North Korean Economy Watch

According to the Daily NK:

The number of North Koreans entering South Korea has dropped to its lowest level in many years, with the 2012 total unlikely even to reach 50% of the 2011 figure.

A government official met with reporters today to explain the background to the sharp drop, declaring, “Surveillance of defectors has been stepped up a lot, and the authorities have really cracked down on the major routes used as defection paths across the river to China.”

“That’s not all; overall monitoring and control of defectors in North Korea has been strengthened, and the same is true in China, notably in the three northeastern provinces,” he added.

Just 1,202 defectors have entered South Korea this year to date,, the official revealed. As such, the Ministry of Unification estimates that the total for 2012 will be just 1,400, only half of last year’s 2,706. It will certainly be the first time since 2006 that the number of defectors has not reached 2,000.

Previous posts on this topic can be found here 2012, 2011.

Read the full story here:
2012 Defector Numbers Just 50% of 2011
Daily NK
Jeong Jae Sung
2012-11-14

According to the Korea Herald:

A shipment of graphite cylinders usable in a missile program and suspected to have come from North Korea was found in May aboard a Chinese ship en route to Syria in what appears to have been a violation of U.N. sanctions, diplomats said Tuesday.

South Korean officials seized the shipment of 445 graphite cylinders, which had been declared as lead piping, from a Chinese vessel called the Xin Yan Tai, U.N. Security Council diplomats told Reuters on condition of anonymity.

South Korean authorities stopped the ship at the South Korean port of Busan, the envoys said, adding that the cylinders were intended for a Syrian company called Electric Parts.

South Korean officials informed the Security Council’s North Korea sanctions committee about the seizure on Oct. 24, the envoys said, adding that China had offered to help investigate the circumstances surrounding the incident.

“It appears the cylinders were intended for Syria’s missile program,” a diplomat said.

“China assured us they will investigate what looks like a violation of U.N. sanctions.” Diplomats said the graphite cylinders appeared to be consistent with material usable in a ballistic missile program and that South Korea would investigate the case with China.

The shipment to Syria was arranged by a North Korean trading company, diplomats said. One diplomat said the Syrian company that was to have received the cylinders may be a subsidiary of the North Korean trading firm.

North Korea is barred from importing or exporting nuclear and missile technology under U.N. Security Council sanctions imposed on Pyongyang because of its nuclear tests in 2006 and 2009.

Read previous posts about the DPRK and Syria here.

Read the full story here:
Suspected N.K. missile parts seized en route to Syria
Korea Herald
2012-11-14

This fall Marcus Noland has posted three blog entries which feature DPRK trade statistics with China, the European Union, and Russia. I have put the graphs from these posts here as both an archive and as a quick reference for myself. See Dr. Noland’s original posts (linked above) for his analysis.

Chinese Luxury Goods Exports to the DPRK (Published 2012-9-17):

European luxury exports to North Korea (Published 2012-10-18):

Russian luxury good exports to North Korea (Published 2012-11-14):

An FAO/WFP Crop and Food Security Assessment Mission (CFSAM) visited the DPRK from 2012-9-24 to 2012-10-18 (25 days). They assessed the 2012 main crop harvest; forecasted the 2013 production of winter and spring crop; estimated cereal import requirements for the 2012/13 marketing year (November/October); assessed the household food-security situation and estimated food assistance needs.

Read the full report here (PDF).

It is full of data/statistics and well worth reading. You can find even more information on my DPRK Economic Statistics Page.

Here is media coverage of the report: Associated Press 1, Associated Press 2, Yonhap 1, Yonhap 2.

Institute for Far Eastern Studies (IFES)
2012-11-8

North Korea is developing its tourism industry as a way to increase its foreign currency earnings. Recently, there appear an increasing number of tour packages targeted attracting Chinese visitors to the DPRK, with new tour packages actively being promoted.

