North Korean Economy Watch

According to Park Ju-Min writing in the Los Angeles Times:

The portraits of North Korean leader Kim Jong Il have been taken down from the classrooms in the run-down Tokyo Chosen No. 2 Elementary School.

But a quick look into the teachers lounge reveals the Dear Leader in all his glory.

The school for ethnic Koreans in Japan, one of about 60 in the country that are funded by North Korea, faces a delicate balancing act as money from the reclusive regime has decreased amid economic turmoil there.

Since the 1950s, the schools have been run by the General Assn. of Korean Residents in Japan, or Chosen Soren, whose Tokyo headquarters acts as North Korea’s unofficial embassy.

At Chosen No. 2, the eight teachers and 54 students face a life of political isolation as they try to preserve their ethnic identity in Japan, a country many people believe is in the sights of North Korea’s nuclear missiles.

Former Principal Song Hyon-jin knows the school spreads what many Japanese consider communist propaganda. Activists have surrounded the school with megaphones shouting for students and teachers to leave the country, threats that increased after North Korea tested a nuclear device last year. A student at another Chosen school was accosted on the subway, her traditional hanbok robe, worn by many North Koreans, ripped by her attacker.

“Even though the Korean community has changed much in the past 20 years, it’s still tough to live as a Korean in Japan,” said Song, a longtime Chosen member.

The schools get no funding from the Japanese government, which doesn’t officially recognize them.

….

Because there are no diplomatic ties between Tokyo and Pyongyang, the ethnic Koreans cannot apply for North Korean passports. They must be content to send their children to Chosen schools.

Since the 1970s, enrollment in the schools has fallen to less than 12,000 from 40,000, and fees have risen dramatically. In an effort to improve the schools’ image, administrators removed portraits of Kim Jong Il and his father, Kim Il Sung, from classrooms. They also added South Korean history to the curriculum, along with Japanese language and history.

Another change was softening the emphasis on North Korean propaganda, relying instead on a more straightforward history. To avoid undue attention, middle and high school students were ordered not to wear traditional Korean school uniforms after class.

“Schools have to be more open and acceptable for non-Chosen Soren affiliates for the sake of their existence,” said Han Young-hae, an associate professor at the Graduate School of International Studies at Seoul National University. “They need to reestablish their historical views and educational direction.”

As a result, the atmosphere here has lightened. South Korea also has begun taking up the financial slack, donating computers.

“I hope to teach here forever,” said Lee Young-sim, a 25-year-old art teacher who is a product of Chosen schools.

Song is heading a fundraising drive to build a new wing at the school, in hopes of stemming the defection of ethnic Koreans to Japanese schools.

“It is difficult to protect the school when many Korean kids are going to Japanese schools,” said Song, whose two children attend Chosen schools. “But I will do my best until the good day comes.”

Read the full article here:
North Korea-funded schools in Japan have an image problem
Los Angeles Times
Park Ju-Min
2/23/2010

According to the email from SAIS:

Attached please find the latest bulletin from “38 NORTH,” a web-based initiative sponsored by the U.S.-Korea Institute at SAIS. The goal of “38 NORTH” is to harness the experience of long-time observers of North Korea and others who have dealt directly with Pyongyang in producing quality analysis of events north of the 38th parallel. This analysis, written by Bradley O. Babson, former World Bank official and Chair of USKI’s DPRK Economic Forum,  looks at recent developments inside North Korea from an economist’s perspective.
 
Too often, the media and the expert community jump to premature conclusions about what is going on inside North Korea. In the coming weeks and months, “38 NORTH” plans to publish a series of articles looking at these same developments in an effort to help us all get a better fix on the meaning of these events and their implications for the Korean peninsula, the region and the international community. These articles will be written by experts with different perspectives.
 
We are looking forward to the scheduled launch of the “38 NORTH” website on April 1, 2010. In the meantime, questions and comments regarding this publication should be directed to: thirtyeightnorth@gmail.com.

