North Korean Economy Watch

UPDATE 1: By coincidence NK Leadership Watch and I posted on a similar topic today.  See his post and analysis here.

ORIGINAL POST: Today the Daily NK reported that preparations were underway for another KPA military parade:

A high level government official revealed today, “North Korea has been mobilizing military personnel and equipment to practice for the military parade at Mirim Airfields near Pyongyang. This practice has been taking place since even before the death of Kim Jong Il.”

The official explained the reason for the ongoing parade practice as part of preparations to commemorate Kim Il Sung’s birthday (April 15) and the Mlitary Foundation Day (April 25).

The military parade practice has so far involved the Worker and Peasant Red Guard, which is made up of currently-serving soldiers and reservists, mobilized with the latest-model tanks, armored cars, as well as short and medium range KN-02 and Musudan missiles.

The official added, “North Korea conducts parades on anniversaries such as the Military Foundation Day and other national holidays. Looking at the speed and scale of preparations currently underway, it seems more likely that the parade will take place in April rather than on February 16, Kim Jong Il’s birthday.”

The logistics of these parades are enormous.  I learned a lot about them back in November at a meeting with Osamu Eya in Japan. Among the many things we discussed, I asked him where the North Korean military practices their parades through Kim Il-sung Square. He answered with a single word: “Mirim”.

Now I am kind of embarrassed to admit that I never saw the resemblance (because I thought of the Mirim area as a runway strip and because the two places are not geographically laid out in the same directions). Once you rotate the satellite images and set them next to each other, however, there is no denying that the KPA has a Kim Il-sung Square-sized practice area from which to rehearse its grand military parades.

Pictured above (Google Earth): (L) Kim Il-Sung Square, (R) Mirim parade practice area.

Looking at the most current Google Earth satellite imagery (2010-10-6) we can see vehicles already practicing for their next parade:

In this Google Earth image (2006-11-11) we can see people practicing in the area:

Going back to the oldest available satellite image on Google Earth (2000-6-12) the use of the facility as a practice area is a little more clear.  We can also see some of what remains of the original landing strip in this photo:

But Mirim is not just a practice filed.  It also contains facilities to house and feed the thousands of people who come to practice. Just to the left of the field is the April 25 Hotel:

According to KCNA (1998-9-30):

The April 25 Hotel has been built on the outskirts of Pyongyang as a monumental edifice in the era of the Workers’ Party. The hotel with a total floor space of more than 134,000 square metres and accommodation for 20,000 guests has bedrooms, cultural and welfare facilities and cook equipment on a highest level. It will serve servicemen and civilians who participate in national military and civic events. Soldier-builders successfully finished this gigantic project–erection of buildings, assembling of equipment and arrangement of the area–in a little more than one year. A ceremony for the completion of the hotel took place on Tuesday. Present at the ceremony were Jo Myong Rok, Kim Il Chol, Kye Ung Thae and others. A congratulatory message of the Workers’ Party of Korea Central Committee was conveyed to the soldier-builders and helpers who had performed feats in the hotel construction. The message noted that the April 25 Hotel, a monumental edifice of the era, has been built in a short span of time under the present conditions that all the people have to overcome manifold trials and hardships in their advance. it could be done only by the revolutionary army of Korea who knows no impossibility, and it is a proud fruition produced by the might of the army and people rallied around the party as one in mind, it stressed. Highly praising the soldier-builders and helpers for demonstrating again the potentials and stamina of socialist Korea by completing the hotel, the message expressed the belief that they would make greater success in carrying out their revolutionary duties. Jo Myong Rok made a report at the ceremony. The reporter said that the heroic and proud feats performed by servicemen in the noble work to carry out the WPK’s grand plan for construction will be always remembered by the fatherland and handed down to posterity.

KCNA reported on 1998-10-8 that Kim Jong-il visited the hotel:

Pictured above: Kim Jong-il giving “on the spot guidance” at the 4.25 Hotel

[Kim Jong-il] then went to the April 25 Hotel which was newly built on Mirim plain. Looking round the interior and exterior of the hotel including a bedroom, a washroom, a dining hall and a kitchen, he learned how the hotel had been built. He highly praised soldiers and helpers for having built the hotel in a short span of time and contributed to demonstrating the potential and stamina of socialist Korea once again. He said the construction of the hotel in a short span of time is a miracle that can be worked only by the heroic Korean People’s Army (KPA) which is intensely loyal to the party. He added that the country will always remember the soldiers’ heroic feats and proud achievements in socialist construction. He called for equipping the hotel, an asset of eternal value for the army and people, with better facilities, planting many trees around the hotel, creating a pleasure park and providing those who stay in the hotel with good conditions for cultured life. As many servicemen and civilians will use the hotel, they should be given best services, he said, and gave the hotel important tasks for its management and operation. The Chairman of the DPRK National Defence Commission was accompanied by director of the General Political Department of the KPA Jo Myong Rok, chief of the general staff of the KPA Kim Yong Chun, Minister of the People’s Armed Forces Kim Il Chol and general officers of the KPA.

