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3rd annual North Korea-China Economic, Trade, Culture and Tourism Expo

Thursday, October 16th, 2014

UPDATE 4 (2014-10-23): Here is coverage in the Choson Ilbo:

North Korea signed US$1.3 billion worth of investment deals with Chinese businesses at a trade fair in the Chinese border city of Dandong last week.

China’s Xinhua news agency on Monday quoted one of the organizers of the trade fair as saying, “North Korean and Chinese businesses signed letters of intent covering 60 trade and investment pacts amounting to $1.26 billion.

“Another eight letters of intent were signed between North Korea and businesses in other countries involving $11.6 million worth of trade and $100 million worth of investments.”

Around 500 North Korean officials attended the trade fair, including those in charge of economic development.

But the amount of deals struck was smaller than last year (93 deals worth $1.6 billion), due to deteriorating relations between Beijing and Pyongyang.

Skeptics also point out there is no guarantee that the letters of intent will materialize into concrete investments.

UPDATE 3 (2014-10-20): Here is additional coverage by Yonhap:

In an apparent bid to lure Chinese investors, North Korea has publicized somewhat detailed information about its workforce during an annual trade with China, boasting of a well-educated pool of labor.

The North’s National Economic Development General Bureau released a booklet to show off its labor force at the five-day trade fair, which ended on Monday in the Chinese border city of Dandong.

According to the booklet, North Korea’s total population stood at 24.34 million as of last year. About 12.17 million people constituted a “prepared labor force that can adapt to randomly-chosen professions,” according to the booklet.

North Korea also boasted that it extended compulsory education by one year to 12 years from this year.

“In our country, the level of education is high and the potential of intellectual capability is solidly prepared,” the booklet said. “There is no unemployment, labor striking or sabotage in our country.”

North Korea sent 68 business entities to this year’s North Korea-China Economic, Trade, Culture and Tourism Expo, the third of its kind, down about 30 percent from last year.

The decline in North Korea’s participation at this year’s show underscored the continued strain in bilateral relations, particularly since the North’s third nuclear test in February last year and the execution of the North Korean leader Kim Jong-un’s once-powerful uncle, Jang Song-thaek, who had close ties with Beijing.

UPDATE 2 (2014-10-20): Here is coverage from Xinhua:

A 500-strong trade delegation from the Democratic People’s Republic of Korea (DPRK) is promoting the country’s investment opportunities at a four-day expo in China’s border city of Dandong, Liaoning Province.

The third China-DPRK Economic, Culture and Tourism Expo, closing on Tuesday, has seen 70 million yuan (about 11.6 million U.S. dollars) of trading, agreements on eight investment contracts worth 100 million U.S. dollars, and 60 trade agreements worth 1.26 billion U.S. dollars in total.

Shi Guang, mayor of Dandong, said the expo has drawn 100 DPRK exhibitors, 96 companies from Russia, India, China’s Taiwan and Hong Kong, as well 210 companies from the Chinese mainland. About 250,000 visitors from 20 countries and regions have attended.

The DPRK is developing a Special Economic Zone to help implement its opening-up policy.

Kim Jong Sik, an official with the DPRK Economic Development Association,ssaid the zone is open up to any countries interested in establishing economic and trade relations with the DPRK.

The zone will be dedicated to external trade, assimilating foreign investment and improving the country’s economy, he said.

According to the official, the DPRK has clinched bilateral trade and investment protection agreements with more than 30 countries and mapped out an economic structure including metallurgy, mining, production of construction materials, machinery, garment making, shipbuilding, agriculture and aquaculture.

Kim said the country’s human resources, environment and tourist resources are key factors to appeal to foreign investment. It has been working to optimize investment laws.

The city of Dandong faces the DPRK across the Yalu River. Construction of a bridge linking both sides has been basically completed. It is expected to help facilitate the DPRK’s exchanges with the outside world.

UPDATE 1 (2014-10-18): According to Yonhap:

North Korea is still showing off its products at an annual trade fair with China, but the number of North Korean business entities attending the event this year was about 30 percent less than last year.

The mood is subdued at the five-day trade fair in the Chinese border city of Dandong, reflecting strained political ties between North Korea and China amid Beijing’s signals of displeasure with Pyongyang’s nuclear ambition.

Organizers had said that about 100 North Korean business entities would attend the annual exhibition, but only 68 of them actually attended this year’s event. About 100 North Korean business entities attended last year’s exhibition.

The crowd was also noticeably smaller than it was last year.

“This year, we didn’t bring many products. Instead of selling products, we come here with hopes to meet with Chinese people who want to invest in our factory,” said an official at a North Korean trading firm who spoke on the condition of anonymity.

The decline in North Korea’s participation at the North Korea-China Economic, Trade, Culture and Tourism Expo, which began its five-day run Thursday, underscored the continued strain in bilateral relations, particularly after the North’s third nuclear test in February last year and the execution of the North Korean leader Kim Jong-un’s once-powerful uncle, Jang Song-thaek, who had close ties with Beijing.

In what many analysts believe was a message to North Korea, Chinese President Xi Jinping paid a two-day visit to South Korea in July this year, breaking a long-standing tradition by Chinese heads of state of visiting Pyongyang before Seoul.

North Korea’s bilateral trade with China stood at US$4.05 billion in the first eight months of this year, down 1.1 percent from the same period last year, according to Chinese customs data.

Economic development, along with the expansion of its nuclear capability, has been a new focus of North Korea’s policy under young leader Kim Jong-un, who took over in late 2011 after his father, Kim Jong-il, died.

North Korea, beset by poor infrastructure and international sanctions over its nuclear and missile programs, has announced plans to set up an economic development zone in each of its provinces.

Despite sanctions that discourage foreign investment, Kim Jong-sik, an official at the North’s National Economic Development General Bureau, told an audience at the exhibition that Pyongyang would set up a “one-stop service” that makes it easier for foreigners to invest in the country.

“With regard to economic development zones, we will simplify immigration procedures and build a one-stop service, which has been widely introduced around the world, to try to fully guarantee conveniences of foreign investors,” Kim said.

ORIGINAL POST (2014-10-16): According to Yonhap:

North Korea and China kicked off an annual trade exhibition on Thursday, with about 2,000 Chinese companies attending, organizers said.

The five-day trade fair in the Chinese border city of Dandong, where more than 70 percent of bilateral trade between the two nations is conducted, suggests economic ties between Beijing and Pyongyang remain largely unaffected despite the North’s nuclear and missile programs.

About 100 North Korean business entities will attend the North Korea-China Economic, Trade, Culture and Tourism Expo, the third of its kind.

At last year’s exhibition, North Korea and China signed 93 preliminary deals worth US$1.6 billion. It has not been confirmed whether the deals usually lead to actual shipments.

Besides North Korea and China, companies from Hong Kong, Russia, Thailand and Taiwan will join this year’s exhibition, organizers said.

North Korea’s bilateral trade with China stood at US$4.05 billion in the first eight months of this year, down 1.1 percent from the same period last year, according to Chinese customs data.

North Korea’s exports to China declined 0.8 percent on-year to $1.84 billion during the eight-month period, while imports fell 1.2 percent to $2.21 billion, the data showed.

Here is coverage of the first and second expo.

Read the full story here:
N. Korea, China kick off annual trade fair
Yonhap
2014-10-16

Posted in China, China-DPRK Trade Expo, Economic reform, Foreign direct investment, International trade, Ministry of External Economic Affairs, Special Economic Zones, Statistics, Trade Statistics | Comments Closed

North Korea’s Ministry of External Economic Affairs stresses business at economic development zones is gaining momentum

Friday, October 10th, 2014

Institute for Far Easter Studies (IFES)

In a September 29, 2014 interview by the Choson Sinbo, Director of North Korea’s Ministry of External Economic Affairs, Oh Tae Bong, reported that business in North Korea’s newly established economic development zones (EDZ) is gradually being ramped up. In the interview, Oh mentioned the Jindo Export Processing Zone in Nampo City as an example where foreign investment capital is being prepared for the construction of substructure facilities such as piers and power plants and factories for heavy industry like cement and steel.

