North Korean Economy Watch

Pictured above (Google Earth): The towns mentioned in the article below from which the Kaesong Industrial Zone could draw more labor: Pongchon (봉천), Kumchon (금천), and Phyongsan (평산).

Institute for Far Eastern Studies (IFES)
2011-10-20

According to South Korea’s Ministry of Unification (MOU), the “May 24 Sanctions” that went into effect after the sinking of the naval boat Cheonan was relaxed and began to permit the resumption of construction of businesses in the Kaesong Industrial Complex (KIC). In addition, plans to build fire stations and emergency medical facilities in the area are also currently underway.

After South Korean Grand National Party chairman Hong Jun-pyo visited KIC on September 30, 2011, the ROK government has reached the following decisions: 1) to allow the resumption of halted factory constructions; 2) to build a fire station and emergency medical facility; 3) to resume repair work for commuting roads for KIC employees; and 4) to extend the operations of commuter buses.

This means seven companies that received permits in the past to begin construction but stopped after the sanctions went into effect would be able to resume the halted construction projects.

According to the Ministry of Unification, the seven companies include three metal and machinery, three textile, and one electronic factories, taking up a total area of 103,527 square meters. The total site of production facilities of stage 1 businesses in the KIC reaches 2,171,900 square meters, in which the currently operating 123 companies take up 783,471 square meters. With the sanctions lifted, the total area of businesses in operation will reach 885,950 square meters.

In addition, five companies awaiting construction for expansion will have to wait a little longer. The authorities announced to discuss this issue at a later date, looking positively on their construction to resume shortly as well.

Also the MOU announced to push forward with the establishment of fire stations and emergency medical facilities, “to protect the properties and health of businesses and employees of the KIC. The plans to break ground for fire station will begin in mid-November and is expected to be completed by late next year.”

The layout for the KIC fire station was completed in December 2009 and 3.3 billion USD has been budgeted to fund the construction. The station will be constructed on a steel frame on a 3,305 square-meter lot with the total floor space to be around 2,182 square meters.

The Kaesong Management Committee has been operating a “fire/police station” from April 2005. But with occurrences of accidental fires since last winter, it has reinforced the number of fire engines and manpower – currently at a total of eight fire trucks and 36 fire fighters.

Medical facilities in the KIC will also be completed by the end of 2012 once the construction begins early next year. About 3 billion USD is set for this project.

Currently at the KIC, Green Doctor’s Cooperation Hospital is in charge of providing medical and health services in the KIC, with South Korea Green Doctor’s Kaesong Hospital treating the South Korean employees and North Korean Comprehensive Clinic treating the North Korean employees exclusively. The South Korea Green Doctor’s Kaesong Hospital is currently operated by volunteers at a clinic level. The hospital was in the process of improving the facilities to more than ten beds. However, this project was halted after the May 24 sanctions went in effect.

On another note, the MOU also announced that maintenance work for the road connecting Kaesong City to the KIC would begin. The road is normally used by North Korean employees of the KIC. It was also announced that the number and operation of commuter buses would increase to help with the commute. The buses operate in the 20 km radius; the plan is to increase that to 40 km. Since September 2010, the number of buses increased to 400.

There are plans to extend the service to cover the areas of Kumchon, Bongchon, and Pyongsang. However, the roads to these areas are unpaved and extension of transportation services to these areas will require negotiations with the North Korean authorities.

Although these measures will alleviate some of the problems faced by the businesses in the KIC, the MOU still stands firm on its position that North Korea must take responsibility and make formal apology for the Cheonan incident in order for a fundamental resolution of the situation to occur.

UPDATE 4 (2011-10-9): According to Yonhap, only 20 North Korean defectors are working as public servants in South Korea:

Only 20 North Korean defectors work as public servants in South Korea, an opposition lawmaker said Sunday, the latest sign that North Koreans are struggling to join mainstream South Korean society.

The figure represents just a small fraction of the more than 22,000 North Korean defectors in South Korea.

