Archive for the ‘International trade’ Category

Russia wants sanctions on North Korea to ease

Thursday, September 27th, 2018

Benjamin Katzeff Silberstein

I don’t think we have systematic, rigid data enough to prove that Russian sanctions implementation overall on North Korea has eased even though the Russian government’s line on easing international sanctions has gone on consistently for months. But still, it’s only logical that a government working for sanctions pressure to ease would at the very least make sanctions implementation oversight and rigor less of a priority. Wall Street Journal:

Mr. Pompeo used his opening address to swipe at permanent Security Council members Russia and China for violating U.N. sanctions involving the sale of petroleum products in excess of North Korea’s maximum 500,000-barrel allowance and for providing other forms of economic relief.

“The members of this Council must set the example on that effort, and we must all hold each other accountable,” Mr. Pompeo said, calling for an end of ship-to-ship transfers of petroleum products, linked to Chinese and Russian entities, and a halt to hosting of North Korean laborers, a reference to the thousands of workers who have been granted permission to work in Russia.

“This violates the spirit and the letter of the Security Council resolutions that we all agreed to uphold,” he told the Council.

Mr. Lavrov used his address to bash the U.S. and its allies for exerting excessive pressure on North Korea, saying it was unacceptable for sanctions to be used as a form of “collective punishment.”

Mr. Lavrov defended North Korea’s call for economic relief, saying Pyongyang has taken meaningful steps toward implementing its promise to give up its nuclear weapons and urged the U.N. Security Council to send a “positive signal” in return.

“Negotiations are a two-way street,” Mr. Lavrov said, adding that Russia would draft a proposal to allow certain economic projects in North Korea to be exempt from sanctions.

Mr. Lavrov said such projects would be in the interest of all parties and would ease the “extreme socioeconomic and humanitarian suffering” caused by the sweeping sanctions regime currently in place. He also took aim at the U.S. for implementing secondary sanctions, which he described as “illicit practices” that undermine the sovereignty of other nations.

It’ll be interesting to see what these economic projects are specifically. My bet is on infrastructure and railway renovations and possibly new construction,  or perhaps ones centering around the Rason port and special economic zone.

Full article:
Russia’s Lavrov Calls for U.N. to Ease North Korea Sanctions
Jessica Donati
Wall Street Journal
2018-09-27

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The economic side of the Moon-Kim summit

Friday, September 21st, 2018

By Benjamin Katzeff Silberstein

The economic aspect has been continuously front-and-center throughout the Moon-Kim summit in Pyongyang (September 19–20). From a diplomatic standpoint, this is not all that surprising. Moon and Kim are pursuing what appears to be a rather classical Sunshine 2.0 pattern, with roughly the same contents as the predecessor. As Yonhap reports:

Earlier in the day, the leaders of South and North Korea agreed to work together for balanced economic development on the Korean Peninsula.

South Korean President Moon Jae-in and North Korean leader Kim Jong-un agreed to break ground on a joint project to connect railways and roads across their border this year and vowed diverse cooperative projects to deepen their friendly ties and foster a reconciliatory mood.

The agreements were reached during summit talks held in Pyongyang between Moon and Kim.

“We will prepare for (inter-Korean economic cooperation) in a calm and orderly manner,” Finance Minister Kim Dong-yeon said in a meeting with reporters here.

“But inter-Korean economic projects can gather speed if circumstances improve,” he said.

The minister said any inter-Korean economic projects should need support from the international community, and there are still many things to be done in advance.

The latest agreement came months after the leaders reached a deal during their April summit to modernize and eventually connect rail and road systems across their divided border.

Field surveys have been carried out to examine the state of some sections of the North’s rail and road networks, but the process has not moved fast enough, apparently due to stringent sanctions imposed on the North for its nuclear program.

Railways and infrastructure are both less politically touchy than outright trade, and potentially mutually beneficial, even though the south will carry the economic burden:

“The South and the North agreed to explore practical measures aimed at increasing exchange and cooperation and seeking balanced development,” read a joint statement they signed after the summit.

“The two agreed to hold a ground-breaking ceremony this year for connecting railways and roads running along their eastern and western coasts,” it also stated.

The decision came months after the leaders reached a deal during their April summit to modernize and eventually connect rail and road systems across their divided border. The Seoul government has set aside nearly 300 billion won for next year to carry out those projects.

Field surveys have been carried out to examine the state of some sections of the North’s rail and road networks, but the process has not been fast enough, apparently because of global sanctions on the North.

