Archive for the ‘Uncategorized’ Category
A new Congressional Research Service (CRS) report is out on foreign assistance to North Korea. The authors are Mark Manyin and Mary Beth Nikitin.
Here is the summary:
Between 1995 and 2008, the United States provided North Korea with over $1.3 billion in assistance: slightly more than 50% for food aid and about 40% for energy assistance. Since early 2009, the United States has provided virtually no aid to North Korea, though episodically there have been discussions about resuming large-scale food aid. Additionally, the Obama Administration officials have said that they would be willing to consider other types of aid if North Korea takes steps indicating that it will dismantle its nuclear program, a prospect that most analysts view as increasingly remote. As of March 2014, barring an unexpected breakthrough, there appears little likelihood the Obama Administration will provide large-scale assistance of any type to North Korea in the near future. Members of Congress have a number of tools they could use to influence the development and implementation of aid programs with North Korea.
Food Aid. Large swathes of North Korea’s population have suffered from chronic malnutrition since the mid-1990s. Food aid—largely from China, South Korea, and the United States—has been essential in filling the gap between North Korea’s supply and demand, though since 2009 donations from all countries except China have dwindled to a minimal amount. Observers and activists attribute the North Korea’s malnutrition and occasional starvation problems to food shortages—which at times have been massive—and more fundamentally to the unequal distribution of food caused in large measure by the North Korean government’s deliberate decisions and policies. In 2013, an improved harvest appeared to reduce North Korea’s chronic grain shortfall to some of the lowest levels since the 1990s. Yet outside food groups reported continued malnutrition among vulnerable sectors of the population, especially children. In 2014, a United Nations Commission of Inquiry on North Korea’s human rights conditions found that the North Korean government’s “act of knowingly causing prolonged starvation” amounted to crimes against humanity.
Providing food to North Korea poses a number of dilemmas. Pyongyang has resisted reforms that would allow the equitable distribution of food and help pay for food imports. The North Korean government restricts the ability of donors to operate in the country. Additionally, multiple sources have asserted that some of the food assistance is routinely diverted for resale in private markets or other uses. However, it is likely that food aid has helped feed millions of North Koreans, at times possibly staving off a repeat of the famine conditions that existed in North Korea in the mid-late 1990s, when 5%-10% of the population died. South Korean President Park Geun-hye’s government has indicated that it would be willing to offer North Korea food aid as part of her plan to foster a “new era” in inter-Korean relations. In 2013, the South Korean government donated around $12 million to United Nations humanitarian organizations that supply humanitarian aid, including some food, in North Korea.
Energy Assistance. Between 1995 and 2009, the United States provided around $600 million in energy assistance to North Korea. The aid was given over two time periods—1995-2003 and 2007-2009—in exchange for North Korea freezing its plutonium-related nuclear facilities. In 2008 and 2009, North Korea also took steps to disable these facilities. However, no additional energy assistance has been provided since 2009, when Pyongyang withdrew from the Six-Party Talks—involving North Korea, the United States, China, Japan, and Russia—over North Korea’s nuclear program. The move followed condemnation and sanctions by the U.N. Security Council for North Korea’s April 2009 launch of a suspected long-range missile and May 2009 test of a nuclear device.
Denuclearization Assistance. In 2007 and 2008, the United States gave technical assistance to North Korea’s nuclear disablement process. In 2008, Congress took steps to legally enable the President to give expanded assistance for this purpose. However, following North Korea’s actions in the spring of 2009, Congress rejected the Obama Administration’s requests for supplemental funds to use in case of a return to denuclearization. Since then, Congress has not approved and the administration has not requested any funds for denuclearization since North Korea has not agreed to return to the nuclear disarmament process.
This site does not focus on human rights issues, but I want to point out that the commission of inquiry report is out.
1. Though not directly cited, my work at identifying the expansion of camp 14 and camp 25 and changes to camp 16 was used by other contributing groups and individuals (mostly HRNK)–some organizations are better at citations than others.
3. Following publication of the report Botswana cut diplomatic ties with the DPRK. Previous posts on this web page related to Botswana can be found here. I am unaware of any significant relationship between the two countries, though the North Koreans did build Gaborone’s Three Dikgosi (Chiefs) Monument. More in Xinhua here.
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I joined the NK News service as a reader and as a regular contributor. From May 1, 2013 most of my original work will appear there.
North Korean Economy Watch will continue to be updated with generally available public information so it will continue to serve as a useful resource to journalists, academics, policy makers, and the NGO community.
