North Korean Economy Watch

Daily NK
Yoon Il Geun, Lee Sung Jin
12/19/2007

Yanji, China — According to a testimony from a source inside the North, some underground churches operating in the North are, in fact, fake churches which take orders from the National Security Agency and whose mission is to unmask underground Christians.

“It was found to be true that the conspiracy department of the National Security Agency operating in the border area had established a fake church consisted of its security agents,” said the source to a DailyNK reporter on Monday at a private place in Yanji. The source himself is involved in an underground church within the North.

The source revealed a shocking reality, saying, “Some security agents disguise themselves as defectors and deliberately approach those Korean churches operating in China. From the churches, the agents receive money and bibles. Then, the agents establish a fake church.” The source added, “While taking money from the Korean churches in the name of financial support for missionary work, the agents devote themselves to hunting down domestic underground churches connected to the churches in China.”

The source said that he heard about the above-mentioned activities from an individual working at the National Security Agency, and such activities were an open secret among security agents.

“The received bibles are used as wastepaper and taken to paper processing plants, and the received money goes to the National Security Agency,” said the source. “The agent who told me about the agency’s secret activities said sneeringly, ‘The paper from the bibles is good for cigarette rolling paper,’” said the source resenting the agent’s anti-religious behavior.

The source said that the security agency runs the fake church not only to crack down Christians but also to make money. Many Christian organizations in the South provide financial support for pastors engaged in missionary work for North Koreans in the China-North Korea border areas. The source said that those security agents operating the fake underground church make a decent living thanks to the money they receive from the South’s Christian organizations.

“Unless the churches of the South tightly manage their supporting activities for underground churches and Christians of the North, their activities might end up enriching the security agents and causing harm to underground Christians,” the source said.

In the North, the act of missionary work is considered a felony, and individuals convicted of the felony are either sent to a political concentration camp or executed in public.

Todd Nettelton, director of news services with the Voice of the Martyrs, a US-based Christian missionary organization, said, “North Korean Christians defend their faith in the midst of oppression, arrest and torture by the regime.” The director said, “When these Christians gather together for bible study or worship, they have to be careful for safety. For instance, they form a small group of three to four people and cloak the windows of their meeting place.”

“Hometown,” a South Korean monthly run by individuals who were born in the North but displaced into the South during the Korean War, reported in its November edition that the North Korean authorities recently arrested Mr. Cho who was secretly engaged in missionary work in Dongrim of North Pyongan Province along with his mother and two younger siblings. The monthly said, “The remaining three family members trembled in fear and eventually took their life by jumping from the Dongrim Waterfall on October 12th.

In October, the US State Department again designated the North as one of “Countries of Particular Concern (CPC)” for the country’s persecution of religion. In fact, the North has been designated as the CPC for seven years in a row.

Every year, the US State Department releases a report on religious freedom in the world. The 2007 report said, “Although the Construction of the DPRK guarantees freedom of religion, there is no such thing in reality. The country’s situation of freedom of religion remained as bad as it was before this year.”

Yonhap
Byun Duk-kun
12/19/2007

Lee Myung-bak, almost certain to be South Korea’s next president, will likely continue engaging North Korea through economic cooperation, but the extent should rely deeply on Pyongyang’s commitment to full denuclearization, unlike his predecessor who has often been under fire for granting unconditional aid to the North, analysts said Wednesday.

Closer ties with Washington will also be prioritized by the incoming administration of conservative Lee, who has criticized President Roh Moo-hyun for alienating the U.S. in dealing with the nuclear-armed communist North.

The entrepreneur-turned-politician says he can and will increase the communist nation’s per capita income to US$3,000 in 10 years, if Pyongyang completely abandons its nuclear ambitions.

“There will be no immediate changes to the country’s North Korea policy if the North continues to move down the path of denuclearization,” Kim Woo-sang, a political science professor at Seoul’s Yonsei University and a key advisor to the president-elect for security and foreign policy, said in an earlier interview with Yonhap News Agency.

Under a six-nation deal, North Korea has to disable its key nuclear facilities and disclose all its nuclear programs by the end of the year in return for economic and energy assistance and political benefits.

