Archive for the ‘International trade’ Category

Price data

Monday, June 12th, 2006

From the Daily NK:

North Korean prices are continuing to rise.

At Sunam Jangmadang of Chongjin City, the price of rice is 1,200W/1kg, corn 300W, bottle of oil 2,000W, pork 2,500W and pants made from China 20,000W.

As it is spring, not only is it a time where the overall price of Jangmadang rice rises, but because the country is not distributing rations, the majority of people depend on the rice at Jangmadang. Also, rice sellers are watching this opening and are raising prices.

Lee who entered South Korea in 2003 says she has already sent money to her family by various means. The money sent through earnings from part-time jobs and resettlement money from the South Korean government, is becoming a lifeline for her family. Her families in North Korea depend on her to send money to live and get great relief from their daughters who live in South Korea.

Chinese 100yuan is 34,000won at Jangmadangi

Lee’s family who support their living by selling goods made from China, ceased trade because of soaring prices and control of Jangmadang by authorities.

Lee added, as it became harvest season and authorities restrained Jangmadang operations, there was even an incident last May at Chongjin where a lot of children were hospitalized after eating sweets and medicines made from China, and instruction was made in regards to strengthening the regulation of Chinese goods.

However, Chinese goods are in the majority and controlling Chinese commodities in North Korea is ‘shading the sun with the palm of your hand.’ Lee conveyed that to regulate the problem, police officers confiscate Chinese goods such as alcohol and cigarettes, and that oppression is worsening.

According to Lee, at present in Chongjin, Chinese 100yuan is 34,000 won for North Korean money. If this is converted to dollars, $1 calculates approximately 2,750won.

In March, the exchange rate at Musan Jangmadang was 100yuan to 37,125 won North Korean currency, in dollars $1 for 2,970won. The exchange rate for Yuan has decreased since March from roughly 100yuan to about 3,000won.

Local factory workers, majority mobilized to the village

The local industrial factory Lee’s brother works for in Chongjin, has recently closed factory doors and sends workers to the village. Compared to reports of North Korean publicity and media of central businesses in production at Pyongyang, standards of local industries are extremely inferior.

The reason, local industries could not extricate the aftereffects of acute shortages in equipment and materials following the economic breakdown in the mid-90’s.

According to defector of Chongjin, person ‘A’ laments “Recovery in factories is difficult as electric machines and electric lines are stolen and sold. Factories themselves want restoration but money is required, and isn’t it that there is no where money can appear.”

The most urgent is the problem of electricity. Most recently, as it is the farming season, all the electricity is mobilized for the water meter operations, with electricity servicing the villages approximately 10hours daily. However, as electricity is supplied to the villages, meanwhile the city is locked in darkness.

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Seoul says no DPRK aid without railways test

Thursday, June 8th, 2006

From the Korea Times:

South Korea’s chief delegate for the inter-Korean economic talks yesterday reaffirmed the North will not be getting any new economic support unless it pushes ahead with the railways test-run.

In a radio interview, Vice Finance Minister Bahk Byong-won said, “We created a structure in which the additional economic cooperation is only possible after the railways test-run.”

The two Koreas closed their 12th Economic Cooperation and Promotion Committee meeting in Jeju on Tuesday with a nine-article agreement on support for light industries, natural resources development and others.

The two sides concurred such agreements will only be implemented when “conditions are met,” which they verbally confirmed referred to the cancelled cross-border test-runs.

North Korea abruptly cancelled the scheduled testing last month, prompting an angry response from the South.

The South, remaining steadfast to its policy of engaging more economically with its communist neighbor, believes staunch military authorities to be behind the cancellation.

“(The North’s) military authorities are closely connected with the procedures of implementing many of the inter-Korean agreements. And the (preconditioning) clause refers to just that,” Bahk said, emphasizing that the North Korean military must take visible measures such as preparing a military guarantee for the railways operation.

The two railways, on the east and west of the Korean Peninsula, run through heavily fortified borders. It would be the first time in over five decades that the trains run.

“Although we said ‘conditions’ in the agreement, both sides made clear when we read out the agreement that the conditions referred to the railways test to avoid any conflicting interpretations in the future,” Bahk said.

(angiely@heraldm.com)

By Lee Joo-hee

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Koreas agree on business contracts

Wednesday, June 7th, 2006

From the Korea Herald:

JEJU – The two Koreas yesterday agreed on a set of contracts to stimulate North Korea’s light industries and mining operations, but only when “conditions are met.” South Korean officials say the expression is a diplomatic term being used to describe the North’s obligation to allow the test run of trains on two cross-border rail links.