This hotel was built at the time the DPRK was experiencing the “Arduous March” (Forced March)–a famine which killed up to a million people. Despite the acute shortage of food and a breakdown of the DPRK’s revolutionary social contract, KCNA listed this hotel as one of the great accomplishments of the North Koreans during this time (1998-12-31):

This year proud successes have been reported from the DPRK in face of difficulties brought on by the combined effects of the never-ceasing campaign of the imperialists to stifle the DPRK and years of natural disasters. The most remarkable success gained in the forced march this year is artitifical satellite “Kwangmyongsong 1″ which was launched into orbit on august 31. The scientists and technicians of Korea launched into orbit the first artificial satellite, a product of their own wisdom and technology, fully demonstrating the national power of Korea with a powerful scientific and technical force and the solid foundations of the independent national economy. Bulky April 25 Hotel and September 9 Street sprang up in Pyongyang to commemorate 50 years of the DPRK (September 9). The hotel with modern equipment and accommodation for 20,000 is on the east outskirts of the capital city. The street linking Pyongyang Airport to the Kumsusan Memorial Palace, the sacred temple of Juche, gave a major face-lifting to the northwest area of the capital city with bridges of special characteristics, flats for thousands of households, ornamental forests, scores of metres wide, on either side of the highway in good harmony with landscape. Thousands of minor power stations were built across the country this year. The locally-built minor power stations in Jagang Province meet the needs for the lighting of the flats for more than 100,000 households and the production of local-industry factories. Flats for 10,000 households in Chongjin, an industrial city, benefit from electric heating. A growing number of cities, counties and units are offsetting the demands for electricity with electric energy turned out at minor power stations. The Huichon General Machine Tool Plant produced hundreds of machine tools in a matter of a few months. In the railway transport diesel engine locomotives were converted into electric locomotives called “forced march.” 60 kilometre-odd-long railroad between Haeju and Ongjin, between singangryong and Pupho in the central area of the country was switched over to a broad-gauge one. The Pyongyang Integrated Circuits Factory, salt refineries and other industrial establishments were commissioned or completed throughout the country. As a result, a more solid economic foundation of the nation was laid.

According to Business Week:

North Korea’s trade expanded more than 20 percent in 2010 to $6.1 billion on growing business with China even as the economy shrank for a second year, South Korea’s national statistics office said.

Trade volume increased 22.3 percent in 2010 after a 10.5 percent decline in 2009, Statistics Korea said in its annual report today in Seoul. Commerce with China accounted for 57 percent, or $3.5 billion, of North Korea’s foreign trade, up from 53 percent in the previous year. The totalitarian state doesn’t report economic statistics.

North Korea’s gross domestic product contracted 0.5 percent to 30 trillion won ($26.1 billion) in 2010, compared with South Korea’s 1,173 trillion won, the Bank of Korea said in November. Per capita income was 1.24 million won compared with South Korea’s 24 million won.

Kim Jong Un took over as leader of North Korea in December after the death of his father, Kim Jong Il. The regime has relied on economic handouts since the mid-1990s and an estimated 2 million people have died from famine, according to South Korea’s central bank. The United Nations and the U.S. increased sanctions on the country aimed at curtailing its nuclear weapons program after 2010 attacks that killed 50 South Koreans.

Chinese aid to the stricken country will probably increase as the government in Beijing seeks to avoid a flood of refugees from crossing the 880-mile (1,416 kilometer) border it shares with North Korea, analyst Dong Yong Sueng said. While food shortages have contributed to rising defections, North Korea has shown no willingness to ease sanctions by abandoning its nuclear weapons program.

Economic Dependence

“North Korea’s economic dependence on China will inevitably increase for the time being unless there’s some resolution to the nuclear situation,” said Dong, a senior fellow at the Samsung Economic Research Institute in Seoul. “China wants a stable North Korean regime and succession to avoid a potential influx of refugees.”

North Korea had a shortfall of as much as 700,000 metric tons of food last year, which could affect a quarter of the population, according to the United Nations Food & Agriculture Organization. China provides almost 90 percent of energy imports and 45 percent of the country’s food, according to a 2009 report from the New York-based Council on Foreign Relations.

China is preparing to consent to a North Korean request to provide 1 million tons of food in time for the April 5 anniversary of the birth of the country’s founder, Kim Il Sung, Japan’s Fuji Television said on its website. The report didn’t say where it obtained the information.

Providing Assistance

Chinese Foreign Ministry spokesman Liu Weimin today told reporters in Beijing that while he wasn’t aware of the report, “we have always been providing assistance to the DPRK within our capacity which we think will be conducive to the stability and development of the country.” DPRK is an acronym of North Korea’s formal name, the Democratic People’s Republic of Korea.

Kim’s military had over one million soldiers in active duty and 7.7 million reserve troops as of November 2010, today’s report said, citing South Korean Defense Ministry figures. The North operates under a military-first policy and has remained on combat alert since the Korean War ended in 1953 with a truce and not a peace treaty.

North Korea’s population rose to 24.2 million in 2010 from 24.1 million in 2009, about half of South Korea. Inter-Korean trade rose 13.9 percent from a year earlier to $1.9 billion last year, Statistics Korea said.

South Korea plans to set up a fund to raise as much as 55 trillion won to pay for eventual reunification with North Korea, Unification Minister Yu Woo Ik said in an interview with Bloomberg last October.

Read Sangwon Yoon’s full article in Business Week here.

The data in this article was pulled from a recent publication by Statistics Korea (Korean, English). You can read a press release of the publication here (in Korean). You can read the press release in English here (via Google Translate). It is not very good, so if a reader would care to take the time to translate this article, I would appreciate it. You can also download the press release as a .hwp file at the bottom of the article (download a .hwp reader here).

Statistics Korea did set up a North Korea Statistics page which you can see here. Unfortunately, it is only in Korean! I have, however, added it as a link on my North Korean Economic Statistics page.

