Archive for December, 2006

North Korea selling off gold reserves

Wednesday, December 27th, 2006

Korea Herald

North Korea, desperate for foreign currency under U.S.-imposed sanctions, has started to sell its gold reserves on international markets, a Japanese newspaper said Tuesday.

The United States last year blacklisted a Pyongyang-linked bank in Macau, infuriating the communist regime which walked out of disarmament talks for 13 months during which it tested an atom bomb.

Since the US crackdown on the bank, North Korea has earned 28 million dollars in foreign cash by exporting gold to Thailand, which had not imported gold from Pyongyang for the previous five years, the Yomiuri Shimbun said.

North Korea exported 500 kilograms of bullion to Thailand in April and another 800 kilograms a month later, the conservative Japanese daily said without identifying its sources.

North Korea’s central bank, Choson Central Bank was also re-listed on May 12 for trading on the London Bullion Market, said the newspaper, quoting a spokesman for the London market.

The North Korean central bank, which can issue currency, joined the London gold market in 1976 but was de-listed in June 2004 due to inactive trading, the newspaper said.

The Yomiuri, citing South Korean data, said North Korea was estimated to have between 1,000 and 2,000 tons of gold reserves.

The United States blacklisted Macau’s Banco Delta Asia in September 2005, saying it suspected that 24 million dollars in North Korean accounts were linked to counterfeiting or money-laundering.

The accounts have been frozen and other Asian banks have taken similar moves.

The financial sanctions were a main topic during six-nation talks, aimed at persuading North Korea to end its nuclear program, which ended in deadlock last week in Beijing.


Zoos plan inter-Korean exchanges of their own

Wednesday, December 27th, 2006


A South Korean zoo plan to exchange two lions with two bears and seven foxes from a North Korean zoo this week in the North Korean city of Kaesong, South Korean officials said Wednesday.

The Ministry of Unification, which handles inter-Korean affairs, gave the green light earlier in the day to the exchange, which will take place Friday between Seoul Grand Park and Pyongyang’s Central Zoo.

Seoul Grand Park, which has a zoo, plans to bring the animals from the North via an overland route running through the demilitarized zone that separates the two Koreas.

It is the first time for the South Korean amusement park to send lions to the North.

The two zoos have exchanged animals on six occasions since 1999, with 41 animals of 18 species brought into the South and 48 animals of 23 species sent to the North.


Is Kim Jong Il signaling shift in policy?

Wednesday, December 27th, 2006

It depends on who you ask.

As many DPRK-watchers are aware, Kim Jong Il’s “On the Spot Guidance” trips (OSGs) are importnat for several reasons.  Aside from giving Kim the ability to bypass the normal bureaucratic informaiton chanels and get a better (although not accurate) impression of on-the-ground conditions, they serve as powerful signals to military and party functionaries who see them on TV or read about them in the media.  Not only do these OSGs signal where Kim is directing his energies, they signal who he is devoting them to.  Usually the names of functionaries who are joining him are reported in the North Korean press.

On 12/11/2006, the Daily NK reported that Kim has shifted his focus from military sites to economic development sites.  If so, this would be a positive developent (article available at bottom).

Today (12/27/2006), Yonhap reports another dake on the data:

North Korean leader Kim Jong-il appeared at 66 public functions related to his country’s armed services this year although he significantly cut back his appearances amid international unrest over the communist nation’s missile and nuclear tests.

As of Tuesday, Kim had made 99 public appearances, down from 121 during the same period last year.


Daily NK
Kim Yong Hun

Kim Jong Il has been gathering much interest following the nuclear experiment. In the past, he was known for making visits to military grounds, but recently has been inspecting grounds of economic development such as the farms.

More specifically, since the reconvening of the six party talks last month, Kim Jong Il has been making vigorous public outings 3 times a week. This month already he has made 5 inspections alone. On the other hand, after the missile launch last July, Kim Jong Il concealed himself for 40 days and made only 3 public outings following the nuclear experiment in October.

Last month, Kim Jong Il made 13 onsite inspections, of which 4 were made to military grounds and 9 inspections focused on economic development areas such as industrial sites, power plants and farms.

