North Korean Economy Watch

According to the Choson Ilbo:

According to a report by the Ministry of Unification submitted to the National Assembly, there are about 120 companies operating at the complex employing over 44,000 North Koreans.

The number of workers continues to grow from 42,000 in January to 43,000 in April to 44,000 this month, the report said.

Read the full story here:
Number of N.Korean Workers at Kaesong Increases Despite Inter-Korean Tensions
Choson Ilbo
6/24/2010

Download the report here.

According to the Daily NK:

The U.S. Department of State released its 10th “Trafficking in Persons Report (TIP)” yesterday, once again classifying North Korea as “Tier 3,” meaning it is a country whose government does not “fully comply with the minimum standards” and is “not making significant efforts to do so.” The North joins Cuba, Kuwait, Sudan, Zimbabwe and another eight countries in Tier 3, the lowest on the list.

North Korea has been in Tier 3 since 2003, when it first appeared on the TIP.

The TIP recommends that Pyongyang move to “improve the poor economic, social, political, and human rights conditions in North Korea that render North Koreans highly vulnerable to trafficking; recognize human trafficking as a problem in North Korea; cease the systematic punishment of trafficking victims in forced labor camps and others.”

However, the report defines North Korea as a place which has made “little, if any, efforts to combat trafficking in persons through law enforcement efforts over the last year, and continued to severely restrict the movement of its citizens internally and across its borders.” It also adds, “The North Korean government continues to deny the existence of trafficking as a problem. Little information is available on North Korea’s internal legal system.”

The report explains that the most common form of trafficking involves North Korean women and girls who are forced into marriage or prostitution in China. Another form is the forced labor which is a key part of the North Korean system of political repression. As an example, the report mentions “labor mobilization campaign such as the ‘150-Day Battle’ and ‘100-Day Battle’ in 2009.”

North Korea’s notorious prison camps also come up in the report, which says, “An estimated 150,000 to 200,000 persons are held in detention camps in remote areas of the country; many of these prisoners were not duly convicted of a criminal offense. In prison camps, all prisoners, including children, are subject to forced labor, including logging, mining, and farming for long hours under harsh conditions.”

Meanwhile, the TIP also designates China as a country on the State Department’s “Tier 2 Watch List”, just one level above North Korea, and recommends that it “cease the practice of forcibly repatriating North Korean trafficking victims,” pointing out that repatriated North Koreans face harsh punishment upon their return.

Read the full sotry here:
North Koreans Vulnerable to Human Trafficking
Daily NK
Choi Yong Sang
6/15/2010

According to Barbara Demick at the Los Angeles Times:

The numbers change daily, but as of early this month, 818 South Koreans were still working alongside roughly 43,000 North Koreans. Despite the supposed ban on North Korean products, South Korea recently accepted delivery of 20 tons of peeled garlic as well as $17,000 worth of clothing and $250,000 of electrical sockets.

Lim, who is in touch with many workers and managers, says that on a human level, relations between the Koreans at Kaesong are not as hostile as one might imagine. He paraphrased North Korean bureaucrats whispering to South Koreans, “We hate Lee Myung-bak’s government but not you as people.”

The South Koreans at Kaesong either commute — downtown Seoul is only 30 miles away — or live for up to two weeks at a time in dormitories attached to the factories. There they can watch South Korean television and make telephone calls home, although they have no access to the Internet.

Since the recent crisis erupted, the South Korean government has ordered Kaesong’s factory owners to reduce their staffing, fearful of what might happen if the war of words were to erupt into an actual war.

South Korean Defense Minister Kim Tae-young said during parliamentary committee meetings last month that there was a “a great possibility” that South Korean workers could be taken hostage by the North Koreans.

To South Korean factory owners, the idea is preposterous.

“People who have never been to Kaesong and who are only watching the television news keep asking our employees, ‘Are you guys all right?’ ” said Park Yoon-gyu, president of South Korean menswear manufacturer Fine Renown, which has operated out of Kaesong since 2008.

“We South Koreans and North Koreans have become very close to each other,” he said. “Yesterday’s enemies are today’s friends.”

But a South Korean worker who spoke anonymously to the conservative Chosun Ilbo newspaper gave a less sanguine account of the atmosphere at Kaesong. He said that armed North Korean soldiers had been seen inside the compound, despite rules forbidding their presence.

The man also said that North Korean employees were stealing food, office supplies and toilet paper, and even grass seeds from a newly planted lawn, apparently following official orders to take whatever they could from South Korean companies.

