North Korean Economy Watch

Korea Herald
5/29/2007

North Korea plans to build 10,000 apartments for its Pyongyang residents this year, according to a report Tuesday, Yonhap News Agency said.

The move follows similar construction of 10,000 apartments in the city last year, the Choson Sinbo, a newspaper run by an association of North Korean residents in Japan, quoted a Pyongyang official as saying.

The plan includes mending cracks and worn-out parts of tens of thousands of existing apartments in Pyongyang, the report said, noting the city government last year completed repairing an unidentified number of apartments built before 1990.

Korea Herald
Jin Dae-woong
5/28/2007

North Korea appears to have embarked on preparations to pick a successor to leader Kim Jong-il from among his sons, as the communist leader’s health has declined recently, South Korean intelligence sources said yesterday.

According to the sources, who spoke on condition of anonymity, Kim Jong-il has been frequently accompanied by his two sons, Kim Jong-chul (26) and Kim Jong-woon (23) in his recent official activities, such as inspections of military bases and the so-called “on-site guidance” tours.

“Kim has yet to decide whom will be his successor, but he appears to have it in mind to select one of his two sons,” one source said. “He is now looking at who would be better for the position while they accompany him on military inspections.”

The open appearance of Kim’s second and third sons at the official events resumed with Kim’s worsening health, stemming from chronic diabetes and heart disease, the sources said. Due to health concerns, Kim, 65, halved official public activities between January and May this year, compared to the activities made in the same period last year, they said.

Jong-chul and Jong-woon, both born to deceased Ko Young-hee, the reclusive leader’s purported third wife, had frequently accompanied Kim on such activities, but halted their attendance after the death of Ko in 2004, they added.

The reemergence of Kim’s two sons indicates that North Korea is gearing up for a third generation of hereditary power succession, another source said.

In late 2005, Kim Jong-il banned any debate on a succession nomination in fear of a rapid erosion of his power in the Stalinist country.

Kim Jong-il took over from his father, Kim Il-sung in 1994. It was the North’s first hereditary power transfer.

The two “princes” have recently completed special military studies courses at Kim Il-sung Military University, one of North Korea’s top schools, named after the North Korean founder, he said. Jong-chul and Jong-woon respectively began the secret courses in 2001 and 2002, specializing in leadership and military theories based on Kim Jong-il’s military first policy, he said.

The special education was made in response to calls from Ko that the two sons should succeed the leadership of their father, he added.

Sources said that the moves are expected to reignite a fierce power struggle between Kim’s sons and their advocates over who would take over the helm of the communist country.

Before Kim issued a ban on any discussion in 2005 concerning his successor, it had been reported that Kim’s three sons, including the oldest, Kim Jong-nam, and their advocates had been engaged in a fierce power struggle in recent years.

Kim Jong-nam, 36, may stage a challenge against Jong-chul and Jong-woon in the pursuit of leadership, noting that oldest sons are generally favored in North Korea, where Confucian traditions that honor seniority are still dominant, they said.

Jong-nam is believed to have fallen out of his father’s favor when he was caught trying to enter Japan in 2001 on a forged passport. He was born to Kim’s first purported wife Sung Hae-rim, a former North Korean movie star, who died in 2002. The eldest son escaped an assassination attempt in Austria in 2004, which was suspected of being conducted by advocates of Jong-chul and Jung-woon.

Kim Jong-chol was widely favored to be first in line to succeed Kim Jong-il, but he has been said to suffer from a chronic overproduction of female hormones.

In addition, the emergence of Kim Jong-il’s purported new wife, Kim Ok, is also expected to add a new twist to the power struggle between the princes, sources said.

The 43-year-old former secretary of Kim Jong-il has frequently accompanied the reclusive leader Kim on his visits to army bases and industrial complexes, and sat with him when he met visiting foreign dignitaries.

Sources think that the young lady could be behind the leader’s ban on any succession debate because Kim’s early appointment of a successor may destabilize her status as first lady. She is building up her own political force with close affiliates in crucial posts within the regime, they said.

Joong Ang Daily
5/28/2007

Russia has its own dreams of a cross-border railway, linking its tracks to North Korea.

