North Korean Economy Watch

Asia Times
Sunny Lee
3/14/2007

North Korea is well known for its nuclear ambitions. But it is relatively little-known fact that the country is a hidden outsourcing mecca for the international animation industry, producing such well-known movies as The Lion King.

Even while North Korea has been under US-led sanctions that include a ban on commercial trade, several US animated films have allegedly been outsourced to the country, according to Beijing-based businessman Jing Kim, who says he was involved with American animation producer Nelson Shin’s filmmaking business in the Stalinist pariah state.

Shin, a 67-year-old Korean-born American, is best known for the television cartoon series The Simpsons, which was actually drawn in Seoul by a team of animators led by him since its premiere in 1989.

Shin and Kim first met in Singapore in 1999 at an international animation film fair, where Kim led the North Korean delegation. There, Shin asked Kim to help him to connect with the North Korean animation industry, Kim said.

China-born Kim, 47, has been doing business with North Korea for nearly 20 years and owns a restaurant in Pyongyang. Through his company in Singapore, where he holds a resident permit, Kim used to sell North Korean products to South Korea during a period when direct commerce between the two ideologically opposed neighbors was not possible.

After seven years of cooperation with North Korea’s state-owned SEK Studio, employing as many as 500 North Korean animators out of its staff of 1,500, and 18 visits to the country, Shin finally completed Empress Chung in 2005, a famous Korean folk tale about a daughter who sacrifices herself to a sea monster to restore her blind father’s eyesight. It was the first cartoon jointly produced by the two Koreas.

Apparently, however, according to Kim, Empress Chung was not the only film made by North Korean cartoonists. Shin, who heads Seoul-based AKOM Production, a unit of KOAA Film in Los Angeles, allegedly outsourced to North Korea part of the animation contracts that his firm had originally received from the United States.

On one occasion, for example, North Korean animators employed by Shin came to Beijing from Pyongyang to work exclusively on several US animation movies, staying there for months, according to Kim.

When asked whether any of the movies were actually broadcast in the US, Kim said, “Oh, a lot, a lot. The ones that I participated in were as many as seven.”

But Kim declined to name the US films, citing the sanctions imposed on North Korea. “If the names of the US companies are known, they will be screwed,” said Kim.

Kim said “many people will be hurt” if he went into details, adding, “We worked very carefully.”

When asked whether the US film companies involved actually knew that their cartoons had been made by North Koreans, Kim said: “They don’t want to know. If they knew, it wouldn’t be fun. After they make contracts with the South Koreans, they just assume that it is made there. They only care about the delivery [of the products] and their quality. It is too much for them to ask where they were actually made. We don’t have the obligation to tell them, either. The only thing they claim is the copyright.”

However, Nelson Shin denied the allegation. “There were no American cartoon movies made in North Korea,” Shin said from Seoul. “As far as I know, there were some Italian and French movies made in North Korea. But I am not aware of any American cartoons made in North Korea.”

Shin also noted the technical difference of production origination between “made in” and “made by”. He took the example of The Lion King. “It’s a Disney film. However, if Disney Europe, not the Disney company in the US, gave North Korea the production order, then it is not a deal placed by an ‘American’ company.”

Kim in Beijing, however, said his cooperation with Shin led them to employ eight North Korean animators in 2005 to come to Beijing, where the North Koreans stayed for six months, from June 10 to November 18. That was followed by a second group of North Korean animators, who came to Beijing and stayed for much of 2006, returning to Pyongyang on December 27-28, according to Kim.

When it was noted that Kim mentioned all these dates without referring to any written memo, he tersely said: “That’s how I make my living.”

Kim said he didn’t pay the North Korean artists in person for their work. Rather, he wired US$170,000 to North Korea directly for their 2006 assignments.

Kim said most North Korean animators are highly educated, including graduates from the prestigious Pyongyang College of Arts.

Animation involves the grueling job of grinding out tens of thousands of drawings for a single 22-minute cartoon. “They worked without complaint,” Kim said, while also praising the quality of their work. He said hiring North Korean artists meant that the usual company benefits, such as medical insurance, welfare and overtime, did not need to be provided.

