North Korean Economy Watch

According to Yonhap:

The North brought in 13,769 tons of Chinese fertilizer in February, a whopping 13 times more than some 1,064 tons from a year earlier, according to the data compiled by the Korean Rural Economic Institute (KREI).

In the first two months of the year, Pyongyang imported 48,882 tons of Chinese fertilizer, which is far higher than 1,066 tons from the same period a year earlier, the data showed.

“The 2013 figure is unprecedented, as the North used to buy a limited amount in the winter season. It seems to be very proactive in securing fertilizer long ahead of its usual schedule, and that indicates farm output improvement is its top priority,” said KREI researcher Kwon Tae-jin.

In his New Year’s message, the North’s young leader Kim Jong-un stressed boosting food production, saying all efforts “should go for agriculture … in order to build a strong economy and to improve the people’s livelihoods.”

Last year, Pyongyang bought a total of 207,334 tons of fertilizer from China, down by 18 percent from the previous year.

Additional Information:

1. The United Nations and South Korean government have reported that domestic gain production is up in 2013.

2. The DPRK has also increased food imports from China in 2013.

3. Food aid from UN was down in 2013.

4. Food prices fell in last year. DPRK won appreciated in last year.

5. Kim Jong-un’s speech to subworkteam leaders.

6. Previous posts on ‘foood’.

7. Scott Snyder on DPRK-China trade.

Read the full story here:
N. Korea’s fertilizer imports from China soar in Feb.
Yonhap
2014-3-28

According to Yonhap:

The Belgium branch of Handicap International earmarked $1.12 million for this year to support medical and rehabilitation facilities in the communist country to promote the health and well-being of the disabled there, the Voice of America (VOA) reported, citing an e-mail from the agency’s official Dominique Delvigne.

The budget is also to be spent for such projects as nurturing teachers in charge of special education for visually- and hearing-impaired people, and assisting the (North) Korean Federation for the Protection of the Disabled (KFPD), the official added.

The NGO, established in 1982 to help disabled and vulnerable people in situations of poverty and exclusion, conflict and disaster, began to help physically challenged people in North Korea in 1998 at the request of the KFPD.

According to the report on disability published by the World Health Organization in 2013, some 3.4 percent of the population in North Korea suffered from a disability as of 2007.

Read the full story here:
Belgium-based NGO to spend US$1.1 mln in 2014 for disabled N. Koreans
Yonhap
2014-3-19

According to Yonhap:

The North’s per-capita GDP for last year is estimated at US$854, up $39 from a year earlier, according to the report released by the Hyundai Research Institute (HRI), a South Korean private think tank.

The North’s 2013 per-capita GDP amounts to a mere 3.6 percent of South Korea’s per-capita GDP of $23,838 for the same year, it said

North Korea’s grain production improved on the back of favorable weather conditions, while the country also expanded its investment in various industrial sectors, the report said.

The communist state’s grain production is estimated to have grown some 5 percent last year from a year earlier. The country saw an 8.5 percent on-year rise and 10 percent gain in its grain production, respectively, in 2011 and 2012.

Also, the reclusive nation increased its budget spending for railroads, metal and power generation sectors, which contributed in boosting its economy, the report showed.

Trade between North Korea and its strongest ally China jumped 10.4 percent on-year to reach $6.5 billion last year, while inter-Korean trade sank 42 percent to $1.1 billion due to a five-month halt of an jointly run industrial park.

The 2013 inter-Korean trade figure is the lowest since 2005 when the comparable figure was $1.06 billion.

The Kaesong Industrial Complex was shut down in early April 2013 after the North unilaterally pulled out all of its workers at 123 South Korean firms. It reopened in September after Pyongyang agreed not to repeat such a suspension.

Assistance from the international community to the North also dropped 47 percent on-year to reach $63.1 million last year, the report said.

Though the story does not cite the article from which the data is drawn, you can download the original report by the Hyundai Research Institute here (PDF in Korean).

