North Korean Economy Watch

According to Yonhap:

The United Nations will provide US$2 million in aid to North Korea as part of its humanitarian efforts, a news report said Saturday.

The Office for the Coordination of Humanitarian Affairs, part of the U.N. Secretariat responsible for humanitarian actions, plans to deliver the financial support to its peer organizations working in the reclusive regime, according to a new report by Radio Free Asia (RFA).

The aid will be provided through the Central Emergency Response Fund (CERF), which has offered a total of $6.5 million to Pyongyang since 2011. The annual sum given to the communist state has varied each year: $5 million in 2011, $7 million in 2012 and $2.1 million in 2013.

U.N. offices based in the North decide on the spending through negotiations with the head of United Nations Development Programme stationed there. Other U.N. affiliated organizations that provide financial aid to the North include the World Food Plan, the Food and Agriculture Organization, the World Health Organization and the United Nations Children’s Fund.

The CERF plans to send $100 million to 12 countries around the world in this batch.

Syria will receive the highest amount of $30 million, followed by Lebanon with $18 million. North Korea will receive the least.

The Daily NK reports the following:

On January 27th, Radio Free Asia reported that over the past nine years, the UN has contributed 98.9 million USD in humanitarian assistance to North Korea.

The UN’s Office for the Coordination of Human Affairs (OCHA) reported the UN’s Central Emergency Response Fund (CERF) distributed 6.5 million USD overall through four different UN agencies last year, and 96.9 million USD in total between 2007 and 2014.

An additional 2 million USD for support to North Korea was contributed by the UN just in the past three months.

The UN’s Central Emergency Response Fund (CERF) began offering assistance in 2006 to those nations that were in drastic need of humanitarian support, but were not getting those needs filled by the international community.

Since that time, the 98.9 million USD sent to North Korea represents 7.4% of the UN’s overall international donations budget, which stands at approximately 1.34 billion USD.

The UN organizations currently providing assistance to North Korea include the World Food Program (WFP), the Food and Agriculture Program (FAO), the World Health Organization (WHO), the United Nations International Children’s Emergency Fund (UNICEF), and the United Nations Population Fund (UNFPA).

Read the full story here:
U.N. to provide N. Korea with US$2 mln aid
Yonhap
2015-1-24

According to KCNA (2015-1-20):

Briefing on Wonsan-Mt. Kumgang Int’l Tourist Zone to Be Given

Pyongyang, January 20 (KCNA) — A briefing on investment will be given in the DPRK in April-May to develop the Wonsan-Mt. Kumgang international tourist zone.

A number of overseas Koreans and foreign investors have expressed their deep interest in the project.

In this regard, KCNA had an interview with O Ung Gil, general manager of the Wonsan Area Development Corporation.

Noting that the participants in the briefing are scheduled to tour Wonsan City and Mt. Kumgang, the general manager said:

The Wonsan-Mt. Kumgang international tourist zone began to be developed under a June Juche 103 (2014) decree of the Presidium of the DPRK Supreme People’s Assembly.

The master plan for its development was completed, and a sectional planning and the infrastructure construction and repairing are now under way.

The development zone covers an area of 430 square kilometers, which involves Wonsan City and Popdong, Anbyon, Thongchon and Kosong counties and some parts of Kumgang County in Kangwon Province.

This area is famous for lots of historical relics, tourist resources and beauty spots, including Phyohun and Singye temples, lakes Sijung and Tongjong, Ullim Falls and Songdowon beach.

In particular, Mt. Kumgang is noted for its natural beauties of mountains and valleys and newly-built Songdowon International Children’s Camp and the Masikryong Ski Resort are enjoying great popularity.

We will carry on the development and tourism in the area at the same time through brisk exchange, and our general goal is to turn the zone into a world-level one with high service standard and capability.

The Choson Sinbo announced the opening of the Hwanggumbol Shop (황금벌상점) in Pyongyang last December. According to the pro-DPRK outlet, it is open from 6am to midnight.

