North Korean Economy Watch

Andray Abrahamin and John Kim worte a comprehensive summary of the current state of Rason. The article appears in The Diplomat:

In 1991, the North Korean government dubbed Rajin-Sonbong (Rason) a free trade zone to attract foreign capital. However, less than a decade later, the zone lost its free trade status. According to local businessmen, the party secretary of Rason, a relative of the late Kim Jong-il himself, was charged with corruption and eventually executed, a harbinger for the long period of isolation ahead. Since the end of 2009, signs of renewed commitment to Rason have sprouted. While it may be too early to say whether the region will succeed in drawing investment and reform, our recent trips to Rason lead us to believe that developments on the ground may eventually warrant a shift in foreign policy by governments around the globe.

China has long eyed Rason as a potential import/export center for the landlocked provinces of Jilin and Heilongjiang. However, from Rason’s inception, the Middle Kingdom held little influence or interest in the region’s success. In 2002, North Korea establishedanother special economic zone in Shinuiju and instated businessman Yang Bin, then China’s second richest man, as the SEZ’s Chief Executive. The Chinese authorities promptly placed Yang Bin under house arrest. Perhaps as a lesson learned from this episode, the North Koreans have made the Chinese government a major stakeholder in Rason’s development.

The Chinese have moved 80,000 metric tons of coal this year through a pier they leased at the Rajin port.They are also reportedly sending regular delegations of senior officials, including the Chairman of the China Development Bank, and they have invested $30 million to repave the road from the border town of Wonjong to the Rajin Port. This road was 60 percent paved during a visit in October, and recent reports from businessmen inside the region confirm that the road is now 95 percent paved, allowing for large trucks to pass through. The Chinese have also constructed a new road on their side of the border, part of the support this area has received after the Chinese central government designated it “The Changjitu Development Region” in November of 2009.Officials from the North explained that the Chinese will have a say in everything from zoning of real estate to port customs and investment policies.

Though Russia’s involvement doesn’t run as deep, it also maintains a keen interest in Rason’s ice-free port and has pledged an investment of $200 million to refurbish a railway from the border town of Khasan and to upgrade pier three at the Rajin port, which it has leased for 49 years. Rason’s third port at Oongsang was once a major exporter of lumber from the Soviet Union, and though Oongsang looks far from reviving the Soviet involvement of its heyday, Russia clearly has an interest in Rason’s success as well.

In addition to neighboring countries’ newfound interest in the zone’s success, the North Korean leadership has also shown a renewed desire in luring investment into the region. In December 2009, Kim Jong-il made a visit to the area, sent his former trade minister to run the region as party secretary, and reinstated Rason’s status as a special city, wresting it out of provincial control. Any potential investor who visits the SEZ would experience the thirst of the local government to develop the region, as reflected by the words of an official with the Rason Economic Cooperation Bureau, Rhee Sung Hye: “The future of my career depends on how much investment I can bring.”

At the national level there are also signs that the regime is increasing its focus on economic development as a source of legitimacy. In 2009, the Joint Venture Investment Commission was formed as a one stop shop for foreign investors, while the Taepung Group and State Development Bank were created to attract foreign investment. In the first half of 2011, Kim Jong-il made more appearances related to the economy and less related to defense than in prior years, and a focus on improving lives through focus on light industry and agriculture was emphasized in joint editorials that signaled policy direction at the beginning of 2010 and 2011.

The alignment of simultaneous commitment from North Korea, China, and Russia sets the scene for a North Korean special economic zone with higher chances of success than perhaps ever before. However, interest and desire may not necessarily translate into results without knowledge of markets and how to create a stable investment environment. After a recent tour of his 200MW fuel oil powered generation facility, the President of Songbong Power, Rhee Kang Chul, expressed that the reason for his plant’s inactivity and the subsequent blackouts in the region was the rise in feedstock costs. When asked about mechanisms for electricity pricing, Rhee responded that the government had set power prices at 6.5 euro cents/kwh, but he couldn’t provide further details on how the number was arrived at and when it might change again. Though Rhee was clearly an expert on the technical aspects of power generation, he hadn’t had the chance to consider that potential investors, after getting comfortable with country risk, would have little clarity on the revenue side of their equation. When this was expressed to the Vice Mayor of Rason, he replied, “We can change the price of electricity here. Rason is not under the same restrictions as the rest of the country.”

