Archive for the ‘Economic reform’ Category

Real estate prices up in Pyongsong

Saturday, January 7th, 2017

By Benjamin Katzeff Silberstein

According to DailyNK, prices of real estate are skyrocketing around the wholesale market in Pyongsong, whose trade is tightly connected to that of the richer Pyongyang:

“The price of a unit in this building near Yokchon-dong, located near the railway station and a major road leading to Pyongyang and Sinuiju, has sharply risen to 60,000 USD from 40,000 USD. Although the building is not in the center of the city, many wholesale vendors want to buy these homes, resulting in the price jump,” a source in South Pyongan told Daily NK on January 4.
“The residential property is attractive to major market heavyweights even though it wasn’t built recently. Ease of transportation seems to be the major pulling factor.”
Pyongsong City is home to Doksan Farmers’ Market (formerly Pyongsong Market),  the largest wholesale market in the nation. The market is constantly busy with merchants from other regions because it not only offers trade in commodities but also deals with the labor market, foreign currency, and the services sector.
Previously, the real estate trade was prohibited in North Korea, but the authorities have tacitly permitted it since the 1990s, with an increasing number of people now purchasing houses. Due to restrictions in North Korea that make it difficult to move about freely, merchants prefer to reside closer to the market.
“In the past, Okchon-dong was more popular because the General Market was located in it. But there were many problems because it was difficult for the wholesale merchants with big vehicles like trucks to come and go along the narrow roads. For this reason, Yokchon-dong became more popular because they can directly unload their cargo near the residential area, which is located at a major transportation hub,” an additional source based in Pyongsong said.
Full article:
Pyongsong prime real estate prices are skyrocketing
Seol Song Ah
Daily NK
2017-01-07
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Summer trailings along the Sino-North Korean border, in search of sanctions: photo essay

Tuesday, December 20th, 2016

By Benjamin Katzeff Silberstein

This November, just like every  time that new sanctions are levelled on North Korea, the first question tends to be: what will China do? Unsurprisingly, the same question followed after UN resolution 2270 in March this year, when the international community adopted the strongest sanctions against North Korea to date, most crucially targeting its minerals exports. This time, some believed, would be different. China was finally fed up and would take measures to hit North Korea’s economy, and official; statements and some bureaucratic action reinforced this impression. Now, some hope that the “cap” measure on imports of North Korean coal will remove the loophole created by the “humanitarian exemption” in the previous sanctions.

By now, after the THAAD, other geopolitical developments and the sheer passing of time, the question of China’s degree of sanctions enforcement has almost faded into the background. As the Washington Post’s Anna Fifield showed in a dispatch from Dandong a few weeks ago, sanctions are at most one factor among many that impact trade between China and North Korea.

This summer, I visited Dandong, Yanji and Hunchun, three Chinese cities along the border. I got a very similar impression: sure, some people involved in border trade told me, things had gotten a little more complicated, though not much. But sanctions were rarely mentioned as the reason for any added difficulties or downturns in trade.  At the time, China’s enforcement of sanctions was very much a topic of debate, and most analysts were skeptical of any squeezing going on, while some claimed trade had virtually ceased. At my visit, on the contrary, I saw fairly vigorous trading activity, and few people I spoke to thought any changes had occurred since sanctions were enacted. Posting these impressions and pictures has been a project in the pipeline for a while, so while much has happened since this summer regarding China-DPRK relations and trade, I hope that the reader will find it interesting to see how things looked at a time when some concluded that China was finally squeezing North Korea in a way that hurt. To be clear: all impressions and pictures below are from late June of 2016.

Trailing the China-DPRK border, in search of sanctions

Dandong 

Entrance to the Dandong customs inspections area. Photo: Benjamin Katzeff Silberstein

Earlier this year, the UN Security Council adopted the strongest sanctions that North Korea has faced to date. As with previous rounds of sanctions, one of the major questions is China’s degree of enforcement. Going back a few months, some suggested that major shifts had taken place, and that trade between North Korea and China had declined radically.

