Kaesong “wages” rise by 5%

August 6th, 2012

According to the Daily NK:

An agreement has been reached that sees the minimum monthly wage for North Korean workers in the Kaesong Industrial Complex rise by 5% to a little over $67.

According to information released by the Ministry of Unification today, the wage increase was negotiated by the Kaesong Industrial Complex Management Committee and the North Korean ‘Central Special Economic Zone Development Bureau’.

In accordance with the agreement, which will remain in force until the end of July next year, the wages of workers will rise from $63.80 to $67.05 per month.

Kaesong Industrial Complex regulations stipulate that wages may not rise by more than 5% per annum, and since 2007 they have risen by exactly that amount year-on-year.

At the end of May this year, there were 123 South Korean companies operating in the zone, employing a total of 51,452 North Korean staff.

According to the Ministry of Unification, when all payments and bonuses are taken into account, the average wage per North Korean worker in the complex was $110 per month in 2011, a figure that has risen to $130 in the first half of this year.

There has long been controversy over the fact that the North Korean authorities take a percentage of the wages of Kaesong Industrial Complex workers in taxes. However, even taking this into account, such workers are known to be better off than the vast majority of average North Koreans.

The only edit I would make to this story is to change the phrase “percentage of the wages of Kaesong Industrial Complex workers in taxes” in the above paragraph to “nearly all of the workers’  monetary income in taxes”.

See Yonhap coverage here.

Read the full story here:
Kaesong Monthly Wages Rise by 5%
Daily NK
Park Seong Guk


DPRK: WFP Sends Food To Flood-Hit Regions

August 5th, 2012

Pictured above: UN World Food Program map of affected areas.

According to the World Food Program web page:

WFP is sending a first batch of emergency food aid to flood-hit areas in the south of Democratic People’s Republic of Korea (DPRK) where torrential rains have left 88 people dead and over 60,000 people homeless.

The emergency food assistance will provide the flood victims with an initial ration of 400g of maize per day for 14 days.

Storms and heavy rain across the country between 18 and 29 July have caused widespread flooding, and in some places severe damage to homes, infrastructure and farmland. The most affected counties are Anju City and Songchon in South Pyongan Province, and Chonnae in Kangwon province.

A UN mission recently which recently travelled to flood-affected regions found considerable damage to maize, soybean and rice-fields damage (Read report). WFP continues to monitor the situation.

A comprehensive assessment of the food situation and of prospects for food production is scheduled for September.

The New York Times also reported on this story.

UPDATE 1 (2012-8-6): Vietnam is donating food to the DPRK.

UPDATE 2 (2012-8-7): The Red Cross is distributing aid in the DPRK.

UPDATE 3 (2012-8-8): The UN has created a portal through which all of the UN agencies are posting information. See it here. See here information on “Who is doing what”.

UPDATE 4 (2012-8-10): China donates US$1 in assistance to the DPRK.


Friday Fun: Juche Strong

August 3rd, 2012

Juche Strong tells the story of the 2010 North Korean World Cup team. That summer was the country’s first Cup campaign in over forty years. And last time North Korea participated they beat perennial powerhouse Italy, in what is generally considered one of the greatest upsets in soccer history. Juche Strong lays out the many twists and turns of the 2010 outing, including a historic 7-0 throttling at the hands of Portugal, at least parts of which were broadcast live in North Korea. The film interlaces that story with a broader analysis of the DPRK’s propaganda apparatus — and posits that it’s much more powerful and well-designed than the average observer gives it credit for. The narrative crafted by the regime — of a morally pure Korean people struggling mightily against imperialist powers — effectively taps into deeply rooted Korean cultural norms and human psychological instincts.

The director, Rob Montz, visited and shot footage in North Korea this summer. The film also includes interviews with many North Korea scholars, including Bruce Cummings, David Kang, Stephan Haggard, Marcus Noland, and Suk-Young Kim, as well as a North Korea refugee now living in the States.

The film’s trailer is here and the official web page is here.


Kaesong Industrial Complex: Accumulative production output exceeds US$ 1.7 b

August 3rd, 2012

Institute for Far Eastern Studies (IFES)

Kaesong Industrial Complex (KIC) has recorded 1.7 billion USD in accumulative production output as of May this year. The first phase construction of KIC consisting of some 3.3 square meters was completed in July 2006.

According to a report submitted to the National Assembly on July 25, the Ministry of Unification (MOU) specified that, out of the 123 companies in KIC, there were 51,452 North Korean employees (as of May 2012) and the accumulative export reached 1.21 billion USD out of the accumulative production output.

Despite the severed inter-Korean ties from the May 24 sanctions of 2010, the KIC continued to operate while most economic cooperation, social and cultural exchanges and humanitarian aid were halted.

The report also included MOU’s pledge to continue to support for stable development of KIC consisting of building fire stations and emergency medical facility and road repairs, among other measures.

