North Korean Economy Watch

According to the Choson Ilbo:

The North Korean regime appears to have started a new reign of terror to consolidate the succession of leader Kim Jong-il’s son Jong-un.

The South Korean government and a North Korean source on Wednesday said public executions more than tripled last year. And increasing numbers of North Koreans have been killed trying to cross the Apnok (or Yalu) or Duman (or Tumen) River after the regime gave a shoot-to-kill order. The party and military, meanwhile, are engulfed in a whirlwind of purges, observers believe.

Public Executions

A diplomatic source familiar with North Korean affairs Wednesday said there were 60 confirmed public executions in the North last year, more than triple the number of 2009. “Since last year, the regime has put a notice on bulletin boards warning that those who use Chinese-made mobile phones or illegally circulate dollars face public execution, the source said.

Another source familiar with North Korean affairs said, “It’s rumored that Kim Jong-un has called for ‘gunshots across the country.’ Kim Jong-il did exactly the same thing when he took power.”

Jang Se-yul of the North Korean People’s Liberation Front, a group of former North Korean soldiers and officers who defected to South Korea, said, “In Chongjin, North Hamgyong Province alone last year, at least six people were executed publicly on charges of human trafficking and robbery. People are executed publicly for crimes that would have sent them to prison for just a few years in the past.”

“The number of public executions had gradually dwindled in the North since the famine of the late 1990s,” said International security ambassador Nam Joo-hong. “But since last year, the regime has apparently relied increasingly on public executions to tighten control in the aftermath of the botched currency reform and complaints about the hereditary succession.”

‘Shoot-to-Kill’ Order Against Defectors

Observers believe the regime has issued a shoot-to-kill order against defectors. According to a high-level source in the Changbai region in the Chinese province of Jilin, five North Koreans were shot dead and two others wounded by North Korean border guards on the Chinese side of the border after they crossed the Apnok River on Dec. 14.

And the military is being purged of unreliable elements. Quoting an internal North Korean source last Saturday, Free North Korea Radio, a shortwave broadcaster in the South, said the number of inmates has soared at a labor camp under the Ministry of People’s Armed Forces in North Hamgyong Province. It said many of the inmates are former army generals who have been purged by Kim Jong-un.

The regime’s determination to tighten control is also reflected in the Workers Party’s new regulations, the first for 30 years. The regime recently added a new clause calling for all party members to abide by a new regulation requiring them “to oppose and fight against anti-socialist trends.”

A South Korean intelligence official said the phrase refers to elements of capitalism that have flowed in from South Korea. “The regime has paved the way to publicly execute even people who watch South Korean soap operas or dress in South Korean style, branding them as anti-party elements,” he said.

The Daily NK also reports some personnel changes:

North Korea has been replacing local Party officials with a younger generation since the Chosun Workers’ Party Delegates’ Conference on September 28th, in preparation for Kim Jong Eun’s ascent to power.

In particular, North Korea replaced a great many officials in November and December of last year, a source from Chongjin has revealed, bringing in new provincial, municipal, and district institution officials and industrial complex Party committee members to replace those over 60 with people in their 30s and 40s.

The source commented, “After each Party committee’s annual evaluation meeting, the replacement of officials took place,” continuing, “For the stated purpose of raising the quality of the Party to make it a ‘young, vigorous, and ambitious party’, they are replacing aged officials with younger ones. Thus, recently some officials that people wouldn’t know if they tripped over them have been appearing.”

The policy apparently stems from Kim Jong Il, who is pushing the succession process forward relatively swiftly for reasons said to include his own health and North Korea’s external political environment. Of course, it is also a strategic move on the part of Kim Jong Il, to strengthen unity around Kim Jong Eun by bringing in new blood which will henceforth owe a debt of gratitude to him.

According to the source, Party committees organized a one-month short course for such young officials in October of last year, during which instructors dispatched from Pyongyang or the provincial Party center promoted the idea that youth, vigor and ambition, alongside iron loyalty to the dictator, would be necessary tenets of future party operations.

According to the source, officials emphasized during the lecture course, “Obeying Youth Captain Kim Jong Eun and working well are the kind of faithful actions which repay the trust we receive from the General,” and, “Officials need to strengthen the Party, following on from their predecessors.”

Adding detail to the Party reshuffling; the source said that graduates of Communist Colleges older than 60 are being relieved of their positions, and graduates of Kim Il Sung Senior Party College are filling the ranks in behind.

