North Korean Economy Watch

CNN (Hat tip to D”S”B)
Adam Levine
5/22/2007

Hiking on North Korea’s Mount Kumgang gives you the uneasy feeling that despite the majesty of the natural scenery, even nature cannot escape politics in one of the most closed-off countries in the world.

The four-hour walk to Kuryong Falls is the centerpiece of the Mount Kumgang resort in southeastern North Korea. The trail winds along a river with glistening pools of water and picturesque scenery all around.

But you never escape the country’s dictatorship — there is the propaganda carved into the mountainside and rocks by the North Koreans, and the Chinese before them. There are also the North Korean employees working as vendors and rescue workers on the trail. They are always in pairs, and always seem to be watching you.

Kumgang is a popular tourist destination for South Koreans, for whom the mountain holds spiritual allure, and it is one of the few places in North Korea that Americans can travel relatively easily.

Hyundai Asan, an offshoot of the Korean car company, built the resort. It paid the North Korean government US$1 billion for 50 years of exclusive rights to the region and other business interests in North Korea. It spent an additional US$400 million to build the five-hotel resort, which opened in 1998.

More than 1.5 million visitors have made the trip to Kumgang. Most visitors are South Koreans; less than 8,000 visitors are from 48 other countries. Hyundai Asan spokesman Dan Byun says a majority of the 8,000 are South Korean ex-patriots.

Despite the western style hotel accommodations, American money changing hands and duty free shop selling Johnny Walker and Marlboro cigarettes, you don’t forget that you are in North Korea.

Just getting there involves busing through the demilitarized zone, where we are constantly told “no pictures, no pictures” by our guide and informed that aside from the road we are on, the entire area is filled with land mines.

After going through North Korean immigration we are herded back on a bus and reminded again that we cannot take pictures until we get inside the resort.

The 4.5-mile trip moves through southern North Korea, which the guide says is all a military base. Soldiers appear ominously standing at attention along the road. Each carries a red flag, which, we are told, will be raised if any soldier sees one of us taking a picture. Tanks and what appear to be anti-aircraft weapons are hidden in bunkers in the hills overlooking the roads.

The actual resort area looks no different than any typical tourist destination with a welcome center, hotels, bus parking and retail stores. North Korean folk songs blare from overhead speakers in the parking lot. But surrounding it all is a fence to separate tourists from the North Korean village of On Jung Li.

A two-night, three-day tour can cost as much as US$490. There are five hotels to choose from including a beach-side hotel and floating hotel and one that used to be the vacation home of Kim Il Sung’s wife.

There are 11 restaurants, including a branch of a North Korean noodle restaurant that is an exact replica of its counterpart in Pyongyang. An 18-hole golf course is opening in the fall and there is a Korean acrobatics show that performs each night at the theater.

The government has gone to extremes to accommodate the resort, even tearing down a village and moving it and its inhabitants to make way for the welcome center and shop.

The company defends its $1 billion payment to the North Korean government as economic revitalization. Hyundai Asan built a railway and border station to allow trains to travel from Seoul, South Korea, into North Korea. After refusing to let the trains through for a long time, the North Korean government finally allowed the first train to cross the border last week.

Hyundai is also building a reunification center to allow families from both sides of the border to hold reunions when allowed.

Some North Koreans work at the resort as waiters, vendors, rescue teams and maintenance. Most wear a pin of their president on their lapel.

Most refused to be photographed, cryptically saying “no pictures while I am working.” All but a few will refuse to talk to you. The ones that did talk to us offer some glimpse into their thinking.

One rescue worker told us that the only reason President Bush has not invaded North Korea is because Bush is afraid of Kim Jung Il. A vendor told us that she likes Americans, but hates the American government.

The resort is surrounded by a fence, through which you can see villagers planting in the fields and walking down the roads. They are forbidden to come to the resort or talk to the tourists. Not that they appear to be trying.

Ashley Moore, from Oklahoma, remembers North Koreans ducking behind trees and plants.

“We weren’t allowed to speak to any of them,” Moore said.

Moore, and her boyfriend Zac Gambill took a trip to Mount Kumgang when they lived in South Korea last year.

She and Gambill went from being a bit frightened to be in North Korea to surprise about the unabashed consumerism at the resort.

“Seeing the commercialism at the resort was a real shock,” Moore said. But she never felt totally at ease.