By the actual border, this summer, things looked very different. In contrast to the image of a desolated trading environment, I encountered bustling traffic during a visit earlier in the summer. During one morning in late June, around 85 trucks crossed the border from North Korea into China in only about one and a half hours. Virtually all trucks were registered to northern Pyongan province, the home province of Sinuiju. In addition, 19 cars and buses, one long freight train and one passenger train crossed the bridge during the same time. After this first stint of traffic, the flow reversed and a steady flow of trucks began pouring into North Korea from China. Only during the 15 minutes when I observed the traffic going from China, into North Korea, 35 trucks and 13 buses and cars crossed the bridge.

The traffic flowed in sequences, one direction at a time. And this was only the morning traffic. The flow may have continued throughout the day, as the traffic moved in intervals. Walking back to the customs area from the bridge crossing in the early afternoon, what was previously a calm intersection by Chinese inner-city standards had turned busy: trucks lined the entire street leading up to the customs office and some flowed over into the adjacent street, waiting to drive into the inspection area. All in all, more than 80 trucks lined the roads waiting to cross into North Korea. Most carried Chinese license plates.

Trucks lined up on both sides of the street at one of the main intersections in central Dandong, waiting to go into the customs inspection area to cross into North Korea. Photo: Benjamin Katzeff Silberstein

Trucks, trucks and more trucks. Photo: Benjamin Katzeff Silberstein

Trucks lined up for customs inspection along the streets of Dandong before crossing into North Korea. Photo: Benjamin Katzeff Silberstein

Trucks lining up for customs inspection before crossing into North Korea from Dandong. Photo: Benjamin Katzeff Silberstein

The never-ending line of trucks. Photo: Benjamin Katzeff Silberstein

Truck driving into the Dandong customs area. Photo: Benjamin Katzeff Silberstein

Another picture of the never-ending line of trucks. Photo: Benjamin Katzeff Silberstein

North Korean trucks crossing into Dandong from Sinuiju. Photo: Benjamin Katzeff Silberstein

It is commonly estimated that around 200 trucks go between China and North Korea on a regular day. In sheer numbers, virtually nothing seemed to have changed regarding the traffic since the latest round of sanctions. Only the trucks observed in plain sight during this morning amount to a little under 200, and this merely during the first few hours of the day. At least 10–20, probably far more, were already in the customs inspection area waiting to cross. In short, things looked very regular and busy.

Trucks waiting to cross from North Korea into Dandong. Photo: Benjamin Katzeff Silberstein

Some of the trucks going into Dandong from Sinuiju looked empty. Photo: Benjamin Katzeff Silberstein

Of course, one must be careful not to draw too drastic conclusions from one day of observations. Things may have changed throughout the summer and surely during the fall, and channels such as ship transports are not visible from the border bridge area. Moreover, according to reports from inside North Korea, the authorities have expressed concerns about potentially shrinking trade volumes as a result of sanctions, and some traders now smuggle goods that are covered by the sanctions rather than transporting them openly, as they have in the past, according to Daily NK. In short, sanctions did appear to be having some degree of impact, even during the past summer.

Most North Korean trucks crossing into Dandong were registered to North Pyongan province ( 평안북도도, here abbreviated to 평북), the province bordering Dandong. Photo: Benjamin Katzeff Silberstein

Another truck registered to North Pyongan province. Photo: Benjamin Katzeff Silberstein

However, the truck traffic across the Chinese border through Dandong suggested that the picture was mixed. At the very least, observations from the border area showed that even though trade in certain goods may have gotten more difficult, North Korea was by no means economically cut off from China, and still is not. Prices for food and foreign currency on North Korean markets, too, remained relatively stable through the summer from when sanctions were put in place, indicating that the economy as a whole is not feeling any drastic impact of the sanctions.

Factory materials going into North Korea from China. Photo: Benjamin Katzeff Silberstein

Factory materials going into North Korea from China. Photo: Benjamin Katzeff Silberstein

Most trucks transporting factory materials into North Korea appeared to be Chinese-registered. Photo: Benjamin Katzeff Silberstein

Another Chinese truck transporting factory materials into North Korea. Photo: Benjamin Katzeff Silberstein

If the North Korean economic elite was worried about the sanctions, it certainly did not show at one hotel in central Dandong. Sinuiju in North Korea is only a few minutes drive over the Yalu River, on the bridge connecting the two countries. The hotel was packed with North Korean guests, many of whom have presumably come over for purchasing and meetings with Chinese business partners. They came and went in a steady stream, wearing luxury brand clothing, watches and carrying expensive bags and wallets.

