North Korean Economy Watch

Read more at Oikono.

Institute for Far Eastern Studies (IFES)
(NK Brief No. 09-18-1)
9/18/2009

(Here is the location of the Pyongsong Market)

The Network for North Korean Democracy and Human Rights (Nknet) reported that previous wholesale market near in Pyongsong Plaza and the provincial committee building has completely closed its doors in mid-Jun. Currently, there are two markets being operated in a reduced form in two separate districts.

The newly formed jangmadang in two districts are extension of previous alley markets and it is reported to be under construction but still operating. The size of the new market is said to encompass between seven to eight thousand seats compared to thirty to forty thousand seats of the former Pyongsong Wholesale Market.

The reported reason behind the closure of the wholesale market was, “triggered by the North Hwanghae Provincial Secretary’s proposal to close down Pyongsong jangmadang. He stated that ‘there is no use for such market although it is the most profitable market in North Korea. Since the profits are embezzled by individuals and not utilized towards the beautification of the city, it serves no benefit to society.’”

A large number of merchants from the previous Pyongsong Wholesale Market are reported to be secretly selling their goods from the market at home. Complaints are arising over the surveillance and inspection from the police in which once detected, all the items are confiscated with no compensation.

There are continuous rumors circulating surrounding the conversion into agricultural market except for two markets in Haesan. However, there are no concrete changes and only talks of starting a possible transition to agricultural market from next year. Also food distribution is rumored to start from next year along with the conversion into agricultural market.

Although some believe the food distribution is a result from the consideration from Kim Jong Il, such rumors are regarded to have no real effect on the residents of jangmadang. It is also reported many people have no faith that conversion into agricultural market will actually go into effect and believe it is only reemphasizing the previous dead letter measure of allowing only those older than 45 years old to participate in the market activity.

NKIDP Working paper #1
Charles K. Armstrong

(Download the PDF here)

In his latest publication, Armstrong details the DPRK’s short-lived and ultimately unsuccessful efforts to establish a global presence in the 1970s. These efforts included attempts at economic engagement with advanced capitalist countries and a diplomatic offensive in the Third World.

According to Armstrong, the ultimate failure of North Korea’s pursuit of what later came to be termed “globalization,” can be attributed to the contradiction between the stated policy of juche, or self-reliance, and the “necessary requirements for engagement in the international system, particularly the global economy.”

Tour Company Remote Lands has launched a luxury travel package to North Korea that is private jet optional.  According to Reuters:

“We love learning first-hand about the cultures of the world`s most remote places,” said Catherine Heald, Co-Founder & CEO of Remote Lands. “We do not engage in politics of any kind; we simply believe that tourism can promote peace and understanding between peoples at a grassroots level. North Korea is one of the most mind-blowing places I have ever been, and visiting the country is an incredibly stimulating and enlightening experience that I can`t recommend highly enough to our most intrepid clients.”

Remote Lands (www.remotelands.com) will design customized itineraries that originate at a five-star hotel in Beijing, and clients can fly either privately or commercially into the capital city of Pyongyang. They can travel all over North Korea from the gorgeous mountains in the north, where they can hike to remote Buddhist temples, to the lovely beaches of the east to the DMZ on the southern border with South Korea. They will visit awe-inspiring architecture and monuments, and attend the dazzling Mass Games extravaganza with 100,000 synchronized performers/dancers/gymnasts, held every August and September. They can also go off the beaten track and visit schools, hospitals, orphanages, farms and factories and spend time with some of DPRK`s many warm and friendly people.

Accommodations are arranged in the best hotels available, with suites specially enhanced by Remote Lands with European linens, feather pillows and duvets and other exceptional amenities. Fine food and wine will be brought in, and the best chefs will be on hand to create the most delicious Korean, Japanese, Chinese and Continental cuisine. North Korea is not for everyone, but for those adventurous few who have been almost everywhere else in the world, it is the last frontier and a real eye-opener to witness in person.

Prices for a Remote Lands luxury bespoke holiday in North Korea/China start at $1,000 per person per day.

