North Korean Economy Watch

Pictured above (Google Earth): A map of the Khasan-Rajin Port rail service.

UPDATE 8 (2011-10-13): According to KCNA, the Rajin-Khasan trial train has been launched:

A ceremony of running a trial train between Rajin and Khasan section took place outside the DPRK-Russia Friendship Pavilion in the area of Tumangang Station in Rason City, North Hamgyong Province.

Present there from the DPRK side were Vice Minister of Railways Ju Jae Dok, Vice-Chairman of the Rason City People’s Committee Hwang Chol Nam, officials in the field of the railways and working people in Rason.

Present from the Russian side were Valery A. Reshetnikov, senior vice president of the “Russian Railways” Company, Igor A. Sagitov, minister-councilor of the Russian embassy here, Vyacheslav Tsupikov, Russian consul-general to Chongjin, those related to the railways and other guests.

Valery A. Reshetnikov, addressing the ceremony, said the bilateral cooperation in the railway transport now in progress amid the care of the top leaders of the two countries is a significant event in opening a new service line for freight transport.

The trial train service has greater significance as it is timed to coincide with the 63rd anniversary of the establishment of the DPRK-Russia diplomatic ties, he added.

Ju Jae Dok in his speech at the ceremony said that the train service will be recorded in the history of development of railway transport of the two countries.

The Rajin-Khasan freight transport will make contributions to the economic exchange not only between the DPRK and Russia but also Northeast Asia and Europe, he added.

Then followed congratulatory speeches.

The trial train departed for Khasan.

Video of the train ceremony can be seen here (KCNA).

UPDATE 7 (2011-9-15): Russia to send first train on reconstructed line. According to Reuters:

Russia will send its first train along a newly repaired railway line to North Korea next month [October 2011], Moscow’s railway monopoly said on Thursday, opening up a rare trade route with the secretive nation.

The link with Russia offers impoverished North Korea at least the prospect of increasing trade with its biggest neighbours after years of international sanctions.

Russian Railways has been renovating the 54km (34 mile) rail line from Russia’s eastern border town of Khasan to the North Korean port of Rajin as part of an agreement reached during North Korean leader Kim Jong-il’s 2001 visit to Russia.

“The first demonstration train will go along the line in October,” a spokesman for Russian Railways said.

Russian Railways has also been building a container terminal in Rajin, which is one of the main centres of North Korea’s Rason Special Economic Zone.

It said the railway and container terminal, built by a joint venture called Rasonkontrans, would be used to export Russian coal and to import goods from South Korea and other Asian countries.

The railway and container terminal will work at 35 percent capacity, or about 70,000 20-foot equivalent units (TEU), in 2011, rising to 140,000 TEU in 2012 and a full capacity of 200,000 TEU in 2013, Russian Railways said.

“There is the opportunity to increase the capacity of the container terminal and the railway,” a spokesman said.

Read the full story here:
Russia to open railway track to North Korea
Reuters
2011-9-15

UPDATE 6 (2010-5-23): Both China and Russia have secured a dock in the Rajin Port. Here is a map of Rajin’s docks.

UPDATE 5 (2008-10-6): Construction has begun!

The Russians have begun upgrading a 54km railway line that, when completed, will connect Khasan, on the Russian border, with the North Korean port cities (and special economic zone) Rajin and Songbon (aka Rason).  The railway line needs to be upgraded because the Russians use a different gauge than the North Koreans.

According to the Donga Ilbo (where the above picture originates as well):

The project will [...] cost [] 195 million U.S. dollars, 72 million dollars of which will be shouldered by Moscow.

The Defense-Technology Blog quotes the project’s price at US$207 million, the difference probably the result of exchange rate calculations.  Additionally:

Eurasia’s largest transcontinental railroad of over 10,000 km will be established as a result.  Cargo transshipment from Asia to Europe along the route will take 14 days, while sea freight shipping takes 45 days. The completion of just the first stage of the project will make it possible to attract up to 100,000 containers annually to the Trans-Siberian railroad, a spokesman for Far Eastern Railways said.

I believe this deal is strategically important to the Russians for numerous reasons:

1. The Russians are happy to have a Pacific port that does not freeze in the winter.  This will open up year-round trade opportunities for Russia’s far east.

2. Bringing the Rason port under Russian “administration” puts Russia in a position to profit from linking South Korea’s economy to Europe (the DPRK will also indirectly benefit no doubt).  This could be accomplished by putting South Korean cargo in Russian ships which could be unloaded in Rason and carted across Siberia into Europe, significantly reducing the time (and cost) required to put South Korean goods on European shelves.

3. As reported earlier (here, here, and here), South Korea is interested in Russian energy resources, specifically oil and natural gas.  Ideally, pipelines could be build from Russia to South Korea (via the DPRK).  Until this pipe dream (pun alert) is a reality, however, the Rajin port will serve as an effective transit hub between the two countries.

4.  Investment in significant economic assets within the DPRK will solidify Russia’s position (vis-a-vis China) as a permanent player in political and economic developments on the Korean peninsula.

As an interesting aside, Yonhap reports that the North Korea just replaced the Minister of Railways:

Jon Kil-su, a career transportation official, has been named North Korea’s new railways minister, according to the country’s official media seen here on Sunday.

Jon, who headed the transportation ministry’s transportation command bureau, has been promoted to replace Kim Yong-sam as the top railways official in the North’s government, the report said. The outgoing minister had served in the post since 1998.