Choson Exchange chimed in with additional information:

[Hwanggumbol Trading Corporation] managers have taken part in multiple CE workshops and have taken part in mind-mapping and team-building exercises, as well as lean startup methodology and customer needs strategies. It is fitting that the article speaks of “responding to people’s demands”, though it is then said that “the idea of loving people”, rather than “responding to their demands” is the concept they use. Its gratifying to see that some of the concepts we’ve covered in workshops are packed up in PR-conscious statements like these.

On a Women in Business workshop in Singapore last year, the businesswomen were obsessed with how retail worked elsewhere – Geoffrey recounts here how it took ages to drag them through a mall, not because they were shopping, but because they were taking notes on everything. They were extremely curious about how customers could be attracted, engaged and kept.

Back in Pyongyang, the manager of Hwanggumbol, Mr. Ryang Sung Jin, mentions that they are “prioritizing benefits for the people and their business’ goal is people’s convenience”. Clearly, these guys have found their angle, differentiating themselves quite dramatically from the competition.

NK News did a follow-up as well that was re-posted to The Guardian. The article translated much of the Choson Sinbo material that is behind a registration-wall:

The stores are located in residential streets to let the people buy groceries at their convenience. To guarantee low prices, Hwanggumbol Trading Corporation practices bulk purchasing from various producers around the country and consistently accelerates circulation of purchases and sales, it said. According to the article, some of its imported goods also enjoy tariff benefits.

However, the store’s management has kept its distance from capitalist principles, describing its operation as the “realisation of the Party’s love for the people,” drawing a line between its own interests and those of capitalist corporations.

“To put people’s interest above anything and to serve the people’s convenience are the aims of our service,” Ryang Sung-jin, the president of Hwanggumbol Trading Corporation, was quoted as saying.

Hwanggumbol Store currently runs three stores in Pyongyang and plans to expand its number of stores to 20 by spring 2015. The stores are also expanding their range of services and will be providing door-to-door delivery and sales, as well as ticketing reservations for trains and planes, the report said.

“We also know of people trying to start a chain of stores as well as dry-cleaning and delivery services in Pyongyang,” Abrahamian said. “There is definitely a generation of business people thinking creatively, asking ‘why not?’ when it comes to new ways of doing things.”

UPDATE 2 (2015-9-24): For what it is worth, I do not believe much of Shin’s story (either of the three versions that have now been released). I believe he continues to deceive us on significant aspects of his history.

UPDATE 1 (2015-9-24): The latest version of Escape from Camp 14 has been released. Mr Harden has added a new forward to the book, but does not appear to have altered any of the passages in the text itself despite the fact that Shin has admitted that they contain inaccurate information. Since the book’s new forward references me, I thought I should post the information I provided Mr. Harden here for public scrutiny.

First of all, here are the maps of Kaechon and Pukchang that Mr. Harden references in the book’s new forward. This map was published in a North Korean atlas released in 1978:

This map shows that the area that came to be known as Camp 18, Pongchang-ri (봉창리), is clearly inside the borders of Kaechon County in 1978.

Here are the borders of Camp 18 overlapped on the map of 1978 Kaechon:

Because Pongchang-ri is inside Kaechon and is connected by rail to Camp 14, I stated that it is “plausible” that the area that came to be known as Camp 18 was actually part of Camp 14 in 1978.

According to the North Korean atlas Samchonri published by the Pyongyang Informatics Center, “in February 1984, Pongchang-ri of Kaechon County was incorporated into Pukchang County.” I told Mr. Harden that is was “plausible” that this is when Camp 18 was separated from Camp 14, since the two camps would now be housed in different counties. Shin claimed that Camp 18 was separated from Camp 14 in Kaechon sometime around 1980 for which I have no corroborating evidence.

Here is a North Korean atlas map of Pukchang published in 1997 which indicates that Pongchang-ri (봉창리, Camp  18) is part of Pukchang County:

And here is the same map with the border of Camp 18 outlined on it:

So North Korean sources indicate that the area that came to be known as Camp 18 was part of the same county as Camp 14 (Kaechon), until it was transferred to Pukchang in 1984.