Those who have at least two-year career as secretary of a Party cell can enter a Communist College, a provincial entity managed by the provincial committee of the Party; after graduation they can work on a provincial committee of the Party.

However, Kim Il Sung Senior Party College, the so-called Central Party College, is a more elite institution in Pyongyang charged with fostering the Party’s core workers; it admits officials with a good family background who have been working for more than two years on a provincial committee.

According to North Korean defectors, once one graduates from Central Party College, one is on the road to a comfortable life. For example, in the words of one defector with experience of the system, any North Korean official with access to a vehicle is almost certain to have graduated from Central Party College.

Accordingly, using North Hamkyung Province as an example, people in ‘powerful’ departments like factory guidance units, the Propaganda and Agitation Department of the Guidance Department of North Hamkyung Province Party Committee, the Ministry of Administration, factory and industrial complex Party committees (Guidance Department, Officials Department, Propaganda and Agitation Department, Party Member Registration Department and General Affairs Department) have been or are being replaced with graduates from the Central Party School.

Those who are being eased out are either destined for less powerful departments, the source said, citing the Party Inspections Committee or Labor Organization Department, or are being completely removed.

Quoting a common phrase relating to the holding of power, the source said that those about to be replaced are full of regret, saying, “If I had known this would happen, I would have done more to prepare for my future when I had glue on my hands.”

A similar process of replacing officials was conducted in the 1980s, prior to Kim Jong Il’s coming to power. In addition to which, this fits in with the overall propaganda rhetoric, which is justifying Kim Jong Eun’s succession by emphasizing youth and his regime’s concomitant ability to apply technology (CNC etc.) to solve North Korea’s chronic economic shortcomings.

The usual caveats apply.

Read the full story here:
N.Korean Regime Intensifies ‘Reign of Terror’
Choson Ilbo
1/13/2010

Youth, Vigor, Ambition, and Loyalty
Daily NK
Im Jeong Jin
1-12-2011

According to TheyWorkforYou.com:

January 11, 2011

Lord Moonie (Labour)
To ask Her Majesty’s Government how many North Korean diplomats are stationed in London and how many British diplomats are in North Korea; and what representations they have made to those diplomats in London about concerns over recent cross-border incidents on the Korean peninsula.

Lord Howell of Guildford (Minister of State, Foreign and Commonwealth Office; Conservative)
There are five diplomats from North Korea based in London. The Foreign and Commonwealth Office employs approximately 10 staff in Pyongyang. This includes UK-based civil servants and locally engaged staff. For operational and security reasons, we cannot provide a more detailed breakdown. Senior officials in the UK, and our ambassador to Pyongyang, expressed to the North Korean authorities grave concern about the recent cross-border incidents, and urged restraint.

According to Martyn Williams at North Korea Tech:

The late start of cellular telephony in North Korea has brought the country at least one advantage: it leads the world in 3G adoption.

An impressive 99.9 percent of all subscribers in the country use 3G, placing North Korea number one in the world, telecommunication analyst TeleGeography said on Wednesday.

The solid showing doesn’t really mean North Korea’s cellular network is ahead of the world. In fact, it does more to illustrate how statistics can sometimes provide only half the picture.

While 3G adoption is indeed strong, it’s because most people didn’t have a chance to subscribe to the country’s 2G network.

A small handful of subscriptions on the Sunnet network were allowed before restrictions were put in place in the wake of the Ryongchon train explosion in 2004. Phones were also expensive and the network was not available nationwide.

In contrast the 3G network has been made more widely available. It’s operated by Koryolink, a joint venture between the state-run Korea Posts and Telecommunications Co. and Egypt’s Orascom.

Koryolink had 301,199 subscriptions at the end of its third quarter, which represents a penetration of just over 1 percent of the country – that’s poor by international standards.

In contrast, Japan ranked second in the survey with 94.6 percent of cell phone users on 3G. That works out to about 115 million lines.

Read more here (image source).

According to the Korea Times:

The late North Korean leader Kim Il-sung proposed secret negotiations with Washington ahead of the assassination of then South Korean first lady Yuk Young-soo in 1974, according to a classified document dated June 6, 1974 from the U.S. Embassy in Senegal.

The revelation came after An Chi-yong, a former journalist based in the United States, posted the confidential dossier, classified as “secret,” on his website “Secrets of Korea,” Tuesday.