Both North and South Korea have substantial amounts of money at stake in Kaesong, which lies just south of the 38th parallel — where the peninsula was divided at the end of World War II — but changed hands during the Korean War.

Kaesong is home to 120 South Korean factories, each of which required an investment of as much as $8 million, according to scholar Lim. For cash-starved North Korea, Kaesong is one of the dwindling sources of hard currency. The North Korean workers receive monthly salaries of $70 to $80, of which all but about $20 goes to the government.

Even in the crisis, the industrial park could help defuse tensions. South Korea hasn’t followed through on its threat to resume propaganda broadcasts at the DMZ, in part out of concern about what might happen to workers at Kaesong. Loudspeakers have been installed at 11 locations but remain quiet — for now, at least.

As an aside, Paul Romer is trying to push the founding of charter cities as a new strategy of reducing poverty in the developing world.  A brief summary of his work has been published in The Atlantic and is worth a read.

You can read the full Los Angeles Times story here:
For Koreas, business park remains a neutral zone
Los Angeles Times
Barbara Demick and Ju-min Park
6/13/2010

According to the Choson Ilbo:

North Korea on Sunday warned it will restrict or stop overland travel to the Kaesong Industrial Complex if South Korean activists send propaganda leaflets to the North. The North said it could limit travel “along the east and west coast” — the land routes used for tours to Mt. Kumgang and the Kaesong complex.

The head of a North Korean delegation to inter-Korean defense talks sent a letter to the South which read, “Despite our repeated requests, the South Korean government goaded and tacitly permitted activists to send propaganda leaflets that castigate our ideology and regime, small radios, US$1 bills and DVDs [via helium balloons] from May 1.”

A South Korean government official said this is the first time that North Korea clearly mentioned the possibility of shutting down the land route to the Kaesong complex. “It seems to be a preemptive action as we are reviewing sanctions against the North” following the sinking of the Navy corvette Cheonan and the seizure of South Korean property in Mt. Kumgang.

Additional Information
Pyongyang has previously used Kaesong as leverage over the RoK government to prevent activists from sending balloons across the DMZ.

The Kaesong Zone was previously “closed” to South Koreans during contentious wage negotiations.

Stars and Stripes (h/t NKnews.org)
Jon Rabiroff and Hwang Hae-rym,
4/29/2010

Kim Na-rae regularly travels three miles into enemy territory inside North Korea to work as a clothing embroidery designer — ignoring threats that the leadership there will someday turn Kim’s homeland into a “sea of fire.”

She is one of the 1,000 or so South Koreans who routinely venture across the Demilitarized Zone into North Korea to work at the Kaesong Industrial Complex, even though the two countries are technically at war and come close to resuming hostilities a couple of times each year.

Last week, South Korean President Lee Myung-bak met with two former presidents, Chun Doo-hwan and Kim Young-sam, who reportedly suggested shutting down Kaesong in response to North Korea’s suspected role in the March 26 sinking of the Cheonan, a South Korean warship.

The square-mile-plus complex — home to about 120 South Korean companies and more than 43,000 workers — was developed under former South Korean President Kim Dae-jung’s “Sunshine Policy” of promoting North-South relations and business opportunities.

It was launched during the administration of former President Roh Moo-hyun.

However, long-term plans to expand the complex to more than 25 square miles, 2,000 companies and 600,000 workers are frequently stalled by continuing friction between the North and the South.

The future of the 5-year-old complex is once again in doubt.

In a statement released in early April through the official Korean Central News Agency, the North said it would “entirely re-evaluate” its involvement in the Kaesong Industrial Complex if relations continue along a confrontational path.

Last week, South Korean media reports — citing an unnamed South Korean Unification Ministry official — said North Korean military officials who inspected the complex expressed concerns the South could use high-rises there to spy on the North or sneak troops into the country through the complex’s water system. The inspection intensified speculation the North might end or suspend its participation in the complex.

In a dispute last week, the North confiscated five buildings owned by South Korea at Diamond Mountain — a jointly operated tourist resort in North Korea that, much like the industrial complex, was designed to benefit South Korean businesses and the North Korean economy.

The North said it was seizing the buildings as compensation for losses it has sustained since the South stopped sending tours in 2008 after a North Korean soldier shot a South Korean tourist who reportedly wandered near a restricted area. The North said the shooting was accidental.

