North Korean Economy Watch

UPDATE: According to the State Department web page:

Philip J. Crowley
Assistant Secretary, Bureau of Public Affairs
Washington, DC

Question Taken at the June 23, 2010 Daily Press Briefing
June 28, 2010

Question: Has a determination been made whether to put North Korea back on the list of State Sponsored Terrorism? Was the Cheonan incident a factor?

Answer: The standards for designating a country as a state sponsor and rescinding the designation are set out in the three separate statutes: Section 620A of the Foreign Assistance Act (22 USC 2371), Section 40 of the Arms Export Control Act (22 USC 278), and Section 6(j) of the Export Administration Act (50 USC app 2405(j)). All three statutes provide for the Secretary of State the authority to designate countries the governments of which “repeatedly provide support for acts of international terrorism.” Therefore, the Secretary of State must determine that the government of North Korea has repeatedly provided support for acts of international terrorism. The United States will follow the provisions of the law as the facts warrant, and if information exists which indicates that North Korea has repeatedly provided support for acts of terrorism, the Department will take immediate action. As a general matter, a state military attack on a military target would not be considered an act of international terrorism.

PRN: 2010/867

ORIGINAL POST: According to Daily Yomuri (Japan):

U.S. President Barack Obama’s administration has decided not to relist North Korea as a state sponsor of terrorism, U.S. sources said Tuesday.

Since South Korea concluded last month that one of its patrol ships was sunk by North Korea in March, some U.S. lawmakers have stepped up calls to reinstate North Korea as a state sponsoring terrorism.

U.S. State Department spokesman Philip Crowley also admitted government officials were considering putting North Korea back on the U.S. list of state sponsors of terrorism. But the administration refrained from doing so, as given the current circumstances, it was judged difficult to meet the conditions needed for relisting, the sources said. The administration also wants to avoid provoking Pyongyang to the extent it conducts a third nuclear test.

State sponsors of terrorism, as defined by the U.S. State Department, are “countries determined to have repeatedly provided support for acts of international terrorism.” To be considered for the list, it must be proved that the country in question had decisive influence on terrorist groups as they obtained funds, weapons, materials and secure areas for conducting operations.

U.S. officials examined North Korea’s suspected involvement in supplying weapons to radical Palestinian Islamic group Hamas, but had yet to obtain evidence necessary for relisting North Korea, the sources said.

Read the full sotry here:
U.S. spares N. Korea ‘terror sponsor’ status
Daily Yomuri
Keiichi Honma
6/24/2010

According ot the Daily NK:

South Korea has granted permission for an aid shipment of anti-malarial medication, the seventh shipment of aid to North Korea since the Cheonan sinking.

An Ministry of Unification said today, “We have decided to allow a shipment of anti-malarial medication worth $335,000, which was requested by the Korean Sharing Movement.”

Korean Sharing Movement is a well-known aid organization targetting North Korea.

The Korean Sharing Movement says it plans to send malaria diagnosis kits, mosquito nets and vaccines for pregnant women among other things to Jangpung, Geumcheon, Tosan and Kaesong, which are areas of North Korea adjacent to Gyeonggi Province, the province which surrounds Seoul.

Funding for the project has been provided by the government of Gyeonggi Province.

Most previous, post-Cheonan shipments have been aid for infants and children. Earlier this month, two aid consignments of infant-related aid were sent.

The Unification Ministry in Seoul, upon granting permission for the previous shipments, explained, “While South Korea will hold off on inter-Korean business projects on principle, we will continue providing purely humanitarian aid for the weak, such as infants and children.”

Including today’s shipment, the total cost of aid sent since punitive measures against North Korea were announced on May 24 has been approximately $603,000.

The current shipment of anti-malarial medication is being sent, the Ministry of Unification explained today, because malaria has the potential to spread into South Korea during the summer months.

Read the full story here:
Rok to send malaria medication to DPRK
Daily NK
Chris Green
6/24/2010

According to the Choson Ilbo:

According to a report by the Ministry of Unification submitted to the National Assembly, there are about 120 companies operating at the complex employing over 44,000 North Koreans.

The number of workers continues to grow from 42,000 in January to 43,000 in April to 44,000 this month, the report said.

