Archive for April, 2007

New prime minister says Kaesong Industrial Complex to benefit from FTA with U.S.

Tuesday, April 3rd, 2007

Yonhap
4/3/2007

Incoming Prime Minister Han Duck-soo said Tuesday that goods produced in a joint industrial complex in North Korea will benefit from a free trade pact agreed upon with the United States the previous day.

Denying reports that the free trade agreement put aside the country-of-origin issue for future negotiations, Han said that the two countries cleared the way for treating goods produced in the Kaesong Industrial Complex as made in South Korea.

“The media reports that the Kaesong Industrial Complex was put on as a ‘built-in’ agenda are not true,” Han, who took office early in the day, told reporters in his inaugural press conference at the government building.

A “built-in” agenda refers to a negotiating scheme for sensitive issues in which the countries involved agree to put them on hold and discuss them in the future. Local reports have called the Kaesong issue “built-in,” as Seoul has been pushing for its inclusion in the trade deal despite Washington’s objection.

Under the deal, the two sides agreed to establish a “committee on outward processing zones on the Korean Peninsula” to discuss the Kaesong issue as part of their trade liberalization. But they also stipulated that such a step will be made under specific circumstances, such as the progress in denuclearizing North Korea, according to a statement by the Ministry of Foreign Affairs and Trade.

Han said the agreement is in line with South Korea’s constitution that its territory is the entire Korean Peninsula, and it does not recognize North Korea as a state.

Han also said the government will make public all of the contents of the agreement in mid-May when it is expected to be completed, and all the documents related to the agreement will be released three years later.

The Kaesong complex, just north of the inter-Korean border, is one of two flagship projects the South operates in the spirit of reconciliation with the North following the historic inter-Korean summit in 2000. Over 11,000 North Korean workers are employed by dozens of South Korean companies there, where they produce garments, utensils and other labor-intensive goods. Another reconciliation project is the operation of tours to the North’s scenic Mount Geumgang.

South Korean companies operating in Kaesong say the inclusion of the goods in the FTA is crucial, as this will allow them to export goods to the world’s largest market, as well as provide a template for future trade deals with other countries. 

U.S. Accepts Kaesung Industrial Complex as an “Outward Processing Zones”
Daily NK
Kim Song
4/3/2007

A press conference was held following the conclusion of the Korea-U.S. Free Trade Agreement (FTA) on the 2nd where Korea’s Trade Minister Kim Hyun Chong announced, “The U.S. agreed to recognize the Kaesung Industrial Complex as a remote location.” By this he meant that goods manufactured in Kaesung complex would be accepted as goods made in Korea.

As annexes to the agreement, Committee on Outward Processing Zones on the Korean Peninsula must be established. Undeniably, the article also states that the contents would have to be approved by the U.S.

It seems that both sides agreed that this approach would be the U.S.’s minimal request and compromise on the Kaesung issue and a built-in tactic to keep the negotiating flame burning rather than a deal-breaker.

Previously, the U.S. made concessions regarding Outward Processing Zones with Singapore and Israel’s FTA. As for Korea, these preferential tariffs, not only acknowledges goods manufactured from Kaesung by the FTA, but sets a standard to other sectors in the world such as the European Free Trade Association and ASEAN.

It appears that the recognition of Kaesung as an Outward Processing Zone was based on an agreement that the Korean Peninsula would advance towards denuclearization.

The denuclearization of the Korean Peninsula will eventually lead to the removal of laws that will further eliminate hostile diplomacy and trade between the U.S. and North Korea. It is possible that denuclearization will establish the normalization of U.S.-North Korea relations and solve the issue of Kaesung naturally, in due time.

However, the denuclearization of the Korean Peninsula is not something to be solved within a short time. As a U.S. official once revealed, amity between the U.S.-North Korea can only be possible when North Korea decides to comply with the rules of the international community. In the bigger picture of the Korean Peninsula and economic conglomerate, Kaesung in relation to denuclearization is only a long-term sketch.

Furthermore, there is one minor glitch. Kaesung complex does not match the international standards accepted by the U.S. in relation to labor requirements and such. At any opportunity given, Jay Lefkowitz, U.S. Special Envoy on Human Rights in North Korea, has continuously targeted wage issues at Kaesung complex. Additionally, there have been many criticisms on pay issues regarding North Korean laborers working even within the nation, as well as violations to contracts of employment.