It reveals that the North’s founder, father of current leader Kim Jong-il, asked the late Senegalese President Leopold Senghor to deliver a secret message to the U.S. in 1974.

“President Senghor informed me on June 5 that during his recent visit to Pyongyang, Kim Il-sung charged him with a message for the United States government,” according to the dossier.

“Kim Il-sung said the DPRK (North Korea) would welcome secret negotiations with the USG (U.S. government) on the future of Korea.”

The suggestion was made two months before the assassination of the first lady on Aug. 15, 1974.

Yuk was shot by a Japan-born Korean believed to be a communist sympathizer and having acted upon orders from a pro-Pyongyang organization there.

The dossier also offers a glimpse of Kim Il-sung’s attitude toward Washington and Tokyo and his thoughts on the unification of the two Koreas.

“The North Korean leader told Senghor he felt the DPRK’s enemy in the Pacific is Japan, not us,” the document stated.

“What North Korea seeks is a confederation, not suppression of South Korea, and within that confederation, there would be a place for U.S. influence in the South.”

Another U.S. government document that cites a New York Times article by Richard Halloran reveals that Kim Il-sung may have sought a similar favor from the late Japanese Prime Minister Takeo Miki before the 1974 assassination.

“Halloran (NYT 8/10) says Kim Il-sung informed President Ford through Prime Minister Miki he wants to open direct talks with us to settle outstanding issues of Korea,” according to the dossier dated Aug. 11, 1975. “Wants us to send envoy to prepare agenda for talks with HAK (Henry A. Kissinger) on U.S. troop withdrawal, peace treaty to replace 1953 truce.”

The two Koreas remain technically at war as the 1950-53 Korean War ended in an armistice, not a peace treaty

It remains uncertain whether the communist North succeeded in holding bilateral talks with Washington.

A declassified U.S. document shows that Pyongyang continued its efforts to have dialogue with the U.S. even after the tragic assassination took place.

It says on Aug. 27 1974 an aide to then Romanian President Nicolae Ceausescu met with then U.S. President Ford at the White House to deliver a message from Kim Il-sung.

“The North Korean leadership wants to have confidential contact with the United States for discussions,” according to the declassified memorandum from President Gerald Ford’s files.

Yet, Ford’s response to the repeated proposal for talks was lukewarm.

“Certain things must precede such contacts. We don’t want to go in without a firm understanding,” the U.S. President was quoted as saying in the declassified documents.

Here is a link to the actual document.

Here is a link to “Secret[s] of Korea“.

Read the full story here:
NK proposed talks with US before 1974 assassination’
The Korea Times
Lee Tae-hoon
2011-1-11

UPDATE (1/14/2011): More form Martyn Williams here.

UPDATE (1/13/2011): According to Yonhap:

South Korea has blocked its people in the South from accessing Web sites using North Korea’s national Web domain name, saying the sites contain “illegal information” under the nation’s anti-communism and security laws, officials said Thursday.

The blockage by the South’s state-run Communications Standards Commission came less than a day after an expert said North Korea had renewed the use of its own national Web domain name of “.kp” in an apparent effort to widen public access to its propaganda sites.

The commission started blocking Web sites using the “.kp” domain from Internet users in the South attempting to view those sites, including an Internet portal with an address of http://www.naenara.com.kp, officials said.

“We continue to monitor propaganda activities by North Korea throughout the Internet,” said a commission official. “The Web sites were briefly accessible (in South Korea) because North Korea used its national domain (.kp) it had not used usually.”

Earlier in the day, Martyn Williams of IT research group IDG said in an e-mail that he found http://www.naenara.com.kp operating over the weekend while http://www.friend.com.kp and http://www.star.edu.kp likely came into use at about the same time. All of the sites use “.kp” — assigned to North Korea — as their final domain names.

“It was assigned in 2007 and managed by a company based in Germany, but the domain and a handful of sites also managed by the company disappeared in the second half of last year for reasons that are still unclear,” he wrote in his online article.

The re-emergence of the domain name represents “a step-up in the country’s Internet presence,” Williams said.

Kim Yong-hyun, a North Korea professor at Seoul’s Dongguk University, said, “North Korea seems to be trying to increase public access to its sites as part of its recent online propaganda campaign.”

The sites have separate addresses to allow Internet users to access them. According to Williams, the sites, which include one that represents the North’s official Korean Central News Agency (KCNA), all have their servers based in the communist country.

