Archive for December, 2009

N.Korea in Fresh Attempt to Lure Foreign Investment

Thursday, December 10th, 2009

Choson Ilbo

Even as North Korea struggles under UN sanctions and is in the midst of a controversial currency reform aimed at breaking the back of a nascent free market, the reclusive country is apparently in the process of changing laws in order to attract more foreign investment, an expert said Wednesday. It is even offering foreign companies wages cheaper than those paid to North Korean workers at the joint-Korean Kaesong Industrial Complex, according to Jack Pritchard, president of the Korea Economic Institute in Washington D.C.

Pritchard, who visited Pyongyang last month along with Scott Snyder, director of the Center for U.S.-Korea Policy at the Asia Foundation, told reporters in Washington. The North Korean trade department official they met there told them there are no strikes among North Korea’s skilled workers and were very aggressive in luring foreign investment. He added North Korean officials offered wages of 30 euros a month (around US$44), which was lower than the average $57 paid to workers at the Kaesong Industrial Complex. The officials said they were also willing to offer various incentives to foreign companies interested in taking part in the construction of 100,000 homes in Pyongyang. North Korea appeared to be changing its attitude toward foreign countries as part of its goal to become a strong and powerful nation by 2012, he said.

In an article for Global Security [Posted below], the Internet-based provider of military and intelligence information, Snyder wrote, “North Korean colleagues at the Ministry of Trade appeared genuinely surprised and dismayed when we mentioned that UN Security Council Resolution 1874… contains provisions prohibiting companies from making new investments in North Korea.”

Snyder said North Korea’s interest in foreign investment as part of its goal to become a “strong and powerful nation” by 2012 is a new development and one that could play a role in resolving the nuclear stalemate.

But efforts to attract foreign investment and capital over the past 25 years have been a disaster. North Korea announced new regulations in September of 1984 to allow businesses from capitalist countries to operate there. It set up special economic zones in Rajin-Songbong in 1991 and in Sinuiju in 2002. But the Sinuiju project never got beyond the ground-breaking stage due to conflict with China, while empty factories litter Rajin-Sonbong.

North Korea aimed to attract $7 billion worth of foreign investment into Rajin-Sonbong, but actual investment amounted to only $140 million. According to the South Korean government and other sources, there are an estimated 400 foreign businesses operating in North Korea. Most of them are small businesses run by Chinese or North Korean residents in Japan. The shining exception is the Egyptian telecom company Orascom, which offers mobile phone services in the North. “It’s more accurate to say that there are no major foreign businesses operating in North Korea,” said Cho Dong-ho, a professor at Ewha Woman’s University.

North Korea forged its first pact guaranteeing foreign investment with Denmark in September 1996 and signed similar pacts with around 20 countries, including China, Russia, Singapore and Switzerland, as of 2008. There have been consistent reports that businesses in Europe and Southeast Asia were interested in doing business in the North, but hardly any made the move.

Cho Myung-chul, a professor at the Korea Institute for International Economic Policy, who taught economics at Kim Il Sung University in North Korea, said, “The reason why no listed foreign companies are operating in North Korea is because they may end up on the list of businesses subject to U.S. sanctions.” This is one of the reasons why North Korea has tried so desperately to be removed from the U.S. list of terrorism-sponsoring countries.

And even if foreign businesses are interested in investing in North Korea, its lack of infrastructure, including steady power supply and adequate roads and ports, make it impossible to operate factories there. Cho Young-ki, a professor at Korea University, said, “You have to build a power plant if you want to build a factory in North Korea. Cheap labor does not mean businesses will profit there.” The electricity used by the Kaesong Industrial Complex is provided by South Korea, while Hyundai Asan operates its own generator at the North Korean resort in Mt. Kumgang.

Dispatch from Pyongyang: An Offer You Can’t Refuse!
Global Security
Scott Snyder

Every North Korean seems to have been mobilized for an all-out push to mark their country’s arrival as a “strong and powerful nation” in 2012, which marks the 100th anniversary of Kim Il Sung’s birth, Kim Jong Il’s seventieth birthday, and the thirtieth birthday of Kim Jong Il’s third son and reported successor, Kim Jong-Eun. Pyongyang citizens have cleaned up the city during a 150-day labor campaign, followed by a second 100-day campaign now underway. The Ryugyong Hotel in the middle of Pyongyang, unfinished for over two decades, has been given a facelift courtesy of the Egyptian telecommunications firm Orascom, which expects to have 100,000 mobile phone customers in Pyongyang by the end of the year. But it is still difficult to shake the feeling in Pyongyang that one has walked onto a movie set in between takes. Or that the used car looks good on the outside, but you really don’t know what you might find if you were able to look under the hood or give it a test-drive.

North Korean foreign ministry officials saw United Nations condemnation of their April missile launch as an affront to their sovereignty. This is the ostensible reason the North Koreans have walked away from six party talks. Having conducted a second nuclear test, North Korean officials want to be considered as a nuclear power, choosing instead to “magnanimously” set aside nuclear differences in order to focus on the need to eliminate U.S. “hostile policy” by replacing the armistice with a permanent peace settlement. Essentially, Pyongyang’s new offer–as a “nuclear weapons state”–has shifted from the denuclearization for normalization deal at the core of the 2005 Six Party Joint Statement to “peace first; denuclearization, maybe later.” There was no mention of “action for action” by our North Korean interlocutors.

But the North Koreans are likely to find when Ambassador Stephen Bosworth arrives in Pyongyang next week that the United States will not accept North Korea as a nuclear weapons state. There is virtually no area of agreement between the two governments on the nuclear issue based on public statements made by the two sides thus far, suggesting the likelihood that both sides will face a difficult conversation.

A new component of North Korea’s strategy for achieving its economic and infrastructure goals in the run-up to 2012 is its effort to attract investment from overseas. The Director of North Korea’s newly established Foreign Investment Board unveiled a new plan for attracting equity, contractual, and 100% foreign owned joint venture investments. On paper, the rules incorporate provisions for repatriation of profit, generous tax incentives, and a labor rate of thirty Euros per month. This rate undercuts the compensation of $57.50 per month currently offered at the South Korean-invested Kaesong Industrial Zone. Even more generous was the offer of special concessions in North Korea’s natural resources sector for companies willing to build 100,000 units of new housing in Pyongyang that have already been promised in the run-up to 2012.

North Korean colleagues at the Ministry of Trade appeared genuinely surprised and dismayed when we mentioned that UN Security Council Resolution 1874, which condemned North Korea’s May 25, 2009, nuclear test, contains provisions prohibiting companies from making new investments in the DPRK. This is all the more unfortunate because on paper, North Korean efforts to open its economy through foreign investment are exactly the course that should be encouraged, and North Korea’s goals for 2012 could be advanced significantly with inward investment from companies that might be willing to take the risk, but the nuclear issue stands in the way. This is not to mention that North Korea’s own economic retrenchment and anti-market policies, including the “currency reforms” announced earlier this week, stretch the credibility of the North Korean government to back up these laws. Recent surveys of Chinese investors suggest few demonstration projects for successful investment in North Korea and a high probability of getting scammed or fleeced on the ground.

But the North Korean plea for foreign investment does suggest a potential point of leverage that deserves careful consideration, and that is the possibility of an investment in a strategic commodity that is of special interest to the United States: North Korea’s plutonium stock. During the Clinton administration, former Defense Secretary William Perry led efforts to make similar purchases of nuclear materials from the Ukraine and Kazakhstan, which had inherited stocks of nuclear materials from the breakup of the Soviet Union. These transactions advanced the cause of nuclear non-proliferation by ensuring that these countries would not become nuclear states. A 2004 report of a Task Force on U.S.-Korea Policy co-sponsored by the Center for International Policy and the University of Chicago, also suggested a plutonium “buy-out” proposal for North Korea, despite the obvious moral hazard of appearing to reward North Korea’s bad behavior. Any transaction with North Korea involves moral hazard, and North Korea has already proven that it will sell or sub-contract nuclear materials to the highest bidder. One positive of this approach is that any transaction involving removal of nuclear materials or capabilities from the North would be irreversible, in contrast to past practice of offering irreversible food-aid benefits to North Korea in exchange for participation in multilateral dialogue, but not for irreversible steps toward denuclearization.

