US federal court rules against DPRK

September 11th, 2014

In July 2014 a US federal court found the DPRK guilty of proliferating weapons and providing training to Hezbollah.

Here is the ruling (PDF).

 

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Competition rises among factories and department stores in North Korea: Delivery services now available

September 5th, 2014

Institute for Far Easter Studies (IFES)
2014-9-4

It appears that some factories and department stores in North Korea have begun to implement a delivery service in response to customer demand. This new customer-oriented service seems to have arisen out of the Kim Jong Un regime’s goal of increasing autonomy and competition among businesses.

According to the newest issue of “Choguk” [Joguk] (“Motherland”, September 2014), a media outlet associated with the General Association of Korean Residents in Japan, North Korea’s representative state-run department store Pyongyang Department Store No. 1 has been making efforts to diversify the services offered to its customers. The article specifically revealed a personal delivery service, saying, “Salespersons have responded to the public’s requests and have begun to deliver ordered products to sell directly to customers at their doorsteps.”

Salespersons from Pyongyang Department Store No. 1 have also been travelling to power plants, mining sites, textile mills, farms and other worksites to sell products directly to workers and farmers. Other businesses, such as the Potong River Shoe Factory, have also been diversifying customer services. For example, employees now visit customers’ homes to measure shoe size and satisfy other requests they may have when placing an order for shoes.

The Daedong River Passenger Transport Company in Pyongyang is currently offering a taxi dispatching service to customers who call in and request a pickup. Similar to the workings of South Korea’s taxi service, North Koreans may simply dial “186” to be connected to the closest dispatch office, which then sends out a taxi to pick up the customer.

On the other hand, North Korea has recognized the problem of the low-quality products and poor construction work and has emphasized that efforts must be made to remedy these areas. In the most recent issue of the quarterly academic journal, Kyongje Yongu [Economic Research] (2014, Issue 3), one article points out problems in the poor quality of North Korean-made products and construction, saying, “Neglect in quality growth is an outdated attitude.”

Specifically, the article mentions the problem of promising completion of construction according to deadlines: “Technical regulations and construction methods are disregarded when projects are rushed to be finished by their completion date, which is often decided in advance to coincide with a holiday or anniversary.

Currently, North Korea has undertaken large-scale construction operations to finish the Kim Chaek University of Technology’s faculty apartments, the Pyongyang Orphanage and Nursery, the North Pyongan Chongchon River Power Plant and other projects spanning various fields. The goal is to complete these projects concurrently with the anniversary of the foundation of the Worker’s Party of Korea (October 10).

At construction sites around North Korea, it appears that all available resources are being mobilized to engage in a so-called “speed battle” with these construction deadlines. The side effect of this huge emphasis on speed has resulted in many instances of poor construction, like the collapse of the 23-floor apartment building in Pyongyang’s Ansan-1-dong back in May.

The article also points out, “Despite attempting to work toward self-sustainability, there are events where lower quality, alternative products are being used below the material requirements that are leading to lowered quality work.” Furthermore, the article emphasizes, “Production and circulation of faulty products or products which cause harm to the health or lifestyle of the people must be stopped.”

It has also been reported that corruption is taking place at factories and construction sites, with party officials or intermediary managers amassing riches by siphoning off materials and pocketing the money. This leads to further problems in product quality and defectiveness.

Due to the issues of poor construction and product quality, the article points out, “There are many areas in our material economic life that fall behind the global trend,” but “if the quality of products and buildings are improved, the need to consider products from other countries will wane.”

In order to solve these problems, the article suggests implementing product standardization and specialization and encourages research in industrial design.

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Rodong Sinmun calls for strengthening the cabinet in economic matters

September 5th, 2014

UPDATE 1 (2014-9-11): IFES reports: North Korea emphasizes innovation using “economic management in our style” approach:

North Korea has announced that the nation’s economic management problem will be solved through their “own style,” once again stressing the superiority of the Socialist self-reliant economic model and reiterating the need to construct a strong and prosperous nation.

A September 3, 2014 editorial in the Rodong Sinmun argues the importance of economic management and leadership, saying that it must be improved to meet the demands of the North Korean economy, which has reached a new turning point in its development.

