Archive for March, 2006

Interest revived in the Sinuiju Special Administrative Region

Thursday, March 30th, 2006

Institute for Far Eastern Studies (IFES)
2006-3-30

The Sinuiju Special Administrative Region (SAR) project lost momentum in September 2002 when its first governor-to-be, Chinese-born Dutch businessman Yang Bin, was arrested in China. North Korean leader Kim Jong Il’s visit to China at the beginning of this year, however, appears to have triggered a turnaround. With Kim’s China trip focused on the revision of economic policies, the rejuvenation of Sinuiju SAR development plans came into the spotlight.

Most South Korean press have run pieces, based on the stories of North Korean defectors and Chinese residents in Dandoong and other border areas, alluding to the fact that there is change in the air around Sinuiju. A North Korean businessman in Dandoong was quoted as saying, “No official word has come down from central [authorities], but they are busy preparing the Sinuiju SAR,” while rumors are spreading among area residents that “Sinuiju is the next Hong Kong.” Under the direction of central authorities, foreign currency management groups are rapidly being moved into Sinuiju, while ordinary residents are being relocated to other regions only to be replaced by residents of Pyongyang and other areas who are in the process of moving in.

As special enterprises are being promoted as of late, each organization and group is reacting differently. The most reluctant promoters are the People’s Committee and regional administrative organs. As orders come down, some administrators are required to immediately pack and relocate to southern Sinuiju, an underdeveloped area not even comparable to Sinuiju proper. Authorities had chosen the site as far back as 1986, and while development was fully promoted, only factories were built up. Housing, roads, and other indirect social capital facilities are still lacking. While regional authorities may have decided to build up southern Sinuiju, it will take another ten years of hard work to do so.

On the other hand, the outlook for city authorities is considerably brighter. This is because in the future, they will have the opportunity to rise up though organizations run by special administrative businesses. Up until now, instructions have come through the Regional People’s Committee, security bureau and defense authorities, but even though they own the facilities, they can still receive orders directly from the central government. Because of this, regional officials are still influenced by the temperament of local and central party politics while being faced with increasing pressure from city authorities to transfer power to them. While some factories — like the Sinuiju Cosmetics Factory, Sinuiju Shoe Factory, Sinuiju Synthetic Fiber Plant, and other large factories — are preparing for foreign capital support and cooperative ventures, most administrators appear to be pushing for keeping the status quo.

There are still many concerns. As the SAR is being set up, central officials are being dispatched to fill roles as factory officials; central officials without any personal interest. A similar sort of dispatch of central officials took place in the Rajin-Sonbong Special Economic Zone in the past.

Most small- and medium-sized enterprises and regional factories are beginning to transform into trading companies. There are currently around one hundred fifty such trading offices in Sinuiju. In the future, if Sinuiju is officially designated as a SAR, it appears that a great many more trade offices will appear.

Other news from Sinuiju insiders is that the People’s Committee, People’s Security Force, National Security and Defense Bureau and other central government departments that have received Kim Jong Il’s permission to trade have already opened offices in Sinuiju, employing people in the area and busily seeking out people with connections in China in order to find trading partners.

It appears by looking at the relocation currently underway that the goal is to move residents within the same timeframe that was required for the first round of relocations in 2002, when residents were moved to Chunma, Kwaksan, Dongrim and other areas around the outskirts of Sinuiju. There are problems here as well, as the government wants to relocate residents from Pyongyang and other regions to Sinuiju. At issue is the fact that while the number of residents who can move in needs to equal the number relocated out of the area, some North Koreans have already used connections with the central and regional party affiliates in order to move to the region.

In addition, the housing market is active, with housing prices in central downtown areas having already skyrocketed. While officially owned by the state, dwellings are unofficially “sold” through the use of “modification fees”: apartments run from 25 to 30 million won (8 to 10 thousand USD), while two-three story condominiums in “Chinatown” in the Namsang district run in the tens of thousands of dollars.

However, complications have arisen. Many residents being moved out have decided to get rid of their houses, but this has proved more difficult than expected. Some have put up their house for sale but have been unable to find a buyer. There are also those who were caught in the midst of sales through “real estate offices” when a crackdown by authorities resulted in their expulsion. A source stated that the administrative authority of the city security bureau in charge of relocating residents is undermanned and takes different measures to direct different groups of residents, while pressing for the expulsion of what it deems as “lesser” or unemployed people.