The Korean Central News Agency (KCNA) reported on October 8 that there are new professional tour programs that are gaining international attention. In the article, new and creative tours were featured, including Mount Paektu tours with [Air] Koryo Airlines and bicycle tours. Mini-golf tours are also reportedly scheduled for next year.

Along with North Korea, Chinese tour companies are also taking interest in this effort and are developing various tour packages via air, land, and sea routes. In June, charted plane tours from Shenyang started, and now new tours from Dalian to Mount Kumgang are also being launched.

Across the border from the North Korean city of Sinuiju is the Chinese city of Dandong, where there are over ten travel agencies that operate daily train tours between the two cities. In fact, during holidays and weekends, more and more Chinese tourists are flocking to the China-North Korean Friendship Bridge that traverses the Yalu River, connecting the two cities.

The recent rise of Chinese tourists to North Korea is attributed to the aggressive marketing schemes of the North Korean government. The State Tourism Bureau teamed up with a Chinese travel company to run a tour to Mt. Paektu. North Korea, faced with international economic sanctions, has limited means to earn foreign currency. The new Kim Jong Un regime is actively seeking ways to earn foreign capital through the tourism industry. Chinese companies are responding positively and swiftly to this change and are coming up with new tourism programs.

North Korea is utilizing its image as ‘closed country’ and ‘hermit kingdom’ to stimulate curiosity among tourists. More and more Chinese are able to enter North Korea without a visa (requiring only their passports) and this is adding to the spike in Chinese tourists to the country. Most Chinese travel agencies are able to make all the necessary travel arrangements to North Korea in less than a week once the interested person submits his/her passport and photos.

However, there are comments from returning visitors that tours are limited to historic and famous sites and somewhat insular as contact with the locals is prohibited. North Korean national security agents accompany all tour groups. Despite this fact, many experts expect the number of Chinese visitors to the DPRK will continue to increase in the future.

*NKeconWatch: For additional information, see “North Korean minders endure Chinese invasion” in the Asia Times (2012-11-8).

The Korea Times (Yonhap) reports the following:

The official North Korean won is increasingly giving way to the U.S. dollar and the Chinese yuan in asset holdings of North Koreans, as well as in North Korean markets, South Korean experts said Tuesday.

Circulation of foreign currencies is on the increase and a vast number of North Koreans are holding their assets, including banknotes, in foreign bills, University of North Korean Studies professor Yang Moon-soo and Kim Seok-jin, an analyst at the Korea Institute for Industrial Economics & Trade, said in a joint paper released at a conference in central Seoul.

Giving the reported simultaneous use of the major world currencies their own term of “dollarization,” Yang said, “It is almost becoming abnormal in the North to hold more than a certain amount of bank notes in North Korean won.”

High-value assets such as houses are being increasingly valued and traded in dollar terms while in the North Korean market, dealers are increasingly relying on dollar-based prices, the professor said.

Devaluation of their own currency due to steep inflation, coupled with fears of a potential government decision to confiscate won notes mainly fueled the “dollarization,” he said.

Read the full story here:
NK sees jump in dollar, yuan-denominated sales goods, assets: experts
Korea Times (Yonhap)
2012-11-6

Joseph Bermudez, Senior Analyst with Digital Globe’s Analysis Center and author of The Armed Forces of North Korea, has posted the latest issue of KPA Journal.

You can download the PDF here.

Topics include:

“KPA Land-based MR-104 DRUM TILT Radar,” by Joseph S. Bermudez Jr.

A December 2010 DPRK propaganda video of a Korean People’s Army (North Korean Army) combined arms exercise contained a scene depicting a land-based variant of the former Soviet MR-104 drum tilt naval target acquisition and fire control radar. This is the first readily available open source image of the land-based variant.

“KPA 17th Tank Brigade (Tank Division, Mechanized Brigade, Mechanized Division), Part II,” by Joseph S. Bermudez Jr.

