North Korean Economy Watch

Yonhap
9/21/2007

North Korea is at serious risk from contagious diseases following damage from recent floods, an official from North Korea’s Red Cross told a newspaper in Japan on Friday.

In an interview with the Chosun Sinbo, a pro-North Korean newspaper in Japan, Kim Eun-chul, a vice secretary-general at the Red Cross Society of North Korea, said, “What we are most concerned with now is the spread of infectious diseases in the severely damaged areas.”

“The destruction of the water supply facilities could result in various diseases including skin diseases and diarrhea, as well as flue.”

Kim showed his anxiety, saying that the communist country would not be able to cope with the diseases when they broke out, as many of the North’s public health centers are also destroyed from floods.

“More than 560 hospitals were destroyed and 2,100 medical offices were damaged. The medical supplies were wet and useless. We can’t even read charts as they were soaked,” he said.

“New patients with diarrhea are reported one after another. We are now relying solely on the emergency medicines provided by the International Federation of the Red Cross and Red Crescent (IFRC).”

The IFRC shipped US$1,69 million worth of medical aid to North Korea earlier this month, which can be used for three months, according to Kim.

Korea Herald
7/19/2007

The international Red Cross will continue to help North Korea in treating measles-related illnesses, including medicine aid, the organization said Wednesday in its program update, Yonhan News Agency reported.

In the first phase of a joint immunization plan, the International Federation of Red Cross and North Korea campaigned to vaccinate 6 million children between 6 months and 15 years old.

“The DPRK Red Cross and the federation are contributing 10.2 million doses of vitamin A. The federation is also contributing 262,000 doses of ampicillin to health facilities in four provinces for the treatment of measels-related complications,” the update said.

DPRK stands for Democratic People’s Republic of Korea, an official name of North Korea.

Donga
7/11/2007

When natural hazards like floods occur in North Korea, the South Korean government sends “humanitarian assistance.” But it has turned out that the government failed to monitor whether the emergency relief aid was being used appropriately.

The government spent 221 billion won (229 million dollars) from August last year to June this year to help North Korea repair damage from last July’s flood. But the Ministry of Unification said on July 10 that the after-monitoring of its use has not yet started.

After a massive flood hit North Korea last year, the ministry announced a plan to send relief aid to the North. At that time, the ministry pledged to visit the affected areas from time to time and see whether the sent items are used for the right purposes. The pledge has not yet been delivered.

The items that the government sent to Pyongyang via the Korean Red Cross include: 100,000 tons of rice, 100,000 tons of cement, 5,000 tons of iron reinforcing rods, 210 relief machines, 80,000 blankets, 10,000 emergency kits, and medicines.

“While sending the relief aid, Pyongyang conducted the nuclear test, so we had to stop; assistance was resumed this year. Due to this change in schedule, it was difficult for us to monitor the use of the aid. We will continue to negotiate with the North regarding field monitoring and access to their rationing lists,” said one official at the unification ministry.

However, many think that the monitoring, in effect, will be of no use, since the rationing of the relief aid might have already been finished.

After a railway station explosion had occurred in Ryongchon in North Pyongan Province in April 2004, the ministry also sent relief aid such as rice and cement. But the monitoring was done one year after the delivery, drawing criticism from the public.

Some point out that we should strengthen the monitoring of our rice aid, which is provided in return for Pyongyang’s scrapping of its nuclear program.

Seoul and Pyongyang made an agreement to visit three places on the east coast and two places on the west coast to oversee the allocation of aid whenever Seoul sends 100,000 tons of rice. The World Food Program, however, has an office in Pyongyang and monitors whether North Korean officials are making disproportionate allocations to the military.

In the meantime, the government sent 10 billion won (10.87 million dollars) worth of road paving materials to help proceed with the Mt. Baekdu tour project planned by Hyundai Asan and the Korea Tourism Organization. However, its usage has not yet been confirmed.

A total of 16,000 tons of materials were sent to the North in August 2005 and March 2006, but Pyongyang has not responded since July last year. Currently, the project is on hold.

“To push the project forward, we are contacting the North via several channels. But because there has not been any response from the North, we are having difficulties,” said one unification ministry official.

Austrailian Associated Press
4/27/2007

Australia will provide almost $4 million in humanitarian aid to a hungry and malnourished North Korea.

Millions of the 23 million people in the communist country are living in poverty.

Foreign Minister Alexander Downer said Australia’s $4 million commitment will focus on improving the health, hygiene and nutrition of North Koreans.

“Thirty-seven per cent of North Koreans suffer from chronic malnutrition, and two-thirds of North Korean children do not receive enough food because of a one million tonne food shortfall,” Mr Downer said in a statement.

“Many North Koreans also lack access to clean water and sanitation.”

Mr Downer said Australia’s assistance will be provided through a number of United Nations agencies and the International Red Cross.

About $1.5 million will go towards UNICEF’s water and sanitation program.

A further $1.5 million will provide food for 1.9 million people through the World Food Program.

The rest of the money will be spent on emergency health and essential medicines, disaster management, water supply and sanitation.

