North Korean Economy Watch

From the Asia Times:
Business as usual across the Yalu
10/17/2006
Ting-I Tsai

Pyongyang’s proclaimed successful nuclear test, which has sparked anger and fear around the world and prompted passage of more UN sanctions, is not deterring Chinese business people living on the border from doing business with North Korea. They are confident that Beijing will not enforce really harsh punishments.

“For North Korea, reform and development is still its goal. It is just a matter of time. We are still keen on doing business there,” said Zeng Chengbiao, chairman of the Zhongxu Group which is based in Shenyang, capital of Liaoning province. Zeng has been planning to operate a department store in Pyongyang and is also interested in investing in mining there. Zeng said his company is preparing to announce a major investment after the Chinese Lunar New Year in February.

Zeng is a typical example of the hundreds of Chinese business people who remain enthusiastic about trading with or investing in North Korea, despite the international furor and unconfirmed reports about Pyongyang’s running out of electricity and food while major players in the Security Council debate punishments for North Korea’s nuclear test.

A sense of normality in Pyongyang and continuing routine bilateral interactions with China could be the reasons for these businessmen’s calm. “Everything is the same as usual. Lots of my clients are in town for business [after the test’s announcement],” said an anonymous Beijing-based trader, who has dealt with North Koreans for more than a decade.

In the Chinese city of Dandong on the North Korean border, and even in Pyongyang, Chinese businesspeople and citizens all claim confidence. “I checked with my friends at the customs, and they said that goods are in and out as usual,” said Liu Yen, a church worker from Dandong.

In Pyongyang, Chinese traders are still answering calls made to their North Korean 10-digit mobile phones, hoping to find more sources for soybean oil, sugar, monosodium glutamate and flour. Michel Ji, representative of Jilin Cereals, Oil, Foodstuffs, Import and Export Group in Pyongyang, who has been traveling back and forth between the two nations for four years, said that his company has imported up to10 million tons of sugar, MSG and oil from North Korea. Prices of products from China, he said, are still too high.

“There will definitely be sanctions, but none of them will affect people’s livelihoods,” Ji said.

Since Pyongyang initiated economic reforms in July 2002, Chinese businessmen have crowded into North Korea – perhaps the last virgin territory for capitalism. China’s non-financial direct investment in North Korea was about US$14.37 million in 2005 and $14.1 million in 2004, according to the Chinese Commerce Ministry.

Bilateral trade reached almost $1.4 billion in 2004, and jumped to about $1.6 billion in 2005, while during the first eight months of 2006 it hit $1 billion.

Some 40 Chinese companies from Liaoning province alone have just returned from North Korea after attending the second Pyongyang Autumn International Commercial Exhibition. A Pyongyang-Tianjin joint-venture bicycle manufacturing company, which reportedly produces 300,000 bicycles annually, dominates North Korean’s bicycle market, while more companies are waiting for the two governments’ approvals for investing in the slowly opening nation.

Shortly after Pyongyang’s announcement of its nuclear test, Tokyo declared a total ban on North Korean imports and prohibited North Korean-flagged ships from entering Japanese ports. North Korean nationals are also prohibited from entering Japan, with few exceptions.

Over the weekend, the Security Council approved the US-sponsored resolution for imposing punishing sanctions against North Korea. The sanctions demand that the North abandon its nuclear weapons program and orders all countries to prevent North Korea from importing or exporting any material for weapons of mass destruction or ballistic missiles. It orders nations to freeze assets of people or businesses connected to these programs and bans individuals from traveling there.

Furthermore, the resolution calls on all countries to inspect cargo leaving and arriving in North Korea to prevent any illegal trafficking in unconventional weapons or ballistic missiles. The final draft was softened from language authorizing searches, but was still unacceptable to China – the North’s closest ally – which said it would not carry out any searches.

“China will not go too far,” predicted Cui Yingjiu, a Beijing-based retired academic who was Kim Jong-il’s classmate during his studies at Pyongyang’s Kim Il-sung University in the early 1960s. Aside from concern about China’s national interests, analysts in Beijing also doubt the significance of any harsh punishment, as they believe the North Korean economy is relatively independent.

“They can still live by simply eating grass. What would these economic sanctions really do?” said Niu Jun, professor at the Peking University’s School of International Relations, who visited North Korea in July.

Shortly after the UN resolution passed, US ambassador to the UN John Bolton told reporters that the next step was to start work on implementing the resolution. But none of the current moves are scaring away Chinese businessmen.

This is an “after the explosion” satellite image taken from The Institute for Science and International Security (ISIS).

Click here to download it onto your own Google Earth.

