Archive for the ‘Kaesong Industrial Complex (KIC)’ Category

Kaesong receives 100,000th tourist

Wednesday, October 15th, 2008

According to Yonhap:

Hyundai Asan Corp., a unit of the South’s Hyundai Group in charge of businesses in North Korea, opened the tour to Kaesong in December last year. Everyday, about 370 people visit the North Korean city, about 70 kilometers north of the frontier separating the two Koreas.

The high number of tourists to Kaesong comes as the two Koreas are still bickering over responsibility in the July death of the South Korean tourist, who was fatally shot dead by a North Korean soldier while touring the North’s scenic mountain resort of Geumgang.

Since then tours to Mt. Geumgang, which began in 1998, have been indefinitely suspended.

In a ceremony to celebrate the 100,000th tourist, Hyundai Asan Chief Executive Officer Cho Kun-shik expressed hope that the two Koreas could amicably resolve the impasse over the shooting death.

According to the Associated Press (via the New Zealand Hearld):

Company officials said most of the tourists have been South Koreans but about 2,600 Americans, Japanese and other foreigners also have taken part in the programme.

Before the [Kumgangsan] shooting incident, about 10,000 people travelled to Kaesong every month, but the number of monthly visitors declined to about 7,450 in August and 5,770 in September, according to Hyundai Asan.


1. By May 2008, 40,090 tourists had visited Kaesong, and the daily quota was increased from 300 to 500.  

2. Last August, Hyundai announced it was sending $928,560 to North Korea for the Kaesong tours

3. According to Dr. Lankov, the price to customers is W180,000, W100,000 of which is paid to the DPRK.  Additionally, Hyundai pays for all infrastructure improvements.  If these numbers are correct, the DPRK has grossed (and probably netted) W10,000,000,000  since the project was launched (appx. US$9,800,000 using an average interbank exchange rate from January through today).

4.  Although Hyundai Asan asserts (above) that appx. 370 tourists visit Kaesong per day, the most recent monthly figures (5,770 in September) indicate a mere 192/day.  370 is the number derived by taking the total (100,000) and dividing it by the number of days the project has run (appx. 270 this year)…so the daily average trend by month is now well below the annualized daily average.

Read more here:
N. Korean city draws 100,000 tourists from South despite shooting impasse

North Korea: Border city draws 100,000 tourists
Associated Press (via the New Zealand Hearld)


North Korea on Google Earth

Thursday, October 2nd, 2008

North Korea Uncovered: Version 12
Download it here

mayday.JPGAbout this Project: This map covers North Korea’s agriculture, aviation, cultural locations, markets, manufacturing facilities, energy infrastructure, political facilities, sports venues, military establishments, religious facilities, leisure destinations, national parks, shipping, mining, and railway infrastructure. It is continually expanding and undergoing revisions. This is the 12th version.

Additions include: Tongch’ang-dong launch facility overlay (thanks to Mr. Bermudez), Yongbyon overlay with destroyed cooling tower (thanks to Jung Min Noh), “The Barn” (where the Pueblo crew were kept), Kim Chaek Taehung Fishing Enterprise, Hamhung University of education, Haeju Zoo, Pyongyang: Kim il Sung Institute of Politics, Polish Embassy, Munsu Diplomatic Store, Munsu Gas Station, Munsu Friendship Restaurant, Mongolian Embassy, Nigerian Embassy, UN World Food Program Building, CONCERN House, Czech Republic Embassy, Rungnang Cinema, Pyongyang University of Science and Technology, Pyongyang Number 3 Hospital, Electric Machines Facotry, Bonghuajinlyoso, Second National Academy of Sciences, Central Committee Building, Party Administration Building, Central Statistics Bureau, Willow Capital Food House, Thongounjong Pleasure Ground, Onpho spa, Phipa Resort Hotel, Sunoni Chemical Complex (east coast refinery), Ponghwa Chemical complex (west coast refinery), Songbon Port Revolutionary Monument, Hoeryong People’s Library, Pyongyang Monument to the anti Japanese martyrs, tideland reclamation project on Taegye Island. Additionally the electricity grid was expanded and the thermal power plants have been better organized. Additional thanks to Ryan for his pointers.

I hope this map will increase interest in North Korea. There is still plenty more to learn, and I look forward to receiving your contributions to this project.