In June, Cho Myung-chul, a former economics professor at the North’s elite Kim Il-sung University, was appointed to lead a government body in charge of educating citizens on unification with North Korea.

Cho is the first North Korean defector to become a senior government official in South Korea.

Nineteen others work in the Unification Ministry, which handles inter-Korean affairs, in the Seoul Metropolitan Government, and in Incheon city, as well as in Gyeonggi Province, which surrounds Seoul, according to Park Joo-sun of the opposition Democratic Party.

Separately, 38 North Korean defectors are temporary workers in the central and local governments under a program aimed at expanding employment of North Korean defectors, Park said, citing the Unification Ministry.

A recent survey showed the unemployment rate of North Korean defectors stood at 9.2 percent, about three times higher than that of other South Koreans.

UPDATE 3 (2011-9-23): Yonhap reports that DPRK student defectors increase 3.5-fold since 2006:

A total of 1,681 elementary, middle and high school students fleeing from the communist country reside here in 2011, up 235.9 percent from 475 in 2006, according to the report by the education ministry and submitted to parliament for a regular audit.

Elementary school students accounted for 60.7 percent of the defector students below college level, followed by high school students with 22.2 percent and middle school students with 17.1 percent, the report showed.

The total number of North Koreans defecting to the South surpassed the 20,000 mark in November last year for the first time, almost double from around 10,200 in 2006, according to the Unification Ministry data.

Meanwhile, the dropout rate of North Korean defectors in schools here has gradually decreased over the past few years, from 10.8 percent in 2007 to 6.1 percent in 2008 to 4.7 percent in 2010, according to the report, a sign that efforts to help support young North Korean defectors paid off.

Reasons for their withdrawal from the regular schooling include adjustment failure, responsibilities for housework and taking a school qualification exam instead of completing high school for entering college, the report showed.

UPDATE 2 (2011-9-19): Yonhap reports that 378 N. Korean defectors under protection of S. Korea’s overseas missions.  According to the report:

“As of the end of July, a total of 378 North Korean defectors are under the protection of overseas missions and the ministry is working with relevant nations and international organizations to swiftly transfer them to South Korea,” the ministry said in a report to the National Assembly.

The number of defectors arriving in South Korea via its diplomatic missions totaled 2,423 last year, 2,927 in 2009, 2,089 in 2008, 2,544 in 2007 and 2,018 in 2006, according to the report.

From January to August this year, 1,797 defectors arrived in the South via the diplomatic missions, it said.

UPDATE 1 (2011-7-4): According to Yonhap:

The number of North Korean defectors to South Korea has exceeded 1,400 [1,428] in the first six months of the year, up 14 percent compared to the same period last year, a government official here said Monday.

The Choson Ilbo also reports on the emigration numbers:

The Unification Ministry on Monday said 52 percent of the 1,428 North Koreans who came to South Korea in the first half of this year took a year or less to complete the journey, significantly more than the 30 percent in 2009 and 39 percent in 2010.

…

After a sudden 19-percent drop last year, the number of North Koreans who come to the South is growing again. It steadily increased until 2009 to hit 2,927. But amid growing unrest, the regime cracked down on defectors and it seems asked China to help. But the Chinese crackdowns simply hastened defectors’ move to South Korea, so the figure skyrocketed again this year and is likely to exceed 3,000 by the end of this year, according to the ministry official.

Meanwhile, 47 percent of the new arrivals in the first half of this year had family members already living in the South, up from 36.4 percent from last year. Those who were accompanied by their families also took up a bigger share with 49 percent, up 10 percent from last year. The official said the reason is that many whole families are escaping as they see no hope in the isolated country and plan to go to South Korea from the start. “It’s not just because of economic hardship,” he added.

There are a total of 21,788 North Korean defectors in the South, of whom 75 percent are between the age of 20 and 49, and 72 percent women.

ORIGINAL POST (2011-6-13): According to KBS:

The number of North Korean defectors who entered South Korea this year numbered around eleven-hundred at the end of May.