North Korea could theoretically piggyback off the market knowledge that their Chinese partners have gained over the last 30 years, but Rason’s neighbors are only likely to share when it suits their interests. In the case of Sonbong Power, Kang told us that every Chinese official who has visited stated that the most effective solution would be to pipe in power from the Chinese grid. “We plan to have a power line installed from the border by the end of 2013.” As power is as strategic asset like food or water, dependence on Chinese power clearly leaves the North Koreans in a vulnerable position.

China is clearly North Korea’s closest ally, but their relationship has a thorny history and Pyongyang is acutely aware of its reliance on big brother Beijing. With China’s rise, many other countries in the region are increasingly dependent on trade but increasingly cautious of dependence, welcoming a stronger presence from the United States, which is in the midst of a strategic pivot towards Asia.

In December 2009, the Asia Society and the Institute on Global Conflict and Cooperation published a report arguing that economic engagement of Pyongyang by the United States would result in creation of vested interests in continued reform, a changed perception of self-interest and a less confrontational foreign policy from North Korea. Against the backdrop of a more uncertain domestic environment after the death of Kim Jong-il, and the shifting dynamics in Asia generally, a North Korea that trades more and engages with the outside world may necessitate a change in foreign policy of governments around the world, most specifically the United States, South Korea, and Japan.

The Rajin-Sonbong SEZ has a checkered past and it would be naïve to say that North Korea is embarking on late 1970’s style Chinese economic reforms. However, we believe that the unprecedented alignment of interests in the region make it a likely starting point for any lasting directional change, which is why the world should watch Rason.

Read the full story here:
Why World Should Watch Rason
The Diplomat
John Kim & Andray Abrahamian
2011-12-22

Pictured above (Google Earth): The Pyongyang – Nampho road (in yellow) and the Youth Hero Motorway (in orange).

UPDATE 1 (2011-11-29): KCNA has published pictures of the road construction, so it must be continuing apace!

ORIGINAL POST (2011-8-25): According to Yonhap (North Korea Newsletter No. 172–August 25, 2011):

Premier Choe Yong-rim Visits Pyongyang-Nampho Roadwork Sites

SEOUL (Yonhap) — North Korean Premier Choe Yong-rim made spot inspections on Pyongyang-Nampho roadwork sites and discussed with workers ways to provide raw materials for the project, the North’s media said on Aug. 22.

“After going round various places of the project, he held a consultative meeting of officials concerned on the spot,” the KCNA said.

The KCNA also said that “discussed at the meeting were the measures for finishing the project on the highest level in a brief span of time and substantially supplying raw materials for the project at relevant fields.”

Earlier, the Rodong Sinmun, the official organ of the North’s ruling Workers’ Party, on Aug. 18 said repair work of the Pyongyang-Nampho old road is now under way at a faster pace.

Premier Choe has been making brisk inspections on industrial facilities and other economic sectors so far this year.

It is worth pointing out for the new readers that the Pyongyang – Nampho road is not the same thing as the Youth Hero Motorway, which was opened in 2000. Since the motorway opened, however, it appears the original Pyongyang – Nampho road has fallen into some disrepair–requiring repairs.

The original Pyongyang – Nampho road is a bit more “industrial” and “practical” than the Youth Hero Motorway.  The latter extends from Kwangbok Street in Mangyongday-guyok to northern Nampho via the countryside.  It is five lanes in both directions and runs in a kinked straight line.  Because it falls outside any densely populated areas (outside its beginning and end), however,  it is largely empty–serving only through traffic.

