Archive for April, 2006

Kaesong workers subject to “Income Taxes”?

Friday, April 14th, 2006

From the Daily NK:

Workers in the Kaesong Industrial Complex are officially paid $57.50/month.

North Korean workers only receive 4500W ($1.5/month) after various deductions. So North Korean workers only take 2.6% of their wage home. This is still twice of the wage of normal North Korean workers, so they are satisfied.

North Korean workers in Kaesong Industrial Complex might not recognize that this is a problem. They are used to obeying the government. 

I would not be happy paying 97.4% income tax.  I try to avoid getting out of my relatively low American taxes as it is.   I would not work (above ground)…unless I was really hungry.



Is the Kaesong Industrial zone a Human Rights Issue?

Thursday, April 13th, 2006

Discussion from the Korea Times:

“Yes” Reasons:
-Prolonging the life of the Kim Jong-il regime at the expense of its people
-The North cheats its own workers by not giving them their full pay. There are no unions in Kaesong Industrial Park and workers are expected to work unpaid overtime regularly
“No” Reasons:
-Mini-Marshall Plan
-Workers there earn $58 per month and work under excellent conditions and are much better off than North Korean workers elsewhere.

Other factoids:
Kim Dong-Keun, president of the complex’s Industrial Management Committee said “The North Korean workers are very diligent with high manual skills. Their productivity level is on average 80 percent that of their South Korean counterparts.”

A manager at Hyundai claimed, “Workers’ income at the complex is about 5-10% that of South Korean workers, which is much more than North Koreans generally earn. And they work under better conditions, too”



ROK film maker, kidnapped by DPRK, passes away

Tuesday, April 11th, 2006

The story of Mr. Shin Sang ok and is wife Choe Eun Hui is pretty incredible.

Here is the full story in Wikipedia.

Here is a clip of his Pulgasari

Here is his obituary in the Economist:

Mr Shin was a South Korean movie director. In 1978, Mr Kim, a movie buff, had him kidnapped and whisked to the hermit kingdom to make its revolutionary film industry less awful.

Before then, Mr Shin was best known for giving South Korean audiences their first on-screen kiss. During the 1950s and 1960s he made dozens of films, several of which depicted Korean women’s struggles against patriarchal convention. His favourite leading lady was his wife, the dazzling Choi Eun-Hee. In the 1970s Mr Shin’s career waned, and it came to an abrupt halt when he upset South Korea’s military government by complaining about censorship. His movie company was swiftly shut down.

Mr Kim, then the unacknowledged heir apparent to the world’s first hereditary communist monarchy, saw his opportunity. First, he had Ms Choi lured to Hong Kong, kidnapped and shipped to a North Korean port. Ever the gentleman, he turned up at the dock to greet her. “Thank you for coming, Madame Choi,” he said, as if she were stepping off a cruise ship.

Although they had recently divorced, Mr Shin was naturally alarmed at his ex-wife’s disappearance. He followed her trail to Hong Kong, where he too was abducted. In North Korea, he was put up in a comfortable guest house, but insisted on trying to escape. One day he borrowed a car, drove to a railway station, hid among crates of explosives and crept aboard a freight train. He was caught the next day, and soon found himself in a hellish prison camp.

Even there, however, he was protected from afar. When he tried to starve himself to death, officials force-fed him through a funnel. A guard told Mr Shin that he was the first attempted suicide he’d ever seen saved—so he must be very important.

After four years, Mr Shin won his release through a series of abjectly apologetic letters to Kim Jong Il and his father, President Kim Il Sung. He was brought to a dinner party in Pyongyang, the capital, and face-to-face with his ex-wife, who had not known until that moment that he was in North Korea. “Well, go ahead and hug each other. Why are you just standing there?” said the Dear Leader, who then suggested that they re-marry. They did as they were told.

At last, Mr Shin’s talents could be put to good use. Mr Kim was worried that films produced in decadent, capitalist South Korea were better than those produced in the North. Perceptively, he explained to Mr Shin that this was because North Korean film workers knew the state would feed them regardless of the quality of their output. In the South, by contrast, actors and directors had to sweat to make films the public would pay to see. Mr Kim wasn’t saying that there was anything wrong with socialism, of course, but he gave Mr Shin millions of dollars, a fancy marble-lined office and more artistic freedom than any North Korean director had ever enjoyed before.

