Archive for September, 2003

North Korean bank heist?

Friday, September 19th, 2003

This shocking story from the BBC:

A small-time bank robbery does not make headline news in many parts of the world. But when three armed robbers held up a bank in secretive North Korea last month, the incident was said to be unprecedented in the country’s history.

The full force of North Korean officialdom appears to have united in search of the culprits.

Immediately after the incident, North Korean leader Kim Jong-il himself issued an order to “unconditionally arrest the criminals”, according to a senior North Korean official currently in China.

The authorities are said to have distributed wanted posters throughout the country.

The Ministry of People’s Security and the State Security Department have also fully mobilised in the hunt for the criminals.

Security forces defending the border areas are on special guard duty to prevent the robbers from escaping.

Accurate and up-to-date information is notoriously difficult to obtain from communist North Korea.

The bank robbery has only now come to light – in an article in the South Korean newspaper Choson Ilbo – although the incident happened in August.

The three robbers are said to have entered the Foreign Trade Bank of Korea in the middle of the day, forcing bank employees to lie on the floor while they stole approximately $40,000 from the vault.

Read the full story here:
N Korea rocked by bank heist
BBC
2003-9-19

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Bush warns N Korea on drugs

Tuesday, September 16th, 2003

BBC
9/16/2003

The United States is increasingly convinced that North Korea has a direct role in global drugs production and trafficking, US President George W Bush has said.

In his annual report to US Congress on drug-producing nations, Mr Bush identified 23 countries which the US considers to be major drug-trafficking or major drug-producing centres, including Afghanistan, Pakistan and China.

North Korea was not on the list but the US president said there was evidence that “state agents and enterprises” were involved in the narcotics trade.

The US, which has been pressuring North Korea over its nuclear ambitions, also warned that a proposed food donation to the North could be at risk because of fears it would be diverted to the military.

Mr Bush said in the report that the US would step up efforts to work with the affected countries in the region in order to prevent such trade.

Haiti and Burma ‘failing’

“Although there is no evidence that narcotics originating in or transiting [through] North Korea reach the United States, the US is intensifying its efforts to stop North Korean involvement in illicit narcotics production and trafficking,” Mr Bush said in his report.

“We are deeply concerned about heroin and methamphetamine linked to North Korea being trafficked to East Asian countries,” he added.

The assessment also warned that Haiti and Burma had “failed demonstrably” to meet international obligations to fight drugs trafficking or production.

Mr Bush’s comments come at a time of continued tension between the US and North Korea over the reclusive state’s nuclear programme.

Aid accusations

The US has repeatedly accused North Korea of illegal drugs and arms smuggling, charges North Korea has denied.

Mr Bush cited in his report the seizure of $50m worth of heroin smuggled from a North Korean state-owned ship off the coast of Australia in April as evidence of a link between the country and drugs trafficking.

On Monday the US also accused the North Korean Government of preventing international food aid reaching those for whom it was intended.

North Korea had alleged that the US and Japan had put pressure on United Nations aid agencies to stop or delay food shipments to North Korea.

However US State Department spokesman Adam Ereli said the US was concerned that international food aid intended for desperately needy civilians was being diverted to the North Korean military.

The US has said it will continue to fund a separate programme to build low-risk nuclear reactors for North Korea.

The programme is managed by the New York-based Korean Peninsula Energy Development Organization, or KEDO.

The US said its $3.72m of funds would only be used for administrative expenses, since construction of the reactors has been suspended since the row broke out a year ago over North Korea’s nuclear plans.

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N. Korea shifts towards capitalism

Sunday, September 14th, 2003

Washington Post Foreign Service
Anthony Faiola
September 14, 2003

Notes on the DPRK’s new Fiat:

The first commercial billboards (ever) are going up in Pyongyang.  Fiat is in the Hermit Kingdom.  The billboards are part of what is dubbed the first corporate media blitz to hit North Korea.

Pyeonghwa Motor Corps., a South Korean firm with ties to the Unification Church, coaxed the DPRK government into allowing the campaign.  Pyeonghwa began assembling cars in North Korea 18 months ago using imported Fiat parts.