“It’s a system that is doable,” Kim said.

North Korea’s cartoon industry has become quite sophisticated as a result of its cooperation with France and Italy in their animation projects since 1983. North Korea’s animation skills now rank among the world’s best, experts say.

“They are highly talented. That’s something I can say,” said Shin in Seoul.

South Korea itself was once the largest supplier of television animation in the world during its peak in the 1990s, churning out more than 1,000 half-hour episodes. However, its status has since declined with the rise of labor costs there, pushing animation companies to find alternatives such as India, the Philippines and North Korea. The Chronicles of Narnia, for example, used Indian animators for some characters. It’s unclear how much North Korea contributes to the world animation market today.

Meanwhile, when asked about the similarity of cartoon characters between Empress Chung and the ones seen in recent US animation movies, Shin said, “It’s inconvenient to talk about it on the phone.”

However, Shin said he is working on a new joint North-South Korea animation movie called Goguryeo, the title a reference to an ancient Korean kingdom that existed until AD 68. He expects it will take about two years to complete.

Bloomberg
Bradley Martin, Allen Cheng
3/6/2007

Chinese entrepreneur He Ho was burned by his first North Korean investment, a bakery in the shabby border city of Sinuiju. He lost his entire $20,000 when the plan to make the city a special economic zone stalled in 2003.

If another opportunity comes along, though, “I’ll be the first to go in,” the 34-year-old said in an interview in Dandong, the bustling Chinese city facing Sinuiju across the Yalu River. “North Korea’s a good investment because so many things are lacking.”

Business executives in Dandong, one of the main conduits for trade in and out of North Korea, see opportunity in the recent six-nation agreement to end Kim Jong Il’s nuclear-weapons program. They think the 65-year-old North Korean leader will now focus on fixing his country’s nearly flattened economy and may revive plans for a special economic zone — an area designed to promote foreign investment, with fewer rules and regulations than elsewhere in the country — on the western border with China.

“Most of North Korea’s trade with China is via Dandong, so a special zone in this corridor could make sense,” said Marcus Noland, senior fellow at the Peterson Institute for International Economics in Washington. “This could be the North Korean equivalent of the Chinese coastal SEZs in the early years of the Chinese reform.”

No Guarantee

There’s no guarantee against another disappointment for entrepreneurs like He Ho, said Peter Beck, Seoul-based Northeast Asia project director for the International Crisis Group, a Brussels-based organization that works to resolve crises around the world.

“The eternal optimist in me hopes that Kim will see the light and recognize the direction in which he needs to lead the economy,” Beck said in a telephone interview. “But the jury’s still out.”

At the same time, “the North Koreans have been talking about putting a special economic zone in the far northwest aimed at China for a decade,” said the Peterson Institute’s Noland. “If they get the politics right, this venture could work.”

China is North Korea’s top trading partner, with 2006 exports of $1.23 billion and imports of $468 million, according to its Ministry of Commerce.

A little over a year ago, Kim visited six booming Chinese cities, including the special economic zone of Shenzhen, bordering Hong Kong. North Korea’s Central News Agency described the nine-day trip as a visit to places “where the cause of modernization is being successfully carried out.”

Executives’ Speculation

Business executives in Dandong speculate that North Korea will develop a new zone in Cholsan County, a peninsula on the east side of the mouth of the Yalu some 50 to 60 kilometers (31 to 37 miles) south of Dandong and Sinuiju. China’s commerce and foreign ministries and North Korea’s embassy in Beijing didn’t respond to faxed requests to comment on their plans.

In 1991, North Korea built a special economic zone at Rajin-Sonbong, in the remote northeast of the country, which has failed to attract much foreign investment because of its location.  Another zone near the southern border at Gaeseong, only 60 kilometers from Seoul, has proven more popular, especially with South Korean manufacturers in search of low-cost labor.

