North Korean Economy Watch

UPDATE 4: Chinese government confirms Kim Jong-il visit.  According to Evan Ramstad in the Wall Street Journal:

North Korean dictator Kim Jong Il met Chinese President Hu Jintao during his five-day visit to northeast China, the Chinese government confirmed Monday night as Mr. Kim left the country, in a surprise get-together that underscored their solidarity as they cope with pressure from the U.S. and other countries to act more responsibly.

The announcement was the climax of what appeared to be a coordinated public-relations push by China on Monday, beginning with stories in several media outlets praising the China-North Korea relationship while also saying Beijing shouldn’t be held responsible for Pyongyang’s provocative actions.

The meeting happened Friday, though China, as it has done with Mr. Kim’s previous visits, waited until he left the country to say he had been there.

In the initial reports confirming the meeting between Messrs. Kim and Hu, China’s state media said that Mr. Kim wanted a resumption of the six-nation talks aimed at striking a bargain for denuclearizing North Korea. They also hinted that Mr. Kim was interested in the economic overhauls that opened China to the world, though they didn’t say he endorsed or would follow them.

Mr. Kim for years has resisted requests of Chinese leaders to open up North Korea’s economy. Late last year, his regime tried to clamp down on market activities but halted the effort when the government couldn’t feed people.

Mr. Hu said on state TV that China should expand its economic cooperation with North Korea. Since Mr. Kim’s entourage was spotted in China on Thursday, analysts have speculated that one reason he made the trip was to seek more money and assistance for the impoverished North.

Analysts also speculated that Mr. Kim brought his expected heir-apparent, son Kim Jong Eun, to meet Chinese officials ahead of a political meeting in Pyongyang next week that may be the son’s public debut in North Korea. The Chinese news reports about the visit did not mention the son, however.

“I think there are other two issues Kim wants to talk about with China,” said Jin Hanyi, head of Northeastern Asian Research Institute at Yanbian University in Jilin. “North Korea recently had a bad flood and, with international sanctions against it and the failure of monetary reform, Kim wants to discuss how to deal with these awful messes,” Mr. Hanyi said. “Second, North Korea will hold a Workers’ Party meeting next month and he wants support from China for new policies.”

Mr. Kim’s entourage twice during the trip stopped in places associated with his father, North Korean founder Kim Il Sung, moves that are likely to be portrayed in North Korea as highlighting the importance of the Kim family as another potential succession looms.

For outside diplomats, the greatest significance of the trip is the symbolism of Messrs. Kim and Hu going to great lengths to meet each other in the aftermath of criticism both countries took following the sinking of a South Korean earlier this year, an incident that South Korea, the U.S. and others blame on a North Korean attack.

China has refused to blame North Korea publicly for the sinking, which killed 46 South Korean sailors, or to examine the results of the South Korea-led investigation.

Instead, North Korea and China have, since late May when the investigation first produced the accusation against North Korea, called for the resumption of the six-party denuclearization talks. The talks began in 2003, producing two agreements that North Korea dragged out and ultimately failed to keep. Pyongyang formally walked away from them last year.

Japan, South Korea and the U.S. have said North Korea damaged the potential for the talks with its attack on the South Korean ship.

The message to restart the talks was also given last week by a different North Korean official to former U.S. President Jimmy Carter when Mr. Carter went to Pyongyang to retrieve an American teacher who entered North Korea illegally in January. Mr. Kim skipped the opportunity to meet Mr. Carter to go to China instead.Mr. Kim doesn’t like to fly and travels by train that is easily monitored by satellite by foreign governments. His entourage is then tracked on the ground by reporters who follow the highly visible security cordons that go up along his route.

On Monday, South Korean and Japanese news agencies reported the action as Mr. Kim took his specially outfitted train from Harbin, the capital of China’s most northeastern province Heilongjiang, to a smaller city called Mudanjiang and then down to the border crossing at Tumen.

Mr. Kim called himself a “witness” to the success of China’s “reform and opening up,” Chinese television reported, but it was unclear whether that meant the North would follow that model. Last year, Chinese Premier Wen Jiabao, in a visit to Pyongyang, proposed development projects valued at several billion dollars to North Korea, but none have gotten off the ground.

Early Monday, Chinese state media rang with praise for North Korea but also tried to draw a line in the two countries’ relationship.

The state-run Xinhua news agency published a commentary talking about Chinese men who sacrificed their lives for North Korea, during the Korean War of the 1950s and afterward. Its latest example was the tale of a Chinese man who drowned this month after rescuing three North Korean girls adrift at sea.

The man’s “sacrifice led us again to recollect the long history of friendship between the two peoples,” Xinhua wrote.

Another nationalist newspaper, Global Times, wrote an editorial that called the China-North Korea relationship both “special” and “normal.”

“The biggest negative impact the China-North Korea relationship has on China is that the U.S, Japan and South Korea all request that China be responsible for North Korea’s ‘irrational behaviors,'” the newspaper wrote. “However, China has no ability to shoulder such responsibility.”

UPDATE 3: Kim Jong il departs from Harbin and returns home.

UPDATE 2: Kim Jong-il in Changchun. According to Yonhap:

North Korean leader Kim Jong-il arrived in a Chinese industrial city Friday, a day after making a pilgrimage to sites bearing footmarks of his late father, on an abrupt trip seen as related to his leadership succession plan.

A convoy of some 30 vehicles, believed to be carrying the reclusive leader, arrived at the South Lake Hotel in the northeastern Chinese city of Changchun, about an hour and a half after leaving the nearby city of Jilin.

