North Korean Economy Watch

From the Korea Times:

By Kim Sue-young

Torrential rain in North Korea last month destroyed 3,000 hectares of arable land and submerged 20,000 hectares, according to the Food and Agriculture Organization (FAO) of the United Nations.

This year’s grain production will not be affected, however, when the inundated land dries, the organization predicted.

“The total area has been severely impacted and we calculated the total affected area is two percent of the total national crop area,” Cheng Fang, an Asian officer and economist in the Commodities and Trade Division at the FAO, said yesterday in an interview with Radio Free Asia (RFA).

Damaged crops included corn and beans but the flood will not harm the rice harvest when the water dries, he added.

“The land totally washed away, that means almost all crops are lost, but for the submerged areas, some production can be recovered, like rice,” he said.

People are concerned about the North’s flood damage as it cancelled the “Arirang Festival,” mass games set to start next month, due to the flood.

In addition, “Good Friends,” a private aid group for the North estimated 30,000 hectares of farmland destroyed, equivalent to 100,000 tons of lost food production.

Alistair Henley, regional director of the International Red Cross, however, refuted the toll Wednesday in an interview with RFA saying North Korea is less damaged than China.

“We’re dealing at the same time with bad floods here in China where we’re talking about at least tens of millions of people being displaced,” he said. “The situation in North Korea is absolutely, in no way, anything like that.”

Fang also said that we cannot forecast the flood will lead to poor crop production because 90 percent of crops are still on the submerged ground.

“I believe the North can gather a good harvest depending on the coming months’ weather conditions,” he stressed.

From the Joong Ang Daily:

First flood aid leaves for North
August 04, 2006

South Korea’s first aid package to help North Korean flood victims left Incheon yesterday, a Seoul-based international relief organization said. The eight containers full of goods include 100 tons of flour, 37,500 packs of instant noodles and 2,660 candles.

The Join Together Society, a relief agency founded by the Buddhist civic group Jungto Society, plans to send three more shipments to North Korea. Yesterday’s package, worth 120 million won ($124,262), will arrive in the North’s Nampo Harbor today, the aid group said. The aid packages will be given to flood victims of South Pyongan province, where the damage was reportedly severe.

The second shipment will include $50,000 worth of medicine and other goods including blankets and dishes, the group said. The goods will be purchased in China and sent to the North by trucks. The third and fourth shipments will be food aid, to be shipped from Incheon to Nampo.

More non-governmental groups said yesterday they will initiate fundraising drives to support flood victims in both South and North Koreas. The South Korean Committee for Implementation of the June 15 Joint Declaration, an alliance of civic, social, religious and political groups, said its members will provide contributions from today till Tuesday to raise $100,000. The fundraising drive will expand to the public by the end of next month, and the money will be spent to help flood victims of both Koreas, the committee said.

A relief agency for North Korea under the National Unification Advisory Council also announced its plan to provide aid packages to support flood victims in the North. The organization said 50 million won worth of goods, including 300 hand carts, will depart Incheon on Wednesday for Nampo. Additional goods, including medicine, will be provided, and the group planned site surveys in North Korea at the end of this month to see if the victims need further assistance, the group said.

The United Nations and the Red Cross were conservative about the North’s suffering after the July floods. The United Nations estimated at least 154 North Korean deaths and 127 missing, while the Red Cross said 141 were killed and another 112 were missing. A South Korean civic group said earlier this week that up to 10,000 were missing or dead.

Meanwhile, international media reported yesterday that the North has refused aid offers from the World Food Program and Red Cross.

From the Korea Herald:
August 2, 2006

A South Korean civic group announced yesterday that it will send 130 million won ($138,000) worth of flood relief to North Korea tomorrow.

This is the first time that humanitarian aid is being sent to the North after it suffered heavy damage from the latest torrential downpours, the group said.

The Join Together Society said it shipped 100 tons of flour, 38,000 packs of instant noodles and living necessities such as clothes, shoes and candles.

JTS is a relief and development organization founded in 1994, and headed by well-known Buddhist monk Ven. Pomnyun.

The ship will leave Incheon tomorrow and will reach the North’s western port of Nampo tomorrow at the earliest, said the Seoul-based civic group.

The move came after the South Korean government stopped aid packages as the North test-fired seven missiles into the East Sea last month. However, civic groups here have urged Seoul to revive its humanitarian aid as food shortage problems in the North got worse in the aftermath of the massive downfall.

JTS said that the flood relief will be sent to an organization that helps North Koreans residing overseas. The goods will be used to relieve flood victims in the Yangduk county of Pyeongan Province, northwest of Pyeongyang, it added.

From the Daily NK:

“Regulation of People Due to Concern over Flooding”
Newspapers will not report the real conditions 

The North Korea support organization ‘Good Friends’ alleged that the aftereffects of the recent flood in North Korea seem more severe than the flood of the late 1990’s. However, North Korean authorities are attempting to regulate people so that the truth does not become public.

Good Friends recently reported that “Each town and province in North Korea is taking measures not to authorize travel certificates until further directions are given.”

