North Korean Economy Watch

Images vis KCNA and the Daily NK:

Click images for larger versions

According to the Daily NK, the poster on the left states, “Let’s have a bumper crop this spring!”, and poster on the right shows people heading for the fields alongside trucks of fertilizer and rolls of vinyl plastic, and proclaims on the big sheaf of wheat that farming is the people’s “lifeline”.

According t KCNA:

A poster titled “Bring about a Great Innovation in Agricultural Production This Year!” (right) depicts an agricultural worker determined to bring a rich harvest, helpers rushing to a socialist cooperative field and vehicles carrying farm materials, etc. It makes a successful ideological and artistic representation of the firm will of the Korean people to thoroughly implement the WPK′s policy of agricultural revolution.

A poster entitled “Bring about a Rich Harvest of First Crop!” (left) calls for attaining the target of grain production without fail. It encourages the agricultural workers in their drive to achieve signal successes in the immediate spring farm work.

According to the Daily NK:

The names Kang Ho Dong and Yoo Jae Seok are growing in popularity in urban North Korea now that variety shows hosted by the two South Korean entertainers, KBS show “One Night, Two Days” and MBC’s “Endless Challenge”, are becoming popular there.

One source who trades in Pyongyang said, “I rented ‘X-Men’ (a variety show on another big South Korean station, SBS), the show hosted by Kang Ho Dong and Yoo Jae Seok, from a CD store; it was really entertaining.”

“One of the popular things with Pyongyang elementary and middle school students is the games they can see in this show,” he added.

He noted, “Parents believe the games in X-Men can develop their children’s brains, so they also try to occasionally show it to them. Kang Ho Dong and Yoo Jae Seok are really popular here; we laughed until we cried.”

According to the source, people in Pyongyang do not generally purchase CDs of North Korean products, but rent them for around 500 won each, while illegally-produced South Korean dramas and variety shows are generally 2,000 won each, approximately the price of a kilogram of rice.

Another source from Shinuiju said, “The shows with Kang Ho Dong and Yoo Jae Seok, ‘One Night, Two Days’ and ‘Endless Challenge’ are so popular that they sell for 4,800 won.”

The reason why people like ‘One Night, Two Days’, in which a number of South Korean entertainers, led by Kang, take a trip to little-known South Korean places to camp out, mingle with locals and play a range of games, the source said, is “because people can see a lot of the scenery of South Chosun, as if they were sightseeing for real. It gives comfort to those who are in the situation of being unable to so much as dream of a trip to Chosun.”

There is another background reason for their growing popularity: they are also popular among Korean-Chinese people in the border provinces of China, leading to these illegally copied CDs flowing into North Korea.

In Yanji, Dandong, Shenyang and other Chinese cities with big Korean-Chinese populations, internet cafes have their own servers to download South Korean TV shows so that local people can see them easily at a decent speed.

North Korean or Korean-Chinese smugglers then take illegally copied DVDs or CDs containing the shows into North Korea. One smuggler generally carries between 1,000 and 3,000 recordable CDs or DVDs including such shows into North Korea at any one time.

Another defector, Kim Seong Cheol explained, “I can copy thousands of CDs cheaply and send them to North Korea all at once.”

When he crosses the river, Kim says he ends up giving away a few hundred discs in the form of bribes, and wholesales a few hundred to each North Korean trader.

Read the full story here:
South Korean Entertainers Gaining in Popularity
Daily NK
Park Jun Hyeong and Jeong Jae Sung
3/23/2011

Institute for Far Eastern Studies (IFES)
NK Brief No. 11-03-23
3/23/2011

A nationwide drive for military rice procurement was reported to have resumed from January this year in North Korea. The DPRK authorities halted the collection of rice for the military early last year with a sharp decrease in food production after suffering from repeated flood damages. However with their efforts to find aid from China and other foreign means to little avail, restarted the military procurement from early this year, collecting 2 to 3 USD worth of rice per person on a national level. North Koreans are reported to be strongly against the resurgence of the collection.

