North Korean Economy Watch

Pictured above: (L) Kim Il-Sung and Muammar Gaddafi attend a Mass Games performance in Kim Il-Sung Stadium, (R) Muammar Gaddafi gives an award to Kim Il-Sung

Pictured above (Google Earth): DPRK-Libya Friendship Farm at Jangchon-dong (장천동: 38.987331°, 125.842014°).  More background here.

UPDATE 26 (2011-10-26): Yonhap offers more details on the North Koreans who remain in Libya:

North Korea has banned its citizens in Libya from returning home in an apparent attempt to prevent the popular uprisings in the Arab world from reaching the isolated regime, a source said Wednesday.

…

About 200 North Koreans have been left in limbo in the war-torn country as Pyongyang ordered them not to return home, the source familiar with the issue said.

The North Korean doctors, nurses and construction workers were sent to the African nation to earn hard currency for their impoverished communist country.

North Korea has also taken similar steps for its officials in Libya, Egypt and other countries, said the source.

UPDATE 5 (2011-8-30): According to the Korea Times:

North Korea has not yet officially recognized the rebel National Transitional Council (NTC) in Libya as the North African nation’s legitimate governing authority, said an official at the North Korean Embassy in Tripoli, Monday.

Asked whether Pyongyang has granted recognition to Libya’s NTC, the official was quoted as saying by Yonhap News Agency, “Not yet … (we’ll have to) wait and see.” The official, who wished to remain unidentified, was speaking to reporters at the North Korean Embassy in Tripoli.

The official also confirmed reports that some 200 North Koreans are currently working in Libya as doctors, nurses and construction workers. With regard to their safety, the official said some have returned home, although others have not been able to leave due to difficulties in transit.

“We will deal with them depending on the circumstances,” the official was quoted as saying.

The North Korean Embassy building has not been looted or damaged in the six-month-long conflict, the official added. In the past week, the South Korean Embassy building and ambassador’s residence in Tripoli were attacked by armed robbers, although no one was hurt in either incident.

Pyongyang has yet to send a new ambassador to Tripoli, after the previous envoy returned to North Korea upon completing his term, the official said.

Between the two Koreas, Pyongyang was the first to establish diplomatic relations with Tripoli in 1974.

“We hope for peace and stability (in Libya),” the official said, adding that future relations between the nations will depend on the North African nation’s stability.

Some 50 to 60 countries, including South Korea, have recognized the NTC since its formation by rebel forces against the regime of Moammar Gadhafi in February.

Read the full story here:
North Korea yet to recognize Libya’s rebel NTC
Korea Times
Philip Iglauer
2011-8-30

UPDATE 4 (2011-5-16): According to the Daily NK, NATO denies hitting the embassy:

“It has been alleged that NATO attacked the embassy; this is simply not true,” NATO said in a statement released on Friday, “While we are aware of media reports that there was damage to the North Korean embassy, we have no knowledge of possible collateral damage.”

The statement came following one released Thursday by the Libyan Ministry of Foreign Affairs, stating North Korean claims that it had incurred damage as a result of a “barbaric, indiscriminate air raid” by NATO.

It described how a bomb exploded in the vicinity of the embassy during the night of May 9th, releasing shrapnel that penetrated the ceiling of the building and broke car windows.

While NATO conceded that it was targeting a bunker in central Tripoli that night, it said that “the embassy was located some 500 meters from the target we struck.”

“Our strikes are precise and while the possibility of collateral damage will always exist, we go to great lengths to reduce such possibilities,” it went on.

Earlier, Libya national television also reported that the North Korean embassy in Tripoli had been damaged during an air raid.

UPDATE 3 (2011-5-12): Libya and China’s Xinhua are reporting that NATO damaged the DPRK embassy in Tripoli. KCNA has not said anything as of now.  According to Xinhua:

Libya’s state television said on Thursday a NATO air strike damaged the DPRK embassy in the capital Tripoli without giving more details.

Earlier reports indicated that the staff of the embassy has been unable to return home during the uprising.

Here is video footage of the embassy.

UPDATE 2 (2011-5-8): North Korea exported nuclear materials to Libya (Korea Herald and VOA):

The nuclear materials found in Libya in 2004 were highly likely to have been produced by North Korea, U.S.-funded broadcaster Voice of America said Saturday, citing an interview with a former senior official of the U.N. nuclear watchdog.

In the interview, Olli Heinonen, the former deputy director general of the International Atomic Energy Agency, said uranium hexafluoride, or UF6 ― used in uranium enrichment in Libya ― was very likely to have been made by the communist state.

Heinonen made the allegations based on North Korea’s purchase of parts to develop nuclear capabilities, information provided by Pakistan and other pieces of evidence.

To the question of whether there is any connection between the North and Syria with regard to nuclear technology developments, he said that that should be further investigated. He added that a nuclear reactor in Syria, which Israel destroyed, was very similar to North Korean reactors, indicating the possible connection between the two states.

The former deputy director general also said there was a good chance that North Korea has uranium enrichment facilities in areas other than the Yongbyon nuclear complex, stressing that IAEA inspectors should visit those facilities, provided they are allowed to do so.

Touching on the possibility of the North abandoning its nuclear programs, Heinonen said that the North could renounce them if the abandonment would lead to its economic development and security assurance.

The six-party talks aimed at denuclearizing the North have been suspended since 2008. China, the host of the multilateral talks, has been seeking to establish a mood for the dialogue while the South is apparently reluctant to see the resumption of the talks immediately as inter-Korean issues, including two deadly attacks last year, have yet to be addressed.

UPDATE 1 (2011-4-10): The DPRK has apparently ordered many of its citizens to remain in Libya and other Arab nations.  According to Yonhap:

North Korea has ordered its people in Libya not to return home, apparently out of fear that they will spread news of the anti-government uprisings in the African nation, a source said Sunday.

In a letter sent to the North Korean embassy in Libya, Pyongyang ordered its people to “follow the measures of the Libyan government” and not return home, said the source familiar with North Korea affairs.

The move sharply contrasts with other countries’ efforts to evacuate their people from strife-torn Libya and demonstrates the Pyongyang regime’s fear of possible revolts triggered by the African nation’s pro-democracy protests of the past few months, according to the source.

More than 200 North Koreans are believed to be living in Libya to earn foreign cash while working as doctors, nurses and construction workers.

Between the two Koreas, Pyongyang was first to establish diplomatic relations with Tripoli in 1974, followed by a cooperation pact signed by Libyan leader Moammar Gadhafi during his visit to the North in 1982.

North Koreans in Middle Eastern nations such as Saudi Arabia, Kuwait and the United Arab Emirates also appear unlikely to be able to return home while anti-government protests continue in the region.

Sources say the North Korean government in recent months has tightened control over the flow of information by strictly monitoring the use of computers, mobile phones, USB memory sticks and other IT equipment.

ORIGINAL POST (2011-3-29): Andrei Lankov writes in the Korea Times about the effects NATO military intervention in Libya might have on the DPRK’s medium-term international relations strategies. According to his article:

Kim Jong-il right now may feel very happy about his wisdom which he demonstrated by stubbornly rejecting denuclearization proposals. Colonel Gadhafi in 2003 did exactly what Kim said he would never do ― Gadhafi agreed to swap his nuclear weapons program for better relations with the West and economic rewards. As we see, it did not help the eccentric strongman. Once his subjects rose in rebellion, the West intervened and chose its military might to assist the rebels.

In private conversations, North Korean officials often say: “Had Sadam had nukes he would still be in his palace right now.” From now on, they probably will add: “And had Gadhafi not surrendered his nukes, nobody would have intervened when he was exterminating the rebels.”

But what is the likely overall impact of such thinking on the North Korean actions? If anything, it increases the already high probability of another nuclear test and/or missile launch. The preparations for such undertakings have been underway for some time. Now, North Korean leaders might believe that this is a good time to show off their steadily growing nuclear and missile capabilities. This is a way to send a message to the Obama administration, and the message will read like this: “Mr. President, we are dangerous and its better not to get involved with us even if we do something which is not to your or anybody’s liking”.

At the same time, it’s now less likely that North Korea will attempt a major provocation aimed at South Korea. Until recently, one could be almost certain that in the near future (in April or May, perhaps), the North would repeat what they did with frigate Cheonan and Yeonpyeong Island. Now they will probably think twice before making another attack.

While the attacks on Cheonan and Yeonpyeong Island are usually described as “provocations” this is essentially a misnomer. “Provocation” describes an act whose goal is to elicit an irrational and/or excessive reaction from the target of the incident. It was clearly not the case with the Cheonan or Yeonpyeong attack. The North attacked under the assumption that the South would not react in a meaningful way and would be incapable of inflicting any serious damage on assets valuable to the North Korean leadership (the lives of rank-and-file soldiers do not belong to this category).

North Koreans are aware that currently the South Korean public and government are in an unusually bellicose mood. They therefore expect a massive retaliation to follow in the event of another attack. Until recently the North Korean leadership probably anticipated that the South Korean retaliation would be limited, since neither the South nor its major ally, the United States, would do anything which might lead to an escalation of an exchange of fire on the border to a full scale war.

Therefore from Pyongyang’s point of view, another military operation made perfect sense. It would be a good way to demonstrate that North Korea is not going to be quiet when ignored. They wanted to show that for Seoul and Washington, it’s essentially cheaper to pay some protection money to Pyongyang (in the shape of aid and concessions) than to deal with the ever-present possibility of a North Korean attack and related sense of tensions and instability.

However, the recent developments in Libya might have changed the equation ― for a while, at least. Libya shows that under certain circumstances the U.S. and its major allies may indeed choose to launch a large-scale military operation. The assumption that Seoul and Washington will avoid escalation seems still to be true, but Pyongyang may have started to have grave doubts about this.

So it is quite possible that the coming spring will be quieter than the present author (and many of his colleagues) have until recently expected. This does not mean that North Korea has turned into a pacifist state, but from the vantage point of Pyongyang it makes sense to postpone their operations against the South and wait for the dust to settle. And of course, by being quiet for a while they can save resources which will be needed to better prepare the next missile launch and next nuclear test.

Though Lankov refers to North Korean officials in “private conversations,” the North Korean foreign ministry made essentially the same claim in a public statement on March 22 (KCNA):

The present Libyan crisis teaches the international community a serious lesson.

It was fully exposed before the world that “Libya’s nuclear dismantlement” much touted by the U.S. in the past turned out to be a mode of aggression whereby the latter coaxed the former with such sweet words as “guarantee of security” and “improvement of relations” to disarm itself and then swallowed it up by force.

It proved once again the truth of history that peace can be preserved only when one builds up one’s own strength as long as high-handed and arbitrary practices go on in the world.

The DPRK was quite just when it took the path of Songun and the military capacity for self-defence built up in this course serves as a very valuable deterrent for averting a war and defending peace and stability on the Korean Peninsula.