The restrictions have not only suspended railway operations, but have affected flood victims as well. During the period of unrest due to the current quasi-war, these restrictions have been enacted in order to prohibit flood victims from spreading the news of damage as they go from place to place looking for food.

In addition, military bases in Yangduk, Maengsan, Shinyang, Yoduk and Gumkang were most severely affected. However, as the country remains in a state of tension, newspapers have not been reporting details of the damage, in an attempt to lessen feelings of anxiousness.

The newsletter also reported that North Korea does not seem to be taking any countermeasures against the flooding.

Following the flood in late July, many elderly citizens and children in areas of North Korea such as Kowon, Dancheon, and Wonsan have contracted diseases and more are dying everyday. As there is no medical support or preventative measures against such epidemics, the number of deaths continues to rise.

Moreover, as the North Korean regime has been thrust into a “situation of quasi-war”, it has neglected to support those in need.

Although action has been taken to begin reconstruction, there is little machinery and equipment, so people have resorted to manually rebuilding. In addition, as roads and railroads are disconnected it is difficult for emergency equipment to be delivered to disaster areas. Currency is also not circulating easily, and it is predicted that the cost of market supplies and the price of food will rise.

Good Friends reported that approximately 130,000~150,000 people have suffered damages due to the flood, and that at present, 4,000 people have been reported missing. The number of deaths and missing persons totals more than 10,000.

Red Cross In S. Korea Says North Rejects Aid
Washington Post
Kwang Tae Kim
Associated Press
Thursday, August 3, 2006; Page A18

SEOUL, Aug. 2 — The South Korean Red Cross said Wednesday that its North Korean counterpart had rejected an offer of aid for flood victims.

North Korea “expressed thanks for Seoul’s offer” but said “it will handle the recovery efforts from recent floods by itself,” a senior North Korean Red Cross official said, according to the South Korean Red Cross.

Floods caused by heavy rains in mid-July killed at least 154 North Koreans and left more than 127 missing, according to the United Nations. North Korea’s official media have said the disaster caused hundreds of deaths and cut off roads, bridges, railroads and communications.

However, the Good Friends group, a Seoul-based aid organization for North Korean refugees, said in a statement Wednesday that about 10,000 people were dead or missing and 1.5 million were left homeless by the floods.

The project coordinator for Good Friends, Lee Seung Yong, declined to identify sources for the information, but previous reports of activities in North Korea from the group have since been confirmed.

North Korea has relied on foreign donations of food since the 1990s, when natural disasters and decades of mismanagement led to the deaths of as many as 2 million people.

South Korea, a key provider of rice and fertilizer to the North, recently suspended aid shipments to protest the county’s refusal to discuss its missile launches in early July. The tests drew international condemnation and raised regional tensions.

North Korea protested the South’s decision and cut off government-level exchanges. But civilian-level exchanges remain intact, leading the North to seek civilian assistance from the South for flood victims while rejecting the offer of aid from the government-run Red Cross.

The South’s Korean Council for Reconciliation and Cooperation, which is composed of civic groups and ruling Uri Party members and is partly funded by the government, said it would send aid to the North by next weekend. It said the aid would probably be accepted but declined to give details.

JTS Korea, a private relief agency based in Seoul, also said Tuesday that it would ship emergency goods to the North. The agency’s spokeswoman, Hyun Hee Ryun, said North Korea had specified what kind of supplies it needed, suggesting that the aid would be accepted.

N. Korea declines aid from Red Cross after flooding
Korea Herald

North Korea, which was hit by torrential rain and flash floods last month, declined offers of aid from the International Red Cross and its South Korean branch, an official said.

“We asked the North Korean government what it would need in terms of relief aid to help in their efforts to recover after last month’s heavy rains,” said Kim Hyung-sup, a spokesman at South Korea’s National Red Cross. “North Korean authorities replied that while they appreciate the offer, they are able to manage on their own. I seriously doubt that.”

The International Committee of the Red Cross – to which the South Korean Red Cross belongs – also offered aid, which North Korea declined, Kim said.

Hundreds of people are dead or missing in North Korea after the rains, the country’s official Korean Central News Agency said on July 21. Floods last week also damaged farmland, tens of thousands of shelters and public buildings. Hundreds of roads, bridges and railways were destroyed, it said. South Korea was also hit and damages in the South are estimated at around 2 trillion won ($2.1 billion).

North Korea canceled two festivals this month, citing relief efforts. It postponed its Arirang Festival, featuring its mass games, as well as an annual festival with South Korea to mark their independence from Japanese colonial rule at the end of World War II.

“The biggest problem for North Korea will be food shortages, especially in winter and next year, because most of its farmlands were flooded,” Kim said. “Water and medical supplies are likely to be in demand, either because of the wounded as well as concerns of infectious diseases that may spread in the aftermath of the rains.”

A South Korean civic group said Tuesday that it plans to provide emergency aid to North Koreans.

The Join Together Society, a humanitarian aid group in Seoul, said it will send eight TEUs filled with relief goods, including 100 tons of flour, to the North from Aug. 3-9. TEUs, or 20-foot equivalent units, are a measure of containerized cargo capacity.