According to their web page:

Catherine Heald just returned from a reconnaissance to North Korea that she describes as mind-blowing. She found it quite different from what she expected – much more beautiful and many of the people were very warm and friendly (although others were clearly just baffled that a blond American woman was there in their midst, for example going for a morning run with them along the lovely riverside in Pyongyang). She drove all around the country and saw villages, farms, schools, hospitals and even an orphanage. She saw the Mass Games, a dance/gymnastics extravaganza, which was a truly dazzling performance. She visited the DMZ border with South Korea, the War Museum and the USS Pueblo ship and learned a lot about the Korean War. The Democratic People’s Republic of Korea (DPRK) is the ultimate remote land, and Catherine found it to be one of the most fascinating places she has ever been.

Also Koryo Tours has sent out a newsletter with the following:

Insider information from Pyongyang tells us that the mass games – originally scheduled to finish on Sep 30th – will now be running to October 17th. This is the only time of year that Americans are able to visit the DPRK and the mass games is an event that no-one should miss! We are therefore offering our popular mini-break a third time round (3 days, 850 Euros). This is an amazing opportunity to experience the Arirang Mass Games as well as the highlights of the capital city of Pyongyang. We guarantee this will be an experience you will never forget. Koryo Tours has been running trips to North Korea for over 16 years now and is the only expert in the field.

From the Korea Times:

What is (or are) North Korea’s literary theory (or theories) which guide North Korean literary works?

The North Korean government continued to indoctrinate its people with socialism until the early 1960s. It justified its initiation of the Korean War, 1950-1953, as a national liberation struggle, mobilizing all resources toward building a socialist country. Under the direction of the Communist party, literature and art were used to propagate revolutionary socialism. From the mid-1960s, writers and artists were expected to advocate the Juche thought of Kim Il-sung. History was rewritten from the perspective of Kim’s Juche thought.

In the 1980s, North Korean literary critics started to discuss the “seed” theory, which originated from Kim Jong-il, the son of Kim Il-sung. In one of his speeches, Kim made the statement; “All great writers should have good seed in their literary works.” It is a commonsensical word, but it has stirred up North Korean poets and writers. They spent the first five years of the 1980s extensively discussing the meaning of the seed theory.

One critic said, “Seed theory is searching for a balance between ideology and aesthetic sense or artistic craftsmanship.” Another said, “it is the philosophic depth of literary works.” In order to settle the dispute, the North Korean Writers’ Association attempted to find the seeds in their so-called classic literary works “Blood Sea,” “Fate of a Militia Man,” “Flower-selling Maid,” “Traditional Worshipping Place,” and “Ahn Jung-geun shot Ito Hirobumi.” The seeds, in their classic works are class struggle, national liberation, permanent revolution, Kim Il-sung’s fight against the Japanese army and the U.S. army, and his victories.

In the mid-1980s, North Korean critics started to say that “literature is a study of man,” which originally appeared in Kim Jong-il’s book, “On Cinema,” reported in the February 1992 issue of Chosun Munhak. Kim said, “literature is a study of man. Literature should not come from an empty sky; it should come from real human life experiences.” He emphasized that Kim Il-sung was the man who fought the Japanese Manchurian Army and defeated it, who fought the mighty U.S. army and defeated it, and who reconstructed the North Korean economy from the ashes of the Korean War. His speeches were made on the occasion of publishing a series of novels on the life of Kim Il-sung, his father, under the name of “Never-perishing Literature” series. “Literature as a study of man” includes stories about a lovely young woman who married a disabled veteran from the Korean War; the humble man who enjoyed equality under Kim Il-sung’s leadership; a teacher who could not leave her countryside school for her fiance in a city; a worker who produced more than his assignments; a scientist who invented a new sophisticated technology in a steel mill; a prisoner of war; and an employee who produced his works ahead of schedule among many others. All these people are small Kim Il-sungs.