The second point of the Pyongyang Declaration promises more economic cooperation for “balanced” growth, and vows to reopen projects such as the Kumgangsan tourism zone, and the Kaesong Industrial Park, according to Moon, “when conditions allow“. Here’s an English-language full-text version of the declaration. A particularly interesting but understudied point is 2.3, on ecological cooperation.

Kim Jong-un’s forestry interest has been a recurring theme throughout his tenure, and as this blog has covered, he’s spoken about the problems associated with excessive tree-felling – the root cause of which is North Korea’s planning failures of the 1990s – in more honest terms than his father did. At the very least, there’s been strong hints of both pragmatism and understanding of North Korea’s structural problems in the way that Kim has talked about the forestry issue (and many others too for that matter). Indeed, the Korea Forest Service chief accompanied Moon to Pyongyang, and he hopes to get to work soon following the summit:

“Forests surrounding populous urban areas were heavily destroyed, but forests in less populated regions were well-preserved,” Kim Jae-hyun said in a meeting with reporters at a government complex in Daejeon. “I saw enough hope.”

He was speaking after accompanying South Korean President Moon Jae-in’s visit to North Korea from Tuesday to Thursday.

As the first step, Kim said the Korea Forest Service will explore ways to create tree nurseries in much-destroyed regions.

“The North Korean side wants large-scale tree nurseries, but it would be more practical to start with small nurseries in regions suffering from deforestation the most,” he said.

In regard to disease and insect control efforts, the official said the use of machinery could be limited as the North is under U.N. sanctions for its missile and nuclear tests, while pesticides are allowed.

“I think (the disease and insect control measures) should start immediately to build trust between the two Koreas,” he said.

The forest expert said his North Korea visit as part of the official entourage showed Moon’s “willingness” to pursue inter-Korean cooperation in the forest sector.

“Looking down from an airplane along the western coastline, North Korea’s forests were very impressive,” Kim said. “There were few trees on hills near Pyongyang, while trees were well-maintained on the way from Sunan Airport to Baekhwawon guesthouse.”

Mountains near Yalu River on the North Korean border with China were denuded, but Mount Paekdu showed off all colors of beautiful trees, he said.

Moon and Kim aren’t the only ones who have talked about economic cooperation. The mayor for Busan, South Korea’s second most populated city, for example, has announced projects that his city will spearhead. Yonhap again:

Busan’s envisioned projects, unveiled in time for President Moon Jae-in’s historic visit to North Korea, call for boosting the city’s cooperation with the North in the fields of fisheries trade and processing, modernization of fishing vessels and equipment, shipbuilding, exhibitions and conventions and smart city technology, the city said.

The city will push to invite North Korean filmmakers and actors to the Busan International Film Festival and hold an inter-Korean film festival.

Nikkei Asian Review also reports that the Moon government has put pressure on Samsung and its head, Lee Jae-yong, to present a large-scale investment plan for North Korea. Samsung has manufactured TV:s in North Korea before, but this time around, the company hasn’t appeared as eager as its other chaebol-counterparts to draft up implementable blueprints for investments up north. Politically, it makes sense. Samsung’s PR hasn’t exactly been superb as of late, with the arrest and later release from prison of its CEO relating to corruption charges tied to the Choi Soon-sil/Park Geun-hye-scandal.

South Korea’s main steelmaker Posco is also hoping for opportunities following the summit:

The executive was part of the business delegation that accompanied President Moon Jae-in on his trip to North Korea earlier this week. Choi and other businessmen discussed various inter-Korean economic cooperation projects that can be pursued going forward if conditions are right.

“It will be a big opportunity not only for POSCO but for the steel industry as a whole,” Choi said. “I think POSCO will be able to find chances for growth.”

The company recently created a new task force to prepare for potential business opportunities in North Korea. POSCO Daewoo, POSCO Engineering & Construction Co. and POSCO Chemtech Co. are participating in the task force.

The steelmaker said it wants to play a key role in railroad and other infrastructure projects in line with the changes in the geopolitical environment in Northeast Asia.

My five cents on what all this entails for the North Korean economy:

Of course, as of yet, nothing. Most of the plans and visions are routinely accompanied by the caveat “when conditions allow”. The infrastructure plans may be able to go ahead even with sanctions in place, at least the rhetoric from the Moon administration, and the timetable for breaking ground on the railway connections before this year is over, seems to suggest so. I’m no expert on the judicial side of the sanctions, but it’s hard to imagine that this will be fully uncontroversial from that standpoint.

