North Korean Economy Watch

According to Bernama of Malaysia:

Chinese maritime authorities launched a search for six seamen from the North Korea on Wednesday, who went missing after their cargo ship sank off China’s coast, Xinhua reported.

Altogether 20 North Korean crew members were aboard the vessel when it sank due to strong winds about 90 nautical miles southeast of Dalian, in northeast China, at noon on Tuesday, said Zheng Jian, of the Ministry of Transport’s Rescue and Salvage Bureau.

The Ministry’s Beihai Rescue Bureau immediately dispatched a helicopter to the area after receiving an SOS signal from the ship, and rescuers picked up one survivor two hours later, Zheng said.

The rescued seaman said 14 colleagues on two life rafts had been swept away by waves, Xinhua quoted as saying.

The Beihai Rescue Bureau also sent two rescue vessels to the area, and rescuers saved another 13 sailors from a raft late Tuesday afternoon, Zheng said.

“We are still searching for another raft and the other six crew members,” he said.

The cargo ship was en route from the North Korea port city of Nampo to Dalian when it sank, he said.

This week Somali Pirates also captured a North Korean crewed vessel.

In 2008 another DPRK ship sank in the Black Sea.

At the end of Q2-2009 Koryolink had signed up nearly 48,000 subscribers.  At the end of Q3-2009, this number has grown to more than 69,000.  According to Telegeography:

North Korea’s only mobile operator, CHEO Technology, which offers services under the Koryolink brand, has signed up 69,261 customers as at 30 September 2009. The company was awarded a 25-year licence to operate 3G services in January 2008, with the first four years on an exclusive basis. It is owned by Orascom Telecom Holding of Egypt (75%) and state-owned Korea Post and Telecoms Corporation (25%). Koryolink launched services in December 2008 in the capital Pyongyang, but the network has since been expanded to include the main road running up to the northern city of Hyangsan, with the company currently working on expanding services nationwide. In the first nine months of 2009, the cellco reported revenue of USD18.5 million, while earnings before interest, tax, depreciation and amortisation (EBITDA) reached USD9.99 million with a margin of 54%. Average revenue per user (ARPU) for the third quarter of 2009 totalled USD21.6, down from USD22.8 in the previous quarter. With a focus on network rollout and network quality improvement, Koryolink invested USD25 million in the first nine months of 2009.

Thoughts and additional information:

1. For the record, Koryolink is not the only mobile phone operator in the DPRK.  It is the only 3G operator. A little research on this site will turn up plenty of information on the DPRK’s first cell phone provider.

2. See past Koryolink and Orascom posts here.

3. It is interesting that the DPRK and Orascom have expanded 3G service from Pyongyang to Myohyangsan.  Though a popular spot for North Korean elites and tourists, it is not a commercial hub by any means…

According to Yonhap:

Trade between South and North Korea grew for the second consecutive month in October amid improving global economic conditions and eased cross-border tensions, customs data showed Tuesday.

According to the data provided by the Korea Customs Service, inter-Korean trade totaled US$172.6 million last month, up 5.9 percent from the same month a year ago.

Shipments to the North totaled $71.9 million in October, while those from the communist country came to a monthly record $100.7 million, the data showed.

This marked the second straight month of expansion since September when trade turned positive after declining for the previous 12 months.

See the September trade increase story here.

See analysis of the previous year here.

Read the full article below:
Inter-Korean trade grows for 2nd straight month in Oct.
Yonhap
11/17/2009

Friday, November 13, 2009 (KCNA):

The head of the north side delegation to the North-South General-Level Military Talks on Friday sent the following notice to the south side, clarifying the truth behind the recent armed provocation in the West Sea and the principled stand of the Korean People’s Army on it in connection with the south side’s sophism making profound confusion of right and wrong over the incident:

It is the politically motivated shameless provocation to resort to a futile military adventure to preserve the illegal “northern limit line” still today when the times have changed.

Warships of the navy of the south Korean forces described the exercise of the right to self-defence by a patrol boat of the north side as “an act of trespassing on the above-said line” and preempted the firing of direct sighting shots and “shots aimed at destroying it”, not “warning shots” though they were well aware that the patrol boat and its crew sailed to confirm an unidentified object. This was an inexcusable deliberate and open military provocation.