Here is Babson’s article (PDF)

UPDATE 2: According to the Los Angeles Times:

In the report, obtained Thursday by The Associated Press, the South African government said the two containers are currently stored in a state-secured warehouse in Durban while its investigation continues. It estimated the value of the conventional arms at 6 million rand (about $770,000)

The shipment’s final destination, according to the bill of lading, was the port of Pointe Noire in the Republic of Congo, the small oil-rich country often overshadowed by its larger neighbor, Congo. The Republic of Congo, whose capital is Brazzaville, has reportedly experienced a wave of recent violence.
…
The report to the Security Council committee monitoring sanctions against North Korea is entitled “breach of the Security Council resolutions…”

It traced the shipment from the DGE Corporation via the “Machinery Expand Imp Corp (cq),” both established to be in North Korea, to the Chinese port of Dalian where it was put on board the CGM Musca on Oct. 20.

The bill of lading described the contents of the two containers as “spare parts of bulldozer,” according to the report.

At Port Klang, Malaysia, the shipment was transferred to another vessel, the Westerhever, which was chartered by Delmas Shipping, a subsidiary of the French shipping company, CMA-CGM, the report said. Delmas requested that CMA-CGM Shipping Agencies South Africa (Pty) Ltd. represent the Westerhever on its voyage to South Africa.

The captain was instructed to refuel in Durban on Nov. 28-29, but due to fuel shortages in Durban, the Westerhever was ordered to take on fuel in Walvis Bay, the report said.

While en route to Walvis Bay on Nov. 27, the captain “received an email instruction from Delmas to make a U-turn and discharge the two containers in Durban, the report said.

A U.N. diplomat familiar with the report, speaking on condition of anonymity because he was not authorized to speak publicly, said the email informed the captain that the ship was carrying suspicious cargo which should be turned over for inspection to South African authorities in Durban.

Martin Baxendale, a spokesman for CMA-CGM, said in Paris that the company was in contact with South African authorities but said “we cannot enter into discussions relating to any details in regard to this matter.”

According to the report, “a large quantity of rice grains in sacks lined the containers and was utilized as protective buffers for the conveyance of the conventional arms.”

UPDATE 1: According to the Wall Street Journal:

According a terse, two-page account delivered by the Pretoria government earlier this month to the U.N. committee overseeing the enforcement of U.N. Security Council sanctions imposed on North Korea, South African authorities in November seized two containers filled with tank parts and other military equipment from North Korea. The report said the containers, which were loaded on a ship in the Chinese port of Dalian and bound for the Republic of the Congo, contained gun sights, tracks and other spare parts for T-54 and T-55 tanks and other war material valued at an estimated $750,000.

The military equipment was concealed in containers lined with sacks of rice, said the confidential South African report, which was reviewed by The Wall Street Journal. Shipping documents identified the cargo as spare parts for a “bulldozer,” according to the report, which said the goods were shipped by a North Korean company.

ORIGINAL POST: According to Reuters (via Yahoo):

South Africa has told a U.N. Security Council committee it intercepted a North Korean weapons shipment bound for Central Africa, which diplomats said was a violation of a U.N. ban on arms sales by Pyongyang.

The seizure took place in November, when South African authorities received information that a ship headed for Congo Republic was carrying containers with suspicious cargo, according to a letter sent by South Africa to the Security Council’s North Korea sanctions committee.

Several Western diplomats described the incident as a “clear-cut violation” of Security Council resolution 1874, which bans all North Korean arms exports and most weapons-related imports in response to its nuclear program.

The letter, parts of which were seen by Reuters on Monday, said a North Korean company was the shipping agent and the cargo was first loaded onto a ship in China, then transferred to a vessel owned by French shipping firm CMA CGM in Malaysia.

Diplomats said the French company alerted authorities to the fact it had suspicious cargo on board and was not believed to have done anything wrong. The South Africans intercepted the vessel and seized the containers, which held tank parts.

The letter, which the committee received last week, said the South Africans discovered “that the contents fell within the definition of conventional arms in that the contents consisted of components of a military tank T-54/T-55.”

The letter said the documentation for the containers described the cargo as “spare parts of bulldozer.” T-54 and T-55 tanks were designed and produced in the Soviet Union in the 1940s and 1950s but were later upgraded and made in other countries.

Neither the French company nor the countries involved had any immediate comment.

Congo Republic, which borders Democratic Republic of Congo, has suffered a wave of violence in the Pool region between the capital Brazzaville and the oil port town of Pointe Noire that has broken a period of calm after a decade of instability.