“We got a sense of the North Korean government’s determination to convey a favorable image to the outside world and a small sense of what it feels like to be constantly under surveillance,” Moore observed.

Daily NK
Han Young Jin
5/21/2007

Well-informed sources say Heungnam manufacturer’s production facility shuts down.

Several well-known sources relayed on the 20th that as North Korean drugs flow into China in large amounts, it strongly protested to North Korea and requested that the Heungnam Pharmaceutical Manufacturer in Hamheung be shut down.

Following suit, the North Korean government authorities was known to destroy the Heungnam Pharmaceutical Manufacturer used in producing bingdu (the alias for “ice” classified in the category of Philopon in North Korea).

The well-informed source said, “China’s judicial authorities are strongly coping with the situation by imposing three years of penal servitude to those who sell 10g of Bingdu (so called “Ice” in North Korea) or a penalty of 20,000 yuan. When North Korea demonstrated a lax response, China expressed strong discontent.”

In North Korea, the Nanam Pharmaceutical Manufacturer in Chungjin, North Hamkyung is famous as a representative drug manufacturing company. The source evaluated that Hamheung, which has recently risen as a drug production base, had weak means of living which produced the highest number of deaths during the 90s’ mass starvation and the stimulant “Ice” was misused due to the lack of medical products.

$3,000 per kilogram…dealt for $10,000 at the border

An internal source said, “During the March of Suffering, a part of citizens who even sold raw materials and factory equipment earned big money by selling drugs. Since then, everyone has followed the trend. The people in Hamheung started handling drugs with great ambition due to the fact that at the Heungnam Pharmaceutical Manufacturer, the prime cost for a kilogram is $3,000 dollars and the profit exceeds $5,000.”

The source said, “In the past, people touched drugs hoping to make a big fortune with a single swoop, but everyone is thinking about making money by selling drugs nowadays. Inevitably, the number of civilians who have become ‘ice’ addicts has significantly increased.”

Ice can be produced for $3,000 per kilogram and sold on site for $7-8,000 and at the border region where smuggling is possible, it can be sold for up to $10,000.

Another source said, “Civilians have fallen to the bedazzlement of making a jackpot with drugs, so they have gone to the border region carrying drugs and seeking dealers. However, fakes that have been manufactured ingeniously are also making a wave.”

In North Korea, as drug sales have been unyielding, it was known that teenagers who are touching “ice” are not only seriously in Hamheung but in all regions. They are not showing immediate signs of addiction, but they can be presumed as “high-risk” people for addiction.

North Korean businessman Mr. Kim, who is engaging is trade between North Korea and China, wore a sorry expression and said, “Nowadays, children who are not yet fully grown use ‘ice.’ Not too long ago, my friend’s 12-year old son was found while secretly using his father’s ‘ice.’ After severely beating him, the father asked, “Do you like ‘ice’ so much? The son responded, ‘it is a cure-all.’”

In the mid-1990s, due to deteriorated medical facilities and a shortage of medical goods, citizens started to depend on folk remedies. Civilians who started using ‘ice’ in lieu of cold medicines started using it as emergency medicine even for the flu and strokes.

Mr. Kim said, “Ice has a stimulant quality, so it is used to as a stimulant and a stress-releaser. Even children have come to regard it as a panacea and think that a little suck of ice will instantly get rid of pain and make one refreshed.”

Narcotic squads hardly have any strength

The North Korean authorities issued a narcotics degree in March of last year to prevent drug abuse. It has even issued the threat of putting to death related parties of drug deals. However, businesses that have earned money through drugs feed bribes to inspection organs, so sources said that these institutions cannot exert any strength.

One domestic source said, “Recently, a Central Party inspection group was organized in Shinuiju and came forward to regulate drugs, but authorities such as the National Security Agency, the National Security Office, and others have become implicated. However, exposing them in increasing measures makes punishment difficult, because complicit individuals can come forward in hordes.”

Drug sellers in the border region have divided left-over profits from handing over to China with participating National Security officers. The source said, “If a drug dealer is arrested, if back-money is given, even the ring-leader will be immediately released.”

The source also said that upper-class drug inspection groups can instantly become conspirators due to the high amount of money to be handed over to their superiors.

