North Korean Economy Watch

According to the Choson Ilbo:

China said that North Korea has been at the forefront of its international foreign aid efforts which it has been carrying out for the past 60 years.

Speaking at a press conference on Tuesday, China’s Vice Commerce Minister Fu Ziying spoke in detail for the first time about the aid his country has given to the North.

He said that China helped to build Pyongyang’s public infrastructure such as its subway system, but he emphasized that no cash aid has been given.

Beijing issued a white paper last week that outlines its foreign aid policy to Africa and Asia.

Read the full story here:
China Releases Details on Aid to N.Korea
Choson Ilbo
4/28/2011

According to Yonhap:

The number of North Koreans officially visiting China reached 28,600 in the first three months of the year, up 35 percent from the same period last year, a news report said Wednesday.

More than half of them visited China to work in either factories or restaurants, while 6,000 people visited China for conferences or businesses, the Voice of America reported, citing Chinese government data.

The VOA also said 700 North Koreans toured China for sightseeing, while fewer than 100 North Koreans visited China to meet relatives or friends and 7,300 visitors had other purposes. The report did not elaborate.

The data did not include information on North Koreans staying illegally in China after defecting, the VOA said.

Tens of thousands of North Korean defectors are believed to be hiding in China, a major land route through which many North Korean defectors travel to Thailand and other Southeast Asian countries before resettling in South Korea.

According ot the Choson Ilbo:

Chinese tourists will start visiting Russian and North Korean cities without visas on Wednesday under a formal agreement between Beijing and the two countries. The tour course starts in the Chinese border city of Hunchun in the lower reaches of the Duman (Tumen) River and goes on to eastern Russia and the Rajin-Sonbong special economic zone in North Korea.

A group of 21 tourists left Changchun, the capital of northeast China’s Jilin Province, on Tuesday for the Hunchun. Travelers will then visit Slavyanka, Vladivostok and Khasan, the official Xinhua news agency said. They then go to North Korea by train and tour the cities of the Duman River and the Rajin-Sonbong area.

The four-day tour starts every Wednesday and costs 2,300 yuan (approximately W390,000). Only Chinese travelers are eligible for the visa-free arrangement.

Read the full stories below:
Number of N. Korean visitors to China rises in first quarter
Yonhap
4/27/2011

Chinese Tourists Visit Russia, N.Korea Visa-Free
Choson Ilbo
4/28/2011

According to the Korea Herald (4/26/2011): The EU has announced it is maintaining the policy established last year.

Antiquated North Korean airliners have been banned from operating in European countries for six years in a row as part of the European Union’s prohibition on 21 states that have failed to meet its safety standards, a U.S.-funded private radio station reported Tuesday.

Under the EU ban, Pyong­yang’s Air Koryo can only fly two new airliners it purchased from Russia last year to the E.U. member states, according to Radio Free Asia.

Read the full story here:
EU prohibits N. Korea’s aged planes for six years
Korea Herald
4/26/2011

According to the Daily NK (3/31/2010): Recently purchased Tupolev’s allowed to fly to EU.

Air Koryo, North Korea’s flag carrier, has been given back partial permission to fly in EU airspace following the quarterly update to the EU’s list of banned airlines.

The lifting of restrictions against the airline is highly conditional, only allowing for entry by two of the airlines’ mostly Soviet-era fleet.

According to European Commission press release IP/10/388 which was released yesterday, March 30th;

“With this update, the Air Koryo licensed in the Democratic People’s Republic of Korea, subject to an operating ban since March 2006, is allowed to resume operations into the EU with two aircraft which are fitted with the necessary equipment to comply with mandatory international standards and following appropriate oversight by its authority. The rest of its fleet remains barred from operating into the EU.”

The two aircraft permitted to operate in EU airspace are a Tupolev Tu-204-300 delivered to Air Koryo in 2007 and currently serving on the Pyongyang-Beijing route, and a Tu-204-100B.

European Commission Vice-President Siim Kallas also said in yesterday’s statement, “Safety comes first. We are ready to support countries that need to build up technical and administrative capacity to guarantee the necessary standards in civil aviation. But we cannot accept that airlines fly into the EU if they do not fully comply with international safety standards.”