This is up 14 percent from the same time last year.

A Unification Ministry official on Monday told reporters that the rise is considered unusual given the North has tightened border security.

Read the full story here:
Seoul says flow of N. Korean defectors likely to continue
Yonhap
2011-7-14

No. of NK Defectors who Enter S.Korea Rises 14%
KBS
2011-6-13

Institute for Far Eastern Studies (IFES)
2011-9-29

This year’s trade volume between China and the DPRK reached an all time high.

According to the (South) Korea Trade Investment Promotion Agency, the trade volume between China and North Korea between January and July of 2011 recorded 3.097 billion USD, surpassing last year’s 3.472 billion USD by 88 percent.

This is the second year since 2008 for the yearly trade volume to continue to break the record of the previous year.

During the same period, China exported 1.783 billion USD and imported 1.314 billion USD to North Korea. Compared to the same period last year, exports increased by 53.3 percent while imports increased by 169.2 percent, and its trade surplus decreased by 30.4 percent.

The main exports of China are oil, diesel freight vehicles, nitrogenous fertilizers, and grains while the top imports were anthracites, steel, and non-alloy pig irons.

The total amount of fertilizer North Korea imported between January and June totaled 193,960 tons (equaling about 39.88 million USD), a hike of 91 percent against last year’s 99,588 tons (25.4 million USD).

The price per ton of imported fertilizers was 188 USD for ammonium sulfate fertilizer (164,456 ton) and 346 USD for urea fertilizers (25,577 ton). Last year, 59,110 tons of ammonium sulfate fertilizer and 45,310 tons of urea fertilizer were imported. A drastically higher amount of ammonium sulfate fertilizer was imported this year compared with the previous year, the cause of which is speculated to be either a radical decrease in the fertilizer production in North Korea or an attempt to improve the country’s food production.

The total amount of grains imported from China from January to June totaled 149,173 tons, a boost of 5.5 percent from the previous year. The price of grain per ton went up from 372 USD to 404 USD, a rise of 8.6 percent. The cost of imported grain increased 14.4 percent against last year, an increase from 52.7 million USD to 63.1 million USD.

The grains imported were corn (38.2 percent), flour (37.5 percent), rice (16.9 percent), and bean (7.2 percent). Compared to last year, corn and flour imports rose while rice and bean slightly decreased. This year’s average price per ton of grain was 661 USD for bean, 538 USD for rice, 395 USD for flour, and 304 USD for corn.

According to Yonhap:

North Korea imported nearly three times as much grain from China in August as last year, an expert said Thursday, an unusual increase that may suggest food shortages in the impoverished nation have worsened.

The North purchased 47,978 tons of corn, flour and rice in August, up from 16,723 tons in the same period of last year, said Kwon Tae-jin, a North Korea expert at the Korea Rural Economic Institute.

“It is unusual that the North increased grain imports sharply in August ahead of the harvest season in fall,” Kwon said. “It is believed that the North increased imports as its grain stock is falling low.”

The North imported 216,535 tons of grain from China in the first eight months, a rise of 20 percent compared to the same period last year.

China is the North’s key ally, economic benefactor and diplomatic supporter.

North Korea suffered devastating floods in recent months that washed away tens of thousands of hectares of farmland, damage that is feared to threaten its already fragile food situation.

The North has relied on international handouts since the late 1990s when it suffered a massive famine that was estimated to have killed 2 million people.

Back in June 2011, Yonhap reported:

North Korea imported more than 50,000 tons of grains from its key ally China in May, an expert said Thursday, amid chronic food shortages in the North.

The North purchased 50,328 tons of corn, flour and rice in May, up 31.5 percent compared to the same period last year, said Kwon Tae-jin, a North Korea expert at the Korea Rural Economic Institute.

The North also imported 114,300 tons of fertilizer from China in the first five months, a rise of 39 percent compared to the same period last year, Kwon said, citing figures from Seoul’s Korea International Trade Association.