Since then, they have published 16 stories about Libya: Demonstration Staged in Russia against US Military Operation against Libya, US Involvement in Libya Protested, AU Chairperson Rejects Military Intervention in Libya, Indiscriminate Use of Arms against Libya Assailed, Algeria Opposes Military Intervention in Libya, Military Operation in Libya Condemned in Russia , Venezuelan President Censures West’s Attack on Libya, Iranian Foreign Ministry Assails West’s Military Operation against Libya, Ugandan President Blasts West for Double Standards,  India Regrets Air Strikes on Libya, AU Demands Stop to Attack on Libya , Russian PM Brands Military Operation against Libya as Invasion, Russia Assails Military Attack on Libya , China Concerned about Libyan Crisis, Russia Opposes Military Attack on Libya , Foreign Forces’ Armed Intervention in Libya Assailed in Cuba.

In fact, there are hundreds of KCNA stories about Libya.  Check them out here (STALIN Search Engine).

The Daily NK, however, reminds us of one the the most important aspects of the DPRK-Libya relationship:

Libyan leader Colonel Muammar Qadhafi has been using weapons purchased from North Korea in his faltering attempt to suppress anti-government protests.

As revealed by South Korean television broadcaster SBS on the 28th, boxes containing rockets and clearly bearing the name North Korea were found in Ras Lanuf following the retreat of pro-Qadhafi forces under NATO air strikes.

The boxes were disguised as parts for bulldozers.

Elsewhere, “64 Machine gun” was found written in Korean on an anti-aircraft heavy machine gun. A similar model of machine gun has been seen many times in images released by the North Korean authorities.

Check out the article for pictures.

UPDATE: Writing at the Wall Street Journal Blog, Evan Ramstad gets a quote from Bruce Bechtol:

“It just goes to show how deeply involved in the arms market (in the Middle East and Africa) North Korea is,” said Bruce Bechtol, a former intelligence officer with the Defense Intelligence Agency in the U.S. who is now a professor at San Angelo State University.

“Their WMD [weapons of mass destruction] proliferation gets lots of attention, but folks often forget that they also engage in a plethora of conventional arms sales,” he said.

Would it be a stretch to assume that The DPRK and Libya have been trading oil for weapons?

Previous posts about the DPRK and Libya here.

This was picked up by RFA.

Andrei Lankov writes in the Korea Times:

In 2010, the volume of trade between these two countries was merely $110 million. As international trade goes, this volume is tiny. By comparison, in the same year North Korea’s trade with China was around $3.4 billion, some 30 times larger than its trade with Russia.

The reason for this inactivity is quite simple: Russian companies have no interest in dealing with North Korea. In the Soviet era, trade flourished because it was subsidized due to geopolitical concerns of Moscow. Currently, when it comes to pure economic considerations, North Korea has almost nothing to offer the new Russian economy.

North Korea has only two resources that can be sold on the international market. First, it has deposits of minerals (coal, iron ore). Second, it has a relatively large quantity of cheap labor ― or to put things in a less cynically capitalist way, there are millions of North Koreans willing to work for $10 a month.

But Russian companies are decisively uninterested in North Korean minerals. These mines may be attractive to resource-hungry China, but not to Russia, which has the riches of Siberia at its disposal. The chronic political instability in which North Korea is immersed is another reason which lessens Russian interest in North Korean minerals.

Cheap labor is more attractive, and indeed Russia has continuously used North Korean labor since 1967 but not in the North itself. Some Chinese companies began to outsource to North Korea, and built small factories there, in order to take advantage of the obscenely low local wages. This approach is not very attractive to Russia, since it is not a major player in producing winter parkas, wool hoods, or running shoes. Russian companies prefer to use North Korean workers inside Russia itself.

These workers are sent to Russia by the North Korean authorities and can be described as indentured labor. Their families are hostages who can be punished if a worker does something improper and the workers are also expected to ‘donate’ a significant part of their wages to the state. Despite these harsh conditions, one should not forget that these jobs are among the best paid regular jobs in the country. North Koreans compete for opportunities to become indentured laborers in Russia.

That said, the scale of these ventures is rather limited, as is the demand for cheap labor in the Russian Far East (the only part of Russia where the use of North Korean laborers really makes practical sense).

Aside from this, North Korea has something else to offer – its geographical location. This country blocks all land routes to the prosperous South. Russia has much interest in the South Korean market, especially when it comes to the sale of natural resources. Impeding this is the existence of North Korea, and the continued strained relations between the two Korean states, making sales of Russian commodities rather difficult.

So it is not incidental that the two most important potential projects are a railway and a gas pipeline. Both projects can hardly be described as “economic cooperation” between North Korea and Russia, since neither has much to do with the North Korean economy itself. North Korea, in these cases, is present merely as a space to be traversed. It would be no different if it were a dessert or jungle. Russia is willing to pay North Korea for facilitating Russia’s economic link with the South, and that is all.

So it is not surprising that an agreement on the pipeline construction was signed after the Russian-North Korean summit. This project is indeed acceptable to the North, since it will mean easy money for transit, it is favorable to Russia, and it will be good for the general situation since it will bind Russia, North and South Korea closer.

Yet, a word of caution is necessary. In spite of all official statements, we should not expect large-scale construction work to begin in the near future. The political risks remain huge, so it is likely that Russian companies will not rush headlong into the project. The recent agreement should rather be seen as a declaration of intent. In all probability, the trans-Korean pipeline and trans-Korean railway will be built eventually. But the completion of these important initiatives will probably take many, many years.

Read the full story here:
Russia-N. Korea Trade
Korea Times
Andrei Lankov
2011-9-25

UPDATE: On a flight today I was able to translate most of this map.  Interestingly, it shows the incomplete Kumho Light Water Reactor (금호원자력발전소: in yellow on the right) but none of the other nuclear facilities.

ORIGINAL POST: A recent visitor to the DPRK took this picture of a map of the North Korean electricity grid:

See larger version here

This is one of the best maps of the North Korean electricity grid that I have seen (abstract as it is). This will be immensely helpful for my own efforts to map the North Korean electricity grid on Google Earth:

Institute for Far Eastern Studies (IFES)
2011-9-7

An article entitled, “Joint energy project on the agenda” was featured in the KCNA on August 31, which elaborated on the agreement reached between the DPRK and Russia on August 24 for the construction of a gas pipeline. The joint project is also inclusive of South Korea.

The KCNA said in the article, “The three countries have explored various options in transporting gas and have reached a consensus on building a gas pipeline running through North Korea will be the most cost-effective option.”

It also stressed this project will be beneficial for all three parties. In addition, Russia was commended as the major world power in natural gas and oil reserves and production and stressed Russia is turning its attention to expanding the energy sector.

When the Sakhalin – Komsomolsk – Khabarovsk pipeline that began construction in 2009 is completed, it will be equipped to provide enough gas not only domestically but across the Pacific-Asia region, producing a capacity of 30 billion cubic meters of gas per year.

The news also covered the specific plans of the Russian government to expand its energy supply; to boost the exports of oil and gas from three to thirty percent and five to twenty-five percent respectively, until the year 2020.

Therefore, the inter-Korean gas pipeline construction between the DPRK and Russia will be a vital project for Russia.

On August 30, the ROK’s Grand National Party (GNP) chairman Hong Jun-pyo declared, “The trilateral negotiation will be expected to take place sometime in November on the inter-Korean gas pipeline project.”

Hong also stated, “The ROK-Russia and the DPRK-Russia bilateral agreements have already been reached. Once the three parties meet to sign the tripartite agreement, the project will soon take off.” He also added, “President Lee Myung-bak has quietly pushed forward with the gas pipeline project since he first took office and it will be his major accomplishment.”

After the bilateral summit was held between the two leaders of Russia and the DPRK on August 24, the two nations have consented to establish a special commission to work cooperatively on the gas transit project running through the territories of North Korea to South Korea.

Institute for Far Eastern Studies (IFES)
2011-8-31

According to the KCNA, North Korea amended its environmental protection law on August 18, adding development of energy and environmental certification system into the revised act.

The environmental protection law is comprised of four sections and 50 articles, in which articles 38, 39, and 40 were added recently. These contain laws related to the development and usage of renewable energy resources, recycling technology, and implementation of environmental certification system. In addition, articles 44 and 48 were also supplemented in Section 4. They include plans for setting up environmental economic indicators.

According to the KCNA, “Based on this law, each agencies, companies and organizations are reducing fossil energy consumption to protect the environment and promote continuous economic growth. In its place, renewable energy resources such as solar, wind and geothermal energy are currently being explored.”

North Korea has registered eight hydroelectric plants with the UNFCCC (United Nations Framework Convention on Climate Change) to receive carbon credits which can be sold to earn hard currency. Receiving accreditation toward the CDM (Clean Development Mechanism) will allow developing countries to earn tradable carbon credits for emissions reductions from clean-energy projects.

Currently, Ryesonggang Hydropower Plant No. 3, 4, 5 and Wonsangunmin Hydropower Plant No. 1 reached the validation phase while the other four plants are at the prior consideration phase.

On July 26, the KCNA explained the environmental protection law was revised “to beautify our homeland, protect the health and wellbeing of our people, and provide culturally hygienic environment with favorable working conditions.” Accordingly, the environmental protection law passed in 1999 is now ineffective.

In recent years, North Korea seems to be paying keen attention to environmental protection issues. From May 16 to June 10, ten senior officials from the DPRK Ministry of Land and Environmental Protection and National Science and Technology Commission were invited to a training course at the Asian Institute of Technology in Thailand.

The program was implemented by the United Nations Economicand Social Commission for Asiaand the Pacific (ESCAP) as a part of the project “Promoting Regional and Economic Cooperation in Northeast Asia.” The four-week training program provided highly specialized training on integrated watershed management and reforestation.

Additional Information: You can read more about the DPRK’s CDM efforts here, here, and here.

UPDATE 12 (2011-8-31): The North Koreans have made a short documentary of Kim Jong-il’s trip to Russia.  I have uploaded it to YouTube in three parts: Part 1, Part 2, Part 3.  The North Koreans published footage of Kim’s trip through China on the evening news (2011-8-30: Part 1, part 2, part 3) and in a separate documentary (2011-9-8: Part 1, part 2, part 3).

UPDATE 11 (2011-8-29): When Kim Jong-il returned to Pyongyang his trip was hailed as a success. A banquet was held for him and he attended a performance of the State Merited Chorus.  According to Yonhap:

North Korean leader Kim Jong-il attended a banquet held to congratulate him on his “successful” recent visits to Russia and China, the North’s state media said Monday.

The banquet was hosted by the Central Military Commission of the ruling Workers’ Party and the National Defense Commission, according to a brief dispatch by the Korean Central News Agency (KCNA), monitored in Seoul. It did not mention where or when the event took place.

KCNA has a little more on the banquet here and the chorus here.

Afterwards, Kim Jong-il returned to his never-ending work for the people. Just as he did following his previous trip to China, Kim visited the construction site of the Huichon Power Station.