In 1991, the North Korean Writers’ Association advocated “Our Way of Making Creative works” modeled after the party line, “Let’s Maintain our Own Socialism.” They recognized the fact that the Cold War was gone, that the USSR was dismantled, and East European communist nations were converting to free market economies. Our own style of socialism never knows defeatism, it only knows victories.

In the first four years of the 1990s, North Korean literature pursued seemingly conflicting goals: xenophobic nationalism, worshipping Kim Il-sung, Kim Jong-il and Kim Jung-sook, the elder Kim’s first wife and the younger Kim’s mother; and anti-U.S. imperialism, scientific and technological advancements, economic development, food production by making land reclamation projects to expand farm land and crop diversification. North Korean literature reflected what North Korea lacked: internationalism, advanced science and technology, food, new leadership, and stability.

Read the full article here:
North Korea’s Literary Theory
Korea Times
Choi Yearn-hong
4/23/2008

UPDATE 9/16/2009: Despite the downward trajectory that business in the Kaesong Zone seemed to be taking this year, things appear to have bottomed out.  According to Yonhap, the Koreas have signed a Kaesong wage increase.  According to the article:

South and North Korea agreed to a 5 percent wage hike at a joint industrial park on Wednesday, the Unification Ministry here said, in the latest sign of inter-Korean projects returning to normal.

North Korea earlier demanded a 400 percent raise in monthly wages for its workers at the South Korean-run park in Kaesong, just north of the border.

South Korea’s management office in Kaesong “signed an agreement on a 5 percent wage increase” with its North Korean counterpart, ministry spokesman Chun Hae-sung said in a brief statement.

The North voluntarily withdrew its earlier demand last week in a striking shift from its unyielding attitude in four rounds of negotiations from April to July. The demand called for monthly wages be raised to US$300 from the average $70-80, apparently in retaliation against Seoul’s hard-line policy toward Pyongyang.

The Kaesong park opened in late 2004 as an outcome of the first inter-Korean summit four years earlier. It houses 114 mostly small-sized South Korean firms producing clothing, electronic equipment, kitchenware and other labor-intensive goods with about 40,000 North Korean workers.

The venture is seen as a much-needed source of dollar income for the North, which is currently under U.N. sanctions for its May nuclear test that bans cash flows to the country.

The 5 percent rate hike will increase the minimum wage to about $58 from the current $55.

Separately, North Korea was conducting a door-to-door survey on South Korean businesses at the joint park, said ministry spokeswoman Lee Jong-joo.

North Korea asserted that the two-day survey that continues until Thursday was to examine the firms’ output and “listen to their complaints and difficulties regarding tax and accounting,” Lee said. Such on-site surveys have been done sporadically, she added.

Although tensions might have eased, it remains to be seen whether the business community can be coaxed into making serious capital investments in the DPRK.

Read previous Kaesong Industrial Zone news below:

Read the rest of this entry »

UPDATE 4:  More on the Leadership of PUST from Houston Business Journal:

A Rice University professor has paved the way for a private university in North Korea.

Malcolm Gillis, the Ervin Kenneth Zingler professor of economics and professor of management, is part of a four-person committee that founded the Pyongyang University of Science and Technology, which will open next spring.

Members of the committee include founding President James Chin-Kyung Kim; Chan-Mo Park, former president of Pohang University of Science and Technology in South Korea; and Jung Bae Kim, former president of Korea University.

Gillis, who was president of Rice from 1993 to 2004, said the project goes back to 1997 when he met with the late Kim Dae Jung, then president-elect of South Korea, to engage in peace talks between North and South Korea.

PUST will offer programs for information technology, industry and management, and agriculture studies, with plans to open new schools for architecture, engineering and public health in the near future.

Reference:
Rice University professor co-founds North Korean university
Houston Business Journal
10/9/2009
UPDATE 3: According to Yonhap:

“North Korea is stumping for opening this university,” Kim Jin-kyung, co-president of the Pyongyang University of Science and Technology, said, returning from a three-day trip to the North Korean capital.