Creating the ad campaign was not easy, said John Kim.  The government rejected many billboard proposals.

The company began publishing asd in government sponsored trade magazines showcasing the “Whistle” (The name of the car in the DPRK.  Named after a famous song).  Also a SUV model was launched.  Commercials have also appeared on TV.

Cars cost $14,000 and it would take a north Korean 15 years of labor to save up enough money.

When Pyeonghwa opened its $20m factory about 40 miles west of Pyongyang last year, the company hoped to sell 1000 cars in 12 months, but it has unloaded only half that number in 18 months.  Most have gone to government officials and diplomats.

There are only two gas stations in Pyongyang, and the company does not offer financing 

Notes on Politics:

Pyongyang’s news agency recently described new markets as desigend to “dramatically improve the country’s standard of living.”

This month, the North Korean’s announced a cabinet reshuffle that raised Pak Pong Ju, a former chemical industries manager, to the loftier position of Premier.  He is seen as being interested in reforms.

Kim Jong Il has been working to give the authority to fire a worker to factory managers, as opposed to Party officials.

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The fall and arrest of Mr. Yang

Sunday, September 7th, 2003

UPDATE 2 (2003-9-7): The BBC reports that Mr. Yang has lost his appeal:

A business tycoon once listed as China’s second richest man has lost an appeal against his 18-year sentence for fraud.

Yang Bin, known as China’s flower king, was found guilty in July of a string of economic crimes including bribery and illegal land use.

The High People’s Court of Liaoning province on Sunday also upheld fines against him and his companies totalling 8.3m yuan ($1m), said the official Xinhua news agency.

Yang is one of a number of high-profile businessmen to have fallen foul of the law in China over the last year.

Before his fall from grace, he was one of China’s most flamboyant businessmen, and was named by North Korea to head a free-market experimental zone across from the Chinese border.

Border arrest

A Dutch citizen, he built a business empire growing tulips amid the industrial decay of north-east China and by 2001 had a fortune close to $1bn.

However, much of Yang’s wealth had, it turned out, been based not on flowers but on illegal property development.

In what may have been a last bid to avoid prosecution, he accepted an offer from the North Korean government to run a new free trade zone inside the Stalinist state.

But last October, as he prepared to cross the border, Chinese police moved in and took him away.

UPDATE 1 (2003-7-14): Mr. Yang has been sentenced to 18 years by a Chinese court. According to the BBC:

A business tycoon once listed as the second richest man in China has been sentenced to 18 years in prison for fraud.
Yang Bin, known as China’s flower king, was found guilty of a string of economic crimes including bribery and illegal land use.

He is one of a number of high-profile businessmen to have fallen foul of the law in China in recent months.

Before his fall from grace, Yang Bin was one of China’s most flamboyant businessmen, and was named by North Korea to head a free-market experimental zone across from the Chinese border.

A Dutch citizen, he built a business empire growing tulips amid the industrial decay of north-east China.

By 2001 he was listed as China’s second richest man, with a fortune close to $1bn.

But with fame came suspicion and soon a government investigation.

Much of Yang’s wealth had, it turned out, been based not on flowers but on illegal property development.

False receipts were used to get his company listed on the stock market. As his empire began to crumble around him, Yang made what may have been a last bid to avoid prosecution.

He accepted an offer from the North Korean government to run a new free trade zone inside the Stalinist state.

But last October, as he prepared to cross the border, Chinese police moved in and took him away.

A spokesman for Yang, chairman of Hong Kong-listed Euro-Asia Agricultural (Holdings), said he planned to appeal.

Read the full story here:
China’s ‘orchid king’ gets 18 years
BBC
2003-7-14

ORIGINAL POST (2002-10-4): According to the Washington Post, Mr. Yang has been arrested.

Chinese sources, including journalists, said police detained Yang Bin, a 39 year old multimillionaire and flower mogul, on suspicion of tax evasion in the northern Chinese city of Shenyang.

A Chinese source said that the move did not mean China opposed North Korea’s fledgling efforts to reform its economy.  China, he said, was simply against the choice of Yang Bin to head the effort.

