North Korean Economy Watch

The Joongang Ilbo reports some recent statistics from, the Kaesong Industrial Zone and some trade statistics between the two Koreas and China.

Inter-Korean and China trade (Joongang Ilbo):

Exactly two years ago, on May 24, 2010, in the aftermath of the deadly sinking of the Cheonan warship, the Lee Myung-bak administration imposed sanctions against North Korea that forbade all inter-Korean trade and South Korean investments in the North.

[…]

Statistics from the Korea International Trade Association show that the volume of inter-Korea trade in 2011 dropped by 10.4 percent, falling to about $1.7 billion from $1.9 billion in 2010. The Kaesong Industrial Complex, which was exempted from the sanctions, accounted for most of the inter-Korean trade.

In contrast, the volume of trade between North Korea and China surged by 62.4 percent in 2011, from $3.4 billion in 2010 to $5.6 billion.

“After stopping trade with South Korea, factories in Pyongyang and Nampo cities turned to Chinese companies and now work for them,” a South Korean businessman said on condition of anonymity. “It took so much time and money for us to teach North Korean employees and now Chinese companies enjoy the fruits of our labor.”

The North Korean government responded to the South Korean sanctions:

As talks between the two authorities have been halted, North Korea has unilaterally decided to raise taxes on income and management of the complex.

In fact, the North Korean regime earns significant money from the complex. South Korean firms pay the North Korean government an average of $126.4 per month for each North Korean worker. The government then distributes 5,000 won of North Korean currency and some food coupons to each employee per month. This wage is desirable compared to other worker payments in the North.

Analysts calculate that the regime is holding at least $50 million from the $77.8 million of the North Korean employees’ annual income.

At current black market rates, there are appx 4,450 DPRK won to for US$1.

The article notes, however, that the Kaesong Industrial Zone continues to grow:

Located only three kilometers away from the Military Demarcation Line, the inter-Korean complex has 123 South Korean companies and about 51,000 North Korean employees.

…

Currently, the South Korean government is implementing a scheme to build more roads and infrastructure for South Koreans crossing the border to commute to the complex (see here and here).

“Although Kim Yong-chol, former head of the policy planning office of the North’s powerful National Defense Commission, who has exerted a huge influence on operating the Kaesong complex, repeatedly threatened to shut down the complex since the May 24 sanctions, he’s recently been more cooperative, saying ‘Let’s make it better,’” a high-ranking government source told the JoongAng Ilbo.

Unlike the frosty inter-Korean relations, the sales performance of the joint industrial complex is positive. For the past three years, 55 South Korean firms additionally moved into the complex and the annual output value surpassed $400 million in 2011, jumping from $180 million in 2007.

Last year’s volume is 30 times that of the $14.91 million in 2005, when the complex made its first yearly outputs. The total output value since 2005 has accumulated to $1.5 billion.

[…]

Currently, roughly 160,000 people are living in Kaesong city and approximately one out of three are working in the complex

The article also reports on additional DPRK-China projects that are not necessarily a result of higher barriers to commerce between the two Koreas (dredging, mining, labor mobility, and SEZs):

“A Chinese firm based in Yanji is now implementing a 60-kilometer-long (37-mile) dredging project in the Tumen river bed,” a government-affiliated research official said.

“It’s not simple dredging work, but a plan to mine the iron ore buried nearby.”

“In the river bed, about 30 percent of the sand contains iron ore,” the official said.

The regime also exports their labor forces to their closest ally.

“Most of the local people left for South Korea to get a decent job and the average wage for a Chinese worker is increasing,” a Chinese factory manager in Yanji said. “So we are planning to hire North Korean workers instead.”

Pyongyang and Beijing are also focusing on developing the two special economic zones, Rason and Hwanggumpyong in northeastern North Korea.

When Chen Deming, the Minister of the Chinese Ministry of Commerce of China, and South Korean Trade Minister Park Tae-ho had a bilateral meeting on May 2 to start negotiations on the Korea-China free trade deal, they included a provision stating the two countries will allow preferential tariffs on goods produced in designated zones.

“Hwanggumpyong is like a Kaesong Industrial Complex to China,” a South Korean authority said. “The Hwanggumpyong zone has the same function as Kaesong, composed of China’s capital and technology and North Korea’s land and labor forces.”