“There are many difficulties, but we are aiming to open the school within this year,” Kim said. He is also president of the Yanbian University of Science and Technology, run with South Korean non-governmental funding, in the Korean autonomous prefecture of Yanbian, northeastern China.

The school seeks to first accept 150 students in the fields of information and communications engineering; agricultural biotechnology and food engineering; and industrial management, he said.

All lectures will be in English, and students will be required to meet the paper-based TOEFL score of 550, Kim said. North Korea has already recruited prospective students among “carefully chosen elites” who studied at top North Korean schools like Kim Il Sung University and Kim Chaek University of Technology, he added.

“North Korea asked us to get the school to have competent faculty members,” he said. “We expect the South Korean government to lend support in the larger context of inter-Korean reconciliation.”

Park Chan-mo, a science and technology advisor to President Lee Myung-bak who attended the completion ceremony with Kim, said Seoul is supportive.

“The fact that (the government) gave permission to the North Korea trip shows it has a will to lend support,” Park said.

The school will be reportedly co-headed by North Korea’s vice education minister, Jon Kuk-man. North Korean media reported the South Korean delegation’s departure earlier Thursday.

UPDATE 2: According to KCNA:

First-Phase Construction of University of Science and Technology Completed

Pyongyang, September 16 (KCNA) — A ceremony for the completion of the first-phase construction of Pyongyang University of Science and Technology was held Wednesday.

Present there were Jon Kuk Man, vice-minister of Education, officials concerned and members of a delegation led by Chin Kyung Kim, founding-president of the university.

Speeches were made there.

After a certificate on nominating the co-managerial president of the university was conveyed to the founding-president, the participants looked round the building of the university completed as the first-phase construction.

UPDATE 1:  CNN published an extensive article on PUST this afternoon.  Read the whole story here (Thanks to AFC).  According to the story:

James Kim, an American businessman turned educator, once sat in the very last place that anyone in the world would wish to be: a cold, dank prison cell in Pyongyang, the godforsaken capital of North Korea.

Kim, who had emigrated from South Korea to the United States in the 1970s, had been a frequent visitor to Pyongyang over the years in pursuit of what, to many, seemed at best a quixotic cause. He wanted to start an international university in Pyongyang, with courses in English, an international faculty, computers, and Internet connections for all the students.

Not only that — in the heart of the world’s most rigidly Communist country, Kim wanted his school to include that training ground for future capitalists: an MBA program.

During one of his trips to the capital in 1998, with North Korea in the midst of a famine that would eventually kill thousands, the state’s secret police arrested Kim.

North Korean dictator Kim Jong Il didn’t lock up the educator for being crazy. He got it in his head that the oddly persistent American — who at the time, among other things, was helping to feed starving North Koreans with deliveries of food aid from China — was a spy.

So for more than 40 days, Kim languished in a North Korean prison. An evangelical Christian, Kim wrote his last will and testament during those days, not knowing if he’d ever get out.

Which makes where he plans to be in mid-September all the more astonishing. Kim will lead a delegation of 200 dignitaries from around the world to North Korea for the dedication of the first privately funded university ever allowed in the Democratic People’s Republic of Korea: the Pyongyang University of Science and Technology (PUST).

The school will have an international faculty educating, eventually, around 600 graduate students. Kim dreams ultimately of hosting an industrial park around the PUST campus, drawing firms from around the world — a North Korean version, as bizarre as it sounds, of Palo Alto or Boston’s Route 128.

There will be Internet access for all, connecting the students to an outside world that they’ve heretofore been instructed is a hostile and dangerous place. And among the six departments will be a school of industrial management.

“We ended up not calling it an ‘MBA program,'” jokes David Kim (no relation to James), a former Bechtel and Pacific Gas & Electric executive who has relocated to Pyongyang to help set up PUST, “because they [the North Koreans] think it sounds vaguely imperialistic.”

That the North Koreans are permitting this to happen — that they have given James Kim the nod to create his university, just as he intended — is remarkable.

