North Korean Economy Watch

Korea Times
10/5/2007

More than $11 billion is needed to implement cross-border business projects that the leaders of the two Koreas agreed to at the historic summit this week, a local research institute estimated Friday.

Wrapping up a three-day summit, the second one since 2000, South Korean President Roh Moo-hyun and North Korean leader Kim Jong-il on Thursday agreed to a number of inter-Korean business projects.

According to Hyundai Research Institute, the development of a special economic zone in Haeju, the North’s western port city, will cost about $4.6 billion. Around $2.5 billion will be spent to finance the expansion of an industrial complex in the North Korean border city of Kaesong.

A project to build leisure facilities around Mount Baekdu is expected to cost $1.3 billion, the research institute said.

The estimated cost, when it is financed over five years, is equivalent to 8.75 percent of the North’s gross domestic income, and 0.25 percent of the South’s gross domestic product, Hyundai Research said.

The two leaders called for rapidly expanding the South-supported industrial park in the North’s border town of Kaesong and launching cross-border freight transportation via an inter-Korean railway between the South’s Munsan and the North’s Pongdong.

The two Koreas also agreed to jointly repair and maintain the North’s dilapidated expressway linking Kaesong and Pyongyang, as well as the North’s railway between Kaesong and Sinuiju on the North’s western Chinese border.

As part of a bilateral agreement to boost relations in tourism, history, language, education, culture, sport and art, the Koreas agreed to open a direct air route between Seoul and Mount Paekdu, allowing South Koreans to tour the scenic North Korean mountain on the North’s northern border with China.

The research institute, meanwhile, projected that the North would get $138 billion worth of economic benefits and the South $4.8 billion should the inter-Korean business projects be implemented as planned.

Institute for Far East Studies
NK Brief No. 07-10-4-2

1. The South and the North shall uphold and endeavor actively to realize the June 15 Declaration.

The South and the North have agreed to resolve the issue of unification on their own initiative and according to the spirit of “by-the-Korean-people-themselves.”

The South and the North will work out ways to commemorate the June 15 anniversary of the announcement of the South-North Joint Declaration to reflect the common will to faithfully carry it out.

2. The South and the North have agreed to firmly transform inter-Korean relations into ties of mutual respect and trust, transcending the differences in ideology and systems.

The South and the North have agreed not to interfere in the internal affairs of the other and agreed to resolve inter-Korean issues in the spirit of reconciliation, cooperation and reunification.

The South and the North have agreed to overhaul their respective legislative and institutional apparatuses in a bid to develop inter-Korean relations in a reunification-oriented direction.

The South and the North have agreed to proactively pursue dialogue and contacts in various areas, including the legislatures of the two Koreas, in order to resolve matters concerning the expansion and advancement of inter-Korean relations in a way that meets the aspirations of the entire Korean people.

3. The South and the North have agreed to closely work together to put an end to military hostilities, mitigate tensions and guarantee peace on the Korean Peninsula.

The South and the North have agreed not to antagonize each other, reduce military tension, and resolve issues in dispute through dialogue and negotiation.

The South and the North have agreed to oppose war on the Korean Peninsula and to adhere strictly to their obligation to nonaggression.

The South and the North have agreed to designate a joint fishing area in the West Sea to avoid accidental clashes. The South’’s Minister of Defense and the North’’s Minister of the People’’s Armed Forces have also agreed to hold talks in Pyongyang this November to discuss military confidence-building measures, including military guarantees covering the plans and various cooperative projects for making this joint fishing area into a peace area.

4. The South and the North both recognize the need to end the current armistice regime and build a permanent peace regime. The South and the North have also agreed to work together to advance the matter of having the leaders of the three or four parties directly concerned to convene on the Peninsula and declare an end to the war.

With regard to the nuclear issue on the Korean Peninsula, the South and the North have agreed to work together to implement smoothly the September 19, 2005 Joint Statement and the February 13, 2007 Agreement achieved at the Six-Party Talks.

5. The South and the North have agreed to facilitate, expand, and further develop inter-Korean economic cooperation projects on a continual basis for balanced economic development and co-prosperity on the Korean Peninsula in accordance with the principles of common interests, co-prosperity and mutual aid.