In the e-mail, the Tokyo-based technology expert said the main record for all the .kp names was updated on Jan. 3.

“So that’s the earliest any of these sites could have reappeared,” he said.

In recent months, North Korea has opened accounts at world-famous sites such as Twitter, YouTube and Facebook, drawing wide public attention. But the one on Facebook no longer operates while its Twitter and YouTube accounts were apparently hacked last weekend.

Naenara at http://www.naenara.com.kp is a multilingual portal site, and http://www.friend.com.kp is mainly an English Web site run by an organ that handles exchanges with other countries. The KCNA has its Web site at http://www.star.edu.kp.

South Korea bans its citizens from accessing pro-North Korea propaganda sites, citing the technical state of war it has been in with Pyongyang since the 1950-53 Korean War ended in a truce.

UPDATE (1/11/2011): Martyn Williams at North Korea Tech offers some more information:

Offline for months, the service has resumed via servers run by Star JV, the Internet joint venture formed by the North Korean government and Thailand’s Loxley Pacific. As reported previously, dot-kp was run by the KCC Europe operation in Germany but went offline in the third quarter of last year.

Two websites are already available via KP domain names. Both are hosted on the same web server. The first, Naenara, has been available for a few months via an IP address and the second, Friend.com.kp, has been offline since its domain name disappeared. You can find out more about each site in The North Korean Website List.

I’ve done a little digging around in the DNS (domain name system) records for KP and found the following eight KP top-level domains have been prepared for future use: net.kp, com.kp, edu.kp, gov.kp, org.kp, rep.kp, tra.kp and co.kp.

Both Naenara and Friend are already using com.kp. A domain name has been prepared for the Star Internet provider: star.net.kp, and one for the state-run Korea Posts and Telecommunications Co.: kptc.kp. I can’t find any other registered domain names at present.

Friends.com.kp is the web page of the Committee for Cultural Relations with Foreign Countries (aka TaeMun.  In Korean: 대외문화련락위원회)

UPDATE (1/9/2011): The Naenara URL came back online this weekend. The IP address http://175.45.176.14 has been replaced by the more memorable http://www.naenara.com.kp, though the IP address still works.  The Naenara mirror site, kcckp.net, apparently did not survive the transition.    Content from 2008 to the present is available, but all the content from 2005-2007 remains off-line and probably will not return.

ORIGINAL POST (Oct 28, 2010): North Korea’s premier web outlet, Naenara, was frequently inactive in the month of August.  Sometimes it was there, other times it was not.  The web portal was up for one day in September under a slightly different URL.  It has not appeared at all under its original URLs in October.

Today, Martyn Williams, who broke the story on the DPRK’s acquisition of a block of IP addresses, reports that Naenara has been migrated to the new DPRK addresses alongside the newly created KCNA web page.

According to Martyn:

North Korea’s Naenara website is back. The site went offline around early September when the dot-kp domain name space went down.

Naenara is run by Pyongyang’s Korea Computer Center and offers news, photos, shopping, tourism information and MP3 files from North Korea.

It’s running inside North Korea’s recently-activated domestic IP address space, but isn’t working perfectly. Some of the links point to dot-kp addresses, which are still not working. It’s worth keeping an eye on.

You can find it at http://175.45.176.14/en/

The IP address Martyn mentions is for the English version.

The Korean version is here: http://175.45.176.14/ko/

The French version is here: http://175.45.176.14/fr/

The Russian version is here: http://175.45.176.14/ru/

The German Version is here: http://175.45.176.14/de/

The Spanish version is here: http://175.45.176.14/sp/

The Chinese version is here: http://175.45.176.14/ch/

The Japanese version is here: http://175.45.176.14/ja/

The Arabic version is here: http://175.45.176.14/ar/

I will go through the new site to see if it is different in any way.  One obvious difference is that the archived materials from 2005 & 2007 are gone.

According to Lankov:

2010 was a hard and dangerous year in Korea. Alas, 2011 might become even worse.

At first glance, this statement might appear excessively pessimistic. After all, in the last weeks the tensions on the Korean Peninsula were decreasing, North Korea suggested negotiations, and South Korea also said that talks might be a good idea.

However, the appearances are misleading. If one has a better look at the recent crisis, as well as at the current mood in Seoul and Pyongyang, there is little ground for optimism. It seems that both North Korean strategic calculations and South Korean assumptions about ways to handle its uneasy neighbor will bring the crisis back – and with a vengeance.

