North Korean Economy Watch

North Korea Uncovered: Version 12
Download it here

About this Project: This map covers North Korea’s agriculture, aviation, cultural locations, markets, manufacturing facilities, energy infrastructure, political facilities, sports venues, military establishments, religious facilities, leisure destinations, national parks, shipping, mining, and railway infrastructure. It is continually expanding and undergoing revisions. This is the 12th version.

Additions include: Tongch’ang-dong launch facility overlay (thanks to Mr. Bermudez), Yongbyon overlay with destroyed cooling tower (thanks to Jung Min Noh), “The Barn” (where the Pueblo crew were kept), Kim Chaek Taehung Fishing Enterprise, Hamhung University of education, Haeju Zoo, Pyongyang: Kim il Sung Institute of Politics, Polish Embassy, Munsu Diplomatic Store, Munsu Gas Station, Munsu Friendship Restaurant, Mongolian Embassy, Nigerian Embassy, UN World Food Program Building, CONCERN House, Czech Republic Embassy, Rungnang Cinema, Pyongyang University of Science and Technology, Pyongyang Number 3 Hospital, Electric Machines Facotry, Bonghuajinlyoso, Second National Academy of Sciences, Central Committee Building, Party Administration Building, Central Statistics Bureau, Willow Capital Food House, Thongounjong Pleasure Ground, Onpho spa, Phipa Resort Hotel, Sunoni Chemical Complex (east coast refinery), Ponghwa Chemical complex (west coast refinery), Songbon Port Revolutionary Monument, Hoeryong People’s Library, Pyongyang Monument to the anti Japanese martyrs, tideland reclamation project on Taegye Island. Additionally the electricity grid was expanded and the thermal power plants have been better organized. Additional thanks to Ryan for his pointers.

I hope this map will increase interest in North Korea. There is still plenty more to learn, and I look forward to receiving your contributions to this project.

Version 12 available: Download it here

The most authoritative map of North Korea on Google Earth
Download it here

This map covers North Korea’s agriculture, aviation, cultural locations, markets, manufacturing facilities, railroad, energy infrastructure, politics, sports venues, military establishments, religious facilities, leisure destinations, and national parks. It is continually expanding and undergoing revisions. This is the eleventh version.

Additions include: Mt. Paegun’s Ryonghung Temple and resort homes, Pyongyang’s Chongryu Restaurant, Swiss Development Agency (former UNDP office), Iranian Embassy, White Tiger Art Studio, KITC Store, Kumgangsan Store, Pyongyang Fried Chicken Restaurant, Kilju’s Pulp Factory (Paper), Kim Chaek Steel Mill, Chongjin Munitions Factory, Poogin Coal Mine, Ryongwun-ri cooperative farm, Thonggun Pavilion (Uiju), Chinju Temple (Yongbyon), Kim il Sung Revolutionary Museum (Pyongsong), Hamhung Zoo, Rajin electrified perimeter fence, Pyongsong market (North Korea’s largest), Sakju Recreation Center, Hoeryong Maternity Hospital, Sariwon Suwon reservoir (alleged site of US massacre), Sinpyong Resting Place, 700 Ridges Pavilion, Academy of Science, Hamhung Museum of the Revolutionary Activities of Comrade Kim Il Sung, South Hamgyong House of Culture, Hamhung Royal Villa, Pork Chop Hill, and Pyongyang’s Olympic torch route. Additional thanks go to Martyn Williams for expanding the electricity grid, particularly in Samjiyon, and various others who have contributed time improving this project since its launch.

Disclaimer: I cannot vouch for the authenticity of many locations since I have not seen or been to them, but great efforts have been made to check for authenticity. These efforts include pouring over books, maps, conducting interviews, and keeping up with other peoples’ discoveries. In many cases, I have posted sources, though not for all. This is a thorough compilation of lots of material, but I will leave it up to the reader to make up their own minds as to what they see. I cannot catch everything and I welcome contributions.  Additionally, this file is getting large and may take some time to load.

Interview Blog, Germany
(click here for all their North Korea-related interviews)

“Phoenix Commercial Ventures Ltd is a venture capital company that offers investors business and investment opportunities in the DPRK” – Interview with Ken Frost (CFO of Phoenix)

Klaus-Martin Meyer: Mr. Frost, you are member of the Board of Phoenix Commercial Ventures Ltd, a company that offers investors business and investment opportunities in the Democratic People’s Republic of Korea (DPRK) otherwise known as North Korea. Would you mind introducing yourself and your company as well to our readers?