It’s hard for outsiders to understand just how backward, isolated, and impoverished North Korea is. Since the collapse of the Eastern bloc 20 years ago, fewer and fewer North Korean university students study abroad. Allowing PUST to proceed lets a gust of fresh air into a stilted, frightfully isolated environment.

The rest of the story is worth reading here.

ORIGINAL POST: Although the Pyongyang University of Science and Technology (PUST) has yet to set an opening date, a South Korean delegation will be visiting the DPRK to commemorate the completion of the facility.  According to Yonhap:

South Korea permitted a delegation from a private foundation to visit North Korea this week to celebrate the completion of a science and technology university jointly built with the North, Seoul’s Unification Ministry said Monday.

The ceremony for the Pyongyang University of Science and Technology is scheduled for Wednesday, according to ministry spokesperson Chun Hae-sung. He said the 20-member delegation will make a three-day trip to the North beginning Tuesday.

The delegation includes Kwak Seon-hee, head of the Seoul-based Northeast Asia Foundation for Education and Culture. The foundation was mostly responsible for organizing donations and fundings for the university, the first to be jointly-operated with an organization not based in the North.

The move marks the first time that the Seoul government has approved a non-humanitarian visit to the North since the communist state carried out its second nuclear test in May.

The date of the school’s opening and other administrative affairs, however, have yet to be decided and must be worked out between the North Korean authorities and the foundation.

Kim Jin-kyung, head of the Yanbian University of Science and Technology in China, will serve as president of the university until its official opening, according to ministry officials.

Further information:

1. Here are previous PUST posts.

2. Here is the location of PUST.

3. Here is the PUST Wikipedia page.

4.  There are two PUST web pages.  Here is the first.  Here is the second. (Thanks to AFC)

Read the full story here:
Seoul approves N.K. trip to mark completion of tech university
Yonhap
9/14/2009

According to Yonhap:

The Pyongyang Autumn International Trade Fair, set for Sept. 21-24 at the Three Revolution Exhibition, will present machine tools, electric and electronic equipment, transport equipment, petrochemical and medical goods, food items and daily necessities, said the Korean Central News Agency.

Participating businesses come from 16 countries or regions — China, the Netherlands, Germany, Sweden, Britain, Australia, Austria, Italy, Indonesia, Vietnam, France, Finland, Poland, Hong Kong and Taiwan, as well as the host, the report said.

The North began its fall trade fair in 2005 and the spring fair in 1998 with goals of promoting its homegrown goods and acquiring advanced technology from foreign countries. This year’s spring fair was held in May.

Here is the location of the Three Revolution Exhibition.

Here are previous posts about the PITF.

According to the Choson Ilbo:

Italian customs recently confiscated 420 bottles of expensive liquor on their way to North Korea. Italian newspaper Vivere Ancona said customs in the eastern port city seized 150 bottles of brandy and 270 bottles of whisky in containers destined for North Korea at the end of last month.

The confiscation follows a UN Security Council ban on the export of arms, high technology and luxury goods to North Korea after the communist country’s nuclear test in May. The liquor is reportedly worth 12,000 euro, but the brands were not identified.

In July, Italian customs seized two luxury yachts worth W23 billion ordered by North Korea (US$1=W1,222). At the time, the order was disguised as coming from a Chinese company, but the investigation revealed it had actually been made by North Korean leader Kim Jong-il.

Here is a post about the yachts.

Here is a post about DPRK weapons seized by UAE.

Read the full story here:
Italy Seizes Luxury Liquor Bound for N.Korea
The Choson Ilbo
9/14/2009

Movies:

Shiny Morning (part 1)

Shiny Morning (Part 2)

Cartoon- A Kum Rang

Creepy

KFA:
Also, Alejandro Cao de Benos has published his own book in Thailand.  According to the KFA web page the book, Korea, the Songun Citadel, was recently published in Bangkok, Thailand. With 148 pages and first edition of 500 volumes.

I am not sure when volume 2 of 500 will be published.

AIR KORYO:
And finally, Skytrax has ranked Air Koryo as the world’s only 1-star airline.