North Korean Economy Watch

By Benjamin Katzeff Silberstein

At 3:30PM GMT+9 on Tuesday July 4th, North Korean television announced that the country had successfully tested an intercontinental ballistic missile earlier in the day. Wall Street Journal:�

The missile, identified as the Hwasong-14, was launched at a steep trajectory and flew 933 kilometers (580 miles), reaching an altitude of 2,802 kilometers, according to North Korean state television. The numbers are in line with analyses from U.S., South Korean and Japanese military authorities.

US Secretary of State, Rex Tillerson, later confirmed that the launched missile was an intercontinental ballistic one.

Here in Seoul, things seemed to continue on as usual, which tends to be the case in this city more than used to its fair share of similar news. The biggest strategic consequence, of course, is that for the US. A successful intercontinental ballistic missile of this sort�could potentially strike anywhere in Alaska.

With the latest launch, North Korea takes one step further along the nuclear side of the Byungjin line�of parallel development of nuclear weapons and the national economy, and arguably, one step back on the economic side of the dual-track policy. In the formulation of the Byungjin line, of course, both are interrelated. Missile launches are often described as evidence of progress in industry and science, ultimately benefitting economic progress. This launch was no exception. From KCNA:s statement yesterday, July 4th 2017 (my emphasis):

The success in the test-fire of inter-continental ballistic rocket Hwasong-14, final gate to rounding off the state nuclear force, at just one go is a powerful manifestation of the invincible state might and the tremendous capability of the self-reliant national defence industry of Juche Korea that has advanced at a remarkably rapid pace under the great Workers’ Party of Korea’s new line on the simultaneous development of the two fronts, and a great auspicious event to be specially recorded in the history of the DPRK which has long craved for powerful defence capabilities.

This launch happened in a context where North Korea is already under sanctions designed to strike at its coal exports, one of its most important sources of income, and where the US has just signaled its resolve to go after North Korea’s financial channels through secondary sanctions of Chinese entities. At the same time, Kim Jong-un’s tenure has very much come to be associated with some economic progress (albeit from a low level, and primarily benefitting the relatively privileged classes), symbolized by projects such as the recently opened Ryomyong street.

It is not yet clear what the consequences will be. The US will likely try to add more sanctions targeted against specific entities and persons that help North Korea evade sanctions, and acquire equipment for its nuclear and missile programs.

The US will probably also call for international sanctions, but as Chad O’Carroll points out, the US may have a hard time getting such measures through in a quick manner given its currently tense relationships with both Moscow and Beijing. The US may also further push Beijing to implement the already existing sanctions against North Korea, but nothing appears to have changed with the claimed ICBM-test that would fundamentally alter China’s strategic calculations in the region. In other words, it continues to regard North Korea as a buffer between itself and US forces in the region, and as a geopolitical asset.

Whatever happens, it is safe to assume that it will not be good news for North Korea’s international ties in diplomacy, trade, finance, you name it. It would be easy to assume that economic progress and nuclear weapons development are mutually exclusive, since the second leads to further international isolation and economic sanctions, and therefore hampers the first.

In reality, that may be true. The North Korean Byungjin narrative, that weapons development�helps�economic progress, is difficult to swallow, especially when one considers the opportunity cost that the weapons programs carry, both in terms of domestic resource dedication and the cost in international isolation.

But there is another way to look at it. Whatever the actual consequences will turn out to be, North Korea is making a strategic calculation that the gains from the test, and from overall nuclear weapons and missiles development, will be greater than the potential costs and downsides. Consider the following two factors:

First, North Korea has made economic progress in the past few years, and particularly since Kim Jong-un came to power, even under years of severe sanctions. �North Korea has been under various forms of UN Security Council sanctions since its first nuclear test in 2006. During these years, its economic development has been impacted far more by domestic policy decisions than by international developments.

Again, we are absolutely not talking about any growth miracle, and some probably exaggerate the degree of the wealth increase in North Korea over the past few years. But without a doubt, North Korea is far better off now than it was eleven years ago, and worlds apart from the famine of the 1990s. Food insecurity prevails in North Korea but the country has not seen widespread starvation since the late 1990s, and largely thanks to better economic frameworks (or rather less predatory), and increased space for private production and trade within the economic system, things are looking much better today than in many years.

Just look at this video recently published by the Daily NK, from Chongjin, one of North Korea’s largest cities in its northeast. Is this long-term, sustainable growth that will eventually lead North Koreans to enjoy the same prosperity as their counterparts in South Korea or even China? Probably not. But at least it’s something.