Ken Frost: Phoenix Commercial Ventures Ltd is a venture capital company that offers investors business and investment opportunities in the DPRK, enabling them to take advantage of the economic reforms that are taking place there.

Phoenix is owned and run by four experienced professionals, who are based in London, Paris and the DPRK. The Board has between them many years of international business experience, and an invaluable network of well placed contacts. Phoenix offers a unique service, by being able to offer direct access to the DPRK.

Phoenix Commercial Ventures Ltd specialises in project finance in the DPRK. As is well known, the business environment is difficult, and the company targets very specific investment projects; these are small enough to manage and have the capacity to generate foreign currency, either through export or import substitution.

Phoenix Commercial Ventures Ltd maintains an office in Pyongyang, almost the only European company to do so, and operates with the following specific aims:

• Identify commercially viable investment projects in the DPRK, on a case by case basis
• Identify reliable local partners for all forms of business in the DPRK, either trade or investment
• Seek overseas investment sources for such projects
• Minimise the risk in such projects, by taking responsibility for supervision of the local set-up procedures and management of the projects

The Board of Phoenix Commercial Ventures Ltd consists of nationals of the UK, France and the DPRK. The European flavour is enhanced by the fact that most of the counterparties and suppliers in the various projects are also European, and the DPRK government views Phoenix Commercial Ventures as a prime conduit for European business and investment in the DPRK.

One of the directors of Phoenix Commercial Ventures is also General Manager and CEO of the Daedong Credit Bank, the only western-invested foreign bank in the DPRK. Based in Pyongyang, this is a 70-30 joint venture between a UK financial management company based in Hong Kong and the Korea Daesong Bank, one of the main DPRK banks.

Phoenix Commercial Ventures is unique in having this connection with a reliable, locally based financial institution. The synergy benefits include a wider exposure to local business contacts in differing fields; as well as an additional degree of control, made possible by the fact that the various joint venture projects have to maintain their accounts with the bank.

We have a number of projects within DPRK, including two 50/50 joint ventures:

– Hana Electronics JVC, a consumer electronics company now ranked as one of the top three best performing joint ventures in DPRK, as assessed by the Ministry of Finance.

– Sinji JVC, whose main areas of operations are retail, software and bonded processing.

Full details about our company can be found on our website www.pcvltd.com

I am the CFO of Phoenix and am a chartered accountant with over twenty years international experience of FMCG industries, consumer electronics, rough diamond distribution and the Internet. I have worked in KPMG, Philips Electronics, De Beers and run my own Internet company. I am also a Scholar on Gerson Lehrman Group Councils.

In November 2007 I reached the finals of Accountant of the Year held by the Association of International Accountants at the President’s Awards Dinner 2007. This award is designed to recognise organisations’ accountancy stars.

In January 2007 I was awarded, based on recommendations from fellow members of the ICAEW, a New Year’s Honour by AccountingWeb. The award was for my services to the accountancy profession in opposing the merger of the ICAEW with other accountancy bodies.

In November 2006 I was awarded an honorary fellowship of the Institute of Professional Financial Managers (IPFM), for my services to the accountancy profession.

In January 2006 Accountancy Age placed me on their Financial Power List for 2006. I was 11th on their list of the top 50 of “The Ones To Watch”. The list identified the “most influential names to look out for” in the world of finance for 2006.

Klaus-Martin Meyer: We read on your website “offers investors business and investment opportunities in the Democratic People’s Republic of Korea (DPRK), enabling them to take advantage of the economic reforms that are taking place there.” Can you tell us what kind of opportunities this could be?

Ken Frost:There are three main areas of investment opportunities open to investors, which we can facilitate within the DPRK:

1 Small scale investments ($500K or less) yielding good levels of return (20% or more).

These investment opportunities are in local production (consumer goods, bonded processing, software etc) for domestic market consumption and export. These utilise the advantages that DPRK has over all the other countries in the region namely:

– 99% literacy
– skilled/disciplined/hard working workforce
– well educated workforce, many speak a good level of English
– lowest wage rates in the region

Phoenix has a number of opportunities that it can offer investors in this area; eg bonded processing, consumer manufacturing, clothing manufacturing and software development.

2 Natural resources

DPRK has proven abundant natural resources worth several trillion dollars; eg coal, gold, copper, titanium, lead, zinc, nephelite, nickel, magnesia, graphite etc.

The investment required would be of a higher order than the small scale investments above, $1M plus. The money would be used to bring existing mines back to production, by pumping out flood water and renewing worn out capital equipment.

Phoenix has, via its working relationship with CPEEC, a number or opportunities in the natural resource sector that it can offer genuine investors.