The Pyongyang Times (Link no longer available) reports on the ground-breaking ceremony:

A ground-breaking ceremony for the reconstruction of Rajin-Khasan railways and Rajin Port took place on October 4 in front of the DPRK-Russia Friendship House in the area of Tumangang Railway Station, Rason City.

It was attended by Minister of Railways Jon Kil Su, Deputy Foreign Minister Kung Sok Ung, Deputy Minister of Foreign Trade Ri Myong San, Deputy Minister of Railways Kim Chol, Chairman Kim Su Yol of the Rason City People’s Committee, railway officials and working people in Rason.

Also on hand were a delegation of the Russian Railways Company headed by President Vladimir Yakunin, Governor Sergei Darkin of the Administration of Maritime Territory of the Russian Federation, Deputy Foreign Minister Aleksei Borodavkin, railway officials and other Russians, Russian ambassador Valery Sukhinin and foreign diplomats.

The President of the Russian Railways Company made an opening address.

He said:

“The reconstruction project arranged as a result of the 2001 summit meeting between the two countries has finally entered a practical stage thanks to positive cooperation of railway officials.

“The world’s longest 10 000-kilometre railway route will come into being and 100 000 containers will be transported through it annually from 2013.

“The experimental stage of the large project for connecting the trans-Siberian railways with the trans-Koreans railway is drawing the attention of different countries.”

He hoped that the railway administrations of the two countries would steadily bolster up mutually beneficial cooperation to complete the project as early as possible.

The DPRK Minister of Railways delivered a speech.

He said it was of great significance to hold the ceremony on the threshold of the 60th anniversary of the establishment of diplomatic relations between the two countries, and continued:

“The ground-breaking for the reconstruction of Rajin-Khasan railways whose basis was provided by the DPRK-Russia Moscow Declaration signed by the leaders of the two countries in 2001 is the first step towards realizing a wide range of bilateral cooperation that conforms to the common development and interests of the peoples of the two countries.

“Rajin-Khasan railways will serve as an overland transit of friendship contributing to the development of the economy and transport of both countries and the improvement of people’s welfare and have a sure prospect of developing into an excellent international transport route that ensures transport between Asia and Europe.”

Noting the Rason area would become the region of friendship and cooperation that goes a long way towards travel and well-being of the peoples of the two countries and socio-economic cooperation, he was convinced that bilateral relations of friendship would grow in various fields, railway transport organs of the two countries would make positive cooperation and reconstruction project would be carried out successfully.

The Russian Deputy Foreign Minister made a congratulatory speech.

He said he was happy to take part in the ground-breaking ceremony, noting that it was an important occasion that gave a fresh impetus to the development of bilateral relations of friendship.

He hoped that the project would be completed as scheduled to contribute to the development of bilateral friendship.

He was followed by the Governor of the Administration of Maritime Territory. He said:

“The residents in the Russian Maritime Territory bordering on the DPRK have longed for this moment. The areas of the two countries bordering on the Tuman River have developed good-neighbourly relationship over the past decades.

“When the project is completed, their economic and cultural ties will become closer. The Russian Maritime Territory will make a positive contribution to the implementation of it.”

There were an explanation of the prospects of the project, the inaugural work of laying mixed railways and the unveiling of the monument to the ground-breaking ceremony.

The DPRK government hosted a reception that day.

Read more below:
North Korea-Russia Railway Reconnection
Donga Ilbo
10/7/2008

Russia, North Korea break ground on rail link project
(NSI News Source Info)
10/6/2008

N Korea has replaced its railways minister: report
Yonhap
10/5/2008

UPDATE 4 (2008-8-12): The DPRK and Russia have signed a Russia – Rajin railway agreement. According to the Moscow Times:

UPDATE 3 (2008-3-16): A recent report in NewKerala.com offers a broader description of the work that will need to go into the Russia – Rajin railway line:

Due to different rail gauges of the two countries, the reconstruction requires the laying of new railway tracks, rebuilding of tunnels and bridges, and upgrading of the automatic signal systems.

The handling capacity of the Rajin port, a major harbour in the northeastern part of North Korea, will also be expanded after the reconstruction.

Discussion of the broader strategic concerns can be found here.

The full article can be found here (h/t DPRK Studies):
North Korea, Russia reach agreement on Khasan-Rajin railway
NewKerala.com
3/16/2008

UPDATE 2 (2008-2-1): China and Russia seem to be competing for access to the DPRK’s Rajin (Rason) port. Rajin has ostensibly been open for business for years — with few results to show for it. The Russians and Chinese seem to believe that there is money to be made vis-a-vis Rajin and that the North Koreans are more than likely to cooperate this time around.

UPDATE 1 (2008-1-27): A Russian delegation is in the DPRK to discuss upgrading the 55km railway from the Raijin port to the Russian border. According to the report:

Russian officials have visited North Korea to discuss modernizing the 55-kilometer (34-mile) line between Rajin and Russia’s Khasan. Rajin is also referred to as Najin in South Korea.

A Russian railway spokesman told Agence France-Presse last week a preliminary agreement had been reached with North Korea on renovating the railway section, while North Korea had yet to respond to Russia’s proposal to build a cargo terminal in Rajin.

Russian President Vladimir Putin has expressed interest in connecting the Rajin-Khasan line to the Trans-Siberian Railway.

Last year, North Korea reportedly agreed to open Rajin further to foreign ships in an attempt to make it a regional transport hub.