They paid everything in cash, and at least one person per travel party spoke Chinese. One man held a car key with a logo from KIA, the South Korean car manufacturer. One woman sported a Hello Kitty handbag. As some got ready to depart, bags piled up in the lobby, seemingly filled with goods from shopping sprees around town. Some of it seemed to be meant for re-sale in North Korea. Many stores around the flood banks cater specifically to a North Korean clientele, and sell items like kitchenware that are not easily accessible across the river.

Many stores in Dandong cater specifically to North Korean consumers. The sign at the left bottom of the picture reads “조선백화점,” translating into “Korea department store.” Photo: Benjamin Katzeff Silberstein

Travelling to Dandong, it was particularly apparent why the Chinese government would be reluctant to clamp down too hard on border traffic, even if it would want to do so. Political reasons aside, trade between North Korea and China matters for cities such as Dandong. One can see it in the flesh: the streets are packed with companies dealing in imports and exports to and from North Korea. One company trades steel; another sells construction equipment such as tractors. Several sell cars and buses, and others deal in refrigerators, dishwashers, washers and dryers. One, called “Pyongyang Tongshin (평양통신),” judging by its name, offers cell phone services for traders travelling into North Korea. Should trade between the two countries drastically dive, the local economy would take a hit.

Advertisements for North Korean cell phone service Koryolink in Dandong. Photo: Benjamin Katzeff Silberstein

“Pyongyang Communications.” Sign in Dandong. Photo: Benjamin Katzeff Silberstein

One could turn these observations on their head: if so many trucks were lining up and only moving slowly into the customs area, could that not mean that inspections had gotten tighter? Was the line of trucks actually a sign that Chinese authorities did what they have promised to do?

Perhaps. But not according to people around the border crossing and customs area. I asked several individuals involved in the cross-border trade about the long lines and waiting times for border crossings. No one seemed to believe that the traffic commotion and lines were anything out of the ordinary. Both Chinese and North Koreans involved in import-export business said traffic had not changed at all during the past year or so. Overall trade had declined a bit, one person said. The trucks carried a little less than they did before, but only marginally. Coal was not traded as frequently as it was before the sanctions were put in place.

This sign lists services for one Dandong firm that offers, among other things, UPS transport services and solar-powered appliances, which have become popular in North Korea in recent years. Photo: Benjamin Katzeff Silberstein

But the timing of the early 2016 round of sanctions made such statements difficult to assess. China had in fact been decreasing its coal imports from North Korea at different points in time several years before the latest round of sanctions. Between 2013 and 2015, for example, the value of Chinese coal imports from North Korea shrank by almost 25 percent. Only between January and February 2014, the value of trade between the countries dropped by 46 percent. The statistics are often clouded by the fact that global market prices for commodities such as coal fluctuate heavily. There may also be a variety of seasonal factors at play. In sum, isolating sanctions as a variable is notoriously difficult, and often, numbers do not tell the full story. As of June this year, North Korean coal could still be ordered through the Chinese online shopping mall Alibaba.

Moreover, even if Chinese authorities wanted to check all goods cross with minute rigidity, one can question whether it would even be practically feasible. The customs area is not particularly large and did not appear to be overflowing with staff. Checking around 200 trucks per day for their exact goods, and determining whether its revenues could be used to fund North Korea’s weapons program – the condition stated by the latest sanctions – seems like a gargantuan task in practice.

 

Hunchun

Tourists and a truck waiting by the Hunchun-Rason border crossing (Quanhae). Photo: Benjamin Katzeff Silberstein

The Dandong-Sinuiju is the main point of trade between China and North Korea, but not the only one. An one-hour drive from the Chinese city of Hunchun, trucks and people come and go to and from the North Korean northeast. At the border crossing, most seem to be going to the special economic zone in Rajin in North Korea. On one gloomy Thursday in late June, around 40 Chinese trucks waited to cross. One Chinese-Korean waiting for the gates to open to the customs area told the present author that business is going very well these days. He runs a hotel in Rajin, catering mostly to Chinese tourists and business people. He has seen no dip in customers over the past year – rather, more people are coming than before. This single testimony may not be fully indicative of trade as a whole, but it does suggest that Chinese tourism remains an important and fairly viable source of revenue for North Korean businesses in Rason.