North Korea began disabling the Yongbyon complex early last month, but has yet to make a full declaration of its nuclear programs amid a five-year dispute between Pyongyang and Washington over the existence of a secret nuclear weapons program in the North.

The nuclear crisis erupted in late 2002 when the U.S. accused the North of running a uranium enrichment program. North Korea denies having any uranium program.

Seoul has regularly provided hundreds of thousands of tons of food and other humanitarian aid to the North since the historic inter-Korean summit between then President Kim Dae-jung and North Korean leader Kim Jong-il in 2000.

The Lee administration will continue to provide such assistance strictly based on humanitarian views, but economic cooperation between the divided Koreas will suffer significant reduction should the communist nation choose not to give up its nuclear weapons, Kim noted.

Further development or continuation of “ongoing economic cooperation projects, such as the Kaesong industrial complex, will be left to the market,” Kim said.

“The government will no longer try to encourage South Korean businesses to move into the industrial complex by providing subsidies and other benefits as it currently does, but will try to foster a better environment so the businesses and foreign investors will invest voluntarily,” he added.

At an October summit in Pyongyang, President Roh Moo-hyun and the North Korean leader agreed to launch various other reconciliatory projects, but Lee has said some of those projects will be subject to reconsideration.

Another visible change in policy towards North Korea will come in the way Seoul deals with the nuclear issue, the Yonsei professor said.

“Mr. Lee puts more weight on the six-nation denuclearization process than anything else, so the new administration will never try to take its own initiative or try to pressure China to convince North Korea to denuclearize,” he said.

While seeking more international cooperation in denuclearizing the North, Lee is expected to move closer to the United States, an ally Lee says has served as a capstone for Seoul’s security and economic development since the end of 1950-53 Korean War.

“The governments of Kim Dae-jung and Roh Moo-hyun neglected Korea’s relationship with the United States. China and Japan are important partners, but the next government will be moving in a different direction, focusing on Korea’s traditional relationship with Washington,” Lee had said in September.

The 65-year-old Lee has also noted his administration may try to push back the timing of taking back the wartime operational control of South Korean troops from the United States, which is currently scheduled to occur in 2012.

“As Mr. Lee has repeatedly said, there will be no renegotiation of the transfer of wartime operational control, but the scheduled timing of the transfer could become very sensitive depending on security conditions surrounding the Korean Peninsula in 2012,” said Kim.

The most authoritative map of North Korea on Google Earth
North Korea Uncovered v.7
Download it here

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

Additions to the latest version of “North Korea Uncovered” include: A Korean War folder featuring overlays of US attacks on the Sui Ho Dam, Yalu Bridge, and Nakwon Munitians Plant (before/after), plus other locations such as the Hoeryong Revolutionary Site, Ponghwa Revolutionary Site, Taechon reactor (overlay), Pyongyang Railway Museum, Kwangmyong Salt Works, Woljong Temple, Sansong Revolutionary Site, Jongbansan Fort and park, Jangsan Cape, Yongbyon House of Culture, Chongsokjong, Lake Yonpung, Nortern Limit Line (NLL), Sinuiju Old Fort Walls, Pyongyang open air market, and confirmed Pyongyang Intranet nodes.

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

Eugene Bell Foundation
Fall 2007 newsletter

Medical Support for Individual Patients Now Possible

The Eugene Bell Foundation, a non-governmental organization that provides medical support for North Korean tuberculosis (TB) patients, announces that countermeasures are urgently needed for the recent increase of multi-drug resistant tuberculosis (MDR-TB) patients in North Korea.   

After years of visiting and providing TB medicines for TB Care Centers in North Korea, EugeneBell estimates that over 30% of all TB patients in the country may be infected with MDR-TB. Evidence suggests the number of patients is increasing year-by-year.  

In response to this growing crisis, the delegation visited six different North Korean TB Care Centers in early 2007 and collected sputum samples from 20 patients thought to be infected with MDR-TB and brought them to South Korea for study. The test results identified at least two or more strains of MDR-TB virus in over 60% of the samples.   

In response, EugeneBell began a support program for MDR-TB patients when a delegation returned to North Korea (November 15 – 27, 2007). This fall, a follow-up delegation delivered a six-month supply of special MDR TB medication for the patient’s diagnosed with multi-drug resistant tuberculosis.  

