North Korean Economy Watch

North Korea Uncovered v.16
Download it here

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

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

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

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

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

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

Radio Free Asia
Jung Young
3/10/2009

See also: Daily NK 2007, NK goes after busses

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

UPDATE:  Hat tip to Stafford who provides a link to the Henley Visa Restrictions Index.

ORIGINAL POST: (Hat tip to Will Wilkinson)  How many countries can you visit on your passport without obtaining a visa?  According to a recent table compiled by The Economist, Denmark, Germany, and the USA offer the most opportunities.   According to the story, “South Koreans could visit 144 countries, whereas North Koreans could visit just 29 countries—if only their government would let them out.”

Below is the table taken from The Economist. 

This week, Paul Eckert of Reuters informs us of an interesting study by Hazel Smith, titled, North Korean Shipping: A Potential for WMD Proliferation?.

According to the Reuters article:

British North Korea expert Hazel Smith said her detailed study of North Korean merchant shipping showed a fleet of only 242 aging vessels faces too much scrutiny in the world’s ports to be a significant conduit for weapons of mass destruction.

“We can’t really find very much hard evidence of North Korean ships involved in smuggling WMD or components of WMD,” Smith, of Cranfield University, told a Washington meeting of think tank East-West Center.

The weapons of mass destruction trade North Korea conducts, such as missile sales to Iran or Pakistan, is more likely moved by aircraft or allied vessels than on highly suspect North Korean-owned or -flagged ships, her report said.

Her findings, based on tracking ship movements using Lloyds Shipping Register and other insurance databases, call into question the efficacy of the Proliferation Security Initiative, a U.S.-led network of countries launched in 2003 to stop illicit weapons of mass destruction shipments because that effort focuses on shipping, she said.

Anti-proliferation efforts should instead focus on strengthening port controls and negotiating North Korean entry into international arms control treaties as part of a broader disarmament diplomacy with Pyongyang, Smith said.

HIGHLY SUSPECT SHIPS

North Korea’s fragmented merchant shipping industry has only a handful of directly state- or provincial-owned vessels, with most run by small owner operators, who lost state subsidies in the early 1990s, said the study.

With underpaid seamen, dilapidated vessels and dire cash and food shortages in North Korea, “it wouldn’t be surprising if crew and management would grasp opportunities to earn cash on the side from port calls,” Smith told the East-West Center, which published her report.

But even countries friendly toward North Korea such as China, Russia and Vietnam impose strict inspections on North Korean merchant ships, which are frequently stopped and even detained for serious safety violations, said the report.

In four publicly known cases between 1992-2003 in which North Korean vessels were stopped on suspicion of shipping WMD components or chemicals, none were prosecuted because the cargo was either undetermined, legal or “dual-use,” with legal applications Smith said.

You can download a PDF version of Prof. Smith’s paper here.  Below is the abstract:

The possibility that North Korean ships may be smuggling weapons of mass destruction is a matter of intense concern in the Asia Pacific region and beyond. The few reported incidents of North Korean ships involved in WMD transport are ambiguous; some ships have been engaged in legal weapons trade and some carried “dual-use” goods suitable for use in nonmilitary applications, like agriculture. Ownership of the North Korean merchant fleet is largely private and highly fragmented; most of its ships are small, old, and in poor repair, and are often subject to rigorous scrutiny in foreign ports. The inability of the government to effectively regulate the low-cost, substandard shipping industry creates the risk and incentives to smuggle goods, including WMD. Anti-proliferation efforts should abandon the divisive and unsuccessful Proliferation Security Initiative and concentrate on negotiating North Korea’s entry into international arms control treaties, maintain stringent port controls, and negotiate technical assistance to reduce the vulnerability of the North Korean shipping industry.

You can listen to an interview with Hazel Smith here.

Read the full article here:
N.Korea ships smuggle goods, but not WMDs: report
Reuters  (Via Washington Post)
Paul Eckert
3/5/2009

According to this report in the London Times:

International passenger flights have been diverted after the government of North Korea threatened military action against South Korean airliners in the latest escalation of verbal hostilities between the two enemies.

Both of South Korea’s airlines, Korean Air and Asiana, have diverted flights from the east after a statement on North Korea’s official media which implied a threat of attack against civilian aviation. It came in a statement denouncing a joint military exercise between South Korea and the US, which Pyongyang accuses of representing preparations for an invasion of the North.

Under an international agreement, North Korea receives €685 (£610) for each jumbo jet which passes through its airspace, but flights were diverted after yesterday’s warning, adding as much as an hour to flight times and costing airlines an extra four million won (£1,800) per flight.