In the Rason Economic Zone, China has finished construction paving the 53-kilometer-long road connecting the Rason zone and a local tax office in Wonjong-ri, a North Korean village close to China.

The Chinese government also arranged a harbor near the Rason area, constructing a pier that can accept a three million-ton ship and building a bus route between an express bus terminal in China and the zone.

“If China uses the Rason harbor, they can save $10 per metric ton,” Jo Bong-hyeon, a senior official at the Industrial Bank of Korea, said. “It’s really good business for China, enough to invest money on building infrastructure in the zone.”

Read the full story here:
Kaesong complex running well despite sanctions
JoongAng Ilbo
2012-05-23

Pictured Above (Google Earth): Paekam County (백암군) in Ryanggang Province

According to the Daily NK:

One of the agriculture projects in which Kim Jong Il took a particular interest was potato farming in Baekam County, part of Yangkang Province. However, such high-level patronage has not been enough to save Baekam from disaster, people from the area say, since more than half the discharged soldiers dispatched by the state to work there subsequently disappeared without a trace.

Yangkang Province, a place where “potato farming is the only thing left to do,” first began receiving attention in 1998. When North Korea’s famine was at its peak in October that year, Kim Jong Il visited nearby Daehongdan County and declared, “Potatoes are the same as white rice.” However, there was no labor available to produce the potatoes Kim wanted. So, by way of a solution, the authorities decided to dispatch discharged soldiers en masse to work the potato farms.

Defectors from the region have testified that around 4,000 to 5,000 soldiers were settled in Daehongdan County. To keep these men happy, the Party even settled hundreds of women in the district to marry them. Kim Jong Il suggested they should name sons ‘Daehong’ and daughters ‘Hongdan’.

Then, in December of 2009, Kim Jong Il ordered the establishment of a potato farm in Baekam County as well. In the following May, according to Chosun Central News Agency, Kim visited, and while there he reportedly commented, “I believe it to be highly significant that we turn Baekam County into a potato producer.”

Again according to Chosun Central News Agency, in August of that same year the mass dispatch of discharged soldiers to Baekam County was completed. All the soldiers were given medals and an awarding ceremony was held in Pyongyang; the whole event was broadcast on North Korean TV.

However, now the situation is different. In 1998, a soldier might have accepted the Party’s decision on the sensible premise that “at least I will not starve.” However, young soldiers living in capitalist North Korea today are not being presented with the same incentives. Indeed, people say that handing ‘farming’ down to one’s children as an occupation is like a death sentence. Now, working hard can lead to a life that a cadre in Pyongyang would not look down upon. Living in the countryside and eating little other than potatoes can no longer satisfy.

The result was predictable. In October, 2010 the discharged soldiers were given a one month break to visit their hometowns. It was advertized as a gift for men who had not been able to return home after their discharge from the military. However, in reality it was a holiday given because the men could not be given their rations. They needed to go home to obtain money and necessities.

Regardless of which, a year and six months have now passed since the day when they were meant to return, but 50% of the 3,000 men have not been seen since, sources say.

Read the full story here:
Potatoes at the End of the Earth
Daily NK
Kim So Yeol
2012-4-9

According to the Daily NK:

The North Korean authorities have issued orders demanding the collection of 10kg of scrap iron per person in advance of this April’s major national events.

A source from North Hamkyung Province today Daily NK yesterday, “The authorities are shouting about how we must collect more than 10kg of scrap iron per person from factories, schools and homes in every area of North Korea, including Pyongyang.”

Scrap iron collection is not a new idea; North Korea ordinarily carries out similar drives twice a year in spring and autumn. However, right up until last year the amount requested was ordinarily less than 5kg and the policy was not implemented very strictly. People who did not submit their share were simply told to make it up six months later, or in many cases were overlooked completely.

However, the atmosphere this year is different. According to the source, “Our local people’s unit leader is putting strong pressure on, saying ‘don’t come to me with reasons or excuses’ and emphasizing that the authorities will regard not contributing to the celebrations in April as an ideological problem.”

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A friend of mine visited the DPRK and returned with a bottle of hand moisturizing lotion (pictured above). In English it is called “Kaesong Koryo Insam Moisture Milk Cream”. The Korean name is “개성고려인삼 물크림”, and it is manufactured by a company called Pomhyanggi (봄향기). According to Kwang On Yoo, the name translates to mean “Spring Fragrance”.

