North Korean Economy Watch

According to the Daily NK:

The North Korean authorities are currently employing various means to encourage frugality, an idea which has recently come to include ‘kwanhonsangje’ (the four ceremonial occasions; coming of age, marriage, funeral and ancestral rites).

In recent years there has been official criticism of the fact that engagement ceremonies, wedding gift exchanges between families and even the table for ancestral rites have become occasions full of over-spending, empty formalities and vanity.

Recently, Daily NK obtained a copy of the October issue of monthly magazine ‘Socialist Cultural Life’, to which social studies scholar Jang Seong Nam submitted a piece, ‘Let’s Perform Kwanhonsangje the Socialist Way’, in which he declared, “kwanhonsangje should be performed according to the demands of the Party and social development.”

The article emphasized, “We are taking the lead, seeing kwanhonsangje performed in the socialist way as a valid and unavoidable problem in the establishment of the new military-first socialist life.”

“Because old, feudalist, superstitious, empty formalities and bizarre foreign customs are not disappearing, we are strongly demanding action on this problem,” it went on, adding, “Rejecting bizarre foreign customs crushes the Imperialists’ policy of ethnic extermination under the banner of ‘globalization’.”

The article also looked in more detail at problem issues surrounding kwanhonsangjae.

“A sufficient engagement,” it proclaimed, “has two people and their parents meeting to confirm the marriage, and wedding ceremonies should be a gathering at someone’s home.”

Regarding funeral arrangements and ancestral rites, it recommended, “Commemorate a death by placing a medal or honorary certificate before an image of the deceased along with flowers, while the various commemorative services on the 3rd day or the birthday of the deceased should be eliminated.”

Getting into minutae, it added of a groom’s suit color, “Discard the convention of wearing a black or dark blue suit; men should wear bright colors according to season.”

In these ways, the article asserted, kwanhonsangjae becomes an aesthetic and modern set of customs with a uniquely Chosun ethnic color.

The piece appears to show both the state’s desire to restrain consumption but also to reassert ‘socialist’ attitudes and encourage nationalist attitudes, thus pushing back against the impact of foreign ideas coming in via overseas media, South Korean dramas and so on.

‘Socialist Cultural Life’ is distributed monthly to all official organs and enterprises. Its publisher, Labor Group Publishing House, publishes various other magazines including ‘Chosun Women’, ‘Worker’ and ‘Agricultural Worker’. As a part of the Party Propaganda and Agitation Department, its various publications are among the state’s most ubiquitous propaganda weapons after the daily Workers’ Party mouthpiece, ‘Rodong Shinmun’.

Read the full story here:
Celebrate the Socialist Way!
Daily NK
Lee Seok Young
2011-12-9

UPDATE (2011-12-13): According to Radio Free Asia (in Korean), the Chinese government has agree to provide the DPRK with new meteorological equipment.  According to the article:

중국 정부가 유엔 산하 기구를 통해 북한에 첨단 기상관측장비를 지원하기로 결정한 것으로 밝혀졌습니다.

정아름 기자가 보도합니다.

중국정부가 지난 12일 북한에 컴퓨터를 통해 기상관측 정보를 받아보는 자동기상 관측장비(Automatic Weather Systems) 4대를 지원 하겠다는 의사를 유엔 산하 세계기상기구에 전달했습니다.

세계기상기구는 13일 자유아시아방송(RFA)에 이번 지원의 정확한 시점과 지원대상지역은 정해지지 않은 상태이라고 전했습니다.

Here is the article translated by Google Translate.

Jospeh Bermudez recently wrote about the DPRK’s hydro meteorological service.

ORIGINAL POST: According to the Korea Times:

A meteorological expert called for international assistance for North Korea, saying it was lacking in up-to-date meteorological equipment.

The Radio Free Asia quoted Avinash Tyagi, director of the climate and water department of the World Meteorological Organization (WMO), who visited North Korea in mid-March, as saying “equipment and computers used for weather forecasting were in urgent need of replacement.”