In a post-9/11, post-North Korean nuclear test world, the Obama administration must find a formula that facilitates North Korea’s irreversible actions on the path toward denuclearization rather than agreeing to half-measures: North Korea’s immediate focus is on gaining the resources necessary to mark 2012 as a year of accomplishment, yet the North has been highly critical of Lee Myung-bak’s “grand bargain” Proposal. Denuclearization needs to be placed on the North Korean agenda as an accomplishment that North Korea will be able to justify as part of its broader 2012 objective of becoming a “strong and prosperous state.” Unless a new formula can be found by which to bring these two objectives into line with each other, it is likely that the United States and North Korea will continue to talk past each other.


DPRK acknowledges spread of swine flu

Wednesday, December 9th, 2009

UPDATE:  According to AFP:

South Korea is preparing to ship medical supplies worth more than 15 million dollars to help North Korea fight an outbreak of swine flu, officials said Monday.

The unification ministry, which handles cross-border ties, said the shipment would include antiviral drugs for 500,000 patients — Tamiflu for 400,000 and Relenza for 100,000 — and sanitation supplies.

The aid will cost an estimated 17.8 billion won (15.3 million dollars), which will be financed by a state fund for inter-Korean cooperation, it said.

Spokesman Chun Hae-Sung said Seoul would send the shipment as soon as possible, and definitely by the end of the year. But the North, which had accepted the offer, had not yet set a firm date.

The drugs shipment will be the first direct South Korean government aid since relations soured last year, although Seoul has funded assistance to Pyongyang through private groups.

North Korea Wednesday reported nine cases of (A)H1N1 in the capital Pyongyang and the city of Sinuiju bordering China. No death toll was given.

Observers say the virus could pose a particular threat to the North because of malnutrition amid persistent food shortages and a lack of drugs such as Tamiflu.

Good Friends, a Seoul-based welfare group with cross-border contacts, quoted an unidentified Sinuiju city official as saying more than 40 people had died of the swine flu in the border city alone.

The World Health Organization, however, told Yonhap news agency that all nine North Korean patients have recovered.

Yonhap quoted Suzanne Westman, coordinator of outbreak alert and response at the WHO’s New Delhi office, as saying no additional cases were reported in the isolated communist country.

The first of the patients, all children aged between 11 and 14, was discovered on November 25 and the last case on December 4, she said, adding that three of the infections were in Pyongyang with the other six in Sinuiju.

“All contacts have been identified, put in isolation and treated,” she told Yonhap, adding that North Korea had a solid surveillance system and a sufficient number of physicians is believed to be able to handle the outbreak.


Anti-A/H1N1 Flu Campaign Intensified

Pyongyang, December 9 (KCNA) — New Influenza A/H1N1 broke out in some areas of the DPRK amid the growing of its victims worldwide.

According to the Ministry of Public Health, nine cases were reported from Sinuiju and Pyongyang.

The relevant organ is further perfecting the quarantine system against the spread of this flu virus while properly carrying on the prevention and medical treatment.

The State Emergency Anti-epidemic Committee has taken steps to enhance the role of prevention and treatment centers at all levels and increased checkup stations across the country while directing efforts to the medical treatment of its cases.

According to Yonhap:

The World Health Organization (WHO) is working “closely” with the North Korean government to help stem the spread of an Influenza A outbreak there and assess the scope of flu infections among North Koreans, a WHO spokesperson said Wednesday.

North Korea said earlier in the day that it has confirmed nine domestic cases of H1N1 virus infections. The highly infectious disease may be particularly dangerous to the North Korean people, who are mostly undernourished and may have weakened immune systems.

“We are working closely with the (North Korean) government to see what is required and if they need any assistance from WHO,” Aphaluck Bhapiasevi, a WHO spokeswoman on the H1N1 pandemic, said over the telephone.

Bhapiasevi also said there are likely more cases of the H1N1 virus than announced, as people who have mild symptoms are not tested.

“In any country, there may be more cases than have been laboratory-confirmed,” she said. “They may not reflect actual number of the cases.”

In May, WHO provided 35,000 Tamiflu tablets each for North Korea and about 70 other underdeveloped countries to help fight possible outbreaks. Seoul officials say the North would need millions of tablets to safeguard its 24 million people.

Through its office in North Korea, the world health body has been making “preliminary assessments” of the scope of the outbreak, she said. “We have been discussing support that would be required.”

According to the AP, the DPRK will accept ROK assistance as well:

North Korea agreed Thursday to accept medicine from South Korea to fight an outbreak of swine flu, a Cabinet minister said, in a development that could improve relations between the nations after a deadly maritime clash.

“Today, the North expressed its intention to receive” the medical aid, Unification Minister Hyun In-taek told reporters.

North Korean state media reported Wednesday that there were nine confirmed swine flu cases in the country. South Korea plans to send the antiviral Tamiflu to the North, Health Ministry spokesman Lee Dong-uk said, without giving specifics.

South Korea’s Yonhap news agency said South Korea plans to send enough doses of Tamiflu for about 10,000 people. It cited a government official it did not identify.

The move came two days after South Korean President Lee Myung-bak offered unconditional aid to North Korea to help contain the virus — the government’s first offer of humanitarian aid since Lee took office in early 2008 with a hard-line policy toward the North.

(h/t NK Leadership Watch)


North Korean labor market data (qualitative)

Wednesday, December 9th, 2009

I thank a reader for pointing out an interesting article in the Korean Political Science Association Journal which contains a plethora of qualitative data on the North Korean labor Market–survey data from a cross section of defectors.

Here is the citation:

Park, Young-ja, “‘Marginal Work’ and ‘Labor Market’ in North Korea after the 2003 General Market System”, Korean Political Science Association Journal Vol. 43, No. 3, September 2009

Read the full article here, or here.


DPRK importing waste

Tuesday, December 8th, 2009

According to the Donga Ilbo:

North Korean organizations in charge of raising foreign currency are bringing in and burying industrial waste from China for money, a report released yesterday said.

The report also said North Korean scientists who complained that their country is turning into China’s industrial waste site have been purged in North Korea.

Daily NK, a media outlet on North Korean affairs, quoted a source in the North’s South Hamkyong Province as saying, “The soil survey research center at Hamhung Institute of Technology released a research paper on its study of land pollution resulting from burial of industrial waste from China and a letter urging countermeasures to the Central Committee of the (North Korean) Workers’ Party. The institute was dismantled and senior officials and researchers were all purged.”

“The research paper details how China’s industrial waste is sent to North Korea and dumped,” the source said, adding, “It also strongly warns against the practice of North Korean factories lacking sewage treatment facilities and freely dumping sewage into rivers freely.”

One North Korean scientist said, “Our country in effect is turning into China’s industrial waste site,” adding, “Even tap water in Pyongyang has become so polluted that it is no longer potable.”

The source also said North Korean scientists sent the research paper and the letter to committee secretary Choe Tae Bok. The committee soon closed the institute and purged its staff, saying, “The scientists violated rules by reporting the matter directly to the party secretary without going through the required process.”

North Korea is reportedly taking in foreign industrial waste in secret in the form of its border trade with China.

Dong Yong-seung, head of the economics and security team at Samsung Economic Research Institute in Seoul, said, “Though no data is available that can tell us the exact situation, Chinese companies might believe that sending industrial waste to North Korea for burial is cheaper than disposing of it in China in compliance with Chinese environmental regulations.

North Korea is also not just bringing in waste just from China. Former North Korean defector Kim Heung-kwang, now head of a coalition of former North Korean intelligentsia in South Korea, said, “Companies that earn foreign currencies brought in waste vinyl from Germany and France for 300 U.S. dollars per ton in early 2000 and buried it in soil.”

The fact that the DPRK imports waste from other countries is not new or surprising given its international trade capacities. Back in June 2008 Michael Rank wrote about North Korea’s efforts to import toxic waste from other countries.