UPDATE 1: The Daily NK also covered this story with the following report:

The income gap between North and South Korea is becoming ever wider, according to statistics released yesterday by Statistics Korea showing that South Korea’s per capita Gross National Income (GNI) in 2010 was $27,592, 19.3 times that of North Korea at $1,074. Last year the gap was 18.4 times.

In the (legal) foreign trade sector, the two Koreas also lived very differently. South Korea’s 2012 trading volume was $891.6 billion, 212.3 times North Korea’s $4.2 billion. North Korea’s exports were worth just $15 billion, its imports $27 billion.

As expected, North Korea’s trade reliance on China was highly significant (56.9%), partly because as strained inter-Korean relations started to bite, so inter-Korean trade declined as well: from 33.0% in 2009 to 31.4% in 2010.

Meanwhile, 61.0% of adults in South Korea are economically active, a number which rises to 70.2% in North Korea. Conversely, there are 3,134,000 college students in South Korea, but only 510,000 in North Korea.

In the energy industry sector in 2010, South Korea imported 872,415,000 barrels of crude oil, 226.4 times more than North Korea’s 3,854,000. The electricity generating capacity of South Korea is 10.9 times more than that of North Korea, too, though the generated amount was actually around 20 times bigger, the statistics allege.

Automobile production was no better; in South Korea (4,272,000), 1,068 times more than North Korea (4,000). Steel production in South Korea was 46.1 times that of North Korea, cement was 7.6 times more, and fertilizer 6.1 times.

UPDATE 2: The Hankyoreh adds some critiques of the data:

“With inter-Korean relations so tense, it is no longer possible for us to do the kind of North Korean grain production estimates that were possible under the previous administration,” a government official explained on Tuesday.

2010 production figures for rice, corn, barley, beans, and other major grains were left blank in a Statistics Korea report on major statistical indicators in North Korea. The numbers were included in statistical data released in 2008, 2009, and other years.

A Statistics Korea official said, “We made several requests to the organization in charge, but they didn’t provide materials, so we couldn’t print them.” The Rural Development Administration is responsible for investigating North Korean grain production. Early every year, it has estimated and released North Korean grain production figures for the previous year. Since 2011, however, it has failed to release figures.

A government official explained, “Since inter-Korean relations were decent during the previous administration, it was possible to go to the North and get samples to use as a basis for estimates.”

“With inter-Korean exchange all but completely halted under the current administration, the basis for releasing estimates has disappeared,” the official added.

Some observers said the decision was motivated by concerns that South Korean public support for food aid to North Korea could grow if low figures are presented. The argument is that there is no reason the kind of grain production estimates that were possible in 2008 and 2009, while the Lee administration was in office, would not be so for 2010 alone. Observers are also expressing bafflement at the fact that only agricultural products were omitted from estimates at a time when even the number of cars is being estimated in the area of industrial products.

Kim Yong-hyun, a professor of North Korean studies at Dongguk University, said, “Recently, food aid negotiations have been taking place between North Korea and the US, and I suspect the government may have decided not to announce [the estimates] because it was too concerned about public sentiment in South Korea.”

The North Korea figures released Tuesday also showed South Korea‘s per capita gross national income of $20,759 to be 19.3 times North Korea’s $174 for 2010.

Institute for Far Eastern Studies (IFES)
2012-1-12

The adoption of Act No. 1194 by the Supreme People’s Assembly of the DPRK was recently confirmed. “The Democratic People’s Republic of Korea’s Corporate Law” or the “Corporate Law” was reported to have passed more than a year ago in November 11, 2010.

The “Corporate Law” is evaluated as an important indication of the direction of the economic policy of North Korea since Kim Jong-un was appointed as the next successor at the Third Party Conference held on September 28, 2010.

The law consists of five chapters: 1) Basic Principles of the Corporation; 2) Organization of the Corporation; 3) Management Organization of the Corporation; 4) Business Management Activities of the Corporation; and 5) Projects of the Corporation.

The first article of this act “The Mission of the Corporate Law” states that the law was enacted to, “contribute to the development of the people’s economy and to secure the management system of the socialist corporations by establishing the system and order for the organization and management activities.”

The second article, “The Definition of Corporation” defines a corporation as an “economic unit that operates as an organization that directly handles the labor, facilities, equipment, materials, and finances for the production or volunteer activities.”

Article 9, “The Legal Rights and the Legal Protection Principles,” indicates that the “legal rights and interests of the corporations are protected by the government.” Article 10, however, specifically states that this particular law does not apply to the special trade zones and the foreign investment companies.

Article 18, “The Organization of the Corporation,” has a clause that states “the managing organization has the jurisdiction to close down corporations for unreasonable or lack of prospects that does not meet the standards and the demands of the national policy and reality.”

Article 21 depicts a manager as a “person representing the corporation and responsible for the entire business.” The manager, chief engineer, and assistant manager’s specific responsibilities were also explicated. The hierarchy was clearly indicated where the assistant manager was to report to the chief engineer and the manager while the chief engineer has to report to the manager.

Article 29 affirms that a business is to be managed based on established business and corporate strategies in which every year a draft of the people’s economy plan must be submitted to the appropriate authorities. The written economic plan must be followed on a daily, monthly, quarterly, and by index basis (Article 30).

Articles 31 to 37 include specifics on the improvements of production technology while Articles 38 to 43 include regulations to enhance the management system.