In any case, North Korea is in dire need of infrastructure improvements and if they are extensive enough, they should hopefully not just connect South and North Korea with Russia and China for cheaper freight, but also make domestic goods transportation simpler and more efficient, with positive impacts for the markets and private manufacturing in the country.

On re-opening Kaesong, things are a bit more complicated. In its nature, Kaesong is a manufacturing zone mostly cut off from the rest of North Korea. Sure, the incomes of the workers did enter the North Korean economy, and arguably, the fact that South Korean consumer goods could to some extent enter North Korean markets through Kaesong spurred competition for more high-quality goods on the North Korean market as well. But Kaesong is hardly the only, and perhaps not even the main route through which such products enter the country. These are also pretty weak arguments when you look at the entire economic picture.

The problem with Kaesong isn’t so much what it was/is/will be, but the missed opportunities. The hope with special economic zones tends to be that institutional frameworks that are tried there first can later spill over into the rest of the country. In the case of North Korea, the arrangement made pretty sure that that didn’t happen, at least from what we can tell. Had inputs been sourced from North Korea, that could also have spurred wider economic growth, at least in some regions. In theory, there are lots of opportunities for synergy and cooperation between South Korean companies and smaller North Korean ones, not just the state. If the goal is economic development in North Korea more broadly, and not just economic profit on the southern side and incomes for the north, there are lots of models that carry far greater potential.

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WSJ on the holes in the sanctions regime against N Korea

Saturday, September 15th, 2018

Benjamin Katzeff Silberstein

WSJ:

The still-confidential report, prepared by a U.N. panel that monitors sanctions compliance, says North Korea has been caught selling arms to Syria, Yemen, Libya and other conflict zones around the world. The U.N. investigators found a massive rise in fuel imports through transfers involving Russian and Chinese ships. The report also cited numerous examples of coal shipments from North Korea to China that were structured to avoid surveillance.

The illegal trade is weakening U.S. efforts to pressure the regime to abandon its nuclear program, the panel says, citing intelligence reports.

“These violations render the latest U.N. sanctions ineffective by flouting the caps on the [North Korea’s] import of petroleum products and crude oil as well as the coal ban imposed in 2017,” the U.N. experts warned in the report, which was reviewed by The Wall Street Journal.

[…]

The U.N. panel’s findings are the latest indication that North Korea continues to engage in banned activities even as it engages in these diplomatic efforts.

The Wall Street Journal reported this week about a group of North Korean operatives in China using U.S. social media to pursue online schemes benefiting the regime. Also this week, the Journal reported North Korean ships had brought in 89 illicit cargoes of fuel in the first five months of the year obtained via ship to ship transfers primarily with Chinese or Russian counterparts.

[…]

The U.N. called out Chinese companies for buying tens of millions of dollars worth of North Korean iron, steel, textiles, food and other products, though Beijing disputed the figures. Citing official trade data, the U.N. said China bought more than $100 million in textiles from North Korea the last three months of 2017, $95 million more than Beijing reported directly to the panel. China disputes the U.N.-reported figures.

The U.N. panel also said it found more than 200 Chinese joint ventures with North Korea, collaboration banned last year by the Security Council. According to a U.S. Treasury Department advisory published in July, those companies conduct a vast array of business including software development, construction and aquaculture.

In Russia, which has also been criticized for what U.S. and U.N. officials say is lax sanctions enforcement, investigators found 39 joint ventures.

North Korean financial agents also continue to operate in Russia and China, the U.N. report said, despite the mandate to expel any bank representatives. Establishing and managing bank accounts allows North Korea to collect the illicit revenues generated overseas. When accounts were closed in the European Union, North Korea operatives simply transferred the funds to others in Asia, the U.N. report says.

Full article/source:

U.N. Cites New Evidence That North Korea Is Violating Sanctions

Ian Talley
Wall Street Journal
2018-09-15

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Dollar exchange rate on North Korean markets at high-point

Wednesday, September 5th, 2018

By Benjamin Katzeff Silberstein

One of the more puzzling issues through the “maximum pressure”-period and harsh Chinese implementation of international sanctions on North Korea has been the lack fo significant changes in the market exchange rate between the won and the dollar. For a number of apparent reasons – lack of inflow of hard currency being the most significant one, as North Korea’s exports have dwindled – we should have logically seen the exchange rate appreciating, and the dollar becoming more expensive. This largely hasn’t happened.