It is the first time that a South Korean civic group is providing aid to the communist state since Seoul stopped all efforts in the wake of the North’s recent missile tests and its ongoing boycott of six-way nuclear talks.

North Korea has depended on outside aid since the 1990s. More than a million people have died from famine because of years of flooding, drought and economic mismanagement. One in three North Koreans is chronically malnourished and many are forced to scavenge for food, resorting to ferns, acorns, grass and seaweed.

International food aid for North Korea reached 1.08 million tons last year, the world’s second largest after Ethiopia’s 1.1 million tons, according to the United Nations’ Food and Agriculture Organization. South Korea sent 394,000 tons of food aid to North Korea last year.

Daily NK:

It has been learned that serious damage has been incurred in North Korea due to heavy rain, which has also led to the cancellation of the Arirang festival.

Due to the heavy rain, hundreds of people have died, and 100,000 tons of food was lost. The Food and Agriculture Organization (FAO) estimated that necessary food aid would amount to 830,000 tons between November 2006 to October 2007.

High production agruicultural areas such as Hwanghae and South Pyongan provinces have already complained about likely food shortages next year. North Korean traders from China said that, “due to the damage from the heavy rain, the whole country will face loses”. Many international organizations have voiced a desire to aid the North Korean people after learning of the flooding, keeping the missile conflict a separate issue.

Although international organizations, including the International Red Cross, have offered to aid the North Korean people, North Korea has refused the aid. The World Food Program (WFP) offered to provide 74 tons of food to the Yeungsan district of North Hwanghae province, but due to the WFP condition of monitoring distribution of the food aid, North Korea has refused to accept it.

It was also confirmed that North Korea refused aid offered by the International Red Cross offices in Europe and the U.S., and has not yet responded to an offer of aid made by the Korean National Red Cross. It seems unlikely that the North will accept the aid, as the government has firmly refused external aid, in order to keep the international community ignorant to the situation in the North.

If the North Korean government continues to take this attitude, the number of victims will no doubt increase, particularly as the international community increases the level of isolation against North Korea.

Last December, when the U.N. General Assembly passed the North Korean Human Rights Resolution, North Korea asked the U.N. office in North Korea to withdraw. During that time, when North Korea refused food aid from the WFP, it was criticized as using its people as hostages to pressure the international community.

The South Korean government officially took the stand that it would not aid North Korea. Although some people have said that ignoring the need for aid is a bad decision, others believe that sending aid when the North did not request it would only it would only invite misunderstanding.

If the government rushes to aid North Korea, it will be criticized for supporting the North, while leaving domestic flood sufferers to fend for themselves.

However, many people point out that even though they maintain an alliance against the North in regard to the missile conflict, the South Korean government should still offer humanitarian assistance. Cooperation through international organizations, such as the WFP, with monitoring of distrubution, could ensure that the North Korean people receive the aid that they need.

From the International Herald Tribune:

Pyongyang pushes ‘army-first’ policy
8/2/2006

Seo Hyang Wol, a 43-year-old North Korean housewife, has given birth to nine children, making her a shining example of a national campaign to increase birth rates.
 
But that is not the only thing that makes “women across the republic abuzz with talk of emulating her,” according to North Korea’s official news media.
 
Inspired by the leader Kim Jong Il’s “songun,” or “army-first,” policy, Seo named three daughters Chong Byol, Pok Byol and Tan Byol – or “Rifle Star,” “Bomb Star” and “Bullet Star.” A son born in 2003 and a daughter born last year were named Son Gun and Hyok Myong. Put together, the names mean “army-first revolution.”
 
“I produced many children hoping they will grow up and become gun-barrel soldiers for our army-first fatherland,” Seo said in an interview in March with Pyongyang Radio. The report added that names like her children’s were “fast becoming a vogue” in North Korea.
 
Although dismissed as ridiculous in the outside world, stories like Seo’s provide an example of how closely tied North Korean society has become to Kim’s army-first doctrine.
 
The doctrine promotes North Korea’s nuclear weapons, missile programs and huge military spending even as the country remains the second-largest recipient of food donations in the world after Ethiopia.
 
That policy, coupled with huge damage caused by recent floods, is pushing 23 million North Koreans into a new food crisis – in a country that has already lost an estimated one million people to famine, according to relief officials in Seoul.
 
After missile tests by North Korea on July 5, the United Nations Security Council adopted a resolution condemning North Korea, while the United States and Japan are calling for more economic pressure on the country.
 
But at home, Kim Jong Il has since begun a huge propaganda campaign to incite fears of a U.S. invasion and stoke a xenophobic nationalism – at a time when his regime fears that the faith of the people may be weakening because of food shortages and exposure to a thriving market economy in neighboring China.
 
“Comrades, we can live without candies, but we can’t live without bullets,” Defense Minister Kim Il Chol said in a speech last week.
 
North Korea’s missile tests invited rare public criticism from its two main aid providers – China, which had publicly warned against the tests, and South Korea, which suspended food aid in protest.
 