China is the North’s last remaining ally, key economic benefactor and diplomatic supporter.

In March, the U.N. food agency appealed for 430,000 tons of food aid to feed 6 million vulnerable North Korean people, a quarter of the country’s population.

Washington sent its delegation to North Korea in May to assess the food situation, though no decision on food aid has been made yet.

The North has relied on international handouts since the late 1990s when it suffered a massive famine that was estimated to have killed 2 million people.

However, the outside aid has dwindled following the North’s missile and nuclear tests and other provocations.

There are basically two conflicting narratives being played out in the media in regards to this kind of news. The first narrative is that heavy seasonal floods and typhoon damage wiped out a large percentage of North Korea’s fall harvest and they are in desperate need of food assistance. The second narrative is that the DPRK is boosting food stocks in advance of 2012, the year the country is supposed to transition into a “Strong and Prosperous Country” (according to official propaganda). Since the DPRK’s appeal for large-scale food aid has gone largely ignored by the international community (despite the best efforts of organizations like the UNWFP and charities like Samaritan’s Purse), the country is forced to increase food stocks through international trade if it wants to live up to the expectations it has created among the domestic population.  Meeting these expectations is especially important right now as they will play an important role in facilitating the leadership  transition to Kim Jong-il’s designated successor, Kim Jong-un.

I have been posting stories about this year’s food shortage here (though neglected for a couple of weeks).

Read the full stories here:
N. Korea’s grain imports from China increase threefold
Yonhap
2011-9-29

N. Korea increases grain imports from China
Yonhap
2011-6-30

According to Yonhap:

North Korea’s trade dependence on China deepened over the past four years, in contrast to a reduction in South Korea’s share in the North’s external trade, Seoul’s Unification Ministry said in a report Sunday.

The proportion of China in North Korea’s foreign trade is on the rise, increasing from 41.6 percent in 2007 to 49.5 percent in 2008, 52.7 percent in 2009 and 57.1 percent last year, the report said.

By contrast, South Korea saw its share of the North’s trade declining from 38.0 percent in 2007 to 33.0 percent in 2009 to 31.4 percent last year, it noted.

In terms of trade volume, too, bilateral trade between North Korea and China jumped from US$1.97 billion in 2007 to $2.68 billion in 2009 and $3.47 billion in 2010, the report said, adding the inter-Korean trade volume slightly increased from $1.8 billion in 2007 to $1.91 billion last year.

I looked on the Ministry of Unification’s web page, but I was unable to find the report mentioned above.  It  has obviously not been published in English.

As this information was released in South Korea, the DPRK’s premier, Choe Yong-rim, is in China.  According to the Korea Times:

The North’s Premier Choe Yong-rim and his Chinese counterpart Wen Jiabao “pledged to promote trade, investment and economic cooperation” between the nations during a meeting held on Monday night during Choe’s official visit to China, Xinhua news agency said.

“Under the context of the complicated regional and international situation, the parties, governments and peoples of China and the DPRK (North Korea)…made joint efforts to push forward bilateral ties,” Xinhua quoted Wen as telling Choe during the talks.

Wen hailed the North’s achievements in developing its economy and vowed that Beijing will continue to offer assistance within its capability, according to the report.

He then called on the two sides to speed up mutually beneficial cooperation in fields such as trade, investment, infrastructure, natural resources and agriculture, the report said.

Here is the Xinhua report.

Scott Snyder had some interesting comments on the DPRK-PRC trade relationship:

South Korea’s perceived failure to compete with China for economic influence in the North as a result of heightened tensions in inter-Korean relations remains an active subject of frustration in South Korea, especially among progressives, but North Korea’s continued pursuit of nuclear and missile tests and other tension-raising provocations against the South make it clear that China has been unable to use the North’s economic dependency on Beijing as a tool for imposing political restraint on Pyongyang.

Read the full stories here:
N. Korea deepens trade dependence on China
Yonhap
2011-9-25

Premiers of NK, China vow to boost economic cooperation
Korea Times
2011-9-27

Pictured above (Google Earth): Hyesan Youth Copper Mine.  See in Google Maps here.