What we have seen throughout the last year was another exercise in the habitual North Korean brinkmanship – yet another attempt to apply tactics which have been used many times and usually with great success.

When North Korean strategists want to squeeze some aid or political concessions from other side, they follow a simple but efficient routine. First, Pyongyang manufactures a crisis, and does everything to drive tensions high. The missiles are launched, islands are shelled or nukes are tested, while the usual verbal bellicosity of the North Korean media reaches almost comical heights. Sooner or later both the “target audience” and international community begin to feel uneasy, and when this point is reached Pyongyang suggests negotiations. Its neighbors and adversaries alike feel relief and start talks, which usually end with Pyongyang getting what it wants – in exchange for restoring the status quo.

In the past, this tactic has worked well (for example, this is how in 2007 North Koreans managed to push the George W Bush administration to switch to a soft line and resume aid). However, this time things are different. So far, North Korea is not getting what it wants.

But what does the North want to achieve with this seemingly dangerous (but actually very calculated) military/political theater? As usually is the case with Pyongyang’s foreign policy, it is about money. In 2008 South Korea and United States dramatically reduced the amount of unilateral and unconditional aid to the North.

It had to turn to China instead. China obliged, and it seems that the North Korean economy – while still very poor by current East Asian standards – is in better shape than at any time since the early 1990s (albeit this modest recovery seems to be, first and foremost, brought about by domestic transformation rather than by Chinese aid). However, this made North Korean leaders excessively dependent on China, whom they do not like and whom they do not trust (this seems to be a mutual feeling).

So, they want the US and South Korean aid back. First, it will increase the size of the entire aid pie, controlled and distributed by the regime. Second, it will provide Pyongyang with ample opportunities to distance itself from dangerous China, and acquire a number of sponsors whose contradictions can be used to North Korea’s advantage. The North Korean diplomats are very good at this game, which they learned in the 1960s when they exploited the Sino-Soviet schism with remarkable success.

The North decided that this was a time to exercise pressure on both Seoul and Washington (actually, this is what it has been doing since 2008). It is not often noticed that North Korea actually conducts two separate, if related, blackmail programs – one aimed at the US and another aimed at South Korea. The ways of exercising pressure should be different, because the concerns of these two countries are dissimilar.

In the case of South Korea, the North decided to take advantage of Seoul’s dependence on the international markets. Foreign investors and trade partners of South Korean firms are not going to be amused by the newspaper headlines which talk a war “which is going to erupt on the Korean Peninsula”.

These tensions are likely to have a negative impact on the South Korean economy, making the South Korean voter worse off. On top of that, the average South Korean voter does not usually care too much about North Korea, but still expects its government to be capable at handling the North, in order to avoid major confrontations. Therefore, the North Korean leadership expects that sooner or later South Korean voters will penalize an excessively stubborn government by supporting the opposition.

To the US, the North’s selling point is its ability to proliferate. Since for the Americans the major (almost only) reason they care about North Korea is its potential for nuclear and missile proliferation, the North Korean regime demonstrated to Washington that even without aid and in spite of the international sanctions, North Korean engineers and scientists managed to make considerable progress in areas of military significance.

In mid-November, just before the shelling of Yeonpyeong Island, a group of American nuclear scientists led by Dr Siegfried Hecker from Stanford, was shown a state-of-the-art uranium-enrichment facility whose scale and sophistication exceeded what the US experts believed to be possible. This is a major step towards a full-scale military uranium program, which is, incidentally, more difficult to control than the old plutonium program.

Now, after a few months of tension building, the North Koreans decided to test the ground and check whether the adversaries (and potential donors) are ready to give in. Frankly, Pyongyang’s decision seems to be surprising, since the answer is obvious: neither Washington nor Seoul is ready to make concessions.

Why didn’t the old tactics succeed this time? In short, because the attitudes in both Washington and Seoul changed in recent years.

Talking about the US side, the main reason why Washington was in past willing to give concessions and unilateral aid, was the once widespread (albeit unfounded and naïve) belief that this was a way to facilitate the denuclearization of North Korea. It was assumed that Pyongyang could be persuaded/bribed/pressed into surrendering its nuclear program. This belief evaporated in 2008, after the second nuclear test.