Read the full story below:
Report: NK Turning Into China`s `Industrial Waste Dump`
Donga Ilbo


Australian govt denies visas to DPRK artists

Monday, December 7th, 2009

About the Asia Pacific Triennial of Contemporary Art:

Established in 1993, the Asia Pacific Triennial of Contemporary Art (APT) is the Queensland Art Gallery’s flagship international contemporary art event. It is the only major series of exhibitions in the world to focus exclusively on the contemporary art of Asia, the Pacific and Australia.

Since the first Triennial in 1993, more than 1.3 million people have visited the exhibitions, peaking with more than 700 000 visitors to APT5 at the new Gallery of Modern Art and Queensland Art Gallery in 2006.

The first three Triennials demonstrated the diversity of contemporary art practice across the region (from Pakistan to Niue) by profiling 220 artists from 20 different countries. APT 2002 was radically different in that it considered developments in contemporary art over recent decades through in-depth explorations of 16 individual artists. APT 2006 continued to develop the model of 2002 with a strong emphasis on the Gallery’s Collections, and featured a selection of works from 35 artists and 2 multi-artist projects (a total of 66 artists) from our region across generations.

In 2009, APT6 will profile the work of over 100 artists from 25 countries in the region, including a number of artists and artist collaborations never seen in Australia before.

Internationally renowned for its collection of Contemporary Asian and Pacific art, an ongoing element of the APT series is the commissioning of new works in tandem with an acquisition program for the Gallery’s permanent Collection.

This year the exhibition features paintings by North Korean artists from the Mansudae Art Studio:

APT6 will include for the first time contemporary artists from North Korea, Iran, Turkey, Tibet, Cambodia and Myanmar (Burma). Australian artists presented in APT6 are the Philippines-born, Brisbane-based husband-and-wife team Alfredo and Isabel Aquilizan; the Melbourne collective DAMP; Raafat Ishak (Melbourne); and Tracey Moffatt, who lives and works in New York and on the Sunshine Coast.

However, according to Nick Bonner:

[The North Koreans] were invited by Brisbane Modern Art Gallery Asia Pacific Trinennial (government insitiution) and their work was allowed in – 5 big inks 2×2 metres and a ten square meter moziaic, and 2.6 metre oil…all beautifully on display and appreciated by the public (expecting over 700,000 visitors). The  5 artists and one translator who had been issued DPRK passports to travel have been refused visas stating that their ‘presence in Australia is, or would be, contrary to Australian’s foreign policy interests.’

So it seems to me that the moral of this story is: you can’t hold an art show in Australia without the national government getting in the way.  That is a shame for the Australian people and the North Korean artists.

According to Australia’s Courier Mail:

A spokesman for Foreign Affairs Minister Stephen Smith said the artists’ studio produces favourable propaganda images of despotic leader Kim Jong-il.

The spokesman said the ban was also part of the Australian government’s response to North Korea’s missile and nuclear and weapons program.

“The artists concerned are from a studio that operates under the guidance of North Korea’s leader Kim Jong-il,” the spokesman said.

“The studio reportedly produces almost all of the official artworks in North Korea, including works that clearly constitute propaganda aimed at glorifying and supporting the North Korean regime.

“To make an exception in this case would have represented a relaxation of Australia’s visa ban and sent an inappropriate message to the North Korean regime.”

Tony Ellwood, gallery director, said. “We were hopeful there might be an exception, but we have to respect the wishes of the federal government on this.

“However, we are very disappointed.”

Unfortunatley this is probably the outcome the North Korean government would have preferred.  The Mansudae Art Studio gets exposure at an international art exhibition while the artists themselves stay nicely protected in Pyongyang and unable to expand their knowledge of and connections with artists from other countries.  Even if the North Korean government truly desired their artists to make an appearance at the exhibit, it is unlikely that denying artists entry visas to Australia is going to affect the DPRK’s foreign policy one little bit.

UPDATE 1: Here is a list of the painters involved.  An explanation of Choe Yong Sun’s The Construction Site (2005) can be found here.

UPDATE 2: Here are some more pictures of Choe Chang Ho and his work: Picture of a Retired Man, Kangson Steel WorksOn the Way to Work.

UPDATE 3: More pics at The Times.

UPDATE 4: The Los Angeles Times covers the story:

Bonner, who has made several documentary films in North Korea, in 2006 commissioned the Mansudae Art Studio to produce 15 pieces dealing with industrial landscapes for showing at the Asia Pacific Triennial of Contemporary Art in South Brisbane, Australia. The display, which will be up through April, features the works of 100 artists in 25 nations.

Though he acknowledged that North Korea’s art studios are government-run, as are most organized activities in the country, he said that doesn’t mean that all the works produced there are political.

Mansudae, which houses 1,000 artists, has produced work for several exhibits in Italy, according to the studio’s website.

Bonner encouraged the artists to avoid the socialist realism style typical of most communist propaganda.

“We didn’t want works that glorified workers, but something more understandable to Australians — their humility,” he said.

Still, for many of the artists the assignment was a stretch. Finally, a painter showed Bonner a photograph of a blue-collar worker smoking a cigarette. “He said, ‘Is this what you mean?’ and we said, ‘Yes!’ It was a real breakthrough,” Bonner said.

He said the completed works — including sketches and portraits in oil paint and ink — express ideas that are groundbreaking for the North Korean artists, such as a painting that shows the smoky fires of an industrial foundry.

“I’ve let them down,” Bonner said of the artists. “I promised them an opportunity to explain their work. They paint beautifully; that’s why they were invited. For them to speak to other artists and patrons from a foreign land would have been a real breakthrough.”

Bonner said the project was never intended to be political.

“But the Australian government has managed to turn it into that,” he said. “It’s bloody frightening when a government steps in to overrule an art gallery. That’s just wrong.”

UPDATE 5: From The Australian:

WHEN Foreign Affairs Minister Stephen Smith turned down visa applications for a group of North Korean artists, the Queensland Art Gallery and curator Nicholas Bonner were disappointed but understood the decision.

Bonner had been working with the Brisbane gallery for many years to bring the artists and their work to Australia for the Asia-Pacific Triennial of Contemporary Art.

The initial refusal of visas had been made on the grounds the artists were “persons whose presence in Australia was contrary to Australia’s foreign policy interests”.

That was fine, says Bonner, who travelled from his base in Beijing to see the work installed for the exhibition opening on December 5 and, he had hoped, to help present the North Korean artists to Australian audiences.

It was when the Department of Foreign Affairs and Trade responded to inquiries about that decision by commenting on the art, sight unseen, that Bonner became agitated.

“When [DFAT is] not allowing the artists to visit specifically because the Mansudae Studio is involved in the production of propaganda, [it] went too far,” Bonner says. “If you allow the art in but then you don’t allow the artists who made the work in, that’s censorship. The frightening thing about this is that whoever is advising the Australian government on this is showing a massive level of ignorance.”

Bonner is a British landscape architect who left the University of Sheffield in 1993 to spend a few years working in China.

By chance more than design, he became involved in various projects in North Korea, setting up a tourism business as well as organising sports visits and making films.

He is based in Beijing because that city is the gateway to North Korea, which he visits monthly.

“When we went to North Korea, we had our own preconceptions almost delivered in Fox News style – the massive parades – and you think, how funny,” he says. “But if you’re at the other end of the parade waiting for one of your friends and you see them when they stop, when they come to you and say, `Right, fancy a beer Nick?’, then you see the other side.

“I know how the situation is in North Korea and it makes me more determined.

“You can go two ways: say, `Forget this place, I wouldn’t touch it with a barge pole’, or you do, and I’m the latter.

“What we found was that interaction with individuals allowed us to do the most amazing things we never thought we could do.”

If even a few of those artists had been able to visit Brisbane to see their work hanging in QAG’s Gallery of Modern Art alongside mirror mosaics from Iran, video from Vietnam and sculptural drums from Vanuatu, Bonner believes Australian audiences would have enjoyed hearing about the experience of working in the most esteemed art studio in North Korea. He also believes the North Korean artists would have benefited. “You never know what might have happened,” he says. “If you are creative and see the wealth of art around you, it is going to have a massive effect.”

A statement released by DFAT, following the publicity surrounding Smith’s decision not to grant visas to North Korean nationals, said the ban was “part of the government’s response to North Korea’s missile and nuclear weapons program”.