3 Infrastructure development

Clearly investment in infrastructure is the costliest form of investment. However, given the dilapidated state of the roads, railways, ports, electricity grid etc it is necessary if the economy is to be revived.

DPRK also has a keen interest in infrastructure development focussed on green/renewable energy areas.

Phoenix has on it books a profitable renewable energy project that would suit a serious, well financed and experienced green energy investor.

The DPRK is the final economic frontier and is a “green field” site. Its primary advantages are:

– Location (physical position between Russia, South Korea, China and in AP)
– Location (historical, all the major players now want to move forward)
– Location (resources, it has abundant rich resources both mineral and human capital – high literacy, well educated etc)

Klaus-Martin Meyer: What are the main differences between your company and a conventional venture capital company that is investing for example in internet our biotech companies?

Ken Frost: Companies such as those you mention are industry-specific, whereas ours is location-specific. Our company is relevant to people who might want to invest in the DPRK.  We work in the DPRK and have a physical presence in the DPRK, other “conventional” venture capital companies do not.

Klaus-Martin Meyer: Are there any differences to other investment companies?

Ken Frost: We apply the same principles to potential investments as any other professional investment company, we look at:

– the risk
– the returns
– the quality of the local management
– the quality of the business plan
– the size of investment
– the share offered for that investment etc

We also pay very close attention to corporate governance issues such as; financial reporting, management structure and ethics etc. We have a code of conduct which can be seen on our website.

Phoenix Commercial Ventures Ltd is committed to being a responsible corporate citizen and to the pursuit of a sustainable future, both economic and social.

Phoenix Commercial Ventures Ltd adheres to three fundamental ethical principles:

– Integrity
– Competence
– Courtesy

To this end Phoenix Commercial Ventures Ltd has developed a Code of Conduct, which sets out to ensure that these principles are followed in its operations. The Code of Conduct governs Phoenix’s business decisions and actions. The Code applies equally to corporate actions, and to the behaviour of individual employees when conducting business on behalf of Phoenix.

We work very hard with our local management teams and business partners to ensure that international standards re reporting, corporate governance and ethics are understood and followed.

Klaus-Martin Meyer: What are your plans for the company’s future? How do you see Phoenix Commercial Ventures in five years time?

We see the coming period for Phoenix as that of being continued growth.

In our view there will be a major upswing in economic relations between the DPRK and other countries over the coming months/years. Phoenix Commercial Ventures is uniquely placed to take advantage of, and to respond to, that upswing.

We are one of the very few organisations to have made successful joint ventures in the DPRK. We are also one of the very few organisations to have people with many years’ experience, and cultural sensitivity, actually on the ground in Pyongyang. You cannot run a business by email!

From Dr. Leonid Petrov in the Asia Times:

Russia cooperation with North Korea
Since the early 2000s, overall relations between Russia and the DPRK have been improving. The DPRK’s importation of refined oil from Russia saw its first increase in 2002-2003 (from $20 million to $96 million) and was caused by the beginning of the US-DPRK nuclear confrontation and the subsequent demise of the international Korean Peninsula Energy Development Organization project that was to construct a light water reactor nuclear power plant in North Korea.

During 2004-2005, petroleum trade between Russia and North Korea grew from $105 million to $172.3 million. Until the six-party talks produced their first results, in the list of Russia’s exports to the DPRK, oil products dominated at 63%. Rampant corruption in both countries also let a trickle of Russian oil to be smuggled to North Korea unaccounted for.

In 2006, Russia was the DPRK’s third-largest trading partner after China and South Korea and absorbed 9% of the total $3.18 billion spent by the North on imports (approximately $286 million). The Kremlin’s approval of international sanctions against the former communist ally was accompanied by the curtailment of trade with the North. At the time of North Korea’s nuclear test in October 2006, Russia’s trade statistics showed that exports of petroleum had dropped 91.1% compared to the same period of the previous year.

The pragmatic mood in bilateral relations prevails, and these days Russia delivers oil and food to North Korea only in accordance with its obligations associated with progress at the six-party talks. This year, Russia has already delivered 100,000 tonnes of fuel oil to the DPRK in two batches and, according to Russian Deputy Foreign Minister Alexei Borodavkin, a top Russian envoy to the six-party talks, will deliver another 100,000 tonnes by October 2008. In June, the Russian government announced it would provide 2,860 tonnes of flour to the DPRK. According to an official KCNA news agency report, this food aid arrived at the border city of Sinuiju in the DPRK’s northern Pyongan province in early July.