The Quanhae border crossing from afar. Photo: Benjamin Katzeff Silberstein

Trucks lining up to go into North Korea. Photo: Benjamin Katzeff Silberstein

More trucks at Quanhae. Photo: Benjamin Katzeff Silberstein

Trucks at the border crossing. Photo: Benjamin Katzeff Silberstein

Chinese tourists lining up to have their passports checked before heading into Rason. Photo: Benjamin Katzeff Silberstein

This was certainly the way things looked at the border crossing. Chinese tourists came and went in great numbers, many carrying North Korean shopping bags. Trucks, too, continuously crossed the border throughout the afternoon. All in all, 80­­–100 trucks drove into North Korea during this afternoon. One was adorned with a logo from the Dutch shipping company Maersk. A few trucks came out of North Korea as well, many seeming to carry seafood destined for cities such as Hunchun and Yanji.

A truck adorning a logo from the Dutch shipping company Maersk having just crossed into North Korea from Hunchun. Photo: Benjamin Katzeff Silberstein

In addition, a large number of buses and minivans carrying tourists and traders went in from China. Many minivans carried driving permits for Rajin clearly visible through their front windows. Given the amount of truck traffic only during the afternoon, it seems a reasonable estimate that perhaps twice the amount of traffic went through during the day as a whole. One person with good knowledge of the border area estimated that around 200 trucks go through at this crossing on a regular day, though this figure is obviously neither exact nor certain.

Customs office on the North Korean side of the border crossing. Photo: Benjamin Katzeff Silberstein

Chinese tourists waiting to head into North Korea. Photo: Benjamin Katzeff Silberstein

The two bridges connecting Rason to China (particularly the newly constructed one in the back). Photo: Benjamin Katzeff Silberstein

These observations did not fully prove that China was not enforcing sanctions on North Korea during the summer of 2016. However, they did show that trade and traffic between the countries was still very much alive. Some goods may have be traded less, but neither sanctions nor souring relations between North Korea and China seemed to have reduced trade as much as some observers have claimed. The North Korean economy may be impacted by sanctions, but it is not and rarely has been fully isolated from the rest of the world.

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The size of North Korea’s market economy, and why it matters

Saturday, December 10th, 2016

By Benjamin Katzeff Silberstein

The other day, South Korean think-tank KINU (Korean Institute for National Unification) reportedly claimed that North Korea has 404 official markets in total. As Curtis Melvin has already pointed out on twitter, the real number is actually higher, but all this depends on what precise definition you use of markets (institutionalized and government recognized, versus operating in a legal gray zone, et cetera). As this report by the U.S.-Korea Institute laid out last year – also using satellite imagery, like the KINU report does – markets have grown significantly in size since the early 2000s.

The more interesting figures, in my opinion, are KINU’s estimates for what the markets actually generate in terms of income for the government, and how many people they employ. Below, I place these figures in a comparative perspective within the economy as a whole, and discuss the proportional weight of the markets in the North Korean economy. But first, some of the usual caveats:

As with any figures relating to the North Korean economy, a great deal of caution must be exercised in approaching these numbers. It would seem nearly impossible, for example, to accurately calculate the number of people employed by the markets. In theory, this should not be that hard. Using Google Earth, you can measure, with a fair degree of accuracy, the size of the trading grounds, and knowing the rough size of the average market stall in a North Korean market and how many people work in each one, getting a rough number for the amount that they employ should not be impossible. It would be a very rough estimate but arguably that is better than nothing. But in practice, it would still not give the full story of how many people work in the markets, since many people work there part-time, at least according to (possibly outdated) anecdotal evidence.