The won is still remarkably stabile, but over the past few weeks, it’s gone up to higher levels than at any point through 2017 and 2018. An average of the three cities reported in Daily NK’s four most recent observations show that the dollar trades for an average of about 8237 won, the highest observation that I can find in my dataset (based on Daily NK price reports) since the summer of 2016.

Won for US-dollars at market rates, 2017–September 2018. Data source: Daily NK. Graph: NK Econ Watch.

It’s doubtful whether this suggests any significant change in market conditions. Currencies, after all, fluctuate, and this change isn’t all that great. The won is up by less than 200 since the previous observation, from 8041 on July 31st. That’s not a massive change, or beyond the scope of normal currency fluctuations. In a bigger-picture perspective, things still look remarkably stabile, as the graph below shows. Looking at the won-USD-exchange rate since 2009, it’s still very much hovering around 8000, perhaps and highly speculatively a currency peg the North Korean government has chosen, and is able to keep up through means that remain unknown.

Won for USD-rates on the markets, 2009–September 2018. Data source: Daily NK. Graph: NK Econ Watch.

Still, a number of things may be happening here. The most obvious factor to consider is whether the current stall between the US and North Korea in negotiations is causing people to hoard dollars, anticipating further restrictions in trade and currency inflow. Off the top of my head, this seems unlikely. If the won-USD-market exchange rate didn’t move much when North Korea was being slapped with sanctions against all of its crucial export goods, I doubt that a lack of diplomatic movement could move the exchange rate to higher levels than during, say, the summer and fall of 2017, when tensions were really ramping up.

It is more likely that domestic conditions are behind the increase. For example, border controls on trade and smuggling reportedly tightened on the Chinese side around mid-August. On the North Korean side of the border, too, news reports indicate that security has tightened as the 9th of September approaches, North Korea’s 70th founding anniversary. It’s also possible that the government’s generally increased demand for resources around the holiday has impacted the currency market.

Alone, this increase says little. Should the USD consistently keep appreciating on the markets, however, that would suggest more serious and prolonged difficulties for border trade and economic conditions overall.

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Electricity supply in Pyongyang keeps getting better as sanctions drag on

Wednesday, September 5th, 2018

By Benjamin Katzeff Silberstein

As North Korea’s economically crucial minerals exports are massively down (coal exports by over 70% in 2017 as compared with 2013, for example), some in the country see positive side effects. With coal not being exported, it is instead sent to the part of the country with the highest purchasing power after the previous exports recipients: Pyongyang, as the following article in Daily NK notes (as of now only in Korean, I believe). Electricity supply, indoor heating and warm water supply have all reportedly improved, at least in parts of the city, as a consequence.

This illustrates a crucial point on sanctions. They don’t hit all North Koreans equally, and whatever one may think of the efficiency and political justification of sanctions, the northeastern coal-producing regions are undoubtedly harder hit than the capital city. Daily NK:

최근 북중 접경지역으로 나온 평양의 한 주민은 5일 데일리NK와의 통화에서 “우리가(북한이) 여태까지 중국에 석탄을 수출하다보니 (화력)발전소를 제대로 못 돌렸었다”며 “하지만 이젠 동평양 화력발전소하고 평양(평천) 화력발전소에서 전기를 꽝꽝 만들어 평양으로 보내고 있다”고 전했다.

대한무역투자진흥공사(KOTRA)에 따르면 2017년 북한 광물 수출액은 대북제재가 본격적으로 시작되기 전인 2013년에 비해 64.7% 감소한 것으로 나타났다. 같은 기간 무연탄은 70.8% 감소한 것으로 조사됐다.

또한, 통계청에 따르면 북한의 화력발전 발전량은 2013년 이후 82억kWh에서 2016년 111억kWh로 37.9% 늘어난 것으로 나타났다. 2017년 북한 발전량에 대한 정확한 통계가 조사되지 않았지만 전반적인 발전량 상승 추이로 볼 때 2017년 북한 화력발전소 발전량도 상승했을 것으로 예측된다.

석탄의 내수용 전환과 전력 사정 개선은 난방 및 온수공급에도 영향을 미친 것으로 보인다.