Read the full story here:
Number of N.Korean Workers at Kaesong Increases Despite Inter-Korean Tensions
Choson Ilbo
6/24/2010

According to the Daily NK:

North Korea designates three days between June 25 and 27 as “days of struggle against imperialism and the U.S.” and holds several events including meetings between Korean War veterans and younger generations, screenings of war movies, showing war-related propaganda, special lectures by aged veterans and so on.

Meanwhile, the authorities categorize Korean War veterans into two groups.

The first group consists of those who have earned the title “Hero of the Republic,” recipients of the first and second grade “Hardworking Medal” or first grade “Flag Medal”.

They receive 800g of rice per day and 120 won per month.

In the second group, there are recipients of the second and third grade “Flag Medal” and “Military Meritorious Service Medal.” They are given 600g of grain and 60 won.

They are special seats for wounded soldiers on trains, buses and in other public places. Campaigns to help veterans’ families are common.

However, the veteran-friendly atmosphere has also been much reduced since the late 1990s.

To aged veterans and families of fallen soldiers, the authorities used to present home appliances such as Daedonggang televisions, clothes, traditional clothes for women and such like, calling them “gifts from the General.” But the scale and quality of such gifts has been trimmed a lot in recent years, now amounting to little more than ginseng liquor and a few roots of ginseng or another traditional supplement. However, they still receive these gifts.

And, at least for a veteran living in Pyongyang, the authorities serve a bowl of cold noodles in Okryukwan, a famous restaurant, every anniversary of victory in the Korean War. In rural areas, veterans have stopped waiting for help and have taken to cultivating mountainous fields to make ends meet.

Read the ful story here:
The Lives of North Korean Veterans
Daily NK
Min Cho Hee
6/24/2010

Institute for Far Eastern Studies (IFES)
NK Brief No. 10-6-23-2
6/23/2010

Kim Jong Il visited Sinuiju on June 17, spending three days inspecting industrial facilities with third son and possible successor Kim Jong Eun. One visit was to a shoe factory, at which Kim Jong Il observed modernized technology and production equipment. On another stop, at the Sinuiju Cosmetics Factory, Kim Jong Il met with the factory manager and foremen, providing them and the laborers with encouragement. Kim Jong Eun also made an appearance at the meeting, indicating that the effort to install him as the next North Korean leader has progressed to the point at which he is being directly introduced to the people.

According to a Daily NK report quoting a source in Sinuiju, Kim Jong Il’s automobile procession to Sinuiju was “impressive”, and was “about twice as large” as previous processions. The report also noted that Kim Jong Eun exited a care and met directly with workers at the cosmetics factor and at Rakwon Machine Complex, and that “Kim Jong Eun took most of the responsibility for [Kim Jong Il’s] protection entourage and for the on-site guidance.”

That on-site guidance parties have grown considerably larger than in other years is partly due to the fact that Kim Jong Eun is accompanying his father, but also because many more other officials are also traveling with Kim Jong Il. On-site guidance has transformed from that of giving business advice to actively promoting succession by Kim Jong Eun. According to one source, Kim Jong Eun took the lead on everything from succession issues to on-site guidance during this latest visit. In addition, central authorities were said to have encouraged business and city officials to follow Kim Jong Eun.

Last December, documents for indoctrinating cadres were distributed by Party officials. The propaganda praised Kim Jong Eun, calling him ‘the number-one guard of [Kim Jong Il], stepping first to the General’s on-site guidance visits to every site without regard to any conditions; in all weather, any temperature or wind and any landscape.’ In the documents, Kim Jong Il is quoted as saying, “The Captain has been assisting me with lots of my work,’ noting that Kim Jong Eun is taking part not only in his father’s security, but also in on-site guidance.

Kim Jong Eun’s actions during the latest visit to Sinuiju show that he has gained enough power in the protection bureau to be directing the bodyguard contingent assigned to his father, and his influence and authority is evident through his on-site guidance. Kim Jong Il’s visit to Sinuiju, which serves as a gateway for trade with China, could be part of preparations for large-scale economic cooperation with the PRC. Last December, Kim Jong Il visited Rason City, the site of the country’s first free trade zone, and declared Rason a ‘Special City’ in an effort to attract foreign investment from Beijing and abroad. Sinuiju and Rason will serve as conduits for economic cooperation and trade with China.

According to Yonhap:

South Korea is considering providing about 100 billion won (US$84 million) of rescue funds to hundreds of its companies hamstrung by a ban on cross-border trade with North Korea, a senior government official said Wednesday.