COMMITTEE TO DECIDE
The diplomats said the committee was planning to send letters to countries involved in the case — such as North Korea, Republic of Congo, Malaysia and France — seeking more information so it can decide whether the North Koreans or any other nations were in breach of U.N. sanctions.

Resolution 1874, approved in June 2009, was passed in response to Pyongyang’s second nuclear test in May 2009 and expanded the punitive measures the Security Council had imposed on North Korea after its first atomic test in October 2006.

Last year’s resolution also authorized countries to inspect suspicious North Korean air, land and sea cargo and to seize any banned goods.

“The latest incident shows that the sanctions are working,” one Western diplomat told Reuters. “But it also shows that we have to be vigilant. The DPRK (North Korea) is still trying to violate the sanctions.”

Last week I mentioned that the UN Security Council was investigating four cases of alleged DPRK sanctions violations–but I only knew what three of the cases were:

Case 1: A North Korean shipment of chemical-safety suits that may have been destined for Syria’s military.

Case 2: Italy’s seizure of two luxury yachts allegedly bound for North Korea

Case 3: Thailand’s interdiction of North Korean arms aboard a plane allegedly bound for Iran

And now we know Case 4: Shipping of contraband to Central Africa.

Daily NK
Jung Kwon Ho
2/22/2010

In late January, Kim Jong Il held a meeting of his highest officials, including Jang Sung Taek, Director of the Ministry of Administration of the Party, aiming to find ways to alleviate the negative side effects of November’s currency redenomination. In the meeting, the group apparently agreed to release emergency supplies of rice to those on the brink of starvation.

According to a Daily NK source, “Following the meeting, which he chaired, Kim Jong Il handed down a handwritten decree to the chief secretaries of all provinces on January 20 in which it was stated, ‘Preventing anyone from starving to death is your obligation.’”

Chief Secretaries of Provincial Committees of the Party, the recipients of the decree, handed on the threat to their subordinates, warning provincial cadres, “You will resign if anyone starves to death, because this was a direct instruction from the General.”

In the decree, the three most vulnerable provinces were named as Yangkang, South Hamkyung, and Kangwon Provinces, so the officials governing those provinces are understandably nervous. They are the provinces where most casualties occurred during the March of Tribulation, and they remain the most food insecure.

Under the decree, the Ministry of Procurement and Food Policy makes daily deliveries of 5kg of relief rice to each people’s unit and 5-15kg to each factory and enterprise. Chairpersons of people’s units and managers of factories are required to observe the circumstances of the people under their control and provide those in the greatest danger of starvation with relief rice first.

In late January, quite a number of households were reportedly facing starvation due to the aftermath of the currency redenomination; notably sky high prices coupled to strict market regulations. However, there have been no reports of starvation since relief rice deliveries began on February 1.

Alongside the chairpersons of People’s Units, cadres working for local government offices are required to cross-check whether or not starvation is occurring. In theory, they are reprimanded if they do not report the situation truthfully.

Upon hearing the news, a defector in Seoul commented, “It seems that the people will not lie still and suffer that dire situation. Kim Jong Il may have done this because he senses a crisis situation this time.”

I have added the following CRS reports to my “DPRK CRS Reports” page:

1. North Korea: Terrorism List Removal

2. North Korea’s Nuclear Weapons Development and Diplomacy

3. North Korea’s Nuclear Weapons: Technical Issues

4. North Korea: Economic Leverage and Policy Analysis

Hat tip to a consistently helpful reader. 

This year Joseph Bermudez, a military analyst for Jane’s Intelligence Review and author of The Armed Forces of North Korea, launched a journal dedicated to the discussion of the DPRK military: KPA Journal. 

Volume 1, No. 2 contains articles on the 1st Engineer River Crossing Regiment and the KN-02 SRBM (Short Range Ballistic Missile).  You can download it here.

You can download the inaugural issue here.  Both have been added to my burgeoning “DPRK Military Resources” page.

Thanks to a responsive employee at the UNFPA, I obtained a summary of the DPRK’s census findings.  You can download the summary here.

Thanks to a reader I was able to obtain a copy of the entire census data set.  You can download it here.

Both documents have been added to the “DPRK Economic Statistics Page“. Happy reading.

_________________

UPDATE 1: The Wall Street Journal’s Evan Ramstad published some analysis of the DPRK’s 2008 census data.  According to the article:

North Korea is getting bigger, older and less healthy, according to data from the country’s latest census, and its fabled million-man army might have fewer than 700,000 people.