Kyodo News
4/20/2007

About 16 million children and adults have been immunized against measles in North Korea in one of the fastest responses to a major outbreak of the disease, it was revealed Friday.

The mass vaccination was organized by the U.N. Children’s Fund, the World Health Organization, the International Federation of the Red Cross and Red Crescent Societies and North Korea after the government asked for help in February.

According to the international organizations, the immunization campaign was done in two phases, with 6 million children aged 6 months to 15 years vaccinated last month and 10 million people aged 16 to 45 years immunized earlier this month.

The campaign was arranged following the appearance of several cases of measles in North Korea last November. By February this year two adults and two children had died and more than 3,600 had been infected.

Measles had not been reported in North Korea before this outbreak since 1992, according to a joint press release from the international organizations involved, and many health workers in the country were unfamiliar with the disease.

“This was a remarkable example of good cooperation between different organizations,” said Jaap Timmer, the International Federation’s head of delegation in North Korea.

“The Red Cross mobilized more than 15,000 of its volunteers to visit families and explain the importance and benefits of the vaccination campaign.”

Measles is spread by contact with fluid from an infected person’s nose or mouth and is highly contagious. Symptoms include fever and a rash.

Sending vaccines and syringes to North Korea cost about $6 million, the press release said.

Joong Ang Daily
Lee Young-jong and Ser Myo-ja
4/7/2007

South Korea hand-delivered $400,000 in cash to North Korea yesterday for Pyongyang’s purchase of video communication equipment. The North will spend the money to buy computers and display screens to reunite families separated for more than a half century by the demilitarized zones through video conference calls.

Two South Korean Red Cross officials boarded a cargo ship in Incheon for Nampo of North Korea Thursday morning. They carried a suitcase containing 40 bundles of one hundred, $100-dollar bills. The ship arrived in North Korea yesterday morning.

According to Red Cross officials, the cash was handed over to their North Korean counterparts at the port. “We told the North Koreans to inform us of the specific spending of the money,” an official was quoted as saying, adding that he received a receipt from the North Koreans for the cash.

The two Koreas’ Red Cross societies agreed last year that the South will fund the equipment for high-tech reunions and the promise was reaffirmed in March. South Korea was unable to provide equipment directly to the North because of U.S. regulations banning the export of dual-use goods to the North. Under the U.S. export administration regulations, strategic goods that include more than 10 percent of U.S.-made components or technology are banned for export to state sponsors of terrorism.

The money was from the inter-Korean cooperation fund. The Unification Ministry wired it to the South Korean Red Cross bank account and informed the Bank of Korea about taking the large sum of foreign currency out of the country. The money had to be hand-delivered because North Korea has had trouble accessing the international financial system since its funds were frozen at the Banco Delta Asia.

“It is sad that the North Koreans do not have a proper bank account that we can wire money to,” a Roh administration official said. “It shows the unfortunate reality of North Korea as an outsider of the international community.”

Yonhap
4/6/2007

South Korea sent $400,000 in cash to North Korea Friday via the country’s Red Cross officials to help the North purchase computers and other supplies for video-link reunions of families between the two Koreas, officials said.

This is the first time for the Seoul government to send cash aid to the communist North, though bilateral trade exceeded $1 billion for the second consecutive year last year.

“Officials from the National Red Cross left for North Korea Thursday on a boat, carrying funds for the North’s video reunion center,” an official from the Ministry of Unification told reporters on condition of anonymity.

The boat carrying the South Korean officials, as well as 50 construction trucks promised to the impoverished North as aid for its flood damages last year, left Incheon on Friday.

The boat arrived at the North’s Nampo Port earlier Friday, according to ministry officials.

The money is to be used to purchase computers and TV monitors needed for the special kind of reunions between separated families via video conferencing.

North and South Korea have held more than a dozen rounds of face-to-face reunions since the historic inter-Korean summit in 2000, involving over 10,000 people from both sides.

However, over 90,000 South Koreans remain separated from their loved ones in the North since the end of the Korean War in 1953.

“We had no choice (but to give cash) because we could not provide actual goods,” most of which are prohibited from entering the communist nation under the U.S. law on the control of strategic goods, an official said.

Korea Times
Lee Jin-woo
3/15/2007

South and North Korea on Thursday agreed to resume the reunions of families separated since the Korean War by the two sides’ heavily fortified border, this May, Seoul’s Red Cross said.

After ending a two-day working-level inter-Korean meeting in Kaesong, the Korean National Red Cross (KNRC) in Seoul announced each side will have 100 separated family members meet their long-lost relatives at Mt. Kumgang, a scenic resort, in North Korea between May 9 and 14.

The two sides confirmed the date and other details about the reunions over the telephone and through liaison officials at the truce village of Panmunjom, it said.

They will exchange the whereabouts of the people next month and will disclose the final list of participants on April 27, it said.

The agreement came about two weeks after the 20th inter-Korean ministerial talks in Pyongyang. During the four-day meeting, the two Koreas agreed to resume face-to-face family reunions in early May, but did not set a date.

Since the historic inter-Korean summit in June 2000, South and North Korea have held 14 rounds of face-to-face family reunions.