Earlier in the day, Kim’s convoy appeared to be traveling to a Jilin train station, where security was heavy, to allow the leader to board his personal armored train to Changchun. However, instead of stopping, the convoy took a highway to the capital city of Jilin province. About 10 police vehicles provided escort for the group of limousines and mini-buses.

Kim’s stay in Changchun is expected to include a tour of advanced industrial facilities.

Kim, 68, began the latest secrecy-shrouded trip a day ago, crossing into China around midnight Wednesday aboard his luxurious special train.

The trip was a surprise because it came as former U.S. President Jimmy Carter was in Pyongyang for a widely speculated meeting with him. It was also Kim’s second visit to China in about three months, an unusual move for the isolated leader who rarely travels abroad.

Carter arrived in Pyongyang Wednesday to win the release of an American citizen detained in the North since January for illegal entry. Carter headed home Friday with the freed American, Aijalon Mahli Gomes, Pyongyang’s Korean Central News Agency said.

It was apparent that he failed to meet with Kim Jong-il.

On Thursday, Kim paid a visit to Jilin’s Yuwen Middle School, which his father and national founder, Kim Il-sung, attended for two and a half years starting in 1927. Kim also visited Beishan Park in the city of Jilin where the remains of anti-Japanese independence fighters are buried.

North Korea has lavishly lauded Kim Il-sung for his anti-Japanese activities during the 1910-45 colonial rule. The late leader, who founded North Korea in 1948, is still revered as eternal president and is subject to a strong cult of personality even after his death in 1994.

Kim’s move suggests that he visited the two sites considered sacred to his family dynasty ahead of handing power over to his youngest son, Jong-un, analysts said. Unconfirmed reports said the heir-apparent could be accompanying his father on the rare trip.

North Korea’s ruling Workers’ Party is scheduled to convene a rare leadership meeting early next month in which the younger Kim could be given a key position in the run-up to formally taking over the communist dynasty.

On Thursday, Pyongyang’s state media reported that the country has started holding lower-level meetings of party delegations in the run-up to next month’s conference.

“The meetings were unanimous in saying that the WPK conference … will be a significant conference which will be a landmark of an epochal turn in strengthening the party and a great jubilee of great significance in ushering in a new surge in the revolution and construction,” the KCNA said.

Kim’s trip came as tensions still run high in the wake of the March sinking of a South Korean warship and China pushes to jump start six-nation talks on ending North Korea’s nuclear programs.

Beijing’s chief nuclear envoy has been in Seoul for talks on his trip to North Korea last week.

China is pushing for a “three-step” proposal for resuming the nuclear talks.

The proposal calls for Pyongyang and Washington first holding bilateral talks before all six parties hold an informal preparatory meeting and then an official session. The talks, which involve the two Koreas, China, Japan, Russia and the U.S., have been stalled since late 2008.

South Korea has expressed its reluctance to reopen the dialogue unless the North shows a “responsible” attitude over the sinking and proves through action that it is serious about abandoning its nuclear programs.

UPDATE 1: Here is KCNA coverage of Cater’s visit to secure the release of Gomes

ORIGINAL POST: Former President Jimmy Carter is in Pyongyang to secure the release of American Aijalon Gomes.  Past stories about his detention can be found here. President Carter last traveled to Pyongyang in 1994  and met with Kim Il-sung (the North Koreans made a propaganda video out of the trip which they sell to foreigners), and discussed terms to freeze the country’s nuclear program. Many were speculating that President Carter might meet with Kim Jong-il while in the DPRK, but Kim appears to be in China.

According to the New York Times:

The man Mr. Carter is seeking to free is Aijalon Mahli Gomes, a 30-year-old Christian from Boston who was arrested in January for crossing into North Korea and sentenced in April to eight years of hard labor and fined $700,000. Last month, North Korea said he tried to kill himself out of “frustration with the U.S. government’s failure to free him.”

The visit by Mr. Carter, an evangelical Christian, is the second to North Korea by a former American president in a year on what the United States described as a private humanitarian missions. Last August, Bill Clinton flew there and met with the reclusive North Korean leader, Kim Jong-il, to secure the release of two American journalists held for five months for illegal entry.

The Obama administration kept its distance, emphasizing that Mr. Carter not an envoy. “I’ll just say that President Carter is on a private humanitarian mission and I’m not going to comment more beyond that,” said Mark Toner, a State Department spokesman.

But as with Mr. Clinton’s visit, Mr. Carter’s has deeper diplomatic undercurrents. The North Koreans have used the captive Americans as bargaining chips, promising to release them in exchange for visits from specific high-profile Americans. North Korea can portray the meetings domestically as evidence of its international importance, while the United States has a high-level direct encounter that it cannot officially engage in.

But Mr. Carter has a long history as an independent agent, and some administration officials worried that he might undercut their policy in some way and make it harder to keep up the pressure on Pyongyang to give up its nuclear program.

It was not immediately clear who among the North Koreans would meet with Mr. Carter. The North Korean media reports said that he was greeted at the airport in Pyongyang, the capital, by Kim Kye-gwan, a senior diplomat who has been the North’s main envoy to the six-nation talks on its nuclear weapons program. The talks have been stalled for more than two years, but the North recently said it was willing to return to the discussions.

Higher-level meetings would appear to be likely, since Mr. Carter’s visit comes at a fraught time for North Korea. Its economy remains deeply troubled, and its ravaged agricultural sector has been further damaged by recent flooding. A March torpedo attack that sank one of the South’s warships, killing 46 sailors, drove inter-Korean relations to their lowest point in years and added to tensions with the United States. In addition, there may be a struggle over succession within the government of Kim Jong-il, who has had serious health problems.