Read the full article here:
Passenger flights diverted after North Korea threats
Times of London
Richard Lloyd Parry
3/6/2009

The Institute for Far Eastern Studies (IFES) published an interesting paper (with the above title) on legal reform in the DPRK.  Below are some highlights.  Links to the entire paper at the bottom.

As citizens have been left without state provisions for subsistence since the state did not have the material resources to supply the people through its central rationing system, the vast majority of individuals and organizations had to support themselves. Legitimizing commercial and market activity and expanding the scope of private ownership were a part of this effort. One of the most important laws reflecting this transformation is the Damage Compensation Law (sonhae bosang-beop), which is the North Korean version of a general torts law. This law holds an individual or any legal entity liable for its tort when damage is inflicted. Monetary compensation is the rule, while restoration is allowed when possible.

Under the socialist system, where the state is responsible for the provision of a citizen’s livelihood, tort law was of little use. Even in the case of death, one’s family would not suffer economically since the state provided sustenance rations. However, with the collapse of the public distribution system, the North Korean authorities could no longer maintain their socialist system. Since an individual now has to rely on his or her own devices, the loss of the employment, for example, directly inflicts a financial burden on the individual or family. Therefore, damage to property or person should be compensated for by the responsible party. Therefore, the new damage compensation law acts as a new mechanism for the protection of private property, and strengthens individual responsibility for negligent acts that inflict damage on others.

and…

Relaxation of law and order, along with the laxity of organizational control due to economic difficulties, changed individual attitudes toward government authorities and organizations in which these individuals were members. Individuals became more independent from the state and its organizations, since both the state and more directly engaged organizations lost important means of control over individuals in society due to the lack of resources and the inability to provide basic necessities to the people.

Under these circumstances, individual victims had no appropriate method to seek compensation for damage through an official dispute resolution process. This has led to an environment in which self-remedy has become the rule, rather than the exception. Although new criminal law punishes those who have used force in asserting their rights, there is no effective means of dispute resolution outside of taking advantage of officials willing to look the other way in exchange for favors, or hiring thugs to more directly resolve disagreements. Citizens can buy justice through bribes, and law enforcement officials are especially helpful in these endeavors when their palms are greased. This is much more economical as well as effective than bringing a case to the relevant official agency, which is generally incapable of resolving problems and instead further exploits the situation.

On courts and lawyers…

For example, the most prominent role of the court in North Korea, where other types of lawsuit are very unusual, was to handle divorce settlements, since divorce through simple agreement of the two parties was not allowed. Ordinary citizens went so far as to perceive settlement of divorce to be the most important role of the court. Criminal cases were also unusual. Political crime is handled through a non-judicial process, while many deviances are resolved through unofficial processes within more local organizations. The role of the court in resolving disputes was negligible, aside from divorce. Since the role of law enforcement agencies is to protect the state and secure the socialist system, the most important qualification for them is not legal expertise, but rather, loyalty and devotion to the North Korean ideology and system.

On the other hand, the Lawyer’s Act of 1993 prescribes the required qualifications of a lawyer. Those who are eligible to work as lawyers are those who are certified legal professionals, those who have working experience of no less than 5 years in legal affairs, or those who have a professional license in a certain area and have passed the bar examination after a short-term course in legal education. This qualification for working as a lawyer signifies that the state wants to equip the judicial system with legal professionals. Although there is no explicit professional qualification for a judge or prosecutor, we may assume that legal professionals have been elected or recruited in practice. This trend is likely to be reinforced as these social changes continue to unfold.

New provisions were also introduced to reinforce the judicial system. For example, interference with a law enforcement official’s performance of duties is now a punishable offence ; Threatening a witness or exacting revenge has been criminalized ; Non-execution of judgment will now be punished. Although the introduction of these provisions was an expression of the government’s effort to bring in a more effective judicial system, it would not be an easy task under the vague status of transformation. The state is very cautious and reluctant to undertake bold or fundamental changes due to concerns about political instability. Therefore, it takes time for various coherent mechanisms to fully support a market system.

You can download the entire paper in PDF format here.

You can read it on the IFES web page here.

Kim Jong Nam, Kim Jong il’s eldest son (and a “nice” guy I am told), has recently been fairly amenable to speaking to foreign journalists—in English—about developments in the DPRK.  He has largely avoided giving much away except that he is not interested in succeeding his father—who is healthy.