Economic delegates from Seoul and Pyongyang ended their four-day meeting on Jeju Island early yesterday morning, working out a nine-point agreement on various economic cooperation plans.

The talks were held against a background of hostility in the South following North Korea’s unilateral cancellation of the landmark testing of cross-border railways on May 25.

After marathon talks, the two sides managed to achieve a reluctant consensus on how to describe Pyongyang’s duty to revive the cancelled railway test-runs in return for a package of business cooperation deals.

The two sides resorted to indirectly referring to Pyongyang’s railway obligation by using the term “when conditions are met,” instead of using more direct language. Some observers said the “ambiguous” preconditioning leaves room for Pyongyang to pull out from the agreement later on.

The North apparently faces opposition from the military authorities who are apparently against opening the railways to the South. The North Korean military has demanded the two Koreas first conclude a full military guarantee.

“The implication of the agreement is that if there is no test run for the railways, there will be no economic support,” said Kim Chun-sig, spokesman for the South Korean delegation, during a press briefing.

Underscoring that the agreement is strong enough to encourage North Korea fulfill its part of the bargain, Kim said that the two Koreas would soon begin to discuss the military guarantees.

Based on the agreement, South Korea will provide some $80 million worth of raw materials needed for the destitute state to manufacture garments, shoes and soaps from August this year. North Korea will repay 3 percent of the loans in the form of minerals such as zinc. The interest rate was set at a low 1 percent.

The two Koreas also agreed to jointly develop North Korean mines and designate an organization to take charge of the project within one month from now.

Seoul officials argue that this agreement raises the level of inter-Korean cooperation to a mutual and commercial relationship from one-sided aid from Seoul to Pyongyang.

Other agreements included a joint excavation of aggregates in the Han River estuary that is located along the demarcation line, and to open working-level contacts from June 26-27 to discuss how to prevent the Imjin River from flooding nearby areas.

The two Koreas also saw eye-to-eye on advancing their joint businesses into third countries.

Another working-level meeting on the Gaeseong industrial park will be held from June 20-21.

The next Economic Cooperation and Promotion Committee meeting will be held in September in Pyongyang.

South Korean delegation was headed by Vice Finance Minister Bahk Byong-won and the North Korea team was led by Ju Tong-chan.

By Lee Joo-hee

From Yonhap:

The following is the full text of a joint press statement issued by South and North Korea at the end of their four-day economic cooperation meeting on the southern South Korean island of Jeju, Tuesday.

South and North Korea held the 12th meeting of the Inter-Korean Economic Cooperation Promotion Committee in Jeju Island on June 3-6, 2006.

During the meeting, the two sides discussed the issues to further develop the inter-Korean economic cooperation project in the interest of the Korean people in the spirit of the June 15 joint declaration, and agreed on the followings.

1. South and North Korea agree to adopt an accord on South-North Cooperation in Light Industry and Natural Resource Development and enforce it at the earliest possible time in favorable conditions.

2. South and North Korea agree to discuss and then implement a project to extract sand from the Han River’s estuary as military safety measures are taken.

3. South and North Korea agree to make necessary conditions for making the Kaesong Industrial Park globally competitive. To that end, the two sides will hold the second meeting of working-level officials for Kaesong industrial park construction and discuss ways of introducing an ID system, simplifying customs and passage procedures, securing a stable source of workers and building dormitories and convenient facilities to solve problems stemming from an increase in the number of workers.

4. South and North Korea agree to hold the first working-level meeting in Kaesong on June 26-27 to prevent flooding in shared areas near the Imjin River to review each other’s survey reports, discuss joint survey plans and ways of establishing a flood warning system.

5. South and North Korea agree to cooperate actively in preventing such natural disasters as flood, forest fires and yellow dust storms and discuss concrete issues at a working-level meeting in Kaesong sometime in July.

6. South and North Korea agree to discuss their advance into third countries in the field of natural resource development at a working-level meeting in Kaesong sometime in July.

7. South and North Korea agree to exchange economic observation delegations when an accord on South-North Cooperation in Light Industry and Natural Resource Development takes place.

8. South and North Korea agree to discuss and finalize the schedules of working-level meetings for fishery, science and technology cooperation, as well as a timetable for business arbitration committee talks, visits to Kaesong and Mount Geumgang and exchange of lists and other things, in the form of exchanging documents.