Currently, there are water purification and supply plant (30,000 ton/day), waste water treatment plant (15,000 ton/day), waste landfill (60,000 ㎥), and waste incineration plants (12,000 ton/day) in operation and health and safety facilities such as police and fire stations, Green Doctors Hospitals are in the vicinity. Power is provided by South Korea with 100,000 kilowatts capacity power supply system.

In addition, MOU announced that it will continue to coordinate with North Korea to improve transportation, communication and customs system at the next meeting, and engage in negotiation to solve other issues including improvement of personal safety and labor shortages.

MOU also claimed it is making efforts to obtain the “Made in (South) Korea” labels for the products made in KIC for FTAs (Free Trade Agreement) with the EU, United States, and China. MOU officials are also a part of the South Korean FTA negotiation team.

Currently, the top agenda for the KIC is housing for North Korean employees. Unification Minister Ryu Woo-ik stated, “While I understand the positions of both North and the South, in which South Korean companies are in need of more labor and North Korea wants for more employment opportunities, dormitory construction for employees is a large-scale project similar to building a new town. Therefore, it must be coordinated carefully with North Korea to find the best solution.”


DPRK arrivals in the ROK down in 2012

August 3rd, 2012

UPDATE (2012-8-3): Although just a month has passed since we received information on the number of North Koreans entering the ROK. According to the Choson Ilbo:

The number of North Korean defectors arriving in South Korea in the first half of this year dropped to half that of the same period last year. According to the Unification Ministry on Thursday, 751 defectors arrived from January to June, down 45.4 percent from 1,375 on-year.

The number of defectors arriving here mostly rose every year since 2001, when it first exceeded 1,000. The figure only dropped in 2005, by 27 percent, and in 2010, by 19 percent. But this is the first time that the number has fallen so drastically

ORIGINAL POST (2012-7-1): According to a report in Yonhap:

The number of North Korean defectors to South Korea tumbled 43 percent in the first five months of 2012 from a year earlier due to increased security along the North Korea-China border, the Seoul government said Sunday.

A total of 610 North Korean defectors arrived in South Korea in the January-May period, down 42.6 percent from the same period last year, according to data from the Unification Ministry, which handles inter-Korean affairs.

The number of arrivals in the January-May period last year reached 1,062, with the full-year total rising to 2,706.

January recorded the largest number of arrivals this year at 160, while February recorded the smallest number at 90, the ministry said. Last year, the number of monthly arrivals surpassed 200 in nine out of 12 months.

There are now more than 23,500 individuals of North Korean origin in the ROK.

Question to ponder: Does a decrease in emigration from the DPRK promote stability or instability for the North Korean system?

Previous posts on this topic here.

Read the full story here:
N. Korean defector arrivals drop 43 pct this year


DPRK cuts official food rations

August 2nd, 2012

According to the Daily NK:

World Food Programme reports during the month of July, North Koreans received only half the amount of recommended food, rations have been reduced down to half what they should be 300 grams per day.

Between drought and flood damage, crops have suffered and the distribution system is failing to meet the needs of the people.

Due to unrelenting poor weather condition this past July, North Korean food rations per person, already at the minimum recommended amount, were cut in half.

United Nations affiliated organization, the World Food Programme (WFP) recorded that from July 1st until the 15th, food distribution in North Korea was 370 grams per person per day, but during the second half of the month rations were reduced to a mere 300 grams, revealed a Voice of America broadcast two days ago. The World Food Programme puts the recommended amount of food per day at 600 grams minimum.

According to a North Korean based-WFP local official, rations consist of 20-30% rice and 70-80% corn. During the summer, barley, potatoes, wheat and other crops are included in the distribution.

From January until March, rations were maintained at 395 grams per person, and in April they were increased to 400 grams. In May, rations were reverted back to 395 grams and June again saw a slump, down to 380 grams per person.

The WFP attributes the decline in rations to various natural disasters, such as drought and flooding have led to extensive damage of cropland across North Korea.

The WFP estimates these ration shortages will continue to be severe until harvest time arrives in November.

The flip side of this story is that North Koreans obtain the majority of their food from private and black markets.

The Daily NK tracks rice prices in the DPRK here.

Read the full story here:
WFP Reports July Rations Cut in Half at NK
Daily NK
Kim Tae-hong


The DPRK and USA women’s football teams face off in the Olympics

July 31st, 2012

UPDATE: The USA won, 1-0.

ORIGINAL POST: I am watching the game now.

The DPRK team has some amazing skills:


North Korea presents favorable conditions to foreign investors

July 30th, 2012

Institute for Far Eastern Studies (IFES)

The Beijing branch of the Joint Venture and Investment Committee of North Korea (JVIC), called the Choson Investment Office, announced on July 18 of various preferential conditions to foreign investors and employment conditions on its website.

The Choson Investment Office opened its doors this year and is the only overseas branch of the JVIC, in charge not only of securing foreign capital but cultural and science and technology exchanges and cooperation.

The website posted an article titled, “Problems Investors Face,” which provided useful information for foreign investors in a question and answer format.

