North Korean Economy Watch

Kim Jong Il’s Word
A U.N. agency yanks its cash and people from North Korea.
Wall Street Journal (Hat Tip One Free Korea)
3/5/2007

North Korean officials arrived in New York over the weekend for discussions on normalizing relations with the U.S. as part of the nuclear disarmament accord struck last month. Chief U.S. negotiator Christopher Hill is scheduled to meet today and tomorrow with his counterpart, Vice Foreign Minister Kim Kye Gwan.

May we suggest that, before he sits down, Mr. Hill take a look at the brief statement issued quietly Thursday by the United Nations Development Program (UNDP). There is no better guide to Kim Jong Il’s negotiating style, nor to the North Korean dictator’s habit of breaking his word. Nuclear negotiators, beware.

The agency announced, in an item on its Web site, that it is suspending all operations in North Korea because the “necessary conditions set out by the Executive Board on 25 January 2007 have not been met.” The UNDP’s 20 or so projects will be shut down, we’re told, and its eight international staffers will be pulled out of the country. The U.N. isn’t known for its tough love, and no one we’ve talked to can recall another example of the UNDP suspending operations in a country that refused to comply with the regulations.

The “necessary conditions” were imposed at the last board meeting in response to an outcry over the UNDP’s lack of oversight over its programs in North Korea. U.N. documents, produced reluctantly after prodding by the U.S. mission to the U.N., showed numerous irregularities dating back into the late 1990s. Tens of millions of dollars for programs that were supposed to help the poor appear instead to have been handed over to Kim’s dictatorship.

As the March 1 deadline for compliance approached, North Korea decided to throw a tantrum to see if it could get excused from its obligations. It deemed the conditions politically motivated–especially the one that limits aid to programs that directly help the people and bans assistance that could aid the government–and demanded a renegotiation.

Never mind that North Korea sits on the Executive Board and had agreed to abide by the terms thrashed out in January. To its credit, the UNDP refused to be bullied into extending the deadline and is holding Pyongyang to its commitments. The suspension applies to all existing projects; the board had already suspended new projects until an audit could be completed and better oversight provided.

The U.N. has another deadline fast approaching in North Korea. At the end of January, Secretary General Ban Ki Moon ordered a full investigation of all U.N. programs in North Korea, to be completed within three months. Those include Unicef, the World Food Program and the U.N. Population Fund. As the end-of-April deadline for that audit comes closer, it will be instructive to watch Pyongyang’s degree of cooperation.

Meanwhile, the talks on North Korea’s nuclear program are moving ahead, with the U.S., South Korea and Japan all holding bilateral meetings with Pyongyang this month toward the goal of normalizing relations. At the top of Japan’s agenda is the whereabouts of its citizens who were kidnapped by North Korean agents in the late 1970s and 1980s and forced to train North Korean spies. Negotiations with Pyongyang have so far yielded the return of only five abductees along with preposterous explanations for how the rest have supposedly died.

The preference in some diplomatic circles, including the U.S. State Department and perhaps now in the White House, is to dismiss the U.N. corruption in North Korea as well as the abductee and other human-rights violations as side-issues to the more vital objective of getting Kim to give up his nuclear program.

We’d argue that international focus on these issues is an essential part of keeping up the pressure on Kim’s regime. But even if you buy the argument that these are ancillary issues, there’s still an important lesson here: If Kim won’t abide by the pledges he made regarding UNDP aid to his country, how can he be expected to keep his promises on nuclear disarmament?

Former U.S. Ambassador to the U.N. John Bolton lays out the troubling case of changing American intelligence judgments toward North Korea in The Wall Street Journal today (article available here). His point about the need for an intrusive inspection and verification regime is especially important. Under the six-party agreement announced on February 13, North Korea has 60 days to account for all of its nuclear programs. If it doesn’t, or if Kim attempts to renegotiate the terms at the last minute, we’d like to think the U.S. would show at least as much fortitude as the United Nations, and tell Kim to take a hike.