According to the Joong Ang Daily (2007-5-21):

It must have been the most expensive train ride in history. A ticket to cross the border between the two Koreas, a 90-minute journey over 30 kilometers, cost more than 2.7 billion won ($2.9 million) per person last week.

On Thursday, 200 South Koreans boarded two trains on the reconnected Gyeongui and Donghae lines on the west and east sides of the peninsula to chug across the Demilitarized Zone in a show of potential unity. The cost to South Korea, so far, has been 545.4 billion won to reconnect the sections of the cross-border railway severed by the Korean War.

While there are no concrete plans for further runs, the South Korean government has dreams of an inter-Korean rail network that would help the peninsula, cut freight shipment costs dramatically and link Korea by rail to the vast markets of China and the natural resources of Russia.

But to get there from here, the money spent so far on the test run is a pittance. Assuming that the enormous political obstacles to dealing with the North could be overcome, experts say it could cost as much as $10 billion to overhaul the slow, obsolete and backward rail infrastructure of North Korea.

That has not stopped some officials from insisting it can happen. On May 14, Unification Minister Lee Jae-joung announced a three-step plan for an inter-Korean railroad.

The first step would be to use a section of the Gyeongui Line, connecting Seoul and Shinuiju in the North, to serve the Kaesong Industrial Complex project. Transporting goods in and out of Kaesong and allowing North Korean workers to commute to the inter-Korean industrial complex by train is part of the plan.

The next step would be expanding use of the Gyeongui Line up to Kaesong for South Koreans, so that commuters to the complex and South Korean tourists visiting Kaesong could ride the train.

And finally, the South wants to operate trains on a regular basis between Seoul and Pyongyang.

“As of now, providing transportation for goods and commuters to Kaesong and allowing Mount Kumgang tourists to travel by train are current demands,” Lee said at the briefing. The Donghae Line, running between Yangyang and Anbyon in the North, will be used for the Mount Kumgang trip.

“More than 10 billion won worth of goods is produced in Kaesong,” Lee said. “More than 13,000 North Koreans are working there and commuting has become a serious issue.”

Lee has even more ambitious dreams ― the building of a rail line to connect Korea with Europe. “The reconnected inter-Korean railroad will be connected to Russia, one of the largest reserves of natural resources in the world, and China, to provide new economic opportunities,” Lee said. “We need a serious discussion on this with the North.”

Lee, however, admitted that there are enormous obstacles. Gaining the cooperation of the North’s hard-line military, which has been reluctant to open the border to train crossings, and modernization of the outdated North Korean rail infrastructure are among them.

Continuing his drumbeat for the project, after the test run, Lee said South Korea will gladly pay for updating the North’s railroad network ― and cost is no object. “No matter how much it will cost, it is an investment for our economy,” Lee said Friday. “The research is ongoing to estimate the cost, so it is hard to make the number public.”

Estimates vary widely about the cost of modernizing the North’s railroads. Lim Jae-gyeong, a researcher at the Korea Transport Institute, estimated that upgrading the North’s sagging rail networks, for both the Gyeongui and Donghae lines, would cost from 6.5 trillion won to 8 trillion won.

Kim Gyeong-jung, the team leader for inter-Korean railroad networks at the Ministry of Construction and Transportation, cited a Russian report that estimated it would cost up to $3.5 billion “to modernize the railroads in the North and connect them with the Trans-Siberian Railroad.”

Ahn Byung-min of the Korea Transport Institute put the figure at $10 billion for the project, also citing previous Russian reports.

Russia is enthusiastic about the prospects, though, and it conducted three surveys of the North’s railroad infrastructure between 2001 and 2003. The project may accelerate when the two Koreas and Russia begin railroad talks next month.

“We are pushing to hold talks with Kim Yong-sam, the North’s railroad minister, and Vladimir Yakunin, president of the state-run Russian Railways company, at the end of next month in Pyongyang,” said Lee Chul, head of the Korea Railroad Corporation. “The South and Russia have already agreed and the North responded positively.”

The meeting will focus on linking a trans-Korean railway with the trans-Siberia railway. By linking to the Russian lines, Vladivostok could be reached directly by rail from Busan. Researchers say the connection would enable freight to be shipped from Busan to Moscow by rail in just eight days. The transportation cost would be half of the current rate for sea shipments, which is about $600 for a 20-foot container.