In 2002, North Korea announced plans for the zone in Sinuiju, which would have included export factories and casinos to lure gamblers from China. Kim named Dutch-Chinese businessman Yang Bin governor of the zone. China, which hadn’t given its approval, squelched the plan by arresting Yang and jailing him in 2003 on charges of fraud and illegal land use.

Strained Relations

Kim’s test of a nuclear device in October, which strained relations with the Beijing government, didn’t halt commerce on the border, according to Shen Yuhai, general manager of Dandong Jade Ocean Trade Co. “We didn’t stop trading at any time,” he said in a recent interview.

Shen’s office overlooks a busy parking lot where Chinese customs officials examine trucks departing neon-lit, high-rise Dandong for the run-down and darkened Sinuiju.

The trucks cross on the Friendship Bridge’s single lane in the morning with manufactured goods and return in the evening, either empty or carrying minerals, silkworm cocoons and seafood, Shen said. Four trains a week cross in each direction, connecting the North Korean capital of Pyongyang with Beijing.

China is supplying its neighbor with “daily necessities, home electrical appliances and, in this season, farming tools and chemical fertilizer,” said Shen.

While business is booming, he said he’s still cautious about the risks. He requests payment in yuan, dollars or euros, not North Korean won, and accepts bank transfers only after business relations have been established.

Even then, he said, “sometimes we are cheated.”

–With additional reporting by Hideko Takayama in Tokyo and Lee Spears and Dune Lawrence in Beijing.

For a copy of a list of banned goods to North Korea: http://www.state.gov/t/isn/76138.htm

Daily NK
Kim Min Se
3/7/2007

90% daily goods made in China, 50% circulated by Chinese merchants

While some prospect that North Korea may be an affiliated market of China’s 4 provinces in the Northeast, the real focus is on the merchants who actually control North Korea’s markets. Recently, North Korean citizens have been asserting that markets would immobilize if Chinese merchants were to disappear.

Lately, Chinese merchants are nestling themselves with their newly found fortune in North Korea, undeniably to the envy of North Korean citizens.

In a recent telephone conversation with the DailyNK, Kim Chang Yeol (pseudonym) a resident of Shinuiju said “Most of the tiled houses in Shinuiju are owned by Chinese merchants in Shinuiju are upper class and the rich.” Unlike Pyongyang, tiled houses in Shinuiju are greater in value than apartments. In particular, the homes owned by Chinese merchants are luxurious and impressing.

Kim said “At the moment, 90% of daily goods that are traded at Shinuiju markets are made in China.” What Kim means by 90% of goods is basically everything excluding agricultural produce and medicinal herbs. Apparently, about half of the (90% of) supplies are circulated by Chinese merchants.

Kim affirmed that the market system could be shaken if supplies were not provided by the Chinese merchants. Hence, Chinese merchants have elevated themselves in North Korea’s integrated market system, to the extent that the market could break down without their existence.

In addition to this, Chinese merchants are playing a vital role in conveying information about the external world into North Korea. Even in 2004, it was Chinese merchants to first telephone China through mobile phones relaying the news about the Yongcheon explosion. As a result, rumors say that the movement of Chinese merchants can either be a “cure” to the economic crisis in which the North Korean government seems unable to fix, or “poison,” as more and more foreign information flows into the country.

How many Chinese merchants are there in North Korea?

A report by China’s Liaoning-Chosun Newspaper in 2001 sourcing data from North Korea, states that immediately after WWII, approximately 80,000 overseas Chinese were residing in the Korean Peninsula. Then following the Korean War and the formation of a Chinese government, the majority of people, approximately 60,000 Chinese, returned home. In 1958, statistics show that 3,778 families of overseas Chinese were living in North Korea, totalling 14,351 people.

These Chinese engaged in business related to farming, home made handicrafts and restaurant business, and in the late 50’s, lost all this due to the implementation of economic planning and dictatorial regime. Since then, the majority of merchants continued to return to China until the early 80’s.

