Archive for July, 2010

Why DPRK won’t close Kaesong

Saturday, July 31st, 2010

According to the Choson Ilbo:

Despite increasing tensions between the two Koreas since the North sank the South Korean Navy corvette Cheonan in March, Pyongyang looks unlikely to close the joint Kaesong Industrial Complex, chiefly because it is a source of much-needed hard currency.

The salaries of some 40,000 North Korean workers there are not paid to them but to the regime, which keeps most of the money, making the industrial park a lifeline amid crippling international sanctions.

There have been fears that the North could take the South Koreans who work in Kaesong hostage, as it has already done once. “North Korea built the Kaesong Industrial Complex because it can earn cash and take a large number of people hostage if it wants,” said a former intelligence officer who defected to the South.

Kaesong has no other industry and is unsuited for farming because of military facilities, so if the industrial park is shut down, the 40,000 workers face starvation.

The monthly income of some US$4 million is no small sum. When the State Security Department picked the industrial park’s core manpower, it simply relocated Kaesong residents and brought in workers screened under strict standards from Pyongyang and other cities. Now they have got used to their positions, closure of the industrial estate could make them a headache for the North’s security forces.

A senior North Korean defector said the State Security Department “is now in trouble because the workers are now kindly disposed to the South Korean firms operating there.” Most of them are aware that they get only $2 or $3 out of every $60 their employers pay for each of them. Despite that, many North Korean workers are eager to go to the Kaesong complex, since most North Korean firms have stopped paying wages amid the economic malaise, but at Kaesong workers are at least still paid and they get perks that are worth even more.

Any North Korean workers who contact South Korean businesspeople or meet with them privately, however briefly, can be subject to security investigations or labeled political dissents. Hundreds are said to have already suffered this fate. “If the North shuts the industrial park first, the workers will get very restive,” said a defector from Pyongyang. Nor would it help the regime to take South Korean staff hostage as that would only expose its immorality and thus provoke even severer criticism, he added.

However, the North is building a huge industrial estate in the Rajin-Sonbong economic zone that could replace the Kaesong industrial park. A Korean Chinese businessman who recently visited Rajin said, “Hotels and industrial lots are under construction and roads are being widened, and the locals have either been driven out of the city or housed in temporary quarters.” But it is rare to meet foreigners there, he added. The North Korean authorities are wooing foreign investments through their overseas missions, but even Chinese businesspeople say it would be crazy to invest in North Korea now.

Attempts to attract Chinese tourists to make up for revenue lost from suspended South Korean group tourism to the Mt. Kumgang resort are also failing. The North is now inviting the Chinese veterans of the Korean War. But one Chinese tourist said visitors “are treated like criminals and not even allowed to take pictures.” A Chinese businessman commented, “North Korea is proposing to do something with China that it can’t even accomplish with South Koreans, but no one here believes it.”

Read the full story here:
Why N.Korea Won’t Shut the Kaesong Industrial Complex
Choson Ilbo


DPRK embassy in Myanmar seize books about KJI

Friday, July 30th, 2010

According to Reuters Canada:

North Korean diplomats in Myanmar have confiscated hundreds of copies of a locally published biography on the Stalinist state’s reclusive leader, Kim Jong-il, the book’s author said Friday.

Prominent Burmese writer Hein Latt, 62, said two senior embassy officials visited his home and took away the remaining 300 copies of the book, which they said was “false and inaccurate” and could endanger ties between the two countries.

“I handed over these books just because I don’t want to take the trouble to sort out whatever consequences will appear,” Hein Latt told Reuters, adding he had not received any complaints from the authorities in military-ruled Myanmar.

There was no immediate explanation as to why diplomats were acting to confiscate books in a foreign country.

North Korea and Myanmar have developed a close diplomatic relationship, causing concern among Asian and Western countries fearful the two are cooperating on issues related to nuclear weapons technology.

