Archive for the ‘Uncategorized’ Category

The Koreas summit and the North Korean economy: why infrastructure is on the table

Sunday, April 29th, 2018

By Benjamin Katzeff 

It’s much to soon to expect concrete outcomes from all the summitry relating to the North Korean economy. Tentative signs suggest, however, that infrastructure will be on the table for the road ahead. A few of them:

  • Aside from a mention of promoting “balanced economic growth,” it’s really the only concrete measure within the economic sphere mention in the Panmunjom declaration: As a first step, the two sides agreed to adopt practical steps towards the connection and modernisation of the railways and roads on the eastern transportation corridor as well as between Seoul and Sinuiju for their utilisation. Sure, this is fairly vague too, but at least it’s something.
  • Kim mentioned infrastructure and railways during the summit, lamenting the comparatively poor state of North Korea’s transportation system:

During the talks, North Korea’s leader Kim Jong-un praised the quality of South Korea’s high-speed train system in Pyeongchang, while citing worries that if Moon were to visit the North, he would be inconvenienced since the transportation infrastructure there is much less advanced. “If (Moon) comes to the North after living in the South, it may be embarrassing. We will make preparations for a comfortable visit,” Kim said.

The South Korean president responded with hopes of restarting cooperation to build a railway connecting the South and North — which the two sides had agreed on during previous inter-Korean summits, yet never put to action.

“If the railroad is connected with the North, both the South and North can use high-speed trains. This is contained in the joint declarations of June 15 (2000), and Oct. 4 (2007), but it has not been executed over the past 10 years,” Moon said.

In other words, it’s already being talked about by the two leaders. It’s fairly uncontroversial and not politically touchy, at least not relatively speaking.

  • It’s not a coincidence that Putin mentioned infrastructure specifically during a phone call with Moon Jae-in about the summit. In theory, at least, it’s a potential win-win-win situation, both for North and South Korea and for other countries in the region, and therefore politically palatable. The idea of massive infrastructure projects as a way to facilitate trade, and peace, is certainly not new and has been part of the plan for inter-Korean economic exchange before, and the blueprints are too many to fully keep track of. Kim Jong-un will almost certainly be seeking support in this area, a crucial one for the second leg of Byungjin.

 

 

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Goods, and people, crossing the China-North Korea border

Wednesday, April 25th, 2018

By Benjamin Katzeff Silberstein

Over the past couple of weeks, there’s been several news stories that suggest and increased stream of goods – and people – across the North Korean border to China. First, there were the reports that some 400 North Korean workers, who were earlier expelled due to China’s sanctions implementation, came back to China. It shouldn’t be all that shocking if Chinese sanctions enforcement eased somewhat after Kim Jong-un’s visit to Beijing a few weeks ago. Judging from historical patterns, Chinese sanctions enforcement on North Korea may well have relaxed as international tensions around North Korea’s nuclear program are somewhat eased as well.

South Korea’s MBC seem to make the same assessment in a recent dispatch from the Sino-Korean border. On April 24th, they reported that North Korean-owned restaurants in Dandong have opened again after being closed for several months, since China began enforcing UN security council-mandated sanctions against North Korea. Shops selling North Korean goods in China have had their shelves restocked, and judging by ticket sales, the number of Chinese tourists visiting North Korea has increased.

It’s hard to tell precisely what all this means. Surely, this could all be a sign of Chinese concessions to North Korea following Kim’s meeting with Xi. More likely, the relaxation is also a concession to Chinese companies: China’s implementation of sanctions has not only hit against North Korea, but against Chinese business interests in the border regions as well. It appears that the main beneficiaries of whatever relaxation has happened are businesses near the border, such as a number of Chinese factories, and North Korean-run restaurants (usually run as joint ventures with Chinese partners). Information is, as usual, very spotty and one should be careful not to draw too many general conclusions from anecdotal evidence.

