North Korean Economy Watch

Daily NK
Han Young Jin
3/29/2007

North Korean inside source informed that authorities had been asserting control over illegal selling and use of mobile phones at the markets near the border regions. National Security Agents have also been conducting in-depth investigations on illegal acts such as drug smuggling and slave trade.

In a telephone conversation with a reporter on the 28th, Park Jong Run (pseudonym) of Musan, North Hamkyung said, “Authorities came to the People’s Units and said furtively, ‘Rations will be distributed in April. In future, you will live a good life. So, stop engaging in illegal trade.’ Why would we listen to them when they tell us to stop selling especially since they aren’t going to give us distributions anyway?”

Park relayed, “They said, don’t sell our confidential information about our country through the mobile phone. People already in possession of mobile phones will be forgiven if they self-confess at the National Security Agency.” Since last year, North Korean authorities have been keeping a close watch on mobile phone use particularly in the border regions.

He said, “They threaten us with a declaration, so that we will report cases of illegality or corruption such as slave trade and drug trade.” For example, large amounts of drugs were found in the home of a Chairwoman for the Women’s Union of Hoiryeong City, late February.

According to Park, authorities will directly carry out the procedures at Jangmadang (markets) themselves, with assistance from Hoiryeong Security Agency and various police departments. Some goods found to be linked to illegal trade are in part taken away by the sudden wave of control. In particular, these authorities have a keen eye for goods made overseas such as Chinese items.

National Security Agents and the police confiscate the items arguing that, “now we have a gap between the rich and poor, as well as the richer getting richer and vice versa, because you, tradesmen have tasted some money. Now, socialism has been infected by capitalism.” However, even the security agents are acting tactful by removing only some of the goods as a mere example of punishment.

Goods confiscated are locked up at the security agency and kept in provision. The endless lines in the waiting rooms of the security agency make up the people ready to pay a fine and recollect their items, says Park. Nonetheless, security agents are reluctant to return the goods back to the traders and so bribes must be ready at hand also.

“I barely got my goods back after bribing them with 10 packets of cigarettes, but there was only half the goods left remaining in the bundle” Park criticized and said that the security agents sarcastically remarked, ‘Hey, let us eat and live a little.”

Following the nuclear experiment, authorities have been trying to gather regime support and elevate the nation’s pride arguing the nation had become a strong militaristic country. They proclaim, “The world is cooperating with us and is throwing their goods at us. In future, you will live well.” It will be difficult for North Korean authorities to prohibit trade, especially with the people’s strong will power to make money.

Yonhap
3/29/2007

A group of 143 South Koreans made a four-day visit to North Korea starting from March 22 to celebrate the opening of a North Korean digital library built with South Korean technology, a local foundation that has a leading role in the project said.

During their stay in Pyongyang, Rep. Im Jong-seok of the ruling Uri Party and other delegates attended the opening ceremony of the digital library at the North’s top school, Kimilsung University, on March 23 and toured the city’s landmarks.

The library’s computer network was built with aid from South Korea’s Hanyang University, the Kim Dae-jung Presidential Library and the Korean Foundation for South-North Economic and Cultural Cooperation, a private foundation for the promotion of such inter-Korean cooperation.

Kimilsung University is the first North Korean school to introduce the South’s advanced digital library system.

Jo Chol, vice president of the North’s university, said he hopes to see an exchange of teaching staff between the universities of the two Koreas, saying the exchange in academic fields will promote the improvement of inter-Korean relations.

Yonhap
3/28/2007

South Korea on Wednesday shipped medical aid to North Korea to help stem the spread of foot-and-mouth disease in the communist country, the Unification Ministry said.

The shipment includes six types of medicine and five types of medical equipment worth about 280 million won (US$280,000), the ministry said in a statement.

Last Thursday, South Korea endorsed its package of emergency aid worth 3.3 billion won for the North, which has culled hundreds of cows and thousands of pigs infected by the disease since July.

South Korea plans to make additional shipments after the two sides hold a working-level meeting of quarantine officials in the North Korean border city of Kaesong on Friday.

The World Organization for Animal Health confirmed the outbreak, and South Korea has proposed to support the North’s quarantine measures. 

Yonhap
Kim Hyun
3/28/2007

South Korea’s major opposition Grand National Party showed flexibility Wednesday in dealing with the United States over an inter-Korean industrial park in North Korea as negotiations for a free trade agreement (FTA) go down to the wire.