Moreover, it is important to remember that the market system is not the entire private sector – many other types of exchanges and transactions go on in the North Korean economy, not all recognizable from above, in complexes such as residential buildings and the like, where small business have been known to operate from. So any number for government revenues, it is important to bear in mind, will only be an estimate (again, a very rough one) for the specific type of markets that KINU has recorded. KINU does not seem to have made its report available online yet – perhaps their methodology is laid out clearly enough to answer some of these questions.

What do the numbers tell us?

Still, the numbers are interesting as starting points for a broader analysis of the proportions and size of the North Korean economy. Starting with the number of individuals employed within the market system, KINU puts the number at 1.1 million. This is about 1/25 of the entire population of the country, as derived from the 2008 census. Table 34 (page 187 and onward) gives the total working-age population as approximately 17.37 million. Subtracting the share of the population listed as “studying,” we get around 16.4 million. Further subtracting the share of the population listed as “retired,” which arguably we shouldn’t do since elderly North Koreans are known to be significantly involved in market activities, we get approximately 13.3 million individuals. I do not subtract the share listed as “doing housework” simply because it seems far too unlikely that such a category in North Korea would really be excluded from the market labor force.

Just assuming as a theoretical experiment that KINU’s figures and the census numbers are accurate, we get a 7.5 percent share of people employed in the official market sector. In reality, the share may well lower since many people in the demographic groups subtracted are known to be involved in market activities. Conversely, it may be higher if KINU’s number does not take part-time workers into account or otherwise underestimates the number of market workers. Wheher or not one thinks this to be a high or low number is a matter of perspective. For comparison, the share of the labor force employed in retail trade in the United States was 10.2 in 2014.

Another interesting figure KINU gives is that for government revenue from the markets. Again, this, too, should not be hard to estimate in theory: if you approximate the amount of market stalls through satellite imagery and multiply the amount by the fee paid by each trader to the government, it shouldn’t be impossible to get a rough estimate for how much the trade brings the government. But of course, here, too, complications abound: when looking at markets from above, it is nearly impossible to determine exactly how large the actual trading grounds are, for example, and how much is made up of administrative and storage facilities. Still, an approximate estimate is immensely valuable as a starting point for a broader debate.

According to KINU, the North Korean government collects between $13 and $17 million per day in fees from market traders. Ever since 2003, the North Korean market regime has become increasingly formalized and incorporated into the official economy. This trend has reportedly continued under Kim Jong-un as well, and arguably accelerated during his tenure. This is clearly a wise move from a policy perspective: the government needs the markets and it needs the revenue, and their depiction as a threat to the regime may not be the full story.

Using the low number of $13 million gives us a figure of $4.7 billion in revenue per year, while the higher figure of $17 million gives $6.2 billion per year. Both the low- and the high-end estimates would put government revenues from market fees at a significantly higher figure than, for example, North Korea’s trade with China. In 2015, for example, North Korea’s exports to China estimated a total of $2.95 billion. The latest sanctions additions are estimated to take off around $700 million from North Korea’s export incomes. It is important to remember that even if they were to accomplish that, which remains doubtful, North Korea still has a domestic economy that matters greatly too. And remember – these are only estimated (estimated!) figures for government revenue from a specific type of market. They do not represent the entire private sector in North Korea.

So, while the role of exports should not be underestimated, it is important to remember that North Korea has a domestic economy of considerable size. Perhaps whatever pressure the sanctions applies on the North Korean economy could serve as an argument for those in the policy bureaucracy pushing for economic reforms that could further let the private economy develop.

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KINU report claims North Korea has 404 markets

Saturday, December 10th, 2016

Benjamin Katzeff Silberstein 

As reported by Yonhap here (I will try to find a link to the full report as soon as it is up):

North Korea currently has 404 official markets which employ some 1.1 million people, a local think tank said Friday.

The Korea Institute for National Unification (KINU) came up with the figures based on an analysis of the North Korean markets using Google Earth and a survey of North Korean defectors. The total does not include unauthorized markets.

Google Earth is a Google application that lets the user look at any corner of the earth as if viewed from a satellite.

The average number of customers reaches 57,000 per market. Nine markets are larger than South Korea’s famous 14,437-square-meter Dongdaemun Market in terms of their respective size, according to a KINU report.