ORIGINAL POST (2015-1-18): On October 26, 2014, Uriminzokkiri uploaded two videos to YouTube to discredit human rights activist Shin Dong-hyuk. Video one is here. Video two is here.

Below are some notes I took from the videos (back in October). I shared them with a couple of friends, but never published them. Point number 4 seems most relevant to the news this weekend, that Shin spent time in Camp 18.

1. Shin’s father, Shin Kyong-sop (신경섭?) claims he was born in Ryongbuk-ri, Mundok County: 룡북리, 39.498574°, 125.455410°. However, this ri was made part of Chongnam District. Chongnam District was initially carved out of Mundok County in 1980. In 1998 it was abolished and reincorporated into Mundok County. However, in 1999 Chongnam District was re-established with Ryongbuk-ri and Sin-ri of Mundok County. Either Shin’s father did not know that his home village had been moved into a new jurisdiction [because he has been incarcerated and not updated], or he is reporting that the ri was part of Mundok when he was born (it was). Ryongbuk-ri is appx 67km from Tukjang (as the crow flies), where Shin’s father lives now (according to the videos). More on Tukjang below.

2. The video asserts that Shin was born in 1980 (1:01, in video 1) and that his original name is Shin In-gun (신인근). Shin acknowledged this name, I am unsure about the birth year.

3. Shin claims he is from Oedong-ri (외동리, 39.575453°, 126.071407°) which is inside [officially unacknowledged] Camp 14. (1:37, Video 1). Camp boundaries in yellow.

4. Shin’s father claims that they did not live in a political prison camp [Camp 14] (1:52, Video 1), but in Pongchang-ri (봉창리, 39.562650°, 126.077345°). Pongchang-ri is on the opposite side of the Taedong River from Oedong-ri in Camp 14, where Shin claims he is from. Pongchang-ri became part of Pukchang County in February 1984. Before that, Pongchang-ri was officially part of Kaechon County (where Camp 14 is located).

However more importantly, Pongchang-ri is inside the former Camp 18. Shin’s father offers a photo he claims is of a six-year-old Shin in Pongchang-ri. The year would be 1986, but Camp 18 was not closed until the 2000s. So revealing that Shin lived in Pongchang-ri as a child is admitting he was in a prison camp (Camp 18)…just not the one he claims to have been from (Camp 14). So now the North Koreans and Shin can at least agree he was in Camp 18.

I have posted 2010 KCTV footage of Pongchang-ri (coal mine) here which matches the satellite imagery of the site.

5. Dad says Shin went to primary school in Pongchang and secondary school in Tukjang (2:07, Video 1). But graduated from a different secondary school (“Suwon Secondary School”) and got a job in the “Suwon Pit”.  [How common is it for North Korean schoolchildren to change secondary schools? Under what conditions does this happen?]  Mr. Song Yoon-bok, chief secretary of “No Fence in North Korea,” has told me that the father did not say “Suwon” but rather “Suan,” and Uriminzokkiri misspelled it in English on the videos. “Suan” is a small area of eastern Pongchang-ri, and “Several former Camp 18 survivors now living in Seoul certainly remember the name and location…in Camp 18.” I cannot find this area on any maps, but a defector named Kim Hye-Suk identified it in this publication.

After the Suwon/Suan pit, Shin’s father claims he left home and moved to Puhung Mine in Unsan (2:53, Video 1). However when Shin was 12, (December 1992), Puhung Workers` District was incorporated into Sunchon City. It is still in Sunchon City. So his father is incorrect about the county/city that his son’s mine was in (unless Shin started working there before he was 12).

Shin’s father also says that most of Shin’s injuries come from mining accidents (3:23, Video 1). As of 2015-1-17, Shin still maintains his injuries are from torture.

Also, the father does not seem surprised when he is asked about family members being “raped to death” (4:05) [Like he does when he is asked about “reward Marriage”]. I believe that even most North Koreans would have a more visceral reaction to that question. Implies more coaching.