The original road, however, stretches from Mangyongdae to Nampho along the Taedong River and through the industrial areas of northern Nampho. It connects populated areas of the Chollima Steel Complex, Taedonggang Tile Factory, Taean Heavy Machine Plant, and Taean Friendship Glass Factory before connecting with the Youth Motor Highway just north of the Pyonghwa Motors Factory.

Pictured above (Google Earth): The Pyongyang Friendship Hospital, where the Chinese visitors are being treated.

According to Xinhua (PR China):

Seven Chinese citizens and three nationals from the Democratic People’s Republic of Korea (DPRK) were killed in two traffic accidents near Pyongyang, the Chinese Embassy in the DPRK said Sunday.

On Saturday morning, a bus carrying 27 Chinese tourists overturned about 60 km away from Pyongyang, due to the slippery iced road caused by icy rain. Another bus with a 17-member Chinese business delegation plunged into a ravine from a bridge in the same section minutes later.

Ten wounded Chinese, including three seriously injured, were being treated at the Pyongyang Friendship Hospital, while the others were confirmed unharmed.

A work group sent by relevant Chinese authorities has arrived in Pyongyang. The Chinese Embassy activated an emergency mechanism and dispatched staff to look after the patients in the hospital on a 24-hour duty.

The DPRK government has instructed health, tourism and diplomatic departments to deal with related issues. DPRK officials have also visited the wounded Chinese in the hospital.

UPDATE: Adam Cathcart is also following this story.

Read the full story here:
7 Chinese killed in road accidents near Pyongyang
Xinhua
2011-11-27

According tot he AFP (2011-11-16):

Greek authorities seized almost 14,000 anti-chemical weapons suits from a North Korean ship possibly headed for Syria but did not disclose the find for nearly two years, diplomats said Wednesday.

The seizure was reported to the UN Security Council, which discussed the monitoring of nuclear sanctions against the isolated North, diplomats said.

The Greek operation was carried out in November 2009 but only reported to the United Nations in September, a diplomat told AFP on condition of anonymity in confirming the number of suits to protect against chemical weapons involved.

“It seems the shipment was headed for Latakia in Syria,” a second diplomat said, noting that the Greek report to the council did not mention Syria.

“There is increasing concern because more and more of the violations before several sanctions committees seem to involve Syria.”

Syria has already been linked to breaches of an arms embargo against Iran.

Both diplomats spoke on condition of anonymity as the report by the chairman of the North Korea sanctions committee, Portugal’s UN Ambassador Jose Filipe Moraes Cabral, was given behind closed doors.

The UN Security Council ordered tough sanctions against North Korea after it staged nuclear weapons tests in 2006 and 2009.

The North pulled out of nuclear talks with China, the United States, Japan, Russia and South Korea in 2009 and efforts to kick start negotiations are struggling, with the United States and its allies saying that North Korea is not serious about disarmament.

In a comment sent on an official Twitter account, a British diplomat said it was “clear that North Korea (is) still violating” Security Council resolutions.

“Strong concerns in council about the ongoing proliferation efforts,” added a German diplomat. Neither mentioned the seizure of the anti-chemical weapons suits.

Additional Information:

1. Here and here are the two UN panel of Experts reports on the DPRK which detail other UN embargo violations.

2. The Security Council this morning extended the mandate of the Panel of Experts helping monitor sanctions on the Democratic People’s Republic of Korea for an additional year, until 12 June 2012.

3. Here are links to embargo violations which I previously posted.

The Korea Times reports that Seoul has ended the government’s practice of sending propoganda flyers into the DPRK:

Seoul has suspended its launches of anti-regime pamphlets into North Korea, a military source said Tuesday in the latest sign of easing tension on the peninsula.

The decision comes nearly a year after the South resumed the controversial launches in retaliation for the North’s deadly shelling of Yeonpyeong Island on Nov. 23 last year. The pamphlets are floated across the border attached to giant helium balloons.