Read the full story here:
N. Korea’s per-capita GDP grows 4.8 pct in 2013: report
Yonhap
2014-3-16

NOTE: There is LIKELY a misplaced decimal in this story. Output in Dec. 2013 was worth $35.29 million, compared to $36.42 million a year earlier. Yonhap actually says $352.9 and $364.2 million.

According to Yonhap:

Operations at the inter-Korean industrial complex in the North Korean border city of Kaesong have almost recovered to their level before the park came to a sudden halt early last year, data showed on March 9.

The Kaesong Industrial Complex was shut down in early April 2013 after the North pulled out all of its workers at 123 South Korean firms. It reopened in September after Pyongyang agreed not to repeat such a suspension.

According to the data compiled by Seoul’s Ministry of Unification, the output of the firms in the park totaled US$352.9 million in December, slightly lower than the $364.2 million posted a year earlier.

Around 52,000 North Korean employees worked there as of the end of last year, compared to some 53,000 people in March 2013, the ministry said, adding that all South Korean companies, except one, had normal operations as of last week.

Trade volume between the two Koreas in January also reached some 94 percent of that recorded in the same month a year earlier at $168.87 million, the data showed.

In accordance with the so-called May 24 sanctions South Korea imposed on the North for its sinking of one of its warships in the Yellow Sea in 2010, economic exchanges unrelated to the park are banned.

“We’ve seen some progress in the inter-Korean agreement to strive to boost the park by focusing on the three issues of launching Internet services, simplifying the customs process, and making South Koreans’ access to the park easier,” a ministry official said.

As the last remaining symbol of inter-Korean economic cooperation, the Kaesong complex has served as a major revenue source for the cash-strapped communist country.

Read the full story here:
Inter-Korean factory park recovers to pre-halt level
NORTH KOREA NEWSLETTER NO. 304 (March 13, 2014)
Yonhap
2014-3-13

Institute for Far Eastern Studies (IFES)
2014-3-12

North Korea has been actively working to procure large quantities of fertilizer since the beginning of 2014 in an effort to increase production in the agricultural sector. According to statistics provided by the Korea Rural Economic Institute, North Korea imported 35,113 tons of Chinese fertilizer in January 2014.

In January and February of recent past years, North Korea imported small, insignificant amounts of Chinese fertilizer — for example, a mere two tons in January 2013. This year’s sudden increase comes as an unexpected surprise. January imports of Chinese fertilizer doubled that of imports procured in December 2013, increasing by 17,416 tons. This comes in spite of the fact that total imports of Chinese fertilizer decreased 18 percent from 252,789 tons in 2012 to 207,334 tons in 2013.

In the past, the North Korean pattern has been to import Chinese fertilizer from March and peak during the April-to-July farming season. Import figures show that North Korea has begun to procure its fertilizer earlier than usual, beginning in January and February. This vigorous importing of fertilizer could be directly connected to North Korea’s efforts to increase agricultural production to solve the nation’s chronic food shortages.

In his 2014 New Year’s speech, North Korean leader Kim Jong Un pledged to rebuild the country’s moribund economy, emphasizing the agricultural sector in this endeavor. In his letter to last month’s national conference of subworkteam leaders, he also emphasized the need to boost agricultural production in order to attain self-sufficiency.

Subsequently, it is expected that North Korea will actively scale up imports of Chinese fertilizer again this year in correlation with Chinese export tariff cuts.

Trade between North Korea and China in January has increased roughly 16 percent against the previous year. After the December 2013 purge of Jang Song Thaek it was predicted that trade between the two countries would decrease; however, there is no visible sign of this yet.

According to the Korean Foreign Trade Association’s data, trade between North Korea and China in February increased from 471 million USD to 546 million USD, up 15.9 percent compared to the previous year.

February also showed an increase in anthracite exports, North Korea’s main export to China, rising 21.3 percent to 102 million USD. Iron ore exports also showed a slight increase of 35 million USD compared to last year.

