North Korean Economy Watch

UPDATE 9 (2015-10-28): KCNA reveals new photos of the completed Sci-Tech Complex:

Click image to see larger version.

You can read more here.

UPDATE 8 (2015-8-12): KCNA reports a few more details on the functions/information of the complex:

Preparations for Running Sci-Tech Complex in DPRK
Pyongyang, August 12, 2015 17:23 KST (KCNA) — The Central Information Agency for Science and Technology in the DPRK has pushed ahead with the preparations for running the Sci-Tech Complex, which is now under construction in Pyongyang.

The Agency concentrated its efforts on developing various kinds of service programs on a higher level. The programs include information retrieval system, database management system, print system and translation system.

It is also conducting at the final stage the work to synthesize and systematize a large amount of data.

Meanwhile, more than 1 000 multimedia pieces and scores of diagrams were produced.

UPDATE 7 (2015-7-10): New Google Earth imagery of the construction site reveals additional details of the project:

UPDATE 6 (2015-6-25): Google has uploaded a new image of the Sci-Tech Complex. The image is dated 2015-4-28. You can now see the distinctive “atom” shape the building will achieve:

UPDATE 5 (2015-4-4): The Pyongyang Times has published a new article on the Sci-Tech Complex:

Sci-tech complex construction goes full steam ahead

A sci-tech complex is being built on Ssuk Islet in the Taedong River meandering through the middle of Pyongyang.

The complex is almost equal to the Grand People’s Study House in both total area and height.

The Grand People’s Study House is a Korean-style building with an area of 100 000 square metres. It was completed in 1982 in a year and nine months after its groundbreaking.

It contributed greatly to making the whole society intellectual and developing the country’s science and technology.

The new centre is a palace of learning for all people as well as scientists and technicians. It is intended for making all people well-versed in science and technology. It will also serve as a centre for disseminating cutting-edge science and tech-nology across the country.

Latest architectural technologies are employed intensively to the construction.

A green building, the exterior is designed in the form of a large atomic structure symbolic of the world of science to make viewers feel at a glance that it is an information centre of science and technology.

Several flower-patterned outdoor exhibition grounds, study places, a fountain park and a science and technology tower will be built around the main building.

In the central hall that reaches up to the fourth floor will be installed a model of a carrier rocket of artificial earth satellite.

On every floor will be arranged e-reading rooms for professionals, where they can have access to any information in various fields, as befits a general e-library.

The layout includes sectoral sci-tech exhibition halls, online lecture room, room for the show of science film, local and foreign technological information exchange room for joint research and exchange and hall for presentations of scientific and technological achievements and workshops.

Also arranged in the complex will be children’s dream hall for helping them acquire scientific principles and cultivate a web of fantasy, basic knowledge application hall for schoolchildren and halls showing the history of the development of science and technology in the country.

It will be furnished with facilities to transmit information needed for sci-tech information rooms throughout the country.

A several-kilometre-long embankment will be built around the island to prevent flood water. Road extending more than four kilometres will be laid in the compound and the bridge linking the island to Chungsong Bridge will be rebuilt into a new three-way bridge branching into the island.

A trolley bus line is to be built, forming a loop line from Yokjon Street, via Mirae Scientists Street and Chungsong Bridge, to the island.

Tens of thousands of tall trees and flowering shrubs are planned to be planted on the island to landscape the surroundings of the complex and new species of turf over a large area will add to the beautiful scenery of the island.

It is a gigantic construction project with a huge workload.

Soldier builders engaged in the construction are now stepping up the project as scheduled to create a new Pyongyang spirit and Pyongyang speed in the “all-at-once” spirit of the Korean People’s Army of transforming mountains and rivers not in a decade but in a year.

After finishing the excavation for the foundations, the most difficult task, in the biting cold of midwinter they are pushing ahead with the concrete work for the foundations underground and the first floor.

The construction of a modern 500-capacity tower hotel, bridge leading to the island and the trolley bus line is being pushed in a three-dimensional way.

The builders in charge of the bridge are pushing forward with the project as planned by applying advanced construction methods to the building of cofferdam and excavation for the foundations of piers.

Civil servants cleared the site over several thousand square metres and planted over 3 000 trees and flowering shrubs in 15 species.