It is unclear whether Air Koryo plans to exercise its right to enter the EU, though there have been rumors that it plans to begin some kind of service between Pyongyang and Berlin.

Read the full article here:
Two Air Koryo Jets Back in EU Good Books
Daily NK
Chris Green
3/31/2010

According to Yonhap (3/25/2010):

The European Union is expected to relax its four-year ban on the North Korean state carrier, Air Koyro, from all operations in its member states, a source at the European Commission said Wednesday.

Air Koryo has been on the EU’s blacklist of airlines failing to meet international safety standards since the list was first put together in 2006. Currently, five individual carriers, including Air Koryo, and all carriers from 15 countries — 228 companies in total — are on the blacklist.

The EU’s Air Safety Commission met last week to review the list and recommended that the restrictions on the North Korean airline be relaxed to “Annex B,” which means that the carrier can operate in the region under “specific conditions,” the source said.

Air Koryo officials attended last week’s meeting to brief the commission on the safety measures they have taken so far, the source said. It was unclear what conditions would be imposed for Air Koyro if the ban is relaxed.

The Air Safety Commission is an advisory panel without decision-making power, but its recommendations are usually reflected when the blacklist is updated. The list is revised three times a year, with this year’s first update slated for late this month.

Read the full story here:
EU expected to relax ban on N. Korean carrier Air Koryo
Yonhap
3/25/2010

According to Yonhap (1/9/2010):

Air Koryo, North Korea’s air carrier, has been banned from offering flight services to Europe for a fifth year after having failed to meet international safety requirements, U.S. international broadcaster Radio Free Asia (RFA) said Saturday.

The North Korean carrier has been involved in the list of carriers prohibiting from flying to the 27 members of European Union that was released this year, RFA said.

Air Koryo reportedly has a fleet of about 20 planes made between the 1960s and 1970s in the Soviet Union.

Read the full story here:
N. Korean airline banned from flying to Europe
Yonhap
1/9/2010

Accoridng to the Borneo Post:

Kuala Lumpur International Airport (KLIA) announced the arrival of another new airline as Air Koryo, the national carrier of the Democratic People’s Republic (DPR) of Korea recently made its maiden landing at KLIA.

The inclusion of Air Koryo took the total number of airlines operating at KLIA to 58. Air Koryo became the first airline to introduce direct schedule flights to Pyongyang from Kuala Lumpur.

Air Koryo will fly twice weekly to KL from the capital city of Pyongyang, on Mondays and Thursdays, utilising a TU-204 Next Generation Tupolev type of aircraft, with 142 seating capacity.

“Malaysia Airports welcomes Air Koryo’s schedule operations to KLIA and wishes them all the best for this service. Its presence will not only increase the connectivity at KLIA but also establish a new direct service between DPR Korea and Malaysia,” said Malaysia Airports managing director Tan Sri Bashir Ahmad in a press statement.

“Air Koryo has been operating charter flights to KLIA for the last few years. Now it has created sufficient market strength to start schedule operations and we are very happy with the new development,” he added.

General manager of Air Koryo in KL said, “This new destination will be a welcome addition to Air Koryo’s route expansion. Kuala Lumpur has been a much-anticipated destination and I am confident it will be a fruitful service for Air Koryo. Malaysians and Koreans alike can now enjoy the best of both countries through Air Koryo’s service.”

Air Koryo was founded on Sept 21, 1955 with the name Chosonminhang. It was renamed to Air Koryo in March 1992. Air Koryo’s networks cover Beijing and Shenyang in China, Vladivostok and Moscow (Russia), Bangkok (Thailand) and now Kuala Lumpur.

The Inter governmental Air Route Agreement was signed between DPR Korea and Malaysia 20 years ago. The airline became an affiliate member of the International Air Transport Association (IATA) on October 21, 1996.

Read the full story here:
Air Koryo makes debuts at KLIA
Borneo Post
2011-4-20

Institute for Far Eastern Studies (IFES)
NK Brief (11-04-20)

Railroad services to Kaesong Industrial Complex on the Gyeongui Line increased from 21 to 23 times a day from April. Mainly a seasonal change, the last departure service into Kaesong has been pushed back to 5:00 pm from 4:30 pm and the arrival time also changed accordingly from 5:00 pm to 5:40 pm.

