Archive for February, 2003

First busses make overland treck to Kumgang

Tuesday, February 18th, 2003

from the BBC:

The BBC’s Kevin Kim joined the first overland tourist trip to North Korea, and reflects on his journey to the other side of the border.

“I was on board one of 20 buses that crossed the DMZ for the first time.

As a South Korean it felt really strange, because up to now we were strictly forbidden from getting near to the DMZ.

The mountains on the North Korean side looked totally different from the mountains on the South Korean side.

It was very barren. There were hardly any trees.

North Korea is in an energy crisis right now and every single tree is put to good use, for heating.

The South Korean guide told us that while travelling through the DMZ we must not take pictures, wave outside, or show any South Korean newspapers or magazines through the window.

I guess that is why everyone on the bus was talking in a very soft voice.

Every few hundred metres there were North Korean soldiers with their rifles just looking on as the buses went by.

I was really tempted to just open the window and say “hello” or “nice to see you”.

But I had been told by my South Korean guide that I could open the window but I could not say anything to them.

Like the words of the South Korean song, “Longing for Mount Kumgang”, getting to North Korea and seeing its natural beauty has been something that people in the South could only long for until now.

Unification, too, is something that Koreans have only dreamed about.

But having travelled through the most heavily fortified border in the world, I began to think that while unification in the Korean peninsula may seem impossible right away, it does not have to stay as a dream.

Who knows, in 20 years time we might actually be seeing the fences coming down.

It is wishful thinking. But Koreans are natural born optimists. ”

Also from the BBC:

The overland border between the two Koreas has opened for the first time since the Korean war ended half a century ago. The BBC’s Seoul correspondent Caroline Gluck was among the first to cross.

Fanfare, fireworks and balloons greeted us at a ceremony on the South Korean border, as we prepared to journey through the world’s most heavily fortified road border to the North.

This is the first land route for civilians since the end of the Korean war half a century ago.

The pilot journey is due to pave the way for regular overland tourist trips to the North’s scenic resort of Mount Kumgang, or Diamond Mountain – which has been developed by the South Korean company Hyundai Asan.

Hyundai Asan’s president, Kim Yoon-Kyu, described the trip as a historic moment.

“I can compare it to breaking the wall between East and West Germany,” he said.

Opening the border was also one of the ways to reduce tensions between North and South Korea, he said.

“I’m going to persuade (the North Koreans) not to have any nuclear power. We need money. Money is better than nuclear power,” he said.

At the demilitarized zone, there was a razor wire fence on either side, and signs warning that landmines were present.

When we reached the military demarcation line, I could see the first North Korean soldiers watch the convoy – around 20 buses in all.

All around me I could see the mountains covered in snow.

It is a barren landscape but quite beautiful. Many believe that if the two Koreas reunify, it should be turned into an ecological zone.

On the North Korean side, a welcoming committee with a female brass band was waiting for us, playing the North Korean song Pangap-sumnida, or Nice to Meet You.

Around 150 North Koreans took part in the ceremony to welcome their southern counterparts.

Ro Chang hyup, a North Korean tourist official, said it was an important step forward in inter-Korean exchanges.

“This is a first step towards unification. It is helping to break the ice and I really welcome our south Korean brothers.”

Ri Jong-hyok, deputy head of the North’s Asia-Pacific Peace Committee which handles the North’s joint ventures with South Korea, said: “People are here for tourism. Why are you talking about nuclear issues? I get a headache when people talk about that”.

Bang Jong-Sam, head of the Mount Kumgang international tourism company, had a similar message.

“We don’t have nuclear weapons. Let the crazy people say whatever they want. All we have to do is to continue tourism,” he said.

Since 1988, when tours by cruise boat to Diamond Mountain began, around half a million South Koreans have travelled to the area.

For most, it is their only chance to visit the Communist North. They come to explore the peaks of the fabled mountain – immortalised in songs, paintings and poetry.

Fenced-in resort

But contacts between the two Koreans at the resort is limited.

The Hyundai-built tourism site is fenced in, and North Korean guides are on hand to monitor all movements.