The former communist country has signed a non-binding deal with the communist country to rebuild a section of railway from the Russian border station of Khasan to the North Korean port of Najin, a Russian radio station reported yesterday.

Representatives of the Russian Railways and the North’s Ministry of Railways signed the memorandum last April at the end of the four-day talks held in Pyongyang, the Voice of Russia said.

A container terminal in Najin is the end goal of the new joint venture. After the repairs and reconstruction are completed, the two sides plan to ship freight from Northeast Asia to Russia and Europe, it said.

To solve technical and financial issues connected with this project, working groups will be set up. The first meeting is scheduled in Pyongyang next month.

After resolving practical issues, the two sides plan to organize a meeting of the leaders of the two countries’ railways to sign an agreement.

The restoration of the railway from Khasan to Najin will make it possible in the future to link the Trans Korean Railway to the Trans Siberian Railway, according to Russian media reports.

On May 17, two trains crossed the Military Demarcation Line dividing the two Koreas for the first time since the end of the 1950-53 Korean War. South Korea hopes the historic test runs will lead to the connection by railway of the Korean Peninsula, China and Europe.

Yonhap
5/24/2007

South Korea has decided to put off food shipment to North Korea until the communist country fulfills its promise to shut down its main nuclear reactor, government sources said Thursday.

South Korea had planned to start sending 400,000 tons of rice to the impoverished North late this month in the form of a loan to be paid back over 30 years after a 10-year grace period.

In inter-Korean economic talks in April, however, South Korea made its food aid conditional on the North’s fulfillment of its obligation to start denuclearization steps in return for energy aid within 60 days of a Feb. 13 six-party deal.

The North failed to meet the April 14 deadline, citing a banking dispute with the United States over $25 million of its funds frozen at a Macau bank, Banco Delta Asia. In a separate deal, the North Korean money was unblocked but the communist country has yet to withdraw it.

Hoping that the banking dispute would have been resolved by the end of May, South Korea’s government last Tuesday approved budget spending for the rice aid worth $170 million and raw materials worth $80 million for the North to make soap, footwear and clothing.

“As we made clear in inter-Korean economic talks last month, however, we will wait and see if North Korea will carry out the Feb. 13 agreement,” a government official said, asking that he remain anonymous.

The South Korean government has yet to sign a commercial contract to purchase rice aid for North Korea, so it would be next to impossible to keep the inter-Korean agreement to start shipment in late May.

South Korean officials have expressed frustration over the prolonged financial dispute which was touched off by Washington’s accusations that North Korea laundered illicit money through the Macao bank.

North Korea has been free to withdraw the money but it reportedly insists that it gets it back through a U.S. bank. The U.S. government said last week that arrangements were being made to address the North Korean demand.

The Internet knows…

http://kp.embassyinformation.com/?einfo

So, it looks like Hummel, a Danish sports apparel company is sponsoring the North Korean national soccer team.

http://www.hummel.dk/Company/Sponsorships/Football/North%20Korea.aspx

KCNA
5/23/2007

Chondoism is the national religion of Korea. The Chondoists are enjoying their religious life to the full under the protection of the DPRK.

It was founded in 1860 with the idea “Man and God are one” as its principle, for the purpose of building an “earthly paradise” under the banner of “Poguk anmin” (defending the country and providing welfare for the people). From the outset, however, it had to undergo suppression of feudal ruling classes and foreign invaders.

Choe Je U, the founder of the religion who had been called the Most Venerable Suun, and the second leader of the religion were killed by the feudal state of Ri dynasty for their anti-feudal and anti-aggressive spirits. During the Kabo Peasant War (1894 – 1895) and the March First Popular Uprising against the Japanese imperialists, hundreds of thousands of believers were arrested, imprisoned and killed cold-bloodedly.

It was the early winter in Juche 25 (1936) that the religion met its true guardian.

President Kim Il Sung appreciated the patriotic nature of Chondoism and met Tojong (a title of a local leader of Chondoist religion) Pak In Jin. He called for firmly uniting under the banner of the national liberation, transcending differences in ideology, religious faith and political view and led a great number of believers to the sacred war against the Japanese imperialists. After national liberation, he aroused them to building of a new country.