As part of the new support program, EugeneBell and North Korean medical authorities have agreed to establish special wards for multi-drug resistant patients in four long-term care facilities. One center will be located in each of the following locations: North Pyongan Province, South Pyongan Province, Nampo City and Pyongyang City. These MDR wards will serve as centers for treating patients who do not respond to regular tuberculosis medications.

“Multi-drug resistant tuberculosis is a deadly, contagious disease that can spread resistant strains of tuberculosis that are extremely difficult and expensive to treat,” states Dr. Linton, EugeneBell Chairman. “Because MDR-TB threatens the health of every citizen, steps must be taken as soon as possible to meet this challenge.”

Unfortunately, even short-term countermeasures to meet the spread of MDR-TB in North Korea are difficult because no in-country testing facilities are available today. An even greater barrier to an effective national MDR program is the high cost of MDR medications. While it takes only six months to treat and cure a case of ordinary TB, MDR-TB requires at least 18 month, and special drugs that cost nearly 100 times as much as regular tuberculosis medications. In order to solve such difficulties, EugeneBell will initiate a ‘One-by-One MDR-TB Patient Support Program’ beginning in 2008.  This program will connect one patient in North Korea with individual donors to insure that each patient in the program receives the necessary support for long-term treatment.

Dr. Linton notes, “This small but significant start toward an effective MDR-TB program for people in North Korea that will begin with 20 patients and grow as additional support becomes available. Every human life is precious. While we hope we can eventually reach all MDR patients in North Korea, just saving one person who would otherwise die from this dreaded disease is well worth the effort.”

“North Korean medical professionals are delighted with the new program. Doctors who formerly had no effective way of helping their patients who failed to respond to ordinary tuberculosis medications now have hope that even the most ill tuberculosis patient may be saved. The enthusiasm with which they pitch in to collect sputum samples from their most difficult cases is heart-warming” continues Dr. Linton.

Dr. Park Seung-kyu, Director of Masan National Tuberculosis Hospital in South Korea, will make his hospital’s state-of-the-art research facilities available for testing sputum samples from North Korea. “As a matter of fact, MDR-TB is considered a serious problem not only for North Korea but also for South Korea and the world,” says Dr. Park. “There is a need for experts from both South and North Korea to discuss countermeasures together for the treatment of MDR-TB on the Korean Peninsula”

A EugeneBell delegation just returned from visiting thirteen medical institutions located in North Pyongan Province and Pyongyang City. Next spring, a follow-up delegation will deliver medications for the patients who provided samples this autumn.

EugeneBell also started two other pilot programs in 2007, one for mothers and infants and another for school-aged children. These will provide a steady stream of assistance through ‘Mother and Infant Packages’ and ‘Children’s Health Packages’ to three local hospitals, one in North Pyongan Province and two in South Pyongan Province.

Yonhap
12/11/2007

(NKeconWatch: Joshua over at OFK also has a contribution to this)

A senior U.S. senator introduced a resolution setting conditions for removing North Korea from the U.S. list of terrorism-sponsoring nations, one of the key incentives offered for Pyongyang’s denuclearization.

Sen. Sam Brownback (R-Kansas) submitted Resolution 399 on Monday and so far has three co-sponsors.

The resolution urges the administration not to lift the designation until it can be demonstrated that North Korea is no longer engaged in proliferation of weapons of mass destruction and no longer counterfeiting American currency.

It also demands proof that a North Korean ruling party bureau, believed to be running illicit financial activities including drug trafficking and counterfeiting, has been made inoperable.

The senator also demands that the terrorist-nation designation remain until all U.S. overseas missions have been instructed to facilitate asylum applications by North Koreans seeking protection as refugees.

North Korea was put on the list in January 1988, soon after its agents blew up a South Korean civilian aircraft. Brownback’s resolution demands North Korea’s accounting of Japanese nationals abducted by the North as well as of surviving South Korean prisoners of war.

“If the United States takes the step of removing North Korea from the terrorism list, let’s at least make clear the conditions for such a removal,” Brownback said, adding, “I question the merits of the State Department’s decision to remove North Korea from its terrorist list.”