Throughout the FTA, President Roh Moo Hyun has been striving to protect rice while trying to negotiate the Kaesung Industrial Complex. Though President Roh argues that political calculations were omitted from the negotiations, these two issues contradict his words.

Some argue that the future will depend on South Korea’s attitude to the U.S. It is even possible that this is a political attempt by the U.S. to lure North Korea into denuclearization.

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Foreign Policy Memo

Tuesday, April 3rd, 2007

Urgent: How to Topple Kim Jong Il
Foreign Policy Magazine
March/April 2007, P.70-74
Andrei Lankov

From: Andrei Lankov
To: Condoleezza Rice
RE: Bringing Freedom to North Korea

When North Korea tested a nuclear weapon late last year, one thing became clear: The United States’ strategy for dealing with North Korea is failing. Your current policy is based on the assumption that pressuring the small and isolated state will force itto change course. That has not happened—and perhaps never will.

North Korea’s Kim Jong Il and his senior leaders understand that political or economic reforms will probably lead to the collapse of their regime. They face a challenge that their peers in China and Vietnam never did—a prosperous and free “other half” of the same nation. North Korea’s rulers believe that if they introduce reforms, their people will do what the East Germans did more than 15 years ago. So, from the perspective of North Korea’s elite, there are compelling reasons to resist all outside pressure. if anything, foreign pressure (particularly from Americans) fits very well into what Pyongyang wants to propagate— the image of a brave nation standing up to a hostile world dominated by the United States.

Yet, sadly, the burden of encouraging change in North Korea remains the United States’ alone. China and Russia, though not happy about a nuclear North Korea, are primarily concerned with reducing U.S. influence in East Asia. China is sending considerable aid to Pyongyang. You already know that South Korea, supposedly a U.S. ally, is even less willing to join your efforts. Seoul’s major worry is not a North Korean nuclear arsenal but the possibility of sudden regime collapse. A democratic revolution in the North, followed by a German-style unification, would deal a heavy blow to the South Korean economy. That’s why Seoul works to ensure that the regime in Pyongyang remains stable, while it enjoys newfound affluence and North Koreans quietly suffer.

Do not allow this status quo to persist. Lead the fight for change in North Korea. Here are some ideas to make it happen:

Realize a Quiet Revolution Is Already Under Way: For decades, the Hermit Kingdom was as close to an Orwellian nightmare as the world has ever come. But that’s simply not the case anymore. A dramatic transformation has taken place in North Korea in recent years that is chronically underestimated, particularly in Washington. This transformation has made Kim Jong Ii increasingly vulnerable to internal pressures. Yes, North Korea is still a brutal dictatorship. But compared to the 1970s or 1980s, its government has far less control over the daily lives of its people.

With the state-run economy in shambles, the government no longer has the resources to reward “correct” behavior or pay the hordes of lackeys who enforce the will of the Stalinist regime. Corruption runs rampant, and officials are always on the lookout for a bribe. Old regulations still remain on the books, but they are seldom enforced. North Koreans nowadays can travel outside their county of residence without getting permission from the authorities. Private markets, once prohibited, are flourishing. People can easily skip an indoctrination session or two, and minor ideological deviations often go unpunished. It’s a far cry from a free society, but these changes do constitute a considerable relaxation from the old days.

Deliver Information Inside: North Korea has maintained a self-imposed information blockade that is without parallel. Owning radios with free tuning is still technically illegal— a prohibition without precedent anywhere. This news blackout is supposed to keep North Koreans believing that their country is an earthly paradise. But, today, it is crumbling.

North Korea’s 880-mile border with China is notoriously porous. Smuggling and human trafficking across this remote landscape is rampant. Today, 50,000 to 100,000 North Koreans reside illegally inside China, working for a couple of dollars a day (a fortune, by North Korean standards). In the past 10 years, the number of North Koreans who have been to China and then returned home may be as large as 500,000. These people bring with them news about the outside world. They also bring back short-wave radios, which, though illegal, are easy to conceal. It is also becoming common to modify state-produced radios that have fixed tuning to the state’s propaganda channels. With a little rejiggering, North Koreans can listen to foreign news broadcasts.

