Archive for June, 2007

1.5 Million Tourists Visit Mt. Geumgang

Thursday, June 7th, 2007

Korea Times
Ryu Jin
6/7/2007

More than 1.5 million tourists have so far visited Mt. Geumgang in North Korea since the tour was launched about a decade ago, Hyundai Asan said Thursday.

Since the launch in November 1998, the accumulated number of tourists to Mt. Geumgang reached 500,000 in November 2002, 1 million in June 2005 and then 1.5 million in June this year, according to the South Korean operator of the inter-Korean tourism project.

Company officials hailed the latest achievement, which came just after the start of a new tour program to inner Mt. Geumgang, better known as “Naegeumgang’’ in Korean, early this month.

“We will hold a weekend concert this Saturday at the multi-purpose cultural center in the resort complex of Onjeong-ri,’’ a Hyndai Asan spokesman said. “Famous pop singers and bands, including Nam Jin, and rock band No Brain will be there.’’

As part of efforts to promote the Mt. Geumgang tour program, Hyundai Asan has held various cultural events in recent months including concerts and previews of films.

Mt. Geumgang, which has long held both aesthetic and spiritual allure for Koreans, can be divided into three parts: Naegeumgang (inner, western part), Oegeumgang (outer, eastern part) and Haegeumgang (seashore part).

Since the first tour to Oegeumgang in 1998, an increasing number of visitors have made the trip to the resort area. Most were South Koreans; fewer than 8,000 visitors came from 48 other countries.

But the inter-Korean tourism business has often been affected by the security situation on the Korean Peninsula. For example, it ran into difficulties when North Korea conducted a nuclear test in October last year.

Amid the heightened tension, the number of tourists plummeted to some 240,000 last year, putting a damper on Hyundai Asan’s target of securing more than 400,000 visitors annually.

On June 1, the company started a new tour program, which allows visitors to taste the elegance of the inner part of the 12,000-peak auspicious mountain. Hyundai Asan CEO Yoon Man-joon expressed his ambition during a pilot tour late last month where some 150 dignitaries and media took part.

“We set the target at 400,000 again this year. About 15 to 20 percent of the tourists are expected to visit Naegeumgang this year,’’ Yoon said. “I hope the launch of the Naegeumgang tour will give us an opportunity for a second leap toward successful Mt. Geumgang tour business.’’

Hyundai Asan officials said about 100,000 people have made the trip to the mountain by the end of May. They expect that the figure could reach the target as the high-demand season — from June to October — is approaching.

Each group for the two-night, three-day Naegeumgang tour will be made up of up to 150 visitors and the departure days are every Monday, Wednesday and Friday.

On the first day, the visitors would check in at the hotel and enjoy the North Korean acrobatics show and dine on unique North Korean food for supper. On the second day, they would explore the beauty of Naegeumgang, followed by a brief trip to Oegeumgang on the last day.

Yoon said the company would also try to revamp tour programs to draw more younger visitors as part of its new marketing strategy for the existing tour to the outer side of the mountain, Oegeumgang.

“We will continue to host various cultural events, including concerts and cinema previews, to meet expectations of customers in various age groups,’’ said a company spokesman. “These efforts will also help the company advance to two million visitors.’’

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North Korea needs a dose of soft power

Wednesday, June 6th, 2007

Asia Times
Andrei Lankov
6/5/2007

It is clear that the current Western approach to dealing with North Korea is not working. Some people in Washington obviously still believe that financial or other sanctions will push the North Korean regime to the corner and press Pyongyang into relinquishing its nuclear program. But this is very unlikely.

First, neither China nor Russia is willing to participate in the sanctions regime wholeheartedly. Neither country is happy about a nuclear North Korea, but they see its collapse as an even greater evil. However, without their participation, no sanctions regime can succeed. More important, South Korea, still technically an ally of the United States, is even less willing to drive Pyongyang to the corner. And finally, even if sanctions have some effect, the only palpable results will be more dead farmers. The regime survived far greater challenges a decade ago when it had no backers whatsoever.

So what can be done? In the short run, not much. Like it or not, Pyongyang will remain nuclear. There might be some compromises, such as freezing existing nuclear facilities, but in general there is no way to press North Korean leaders into abandoning their nuclear weapons.

This is not good news, since it means that the threat will remain. Earlier experience has clearly demonstrated that every time North Korean leaders run into trouble, they use blackmail tactics, and they usually work. In all probability, there will be more provocations in the future. Since Pyongyang’s leaders believe (perhaps with good reason) that Chinese-style economic reforms might bring about the collapse of their regime, they have not the slightest inclination to start reforming themselves.

This leaves them with few options other a policy aimed at extracting aid from the outside world, and regular blackmail is one of the usual tools of this approach. Thus the threat persists unless the regime or, at least, its nature is changed, but how can this goal be achieved if pressure from outside is so patently inefficient? The answer is pressure from within, by nurturing pro-democracy and pro-reform forces within North Korean society (and also pro-reform thoughts within the brains of individuals).