He visited sites such as Ryongsung Machine Complex in Hamheung, Heungnam Fertilizer Complex, Hamheung Chemical Industry University, Geumjin River Heungbong Youth Power Station in Hamjoo-gun, the construction site of Gumjin River Guchang Power Station in Jeongpyong-gun, and Kwangpo Duck Farm. Further within this month of December, he is known to have made visits to sites such as the construction site of Yesung River Power Station in North Hwanghae-province, Rice Collective Farm in North Hwanghae-province.

North Korean Central News Agency proclaimed Kim Jong Il’s onsite visits, “Hamkyung is the heart of our industries such as chemical, machinery and mining. As a result, it is responsible for a greater part of our nation’s economic development.”

For now, it has been analyzed that Kim Jong Il’s active visits symbolize a sigh of relief having thrown the “reconvening six party talks” card on the table, following the threat of national decline from the U.N. Security Council’s North Korea resolution and the continuous U.S’ financial sanctions.

Also, it seems that he carries a hope that changes will inevitably be made to the Bush Administration’s North Korea policy with the victory of the Democrats at the recent election. In addition, it was suggested that these regional tactics would be employed until the end of the 2008 presidential election, while proclaiming reconvening of six party talks, “reduction of nuclear armaments” and removal of financial sanctions to subside the intensified threat from the missile launch and nuclear experiment.

Moreover, it has been analyzed that with the unexpected suspension of food assistance and increased economic sanctions by the international community resulting from the missile launch and nuclear experiment, this attempt to look after the military in association to military politics and showing interest in the economy is to further urge “self-revitalization” and intercept in the disturbances by citizens.

According to a North Korean inside document “Lecture materials for officials and military” that was publicized on Donga Ilbo last 6th contained the following information “Just as we succeeded in developing nuclear armaments and evaded U.S. threat, now we are able to focus on economic development and the improvement of our people’s lifestyle.”

Regarding this, Professor Nam Sung Wook of Korea University said in a telephone conversation with the DailyNK “Kim Jong Il’s active movement’s construes that the threat on the nation has pacified and suggests that in future he will go about with normal activities” and “In particular, he will probably focus on revitalizing the economy.” However, he predicted “There are always orders but it will be difficult to expect much” and “From now on, North Korea will probably move towards its old ways.”

In fact, according to sources inside North Korea, last month North Korean authorities held meetings around the nation targeting soldiers and citizens proclaiming that “With the success of the nuclear experiment, in future we will focus on reviving our republican economy.”

On the other hand, Kim Jin Chol (pseudonym) who defected in 2005 said “Kim Jong Il will only be making onsite visits to protect his image and show that he is looking out for the people who are experiencing difficult times due to the nuclear experiment and such” and alleged “On the whole, North Korean citizens know that these acts by Kim Jong Il are only for “show” and so did not anticipate very much.”

Kim said “Kim Jong Il’s onsite visits are basically to gather support and merely to make orders” and criticized “Until now, North Korea has not adopted any fundamental measures but has only advocated ‘Self-revitalization.’”


Coal Production Goes up in DPRK

Tuesday, December 26th, 2006


Efforts are being made to ardon this year with fine labor feats at collieries throughout the Democratic People’s Republic of Korea. The coal production is ever growing these days thanks to the enthusiasm of coal-miners who have turned out to implement the tasks set forth in the joint editorial for this year and joint slogans.

The Sunchon Area Youth Coal Complex has given precedence to tunneling to create reserve coal cutting faces, thus opening a bright prospect for coal production.

The February 8 Jikdong and Chonsong Youth Coal Mines, which take the Lion’s share in the complex, are making use of rational cutting and transporting methods to turn out more coal than before while saving materials.

All the coal mines of the Tokchon Area Coal Complex including the Tokchon, Sochang Youth and Toksong Coal Mines are carrying on the daily tunneling assignments at over 150 percent with the application of advanced tunneling method, creating reserve coal fields.

A collective innovation is taking place at coal mines of the Onsong and Kaechon Area Coal Complexes. They have introduced into production innovative mining and blasting methods to suit the conditions of coal fields and rock quality.

The Kujang Area Coal Complex is concentrating efforts on big coal mines with good cutting conditions and big production capacity while improving transport conditions.