The immediate challenge is the infrastructure. Rail is the backbone of North Korea’s transportation system, Ahn said. About 60 percent of passenger traffic and 90 percent of freight is carried by train. With two main rail lines running on the east and west sides of the country, Ahn said, the North Koreans have tried unsuccessfully to connect the systems since the 1970s.

“As of late 2005, the North had about 5,248 kilometers of rail, but 98 percent of them are single-track lines,” Ahn said, meaning that the traffic that can be carried is limited to one train at a time. “Most of the other infrastructure, such as bridges, tunnels, stations and communication systems, is also extremely outdated.”

The trains also run at very slow speeds, between 30 and 60 kilometers an hour. “The speed has not changed much since 1956,” Ahn said. “From Pyongyang to Shinuiju, the distance is 223.6 kilometers. By express, it would take about five hours and five minutes, so the average speed is about 40 kilometers per hour,” Ahn said. “But the regular trains take more than 11 hours.” He noted that there are also no set timetables and service is erratic and sometimes dangerous.

Ahn, who has visited North Korea several times to examine the fraying rail network, provided some extreme examples of how the North tries to cope. “Russia and China often provide food aid to the North via trains,” Ahn said. “When train cars from the two countries arrive, the North, under bilateral treaties, must send back the trains within six months. Rarely are the actual train cars returned, instead China and Russia often receive older train cars ready to retire from service.”

About 2,000 train cars sent from China and Russia have thus been marked as “made in North Korea” and put to use, Ahn said.

“North Korea’s founder Kim Il Sung once said the operation of a railroad is like the circulation of blood in the human body,” Ahn said, “Based on that expression, you could say that North Korea’s rail network is a patient suffering from a serious circulatory disease.”

Read the full story here:
Inter-Korean railroad faces huge obstacles
Joong Ang Daily
Ser Myo-ja
5/21/2007

Yonhap
5/21/2007

North Korean leader Kim Jong-il recently made a reshuffle of his top military officials that may solidify his already firm grip on the country’s military, intelligence officials said Monday.

Ri Myong-su, former operations director of the North’s Korean People’s Army (KPA), has been named a resident member of the National Defense Commission (NDC), the highest decision-making body under the communist nation’s constitution that was revised in 1997 to reflect its military first, or “songun,” policy, an official said while speaking anonymously.

Ri was replaced by Kim Myong-guk, who had served in the post from 1994-1997, while Jong Thae-gun, an Army lieutenant general, has been named the propaganda director of the KPA’s General Political Bureau, according to the sources.

The reshuffle first appeared to be a routine rearrangement of personnel, but the sources said it may have been aimed at expanding the role and power of the already powerful NDC.

“The NDC seems to have become, at least externally, the North’s highest decision-making body as a number of top military officials have recently been appointed to (new) permanent posts of the defense commission,” a source said.

“We believe the NDC may become an actual organization in the near future with hundreds of resident staff like the other top decision-making bodies” such as the Workers’ Party, the official added.

Headed by the North’s reclusive leader, the defense commission has been the most powerful organization in the country where the military comes before everything.

But it has mostly been regarded as a faction of a group, namely the KPA, as most of its members concurrently served in other posts of the army, according to the sources.

Kim Yong-chun, the former Chief of General Staff of the KPA, was named the first deputy chairman of the NDC in April.

The sources said it is too early to determine why the commission’s permanent staff has been increased, but they said it may be linked to Pyongyang’s ruling system after Kim Jong-il.

The 65-year-old Kim has yet to name his successor, raising questions worldwide whether the reclusive leader is considering a collective ruling system after his death.

Kim was named as successor to his father, the founder of North Korea Kim Il-sung, at the age of 32 in 1974.

He has three sons from two marriages, but his oldest son, Jong-nam, 35, has apparently fallen out of favor following a 2001 incident in which the junior Kim was thrown out of Japan after trying to enter the country with a forged passport.

His two other sons, Jong-chul and Jong-un, both in their early 20s, have not held any official posts.

N. Korea enhances Kim’s defense commission
Korea Herald
Jin Dae-woong
5/21/2007

North Korea is beefing up the National Defense Commission, a top military decision-making body directly controlled by Kim Jong-il, Seoul intelligence sources said.