But Kim Jong Il also succeeded in turning the world’s attention – which has recently been focused on Iran – back to his weapons programs.
 
“For Kim Jong Il’s regime, which doesn’t want economic openness to threaten its power, building leverage through his military is the only way for survival,” said Jeung Young Tae, a North Korea expert at the South Korean government-funded Korea Institute for National Unification in Seoul.
 
“Under Kim, the songun policy has become an ideology. It calls on every sector in North Korean society to think, decide and act according to military logic,” Jeung added.
 
Kim considers his military threats as bargaining chips to get economic aid and security guarantees from the United States, experts say. But Washington says that approach is a political and economic dead end for the regime.
 
Relief officials say the biggest victims of the confrontation are the North Korean people.
 
“Governments talk about economic sanctions. They talk about the regime’s survival. But what about the survival of ordinary North Koreans?” said Noh Ok Jae, a director at Good Friends, a Seoul- based relief agency.
 
Even before Kim took power after his father’s death in 1994, North Korea devoted a large proportion of national resources on the military, building the world’s fifth-largest armed forces despite worsening economic difficulties.
 
Today, with a 1.2 million-member regular army, North Korea has the world’s highest peacetime ratio of soldiers to civilians. It also maintains a pool of six million reserve troops. All factory workers take part in two-week military training exercises every year. North Korea does not release detailed budget figures, but experts believe that under Kim Jong Il, more funds have been funneled to the military.
 
The policy feeds on constant fears of a U.S. invasion inculcated by decades of bellicose propaganda. In kindergartens, children draw pictures of U.S. soldiers killing Korean babies, according to defectors from North Korea. Banners strung up in North Korean villages scream about an impending war that would “settle the final score with the Americans.”
 
Pervasive militarism and anti-Americanism has even invaded the language in North Korea. A popular curse is: “I will kill you like an American imperialist.” North Koreans, when provoked, threatened to turn themselves into “human rifles and bombs,” according to South Korean engineers who have worked in the North.
 
In May, the North’s main daily, Rodong, boasted that North Koreans “love an artillery barrage like the sound of an orchestra.”
 
“Through the speaker we had at every home, they regularly blared the ‘mountain-ranger’s march,'” said Kim Seong Min, who defected to Seoul in 1999. “The song went, ‘Comrades, get ready for battle, arms in your hands’ and it was the signal for an anti-air raid drill. All villagers rushed out with backpacks and ran for shelters.”
 
Under Kim Jong Il’s songun policy, that military influence has become even more pervasive, experts say.
 
When the North canceled test runs of cross-border trains with South Korea in May, it cited objections from the North Korean People’s Army.
 
“What I hear is Big Brothers saying to Little Brother ‘don’t do that’ but we are not a little boy, we have nuclear weapons,” the North Korean vice foreign minister, Kim Gae Gwan, was quoted as saying recently, in a comment that appeared to be aimed at China. The remark was reported by Paul Carroll, an official at the San Francisco-based Ploughshares Fund, who met the official in Pyongyang shortly after the North’s missile tests.
 
In his doctorate paper published last week, Hyun Song Il, a North Korean diplomat who defected to Seoul in 1996, said 17 members of Kim’s inner circle of 38 were military generals or held army- related party posts.
 
“The military is the only force that Kim can rely on when he faces internal unrest,” said Andrei Lankov, a North Korea expert at Kookmin University in Seoul.
 
Kim has dedicated most of his public appearances to visits to military units. In one of those trips, Kim demonstrated the importance of ambidexterity when he faced 10 bottles placed 50 meters, or 165 feet, away at a rifle range, according to North Korean news media, which often mixes fact with fiction when describing Kim’s exploits.
 
“The bottles were swinging wildly on strings in a strong wind. But in a split second, the general gunned down five,” said an account posted on the North Korean Web site Uriminjokkiri. “Then he grabbed the revolver in his left hand and smashed the other five.”

From the Korea Herald:

A rare piece of North Korean internal educational material reveals how much troubled the North’s party and state authorities are these days by what seems to be social laxity turning worse following the 2002 economic reform measures. It also helps find answers to questions about Pyongyang’s recent moves to shun contact with the South.

“On Waging Uncompromising Struggle against the Enemies of the Class” is the title of the document, known to be prepared for the education of Workers’ Party cadre members. The material obtained and released by the Free North Korea Radio operated by refugees from the North complains that the “enemies of the class opposing our present system are intensifying their vile activities, which will result in serious consequences if we delay or neglect our alertness against them.”

The material admits there are people who “sell out the secrets of the party and the state, running mad about money, who propagate antisocial religious and superstitious acts, and those who are engaged in delinquencies refusing to work.” One has the impression that social problems are deepening in the North despite severe regimentation of the people.

We know well that North Korea is in a dire situation as a result of continued economic constriction. Its extensive economic reform measures put into force on July 1, 2002, are now believed to be causing new problems due to the people’s stronger pursuit for money which leads to “ideological corruption.” So the party educational material calls for the elimination of impure and incongruous elements in the northern society which are now accused of “even engaging in political sabotage.”