Although the statement said the nature of the artwork was an “incidental consideration”, DFAT made reference to the fact Mansudae studio is under direction of North Korean leader Kim Jong-il.

Because the studio “reportedly produces all the official artworks in North Korea, including works that clearly constitute propaganda aimed at glorifying and supporting the North Korean regime”, DFAT decided on the visa ban, a sign to that country’s leader of this country’s disapproval.

Bonner becomes almost speechless with despairing rage at this statement and the damage it may do to the project that took so long to achieve. He apologises, saying he hopes he doesn’t sound like a crackpot, but he admits he would never have got involved in the first place if he had known this would be the outcome.

“North Korean artists have never done anything on this scale before,” he says.

“There’s never been work shown on this scale ever, but with the expertise of Suhanya Raffel [one of the APT curators at QAG] and my specialty, we’ve been able to show work on this scale.”

Mansudae is, indeed, the North Korean leader’s favoured art studio: artists compete to be accepted there following their six or eight years of university training because of the prestige. Mansudae also does produce much of the state’s official propaganda.

But, says Bonner, the artists at Mansudae also specialise in many other kinds of art.

Bonner is particularly proud of being able to show several portraits where the subjects are shown as individuals, rather than as stereotyped joyful workers, such as those depicted in the large mosaic work that greets visitors to this landmark exhibition.

Some of the works come from Bonner’s personal collection and he talks about discussing innovation with individual artists. One group of seven chosunhua, or brush-and-ink paintings, commissioned for APT, “tests the boundaries” of this traditional form by depicting domestic interiors, “humble illustrations of a familiar scenario expressed in an unpretentious manner”, Bonner says.

As with all the works in APT6, QAG has lavished care and respect on the display, and the overall effect in the spaces devoted to the Mansudae artists is eerie.

The almost comical optimism of a print of a young woman cleaning a bus or of a group of workers cycling to a factory is balanced against the tender realism of beautifully rendered portraits.

A large work by O Sung Gyu, depicting a foundry scene, is presented in isolation, so the viewer can appreciate its ambition and technical skill, noticing how the artist has also attempted to depict the fierce flames with more loosely applied blocks of colour.

In the room alongside, Im Hyok’s big brush-and-ink portrait of a worker, ubiquitous cigarette in his hand, eulogises the work ethic with predictable doggedness, but another study, by Kim Yong-il, shows a pensive man, posed like an Asian Byron, on a shoreline, with what looks like a fishing village in the background.

The smokestack is everywhere, even shown in the view through the window in a brush-and-ink interior of what seems to be a typical North Korean apartment.

Bonner, before the disappointment of the refused visas, expressed his satisfaction at working with these artists as they experimented with traditional techniques and composition.

Dismissing this work as propaganda “suits the way we are managing the world”, Bonner says.

At the opening he was told by some viewers that they found the images of happy workers disturbing, but he says such a response shows a “lack of depth and understanding”.

He hopes viewers will see the difference between propaganda and the humility of these works, the way each has, behind its making, the story of an individual artist working at a craft.

Even if a viewer decides the message is too ideological, Bonner’s response is, “So what?”

“To be quite honest, if they said it was propaganda, so what? It is still interesting to see that.

“You have to ask, how ignorant do you want the Australian population to be?”


KOTRA – KDI higlight DPRK’ growing trade volume

Monday, December 7th, 2009


From the Korea Herald:

The North Korean economy’s dependency on international trade is nearing 40 percent, a think tank reported yesterday.

According to the Korea Development Institute’s report on North Korea’s economy in the 2000s, North Korea carried out international trade worth $5.64 billion last year.

The cross border trade figure of $5.64 billion recorded last year is equivalent to about 40 percent of the North’s gross domestic product, which is estimated to be about $15 billion.

In the report, the KDI said that the figures show that North Korea’s economy, which the regime boasted as having the most independent structure in the world, is taking a form increasingly dependent on the outside world.

The report said that North Korea’s cross border trade volume has risen rapidly, mainly due to increasing imports, and that such developments have been essential to the country’s economic recovery.

Since 2000, North Korea has managed to post positive growth rates.

However, North Korea’s GDP per capita is thought to be hovering below figures recorded in the late 1980s and the early 1990s, before the country’s economic crisis began.

According to United Nation’s statistics, North Korea’s GDP per capita was between $600 and $700 for the 2007 to 2008 period.

In comparison, the country’s GDP per capita was ranged between $900 and $1,000 in the late ’80s and the early ’90s.

The KDI estimated that applying the rate at which the North’s GDP per capita has been increasing since 2000, the country’s GDP per capita is likely to be between $700 and $1,300 in 2012.

The report also said that although the North Korean authorities are moving back toward a more tightly controlled economy, the country’s is unlikely to meet the targets set for 2012.

In addition, the report said that recording a trade deficit of $1.5 billion last year — equivalent to about 10 percent of its gross domestic product — makes it appear that the country is going to have a hard time digging itself out of trouble by itself.

Of last year’s $5.64 billion trade figure, exports accounted for about $2.06 billion, while imports came in at more $3.57 billion. According to the KDI’s figures, the North’s cross border trading has been increasing at an average rate of 11 percent each year since 2000, when the figure was recorded at about $2.39 billion.

Along with the increase in trade volume, North Korea’s trade deficit has also increased rapidly since 2000.

Between 2000 and 2004, North Korea’s trade deficits were maintained below or just above $1 billion. However the figure rose sharply in 2005 to reach $1.38 billion in 2005.

The KDI said that the North’s authorities have been able to offset trade deficits through the large amount of overseas capital that has flown into the country since 2000.

So where is that capital account surplus coming from to finance the trade deficit? It is NOT coming from South Korea.

Read the full story here:
N. Korea trade dependency hits 40%
Korea Herald
Choi He-suk


DPRK revalues currency

Friday, December 4th, 2009

UPDATE 20:  It might be possible that public anger over the government’s new monetary policy forced the govenrment to increase the maximum amount of currency that can be converted.  According to the AFP:

North Korea has backtracked on details of its shock currency revaluation following a riot by market traders that led to 12 executions, a report said Tuesday.

South Korea’s Chosun Ilbo newspaper said the hardline communist state had taken a series of steps to placate its people over the 100-to-one revaluation announced two weeks ago.

It said the concessions follow a riot by merchants in the eastern city of Hamhung on December 5-6 which stirred public sympathy. Twelve “masterminds” of the unrest were later executed, the paper said.

It was not possible to confirm the reported riot or executions. But there have been accounts of widespread anger since the regime revalued its currency earlier this month, requiring old banknotes to be exchanged for new ones at the rate of 100 to one.

Analysts said the move was aimed at curbing inflation and clamping down on a growing free-market economy to reassert the regime’s control.

But the initial limit of 100,000 won on the total cash that each person could exchange effectively wiped out many people’s savings in the impoverished nation.

On Sunday authorities raised the limit to 500,000 won, Chosun said, quoting sources in the North.

One hundred thousand won in old money was equivalent to 30-40 dollars at the previous black market rate.

The North also announced that eventually citizens would be allowed to exchange all their old bills for new ones if they deposit the money in banks, Chosun reported.

People reportedly shun banks because they fear investigations into the source of their savings, or restrictions on withdrawals as in the past.

In response, Chosun said authorities promised no probe into savings of up to one million won and unlimited withdrawals if savings of more than one million are properly explained.

The newspaper quoted a high-level North Korean source as saying authorities “are backtracking under pressure from market forces”.

UPDATE 19:  The Daily NK reports that DPRK authorities launched the monetary revaluation without establishing new wages and prices:

A source of Yangkang Provicne explained in a phone conversation with The Daily NK on the 11th, “Wages of workers used to ranged between 1,300 and 2,500 North Korean won.” “If this is put into operation, then the wages of the secretaries of the Provincial Committee of the Party would be leveled to approximately 1,000 won.”

“It was agreed that a precise measure relating to wages was not yet perfect and would be relayed to the accounting clerks at a later time,” the source adds. “Under the decree, all debt relations among existing enterprises would become ‘zero’ and foreign currency earning organizations will hereafter undergo adjustments. However, due to the fact that the size of liabilities between enterprises is not so significant, it is essentially a meaningless measure.”