UPDATE 4 (2015-3-20): According to Radio Free Asia:

North Korea is building a science and technology facility on an unpopulated island in the capital Pyongyang to store digital information obtained in part by hacking foreign websites to help scientists and other professionals access outside know-how, sources from the country said.

“North Korea is building Science and Technology Hall, a massive information and communication service center for scientists, technicians and teachers who can’t access the internet,” someone who works for an educational institution told RFA’s Korean Service.

“If Science and Technology Hall is completed, they can see digital materials from all parts of the world such as international technical development trends and [information about] military, telecommunications and satellites,” the source said.

The facility, which is being built on Pyongyang’s Ssuk Island, will disseminate information to scientists and technicians via the country’s intranet, he said.

It will be connected to major universities in Pyongyang as well as research centers and laboratories in leading companies through a dedicated line, he said.

Construction has already started on the facility, which will collect and organize both domestic and global data, on Ssuk Island,” the Chosun Shinbo, the journal of the Chongryon (General Association of North Korean Residents in Japan), which represents the position of the North Korean regime, reported in January.

UPDATE 3 (2015-2-27):  Kim Jong-un has made a second visit to Ssuk Islet to guide construction of the “Sci-Tech Complex”.

According to Rodong Sinmun:

The complex should serve as a seat of learning where not only scientists and technicians but also people from all walks of life can have an ample opportunity of learning and a center for disseminating latest science and technology throughout the country, he said, calling for constructing it to be impeccable in terms of architectural beauty and practical use.

He gave an instruction to build a hotel capable of accommodating 500 people which can match well its surrounding environment so that it may provide best convenience to visitors.

He called for pushing ahead with the construction of the complex and preparations for its operation simultaneously.He underscored the need to meticulously organize the work for building a strong latest science and technology database, supplying equipment and apparatuses necessary for e-library service at the highest level, establishing a network between the complex and scientific and technological knowledge dissemination rooms across the country and assigning scientists, experts and service workers.

He underlined the need to successfully undertake the embankment project on Ssuk Islet where the complex is located and effectively arrange environment around it including afforestation and greening.

He praised commanding officers and soldiers of KPA Unit 963 for contriving and introducing an innovative construction method and pushing ahead with the project in a bold way.

He said every sector and unit should render sincere material and moral assistance to the construction of the complex so that it may be pushed forward as a project involving the entire Party, the whole country and all people.

He was so kind as to solve all problems arising in the construction on the spot.

That last sentence I found particularly humorous.

UPDATE 2 (2015-2-1): The “scientific and technological study center” seems to have been re-designed over the last few months. Although construction on the old design had begun, the shape of the facility seems to have changed (was this a consequence of Kim Jong-un’s visit to the facility last year?):

(Image Dates: 2014-7-3, 2014-9-21, 2014-10-26, 2015-1-14)

UPDATE 1 (2015-1-9): According to the Institute for Far Eastern Studies (IFES):

The Choson Sinbo, pro-North Korean newspaper in Japan, reported on January 10, 2015 that a “Science and Technology Hall” is under construction on the Ssuk Islet on Pyongyang’s Taedong River. The hall is reported to serve as a “multi-functional technological service base which will conserve and maintain digitalized data of science and technological achievements made by mankind, and facilitate information sharing and exchanges through a network system.”

The newspaper stated, “The Republic with the national strategy to achieve economic revitalization through science and technology is emphasizing the need for informatization of educational materials in order to foster professionals in science and technological sector.” In also stressed, “In the Kim Jong Un Era, this project is under promotion to advance to the next level.”

Last June, Kim Jong Un visited the Ssuk Islet to provide field guidance for the “Ssuk Islet development project.” During the visit, Kim proclaimed, “The demand for scientific and technological knowledge sharing is increasing day by day,” and added, “Our Party [Workers’ Party of Korea] has decided to develop Science and Technology Hall in the Ssuk Islet to address the demands of the people.” According to the newspaper, the islet, which is situated at the gateway to Pyongyang, will be equipped with indoor and outdoor exhibition space and will “transform the scenery of the Taedong River.”

Last year, the faculty residence for the Kim Chaek University of Technology was completed (two, 46-story apartment buildings) on the riverside of the Taedong River. This high-rise, which looks afloat on the Taedong River, will be at the center of the currently-under-construction “Mirae [Future] Scientists Street.” This street will house various residential and public service buildings.