North Korea’s Foreign Minister, Pak Ui-chun, is currently in Myanmar on a four-day visit.

Hein Latt, who has authored about 25 biographies, including books on U.S. President Barack Obama, Iranian President Mahmoud Ahmadinejad and former Chinese leader Deng Xiaoping, said about 700 copies of his book had been sold since it was launched two months ago.

He said the biography, entitled “Kim Jong-Il: The Dear Leader of North Korea,” had been approved by the Press Scrutiny Department of the Myanmar’s Ministry of Information. It was written in the Burmese language.

The embassy officials said it contained false information because it made references to other texts published in North America about Kim, son of North Korea’s late founder, Kim Il-sung, the country’s “eternal” president.

An interview with the author is here.

Read the full story here:
North Korean diplomats seize books on Kim in Myanmar
Reuters Canada


North Korea expanding farming areas

Friday, July 30th, 2010

Institute for Far Eastern Studies (IFES)
NK Brief No.10-07-30-1

North Korean media outlets are reporting large-scale development of tidelands as part of ongoing economic projects. There have been reports on a land reclamation project in the tideland area of Daekye-do, in North Pyongan Province, that was completed on June 30. The Korea Central News Agency (KCNA) and the Workers’ Party newspaper Rodong Sinmun both ran stories on July 1 stating that the Central Committee of the Workers Party sent a letter of congratulations to the construction workers and supporters of the project, calling it, “A massive project of reclaiming Mother Nature, no less significant than the construction of the West Sea Flood Gates.”

The project, completed at the end of last month, reclaimed tideland in North Pyongan Province from Dasa-do, off the coast of Yeomju and Cholsan villages, to Kacha-do, Soyondong-do, Daekye-do, Tokye-do, and the Cholsan peninsula. It comprises 13.7 km of shoreline and more than 87 million square meters of land.

On July 22, the Choson Sinbo reported that North Korea planned to reclaim more than 59.9 million square meters or farm land by the end of 2012. The story also noted that the second phase of the land reclamation project in North Pyongan Province was in full swing, and that the first phase of a second project around Ryongmae-do, South Hwanghae Province, was scheduled to be completed by 2012.

The massive Daekye-do project completed at the end of June would be more than 10 times the size of Seoul’s Yeoui-do area, with more than two thirds of the area being reclaimed land. As background for the article, the newspaper explained, “As one way to expand crop production in [North Korea], the focus is being placed on the expansion of farmland through tideland reclamation.”

Related to this, the KCNA reported on July 15 that Kim Jong Il had visited the Daekye-do project, and said, “Land reclamation is an important project in the nation’s rich and powerful development.” Such a statement is tantamount to ordering the expansion of reclamation activities. Kim Jong Il also called for focusing national interest on difficult and massive reclamation projects to be carried out in the future, demanding that “policies necessary to support these projects must be thoroughly implemented.”

It was reported that Kim expressed ‘extreme satisfaction’ over the successfully completed Daekye-do project. After inspecting the area, he stated that the reclaimed farm land needed to be used “to full effect,” while at the same time more land reclamation projects should be carried out in order to completely resolve the North’s food shortage. North Korean media reported that Kim Jong said, “What is important here is to continue strongly extending the land reclamation project.” The KCNA also reported that North Korean state authorities, Party and Cabinet ministers, and supervisors from central government agencies accompanied Kim Jong Il on his tour of the Daekye-do land reclamation site.

On July 4, Korea Central Television (KCTV) reported, “Power plants throughout the country produced 1.2 times more electricity in the first half of this year than they did last year,” and the KCNA emphasized increased production in a number of factories, stating that compared to production plans, “In the Bakchon Silk Factory, rug production was 101%, regular cloth production was 107%, and ramie cloth liner production was 130%” of production quotas. In addition, “Along with the Pyongyang Daily Goods Factory production increase of 120%, the Nampo Glorious Soldier Shoe Factory, Hyeechon Silk Factory, Pyongyang Textile Factory and others are all meeting production goals.”