평양의 대다수 가구는 열병합발전에 의한 난방으로 설계됐지만, 그동안 화력발전소들이 제대로 가동되지 않아 난방 문제는 항상 골칫거리였다. 그러나 최근 발전소 사정이 나아지면서 일부 세대에 난방이 공급되고 있는 것이다.

소식통은 “려명거리 같은 최근에 지어진 집들은 발전소 사정이 좀 나아져 온수 난방이 어느 정도 돌아가고 있다”고 말했다.

Full article:

Pyongyang resident: as sanctions stop coal exports, the electricity situation is improving [평양 주민 “석탄 수출길 막혔는데 전력 사정은 좋아져”]
Moon Dong-hui
Daily NK
2018-09-05

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Russia rejects new sanctions on North Korea

Friday, August 10th, 2018

Benjamin Katzeff Silberstein

Full comment here by the Russian Foreign Ministry:

Russia has blocked the US application to the UN Security Council Sanctions Committee on North Korea (1718) on introducing international sanctions against one individual and several legal entities, including the Russian commercial bank Agrosoyuz that are allegedly involved in illegal activities that are violating the sanctions regime against that country.

The US-presented evidence in support of this proposal is totally unconvincing.  We cannot accept the pressure exerted by the US delegation in the UN Security Council and its subsidiary bodies, which has already become a norm. By means of an artificially tightened deadline, it is trying to push through its own decisions without taking into account the opinion of the other members. The Americans are also obviously trying to use the prestige of UN Security Council Committee 1718 for justifying similar unilateral restrictions that they have just introduced under far-fetched pretexts.

Far from improving the atmosphere of Russia-US relations, the new US sanctions contradict the logic of easing tension around the DPRK. Clearly, Washington is trying to keep Pyongyang under maximum pressure as long as possible, in effect, up to the completion of the denuclearisation process. This policy is destructive for settling the issues of the Korean Peninsula and evokes extreme resentment.

Source:

Comment by the Information and Press Department on the US application to the UN Security Council Sanctions Committee on North Korea (1718) on expanding sanctions
Information and Press Department of the Ministry of Foreign Affairs of Russia
2018-08-10

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North Korea exports coal as ‘Russian’ to get around sanctions

Tuesday, August 7th, 2018

Benjamin Katzeff Silberstein

Reports Radio Free Asia:

In a move aimed at evading U.N. sanctions, North Korea is exporting coal to foreign buyers by sending shipments first to Russian ports, where the coal is falsely labeled as Russian-origin, North Korean sources say.

The export of North Korean coal is strictly banned under international sanctions punishing Pyongyang for its illicit nuclear weapons program, but North Korea has now opened new routes for trade with Russian help, a trade worker in North Pyongan province told RFA’s Korean Service.

“As sanctions on North Korea came into effect a couple of years ago, export routes for coal were blocked,” RFA’s source said, speaking on condition of anonymity.

“So North Korean trading companies have been shipping coal to the ports of Nakhodka and Vladivostok in the southern part of Primorsky Krai, in Russia. North Korean coal is then disguised as having come from Russia and is sent on to other countries under fake documents,” he said.

Loading ports for North Korean coal were formerly at Nampo and Songrim, on North Korea’s west coast close to China, but have now been moved to Chongjin and Wonsan, on the country’s eastern coast close to Russia, he said.

“When North Korean coal arrives at Nakhodka, a Russian company records its time of arrival, the length of the ship’s stay in port, and the amount of coal taken off. They then create false papers including a statement of the coal’s quality,” he said.

With these documents declaring the coal to be of Russian origin, “North Korea now has no problem exporting coal to other countries,” he said.

“The name of the Russian company that my company has been working with is Greenwich, and is located at the port in Nakhodka,” RFA’s source said. “They ask for two dollars per ton to disguise North Korean coal as Russian, and the North Korean trading company pays them right away.”

Still in demand

Also speaking to RFA, a North Korean trade worker based in the Chinese border city of Dandong said that North Korean representatives based in South and North Pyongan provinces collect information on countries needing coal and act as brokers for its export.

“Coal from these western-district mines is very high quality, so there is still a demand for it from other countries even though sanctions are in force,” he said.

A 30 percent deposit from the buying countries is required before the coal begins to move, with 30 percent of the balance due when the coal leaves its Russian port. The remaining 40 percent is then paid when the coal arrives at its final destination, the source said.

“For this three-step payment process, the money is deposited in a “borrowed” Chinese bank account, with the North Korean trading company paying banking fees,” he said.