Second, and relatedly, North Korea likely has a significant amount of channels for trade and various transactions that are not commonly known, but that play highly significant roles for the economy. For example, consider the information that Ri Jong Ho, a former official in North Korea’s Office 39, supplied in a recent interview with Kyodo News. Ri claims that North Korea procures up to 300,000 tons of fuel and various oil products from Russia each year, through dealers based in Singapore. As a point of comparison, a commonly cited figure for crude oil supplies from China is 520,ooo tons per year. Proportionately, then, 300,000 tons is not close to a majority, but still a significant amount for North Korea. While intelligence services or others with access to classified information may have known this already, Ri’s claims, if true (they have not and in all likelihood cannot be fully corroborated),

The point here is that North Korea has gotten so used to going through back channels and unconventional means to acquire highly significant amounts of supplies required for its society to function. It is an economic system where unconventional (and often illicit) channels of trade are not exceptions, but core parts of the economic management toolbox. This is not to argue that sanctions do not or cannot work. Rather, it shows the extent to which unconventional methods are institutionalized within economic management in North Korea.

The North Korean government is no monolith, and there are almost certainly some parts of the governing apparatus that are more and less pleased with the ICBM-test. But in the higher echelons of the leadership, the strategic calculation is probably that even with the added sanctions that are very likely to come, North Korea will be able to continue along roughly the same economic strategies as it has thus far. Perhaps we can call it North Korea’s own “strategic patience”: continuing with patchwork strategies for international economic relations, with little concern for the impact of lack of sustainable growth on people’s livelihoods, while banking on eventual recognition as a nuclear power. Only time will tell whether targeted secondary sanctions will change that calculation.

Benjamin Katzeff Silberstein

In a fascinating interview by Kyodo News’s Tomotaro Inoue, Ri Jong Ho, a former high-level official in Office 39 of the Korean Worker’s Party, makes several fascinating claims about the supply of fuel to North Korea:

North Korea secures up to 300,000 tons of oil products from Russia each year through Singapore-based dealers, a defector who formerly managed funds for the leadership has told Kyodo News, posing a challenge for the United States as it seeks to isolate Pyongyang.

“North Korea has procured Russia-produced fuel from Singapore brokers and others since the 1990s…It is mostly diesel oil and partly gasoline,” Ri Jong Ho, 59, a former senior official of Office 39 of the Workers’ Party of Korea, said recently in the U.S. capital in his first interview with media under his own name.

Ri also said North Korea relies more on Russia than China for fuel to keep its economy moving, indicating that the U.S. drive for Beijing to restrict oil supplies over Pyongyang’s nuclear and missile programs will only have a limited effect.

“It is a wrong perception that North Korea is completely dependent on China,” he said.

Petroleum products have been shipped to North Korea by tankers leaving Vladivostok and Nakhodka, both in the Russian Far East, with the fuel widely used for cars, ships and trains, helping to support the North’s economy, Ri said.

Other sources familiar with the fuel deals said the petroleum products ending up in North Korea are often purchased by brokers who claim they are destined for China, with the items procured using forged paperwork.

Ri, who defected to South Korea with his family in October 2014, provided details of the activities of Office 39.

The secretive entity, said to have been established by former North Korean leader Kim Jong Il in May 1974, is subject to international sanctions as the United States and other Western countries believe it is engaged in illicit economic activities and the management of slush funds for the leadership.

He said North Korea has been trying to reduce its economic reliance on China, Pyongyang’s most important benefactor, since leader Kim Jong Un issued an order to expand trade with Russia and Southeast Asian countries in August 2014.

The order followed Chinese President Xi Jinping’s visit to South Korea a month earlier, during which he and then South Korean President Park Geun Hye expressed opposition to North Korea’s nuclear weapons development. It was the first time for a Chinese president to visit South Korea before traveling to the North.

Ri said the North Korean leader was “infuriated” by the visit, going so far as to call China an “enemy state,” and began taking measures to boost trade with Russia.

According to Ri, Office 39 has five central groups and systematically acquires foreign currency by sending laborers overseas as well as through gold mining and exports.

“It is an organization that manages the supreme leader’s coffers and the party’s funds to rule the country. It also leads trade activities to earn foreign currency,” Ri said. The office has enormous power as it is directly linked to the leadership and is independent of other government organs, he added.

Ri admitted that Office 39 has evaded U.N. sanctions by asking Chinese and Russian contacts to allow the use of their names for the opening of bank accounts for trade settlement.

The activities of Office 39 require the involvement of hundreds of thousands of people, including those in rural areas who produce items for export. Ri said the bureau is now headed by Chon Il Chun, first vice department director of the party’s Central Committee and a former classmate of Kim Jong Il, the current leader’s father.

A native of Wonsan on North Korea’s east coast, Ri was told to work in Pyongyang by the Central Committee in the mid-1980s. He operated a shipping company at Office 39’s Daehung group and later headed a trade control section in the group between 1998 and 2004.

The Daehung group earns revenue through farm exports and shipping operations, among other means. With exclusive rights to trade “matsutake” mushrooms and snow crabs, it was actively shipping those products to Japan before Tokyo imposed a total ban on trade with the North about 10 years ago.

The four other central groups are Kumgang, which dominates gold export activities, Daesong, involved in the shipment of processed products and intermediate trade overseas, Daesong Bank, in charge of the office’s banking operations, and a group dispatching workers to other countries.