During its short history, the  industrial complex “seems to hang there in limbo … swinging back and forth depending on the political winds at the time,” according to David Garretson, an international relations professor at the University of Maryland’s University College in South Korea.

For her part, Kim said she plans to continue working, trying to shut out the political posturing.

“I was very nervous and afraid about going into North Korea at first,” she said. “But I’ve found out [North Koreans] are more pure and naive than South Koreans. They don’t easily get angry. They just work hard.”

Cheap labor

When the complex opened in December 2004, benefits for both countries were clear.

The impoverished North would open a flow of cash into the country through land leases and wages that factories paid to tens of thousands of North Korean workers.

Businesses in the South would get access to low-paid workers for the labor-intensive production of clothes, electronics equipment, kitchen appliances and more.

If not for Kaesong, those businesses would have to look to open factories in such countries as Vietnam, Cambodia or Indonesia, according to Ok Sung-seok, president of the Nine Mode Co. and vice-chairman of the Kaesong Industrial Park Corporations Association.

Kaesong factories now produce goods worth more than $250 million a year. North Korean workers there make about $65 a month, but can earn as much as $90 by working overtime in addition to their regular 45-hour workweeks, Ok said.

South Koreans work primarily in managerial positions, and their pay varies depending on their employer. Most work three or four days a week, and while some return to their homes each day, many stay overnight between workdays in dormitorylike accommodations.

Canadian Navy Lt. Cmdr. Hugh Son, the United Nations Command Military Armistice Commission’s corridor control officer, said Kaesong workers have told him there are no armed North Korean guards manning the complex, but there is always “a presence” of security personnel.

Kwak Sang-bae, president of the Chung Song Trade Co. at Kaesong, said every business in the complex has a North Korean government official assigned to oversee and represent North Korean workers.

To Ok, the arrangement at Kaesong goes beyond commerce.

“I’ll never forget the touching moment of seeing South Koreans and North Koreans working together, side by side … when my factory first opened,” he said. “Cultivating and spreading the spirit of freedom to the Kaesong people is very inspiring.”

Ok fears further growth in factories could be jeopardized “because of the latest aggravated, unstable situation between the two Koreas.”

Convoy crossings

Because relations between the two Koreas have been tense even in the best of times, transportation between South Korea and the industrial complex is complicated.

For the project to begin, both countries had to clear what is now the Western Transportation Corridor — a yearlong effort that, on the South Korea side alone, required the removal of 1,700 land mines, Son said.

Now 20 DMZ convoys cross each day, with workers from the South going back and forth and materials heading North and manufactured goods heading South. Everybody must clear customs and immigration in both countries, going both ways, and no one is allowed to cross the DMZ without being granted clearance at least three days in advance, Son said.

After manifests are checked and immigration and customs are cleared, vehicles heading north line up for inspection. South Korean and U.N. vehicles then escort them as a convoy from the southern boundary of the DMZ to a point close to the Military Demarcation Line — the official border between the two countries and the midpoint of the DMZ.

After the convoy crosses the border, two North Korean military jeeps take over escorting duties to the industrial complex.

The corridor has been closed to vehicles on occasions when tensions between the two countries have been high. Son said the last time was for two days during the 2009 U.S.-South Korea Key Resolve/Foal Eagle exercise, an annual event the North routinely condemns as an act of aggression.

Small talk

Ok said North Korean and South Korean workers at the complex are free to talk with each other about anything, except politics or government.

“We usually talk about our families, like how your children study well at school, or about our lives,” he said. “Listening to them, I cannot help thinking that there is a huge difference in the standards of living between us.

“And the lack of food makes them not grow tall enough. They are generally shorter than us.”

Kwak said that when his company opened a men’s clothing factory in the complex in 2007, Moon Pies were handed out to all the workers.

None of the North Koreans ate their snack.

“Instead, they put these very small pies into their pockets to bring home so they could give them to their children, even though they were hungry themselves,” he said. “I got choked up.”

Nationalism does sometimes find its way into conversations.

Yu Eun-jae, who is in charge of distribution for a cell phone parts manufacturer in the complex, said he stopped sharing details of his personal life at work, because a North Korean worker kept saying how far superior his country’s education system is compared to South Korea’s.

“ ‘Going to universities in North Korea is free,’ ” the worker would say, according to Yu. “ ‘How can you send your children to universities that are so expensive in South Korea?’ ”

Kwak said he believes North Korean workers at the Kaesong factories enjoy an atmosphere of freedom they would not find in state run businesses in the North.