Unusually, on the morning of the 9th, the lecture broke free from the customary one-sided presentation of the Party decree in favor of audience participation. Attendees stated one after another: “We must establish reasonable prices as soon as possible and stabilize the workers;” “If the food problem is not resolved, then we will not be able to prevent rising prices;” “The existing wages and [state mandated] food prices should be adhered to;” and so on.

In the end, the Yangkang meeting offered a temporary, partial settlement of enterprise wage and debt issues as well as the announcement that more follow-up measures will be introduced in the near future. Authorities also stated that “national course of action” on price-related matters will be subsequently delivered.

The only government-authorized pricing to be finalized involved railway shipping charges. A “temporary” train route table has been posted at the Youth Hyesan Station, with Hyesan-Pyongyang fare set at 46 won and Hyesan-Baegam fare at 18 won.

“When judging by distance, it is almost more expensive to operate intra-provincial trains,” the source observes. “Fixing the Hyesan-Pyongyang cost at 46 won was based on the temporary trains that ran when university students in Pyongyang would return to their hometowns during the early break. There is no other meaning.”

But the fact that other price measures were not announced at the cadres meeting helped maintain a sense of confusion among North Korean citizens. “Nowadays, even when two or three people gather, they will mutter, ‘Where is our country headed?’” bemoans the source. “The state should decide on wages or prices, so the markets can run normally.”

“But since the authorities have been dragging their feet, ordinary citizens have not been able to regain their senses.”

UPDATE 18: According to the Choson Ilbo, the DPRK has banned the entry of foreigners for a period of time and temporarily closed markets:

One source in China said that Pyongyang would bar foreigners from entering the country temporarily at the end or beginning of a year, when customs officials along the border with China are on leave for year-end holidays, but banning them until February is “quite uncommon.”

Experts say this could herald a visit by Kim Jong-il to China, since the paranoid North Korean leader likes to ensure maximum security along the route of his special armored train. Chinese President Hu Jintao invited Kim to visit at a “convenient” time when he met Choi Tae-bok, the chairman of the North’s Supreme People’s Assembly, in October. Kim has visited China four times, and twice (in 2001 and 2006) they fell in January.

But Good Friends, a Seoul-based organization which provides aid to North Korea, in its latest newsletter said North Korean authorities shut down open-air markets for three days starting on Monday after prices of goods soared following the currency revaluation. The North was to reopen the markets after prices adjust.

One researcher with a state-run research institute said, “For North Korea to succeed in its currency reform it needs stable supplies of food and other products, and Pyongyang may have decided that China is the only country it can rely on. That might also make it necessary for Kim himself to visit China.”

More on market closures can be found in Bloomberg.

UPDATE 17: The Daily NK reports that DPRK trading offices and companies on the Chinese border were raided in advance of the currency revaluation to confiscate capital which had accumulated in these offices.  The central government confiscated these resources apparently because they were under the de facto control of various nouveau riche 

UPDATE 16: According to Australian

North Korea has set new prices for staple goods after its shock currency revaluation, but most items are selling in markets for more than laid down by the regime, an aid group said overnight.

Citing informants in North Korea, South Korean group Good Friends said the new prices were published last Wednesday.

“Few items sell at the state-set prices, and most of them are trading at higher-than-set prices at the markets of major cities nationwide,” it said in a newsletter.

Rice is selling for 50 won per kilogram at markets in the northeastern port city of Chongjin, more than double the state-fixed price of 23 won, it said.

Other staples such as corn, wheat flour and beans are also selling for more than the government price, it said, adding that pork was a cheaper exception.

UPDATE 15: According to the Daily NK it seems the DPRK authorities are taking the week to educate the lower level party members on how the post-currency reform economy is supposed to function.  These are the same low-level party officials who probably bore the brunt of the DPRK’s monetary “reform” initiative:

Meetings and lectures were convened on the 8th to follow-up on the currency redenomination; explaining prices, wage standards, and payments between factories and enterprises.

A source from Yangkang Province reported the news on Wednesday in a telephone conversation with the Daily NK, “A lecture began at 2 P.M. yesterday. It was administrative education for managers of sub-Party organizations, Primary Party Committee secretaries and accounting clerks in factories.”

The source added, “The meeting was scheduled for the evening of the 9th, but if necessary it may continue on the morning of the 10th.”

These kinds of meetings were also held right after the fourth denomination replacement in 1992 and again after the July 1st Economic Management Reform Measure in 2002.

This time around, there are two kinds of lectures; one for cadres, and a separate one for administrative workers.

In the Yangkang cadres lecture there were major Party cadres from the People’s Committee of Yangkang Province, the Agricultural Accounting Committee of the province, People’s Safety Agency, May 16 Construction Bureau (a temporary organization overseeing each province’s construction projects) and Hyesan Steel Mill; office workers from the financial department of the Yangkang Province People’s Committee, accounting clerks and treasurers from factories and enterprises attended the administrative lecture. The lectures were held in the conference halls of the Provincial Party Committee.

The Hyesan Party Committee also reportedly convened lectures for cadres and workers in the same way in the conference hall of the Municipal Party Committee and the Kim Il Sung Revolutionary Ideology Institute in Hyejang-dong.

In the meetings and lectures, provision of payment and modes of transaction between factories, state designated prices for commodities and services and the setting of an upper limit for market prices were all rumored to be on the agenda.

Among them, wage levels and top limits for jangmadang prices are the most noteworthy items.

On the subject of wages, rumors apparently streamed out from around the conference halls; “They will maintain wage levels as was,” and, “Wage levels will be cut in half.”

If wages are maintained, or even cut in half, the monetary value of wages would increase from 50 to 100 times, or at least they would if prices remained the same.

To this end, the North Korean authorities are also expected to announce detailed rules whereby prices in markets may not exceed state-designated levels.

The source explained, “The state’s policy is to build a world where the people can live on their wages. The reason for the decree about the markets is to prevent prices rising.”

However, economists worry about the impact of these policies. If the authorities are not able to expand supply having raised wages substantially, and then they forcefully reduce market prices, in the long run hyperinflation will result and trading will become all-but impossible.

Especially, if the authorities take to printing money in order to pay for projects related to the construction of the “strong and prosperous state,” an unimaginable aftermath will be created.

Meanwhile, the source explained, “In some regions, food prices are already soaring. Traders don’t like this phenomenon, which at least reassures the authorities about the traders’ attitudes.”

However, he pointed out that even when the market works normally, price levels are not particularly stable.

UPDATE 14: The AFP notes that the currency reform has cripped the DPRK’s markets:

Private markets on which North Koreans rely heavily for necessities have been paralysed since the communist state’s shock currency revaluation last week, a report said Wednesday.

South Korea’s Hankyoreh newspaper quoted sources in China’s border city of Dandong as saying private transactions — which supplement the faltering state distribution system — have come to a virtual halt.

“The road linking Pyongyang and Sinuiju has been shut down. It’s been hard to get through to partners in the North by phone,” a Chinese businessman told the independent daily in Dandong, across the border river from Sinuiju.

A North Korean central bank official has been quoted by a pro-Pyongyang newspaper as saying the aim is to weaken the role of free markets and strengthen the socialist system.

Amid reports that some frustrated residents have been torching old bills, South Korean aid group Good Friends said authorities have threatened severe punishment for such an action.

Many residents would burn worthless old bills rather than surrender them to authorities, in order to avoid arousing suspicions about how they made the money, Good Friends said.

The banknotes carry portraits of founding president Kim Il-Sung and his successor and son Kim Jong-Il. Defacing their images is treated as a felony.

 UPDATE 13: Wall Street Journal  offers map of public discontent.

UPDATE 12: Entrepreneurship in China:  “Beijing markets offer counterfeit old N. Korean notes” (Kyodo).