But there are few broadcasts that North Koreans can hope to intercept. It was once assumed that South Korea would do the best job broadcasting news to its northern neighbor. And that was true until the late 1990s, when, as part of its “sunshine policy,” South Korea deliberately made these broadcasts “non-provocative.” There are only three other stations that target North Korea. But their airtime is short, largely due to a shortage of funds. Radio Free Asia and Voice of America each broadcast for roughly four hours per day, and Free North Korea (FNK), a small, South Korea-based station staffed by North Korean defectors, broadcasts for just one hour per day.

Being a former Soviet citizen, I know that shortwave radios could be the most important tool for loosening Pyongyang’s grip. That was the case in the Soviet Union. In the mid-1980s, some 25 percent of Russia’s adult population listened to foreign radio broadcasts at least once a week because they were one of the only reliable sources of news about the world and, more importantly, our own society A dramatic increase in funding for broadcasts by Voice Of America is necessary.  It is also important to support the defectors’ groups that do similar broadcasting themselves. These groups are regularly silenced by South Korean authorities, and they have to do everything on a shoestring. A journalist at the FNK gets paid the equivalent of a janitor’s salary in Seoul.  Even a small amount of money- less than U.S. military forces in Seoul spend on coffee-could expand their airtime greatly. With an annual budget of just $1 million, a refugee-staffed station could be on air for four hours a day, 365 days a year.

Leverage the Refugee Community in the South: There are some 10,000 North Korean defectors living in the South, and their numbers are growing fast. Unlike in earlier times, these defectors stay in touch with their families back home using smugglers’ networks and mobile phones. However, the defectors are not a prominent lobby in South Korea. In communist-dominated Eastern Europe, large and vibrant exile communities played a major role in promoting changes back home and, after the collapse of communism, helped ensure the transformation to democracy and a market economy. That is why the United States must help increase the influence of this community by making sure that a cadre of educated and gifted defectors emerges from their ranks.

Today, younger North Korean defectors are being admitted to South Korean colleges through simplified examinations (they have no chance of passing the standard tests), but a bachelor’s degree means little in modern South Korea. Defectors cannot afford the tuition for a postgraduate degree, which is the only path to a professional career. Thus, postgraduate scholarships and internship programs will be critical to their success. Without outside help, it is unlikely that a vocal and influential group of defectors will emerge. Seoul won’t fund these programs, so it will be up to foreign governments and non-governmental organizations to do so. Fortunately, these kinds of initiatives are cheap, easy to enact, and perfectly compatible with the views of almost every U.S. politician, from right to left.

Fund, Plan, and Carry out Cultural Exchanges: The Cold War was won not by mindless pressure alone, but by a combination of pressure and engagement. The same will be true with North Korea The United States must support, both officially and unofficially, all policies that promote North Korea’s Contacts with the outside world. These policies are likely to be relatively expensive, compared to the measures above, but cheap in comparison to a military showdown with a nuclear power.

It makes sense for the U.S. government to bring North Korean students to study overseas (paid for with U.S. tax dollars), to bring their dancers or singers to perform in the West, and to invite their officials to take “study tours.” Without question, North Korean officials are wary of these kinds of exchanges with the United States. However, they will be less unwilling to allow exchanges with countries seen as neutral, such as Australia and New Zealand. In the past, Pyongyang would never have allowed such exchanges to happen. But nowadays, because most of these programs will benefit elite, well- connected North Korean families, the temptation will be too great to resist. in-other words, a official in Pyongyang might understand perfectly well that sending his son to study market economics at the Australian National University is bad for the communist system, but as long as his son will benefit, he will probably support the project.

Convince Fellow Republicans That Subtle Measures Can Work: Some Republicans, particularly in the U.S. Congress, might object to any cultural exchanges that will benefit already-privileged North Koreans. And, for many, funding Voice of America isn’t as attractive as pounding a fist in Kim’s face. But these criticisms are probably shortsighted. As a student of Soviet history, you know that mild exposure to the world outside the Soviet Union had a great impact on many Soviet party officials. And information almost always filters downstream. A similar effect can be expected in North Korea. During the Cold War, official exchange programs nurtured three trends that eventually brought down the Soviet system: disappointment among the masses, discontent among the intellectuals, and a longing for reforms among bureaucrats. Money invested in subtle measures is not another way to feed the North Korean elite indirectly; it is an investment in the gradual disintegration of a dangerous and brutal regime.