In particular, the newspaper claimed, “The economic trials suffered from the end of the 20th century with the blockade and sanctions from our adversaries has impeded the advancement of the information sector. Hence, the informatization of educational resources is one of the fastest measures to ensure the best conditions and environment for education.” It conveyed the Science and Technology Hall development in the Ssuk Islet will contribute to the efforts toward the “informatization of educational resources.”

It further elaborated, “The most pragmatic approach to meet the demand for knowledge dissemination is not to distribute compulsory literatures, teaching materials, and experimental equipment for every field and units which will require tremendous effort in terms of funds, materials and time.” Instead, the article stipulated that the more rational choice would be to “create a state-level system that can provide necessary information in digitalized data and share that information to the people.”

This can be interpreted as one of North Korea’s efforts to revitalize the economy through science and technology.

ORIGINAL POST (2014-6-3):

Imagery on Google Earth indicates the construction work on Ssuk Islet in Pyongyang began between 2014-1-27 (Top) and 2014-4-13 (Bottom)

On June 2, 2014, Rodong Sinmun/KCNA announced that Kim Jong-un visited Ssuk Islet in Pyongyang and “called for turning the islet associated with the feats of President Kim Il Sung into the one for scientific and technological study center.”

As shown in the satellite images above, construction on the new center had begun before Kim Jong-un made his visit.

KCNA goes on to describe aspects of the new center:

Saying that demand for the dissemination of science and technology is increasing as the day goes by, Kim Jong Un noted that the Party determined to build a modern scientific and technological study center on the islet to meet the requirements of the people.

The center to be built on the islet will function not only as a comprehensive data base for scientific and technological achievements made by mankind but also as a multi-purpose scientific and technological service center, which makes it possible to use all data and share and exchange information through a network any time, he noted.

He instructed officials to build the center at the highest level in the aspects of architectural beauty, formative art and architectural contents so that it may appear a building of national treasure and fashionable and world-class one.

Feasting his eyes on both banks of the River Taedong, he said the site was a very good place and the center to be built on the islet would serve as another springboard from which the country would surpass the world’s level. He added he felt pleased to foresee the center.

Noting that the scientific and technological study center to be built on the islet is another gift of the WPK for the people, he specified measures for designing, construction and the supply of building materials, etc.

UPDATE 1 (2015-4-4): For the second time this year, the Chinese have rejected a shipment of North Korean coal. According to the Korea Herald (Yonhap):

China has returned a shipment of anthracite coal to North Korea because it failed to meet standards for mercury emissions, according to a local report on Saturday.

This appears to be the second rejection by China of the North Korean mineral this year.

The shipment arrived at the Longkou port of China’s northern coastal province of Shandong late last month, but was returned as its quality did not satisfy China’s environmental regulations, iQiru.com, a local Shandong Internet news site, reported, citing an unnamed Longkou port official.

The report did not elaborate further or include the volume of the rejected North Korean coal.

…

In September last year, China announced strict regulations against the sale and import of coal with high toxic pollutants, including mercury and sulfur, to improve the country’s air and water quality.

Anthracite coal accounted for 39.8 percent of North Korea’s total exports to China last year.

China’s imports of North Korean coal plunged 53.2 percent from a year earlier to 16.78 million tons in January this year, according to Chinese customs data.

ORIGINAL POST (2015-3-9): Back in October of 2014, Kevin Stahler was the first person to point out (as far as I am aware) that the DPRK’s coal exports to China were in decline. Quoting Kevin:

However, this year North Korea’s anthracite exports to China are on course for a hard landing. The total value of imported anthracite is down 23 percent in the first half of 2014 compared to a year earlier. That’s an annualized $340 million hit to North Korea’s balance of payments. But North Korea is not alone: China has seen a double-digit decline in both the value and volume of its total world coal imports from January – August 2014.

On March 4, 2015, Yonhap reported that China returned a shipment of coal to the DPRK for reasons related to domestic environmental protection regulations:

China has rejected imports of some North Korean anthracite coal because the coal failed to meet domestic standards for mercury emissions, a local newspaper reported Wednesday, in what appeared to be China’s first rejection of North Korean minerals over environmental concerns.