The authoritarian government in December released results of the census conducted in 2008, saying its population had climbed to 24 million people from 21.2 million in the previous census in 1993.

More details have been published by the United Nations Population Fund, which helped North Korea conduct the census and sent five teams of observers to monitor it.

Even so, it’s difficult for outsiders, with so little access to the country, to be certain of the precision of North Korea’s data. For decades, the government has cut off the dissemination of most information about the country. The new census numbers provide a rare glimpse of official statistics.

The census reported that North Korea’s population grew at an annual average rate of 0.85% for the 15-year period, a time that included a devastating multiyear famine that analysts and foreign aid agencies estimate killed between one million and two million people.

A separate U.N. report published last year found that North Korea’s population has grown more slowly since 2005, at an annual rate of 0.4%. The global population has grown 1.2% annually since 2005, the U.N. report said.

North Korea’s census said the country’s population has proportionately fewer children and more middle-aged people than it did in 1993.

It also reported that people are less healthy.

Babies are more likely to die: The infant mortality rate climbed to 19.3 per 1,000 children in 2008 from 14.1 in 1993, though North Korea’s rate is still well below the world average, which a 2009 report by the U.N. agency put at 46 per 1,000 children.

North Koreans are living shorter lives—average life expectancy has fallen to 69.3 years from 72.7 in 1993.

As in many places, women live longer than men, with a gap of about seven years, compared with the world average of 4.4 years.

North Korea has 5.9 million households, with an average of 3.9 people in each, according to the census.

The typical home is 50 to 75 square meters in size (540 to 800 square feet). About 85% of homes have access to running water and about 55% have a flush toilet.

The census provided only a glimpse of the country’s economic structure, but even that produced some surprises. The occupation that provides the most employment—farming—has more women, 1.9 million, than men, 1.5 million.

The second-biggest occupation, working for the government or the military, employs 699,000 people. The census doesn’t break that group down further, but the figure suggests North Korea’s military isn’t as large as had been thought.

The military is often portrayed by outside military analysts and media as a force of one million people, mostly conscripts who are required to serve 10 years.

The third-largest employment sector by number of workers is education, followed by machinery manufacturing, textiles and coal mining. About 40,000 people work in computer, electronic or optical-product manufacturing.

North Korea hasn’t shared meaningful information about its economy or its financial system with the outside world since the early 1960s.

Outside estimates of its economic performance, most prominently an annual estimate by the South Korean central bank, the Bank of Korea, are filled with assumptions that even their authors say render them almost meaningless.

Word of the availability of the North Korea census data was disseminated last week on North Korea Economy Watch, a Web site run by Curtis Melvin, a Virginia-based graduate student in economics and a specialist in North Korea.

Read the full article here:
Pyongyang Reports an Aging, Less Healthy Population
Wall Street Journal
Evan Ramstad
2/20/2010

UPDATE 2 (1/12/2011): According to the Choson Ilbo:

Each year, Statistics Korea publishes population figures for North Korea in a booklet based on surveys conducted by international organizations like the UN and data released by the Education Center for Unification under the Unification Ministry.

Most of these statistics were compiled based on a census the North took in 2008 with the UN’s help.

North Korea’s only previous census was in 1993, which established that the population is 21.21 million. Although rumor has it that several millions of people starved to death during the famine of the 1990s, nobody knows how many exactly died.

The second census in 2008 was taken with funds provided by the UN Population Fund to obtain basic data for humanitarian aid to the North. The North accepted the offer, presumably because it wanted a good grasp of the reality to develop its own economy.

The census lasted for 15 days, from Oct. 1 to 15, 2008. The North’s Central Statistics Bureau surveyed 5,587,767 households nationwide by mobilizing a total of 35,000 census takers through municipal and provincial statistics offices. The questionnaire consisted of 53 questions about income, furniture, electronic home appliances, toilets, heating system, and tap water and sewage facilities, as well as basic personal information such as age and gender.

Like in South Korea, the North Korean census takers visited homes to ask the questions face to face. Statistics Korea officials flew to China, where they taught North Korean officials census methodology and techniques, and the South gave the North as much as US$4 million for the census from the Inter-Korean Cooperation Fund.