North Korea has changed, and its changes should be boldly exploited. The communist countries of the 20th century were not conquered. Their collapse came from within, as their citizens finally realized the failures of the system that had been foisted on them. The simple steps outlined here will help many North Koreans arrive at the same conclusion. It may be the only realistic way to solve the North Korean problem, while also paving the way for the eventual transformation of the country into a free society. This fight will take time, but there is no reason to wait any longer.

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U.N. Officials Knew Earlier of N. Korea Fake Currency

Tuesday, April 3rd, 2007

New York Sun
Benny Avni
4/3/2007

As federal investigators examine how the leading U.N. agency in North Korea illegally kept 35 counterfeit American $100 bills in its possession for 12 years, documents indicate that more officials were aware of the existence of the fake currency — and earlier — than the agency has reported.

Spokesmen for the United Nations Development Program have said top officials at the agency’s New York headquarters learned in February that their safe in Pyongyang contained the counterfeit bills and immediately reported it to American authorities. But several documents shown recently to The New York Sun indicate that higher-ups knew much earlier that the safe held counterfeit money.

The documents are part of a worldwide reporting system that allows the agency to keep track of the contents of its office safes.

(more…)

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GS Caltex to supply fuel oil to N.Korea-co. source

Monday, April 2nd, 2007

Reuters
4/2/2007

South Korea’s second-largest refiner, GS Caltex, was picked as the supplier of fuel oil promised to North Korea in return for shutting down a plutonium-producing reactor by April 14, a company source said on Monday.

“Yes, we will supply fuel oil if North Korea shuts down the reactor,” the source said.

GS Caltex plans to skip fuel oil exports in April to divert 50,000 tonnes to state-run Korea Electric Power Corp. (KEPCO) , which has been tasked by Seoul to send the fuel to North Korea and is now building up the stocks, the source said.

But the source added that the supplies appeared uncertain at the moment as talks on North Korea’s nuclear programme ended abruptly last month, derailed by the issue of funds frozen in a Macau bank.

Pyongyang avoided discussing a February deal to shut its main nuclear reactor by mid-April, demanding that $25 million at Macau’s Banco Delta Asia first be transferred to a bank in Beijing.

The White House insisted Pyongyang must live up to the deal it struck for taking steps toward nuclear disarmament in exchange for energy aid and security pledges.       

U.S. Treasury officials and North Korean diplomats have since met last week to work out the transfer of funds frozen in the Macau bank and smooth the way for the resumption of disarmament talks.

Under the February accord, North Korea will get an additional 950,000 tonnes of fuel oil from the six-party participating countries after getting 50,000 tonnes from South Korea once it permanently disables the plutonium factory at Yongbyon and reveals all its nuclear-related materials and programmes.

The 950,000 tonnes will be divided among the countries involved in the six-party talks, but industry sources say South Korea is likely to supply the most, citing geographical reasons.

They said GS Caltex, a 50:50 joint venture between South Korea’s GS Holdings Corp. and U.S major Chevron Corp. , was likely to supply high-sulphur fuel oil to the North. But the company official declined to confirm this.

All five of South Korean refiners had exported less volumes in March in anticipation of winning the bid for the contract. They exported about 40 percent less fuel oil versus a year ago, Reuters estimates showed. 

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Atlantic Eye: Investing in North Korea

Monday, April 2nd, 2007

United Press International
Marc S. Ellenbogen
4/2/2007

The most effective way to influence the future of North Korea is through economic development and incentives. The 500 million euro North Korea Investment Fund exists to economically engage the Democratic People’s Republic of Korea. While the six-party talks continue — which they should and must — Global Panel and the Prague Society will continue to grow this fund.

At the 4th Session of the North Korea Initiative in Bratislava just weeks ago, there was a consensus that growing the NKIF is a good strategy for engaging the DPRK. The NKIF will be used for entrepreneurial ventures, to provide micro loans, for knowledge transfer, healthcare and for building, energy and infrastructural projects.

The biggest task facing Pyongyang is converting one of the worlds most centrally planned and isolated economies into something remotely resembling a free market. Industrial capital stock is nearly beyond repair as a result of years of underinvestment and shortages of spare parts. Industrial and power output has declined as well. The development of former East Germany cost 1.2 trillion euros. It is calculated that the redevelopment of the DPRK will cost 5 trillion euros. Pyongyang will only allow development if it can simultaneously protect its power position.