The shipment was returned to North Korea on Feb. 27 from the Rizhao port of China’s northern coastal province of Shandong, the National Business Daily newspaper reported, citing an unnamed port official.

The report did not elaborate further, or include the volume of the rejected North Korean coal.

After three decades of rapid industrialization, China regularly sees hazardous air pollution with levels of particulate matter rising to nearly 40 times the limits set by the World Health Organization during the winter months.

In September, China announced strict regulations against the sale and import of coal with high toxic pollutants, including mercury and sulfur, to improve the country’s air and water quality.

Anthracite coal accounted for 39.8 percent of North Korea’s total exports to China last year.

In January, China’s imports of North Korean coal plunged 53.2 percent from a year earlier to 16.78 million tons, according to Chinese customs data.

On March 9, UPI reported on one of the key aspects of China’s new environmental policies and how it will affect the DPRK:

China’s crackdown on coal-related pollution will take a heavy toll on the North Korean economy, South Korean newspaper Donga Ilbo reported Monday.

China’s plan is to drastically reduce coal consumption by 160 million tons in the next five years. The plan, presented at the National People’s Congress in Beijing, aims to reduce the fossil energy use that is contributing to severe pollution in big cities, The Australian reported.

Countries exporting coal to China are all affected, but the plan could create an economic crisis in impoverished North Korea. Coal and iron-ore exports are two of North Korea’s biggest exports to China, its biggest trading partner.

According to the Donga Ilbo, more than 97 percent of North Korean exports are shipped to China*, and coal, iron ore comprise 60 percent of all North Korean exports.

China’s anti-pollution policy is affecting North Korean cargo. A North Korean ship delivering coal to China was turned away at the coastal city of Rizhao on Feb. 27. The Donga Ilbo reported the coal did not satisfy China’s environmental regulations.

The rising ban and other factors are placing the impoverished North Korean economy in a tight squeeze.

Anna Fifield also covered this story for the Washington Post and Guardian.

*The article reports that China accounts for 97% of the DPRK’s international trade. This is only true if one excludes South Korean trade–which South Korea does because they consider North-South trade as “inter-korean” trade.

Institute for Far Eastern Studies (IFES)

UPDATE 1 (2015-4-8): Less than a week since expelling a German aid worker, the DPRK announces it deporting and American. According to the Wall Street Journal:

North Korea said Wednesday it has deported an American aid worker for “plot-breeding and propaganda” against the isolated state.

A report from Pyongyang’s state media named the aid worker as Sandra Suh. It said Ms. Suh has been a frequent visitor to the country since 1998 for humanitarian work but engaged in anti-North Korean “propaganda abroad with photos and videos … she secretly produced and directed.”

The Korean Central News Agency report said Ms. Suh has been deported.

A spokeswoman for the U.S. Embassy in Seoul said she couldn’t immediately comment on the report. Attempts to locate Ms. Suh weren’t immediately successful.

Foreign aid workers’ access to North Korea is extremely limited and the presence of U.S. citizens is rare. The regime has in the past shown reluctance to let foreign aid agencies work inside the state and has occasionally denied visa renewals when its economic performance made some gains.

The Los Angeles Times follows up (2015-4-8):

Suh is the founder of the Los Angeles-based humanitarian organization Wheat Mission Ministries.

Her daughter-in-law told the Los Angeles Times in a brief phone call that her family was thankful that it appeared Suh would be released, but declined to give details on Suh’s visits to North Korea out of concern about jeopardizing her return.

Eun-sook Suh said Sandra Suh was originally from the Pyongyang area and fled south during the Korean War. She initially returned to North Korea with the hope of finding long-lost family members.

“We’re just thankful that God seems to be helping her return,” she said.

Wheat Mission Ministries did not immediately return a request seeking comment, but its website states it was founded by Sandra Suh in 1989 “in response to the needs of the children and families of North Korea” and was formally established as a 501(c)(3) nonprofit organization in 2005. Suh, however, is not listed as a current staff member.

The Korean Central News Agency did not say when Suh was detained, nor was it clear whether she had already been deported. The agency said Suh had engaged in anti-North Korean “propaganda abroad with photos and videos” that she “secretly produced and directed, out of inveterate repugnancy” toward the secretive nation.

