North Korean Economy Watch

KCNA
3/6/2007

The hospital attached to Pyongyang University of Medicine has proved successful in the micro-operation of completely fractured arms and legs.

Researchers of the microsurgery laboratory under the Clinical Institute have developed a special suture needle, key of microsurgery, by themselves, and ultramicro-surgery technology. They are successfully stitching inner, middle and outer membranes of one-millimeter-thin blood vessels separately through the zoomed view of an operation microscope.

They have also succeeded in linking dozens of neural glands of the hair-like nerve trunk.

They have conducted thousands of micro-operations including one hundred and scores of operations for fractured limbs and skin, neural gland and living bone transplantation operations since they linked the fractured arm of a patient 15 year ago.

The researchers, basing themselves on the already-made successes, are developing cutting-edge fields of surgery from traumatic orthopedic surgery to blood vessel surgery, facial orthopedic surgery and visceral organ transplantation.

Daily NK
Kim Yong Hun
3/5/2007

It has been confirmed that North Korean authorities have distributed food rations to farmers in the border regions. It seems that the farmers were given first priority to the distributions, in an attempt by authorities to prevent further trends of defect that arose in December last year.

An inside source from North Korea informed on the 28th “Last December, Songhak farm, Obong farm, Changhyo farm in Hoiryeong, North Hamkyung delivered 100% of food distributions to the workers in the form of crops. In the past, food was distributed to workers after food subsidiaries for the nation and military had been extracted. This is the first time that 100% of food has been distributed.”

The rations were given in the form of corn 70% and rice 30%. The rice had been distributed in its original form, chaffs and all. Even though the rice was dispersed yet to be threshed, the fact that the distributions amounted to the full 100% greatly amazed the local farmers.

This is the first time since 1990 that North Korean authorities have given priority to the farmers without confiscating part of the distributions for the army.

According to the source, North Korean authorities have been distributing food rations to the farmers in the border regions in equal amounts as across the nation, as an order was made last November for “farmers (to) prevent acts of escape and illegal acts.”

The farmers pointed out “If we exclude the corn cob and outer layers of a corn, the amount of actual corn that is edible is about 60%. As for rice, the amount a person can eat is about 80%” and explained, “In the past, about 40% of farm produce was set aside for the nation. In comparison to the times where food was redistributed to the army, we are in fact receiving 30% more.”

However, though there has been an increase in distributions, it seems that the farm’s managerial secretaries, operation managers and team leaders are intermingling in the rations by taking all the edible rice and corn, while topping up the shortages in the farmer’s distributions with the outer layers of corn and cob and rice chaff.

In comparison to the amount of rations received by the farmers last Dec, the recent 70% corn and 30% rice means that at the maximum 320kg or minimum 250kg of food was distributed per person. Families with dependent children received 70kg of rations if the dependents were in elementary school and 120kg for dependents in middle school. If one’s spouse was able to partake in common labor, they would be exempt from the rations, but in the case that the spouse was disabled or a patient, then the family would receive rations similar to that of middle school students, 120kg.

However, farmers are complaining that the distributions would decrease by July as “Since last September until December, all essential food had already been taken from the farms and consumed. Once this has been depleted, the vicious cycle of food shortage will continue,” say the farmers.

Daily NK
Kim Min Se
3/5/2007

North Korea customs at Shinuiju is under strict control by Central Committee of North Korea Workers Party.

An inside source from Shinuiju said on the 4th, “Authorities are currently undergoing investigations at Shinuiju customs, looking for tax evasions and illicit acts. The parties subject to these crimes include customs officers at Shinuiju customs and merchants engaging in North Korea-China trade.”

The source added that the investigations had virtually terminated North Korea-China trade between Shinuju and Dandong.

Shinuiju customs is critically important for North Korea as 80% of food and daily necessary goods between North Korea and China are imported and exported from here.

