North Korean Economy Watch

Yonhap
4/10/2007

North Korean authorities have scaled back their country’s food rationing system and allowed rice to be bought and sold at open markets in major cities, sources here said Tuesday.

In July 2002, the communist country reduced food rationing and introduced an economic reform program under which wages were raised and farmers’ markets were expanded so that people could buy food. But the policy has zigzagged on the purchase and sale of cereals and rice. 

“Since last year, rumors have spread about the sale at state-run stores as the food rationing system did not function well. Currently, not only corn but also rice is being traded at the markets,” a government source said, asking to remain anonymous because of the sensitivity of the issue.

The source added that North Korean authorities permitted the sale of imported rice at state-run stores. “The authorities hope to clamp down on high rice prices at black markets by diversifying the sources of rice distribution,” the source said. On the North’s black market, the product costs about 20 times more than rice at state-run stores. 

Choson Ilbo
4/9/2007

“Why are so many crosses out there?” “Why do most children wear glasses?” “Can I see your mobile phone?” These were just a few of the many questions North Korea’s youth football squad had over the weekend. On the pitch, they are not different from young South Korean players. But moving around by bus or train, they were full of curiosity about the things they saw. Twenty-three members of the under-17 football team have been staying in South Korea for 20 days.

Many questions
The lobby of the Suncheon Royal Tourist Hotel at 9 a.m. on Saturday. The North Korean soccer squad look trim in their black uniform, shoes in hand. They had countless questions for the South Korean officials of the Sports Exchange Association accompanying them. “What is the cross for?”, one asks, and when told asks again, “What is a church?” The answer seemed to baffle them. When an official explained that many young South Koreans wear glasses because they use computers a lot, one team member said, “In North Korea, only few children and scholars who read lots of books wear glasses.”

The players were particularly taken by mobile phones. They wondered how people could make calls without lines and play games or take pictures with their phones. Whenever officials from the association used their mobile phones, the North Korean youngsters gathered to see their phones.

When shown magazine photos and asked to pick the most beautiful among actresses, Jeon Ji-hyun, Song Hye-gyo and Beyonce Knowles, they chose Beyonce Knowles, still insisted they didn’t care.

◆ They enjoyed playing chess and cards when taking a rest.

The squad had three meals in their hotel restaurant and only left the hotel for training for three hours in the morning and afternoon. In the hotel, they spent most of the rest of their time playing Chinese card games and chess. They did not watch TV except football games. When the team was moving to Suncheon by bus, one player started reading a memoir by former North Korean leader Kim Il-sung, and others asked to borrow it.

Ri Chan-myong, the head of the North Korean youth squad, and the other eight North Korean officials accompanying them drank together with South Korean officials of the sports exchange association. The North Korean officials drank a lot, finishing off 200 bottles of soju or Korean distilled liquor during their 11 days in Jeju.

◆ “I miss my parents”

Five members got wounds in the middle of training. Those players sometimes said, “I miss my parents.” North Korean soccer players, who did not talk much when they first arrived in Jeju, began talking on the third days. At first, North Korean soccer squad ate only Kimbab(rice rolled in dried laver) and Kimchi, now they eat sushi, sliced raw fish, cake and fruits such as banana, apple and pineapple. North Korean soccer squad will move to Seoul on April twelfth and depart for North Korea on twentieth after having a friendly match on fourteenth. Kim Kyung-sung, chief executive member of the South and North Korean Sports Exchange Association, said, “North Korean soccer team is considering going out before they leave but nothing is confirmed.”

KCNA
4/5/2007

The “Heaven Day Ceremony” was held in Pyongyang Thursday to commemorate the 147th anniversary of the foundation of Chondoism.

Present there were Chairwoman Ryu Mi Yong, Advisor O Ik Je and officials of the Korean Chondoist Church Central Guidance Committee and Chondoists in Pyongyang.

Vice-chairman of the committee said in his speech at the ceremony that Chondoism, the indigenous religion of the Korean nation, enunciated such patriotic ideas as “Broad salvation of the people,” “Paradise,” “Rejection of West and Japan” and “Promotion of the National Interests and Welfare of the People” after its foundation and has since worked hard to materialize them for the past nearly one and half centuries.

It is the long-standing desire and tradition of Chondoism, he added.

Noting that it is important to glorify the June 15 era of reunification by attaching importance to the nation, defending peace and achieving unity in order to accomplish the historic cause of national reunification, the cause of national historical significance, he said to do so is the only way of realizing the desire of Chondoism and means genuine patriotism.