Tyagi’s visit with two other colleagues was the first by a WMO team in eight years.

They were supposed to visit the North last November in light of severe flooding last summer, but the trip was postponed.

The floods cost many lives and left many homeless in Sinuiju near the border with China, drawing immediate international humanitarian assistance, including from the South.

The expert said new equipment would help improve the food situation in the country and encouraged the international community to help. He added of the 186 observatories scattered through the country, only 27 were connected to the international meteorology network. Even the equipment there was outdated, made in the 1970 and 80s.

Food shortages are a chronic problem for North Korea, and this has got worse in recent years, which prompted the regime to run an unprecedented campaign to call for food aid from other countries.

More on the DPRK’s 2011 food situation here.

Read the full story here:
N. Korea in need of new meteorological equipment
Korea Times
4/1/2011

According to Yonhap:

Trade between the United States and North Korea reached US$2.45 million in October, a U.S. report showed Saturday.

The bilateral trade volume was comprised completely of aid goods offered by the U.S. to the communist state, the Voice of America (VOA) reported citing data compiled by the U.S. Department of Commerce.

The VOA said the Department of Commerce did not give specifics on what kinds of goods were shipped to North Korea, but the goods traded are considered humanitarian aid products as the two countries are not engaged in commercial trade.

In the first 10 months of the year, the bilateral trade reached $6.24 million, compared with $1.90 million a year earlier, the report said.

Here is a list of DPRK/US engagement stories in 2011.

Read the full story here:
U.S.-N. Korea trade reaches US$2.45 mln in Oct.
Yonhap
2011-12-10

Tourism: Koryo Tours issued a newsletter this week promoting their tours to the DPRK during the celebrations of Kim Il-sung’s 100th year:

April 15th 2012 marks North Korea’s biggest celebration in decades – the 100th birth anniversary of Kim Il Sung, who, despite his death in 1994 is still the country’s ‘Great Leader’ and ‘Eternal President’.

This historic day will see epic events and the completion of large-scale national programmes, all furthering what North Korean media calls the creation of a ‘strong and prosperous country’ – however flexible that concept may be. We invite you to come with us to experience this once in a lifetime occasion on the ground in Pyongyang

At present, the exact nature of the celebrations and corresponding tourist access is shrouded in the usual mystery – no one knows what visitors can see and do, but as always Koryo Tours will be first in line. Birthday travellers should be ready for sudden changes in itinerary and hotels – all part of the excitement of the country’s biggest holiday period ever!

We have several tours going on over this holiday, including one brand new one we just added to our website; all of them are open for application now.

In brief they are:

Kim Il Sung Birthday Short Tour
– Ideal for anyone wanting to see North Korea’s capital Pyongyang on this massive occasion. We’ll see all the city’s highlights and be there for the nation’s biggest occasion in history.

Kim Il Sung Birthday Long Tour
– In addition to capital sightseeing and anniversary events, this trip goes to the west coast city of Nampo – and for the first time, the surrounding industrial areas which Koryo Tours opened to tourism only this year. Finally, we’ll take in ancient city of Kaesong (buy your famous ginseng here) as well as the notorious DMZ, the concrete barrier that has divided
the peninsula for six decades.

Kim Il Sung Birthday Ultimate Tour
– The Big One! If you’ve ever wanted to (almost) fully explore the world’s most mysterious country in one trip, then sign up today. The tour’s complete version runs two weeks; those on tight schedules can book for first or second halves alone. Week one (Option A) takes us around Pyongyang, Kaesong and the DMZ, Mt. Myohyang and the giant gift halls to North Korea’s leaders, the west coast city of Nampo and much more. Choose week two (Option B), and you’ll see the rarely-visited east coast cities of Wonsan and Hamhung, North Korea’s second largest city, which Koryo Tours opened to tourists in 2010. From there we’ll see the stunning Mt. Kumgang area and the country’s most remote area open to travellers.