While much is now known concerning U.S. and U.N. units, organizations and operations during the Fatherland Liberation War (i.e., Korean War) very little reliable and detailed information is available concerning those of the Korean People’s Army (North Korean Army). Ths is especially true for its armored forces, which played a brief but important role during the first year of the conflict. This paper represents an initial e ffort to recount the organization and operations of one of the KPA’s first armored units—the 17th Tank Brigade.

“KPA Wartime Propaganda Leaflet”

Michael Webster, who contributed 4 images of the Han-gang bridges from his collection to the March 2011 (Vol. 2, No. 3) issue of KPA Journal, has provided a KPA propaganda leaflet from his Korean War collection.

“Unusual Visitor to Wonsan Airbase,” by Joseph S. Bermudez Jr.

On November 1, 2012 DigitalGlobe acquired an image of the Wŏnsan-si area, including the Korean People’s Air Force (North Korean Air Force) Wŏnsan Airbase. Aside from capturing the normal collection of MiG-17/-19s and MiG-21s stationed at the airbase the image also captured an An-24 coke taxiing for takeoff at the northern end of the main runway.

According to the Daily NK:

The price of rice apppears to be stabilizing in North Korea as the end of the autumn harvest brings corn to market. However, this year’s corn crop is known to have been below average, suggesting that the current improvement might not last.

According to a source from Shinuiju in North Pyongan Province, “The price has been falling steadily of late, and is currently 5,500won per kilo.” Corn is currently 2,000won/kg, the same source added. Meanwhile, a source in Hyesan reported that the price of a kilo of rice in the jangmadang there is currently 6000won.

The news means that prices have declined by between 200 and 600won since October 23rd in the two cities surveyed. This is the first rice price decline of more than 500won anywhere in North Korea since the start of the year. Indeed, the trend was inexorably upward for much of 2012; rising from 3,500won in January to 7,000won by October.

The Shinuiju source went on to explain the reason for the change, saying, “Corn, which is a substitute for rice, has entered the market, easing prices and improving people’s food supply. This has meant that rice prices stabilized. With all this talk of reform and opening measures there has been a lot of anxiety and prices everywhere were up around 7,000won at one point. This caused a lot of resentment, but some of that has been relieved now.”

The clearest sign that the current price decline is down to the arrival of domestic corn is that the Chinese Yuan to North Korean Won exchange rate has not moved even as the price of rice has fallen. As the Shinuiju source noted, “This current situation is not really sustainable, so the money changers have not moved at all. They are not going to release more Yuan into the market.”

Read the full story here:
Corn Crashes Rice Price Party at Last
Daily NK
Lee Sang Yong
2012-10-31

According to the Daily NK:

According to the Northeast Asian Broadcasting Institute (NABI), the authorities made their first move in March this year, replacing the shortwave transmission equipment at Kanggye Transmission Station in Jagang Province with modern equipment made by Beijing BBEF Electronics Group Co. Kanggye Transmission Station is one of three high output shortwave transmission facilities in North Korea, with the other two being at Pyongyang and in Gujang County, North Pyongan Province.

The measures come pursuant to a June 2011 agreement signed between the North Korean Ministry of Communications and BBEF, under which the latter is required to provide North Korea with modern radio and television transmission equipment and training in its use.

North Korea has two shortwave broadcasters; Chosun Central 1st Broadcast and Pyongyang Broadcast. The first is for the domestic and international audience while the latter serves the international audience only, leading to the assumption that North Korea is replacing its existing transmitters in order to improve its broadcasts targeting South Korea. With the sort of modern equipment arriving from BBEF, North Korean broadcasts will be receivable anywhere in South Korea, no matter where in the North they are broadcast from.

According to NABI, North Korea’s shortwave broadcasting capacity was previously very weak due to worn out and broken equipment. Signal strength was particularly weak, meaning that listeners tended to receive a different channel even when tuned directly to the intended broadcast frequency. According to one defector from Pyongyang who arrived in South Korea in June 2011, the signal strength of Chosun Central 1st Broadcast was so weak at times that it was even unlistenable in most regions of North Korea.