6. According to the video, Shin’s parents live in Kalgol-dong No. 146 of Tukjang Workers’ District. 39.577267°, 126.225550°. The North Korean video footage matches satellite imagery of Tukjang Workers’ District, but not of Kalgol-dong (3:20, Video 1). Tukjang Workers’ District lies just outside boundaries of former Camp 18.

  

Satellite imagery of the east coast of Korea dated 2014-7-4 has recently been uploaded to Google Earth. Among the more noticeable items is that Kim Jong-un had a new runway built at his family compound in Wonsan right next to his private train station.

In the top picture you can see a small helipad (where Dennis Rodman landed) which was torn down to make way for a runway,  approximately 560m in length. The new runway should be able to accommodate small aircraft and helicopters. Although Kim Jong-il favored trains, the North Korean media has shown Kim Jong-un traveling by car, boat (military and yacht), and plane (even sort of flying one).

Last summer Kim’s guidance tour schedule seemed to suggest he was spending much of the time in Wonsan. With a runway like this, he will presumably be able to get around the country more easily from his “summer home”. Maybe in future satellite imagery we will get a view of his personal craft on the runway!

This was picked up by Radio Free Asia.

Pictured above (Google Earth: 2014-8-6): New apartment housing in Chaeha-dong, Sinuiju.

According to the Daily NK:

The real estate market in a strategic location of North Korea is heating up, with a recently new venture seeing apartment units being traded for up to 30,000 USD , the Daily NK has learned.

“Real estate development in Sinuiju City has been pretty active since two years ago,” a source based in the province told the Daily NK on Tuesday. “Starting last July or August, construction for high-rises has been underway in the Chaeha-dong neighborhood.”

The apartments in Chaeha-dong are being built on joint investments from foreign currency-earning enterprises and the donju [the new affluent middle class], according to the source. To clear the way for the lucrative project, Chaeha Market, the largest distribution market in the city, has been relocated to park grounds located in Namsang-dong.

While private property purchases remain illegal in North Korea, beleaguered by economic hardship, the state dolls out tacit consent to these endeavors, encouraging increasingly more illicit trade within the burgeoning real estate market.

In areas like Sinuiju, a main portal to and from China, there is no shortage of solvent buyers eager and willing to pay for property in the area, knowing its value will only continue to increase. The apartments taking over the Chaeha Market grounds are modern buildings of roughly 100 square meters, constructed from materials exclusively imported from China. Situated in a prime location near Sinuiju Customs House, the complex offers convenient transportation options compared to other locations, warranting the relative high prices, according to the source.

Units in the complex come in three varieties, depending on their stage of completion: “If only the framework of the apartment is put up, it is sold for 20,000 USD; if interior construction is completed, it trades for 25,000 USD; and if decorative touches are added, it fetches 30,000 USD,” she explained. According to exchange rates in North Korean markets on the 7th, 1 USD trades for roughly 8,000 KPW.

Labor for the cause consists of workers from state-run enterprises and “8.3 Workers” with special expertise. The term, “8.3 Workers,” stems from a system where workers earn money outside their state-mandated workplaces and present de facto tax payments back to their employers but also keep a portion of the profits. In this case, the “8.3 Workers” are sectioned off into “8.3 Units” of five to eight people, tasked with plastering or putting down tiles in one unit within the residential complex.

Regarding compensation for their work on the new building, “8.3 Groups” reach an agreement with the construction company, affiliated with a foreign-currency earning enterprise, on rates and then work around the clock once ground breaks on the project. “Time equals money,” as the source said, adding that one worker is estimated to receive roughly 30,000 [3.75 USd] to 50,000 KPW [6.25 USD] a day of work and is guaranteed rations and meals.

For investors, however, the project yields far more significant returns. “If an individual invests in one of these companies’ real estate construction project, the profits are divided up 3:7 and the investor receives a 30 percent share from sales of the completed property,” the source explained.