In addition to the unwanted side effects of economic openness, broader contacts with the South could be shaking even the rock-hard social order based on rigid resident control and surveillance. The entry of over 30,000 South Koreans into North Korea each year on various business purposes, the hundreds of thousands of visitors to Mount Geumgang, and the shipment of large amounts of rice, fertilizer and other aid materials including clothes and medical supplies cannot but leave significant impact on North Korean society.

While suspending and limiting inter-Korean contacts, Pyongyang authorities are now compelled to intensify the indoctrination of their people. Yet they are attempting to do something impossible. Arduous educational programs will not have much effect in keeping North Korea’s 20 million people within the state ideology as they pursue the basic human desires to get out of hunger and live in freedom.

From the dailk NK:
7/26/2006

The First On Location Record of N. Koreans ‘Life Education’ Revealed

On the 22nd, a total of 9 voice files (116 minutes), exclusively acquired by the DailyNK, discussing “life education” at North Korean a Giupso (State Owned Enterprise), were released.

It was the first time “life education” locations were revealed.

The voice files included life education information created by the Kim Il Sung Socialist Youth League, and the front-line workers league, as well as instructions given by the Central Party leaders in May, and meeting minutes that group leaders and department secretaries delivered to workers.

These voice files include not only life education information, but also instructions the North Korean government gave to women and to the elderly. These voice files will provide valuable information to outsiders as to what ideologies and instructions the North Korean government has used in educating North Koreans.

“Life education” is an event in which a group gathers at a household to reflect on their public and private lives and constructively criticize each other.

All North Koreans belong to the Party and Worker’s League. Members of the Kim Il Sung Socialist Youth League, the Women’s League of Democracy, the Workers’ League, and the Farmers’ League all meet within their groups for “life education” gatherings.

The gatherings can be anywhere from two day-life education periods, weekly, monthly, quarterly or annually. The voice files were an example of weekly meetings.

“Top 10 Principles”

After DailyNK analysis of the voice files, it is evident that the North Korea government still strongly controls people through life education meetings, although some have stated that control has loosened.

The voice files show that the person in charge of the Worker’s League life education meeting emphasized following “organization regulations”.

He urged that, “Keeping in mind the top 10 principles (the 10 principles necessary for the continuation of North Korean ideology), you should reflect on yourselves, your attitudes and your perspective on the league and the government during last week. Life education begins at 7:30. You should never be absent from life education meetings. Do not be late again. Regulations will not loosen”.

Subsequently, he pointed out that, “People are afraid of individuals rather than organizations. So there are not enough critical comments”, complaining that the atmosphere of life education meetings is not aggressive enough.

Youth League life education meeting emphasized, “First of all, we should have the strong desire to defend our only Leader. We should follow the revolutionary creed that the Great Leader (Kim Jong Il), is our nation and we should be a strong guardian of him”.

When a person at the meeting began a comment with the words, “according to the 10 principles” (refering to the 10 principles of NK ideology), the person in charge of the meeting corrected him, instructing him to say instead, “Regarding the top 10 principles necessary for the one and only ideology system of the Party to be established, Great Leader Kim Jong Il pointed out as follows”.

Furthermore, the North Korean government still emphasizes that “our own socialism is the absolute belief of the Great Leader”, illustrating that the North Korean government has no desire to give up on ‘our own socialism’, contrary to international expectations that North Korea will open its economy and pursue reformation and liberalization.

In the Youth League, the meeting mediator said that, “We should have a deeper belief in socialism. We should confront enemies ideologically as well as physically. If we possess a strong ideology and creed, enemies will never succeed in conspiring against us. Our socialism is that of the Great Leader”.

He also said that, “(The outside world) is attempting to overthrow our nation by producing a mass of impure claims and spreading them throughout the country. Today, we should overcome political, ideological interventions, schemes, and conspiracies with great hostility”. This illustrates the degree to which the North Korean government is afraid of the external influence, and is struggling to prevent the influx of information.

Meanwhile, in a meeting held for group leaders and their families, a village secretary reiterated the instrctions given on May 1st by Kim Jong-Il, declaring an extensive ideological fight against enemies.

The instructions commanded people to “support the legal struggles against illegal defectors, the unemployed, vagrant beggars, illegal traders, smugglers of metals and cash, and against violent criminals such as murderers and burglars”.

1. Enemies have attempted to overthrow our nation by spreading false claims throughout our nation. They have attempted to employ psychological warfare against our republic. They have conspired to distribute 200,000 pieces of impure information a month into our nation, via third nations and spies. Today, enemies are openly trying to overthrow our nation. We should confront this ideological intervention by our enemies with strong hostility.

However, some people who forget their duties, and have impure ideological attitudes, have strayed from our socialist beliefs by distributing socially and culturally impure information such as lecherous video tapes provided by our enemies. The impure information creates an illusion of capitalism as an oasis, but betrayes our nations beliefs. Our young people should rightly acknowledge how dangerous the conspiracy against our republic is, and actively participate in the fight to protect our nation.