In any case, as I write for NK Pro, the signs of relaxation we’ve seen so far don’t merit any change in the assessment that North Korea is experiencing significant pressure from the sanctions. Key exports that dropped in 2017 due to China’s sanctions implementations have, as far as we can tell from publicly available information, not gone up. This may very well change in the future, and the anecdotal signs of relaxation along the border may be indicative of a broader change. But for now, the evidence doesn’t seem to be there.

 

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Developments in Sinuiju under Kim Jong-un

Monday, April 23rd, 2018

I wrote a short piece on some of the changes that have taken place in Sinuiju in the Kim Jong-un era. Sinuiju is interesting because not only is it a provincial capital, but it is an important hub in China-DPRK trade as well.

The article is broken up into three parts. There is the main narrative, a timeline feature, and a chart.

You can read the article here.

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South Hamgyong Sci-Tech Library

Monday, April 2nd, 2018

This information has already been published in RFA (in Korean), so here is the English version:

Pictured below is the Sci-Tech Complex in Pyongyang:

It is one of the most iconic buildings of the Kim Jong-un era. On the inside, it is an educational facility for science and technology, the development of which is a cornerstone of economic policy under Kim Jong-un. On the outside, the building (designed to look like a beryllium atom [four electrons]) is a showcase piece for the new style of design and architecture characteristic of the Kim Jong-un era.

In true North Korean style, which aims to establish equality across each province, it is possible that new “Sci-Tech Libraries” (과학기술도서관), based on the model complex in Pyongyang, are being constructed in each of North Korea’s provinces. I have to say “probably” because I am only aware of one new Sci-Tech Library in Hamhung, and I cannot say the plan is to build them across the country until I see them in other provinces.

According to Google Earth imagery (see below), the South Hamgyong Sci-Tech Library was built on the site of the former South Hamgyong Cultural Exhibition House sometime between 2016-2-26 (Top) and 2016-11-30 (Bottom).

Here are before and after ground-level photos:

The new building appears to be a mixture of architectural styles seen in Ryomyong  and Mirae Scientists Street. It contains two features resembling stylized hydrogen atoms, or planets with rings, on the roof. There is also a statue of a helium atom (two electrons) in front of the building.

The completion of this facility was not announced in the official media as far as I am aware, so this slipped by me until I stumbled on a broadcast image of a library card that featured the new building.

It is possible that this is a unique facility and that it will not be replicated in other parts of the country. Hamhung has a number of specialized research and production facilities (including the largest branch of the State Academy of Science outside of Pyongyang), and this could be a facility meant to nurture the particular industries of the area. However, it could also be the first Sci-Tech Library at the provincial level, and more are on the way. We will have to wait and see.

North Korea has been regularly featuring provincial-level “Sci-Tech Exhibitions” in the official media. The Pyongyang exhibitions are held in the Sci-Tech Complex, so perhaps the provincial exhibitions will be held in Sci-Tech Libraries such as these in the future.

North Korea was already in the process of updating local libraries (도서관) into “Miraewon” (미래원–roughly translated as “Future Complexes”). I am unsure if this will continue, or if new libraries will be re-branded as “Sci-Tech Libraries”…

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Developments in North Korea’s electronic payment systems

Monday, March 12th, 2018

I have recently published most of the information below in Radio Free Asia (in Korean), so here it is again in English.

As an economist with an interest in North Korea’s monetary policy, banking, and capital markets, I have kept an eye on developments in North Korea’s payment technologies.

In this area I have previously posted about Koryo Bank Card, Narae CardKumgil Card, Ryugyong Commercial Bank ATMs, Jonsong Card, Golden Triangle Bank Card, Mirae Bank toll-road payments, e-commerce platforms Okryu, Sangyon, and Kwangmyong, and loyalty card programs at Haemaji Restaurant, Kwangbok Supermarket, and Moran Shop. There are, of course, other examples I have not blogged about.

Recently, however, the North Korean media has highlighted continued developments in this field, and I wanted to capture some of that information for readers here.

According to the North Korean media (2018-1-21), the Pyongyang Information Technology Bureau (평양정보기술국) and a subordinate organization, the Card Research Institute (카드연구소), appear to be developing cards for North Korea’s electronic payment system. Perhaps rather ominously, KCTV mentions that the agency is working to  expand the use of cards with features like user identification. Below is a screenshot of some of the cards that they are producing. 