Of all assorted “rogue regimes”, North Korea is probably most vulnerable to this soft approach. On one hand, unlike the bosses of the assorted fundamentalist regimes, North Korea’s leaders have never claimed that their followers will be rewarded in the afterlife; they do not talk, for example, about the pleasures of otherworldly sex with 72 virgins.

Their claim to legitimacy is based on their alleged ability to deliver better lives to Koreans here and now, and Pyongyang’s rulers have failed in this regard in the most spectacular way. The existence of another Korea makes the use of nationalistic slogans somewhat problematic as well.

North Korea’s leaders cannot really say, “We have to be poor to protect our independence from those encroaching foreigners,” since the existence of the dirty-rich South vividly demonstrates that under a reasonably rational government, Koreans can be both rich and independent (and also free).

This leaves Pyongyang with no choice but to seal the borders as tight as no other communist regime has ever done before, on assumption that the common folk should not know that they live a complete lie. This self-imposed information isolation is the major condition for the regime’s survival, and breaking such a wall of ignorance should be seen as the major target for any long-term efforts directed at bringing change to North Korea.

The power of soft measures is often underestimated, not least because such policies are cheap, slow and not as spectacular as commando raids or even economic embargoes. However, their efficiency is remarkable.

In this regard, it makes sense to remember a story from the relatively recent past. In 1958, an academic-exchange agreement was signed between the Soviet Union and the United States. Back then the diehard enemies of the Soviet system were not exactly happy about this step, which, they insisted, was yet another sign of shameful appeasement.

They said this agreement would merely provide the Soviets with another opportunity to send spies to steal US secrets. Alternatively, the skeptics insisted, the Soviets would send diehard ideologues who would use their US experience as a tool in the propaganda war. And, the critics continued, this would be done on American taxpayers’ money.

The first group of exchange students was small and included, as skeptics feared, exactly the people they did not want to welcome on to US soil. There were merely four Soviet students who were selected by Moscow to enter Columbia University for one year of studies in 1958. One of them, as we know now, was a promising KGB operative whose job was indeed to spy on the Americans. He was good at his job and later made a brilliant career in Soviet foreign intelligence.

His fellow student was a young but promising veteran of the then-still-recent World War II. After studies in the US, he moved to the Communist Party central bureaucracy, where in a decade he became the first deputy head of the propaganda department – in essence, a second in command among Soviet professional ideologues.

Well, skeptics seemed to have been proved right – until the 1980s, that is. The KGB operative’s name was Oleg Kalugin, and he was to become the first KGB officer openly to challenge the organization from within. His fellow student, Alexandr Yakovlev, a Communist Party Central Committee secretary, became the closest associate of Mikhail Gorbachev and made a remarkable contribution to the collapse of the communist regime in Moscow (some people even insist that it was Yakovlev rather than Gorbachev himself who could be described as the real architect of perestroika.)

Eventually, both men said it was their experiences in the United States that changed the way they saw the world, even if they were prudent enough to keep their mouths shut and say what they were expected to say. So two of the four carefully selected Soviet students of 1958 eventually became the top leaders of perestroika.

There is no reason to believe that measures that worked in the Soviet case would be less effective in North Korea. Academic exchanges are especially important, since the policy toward North Korea should pursue two different but interconnected purposes. The first is to promote transformation of the regime or perhaps even to bring down one of the world’s most murderous dictatorships. However, it is also time to start thinking about what will happen next, after Kim Jong-il and his cohorts vanish from the scene.

The post-Kim reconstruction of North Korean will be painful, expensive and probably lengthy. Right now North Korea is some 20 times a poor as the South, and the gap in education between two countries is yawning. With the exception of a handful of military engineers, a typical North Korean technician has never used a computer.

North Korean economists learn a grossly simplified version of 1950s Soviet official economics, and North Korean doctors have never heard about even the most common drugs used elsewhere. This means that in the case of a regime collapse, the North Koreans would be merely cheap labor for the South Korean conglomerates – a situation bound to produce tensions and hostility between the two societies. A North Korean who in 20 years’ time will look for a decent job should be made employable, and the best way to ensure this is to start thinking about his or her education right now.

Academic exchanges with North Korea would have dual or even triple purposes. First, they would bring explosive information into the country, hastening domestic changes (probably, but not necessary, changes of a revolutionary nature). Second, they would assist North Korean economic development, thus beginning to bridge the gap between the two Koreas even while the North was still under Kim Jong-il’s regime. Third, they would contribute to more efficient and less painful reconstruction of post-Kim North Korea.

Of course, all these scholarship programs should be paid for by the recipient countries. North Koreans have no money for such exchanges (and to paraphrase a remark by North Korea expert Aidan Foster-Carter, North Korean leaders are people who never do anything as vulgar as paying). But all three targets are clearly in the interest of the world community, and anyway the monies involved would be quite small.

North Korea’s leaders are no fools. They understand that such exchanges are dangerous, and they do not want future Korean Yakovlevs and Kalugins to emerge. Back in 1959-60 they even decided to recall their students from the Soviet Union and other countries of the Communist Bloc and did not send their young people to study anywhere but in Mao Zedong’s China until the late 1970s. In other words, for two decades Pyongyang’s leaders believed that those countries were way too liberal as an environment for their students.

