North Korea is focusing more on diversified development of its economy and pushing regional industries to play a greater role in earning foreign capital, Pyongyang watchers said Sunday.
Observers in Seoul said that the Oct. 31 issue of “economic research” published in the North highlighted the need for regional governments to generate more revenue, bolster industrial output and earn more foreign capital.
According to papers in the research journal that offer a glimpse into how Pyongyang wants to run the country, factories in the provinces must strive to modernize and form close knit alliances with industries located in the capital city and with laboratories.
This call is similar to a speech given by Vice Premier Ro Du-chol on Wednesday at a ceremony marking the 40th anniversary of regional governments being given authority to generate profits and manage their respective budgets.
The senior official stressed that all cities and counties need to do their utmost to improve their economies and come up with necessary policy plans.
Such a move calls for redoubled efforts to attract overseas investments in mineral mines and other manufacturing facilities.
Ro’s remarks have been interpreted as Pyongyang paying more attention to regional economies and getting local authorities to take charge of providing for its citizens, instead of relying on the central government.
Related to such calls, the North recently announced that it will set up a total of 14 special economic zones across the country to pursue economic growth and bring in more investments. At present the communist country only has four such special zones, including those set up in Kaesong and the Mount Kumgang resort.
“There has been a trend coming into this year of the North paying closer attention to building up its regional economy,” said Cho Bong-hyun, an analyst at the IBK Economic Research Institute. The North Korean expert said that this may be a move by the North to bring about results on the economic front under the Kim Jong-un leadership.
Kim, who took over running the country following the sudden death of his father in late 2011, has called for the simultaneous development of the country’s nuclear capability and its economy.
This move is seen as a departure from the “songun,” or military-first politics, pursued by his late father, Kim Jong-il.
Read the full story here:
N. Korea focusing more on regional development: research journal
North Korea is a curious case among Parties to the United Nations Framework Convention on Climate Change (UNFCCC). It is not an active member of any specific negotiating bloc and has been a sporadic attendee at UNFCCC Conference of Parties gatherings, where its delegates are generally silent participants. Why then does North Korea engage with the international climate change regime?
We do see a rhetorical commitment in reporting documentation, along with various capacity-building programs, which do have greenhouse gas mitigation as a spin-off effect. However, it is the capacity-building dimension that appears to be the primary motivation for North Korea’s UNFCCC engagement. We know that the DPRK has agricultural productivity problems independent of climate vulnerability in terms of soil infertility, land degradation and labour-intensive production in addition to its small arable land base.
North Korea’s reporting documents to the Rio Conventions (a regime made up of the UNFCCC, the UN Convention on Biological Diversity, and the UN Convention to Combat Desertification) strongly emphasise capacity-building to address these weaknesses. The documents refer to hillside land reclamation, seed propagation and selective breeding programs to produce crops with greater climate tolerance, as well as programs to improve the efficiency of pre- and post-harvest cultivation practices and soil fertility-building projects.
It is also evident that North Korea is using the UNFCCC as a vehicle to upgrade its energy sector. North Korea’s energy sector problems are well known, plagued by problems like liquid fuel shortages, bottlenecks in coal supply chains for electricity generation, and poor electricity generation and transmission infrastructure, all of which is a significant drag on the national economy.
The UNFCCC offers capacity-building opportunities for North Korea’s energy sector through the Clean Development Mechanism (CDM), which is one of the key mechanisms for cooperative greenhouse gas abatement embedded within the Kyoto Protocol. The CDM was designed with the dual purpose of assisting developed states to comply with their emission reduction commitments, and assisting developing countries with sustainable development.
North Korea has six verified CDM projects which consist of developing hydropower installations in partnership with Topič Energo, a Czech company. There are further projects under consideration in the CDM verification process. Indeed, the CDM contains a number of compelling possibilities for North Korea, including opportunities for foreign direct investment and technology transfer to upgrade the North Korean energy sector.
Some suggest that North Korea is milking the CDM as a source of foreign currency revenue through the sale of carbon credits. CDM projects create certified emission reduction credits that developing country parties can sell in international carbon markets. Yet a quick appraisal of the numbers indicates why revenue potential is unlikely to be North Korea’s primary motive for CDM participation: North Korea’s CDM projects have generated just under 200,000 carbon credits, which are worth just over US$1 million at the July 2013 EU carbon market spot price of between US$5–6 per ton. This is clearly not a large revenue source, though there is potential for revenues to increase as North Korea’s CDM portfolio expands.
It was recently confirmed that North Korea has passed the International Railroad Cargo Law, Decree No. 2041 at the Presidium of the Supreme People’s Assembly on December 14, 2011. Under this law, foreign investors in the country are provided legal protection of civil rights and interests.
The Law consists of chapters on the fundamentals of the International Railway Cargo Law; planning and contracts for international railway cargo; and transporters of international railway cargo. According to the law, international railroad business will be placed under the jurisdiction of the “Central Railway Transport Guidance Agency,” and will be accountable for all freights of exports and imports going in and out of the country.
The law proclaimed, “There will be strict system and order in the international railway freight system to ensure smooth transports of goods.” Specifically, the international railroad freight plan, A national planning agency will establish annual plans by quarterly and deliver it to the “Central Railway Transport Guidance Agency,” and the agency will make detailed monthly reports and transfer that information to relevant institutions, enterprises, organizations who used the railroad.
The transport contract is to be made between the transporting company and the owner of the freight and it must bear product name and quantity of the cargo being shipped, departing and arriving border stations, sender and receiver of the cargo, conditions and period of transport. In the law, it also explains export or import of prohibited materials or items that may interfere with the international railway cargo will be strictly restricted.
The law also states, the transporter must notify the recipient of the cargo two hours before the cargo arrives at the final destination, and in case of, delay or loss of goods, compensation for damages must be provided. The amount of compensation cannot exceed the amount of all the goods combined. The cargo owners must pay the transporting company for the services and prices incurred for transporting cargos and wages for labor. The cost will be determined by the State Price Commission.
Violation of contract will allow transportation agencies to claim indemnity for the damages and must submit documents with amount and grounds for claim, documents for transporting goods, and filed accident report at the station by a fixed date and submit the dossier to the railway transport authorities. The railway transport agency must process the claim within three months from the date of report.
The law also provides details on sanctions and conflict resolution. If a delay occurs, the party that is responsible must pay compensation for delays or those that interfered with the normal transporting operation, the law provides for administrative and criminal liability to the responsible party. As for conflict resolution, any disputes should be resolved through negotiation, but for those cases that are not resolvable, it must be resolved through arbitration or by trial.
This law is considered as a measure in preparation to revitalize the railway projects with Russia and China.
UPDATE 3 (2013-11-14): North Korea accelerating economic reforms? Wages and prices to be self-regulated (IFES):
North Korea appears to be pushing for internal economic improvement measures. Chosun Sinbo, the pro-North Korean newspaper in Japan, released an article on November 6 that discussed various performance-enhancing management and operational changes that took place at the Pyongyang Essential Foodstuff Factory this year.
