North Korean Economy Watch

Daily NK
Kim Min Se
11/1/2007

Behind Pyongyang’s welcoming crowd at the time of the Vietnamese Communist Party’s Secretary General Nong Duc Manh and President Roh Moo Hyun’s visits, buildings, apartments, and residential homes could be spotted.

Residing in Pyongyang itself can be considered upper-class in North Korea. Defectors say that civilians who live apartments surrounding the city’s highways represent the highest class within North Korea.

North Korea calls roads that Kim Jong Il uses frequently or is able to use as “front roads.” The factor which is considered the most when allocating residents on these roads is preventing terrorist directed toward Kim Jong Il.

To reside in surrounding apartments of Pyongyang’s roads, potential residents have to go through a strict background search. Party members in Pyongyang, municipal party leaders, influential persons of the army and the administrative branch receive first priority. Besides this, average residents have to pass stringent background investigations.

It is difficult for even Pyongyang civilians to reside a day in these apartments. Even when visiting parents and siblings, it is not easy to stay overnight.

Ms. Kim, a defector from Pyongyang, said, “To reside in an apartment adjacent to Pyongyang’s front roads, we have to go through the National Security Agency, the Safety Agency, and Party investigative agencies. This is because all kinds of “top-ranked events” related to Kim Jong Il frequently occur on the road.

Ms. Kim said, “If a ‘top-ranked event’ is planned or is going on, the residents of nearby apartments have to undergo daily lodging inspections almost daily.”

Ms. Kim said, “A key aim of the inspections is to prevent illegal lodging of outside civilians (from zones other than Pyongyang) in these apartments. This is to prevent any outbreaks from possibly occurring at the events or when Kim Jong Il’s car passes by.”

She also said, “Even when residing in Pyongyang, people cannot freely stay at the apartments of parents or siblings near the roads. If one has to stay over, no matter the time of the night, he has to go to the Safety Agency, report to the officer in charge, register in detail information about family and kin, and get approval.”

Lee Ae Ran, a defector, said, “It is very important for Pyongyang residents to live near the “front roads.” That is a measure of the confidence North Korean authorities have in you and these residents receive better treatment than other civilians.”

Ms. Lee said, “At the ‘World Youth Student Festival,’ held in Pyongyang in `’89, all apartment residents were given a set of color TVs due to the fact that foreigners can suddenly drop by. Another time, the state provided ham only to the residents living near the ‘front roads,’ so Pyongyang residents called this region the ‘ham region’ and areas that are not near the roads ‘non-ham regions.’”

Ms. Lee was also said, “Civilians who live near the roads also suffer a lot. Daily street-cleanings are a must and people have to clear roads even in the middle of the night during winter.” When asked if cleaning snow is challenging, she was noted as saying, “If the snow is not properly cleared, the Great’s Leader’s car will be at risk on the icy roads.”

In North Korea, where Kim Jong Il’s safety is considered top priory, most Pyongyang residents were expelled to remote areas on account of their family backgrounds up until mid`70s.

Mr. Kim said, “The authorities banished residents of the capital to the rural areas regularly, just as one weeds a garden regularly.”

Ms. Lee said, “I don’t know how many people were purged to the countryside. When I tried to find a high school classmate in Pyongyang back in `92, only 16 out of 53 had remained. Most likely, over 50% were banished because of their family backgrounds.”

Yonhap
11/1/2007

The chief of South Korea’s Hyundai Group met with North Korean officials in charge of inter-Korean cooperation on Thursday to discuss the group’s business projects in the North, the North’s Korean Central News Agency (KCNA) reported.

The KCNA said Hyundai Group Chairwoman Hyun Jung-eun held talks with North Korean officials, including officials from the North’s National Economic Cooperation Federation.

The two sides took notes on an industrial park in the North Korean city of Kaesong and the building of a tourist resort near Mount Paekdu, according to the KCNA. Prior to the talks, Hyun’s delegation also toured Mount Paekdu, the North’s highest mountain on the border with China, the KCNA said.

The KCNA, however, stopped short of reporting the outcome of the talks.

At Thursday’s talks, Hyun is believed to have discussed the Mount Paekdu tourism project and the second-stage development of the Kaesong industrial complex with the North.

The South Korean company said earlier that Hyun and Yoon Man-joon, head of Hyundai Asan, a Hyundai subsidiary that runs Hyundai’s business in North Korea, visited Pyongyang on Tuesday via Beijing to discuss inter-Korean projects with North Korean officials. Hyun and Yoon are to return home Saturday, according to Hyundai officials.

Hyun’s visit this week marked her second trip to North Korea in a month, as she accompanied South Korean President Roh Moo-hyun on his historic inter-Korean summit with North Korean leader Kim Jong-il from Oct. 2-4.

At the summit, Roh and Kim agreed their two countries would work together on a wide range of economic projects, even though the two states are still technically at war since the 1950-53 Korean War ended in an armistice, not a peace treaty.

After the summit, Hyun said she expects tours to Mount Paekdu to start as early as next April. At the summit, the two leaders agreed to establish direct flights from Seoul to Mount Paekdu.

Hyundai maintains close business ties to North Korea. One of its major cross-border projects is tours of scenic Mount Geumgang on the North’s east coast. More than 1 million South Koreans have visited it since 1998.