However, they also understand that without exchanges they cannot survive in the longer run. Even now, Pyongyang is doing its best to increase exchanges with China, sending numerous students there.

Another important factor is endemic corruption. There is no doubt that nearly all students who will go overseas will be scions of the Pyongyang aristocrats, the hereditary elite that has been ruling the country for decades. A high-level official might understand that sending a young North Korean overseas is potentially dangerous. But if the person in question is likely to be his nephew, he will probably choose to forget about the ideological threats.

Of course, no sane North Korean leader would ever agree to send students to the US or to South Korea. However, there are many countries that are far more acceptable for them. The Australian National University a few years ago had a course for North Korean postgraduate students who studied modern economics and financial management. Australia or Canada or New Zealand might be good places for such programs.

While English-language education is preferable, since English is the language of international communication in East Asia, there is a place for European countries as well, especially smaller ones, whose names do not sound too offensive to the Pyongyang bureaucrats – such as Switzerland or Hungary or Austria.

Such programs should be sponsored by those countries whose stakes are the highest, such as the US, Japan and South Korea, but smaller and more distant countries also should consider sponsoring such an undertaking. This is not a waste of money, nor even a good-looking humanitarian gesture for its own sake. As history has shown many times, former students tend to be sympathetic to the country where they once studied, and they normally keep some connections there.

North Korea has great potential, and when things start moving, those graduates are likely to be catapulted to high places, since people with modern education are so few in North Korea. This means countries that consider small investments in scholarships for North Koreans will eventually get large benefits through important connections and sympathies that their business people, engineers and scholars will find in some important offices of post-Kim North Korea.

Scholarships for North Korean students are not the only form of academic exchanges. North Korean scientists and scholars should be invited to Western universities, and books and digital materials should be donated to major North Korean libraries in large numbers. Of course, only selected people with special clearances are allowed to read non-technical Western publications in North Korea, but they are exactly the people who will matter when things start moving.

It is well known that students and academics who come back from longtime overseas trips are routinely submitted to rigorous ideological retraining upon their return to North Korea. But does it help? Unlikely. If anything, heavy doses of obviously nonsensical propaganda make a great contrast with what they have learned and seen, thus putting North Korean society in an even less favorable light.

Of course, they will not say anything improper when they come back home, but they will see that there are other ways of life, they will see how impoverished, bleak and hyper-controlled their lives are, and they will think how to change this. Sooner or later, these people will become a catalyst for transformation – and their skills will help to ease the pains of the post-Kim revival of North Korea.

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Statement of UNDP on DPRK activity audit

Wednesday, June 6th, 2007

UNDP welcomes the preliminary report (DPRK-prelimauditreport-20070601.pdf) of UN Board of Auditors (UNBOA) on the operations of UNDP and other UN agencies in DPRK.  UNDP has cooperated fully with the audit process and will continue to do so. 

UNDP operated in DPRK at the express wish of its Executive Board.  Member states encouraged UNDP to assist the country to engage progressively with the norms and standards of the global community. 

The operating environment was very difficult.  In recent years UNDP tightened control mechanisms and conducted frequent audits (1999, 2001 and 2004).  These audits did not lead to any suggestion that UNDP funding was being diverted to purposes other than those for which it was intended. 

UNDP is encouraged that the UNBOA preliminary report confirms:

– That UNDP operated a relatively modest programme in DPRK ($2-3 million per year – far less than “$100s of millions” alleged in press reports)
– That UNDP international staff could – and did – regularly visit project sites to verify how UNDP funding was being used

The preliminary report also highlights specific aspects of the difficult operating environment in DPRK, including staffing and foreign currency arrangements not in line with worldwide practice.  UNDP notes that:

– The Executive Board knew of UNDP’s staffing practices in DPRK, which date back 27 years
– Similar staffing and foreign currency practices were followed by all UN agencies, international NGOs and foreign diplomatic missions in DPRK, including past and current members of UNDP’s Executive Board
– UNDP was not able to follow worldwide practice, but no UNDP regulations or rules were broken
– Following requests by some Board members, UNDP notified DPRK that it was changing its staffing and currency practices.  The proposed changes were formally endorsed by the Executive Board in January 2007
– UNDP suspended operations in the country on 2 March 2007 when DPRK failed to meet the operational changes endorsed and mandated by the Board.
– UNDP took the lead in asking the DPRK government to conform to international practice before the Board’s decision  

The report highlights areas in which UNDP rules or procedures could be strengthened.  UNDP is committed to addressing these areas.

UNDP will be transmitting a formal management response to the ACABQ shortly.  UNDP would welcome a continuation of the audit process, including a visit by the UNBOA to DPRK.  UNDP looks forward to the final audit report.

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Despite Nuclear Tests North Korea-China Trade Continues to Rise

Tuesday, June 5th, 2007

Daily NK
Kim Yong Hun
6/5/2007

table 5.jpg

Despite the nuclear test last October, trade between North Korea and China has increased steadily. Rather, signs of North Korea’s economic dependence on China is becoming more obvious.