“It is important that the United States sends a loud and clear message to the North Korean regime that we will remain vigilant,” he said.

Delisting North Korea is one of the key benefits the U.S. offered in return for Pyongyang’s disablement of its core nuclear facilities and full disclosure of its atomic programs, the steps toward full dismantlement agreed on by six nations — South and North Korea, the U.S., China, Russia and Japan.
  
Getting off the list would free North Korea from a number of restrictions prohibiting meaningful economic and political assistance and exchange from the U.S. and the international community.

In Seoul, a Foreign Ministry official expressed concerns the resolution, if passed, could undermine progress in the nuclear disarmament talks, but said it did not pose any immediate threats to the six-nation deal on the denuclearization of the North.

“Delisting North Korea does not depend on the resolution, but whether the North fully discloses its nuclear programs,” the official, who is deeply involved with the nuclear talks, said, asking not to be identified. “Obviously, nothing has been changed so far. The U.S. administration can still delist the North if and whenever it chooses to.”

Korea Times
Yoon Won-sup
12/9/2007

South Korea will provide 5,100 tons of steel plates to North Korea on Dec. 17 in a six-party deal that involves the provision of energy or alternatives to North Korea in exchange for the North’s disablement of its nuclear facilities by year’s-end, government officials said Sunday.

U.S. President George W. Bush sent a personal letter to North Korean leader Kim Jong-il last week urging him to keep his word on the disablement and declaration by Dec. 31.

The shipment is the first alternative to oil sent to the North under the agreement, although participants in the six-way talks have been taking turns to provide 50,000 tons of heavy fuel oil to the North every month recently.

Yonhap
12/8/2007

A ship carrying 1,400 tons of tangerines will leave Sunday for North Korea from a port on this southern island of South Korea to help promote peace and reconciliation between the two Korean states, island officials said Saturday.

They said that the tangerines grown by local farmers have been loaded onto a 3,500-ton ship, which will set sail for the North on Sunday afternoon. With crews including three South Koreans, the Panama-registered ship will arrive at Nampo, a western port town of North Korea, Tuesday, they said.

This is the first batch of 10,000 tons of tangerines that will be sent to the North this year. The officials said that the remainder will be delivered by the end of January next year at the latest.

They said that Jeju Island has sent 36,488 tons of tangerines and 17,100 tons of carrots to the North since 1998. It was humanitarian aid designed to promote peace and co-existence between the two Koreas, which remain technically at war after the 1950-53 Korean War ended in a truce instead of a peace treaty.

International Crisis Group
Asia Briefing N°71
4 December 2007

North Korea’s relations with Russia have been marked by unrealistic expectations and frequent disappointments but common interests have prevented a rupture. The neighbours’ history as dissatisfied allies goes back to the founding of the Democratic People’s Republic of Korea (DPRK) with Soviet support and the Red Army’s installation of Kim Il-sung as leader. However, the Soviets were soon written out of the North’s official ideology. The Sino-Soviet split established a pattern of Kim playing Russian and Chinese leaders off against each other to extract concessions, including the nuclear equipment and technology at the heart of the current crisis. Since Vladimir Putin visited Pyongyang in 2000, diplomatic initiatives have come undone and grandiose economic projects have faltered. Russia is arguably the least effective participant in the six-party nuclear talks.

The relationship between Putin’s Russia and Kim Jong-il’s North Korea has disappointed both sides. Putin has mostly been unable to assert himself as a prominent player in North East Asia, and North Korea has received neither the unalloyed political support nor the economic backing it seeks. Russia has more influence in the region than it did in the 1990s but not enough to change the equation on the Korean peninsula. Opportunities for economic cooperation have been limited, mostly by Pyongyang’s refusal to open its economy but also by Russia’s fixation on overly ambitious schemes that at best may take decades to realise. China’s more nimble investors have moved in much faster than Russia’s state-owned behemoths.

Moscow has been conservative in its political dealings with Pyongyang, playing a minor but thus far positive role at the six-party talks consistent with its concerns about proliferation and the risks of DPRK collapse. It regards the denuclearisation of the peninsula as in its interests, has relatively few commercial opportunities in the North and considers its relations with the other nations in the exercise more important in every way than its ties to Pyongyang.