Popmhyanggi is a product line of the Sinuiju Cosmetics Factory (satellite image here). Sales are promoted through a Joint Venture company–the partner(s) are unknown at this time–called the Korea Pomhyanggi Joint Venture Company. The JV apparently operates out of an exhibition hall in Moranbong-guyok, Pyongyang, which was opened in 2007. Here is a link to an additional KCNA story on the cosmetics line.

According to Yonhap:

The Unification Ministry said Tuesday it will allow South Korean companies to bring new equipment into their factories at a joint industrial complex in North Korea in an easing of sanctions on the communist nation.

Seoul has banned the establishment of new factories or expanding investment in the industrial complex under economic sanctions slapped on the North in May 2010 in response to its torpedoing of the South Korean warship Cheonan in the Yellow Sea that killed 46 men aboard.

The ministry’s decision, effective from this week, is a follow-up measure after a group of eight ruling and opposition lawmakers last month visited the border city of Kaesong to meet with South Korean company officials and help work out problems with operating factories there.

More than 50,000 North Koreans work for 123 South Korean firms operating in the industrial zone to produce clothes, utensils, watches and other goods. The project serves as a key legitimate cash cow for the impoverished communist country.

According to a survey conducted by the ministry of the 123 firms after the parliamentary delegation’s visit, 15 firms wanted to move 803 pieces of equipment worth 4 billion won (US$3.5 million) out of the complex.

Thirty-two companies had plans to remodel the current factories or facilities, the survey showed.

The ministry is also considering expanding bus routes for North Korean workers to help employers hire more workers living farther away from the complex, officials noted.

Read the full story here:
Seoul eases limits on factories, equipment in Kaesong complex
Yonhap
2012-3-6

Pictured Above (Google Earth): The Hwanggumphyong and Wiwha Island SEZ on the Yalu/Amnok River which separates the DPRK and PRC.

On Friday, the Donga Ilbo reported that Daewoo Shipbuilding was going to invest in the DPRK’s Hwanggumphyong SEZ (see the original post below).  Today the report appears to be incorrect. According to the Wall Street Journal:

Daewoo Shipbuilding & Marine Engineering Co. on Monday shot down news reports that it had agreed to build a shipyard in North Korea.

“We don’t have any plans to do that,” a spokesman said.

According to some South Korean news accounts over the weekend, the company, which is the world’s second-largest builder of ships and whose controlling stake is owned by the South Korean government, had agreed to help a Chinese company develop an island off North Korea’s northwest coast, near the Chinese city of Dandong.

The DSME spokesman said the company held discussions with the Chinese company but isn’t close to an agreement.

The news accounts said DSME would build a shipyard that would be devoted to repair work. One report said the idea would be presented to DSME’s directors and announced in April.

The company spokesman said it’s unclear how the accounts originated.

See the original report bleow:

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Pictured above: the DPRK’s two CNC plants mentioned in the post below. (L) Ryonha Factory in Pyongyang, (R) Ryonha Factory in Huichon

From the Choson Exchange web page:

The company that is tasked with producing and selling CNC is Ryonha, through its subsidiary, Unsan. The company had a booth at the recent International Trade Fair in Rason, held in North Korea’s Special Economic Zone in the far Northeast, bordering Russia and China. Their booth was staffed by a Vice President and – as one might expect – attracted lots of attention from the locals in attendance.

The president claimed annual exports of 30,000,000 euros to Europe, South America and South East Asia. He didn’t have exact details on profits, but mentioned that Unsan imported 10,000,000 euro worth of parts, mostly from Europe, such as control units and electronic relays Siemens and Arno. Their main CNC factory is 40,000 sq. meters and the “biggest in the world” according to the manager. They have two facilities, one in Pyongyang and one in Jagang with 12,000 employees in total. They want to open a factory in Rason, ideally without investors. Prices were said to be: 150,000 EUR for a European made CNC machine but only 52,000 EUR for an equivalent machine made in the DPRK, with the “same quality”.

Unfortunately for Ryonha, it seems to be a subsidiary of the Korea Ryonbong General Corporation, which is under UN sanctions as a WMD proliferator. This no doubt impacts Ryonha’s ability to market itself to customers abroad. Ryonha also doesn’t seem to have a website, which can’t help, either.