The participants prayed for the withdrawal of the U.S. forces from south Korea and the earliest possible achievement of national reunification so that the desire of Chondoism can come true.

Daily NK
Kang Jae Hyok
4/9/2007

Since the nuclear experiment last year trade between North Korea and China had dwindled. However, lately, business is prospering thanks to the friendly moods between the U.S. and North Korea. Nonetheless, the frequent change in customs officers and their unreasonable requests are disturbing the businessmen.

Some Chinese merchants travel into and out of North Korea everyday, or at the least every couple of days. One businessman, Han Chul Ryong (pseudonym, Korean-Chinese, 42) who had recently visited North Korea for business, expressed his feelings in a concerned voice in a telephone conversation with the DailyNK on the 6th.

Han currently lives in Jilian and has been trading goods with North Korea for 4 years now. With a 2.5 ton truck, he imports and sells North Korean seafood and herbal medicines in China.

Han said, “Nowadays, I don’t want to trade anymore because of the customs officers. They make our lives so difficult… It’s like they have some sort of steel plate over their faces or something. They have no dignity, nothing.”

He added, “Customs officers are so competitive and make so many demands that I cannot remember them all unless it is written down in a notebook. They request a variety of goods such as food, fruits, medicine and electronic goods. Alcohol and cigarettes are a must.”

Another tradesman, Kim Chan Joo (pseudonym) who was traveling with Han said, “Some customs officers go as far as demanding materials for home renovations such as cement, iron rods, window panes, windows, doors and nails.”

When asked what kind of privileges customs officers give after receiving bribes, Kim responded, “Of courses there are privileges… Sometimes they reduce taxes or place a blind eye to goods that should not pass through.”

He said, “There is a saying, ‘A cow fed also gives dung.’ A customs officer who has been fed bribes cannot possibly enforce strict control” and added, “Though customs officers have helped increase trade, as time goes by, the standard of their demands are also rising.”

“That’s not the only annoying problem. After going to all that trouble developing friendly relations with customs officers, they are replaced by new ones and hence there are many losses… It takes double time and money to acquire friendly relations with newly replaced customs officers,” Kim said.

Being a customs officer is considered one of the upper middle-class jobs in North Korea. Unlike an average office worker, customs officers are treated similar to the army. The National Safety Agency is even in charge of some of the customs officers.

Often these people are greedy to accumulate funds for retirement or for their children and as a result, try to gather as much as they can while in office. Even in a chaotic North Korea society, the position of customs officer is considered the yolk of an egg. Consequently, officers go to all means to confiscate as much money as they can from Chinese tradesmen and relatives visiting family.

North Korean authorities are strengthening control over customs officers, however it is difficult to obliterate the problem as it is so deeply rooted. Rather, than the situation dying out, it seems that their unreasonable attitude will increase.

If a customs officer makes receives too many anonymous complaints, he/she is given a warning or penalty. When the situation worsens, the customs officer is then demoted to a different office or in the worse case, dismissed from duty.

Recently, it seems that North Korean authorities have become more aware of the situation and are making efforts to enforce control. One method is removing the officers who are dependent on this corrupt system to different locations.

Han said, “If customs officers don’t do this, it is hard for them to eat and live… Though the demands by Chosun customs officers are increasing by the day, in order to trade there is no other way.”

An old shirt stirs memories
Joong Ang Daily
Jeong Young-jae

Li Chan-myong, 62, the director of the North Korean youth soccer team, had a big surprise last week when he saw a uniform that a North Korean soccer player wore during the 1966 World Cup games in England.

“Right, this is right. Clearly it is the uniform we wore,” Li said, feeling the cloth. “There are none in the North and I didn’t expect to see one here in the South.”

The North Korean youth team has been training here, in preparation for the FIFA U-17 World Championship 2007 that will be held in South Korea.

Li met Lee Jae-hyoung, 45, a collector of soccer memorabilia, last Tuesday at the Hotel Castle in Suwon, where the youth players were staying.

Li was the goalkeeper for the North Korean team during the 1966 England World Cup, in which the team reached the quarterfinal.

Lee purchased the uniform in 2004, in Britain. The uniform, bearing the No. 10, was worn by striker Kang Yong-un. It was a remarkable experience for Lee to see a soccer shirt that had last been in the possession of one of his teammates 41 years ago.