According to Kim Young Hee (pseudonym), a North Korea-China tradeswoman in Shinuiju, “Trade merchants have given up on trade and are in a state of panic because of authorities making investigations at Shinuiju.”

Kim said “At times like this, keeping is a low profile is the way to survive” and expressed her concern, “They have made orders to arrest at least 10 people. Who knows, anyone could be unlucky and caught.” She said “Like there is any trade merchant who does not engage in some sort of illegal act” and retorted “Simply obtaining a permit from authorities is generating money.”

“Prior to authority investigations, on average 50~100 cars would pass through Shinuiju-Dandong, per day. Now the figures have drastically reduced with only 5~10 cars passing through” she said.

Kim continued “There is not an article that falls through the cracks of authority officers. All goods approved by customs, whether it be minerals to seafood is confirmed by authorities… All things are left up to the hands of authority officials.”

On the other hand, the source also informed that despite recent investigations placing trade between North Korea and China in a state of lull, apparently counteracting effects such as dramatic rises in Shinuiju markets have not yet occurred.

KCNA
3/2/2007

The Veterinary Medicine Institute under the Academy of Agricultural Science has developed an efficient vaccine against swine epizootic disease. It is particularly effective against coli bacillus-caused toxemia.

Once a piglet takes the disease, there are symptoms of facial paralysis and melancholia without eating fodder before dying. It is easily infectious.

It has been known that there is no medicine for the disease but preventive measure.

The scientists of the institute have perfected the vaccine developed over 10 years ago, while the research into the epizootic disease is being deepened in the world.

It has been proved that the vaccine is harmless and can prevent piglets completely from dying of coli bacillus-caused disease.

Also the scientists have established a new vaccination system so as to raise the efficacy of vaccine.

The vaccine production centers built in various parts of the country are mass-producing vaccine for stock-breeding farms and rural households.

KCNA
3/2/2007

“Koryo Pen”, a hand-writing input program developed by the Korean Computer Center is popular in the Democratic People’s Republic of Korea. It enables computer users to input various kinds of documents with an electronic pen without typing.

It is very convenient for those who are not good in typing.

With high character recognition ability, “Koryo Pen” can recognize most of hasty writing whose stroke orders are correct, to say nothing of correct characters.

Symbols and marks are analyzed, too.  There is little problem about a document with foreign characters.

Daly NK
Kim Young Jin
3/1/2007

Chairwoman for Hoiryeong City’s North Korean Democratic Women’s Union, Suh Kyung Hee’s husband “K” has been dealing with drugs since the moment he managed his company, Maebong Company. However, as central authorities began to centralize businesses since last year, the company closed its doors and “K” adopted his driver “L” as drug runner and his daughter as the treasurer in charge of distributing illicit drugs to smugglers at wholesale costs to districts such as Musan, Hoiryeong and Onsung.

According to a source in Hoiryeong, K and his driver L had been in confrontation with one another since January. In the past K had procured his drugs from Chongjin and moved them to a base in Hoiryeong. Then, the drugs would be either sold to border smugglers or sold to Chinese tradesmen.

Here is where the conflict surfaced. While, L was in charge of delivering the drugs from Chongjin to Hoiryeong, K became suspicious that L was secretly hoarding the drugs elsewhere. Hence, K conducted an investigation trailing L’s steps at which a disagreement arose.

In early Feb, L voluntarily went to North Hamkyung Security Agency in Chongjin and exposed that Chairwoman Suh’s family had been disclosing in drug dealings. The motive behind L indicting Chairwoman Suh’s family is still unknown.

Some argue that the reason L went straight to the district security office and not the city office in Hoiryeong was because of Chairwoman Suh’s hierarchical position in Hoiryeong city. If L had carelessly reported this case to the city office, it is possible that L would have simply lost his self-dignity.

At present, it seems that rumors about this case are spreading rapidly across Hoiryeong creating unsettling feelings in the city.