According to Xinhua (China):

Hyesan-China Joint Venture Mineral Company, a large joint project between China and the Democratic People’s Republic of Korea (DPRK), started operation at Hyesan of Ryanggang province on Monday.

The mineral company was jointly set up by Wanxiang Resources Limited Company of China and the Ministry of Mining Industries of the DPRK on Nov. 1, 2007. Its main business was to produce and sell copper.

DPRK Mining Industries Minister Kang Min Chol and Chinese ambassador Liu Hongcai attended the opening ceremony.

Kim Chol, chairman of the people’s committee of the Ryanggang province, said at the ceremony that the joint venture was one of the symbols of the development of the DPRK-China friendship and would be a model of modernization, science and economic benefits.

Liu believed the company would make profits for both sides, benefit the two peoples and promote traditional China-DPRK friendship.

According to Reuters:

The mine was located a few miles from the Chinese city of Changbai in the northeastern province of Jilin and was 51 percent owned by Wanxiang, a source with direct knowledge of the project told Reuters on Tuesday.

The mine had a designed annual capacity of 50,000-70,000 tonnes of copper concentrate, expected to contain 20-30 percent copper, he added.

“All the concentrate will be sold to China,” the source said.

The source said the joint venture would conduct second-phase construction to expand the capacity of the mine if production ran smoothly, but did not give details on timing or expanded capacity.

China is the world’s top copper consumer but does not produce sufficient concentrate to meet demand. The country imported 3.4 million tonnes of copper concentrate in the first seven months of 2011, down 11 percent from a year earlier.

According to KCNA:

The Hyesan Youth Mine in Ryanggang Province was successfully updated as required by the new century.

The workers and technicians of the mine together with Chinese technicians and skilled workers completed the vast modernization project and successively ensured their commissioning.

The modernization of various production processes including mining, carriage and ore dressing made it possible to boost mineral production and thus contribute to economic development and the improvement of the standard of people’s living.

A ceremony for the completion of the modernization project at the Hyesan Youth Mine and the Hyesan-China Joint Venture Mineral Company was held on Monday.

Present there were Kang Min Chol, minister of Mining Industry, Kim Hi Thaek and officials concerned, Liu Hongcai, Chinese ambassador to the DPRK, and staff members of his embassy and Han Youhong, president of the Wanxiang Resources Co., Ltd. of China, and personages concerned.

Ri Mun Yong, manager of the Ryanggang Provincial Mining Complex, made an address to be followed by congratulatory and other speeches.

At the end of the ceremony, the participants went round production processes.

That day a reception was given in connection with the ceremony.

Although foreign investors and aid groups frequently build/ repair / upgrade North Korea’s state owned enterprises, it is rare that they are given any credit for their work in the official media.

Previous posts about the Hyesan Mine:
1. Poor electricity supply (2011-5-16)

3. Mine is flooded (2007-11-1)

4. China investing in mine (2007-4-12)

5. Chinese investing in mine (2006-12-24)

Additional mining information:
1. DPRK – China minerals for food program (2011-8-19)

2. DPRK looking to export rare earths (2011-7-23)

3. DPRK – China trade: 1995 – 2009 (2011-6-7)

4. Increase in DPRK’s mineral resources exports to China expected again for this year (2011-2-28)

5. DPRK – China mining deal (2011-2-6)

6. China expanding mining rights in DPRK (2010-1-15)

Pictured above in Wonsan: Possibly a new yacht (see more here)

According to the Choson Ilbo:

The North Korean regime has spent US$1.04 billion since 2008 importing luxury goods in contravention of UN Security Council resolutions.

According to data Grand National Party lawmaker Yoon Sang-hyun obtained from the Foreign Ministry and other government agencies, the regime imported luxury goods worth $272.14 million in 2008, $322.53 million in 2009, and $446.17 million in 2010.