In its history, Pujon County has only seen one tour group (run by Koryo Tours); if you’re looking for a unique area of a unique country, you won’t do better than this. Option A is nearly closed so book today; Option B is still open for booking, and ideal for those
who have seen the main sites and want a second trip.

Option A is filling up fast so we do need to ask for early applications for this tour, Option B is still open for booking, and ideal for those who have seen the main sites and want a second trip. There are 15 places left for the Option A or Ultimate Option!

NEW!! – Kim Il Sung Birthday Week Tour
– Due to high demand we have added another week-long tour, so you can take in the country’s most fascinating sites and still catch the Big Event.

Check out our amazing programme and sign up now to be on the ground for the biggest birthday party of 2012!

While all tours are still open, we strongly suggest that you book sooner rather than later due to high holiday demand. Tours may need to be closed early, so don’t miss out; book now! (early bookings also apply to independent tours)

Winter: Today KCNA published photos of Pyongyang’s first winter 2011/12 snowfall :

Stamps: Today Joshua Pollack (armscontrolwonk.com) posted some new stamps from the DPRK:

Click images to see larger version from the source. I have an interesting book of North Korean stamps, but have not posted it. Here are some recent DPRK stamps highlighting Chinese/DPRK friendship. Here are some CNC stamps. Here is a stamp issued to raise awareness of bird flu.

Finally, this week’s issue of the Pyongyang Times, claims that the DPRK stamps below won the “best stamp award” at the 10th China Annual Best Foreign Stamp Poll on November 24:

UPDATE 1: A reader sent me a link to some additional DPRK stamps on the North Korean web page, Naenara.  See them here, here, here, and here!

UPDATE 2: Thanks again to the same reader sending this stamp commemorating the sinking of the General Sherman:

Pictured Above (Google Earth): The Hwanggumphyong and Wiwha Island SEZ on the Yalu/Amnok River which separates the DPRK and PRC.

UPDATE 1 (2012-3-19): Read the laws governing the SEZs here.

ORIGINAL POST (2011-12-9): According to the Daily NK:

North Korea has enacted a law governing activities at Hwanggeumpyeong and on Wihwa Island, two new special economic zones in the vicinity of Shinuiju on the Sino-North Korean border.

Chosun Central News Agency revealed the news this morning, stating, “The Hwanggeumpyeong-Wihwa Island Economic Zone Act was adopted by the Standing Committee of the Supreme People’s Assembly of the Chosun People’s Democratic Republic.” It did not offer any further details.

The provisions of the new law are reported to have been circulated to various Chinese governmental and economic figures, and it is said to contain provisions reflecting successful elements in the development of China’s own special economic zones.

Naturally, one key part of the intent behind the new law’s enactment appears to be to reassure potential Chinese investors of the stability of the investment climate in North Korea.

At this stage, although there was a large opening ceremony for the zone in June this year attended by Workers’ Party figures including Jang Sung Taek, who plays a key role in the attraction of overseas investment to North Korea, the pace of construction remains limited.

However, there may not be long to wait. Dai Yulin, who heads the Municipal Committtee of the Chinese Communist Party across the Yalu River in Dandong told the China Daily back in September, “Concrete plans for the development of the Hwanggeumpyeong Special Economic Zone will be completed by the end of this year.”

Read the full story here:
SEZ Law Enacted by Supreme Assembly
Daily NK
Kim Tae Hong
2011-12-9

According to Yonhap:

South and North Korean linguistic experts have agreed to push to use the same spelling of place names, together with their Chinese counterparts, a Chinese scholar said Thursday.

The project is designed to promote better communication among South and North Koreans as well as ethnic Koreans in China.

The divided Koreas use the same alphabet known as “hangeul,” though decades of division following the 1950-53 Korean War resulted in dialectical differences and deviations in word meaning.

The two Koreas also spell differently in hangeul when naming places and countries, a phenomenon that often causes trouble in communication between South and North Koreans.