According to the census, the North’s population was 24,062,000, up 2.85 million from 1993. Average life expectancy was 69.3 years, and infant mortality was 19.3 per 1,000. But these data are quite different from UN estimates, which put life expectancy at 67.3 years and infant mortality at 48 per 1,000. The credibility of the North’s census data has not been verified.

According to the Choson Ilbo:

A strong underground earthquake registering a magnitude of 6.9 on the Richter scale occurred about 21 km from the Russian border with North Korea around 10:13 a.m. on Thursday, the Korea Meteorological Administration announced based on data by the U.S. Geological Survey.

The epicenter was 42.7 degrees northern latitude and 130.9 degrees eastern longitude 110 km southwest of Vladivostok near the border of North Korea, China and Russia.

The KMA said the quake was strong but the actual surface wave magnitude was a mere 2 because it happened 562.5 km below from the surface. “It’s the kind of situation where objects hanging from the ceiling swing a little and parked cars shake slightly, so almost no damage seems to have been done to people or buildings in North Korea and elsewhere,” a spokesman said. “The quake was a natural result of the subduction of the Pacific plate under the Eurasian plate. There always exists the possibility of strong quakes occurring on the Korean Peninsula as quakes stronger than magnitude 6 occur in the region every two years.”

Quakes are becoming more frequent. According to Chosun Ilbo’s analysis of the KMA data, 157 quakes occurred in both Koreas in the 1980s, but the frequency soared to 259 in the 1990s to 436 in the 2000s. Sixty quakes were reported last year, the most in the 31 years since the KMA began observation. Eight already occurred this year, similar to last year’s monthly average of five.

South Korea has far outdistanced North Korea both in frequency and magnitude of quakes. A total of 279 quakes have been reported on the peninsula since 1978, with 199 in the South and 80 in the North. Of the five quakes stronger than magnitude 5 since 1978, four occurred in South Korea. The South also led in terms of frequency of quakes with magnitudes between 4 and 5 with 28 of all 33.

A Unification Ministry official said, “We’re checking what effects the latest quake had on North Korea alongside related agencies.” Nothing has been reported yet by North Korean media, he added.

Sources in Najin Sonbong in North Korea and Hunchun in China, which are near the epicenter, said they have not been informed. Kim Sung-min, the director of Radio Free North Korea said their source in Hoeryong in North Hamgyong Province heard nothing about the quake.

Commenting on rumors that it was an artificial earthquake caused by a nuclear test, a South Korean government official said, “It would be realistically impossible for them to have dug 562 km down. Chances that it was caused by a nuclear test are extremely slim.” He said it was also unlikely that the North would conduct a test in a place close to the border plus the quake was too strong to be caused by an explosion.

Further information:

Here is the USGS data on the quake.

Here is the quake’s epicenter.

On October 22, 2008, a 4.8 earthquake struck off the coast of Chongjin.

And the fun–The US Geological Service has earthquake readings for both of the DPRK’s nuclear tests:

*Here is the USGS earthquake report for the DPRK’s October 09, 2006, test – a 4.3. 

*Here is the USGS earthquake report for the DPRK’s May 25, 2009, test – a 4.7.

According to the Daily NK:

Since the redenomination on November 30 last year, the cost of crossing the Tumen River has risen as high as 10,000 Yuan on the back of tighter border regulations.

A source from North Hamkyung Province told the Daily NK on Thursday, “Since border security was strengthened in February, it has cost at least 10,000 Yuan to cross the border into China.” This is equal to around 400,000 North Korean won at the black market exchange rate, or $1400.

In 2006, the cost of crossing the Tumen River around Musan and Onsung in North Hamkyung Province was just 500 Yuan.

The reason is because now there is an alliance of brokers monopolizing the crossing business, and a number of regulations designed to both circumscribe the ability of citizens to cross and limit the relationship between guard companies and local citizens.

In the distant past, if people wanted to cross the river, they approached guards and haggled over the price directly. However, now people have to rely on professional brokers who put them in contact with guards and guides in China. One pays a price to the broker, who shares it with North Korean border guards and Chinese guides respectively at a ratio of 4:3:3.

The North Korean authorities designated the period from February 5th until Kim Jong Il’s birthday on the 16th as a period of “special vigilance,” handing down special instructions to strengthen the border guard and regulations covering migration in border cities.