How shall we do that? First of all, we embrace the Great Leader and guard him. As our enemies aim to destroy our firm ties to the Great Leader, our young people should vow to guard the Great Leader against the ideological and cultural intrusion of our enemies. With the revolutionary ideal that the Great Leader is our nation, we must be strong enough to risk our lives for the Great Leader. Next, we must have a deeper belief in socialism. The fight against our enemies is not only physical but also ideological. If the ideology is strong enough, our enemies will not be able to destroy us. Belief in socialism is the absolute reverence towards the Great Leader.

File 2.

“What is your name?”
“○○○”
“Why are you late? I told you not to be late before. Do you have your life education note? Why are you late? Don’t you belong to the Workers’ League?”
“Today I was not late for life education”
“Do you say that you were not late? Hey! When does the education start? When does the education start?”
“At 7:30”

“Were you here by 7:30? Why are you late? XXX, you are always so sloppy”
“Life education started at 7:30. You sneaked in here right before the class ended. Don’t you think you should be here before the class starts?”
“The next life education also starts at 7:30. Youth League and Workers’ leagues do, as well.
“Do you think that life education starts at 8:00? XXX”
“Do not be late again. Why do you think you are criticized for that? Every Giupso knows that life education starts at 7:30. You must have known it. Then why are late? At 8:00 Giupso has a morning meeting. You should attend the meeting”
“Sit down. Anybody want to reflect on themselves?

“Don’t lie. Just say ‘yes, I was a little bit late’. Never tell a lie. Telling a lie means deceiving others. Yes, the Great Leader said that ‘a lie is the first step of betrayal. The first step of betrayal’. The first thing betrayers do is tell a lie. This is not the first time. You are always late. Betrayers are far from here. Betrayers are not on the distant hill. Betrayers are right within this fence, and right in this room. Right next to you. Betrayal starts from telling a lie. Why do you keep telling lies? I saw you standing outside the room. When I sat down you hid yourself. Why do you do that? Why do you hide behind the window? Just say ‘I was late, because of something. I will not be late again’ That is what you should have said. Liars also have problems at home. Workers’ League, train your members better from now on”.

“I have something to tell you. When you quote what the Great Leader said and the top 10 principles, say it this way: Great Leader Kim Jong Il pointed out through the top 10 principles for the only and one ideological system to be established as follows. Do not just say ‘according to the top 10 principles’. This should be corrected. Next, being late is a serious problem. Some people are late for morning meeting, as well. Organization regulations seem to have loosened! People should be afraid of the organization, not each other. That’s why no one makes any critical comments of each other. Turn in your life education notes here.

File 3.

The Party instructed to employ moral characteristics and verbal decorum. The Party strongly urged people not to use vulgar words.

Do not use vulgar words such as XXX, stupid, use our traditional words and correct the vulgar words. Do not use vulgar, insulting words with your spouse. Workers and young people also should try to enhance their language and show devotion to organizations and groups by loving them more than themselves.

Love and take care of revolutionaries’ families, the war dead, families of victims and honorable soldiers, and take interest in their lives and business. Be polite to the old, seniors and pregnant women by offering your seats to them and comply with public rules in public places such as on trains, buses and in theaters.

Do not have alcohol at gatherings, or go dancing. Respect our traditional customs. Confront anti-socialism and establish a sound social lifestyle. Leagues will review people again on June 20 after they carry out the instructions of each League. The ideological fight will start on June 25, going through mid-July. This were the instructions of the Great Leader Kim Jong Il. A high-level meeting will first take place, after which lower-level meetings will be held in which problem-solving methods will be discussed. We must thoroughly prepare for them.  Obey like children. First men should act as roll models. Group leaders and secretaries should do so as well.

May 20, instructions of the Party
Some people have paid to learn Chinese from Chinese-N. Koreans. Others have sold possessions in order to pay. We must fight against this. Children must keep their parents’ medals safe, but instead they often bring them outside for play. Fathers will know how important the medals are. Yet children do not know. So fathers should educate their children about it. Next, I would like to talk about raising rabbits. First of all, group leaders and secretaries should act as good role models. Write a report about regarding the rabbits each weekend. Discuss how many rabbits are there, and other details. All Giupsos should discuss the matter of raising rabbits. If the Party gave instructions, all should follow them. Do not overlook anything.

from the Daily NK:

Recently, concerns mounted that a counterfeit $100 “supernote” was being used as “official currency” between North Korean traders.

For a while, the supernote was used in areas of China in common trade and drug smuggling. The counterfeit money began circulating in Jangmadang and then North Korean markets, as “unofficial forms of trade”.

As of early this year, the supernote circulated amongst North Korean common traders was valued at $70, and by June, had spread throughout the whole nation. It appears that the counterfeit money is being accepted as “income currency”.

This information was obtained by North Korean and Chinese tradesmen residing both in and outside of North Korea.

On July 26th, Park Chul Woong (pseudonym, 34), a Korean-Chinese merchant in Dandong, China said “It has been a while since counterfeit money has been used as a form of transaction in North Korea. Now, tradesmen use the supernote amongst themselves to do business”.