Chosun Sinbo referred to Kim Jong Un’s speech made last March at the plenary meeting of the Central Committee of the Workers’ Party about improving economic management and named the recent changes at the food factory as a pilot project for this purpose. The news article added that “There are studies to bring fundamental changes in economic management and specific measures are being made to turn this into a reality.”
The main systemic changes made at the Pyongyang Essential Foodstuff Factory were the increase in autonomy of the company and the enforcement of wage differential based on performance. Based on the principle of cost compensation, prices of products produced with raw materials at the factory may be freely adjusted after consulting with the state.
The news article further explained that “The principle of socialist distribution is a simple system of distributing as much as you earn and the cost of living is determined by labor productivity.” It also reported that some of the employees’ wages increased. Such news is likely intended to advertise to the outside world about North Korea’s changing domestic economic policies.
The North Korean economic journal Kyongje Yongu has also been increasingly reporting on the principle of distribution based on economic performance. In the recent issue published on October 30, 2013 (issue No. 4), an article titled “The Principle Problem of Properly Implementing the Socialist Labor Wage System” criticized the equalization of product distribution as it decreases the enthusiasm of workers toward production: “The strength and life used during the process of labor must be compensated through the principle of earning the amount of your labor.” The article stressed that wages must increase with production and rationalized the need for such wage increase.
Chosun Sinbo and Kyongje Yongu articles reveal the long-term efforts by the North Korean government in enhancing research about economic improvement measures and expanding projects in various factories, companies, and cooperative farms to implement these measures.
Recently, North Korea launched the State Economic Development Commission and organized a number of international forums on special economic zones. These can be construed as possible signals toward economic reform, as North Korea continues to make various changes in its internal economic policies.
UPDATE 2 (2013-11-7): Another story of note in the Daily NK ties factory wage increases to the ability of enterprises to negotiate prices with the state:
Choson Sinbo, the regular publication of the pro-North Korea General Association of Korean Residents in Japan (Chongryon), has published news of a Pyongyang-based food factory being used as a testing ground for independent economic management. The enterprise fixes prices semi-independently in discussion with the state and pays increased wages, the piece, published yesterday, explained.
The publication conveyed, “Pyongyang Essential Foodstuff Factory became a test unit and conducted research in order to enact changes to overall economic management. They are currently implementing these.”
It continued, “Of particular note is the organization of production and economic management based on cost compensation principles and the socialist rules of division. Pyongyang Essential Foodstuff Factory has enacted the measures for themselves and prepared the collateral to allow for expansion and reproduction.”
“This factory has shed the state planning model and sources its own materials, and in discussion with the state it has been able to set its own prices as it sees fit. There is also a measure currently being adopted that provides monthly allowances in consideration of the labor of the employees,” it further emphasized.
However, a high-ranking defector was skeptical when asked about the piece, telling Daily NK, “These factories produce things like soybean paste, soy sauce, salt and side dishes. They have always played the role of distributor to the people, so there is no way that they would be able to just set prices how they wish on these products. It’s likely that the measures focus on work teams making apple and pear beverages, liquor and beer; things that do not relate to improving the lives of the people.”
UPDATE 1 (2013-11-7): The Daily NK follows up on the DPRK’s strategy to bring official wages in line with the price level:
North Korea’s decision to drastically increase the wages of workers in parts of the heavy industrial sector is designed to boost morale and improve productivity, the better to expand the country’s capacity to generate foreign currency income from investments in the exploitation of its mineral resources.
As exclusively reported yesterday by Daily NK, major industrial concerns in North Hamkyung Province such as Kim Chaek Iron and Steel Complex have raised wages by a factor of approximately one hundred, from a derisory 3,000 won per month, around half the market price of a kilo of rice, to 300,000 won. Thus far, 100,000 won of the total has been paid in cash and the remainder in kind in an attempt to head off the very real danger of dramatic price inflation that would result from 100% cash payments.
That such a substantial wage rise was only deemed feasible in enterprises with the potential to export primary or secondary resources for foreign exchange should not come as a surprise. Smaller domestic enterprises don’t have the liquid resources to take such a step. As with the Kaesong Industrial Complex, wages in cash and kind have always been more generous for workers in joint venture enterprises than elsewhere. The latest move reflects an extension of that reality.
At this early stage, experts believe that the measure is designed to create a business model for North Korea not unlike that on show at Kaesong, under which each province can improve its economic performance and attract greater quantities of foreign capital. By actively nurturing those rare businesses that are competitive in the regional environment, the country hopes to raise productivity overall.
A researcher with Industrial Bank of Korea, Cho Bong Hyun told Daily NK, “Raising salaries for enterprises in the minerals sector looks like an inevitable choice, since productivity couldn’t have been expected from light industrial enterprises when the operational level of most of those factories is so low.
Cho continued, “The Kim Jong Eun regime, which is currently concentrating on producing results in the economic sphere, made this decision based on the fact that for some time it has been earning foreign currency quite easily by exporting its mineral resources. They also hope that by raising salaries they can induce greater productive effort, since workers have not wanted to work properly since the public distribution system collapsed [in the 1990s].”
Yoon Deok Ryong, a senior research fellow with the Korea Institute for International Economic Policy added, “Kim Jong Eun has granted this autonomy to firms and raised wages in order to earn foreign currency and firm up his system. He wants to right the economy by discriminating in favor of businesses that are somewhat competitive.”
However, despite cautious enthusiasm for the latest step, the two experts cautioned that unless North Korea moves further in the direction of a market economic system, the measure might not prove effective.
Cho explained, “No matter how tightly the North Korean authorities seek to control economic activity, they will find it almost impossible to stop these wage rises inciting inflation and causing the value of the North Korean Won to nosedive even more. There is also the danger of conflict with between military and Party-Cabinet elements over the management of mineral resource enterprises that can be used to produce military goods.”
Yoon added that workers in enterprises excluded from the latest wage rises will not see the bigger economic picture, and will simply be aggrieved at there being no improvement in their own conditions. “Conflict is unavoidable,” he concluded.
ORIGINAL POST (2013-11-6): According to the Daily NK:
Wage levels for workers in some larger industrial enterprises have risen by a factor of approximately one hundred times, Daily NK has learned. The move, which was put forward as part of the “June 28th Policy” in mid-2012 and is designed to bring wages more into line with market price levels, appears designed to improve the productivity and competitiveness of major industrial concerns.
According to a source from North Hamkyung Province, the monthly wage of people working at Musan Iron Mine, Kim Chaek Iron and Steel Complex and Sungjin Steel Mill rose from an average of just 3000-4000 won up to 300,000 won in September and October. In an attempt to forestall the inflation that such a step would otherwise guarantee, 200,000 won of the payment is issued in goods, with just 100,000 won provided in cash.
The source explained to Daily NK on the 5th, “In September the order was handed down in the name of the State Economic Development Commission to Musan, Kim Chaek and Sungjin; it was about guaranteeing independence in terms of production and the authority to set salary levels. At the time most workers did not believe that they were going to be given a wage of 300,000 won, and are really surprised now that they are actually getting it.”
The source went on to assert that the same instructions have been handed down to all provinces, not only North Hamkyung. “Relatively more competitive” industrial enterprises in each province have been selected, he said, and are resetting wages at a higher level.