South Korea sees the port project as an efficient alternative to renovating dilapidated rail networks running the length of North Korea and linking them to the Russian railway.

Reconstruction of North Korea’s railways would cost about 2.5 billion dollars, according to Russian estimates.

China has also expressed an interest in securing access to Rajin’s port. According to the Joong Ang Daily:

Beijing also has its eye on the North Korean port, which it envisions as part of its grand design to build a transport network that stretches from the Indian Ocean to the North Pacific.

“Najin Port is near the Jilin area and China’s own ports in the area have already reached their full capacity,” a government official said yesterday.

Beijing has recently notified Pyongyang that it is willing to spend $1 billion to develop port facilities, build railroads connecting the port to China and improve existing infrastructure such as highways, the official said.

In a report published earlier this year, Cho Myung-chul, a researcher at the Korea Institute for International Economic Policy, predicted that China would use investments in the North’s ports and railroads to extend its own infrastructure for export and import purposes. China has made similar investments in Burma and Bangladesh, among others.

ORIGINAL POST (2006-10-25): Russia announces plans to connect DPRK to Trans Siberian Railway.  According to Bloomberg (excerpt):

Pictured above (Google Earth): Komsan Station in Hyesan

According to Open Radio:

A source in Yanggang province reported May 4th, “A Hyesan – Pyongyang train derailed on May 2nd somewhere in the region of Geomsan station in Hyesan killing at least ten passengers and injuring many others.” The injured are being treated at a nearby hospital but the dead have not been formally identified and are yet to be transferred home.

“The North Korean police and security agencies are both investigating the case,” said the source. “So far they have been unable to establish the incident’s cause.” They are said to be investigating the possibility that a track sleeper became unhinged.

The possibility, however, that this is not merely an accidental occurrence is raised by the fact that the Pyongyang – Hyesan line is known by the population not just to be a route used by citizens travelling between the cities but is also one of national significance.

There are both a security agency detention center and a munitions factory in the Geomsan area of Hyesan. Before he died Kim Il-sung travelled only via station number 1 at Geomsan.

Five of twelve passenger carriages were overturned when they became disconnected from a connecting link. Subsequent repair operations have caused much disruption to regular line service. Stranded passengers are staying in the station’s vicinity as locals take advantage of the situation, catering to them with impromptu vending operations.

Read the full story here:

Ten Die in Pyongyang – Hyesan Rail Incident
Open Radio
2011-5-6

UPDATE 1 (2011-4-15): Andrei Lankov reminds us of some historical lessons when it comes to Pyongyang-ology.  According to his article in the Asia Times:

Last week, world media reported that two key North Korean officials were executed a few months ago. One was Kim Yong-sam, the former minister for railways. Reportedly, he was held responsible for a mysterious explosion that in 2004 wiped out the entire railway station of Ryongchon a few hours after the armored train of Dear Leader Kim Jong-il had passed through – a suspected assassination attempt.

The other North Korean official was Mun Il-bong, the finance minister. His alleged crime was the inability to handle the currency reform that in late 2009 nearly brought the North Korean economy to a complete standstill.

This news was first broken by the major South Korean newspaper Chosun Ilbo, which cited its North Korean sources. The newspaper has good connections among the North Korean refugee community, whose members are in touch with officials in North Korea.

These reports were widely discussed in the media, and produced the usual wave of speculation about supposed factional disagreements in the North Korean leadership. However, such speculation might be premature. There is no way to verify with sufficient confidence whether the alleged executions actually took place. We do not know – and, in all probability, are not going to know anytime soon – whether the North Korean ex-ministers indeed met their ends.

Those who do not deal with North Korea seldom realize how little outside observers know about its high politics. North Korean media stretch the definition of state secret to an extent that would likely appear excessive even to Joseph Stalin. There have been numerous cases where North Korean media chose not to report some very important (and, interestingly, very public) events that had a profound impact on the lives of every North Korean.

For example, the 2009 currency reform which, if the above-mentioned reports are to be believed, led to the lethal downfall of Mun Il-bong, one of its major planners. Generally speaking, the reform emulated the Soviet currency reform of 1947 that for decades has served as a prototype of currency reforms in all communist countries. There was an important difference, though.

In 1947, all major Soviet newspapers ran lengthy front-page stories about the currency reform, extolling its timeliness and explaining the need to improve the lives of the good common Soviet citizen by wiping out the ill-gotten cash holdings of shameless profiteers.

In 2009, no North Korean media even mentioned the planned reform, which was by far the most important news of the time and had a dramatic impact on the lives of every North Korean. Information about the changes and their conditions was delivered via public notices pinned to the doors of banks, as well as through confidential messages to local authorities.

Foreign embassies were notified by a short official letter. Finally, the Pyongyang-sponsored Korean newspaper in Japan ran a couple of stories about the reform. But mainstream media within North Korea remained completely silent about the dramatic upheaval.

Those who keep a track of North Korean affairs might remember the so-called “July 1 reforms” of 2002. These were once heralded (wrongly, as it turned out) as a sign of Pyongyang’s willingness to emulate the Chinese reformist policy. Few people are aware, though, that North Korean media first mentioned the ongoing reform in September, a few months after its launch.

This is especially relevant in regard to promotions and demotions, as well as purges and persecution of the regime’s top officials. The North used to stage open show trials in the 1950s, but this Stalinist tradition was discarded. In subsequent decades, disgraced officials simply ceased to be mentioned in media and disappeared from the public view, so the general public – including the lower reaches of the elite – could only guess the reasons behind the sudden disappearance of some powerful minister or, say, a Central Committee secretary.