Hyundai’s business with North Korea was started by its late founder, Chung Ju-yung, in the early 1990s.

Hyun took the helm of Hyundai in 2003 after her husband, Chung Mong-hun, the Hyundai founder’s fifth son, committed suicide by jumping from a window of his high-rise office in Seoul, apparently under pressure from a lobbying scandal involving a North Korean project.

Asia Times
Bertil Lintner
10/31/2007

North Korean Premier Kim Yong-il is scheduled to pay a four-day visit to Cambodia in early November, underscoring the curious close relationship between one of the world’s last communist dictatorships and one of Asia’s most ancient monarchies.

Kim Yong-il, who should not be confused with the North Korean supremo, “Dear Leader” Kim Jong-il or any of his relatives, will hold talks with Cambodia’s retired king Norodom Sihanouk, the Cambodian Foreign Ministry said in a statement posted on its website.

The North Korean premier will also hold “official talks” with his Cambodian counterpart Hun Sen, and “pay courtesy calls” on Senate president Chea Sim, and the president of the National Assembly, Heng Samrin, according to the statement.

Cambodia has long served as a link between North Korea and Southeast Asia and beyond, so it is plausible to assume that trade and related issues will be on the agenda. For years the two countries ran a joint shipping company, and before the China-led six party talks, Cambodia had offered to mediate over Pyongyang’s contentious nuclear program.

Kim Yong-il’s visit to Cambodia is not the first by a North Korean dignitary in recent years. Kim Yong-nam, president of North Korea’s rubber-stamp parliament, the Supreme People’s Assembly, also visited the country in 2001 at the invitation of Sihanouk, who had then not yet abdicated in favor of his son, Norodom Sihamoni, the current serving monarch.

Kim Yong-nam now functions as de facto head of state, as Kim Jong-il’s father, “Great Leader” Kim Il-sung was elevated to the position of “eternal president” before his death in 1994, making North Korea not a monarchy, but rather the world’s only necrocracy.

As incongruous as it may seem, Cambodia is North Korea’s oldest ally in Southeast Asia. It all began when Sihanouk met Kim Il-sung in 1961 at a Non-Aligned Movement meeting in Belgrade and a personal friendship developed between the two leaders. When Sihanouk was ousted in a coup in 1970, Kim Il-sung not only offered him sanctuary in North Korea but also had a new home built for him about an hour’s drive north of Pyongyang.

A battalion of North Korean troops worked full-time on it for almost a year, and when it was finished, only specially selected guards were allowed anywhere near the 60-room palatial residence. Overlooking the scenic Chhang Sou On Lake and surrounded by mountains, the Korean-style building even had its own indoor movie theater. Like the Great Leader’s son, Kim Jong-il, Sihanouk loves movies.

Sihanouk has both directed and acted in his own romantic feature movies and a few more were made in North Korea, with Cambodian actors strutting their stuff against the backdrop of Korea’s snow-capped mountains.

French wines and gourmet food were flown in via China, and Sihanouk and his entourage were treated as royals would have been in any country that respects monarchy – as North Korea evidently does.

By contrast, North Korea has maintained less cordial relations with neighboring communist Vietnam, which still exerts behind-the-scenes pressure on Cambodia. Kim Yong-il will nonetheless also visit Hanoi during his diplomatic tour of Southeast Asia.

Throughout the Vietnamese occupation of Cambodia, North Korea refused to recognize the regime that Hanoi installed in Phnom Penh in January 1979 – and that despite immense pressure at the time put on Pyongyang from Moscow. During a meeting between Kim Il-sung and Sihanouk seven years later on April 10, 1986, in Pyongyang, the Great Leader reassured the then prince that North Korea would continue to regard him as Cambodia’s legitimate head of state.

When Sihanouk returned to Phnom Penh in September 1993, after United Nations-led mediation to end Cambodia’s civil conflict, he arrived with 35 North Korean bodyguards, commanded by a general from Kim Il-sung’s presidential guards. They are still there, now guarding Sihanouk as well as the new king, Sihanomi, who is not as close to North Korea as his father, but has paid at least one visit to Pyongyang.

Sailing buddies
Sihanouk and the Cambodian royals showed their gratitude to the North Koreans when in the late 1990s they set up a privately-owned shipping registry, the Cambodia Shipping Corporation (CSC). The flag of convenience was used by the North Koreans, and it enjoyed royal protection as it was headed by Khek Vandy, the husband of Sihanouk’s eldest daughter, Boupha Devi.

CSC was also partly owned by a Phnom Penh-based North Korean diplomat and for a few years aggressively marketed itself as a cheap and efficient “flag of convenience” service for international shippers. A series of embarrassing maritime incidents, including the interception in June 2002 of a Cambodian-registered – though not North Korean owned – ship by the French navy, in a joint operation with US, Greek and Spanish authorities, of a massive haul of cocaine off the West African coast prompted Hun Sen’s government to cancel CSC’s concession and reportedly give it to a South Korean company, the Cosmos Group.

At the time, International Transport Federation general secretary David Cockroft told the Cambodia-based fortnightly newspaper the Phnom Penh Post that “they’ll need to be able to walk on water, because nothing short of a miracle will clean up the name of Cambodian shipping”. Indeed, little appeared to change, including North Korea’s use of Cambodia’s flag of convenience for controversial shipments.