Films fit for Cannes
Mr Kim did not want Mr Shin to make crude propaganda. Oh no. He wanted films that would win awards at international festivals. And although the tubby tyrant had previously argued, in his book “On the Art of Cinema”, that good movies should glorify the party, the system, his father and himself, he realised that this was not a fail-safe formula for wowing the judges at Cannes.

So he let Mr Shin shoot some watchable films, including “Pulgasari”, a Godzilla-inspired affair about a metal-eating monster who helped 14th-century peasants overthrow their feudal lords. The director and his wife were obliged to give a press conference explaining that they had willingly defected to North Korea, but otherwise they were treated far better than most of the Kim dynasty’s hapless subjects. Mr Kim must have thought that was good enough to keep them loyal, for he allowed them to travel. As soon as they saw a chance to dodge their bodyguards, during a promotional trip to Vienna in 1986, they fled to the American embassy and sought asylum.

Mr Shin was at first reluctant to go home, for fear that South Korea’s security police might disbelieve his fantastic tale and suspect him of communist sympathies. Fortunately, he and his wife had made, at mortal risk, clandestine tape recordings of conversations with Mr Kim. These, and the couple’s memoirs, are among the most useful accounts we have of the secretive (and now probably nuclear-armed) Dear Leader’s personality: charming, shrewd, quirky, malevolent.

Mr Shin continued to make films until shortly before he died. His last years were frail; he had a liver transplant in 2004. Ms Choi survived him, and his last film, about an old man with Alzheimer’s, is yet to be released.


Sinuiju Price Data

Monday, April 10th, 2006

From the Daily NK:

Computer Prices (Mar 14, 2006):
-17inch Pentium Ⅲ is US$110~120 retail ($90 wholesale price)
-A printer is US$65~70
-10 Floppy discs are 5,000W
-A keyboard is US$20
-A mouse is US$5

Snack prices (March 28, 2006)
-roast chicken is 6,500-8,000W
-roast duck is 9,000~12,000W
-750g of noodles are 2,400W
-box of Korean noodles is 6,750W
-1kg of potatoes is 400W
-1kg of Beans is 700W
-1kg of wheat flour is 750W (690W at wholesale price)
-400g of Milk is 5,000W
-1kg of Butter powder is 5,000W
-25g of Baking powder is 400W
-1kg of Chinese noodles of 2,000W
-1kg of dried cuttlefish is 8,800W.

Entertainment Costs (March 28, 2006)
-movie admission fee is 50W
-comic book is 1,500W, to borrow 100W
-Swimming pool is 70W
-bath admission fee is 2,500W
-5,000W ($1.67) /huor to use a Karaoke singing room
-1,000W ($0.33) /hour to use a computer in an internet café

Other Prices
sanitary napkin is 500W, 600w, and 1,000w
-Skin lotions of three kinds are 42,000w
-Aloe cosmetics of three kinds are 42,000w
-A set of cosmetics (a skin cream and a skin lotion) is 10,000w (made in South Korea), 3,500w (made in China)
-Small gas cooking stove is 27,000w (made in South Korea / 25,000w in a wholesale price
-An electric bicycle is 150-200w.

North Korean inflation has increased following consecutively excessive issues of the 500W, 1,000W, and 5,000W notes.

Cities that can provide North Koreans with leisure facilities to enjoy are only Pyongyang, Shinuiju, Chongin, Hamhung, and Rasun. These cities possess big theaters, amusement parks, and swimming pools. Especially Shinuiju, which is close to China, has been introduced with foreign cultures and commodities very quickly. Shinuiju residents are also in the highest economic class of the North Koreans. Thus, Shinuiju has internet cafes, singing rooms, saunas, massage rooms, and comic bookstores.

The investigation was carried out by traders visiting Shinuiju in March and attaining the price levels concerned and then DailyNK gathered the information and cross-examined it.

Also, another trader emphasized that, “The official wage of North Korean workers is about 3,000 won. At the same time, the price for using a singing room per hour is 5,000 won. It shows how badly North Korea has been transformed,” adding that, “Shinuiju is the city where traders doing business with big money from North Korea and China gather. Such singing rooms, PC rooms, and saunas are just for them.”

Items marked by dollars in the price index below are usually paid in dollars, not North Korean won. A Chinese businessman who participated in the price investigation informed us that, “Currently in North Korea, the dollar is used frequently enough to be called ‘common currency’ and has more exchange value,” adding, “As trading costly articles, their paying in dollars makes them win credits.” He also said that, “That the dollar is exchanged into North Korea won is welcomed, yet to exchange the won into dollars is often impossible, even double the value.”