TVs, digital cameras, and video recorders made up the largest proportion, jumping from $115.47 million in 2008 to $215.95 million in 2010.

Luxury cars and parts came second and movie equipment such as film cameras and projectors third.

UN Security Council resolutions 1718 and 1874 ban exports of luxury goods and weapons of mass destruction to the North.

The amount the regime spent buying luxury goods was about 10 times the total humanitarian aid of $107.29 million it received from South Korea and the international community over the same period.

Read the full story here.

Additional information:
1. Back in July, there were several estimates of DPRK luxury goods imports based on Chinese data.

2. The DPRK maintains appx 200-300 foreign trade companies.

3. Office 38 is reportedly responsible for engaging in trade deals.

4. On the life of an overseas North Korean trade agent.

5. Here is an American Hummer parked at the Yangakdo Hotel.

UPDATE 9 (2011-9-6): South Korea is slated to deliver flood relief assistance next week.  According to Yonhap:

South Korea’s Red Cross said Tuesday it will send baby food to North Korea across their heavily fortified border next week as its first batch of its emergency aid to North Korea’s flood victims.

The move came a month after Seoul offered to send 5 billion won (US$4.7 million) worth of emergency relief aid, including baby food, biscuits and instant noodles, to North Korea.

South Korea’s Red Cross said in a message to its North Korean counterpart on Tuesday that it will truck 200,000 packs of baby food in the eastern and western sections of the border next Thursday.

The Red Cross said it will send other relief items by the middle of October and it proposed holding consultations with North Korea to ensure Seoul’s aid to North Korea reaches the intended beneficiaries.

…

Last year, Seoul sent 5,000 tons of rice, 3 million packs of instant noodles and 3,000 tons of cement to North Korea to help it recover from devastating floods.

UPDATE 8 (2011-9-4): The US Government has send flood relief supplies to the DPRK. According to CBS News:

State Department spokeswoman Victoria Nuland says the plane is carrying blankets, soap and hygiene kits. It will arrive in Pyongyang this weekend.

The U.S. has said it will provide North Korea $900,000 in emergency aid through U.S. charities.

On September 4th, KCNA posted video of the plane arriving.  See it here (if you are allowed).

Samaritan’s Purse also posted two videos of their departure to and arrival in Pyongyang.

According to the Associated Press:

Samaritan’s Purse said it has pledged $1.2 million in addition to the $900,000 that the U.S. government has allocated for aid to North Korea through U.S.-based charities.

Ken Isaacs, a Samaritan’s Purse vice president, said the group has worked with the U.S. government and several other Christian organizations to send the aid as they try to “continue gaining humanitarian access into North Korea.”

Here is a list of US-DPRK engagement in 2011.

At least one report from Rason seems to indicate that the DPRK’s impending food shortage is not so severe of a problem.

UPDATE 7 (2011-8-23): United Grain Sends First Wheat Shipment to North Korea as Aid. According to the San Francisco Gate:

United Grain Co., Russia’s state grain trader, sent its first shipment of 3,560 metric tons of milling wheat to North Korea as humanitarian aid, the company said in an e-mailed statement today.

The ship arrived at the North Korean port of Hynnam, from Russia’s Vladivostok port on Aug. 20, the company said. It was the first of several shipments.

United Grain will send 50,000 tons of wheat from ports in Vladivostok and Novorossiysk to North Korea, the statement said.

UPDATE 6 (2011-8-22): According to this article in The Telegraph, the North Korean Red Cross has launched a £2.7m emergency appeal to help the victims of a series of floods and storms.  More information can be found here and here.

UPDATE 5 (2011-8-19): The IFRC has posted a map of the counties in which they are involved in flood relief.  See it here. The IFRC has also posted an emergency appeal for assistance.  You can see it here.

UPDATE 4 (2011-8-18): US to provide $900,000 in emergency relief supplies to North Korea after devastating floods. Read more at the AP (Via Washington Post) and Reuters.  Here is a collection of stories related to the DPRK’s alleged food shortage this year.  Here is a list of DPRK-US engagement events this year.