From the Choson Ilbo:
Chinese Banks Restricting Cash Flow to N.Korea
10/17/2006

Major Chinese banks are currently stopping or restricting remittances or payments to North Korea after the North’s announcement of what it claims was a nuclear test, it emerged Monday. Chinese banks in Dandong, where cross-border trade is concentrated, recently started restricting banking transactions with North Korea, an official with the South Korean Embassy in China said. The restrictions, in fact, started in March this year, when the U.S. imposed financial sanctions on Macau’s Banco Delta Asia after designating it Pyongyang’s “primary money laundering concern.”

But not all Chinese banks are doing so, each bank and branch having its own policy. Sources say it does not look as if the Chinese government is ordering them to do so; rather banks have started doing so on their own. Rumor is spreading among traders doing business with North Korea in China that all financial accounts with North Korea including those by North Korean traders in China could be frozen.

North Korean workers in China are leaving the country in droves after North’s claimed nuclear test. A businessman operating a sewing factory in Shenyang, China, said, “Some 100 North Korean workers in my factory returned home three days ago because the Chinese authorities didn’t renew their work permit.” Banks in Dandong and Shenyang, where many businesses trading with North Korea have accounts, are seeing an increasing number of them not receive payments for exports to the North. “Since the U.S. froze North Korea’s accounts in the Macau bank, it takes three or four times longer for us to get paid for imports to the North, and this is hurting us badly,” a businessman trading with the North said. “We can’t do business with the North any longer.”

As official trade between the North and China shrinks, smuggling between the two countries is thriving, local people say. An ethnic Korean in Dandong said if a North Korean vessel ships 1,000 tons of iron ore to a port here, it officially reports only 100 ton of them and smuggles the rest. Smuggling covers almost everything from iron ore to bronze, TVs, computers, petrochemical products, antiques and maritime products. That is why many feel how determined the Chinese authorities are in cracking down on smuggling will determine the success of sanctions against the North. Locals say they have not heard of any Chinese crackdown on smuggling to and from the North, nor do they expect one.

China clearly stated its opposition against military action in the UN resolution against the North over its claimed nuclear test, calling for “an appropriate level” of sanctions. Beijing says the ultimate goal should be getting the North to return to the six-party talks on its nuclear program, not forcing regime collapse. Some expect China to reduce, rather than stop, its supply of oil to the North.

Meanwhile, China is preparing for an emergency in North Korea. It is setting up barbed-wire fences along the border near the Yalu and Tumen rivers where the military units of the provinces there took charge of guarding the area three years ago. The barbed-wire fences are being extended near Changbai County and the Tumen River. A Chinese official said the fences “were put up after consultations with the North because we needed to draw up a clear border between us and North Korea because of the narrowness of the river or newly built roads.” But some say the main goal is to prevent a mass exodus of North Koreans when the regime falls apart. Experts say another reason China is building up its military strength and carrying out more military exercises near the border with the North is to prepare for regime collapse in the north. The new 60-km long road along the Yalu River is also said to serve strategic military purposes.

BBC
10/16/2006

Australia is to ban North Korean ships from entering its ports in response to its claimed nuclear bomb test, the foreign minister has announced.

Alexander Downer told Parliament the move would help Australia make a “quite clear contribution” to other sanctions agreed by the UN on Saturday.

The UN resolution imposes both weapons and financial sanctions on the North, but despite the unanimous vote, disagreements have emerged between the members of the council.

Beijing has indicated that it still has reservations about carrying out the extensive cargo inspections that Washington says are called for in the resolution.

Ship inspections

Australia is one of the few countries to have diplomatic relations with North Korea, but its trade ties are limited. In 2005, imports amounted to A$16m ($12m).

“If we are to ban North Korean vessels from visiting Australian ports then I think that will help Australia make a quite clear contribution to the United Nations sanctions regime.”

Japan, which banned North Korean ships from its ports last week, is looking at whether it can provide logistical support for US vessels if they start trying to inspect cargo ships going to or from North Korea.

The restrictions imposed by Japan’s pacifist constitution may require the government to pass new laws to allow that to happen.

In a further diplomatic drive, US Secretary of State Condoleezza Rice is due to arrive in Japan on Wednesday.

She reportedly intends to reassure the country that Washington will provide adequate protection in the event that North Korea obtains a viable nuclear weapon – a message she will later take to South Korea.

‘Heavy responsibility’

The UN resolution against North Korea was agreed after lengthy negotiations.

It imposes tough weapons restrictions, targets luxury goods and imposes a travel ban on some North Korean officials.

It also allows the inspection of cargo vessels going in and out of North Korea for banned materials, although the resolution was weakened slightly at China and Russia’s insistence, to make this provision less mandatory.

Beijing’s UN envoy, Wang Guangya, said immediately after the vote that China urged countries to “refrain from taking any provocative steps that may intensify the tension”.

Both Russia and China are concerned that inspections could spark naval confrontations with North Korean boats.