According to the group’s website, Wheat Mission sends medicine, medical equipment, food, building materials, clothes, shoes and blankets to North Korea. The organization is also involved in teaching North Korean healthcare professionals and building schools and orphanages. It says it is inspired “to share the love and humility of Christ.”

North Korea has detained and then released a number of Westerners in recent years who were missionaries or devout Christians, including Korean American missionary Kenneth Bae and Jeffrey Fowle, an Ohio man who traveled to North Korea on a tourist visa and intentionally left a Bible in a hotel room.

The country director of a German aid group, Welthungerhilfe, or World Hunger Aid, was recently expelled. The group said Pyongyang had asked the worker, Regina Feindt, to leave the country in February without saying why. Welthungerhilfe has worked in North Korea since 1997, spending tens of millions of dollars on projects to improve food, sanitation and water supply.

Here is coverage in UPI:

North Korea deported a Korean American aid worker and philanthropist on charges of espionage – after receiving $2 million in annual aid from her organization for 25 years.

Pyongyang’s state-controlled media outlet KCNA had blasted Sandra Suh on Wednesday, for partaking in a plot against the North Korean government, and for disseminating “propaganda” about the reclusive state, reported Yonhap.

Suh left North Korea and arrived in Beijing on Thursday, en route to the United States after the announcement.

Choe Jae-yeong, a pastor and an acquaintance of Suh, said Suh was a “doyenne of North Korea aid organizations in the Los Angeles area,” according to Radio Free Asia.

Choe said even in the darkest days of the Great Famine that killed more than two million North Koreans in the 1990s, Suh was at the forefront of providing aid to the needy. At the time, she operated a noodle factory in North Korea’s Hwanghae province and in Pyongyang, and supplied medical aid.

Suh even arranged a trip to North Korea for U.S.-based pastors in order to raise funds and awareness of the need for a hospital for the disabled in North Korea. At one point, she collected used carpets for North Korean orphanages.

The Korean American aid worker had relatives in North Korea and her philanthropic work enabled her to cultivate a friendship with the North Korean authorities.

North Korea’s KCNA claimed Suh had confessed to her crimes and “earnestly begged for pardon.”

The Guardian reported Suh is registered as a founder of Wheat Mission Ministries, established in 1989 to provide food aid and medical technology to North Korea.

ORIGINAL POST (2015-4-2): James Pearson writes in Reuters (also printed in the Guardian):

North Korea has expelled the country director of one of the few foreign aid groups to operate in its territory.

Welthungerhilfe, whose name translates as World Hunger Aid, is one of Germany’s largest non-governmental aid organisations and has been working in North Korea since 1997, spending more than €60m on projects designed to improve food, sanitation and water supply.

It said North Korea had asked its country director Regina Feindt to leave the country in late February, without warning or saying why.

Feindt’s colleague Karl Fall, who had worked in the country for 12 years, left of his own volition the next month.

“Welthungerhilfe does not see anything in Mrs Feindt’s behaviour that would have justified an expulsion,” the aid group said.

It said Feindt left North Korea on 26 February and Fall left on 19 March. Feindt and Fall were not available to comment, Welthungerhilfe said.

The abrupt departures came as a surprise to members of the small foreign community in Pyongyang, according to a regular visitor to the North Korean capital who wished to remain anonymous, citing the sensitive nature of working there.

Welthungerhilfe would not comment on the events leading up to Feindt’s deportation. “We don’t know why this has happened,” said spokeswoman Simone Pott.

The NGO still has a skeleton presence in North Korea. It said its activities to improve water and sewage systems in cities were unaffected.

“At the moment we are in discussions with the North Korean authorities to secure a basis for continuing our development work in the country for the benefit of the people of North Korea,” the group said.

Read the full story here:
North Korea expels country director of German aid group
Guardian
2015-10-2

According to the Daily NK:

More independent transportation companies, run by the donju, or new affluent middle-class, are springing up in North Korea’s main transit hubs and driving up fares.

“There is a growing number of bus and truck companies operating not only in Pyongyang but nationwide,” a source from North Hamkyung Province told Daily NK last Friday. “People are buying buses or trucks and then paying the state a certain fee to open up transportation companies authorized by the central authorities.”