UPDATE 11: Normally currency revlauations are coupled with institutional and organizational reforms to the monetary and public finance systems so that the public will have confidence that the new currency will maintain its value.  This is how inflation is defeated.  The DPRK has not announced any reforms of either the monetary or fiscal systems–in fact they did not even announce the currency conversion–so in addition to people losing their savings they have no expectations that the new currency will retian its value…so of course we will get instant inflation once again and probably worse than the original rate.  According to Bloomberg:

The North Korean won has plummeted 96 percent against the dollar after the government revalued the currency last week, according to reports by Yonhap News Agency and a South Korean aid group.

A North Korean bank in Sinuiju, near the border with China, offered to buy dollars for 35 won on Dec. 7, Good Friends, a Seoul-based rights group, said today on its Web site. Before the currency revaluation, the official rate was about 140 won, and as much as 3,500 won in the black market, Yonhap said.

Following the revaluation, rice prices have more than doubled, Good Friends said. One kilogram (2.2 pounds) of rice cost 50 won as of Dec. 5, compared with 16 won to 17 won on Dec. 2, the group, which obtains information through contacts within North Korea, said in its newsletter yesterday.

One in four school children were absent due to hunger on Dec. 3, indicating how widespread the struggle to find food had become, the group said, without saying how it derived the number.

Caveat Emptor on Good Friends reports. An alternate report claimed that school was ended early to prevent the spread of H1N1.

UPDATE 10: Institute For Far Eastern Studies (IFES)   (NK Brief No.09-12-4-1) 

At 8:00 A.M. on December 2, North Korea began transferring to a new currency throughout the country. According to Daily NK, the order to exchange currency was issued without explanation, as each regional branch of the Korea Central Bank began exchanging notes from 8:00 in the morning. ‘Good Friends’, ‘North Korea Intellectuals Solidarity’, and other defector organizations are reporting that the North is in the process of changing its currency.

North Korean officials first notified residents of the money swap on November 30. Citizens were advised that old notes were to be traded for new money, but there was significant resistance and locals refused, leading officials to issue a new order to exchange currency. The order stipulated that the exchange be carried out at ‘100 to 1’ and that for any family exchanging more than KPW 100,000, any additional monies are to be exchanged at a rate of 1000 to 1. Any remaining currency is to be deposited in the bank, and will be re-issued in new notes at a later date.

If anyone actually has as much as a million won in cash, they would be able to transfer the first hundred thousand into one thousand won of the new currency, and the next hundred thousand would be worth a mere 100 won. The remaining 800 thousand won of savings would have to be turned over to the bank on the promise that it would be accessible at some time in the future at an exchange rate that has not yet been determined. This has been met with considerable controversy within North Korean society.

On November 3, 1992, as the North went through a currency reform, old money was exchanged for new on a 1-to-1 basis, and on a standard of 300 won-per-family. Up to 200 thousand won could be deposited as savings in a local bank, but one month later it was announced that each family could withdraw no more than four thousand won in any three-month period. At the time, when banks failed to return savings to the people, many became disheartened. Markets closed and stalls were shuttered as growing numbers of people became worried that they would be unable to exchange their money for U.S. dollars or Chinese yuan.

Currency traders in Pyongsong markets, which are at the heart of North Korea’s manufacturing distribution network, were reduced to tears. Shoppers stayed at home and business travelers suddenly stopped coming. Rice traders were selling 1 kilogram for 2,200 won at the end of last month, but are now asking as much as 30,000 won (of the old currency). This means prices jumped to almost 13 times as much as they were just three days before the currency swap announcement. Currently, all of the North’s security forces are deployed to restrain the people, and not only have the Peoples’ Security Forces and the National Security Department been put on alert, but even the military has been put on emergency status. A 10:00 P.M. curfew is being enforced, and it has been announced that violators will be dealt with strictly.

With this currency exchange, the North’s middle-class is expected to suffer considerably. This is because the poorest have no savings, and the richest hold dollars or yuan. Food sellers are expected to suffer the most, since food sales across the country are carried out in cash.

UPDATE 9:  Although Good Friends reports have a reputation of being hit and miss, here is their report on the DPRK’s currency conversion.  The usual caveats apply.

UPDATE 8: Here is an English translation of an interview with the head of the North Korean Central Bank (PDF).  I got the interview here. (h/t Adam Cathcart)

UPDATE 7: The Choson Ilbo points out that monetary revaluation has been an on-and-off policy goal of the North Kroean government since 2002:

The large-denomination bills, such as those worth 5,000 and 2,000 won, bear the stamp “2008” on the upper left. Images of the 500, 200, 100, 50, 10 and 5 won bills and those on the back of 1 won, and 50, 10, 5 and 1 jeon coins bear the stamp “2002.”

“It seems that the North printed the new bills and coins in 2002 when it implemented the July 1 economic reform plan, where it introduced a modicum of market capitalism, but decided not to circulate the new currency that year apparently due to runaway inflation,” a source said. “And the North again apparently prepared for currency reform in 2008 by printing new large-denomination bills but postponed the reform because leader Kim Jong-il had a stroke.”

UPDATE 6: The rules continue to change.  According to the Daily NK:

“The maximum amount per household which could be exchanged in cash was initially set at 100,000 won, but overnight it increased to 150,000 won, then subsequently a new decree was handed down.”

“According to the new decree, the exchange rate is still 100:1 for 100,000 won, but now the authorities will only permit people to exchange the rest of the money at 1,000:1.”

As a result, if you take 200,000 won in cash to a bank, you get 1,100 won in new denomination bills. This emergency formula will do nothing other than destroy the fortunes of the people.

Another source reported that in the jangmadang practical trading had ceased, although rice was still on sale from traders dealing in the product from home. The price of a kilogram has apparently skyrocketed to 30,000 won in old denomination bills, a 15-fold increase.

Wealthy merchants generally do their business in Yuan or U.S. Dollars, so the harm to them is not so serious. At the other end of the scale, low end traders who live from day to day will not be hit too hard for the simple reason that they don’t have much cash.

However, people in the middle classes who have tended to hoard paper cash at home are facing a fatal beating.

UPDATE 5: The Daily NK and Yonhap have pictures of the new currency.

UPDATE 4:  According to the Daily NK:

In the three days since the start of the exchange, the authorities have changed the policy a number of times. First they planned to allow each household to exchange 100,000 won; 1,000 won in new denominations. Then they changed it to 150,000 won. Then they changed it again to 100,000 won, plus 50,000 won more per family member in a family of four. That is, a standard household can now exchange a maximum of 300,000 won.

Additionally, the authorities announced an extra new decree whereby one could put the rest of one’s money, which cannot be exchanged into new bills, in the bank.

This near continuous flow of policy amendments has exacerbated public confusion.

Regarding excess monies above the limit for direct exchange, the authorities originally proclaimed that people could exchange it at a 1000:1 rate, but several hours later on the same day, revised it to people being able to deposit 200,000 won in the bank at the 1000:1 rate. However, on the morning of the 3rd, the authorities implied that the state would allow the people to deposit as much as they have, saying, “The whole deposited amount will be dealt with appropriately by the state.”

Naturally, residents do not really believe in what the authorities say because they had a similar experience in 1992; the people deposited 20,000 won, but the banks gave only 4,000 won back the next year.

UPDATE 3: Marcus Noland hits the nail on the head.  He writes in the Wall Street Journal:

North Korea announced a surprise currency reform this week. The move isn’t about good economics, however; it is yet another stratagem by the central authorities to short-circuit the development of an entrepreneurial class independent of the state.

Currency reforms are not a bad thing in principle. Stable governments historically have used this tactic to draw a line under bad economic policies of the past, often after taming a hyperinflation. Good reforms typically involve knocking zeros off the old paper and issuing new currency, perhaps at approximate parity to major currencies such as the dollar or the euro to make it easier for citizens to hold their government accountable for macroeconomic performance. In recent years Turkey and Ghana, among others, have successfully implemented such reforms.

What occurred Monday in North Korea is different. Unlike a Turkish or Ghanaian-style reform, in which all citizens are encouraged to convert all their holdings of the old currency, the North Korean regime limits the amount of currency that can be converted. This renders excess holdings worthless, and has set off the frenzy this week to get out of old won and into anything else—dollars, Chinese yuan, physical goods—that will maintain value. Any economic “reform” also creates opportunities to parcel out benefits, as with a 2002 price and wage reform that favored the military.