Recently, for the first time in the post-Soviet era, North Korea saw a major Russian investment. In the city of Pyeongseong, the Russian auto plant KamAZ opened its first assembly line, specializing in the production of medium-size trucks named “Taebaeksan-96”. Although less than 50 trucks were assembled in 2007, this cooperation became an important milestone in the development of bilateral relations. While the project doesn’t violate United Nations sanctions on North Korea, it shows Moscow’s drive to expand its influence in the country. Ironically, the more trucks assembled the heavier North Korea’s dependence on imported fuel, engine oils and other petrochemical products.

The importance of the DPRK’s Rajin-Seonbong special economic zone to Russia’s national interests continues to grow. The state-run monopoly OAO Russian Railways is currently upgrading its railway connections with North Korea in Khasan-Tumangang, investing at least 1.75 billion roubles (US$72 million) into this project, and plans to participate in an ambitious plan to rebuild a trans-Korean railway. By connecting Rajin (and the rest of northern Korea) to its Trans-Siberian railroad, Russia hopes to benefit form the transit of South Korean and Japanese cargo which could be sent via its territory to Central Asian and European markets. Pyongyang seems to endorse these plans and other Russian initiatives, but does not commit any financial resources.

Eighty percent of overall bilateral economic trade between Russia and North Korea consists of cooperation, barter and investment-in-kind between the regional areas. The most active Russian regions trading with the DPRK are Eastern Siberia and the Far East. Maritime province (Primorsky Krai) itself exports to North Korea more than $4 million worth of refined oil per year. There are no oil fields in Maritime province and oil has to be borrowed through a chain of federal bureaucratic structures from the oil-rich areas of Eastern Siberia. Instead of money, the local governments agree to receive the labor of North Korean workers.

North Korean laborers in Siberia and the Far East were common under the Soviet system and they are still visibly present. In 2004, the Russian Federal Immigration Service issued 14,000 visas for foreign laborers, of whom North Koreans numbered 3,320 in 2005 and 5,000 in 2006. Since the DPRK has no other way to pay in goods or services, its government started paying for oil imported from Russia by dispatching thousands of laborers at zero cost. Following strong demand from local companies, just in 2006 regional authorities of Primorsky Krai agreed to issue an extra 5,000 working visas to North Koreans. This openness is contrary to local government policy that normally restricts the entry of labor from China.

DPRK citizens are sent to Russia to work as woodcutters and builders but some have also managed to find work in the agricultural and marine industry. Through the presence of these laborers, Russia has enjoyed a partial repayment of the DPRK’s post-Soviet debt through North Korean workers being contracted to work in mines and lumber mills in Russia’s Far East.

The wages they are able to make in Russia are far greater than what they would make at home. However, the foreign worker quota is set not by provincial governments but by Moscow, which often tries to put a stop to these programs due to the complexity of the matter. Part of this opposition stems from the fact that the North Korean workers in Russia still fall under DPRK laws and, therefore, are subject to intrusive supervision.

Among the most difficult but negotiable issues in the way of Russia-North Korea cooperation remains the problem of external debt. During the Soviet era, the DPRK incurred a debt of approximately $8 billion, which Pyongyang still owes to Moscow but cannot repay. This debt remains a stumbling block in most negotiations on new aid and development programs. However, this debt can potentially make trilateral Russian-Korean relations closer and stronger.

In January 1991, soon after the opening of diplomatic relations with South Korea, Moscow received $3 billion from Seoul in the form of a three-year loan. The collapse of the Soviet Union left this loan largely unpaid. The new Russian government in the 1990s provided South Korea with armaments worth $150 million to be counted as payment in kind for the remaining debt. In 2003, after bilateral negotiations on this issue were completed, part of this Russian debt was canceled and the remainder was rescheduled to be paid over the next 23 years.

Taking into account its own debts to the South, Russia could easily write off a significant portion of North Korean debt. To resolve this question, a certain agreement between all three parties is needed. To engage in a mutual and reciprocal round of debt cancelation, Russia might choose to see the North and the South as one country. Such an agreement would have unblocked the road for broader cooperation between Russia and the two Koreas, and simplified Russia’s energy cooperation with China and Japan.

The full article is worth reading here:
Russia is key to North Korea’s plight
Asia Times
Leonid Petrov
7/24/2008

“North Korean Market Vendors: The Rise of Grassroots Capitalists in a Post-Stalinist Society”
Andrei Lankov and Kim Seok-hyang
Pacific Affairs, Vol. 81 Iss.1 
(subscription required)

Abstract:
The article deals with the social changes that have taken place in North Korea [from 1994-2002], when the collapse of the centrally planned economy led to the growth of private commercial activity.  This activity remains technically illegal, but the relevant bans and restrictions have rarely been enforced due to endemic corruption and disorganization of the state bureaucracy.  The article is largely based on in-depth interviews with North Korean black market operators [who have defected to South Korea].  It traces their origins, the type and scale of their business, and changes in their mode of operation.