In December 2002, a Cambodian-registered, North Korean-owned ship named So San was intercepted by Spanish marines, working on a US tip, in the Arabian Sea. It was found to be carrying 15 Scud-type missiles, 15 conventional warheads, 23 tanks of nitric acid rocket propellant and 85 drums of unidentified chemicals under a cargo of cement bags.

The destination of the weaponry was said to be Yemen, and following protests from both Yemen and North Korea – and intervention by the US, which apparently did not want to antagonize Yemen, a supposed ally in Washington’s “war on terror” – the ship was allowed to continue to Yemen. Later revelations indicated that the cargo was ultimately delivered to Libya, which caused considerable embarrassment in Washington.

Premier Kim Yong-il is likely to be quite familiar with the CSC, as he served as minister for land and marine transport from 1994 until the Supreme People’s Assembly appointed him to the premiership in April this year. But since the scandal-ridden CSC was reorganized five years ago, Cambodia’s economic importance to Pyongyang would appear to have waned, and North Korea’s only known activity in the country today is in the restaurant business, including eateries in Phnom Penh and Siem Reap.

Yet as a diplomatic link to the wider region, Cambodia is still important to North Korea. In April 2003, the Cambodian government, at the urging of Sihanouk, had plans to send an envoy to Pyongyang in a bid to persuade the North Korean leadership to be more flexible about talks on its nuclear program, which at that time had stalled.

The mission never materialized, but North Korea no doubt remembers that its trusted ally Cambodia tried first to mediate – and that Phnom Penh in future could still serve as a gateway for improved contacts with the outside world. It remains to be seen what message Kim Yong-il will bring to Phnom Penh, but it is reasonable to assume that his visit will, despite the official announcements, be confined merely to “courtesy calls” and royal audiences.

Bertil Lintner is a former correspondent with the Far Eastern Economic Review and the author of Great Leader, Dear Leader: Demystifying North Korea under the Kim Clan. He is currently a writer with Asia-Pacific Media Services.

Nautilus Institute
Stephan Haggard and Marcus Noland
10/30/2007

The success of economic cooperation projects depends on the intentions of North Koreans.

The Arabs have a proverb: “He who foretells the future lies.” The recent summit announcement may make many people liars, not the least its authors. The problem with the summit announcement is that its ultimate impact depends on three major unknowns: the attitude and commitment of the next South Korean president; the willingness of the North Koreans to embrace reforms; and progress-or lack thereof-on resolving the North Korean nuclear issue.

The summit and the nuclear controversy are inextricably linked, even if Roh Moo-hyun and Kim Jong-il may have wished to downplay it, and the summit announcement must be evaluated in the context of the nuclear matter. The nuclear issue provides a great opportunity for North-South reconciliation but also sets limits on how fast progress on other fronts can be made.

On the one hand, aid from Seoul may act as inducement for Kim Jong-il to resolve the nuclear issue; this has long been the claim of proengagement politicians. On the other hand, Seoul will receive little support for its diplomacy from the United States, Japan, and other countries if it moves forward aggressively on economic cooperation before the North Korean regime shows a genuine willingness to abandon its nuclear weapons program.

Indeed, the risk is that aid from the South could reduce economic incentives on the North to cooperate and undercut the negotiations. Pyongyang’s celebration of the first anniversary of its nuclear test underscores that achieving this goal could prove an arduous march of its own.

Yet there are signs of hope. The summit document did make a reference, however brief, to resolving the nuclear question and in the context of the six-party talks the North Koreans have-almost simultaneously-agreed to a timetable for the dismantlement of existing nuclear facilities. The summit agreement also contains some important confidence building measures, including most notably a commitment to address conflicts over the disputed boundary in the West Sea that has led to military engagements in the past.

However, all parties have to date studiously avoided mention of what will be done with North Korea’s stocks of nuclear weapons and fissile material. And talk of a final peace settlement to replace the armistice puts the cart before the horse; in the absence of a resolution to the nuclear question it would make little sense to negotiate a broader peace agreement.

If these issues can be resolved the next hurdle is North Korea’s willingness to embrace economic reform. The summit document lays out a number of economic cooperation projects that could be beneficial to both North and South Korea: reestablishment of trans-Korean transportation links; expansion of the Gaeseong Industrial Complex and its replication in other locations; and cooperation in specific industries such as shipbuilding where complementarities would seem to exist between North and South Korean capabilities. All of these are positives.

Yet the projects, while desirable, will have a limited impact as long as North Korea avoids the challenge of broader opening and reform. North-South discussions appear to have avoided the basic building blocks of a market economy-operation of markets, enterprise management, agricultural reform-which would allow the North Koreans to make the most of the aid that they will receive. The long history of aid to other developing countries suggests that aid can be futile, even counterproductive, in the absence of complementary reforms.

Moreover, South Korea’s engagement-in contrast to China’s-remains bottled up in physically and economically delimited projects such as Gaeseong and the Mount Geumgang tourism venture. This situation is regrettable because it is only by broadening contacts with profit-oriented South Korean firms that their North Korean counterparts will learn about the operation of a market economy. Pyongyang continues to resist broader opening, presumably due to concerns that more contact with South Korea could be politically destabilizing.

