North Korean Economy Watch

From the Daily NK:

Computer Prices (Mar 14, 2006):
-17inch Pentium Ⅲ is US$110~120 retail ($90 wholesale price)
-A printer is US$65~70
-10 Floppy discs are 5,000W
-A keyboard is US$20
-A mouse is US$5

Snack prices (March 28, 2006)
-roast chicken is 6,500-8,000W
-roast duck is 9,000~12,000W
-750g of noodles are 2,400W
-box of Korean noodles is 6,750W
-1kg of potatoes is 400W
-1kg of Beans is 700W
-1kg of wheat flour is 750W (690W at wholesale price)
-400g of Milk is 5,000W
-1kg of Butter powder is 5,000W
-25g of Baking powder is 400W
-1kg of Chinese noodles of 2,000W
-1kg of dried cuttlefish is 8,800W.

Entertainment Costs (March 28, 2006)
-movie admission fee is 50W
-comic book is 1,500W, to borrow 100W
-Swimming pool is 70W
-bath admission fee is 2,500W
-5,000W ($1.67) /huor to use a Karaoke singing room
-1,000W ($0.33) /hour to use a computer in an internet café

Other Prices
–sanitary napkin is 500W, 600w, and 1,000w
-Skin lotions of three kinds are 42,000w
-Aloe cosmetics of three kinds are 42,000w
-A set of cosmetics (a skin cream and a skin lotion) is 10,000w (made in South Korea), 3,500w (made in China)
-Small gas cooking stove is 27,000w (made in South Korea / 25,000w in a wholesale price
-An electric bicycle is 150-200w.

North Korean inflation has increased following consecutively excessive issues of the 500W, 1,000W, and 5,000W notes.

Cities that can provide North Koreans with leisure facilities to enjoy are only Pyongyang, Shinuiju, Chongin, Hamhung, and Rasun. These cities possess big theaters, amusement parks, and swimming pools. Especially Shinuiju, which is close to China, has been introduced with foreign cultures and commodities very quickly. Shinuiju residents are also in the highest economic class of the North Koreans. Thus, Shinuiju has internet cafes, singing rooms, saunas, massage rooms, and comic bookstores.

The investigation was carried out by traders visiting Shinuiju in March and attaining the price levels concerned and then DailyNK gathered the information and cross-examined it.

Also, another trader emphasized that, “The official wage of North Korean workers is about 3,000 won. At the same time, the price for using a singing room per hour is 5,000 won. It shows how badly North Korea has been transformed,” adding that, “Shinuiju is the city where traders doing business with big money from North Korea and China gather. Such singing rooms, PC rooms, and saunas are just for them.”

Items marked by dollars in the price index below are usually paid in dollars, not North Korean won. A Chinese businessman who participated in the price investigation informed us that, “Currently in North Korea, the dollar is used frequently enough to be called ‘common currency’ and has more exchange value,” adding, “As trading costly articles, their paying in dollars makes them win credits.” He also said that, “That the dollar is exchanged into North Korea won is welcomed, yet to exchange the won into dollars is often impossible, even double the value.”

Now, in the early of April, the exchange rate of the dollar in North Korean black markets is roughly 3,000 won against the dollar.

From the Australian:

Myanmar has decided to restore diplomatic ties with North Korea, more than 20 years after the DPRK staged a deadly bomb attack in Rangoon.

The diplomat said no official announcement had been made and an announcement might come only when the Myanmar junta names its ambassador to Pyongyang.

Analysts said the restoration of ties between two of the world’s most secretive regimes could have benefits for both.  Burma is looking for arms suppliers to circumvent Western sanctions, while North Korea has eyed Burma’s offshore natural gas reserves.

“They want to get military equipment from North Korea because under western pressure they cannot get weapons from the West,” said Win Min, a Burmese military researcher based in Thailand.

“Now they can get (weapons) from China and they are trading with India. So the more places they can get weapons, the better for them,” he said.

The United States considers both Burma and North Korea as “outposts of tyranny”, which gives them some shared goals in working around US foreign policy, the analyst said.

