North Korean Economy Watch

Today Kim Jong il’s trains and train stations were big news.  According to the Choson Ilbo:

When Kim travels, three separate trains operate in conjunction. The advance train handles security checks to see whether the rail tracks are safe. Behind Kim’s train is another carrying his bodyguards and other support personnel. Kim’s train travels at an average speed of 60 km/h. Around 100 security agents are sent ahead of time to stations and sweep the area for bombs. Before Kim’s train nears the station, the power on other tracks is shut off so that no other trains can move.

Kim’s train is armored and also contains conference rooms, an audience chamber and bedrooms. Satellite phone connections and flat screen TVs have been installed so that the North Korean leader can be briefed and issue orders.

Sources say when Kim gets out of his train and moves to his private retreat, he is driven in a Mercedes or other car that has been brought along. When Kim travels within North Korea aboard his private train, IL-76 air force transport planes, MI-17 helicopters and other aircraft provide security support and haul necessary personnel and equipment to nearby airports. So far, Kim has taken 129 on-the-spot guidance trips around North Korea, matching the record he set in 2005 and probably exceeding it by the end of the year.

Since I have already mapped out the North Korean railway system, I can offer links to satellite images of many of KJI’s personal train stations and other elite stations: Pyongyang (Ryongsong), Pyongyang (Ryongsong underground), Pyongyang (Ryongsong-original), Pyongyang (Hyongjesan), Wonsan, Sinuiju, Hyesan 1, Hyesan 2, Kanggye, Yongphung-ri, Myohyangsan 1, Myohangsan 2, Sakju 1(old imagery), Taegwon, Kyongsong 1, Kyongsong 2, Hungnam 1, Hungnam 2, and Sinchon. These are not necessarily the 20 stations cited in the above article, but the remainder are probably underground or not visible with Google Earth imagery.

Institute for Far Eastern Studies (IFES)
NK Brief No. 09-10-26-1
10/26/2009

Companies in the Kaesong Industrial Complex (KIC) are pushing for permission to transport goods manufactured within the complex along the railway running from Kaesong to Sinuiju and the highways connecting Kaesong, Pyongyang, Sinuiju and the Chinese city of Dandong.

Currently, the majority of goods exported from the KIC flow through the South Korean port of Incheon. They are then distributed elsewhere after arriving at the Chinese port of Dalian. This route is expensive and slow. Shipping by sea costs 1,900 USD per container and takes as many as 10 days, while if the railway infrastructure was built up between Kaesong and Sinuiju, both the cost and the time could be significantly reduced.

Seventeen percent of Kaesong goods are exported not only to China, but to Europe, the Middle East and Russia. In the mid- to long-term, Kaesong needs to be connected with Rajin-Sunbong, so that goods can be distributed throughout Russia and Europe via the Trans-Siberian Railway. In order to make this happen, companies within the KIC are seeking to attract foreign joint-ventures and investments while at the same time lobbying North Korean authorities in an effort to convince them of the need for such land transportation infrastructure.

These companies are also pushing for improvements in the highway spanning the 160 km between the KIC and Pyongyang and the injection of KIC goods into the Pyongyang markets, where they could compete with Chinese imports. One part of this effort is promoting the attachment of ‘Made In DPRK’ labels to goods produced in these factories.

It appears that North Korean authorities have been receptive to these ideas, but questions still remain on the logistics of the project. One source has said that the North Korean Central Special Direct General Bureau has shown interest recently in the idea of including KIC goods in the annual Pyongyang International Trade Fair.

On the one hand, the number of North Korean workers in the KIC has now topped 40,000; but on the other hand, given the number and size of the factories in the complex, the factories are about 26,000 workers short of full capacity. The effort to find suitable workers means that now people from Sariwon, Pyongyang and Hamheung have been brought in. Companies in the KIC are adamant that construction of dormitories in the complex needs to be sped up. At the same time, North Korean authorities are demanding that workers be paid according to their level of education, job description, and experience.

For the first time in 13 months, trade between the two Koreas began to rise again. In September 2009, inter-Korean trade amounted to 173.17 million USD, a 2.6 percent rise over the 166.86 million USD recorded in 2008. The economy has shown signs of recovery since last July, and as inter-Korean relations have inched toward improvement, trade has also risen.

Photo by Eric Lafforgue

North Korean claims record production gains through ‘150-day battle’
Institute for Far Eastern Studies (IFES)
NK Brief No. 09-10-12-1
10/12/2009

It has been boasted that North Korea’s ‘150-day Battle’ to boost the economy (April 20-September 16) resulted in record-breaking jumps in DPRK production numbers, and it has been suggested that that by 2012, some enterprises will “attain production numbers higher than the best numbers recorded at the end of the 1980s.” This claim was made by Ji Young-il, the director of the Chosun University Social Science Research Institute, which is run by the pro-Pyongyang “General Federation of Korean Residents in Japan.”