The article demonstrates that the “second economy” came to dominate North Korean economic life by the late 1990s, since authorities’ attempts to limit its scale were largely ineffective.  The growth of the “second economy” produced new grassroots capitalists who sometimes came from underpriveledged social groups, but more typically represented people with good official connections.  It is also remarkable that foreign connections (usually with China) played a major role: to a large extent, merchandise sold at the North Korean markets either came from overseas or was exported overseas eventually, and in many cases the merchants’ initial capital was also provided by relatives residing overseas.

Some highlights:
1. Changsa is the North Korean word for “dealings in the marketplace.” Tonju is the word for money changers/lenders meaning “master of money”. 
2. Public Distribution System (PDS) rations were cut for the first time in 1973.
3. The DPRK system restricted market activity primarily through three mechanisms: limited size of family farming plots, inminban surveillance system, and travel permits.
4. Before the arduous march, North Koreans were not inclined to resort to market trade.  These transactions were seen as ethically suspect.  Once the famine hit, people took up market trading remarkably quickly.
5. Before the arduous march, bribery was rare, even though patronage and indirect forms of corruption were rampant.  Mid-level bureaucrats had to vie for preferred access to poor-quality consumer goods, better schools, and study trips abroad.
6. At the height of the arduous march (1997), production was at 46% of capacity.
7.  North Korean traders seldom if ever have to deal with the protection racket.  When asked directly, respondents did not mention threats from mobsters as one of their security concerns (I wonder if this is still the case).
8. Pyongsong market is reputed to be the largest in the country.  It is just outside Pyongyang, making it accessible to citizens inside the capital as well as those who cannot get permits to enter the city (Pictured below with Google Earth coordinates).

UPDATE 3 (2013-3-15): Michael Rank offers more information on the DPRK – Taiwan nuclear waste deal:

North Korean-Taiwan nuclear waste deal thwarted over export permit
By Michael Rank

A Taiwanese report says one reason the North Korean nuclear waste deal fell through was that Taipower didn’t obtain an export permit for the waste from the Taiwanese Atomic Energy Council (AEC).

It also says that Taipower claims no final deal was ever signed, so there is no question of the agreement being violated. It quotes Taipower official Huang Tien-huang as saying the North Koreans blocked them from viewing the processing site at Phyongsan (Pyeongsan, 평산, 平山), while the AEC also had procedural problems with the North Koreans, leading it to refuse an export permit.

North Korea has hired a (presumably Taiwanese) lawyer, Tsai Hui-ling, to plead its case, and is claiming NT$300 million (US$10 million) compensation. Tsai can be seen on this English-language video clip.

A PRC report quoting Taiwanese reports says the first stage of the deal worth US$75.66 million envisaged shipping 60,000 barrels of nuclear waste, and a further 14,000 barrels in the second stage, with a total value of $150 million and that the North Koreans were after the deal as a source of foreign exchange at the height of the famine. There have been ten rounds of negotiations to try to resolve the dispute, the report says, adding that Taiwan decided in 1999 that it would process the waste domestically.

As I reported in 2008, North Korea signed a deal with a Chinese company to recycle industrial waste that is so polluted that other countries have refused to handle it.

A slightly fuller Chinese report than the one I cited earlier names the Chinese company involved as Dalian-based Huatai Recycling Resources Co Ltd and says it has close links with the North Korean National Defence Commission, foreign ministry, environment ministry and foreign trade ministry.

It also says the North Koreans have four large recycling sites at Sinuiju and Nampo, two for lead batteries and two for electronic goods, and that they are able to recycle a wide array of equipment, from plastics to refrigerators as well as computers, phones and scanners, including goods that are banned for recycling in China.

It is not clear if the Chinese-North Korean deal was actually implemented.

UPDATE 2 (2013-3-2): The DPRK intends to sue Taiwan for breach of contract in its failure to begin the Taiwan – DPRK waste management project. According to the China Post (Taiwan):

North Korea is poised to sue Taiwan Power Co. (台電) for damages of NT$300 million, over an alleged breach of a contract signed more than 16 years ago, according to lawyers working on Pyongyang’s behalf.
Litigation will begin March 4, North Korea’s legal counsel said.

In 1996, Taipower allegedly committed to a contract with North Korea in which nuclear waste from Taiwan would be shipped and stored in the isolated communist nation, according to reports.