Explaining the system of payments in kind, the source said, “Because they are concerned about the danger of inflation being created by the wage rises, they give 200,000 won of it in rice, vegetables, side dishes, other necessities, and electronics. Only the remaining 100,000 won is given in cash.” Workers have been told “not to make purchases in public markets since the state is now providing for your daily needs,” although the instruction is not likely to be adhered to.
Predictably, the source revealed that the move has attracted attention from surrounding enterprises. “Workers who had been ‘off sick’ are coming back,” he said, “and workers from other enterprises have been descending on us after hearing that we are getting a lot of wages and other stuff.”
The move appears designed to increase the competitiveness of major industrial enterprises in North Korea, and to improve the attractiveness of joint ventures to companies in China.
At the time of writing, the dramatic wage increase has not generated rice price inflation in public markets in the North Hamkyung Province region. For example, the price of rice in Musan is currently stable at around 5,800 won/kg.
On this, the source concluded, “Because some of the wages have been given in kind, demand in markets will not rise for the time being.” However, he cautioned that later, when workers attempt to buy and sell the products they have received, instability and inflation could result.
Read the full story here:
Wages Rise 100x in Heavy Industry Daily NK
Lee Sang Yong
North Korea’s trade with China gained 4.4 percent from a year ago in the first nine months of this year, new data showed Tuesday, raising questions about the effectiveness of sanctions put in place to punish the North for conducting its third nuclear test earlier this year.
Trade volume rose to US$4.69 billion between January and September from $4.49 billion for the same period last year, according to the data released by the China Customs Information Center.
The data, seen by Yonhap News Agency, showed that North Korea’s exports to China jumped 9.4 percent to $2.09 billion during the nine-month period, while its imports from China fell 2.3 percent to $2.6 billion.
A South Korean diplomatic source in Beijing suspected that North Korea’s shortage of hard currency might be a factor for the decline in imports.
“North Korea’s lack of foreign currency may be partly attributable to the fall in imports of Chinese goods,” the source said on the condition of anonymity.
During the first nine months of this year, North Korea’s imports of Chinese crude oil, however, rose to 415,000 tons, compared with 402,000 tons for the same period last year.
China did not export crude oil to North Korea in June and July this year, but resumed crude exports in August, according to the source.
In August and September, China exported 165,000 tons of crude oil to North Korea, the source said.
Read the full story here:
N. Korea-China trade up 4.4 pct in Jan.-Sept. despite sanctions Yonhap
Bulgarian wines conquer an unusual new market: Two of our wineries will now export their products to the despotic North Korea, Standart daily reports, citing Executive Agency on Vine and Wine head Krasimir Koev.
One of the companies is Brestovitza, the first cooperative winery with 450 growers. The second firm that will export to the Communist country is from Dobrich. Our companies will pour the Asian country with red wines.
Bulgarian wines are also sought after in the other two new and fast-growing markets in North Korea’s region: these are China and Vietnam. Three BG companies have already taken a strong position in Vietnam, while 16 wineries are exporting to China. It is expected that this number will increase after an upcoming wine expo in Shanghai, where many of the Bulgarian companies will have the chance to attract new buyers from the Asian giant.
The Russian market is also about to take on large amounts of BG wines. Though it is a traditional niche for Bulgaria, but now the Bulgarian manufacturers will have to fill a new gap after it was revealed that Russia banned the import of wine from Moldova.
The Bulgarian wine sector is developing very well: only this year four new wineries were opened and one additional is expected to be started soon in Yambol, Krasimir Koev noted.
Read the full story here:
Bulgaria to export wine to North Korea Standart News
UPDATE 21 (2014-11-8): Kenneth Bae has been released. According to the New York Times:
Mr. Bae and Mr. Miller’s plane touched down Saturday night, backlit by a nearly full moon dimmed by fast-moving clouds. Mr. Bae emerged first, and was swarmed by about a dozen relatives and friends. He paused for hugs then continued inside, out of sight of the row of news cameras lined up about 100 yards away. After a few minutes, Mr. Miller came out, greeted by a smaller welcoming committee.
At a news conference, Mr. Bae thanked the Obama administration, officials in North Korea and everyone who prayed for him and his family while he was detained. “I just want to say thank you all for supporting me and lifting me up at the same time that I was not forgetting the people of North Korea,” he said.
Speaking of his ordeal, he said, “I learned a lot. I grew a lot. I lost a lot of weight, in a good way.” Some people in the room chuckled. “I’m standing strong because of you,” he added.
UPDATE 30 (2014-8-13): Kenneth Bae has been sent back to prison. According to the Voice of America:
American missionary Kenneth Bae has been transferred to a North Korean labor camp from a hospital, despite U.S. concerns that his health is worsening.
In an email sent to VOA’s Korean Service, a U.S. State Department official said Bae was transferred to a labor camp immediately after being discharged from his hospital on July 30.
“We remain gravely concerned about Bae’s health, and we continue to urge [North Korean] authorities to grant Bae special amnesty and immediate release on humanitarian grounds,” the email said.
The State Department official also asked for Bae to be moved back to the hospital in the interim.
The statement comes after Bae received a visit at the labor camp this week by officials from the Swedish embassy, which represents U.S. interests in North Korea in the absence of diplomatic relations between Washington and Pyongyang.*
The consular visit to Bae is the 12th such meeting since his arrest in November 2012 and the first in almost four months.
North Korea sentenced Bae to 15 years of hard labor in April 2013 for “hostile acts” against the regime. The Christian missionary was arrested while leading a group of tourists in the northern city of Rason.
Bae was sent to a hospital a year ago and stayed there through this past January. When his health worsened due to hard labor, he was hospitalized at the Pyongyang Friendship Hospital on March 29. The hospital was built in 1986 to treat foreigners in the country.
The Chosun Shinbo, a pro-North Korea newspaper in Japan, interviewed him late last month. The 46-year-old told the newspaper he would be sent back to a labor camp in the near future despite a worsening heart condition.
*To the best of my knowledge, I am unaware of the Swedes visiting Bae in prison. My sources inform me that these meetings generally take place in one fo the hotels in Pyongyang.
UPDATE 29 (2014-7-31): Kenneth Bae has done an interview (in Korean) for the Choson Sinbo. The interview took place at the Pyongyang Friendship Hospital in the Munsu-dong diplomatic compound.
UPDATE 28 (2014-2-9): For a second time, North Korea has rescinded an invitation for a special American envoy to visit Pyongyang.
In blocking the trip by Ambassador Robert King, Washington’s special envoy on North Korean human rights, North Korea again appeared to blame the tensions it said were caused by military exercises that the United States and South Korea are scheduled to begin this month.
Also, Mr. Bae has given another interview to the Chosn Sinbo. You can see it here:
Mr. Bae, speaking on Friday to a pro-North Korean newspaper based in Japan from his penal labor camp outside Pyongyang, said he had heard that Mr. King was to visit North Korea as early as this week to discuss his fate.
He told the newspaper, Choson Sinbo, that Pyongyang had extended an invitation to Mr. King. North Korea abruptly canceled a similar invitation for Mr. King in August, citing the military exercises as its reason.