This move is part of Pyongyang’s broader effort to curtail the rise of market activities and the development of pathways to wealth—and potentially power—beyond state control. Participants in North Korea’s bootstrap capitalism include everyone from laid-off factory workers to government officials who exploit their inside knowledge to deal privately in everything from grain to imported Chinese consumer goods.

In a society so highly atomized by the government, a private-sector market would be one of the few ways for North Koreans to interact with each other away from the state’s watchful eyes. So it stands to reason the regime would be worried about the market quite apart from any subversion of the state’s own economic machinery. Roughly every decade since the founding of the country in 1948, the government has initiated a currency reform or similar policy to confiscate the savings and working capital of private entrepreneurs.

There appear to be several particular spurs for the latest “reform.” North Korea relies on local production for about two-thirds of grain consumption, with most of the rest coming through aid. The recent harvest was reportedly poor and world grain prices are rising. This makes farmers more likely to divert food from government procurement to the black market. United Nations sanctions also are disrupting the country’s finances, affecting everyone and reducing the supply of luxury goods the regime dispenses as favors to supporters.

The upshot is that, despite both the currency reform and the legal crack-down on the private economy, the regime is not succeeding in stamping out the market entirely. The fact that Pyongyang has to keep trying indicates that North Koreans keep trying even harder to scrape together better lives for themselves. But the sheer ruthlessness of the Pyongyang regime and its extraordinary capacity for repression underline just what an uphill battle those North Koreans face against a regime determined to keep them down.

Also here are some more details from the Choson Ilbo:

Sources in North Korea say people have been told that money above the individual exchange limit must be deposited in banks, but the state also limits individual deposits to between 300,000 to 3 million won, and people are not allowed to freely withdraw money from their accounts. This has apparently stoked tremendous anger.

During the last currency reform in 1992, authorities permitted each person to deposit up to 20,000 won in the bank, but they were later allowed to withdraw only a few thousand won. Many were unable to withdraw any money at all.

Read previous posts on this topic below:


Friday Grab Bag: NOKO Jeans go on sale; Korea Today turns 60

Thursday, December 3rd, 2009

UPDATE 2: NOKO Jeans are on sale here and here.

UPDATE : It looks like the NOKO Jeans launch did not go off as expected. The Swedish department store in which the jenas were to go on sale has pulled the plug on NOKO’s retail space at the last minute.  According to the AFP (Via Singapore’s Straits Times):

A SWEDISH department store on Saturday cancelled what was to be the sale of the ‘first ever’ brand of jeans made in North Korea, the Swedish company behind the communist-made dark denims said.

‘Apparently PUB has censored our exhibition/store by shutting it down and ‘confiscating’ the jeans because of the ‘working conditions in North Korea’,’ Jakob Ohlsson of company Noko Jeans told AFP in an email. ‘At first i thought it was a joke but everything has been removed from the store,’ he added.

Mr Ohlsson, along with Jacob Aastroem and Tor Rauden Kaellstigen – all under the age of 25 and with no previous experience in business or fashion – started Noko Jeans in mid-2007, prompted by a desire to enter in contact with isolationist North Korea.

Their designer jeans were to be sold starting on Saturday at Aplace, a boutique that is a tenant of the trendy PUB department store in central Stockholm. ‘A half-hour before opening, we got a call from the head of the department store and he explained to me… that PUB cannot sell the Noko Jeans,’ Kalle Tollmar, the founder and CEO of Aplace told AFP.

‘The explanation I got was that (the store’s management) had taken the decision… that PUB is not the right place, or platform, for this kind of political discussion,’ he said, confirming his store was hoping to continue distribution of the controversial duds at another location.

The Noko sales space at PUB was deserted on Saturday, the jeans removed and and surrounding photo exhibition taken down by the department store’s security. ‘They have it in a locked room at PUB but we have been promised to get everything back on Monday, it’s only for security reasons, they don’t want us to sell the jeans,’ Ms Tollmar said. — AFP

According to the AP:

A Stockholm department store says it won’t carry a new line of North Korean-made designer jeans because it doesn’t want ties to the isolated communist nation.

PUB store spokesman Rene Stephansen says it is “a political issue that PUB doesn’t want to be associated with.”

The Noko Jeans line is the brainchild of three Swedish entrepreneurs who hoped to help break North Korea’s isolation through increased trade with the West.

A spokesman for the retail space where Noko Jeans was selling its product says the jeans were taken off shelves early Saturday.

Noko Jeans spokesman Jacob Astrom says he regrets the decision is looking for a new shop location. The jeans will be available online.

The NOKO web page says that the jeans will be available on Monday, but in Sweden, Monday has nearly come and gone and the jeans are still not for sale on the web.

ORIGINAL POST: NOKO Jeans go on sale today.  According to Reuters:

Designer jeans labeled “Made in North Korea” will go on sale this Friday at a trendy department store in the Swedish capital, marking a first foray into Western fashion for the reclusive communist state.

The jeans, marketed under the “Noko” brand, carry a price tag of 1,500 Swedish crowns ($215) and will share shelf space at Stockholm’s PUB store with brands such as Guess and Levi’s.

Noko’s founders told Reuters they had spent over a year trying to gain access to factory operators in North Korea, and struggled with poor communications and an unfamiliar approach to doing business once inside the country.

“There is a political gap, there is a mental gap, and there is an economic gap,” said Jacob Astrom, one of three Swedish advertising executives behind the project. “All contacts with the country are difficult and remain so to this day.”

The idea for the project was born out of curiosity for North Korea, which has grown increasingly isolated in recent years under Western criticism of its human rights record and nuclear ambitions.

“The reason we did this was to come closer to a country that was very difficult to get into contact with,” Astrom said.

North Korea, a country better known for its reclusive nature than fashionable clothes, rarely allows outsiders within its borders and has virtually no trade or diplomatic relations with most Western countries. Sweden, one of only seven countries to have an embassy in North Korea, is an exception.

But the process of agreeing a deal to produce just 1,100 pairs of jeans — the first ever produced by the country, according to the founders — often proved baffling. E-mails vanished into a void and communications were strained.

At one point they were asked to bring a zinc smelting oven into the country, and a trade representative once asked them to help him find a pirated version of the computer program Adobe Acrobat so he could read files they were sending him.

“Everyone is a manager. Even our chauffeur was some sort of manager,” said founder Jakob Ohlsson, adding that North Korean titles were often confusing.

After being turned down by North Korea’s largest textile company, the group managed to secure a manufacturing deal with its largest mining company, Trade 4, which also happens to run a small textile operations on its site.

“This is often the way it works in North Korea,” said Ohlsson. “Companies seldom specialize and therefore often manage several operations that differ completely from one another.”

During the summer, the trio traveled to the factory in North Korea to oversee the production process and ensure that workers there were treated according to Noko’s guidelines.

“We were forced to operate by micro-management,” Ohlsson said, referring to his experience on the factory floor.

Fashionable novelty seekers can order Noko jeans from the company’s website after December 4, but you are not likely to see a pair on the streets of Pyongyang, North Korea’s capital, anytime soon.

Socialist dress code forbids them.

According to the BBC:

Mr Ohlsson explained black denim was chosen because North Koreans “usually associate blue jeans with America. That’s why it’s a little taboo”.

But the high ticket price for the jeans is not simply aimed at finding an exclusive niche in the market.

Mr Ohlsson admitted: “The reason they are so expensive is that we didn’t have any experience in fashion, trading, or anything like that.”

Read previous NOKO Jeans posts here, here, here and here.

Korea Today Turns 60.  According to Korea Today:

korea-today.jpgDecember 4 this year marks the 60th founding anniversary of The Foreign Language Magazines, DPRK.

On the occasion we extend heartfelt gratitude to our readers.

We began to publish our journal, titled New Korea, in January 1950, hoping to help the readers understand how the Koreans had lived before they got free from the Japanese colonial rule and engaged in building a sovereign independent state, what they were aspiring after and what course they would take in the future.

Later the title changed to Korea Today.