All of my contributions can be found here, but below are links to individual posts:
I have been very busy this autumn, so non-remunerative blogging has taken a back seat. As you are aware, more content than ever is published on the DPRK each day and going through it all is a major drain on time! It’s certainly not like the old days (2006-2010) when you could read everything about North Korea that day before lunch! So I will be slowly updating this web page (all posts will be back-dated) and I hope to be caught up by the end of the year.
In the meantime, I have published several articles at NK News.
The ever-innovative NK News is selling 2014 calendars featuring great photography of the DPRK. Order yours below.
I really enjoyed my 2013 calendar!
UPDATE 91 (2014-1-14): ROK spends 1/3 of DPRK budget for FY 2913. According to Yonhap:
South Korea spent less than one-third of its fund intended to boost exchange and cooperation with North Korea last year, the unification ministry said Tuesday.
South Korea spent 296.4 billion won (US$280 million) last year, or 27 percent of the 1.09 trillion won earmarked, for the inter-Korean cooperation fund, according to the ministry, which handles inter-Korean affairs.
The figure represents the highest level in six years as the government paid insurance money to small South Korean companies that operate plants in the North’s border city of Kaesong.
The South Korean companies received insurance money worth 177.7 billion won due to the months-long shutdown of the inter-Korean joint factory park in Kaesong last year.
In 2008, the ministry spent 18.1 percent of the inter-Korean cooperation fund. The ratio dropped to 8.6 percent and 6.5 percent in 2009 and 2012, respectively, as inter-Korean relations soured.
The factory park resumed operations in September, more than five months after the North unilaterally closed it in anger over joint annual military exercises between South Korea and the United States. In August, Pyongyang pledged not to shut the park down again “under any circumstances.”
More than 44,600 North Koreans work at 120 South Korean firms operating in the park to produce clothes, shoes, watches and other labor-intensive goods. The project serves as a major legitimate revenue source for the impoverished communist country.
UPDATE 90 (2013-12-30): The ink has barely dried before the DPRK has seemed to breech it. This time the DPRK has demanded that the firms in the KIC pay back taxes. According to Yonhap:
North Korea has demanded that South Korean firms operating in a jointly run factory park in the communist nation pay taxes to North Korea, an official said Monday, in an apparent breach of a September deal.
The North said in a notice last week that the firms in the factory park in the North’s western border city of Kaesong should pay taxes incurred between Jan. 1 and April 8, according to the official handling the issue at the unification ministry.
The ministry, which handles inter-Korean affairs, said the North’s demand did not make any sense, and it was in talks with North Korea over the issue.
The move comes three months after North Korea agreed not to collect taxes from the South Korean firms for 2013 to make up for their losses following its unilateral closure of the factory park on April 9.
In September, the sides resumed the operation of the factory park, a month after the North pledged not to shut it down again “under any circumstances.”
Although the North Korean government took a loss on “tax revenue” it still made plenty of money from the confiscated wages of its workers. According to the article:
The North earned US$80 million in wages for its workers last year.
UPDATE 89 (2013-11-24): Inter-Korean trade has started to recover.
UPDATE 88 (2013-11-13): The Korea Times reports that the Kaesong firms are getting loan payments deferred and a new round of talks is underway. According to the article:
The government said Wednesday it will allow companies with factories at the inter-Korean Gaeseong Industrial Complex (GIC) to delay payment of loans due within the next six months.
“The due date for loans taken out from the state-run inter-Korean cooperation fund will automatically be pushed back six months,” said Park Soo-jin, vice-spokeswoman of the Ministry of Unification that handles inter-Korean affairs, Wednesday, during a regular briefing. “The amount equals to 46 percent of all loans provided by the fund.”
According to the ministry, 28 out of the total 123 companies, which have taken out loans totaling 9.7 billion won ($ 9 million), will benefit from this measure.
Up to date, companies that have factories in North Korea’s border city of Gaeseong altogether borrowed about 21.3 billion won ($ 19.9 million) from the cooperation fund.
The move by the government is aimed at easing the pressure on GIC companies strapped for cash in the face of declined production as a consequence of the five-month hiatus of operations because of heightened tension on the Korean Peninsula earlier this year.
In the same article, the Korea times reports on the latest round of talks between the DPRK and ROK over the management of the KIC:
Meanwhile, on the same day, working-level officials from the South and North met to discuss ways of better protecting investment at the GIC and promote its internationalization.
The meeting of two sub-panels of the Gaeseong joint management committee were held in the North’s border city, the ministry said.