According to statistics recently released by the Ministry of Unification, “2007 1st Quarter, North Korea’s trade status with China,” trade between the two countries recorded $330mn, a 13.8% increase compared to 2006. While North Korea exported $130mn worth of commodities, an increase of 45% compared to the previous year, imports equaled a total of $200mn, a small decrease of 2.4%.

Last year, trade between both North Korea and China totaled $1,699.6mn recording the highest amount of trade ever in history and even this figure had risen 7.5% compared to the year before.

Analysts argue that North Korea’s economic dependence on China is increasing as a result of sanctions implemented by the international community and delay of the February 13 Agreement.

Even until last year, the trade deficit had increased to $764.17mn, an increase of 29.9% compared to 2005. However, in the first quarter of 2007, the trade deficit seems to have taken a major plummet of 61.3% down to $74mn.

North Korea’s main trade commodities are fuel based including coal and minerals, accounting for $45mn (49% increase to 2006) of exports to China, and 34.7% of total exports. In detail, $33mn of minerals, $12mn of medicine, $7.7mn of steel and $6.2mn of fisheries are exported also.

On the other hand, goods imported into North Korea are again fuel based including petroleum and crude oil and account for $31mn (42.5% decrease to 2006) of imports. Further, machinery equates to $17mn of imports, electric appliances $16mn and filaments $11mn.

In the report, the Ministry of Unification indicated North Korea’s major export to China as coal and minerals and analyzed, “This is the result of China’s increased demands for economic growth.”

The Ministry reported, “The majority of imported goods are energy, electric appliances and machinery” and added, “Demand for these light industry goods have increased from an expansion in North Korea’s consumer market. Imports have risen as a result of materials necessary for industrialization.”

According to a report recently released by the U.S. Congressional Research Service (CRS) “North Korea’s Economy,” the amount of trade that occurred between the U.S. and North Korea barely reached $3,000 in 2006, the lowest figure ever recorded since 1990. The only items exported to North Korea were books and newspapers and no imports were received by the U.S, revealed the CRS.

Furthermore, 2006 recorded an all time low of $130mn trade between Japan and North Korea, undoubtedly a reflection of Japan’s strong implementation of economic sanctions on North Korea. Since 1995, Japan has been supporting North Korea with a total of 1.2mn tons of food aid but suspended the aid relief in late 2004 following the issue of Japanese abductees.

Russia’s exports of minerals and coal to North Korea surged dramatically in 2003 and in 2006, total trade with North Korea recorded $220mn. Hence, Russia became now one of the big three trading partners of North Korea with China, South Korea, the CRS reported.

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N. Korea’s food situation not as bad as expected: agricultural scholar

Tuesday, June 5th, 2007

Yonhap
7/6/2005

North Korea’s food situation is stabilizing and is not as bad as expected in rural areas, a South Korean agricultural scholar who just returned from Pyongyang said Tuesday.

In an interview with Yonhap News Agency, Kwon Tae-jin, senior scholar of the state-run Korea Rural Economic Institute, said, “The peak of food shortage usually comes in June, but I didn’t feel it probably because North Korea released food rations.”

Kwon visited Pyongyang, Chongju in North Pyongan Province, Hamhung in South Hamgyong Province and Paechon in South Hwanghae Province, along with officials of World Vision, an international relief agency, May 25-31.

In March, North Korean officials indicated that North Korea faced a shortfall of 1 million metric tons of food and asked the World Food Program (WFP) to expand its assistance.

Jean-Pierre DeMargerie, head of the WFP’s office in North Korea, said that the situation is not as bad as it was in the 1990s when about one million North Koreans are estimated to have died of hunger, but the food situation has again “started to deteriorate because of June and August flooding of critical cropland and major reductions in WFP and bilateral food assistance.”

Kwon said North Korea would have little difficulty planting rice seedlings this year as reservoirs are full of water in most plains, and tractors and rice-planting machines can work at full capacity.

“In some areas the food situation might be worsening, but agricultural production has stabilized. They seem to be focusing on diversifying their sources of income by planting some cash crops,” he said.

A weak harvest in 2006, disastrous summer flooding and a 75 percent fall in donor assistance dealt severe blows to the impoverished nation, according to WFP officials.

South Korea resumed shipments of fertilizer and emergency aid to the North, but it plans to withhold rice aid as an inducement for North Korea to fulfill its promise to shut down its main nuclear reactor as part of the landmark February 13 agreement.

South Korea suspended its food and fertilizer aid to North Korea after the North conducted missile tests in July. Resumption of the aid was blocked due to the North’s nuclear bomb test in October.

According to a recent think tank report, North Korea could run short of up to one third of the food it needs this year if South Korea and other countries withhold aid.

Data from the WFP and South Korea’s Unification Ministry show that the North will need between 5.24 million tons and 6.47 million tons of food this year. Depending on the weather, the availability of fertilizer and other factors, the communist state may only be able to produce 4.3 million tons of food by itself, the report said.

