North Korean Economy Watch

According to Itar-Tass:

The Altai Territory will supply a test batch of flour to North Korea weighing 2,000 tons. The concern Altaiskiye Melnitsy (Altai Mills) signed a corresponding contract with the foreign trade state amalgamation of North Korea, ITAR-TASS learnt at the enterprise on Tuesday.

“Further increasing of volumes of supplies will mainly depend on the export price of flour,” general director Sergei Klinov said. The currently in force railway tariff from the Altai Territory to the border with North Korea, and this is about 3,600 roubles per ton, exceeds half the cost of flour in the export price structure. In such a situation, the issue of quality may become secondary for North Korea, and it will continue buying flour in China.”

Read the full stoy here:
Altai to begin supplying flour to North Korea
Itar-Tass
3/16/2010

According to Yonhap (3/9/2010):

South Korea’s Red Cross said it will send 20 tons of powdered skim milk to North Korea on Wednesday as part of humanitarian aid to the impoverished neighbor.

The aid worth 156 million won (US$137,000) will be delivered on two 11-ton trucks across the inter-Korean border and unloaded in the border town of Kaesong, the Red Cross said in a release.

In January, North Korea accepted a proposal by the South to provide powdered milk along with other types of aid as humanitarian assistance.

Photo in the Hankyoreh.

According to Yonhap:

South Korea’s planned shipment of its first food aid to North Korea in years has hit a snag due to sourcing difficulties, an official said Saturday.

The South has been preparing to send 10,000 tons of corn to the impoverished neighbor since mid-January, right after Pyongyang accepted its aid offer made months earlier. The shipment would mark Seoul’s first food assistance to the North since President Lee Myung-bak took office in early 2008.

The government has since approved a 4 billion won (US$3.5 million) budget to fund the assistance and notified the North of a shipping route, based on a plan to buy corn in China and ship it directly to the North from there.

“Considering shipping costs, it would make the most sense to send Chinese corn” to the North, a government official said on customary condition of anonymity.

The official said, however, that the plan has faltered because of China’s “grain export quota,” which places restrictions on food exports in order to meet the country’s rising domestic demand.

The delay has raised concern that the planned aid may not be delivered by the time the North needs it the most — usually between March and May when food shortages in the country worsen — because it usually takes at least a month after the purchase is made for such to be delivered.

But the government official said that he believes the problem will be resolved soon, though he did not elaborate.

Read the full article here:
South Korea’s planned food aid for North Korea hits snag
Yonhap
3/6/2010

According to the Associated Press (via the Washington Post):

North Koreans are getting better medical treatment as the result of a joint program between the two Koreas that has trained thousands of doctors, provided modern equipment and renovated hospitals, the World Health Organization said Thursday.

Maternal mortality has declined by over 20 percent since 2005, and diarrhea cases and deaths in operations have also dropped, said Dr. Eric Laroche.

The World Health Organization has helped in the wide-ranging program, which started in 2006 and is funded by South Korea. It has cost a total of $30.2 million so far.

The program has trained more than 6,000 doctors and nurses in emergency obstetric care, newborn care and child illnesses, said Laroche, who assessed its progress in a four-day visit to North Korea.

The specialization marks a change in health strategy in North Korea, which has about 90,000 family doctors who care for about 130 families each, according to Laroche.

“They know each family one by one,” he said. But, he added, “they’re extremely keen to be trained.”

…

Laroche said hospital staff have been trained in hygiene and clinics have received better material for operations, blood transplants and other medical interventions.

Numerous hospitals have been renovated, and material has also been distributed to 1,200 rural clinics.

Between 2007 and 2009, the number of patients dying in operations fell 73.4 percent, said Laroche, citing a study by the University of Melbourne.

He declined to give an overall view of the health system in the isolated communist nation. But he said services were well-spread among cities and communities.

Read the full article here:
WHO: Korean cooperation boosting health in north
Associated Press (via Washington Post)
Elaine Engler
3/4/2010

According to the Financial Times:

“The WFP can continue to support around 1.4m children and pregnant women with fortified foods until the end of June. However, new contributions are required now or the operation will come to a standstill in July. We are hopeful that donors will come forward with contributions, given the situation,” he told the Financial Times.

In 2008 the WFP hoped 6.2m people would receive such aid but found it increasingly hard to get donations. Annual aid to North Korea is equivalent to $4.50 (€3.30, £3) per person across the population. The average across other low-income countries is $37 per person.

The WFP has survived such funding crunches in the past, but UN officials fear donors have now become exasperated with North Korea, which expelled US non-governmental organisations last March. Pyongyang has severely restricted aid workers’ access, has demanded they give longer notice periods before rural visits and has barred teams from using their own Korean speakers.

Rocky relations with the US and South Korea after Pyongyang launched a long-range missile last April and tested an atomic warhead in May have further discouraged donations.

The US, once the leading food donor, has said it will not supply cereals until North Korea resumes proper monitoring, allowing aid agencies to track the final recipients.

North Korea’s harvests cannot feed all its people and in recent years the annual food deficit was about 1m tonnes. People are chronically malnourished and as many as 1m are believed to have died during famine in the 1990s.