“Economic Management System in Our Style” is North Korea’s new approach to economic principles originally stemming from Kim Il Sung and Kim Jong Il. The editorial emphasizes that it is a project that will bring real results and continuous development.

Furthermore, the editorial argues that economic management and leadership must be carried out according to objective economic law and scientific reason in order to ensure the greatest possible economic practicality.

The article also emphasizes the role of scientific technology, saying that “Research and development must be actively promoted in all areas and all aspects of the people’s economy. New scientific technology must be integrated into production in order to renovate the economy and meet the demands of the new generation.”

The editorial also calls for conservation of national human and material resources as much as possible, as fundamental problems in building a strong economic nation and improving the life of the people, including the lack of adequate power and food, have yet to be solved.

The roles of economic advising agencies and their workers were emphasized as being especially important. The editorial stresses that these economic advisers must become aware of the deep responsibility they hold, and must work to achieve real results in improving the country’s economic management.

Finally, the role of the Cabinet was also emphasized as the commander of the economy. Specifically, the editorial calls for the strengthening of the Cabinet-centered system, in which the Cabinet should oversee all economic institutions and sectors and create policies accordingly. In addition, the Cabinet’s role to guide companies with scientific business and corporate strategies is emphasized so that they may actively engage in creative business activities.

North Korea has been rolling out economic improvement measures since early 2012, starting with the agriculture sector. Since then, an “independent profit system” has also been introduced in various factories and businesses where managers are allowed more autonomy in managing operations, but are ultimately responsible for the business’s productivity.

Beginning this year, the “business know-how” concept was applied to various farms and factories, and increased profits reportedly have begun to see their way back into the hands of the workers. The workers, whose job performance has increased due to the rise in profits, are seen as the driving force of North Korea’s economic development.

ORIGINAL POST (2014-9-5): Thanks to Choson Exchange for spotting this one. According to Rodong Sinmun (2014-9-4):

Giving Full Play to Advantages and Might of Self-surpporting Economy

It is necessary to settle the issue of economic management by Korean style in order to fully demonstrate the advantages and might of the Juche-oriented socialist self-supporting economy and win the final victory in the drive for building a thriving nation.

The establishment of Korean-style economic management method is, in essence, the work to apply, carry forward and develop the principle and methods of economic management indicated by President Kim Il Sung and leader Kim Jong Il as required by the present times.

It is necessary to hold fast to the socialist principle in improving the economic management.

It is essential to ensure the maximum economic profitability by guiding and managing economy according to the objective laws of economy and scientific reason.

In order to improve the economic management it is important to raise the responsibility and role of the economy guidance institutions and officials.

It is possible to successfully achieve economic development only by working out a scientific economy development strategy, enlisting the natural resources and all potentials of the country to the maximum, ensuring a steady growth of production and keeping the overall balance of economy.

The Cabinet is the economy command of the country.

It is necessary to strengthen the Cabinet responsibility system, system centering on the Cabinet, concentrate all the economic fields and overall economic work on the Cabinet and take measures under the supervision of the Cabinet.

The editorial calls for improving the economic management as required by the developing reality and intended by the party and thus giving fuller play to the advantages of Korean-style socialism and bring about a fresh turn in the building of a thriving nation.

Here is a PDF of the web page should the URL go bad.

It is worth noting briefly that this is what we have seen recently in recent consolidation of the JVIC, SEDC, and Ministry of Foreign Trade into the Ministry of External Economic Affairs.

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DPRK restricts international mobile phone use

September 1st, 2014

According to Reuters:

In a move that makes it harder for North Koreans to gain illicit access to the global Internet, North Korea now only allows mobile phone SIM cards used by tourists to be active for the duration of their visit, tourism sources told Reuters.

Unlike North Koreans, foreigners visiting the isolated country can freely browse social media sites such as Facebook and Twitter using the Koryolink domestic network.

Under a change made in July, North Korea deactivates the card when a visitor leaves, ensuring that it can not be left for use by a resident, the sources said. It can be reactivated when a visitor returns to the country.

“This basically means in practical terms that if someone leaves the country they can’t simply leave their phone with a local friend and have them use the Internet,” said one source, who declined to be identified due to the sensitivity of discussing such issues when working in North Korea.