The disappearance of a dignitary is nearly always interpreted as a sure sign that he or she has been purged. The North Korean public inevitably starts to circulate a rumor that the hapless official was not just removed from office, but arrested or even executed.

After some time these rumors reach foreign media, often through the North Korean refugee organizations that have good networks inside the North. Consequently, the world’s media run another story about a North Korean minister who was allegedly executed for his wrongdoings or as a result of alleged factional strife.

Very often, impressive details are added – for example, it is frequently stated that the alleged execution was public or, at least, held in the presence of other top dignitaries (as a matter of fact, the present author has never seen any reliable evidence of a public or semi-public execution of a former dignitary – this type of brutal show seems to be reserved only for humble folks).

There have been a number of cases, to be sure, when these rumors were eventually confirmed. For example, we now know for certain that the state security minister Kim Pyong-ha, who disappeared in 1982, was either executed or committed suicide during his arrest (his downfall was followed by a large-scale purge of the North Korean secret police).

There is little reason to doubt that So Kwang-him, the party secretary for agriculture, was indeed executed in 1997. The aging bureaucrat was accused of espionage and subversion. The charge was that he had deliberately ruined the North Korean agriculture sector and provoked a disastrous famine, being on the payroll of the US Central Intelligence Agency and other foreign intelligence agencies.

However, things are not that simple. There have been numerous cases when prominent dignitaries first disappeared and were universally believed to be arrested and executed – but then made a comeback and re-entered North Korean politics. A good example of such political resurrection is the fate of Pak Chong-ae, a Soviet Korean who was dispatched to Korea for intelligence gathering and subversion in the early 1930s.

After 1945, she became a prominent member of the North Korean leadership. Unlike a majority of Soviet Koreans, Pak Chong-ae survived a mass purge of pro-Soviet elements in 1956-1961, but suddenly disappeared in 1985. At the time, everybody, including the Soviet diplomats, were certain that she had been shot or probably died in prison – and this is what the rumors confidently told. However, in 1986, Pak Chong-ae re-emerged in the Korean political scene, albeit in secondary roles.

Even more interesting is the case of Ch’oe Kwang, a former chief of staff. Ch’oe Kwang disappeared in 1969, and rumors held that he was shot soon afterwards. This was hardly the case, since in the late 1970s, Ch’oe Kwang first appeared in secondary positions, then re-launched his career and in 1988 was again appointed chief of general staff!

So how should one treat the reports about the execution of Kim Yong-sam and Mun ll-bong? With caution. There is no reason to reject the reports completely – they might indeed be true. There is no doubt that rumors about the execution of ex-ministers are now circulating widely among North Korean officials. The 2009 currency reform was indeed a disaster, arguably, the worst prepared currency reform in the entire history of communist countries.

The 2004 Ryongchon explosion also was an exceptional event, irrespective of whether it was an assassination attempt targeting the Dear Leader, or a result of bad luck and remarkable negligence. Therefore, one may well expect the severe punishment of people who were responsible for both disasters. However, the experiences of previous decades demonstrate that such rumors be taken with healthy skepticism.

Incidentally, about a year ago, rumors persisted that another high-ranking official, the head of the party finance department, Pak Nam-gi, had been executed for his alleged mishandling of the currency reform. This story was universally believed, but so far no definite evidence of his sorry fate has emerged.

To complicate things further, a few weeks ago a well-informed defectors’ group reported that Pak Nam-gi, alive and well, was spotted in Europe where he is managing the personal funds of the Kim family. So, is Pak Nam-gi dead, with all his family shipped to a prison camp? Or is he running a multi-billion dollar business from a North Korean embassy in Switzerland? We know not. But this is another reminder of the many uncertainties a North Korean watcher has to deal with.

So, the rumors (and rumor-based reports) about Kim and Mun’s execution may well be true, but at the moment it is virtually impossible to talk about this with certainty. Things will become clear eventually, but this will happen, probably, only after several years. Sooner or later some relevant documents will be leaked.

Even before that, some trustworthy witness of their execution will emerge. It is also possible, though, that one day the allegedly executed ex-ministers will reappear, alive and healthy for their advanced age. However, by that time this entire story will be of greater interest for historians, not journalists or policy analysts.

ORIGINAL POST (2011-4-4): According to the Choson Ilbo:

The North Korean regime in June last year executed the ex-minister of railways Kim Yong-sam on espionage charges and ex-finance minister Mun Il-bong over a botched currency reform in late 2009, it has belatedly emerged.

A South Korean government official confirmed Kim’s execution but was not clear about Mun’s, saying, “We have relevant intelligence, which we are checking.”

According to a North Korean source, Kim, who was minister of railways between 1998 and 2008, was executed for involvement in a massive explosion at Yongchon Station in North Pyongan Province in April 2004 that allegedly targeted a special train carrying leader Kim Jong-il.

Kim Yong-sam was accused of leaking information about the timetable of the train, which was returning from China. Kim Jong-il’s travel itineraries are known only to his personal guards and secretaries and the railways minister.

Mun, who was finance minister between 2000 and 2008, apparently took the fall for the botched currency reform alongside then director of the Workers Party’s Planning and Finance Department Pak Nam-gi.

The regime executed Pak by firing squad on the same charges in April last year. “It seems Mun was executed because public discontent got worse even though, unlike Pak, he had nothing to do with the actual preparations for the currency reform,” the source said.