Now, in the early of April, the exchange rate of the dollar in North Korean black markets is roughly 3,000 won against the dollar.


Myanmar ‘to reopen ties with N.Korea’

Monday, April 10th, 2006

From the Australian:

Myanmar has decided to restore diplomatic ties with North Korea, more than 20 years after the DPRK staged a deadly bomb attack in Rangoon.

The diplomat said no official announcement had been made and an announcement might come only when the Myanmar junta names its ambassador to Pyongyang.

Analysts said the restoration of ties between two of the world’s most secretive regimes could have benefits for both.  Burma is looking for arms suppliers to circumvent Western sanctions, while North Korea has eyed Burma’s offshore natural gas reserves.

“They want to get military equipment from North Korea because under western pressure they cannot get weapons from the West,” said Win Min, a Burmese military researcher based in Thailand.

“Now they can get (weapons) from China and they are trading with India. So the more places they can get weapons, the better for them,” he said.

The United States considers both Burma and North Korea as “outposts of tyranny”, which gives them some shared goals in working around US foreign policy, the analyst said.

“Pyongyang, which the military regime admires for its defiant attitude against the United States, can surely become a diplomatic asset,” he said.

Burma broke off diplomatic ties with North Korea in 1983 after it masterminded an attempt to assassinate South Korea’s then-president Chun Doo Hwan while he was on an official visit to Rangoon.  North Korea staged a bomb attack on Chun’s delegation as they visited the Martyr’s Mausoleum, near the famous Shwedagon pagoda, on October 9, 1983.  Chun survived the attack but the blast killed 17 of his entourage, including four cabinet ministers, while 17 others were injured. Four Burmese officials also died in the blast.

Two of the North Korean bombers were captured and one of them is still serving a life sentence in Burma’s notorious Insein prison.


Kaesong, US technology, trade with villages

Thursday, April 6th, 2006

From the Asia Times

The only currency used in the complex is the US dollar.

No foreign investors have yet signed up for the zone

Washington requires high-tech products destined for North Korea that include US intellectual property to undergo stringent export controls. This has irritated many in the South – particularly after the process delayed the transfer of telecommunications equipment. It also appears highly unlikely that Kaesong-built products will be included in a free-trade agreement between Seoul and Washington that is under negotiation.

Officials of the complex say they have assisted local villagers with heating briquettes and rice, but there is otherwise neither trade nor contact across the fence, indicating that the experience of capitalism is strictly insulated. This assumption is buttressed by relations inside the complex: despite talk of inter-Korean fraternity, social contact between Northern and Southern workers is non-existent.

While the railways between the two Koreas were reconnected in early 2004, theoretically linking Seoul and Sinuiju on North Korea’s Chinese border, it is uncertain when trains will start to run through Kaesong.

“There will be talks on opening the line in July, but it is not certain,” said a South Korean official at Dorasan Station, a giant steel-and-glass edifice on the southern side of the border. The lack of rail transport complicates his firm’s logistics costs, said Stafild’s Moon, whose head office is on the south coast of the peninsula, in Busan.


Tumen River Development Project

Thursday, April 6th, 2006

From the Daily NK:

The deputy director of Yanbian Korean Autonomous Prefecture in Jilin Province recently said he plans to “establish permanent trade relation with North Korea and pursue multinational tourism projects which connects China-North Korea-Russia through Tumen River Area Development Project”. He also said, “the government of Yanbian Korean Autonomous Prefecture will more actively pursue cooperation with North Korea during the 11th Five-Year Plan(2006~2010)”.

The Korean Autonomous Prefecture decided to establish 2 level highway between Rajin, North Korea and Yuanzheng maritime customs, Hunchun, China and to reconstruct the tailway between Rajin and Onsung in North Hamkyung Province.

Lee Yong Nam at Department of Trade in North Korea said, “economic trade between North Korea-China is improving with the attention of leaders in each country. Intimate economic cooperation will be maintained by all means possible”.

China gained exclusive right to use and develop Rajin port in North Korea, as compensation for establishment of high way in Wonjung-Rajin in North Hamkyung Province. China was excused from all the custom formalities of labor and equipments related to the establishment and development of highway and port, from which they saved 4 million Yuan per year.