American policymakers have finally realized that North Korea is not going to surrender its nukes under any circumstances. North Korean leaders are ready to talk about arms control, not about disarmament. In other words, North Korean leaders hope to get paid (generously) for freezing their nuclear program while still keeping the existent nuclear devices. The US is not ready to discuss this yet.

With South Korea, the situation is more complicated. The Lee Myung-bak government was in favor of a hard line from the very beginning. After the Cheonan sinking and Yeonpyeong shelling, the South Korean public, usually cautious when it comes to matters of peace and war, switched to support of the hard line.

In a poll in late November, some 80% of participants said they were in favor of a massive military retaliation in the case of the next North Korean attack (and a considerable minority even said that they did not mind a war). This unusual bellicosity of the public, reinforced by the even harder position of the military, puts additional pressure on the government.

Paradoxically, the events (or rather non-events) of early December contributed towards Seoul’s shift to a hard line. Then, soon after the Yeonpyeong shelling of November 23, the South Korean military staged large drills in the disputed waters near the North Korean coast. Before the exercises, the North Koreans threatened a mighty counterstrike, but when Seoul decided to go ahead on December 20, nothing happened.

North Korea’s decision not to execute its threats was seen as a sign of weakness. A triumphant South Korean official said in a private conversation: “They are with their tail between their legs now. This is what we should have done from the very beginning.”

Therefore, the dominant view in Seoul now is that if North Korean leaders know that their new strikes will be met with a mighty response, Pyongyang will not dare to stage another attack. So, Seoul politicians believe that harshness is the best option, since North Korean leaders will surely duck a fight.

This seems to be an illusion – and, perhaps, a dangerous one. Like it or not, there is no valid reason why Pyongyang strategists should be afraid of a Southern counterstrike. It is true that North Korea does not want a full-scale war, but due to the peculiarities of its political system North Korea can sustain a minor military confrontation far more easily than its southern counterpart – or, to be more precise, in the case of such a confrontation the domestic consequences for the North Korean government will be far less serious.

Needless to say, even if a South Korean counterstrike kills many hundreds of North Korean soldiers or sailors, the leaders will not feel too sorry of them (and children of the leaders do not serve in the North Korean military). The loss of a few pieces of rusty military equipment of 1960s vintage will not upset them too much, either.

It is sometimes stated that an efficient counterstrike will at least lead to a loss of face for the North Korean leadership, and that fear of such humiliation could serve as a deterrent against future attacks. Unfortunately this seems to be wishful thinking as well. The North Korean government is in full control of the media, so such a defeat will remain unknown to almost everyone outside the military elite.

If this is the case, why did the North avoid a fight in December, after so many threats and bellicose statements? Because there is no reason why it should agree to fight at the time and place chosen by its adversaries, when these adversaries were ready to strike back. It makes much more sense to wait for a while and then deliver a sudden and powerful strike when the North Korean political leadership decides that the time is ripe.

It seems that we are not going to wait for long. Recent events leave little doubt that the North Korean charm offensive will be ignored by Seoul (and, perhaps, by Washington as well, even though signals are slightly mixed). The first sign of this position became visible on January 6 when the US and South Korea rejected North Korea’s call for unconditional talks with South Korea as “insincere” and repeated their usual set of demands, which are, alas, clearly unacceptable for the North Koreans.

The North Korean leaders will probably do what they did before in similar situations: they will stage a provocation or two in order to increase pressure on the stubborn Americans and South Koreans, in hope that sooner or later they will give in. After all, contrary to what Seoul wants to believe, the associated political risks for the North Korean elite are small and rewards in case of eventual success are significant.

This coming round of military/diplomatic might be more dangerous than usual, largely because of Seoul’s newly acquired belief in the power of counterstrikes. Now it seems likely that in case of another North Korean strike the South will retaliate mightily. This counterstrike is likely to trigger a counter-counterstrike, and there is even a probability (albeit very minor) that such an exchange will escalate into a real war or at least some intense fighting.

Far more likely, though, is that the situation will remain under control. In this case, the excessive reaction by the South Koreans is likely to amplify the message their North Korean adversaries want to deliver.

North Korean strategists want to damage the South Korean economy as well as create domestic tension, which will eventually turn the South Korean public against the current South Korean government and its North Korean policy. However, if such an exchange of fire happens we can be certain that the international media will not be merely writing about a “war that is about to start in Korea” but rather will declare that a “war started in Korea”. The impact of such reports on the world markets and, eventually, on the South Korean economy is easy to predict.