You can catch glimpses of North Korean villages and people travelling on roads only allowed for locals – but most visible are the soldiers.

A group of around 40 soldiers marched by our tour group, singing the praises of their leader, Kim Jong-il.

He’s our great commander, they said.

“His love is like the sun, reaching out to every corner.”

If the project is aimed at breaking down barriers between the two Koreas, there is clearly a long way to go.

But some ventures, like a locally run restaurant open only to South Koreans, at least help to allow more contact between the two sides.

“I’m sure unification will come,” said my waitress.

“It’s really good that so many South Koreans are coming here. I’m proud to work here – and I welcome them.”

Projects like this and the opening of the cross-border road between the two Koreas are full of symbolism.

But, in practice, it is clear that there is still a long way to go before the two sides can freely mingle.


Pyongyang’s Banking Beachhead in Europe

Thursday, February 13th, 2003

Far Eastern Economic Review
Bertil Lintner

One of the few things that Kim Kum Jin and Sun Hui Ri didn’t leave behind when they fled Slovakia in August last year was their collection of bank records. Their invoices came to millions of dollars, but the documents recovered by Slovak police don’t make clear where all the money went. Some answers could probably be found just up the Danube River from Bratislava. Since 1982, the North Koreans have had their own bank in Austria’s capital, Vienna. It’s called the Golden Star Bank–almost the same name as a North Korean company in Beijing that was used by Kim.

According to official Austrian bank documents seen by the REVIEW, the Golden Star Bank is 100% owned by the Korea Daesong Bank, a state enterprise headquartered in Pyongyang. Kim Dok Hong, a top North Korean official who fled to South Korea in 1997, says that both banks come under the jurisdiction of Bureau 39, a shadowy wing of the ruling Korean Workers’ Party controlled by North Korean leader Kim Jong Il. Western and Asian intelligence services believe it was set up in 1994 to generate hard currency for Kim’s impoverished nation.

For more than two decades, the Austrian police have kept a close eye on the Golden Star Bank, but there is no law that forbids the North Koreans from operating a nonretail financial institution in the country. Nevertheless, Austria’s police intelligence department stated in a 1997 report: “This bank [Golden Star] has been mentioned repeatedly in connection with everything from money laundering and distribution of fake currency notes to involvement in the illegal trade in radioactive material.”

But finding hard evidence of illegal activity is another matter and the bank continues trading in the Austrian capital. While documents left behind in Bratislava by Kim Kum Jin and Sun show dealings with respected banks such as the Bank of China and the National Bank of Egypt, there is no paperwork connecting them directly to the Golden Star Bank. But the Austrian police report’s assertion that “Vienna must be seen as North Korea’s centre for financial transactions in Europe” remains relevant today.

The former Portuguese enclave of Macau–where the North Koreans have had a discreet but solid presence since the mid-1970s–plays a similar role in East Asia, according to Western and Asian intelligence officials. The North Koreans do not have their own bank in the largely autonomous Chinese territory, but they operate through locally owned family banks, the officials believe.

In an October 2000 conference paper, Marcus Noland of the Washington-based Institute for International Economics asserted that money owed by South Korea’s Hyundai company to the North Korean government had gone “into the Macau bank account of ‘Bureau 39’.” The payments were for permission to operate tourist trips to Mt. Kumgang in the North. An official at Hyundai Asan, which organizes the tours, says only that royalties are paid to North Korea through Korea Exchange Bank’s branches in unspecified third countries.

The Congressional Research Service–which provides United States congressmen with background briefings–reported on March 5 last year that “the U.S. military command and the Central Intelligence Agency reportedly believe that North Korea is using for military purposes the large cash payments, over $400 million since 1998, that the Hyundai Corporation has to pay for the right to operate [the] tourist project.”

Noland, an expert on Korean affairs, asserted in his paper that this income was used for “regime maintenance,” or to strengthen the government and its armed forces. Bankers and Western security officials believe this is also the case with money earned from the operations in Europe and the Middle East.
The Macau Connection
The Former Portuguese Colony was a Terrorist Base for Pyongyang

Avenida de Sidonio Pais is not Macau’s busiest street. And the trading company that is located on the fifth floor in a nondescript concrete building doesn’t even have a sign outside. But this is where Zokwang Trading is located–and from where the North Koreans have conducted some of their more nefarious activities in East Asia. The company was set up shortly after the Carnation Revolution in Portugal in 1974, when the old fascist dictatorship was overthrown and the new, left-leaning leaders recognized North Korea.