Read the full story here:
North Korea tightens grip on phone SIM cards used by tourists
Reuters
James Pearson
2014-9-1

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DPRK still owes Sweden for old Volvos

August 29th, 2014

According to Newsweek:

North Korea’s foremost trade debt to the western world is bizarre even by North Korean standards. Each time the administration misses a payment, as it has done every year for the past 40 years, we are reminded of one of the most unexpected political twists of the last century: Kim Il-sung scamming Sweden out of 1,000 Volvo 144 sedans.

Each fiscal year, the Swedish Export Credits Guarantee Board calculates interest on a single debt that accounts for more than half of all its political claims. It’s been a tradition since 1974, when the government agency was advised to insure Volvo, Atlas Copco, Kockum, and other Swedish companies’ exports to an entirely new buyer: Supreme Leader Kim Il-sung. For nearly half a century, the Board has been in charge of the Sisyphean task of coaxing €300m from a nation that thinks international law is an elaborate gambit designed by capitalist pig-dogs.

“We semi-annually advise when payments fall due,” Stefan Karlsson, the board’s head of risk advisory, tells Newsweek. “However, as is well known, North Korea does not fulfil their part of the agreement.” Sweden being Sweden and North Korea being North Korea, that’s about as hardball as it gets.

Small wonder that a regime so impressed with itself soon developed expensive taste. “Inside the 144 GL you sit on leather,” reads the unambiguous 1970s marketing material that Volvo likely sent its North Korean buyers. Together with contemporary industry giants Atlas Copco and Kockums, Volvo was one of the first European companies to foray into the North Korean market, and promptly received an order for 1,000 vehicles, the first of which were delivered in 1974. But less than a year later, the venture blew up at a Swedish-Korean industrial trade fair in Pyongyang, where it suddenly became clear that the Kim regime wasn’t actually paying for the goods it was importing – not even the machines it ordered for the expo. The bills were simply piling up.

Exporters realised that the venture had gone horribly wrong. But for the past few years, Sweden had had North Korea fever, with countless hours and funds spent on diplomatic and industrial ties. Acquiescing in a massive failure was not easy. “Many had been blinded by North Korea’s impressive economic growth – people had raced to get there first,” Lamm Nordenskiöld says. “Sweden was supposed to be the first country to unlock this new market.”

While many companies pressed on with payment negotiations in an effort to save face, Swedish media was having a blast unraveling one of the most bizarre trade debacles in recent memory. In an indignant spread featuring a photo of the supreme leader with the caption “Kim Il-sung – Broke Communist,” Åge Ramsby of the newspaper Expressen in 1976 went all out listing reports of other debts the Kim regime shirked, including a cool €5m to Swiss Rolex, from whom it had allegedly ordered 2,000 wristwatches with the engraving “donated by Kim Il-sung”.

“North Korea had expected to pay their foreign debts with deliveries of copper and zinc,” the Swedish newspaper Dagens Nyheter wrote in 1976, referring to the reserves the imported mining equipment was supposed to unlock. “But the North Korean economists had been too optimistic in their calculations, and the international market price for these ores had also dropped ­catastrophically.”

Fair enough – but two things suggest that botched calculations and sheer lack of funds only partially explain North Korea’s failure to pay up. First, it is widely accepted among biographers and manufacturers that the Kim regime conducted extensive industrial espionage during the trade fair. Colluding to cop specs from technology you’re paying for would be weird even by Kim’s standards.

More importantly, Erik Cornell, a diplomat and former Swedish ambassador to North Korea, recalls in his book North Korea: Emissary to Paradise a widespread local belief that the Western world had finally “seen the light” in the global struggle against the American imperialist – that Europe had recognised its duty to assist the brave People’s Republic, and that quibbles regarding who owed whom money would soon dissolve in grand efforts to crush capitalism as a whole.

Adjusted for interest and inflation, the debt to the Swedish state now exceeds three billion Swedish kronor, or €300m. It is an astronomical claim, particularly on capital that has depreciated to a fraction of its original value.

If Kim Jong-un and his officers rounded up all 1,000 vehicles and sold each of them at the current book value of about €2,000, they would raise 0.6% of the debt.