In the article, the employment conditions for workers were included. The minimum monthly wage for workers in North Korea was set at 30 euros or about 42,000 KRW. In addition, foreign companies must pay 7 euros to each employee separately as social insurance. Overtime pay also needs to be paid and at the event of work related injuries or illness, the company is responsible for handling the situation with its board of directors.

In comparison, the minimum monthly wage for North Korean employees in the Kaesong Industrial Complex (KIC) is 110 USD or about 125,000 KRW.

As for preferential tax policies, foreign-capital companies that are not joint venture are exempt from certain taxes including tariffs on exports and resource tax for the development of mines.

North Korea will bear the land use tax, which is 1 euro per square meter, and China and other foreign investors will have no restriction for mining the underground resources.

The income tax rate for the foreign capital companies was specified at 25 percent and business tax between 2 to 10 percent will be collected from transportation, power, commerce, trade, finance, insurance, tourism, advertisement, hotel and entertainment industries.

Power is the main concern for most foreign companies and it will be provided at 0.053 euro per 1,000 kilowatt. The DPRK’s central trade guiding organ will oversee the setting of prices of goods while the trademark rights will belong to the company.

The DPRK’s Joint Venture and Investment Committee was expanded and reorganized in July 2010 from Joint Venture and Investment Bureau, with main activities centered around Hwanggumpyong Island and Rajin-Sonbong development.

The main agents for foreign currency earnings are the cabinet, military, JVIC, and Daepung International Investment Group*. Most of the trading companies are affiliated with one of the four groups.

In March, JVIC announced through the KCNA that “As the investment environment is favorably changing, joint venture and investment contracts are increasing. Investment interests from large companies are rising especially in our abundant rare-earth and underground resources as well as building railroads, roads, and power plants.”

*IFES and Choson Exchange previously discussed the merger of JVIC and “Daephung”


DPRK denies economic and international policy changes

July 29th, 2012

UPDATE 3: See Chris Green’s comments here.

UPDATE 2: See Geoffrey See’s take at Choson Exchange.

UPDATE 1: See Evan Ramstad’s coverage of this story in the Wall Street Journal.

ORIGINAL POST: Following the spread of speculation in the West that the DPRK is in the midst of re-calibrating some of its economic policies (see here, here, here,  here, and here), KCNA issued a public rebuttal (and took a swipe at deaf and blind people through some strange metaphors). According to the article (2012-7-29):

To Expect ‘Change’ from DPRK Is Foolish Ambition: Spokesman for CPRK

Pyongyang, July 29 (KCNA) — A spokesman for the Committee for the Peaceful Reunification of Korea gave the following answer to a question put by KCNA Sunday in connection with the fact that the south Korean puppet group is talking loudly about the DPRK’s “policy change” and “reform and opening”:

The army and people of the DPRK are dynamically advancing toward the final victory full of fresh conviction and vitality with a great honor and pride of holding in high esteem Kim Jong Un, supreme leader of the party, army and state, as DPRK Marshal.

They are bringing about remarkable events one after another in high spirit and stamina while demonstrating over the world the dignity and might as a power which is carrying forward the tradition of Mt. Paektu. This stirring reality is greatly admired by the whole world.

Upset by this, the puppet group let experts in the north affairs and others interpret the stirring situation of the DPRK in a self-centered manner, vociferating about “signs of policy change” and “attempt at reform and opening”. This ridiculous rhetoric only revealed its ignorance and sinister intention against the DPRK.

As far as “signs of policy change” are concerned, there can not be any slightest change in all policies of the DPRK as they are meant to carry forward and accomplish the ideas and cause of the peerlessly great persons generation after generation, to all intents and purposes.

The DPRK is putting forward new strategic and tactical policies in keeping with the changing and developing situation in each stage of revolution. The puppet group is describing it as a “policy change” and tried to give impression that the present leadership of the DPRK broke with the past. This is the height of ignorance just like a deaf person saying in his favor.

Read the rest of this entry »


North Koreans visiting China rose in 2011

July 29th, 2012

According to Yonhap:

The number of North Korean visitors to China increased drastically since then-North Korean leader Kim Jong-il’s tour of the North’s biggest communist ally early last year, Chinese government data shows.

The data on the entry of foreigners obtained Sunday by Yonhap News Agency showed that 152,000 North Koreans entered China in 2011, a sharp rise from 116,000 the previous year. Out of the total, 114,000 were businessmen and laborers.

The comparable figures were 116,000 in 2010, 103,000 in 2009, 101,000 in 2008, 113,000 in 2007 and 110,000 in 2006.

The sharp rise is attributed to the visit to China by late North Korean leader Kim Jong-il in May last year, apparently to enhance bilateral economic cooperation.

The Beijing government said at the time that Kim was invited “so he could have the chance to grasp the developments in China and make the most of them for the development of North Korea.”

The number of North Korean visitors to China will likely increase further this year as China has received 88,000 North Koreans for the first six months this year alone.

Read the full story here:
N. Korean visitors to China rise drastically since last year: data