The case of Mr. Gomes also touches on efforts of Christians in South Korea and the United States on behalf of North Koreans. His illegal entry was made in support of Robert Park, a fellow Christian from the United States who crossed from China in December to call attention to the dismal conditions in the North’s prison camps. Mr. Park was expelled after about 40 days.

Mr. Carter has been a contentious figure among South Korean conservatives. “Carter is idealistic, not realistic when it comes to North Korea,” said Hong Kwan-hee, director of the Institute for Security Strategy in Seoul. “North Korea always has tried to use prominent Americans, preferably Democrats, as a medium to engage the United States and drive a wedge between Seoul and Washington.

In another development, the South Korean authorities on Thursday morning were looking into indications that Mr. Kim, the North Korean leader, might be visiting China, an official in the presidential office of South Korea said. News media in South Korea, including the national news agency, Yonhap, and the mass-circulation daily, Chosun, reported the same on their Web sites.

“We have signs that Kim Jong-il is visiting China,” said the official, who spoke on condition of anonymity, citing the sensitivity of the matter. “It’s unclear whether he has arrived or is still on the move.”

If true, this would be Mr. Kim’s sixth trip to China and his second in three months. North Korea and China usually do not confirm a trip by Mr. Kim until after it is over. His previous trips were often preceded by weeks of media speculation. Many journalists waited on the Chinese side of the border to wait for his train to cross. This time, there was no such activity.

According to Bloomberg:

Carter yesterday also met with Kim Yong Nam, president of the Presidium of the Supreme People’s Assembly of North Korea, KCNA said. The pair had a “cordial talk” in the Mansudae Assembly Hall, the official news agency said.

Regarding Kim Jong-il’s visit to China, I turn to the Los Angeles Times:

In a trip shrouded in mystery and speculation, North Korean leader Kim Jong Il traveled to China by train with his youngest son, according to two South Korean government officials.

An official in the South Korean Blue House confirmed late Thursday that Kim’s train had crossed the border into China around midnight Wednesday, but said the North Korean leader did not take the usual route through the city of Dandong.

We “detected indications a few days ago,” the official told reporters, asking not to be named. “Chairman Kim’s special train has been confirmed to have left Manpo for China’s Jilin around midnight Wednesday.”

Another official, who asked not to be named because he was not authorized to discuss the matter, said earlier that intelligence had detected movement by the reclusive Kim.

South Korea’s Yonhap news service quoted an official speculating that the trip might be associated with the anticipated handover of power in the secretive regime.

“Signs have been detected that Chairman Kim visited China early Thursday morning,” the second unnamed official told the agency. “We are still trying to grasp his exact destination and the purpose of the visit.”

This was Kim’s second trip to China since May, when he embarked on a five-day journey for a summit with Chinese President Hu Jintao.

The Chinese government Thursday had no immediate comment on the visit. Because of security concerns, Kim’s rare trips outside North Korea to the ally nation are publicly confirmed only after they end.

The Yalu River crossing between North Korea and the Chinese city of Dandong was badly flooded last weekend, disrupting the railroad lines over which Kim normally travels in an armored, luxury train, reportedly equipped with conference rooms, bedrooms and high-tech communication facilities.

Shi Yinhong, a professor at Beijing’s Renmin University, speculated that Kim “must need China’s help in reducing tensions and ensuring a good environment for the succession of his son.”

The visit may signal that North Korea is prepared to return to six-party talks hosted by China on its nuclear program. North Korea also badly needs humanitarian assistance as a result of a series of economic blunders, as well as poor harvests and damage to cropland caused by the recent flooding.

Kim, who is 68 and in poor health after suffering a stroke in 2008, is in the process of naming his youngest son, the little-known Kim Jong Eun, 26, as his successor, a decision which should be announced at a special congress next month of North Korea’s ruling Workers’ Party.

“It’s likely that Kim Jong Il wants to end the debate on the succession issue in Pyongyang ahead of a meeting next month of the North Korea’s Workers’ Party,” said Yang Moo-jin, a professor at the University of North Korean Studies in Seoul.

“There’s been plenty of succession talk between working-level and senior-level officials in Beijing and Pyongyang where they have failed to reach an agreement. Kim Jong Il now seems to be taking matters into his own hands.”

Kim Jong Eun, who was educated in Switzerland and speaks several languages, did not accompany his father during the previous trip to China in June. His presence on this visit might be something of a courtesy call to introduce the future leader to the Chinese.

“China will have no choice but to deal with Kim Jong Eun. Their regime is traditionally a family dynasty and, like it or not, if you deal with North Korea, you have to deal with their ruler,” said Shi.

Kim Jong Il assumed power in North Korea with the death of his father, Kim Il Sung, in 1994.

The rumors come amid tensions on the Korean Peninsula following the deadly sinking of a South Korean warship in March. The south has blamed North Korea for an unprovoked torpedo attack.

The trip also comes the day after former U.S. President Jimmy Carter arrived in Pyongyang to secure the release of a U.S. citizen imprisoned for illegally entering the country.

Here is the original Yonhap story.

Here is more in the New York Times.

Here is more in the Los Angeles Times.