Moved by the noble benevolence of the President who embraced and warmly looked after all the people of the country, the wife of Pak In Jin called him as “Heaven” when she was honored with his audience in 1992.

The Chondoists are also enjoying a happy life under the care of Kim Jong Il.

They are leading a free religious life with the building on a beautiful bank of the River Taedong. Chondoists who were elected deputies to the Supreme People’s Assembly are taking part in the political affairs of the country and are doing a lot of good things for the DPRK.

Pak In Jin, Kang Je Ha, Pak U Chon, Ryo Pung Gu and others who contributed to the liberation, prosperity and development of the country were laid to rest in the Patriotic Martyrs’ Cemetery.

AFP (Hat Tip DPRK Studies)
Simon Martin
5/23/2007

The managers of this capitalist enclave in communist North Korea are appealing for the world’s support, saying their experiment in free markets can pave the way for regional peace.

Diplomats who toured the Kaesong Industrial Complex Tuesday were urged to set aside worries over the North’s nuclear programme and to invest in the complex adjacent to the world’s last and heavily fortified Cold War frontier.

“I know you are concerned about the political situation on the peninsula but I strongly believe inter-Korean projects can help reduce tension,” Kim Chul-Soon told lunch guests of diplomats and reporters who toasted the project with North Korean “Wild Flower” wine to the strains of Mozart.

Kim is executive vice-president of Hyundai Asan, the South Korean firm which since 1998 has invested 1.2 billion dollars in Kaesong and in the North Korean tourist resort of Mount Kumgang on the east coast.

Work began at Kaesong in 2005 and the complex now has 22 factories with five more under construction. The workforce totals some 12,100 North Koreans, including construction workers, and 700 from the South.

Ambitious plans, strongly backed by the South Korean government, call for some 2,000 companies employing 350,000 people by 2020.

A management committee of the two sides touts Kaesong as “the hope for the future” of the two Koreas, which had almost no economic exchanges until a groundbreaking summit in 2000.

Committee chairman Kim Dong-Kun noted that Kaesong was one of the battlegrounds of the 1950-53 war which cemented the peninsula’s division.

“I am confident it will pave the way for peace and stability in the Korean peninsula and Northeast Asia but I realise this will only be through strong international support,” he told diplomats.

Visitors to Kaesong are greeted by a portrait of North Korea’s “Great Leader” Kim Il-Sung, who died in 1994, as they pass through the heavily fortified frontier zone.

But the fenced-off complex, funded almost entirely by the South, is otherwise a propaganda-free zone. North Korean officials refer to “South Korea” rather than the “south side,” as official media terms its neighbouring nation.

Pictures of North Korea’s Kim dynasty are not in evidence, apart from on lapel badges, and presentations praise the private sector.

Managers say they want to emulate Shenzhen, the special economic zone bordering Hong Kong which kick-started China’s economic boom. But unlike in Shenzhen, North Korean workers — described as diligent, well-educated and eager to learn — cannot spend their wages as they wish.

Companies pay the basic wage, 57 dollars and 50 cents a month for a 48-hour working week, to North Korean officials.

The officials, on average, return 15-20 percent to the worker in North Korean won and the remainder in the form of food and other essentials.

Given the North’s crumbling command economy and persistent food shortages, jobs at Kaesong are still apparently desirable.

“Because North and South Korea are working together, it feels great because unification will come sooner,” said one female worker at the ShinWon textile factory in a typical response.

Asked how much she earns, she told AFP through an interpreter that “we earn enough to make a living and keep our stomachs full.”

Kaesong’s supporters say it will narrow the huge economic gap between North and South but they seek foreign support. Apart from one Japan-invested joint venture, all factories at present are owned by South Korean companies which enjoy tax breaks to invest.

Six sites have been set aside for overseas firms in the first phase.

Goods are labelled “Made in Korea” and are covered by Seoul’s free trade deals with Southeast Asia. But the United States, which sealed an FTA with South Korea recently, agreed only to consider the Kaesong issue later.