Asked about the possibility that the foreign currency earned by North Korea is being used for its nuclear and missile development programs, Ri only said, “It is up to the supreme leader how to use the funds.”

North Korea receives 500,000 tons of crude oil each year through a pipeline from China, resulting in around 70,000 to 100,000 tons of gasoline and about 100,000 tons of diesel oil after refining, but the oil products are exclusively used by the North Korean army and are not good enough for cars that carry the elite, Ri said.

He also said crude oil purchased from other countries is refined by foreign companies based in China, leading to the importation into North Korea of an additional 50,000 to 100,000 tons of gasoline.

Full article here:

N. Korea procuring Russian fuel via Singapore dealers: defector

Tomotaro Inoue

Kyodo News

Benjamin Katzeff Silberstein

In late June, Reuters reported that the Chinese state-owned enterprise, China National Petroleum Corporation, had suspended its exports of fuel to North Korea, ostensibly because of concerns that North Korean buyers would not be able to pay:

China National Petroleum Corp has suspended sales of fuel to North Korea over concerns the state-owned oil company won’t get paid, as pressure mounts on Pyongyang to rein in its nuclear and missile programmes, three sources told Reuters.

It’s unclear how long the suspension will last. A prolonged cut would threaten critical supplies of fuel and force North Korea to find alternatives to its main supplier of diesel and gasoline, as scrutiny of China’s close commercial ties with its increasingly isolated neighbour intensifies.

CNPC and the Ministry of Commerce did not respond to requests for comment. North Korea’s embassy in Beijing declined to comment.

Chinese foreign ministry spokesman Lu Kang, asked about the sale suspension and whether the Chinese government put pressure on CNPC to make this decision, said: “I do not understand this situation you are talking about” and declined to elaborate.

A source with direct knowledge of the matter said CNPC decided to put fuel sales on hold “over the last month or two” and described it as a “commercial decision”.

“It’s no longer worth the risks,” said the source. Chinese and international banks are stepping up compliance checks on companies dealing with countries on the U.S. sanctions list, such as North Korea, he said.

The North Korean agents who mostly buy the diesel and gasoline have been unable recently to pay for the supplies — CNPC normally requires upfront payments, the source said.

Reuters was unable to determine if the agents have started facing credit problems with Chinese and international banks worried about sanctions compliance issues.

Two other sources briefed about CNPC’s decision confirmed the suspension of diesel sales, but did not know directly about the gasoline move. The three people declined to be named due to the sensitivity of the matter and are not authorised to speak to the media.

PRICES SURGE IN NORTH

Last year, China shipped just over 96,000 tonnes of gasoline and almost 45,000 tonnes of diesel worth a combined $64 million to North Korea, where it is used across the economy from fishermen and farmers to truckers and the military.[O/CHINA4]

Most of that was sold by CNPC, which has grown over the past two decades to dominate China’s energy trade with Pyongyang.

Data for May released on Friday showed China supplied significantly lower volumes of diesel and gasoline compared with a month earlier, although monthly tonnages can vary widely. June data will be released in late July.

Fuel prices in North Korea, meanwhile, have sharply risen in recent months, suggesting a tightening in supply.

A Reuters analysis of data collected by Daily NK showed the price of gasoline sold by private dealers in Pyongyang and the northern border cities of Sinuiju and Hyesan�had hit $1.46 per kg on June 21, up almost 50 percent from April 21. Until then, they had remained relatively stable since late last year.

Diesel prices averaged $1.20 per kg as of June 21, more than double over the same period, according to Daily NK,�a website run by defectors who collect prices via phone calls with North Korean fuel traders.

Full article:
Exclusive: China’s CNPC suspends fuel sales to North Korea as risks mount – sources
Chen Aizhu
Reuters
2017-06-28

This does not seem to imply that the CNPC altogether halted crude oil deliveries to North Korea, only deliveries of fuel purchased on a commercial basis. And usually, the first follow-up question to ask in reaction to news of China halting deliveries of supplies X, or the imports of good Y, is “for how long”?

These deliveries may of course have happened on other contracts, but NK Pro reports continued North Korean oil tanker presence in Chinese oil terminals in both May and June.

By Benjamin Katzeff Silberstein

Reuters reported today on the most recent figures on China-North Korean trade. They show that coal imports have declined, to the lowest level in three years, according to Reuters. It must be remembered that coal trade (in volume terms, not necessarily in USD-numbers) has climbed for several years in a row since 2010, so a relative decline does not mean catastrophically low levels. Also, of course, Chinese customs data should be taken with a huge grain of salt.

Reuters:

The world’s second-largest economy bought goods worth $99.3 million in April from North Korea, the lowest monthly tally since at least June 2014, according to Chinese customs data. Previous data was not available.

That compares with $114.6 million in March and $167.7 million a year earlier.

A fifth of the April total was iron ore imports, which hit 285,000 tonnes, their highest since August 2014. That was up 10 percent from a month earlier and 2-1/2 times higher than a year earlier.