But Zokwang, which ironically means “morning light” in Korean, has always been more than a trading company. This was the alleged planning base for the 1983 bombing in which North Korean agents killed 17 South Korean officials, including four cabinet ministers, who were visiting the Burmese capital, Rangoon. In 1987, another set of North Korean agents bombed a Korean Air jet, killing all 115 people on board. One of those agents, Kim Hyun Hee, now lives in Seoul and describes in her autobiography, The Tears of My Soul, how she was trained in Macau. There, she and other North Korean agents learnt Cantonese so that they would be able to pose as Macau or Hong Kong Chinese when sent on overseas missions. They were also trained to shop in supermarkets, use credit cards and visit discos–amenities that did not exist in their homeland.

In 1994, the head of Zokwang and four other North Koreans were arrested in Macau for depositing millions of dollars worth of counterfeit $100 bills. But nothing came of the investigation and in 1999, more counterfeit dollars were discovered in Macau. The North Koreans were also suspected of peddling drugs and guns through the then Portuguese enclave. Once a week, the North Korean national carrier Air Koryo flew from Bangkok to Pyongyang with a stopover in Macau. The flights, now monthly, carried few passengers–but plenty of cargo.

So Western and Japanese intelligence agencies were apprehensive when North Korea was allowed by the Chinese government to open a new consulate general in Hong Kong on February 16. Air Koryo had applied in April last year for permission to use Hong Kong’s new Chek Lap Kok airport instead. But the airport authorities turned the request down. Air Koryo’s old Tupolev Tu-154 aircraft were just too noisy.

But those who thought Hong Kong would become a new centre for North Korean crime have so far been proven wrong. Perhaps under Chinese pressure, the North Koreans in Hong Kong have become model diplomats: open, approachable and eager to forge links with the local business community. Hong Kong has also eclipsed Macau as the centre for North Korean businesses in East Asia, and the new style may serve as a harbinger for change. No one wants to see another terrorist state emerge in Asia.

Issue cover-dated October 25, 2001


North Korean defectors find Christianity

Tuesday, February 11th, 2003

Caroline Gluck

The Sunday service at Doorae church in southern Seoul is like many others across the country – except that the congregation includes about 20 North Korean defectors.

Many of them, like 28-year-old Kim Song Gun, turned to Christianity when they encountered missionaries helping North Koreans on the Chinese border.

Kim Song Gun left his home in the northern province of Chongjin six years ago, fearing he would die from starvation.

“I think it’s almost impossible to lead a normal Christian life in North Korea. I’ve heard rumours there are underground churches, but I haven’t seen anyone who has been there,” said Kim Song Gun.

“Mentally, Christianity helps a lot. When you are going through a lot of hardships, religion is the only thing you can rely on,” he said.

Perilous trip

Other members of the congregation agree.

During Sunday’s service, North Korean mother Park Young Ae and her 14-year-old son went to the altar to sing a song that has become popular with North Korean defectors – telling the story of a sparrow’s perilous journey.

After four years apart, they were only reunited a few days earlier.

Park Young Ae said she had been on a business trip to China – but had been unable to return to the North and her family for reasons she said were too complicated to go into.

“A lot of the time, I was trying to escape, and people were trying to capture me. At one point I was also jailed. I went through a lot of pain, but I finally made it to South Korea,” she said.

“When I received orientation in South Korea, I learnt about Christianity and spiritually I’m now very reliant on being a Christian. It gives me inner power.”

Spiritual help

After the service ends, Park Young Ae – who now runs a restaurant – is able to earn some extra money selling North Korean style sausages to members of the congregation.

The Church can help people like her – not only financially but more importantly by providing them with a sense of community.

“North Koreans are looked down upon and marginalised socially,” said Douglas Shin, a Korean-American missionary and activist working with North Korean immigrants.