The Jindo Export Processing Zone carries out technology transfers and exports completed industrial products to foreign countries. Specifically, Secretary Oh emphasized, “Several countries have expressed great interest in the Jindo Export Processing Zone, and investment contracts have already been signed with a few targets such as Hong Kong.” If the Jindo Export Processing Zone succeeds, it is expected that more processing zones will be developed around the country. If development goes smoothly, the structure of primary export products, including underground resources, would change drastically and promote product diversification.

Secretary Oh also talked about the results achieved through economic cooperation with neighboring countries, saying, “Our nation is consulting with Russian governmental organizations regarding the cooperation issues experienced with railroad reconstruction and modernization.” He mentions that certain agreements have already been made in August 2014, and commented that “Relations between two countries have great effect on foreign economic activity, such as investments.” In other words, despite the US and UN imposed economic sanctions against North Korea, Russia has taken an active stance toward economic cooperation with North Korea.

With regards to the Ministry of External Economic Affairs (formerly the Ministry of Foreign Trade), Director Oh explained that the ministry was newly reorganized in June 2014 to expand the state’s foreign economic activities. According to Oh, the ministry will contribute to the strengthening of economic ties between nations, and take unified command over trade, joint ventures, attraction of foreign capital, and economic development zones.

More specifically, Secretary Oh stated that “Since the Ministry of Trade, the Joint Venture and Investment Commission, and State Economic Development Committee have all been combined into one body responsible for foreign economic enterprises, business complexity has disappeared and unity has been secured.” It is said that, first, the process procedures necessary in economic trade activities have been simplified. Second, the combining of various departments among the three committees into one single organization has improved work efficiency. Finally, the agency-centered system has disappeared, allowing for a much more efficient foreign economic industry.

Posted in Economic Development Zones (2014), Economic reform, Foreign direct investment, Jindo Export Processing Zone, Ministry of External Economic Affairs, Railways, Russia, Special Economic Zones, Transportation | Comments Closed

Second session of 13th Supreme People’s Assembly

Thursday, September 25th, 2014

UPDATE 3 (2014-9-25): Kim Jong-un did not attend the SPA meeting.

According to the Wall Street Journal:

North Korea’s young leader wasn’t in his customary seat as the country convened its rubber-stamp parliament Thursday, adding to South Korean media speculation that Kim Jong Un may be ill.

Only part of the meeting of the Supreme People’s Assembly was shown on state TV, but Mr. Kim wasn’t present and apparently missed the meeting for the first time since he took power after the death of his father Kim Jong Il in December 2011, according to an official for the South’s Unification Ministry who spoke on condition of anonymity because of office rules.

The usually ubiquitous Mr. Kim, the third member of his family to rule the country, hasn’t been seen in state media since attending a Pyongyang concert on Sept. 3. He was shown limping on television in July and again earlier this month, and South Korean media have speculated that Kim has been ill, although there has been no discussion of the absence in the North’s state-run media.

According to Reuters:

Kim, who is considerably overweight, has not featured in state media broadcasts since appearing at a concert alongside his wife and former state entertainer Ri Sol Ju this month.

In July, he was seen walking with a limp at an event with key officials.

But analysts warned against reading too much into Kim’s absence.

“Kim Jong Il didn’t attend every time, either,” said Chris Green, a North Korea expert at Seoul-based Daily NK website. “Moreover, we know that the SPA primarily performs a demonstrative function, it is not a true decision-making body.”

UPDATE 2 (2104-9-25): KCNA reports on the second session of the 13th SPA. Most of the copy is dedicated to continuing education reforms, however at the end of the article, personnel changes at the National Defense Commission are announced:

It recalled Deputy Choe Ryong Hae from the post of vice-chairman of the National Defence Commission (NDC) of the DPRK due to his transfer to other post and Deputy Jang Jong Nam from the post of member of the NDC of the DPRK due to his transfer to other post.

It elected Deputy Hwang Pyong So to fill the vacancy as vice-chairman of the NDC of the DPRK and Deputies Hyon Yong Chol and Ri Pyong Chol to fill the vacancy as members of the NDC of the DPRK at the proposal of Marshal Kim Jong Un.

This list of NDC members (as of October 2013 )can be found here.

Reuters notes:

At the meeting, state media said, Choe Ryong Hae had been removed from the post of vice chairman of the National Defence Commission, a body chaired by Kim, and was replaced by Hwang Pyong So.

Hwang is a member of a powerful faction created in the 1970s under former leader Kim Jong Il, the father of the current leader, to boost a personality cult around his family.

Choe had been widely seen as a new right-hand man to Kim Jong Un after he purged his uncle last year, but had since fallen back into the shadows.

“Hwang’s appointment as NDC Vice Chairman shows that he has truly risen to become the regime’s de facto number two official,” said Michael Madden, a North Korean leadership expert and contributor to the 38 North website.

Hwang was appointed “according to the wishes of Marshall Kim Jong Un”, the North’s official KCNA news agency said.

Here is the full story:

2nd Session of 13th Supreme People’s Assembly of DPRK Held

Pyongyang, September 25 (KCNA) — The 2nd Session of the 13th Supreme People’s Assembly (SPA) of the DPRK was held at the Mansudae Assembly Hall Thursday.

Present there were deputies to the SPA.

Officials of the party, armed forces and power organs, public organizations, ministries, national institutions and the fields of science, education, literature and art, public health and media attended it as observers.

All the participants observed a moment’s silence in memory of President Kim Il Sung and leader Kim Jong Il.

SPA Chairman Choe Thae Bok made an opening address.

The session discussed agenda items on summing up the implementation of “On Enforcing Universal 12-Year Compulsory Education”, the Ordinance of the SPA of the DPRK, and an organizational matter.

Deputy Pak Pong Ju, premier of the Cabinet, made a report on the first agenda item.

The reporter said that the 6th Session of the 12th SPA held in September, Juche 101 (2012) promulgated Ordinance on Enforcing Universal 12-Year Compulsory Education in line with the new requirements of the developing revolution.

According to the report, a work for successfully enforcing the schooling has been dynamically pushed forward as the one involving the whole state, all people and the whole society and signal successes have been made in it.

The work for operating the six-year secondary schools by dividing them into three-year junior secondary schools and three-year senior secondary schools has been wound up in a brief span of time. The first phase programs for the universal 12-year compulsory education were worked out in a matter of one and half years and textbooks of new contents and style were compiled.

Expenditure has been increased in educational field at the state budget, the State Planning Commission, the Ministry of Finance, provincial people’s committees and relevant institutions have ensured funds needed for educational work as planned, thus strengthening the material and technological foundation of schools.

Over the past two years since the promulgation of the ordinance new classrooms have been built or constructed on an expansion basis at schools across the country and many school things produced.

The reporter referred to the tasks facing the field of education.

He underlined the need to build well the ranks of teachers and decisively raise their qualifications and roles.

The general senior secondary schools should teach students with main emphasis on general secondary knowledge and senior secondary technical schools should make preparations in a responsible manner for giving education in basic technology to suit the economic and geographical peculiarities of the relevant areas while giving general education in conformity with the operation of senior secondary technical schools, new type schooling, on a trial basis, he noted.

He also underlined the need to positively push ahead with the work for putting the nation’s universal general secondary education including genius education on a new high stage, reinforce the research forces at educational and scientific research institutions and increase their responsibilities and roles.

He called for improving the conditions and environment for education to be fit for the appearance of a highly civilized socialist country.

Speakers at the session renewed their resolution to decisively improve the quality of education to meet the realistic requirements of the developing education in the age of knowledge-based economy and suit the trend of the world and thus train the younger generation as more dependable revolutionary talents of Juche type equipped with perfect general secondary knowledge, modern basic technological knowledge and creative ability.

The session adopted “On Comprehensively Enforcing Universal 12-Year Compulsory Education and Decisively Improving Its Quality”, the Decision of the SPA of the DPRK.