“Pyongyang, which the military regime admires for its defiant attitude against the United States, can surely become a diplomatic asset,” he said.

Burma broke off diplomatic ties with North Korea in 1983 after it masterminded an attempt to assassinate South Korea’s then-president Chun Doo Hwan while he was on an official visit to Rangoon.  North Korea staged a bomb attack on Chun’s delegation as they visited the Martyr’s Mausoleum, near the famous Shwedagon pagoda, on October 9, 1983.  Chun survived the attack but the blast killed 17 of his entourage, including four cabinet ministers, while 17 others were injured. Four Burmese officials also died in the blast.

Two of the North Korean bombers were captured and one of them is still serving a life sentence in Burma’s notorious Insein prison.

From the Asia Times: 

The only currency used in the complex is the US dollar.

No foreign investors have yet signed up for the zone

Washington requires high-tech products destined for North Korea that include US intellectual property to undergo stringent export controls. This has irritated many in the South – particularly after the process delayed the transfer of telecommunications equipment. It also appears highly unlikely that Kaesong-built products will be included in a free-trade agreement between Seoul and Washington that is under negotiation.

Officials of the complex say they have assisted local villagers with heating briquettes and rice, but there is otherwise neither trade nor contact across the fence, indicating that the experience of capitalism is strictly insulated. This assumption is buttressed by relations inside the complex: despite talk of inter-Korean fraternity, social contact between Northern and Southern workers is non-existent.

While the railways between the two Koreas were reconnected in early 2004, theoretically linking Seoul and Sinuiju on North Korea’s Chinese border, it is uncertain when trains will start to run through Kaesong.

“There will be talks on opening the line in July, but it is not certain,” said a South Korean official at Dorasan Station, a giant steel-and-glass edifice on the southern side of the border. The lack of rail transport complicates his firm’s logistics costs, said Stafild’s Moon, whose head office is on the south coast of the peninsula, in Busan.
 

From the Daily NK:

The deputy director of Yanbian Korean Autonomous Prefecture in Jilin Province recently said he plans to “establish permanent trade relation with North Korea and pursue multinational tourism projects which connects China-North Korea-Russia through Tumen River Area Development Project”. He also said, “the government of Yanbian Korean Autonomous Prefecture will more actively pursue cooperation with North Korea during the 11th Five-Year Plan(2006~2010)”.

The Korean Autonomous Prefecture decided to establish 2 level highway between Rajin, North Korea and Yuanzheng maritime customs, Hunchun, China and to reconstruct the tailway between Rajin and Onsung in North Hamkyung Province.

Lee Yong Nam at Department of Trade in North Korea said, “economic trade between North Korea-China is improving with the attention of leaders in each country. Intimate economic cooperation will be maintained by all means possible”.

China gained exclusive right to use and develop Rajin port in North Korea, as compensation for establishment of high way in Wonjung-Rajin in North Hamkyung Province. China was excused from all the custom formalities of labor and equipments related to the establishment and development of highway and port, from which they saved 4 million Yuan per year.

Through the trading zone between North Korea-China in Tumen River area, China plans to export food, fertilizers, electronics, textile, plastic goods, cigarrete, mechanical devices. Yanbian Korean Autonomous Prefecture had 11 million 430 thousand dollars trade surplus from trade with North Korea in the first half of last year. A government official at the local government said, “trade surplus will increase drastically when the trading zone between North Korea- China is established” with excitement.

From Chosun Ilbo:

U.S. Treasury Department Under Secretary Stuart Levy said its ongoing financial sanctions against North Korea put “huge pressure” on the regime that could have a “snowballing … avalanche effect.  

Washington identified Macao-based Banco Delta Asia as Pyongyang’s “primary money-laundering concern” last September. since then the bank has folded.  According to Newsweek, “In today’s interconnected financial world, an official U.S. move to blacklist a foreign bank would be the kiss of death, since any financial institution doing business in dollars needs to hold accounts in correspondent U.S. banks in order to complete transactions.” Washington believes it has finally found a strategy that is putting real pressure on the regime — going after its sources of cash, all across the world.