But the US ambassador to the UN, John Bolton, told American television that China had voted for the sanctions and therefore “China itself now has an obligation to make sure that it complies.”

From Reuters:
North Korea’s Kim Jong-il can withstand sanctions
10/16/2006
Jonathan Thatcher

North Korea’s elite, from one of the world’s poorest countries, may soon have trouble importing the fine cognac they reportedly favor but they are unlikely to buckle under new U.N. sanctions, analysts said on Monday.

Longer term, the resolution unanimously agreed by the U.N. Security Council on Saturday will pinch an already damaged economy but it is the masses who will likely be most hurt.

“The regime has shown it doesn’t mind if its people feel the pain,” said one diplomat in Seoul of the North Korean government, which is routinely accused of human rights abuses and up to 10 percent of whose population died during famine in the 1990s.

Under the Security Council resolution over Pyongyang’s reported nuclear test, nations can stop cargo going to and from North Korea to check for weapons of mass destruction.

It blocks trade with the secretive country in dangerous weapons, heavy conventional weapons and luxury goods. And it asks governments to freeze funds connected with its WMD program.

“The practical effect is questionable,” said Professor Nam Sung-wook of Korea University, an expert on North Korea.

“They (the countries supporting sanctions) are in bed together but they’re all dreaming different dreams,” he said.

Analysts said that the way China — the nearest the isolated North has to an ally — interprets the sanctions will be very different from Japan, which has demanded tough action.

In an interview with Reuters at the weekend, former President Kim Dae-jung and architect of        South Korea’s policy of engagement with the North, said the sanctions would have little effect.

“North Korea is already very familiar with poverty. The country can also get support, at least in order to survive, from countries such as China.”

The U.N. World Food Program’s Asia regional director, Anthony Banbury, said his concern was that the overall environment, including action by the North, was making it more difficult to reach people just as aid needs rise.

“I can guarantee you that right now there are severe food shortages. There is no question that there are large numbers of North Koreans … who are facing quite severe food problems,” he said by telephone from Bangkok.

RISK OF DANGEROUS VACUUM

The diplomat said no one, least of all China or South Korea, wanted a sudden collapse of North Korea’s government that could create an even more dangerous vacuum in a country with one of the world’s largest standing armies.

“In the short-run, I don’t think the sanctions will have a significant impact. They’ll have political and symbolic implications,” said Park Young-ho, a senior researcher at the Korea Institute for National Unification.

But over time there will be a negative impact on the economy and that, Park said, could put North Korean leader Kim Jong-il and his government under greater pressure to rattle the world with another test.

Peter Beck, Korea analyst in Seoul with the International Crisis Group, said he doubted the U.N. resolution would have any noticeable impact other than to give the North an excuse to ignore the        United Nations and conduct a second nuclear test.

“I do not think it will have any impact on putting pressure on the regime or increasing the prospects for regime change,” Beck said.

From the Associated Press:
China erects barbed wire fence along border with North Korea
10/16/2006
Alexa Olesen
Jae-soon Chang

China has been building a massive barbed wire and concrete fence along parts of its border with North Korea in the most visible sign of Beijing’s strained ties with its once-cozy communist neighbor.
 
Scores of soldiers have descended on farmland near the border-marking Yalu River to erect concrete barriers 2.5 to 4 meters (8 to 15 feet) tall and string barbed wire between them, farmers and visitors to the area said.
 
Last week, they reached Hushan, a collection of villages 20 kilometers (12 miles) inland from the border port of Dandong.
 
“About 100 People’s Liberation Army soldiers in camouflage started building the fence four days ago and finished it yesterday,” said a farmer, who only gave his surname, Ai. “I assume it was built to prevent smuggling and illegal crossing.”
 
Though the fence-building appears to have picked up in the days following North Korea’s claimed nuclear test last week, experts said the project was approved in 2003. Experts and a local Hushan official, who requested anonymity because of the project’s sensitivity, said the military was in charge of the building.
 
A Defense Ministry spokesman, Ye Xing, declined comment, saying he was not authorized to release information on border security.
 
The fence marks a noticeable change in China’s approach to its North Korean neighbor. In the decades following their shared fight against U.S.-led U.N. forces in the Korean War, China left their border lightly guarded, deploying most of its forces in the northeast toward its enemy, the Soviet Union.
 
But the border became a security concern for Beijing in the past decade, as North Korea’s economy collapsed and social order crumbled in some places. Tens of thousands of refugees began trickling across the border into northeast China, fording the Yalu and Tumen rivers or walking across the ice in winter.
 
Professor Kim Woo-jun at the Institute of East and West Studies in Seoul said China built wire fences on major defection routes along the Tumen River in a project that began in 2003, and since September this year, China has been building wire fences along the Yalu River.
 