While Russia has shown interest in building energy and transport links through the North, little progress has been made. Rebuilding railways on the peninsula will cost enormous sums, and overcoming the many obstacles will require years of negotiation. Investments have been hindered by the North’s unreliability and history of default on loans. Russia may eventually have to forgive billions of dollars of debt the North cannot repay. Energy is a major mutual interest but pipelines across the North are unlikely to be built soon; Japan and China are expected to be the main markets for Russian energy, while South Korea is reluctant to become dependent on the North for its supply. 

Pyongyang wants Russia to balance China’s growing influence but appears to recognise that Moscow will never provide the level of support it once did. The North has been keen to discuss economic cooperation but has lacked the political will to reform its economy sufficiently for foreign investment, even from a country as inured to corruption and government interference as Russia. It is equally interested in technical and scientific aid. Russian technology, equipment, and “know-how” have featured prominently in the history of both Koreas, and Pyongyang still seeks to resolve its economic problems by scientific and technical solutions. But there is unlikely to be much growth in bilateral cooperation unless the nuclear crisis is resolved peacefully, and the North opens its economy. 

This briefing completes Crisis Group’s series on the relationships between North Korea and those of its neighbours – China, South Korea, Japan and Russia – involved in the six-party nuclear talks. It examines Russia’s aims and ambitions in the region, as well as the responses from North Korea and is based on both interviews in Russia, Central Asia and South Korea and analysis of Russian and North Korean statements.

Asia Times
Ting-I Tsai
12/5/2007

The likelihood that North Korea’s nuclear disarmament will be completed just a year after Pyongyang announced that it had tested a nuclear bomb has been widely welcomed around the world, with the exception, perhaps, of China.

There are increasing concerns among Chinese academics that Pyongyang’s actions are hurting Chinese interests. Last October’s nuclear test not only unmasked the contradictions of a relationship frequently described as being “as close as lips and teeth”. It may have led to a further downturn in bilateral ties.

As the host nation of the Six Party Talks and once North Korea’s closest ally, China has reacted to the prospects for disarmament in a decidedly cool manner, with its North Korea experts debating how Pyongyang will harm China’s interests.

“There is no doubt that Pyongyang will create conflicts between China and the United States once it improves its relationship with Washington,” said Zhang Liangui, professor of international strategic research at the Central Party School in Beijing. He predicted that it was only a matter of time before Pyongyang took revenge on Beijing for China’s vote to impose sanctions on North Korea at the United Nations last October.

Zhang Yushan, researcher at the Jilin Academy of Social Sciences, however, doubts that North Korea could develop a close relationship with the US in the upcoming months.

After a year of dialog, North Korea agreed in October to shut its main nuclear reactor and provide detailed descriptions of all its nuclear programs by the end of the year. Furthermore, it has pledged not to transfer nuclear materials, technology or knowledge to other countries. Pyongyang fulfilled one of those promises in July by shutting down the reactor in Yongbyon. It has yet to make any substantial moves toward providing a description of its nuclear programs.

Chinese academics who question whether North Korea’s pledges to completely abandon its nuclear program are sincere also worry about Washington’s lack of determination to shape a nuclear-free Korean Peninsula after having received Pyongyang’s assurance that it would not transfer nuclear materials, technology or knowledge to other countries.

“China has always seen North Korea’s nuclear weapon issue as the Americans’ problem and has never adopted any strategic plan for itself in the Six Party Talks, which have led to where we are now,” said Jin Linbo, a research professor at the Beijing-based China Institute of International Studies. Jin argued that Beijing might have gained nothing but a security threat from its neighbor by hosting the talks.

What has particularly frustrated Beijing has been North Korea’s selfish neglect of China’s interests. The Central Party School’s Zhang noted that the latest developments have led some Chinese academics who originally had sympathies for North Korea to change their attitudes.

“Some of them have started to argue that North Korea is outrageous,” Zhang said.