The Road less taken: DPRK railway crossings into China

Click image for larger version

The DPRK does not have many railway crossings into China. From West to East: Sinuiju, Sakju, Manpho,  and Namyang.  Historically there were additional crossings at the Unbon Dam,  Hyesan, and Saepyol, but these do not appear to be used anymore.  Namyang is in the furthest reaches of North Hamgyong Province, so if Kim is going to cross into China by rail, he has to do so from Sinuiju, Sakju, or Manpho.  Coincidentally, he has a private railway station and secure residential compound near each of these border crossings–though the closest leadership compound and train station to Manpho is in nearby Kanggye and the closest compound to the Sakju Bridge is in Changsong County.

Given that the Sinuiju crossing is most convenient, it is a bit of a mystery why he chose to cross at Manpho when Sakju/Changsong is so much closer.  Maybe the Sakju/Changsong railway crossing is not as convenient for some unknown reason?  Maybe the “smaller” Kanggye leaderhip compound is more exclusive and Kim prefered hiding this trip from as many of his cohorts as he could?  Maybe the Changsong elite compound (which is also on the water) is also flooded?  I do not know the reason, but there has to be one…

Last week I wrote about new satellite imagery on Google Earth which showed highway construction in Sinuiju.

The story is more interesting than I initially suspected, however.  It appears that the DPRK is building two highways between Tongrim and Sinuiju.  One highway will probably be for public, commercial, and international traffic.  The other road is likely reserved for “you-know-who” and other senior policy makers.  Below is a map of both these highways between Tongrim and Sinuiju.  The “elite road” is the road to the right that connects Tongrim to Kim Jong-il’s compound in Sinuiju and the Uiju Airforce Base.  You can see the map below:

It is not clear where these roads go south of Tongrim because the satellite imagery predates the highway construction.

There are several highways in the DPRK that are reserved for Kim Jong il and other senior policymakers.  Below is the highway that connects Pyongyang to leadership compounds in Hyangsan and Changsong (on the Chinese border).

Google Earth has added some new GeoEye imagery for Sinuiju, Ryongchon, and Phihyon counties. The imagery dates are Oct 12, 2009 and April 14th, 2009.  So what is new in this area?

Pyongyang–Sinuiju highway under construction
It can be most easily seen between the Sinuiju Train Station and Rakwon-dong.

Villages along the highway are being spruced up in anticipation of car traffic:

The highway construction can be seen as far south as half-way between Ryongchon and Yomju.  I suspect that it is intended to continue south to Anju where it will meet up with the Pyongyang-Hyangsan highway.

Market construction in Sinuiju and Phihyon County
I blogged about the new Sinuiju market here. Below is imagery of the new Phihyon County Market (피현군):

Ponghwa Chemical Factory (Refinery)
It was partially visible before, but now we can see the whole thing. It is one of two refineries in the DPRK.  The other is in Rason (satellite image here).

Reconstructed Ryonchon City (룡천시)
I have previously blogged about this here.

On the left is an image taken after the infamous 2004 Ryongchon explosion.  On the right is the city as it appears reconstructed in 2009.

Ryongchon offers another interesting secret.  In the past, the high street ran through the center of the city (North-South):

Today, however, traffic is routed around the western side of Ryongchon rather than through the center of town.  The road in the center of town has been converted into a public square of sorts (as can be seen in the images above), and the wide avenues that run the North-South distance of the city now come to an awkward end in the fields…

Bottom photos: North and south sides of town and their vanishing high streets

Also, in 2005 the North Korean government was building either a highway or canal on the western side of Ryongchon, but this effort seems completely abandoned today:

UPDATE 3 (9/6/2010): The DPRK has announced the release of the fishing crew.  According to Reuters:

North Korea said on Monday it was releasing the seven-man crew of a South Korean fishing boat, including three Chinese, after they illegally entered its waters last month.

State news agency KCNA said the crew would be sent back South Korea “taking into consideration the fact that they admitted the seriousness of their act and gave assurances that they would never repeat such an act”.

Tensions have mounted on the peninsula this year after the sinking of a South Korean warship — Seoul says it was sunk by a North Korean torpedo — and a series of recent military drills by the United States and South Korea.

UPDATE 2 (8/18/2010): The DPRK has acknowledged that it has the ship and crew.  According to Bloomberg:

North Korea confirmed it seized a South Korean fishing boat last week off the communist country’s east coast for violation of the maritime border.

North Korea is investigating the four South Korean and three Chinese crew members, who had “confessed that they intruded into the economic waters,” the state-run Korean Central News Agency reported. The North Korean navy captured the boat on Aug. 8 at around 10:15 a.m. local time, the report said.

South Korea has sent a message to North Korea, urging a swift return of the 41-ton Daeseung and its crew. The incident came amid heightened tensions between the two countries after the South accused the North of torpedoing one of its warships in March, killing 46 sailors.

North Korea fired a barrage of artillery shells into the water off its west coast on Aug. 9 after repeated threats of “retaliation” against South Korea’s joint naval drills with the U.S. The U.S. and the South held anti-submarine exercises off the Asian country’s east coast last month and plan to hold more in the coming months.

UPDATE  1  (8/11/2010): According to Yonhap:

South Korea said Wednesday it sent North Korea a message urging the prompt release of the crew of a South Korean fishing boat the communist state seized three days ago amid high military tensions.

North Korea accepted the message delivered through a western military hotline between the two countries at 10 a.m., Unification Ministry spokeswoman Lee Jong-joo said in a briefing.

The message, addressed to the North’s top Red Cross official, contains a call by his South Korean counterpart to free the seven crew members of the Daeseung “promptly in line with international law and customs and on humanitarian grounds,” Lee said.