Li said there are no uniforms in North Korea that had been worn by team members. “The British were fascinated by North Korean players,” he said. “They took all of our uniforms, shoes and socks.”

At the time Li was 165 centimeters tall (five feet five inches) and thus was taller than most other North Korean players, whose average height was 162 centimeters.

The North Korean team fought and beat the Italian team, whose players were much taller. It was one of the most shocking upsets in World Cup history.

“I trained myself to jump higher until I was exhausted and could barely move, so I would be strong enough to overcome our disadvantages,” said Li, recalling the past. “I thought, if I missed the ball, I would embarrass the entire North Korean nation.”

The North Korean team beat Italy 1-0 in Middlesborough, during the last game of group four on July 19, 1966. North Korea became the first Asian country to reach the quarter-finals of the World Cup.

In the quarterfinal, North Korea scored the first three goals against Portugal, but could not stop Eusebio da Silva Ferreira from scoring more. North Korea lost to Portugal 5-3.

“Eusebio’s shooting was the strongest I have ever seen,” Li said. “Portugal was down by three goals by the 24th minute of the first half, and the Portuguese players were upset. I was dizzy because they were driving us so hard.”

Li was a member of the North Korean national team between 1964 and 1975, but he has never played against a South Korean team.

For the qualifying rounds of the 1966 competition South Korea did not participate, because North Korea had a much stronger team.

Lee was given the title “people’s hero” in North Korea. He was the coach for the North Korean team during the 1976 Montreal Olympic Games and led the team to the quarterfinal.

The North Korean youth team began training on March 24 on Jeju Island and has been touring South Korean cities, including Suwon and Changwon, for the last 20 days.

“We have been treated well here and it is very comfortable,” he said. “I hope there will be more soccer-related exchanges between North and South Korea.”

Korea Times
4/9/2007

A Laotian government official has demanded that a Japanese nongovernmental organization seeking the release of three North Korean teenagers from a Laotian prison pay $1,000 in cash per detainee, Kyodo News reported Sunday.

The Japanese news agency quoted Hiroshi Kato, chairman of the Life Funds for North Korean Refugees, as saying that the Tokyo-based group has rejected the idea of paying, but it is concerned Laos could accede to Pyongyang’s demands and extradite the three youths to North Korea.

According to Kato, the three detainees are a 17-year-old girl, a 14-year-old girl and a 12-year-old boy, all from North Hamgyong Province in northeastern North Korea.

They smuggled themselves into China in the early 2000s after suffering food shortages, the death of their parents and other hardships in their homeland. Now they hope to find exile in the United States.

The children were caught by Laotian border security officials in November as they were crossing the Mekong River in an attempt to go to Thailand via Laos, said Kato, who met them in a prison in Vientiane.

They were given a three-month prison term for illegal entry into Laos. Although the three months have passed, they are still being detained, Kyodo quoted Kato as saying.

Kato’s group contacted the Laotian government to become guarantors for the youths and was told by a government official they could be handed over to the Japanese group for $1,000 each.

The NGO decided to reject the request, fearing it would set a bad example in seeking the protection of North Korean refugees in Laos.

But the group is concerned that a North Korean consul, which visited the prison Friday, will demand that Vientiane deport the three to North Korea.

Joong Ang Daily
Lee Young-jong and Ser Myo-ja
4/7/2007

South Korea hand-delivered $400,000 in cash to North Korea yesterday for Pyongyang’s purchase of video communication equipment. The North will spend the money to buy computers and display screens to reunite families separated for more than a half century by the demilitarized zones through video conference calls.

Two South Korean Red Cross officials boarded a cargo ship in Incheon for Nampo of North Korea Thursday morning. They carried a suitcase containing 40 bundles of one hundred, $100-dollar bills. The ship arrived in North Korea yesterday morning.

According to Red Cross officials, the cash was handed over to their North Korean counterparts at the port. “We told the North Koreans to inform us of the specific spending of the money,” an official was quoted as saying, adding that he received a receipt from the North Koreans for the cash.

The two Koreas’ Red Cross societies agreed last year that the South will fund the equipment for high-tech reunions and the promise was reaffirmed in March. South Korea was unable to provide equipment directly to the North because of U.S. regulations banning the export of dual-use goods to the North. Under the U.S. export administration regulations, strategic goods that include more than 10 percent of U.S.-made components or technology are banned for export to state sponsors of terrorism.

