talks with the US.

The WCC has been relating with the churches in North Korea for the past 25 years, with the first official visit having taken place in 1985. In the early 1980s the WCC Commission of the Churches on International Affairs initiated a process aimed at peace, reconciliation and reunification of the Korean peninsula and bringing church leaders from North and South Korea together.

This is the second visit of a WCC general secretary in ten years. In 1999, then general secretary Rev. Dr Konrad Raiser visited North Korea.

After the visit to North Korea, the delegation will travel to Hong Kong to participate in an international consultation on peace, reconciliation and reunification of the Korean peninsula, which will be held from 21 to 23 October.

The WCC general secretary will be accompanied by WCC staff members Mathews George Chunakara, Christina Papazoglou, Mark Beach and Peter Williams, as well as the general secretary of the Christian Conference of Asia, Dr Prawate Khid-arn.

Critics of the DPRK have long argued that the primary purpose of Korean Christian Federation is to attract aid from foreign religious organizations. This is probably true to some extent, but the organization has been around since the 1940s so it is likely that by this point its mission within the political system is more complicated than to function only as an aid magnet.

Here are a few older posts about the KCF.

Photo by Eric Lafforgue

North Korean claims record production gains through ‘150-day battle’
Institute for Far Eastern Studies (IFES)
NK Brief No. 09-10-12-1
10/12/2009

It has been boasted that North Korea’s ‘150-day Battle’ to boost the economy (April 20-September 16) resulted in record-breaking jumps in DPRK production numbers, and it has been suggested that that by 2012, some enterprises will “attain production numbers higher than the best numbers recorded at the end of the 1980s.” This claim was made by Ji Young-il, the director of the Chosun University Social Science Research Institute, which is run by the pro-Pyongyang “General Federation of Korean Residents in Japan.”

In “Professor Ji Young-il’s Monthly Economic Review: The 150-day Battle and Prospects for Building an Economically Powerful Nation,” an article in the federation’s newspaper, Choson Sinbo, the author wrote, “There are more than a few enterprises that have set production goals for 2012 at more than three times the current level of production.” He also claimed that some enterprises in the mining, energy and railroad transportation sectors had set goals of as much as 6 times today’s production numbers.

Professor Ji went on to write, “Basically, it is an extraordinary goal ensuring growth of 1.3-1.5 times (a growth rate of 130-150%) per year.” He also explained that surpassing production rates as high as those seen in the late 1980s is one of the fundamental markers on the road toward “opening the door to a Strong and Prosperous Nation.”

Citing North Korea’s “Choson Central Yearbook,” he gave production numbers in various sectors of the DPRK economy at the end of the 1980s: electricity, 55.5 billion kWh (1989); coal, 85 million tons (1989); steel, 7.4 million tons (1987); cement, 13.5 million tons (1989); chemical fertilizer, 5.6 million tons (1989); textiles, 870 million meters (1989); grain, 10 million tons (1987).

Director Ji claimed that during the recent ‘battle’, production in the metals industries was up several times that of the same period in previous years, while energy producers generated several hundred million kWh of electricity, coal production was up 150%, and cement and other construction materials were up 140%. He pointed out that in 14 years of the Chollima movement, beginning in 1957, during which socialist industrialization took place in the North, the yearly average production growth was 19.1%, and he stated that the annual growth of 9 to 10% in industrial production over the past several years was a noteworthy record.

Moving to the agricultural sector, Director Ji also noted that while overseas experts have critiqued this year’s harvest, there has been a definite breakthrough in grain production with land cultivation hitting previously unseen levels over the past several years.

Previous 150-day battle stories below:
(more…)

UPDATE 5: Dr. Petrov has some great commentary on the new constitution:

A rough English translation as offered by Northeast Asia Matters in their report here but it mistranslates Article 8 of the Constitution, calling “근로인민의 리익” or “the interests of the workers” as “human rights”, which is not the same.

As for dropping the word 공산주의  or “communism”, indeed is happened in Articles 29 and 40 (Economy and Culture respectively). The mystery is in why Naenara keeps the old English version, where the sensational new Section 2 of Chapter VI “Chairman of the National Defence Commission” is missing?

UPDATE 3: Northeast Asia Matters has posted a copy of the DPRK constitution in English.  Click here to read.

UPDATE 2: A reader has posted the new constitution (in Korean) in the comments section below.  Click here to read. 

UPDATE 1:  From the Wall Street Journal:

The average North Korean doesn’t know the country’s national constitution well, but at least he has a solid excuse: Kim Jong Il keeps the working masses ignorant of the rights that are formally granted them, which include freedom of speech and demonstration. But just because Pyongyang’s constitution is hardly worth the paper it is written on does not mean that alterations to it are beneath notice. For the ruling elite, its preamble and first few articles serve as a broad indication of the regime’s ideological direction.