Here is a video interview of KJN at Beijing Capital Airport where he boarded another plane to Macau. (Is Air Koryo flying into Beijing’s new terminal?)

Bradley Martin, author of Under the Loving Care of the Fatherly Leader, reports on KJN’s activities in Bloomberg:

Kim Jong Nam, who was wearing large sunglasses and a knit cap, said he was in Macau, Asia’s largest casino destination, for a “holiday trip.” “I never gamble out here,” he said before climbing into a taxi, with no sign of accompanying bodyguards.

At Beijing’s airport earlier in the day, Kim Jong Nam told Asahi Television that he had “no information” on whether Megumi Yokota, a Japanese national abducted by North Korean agents in 1977, might still be alive.

When asked whether he was interested in succeeding his father as North Korea’s leader, Kim said “I am not interested by the issue, sorry.”

Kim Jong Nam went to boarding school in Switzerland (as did his younger brother Kim Jong Chol).  Aside from English, Korean, and French, I would bet he also speaks some German, Mandarin, and Cantonese.  He was also rumored to be the target of an assassination plot in Austria in 2004.  Since my source with Austrian intelligence has gone dormant, I cannot confirm this. 

Read the full article here:
Kim Jong Il Seems Healthy, Eldest Son Tells Fuji News in Macau
Bloomberg
Bradley Martin and Taku Kato
1/27/2009

From the Daily NK:

A source from Yangkang Province reported on the 27th in a telephone conversation with the Daily NK that, “On the 15th in Woonheung, 8 freight wagons carrying a total of 480 tons of gasoline and diesel overturned at dawn. The National Security Agency and the provincial security agency are examining the causes of the incident.”

In Youngha Workers-gu, which adjoins Baekam where this incident occurred, a train on the Hyesan-Pyongyang line overturned on March 27th, 2008, killing or wounding hundreds.

According to the source, there were 16 casualties, including merchants and an engineer on the freight train. 8 freight wagons completely overturned, causing the spill.

Right after the incident, North Korean authorities mobilized citizens to deal with it and dispatched the NSA to examine the causes.

The source said that, “As the train was going down a slope, a blackout occurred so the brakes did not work. However, the NSA presumes it happened deliberately, because similar incidents have occurred in this region.”

The North Korean authorities have been claiming to citizens that such incidents, which happen every year in Youngha Workers-gu, Woonheung and Baekam in Yangkang Province, are maneuvers by enemies. However, no criminals have been detained.

Thoughts:
1. The DPRK’s railway system is outdated to say the least.  Many of the lines were laid during the Japanese occupation of the peninsula (pre-WWII).  After the Korean war, large sections were reconstructed, but needless to day, for the last 50+ years the system has suffered severe under-investment.  Recently it has been targeted as a major focus of the policy to create a “strong and prosperous nation” by 2012. 

2. We know from multiple tourists that the Pyongyang-Sinuiju line is operational.  We now know that the line from the Russian border to Pyongyang is operational.  Other than these two lines, the functionality of the DPRK’s railway system is largely a mystery to the outside world.

3. The Daily NK also reported a DPRK railway accident in April 2008 (here and here).

4. No word yet on whether the DPRK purchased life insurance for the passengers!

5. An excellent map of the DPRK’s railway system can be downloaded to Google Earth here.

6. You can read past blog posts about the DPRK’s railway system here.

You can read the full Daily NK story here:
Freight Train Overturned in Yangkang, 16 Casualties
Daily NK
Lee Sung Jin
1/27/2009

Institute for Far Eastern Studies (IFES)
Nk Brief No. 09-1-23-1
1/23/2009

Following the recent North Korean New Year’s Joint Editorial and its calls for economic measures, on January 5, more than 100,000 people attended a rally in Pyongyang at which customized economic tasks were presented for each of the North’s provinces, taking into account each region’s particular industrial concentration or specialty.

According to North Korean media reports on January 20, Pyongyang stressed reforms in steel, power, coal, railway, and other sectors it considers ‘Priority Sectors of the People’s Economy.” It also presented tasks for the promotion of housing construction, refurbishment of pig farms, and the increase in production of farms and light industries providing daily necessities to the people of the North.

South Pyongan Province was tasked with increasing the production of ‘Juche’ steel’ at the Chollima Steel Complex, which kicked off the “new revolutionary upsurge” late last year during an on-site inspection by Kim Jong Il, as well as full operation of the newly built ‘superpower electric furnace’, and called on all the people of the province to increase production of organic fertilizer in order to boost food production.