South Korean analysts are already calculating the costs and benefits of the program outlined in the summit announcement, with one press account describing the costs as “astronomical.” Even the high-end estimates, on the order of $11 billion and more, are a mere drop in the bucket compared to the ultimate costs of rehabilitating the North Korean economy and providing a stable basis for eventual unification. If nothing else, such analyses should stimulate a serious discussion in South Korea of the long-term costs and benefits of different contingencies on the peninsula including the possibility of regime collapse, a discussion that, regrettably, has largely been avoided.

The resolution of outstanding security issues on the peninsula is an important precondition for broader reforms to really work. It is unlikely that foreign investors from the United States, Japan, or Western Europe are going to take a serious interest in the country in the absence of a resolution of the nuclear question. The summit announcement is unlikely to have much of an impact on the passage of the Korea-US free trade agreement (KORUS FTA) in the US Congress. But if North and South Korea push forward with the phase II expansion of the Gaeseong complex in the absence of resolution of the nuclear issue, it would make passage of the KORUS FTA agreement in the US Congress more difficult.

Ultimately, these issues will be laid at the doorstep of the next South Korean president. One contender, Lee Myung-bak, has already expressed reservations about the open-ended nature of South Korean commitments. But whoever enters the Blue House in February 2008, the president-elect will have to make their own decisions on how to approach the North and may not be bound by a document negotiated by an unpopular lame duck president. The 2007 summit announcement may end up like the 1991 North-South Denuclearization Accord, amounting to little more than a statement of good intentions rather than a map for subsequent policy.

The two agreements differ in one significant respect, however. The big budget projects of the summit announcement may create constituencies in South Korea in favor of expanded engagement for purely self-interested reasons. The next South Korean president may confront South Korean corporations lobbying for expansion of contact for the contracts or subsidies they bring regardless of the broader political or diplomatic ramifications.

Ultimately the success of the program sketched out in the summit announcement will depend on the intentions of the North Koreans. Pyongyang could use the assistance offered by the Seoul to leverage its own reform program. However, it could take the aid and simply retreat into its shell, avoiding real reform and a verifiable resolution to the nuclear issue. Only time will tell.

Korea Times
Jung Sung-ki
10/29/2007

North Korea has a keen interest in economic modernization program aimed at luring foreign investment through business cooperation projects with other countries, a member of the European Parliament said Monday.

In a press conference in Seoul, Hubert Pirker, an Austrian member of the European Parliament, said the North clearly understands the fact that without economic modernization, it will not be able to attract foreign investment into the country.

Pirker and two other EU representatives _ Jas Gawronsky of Italy and Glyn Ford of Britain _ visited North Korea from Oct. 20-27 and met the North’s Prime Minister Kim Yong-il. They also held an economic forum with North Korean officials.

During the forum, North Koreans’ attitudes “were not closed or hostile,” said Pirker.

“We visited the railway station, for example, and also parks and restaurants. I could say we could see more modern-style restaurants and more cars than ever before,” the European lawmaker was quoted by Yonhap News Agency as saying.

The European lawmakers discussed ways of modernizing North Korea’s agriculture, light industry, information technology and finance sectors with officials there, Pirker said.

North Korea’s Foreign Minister Pak Ui-chun expressed his wish to visit Europe next year, as Pyongyang seeks to send its young officials and industrial trainees there to learn information technology and other advanced knowledge from European nations, he said.

Pirker said the delegates had advised the North Koreans that upgrading the level of communications and finance systems in the North to global standards was essential to securing foreign investments in a stable manner.

Progress at the six-party talks aimed at scrapping Pyongyang’s nuclear weapons program and expanding inter-Korea economic cooperation would help the North achieve its goal of inviting foreign capital, the legislator added.

The European Union has so far sent about 50 million euros worth of aid to North Korea, he said.

The impoverished North has recently shown strong interest in the economic reform programs of other countries.

Reports said North Korean leader Kim Jong-il expressed intentions last week copying Vietanam’s economic reform and openness policy, called “Doi Moi,” during a meeting with Nong Duc Manh, the secretary-general of the Vietnamese Communist Party, in Pyongyang.

The ongoing visit to Hanoi by the North Korean premier appears to have something to do with Kim’s remarks, they said. The reclusive leader is reportedly planning to visit Vietnam in the near future.

North Korean officials expressed firm commitment to denuclearization under the Feb. 13 nuclear deal, according to Pirker.

Under the pact signed by the two Koreas, the United States, China, Japan and Russia, Pyongyang pledged to disable its nuclear facilities and declare all of its nuclear programs by the end of this year in return for economic assistance and political concessions.

North Korea has received 50,000 tons of heavy fuel oil from South Korea and an equal amount from China for closing five of its nuclear facilities in July. The regime is to receive an additional 900,000 tons of oil or equivalent energy aid if it goes through the second stage of denuclearization.

The EU delegates are scheduled to pay a courtesy call on Prime Minister Han Duck-soo and hold meetings with South Korean business leaders including Hyundai-Kia Automotive Group Chairman Chung Mong-koo before leaving South Korea on Nov. 2.

Daily NK
Kim Min Se
10/26/2007

There is a prospect of the rise of “second food crisis” next year because of the flood disaster and the resulting food shortage.