The ban has been in effect since a month ago after South Korea concluded from a multinational investigation that North Korea was to blame for the deadly March 26 sinking of its Cheonan warship.

Read the full story here:
S. Korea mulling huge rescue funds for troubled inter-Korean trade firms
Yonhap
Sam Kim
6/23/2010

Is anyone else out there having trouble accessing the Naenara site (aside from those of you in South Korea)?

The North Korean web service, Naenara (Wikipedia page here, though not much info), used to be posted on two domains: Kcckp.net and Naenara.kp.  It looks like these sites are down—as well as their foreign language services: /en (English), /fr (French), /ja (Japanese), /ru (Russian), /ko (Korean), /ch (Chinese).

In addition, the Korea Education Fund site is also down (http://www.koredufund.org.kp/). I picked up one of their brochures last time I visited the DPRK and posted it here.

..and the Committee for Cultural Relations with Foreign Countries (CCRFC or Taemun) web page is also down: http://www.friend.com.kp/

A quick search of the .kp domain (The DPRK’s country level domain assigned by ICANN) reveals only three other functional web pages:

1. The domain registry lookup site: http://kcce.kp/

2. KPNIC domain registration guidelines (which are well worth reading): http://www.kcce.kp/en_Guideline.php

3. And this document:

조선민주주의인민공화국 망령역이름
변경신청서

1. 변경신청목적
2. 변경신청기관명
3. 변경신청기관주소

변경신청내용
1. 등록된 망령역이름
2. 변경하는 망령역이름
3. 신청자
이름
직장,직위
전화번호
전자우편주소
주소
3. 변경신청기관의 영문표기
4. 변경신청기관의 영문략자표기

According to the Daily NK:

North Korea has earned more than $160 million in the last ten years thanks to the construction of sculptures and other edifices in countries across Africa.

A Daily NK source in China revealed on the 18th, “Since 2000, North Korea has been earning colossal quantities of dollars through contracts for the Mansudae Overseas Project Group of Companies under the Mansudae Art Institute to construct sculptures.”

Mansudae Art Institute is an organization primarily dedicated to the idolization of Kim Il Sung and Kim Jong Il through public works, one whose construction of edifices such as the Juche Tower and Arch of Triumph in Pyongyang has added to the status of the country.

It has also been building revolutionary monuments in African countries such as Ethiopia since the 1970s in order to maintain cordial relations with socialist states, but in the early 2000s started doing work in African countries to earn foreign currency as well.

According to the source, North Korea has earned $66.03 million from Namibia alone thanks to the construction of the Presidential Palace ($49 million); the Cemetery of National Heroes ($5.23 million); a military museum ($1.8 million); and Independence Hall ($10 million).

It has also earned almost $55 million from Angola via the António Agostinho Neto culture center ($40 million); Cabinda Park ($13 million); and the Peace Monument ($1.5 million).

Additionally, the North has constructed a basketball stadium ($14.4 million) and an athlete academic center ($4.8 million) in the Congo, earning almost $20 million dollars in total.

Thanks to the Monument to the African Renaissance in Senegal, the North has made another $12 million dollars.

There are around 19.8㎢ set aside for a vacation spot for the president of Equatorial Guinea, which is supposed to earn Mansudae around $800,000, not to mention a government office building ($1.5 million), Luba Stadium ($6.74 million) and conference halls ($3.5 million).

The source also reported, “The money earned from these construction projects is managed by the No. 39 Department. Some of these dollars are used for domestic governance, while the rest go to secret accounts in Switzerland or Macau to become Kim Jong Il’s secret funds.”

Here are the images from the story including a table of financial data (which I would take with a grain of salt):

Additional Information:

1. I blogged here about the Derg Monument in Ethiopia.

2. I have located some of the Mansudae Overseas projects mentioned in this story (as well as numerous other places not menioned in this story: Egypt and Syria, Zimbabwe, DR Congo). However, here are GeoEye satellite images of some of the Namibia and Angola projects mentioned above courtesy of Google Earth:  

Namibia National Heroes Acre (22°39’46.02″S,  17° 4’41.06″E):

Namibia State House (22°35’28.83″S,  17° 6’2.76″E)

Cultural Center of António Agostinho Neto (Mausoleum) (8°49’24.73″S,  13°13’8.52″E)

According ot the Choson Ilbo:

North Korea in March restored a special department in the Workers Party codenamed Room 38 which manages leader Kim Jong-il’s coffers and personal slush funds, it emerged Monday. The North last fall merged Room 38 with Room 39, which manages party slush funds.