In “Professor Ji Young-il’s Monthly Economic Review: The 150-day Battle and Prospects for Building an Economically Powerful Nation,” an article in the federation’s newspaper, Choson Sinbo, the author wrote, “There are more than a few enterprises that have set production goals for 2012 at more than three times the current level of production.” He also claimed that some enterprises in the mining, energy and railroad transportation sectors had set goals of as much as 6 times today’s production numbers.

Professor Ji went on to write, “Basically, it is an extraordinary goal ensuring growth of 1.3-1.5 times (a growth rate of 130-150%) per year.” He also explained that surpassing production rates as high as those seen in the late 1980s is one of the fundamental markers on the road toward “opening the door to a Strong and Prosperous Nation.”

Citing North Korea’s “Choson Central Yearbook,” he gave production numbers in various sectors of the DPRK economy at the end of the 1980s: electricity, 55.5 billion kWh (1989); coal, 85 million tons (1989); steel, 7.4 million tons (1987); cement, 13.5 million tons (1989); chemical fertilizer, 5.6 million tons (1989); textiles, 870 million meters (1989); grain, 10 million tons (1987).

Director Ji claimed that during the recent ‘battle’, production in the metals industries was up several times that of the same period in previous years, while energy producers generated several hundred million kWh of electricity, coal production was up 150%, and cement and other construction materials were up 140%. He pointed out that in 14 years of the Chollima movement, beginning in 1957, during which socialist industrialization took place in the North, the yearly average production growth was 19.1%, and he stated that the annual growth of 9 to 10% in industrial production over the past several years was a noteworthy record.

Moving to the agricultural sector, Director Ji also noted that while overseas experts have critiqued this year’s harvest, there has been a definite breakthrough in grain production with land cultivation hitting previously unseen levels over the past several years.

Previous 150-day battle stories below:
(more…)

July 1, 2009
Download the full report here. Download other CRS reports here.

Summary: The United Nations Security Council unanimously passed Res. 1874 on June 12, 2009, in response to North Korea’s second nuclear test. The resolution puts in place a series of sanctionson North Korea’s arms sales, luxury goods, and financial transactions related to its weapons programs, and calls upon states to inspect North Korean vessels suspected of carrying such shipments. The resolution does allow for shipments of food and nonmilitary goods. As was the case with an earlier U.N. resolution, 1718, that was passed in October 2006 after North Korea’s first nuclear test, Res. 1874 seeks to curb financial benefits that go to North Korea’s regime and its weapons program. This report summarizes and analyzes Res. 1874.

On the surface, financial sanctions aimed solely at the Democratic People’s Republic of Korea (DPRK, the official name of North Korea) and its prohibited activities are not likely to have a large monetary effect. Governments will have to interpret the financial sanctions ban of the resolution liberally in order to apply sanctions to the bank accounts of North Korean trading corporations. A key to its success will be the extent to which China, North Korea’s most important economic partner, implements the resolution. In summary, the economic effect of Resolution 1874 is not likely to be great unless China cooperates extensively and goes beyond the requirements of the resolution and/or the specific financial sanctions cause a ripple effect that causes financial institutions to avoid being “tainted” by handling any DPRK transaction. A ban on luxury goods will only be effective if China begins to deny North Korea lucrative trade credits.

Provisions for inspection of banned cargo on aircraft and sea vessels rely on the acquiescence of the shipping state. In the case of North Korean vessels, it is highly unlikely that they would submit to searches. Resolution 1874 is vague about how its air cargo provisions are to be implemented, in contrast to the specific procedures set forth regarding inspecting sea-borne cargo. While procedures are specified for sea interdictions, the authority given is ambiguous and optional. Further, DPRK trade in small arms and ammunition is relatively insignificant, and therefore the ban on those exports is unlikely to have a great impact.

UPDATE 2: Last month, South Korea seized a North Korean shipment to Syria which contained hazmat suits “to guard against nuclear, biological or chemical infection”. The four containers that were confiscated in Busan contained the Russian-made suits (or North Korean-made but copied from Russian designs). The report’s lead says that the items were related to chemical weapons, but the rest of the report doesn’t explain why it believes it was chemical-related and not biological or nuclear.

UPDATE 1:  South Korea also searched containers shipped by the DPRK on a Panamanian ship.  According to Yonhap:

South Korea confiscated and searched containers shipped by North Korea on a Panama-registered freighter last month but reportedly found no suspicious cargo, according to sources Monday.

The National Intelligence Service (NIS) and relevant authorities on Sept. 22 ordered an inspection of the ship docked in the southeastern port of Busan and searched the four containers, a government official said, requesting anonymity.

The official said authorities found some kind of protective clothing but did not elaborate further.