UPDATE 10 (2011-8-27): According to Yonhap, Kim Jong-il’s train has crossed back into the DPRK.  Given the information provided, it appears that Kim entered the DPRK via the railroad crossing at Manpo (Manpho, 만포).  See the bridge in Google Maps here. According to Yonhap:

North Korean leader Kim Jong-il returned home by train Saturday, wrapping up a week-long trip to Russia and China, during which he discussed the resumption of stalled six-party talks on his country’s nuclear ambitions.

Kim’s special train was seen crossing into North Korea via the Chinese border city of Jian around 5 p.m. local time (6 p.m. Korean time). The train had left the northeastern Chinese city of Daqing on Friday evening and made a stop in the city of Tonghua on Saturday morning.

According to KCNA, Kim Jong-un and Kim Kyong-hui were there to welcome him.  Kim Jong-un played the same role on Kim’s previous trip to China in May.

UPDATE 9 (2011-8-26): While Kim travels in Russia and China, Yonhap reports a KCNA announcement that the DPRK and Russia signed a protocol calling for economic cooperation between the two countries.  According to the article:

A Russian economic delegation, led by Minister of Regional Development Viktor Basargin, was in North Korea to sign “a protocol of the 5th Meeting of the DPRK (North Korea)-Russia Intergovernmental Committee for Cooperation in Trade, Economy, Science and Technology,” the North’s Korean Central News Agency (KCNA) said.

Trade Minister Ri Ryong-nam inked the protocol on behalf of North Korea, said the KCNA report, monitored in Seoul.

The report did not give any details of the protocol.

Also on Friday, the North’s premier, Choe Yong-rim, met with the Russian economic delegation at the Mansudae Assembly Hall in Pyongyang, the KCNA said in a separate report.

UPDATE 8 (2011-8-26): Xinhua reports on Kim’s activities in China. According to the article:

Top leader of the Democratic People’s Republic of Korea (DPRK) Kim Jong Il visited northeast China’s Heilongjiang Province on Friday at the company of Chinese State Councilor Dai Bingguo.

…

During his stay in Heilongjiang, Kim visited the cities of Qiqihar and Daqing. In Qiqihar, Kim toured Qier Machine Tool Group Co., a large state-owned enterprise, and Mengniu Dairy, a leading Chinese dairy producer. In Daqing, he toured an urban planning exhibition hall and a residential district.

“I’ve seen new changes every time I came here,” he said. He wished that China would smoothly realize the goals set in its 12th Five-year Plan under the leadership of the CPC.

KCNA has a rather long (erm…detailed) update on Kim’s visit to China. Here is the report for August 25th:

He passed through the Inner Mongolian Autonomous Region of China on August 25.

He arrived in Manzhouli of the region, the border railway station, that afternoon.

When the train pulled in the railway station, he was warmly greeted by Wang Jiarui, Sheng Guangzu, Hu Chunhua, secretary of the Inner Mongolian Autonomous Regional Party Committee, Fu Taizeng, secretary general of the autonomous regional party committee, Luo Zhihu, secretary of the Hulun Buir City Party Committee, the mayor of Hulun Buir City, the secretary of the Manzhouli City Party Committee and other central and regional senior officials of China.

He exchanged cordial greetings with the senior officials present to greet him and had a talk with them.

Wang Jiarui said he was specially dispatched to conduct Kim Jong Il who is passing through Northeast China in the whole period of his visit upon the authorization of the collective leadership of China including Hu Jintao. He paid highest tribute to Kim Jong Il for having made a great contribution to boosting the friendship among countries and accomplishing the human cause of independence through his energetic external activities.

Kim Jong Il thanked Wang Jiarui and other senior central and local officials and people for their warm reception.

He, conducted by senior party and government officials of the autonomous region, toured Hailar District, Hulun Buir City of the region.

Commanding a bird’s-eye view of the night scenery, he got familiar with the history and culture of the region and the achievements made by its people in construction.

The Inner Mongolian Autonomous Regional Committee of the CPC gave a grand banquet in honor of Kim Jong Il visiting the region.

When he appeared in the banquet hall, women of the Mongolian tribe of the autonomous region presented him with a blue silk towel and liquor according to the customs peculiar to the nation, warmly welcoming him.

Hu Chunhua said that today they welcomed Kim Jong Il to the vast steppe where President Kim Il Sung was accorded enthusiastic welcome several times long ago, thereby seeing the desire of the party, the government and the people of the autonomous region come true at last.

Hu Chunhua noted that the traditional Sino-DPRK friendship will remain ever-green like the vast steppe along with history, expressing firm belief that the friendly Korean people would make fresh success in the efforts to improve the standard of people’s living and build a prosperous and powerful nation.

A specially prepared art performance was given in honor of Kim Jong Il.

The performers clearly reflected the boundless respect and reverence of the government and the people of the region for Kim Jong Il visiting China again for the development of the Sino-DPRK friendship.

Kim Jong Il conveyed a floral basket to the performers in congratulation of their successful performance and had a photo taken with them.

He was presented with a gift by Hu Chunhua on behalf of the party committee of the autonomous region.

He expressed thanks for the warm reception and cordial hospitality accorded him by the party, government and people of the Inner Mongolian Autonomous Region. He hoped the people of the region would achieve a fresh victory in their struggle for the prosperity and development of the country under the leadership of the CPC.

Here is the KCNA report for August 26th:

Kim Jong Il passed through Heilongjiang Province of China on August 26.

He arrived in Qiqihar City, Heilongjiang Province that morning.

When the train pulled in Qiqihar Railway Station, he was warmly greeted by Ji Bingxuan, secretary of the Heilongjiang Provincial Party Committee, Wang Xiankui, governor of Heilongjiang Province, the secretary of the Qiqihar City Party Committee, the mayor of Qiqihar City and other senior party and government officials of the province and the city.

He exchanged warm greetings with the senior officials present to greet him and had a talk with them.

Ji Bingxuan said it is great honor and pride to welcome again to their place Kim Jong Il on a long foreign tour for friendship among countries and warmly welcomed him on behalf of the party, the government and the people of Heilongjiang Province.

Kim Jong Il visited the Qiqihar Machine Tool Group Co. No. 2 that day.

After being briefed on its history by a senior official of the group, he went round several production processes to acquaint himself with its production, technological development and management in detail.

Then he visited the Qiqihar Branch Company of the Mengniu Dairy.

He went round the general control room, milk tank, packing shop and the products on display and wished the company greater progress in its work for the improvement of the standard of people’s diet and welfare.

Kim Jong Il also visited Daqing City that day.

He visited the urban planning exhibition hall in Daqing City and was briefed on the urban construction and long-term plan. Then he went round the housing construction district, a large bridge, Lake Liming Bridge now under construction and other places in the province.

The provincial party committee gave a banquet that evening in honor of Kim Jong Il visiting the province.

He was present at the banquet on invitation.

Ji Bingxuan said that the historic visit paid by Kim Jong Il to Heilongjiang Province again after the lapse of the three months is a striking demonstration of the Sino-DPRK friendship growing stronger day by day, adding that the provincial party, government and people would join the Korean people in playing a greater role in inheriting and developing the Sino-DPRK friendship generation after generation.

A special art performance was given in welcome of Kim Jong Il.

The performers successfully represented the excitement and joy of the Chinese people at welcoming again Kim Jong Il to meaningful Northeast China.

Kim Jong Il conveyed a floral basket to the artistes in congratulation of their successful performance.

He was presented with a gift by the provincial party and people’s government that day in welcome of him visiting the province.

He expressed thanks for the warm reception and cordial hospitality accorded to him by the party, government and people of Heilongjiang Province. He hoped the people of the province would achieve a fresh victory in their struggle for the prosperity and development of the country under the leadership of the CPC.

Here is the KCNA report for August 27th:

He arrived in Tonghua City, Jilin Province that morning.

When the train pulled in Tonghua Railway Station, he was warmly greeted by Sun Zhengcai, secretary of the Jilin Provincial Party Committee, Wang Rulin, governor of Jilin Province, Liu Baowei, secretary of the Tonghua City Party Committee, Tian Yulin, mayor of Tonghua City, and other senior party and government officials of the province and the city.

He exchanged warm greetings with the officials present there to receive him and visited the Tonghua Wine Co. Ltd., conducted by them.

He recollected with deep emotion the noble footprints left by President Kim Il Sung who was absorbed in thinking and made inquiry for the sake of the country and its people only when visiting the company nearly half a century ago.

He went round various places including the wine depot, its exhibition hall to learn in detail about the history of the company and its production system, storage of products and its taste. He wished the company greater progress in its work for the well-being of the people.

The party and government of the province hosted a grand banquet in honor of Kim Jong Il visiting the province.

He was present there on invitation.

Sun Zhengcai said that it was particular privilege and honor for his province to receive Kim Jong Il, the great leader of the Korean people, three times in a little more than one year. He offered the highest regard and warm welcome to Kim Jong Il on behalf of the party, government and people of the province.

Noting that all the Chinese people including the people of the province are rejoiced as over their own over the successes made by the Korean people recently in their efforts to significantly commemorate the centenary of birth of Kim Il Sung, Sun Zhengcai expressed expectation and belief that the Korean people would surely win a shining victory in the drive for building a prosperous and powerful socialist nation under the leadership of the Workers’ Party of Korea headed by Kim Jong Il.

Sun noted that the party, government and people of the province would join the Korean people in playing a bigger role in inheriting and developing the Sino-DPRK friendship generation after generation.

An art performance was given in welcome of Kim Jong Il.

The performance replete with the warm feelings of the DPRK-China friendship was acclaimed by the audience.

He was presented with a gift by the provincial party and people’s government that day in welcome of his visit to the province.

He expressed thanks for the warm reception and cordial hospitality accorded to him by the party, government and people of Jilin Province. He wished them a fresh success in their efforts for the prosperity of the country and the well-being of its people under the leadership of the CPC.

He wrapped up his 8 000 km odd-long trip to the Far East and the Siberian regions of Russia and Northeast China and left for the homeland that day.

Before his departure, he exchanged warm farewell greetings with central leading officials including Wang Jiarui and Sheng Guangzu who conducted him with sincerity in the whole period of his visit and leading officials of the party and government of the province and the city including Sun Zhengcai and Wang Rulin.

When the train started from the border station, central and local leading officials of China warmly sent him off, waving their hands for a long while.

Passing through several cities and regions of China, he acquainted himself with construction projects, ideas and feelings, politics, economy, history, culture, etc. of the Chinese people more deeply and conducted unremitting and energetic external activities, making another great contribution to the development of the DPRK-China friendship.

UPDATE 7 (2011-8-25/26): According to Voice of America, Kim Jong-il has left Russia and is returning to the DPRK via China.  His train crossed the Russia-China border at Zabaikalsk (Забайкальск, See in Google Maps here). Yonhap reports that on the Chinese side of the border Kim’s Train was greeted in Manzhouli by senior Chinese Communist Party envoy Wang Jiarui and other officials. Kim attended a banquet and arts performance before heading to nearby Hulunbeier (See in Google Maps here).