The exercises are “transparent, regularly scheduled and defense-oriented,” Ms. Psaki said. “These exercises are in no way linked to Mr. Bae’s case. We again call on the D.P.R.K. to grant Bae special amnesty and immediate release as a humanitarian gesture so he may reunite with his family and seek medical care.”
She said Washington maintained its longstanding offer to send Mr. King to North Korea. Separately, under a request from Mr. Bae’s family, the Rev. Jesse Jackson offered to travel to Pyongyang on a humanitarian mission to help win Mr. Bae’s release, she said.
A resident of Washington State, Mr. Bae was arrested after he entered North Korea through the northeastern city of Rason with a group of visitors in November 2012. Using a tourism business as a cover, he was trying to build a covert proselytizing operation in Rason, according to a videotaped sermon he gave at a St. Louis church in 2011.
Mr. Bae was convicted of plotting to “destroy our system through religious activities against our republic,” according to North Korea’s authoritarian government, which has been in a suspended state of war with the United States for more than 60 years.
He was sentenced to 15 years of hard labor.
Mr. Bae, who had been convalescing in a Pyongyang hospital since the summer with various health problems, was transferred back to the penal work farm about three weeks ago, according to his family and Choson Sinbo.
UPDATE 27 (2014-1-20): Kenneth Bae has been brought out to make a public plea for help. According to the Associated Press:
Kenneth Bae, made the comments at what he called a press conference held at his own request. He was under guard during the appearance. It is not unusual for prisoners in North Korea to say after their release that they spoke in similar situations under duress.
Wearing a gray cap and inmate’s uniform with the number 103 on his chest, Bae spoke in Korean during the brief appearance, which was attended by The Associated Press and a few other foreign media in Pyongyang.
Bae, the longest-serving American detainee in North Korea in recent years, expressed hope that the U.S. government will do its best to win his release. He said he had not been treated badly in confinement.
“I believe that my problem can be solved by close cooperation and agreement between the American government and the government of this country,” he said.
Bae was arrested in November 2012 while leading a tour group and accused of crimes against the state before being sentenced to 15 years of hard labor. He was moved to a hospital last summer in poor health.
He made an apology Monday and said he had committed anti-government acts.
Bae said a comment last month by U.S. Vice President Joe Biden had made his situation more difficult.
“The vice president of United States said that I was detained here without any reason,” Bae said. “And even my younger sister recently told the press that I had not committed any crime and I know that the media reported it.
“I think these comments infuriated the people here enormously. And for this reason, I am in a difficult situation now. As a result, although I was in medical treatment in the hospital for five months until now, it seems I should return to prison. And moreover there is greater difficulty in discussions about my amnesty.”
“We shouldn’t take Kenneth Bae’s comments merely as his own,” said Kim Jin Moo, a North Korea expert at the South Korean state-run Korea Institute for Defense Analyses in Seoul. “The reason why North Korea had Kenneth Bae make this statement … is that they want Washington to reach out to them.”
“Bae’s comments are an appeal to Washington to actively persuade Pyongyang to release him,” Kim said.
Pyongyang, January 20 (KCNA) — An American criminal, Kenneth Bae, was interviewed by local and foreign reporters at the Pyongyang Friendship Hospital Monday at his request.
He said he called the press conference to clarify some facts.
Over the past 15 months he, through meeting with officials of the Swedish embassy and calls and correspondence with his family, he correctly informed the U.S. government and his family of his criminal acts and humanitarian measures taken by the DPRK government in his behalf, he said, adding:
But some media are spreading misinformation about me and launching smear campaign against the DPRK, driving me into a difficult situation.
For example, the U.S. vice-president, at a press conference over the release of another U.S. citizen, Mr. Newman, in December last year, claimed that I have been detained here for no reason.
Some time ago even my sister reportedly told reporters that I am not guilty. I think such facts enraged people here.
This is why I am in a puzzle.
Over the past five months I have been hospitalized, but now I am afraid I may be sent back to the labor camp. Worse still, I am afraid the pardon for me becomes more difficult.
To cite another example, I was told that some media reports alleged that the DPRK is a “human rights violator”, its human rights records are not good and that I have been treated unfairly.
What I would like to clarify here now is that there has been no human rights abuse and no unfair, severe act for me.
The DPRK government has done every possible thing for me from the humanitarian point of view. It allowed me to contact with the Swedish embassy and have correspondence and calls with my family. It also gave me an opportunity to meet my mother here and offered me a medical service at the hospital when my disease got worse.
I, availing myself of this opportunity, call on the U.S. government, media and my family to stop link any smear campaign against the DPRK and false materials with me, making my situation worse.
I hope that I will be pardoned by the DPRK and go back to my family. I request the U.S. government, media and my family to pay deep concern and make all efforts to this end.
Bae gave answers to questions raised by reporters.
Kenneth Bae marked a dubious anniversary over the weekend: it has now been one year since the U.S. citizen and Christian missionary was arrested and detained in North Korea.
That makes Mr. Bae the first known U.S. citizen to be detained longer than a year since the Korean War, according to the National Committee on North Korea, which has tracked the fates of this small circle of detainees.
It also raises questions about why Mr. Bae remains inside the country, much longer than Pyongyang tends to hold its U.S. prisoners. (Even the crew of the USS Pueblo, the U.S. Navy vessel captured by the North in 1968, was released after about 11 months.
The mother of Kenneth Bae, the U.S. citizen being detained in North Korea, finished a five-day visit to Pyongyang on Tuesday, but came away with little clarity on when her son might be freed.
In a statement released by the family, Myunghee Bae said that she was able to visit Mr. Bae three times during her stay, and that her son’s health had improved.
But she said the visit also made her “more anxious than ever to bring him home,” pleading with the U.S. authorities to “do everything in their power” to get her son out of North Korea.
While she was careful to thank the North Korean authorities for “generously” allowing her to visit, Mrs. Bae said “it broke my heart to leave him behind,” adding that “the pain and anxiety continue to carve a deep scar on all of our hearts.”
North Korea watchers and those in the diplomatic community have struggled to explain the North’s apparent unwillingness to release Mr. Bae, who has already been detained in North Korea longer than any U.S. citizen in recent memory.
North Korea gave an official reason for the sudden Aug. 30 cancellation of a planned by visit by US State Department special envoy for North Korean human rights Robert King, saying the decision was made because the US “sent out B-52 strategic bombers on the Korean Peninsula.”
The move is being read as a sign of displeasure with Washington refusing to accept Pyongyang’s offer of direct dialogue and demanding “good faith” steps on denuclearization.
The Korean Central News Agency quoted a North Korean Foreign Ministry spokesperson denouncing the US’s actions in an Aug. 31 talk with the press.
“We had planned to accept the special envoy visit by the US from a humanitarian standpoint and hold serious discussions here on the American currently undergoing reeducation,” the spokesperson reportedly said, referring to US citizen Kenneth Bae, who is currently serving time at a North Korean reeducation camp.
“The US has continued sticking its B-52H strategic bombing in the skies over the Choson [Korean] Peninsula for nuclear bombing drills [during South Korea-US joint military exercises]. By doing this, they instantaneously destroyed a long-awaited climate in favor of humanitarian dialogue,” the spokesperson was quoted as saying.