“Rooms 38 and 39 were merged to simplify Kim Jong-il’s slush funds,” said a North Korean source. “But when it became difficult to secure hard currency due to international sanctions, Room 38 seems to have been restored because there was a feeling that Room 39 alone can’t meet the need.”

Room 38 is reportedly led by Kim Tong-il, who heads three regional departments in charge of earning hard currency.

Room 39 tries to maximize earnings from gold and zinc mining and farming and fisheries. It also manages stores and hotels exclusively for foreigners in Pyongyang. Room 39 seems to have suffered badly due to the recent suspension of inter-Korean trade. “Taesong Bank and Zokwang Trading, which received remittances from Mt. Kumgang tourism, are both controlled by Room 39, and is also in charge of the exports of agricultural and fisheries products,” said a government source.

Kim Jong-il needs dollars to maintain the party elite’s loyalty to him and his heir presumptive. He is said to have told party bigwigs in February, “From now on I will judge your loyalty based on the amount you contribute to the fund.” His son Jong-un is also said to be amassing separate slush funds for his own use.

But international sanctions on exports of weapons, counterfeit dollars, fake cigarettes and drugs remain in place, and the United States is pushing ahead with additional financial sanctions over the North’s sinking of the South Korean Navy corvette Cheonan in March. Pyongyang was dealt a heavy blow in 2005 when the U.S. froze US$25 million in the Banco Delta Asia in Macao which was apparently for Kim’s personal use.

Kim earlier this year appointed his high school friend Jon Il-chun head of Room 39. Jon was also named chairman of the National Development Bank, established early this year with a view to conducting normal international financial transactions to induce foreign investment. “North Korea seems to be planning to divert part of foreign investment to Kim’s slush fund,” said a government official.

NK Leadership Watch has more. 

Read the full story here:
Kim Jong-il Restores Special Department to Swell Coffers
Choson Ilbo
6/24/2010

According to Reuters:

There are no private cars in North Korea and countless factory chimneys have not belched smoke in years, but state media said on Tuesday scientists were inventing new ways to cut air pollution and protect the environment.

The country “has directed a great effort” to research environmental protection, the state news agency KCNA reported.

“Researchers have developed a new material for removing exhaust fumes from automobiles so as to cut the greenhouse gas emissions and reduce air pollution 35-40 percent,” it said, without elaborating.

It also said “units” in the capital, Pyongyang, that caused pollution had been registered, suggesting that dirty industries were under pressure to get clean.

“They are now developing a gas and dust arrester necessary in production processes and new materials needed to secure environmental safety of products,” it said.

The isolated communist country’s state-run media periodically boasts revolutionary innovations in science and technology, despite a moribund economy and chronic food shortages.

Perhaps the most visible in recent years have been related to the relatively well-funded — and well-fed — military. North Korea has conducted two nuclear tests since 2006 and several missile launches, upsetting its neighbours.

North Korean scientists also invented a device using “locally available materials” to incinerate hospital waste, KCNA said, and the Environmental Protection Institute of the Ministry of Land and Environmental Conservation had intensified research into pollution-free vegetable production.

Here is the original KCNA story:

Scientific Achievements of Environmental Protection
 
Pyongyang, June 22 (KCNA) — The Democratic People’s Republic of Korea has directed a great effort to scientific researches for environmental protection.

Researchers have developed a new material for removing exhaust fumes from automobiles so as to cut the greenhouse gas emissions and reduce air pollution 35-40 percent.

They have also put the environmental management of industrial establishments on IT basis.

Meanwhile, they have registered units causing environmental pollution in Pyongyang and confirmed methods and procedures for preventing pollution. They are now developing a gas and dust arrester necessary in production processes and new materials needed to secure environmental safety of products.

Besides, they have invented a new device to destroy by fire such wastes from hospitals as contaminated injector and bandage with locally available materials.

Scientists of the Environmental Protection Institute of the Ministry of Land and Environmental Conservation have intensified a research in pollution-free vegetable production.

Read the full Reuters story here:
N.Korea says puts “great effort” into environment
Reuters
6/22/2010