Ruediger Frank
Asian Perspective, Vol. 30, No.3, 2006 pp. 536

PDF Here: DPRK sanctions.pdf

Abstract:
This article explores sanctions as a policy tool to coerce North Korea’s behavior, such as by discontinuing its nuclear weapons program. It discusses the characteristics of sanctions as well as the practical experience with these restrictions on North Korea. It becomes clear that the concrete goals of coercion through sanctions and the relative power of the sending country to a large extent determine the outcome. Nevertheless, the general limitations of sanctions also apply, including the detrimental effects of unilateral and prolonged restrictions. It appears that the imposition of sanctions against the DPRK is unlikely to succeed. As an alternative way of changing the operating environment for North Korea, assistance deserves consideration. Despite many weaknesses, this instrument is relatively low in cost and risk, and can be applied continuously and flexibly.

Highlights below the fold:
(more…)

Associated Press (Hat tip DPRK Studies)
3/3/2007

Three North Koreans ended a rare and discrete visit to Oregon this week after visiting Oregon State university scientists, orcharists in the Hood River area, the Nike campus, Gov. Ted Kulongoski and attending a Trail Blazers basketball game.

Because of sensitive six-way talks on North Korea’s nuclear program, Mercy Corps, which hosted the visit, declined to release the officials’ names.

Portland-based Mercy Corps is among a handful of humanitarian agencies running programs involving North Korea, which has no diplomatic relations with the United States.

Over 12 years, Mercy Corps has supplied fish and fruit trees for farm projects in North Korea, which has chronic food shortages.

The North Koreans, representing Mercy Corps’ main partner organization, the Korean American Private Exchange Society, arrived Tuesday and were to leave Saturday.

Mercy Corps President Nancy Lindborg said the three visited OSU, which has made scientists available to advise on the agricultural projects. On the way back they met with Kulongoski. They visited orchards in the Hood River area Friday.

At Nike headquarters near Beaverton, they met with managers who gave a presentation on e-commerce, an Internet activity with undetermined relevance in a socialist nation with limited Web penetration.

“I don’t have a specific point of view to share on their visit and the possible opportunities North Korea may present,” said Bob Applegate, a Nike spokesman.

The visit was perhaps the 10th in a series of low-profile North Korean delegations here over the years, Lindborg said. In North Korea, she said, “Oregon is very well-known.”

At the Rose Garden on Thursday the visitors watched the Trail Blazers dismantle Charlotte.

“They’re fans,” said Lindborg, who also attended the game. “Two of them actually play basketball.”

Yonhap
3/1/2007

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Yonhap
2/28/2007

North Korea has proposed to resume inter-Korean humanitarian projects on a full scale immediately as the two Koreas held the first ministerial meeting in seven months, South Korean officials said Wednesday.

North Korea also offered to hold a meeting to discuss ways of boosting economic ties as soon as possible during a plenary session of the meeting held in the North’s capital Pyongyang, according to the officials.

“We have yet to determine the scope of full-scale resumption of humanitarian projects. The details will emerge from working-level, high-level negotiations,” said Lee Kwan-se, spokesman for the South’s five-member negotiating team.

Lee stressed the two sides did not discuss the resumption of Seoul’s food and fertilizer aid to North Korea during the two-hour session but sounded a note of optimism over the upcoming negotiations. “We think that the North’s offer expresses its firm will to resume humanitarian projects.”

In a keynote speech, Kwon Ho-ung, the North’s top negotiator, proposed to resume humanitarian projects on a full scale immediately when the four-day ministerial talks end and resume a meeting for economic cooperation at the earliest possible time in Pyongyang.

Kwon did not specify about humanitarian projects in his keynote speech, but analysts said that the North hopes to link the resumption of emotional family reunion events with Seoul’s food and fertilizer aid to Pyongyang.

Unification Minister Lee Jae-joung, Seoul’s top negotiator, proposed to conduct test runs of reconnected cross-border railways in the first half of this year and launch operations by the end of 2007, according to pool reports.

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

Lee also expressed regrets over the North’s missile and nuclear weapons tests, which he said led to the earlier-than-scheduled end of the last ministerial meeting and a seven-month hiatus in inter-Korean dialogue.

In this vein, he urged the North to fulfill the promise to dismantle its nuclear weapons program in return for energy aid in a “quick and smooth” manner, saying all the parties concerned are equitably responsible for taking action to achieve denuclearization of the Korean Peninsula on the basis of the principle of “action for action.”