People of Hoiryeong city are muttering “High officials must also be shown the seriousness of law,” criticizing Chairwoman Suh’s family for concealing such large amounts of dollars and yuan also Chairwoman Suh, who as the leader of the Women’s Union would advocate severe punishment for female defectors.

100g of North Korean drugs sell for 12,000 yuan

North Korean citizen Park Jong Shim (pseudonym, Sanup-dong, Hoiryeong) who lives in the same suburb as Chairwoman Suh, said in a telephone conversation with a reporter on the 26th “The whole city is raucous because of Chairwoman Suh’s story” and informed “Some people say that the power of law will be enforced properly this time as the district security agency has been involved. On the other hand, some question whether or not those people with so much money and power will be punished according to law, despite the district office being involved.”

Hoiryeong citizen Kang Eun Soon (pseudonym) who defected to China in January said “If I think about the times when Chairwoman Suh would go around making a racket, my teeth rattle.” Like second nature, Chairwoman Suh would prowl around advocating, “With the slightest nudge, Hoiryeong women jump to China, not only defiling their bodies but dishonoring the land where mother Kim Jong Sook (Kim Jong Il’s mother) was born.”

Kang said “Usually, Suh would conduct political meetings through her Women’s Union and argue that the reason there was so many public trials for border crossers and illegal acts in Hoiryeong was due to the fact that women could not look after their family. She would say that Hoiryeong women were obsessed over money and would go to any lengths to get this becoming shallow-minded people.”

“Even if a verdict was made stating that Chairwoman Suh was not linked to the drug dealings, she would still not be able to maintain her position because of all the things she has said in the past,” Kang added.

The drug known as “ice” made in North Korea is sold to Korea, Japan and even Macau through the intermediary of China. The drug “ice” as known to defectors, originated from the Heung Nam Pharmaceutical Company.

Though the going rate for “ice” differs according to quality, 100g of high-quality ice is 12,000 yuan, 9,000~10,000 yuan for standard and 7,000 yuan for low-quality ice.

In accordance with North Korea’s legislation Article 218 amended in April 2004, any person found producing or trading drugs is sentenced to a maximum of 5 years time at the Labor Education Camp. If this act has been repeated on numerous occasions or the drug dealings were large scale, a person could be sentenced to 5~10 years at the Labor Education Camp. If the conditions are even more severe, the law clearly states that a person could then be sentenced to more than 10 years time at the Labor Education Camp or sent to the Labor Education Camp for life.

Yonhap
3/1/2007

South Korea’s five-member negotiating team to the ongoing ministerial talks on Thursday paid a courtesy call on Kim Yong-nam, the North’s ceremonial head of state, as the talks went into a third day in Pyongyang.

Lee Jae-joung, South Korea’s point man on North Korea, became the third unification minister to meet Kim, president of the Presidium of the Supreme People’s Assembly, and Lee is to hold a press briefing to explain what they discussed later Thursday, pool reports said. The meeting was hurriedly arranged at the request of the South on Thursday morning.

At the Mansudae Assembly Hall, the North’s No. 2 leader received the South Korean delegation, which consists of Lee, Vice Finance Minister Chin Dong-soo, Vice Culture Minister Park Yang-woo, Lee Kwan-se, the assistant unification minister, and Yoo Hyung-ho, a senior official of the National Intelligence Service.

The meeting came as officials from the divided Koreas were engaged in negotiations on how to resume aid and family reunion events and other topics at their first high-level talks in seven months.

They had lunch together at the renovated Okryukwan, a North Korean restaurant famous for its cold noodle soup. After their one-hour meeting with the North’s titular head of state, the South Korean delegation will visit the North’s national orchestra, the reports said.

Earlier in the day, the South Koreans held a simple 10-minute ceremony to mark the 88th anniversary of the March 1 Independence Movement at the Koryo Hotel. As a gesture of goodwill, the North provided a birthday breakfast for Lee, who turned 63 on Thursday.

The two sides had no official schedule for negotiations for the day, but top negotiators and working-level officials held talks to discuss the topics proposed during a plenary session on Wednesday.