Most of the about 2 million ethnic Koreans in China can speak Korean, though they also use different dialects and spell the names of locations differently than Koreans.

North Korean linguistic experts have proposed unifying the spelling of place names on the Korean Peninsula and China, said Liu Yinzhong, a professor of Zhejiang Yuexiu University of Foreign Languages in China.

Liu, an ethnic Korean who studied at Kim Il-sung University in North Korea, said the project could help contribute to boosting mutual confidence and cooperation.

Chin Yong-ohk, an emeritus professor of Kyunghee University who is involved in the project, said Liu would visit South and North Korea to exchange ideas on the project.

South Korea has banned its citizens from visiting North Korea as part of sanctions on the North in retaliation for the sinking of a South Korean warship in 2010. The North has denied involvement in the sinking that killed 46 sailors.

South Korea has selectively allowed religious and private aid groups to visit the North as part of humanitarian projects.

Last month, the two Koreas held discussions in the North’s border city of Kaesong on resuming a separate project to publish a joint dictionary covering their different dialects.

The project, launched in 2005, was suspended last year after the North’s sinking of the South Korean warship.

Read the full story here:
Koreas push to use same spelling of place names
Yonhap
2011-12-8

According to Yonahp:

Top executives of more than 120 South Korean companies operating in the Kaesong Industrial Complex plan to meet in the North’s border city this week, in the first such meeting to discuss pending inter-Korean business issues, an organizer said Tuesday.

The CEO conference is scheduled to bring together the heads or local representatives of 123 South Korean firms and other related officials on Wednesday, said Bae Won-joo, one of the organizers of the meeting.

A Unification Ministry official said the meeting was designed to discuss issues related to the operation of the industrial complex. He did not give further details and asked not to identified, citing office policy.

Previous posts on the Kaesong Industrial Zone can be found here.

Read the full story here:
S. Korean businessmen to meet in N. Korea’s industrial park
Yonhap
2011-12-6

According to the Daily NK:

It has been confirmed that over one month in February and March this year, the Chosun Workers’ Party replaced the membership of all male party members over 60 and women over 55 with ‘honorary membership’.

It reportedly took just a month for the plan to be implemented from the Central Party down through provincial, city and county levels.

Honorary members are not required to attend weekly, monthly and quarterly self-criticism sessions in their areas of residence. In addition, honorary membership grants the right to absent themselves from frequent official meetings including study sessions, Party lectures, meetings for the dissemination of Party orders etc.

Honorary members are also exempt from a 2% deduction from wages for Party membership dues. Hitherto, cadres were still required to pay their Party dues even when the enterprises to which they had been dispatched were not operating due to shortages of raw materials, and even in retirement (usually after turning 60) Party members were still required to pay dues to local Party organizations.

On the other hand, honorary membership does still mandate presence at important events including reporting meetings or events to commemorate the birthdays of Kim Il Sung and Kim Jong Il.

Many newly-honorary members are understood to have welcomed the new measure. One source from Pyongan Province told Daily NK, “When they heard it, elder Party members were calling it ‘another act of kindness from the great General’.”

However, some of the targeted cadres are less happy with having their wings clipped. A source from North Hamkyung Province said that some irritated elderly members of the Union of Democratic Women are leaving before being pushed, putting in minimum effort or simply not attending events at all.

Elsewhere, while senior Central Committee, Cabinet and other central government organ staff are holding onto their administrative duties for now, many apparently believe they know which way the wind is blowing.

Looking at the situation today, one high level official who defected to South Korea in May this year commented to Daily NK, “It is a message to all the veterans that they need to leave because this is the Kim Jong Eun era.”

Read the full story here:
Party Elders Handed Honorary Membership
Daily NK
Lee Beom Ki and Choi Song Min
2011-12-6

UPDATE 3 (2011-12-6): Accoridng to the Associated Press, six Americans from the Fuller Center are returning to the site to continue construction (just as the winter begins):

A group of Americans is in North Korea to kick off a project to build 50 homes for families working at a tree farm outside Pyongyang.