In 2001, Liaoning-Chosun Newspaper confirmed that approximately 6,000 Chinese were living in North Korea. Of this figure, more than half were residing in Pyongyang, approx. 300 families living in North Pyongan and approx. 300 families residing throughout Jagang and northern districts of South Hamkyung.

At present, there are 4 middle and high schools for children (11~17 years) of Chinese merchants, located in Pyongyang, Chongjin, Shinuiju and Kanggae. In addition to these schools, there are a number of elementary schools (for children aged 7~11 years) located sporadically throughout each province.

Wang Ok Kyung (pseudonym) a resident of Shinuiju attended Chongjin Middle School for children of overseas Chinese in 1981~86. Wang said “At the time, there were about 40 students in each year. Now there is only about 5~6 students.” Nowadays, many Chinese children complete their elementary studies in North Korea, but the general trend is to send the children to China for middle school. She said “In order to enter a Chinese university, students must have completed their middle school studies in China and must be fluent in Chinese. He/she can also go to private institutes in China.”

Fortunes made through trade between North Korea-China during the food crisis

Even until the early 80’s there were no such thing as a wealthy North Korean-Chinese merchant. They were no different to North Korean citizens.

However, in the 80’s, many people began importing and selling goods such as socks, handkerchiefs, hand mirrors and cards from China, literally through their sacks. As the 90’s approached North Korean-Chinese merchants began to experience great wealth, the time where North Korea-China trade fundamentally kickstarted.

Today, Son Kwang Mi (pseudonym, 52) falls under the top 10 wealthiest Chinese merchants in Dandong, characterizing an unique rags to riches story. In the past, Sun lived in Chongjin and was one of the first figures to trade with China in the 80’s.

In the beginning, Son was so poor that she had to sell her watch received as a wedding gift in order to buy goods to sell.

Fortunately, Son found her money smuggling gold. In North Korea, gold is considered a public good or simply put Kim Jong Il’s personal inheritance, so private trade of gold is strictly regulated. Nonetheless, there are still some laborers who export gold secretly and a great number of people still collect gold through dubious ways. In particular, after the 80’s as North Korea began to experience economic decline, more and more people sold gold secretly.

Hence, a small number of Chinese merchants infiltrated the market of secretly trading gold with China. Chinese smugglers were able to take advantage of North Koreans by greatly raise their market margins, as the supply of gold and North Koreans wanting to sell their gold was high yet the demand in North Korea low.

Son said “Of the Chinese merchants in North Korea, 60% earned a great fortune at that time through illicit trade.”

She says that there were two opportunities for overseas Chinese to make a great fortune. The first was in 1985~89 through illicit trade of gold and the second, during North Korea’s mass food crisis in 1995~98.

“During the mass famine, everything in North Korea was in shortage and so Chinese merchants began to provide the daily necessities of life. At the time, if you brought large amounts of goods such as fabric and sugar, you could make a profit of 1 million Yuan (US$137,000),” she said.

Son was fortunate enough not to miss these two opportunities which led her to great wealth and allowed her to possess a fortune of 50 million Yuan (US$6.31 million).

Chinese merchants can relatively enter and exit China freely. Also, with the ability to speak Chinese fluently and the possibility of staying in the homes of many relatives in China, the occupation possesses ideal conditions.

Korea Times
Park Hyong-ki
3/7/2007

The outlook for inter-Korean trade this year seems bright, as North Korea agreed to dismantle its nuclear weapons programs at the six-party talks in Beijing last month.

According to a survey conducted by the Korea International Trade Association (KITA), about 45 percent of South Korean companies doing business with North Korea were optimistic that the volume of inter-Korean trade will grow this year. The survey was conducted on 150 firms in February.

Some 35 percent believe that the bilateral trade will remain the same as last year’s, while only 15 percent showed negative responses toward this year’s trade, saying that the volume will “drastically” decrease.

Only two companies said they will pull out of North Korea this year, while five companies were undecided.

Last year, inter-Korean trade amounted to about $1.3 billion, up 28 percent from 2005. Key trading commodities were agricultural, chemical and textile products.