Version 12 available: Download it here


Kaesong Industrial Zone output update

Monday, September 15th, 2008

The South Korean Ministry of Unification has reports on economic output at the Kaesong Industrial Zone.  Below are the highlights from Yonhap:

The total output by South Korean factories operating in North Korea has exceeded US$400 million, Seoul’s Unification Ministry said Monday.

Companies at the Kaesong industrial complex produced goods worth a total of US$410 million between January 2005, when the compound was opened, and July this year. One-fifth of all goods produced were exported, according to the ministry handling inter-Korean affairs.

The output in the first seven months of this year amounted to $140 million, up 51 percent from the same period last year.

As of August, 79 firms operated in the area, employing more than 32,000 North Korean workers, mostly women.

Read the full article here:
Production in inter-Korean business town tops $400 million


DPRK aid and policy changes

Tuesday, August 26th, 2008

Andrei Lankov writes in the Korea Times that South Korea’s threats to reduce tourism levels to Kaesong, as well as support for the Kaesong Industrial Zone, are misguided.  His reasoning is as follows:

North Korea is a very peculiar society, where the elite are almost entirely free from the pressures experienced by those below them. When sanctions are applied to such a regime, they seldom have a direct bearing on the elite and their lifestyle.

Sanctions usually work in an indirect way, by punishing the population which then might either rebel against the government or vote it out of power. Neither rebellion nor elections are possible in North Korea (well, elections are happening there, as everybody knows, with the approval rate of the government candidates standing at a world record high of 100 percent). As a result of sanctions the populace will die without protesting, while the elite will survive and stay in control, even if for a while they will have ride their beloved Mercedes limousines less frequently.

The only way to bring changes to North Korea is to create forces which will be able to challenge the government. This might lead to a revolution, but one cannot completely rule out that the regime will start giving in if sufficiently pressed from within.

In addition to Lankov’s point above, sanctions can perversely benefit those in power who control and profit from black market activity (at higher prices).   Additionally, politically sophisticated leaders exploit the consequences of foreign-imposed sanctions to restrict domestic freedoms and political opposition. 

Bossuyt (Adverse Consequences of Economic Sanctions) shows even the most optimistic accounts of sanctions point to only a third having partial success.  Others find a mere 2% success rate among authoritarian regimes.  So sanctions have a poor track record of inducing positive policy changes, particularly in North Korea. 

So why are the Kaesong and Kumgang projects worthwhile?  Though not all that economical, Lankov argues that these aid projects create alternate channels for information to permeate the hearts and minds of the isolated North Korean people, and that shattering the North’s monopoly on information is key to promoting change within the DPRK:

…in order to facilitate North Korea’s transformation, more truth about the outside world needs to be imported. The survival of the North Korean regime now critically depends on a few important myths, and each myth is patently false and hence very vulnerable.

When the North Korean propaganda-mongers are talking to the North Korean public, they have to hide how poor their country actually is, and they also have to lie about the great respect Kim and his regime enjoys worldwide, especially in South Korea. An increase in contact with the outside world is the best way to undermine these falsities.

The inconvenient truth regarding South Korea’s huge economic advantage will start to surface soon. It will probably take more time before it will dawn on the North Koreans that their Seoul guests are not exactly full of love and respect for the Pyongyang dynasty, either.

There is plenty of journalistic evidence that many North Koreans already know the South is “rich”—although they might not have any idea what that actually means. Still, of all the Hyundai projects in the DPRK, I believe the Kaesong Industrial Zone is probably the most helpful for the South in the long term.  None of Hyundai’s other projects do all that much to improve the human capital of the DPRK people, and when things eventually change, it is important for the RoK to have a population of constituents in the DPRK who have some job and management skills and familiarity with the South’s culture to ease the transition.

Comments welcome.

Read the full article here:
Sanctions Harden Lives of Ordinary North Koreans
Korea Times
Andrei Lankov


Inter Korea trade and exchange

Sunday, August 24th, 2008

Last week, the Choson Ilbo reported on trade, tourism and other exchanges between the two Koreas:

The number of [South Korean] tourists to North Korea plunged more than 60 percent last month following the shooting death of a South Korean tourist at Mt. Kumgang resort.

The Unification Ministry says the number dropped to about 21,000, almost a 20 percent decrease from July of last year. The resort was closed after the shooting.

The amount of trade between the Koreas also dropped 1.5 percent from last year.

Although commercial transactions at the jointly-operated Kaesong Industrial Complex in the North increased more than 28 percent year on year, non-commercial transactions, such as aid to the North, plunged more than 80 percent.