It discussed the second agenda item.

It recalled Deputy Choe Ryong Hae from the post of vice-chairman of the National Defence Commission (NDC) of the DPRK due to his transfer to other post and Deputy Jang Jong Nam from the post of member of the NDC of the DPRK due to his transfer to other post.

It elected Deputy Hwang Pyong So to fill the vacancy as vice-chairman of the NDC of the DPRK and Deputies Hyon Yong Chol and Ri Pyong Chol to fill the vacancy as members of the NDC of the DPRK at the proposal of Marshal Kim Jong Un.

UPDATE 1 (2014-9-18): The Institute for Far Eastern Studies (IFES) reports on the DPRK’s education policy:

North Korea Prioritizes Budget Support for the Modernization of Education in the Age of Knowledge-Based Economy

A September 6, 2014 article in the Rodong Sinmun reported that First Chairman of the National Defence Commission Kim Jong Un has begun to usher in a “revolution in education for the new century” and emphasized the need to construct a “world power of socialist education in the 21st century” at the 13th National Meeting of Educators held on Sept. 5.

At the meeting, Kim Jong Un’s work, entitled, “Let Us Make a Revolution in Education in the New Century to Glorify Our Country as the One of Education and a Power of Talents” was presented to participants.

In his work, Kim Jong Un advocates for this “revolution in education for the new century,” saying, “Education is part of an unending patriotic plan for the wealth and prosperity of the nation and the people.” The work emphasizes, “How we educate our posterity will be the determining factor of the nation’s power and the propagation of the revolution.”

Kim Jong Un also stated, “The goal to be attained by the revolution in education in the new century is to turn the country into a power of socialist education in the 21st century by bringing up all school youth and children as reliable pillars for the building of a thriving nation and educating all the people to be well versed in science and technology.” To achieve this, Kim Jong Un emphasized that the “decisive strengthening” of secondary education is the fundamental link of the education revolution.

He states, “Just as how trees with the strongest roots grow the perfect fruit, secondary education must be strengthened in order to produce talented individuals and raise the overall level of intelligence of workers.”

He continues, “In order to realize the grand goal of the revolution in education for the new century, the strong leadership guidance provided by the Party’s Juche-based education ideology and policy must be implemented according to the demands of the generation and the development of the revolution.”

More specifically, his work mentions the importance of improving the education system: “An important task facing the revolution in education in the new century is to round off the educational system and improve the guidance and management of the educational work in order to successfully train talents of new type required by the era.”

Kim Jong Un also emphasized the need to rear wholesome, well-rounded children from the time they are young while at home, school, and out in society. Furthermore, he stated, “The education in the age of knowledge-based economy should not be the one for letting students learn existing knowledge but it should be developed in the direction of putting its contents on a practical, comprehensive and modern basis so that students may grasp faster new and useful knowledge and more successfully apply them in practice.”

In order to accomplish this, Kim Jong Un said, “All the fields should regard the educational work as part of their work, always pay deep attention to it and help solve the issues arising in the field of education in a responsible manner.”

ORIGINAL POST (2014-9-4): According to KCNA:

DPRK Supreme People’s Assembly to Be Convened

Pyongyang, September 5 (KCNA) — The Second Session of the 13th Supreme People’s Assembly of the Democratic People’s Republic of Korea will be held in Pyongyang on September 25, Juche 103 (2014).

A relevant decision of the Presidium of the Supreme People’s Assembly was promulgated on Sept. 4.

Information on the first session of the 13th SPA can be found here.

Information on the election of the 13th SPA can be found here.

Here is what the Daily NK has to say:

It is the norm for the SPA to convene each spring to carry out the core responsibilities of ratifying personnel changes and hearing budgetary reports. Two of the more noteworthy results of the meeting in April this year were then-Director of the KPA General Political Department Choe Ryong Hae being made a deputy in the National Defense Commission, and Ri Su Yong being handed the foreign affairs portfolio. Ri, a seasoned diplomat, is scheduled to speak to the UN General Assembly later this month.

Conversely, second sessions do not occur every year as a matter of course; rather, they are convened when necessary for the accomplishment of Workers’ Party objectives. One such session convened on September 25th, 2012, for instance, resulted in wide-ranging changes to the state education system, most notably the addition of a 12th year of mandatory schooling.

As a result, attention is set to focus on personnel shifts and the possibility of major policy announcements.

Posted in Education, National Defense Commission, Supreme Peoples Assembly | Comments Closed

Rodong Sinmun calls for strengthening the cabinet in economic matters

Friday, September 5th, 2014

UPDATE 1 (2014-9-11): IFES reports: North Korea emphasizes innovation using “economic management in our style” approach:

North Korea has announced that the nation’s economic management problem will be solved through their “own style,” once again stressing the superiority of the Socialist self-reliant economic model and reiterating the need to construct a strong and prosperous nation.

A September 3, 2014 editorial in the Rodong Sinmun argues the importance of economic management and leadership, saying that it must be improved to meet the demands of the North Korean economy, which has reached a new turning point in its development.

“Economic Management System in Our Style” is North Korea’s new approach to economic principles originally stemming from Kim Il Sung and Kim Jong Il. The editorial emphasizes that it is a project that will bring real results and continuous development.

Furthermore, the editorial argues that economic management and leadership must be carried out according to objective economic law and scientific reason in order to ensure the greatest possible economic practicality.

The article also emphasizes the role of scientific technology, saying that “Research and development must be actively promoted in all areas and all aspects of the people’s economy. New scientific technology must be integrated into production in order to renovate the economy and meet the demands of the new generation.”

The editorial also calls for conservation of national human and material resources as much as possible, as fundamental problems in building a strong economic nation and improving the life of the people, including the lack of adequate power and food, have yet to be solved.

The roles of economic advising agencies and their workers were emphasized as being especially important. The editorial stresses that these economic advisers must become aware of the deep responsibility they hold, and must work to achieve real results in improving the country’s economic management.

Finally, the role of the Cabinet was also emphasized as the commander of the economy. Specifically, the editorial calls for the strengthening of the Cabinet-centered system, in which the Cabinet should oversee all economic institutions and sectors and create policies accordingly. In addition, the Cabinet’s role to guide companies with scientific business and corporate strategies is emphasized so that they may actively engage in creative business activities.

North Korea has been rolling out economic improvement measures since early 2012, starting with the agriculture sector. Since then, an “independent profit system” has also been introduced in various factories and businesses where managers are allowed more autonomy in managing operations, but are ultimately responsible for the business’s productivity.

Beginning this year, the “business know-how” concept was applied to various farms and factories, and increased profits reportedly have begun to see their way back into the hands of the workers. The workers, whose job performance has increased due to the rise in profits, are seen as the driving force of North Korea’s economic development.

ORIGINAL POST (2014-9-5): Thanks to Choson Exchange for spotting this one. According to Rodong Sinmun (2014-9-4):

Giving Full Play to Advantages and Might of Self-surpporting Economy

It is necessary to settle the issue of economic management by Korean style in order to fully demonstrate the advantages and might of the Juche-oriented socialist self-supporting economy and win the final victory in the drive for building a thriving nation.

The establishment of Korean-style economic management method is, in essence, the work to apply, carry forward and develop the principle and methods of economic management indicated by President Kim Il Sung and leader Kim Jong Il as required by the present times.

It is necessary to hold fast to the socialist principle in improving the economic management.

It is essential to ensure the maximum economic profitability by guiding and managing economy according to the objective laws of economy and scientific reason.

In order to improve the economic management it is important to raise the responsibility and role of the economy guidance institutions and officials.

It is possible to successfully achieve economic development only by working out a scientific economy development strategy, enlisting the natural resources and all potentials of the country to the maximum, ensuring a steady growth of production and keeping the overall balance of economy.

The Cabinet is the economy command of the country.

It is necessary to strengthen the Cabinet responsibility system, system centering on the Cabinet, concentrate all the economic fields and overall economic work on the Cabinet and take measures under the supervision of the Cabinet.