About 20 senior officials in the munitions industry ministry and the second economic committee in charge of munitions were also purged for embezzlement late last year. They had reportedly been caught by the State Security Department attempting to siphon off money from arms exports.

Another source said, “Rumor has it that the purge targeted long-serving senior officials in the military who have the authority to export arms overseas.”

The purge has been raging in Pyongyang since early last year, when Kim’s son Jong-un was named as the successor to his father and the currency reform was sweeping the North, a third source said. “It seems Kim Jong-il is trying to remove obstacles to the transition of power with his own hands.”

Regarding the suspected fate of Kim Yong-sam, I find it odd that the DPRK would execute him six years after his alleged offense.  There are only a couple of reasons I can guess as to why the situation was handled this way: 1. If he was executed, he was executed for another reason, 2.  If he was executed too soon after the April 2004 explosion, it would cast doubt on the DPRK’s official claim that the Ryongchon explosion was caused by an accidental train collision rather than an internal conspiracy to eliminate the leader.

UPDATE: A reader (in the comments) reminds me that Kim Yong-sam’s demise was also reported in the media back in July 2010.  At the time, his punishment was due to his failure to maintain locomotive trains that had been in store for wartime.  So maybe his death has nothing to do with Ryongchon at all but a failure to carry out his duties.

Regarding the execution of Mun Il-bong:  The DPRK allegedly executed Pak Nam-gi over the currency reform in early March 2010.  If Mr. Mun shared the same fate three months later, then the number of public officials executed over the country’s disastrous currency reform now stands at two.

Additional Information:

1. Last I heard, Jon Kil-su is the DPRK’s Minister of Railways, being named just before the last SPA elections.

2. Here are satellite images of Ryongchon from before and after the explosion.  Most of these can now be seen on Google Earth.

3. The story above mentions a purge in the munitions industry, but Kim Jong-il recently praised their efforts.

4. The Daily NK and Yonhap also reported on this story.

Read the full story here:
2 Senior N.Korean Apparatchiks Executed
Choson Ilbo
4/4/2011

According to Breitbart (via Breitbart):

Former North Korean Railways Minister Kim Yong Sam was executed in March last year for failing to maintain locomotive trains that had been in store for wartime, Radio Free Asia, a nonprofit radio station, reported Wednesday on its Internet edition.

A source on North Korean affairs said Kim got into trouble during an inspection by the National Defense Commission for scrapping locomotive trains that were in store for wartime.

After the inspection, carried out after celebrations were held to mark the country’s 60th birthday on Sept. 9, 2008, Kim was handed over to the State Security Department, report said.

He had been railways minister for 10 years from September, 1998.

The Choson Ilbo has more:

A nationwide campaign is underway recently in North Korea to get rid of photos and publications of executed former senior officials, Radio Free Asia claimed Tuesday.

This campaign was ordered by leader Kim Jong-il on July 2. The North’s Press Censorship Bureau is reportedly destroying documents and materials collected from across the country.

According to RFA, the campaign’s targets include Pak Nam-gi, the former director of the North Korean Workers Party’s Planning and Finance Department who was executed in March over the disastrous currency reform, and former railways minister Kim Yong-sam.

“Railway workers suffering from the food shortage stole copper and aluminum parts from locomotive trains that were in store for wartime and sold them as scrap metal. As a result, about 100 locomotives were scrapped,” it claimed. “This was revealed in an inspection by the National Defense Commission in 2008.” Kim Yong-sam was then taken to the State Security Department and executed in March the following year, it added.

Kim Yong-sam was appointed railways minister in September 1998 but has not been seen in public since October 2008, when he was replaced by current minister Jon Kil-su.

A Unification Ministry official said rumors about his execution are “rampant.”

Read the full stories here:
Former N. Korean railways minister Kim Yong Sam executed: report
Kyodo (via Breitbart)
7/14/2010

N.Korea’s Ex-Railways Minister Executed
Choson Ilbo
7/15/2010

According to KCNA:

Report on Implementation of 2009 Budget and 2010 Budget
 
Pyongyang, April 9 (KCNA) — Deputy Pak Su Gil, vice-premier and minister of Finance, delivered a report on the results of the implementation of the DPRK state budget for last year and its state budget for this year at the 2nd Session of the 12th Supreme People’s Assembly held on Friday.

According to the report, the state budget for last year was successfully implemented and, as a result, the state budgetary revenue was overfulfilled 1.7 per cent, an increase of 7 per cent over the previous year.

Ministries, national institutions, management bureaus and complexes overfulfilled the national plans for budgetary revenue and all provinces, cities and counties across the country also overfulfilled their plans for local budgetary revenue.

Last year’s plan for state budgetary expenditure was carried out at 99.8 per cent.

An investment from the state budget was focused on the development of metal industry while a huge financial allocation was made for the power and coal industries and the railway transport.

8.6 per cent more funds than the previous year were spent for capital construction and expenditure was increased for agriculture and light industry.

A 7.2 per cent greater financial disbursement than the previous year was made for the field of science and technology, surpassing the level of the latest science and technology in domains of space technology, nuclear technology and CNC technology and putting the key industries of the national economy on a high scientific and technological basis.

A large amount of fund went to the field of cultural construction and 15.8 per cent of the total state budgetary expenditure was spent for national defence.

The reporter said that the scale of revenue and expenditure in the state budget for this year has been set on the principle of improving the people’s standard of living to meet the requirements of the policy of the Workers’ Party of Korea on conducting a great offensive to bring about a decisive turn in the above-said work.