Should Ryonha’s parent corporation be taken off the UN’s list of designated proliferators, it will find easier access to a global CNC market that was $6.1 billion in 2007, before the financial crisis hit. The market has contracted since then, as the crisis left a global glut in inventory in 2009, which has taken well into 2011 to clear. The sharply reduced demand, particularly from automakers, has made the CNC market particularly competitive, though a sustained economic recovery would eventually drag the industry back up to pre-crisis levels.

It’s difficult to know what kind of impact Ryonha might have on the global CNC industry, as customers and vendors alike are probably reluctant to trumpet where their machines are made. One of the effects of sanctions has been that companies try to hide their tracks when conducting business with the DPRK, even when the industry is unrelated to sanctioned items. This is sometimes done through an extra layer (or two) of outsourced contracts, or with textiles, sometimes just label-switching. This is tough to do with bigger machines, of course, leaving North Korean CNC machines facing perhaps understandable prejudices.

Its impact on the domestic market will be more significant, of course, reducing the need to spend hard currency on imported CNC machines from China and elsewhere. Perhaps then, this import substitution will allow the DPRK to use that unspent capital on projects that actually benefit the daily lives of its citizens.

Read the full post here.

Institute for Far Eastern Studies (IFES)
2012-2-1

Since Kim Jong-un’s first election as the vice-chairman of the Korean Workers’ Party Central Military Commission (CMC) on September 28, 2010, Kim Jong-un was reported to have made 33 accompanied onsite inspections with Kim Jong-il and a total of 61 visits at industrial sites.

Out of the 61 total visits, Kim Jong-un inspected the following industries: power/electricity (5 times); metal (3 times), machinery (12 times); agricultural (4 times); light (5 times); food (14 times); and industrial (4 times). Construction sites of Huichon Power Stations were visited four times while the Huichon Ryonha General Machinery Plant and the Kanggye General Tractor Plant were also visited multiple times.

Kim Jong-un’s “economic learning” began while accompanying his late father Kim Jong-il on onsite inspections. Even when Kim Jong-il was alive, Kim Jong-un was most likely to have made preliminary visits to these industrial sites for a closer assessment as a part of his duty as the vice-chairman of the CMC.

The significance of the recent visits mainly lie with inspections to the Huichon Power Stations (located in Jagang Province) equipped with 300,000 kW of power generation capacity. Huichon Power Station was an important national strategic project which was often emphasized by Kim Jong-il, “The construction of the power plant must be completed before the centennial birthday of the Great Leader (Kim Il-sung) with great efforts from the entire party, military and the people.”

The electricity produced at the Huichon Power Station is likely to be distributed primarily in the Pyongyang area around the two national holidays, the Day of the Shining Star (Kim Jong-il’s birthday) and the Day of the Sun (Kim Il-sung’s birthday). Currently, power line constructions are still underway in Pyongyang.

At Huichon, constructions of additional terraced power plants are under planning using the currents from the Yangtze and Cheongcheo Rivers. The electricity produced from these plants is likely to be distributed to the industrial areas in Jagang Province, which is central to the machinery and national defense industries.

Important policy implications can be found from Kim Jong-un’s past accompaniment to the Huichon Ryonha General Machinery Plant with Kim Jong-il. This plant is currently emphasized as Kim Jong-un’s accomplishment and revered as, “the industrial revolution of the new era,” and a “site of CNC (Computer Numerical Control) breakthrough.” In addition, Kim Jong-un’s economic leadership is acclaimed for placing prominence on the state-of-the-art technology and “knowledge-based economy.”

Kim Jong-il visited the Huichon Ryonha General Machinery Plant on October 28, 2011 with Kim Jong-un and inspected the CNC assembly line, CNC processing plant, and CNC machineries. He stressed, “Modernization must be promoted in all sectors and levels founded on the state-of-the-art technology. The achievements in the CNC technology should serve as the stepping stone to move forward toward a higher level of science and technology.”

Similarly on October 27, 2011, Kim Jong-il visited the Yangtze River Machinery Plant* with the younger Kim and stressed, “Powerful economic nation that we are seeking is knowledge-based economy which is only possible when CNC technology and automation is realized that can create material wealth through little resources, efforts, and energy.”