UPDATE 3 (2011-8-10): ROK lists food items it will donate to the DPRK in the wake of flooding. According to the Daily NK:

The South Korean government today transmitted to the North a list of the aid items it will deliver in response to recent flooding.

A spokesperson for the Ministry of Unification reported the news this afternoon, saying, “We transmitted a communication containing a concrete list of aid items to the North this afternoon in the name of the president of the Korea National Red Cross.”

The aid includes; 1.4 million units of high protein food, 300,000 units of snacks, 1.92 million Choco Pies and 1.6 million units of instant noodles, but, as previously reported, does not include rice, wheat flour or building materials.

The aid is expected to be conveyed overland along the west and east coasts to areas of Hwanghae and Gangwon Provinces.

“We excluded North Korea’s requested food and cement, but with the exception of medicines the emergency aid was modified mostly as per the North’s request,” the spokesperson explained.

UPDATE 2 (2011-8-10): ROK offers to send relief items to flood-hit DPRK.  According to Yonhap:

South Korea sent North Korea a list of relief items it is willing to deliver to flood victims in the impoverished nation, an official said Wednesday.

The South’s Red Cross delivered the message to the North earlier Wednesday, offering 5 billion won (US$4.6 million) worth of emergency staples including nutritional foods for infants, biscuits and instant noodles, according to the official from the Unification Ministry.

UPDATE 1 (2011-8-9): EU provides resources for flood victims. According to the Korea Herald:

The EU, which shipped food aid to the impoverished state to feed its starving people last month, has donated 200,000 euros ($280,000) to the International Federation of Red Cross in flood aid, Voice of America reported, quoting an EU official.

ORIGINAL POST (2011-8-9): Relief Web has put together a compendium of stories and reports (DPRK, ROK, IFRC, and UN) related to recent flood damage in the DPRK (July and August). Below are links and descriptions:

Briefing kit 1: Situation reports (PDF) on the flooding:

1. DPRK affected by serious floods following torrential rains in July
2. GIEWS Country Brief: Democratic People’s Republic of Korea 08-August-2011
3. Democratic People’s Republic of Korea: Floods DREF operation n° MDRKP003
4. Heavy Rain Damage: Situation Report #2
5. Floods: Situation Report #1

Briefing kit 2: This report (PDF) is an update of the August 7 collection and features media clippings and situation reports:

1. Democratic People’s Republic of Korea – Flood Update
2. Russia to Send 50,000 Tons of Food Aid to N.Korea
3. DPRK affected by serious floods following torrential rains in July
4. GIEWS Country Brief: Democratic People’s Republic of Korea 08-August-2011
5. Flood Damage Gets Serious
6. Seoul Greenlights Food Aid for N.Korea, But Not Rice, Cement
7. Nationwide Relief Effort Launched for S. Hwanghae Province
8. Downpour Batters DPRK Again
9. Damage from Heavy Rains
10. Red Cross Relief Activities Launched in DPRK
11. S. Korea offers N. Korea flood aid
12. Floods (as of 29 Jul 2011)
13. Democratic People’s Republic of Korea: Floods DREF operation n° MDRKP003
14. N. Korea PM inspects flooded region: state media
15. N. Korea storm, rains ‘kill dozens’: state media16. N. Korea state media says China to send flood aid
17. Rain leaves trail of destruction in North Korea
18. Floods wash N. Korean landmines into S. Korea
19. DPRK Hit by Heavy Rain Again
20. S.Koreans on landmine alert after deadly mudslides
21. Floods – July 2011
22. Heavy Rain Damage: Situation Report #2
23. Floods: Situation Report #1
24. Coal Mines Damaged by Heavy Rain
25. Floods Hammer Homes And Fields
26. Heavy Rains Hit DPRK
27. DPRK Hit by Heavy Rainfalls Again
28. Some Areas of DPRK Hit by Heavy Rain

According to the Choson Ilbo:

According to the Unification Ministry, 123 firms were operating in the industrial park as of July, with combined production output amounting to US$34.87 million in May, up 25 percent from $27.79 million year-on-year.