Park said “Even if you make a small deal of $1,000, this still equates to 600 sheets of North Korean 5,000 won notes. (The largest North Korean bill) As people do not want to carry this amount of money with them, merchants use the counterfeit money instead”.

Also, Park said “Merchants do not deal with North Korean currency as they do not trust it. When inflation rises rapidly as in 2002, merchants sit around and discuss how the money has no value. However, there is nothing you cannot do with the dollar. As the dollar is scarce, merchants have resorted to using fakes.”

The traders complain that the North Korean currency has lost its value so much, that if they were to use the money for trade at markets they would have to carry numerous bags of it. They also said “Every day the market price fluctuates dramatically. The more you trade with North Korean money, the greater the loss.”

No control of counterfeit money
 
Last May, Kim Young Man (pseudonym, 38), a Korean-Chinese who went to Shinuiju for an Investment Conference, said “North Korea is unhestitantly using the counterfeit $100 note as real $70. It is of concern as to how far they will take this.”

He said “Even business employees of the National Security Office or the Department of the People’s Armed Forces General Logistics Bureau use counterfeit when paying Chinese tradesman for products such as seafood and hand-made goods. If North Korean authorities discover that counterfeit money is circulating in North Korea on such a large scale, chaos could ensue.”

Also, he said “Merchants generally carry dollars. Rich merchants store their real currency in safekeeping and use counterfeit money for “exchange”. He continued, “Although the whole world has eradicated counterfeit money, North Korea is still far behind”.

At Dandong’s economic development zone, a Chinese tradesman said “The U.S. alleges that it will eradicate the counterfeit money, but there has been little change. The value of the counterfeit money at $70 is not depreciating”.

On the one hand, tradesmen say “Apart from the supernotes manufactured by North Korean authorities, computer-made supernotes have been discovered and rejected as a means of business.”

At present, it is difficult to estimate how much counterfeit money is circulating around North Korea. However, if the counterfeit money is accepted amongst common traders at Jangmadang, this means that the counterfeit currency has reached a large scale and is spreading further.

This substantiates the failure of the North Korean authority’s implementation of foreign transaction of the Euro in December, 2002.

Last July, at the Interpol Conference on counterfeit money in Riom, France, North Korea was marked as “a hotbed of counterfeit money”. It is expected that the U.S. will take drastic measures to control the counterfeit dollars circulating throughout North Korea as official currency.

Joong Ang Daily
August 01, 2006

With North Korea more isolated than ever from the international community over its nuclear program and recent missile launches, Pyongyang is taking steps to tighten controls on its people in a bid to show it can defy the international community, North Koreans interviewed in Beijing said.

“It seems that we have to sing the revolutionary songs again,” said one North Korean in Beijing, saying it was time for his country to get mentally tougher. “Nobody listens to us, thus the only way left is to stick together,” the North Korean said.

If Pyongyang hoped to gain more concessions in nuclear negotiations and resolve the issue of financial sanctions imposed by Washington on Banco Delta Asia through its missile launch, the results have been the opposite.

A United Nations Security Council resolution backed by Pyongyang’s long-time ally, Beijing, was adopted. The Bank of China also froze North Korean accounts at its Macao branch, a Korean lawmaker has said.

In addition, a senior official of the United States Treasury Department said recently, Singapore and Vietnam have made commitments to clamp down on illicit North Korean financial activities such as money laundering.

A source in Seoul who is familiar with North Korea’s circumstances said yesterday that Pyongyang has decided to halt exchanges with the outside until April of next year. The Arirang Festival scheduled for this month has already been cancelled.

Experts said a series of economic measures aimed at reviving the North’s ailing economy, which have been underway since 2001, will also likely be put on hold.

“Inside the North, there are even some calling for a halt of the Kaesong Industrial Complex and the Mount Kumgang tours,” said the source, who added that large numbers of North Korean college students are submitting requests to enlist in the military.

Recently, a senior North Korean official on a visit to Beijing said the North is fully prepared to engage in “a march of suffering.” Recent rhetoric coming out of Pyongyang reflects a war-like atmosphere in the country. The state-run Rodong Sinmun has warned that “invaders would be swept away by the fierce anger of the country.”

A government official in Seoul yesterday admitted that in the short run, diplomatic efforts to lure Pyongyang back to nuclear negotiations would be tough. “We are in a difficult situation, but what else can we do but try?” said the official.

Nautilus Institute
Nathaniel Aden
August 2006

Paper here: Nautilus-Aden.pdf
web link here

Abstract:  China is North Korea’s largest international trading partner. Since 1995, energy and fuels have dominated bilateral trade between allies.  North Korea is a net importer of Chinese crude oil and oil products; however, it became a net exporter of electricity and coal to China in 2003.  Whereas North Korean coal and electricity exports are sold at sub-market “friendship prices,” Chinese coal and oil products have been sold to North Korea at premium prices.  Over the past ten years, North Korea’s imports have become increasingly energy-intensive, while exports have become more labor-intensive.  Chinese customs data suggest that Beijing is taking a pragmatic, market-oriented approach to trade with its reclusive neighbor, while the increasingly asymmetrical energy embodiment of bilateral trade may reflect dilapidation of North Korea’s non-military industries.