The rash action perpetrated by them, firing thousands of bullets and shells with several warships involved at a time was a premeditated action of the rightwing conservative forces and bellicose military group of the south side to stem the trend of the situation on the Korean Peninsula which has shown a sign of detente through the third skirmish in the West Sea.

Upon the authorization, I notify the south side of the following principled stand of the KPA on the gravity of the incident:

1. The south side should make an apology to the nation for orchestrating the recent incident and putting it into practice and take a proper measure to promptly punish the prime movers of the incident as maniacs of confrontation with fellow countrymen and harassers of peace.

2. The south side should behave with discretion as required by the times and the desire of the nation, clearly mindful that its stand to preserve the “northern limit line” no longer works.

3. Reminding again that there exists in the West Sea of Korea only the extension of the Military Demarcation Line in the waters set by the KPA side, it will take merciless military measures to defend the extension from this moment.

4. The south side will be held fully accountable for having disturbed the reconciliation and unity of the nation and hamstrung the efforts to achieve peace and reunification and have to pay a dear price for them.

Just one day later–from the Associated Press:

A North Korean cargo ship entered South Korean waters Saturday — a sign that trade has been unaffected by a recent deadly naval clash off their western coasts, an official said.

The ship dropped anchor west of Seoul just one a day after North Korea’s military threatened to “take merciless military measures to defend” itself and warned that South Korea would be forced to pay a heavy price for the recent firefight over their disputed maritime border.

A Unification Ministry spokesman says, however, that neither side has taken any measures to restrict inter-Korean trade — one of few legitimate sources of foreign currency for the impoverished communist North.

The naval skirmish was the first in seven years and came ahead of a trip to Seoul by President Barack Obama, who arrives Wednesday. A senior South Korean military officer said one North Korean officer died in the fight and three others were wounded. South Korea suffered no casualties.

South Korea responded by putting its 680,000-member military on guard, though officials said they have seen no evidence of unusual North Korean moves.

The cargo ship, delivering silica to a South Korean company, passed through the disputed border Saturday and is scheduled to enter Incheon port on Monday, said a Port Authority official. He asked not to be identified because he was not authorized to speak to media.

The decision to permit the North Korean ship entry was made before the clash, Unification Ministry spokesman Chun Hae-sung said. North Korean ships have docked 35 times at the port the in the first nine months of the year, according to the Port Authority.

South Korea is the No. 2 trading partner of North Korea, with trade volume reaching $1.1 billion in the first nine months of this year, according to the Ministry, which handles inter-Korean affairs.

“Silica” is silicon dioxide, and it is more commonly known as sand.  Read past posts about the DPRK – RoK trade in sand here.

UPDATE: According to the Washington Examiner:

The ship unloaded 1,750 tons of silica at Incheon Port, west of Seoul, and sailed back to the North later Monday, according to port official Lee Jin-wu. The ship departed from a North Korean port last Thursday, two days after the neighboring countries clashed along their disputed western sea border.

1. Dutch import DPRK clothing and machinery (via Yonhap):

Dutch companies gave purchase orders to clothing and machinery firms in North Korea following their visit there organized by the Chamber of Commerce of the Netherlands in September, said the Japan-based Choson Sinbo in a dispatch from Pyongyang.

“Exchange and cooperation projects that were agreed to in meetings between the Dutch business delegation and the DPRK Commercial Office are entering the stage of implementation,” the report said. DPRK is short for the North’s official name, the Democratic People’s Republic of Korea.

“Production by the (North) Korean clothing and machinery trade firms is underway according to the agreements,” it added.

Dutch businesses along with firms from 14 other countries participated in the Pyongyang Autumn International Fair held Sept. 21 to 24. North Korea holds a trade fair twice a year to draw foreign investment and boost technology exchanges.

The Choson Sinbo said the Dutch firms then showed interest in the information technology area, machinery parts and clothing goods and held talks with pertinent North Korean companies, such as the Joson Computer Center and Unha Clothing Company.

After returning home, the Dutch produced a report on North Korea’s international economic relations for distribution at home and in other Western European countries, the newspaper said.

2. Seoul sets DPRK official assistance budget.  According to Yonhap:

According to its 2010 budget plan submitted to the National Assembly unification, foreign affairs and trade committee, the Unification Ministry allocated 1.18 trillion won (US$1.02 billion), about the same as the earmarked budget for this year, for inter-Korean relations and exchanges.