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DPRK Media plays up environmental bona fides

Tuesday, June 5th, 2007

World Environment Day Observed
KCNA

6/5/2007

Papers here Tuesday dedicate articles to the World Environment Day.

Rodong Sinmun says in a signed article that diverse activities and functions are now under way in the DPRK according to the theme for this year designated by the United Nations Environment Programme.

It goes on:

The DPRK has long paid great attention to the environmental protection helpful to promoting the people’s health, increasing the scenic beauty of cities and providing better living conditions and environment. Thanks to the correct environmental protection policy of the DPRK government, the DPRK is recognized by the world community as a country with good environment.

The issue of environmental protection is now presenting itself as a very important and urgent one worldwide. Ecological environment is being seriously contaminated in various parts of the world for various reasons.

No country can be an exception in the work to protect the environment on the earth. Good results can be expected in this work only when all countries make positive efforts, aware of the urgency and importance of the work.

The DPRK will conduct positive work for environmental protection, maintaining close touch with international organizations in the future, too.

Minju Joson in a signed article notes that global warming is the most serious worldwide problem at present, adding that the melting of ice in the polar areas is the most vivid example of it. In order to cope with the situation the DPRK is taking steps to increase and firmly protect fresh water resources, stop soil from being washed away and prevent damage by strong winds and floods.
DPRK Strives to Prevent Global Warming
KCNA

6/5/2007

The abnormal climate phenomena caused by global warming has been raised today as a hard problem in the world.

The UN Environment Programme set “Global Warming” as the theme for this year on the occasion of the World Environment Day (June 5), since it threatens the life and security of humankind.

Organized on the occasion of the day in the country were colorful events including a scientific symposium and a national seminar on reducing the emission of atmospheric green-house gases and preventing global warming, and film shows for arousing profound social interest in the issue.

Jong Hyong Il, a department director in the Ministry of Land and Environment Preservation, told KCNA that the DPRK which has been suffering from the upward temperature in recent years is conducting varied activities in accordance with the world trend for preventing such phenomena. He went on:

It deepens the scientific researches into elevation of energy efficiency and utilization of regenerated energy and directs efforts to the work for applying the results.

The construction of large and minor hydro-power stations is being pushed ahead through an all-people movement and application of wind power positively encouraged.

An effort to improve the efficiency of solar batteries is being made, too.

Meanwhile, a brisk tree-planting campaign is being launched to increase the adsorption of carbon.

The DPRK, a signatory to the Kyoto Protocol and the Montreal Protocol on Substances Destroying Ozone Layer, is doing its best to restrict and reduce the emission of atmospheric green-house gases as much as possible.

World Environment Day Marked
KCNA

6/5/2007

An event took place at Changdok School on June 5 to observe World Environment Day.

Present there were officials in the field of environmental protection and teachers, employees and students of the school.

Also present on invitation were the associate director of the “Environmental Education Media Project” whose office is located in China and environment experts of different countries.

The guests laid bouquets before the statue of President Kim Il Sung at the school and paid a tribute to him.

After going round the historic building where the President studied, they were briefed on the history of the school.

The function heard speeches on the importance of the environment protection.

The participants watched a recorded material on global warming and pictures on the theme of it before appreciating a performance given by an art group of the school.

The guests appreciated the schoolchildren’s activities of the care-for-the-homeland team.

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How To Beat an Audit

Monday, June 4th, 2007

Wall Street Journal
6/4/2007

North Korea will not extend “cooperation” to any U.N. review.

The case of U.N. hard currency for Kim Jong Il took its latest turn Friday with the release of the much-awaited audit on United Nations operations in North Korea. The investigation confirms and elaborates on irregularities in United Nations Development Program’s activities in North Korea, first reported on these pages in January. It fails, however, to examine the central question of this scandal: Whether U.S. cash in North Korea was diverted from its intended recipients and instead used to prop up Kim’s totalitarian regime?

Let us stipulate that any investigation having to do with North Korea is bound to have its share of, shall we say, frustrations. Just ask the U.S. State Department, which, nearly two months after the first nuclear-disarmament deadline, still can’t get Pyongyang to live up to the initial round of its commitments no matter how many times it sweetens the deal.

The first thing to know about the U.N. probe is that it was an internal affair–conducted by the organization’s own Board of Auditors, a monitoring group that in U.N. doublespeak is said to conduct “external” inquiries. The second salient point is that it was conducted entirely in New York City. The longest journey the auditors undertook was to cross First Avenue from the U.N. Secretariat to the offices of the UNDP. To their credit, they tried to go to North Korea but were rebuffed.

In refusing to let the auditors into North Korea, Kim Jong Il displayed his disrespect for Secretary-General Ban Ki Moon. The Board of Auditors had asked Mr. Ban’s office to intercede on its behalf with help on travel arrangements. “In an email dated 11 April 2007,” the audit report reads, “the Board was informed that on 20 March 2007, the Deputy Permanent Representative of DPRK [North Korea] advised [Mr. Ban’s chief of staff] that his government was not going to extend any cooperation to UNDP’s audit.”