The “knowledge-based economy” will likely become the trademark of Kim Jong-un and esteemed as following the “teachings of Kim Jong-il.” Kim Jong-un’s recent industrial site visits were concentrated on the cutting edge production facilities equipped with modernized and automated production processes.

* NKeconWatch: I believe this name is an error and the correct location is the Jangjagang Machine Plant.

According to Yonhap:

North Korea is stepping up efforts to develop smartphone applications, a move that underscores its commitment not to be left behind in the fast moving world of information technology.

Choe Hyok-chol, a North Korean professor, said research projects are under way to introduce Android smartphones, according to a video clip posted on YouTube.

He explained a bar code application on Android smartphones has improved the time it takes to recognize information contained in bar codes. The video appears to have been recorded on Oct. 27 when the North held an exhibition on programs.

The move comes as more than 1 million North Koreans are subscribed to mobile phone services provided by Egypt’s Orascom Telecom, according to a news report, in a sign of growing mobile penetration in the reclusive country.

The Android operating system is the most widely used smartphone software around the world with hundreds of manufacturers building handsets based on the free and open platform.

You can see the video clip on YouTube here.

Read the full story here:
N. Korea steps up efforts to develop smartphone applications
Yonhap
2012-2-4

Pictured above (Google Earth) is Changsong Town in North Pyongan Province. This town is the home of the Changsong Joint Conference which was held in August 1962.  This meeting was referenced in the DPRK’s most recent Cabinet plenary meeting on the DPRK economy.

According to KCNA (2012-1-22):

An enlarged Cabinet plenary meeting was held.

Present there were Premier Choe Yong Rim and cabinet members.

Attending the meeting as observers were senior officials of the organizations under direct control of the Cabinet, directors of management bureaus, chairpersons of provincial, city and county people’s committees, chairpersons of provincial rural economy committees, chairpersons of provincial planning committees, directors of provincial foodstuff and daily necessities management bureaus and managers of major factories and enterprises.

Prior to the meeting, the participants paid silent tribute to the memory of leader Kim Jong Il.

The meeting reviewed the fulfillment of last year’s national economic plan and discussed how to implement the decision of the Political Bureau of the Central Committee of the Workers’ Party of Korea, joint calls of the WPK Central Committee and the Central Military Commission and the militant task put forward in the joint New Year editorial.

Vice-Premier Ro Tu Chol made a report to be followed by speeches.

The enlarged meeting set it as a priority task for this year to direct efforts into developing light industry and agriculture to improve the people’s livelihood and successfully carrying out the WPK’s prosperity-oriented strategy in the pilot domains and basic industries of the national economy upholding the flames of South Hamgyong Province. It also indicated the tasks and ways for it.

Also discussed was an issue of raising higher the flames of great innovation of South Hamgyong Province in the light industrial and agricultural fields.

The meeting mentioned the need to produce quality consumer goods favored by the people in the field of light industry and effect a decisive turn in development of local industry this year marking the 50th anniversary of the historic Changsong joint conference.

It also stressed the need for ministries and national institutions to help Changsong County in its industrial development.

Also discussed at the meeting were such issues as fulfilling the assignments for grain production for 2012 both in lowland and mountainous areas, making the best use of modern stockbreeding and poultry bases and large fruit and fish farms as well as the tasks for ministries and national institutions to preferentially supply materials, equipment and electricity to farming processes.

The meeting drew attention to the tasks for the industrial fields of electric power, coal, metal, railways and machine and construction and building materials, etc.

The meeting tabled the tasks for all ministries, national institutions and provincial people’s committees to lay their own scientific and technological foundations for stepping up the work for turning the economy into one based on technology in a forward-looking manner as required by the industrial revolution in the new century.

It also discussed the tasks for the fields of education, literature and art, public health, sports, capital construction, land management and urban management.

The meeting stressed the need for all economic officials to preserve the socialist principle and ensure profitability in economic management, operate and manage the economic work on the basis of detailed calculation and science as well as the need for ministries, national institutions and industrial establishments to set up strict order regarding planning, financial dealings and administration.

Relevant decisions were made at the meeting.

As premier of the Cabinet Choe Yong-rim has made quite a few prominent appearances in the DPRK media in the last two years which highlight his official efforts to improve the North Korean economy. His most recent public appearance (January 12) is reported to have been at the Jenam Coal Mine.