With the half of the Mount Kumgang tours, the Donghae Line is running on a more flexible schedule based on demand. Currently both lines are operating. There are 417 South Korean citizens currently residing in North Korea, with the majority (404 people) at the Kaesong Industrial Complex.

According to the Export-Import Bank of Korea, the volume of loans by the businesses operating economic cooperation with North Korea increased over the years, from 10.8 billion KRW in 2008, to 15.4 billion KRW in 2009, and 41.6 billion KRW in 2010. The increase comes as a surprise considering the enforcement of sanctions against the North from the Cheonan incident caused all inter-Korean exchanges and cooperation to discontinue except for the KIC.

The Export-Import Bank (Exim Bank) in coordination with the Ministry of Unification has continued to provide loans to businesses engaged in inter-Korean cooperation through a special loan program called, “Special Economic Exchanges and Cooperation Loan.” Special consideration was given to these small businesses suffering since the imposition of government sanctions.

Last year, a total of 25 businesses (11 economic cooperation-related, 13 exchange-related) received special loans from the Exim Bank. The loans were used mainly for stabilizing the business management to cover various business expenses including tariffs, shipping, material, distribution, manufacturing and labor costs, as well as other additional taxes and interests.

On the other hand, North Korea’s Korean Asia-Pacific Peace Committee informed Hyundai that it would retract the company’s monopoly over the tour of Mt. Kumgang, which was supposed to expire in 2028. Hyundai Asan expressed regret over the North’s decision by saying, “The agreements that were reached on Mt. Kumgang tourism must be honored and cannot be declared void or lose their validity on unilateral notification. The North’s statement should be withdrawn.”

The spokesperson of Hyundai also stated, “The root of this problem is caused by the stalled tourism project. The only solution is to resume the tours to Mt. Kumgang at the earliest time possible.” It further added its intention of working closely with the South Korean government to restart the tours. Since the suspension of Mt. Kumgang tours after a female tourist was shot and killed in July 2008, Hyundai Asan has been hitting dead ends with the project.

Regarding its plan to retract Hyundai, North Korea is pointing the finger at the “South Korean government’s vicious North Korea policy.” According to North’s Uriminzokkiri website, terminating Hyundai’s monopoly rights was an “inevitable decision based on low prospect for resuming the tours of Mount Kumkang.” It further added, “Although the South Korean government is condemning our decision as against international norms, the situation is compelling the DPRK to exercise our rights which is in accordance with domestic and international laws.”

According to the Choson Ilbo:

North Korea owes South Korea more than W1 trillion in terms of food and other loans, it emerged Tuesday (US$1=W1,092). The North has to start repaying the debt from June next year, but given its economic difficulties and strained inter-Korean relations it is unlikely that Seoul will see a penny.

According to the Unification Ministry, the Kim Dae-jung and Roh Moo-hyun administrations gave the North 2.4 million tons of rice and 200,000 tons of corn from 2000 to 2007 on condition of repayment over a period of 20 years with a 10-year grace period at a 1 percent annual interest. The loans amount to US$720.04 million, with the interest reaching $155.28 million.

The South Korean government also spent W585.2 billion from the Inter-Korean Cooperation Fund to re-link cross-border railways and roads from 2002 to 2008. Of the total, W149.4 billion worth of materials and equipment for construction on the North Korean side are also loans to be repaid on the same conditions.

Besides, Seoul lent the North $80 million worth of raw materials for production of textile, footwear, and soap in 2007 and 2008. At the time, the North paid back 3 percent of the loan with 1,005 tons of zinc ingots worth $2.4 million, leaving a $77.6 million balance.

All told, the principal on these loans amounts to W1.02 trillion and the total debt including interest to over W1.2 trillion.

The first repayment of $5.83 million for the food loans provided between October 2000 and March 2001 is due on June 7 next year.

A ministry official said, “The amount has already been included in next year’s revenue plan, on the assumption that it will be paid back. If the North fails to pay, it will be deemed outstanding balance.”