The source, who spoke on condition of anonymity, said the launches have been stopped for “a few months” and that the decision was made in view of the “government’s efforts to improve inter-Korean ties,” Yonhap News Agency reported.

Ending an 11-year moratorium, the government resumed the launches and allowed citizen groups to send their own balloons after the shelling that killed four people.

The North has called loudly for the halting of the act, calling it a “war action.” On several occasions, it threatened to fire on border sites where civilians float the balloons, which typically carry pamphlets information on the outside world, including news of the popular uprisings in the Middle East, as well as DVDs and dollar bills.

The source said the military would continue to broadcast anti-regime messages from giant loudspeakers placed near the border. Those were resumed after a 6-year moratorium in response the North’s sinking of the warship in which 46 sailors were killed.

Tension between the sides have been high since 2008, when the Lee Myung-bak administration, seeking a fundamental change in the Pyongyang’s belligerence, implemented a hard line policy that slashed aid to the North and tied its provision to denuclearization steps.

The icy relations have thawed somewhat since July, when the two Koreas sat down for surprise talks in a bid to resume six-party talks on the North’s denuclearization.

Seoul also replaced its hard-unification minister with Yu Woo-ik, who has gradually expanded inter-Korean exchanges under a more “flexible” approach.

In further sign of warming, Seoul completed its delivery of hepatitis B vaccines intended to reach 1 million children in the North, a unification ministry official said.

Worth $942,300, the vaccines were delivered to the North through international relief agencies in the South in two installments. It coincided with Seoul’s recent decision to deliver $6.94 million worth of medical aid northward through the World Health Organization.

Private sector activists continue to send leaflets.

The Daily NK reports that NLL incursions by DPRK ships have decreased:

New statistics have shown a significant reduction in the number of detected North Korean intrusions across the Northern Limit Line (NLL) this year.

According to the data, ‘Intrusions across the Northern Limit Line in the Past Six Years’, submitted by Song Young Sun to the National Assembly Defense Committee, there have only been 16 intrusions this year to November, representing only 1/6 of the 95 intrusions which occurred last year.

This is also the lowest number of intrusions over the last six years; fewer than 2006 (21), 2007 (28), 2009 (50) and 2010 (95).

Commenting on the data, Song told the committee, “It seems that the military authorities have strengthened their military patrols and the government is improving inter-Korean relations, and so the North seems to be controlling tensions in that area.”

To give a sense of a desire for reduced tensions between  the two Koreas, here is a list of recent stories from my “South Korea” post index:

1. ROK to resume food and medical aid.

2. Seoul to begin Kaesong road repairs.

3. ROK government planning to resume construction and relax sanctions in Kaesong zone

4. South Korea to allow firms to resume Kaesong construction

I wonder if the trend has anything to do with this.

However, there are some recurring serious issues:

1. The Cheonan and Yonphyong 

2. KEDO

3. Kumgang

Read more here:
Seoul halts flying leaflets to N. Korea
Korea Times http://www.koreatimes.co.kr/www/news/nation/2011/11/116_98791.html
Kim Young-jin
2011-11-15

NLL Intrusion Numbers Falling
Daily NK http://www.dailynk.com/english/read.php?cataId=nk00100&num=8413
Park Seong Guk
2011-11-16

According to the Daily NK:

The overbearing presence of ‘grain patrols’ is being keenly felt in North Korea these days. Formed at the municipal level from People’s Safety Ministry agents and Worker and Peasant Red Guards from factories and other enterprises, these groups of 20-30 individuals are busy manning checkpoints on main transit routes in agricultural areas to thoroughly restrict the movement of grains from cooperative farms and private plots.

To transit grain legally in North Korea at this time of year, a permit must be sought from the relevent Rural Management Committees. Those who do not hold the required documentation are meant to face punishment, although many simply bribe their way out of trouble. The patrols, which arrive in August, usually disband at the end of November.