The Kaesong industrial complex is one of the sensitive issues dividing Seoul and Washington in their final negotiations, which end Friday. Seoul wants to have goods produced in the joint industrial complex treated as South Korean-made products, but Washington is against it.

The pro-government Uri Party has been prioritizing the country of origin issue in the talks, while its conservative rival, the Grand National Party (GNP) says the dispute over the Kaesong project “is not a big problem.”

The made-in-Kaesong label will make its way abroad when North Korea earns its international credit, and should not be treated as crucially as the issues of rice or beef in the negotiations, the GNP said.

“When inter-Korean relations get on a normal track, it will naturally become much easier (for the South) to operate the Kaesong industrial complex,” Rep. Yun Kun-young, the leader of the party’s special committee on the free trade talks, told reporters.

In a tougher stance, the pro-government Uri Party has put the inter-Korean project as the No. 1 item on its must-have list. In a letter to the main U.S. representative in the talks, Susan Schwab, on Tuesday, the liberal party asked Washington to accept the Kaesong complex in the deal, along with other key demands, such as the exclusion of rice.

“We stress that ratification of the Korea-U.S. FTA in the National Assembly will be determined by the manner that the above demands are integrated into the agreement,” the party said in the letter.

The Kaesong complex, just a few kilometers north of the inter-Korean border, is one of two flagship projects the South operates in the spirit of reconciliation with the North following their historic summit in 2000. Over 11,000 North Korean workers are employed by dozens of South Korean companies producing garments, utensils and other labor-intensive goods. Another reconciliation project is the operation of tours to the North’s scenic Mount Geumgang.

South Korean companies operating in Kaesong say the inclusion of the goods in the FTA is crucial, as this will open the doors for their exports to the world’s largest market and will also affect future trade deals with other countries.

The Assembly is expected to vote on ratifying the deal in August or September if it is signed as scheduled this week. Currently, a majority of lawmakers support the proposed deal.

Sources say the South Korean government has agreed with the U.S. to include the Kaesong complex in a “built-in agenda” in the deal, allowing both sides to hold further negotiations on the issue after reaching a deal.

The issues that the two biggest parties agree are not open to negotiation in the FTA deal are the exclusion of rice, the immediate and complete lifting of tariffs on South Korea’s key exports, such as cars, and the assurance of customers’ rights in medicine and sanitary areas.

Aside from the main parties, however, dissenters and members of minor parties are protesting the FTA. A group of liberal lawmakers, including some presidential hopefuls, have gone on a hunger strike against the deal.

“I cannot possibly sit by idly watching the government unilaterally push for the negotiations and ignore the national interest,” said Rep. Kim Geun-tae, a former health minister and a presidential contender from the pro-government Uri Party, launching his hunger strike at the parliament on Tuesday.

Moon Sung-hyun, chairman of the progressive Democratic Labor Party, continued a hunger strike Wednesday in front of the presidential office that has entered its 21st day.

Daily NK
Yang Jung A
3/28/2007

The World Food Programme (WFP) revealed that North Korea had for the first time admitted that they were lacking a million ton of food.

Recently, Tony Banbury, WFP Asia Director spent 3 days on location with officials from the North Korean Agriculture Ministry and Foreign Ministry where the food situation was discussed.

On the 26th, Banbury told Reuters, “This is a very significant development that they themselves are confirming they have a gap of 1mn tones.”

Director Banbury informed that the WFP and other sources had provided for North Korea’s food variance which equated to about 20% of the nations needs, however that these sources had already been wasted.

Disputably, these figures made by Mr. Banbury do not correspond to the figures on North Korea’s crop yields. Some even criticize that it was inappropriate of the WFP to directly quote comments made by North Korean officials.

According to a source by the DailyNK, the cost of rice has remained at 800~900 won(US$0.25~0.29). Especially with the forthcoming cyclic hardships of spring harvest, these figures suggest that market costs are actually stabilizing.

Since the breakdown of the distribution system, many North Koreans have resorted to purchasing rice at the markets. In North Korea, the cost of rice is a good representation of market conditions, and considering that rice prices are showing constancy is evidence that there have not been drastic setbacks as a result of the rice distributions.