The editorial calls for improving the economic management as required by the developing reality and intended by the party and thus giving fuller play to the advantages of Korean-style socialism and bring about a fresh turn in the building of a thriving nation.

Here is a PDF of the web page should the URL go bad.

It is worth noting briefly that this is what we have seen recently in recent consolidation of the JVIC, SEDC, and Ministry of Foreign Trade into the Ministry of External Economic Affairs.

Posted in Cabinet, Economic reform, Foreign direct investment, Joint Venture Investment Committee (JVIC), Joint Ventures, Ministry of External Economic Affairs, State Economic Development Commission (SEDC) | Comments Closed

Cabinet meeting on economic policy held

Tuesday, July 22nd, 2014

According to Yonhap:

North Korea recently held a top Cabinet meeting to assess its economic policy in the first half of 2014 and discuss a strategy in the coming quarter, according to a news report.

Premier Pak Pong-ju attended the extended Cabinet plenary session, according to the July 13 edition of the Minju Josun obtained by Yonhap News Agency on Tuesday. It did not specify when it was held.

Cabinet members raised the need to minimize flood damage this summer as a top priority and also stressed the importance of enhancing electricity production, said the North Korean government newspaper.

They also called for a concerted effort to develop the metalworking industry and the chemical sector, which the communist nation views as two pillars of its economic growth drive, it added.

In the first half of 2014, the North exceeded its target in several economic sectors, said the newspaper.

Salt production increased by 39,800 tons from last year’s total and fish catches jumped by 17,000 tons, it said.

Read the full story here:
NK officials discuss economic policy in key Cabinet meeting
Yonhap
2014-7-22

Posted in Cabinet, Economic reform | Comments Closed

DPRK creates Ministry of External Economic Affairs

Wednesday, June 18th, 2014

According to KCNA:

Ministry of Foreign Trade Reorganized as Ministry of External Economic Affairs

Pyongyang, June 18, 2014 20:58 KST (KCNA) — The DPRK decided to reorganize the Ministry of Foreign Trade as the Ministry of External Economic Affairs of the DPRK by merging the Joint Venture and Investment Commission of the DPRK and the State Economic Development Committee of the DPRK with it.

The Presidium of the DPRK Supreme People’s Assembly promulgated a decree in this regard on Wednesday.

Here is what Choson Exchange, who predicted the merger, had to say:

We think this is a good thing. Investor agreements, ‘exclusive’ rights and attraction need to be streamlined to prevent multiple ‘exclusive’ rights being sold. While this can bureaucratize the investment process, things really can’t get more bureaucratic than it is now in North Korea.

Here is analysis by the Institute for Far Eastern Studies (IFES) (2014-6-26):

North Korea Establishes “Ministry of External Economic Affairs” to Oversee Economic Cooperation and Attraction of Foreign Capital

On June 18, 2014, North Korea established the “Ministry of External Economic Affairs,” a massive organization that will oversee the state goals of attracting foreign capital and international economic cooperation. The Korean Central News Agency (KCNA) reported that this change came through a decision made by the Presidium of the Supreme People’s Assembly (SPA), who announced, “The Joint Venture and Investment Commission and the State Economic Development Committee have been combined with the Ministry of Foreign Trade and renamed to the Ministry of External Economic Affairs.”

The KCNA did not report on the new ministry’s specific status or duties, nor reveal the name of who has been chosen to lead it. The three organizations that have been combined to create the Ministry of External Economic Affairs are all Cabinet-affiliated economic groups.

The Ministry of Foreign Trade and the Joint Venture and Investment Commission were previously responsible for the nation’s foreign trade and attracting foreign capital, respectively. The State Economic Development Committee, which had its status elevated from the State Economic Development Board in October 2013, oversees the establishment and management of the various regional economic development zones (EDZ). It appears that although the three agencies targeted for the merge were separated by name according to their respective domains, there are several aspects of their duties which overlap with one another.

Therefore, the creation of this new Cabinet-affiliated ministry can be interpreted as an attempt to reach a breakthrough in North Korea’s stagnating international economic cooperation.

In May 2014, Foreign Trade Minister Ri Ryong Nam visited Syria and discussed plans to invigorate mutual investment and economic cooperation between the two nations not only through trade, but through agriculture and various other methods. On May 12, Ri Song Hyok, the director of the Joint Venture and Investment Commission, announced a development plan for the Wonsan-Kumgang Special Tourist Zone at an investment briefing in Pyongyang aimed at attracting foreigners. The management of Special Economic Zones (SEZ) is the responsibility of the State Economic Development Committee.

In 1998, the Ministry of Foreign Trade was established and encompassed the entirety of North Korea’s international economic activities. However, in July 2010, the Joint Venture and Investment Commission was created and oversaw the attraction of foreign capital, and in October 2013 the State Economic Development Committee was established to develop North Korea’s SEZs. With the creation of these additional organizations in 2010 and 2013, it became inevitable for the work and responsibilities of each agency to overlap one another.

While the Kim Jong Un regime has been focusing its efforts on attracting foreign capital and developing SEZs by strongly supporting the two recently established committees, the Ministry of Foreign Trade was unable to operate properly due to international sanctions. This has led to the recurring observation that, in reality, the ministry has become a titular institution.

The establishment of the Ministry of External Economic Affairs can be seen as a measure taken to increase the efficiency of decision-making and implementation of foreign trade-related issues, and to put an end to the confusion and inefficient inter-competition that arose out of the creation of these additional agencies. From the start of his leadership, Kim Jong Un stressed “constructing a strong economic nation” as a top national goal; attraction of foreign capital and international economic cooperation has become the vital factor to achieve the desired rapid economic development, for the lack of internal resources.

The newly appointed Foreign Minister Ri Su Yong—at the 1st session of the 13th SPA in April 2014—is well-versed in economic affairs. His appointment appears as a strategic move to increase the importance of economic cooperation within North Korea’s diplomatic relations. Ri Su Yong was chairman of the Joint Venture and Investment Commission from 2010 to 2012. With the establishment of the Ministry of External Economic Affairs, which will oversee all of the nation’s foreign economic activities, it is expected that North Korea will steadily push to attract additional foreign capital and develop special economic zones.

Here are previous posts on the Ministry of Foreign Trade, the Joint Venture Investment Commission (JVIC), and the State Economic Development Committee (SEDC).

Posted in Joint Venture Investment Committee (JVIC), Ministry of External Economic Affairs, Ministry of Foreign Trade, State Economic Development Commission (SEDC) | Comments Closed

Who uses Rason’s ports? Lease confusion explored (UPDATED)

Wednesday, May 7th, 2014

UPDATE 2 (2014-5-7): The exact legal status of some of the ports remains a mystery. I have attempted to clarify and point out some of the remaining areas of confusion below.

Pictured above (Google Earth): A 2013-9-14 satellite image of Rason Piers 1 and 2. Pier 1 (Top) is used by the Chinese. The Royale Star is docked at Pier 2.

When Jang Song-thaek was purged, among the laundry list of offenses he was alleged to have committed against the regime was this:

Jang made no scruple of committing such act of treachery in May last as selling off the land of the Rason economic and trade zone to a foreign country for a period of five decades under the pretext of paying those debts.

This phrase had Pyongyang watchers abuzz over whether Chinese contracts in Rason were in any danger of being violated by the North Korean government. Of course it was immediately unclear what enterprise(s) would be affected since we are all unaware of any significant deals reached in May of 2013.

A recent statement by a North Korean official in the Hong Kong media has, however, raised the issue of contract credibility in the DPRK yet again.

According to Yonhap:

Chinese companies have not leased piers at a port of North Korea’s free trade zone, a Pyongyang official has told Hong Kong media, raising speculation that the shock execution of the North Korean leader’s uncle might have soured business ties with its key ally.

China reportedly agreed to invest about US$3 billion in developing the free trade zone in North Korea’s northern tip of Rason, formerly known as Rajin and Sonbong, in late 2011. The special trade zone sits across the border from China’s northeastern Jilin province.