2012 construction and safety issues

Thursday, July 29th, 2010

According to the Daily NK:

There have been grievances reported amongst residents of provincial areas that are part of North Korea’s renovation efforts to become a “strong and prosperous state” by 2012.

North Korean authorities announced a plan last September to reconstruct old houses in regional cities. However, a lack of construction materials and electricity has pushed back the start date. After the currency redenomination last November, rumors amongst residents suggest that construction could end before a single plough dug into the ground.

Construction efforts were revitalized in April this year as authorities set specific targets for city construction teams and state owned enterprises to build large residential buildings holding ten to thirty households. October 10 was set as the deadline before which all construction was to be complete, the same day as the founding date of the Chosun Worker’s Party.

However without sufficient resources, including labor, it remains to be seen whether the project will finish. Furthermore, large and small accidents have raised some concerns amongst local populace.

On July 12 a three-story brick building at Sariwon, North Hwanghae Province, collapsed in the middle of construction. Seven workers were injured by the accident. A source cited the mixing of excessively brackish sand with cement was the reason behind the collapse.

North Korea is currently suffering from a lack of cement. Not only is supply from the authorities non-existent but following the construction of 100,000 houses in Pyongyang, the market no longer has any consistent supply. With prices rising, cement is being smuggled from regional construction sites and sold in markets. This is one another key reason for the shoddy construction.

A source stated that, “Construction workers pretend to work,” because there is no payroll to even feed them. This creates serious obstacles for workers, forcefully mobilized for construction, who cannot provide for their families.

The source added, “In a situation where selling on the jangmadang is a prerequisite to earning a living, you can only suffer losses if you are chosen to work on construction sites.”

Accidents arising from a lack of safety precautions are also a concern. A source said, “Many people that are brought to work become ill due to dust particles. When this is ignored, they end up coughing blood and taken to hospital.” With a chronic scarcity of medicine there is no cure for those suffering from respiratory illnesses.

Basic safety is also not being met due to lose security at construction sites leading to a passer-by being struck by a falling brick and injured.

Local residents have voiced their discontent regarding prolonged construction projects due to their relocation to neighboring households since April. At the time, North Korean authorities had promised to assign new houses to both the residents who were forced to move and the neighbors who had accommodated them but with no end of construction in sight, tensions between families are rising to the point where the People’s Safety Ministry has to intervene. The winter season will only add to the collective anxiety.

To make matters worse, residents living near construction sites must pay money for project support. Members of the people’s unit must always have 100 to 500 won on hand for project funding.

Local residents are increasingly worn out by the construction that has spanned for over twelve months, since last year’s 150-day Battle. Their suffering has increased due to the unsuccessful nationwide economic and social plan, implemented from April to September of last year by North Korean authorities to revive the failing and chaotic economy.

Read the full story here:
Residents Anxious of Accidents on Construction Sites
Daily NK
Park In Ho


DPRK issues rule on bank deposits

Thursday, July 29th, 2010

According to the Daily NK:

North Korean authorities released a public announcement that they will exchange deposits, consigned to the Chosun (North Korea) Central Bank during the currency redenomination in November last year, into new bills at the rate of 100:1 within the limit of 500,000 won.

Last November the North’s authorities announced that they will exchange the existing denomination, to a limit of 150,000 won per household, to the newly issued bills at the rate of 100:1. They urged people to deposit their remaining cash into the bank.

However, many citizens have refused to follow the instructions after previous experiences with forfeited deposits during the country’s fourth redenomination in 1992.

This measure is designed to work towards curing the hardships of residents caused by the decline in value of individual property since the last redenomination. There are hopes that it will stimulate market activity by increasing the amount of money in circulation, particularly since a downturn in purchasing power amongst the people led to an economic depression.