In the 1980s companies failed to predict the collapse of the centralized Soviet system. They were wholly unprepared and certainly had few dedicated funds in place (George Soros was an exception) when the changes in Central Europe came about. The NKIF seeks to remedy this mistake by having funds in place that can be used to aid a changing North Korea at the point change takes place. The NKIF targets investors who know a return of investment is years in the future but recognize the need for such a fund.

A prerequisite for the fund’s future success is confidence-building measures. General Dieter Stockmann, the former NATO deputy commander, made comparisons to China. As the head of the bilateral German-China security talks, he noted that “we need access to human resources.” He was quick to point out that the DPRK military will play an indispensable role in the DPRK’s economic future.

Paul Beijer, Sweden’s special representative on Korean peninsula issues, noted that the Australians have experience with micro-loan projects. Others observed that Sweden, Switzerland and the European Union have separately held conferences in Pyongyang focused on economic reform. There have been both government and private — through international foundations — conferences in the DPRK.

Poverty is out of control in the DPRK. The World Food Program and the Carter Center have calculated some 50 percent of the population lives below the poverty line. Even the nascent micro-markets have virtually collapsed. The gap between the wealthiest and poorest is staggering — amongst the most dramatic on earth.

Previously, there had been a period when small and middle-sized entrepreneurs had done fairly well in North Korea. Tapping into these existing entrepreneurs must be a key goal of the NKIF. The NKIF must provide educational training for this entrepreneurial class and help it grow. Training, also of those doing the training, will be a specific area to add value.

The selection process will be difficult, and nearly impossible without a physical presence in the DPRK. North Korea is a huge market for the development of a financial infrastructure and financial services. Companies interested in participating in the future can aid in these trainings and seminars, which would give them a chance to get their foot in the door.

One expert commented that the DPRK government is highly compartmentalized and that it is extremely difficult to get the different agencies to sit together. It was suggested that a conference in Pyongyang focusing on a narrow topic — modern accounting, microfinance — might be of value. Eduard Kukan, until recently the long-serving Slovak foreign minister, cautioned that Pyongyang remains very weary of outsiders and that even good intentions could very likely be seen as interference.

Any investment must be linked to certain performance benchmarks. It must be linked to practical steps and an action plan. A critical component must be systems in place to monitor outcomes. At the moment, this is virtually impossible with the DPRK. Many who criticize the concept of engagement believe monitoring to be the weakest link. They argue one cannot make sure investments are being used solely for intended civilian economic and industrial purposes.

It is difficult to engage a country that is essentially disinterested in being engaged or only interested in doing so under very strict conditions.

Even the government in Pyongyang cannot ignore basic facts. It recognizes the problems that exist but fears losing its power base. Any solution must convince the current elite that the future is good for it. This, on the other hand, is a very difficult sell to many who wish to punish the current DPRK government.

Regardless, before the NKIF is put to use, a monitoring process should be in place. And this allows time for the fund to grow and to find its niche.

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Samjiyon Information Technology Center (SITC)

Monday, April 2nd, 2007

Samjiyon Information Technology Center was established as a professional multimedia technology department under the control of KCC on October 24, 1990.

From that time down to this day, SITC has been conducting research & development activities about fields of multimedia communication, image processing, audio & video processing, embedded application, educational application, multimedia contents and authoring tools, and the many powerful and good products were developed.

Our products are being on sale on home and foreign markets, and well received by the customers.

SITC is making inroads actively into the foreign markets based on cooperative relations established with several companies of Japan and China in fields of marketing and joint research & development.

SITC is very proud of its employees, among them more than 80% are qualified with masters or doctoral degrees.

Distribution ratio of technical personnel by fields
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Strategy
  – Continuous improvement of the qualitative growth of technical forces
  – Strengthening of the cooperative relations between enterprises and educational & research institutions
  – Maximum intellectual property

Management Goal
  – 3 unique products and services
  – 10 unique core technologies
  – Certification acquisition from ISO9001 Pyongyang Certificate authority and CMM3 acquisition

As in the past, SITC will meet customers’ expectations by superior technology and improved service while amplifying cooperation and exchange with home and foreign partners. 

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N. Korea welcomes S. Korea-U.S. FTA for leaving room for Kaesong complex

Monday, April 2nd, 2007

Yonhap
4/2/2007

North Korea has welcomed the just-signed free trade agreement between the South and the United States on Monday, seeing its possible role of promoting an inter-Korean industrial complex in its territory, Pyongyang’s management body of the complex said.