Some of the coal sent from Russia now goes to South Korea and Japan, RFA’s source said.

“But North Korean company names don’t appear on the shipping papers, so the North Korean trading firms aren’t worried at all,” he said.

Resolve questioned

South Korea’s foreign ministry on Tuesday dismissed allegations that a foreign-flagged ship seen earlier at Nakhodka had delivered North Korean coal to South Korea’s southeastern port of Pohang, claiming the ship’s cargo was of Russian origin, according to an Aug. 7 report by the Yonhap news service.

“Critics here question the left-leaning Moon Jae-in administration’s resolve to curb the transport of North Korean coal,” a source of hard currency for the sanctions-hit Pyongyang regime, Yonhap said.

“But the government has stated that it remains committed to strictly abiding by U.N. mandates despite inter-Korean reconciliation,” Yonhap added.

The United States has meanwhile pointed to what it calls credible reports that Russia is in violation of U.N. sanctions against North Korea, with Secretary of State Mike Pompeo on Aug. 4 urging full compliance with measures aimed at forcing the North to give up its nuclear weapons program.

Article source:
North Korea Exports Coal as ‘Russian’ in Bid to Beat Sanctions
Hyemin Son
Radio Free Asia
2018-08-07

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The economics of coal trade, sanctions, and rice prices in North Korea

Monday, August 6th, 2018

By Benjamin Katzeff Silberstein

This may just be one piece of anecdotal evidence, but it’s interesting to note that sanctions haven’t necessarily leading to coal exports stopping – as we know from the multitude of evidence that North Korean coal ships have still been making their transport rounds – but primarily to drastically slashed prices, and surely to significantly smaller volumes being shipped as well. This reinforces the point that even if trade continues, sanctions put a large premium on trading with North Korea. Importers of North Korean coals, simply put, have to get charged less because of the risk they’re taking, and those exporting North Korea need to be paid more for the endeavor to be worth it.

(UPDATE on August 12th): I realized I may have misread the article – the source that Daily NK spoke with appears to be referring to domestic prices for coal, not export prices. Still, since we know that coal is in fact being exported through various evasion methods (albeit in fairly small quantities, perhaps), the point stands.

The article also makes an interesting point about the market prices for rice. It is remarkable how little prices have changed through the past year, when sanctions have been in place and enforced by China to a much greater extent than before. Still, according to this piece, prices aren’t dropping even though people’s incomes in fact are going down significantly, at least in parts of the country. So it may be that prices were already at or close to the “reservation price” for suppliers, i.e., the lowest point at which they’re willing to sell at all. Hard to confirm or check, but it is a plausible partial explanation for the strange dynamics of market prices in North Korea over the past year.

Daily NK:

As coal exports have slowed to a crawl due to international sanctions, North Korea’s coal country of Kaechon, South Pyongan Province, and Kujang County, North Pyongan Province, have been suffering under intense economic difficulties. Most residents in these areas were dependent on the export of coal and are directly feeling the effects of the trade stagnation.

“When coal was being exported, it went for up to 130,000 won (16 US dollars) a ton, but now due to the sanctions the price has fallen to 50,000 won (around 6 US dollars) a ton […] The coal must be sold for workers to get paid. The halt in  exports has even led to someone starving to death,” said Kim Woo Chul (alias, male resident of Kujang County), who was traveling in China on August 1.

“In April or May this year a fifty-year-old man died of starvation,” he said, nothing that while corn is provided by the government in July and August, “it lasts for less than two months.”

Kim also said that rice is being sold in the market but most people in the region can’t afford it. “Food is not scarce in the Kim Jong Un era, but people have no money so they can’t buy it,” he emphasized. Kim also noted that there were many empty food stands at the markets because demand has fallen due to the lack of money.

Another resident from Kaechon, South Pyongan Province, named Ri Sung Rim (alias) added, “There is a lot of rice at the markets, and people would buy it if they had money, but they don’t have money because coal is not being sold anymore […] People who ran private businesses selling coal are having a particularly bad time and are starving because they can’t even make corn porridge.”

She explained that a small amount of corn is given to those actually producing coal by the state, but teams that are not producing anything receive no food rations. “They have nothing to eat so there are even people who are taking their children and leaving the region,” she said.

The two interviewees also talked about the chronic electricity shortages in North Korea. While Pyongyang and other major cities are supplied with a relatively steady supply, the rural areas receive very little. People cannot watch television because of the lack of electricity, which means that many in these areas only recently found out that Kim Jong Un had met with the leaders of South Korea and the US.