Still, he added, “I am afraid and worried that we could be in danger if hostilities get worse. But, as a businessman, I am trying to do my best under the circumstances.”

Garretson doesn’t believe either country will “pull the plug” on the complex, because too much would be lost for both sides.

“It is a point where they meet, so there’s going to be friction,” he said.

The complex for both sides “is very profitable. At the same time, the communication is there for both sides,” said Son, the Canadian lieutenant commander with the U.N.

“I’m ethnically Korean … and I hope things work out,” he said. “I would love to come back here one day and take a tour of North Korea.”

Daily NK
Yoo Gwan Hee
4/5/2010

In North Korea, April 1st is commemorated as “Tax Abolition Day.” Ever since the law, “On Completely Abolishing Taxes,” was ratified through the Supreme People’s Assembly on March 21, 1974, North Korea has claimed both within and without to be the only country in the world that does not collect taxes. However, their claim is only for propaganda purposes, for North Koreans labor under a list of state-imposed taxes and duties which grows longer day by day.

Take the example of electricity. Power distribution center members in every city and town visit households in their region alongside the chairperson of the local People’s Unit, whereupon they collect electricity payments according to the number of electric bulbs and electronic equipment therein. This process is done quarterly. In the late 1990s, the quarterly electricity bill per household in Pyongyang was about 20 won. To reduce costs, of course there were people who removed electric bulbs and hid electronic equipment such as irons whenever the power distribution center had workers in their neighborhood.

Since the 2002 economic management reforms were announced on July 1, however, electricity bills have increased greatly. For families living in luxurious apartments in the Jung-district of Pyongyang with televisions, refrigerators and electric fans, households pay as much as 800 or 900 won per quarter.

After the so-called July 1 Reform Measure, troubles between the power distribution center and the people increased. The North Korean people were understandably displeased with the power distribution center, for it was trying to collect money for a utility whose availability was and remains far from regular.

Next, let’s look at reserve food and organizational expenses. North Korea has nine levels of food distribution. From 100g to 900g is supposed to be distributed per day depending on the level, but for the purpose of stocking up reserves, up to 100g is collected from the people instead. Additionally, people are forced to submit approximately two percent of their salary for organizational expenses.

Next, to support for the construction of historical sites. North Korea emphasizes the “voluntary participation” of the North Korean people under the Party apparatus and workers’ organizations. Construction of historical sites for the idolization of Kim Il Sung and Kim Jong Il is frequently organized. Also, officials often collect money from people in order to support those construction projects of which the cabinet is in charge.

Then there is free education. It is officially called “free education,” but school administration expenses are all covered by students and parents. Students have to collect waste paper, waste iron and waste rubber, or raise rabbits and submit the pelts to school. After 2000, there have even been students engaging in business around markets in order to provide supplies for submission to the school.

Onwards, then, to market stands rental fees. After the July 1 Reform Measure, the amount of tax collected at markets suddenly increased. Market stand rental fees already existed before the July 1 Reform Measure but, after 2002, market management centers started collecting market management tax as well, basing it on each product sold. Noodle sellers paid ten won per day, while soybean curd sellers paid three won.

Market stand rental fees became more systematic as well after general markets opened in late 2003. According to the product being sold and daily sales figures, market management centers charged rental fees. In present-day Nammun Market, Hoiryeong, the stand rental fee is said to have been fixed at 100 won per month.

Separate from the stand rental fee, monthly tax is charged on products for sale in the markets. For example, Nammun merchants pay additional taxes of 300 won for industrial goods, 180 won for pork, 150 for cigarettes, alcoholic drinks and fish, 120 won for food and 100 won for general merchandise.

So, while the North Korean media deliver their diet of propaganda promoting North Korea as the world’s only taxless country, be wise to the reality of the North Korean people suffering under an increasing tax burden.

UPDATE:  Football officials deny DPRK laborers working on stadiums. South Korea trying to confirm.

ORIGINAL POST: Over the last few years I have developed a growing catalogue of North Korean-made buildings and monuments in Africa (like this)–so I was very interested to read that North Korean laborers are working on South Africa’s World Cup football stadiums.

According to the Joong Ang Daily:

When North Korean national football players take the field against the Ivory Coast in their final Group G match in the 2010 International Football Association’s World Cup in South Africa, they will be playing at a stadium their compatriots helped build.