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North Korean Monetary History

Thursday, March 30th, 2006

From the Korea Times:
http://times.hankooki.com/lpage/opinion/200407/kt2004070616242354140.htm 

The Currency of Currency
By Andrei Lankov

Communists have always professed to abolish money _ and for a while they took the promise seriously. The first years of the Communist rule in Russia were marked by bold experiments aimed at the abolition of the currency which was to be replaced by some “direct labor exchanges.” However, the ensuing bitter experience was a harsh lesson, and so in later eras Communist regimes only paid lip service to the anti-monetary rhetoric. They did not reject their earlier promises to completely do away with money, but this was to be done at some unspecified point in a distant future.

Thus, the establishment of Communist governments often began with currency reform _ and North Korea was no exception to this rule.

For the first few years after Liberation, the North Koreans continued to use Japanese banknotes and coins. However, in December 1947, the nascent Communist authorities launched a currency reform. Needless to say, this was done with complete Soviet endorsement, and the practical management of the reform was entrusted to a Soviet-Korean financial expert, Kim Chan.

Within the week from Dec. 6 to 12, 1947, all the old banknotes had to be exchanged for new ones. According to then contemporary Soviet reports, trade on the Korean markets came briefly to a complete halt as shopkeepers panicked. Only in January, with the new banknotes, did shops resume normal trade.

The 1947 banknotes were printed in the USSR. There were four denominations; 1, 5, 10 and 100 won. These early banknotes were peculiar in many regards. First of all, they were issued before the official proclamation of the DPRK _ and thus did not bear the name of the state which issued them. They only carried the inscriptions ‘Democratic Korea’ and the name of the issuing institution _ “the Central Bank of North Korea.” Another peculiarity was the use of Chinese characters, soon to be banished from North Korean life.

In 1949, the banknotes were augmented with currency for small transactions. This “small change” was issued not as coins, but as paper money _ with values of 15, 20, and 50 chon (a chon is 1/100 of the North Korean won). However, rampant inflation soon made these small banknotes unusable.

The Korean War created complete havoc with the currency systems of both Koreas. In February 1959 Pyongyang launched a new currency reform. This time, the “old” won were exchanged for the “new” at the rate of 100:1 (what used to be a hundred won became one won). This was necessary to encourage stability and make the Korean currency more manageable. Indeed, until the dramatic changes which followed the Great Famine of 1996-1999, it had been easier to handle the North Korean currency than its South Korean counterpart: in the North nobody had to operate with five- or six-digit numbers for every small transaction!

The 1959 banknotes depicted industrial and agricultural landscapes. As a rule the front side of each banknote showed something industrial, while the reverse side had largely agricultural topics. There were six types of the banknotes, valued at 50 chon (0.5 won), and 1, 5, 10, 50, and 100 won. In addition, the first North Korean metal coins were issued as well _ with denominations of 1, 5, and 10 chon (50 chon coins were subsequently issued as well). The coins were made of a light aluminium-based alloy, and they all had a similar design: the DPRK’s coat of arms on the reverse, and the denomination on the front. In this respect the coins largely followed the patterns of the coinage in other Communist countries.

The next reforms took place in 1979. While the old coins remained in circulation, banknotes were replaced. The new banknotes (once again, with the values of 1, 5, 10, 50, and 100 won) had a dramatic and highly politicized design. The 100-won banknote was decorated with a portrait of Kim Il Sung, who thus became the second Korean leader to be depicted on a Korean banknote in his lifetime. The dubious honor of being the first goes to the South Korean President Syngman Rhee, who put his face on South Korean banknotes as early as 1950. The reverse of the 1979 100-won banknote depicted Kim Il Song’s childhood home in Mangyongdae.

The 50-won banknote had representations of a worker, a farmer (the only female in the picture), a soldier, and an intellectual (the latter lurking in the back); all of whom were holding high the symbolic torch of Kim Il-sung’s chuche ideas.