Six volunteers affiliated with the Fuller Center for Housing arrived Tuesday. Their trip comes at a time of improving relations between the U.S. and North Korea.

The 50-unit project will house the families of workers at a tree nursery in Osan-ri.

Participants with the nonprofit Fuller Center say they’ll be working side by side with North Koreans to build the homes.

They’re aiming to finish three homes this week, and other volunteers are expected to arrive in coming months to help complete the project.

In Americus, Georgia, Fuller Center President David Snell called the project a “true mission of peace.”

The United States and North Korea fought on opposite sides of the Korean War and do not have diplomatic relations. Diplomats from the two countries recently held talks about resuming six-nation nuclear disarmament talks.

Below is the most recent Google Earth image of the Fuller Center’s Osan-ri project dated (2011-5-3):

I have tagged the facility on WikiMapia and you can see it here. The satellite image shows that some progress has been made since the last photo was published in September 2010 (below).

Previous reports of USA-DPRK engagement in 2011 can be found here.

UPDATE 2 (2011-7-13): Google Earth released new imagery of this area today (July 13).  The imagery is dated 2010-9-14, and it shows quite a bit of progress on the Fuller Center’s project:

UPDATE 1 (2010-3-28): Radio Free Asia has reported (in Korean) that the development of the Fuller Center’s housing project in Osan-ri has been delayed.

After running the story through Google Translate it appears that the delay is due to bureaucratic hurdles with getting resources from China into the DPRK (please correct me if I am wrong).

Satellite imagery from March 2010 (Google Earth) shows that the project has been launched, but it has moved from its initial location to the east (just a tad):

A reader named “Bobby” wrote in, however, and told me the following:

The Google Translate version is a little wack but that’s pretty much what happened. The Korean version says that David Snell was originally going to buy the construction materials in China and deliver them directly to North Korea by truck but because there is too much to move they have to ship it by train. The delivery has been delayed because shipping it by train requires a lot of extra paperwork and customs obstacles. The workers can’t get visas until the materials arrive safely so they aren’t even able to enter the country yet.
(Also, I think you accidently blocked my name for commenting before.)

ORIGINAL POST (2009-12-18): The Fuller Center for Housing is a religious organization based in Atlanta, Georgia (USA) which seeks to provide adequate shelter across the globe.  The Fuller Center’s mission statement can be found here.

On November 11, the Fuller Center broke ground on their new project in the DPRK. According to Global Atlanta:

With help from U.S. volunteers, the Americus-based Fuller Center for Housing will work with the North Korean government to construct a 50-unit complex in a small farming community outside the capital city of Pyongyang.

The project will help alleviate a housing shortage caused by a 2006 typhoon that destroyed some 30,000 homes across the country.

North Korea is providing land, labor and heavy equipment for the project, a community of duplexes designed with a variety of measures to boost energy efficiency.

For example, the homes will have a wall of windows on the front. Facing south will allow in the most possible sunlight, reducing the use of electricity to light the homes, said David Snell, the Fuller center’s president.

The Paektusan Academy of Architecture, a government agency responsible for developing much of modern Pyongyang’s cityscape, designed the complex and will manage construction.

The two-bedroom, one-bathroom floor plans include a living room, dining room and an animal shed with multiple stalls on the back of the house. An upper-level attic space is designated as a “greenhouse” on a design posted on the Fuller center Web site.

The center is raising money for the homes from U.S. and European donors. Construction is slated to start in the spring, and the center will begin sending teams of six to eight American volunteers next summer.

Despite many Americans’ negative perceptions of North Korea, the center has started receiving volunteer applications before even officially opening the process, Mr. Snell said.

“The fact that it’s been a forbidden kingdom for all these years adds to the intrigue,” he told GlobalAtlanta.

Mr. Snell, who traveled to North Korea for the third time in the last 18 months to attend the groundbreaking, added that the center’s main mission is to build houses, but it often ends up bridging cultural divides in the conflict-ridden areas where it works.