The workers of the Anju and Pukchang Area Coal Complexes provide thermal-power generations and other fields of the national economy with a large amount of coal with high sense of responsibility and pride of being the pilot of the national economy.


DPRK charters flights for pro-Pyongyang Koreans in Japan

Tuesday, December 26th, 2006

N. Korea uses chartered flight to transport pro-Pyongyang Koreans in Japan

North Korea has sent chartered flights to Dalian, China, to ferry pro-Pyongyang Korean residents living in Japan, local civil aviation authorities said Tuesday.

Chinese authorities said North Korea’s Air Koryo flew into the port city on Nov. 22 and twice more on Dec. 1 and Dec. 10.

Air Koryo does not maintain regular flights to the city on the Liaodong Peninsula.

Airline officials said the flights were arranged to transport students from a school run by the General Association of Korean Residents (Chongryon), who wanted to visit the communist country.

It said there are no plans to continue the chartered flights.

The use of chartered flights comes after Tokyo banned the Mangyongbong-92 ferry from docking in Japanese ports in July. The ship had been the only regular passenger link between the two countries. The Japanese government initiated the ban after Pyongyang launched ballistic missiles into the East Sea.

Air Koryo operates regular weekly flights to Beijing on Tuesday, Thursday and Saturday, and flights to Shenyang in Liaoning Province on Wednesday and Saturday.


North Korean Chief Delegate Caught for Smuggling in 1992

Monday, December 25th, 2006

Daily NK
Kim Yong Hun

Oh Kwang Chul, president of the Korea Trade Bank (NK) and chief delegate of North Korea in ‘Banco Delta Asia financial sanctions working group,’ was once caught for smuggling 2 million dollars in France in 1992.

According to the Donga Ilbo’s report on February 12, 1993, Oh, director at the Chosun Foreign Trade Bank’s Paris branch at that time, was carrying 2 million dollars cash in a traveler’s bag at Paris Charles de Gaulle international airport in October, 1992, when French customs caught Oh and took him into custody.

In 1992, French regulation on foreign currency required prior-declaration for carry out of more than fifty thousands francs. Oh violated the rule and paid two hundred thousands dollars fine.

A former defector Oh, who had worked in North Korea’s trade and finance departments, confirmed the fact that president Oh had served for the North Korean state bank in Paris. “O” knew president Oh well and described him as one of the most talented bureaucrats in North Korea’s trade and financial affairs, along with Paik Hyun Bong chairman of the Foreign Economic Cooperation Committee and Kim Hyung Nam, head manager of Chollima Steel Kombinat.

President Oh is born in 1959, graduated from National Economics Institute in Pyongyang and studied in Russia. He was promoted to the Korea Trade Bank’s after 2000, in a wave of shift in generation in the government.

Oh was elected representative of the Supreme People’s Assembly in 2003 and participated in the UN Conference on Trade and Development in Geneva, Swtizerland in 2005.

Korea Trade Bank provides financial services for foreign trade in North Korea, such as settlement, foreign currency exchange, certification of payment for trade companies and decides exchange rates.


Chinese firms acquire managerial control of large N. Korean copper mine: sources

Sunday, December 24th, 2006


Chinese firms have bought a controlling stake in one of the largest copper mines in North Korea, industry sources said Sunday.

Sources familiar with business cooperation between North Korea and China said Hebei-based Luanhe Industrial Group and another privately owned company signed a deal that gives the firms control over Hyesan Youth Cooper Mine in Yanggang Province.


‘Karaoke boost’ for N Korea troops

Thursday, December 21st, 2006


North Korean leader Kim Jong-il is reported to have found a rousing way of boosting morale among his troops – by giving them karaoke machines.

He said karaoke sessions eased tensions in the ranks, but also encouraged competitiveness, state media reported.

North Korea has one of the world’s largest manned armies, but levels of training, discipline and equipment are reported to be low.

The secretive state alarmed the world with a nuclear test in October.

“I plan to send more song-accompanying machines to the People’s Armed Forces,” Kim Jong-il was quoted as saying by the Rodong Sinmun, the newspaper of the Workers Party of Korea, according to Japan’s Kyodo news agency.

He told a meeting of military commanders that “the atmosphere changed completely” among troops when they started to sing along to the tunes on the machine.