The South and the North reached an agreement on promoting economic cooperation, including investments, pushing forward with the building of infrastructure and the development of natural resources. Given the special nature of inter-Korean cooperative projects, the South and the North have agreed to grant preferential conditions and benefits to those projects.

The South and the North have agreed to create a “special peace and cooperation zone in the West Sea” encompassing Haeju and vicinity in a bid to proactively push ahead with the creation of a joint fishing zone and maritime peace zone, establishment of a special economic zone, utilization of Haeju harbor, passage of civilian vessels via direct routes in Haeju and the joint use of the Han River estuary.

The South and the North have agreed to complete the first-phase construction of the Gaeseong Industrial Complex at an early date and embark on the second-stage development project. The South and the North have agreed to open freight rail services between Munsan and Bongdong and promptly complete various institutional measures, including those related to passage, communication, and customs clearance procedures.

The South and the North have agreed to discuss repairs of the Gaeseong-Sinuiju railroad and the Gaeseong-Pyongyang expressway for their joint use.

The South and the North have agreed to establish cooperative complexes for shipbuilding in Anbyeon and Nampo, while continuing cooperative projects in various areas such as agriculture, health and medical services and environmental protection.

The South and the North have agreed to upgrade the status of the existing Inter-Korean Economic Cooperation Promotion Committee to a Joint Committee for Inter-Korean Economic Cooperation to be headed by deputy prime minister-level officials.

6. The South and the North have agreed to boost exchanges and cooperation in the social areas covering history, language, education, science and technology, culture and arts, and sports to highlight the long history and excellent culture of the Korean people.

The South and the North have agreed to carry out tours to Mt. Baekdu and open nonstop flight services between Seoul and Mt. Baekdu for this purpose.

The South and the North have agreed to send a joint cheering squad from both sides to the 2008 Beijing Olympic Games. The squad will use the Gyeongui Railway Line for the first-ever joint Olympic cheering.

7. The South and the North have agreed to actively promote humanitarian cooperation projects.

The South and the North have agreed to expand reunion of separated family members and their relatives and promote exchanges of video messages.

To this end, the South and the North have agreed to station resident representatives from each side at the reunion center at Mt. Geumgang when it is completed and regularize reunions of separated family members and their relatives.

The South and the North have agreed to actively cooperate in case of emergencies, including natural disasters, according to the principles of fraternal love, humanitarianism and mutual assistance.

8. The South and the North have agreed to increase cooperation to promote the interests of the Korean people and the rights and interests of overseas Koreans on the international stage.

The South and the North have agreed to hold inter-Korean prime ministers” talks for the implementation of this Declaration and have agreed to hold the first round of meetings in November 2007 in Seoul.

The South and the North have agreed that their highest authorities will meet frequently for the advancement of relations between the two sides.

Oct. 4, 2007

Pyongyang
[Document signed by both Roh Moo-hyun and Kim Jong Il]

Daily NK
Jeong Jae Sung
9/18/2007

North Korea has requested for negotiations to begin at the Inter-Korean Summit Talks on the co-development of the Kaema Plateau, also known as “the roof of Korea.” The request was taken into consideration by the Ministry of Unification.

In light of North Korea’s request, the Ministry has recently conducted a survey of North Korean defectors from South Hamkyung, Yangkang and Jagang, where the Kaema Plateau is located, regarding the significant geographical features, the status of current development at the plateau, and the intentions of the North Korean government.

Kim Hyung Seh (pseudonym), a North Korean defector from Yangkang, stated that “I was told by interested parties at the Ministry of Unification that right after the Summit Talks North Korea will deliberate the Kaema Plateau development issue and that they needed my cooperation for a sound investigation.”

According to Kim, the questions asked focused on the North Korean government’s purpose in developing the Kaema Plateau, the potential value of this site as a tourist resort, and wether or not there is enough possibility for tourism given the ever increasing number of visitors from Mongolia.

He asserted that “the Kaema Plateau is a huge forest which has no value as a tourist attraction at the moment. All the particular tourist attractions in North Korea retain villas owned by Kim Il Sung and Kim Jong Il, but there are none at Kaema Plateau, which speaks for itself.”