“The move is mainly aimed at North Korean defectors,” Kim said. “As the U.N. sanctions are enforced … the number of defectors are likely to increase as the regime can’t take care of its people … I think the wire fence work will likely go on to control this.”
 
But he said he also believes that Beijing wants to firmly mark its border with the North along the two rivers.
 
Kim said China and the North drew their border in a secret treaty. That treaty wasn’t reported to the United Nations and therefore does not apply to a third country, like South Korea. China is concerned that South Korea may claim a different border after absorbing or unifying with the North.
 
Reporters who visited the border area in the past week saw about 500 meters (1,640 feet) of newly erected barbed wire fence north of Dandong, mainly along river banks and occasionally broken up by mountain areas or military guard posts.
 
A duck farmer in Hushan, who would only give his surname Han, said that soldiers began putting up the fence near his farm last Monday afternoon — the same day that North Korea claims to have carried out an underground nuclear test.

Korea Times
Andrei Lankov
10/15/2006

What is happening to the Korean Workers’ Party, once the locus of all power in North Korea? What will be its fate? I suspect that nowadays these questions are asked not only by Pyongyang watchers, but also by many North Koreans. Indeed, something strange has happened to North Korea’s ruling party. Since the inception of the DPRK in 1948, the Korean Workers’ Party has remained the core of its political system. It was a typical specimen of the Stalinist-type Communist Party: highly centralized and subordinated to the will of the god-like “leader”.

On paper, the KWP appears to be quite democratic: for example, its committees are supposedly elected by the respective assemblies of Party representatives. However, quasi-democratic features and regulations bear no relation to the harsh realities. The “elections” meant an obligatory vote in support of the pre-arranged list of candidates, and for decades no party member has been sufficiently insane to use his presumed right to criticize, say, Kim Il Sung or Kim Jong Il.

Nonetheless, the Leninist Party has always been a rather rococo structure grafted onto an otherwise rational design of a Stalinist state. Its functions were not well defined, its interaction with more conventional state bodies was full of controversies, and many of its quasi-democratic conventions were expensive and patently hypocritical. It acted as a sort of central command network which ensured that all parts of the state mechanism were working according to the wish of the leader and/or ruling oligarchy. But it was not very rational, one has to admit.

In the last years of Kim Il Sung’s rule it became clear that the Great Leader was ready to jettison some of the traditions related to the Party. On paper, the KWP was supposed to hold a Congress every five years. In reality, there were only two KWP Congresses convened in the last 40 years: in 1970 and 1980. Kim Il Sung was running the country directly, using the Party bureaucracy as but one of many available tools.

When Kim Jong Il assumed supreme power after his father’s death, this move from the old tradition became more discernible. It was presumed that Kim Jong Il’s elevation would be formally ratified by a large and pompous party convention. It did not happen: Kim Jong Il was elevated through a chain of local party conferences. The meetings of the Central Committee, a convocation of some 230 Party heavyweights, also became rare and irregular under his rule. It appears that since 1993 this once powerful body has met only once, in October 1997, to confirm Kim Jong Il’s elevation to the position of leader of the country.

In recent years celebrations of Party history have been scaled down, and even October 10, the KWP Foundation Day – one of the nation’s major holidays – is no longer marked by pompous ceremonies.

Well, if the Party is going to be downgraded as the major state management tool, what will replace it? The answer is simple: the armed forces. According to official North Korean publications, as early as New Years Day 1995 Kim Jong Il suggested a new strategy, called the “army-first policy”. We do not know how soon it took precedence, but from 1998 references to the “army-first line” became routine in the North Korean press.

Why such a change? There is a great deal of pragmatism in attempts to woo the military top brass. After all, they have real power, and can be potentially dangerous. Before Kim Jong Il ascended to his position, there were speculations that the military was ready to get rid of him once his father died. This did not happen, but there are persistent rumours about an unsuccessful military coup which allegedly took place in the mid-1990s. Thus, flattering the generals by telling them about their special role is a good strategy, especially if sweet words are supported by deeds. Indeed, the army enjoys a great freedom in money-making activities, and many generals are now capitalists-in-the-making.

It is very likely that the “army-first policy” was conceived as an attempt to do away with the disastrously inefficient state socialist model and replace it with some sort of controlled capitalism – one controlled by the Kim family, of course. The generals and chiefs of the political police and intelligence services are probably seen as the best material available from which to produce locally grown capitalists.

But if this is the case, can we describe as “Stalinist” a state without a Leninist party and without a state-run industry? Probably not. I suspect that Stalinism in the North is dead or, at least dying.

From NK Zone:
Michael Rank
10/15/2006

The Chinese businessman who is planning to develop the North Korean port of Rajin under a 50-year agreement with the border city of Hunchun says the deal remains on track despite NK’s nuclear test.