Even given the limited scope of their investigations, however, the auditors were able to confirm the massive irregularities in the UNDP’s operations in North Korea. The auditors also found violations at three other agencies–Unicef, the U.N. Population Fund and the U.N. Office for Project Services. The infractions covered three areas:

Staffing: In violation of U.N. rules, local staffers were hand-picked by the North Korean government and allowed to work in “general service” jobs that, for example, allowed them access to the UNDP checkbook and other sensitive documents. Salaries were paid in euros directly to the government, and the auditors could not confirm whether the staffers actually received their pay.

Foreign-currency transactions: Also in violation of regulations, U.N. agencies in North Korea made large-scale disbursements in foreign currency, including payments for salaries, allowances and rent. The auditors could not verify controls over the disbursements. UNDP, Unicef and the U.N. Population Fund spent a total of $72.5 million on programs between 2002 and 2006, though the auditors caution that “the information supplied was not verified and no source documents were examined.”

Program oversight: Visits to U.N. projects, while permitted, were controlled by the North Korean government. Authorization took a week, and government officials accompanied the U.N. inspectors. Most revealing of all, it’s unclear whether the inspectors were international officials or the North Korean government officials on loan to the U.N. organizations whose first loyalty, it’s safe to say, would have been to Pyongyang.

UNDP says it provided evidence to the auditors of 38 field visits during 2002-2006. According to the auditors’ report, UNDP had a total of 172 projects over that five-year period. Do the arithmetic and it seems that only one in five UNDP projects was visited annually. Some “oversight”–especially if the inspectors were government factotums.

The auditors say that this is a “preliminary review.” That’s an understatement. Most glaringly, they failed to investigate the broader role UNDP is said to have had as a kind of money manager for other U.N. programs and, possibly, for countries sending aid to the North. UNDP is trumpeting the auditors’ finding that it spent only an average of $2.6 million a year during 2002-2006. But if it was making disbursements on behalf of other entities, the actual sums under its control–which presumably were subject to the same shoddy financial controls criticized by the auditors–could be far higher.

The UNDP suspended operations in North Korea in March when Pyongyang refused to abide by conditions laid down by the UNDP executive board after the irregularities came to light (but years after the UNDP itself knew but ignored them). To the extent that it sheds light on the corruption, the just-released audit is a useful exercise. But there’s a long way to go before we get to the bottom of the Cash for Kim scandal.

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Lessons on North Korean “Kremlinology”

Monday, June 4th, 2007

Secretive Kingdom
MSNBC
Christian Caryl
6/4/2007

If you’re confused by the reports coming out of North Korea, you’re probably not alone. Take the recent slew of conflicting reports about the health of the nation’s Dear Leader. U.S. Calls Kim Jong Il’s Health a ‘Concern,’ ran one headline. The body of the story, quoting a senior U.S. official who was himself referring to reports from other unnamed officials in Seoul, alluded to a “monthlong disappearance” by Kim and noted that the North Korean dictator suffers “from advanced diabetes and heart disease as well as high blood pressure.” Around the same time, another analysis claimed that Kim had recovered from these “chronic diseases.” The report, which based its account on the usual anonymous senior officials in Seoul and obscure North Korea wonks, also asserted confidently, that “intelligence” in the hands of the South Korean government indicates that Kim will choose his youngest son, Kim Jong Un, as his successor.

So what are we to think? Does that mean that everything we read about North Korea is garbage pretending to be authoritative truth? This sort of conundrum is par for the course for anyone who has spent time studying the goings-on at the top of the Democratic People’s Republic of Korea, as the North prefers to call itself. The ironic fact of the matter is that we know far more about North Korea than ever before. China and South Korea have both deepened their ties with the Hermit Kingdom in recent years, and that means that much more information is flowing out as well as in. A steady stream of defectors has provided us with often-elaborate detail about the country in general. And there’s even a small—exceedingly small—population of foreigners who deal with the North on a regular basis. All of this helps us to build up our picture of what’s going on in the country.

Yet when it comes to the most important part of the story—the motives and intentions of North Korea’s government—it’s always best to be skeptical. Andrei Lankov, a Seoul-based Russian academic who has studied the North for decades, says that he refuses to comment when asked by journalists about government reshuffles or coup rumors in Pyongyang. Such reports occasionally do end up getting confirmed by events, he concedes, but estimates that they are successful less than 20 percent of the time. (In other words, you’d usually be much better off judging the account’s veracity by flipping a coin.) Lankov notes that the Kim regime won’t even publish the precise number of members in the ruling communist party, much less basic stats on the economy. He describes it as by far the world’s most secretive state—far more so than even the old U.S.S.R., where it was common for intellectuals to discuss political topics when they knew they were in like-minded company. In North Korea, by contrast, “People are terrified to death to discuss anything political.” And that, he says, is because everything political ultimately comes down to the Kim family, which holds the power of instant life or death over every North Korean—and isn’t afraid to use it, as countless tales of the regime’s brutality attest. For that reason, Lankov argues, “The most explosive topic, the one that is never discussed, is the topic of succession.”