But experts said that the B-52 was likely to have been only a pretext for the discussion, and that the real aim was to deliver a message of displeasure – or warning – after the US failed to respond in “good faith” to Pyongyang’s dialogue overtures.
UPDATE 22 (2013-8-29): According to the Hankyoreh:
A US special envoy on North Korean human rights issues will visit Pyongyang on Aug. 30 to seek the release of Kenneth Bae, a Korean-American currently imprisoned in the country.
The visit by Robert King is the first official trip to North Korea by a senior US official since Kim Jong-un took power, and could mark a turning point in improving North Korea-US relations.
On Aug. 27, the US State Department issued a short, three-sentence press release about the visit but did not hold separate briefing on the issue. The release said that King would “request the DPRK [North Korea] pardon Mr. Bae and grant him special amnesty on humanitarian grounds so that he can be reunited with his family and seek medical treatment.”
King, who is currently in Japan after visiting China and South Korea, plans to board a military aircraft at a base near Tokyo for a two-day visit to Pyongyang. He is expected to return with Bae.
A senior U.S. envoy will travel to North Korea this week to seek the release of an American sentenced to 15 years of hard labor in the authoritarian country, the State Department said Tuesday.
The visit by Bob King, the U.S. special envoy for North Korean human rights issues, will be the first public trip to North Korea by an administration official in more than two years and could provide an opening for an improvement in relations severely strained by Pyongyang’s pursuit of nuclear weapons.
State Department spokeswoman Marie Harf said King will request a pardon and amnesty for 45-year-old Kenneth Bae on humanitarian grounds. Bae, a tour operator and Christian missionary, was arrested in November and accused of committing “hostile acts” against North Korea. He suffers multiple health problems and was recently hospitalized.
King is traveling at the invitation of the North Korean government. He will fly to Pyongyang on Friday from Tokyo on a U.S. military plane, and fly out on Saturday.
“We remain deeply concerned about the health and welfare of Kenneth Bae, the American citizen currently detained in North Korea,” the White House said in a statement. “We urge the government of North Korea to grant special clemency to Mr. Bae immediately and allow him to return home with Ambassador King.”
When King last visited North Korea in May 2011 to assess the impoverished North’s food situation, he came home with Eddie Jun, the last American to be held then freed by Pyongyang. Jun, a Korean-American from California, was arrested for alleged unauthorized missionary work during several business trips to the country. He was released on humanitarian grounds.
Bae’s sister revealed earlier this month that he was moved from a labor camp to a hospital after losing more than 50 pounds. Terri Chung, of Edmonds, near Seattle, says her brother, a father-of-three, suffers from diabetes, an enlarged heart, liver problems and back pain. He was born in South Korea and immigrated to the U.S. with his parents and sister in 1985. For the past seven years Bae has been living in China, Chung says.
According to U.S. officials, Washington first made its offer to send King to North Korea several weeks ago, but Pyongyang only recently took them up on the offer. Pyongyang has yet to declare it will release Bae.
UPDATE 20 (2013-8-11): Kenneth Bae transferred to hospital. According to the Telegraph:
Bae’s sister Terri Chung said that her brother had until recently been held at a prison for foreigners and put to work ploughing and planting fields.
However, he is suffering from a range of health problems including an enlarged heart and chronic diabetes as well as back and leg pain, necessitating his transfer to a state hospital, she said.
Chung said she learned of her brother’s transfer from the Swedish ambassador to North Korea, who visited Bae on Friday. The ambassador, who has met with Bae a handful of times since his detention, has been his only foreign visitor, Chung said.
UPDATE 19 (2013-7-19): Kenneth Bae is writing letters home. According to the New York Times:
The family of Kenneth Bae, the American sentenced to 15 years of hard labor in North Korea, received letters from him in the mail for the first time this past week, telling them that his health is worse and asking them to press the United States government to help secure his release, Mr. Bae’s sister said Friday.
North Korea experts said the message of the handwritten letters — and their method of delivery, which could not have happened without North Korea’s approval — suggested that the authorities there were open to the idea of negotiations on Mr. Bae. That had seemed remote three months ago when he was found guilty of committing “hostile acts” against the government.
North Korea said Mr. Bae, 44, was a Christian missionary who had sought to build a clandestine proselytizing base in the country, where the Communist government regards missionary work as sedition.
The possible opening in Mr. Bae’s case came against a backdrop of other indications that North Korea, despite its harsh public language toward the United States, is pursuing multiple ways of pushing for direct contact after months of threats and new weapons tests. So far, the Obama administration has resisted the overtures.
Mr. Bae’s sister, Terri Chung, said in a phone interview from her home in Edmonds, Wash., that Mr. Bae had been able to communicate a few times during his imprisonment, which began with his arrest in November, though those contacts were through intermediaries acting on behalf of Sweden’s ambassador in North Korea, who monitors American interests. Then weeks went by with no further word.
“This past week, we were surprised to receive a packet of letters from Kenneth through the U.S. Postal Service, bearing a Pyongyang postmark,” she said. “The packet contained four letters, dated June 13th, addressed to his wife, his mom, me and his supporters.”
She said that “all the letters contained the same message — Kenneth’s health is failing, and he asked us to seek help from our government to bring him home.”
Ms. Chung said her brother suffered from diabetes, an enlarged heart and back problems.
She declined to share the letters but said the family had conveyed their contents to officials at the State Department. Patrick Ventrell, a State Department spokesman in Washington, did not immediately return messages seeking comment.
Mr. Bae was sentenced at a time of particularly high tensions between the United States and North Korea over the North’s nuclear weapons program under its young new leader, Kim Jong-un, further complicating any possible diplomatic efforts aimed at securing Mr. Bae’s release.
North Korea said that Mr. Bae had been working as a Christian missionary with the aim of overthrowing the North Korean government. In a video of an hourlong talk, given to a Korean church in the United States in 2011 and posted online, Mr. Bae detailed his activities inside North Korea.
The postmark on Mr. Bae’s mailed letters to his family suggested they were written at about the same time that the North Korean authorities had permitted a pro-North Korea group based in Tokyo, Choson Sinbo, to interview him in prison. A videotape of that interview, broadcast July 3 on CNN, showed Mr. Bae looking distressed and thin, his head shaved, dressed in a stained blue jumpsuit with his prison number, 103. His message was similar to those in the letters: an appeal for the United States government to help secure his release.
“Although my health is not good, I am being patient and coping well,” Mr. Bae said in that interview. “And I hope that with the help of the North Korean government and the United States, I will be released soon.”
In what appeared to be an effort to show the outside world that the North Korean penal authorities had been treating him well, Mr. Bae was seen seated in a comfortable cell with a radiator and a window. The video also zoomed in on what was described as his daily work schedule, posted in Korean and English, showing he was given three meals and had four rest breaks in between field labor. No other inmates were seen at the prison, and its precise location was unclear.
Diplomats who have dealt with North Korea said the unspoken message in both the video and the letters was that the North Korean authorities wanted to see more publicity about Mr. Bae as part of their broader effort to seek direct contact with the United States government.