Below are the names of cards as best I can tell (L-R,T-B):
1. Koryo Bank
2. South Hamgyong Province Sci-Tech Library Card
3. Pyongyang Metro
4. KoryoLink
5. ?
6. ?
7. Yaksu (mineral water) Payment Card
8. Jonsong Card
9. Soson? Gas Station
10. Jangmi Health Complex
11. Jonsong Card (Duplicate)
12. ?
13.  Taedongmun Cinema?
14. ?
15. Mirae Health Card
16. “Juyu” Card

We already know that some of these cards are in use (KoryoLink, Jonsung) and others are apparently still in development (Pyongyang Metro Card) [As far as I am aware, people still pay for the metro with tokens]. Some of these are prepay cards for a specific service (KoryoLink for mobile phones), some are prepay cards for broader commercial transactions (Koryo Bank, Jonsong Card), others are probably a mix of loyalty and prepay cards.

A couple of recent articles in DPRK Today shed additional light these developments. The new smart card management system is called Ullim (Ulrim, 울림), presumably named after the famous waterfall in North Korea. The Ullim Network acts as a clearing house for outstanding fuel cards, bank payments, member card services, etc. The system is 100% locally developed (they claim).

I am unsure how the Ullim Network is related to the Narae Network which is managed by the Foreign Trade Bank. Narae Cards are noticeably absent from any of the information put out by/on the Pyongyang Information Technology Bureau. Since all of these products seem connected to the Jonsong Card, under the control of the Central Bank, it may be that the Central Bank and the Foreign Trade Bank, which are still legally separate organizations last I heard, are developing their own separate e-payment networks. But foreigners buy KoryoLink cards (featured in this material) with Narae Cards, so I am not sure what exactly is going on. Maybe KoryoLink Cards for North Koreans (as opposed to foreigners) can be bought on the Jonsong card on the Ullim Network and foreign KoryoLink cards care bought with Narae cards issued by FTB? Maybe I am just overthinking all of this… Here are  some other Ullim member cards featured in DPRK Today (KKG Bank was circled by me):

The cards featured in the lower image are (clock-wise from the top):
1. Koryo Bank
2. Jonsong Card
3. Pyongyang Children’s Hospital
4. Ryugyong Health Complex
5. Pyongyang Information Technology Bureau
6. Sci-Tech Complex

DPRK Today has also published information on the Pyongyang Bike Share Card, “Ryomyong” (려명자전거카드). This card is also part of the Ullim Network.

Recently, North Korean media also highlighted an electronic payment card for the Kwanghung Shop located in Rakrang District. It is unclear if the Kwanghung Shop card is related to the Ullim Network since it has not appeared in any of the marketing materials yet.

According to the report, the Kwanghung Shop card can be used offline and for online purchases. The shop also claims to offer delivery services for their goods if ordered online  or by phone.

According to KCTV news (2018-2-23), the Energy Information Research Institute (전력정보연구소) under the Ministry of Electric Power Industry (전력공업성) is developing a payment card and mobile phone payment app:

The research discussed in the video is part of the National Power Management System (국가통합전력관리체계) named Pulyagyung (불야경/Bright Night Lights). The phone payment system displayed is a prototype remote electricity allocation system that allows retail electricity consumers to order electricity service from their mobile device instead of going to a physical office to have power allocated to a specific location.

Implications: There is a bright and a dark side to this technology. On the light side, we can group benefits to consumers: Payments are facilitated, savings options are increased, transactions costs are lowered meaning consumers benefit even as individual firms may earn float from the technology.

The dark side of the technology is of course how it can be used by the government for purposes of control/appropriation. In the old days, North Korea (and many other communist and developing countries) kept foreign currency out of the hands of their people through the use of Foreign Exchange Certificates (FECs). People had to change their foreign exchange into “green” money (for capitalist countries) and “red” money (for communist countries) to spend in local hard currency shops. This allowed the spenders to use their hard currency value to purchase imported goods while the actual hard currency paper stayed out of the hands of the people in the shops. This system was scrapped in the early 2000s. Electronic payment technologies mark a return to the goals of the FEC system…People can have foreign exchange balances to spend on imported goods at hard currency shops, but the actual paper currency remains on deposit at a bank.