Pyongyang recently conducted a major reshuffle of its top military leadership, including the repositioning of Kim’s closest confidants to the committee, they said on condition of anonymity.

Chaired by Kim, the committee is an organization independent of the Cabinet and the ruling Korean Workers’ Party. It is next only to the communist country’s president, a post permanently held by the late founder and Kim’s father Kim Il-sung since his death in 1994.

The sources said that Gen. Ri Myong-su, former operation director of the Korean People’s Army, has been appointed as a standing member of the NDC. Gen. Kim Myong-kuk has been named to replace Ri as the top operations commander.

The reshuffle followed the appointment of Vice-Marshal Kim Yong-chun, former chief of the general staff of the Korean People’s Army, as vice chairman of the NDC during last month’s general session of the Supreme People’s Assembly, the nation’s parliament.

The personnel reconfiguration, which also affected key posts in the North Korean armed forces, is seen as part of Pyongyang’s move to further enhance the NDC, a powerful state body, under North Korea’s military-first policy.

The generals have been regarded as the most influential figures in the military as they frequently accompany Kim during his field unit inspections.

The commission has the power to direct all activities of the armed forces and national defense projects, establish and disband central defense institutions, appoint and dismiss senior military officers, confer military titles and grant titles for top commanders. It also can declare a state of war and issue mobilization orders in an emergency.

The National Defense Commission, presently chaired by Kim Jong-il, consists of the first deputy chairman, two deputy chairmen and six commission members. All members are selected for a five-year term.

The reshuffles are the latest known change to the commission. Gen. Hyon Chol-hae, former vice director of the KPA General Political Bureau, moved to the post of NDC vice director in 2003.

Experts noted that the figures are taking full-time posts in the NDC and relinquishing their posts in the People’s Army.

Other current members concurrently hold posts at both organizations, sources said.

Vice Marshal Jo Myong-rok, the first vice-chairman of the NDC, also assumes the position of director of the KPA General Political Bureau. Vice Marshal Kim Il-chol concurrently serves as a member of the NDC and minister of the People’s Armed Forces.

“As high-ranking military officers have moved to the NDC as full-time members, the NDC may be preparing to take follow up measures to expand its role and function in the future,” the sources said.

The NDC has been known as a consultative body of top military leaders without extensive subordinate organizations comparable to the ruling party and the Cabinet.

The intelligence sources said the NDC may have more manpower and organization under its wing.

“The NDC began equipping itself with organizational apparatuses with the 2003 transfer of Hyon Chol-hae from the KPA position to the post of NDC,” another source said.

In addition, the NDC has continued recruiting personnel such as Kim Yang-gon, councilor of the NDC, from other government departments, to strengthen the NDC’s policy functions, sources said.

“It is in line with North Korea’s long-term move to concentrate the country’s decision-making power on Kim Jong-il and his close subordinates,” said Nam Sung-wook, North Korean studies professor at Korea University. “It is mainly aimed at preventing possible regime dissolution amid rising international pressures over its nuclear weapons program. Kim is also seen directly intervening in a resolution of the nuclear issue.”

Kim Yong-hyun, a professor at Dongguk Univsersity, also agreed that the enhancement of the NDC will lead to the centralization of power in North Korea, reducing the role of the Korea Workers’ Party.

“Through the organizational reform, the North’s regime seeks to further streamline decision-making procedures to more effectively tackle an array of issues,” Kim said.

The North Korean studies expert said it is an answer of North Korean leadership to continuing economic hardship. The leadership has given over a comparatively extensive amount of power to the Cabinet for dealing with economic stagnation.

Kim also said it could be interpreted as preparation for the post-Kim Jong-il system.

“After his death, a collective leadership led by core subordinates of Kim Jong-il is expected to emerge, so, the move could be one related to future changes,” he said.

KCNA
5/21/2007

The architecture in the DPRK has entered a new phase of its development in the Songun era.

The leader-immortality architecture reflects the unshakable will of the Korean people to attend President Kim Il Sung as the eternal image and to glorify his revolutionary exploits.

The Kumsusan Memorial Palace, the sacred temple of Juche, is a symbol and pattern of architecture for the immortality of the leader.

The Kumsusan Assembly Hall where President Kim Il Sung had conducted indefatigable activities for the Korean revolution and the global cause of independence was named Kumsusan Memorial Palace and built as a sacred temple more than 10 years ago, with the result that a new history of architecture for the immortality of the leader was created.