Chinese exports to North Korea, including leading export commodities such as cellular phones and other wireless radio/communication devices, increased 28 percent compared to January of last year, totaling 14.5 million USD. In February, goods exported through China to North Korea increased by 10.2 million USD, a 38.6 percent increase compared to January of last year.

According to the Christian Science Monitor:

The cost of Bona Mugabe’s wedding on March 1, attended by the heads of state of South Africa, Zambia, and Equatorial Guinea at Mugabe’s private home in Harare’s plush Borrowdale suburb, cost $5 million.

Just after the wedding, plans leaked out that Mugabe’s Zanu (PF) government clandestinely signed North Korea, one of its old friends, to build two statues of Mugabe at an estimated cost of $5 million.

The statues were commissioned by the minister of local government, Ignatius Chombo.

One is a nearly 30-foot high bronze image worth $3.5 million to be placed in Harare; the other is a $1.5 million version to be placed in a $3.8 million museum to be built in Mugabe’s rural Zvimba home, in Mashonaland West. Building statues of leaders is something North Korea has considerable experience doing.

Read more about the story at Bloomberg and Bulawayo 24.

I have documented many of North Korea’s Africa projects on this web page.  See here.

Read the full story here:
Mugabe splashes $5m on N. Korea statues
Christian Science Monitor
Mxosili Ncube
2014-3-12

According to Yonhap:

North Korea’s fertilizer imports from China skyrocketed in January from a year earlier, data showed Tuesday, pointing to Pyongyang’s efforts to increase agricultural output.

The North brought in 35,113 tons of Chinese fertilizer in January, a huge increase from 2 tons from a year earlier, according to the data by the Korea Rural Economic Institute (KREI).

Such an amount is unprecedented for January, as the impoverished communist country used to buy a limited amount of fertilizer in winter, according to KREI experts.

The January figure is also two times bigger than the 17,416 tons for December, according to the data.

“Different from its previous pattern of buying fertilizer in spring, North Korea seems to be taking a very proactive move to secure fertilizer a long time ahead of its usual schedule. This means that the North is putting a priority on improving its farm output,” said KREI researcher Kwon Tae-jin.

It is in line with its leader Kim Jong-un’s policy goal of boosting food production, experts said.

In his New Year’s message, the young leader said all efforts “should go for agriculture … in order to build a strong economy and to improve the people’s livelihoods.”

Last year, Pyongyang bought a total of 207,334 tons of fertilizers from China, down by 18 percent from the previous year.

“This year, the trend is expected to be reversed given the January data and the fact that China has lowered duties,” Kwon added.

Read the full story here:
N. Korea’s fertilizer imports from China soar in Jan.
Yonhap
2014-3-4

Institute for Far Eastern Studies (IFES)
2014-3-3

For North Korea, anthracite exports are a major means of foreign currency earnings and the country’s top export item to China. Exports are expected to continue to rise this year.

China’s year-on-year import of anthracite from North Korea increased 39.7 percent (16.49 million tons) from the previous year, accounting for 41.5 percent of the total amount of anthracite import for China (39.66 million tons). North Korea has now surpassed Vietnam as the top exporter of anthracite to China.

Other than natural resources, North Korea has virtually no other major export commodities to offer. The recent standstill in inter-Korean economic cooperation and toughened international sanctions has made it difficult for North Korea to earn foreign currency. Thus, North Korea has pushed for a steady increase in its hard coal exports to China. North Korean anthracite is considered to be of relatively high quality, maintaining a higher unit price (10 USD/ton) than Vietnamese anthracite.

Currently, China’s steel industry is the largest consumer of the North Korean anthracite, with the main consumers being local steel companies in Liaoning, Hebei, and Shandong Provinces, as they are geographically closer to North Korea and have easy access to shipping ports.

The market for North Korean anthracite is expected to expand. Since last year, the Chinese government began to implement wide-ranging air-pollution management measures. As a result, Chinese authorities designated the Hebei Province and the surrounding areas of Beijing and Tianjin municipalities as key areas to improve and control air pollution. With the help of allocated subsidies from the central government, local governments began to distribute hard coal briquettes to homes in farming villages. China’s major anthracite producing areas are in remote mountainous regions. So the demand for North Korean anthracite briquettes is anticipated to increase.