Donju invest in housing construction projects with these firms because they are unable to receive legal permission from the Ministry of Construction to engage in such personal investments. Although donju involvement in these undertakings has been known to sometimes take the form of loans offered to construction firms at lofty interest rates, this method proves less popular for the simple fact that there is less guarantee for them to receive what they are owed; needless to say, no laws exist to protect these–by official North Korean law–illicit transactions.

This fact propels most of the donju to invest in the permanence and relative stability property offers, all while skimming 30 percent of the overall profits from the sale; it is also why the source speculated this form of investment to continue to gain traction.

She added that demand for news persists on with unhindered growth. Party cadres and the donju continue to purchase completed units; in fact, many even buying two or three units using their relatives’ names to ensure future usage.

Meanwhile, residents of Chaeha-dong in Sinuiju are currently residing at the Sinuiju Medical University dorms or at homes of their relatives. The source reported that these temporarily displaced persons will be moving in, free of charge, to the newly built apartments following their completion. She noted, however, that this contingent forms a disproportionate percentage to those who have purchased units within the complex.

Read the full story here:
Real Estate Market Booming in Sinuiju
Daily NK
Seol Song Ah
2015-01-14

According to Yonhap:

More than 90 percent of North Korea’s exports were bound for China in 2013, a report showed Wednesday, indicating that Pyongyang’s trade dependence on its main ally has deepened significantly over the past decade.

According to the report compiled by the Beijing office of the Korea International Trade Association, North Korea exported 90.6 percent of its products to China in 2013, much higher than the 50.9 percent tallied in 2003.

North Korea’s exports to China were estimated at US$400 million in 2003, but they jumped by more than sixfold to $2.9 billion in 2013, the report said.

Despite the increase, North Korean products accounted for only a small portion of China’s imports. The ratio of North Korean products in China’s total imports inched up from 0.1 percent to 0.15 percent over the measured period.

North Korea’s investment in China grew 12.6 percent to $2.68 million, most of which consisted of small-sized spending on shops and stores, the report showed.

China’s investment in North Korea, meanwhile, expanded sharply from $1.12 million to $86.2 million over the same period.

The number of North Koreans visiting China also surged 162.5 percent from 80,000 in 2003 to 210,000 in 2013. The report said that a large number of the people seemed to have visited the neighboring country in search of work.

Additional notes:

1. It is worth noting that the figure “90%” is slightly inflated. South Koreans do not count the DPRK’s trade with them as international trade–but rather “inter-Korean trade”. If you include South Korean trade in these data, the % of total trade conducted with China drops a small amount.

2. More 2013 trade statistics can be found here.

3. South Korean trade with the DPRK dropped from $1.976 billion in 2012 to approximately $1.1 billion in  2013 owing to a temporary closure of the Kaesong Industrial Complex. It will be interesting to see how the 2014 numbers turn out.

Read the full story here:
N. Korea’s trade dependence on China deepens: report
Yonhap
2015-1-14

A friend passes along some pictures (taken in 2014) of Pyongyang haircuts and prices.

Men:

Here is what the chart says:

Haircut for Men Price Table
Approval “No.4540” on November 11, 2011, by the National Pricing Bureau (State Price Commission)

Cut (long hair)–25 won
*Vigor style cut–50 won
Dry–10 won
Shaving–10 won
Self-shaving–5 won
Curling hair with heated tongs–15 won
Dyeing–50 won

*The “Vigor Style cut (Pae-Ki Mo-Ri)” resembles Kim Jong-un’s hair style

Women:

Here is what the chart says:

Haircut for Women Price Table
Approval “No.4540” on November 11, 2010, by the National Pricing Bureau (State Price Commission)

Permanent (long hair)–100 won
Permanent (short hair)–70 won
Permanent (bangs)–45 won
Hair cut–20 won
Hair cut, Permanent, Hair cut, Dry–110 won
Set (long hair)–30 won
Set (short hair)–20 won
Dry–20 won
Brush (long hair)–20 won
Brush (short hair)–20 won

According to the Pyongyang Times (2015-1-6):

The development of EDZs (economic development zones) is going full steam ahead in the country after the publication of decrees on the establishment of economic development zones in provinces by the Presidium of the Supreme People’s Assembly on November 21 2013 and July 23 2014.