Kim also added that the affiliates of the Ministry of Unification did not know where the Kaema Plateau was.

“It is difficult for North Korea to develop the area around Kaema Plateau, which is why they followed the shoreline to develop their railways. In order to make this project possible, the basic transportation infrastructure such as airline facilities, roads and railroads must be established first” advised Kim.

The Ministry of Unification has denied every having conducted these surveys. Regarding the interviews with defectors, one affiliate of the Ministery said “We have not held such meetings,” and another said that “We have met [with the defectors], but we never asked about the Kaema Plateau issue.”

Kim Joong Tae, the Director of the Ministry of Unification’s Inter-Korean Economic Cooperation Team, who interviewed Kim, told the DailyNK that “North Korea has never suggested the development of Kaema Plateau. The Ministry merely asked North Korean Defectors about tourism development at Mt. Baekdu.”

The Kaema Plateau is situated across the Middle and Southern region of Yangkang Province, South of Northwest Hamgkyung and East of Jagang. The total area is 14,300 km2 and the height is 1,340m. It is the highest and widest plateau in the entire peninsula, also known as “the roof of Korea.”

Kaema Plateau has abundant forest resources which provide avariety of material lumber. There is also a rich supply of mineral resources, including steel, magnesite, gold, apatite, and copper.

The only source of transportation infrastructure is the military airfields in Pungseo and Jangjin.

It is probable that North Korea’s reason for suggesting the development of Kaema Plateau is to make it tourist site, showcasing various amusment parks and ski resorts. As it is now, this area is completely restricted to civilian traffic. If transportation in the high region is developed, this could be applied for military purposes.

Lee Jin Young (pseudonym), a defector currently residing in South Korea’s Yangcheon district, explained that “the Kaema Plateau is so treacherous that it is only used as a military training field for Special Forces. This was the one area that allied forces could not get control of, even during the Korean War.”

She also added that, “rather than developing Kaema Plateau as a tourist attraction, they should develop the Baekmoo Plateau which includes Mt. Baekdu. The suggestion to develop the Kaema Plateau can only be seen as their intention to construct a better transportation infrastructure.”

Therefore, even if South Korea were to agree to the co-development of Kaema Plateau, there will be huge difficulties regarding the expansion of the social infrastructure and compromising with the military. In particular, the construction of Korean roads, railroads and airfields in the region is sure to cost a lot of money.

The most authoritative, publicly available map of North Korea
Version 4: August 29, 2007

Download it here 

This map covers North Korea’s agriculture, aviation, cultural locations, 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 fourth version.

Additions to the latest version of “North Korea Uncovered” include the city of Manpo along the Chinese border, KEDO, Kumgang Resort expansion, Kaesong Industrial Zone, as well as a few more parks, antiaircraft sites, dams, mines, canals, etc. I have also added more links in the menu which will tell the viewer a bit about the locations themselves. I have also changed the color scheme to make the collage easier to view.

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.

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

Now available on Google Earth! 
(click above to download to your own Google Earth)

North Korea Uncovered v.3

Google Earth added a high-resolution overlay of the area between Pyongyang and Nampo.  In it, most of the Koguryo tombs listed with UNESCO are now distinguishable.  In addition, viewers can see the latest Kim Jong Il palace (including a yacht), the DPRK’s premier golf course, and the Chinese-built Taean Glass factory.  I have also made some progress in mapping out the DPRK electricity grid.

This is the most authoritative map of North Korea that exists publicly today.  Agriculture, aviation, cultural institutions, manufacturing, railroad, energy, politics, sports, military, religion, leisure, national parks…they are all here, and will captivate anyone interested in North Korea for hours.

Naturally, 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. 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 on the more “controversial” locations. In time, I hope to expand this further by adding canal and road networks.

I hope this post will launch a new interest in North Korea. There is still plenty more to learn, and I look forward to hearing about improvements that can be made.

Download it to your Google Earth here! 
(substantial improvements over version 1)

Using numerous maps, articles, and interviews I have mapped out North Korea by “industry” (or topic) on Google Earth. This is the most authoritative map of North Korea that exists publicly today.