South Korean sources said yesterday North Korean laborers are helping to put the finishing touch on stadiums across South Africa ahead of the World Cup, which will kick off in June.

“North Koreans have been put to work on four to five stadiums that require renovation, including Soccer City stadium in Johannesburg [satellite image here], where the opening and closing ceremonies, plus the final will be staged,” a source said. “There are an estimated 1,000 North Koreans there.”

One such stadium is Mbombela Stadium in Nelspruit (Location here but image takem before construction). The North will face the Ivory Coast on June 25 in this 43,500-seat stadium.The South African government has slated 12 billion rand, or $1.6 billion, for 10 stadiums in nine different cities, and North Korean laborers are expected to reap tens of thousands of dollars for their job.

“During the Kim Il Sung era, North Korea built football stadiums and even presidential halls in African nations,” recalled Lim Il, a North Korean defector who used to work for a construction company in the North. “Perhaps such experience helped secure the South African job.”

North Korea and South Africa established formal diplomatic ties in August 1998. This is their first major personnel exchange since then. It is not yet clear if the workers in South Africa will return home upon completing the World Cup work or will be dispatched to other construction projects.

Helping South Africa can be interpreted as an attempt to earn some much-needed foreign capital. North Korea has up to 30,000 laborers in China, Russia and some Middle Eastern countries. Last September, North Korea sent nearly 50 workers from the state-run Mansudae Art Studio in Pyongyang to construct the 160-foot, $27-million statue depicting a family rising from a volcano in Senegal.

One South Korean government official said, “The North government will likely demand loyalty from those workers and collect their wages to add to their foreign currency reserve.”

If anyone can help me identify the stadiums on which the North Koreans are working I would appreciate it.

Read the full story here:
North hard at work on Cup stadiums
Joong Ang Daily
Lee Young-jong
3/15/2010

Choson Ilbo
3/9/2010

North Korea has launched a massive campaign to persuade people into farming to make up for a shortage, giving them ideological indoctrination and offering large benefits, sources say.

Civic group North Korea Intellectuals Solidarity said the party held seminars at party chapters on Feb. 23 promising W10,000 in cash and 120 kg of food for households if they voluntarily move to farms.

The Workers’ Party recently distributed copies of a training manual for senior officials on fortifying rural bases. “To increase grain production the most important thing is to make up for a shortage in the rural workforce. This is why blue-collar workers and office workers in urban areas, senior officials in particular, should lead the vanguard in the campaign.” The regime is urging the wives of senior officials in the party and security agencies to set an example for others.

The regime is afraid of the possibility of mounting public discontent if it forces people to relocate at a time when they are seething in the wake of a disastrous currency reform. The regime is giving indoctrination classes to senior officials to move to rural areas and urging them to set an example, news media speculated.

But the group said such efforts would not be effective in persuading ordinary North Koreans to move to rural areas because living conditions there are very bad. “It’s very likely that the regime will end up forcibly relocating them,” it added.

Andrei Lankov offers some thoughtful analysis on recent North Korea developments in the Asia Times:

Contrary to oft-stated accusations, Pyongyang leaders are neither irrational nor ideology-driven; they are a bunch of brilliant Machiavellians, very apt at exploiting the fears and controversies of their enemies and their partners alike.

Their country’s economy is in a sorry state, to be sure, but survival of the population has never been a major item on their agenda. They just want to stay in control and not be overthrown by popular insurrection or by a coup – they are very good at this game.

…

However, over the past year or so, something strange has begun to happen in Pyongyang. The North Korean leadership has taken some actions that have clearly damaged the interests of the ruling clique. It seems that the once formidable manipulators have for some reason lost their ability to judge and plan.

The recent currency reform is the best example of such weird and self-defeating policy decisions. For years, the Pyongyang government has waged campaigns against the unofficial and semi-official markets that have played a decisive role in North Korea’s economic life since the collapse of the state-run economy in the 1990s. As another move in this ongoing (and, perhaps, unwinnable) struggle, last November the government initiated currency reform that was meant to undermine the power of black-market merchants.

The reform was modeled on confiscation-oriented currency reforms once used in the Soviet Union and other communist countries. One morning, the populace suddenly learned that old bank notes were null and void and had to be changed for new ones within a week. The exchange rate was set as 1:100, so, for example, 1,000 “old” won should be exchanged for 10 “new” won.