A Hwanghae Province source recently told one Daily NK reporter, “They are blocking roads day and night inspecting people and their carts. They do not allow the carrying of any kind of foodstuff and confiscate without condition the goods of those caught.”

The source added, “Even people mobilized for the fall harvest are getting body searched; they are really annoyed.”

Another source from Pyongyang also described the scene, saying, “Currently the grain patrols are focusing on regulating the movement of corn, and are carefully watching for harvested corn being taken into people’s homes. So, some people get together to rent a car and bribe the patrol to be able to get around.”

The source also agreed that a substantial number of market traders are bribing guards and taking this year’s rice and corn from farms to sell.

Read the full story here:
Return of the Grain Patrol
Daily NK
Lee Seok Young
2011-11-15

UPDATE 3 (2011-11-15): NK News has more on the unofficial Air Koryo Facebook Page here.

UPDATE 2 (2011-11-12): The unofficial Air Koryo Facebook Page posted the following comment in response to a question about service to Kuwait (thanks to a reader for the pointer):

It is not canceled. It is restricted bookings just like Moscow services.

The comment is followed by this one:

Kwang-tae Kim: I am a reporter of South Korea’s Yonhap news agency. Can u elaborate on why bookings are restricted and when bookings will be resumed? Some people speculated that it could be North Korea’s attempt to prevent the news of popular uprisings in the Arab world from reaching North Korea. Do u have any comment? Thanks

UPDATE 1 (2011-11-12): According to Yonhap:

North Korea’s flag carrier has canceled an air route to Kuwait, Airline Route blog says, in what could be Pyongyang’s latest attempt to prevent the news of popular uprisings in the Arab world from reaching the isolated country.

The move came less than six months after Air Koryo started a weekly direct flight service between Pyongyang and Kuwait City, Airline Route said Monday on its Web site, citing the carrier’s planned winter operation.

In late May, Air Koryo announced the service on its Facebook page, adding that a large number of North Koreans work in the Middle East.

The North’s airline has not yet commented on the reported cancellation of the service on its Facebook page, which was last updated late in October.

Here is the source information for this story:

As per 07NOV11 GDS timetable display, the following is North Korean flag carrier Air Koryo’s planned Winter 2011/12 operation.

Pyongyang – Bangkok
JS153 FNJ1020 – 1420BKK T20 4
JS154 BKK1220 – 2000FNJ T20 4

Pyongyang – Beijing
JS151 FNJ0900 – 0955PEK T20 26
JS251 FNJ1030 – 1130PEK T20 4

JS152 PEK1255 – 1600FNJ T20 26
JS252 PEK1405 – 1710FNJ T20 4

Pyongyang – Kuala Lumpur
JS159 FNJ1340 – 2000KUL T20 14
JS160 KUL2300 – 0730+1FNJ T20 25

Pyongyang – Kuwait Service Cancelled

Pyongyang – Shenyang
JS155 FNJ1200 – 1210SHE T20 36
JS156 SHE1500 – 1710FNJ T20 36

Pyongyang – Vladivostok
JS271 FNJ0830 – 1220VVO T20 5
JS272 VVO1830 – 1820FNJ T20 5

On an similar note, according to the Air Koryo Facebook page (Oct 28):

Air Koryo 2012 European Charters:

We are glad to announce to our European Union fans that Air Koryo will indeed be operating a seasonal service to Germany with a service from Pyongyang’s Sunan to Berlin’s Schonefeld airport. The serivces will operate from April till May 2012 and will operate weekly. Service dates are currently listing as first departure of 12 April and final flight 3 May. All service will be operated by Tupolev Tu-204 aircraft.

More information including timetable and official route i.e. non-stop or one stop will be released soon.

…

The flight will operate via Moscow Sheremetyevo Airport, the flights will operate on alternate dates to the weekly direct flight to Moscow. Note that the flight to Berlin will be a direct flight, and not non-stop. The service will be operated by the larger Tu-204-100E

ORIGINAL POST (2011-6-1): According to an online aviation forum:

Air Koryo are opening a new route to Kuwait City, to operate once a week.