The South gave top priority to resuming face-to-face family reunion events in April and construction of a family reunion center at the Mount Geumgang resort as soon as possible, while the North called for holding economic talks this month and pressed for the South’s resumption of rice and fertilizer aid, the reports said.

“The North raised the issue of humanitarian aid during working-level officials’ meeting on Wednesday. But no direct mention on rice and fertilizer aid was made in a draft joint statement,” a South Korean official said, asking to remain anonymous.

North Korea has proposed to resume inter-Korean humanitarian projects on a full scale immediately, and also offered to hold a meeting to discuss ways of boosting economic ties sometime in March in Pyongyang.

The details for reopening reunion events for families separated by the border are likely to be worked out easily, but Seoul’s rice aid to North Korea might surface as a bone of contention, according to analysts. South Korea also holds the position it prefers to hold the the economic talks in April.

The South hopes to reopen the economic talks next month so as to use rice aid as leverage to make the North take quick steps in complying with a recent agreement over its nuclear disarmament in return for energy aid.

“Unlike previous ministerial talks, these involve the dual tracks of inter-Korean relations and the six-party talks, so difficult negotiations are ahead,” a top South Korean unification ministry official said, asking to remain anonymous because of the sensitivity of the issue.

Kwon Ho-ung, the North’s top negotiator, avoided specifics about humanitarian projects in his keynote speech, but analysts said that the North hopes to link the resumption of emotional family reunions with Seoul’s food and fertilizer assistance to Pyongyang.

Shortly after the North conducted its missile tests in July, the South suspended food and fertilizer aid. After the North’s nuclear weapon test in October, the possible resumption of aid was blocked.

In retaliation, the communist nation immediately suspended inter-Korean talks and reunions for families separated by the sealed border since the end of the 1950-53 Korean War.

Seoul may offer to ship some of the fertilizer aid to Pyongyang shortly after the talks so that it can be used for rice seedling planting this spring. But the South maintains the position that more fertilizer and rice will be given in accordance with how much progress the North makes in implementing the steps agreed upon during the six-nation talks on its nuclear dismantlement, according to sources.

Not only a date for the resumption of economic talks with Pyongyang as the venue, they will also have to agree on how to cooperate in inter-Korean projects, such as reopening cross-border railways, they said.

The South’s chief negotiator has proposed test runs of reconnected cross-border railways in the first half of this year, and the launch of operations by the end of 2007, according to pool reports.

As a precondition for the operation of cross-border railways, Lee said it is necessary to make headway in the inter-Korea economic project, which involves exchanging raw materials from the South for the North’s minerals.

North Korea abruptly called off scheduled test runs of cross-border railways in May under apparent pressure from the hard-line military. It also led to mothballing an economic accord under which South Korea was supposed to provide raw materials in exchange for the North’s minerals. North Korea’s subsequent missile and nuclear weapons tests further clouded hopes of implementing the accord.

The tracks, one line cutting across the western section of the border and the other crossing through the eastern side, have been completed and were set to undergo test runs. A set of parallel roads have been in use since 2005 for South Koreans traveling to the North.

South Korea has repeatedly called on North Korea to provide a security guarantee for the operation of cross-border railways, but the North has yet to give an answer on the issue.

The reconnection of the severed train lines was one of the tangible inter-Korean rapprochement projects agreed upon following the historic summit between then South Korean President Kim Dae-jung and North Korean leader Kim Jong-il in 2000.

In 2005, South Korea agreed to provide the North with US$80 million worth of raw materials to help it produce clothing, footwear and soap starting in 2006. In return, the North was to provide the South with minerals, such as zinc and magnesite, after mines were developed with South Korean investments, guaranteed by the Pyongyang government.

The talks, the 20th since the leaders of the two Koreas held their first-ever summit in Pyongyang in June 2000, come as the world is paying keen attention to whether North Korea will honor its promise to take the first steps toward ending its nuclear weapons program in return for energy aid.