“So when they need some kind of consolation, they turn to church,” he said.

But for 24-year-old Kim Kun Il, the Church is about to become his vocation.

Kim Kun Il, who left the North after his father died from hunger six years ago, is now studying to be a reverend at a missionary school.

He said he goes to church for the mental help, not the material help, the church groups give.

“Money and food has its limitations. Once you are back to a normal state, it doesn’t really help,” he said.

Douglas Shin agreed. “When you recover from malnutrition or absolute starvation, the human body adapts very quickly. So one or two meals in freedom will be enough to get you on your own feet,” he said.

“But it takes a long time and a lot of effort to be revived spiritually. They need some kind of comfort, mental and spiritual.”

“This is our role, the Christian role, to save the people from drowning. It’s almost like Noah’s Ark,” he said.


First Korean border crossing opens

Wednesday, February 5th, 2003


The two Koreas have re-opened their land border for the first time in half a century, despite continuing anxiety about the North’s nuclear programme.

About 100 South Korean tourism officials passed through the heavily fortified frontier by bus on Wednesday, travelling to the scenic Mount Kumgang tourist resort, some 30 kilometres (18 miles) to the north.

The opening of the first of a set of planned overland links came as the US made its strongest pledge yet to hold direct talks with the North to resolve the nuclear crisis.

North Korea says that the only way forward is for face-to-face talks with Washington, without pre-conditions.

Historic crossing

Buses carrying around 100 officials from the South Korean company Hyundai and invited guests snaked from Kosung on the South’s east coast for a 50-minute journey along a dirt road towards Mount Kumgang.

The 10 buses were escorted by a South Korea military jeep as far as the border.

The jeep then pulled over to allow the buses to make the historic crossing, and a military official from the US-led United Nations Command, which enforces the armistice agreement that ended the Korean War, followed their progress on the other side of the border through binoculars.

If the pilot visit is a success, tours will officially begin next week.

The road is the first of four planned overland routes between the two sides to be completed. A parallel rail link on the east, and a rail and road link on the west are still under construction.


The links are a key part of South Korean President Kim Dae-jung’s “sunshine policy” of economic co-operation with the Stalinist state.

Seoul has been urging the US to pursue diplomacy rather than sanctions over the current nuclear crisis.

US Deputy Secretary of State Richard Armitage on Tuesday gave a strong assurance that direct talks with Pyongyang would take place.

“Of course we’re going to have direct talks with North Korea. There’s no question about it,” he told the Senate Foreign Relations Committee.

But Mr Armitage said that the consultations would only take place when Washington was confident that it had built a “strong international platform” from which to end North Korea’s nuclear programme.

He also warned that North Korea’s reported moves toward restarting a plutonium reprocessing facility could enable it to build four to six nuclear weapons within months.

Despite Washington’s assurances that it has no plans to invade North Korea, it has announced that is considering strengthening its military forces in the Pacific Ocean as a deterrent against Pyongyang.

US officials said the reinforcements would help signal that a possible war with Iraq was not distracting the US.

But the commander of the 37,000 US forces in South Korea, General Leon LaPorte, stressed on Tuesday that any deployment would be made in conjunction with Seoul.

Economic co-operation

Some analysts believe the nuclear stand-off is simply a blackmailing tactic by the North to obtain more aid for the impoverished nation.

In easing the North’s economic plight, Hyundai has played a key role. It has hitherto organised cruises to the North by boat, but they have lost the company money.

Hyundai hopes the cheaper overland trip will attract more tourists.

But its role in inter-Korean co-operation has not been without controversy.

The company became embroiled in a scandal last week when government auditors revealed that a Hyundai affiliate had sent nearly $200 million to North Korea just before the 2000 inter-Korean summit.

The company said the money was used to finance its business projects in the North; opposition lawmakers allege the money was a pay-off for the summit.

Members of the ruling Millennium Democratic Party have called on President Kim Dae-jung to make a public statement, while opposition politicians are calling for an independent counsel to investigate the fund transfers.


S Korea drops summit investigation

Monday, February 3rd, 2003


South Korean prosecutors have decided to scrap their investigation into payments made to North Korea prior to its summit with the South in 2000.