The 1979 banknotes remained in use until 1992 when another currency reform introduced the present system of Korean coins and banknotes. But that is another story…

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North Korean Banks

Thursday, March 30th, 2006

Foreign Trade Bank of Korea
FTB Building, Jungsong dong, Central District, Pyongyang, North Korea
Phone: +850 2 18111
Fax: +850 2 3814467

Dae-Dong Credit Bank  
Ansan-dong BoTongGang Hotel, Pyongchon, Pyongyang, North Korea
Phone: +850 2 3814866
Fax: +850 2 3814723
 
Credit Bank of Korea  
Chongryu 1-Dong, Munsu Street, Otan-dong, Central District, Pyongyang, North Korea 
Phone: +850 2 3818285
Fax: +850 2 3817806

Woori Bank  
Busok-Dong 1st Floor 101 Gaesunggongdan, Bondong-Ri, Gaesung City, Hwanghae-Do, North Korea
Phone: +8 850 9118
Fax: +8 850 9119

The International Industrial Development Bank  
Jongpyong-dong, Pyong chon District, Pyongyang, North Korea
Phone: +850 2 3818610
Fax: +850 2 3814427

Korea Daesong Bank  
Segori-dong, Gyongheung Street, Pyongyang, North Korea
Phone: +850 2 818221
Fax: +850 2 814576
 
Korea Daesong Bank  
Segori-dong, Gyongheung Street, Pyongyang, North Korea
Phone: +850 2 818221
Fax: +850 2 814576

Changgwang Credit Bank  
Saemaeul-1 Dong, Pyongchon District, Pyongyang, Korea (North)
Phone: +850 2 18111999 ext
Fax: +850 2 3814793

Bank of East Land  
BEL Building, Jonseung-Dong, Pyongyang, Korea (North)
Phone: +850 2 18111
Fax: +850 2 3814410

Korea Joint Bank  
Ryugyong 1 dong, Pothonggang District, Pyongyang, Korea (North)
Phone: +850 2 3818151
Fax: +850 2 3814410

Central Bank of Korea
58-1 Mansu-dong, Sungri str, Central District, Pyongyang, Korea (North)
Phone: +850 2 18111 Ext: 81
Fax: +850 2 3814624

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Raijin back in the news

Thursday, March 30th, 2006

This story from the Daily NK has an update on whats happening at Raijin as well as a history of the area:

Read whole story here:

In December 1991, Rajin and Seunbong cities were declared “Free Trade Economic Regions”, Rajin Port was planned to be expanded according to a 3-stage development scheme. The first stage consisted of infrastructure construction such as railroads, roads, and ports.  In the ten years since, the budgetary outlays have been insufficient.

In 1996, the Committee for Promoting NK Foreign Economic Cooperation published a report, “Reality and Outlook for Rajin- Sunbong Free Trade Economic Regions.” According to the report, the Rajin Port should first build capacity for large-sized containers.  In stage two, its loading-handling capacity should be improved from 300 million tons to 1,700 million tons.  The third stage, beginning in 2010, the port should have the capacity to manage 100 million tons.

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North Korean Laborers in Czech Republic

Thursday, March 30th, 2006

From the Seould Times:  

Working conditions for North Korean workers in the Kaesong Industrial Park have been well publicized.  What is less known is that North Koreans are working all over the world in isolated conditions to earn hard currency for their governent.

Experts estimate that there are 10,000 to 15,000 North Koreans working abroad in behalf of their government in jobs ranging from nursing to construction work. In addition to the Czech Republic, North Korea has sent workers to Russia, Libya, Bulgaria, Saudi Arabia and Angola, defectors say.

Almost the entire monthly salary of each of the women here, about $260, the Czech minimum wage, is deposited directly into an account controlled by the North Korean government, which gives the workers only a fraction of the money.

To the extent that they are allowed outside, they go only in groups. Often they are accompanied by a guard from the North Korean Embassy who is referred to as their “interpreter.” They live under strict surveillance in dormitories with photographs of North Korea’s late founder Kim Il Sung and current leader Kim Jong Il gracing the walls. Their only entertainment is propaganda films and newspapers sent from North Korea, and occasional exercise in the yard outside.

Kim Tae San, a former official of the North Korean Embassy in Prague, helped set up the factories in 1998 and served as president of one of the shoe factories until he defected to South Korea in 2002.