“Absence of peace seems to be a common thread, so we’re starting to wonder if maybe we have a peacemaking component to our mission,” said Mr. Snell, who stopped in the Philippines and Peru to kick-start projects on his way home from North Korea.

Mr. Snell hopes to have an impact on relations between the U.S. and North Korea at a grassroots level. The nations are currently at odds over a raft of diplomatic issues, most notably North Korea’s evolving nuclear weapons program and belligerent antics on the international stage that befuddle American policy makers.

Such political differences won’t heal until people trust each other, and the housing project will give both countries’ citizens a chance to meet and work together for common good, Mr. Snell said.

“We all demonize our enemies, but I’m finding the Korean people to be just like you and me. We chuckle and laugh and tell stories, and they have the same aspirations for a better life and for peace,” Mr. Snell said. “This notion that we’re bringing peace is shared notion.”

The entire project has so far been an exercise in building trust. The idea came from Don Mosley, who heads Jubilee Partners, a refugee resettlement organization outside of Athens, and Han Park, an international affairs professor at the University of Georgia who has become a trusted unofficial liaison between the two countries.

More information, including YouTube videos of the groundbreaking and a map of the project,  can be found on the Fuller Center‘s web page (HERE).

Marcus Noland has crunched some numbers to some up with an approximate inflation rate for the DPRK won after it was renominated in November 2009. According to his post:

The chart above shows the trajectory of prices for rice, corn, and the US dollar since January 2010 (i.e. after the huge step-jump in real prices in December 2009 following the currency reform). A simple regression of the prices (technically their logarithmic values) against time suggests that since the beginning of 2010, inflation on an annualized basis has averaged 131 percent for rice and 138 percent for corn. The won has depreciated against the dollar at a 136 percent annualized rate. A monthly breakdown of price movements suggests that while remaining high, the rate of inflation has attenuated, declining in 2011 relative to 2010.

The co-movement of the blackmarket exchange rate and grain prices would be consistent with a small, open economy in which prices are roughly constant in hard currency terms, but are skyrocketing in terms of the rapidly depreciating domestic currency. In the extreme this could depict an economy that was effectively becoming dollarized.

He also refers to a recent report that prices have not fallen with the autumn harvest and that that the DPRK had suspended anthracite coal exports to China out of fear of domestic shortages.

In general I think the findings are plausible and I am glad that this number is finally out there for the public to reference.  I have just a couple of additional points of inquiry….

If the price and exchange rate data are from public sources, then they are probably geographically concentrated in the provinces that border China. Since there are significant barriers to arbitrage in the DPRK, I expect a large degree of regional price differentiation.  Hypothetically, what would be the effect on these findings of an increase in observations from the “southern” provinces (if that were possible)? If the data are not geographically concentrated and represent a national sample, what would we expect to see if these regressions were run for each province, and how would they compare to the aggregated findings?

A working paper in the making?

UPDATE: A comment from an individual who works with Mr. Noland:

Thanks for sharing this piece on post currency reform inflation. You raise some good points on the regionality of our pricing data. It is true that we don’t have a lot of observations from southern provinces, but it is not all northern either. We get our price data from a number of sources including, but not limited to, Daily NK Market Trends, NK Today reports, and various NGO publications. This gives us a good mixture of general country level price data as well as regional data from provinces such as Pyongyang, North & South Hamyung, North & South Pyongan, & Yanggang. Before the currency reform, we also had a good number of observation from southern areas including North Hwanghae & Gangwon.

Marcus Noland and Stephan Haggard analyzed regional price differences in a previous paper, as well as discussing other issues such as the possible tendency to increase data collection during times of distress and the possibility that organizations might cherry-pick the data that they release, all of which could affect the statistical analysis of this data.

See the paper here (PDF).

Their analysis found that regional price differences are less systematic than one might expect.

On a related note, Ask a Korean also recently translated another Korean article by Ju Song-ha which deals with food prices in the DPRK. You must read it.