A port official in Busan also confirmed that the NIS ordered the search, saying it received tips that the containers could be carrying hazardous material. The ship carrying the containers had arrived from China last month.

“Nothing particular was discovered from the search, but I’m aware that the government is still in the process of confirming the results,” the port official said, refusing to elaborate.

ORIGINAL POST: Last August the Indian government detained and searched a North Koren vessel that was anchored in Indian waters.  This week, the Indian government stopped and searched a second vessel anchored in Indian waters.  According to the Telegraph (of India):

The Indian Coast Guard detained a North Korean vessel for the second time in two months but gave the all-clear to the ship found anchored without permission off the Kerala coast today.

A spokesperson for the navy and the Coast Guard, Commander Roy Francis, said the Hyangro was found stationary in Indian waters when it was supposed to be sailing to Karachi, Pakistan. Coast Guard and naval personnel boarded the ship but found it was carrying no cargo.

The Hyangro was surrounded by two Coast Guard vessels and a naval warship after fishermen reported its presence to the authorities.

The captain of the ship told the investigators he had dropped anchor “because of technical problems in the ship’s tanks that were leaking”. The ship had last made port in Colombo. It is owned by the Pyongyang-based Sinhung Shipping Company.

A navy source in Delhi said later this evening that the crew of the Hyangro had been cleared after questioning. The entire crew of 44 was North Korean.

A UN resolution empowers member countries to inspect North Korean cargo being transported by sea, land or air.

More here.

Read the full article here:
North Korea ship
The Telegraph (of India)
10/4/2009

Movies:

Shiny Morning (part 1)

Shiny Morning (Part 2)

Cartoon- A Kum Rang

Creepy

KFA:
Also, Alejandro Cao de Benos has published his own book in Thailand.  According to the KFA web page the book, Korea, the Songun Citadel, was recently published in Bangkok, Thailand. With 148 pages and first edition of 500 volumes.

I am not sure when volume 2 of 500 will be published.

AIR KORYO:
And finally, Skytrax has ranked Air Koryo as the world’s only 1-star airline.

UPDATE: According to Yonhap, Chinese and Australian ships were shipping the arms:

North Korean cargo carrying arms exports to Iran left a western port five days after Pyongyang’s nuclear test in May and was transferred aboard Chinese and Australian freighters before being seized by the United Arab Emirates (UAE) in July, according to an Italian company that handled the delivery.

Mario Carniglia, head of the international freight-forwarding firm Otim, said the containers, reportedly loaded with rocket launchers, detonators, and munitions, were shipped via the Chinese cities of Dalian and Shanghai and were transferred to an Australian vessel just after the U.N. Security Council adopted Resolution 1874 which bans the North from engaging in arms trade.

“(The containers) left the Nampo Port on May 30,” he said in a recent interview with Yonhap News Agency in Rome on Wednesday. A North Korean ship carrying the 10 containers arrived in Dalian two days later and a Chinese cargo ship moved them to Shanghai on June 13, he said.

“The containers were placed on (the Australian freighter) ANL-Australia in Shanghai,” he said, flipping through related documents.

The cargo was on its scheduled course until the UAE intercepted the ANL-Australia on July 22. The U.S. Navy had been focusing on trailing another North Korean vessel, the Kangnam 1, which appeared to be headed to Myanmar also carrying weapons exports.

The seizure was the first made under Resolution 1874 that calls upon all states to inspect cargo to and from North Korea if they have “information that provides reasonable grounds to believe the cargo contains” illicit weapons.

The Australian government said earlier, based on its own probe, that there were rocket-propelled grenades and other weapons in the seized containers, though Carniglia said his firm did not know the contents of the cargo.

He said North Korea provided documents identifying the content as “Oil Pumping Equipment.”

“We couldn’t see the contents as the containers were sealed when shipped from Nampo,” he said in the interview conducted in Italian. He refused to identify the exporter in North Korea, citing business ethics.

“All we were responsible for was handling the shipping from China to Iran,” Carniglia said.

He added that North Korea has not filed a complaint or asked for the return of the cargo, held at the UAE now for more than 50 days.

The UAE is reportedly in consultation with the U.N. sanctions committee on how to handle the seized shipment.

In a related move, the U.N. committee demanded an explanation from North Korea last month for the apparent arms export attempt.

The head of the North’s mission to the U.N., Sin Son-ho, sent a reply letter reiterating his country’s position that it is not bound by any U.N. resolution.

Sin also said that North Korea’s experimental uranium enrichment program is in a “completion phase,” claiming the country has made advancements in mastering an alternative route to producing nuclear weapons apart from its plutonium-based program.

ORIGINAL POST: According to Bloomberg:

The United Arab Emirates has seized a ship carrying North Korean-manufactured munitions, detonators, explosives and rocket-propelled grenades bound for Iran in violation of United Nations sanctions, diplomats said.