9. The 13th meeting of the Inter-Korean Economic Cooperation Promotion Committee will be held in Pyongyang in September 2006 and the date will be determined after consultation in the form of exchanging documents.

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Oil in the DPRK’s waters

Tuesday, June 6th, 2006

Hat tip to the Korea Liberator:

China and North Korea announce joint efforts to extract oil from the Yellow Sea. According to Yahoo News:

Tuesday June 6, 12:07 PM
China and North Korea have agreed to explore jointly for oil in the Yellow Sea that borders both countries, the Chinese foreign ministry said.

‘China and North Korea have agreed on the joint development of oil resources in the border sea and signed a joint development agreement between governments,’ ministry spokesman Liu Jianchao told journalists.

Liu gave no further details other than to say the two nations will continue work on the details of the arrangements.

Another foreign ministry official later confirmed the area to be jointly developed will be in the Yellow Sea.

The announcement came as North Korean Foreign Minister Paek Nam-Sun ended an eight-day visit to China today, a trip that Liu described as ‘successful’ while giving away few other details.

According to a report issued in December by the Washington-based Center for International Policy, North Korea has already laid claim to three northernmost Yellow Sea basins thought to hold oil.

The North Koreans had discovered up to 3 bln tons of recoverable oil and gas reserves in the Yellow Sea off its coast, the center said, citing a report by Chinese authors in the Marine Geology Letters journal.

China’s foreign ministry gave few details about Paek’s visit to China, other than to say he met Chinese Premier Wen Jiabao and Foreign Minister Li Zhaoxing.

But how much reserves does the DPRK have?  According to the Center for International Policy’s Asia Program,

One-third of 15 exploratory wells have shown oil, and Pyongyang may be sitting on information about larger deposits.

“North Korea has found on the continental shelf of the West Bay basin an area containing 3bn tonnes (21.9bn barrels) of oil and gas reserves,” Li Yandong and Mo Jie wrote in a 2002 issue of journal Marine Geology Letters.

North Korea says these are recoverable reserves pinpointed by its own scientists, said a Chinese expert with knowledge of the situation, who declined to be named.

Even a more modest estimate of 1.2bn barrels reported by Busuph Park, an expert in North Korea’s offshore efforts, would meet centuries of current consumption, although some academics say the peninsula has almost no commercial oil.

At the North Korean embassy in Beijing, an official dismissed with a laugh reports of up to 9bn tonnes of reserves and said the country was still investigating.

Additionally, the story points out the the British company Aminex has committed to building North Korea’s oil industry.  Chief Executive Brian Hall told Reuters, “We have involved their people and are training them, so we are trying to build ourselves into the framework of things.”

“They can take a very long time to do things, we have quite a high degree of frustration sometimes. You have to be prepared to tough it out… but the prize is worth persevering for.”

UK oil firm strides into N Korea
BBC

9/20/2004

Anglo-Irish oil company Aminex has signed a 20-year deal to develop North Korea’s oil industry.

Aminex said it would provide technical assistance to North Korea. In addition, it will be permitted to explore and drill throughout the secretive country.

Should Aminex strike oil, it will get royalties on any of its own production, as well as being entitled to earnings from wells drilled by other firms.

Aminex believes its prospects of striking oil in North Korea are good.

“We all dream of making a big discovery,” chief executive Brian Hall told BBC News Online. “And if you don’t put yourself in a position where the possibilities are high, you will never do it.”

A number of potential sites are close to some of China’s most productive oil fields, he said. Announcing the contract, Aminex called North Korea as “highly prospective”.

Patience rewarded

The company, which is listed on the London and Dublin stock markets, reckons that a lack of resources has so far restricted progress in prospecting for oil the East Asian country.

North Korea “has an existing petroleum industry and several wells have been drilled onshore and offshore over a 25 year period, resulting in limited discoveries of oil,” Mr Hall.

Aminex has been looking at opportunities in North Korea since its first visit there in 2001.

It signed a deal with North Korean officials on 30 June 2004 in Pyongyang but postponed an announcement “because of a number of outstanding issues that have now been resolved”.

Mr Hall said he hoped that developing the oil industry might help to thaw international relations, which have become frosty in recent months amid concerns about the country’s nuclear programme.