This is bad news for North Korea’s black market and unofficial economy as well. With electronic payments it is harder to hide income and transaction history from the government (for tax/appropriation purposes). It would be very easy for officials in an anti-corruption investigation to pull up a spreadsheet of ones legal income and transactions to see if there is a substantial mismatch with your assets and standard of living.

Anyway, we will see how this develops. There is still a great deal we do not know.

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On the December Dandong-Sinuiju bridge closing

Friday, November 24th, 2017

By Benjamin Katzeff Silberstein

Yesterday, Japan’s Yomiuri Shimbun reported that the Dandong-Sinuiju bridge will be closed during the coming weeks. The bridge is to be closed for ten days. Ostensibly for repairs, they said China was also closing the bridge for political reasons.

Should the bridge be closed for any longer period of time, that would be very problematic for North Korea (and for traders on the Chinese side, too). Around 70 percent of trade between the two countries is estimated to go through this connection point. Given North Korea’s poor infrastructure, re-routing goods transports through other parts of the country would likely be difficult.

But the closing most likely is not a measure taken to punish North Korea or the like, despite the current context. First, as many travellers going across the bridge attest to, repairs are in dire need. Second, the end of the year typically sees a lull in goods flows across the border anyway. Transport volumes are cyclical and no one point in the year is fully representative for the rest. Third, simply closing up the bridge would seem like an odd blanket-type measure, and should China want to punish North Korea, there are certainly much more efficient ways of doing so.

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Latest in North Korea Tourism: Pyongyang Central Court

Thursday, November 2nd, 2017

By: Benjamin Katzeff Silberstein

Have you ever wondered what it’s really like to sentenced to years and years of hard labor for actions that wouldn’t be called “crimes” in most of the world? Ever wanted to visit a site where show trials have taken place, where defendants were later sentenced to death for trumped-up charges of spying for the American imperialists? Now’s your chance, with Swedish North Korea tour operator Korea Konsult. From their October newsletter:

You wish is our command! Visit the central court of Pyongyang and meet Korean judges to receive a legal consultation or ask questions about the legal system.  What are you waiting for? Start here. Book today

Presumably this is an offer and not a threat…

One may wonder how these legal consultations go down. “What is my best course of action if I have taken part in an anti-state demonstration, violating article 59, chapter 3, of North Korea’s criminal law?”.

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An Open Letter to Google and the Sanctions Compliance/Enforcement Community

Tuesday, September 12th, 2017

UPDATE: Here is coverage in CNN, Washington PostWall Street Journal, and Vice.

ORIGINAL POST: Google blocked several important YouTube channels that make North Korean television broadcasts available to the public. This action deals a grave setback to the work of open-source researchers focused on North Korea’s leadership, economy, military, and human rights situation.

The two most important channels which were blocked are:
1. Uriminzokkiri  (terminated for “violating YouTube’s community guidelines” on 2017-9-8)
2. Chongryun (first terminated for “violating YouTube’s community guidelines” on 2017-9-8, then restored on 2017-9-11, then terminated a second time due to “legal complaint” on 2017-9-12) [dates are approximate]

These YouTube channels DO NOT use advertisements and hence DO NOT generate revenue for the North Korean government in any way. In light of this, I do not understand how they can be thought to violate any US, EU, or UN sanctions regime.

[UPDATE: This may be unrelated to finance. E.O. 13687 blocks the property and interests in property of persons determined by the Secretary of the Treasury, in consultation with the Secretary of State, to have materially assisted, sponsored, or provided financial, material, or technological support for, or goods or services to or in support of, the Government of North Korea or any person whose property and interests in property are blocked pursuant to the E.O.