The total volume of inter-Korean trade through the industrial park reached $825.88 million in the first half of this year, up 19.5 percent from last year and a whopping 135.8 percent from 2009.

South Korean staff dwindled from 1,461 in 2008, when inter-Korean trade was at its height, to 801 in May this year, but the number of North Korean workers rose from 36,650 to 47,172. And some 3,700 more North Korean workers were hired even since May last year when the South banned new investments there after the North sank the Navy corvette Cheonon in March.

At the moment, the regime is unlikely to shut down the industrial park, since nearly 50,000 North Koreans are working there. But experts stress that the government should take the seizure of the properties in the resort as a warning and be prepared for anything that the regime could do.

“There’s nothing we can be sure of in inter-Korean relations,” said Dong Yong-seung, a researcher at the Samsung Economic Research Institute. “Risk factors always exist because the government launched the Kaesong project without providing any safety net to protect its people and properties, as in the case of the Mt. Kumgang tour project.”

South Korean investments in the industrial park amount to W920 billion (US$1=W1,079) — W540 billion invested by the 123 firms, and W380 billion from the government and public corporations to lay the infrastructure, including electricity and communications facilities, and landscaping.

If the regime shuts down the industrial park, the South would suffer double the losses it incurred from the regime’s seizure of the properties in Mt. Kumgang, which are worth W484.1 billion.

Read the full story here:
Kaesong Firms Worry as N.Korea Seizes Mt. Kumgang Assets
Choson Ilbo
2011-8-24

Pictured above (Google Earth): The Musan Mine, the DPRK’s largest.  See in Google Maps here.

According to the JoongAng Daily:

During his surprise May visit to China, North Korean leader Kim Jong-il secured free fertilizer and discounted food to help alleviate the impoverished country’s chronic food shortages.

A source in Beijing who monitors North Korea-China relations told the JoongAng Ilbo on Monday that Chinese officials agreed to provide 200,000 tons of fertilizer free of charge as well as 500,000 tons of corn at a discount in exchange for rights to North Korea’s abundant natural resources.

“When 200,000 tons of fertilizer is planted on North Korean soil, it can bring about a three-fold increase in the harvest,” the source said. “This can be the equivalent of giving 600,000 tons of food.”

The source added that China agreed to sell the 500,000 tons of corn for half of the international rate, which would be $30 per ton.

The corn, the source said, had already crossed the border into North Korea from northeastern China.

In exchange, Kim will allow China access to his country’s natural resources.

“The two parties agreed to participate in the extraction of buried rare earth minerals in Musan in Hamgyong Province,” the source said. “It’s quite a profit for China as it is thirsty for materials.”

North Korea is estimated to have around 20 million tons of rare earth minerals, which are vital in the production of high-tech goods.

The Beijing-based source said the agreement gives China the responsibility for the cost of building roads to transport the natural resources as well as lending equipment.

In exchange, North Korea will hand over 50 percent of the extracted rare earth minerals free of charge to China, with the rest to be sold to China at international market rates.

Meanwhile, other sources said that Kim also received a health checkup during his stay in China.

“When Kim Jong-il was visiting Yangzhou, he received a special examination from an oriental medicine doctor that the highest Chinese elite have gone to over the years,” a source familiar with North Korean issues said

The source added: “Kim Jong-il has never trusted China’s Western medicine. I heard from a Chinese official that Kim received an oriental medicine diagnosis by taking his pulse and that it did not involve drawing blood.”

Additional Information:

1. Here is a post linking to all the major DPRK food stories this year.

2. The media has reported on other DPRK food barter deals with Cambodia and Myanmar.

3. The role of the Musan Mine in DPRK-PRC relations has been quite interesting.  Here are previous posts on the mine.

Read the full story here:
North got fertilizer on Kim’s trip to China
JoongAng Daily
Chang Se-jeong
2011-8-19