Outbound (Tue, day 2): JS 161 FNJ 1800 / KWI 0110+1
Return (Wed, day 3): JS 162 KWI 1400 / FNJ 0500+1
Aircraft: Tupolev Tu-204-300

From the schedule it is obvious that the aircraft parks for thirteen hours, enabling the crew to have an eight hour sleep before operating the machine back to Pyongyang.

The Tu-204-300 is the long haul, “SP” version of the 204, and the Air Koryo machine (they have just the one, plus a pair of regular -200s) is the only airframe of the type exported from Russia. It is also used on flights to Moscow, plus Beijing of course.

It is an interesting choice of route out of the hermit kingdom. The airline says, “We are glad to announce Air Koryo has started serving Kuwait City, the capital of the Arabic nation of Kuwait, with a weekly Tupolev Tu-204-300 serivce. The route offers many connections onto the Middle East, Iran, Africa and offers business links in the region.”

A reader in the comments points out that one of the DPRK’s new Tupolevs was in Kuwait on March 25, 2011 at 10:54 CET, so the route may already be in use.

In April 2011, Air Koryo announced regular service to Kuala Lumpur.

UPDATE: This was apparently picked up by VOA and Yonhap.

From the Choson Exchange web page (November 5):

In October 2011, John Kim, a board director of the Choson Exchange, visited the Rajin-Sonbong Special Economic Zone. The following is a summary of some of his findings based on site visits and talks with senior officials in the SEZ. An longer account of his travels and impressions will be available soon. This information helps elaborate on our report from August.

Rajin Port
The Rajin Port employs 1400 workers. The Chinese have conducted feasibility tests regarding two new piers, but currently the port houses three piers with 9-9.5 meters draft. A 30,000 metric ton coal storage warehouse was built at Pier 1 by the Chinese, who moved 80,000 metric tons through the facility in five shipments from January to September. Pier two, largely dedicated to container shipment, is currently dormant and a Swiss company is currently using Pier 3 to ship manganese and talc out of the region. The Russians also have a 49 year lease agreement signed in 2008.

Oongsang [Ungsang] Port
Oongsang Port exported Russian lumber until 1985, but remains largely quiet now except for the occasional fishing boat. The present draft of 7 meters constricts any major future activity, so the North Koreans hope to bring in over $100M to widen the draft to 9 meters. After Rajin Port activity surpasses capacity there, Oongsang Port will become the next regional hub for drybulk activity.

Sonbong Port
Originally opened in the early 70’s, the draft within the port is 7 meters, but a fully laden Very Large Crude Carrier containing 270,000 metric tons of oil can offload at an offshore facility further out at sea. Two pipes, 63 cm in diameter, run for 9km underground before reaching the storage facility at “Victory Petrochemical”, a simple refinery that was designed to refine crude and send oil products (gasoline, naphtha, jet fuel, diesel and fuel oil) back to the port for export. In addition to this two way flow, fuel oil also arrived sporadically at the port as part of aid packages from 1994 to 2008.

Sonbong Power
This power plant was originally designed to take fuel oil from Victory Petrochemical as feedstock and generate power to feed back to Victory. Since the refinery has been offline, Sonbong Power has at times provided electricity to the region, but with fuel oil prices close to $700/metric ton and current electricity prices at 6.5 eurocents/kwh, the economics of running the plant do not work leaving the 800 workers employed here largely idle.

Victory [Sungri] Oil Refinery
Literally translated as “Victory Chemical Plant”, this refinery was completed in 1973 with a 40,000bbl/day crude distillation unit that typically yields 40~50% residual fuel oil for an average crude feed. Investment into upgrading capacity in the international market has led to an eroding of margins for simple refineries like Victory. Currently the refinery is idle and would need over $500M in investment to become competitive.