“Electricity is only supplied for an hour or less in Pyongsong, while those who are wealthy siphon off electricity from factories or use car batteries,” said Kim. “Some of the wealthier people use car batteries to watch KCNA on television sets, but most cannot afford that.”

“Production teams get electricity, but residents don’t get electricity in their homes […] Car batteries need to be recharged to supply electricity at home, but there are no places to recharge them. People get them recharged if they know someone at the factories, but they are out of luck otherwise,” Ri said.

“I only found out about Chairman Kim Jong Un visiting China when I visited the country […] People need electricity to see the news and, since they can’t, they don’t know what’s going on.”

Article source:
Export sanctions lead to hard times for those in coal-producing regions
Ha Yoon-ah
Daily NK
2018-08-06

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Seoul says reopening Kaesong will wait till sanctions are lifted

Friday, August 3rd, 2018

Benjamin Katzeff Silberstein

Korea Herald:

“The government’s stance remains unchanged when it comes to the issue of the resumption of the Kaesong Industrial Complex,” Lee Eugene, a deputy spokesperson of the unification ministry, told reporters during a regular press briefing.

“The stance has not been changed either that things will be considered in line with progress in denuclearization efforts and within the frame of sanctions,” she added. “From a broad perspective, it would be desirable to push for its resumption after the lifting of the sanctions.”

Opened in 2004, the industrial park in the North’s border town of Kaesong was hailed as a key symbol of economic cooperation between the rival Koreas as it combined South Korean capital and technology with cheap labor from North Korea. The Seoul government, however, halted its operation in 2016 in retaliation for Pyongyang’s missile and nuclear provocations.

The North has recently ramped up its call for the South to reopen the industrial park amid a thaw in relations, but the US.

Article source:
Seoul says reopening of Kaesong complex should wait until sanctions lifted
Korea Herald/Yonhap
2018-08-03

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Thousands of North Korean workers enter Russia despite UN ban

Thursday, August 2nd, 2018

Benjamin Katzeff Silberstein

Reports Wall Street Journal:

Russia is letting thousands of new North Korean laborers enter the country and issuing fresh work permits—actions U.S. officials say potentially violate United Nations sanctions aimed at cutting cash flows to Pyongyang and pressing it to give up nuclear weapons.

The U.N. Security Council in September barred governments from issuing new work permits to North Koreans, though some existing labor contracts were allowed to continue.

Since the ban, more than 10,000 new North Korean workers have registered in Russia, according to Russian Interior Ministry records reviewed by The Wall Street Journal. Meanwhile, at least 700 new work permits have been issued to North Koreans this year, according to Labor Ministry records.

[…]

North Korean laborers have helped feed the construction boom in St. Petersburg, according to local businessmen.

“They work till they drop,” said a contractor who hires North Koreans across the city. Workers arrive at construction sites at 7 a.m. and work until 10 p.m. or even midnight, taking just two half-hour breaks for meals of rice and dried fish, he said.

Local developers say they pay companies that hire out North Korean workers—firms they say often represent North Korean institutions such as the military or state conglomerates—about 100,000 rubles ($1,600) a month per worker. In government filings and job advertisements, such companies list monthly worker salaries of 16,000 to 20,000 rubles.

That 80% difference is in line with U.S. assessments that North Korea’s government takes the bulk of earnings.

U.N. sanctions mean these laborers should be gone by September, a year after they went into effect, because the workers are required to leave once their permits expire, usually within a year. Even workers with multiyear permits must be out by the end of 2019 under the sanctions.

Yet many firms contracting out laborers—Russian companies owned and run by North Koreans, according to corporate documents and researchers—are investing in new offices, applying for new work permits and negotiating new projects.

“The Kim regime continues to dispatch citizens abroad,” said C4ADS, a nonprofit that advises the U.S. government on security risks, in a report released Thursday. “In doing so, it continues to flout international sanctions to generate foreign currency.”

About 100,000 or more North Korean laborers have been working overseas in recent years, the U.S. State Department said. Pyongyang’s labor exports earned as much as $2 billion a year for the Kim regime, analysts say.

According to Russian government data, around 24,000 North Koreans were officially working in the country at the end of last year.

Full article and source:
Thousands of North Korean Workers Enter Russia Despite U.N. Ban
Ian Talley and Anatoly Kurmanev
Wall Street Journal
2018-08-02

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