There have been media reports that Chinese companies have leased two piers at the Rason port, but Kim Chun-il, a division chief of the port’s foreign business bureau, denied such reports during an interview with Hong Kong-based Phoenix TV.

Asked by a Phoenix TV journalist whether China won the right to exclusively use two piers at the port, Kim replied in Korean, “There are no piers that are specially used by the Chinese side.”

“They (Chinese people) have said so, but we have never formally rented out Pier 1 and Pier 2 to them,” Kim said.

The interview was made during a 72-minute special TV program on the Rason trade zone, which was aired on April 19. The program’s video footage can be seen on the website of Phoenix TV.

Kim said that Russia leased the Pier 3 at the port, adding that North Korea plans to modernize the two piers on its own.

The Chinese media did indeed claim at least once (see here) that they were “using” Piers 1 and 2. And Dr. Bernhard Seliger told us back in September 2012 that the Chinese were using the port, although no lease was signed [see below].

However, it is not true that the North Koreans have never announced an agreement on Pier 1 at Rason. I posted an article (back in March of this year) in which Choe Hyon Chol, section chief of the new State economic Development Commission, stated the following:

The Rajin Port, a transit trade port, is the hub of international cargo transit transportation and transport of exports and imports of entrepreneurs who invested in the zone.

The port has assignments to transport marine products for export from the East Sea of Korea and every kind of cargoes from and to northeast area of China and Far East Region of Russia.

The Rajin Port consists of three wharves; wharf No. 1 is designed to be renovated and operated by China Dalian Chuang Li Co., Ltd. and wharf No.3 by Rason International Container Transport J. V. Company to be set up according to the contract with Russian Rail Trade Co., Ltd.

I cannot imagine that a Chinese company is going to renovate and operate the pier without a clear contract. Of course the status of that contract is now called into question. Has the Chinese firm pulled out? Have the North Koreans canceled the contract? Are North Korean individuals from different agencies just not on the same page? Who knows?

Still no word on Pier No. 2.

Great recent photos of Rason port by Ray Cunningham here.

You can read the Yonhap story here:
N. Korean official says no piers for China at special trade zone
Yonhap
2014-5-2

UPDATE 1 (2012-9-5): It appears the information in the original post is out-of-date now. So here is an update:

Pictured Above (Google Earth): Rajin Port

Dr. Bernhard Seliger of the Hanns Seidel Foundation writes in with an update on the Rajin Port:

The 80 year old port has three piers, of which the No. 3 pier is used by the Russians. They have a long-term lease (50 years starting in 2008) and while they are currently doing some work there, it is not being used for exports.

China is interested in using Pier No.1 (where it rents a warehouse to store coal) and Pier No. 2 (currently in use by the Koreans). Plans have also been expressed (now cancelled) to build 2 new piers (No. 4 and 5) (See here). For many years the Chinese and North Korean governments have negotiated a pier rental agreement, but for now there is no concrete result–though at numerous times it has been maintained that China already rented the port. What exactly the problems are is not known. For now China uses the port to bring coal from the northernmost Heilongang Province to southern China via a sea route, an event which took place twice this year.

Theoretically, the port as a handling capacity of 3 million sq. tons, however the maximum real handling was 800.000 tons in 1979, while last year it was 200.000 tons. The depth of the harbor is 9 m.

In a report from Xinhua (2012-8-28), the Chinese assert they are using ports 1 and 2.

China […] was using No. 1 and 2 piers, while Russia had leased No. 3 pier, said an official in charge of foreign affairs of the port.

So there is some discrepancy between the Chinese account and Dr. Seliger.

ORIGINAL POST (2010-5-23): What are the three piers at Rason used for?

The City of Rajin (Rason) has three ports (pictured above–click for large version). According to a 1998 UNDP report, Pier No. 1 (on the right) was known as the “Russian-Japanese Bulk Fertilizer Terminal. It has now been leased by the Chinese. Port No. 3 (left) was formerly known as the Rajin Alumina Terminal. This is now leased by the Russians (see here). A fellow North Korea-watcher tells me that Pier No. 2 is reserved for the North Koreans.

KBS recently ran a video on recent changes in Rason. I have uploaded the segment to YouTube (Apologies to readers in China). You can see the video here.

On a side note, if anyone in China has the time and savvy to rip videos from my YouTube account and re-post them on Youku please go for it.

Posted in China, Economic reform, Foreign direct investment, Rason Economic and Trade Zone (Rajin-Sonbong), Sea shipping, State Economic Development Commission (SEDC), Transportation | 2 Comments »

Knowledge sharing SEZ conference held

Friday, May 2nd, 2014

In September 2013 the DPRK held its first conference on economic development zones under the just announced State Economic Development Commission. Read all about it here.

On May 2, 2014, KCNA announced a second conference:

Knowledge Sharing on SEZs in DPRK Held

Pyongyang, May 2 (KCNA) — There took place at Yanggakdo International Hotel on Friday knowledge sharing on SEZs in the DPRK hosted by the Korea Economic Development Association [AKA State Economic Development Commission/Association].

It was attended by Ri Chol Sok, vice-chairman of the association, and its other officials and experts and teachers and researchers at scientific and educational institutions and officials concerned.

Also present there were Kyung-Ae Park, professor at University of British Columbia, Canada, prestigious experts on special economic zones from China, India, Canada, Philippines and the U.S. and foreign diplomatic envoys and representatives of international bodies here and foreign embassy officials.

Ri Chol Sok and Kyung-Ae Park made speeches.

The speakers congratulated those participants on the successful holding of the event and mentioned the importance of the exchange of each other’s experience and cooperation in developing special economic zones and managing and operating them.

They said that the event would help to broaden experts’ vision and expand the development work and also contribute to promoting the international exchange and cooperation.

Then followed speeches.

Introduced at the event were the present situation in some economic development zones of the DPRK and their prospect and policies of preferential treatment and the master plan for Wonsan-Kumgangsan area.

The results of researches and opinions were exchanged and the BOT widely applied to investment and cooperation and the experience gained by various countries in doing so were discussed.

The event marked an occasion in contributing to turning economic development zones of the DPRK into world-level economic cooperation zones by introducing the advanced experience gained in special economic zones according to the specific conditions of the country.

Uriminzokkiri posted this video of Kyung-Ae Park and Yun Yong-sok:

Here is a loose translation of the video:

Q) What were your initial thoughts on the SEZ’s?
A) It is important to differentiate the North’s SEZ’s from those of other countries to make them attractive to investors. For tourism SEZ’s, many experts have recommended minimizing environmental degradation to promote sustainability. 신평 관광개발구 (신평 tourism SEZ) is a good example where sustainable development can help attract tourists who wish to relax and enjoy the environment.

Q) You teach Poli Sci at UBC, how did you get interested in SEZ’s?
A) Faculty exchanges among economics and management experts are often more profitable than academic discussions on political science. Naturally, those who participated in the exchange programs were talking about SEZ’s more often than any other topics.

Q) What are your thoughts on the prospects of the North’s SEZ’s ?
A) I was impressed how the entire country is putting an effort into SEZ projects. This is a very positive aspect, but we need to think about making these SEZ’s more attractive than SEZ’s of other countries.

Here is another translation:

Dr. Park: The key issue of establishing economic development zones (EDZs) is how to make ‘our’ zones distinctive from other countries. In the tourism industry, for example, it has been suggested that simply constructing new buildings, hotels, and condominiums does not offer any competitive advantage because others have been doing the same way. Instead, a better way is to ask ourselves what makes our zones unique so that they could attract people and investment. For North Korea, it is indeed the beauty of the wilderness and untouched nature that makes the country remarkable.

While teaching political science in University of British Columbia, I’ve come to realize that the South-North exchange should first take place in the area where both have mutual interests and the outcome can be mutually beneficial. Exchanges among the political scientists will unlikely be productive; so instead, we have been inviting numerous North Korean professors of economics and business, including those from Kim Il-Sung University, Wonsan University of Economics, and Pyongyang University of Foreign Studies. And this year we are extending our invitation for the fourth time.