Aside from the food and economic loans, the South also lent the North W1.37 trillion through the Korean Peninsula Energy Development Organization from 1998 to 2006 for the construction of a light-water nuclear reactor. The money was raised by issuing government bonds. The total amount of all loans adds up to W2.25 trillion, if the accrued interest of W877.2 billion is counted.

But since the KEDO project was scrapped in 2006, there is no way for the South to get the money back. It seems likely that the total amount will be handled as “irredeemable government bonds” that have to be made up for with tax money.

Read the full story here:
Pyongyang Owes Seoul Huge Amounts of Money
Choson Ilbo
2011-4-20

UPDATE 2 (2011-4-25): Strategy Page comments on the technology that makes these facilities obsolete:

Over the last decade, there has been a pronounced slowdown in North Korean work on underground air bases. Part of this may be the result of growing energy shortages up north, and the frequent blackouts. It’s not just electricity that’s been in short in North Korea over the last decade, it’s everything. That includes construction equipment, especially the specialized stuff needed for digging tunnels into the sides of mountains. But work continues, slowly, mostly with manual labor, to expand the network of underground parking and maintenance facilities for aircraft, as well runway extensions. These sheltered air bases begin underground, then exit the mountain and continue outside. Apparently the North Koreans have figured out that the Americans have now developed weapons that could quickly shut down these underground facilities, and keep them inoperable.

One of the key weapons for doing this is the U.S. Air Force 129 kg (285 pound) Small Diameter Bomb (SDB). The official story was that this GPS guided smart bomb was needed for urban warfare. The smaller blast (17kg/38 pounds of explosives, compared to 127 kg/280 pounds for the 500 pound bomb) from the SDB resulted in fewer civilian casualties. Friendly troops can be closer to the target when an SDB explodes. While the 227, 455, 911 kg (500, 1,000 and 2,000 pound) bombs have a spectacular effect when they go off, they are often overkill. The troops on the ground would rather have more, smaller, GPS bombs available. This caused the 227 kg (500 pound) JDAM to get developed quickly and put into service. But the smaller SDB was always a mystery, with many produced, but few actually used.

But the SDB also has a hard steel, ground penetrating, front end, that can penetrate nearly two meters (six feet) of concrete. Not much use for that in urban warfare. But such a capability is very useful for taking out underground installations, particularly the entrances and air intakes. North Korea, for example, has twenty airfields with underground hangars for the aircraft. Usually tunneled into a nearby hill or mountain, the underground hangar allows fighters and bombers to quickly taxi out onto the runways and take off. Since North Korea doesn’t have that many operational warplanes, it’s believed that some of these “airfields” actually have long range rockets and ballistic missiles, mounted on trailers equipped to erect the missile into launch position and fire it off, in the underground hangars. The trailers are hauled out of the tunnels, onto the air field, the missile fired, and then the trailer is taken back inside to be reloaded. The North Koreans also have hundreds of other, smaller, underground facilities, close to the South Korea border, containing artillery and rocket launchers. These weapons are meant to be quickly hauled out and fired south.

That’s where the SDB comes in, but the U.S. Air Force isn’t saying much about it. The SDB would be the ideal weapon for launching a surprise attack on North Korean underground facilities, both the airfield hangers and the artillery bunkers. American B-2 and F-22 aircraft can dodge North Korea radar and drop a lot of SDBs all at once. A B-2 can carry over 200 SDBs. An F-22 can carry eight, and still protect the B-2s against any North Korean fighters that might have been in the air at the time of the attack. A half dozen B-2s carry over 1,200 SDBs, which is sufficient to cripple North Korean air defenses and twenty key air bases. A few dozen F-22s carry another 300 SDBs to hit smaller, spread out targets. The SDBs not only shut down the entrances to the hangars, but also blow deep holes in the airfields. While North Korea has thousands of troops trained and equipped to quickly come in and clear the hangar entrances and repair the airfields, they are not quick enough to do so before unstealthy B-1s and B-52s come in with more smart bombs (and cluster bombs, carrying thousands of small booby traps, that explode when stepped on or rolled over by vehicles or engineering equipment).

UPDATE 1 (2011-4-15): The Kangda-ri AFB* (Thunderbirds Runway) is slowly expanding.