This year’s plan for state budgetary revenue is expected to grow 6.3 per cent over last year. The revenue from the profits of state enterprises, the main source of state budgetary revenue, is expected to go up 7.7 per cent over last year, that from the profits of cooperative organizations 4.2 per cent, that from the fixed asset depreciation 2.5 per cent, that from real estate rent 2 per cent and that from social insurance 1.9 per cent.

This year’s plan for state budgetary expenditure is expected to show an 8.3 per cent increase over last year.

The spending for the light industry is expected to go up 10.1 per cent, that for agriculture 9.4 per cent and that for metal, power and coal industries and railway transport 7.3 per cent as compared with last year.

The expenditure for the machine-building industry is expected to go up and an 8.5 per cent bigger financial allocation will be made for scientific researches and the introduction of new technologies.

A 6.2 per cent bigger financial disbursement than last year is expected to be made to more successfully enforce the popular policies, a proof of the advantages of Korean-style socialism centered on the popular masses.

15.8 per cent of the total state budgetary expenditure for this year is expected to be spent for national defence.

It is expected that a large amount of educational aid fund and stipends will be sent for the children of Koreans in Japan this year, too.

In order to successfully implement this year’s state budget, all domains and units of the national economy should work out enterprising and realistic business strategy and management strategy and tenaciously carry them out by relying on a high degree of mental power of the producer masses and thus fulfill the plans for budgetary revenue without fail, stressed the reporter.

And according to the Choson Ilbo:

North Korean leader Kim Jong-il can freely dispose of 20 percent of his country’s budget, a former secretary of North Korean Workers’ Party has said that. Hwang Jang-yop told the Asahi Shimbun, “Only 30 percent of the budget is spent on public services, while 50 percent is earmarked for military spending.” Hwang defected to South Korea in 1997.

Hwang was interviewed by the daily during his visit to Japan on April 4-8. “Kim Jong-il’s dictatorship is 10 times worse than his father’s. People have a painful life,” he said.

Asked if the North is likely to abandon its nuclear weapons program, he said, “There is no such possibility. But the North won’t use the weapons. They’re a means to maintain the regime.”

To the question why Kim’s eldest son Jong-nam was passed over for the succession, he said, “At first, Kim Jong-il thought of choosing his eldest son as his successor. But he seems to have changed his mind as he fell in love with Ko Young-hee, the mother of Jong-un, his third son, after Jong-nam’s mother Song Hye-rim died.”

Commenting on the North’s bizarre abductions of Japanese citizens in the 1970s and 80s, he said, “The North needed native Japanese to train agents who would work in Japan.”

Read the full story here:
Kim Jong-il ‘Gets 20% of N.Korea’s Budget for His Own Use’
Choson Ilbo
4/12/2010

Institute for Far Eastern Studies (IFES)
Nk Brief No. 09-1-23-1
1/23/2009

Following the recent North Korean New Year’s Joint Editorial and its calls for economic measures, on January 5, more than 100,000 people attended a rally in Pyongyang at which customized economic tasks were presented for each of the North’s provinces, taking into account each region’s particular industrial concentration or specialty.

According to North Korean media reports on January 20, Pyongyang stressed reforms in steel, power, coal, railway, and other sectors it considers ‘Priority Sectors of the People’s Economy.” It also presented tasks for the promotion of housing construction, refurbishment of pig farms, and the increase in production of farms and light industries providing daily necessities to the people of the North.

South Pyongan Province was tasked with increasing the production of ‘Juche’ steel’ at the Chollima Steel Complex, which kicked off the “new revolutionary upsurge” late last year during an on-site inspection by Kim Jong Il, as well as full operation of the newly built ‘superpower electric furnace’, and called on all the people of the province to increase production of organic fertilizer in order to boost food production.

For North Pyongan Province, “mass reforms” for the metalworks sector and concentrated efforts to increase electrical production at the Supung and Taechon power plants were called for. In addition, increased production at the Kujang Earth Colliery Complex, Rakwon Machinery Complex, and the Sinuiju Cosmetics Factory were ordered, as was the institution of advanced agricultural management methods.

Efforts in South Hwanghae Province are to be focused on increasing iron ore mining and scrap iron collection at sites such as the Eunryool and Jaeryung mines, and agricultural production goals are to be met through the introduction of high-yield crops and double-cropping.

North Hwanghae Province was ordered to focus on increasing production at the Hwanghae Iron Complex, the Yesong River Youth Power Plant No. 1, the 2.8 Madong Cement Factory, the Sariwon Poultry Farm, and the Sariwon Pig Farm. In addition, high-yield crops are to be introduced and construction of irrigation systems is to begin, as land management efforts are to be implemented in order to expand agricultural land in Mirubol. North Hwanghae Province is also to build a new library, a new arts theater, and a new housing.

In South Hamgyung Province, efforts are focused on construction of the Keumya River and Keumjin River Guchang power plants, as well as improving mining capacity at the mines in the Danchun area while renovating production facilities at the Sudong Mines. Aggressive promotion of construction on the second stage of the 2.8 Vinylon Complex was also emphasized. Provincial authorities were also ordered to complete the initial stage of refurbishment in the Heungnam Pharmaceutical Plant, improve production at the Kwangpo Duck Farm and the Hamju Pig Farm, and accelerate home construction in Hamheung City.