It also was Kim’s job to collect the salaries and distribute the money to workers. He said 55% was taken off the top as a “voluntary” contribution to the cause of the socialist revolution. The women had to buy and cook their own food. Additional sums were deducted for accommodation, transportation and such extras as flowers for the birthdays of Kim Il Sung and Kim Jong Il.

The women even had to pay for the propaganda films they were forced to watch. By the time all the deductions were made, each received between $20 and $30 a month. They spent less than $10 of it on food, buying only the cheapest local macaroni.

“They try to save money by not eating,” said Kim, the former embassy official. He says that his wife, who accompanied him on visits to the factory, was concerned that women’s menstruation stopped, their breasts shriveled and many experienced acute constipation. “We were always trying to get them to spend more on food, but they were desperate to bring money home to their families.”

Czech officials say the North Koreans are model workers.

“They are so quiet you would hardly know they are here,” said Zdenek Belohlavek, labor division director for the district of Beroun, which encompasses Zelezna and Zebrak, a larger town where about 75 North Korean seamstresses stitch underwear.

Belohlavek displayed a thick dossier of photos and vital statistics of the women, most of whom were born between 1979 and 1981. All their paperwork is in perfect order, and the factories appear to be in full compliance with the law, he said.
 

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N Korean report raises Pong Su compo claim

Wednesday, March 29th, 2006

Australia Broadcasting Corporation (Reuters)
3/29/2006

North Korea hinted at seeking compensation from Australia for seizing and sinking the Pong Su, that was used to transport drugs, according to a state media report.

Last week, two Australian fighter jets bombed and sank the impounded North Korean cargo ship in what Foreign Minister Alexander Downer said was a strong message to Pyongyang about its suspected involvement in drug running.

The official KCNA news agency cited a relatively obscure pro-North Korean group as saying Australia needs to compensate North Korea.

“The Australian authorities should make an honest apology to it according to the results of the trial and compensate to the ship and its crewmen for the human, material and mental damage done to them,” KCNA reported the Federation of Koreans in the United States as saying in a commentary.

There was no official demand for compensation from North Korea but analysts have noted that since the government controls the media, it only permits approved comments to appear.

The 4,000-tonne ship the Pong Su had been impounded since 2003, when it led the Australian navy on a 1,100 kilometre chase off the south-eastern coast after being spotted unloading part of a 150 kilogram shipment of heroin at a secluded beach.

Eight crew members were charged with drug smuggling.

The captain and three officers were sent back to North Korea earlier this month after being found not guilty of aiding the drug operation. Four other men have been found guilty of drugs charges relate to the case.

The United States has said it suspects North Korea of engaging in illicit activities such as counterfeiting and drug trafficking as a way to secure funds for its anaemic economy.

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Dock No. 2 of Ryongnam Ship Repairing Factory Commissioned

Friday, March 24th, 2006

KCNA
3/24/2006

A commissioning ceremony of the Dock No. 2 of the Ryongnam Ship Repairing Factory took place on the spot on Friday. With the building of the large computer-aided dock capable of repairing tens of thousands of tons of several ships simultaneously at the factory the capacity of ship repairing has remarkably increased and firmer material and technological foundations have been laid to develop the shipping industry of the country as required by the new century. A message of thanks sent by the Central Committee of the Workers’ Party of Korea to officials and builders of the Ministry of Land and Marine Transport who performed great labor feats in the construction of Dock No. 2 was conveyed at the ceremony. The message said that the officials and builders of the ministry who turned out as one true to the behests of President Kim Il Sung on further increasing the capacity of the factory and the militant tasks of the WPK performed the great labor feats in completing the construction of Dock No. 2 in a big and bold way with their own efforts in a short span of time.

It highly appreciated the officials and builders of the ministry for displaying intense loyalty to the Party and the leader and patriotic devotion and successfully building Dock No. 2 as a monumental edifice of the Songun era.

Speeches were made at the ceremony.

Present there were Vice-Premier of the Cabinet Ro Tu Chol, Minister of Land and Marine Transport Kim Yong Il and other officials concerned.

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N Korean heroin ship sunk by jet

Thursday, March 23rd, 2006

BBC
3/23/2006

Video of the ship’s destruction on Youtube

A North Korean cargo ship that was used to smuggle heroin into Australia has been sunk by an Australian fighter jet.