Fan Yingsheng, a property developer from Hunan province, said a road between the two cities should be completed within 15 months but gave few other details.

He told the Shanghai Evening Post [in Chinese] that U.N. sanctions “are something that we are expecting, and won’t have much effect on us.”

“After the nuclear test, North Korean colleagues did not tell my company about anything being different, I didn’t even receive any phone calls from them, which shows that it’s business as usual.

”So I am still planning to fly to Pyongyang to sign an agreement as planned, and haven’t thought of changing my schedule.“

Fan was speaking from Hunchun on October 12, shortly after meeting a group of North Korean officials, and was about to head across the border to Raseon where his company apparently has its main North Korean office. He said this visit had been scheduled a month ago.

The ceding of Rajin, an ice-free port with a handling capacity of three million tonnes a year, will give access to the sea to inland areas of northeast China which at present must send freight long distances by rail to the port of Dalian on the Bohai gulf.

The agreement also provides for the construction of a 5-10 square km industrial zone and a 67 km highway, and envisages that the Rajin area will become a processing zone for Chinese goods which will then be re-exported to southern China.

Fan is reported to have put up half the initial capital investment of 60 million euros ($70 million). The sum could not be denominated in dollars for political reasons.

Fan said in July that the Chinese side had approved the leasing of the port as had the city of Raseon, and “all we are waiting for is for the Korean central government to give its approval…”

From the Wall Street Journal:
Let Them Go: China should open its border to North Korean refugees
10/15/2006
Melanie Kilbatrick

If China is to assume what it considers to be its rightful place as a great power, now is the moment. The world is looking to Beijing as the only government with a measure of influence over its lunatic nuclear ward in the Hermit Kingdom. The question is, will it use it?

China says it favors “punitive” actions on Pyongyang for its apparent nuclear test last week, and there’s talk–so far desultory–of sanctions. But no one is speaking publicly about Beijing’s biggest source of influence: the 900-mile border it shares with North Korea. Opening the frontier to refugees would put pressure on Kim Jong Il to give up his nukes or watch his regime implode. As Mark Palmer, U.S. ambassador to Hungary in 1989, has noted, the East German refugees who passed through that country en route to West Germany sped the collapse of the Soviet Union.

The plight of North Korean refugees hiding in northeastern China is a humanitarian crisis that has received scant global notice. No one knows how many are in hiding or how many Beijing has deported back to North Korea in violation of its obligations under the Convention Relating to the Status of Refugees. China refuses to let the United Nations or other countries help the North Koreans.

Now, three official Chinese government documents–obtained privately and smuggled out of the country–show that the humanitarian crisis may be more dire than widely believed and the burden on China heavier. Two of the documents are from the Public Security Bureau–one from the Border Police and the other from a police station along the border. The third is from the Finance Bureau of the Yanbian Korean Autonomous Prefecture in Jilin Province, home to many ethnic Koreans.

The documents were obtained by a U.S.-South Korean group that helps North Korean refugees navigate the underground railroad to safety out of China. The group prefers to remain anonymous for fear that its work could be endangered. They have been vouched for to me by two other sources, one on Capitol Hill and another at an international human-rights organization.

The Border Police document, dated Jan. 10, 2005, begins blandly enough: “From the start of illegal border crossings in 1983,” it says, “the number of illegal immigrants from North Korea that have stayed in China has increased every year.” It adds, “Public Security and Armed Police departments have strengthened preventative and deportation efforts.”

The numbers it reports are newsworthy–and staggering: “To date, almost 400,000 North Korean illegal immigrants have entered China and large numbers continue to cross the border illegally.” And, “As of the end of December 2004, 133,009 North Korean illegal immigrants have been deported.” While Chinese authorities obviously know how many refugees they have deported, by definition they can’t know how many are in hiding. The estimate of 400,000 is sure to be low.

The Yanbian Finance Bureau document, dated Oct. 19, 2004, provides further evidence of the extent of the crisis. It is a letter to provincial authorities requesting more money to help with deportation efforts. “According to statistics from the Public Security, border police and civil administration, more than 93,000 refugees are still living in Yanbian Prefecture.” The letter goes on to say that although the Border Police Bureau has established “six new refugee-deportation and detention centers,” it does not have sufficient funds to do the job. Yanbian requests 30 million yuan ($3.8 million) a year “to solve this financial problem.”

It’s the third document, though, that puts this “financial problem” in human terms. It’s a report, dated Oct. 7, 2003, from a police station in Badaogou Precinct, near Baishan City, in Zhangbai Korean Autonomous County, also in Jilin Province.

“At 7 a.m. on Oct. 3, 2003,” Case Report No. 055 begins, “a report was received from the public of several corpses floating in the Yalu River. Officers from the Precinct immediately responded and organized personnel and by 10 a.m. 53 corpses had been recovered.