EDZ is a special economic zone in which preferential treatment is given to economic activities pursuant to the DPRK law on economic development zones.

After the publication of the decrees, provincial people’s committees began to work out master plans for economic development zones and create environment for investment.

As a result, master plans for such development zones have been approved by provincial people’s assemblies including the Amnokgang economic development zone in North Phyongan Province, Manpho economic and Wiwon industrial development zones in Jagang Province, Sinphyong tourism development and Songnim export processing zones in North Hwanghae Province, Hyondong industrial development zone in Kangwon Province, Hungnam industrial and Pukchong agricultural development zones in South Hamgyong Province, Chongjin economic, Orang agricultural and Onsong island tourism development zones in North Hamgyong Province, Hyesan economic development zone in Ryanggang Province, Waudo export processing zone in Nampho City, and Chongnam industrial and Sukchon agricultural development zones in South Phyongan Province.

Master plans for other development zones are being worked out at the final stage.

With master development plans approved, provincial people’s committees are now working to attract more foreign investors and developing businesses to cooperate with their projects.

In October last year the Russian minister of Development of Far East visited the Chongjin EDZ together with Russian businesspersons to check the state of development and discuss matters of investment and development with officials concerned of the North Hamgyong Provincial People’s Committee.

Cooperation is being stepped up with Chinese businesses in the Onsong island tourism development zone in the wake of the opening ceremony of tourism in the Chongsu tourism development zone in Sakju County, North Phyongan Province in October last year.

Governments of some Southeast Asian nations are showing particular interest in the investment in the Sukchon agricultural development zone in South Phyongan Province.

Preparations are expected to be made for receiving investment in the development zones and the EDZs offer preferential treatment to developing businesses and investors with independence in management.

Management agencies are being set up in EDZs, experts needed for the development of these areas trained in universities in Pyongyang and provinces and technical personnel dispatched to other countries for practice.

Brisk activities for the development of EDZs in provinces across the country are attracting growing interest of experts and investors in many countries of the world, especially Asia-Pacific and Southeast Asian nations.

Martyn Williams has posted the best video of it (with English subtitles):

Here is coverage of the speech in the North Korean media (KCNA):

1. Kim Jong Un Makes New Year Address

2. Kim Jong Un Refers to Achievements Made by DPRK Last Year

3. Kim Jong Un Underlines Need to Consolidate Country’s Might as Socialist Political and Ideological Power

4. Kim Jong Un Calls for Fresh Turn in Building Revolutionary Armed Forces and Enhancing Defence Capability

5. Kim Jong Un Advances Tasks to Effect Upswing in Building Socialist Economic Giant and Civilized Nation

6. Kim Jong Un Set Forth Ways of Carrying out This Year’s Tasks

7. Kim Jong Un Deals with Issue of National Reunification

8. Kim Jong Un Deals with Issue of Foreign Relations

9. New Year Address Having Public Response

10. Workers and Farmers Meet to Vow to Implement Their New Year Tasks

Here is coverage of the speech in the international media:

1. N. Korean leader’s speech ‘meaningful’: Seoul (Yonhap)

2. N. Korean leader’s speech arouses cautious optimism (Korea Herald)

3. Kim Jong-un says North Korea is open to ‘highest-level’ talks with South (Guardian)

4. Kim Jong Un Makes Apparent Summit Offer to South Korea (Wall Street Journal)

5. New Year’s Address Reveals a Nervous Leader (Daily NK)

6. Kim’s New Year’s speech reveals economic priorities (Lankov/NK News)

7. Jumping to Conclusions…Again (Klingner/38 North)

8. What’s New in Kim Jong Un’s New Year’s Speech (38 North)

9. Kim Jong Un’s New Year Speech: The Prospects for the 2015 Economic Policy (IFES)

10. Pyongyang’s ‘Year in Review’ Package Emphasizes Kim (Wall Street Journal)