Accordingly, all retail prices and fees were also reduced one hundred times. Harsh exchange limits were introduced: only the equivalent of US$30 in cash could be changed by one person. The use of foreign currency, which had become very common in North Korea’s retail economy, was banned.

The measures are standard for communist-style currency reform, since such reform usually pursues the double goal of fighting inflation and reducing the power and influence of the unofficial black economy.

However, North Korea’s planners also did something unexpected: they claimed that nominal wages and salaries would not change. In other words, a person who prior to the reform received a monthly salary of 3,000 won, would still receive 3,000 won, but paid in the new currency. Effectively, it meant that all wages in the country suddenly increased 100 times. To assure consumers, the government issued stern warnings against profiteers who dared to raise prices of goods and services.

For a brief while in December and early January, North Korean customers felt rich and consumers expected that even such luxuries as, say, Chinese bikes (a North Korean equivalent to a Porsche) were now within their reach.

The actual result was less impressive. The dramatic increase in salaries launched an equally dramatic round of inflation, so in the past three months the price of rice (and the black market exchange rate) has increased 50 times, from the official required 20 “new” won per kilogram to 1,000 “new” won. The government’s “stern warnings” were ignored. In the near future, prices are likely to return to pre-reform levels. The reform has failed completely and it only succeeded in making people irritated and in demonstrating the government’s inability to control a situation.

The unprecedented decision to raise wages doomed the entire affair from the start. But why was it done? Why was an otherwise standard package of well-tested measures saddled with this self-defeating (and, frankly, stupid) addition?

In the realm of diplomacy, North Korea is not faring much better. For decades, Pyongyang has demonstrated uncanny skills in manipulating its neighbors from whom it squeezed unconditional aid and unilateral concessions. The usual tactics consisted of three stages. In the first stage, the North Koreans raise tensions. Secondly, they launch missiles, test nuclear devices and make threatening statements. Finally, once tensions are sufficiently high for the world to feel uneasy, there are negotiations in which Pyongyang extracts aid that is essentially a reward for calming a crisis the North itself manufactured.

This time, both stage one and stage two were seriously mishandled. First, the North Koreans used both their trump blackmail cards – a nuclear test and a missile launch – almost simultaneously (analysts expected space of at least a few months before these two events). They also showered Washington with especially bellicose rhetoric, even though the Barack Obama administration was initially relatively soft on the North Korean issue.

As a result, the excessive activity of the North Koreans backfired: the US foreign policy establishment finally realized that North Korea would not surrender its nuclear program under whatever circumstances. This reassessment of the situation (or belated realization) meant that the US was now far less willing to shower Pyongyang with concessions. In the past, gifts were presented as incentives to surrender nuclear weapons, and since such surrender is now seen as unlikely, such generosity is not necessary. (See US finally wise to Pyongyang’s ways, Asia Times Online, November 12, 2009)

The North Koreans are now beginning to realize that the old trick is not working. They have only themselves to blame. Had they been slightly more careful last year, a significant part of the US establishment would still nurture the illusionary dream of “denuclearization through negotiations”.

The third stage of asking for aid was also handled badly. The unnecessarily aggressive rhetoric of the past was replaced by unusual softness in a short time – previously, the switch took months. Since August, North Korea has essentially begged to restart negotiations with the US and, especially, South Korea.

Pyongyang is demanding to restart cooperation projects. It is quite remarkable, since two of the three major projects – tours of Keumgang Mountain and Kaesong city tours – were abruptly stopped by North Korean authorities a year ago. Needless to say, the South Korean government is not too eager to restart negotiations. After all, so-called intra-Korean cooperation is essentially unilateral South Korean aid in disguise and Seoul sees no reason why it should hurry with the resumption of money transfers to Pyongyang. North Korean softness is (wrongly) seen by Seoul hardliners as a victory of the hard line they are advocating, so they say that an even harder approach will probably bring greater success.

Meanwhile, the North Korean government also did something it has never done before: it said “sorry” to the people. In January, Nodong Sinmun, a government mouthpiece, reported that Dear Leader Kim Jong-il felt bad for being unable to provide his subjects with the level of material affluence they were once promised.

The promise was moderate, to be sure. In the 1960s, Kim Il-sung, the founding father of the country and also father of the current dictator, promised that eventually all Koreans would eat rice (not corn or barley) and meat soup, live in houses with tiled roofs (not thatched), and wear silk clothes.