At the Kaesong meeting, both sides failed to narrow differences on a trial run of cross-border trains, said Yang Chang-seok, spokesman of the Ministry of Unification.

“There were differences on when to start the joint cooperation project with the light industry and natural underground resources. Both sides agreed to continue the dialogue in the near future,’’ he said.

During the Cabinet talks earlier this month, Seoul and Pyongyang also agreed to carry out the test-run in the first half of this year although no exact schedule was set.

Last May, Pyongyang unilaterally notified Seoul that it would postpone the test-run just a day before the scheduled date, May 25, under apparent pressure from its hard-line military.

The Stalinist state cited two reasons for canceling the run _ the lack of security guarantees on both sides and the “extremely confrontational” climate in the South.

The aborted test-runs also nullified an economic accord under which South Korea was supposed to provide raw materials in exchange for access to the North’s minerals deposits.

Update: the money went missing.

South Korea criticizes North Korea for failing to disclose how aid was used
Herald Tribune
2/11/2008 

South will give money directly to North Korea
Joong Ang Daily
Lee Young-jong and Ser Myo-ja
3/12/2007

Although South Korea does not allow cash to be given directly to North Korea, it made a deal of its own.

The two countries announced Saturday that Seoul would give Pyongyang cash to buy video conference equipment. A South Korean official said yesterday the amount will be $400,000.

North Korea will use the money to set up video conference calls between families separated during the Korean War, according to a joint statement issued Saturday by the two countries.

The South Korean government has strictly banned humanitarian groups ― as well as all residents ― from giving cash to the North due to concerns the money could be spent for other purposes.

“We decided to assist the North to smoothly resolve the separated family issue,” the official said, adding that the government will thoroughly monitor the spending of the money and the use of the equipment.

The cash payment agreement was first made at a Red Cross meeting in June 2006, but never publicly announced. The money was not exchanged because North Korea conducted a missile test the next month, temporarily freezing inter-Korean relations.

After progress in the recent six-party talks designed to make North Korea nuclear-free, South Korean Red Cross officials pledged again on Saturday at a meeting at a Mount Kumgang resort to give Pyongyang the money, the official said on condition of anonymity.

According to the joint statement, the two Koreas agreed that video conference call reunions will be expanded. The two Koreas also agreed a video conference call reunion center will be built in Pyongyang, separately from the reunion center under construction at Mount Kumgang, and that Seoul will provide construction material and equipment. The material and money will be released at the end of March, the agreement said.

Neither the joint statement nor the press release specified the amount of money, but the Seoul official said it will be $400,000. The construction material to be provided to the North is worth another $3.5 million, he said.

The South Korean government was unable to give the video conference call equipment, such as liquid crystal display monitors and computers, directly to the North because of United States regulations banning the export of dual-use goods to North Korea. Under the United States export administration regulations, strategic goods that include more than 10 percent of United States-made components or technology, are banned for export to state sponsors of terrorism, which include North Korea.

According to the official, South Korea advised the North to purchase the items from China with the cash. Washington could make an exception to the export ban, presumably at Seoul’s request, but it would take time to do so.

In addition to the cash, the $3.5 million worth of goods, such as trucks, construction materials, air conditioners, heaters and cables, will be provided to build a video conference call center in Pyongyang.

At the Red Cross talks, the North also agreed to resume the construction of the reunion center on Mount Kumgang on March 21. The two Koreas began the construction in August 2005, but the work stalled last July. The buildings are about 30 percent complete.

Last week’s Red Cross meeting was scheduled for only one day, for about two hours. Due to the North’s persistent demands for cash and materials, the talks went on for a second day, the government official said.

Yonhap
3/8/2007

Red cross officials from South and North Korea are to meet this week on resuming the construction of a family reunion center on the North’s scenic mountain bordering the South along the east coast, South Korean officials said.

The one-day meeting, slated to be held at the North’s Mount Geumgang resort on Friday, will also address the next family reunions via video link to be held on March 27-29.

Last week, the two Koreas agreed to resume reunion events for families separated by the border since the end of the Korean War. The next face-to-face family reunions will be resumed in early May.

Shortly after the North conducted its missile tests in July, the South suspended food and fertilizer aid. In retaliation, the communist nation immediately suspended inter-Korean talks, family reunions and the construction of the family reunion center.

“The construction has been put on hold for about eight months, so we will have to resume construction after checking whether there are technical problems. The construction will likely be completed next year, far later than the originally scheduled April of this year,” a South Korean Red Cross official said on condition of anonymity.

High on the agenda will be discussions on when to resume construction, how to check the facilities needed for construction, and how to provide supplies and dispatch engineers, the official said. The South Korean delegation will be headed by Hwang Jeong-ju, while Pak Yong-il will lead the North Korean team.

The two sides started the construction at a village near the scenic mountain resort in August 2005. The envisioned 12-story building will house two reunion halls and serve as the venue for family reunion events.

The two Koreas have held 14 rounds of family reunions. More than 90,000 people from South Korea alone have remained separated from their loved ones since the end of the 1950-53 Korean War.