Yet, compared to the number of North Korean experts coming to Canada, not many scholars have visited the North from our end as part of an exchange program. While we were considering ways to facilitate an academic exchange at a greater level, we were lucky to get in touch with Korea Economic Development Association (KEDA; aka Chosun Economic Development Committee). We had a meeting on special economic zones last October […] and this was a follow-up meeting after the successful outcome of the first one. Canada-DPRK Knowledge Partnership Program (KPP) organized the event, and KEDA co-hosted the meeting.

Many experts have suggested that more study is needed to make North Korean economic zones distinctive, unique, and attractive. The critical issue remains as to how to attract foreign capital and investment. Despite many challenges North Korea may confront, we believe that passion and diligence of North Koreans will prove fruitful.

Posted in Canada, Economic Development Zones (2013), Education, Special Economic Zones, State Economic Development Commission (SEDC) | Comments Closed

Politburo meeting and 1st session of the 13th SPA

Thursday, April 10th, 2014

UPDATE 3 (2014-4-23): Michael Madden and Ruediger Frank have published articles in 38 north analyzing the “election” results.

UPDATE 2 (2014-4-17): 3th Supreme People’s Assembly Holds First Session, Few Changes in Pak Pong Ju’s Cabinet
Institute for Far Eastern Studies (IFES)

The first session of the 13th Supreme People’s Assembly (SPA) held by the Kim Jong Un regime concluded on April 9, 2014 showing no major personnel changes within the Cabinet. The existing regime will continue to lead the North Korean economy, and their recent economic reform measures are expected to gain momentum.

At this session, it was decided that North Korea will retain Prime Minister Pak Pong Ju as leader of the Cabinet, and that many of the other high-level officials will maintain their positions in economic affairs.

It is therefore expected that the Kim Jong Un regime’s economic reform measures, such as the expansion of farmers’ authority (through the Subworkteam Management System), the construction of economic development zones (EDZs), and the system promoting the independent economic management of factories (and all other production facilities), will be implemented smoothly and stably.

It is also expected that North Korea will ramp up the implementation of its economic management improvement measures due to their recent success, which exceeded the state’s expectations. This directly coincides with the decision to retain Pak Pong Ju as Premier, and is an effort to secure the stability, continuity and longevity of North Korean economic policy.

Only three high-level officials in the economic department were replaced at this first session of the SPA: Han Yong Guk replaced Kim Kwang Yong as the forestry minister, Kim Chon Gyun replaced Paek Ryong Chon as the President of the Central Bank, and Ri Je Son was appointed as the Minister of Atomic Energy Industry.

The Ministry of Atomic Energy Industry is presumed to be an expanded and reformed version of the General Bureau of Atomic Energy (GBAE), which previously operated as an entity under the Cabinet. Established in 2013 at the 7th session of the 12th SPA, the Ministry of Atomic Energy Industry is responsible for North Korea’s nuclear program, nuclear policy, and the “byungjin line”, a policy that emphasizes the parallel development of economy and nuclear weaponry.

In 2013, the Korean Central News Agency (KCNA) announced the establishment of the Ministry of Atomic Energy Industry, saying it will “both modernize and systemize the nation’s atomic energy industry.” In the announcement, the KCNA also said, “because [the Ministry] has been founded on a firm base of cutting-edge technology, both the production and quality of nuclear materials will increase, and development will be made in self-sustaining nuclear powered industries.”

The newly appointed Ri Je Son has served as the General Director of the GBAE since 1997, and was the target of United Nations Security Council sanctions after North Korea’s second nuclear test in 2009.

Han Yong Guk has risen up through the ranks in the forestry sector, and Kim Chon Gyun has previously served as both director and vice-president of the Central Bank of the DPRK.

These small changes in Cabinet personnel do in fact signify efforts to maintain the stability of the nation’s economic policy, but the fact that these changes are so few in number also signifies that, after the execution of Jang Song Thaek, “re-shuffling” of personnel within the Cabinet had already taken place to some degree.

Before his execution, Jang Song Thaek had influences on many ministries within the Cabinet, including the ministries of commerce, metal and coal industries, and the Cabinet’s Extractive Industries. Since his execution, North Korea has replaced the head of these ministries.

UPDATE 1 [1st session of SPA] (2014-4-9): KCNA has posted many articles on the first session of the SPA. I have archived the important ones below:

Story 1: 1st Session of 13th SPA of DPRK Held (KCNA) (PDF). Notes: Kim Jong-un elected as First Chairman of the NDC. State posts determined. One interesting agenda item was not elaborated on: “2. Election of the State Guidance Organ of the DPRK”.

Story 2: DPRK National Defence Commission Elected (KCNA):

Pyongyang, April 9 (KCNA) — The following National Defence Commission was elected at the First Session of the 13th Supreme People’s Assembly of the DPRK:

First chairman of the NDC of the DPRK Kim Jong Un

Vice-chairmen of the NDC Choe Ryong Hae, Ri Yong Mu and O Kuk Ryol

Members of the NDC Jang Jong Nam, Pak To Chun, Kim Won Hong, Choe Pu Il and Jo Chun Ryong.

Yonhap reports on Choe Ryong-hae:

Choe Ryong-hae, a top military official, has become a truly influential figure second to only North Korean leader Kim Jong-un on April 9 when the newly launched North Korean parliament elected him as new vice chairman of the communist country’s most powerful body, National Defense Commission (NDC), during its first session.

…

Choe, the director of the North Korean army’s General Political Bureau, took up the mighty post that had been kept vacant since Jang Song-thaek, a powerful uncle of the North Korean leader, was executed on treason charges in December.

…

With his NDC appointment, Choe has grabbed all of the No. 2 positions of the North’s three core power bodies, the Political Bureau of the Workers’ Party’s Central Committee and the party’s Central Military Commission.

Story 3: Presidium of Supreme People’s Assembly of DPRK Elected (KCNA):

Pyongyang, April 9 (KCNA) — The following Presidium of the Supreme People’s Assembly of the DPRK was elected at the First Session of the 13th Supreme People’s Assembly:

President of the Presidium of the SPA of the DPRK Kim Yong Nam

Its Vice-Presidents Yang Hyong Sop and Kim Yong Dae

Its Honorary Vice-Presidents Kim Yong Ju and Choe Yong Rim

Its Secretary General Hong Son Ok

Its Members Kim Yang Gon, Thae Jong Su, Jon Yong Nam, Hyon Sang Ju, Ri Myong Gil, Kim Jong Sun, Kim Wan Su, Ryu Mi Yong, Kang Myong Chol, Kang Su Rin and Jon Kyong Nam.

Story 4: Members of DPRK Cabinet Appointed (KCNA) (PDF).

Yonhap reports:

Meanwhile, the North apparently opted for stability by making no dramatic changes in a Cabinet shakeup, which the parliament rubber-stamped during its session.

The North’s octogenarian titular head of state, Kim Yong-nam, retained his position as president of the Presidium of the Supreme People’s Assembly, with Premier Pak Pong-ju also keeping his job.

What is notable is that the North replaced its foreign minister. Ri Su-yong, a former ambassador to Switzerland, was named to replace Pak Ui-chun as the top diplomat of the communist country.

Ri is known to have served as a guardian of leader Kim and his younger sister Kim Yo-jong when they studied at an international school in Switzerland in the 1990s.