According to the Daily NK, sources from Pyongyang revealed that “Orders came from the Central Committee of the Party last December to begin a nationwide collection from January on the grounds of deficient military food supply. Although the order encouraged the drive to be voluntary and not obligatory, the department in charge of procurement is placing pressure on merchants and workers and officials of various corporations for donation.”

The Pyongyang source added, “In the case of Jung District Market (Jungguyeok Market) [satellite image here], the merchants were coerced into paying additional forty to fifty thousand KPW per person. The police are pressuring people that those who fail to pay will be forced to leave their lucrative spot in the market and replaced by those that paid.” Given the price of rice at the end of February was 1,900 KPW per/kg, each merchants was donating about 20 to 25kg of rice to the military.

On the other hand, workers in corporations were paying about 10 kg/person while the cadres were instructed to pay 30 kg/person. “The authorities did not hesitate to criticize and condemn those who dawdled on paying,” the source disclosed.

Another source from Sariwon in North Hwanghae Province also confirmed the account, “The Central Committee instructed the donations to be based on people’s consciences, but local authorities are demanding ‘each person must give specified kilos of rice,’ and ‘those that paid over a ton (1,000 kg), were given party membership right there and then with no inquiries about the source of the rice.”

Thus far, two people were reported to have given ten tons of rice and corn each, 50 people offered two tons of rice, and 200 people donated one ton of rice.

The source further added, the Party’s original target of 800 tons of rice for Sariwon was exceeded by a large margin, reaching over 2,400 tons.

However, disgruntled voices of North Koreans are also reported to be heard for the half-forced “military rice procurement drive,” raising questions about “where the food was going,” and “unhappy about taking rice for the military when there are no food rations for the people and factories no longer in operation.”

Previous stories on the DPRK’s food situation this year can be found here.

According to the Daily NK:

The price of housing in areas of North Korea where it is possible to receive South Korean television (in the form of main state broadcaster KBS) is considerably higher than in other locations, the president of NK Intellectuals Solidarity asserted today.

Kim Heung Gwang revealed the house price news in a lecture at an event organized by the National Development Institute in Seoul this morning, “Is a Jasmine Revolution Possible in North Korea?”

However, Kim also said that external information is not as important as internal factors when it comes to influencing North Korea’s future.

“Speaking with defectors, it becomes clear that whether one is from the country or the city, coming into contact with South Korean dramas or movies at least once is the norm,” Kim explained, adding, “Thanks to this, places where South Korean TV can be received are popular with North Koreans.”

“We believe that the places where South Korean TV can be received are along the East and West Sea coasts, and in these places sellers can name their price,” he went on. “It is said that in the case of one area of Hamheung, you can get South Korean TV within a ten kilometer radius, and that is the only reason why the price of housing is expensive.”

However, Kim also emphasized that while South Korean TV may be popular, the real power to change North Korea is emerging not from external effects, but from inside the country itself.

Additional Information:

The Daily NK published a similar story back in 2006.  Lankov wrote about broadcasts into the DPRK some time ago as well.

Other factors affecting real estate prices are location, quality, and the “effectiveness” of the inminban.

Read the full story here:
North Korean House Prices Hanging on KBS Availability
Daily NK
Mok Yong Jae
3/16/2011

According to Yonhap:

North Korea’s trade with South Korea fell to about half of its trade with China in 2010 amid worsened political relations between the divided Koreas, a trade body said Wednesday.

The two Koreas exchanged US$1.91 billion worth of goods last year, up 14 percent from 2009, according to the Korea International Trade Association (KITA).

However, trade between the North and China jumped 32 percent on-year to slightly over $3.46 billion, indicating Pyongyang’s growing economic dependence on its communist ally.

The proportion of inter-Korean trade to North Korea-China trade reached its peak of 91 percent in 2007 when then-South Korean President Roh Moo-hyun held a historic summit with North Korean leader Kim Jong-il, the second summit between the Koreas.