“The two sub-panel meetings, the first since Sept. 26, are designed to bolster the overall global competitiveness of the GIC,” a ministry official said.
There are altogether two sub-panels under the larger GIC joint management committee that has taken charge of running the complex since operations resumed in September.
During the investment protection panel meeting, the two sides reportedly discussed the establishment of an official dispute settlement regime coupled with how to attract more foreign investors into the GIC.
Previously, the two Koreas agreed to hold an IR session on Oct. 31 but it was canceled when little headway was made in a separate sub-panel meeting to change rules dealing with travel, communication and customs at the joint complex in North Korea.
The ministry also said another meeting to discuss the rights and safety of South Koreans working in Gaeseong will be held today.
But the date for the travel and communication meeting has yet to be fixed because of its sensitivity.
Read previous posts below:
UPDATE 1 (2013-11-13): KCNA reports on a groundbreaking for the new “Latest Science and Technology Development Zone” in Kaesong:
Construction of Kaesong Latest Science, Technology Development Zone Starts
Kaesong, November 11 (KCNA) — The ground-breaking ceremony for building the Latest Science and Technology Development Zone was held in Kaesong City on Monday.
Present there were Jang Su Nam, representative of the Peace and Economy Development Group, officials concerned, builders, employees of the zone and foreign figures concerned and guests.
Jang said in his address that the construction of the zone would help promote the friendship and develop the cooperation among various countries.
He stressed that the DPRK provides foreign businesses with all conditions for investment.
He expressed belief that the construction of the zone would be completed as soon as possible thanks to the positive efforts of the builders and figures concerned.
Then foreign figures made speeches.
They expressed conviction that the construction of the zone would contribute to promoting the economic development in the region and improving the Korean people’s living standard.
They expressed hope that the figures concerned of various countries would support and encourage the successful construction of the zone.
KCNA also published these two articles (2013-10-13):
Building of High-Tech Industrial Park Will Be Conducive to South-South Cooperation: Diplomats
Pyongyang, November 13 (KCNA) — A ground-breaking ceremony for building a high-tech industrial park was held in Kaesong, the DPRK on Monday.
Addressing the ceremony, Diare Mamady, Guinean ambassador to China, said:
Promoting such a project will enhance the confidence building, the economical growth, the trade and other exchanges and improve the overall cooperation with all neighboring countries of the DPRK.
The project is opening a wide way to an integrated cooperation between Asian countries but not limited to that only, it is paving a new route for south-south cooperation, inspiring developing countries in their search of integrated economies to widen their narrow markets and transfer technologies to launch their development.
Shared growth should be the key philosophy of south-south cooperation, which has to be widespread by economical entities like “Peace Economic Development Group”, in view to cultivate and keep sustainable peace, necessary to the well being of nations.
I would like to express all our greetings and extend congratulations to the great leadership of DPRK, to seize this opportunity which is enlightening its constant and sustainable peace policy.
Making a speech at a press conference held at the end of the ground-breaking ceremony, Multi-Kamara Abubakarr, ambassador of Sierra Leone to China, extended his heart-felt congratulations to Kim Jong Un, supreme leader of the DPRK, for making the visionary decision behind the landmark project and accelerating the economic and social development for the country and people.
In the light of my experience from 20 odd years-long service in UNDP and roving ambassadorial activities in over 10 Asian countries, I am convinced that the project is of great potential and that the establishment of the park will put an emphasis on promoting economic development in the region and improving the living-standards of the Korean people.
High-Tech Industrial Park to Be Built in Kaesong, DPRK
Pyongyang, November 13 (KCNA) — The Peace Economic Development Group started the construction of a high-tech industrial park in Kaesong City, the DPRK, with a ground-breaking ceremony on Monday.
Present at the ceremony were Jang Su Nam, representative of the group, officials concerned, builders, employees of the park, foreigners concerned and other invitees.
The group is a consortium of China’s Hong Kong, Singapore, Australia, Middle East and Africa.
The park will have an IT center, hotel, dwelling houses, school and other buildings, as well as a power plant.
Heh Teck Siong, general manager of the group, told the ceremony that it was a great honor for the group to take part in the economic development of the DPRK.
He went on to say:
We are the developers of the high-tech industrial park in Kaesong.
The spirit of our group is to build up economic win-win cooperation with global partners and especially with Asian countries.
We believe that the park will contribute to the economic, confidence and security improvement in the region, and the quality of people’s life.
I am pleased to notify to the friends from the world that the park is kicking off.
Jang Su Nam said in his address that the DPRK government has shown deep care for the industrial park, providing all conditions for enterprises of different countries to invest in it.