Hye Song Trading Company
Mr Kim visited a Sewing Factory owned by Hye Song, which runs 8 such factories employing 2000 workers. Output is recorded for the entire year on a bulletin board at the front entrance of the company. All employees except the handyman were women.

Cell Phone use more prevalent
The number of cell phone users in the DPRK crossed 1 million earlier this year and one official commented that the overwhelming majority of urban households have at least one cell phone. This particular official had 4 phones for a household of 3. Foreigners are allowed to use cell phones on a different network, and users of the domestic and foreign network can not call each other. All usage is prepaid.

Handset Type: Local
Purchase Cost: 1570-2200 RMB
Usage Cost: 250 minutes and 20 text messages, while each additional minute is charged at 60 NKW (about .1 RMB/min)

Handset Type: Foreigner
Purchase Cost: 1800-2400 RMB
Usage Cost: Does not include any free minutes and are charged at 2RMB/min

Banking System has room for growth
There are two banks in Rason, the Central Bank, which is focused on domestic transactions, and the Golden Triangle Bank, which is focused on foreign currency transactions. Transactions for goods and services are conducted almost entirely in cash, usually in RMB or NKW. Mechanisms for savings are credit have room for development. As banks take a fee to deposit and withdraw cash, merchants prefer to hold money in cash (usually RMB). Credit is also available almost exclusively through friends or family.

Bottlenecks
A number of issues require solving if Rason is serious about attracting large scale foreign investment. Among these are reliable access to travel visas, reasonable communications costs with the outside world, a more mature banking system with savings and credit mechanisms and favorable tax treatment with a consistent legal framework. The mere fact that Rason is experimenting with market reform is encouraging, and Mr Kim is optimistic about economic development in the region and the nation as a whole.

Cars 

Uriminzokkiri posted this short video of rush-hour traffic in Pyongyang (YouTube):

I will leave it up to the reader to determine if the video was staged. What is more interesting to me is to see the variety of vehicles used in the shots.  I saw at least one American Dodge Van in the footage (similar to the one I saw parked next to the Pueblo in 2005).  If you know a lot about cars, feel free to try identifying other vehicles in the footage.

And continuing on the automotive front–a tourist to the DPRK took this picture in September 2010:

The picture above is of an American-made, petrol-guzzling “Hummer H2” (MSRP in 2008 – USD$53,286; 10 mpg_-US; 24 L/100 km; 12 mpg_-imp). The license plate on the vehicle is 평양 22-2722.

In September 2011, Eric Lafforgue took the picture below of what appears to be a second Hummer on the streets of the DPRK.

The license plate on this vehicle is “23-199”. I cannot read the city name on the plate.  According to the photographer:

During my stay in North Korea, i [sp] saw 2 Hummer cars. This is the fist time i [sp] hear north korean people making cristisms about something in their country! They all told me it was a shame to see such a car in North Korea, as it needs lot of fuel. Some people told me that the car number tells that it belongs to a local media (press or tv).

Cola

Mr. Lafforgue has also brought up another interesting topic through his pictures: North Korea’s cola wars!

On the left is a Picture of Cocoa “crabonated drink” [sp] taken by Eric Lafforgue in 2008.  On the right is a picture of  “코코아 탄산단물” (Translation: “Cocoa Carbonated Drink”) taken by Eric Lafforgue in September 2011.

I might have been inclined to believe they were the same product with different labels (and maybe they are?), however, they appear to be manufactured by different companies.  The cola on the left is manufactured by a company called “룡진” (Ryongjin), a company about which I cannot find any additional information, and the beverage on the right is manufactured by “모란봉” (Moranbong).  I presume that “Moranbong” is actually the Moranbong Carbonated Fruit Juice J.V. Company. According to Naenara:

Moranbong Carbonated Fruit Juice J.V. Company
Add: Taedonggang District, Pyongyang, DPR Korea
Fax: 850-2-381-4410

The company formed in 2004 produces a wide assortment of carbonated fruit juice and health drink.

It has an affiliated factory equipped with hi-tech facilities that conform to hygienic requirements of GMP, ranging from production of bottles and drinks to packing.