[…]

Cho Bong-hyun, who heads research on North Korea’s economy at IBK Bank in Seoul, said China’s imports from North Korea were likely to continue to decline due to Pyongyang’s repeated missile tests and the suspension of coal shipments to China.

“This won’t be disastrous for North Korea, but it will obviously hurt North Korea because it tends to export goods to China worth around $3 billion per year,” he said.

The value of imports from North Korea has fallen month-on-month since December, the data showed.

CHINESE SALES DOWN AS WELL

China’s exports to North Korea eased to $288.2 million in April, down 12 percent from March. Exports for the first four months of the year were up 32 percent at $1 billion.

Diesel shipments to North Korea in April more than halved from March to 2,606 tonnes and gasoline sales dropped 6 percent to 13,496 tonnes. North Korea gets most of its oil needs from China.

Crude oil exports from China to North Korea have not been disclosed by customs for several years, but sources have put it at about 520,000 tonnes a year.

Cutting off oil to North Korea for an extended period would be a crippling measure that analysts have said they don’t expect China would take.

[…]

Data released later on Tuesday showed China did not take any North Korean coal in April for a second straight month, after Beijing’s ban of such imports following repeated missile tests by Pyongyang.

China imported 1.53 million tonnes of coal worth $72.3 million from North Korea in April 2016.

Full article:
China’s imports from North Korea sink as coal ban bites
Josephine Mason
Reuters
2017-03-23

Benjamin Katzeff Silberstein

Reports�New York Times:�

China released the first-quarter trade data just days after President Trump urged its leader,�Xi Jinping, to clamp down on trade with North Korea. The two leaders met at�Mr. Trump�s Mar-a-Lago resort�in Florida last week.

With signs indicating that North Korea could be planning a nuclear or missile test as early as Saturday, a United States Navy strike group led by the aircraft carrier Carl Vinson is steaming toward the Korean Peninsula in a show of force. But the Trump administration has indicated that economic pressure � particularly imposed by China, with which North Korea conducts almost 90 percent of its trade � is its preferred form of deterrence.

[…]

The data released on Thursday showed that China�s trade with North Korea grew 37.4 percent in the first quarter of this year from the period in 2016. Chinese exports surged 54.5 percent, and imports increased 18.4 percent, the General Administration of Customs said at a news conference in Beijing.

China buys iron ore, zinc and other minerals from North Korea, as well as growing amounts of seafood and garments manufactured in the North�s well-equipped textile factories. China reported that its imports of North Korean iron were up 270 percent in January and February compared with the period in 2016.

But imports of coal dropped 51.6 percent in the first three months of 2017 compared with the first quarter of last year, said Huang Songping, a spokesman for the customs agency. Coal has been the biggest hard-currency earner among North Korea�s fairly limited menu of exports.

[…]

After the United Nations sanctions were announced, some economists said it was still possible for Chinese businesses to import coal on an off-the-books basis, using transactions that would not be recorded by customs officials.

But since mid-February, Chinese coal traders have said that their business has virtually vanished. �It�s over,� said a coal trader who operates from Dandong, a city on China�s northeastern border that functions as the main center of business with North Korea. The trader spoke on the condition of anonymity because he feared reprisals from the city authorities.

Full article:

China Says Its Trade With North Korea Has Increased
Jane Perlez and Yufan Huang
2017-04-13

By Benjamin Katzeff Silberstein

It is still far too early to say anything of certainty or substance on Chinese compliance on the UN resolution cap of $400 million on coal imports from North Korea. A few figures have come out over the past week that are of interest on the issue. Altogether, the statistics suggest that two parallel processes are at play. While China certainly seems to have imposed the coal ban at least in part to comply with the UN-mandated $400 million import cap, it also continues to shift its consumption to domestic coal in the face of a drive to draw down on coal consumption altogether.

As UPI reports, one angle is that China instituted the ban to pre-emptively ensure compliance with the cap, knowing that deliveries early in 2017 would come close:

The official, who spoke to local news service Newsis on the condition of anonymity, said a Chinese decision announced Feb. 18 to suspend all North Korean coal imports included an accounting of “excess” North Korean coal that was delivered to China in late 2016, according to the report.

“China is of the mind to carry over the excess of December [imports] to this year’s upper limit,” the official said.

Resolution 2321 also bans North Korea sales of copper, nickel, silver, zinc and even statues.

China agreed to play a key role in the agreement. All exports of North Korea coal would not exceed $400 million per annum or 7.5 million tons yearly.

In 2017, China has so far imported about $126 million of coal in January and $100 million in February.

While the total number of coal imported appears to be well below the annual quota, when the December data is included China reaches the upper limit of coal restrictions, the South Korean official said.