Nonetheless, Chinese economists said Yang’s detention constitutes an embarrassment for Kim Jong Il and could threaten reform efforts.

Within the last few days, Chinese journalists say, China’s Ministry of Propaganda has issued three circulars banning China’s press from in depth coverage of Yang.  Analysts in China say they believe this means Beijing is uncomfortable with his new status in North Korea.

The Sinuiju region draws its inspiration from the special economic zones that china established in the 1980s .

Yang said any foreigner could travel to Sinuiju without a visa as long as they had a a visa to return to China (as of Sept 30).  But those plans hit a roadblock on Thursday when North Korean authorities declined to allow foreign correspondents travel with Yang to the Zone.  Yang’s problems then started snowballing when an impromptu news conference he called to explain the visa restrictions was declared “illegal” by Chinese police.

Yang’s shares have been suspended from the Hong Kong Stock Exchange because the company has not made sufficient disclosures.

Yang has been reticent about how he got the North Korean appointment–one of the stranger events in Pyongyang’s checkered attempts to open to the outside world.  In an interview with a Chinese magazine, he said that he had been “Sharing my agricultural technology with the people of North Korea “for more than a year” and that “my selfless help won the trust of the Korean people.”

Yang struck up a friendship with Kim Jong-il several years ago.  Yang took his corporate jet to Pyongyang and worked hard to cultivate Kim.  Kim traveled to Shenyang to meet Yang.  Yang offered to donate greenhouses to North Korea which is desperate for ways to grow food, and Kim accepted.

Some Chinese economists and officials have privately criticized North Korea’s choice of Yang, saying he is emblematic of a type of Chinese businessman who amasses fortunes making use of connections and legal loopholes.

Yang has said he hoped to turn Sinuiju into a trading and manufacturing and trading hub.  Chinese cources, however, said that so far Yang has been approached only by developers looking to turn the area into a gambling and entertainment enclave for Chinese tourists.  Gambling is illegal in China.

Source:
The Fall of Mr. Yang
Washington Post
2002-10-4
Page A25

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DPRK cabinet reshuffle

Thursday, September 4th, 2003

Financial Times
September 4, 2003
Page 4
by Andrew Ward 

Kim Jong Il yesterday staged a rare cabinet reshuffle, replacing several top officials with younger men in an apparent attempt to strengthen his power base. 

Mr. Kim face a twin threat to his Stalinist regime from looming economic collapse and increasing pressure from a US government angered by the state’s development of nuclear weapons. 

Mr. Kim replaced his prime minister, two of his three deputy premiers and five ministers in what South Korean reporters said was the most far-reaching government shake-up for five years. 

Analysts in the south speculate Mr. Kim was replacing ageing officials associated with Kim Il Sung his late father and former leader.  In their place, had come younger officials more loyal to the current leader. 

Diplomats and intelligence officials, who admit their assessments about the reclusive regime are little better than guess work, hoped the promotion of younger officials would clear the way for political and economic reforms resisted by the old guard. 

Economic reforms introduced last year – wages and prices were raised to meet market values – fuelled hopes that North Korea might open up, but there have been few further signs of change. 

Some of those replaced held important economic planning posts, perhaps reflecting Mr. Kim’s concern about the parlous state of the country’s economy. 

South Korea‘s Yonhap news agency said 52% of North Korea’s new power elite was aged under 55.  However there was no sign of a shift away from Mr. Kim’s “army first policy” of concentrating power and resources with North Korea’s 1.1 million-strong army. 

Most top military leaders kept their jobs – including Mr. Kim himself, who was re-elected Chairman of the National Defense Commission, the country’s most powerful body – and the legislature approved measures to strengthen the “nuclear deterrent force”. 

Pak Pong Ju, former minister for the chemical industry, was elected prime minister, replacing Hong Song Nam, according to North Korean media monitored by Yonhap. 

“The cabinet will work out a scientific and bold economic strategy and operational plan as required by the new century and dynamically implement them to build a strong national economic power suited to the great prosperous powerful nation,” Mr. Pak said.

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