However, the plans were halted due to North Korea’s then-inadequate waste storage facilities and the sudden eruption of international uproar over the scheme, with Taiwan paying US$8.72 million to preserve a five-year option period in 1998, according to the lawyers, who added that North Korea continued to invest in its waste storage facilities under the assumption that the deal would be completed.

After over 10 rounds of negotiation over the past 15 years, North Korea is now accusing Taipower of complacency and negligence, citing a lack of communication and effort to fulfill the agreed-upon obligations.

In light of North Korea’s unexpected litigation, Taipower has said that such a dated case needs a comprehensive internal review before a response can be formulated.

The lawsuit marks a surprising development in the ongoing row over the proposed plan to construct a fourth nuclear power plant in Taiwan, as the ruling and opposition parties wrestle over the terms of the proposed referendum, which would decide the fate of the plant.

UPDATE 1 (2009-1-8): A Taiwanese official is under investigation for activities related to the Taiwan – DPRK waste management deal. According to the AFP (via Singapore’s Straits Times):

The Apple Daily reported on Thursday that prosecutors had begun investigating claims that Chen might have pocketed 300 million Taiwan dollars of financial aid in 2004 and 2005 in exchange for North Korea handling the island’s nuclear wastes.

The daily, which did not name its sources, alleged the cash would be given to a high-ranking North Korean official through a contact who promised to help Taipei set up a ‘direct communication channel’ with Mr Kim Jong-Il’s regime.

However, Taiwan did not establish any form of contact with North Korea nor send its nuclear waste to the communist state after the foreign ministry paid the money, the report said.

Self-ruled Taiwan is formally recognised by only 23 countries and does not have diplomatic ties with North Korea.

Read the full story here:
Funds were for N.Korea
AFP via Straits Times
1/8/2009

ORIGINAL POST (2008-6-30): According to Michael Rank in the Telegraph:

North Korea is planning to recycle waste that is so polluted other countries refuse to handle it.

Through a Chinese-language website (link here) the country is seeking supplies of plastic and electronic waste which “can be processed in [a North Korean port] but which other countries and territories are restricted from dealing in”, reflecting the country’s dire economic plight and its scant regard for international norms.

Isolated and desperately poor, North Korea is a beginner so far as toxic waste is concerned, although in 1996 it signed a deal with Taiwan to dispose of its nuclear waste from atomic power plants.

South Korea reacted furiously to the deal and Taiwan was eventually forced to back down and cancel the agreement.

North Korea also offered to recycle the North Sea Brent Spar oil storage platform, which Royal Dutch Shell had proposed dumping in the deep Atlantic in 1995.

This caused an environmental furore, with Greenpeace claiming that the structure was full of oil and burying it at sea would result in serious pollution.

An enterprising young North Korean official in London unexpectedly offered to come to the rescue, suggesting that his country could dispose of the structure, saving Shell and the British government from further embarrassment.

The offer was turned down as Shell didn’t want to be seen turning to a regime as dubious as North Korea, but Greenpeace’s own reputation took a serious knock when it was forced to admit that it had enormously over-estimated the amount of oil remaining in Brent Spar’s storage tanks.

North Korea’s waste recycling plans are part of a much bigger, £5 million ($10 million) project to enlarge a port on its west coast and develop it into an export base including a duty-free zone.

“There are no limits, any business taking advantage of [North] Korea’s low labour costs for intensive processing is welcome,” the website states.

Although the port is not named, it is almost certainly Nampo, which is close to the capital and is the largest harbour on North Korea’s west coast. The development covers 30,000 square metres (320,000 square feet) and is “expandable”.

The port currently accepts vessels of up to 10,000 tonnes but the plan is to increase this to 50,000 tonnes.

The project is pitched at Chinese companies, and interested parties are asked to contact a firm in the Chinese city of Dandong on the North Korean border.

A deal with China would help to counterbalance a recent agreement with state-owned Russian Railways to build a £50 million ($100million) container terminal on North Korea’s east coast as part of a £1.5 billion ($3 billion) plan to create a rail corridor linking South Korea with Europe via North Korea and Russia.

Russian Railways wants to turn the port of Rajin into a hub capable of handling 320,000 containers a year for shipment from South Korea to Europe.

Russia and China have fought bitterly over rights to refurbish Rajin. A few years ago China appeared to have won out when a 50-year deal was announced with the Chinese border city of Hunchun, but this came to nought and Russia was the ultimate winner in the battle to revitalise the north-eastern port and ultimately link it with Europe.

The original source, a Chinese language website, is here.