“At present, relations between North Korea and the outside world are strained but the important relationship with South Korea appears to be improving and commercial co-operation is on the increase,” said Mr Hall.

“An expanding energy industry may possibly help to build bridges between North Korea and the outside world.”

Tough environment

North Korea is one of the world’s most secretive countries, and among the poorest.

Millions of are thought to have died during the famine of the late 1990s. More recently, North Korean officials have made tentative steps towards economic reforms similar to those implemented by China, one of its few allies. But tensions over the country’s nuclear programme remain a stumbling block to investment.

Aminex has existing operations in the US, Russia and Tanzania.

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Reflections on Kedo

Thursday, June 1st, 2006

Joong Ang Daily
6/1/2007

The Korean Peninsula Energy Development Organization, or KEDO, announced yesterday that the project to build light water reactors at Sinpo, North Korea, has been scrapped. The infiltration of a North Korean submarine into Gangneung, South Korea, in 1996 and the firing of a Daepodong missile in 1998 were all incidents that cast a shadow on the project. In particular, the admission in 2002 by North Korea that it was working on a nuclear program using enriched uranium was the final straw in the Bush administration’s decision to halt a project that it was already skeptical about. In response, the North withdrew from the Nuclear Proliferation Treaty in 2003 and went on to declare in 2005 that it possessed nuclear weapons. Such developments led to today’s situation.

The confrontation between North Korea and the United States does give us something to think about. While agreeing with us on the denuclearization of the Korean Peninsula, the North secretly hung on to developing nuclear weapons. In response, in 1994, we cooperated with the United States but were not even allowed into the negotiations yet we still agreed to cover 70 percent of the cost of the light water reactor project. That may have been inevitable, because South Korea was the country most threatened. Nevertheless, it is debatable whether the negotiations in which Seoul paid the bills but had no say in the matter were the best method. This is an issue that the government needs to ponder seriously.

It has also become clear that the changes in U.S. foreign policy with a new administration are too much for us to deal with. Even though we threw away $1.1 billion, a solution to the North Korean nuclear problem seems to be even further away, Washington continues to cling stubbornly to its new policies.

So the administration should think about what it has learned from this experience and how it should use that knowledge. One good example is the announcement by Seoul last year that it would provide 2 million kilowatts of electricity to the North even before figuring out what the North’s answer would be.

The announcement was billed as an “important proposal,” but the North has turned a blind eye to it and says it wants a light water reactor. With an astronomical amount of tax money already having disappeared, isn’t offering to provide electricity to the North another burden? Whether it’s North Korea or the United States, others have an ability to think strategically and look into their opponents’ minds. Why not us?

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Kaesong products to be marked

Wednesday, May 31st, 2006

Joong Ang Daily
5/31/2006

By the end of the year, products made in North Korea’s Kaesong Industrial Complex, as well as visitors’ passes, will be tagged with special radio chips to speed up customs procedures, the Information Ministry said yesterday.

The Kaesong complex is one of four government projects that will use the radio frequency identification chips.

According to the Information Ministry, embedding the chips on Kaesong-made products with details about the products will shorten the time it takes to get through customs from three hours to 30 minutes.

The government also plans to tag arms and ammunition and install the chips at port facilities to improve logistics and track waste management, such as the safer disposal of medical waste.

The chips ― which contain information about the product to which they are attached as well as its location ― are picked up by radio frequency signals from a control station equipped with a transceiver.

“These projects are the first steps toward the widespread use of these chips in Korea,” an Information Ministry official said.

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Price of Rice Rises Sharply in May

Friday, May 26th, 2006

Daily NK
Kwon Jeong Hyun
5/26/2006

In North Korea, domestic rice prices are showing a sharp rise.  In mid May, the price of rice in North Pyongan province was 1,300W ($0.43)/1kg. Compared to the price in May 2005, it rose 500W ($0.17). In Jangmadang, there is a rumor that rice will rise to 2,000 won ($0.67), so it seems that it’s just a matter of time before rice becomes more expensive.

The reason for the rising cost of rice is simple: a lack of rice. The rice stored in Autumn has begun to run out and there are not enough edible plants to go around. North Korea calls this period the Spring Austerity Season. This period is the hardest season for North Koreans.

The average wage of North Koreans is 3,000W($1). To be more exact, it means that 4 family members have to live off of 1.5kg of rice a month. Everybody struggles to survive by doing business, digging up edible plants, getting help from relatives living in China, and selling scrap iron.