“At 5 a.m. on Oct. 4 an additional three corpses were recovered for a total of 56 corpses. There were 36 males and 20 females, including seven children (five male and two female). After examination of the personal effects it was determined that the dead were citizens of the DPRK [North Korea]. Autopsies confirmed that all 56 had been shot to death. It is estimated that the dead were shot by Korean border guards while attempting to cross into China.”

While Pyongyang bears ultimate responsibility for the abuse of its citizens, China is complicit. Its policy of tracking down and repatriating refugees amounts to a death sentence for many returnees. It’s a crime to leave the workers’ paradise, and North Koreans who are caught and deported are shipped off to internment camps or worse.

If Beijing wants to send a message to Pyongyang about its nuclear program, it could announce that, effective immediately, it is taking several steps: It will stop deporting North Koreans, allow the United Nations to set up refugee camps, and permit the resettlement of refugees in third countries, from which they could go to South Korea, whose constitution codifies its moral responsibility to accept its Northern cousins, or to other countries willing to take them in. The U.S., which so far has accepted a mere eight North Koreans, could step up to the plate here.

The Border Police document notes that since the early 1980s there have been six instances of mass migrations that have coincided with North Korea’s famines. Now, winter is coming, and there are already reports of food shortages. Allowing the world to help the North Korean refugees in China would help Beijing deal with a problem that is likely to get worse.

From counterpunch.org:
10/14/2006
Gary Leupp

All three countries labeled “the Axis of Evil” by President Bush in 2002 are presently religious states. Iran is of course a Shiite theocracy, while the government of formerly secularist Iraq—to the extent it has a government at all—is dominated by Shiite fundamentalists. North Korea has long practiced its state religion, Kim Il-songism.

According to North Korean scriptures, when the Great Leader Kim Il-song died in 1994, thousands of cranes descended from Heaven to fetch him, and his portrait appeared high in the firmament. Immediately villages and towns throughout the nation began to construct Towers of Eternal Life, the main one rising 93 meters over Kim’s mausoleum in Pyongyang. The Great Leader’s son, the Dear Leader Kim Jong-il, took power, declining to assume the title of President. The Constitution of the Democratic People’s Republic of Korea restricts that title forever to the Great Leader, whom the Dear Leader has proclaimed, “will always be with us.” The Dear Leader himself was born on Mt. Paektu, the highest mountain in Korea and Manchuria long revered by Koreans as sacred and the birthplace of their nation, in 1942. (Unbelievers say he was born in 1941 in Vyatskoye, in Siberia, in the Soviet Union.) His birth in a humble log cabin brought joy to the cosmos: a double rainbow appeared over the peak, a new star rose in the heavens, and a swallow descended to herald his birth. (Thus he is called, among other monikers, the Heaven-Descended General.) When he was 32 years old, the Workers’ Party of Korea and the people of Korea unanimously elected him their leader. When he visited Panmunjom, a fog descended to protect him from South Korean snipers, but when he was out of danger, the mist dramatically listed and glorious sunlight shone all around him. . . You get the idea.

Now, how did it come about that a socialist republic established by a Marxist-Leninist party in 1948 came under the spell of this state religion and its peculiar mythology? Some might say that Marxism-Leninism is itself a religion, but they misapply the term. “Religion” proper doesn’t refer to just any ideology or thought system, but only to those that posit supernatural phenomena such as life after death, miracles and the existence of deities. Marxism as a variant of philosophical materialism explicitly rejects such phenomena. Some socialist societies have surely produced personality cults, distorted or fabricated histories, dogmatism and fanaticism. And of course when a leader dies, the party has said, “He will always be with us” in a metaphorical sense. The Soviets early on adopted the custom of embalming revolutionary leaders, and the Chinese, Vietnamese and Koreans have followed suite. But what we see in the DPRK is more than a personality cult. It seems to me more akin to the State Shinto imposed on the Korean peninsula by the Japanese imperialists after 1905.

State Shinto, itself developed after 1868 in specific emulation of European state churches, emphasized the divine origins of the Japanese emperors, descended in an unbroken family line from the establishment of the Empire by Jinmu, great-great-grandson of the Sun Goddess Amaterasu. State Shinto emphasized the kokutai or “national essence,” the unbreakable unity of the Japanese islands (born from the bodies of the kami or gods), the Japanese people, their divine emperor, and all the kami with the Sun Goddess at their head. It was a vague concept that boiled down to obedience to state authority and to that solar disk national flag. (We find this sun worship meme in Kim Il-songism too. The DPRK Constitution states, “The great leader Comrade Kim Il Sung is the sun of the nation and the lodestar of the reunification of the fatherland.” A monumental artwork called “the Figure of the Sun” erected to mark the 100-day memorial service for Kim in 1994, adorns a hill overlooking Pyongyang.)