All structural elements and detailed decorations of the palace from the formation of the elevation to the palace square and stone gates mirror the faith and will of the servicepersons and the people to hold the President in high esteem forever.

Towers of immortality have been erected in different parts of the country. Inscribed in them is the slogan of faith “The great leader Comrade Kim Il Sung will always be with us”.

Typical of them is the tower of immortality built in the entrance of Kumsong Street in Pyongyang.

The tower built across the street has two arch-type openings in the foundation. Inscribed in relief are the immortal slogan on the front and back sides of the tower body flanked by magnolia flowers, the national flower.

The Monument to Party Founding and the Monument to the Victorious Battle of Musan Area, grand monumental edifices in the Songun era, are also associated with the revolutionary exploits of President Kim Il Sung.

The Monument to Party Founding depicts the emblem of the Workers’ Party of Korea in a unique way. A hammer, a sickle and a writing-brush tightly grasped in the hands of a worker, a peasant and an intellectual are vertically erected, surrounded by a girdle. The body of the Monument to the Victorious Battle of Musan Area is a vertically standing rifle, the main theme, unlike other monuments. The monuments depict well in a symbolic method the exploits of the President who founded the WPK and pioneered Songun.

The architectural edifices for the immortality of the leader will be handed down long in accordance with the noble moral obligation of the servicepersons and people to attend President Kim Il Sung as the Sun of Juche and eternal leader.

KCNA
5/21/2007

The Sokthang hot-spring in Onjong-ri, Yangdok County, South Phyongan Province is one of the famous spas in Korea.

Hot spring gushes from different places in three zones and the temperature of the water is 78 degrees centigrade.

The water contains mineral matters, hydrogen sulphide, metasilicic acid component, hydrogen carbonate ions and sodium ions.

As it regenerates skin, promotes blood circulation and heals inflammation, the water is applicable to the treatment of various diseases including chronic osteoarthritis, neuritis, neuralgia, sequelae of traumatism and operations and women’s troubles.

Nearly 50 years ago, a facility was built there for medical treatment with the hot-spring as the main, which was developed into Sokthang Hot-Spring Sanatorium, a medical institution for special treatment of skin diseases.

The sanatorium has mineral-water treatment rooms for bath, shower and rectoclysis, a physiotherapy room for high-frequency treatment and ultrasonic therapy, a functional treatment room for curative sports and massage and so on. It helps promote the people’s health.

Institute for Far Eastern Studies
5/21/2007

Recently, the cost of living for North Koreans has become increasingly burdensome, as the value of the North Korean won (KPW) has steadily fallen. This phenomenon has been observed since the introduction of the July 1st measures in 2002, but the toll on poorer citizens is growing as money is concentrated in the hands of the elite.

A decent jumper jacket from China sells for 30,000 to 50,000 won, a kilogram of meat for 3,000 won, and a bottle of cooking oil for 2,700 won. North Koreans tell of taking 100,000 won to the market and, having only made a few purchases, leaving with an empty wallet.

Every month, a family of four requires 50 kilograms of rice (50,000 KPW or 1,000 won per kg) and 20 kg of corn (7,000 KPW or roughly 350 won per kg). On top of this, the expense of buying supplementary food items such as cooking oil, red pepper flakes, vinegar, garlic, and scallions is almost equivalent to the price of rice.

One North Korean woman (hereafter referred to as Ms. Kim) who sells noodles at the Hweryung Nammun market estimates her living expenses at 60,000 won per month. Ms. Kim, a housewife responsible for a family of three, earns about 2,000 to 3,000 won a day selling noodles. This amounts to roughly 60,000 won a month, which only covers food expenses. She cannot even dream of buying rice, let alone saving up to raise seed money for a business, as her income goes toward supplementary items like corn (23,000 KPW for 70 kg), cooking oil (2,700 KPW), and beans (950 KPW for 1 kg).

Ms. Kim’s husband, who works at the Hweryung machine factory, receives a monthly salary of 4,000 won. This money is only enough to buy four kilograms of rice. Ms. Kim started selling noodles ten years ago, when it became clear that relying on her husband’s income would end in starvation for her family. She said that she has not put meat on the table for her child in a long time, as it is difficult to afford even one kilogram a month. With the exception of merchants who trade with overseas Chinese, workers who earn foreign currency, and those with relatives in China, the majority of Hweryung’s residents live day to day.