A senior researcher at Korea Rural Economic Institute, Kwon Tae Jin said warningly, “Unless North Korea comes up with a special plan to secure food supply, there will come another food crisis next year, which is as severe as the one in the mid and late 1990s.”

Kwon anticipated that North Korea would need 5.2 million tons of grain for domestic consumption. Unfortunately, it is expected that North Korea would produce around 3.8 million tons of grain. This means there will be a shortage of 1.4 million tons of grain.

The statistics indicates there is a real possibility of a food crisis. North Korean authorities announced that the flood inundated about 2.2 billion ㎡ of farmland, which accounts for 14 percent of the country’s farmland. It is estimated that 2.2 billion ㎡ of farmland produces at least 500,000 tons of grain.

However, another prospect says that although food shortage is inevitable, it will not lead to mass starvation in North Korea as it did in the mid-1990s. Most of defectors from North Korea said, “Since the mid-2000s, things have changed. There won’t be any serious starvation.” They said that the current situation is different from that of those days under the central food distribution system. They added that the Jangmadang (markets) economy has changed a way for life among North Korea people.

◆ The amount of demand for food is overestimated

It should be double-checked whether North Korea really needs a minimum of 5.2 million tons of grain. There is criticism that the estimate of food demand which was calculated by some South Korean experts on North Korea and relief organizations is unrealistic. It is also pointed out that the estimate is calculated based on the nutrition standard of South Korea.

Defectors said that mass starvation would not have occurred if North Korea had at least a half of 5.2 million tons of grain in the mid 1990s.

Although the international standard for daily nutritional intake is between 2,000 and 2,500 kcal/day, North Korea sets the standard at 1,600 kcal/day, which amounts to 450 grams of grain.

It is easy to estimate the minimum amount of food demand needed in North Korea. Let us say every individual including children and the elderly needs 550 grams of grain per day, which is equal to the daily amount of food distributed to every adult by the state. With the population of 22 million in North Korea, the country then needs 12,100 tons of grain each day and 4.4 million tons of grain per year.

It is known that the North Korean government provides 550 grams of grain for adults and 300 grams for both children and the elderly. According to CIA’s World Fact Book 2004, the population aged between 15 and 64 in North Korea is around 15 million, which accounts for 67.8 percent of total population. This means the population of children and the elderly together reaches about 7 million. If we do the math, we come into conclusion that the amount of food needed in North Korea every year is 3,777,750 tons of grain.

Recall that North Korean people had received the aforementioned amount of food through the state food distribution until early 1990s. Of course, the country did not suffer from mass starvation back then.

The mass starvation during the mid-1990s resulted from huge decrease in food production between 1994 and 1998. In those years, North Korea produced about 2 million tons of grain, which fell far below the needed levels of food production. Hwang Jang Yop, former secretary of the Worker’s Party also testified that in the fall of 2006, while he was still in North Korea, he once heard the secretary of agriculture Seo Kwan Hee worrying about extremely low food production.

Therefore, it is correct to estimate the minimum amount of food needed in North Korea at 3,777,750 tons of grain. If the food production decreases below 3 million tons, then the food prices will skyrocket, and the possibility of mass starvation will be increased.

◆ A New way of life among North Korean people helps prevent them from falling victim to starvation.

North Koran people do not believe in the state authorities any more. The people know that they suffered from horrible starvation because they relied on the state and its food distribution system. During the crisis, many people had desperately waited for food to be distributed until they collapsed and died. Nowadays, North Korean people find a means of living by themselves at Jangmadang.

“There is no free ride” is the words on everybody’s lips in North Korea, which means that everyone must work hard in order to make a living. The lowest class became a day laborer.

The mass starvation of the mid-1990s has brought a significant change into North Korean society. Except a few, most of North Korean people do not rely on the state’s food distribution system. Instead, they have come up with a variety of survival techniques such as engaging in business, illegal trade with China or real estate transactions, receiving support from defected family members, and house sitting.

In that manner, North Korean people make money and use it to buy rice. An affiliate at the Bank of Korea who studies price trends of North Korea said, “Since the adoption of the July 1 Economic Improvement Measure, the price of rice and corn has increased the least.” If the prices go up, people would tighten their belts and decrease their spending on every item except rice. This means they are not that vulnerable to starvation as they used to.

◆ Businessmen are good at securing food.

Recently, a number of rich businessmen have emerged. Some have tens of thousands dollars, and others as many as several million dollars. Groups of Jangmadang businessmen have been organized with these rich businessmen as the leaders.

These businessmen come and go to China as they please and supply food and goods to Jangmadang in North Korea. If the rice price in North Korea is expensive than in China, they buy Chinese rice and sell it at Janmadang. In this way, they help balance supply and demand at the market.

Furthermore, Chinese residents in North Korea and Chinese businessmen also joined the North Korean businessmen as providers at the market. They too sell food produced in China at Jangmadang when food prices go up in North Korea. If possible, they even sell rice reserved for the People’s Army. There was an accusation that the state authorities supplied food aid from overseas for the People’s Army while collecting food produced in North Korea at the same time.

Of course, some businessmen could deliberately keep a hold on food supply anticipating an increase in food prices. However, that kind of unfair activity is temporary. Although it is too early to tell, the “invisible hand” of the market, however small it is, is operating in North Korea and acting as a preventive measure against starvation.