Read more here:
Tourism to N. Korea Drops 60% in July
Choson Ilbo


New York Times reports on Kaesong Zone

Sunday, August 24th, 2008

Although the article did not offer much new or probing analysis, there were a few data points that I thought it was important to highlight: 

Despite its isolation and prisonlike feel, the Kaesong Industrial Park is booming with construction. The park’s operator, a South Korean developer, Hyundai Asan, hopes to expand it into a minicity over the next 12 years, with high-rise apartments and hotels, an artificial lake and three golf courses.

By that time, the company hopes there will be about 2,000 factories here employing 350,000 North Koreans and producing $20 billion worth of goods a year.

That compares with a manufacturing output of only $366 million in the first half of this year, according to South Korea’s unification ministry.

In the six months through June, the flow of goods in and out of the industrial park accounted for 42 percent of the $881 million in trade between the two Koreas, the ministry said.


[…] 72 smaller South Korean companies have already built factories here, looking to tap the North’s supply of low-cost, Korean-speaking labor. So far, only one foreign company has come [–German auto parts maker Prettl Group is building a factory. Two Chinese companies will begin operations soon[, b]ut most companies here continue to be smaller South Korean firms, producing low-tech goods, from frying pans to running shoes, largely for domestic consumption.] (NKeconWatch combined two different paragraphs here)

The piecemeal brand of change is seen in the experiences of SJ Tech, a South Korean maker of car and cellphone parts that built a $4 million factory here four years ago. The company’s first North Korean employees had never even seen a keyboard, much less a computer, said Yoo Chang-geun, SJ Tech’s president. SJ Tech has spent so much time teaching them things like machinery operation and management concepts that Mr. Yoo jokingly calls his factory “North Korea’s first business school.”

But the North Koreans were eager learners, sketching keyboards on paper to teach themselves typing. Now, SJ Tech’s 430 North Korean employees have learned enough to run the factory without South Korean supervisors.

In a telling sign, they have also changed their haircuts to look more like their South Korean colleagues.

Andrei Lankov seems optimistic on the project’s political goals, stating “When North and South Koreans can interact on a daily basis, it is a chance for the North Koreans to see with their eyes that their own propaganda doesn’t make sense.”

A few described how the South Korean-run industrial park was improving lives by paying its workers the equivalent of about $60 a month, three times the average salary in the rest of Kaesong. […]

The South Korean government, which spent more than $150 million subsidizing the park, provides low-interest loans and insurance to companies to offset the risks of investing in the unstable and still hostile North.

Mr. Yoo of SJ Tech said his North Korean employees’ monthly salaries of $75, in contrast to the $2,000 he pays South Koreans, made investing in North Korea entirely worthwhile, despite any risks.

The article seems to take worker compensation claims at face value, but in reality Kaesong workers do not take home their allotted wages.  The DPRK government keeps most of them in taxes and administrative fees.  However, other non-monetary benefits make the jobs highly envied among North Korean workers.  Rumor has it that North Korean workers pay hefty bribes to get these jobs. 

Read the full article here:
Big Dreams for North Korean Industrial Park
New York Times
Martin Fackler


Download glitch fixed: North Korea Google Earth (version 11)

Thursday, August 14th, 2008

The most authoritative map of North Korea on Google Earth
Download it here

This map covers North Korea’s agriculture, aviation, cultural locations, markets, manufacturing facilities, railroad, energy infrastructure, politics, sports venues, military establishments, religious facilities, leisure destinations, and national parks. It is continually expanding and undergoing revisions. This is the eleventh version.

Additions include: Mt. Paegun’s Ryonghung Temple and resort homes, Pyongyang’s Chongryu Restaurant, Swiss Development Agency (former UNDP office), Iranian Embassy, White Tiger Art Studio, KITC Store, Kumgangsan Store, Pyongyang Fried Chicken Restaurant, Kilju’s Pulp Factory (Paper), Kim Chaek Steel Mill, Chongjin Munitions Factory, Poogin Coal Mine, Ryongwun-ri cooperative farm, Thonggun Pavilion (Uiju), Chinju Temple (Yongbyon), Kim il Sung Revolutionary Museum (Pyongsong), Hamhung Zoo, Rajin electrified perimeter fence, Pyongsong market (North Korea’s largest), Sakju Recreation Center, Hoeryong Maternity Hospital, Sariwon Suwon reservoir (alleged site of US massacre), Sinpyong Resting Place, 700 Ridges Pavilion, Academy of Science, Hamhung Museum of the Revolutionary Activities of Comrade Kim Il Sung, South Hamgyong House of Culture, Hamhung Royal Villa, Pork Chop Hill, and Pyongyang’s Olympic torch route. Additional thanks go to Martyn Williams for expanding the electricity grid, particularly in Samjiyon, and various others who have contributed time improving this project since its launch.