She explained that those members of the donju with significant amounts of money establish contacts with central bodies and win over the right to operate. “The ‘Pyongyang Transit and Trade Company’ and the ‘General Bureau of Transportation,’ which fall under the Cabinet, write up permits for individual donju and are authorizing the operations in exchange for a certain amount of the profits,” she said, adding that each region has bus companies that come from those two Pyongyang-based offices, creating a de facto public-private collaborative operation.

The donju, by importing second-hand buses from China for 3,000 to 4,000 USD, are overtly raking in profits and revolutionizing bus transportation in North Korea; personal bus transportation was only available in two to three cities in the early 2000s, including Pyongyang, but now it has spread nationwide. According to the source, some companies own anywhere from dozens to hundreds of buses.

“The fare between Chongjin and Musan used to be 8,000 KPW [1 USD] until just two years ago, but now it has jumped to 50,000 KPW [6.25 USD]. The bus that runs between Chongjin and Kim Chaek is currently 80,000 KPW [10 USD] – ten times the original price,” she noted. “Donju are raising the fares to whatever they want depending on the oil prices and exchange rate with the Chinese yuan.”

In the North’s main cities, state-run trams, trolleys, and long-distance buses do operate, but the vehicles are old and the companies beset by economic difficulties. The number of donju-run companies, however, is increasing by the day, leaving the state no choice but to accept their money and grant them license to operate.

“People are happy that there are more options for transportation but there are a lot of complaints about the expensive fares,” the source said. “Some say it’s not unusual for such companies to be operating in the way they do considering the dilapidated condition of state companies, but in the end it’s the regular people who bear the brunt of it all.”

Additional posts on the DPRK’s bus networks here.

Read the full story here:
Transportation Options Taking Off
Daily NK
Choi Song Min
2015-04-01

According to Yonhap:

Chinese firms have proposed establishing a non-tariff trade market with North Korea where cheap goods can be traded without tariffs between the two nations, according to the Chinese border city of Dandong on Monday.

The proposal was made by representatives of Chinese firms in Dandong on Thursday when they met with a North Korean trade delegation, led by Pak Ung-sik, director of the North’s Korean International Exhibition Corporation, according to a statement posted on the Chinese city’s website.

More than 70 percent of bilateral trade between North Korea and China is conducted through Dandong.

Pak reacted positively to the proposal, saying he would relay it to the relevant North Korean authorities and hopes to hold more discussions over the proposal, according to the statement.

Another Chinese border city, Tumen, in the northeastern Jilin province, opened a non-tariff trade market with North Korea in 2010, but the market was quickly suspended as North Korea banned civilians from participating in it due to concerns over the spread of banned materials that may enrage the North’s leadership.

At that time, Tumen had pledged not to impose tariffs on the trade of goods worth less than 8,000 yuan (US$1,287) per person.

China’s is the economic lifeline of North Korea, but their political ties remain strained over the North’s defiant pursuit of nuclear ambitions.

North Korea’s annual trade with China fell 2.4 percent from a year ago in 2014, marking the first decline since 2009, according to data compiled by the Beijing unit of the South’s Korea Trade and Investment Promotion Agency (KOTRA).

The North’s trade with China totaled US$6.39 billion last year, compared with $6.54 billion in 2013, the data showed.

Read the full story here:
Chinese firms propose non-tariff trade of cheap goods with N. Korea
Yonhap
2015-3-30

Institute for Far Eastern Studies (IFES)

North Korea has recently revealed an outline of its plans for the Wonsan-Kumgangsan Tourist Region. In May an information session regarding the development of this project will be held on-site in Kumgangsan.

The Chinese newspaper Liaoning Daily reported on March 21, 2015: “North Korea recently held a briefing session regarding its development plans for the Wonsan-Kumgangsan Region at the Grand Metropark Hotel in Shenyang. The meeting was attended by professionals, scholars and businesspeople from several neighboring Northeast Asian countries.”

According to the newspaper, at the event North Korea revealed development plans for a tourist region of approximately 430 square km in area. It also revealed that there will be six major scenic spots throughout the Wonsan-Kumgangsan Tourist Region, namely, Wonsan, Tongchon, Mount Kumgang, Sogwangsa, Masikryong Ski Resort and Ullim Falls.