Read the full story here:
North Korea Owes Sweden €300m for 1,000 Volvos It Stole 40 Years Ago – And Is Still Using
Newsweek
John Ericson
2014-8-29

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Vietnam recalls traditional North Korean medicine

August 29th, 2014

Mannyon-rx-factory-2014-8-29

Pictured above: The Mannyon Pharmaceutical Factory in North Korea which produced the banned medicine.

According to Vietnamnet Bridge:

The Bureau of Food Safety of the Ministry of Health on Wednesday decided to take Angunguhwanghwan (안궁우황환), a functional food produced by North Korea, off the market. It will also destroy all of the products, which contained high concentrations of mercury, arsenic and lead.

Test results of this product revealed that it contained mercury and arsenic exceeding the allowed limits. The Central Institute of Drug Testing collected the samples from the LC Tacy Red Ginseng Showroom in Hanoi.

The bureau has asked the firm to stop circulation, revoke and destroy the Angunguhwanghwan product and report the results to the department before August 29.

The product, produced by the Korea General Mannyon Health Corporation Chongryu No2, North Korea, was imported by Mannyon Vietnam. The product was licensed by the Bureau of Food Safety in July 2013.

As reported by the importer, it imported 30 boxes of this product in June 2014, with the purpose of introducing it to the local market. Four of the boxes were tested.

Here is a photo of the product:

Mannyon-rx-factory-product-banned-2014-8

Read the full story here:
N. Korean functional-food item taken off market
Vietnamnet Bridge
Le Ha
2014-8-29

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Norwegians seeking to set up art school in DPRK

August 28th, 2014

According to the Art Newspaper:

The North Korean government has approved plans by two Norwegian artists to open an art academy in the country. Henrik Placht and Morten Traavik travelled to North Korea together for the first time in August to flesh out the proposal and to look for potential sponsors. So far they have received financial support from the Prince Claus Fund.

The academy is due to be called DMZ after the term for the Korean demilitarised zone. It will primarily be an academy for North Korean students, but the plan is to open it up for international exchange programmes, Placht says.

“One of the reasons for us going to North Korea is that we don’t believe in sanctions and the boycott of art,” Placht tells The Art Newspaper. “Next year we are planning an exhibition and workshop in North Korea, in co-operation with the North Korean government, which will feature well-known international artists as well as North Korean artists,” he adds.

The artists already have good contacts in North Korea thanks to Traavik, who has produced several art projects in the country—some in response to North Korea’s dictatorship. In 2012, Traavik organised The Promised Land, a performance in Kirkenes, northern Norway, in which North Koreans holding flags instructed more than 200 Norwegian soldiers to create sequences of images using individual placards.

That same year, Traavik also produced the first Norwegian arts festival in North Korea, “Yes, we love this country”, named after Norway’s national anthem. Meanwhile, earlier this year, he arranged for musicians from the Kum Song Music School to come to Bergen in western Norway to perform a Norwegian children’s play.

Placht also has experience setting up academies in extreme political contexts. In 2002, he founded the International Academy of Art Palestine, where he was a project director until 2009. “I will be able to draw on my experiences in Palestine when it comes to fundraising, curating and co-operating with the government,” Placht says. “But I will also seek to create trust with North Korea so that they will have a natural ownership of the academy.”

More information here.

Read the full story here:
Norwegian artists plan to open art academy in North Korea
Art Newspaper
Hanne Cecilie Gulstad
2014-8-28

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German Government offers TB assistance to DPRK

August 26th, 2014

According to Yonhap:

The German government has provided North Korea with US$600,000 in medical aid via [Caritas International], a U.S. media reported Tuesday.

The Roman Catholic group Caritas International, which was launched in Germany in 1897, has been campaigning to help the needy in the impoverished communist nation, especially those infected with tuberculosis (TB) and hepatitis.

“The German government is providing 450,000 euros [$600,000] to be used for the TB patients in the DPRK,” Reinhard A. Wurkner, a Caritas official in charge of Asia, was quoted as telling the Voice of America. DPRK is the acronym for the Democratic People’s Republic of Korea, North Korea’s official name.

Caritas began its North Korea project in 1996. It has since offered medical and nutritional assistance to TB and hepatitis patients in the country.

Read the full story here:
German gov’t offers US$600,000 in N. Korea aid
Yonhap
2014-8-26

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DPRK rice imports from China increase

August 25th, 2014

According to Yonhap:

North Korea bought US$7.02 million worth of rice from the neighboring country last month, up 115 percent from $3.27 million a year earlier, according to Chinese trade data from the Seoul-based Korea International Trade Association.