The ministerial talks, the highest-level channel of regular dialogue between the two Koreas, had been suspended amid tension over North Korea’s missile tests in July and its nuclear weapon test in October.

On Feb. 13, North Korea agreed to shut down its nuclear facilities and eventually dismantle them in exchange for energy aid and other benefits, while the U.S. agreed to discuss normalizing relations with the communist nation. Only two days later, Seoul and Pyongyang agreed to resume ministerial dialogue after a seven-month hiatus.

In the deal, North Korea will receive initial aid equal to 50,000 tons of heavy fuel oil for shutting down and sealing its main nuclear reactor and related facilities at Yongbyon, 80 kilometers north of Pyongyang, within 60 days. International Atomic Energy Agency inspectors will determine whether the North carries out the steps properly.

North Korea can eventually receive another 950,000 tons in aid if it disables the reactor irreversibly and declares that it has ended all nuclear programs. The cost of the aid will be equitably distributed among South Korea, the U.S., China, Japan and Russia, according to officials.

KCNA
2/28/2007

Scientists in the Zoological Institute of the Branch Academy of Biology under the DPRK State Academy of Sciences have proved successful in research into the artificial breeding of terrapins.

The terrapin is efficacious for weaklings and for the treatment of circulatory troubles. The new method shortens the growth period of terrapins to one fourth.

At the end of several-year experiments, they found out raw materials of assorted feed needed for the rapid growth of terrapins and their composition rate, and an effective method for reducing incubation duration by more than ten days compared with the natural conditions.

The productivity of the male terrapins is higher than that of the females. They, basing themselves on this, developed a technique by which they can control the rate of female and male freely.

The scientists also redesigned structures of the terrapin breeding farm to suit the habitation of the terrapins so as to make them grow healthily.

KCNA
2/27/2007

The Huichon Machine-tool Plant in the DPRK is manufacturing highly-efficient machine-tools.

The plant has completed a flexible machining system for producing boxes which is of great significance in the development of the machine-building industry so as to lay its solid material and technical foundation.

It has also introduced into production a new control system by which various kinds of lathe accessories are processed in an automatic way. It greatly helps make machine-tools precise and high-speed.

Among its products are a new kind of universal lathe, universal cylindrical grinder, movable radial drilling machine and NC milling machine.

The universal lathe has a processing diameter bigger than others and the universal cylindrical grinder, controlled by already-set program, improves the precision of products and productivity.

The movable radial drilling machine can process a large object, moving from place to place by itself.

In addition, the plant produces various sizes of ball screws which are applicable to machines which need flexibility and to floodgates of power stations.

The plant is making many efforts to introduce new advanced technologies into production.

Korea Times
Ting-I Tsai
2/21/2007

North Korean drug companies hope that updated versions of traditional medicines promising – among other things – to treat impotence and kidney dysfunction can help cure what ails the isolated Stalinist country’s stagnant economy.

In the hope of earning badly needed hard currency by exploiting the nation’s ancient herbal-medicine traditions, North Korea’s pharmaceutical companies are producing “various traditional health products through [modern] technologies”. The effectiveness of these medicines, however, has not been scientifically proved.

The medication that has drawn the most attention is probably Neoviagra-YR, developed by the Korea Oriental Instant Medicinal Center, which promises to improve a person’s sexual capabilities, ease bone pain, and cure kidney dysfunction and arteriosclerosis.

“I got my cute baby after I took two boxes of YR. This is definitely good medication,” its advertisement quoted Pyongyang resident Kim Ming-ze, 35, as saying.

Another patient who supposedly benefited from the medication was Kim Chong-ze, 45, who said: “I hadn’t had sex for three months. My sexual function normalized after I took four boxes of YR. I can promise that this is the magic medication of the 21st century.” However, the telephone number of the Pyongyang-based company given on the advertisement was wrong.

In Beijing’s Korean neighborhood, a booth at a market sells a box of Neoviagra for US$20.