UPDATE 6 (2011-8-24): Kim Jong-il meets with Medvedev at Sosnovyy Bor east of Ulan-Ude (Сосновый бор, See in Google Maps here). The topics discussed are linked below:

According to the Los Angeles Times:

Medvedev ordered a commission to evaluate the parameters of laying a gas pipe through North Korea, according to the president’s statement posted on the Kremlin website. The pipe would stretch for more than 1,100 km, 700 of which would run through North Korea and would pump 10 billion cubic meters of gas annually.

The two leaders also discussed a plan for Russia to extend power lines into North Korea to sell electricity from facilities like the Bureya hydroelectric plant. Before arriving to meet Medvedev, Kim visited the Bureya plant, where he swam in a pool filled with water from Lake Baikal. Afterward, the North Korean strongman was treated to such local cuisine as meat dumplings and fish prepared over an open fire, press reports said.

Accoridng to UPI:

North Korea is willing to return to the six-party talks and to consider a moratorium on nuclear testing, Russian President Dmitry Medvedev said Wednesday.

Medvedev and North Korean leader Kim Jong Il met in Sosnovy Bor, a garrison town in the Russian Republic of Buryatia in South Siberia, RIA Novosti reported.

Natalia Timakova, a spokeswoman for Medvedev, said Kim was prepared to resume nuclear talks without any preconditions. The talks were suspended two years ago, and Russia and China have said they are prepared to return to the table immediately while the United States, Japan and South Korea want North Korea to show good faith first.

Kim also agreed to allow Gazprom, the state-owned Russian natural gas company, to build a pipeline to South Korea through his country. The two leaders also discussed North Korea’s outstanding debt to the former Soviet Union and possible food aid from Russia.

RIA Novosti said some reports estimate the project could bring about $100 million a year in much-needed hard currency to Pyongyang.

“We’ve ordered our government bodies to establish a special commission … to outline the details of bilateral cooperation on gas transit through the territory of North Korea and the joining of South Korea to the project,” Medvedev was quoted as saying.

The Russian leader said technical work on the pipeline would start soon.

South Korea is one of the largest buyers of natural gas, with imports of liquefied natural gas from Russia alone totaling 1.5 million tons last year, South Korea’s Yonhap news agency reported. The report said North Korea reacted favorably to the project during the visit of Gazprom officials.

Accoridng to Bloomberg:

North Korea owes Russia $11 billion of debt that dates back to the Soviet period and the two countries have resumed talks to restructure the Asian state’s liabilities, Deputy Finance Minister Sergei Storchak said.

Russia hasn’t lent money to North Korea since the collapse of the Soviet Union in 1991 because the communist state hasn’t settled its debt, Storchak told reporters at a military base near Ulan-Ude, a Siberian city close to the border with Mongolia. North Korea also has yet to recognize Russia as the successor to the Soviet Union, he said.

Russian President Dmitry Medvedev agreed on a joint approach to debt restructuring with North Korean leader Kim Jong Il at their meeting near Ulan-Ude today, said a Kremlin official, who declined to be identified in line with government policy. Russia and North Korea restarted talks on the issue a month and a half ago after a long pause, the official said.

The resumption of negotiations is seen as a breakthrough by the Russian delegation attending today’s meeting, according to the official.

According to RIA Novosti, the DPRK is interested in renting farm land in Eastern Siberia.

According to UPI, the Russians and the DPRK plan to increase naval cooperation.

According to the Choson Ilbo, the North Koreans might have been interested in acquiring Russian aircraft.

Andrei Lankov is skeptical any of the economic projects will become operational.

Aidan Foster-Carter believes the pipeline will be built.

UPDATE 5 (2011-8-22): Kim arrives in Ulan-Ude (Улан-Удэ), and tours Lake Baikal and an aircraft factory. See the Ulan-Ude train station in Google Maps here. See Lake Baikal on Google Maps here. See the Ulan-Ude Aviation Plant in Google Maps here. According to a video later released by the DPRK, Kim Jong-il also visited the Lenin-head statue at the seat Ulan Ude’s government (See in Google Maps here) and the “Mega Titan” super market (мега титан, See in Google Maps here).  Though the visit to the aircraft factory is never mentioned in KCTV coverage of the visit, the Choson Ilbo reports that the DPRK’s air force chief, Gen. Ri Pyong-chol (리병철), was also on the trip–leading to speculation that the DPRK air force was shopping for new aircraft.

According to the AP:

Kim took a two-hour Baikal tour on a yacht guarded by two North Korean boats, the Inform Polis Online website reported quoting eye-witness accounts. The water in Baikal is ice-cold even in summertime, so Kim had to take a swim onshore — in a pool filled with Baikal water. The speaker of Buryatia’s legislature joined Kim in the swim, the news website reported.

On the shore, the North Korean leader was treated to traditional Buryat food including meat dumplings and Baikal fish prepared over an open fire.

Later on Tuesday, Kim went back to Ulan-Ude to visit a major aircraft factory, which among other things produces Sukhoi attack planes, the ITAR-Tass news agency reported from the plant.

…

The North Korean leader’s visit is shrouded in mystery. A few people managed to take photos of Kim at his previous stop on Sunday, but heavy police cordons kept the media and onlookers in Ulan-Ude away from the train station and the adjacent square.

Anna Ogorodnik, a photographer from Ulan-Ude, told the Associated Press by phone that nearby streets were full of riot police. The station square looked clean and deserted after authorities had tugged away cars and local buses.

The windows of the station building overlooking the tracks were plastered with sheets of paper and station employees had been ordered to stay indoors, Ogorodnik said.

The photographer said she had been detained after trying to take pictures. She was released after she had presented her journalist ID.

The station square remains cordoned off and Kim’s train is still at the station, Ogorodnik said.

It is Kim’s first visit to his country’s Cold War ally in nine years.

Russian military officials arrived in the North Korean capital on Monday for a five-day visit. The Russian Defense Ministry said the talks will focus on the renewal of military cooperation between the countries, possible joint exercises “of a humanitarian nature” and an exchange of friendly visits by Russian and North Korean ships, ITAR-Tass reported from Pyongyang.

UPDATE 4 (2011-8-23): Writing in the Asia Times, Sunny Lee offers some political context of the trip as well as offering an estimated sum the DPRK can expect to earn if it agrees to the pipeline deal:

Cash-strapped North Korea, committed to staging a great national display of prosperity next year to mark the 100th anniversary of Kim Il-sung’s birthday, is likely to welcome any such deal. If realized, it could expect to earn more than US$500 million a year in handling charges over the gas pipeline alone. Russia is also interested in linking the Trans-Siberian Railways to both Koreas, with the aim of reviving the Far Eastern region’s economy.

The Daily NK puts that number signficantly lower:

For North Korea, the gas pipeline could provide a stable income of approximately $100 million-$150 million. Compared to the Kaesong Industrial Complex, which requires more than 47,000 workers and earns North Korea just $50 million, it is a very attractive figure.

UPDATE 3 (2011-8-21): Kim Jong-il arrives in Russia’s Amur region (Bureya, Бурея) on Sunday August 21 and tours Bureiskaya Power Station. See the Bureya Train Station in Google Maps here. See the Bureiskaya Power Station in Google Maps here.  According to the AFP:

North Korea’s reclusive leader Kim Jong Il and his wife received a red carpet welcome Sunday in Russia’s Amur region where they toured a giant power station ahead of talks with President Dmitry Medvedev.

It was the second day of Kim’s week-long visit to the Russian Far East and Siberia, a rare trip out of his country battling isolation and hunger.

Earlier on Sunday his special armoured train arrived at the small Bureya station in the Amur region and smiling Russian women dressed in red national costumes offered the high-profile guest a loaf of bread and salt, in accordance with Russian tradition.

The 69-year-old leader looked serious and slightly tired as flag-waving locals greeted him at the station.

Sporting sunglasses and his trademark khaki-coloured military-style suit, Kim broke off a piece of bread as the Kremlin’s regional envoy Viktor Ishayev and a throng of local officials looked on.

“He is rather simple, seems to be a genial man,” gushed a young Russian woman in the national dress, speaking later in televised remarks.

After the short welcome ceremony Kim got into an armoured Mercedes, which he brought with him on the train, to visit a nearby hydro-power station.

He appeared to take a keen interest in the 2,000 megawatt-strong Bureiskaya power station as Ishayev and the local governor gave him a tour of the plant.

South Korea’s Yonhap news agency, citing pictures taken at the plant, said 47-year-old Kim Ok — a former secretary known as Kim’s fourth wife — was accompanying the leader on the journey.

At the power station — the largest in Russia’s Far East — Kim was treated to a spectacular show of the water being discharged into the river, a local law enforcement official said.

He watched the water release from the safety of a white tent pitched at the station, next to a table with snacks, pies and a watermelon, and was also shown a film about the plant translated into Korean, the official said.

“Inexhaustible is the strength of the Russian people who occupied Bureya nature,” the official Korean Central News Agency quoted Kim as saying in the visitor’s book.

A Russian official familiar with the matter told AFP Kim had planned to visit the station earlier in the summer when he had been expected to hold a bilateral summit with Medvedev in or near Vladivostok.

A Kremlin official was quoted as saying at that time that Kim had cancelled due to media leaks about the visit.

Yelena Vishnyakova, a spokeswoman for state-run RusHydro which operates the power plant, said her company was not currently holding any talks with North Korea about any possible construction of power stations.

While Kim toured the power station, his entourage cleaned and polished his armoured train parked at Bureya, a tiny economically depressed town near the city of Blagoveshchensk on Russia’s eastern fringes.

After returning from the station he continued his journey along the famed Trans-Siberian railway.

According to the Washington Post, the Russia has proposed selling surplus electricity produced by this power station to both North and South Korea.

The New York Times also covered the trip to the power station.

UPDATE 2 (2011-8-20): The Washington Post offers some political and economic context of the trip:

Kim’s trip, Pyongyang said, came at the invitation of Medvedev, whose government in recent weeks has pushed North Korea to cooperate on plans to connect a railway and a gas pipeline that would run from Russia through the divided Korean Peninsula.

North Korea has remained largely a no-go zone for massive foreign projects, with outside economic investment allowed only in special development zones. But if North Korea goes along with the gas pipeline project — in which Russian exporter Gazprom will annually send 10 billion cubic meters of gas to South Korea for three decades — it stands to collect handling fees. It would also allow the North a measure of influence in Seoul’s economy.

…

Some North Korea analysts say that Kim has grown wary of depending so heavily on China, particularly as North Korea prepares for the 100th anniversary next year of the birth of founder Kim Il Sung. The North has promised to build a strong and prosperous economy to mark the occasion, but such a display is largely at the mercy of foreign aid.

“North Korea has had no choice but to deepen its dependence on China, so they now need some counterbalance,” said Yun Duk-min, a professor at Seoul’s Institute of Foreign Affairs and National Security. “Kim Jong Il uses such tactics. This is using Russia to check Chinese influence.”