If Google closed the YouTube accounts under this provision, then this is a case of regulations being written so broadly that they hit and destroy assets that are actually important to the US policy community. I am no lawyer, but I am told Google could apply for an OFAC license to get a waiver from this executive order, but why would they want to bother expending the resources for something that does not affect their bottom line? In this case it is just easier for them to be done with the business entirely. The lesson is here is that if you find North Korean content on the Internet, copy it and don’t make it public for fear that it falls under US jurisdiction in some way and can be deleted under threatened/actual legal action.]

These North Korean videos are, however, indispensable sources of information for us on the outside. We use them for multiple purposes, including:

1. Tracking the movements of Kim Jong-un around the country.

2. Identifying new economic, security, and military infrastructure.

3. Obtaining information on bureaucratic organization and domestic policy developments.

4. Knowing what the North Korean government is telling its own people.

5. Knowing what messages the North Koreans may expect other governments, including that of the United States, to receive.

6. Corroborating/falsifying other information on North Korea.

This is not an exhaustive list.

Here are just a few examples of the work that has been done using television footage from these closed YouTube channels:

North Korea’s No. 65 Factory Is Not a Missile Base,” 38 North, August 7, 2017
Sometimes a Cigar is Just a Cigar,” 38 North, May 5, 2017
What One Photo Tells Us About North Korea’s Nuclear Program,”  New York Times, February 24, 2017
Can Satellite Imagery Help Us Evaluate the Kim Jong-un Economy?” KDI 북한경제리뷰 2016년 12월
KPA Navy Upgrades in the East Sea,” 38 North, September 2016
Has Camp 18 been re-opened or merged with Camp 14?North Korean Economy Watch, September 30, 2016
Machine Plant Managed by Ho Yong Chol,” Arms Control Wonk, August 15, 2016
Five Things You Need to Know about Kim Jong Un’s Photo Op with the Bomb,” 38 North, March 11, 2016
Video Analysis of the DPRK SLBM Test,” Arms Control Wonk, January 12, 2016
A New ICBM for North Korea?” 38 North, December 22, 2015
North Korea’s Special Economic Zones: Plans vs. Progress,” 38 North, November 23, 2015
Kim Jong-un Tours Pesticide Facility Capable of Producing Biological Weapons,” 38 North, July 9, 2015 (and more follow-up research here)
Pyongyang’s Perpetual Power Problems,” 38 North, November 25, 2014
A Tale of Two Kaesong Industrial Zones: Not All Foreign Investment is Created Equal (Sam Pa),” 38 North, July 17, 2014
The December 7 Factory: Producer of Maxi Pads and Naval Stealth Technology,” 38 North, April 9, 2014
That Ain’t My Truck: Where North Korea Assembled Its Chinese Transporter-Erector-Launchers,” 38 North, February 3, 2014
Exclusive: Fit for a princess: Kim Jong Un’s $7m yacht,”  NK News, June 18, 2013.
Speculation time: A new kwan-li-so or expansion of Camp 14?,” North Korean Economy Watch, May 6, 2013

In addition, the following heavily referenced blogs and specialty media companies (in addition to every major media organization) rely on KCTV footage posted to YouTube:

38 North
38 North Digital Atlas
NK News
Arms Control Wonk
North Korean Economy Watch (This site)
North Korean Leadership Watch
North Korea Tech

This list is also far from exhaustive…

In summary: These channels DO NOT generate any revenue for the North Korean government. These channels DO generate valuable information for us. Seven years of data tracking the end of Kim Jong-il and the rise of Kim Jong-un have simply vanished. PLEASE RESTORE THESE DATA SOURCES AS SOON AS POSSIBLE.

PS: Martyn Williams, who picks up North Korean television on his own satellite dish, sent me these screen shots of a North Korean 3-D printer that aired on NK television after the YouTube accounts were closed. Wouldn’t you like to know more about them?