It is hard to determine the scale of malnutrition but Kim Jong-il, the country’s dictator, made a very rare apology this year for failing to deliver “rice and meat stew” to the people. Food markets were thrown into disarray late last year by a currency redenomination but Mr Due, based in Pyongyang, said these seemed to be returning to normal.

Read the full article below:
Donor fatigue threatens aid for North Korea
Financial Times
Christian Oliver and Anna Fifield
3/3/2010

According to the New York Times:

With help from scientists from Stanford University’s medical school, North Korea has developed its first laboratory capable of detecting drug-resistant tuberculosis, scientists involved in the project said last week.

Tuberculosis surged in the Democratic People’s Republic of Korea during the famines of the 1990s. (Starvation suppresses the immune system, allowing latent infections to grow.) But the country cannot tell which cases are susceptible to which antibiotics, meaning more dangerous strains could push out strains that are easier to kill, as has happened in Russia and Peru.

The project began after John W. Lewis, an expert on Chinese politics at Stanford participating in informal diplomatic talks over North Korea’s nuclear threat, realized how serious a TB problem the country had. In 2008, doctors from North Korea’s health ministry visited experts in the San Francisco Bay area. Last month, a Stanford team began installing the new diagnostics lab at a hospital in the capital, Pyongyang.

The project “represents an unprecedented level of cooperation” between North Korean and American doctors, Professor Lewis said. It is supported by the Nuclear Threat Initiative, a nonprofit global security group led by former Senator Sam Nunn, Democrat of Georgia, and by Christian Friends of Korea, a humanitarian group.

Although it will soon be able to grow and test TB strains, North Korea right now has none of the more expensive antibiotics that attack drug-resistant TB, said Sharon Perry, the epidemiologist leading the Stanford team. Without outside help it will also run out of routine first-line antibiotics by July, she said.

Read the full article here:
Tuberculosis: North Korea Develops TB Laboratory With Help From American Doctors
New York Times
Donald McNeil, Jr.
3/1/2010

Choson Ilbo
2/26/2010

North Korea is still demanding rice and fertilizer in return for an inter-Korean summit, even as it keeps sending increasingly urgent messages to Seoul to bring such a summit about.

Since a secret meeting between South Korean Labor Minister Yim Tae-hee and Kim Yang-gon, the director of the North Korean Workers’ Party’s United Front Department, in Singapore in October, “North Korea has kept asking us for a huge amount of economic aid in return for arranging a meeting” between President Lee Myung-bak and North Korean leader Kim Jong-il, a South Korean government source said on Thursday.

But the North seems to have no interest in giving in to South Korean demands to put denuclearization and the repatriation of prisoners of war and abduction victims on the summit agenda. “The North basically wants economic gain in return for letting us make political use of an inter-Korean summit for the upcoming local elections” on June 2, the source said. “It seems that the North still feels nostalgic for the Sunshine Policy,” which netted it huge benefits over the past decade.

The first inter-Korean summit in 2000 was announced only three days before the general election and was bought through a secret payment of billions of won. The second summit in 2007 was announced two months before the presidential election. Since 2000, the North has received more than 300,000 tons of rice and the same amount of fertilizer almost every year worth more than W1 trillion (US$1=W1,163) a year.

In another secret meeting between South Korea’s Unification Ministry and the North Korean Workers’ Party’s United Front Department in November, the North again insisted on specifying humanitarian aid in an agreement to be signed at an inter-Korean summit.

A “tree planting campaign for North Korea” initiated recently by the Presidential Committee on Social Cohesion also reportedly went awry because the North demanded a huge aid of food in return for letting South Korea plant trees there.

Kim Jong-il is apparently not aware that Seoul is serious about ending this cash-for-summits policy. A South Korean government official with experience in inter-Korean talks said, “At secret meetings, each side often had its own way of interpreting agendas. Maybe North Korean delegates who are accustomed to the Sunshine Policy are trying to interpret the current government’s messages the way they did with past governments.”

It seems the North has attempted to earn economic aid worth W1 trillion by prevaricating over the issue of the POWs and abduction victims, offering to handle it like part of reunions of separated families, and discussing the nuclear issue only with the U.S. 

Whether the attitude will change remains to be seen. The North is now in a worse economic situation than before in the wake of a recent disastrous currency reform on top of international sanctions and a severe food shortage.

Prof. Cho Young-ki of Korea University said, “The North is in dire need of support from the outside including South Korea to stabilize the regime for a smooth transition of power” to Kim’s son Jong-un. “It is possible that the North will reluctantly accept our request depending on progress in the six-party nuclear talks.”

The government believes that a dramatic turning point in inter-Korean relations could be reached if the North makes “big decisions” in the nuclear or POW issues, according to Kim Tae-hyo, the presidential secretary for foreign strategies.

According to Yonhap:

South Korea said Tuesday it will send 1 billion won (US$866,000) worth of hand sanitizer next week to North Korea to help the impoverished neighbor combat the spread of the H1N1 flu virus.