Bullet Points:
1.  In 2005, bilateral trade with the PRC accounted for 39% of North Korean international trade by value.

2. North Korean trade data are compiled by partner-country Customs Bureaus, the United Nations, and the Internaitonal Monetary fund (IMF).  China and South Korea provide the best “mirror” statistics.  Customs data do not include aid shipments, official development assistance, direct government transfers, foreign direct investment, services, remittances, barter trade, smuggling, illicit trade, trade in military equipment.

3.  The DPRK has spent an increasing amount of money on diminishing quantities of energy imports, particularly Chinese crude.  The decline of energy import volumes in the face of increasing overall imports and trade may reflect demand sensitivity to increased international market prices and/or North Korea’s lack of hard currency with which to purchase imported energy and fuels.

4. The DPRK has significant, ongoing refining capabilities.

5. Between 1985 and 2002, the DPRK domestic coal production has declined from 37.5 million tons to 21.9 million tons.  Nonetheless, North Korea increased its export quantity to 2% of total domestic production since 2002. 

6.  Starting in May 2005, North Korea has been an uninterrupted monthly electricity exporter.  Hydropower may account for much of the DPRKs surplus electric power.

7.  Energy prices reflect the pragmatic, market-oriented character of China’s economic relationship with North Korea.  North Korea may be providing China coal at subsidized prices, below those of China’s other trading partners.

8.  North Korea coal export prices show an awareness of market prices starting in 2002.

9.  The DPRK has consistently paid premium prices for Chinese oil product exports over the last ten years.

10. Aside from politically-determined prices, several conditions could explain this: 1.  Real factors (transport costs, demand, goegraphy) 2. Pyongyang’s insulation from market realities 3.  No DPRK leverage.

11. In 2005, North Korea imported $2omillion worht of trucks, $2 million worth of cars, $1 million of tractors.  The transport sector has not grown significantly since 1995.

12.  Shift of DPRK trade towards energy-intensive imports and labor-intensive exports suggests deterioration of non-military industry.

From the Donga:

The Chinese Government is hurriedly working on making the world recognize Mt. Baekdu (or Mt. Changbai in Chinese) as Chinese territory.

The Wenhui Newspaper of Hong Kong reported on July 30 that China has decided to register Mt. Baekdu on the World Geopark list designated by the United Nations Educational Scientific and Cultural Organization (UNESCO).

The Jilin Provincial Government of China has so far made efforts to get Mt. Baekdu registered as a world natural heritage site by the year 2008 when Jilin hosts the general assembly of the UNESCO World Heritage Committee. It might be fair to call this the “Mt. Baekdu Project” of incorporating the old territory of Goguryeo, an ancient Korean kingdom, into Chinese history, as it follows the Northeast Asia Project that focused on incorporating its history into China’s.

Back in 1980, China got Mt. Baekdu designated as a UNESCO Man and Biosphere (MAB) zone; the State Council designated Mt. Baekdu as a national-level natural protection zone in 1986 and has since managed it.

Mt. Baekdu has long been managed by the Yanbian Korean Autonomous Prefecture, where people of Korean origin collectively reside. Last year, the Jilin Provincial Government established the “Committee for Protection, Development and Management of Mt. Changbai,” an organization directly belonging to the provincial government and responsible for management of the mountain.

In a meeting with the “First Delegation of Chinese Internet Journalists Visiting Jilin” on July 22, Vice Director Li Zhanwun of the Committee said, “Mt. Changbai ranked second out of 17 places on the preliminary list of the nation’s cultural and natural heritage that the National Construction Ministry announced for the first time in January. Protection and development of the areas near Mt. Changbai has entered a new phase of development.”

The Committee plans to inject two billion Yuan (approximately 240 billion won) to develop the western slope of Mt. Baekdu on the Chinese side and open it around the year starting 2007.

Mt. Changbai Airport, which is currently being constructed in Fusong County 36 kilometers away from the North Korean border, is scheduled to open before the 2008 Beijing Olympics begins. The Jilin Provincial Government is also sparing no investment to expand the transportation networks near Mt. Baekdu, and is planning to complete construction of the Mt. Changbai Eastern Railroad, three highway networks and circular roadways in the next three years.

The Chinese National Tourism Agency and the Jilin Provincial Government recently held the first tourism festival near Mt. Baekdu; they are also active in attracting tourists from Russia and other foreign countries by holding the Yanbian Korean ethnic exposition. They also seek to stimulate the economy by developing mineral water in the areas nearby Mt. Baekdu and expanding cultivation of ginseng there.

Meanwhile, the Chinese government is reportedly seeking to register as UNESCO world cultural heritage the remnants of the Sanggyeong Yongcheonbu, which is the old capital of another ancient Korean kingdom—Balhae—located in the Bohai Bay, Ningan City, Heilongjiang Province.