South Korea is investigating whether the 41-ton boat, which had left for a joint fishing area off the east coast of the Korean Peninsula on Aug. 1, trespassed into the North’s exclusive economic zone. Pyongyang has yet to offer any word on the state of the crew that included four South Koreans and three Chinese.

“We have also asked the North to explain in detail how the fishing boat was seized,” Lee said, adding the Red Cross channel is often used in inter-Korean issues involving civilian boats.

The seizure came amid high tensions between the two Koreas in the wake of the deadly March sinking of a South Korean warship near their western sea border. On Monday, North Korea fired more than 100 rounds of artillery along the Yellow Sea border near the area where South Korea had just ended five-day-long naval drills.

A government source said South Korea and China have been discussing the issue.

“An official at the South Korean embassy in China met with a Chinese government official a few times recently” to discuss the seizure and share information, the source said on condition of anonymity. “The seized crew include Chinese … If negotiations for their release begin in the future, we plan to cooperate with China where necessary.”

In July of last year, a South Korean fishing boat, the Yeonan, accidentally crossed into North Korea’s waters and was towed to a nearby port. The boat was released about a month later.

And according to Reuters:

Chinese diplomats in North Korea were trying to check the reports, said China’s official Xinhua news agency.

“If the report is confirmed, the DPRK should treat the Chinese crew members well with humanitarianism, guarantee their rights and interests, and inform the Chinese side of their conditions, the (Chinese) officials said,” according to Xinhua.

ORIGINAL POST: Surprisingly not anywhere near the NLL…

According to the New York Times:

North Korea  seized a South Korean fishing boat in waters near their eastern sea border, the South Korean Coast Guard said Sunday, straining already high tensions between the two Koreas.

The 41-ton squidding boat was believed to have been detained after entering the North’s exclusive economic zone, where foreign fishing boats are banned, the coast guard said in a statement.

Four South Koreans and three Chinese crew members were on board. South Korea’s national news agency, Yonhap, quoting an unnamed coast guard official, said that the ship was being towed to Songjin, a port on the eastern coast of North Korea, for interrogation of the crew.

“Our government hopes for the safe return of our ship and crew according to international laws,” the coast guard’s statement said.

…

The South Korean squid ship left Pohang, a port on the east coast of South Korea, on Aug. 1 and was scheduled to return to port on Sept. 10. It made its last daily radio report to the South Korean Coast Guard on Saturday evening.

UPDATE via the Washington Post:

According to one report in the South Korean media, the boat was operating in a maritime area shared by North Korea and Russia, about 160 miles off the North Korean coast.

Additional thoughts
1. Well it is probably a good thing there was a Chinese crew aboard the ship as this will make it difficult for the DPRK to claim the fishing vessel was attempting  espionage.  If Chinese fishermen can protect South Korean ships from DPRK espionage accusations we might be able to predict that an escalation in tensions between North and South Korea will result in increased employment of Chinese fishermen in the ROK….Chinese fishermen index?

2. Songjin is known in North Korea as Kimchaek.  See a satellite image of it here.

According to Naenara:

The Pyongyang International Insurance Seminar on “Marine Insurance & Reinsurance: the Challenges of the Time” ran between June 7 and 8, 2010.

Present at the seminar were Yang Hyong Sop, vice-president of the Presidium of the DPRK Supreme People’s Assembly, Pak Su Gil, vice-premier and minister of Finance, So Tong Myong, president of the Korea National Insurance Corporation (KNIC) and chairman of the organizing committee of the seminar, officials from the KNIC, insurance workers from the provinces and officials concerned.

Among those present were Ezzat Abdel-Bary, secretary general of the Federation of Afro-Asian Insurers and Reinsurers, and his party, Roberto Quinto Martinez, permanent secretariat of the Association of Insurance and Reinsurance in Developing Countries, delegates from companies of China, Morocco, Sudan, Switzerland, the United Arab Emirates, Britain, India and Egypt, officials of foreign embassies and missions of international organizations in the DPRK.

A delegation from the Kumgang Insurance Company of the General Association of Korean Residents in Japan was also present at the seminar.

The seminar heard papers on marine cargo insurance, marine cargo claims and adjustment—an overview, the art of adjusting catastrophe claims, new trend in the reinsurance market and other papers. Then speeches were made.

The seminar provided the participants with an opportunity to find a way out of instability in the field of insurance affected by the global financial crisis and let each country make an effective use of its own financial resources in the field of insurance and strengthen the international cooperation and exchange.

Unfortunately, when I hear the words “DPRK” and “insurance,” I think of this.

By Michael Rank

North Korea’s Air Koryo has begun twice-weekly direct flights between Shanghai and Pyongyang, a Chinese website reports.

The flights will run each Tuesday and Friday until October 5, leaving Shanghai at 1700 hours, arriving Pyongyang at 1950 and leaving Pyongyang at 1300 hours with the arrival time in Shanghai given rather vaguely as 16 hours.

It quotes the Korean Travel Agency as saying many Chinese [so-called] volunteers want to visit North Korea for the 60th anniversary of the Korean war, while August-October is the Arirang [Mass Games] season, so now is the time to come.

The report also says there is strong interest in visiting North Korea in eastern China around Shanghai, but it until now passengers had to change planes in Beijing or Shenyang which added to the cost and was inconvenient.

It says the first flight was on July 16 and gives the flight numbers as JS522/21. It also gives phone numbers, etc for tourists interested in booking a seat.

UPDATE: This story was picked up by the Financial Times (8/11/2010):

North Korea has offered the Czech Republic 20 tonnes of ginseng in lieu of payment for some of its debts.