Agriculture, aviation, cultural, manufacturing, railroad, energy, politics, sports, military, religion, leisure, national parks…they are all here, and will captivate anyone interested in North Korea for hours.

Naturally, 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. 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 on the more “controversial” locations. In time, I hope to expand this further by adding canal and road networks.

I hope this post will launch a new interest in North Korea. There is still plenty more to learn, and I look forward to hearing about improvements that can be made.

Seoul Cautious Over Rift With China
Korea Times
Lee Jin-woo
2/2/2007

South Korea tried Friday to downplay its short track skaters’ action over Korea’s historical claim to a mountain on the border between North Korea and China during the ongoing Winter Asian Games.

On Wednesday, five South Korean female short track skaters held up seven placards with the message “Mount Paektu is our territory” during the awards ceremony following their silver medal win in the 5,000-meter relay.

A high-ranking South Korean official said the young skaters’ behavior was impromptu and should not be interpreted to have political significance.

“We have stressed that both Seoul and Beijing should deal with this issue calmly,” a government official said on condition of anonymity because of the sensitivity of the issue. “We delivered the message yesterday and today to our Chinese counterpart.”

The organizing committee of the Changchun Asian Games expressed regret Thursday and asked that similar incidents to be prevented in a letter to Kim Jung-kil, head of the Korea Olympic Committee. The games will end tomorrow.

The Chinese officials defined South Korean players’ act as a political activity, which is banned under the charter of the International Olympic Committee and the Olympic Council of Asia.

China’s foreign ministry also called on a senior South Korean diplomat in Beijing on Thursday afternoon and expressed regret over the issue.

South Korean skaters’ surprising move at the award ceremony came after the Chinese government made efforts to promote Mt. Paektu as “Changbai Mountain” during the games.

China has reportedly renamed schools after the mountain and has also ordered a dozen hotels run by ethnic Koreans near the mountain to halt business.

On Sept. 6, the organizing committee lit a torch at the top of the mountain, angering many South Koreans. The mayor of Changchun, the host city, said the mountain was chosen as the torch site on Sept. 6 because three rivers _ Tuman, Amrok and Songhua _ originate there. Tuman and Amrok rivers are known as Tumen and Yalu in China.

Many South Koreans believe the efforts are part of the Northeast Project, a Chinese academic project to reexamine the ancient history of the region.

They view the project as an attempt to distort ancient Korean history in the northeastern territory of what is now China, including the Koguryo Kingdom (37 B.C.-A.D. 668) and the Palhae Kingdom (698-926).

Beijing has disclosed plans to list the mountain as a UNESCO Natural World Heritage site, and plans to host the 2018 Winter Olympics there.

Unlike the angry South Korean public and news media, the South Korean government has remained calm over China’s actions to avoid stirring up a diplomatic dispute.

Under an agreement struck in 1962, China and North Korea, two sovereign states and U.N. members, agreed to share the mountain. The North has claim to 54.5 percent of the mountain, while China claims the remaining 45.5 percent.

Chinese schools renamed after border mountain
Joong Ang Daily
2/2/2007

China has renamed 18 primary and secondary schools after [Pektu] a scenic mountain that straddles the border with North Korea, a Chinese committee said.

The Committee for the Protection, Development and Management of the Changbaishan Protection Zone under the control of the Jilin Province, northeast China, said Wednesday it changed the names in July of last year to boost the protection of the mountain. The provincial government administers the Chinese part of the mountain.

The schools now have 11,000 students and 1,720 teachers, according to the committee.

The 2,750-meter (9,000-foot) peak, the highest on the Korean Peninsula, is a major tourist attraction for both Koreans and Chinese. North Korea signed an agreement in the 1960s to secede the territorial rights to about half of Mount Paekdu to China.

China has irritated Koreans by claiming the ancient Goguryeo Kingdom (B.C. 37-A.D. 668), which ruled most of northeastern China as well as the northern half of the Korean Peninsula, was a Chinese provincial government.