Late last year, the former head of the (North) Korean Workers’ Party Jang Song Thaek was accused, charged and executed for, among other “anti-state activities,” selling the country’s “precious [natural] resources” (presumably to China) at very cheap prices. But his execution does not appear to have made a significant impact on the anthracite trade between the DPRK and China. With China’s growing demand for North Korean anthracite, the export volume is expected to rise.

However, some argue that despite the growing demand North Korea’s coal production capacity is limited and will experience difficulties. Currently, North Korea has already suppressed significantly its domestic demand in order to meet the export volume. North Korea’s mining facilities are said to be old and badly in need of repairs, but large investments from Chinese companies that could be put toward this endeavor are reported to have dried up.

According to Yonhap:

Trade between South and North Korea fell to its lowest level in eight years in 2013 due to their strained relations, data showed Sunday.

Inter-Korean trade reached US$1.15 billion last year, down a whopping 41.9 percent from the previous year’s $1.98 billion, according to the data from the Korea International Trade Association (KITA).

South Korean exports to the North nose-dived 41.1 percent on-year to $531.8 million, with imports from the communist country sinking 42.5 percent to $617.2 million.

The 2013 inter-Korean trade volume was the lowest since 2005, when the figure came to $1.06 billion.

…

In contrast to the plunge in trade with South Korea, the North’s trade with China, its chief ally and largest benefactor, jumped 10.4 percent on-year to a record high of $6.54 billion last year, according to the data.

Between 2009 and 2014, North Korea’s trade volume with China, the world’s second-largest economy, had been growing an annual average of more than 40 percent, the data showed.

According to the Choson Ilbo:

Inter-Korean trade fell to 18 percent of the North’s trade with China, the lowest since 2005.

…

South Korea’s imports of textile goods and electric and electronic products from the North fell 45 percent and 43 percent, while the North’s imports of mineral and textile products from China increased 15 percent and 33 percent.

Of course inter-Korean trade was down due to the DPRK’s closure of the Kaesong Industrial Complex (KIC). Once the complex was reopened, trade began to recover.

More on China-DPRK trade in 2013 here.

Read the full stories here:
Inter-Korean trade hits 8-year low in 2013
Yonhap
2014-2-23

N.Korean Trade with China Grows
Choson Ilbo
2014-2-24

1,516 North Koreans who arrived in South Korea in 2013–approximately the 2012 number. In 2011, 2,706 defected. Why the drop off? Lankov writes in NK News:

From 2010-11, the number of military patrols on the hitherto poorly protected border with China increased dramatically. Military personnel are also frequently rotated to ensure that soldiers do not develop overly cozy relations with the locals, and severe punishments for graft have been introduced.

Additionally, in 2010 Chinese authorities – obviously prompted by the North Koreans – began to build a tall wire fence along the border with North Korea. This fence is not a formidable obstacle, nonetheless it still makes the act of crossing the border more risky. The construction of the fence was completed in 2012, so nowadays the border between two states appears much better protected than ever.

The “defection market” reacted to the new situation in the most certain way. In the past one could cross the border for free or, at worst, would pay the border guards a small bribe of $30-50 (smugglers had to pay a bit more). Now the price increased to the hitherto unthinkable $3,000-5,000 – and one still has to pay an additional $3,000 to a professional guide who will ensure safe transit to a South Korean embassy in Mongolia or Southeast Asia. The steep rise indicates how much more dangerous the defection has become under the new conditions. It also means that that even under the best possible circumstances one needs some $8,000-9,000 to arrange even a simple defection.

In the original article, Lankov also discusses other tactics used to reduce the number of defections.

Read the full story here:
North-South migration, part 4: After 2011, the stream dries out again?
NK News
Andrei Lankov
2014-2-19