UPDATE 1 (2011-8-20): KCNA takes the unusual step of confirming KJI is out of the country (rather than waiting until he has returned). According to KCNA:

Kim Jong Il Passes through Khasan Railway Station, Russia
Pyongyang, August 20 (KCNA) — Kim Jong Il, general secretary of the Workers’ Party of Korea and chairman of the National Defence Commission of the DPRK, passed through Khasan, the border railway station of Russia this morning on his way to pay an unofficial visit to Siberia and the Far East Region of the Russian Federation at the invitation of Dmitri Anatoliyevich Medvedev, president of the Russian Federation.

He was greeted at Khasan Railway Station by Viktor Ishayev, presidential envoy to the Far East Region of the Russian Federation, who came to Khasan to conduct him.

He was also greeted by Sergey Darikin, governor of Maritime Territory, Valery Sukhinin, Russian ambassador to the DPRK, Irina Skorobogatova, deputy governor of Maritime Territory, and other senior officials of Moscow, maritime territory, city and district.

When the train pulled in the station, the senior officials got on the train and offered greetings to him.

Medvedev, who has paid deep attention to the Russia-DPRK friendship, dispatched them to greet Kim Jong Il, Viktor Ishayev and other senior officials said, warmly welcoming him to Russia upon the authorization of its President.

Kim Jong Il’s current visit to Russia will mark a historic occasion in putting the Russia-DPRK friendly and cooperative relations onto a fresher and higher stage, they noted.

He said he was very pleased to see for himself the achievements made by the diligent and resourceful Russian people through his current visit, thanking the senior officials of Moscow and local areas and people for warmly greeting him.

He was presented with a souvenir by Sergey Darikin on behalf of the Maritime Territorial Government and people.

After a while, he left for his destination amid send-off by senior officials of Russia.

Prior to it, he left the country to pay an unofficial visit to Siberia and the Far East Region of the Russian Federation.

He is accompanied by Kim Yong Chun, member of the Political Bureau of the WPK Central Committee and minister of the People’s Armed Forces, Kang Sok Ju, member of the Political Bureau of the WPK Central Committee and vice-premier of the Cabinet, Jang Song Thaek, alternate member of the Political Bureau of the WPK Central Committee and vice-chairman of the NDC, Kim Yang Gon, Pak To Chun and Thae Jong Su, alternate members of the Political Bureau and secretaries of the WPK Central Committee, Ju Kyu Chang, alternate member of the Political Bureau and department director of the WPK Central Committee, Pak Pong Ju, first vice department director of the WPK Central Committee, O Su Yong, chief secretary of the North Hamgyong Provincial Committee of the WPK, Kim Kye Gwan, first vice-minister of Foreign Affairs, Kim Yong Jae, DPRK ambassador to Russia, and Sim Kuk Ryong, consul general of the DPRK Consulate General in Nakhodka of Russia.

His visit to Russia, another event in achieving world peace and security and the human cause of independence, will mark a historic occasion in boosting the DPRK-Russia friendship given steady continuity generation after generation and putting strong impetus to the drive of all the servicepersons and people to build a thriving socialist nation.

ORIGINAL POST (2011-8-20): Kim Jong-il has made a “surprise” trip to Russia.  According to the AFP:

North Korea’s reclusive leader Kim Jong-Il on Saturday arrived in his armoured train in Russia and plans to meet President Dmitry Medvedev, the Kremlin said.

During the visit, his first since 2002, Kim is expected to meet with the Kremlin chief for talks in Siberia to discuss North Korea’s nuclear programme, bilateral economic projects and a worsening food crisis in the isolated state.

“A meeting between Russian President Dmitry Medvedev and Kim Jong-ll will be the main event of the visit,” the Kremlin said in a statement, saying Kim would also visit the Far Eastern and Siberian regions.

The Kremlin did not release further details but a local official in the Far East told AFP Kim’s train crossed the border earlier in the day.

…

Kim, who is known to dislike air travel due to security concerns, arrived in Khasan district after crossing the Tumangan river at 12 pm local time (0100 GMT), Naryzhny said.

He said he was unaware of the North Korean leader’s programme in Russia, adding he did not leave his train upon arrival.

____________

Additional Information:

1. Here is a post on recent DPRK-Russia exchanges leading up to the visit.

2. Here and here are recent stories on DPRK laborers in Russia.

Institute for Far Eastern Studies (IFES)
2011-8-24

Kim Jong Il’s visit to Moscow on August 20 is sparking interest for the future of economic cooperation between the two countries.

According to the KCNA, Russian President Dmitry Medvedev expressed interest to increase trilateral cooperation between the ROK-DPRK-Russia in the gas, energy, and railroad sectors. In the message sent from Medvedev to mark the 66th anniversary of independence from Japanese colonial rule, “plans to expand cooperation with the DPRK and the ROK in gas, energy, and railroad industry” were emphasized.

The cooperation projects are evaluated to have “great economic and political significance contributing to the stability in Northeast Asia and denuclearization of the Korean peninsula.”

In July 4, the KCNA reported that the delegates from the Russian energy giant Gazprom headed by Chairman Alekhsandr Ananenkov visited Pyongyang to discuss energy cooperation, although details of the visit was not elaborated. Ananenkov was reported to have met with North Korean officials in gas and oil industriesto discuss bilateral cooperation in these areas.

Russia has also expressed interest in linking gas pipelines to export natural gas to South Korea via inter-Korean railroad system.

A spokesperson of the foreign ministry of the DPRK reported on the recent visit from the vice-foreign minister and chief representative of Russia on Six-Party Talks, Aleksei Borodavkin, this past March. In the statement, the Russian government expressed concerns for improving inter-Korean relations and stressed prospects of the tripartite economic cooperation projects with North and South Korea including the construction of railways, gas pipeline, and a transmission line linking the three countries. The DPRK also expressed support for the upcoming economic cooperation projects.

In result, the main agenda in the bilateral economic cooperation between Russia and North Korea entails railway, gas pipeline, and transmission line construction.

President Lee Myung-bak has met with the Russian president Medvedev in September 2008 in Moscow. At the summit, the two presidents reached an agreement to pursue projects to export Russian PNG or pipeline natural gas to South Korea through a pipeline via North Korea from 2015.

Immediately following the summit, South Korea’s Korea Gas Corporation (KOGAS) and Russia’s Gazprom signed a memorandum of understanding (MOU) to jointly study the possibilities of constructing a long-distance pipeline running from Vladivostok. Under the contract, Russia will send at least 7.5 million tons of natural gas annually for a period of 30 years through a pipeline to South Korea via North Korea.

This joint study between ROK-Russia is expected to serve as a momentum in bringing diverse economic cooperation between North and South Korea as well.

While it is still premature to judge the long-term outlook for such trilateral economic cooperation, its effects are anticipated to contribute to stability and peace in the Northeast Asian region.

Additional Information: here is a summary of the recent Kim Jong-il — Medvedev summit.

UPDATE 6 (2011-7-11): It looks like none of the DPRK power stations have been approved by the UNFCC for the CDM program.  A reader notes:

[I] just searched through the entire CDM database with the category numbers for these projects, and as far as I can see none of these has got beyond validation phase['s] comments phase, and judging by some of the comments – “It is evident from the PDD [Project Design Document] that the values are consistent and it is definitely forged and cooked up values to show a non CDM project as a CDM project” – being one of the more polite, that I’d be amazed if they make it beyond that. [It] looks like the DPRK hasn’t got its environmental and managerial audit systems quite up to date yet.

UPDATE 5 (2011-7-11): I just checked the UNFCC web page, and it appears that in addition to the hydro power plants mentioned below, the North Koreans also submitted the “Energy Efficiency Improvement Project in Pyongyang Textile Factory” [sic] for carbon offsets on May 23, 2011. According to the UNFCC web page, the project is in the portfolio of the Carbon-Trade Division, GBCIO, Ministry of Foreign Trade.

UPDATE 4 (2011-7-11): DPRK begins construction of Ryesonggang Power Stations 3 and 4

Pictured above (Google Earth): Ryesonggang Youth Power Stations 1, 2, and 6 (례성강청년발전소).

Back in March of this year, the DPRK registered eight potential power plants with the UNFCC which it intended to construct to obtain carbon offset credits.  These eight hydro-power plants are:

Hamhung Hydropower Plant No.1
Hamhung 20MW Hydropower Plant No. 2
Kumya Hydropower Plant
Paekdusan Songun Youth 14MW Hydropower Project No.2
Ryesonggang Hydropower Project No. 3
Ryesonggang Hydropower Project No. 4
Ryesonggang Hydropower Project No. 5
Wonsangunmin 20MW Hydropower Project No. 1

On June 25th the DPRK evening news featured footage of the construction of the Ryesonggang Youth Power Station No. 3 (례성강청년3호발전소).  I have uploaded the footage to YouTube and you can see it here.

On June 28th the DPRK evening news featured footage of the construction of the Ryesonggang Youth Power Station No. 4 (례성강청년4호발전소).  I have uploaded the footage to YouTube and you can see it here.

I have not had the time to pinpoint the exact locations of these power stations using Google Earth.  Since the imagery is older, it will take some time to match up the mountain contours.  However, we have a general idea where they are located: between the Ryesonggang Power Stations 2 and 6.  These are mapped out in the image at the top of this post.  The satellite imagery is of Thosan (토산군) and Kumchon (금천군) counties.

Since I have a job, am in graduate school, am a landlord, and running this web page, I have not had time to follow up with the UNFCC to see if they have approved these projects for the Clean Development Mechanism (CDM). If there is an enterprising journalist or reader who cares to find out the answer, please let me know.

UPDATE 3 (3/23/2011): According to the UNFCC web page (select Democratic People’s Republic of Korea in the “Host Party” box), these are the eight power stations that have been submitted for consideration:

Hamhung Hydropower Plant No.1
Hamhung 20MW Hydropower Plant No. 2
Kumya Hydropower Plant
Paekdusan Songun Youth 14MW Hydropower Project No.2
Ryesonggang Hydropower Project No. 3
Ryesonggang Hydropower Project No. 4
Ryesonggang Hydropower Project No. 5
Wonsangunmin 20MW Hydropower Project No. 1

The UNFCC web page does not mention the locations, size, or power generation capacity for most of the dams, but I am sure that information will trickle out over time. With the exception of the Kumya Power Station (See satellite image below), none of these facilities are visible on Google Earth–but related facilities are: the Paektusan Power Station 1 (See satellite image below) and Ryesonggang Power Station 1, 2, 6 (See satellite image below).  The Hamhung Power Stations are probably in or near Hamhung, and the Wonsangumin project is probably near Wonsan.

And according to an email from the UNFCC:

This list contains all the projects which have already started and for which a notification of CDM prior consideration has been submitted. This notification is necessary to prove that the incentive of the CDM was a decisive factor for taking up the project when a project has started before a project design document (PDD) has been published for global stakeholder consultation or a new methodology in connection with the project has been submitted. However, kindly note that these projects have not yet entered the CDM project cycle as lined out in the CDM rules, requirements and procedures, and to submission for registration has yet been made.

Further details on the CDM project cycle are available here: http://cdm.unfccc.int/Projects/diagram.html

More information will be added here as time passes.