The following is March prices from North Pyongan province. This shows the great difference from this year’s price. Except for food and groceries, the price does not vary much:

Groceries

Rice

1kg 800won – March 7 / 1,300 won in May

1kg 700won(730won by wholesale) – May 21~31

Corn

450 ~ 500won

Pork

1kg – 4,000won

Beef

1kg – 6,500won

Duck meat

1kg – 4,500won

Goat meat

1kg – 4,500won

Mutton

1kg – 4,000won

Egg

Per one – 150won

Edible oil

White

1kg – 2300won

Yellow(bean oil)

1kg – 2,650won

Seasoning

Ajinomoto made in Japan : 450g-2,400won(2,260won by wholesale)

Gaedan made in China : 450g 2,150won(2,050won by wholesale)

 

Clothes

Underwear

Minye, for woman, made in China – 17yuan

Bosuk, for woman, made in China – 21yuan

Gyeongpum, for man, made in china – 26yuan

Soanda, for man, made in China – 31yuan

Socks

Nanais, one pair – 1,050won

Bubu made in China, one pair – 1,250won

Shoes

Man’s hide shoes, fair average quality, made in China – 60yuan

Man’s hide shoes, lower-grade quality, made in China – 50yuan

 

Goods related with a Computer

Monitor 17″

Retail price – 110~120 dollars, Wholesale price – 90 dollars

Printer

65~70 dollars

diskette

5,000won per ten

Keyboard

20dollars

Mouse

5dollars

 

Snacks or Side dishes(March 28 ~31)

Roasted chicken

6,500won~8,000won per one

Potato

1kg – 400won

Roasted duck

9,000won~12,000won per one

Beans

1kg – 700won

Noodle

1Box – 6,750won

Flour

1kg – 750won(690won by wholesale)

Confectionery

1 box – 4,700won

Butter powder

1kg – 5,000won

Rice cake

1box – 8,000won

Chinese noodle

1kg – 2,000won

Dry squid

1kg – 8,800won

Wild walnut powder

25g – 400won

Sweet potato

1kg – 300won

Milk powder

400g – 5,000won

Korean noodle

750g – 2,400won

 

Fruits (March 28 ~ 31)

Mandarin

1kg – 1,800won

Water melon

3kg – 9,000won

Tomato

1kg – 2,000won

Strawberry

1 box – 9,000won

Banana

1 cluster – 5,500won

Pear

1kg – 1,200won

Apple

1kg – 1,200won

 

Leisure (March 28 ~ 31)

Movie

50won

Karaoke

1 hour – 5,000won

Internet cafe

1 hour – 1,000won

Admission fee for Sauna

2,500won

Pool

1 person – 70won

Film

9,000won ~ 15,000won

Mangyeongdae Playground

Adult – 50won, Child – 20won

Print of a photograph

10 ~ 18cm : 800won

A comic book

1,500won (lending – 100won)

 

Taxes and Exchange Rate (March 7 ~ 31)

Exchange Rate

100dollars

March 13

310,000won

March 18

298,000won

March 19

297,000won

March 31

299,500won

100yuan

March 19

37,100won

March 31

37,500won

The present

37,600won

Electronic fee : using for 4 light bulb, a TV, a refrigerator, a recorder(3months) – 600won

Water fee – 10won per capital(3months)

 

Medicines and Medical Instruments

Anodyne

1 pill – 75won

Sphygmomanometer, Stethoscope

25,000won

Aspirin

12 pills – 140won

1 bottle of 5% Glucose

580won

Antibiotics

1 pill 300won(Made in China-30won)

A acupuncture needles case

10won

Cold medicines

1 pill – 30~50won

 

School Things

Pencil

50won

Pencil case

500 ~ 700won

Ball pen

150 ~ 250won

Schoolbag

6,000won

Notebook

350won

Mechanical pencil

1,200won

Eraser

300won

Entrance fee for Shinuiju Medical college including bribe costs

200 ~300 dollars

Money due of private computer shop per meonth

200 ~ 300dollars

 

Housing Prices

Single story house with 2rooms, 1kitchen in a city

Monthly rent 20,000won

Middle quality apartment with 2rooms, 1kitchen

3,000 ~ 3,500dollars

Rent for a 110 square meters Karaoke

40,000won per month

High quality apartment with 3rooms, 1kitchen

70,000dollars

Single story house with 2rooms, 1kitchen

1,500dollars

Single story house with 3rooms, 1kitchen(660㎡)