Some South Koreans insist the 1904 agreement between China and Japan on the transfer of China’s Yanbian region, which encompasses Mount Paekdu, should be nullified because Korea’s diplomatic sovereignty was deprived at that time, several years before Japan formally colonized the Korean Peninsula in 1910.

In September last year, China issued a directive to about a dozen hotels operating there, including four run by South Koreans and one by an ethnic Korean resident of Japan, to cease operations and leave by year’s end. The move was seen as part of its initiative to make the Mount Paekdu area a United Nations Educational, Scientific and Cultural Organization World Heritage site.

In a related move, Jilin Province has announced its plans to develop the mountain as the country’s highest-level tourism zone.

Joong Ang Daily
Lee Jung-min
1/9/2007

One of North Korea’s capitalist experiments may be awakening from hibernation. “The North’s National Economic Cooperation Federation and Tumen River Development Limited Company of South Korea have reached an agreement to build a heavy and chemical industry complex in Rajin-Sonbong district,” Oh Myoung-hwan, the president of the South Korean company, said yesterday. “We also agreed to carry out jointly a Mount Paektu tour project.” A letter of intent will be signed in Vladivostok, Russia, today, Mr. Oh said.

Mr. Oh, whose company is headquartered in Vladivostok, said Russian natural resources would be processed by North Korean workers in plants built with South Korean capital and technology. He added that he has informed the Unification Ministry in Seoul of his plans.

The National Economic Cooperation Federation is a North Korean foreign economic agency. Mr. Oh said Ryo So-hyon, the federation’s Vladivostok office head, will sign the letter of intent for the North Koreans.

A government official in Seoul speculated that North Korea is looking for new projects because its nuclear test in October triggered a drop in the number of South Korean tourists visiting Mount Kumgang and U.S. criticism of the Kaesong Industrial Complex has grown.

Mr. Oh said that when the new complex is running, train tours to Mount Paektu would be the next step. Tourists would travel by ship from Sokcho on South Korea’s east coast to Hoiryong and Musan, two harbors in the Rajin-Sonbong area of North Korea’s far northeast.

North Korea established the Rajin-Sonbong Free Economic and Trade Zone in 1991 on the western side of the Tumen River to attract foreign investment. It has been a near-total failure in attracting foreign investment. Mr. Oh said work on the new project would begin in 2-3 months.

Yonhap
China won’t unilaterally seek World Heritage status for Mt. Paekdu: Chinese Amb
11/17/2006

China’s top envoy to South Korea said Friday that his country will consult with a concerned country before seeking UNESCO World Heritage status for Mount Paekdu on its border with North Korea.

The remarks by Ning Fukui came amid growing concern that China has taken steps to solidify its historical claim over the highest peak on the Korean Peninsula, nearly half of which is in Chinese territory.

Joong Ang Daily
China tries to ease Paektu concern
11/18/2006

China’s top envoy to South Korea has said his country will consult with a concerned country, apparently referring to North Korea, before seeking World Heritage status for Mount Paektu on its border with the North, embassy officials said Friday. The World Heritage list is maintained by the United Nations Educational, Scientific and Cultural Organization.

The remarks by Ning Fukui came amid growing concern that China has taken steps to solidify its historical claim over the highest peak on the Korean Peninsula, nearly half of which is in Chinese territory.

“Even though China will put Changbaishan on the World Heritage list, it will do so in consultation with a concerned country,” the ambassador said in a speech during an academic forum at Seoul National University on Thursday, using the Chinese name for the mountain.

He did not directly mention North Korea during the speech, but has previously suggested several times that North Korea is the concerned country on the Mount Paektu issue.

In September, Beijing issued a directive to about a dozen hotels operating there, including four run by South Koreans and one by an ethnic Korean resident of Japan, to close their businesses and leave by the year’s end. The move was part of an initiative to make the Paektu area a World Heritage site nominated by Beijing, critics said.

In related news, northeastern Jilin Province, which administers the Chinese part of the mountain, unveiled an ambitious plan Friday that would make the mountain a 5A scenic spot, the highest of China’s tourism zone levels. China is bidding to host the 2018 Winter Olympics on its side of the mountain.