UPDATE 2 (3/11/2011): The DPRK has apparently registered eight power plants with the UNFCC.  According to Reuters:

North Korea has registered eight hydroelectric plants with the United Nations, and if approved, could allow the world’s most reclusive state to sell carbon offsets to earn precious hard currency.

These hydropower projects were registered with the United Nations Framework Convention on Climate Change (UNFCCC) for prior consideration in getting carbon credits, some of which have a capacity of 20 megawatts, the UNFCCC website showed.

Prior consideration is the first step for accreditation toward the U.N.’s Clean Development Mechanism that allows developing countries to earn tradeable carbon credits for emissions from clean-energy projects.

Bernhard Seliger, a messenger for North Korean officials on these projects, said the United Nations uploaded the information on Thursday after he submitted related forms on behalf of the North Korean government’s carbon trade division in late February.

“I have no idea when the U.N. makes a decision… North Korea has to finish the power plants, which up to now are only half-finished dams,” Seliger, Hanns Seidel Foundation’s representative in South Korea, told Reuters via email.

Analysts questioned the demand for carbon credits from North Korea, concerned the money might be siphoned off to nuclear arms or other military projects.

The UNFCC web page is not stranger friendly.

UPDATE 1 (3/8/2011): According to the Guardian:

North Korea hopes to earn much-needed hard currency by selling UN-backed carbon offsets from a series of hydro-power projects, as the country faces sanctions over its nuclear weapons programme.

If approved and registered by the UN, these would be the first projects for North Korea under a scheme called the Clean Development Mechanism (CDM). This allows developing countries to earn tradeable carbon credits for emissions reductions from clean-energy projects.

Some analysts questioned the demand for carbon credits from North Korea, with fears the money might be siphoned off to nuclear arms or other military projects.

The government has asked the Hanns Seidel Foundation of Germany, which focuses on humanitarian issues, to act as a go-between by working with UN-approved verification agency TUV Nord.

According to Bernhard Seliger, the foundation’s representative in South Korea, North Korea is initially looking at trying to get approval for three hydro power plants of 7-8 megawatts (MW).

Seliger visited the three hydro-plant construction sites in the north-east corner of the country in January.

In a statement, TUV Nord confirmed the foundation had engaged their services.

“In this respect, TUV Nord intends to verify hydropower dams in North Korea once pre-registered with United Nations framework conventions on climate change [UNFCCC] via the Beijing branch of its Chinese subsidiary TUV Nord Guangzhou,” it said.

If registered, the plants could yield millions of euros over several years.

Beijing-based lawyer Tom Luckock, who specialises in projects that curb greenhouse gas emissions, estimated that an 8 MW hydro plant could yield about 23,000 UN offsets a year.

The offsets, called Certified Emissions Reductions (CERs), are generated from registered CDM projects, such as wind farms, that are rewarded for reducing greenhouse gas emissions.

The offsets currently trade at nearly €12 (£10) each and are bought by governments in rich nations that need to meet UN emissions reduction targets.

Europe is the biggest buyer, with large polluting firms allowed to buy the offsets to meet a portion of their emissions reduction targets under the EU’s emissions trading scheme.

“Finding ways to secure foreign currency is the priority for North Korea, which is linked to everything from food to raw material imports to boost reduced productivity,” said Cho Myung-chul, a senior researcher at the Korea Institute for International Economic Policy.

…

Seliger said North Korea, which signed the UN’s Kyoto Protocol climate pact in 2005, was also interested in biomass power generation projects under the CDM.

The UN-approved national agency that assesses and approves CDM projects in North Korea was not available for comment.

Questions remained on demand for North Korean CERs.

“Even if they open up, who in the world wants to pay for North Korea that is blamed for its nuclear weapons programme?” said Choi Soo-young, a senior researcher at the Korea Institute for National Unification.

Cho said the UN needed to prevent outside cash going into its nuclear development activities, while Luckock, of global law firm Norton Rose, said: “Their limited access to hard currency has to be a concern for buyers – the damages clauses will carry limited weight without some security there.”

Another challenge is that North Korea would have to make public its energy consumption and generation data and disclose information on the amount of energy linked to the hydro project.

“Annual inspection, constant measurement and energy flow posting on the [UNFCC] website – all these things are new for North Korea,” Seliger said.

According to the AFP:

“We are talking about eight power plants, with the smallest size about 7.5 megawatts. These are not big projects but small or medium-sized projects,” Bernhard Seliger told AFP.

None has yet been completed, he said.

“I saw some (construction) sites in South Hamkyong province but that’s not all. There are other plants in other regions,” Seliger said, adding that some of the projects are led by the UN Development Programme.

The Hanns Seidel Foundation has been working since 2003 to build the North’s development capacity, and in 2008 organised a seminar on carbon trading for Pyongyang officials at their request.

The tradeable credits, called Certified Emissions Reductions, are awarded for approved clean-energy projects such as hydropower plants or wind farms.

Big polluters elsewhere in the world can buy them as part of their efforts to cut emissions.

Seliger said his foundation is helping the North to prepare for the auditing process required to join the UN carbon credit trading system known as the Clean Development Mechanism.

“One good thing about this project is that it is very transparent, involving monitoring and auditing on an annual basis… I think it is very good for North Korea to participate in such an international regime,” said Seliger.

An official at a South Korean state agency, the Korea Energy Management Corp, said registration would take at least a year or two and it was unclear how much the North would be able to earn if approved.

The official, who declined to be identified, said a typical eight-megawatt hydropower plant could yield about 19,500 carbon credits each year, each of which was currently traded at 12 euros in global markets.

This would amount to around $327,000 a year.

But some buyers may shun the communist state, given its history of nuclear and missile development which has led to international sanctions.

“Government buyers will certainly shy away from dealing with the North,” said Koo Jung-Han, a researcher at the Korea Institute of Finance.

“But private companies have few reasons not to buy credits from the North as long as it can offer a competitively low price. However, the big question is whether the North will be able to build the plants without outside financiers.”

Koo said that countries hoping to buy carbon credits from upcoming overseas projects often encourage investment in the ventures by their own finance companies.

“But what kind of financial companies will take a plunge in projects in such a volatile, politically risky country like North Korea?”

The North suffers persistent power shortages even in the showpiece capital Pyongyang.

Many rural areas receive power only during key agricultural seasons, and must rely for the rest of the year on alternative fuels, according to a recent policy paper published by the Nautilus Institute think-tank.

Here are the web pages for the Hanns Seidel Foundation and the UNFCCC Clean Development Mechanism (CDM) Program.

I am not sure which hydro power stations the DPRK is planning to submit to the UN, but many have been been highlighted in North Korean “media” in recent years:

Kumya River Dam
A dam is being constructed in Kumya County, South Hamgyong Province, to provide electrical power. Kim Jong-il last visited in August 4, 2010. It is just one of several dams under currently under construction in the DPRK.

Here is a satellite image of the Kumya dam’s construction (Google Earth: 11/25/2008,  39.574232°, 127.104736°)

This new reservoir will flood the locations of three villages (리): Ryongnam-ri (룡남리), Ryongsang-ri (룡상리), and Ryongchon-ri (룡천리).

Estimates of the reservoir size are made by me, but it is fairly obvious where the North Korean engineers expect the reservoir to flood because they have already relocated the villages from their former locations in the flood zone.

Kumjingang River Power Stations
Beginning in 2000, the DPRK has constructed three power stations on the Kumjin River (금진강) in  South Hamgyong Province.  The first was the Kumjingang Power Station (금진강발전소).  The second was the  Kumjingang Hungbong Youth Power Station (금진강흥봉청년발전소).  The third was the Kumjingang Kuchang Youth Power Station (금진강구창청년발전소).  All three are pictured below on Google Earth:

It does not appear that these projects have resulted in dislocated villages.

Wonsan Youth Power Stations
Below is a satellite image of the Wonsan Youth Power Stations No’s. 1-4 (원산청년발전소).   These projects required the construction of both the Kuryong Reservoir (구룡저수지) and an appx 8.5 mile (13.69km) tunnel to link the hydro power stations with their power source.  The inaugural ceremony for these facilities was on January 10, 2009.

The construction of the Kuryong Reservoir resulted in the dislocation of three villages: Kuryong-ri (구룡리), Konja-ri (건자리), and Haerang-ri (해랑리).

Orangchon Power Station No. 1
Kim Jong-il offered guidance at the Orangchon Power Station (어랑천1호발전소) in February 2007.  This facility will probably not be submitted to the UN for scrutiny because it lies just outside the security perimeter of what human rights groups assert is Kwan-li-so No. 16.

Anbyon Youth Power Stations No’s 1 & 2
The Anbyon Power Stations (안변청년1-2호발전소, 38.954400°, 127.538912°) are powered by waters from the Imnam Reservoir (임남저수지) via an underground tunnel nearly 45km in length.  Much more here.

The Imnam Reservoir flooded Chondo County’s capital city as well as appx 14 villages. The South Korean government was so worried about the Imnam Reservoir being used as a weapon that they built a dam downstream to prevent flooding should the DPRK release a large volume of water (38.209539°, 127.848760°).

Ryesonggang Youth Power Stations 1-6
Some of the Ryesonggang Youth Power Stations (례성강청년1-6호발전소, 38.367696°, 126.781096°) appear to be under construction in North Hwanghae Province.  The North Korean “media” has only broadcast images of the Ryesonggang Power Stations 1, 2, and 6 (all completed), so I presume that power stations 3, 4, and 5 are too new to show up on available Google Earth Satellite imagery. Below I post images of the distance between power stations 1 and 6 as well as close-ups of both facilities.

Power Station No. 1 was completed in 2007 and most recently received media attention in South Korea in September 2009 when the DPRK released a massive amount of water from its dam (Hwanggang Dam), causing floods in South Korea that killed six people. An estimated 40,000,000 short tons (36,000,000 t) of water was dumped during the flood, causing the water level at the border of Gyeonggi-do to leap from 7.5 feet (2.3 m) to 15.1 feet (4.6 m).

Power Station No. 2 (38.324008°, 126.673366°) has been completed, but it is too new to appear on Google Earth satellite imagery.  I have drawn it on Google Earth below:

Construction of Power Station No. 2 resulted in the dislocation of approximately 27 houses, but I have not been able to determine if any other villages were relocated due to construction of the other facilities.

Paektusan Songun Youth Power Stations
The North Korean media has also done a lot of advertising for the Paektusan Songun Youth Power Stations (백두산선군청년발전소) in Paekam County, Ryanggang Province (41.716931°, 128.786163°).

These dams have resulted in the dislocation of  two small communities as well as the severing of the old railway lines that connected Unhung, Kilju and Paekam with Musan.  Maybe the railway lines have been moved to accommodate the new dams, but it is also unclear if these line were in use to begin with.

Pukchang Ryongsan Power Station
Up until recently I believed the Pukchang Ryongsan Power Station (북창룡산발전소, 39.596238°, 126.266478°) was a large-scale river-straightening project, but according to recent KCTV footage (which I posted to Youtube here) it is in fact a hydro power station.  Work on this project began sometime around the spring 2002 (as best I can tell).