“The ministry has reflected the government’s policy to continue to proceed with humanitarian projects despite the strained phase in inter-Korean relations,” the ministry proposal said.

Broken down to specifics, 616 billion won has been set aside for the possible resumption of rice and fertilizer aid that was suspended after President Lee Myung-bak took office last year. The sum is slightly less than the 718 billion won for this year but remains mostly untouched. The ministry cited the fall of grain prices as the reason for adjustment.

The amount will be worth 400,000 tons of rice and 300,000 tons of fertilizer that had been annually provided to the North over the past decade. But Seoul officials have said they there is no immediate plan yet to resume the rice and fertilizer aid.

The ministry also set aside 18 billion won and 25 billion won to assist North Korea through non-governmental organizations or international agencies like the World Food Program.

For economic projects, including a joint industrial park in the North’s border town of Kaesong, the proposed budget earmarks 144.8 billion won, up 17 percent from the previous year.

“Massive economic cooperation projects were considered in preparation for the possibility of progress in the North Korean nuclear issue,” the ministry said.

It should be pointed out that Seoul has hardly touched its current inter-Korean assistance budget (here and here).  These sorts of policy moves are intended to offer Pyongyang a highly visible carrot.

3. Pyongyang’s 2009 Kaesong antics have unfortunately scared away more foreign direct investment from the Kaesong Zone, despite significant South Korean subsidies.  According to Yonhap:

Romanson Co., a South Korean watchmaker, said Thursday it has no intention to further invest in an inter-Korean industrial complex because of the political risks.

Romanson operates a plant in the industrial park in the North Korean border town of Kaesong, which turns out 40,000 watches per month. In 2005, the company invested 6.1 billion won (US$5.3 million) to build the factory.

4. And the first shipment of NOKO Jeans have arrived in Europe!  Learn more at their Facebook Page.  Here is a photo of the shipment on Flickr.

North Korean defector poetry: I am personally not a big fan of poetry, but some poetry written by North Korean defectors has been translated into English and published.  Read it in Radio Free Asia.

North Korean Leadership Compounds: We have pretty much located all of the “easy to find” leadership complexes in North Korea on Google Earth.  However, not all of them are visible with high resolution imagery.  Here are a few I have recently taken care of:

1. Sinchon Compound (written about by Keji Fujimoto)

Click image for larger version

Download Google Earth overlay here.

2. Island getaway: For the leader who has everything

Click image for larger version

Download Google Earth overlay here.

3. Sugnam

Click image for larger version

Download Google Earth Overlay here

Eight Scenic Views of the Songun Era:

1. Sunrise over Mt. Paektu. (See here)

2. Snow Covered Tapak Sol guard post in Mangyongdae.  (See here – Actually not sure where the guard post is, but this is Mangyongdae)

3. Royal Azaleas on the Chol Pass. (See here)

4. Illuinated night view of the Jangja River in Kanggye. (See here)

5. Ulim Waterfall. (See here)

6. Rezoned Handre (Handure) Plain on the Unhung Cooperative Farm in Thaechon County. (See here)

7.  Potato flowers in Taehongdan. (See here)

8. Poman-ri fish farm. (See here)

A Song was even written about these places.

The first report is by Vitit Muntarbhorn, a Bangkok law professor who works pro bono as the U.N.’s special rapporteur on human rights in the DPRK.  Download the Muntarbhorn Report here (PDF).

The second report is from the office of secretary General Ban-ki Moon. Download the Moon report here (PDF).

__________

The Muntarbhorn report is titled “Situation of human rights in the Democratic People’s Republic of Korea”.  Here is the summary:

This report covers the period from the latter part of 2008 to mid-2009. The analysis points to an array of rights and freedoms which are violated egregiously by the authorities on a daily basis, much to the pain and suffering of the ordinary population. The violations are evidently widespread, systematic and abhorrent in their impact and implications. The freedoms from want, from fear, from discrimination, from persecution and from exploitation are regrettably transgressed with impunity by those authorities, in an astonishing setting of abuse after abuse, multiplied incessantly. They compromise and threaten not only human rights, but also international peace and security. To counter these violations, the Special Rapporteur’s urgent call for action demands comprehensive responses at all levels, national and international.