Lee said the construction of a family reunion center at the Mount Geumgang resort should resume immediately and proposed that face-to-face family reunions be held no later than April. The construction has been suspended since the North conducted missile tests in July.

He also proposed to hold the cabinet-level meeting every quarter of the year regardless of the political situation, adding that the two sides should have to make efforts to resolve the issue of South Korean prisoners of war (POWs) and abductees held in the North.

During the meeting, North Korea is widely expected to ask for the immediate resumption of the South’s rice and fertilizer aid, while the South hopes to use it as leverage to make the North take quick steps in complying with the six-party agreement.

In the afternoon, the South Korean delegation is to visit the Kim Won-kyun Pyongyang Music College. North Korea chose the school in the district of Munsu near the Taedong River, defying concern that it may attempt to stage a visit to a politically sensitive place.

On Tuesday, negotiators from both sides attended a gala dinner hosted by North Korean Prime Minister Pak Pong-ju, shortly after the South’s delegation arrived in North Korea.

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

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

On Feb. 15, Seoul and Pyongyang agreed to resume ministerial dialogue after a seven-month hiatus, just two days after the North pledged to take action to end its nuclear weapons program in return for economic and diplomatic benefits from South Korea, the United States, China, Japan and Russia.

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

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

Seoul is expected to ship some of the fertilizer aid to Pyongyang shortly after the Cabinet-level talks so that it can be used for the planting of rice seedlings this spring. The rest will likely be offered according to how much progress the North makes in implementing the steps agreed upon during the six-nation talks on the North’s nuclear dismantlement, according to sources.

“Our aid to North Korea will be within the scope of the amount that can be understood by the public,” a government official said, asking to remain anonymous because of the sensitivity of the issue, suggesting the aid will not exceed 500,000 tons of rice and 350,000 tons of fertilizer this year, the amount given in previous years.

In April, the South offered more economic aid to the North in exchange for finding a resolution to the POW and abductee issue, but the North was reluctant to deal with the humanitarian issue.

Official Seoul government data shows that 485 South Koreans have been abducted to North Korea since the Korean War ended, and that 548 South Korean soldiers were taken prisoner by the North during the three-year conflict.

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

The tracks, one line cutting across the western section of the border and the other crossing through the eastern side, have been completed and were set to undergo test runs. A set of parallel roads have been in use since 2005 for South Koreans traveling to the North. NKeconWatch: (Click here to download the North Korean Railway system onto Google Earth)

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

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

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

On Feb. 13, North Korea agreed to shut down its nuclear facilities and eventually dismantle them in exchange for energy aid and other benefits. The U.S. also agreed to discuss normalizing relations with the communist nation.

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

North Korea can eventually receive another 950,000 tons in aid if it disables the reactor irreversibly and declares that it has ended all nuclear programs. The cost of the aid will be equitably distributed among the five other countries.

N. Korea Wants More Aid
Korea Times
Lee Jin-woo
2/28/2007

North Korea on Wednesday urged South Korea to resume inter-Korean humanitarian aid immediately.

On the second day of the inter-Korean Cabinet talks, which resumed after a seven-month hiatus, Kwon Ho-ung, chief Cabinet councillor of the North, also proposed that the two Koreas hold a meeting to discuss economic cooperation in its capital at an early date. The two Koreas discussed the details of aid shipments, especially rice and fertilizer, during the economic cooperation meeting.

Seoul seemed somewhat reluctant to accept Pyongyang’s requests before the Stalinist state shows that it will keep its promise to take the first steps to shut down and seal its primary nuclear reactor and resume the reunion of separated families.

Unification Minister Lee Jae-joung said in a keynote speech that the North should fulfill its promise to dismantle its nuclear weapons program in return for energy aid, which was agreed upon in the six-party talks in Beijing on Feb. 13.

Lee also suggested that the construction of a family reunion center at Mount Kumgang in North Korea be resumed immediately and that family reunions resume no later than April.

Last July, Pyongyang notified Seoul that it would stop constructing the reunion center, which was scheduled to be completed this year. The North also suspended inter-Korean family reunions scheduled for Aug. 15 last year.