The rate dropped to 65 percent in 2008, 64 percent in 2009 and 55 percent last year, KITA said.

When only considering the amount, inter-Korean trade reached its highest level last year, but only because of increased output at a joint industrial complex of the two Koreas in the North’s border town of Kaesong.

Economic exchanges between the two Koreas at Kaesong jumped 53.4 percent on-year to over $1.44 billion in 2010 while the amount of the actual trading of goods between the countries plunged 54 percent from a year earlier to $117.8 million, according to KITA.

“The gap between the amount of South-North trade and that of North-China trade will further widen unless the tension between the South and North is quickly removed, as economic cooperation between the North and China is fast increasing,” said Shim Nam-seop, a KITA official in charge of inter-Korean trade.

Once again Yonhap fails to mention the name of the report or to provide a link. Its not that hard guys.

It is late (and I am jet lagged) so I am not going to bother fighting the KITA web page for the report this evening.

Read the full story here:
Inter-Korean trade falls to half of North-China trade in 2010
Yonhap
3/23/2011

According to KBS:

The Voice of America says that North Korea’s exports to the European Union more than doubled year-on-year in 2010 as the communist country exported petroleum products worth 55 million euros to the Netherlands in the first half of last year.

Quoting data from Eurostat, the statistic agency of the EU, the broadcaster said that North Korea’s exports to the EU surged from 50 million euros in 2009 to over one hundred million euros last year.

However, the North’s imports from the EU inched up only about two million euros from 70 million euros in 2009 to 72 million euros in 2010.

I am pretty swamped at the moment.  I did a quick search for the original data source with no success. If you have any idea where to find it, please let me know.

Read the full story here:
NK’s Exports to EU Doubled in 2010
KBS
3-22-2011

According to Yonhap (3/22/2011):

North Korea’s population is estimated to have increased slightly in 2010 from a year earlier, despite its hardships stemming from a chronic food shortage, a report said Tuesday.

The communist country’s population came to an estimated 24.19 million last year, compared with 24.06 million the previous year, according to the report by Statistics Korea, South Korea’s statistical agency. The estimate is based on an analysis of the results of North Korea’s census.

The agency said overall living conditions in North Korea don’t seem to have improved in the past decade with the average life expectancy remaining below the level in the early 1990s.

According to the report, the average North Korean man and woman had a life expectancy of 64.1 years and 71.0 years, respectively, in 2008. Comparable figures were 67.0 years and 74.1 years each in 1993.

About 70 percent of the population over 16 or 12.19 million people were engaged in economic activities, with 36.0 percent working in the agricultural sector. This was followed by 23.7 percent engaged in manufacturing and 20.3 percent in public service areas.

Despite a relatively high percentage of population engaged in economic activities, only 7.3 percent of people over 60 worked, a sign that most North Koreans retire early.

Of the population, 60.6 percent lived in cities in 2008, up from just 40.6 percent in 1960, with the average man and woman getting married at 29.0 years and 25.5 years each.

Despite more people living in urban areas, coal and wood remained the main sources of heating, the report said.

Here is the Statistics Korea web page.  If anyone can provide a link to the original report, I would appreciate it.

The DPRK conducted censuses in 1993 and 2008 with funding from the UN.  Information on the 2008 census can be found here and here.

According to Arirang News (3/22/2011):

The Supreme Court decided Tuesday that South Korean nationals are not eligible to claim ownership of property in North Korea.

A 56-year-old man surnamed Yoo filed a lawsuit, claiming ownership of six lots in the Yeoncheon district of Gyeonggi Province, which is in North Korea, and demanded the court change the land registration back to his name, based on a deed in his ancestor’s name from the early 1900s.

Two lower courts had previously acknowledged the deed and ruled partially in favor of the plaintiff.

But the Supreme Court annulled the decision, saying it is impossible to verify the ownership of the land, since the original land registration was destroyed in the Korean War, restored in 1980 and then discarded in 1991 because the land is north of the Demilitarized Zone.