However, Prague has turned down the deal, instead suggesting that Pyongyang pays in the valuable mineral zinc, which can be resold on international markets.

North Korea owes the Czech Republic $10m from the days when the Czech Republic was under communist rule and the two countries traded with each other regularly. Communist Czechoslovakia was a leading supplier of trucks, trams and machinery to North Korea, creating a large pile of debt.

Pyongyang reportedly offered $500,000 worth of ginseng, a root which is reputed to boost memory, stamina and libido, as a down payment.

However, consumption of ginseng in the European country is low, with just 1.4 tonnes used each year.

North Korea’s economy is struggling as international sanctions tighten and it hopes to be able to barter its way out of handing over valuable cash.

Non-cash transactions between socialist countries is common, with Cuba sending Venezuela doctors in exchange for discounted oil.

A Czech government spokesman has said that the countries were in negotiation over how the debt would be paid.

“We have been trying to convince them to send, for instance, a shipment of zinc,” the deputy finance minister told the MF Dnes newspaper.

ORIGINAL POST: According to the Korea Times:

North Korea has offered to pay its debt to the Czech government with ginseng, according to a local Czech daily newspaper.

MF DNES, a daily newspaper based in Prague, reported last Saturday that North Korea has recently suggested to the Czech Finance Ministry that it would pay 5 percent of its debt — approximately $500,000 — with ginseng.

“We are trying to persuade them (North Korea) to give us, for example a bulk of Zinc instead, so that we could sell it to someone else,” Tomas Zidek, deputy finance minister, told the newspaper in Czech.

North Korea is believed to have a significant amount of zinc in deposits.

The paper went on to say the consumption of ginseng in the Czech Republic is very small, and it only imported 1.4 tons last year. The amount of ginseng worth $500,000 will be roughly 400 tons, securing the supply for more than 200 years.

But, to Czech’s disappointment, North Korea seemed to have made up its mind, as it sent a delegation with samples of ginseng.

North Korea is known to be Czech’s 10th biggest debtor, which goes back to the communist governments. The North bought many trams and vehicles from former Czechoslovakia.

Read the full story here:
North Korea wants to pay back debt in ginseng
Korea Times
Kim Se-jeong
7/26/2010

UPDATE:  The Daily NK offers some more information:

North Korea has leased the rights to use Chongjin port to a Chinese firm, according to a Yonhap report released yesterday.

The report, citing an anonymous government official from Tumen in China’s far northeast, across the Tumen River from Namyang in North Hamkyung Province, said that the usage rights have been sold to a “Chinese state company, Yanbian Haihua Import-Export Trade Company.”

He predicted, “Yanbian Haihua Import-Export Trade Company will start shipping between Chongjin port and Busan by container ship in September, and will start shipments to southern regions of China soon.”

The anonymous official also revealed that North Korea has agreed to allow the Chinese company to use the railroad between Tumen and Chongjin as part of the deal. The deal, the official said, will “facilitate trade from Tumen,” and added that the Chinese company which inked it is planning to use it to fulfill shipping contracts with three other Chinese companies.

The Chinese company is reportedly investing 10 million Yuan ($1.48 million approx.) in shipping cranes and other construction at Chongjin, and is having 150 freight cars produced to add to 50 already sent.

The deal follows a similar one for the No. 1 dock at Rasun port, some 70km north of Chongjin. That deal, made after the visit to Pyongyang of Chinese Premier Wen Jiabao in October last year, gave the rights to the dock to another Chinese company, Chuangli Group.

ORIGINAL POST: According to Yonhap:

China has acquired the rights to use another one of North Korea’s northeastern ports, signaling deepening economic ties between the ideological allies, a Chinese official said Thursday.

China has used the North Korean port of Rajin in North Hamgyong Province for commercial trade since 2008. An official at the Tumen city government in northeast China said that a Chinese state company has now also obtained the rights to use the port of Chongjin, about 70 kilometers south of Rajin.

South Korea’s Unification Ministry, which handles North Korea affairs, said it could not immediately confirm the comments by the Chinese official, who spoke on condition of anonymity.

Since North Korean leader Kim Jong-il’s visit to Beijing earlier this year, the two countries have been strengthening their economic cooperation. China is the foremost ally of the cash-strapped North, which is under deepening sanctions for its nuclear testing.

The Chinese official also said in an interview with Yonhap News Agency that North Korea and China have also agreed to allow Chinese companies to use North Korea’s railways from Tumen to Chonjin.

The series of agreements would “facilitate trade from Tumen,” the official said, adding the Chinese company that struck the deal to use the port of Chongjin will use it to carry out shipping agreements with three Chinese companies.

Here is a map of the Rajin port showing which pier the Chinese are leasing.

Read the full story here:
China allowed to use another N. Korean port: official
Yonhap
7/22/2010

According to Breitbart (via Breitbart):

Former North Korean Railways Minister Kim Yong Sam was executed in March last year for failing to maintain locomotive trains that had been in store for wartime, Radio Free Asia, a nonprofit radio station, reported Wednesday on its Internet edition.

A source on North Korean affairs said Kim got into trouble during an inspection by the National Defense Commission for scrapping locomotive trains that were in store for wartime.

After the inspection, carried out after celebrations were held to mark the country’s 60th birthday on Sept. 9, 2008, Kim was handed over to the State Security Department, report said.

He had been railways minister for 10 years from September, 1998.

The Choson Ilbo has more:

A nationwide campaign is underway recently in North Korea to get rid of photos and publications of executed former senior officials, Radio Free Asia claimed Tuesday.