In the trade pact, the two sides agreed to hold further negotiations on goods produced in the Kaesong industrial complex, which Seoul wants to be treated as made in South Korea.

Pyongyang sounded upbeat that the pact has left room for the inclusion of Kaesong goods in the trade deal.

“We welcome sincerely (the fact) that the South Korea-U.S. FTA agreement has prepared the foundation for the goods from the Kaesong industrial complex to be treated as made in South Korea,” the Kaesong Industrial District Management Committee, which oversees the joint project between South and North Korea.

The Kaesong complex, just a few kilometers north of the inter-Korean border, is one of two flagship projects the South operates in the spirit of reconciliation with the North following their historic summit in 2000. Over 11,000 North Korean workers are employed by dozens of South Korean companies producing garments, utensils and other labor-intensive goods. Another reconciliation project is the operation of tours to the North’s scenic Mount Geumgang.

South Korean companies operating in Kaesong say the inclusion of the goods in the FTA is crucial, as this will open the doors for their exports to the world’s largest market and will also provide a template for future trade deals with other countries.

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19 Dollars a Month Means Three Corn Meals a Day

Monday, April 2nd, 2007

Daily NK
Han Young Jin
4/2/2007

“100,000 won (approx. US$32.2) doesn’t cut it.” This is a sigh-ridden comment of a North Korean citizen, who states that even if he has 100,000 won, it is not much to spend.

The recent currency depreciation of the North Korean won has been exacerbating the North Korean citizens’ burdens of their costs of living.

Such a situation has been ongoing since the July 1st Economic Measure in 2002, but with the concentration of money in the privileged class, the grim realities of life of vulnerable persons have been becoming more difficult.

Hoiryeong citizen Park Hyun Sik (pseudonym), in a phone conversation with Daily NK on the 30th, stated that “a decent Chinese jumper costs 30,000 ~50,000 (approx. US$ 9.7~16) won for one, 3,000 won for 1kg of meat, and 2,700 won per a bottle of oil. After eagerly awaiting a month, I go to the market with 100,000 won (approx. US$ 32.2), but end up with nothing even though I did not buy much.”

Mr. Park, who conducts the wholesale business of relaying goods received from overseas Chinese emigrants to the provinces, receives a monthly income of 300,000 won. This puts him in a good class in North Korea. Mr. Park’s family, which consists of his wife and son, plans to secure food with this money.

Evidently, a family of four needs 50kg (50,000 won) of rice, which costs 1,000 won per kg, and 20 kg (7,000 won) of corn, which costs 350 won per kg, to survive. Additionally, the cost of buying a bottle of bean oil at 2,700 won as well as pepper powder, vinegar, garlic, onions and other vegetables is almost equal in value to the cost of buying rice.

On top of this, the family says they eat pork meat about once a month, which costs 3,000 won per kg. The rest of the money goes to the three family members’ clothing and cigarettes and drinks for Mr. Park, all of which cost about 300,000 won. Even then, Mr. Park tends to be on the well-fed side.

Working Citizens Cannot Eat Meat Even Once A Month

Kim Jung Ok (Alias), who sustains her living through a noodle business in the Hyeryung South Gate jang (market), has a monthly living expense of approximately 60,000 won. Ms. Kim is a housewife, who has taken on the responsibility of her three-member family.

Even if she sells noodles all day, she only makes 2,000~3,000 won. She merely earns around 60,000 won per month, all of which goes to food. Making a profit from her business is a mere dream, she expresses. She cannot even think about rice; after buying 70 kg of corn (23,000 won), bean oil, beans (950 won per kg) and other vegetables, she has nothing left.

The monthly income of her husband, who works at a machine shop in Hoiryeong, is 4,000 won. That is enough to buy 4kg of rice. Fearing starvation if she solely depended on her husband, she opened her noodle shop 10 years ago. “Even if we are both working like this, it is barely enough for corn meals. It is difficult to buy a kg of meat in a month. It has been a long time since I fed meat to my child,” she confessed.

Currently, with the exception of storekeepers who trade with Chinese emigrants, foreign currency traders, and those who have relatives in China, a majority of residents in Hoiryeong live daily as Mr. Park.

Recently, the Ministry of People’s Safety Agency issued the order that “Rations will be distributed in April. So, stop engaging in illegal trade.” Due to this decree, the control of the jangmadang (market) has been tightened. Discontent among residents who sell Chinese industrial products has climaxed, “How can we live if they feign ignorance while not providing the rations?”