The result is a level of mystery that seems almost calculated to drive journalists into a frenzy. Confronted with such opacity, it’s hard to resist the temptation to show off even the slightest scrap of seemingly revelatory information garnered from some super-secret privileged source. In November 2004, the Russian news agency Tass reported that official portraits of Kim Jong Il were being taken down in North Korean diplomatic representations and official buildings. Could it be that Kim was on the way out? Respected news outlets jumped on the story, in some cases adding details culled from Chinese or Korean newspapers suggesting that the Dear Leader’s days were numbered. It hardly needs adding that he— and his portraits—remain firmly in place today.

Applying a bit more common sense might not be a bad thing. But the fact is that that’s far easier said than done. In April 2004, for example, a tremendous explosion took place in the train station in the North Korean city of Ryongchon, killing hundreds of people and rendering thousands more homeless. It happened just hours after Kim’s personal train had passed through the same station, spawning fervid speculation about a possible assassination attempt. According to one version the blast was triggered by a mobile phone—a detail that gained credibility a few months later, when the North Korean authorities pulled the plug on the country’s 18-month-old cell phone program. Service has never been restored.

Sounds convincing. Yet consider for a moment the important questions left unanswered by this version of events. If the explosion was being triggered remotely, why did the presumed conspirators wait for hours after Kim’s passage to send the signal? And why did they decide to kill hundreds of innocents in the process? In retrospect, virtually everything about this incident is still up for grabs. The fact that the North Korean government released casualty figures was actually hailed by some commentators as evidence of North Korea-style glasnost. Suffice it to say that we are still waiting for CNN to open its first Pyongyang bureau. (Skeptics note that the city’s proximity to the Chinese border meant that news of the explosion was bound to get out anyway.) In the wake of the disaster one British journalist confidently asserted that North Korea was becoming “more open to international help”—not that that stopped Pyongyang from announcing that it was about to start expelling international aid organizations a year later. And so it goes.

Western intelligence agencies also have a strikingly poor record when it comes to the country. No one in Washington or London predicted the North’s invasion of the South in 1950. The Clinton administration signed an agreement that would have supposedly rid the North of its plutonium-based nuclear-weapons program back in 1994—and then delayed fulfilling its own part of the deal because the CIA was assuring it of the North’s imminent collapse. (The experts are still sparring over whether the resulting failure of the Agreed Framework led inexorably to the North’s first nuclear test last autumn.) In 2002 the Bush administration announced that North Korea had suddenly admitted, in negotiations, its pursuit of a hitherto secret parallel nuclear weapons program based on highly enriched uranium—leading Washington to break off talks in indignation. In recent months, though, administration officials—their reputation already severely tarnished by the Iraq WMD intelligence scandal—have been forced to acknowledge that they can’t tell for sure whether the North Koreans still have such a program under way.

Grounds for despair? No, just for a measure of humility. Journalists—and governments—need to do a better job of admitting to the public that any information about North Korea’s leadership is to be regarded with profound skepticism. To be sure, a few privileged insiders—former Kim employees, a kidnapped film director—have come forth to tell their stories. That’s how we know, for example, details of the Dear Leader’s luxury-loving ways. Yet there have been almost no defectors from the upper ranks of the leadership who have been willing to reveal significant details about what makes the regime tick—presumably for fear of retribution against them or their families. Perhaps it’s just hard for many of us, wallowing in an age of instant messaging and tell-all blogs, to believe that there are limits to what we can know about other human beings. Consider, for example, this revealing incident involving a North Korean worker (who thus almost certainly doubles as an employee of the North Korean security service) at a European embassy in Pyongyang. The worker was shocked when her brother showed up one day to apply for a visa, because she had no idea that her brother had the right to travel abroad. He, by contrast, had no idea that his sister worked in a foreign embassy. In that respect, perhaps, North  Korea can serve as a useful cautionary tale. Is it hard to know what’s going on at the top? “It’s not just hard,” says Andrei Lankov. “It’s impossible.”

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N. Koreans growing familiar with digital devices

Sunday, June 3rd, 2007

Yonhap 
6/3/2007

NKeconWatch: Joshua at One Free Korea is skeptical about the article below, read here.  As a side note, see how much lower health care prices can be if consumers are permitted to pay for it themselves. 

High-tech portal devices such as music players and cameras are almost ubiquitous in South Korea, but many may believe they are nowhere to be found in poverty-stricken North Korea.

Unlike the conventional wisdom, however, a growing number of North Koreans, though still confined to some privileged classes, listen to music with MP3 players and take pictures with digital cameras in their daily life, a North Korean souvenir shop clerk told Yonhap News Agency.

A group of South Korean reporters visited North Korea last week to cover a delegation from South Korea’s Gyeonggi Province which has been promoting agricultural exchanges with the communist government. The reporters were allowed to visit a department store and other attractions in the North’s capital, Pyongyang.

When asked what he was listening to with an earphone, the North Korean clerk answered plainly, “MP3 music files,” adding that he downloaded songs from the Internet.

When asked if he has a digital camera, the clerk replied, “I am using the same model Canon that you are carrying now.”

In terms of IT development, the reclusive North has been regarded as lagging far behind South Korea where almost all younger people take it for granted to use digital devices.