In the Google Earth image above (dated October 3, 2009), I have outlined the runway infrastructure in yellow.  The northern most runway is new but displaces and older highway airstrip. A bridge is under construction which would link the new runway with the one that passes through the mountain.

The main runway is unchanged in length since the previous image was taken in December 2007.  The secondary runway is appx 1920 meters long.

The construction site is receiving electricity from a nearby substation just northwest of the facility.  Currently the power cables are above ground and cross the runway (in green).

There is a similar facility in Onchon on the DPRK’s west coast.  You can find a good description of it in The Armed Forced of North Korea.

* I use the name “Kangda-ri” AFB because this was the name Joseph Bermudez gave to the original highway strip in The Armed Forced of North Korea.

**This picture was picked up by Radio Free Asia, Yonhap, and the Wall Street Journal’s Korea Real Time.

ORIGINAL POST (2009-12-17): Although KCNA has not reported on it, the KPAF is making slow but steady progress on its east coast “Thunderbirds runway” just southwest of Wonsan (location here).  Construction had begun by Nov 11, 2002 when the image below was captured:

At the time this photo was taken the facility was in the early phases of construction, and the runway measured just over 1,500 m (According to Google Earth).  In fact the only way I could be sure it was a runway was because there was already a similar facility on the west coast–north of Nampo at Onchon AFB (Located here).  As an aside, if you would like to learn more about the Onchon AFB, Joseph Bermudez offers some information in The Armed Forced of North Korea.

Well, here is how the place looked December 24, 2007:

The runway foundation now extends nearly 2,450 m and we can see the outline of a functional runway appear.  The runway foundation is probably constructed from materials that are mined from the tunnels they are digging into this mountaion.  I am sure there is someone out there more qualified than I to calculate the size of the underground facility based on the amount of rubble they have used on the runway.

The rate of progress is surprisingly slow which is also evidence (though not definitive) that much of this work is being done manually.  At this pace lets hope they finish by 2012.

According to the Daily NK:

A North Korean vessel has been lost in the waters off the coast of Bangaladesh.

The vessel, MV Hang Robong, collided with another ship, MV Banga Lanka, on Wednesday night near the port of Chittagong, Bangladesh’s second city. By yesterday afternoon it was reportedly three quarters submerged.

According to port official Syed Farhad Uddin Ahmad, the vessel developed a crack in its engine room following the incident, causing three of its five compartments to flood.

All 31 crew members were rescued, but the vessel was apparently carrying more than 13,000 tons of rice from Pakistan to Bangladesh, and this has been lost.

Shoumen Chakravarty, of the ship’s local agent, Fortune Shipping, told Bangladeshi newspaper The Daily Star yesterday afternoon, “Most parts of the ship have sunk and there is no hope now as the (Bay of Bengal) is still very choppy.”

Shoumen added that the rice could not be unloaded from the vessel because of a power failure which rendered its crane inoperable.

North Loses Vessel in Bay of Bengal
Daily NK
Chris Green
4/8/2011

UPDATE 1: Some additional information from the New Zealand media:

The government will be lodging a complaint with the North Korean government after two fishing vessels were caught fishing illegally in the Ross Sea.

Foreign Affairs Minister Murray McCully says the North Korean vessels were intercepted by an Air Force Orion plane carrying out surveillance against illegal fishing in the area.

The vessels, Xiong Nu Baru 33 and Sima Qian Baru 22, were caught fishing in an area managed by the Commission for the Conservation of Antarctic Marine Living Resources (CCAMLR). The Xiong Nu Baru 33 was using deep-sea gillnets, which are banned in the CCAMLR Convention Area.

“Deep-sea gill netting and associated ghost-fishing by lost and discarded nets have serious detrimental effects on the marine environment and many marine species”, said Fisheries Minister Phil Heatley.

“Illegal, unreported and unregulated fishing poses a severe threat to the sustainability of valuable toothfish stocks and has caused considerable environmental damage in the Southern Ocean.”

McCully said the detection of illegal, unreported and unregulated fishing vessels in the Southern Ocean was of grave concern to New Zealand.

He said New Zealand had reported its findings to the CCAMLR Commission and lodged its concerns with the North Korean government.

Noland reminds us of another similar case.