UPDATE 18 (2013-7-3): The DPRK has released video footage of Kenneth Bae and an interview. See CNN and NK News.
UPDATE 18 (2013-5-15): Kenneth Bae has been transferred to a prison. According to KCNA:
American Citizen Begins His Life at “Special Prison”
Pyongyang, May 15 (KCNA) — Pae Jun Ho, an American citizen, started his life at a “special prison” on Tuesday.
Pae was sentenced to 15 years’ hard labor for his anti-DPRK crime, an attempt to topple the DPRK, at the trial held on April 30, according to Section 60 (an attempt at state subversion) of the DPRK Criminal Law.
DPRK Supreme Court Spokesman Exposes Crimes of American Pae Jun Ho
Pyongyang, May 9 (KCNA) — A spokesman for the Supreme Court of the DPRK gave the following answer to a question raised by KCNA Thursday as regards the assertion made by the U.S. government and media about the alleged unreasonable legal action taken against American Pae Jun Ho who committed crimes against the DPRK, claiming that he was not tried in a transparent manner and it was trying to use this issue as a political bargaining chip:
Pae set up plot-breeding bases in different places of China for the purpose of toppling the DPRK government from 2006 to October 2012 out of distrust and enmity toward the DPRK. He committed such hostile acts as egging citizens of the DPRK overseas and foreigners on to perpetrate hostile acts to bring down its government while conducting a malignant smear campaign against it. He was caught red handed and prosecuted while entering Rason City of the DPRK, bringing with him anti-DPRK literature on Nov. 3 last year.
Pae visited different churches of the U.S. and south Korea to preach the necessity and urgency to bring down the DPRK government. He was dispatched to China as a missionary of the Youth With A Mission in April, 2006. After setting up plot-breeding bases disguised with diverse signboards in different parts of China for the past six years, avoiding the eyes of its security organs, he brought together more than 1 500 citizens of the DPRK, China and foreigners before whom he gave anti-DPRK lectures. He invited even south Korean pastors hell-bent on the moves to escalate confrontation with compatriots to give lectures for malignantly slandering the Juche idea of the Workers’ Party of Korea and the socialist system in the DPRK and instigating them to the acts to bring down its government.
He planned the so-called “Jericho operation” to bring down the DPRK through his anti-DPRK religious activities from December 2010 to March 2012. In order to carry out the plan he infiltrated at least 250 students who had been educated at the plot-breeding bases operated by him into Rason City under the guise of tourists. He failed to set up an anti-DPRK base at Rajin Hotel in Rason City.
He collected and produced several anti-DPRK videos to make the false propaganda sound plausible and showed them many people in a bid to egg them onto activities to bring down the DPRK government. He bribed Song Je Suk and other citizens of the DPRK on foreign tours in an effort to get them involved in activities to topple the DPRK government. He dared commit such hideous crime as hurting the dignity of the supreme leadership of the DPRK.
The DPRK Supreme Court held a trial of Pae at its court behind closed doors on Apr. 30, 2013 at his request in accordance with Section 270 of the DPRK Criminal Procedure Law.
As he refused pleading, the court did not allow the presence of a counsel, pursuant to Section 275 of the above-said law.
In the course of hearing Pae admitted all his crimes and they were clearly proved in an objective manner by evidence and testimonies made by witnesses.
The court sentenced him to 15 years of hard labor in consideration of candid confession of his crimes though they are liable to face death penalty or life imprisonment for an attempt at state subversion according to Section 60 of the DPRK Criminal Code.
Pae will be fully guaranteed the right as a prisoner according to the DPRK law while in jail.
Pyongyang, May 2 (KCNA) — A trial of Pae Jun Ho, an American citizen, took place held at the Supreme Court of the DPRK on April 30. He was arrested while committing hostile acts against the DPRK after entering Rason City as a tourist on Nov. 3 last year.
The Supreme Court sentenced him to 15 years of compulsory labor for this crime.
Pyongyang, April 27 (KCNA) — The preliminary inquiry into crimes committed by American citizen Pae Jun Ho closed. He entered Rason City of the DPRK on Nov. 3 last year for the purpose of tour and was arrested for committing crimes against the DPRK.
In the process of investigation he admitted that he committed crimes aimed to topple the DPRK with hostility toward it. His crimes were proved by evidence.
He will soon be taken to the Supreme Court of the DPRK to face judgment.
UPDATE 11 (2013-1-28): In the Korea Herald, Namkung refers to serious charges leveled against Mr. Bae:
“My understanding is that he has been accused of serious crimes including plotting to overthrow the regime and assassinating the leadership,” Namkung said in an email interview.
“Richardson’s hope was to see the detainee, Kenneth Bae, and if possible, bring him home. However, North Korea was not cooperative in this regard.”
For weeks, North Korea has refused to allow the United States government to contact a Korean-American man detained in the communist nation, the State Department said Friday.
“As we said about three or four weeks ago, we had contact through our Swedish protecting power. We have not been able to have another contact since then. We continue to ask,” department spokeswoman Victoria Nuland said at a press briefing.
She was responding to a question on Kenneth Bae, a Korean-American tour operator who was arrested by North Korea’s security authorities in early November.
UPDATE 9 (2013-1-11):Retuers reports that Richardson delivered a letter for Bae:
Richardson was unable meet with Korean-American Kenneth Bae, a 44-year-old tourist who was detained in North Korea late last year, but he said he was able to give a letter from Bae’s son to authorities.
“I delivered the letter to North Korean officials,” Richardson told Reuters on Friday. “They said they would provide that to him.”
UPDATE 8 (2013-1-10): KCNA reports that the Richardson delegation has left the DPRK:
Delegation of Google Inc. of U.S. Flies Back
Pyongyang, January 10 (KCNA) — The delegation of the Google Inc. of the U.S. headed by Bill Richardson, former governor of New Mexico State, left here on Thursday.
No reports of any meetings were reported while the delegation visited the DPRK.
The delegation did hold a press conference at Beijing Capital Airport. Bloomberg reports:
“As the world becomes increasingly connected, their decision to be virtually isolated is very much going to affect their physical world,” Schmidt told reporters today at the Beijing airport after the visit to the North Korean capital, Pyongyang. “The government has to do something — they have to make it possible for people to use the Internet, which the government in North Korea has not yet done. It is time now for them to start or they will remain behind.”
Schmidt said that North Korea’s existing mobile-phone network, operated in a joint venture with Orascom Telecom Media & Technology Holding SAE, could be retooled to offer Internet access. There are about 1 million phones on the network, Schmidt said.
“It would be very easy for them to turn that on,” Schmidt said.
Mr. Richardson said he told North Korea’s top vice minister for nuclear negotiations that Pyongyang should temper its nuclear-development efforts. “We need dialogue on the peninsula, not confrontation,” he told reporters. He also said he pushed Pyongyang for a moratorium on ballistic-missile tests, and that officials responded by insisting that the recent satellite launch was for peaceful reasons.
“I must say I personally disagree,” he said.