3,000dollars

 

Others (March 28 ~ 31)

Sanitary napkin

500 ~ 1,000 per one

Cosmetics(Cream, Toner)

Made in S.Korea-10,000won, Made in China-35,000won

3 kinds of toner set

42,000won

Small size gas range

27,000won(25,000won by wholesale)

3 kinds of Aloe set

42000won

Auto bike

150 ~ 200dollars

TV

Sony, used, made in Japan – 680yuan

Gukhwa, used, made in China – 350yuan

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In Deep South, North Koreans Find a Hot Market

Thursday, May 25th, 2006

New York Times
NORIMITSU ONISHI
5/25/2006

TAEJON, South Korea — At the Pyongyang Moran Bar on a recent Friday evening, a large video screen showed uplifting images of rocky mountains and an open blue sky. A slogan appeared at the bottom: “Kim Jong Il, a man who comes along only once in a thousand years.”

The North Korean waitresses wore traditional dresses in the bright colors that were fashionable in the South some years back. The singer’s interpretation of “Whistle,” a North Korean standard of the 1980’s, was shaky and off-key. Service was bad and included at least one mild threat. Drinks were spilled, beer bottles left unopened and unpoured.

But the South Korean customers could not get enough of the Pyongyang Moran Bar.

“Encore!” cried Bae Seong Wan, 44, at the end of “Whistle.”

The Pyongyang Moran Bar is located, not north of the demilitarized zone, but here in downtown Taejon, a city in the South Korean heartland.

The 120-seat bar opened in February, complete with inferior North Korean beverages, North Korean landscape posters, North Korean songs, a photo of Mr. Kim above the bar counter with his South Korean counterpart and, most important, North Korean waitresses — or, as a sign outside announced, “beautiful girls from North Korea!”

Until the 1990’s, South Korean schoolchildren were awarded prizes for drawing posters depicting diabolical North Koreans. Then the South’s so-called sunshine policy of engagement transformed North Koreans into real human beings in the minds of South Koreans and in popular movies like “Joint Security Area.”

Now, after more than half a decade of rapprochement, the North is all the rage, in a retro-kitschy fashion, and North Koreans are seen not as threatening aggressors but as country bumpkin cousins, needing an introduction to big-city life.

North Korean defectors and South Koreans alike are opening North Korean-themed restaurants, selling North Korean goods and auctioning off North Korean artwork on www.NKMall.com.

Half a century of division has turned the South into the world’s most wired society, as its consumer products and pop culture increasingly shape the tastes of youth across Asia.

North Korea, meanwhile, has remained frozen in time, a repository — at least to someone with a sharp nose for marketing — of an unchanged Korea.

“North Korea is retro,” said Jong Su Ban, 42, a North Korean defector who plans to open a North Korean restaurant, Ok Ru Ok, in Seoul soon. “It reminds South Koreans of the 1950’s and 1960’s, before South Korea industrialized. They see handmade crafts that are not sophisticated, and they think, ‘It’s like us before we developed.’ ”

The timing was right, Mr. Jong said, pointing out that only a few years ago a restaurant in Seoul with a waiter dressed as a North Korean soldier went belly up fast. “He made people uncomfortable,” he said.

At a company called NK Food, Hong Chang Ryo, 45, a South Korean who opened two North Korean restaurants in Seoul this year and is planning to open a third here, agreed.

“Even two or three years ago,” he said, “we couldn’t have done this. We would have been fingered as commies.”

Mr. Hong’s first restaurant, Nalrae, Nalrae — or fast, fast in the North Korean dialect — “invites you to a different taste” with more than 27 dishes named after places in the North. Shelves stocked with mushrooms, alcoholic beverages, seaweed — “straight from Pyongyang” — are the main attractions in the restaurant, which is painted organic green. A menu promises “nonpolluted, well-being dishes using natural resources from North Korea.”

“It feels rural, natural, unpolluted,” said one first-time customer, Lee Sae Mie, 23, a university student.

While about 40 percent of the dishes’ ingredients come from the North, Mr. Hong said, the flavors had to be adjusted, considerably, to appeal to South Korean palates.

“We had to rack our brains,” Mr. Hong said. “We all know they just eat cornmeal over there. Well, we just don’t know what they’re eating over there. So we mixed and matched. Dishes may look North Korean but actually taste South Korean.”