I am no lawyer or expert in the field of property rights, but my understanding is that when reunification comes property reconciliation will be a nightmare for both Koreas.  Many South Koreans have already prepared the paperwork to reclaim lands confiscated by both the Japanese colonial government and the DPRK government and they are simply waiting to file them.  I imagine there are many North Koreans that have done the same.  No doubt there will be numerous types of claims and remedies—too voluminous to list here.

At a minimum, this case seems to establish the first of many tests for the validity of land reclamation cases: verification.  If a claim cannot be verified in evidence, it will not be honored by the court, and we also have a better idea of what kinds of evidence are not admissible.

Although possessing the right documentation will be important, I can also see all sorts of creative solutions emerging to help establish a claim even for those who lost their land titles long ago–DNA comparisons from family burial plots, to name just one example.

If anyone is aware of any good papers on this topic, please let me know.  There is probably a hefty German literature in this area, though I am not sure how comparable the legal systems are particularly when it comes to the disposition of land.

Some other recent South Korean cases:
1. A South Korean court gave North Korean defectors the right to divorce their spouses in the DPRK so they could remarry.

2. The North Korean children of a deceased, wealthy DPRK defector (who died in South Korea) are suing in a South Korean court for their share of his inheritance.

Pictured Above: Chung Ju-yung Stadium in Pyongyang
(Google Earth:  39.040093°, 125.735237°)

According to the Korea Herald:

North Korean leader Kim Jong-il has sent a verbal message to commemorate the 10th anniversary of the death of a noted South Korean industrialist who pioneered cross-border economic projects, the North’s media said Saturday.

Chung Ju-yung, the then chairman of Hyundai Group, initiated a series of major economic projects in North Korea starting in 1998, including a sightseeing tour to scenic Mount Geumgang on the North’s east coast. He died on March 21, 2001.

In the verbal message, the North Korean leader spoke highly of the South Korean industrialist, saying that he did the right thing to promote national reconciliation, the North’s Korean Central News Agency said in a report.

“Chung Ju-yung paved the way for national reconciliation and cooperation and did really a great job for the development of the inter-Korean relations and the sacred cause of national reunification,” the KCNA quoted the leader as saying in the message.

Kim also expressed hope that everything would go well for the Chung family and Hyundai, the KCNA report said.

The report did not say when and how the North Korean leader’s message was conveyed to the Chung family in Seoul. Chung’s eldest son, Chung Mong-koo, heads the nation’s largest automaker, Hyundai Motor Co.

According to the Choson Ilbo:

North Korea has sent a wreath to Hyundai Group to commemorate the 10th anniversary of the death of Hyundai founder Chung Ju-yung.

The wreath that read “In memory of Chung Ju-yung” was delivered from Pyongyang’s Asia-Pacific Peace Committee to Hyundai staffers at the joint-Korean industrial complex in Kaesong.

On Friday North Korean leader Kim Jong-il spoke highly of Chung for his role in paving the way for national reconciliation and cooperation.

Chung initiated various projects with the Stalinist state including the Mt. Kumgang package tours in the North and had sent more than one-thousand cows over the demilitarized zone to North Korea.

The Daily NK also offers some cultural background…

Pictured Above: Pipagot Naval Base  (Google Earth: 38°35’40.17″N, 124°58’38.49″E)

UPDATE (3/28/2011): According to Strategy Page:

North Korea has apparently been building an improved version of its Song (Shark) class mini-sub. The 250 ton Sang is actually a coastal sub modified for special operations. The original design is a 34 meter (105 feet) long boat with a snorkel and a top submerged speed of 17 kilometers an hour (or 13 kilometers an hour when at periscope depth using the snorkel to run the diesel engines). Top surface speed is 13 kilometers an hour. Max diving depth is 150 meters (465 feet) and the boat is designed to rest on the ocean bottom (useful when trying to avoid enemy search). There is a crew of 15, plus either six scuba swimmer commandos, or a dozen men who can go ashore in an inflatable boat. Some Songs have two or four torpedo tubes. Max endurance is about eight days. The new model is 39 meters (121 feet) long and is believed to have a max submerged speed of 27 kilometers an hour. Over 40 Songs have been built so far, and one was captured by South Korea when it ran aground in 1996. At least half a dozen are of the new model.