The institute estimated North Korea collects US$13-17 million a day in usage fees from merchants selling goods at the markets. The communist state has received the fees since it gave an official permit to the markets in 2003, it said.

The communist state also has many temporary markets that have not gotten official authorization from the state, known as “Jangmadang.” These markets are set up in vacant fields where local merchants gather to sell and trade goods.

Full article:

N. Korea operates 404 official markets: report
Yonhap News
2016-12-10

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KCNA reports on Kangryong Green Zone

Friday, December 9th, 2016

The Kangryong Green Zone was first announced on a promotional VCD given to foreign participants of a SEZ conference in Pyongyang in October 2013. However, the project was not formally announced in KCNA until July of 2014. KCNA has not mentioned it again until today.

According to KCNA:

Pyongyang, December 9 (KCNA) — The DPRK has pushed ahead with the project to develop Kangryong County of South Hwanghae Province into an international green model zone.

Kangryong County has favorable conditions for the project, as it is bound on sea rich in marine resources like sea cucumber and scallop. And its beachfront is abundant in energy resources, including wind, solar and tidal powers.

The county has circumstances favorable for sustainable development of agricultural production by means of bettering its ecosystem with organic farming method and introducing ring-shaped rotation production system.

In this regard, Hong Kil Nam, director of the Secretariat of the Korea Green Research and Development Association, told KCNA:

The county is highly potential to be a world-level green zone for its excellent natural ecological environment and good conditions for the development of fishery and agriculture.

With an increasing interest of the government in the county, a master plan for developing the whole county into an international green model zone was well matured in keeping with the reality of the DPRK and the world trend of development.

The master plan regards it as its principle to protect and improve the county’s natural ecological environment, set up a system of ecological circulation featuring the green zone, raise the utilization of resources and energy to the maximum and achieve the sustainable economic development. To this end, the plan includes such detailed projects as construction of an industrial zone for production of green goods, infrastructure and tourist zones with populated, forest and other areas.

Meanwhile, it is gaining momentum to draw up detailed plans and create a favorable environment for investment.

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Musan Market damaged in flooding

Thursday, December 8th, 2016

Other outlets have already covered the recent flood damage using satellite imagery (see here and here).  I added one small contribution in Radio Free Asia today…Here is a satellite image of the Musan Market (무산시장) taken before and after the recent flooding:

Images: Google Earth. Top: 2014-1-13, Bottom: 2016-9-14

Nearly half of it was washed away when the river rose.

I will have more to say on this topic after the holidays.

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Orascom’s Ora Bank closes

Monday, December 5th, 2016

According to the Egyptian Daily News:

Orascom Telecom Media and Technology Holding will shut down Orabank, its affiliate bank in North Korea, due to US sanctions on the nation, according to an announcement on Sunday.

The company, owned by business tycoon Naguib Sawiris, added in a note to the Egyptian Exchange that shutting down the bank in Korea is a result of force majeure due to the sanctions imposed by the US Office of Foreign Assets Control on North Korea.

Orascom noted that its subsidiary in Korea will transfer all cash and liquid assets.

The company added that its subsidiary, Koryolink, will continue operating in Korea despite the sanctions.

Shortly after the banks closing was announced, Naguib Sawiris announced his resignation as CEO of OTMT . You can read the Press Release and coverage in Forbes.

According to the Chosun Ilbo:

Naguib Sawiris resigned a day after Orascom decided to shut down a branch of its affiliate bank Orabank in Pyongyang under sanctions imposed by the UN Security Council and the U.S. Treasury Department.

“Sawiris has done brisk business in the U.S. and Europe and has much of his assets in the West,” a source said. “So he has no choice but to look for an exit in the face of the sanctions.”

Sawiris has a U.S. passport and is therefore directly affected by sanctions that penalize U.S. citizens from doing business with the North, according to investigative website Finance Uncovered.

Orabank in Pyongyang is linked to Foreign Trade Bank of North Korea, which has been blacklisted by the U.S. for serving as a funnel for the regime’s nuclear weapons development.

Here are links to previous posts on cell phones, Orascom, and Ora Bank.

Here is coverage in North Korea Tech.