An F-111 aircraft bombed the Pong Su during target practice on Thursday at a secret location offshore, police said.

Australian troops seized the ship in 2003 after spotting it unloading part of a huge heroin shipment at a beach.

The Australian government said the bombing was a warning to North Korea to halt its involvement in drug smuggling – an allegation Pyongyang rejects.

“It is appropriate that we publicly demonstrate our outrage at what has happened by sinking this ship,” Foreign Minister Alexander Downer said.

Captain cleared

“We are concerned about possible links between the North Korean ship and the North Korean government.”

The Pong Su’s cargo of heroin, worth about US$115 million (£66 million), would have provided four million hits of the drug on Australian streets, Mr Downer said.

Earlier this month, an Australian jury cleared the captain of the Pong Su and three officers of involvement in an international drug ring.

But four crew members who were involved in transporting the heroin from ship to shore pleaded guilty to drug charges.

Two have been sentenced to 22 and 23 years in prison and the other two are awaiting sentence.

The 3,500-tonne Pong Su was used to smuggle in more than 125 kilograms of heroin.

High-sea chase

It had anchored off the town of Lorne in Victoria state while the cargo was carried ashore by dinghy.

It was seized in April 2003 after a four-day chase by the Australian navy.

Earlier this week, the freighter was towed out of Sydney Harbour to a location 140km (90 miles) off the coast of eastern Australia, the Australian Federal Police said.

The fighter jet then dropped the bomb that sank the ship, the police added.

Although North Korea has denied any link to the smuggling operation, Mr Downer said it was hard to imagine a shipping company acting on its own in Pyongyang’s Stalinist-style economy.

“I mean this isn’t, after all, a private sector economy where private companies are doing things on their own accord,” Mr Downer said.

“North Korea has been involved in illicit drug trade, North Korea has been involved in illicit financial dealings, and North Korea has been involved in the illicit trade in WMD (weapons of mass destruction) technology over quite some years,” he added.

Australia and the United States have said the case of the Pong Su strengthens their suspicions that Pyongyang deals in drugs to help support its failing economy.

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Looks Like the Answer is “no”

Thursday, March 23rd, 2006

North Korea does not get its drugs/ship back.

From the BBC:

A North Korean cargo ship that was used to smuggle heroin into Australia has been sunk by an Australian fighter jet.

An F-111 aircraft bombed the Pong Su during target practice on Thursday at a secret location offshore, police said.

Australian troops seized the ship in 2003 after spotting it unloading part of a huge heroin shipment at a beach.

The Australian government said the bombing was a warning to North Korea to halt its involvement in drug smuggling – an allegation Pyongyang rejects.

“It is appropriate that we publicly demonstrate our outrage at what has happened by sinking this ship,” Foreign Minister Alexander Downer said.

The Pong Su’s cargo of heroin, worth about US$115 million (£66 million), would have provided four million hits of the drug on Australian streets, Mr Downer said.

Earlier this month, an Australian jury cleared the captain of the Pong Su and three officers of involvement in an international drug ring.

But four crew members who were involved in transporting the heroin from ship to shore pleaded guilty to drug charges.

 

Two have been sentenced to 22 and 23 years in prison and the other two are awaiting sentence.

The 3,500-tonne Pong Su was used to smuggle in more than 125 kilograms of heroin.

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Kaeson Training Facility

Thursday, March 23rd, 2006

From the Washington Times:

South Korea plans to open a job training center in the North to improve the skills of North Koreans who work in South Korean-owned companies. 

The training center, to open in June, each year will offer training in 13 areas of work to 4,000 employees of midsized companies, the state-funded Human Resources Development Service of Korea said in a statement.

“The center will conduct job training and supply a quality workforce to our companies which will move in the Kaesong Industrial Complex,” it said.

South Korea’s government has allocated $16.4 million to construct the training center in the industrial zone, The Korea Herald reported Thursday. 

Currently, 11 South Korean companies employ 6,000 North Korean workers and 600 South Korean workers in the zone, according to the Ministry of Labor.

The ministry expects that some 300 firms will eventually recruit 90,000 North Korean workers when the first-stage development of the inter-Korean complex is completed in 2007, the newspaper reported.

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