Huichon Youth Power Stations
The Huichon Youth Power Stations No. 1 & 2 have received the most attention in the North Korean media.  I recently located them and will post something soon.

Since the DPRK will likely be subjecting several of these (or other) power plants to international scrutiny, I look forward to seeing that data published.  KCNA is short on details and the disclosed information would facilitate more accurate assessments of the DPRK’s domestic hydro-power generating capacities.

A reader writes in with the following comments:

I would like to share some comments on the potential CDM projects in north Korea as i have been working on this field for many years now.

Concerning existing hydropower plants:
To be eligible to a CDM project, one of the first criteria is the additionality of the project. You have to prove (the rules are very stricts) that the project would not have been launched without the consideration of the revenues from the reselling of the CERs.
So the Dams that have already been buit are not eligible.

Concerning hydropower plants that are being implemented:
The first step of a CDM project is to notify to the UNFCCC secretariat and to Designated National Authority (in this case the Secretariat of the National Coordinating Committee of Democratic People’s Republic of Korea for Environment) that you are seeking to establish your project as a CDM project.
Up to now, no such notification has been received by UNFCCC so it would be quiet difficult for projects being implemented to ask for the CDM status (i mean nearly impossible).

Some facts concerning future hydropower projects:
From the day you send the notification that you are seeking the CDM status to the day you are actually given the status, it takes in average 2 to 3 years (they would have to build the plants during this period)
Then it can be at least another year before you receive the CERs.
The price of 12 euro for a CER is for secondary market. The price for primary CER (directly sold by the producer) would be much less than 8 euro.
The figure of 20 000 CERs/year is completely unpredictable for the moment, here is a simplification of the calculation:
One CER is equal to one tonne of CO2 equivalent that would be avoided by producing clean electricity. For example when you produce 1 MW electricity from coal, the process releases X tonnes of CO2 in the atmosphere but when you produce 1 MW from a hydropower plant, you do not release CO2.
In order to calculate what the CDM project would be able to claim, we would have to know the CO2 emission factor of the North Korean grid and then multiply it by the amount of MWh produced by the CDM project.
If most of the electricity produced these days in North Korea already comes from hydropower plants, then the national emission factor will be low and the CDM project will not avoid a lot of CO2 emission (and so not earn a lot of €)
Without the capacity of the future project and the national emission factor, it is impossible to estimate the amount of CERs the project could generate.

The CDM status seems quiet unrealistic to obtain for North Korean projects but other international agreements are discussed these days and their outcome may be more adapted.

ORIGINAL POST (2011-1-31): According to Radio Free Asia:

Nuclear-armed but cash-starved North Korea has expressed interest in joining the world carbon market in an apparent bid to earn precious hard currency and avoid international sanctions, an expert told RFA.

But the secretive Kim Jong Il regime has to disclose critical information, such as energy consumption data as well as methods by which it derives energy, to be eligible for funding under the United Nations’ Clean Development Mechanism (CDM), said the North Korea expert, speaking on condition of anonymity.

The CDM is aimed at encouraging companies or organizations in the developed world to invest in carbon dioxide emissions-saving projects in developing countries.

In return for funding and technology transfer, investors receive carbon credits, which can then either be traded on carbon markets or used to reduce their own emissions tally if they are subject to a domestic cap.

The Kyoto Protocol set emission caps for 38 countries through 2012, establishing the CDM as a worldwide carbon market. It is a cornerstone of the group’s efforts to tackle global warming.

The North Korea expert told RFA on Jan. 13 that Pyongyang intended to apply for funding via the CDM and that the regime might list its proposed hydro-electricity power projects under the U.N. mechanism.

UN refrains from comment

When contacted on the North Korea move, the U.N. Framework Convention on Climate Change (UNFCC), the secretariat charged with implementing the global environmental treaty to stabilize greenhouse gas concentrations, said it would refrain from commenting on individual country projects.

The North Korea expert estimated that one ton of carbon dioxide would trade for about U.S. $26 dollars and if a hydro-electric power project was registered under the CDM, depending on the carbon credit bid price, about U.S. $1 million dollars could be earned annually.

A hydro project registered under the CDM would need to be evaluated by U.N. inspectors for it to qualify for carbon credits. Usually, it would be evaluated continuously for about 14 years.

Details, including the amount of energy linked to the hydro project and potential reduction of greenhouse gas emissions, would have to be submitted.

North Korea has been mostly reluctant to share information about its energy generation activities.

According to the expert, North Korea has recently displayed “great interest” in the possibility of operating hydro-electric power stations to alleviate its domestic energy shortages and to acquire “carbon credits” that it could, in turn, sell on the international carbon market.

Hard currency

As North Korea’s economic crisis worsens, Pyongyang is seeking ways to earn hard currency following a failed currency reform and due to sanctions imposed by the international community over its nuclear and missile developments and provocations targeting South Korea.

The interest in the CDM is likely to be part of this search.

The North Korea expert also said that earning hard currency through “carbon credits” would not be subject to sanctions imposed on Pyongyang under UN Security Council resolutions, and that any North Korea’s application for participation under the CDM “may stand a chance.”

“For North Korea, this could be an opportunity to earn hard currency without engaging in illegal armament sales, while operating an electric power station in transparent fashion, and accepting strict monitoring by the UN, and abiding by applicable international standards.”

The United States has been pressing China to use its influence to persuade North Korea regime to end recent provocations and return to disarmament talks involving the three countries and South Korea, Russia and Japan.

The six-party nuclear talks were last held in 2008. The impoverished North has been seeking a restart to the nuclear negotiations, which propose to reward its gradual nuclear disarmament with phased infusions of economic aid.

In a bid to renew dialogue and ease chances of conflict, South Korea recently proposed holding a preliminary meeting with North Korea on Feb. 11 to prepare for high-level defense talks. On Friday, the North suggested parliamentary talks between the two sides.

Read the full story here:
North Korea Eyes Carbon Market
Radio Free Asia
1/29/2011

According to the China Daily:

China and the Democratic People’s Republic of Korea (DPRK) have agreed to share their experience and beef up cooperation in exploring and utilizing renewable energy.

The agreement was made during a meeting on Wednesday between senior Communist Party of China (CPC) official Zhou Yongkang and a delegation from the Korean Workers Party (KWP), led by Thae Jong Su, an alternate member of the KWP’s Political Bureau and member of the Secretariat.

Thae told Zhou that the main purpose of his current China trip is to learn from China’s experience in developing geothermal resources, as specified by the DPRK’s top leader, Kim Jong-il.

The DPRK hopes to use geothermal energy in its efforts to develop its economy and build a strong and prosperous country, Thae said.

Zhou, a member of the Standing Committee of the CPC Central Committee Political Bureau, told Thae that China would like to enhance its exchanges with the DPRK in the field in order to jointly improve their capability to develop and utilize renewable energy.

“I once worked in China’s oil industry for a long time, so I fully understood the importance of energy to a country,” said Zhou, who is also secretary of the Political Science and Law Committee of the CPC Central Committee.

Zhou served as vice minister of the Ministry of the Petroleum Industry from 1985 to 1988 and went on to work as deputy general manager of the China National Petroleum and Natural Gas Corporation from 1988 to 1996.

He said China has been actively promoting reforms in its energy sector during the country’s 12th Five-year Plan period (2011-2015).

Hailing the sound momentum of China-DPRK relations, Zhou recalled Kim’s successful visit to China earlier this year, during which Kim exchanged views with President Hu Jintao on major issues of common concern.

Kim also sent a congratulatory letter to Hu regarding the 90th anniversary of the CPC’s founding, Zhou said.

“We are glad to see that the two sides have engaged in high-level exchanges and substantial cooperation in various areas and made concerted efforts for common development and regional peace and stability,” he said.

Thae also conveyed greetings from Kim to Hu during the meeting.

The DPRK delegation is visiting China from July 5 to 9 at the invitation of the International Department of the CPC Central Committee.

Senior CPC official Liu Qi also met with the delegation later Wednesday afternoon.

Liu, a member of the Political Bureau of the CPC Central Committee and secretary of the Beijing Municipal Committee of the CPC, said China and the DPRK currently boast “frequent high-level visits, increasing strategic communication, deepening economic cooperation and active cultural exchanges.”

“China is ready to make joint efforts with the DPRK to implement the consensus reached by the two top leaders and further expand exchanges and cooperation in all areas,” Liu said.

Liu said that he hopes the people of the DPRK see continued progress in the country’s development under the leadership of Kim.

Liu also briefed Thae on Beijing’s economic and social development.

In response, Thae said the DPRK and China now enjoy prosperous ties, which have been carefully nurtured by the countries’ top leaders. The DPRK is willing to work with China to carry out practical cooperation and bolster relations to a new high, he added.

Read the full story here:
China, DPRK to boost renewable energy co-op
China Daily
2011-7-7

According to the Washington Post:

The founder of Pakistan’s nuclear bomb program asserts that the government of North Korea bribed top military officials in Islamabad to obtain access to sensitive nuclear technology in the late 1990s.

Abdul Qadeer Khan has made available documents that he says support his claim that he personally transferred more than $3 million in payments by North Korea to senior officers in the Pakistani military, which he says subsequently approved his sharing of technical know-how and equipment with North Korean scientists.

Khan also has released what he says is a copy of a North Korean official’s 1998 letter to him, written in English, that spells out details of the clandestine deal.

Some Western intelligence officials and other experts have said that they think the letter is authentic and that it offers confirmation of a transaction they have long suspected but could never prove. Pakistani officials, including those named as recipients of the cash, have called the letter a fake. Khan, whom some in his country have hailed as a national hero, is at odds with many Pakistani officials, who have said he acted alone in selling nuclear secrets.

Nevertheless, if the letter is genuine, it would reveal a remarkable instance of corruption related to nuclear weapons. U.S. officials have worried for decades about the potential involvement of elements of Pakistan’s military in illicit nuclear proliferation, partly because terrorist groups in the region and governments of other countries are eager to acquire an atomic bomb or the capacity to build one.

Because the transactions in this episode would be directly known only to the participants, the assertions by Khan and the details in the letter could not be independently verified by The Washington Post. A previously undisclosed U.S. investigation of the corruption at the heart of the allegations — conducted before the letter became available — ended inconclusively six years ago, in part because the Pakistani government has barred official Western contact with Khan, U.S. officials said.

By all accounts, Pakistan’s confirmed shipments of centrifuges and sophisticated drawings helped North Korea develop the capacity to undertake a uranium-based route to making the bomb, in addition to its existing plutonium weapons. Late last year, North Korea let a group of U.S. experts see a uranium-enrichment facility and said it was operational.

The letter Khan released, which U.S. officials said they had not seen previously, is dated July 15, 1998, and marked “Secret.” “The 3 millions dollars have already been paid” to one Pakistani military official and “half a million dollars” and some jewelry had been given to a second official, says the letter, which carries the apparent signature of North Korean Workers’ Party Secretary Jon Byong Ho. The text also says: “Please give the agreed documents, components, etc. to . . . [a North Korean Embassy official in Pakistan] to be flown back when our plane returns after delivery of missile components.”