Through the trading zone between North Korea-China in Tumen River area, China plans to export food, fertilizers, electronics, textile, plastic goods, cigarrete, mechanical devices. Yanbian Korean Autonomous Prefecture had 11 million 430 thousand dollars trade surplus from trade with North Korea in the first half of last year. A government official at the local government said, “trade surplus will increase drastically when the trading zone between North Korea- China is established” with excitement.




Some info on the Tongil Market

Wednesday, April 5th, 2006

The Tongil (Reunification) Market is the most famous in the west.  It made a cameo appearance in the wonderful documentary A State of Mind, and is fairly easy to spot on google earth.

Here are its origins (innacuracies listed at bottom), according to the Nautilus Institute:

Following DPRK leader Kim Jong Il’s instruction in March 2003, which allowed for the transformation of farmers’ markets into consolidated markets, the Unification Market opened as the largest market in Pyongyang on September 1st of the same year. With 1,500 booths spanning over 6000 sq. meters, the market is divided into three zones — agriculture produce and fish products, food and clothing, and metal utensils and appliances — with each zone housing a management office, money changer, and a food court, which offer a variety of conveniences to the customer.

What kinds of goods can be found for sale in Pyongyang? Towards the end of last February, one Chinese reporter introduced us to merchants selling luxurious Chinese clothing and flower-pattern dresses at the ‘Unification Market’, North Korea’s representative market located near Pyongyang’s Rakrangku Station.

These days, the Unification Market is jam-packed with people looking for quality designer clothes and shoes, which are mostly made and brought in from China. Also abundant are the peddlers: mainly North Korean women in their forties who (to this reporter) were not distinguishable from the average middle-aged Chinese woman. Despite being a whirlwind of activity, these colorfully dressed women — white hats, pink clothes, and floral-print aprons — still managed to radiate grace.

According to the reporter, “Through recent investments by Chinese retailers, China is introducing modern fashion lines, designs, and dyeing technology, and this is having a huge effect on the clothing worn by North Koreans as well. These days, North Korean clothes are reflecting current fashion trends.”

A look around the market revealed that although vegetables were 20 percent more expensive than in China, seafood and clothing was 20 percent cheaper. Take into account, however, that the average monthly income of a North Korean farmer is 3,000 – 10,000 DPRK won (approx. 20 – 70 USD), and goods in the Unification Market are not particularly cheap. Be that as it may, after observing not just a few people coming and going with goods in hand and full shopping baskets, it was surmised that “the lives of ordinary North Korean citizens” — or at least those residing in Pyongyang — “are definitely improving.”

As economic recovery continues, the demand for electrical appliances seems to be growing among ordinary households. The very first Chinese appliance to enter the North Korean market, the Sinbi refrigerator, now occupies 40 percent of the market share, and can be easily found even in government facilities.


The North Korean Won trades officially at about 100W to US$1.  In the Tongil Market and in markets throughout the country the exchange rate is closer to 3,000W/US$1. 


The DPRK does not allow people to take pictures of the market.  I am not sure why.  There are plenty of official photos on line.  Prices are freely bargained and transactions are conducted in Won.  Venders pay a flat fee to set up shop in the market.  They sell chinese knock-offs of fancy western colognes inside.  Car Parking is not free…30W.  The bike shed is.


Are US Sanctions Affecting DPRK regime?

Monday, April 3rd, 2006

From Chosun Ilbo:

U.S. Treasury Department Under Secretary Stuart Levy said its ongoing financial sanctions against North Korea put “huge pressure” on the regime that could have a “snowballing … avalanche effect.  

Washington identified Macao-based Banco Delta Asia as Pyongyang’s “primary money-laundering concern” last September. since then the bank has folded.  According to Newsweek, “In today’s interconnected financial world, an official U.S. move to blacklist a foreign bank would be the kiss of death, since any financial institution doing business in dollars needs to hold accounts in correspondent U.S. banks in order to complete transactions.” Washington believes it has finally found a strategy that is putting real pressure on the regime — going after its sources of cash, all across the world.

Kim Jong il is reported to have told Chinese President Hu Jintao during a visit to China in January that his regime might collapse due to the U.S. crackdown on its financial transactions. [but this could be a bargaining chip to use aginast China…help us, or the US gets the peninsula].

“Numerous U.S. government agencies, including the FBI, Treasury, State Department and CIA, have been working for three years to curtail Pyongyang’s vast network of black-market activities” and “to cut off the financial conduits by which the proceeds are laundered.”

North Korea complains the sanctions imposed by the U.S. made its legitimate financial transactions impossible, and is boycotting six-party talks on its nuclear program as a result.