Mr. Richardson also said he pressed North Korean officials about an American who is being detained there, and was encouraged by their statements that judicial proceedings will begin soon and that the detainee’s health is good. It wasn’t clear whether Mr. Richardson’s delegation met with the detainee, 44-year-old Kenneth Bae, held since late last year on unspecified charges.
UPDATE 7 (2013-1-9): The Richardson delegation visited the Kumsusan Palace of the Sun. There are no photos or videos of this trip. No doubt Gov. Richardson would be nervous about pictures of him paying homage to the memories of Kim Il-sung and Kim Jong-il.
UPDATE 6 (2013-1-9): KCNA reports that the Richardson delegation is touring Pyongyang:
Delegation of Google Inc. of U.S. Tours Pyongyang
Pyongyang, January 9 (KCNA) — A delegation of the Google Inc. of the U.S. headed by Bill Richardson, former governor of New Mexico State, Wednesday visited the Grand People’s Study House here.
The guests went round several reading rooms and lecture rooms, being briefed on the fact that people and students acquire knowledge about modern science and technology and improve their cultural attainments at the study house.
They also visited the E-library of Kim Il Sung University, Korean Computer Center, etc.
The visit to Kim Il-sung University was featured on the 1-8 evening news. See it here.
The visit to the Grand Peoples Study house was featured on the 1-9 evening news. See it here.
Schmidt and Cohen chatted with students working on HP desktop computers at an “e-library” at the university named after North Korea founder Kim Il Sung. One student showed Schmidt how he accesses reading materials from Cornell University online on a computer with a red tag denoting it as a gift from Kim Jong Il.
“He’s actually going to a Cornell site,” Schmidt told Richardson after peering at the URL.
Cohen asked a student how he searches for information online. The student clicked on Google — “That’s where I work!” Cohen said — and then asked to be able to type in his own search: “New York City.” Cohen clicked on a Wikipedia page for the city, pointing at a photo and telling the student, “That’s where I live.”
Kim Su Hyang, a librarian, said students at Kim Il Sung University have had Internet access since the laboratory opened in April 2010. School officials said the library is open from 8 a.m. to midnight, even when school is not in session, like Tuesday.
While university students at Kim Chaek University of Science and Technology and the Pyongyang University of Science and Technology also have carefully monitored Internet access — and are under strict instructions to access only educational materials — most North Koreans have never surfed the Web.
Computers at Pyongyang’s main library at the Grand People’s Study house are linked to a domestic Intranet service that allows them to read state-run media online and access a trove of reading materials culled by North Korean officials. North Koreans with computers at home can also sign up for the Intranet service.
But access to the World Wide Web is extremely rare and often is limited to those with clearance to get on the Internet.
At Kim Chaek University, instructors and students wishing to use the Internet must register first for permission and submit an application with their requests for research online, Ryu Sun Ryol, head of the e-library, said.
But he said it is only a matter of time before Internet use becomes widespread.
“We will start having access to the Internet soon,” he said in an interview last month. He said North Korea is in the midst of a major push to expand computer use in every classroom and workplace.
UPDATE 5 (2013-1-7): Even though this delegation is run by Bill Richardson for “humanitarian” purposes, KCNA is emphasizing the business angle. Here is the KCNA report of the delegation’s arrival:
Delegation of Google Inc. of U.S. Arrives
Pyongyang, January 7 (KCNA) — A delegation of the Google Inc. of the U.S. headed by Bill Richardson, former governor of New Mexico State, arrived here on Monday by air.
Here is KCNA video that has been ripped and uploaded to You Tube:
UPDATE 4 (2012-1-5):Wired published a statement from Richardson’s office which details who is in the delegation:
Governor Bill Richardson will travel to North Korea next week on a private humanitarian mission. The delegation will consist of former New Mexico Governor Bill Richardson, Google Executive Chairman Eric Schmidt, Dr. KA Namkung, Director of Google Ideas, Jared Cohen; as well as some staff members.
Since no media is accompanying the delegation, Gov. Richardson will have a press availability at the Beijing Airport on Thursday, January 10th.
UPDATE 3 (2013-1-3): According to Reuters, the US Department of State has criticized the Richardson delegation to the DPRK. According to the article:
The State Department said on Thursday the time was not right for Google Inc Executive Chairman Eric Schmidt and former diplomat Bill Richardson to visit North Korea, which drew international criticism for a rocket launch last month.
State Department spokesman Victoria Nuland said Schmidt and Richardson would be traveling as private citizens, not representatives of the U.S. government.
“Frankly, we don’t think the timing of this is particularly helpful,” Nuland told reporters, citing North Korea’s launch of a long-range rocket in December. “They are well aware of our views.”
“We are obviously aware of the trip that has been announced,” [Nuland] said, later correcting herself to say that the department was aware of media reports about the trip.
“They are private citizens. They are traveling in an unofficial capacity,” she said. “They are not going to be accompanied by any U.S. officials. They are not carrying any messages from us. They are private citizens and they are making their own decisions.”
On Wednesday, Google did not respond directly to a question about whether Schmidt was going to North Korea, although a spokeswoman’s response suggested a visit would not be for company business.
UPDATE 2 (2013-1-2): According to the Associated Press, Bill Richardson is reportedly headed to the DPRK. Though the article does not mention it, he will likely be working for the release of Mr. Bae. The news of Mr. Richardson’s visit is overshadowed by his travel companion, Google’s executive chairman, Eric Schmidt. According to the article:
Eric Schmidt will be traveling to North Korea on a private, humanitarian mission led by former New Mexico Gov. Bill Richardson that could take place as early as this month, according to two people familiar with the group’s plans who asked not to be named because the visit had not been made public.
The trip would be the first by a top executive from U.S.-based Google, the world’s largest Internet search provider, to a country considered to have the most restrictive Internet policies on the planet.
UPDATE 1 (2012-12-21): The DPRK announces it has arrested another American. According to KCNA:
American Arrested in DPRK for Committing Crime
Pyongyang, December 21 (KCNA) — The Korean Central News Agency released the following report on Friday:
American citizen Pae Jun Ho who entered Rason City of the DPRK on Nov. 3 for the purpose of tour committed a crime against the DPRK. He was put into custody by a relevant institution.
In the process of investigation evidence proving that he committed a crime against the DPRK was revealed. He admitted his crime.
Consular officials of the Swedish embassy, which look after interests of the U.S. in the DPRK, visited him Friday.
Legal actions are being taken against Pae in line with the criminal procedure law of the DPRK.
Original Post (2012-12-13): The DPRK is allegedly holding another American citizen. According to the New York Times:
A 44-year-old American citizen has been held in North Korea for a month, a human rights activist in Seoul said Thursday, addressing unconfirmed reports that had circulated in the South Korean news media for several days.
The American, Kenneth Bae, runs a travel company that specializes in taking tourists and prospective investors to North Korea. He had visited the North several times without incident before being detained in early November, according to the activist, Do Hee-youn, who heads the Citizens’ Coalition for the Human Rights of North Korean Refugees, based in Seoul. Mr. Do said he had learned of Mr. Bae’s detention through a mutual friend in China.