The shipment of 200,000 liters of sanitizer, scheduled for next Monday, comes after South Korea delivered some $15 million in anti-viral medications to the North in December in the first state-level cross-border humanitarian aid in nearly two years.

North Korea first acknowledged cases of Influenza A virus infection on Dec. 9, but it has yet to report any flu-related deaths.

The hand sanitizer will be transported to the North Korean border town of Kaesong on South Korean trucks across the military demarcation line and handed to the North there, Unification Ministry spokesman Chun Hae-sung said.

“North Korea agreed to accept the aid on Feb. 22,” he told reporters, adding about 20 25-ton trucks will likely be mobilized to deliver the aid.

The Tamiflu aid in December marked the first humanitarian assistance provided by the South Korean government to North Korea since conservative President Lee Myung-bak took office in Seoul in early 2008. Lee cut off the unconditional aid that his liberal predecessors had shipped to the North over the past decade, conditioning exchanges on progress in the North’s denuclearization.

Read the full story here:
S. Korea to deliver anti-viral sanitizer to N. Korea next week
Yonhap
2/16/010

UPDATE: The shipment has been delivered

SKorea sends 2nd batch of swine flu aid to NKorea
AP via Business Week
2/23/2010

South Korean trucks have crossed the border into North Korea to deliver a second batch of swine flu aid.

Unification Ministry spokeswoman Lee Jong-joo says South Korea sent 52,840 gallons (200,000 liters) of hand sanitizers to North Korea on Tuesday.

South Korea sent enough doses of the antiviral drugs Tamiflu and Relenza for 500,000 North Koreans in December in its first direct humanitarian aid to the communist country in nearly two years. North and South Korea have remained in a state of war since 1953.

North Korea acknowledged in December that swine flu had broken out in the country though hasn’t mentioned any virus-related deaths.

Tamiflu is made by Switzerland’s Roche Group. Relenza is a procuct of GlaxoSmithKline.

According to this SDC web page:

Following a decision made by the Swiss Parliament, the SDC’s special programme in North Korea will be discontinued at the end of 2011.

There was not much in the media on this, but a reader pointed me to this article:

Switzerland is standing by a decision to stop development aid to North Korea, which has focused on improving food security in the internationally isolated country.

The foreign ministry says it now has a strategy for the withdrawal of Swiss development workers from the communist country by the end of 2011.

In 2008 the government approved a motion by parliamentarian Gerhard Pfister demanding a halt to development aid in response to North Korea’s continuing nuclear ambitions.

“The atomic weapon programme violates international agreements. North Korea has shown itself to be utterly uncooperative, despite international efforts. It threatens to destabilise the region,” the motion said.

Although Switzerland has no official representation in the communist country, diplomatic relations were established in 1974.

The Swiss Agency for Development and Cooperation (SDC) has had an office in the capital, Pyongyang, since 1997 [Possibly located here]. According to the motion, the SDC justified its work there by saying that “supporting the reform process” should improve food security. The SDC cited a “tentative opening” of the country as a success.

Pfister maintains that today North Korea is no longer showing a “tentative opening” – rather the opposite.

The SDC’s main priority in the country has been aid projects aimed at improving the efficiency and sustainability of North Korean agriculture.

Consistent policy?

The central question is whether it is wiser to isolate a totalitarian regime or to cooperate with it. The attitude of the Swiss parliament and government is clear: stop development aid.

But is the issue simply black and white? On December 21 Switzerland celebrated – in the presence of the North Korean foreign minister – the 35th anniversary of diplomatic relations.

On December 28 Blaise Godet, the Beijing-based Swiss diplomat responsible for North Korea, told the Neue Zürcher Zeitung that Switzerland had nurtured a consistent policy of engagement and political dialogue. “We want to contribute to solutions,” he said.

As for the ending of aid at the end of 2011, foreign ministry spokesman Erik Reumann told swissinfo.ch that “the SDC would follow the decision of the government and parliament. A dismantling plan exists that will guarantee a well-organised withdrawal from North Korea”.

Similarities with Switzerland

While the Swiss government and parliament want to end development aid to North Korea, former justice minister Christoph Blocher, a leading figure in the rightwing Swiss People’s Party, has written in detail about his visit to the country – on a hiking holiday.

The self-confessed anti-communist noted in the Weltwoche weekly magazine in November that “one thing North Korea and Switzerland have in common is that both countries want to keep their autonomy and are working for a safe future”.

In Pyongyang Blocher said he came across “normal conditions”, but admitted that “we only had access to those areas and streets considered presentable”. Nevertheless, he continued, “the streets are tidy and the Korean people are all clean and decently dressed, and go everywhere on foot. People walk”.

But Blocher agreed that the food situation was unsatisfactory.

The Swiss Agency for Development and Cooperation (SADC) web page is here.Here is a report they helped produce: Tools for building Confidence on the Korean Peninsula.

According to Yonhap (1/15/2009):

North Korea told South Korea on Friday that it will accept the 10,000 tons of corn aid that South Korea offered in October, Seoul’s Unification Ministry said.

North Korea sent a fax message to the South, saying it “will receive the corn aid,” said ministry spokeswoman Lee Jong-joo.