The money was from the inter-Korean cooperation fund. The Unification Ministry wired it to the South Korean Red Cross bank account and informed the Bank of Korea about taking the large sum of foreign currency out of the country. The money had to be hand-delivered because North Korea has had trouble accessing the international financial system since its funds were frozen at the Banco Delta Asia.

“It is sad that the North Koreans do not have a proper bank account that we can wire money to,” a Roh administration official said. “It shows the unfortunate reality of North Korea as an outsider of the international community.”

Korea Times
Andrei Lankov
4/8/2007

It is a sort of commonplace statement that the U.S. forces which landed in Korea in early September 1945 had almost no local knowledge and no plans of what they were going to do. But it is sometimes stated, that the Soviet forces which had arrived two weeks earlier had some plans. Such statements are especially common on the political right. This is understandable: Human beings tend to see themselves as disorganized and unprepared while believing that their opponents possess diabolic foresight and an uncanny ability to exercise the utmost control over events. Fortunately or not, such a perception, the basis of all conspiracy theories, is usually wrong.

So did the Soviets have a plan when their forces fought their way to Korea in mid-August 1945? Obviously, not. At least this is what I can say from my frequent talks with the participants of those events, and also from the papers which I have seen.

Actually, Korea did not feature prominently in Soviet international strategy before 1945. For decades, Moscow’s policy toward Korea was subordinated to what appeared to be much more important _ its relations with China and Japan. The Soviet Union secretly subsidized and supported the Communist movement in colonial Korea, but this was a relatively small-scale operation seen, first and foremost, as a part of the larger efforts to undermine the Japanese empire.

The situation was exacerbated by Stalin’s Great Purge of the late 1930s. Before that, the Soviet citizens of Korean extraction played a prominent role in formulating the Soviet policy toward the peninsula. However, in the great slaughter of the bureaucrats and military officers that took place in the late 1930s, ethnic Koreans enjoyed especially bad survival chances. Their ethnicity made them suspicious, and few of them survived the bloodbath of 1937-38. As a result, the Soviet Foreign ministry, intelligence agencies, and armed forces lost what little Korea-related expertise they had possessed in earlier days. Those people who were responsible for the Korean policy in the 1920s and early 1930s were mostly shot or had died in various prisons by 1940.

There was also another reason for the Soviet reluctance to draw up plans for the political future of Korea. Nobody expected that the victory over Japan would be that swift. The Soviet military remembered their protracted and bloody battles with the Japanese during the undeclared border wars of the late 1930s, and so they were prepared for a campaign that would drag for many months.

However, the Japanese military machine collapsed in a week. Western readers believe that the reason was the nuclear attack on Hiroshima and Nagasaki _ a claim that was never particularly popular in Russia. Irrespective of their contribution to the outcome of the war, the nuclear bombs hardly changed much in Manchuria and North Korea. The Russian forces had experienced engagement with the Nazis in Europe, while the Japanese troops in the area were weakened by frequent withdrawals of their best forces to the Pacific theater.

Thus, in late August 1945 the Soviet generals suddenly found themselves responsible for a large territory of which they knew almost nothing. The army had few Korean speaking interpreters, and virtually no local political intelligence. Not only was it the local army headquarters that was lacking in this regard, even Moscow itself had only vague ideas about the political forces active in Korea _ and even this inadequate knowledge was largely about Seoul, not the areas of the North.

In the greater context of the post-war world, the future of Korea remained undetermined. The Kremlin expected that its relations with the U.S. would deteriorate ? on the generally correct assumption that any major victory brings about a greater rivalry between the winners.

However, the shape and intensity of this confrontation remained to be seen. In those days, the Soviets also felt a profound insecurity about Japan: the rebirth of Japan as a great power was seen as a potential threat, so Stalin wanted to make sure that Japan would never be able to threaten the Russian Far East if it somehow regained its military and/or economic power in a distant future. Thus, uprooting the Japanese influence in Korea was a major task for the Soviet leaders.

Thus, in late August, the Soviet forces had quite nebulous tasks in front of them. They wanted to ensure law and order (incidentally, threatened first and foremost by their own soldiers), get rid of the Japanese influence, and lay the groundwork for a future friendly Korean government.