The Meiji-era reformers who created Japan’s state religion were well-educated men who probably didn’t believe the mythology literally, but thought it would allow for the effective control of the indoctrinated masses. It did in fact work fairly well, up until Japan’s crushing defeat in 1945. The U.S. Occupation then abolished it (leaving “folk Shinto” as opposed to State Shinto alone), and forced Emperor Hirohito to publicly renounce any claim to divinity. He could have been tried for war crimes; the Allies could have ended the myth-shrouded monarchy right then. But the U.S. Occupation authorities found the residual aura of sanctity surrounding the office useful. Hirohito was, to Gen. Douglas MacArthur, the “queen bee” whose cooperation would ensure mass compliance with Occupation objectives. The emperor remains a sacerdotal figure, the High Priest of the Shinto faith, enthroned in a religious ceremony, offering prayers on behalf of the nation to the gods.

Growing up under Japanese occupation, Kim Il-song could have observed the usages of a state religion in the service of a hereditary monarchy linked to Heaven. Maybe these observations subconsciously affected the evolution of his thinking. Once in power in North Korea, from 1945, he increasingly built a personality cult, initially modeled after Stalin’s but by the 1970s plainly monarchical in nature. It integrated Confucian values of filial piety and obedience, and glorified the entire family of the Great Leader, including especially the crown prince Jong-il.

Tens of thousands of “research rooms” have been constructed throughout the country, which persons are required to visit at regular intervals, bowing to the portraits of the two Kims the way that all Japanese (and colonized Koreans and Taiwanese) used to have to bow to the Japanese emperor’s portrait.

As Hwang Jang Yop, once International Secretary of the Korean Workers’ Party, has written, “Kim Jong Il went to great lengths to create the Kim Il Sung personality cult, and Kim Il Sung led the efforts to turn Kim Jong Il into a god.” (It is perhaps not surprising that the Great Leader warmly welcomed the Rev. Billy Graham to Pyongyang in 1992 and 1994, where he preached his brand of Christianity in Protestant and Catholic churches and at Kim Il-song University. Kim was no doubt appreciative of the power of religion, having created his own.)

The Chinese communists (when they were communists) referred poetically to “heaven,” as in the 1970s expression “There is great disorder under heaven, the situation is excellent.” Chinese Confucianism and Daoism both allude to Heaven (Tian) in the sense of a moral cosmic order that confers its mandate on successive dynasties of Chinese rulers. The word occurs in Chinese literature in so many contexts that it’s natural for Chinese Marxists to use it metaphorically. But Kim Il-song chose “believing in the people as in heaven” as his motto, implying perhaps that one should believe in both; and wrote a poem on the occasion of his beloved son’s 50th birthday: “Heaven and earth shake with the resounding cheers of all the people united in praising him.” He really seems to have wanted the people to believe in a celestial realm conferring its mandate on his dynasty.

In a Tungusic myth, the ancient Korean nation of Choson was founded by the son of a bear who had been transformed into a woman by Hwanung, ruler of a divine city on Mt. Paektu, and a tiger. I’ve read that this myth has been reworked to suggest to North Korean school children that the Kims came down from heaven to the top of the sacred mountain, where they were transformed into human beings. (There may be some shared memes with Shinto here. In the Japanese myth, the grandson of the Sun Goddess descends to earth, to a mountain peak in Kyushu, marries the daughter of an earthly deity, loses his immortality, and begets two sons one of whom sires the first emperor, Jinmu, by a sea princess who turns out to be a dragon. The Japanese imperial family also came down from heaven, and became human.) Heaven clearly plays a role in Kim Il-songism as it did in State Shinto.

Where does Marxism-Leninism fit in here? According to one report, while there are portraits of the Great and Dear Leaders all over Pyongyang, “there are only two public pictures in Pyongyang of people who do not belong to the Kim family–in the main square are two smallish images, one of Marx and one of Lenin.”

That suggests at least some small formal deference to the communist pioneers. But the Dear Leader stated in a major speech in 1990:

“We could not literally accept the Marxist theory which had been advanced on the premises of the socio-historic conditions of the developed European capitalist countries, or the Leninist theory presented in the situation of Russia where capitalism was developed to the second grade. We had had to find a solution to every problem arising in the revolution from the standpoint of Juche.”

This is the supposedly brilliant idea of “self-reliance” or as the Great Leader put it, the principle that “man is the master of everything and decides everything.” (The “standpoint” of course sounds rather trite and vague at worst, while not overtly religious. But born out of Kim’s brain supposedly when he was only 18 years old, it is the faith of the masses and the ideological basis for the state—rather like kokutai in prewar and wartime Japan.) The DPRK’s new (1998) Constitution omits any reference to Marxism-Leninism whatsoever. Rather the document “embodies Comrade Kim Il-song’s Juche state construction ideology.”