Kim Jong-un, however, is not a member of the Cabinet, so he did not attend the meeting. To date his legitimacy is being established through his relationship to Kim Jong-il/Kim Il-sung and as a leader of the KPA—rather than as a leader in the government or even the party (at least so far).

As a result, Kim Jong-un’s guidance visits have consisted almost exclusively of visits to KPA units.  In this month alone, he has visited the 105 Tank Brigade, KPA Unit 169, KPA Unit 3870, KPA Unit 354, KPA Unit 671, and the KPA soldiers constructing the Pyongyang Folk Village on the outskirts of Pyongyang. Uriminzokkiri has also credited him with spearheading the DPRK’s nuclear tests.

UPDATE: Here is Yonhap coverage of the meeting.

“Changsong Joint Conference”
The KCNA article prompted me to look into the “Changsong Joint Conference”, a term that did not ring a bell. The most recent reference I can find to it is this blurb from a March 2011 article in Korea Magazine:

The Changsong Joint Conference of Local Party and Economic Officials was held in August 1962.

The conference marked the beginning of developing the local industry throughout the country.

In recent years the county has made strenuous efforts to carry out the plan of the Workers’ Party of Korea for the building of a thriving nation and achieved many successes.

Hundreds of hectares of forests of raw materials and timber forests including pine-nut, wild-walnut and larch forests have been newly created.

The Changsong Foodstuff Factory gathers in scores of kinds of wild fruits including acorns, wild grapes, fruits of Actinidia arguta and Crataegus pinnatifida every year in mountains.

Recently its officials and workers have modernized all production processes including wild fruit drinks and wines as required in the IT age to produce foodstuffs in time.

Wines made from the fermented juice of wild grapes, fruits of Actinidia arguta and other wild fruits, Crataegus pinnatifida, Rubus crataegifolius, carbonated Actinidia arguta and other fruit juices, dried bracken and sliced bracken and other wild vegetables preserved in soy sauce are in great demand for their peculiar flavour.

The Changsong Textile Mill which started operation with six housewives has been turned into a modern fabric producer. As a treasure mill, it makes a great contribution to the improvement of the people’s standard of living. It produces quality fabrics, woolen knitted goods and quilts and blankets with local raw materials.

The Changsong Paper Mill produces paper from ground pulp. It has streamlined the equipment to improve the qualities of goods.

Looking round the local-industry factories in Changsong County in November last year, Kim Jong Il kindled the flame of developing the local industry throughout the country after the model of Changsong.

Changsong County stands at the head of development of local industry. Now its people work harder to change further the looks of their home village.

Another blogger seems to have located a single page of a book on the Changsong Joint Conference. Fortunately, he typed out the introduction:

The great leader Comrade Kim Il Sung had made a farsighted plan for bridging the gap between town and country and between regions and raising equally the living standards of all the working people. For this Changsong County had been taken as a model.

The great leader who had long pushed preparations for rapid improvement in the livelihood of the mountain peasants, studied deeply the state of affairs in this part of the country, and through his several on-the-spot guidances, paved the shortest cut to establish a socialist paradise.

In August 1962, in order to spread the example of Changsong across the land he convened the historic Changsong Joint Conference of Local Party and Economic Functionaries. There he put forward a new policy and overall ways and means to enhance the role of the county and develop local industry and agriculture, so as to improve radically the people’s living conditions.

In 1974, our people erected in Changsong the historic monument to the on-the-spot guidance of the respected and beloved leader Comrade Kim Il Sung, out of their wish to retell throughout generations the profound care of the fatherly leader who had shown the bright future of mountain villages and transformed that area into a people’s paradise fine to live in.

Kim Jong-il last visited Changsong in November 2010 where he visited the Changsong Foodstuff Factory, Changsong Textile Mill, and Changsong House of Culture. The first two locations are the shining examples of the success of the Changsong Joint Conference.  The Changsong House of Culture is where the meeting was officially held in 1962.

But if the goal of the conference is to reduce the disparity in the DPRK’s living standards, Changsong is probably not the best place to start. Changsong is home to one of the North Korean leadership’s most well-known luxury retreats.  This is because it was was extensively photographed by Kenji Fujimoto while he was working as Kim Jong-il’s personal chef.   See a satellite image and Mr. Fujimoto’s pictures of the compound here. You can see the Taegwan leadership train station Kim used to visit the compound here.