The first instructions arrived only in late September, when Stalin sent his famous secret cable to Korea. His cable envisioned a “bourgeois democratic government” for the Soviet zone of occupation, and explicitly warned against attempts to export Communism to Korea. The cable obviously talked about a government in the North, and this can be seen as the first sign of future division. Nonetheless, this was only the first step: Coherent ideas about Korea’s future developed in the Kremlin only in early 1946.

The “September cable” also implied that the Soviets would have to cooperate with the local Right _ and indeed they soon recruited Cho Man-sik, a prominent Christian nationalist _ to act as a leader of the local administration.

KCNA
4/8/2007

General Secretary Kim Jong Il received a letter of thanks from the Central Standing Committee of the General Association of Korean Residents in Japan (Chongryon) on April 8 on the occasion of the 50th anniversary of the remittance of educational aid fund and stipends to the children of Koreans in Japan by President Kim Il Sung and Kim Jong Il.

The education aid fund and stipends sent by the President 50 years ago served as life-giving water that brought the national education in an alien land into bloom and an engine that dynamically pushed forward Chongryon and the movement of Koreans in Japan, the letter said, and continued:

The Koreans in Japan could usher in a heyday of national education by displaying patriotic enthusiasm in all fields with the high honor and pride of being overseas citizens of the DPRK led by the immensely kind-hearted and wise President and conduct a more vigorous patriotic movement centered on the national education after building modern Korean schools in different parts of Japan.

Over the past five decades since then, the warm love and care shown by the President have shed more brilliant rays under your loving care and the educational aid fund and stipends sent by you keep the great flower garden of national education in fuller bloom.

Recalling that Kim Jong Il has wisely led the national education of Koreans in Japan, regarding it as a lifeline for the movement of Koreans in Japan, the letter noted that thanks to his guidance they have firmly preserved the soul of Koreans and led a worthwhile life as the overseas citizens of the DPRK generation after generation even in terror-ridden Japan where national persecution and phobia about Koreans prevail.

We Koreans in Japan will cherish the faith that we are sure to emerge victorious as long as we are led by you and wage a more vigorous patriotic movement, decisively frustrating the heinous moves of the Japanese right-wing reactionaries by the force of single-minded unity and thus greet with pride the 21st congress of Chongryon as one of victors, one of unity and put the movement of Koreans in Japan on a new higher level, the letter concluded.

KCNA
4/8/2007

The 20th International Marathon Race for Mangyongdae Cup was held here on the occasion of the Day of the Sun.

Its opening ceremony was held at Kim Il Sung Stadium Sunday.

The ceremony was attended by Kim Jung Rin, secretary of the Central Committee of the Workers’ Party of Korea, Tong Jong Ho, minister of Construction and Building-Materials Industries who is chairman of the DPRK Marathon Association, Pak Kwan O, chairman of the Pyongyang City People’s Committee, officials concerned, working people in the city, sports fans, foreign guests and overseas Koreans.

Marathoners of Namibia, Russia, Malaysia, Botswana, Switzerland, Ethiopia, China, Zimbabwe, Kenya, Poland and the DPRK competed at the race.

Pak Song Chol and Jong Yong Ok of the DPRK came first at the men’s and women’s race.

N. Korea holds int’l marathon to celebrate late leader’s birthday
Yonhap
4/8/2007

North Korea hosted an international marathon Sunday as part of the early events commemorating the birthday of the country’s late founder, Kim Il-sung, the North’s state media reported.

Kim died of heart failure in 1994 at age 82, but his birthday, dubbed “The Day of Sun,” is still celebrated as one of the most important holidays in North Korea, together with the birthday of his son, the current leader Kim Jong-il.

The 20th International Marathon Race for Mangyongdae Cup, named after the birthplace of Kim Il-sung, drew marathoners from Namibia, Russia, Malaysia, Botswana, Switzerland, Ethiopia, China, Zimbabwe, Kenya and Poland, according to the North’s Korean Central News Agency, monitored in Seoul.

North Korea’s Pak Song-chol and Jong Yong-ok clinched first place in the men’s and women’s races at the Kim Il-sung Stadium in Pyongyang, it said.

South Korean marathoners earlier left for North Korea to take part in the race, but the North Korean news agency didn’t report their names.

Kim’s birthday falls on April 15, and in past years, the North has usually begun drumming up a festive mood by holding art festivals, sports activities and dance galas one or two weeks before his actual birthday.

The two Kims hold god-like status in the North, as all North Koreans are required to wear lapel pins with their images and hang their portraits side-by-side on the walls of their homes.