North Korean Economy Watch

Item 1: Koryo Credit Development Bank. This bank is located in the Yangakdo Hotel and is accessible to foreign visitors.  Here are the marketing materials they provide to “encourage” foreigners to set up hard currency accounts: Folder (PDF), Inserts (PDF).

Item 2: DPRK Customs Form (PDF)

Item 3: The Ryugyong Hotel is looking more like a spaceship (Source here. Date: 12/2009)

Click for larger version

Too bad it will never take off

Item 4: DPRK Transportation. Last September I linked to a collection of vehicles manufactured in the DPRK.  See them here.  This month Kernbeisser posted a great collection of photos he has taken of vehicles on the DPRK’s roads.  Seem them here. 

UPDATE:  China plans development zone on North Korean border
By Michael Rank

China is planning a major new development zone along the North Korean border aimed at boosting trade with its reclusive neighbour and throughout northeast Asia, a Chinese-language website reports.

The plan is to come to fruition under two separate deals: the border cities of Dandong in Liaoning province and Tonghua in Jilin province have signed an (unpriced) “development and opening up vanguard zone cooperation agreement” as well as a 440 million yuan ($64 million) “six-party cooperation agreement” with the Shenyang Railway Bureau, Changchun Customs, Dandong Port Group and Tonghua Steel (Tonggang) to build a “Tonghua inland port” with a duty-free zone, warehouses and international transit facilities that will be ready in 2012.

The Tonghua-Dandong Economic Zone will apparently stretch over most of the western half of the Chinese-North Korean border, a distance of around 350 km. The city of Tonghua is in fact some 80 km north of the border, but the report says the new zone will include the border post of Ji’an which is administered by Tonghua.

It gives few further details, but notes that when Premier Wen Jiabao visited North Korea last month he signed an agreement on building a new bridge across the Yalu river which would further boost Chinese-North Korean trade.

It also quotes the acting mayor of Tonghua, Tian Yulin, as saying that the new zone will transform the city from “inland” to “coastal” and “will promote trade between the inland cities of the northeast and North Korea and with the whole of northeast Asia.” The report adds that almost 60% of China’s trade with North Korea passes through Dandong.

This is not the only new development zone in China’s rustbelt northeast, which has been in severe economic decline in recent decades: a separate Chinese report announces the creation of another zone in Jilin, stretching from the capital Changchun in the centre of the province to the city of Jilin (or rather just part of it, for some unstated reason) as far as Yanbian on the North Korean border. This report does not mention North Korea directly but says the new zone will make the eastern border city of Hunchun an “open window” for regional trade, with Changchun and Jilin city “important supports.”

One-third of Jilin’s 26 million population live in the zone and it accounts for half of the province’s economic output, the report adds. See also this English-language report.

State-owned Tonghua Steel’s involvement in the Tonghua-Dandong zone is somewhat surprising as the ailing company has been rocked by unrest following an abortive attempt at a takeover deal by rival company Jianlong earlier this year. There was strong opposition to the deal on the part of workers who feared they would lose their jobs, and their fears turned to violence last July when a senior manager was murdered in mysterious circumstances.

The Chinese business magazine Caijing told how “the man’s death at the hands of unidentified killers uncovered an often antagonistic network of competing business interests and investors involved in Jianlong’s botched attempt to buy Tonggang.”

Tonghua Steel was in 2005 planning to sign a 7 billion yuan ($865 million), 50-year exploration rights deal with a North Korean iron ore mine, said to be the country’s largest iron deposit. The Chinese company was hoping to receive 10 million tonnes of iron ore a year from the Musan mine as part of its plans to increase steel production from a projected 5.5 million tonnes in 2007 to 10 million tonnes in 2010.

Tonggang boss An Fengcheng said at the time that agreement had already been reached with China Development Bank on 800 million yuan worth of soft loans and 1.6 billion yuan of hard loans, while “the remaining investment will come in in stages”. But it seems that the deal was never signed.

Caijing told how An, the steel mill’s chairman and Communist Party secretary, had “basically unlimited managerial control of Tonggang” and that the takeover by Jianlong was cancelled just a few hours after the murder of the manager Chen Guojin, who had come from Jianlong and was one of two Jianlong representatives on the board of Tonghua.

“There is no evidence to suggest An’s involvement in Chen’s death. But two weeks after the incident, he was sacked and stripped of all power by the Jilin provincial government. No other details of his removal were announced,” the magazine added.

ORIGINAL POST: According to the P.R. of China’s Global Times (Xinhua) via Adam Cathcart:

The Chinese government has approved a border development zone in the Tumen River Delta to boost cross-border cooperation in the Northeast Asian region, the provincial government of Jilin announced on Monday.The information office of the government said the pilot zone covering 73,000 square kilometers involved the cities of Changchun and Jilin as well as the Tumen River area.