According to a Daily NK source, this measure is primarily intended to limit the ability of those suffering since the redenomination to smuggle or cross the border to make money in China, as well as to regulate citizens in advance of Kim Jong Il’s birthday, which is customary.

The source emphasized, “Since December last year, the number of citizens using human networks in China to make money has been increasing. Therefore, agents of the National Security Agency and the People’s Safety Agency have been watching those people closely.”

The source further explained, “Now, the authorities are forcing border guards to observe each other in order to track down those doing business with brokers and border crossers. In January, in Yusun-dong, Hoiryeong, one company commander was dismissed after a platoon commander informed on him for assisting border crossers.”

In the mid-2000s, along the border near settlements such as Namyang, Sambong, and Jongsung in North Hamkyung Province, the authorities set up nail boards and extra barbed wire along the Tumen River in order to inhibit defection. However, as these physical measures were not as effective as hoped, in 2006 the authorities took to switching guard posts between different guard companies without notice and awarding a prize, membership of the Party, to guards who caught people crossing the border. These measures were designed to break down connections between individual guards and the local populace

Therefore, the source added, “These days, no border guards are helping people cross the river, and the cost is soaring.”

Read the full story here:
Tight Rules Make Border Costs Soar
Daily NK
Lee Sung Jin
2/19/2010

Open Radio
Hyelim Kim
2/18/2010

Changdeok, North Korea’s primary word processor like Hangul in South Korea, is a true mirror of the idolization of Kim Il-Sung and Kim Jong-Il.
 
When Changdeok was first launched, the version 1.0, had April 15th, 1990 marked as the release date. It is Kim Il-Sung’s birthday.
 
As a word processor, Changdeok was developed to a 7.0 version in 2002 and has as superior quality of its functions, such as Hangul or MS-Word. It provides Korean, English, Chinese, Russian, and Japanese characters and other various functions such as 2 or 3 dimensions character effects and complex arithmetic calculations.
 
It has special characteristics devised especially for Kim Il-Sung and Kim Jong-Il. KPS 9566-2003 legislated in 2003 is the most recent version of North Korean industrial standards. 22 of a total 16,776 KPS 9566-2003 characters are not included in Unicode set, a computer standard for encoding characters expressed in most of the world’s writing systems. 16 of KPS 9566-2003 are special characters. And the rest 6– “Kim”, “IL”, “Sung”, “Kim”, “Jong”, and “IL– are reduplications only uses for Kim Il-Sung and Kim Jong-Il.
 
Therefore, “Kim Il-Sung” and “Kim Jong-Il” are recognized as special characters on Character Map and automatically switched to Bold text. But there is nothing wrong with this system because nobody has the same name as Kim Il-Sung and Kim Jong-Il in North Korea.
 
Another Changdeok system indicating the absolute power of Kim Il-Sung and Kim Jong-il are CTRL modifier keys. <CTRL+I> for “Kim Il-Sung” and <CTRL+J> for “Kim Jong-Il” are only modifier keys allowed in the Changdeok system.

These special characters and modifier keys is one side of Kim Il-Sung’s and Kim Jong-Il’s idolization. But, considering “Kim Il-Sung” and “Kim Jong-Il” in North Korean published works must be in bold text, special characters and modifier keys are for convenient editing processes as well.
 
The last distinct feature of the Changdeok system aew font names designed and systemized by the Korea Computer Center and Pyongyang Program Center for convenient electronic publishing. Chollima, Kwangmyong, and Cheongbong are major ones among those interesting fonts.
 
Chollima font is named after the Chollima campaign which led to North Korea’s economic development in 1950s and 60s. It is often used for posters and advertisements.
 
Kwangmyong is the second famous font. Kwangmyong means Kim Jong-Il, and it was named after ‘Baekdu-Kwangmyong legend,’ a novel written to deify Kim Jong-Il.
 
Cheongbong font is a memorial for celebration of Kim Jong-Il’s victory in the battle with Japanese troops during the colonial period. This font is often used for long body paragraphs of texts as well as titles and subtitles.
 
As the Cheongbong system shows, the status of Kim Il-Sung and Kim Jong-Il are special, even in a word processor program. In other words, a field of software is also used as a means for promotion and instigation of the North Korean dictatorship.