Institute for Far Eastern Studies
NK Brief No. 07-10-23-1
10/23/2007

DPRK authorities are quick to stress that not one single unemployed worker can be found in Socialist North Korea. The truth is, however, unemployment has existed in the past, and now out-of-work laborers are taking on a new form.

With the exception of a small minority of North Koreans, most citizens are assigned professions and dispatched to their place of employment by DPRK authorities with no regard to personal aptitude or skills. This has led to the refusal of some to take assignments in mines, shipyards, and other undesirable factories, creating a group of ‘non-workers’.

However, today’s unemployed are different from the unemployed found in the 1980s and 90s. In the past, these workers refused positions at undesirable factories. In the late 1990s, with the cessation of food rations and lack of job positions, a good number of factories and businesses shut down operations, leading to an increase in unemployment. Now, it is the mines, companies, and yards that are refusing to take on new workers.

Currently, North Korean authorities are tasking managers of organizations and companies with the responsibility of feeding employees. Anyone with the skills and the money can become a manager. Authorities assess whether someone can provide wages and rations for employees, and if so, will put them in charge. However, the order that “Managers not able to carry out the task of feeding [employees] will be released or demoted” has been passed down, putting a considerable burden on executives and managers. As they are now responsible for both the wages and the rations of their employees, these managers are not looking to take on new workers. This is problematic for those dismissed from military service with little or no trade skill, and for those receiving only a middle-school education, especially women. These citizens are turning to trade to provide a living.

Daily NK
Yoon Il Geun
10/22/2007

As part of special education policy for the talented, North Korean government established in 1984 Pyongyang No. 1 Senior-middle School, whose education course corresponds to the national curriculum for high schools in South Korea. By 1985, the North Korean regime had finished establishing No.1 Senior-middle School at every seat of provincial government and started a full-scale special education for the gifted.

The competition for No. 1 Senior-middle School is fierce because only those graduates from these schools can get into universities. The No. 1 Senior-middle School is different from the ordinary schools in terms of teaching materials and the quality of teachers. However, there is a huge difference even among No.1 Senior-middle Schools. The best one is Pyongyang No.1 Senior-middle School.

Located in the Shinwon-dong of Bontongkang-district, Pyongyang, Pyongyang No. 1 Senior-middle School has a total floor space of 28,000 square meters, a four-story building for primary school, a ten-story building for Senior-middle school, dormitories, cafeteria, and other accessory buildings. It is surely the best school in North Korea.

The entrance quota is approximately one thousand students with around 300 selected from the countryside. The dorms for these students from provinces have better facilities than the dorms of Kim Il Sung University have.

The predecessor of the present Pyongyang No. 1 Senior-middle School was “Pyongyang Namsan Advanced Middle School,” that Kim Joing Il attended between 1957 and 1960. In those days, the school only received as its students the children of army general, anti-Japanese fighters, the cadres of the central party, cabinet members, and renowned artists or intellectuals. It was “the school for the nobility.”

As part of Kim Jong Il’s policy for special education, the school changed its name into Pyongyang No.1 Senior-middle School. The latter now boasts about having best education and experimental facilities, and prominent teachers. The school buildings which were constructed at a cost of 5.8 million U.S. dollars are very modern. All facilities were imported from Japan including desks and chairs, interior decorations, laboratory tools, reagents, musical instruments, and sports equipment

Also called as Kim Jong Il’s alma mater, the school has a pool of teachers, most of whom are graduates from Kim Il Song National University, Kimchaek University of Technology, and Kim Hyong Jik College of Education. It also has twenty (or so) up-to-date laboratories, an excellent specimen room, and the scanning electron microscope, one which is not available even in Kim Il Sung University.

At the 10-story and its accessory building, there is the “Kim Jong Il Memorial Hall,” which exhibits materials from Kim Jong Il’s school days, and is used for idolization education of Kim Jong Il. Moreover, the school has an auditorium with the sitting capacity of 500 persons, libraries, gyms, swimming pools, dispensaries and a barbershop.

Inside the 10-story building are the principal’s office, the room for party secretaries, teachers’ rooms, classrooms, laboratories, audio-video classroom for foreign language studies, “Kim Il Sung Revolutionary History Study” room, modern computer labs, and a studio fully equipped with Japanese electronic musical instruments.

Those students originally from Pyongyang are mostly the children of the central Party or central ministry members, anti-Japan fighters, army generals, and rich Pyongyang citizens including some Korean-Japanese. Unlike the children of the upper classes, students from the countryside are selected not based on family background but talents. Most of these students are transfer students from provincial Senior-middle Schools. Therefore, there is a stark contrast between less qualified students from affluent Pyongyang families and highly talented transfer students from not–so- rich families.

The students from provinces display real talents.

In fact, it is these transfer students from provincial No.1 Senior-middle School who really raise the prestige of Pyongyang No.1 Senior-middle School. For the most time, it is them who won awards at the International Math Olympic or computer tournament, or achieve academic success later in college.

Apparently, Pyongyang No.1 Senior-middle School serves two purposes. It is both an aristocratic school for the upper-class children and a special school which offers education for the gifted and produces the most brilliant men in North Korea.