NK News reports on other changes:

Mun Myong Hak replaced Ri Yong Yong as Minister of Coal Industry
Kim Yong Gwang replaced Han Hyo Yon as Minister of Metallurgical Industry
Ri Hak Chol replaced Kang Min Chol as Minister of Mining Industry
Han Ryong Guk replaced Kim Kwang Yong as Minister of Forestry
Kim Kyong Nam replaced Ri Song Ho as Minister of Commerce
Pak Chun Nam replaced Hong Kwang Sun as Minister of Culture
Kim Chon Gyun replaced Paek Ryong Chon as President of the Central Bank
Pak Myong Chol replaced Kim Pyong Ryul as President of the Supreme Court (not a cabinet position)

Story 5: Director of Supreme Public Prosecutors Office Appointed, President of Supreme Court Elected (KCNA)

Pyongyang, April 9 (KCNA) — The 1st Session of the 13th Supreme People’s Assembly of the DPRK appointed Jang Pyong Gyu as director of the Supreme Public Prosecutors Office and elected Pak Myong Chol as president of the Supreme Court.

Story 6: Panel Committees of SPA of DPRK Elected (KCNA)

The following Legislation Committee and Budget Committee, panel committees of the Supreme People’s Assembly of the DPRK, were elected at the 1st Session of the 13th SPA of the DPRK:

Legislation Committee of the SPA of the DPRK
Chairman Choe Pu Il
Members Jang Pyong Gyu, Pak Myong Chol, Pak Thae Dok, Thae Hyong Chol, Cha Hui Rim and Pak Myong Guk.

Budget Committee of the SPA of the DPRK
Chairman O Su Yong
Members Pak Yong Ho, Kye Yong Sam, Hong So Hon, Kim Hui Suk, Choe Yong Il and Pak Hyong Ryol.

Story 7: Statistics on the SPA members (KCNA)

The elected deputies to the SPA are the genuine people’s representatives who are devoting themselves to strengthening the DPRK government and accomplishing the revolutionary cause of Juche, remaining loyal to the idea and guidance of supreme leader Kim Jong Un.

Among the SPA deputies are anti-Japanese revolutionary fighters who participated in the anti-Japanese armed struggle led by President Kim Il Sung and veterans of the Fatherland Liberation War.

17.2 percent of the deputies are service personnel who are performing shining feats at posts to defend the country and worksites to build a rich and powerful country, true to the Songun revolutionary leadership of Supreme Commander Kim Jong Un.

Workers account for 12. 7 percent, cooperative farmers 11.1 percent and women 16.3 percent. They are bringing about shining labor innovations in the van of the heroic advance to build a thriving socialist nation.

Also among the deputies are officials of the party and power bodies, administrative and economic organs and working people’s organizations, those in the fields of science, education, public health, literature and arts and media and various other sectors and those of the General Association of Korean Residents in Japan and organizations under it.

Winners of Order of Kim Il Sung, Kim Il Sung Prize, Order of Kim Jong Il and Kim Jong Il Prize account for 30.2 percent, recipients of the titles of the DPRK hero and labor hero 14. 6 percent and recipients of academic degrees and titles including professors and doctors and scientists, technicians and experts 91.7 percent.

3.9 percent of the deputies are aged below 39, 66.9 percent 40-59, 29.2 percent above 60 and 94.2 percent of them graduated from universities or received similar level of education.

Story 8: Report on Implementation of State Budget for 2013 and State Budget for 2014 (KCNA)(PDF).

16% of the total expenditure was spent for national defence, thus contributing to smashing the enemies’ reckless moves to ignite a nuclear war and the anti-DPRK confrontation racket and powerfully demonstrating the dignity and might of the DPRK.

45.2% of the total expenditure went to the field of economic construction to consolidate the foundation of the self-supporting economy, bring a surge in the production in various fields of the national economy including agriculture and usher in a heyday in construction.

38.8% of the total expenditure was spent for the field of cultural construction including education, healthcare, sports and music and arts, contributing to the enforcement of popular policies and the building of a highly-civilized socialist nation.

This year’s state budgetary revenue and expenditure have been shaped in such a manner as to meet the financial needs for realizing the Party’s plan to build a thriving nation as early as possible and carrying out the national economy plan.

The state budgetary revenue is expected to grow 4.3% over last year. Out of this, transaction revenue is expected to swell 4.5%, the revenue from the profits of state enterprises 7.9%, that from the profits of cooperative organizations 4.8%, that from real estate rent 9.5%, that from social insurance 5.1%, that from sale of properties and price differential 2.4%, other revenues 1.7% and the revenue from economic and trade zone 5.1%.

This year’s state budget envisages that provinces, cities and counties will ensure the expenditure with their own incomes and deliver revenue to the national budget for their fulfillment of the plan for local budgetary revenue and expenditure.

The state budgetary expenditure is expected to increase 6.5% over last year. Out of this, spending for the fields of agriculture, stockbreeding and fishery is expected to go up 5.1%, that for capital construction 4.3%, that for science and technology 3.6%, that for the vanguard sector of the national economy and the fields of basic industry and light industry 5.2%, that for education 5.6%, that for healthcare 2.2%, that for social insurance and social security 1.4%, that for sports 17.1% and that for culture 1.3%.

15.9% of the total state budgetary expenditure is expected to be spent for national defence this year and a huge amount of educational aid fund and stipends is to be sent to the children of Koreans in Japan.

According to the Wall Street Journal’s Korea Real Time:

The last publicly available figure for Pyongyang’s annual budget, in 2008, was 451.3 billion North Korean won. Based on the latest available market rate, that would be roughly equivalent to $61.8 million. Using that figure to calculate spending on national defense would give a figure of around $8.65 million.

Here are the pictured from Rodong Sinmun:

ADDITIONAL INFORMATION:

1. The Daily NK has an interview with a participant in the 12th SPA.

2. Here is 13th SPA “election” coverage.

ORIGINAL POST [Politburo] (2014-4-9): KCNA reports on the meeting of the Political Bureau of the Worker’s Party:

Meeting of Political Bureau of C.C., WPK Held under Guidance of Kim Jong Un

Pyongyang, April 8 (KCNA) — A meeting of the Political Bureau of the Central Committee of the Workers’ Party of Korea was held under the guidance of Kim Jong Un, first secretary of the Workers’ Party of Korea, first chairman of the National Defence Commission of the DPRK and supreme commander of the Korean People’s Army, on April 8.

It was attended by members of the Presidium of the Political Bureau of the C.C., the WPK, and members and alternate members of the Political Bureau of the C.C., the WPK.

Vice-premiers of the Cabinet and some department directors, first vice-department directors and vice-department directors of the C.C., the WPK were present at the meeting as observers.

The meeting discussed the issue of reinforcing the organization for increasing the leadership role and function of the Party as required by the developing revolution.

It discussed a proposal for forming the state leadership body to be submitted to the First Session of the 13th Supreme People’s Assembly.

It also discussed an organizational matter.

Decisions on the relevant agenda items were unanimously adopted at the meeting.

Kim Jong Un at the meeting set forth important tasks to be fulfilled to further strengthen the WPK to be an invincible revolutionary party, firmly protect the dignity and sovereignty of the country and dynamically accelerate the work to improve the standard of the people’s living and the building of a rich and powerful country.

The meeting held under the guidance of Kim Jong Un marks a historic occasion that encouraged the service personnel and people in the struggle to dynamically advance along the road of independence, Songun and socialism under the uplifted banner of great Kimilsungism-Kimjongilism and provided an important milestone in bringing earlier the building of a thriving nation and a great revolutionary event of national reunification.

Here are photos from Rodong Sinmun:

Here is coverage in the Daily NK.

Read the full story here:
Meeting of Political Bureau of C.C., WPK Held under Guidance of Kim Jong Un
KCNA
2014-4-8

Posted in Cabinet, Finance, Fiscal & monetary policy, Political Bureau, State Offices, Supreme Peoples Assembly, Worker's Party | Comments Closed

Sinuiju-Kaesong high-speed rail project (UPDATED)

Monday, April 7th, 2014

Pictured Above (KBS): A map of the planned high-speed rail project

UPDATE 4 (2014-4-29): The Choson Ilbo reports that Ms. Choi has returned from the DPRK:

The Organisation for Co-Operation between Railways (OSJD) has decided to hold two major meetings, the Commission on Freight Traffic in 2015 and Conference of General Directors in 2019, in Seoul.