In particular, Article 42 stipulates that the corporation must promote sales based on supply plans and contracts. Those sales that do not follow the plan and the contract cannot be sold.”

Article 44 states, “The appropriate amount of labor is scientifically determined and managed based on the socialist distribution principles and a precise socialist wage system must be implemented.”

In other words, socialist principles will be applied to both the sales of merchandise and wage system. While the corporation will receive autonomy in many areas, clear regulations are provided for sales in addition to evaluation and incentive system for labor.

In recent years, North Korea has continuously passed economic laws for economic construction and enhancing the lives of the North Korean people. Such laws include the following: The Agricultural Law passed on November 3, 2009; Real Estate Management Law on November 11, 2009; the Country of Origin for Export Law on November 25, 2009; and Comprehensive Equipment Import Law on November 11, 2009.

Andrei Lankov writes in the Asia Times:

It is often overlooked how much North Korea has changed over the past 20 years. Its Stalinist and militaristic facade is carefully maintained by the state, but in the new circumstances it is increasingly misleading. Behind this official veneer of militant posters and goose-stepping soldiers, the society itself has changed much.

In a nutshell, the past two decades were the time when the state was steadily retreating from the private life, and also was losing its ability (perhaps also its will) to control the daily activities of its subjects as well as how they made a living. One of many significant changes has been the steady decline in the significance attached to family background (known as songbun in North Korean parlance) – once the single most important factor that determined the life of a North Korean.

Family background did matter in other communist countries as well, but to a much lesser extent. For example, in the Soviet Union immediately after the 1917 communist revolution, scions of aristocrats, descendants of priests, and merchants faced many kinds of discrimination. It was more difficult for them to enter a college or to be promoted, and they were more likely to be arrested for alleged political crimes. However, this discrimination had disappeared by the late 1940s, so in the days of my youth, in the 1970s and 1980s, it had become quite normal in the USSR to boast about real or alleged aristocratic family roots.

North Korea is very different. In 1957, the authorities launched a large-scale and ambitious investigation of the family backgrounds of virtually all North Korean citizens. As a result of this and subsequent investigations, by the mid-1960s the entire population was divided into a number of hereditary groups, somewhat akin to the estates of medieval Europe. Career chances and life prospects of every North Korean were determined, to a very large extent, by his membership in one of these strictly defined groups.
The major criteria of classification were quite straightforward: the songbun (origin) of the North Korean was largely defined by what his or her direct male ancestors did in the 1930s and 1940s.

The official songbun structure was quite elaborate and changed over time. However, at the first approximation, there have been three groups in North Korea, usually known as “core”, “wavering” and “hostile” classes. Every single North Korean had to belong to one of these groups.

The “hostile class” included people whose ancestors in or around 1945 were engaged in activities that were not to the regime’s liking. Among others, this group included descendants of clerks in the Japanese colonial administration, Christian activists, female shamans, entrepreneurs, and defectors to the South. Members of the hostile class faced the greatest number of restrictions: They could not live in Pyongyang or other major cities and they could not be admitted to good colleges or universities. People whose songbun was exceptionally bad would not even be drafted into the military.

Members of the “core class” included those whose direct male ancestors contributed toward the foundation and strengthening of the Kim family regime. They were descendants of anti-Japanese guerrillas, heroes of the Korean War, or party bureaucrats. For all practical purposes, over the past half-century, only these people could be promoted to key positions in the North Korean state and party bureaucracy. They constituted the hereditary elite.

In the days of Kim Il-sung’s rule, from the early 1960s to the early 1990s, songbun was of paramount significance. It determined where people lived and worked and even what they ate. Most marriages were also concluded between people of the same or similar songbun.

It was also important that the songbun was, in essence, unchallengeable. It was inherited from one’s father and was then bestowed on one’s children. The mother’s songbun did not matter. I know a couple where the husband’s songbun was bad (he was a “landowner’s grandson”), but the wife had the best songbun imaginable, being a descendant of a family that once was involved with the anti-Japanese guerrillas of Kim Il-sung. Frankly, such a marriage was rare and unequal – in most cases women of such standing would be as reluctant to marry a man of low origin as, say, a European noble lady from the 17th century. However, in this particular case the marriage did take place, much against the resistance of the girl’s parents.

In due time, though, the spouses discovered that the wife’s songbun did not really matter. Their daughter, a promising athlete, could not be sent for further training, since her songbun was bad: the great-granddaughter of a minor landlord could not compete on the national level and, for that matter, could be accepted only to a junior college.

In Kim Il-sung’s era – that is, before 1994 – the state was in near-complete control of an individual’s life. The only way to achieve high status and affluence was to climb the official bureaucratic ladder. As a North Korean friend put it in the late 1980s: “I hate officials, but I want to become an official, because in our country, only officials can live well.” Indeed, in Kim Il-sung’s North Korea all material goods were distributed by the state and almost all income was derived from work in state industry or the state bureaucracy.

But things started to change dramatically in the early 1990s. The state sector, suddenly deprived of Soviet subsidies, collapsed. North Koreans suddenly discovered that food rations were no longer forthcoming and their official monthly salary would only buy 1 or 2 kilograms of rice. Predictably, mass starvation followed, killing at least a half-million people.

To survive, the North Korean people literally rediscovered capitalism. Estimates vary, but the consensus is that over the past 10-15 years, the average North Korean family has come to draw most of its income from what can be described as black-market activities. Actually the so-called black market is not particularly black, since the government – in spite of occasional crackdowns – has tacitly tolerated its existence since the mid-1990s. Nowadays North Koreans work on individual fields on steep mountain slopes, they establish private workshops to produce garments and assorted consumer goods, and they smuggle and trade.