The authorities in the Democratic People’s Republic of Korea are advised to take measures to respond effectively with regard to the right to freedom from want by ensuring effective provision of and access to food and other basic necessities for those in need and to cooperate constructively with United Nations agencies and other humanitarian actors on the issue; to enable people to undertake economic activities to satisfy their basic needs and supplement their livelihood without State interference; to respect the right to freedom from persecution by ending the punishment of those who seek asylum abroad and who are sent back to the country, and by instructing officials clearly to avoid the detention and inhumane treatment of such persons; to address the fear factor in the country by terminating public executions and abuses against security of the person by means of law reform, clearer instructions to law enforcers to respect human rights, and related capacity-building and monitoring of their work to ensure accountability; to cooperate effectively to resolve the issue of foreigners abducted to the country; to respond constructively to the recommendations of the Special Rapporteur; and to institute a democratic process, shifting the military budget to the social sector.

The international community is invited to underline concretely the need for an integrated approach to overcome the exploitation of the people by the State authorities by advocating for a “people first” rather than the current “military first” policy, coupled with an equitable development process; and to enable the totality of the United Nations system to activate measures to overcome key violations and help guarantee fundamental freedoms in the Democratic People’s Republic of Korea.

The report by Mr. Moon’s office is ALSO titled, “Situation of human rights in the Democratic People’s Republic of Korea”.  Here is the summary:

The present report is submitted pursuant to paragraph 6 of General Assembly resolution 63/190.

The Government of the Democratic People’s Republic of Korea has not recognized the resolutions adopted by the Human Rights Council and the General Assembly on the situation of human rights in the Democratic People’s Republic of Korea. It continues not to accept technical assistance from the Office of the United Nations High Commissioner for Human Rights (OHCHR) and has not granted access to the Special Rapporteur on the situation of human rights in the Democratic People’s Republic of Korea, appointed by the Human Rights Council. This situation has not allowed the Secretary-General to obtain the information necessary to report in full to the General Assembly regarding the subject in question.

The Secretary-General notes with serious concern continuing reports that the situation of human rights in the Democratic People’s Republic of Korea remains grave and that the Government of the Democratic People’s Republic of Korea has not taken significant steps to address persistent reports of systematic and widespread human rights violations and to provide safeguards for human rights. He highlights the fact that the Democratic People’s Republic of Korea continues to face complex humanitarian problems which hamper the fulfilment of human rights. The Secretary- General is deeply concerned at the continued decline of food assistance made available by the international community, despite the worsening shortage of food reported by humanitarian agencies.

The status of the engagement and cooperation of the Democratic People’s Republic of Korea with international human rights mechanisms such as the treaty bodies, the special procedures and the universal periodic review of the Human Rights Council is outlined in the report. The report also contains updates submitted by other United Nations agencies concerning the right to food, the right to health, the rights of the child and the rights of refugees.

The Secretary-General urges the Government to provide safeguards for human rights and ensure domestic legal reform, in accordance with its international treaty obligations. He calls again upon the Government to engage with OHCHR in technical cooperation and to cooperate with the Special Rapporteur on the situation on human rights in the Democratic People’s Republic of Korea. He further calls upon the Government to prioritize its resources in order to address the humanitarian needs of its population and to consider allowing United Nations agencies and their humanitarian partners on the ground to increase their operations, with appropriate monitoring conditions. The Secretary-General urges the international community to uphold its commitment to protecting human rights and helping address the critical humanitarian needs of the citizens of the Democratic People’s Republic of Korea. He strongly encourages all parties concerned to commit themselves in bilateral and multilateral settings to facilitating increased dialogue and cooperation on human rights.

According to Yonhap:

North Korean leader Kim Jong-il has visited a fertilizer factory and a synthetic fabric factory in a northern province and ordered speedy modernization of their facilities, state media said Friday.

Kim’s trip to the Hungnam Fertilizer Complex highlighted his special care for the country’s fertilizer production, as South Korea’s aid of the material, essential for rice and corn farming, remains suspended for the second year. Kim visited the same factory in February.

“The gasification process of the complex is of weighty importance in boosting the fertilizer production,” Kim was quoted by the Korean Central News Agency as saying.

North Korea has developed its own fertilizer production process called “coal gasification.” The process converts coal from a solid to a gaseous state that is similar to natural gas, and can be converted to ammonia that is used to make fertilizer. North Korea has rich deposits of coal and would otherwise have to import natural gas for fertilizer production.