South Korean news reports on Thursday said that Mr. Bae, a naturalized United States citizen born in South Korea, was detained after escorting five European tourists into North Korea through the city of Rajin on Nov. 3. The Europeans were allowed to leave the country, the reports said. North Korea operates a free-trade zone in Rajin, which is near the Russian border, but it has had difficulty attracting foreign investors.
Mr. Do said he had few details about the circumstances surrounding Mr. Bae’s reported arrest. The South Korean daily newspaper Kookmin Ilbo cited an unnamed source as saying that Mr. Bae was detained after North Korean security officials found a computer hard disk in his possession that they believed contained delicate information about the country. Mr. Bae was later transferred to the North Korean capital, Pyongyang, for further investigation, according to that report.
Mr. Do said that Mr. Bae was interested in helping orphans who beg for food in North Korean markets. “The most plausible scenario I can think of is that he took some pictures of the orphans, and the North Korean authorities considered that an act of anti-North Korean propaganda,” he said.
James Pearson writing in Reuters updates us on the state of the DPRK’s domestic currency:
In a dimly-lit Pyongyang toy shop packed with Mickey Mouse picture frames and plastic handguns, a basketball sells for 46,000 Korean People’s Won – close to $500 at North Korea’s centrally planned exchange rate.
Luckily, for young North Koreans looking to shoot hoops with Dennis Rodman, the new friend of leader Kim Jong Un, the Chinese-made ball actually costs a little less than $6 based on black market rates.
Once reserved for official exchange only in zones aimed at attracting foreign investment, and in illegal underground market deals elsewhere, black market rates are being used more frequently and openly in North Korean cities.
Publicly advertised prices at rates close to the market rate – around 8,000 won to the dollar versus the official rate of 96 – could signal Pyongyang is trying to marketise its centrally planned economy and allow a burgeoning “grey market” to thrive. This could boost growth and capture more of the dollars and Chinese yuan circulating widely so that North Korea can pay for imports of oil and food.
Unofficial market rates could become more widespread following an announcement last month of 14 new special economic zones (SEZs) aimed at kickstarting a moribund economy where output is just one fortieth of wealthier South Korea’s. A spokesperson for the Korea Economic Development Association, a local organization tasked with communicating policy in the new SEZs, told Reuters that exchange rates in the new zones are to be “fixed according to (local) market rates.”
“The official rate for the won is like a placeholder,” said Matthew Reichel, director of the Pyongyang Project, a Canadian NGO that organizes academic exchanges with North Korea. “We all know that the value of the won is not this.”
An estimated 90 percent of economic transactions along North Korea’s border with China are in yuan, an embarrassment for a country whose policy stresses economic independence, and something that reduces the grip that authorities attempt to exercise over its people and economy.
Pyongyang does not publish economic data, but is believed to have run a sizeable current account deficit for years, straining its ability to pay for imports in hard currency.
An attempt in 2009 to revalue the won and confiscate private foreign currency savings prompted protests from market traders and forced a rare policy reversal and public apology from state officials.
“Due to its lack of foreign currency, the North Korean government will have to tolerate black market rates, even if it has difficulty in officially recognizing them,” said Cho Bong-hyun, a North Korea economics expert at the IBK Economic Research Institute in Seoul.
Read the full story here:
Insight: Won for the money: North Korea experiments with exchange rates
The North Korean authorities increased both Party and Chosun Union of Democratic Women’s fees in the run up to this year’s [Chosun Workers’ Party] Foundation Day on October 10th, and demanded that members pay in full and on time going forward. Members of both organizations are supposed to pay a small percentage of their wages in organizational dues on a monthly basis, but systems for payment broke down in the face of the social and political upheaval of the 90s and early 2000s.
“We recently replaced Party membership cards with ones containing images of Kim Il Sung and Kim Jong Il together. That was done in accordance with the revised ‘Ten Principles [for the Establishment of the One-Ideology System],’” the source from Hyesan in Yangkang Province reported to Daily NK on the 31st. “For workers earning 3000 won a month, the base membership fee of 60 won was doubled to 120 won. At the same time as Party cards were replaced, members were told to normalize payment of their dues as well.”
“When they were given the order, a lot of people pointed out that they hadn’t been paying their fees on time because they hadn’t been getting paid on time, either.” The increase means that fees now constitute a total of 4% of a Party member’s basic official salary, although with additions many members are paid closer to 6000 won per month. The Women’s Union monthly fee has risen from 20 won to 50 won, the source reported.
The source also revealed reactions to the news. “Some have welcomed it because they think it may mean a corresponding rise in wages,” he said. “We’ll have to wait and see whether that happens; in any case, these things are an attempt to concentrate power over the people in the hands of the Party.”
The source also noted that a great many people have lost their loyalty to the Party anyway. “People’s loyalties have changed, and changing Party memberships won’t do anything to bring it back,” he concluded. “‘Shouldn’t they work to change the people’s hearts, first?’ That is the question. People are Party members in name only.”
Other sources also report that there have been extensive meetings and Party membership conferment ceremonies of late, as well as lectures on the sanctioned method of storing one’s membership card. “The authorities constantly drill into us that Party membership cards must be protected like one’s own life,” the source said. “There’ll probably continue to be strong controls on that, too.”
Read the full story here:
Dues Rise as Timely Payments Decreed Daily NK
Kang Mi Jin
North Korean doctors are being dispatched to the Yanbian Autonomous Korean Prefecture of China in order to bring in much-needed foreign currency, a source has reported.
Lee Wong Jong, the manager of an oriental medicine clinic in Yanji, the capital of the autonomous region, contacted Daily NK on the 1st.
“Most North Koreans in Yanji work in North Korean-run restaurants and IT companies, but lately it’s not been hard to find North Korean doctors, too. These doctors are working legally at Chinese hospitals,” he said.
He continued, “They are obtaining official visas from the North Korean government and moving to China to work. They are not in the country as the result of an agreement between China and North Korea, however. North Korea is providing individual doctors with visas so that they can go and earn foreign currency.”
“I know a North Korean dentist working at a hospital. At the same time, he works to help people like himself who have been granted Chinese visas. He essentially plays the role of an employment agency and helps them find work in other hospitals. Many IT workers have come to China too, and he connects those people with companies and factories, too.”
Lee now fears for his friend, however; “A few months ago I started to see less and less of him, and now he has disappeared without a trace.” He explained, “If the North Korean authorities receive a report that one of their citizens has met with a South Korean they order them to return home, no exceptions.”
On the North’s move to provide visas to its doctors, Lee revealed, “North Korean doctors are not well-regarded in China. No one wants to get treated by a doctor from a backward country, so the authorities can’t form an official agreement with China to send them. Granting visas to individual doctors instead is an unofficial way to bring in foreign currency.”
Doctors are not the only profession to receive permission to work and live in China, Lee explained. “In Yanji there are many North Koreans. You can see young Chinese-Koreans in their early 20s driving around in foreign cars. They manage IT companies that employ North Korean labor, and make good money that way.”
He added, “The number of North Korean workers employed in Chinese firms has skyrocketed over the last few years. They now show no outward signs of awkwardness adapting to life in China.”
Read the full story here:
NK Doctors Working in China Daily NK
Oh Se Hyek