Han Changbin, governor of Jilin, said the Changchun-Jilin-Tumen pilot zone was China’s first border development zone.

It is expected to push forward cross-border cooperation in the Tumen River Delta.

The delta, a 516-kilometer-long river straddling the borders of China, Russia and North Korea, was set up as an economic development zone in 1991 by the United Nations Development Program (UNDP) to promote trade.

In 1995, five countries – China, Russia, North Korea, South Korea and Mongolia – ratified the agreement on the Establishment of the Cooperation Commission for the Tumen River Economic Development Area (web page here). Japan participated in the program as an observer.

In 2005, the five signatories agreed to extend the agreement for another 10 years.

They also agreed to expand the area to the Greater Tumen Region and to further strengthen cooperation for economic growth and sustainable development for the peoples of Northeast Asia.

“Before the Changchun-Jilin-Tumen pilot zone was initiated, the Chinese part of the Tumen River area was mainly Huichun, a port city in Jilin, that has involved in the cross-border cooperation,” said Zhu Xianping, director of the Northeast Asia Research Institute of Jilin University in Changchun.

The 5,145-square-kilometer port city with a 250,000 population had limited industrial development capacity to develop infrastructure projects that will match the cross-border cooperation, he said.

Du Ying, deputy director of the National Development and Reform Commission, said that by bringing the two cities of Changchun and Jilin into the border zone, the zone could serve as a strategic platform to support the cross-border cooperation in the Greater Tumen Region.

Zhao Zhenqi, an assistant to the Jilin governor, said the central government has allowed the pilot zone to try new land use and foreign financing methods, such as sharing ports and sea routes with other countries in the region and setting up free trade zones.

Under the initiative of the pilot zone, local governments in the region could better interact to tackle development bottlenecks, he said.

The Northeast China region, rich in natural resources including coal and oil, is China’s traditional heavy industry base and granary. However, it also faces the challenges of industrial upgrading, resource depletion and financing bottlenecks.

Random thoughts and links:
1. The challenge facing north east China (as they see it) is the lack of a port city on the East Sea (or the Sea of Japan if you prefer).  This is where North Korea comes in.  China and Russia have long been trying to establish  use rights and/or control of Rason and Chongjin.  Russia recently built a “Russia-gague” railroad line from Rason to the DPRK-Russian border. The Chinese have been busy building roads.

2. (speculation) China is the DPRK’s largest trading partner.  International sanctions have given China monopsony power vis-a-vis the DPRK.  This means the Yuan goes farther in the DPRK than in other countries and it gives the PRC a financial incentive in the continued economic isolation of the DPRK.

3. Here is CCTV video.

4. Forbes covers this story here.

(h/t DPRK Studies) Erik van Ingen Schenau of the China Motor Vehicle Documentation Centre has posted a collection of photos of vehicles manufactured in North Korea.  Check them all out here.

Other links:
1. Background on Sungri Motors here.  This is the location of the Sungri Motor Plant.

2. Some background on Pyonghwa Motors here.  This is the location of the Pyonghwa Motors plant.

3.  I am not sure of the location of Pyongyang Auto Works or the Kamaz (Russian company) factory in Pyongsong.

(click for larger version)

Traffic Control Platform beneath Umbrella Installed at Intersections of Pyongyang

Pyongyang, August 13 (KCNA) — Unique platforms under umbrellas are being set up in traffic control posts at intersections of Pyongyang these days, attracting attention of people.

The round platform under well-shaped large umbrella is clearly seen at far distance.

The umbrella shields the traffic controllers from sunrays and rain and the platform shuts out heat from the heated asphalt.

The female traffic controllers are commanding the traffic with a bright face on the platform under the umbrella even in the hottest period of summer.

Passers-by stop walking for a while to see the new scene.

They say it can be seen only in the country led by Kim Jong Il.

The traffic controllers are moved by the warm affection shown for them by General Secretary Kim Jong Il who saw to it that the platforms with umbrellas are being set up this time after raincoats, rain boots, sunglasses, gloves and cosmetics as well as seasonal uniforms were provided to them.

UPDATE: MarkT seems to have discovered similar technology (though much older) in Afghanistan:

Image from Military Photos

According to Yonhap:

North Korea’s sole home-grown automaker seeks to expand its annual production capacity to 10,000 units by 2012, a level not reached since its peak in the 1970s, a pro-Pyongyang paper said Tuesday.