The regulation of jangmadang (market) by ministry officials has only raised the price of Chinese industrial products. Before that, there would be joint bargains, but now, purchasers are visiting the merchants and so the costs of products are going up.

On one hand, the influence of the dollar’s recent bearish turn in the international market is fully reflected in the North Korean black market. The exchange rate of 800 won to a dollar between the Chinese Yuan and the dollar remains unchanging, but the North Korean currency following suit to the dollar and the Yuan changes day to day. Ultimately, North Korea is not “a region with a fixed exchange rate” due to the fact that exchange merchants occasionally apply the exchange information received from China.

Due to the dollar’s slump, the ratio of the North Korean won to the dollar and to the Yuan has been on the decline for several months. Mr. Park said, “In January, the North Korean currency went up to 42,000 won per 100 won RMB, but has drastically gone down to 36,500 won per 100 won.”

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Why North Koreans Wear Old Shoes in Wedding Ceremony

Monday, April 2nd, 2007

Daily NK
Kang Jae Hyok
4/2/2007

As spring is ripe, so are engaged couples. Not only in South Korea but also in the North, spring is a season of marriage. Yet ceremonies differ.

In North Korea, wedding ceremonies takes place in both houses of the bride and the bridegroom. Occasionally, rich couples rent a ceremony hall, common practice in Seoul.

In South Korea, all the guests come to wish the newly-weds a bright future. Undoubtedly, formally dressed. However, most North Koreans visit wedding ceremonies wearing regular dress.

The biggest difference is shoes. In both Koreas, it is customary to take off shoes before entering house and since wedding ceremonies in North Korea occur inside someone’s house, it is possible to lose ones shoes. Especially if well-wishers get drunk after the party or simply that too many visitors come to celebrate in a crowded house, shoes are often lost or as they say ‘confused’ in the case the shoes are of good quality.

So North Koreans do not wear nice shoes when visiting a wedding ceremony. Even slippers are worn.

This habit has trailed down to South Korea, for those who defected and came to Seoul. At Hanawon, an education facility for new-defectors into South Korea, instructors teach defectors to wear smart dress attire and formal shoes while attending wedding ceremonies.

An instructor who taught me at Hanawon told his personal story. When he was invited to a defector’s wedding ceremony, he saw several visitors wearing slippers, all of them were fellow defectors. When asked why, they answered that it was their habit from North Korea.

Such minor mistakes might cause others who do not understand North Korean customary habits unpleasant or even nervous. Thus, the instructor asked us, the defectors, to always dress formally at special ceremonies.

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9.2 Tons of Gold Replaces North Korea’s BDA for 3 Years

Sunday, April 1st, 2007

Daily NK
Han Young Jin
4/1/2007

Singaporean newspaper “Singapore Lianhe Zaobao” reported, “Though the recent BDA issue ended in shambles, Macao and BDA did face some trials” and “With the U.S. able to strangle any county with international financial sanctions, the BDA issue rang alarm bells for illegal acts occurring throughout the world.”

The Zaobao’s online site reported on the 24th, “7~8 small scale family run banks in Macau banks are faced with the threat of closing down as BDA concluded that these banks were acting as North Korea’s ‘laundering black money.’ Macau has been caught in this political issue after being targeted as a place dealing North Korea’s money laundering.” The newspaper also analyzed that the international community had questioned China’s morals.

“All these things have occurred because BDA agreed to supplement North Korea’s gold into dollars” the Zaobao added.

It continued, “During the last 3 years, BDA has exchanged 9.2tons of North Korean gold into $120 million” and “Even last year, North Korea exported gold and silver to Thailand and exchanged $38 million.”

The site reported, “The U.S. is empowering the international financial market and as a result, no financial marketer can oppose the willpower of U.S.” and consequently financial transactions between North Korea and London have ceased. In the past, North Korea had been placing at least 1ton of gold on London markets.

The amount of trade that occurs weekly in London’s gold market equals $2000~3000 million, which in turn equates to 43% of the world’s gold trade. The newspaper pointed out that North Korea’s detachment from London’s markets means that North Korea has now been excluded from the world’s mainstream market.

In the end, even China endured finite investigations as a result of BDA and North Korea’s funds and is now acting in a cautious manner added the report.

In all, the report analyzed that North Korea’s annual production of gold to reach 6 tons.

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