KORAIL president Choi Yeon-hye made the announcement at Gimpo Airport on Monday after returning from an OSJD meeting in Pyongyang. It is unprecedented for an associate rather than full member to host the conference.

The OSJD is an organization of 27 former and current communist countries, including Russia, China and North Korea.

“We don’t know yet whether the North will attend the meetings in 2015 and 2019, but the participants unanimously decided to hold them here, and the North didn’t oppose it, so we expect them to come,” she added.

The annual conference of general directors alternatively takes place in Asia and Europe, but exceptionally the 2019 meeting will also be held in Asia following the 2018 meeting in Vietnam.

The government here is keen to work with the railway body to link South Korea to Eurasia via North Korea.

Here is coverage in Yonhap.

UPDATE 3 (2014-4-22): The Choson Ilbo reports that the head of Korail has left for the DPRK:

KORAIL president Choi Yeon-hye is appropriately on her way to North Korea by train.

Choi left for Pyongyang on a train from Beijing on Monday afternoon to attend a meeting of the Organisation for Co-Operation between Railways (OSJD), KORAIL said Monday.

The OSJD is an organization of 27 former and current communist countries, including Russia, China and North Korea.

The government approved Choi’s request to visit to the North on Sunday after the North sent her a letter of invitation. She got a visa from the North Korean Embassy in Beijing the same day.

The train runs from Beijing to the North Korean border city of Sinuiju in 24 hours, where she switches trains for the 225 km stretch to Pyongyang.

A KORAIL executive said, “Choi’s visit is the North’s first approval of a South Korean official’s visit” since the South imposed sanctions against North Korea in 2010.

She is the first senior South Korean figure to visit Pyongyang since the inter-Korean summit in 2007.

President Park Geun-hye is keen to connect South Korea to Eurasia by railway, which requires cooperation from the OSJD.

Here is coverage in Yonhap.

UPDATE 2 (2014-4-7): KBS has a report (in Korean) on the project. See the report here. Seoul Village has translated some of the details.

Construction would last 6 years, with two waves that have not been fully detailed yet:
1st stretches: 80 km
From the North: Sinujiu Station – Tongrim Station (Sinujiu-Dongnim, 40 km)
From the South: Kaesong – Yonan (Gaesong-Yeonan, 40 km)
2nd stretches: 296 km

From the North: Tongrim – Chongju – Sinanju – Pyongyang (Dongnim-Jeongju-Sinanju-Pyongyang, 147 km)
From the South: Yonan – Haeju – Sariwon – Pyongyang (Yeonan-Haeju-Sariwon-Pyongyang, 149 km)

UPDATE 1 (2014-4-7): Korail may be involved in the high-speed rail project. According to the Hankyoreh:

News of a recent agreement between North Korea and China to build an international high-speed railroad and highway between Sinuiju (a city on the Chinese border) and Kaesong is raising questions about the fate of a scheduled North Korea visit on Apr. 24 by Korail CEO Choi Yeon-hye.

If Korail does participate in the project, it would bring South Korea one step closer to the Asian continent via the North Korea-China high-speed rail project, which comes on the heels on North Korea‘s Rajin-Hasan development project with Russia.

South Korean businesspeople in China who are closely involved in the high-speed rail project said on Apr. 6 that a contract for the railway/highway construction was signed in Beijing on Feb. 24 by North Korea’s State Economic Development Commission, chaired by Kim Ki-sok, and a Chinese consortium headed by the Shangdi Guanqun investment company. The line would be 376 km in length and connect Sinuiju with Chongju, Sukchon, Pyongyang, Haeju, and Kaesong, with the five-year construction beginning in 2018 with a budget of US$21 billion, or around 22 trillion won. The method would be a Build-Operate-Transfer (BOT) arrangement, with an international North Korean-Chinese consortium providing the investment and delivering the line to North Korea once the costs are recouped. A survey team for the Chinese consortium is reportedly scheduled to visit North Korea in late April.

The chances of South Korea participating are higher in the wake of President Park Geun-hye’s speech in Dresden on Mar. 31. There, she declared that an “organic linkage between South Korean capital and technology and North Korean resources and labor could contribute to building a future economic community on the Korean Peninsula.”

She also said she planned to “achieve shared development for the Korean Peninsula and Northeast Asia both through collaborations with North Korea and Russia, as with the current Rajin-Hasan distribution project, and collaborations with North Korea and China focusing on Sinuiju.”

Further increasing the possibility of South Korean participation are guidelines handed down in January by North Korean leader Kim Jong-un, who said North Korea should work with China and South Korea on an international line through a privately funded BOT arrangement.

Meanwhile, Korail is awaiting Ministry of Unification approval on a request to allow CEO Choi Yeon-hye to travel to North Korea to attend a general directors’ conference for the Organisation for Co-Operation between Railways (OSJD), which is scheduled to take place on Apr. 24.

“Our basic position is to approve visits to North Korea in cases of international events,” said an official from the ministry on condition of anonymity, adding that a final decision would be made “after discussions with the other agencies.”

But Korail remains cautious about the possibility of future cooperation, whatever the outcome for Choi’s visit ends up being. Speaking on condition of anonymity, a source there said, “We’re preparing data on things like a plan to expand cargo transport for different continental rail zones, which is one of the topics on the agenda at the OSJD meeting.”

“We’ve never officially examined the North Korea-China high-speed rail project, and it doesn’t look like it would be economically feasible anyway unless a section is opened between Seoul and Kaesong,” the source added. “Anyway, the government has not decided on participating, and that‘s not a matter that KORAIL can weigh in on by itself.”

ORIGINAL POST (2013-12-20): High Speed Rail and Road Connecting Kaesong-Pyongyang-Sinuiju to be Built
Institute for Far Eastern Studies (IFES)
2013-12-20

On December 8, 2013, North Korea reached an agreement with a consortium of international companies to construct highways and high-speed railroad connecting Kaesong, Pyongyang, and Sinuiju.

The agreement between North Korean authorities and a consortium representing the Chinese companies was signed in both Chinese and Korean by Kim Chol Jin, Vice-Chairman of State Economic Commission of North Korea and representatives from state-owned enterprises of China’s Commerce Department.

The construction period was designated as five years and businesses will operate the rail for 30 years and return the operation rights to North Korean government in the form of a BOT (build-operate-transfer) project, worth a total of 15 trillion KRW. The high-speed rail will be a double-track system with a speed of more than 200km per hour, and the construction of four-lane highway will be built adjacent to the railway. Fence will also be built to prevent unauthorized access to the railway.

The construction zone will cover the areas of Kaesong, Haeju, Sariwon, Pyongyang, Sinanju, Jongju and Sinuiju, approximately 400 km in total length and from Sinuiju will connect to Chinese cities via railway while from Jongju will connect with the Rajin-Sonbong SEZ (special economic zone) to the Russian Khasan railway to be linked with the Eurasian railway.

The consortium working group is planning to visit North Korea to confirm the specific construction plans. It was tentatively decided that the formal contract be signed in Pyongyang based on the proposal submitted by the consortium.

The subject of agreement is a multinational consortium of international investment group, which also includes a South Korean company, which is known as a company involved in North Korean mineral resources development. Once the project is in progress, there are plans of bringing other South Korean companies into the project.

In exchange, businesses will obtain the development rights of extracting gold from Hyesan City (Ryanggang Province) and iron ore in Musan (North Hamgyong Province). North Korean officials are claiming that this project was the legacy of Kim Jong Il and welcomed the participation of South Korean companies.

In March 2011, former North Korean leader Kim Jong Il is reported to have instructed that inter-Korean exchange programs be continued. Upon the completion of the railways and highways, the Presidium of the Supreme People’s Assembly will proclaim international road operations to ensure its stable operation.

The operation rights will be given to the consortium for 30 years while the ownership rights will be shared by the North Korean government and the consortium.

China is also building new railway lines up towards the North Korean border.

Posted in China, Economic reform, Foreign direct investment, Railways, State Economic Development Commission (SEDC), Transportation | Comments Closed

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