Full article:
Report: China suspended North Korea coal imports to not exceed quota
Elizabeth Shim
2017-03-23
United Press International

Bloomberg reports the same figures, but give an added context. It is not only coal imports to China from North Korea that have fallen. Those from Australia and Mongolia have dropped, too:

China’s imports of North Korea anthracite coal in February fell 18.7 percent from a year ago to the lowest since January 2015, after a ban on imports as a result of the reclusive nation’s missile program. Imports of anthracite coal, a hard coal with a high energy content used in steel mills, dropped to 1.23 million tonnes in February from 1.45 million tonnes in January, data from the General Administration of Customs released on Thursday.

Waning shipments from North Korea follows Beijing’s decision in late February to ban coal imports entirely after Pyongyang tested an intermediate-range ballistic missile in a direct challenge to international efforts to stabilise the Korean peninsula.

The ban has also sent steel mills who use anthracite as a feed stock to find alternatives in the domestic market. Chinese anthracite prices gained more than 50 yuan($7.26) per tonne to around 780 yuan($113.26) in February, data provided by China Sublime Information Group showed. Imports from China’s top supplier Australia <COA-AUCN-IMP> in February plunged 29 percent from January to 5.16 million tonnes, the lowest since May. Still, Australian imports were 16.8 percent higher than a year ago, the data showed. The decline adds to speculation that China is trying to control coal imports to aid the country’s efforts to reduce overcapacity at domestic mines.

The head of China’s quality supervision agency vowed to crack down on low-quality coal import. Traders in southern Chinese ports also reported cases of cargoes delayed due to customs checks. Coal shipments from Mongolia <COA-MNCN-IMP> tumbled 37 percent from January to 1.97 million tonnes, though it more than doubled from the same period last year.

Full article:
China’s North Korean coal imports drop to two-year low on ban
Reuters
2017-03-23

In other words, it is not only imports of North Korean coal that have dropped. Imports from other countries have fallen too. The “import ban” and fall in imports, rather than being linked by direct causation, may stem from a combination of factors that were already at play. Any conclusions that “China is putting the squeeze on North Korea” or the like are still premature.

On a different note regarding China-North Korea-trade, NK Economy Watch editor Curtis Melvin notes on Radio Free Asia that the Nampo port oil terminal has been upgraded. Perhaps a sign of long-term expectations on the North Korean side of long-run trade ties with China…

By Benjamin Katzeff Silberstein

In yet another so-called “strong signal”, China’s commerce ministry said on Saturday it won’t be importing any more coal from North Korea for the rest of the year. Remember, that coal that was already basically supposed to not be imported after last year’s sanctions (save for that generating revenue for humanitarian purposes). And the imports of which was already supposed to be capped at a low monetary limit. And so on and so forth.

Of course, as a usual caveat this time could be different but whether or not this decision will be enforced, and how strictly, remains to be seen, to put it mildly. China has other concerns in its relationship with the Korean peninsula and North Korea than signalling its commitment to the international community. Moreover, as I have written before, there are many factors that impact Chinese imports of North Korean coal than central government decisions. Domestic demand is one, and has probably played a greater role than diplomatic considerations over the past few years.

Other than the missile launch, one could suspect this is also a signal against the killing of Kim Jong-nam, who lived under Chinese protection.

Yonhap:

China’s commerce ministry said Saturday it will suspend the import of North Korean coal, apparently in response to the latest provocations made by Pyongyang.

Beijing’s Ministry of Commerce said the decision, which comes into effect on Sunday, is in line with the United Nation’s sanction against North Korea. The suspension will be valid through Dec. 31, the ministry added.

“As coal takes up a significant portion of Pyongyang’s trade with China, the decision is anticipated to have a significant impact on North Korea,” an expert on China said.

Coal is estimated to take up 40 percent of North Korea’s exports to China.

China had banned imports of coal from North Korea in April last year, but had been making exceptions for those intended for household use, which led to criticism over the regulation’s effectiveness.

North Korea fired a new intermediate-range ballistic missile (IRBM) called the Pukguksong-2 on Sunday from an air base in the country’s northwestern province toward waters off its east coast.

Full article:
China suspends imports of N.Korean coal
Yonhap News
2017-02-18

(Update 02-19-2017): an analysis from Choson Exchange:

When the UN Security Council imposed the cap on coal trade, China was left with the question of how such a cap could be implemented. Would there be an auction system for quotas? Is it able to track forward contracts or does it only know belatedly the level of coal trade after import figures come out? This problem came to the fore last year when the Chinese were unable to meet their commitments regarding the import cap as they wrestled with these problems.

China has generally chosen to ensure adequate flexibility in the wording of UNSC sanctions to give it wiggle room, rather than outright violating those rulings. Allowing a coal cap to pass at the UNSC indicates their willingness to adhere to the ruling. In imposing a ban for 2017, China probably took into account rapidly rising coal prices and a probable rush by companies to frontload sales ahead of the cap to predict that the coal cap would be breached far earlier in the year. Rather than risk a violation of the coal cap limit, China is proactively clamping down on trade.

Domestic concerns might also play a part. China is restricting domestic production of coal. Between domestic producers and North Korean ones, China obviously prefers the former.