The North Korean government did not respond to requests for comment about the letter.

Jehangir Karamat, a former Pakistani military chief named as the recipient of the $3 million payment, said the letter is untrue. In an e-mail from Lahore, Karamat said that Khan, as part of his defense against allegations of personal responsibility for illicit nuclear proliferation, had tried “to shift blame on others.” Karamat said the letter’s allegations were “malicious with no truth in them whatsoever.”

The other official named in the letter, retired Lt. Gen. Zulfiqar Khan, called it “a fabrication.”

The Pakistani Embassy in Washington declined to comment officially. But a senior Pakistani official, who spoke on the condition of anonymity “to avoid offending” Khan’s supporters, said the letter “is clearly a fabrication. It is not on any official letterhead and bears no seal. . . . The reference to alleged payment and gifts to senior Pakistani military officers is ludicrous.”

There is, however, a Pakistani-Western divide on the letter, which was provided to The Post by former British journalist Simon Henderson, who The Post verified had obtained it from Khan. A U.S. intelligence official who tracks nuclear proliferation issues said it contains accurate details of sensitive matters known only to a handful of people in Pakistan, North Korea and the United States.

A senior U.S. official said separately that government experts concluded after examining a copy of the letter that the signature appears authentic and that the substance is “consistent with our knowledge” now of the same events. Both officials spoke on the condition of anonymity because of the diplomatic sensitivity of the allegation.

Olli Heinonen, a 27-year vet­eran of the International Atomic Energy Agency who led its investigation of Khan before moving to Harvard’s Kennedy School last year, said the letter is similar to other North Korean notes that he had seen or received. They typically lacked a letterhead, he said; moreover, he said he has previously heard similar accounts — originating from senior Pakistanis — of clandestine payments by North Korea to Pakistani military officials and government advisers.

The substance of the letter, Heinonen said, “makes a lot of sense,” given what is now known about the North Korean program.

Jon, now 84, the North Korean official whose signature appears on the letter, has long been a powerful member of North Korea’s national defense commission, in charge of military procurement. In August, the U.S. Treasury Department imposed financial sanctions on his department for its ballistic missile work.

According to Khan, in the 1990s, Jon met then-Pakistani President Farooq Leghari, toured the country’s nuclear laboratory and arranged for dozens of North Korean technicians to work there. Khan detailed the payments Jon allegedly arranged in written statements that Henderson, a senior fellow at the Washington Institute for Near East Policy, shared with The Post. Henderson said he acquired the letter and the statements from Khan in the years after his 2004 arrest by Pakistani authorities.

Henderson, who has written extensively about Khan, said he provided the letter to The Post because he lacked the resources to authenticate it himself.

He said the letter and the statements constitute new evidence that Khan’s proliferation involved more-senior Pakistani officials than Khan himself. Khan has been freed from home detention but remains under round-the-clock surveillance in a suburb of Islamabad, where the government has recently threatened him with new sanctions for illicit communications.

Some of Khan’s past statements have been called into question. Pakistani officials have publicly accused Khan — who is still highly regarded by many in his country — of exaggerating the extent of official approval he received for his nuclear-related exports to North Korea, Libya and Iran. In 2006, then-Pakistani President Pervez Musharraf accused Khan of profiting directly from nuclear-related commerce.

Although Khan “was not the only one who profited from the sale of Pakistan’s nuclear weapons technology and components . . . by Pakistani standards, his standard of living was lavish,” and the disclosure of his private bank account in Dubai, the United Arab Emirates — with millions of dollars in it — was highly suspicious, said Mark Fitzpatrick, an acting deputy assistant secretary of state for nonproliferation during the George W. Bush administration.

Khan says the bank account was used by associates and a charity he founded, and the Pakistani government never asked him to return any money. He said that in 2007 — six years after his formal retirement and complaints of financial hardship — Musharraf arranged for a lump-sum payment equivalent to $50,000 and a monthly pension of roughly $2,500, which Khan says “belied all those accusations and claims.”

Although U.S. officials disagreed for years about North Korea’s uranium-enrichment capability, the dispute was settled in November when the Pyongyang government invited Siegfried Hecker — a metallurgist who formerly directed a U.S. nuclear weapons laboratory — to see a newly renovated building at Yongbyon that housed more than 1,000 enrichment centrifuges.

Hecker said in an interview that although the government did not disclose their origins, their size, shape and stated efficiency were close to a centrifuge model, known as the P2, that Khan obtained illicitly from Europe. Khan has said that he helped give North Korea four such devices.

“The combination of the Pakistani design, the Pakistani training and the major [Pakistani] procurement network they had access to” allowed North Korea to “put the pieces together to make it work,” Hecker said.

According to Khan’s written account, the swap of North Korean cash for sensitive Pakistani technology arose during a squabble in 1996 over delays in Pakistan’s payment to North Korea for some medium-range missiles. U.S. officials said they had heard of this dispute.

In the letter, Jon first thanks Khan for his assistance to North Korea’s then-representative to Islamabad, Gen. Kang Tae Yun, in the aftermath of a bizarre shooting incident in which an assailant supposedly gunning for Kang accidentally killed his wife. But the heart of the letter concerns two key transactions: the provision of a kickback to speed the overdue Pakistani missile-related payments and additional payments for the nuclear-related materials.

Khan, in his written statements — including an 11-page narrative he prepared for Pakistani investigators while under house arrest in 2004 that was obtained by The Post — said the idea for the kickback came from a Pakistani military officer.

Khan said Kang responded by delivering a half-million dollars in cash in a suitcase to a top Pakistani general, who declined it. Khan said Karamat, a more senior officer at the time, then said: “I should arrange with Gen. Kang to pay this money to him for some secret [Pakistani] army funds. He would then sanction the payment of their outstanding charges.”

“I talked to Gen. Kang, and he gave me the $0.5 million in cash, which I personally delivered” to Karamat, Khan wrote. He says this payment only whetted the army’s appetite, however: Karamat, who had just become chief of the army staff, “said to me that he needed more money for the same secret funds and that I should talk to Gen. Kang.”

Kang then started bargaining, saying that his superiors “were willing to provide another $2.5 million, provided we helped them with the enrichment technology,” Khan wrote.

Once the details of that assistance were worked out, Khan wrote, “I personally gave the remaining $2.5 million to Gen. Karamat in cash at the Army House to make up the whole amount.” Khan said he transferred all the funds on two occasions in a small canvas bag and three cartons, in one case at the chief of army staff’s official residence.

On the top of one carton was some fruit, and below it was $500,000 in cash, Khan wrote in a narrative for Henderson. Inside the bag was $500,000, and each of the other two cartons held $1 million, Khan wrote.

If the account is correct, the ultimate destination of the funds in any event remains unclear. Pakistani officials said in interviews that they found no trace of the money in Karamat’s accounts after an investigation. But the military is known to have used secret accounts for various purposes, including clandestine operations against neighboring India in the disputed Kashmir region.

Karamat said that such a delivery would have been impossible and that he “was not in the loop to delay, withhold or sanction payments” to North Korea. He called the letter “quite mind-boggling.”

The letter also states that Zulfiqar Khan, Karamat’s colleague, received “half a million dollars and 3 diamond and ruby sets” to pave the way for nuclear-weapons-related transfers. Zulfiqar Khan, who later became the head of Pakistan’s national water and power company, was among those who had witnessed the country’s nuclear weapons test six weeks before the letter was written.

Asked to respond, he said in an e-mail that he considered the entire episode “a fabrication and figment of imagination,” and he noted that he had not been accused of “any sort of dishonesty or irregularity” during 37 years as a military officer. He denied having any connection to North Korean contracts.

The senior Pakistani official said that Karamat and Zulfiqar Khan were “amongst the first to initiate accountability” for Abdul Qadeer Khan and his colleagues, and that implicating them in illegal proliferation “can only be deemed as the vengeful reaction of a discredited individual.”

In the letter, Jon requests that “the agreed documents, components” be placed aboard a North Korean plane. He goes on to congratulate Khan on Pakistan’s successful nuclear test that year and wish him “good health, long life and success in your important work.”

The Pakistani intelligence service interrogated Karamat in 2004 about Khan’s allegations, according to a Pakistani government official, but made no public statement about what it learned. Musharraf, who oversaw that probe, appointed Karamat as ambassador to Washington 10 months later, prompting further scrutiny by the U.S. intelligence community of reports that Karamat had arranged the sale of nuclear gear for cash.

Those inquiries, several U.S. officials said, ended inconclusively at the time because of Karamat’s denial and Washington’s inability to question Khan.

The letter can be found here.

For those of you who are interested, here is the biography of Jon Byong-ho from the Yonhap  North Korea Handbook (p. 796):

Jeon Byeong-ho
Current Posts: secretary (in charge of munitions), Workers’ Party of Korea Central Committee (wpK CC)
Educ.: Anju Middle School, Pyeongyang; Ural Engineering College, USSR
Born: March 1926 (Musan, North Harngyeong Province)
Career:
security staff, Anju Security Guards, South Pyeongan Province, Aug. 1945
security squad for Kim II-sung’s House, Aug. 1945
studied at Ural Engineering College, USSR, just before the Korean War, 1950
engineer, chief engineer, manager, Ganggye Tractor Factory (Military Logistics Factory), Jagang Province, End of 1951
vicedirector, Machine Industry Dept. (originally Military Logistics Dept.), Oct. 1970
alternate member, WPK CC, Nov. 1970
director general, General Bureau of Second Economic Committee, 1972
member, WPK CC, Oct. 1980-
delegate, Seventh SPA, Feb. 1982
chairman, Second Economic Committee, March 1982
awarded Order of Kim II-sung, Apr. 1982
alternate member, Politburo, WPK CC, Aug. 1982
delegate, Eighth SPA, Nov. 1986
secretary (in charge of munitions), WPK CC, Dec. 1986
member, Politburo, WPK CC, Nov. 1988-
delegate (Geumbit, South Hamgyeong Province), Ninth Supreme People’s Assembly (SPA), Apr. 1990
member, Military Committee; director, Military Industry Policy Inspection Dept., May 1990-
director, Economic Policy Supervisory Dept., March 1994
member (11th), Kim Il-sung Funeral Committee, July 1994
awarded title of Labor Hero, Feb. 1998
member, Tenth SPA (254th electoral district), July 1998
member, Military Committee, Sept. 1998

He has since taken a post at the National Defense Commission and “been put out to pasture” (see here also).  According to another Washington Post article: “U.S. officials confirm that he long directed North Korea’s defense procurement and nuclear weapons efforts, putting him in a position to know about the events the letter depicts.”

The Guardian and Arms Control Wonk also covered this story.

Read the full story here:
Pakistan’s nuclear-bomb maker says North Korea paid bribes for know-how
Washington Post
R. Jeffrey Smith
2011-7-6