Scoot Snyder, senior associate at the Washington based Asia Foundation, noted that North Korea’s traditional strategy is to play larger parties against each other; having found their country over-reliant on China for critical inputs, North Korean leaders would certainly like to stimulate a competition between China and the United States and South Korea to see who can most effectively win influence in Pyongyang. He pointed out in particular that DPRK negotiator Kim Kye-gwan’s public criticism of the United States for relying too much on China to carry out its Korea policy, US negotiator Christopher Hill’s sudden visit to Pyongyang without passing through Beijing, and the “three- or four-party” phrase in the inter-Korean summit declaration had all caused speculation and concern in Beijing.

In a study titled, “How North Korea threatens China’s interests“, conducted by Gregory Moore, assistant professor of political science at the St. Petersburg, Florida-based Eckerd College, the start of the decline in PRC–DPRK amity coincided quite closely with the rise of Kim Jong-Il in the late 1980s and the early 1990s. It was sealed with the passing of Kim Il-Sung in 1994, and contact between Beijing and Pyongyang broke down almost completely between 1994 and 1999.

Kim Jung-il, Moore suggested in his study, revealed his willingness to affront China in 1990-91 by conducting a dialog with China’s rival Taiwan and making a deal in which Pyongyang would have been paid to accept Taiwan’s nuclear waste. He played the same “Taipei card” again in 1996 when Beijing offered one-tenth of the grain that Pyongyang had asked for. In 1997, North Korea again opened discussions with Taiwan on direct flights between the island’s capital of Taipei and Pyongyang after another quarrel with China. At the time, Chinese agricultural experts publicly encouraged Pyongyang to adopt Chinese-style reforms, which led Pyongyang to call Deng Xiaoping a traitor to socialism. That jibe prompted Beijing to mull cutting off food aid to North Korea.

Other factors have also caused the relationship to sour. North Korea’s admission to US diplomat James Kelly in October 2002 that it was indeed pursuing a uranium enrichment program, its plan to establish the free trade zone and gambling city of Sinuiju, its counterfeiting of US$100 bills and Chinese currency, and China’s cutting off of an oil pipeline and deploying troops to the border in 2003 have all caused friction. In addition, rumors have surfaced that Pyongyang’s Chinese-built Taen Friendship Glass Factory resulted from Kim Jung-il’s flirtation with the “Taipei card”.

According to a Pyongyang-based foreign diplomat, bilateral relations “are mainly close in commercial and economic matters, especially with neighboring Liaoning province” in China. Bilateral trade in the first three quarters of 2007 reached US$1.44 billion, representing 16.6 growth year-on-year. The Chinese are reportedly operating three major coal mining sites in North Korea, although related government agencies in Pyongyang have denied this.

It remains to be seen how Pyongyang will handle its relationship with China. But both governments have made efforts to demonstrate their friendship.

On November 26, Liu Xiaoming, China’s ambassador to the DPRK, delivered a speech to students at Kim Il-sung University in Pyongyang, sharing the success of the Chinese Communist Party’s 17th congress, the significant accomplishments of its 29-year-long period of liberalization and reform, and China’s appreciation of its historical friendship with North Korea. The speech, which the embassy described as “a new page in the bilateral friendship”, came shortly after the visit of Liu Yunshan, member of the Secretariat of the Communist Party of China’s Central Committee and head of the Publicity Department of the CPC Central Committee, to Pyongyang on October 29. In July, Chinese Minister of Foreign Affairs Yang Jiechi made North Korea the first nation he visited after taking office.

In return, Pyongyang authorities issued a series of stamps featuring the 2008 Beijing Olympics in mid-November, and Kim Jung-il paid a visit to China’s embassy on the occasion of the Chinese lantern-festival holiday Yuan Xiao Jie.

In the eyes of South Korea, which has aggressively sought to improve its ties with the North, ties between China and North Korea remain unquestionably close.

Haksoon Paik, senior fellow at the Seoul-based Sejong Institute, argued that the US-PRC relationship is the key factor shaping East Asian international politics, and North Korea has simply “tried to just find some breathing space in between”.

Having dealt with North Koreans for more than a half-century, Chinese academics are now preparing for North Korea’s eventual tilt away from Beijing because of the landscape change in East Asian politics.