He praised the complex for “entirely depending on locally available raw resources” and emphasized completion of the gasification process “in a brief span of time,” the report said

“He showed such great care as unraveling knotty problems on the spot,” it added.

North Korea’s own fertilizer output is estimated at less than 500,000 tons a year, about a third of the 1.5 million tons the country needs for its grain farming, according to Seoul’s Unification Ministry.

Since 1999, the South Korean government has provided an average 300,000 tons of fertilizer to the North every year to help ease the country’s chronic food shortages. But the aid was suspended after conservative President Lee Myung-bak took office last year, linking inter-Korean aid and exchanges to progress in North Korea’s denuclearization.

Read the full article here:
N. Korean leader visits fertilizer, textile factories
Yonhap
11/6/2009

Institute for Far Eastern Studies (IFES)
NK Brief No. 09-11-10-1
11/10/2009

North Korea is pouring all efforts into the construction of 10,000 family homes in Pyongyang by 2012. Whether this construction plan can be completed within the next three years will weigh on the success or failure of the regime’s goal of establishing a ‘Strong and Prosperous Nation.’

An article run on November 4 in the Chosun Sinbo, a newspaper of the Jochongryeon, the pro-Pyongyang Korean residents’ association in Japan, stated, “Currently, the construction of 10,000 family dwellings is underway in Pyongyang, and the efforts poured into this over the next 3 years will show the strength of the country.” It was also reported that “North Korean authorities are devising policies to concentrate all efforts into the construction area in order to see this through.”

The article also confirmed that the apartment construction project was part of the “effort to open the door to a ‘Strong and Prosperous Nation’,” and that completion of the project “would mean the complete solution of the people’s housing problems in Pyongyang.”

The newspaper claimed that the project is the largest project ever undertaken by the North. In the 1980s and 1990s, 5,000-unit apartments were built along Kwangbok Street and Unification Street over 4 to 5 years, but the current project is twice as large. The aim is to complete the project in 3 years. Each unit is said to be 100 square meters.

North Korean authorities are reportedly pledging that the ‘Strong and Prosperous Nation’ will not just be reflected through economic statistics or increased production, but that they are putting all efforts into increasing the standard of living for the people.

In order to meet the expected increase in demand for electricity, a hydroelectric power plant is being built in Huicheon, Chagang Province, and is expected to be complete by 2012.

It is expected that it will be difficult for the North to complete 10,000 apartments in the next 3 years, and so authorities are also conducting campaigns to repair and upgrade old production lines in factories and companies in order to meet the demand for materials. As well, Preparations are also underway to create a system of factories and businesses to produce needed materials within Pyongyang. The construction project has meant the removal of some military barracks in the area, causing some conflicts between soldiers and civilians.

Institute for Far Eastern Studies (IFES)
NK Brief No. 09-11-04-2
11/4/2009

The North Korean monthly publication “Chollima” stressed in a recent (September, 2009) edition the need to improve efficiency in production and administrative activities, emphasizing that if the North is to succeed at becoming an “economic power,” then economic management and administrative activities need to become “informationalized.”

In an article titled “Informationalization of Economic Management and Administrative Activity,” the magazine stated, “In order to meet the demands for science and technology development in the era of the information industry, improvement of the socialist economic management has emerged as an important issue.”

The magazine also offered a solution, suggesting that computers and IT resources be ensured first in order to “informationalize” economic management and administrative activities, and that communications equipment be modernized, stating that construction of basic facilities was an urgent task.

In addition, program industries used in the economic sector should be developed, and planning, statistical, and accounting programs, in particular, need to be connected across the country.

Along with this, the magazine noted that the development of information science is closely related to that of information technology, and that research efforts regarding information science need to be strengthened. The article called for further development of basic elementary management systems education, information theory research, and, of course, systems engineering, legal administration, and other economic science fields.

“Informationalization” of economic management and administrative activities is based on IT resources, and focuses on automating statistical and accounting practices in order to strengthen economic management controls and to boost productivity and efficiency.

On August 11, the Rodong Sinmun also emphasized “informationalization,” referring to the current times as the “information economy age” and the “informationalization age,” stating that “today’s war, absent the sound of gunfire, is a war of brains, a technology war,” and, “technological revolution is bravely marching forward at breakneck speed.”