The clerk’s response does not provide any insight into the North’s IT sector, including how many of them use such digital devices, but experts say that they offer a glimpse into changes taking place in North Korea, though slowly.

Meanwhile, a North Korean restaurant worker said that many beauty-conscious North Korean women receive plastic surgeries to look prettier. “You can easily see a woman on the street who had a double eyelid operation,” he said.

Such eyelid plastic surgery costs around 0.7 euro in the North, slightly less than the average monthly salary in the country, he said.

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Fair Game?

Sunday, June 3rd, 2007

Korea Times
Andrei Lankov
6/3/2007

Kim Il Sung’s North Korea has always been a tough customer, and nobody knows who was more irritated by its constant antics: its foes or its friends. It has been a tough ally, ready to cheat and manipulate its sponsors. Since the 1950s most of its patrons have had to put up with its style _ largely because of their grand strategy, of course.

In the long run, it was probably the Soviets who were subject to Pyongyang’s diplomatic frolics most frequently, but China has the dubious honor of being the first country to enjoy such an experience in the early 1950s. Somewhat surprisingly, this happened during the Korean War when only a massive Chinese intervention saved Kim Il Sung’s regime from a sorry end.

Recent document-based research by Chinese scholars, especially by the formidable Shen Zhihua, has provided us with new insights into the early history of relations between the two supposedly “fraternal” countries. Now it is clear that the picture was anything but rosy.

When the North Korean troops invaded the South, it was implied that the Chinese forces would step in if the situation took a dangerous turn. Nonetheless, until late September, Pyongyang ignored Chinese advice and kept Beijing in the dark about the frontline situation. This drove the Chinese military attache and ambassador mad, but they could not do much about it.

The situation changed in October when Kim Il Sung had lost the war: by late October 1950, there was hardly one battle-ready battalion in the North Korean armed forces. The Chinese rushed in a large expeditionary force, but soon a question arose: who was to be in charge of the united armed forces?

Kim Il Sung clearly assumed that he would stay in command, and would have operational control over the Chinese units. This was unacceptable to the Chinese. To an extent, this was a clash of two nationalisms (and nationalisms of East Asia are notorious for being particularly virulent). However, there were real considerations involved as well.

First of all, the Chinese force far outnumbered the North Korean army. Second, the Chinese generals did not have much trust in the military competence of their North Korean colleagues. Peng Dehuai, whose task was to save the North, did not hide his outrage about Pyongyang’s style of operations. He was especially angry about the meaningless defense of a doomed Seoul, where about 30,000 North Korean soldiers were killed in late September. In late 1950, he sent a telegram to Beijing in which he labeled the North Korean style “childish”.

However, Kim Il Sung and other North Korean leaders avoided the issue, so the two armies (or, to be more precise, the Chinese army and the remains of the North Korean army) for a while acted independently–often, with sorry results. On November 4, for instance, the lack of coordination even led to a battle in which the North Korean tanks mistakenly attacked Chinese infantry, and thus unwittingly helped a semi-circled American unit escape.

At the same time, the Chinese attempts to incorporate the North Korean units into their own forces were met with resistance on the part of Kim Il Sung. He needed an army of his own, and was not ready for concessions.

It took more than a month to solve the question of joint command. Perhaps, the problems would have last longer, had Stalin not sent a cable demanding an immediate rectification of the situation. Stalin’s advice had to be taken seriously, and his intervention put an end to delays. The Joint Command was headed by Peng Dehuai, with two Chinese-speaking Korean generals acting as his deputies (incidentally, both generals were purged by Kim Il Sung a few years after the war).

However, new tensions arose in December 1950 when the railways came to be discussed. The Chinese forces could be supplied only by rail, and those lines were subjected to intense bombing. The railways had to be managed carefully, but the Chinese commanders discovered that Korean administration gave preference to cargo related to the economic needs of Korean reconstruction, rather than to military supplies. As a result, the Chinese and Koreans ran two different railway administrations, operating on the same railway network. It’s easy to imagine how this influenced the efficiency of the transportation system.

After a few months of discussion the North Koreans agreed to have a joint railroad command, but on the conditions that they would exercise overall control. By that time, most of the rolling stock had been provided by China, and the Chinese soldiers were also doing most of the maintenance work, hence the Chinese generals assumed that they should have the upper hand. But the Koreans did not agree. For them, this was an issue of their territorial rights, sovereignty, and other important symbols. For the Chinese, this was a question of their soldiers’ lives.

Once again, direct Soviet involvement was necessary to put an end to the squabbling. Stalin had no patience for the petty ambitions of his not very efficient satellite, and he was still in position to control the North. Hence, Stalin himself cabled Pyongyang demanding they agree to the Chinese conditions. In May 1951, after his august intervention, Pyongyang gave in.

These early squabbles were a sign of things to come. Over the years, North Korea has developed a peculiar diplomatic style, harsh and unbending but remarkably successful. It used to be applied to Moscow and Beijing. Nowadays the same tricks work wonders in dealing with the current sponsors of the regime, Beijing and Seoul as well as with Washington. But that is another story…

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