And he also noted that soldiers and officers competed with each other to get the highest scores, the newspaper reported.

Kim keeps track of the number of karaoke machines sent out to each troop division by writing it down in a notebook, according to the Rodong Sinmun.


Electricity Resumption in Border Area, Temporarily

Thursday, December 21st, 2006

Daily NK
Kang Jae Hyok

Inside source from North Korea said each house in Musan, Onsung, Hoeryong in North Hamkyong Province, would receive electricity from the December 19th to 24th, commemorating Kim Jong Il’s mother, Kim Jong Suk’s birthday (Dec. 24).

In a telephone interview with the Daily NK, thirty-eight years old resident of Musan, North Hamkyong “K” said electricity supply was resumed on Tuesday. “Public service workers visited each house and asked them to use only one light bulb per household.”

K said with delightful voice “I’m so happy that I could eat in a bright house, and I could watch TV and VCR, too.”

In this year, North Korea’s electricity production has been worsened than ever that only army barracks, strategic facilities and rice mills were provided electricity.

Lack of electricity has been common since the mid-1990s economic collapse. And it becomes worse in winter, because hydro-electric power plants, which comprise most of North Korea’s electricity-production, cannot produce energy in arid season.

Therefore, North Korea in winter is once described as a “wilderness” by a Korean-Chinese visitor.

Some wealthy North Koreans are equipped with own electric generators, including Chinese solar-light collectors.

In North Korea, electricity is supplied on holidays such as Kim Il Sung’s birthday April 15, Kim Jong Il’s birthday February 16, or Party Foundation Day. Since 1997, Kim Jong Il’s mother, Kim Jong Suk’s birthday has become an official holiday.


Frozen bank accounts hold $12 million from Hyundai

Thursday, December 21st, 2006

Joong Ang Daily
Choi Hyung-kyu, Kwon Hyuk-joo

Half of the $24 million in North Korean assets held in the frozen Banco Delta Asia accounts came from the Hyundai Group of South Korea, sources here told the JoongAng Ilbo yesterday. Other sources said North Korea will be able to access some of the frozen holdings next week, because the money had been proven “legitimate.”

The Macao-based bank froze the North Korean holdings last year after the U.S. government accused Pyongyang of financial crimes, such as money laundering and counterfeiting U.S. dollars. Since then, the North has made the unfreezing of those assets a precondition for the nuclear disarmament negotiations.

A U.S. source who requested anonymity said yesterday the $12 million was a part of Hyundai Group’s payments to North Korea for inter-Korean businesses. The money was wired in several payments, the source said. The payments were initially sent to other bank accounts that deal with North Korea, the source said, and then forwarded to the Banco Delta Asia accounts from there.

To deposit a large sum, an account holder must inform the bank in Macao about the source of the money and its purpose. The source showed North Korean account holders’ statements which claimed the deposits came from Hyundai.

Another source well informed about Banco Delta Asia affairs also said the money came from Hyundai.

“It is not easy to distinguish how much of the North Korean assets was earned from legitimate economic activities,” a senior South Korean government official said. “To sort the matter out, the United States and North Korea should meet and discuss the issue.”

In Beijing, O Kwang-chol, the president of the Foreign Trade Bank of Korea, has been meeting with U.S. Deputy Assistant Treasury Secretary Daniel Glaser since Tuesday.

Signs also pointed to a thawing of the freeze on the accounts in the near future. Other sources said Pyongyang has dispatched officials to the city of Zhuhai in China with papers necessary to withdraw the $12 million from the bank in Macao. They said access will likely be granted Tuesday or Wednesday of next week.

Hyundai Asan, Hyundai Group’s North Korea business arm, said yesterday it has not sent any money to a Banco Delta Asia account. The Mount Kumgang tour program began in 1998.

The company said it has wired $1 million a month to an overseas bank account designated by North Korea.

A senior official with Hyundai Asan said North Korea frequently changed the account. “I don’t know if our payment was later wired to BDA accounts or not, but I think that could be possible,” he said.

Hyundai Group provided $500 million to North Korea on the eve of the 2000 inter-Korean summit by wiring the money to a North Korean account with a foreign bank, but the sum currently frozen at the Banco Delta Asia accounts is not connected to that, the sources said.