Full article:
Why China imposed a ban on North Korean coal imports
Choson Exchange blog
2017-02-19

Institute for Far Eastern Studies (IFES)

In North Korea, there are now three solar-powered ferries that sail the Taedong River: the Okryu 1, the Okryu 2, and the Okryu 3.

The North Korean government’s wire service, the Korean Central News Agency (KCNA), reported on November 4, 2016: “The ferries sail between Kim Il Sung Square and the Tower of the Juche Idea, guaranteeing that citizens can travel during the rush hour. . . . These solar powered-ferries provide ferry services both to workers and for guests from home and abroad in the form of tourist and chartered services.”

According to KCNA, the three ferries were built at Ryongnam Shipyard, each weigh 45 tons, have a maximum speed of 6 knots, and can take up to 50–60 passengers.

According to Yun Hyok, the captain of Okryu 1, “the ferry is powered by the energy of sun light . . . the driving system was created with the energy and skill of our engineers. The ship can run for around 8 hours when fully charged.”

Since the 1990s, North Korea has expressed determination to achieve energy independence, with Kim Jong Un pointing to resolving electricity difficulties as being a priority back in 2011. Subsequently, in 2013, a law was introduced to encourage research and the production of renewable energy, and at this year’s Seventh Party Congress it was announced that two hydropower stations had been opened. The importance of energy independence was also emphasized at the congress. It has also been confirmed that North Korea has been pursuing a long-term plan to raise the amount of energy produced from renewable sources to 5 million kW. In order to achieve this target, the plan envisages by 2044 that wind power will provide 15 percent of total energy demand.

This plan was discovered through internal materials on display at the Natural Energy Research Centre, formed in November 2014 as a result of an order issued by Kim Jong Un to develop energy resources that do not pollute the environment.

An overseas visitor to the Natural Energy Research Centre said that “the Centre in Pyongyang has a diagram of the 30-year plan to develop renewable energy with the title ‘The dream and ideal of Natural Energy Science development’. . . . The materials there also indicate plans to train specialists in the science of ‘natural energy’ development, and plans related to the development and trial sites for wind power, geothermal energy, and solar thermal energy.”

Such plans mean that North Korea plans to develop renewable energy, in addition to building hydroelectric power plants and/or using Chinese/Russian power to deal with energy shortages. In other words, they intend to attempt to reduce their consumption of fossil fuels and develop renewable energy. Since Kim Jong Un’s rise to power, a variety of measures have been put in place and investments made to broaden the use of renewable energy.

According to Yonhap:

A pro-North Korean newspaper based in Japan said Tuesday that easing electric power shortages will be a prerequisite for North Korea to implement its new five-year plan for economic growth.

Without spelling out details, North Korean leader Kim Jong-un laid out a five-year strategy aimed at boosting the country’s moribund economy at the party congress which concluded its four-day run on May 9.

Kim stressed that resolving the shortage of electric power is critical to carrying out his vision for economic growth, saying that nuclear power generation needs to increase.

The Chosun Sinbo hailed the North’s economic plan, saying that if realized, the move will pave the way to improve the livelihood of people and boost balanced growth.

“North Korea is likely to focus on developing the defense industry…and to make efforts to tweak its advanced technology on the military and space programs to be applied into the improvement of North Koreans’ livelihood,” the newspaper said.

At the party congress, the North’s leader made it clear that he will “permanently” defend the pursuit of his signature policy of developing nuclear weapons in tandem with boosting the country’s moribund economy, commonly known as the “byeongjin” policy.

The newspaper said that the communist country is expected to lay out measures to back up the “dual-track” policy at the party level.

“As Pyongyang raised the issue of power shortages, the country is likely to focus on uses of nuclear power,” said Chang Yong-seok, a researcher at Seoul National University’s Institute for Peace and Unification Studies.

Kim’s vision for economic growth came after the U.N. Security Council slapped its toughest sanctions to date on North Korea for its fourth nuclear test in January and long-range rocket launch the following month.

Analysts said that Kim’s five-year economic development vision is too short on detail, especially when compared with his grandfather Kim Il-sung’s blueprint for economic growth which was unveiled at the party congress held in October 1980.

The North’s founder unveiled the 10-point plan to build a socialist country by setting special targets in economic sectors.

Here is a link to the Choson Sinbo article.

Here is the text:

김정은조선의 진로／당 제7차대회 보고에서(2)

2. 사회주의위업의 완성을 위하여

인민들에게 유족하고 문명한 생활을／자강력에 기초한 부흥전략의 추진

조선로동당은 사회주의시책에 따라 모든 인민들에게 유족하고 문명한 생활을 보장하는것을 목표로 삼고있다.(조선중앙통신)
조선로동당은 사회주의시책에 따라 모든 인민들에게 유족하고 문명한 생활을 보장하는것을 목표로 삼고있다.(조선중앙통신)

경제강국의 표상

조선로동당 제7차대회는 온 사회의 김일성-김정일주의화의 목표와 사회주의강국건설강령을 제시하였다. 그리고 경제강국건설을 현시기 조선로동당과 국가가 《총력을 집중해야 할 기본전선》으로 규정하였다.