For North Pyongan Province, “mass reforms” for the metalworks sector and concentrated efforts to increase electrical production at the Supung and Taechon power plants were called for. In addition, increased production at the Kujang Earth Colliery Complex, Rakwon Machinery Complex, and the Sinuiju Cosmetics Factory were ordered, as was the institution of advanced agricultural management methods.

Efforts in South Hwanghae Province are to be focused on increasing iron ore mining and scrap iron collection at sites such as the Eunryool and Jaeryung mines, and agricultural production goals are to be met through the introduction of high-yield crops and double-cropping.

North Hwanghae Province was ordered to focus on increasing production at the Hwanghae Iron Complex, the Yesong River Youth Power Plant No. 1, the 2.8 Madong Cement Factory, the Sariwon Poultry Farm, and the Sariwon Pig Farm. In addition, high-yield crops are to be introduced and construction of irrigation systems is to begin, as land management efforts are to be implemented in order to expand agricultural land in Mirubol. North Hwanghae Province is also to build a new library, a new arts theater, and a new housing.

In South Hamgyung Province, efforts are focused on construction of the Keumya River and Keumjin River Guchang power plants, as well as improving mining capacity at the mines in the Danchun area while renovating production facilities at the Sudong Mines. Aggressive promotion of construction on the second stage of the 2.8 Vinylon Complex was also emphasized. Provincial authorities were also ordered to complete the initial stage of refurbishment in the Heungnam Pharmaceutical Plant, improve production at the Kwangpo Duck Farm and the Hamju Pig Farm, and accelerate home construction in Hamheung City.

North Hamgyung Province was tasked with perfecting ‘North Korean-style steel production methodology’ at the Kim Chaek Iron Complex and Sungjin Steel Complex, and modernizing exploration, mining and processing equipment at the Musan Mining Complex in order to boost output, along with bringing the Seodusu Power Plant and Chungjin Thermoelectric Power Plant fully on-line. Another important task prioritized was the completion of the second stage of the Urangchun Power Plant.

In Kangwon Province, construction of the Wonsan Army-People Power Plant, increased production at the Munchon River Ironworks, modernization of the Wonsan Shoe Factory and the Wonsan Textiles Factory, and the refurbishment of the Munchon Poultry Processing Plant were emphasized, along with the diversification of management in farming communities in order to resolve food shortage problems.

Ryanggan Province, in the northern Gosan region, was tasked with improving management of the Samsu Power Plant, which entered service in May 2007, and construction of the Baekdu Mountain Military-first Centennial Power Plant and other electrical facilities, and the establishment of a ‘hometown of potatoes’ for the quick increase in potato cropping.

The Jagang Province was tasked with modernizing its metalworks sector and increasing electrical production at the Gangye Youth Power Plant and Janga River Power Plant, construction of small and medium-sized power plants, and increasing its logging production. Jagang Province was also tasked with normalizing production in its pig, duck, and chicken factories, and software development for local organizations was emphasized as a priority task for the Electronic Business Research Institute in Ganggye City, which was visited by Kim Jong Il after its grand opening last year.

Although the P.R. of China and the DPRK are supposed to be as close together as “lips and teeth,” we have seen a couple of interesting stories emerging from Taiwan in the last few days.

Case 1: On Jan 8, the Straits Times reported that former Taiwanese president Chen Shui-bian embezzled money intended for the DPRK.

Case 2: Last Friday, the AFP reported that the US Treasury Depratment was moving on a Taiwanese couple who were allegedly facilitating shipping to the DPRK:

The US Treasury moved Friday to freeze the assets of a Taiwanese couple and their companies, linking them to North Korean weapons proliferation.

Alex HT Tsai and his wife Lu-chi Su were accused of providing support to the Korea Mining Development Trading Corporation (KOMID), identified by Washington as a proliferator four years ago, the Treasury said in a statement.

Tsai was last year indicted by Taiwanese authorities for forging shipping invoices and illegally shipping restricted materials to nuclear-armed North Korea, it said.

“He has been involved in shipping items to North Korea that could be used to support North Korea’s advanced weapons program,” the statement said.

The companies controlled by the couple Global Interface Co and its subsidiary Trans Merits Co. were sanctioned by the Treasury action.

“Proliferators depend on access to the international financial and commercial systems to support their dangerous trade,” said Stuart Levey, Treasury under secretary for terrorism and financial intelligence.

“Our action today exposes a North Korean procurement channel, and we urge governments and companies worldwide to cut this channel off entirely,” he said.

Rad the full story here:
US freezes assets of Taiwanese couple and their companies
AFP
1/16/2009