With the recent order from the Ministry of Public Security to “cease selling, as rations will be provided starting in April,” local markets have come under stricter regulation. This regulation has had the effect of raising the price of goods manufactured in China. Before the restriction, transactions took place at stalls and impromptu shops, but now buyers must hunt down merchants, which has led to a rise in prices.

On a related note, the dollar’s weak performance in the international market has been reflected in the North Korean black market. The exchange rate remains pegged at one dollar to eight Chinese yuan, but the rate of the North Korean won to the dollar and to the yuan changes daily. North Korea does not have a fixed exchange rate, because individuals who offer money exchange services occasionally receive information on currency rates from China. Due to the dollar’s recent weakness, the rate of the North Korean won to the dollar as well as to the yuan has been falling for several months.

China Daily
5/20/2007

A North Korean cargo ship arrived in South Korean waters for the first time in more than 50 years on Sunday, as commercial shipping services began to open up between the divided countries, officials said.

The 1,850-ton Kang Song Ho with a crew of 27 anchored near the southeastern port of Busan early Sunday for inspections by South Korean maritime authorities, said Kim Na-young, a coast guard official.

Kim said the ship – the first North Korean cargo vessel to arrive in South Korea for commercial business since the 1950-53 Korean War – would dock at Busan port on Monday.

The North Korean ship will “carry cargoes between Busan and the North’s northeastern port of Rajin three times a month,” said Lee Won-jae, an official for Kukbo Express Co., a South Korean agent for the North’s cargo ship.

The ship was expected to depart Busan as early as Monday after loading 60 empty containers, said Lee.

Officials handling the issue at South Korea’s Unification Ministry were not immediately available for comment.

Eugene Bell Foundation (Hat tip D.”S.”B.)
207 C Street, SE, Washington, DC 20003   
TEL: 202-393-0645   
FAX: 202-543-2390
For more information:
Alice Jean Suh; alice@eugenebell.org;
+1-202-329-2410

EugeneBell Returns from 2007 Spring Visit to North Korea Initiates Maternal and Infant Care and Children’s Care Programs

The Eugene Bell Foundation earlier this month visited 17 medical institutions in the Democratic People’s Republic of Korea (North Korea) and launched two groundbreaking community health projects targeting the country’s most vulnerable groups: new mothers and infants, and school-aged children.  From May 1-12, EugeneBell’s chairman, Dr. Stephen Linton, and four delegation members visited city, district, and county medical institutions in North Korea’s South Pyongan Province. All 17 institutions received shipments of assistance as part of EugeneBell’s Partner Package Program 

New Maternal and Infant Care Program and Children’s Care Program

EugeneBell confirmed the new programs’ first deliveries of instructional materials, equipment and supplies at two local hospitals in Sunchon and Anju, cities in South Pyongan Province. These new programs will be implemented in three steps to ensure transparency. Our delegation received agreements from the medical staff at both institutions to implement the first step, with the understanding that progress to the second and third steps will require proof of adherence to EugeneBell’s standards on further visits. These new programs signify groundbreaking advances in EugeneBell’s work. In addition to providing training, equipment and supplies for entire institutions, these programs have also tailored assistance to individual patients. For the first time, EugeneBell will partner with doctors at the most basic level of care in North Korea’s system. All citizens in North Korea are assigned family care physicians. EugeneBell’s new programs will strengthen the ability of family doctors to treat individual patients more effectively and transparently.  “I am very excited about this new opportunity to help insure that pregnant women receive the best care possible from early pregnancy through child-birth,” said Dr. Linton. “We hope to help North Korean caregivers manage child health from the womb all the way through grade school, the most critical period for human development.”  The initial phase of these two new programs received an enthusiastic welcome from hospital staffs. EugeneBell plans to extend this effort to other local hospitals as funding becomes available.