Every North Korean knows that even this moderate paradise has failed to materialize. However, the fact has never been admitted openly. In the past, economic difficulties and hardships, if mentioned at all, were always explained as they should be explained in a solid dictatorship, that is, by references to scheming enemies, above all US imperialists.

This time, Kim’s remark indicated that the system itself might bear some responsibility for economic problems.

In accordance with the new mood, a high-level official allegedly expressed his regret about the chaos created by the currency reform while addressing a large group of the party faithful. This might appear like normal behavior, but in a dictatorship that claims the possession of absolute truth and an infallible leader, such statements are very unusual – and, indeed, dangerous. They are likely to be seen as signs of fallibility and weakness, and every dictator knows that such signs should not be shown.

In other words, something has changed in Pyongyang recently – seemingly, after Kim’s illness in late 2008, when he reportedly suffered a stroke. The most likely explanation seems to be biological: the increasing inability of the ailing dictator to pass reasonable judgments and control people around him.

One can easily imagine how the Dear Leader (perhaps even driven by genuine sympathy to his long-suffering people) would look through a currency reform plan and say: “And what about poor wage-earners? Should we not reward the people who remained loyal to the socialist industry and did not go for black markets? Why not increase their salaries, so they will become affluent, more affluent than those anti-socialist profiteers of the black market?” Few, if any, officials would dare to explain the dire economic consequences of such generosity.

It is also possible that the deteriorating health condition of Kim has led to growing rivalry between factions so the North Korean leadership is now increasingly disunited, with rival groups pushing through their own agendas.

At any rate, something unusual seems to be happening in Pyongyang and it’s probably the time to think about the future a bit more seriously. We are heading towards serious changes, and unfortunately nobody seems prepared.

Read the full story here:
Is the Dear Leader losing his grip?
Asia Times
Andrei Lankov
3/5/2010

Voice of America
3/4/2009

Decades after most countries signed on to global bans of highly toxic chemical agents, North Korea continues to make widespread use of them — putting its people and those of other countries at risk. The North’s self-imposed isolation has kept people there ignorant for decades of the dangers they face.  The United Nations is trying to remedy the problem.

United Nations officials say decades of isolating itself has left North Korea ignorant about some of the world’s most dangerous chemicals — and that it is taking a heavy toll.

Craig Boljkovac manages the chemical and waste program for  the United Nations Institute for Training and Research.

“The environment-related problems that exist in North Korea, I just have to say right now, I think they’re much more serious than in many other countries in the world,” Boljkevac said.

A team of U.N. envoys managed by Boljkovac is in Pyongyang this week, teaching officials about decades-old global chemical bans Pyongyang ignored completely until just a few years ago.  The world body is especially concerned by North Korea’s use of two chemicals, known as DDT and PCBs.

DDT was once a widely used insecticide.  American soldiers even sprinkled it in their helmets to kill head lice during World War Two.  Adverse health effects caused it to be banned in most countries — but not North Korea.

“So today in the world, DDT is only allowed one use, and that’s to kill the mosquito that carries malaria… But turn the clock back 50 years, and you have North Korea,” Boljkevac said. “They use DDT for everything.”

PCBs are a cooling agent, once critical in power grids to help keep electrical circuits from overheating.  Other countries now use much safer chemical alternatives, but Boljkevac says his team has made some unsettling discoveries in the North.

“It looks like there is something on the order of 40,000 metric tons of PCBs in North Korea presently,” Boljkevac said. “And, all you need are a few molecules in your body to cause irreversible harm to your health, or that of your children.”

Boljkevac and his team were not allowed to make a visit to North Korea until 2005.  He was struck by the lack of otherwise common chemical knowledge there.

“The look and the feelings of surprise from the officials that we deal with in North Korea, when they realized how harmful these chemicals were — I witnessed them personally, myself,” Boljkevac said. “They were quite stunned.”

Boljkevac says women are especially vulnerable to the effects of toxic chemicals, because they can be stored in fatty tissue and mother’s milk.   He also says it is also impossible to confine the dangers of toxic chemical use to North Korean territory.

“North Korea’s problem with these chemicals is the world’s problem,” Boljkevac said. “Once they’re used and released into the environment, they travel all over the world.  North Koreans cannot travel outside their country very easily or frequently — these chemicals can, and do, on a daily basis.”

Boljkevac says North Korea is providing his teams with full access and cooperation.   He says his job is made easier by the fact that none of the chemicals he is seeking to eliminate have anything to do with weapons production.