Its products include apple, grape, peach, orange, cocoa, lemon and strawberry carbonated juices.

A multifunctional super-antioxidant health drink “Pirobong” is a drawing card in the world market.

The company will steadily increase investment in the development of new brand of drinks and further promote exchange and collaboration with partners across the world.

So why does the DPRK produce competing colas? Wouln’t that be wasteful duplication of processes? No.  Monopolys are generally more wasteful than competitive firms. Though in the past there were few producers of carbonated drinks in the DPRK (Ryongsong Food Factory, Kyongryon Patriotic Soda Factory), the DPRK seems to have moved away from near-monopoly production to a more competitive industrial organization in the production of soda.

Kim Jong-il’s sister, Kim Kyong-hui (KKH), is director of the Light Industry Department in the Worker’s Party and as a result holds all colas in her job portfolio. Without having any special data on the DPRK’s cola market, I would speculate that KKH promotes competition between the different soda producers to increase efficiency and profits for the ultimate goal of improving the positions of her discretionary official and unofficial budgets.

As an aside, earlier this year Forbes ran a story about meetings held between the DPRK’s Taepung International Investment Group and Coca Cola. Taephing is directed by Jang Song-thaek, Kim Kyong-hui’s husband.

Disney

In the past I have pointed out the appearance of Disney characters on North Korean apparel (see here for example). Now they are showing up on mobile phones:

History 1

Here is a video of Lim Su-kyung in Pyongyang (1989). Here is a story about her in the Daily NK. I think I just found her Facebook profile!

History 2

Here is a map of Pyongyang produced int he 1800s.  Other maps of the region here. Hat tip to Kwang On Yoo.

Lift troubles

Here is a 30+ minute video shot in Pyongyang–nearly entirley in the dark. Hat tip to Leonid Petrov.

The video caption reads: “We were touring the 3 Revolutions Exhibition in Pyongyang in 2009, when our elevator lost all power and 11 of us were stuck in blackness, hanging by a North Korean thread.”

According to Yonhap:

South Korea will next week start repairing a road used by North Korean commuters to reach an inter-Korean industrial complex in the North, an official said Thursday amid signs of a thaw in bilateral relations.

The 4.5-kilometer road linking North Korea’s border city of Kaesong to the nearby industrial park is used by more than 47,000 North Korean workers who are employed by some 120 South Korean firms operating in the zone. South Korean officials earlier said the road was damaged in summer’s torrential rains, prompting the South to conduct an on-site survey.

“After signing an agreement (with the North), we expect to start repair work next week,” said an official at the Unification Ministry, which handles inter-Korean relations in the South.

“It will likely take about three months to complete the work, unless the weather becomes too cold, and cost us around 1.8 billion won (US$1.59 million),” the official said, speaking on condition of anonymity.

The repairs will involve restoring damaged paved sections and filling in holes on unpaved sections. Repairing the road is expected to save time for North Korean commuters and reduce traffic accidents.

The Daily NK offers some additonal information:

A government official explained today that the decision was made pursuant to agreement between the Kaesong Industrial Complex Management Committee, LH Construction and the North Korean authorities.

“The agreement has not yet been signed, but we are hoping to start the construction at the beginning of next week,” the official explained.

“Our side has taken on responsibility for planning the road repairs and supervising the construction,” he went on. “The weather could change things, but the construction should require three months and is expected to cost 1.8 billion South Korean won.”

Aside from the aforementioned construction, there are also plans to reconstruct two turning points for buses serving the complex. The human resources for the construction will be provided by North Korea.

There are plans to extend bus service to cover the areas of Pongchon (봉천), Kumchon (금천), and Phyongsan (평산). However, the roads to these areas are unpaved and extension of transportation services to these areas will require negotiations with the North Korean authorities.

Read the full story here:
Seoul to start repairing road leading to Kaesong complex next week
Yonhap
2011-11-3