However, even after the Central Bank’s announcement the people remain apathetic. A source said that, “Prices have risen to similar levels as before the redenomination. Rice now costs over 1,000 won per kilogram; when you get back your deposit of 5,000 won you can only buy five kilograms of rice. It’s meaningless.”

If the state-designated price of rice, around 24 won per kilogram in procurement stores, had been maintained then this measure would be significant. Now the prices have multiplied by 50 and the people say that the measure is nothing but a play on words.

In addition, February saw the authorities hand down a decree to raise all state-designated prices by 100 times to levels known before the redenomination. The decree was not applied to people’s deposits in the bank, a fact that has received criticism from the public. A source commented that, “The authorities actions are nonsense. They raised prices by 100 times but people’s deposits were the same value as last year. It is ridiculous.”

Read the full sotry here:
Bank Deposits Can Be Withdrawn at 100:1 Rate
Daily NK
Park In Ho


DPRK-PRC sign cooperation treaty

Thursday, July 29th, 2010

According to Bloomberg:

North Korea signed an economic and technical cooperation agreement with China today, a week after U.S. Secretary of State Hillary Clinton announced further trade sanctions to halt the regime’s nuclear-weapons program.

Liu Hongcai, the Chinese ambassador to North Korea, and Ri Ryong Nam, the nation’s Minister of Foreign Trade, signed the agreement during a ceremony held in Pyongyang, according to the state-run Korean Central News Agency. It didn’t elaborate.

Clinton announced sanctions that target government officials and the foreign banks that help sustain the North’s weapons industry during a visit to Seoul last week. The U.S. has backed South Korean claims that the North torpedoed one of its ships and has been pressing for an international effort to put more pressure on Kim Jong Il’s regime.

China has so far refused to condemn North Korea for the attack on the Cheonan, which killed 46 South Korean sailors. China accounted for 79 percent of the North’s 2009 international trade, according to the Seoul-based Korea Trade-Investment Promotion Agency. China provides almost 90 percent of energy imports and 45 percent of the country’s food, according to a July 2009 report by the New York-based Council on Foreign Relations.

China’s Foreign Ministry had no knowledge of the agreement and the Commerce Ministry didn’t immediately respond to a fax seeking comments.

Read the full story here:
North Korea, China Sign Agreement for Economic, Technological Cooperation


Luxembourg to track DPRK bank accounts

Thursday, July 29th, 2010

According to the Choson Ilbo:

Luxembourg has promised to cooperate with UN and U.S. financial sanctions against North Korea, Radio Free Asia reported Wednesday.

A spokesman for Luxembourg’s Finance Ministry told RFA that the country is closely watching for any illegal activities by the North using offshore accounts and will take “appropriate legal steps” if it finds them.

He claimed Luxembourg regularly updates domestic laws in accordance with international norms to monitor and punish those involved in illegal activities.

The country is committed to implementing sanctions against the North under UN Security Council Resolution 1874, he added.

In March, the Daily Telegraph said North Korean leader Kim Jong-il has a US$4 billion slush fund stashed away abroad in case he has to flee the North. Kim’s operatives “withdrew the money — in cash, in order not to leave a paper trail — and transferred it to banks in Luxembourg,” it said.

But at the time, the office of the grand duchy’s prime minister said it had no information about North Korean financial assets and there was no need to check. Although Luxembourg is a member of the EU, it is not easy to keep track of bank accounts there because it has a different bank payment and settlement system from other members.

On July 22, Hong Kong started a legal review of Taepung International Investment Group, a North Korean firm founded to attract foreign capital, and other North Korean companies.

Open Radio for North Korea on Wednesday quoted a North Korean source as saying the country’s former ambassador to Switzerland Ri Chol returned to the North in March to make sure Kim Jong-il’s secret accounts overseas are safely handed over to Kim Jong-un, his son and heir apparent.