Despite North Korea’s nuclear and missile tests as well as chilly inter-Korean relations last year, South Korean companies operating in the Kaesong Industrial Complex saw their sales grow 69 percent to $298 million.

The Kaesong site is one of the major cross-border projects symbolizing economic ties between the two Koreas, which utilize North Korea’s cheap labor and South Korea’s technological skills.

The Ministry of Unification is hoping to attract about 2,000 manufacturers to Kaesong by 2012. Currently, there are 55 South Korean firms operating in the joint economic zone, which account for 22 percent of overall South-North business, according to the trade association.

The other joint business _ the Mt. Kumgang tour managed by Hyundai Asan _ suffered from the aftermath of North Korea’s nuclear weapon test. The tourism project recorded only $57 million in sales, down 35 percent from the year before.

Specifically, a total of 477 South Korean companies participated in inter-Korean trade last year, down from 523 firms in 2005, due to heightened risks following Pyongyang’s nuclear test.

About 44 percent of those surveyed said that the test had negatively affected their business with the North. The report showed that only 39 percent reaped a “little” profit last year while doing business with North Korea.

Half of firms upbeat for North trade
Joong Ang Daily
3/8/2007

Almost half of South Korean companies doing business with North Korea said they have a bright outlook for inter-Korean trade this year due to expectations for better ties with the North, a poll said yesterday.

According to a survey of 67 companies conducted by the Korea International Trade Association, 45 percent of the respondents said inter-Korean trade will likely increase this year. Thirty-five percent expected trade to remain at the same level as last year while 15 percent said it will likely decline.

The poll also said 75 percent of local companies operating in the industrial park in the North’s border city of Kaesong had an optimistic outlook for trade. The industrial complex, mainly for smaller South Korean firms, is considered a model for reconciliation and cooperation between the two Koreas. Currently, 21 garment and other labor-intensive South Korean plants are operating there, employing about 11,000 low-paid North Korean workers.

The survey said among the firms that forecast inter-Korean trade to rise, 17 percent said their continued trust in North Korean firms was the reason for their upbeat outlook, while 16 percent and 14 percent said it was a rise in new orders and expectations for inter-Korean reconciliation. The survey was conducted before a deal on dismantling North Korea’s nuclear program was reached, reflecting that local firms have maintained a positive view toward inter-Korean trade. The agreement calls for Pyongyang to shut down and disable its main nuclear reactor and dismantle its atomic weapons program.

Yonhap
3/6/2007

North Korean and Japanese officials met Tuesday in Hanoi to set the agenda for their two-day discussions scheduled to start here Wednesday to settle pending bilateral issues preventing them from normalizing diplomatic relations.

The Japanese representative to the talks, Koichi Haraguchi, met with his North Korean counterpart, Song Il-ho, Tuesday morning for the preparatory discussions.

The normalization talks are part of last month’s six-nation agreement aimed at dismantling North Korea’s nuclear weapons program. Under the accord, North Korea has 60 days to shut down its plutonium-producing Yongbyon facility in return for 50,000 tons of heavy fuel oil for electricity production. Japan has said it won’t contribute to the aid unless there is progress on the issue of its citizens abducted by the North.

North Korea admitted to kidnapping 13 Japanese in the 1970s and 1980s and allowed five to return in 2002. Japan says 17 people were kidnapped and must be accounted for.

In addition to the abduction issue, the North Korean and Japanese diplomats are expected to focus on the ways for Japan to atone for its 1910-45 occupation of the Korean Peninsula.

Prior to the opening of the talks, meanwhile, Japanese Prime Minister Shinzo Abe made clear in a parliamentary address in Tokyo that Japan will not compromise with North Korea over its abduction of Japanese citizens.

“Solving the nuclear problem was the main theme of the six-nation agreement, but the abduction issue is not one where any concession is possible,” Abe said. “Our stance is that unless they change their attitude, we won’t change.”

Daily NK
Kim Min Se
3/5/2007

North Korea customs at Shinuiju is under strict control by Central Committee of North Korea Workers Party.