In comparison to last year where flooding made the food crisis chronic in various districts throughout North Korea, the situation hasn’t really deteriorated. Rather, the continuous inflow of food and hence trade from China has helped maintain market prices, North Korea-China tradesmen say.

Earlier this year, the Rural Development Administration in South Korea estimated North Korea’s food production to be 4.3mn tons. Evidence from a defector who once worked at North Korea’s food distribution ministry and past analysis on crop production suggests that North Korea would not have incurred a food crisis in the case it had produced more than 4mn tons of output.

Simply put, 4.3mn tons of production is at the least enough to maintain the lives of North Korean citizens. Undoubtedly, in a society like North Korea, this figure could initiate a food crisis and starvation in the lower class. However, inflating the shortage of food may only cause exhaustion of essential aid.

In addition, some argue that international organizations are actually provoking this vicious cycle in North Korea by decreasing the real amount of food produce.

Recently, North Korean analyst Marcus Noland published a report, ‘Famine in North Korea’ where he argued that about 50% of international food aid was being consumed by the military and, or the elite class.

In the report, he said, “The North Korean government consistently sought to frustrate transparent, effective humanitarian relief” and that, “Diversion is almost certainly occurring on a large scale, enough food to feed between 3 to 10 percent or more of the North Korean populace. Some of this aid is almost surely consumed by politically connected groups, including the military.”

Daily NK
Kim Min Se
3/28/2007

In the mid-80’s, “Lim Kug Jung” a novel written by the famous North Korean writer Hong Myung Hee was produced into a 5 part movie series in North Korea.

Since then, throwing stones has become a craze amongst North Korean men who are fascinated at a character “Bea Dol Suk”, who was proficient in throwing stones. During the peak, youths in their teens would imitate particular scenes from the movie, setting the trend of throwing stones.

Youths in North Korea enjoy throwing stones as a pastime, including the writer of this report.

As friends gathered at the riverside, they would search the ground for flat smooth stones and compete to see who could make the stone jump the longest. If any sparrows were found, men would aim for the bird, imitating the character Bae Dol Suk from the movie.

Movies in North Korea have an enormous influence over the people. Just like Lim Kug Jung was popular, the movie “Order-027” which portrayed the marksmanship of young North Koreans, also set a fad in North Korea.

‘Order-027’ was set in the Korean War and revolves around a North Korean battalion whom acted as spies after breaking into South Korea and their attempt to defect back to North Korea. The movie depicts an idealistic battalion full of strategic tactics and power, showcasing soldiers to be grand revolutionists.

After the movie was telecasted, North Korean teenagers throughout the nation, would copy the scenes from the movie “Order-027.” In particular, North Korean men were mesmerized by soldiers throwing daggers and forks in the movie.

It seems that trends set by movies or TV is similar in both the North and the South.

BBC
Greg Constantine
6/27/2003

In a basement office in Seoul, South Korea, Ms Kim stepped onto the stage and smiled to the audience.

She wore a light pink ballroom gown and lace gloves, and looked as glamorous as a 1950s Broadway star.

As the music began, a burst of feedback stormed out of the speakers.

But Ms Kim maintained her focus and never broke her smile.

She is a member of T’ongil Ye Sul Dan, a performing arts group made up of North Korean defectors.

The group consists of four singers, an accordionist, a playwright, a dancer, a classically trained pianist and an award-winning impersonator.

“Our goal is to help diminish the cultural gap between North and South Koreans,” said group member Choi Hee-soon.

“We need to educate people on the realities and the culture of North Korea, and promote cultural unification,” she said.

The group performs North and South Korean classics such as What is the Life?, Arirang, Touching Times and My Hometown.

 We want to share North Korean culture

Choi Hee-Soon, group member 

“In North Korea, there is no individual expression,” said Ms Choi, who studied music in the North Korean capital of Pyongyang before defecting to China.

“There is no such thing as private words or emotion. In North Korea, songs are shouted not sung. In South Korea, music is moving and touching. In North Korea we did not sing by ourselves for the pleasure of singing. We sang only for others,” she said.

“If I were to play in North Korea,” said Kim E-ok, the accordionist in the group, “it would be only to sing and to celebrate the birthdays of (former and current leaders ) Kim Il-sung or Kim Jong-il or for collectively-held events.”

“We would never be able to play at such a performance as this. But now we need to transcend the impression South Koreans have of us,” he said.