North Korea has a fleet of over 80 mini-subs, plus about 24 older Russian type conventional boats (based on late-World War II German designs, as adapted for Russian service as the Whiskey and Romeo class). China helped North Korea set up its own submarine building operation, which included building some of the large Romeo class subs. North Korea got the idea for minisubs from Russia, which has had them for decades. North Korea has developed several mini-sub designs, most of them available to anyone with the cash to pay.

The most popular mini-sub is the M100D, a 76 ton, 19 meter (58 foot) long boat that has a crew of four and can carry eight divers and their equipment. The North Koreans got the idea for the M100D when they bought the plans for a 25 ton Yugoslav mini-sub in the 1980s. Only four were built, apparently as experiments to develop a larger North Korean design. There are to be over 30 M100Ds, and they can be fitted with two torpedoes that are carried externally, but fired from inside the sub.

North Korea is believed to have fitted some of the Songs and M100Ds with acoustic tiles, to make them more difficult to detect by sonar. This technology was popular with the Russians, and that’s where the North Koreans were believed to have got the technology.

The most novel design is a submersible speedboat. This 13 meter (40 foot) boat looks like a speedboat, displaces ten tons and can carry up to eight people. It only submerges to a depth of about 3.2 meters (ten feet). Using a snorkel apparatus (a pipe type device to bring in air and expel diesel engine fumes), the boat can move underwater. In 1998, a South Korean destroyer sank one of these. A follow-on class displaced only five tons, and could carry six people (including one or two to run the boat). At least eight of these were believed built.

The use of a North Korea midget sub to sink a South Korean corvette in March, 2010, forced the United States, and South Korea, to seriously confront the problems involved in finding these small subs in coastal waters. This is a difficult task, because the target is small, silent (moving using battery power) and in a complex underwater landscape, that makes sonar less effective.

There are some potential solutions. After the Cold War ended in 1991, the U.S. recognized that these coastal operations would become more common. So, in the 1990s, the U.S. developed the Advanced Deployable System (ADS) for detecting non-nuclear submarines in coastal waters. The ADS is portable, and can quickly be flown to where it is needed. ADS is believed to be in South Korea. ADS basically adapts the popular Cold War SOSUS system (many powerful listening devices surrounding the major oceans, and analyzing the noises to locate submarines) developed by the United States.

ADS consists of battery powered passive (they just listen) sensors that are battery powered and deployed by ship along the sea bottom in coastal waters. A fiber optic cable goes from the sensors (which look like a thick cable) back to shore, where a trailer containing computers and other electronics, and the ADS operators, runs the system. ADS has done well in tests, but it has never faced the North Korean mini-subs.

ORIGINAL POST (3/22/2011): According to the Choson Ilbo:

North Korea is building up its submarine force, deploying new Shark-class K-300 submarines with better performance, a longer body and higher underwater speed than the old model which infiltrated South Korean waters in 1996.

A South Korean government official said Sunday, “We’ve confirmed U.S. satellite images and other intelligence that the North has been building and deploying new Shark-class submarines for a few years now.

They’re about 5 m longer than the old 34 m-long model and capable of traveling submerged more than 10 km/h faster.”

The North has about 70 submarines and submersibles. The Shark class, which accounts for about 40 of them, is its main submarine force.

Below are additional stories about the DPRK’s submarine fleet and navy:

Still Waters Run Deep

DPRK’s midget subs torpedo equipped

DPRK naval bases near Baengnyong Island

KPN submarine bases in the East Sea

North Korea supplied submarines to Iran

Bermudez on the North Korean Navy

NKeconWatch Military resources page