Kim Jong il is reported to have told Chinese President Hu Jintao during a visit to China in January that his regime might collapse due to the U.S. crackdown on its financial transactions. [but this could be a bargaining chip to use aginast China…help us, or the US gets the peninsula].

“Numerous U.S. government agencies, including the FBI, Treasury, State Department and CIA, have been working for three years to curtail Pyongyang’s vast network of black-market activities” and “to cut off the financial conduits by which the proceeds are laundered.”

North Korea complains the sanctions imposed by the U.S. made its legitimate financial transactions impossible, and is boycotting six-party talks on its nuclear program as a result.

Foreign Trade Bank of Korea
FTB Building, Jungsong dong, Central District, Pyongyang, North Korea
Phone: +850 2 18111
Fax: +850 2 3814467

Dae-Dong Credit Bank  
Ansan-dong BoTongGang Hotel, Pyongchon, Pyongyang, North Korea
Phone: +850 2 3814866
Fax: +850 2 3814723
 
Credit Bank of Korea  
Chongryu 1-Dong, Munsu Street, Otan-dong, Central District, Pyongyang, North Korea 
Phone: +850 2 3818285
Fax: +850 2 3817806

Woori Bank  
Busok-Dong 1st Floor 101 Gaesunggongdan, Bondong-Ri, Gaesung City, Hwanghae-Do, North Korea
Phone: +8 850 9118
Fax: +8 850 9119

The International Industrial Development Bank  
Jongpyong-dong, Pyong chon District, Pyongyang, North Korea
Phone: +850 2 3818610
Fax: +850 2 3814427

Korea Daesong Bank  
Segori-dong, Gyongheung Street, Pyongyang, North Korea
Phone: +850 2 818221
Fax: +850 2 814576
 
Korea Daesong Bank  
Segori-dong, Gyongheung Street, Pyongyang, North Korea
Phone: +850 2 818221
Fax: +850 2 814576

Changgwang Credit Bank  
Saemaeul-1 Dong, Pyongchon District, Pyongyang, Korea (North)
Phone: +850 2 18111999 ext
Fax: +850 2 3814793

Bank of East Land  
BEL Building, Jonseung-Dong, Pyongyang, Korea (North)
Phone: +850 2 18111
Fax: +850 2 3814410

Korea Joint Bank  
Ryugyong 1 dong, Pothonggang District, Pyongyang, Korea (North)
Phone: +850 2 3818151
Fax: +850 2 3814410

Central Bank of Korea
58-1 Mansu-dong, Sungri str, Central District, Pyongyang, Korea (North)
Phone: +850 2 18111 Ext: 81
Fax: +850 2 3814624

This story from the Daily NK has an update on whats happening at Raijin as well as a history of the area:

Read whole story here:

In December 1991, Rajin and Seunbong cities were declared “Free Trade Economic Regions”, Rajin Port was planned to be expanded according to a 3-stage development scheme. The first stage consisted of infrastructure construction such as railroads, roads, and ports.  In the ten years since, the budgetary outlays have been insufficient.

In 1996, the Committee for Promoting NK Foreign Economic Cooperation published a report, “Reality and Outlook for Rajin- Sunbong Free Trade Economic Regions.” According to the report, the Rajin Port should first build capacity for large-sized containers.  In stage two, its loading-handling capacity should be improved from 300 million tons to 1,700 million tons.  The third stage, beginning in 2010, the port should have the capacity to manage 100 million tons.

From the Seould Times:  

Working conditions for North Korean workers in the Kaesong Industrial Park have been well publicized.  What is less known is that North Koreans are working all over the world in isolated conditions to earn hard currency for their governent.

Experts estimate that there are 10,000 to 15,000 North Koreans working abroad in behalf of their government in jobs ranging from nursing to construction work. In addition to the Czech Republic, North Korea has sent workers to Russia, Libya, Bulgaria, Saudi Arabia and Angola, defectors say.

Almost the entire monthly salary of each of the women here, about $260, the Czech minimum wage, is deposited directly into an account controlled by the North Korean government, which gives the workers only a fraction of the money.