ORIGINAL POST: According to Reuters:

North Korea has revised its constitution to give even more power to leader Kim Jong-il, ditch communism and elevate his “military first” [Songun] ideology, South Korea’s Unification Ministry said on Monday.

Though there is little doubt over the 67-year-old Kim’s power, secured by his role as chairman of the National Defence Commission, the new constitution removes any risk of ambiguity.

“The chairman is the highest general of the entire military and commands the entire country,” according to a text of the constitution enacted by the reclusive North in April and only now released by the South Korean government.

The chairman is now the country’s “supreme leader”. Though the position had become the seat of power under Kim, the previous constitution in 1998 simply said the chairman oversees matters of state.

But the Unification Ministry said the new charter removes all reference to communism, the guiding ideology when Kim’s father Kim Il-sung founded North Korea — of which since his death in 1994 he has been eternal president.

Often in its place is “songun”, the policy of placing the military first and which has been Kim junior’s ruling principle.

South Korean media quoted an official from the North as saying that it made the change because it felt the ideals of communism are “hard to fulfil”.

The new constitution adds assurances for protecting human rights, even though North Korea has one of the world’s worst records.

Experts on the North’s state propaganda said the military first ideology has helped Kim dodge responsibility for the country’s sharp economic decline by arguing that heavy defence spending was needed to overcome threats posed by the United States.

It has also meant that the bulk of the North’s limited resources have gone into beefing up a million-strong military at the expense of the rest of the population who make up one of Asia’s poorest societies.

According to the Associated Press:

Yang Moo-jin, a professor at Seoul’s University of North Korean Studies, says it is the first time the North’s constitution has mentioned human rights.

“I think they created this clause, mindful of international criticism of their human rights record,” Yang said. “It lacks details, such as how they will respect and protect human rights. I think it’s just a formality.”

The new constitution also defined Kim Jong Il as the country’s highest leader in a clearer term, saying that the chairman of the all-powerful National Defense Commission — Kim’s title — is the nation’s “supreme leader.”

The previous version only said the commission is the country’s highest organization.

The new constitution also dropped references to communism and only mentions socialism.

But Yang said the change does not mean much because the charter of the North’s ruling Workers’ Party, which is considered higher than the constitution, still says its goal is to build a communist nation.

New York Times:

…Analysts saw the changes as signs that one of the last holdouts from the former Communist bloc was trying to improve its international image in an effort to engage the United States and that the ailing Mr. Kim was trying to burnish his legacy.

North Korea revised its Constitution in April when its rubber-stamp Parliament re-elected Mr. Kim as chairman of the National Defense Commission amid uncertainty over his health. But the outside world was kept in the dark about the details of the amendment until Monday, when South Korea released what it called the text of the North Korean Constitution.

The new Constitution defined one of several titles Mr. Kim holds, chairman of the National Defense Commission, as “supreme leader” of the country. Though Mr. Kim has ruled the country as an undisputed leader, the Constitution revision is the first time he has acquired such an official designation since the death of his father, Kim Il-sung, in 1994.

The chairman “oversees the entire national business,” appointing important military figures, ratifying or abrogating treaties with foreign nations, appointing special envoys and declaring states of emergency or war, the new Constitution said.

The government of South Korea declined to comment, saying it was still scrutinizing the changes. But analysts said Mr. Kim was reasserting his rule by stamping his imprint on the Constitution at a time when doubt persisted at home and abroad about his health and his grip on power.

“After he overcame his health crisis, Kim Jong-il revised the Constitution to show that he was in control and was the person the United States must deal with,” said Kim Yong-hyun, a North Korea analyst at Dongguk University in Seoul. “By mentioning human rights and giving up communism, which sounded hollow to his people after the collapse of the Eastern bloc, he is also trying to show that he is a flexible leader sensitive to the changing world order.”

The constitutional revision does little to add to his already absolute grip on power, said Cheong Seong-chang, a senior analyst at Sejong Institute in South Korea. Mr. Kim is already head of the ruling Workers’ Party and the People’s Army. The new Constitution stuck to a socialist system, though it abandoned communism.

But by bringing more portfolios under his National Defense Commission, “Kim Jong-il showed an intention to focus more on the military and foreign affairs” while leaving party matters to Kim Jong-un, the youngest of his three sons, who is reportedly being groomed as his successor, Mr. Cheong said.

North Korea is now ruled by a “Kim Jong-il and Kim Jong-un coalition,” he added.