The South Korean government should not be misled by the current bellicose mood of the voters. This mood is not likely survive a major confrontation, and once the situation becomes really tough, the same people who now cry for revenge are likely to start blaming the government for its inability to maintain a stable and secure situation on the peninsula.

Alas, not much can be done now. The North is likely to follow the usual line of a professional (and usually successful) blackmailer: since pressure has not worked, even greater pressure should be applied. The South, confident in the power of deterrence, is likely to over-react, thus further aggravating the situation and increasing the scale of the next crisis.

Well, it seems that the year 2011 will not be especially tranquil in Korea. And the subsequent few years might be even worse.

Read the full story here:
Push could soon turn to shove
Asia Times
Andrei Lankov
1/12/2011

According to KBS:

South Korea says it will not re-station personnel at the inter-Korean economic cooperation office inside the Gaeseong Industrial Complex in North Korea.

An official from the Unification Ministry in Seoul said Tuesday that the decision was made as there is no work to be done at the office.

Seoul banned inter-Korean economic cooperation and trade in May of last year as part of its retaliatory measures for Pyongyang’s sinking of South Korea’s “Cheonan” naval vessel in March.

North Korea notified the South on Monday that it plans to resume operations at the economic cooperation office in the business park.

Meanwhile, the South accepted North Korea’s proposal to reopen the Red Cross communication channel at the truce village of Panmunjeom. The ministry official said that a South Korean liaison officer will answer the phone if North Korea attempts to contact the office Wednesday morning.

Read the full story here:
Seoul Will Not Send Officials to Gaeseong Office
KBS
1/11/2011

According to the Choson Ilbo:

Siem Reap, Cambodia’s second largest city near the sprawling ruins of the Angkor Wat, has two North Korean restaurants, down from three since North Korea recalled all their expat staff after Kim Jong-il’s stroke in 2008 and returned only the employees of two of them. The restaurants rely on South Korean tourists for business since the town is a popular destination for them.

One of them, called Restaurant Pyongyang, sells the famous cold noodles or naengmyeon for US$7 a dish, while North Korean dancers perform and pour drinks for customers. It used to be a regular stopover for South Korean tourists, with tour agencies charging $30 for a visit and a meal. One tour guide said, “In Cambodia $7 a dish is already pretty expensive, but many tourists go to the restaurant because of its attractions.”

After North Korea’s sinking of the Navy corvette Cheonan in March last year, the South Korean Embassy in Cambodia asked tour agencies and South Korean residents’ association there to avoid sending visitors from the South there, but local sources say the plea fell largely on deaf ears. But the North’s artillery attack on Yeonpyong Island in November last year finally did the trick. The South Korean residents’ association in Siem Reap voluntarily boycotted the North Korean restaurants, and tour agencies also voluntarily took them off their itinerary.

The restaurants are apparently suffering. A member of the South Korean residents’ association said, “Almost all of the customers were South Korean tourists, but it seems that even the performances have stopped now there are no customers.”

Around 120,000 South Koreans a year reportedly visited the two restaurants, contributing to an estimated W200-300 million (US$1=W1,126) in monthly sales. North Korea runs over 100 restaurants in China, Vietnam, Thailand, Laos and Russia, which serve as a source of much-needed hard currency for the regime by sending home $100,000-300,000 a year.

The mood in Siem Reap is now desperate. Last month, a placard outside a South Korean restaurant criticizing North Korea’s attacks were torn down by seven people who appeared to be North Korean agents, in what expats there believe was another small-scale North Korean provocation. Tour agencies are also losing revenues after taking the restaurants off their itineraries. “We used to charge $30 per visit and took 30 percent of the profits, but not any more,” a tour guide said.

South Korean residents’ associations abroad rarely voluntarily boycott North Korean restaurants. The Okryugwan chain of North Korean restaurants in Beijing’s Wangjing district is still accessible to South Koreans. A South Korean Embassy official there said, “We asked residents to avoid the restaurant in November but did not force them.”

Meanwhile, a North Korean restaurant in Kathmandu, Nepal closed down in November after its North Korean manager defected to South Korea.

Read the full story below:
N.Korean Restaurants Abroad Feel the Pinch
Choson Ilbo
1/10/2011

According to The Australian:

The use of an Australian-owned cargo ship to smuggle weapons from North Korea to Iran has been highlighted in a report to the UN.