 

Read the full story here:
Sawiris shuts down affiliate bank in North Korea due to US sanctions
Egyptian Daily News
2016-12-4

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Where do North Korea’s nuclear scientists go shopping?

Sunday, November 27th, 2016

yongbyon-market-2016-8-21

Pictured Above (Google Earth): A 2016-8-21 image of the general market (종합시장) at the Yongbyon Nuclear Research Center residential complex.

Needless to say, security at the Yongbyon Nuclear Research Center is tight, and not much is known (publicly anyhow) about the lives of the people who live there. However, with commercial satellite imagery (and a little know-how), we can get a glimpse of life inside the security perimeter.

No doubt the residents of the compound live in “gilded cages,” enjoying above-average standards of living but under greater control and surveillance. However, in June of 2003, the year that the DPRK legally converted decades-old “farmers’ markets” to “general markets” (a change that involved not only a change in name, but also a change in administration), the DPRK constructed a new general market for residents of the Yongbyon Nuclear Research Center which appears to have replaced the smaller outdoor farmers’ market.

yongbyon-market-2003-6-2

Pictured above (Google Earth: 2003-6-2): Construction of the new general market outlined in yellow. Structure of the former farmers market that was torn down in orange.

The market appears to be composed of four warehouses each with a floor-space of appx 550 square meters (2,200 square meters total). It is possible that each building specializes in some form of commerce (food, household goods, etc). In some of the historical imagery of the market we can see people outside meandering between the buildings.

It is interesting to think that there are vendors here who are probably not related to the nuclear program. No doubt these individuals would have to be granted security clearances to work in this market.

But perhaps most notably about the residential quarter, we can see 15 new apartment buildings being constructed over the last couple of years.

yongbyon-housing-2014-9-24

(Google Earth: 2014-9-24)

yongbyon-housing-2015-11-9

(Google Earth: 2015-11-9)

yongbyon-housing-2016-8-21

(Google Earth: 2016-8-21)

I do not know if these new apartments are for scientists or janitors, but their construction marks a not-so-subtle signal that employment in the area is on the increase.

Here is coverage of my work on this post in RFA and KBS (English, Korean).

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North Korea exporting sand, gravel and coal to China from Sinuiju

Tuesday, November 15th, 2016

Benjamin Katzeff Silberstein

An interesting example of how the transition from state-owned to private enterprise impacts the workings of certain firms. Daily NK:

North Korean ships from Sinuiju, North Pyongan Province are reportedly exporting in excess of 100 tons of sand and gravel into China each day.
“Shipping firms from Sinuiju are earning foreign currency through contracts with private Chinese construction businesses. The North Korean authorities are supporting the operations after receiving orders to finance the export of coal and sand to China. They are also providing wages and food for the workers,” an inside source from North Pyongan Province told Daily NK on November 11.
Additional sources in North Pyongan Province corroborated this information.
The source added that although the city’s shipping industry was originally a state enterprise, that is no longer the case. The industry is now run by private enterprises that deal with the domestic and Chinese markets. When the operations were state owned, there were chronic shortages of capital and sailors were forced to use sub-standard vessels. The regime’s new policy – to let the industry rehabilitate itself through benign neglect – has allowed the businesses to revitalize themselves. By exporting sand across the Yalu River into China, these businesses have earned enough capital to purchase better vessels. A number of enterprises and the associated infrastructure has grown as a result.
“As the volume of sand exported continues to rise, the shipping companies are inducing more service providers and factories to participate in the industry. The Anju Country 105 Sand Factory collects sand from the Chongchon River and transports it by way of the Yalu River to the shipping firms,” the source added.
When asked about the scale of the trade, she noted, “Sinuiju Harbor sees a daily influx of Chinese boats that carry away more than 100 tons of sand and gravel. Because exports are continuing to climb, the shipping firms are using the capital to enter new industries such as coal export.”
The North Korean enterprises see sand as an inexhaustible natural resource, the source explained, adding, “The more we sell, the better quality sand we can bring in. The enterprises are doing quite well for this reason. The factory cadres are accumulating vast sums of money, and continue to look for ways to increase their profits.”
The flourishing business has also improved prospects for workers. Laborers in the sand and gravel collection factories can earn enough money to put food on the table for a family of four – with food provided to them plus approximately 50,000 KPW per month (U.S. 6.14) for extras.
“The authorities are also using the opportunity to generate propaganda about the generosity of ruler Kim Jong Un,” the source asserted.
The revitalization of the sand collection industry is a positive development from the point of view of the authorities, as all Yalu River sand enterprises are first and foremost responsible for the supply of Kim Jong Un’s pet construction projects, such as the Ryomyong Street Project.
“The authorities can simply sit back and relax as they receive money, supplies, and credit for the success of the sand business. This reveals that the solution to North Korea’s problems is freedom of the market,” she added.
As exports continue to increase, the donju (North Korea’s nouveau riche) have expanded the scope of their interests and investments. “First, they purchase a large boat. Next, under the pretense of being a shipping business, they start to branch off into other industries to make more money. The factories give the donju the authority to do the trading and receive 30% of the profits in return,” the source concluded.
Full article:
NK exports 100 tons of sand, gravel, & coal daily from Sinuiju Harbor
Seol Song Ah
Daily NK
2016-11-15
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Increase in DPRK companies involved in Pyongyang Autumn International Trade Fair