To the extent that they are allowed outside, they go only in groups. Often they are accompanied by a guard from the North Korean Embassy who is referred to as their “interpreter.” They live under strict surveillance in dormitories with photographs of North Korea’s late founder Kim Il Sung and current leader Kim Jong Il gracing the walls. Their only entertainment is propaganda films and newspapers sent from North Korea, and occasional exercise in the yard outside.

Kim Tae San, a former official of the North Korean Embassy in Prague, helped set up the factories in 1998 and served as president of one of the shoe factories until he defected to South Korea in 2002.

It also was Kim’s job to collect the salaries and distribute the money to workers. He said 55% was taken off the top as a “voluntary” contribution to the cause of the socialist revolution. The women had to buy and cook their own food. Additional sums were deducted for accommodation, transportation and such extras as flowers for the birthdays of Kim Il Sung and Kim Jong Il.

The women even had to pay for the propaganda films they were forced to watch. By the time all the deductions were made, each received between $20 and $30 a month. They spent less than $10 of it on food, buying only the cheapest local macaroni.

“They try to save money by not eating,” said Kim, the former embassy official. He says that his wife, who accompanied him on visits to the factory, was concerned that women’s menstruation stopped, their breasts shriveled and many experienced acute constipation. “We were always trying to get them to spend more on food, but they were desperate to bring money home to their families.”

Czech officials say the North Koreans are model workers.

“They are so quiet you would hardly know they are here,” said Zdenek Belohlavek, labor division director for the district of Beroun, which encompasses Zelezna and Zebrak, a larger town where about 75 North Korean seamstresses stitch underwear.

Belohlavek displayed a thick dossier of photos and vital statistics of the women, most of whom were born between 1979 and 1981. All their paperwork is in perfect order, and the factories appear to be in full compliance with the law, he said.
 

Australia Broadcasting Corporation (Reuters)
3/29/2006

North Korea hinted at seeking compensation from Australia for seizing and sinking the Pong Su, that was used to transport drugs, according to a state media report.

Last week, two Australian fighter jets bombed and sank the impounded North Korean cargo ship in what Foreign Minister Alexander Downer said was a strong message to Pyongyang about its suspected involvement in drug running.

The official KCNA news agency cited a relatively obscure pro-North Korean group as saying Australia needs to compensate North Korea.

“The Australian authorities should make an honest apology to it according to the results of the trial and compensate to the ship and its crewmen for the human, material and mental damage done to them,” KCNA reported the Federation of Koreans in the United States as saying in a commentary.

There was no official demand for compensation from North Korea but analysts have noted that since the government controls the media, it only permits approved comments to appear.

The 4,000-tonne ship the Pong Su had been impounded since 2003, when it led the Australian navy on a 1,100 kilometre chase off the south-eastern coast after being spotted unloading part of a 150 kilogram shipment of heroin at a secluded beach.

Eight crew members were charged with drug smuggling.

The captain and three officers were sent back to North Korea earlier this month after being found not guilty of aiding the drug operation. Four other men have been found guilty of drugs charges relate to the case.

The United States has said it suspects North Korea of engaging in illicit activities such as counterfeiting and drug trafficking as a way to secure funds for its anaemic economy.

From the Washington Times:

South Korea plans to open a job training center in the North to improve the skills of North Koreans who work in South Korean-owned companies. 

The training center, to open in June, each year will offer training in 13 areas of work to 4,000 employees of midsized companies, the state-funded Human Resources Development Service of Korea said in a statement.

“The center will conduct job training and supply a quality workforce to our companies which will move in the Kaesong Industrial Complex,” it said.

South Korea’s government has allocated $16.4 million to construct the training center in the industrial zone, The Korea Herald reported Thursday. 

Currently, 11 South Korean companies employ 6,000 North Korean workers and 600 South Korean workers in the zone, according to the Ministry of Labor.

The ministry expects that some 300 firms will eventually recruit 90,000 North Korean workers when the first-stage development of the inter-Korean complex is completed in 2007, the newspaper reported.