To read the full story click here:
North Korea in bid to recycle toxic waste
Telegraph
Michael Rank
6/30/2008

After China and the USA made high-profile food donations to North Korea, the Russians finally joined the game.  Russia’s Foreign Minister claims that by the end of June his country will have sent 3,000 tons of flour to UN World Food Program distributors in North Korea. The first aid deliveries arrived in North Korea by train on June 11.

I am surprised Russia waited so long to get into the game.  Russia has been prodding North Korea to link its Trans-Siberian rail traffic to South Korea, and they want to make sure the Chinese don’t squeeze them out of North Korea’s Raijin Port (which does not freeze in the winter).  Food aid might not have helped these processes along, but waiting so long to jump on the bandwagon can’t have helped. 

In March of this year, the Russians inked a deal to renovate the railway lines between their border and Raijin (the tracks are different gagues).

Read about the aid here: 
Russia to deliver 3,000 tons of flour to North Korea
Novosti
6/9/2008

Russia sends food aid to North Korea
Associated Press
6/19/2008

UPDATE: Photos here (h/t Mateusz)

From Radio Prague (hat tip to David):

The Prague Transport Authority announced on Tuesday that the first of twenty reconditioned trams would be shipped to North Korea this week. The North Korean government are paying about 13 million crowns – that’s just over 800,000 U.S. dollars – for the second-hand trams, one of Prague’s most instantly recognisable symbols. But as Rob Cameron reports, they’re not the first Czech trams to be sent abroad, and not even the first to be sent to North Korea.

In the unlikely event you were to find yourself waiting for a tram at Pyongyang’s Mangyongdae station, you might well be surprised to see a Czech tram trundling along the rails towards you. But Czechs trams have long been a feature of life in the North Korean capital. The first – a fleet of new T4 trams – arrived in 1991, in time for Kim Il Sung’s 79th birthday. (The T4 is the chunky, rather boxlike model from the 1990s that runs on the number 3 line in Prague, for example.)

But the latest consignment heading for Pyongyang this week are reconditioned T3s, the older, iconic red and cream trams that date from the 1960s. The T3s were first produced by the CKD Tatra Smíchov factory in Prague (the T stands for Tatra). In all, a staggering 14,000 T3s were produced in Smichov and exported all over the Soviet bloc, as part of the Comecon system of allocating entire industries to individual communist countries.

Read the full article here:
Iconic red and cream Prague trams get new lease of life in Pyongyang
Radio Prague
Rob Cameron
5/6/2008

UPDATE: Yonhap reports that the food shortage was also discussed at the cabinet meeting:

North Korea has recently convened a Cabinet meeting to discuss food shortages, China’s Xinhua News Agency said Sunday, as international concerns grow over the North’s economic woes.

The North’s Cabinet recently held an enlarged session and decided to address the chronic shortages of food and consumer goods, the news agency said, citing a recent edition of the cabinet daily Minju Joson.

DPRK budget expenditures grow 2.5% this year
Institute for Far Eastern Studies (IFES)
NK Brief No. 08-4-16-1
4/16/2008

On May 9, the sixth round of North Korea’s 11th Supreme People’s Assembly opened, at which this year’s budget expenditures were announced to be 2.5% greater than last year. It was also reported at the assembly that the Cabinet would pursue a new 5-year plan to develop the nation’s science and technology sector by 2012.

Despite officially holding a seat on the Assembly, General Secretary Kim Jong Il did not attend this year’s assembly meeting. In addition, there was no mention during the assembly of inter-Korean, U.S.-DPRK or other foreign relations.

Cabinet Deputy Prime Minister Roh Doo-chul announced this year’s budget, stating that “this year, in order to strengthen national defense, and while building strength, to decisively advance the people’s economy and existing industry as well as improve the lives of the people, the national budget expenditure plan will be expanded to 102.5% of last year.”

According to this statement, this year’s budget is estimated to be 451.5 trillion won (3.2 billion USD). An estimated 15.8%, or 71.3 billion won (510 million USD), is slated for national defense. Last year’s national defense budget was 15.7%, or 69.2 billion won (490 million USD), of the national budget.

North Korea has also decided to increase budget allocations for energy, coal, and metal industries as well as the railway sector by 49.8% as compared to 2007, and will focus investments on staple industries. In the past, the North had stressed the importance of the ‘four main sectors’ of improvement in the people’s economy, including energy, but this year the government will actually focus investment on these sectors.

Cabinet Prime Minister Kim Young-il stated, “From this year until 2012, we will proceed forward with a new 5-year plan for the development of national science and technology…As we systematically increase national investment in this sector, we will raise the sense of responsibility and the role of technicians and raise the level of science and technology development as quickly as possible.”