An inside source from Shinuiju said on the 4th, “Authorities are currently undergoing investigations at Shinuiju customs, looking for tax evasions and illicit acts. The parties subject to these crimes include customs officers at Shinuiju customs and merchants engaging in North Korea-China trade.”

The source added that the investigations had virtually terminated North Korea-China trade between Shinuju and Dandong.

Shinuiju customs is critically important for North Korea as 80% of food and daily necessary goods between North Korea and China are imported and exported from here.

According to Kim Young Hee (pseudonym), a North Korea-China tradeswoman in Shinuiju, “Trade merchants have given up on trade and are in a state of panic because of authorities making investigations at Shinuiju.”

Kim said “At times like this, keeping is a low profile is the way to survive” and expressed her concern, “They have made orders to arrest at least 10 people. Who knows, anyone could be unlucky and caught.” She said “Like there is any trade merchant who does not engage in some sort of illegal act” and retorted “Simply obtaining a permit from authorities is generating money.”

“Prior to authority investigations, on average 50~100 cars would pass through Shinuiju-Dandong, per day. Now the figures have drastically reduced with only 5~10 cars passing through” she said.

Kim continued “There is not an article that falls through the cracks of authority officers. All goods approved by customs, whether it be minerals to seafood is confirmed by authorities… All things are left up to the hands of authority officials.”

On the other hand, the source also informed that despite recent investigations placing trade between North Korea and China in a state of lull, apparently counteracting effects such as dramatic rises in Shinuiju markets have not yet occurred.

Ruediger Frank
Asian Perspective, Vol. 30, No.3, 2006 pp. 536

PDF Here: DPRK sanctions.pdf

Abstract:
This article explores sanctions as a policy tool to coerce North Korea’s behavior, such as by discontinuing its nuclear weapons program. It discusses the characteristics of sanctions as well as the practical experience with these restrictions on North Korea. It becomes clear that the concrete goals of coercion through sanctions and the relative power of the sending country to a large extent determine the outcome. Nevertheless, the general limitations of sanctions also apply, including the detrimental effects of unilateral and prolonged restrictions. It appears that the imposition of sanctions against the DPRK is unlikely to succeed. As an alternative way of changing the operating environment for North Korea, assistance deserves consideration. Despite many weaknesses, this instrument is relatively low in cost and risk, and can be applied continuously and flexibly.

Highlights below the fold:
(more…)

Associated Press (Hat tip DPRK Studies)
3/3/2007

Three North Koreans ended a rare and discrete visit to Oregon this week after visiting Oregon State university scientists, orcharists in the Hood River area, the Nike campus, Gov. Ted Kulongoski and attending a Trail Blazers basketball game.

Because of sensitive six-way talks on North Korea’s nuclear program, Mercy Corps, which hosted the visit, declined to release the officials’ names.

Portland-based Mercy Corps is among a handful of humanitarian agencies running programs involving North Korea, which has no diplomatic relations with the United States.

Over 12 years, Mercy Corps has supplied fish and fruit trees for farm projects in North Korea, which has chronic food shortages.

The North Koreans, representing Mercy Corps’ main partner organization, the Korean American Private Exchange Society, arrived Tuesday and were to leave Saturday.

Mercy Corps President Nancy Lindborg said the three visited OSU, which has made scientists available to advise on the agricultural projects. On the way back they met with Kulongoski. They visited orchards in the Hood River area Friday.

At Nike headquarters near Beaverton, they met with managers who gave a presentation on e-commerce, an Internet activity with undetermined relevance in a socialist nation with limited Web penetration.

“I don’t have a specific point of view to share on their visit and the possible opportunities North Korea may present,” said Bob Applegate, a Nike spokesman.

The visit was perhaps the 10th in a series of low-profile North Korean delegations here over the years, Lindborg said. In North Korea, she said, “Oregon is very well-known.”

At the Rose Garden on Thursday the visitors watched the Trail Blazers dismantle Charlotte.

“They’re fans,” said Lindborg, who also attended the game. “Two of them actually play basketball.”