세기와 세기를 이어 벌어진 조국보위전, 사회주의수호전에서 승리를 거둔 조선의 진로는 《개혁》, 《개방》의 기발을 들고 경제를 추켜세운 나라들이 걷던 길과는 다르다. 조선의 적대국들은 제재, 봉쇄의 해제와 외국자본의 류입이 없이는 조선경제의 회생은 불가능하다며 병진로선의 포기를 강요하고있지만 흘러간 세월을 자랑차게 총화하고 고귀한 희생우에 이룩한 승리를 자부하는 당과 국가가 이제와서 부당한 압력에 굴복하여 타협과 종속의 길을 택하리라고 생각하는것은 어리석다.

당 제7차대회 보고는 조선이 건설하려고 하는 경제강국의 표상을 밝혔다. 그 하나는 《자립경제강국》이다. 다시말하여 국방건설과 경제건설, 인민생활에 필요한 물질적수단들을 자체로 생산보장하는 나라, 인민의 자주정신과 창조정신, 과학기술의 위력으로 전진하고 발전하는 나라다.

오늘 우리가 믿을것은 오직 자기 힘밖에 없다, 누구도 우리를 도와주려고 하지 않으며 우리 나라가 통일되고 강대해지며 잘살고 흥하는것을 바라지 않는다… 당대회 보고의 구절이다. 여기에는 현 국제정세와 세계경제질서에 대한 랭정한 분석과 판단이 깔려있다.

조선의 경제건설현장에 휘날리는것은 자강력제일주의의 기발이다. 당대회 보고는 자체의 힘과 기술, 자원에 의거하여 자기 력량을 강화하고 앞길을 개척해나간다는 주체적관점에서 모든 문제를 풀어나갈것을 강조하였다.

경제건설에서 사대와 외세의존을 배격하게 되는것은 조선의 지향이 일반적인 경제부흥이 아니라 사회주의경제강국의 건설에 있다는것과도 관련된다. 조선은 국내총생산이나 국민소득의 수치만을 높이는데 치우칠것이 아니라 사회주의시책에 따라 모든 인민들에게 유족하고 문명한 생활을 보장하는것을 목표로 삼고있다. 인민을 위한 인민의 나라, 사회주의경제강국의 건설은 자본주의방식으로 경제를 발전시켜온 나라들의 《선의》나 《원조》따위는 애당초 기대하지 말아야 할 전인미답의 길이다.

5개년전략의 수행

당 제7차대회는 2016년부터 2020년까지의 국가경제발전 5개년전략을 수행할데 대한 과업을 제시하였다.

사회주의계획경제가 실시되는 조선에서는 과거에 《5개년계획》, 《7개년계획》과 같은 전망계획이 수립, 실행되였는데 1990년대 이후는 국가경제가 난관에 처하여 전망계획을 세울 형편이 되지 않았다. 이번에 단년도가 아닌 5년간의 목표가 《국가경제발전전략》으로 정립되고 당대회 보고가 그 수행문제를 강조한것은 조선의 경제가 본연의 체계를 갖추어나가고있음을 보여주는 징표다.

국가경제발전5개년전략의 목표는 인민경제전반을 활성화하고 경제부문사이의 균형을 보장하여 나라의 경제를 지속적으로 발전시킬수 있는 토대를 마련하는것이다. 이 전략수행의 선결조건이 바로 전력문제의 해결이며 당대회 보고는 원자력발전의 추진 등 일련의 방도들에 대해서도 언급하였다.

조선경제를 둘러싼 환경은 사회주의시장이 존재하고 그를 전제로 하여 다년도에 걸친 경제발전계획이 수립, 실행되던 1980년대 이전시기와 다르다. 경제부흥의 출로는 외부가 아니라 내부에서 찾아야 한다. 당대회 보고는 과학기술을 사회발전의 추동력으로 삼을데 대하여 지적하고 과학자들이 남들이 걸은 길을 따라만 갈것이 아니라 민족적자존심을 폭발시켜 년대와 년대를 뛰여넘으며 비약할것을 호소하였다.

한편 당대회 보고는 무역구조의 개선, 경제개발구들에 대한 투자조건보장 등 대외경제관계를 확대발전시킬데 대해서도 강조하였다. 자강력제일주의는 《페쇄경제》와 무관하다. 세계 여러 나라들과의 교류, 협력의 추진은 조선의 경제부흥전략에서 변함없는 기둥의 하나다.

병진로선의 실효성

조선의 사회주의경제는 시대의 요구와 인민의 리익을 반영하여 부단히 변화발전하고있다. 지난 세기 마지막년대에 직면한 최악의 경제적시련을 극복한 다음부터 나라의 경제사령부인 내각의 역할이 더 강조되고 내각책임제, 내각중심제에 따르는 경제작전, 지휘의 질서가 세워졌다. 새 세기에 들어서서는 《우리식 경제관리방법》에 대한 탐구와 실천이 새 차원에서 이루어지고 최근년간은 사회주의기업책임관리제가 실시되여 은을 내고있다.