The Sungri Motor Complex, which started production in 1958, has gone downhill as the country suffered economic downturns and severe famine in the decades following the 1970s.

The Choson Sinbo, a Tokyo-based newspaper that relays Pyongyang’s position to the outside world, said the automaker is aspiring to return to its record production capacity by 2012, the target year for the country to become a “strong, prosperous and powerful nation.”

“As production decreased from the 70s, the workforce of the motor company fell to 75 percent of the peak years,” the paper said.

“During economic hardships in the late 90s, the company was close to not breathing. But now, anyone active in production is talking about the ‘promised revival,'” it said.

The paper noted North Korean leader Kim Jong-il’s trip in March to the complex, located at the foot of Mt. Sungni in South Phyongan Province, during which he stressed that the “modernization and scientification of the complex” is the most important factor in increasing output.

Kim then “guaranteed” state support to introduce computer numerical control machines to the complex, it said.

The automaker started producing hundreds of trucks named “Sungri 58-type,” “Sungri 61-type” or “Jaju (independence) 64-type” in late April, but output is “still in their early stage,” the paper said.

North Korea seeks to build a “strong, prosperous and powerful nation” by 2012, the centenary of the birth year of Kim Il-sung, the nation’s founder and father of North Korea’s current leader, Kim Jong-il, who will turn 70 that year.

Read the full story here:
N. Korean automaker aims to return to peak production by 2012
Yonhap
Kim Hyun
7/14/2009

Other links:
1. Background on Sungri Motors here.

2. I believe this is the location of the Sungri Motor Plant.  If anyone has evidence to the contrary, please let me know.

3. Read about another DPRK auto manufacturing plant here.

A valued reader points out this gem by Kernbeisser:

The above road sign is supposed to remind drivers not to overtake those ahead of them.  A powerful lesson the leadership would prefer to instill in all officials–not just those with cars.

You can see this rabbit yourself if you visit this summer! How about that for an incentive?

Here are more great photos by fellow traveler Nayan Sthankiya including one featuring yours truly.

North Korea Uncovered version 18 is available.  This Google Earth overlay maps North Korea’s agriculture, aviation, cultural locations, markets, manufacturing facilities, railroad, energy infrastructure, politics, sports venues, military establishments, religious facilities, leisure destinations, and national parks.

This project has now been downloaded over 140,000 times since launching in April 2007 and received much media attention last month following a Wall Street Journal article highlighting the work.

Note: Kimchaek City is now in high resolution for the first time.  Information on this city is pretty scarce.  Contributions welcome.

Additions to this version include: New image overlays in Nampo (infrastructure update), Haeju (infrastructure update, apricot trees), Kanggye (infrastructure update, wood processing factory), Kimchaek (infrastructure update). Also, river dredges (h/t Christopher Del Riesgo), the Handure Plain, Musudan update, Nuclear Test Site revamp (h/t Ogle Earth), The International School of Berne (Kim Jong un school), Ongjin Shallow Sea Farms, Monument to  “Horizon of the Handure Plain”, Unhung Youth Power Station, Hwangnyong Fortress Wall, Kim Ung so House, Tomb of Kim Ung so, Chungnyol Shrine, Onchon Public Library, Onchon Public bathhouse, Anbyon Youth Power Stations.

(h/t Michael Rank) The Guardian published this image yesterday:

Click on image for full size

North Korea Uncovered v.16
Download it here

The most recent version of North Korea Uncovered (North Korea Google Earth) has been published.  Since being launched, this project has been continuously expanded and to date has been downloaded over 32,000 times.

Pictured to the left is a statue of Laurent Kabila of the Democratic Republic of Congo.  This statue, as well as many others identified in this version of the project, was built by the North Koreans. According to a visitor:

From the neck down, the Kabila monument looks strangely like Kim Jong Il: baggy uniform, creased pants, the raised arm, a little book in his left hand. From the neck up, the statue is the thick, grim bald mug of Laurent Kabila (his son Joseph is the current president). “The body was made in North Korea,” explains my driver Felix. In other words, the body is Kim Jong Il’s, but with a fat, scowling Kabila head simply welded on.

This is particularly interesting because there are no known pictures of a Kim Jong il statue.  The only KJI statue that is reported to exist is in front of the National Security Agency in Pyongyang.  If a Kim Jong il statue does in fact exist, it might look something like this.

Thanks again to the anonymous contributors, readers, and fans of this project for your helpful advice and location information. This project would not be successful without your contributions.