Still, those portraits of Marx and Lenin are there in Pyongyang. DPRK propaganda continues to describe the late Kim as “a thoroughgoing Marxist-Leninist.” Juche is described as a “creative application of Marxism-Leninism.” The Korean Workers’ Party continues to cultivate ties with more traditional, perhaps more “legitimate,” Marxist-Leninist parties including the (Maoist) Communist Party of the Philippines.

Some material by Marx, Engels and Lenin circulates in North Korea, and the Marxist dictum, “Religion is the opium of the masses” is universally known. But according to a Russian study in 1995, “the works by Marx, Engels, and Lenin are not only excluded from the standard [school] curriculum, but are generally forbidden for lay readers. Almost all the classical works of Marxism-Leninism, as well as foreign works on the Marxist (that is, other than [Juche]) philosophy are kept in special depositories, along with other kinds of subversive literature. Such works are accessible only to specialists with special permits.” (One thinks of the Catholic Church in the Middle Ages restricting Bible reading to the trusted clergy, and discouraging it among the masses.)

I imagine some with those special permits are able to read Marx’s famous 1844 essay in which the “opium of the masses” phrase occurs:

“Religious distress is at the same time the expression of real distress and the protest against real distress. Religion is the sigh of the oppressed creature, the heart of a heartless world, just as it is the spirit of a spiritless situation. It is the opium of the people. The abolition of religion as the illusory happiness of the people is required for their real happiness. The demand to give up the illusion about its condition is the demand to give up a condition which needs illusions.”

Maybe the rare North Korean student of Marxism, acquiring some real understanding of the Marxist view of religion, can see all around him or her conditions which require mass illusions and delusions in order to continue. There are some signs of resistance here and there to the Kim cult, which would seem to be a good thing.

Having said that (and always trying to think dialectically), I don’t believe that life in the DPRK is quite the hell—another religious concept—that the mainstream media would have us believe it is. One should try to look at things in perspective. We hear much of the terrible famine that lasted from about 1995 to 2001, killing hundreds of thousands if not millions. But North Korea was not always a disaster. As of 1980, infant mortality in the north was lower than in the south, life expectancy was higher, and per capita energy usage was actually double that in the south (Boston Globe, Dec. 31, 2003). Even after the famine and accompanying problems, a visitor to Pyongyang in 2002 declared:

“Housing in Pyongyang is of surprising quality. In the past 30 years–and mostly in the past 20–hundreds of huge apartment houses have been built. Pyongyang is a city of high-rises, with probably the highest average building height of any city in the world. Although the quality is below that of the West, it is far above that found in the former Soviet Union. Buildings are finished and painted and there is at least a pretense of maintenance; even older buildings do not look neglected. Nothing looks as though it is on the verge of falling down. . .

“Although a bit dreary, the shops in Pyongyang are far from empty. Each apartment building has some sort of shop on the main floor, and food shops can usually be found within one or two buildings from any given home. Apart from these basic, Soviet-style shops, there are a few department stores carrying a wide range of goods. . . “While not snappy dressers, North Koreans are certainly clean and tidy, and exceptionally well dressed. . . There is no shortage of clothing, and clothing stores and fabric shops are open daily.”

There’s apparently one hotel disco and some karaoke bars in Pyongyang. No doubt Kim Il-songism can provide some with the “illusory happiness” about which Marx wrote, and it is possible that genuine popular feelings as well as feelings orchestrated from above have contributed to the production of the North Korean faith. The DPRK might not be all distress and oppression. But neither is it a socialist society in any sense Marx or Lenin would have recognized, to say nothing of a classless, communist society. It is among other things a religious society in a world where nations led by religious nuts are facing off, some seemingly hell-bent on producing a prophesized apocalypse. I find no cause for either comfort or particular alarm in the Dear Leader’s October 9 nuclear blast; if it deters a U.S. attack it’s achieved its purpose, and however bizarre Jong-il may be he’s probably not crazy enough to provoke his nation’s destruction by an attack on the U.S. or Japan. I’m more concerned that Bush will do something stupid in response to the test.

In any case, the confrontation here isn’t between “freedom” and “one of the world’s last communist regimes,” nor even between fundamentalist Christian Bush and Kim Il-songist Kim Jong-il. It’s between a weird hermetic regime under threat and determined to survive in its small space, using a cult to control its people, and a weird much more dangerous regime under the delusion that God wants it to smite His enemies and to control the whole world. Both are in the business of peddling “illusions of happiness.” Neither is much concerned about the “real happiness” of people. Both ought to be changed—by those they oppress, demanding an end to conditions requiring illusions.

Gary Leupp is Professor of History at Tufts University, and Adjunct Professor of Comparative Religion.