“For the upcoming decade, the relationships among the six-party-talk members will put the US, Japan and North Korea on one side, and China, South Korea and Russia on the other,” predicted a Chinese expert on North Korea, who spoke under the condition of anonymity.

Korea Times
Lee Hyo-sik
11/29/2007

The government has decided to finance training programs next year to educate North Korean officials and scholars about the free market economy as part of efforts to smoothly implement planned cross-border business projects.

According to the Ministry of Finance and Economy Thursday, the government has set aside 300 million won ($322,000) in next year’s budget to financially support education programs through which North Korean officials can learn about market economy principles and the financial market system.

The ministry is considering organizing a series of workshops for North Koreans to study how former communist countries, including China and Vietnam, opened their doors and successfully transformed into market economies.

It is also planning to arrange study tours to Europe to offer North Koreans opportunities to learn first hand about macroeconomic policies and the government’s role in advanced economies.

“It will be the first time for the government to help North Korean officials and scholars learn about market economic management and development experiences. If it bears fruit, we plan to expand the economic education program in the future to have more North Korean participants,” a ministry official said.

The government will not be directly involved in the training, and instead it will entrust the program to a private education institution, he said, expressing hope that the training will help government officials carry out scheduled inter-Korean business projects more smoothly with their northern counterparts.

During the second inter-Korean summit early October, President Roh Moo-hyun and North Korean leader Kim Jong-il agreed on a number of cross-border development projects, including the establishment of a special peace zone in the West Sea and operation of the inter-Korean railways.

On its own, the communist state has been dispatching a large number of government officials to Germany and other European nations over the past few years on economic training programs. The government estimated the number of North Korean officials visiting advanced economies in Europe totaled 220 in 2004, compared with 237 in 2003, 227 in 2002, 186 in 2001 and 158 in 2000.

Market Economy for NK
Korea Times
11/29/007

Seoul’s Program to Help Pyongyang Learn New System

The South Korean government plans to launch an education program next year to help North Korean officials and scholars learn about the market economy. It is the first time that Seoul has organized such a program. The plan followed recent developments in improving inter-Korean relations after the second South-North summit held in Pyongyang from Oct. 2-4.

According to the Ministry of Finance and Economy, a budget of 300 million won ($320,000) has been set aside for the 2008 program, which will include cross-border information sharing workshops and education on a transition to a market economy and how to adapt to the new system. The budget is only a small sum at this initial stage. But it could increase if the program produces tangible results.

We welcome the education program as it is expected to encourage the stalwart socialist country to shake off its aversion to the market economy system. And furthermore, the program could create a favorable atmosphere for North Korean policymakers and economists to usher in reform and an open door policy. It’s time for the North to realize that inter-Korean economic cooperation packages cannot succeed if it fails to introduce economic reform.

South Korean officials are well aware that it is still difficult to change the mindset of the North Korean leadership that sticks to the old ways of socialism. Regrettably, President Roh Moo-hyun was disappointed that North Korean leader Kim Jong-il and his inner circle refused to discuss reform and openness during the summit.

However, we have to be more patient with the hard-line North Korean regime and make more effort to persuade it into acknowledging the need to join many socialist countries in their effort to move toward a market economy. During the summit, President Roh agreed to build railroads, ports and other infrastructure in the North as well as an industrial park and a peace zone for inter-Korean cooperation. These development packages require huge investments from the South.

Such big-budget projects are expected to inject fresh air into the moribund North Korean economy. But they are not enough for the North to realize its ultimate goal of economic reconstruction. In addition to massive investment, the South will have to teach North Koreans how to do business, make money and become rich.

North Korea has recently shown interest in Vietnam. In October, a Hong Kong-based weekly reported that Kim Jong-il expressed the intention of following Vietnam’s reforms and openness during a meeting with Nong Duc Manh, secretary-general of the Vietnamese Communist Party. A delegation from the North led by Prime Minister Kim Yong-il visited Hanoi to learn about the “Doi Moi” reform policy.

The Seoul government plans to select a research institute that will take charge of the education program for the North. An official said candidate institutes might include the Chinese Academy of Social Sciences in Beijing. We hope the North will learn a lesson from Chinese or Vietnamese style reform to end its isolation, bring prosperity to its people and promote peace on the Korean Peninsula.