Friday, September 23rd, 2016

Institute for Far Eastern Studies (FES)

Despite the tough sanctions of the international community, Pyongyang’s Autumn International Trade Fair has opened. A standout in this year’s proceedings is that, unlike previous years, there are now more North Korean companies participating than foreign companies.

According to reports in Chosun Sinbo, a pro-North Korean newspaper published in Japan, the trade fair was held from September 5th to 8th in Pyongyang’s Three Revolutions Exhibition Hall. A total of 15 national and 280 regional companies in fields as diverse as electronics, machinery, metals, construction materials, transport, medicine, agriculture, light industry and foodstuffs participated.

The newspaper’s reporting highlighted “the release of many processed products for export using domestically produced materials as a result of cutting-edge science and technology introduced into our country’s [North Korea] factories and workplaces, upholding the value of autonomy and self-strengthening, which is a feature of this, the 12th Pyongyang Autumn Trade Fair.”

In addition, the newspaper added that “in the recent few years, the fair has seen a rising number of domestic (North Korean) companies participate, and this time around too, there were more domestic than foreign companies involved. . . . As with previous years, domestic companies have bravely displayed many light industrial products, with the number of products from the electrical sector rising every year being particularly noteworthy.”

The newspaper especially pointed out “in recent years, research and development, and production of a variety of electrical and electronic products with our branding has been actively proceeding in [North] Korean factories. . . . There are now more than 30 brands of electrical products being produced including ‘Blue Sky’ and ‘Morning’, with 10 such brands being on display at this year’s autumn trade fair.”

These companies exhibited up-to-date consumer electronics including tablet computers, desktops, laptops and LCTVs.

Ri Gyong Sim (36), an employee of the Rakwon General Trade Company (participating for the second time in the trade fair) stated that “of late, demand has been rising amongst the people for electrical goods with our brand name. . . . this is because, first of all, our credibility is guaranteed by production units, and direct sales points also do repairs, so the consumer’s demands for convenience are satisfied.”

Ri also said that coming to the fair allowed him to check what was good about competitors’ products and this would help his company improve their offering. He also said that “there is a multiplier effect in quality terms with the products on display at the trade fair as domestic companies compete with the same products.”

What’s more, there were many participants from the Fareast including China and Mongolia, and Southeast Asia, including Singapore, Malaysia, Thailand, Indonesia, and Vietnam. Russian, German, and Italian participants were also present.

The newspaper pointed especially to the fact that “since last year, Singaporean companies, food companies in particular, have shown an active interest in trading with [North] Korea.”

This includes a Singaporean trade company called Gold Kili, a manufacturer and seller of drinks including coffee and a variety of teas. It is a famous food company in Singapore, which exports its products to 30 countries.

The company’s head, Chu Wai (44) said that of the products on display at the Trade Fair, the Korean people purchased much coffee in particular, and that he was satisfied with having a number of discussions about commercial transactions.

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