The North abstained from specifying whether its request for humanitarian aid meant the shipment of rice and fertilizer from Seoul to Pyongyang.

During the four-day talks here, Seoul is expected to offer the shipment of some 500,000 tons of rice and 350,000 tons of fertilizer to Pyongyang.

The North, however, wants the South to include an additional 500,000 tons of rice and 100,000 tons of fertilizer, shipments that were postponed after the North’s test-firing of seven missiles on July 5, sources said.

“We’re doing the best we can. It remains to be seen what kind of results we can produce until the two Koreas release a joint press release on Friday,’’ Lee was quoted as saying after the meeting.

Later in the day, the South Korean delegation visited the Kim Won-kyun Pyongyang Music College. North Korea chose the college near the Taedong River for the visit, defying predictions that it would attempt to arrange a visit to a politically sensitive venue such as national cemeteries where North Koreans who sacrificed themselves during or after the 1950-53 Korean War were buried.

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

On Feb. 13, North Korea agreed to shut down its nuclear facilities and eventually dismantle them in exchange for energy aid and other benefits. The United States also agreed to discuss normalizing relations with the communist nation.

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

North Korea can eventually receive the remaining 950,000 tons in aid if it disables the reactor irreversibly and declares that it has ended all nuclear programs.

Joong Ang Daily
Seo Ji-eun
2/26/2007

Hyundai Asan Co., an exclusive operator of tour packages between South and North Korea, said yesterday tourists will be allowed to travel to the inner part of scenic Mount Kumgang in the North, an area that has been off-limits, as early as April.

Assisted by the recent agreement on the North’s nuclear issue, Hyundai and North Korea discussed the further opening of the mountain last week.

“The two sides have the same opinion about allowing tourists into inner Mount Kumgang,” said a Hyundai Asan spokesman. “The tour will be possible around early April.”

After visiting the area to look into the feasibility of travel last May, Hyundai Asan forecast it would begin the new service last autumn, but its plans were derailed by the North’s missile and nuclear tests.

According to the Hyundai Asan spokesman, technicians from both Koreas will be gathering as early as possible to talk about constructing roads, developing tour courses and mending facilities.

The leisure arm of Hyundai Group aims to attract 400,000 tourists to Mount Kumgang this year. Although the firm set the same target last year, it ended up achieving 260,000, partly as a consequence of reduced tourism following the nuclear test.

To meet the goal this year, the firm plans to shorten travel times by operating planes that link Seoul’s Gimpo airport to Yangyang in Gangwon province, near Mount Kumgang. Also, a duty-free shop run by the Korea National Tourism Organization will be launched in March and a golf course and spa facilities are slated to open in October.

Reuters (Hat tip DPRK studies)
2/26/2007

Senior officials from South and North Korea resume talks on Tuesday, seven months after dialogue broke down in acrimony over Pyongyang’s missile tests.

Following are key points in the ties between the two:

STILL AT WAR

– An armistice ending the 1950-53 Korean War dominates the relationship between the two Koreas. Nearly 1.2 million North Korean soldiers and South Korea’s 680,000 troops remain in a tense military standoff despite political and commercial ties that have warmed since 2000.

– The two have enough missiles and artillery pointed at each other to largely destroy major cities on both sides of the Korean peninsula.

POINTS OF EXCHANGE

– An industrial park in Kaesong just a few minutes’ drive from the heavily-fortified border is home to 21 companies employing about 12,000 North Korean workers.

– About 1.4 million South Koreans have visited the Mount Kumgang resort in the North just above the border on the east since the tours began in 1998. Roughly a quarter of a million made the visit in 2006 even as tension spiked following the North’s missile and nuclear tests.

– About 102,000 people crossed the border last year, not including Kumgang tourists and most of them South Koreans visiting the North for business. The total exchange of people was 269,336 as of the end of 2006.

TRADE

– Cross-border trade was $1.35 billion in 2006 up from $1.05 billion a year ago, largely from the strength of the Kaesong industrial park.

HUMANITARIAN AID

– South Korea has supplied between 200,000-350,000 tonnes of fertiliser a year to the North since 2000.

– It has also shipped up to 500,000 tonnes of rice a year to the North in the form of low-interest, long-term loans. Food aid has been suspended since the North’s missile tests in last July.