In 1998, four years after the death of Kim Jong-il’s father, North Korea revised its Constitution to leave the senior Kim’s title, president, “eternally vacant,” dispersing the roles of the presidency to different agencies. That left outside analysts wondering who officially represented the country, though few disputed Mr. Kim’s authority. With the April revision, Mr. Kim has now left no doubt where the power resides both in reality and in document, analysts said.

Read the full stories below:
North Korea drops communism, boosts “Dear Leader”
Reuters
Jon Herskovitz and Christine Kim
9/28/2009

North Korea’s new constitution calls for respecting human rights for first time
Associated Press
9/28/2009

New Constitution Bolsters Kim’s Power
New York Times
Choe Sang-hun
9/28/2009

According to Blaine Harden in the Washington Post (excerpts):

North Korea has massively increased its special operations forces, schooled them in the use of Iraqi-style roadside bombs and equipped them to sneak past the heavily fortified border that divides the two Koreas.

In a conflict, tens of thousands of special forces members would try to infiltrate South Korea: by air in radar-evading biplanes, by ground through secret tunnels beneath the demilitarized zone (DMZ), and by sea aboard midget submarines and hovercraft, according to South Korean and U.S. military analysts.

Their primary mission, in the event of war, is to leapfrog the DMZ and create chaos among the 20.5 million residents of greater Seoul, while harassing South Korean and U.S. forces in rear areas, military and intelligence experts said.

South Korea and the United States agree that the number of North Korean special forces is rising, but they disagree on how much.

The number is now 180,000, according to the South Korean Defense Ministry. That’s a 50 percent increase since the South’s last official count three years ago. But Sharp, the U.S. commander here, puts the number at 80,000 (although that still dwarfs the special forces of any country, including the United States, which has about 51,000.)

Much of the difference appears to be a dispute over the definition of special forces. North Korea has retrained and reconfigured about 60,000 infantry troops as special forces in the past three years, South Korea says. The United States agrees that this reconfiguring has occurred, but it “does not count [retrained infantry] as special forces,” according to Maj. Todd Fleming, a spokesman for U.S. forces in Korea.

Whatever the number, there is widespread agreement that the North’s special forces are increasingly formidable. Sharp describes them as “tough, well-trained and profoundly loyal,” while being capable of illicit activities, strategic reconnaissance and attacks against civilian infrastructure and military targets across Northeast Asia.

But the capacity of North Korea to protect and maintain that frontline armor has declined since the 1990s. Flight hours for the North’s military aircraft have plummeted for lack of fuel, as has training of mechanized ground forces.

North Korea has also begun to question the utility of the tanks and armor it can afford at the front, after seeing the ease with which U.S. precision weapons shredded Saddam Hussein’s armored forces in Iraq, according to a South Korean Defense Ministry report.

“They were really shocked watching how the Americans destroyed Iraq’s tanks,” said Kim, the military affairs editor.

What North Korea still has in extraordinary abundance are boots on the ground, thanks to universal conscription and a mandatory 10 years of military service for men, seven years for women.

“The North Koreans made a decision based on the resources they have,” said Kwon Young-hae, a former director of South Korea’s National Intelligence Service. “The best way for them to counterbalance the South’s technological advantage is with special forces. When Kim Jong Il gives pep talks to these troops, he says, ‘You are individually, one by one, like nuclear weapons.’ “

The full article is worth reading here.

I  cant help but see the Iranian government involved in this, but that is entirely speculative.

And a personal aside—I recommend that everyone (including Americans) visit Iran.  Despite the reputation of the Iranian government in the west, the country is one of the friendliest and most beautiful places I have been fortunate enough to visit. My only regret with regards to my trip there is that I could not spend more time enjoying the company of her beautiful people.

(KCNA) Pyongyang, September 24 (KCNA) — The 50th anniversary of the founding of the Foreign Trade Bank was significantly celebrated in the DPRK.

Established in Juche 48 (1959), the bank has conducted settlement with other countries and financial transactions in a uniform manner as required by the nation’s developing external economic relations.

The bank has boosted its business relations and satisfactorily ensured settlement with banks of various countries, laying a groundwork for developing the nation’s external economic relations including foreign trade.

The bank has further boosted its business capability and improved international confidence as required by the times when the country’s international prestige and economic potential are rising remarkably and made a brisk way into international financial markets, steadily expanding the business relations with various other banks of the world on the principle of independence, equality and mutual benefit.
A meeting celebrating the golden jubilee of the FTB was held in Pyongyang Thursday.

Present there on invitation were delegations and delegates of various countries participating in the celebrations of the golden jubilee of the bank, staff members of embassies of foreign countries here and foreign guests staying in the DPRK.

O Kwang Chol, president of the bank, delivered a report at the meeting.

Additionally: Previous posts featuring the Foreign Trade Bank here.