North Korean authorities explained, “This year the Wonsan-Kumgangsan Tourist Region development project is considered the most important element of our country’s international economic development efforts. The region is being designed at the government level as a world scenic spot that combines the beauty of the ocean, lake, and city.”

The authorities went on to explain that “Geographically, the Wonsan-Kumgangsan Tourist Region is situated on the eastern part of the Asian continent and the central part of the Choson [Korean] Peninsula. Within a 3-hour flight of that region there are a total of 40 cities with populations exceeding 1 million people […] The region contains a total of approximately 670 tourist sites, 140 historical sites, 10 sand beaches, 4 mineral springs, 10 natural lakes, and 3 million tons of muds that are highly effective in the treatment of neuralgia and enteritis of the small and large intestines.”

While North Korea repairs and expands the existing road network connecting each tourist site (focusing first on Wonsan), North Korean authorities have decided to construct a transportation network by establishing a high-speed railroad between Pyongyang and Wonsan, as well as opening passenger routes between Wonsan Harbor and Rason and Wonsan Harbor and Vladivostok. They will also introduce a series of measures for attracting tourists, including a no-visa system, which is currently being studied.

The authorities also explained that North Korea “guarantees the free economic activity of investors and will offer fixed, regular benefits in areas such as land use, labor employment, and taxes.”

“Tourism, manufacturing, and service businesses will be exempt from corporate income taxes for four years, three years, and one year respectively. Meanwhile, real estate businesses that invest in infrastructure will be exempted from land use taxes for ten years, and those that invest in other areas will be exempt for five years.”

The Liaoning Daily reported that at the information session, O Ung Gil, president of North Korea’s Wonsan District Development General Corporation, said, “I hope that by participating this May at Mount Kumgang in the international seminar regarding the development of the Wonsan-Kumgangsan Tourist Region, everyone will have the opportunity to witness and experience Mount Kumgang first-hand. […] North Korea’s door is always open and investors are welcome any time.”

Various Chinese companies and private organizations hosted the information session. Approximately 50 Chinese professionals and business people, who were invited beforehand, attended the program. Only a few Chinese and Japanese media outlets that were chosen by the organizers were permitted to cover the event.

UPDATE 1 (2015-5-29): Office 39 has been connected to the Japanese investigation. According to the Daily NK:

An investigation launched by Japanese police has revealed that Office 39, a special department charged with raising funds for Kim Jong Un’s use, is involved in illegal operation exporting pine mushrooms to Japan, Yomiuri Shimbun, a Japanese daily, reported on May 27th.

During a police raid on the home Huh Jong Do, the son of the head of the pro-North General Association of Korean Residents in Japan [Chongryon], the authorities uncovered documents revealing correspondence between the group and Office 39, revealing that North Korea has been exporting pine mushrooms to Japan in conjunction with Chosun Specialty Sales, an affiliate of Chongryon.

An official with the investigation said it was the first time documents explicitly stating “Office 39” have come to light, leading police to push ahead with the investigation and assert the shadowy agency’s direct involvement in the illicit operation.

Both Huh and Kim Yong Jak, head of Chosun Specialty Sales, were arrested on May 12th for violating laws administration of foreign currency. Police investigations revealed that these two men had imported approximately 1,800 kg of pine mushrooms from North Korea in September of 2010–a clear violation of Japan’s ban on trading with North Korea, implemented after North Korea’s second nuclear test in 2009.

Meanwhile, Washington D.C.-based Voice of America, quoting Japanese daily Sankei Shimbun, that Office 39, Huh, and Chosun Specialty Sales were all involved in the pine mushroom smuggling ring, dividing the profits among the involved parties.

ORIGINAL POST (2015-3-26): According to the Japan Times:

The head of the pro-Pyongyang General Association of Korean Residents in Japan, or Chongryon, had his home searched by police on Thursday, and two South Korean men were arrested on suspicion of illegally importing matsutake mushrooms from North Korea.

Raids took place at six locations, including the Tokyo home of Ho Jong Man, chairman of Chongryon, a body which has functioned as a de facto North Korean embassy for many decades in the absence of diplomatic ties between Tokyo and Pyongyang.

Observers said the raid on the chairman’s home could affect stalled bilateral talks on Pyongyang’s abductions of Japanese nationals in the 1970s and 1980s.