The new and increasingly dominant unofficial economy is in essence capitalist. As such, it rewards those who are sufficiently industrious, greedy, intelligent, ruthless and disciplined – and in some cases, it rewards them handsomely. Social inequality is growing and many a successful merchant or workshop owner lives better than a middle-ranking bureaucrat. A successful entrepreneur might have all trappings of luxury – including, say, a Chinese motorbike or a refrigerator, which in North Korea can be seen as roughly equivalent to a Lexus and a yacht.

The success in the emerging new economy is usually unrelated to one’s songbun. In fact, sometimes it seems that people with bad songbun tend to be more successful nowadays – perhaps because back in the 1990s they had no expectations of the state and were the first to jump into the murky waters of the emerging North Korean market economy.

Of late, the previously attractive career avenues have lost much of their allure. For example, in the past, many North Koreans were willing to do their long and tedious military service, which lasted some seven to 10 years. This popularity was easy to explain: For a person with average songbun, this would be the only way to get into the bottom tiers of the bureaucracy. As a North Korean told it, recalling the time of her youth, the 1970s: “The only way to become somebody was to go into the military, join the Korean Workers Party while on the active service, and then come back to become an official.”

Recently, however, military service has lost much of its popularity. Few people would be willing spend 10 years in a squalid barracks so as eventually to become a minor official in the city administration. Such a job is still attractive, to be sure, but it seems preferable to become a smuggler or a merchant, whose income far exceeds that of a petty bureaucrat.

Still, on the very top, songbun is important, since the key administrative positions are held by those with good songbun, and a mid- or high-level official can make a nice income by milking the private economy. Hence people with good songbun still often think about capitalizing on the real or alleged contribution of their ancestors to the establishment of the North Korean regime. However, for a majority the emergence of markets opened a new, faster and more attractive (but also more risky) avenue of social mobility.

North Korean society has become defined by one’s relationship to money, not by one’s relationship to the bureaucracy or one’s inherited caste status. Money talks, and for better or worse, in North Korea, money talks ever louder. As a female refugee in her early 40s put it recently: “Under Kim Il-sung, songbun was very important, it decided everything. Under Kim Jong-il, things are different – your family background still matters, but money nowadays is more important than social background.”

Read the full story here:
North Korea’s new class system
Asia Times
Andrei Lankov
2011-12-3

Aidan Foster-Carter writes a compendium of problems facing the DPRK economy in 38 North.

Paraphrasing the ailments he cites: Socialism, militarism, royal economy, cult costs, potempkinism, leadership whims, rigidities, coordination problems, unwise leadership priorities.

Read the full story (which is full of fantastic anecdotes) below:
Whim Jong Il: North Korea’s Economic Irrationalities
38 North
Aidan Foster-Carter
2011-11-26

Institute for Far Eastern Studies (IFES)
2011-11-03

In order to celebrate Kim Il Sung’s centennial birthday next year on April 15, 2012, the plan to build 100,000 private homes in Pyongyang is quickly underway. North Korea has announced its intension to upgrade Pyongyang into a city with over 100,000 homes. Pyongyang’s district of Mansudae is to build over one thousand units of high-rise apartments (77 stories), theaters, parks and other recreational facilities.

The KCNA reported on October 11, “For the next Day of the Sun, Pyongyang will be completely transformed.” The news added, “The construction of private homes has been in progress for five months and is at 70 percent completion. Mansudae District is rapidly changing with skyscrapers and high-rise apartments appearing throughout the city. Construction of theaters and service facilities are also in development.”

Facing Mansudae is Dongpyongyang District, another area in Pyongyang under enhancement and has secured over 17,400 square meters of land for multi-purpose service facilities and 9,660 square meters for a public outdoor ice rink. The KCNA elaborated, “The multi-purpose facilities encompass bathhouses, beauty salons, and other latest facilities of convenience. In the public outdoor ice rink, circular ice rink, bleachers and cultural recreational facilities will be built to provide necessary environment for people to enjoy various ice sports.”

Rungrado Recreation Ground is also reported to be rejuvenated with a variety of amusement rides and multipurpose water park. The water park will be equipped with wave pools, waterslides, and health pools.

In addition, Pyongyang is focusing on gardening and exterior beautification projects for private homes and public buildings, including installation of colorful tiles and paints as well as bright neon signs in the streets.

“The Development Project of 100,000 Housing Units in Pyongyang” went into effect since 2009 but talks of reducing the project to 20,000 homes surfaced when it was faced with funding difficulties. However, the original plan of building 100,000 homes has not faltered and appears to be in full swing.

Early this year on January 3, a public rally was held at the Kim Il Sung Square with over 100,000 people present. At that time, the homebuilding project of Pyongyang was announced in which “Pyongyang City will be equipped to enter the era of strong and prosperous nation in all sectors.”

In July 2008, the General Bureau of Capital Construction began a large-scale redevelopment project. Completed a year later on September 2009, 600 old homes mostly built in the 1960s were demolished and in their place an apartment complex with over 800 homes went up. This project received undivided attention from Kim Jong Il, Chang Sung-Thaek, administrative director of the Worker’s Party of Korea, among many other top officials of North Korea.

For North Korea, “The Development Project of 100,000 Housing Units in Pyongyang” has become a symbol of building a strong and prosperous nation.