REFUGEES, PRISONERS OF WAR AND ABDUCTEES

– South Korea believes more than 1,000 of its people are still alive in the North either as civilian abductees or as prisoners captured during the Korean War.

– North Korea has said 10 South Korean POWs and 11 civilians were alive there.

– More than 1,000 North Koreans each year have fled hunger and persecution in the North and sought refuge in the South. In the first six months of last year, 854 arrived in the South for a total of 8,541. (Source: South Korean Unification Ministry, Kaesong Industrial District Management Committee, Reuters)

Korea Times
2/22/2007

Former U.S. Secretary of Defense William James Perry on Thursday called an inter-Korean industrial complex in Kaesong, North Korea, as the “future of the Korean Peninsula.’’

He made the remarks after a half-day visit to the joint venture.

Perry described the Kaesong complex as a very positive and impressive project to promote peace and prosperity on the Korean Peninsula, an official of the Ministry of Unification who accompanied Perry on the visit, said.

He also praised North Korean officials, calling them “frontiersmen,’’ the official said.

He led a five-member delegation including Stephen Warren Bosworth, former U.S. ambassador to Seoul, Kim Jeong-hun, a Korean-American businessman, and Ashton Baldwin Carter, a professor at Harvard University.

The American delegation was briefed by Kim Dong-keun, the president of the complex’s management committee, and it looked around two factories, including that of clothing manufacturer ShinWon.

During their four-day visit to Seoul, which ended Thursday, they met with Minister of Foreign Affairs and Trade Song Min-soon and leading presidential hopefuls including former Seoul Mayor Lee Myung-bak. The presidential poll is slated for Dec. 19.

The South Korean government plans to resume the expansion of the Kaesong site no later than mid-April.

Last Tuesday, the ministry said it plans to parcel out a 530,000-pyong lot for South Korean manufacturers. One pyong equals 3.3 square meters.

The land is the remainder of a lot of 1 million pyong that the two Koreas have been jointly developing since the first phase of the inter-Korean project. Under the project, a 20 million-pyong industrial base will be built for South Korean companies by 2012.

When fully expanded by 2012, the complex is expected to house about 2,000 South Korean manufacturers employing about half a million North Koreans, according to the ministry.

The industrial complex is one of two major cross-border projects South Korea has kept afloat despite the chilly inter-Korean relations. The two Koreas are also running a joint tourism project at Mount Kumgang in the communist North.

Korea Times
Lee Jin-woo
2/20/2007

Unification Minister Lee Jae-joung said Tuesday the ministry would resume the halted expansion of a joint industrial complex in the North Korean city of Kaesong no later than mid-April.

Last September, the South Korean government decided to hold off expanding the Kaesong complex because of heightened tension on the Korean Peninsula after the North’s test-firing of seven missiles in July. After Pyongyang’s first-ever underground nuclear test on Oct. 9, tensions increased further.

Minister Lee had been negative about the expansion of the joint business venture, saying more progress in the six-party talks as a prerequisite condition to proceed with the plan.

“We’ve already completed preparing some 3.3 million square meters of land there with almost perfect water and electricity supply,” Lee said in a press briefing at the ministry in Seoul. “Considering its important role for small- and medium-sized South Korean companies, I believe we should resume the expansion plan late next month or mid-April at the latest.”

The Kaesong site is one of two major cross-border projects South Korea has kept afloat despite the chilly inter-Korean relations. The two Koreas are also runing a joint tourism project at Mt. Kumgang in North Korea.

When fully expanded by 2012, the complex is expected to house about 2,000 South Korean manufacturers employing about half a million North Koreans, according to the Ministry of Unification.

The minister also said another inter-Korean summit would be a very useful tool to boost a more reconciliatory atmosphere on the Korean Peninsula, but said the government is not making any efforts to prepare for one.

“Just like the historic summit in June 2000 did, another inter-Korean summit would play a crucial role in bringing peace and prosperity between the two Koreas without a doubt,” Lee said.

“However, an agreement between the leaders of the two Koreas is necessary to realize another summit. We’re not currently working on the issue with North Korea.”