This campaign was ordered by leader Kim Jong-il on July 2. The North’s Press Censorship Bureau is reportedly destroying documents and materials collected from across the country.

According to RFA, the campaign’s targets include Pak Nam-gi, the former director of the North Korean Workers Party’s Planning and Finance Department who was executed in March over the disastrous currency reform, and former railways minister Kim Yong-sam.

“Railway workers suffering from the food shortage stole copper and aluminum parts from locomotive trains that were in store for wartime and sold them as scrap metal. As a result, about 100 locomotives were scrapped,” it claimed. “This was revealed in an inspection by the National Defense Commission in 2008.” Kim Yong-sam was then taken to the State Security Department and executed in March the following year, it added.

Kim Yong-sam was appointed railways minister in September 1998 but has not been seen in public since October 2008, when he was replaced by current minister Jon Kil-su.

A Unification Ministry official said rumors about his execution are “rampant.”

Read the full stories here:
Former N. Korean railways minister Kim Yong Sam executed: report
Kyodo (via Breitbart)
7/14/2010

N.Korea’s Ex-Railways Minister Executed
Choson Ilbo
7/15/2010

According to the Irrawaddy:

A recent New York Times op-ed article by Aung Lynn Htut, formerly a high-ranking Burmese military intelligence officer who defected in 2005 while he served as an attaché at the Burmese embassy in Washington, shed new light on the history of the still murky relationship between Burma and North Korea, two of the world’s most isolated, secretive and oppressive regimes.

Burma broke diplomatic relations with North Korea in 1983, when North Korean agents attempted to assassinate the South Korean president on Burmese soil. But according to Aung Lynn Htut, shortly after current junta-chief Snr-Gen Than Shwe assumed power in 1992, he surreptitiously moved to renew ties with Pyongyang.

“Than Shwe secretly made contact with Pyongyang. Posing as South Korean businessmen, North Korean weapon experts began arriving in Burma. I remember these visitors. They were given special treatment at the Rangoon airport,” Aung Lynn Htut said in his June 18 article.

The junta kept its renewed ties with North Korea secret for more than a decade because it was working to establish relationships with Japanese and South Korean businesses, Aung Lynn Htut said. By 2006, however, “the junta’s generals felt either desperate or confident enough to publicly resume diplomatic relations with North Korea.” 

In November 2008, the junta’s No 3, Gen Shwe Mann, visited North Korea and signed a memorandum of understanding, officially formalizing military cooperation between Burma and North Korea. Photographs showed him touring secret tunnel complexes built into the sides of mountains thought to store and protect jet aircraft, missiles, tanks and nuclear and chemical weapons.

According to Aung Lynn Htut, Lt-Gen Tin Aye, the No.5 in the Burma armed forces and the chief of Military Ordnance, is now the main liaison in the relationship with Pyongyang. Tin Aye has often traveled to North Korea as well as attended ceremonies at the North Korean embassy in Rangoon.

In September 2009, The New Light of Myanmar reported that Tin Aye went to the anniversary celebration of the Democratic People’s Republic of Korea (DPRK), held in a hotel in Rangoon. In February, Tin Aye, along with other senior officials, attended the birthday event of the Dear Leader of North Korea at the embassy.

Flights and ships from North Korea to Burma have been carrying more than just Burmese generals. Analysts, including Burma military expert Andrew Selth, say that for years Burma and North Korea have used a barter system whereby Burma exchanges primary products for North Korean military technologies.

In June 2009, a North Korean ship, the Kang Nam I, was diverted from going to Burma after being trailed by the US navy. Then in April, another North Korean ship, the Chong Gen, docked in Burma carrying suspicious cargo, allegedly in violation of the UN Security Council Resolution 1874, which restricts North Korea from arms deals and from trading in technology that could be used for nuclear weapons.

In May, the seven-member UN panel monitoring the implementation of sanctions against North Korea said in a report that Pyongyang is involved in banned nuclear and ballistic activities in Iran, Syria and Burma with the aid of front companies around the world.

According to the UN report, a North Korean company, Namchongang Trading, which is known to be associated with illicit procurement for Burma’s nuclear and military program and is on the US sanctions list, was involved in suspicious activities in Burma.

The report also noted three individuals were arrested in Japan in 2009 for attempting to illegally export a magnetometer—a dual-use instrument that can be employed in making missile control system magnets and gas centrifuge magnets—to Burma via Malaysia allegedly under the direction of another company known to be associated with illicit procurement for North Korea’s nuclear and military programs.

The UN experts also said that the Korea Kwangson Banking Corporation has handled several transactions involving millions of dollars directly related to deals between Burma and the Korea Mining Development Trading Corporation.
 
With this string of events and the suspicions surrounding them as a dramatic lead in, on June 4, Al Jazeera aired a news documentary prepared by the Democratic Voice of Burma (DVB) which was written by Robert Kelley, a nuclear scientist and former director of the International Atomic Energy Agency (IAEA). The DVB report claimed that the ruling military junta in Burma is “mining uranium, converting it to uranium compounds for reactors and bombs, and is trying to build a reactor and/or an enrichment plant that could only be useful for a bomb.”

The IAEA wrote to Burma’s agency representative, Tin Win, on June 14 and asked whether the information provided in the DVB report was true. Burma, which is a member of the IAEA, a party to the Nuclear Non-Proliferation Treaty and a signatory to the Southeast Asia Nuclear-Weapon-Free Zone Treaty, responded with a letter stating that the DVB report allegations are “groundless and unfounded.”