Additional information:
1. Previous posts on the DPRK’s “2012 Kangsong Taeguk” policies can be found here.

2. Previous posts on “Construction” can be found here.

3. The Pyongyang’s university students are (mostly) involved in construction projects.

4. See photos of the construction by Ray Cunningham here.

According to the Daily NK:

North Korea is pushing every angle to try and obtain more foreign currency to bolster its coughers and fund its 2012 festivities.

According to North Korean sources, apart from the standard blanket expropriation of a large proportion of the $200-1500 per month incomes of laborers based abroad, in recent times the authorities have also started to move in on the reserves of ordinary citizens inside North Korea’s borders.

Various enterprises and organizations are said to be in fierce competition to get hold of whatever foreign currency and gold is held by the people. Trade banks have also apparently responded to the situation by offering to exchange foreign currency at the black market rate of 2,800 won per U.S. dollar, instead of the laughable official exchange rate.

Elsewhere, mobile phone sales are helping the regime to dredge currency from the people. The North Korean Ministry of Communications is reportedly making impressive profits by monopolizing the importation of phones made by Chinese companies ZTE and Huawei, buying them for $80 per handset and reselling them for $300. Based on known prices, connection fees and a service take-up of 700,000 people so far, the authorities have presumably managed to earn $250m through this practice alone.

Overseas Koreans also say they are being pushed to add to the funding drive. Ethnic Koreans in the United States have claimed that North Korea has offered them the chance to reunite with long lost family members in the North for a cost of several thousand dollars per person, including brokerage and security fees, although this has been apparently going on for a number of years.

Over in Japan, meanwhile, it was also revealed by weekly publication AERA that North Korea has sent letters to elderly members of the Chongryon inviting them to return to North Korea with the promise of being able to live well on their pensions. It is suspected that the North hopes to be able to withhold news of their eventual passing so as to keep receiving the pensions in the medium term.

Finally, the workers and businesses at the Kaeseong Industrial Complex have also become a target of the fund raising drive. North Korean management in the Complex requested back in August that South Korean businesses stop offering ‘Choco-pies’ (a South Korean snack) to North Korean workers and give them cash instead.

However, the overall results are unlikely to be positive. The planned illusion of plenty may be briefly achieved next year, but the majority of experts agree that the North Korean regime is now distorting the economy more and more by focusing on events idolizing the Kim family at the expense of other issues that will inevitably come back to haunt the regime later.

Yonhap also reported on this story.

Read the full Daily NK piece here:
2012 Funding International Overdrive
Daily NK
2011-10-31

1. “Relying on One’s Strength: The Growth of the Private Agriculture in Borderland Areas of North Korea”
Andrei Lankov，Seok Hyang Kim ，Inok Kwa
PDF of the article here 

The two decades which followed the collapse of the communist bloc were a period of dramatic social and economic transformation in North Korea. The 1990-2010 period was a time when market economy re-emerged in North Korea where once could be seen as the most perfect example of the Stalinist economic model. The present article deals with one of the major areas of socioeconomic change which, so far, has not been the focus of previous studies. The topic is about the growth of private agricultural activities in North Korea after 1990. This growth constitutes a significant phenomenon which has important social consequences and also is important from a purely economic point of view: it seems that the spontaneous growth of private plots played a major role in the recent improvement of the food situation inside North Korea.

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3. Korea Sharing Movement anti-malarial program (Via Cancor)
Read a PDF of on the project here

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4. What is it like to teach at the Pyongyang University of Science and Technology (PUST)?
Find out from one instructor here. More on PUST here.

According to the Daily NK:

The North Korean authorities in Hamheung are demanding 150,000 won from each trader in local markets to support construction projects in Pyongyang, according to a source from the city.

“Since the start of October, Hamheung Municipal People’s Committee has been taking money from market traders on the premise that ‘You have to give material support to Pyongyang construction workers,’” the source told the Daily NK today. “In the case of traders in the markets in Hoisang and Sapo, they are being asked for as much as 150,000 won each.”

Hamheung is the most famous industrial city in North Korea, and as such has larger markets than many other places. Thus, given that each of the two markets mentioned by the source has more than 500 traders, if the authorities were to reach their goal figure then they would be able to take 75,000,000 won from each one.

However, the Market Management Office for each market already receives 300-500 won per day from traders in the form of a ‘stall tax’, with sellers of home appliances and other high priced goods paying 500 won and those who sell food only paying 300 won. Thus, 150,000 won represents a huge cost, and many traders are apparently reacting to the demand with incredulity.

The source also noted that this does not appear to represent a central Party directive, with only traders in South Hamkyung and Yangkang Province having been hit by it to date.

“In Hyesan Market in Yangkang Province, it is 100,000 won per trader,” the source revealed, adding, “It seems like a case of the provincial Party preparing funds to support Pyongyang construction by taking money from traders.”

Elsewhere, although traders are now angry at the demand for funding, everything else is good, with official market controls being very lightly implemented at the moment, according to the source.

“The market is open from morning to night, and with the exception of the usual crackdowns on grasshopper traders there are no notable inspections,” he revealed.

But then, he added sarcastically, “They are taking money from the market as if it were some kind of state industry, so maybe that’s why they are leaving it alone.”