The completion of the park will encourage the Korean people in the efforts for building a knowledge-based economic power and greatly contribute to deepening friendship and developing cooperative relations among different countries, he added.
He expressed belief that the construction of the park would be completed at an early date thanks to the energetic efforts of its builders and personages concerned.
Here is a link to one of the articles in Korean. The “Peace Economic Development Group (평화경제개발그룹)” appears to be a different organization than the “Economic Development Commission/Association”. I am not sure how/if they are related.
ORIGINAL POST (2013-10-18): According to KCNA:
Consortium to Invest in DPRK
Pyongyang, October 17 (KCNA) — A consortium consisting of Jurong Consultants and OKP Holdings of Singapore, P＆T Architects ＆ Engineers Ltd. of Hong Kong, China and other well-known companies of the East Asia and the Middle East is taking part in developing projects in the Democratic People’s Republic of Korea.
The consortium agreed with the DPRK’s related organs on collaboration in building the Kaesong Hi-Tech Industrial Park and Highway Toll Road from Capital Airport to Pyongyang City.
The projects will soon begin.
According to AFP:
South Korea’s Unification Ministry spokesman said it had no official comment, but stressed the project had ‘nothing to do with the existing Kaesong zone’.
OKP Holdings said its involvement was “in the preliminary stages”, while Jurong and P&T both declined to comment.
The Kaesong Hi-Tech Industrial Park will be different from the Kaesong Industrial Park–which is rather low-tech by western standards. South Korean citizens, firms, and agencies are forbidden from making high-tech investments in the DPRK by the Wassenar Arrangement, which is why none of the participating firms listed by KCNA are from the ROK.
It is possible that the new Beijing Capital Airport – Pyongyang Toll Road could utilize the new Yalu/Amnok River Bridge.
According to Radio Free Asia:
The engineer [source], from North Hamgyong province, said that North Korean authorities had held negotiations for electricity supply with China “four times since May” in a bid to secure the power it needs to buoy its failing economy, but had “not achieved meaningful success.”
According to the electrical engineer, North Korea is more than 16 million kilowatts short of the annual electricity production it needs to adequately supply the country—unable to meet about 80 percent of its needs.
“North Korea generates only 3.6 million kilowatts per year on average and it needs 20 million kilowatts to solve the electricity shortage,” he said.
Some 13 million kilowatts are needed to operate the country’s factories, institutes, and hospitals, he said, while around 7 million kilowatts are needed to supply the country’s educational and cultural facilities, as well as the population’s personal needs.
He said that at the current capacity it is “impossible” to improve the country’s economy.
The DPRK has disclosed energy production numbers here. Take them for what they are worth.
Read the full story here:
North Korea Seeking Electricity Supply from China
Radio Free Asia
UPDATE 1 (2015-10-15): Yonhap reports on the activities carried out at the expo:
North Korean companies participating in an annual trade fair with China signed a total of 93 preliminary deals worth US$1.6 billion at the event, China’s state media reported Tuesday.
North Korea and its economic lifeline, China, wrapped up the trade expo, the second of its kind, on Monday in the Chinese border city of Dandong with some 130 North Korean firms attending the five-day exhibition.
The North Korea-China Economic, Trade, Culture and Tourism Expo came as China has been deepening its economic ties with the North even though Beijing appears to have become increasingly frustrated with Pyongyang’s nuclear weapons program.
During the trade fair, preliminary investment deals worth $510 million and export deals worth $1.09 billion were signed, the official China News Service reported.
North Korea and China held the inaugural trade fair last year, with $1.26 billion worth of preliminary deals signed.
In the first eight months of this year, two-way trade between North Korea and China stood at $4.09 billion, compared with $4.1 billion for the same period last year, South Korean government data showed.
ORIGINAL POST (2013-10-10): According to Yonhap:
An annual trade fair between North Korea and China kicked off in the Chinese border city of Dandong on Thursday, with some 130 North Korean firms attending the five-day exhibition, organizers said.
The North Korea-China Economic, Trade, Culture and Tourism Expo, the second of its kind, comes as China is deepening its economic ties with the North even though Beijing appears to have become increasingly frustrated with Pyongyang’s nuclear weapons program.
About 500 North Koreans, including a 115-member propaganda troupe, joined the exhibition that features 700 booths for products ranging from foods and garments to mining and machinery equipment, according to the China Council for the Promotion of International Trade (CCPIT), which organized the event.