North Hamgyung Province was tasked with perfecting ‘North Korean-style steel production methodology’ at the Kim Chaek Iron Complex and Sungjin Steel Complex, and modernizing exploration, mining and processing equipment at the Musan Mining Complex in order to boost output, along with bringing the Seodusu Power Plant and Chungjin Thermoelectric Power Plant fully on-line. Another important task prioritized was the completion of the second stage of the Urangchun Power Plant.

In Kangwon Province, construction of the Wonsan Army-People Power Plant, increased production at the Munchon River Ironworks, modernization of the Wonsan Shoe Factory and the Wonsan Textiles Factory, and the refurbishment of the Munchon Poultry Processing Plant were emphasized, along with the diversification of management in farming communities in order to resolve food shortage problems.

Ryanggan Province, in the northern Gosan region, was tasked with improving management of the Samsu Power Plant, which entered service in May 2007, and construction of the Baekdu Mountain Military-first Centennial Power Plant and other electrical facilities, and the establishment of a ‘hometown of potatoes’ for the quick increase in potato cropping.

The Jagang Province was tasked with modernizing its metalworks sector and increasing electrical production at the Gangye Youth Power Plant and Janga River Power Plant, construction of small and medium-sized power plants, and increasing its logging production. Jagang Province was also tasked with normalizing production in its pig, duck, and chicken factories, and software development for local organizations was emphasized as a priority task for the Electronic Business Research Institute in Ganggye City, which was visited by Kim Jong Il after its grand opening last year.

UPDATE 3: According to numerous media sources, Choe Sung Chol has been shot (h/t Marmot). Read more here: Bloomberg, Reuters, Korea Times.

UPDATE 2: According to the Joong Ang Daily:

North Korea’s point man on South Korea, who was earlier said to have been sacked for misjudgment, is said to be undergoing what sources called “severe” communist training at a chicken farm, sources here said yesterday.

Choe Sung-chol, once a vice chairman of the Asia-Pacific Peace Committee, the North’s state organization handling inter-Korean affairs, was reported to have been dismissed in early 2008 for what sources called his lack of foresight on South Korea’s new conservative administration under President Lee Myung-bak.

Political dissidents in North Korea are said to often undergo training on the communist revolution. This includes hard labor in harsh environments, such as mines or in labor camps.

Choe, 52, became better known to South Korean officials and the public in 2007, when he escorted then-President Roh Moo-hyun throughout his visit to Pyongyang for a summit with North Korean leader Kim Jong-il.

He is also known to have played a key role in arranging the summit.

Officials in Seoul have acknowledged the dismissal of Choe, but could not confirm his whereabouts or why he was sacked.

“He has been undergoing training for about a year now, so it really is hard to tell whether he will be reinstated or not,” another source said, also speaking on condition of anonymity.

(UPDATE 1) Shortly after the DPRK’s ministerial and leadership changes were dscovered, the DPRK announced the Supreme People’s Assembly will be recomposed in March.  According to Reuters:

The reclusive North’s official media said in a two-sentence dispatch the election for deputies to its Supreme People’s Assembly would be held on March 8, without offering details.

North Korea wants to promote economic elite to the assembly to help lay the groundwork for the next generation of its leadership, a think tank affiliated with the South’s intelligence service said in a report in December, Yonhap news agency said.

However, analysts cautioned against reading too much into the leadership changes, saying Kim Jong-il and his inner circle hold the real power while ministers and other government officials have almost no influence in forming policy.

The assembly session that typically meets in April each year is a highly choreographed affair focused on budget matters where legislation is traditionally passed with unanimous approval.

North Koreans can vote only for the candidates selected by supreme leaders who allocate assembly seats to promote rank-and-file officials and purge those no longer in favor.

“Even if we know that someone was replaced, everything related to it is pure speculation because we have no clue as to the individual inclinations of these people,” said Andrei Lankov, an expert on the North at the South’s Kookmin University. (Reuters)

The Joong Ang Ilbo provides some additional facts:

The election is also a mere formality in the North because the candidates are hand-picked by the Workers’ Party and then approved by North leader Kim Jong-il.

The five-year terms of the 687 representatives, selected in 2003, were supposed to end last September. North Korea watchers have speculated that Kim’s health was linked to the election delay. According to intelligence sources in Seoul, Kim suffered a stroke in August.

North Korea watchers said Kim’s appearance at a polling station will put an end to speculation about his health. Kim had cast ballots in the 1998 and 2003 elections, according to past North Korean media reports.

With the upcoming election, Kim’s regime will enter its third term. The newly formed legislature will, on paper, form a cabinet, devise a national budget plan and conduct foreign policy.

Following former leader Kim Il Sung’s death in 1994, the Supreme People’s Assembly did not meet for four years. At that meeting, it elected the younger Kim as the National Defense Commission chairman and officially launched his regime. At the time, the legislature also amended the Constitution and undertook a dramatic cabinet shakeup.

ORIGINAL POST
According to the Joong Ang Daily:

Yu Yong-sun, a 68-year-old Buddhist leader, has become North Korea’s senior South Korea policy maker, a top Seoul official told the JoongAng Ilbo yesterday.

Choe Sung-chol, deputy director of the United Front Department of the North Korean Workers’ Party, was in charge of Pyongyang’s South Korean affairs until early last year. After he lost the job, Yu, head of the Korean Buddhists Federation, was appointed to the post, the source said.