Yonhap
2/28/2007

Russia and North Korea will resume meetings of their trade and economic cooperation committee late next month, ending an over six-year suspension, Russian government officials here said Wednesday.

The joint panel’s last meeting was held in Pyongyang in October 2000, the officials said.

The upcoming meeting, the fourth of its kind, will be held in Moscow from March 22-23, and discussion will focus on Pyongyang’s financial debt to Moscow, according to the officials.

The North’s debt reportedly amounts to US$8 billion dollars, and a considerable part of it is expected to be written off.

Russia, N. Korea to discuss debt payment, other issues in Moscow
Novosti (Hat Tip DPRK Studies)
2/27/2007

Russia and North Korea will meet March 22-23 in Moscow to discuss debt repayment by the reclusive regime and other economic matters, a Russian official said Tuesday.

Russia and North Korea agreed February 27 on a timeframe for the intergovernmental bilateral commission on economic, scientific and technical cooperation to hold its first session since 2000, Yevgeny Anoshin, press secretary of the Russian half of the commission, said.

Konstantin Pulikovsky, the former presidential envoy in the Far Eastern federal district and now head of the Russian technical standards body, Rostekhnadzor, will lead the commission on behalf of Russia, Anoshin said.

“The intergovernmental commission will yield real results only if Russia’s and North Korea’s finance ministries find during February an acceptable solution to the repayment of Pyongyang’s debt to Russia,” Pulikovsky earlier said.

According to Russian experts, North Korea owes more than $8 billion to Russia, including interest.

In addition to the debt repayment, the commission is expected to focus on Korean labor in Russia, plans to continue building the trans-Korean railroad and connecting it to the Trans-Siberian rail, and the possibility of delivering and refining Russian crude in North Korea.

Representatives of Russia’s economics, transport and finance ministries and the rail monopoly Russian Railways will attend the commission’s session, Anoshin said.

Reuters (Hat tip DPRK studies)
2/26/2007

Senior officials from South and North Korea resume talks on Tuesday, seven months after dialogue broke down in acrimony over Pyongyang’s missile tests.

Following are key points in the ties between the two:

STILL AT WAR

– An armistice ending the 1950-53 Korean War dominates the relationship between the two Koreas. Nearly 1.2 million North Korean soldiers and South Korea’s 680,000 troops remain in a tense military standoff despite political and commercial ties that have warmed since 2000.

– The two have enough missiles and artillery pointed at each other to largely destroy major cities on both sides of the Korean peninsula.

POINTS OF EXCHANGE

– An industrial park in Kaesong just a few minutes’ drive from the heavily-fortified border is home to 21 companies employing about 12,000 North Korean workers.

– About 1.4 million South Koreans have visited the Mount Kumgang resort in the North just above the border on the east since the tours began in 1998. Roughly a quarter of a million made the visit in 2006 even as tension spiked following the North’s missile and nuclear tests.

– About 102,000 people crossed the border last year, not including Kumgang tourists and most of them South Koreans visiting the North for business. The total exchange of people was 269,336 as of the end of 2006.

TRADE

– Cross-border trade was $1.35 billion in 2006 up from $1.05 billion a year ago, largely from the strength of the Kaesong industrial park.

HUMANITARIAN AID

– South Korea has supplied between 200,000-350,000 tonnes of fertiliser a year to the North since 2000.

– It has also shipped up to 500,000 tonnes of rice a year to the North in the form of low-interest, long-term loans. Food aid has been suspended since the North’s missile tests in last July.

REFUGEES, PRISONERS OF WAR AND ABDUCTEES

– South Korea believes more than 1,000 of its people are still alive in the North either as civilian abductees or as prisoners captured during the Korean War.

– North Korea has said 10 South Korean POWs and 11 civilians were alive there.

– More than 1,000 North Koreans each year have fled hunger and persecution in the North and sought refuge in the South. In the first six months of last year, 854 arrived in the South for a total of 8,541. (Source: South Korean Unification Ministry, Kaesong Industrial District Management Committee, Reuters)