ORIGINAL POST (2011-4-7): According to the Dow Jones Newswire:

Two North Korean fishing vessels were recently caught illegally fishing in the Southern Ocean in Antarctica, New Zealand’s minister of foreign affairs said Thursday.

Minister Murray McCully said the Royal New Zealand Airforce in February detected two North Korean boats fishing to the east of the Ross Sea in an area managed by the Commission for the Conservation of Antarctic Marine Living Resources.

The boats weren’t supposed to be fishing in the area as they had been blacklisted under other names. One of the boats was also fishing using a banned deep-sea gill net.

“Illegal, unreported and unregulated fishing poses a severe threat to the sustainability of valuable toothfish stocks and has caused considerable environmental damage in the Southern Ocean,” McCully said.

New Zealand is concerned about unreported and unregulated fishing vessels in the Southern Ocean, the minister said, and would be lodging its concerns about these vessels with the Government of the Democratic People’s Republic of Korea.

New Zealand has reported these boats to the Commission and “this should ensure that the Commission’s 25 members (countries) do not allow these vessels to access their ports nor allow the import of any fish caught by them,” he said

You can read the full story here:
New Zealand Foreign Minister: North Korean Boats Caught Illegally Fishing In Southern Ocean
Dow Jones Newswire
Lucy Craymer
4/7/2011

North Korean market footage
Kim Song Min  (김성민), founder of Free North Korea Radio, has posted some video footage of a North Korean market.

You might be able to see it here, but I make no promises. It definitely won’t work from China.

Nothing remarkable, but interesting.  Of course the market is dominated by female vendors.  Bread and dried squid were for sale.  Also, shoe shines seemed to be popular.

I wish I knew what people were saying in the background.

North Korean Legos
The Russian  blogger that brought us the DPRK’s Linux OS, the DPRK’s PDA device, and the DPRK’s film camera, now brings us the DPRK version of Legos:

Interestingly, the toys come with instructions in both English and Korean.  Maybe the producers are hoping for an opportunity to export in the future?  Finally some actual socialist building blocks behind which the children of the world can unite!  You can read more in Russian here.  You can read more in English here (via Google Translate)

Pyongyang Metro Photos
Most visitors to the DPRK visit the Puhung and Yongwang Metro Stations.  Satellite images here and here. Google has also cataloged lots of pictures pictures of these stations: Puhung, Yongwang.

The Ponghwa Metro Station is located at  39.012100°, 125.744452°–next to the Party Founding Museum.  This station is not visited by foreigners as often, but here are some photos: One, two, three, four.

The Kaeson Metro Station is next door to the Arch of Triumh (39.043059°, 125.754027°).  A friend sent some North Korean postcards that seem to come from this station, though the pictures look like they were taken in the 1970s: one, two, three, four, five, six, seven, eight, nine, ten, eleven.

Pyongyang goes pop: sex scandal on the socialist music scene
According to a story in The Guardian:

There was mild controversy last year when a secret video featuring Wangjaesan’s female dance troupe entered the public domain. The video was being privately circulated among the elite, but reached the North Korean public before making it over the border to China – and therefore the world. Normally seen in traditional, body-cloaking hangbok dresses as they perform polite folk numbers, this little clip revealed unprecedented levels of sexiness in Pyongyang, as the girls popped up in sparkly hot pants and did the splits. Western displays of decadence like this are illegal but, given Kim Jong-il’s alleged love of pornography, perhaps he turned a blind eye to this one.

The video of the dancers can be found here (though it is a VERY slow download) or you can watch it on YouTube here and here.  I could not find a better version this time around.  Here is the original story in Yonhap (2009-11) when the story broke (with picture).

UPDATED: This video is allegedly of the same group.

The 4 of 31 fishermen
I have not spent much time blogging about the 4 of 31 North Korean fishermen who drifted to the South and do not wish to return to the DPRK.  I did track down the six videos the North Koreans filmed with the family members.  They were posted to YouTube by Uriminzokkiri.  See them here: One, two, three, four, five, six. If anyone can translate these, or give us a rough idea, I would apprecaite it.

KFA sets up branch in Israel!
Alejandro Cao de Benos seeks to build sympathy for the DPRK among the Israelis.