“No activity related to uranium conversion, enrichment, reactor construction or operation has been carried out in the past, is ongoing or is planned for the future in Myanmar [Burma],” the letter said.

The letter also noted that Burma is a signatory of the Nuclear Non-Proliferation Treaty and the agency’s so-called safeguards agreement. “As stated in the safeguards agreement, Myanmar will notify the agency if it plans to carry out any nuclear activities,” the letter said.

The regime, however, has not signed the IAEA’s Additional Protocol, meaning that the agency has no power to set up an inspection of Burma’s nuclear facilities under the existing mechanism known as the Small Quantities Protocol.

Previously, on June 11, Burma’s state radio and television news had reported the Foreign Ministry’s denial of the allegations in the DVB report. The denial claimed that anti-government groups in collusion with the media had launched the allegations with the goal of “hindering Burma’s democratic process and to tarnish the political image of the government.”

The Foreign Ministry denial also addressed Nyapyidaw’s relationship with Pyongyang. “Following the re-establishment of diplomatic relations, Myanmar [Burma] and the DPRK, as independent sovereign states, have been engaging in promoting trade and cooperation between the two countries in the same way Myanmar is dealing with others,” the ministry said in its statement.

The regime did acknowledge that the Chong Gen docked at Thilawa Port near Rangoon in April. But the statement said the North Korean vessel was involved in importing cement from North Korea and exporting rice from Burma.

But in an article for Asia Times online, Burma analyst Bertil Linter noted that, “if carrying only innocuous civilian goods, as the statement maintains, there would seemingly have been no reason for authorities to cut electricity around the area when the Chong Gen, a North Korean ship flying the Mongolian flag of convenience, docked on the outskirts of Yangon.”

“According to intelligence sources, security was tight as military personnel offloaded heavy material, including Korean-made air defense radars. The ship left the port with a return cargo of rice and sugar, which could mean that it was, at least in part, a barter deal. On January 31 this year, another North Korean ship, the Yang M V Han A, reportedly delivered missile components also at Yangon’s Thilawa port,” Linter said.

Strategypage.com, a military affairs website covering armed forces worldwide, said, “Indications are that the North Korean ship that delivered a mysterious cargo four months ago, was carrying air defense radars (which are now being placed on hills up north) and ballistic missile manufacturing equipment. Dozens of North Korean technicians have entered the country in the last few months, and have been seen working at a military facility outside Mandalay. It’s unclear what this is for. Burma has no external enemies, and ballistic missiles are of no use against internal opposition.”

In his Asia Times online story, Lintner noted that on June 24, the DVB reported that a new radar and missile base had been completed near Mohnyin in Myanmar’s northern Kachin State, and he reported that work on similar radar and missile bases has been reported from Kengtung in eastern Shan State,160 kilometers north of the Thai border town of Mae Sai.

“Since Myanmar is not known to have imported radars and missile components from any country other than North Korea, the installations would appear to be one of the first visible outcomes of a decade of military cooperation,” Lintner said.

Lintner also reported that Western intelligence sources know that 30 to 40 North Korean missile technicians are currently working at a facility near Minhla on the Irrawaddy River in Magwe Division, and that some of the technicians may have arrived overland by bus from China to give the appearance of being Chinese tourists. 

North Korea has also issued adamant denials with respect to allegations regarding its relationship with Burma.

According to the Korean Central News Agency (KCNA), on June 21 Pyongyang said, “The US is now making much fuss, floating the sheer fiction that the DPRK is helping Myanmar [Burma] in its nuclear development.”

The KCNA often highlights the close relationship between North Korea and Burma.

On June 20, the Pyongyang news agency reported that ex-Col Than Tun, deputy chairman of the Union of Myanmar Economic Holding Ltd., sent a statement cheering Kim Jong Il’s 46th anniversary at the Central Committee of the ruling Workers’ Party of Korea.

On April 18, Korean state-run- media reported that Than Tun also issued a statement cheering the 17th anniversary of Kim Jong Il’s chairing of North Korea’s National Defense Commission.

“Kim Jong Il’s field inspection of KPA [Korean People’s Army] units served as a main source that helped bolster [North Korea’s] self-reliant defense capability in every way,” the statement noted.

Military sources said the Union of Myanmar Economic Holding Ltd, managed by the junta, is responsible for purchasing imported weapons for Burma’s armed forces, including transferring money to overseas banks such as Korea Kwangson Banking Corporation.

Meanwhile, in addition to its escalating relationship with North Korea, the Burmese military regime has recently boosted ties with Iran, which according to the UN report is also allegedly receiving nuclear and missile technologies from North Korea.

In recent years, Burmese and Iranian officials visited their counterparts homeland for the purported purpose of improving economic ties. Observers, however, said Than Shwe has made a tactical decision to develop relationships with other “pariah states,” particularly enemies of the US, to relieve Western pressure on his regime.

Iranian Deputy Foreign Minister Mohammad Ali Fathollahi met Burmese Foreign Minister Nyan Win and Minister of Energy Lun Thi during his trip to Burma on June 15-17.

“The two sides reiterated their desire to further expand the ties of friendship and economic cooperation and to increase cooperation in the regional international forums such as [the] United Nations and Non-Aligned Movement,” The New Light of Myanmar reported on June 18.

Fathollahi’s visit came three months after Maung Myint’s visit to Iran on March 8-11, when he met Iranian Foreign Minister Manochehr Mottaki and Deputy Minister of Petroleum H. Noghrehkar Shirazi.

Read the full story below:
Burma-North Korea Ties: Escalating Over Two Decades
Irrawaddy
Wai Moe
7/7/2010