Lee also said South and North Korea should play a leading role in forming a separate peace forum among nations participating in the nuclear disarmament talks. The establishment of the peace forum was mentioned in an agreement made in Sept. 19, 2005, which laid out the course for North Korea’s eventual denuclearization.

“I’m not sure exactly how many nations will take part in the forum to guarantee peace on the Korean Peninsula. It could be four including the two Koreas, the United States and China,” Lee said. “However, Seoul and Pyongyang should play a leading role in preparing the forum.”

Lee said, if last week’s agreement in the six-party talks is carried out as planned, the two Koreas should begin to set up the peace forum at the same time.

On Feb. 13, the North pledged to take the first steps toward dismantling its nuclear program in return for energy aid and other humanitarian assistance during the six-party talks.

Land for S. Korean companies in Kaesong complex on sale next month: ministry
Yonhap
2/20/2007

South Korea’s Unification Ministry said Tuesday that it plans to parcel out a 530,000-pyeong lot for South Korean manufacturers in the inter-Korean industrial complex in Kaesong late next month. One pyeong is 3.3 square meters.

The land is the remainder of the 1-million-pyeong lot which the South and North Korean governments have been jointly developing in the western North Korean border town in the first phase of the inter-Korean project which is to construct a 20-million-pyeong industrial base for South Korean companies by 2012. The complex, if completed, is expected to employ as many as half a million North Korean workers for some 2,000-3,000 South Korean manufacturers.

The government originally planned to sell the lot in three stages last year, but had to put it off amid inter-Korean tension caused by the North’s missile and nuclear tests.

“I believe it’s proper to sell the lot as early as the end of next month,” Unification Minister Lee Jae-joung said, citing his report submitted to President Roh Moo-hyun on Feb. 6 on his agency’s business for this year.

The Kaesong Industrial Complex is one of the two major cross-border projects that South Korea has kept afloat in spite of U.S. opposition. The two Koreas also run a joint tourism project at the North’s scenic Mount Geumgang.

In the industrial complex, South Korean businesses use cheap but skilled North Korean labor to produce goods. Currently, 21 labor-intensive South Korean factories employ about 11,160 North Korean workers.

But U.S. hard-liners criticize the complex, claiming that the factories where North Korean workers earn about US$60 per month are actually channels to funnel much-needed hard currency to the tyrannical North Korean regime.

From Naenara:

The DPRK Law on the Leasing of Land was adopted by Resolution No. 40 of the Standing Committee of the Supreme People’s Assembly on October 27, 1993, and amended by Decree No. 484 of the Presidium of the Supreme People’s Assembly on February 26, 1999.

The law consists of 42 articles in 6 chapters.

Chapter 1. Fundamentals (Articles 1~8)

This chapter stipulates that the mission of the law is to contribute to establishing a proper system in the leasing of land needed for foreign investors and foreign-invested enterprises and for use of the leased land.

A foreign corporate body or individual may lease and use land in the DPR Korea and the lessee has the right to use the land leased. When land is leased, natural resources and deposits in the land leased are not covered by the right to use land. The term of lease is fixed by agreement between the contracting parties within the limit of 50 years.

Chapter 2. Ways of leasing land (Articles 9~14)

This chapter defines the ways of leasing land.

It stipulates that the leasing of land should be undertaken through consultation or by means of tender or auction. It also notes that the lessor should provide the lessee with the data like the location and area of the land and its topographical map, uses to which the land may be put, the building area, a plan for development of the land, the period during which construction must be completed and the minimum amount of investment required, the requirements for environmental protection, hygiene and anti-epidemics and fire prevention, the term of lease of the land and the state of development of the land.

The lessee must use land in accordance with the contract for use of land. A lessee who wishes to alter the use of land must conclude a supplementary contract with the lessor.

Chapter. 3 Transfer and mortgage of the right to use land (Articles 15-27)

This chapter stipulates that the lessee is permitted, with the approval of the lessor; to transfer (by means of selling, re-leasing, donation or inheritance) or mortgage to a third party the right to use a part or the whole of the land leased and defines in detail the problems arising in the transfer and mortgage of the right to use land.

It also prescribes the condition for transferring the right to use land, the limits of its transfer and the procedure for the sale of the right to use land.