The UAE two weeks ago notified the UN Security Council of the seizure, according to the diplomats, who spoke on condition they aren’t named because the communication hasn’t been made public. They said the ship, owned by an Australian subsidiary of a French company and sailing under a Bahamian flag, was carrying 10 containers of arms disguised as oil equipment.

The council committee that monitors enforcement of UN sanctions against North Korea wrote letters to Iran and the government in Pyongyang asking for explanations of the violation, and one to the UAE expressing appreciation for the cooperation, the envoys said. No response has been received and the UAE has unloaded the cargo, they said.

…

he Security Council voted on June 12 to adopt a resolution that punishes North Korea for its recent nuclear-bomb test and missile launches through cargo inspections and enforcement of restrictions on financial transactions. The measure calls for the interdiction at seaports, airports or in international waters of any cargo suspected of containing arms or nuclear or missile-related materials going to or from North Korea.

According to the Wall Street Journal:

According to the Security Council diplomat, the weapons were carried on an Australian vessel, the ANL-Australia, which was flying under a Bahamian flag. According to an Aug. 14 letter sent to the U.N. sanctions committee, the exporting company was an Italian shipper, Otim, which exported the items from its Shanghai office.

“The cargo manifest said the shipment contained oil-boring machines, but then you opened it up and there were these items,” the diplomat said. ANL and Otim officials couldn’t immediately be reached to comment.

…

A spokeswoman for the Australian Department of Foreign Affairs and Trade said the Australian government is aware of the incident and is investigating to determine whether any Australian laws may have been broken.

The seizure could also raise fresh questions about North Korea’s intentions. After taking an aggressive stance against the West earlier this year, Pyongyang appears to have softened its rhetoric, releasing two captive American journalists and sending a delegation to meet with South Korea’s president.

Read more here:
UAE Seizes North Korean Weapons Shipment to Iran
Bloomberg
Bill Varner
8/28/2009

Cargo of North Korea Matériel Is Seized en Route to Iran
Wall Street Journal
Peter Spiegel and Chip Cummins
8/29/2009

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

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

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

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

(click for larger version)

Traffic Control Platform beneath Umbrella Installed at Intersections of Pyongyang

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

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

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

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

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

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

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

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

Image from Military Photos

UPDATE: According to the Telegraph (of India):

But it transpired later that the management of the shipping company had asked the Mu San to loiter in Indian waters because they might get a better price for their cargo in India.

UPDATE:  The boat has been moved to yet another port for further inspection: Kakinada in Andhra Pradesh state.  Here is the location in Wikimpia.

ORIGINAL POST: This week there was a worry that another North Korean ship might be carrying military goods to Myanmar in violation of UN sanctions.  Despite the strange behavior of the North Korean crew, the ship appears to be shipping sugar to Iraq!

First–the chase (According to the New York Times):

The ship anchored without authorization in the Andaman and Nicobar Islands, a territory of India in the Bay of Bengal, last week, according to the Indian military.

Indian officials said it was carrying more than 16,000 tons of sugar bound for the Middle East. But the ship’s proximity to Myanmar, a North Korean ally, and the fact that it had no apparent reason to be in the area raised suspicions.

The coast guard intercepted the ship after chasing it for six hours, and detained 39 North Korean crew members.

After two days of searching and of questioning the crew, India’s Navy and Coast Guard handed the ship over to police and intelligence services, having found no evidence of illegal cargo, according to the Press Trust of India.

Ashok Chand, a senior police officer in the Andaman and Nicobar Islands, told Reuters that further tests were being conducted.

But it remains a mystery why the ship was in Indian waters at all.

India has watched warily for signs that North Korea is helping Myanmar build a nuclear reactor.

The investigation turned up some strange detials, but no UN violations.  According to UPI:

A preliminary search showed the ship, as stated by its captain, was transporting 16,000 tons of sugar from Thailand to Iraq, Indian media reports said.

The ship, M.V. Mu San is detained at Port Blair after dropping anchor without authorization off Hut Bay in the Andaman and Nicobar Islands in the Bay of Bengal Wednesday.

Mu San sailed off Thailand’s Laem Chabang port July 27 but an investigation showed it berthed in Singapore three days later, although that was not a port of call, and that the crew’s passports were not stamped in Singapore, the Times of India reported.

The report said authorities were interrogating the ship’s captain Yon Jung-sun and the other 38-member crew, with only one or two among them speaking English.

Further information:

1. Here is a great research paper on the DPRK’s merchant fleet.

2. Here are some stats on the DPRK’s flagged fleet from the CIA.

3. Here is the location of Hut Bay, where the ship was anchored.

4. Here is the location of Port Blair, where the ship was taken.

Read the full artilces here:
India searches North Korean ship
UPI
8/9/2009

N. Korean Ship Searched for Radioactive Material
New York Times
Lydia Polgreen
8/10/2009