Of the booths, about 200 were allocated to buyers from Pakistan, Malaysia, India, Russia, Hong Kong and Taiwan, a Dandong branch of the CCPIT said.
North Korea and China held the inaugural trade fair last year, with US$1.26 billion worth of preliminary deals signed.
According to Xinhua:
The second China-DPRK economic, trade, culture and tourism expo has opened in the border city of Dandong in Northeast China’s Liaoning province.
The DPRK’s National Folk Art Troupe performed its ethnic dances at the opening ceremony on Thursday. A 500-member delegation from the DPRK is attending the expo which lasts from Thursday to Monday.
The expo is by far the largest foreign economic and trade event for the DPRK. And more than 90 percent of the country’s foreign trade companies have sent their representatives. Meanwhile there are over 10,000 traders from China.
The expo also attracts companies from Malaysia and Thailand. There are 16 events including promotion of China-DPRK commodities, and DPRK tourism. The DPRK’s investment policies are also to be introduced to attract investors.
The first such expo was held in 2012 with 72 agreements of cooperation signed. They have a combined value of over 1 billion US dollars.
According to KCNA:
The 2nd DPRK-China Economic, Trade, Cultural and Tourism EXPO opened on Thursday with due ceremony in Dandong, China.
Colorful events are to be held during the EXPO including trade fair, fine art exhibition, exhibition of photos on tourism and art performance.
Present at the ceremony were officials of the party and government of Liaoning Province and the city and those in the field of culture, economy and trade including Bing Zhigang, vice-governor of the province, citizens in Dandong, Liu Hongcai, Chinese ambassador to the DPRK, and his embassy members and diplomatic envoys of different countries to the DPRK.
Also present there were members of the delegation of the 2nd DPRK-China Economic, Trade, Cultural and Tourism EXPO led by Hong Kil Nam, vice-chairman of North Phyongan Provincial People’s Committee, Kim Kwang Hun, DPRK consul general to Shenyang, and Choe Un Bok, chairperson of the General Association of Koreans in China.
An opening speech was made there, which was followed by congratulatory speeches.
The speakers said that the EXPO will be a good opportunity to swap the successes and experience gained in various fields and boost the cooperation between the two countries.
They expressed the conviction that it will contribute to deepening the mutual understanding and trust and promoting the friendly and cooperative relations between the peoples of the two countries.
An art performance was given by the National Folk Art Troupe on the same day.
Prior to this, a reception was given for the participants of the Expo.
Xinhua also published this helpful advice for North Korean policy makers:
China-DPRK economic cooperation is important for maintaining peace and stability in Northeast Asia. China has a long history of investment in the DPRK, and is the country’s biggest trade partner. So what’s it like to do business in the DPRK?
Economic cooperation between China and the DPRK has strengthened as tons of goods are coming in and out the border each day. And the scale of their trade and investment has expanded over the past few decades. But the rapidly developing China-DPRK economic relations have certain problems that need to be solved. Many concerns have been raised in regards to the risk factor when investing in the country.
Today, China’s investment in the DPRK is mainly concentrated on minerals and other strategic resources. And many investors claimed that the main difficulties when they set up businesses in the DPRK is to cope with the country’s frequent policy changes.
Many Chinese companies and manufacturers have come to the exhibition hall for trade talks with the DPRK, and to have a better understanding of the country in which they have invested or intend to invest. The best way to find out the business environment there is to speak with someone who has been there long enough.
“You need to have certain knowledge about the rules and regulations in the DPRK before conducting investments there. A thorough business plan is a good start, and it’s crucial to have a business partner from the DPRK with a strong background,” said Ma Pengxiu, general manager of Dandong Hantong Trading company.
Some Chinese companies that have invested in the DPRK reportedly suffered losses, for which they blame the investment environment in that country. It’s true that enterprises cannot be certain of making profits, no matter which country they invest in they need to cope with local laws and regulations to avoid risks. But it’s also true that the DPRK has to improve its investment environment and make its policies more stable.
“There were companies and individuals who have experienced failures in the investments in the DPRK, so investors in these days are more concerned about the relevant protections from the DPRK side; my advise is to protect your business with a written wontract always,” said Ma.
Needless to say the DPRK delegation at the EXPO this year was well prepared and ambitious in seeking cooperation opportunities with the outside world. The country is keen on drawing investments to beef up its industries. In the meantime the DPRK still needs to take measures to ensure a stable business environment to make it easier for investors to thrive in the country.
Read the full stories here:
N. Korea, China kick off annual trade fair
2nd China-DPRK Expo opens in Dandong