As the most elite school, Pyongyang No. 1 Senior-middle School values not only science and technology education but also art and physical education. This is what makes Pyongyang No.1 Senior-middle School different from other provincial No.1 senior-middle Schools. The physical education program emphasizes activities such as basketball, swimming, and apparatus gymnastics (horizontal bar, parallel bars), and offers lessons of boxing, soccer, and table-tennis. It is mandatory to make swimming lesson two times per week. In addition, the music education program offers classes such as singing and composition course, and electronic piano lessons. There are also music bands in the school.

As a result of the broad-based curricula of Pyongyang No.1 Senior-middle School, the graduates of this school are taller on the average than their counterparts from No.1 provincial Senior-middle Schools, and display better performance at physical and music education. The self-confident students of Pyongyang No.1 Senior-middle School are also good at dating.

On the streets in Pyongyang, people can easily spot schoolboys with school badge of Pyongyang No.1 Senior-middle School flirting with school girls from No.1 or No.2 Geumsung School Special Art Schools.

Thanks to Kim Jong Il’s favoritism, Pyongyang No.1 Senior-middle School enjoys many kinds of privileges. In 1997, the students received exemption from military service. Furthermore, they have great advantage over the students of No.1 provincial Senior-middle Schools in obtaining the nomination letter needed to get into top universities,

When it comes to entering into Kim Il Sung University, each No. 1 provincial Senior-middle School is allowed to write about 5~9 nomination letter whereas Pyongyang No.1 Senior-middle School can write about 80~90. Similarly, the provincial schools can write no more than 1~2 nomination letters for Pyongyang Medical School whereas Pyongyang No.1 Senior-middle School can write 20~30 nomination letter. Almost all students who graduated from Pyongyang No.1 Senior-middle School go to top universities. Those graduates who were poor at school performance go to Pyongsung College of Science.

The graduates from Pyongyang No.1 Senior-middle School also enjoy special treatment in their universities. They are more likely to be selected as student leaders and to receive attention from professors. As Kim Jong Il’s alma mater, Pyongyang Senior-middle School No.1 draws national attention and support. It is surely the best elite school in North Korea.

Korea Times
Andrei Lankov
10/21/2007

When I was preparing for a trip to Yanbian, people told me that I would not have any difficulties in communicating with the locals: “They all speak Korean there.” It seems like an exaggeration, but it was not.

Every time my poor and broken Chinese was not up to the task, I asked if somebody around could speak Korean and such a person was found in seconds. Indeed, Yanbian is officially known as the Korean Autonomous Prefecture.

From the 1880s the Koreans began to move to the area in large numbers, and by 1949 when the Communists took power in China, they formed a majority in the borderland areas. In 1945 about 1.7 million Koreans lived in China. About 500,000 of those chose to move back to Korea in the late 1940s, but a million or so decided to stay.

Nowadays, the Korean population has reached two million, so some Korean nationalists even describe this part of China as “Third Korea,” together with the North and South Communist China emulated the Soviet approach to ethnic minorities. Ideally, each minority had to be given some kind of autonomous quasi-statehood.

Within such statehood, the ethnic minority would be provided with the education in their native language, the media in this language and some token representation of the minority in the government agencies. This scheme was applied to Yanbian as well, and in spite of all problems this policy has worked so far. On the one hand, Koreans of the area, unlike Koreans in the former USSR, Japan or U.S., have managed to keep their language.

On the other hand, their loyalties seem to remain firmly with Beijing. The Korean language is widely used in the area. Lively talks in Korean can be overheard during walks through the city of Yanji, the capital of the Prefecture. It is remarkable that the language is used not only by elderly people, but often by youngsters as well.

As stipulated by the law, all shops and government agencies have to display signs in two languages, and it is explicitly stated that the Korean text should not be smaller than its Chinese equivalent. The local newsstands sell a number of Korean language publications, ranging from pulp fiction periodicals with semi-nude beauties on the cover to a solid quarterly which publishes the work of local Korean-language writers (such a quarterly seems to be run on a government subsidy).

The ethnic flavor has even become a tourist attraction. The dog meat restaurants are everywhere, and unlike South Korea, they are not hidden but openly advertise themselves. The images of the hanbok-clad ladies are another feature of local advertisements. The promotion of ethnic features seemingly targets both South Koreans and visitors from other parts of China. It is remarkable that until recently the local Koreans overwhelmingly sent their kids to Korean language schools.

The curriculum at those schools was identical to the schools attended by the Han Chinese, but Korean was the major language of tuition. After graduating from high school, young Koreans can proceed to the local university where they are officially granted preferential treatment at the entrance exams, sort of “affirmative action,” Chinese style. Of course, the life of Koreans was not always easy.

There were periods of restrictions and even open persecution, especially in the crazy decade of Mao’s Cultural Revolution in the late 1960s. At those days, the relations between Beijing and Pyongyang went sour, and this influenced the local Korean community to some extent. A middle-aged ethnic-Korean businessman told me, “Back in the late 1960s, I seldom saw my parents. Because they were members of an ethnic minority, they had to go to ideologicalstruggle sessions every day and had to stay until very late.