Equipment and Training Upgrades for Local Hospitals Dramatically Improve Local Healthcare

During this visit the delegation was able to evaluate the effectiveness of a program to upgrade diagnostic and surgical capacity at seven out of 40 plus medical facilities supported by EugeneBell. The delegation was impressed at the level of technical sophistication achieved by North Korean caregivers after receiving comprehensive training manuals last year. Through self-study North Korean technicians had, in a surprisingly short time, mastered the use of complex diagnostic equipment and had even made minor repairs.  “It was very impressive,” said Dr. Linton, “to see North Korean technicians operating advanced equipment previously unfamiliar to them. More impressive was the level of cooperation between hospitals that had received the same equipment. When we first started this program, these hospitals were empty because patients had little hope of receiving adequate treatment.  Now that they have new equipment, previously empty hospitals are filled to capacity. Patients wait in line to be examined by the new equipment. “It’s worth the effort to watch these hospitals come back to life.”

Support for Children with Tuberculosis

On this visit the delegation found a new emphasis on treating children with tuberculosis. Several new children’s wards have been established to provide better care for young patients in South Pyongan Province, Nampo City and Pyongyang City. Children are particularly at risk of tuberculosis when their immune systems are weakened by poor nutrition. In response to the new emphasis on childhood tuberculosis by North Korea’s health authorities, EugeneBell will include a system for providing assistance directly to young patients this fall.

Medical Institutions Visited

During May 1st – 12th EugeneBell visited 17 North Korean medical institutions in: South Pyongan Province and Nampo City, South Pyongan Province Tuberculosis Hospital (TBH), Children’s Ward-South Pyongan TBH, South Pyongan Province Children’s Hospital, Anju City Tuberculosis Care Center (TBCC), Pyongsong City TBCC, Bukchang County TBCC, Sunchon City TBCC, Daean County TBCC, Ryonggang County TBCC, Anju City People’s Hospital, Sunchon City People’s Hospital, Daean County People’s Hospital, Chollima County People’s Hospital, Nampo City TBH, Nampo City TBCC, Waudo District People’s Hospital, Hanggu District People’s Hospital 

Total Results of Support in Spring 2007: $ 1,793,717.21 This spring EugeneBell shipped a total of $1,793,717.21 worth of medical goods to 45 medical institutions in North Pyongan Province, South Pyongan Province, Pyongyang City and Nampo City.  

EugeneBell in Action

1. New mother and infant at the Anju City People’s Hospital, part of EugeneBell’s new Maternal and Infant Care Program.

2. Children in Anju City being given health physicals, part of EugeneBell’s new Children’s Care Program.

3. Grade school students are examined at a mobile X-ray vehicle donated through EugeneBell to Nampo Tuberculosis Hospital.

4. Dr. Linton interviews a young patient at the Children’s Tuberculosis Ward at Nampo Tuberculosis Care Center.

5. A patient is examined with a sonogram donated through EugeneBell at Daean People’s Hospital.

   
6. Dr. Linton (left) delivers medical supplies and equipment to Chollima People’s Hospital in South Pyongan Province. In the spring of 2007 EugeneBell shipped almost 1,800,000 dollars of medical assistance to 40 odd medical facilities.

7. Through EugeneBell donors sent 2,200 sets of Patient Necessities Kits to long-term patients in sixteen tuberculosis care centers. EugeneBell does everything possible to identify donors to recipients.

Yonhap
5/18/2007

North Korea’s former Prime Minister Pak Pong-ju has been relegated to the chief administrative manager of the communist country’s largest chemical complex, informed sources said Friday.

In April, the North replaced Pak, who oversaw the country’s threadbare economy, with then Transport Minister Kim Yong-il. Pak is believed to have been in conflict with senior North Korean officials over the introduction of an incentive-based system.

Pak has since been working as the manager for the synthetic fiber complex in South Pyongan Province. The complex resumed operations in 2002. North Korea spent about US$10 billion to build the complex more than a decade ago, but it was hardly operated until recently.

“High-level North Korean economic officials staged a lobbying war not to be appointed prime minister as the premier has no real power and becomes the scapegoat for the North’s worsening economy,” a source said on condition of anonymity.

Saddled with a severe food shortage, North Korea said it will make all-out efforts to raise its people’s standard of living this year by concentrating on light industry and agriculture.

In a session of its parliament, North Korea said its major economic goal is “to improve the living standards of people on the basis of the existing foundations of agriculture and light industry.”

In a recent meeting with U.N. World Food Program officials, a North Korean vice agriculture minister acknowledged that the communist country has a shortfall of about 1 million tons of food and called for aid from the outside world.