However, the quality has recently improved dramatically, as Park Sung Moon of NABI explained to Daily NK, saying, “Recent analysis of North Korea’s shortwave Chosun Central 1st Broadcast and Pyongyang Broadcast reveal that they are being broadcast clearly and consistently, without interference or signal shifting.”

“In particular, Pyongyang Broadcast is much better than it used to be, but the overall broadcast situation has gotten a lot better,” Park added, going on, “It looks like they have imported the Chinese transmission equipment to improve their South Korea broadcasting.”

Professor Choi Hyung Jin of Sungkyungwan University Information and Communications Department agreed, adding, “If a transmitter is old and worn out then it either takes excessive power to function or the signal strength weakens. Either way, the effect of the broadcast system itself is detrimentally affected. Notably, listeners often cannot hear the broadcast. If you want people to listen, you have to improve your transmitters.”

The other side of the coin is that improved shortwave transmission strength stops incoming signals from reaching listeners.

According to one defector who used to be a part of the Party Propaganda and Agitation Department, “They know that when the Chosun Central 1st Broadcast signal strength is weak, it regularly arrives with outside broadcasts mixed in. I think they want to stop this happening.”

Though I have located many communications towers on satellite imagery of the DPRK, I have yet to definitively identify any of the DPRK’s short wave radio broadcast towers (Pyongyang, Kujang, Kanggye). If you have any information on them, please let me know.

I have located this massive broadcast center in Myohyangsan, but its purpose is unknown to me.

Read the full story here:
North Korean Shortwave Getting Stronger
Daily NK
Mok Yong Jae
2012-10-31

Download the full report (PDF) here.

I have also added it to my “DPRK Economic Statistics Page”.

Here is the Executive Summary:

The last nationwide survey including nutrition indicators was the Multiple Indicator Cluster Survey (MICS) carried out in 2009. It showed that 32.4% of children

The present survey was therefore needed to update the indicators for the population nutritional status. All 10 provinces have been included. Data collection was done from September 17th to October 17th 2012.

The methodology is based on SMART and MICS surveys. It is a clustered, stratified by provinces, two-stage sampling survey. The target population includes children under 5 and their mothers. The sample size per province is 400 children in Pyongyang municipality and 812 children in all other provinces for most indicators.

Chronic malnutrition, despite a modest drop since MICS 2009 (from 32.3% to 27.9% at national level) remains in the ranges labelled ‟medium‟. Stunting has irreversible impact on the development of children as a result on the Country development. The prevention of stunting in early life (starting during or even before pregnancy) as well as the prevention of anaemia in mothers and their children (mainly those under 2 years old) through different multi-sectoral interventions combining nutrition, health, WASH, social protection, food security and agriculture requires more efforts and resources.

The survey also shows a picture of the acute nutritional status of children modestly improved since 2009. The situation is not critical and does not suggest emergency operations. However, attentions need to be paid to such factors as essential medicines, WASH situation and food security which affect the vulnerable children. The presence of acute malnutrition in women is also of concern. Programmes like the management of acute malnutrition at hospital and community levels (CMAM) need to be continued and expanded. Provision of nutritious food for children at institutions should also continue. On-going monitoring of the nutritional situation is important to identify the trends and changes in the situation and bring support as soon as possible when the situation is negatively changing.

In reference to the MDG 1, the achievement in decreasing underweight over time (from 60.6% in 1998 (MICS1 to 15.5% in the actual survey), as well as chronic and acute malnutrition, are primarily due to concerted efforts between the Government, the UN Agencies and others partners in DPRK in addressing the different causes of malnutrition. But malnutrition still remains and requires continued and strengthened interventions on chronic and acute malnutrition in order to have more impact on the underweight prevalence and to ensure a more optimal growth to the children.