Increasingly, though, people are parting with South Korean won to buy goods from www.NKMall.com, which Park Young Bok, a South Korean, set up in 2003. The site sells mostly food products, which shoppers can also buy at 70 stores nationwide.

Last September, Mr. Park added an auction for North Korean paintings, which have been selling briskly, reaching $115,000 in sales in April. With South Korean officials still banning artwork with political content, most of the imports are of landscapes — though, oddly, a tapestry of the Virgin Mary was auctioned off recently for $80.

At his warehouse just outside Seoul, Mr. Park showed off some of the 30 North Korean alcoholic beverages he sells — some of them with labels slapped crookedly on the bottles, others with the contents partly evaporated because of poor bottling.

But to hear some of the patrons at the Pyongyang Moran Bar here tell it, leaking bottles, even bad service, are part of the North Korean appeal.

“I don’t know how to open this,” said one waitress struggling with a bottle of Budweiser. The waitress — who had worked at the bar for only two days and who, like many North Koreans, had never opened a bottle before — tried to get the top off, then handed the bottle to the customer, who opened it himself.

Another customer, Kim Chung Sig, 39, said, “I don’t expect the service to be good here.”

Choi Jung Hee, 37, the manager, said she had trouble training her North Korean staff of five waitresses. “At least, they should say, ‘Hello!’ properly when customers come in, but they don’t,” she said.

“Things are very different in North Korea,” she said. “Over there, waitresses and salespeople are kings because they have access to goods. But here you have to treat customers like kings. You have to bow to them and be polite even if they are rude.”

Reaction to the bar is decidedly split, an indication, said Mr. Jong, the North Korean who is opening up Ok Ru Ok, that South Koreans see in North Korea what they want to see.

Older South Koreans, who still look upon the North as an enemy, want to see images of starving North Korean babies, Mr. Jong said. Younger people, who often want friendly relations with the North, want to see the clean streets of Pyongyang.

“Both sides want to satisfy their beliefs,” Mr. Jong said, standing inside his soon-to-open restaurant. “That’s why I’ll put up only neutral images of North Korea in my new restaurant.”

Everything has fallen into place now for Mr. Jong, who came to South Korea in 2000 and earned a living writing pornography before plunging into food. He has even secured a supply of the North’s coveted Taedong River beer.

“When I lived in North Korea,” Mr. Jong said, “I never knew that this beer even existed. I’ll have North Korean beer for the first time in South Korea. I lived in a very funny country.”

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Moody’s pessimistic on DPRK reform

Wednesday, May 24th, 2006

Will this have repercussions in the south’s credit rating?

From the Daily NK:

On May 22, an official of Moody’s Investor Service, a Credit Rating Agency, announced that despite Kim Jong Il’s visit to China early this year, North Korea did not show indications for internal economic reformation.

On May 22, Vice-president Thomas Byrne of Moody’s Investor Service rated the possibility of North Korea towards economic reformation negative in the North Korean Economic Outlook Symposium held by Institute for Corean-American Studies(ICAS) in the Rusell Senate Building.

Vice-president Byrne estimated that North Korea failed to adjust its currency and exchange rate, and its trade environment was not improved, so that rather its economic situation was worse. Plus, he emphasized that North Korea did not show any signs of internal economic reformation.

He said about Gaesung Industrial Complex that, “If 5 more complexes like Gaesung Industrial Complex develop, we can see North Korea be in the economic reformation’s process, yet the Complex is no more than a symbol”. He emphasized that if North Korea has a strong resolute for economic reformation, “it should follow the economic model of South Korea because the way to Seoul is easier than the train to Shanghai for it”.

Vice-president Byrne warned that if South Korea would continue to support North Korea economically, it would face economic crisis soon.

While saying that, “The difference between the approaches of South Korea and the U.S is not great enough to make an impact on the credit rating of South Korea”, he stated, “Due to North Korea, South Korea always gets a lower credit rating than its original rating”.

Meanwhile, a special correspondent informed that North Korean-Chinese trader Lee Dae Kil(pseudonym, 49) who recently came back from North Korea showed a negative opinion about North Korean economy.

Mr. Lee said that, “There has been little profit in spite of trades with North Koreans for a few years”, and “North Koreans buy and sell only for living, not for investment for profits. He said that, “The North Korean government does not show even such efforts”,.

Mr. Lee said that, “After it was known that the U.S blocked banks banking with North Korea, dollar transactions sharply decreased”, and “There were people who even asked me about what happened outside”.