It was one of several breaches of UN sanctions against Kim Jong-il’s regime detailed in a report to the Security Council.

The report, which was submitted to the council recently after months of obstruction from China, found the North was making $US100 million a year through illegal arms sales to Syria, Iran and Burma.

Pyongyang used shadowy webs of front companies, false manifests and complex routes to try to get around sanctions aimed at stopping its arms proliferation, the investigation found.

The report flags the 2009 interception of the ANL Australia in Sharjah as one of at least four occasions that North Korea was caught out exporting arms or defence equipment.

The report said weapons were seized from the ANL Australia in the United Arab Emirates on July 22, 2009.

The cargo is thought to have included up to 10 containers of arms, including rocket-propelled grenades and trigger mechanisms and propellant, although this is not detailed in the report.

The cargo was packed and sealed in North Korea and shipped to China, where it was loaded aboard the ANL Australia en route to Iran.

The Bahamas-flagged vessel was owned by ANL Container Line at the time.

ANL, once Australia’s national shipping line, was taken over by French company CMA CGM.

Despite the breach of sanctions, an Australian government investigation found ANL was not responsible because the ship was chartered by a foreign company at the time.

“The Australian government’s inquiries into this matter indicated that at all relevant times the vessel was not under the operational control of its owner, but was rather being chartered by a non-Australian company,” a Department of Foreign Affairs and Trade spokesman said.

“No conduct relevant to the shipment can be attributed to an Australian person or body corporate,” he said.

ANL declined to comment.

The report found that while no ballistic missile or nuclear-related materials emanating from North Korea had been intercepted since sanctions were applied, evidence suggested “continuing DPRK (North Korea) involvement in nuclear and ballistic missile-related activities in certain countries, including Iran, Syria and Myanmar (Burma)”.

“To supplement its foreign earnings, the DPRK has long been involved in illicit and questionable international transactions (including) the surreptitious transfer of nuclear and ballistic missile-related equipment, know-how and technology,” it says.

The panel received government reports suggesting North Korea had helped build Syria’s Dair Alzour nuclear facility (destroyed in 2007 by an Israeli attack) along with details of Japan’s arrest in June 2009 of three individuals trying to illegally export a magnetometer, a device with potential missile-related uses, to Burma.

The report cited in the story is the “Panel of Experts” report to the UNSC.  You can read (and search) it here (PDF).

Read the full story here:
UN cites ANL in N Korea arms smuggling
The Australian
Rick Wallace
1/10/2011

According to Yonhap:

North Korea’s external trade fell in 2009 with its economic reliance on China staying significantly high, a report showed Sunday, underscoring the need for Pyongyang to diversify its industry structure and open its market for survival.

According to the report by the Korea Finance Corporation, North Korea’s total trade amounted to US$3.41 billion in the cited year, down 10.6 percent from a year earlier. The trade decrease was the largest since 1998.

Exports dropped 6 percent to $1.06 billion, while imports fell 12.5 percent to $2.35 billion over the same period, the report showed, bringing the North’s trade deficit to $1.29 billion.

With international sanctions in place for its nuclear ambitions and its reluctance to open up its economy, the North’s dependence on China stayed quite high at 80.4 percent in 2009, the report showed. Its trade deficit with Beijing totaled $1.1 billion.

The report said that the North should open its market and diversify its industry structure currently focused on producing weapons, while improving overall infrastructure such as power generation facilities, should it seek to revive its economy.

It also emphasized the need for resumption of inter-Korean trade and an increase in international aid for the North’s survival.

“For the North Korean economy to get back on track, inter-Korean trade has to be resumed and aid from the international community should also be expanded,” said an official of the state-run corporation.

South Korea’s economic relations with the North have remained frozen since Seoul cut almost all inter-Korean trade in May 2010 after it found Pyongyang was behind the deadly attack of its naval ship in March that killed 46 sailors.

The move led to a drop of around 30 percent in inter-Korean trade last year, according to the latest report by Seoul’s customs office. South Korea is one of the North’s major trade partners, although the two remain technically at war as their 1950-53 conflict ended in a truce, not a peace treaty.

If a reader can send me a link to the actual report, I would appreciate it.

The Los Angeles Times also covered the report.

Read the full story here:
N. Korea’s trade falls, reliance on China remains high in 2009
Yonhap
1/9/2011