The monthly magazine has so far carried policies the Workers’ Party of Korea set forth in each stage of socialist construction, achievements the Korean people made in their implementation, independent and creative life of the working masses and their happiness as well as the history, geography and culture of Korea.

Also introduced are the struggle of the Koreans and other progressive people for reunifying the nation that has been divided into the north and the south for over 60 years and building a new independent world—in various styles and methods.

Published in Russian alone in the initial years, the monthly is now available in English, Chinese, French, Spanish and Arabic, too.

You can get access to Korea Today on the Naenara site.

We’ll do our best to help you know the realities of Korea where building of a thriving nation is on its height, the efforts of the Korean people for national reunification and the struggle of Koreans and other progressive people around the world for a new, free and peaceful world.

It is interesting that Korea Today would remind everyone that their first publications were in Russian and featured Pyongyang’s  Liberation Tower (located here) on the cover.  It removes all doubt about who was actually in control at the time (i.e. not Kim Il Sung). (Новая Корея=New Korea).

Korea Today is full of all sorts of interesting and useless tid-bits on the DPRK–such as this.

Korea Today, Korea, and Kumsukangsan are all published by the Pyongyang Foreign Languages Printing House (also turning 60) located here.

The Soviet equivalent of Korea Today, named Soviet Russia Today, published a piece about the early days of the DPRK by American communist Ana Louise Strong, who was one of the first Americans allowed into the country.  Learn more here.


Goethe Institute opens-closes library in Pyongyang

Wednesday, December 2nd, 2009

UPDATE: In 2004 Germany’s Goethe Institut opened a reading room in Pyongyang (see Choson Sinbo article below). This week it was closed. According to Deutsch Welle:

After five and a half years in operation, the Goethe-Institut in North Korea has said it will close its reading room in the capital city of Pyongyang due to censorship concerns.

The institute, a non-profit organization that promotes the study of German language and culture in 91 countries, opened the reading room in June 2004. It was the first and only Western cultural institution to establish itself in the communist country.

Raimund Woerdemann, director of the Goethe-Institut in Seoul, told Deutsche Welle that, contrary to an agreement made with the North Korean government, access to the center was often hindered.

“The building in which the reading room was located was often locked from the front,” he said. “There was a permanent construction site in front of the back entrance: not a welcoming situation.”

To his knowledge, there has never been an Internet connection in the Pyongyang center, said Woerdemann, and attempts to establish an Intranet connection with other North Korean educational institutions were interrupted on multiple occasions.

The reading room is slated to close in summer 2010. Woerdemann added, however, the Goethe-Institut would make an effort to maintain positive relations with North Korea through participation in the North Korean-German Friendship Society, the Committee for Cultural Relations Abroad and other partnerships.

Criticism from Berlin

The decision to close the reading room has met with strong criticism from the German parliament. Phillip Missfelder, parliamentary foreign policy spokesman for Chancellor Angela Merkel’s CDU issued a statement Wednesday, calling the closure “a bitter experience and a big disappointment for everyone who has stood up against resistance to cultural exchange and for the gradual opening of communist North Korea.”

The move represented “the end of an important aspect of German foreign policy in the areas of culture and education, which was a ray of light in the darkness of the repressive, totalitarian government in North Korea.”

In the statement, Missfelder said the CDU parliamentary group takes the closure “very seriously” and would make every effort to reverse the decision.

The center in Pyongyang was founded with the aim of reducing the information deficit in the country, offering unrestricted access to the Internet and free press, networking with South Korea and other countries, and promoting literature.

The Pyongyang reading room has been removed from the Goethe Institute’s web page, although not all of the links have been removed.

The reading room was located near Tae Mun and the DPRK’s Ministry of Culture in Pyongyang here.

UPDATE 1: According to, the Goethe Institut plans to expand Pyongyang reading room:

On the sidelines of the International Federation of Library Associations and Institutions (IFLA) conference last week, a German cultural institution reaffirmed its commitment to promote freedom and democracy in North Korea.

The Goethe Institute, an NGO sponsoring German language and culture worldwide, said it is ready to expand its collection of media resources in North Korea.

The institute opened a reading room in Pyongyang in 2004 where North Koreans can freely access a variety of German media, including books, newspapers, and music. The content is completely uncensored and accessible to all North Koreans. That was the condition under which Goethe Institute agreed to open the reading room, said Jurgen Keil, director of the Goethe Institute in Seoul.

“The reading room has been received very positively by North Koreans. We hope that it can contribute to normalizing North Korea’s relations to the outside world,” Keil said.

The efforts mirror a similar German diplomatic strategy in the 1970s when then West German Chancellor Willy Brandt pursued a policy of “Change through Rapprochement” of easing ties with East Germany through a series of reconciliatory measures.

Former President Kim Dae-jung made reference to this strategy when he formulated the South Korean “Sunshine Policy.”

Claudia Lux, IFLA president-elect, stressed that “knowledge is always a step toward freedom.”

Keil added that many North Koreans can speak German. Until German reunification in 1989, a great number of North Koreans were living and working in East Germany.

North Korea was eager to establish the reading room in order to boost its international diplomatic profile, even though the content available there undercuts the strict censorship imposed by the country.

The reading room in Pyongyang currently holds 4,000 items. Keil said it plans to gradually increase the number to 8,000 in the coming years.

ORIGINAL POST: From the Choson Sinbo (August 14, 2004):

A library of German science books was opened in central Pyongyang on June 2, as the first institution where people can freely read foreign books.

The library was opened in cooperation between Pyongyang’s DPRK-Germany Friendship Association and Germany’s Goethe Institute.

The library has 4,000 scientific books in natural and social sciences and leading German newspapers and magazines. In addition, the library has various kinds of movie tapes, music CDs and cassette tapes and audiovisual education aids for German language study.

It is the first time that the DPRK has opened a library of scientific books of a specific Western country.

An official concerned with the library said that the institute aims at introducing advanced science and technology of Western countries and at promoting mutual understanding between the DPRK and Germany by spreading Germany’s scientific books in the DPRK.

The library introduces German books to libraries of domestic universities and research institutes while allowing people to freely read German books, newspapers and magazines. It lends books to users.

Accepting users’ requests the library orders books from the Goethe Institute, a nongovernmental cultural organization of Germany. Pyongyang’s counterpart offers requested books to the library free of charge.

The library has plenty of natural science books, such as books of medical science, information technology, geology, physics, architecture, chemistry and biology. In addition to natural science books, there are books of German literature, art, philosophy and books of social science including law and history.

According to an official concerned, main users of the library are university students, researchers and scholars.

Officials said that a delegation of the Goethe Institute plans to visit Pyongyang in September to provide 4,000 more books to the library. The Goethe Institute also plans a training course for librarians to staff the library.

Kim Mun Ik, 57, an official of the Association of External Cultural Liaison, said, “The DPRK is not an ‘exclusive country.’ The library is a clear indication that we have been open to the outside, receiving foreign things as far as these are useful for us and now we are making every effort to develop relations with foreign countries, even with Western countries.”


Syria’s Tishreen War Panorama

Wednesday, December 2nd, 2009

Visitors to Pyongyang’s Victorious Fatherland Liberation War Museum (Location here) will be interested to know that the DPRK has exported its museum technology to Syria’s Tishreen War Panorama (Location here).


The images are from this web page.

According to an official web page (I think), the panorama dimensions are 129.5m x 7.8m.  It was painted by Kim Sing Chol, O Kwang Ho, Ri Jae Su, Ri Kap Il, Kim Chol Jin, Choe Song Sik, Ri Jong Gap, Kim Ki Dok, Cha Yo Sang, Ri Yon Nam, and it opened on 6th October 1999.  These artists are employees of the Mansudae Overseas Development Group (Art Studio).

I thank a reader for sending me this information.  I have been mapping North Korean projects in Africa, Asia, and the Middle East on Google Earth.  Here are some I have blogged about: Monument to African Renaissanace, Zimbabwe Hero’s Park, Ethiopia’s Derg Monument, Kinshasa Kabila Statue, and quite a few more.  If you are aware of any North Korea projects in your area please let me know.

UPDATE: Cairo’s October War Panorama is also built by the North Koreans.   It appears to have nearly identical architecture.  It is located here.