Disclaimer: I cannot vouch for the authenticity of many locations since I have not seen or been to them, but great efforts have been made to check for authenticity. These efforts include pouring over books, maps, conducting interviews, and keeping up with other peoples’ discoveries. In many cases, I have posted sources, though not for all. This is a thorough compilation of lots of material, but I will leave it up to the reader to make up their own minds as to what they see. I cannot catch everything and I welcome contributions.  Additionally, this file is getting large and may take some time to load.


N Korea worker killed in Kaesong

Thursday, July 17th, 2008

From the BBC:

A North Korean worker was killed and four others were injured in an accident in the Kaesong industrial complex in North Korea, Southern officials said.

It happened when a steel frame collapsed at a factory owned by a South Korean company, Pyeongan, on Wednesday.

An investigation into the cause of the accident is reportedly under way.

Two of the four injured are in critical condition, a spokesman for South Korea’s Unification Ministry said, according to Associated Press.

They are all being treated in a hospital in the zone.

Read the full story here:
N Korea worker killed in Kaesong


labor constraints at Kaesong

Wednesday, July 9th, 2008

According to the Korea Times, the end of official North-South dialogues has put plans on hold to expand housing for workers in the Kaesong Industrial Zone. 

From the article:

Officials at the complex expressed concerns that South Korean companies intending to set up operations there may be unable to do so as a lack of housing will likely see manpower shortages.

According to the Gaesong Industrial District Management Committee, the number of North Korean workers at 72 companies operating in the site totals 30,084 and the figure could reach 40,000 by late this year.

Besides, approximately 80,000 to 100,000 workers would be needed by 2010 when 450 companies are expected to settle in the industrial park.

However infrastructure projections show that less than 60,000 North Korean workers will likely be able to commute to the industrial site.

Currently, North Korean workers head for their workplaces by 88 commuter buses and bicycles and the authorities promised to provide an additional 100 buses until the year’s end.

South and North Korea agreed last December to build dormitories to accommodate 15,000 North Korean workers.

The two sides were to conduct a geological survey early this year and start construction work in the first half of the year following the agreement but the suspended talks have hindered the plan.

After conservative President Lee Myung-bak vowed a tougher line toward the North, the communist North kicked South Korean officials out of its territory in March and cut off official communication channels.

The Seoul government recognizes the lodging problem as urgent. Yet, it admitted it cannot find a solution at the moment since the North is rejecting any talks.

Read the full story here:
Gaeseong Complex Lacks in Lodgings for N. Korean Workers
Korea Times
Kim Sue-young


(Updated) Inter-Korean trade up this year

Tuesday, July 8th, 2008

According to Yonhap (citing a Ministry of Unification report), trade volume between the two Koreas increased 23% to US$880 million (up from $718.2 million) in the first half of 2008.  This is due to an increase in commercial trade (not official exchanges), which were up 47% to $823.6 million from $558.7 million.  Commercial trade comprises 94% of trade volume, up from 78% last year. The number of firms conducting inter-Korean trade reached 526, up from 324, and and they manufactured 736 items (up from 686).

Goods traded in larger volume than a year ago: plate glass, clams, brackens and textiles from the Kaesong complex.

(UPDATE) Much of this is due to brisk activity in the Kaesong Industrial Zone, which employs 30,084 North Koreans (as of July 4, 2008), up from 225 in 2004.  The zone comprises 72 South Korean firms. 

Total production at the complex has been on a steady rise from US$15 million at the end of 2005 to $373.8 million as of the end of May, up 147 percent from last year, the Kaesong Industrial District Management Committee said.

“Such a rise in production is notable in that 33 of the 72 firms in the complex are start-ups operating there for less than one year,” said Kim Min-kyong, a public relations official of the committee.

To learn more, read the full articles below:
Number of N.K. workers at Kaesong complex tops 30,000
Shim Sun-ah

 Inter-Korean trade rises sharply in first half despite political chill
Shim Sun-ah