Read the full story here:
To Hamheung Traders: 150,000 Won for Pyongyang!
Daily NK
Lee Seok Young
2011-10-18

UPDATE 6 (2011-10-4): According to the Daily NK:

Progress on the project to build 100,000 homes in Pyongyang is moving forward rapidly in at least one location: central Changjeon Street. According to a source from the city who spoke with The Daily NK yesterday, “There are around 30,000 homes being constructed along Changjeon Street, and the shells have almost all gone up.”

Changjeon Street is in the heart of Pyongyang, near well-known spots such as Mansudae Assembly Hall and the giant bronze statue of Kim Il Sung. The authorities are known to be focusing the state’s limited power on construction in this area, with the intention of completing at least the most visible part of planned projects ordered for the commemoration of the 100th anniversary of Kim Il Sung’s birth in April, 2012.

North Korea is understood to have invited a number of foreign dignitaries to witness several big events it has planned for next April, including the Spring Friendship Art Festival and the April 15th ‘Day of the Sun’ birthday celebrations. In that context, completing construction along Changjeon Street is a natural priority.

Changjeon Street was apparently given a further boost following the visit of Kim Jong Il to China in May. Kim was reportedly struck by the inadequacy of Pyongyang when held up against major cities in China, and called for improvement.

The authorities thereafter ordered that the skeletons of homes on Changjeon Street be completed by the anniversary of the Party foundation, which falls on October 10th. According to the source, “The pace of construction has picked up since the authorities ordered that the building frames be completed by October 10th.”

“They started work on a 40-storey building at the end of May, and now are up to the 35th storey. They are using a waterproofing agent that causes the cement to dry quickly, which means they sometimes get through three floors a day,” he continued.

Rodong Shinmun, the Party mouthpiece publication, described the renewed pace of operations on Changjeon Street last Thursday, stating proudly, “The blinding pace of the audacious construction offensive, paying no heed to night or day, has allowed for the construction of the framework of a 40-floor high-rise residential building in no time at all.”

Similar progress is being seen on road extensions and beautification projects nearby. The source said, “Road extension projects have been completed, including that of the road in front of the Botong River and Pyongyang Gymnasium. They’ve put flower beds by the side of the road and the whole area is now in a very good state.”

However, the fixation with construction on Changjeon Street is leading to accidents there, the source added, noting, “Because they only pressure us to speed up and don’t say anything about safety, there have been frequent incidents of workers falling.”

It is also causing other projects in the city to lag far behind. According to the source, “The authorities are doing renovations on houses along the main roads, but only painting and sprucing up the areas which can be seen. The buildings along Tongil, Hyungsaesan and Yongseon Streets were all demolished in 2009, but as yet there is no sign of progress from the company which has been tasked with the construction work.”

UPDATE 5 (2011-6-8): According to the Daily NK:

Finally, yesterday’s Rodong Shinmun, citing a statement from Kim Jong Il himself, went on to remind the people, “Construction in Pyongyang is not simply an issue of operational economics regarding the formation of roads and construction of homes, it is an important political issue related to the prestige of Socialist Chosun and dignity of the Kim Il Sung Motherland.”

This kind of propaganda push is aimed at ensuring the people are cogent of fact that modern buildings are being constructed by the authorities; an attempt to bring to life ongoing propaganda about the strong and prosperous state, which inside sources suggest is viewed with considerable public cynicism.

According to the Chosun Shinbo piece dated June 23rd, the construction at Mansudae is set to include a complex of 14 new apartment buildings, including North Korea’s tallest at 45 floors, a school, nursery and other public buildings. Elsewhere, there is a plan to pull down older construction in Mansu-dong and replace it with a park, and another to put up a modern cylindrical and square apartment building in the vicinity of Pyongyang Students’ and Children’s Palace.

Meanwhile, all the talk of modernity fits well with efforts to promote the youthful vigor of successor Kim Jong Eun, especially as it surrounds the statue of Kim Il Sung on Mansudae Hill, which is itself said to be undergoing a facelift.

In yesterday’s piece, Rodong Shinmun went on, “According to the Party’s grand capital construction plan, a fire of new Pyongyang creation is blazing violently in the ongoing Mansudae area construction,” adding, “According to this warlike strategy, in a short time, less than a month after it began, the groups taking part in the construction had achieved innovative results, digging the vast foundations of the new homes and laying the concrete.”

However, rumor has it that the reality does not meet the heights of this official propaganda, with the authorities having only managed to construct some 500 new residences in the period to the end of 2010.

UPDATE 4 (2011-6-8): KCTV has braodcast new footage of the construction zone and explained what a few of the new buildings will be.  I have uploaded the particular video clip to YouTube, and you can watch it here.

Below are screen shots.  In the picture on the left, we can see that many of the older buildings in the area have already been removed and holes have been dug for the new foundations.  In the picture on the right we can see another conceptual shot of the area from the other side of the Taedong River.

UPDATE 3 (2011-6-8): According to the Pyongyang Times:

A huge construction project has been undertaken to renew the looks of the Mansudae area of Pyongyang on the occasion of the 100th birthday of President Kim Il Sung (April 2012) as part of the grand capital construction plan of the Workers’ Party of Korea.

The project includes the construction of modern dwelling houses and a monumental structure in the area in central Pyongyang where the statue of President Kim Il Sung stands and the development of parks in the surroundings to meet the requirements of the new century. It will be a big stride forward to building Pyongyang magnificently as the world-level city.

The ground-breaking ceremony took place on May 22.

It brought together Premier Choe Yong Rim, Minister of the People’s Armed Forces Kim Yong Chun, Vice-Premiers Jon Ha Chol and Ro Tu Chol, officials from ministries, national agencies and municipality and tens of thousands of builders.