”However, that period was an exception. The same person, who is buy no means a fan of the current Chinese system, still admitted when I asked him about discrimination: “Discrimination? Well, almost none, to be frank. They appoint some Han Chinese officials to supervise the administration, but basically I don’t think Korean people here have problems with promotions or business because of their ethnicity.

Sometimes being a minority even helps a bit — it’s easier to get to a university if you come from a minority group.” However, in recent years the situation in the area began top change fast. The Koreans began to switch from their native language to the Chinese (or, to be more precise, Chinese is increasingly seen as a native language by the children born in Korean-speaking families). Schooling in Korea faces a major crisis.

According to statistics, widely known and discussed, the number of children enrolled in Korean schools in 2000 was merely45.2 percent of the 1996 level. In the 1990-2000 period, 4,200 Korean teachers, or some 53 percent of the total, left their jobs because of school closures. It is remarkable that younger people with whom I could talk often have obvious problems with communicating in Korea, and whenever possible prefer to switch to Chinese. In families they still talk Korean to the elders, but Chinese is a natural choice between themselves.

In short, the assimilation began, and it might be unstoppable. Koreans leave their villages and go to the cities where they work and cooperate with Chinese. They often intermarry, and Chinese becomes the sole language of their kids. Like it or not, but the days of the “Third Korea” seems to be over.

Asia Times
Michael Rank
10/20/2007

This 38-year-old British soprano may not be a household name in the western world, but she’s a superstar in North Korea where she has given dozens of concerts and appeared countless times on the rigidly state-controlled television.

Suzanne Clarke has performed every year since 2003 in the culturally and politically isolated country, where she has sung everything from Mozart to Gershwin and from Verdi to Andrew Lloyd Webber.

North Korea may be highly repressive and deeply suspicious of foreign cultural contamination, but Clarke says the government has never attempted to censor what she sings. “There’s been no interference. I sing what I would like to sing,” she says.

She sings Korean songs as well as Western classics, but is careful to avoid being used as a tool of the Pyongyang regime, so she tactfully turns down requests to sing hymns of praise to the Great Leader Kim Il-sung and his son and successor, Kim Jong-il, around whom an all-embracing personality cult revolves, and which the North Korean government is always eager for foreigners to endorse.

“I come with a message of friendship and peace, not politics. I’m incredibly careful about what I choose to sing. I won’t sing anything in praise of any regime or any particular person,” said Clarke, an active member of Britain’s Labor Party who has nurtured ambitions to become a member of parliament.

She is strongly against capital punishment, which is widely carried out in North Korea, and does not hesitate to tell North Korean officials when she disagrees with their policies. “I tell them that I don’t believe in the death penalty. If I see something that isn’t correct I will point that out.”

Clarke, who has been a principal singer at La Scala, Milan and has been taught by Pavarotti’s singing teacher, Arrigo Pola, loves the Italian repertoire and has sung plenty of Puccini arias in Pyongyang. But she’s wary about including Madame Butterfly in her North Korean repertoire, as this is a sensitive area because of the undertones of American imperialism in the tragic love affair between a Japanese geisha and an American sailor.

Clarke said that despite frequent media attacks on cultural imperialism, North Koreans have “a certain level of knowledge of western music”, and their orchestras play works by Beethoven, Mozart, Tchaikovsky and even the decidedly modernist Shostakovich. In fact, Shostakovich’s Seventh (or Leningrad) symphony seems to be something of a favorite, judging how often performances of it have been reported by the official North Korean news agency KCNA, although it is unclear whether the government is aware that it is sometimes seen as a veiled attack on Stalin.

Clarke said North Koreans love to be challenged by music that is technically difficult, “so I deliberately try to perform some of the more difficult pieces in the repertoire”. She finds North Korean audiences highly appreciative and they are especially fond of Danny Boy which is surprisingly something of an old favorite in Pyongyang (as it is with older Koreans across the DMZ). “I like trying to win them over, and they do reciprocate,” she says.

Clarke suffered a nasty attack of food poisoning when she visited North Korea for the first time for their annual Friendship Festival in 2003, but this didn’t put her off in the least. She enjoys the country so much that she has twice taken her mother, also a Labor Party activist – “They love my mother because she comes from a poor family and always looks immaculate” – and this year she took her partner Chris to Pyongyang. But next year she may have to skip a visit because she is expecting her first baby in January.

Clarke became a star in Pyongyang via a highly unexpected route. She hails from the northeastern English town of Middlesbrough, which is where North Korea sensationally beat Italy in the quarter finals of the soccer World Cup way back in 1966. In 2001 the remaining members of the North Korean team returned to Middlesbrough as part of a film documentary, The Game of Their Lives, and Clarke sang the North Korean Song of Friendship at the town’s new stadium.

This was the beginning of a remarkable relationship which is continuing not only with concerts but also with fundraising. Clarke has raised money to buy musical instruments for North Korean schools, and now she is hoping to bring a North Korean orchestra over to London next year.

This would be the first ever visit by a North Korean orchestra to the West, and despite the enormous hurdles Clarke is hopeful that she will succeed. “Things are going very well but we need more sponsorship,” said Clarke, who is working with, among others, David Heather, who this summer brought the first North Korean art exhibition to London.

The New York Philharmonic is discussing a possible concert in Pyongyang next February, so North Korea is clearly opening up musically, and Clarke is ready to give the Americans some expert advice should they request it.