Since the Korean War in 1950, North and South have shared a dislocated Korean peninsula, while travelling on opposing political and social paths.

While South Korea has opened up to the world’s economies and diverse cultures, North Korea has closed itself off, leaving many South Koreans ignorant of contemporary North Korean culture.

This is largely due to the few opportunities citizens of North and South have for personal or cultural exchange.

According to the South Korean Ministry of Unification, fewer than 1,300 North and South Koreans have taken part in inter-Korean exchanges related to culture and art since 1989.

But with an increasing number of defectors entering South Korea each year – 1,140 arrived in 2002 – and with the will of individuals such as the members of T’ongil Ye Sul Dan, North Korean culture has more exposure.

“You will be tired before you reach one mile/ Walking over the peak at Arirang”, sang Ms Kim at T’ongil Ye Sul Dan’s performance.

The Arirang folk song has become an anthem for people who dream of unifying and reviving, not just a culture, but an entire people.

Hanging next to the stage was a banner bearing the symbol of the T’ongil Ye Sul Dan group. It combined a globe with a picture of a united Korean peninsula.

Straddling the Chinese border in the north of the peninsula rests Paekdu Mountain and Cheonji Lake, The Lake of Heaven.

More than 500 miles away, in the south of Korea, rests a lake on Halla Mountain on the island of Jeju.

“The purpose of T’ongil Ye Sul Dan,” said Ms Choi, “is to educate South Koreans so they are prepared for the time when the waters from the north and the waters from the south travel freely from one mountain to the other. We want to share North Korean culture.”

EU Business
3/27/2007
 
The European Union adopted sanctions against North Korea Tuesday, putting it in line with a UN Security Council resolution passed after the Stalinist state announced a nuclear test.

The sanctions include a ban on the sale or export of all materials that could be used in North Korea’s nuclear and ballistic missile programmes, or in the manufacture of weapons of mass destruction.

The EU also froze the assets abroad of some North Korean officials and banned exports to the country of luxury goods like caviar, truffles, high-quality wines and perfumes, and pure bred horses.

The bloc backed in November UN resolution 1718 but the application of sanctions required a formal EU decision, which was held up by a row between Britain and Spain over how Gibraltar would implement the measures.

The resolution was passed after Pyongyang announced on October 9 that it had carried out its first nuclear weapons test, triggering world-wide outrage.

KCNA
3/27/2007

The Central Physical Prospecting Group under the State Bureau of Natural Resources Development is successfully carrying on the survey of underground resources by advanced physical prospecting methods, thus greatly contributing to the economic progress of the country and the land construction. Recently, the prospecting group has introduced the advanced methods in the geological survey and developed modern facilities to explore a new phase for surveying the underground resources. 

The prospecting group, founded in January Juche 46 (1957), has already registered great achievements in the survey of underground resources and the land development. 

Over the last five decades, it has powerfully propelled the development of the national economy with its successful survey of valuable raw materials and fuel resources and greatly contributed to the geological development and the land development in the country with scientific geological survey and the confirmation of the geological foundation. 

It has found out many geological layers and systematized their formation periods and geological composition in a well-arranged way.

They, on the basis of their success, have discovered the law on the distribution of valuable minerals and surveyed and registered scores kinds of minerals, several hundreds of mineral deposits, thousands of mineral bodies and outcrops, and a thousand and several hundreds of heavy mineral streams and metal diffusion zones.

They have achieved many successes not only in the prospecting of abundant iron ore, coal resources and the new graphite deposits but also in the confirmation of the amounts for nonferrous metals, rare metallic mineral resources, nonmetallic mineral resources and magnesite mineral resources. 

The survey of groundwater, hot springs, subterranean heat and the foundations of many construction projects including the Kumsong dam and the Samsu Power Station dam are associated with the efforts of the Central Physical Prospecting Group.

KCNA
3/27/2007

A protocol of the fourth meeting of the Inter-governmental Committee for Cooperation in Trade, Economy and Science and Technology between the DPRK and Russia was signed in Moscow on Mar. 23. It was signed by Rim Kyong Man, minister of Foreign Trade who is chairman of the DPRK side to the committee, and Konstantin Pulikovski, director of the Supervision Bureau of Ecology, Engineering and Atomic Energy who is chairman of the Russian side to the committee.