In 2012, North Korea will celebrate the 100th anniversary of the birth of national founder Kim Il-sung, and has set a goal of constructing an economically powerful nation by that year.

Read the Yonhap story here:
N.K. discusses food shortage in Cabinet meeting
Yonhap
4/20/2008

Daily NK
Moon Sung Hwee
4/8/2008

April 8th is Postal Service Day in North Korea. Each province has a branch office of the Ministry of Posts and Telecommunications and Communication Maintenance Bureau. The postal system manages the distribution of letters, telegrams, telephone calls, TV broadcasts, newspapers and magazines. Additionally, they mint stamps and also operate an insurance agency in name only.

In the late 1990s, the national postal system was completely ruined

In North Korea, postal service offices are set up in each “ri”—a small village unit–, of each county to deliver letters, parcel posts and telegrams. Following the March of Tribulation in the late 1990s, the delivery system was completely destroyed and its formal structure was left in tatters. Even in the 1980s when the North Korean economy and people’s lives were relatively stable, it took around 15 days to two months on average to deliver a letter from Pyongyang to a rural village.

In the case of a telegram, it took generally 3 or 4 days to reach a postal office in a rural area. In the late 1980s, to guarantee efficiency within the telegram delivery system, the authorities supplied the offices with second-hand bicycles from Japan.

After the March of Tribulation, letters disappeared due to train delays and frequent blackouts, and the telegram service was virtually incapacitated due to the lack of electricity.

Telephones were restricted to control the outflow of national secrets

North Korea uses a separate electricity supply for its telephone system. Even if there is a power blackout in a village, villagers can still use the telephone network. In 1993, fiber-optic cables were installed and the use of mail and telegram services began to decline. North Korean people call fiber optic cable a “light telephone.”

North Korea built an automatic telecommunicates system by developing multi-communication technology with imports of machinery and by inviting engineers from China in 1998.

In 2003, authorities allowed cadres to use telephones in their houses and in 2005, they also allowed people to use the telephone at home as long as they paid 2,000 North Korean won (approx. USD0.6) a month (a monthly salary is 1,500 won per laborer).

In August, 2007, the government tightened regulations regarding the telephone system. People could make calls only within their province. Authorities said the reason was to prevent the outflow of national secrets.

The Ministry of Posts and Telecommunications controls TV and other broadcasting. There is no cable TV in North Korea. Authorities set up an ultra-short wave relay station in each county to relay television broadcasts.

North Korea signed a contract with Thailand for satellite broadcasting and installed U.S.-made transmission and relay facilities in 2000.

People can now listen to “Chosun Central Broadcasting,” but in rural areas, it is difficult to recieve signals because the broadcasting facilities and cables have already begun to deteriorate.

People sarcastically say a “newspaper is not about news but about “olds.” The authorities pay special attention to the successful delivery of the Workers Party Rodong Shinmun bulletin. To deliver Rodong Shinmun from Pyongyang to each province or even to each city and county by train, it normally takes 4-5 days. Sometimes, it takes more than a week.

People also say they use an “oral-paper” to get information because rumors are faster than the Rodong Shinmun.

Postal service workers were dragged to prison camps

In 1992, the Minister and all related officials of Posts and Telecommunications were fired, and the Minister, the Vice Minister and their families were sent to political prison camps for having wasted national finances for the import of factory machinery to produce fiber-optic cables from the U.K.

They submitted a proposal to Kim Jong Il to buy factory machines in order to earn foreign currency through the production and export of fiber optic cables. However, in the end they eventually bought worn-out machines from the U.K. and failed to earn profits. In addition, they embezzled some of the funds.

In 2001, in Lee Myung Soo Workers-District of Samjiyeon, Yangkang Province, two office workers and a manager of a relay station broadcasted Chinese TV programs that they were watching to residents by mistake, so they were sent to a political prison camp and their families were expelled to a collective farm.

Agents of the National Security Agency are stationed at the Ministry of Posts and Telecommunications in order to scrutinize mail, parcels, to tap telephone wires and to supervise residents.

The Ministry regularly dispatches professional engineers to the 27th Bureau, to the airwaves-monitoring station, and to the 12th Bureau, which was newly established to censor mobile phones.

On Postal Service Day, Chosun Central Agency often delivers praise for the development of North Korea’s postal system and facilities under the General’s direction.

However, most ordinary citizens will not be able to watch or read about it in time, for the lack of paper, electricity, infrastructure, and delivery systems.