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Seoul may face fiscal challenge to future DPRK aid

Tuesday, May 23rd, 2006

From Yonhap:

By Lee Dong-min
WASHINGTON, May 22 (Yonhap) — South Korea is fiscally able to handle its economic aid to North Korea, but the situation may change in the future when it will be required to spend more on its social welfare system, a senior official at Moody’s suggested Monday.

Speaking at a symposium by the Institute for Corean-American Studies (ICAS), Thomas Byrne, vice president of the international credit rating agency, said he does agree that North Korea is headed to meaningful economic reforms.

South Korea is one of three nations whose geopolitical risks are considered in judging its credit rating. Israel and Taiwan are the others.

Divided since the end of the three-year Korean War in 1953, the Korean Peninsula remains tense and volatile as Pyongyang seeks nuclear weapons it claims it needs as a deterrent against possible U.S. attack.

According to Byrne, the situation keeps South Korea one notch below the credit rating it normally deserves.

In trying to ease the tension, Seoul has been trying to engage Pyongyang by providing food and other types of economic assistance. A recent project involves an industrial complex in the North Korean border city of Kaesong where South Korea’s smaller firms have built manufacturing plants to use North Korea’s cheap labor force to make their products more price-competitive.

Byrne said Moody’s assesses the fiscal implications of South Korea helping to keep North Korea’s debilitated economy afloat.

“In fact, the North Korean economy is more unstable now,” he said, citing hyperinflation, backfired currency reform efforts and minuscule international trade hovering at US$3 billion a year.

Seoul, along with Beijing, is a major donor to Pyongyang, but it may be pressured to think otherwise, according to the Moody’s official.

With its aging society and expected large expenditures in social welfare and health care, South Korea will need a larger domestic budget, he said.

“Domestic social welfare demands would compete with sunshine/co-prosperity policy if the latter continues to increase, or increase sharply in the future,” said Byrne.

Despite North Korean leader Kim Jong-il’s visits to China that many saw as his study of Beijing’s economic reform path, the Moody’s official didn’t see any significant signs.

“I don’t see any internally generated reform process,” he said. “North Koreans aren’t anywhere near the positions of embarking on policies of China… or Vietnam.”

Kaesong is, at least for now, more important for South Korea than North Korea and not enough to show that Pyongyang is changing, he said, “If there were five other Kaesongs in North Korea, then it may mean something to North Korea… then, maybe North Korea is changing,” Byrne said.

The tension over North Korea’s nuclear problem intensified with U.S. accusations that Pyongyang was counterfeiting American currency and dealing in contraband.

In September, the U.S. Treasury designated Macau’s Banco Delta Asia (BDA) a primary money laundering entity working for North Korea, saying the bank was abetting Pyongyang’s illicit financial activities.

Daniel Glaser, deputy assistant secretary of treasury, said there is “very little question” that North Korea was involved in counterfeiting U.S. dollars, mostly $100 notes commonly called “supernotes.”

“Every seizure of these notes has been linked to each other… all of them have involved distribution by North Korean diplomats,” he told the ICAS symposium.

He again denied that the action against BDA was in any way meant to affect the nuclear negotiations with North Korea.

“This is a new approach to U.S. national security,” Glaser said, emphasizing that it was under new laws and newly created offices that steps like those against BDA were coordinated.

Wendy Cutler, assistant U.S. trade representative, focused on upcoming free trade agreement (FTA) negotiations with South Korea that she hopes will have far-reaching effects beyond the two nations.

“This agreement will help underscore U.S. commitment to engage the Asian region … the U.S. is committed to developing robust trade relationships in Asia,” she told the symposium.

Seoul and Washington will hold their first formal FTA talks next month in Washington and hope to come up with a final draft by end of this year.

Cutler, who heads the U.S. side in the negotiations, noted that FTAs require political decisions that defy strong domestic opposition.

FTA opponents in South Korea plan to come to Washington to protest the launch of the negotiations, alarming law enforcement officials of both countries.

Cutler said despite press reports of such opposition, polls indicate general support.

“It’s important to know that the Roh (Moo-hyun) administration and the majority of the Korean population and business community support the FTA,” she said.

A U.S. trade official, reacting to reports of protesters coming to Washington, cited the same polls.

“You need to keep in mind that based on polls in Korea, overall sentiment in Korea is strong support for the FTA,” the official said.

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An affiliate of 38 North