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North Korea’s ICBM-test, Byungjin and the economic logic

Tuesday, July 4th, 2017

By Benjamin Katzeff Silberstein

At 3:30PM GMT+9 on Tuesday July 4th, North Korean television announced that the country had successfully tested an intercontinental ballistic missile earlier in the day. Wall Street Journal:

The missile, identified as the Hwasong-14, was launched at a steep trajectory and flew 933 kilometers (580 miles), reaching an altitude of 2,802 kilometers, according to North Korean state television. The numbers are in line with analyses from U.S., South Korean and Japanese military authorities.

US Secretary of State, Rex Tillerson, later confirmed that the launched missile was an intercontinental ballistic one.

Here in Seoul, things seemed to continue on as usual, which tends to be the case in this city more than used to its fair share of similar news. The biggest strategic consequence, of course, is that for the US. A successful intercontinental ballistic missile of this sortcould potentially strike anywhere in Alaska.

With the latest launch, North Korea takes one step further along the nuclear side of the Byungjin lineof parallel development of nuclear weapons and the national economy, and arguably, one step back on the economic side of the dual-track policy. In the formulation of the Byungjin line, of course, both are interrelated. Missile launches are often described as evidence of progress in industry and science, ultimately benefitting economic progress. This launch was no exception. From KCNA:s statement yesterday, July 4th 2017 (my emphasis):

The success in the test-fire of inter-continental ballistic rocket Hwasong-14, final gate to rounding off the state nuclear force, at just one go is a powerful manifestation of the invincible state might and the tremendous capability of the self-reliant national defence industry of Juche Korea that has advanced at a remarkably rapid pace under the great Workers’ Party of Korea’s new line on the simultaneous development of the two fronts, and a great auspicious event to be specially recorded in the history of the DPRK which has long craved for powerful defence capabilities.

This launch happened in a context where North Korea is already under sanctions designed to strike at its coal exports, one of its most important sources of income, and where the US has just signaled its resolve to go after North Korea’s financial channels through secondary sanctions of Chinese entities. At the same time, Kim Jong-un’s tenure has very much come to be associated with some economic progress (albeit from a low level, and primarily benefitting the relatively privileged classes), symbolized by projects such as the recently opened Ryomyong street.

It is not yet clear what the consequences will be. The US will likely try to add more sanctions targeted against specific entities and persons that help North Korea evade sanctions, and acquire equipment for its nuclear and missile programs.

The US will probably also call for international sanctions, but as Chad O’Carroll points out, the US may have a hard time getting such measures through in a quick manner given its currently tense relationships with both Moscow and Beijing. The US may also further push Beijing to implement the already existing sanctions against North Korea, but nothing appears to have changed with the claimed ICBM-test that would fundamentally alter China’s strategic calculations in the region. In other words, it continues to regard North Korea as a buffer between itself and US forces in the region, and as a geopolitical asset.

Whatever happens, it is safe to assume that it will not be good news for North Korea’s international ties in diplomacy, trade, finance, you name it. It would be easy to assume that economic progress and nuclear weapons development are mutually exclusive, since the second leads to further international isolation and economic sanctions, and therefore hampers the first.

In reality, that may be true. The North Korean Byungjin narrative, that weapons developmenthelpseconomic progress, is difficult to swallow, especially when one considers the opportunity cost that the weapons programs carry, both in terms of domestic resource dedication and the cost in international isolation.

But there is another way to look at it. Whatever the actual consequences will turn out to be, North Korea is making a strategic calculation that the gains from the test, and from overall nuclear weapons and missiles development, will be greater than the potential costs and downsides. Consider the following two factors:

First, North Korea has made economic progress in the past few years, and particularly since Kim Jong-un came to power, even under years of severe sanctions. North Korea has been under various forms of UN Security Council sanctions since its first nuclear test in 2006. During these years, its economic development has been impacted far more by domestic policy decisions than by international developments.

Again, we are absolutely not talking about any growth miracle, and some probably exaggerate the degree of the wealth increase in North Korea over the past few years. But without a doubt, North Korea is far better off now than it was eleven years ago, and worlds apart from the famine of the 1990s. Food insecurity prevails in North Korea but the country has not seen widespread starvation since the late 1990s, and largely thanks to better economic frameworks (or rather less predatory), and increased space for private production and trade within the economic system, things are looking much better today than in many years.