A spokesman for the prosecutors office said the investigation was being stopped in the “national interest”.

The move follows a plea from South Korean President Kim Dae-Jung, who asked prosecutors to drop the case to allow the matter to be settled in parliament.

The decision is likely to anger opposition politicians, who have accused Mr Kim’s government of being behind the money transfer, in order to gain from the summit politically.

Money transfer

The dispute centres on payments made to North Korea by the multinational conglomerate Hyundai shortly before the summit.

On 31 January investigators said the company had secretly transferred $200m to the communist North just a week before the landmark meeting.

Hyundai had borrowed the money from a South Korean state-controlled bank.

Opposition members claim the money was given as “payment” to the North for attending the summit – at the request of President Kim Dae-jung’s government.

The summit increased Mr Kim’s international standing, and contributed to his being awarded the Nobel Peace Prize in 2000.

North-South ties

On Monday President-elect Roh Moo-hyun backed Mr Kim’s appeal for a “political” settlement to the dispute.

Mr Roh “wants details of the scandal to be brought to light, but it would be better to let the National Assembly decide how to resolve the dispute,” his spokesman Lee Nak-yon said.

But the main opposition Grand National Party has said it will push for a formal investigation.

“The only way of cleansing the sin of deceiving the people is to confess frankly and apologize sincerely,” said Park Hee-tae, acting chief of the opposition.

The Hyundai group has done much to encourage links between North and South Korea.

But it has been badly affected by a joint venture tourism project with North Korea, and insisted it used the state-issued loan to improve its financial position.

Mr Kim, who has previously denied knowing about Hyundai’s dealings with the North, appeared to acknowledge them on Thursday when his spokeswoman said that the money was justified “if (it) was spent on promoting South-North economic co-operation”.

“The unique nature of South-North relations has forced me to make numerous tough decisions as the head of state,” Park Sun-Sook quoted him as saying.


North Korea’s closed society keeps trade routes open

Monday, February 3rd, 2003

From the Washington Post

Flow of money, goods frustrates US drive to tighten isolation

Doug Struck

February 3, 2003


Once a month, Hiroshi Yano bundles together a few million yen, wraps the money in plastic with a Japanese customs seal, and put it on a ship to be handed over at sea to a boat captain from North Korea and delivered to the Stalinist government there.


It’s all legal: The money is payment for North Korean snow crabs that Yano imports for Japanese tables.  And Yano said he wants to continue the business, nukes or no nukes.


“We are just a private company doing trade.  We are independent of politics,” said Yano, manager of an import business that runs three ships to North Korean waters from this port town 350 miles west of Tokyo.


The payments are just one example of the many flows of money and goods that prop up the North Korean system and circumvent the isolation that the US and other countries have sought to impose.


The Bush administration’s strategy to tighten that isolation and compel North Korea to dismantle its nuclear weapons program may be undermined by the complexity and number of trade routes that snake in and out of North Korea.


The trade ranges from the global export of missiles to lone Korean smugglers who wade the river border into China to barter for their food.  It includes products as legal and innocuous as Yano’s snow crabs and as dangerous as smuggled drugs delivered to Japan’s coast line by unmarked ships.


[But each year] North Korea makes missile sales estimated to bring in anywhere from several hundred million to $1billion.  Its customers, intelligence agencies say include Libya, Iraq, Iran, Yemen and in the past, Pakistan. 


Japanese importers pay the North Koreans with bundles of cash or with bartered goods such as food, sports shoes or a bike for the sailors, or generators.  30,000 large crabs are worth about $4,000.


Seafood is the biggest component of Japan’s $370 million annual trade with North Korea, which brought the DPRK’s ships to Japan 1,200 times last year.


South Korea has $350 million in trade with the DPRK.  Most of it from sending textiles to the north and buying finished clothes. 


China reported its trade at $730 million, and that is just the legal trade.  It used to be food and oil, now it is everything: pots, pans, shampoo.


Many intelligence analysis believe that smuggling is orchestrated directly by powerful North Korean officials.  Japanese claim they manufacture methamphetamines.