The amount also represents an on-month increase of 53 percent from $4.57 million.

The sudden increase in imports comes amid reports that the price of rice has risen sharply in the North.

According to the South Korean online newspaper DailyNK on Aug. 12, rice cost 5,800 won per kilogram in Pyongyang, up 1,550 won from the middle of July.

Read the full story here:
N. Korea’s imports of Chinese rice more than double
Yonhap
2014-8-25

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DPRK curtailing family visits to China

August 25th, 2014

According to the Daily NK:

The number of North Korean residents permitted to visit relatives in China is down significantly from last year’s statistics during the same period. Yet another attempt to regain control, this move is another attempt by the paranoid leadership to block exchanges with the outside world and the plethora of information available there.

A source in China reported to Daily NK on August 22, “In August, there are usually no large events taking place in North Korea, so it’s usually easier for people to visit family members in China then; this year though, that doesn’t seem to be happening.” He went on to explain the reasoning behind the decline, “There is testimony that the North Korean authorities are actively curtailing the number of those going to China for this purpose.”

North Korean residents traversing the border to visit family members in China began in 2000, just after the period of the famine, referred to as the “Arduous March.” As the authorities could no longer provide regular food rations to the people, it resorted to dispatching them to “go abroad and seek help.” Naturally, China presented as the simplest option.

The currency reform on November 30, 2009 sought to curb inflation and monetary overhang but resulted in the inverse, hyperinflation. Residents took to seeking out their brethren in China for assistance to cope with the additional financial hardship. The outcome of the 100:1 redenomination fostered increased mistrust in the authorities by residents as well as mass panic on the ground; most watched helplessly as hard-earned savings were reduced to worthless bits of paper.

The situation this year is vastly different, the source explained. This month has seen daily averages of five North Korean travelers pass through Dandong Customs House, a sharp decline from the 50-100 individuals who moved through on a given day in past years, an indication that the North Korean authorities have drastically reduced visas permitting these visitations.

A similar dip in numbers arose shortly after events commemorating the anniversary of Kim Il Sung’s birth on April 15th, 2014; the daily average of North Koreans advancing through Dandong Customs House was approximately 10 people. This is the busiest time of year in North Korea, as rice-planting season runs from May to June and the entire population is mobilized to work on farms, explaining the decline in those headed to China.

“There are some North Koreans who are still going to China, but most of them are involved in business or trading; general residents are nowhere to be seen. Compared to the annual crowds pouring out after ‘Victory Day,’ [July 27th celebrations marking the signing of the Korean War Armistice signed in 1953, perceived as a victory in the North] this is quite unusual,” he said.

The source interpreted this not as an anomaly, but rather as a measure instigated by a regime gaining confidence in its economic status. This year did see record breaking trade activity between China and North Korea and the relative stabilization of market prices in the North. Rather than seeking help abroad, the North Korean authorities are trying to solve these matters domestically; with concurrent attempts to cultivate a better image internationally.

Most notably, residents’ exposure to outside information in China has given the authorities new pause in their willingness to send them abroad; potential economic gains in China are not worth North Koreans breaking away from state ideology.

“In the past, people only had to offer up the proper amount in bribes to the State Security Department to get them to overlook activities by Christians or others entrenched in ideas acquired on the outside, but now it’s certain they would get caught,” he explained. Now that the authorities are aware of the effects, they are ratcheting up their efforts to stem them, “There are so many who don’t return these days that the authorities fear even bigger problems will arise if they allow people to go [to China].”

“The stringent controls placed on border security and outside phone calls are so much more severe since Kim Jong Eun came to power. The latest in this series of attempts at mind control is to do away with any chance for North Koreans to meet freely with relatives in China,” he concluded.

The upcoming September 9th holiday, which marks the founding date of the state, and the day the Chosun Workers’ Party was founded, October 10th, are both expected to yield even fewer able to enter China to visit family members. While there is always the possibility for the North Korean authorities to expand permission again after the events end, the downward trend is expected to continue.

Read the full story here:
NK Authorities Slash China Visits
Daily NK
Lee Sang Yong
2014-08-25

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