Police arrested Lee Tong-chol, 61, president of a Tokyo-based trading house, and Yoshihiko Kin, 42, an employee of the company. They are suspected of illegally importing about 1,200 kg of matsutake mushrooms worth around ¥3 million via China in September 2010.

The mushrooms are believed to have been sold in Japan, mislabeled as Chinese-grown produce.

Japan has banned imports from North Korea since October 2006 as part of economic sanctions imposed in response to Pyongyang’s missile and nuclear programs.

Both suspects are residents of Japan, and both denied the allegation. Investigators quoted Lee as saying he does not understand why he should be arrested, while Kin denied all knowledge of the matter.

Police are investigating the relationship between the suspects and Ho, who is a member of North Korea’s top legislature.

After the early morning raid on his home in Tokyo’s Suginami Ward, Ho told reporters angrily he does not even know the name of the trading company.

“The investigation is done unlawfully and this would lead to serious problems in the relationship” between North Korea and Japan, he said.

“This is political suppression against the General Association of Korean Residents in Japan,” he said.

Touching on the ongoing investigation into the fate of Japanese citizens abducted by North Korea, Ho said the Japanese authority is making things worse, interfering with the investigation by deliberately worsening relations with North Korea.

Meanwhile, a senior police investigator said authorities suspect a link between the illegal trade and Chongryon, and that they will do everything they can to investigate.

To that end, police have so far searched more than 10 locations, including the trading house and the homes of Lee and of Ho’s son last May.

The locations searched Thursday include the Tokyo home of the pro-Pyongyang group’s vice chairman.

Read the full story here:
Police search home of Chongryon leader over suspected North Korea mushroom shipment
Japan Times
2015-3-26

According to KCNA:

Gravity-fed Tap Water System Established in DPRK

Pyongyang, March 22 (KCNA) — Today marks World Water Day.

In this regard, Ri Nam Hyon, section chief of the DPRK Ministry of Urban Management, noted that the government has striven to supply quality drinking water to citizens on a normal basis.

He told KCNA:

The DPRK government has made big efforts to the introduction of gravity-fed water supply system.

This introduction began in the township of Pukchong County, South Hamgyong Province, in 2003 while a brisk work was launched to explore the headstreams throughout the country.

At present, the gravity-fed water supply system has been established in 35 cities and counties, including Rason and Wonsan, across the country.

The establishment of this system was carried out in cooperation with the United Nations Children’s Fund and other international bodies and governmental and non-governmental agencies of various countries.

According to Voice of America:

A Russian official said Moscow and Pyongyang have agreed to discuss the creation of advanced development zones in Russia’s Far East and North Korea.

The latest project to be discussed between Russia and North Korea would call for a trilateral project, with South Korea’s participation, said Alexander Galushka, Russia’s minister for the development of the Russian Far East.

In an email sent to the VOA Korean news service, Galushka said Moscow and Pyongyang agreed to “discuss the creation of advanced development zones in the Russian Far East and on the territory of the DPRK with the participation of the Russian Federation, the DPRK and South Korea.”

Economic delegation

The agreement was reached during a visit by a North Korean economic delegation to Moscow in late February. The North Korean delegation was led by Ri Ryong Nam, Pyongyang’s Minister for Foreign Economic Affairs.

Ri and Galushka co-chair a commission tasked with promoting economic ties between Moscow and Pyongyang.

The move is an example of a series of ambitious economic projects recently launched by Moscow and Pyongyang in their efforts to enhance economic ties.

In November, the two sides expanded the Khasan-Rajin project, a project connecting the railways of Russia’s border town and the North Korean port, by conducting a test shipment of Russian coal from Russia to the South Korean port city of Pohang through the Rajin.

In October, the two countries launched a rare joint project that calls for Russia to overhaul North Korea’s railway system in return for access to the North’s mineral resources. The project involves reconstruction of more than 3,000 kilometers of railroads over 20 years.

Galushka said the railway project would pave the way for a significant increase in bilateral trade between Russia and North Korea.

Some analysts are skeptical that the project can be sufficiently financed. So far, Moscow is known to have attracted one domestic investor for the project.

Read the full story here:
Russia, North Korea Boost Economic Ties
Voice of America
Yonho Kim
2015-3-22