Just look at this video recently published by the Daily NK, from Chongjin, one of North Korea’s largest cities in its northeast. Is this long-term, sustainable growth that will eventually lead North Koreans to enjoy the same prosperity as their counterparts in South Korea or even China? Probably not. But at least it’s something.

Second, and relatedly, North Korea likely has a significant amount of channels for trade and various transactions that are not commonly known, but that play highly significant roles for the economy. For example, consider the information that Ri Jong Ho, a former official in North Korea’s Office 39, supplied in a recent interview with Kyodo News. Ri claims that North Korea procures up to 300,000 tons of fuel and various oil products from Russia each year, through dealers based in Singapore. As a point of comparison, a commonly cited figure for crude oil supplies from China is 520,ooo tons per year. Proportionately, then, 300,000 tons is not close to a majority, but still a significant amount for North Korea. While intelligence services or others with access to classified information may have known this already, Ri’s claims, if true (they have not and in all likelihood cannot be fully corroborated),

The point here is that North Korea has gotten so used to going through back channels and unconventional means to acquire highly significant amounts of supplies required for its society to function. It is an economic system where unconventional (and often illicit) channels of trade are not exceptions, but core parts of the economic management toolbox. This is not to argue that sanctions do not or cannot work. Rather, it shows the extent to which unconventional methods are institutionalized within economic management in North Korea.

The North Korean government is no monolith, and there are almost certainly some parts of the governing apparatus that are more and less pleased with the ICBM-test. But in the higher echelons of the leadership, the strategic calculation is probably that even with the added sanctions that are very likely to come, North Korea will be able to continue along roughly the same economic strategies as it has thus far. Perhaps we can call it North Korea’s own “strategic patience”: continuing with patchwork strategies for international economic relations, with little concern for the impact of lack of sustainable growth on people’s livelihoods, while banking on eventual recognition as a nuclear power. Only time will tell whether targeted secondary sanctions will change that calculation.

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KCNA statement on North Korea’s ICBM-launch

Tuesday, July 4th, 2017

Benjamin Katzeff Silberstein

From KCNA:

Pyongyang, July 4 (KCNA) — The Academy of Defence Science of the Democratic People’s Republic of Korea released the following report Tuesday:

Scientists and technicians of the DPRK Academy of Defence Science successfully carried out the test-fire of inter-continental ballistic rocket Hwasong-14, newly researched and developed by them under the strategic decision of Kim Jong Un, chairman of the Workers’ Party of Korea, chairman of the State Affairs Commission of the DPRK and supreme commander of the Korean People’s Army.

The rocket blasted off from the northwestern part of the DPRK at 9:00, July 4, Juche 106 (2017) to make 39 minute flight along its pre-set trajectory before accurately hitting the target waters in the open sea in the East Sea of Korea.

The test-launch was carried out at the maximum angle launch system and had no adverse effect on the security of neighboring countries.

The rocket flew 933km, reaching an altitude of 2, 802km.

Kim Jong Un, Supreme Leader of our party, state and the army, personally observed the process of the test-launch in field and solemnly declared before the world its shining success.

The success in the test-fire of inter-continental ballistic rocket Hwasong-14, final gate to rounding off the state nuclear force, at just one go is a powerful manifestation of the invincible state might and the tremendous capability of the self-reliant national defence industry of Juche Korea that has advanced at a remarkably rapid pace under the great Workers’ Party of Korea’s new line on the simultaneous development of the two fronts, and a great auspicious event to be specially recorded in the history of the DPRK which has long craved for powerful defence capabilities.

As a full-fledged nuclear power that has been possessed of the most powerful inter-continental ballistic rocket capable of hitting any part of the world, along with nuclear weapons, the DPRK will fundamentally put an end to the U.S. nuclear war threat and blackmail and reliably defend the peace and stability of the Korean peninsula and the region. -0-

Original statement can be found on the KCNA website:
Report of DPRK Academy of Defence Science
Korean Central News Agency
2017-07-04

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An affiliate of 38 North