Boothkeeper Pak Mun-bin emphasized that Neoviagra is far more effective than Pfizer’s Viagra, but failed to explain how it can be used to treat both bone pain and erectile dysfunction.

He added that that the booth sold as many as 700 boxes per month, with South Koreans being major customers.

“North Korea may be a small country. but its herbal medicines are nonetheless better than Chinese ones. At least there are no fake medicines,” Pak said.

If Neoviagra is not quite exotic enough for some customers, North Korea’s Pugang Pharmaceutic Co offers another choice, the “Queen’s Appeal”, which is described as “a volcano of energies and the key to happiness”.

Its official website described it as a herbal dietary elixir formulated from the extracts of wild Epimedium koreanum, which “was used by the kings, the queens and the court ladies in ancient Korea. Makes you wild in sexual life and brings you great energy. Adverse effects: none. Contra-indications: none.”

The North Koreans are also flogging medications that they claim are capable of preserving youth.

Among the “health foods” being introduced, the most widely promoted is “Royal Blood-Fresh”. According to the package, it is a traditional health food “formulated via a high tech from fermented soybeans of the olden royal palace”. The manufacturer, Pugang Pharmaceutic Co, claims it will “make you younger and cleverer. Students will result better in exams.” It recommends taking one to two tablets for prevention, three tablets three times daily for chronic cases, and five to nine tablets three to eight times daily for acute cases. A 160-tablet bottle sells for US$39 in Beijing.

For those worried about bird flu , the North Koreans claim to have a better cure than Tamiflu, the Kumdang-2 Injection, which is “extracted from Kaesong Koryo ginseng cultivated by specific micro-elementary fertilizers involving some ultra-highly purified medicinal rare-earth elements”. An English research team, its introduction claims, concluded that the medication could “prevent and cure the virus-originated epidemic diseases including Bird’s Flu”.

Its official website described its service as a “worldwide daily supply”, with medication distributed to its representative offices in 13 countries around the world, including Cuba, Syria, Japan, the United Kingdom and Zimbabwe. A Pugang Han Yong Gon sales representative said any international purchase is deliverable by courier and customers can receive their medication within days.

The Pugang Pharmaceutic Co, founded in 1983, has developed numerous medications by incorporating Korea’s traditional herbs in the production of “high-technology” products, including Aphorodisia 2, a cure for vaginal diseases. The company says it operates nine state-of-the-art pharmaceutical factories in accordance with the industry’s GMP (good manufacturing practices) standard and has averaged an annual turnover of $25 million. All of the medications are legally approved by the local medical authority.

According to Western experts familiar with the nation’s medical services, most of the medications are widely distributed to local pharmacies.

One expert, speaking on condition of anonymity, said: “North Koreans, Chinese, South Koreans, Japanese, etc, are always looking for ‘natural’ ways to reverse aging, cure [or prevent] all diseases with one potion, and to strengthen their sexual potency. And if they can make money while doing it, so much the better,” the expert said. Even if doubts do exist about the efficacy of the so-called “miracle medicines”, the expert noted: “It’s just that they want to believe in them.”

Taiwanese pharmacists and experts in traditional Chinese medicine question the legitimacy of the North Korean medicines.

Gau Churn-shiouh, a professor of the National Taiwan University’s school of pharmacy, noted that these medications “sound more like old-fashioned Chinese medications that could cure everything” that have no sound scientific basis.

Furthermore, experts in Chinese traditional medicine pointed out that all kinds of medications are poisonous, and taking them without diagnosis could lead to illness.

Hung Chin-lieh, also a professor at the National Taiwan University, said that the efficacy of ginseng is relatively limited compared with other herbs, and is not applicable to every single patient.

“The efficacies claimed by the advertisements look more like exaggerations. The main problem is that the ingredients of these medications are so vague. Without adopting the measure of ‘evidence-based medicine’, the North Koreans really should not have promoted the efficacies,” Hung said.