The lessee is allowed to sell, re-lease, donate or mortgage the leased land only after paying the total amount of charge for transferring the right to use land stipulated in the contract for leasing the land and making the contracted investment. In case of the transfer of the right to use land, the rights and obligations relating to the use of the land, and the structures and other appurtenance on it, are also transferred.

When a lessee sells the right to use land, the lessor has the preferential right to buy it.

The chapter also notes that the lessee may re-lease the land leased observing due formalities and defines the procedures for mortgaging the right to use land.

A lessee may mortgage the right to use land with the purpose of obtaining a loan from a bank or other financial institutions. In this case the mortgagor and the mortgagee must conclude a contract for the mortgage in accordance with the terms of the contract for leasing the land. The two contracting parties must register the mortgaged right with the relevant lessor within 10 days.

If the right to use land is mortgaged, the structures and other appurtenance on the land are also mortgaged with the land. When concluding a contract for the mortgage, the mortgagee may request the mortgagor the contract for leasing the land, a copy of the transfer contract, a copy of the certificate for use of the land or other information relating to the current state of the land.

The chapter defines the right of mortgagee when the right to use land is mortgaged as well.

The mortgagee may dispose of the right to use the land mortgaged by contract, as well as the structures and other appurtenance of the land in accordance with the mortgage contract if the mortgagor fails to pay the amount due by the expiry of the mortgage, or if business has been dissolved or gone bankrupt during the period of the mortgage contract. One who has won the right to use land and the structures and other appurtenance on it disposed of by the mortgagee must receive attestation from a notary office, register the change with the registration office and use the land in accordance with the contract for leasing the land.

The mortgagor is not permitted to remortgage or transfer the right to use land during the period of contract without the approval of the mortgagee.

Chapter 4. Rent of land (Articles 28-33)

This chapter notes that the lessee must pay rent for the leased land to the lessor. When leasing developed land, the lessor will receive from the lessee the charge for transferring the right to use land plus the cost of land development. The lessee must pay the total amount of charge for transferring the right to use land within 90 days of signing the contract for leasing land. If the charge is not paid before the prescribed deadline, the lessor must demand additional payment equivalent to 0.1% of the overdue rent on a daily basis, starting from the first day of default.

A lessee who has been leased land through consultation or auction must pay to the lessor a guaranty equivalent to 10% of the charge for transferring the right to use land, within 15 days of the conclusion of the contract for leasing the land. The user of the land leased should pay annually land use charge. In this case, for those who invest in priority sectors and in the Rason economic and trade zone, land use charges may be reduced or exempted for up to 10 years.

Chapter 5. Return of the right to use land (Articles 34~38)

This chapter provides that the right to use land automatically returns to the lessor on the expiry of the term of the lease stipulated in the contract. The structures and other appurtenance on the land also return, without compensation being paid.

The chapter defines the procedure for canceling the registration of the right to use land, extension of the term of land lease, the expense for the withdrawal and clearance of the leased land and the cancellation of the right to use the leased land.

Chapter 6. Penalties and settlement of disputes (Articles 39-42)

This chapter specifies that if a lessee illegally uses land without the certificate for the use of land, or changes the use of land or transfers or mortgages the right to use land without approval, he must be fined, have the facilities on the land confiscated or be required to restore the land to its original state, and the contract for transfer or mortgage be declared null and void.

The chapter also stipulates the ways of depriving the lessee of the right to use land, appealing to or filing a suit on it and settling the disputes.

In case of a failure to invest 50% of the total sum of investment during the period prescribed in the contract for the leasing of land, or to develop the land as contracted, the lessee may be deprived of the right to use land.

If the lessee disagrees with the penalty imposed on him, he may appeal to an institution senior to the one that has imposed sanctions or file a suit with an appropriate court within 20 days of the receipt of the notice of penalty.

Disagreements arising in leasing land or transferring and mortgaging leased land to a third party must be settled through consultation.

In case of failure in consultation, they must be settled through arbitration or legal procedures provided by the DPRK, or may be taken to an arbitration body in a third country for settlement.

The DPRK Law on the Leasing of Land contributes to establishing a proper system and order in the leasing of land needed for foreign investors and foreign-invested enterprises in order to secure their investment and activities.