The aim is also to revitalise South Korea’s small- and medium-size firms, especially textile companies which are struggling against competition from cheaper Chinese labour. Textiles account for almost half of Kaesong’s total production worth 115 million dollars since it opened.

Korea Times
Lee Jin-woo
5/23/2007

A middle-aged American doctor who grew up in South Korea has stressed that it’s time to move on to helping North Korea with public health issues.

“North Korea’s food situation is at least better. We need to move on to public health issues including rebuilding the North’s nine provincial and 200 county hospitals,” John A. Linton of Yonsei University’s Severance Hospital in Seoul told The Korea Times in an interview on Monday. The 47-year-old doctor heads the hospital’s international health care center.

Linton, who is well-known for his Korean name Yin Yo-han and thick South Jeolla Province accent, proposed a three-stage medical support program for North Korea from the South Korean government.

“Number one, we need to help them with a vaccination program, which should be followed by supplies of diagnostic equipment,” he said. “The final stage should be an exchange of doctors between the two Koreas.”

He said North Korean doctors need basic diagnostic equipment _ ultrasound and x-ray machines, and clinical pathology supplies _ as well as more operating theaters.

“You have to have a healthy population in the North, for them to survive and become competitive enough to receive economic finance and business opportunities.”

He hoped that large-scale medical support to the North on a regular basis would be discussed during ministerial talks between the two Koreas in the near future.

“Nobody can argue with health care,” he said. “North Korea has been an enemy, but now at the same time they are brothers. Even if they are an enemy, you must help them.”

Linton, who visited the North 17 times between 1997 and 2003 to help eradicate tuberculosis in the Stalinist state, said it should be South Korea, not the United Nations or the World Health Organization (WHO), that needs to take the lead in helping the North.

“You have to be very, very careful with the U.N. and WHO. They treat the two Koreas as two separate countries differently,” he said. “Eventually policy should be looking towards unification. South Koreans should take the lead.”

Asked whether he is a big fan of South Korea’s engagement policy toward Pyongyang, dubbed the `Sunshine policy,’ he said he supports it wholeheartedly. Linton, however, emphasized the need to guarantee transparency in the process.

“We should not encourage some of the North Korean leadership as middle management is very corrupt. We should not reward corrupt people there. That’s not for us that’s for North Korea.”

His dedication toward helping the North was initiated by his mother, who worked to eradicate tuberculosis in Suncheon in South Jeolla Province for some 40 years. She decided to donate ambulances to North Korea in 1997.

“When we got there in Pyongyang, we suddenly received a special request from North Korea asking for assistance treating TB throughout the whole country,” he said. “We visited the entire country while helping them fight TB.”

In his autobiography published last year, Linton recalled his unforgettable experiences as an interpreter during the bloody Kwangju pro-democracy movement in May 1980.

He served as a translator to people who occupied the provincial capital against the then military regime led by former President Chun Doo-hwan.

“Immediately following this experience, I was labeled as an insurgent ,” he said. “The American embassy in Seoul asked me to leave Korea, just for translating for three to four hours for reporters.”

He said his experience in Kwangju changed his personal life and made him understand what injustice is and how dangerous newspapers are.

He said such a great sacrifice should never ever happen again on the Korean Peninsula.

Korea Herald
5/23/2007

North Korea’s first film bidding for buyers at the Cannes market provides a rare look at the fortress nation seen through teenage eyes, according to a news report.

“The Schoolgirl’s Diary,” one of only two films produced from Pyongyang last year, chronicles a girl’s life through her school years, grappling with peer pressure and family problems much the same as those the world over, AFP reported.

“It is not pure propaganda,” said James Velaise of Pretty Pictures, who snapped up distribution rights at the Pyongyang filmfest last September, a two-yearly event barred to US movie types but open to a handful of European and Communist nations.

“It’s the first time North Korea has been shown on the market,” Velaise told AFP. The film, which reportedly saw eight million admissions at home last year, or roughly one out of three North Koreans,will be released in France at the end of the year.

The movie, described by trade magazine Variety as “well-lensed,” debuts unexpectedly with schoolgirls in uniform carrying Mickey Mouse bags.