“Yu succeeded Choe in March last year,” the source said. “Choe was once deeply trusted by [North Korean] leader Kim Jong-il, but he stepped down because he had failed to accurately assess the outcome of the 2007 presidential election in the South, the Lee Myung-bak administration’s North Korea policy and the outlook for inter-Korean relations.”

The source also said corruption scandals involving the overseas North Korean assistance committee under the United Front Department played a role in Choe’s sacking.

Choe played a crucial role in arranging the second inter-Korean summit between the president of South Korea at the time, Roh Moo-hyun, and Kim in 2007.

Yu, the successor, is not an entirely new face in inter-Korean affairs. Since 2000, he represented the North in several rounds of inter-Korean ministerial talks. He has led the Buddhist group since May 2006.

“We’ve also obtained intelligence that Kwon Ho-ung, who used to be the chief negotiator for the inter-Korean ministerial talks, stepped down from the post and has been put under house arrest,” the source said.

The North reshuffled its cabinet recently, according to the South’s Unification Ministry. Ho Thaek, vice minister of the electric power industry, was promoted to minister. Other minister-level promotions also took place at the Ministry of Railways, Ministry of Forestry and Ministry of Foreign Trade. (Jeong Yong-soo, JoongAng Ilbo)

The Choson Ilbo reports on some more ministerial changes:

North Korea has reshuffled two cabinet ministers and appointed a new man to a key post in the Workers’ Party. North Korean state media reported that Kim Tae-bong was appointed new metal industry minister and Hur Tack new power industry minister. They replace Kim Sung-hyun and Pak Nam-chil. Kim Kyong-ok as newly-named first deputy director of the ruling party’s Organization Guidance Department that controls the party, Army and administration and is headed by leader Kim Jong-il.

It is rare for reshuffles to be announced separately. The new economic appointments may be related to the emphasis on “economic recovery” in a New Year’s statement released in the state media last week that is the closest the North has to an annual message from Kim Jong-il, a government official here speculated. The statement described the metal industry as the “pillar of the independent economy of socialism” and said the electricity, coal and railroad sectors “should take the lead in the people’s economic development through reforms.” Hence replacement of the metal and power industry ministers, according to the official. He admitted little is known about the newly appointed ministers.

The Organization and Guidance Department’s new first deputy director Kim Kyong-ok is reportedly in charge of regional party organizations.

“If the power succession is to move smoothly, the economy must be revived and control of the party organization is essential,” an intelligence officer here said. He predicted noticeable changes in the North’s power structure this year. A researcher at the Korea Institute of National Unification said North Korea “is going to take various steps in a bid to prevent Kim Jong-il’s authority from weakening due to ill health.”

And from Yonhap:

North Korea promoted industrial veterans to top posts in its latest Cabinet reshuffle, signaling Pyongyang’s stepped-up drive to rebuild the country’s frail economy, Seoul officials and analysts said Tuesday.

A reshuffle in the communist state is usually inferred when new faces appear in its media, as the country does not publicize such moves.

Five new names were mentioned as the North’s ministers of railways, forestry, electricity, agriculture and metal industry in the North’s New Year message and reports in October, Seoul’s Unification Ministry Spokesman Kim Ho-nyoun said.

“They are formerly vice ministers or those who climbed the ladder in each field. The reshuffle considered their on-spot experiences and expertise,” the spokesman said.

It was not clear when the reshuffle took place, he said.

North Korean media have been reporting a brisk campaign to rebuild the country’s ailing industrial infrastructure, following up on the New Year economic blueprint rolled out by leader Kim Jong-il. Kim called on citizens “to solve problems by our own efforts” and increase production in electricity, coal and daily equipment.

In the reshuffle, Jon Kil-su was named minister of railways; Kim Kwang-yong minister of forestry; Ho Taek minister of power industry; Kim Chang-sik minister of agriculture; Kim Tae-bong minister of metal industry.

Kim Kwang-yong and Kim Chang-sik were vice ministers and Jon held a senior post in their respective ministry. Ho was formerly a power plant chief, while little was known about Kim Tae-bong, Seoul officials said.

The shakeup was rumored to have affected more posts, but the Seoul spokesman could not officially confirm it.

Koh Yu-hwan, a North Korea studies professor at Seoul’s Dongguk University, said the reshuffle is a sign that the North is shifting its focus to the economy from the military. In its New Year message, Pyongyang pledged to build a “prosperous and powerful nation” by 2012, the 100th anniversary of North Korean founder Kim Il-sung’s birth, he noted.

“The key word this year is the economy,” Koh said. “The reshuffle seems to suggest officials with technical expertise should take the initiative to develop the economy.”

Kim Young-yoon, a researcher with the Korea Institute for National Unification, said Pyongyang is turning to its natural resources amid suspension of South Korean aid. The Seoul government halted its customary aid of rice and fertilizer this past year as Pyongyang refused offers of dialogue.

“North Korea has no other way but turn to its own natural resources as long as inter-Korean relations and the nuclear issue are in limbo,” he said.

Read the full articles here:
Buddhist leader gets North’s South policy spot
JoongAng Daily
Jeong Yong-soo
1/5/2009

N.Korea Reshuffles Economic Posts
Choson Ilbo
1/5/2009

N. Korea promotes industry veterans in Cabinet reshuffle
Yonhap
Kim Hyun
1/6/2008

North Korea says to elect MPs in government shake-up
Reuters
1/6/2009

North to hold parliamentary election
Joong Ang Ilbo
Ser Myo-ja
1/8/2009

Top North official said to be getting re-educated
Joong Ang Daily
1/12/2009