Version 16 contains the following additions: Rakwon Machine Complex, Sinuiju Cosmetics Factory, Manpo Restaurant, Worker’s Party No. 3 Building (including Central Committee and Guidance Dept.), Pukchang Aluminum Factory, Pusan-ri Aluminum Factory, Pukchung Machine Complex, Mirim Block Factory, Pyongyang General Textile Factory, Chonnae Cement Factory, Pyongsu Rx Joint Venture, Tongbong Cooperative Farm, Chusang Cooperative Farm, Hoeryong Essential Foodstuff Factory, Kim Ki-song Hoeryong First Middle School , Mirim War University, electricity grid expansion, Tonghae Satellite Launching Ground (TSLG)” is also known as the “Musudan-ri Launching Station,” rebuilt electricity grid, Kumchang-ri suspected underground nuclear site, Wangjaesan Grand Monument, Phothae Revolutionary Site, Naedong Revolutionary Site, Kunja Revolutionary Site, Junggang Revolutionary Site, Phophyong Revolutionary Site, Samdung Revolutionary Site, Phyongsan Granite Mine, Songjin Iron and Steel Complex (Kimchaek), Swedish, German and British embassy building, Taehongdan Potato Processing Factory, Pyongyang Muyseum of Film and Theatrical Arts, Overseas Monuments built by DPRK: Rice Museum (Muzium Padi) in Malaysia, Statue de Patrice Lumumba (Kinshasa, DR Congo), National Heroes Acre (Windhoek, Namibia), Derg Monument (Addis Ababa, Ethiopia), National Heroes Acre (Harare, Zimbabwe), New State House (Windhoek, Namibia), Three Dikgosi (Chiefs) Monument (Gaborone, Botswana), 1st of May Square Statue of Agostinho Neto (Luanda, Angola), Momunment Heroinas Angolas (Luanda, Angola), Monument to the Martyrs of Kifangondo Battle (Luanda, Angola), Place de l’étoile rouge, (Porto Novo, Benin), Statue of King Béhanzin (Abomey, Benin), Monument to the African Renaissance (Dakar, Senegal), Monument to Laurent Kabila [pictured above] (Kinshasa, DR Congo).

Radio Free Asia
Jung Young
3/10/2009

See also: Daily NK 2007, NK goes after busses

Authorities in North Korea have begun enforcing a ban on the use of foreign cars in the isolated Stalinist state, putting further pressure on a population already struggling to survive.

Beginning in early February, Pyongyang’s National Defense Commission began enforcing a directive banning imported cars and ordered a crackdown.

According to a cross-border Chinese merchant, those targeted by the crackdown are primarily officials who take bribes to fraudulently register cars to state-owned enterprises or military bases.

Authorities also want to stop North Korean mechanics from rebuilding and modifying imported cars by changing them from right-hand-drive Japanese vehicles—the Japanese drive on the left—to left-hand-drive vehicles for use on North Korean roads.

“The National Defense Commission regards failure to enforce its directive banning imported cars as a provocative act,” said the Chinese merchant, who is a frequent traveler to North Korea.

“Various officials have been instructed to let go of the imported used cars, and many of those who failed to comply with that directive are in trouble now. In particular, officials working for the Forestry Department appear to have been reprimanded,” he added.
Deadlines expire
In February 2007, the National Defense Commission issued a nationwide directive to eliminate imported cars.

Foreign passenger cars were to be removed within three months, while foreign freight vehicles were to be phased out within two years.

National Defense Commission officials were clamping down in particular on right-hand-drive used cars imported from Japan, ordering that they all be scrapped.

Sources said this could be because supreme leader Kim Jong Il dislikes the sight of Japanese cars, most of which are smuggled into the country and given fake military license plates, on North Korean roads.

But they also note that the North Korean military is experiencing shortages both of fuel and of the hard currency needed to buy it.

One expert suggested that the National Defense Commission may want to prevent imported cars from burning the fuel that keeps military vehicles on the road.
Conversion of used cars
The order to scrap right-hand-drive Japanese cars prompted a rush by the owners of imported cars to convert their vehicles to left-hand drive, a complicated and expensive process.

In Songpyong, a district of Chungjin city in Northern Hamgyong province, mechanics at the Soosong Tractor Plant and bus factories are switching steering wheels from right to left, sources said.

Owners of the modified cars then have them registered to military bases or factories that are authorized to operate the cars, paying their officials about 300,000 North Korean won (U.S. $100) monthly for the favor.

But even converted vehicles are no longer slipping through the net, North Korean car owners say.

“We’re pretty much done for,” one such car owner said. “From here on, the only vehicles allowed on the roads of North Korea are military vehicles.”

“Life is already very hard, but if our cars are taken away and scrapped, the situation will be terrible, and our very survival in jeopardy,” the car owner said.

Currently, Japanese cars make up around 80 percent of imported vehicles in North Korea.