당중앙위원회 제7기 제1차 전원회의에서는 경제사령부의 책임자인 내각총리가 당중앙위원회 정치국 상무위원(5명)과 당중앙군사위원회 위원(11명)으로 선거되였다. 경제건설과 핵무력건설의 병진로선을 철저히 관철하여 그 실효성을 더욱 높이는 대책들이 당적차원에서 이루어져나갈것이다.

국방공업을 우선적으로 발전시키면서 경공업과 농업을 동시에 발전시키는 방도, 군사와 우주개발부문 등의 최첨단기술을 민생기술로 전용하여 인민생활향상으로 이어가는 방법론 등 조선의 국력에 걸맞는 경제정책이 구체화될것으로 보인다. 조선식 사회주의경제의 진면모는 앞으로 당대회에서 언급된 국가경제발전5개년전략이 수행되는 과정에 보다 뚜렷이 나타날것이다.

Read the full story here:
Easing power shortage critical for N.K.’s new economy plan: report
Yonhap
2016-5-17

The Paektusan Hero Youth Power Station No. 3

Pictured above (Yonhap): The Paektusan Hero Youth Power Station No. 3

Pictured Above (Google Earth): The dam is too recent to appear on Google Earth imagery as of publication, but here are the locations of Paektusan Hero Youth Power Stations Nos 1-3

According to KCNA (2016-5-21):

Paektusan Hero Youth Power Stations in Full Operation

The Paektusan Hero Youth Power stations, built in the Democratic People’s Republic of Korea as a symbol of youth power, are now running at full capacity to supply electricity to the area of Mt. Paektu.

Kim Hyong Dok, chairman of the Samjiyon County, Ryanggang Province, People’s Committee, told KCNA:

Now is the dry season, but the stations have generated much electricity for industrial establishments, public cultural establishments and residential quarters in the county.

They are greatly helpful to the county’s economic development and the improvement of its population’s livelihood.

Academician, Prof. and Dr. So Pyong Hwa of Hamhung University of Hydraulic Engineering, said:

Electricity from the stations is also supplied to its neighboring Pochon and Paekam counties and Hyesan City.

It is very gratifying to see the safe conditions of hydraulic structures and generators at the stations. And it is better to read the mentality of their employees resolved to contribute to the province’s economic development and the improvement of its inhabitants’ livelihood with increased electricity production.

According to KCNA (2016-3-31):

Dam Project of Paektusan Hero Youth Power Station No. 3 Completed

Members of the youth shock brigade of the DPRK finished the dam project of the Paektusan Hero Youth Power Station No. 3 on March 31.

Members of the shock brigade and other builders vied with each other to mount the dam to greet the historic moment of the completion of the dam project.
At 10 a.m. they made a report on the completion of the dam project to supreme leader Kim Jong Un, looking up to the sky above Pyongyang.

The project started on January 13.

The completion of the dam project in a matter of less than three months represents a heroic epic which could be created only by the heroes of the youth power who grew up under the care of the peerlessly great men of Mt Paektu and a miracle they worked as young people of heroic Korea by bringing about a great leap forward by doing 10 years’ work just in one year.

Kim Jong-un visited on April 23.

Yonhap reports that its hasty construction meant the dam was not properly constructed, and it is already leaking.

The Paektusan Hero Youth Power Stations 1 & 2 were formally known as the Paektusan Songun Youth Power Stations. The Paektusan Songun Power Station No. 2 was submitted to the UNFCCC program.

It is still too early to tell, but it appears that power from these three plants will be going to Samjiyon and maybe Hyesan.

Wonsan Army-People Power Station

Above (Google Earth): The wonsan Army-People Power Station Dam, canal, and two hydro power stations.

Above (Rodong Sinmun)

According to Rodong Sinmun (2016-5-2):

Large-scale Wonsan Army-People Power Station has been built in Kangwon Province.

The power station has provided a foundation for generating the electricity necessary for developing the economy and improving the living standard of the people and solving the issues of household water, industrial water and irrigation water in the province.

An inaugural ceremony of the power station took place on April 29.

Present at the ceremony were Pak Pong Ju, O Su Yong, officials concerned, builders and working people.

A message of thanks from the Central Committee of the Workers’ Party of Korea (WPK) was delivered.

The message appreciated the builders of the power station and supporters for building another monumental edifice representing the era of the Workers’ Party by dint of self-development and self-reliance as a laudable present to the Seventh Congress of the WPK.

Pak Jong Nam, chief secretary of the Kangwon Provincial Committee of the WPK, in a speech called upon the officials, working people and builders of the province to create a fresh Mallima speed in their worksites in the same spirit as was displayed in the construction of the power station.

At the end of the ceremony the participants went round the power station.

This project was submitted to the UNFCCC for consideration.