Premier Choe Yong Rim made a keynote speech.

He noted that leader Kim Jong Il saw that monumental structures were built everywhere in the capital to glorify the President’s revolutionary exploits for all ages. He then referred to the facts that the leader initiated the construction of Changgwang and Kwangbok Streets and other large projects and led them in the van to bring about a radical turn in building the capital and improving the people’s livelihood.

He said that under his wise guidance modern houses including those in Mansudae Street and at the foot of Haebang Hill, cultural and public service facilities, parks and recreation grounds were built in recent years and gigantic housing development and city landscaping projects are now dynamically pushed forward in Pyongyang.

More recently the leader suggested the development of the Mansudae area and took drastic measures to push the project from design to mobilizing the builders and supply of materials, he noted, and added that all the officials and builders should be well aware of the importance and significance of this construction, strictly observe the instructions of the designs, building operations and construction methods and work hard to create a new building speed.

He stressed the need to finish the construction of houses in Ryongsong, Sopho and Ryokpho areas in time together with the construction in the Mansudae area.

He called on the whole Party, the entire nation and all the people to turn out to support the construction in the Mansudae area.

He was followed by other speakers.

UPDATE 2 (2011-6-3): KCNA has finally published a story about the new construction in the Central District:

There started the project to build on the best level the Mansudae area in Pyongyang where President Kim Il Sung’s statue stands in the run-up to the centenary of his birth.

A monumental edifice, high-rise apartment houses, skyscraping buildings, public buildings and cultural and service facilities will appear as required by the new century in the vast area covering dozens of hectares where its old appearance will be no longer to be seen.

A new street will make its appearance as required by the modern sense of beauty, completely free from the existing mode of urban construction.

It will be unique in the formative artistic representation of architecture and the whole area will turn into a huge park. This is a new idea in the lay-out of the street in the area.

A round-shape big people’s theater will spring up in the area of Mansu-dong.

Trees of good species and flowering plants will be planted in the more than ten hectare area around the theater facing the Mansudae Assembly Hall. Promenades and public service facilities will keep in good harmony.

The height of the high-rise apartment houses to be built in the area covering hundreds of thousands of square meters in Kyongsang-dong, Jongro-dong and Taedongmun-dong is expected to gradually increase and twin tower buildings will be concentrated in the area near the Changjon Intersection so that one can enjoy a bird-eye-view of rhythmic distribution of huge buildings on the street.

A catering street will rise to face Okryu Restaurant and public buildings and cultural and service facilities of unique styles will be distributed to the convenience of the residents. They will be decorated with peculiar street lamps and diverse lights.

What draws attention in the lay-out of the streets is the fashionable appearance of high-rise and skyscraping apartment houses of peculiar styles, a harmonious combination of circular, semi-circular and angle style architecture.

The houses will have de luxe flats which will meet the cultural need of Pyongyangites.

When the construction of the Mansudae area completed, it will best match the monumental edifices including the Chollima Statue, the Tower of the Juche Idea, the Monument to Party Founding, the Grand People’s Study House and the Moranbong Theater and structures in the era of the Workers’ Party including An Sang Thaek, An Sang Thaek Street, Munsu, Mansudae and Changwang streets. This will change the appearance of the capital city beyond recognition.

Conceptual images of the construction area can be seen below.

UPDATE 1 (2011-5-24): In the comments, a reader points out a photo by a recent visitor to Pyongyang.  See a LARGE version of the photo here. The photo (2011-4-24) shows that renovation of the Mansudae area began over a month ago.  As of April 24, area families and all of their belongings had already been relocated (to where?); shops had been closed and emptied; and building destruction had begun.

ORIGINAL POST (2011-5-23):

The May 22 episode of the DPRK’s evening news (via elufa.net) featured a ground-breaking ceremony for a re-development project in the Mansudae area of Pyongyang’s Central District (만수대지구, 중구 역). You can see a clip of the evening news broadcast (with English translation) here.

I used the project overview map in the evening news to map out the construction area on Google Earth:

In Jongro-dong (종로동) the Pyongyang School Children’s Palace (평양학생소년궁전) will be spared destruction, but the exclusive Kumsong Middle School No. 1 next door (굼성제1 중학교–not to be confused with the Kumsong School in Mangyongdae) looks like it will be torn down.

In Mansu-dong (만수동) we will see the destruction of the historical Changjon Primary School (평양창전소학교) and the DPRK’s central bank.  Maybe the central bank will get a home in the new facilities, but I have no idea.

In Kyongsang-dong (경상동) the Pyongyang Kyongsang Kindergarden (for musically gifted youngsters) as well as the Pyongyang Children’s Department Store will be torn down.  These too may receive  a new home in the reconstructed neighborhood facilities.

Additional information:
1. This project comes immediately after the first Mansudae Area redevelopment project near the Potong Gate (just to the west of this one).  Read about the first Mansudae Street renovation project here.

2. This residential construction project, though unlikely to be completed by April 2012, is probably part of the DPRK’s 2012 Kangsong Taeguk (강성대국) campaign.  As part of the campaign, Pyongyang is to receive 100,000 new housing units.  Read more about 2012 construction projects here, here, and here.

3. One report says that the KPA has been put in charge of the DPRK’s renovations.

4. Pyongyang just held an architecture exposé.  See some of the work here.

5. These projects appear to be priorities as well.