Read the full story here:
Luxembourg to Help Track N.Korean Bank Accounts
Choson Ilbo


Myanmar military delegation’s visit to DPRK in 2008

Wednesday, July 28th, 2010

I stumbled on a set of photos taken by a Myanmar military delegation which visited the DPRK to shop for military accessories.  The visit was from Nov 21-28, 2008, but there are no KCNA stories which report on the visit.  I am not sure how the pictures made it out of Myanmar, but I am sure somebody got into trouble (UPDATE: See Tad in the comments).  They have been in the public domain for some time I gather, but I had never seen them until recently.

I received the photo set in PDF format with Burmese captions.  The image resolution was not great.  You can see the original PDF here. I had the photo captions translated and matched up with a publication of the group’s membership and itinerary and I even took the time to locate some (though not all) of the group’s destinations on Google Earth. You can see the photos and translated captions here (PDF). It is a large file, so give it a minute to download.  Apologies for any grammatical mistakes in this document.  There are some small typos which I could not be bothered to fix.  I relied on friends (and friends of friends) for all the translation work, but I believe it is all reasonably accurate.

Surprisingly, many of the stops on the delegation’s visit were typical tourist locations: Myohyangsan, West Sea Barrage, Tower of the Juche Idea, Arch of Triumph, Puhung and Yangwang Metro Stops.  But below I identify some of the more unique shopping destinations.

1. The Myanmar military delegation stayed in a “special hotel” for dignitaries behind Kamsusan Palace.  Previous guests have included the former King of Cambodia.  Below are frontal and satellite images:

myanmar-delegation-hotel.jpg myanmar-delegation-hotel-satellitel.jpg

2. The delegation visited a facility called the “Model of Command Post”  (Command Control System and National Air Defense Command System – PLUTO – 4S).  Judging by the satellite imagery, this is a new facility.

3. Judging from the pictures, the delegation seems to have visited the Pipagot Naval Base near Nampo. The South Koreans allege this base was involved in the sinking of the Cheonan.  We are not given this location in the pictures but we do know that the group was near Nampo at the time and that the pictures and satellite imagery of Pipagot are consistent.

myanmar-delegation-pipagot-1.jpg myanmar-delegation-pipagot-2.jpg myanmar-delegation-pipagot-satellite.jpg

4. I believe that the pictures also confirm the Myanmar delegation visited the Onchon Air Force Base.  Again this is because we know the group was near Nampo, the photos and the satellite imagery of the area are consistent, and in the fourth photo below, the Burmese language caption acknowledges the existence of Onchon’s underground aircraft hangar.

myanmar-delegation-onchon-1.jpg mynamar-delegation-onchon-2.jpg myanmar-delegation-onchon-3.jpg

myanmar-delegation-onchon-4.jpg myanmar-delegation-onchon-satellite-1.jpg myanmar-delegation-onchon-satellite-2.jpg

5. And finally, the photos claim that the delegation visited a number of facilities in a place called “Tackwon”:  A Women’s military unit, AA ammunition factory, anti-tank-laser-beam-guided-missile factory, radar factory, and Igla factory.  This location is is actually Taegwan (Daegwan, 대관) in North Pyongan Province (40°13’10.48″N, 125°13’27.32″E).  Of all the facilities mentioned in the itinerary, the only one from which we have ground-level photographs is the “Women’s Artillery Unit” and the  “Radar Factory”.

myanmar-taegwan-1.jpg myanmar-taegwan-2.jpg mynamar-taegwan-3.jpg

As of 12/8/2010 the imagery for this location is in high resolution on Google Earth and we can now pinpoint these locations.  The “Women’s Artillery Unit” is located at 40.218949°, 125.231670° and the “Radar Factory” is located at 40.228778°, 125.237964°.  They are pictured on the left- and right-hand sides of the following image:


Air Koryo launches Shanghai-Pyongyang flights

Wednesday, July 28th, 2010

By Michael Rank

North Korea’s Air Koryo has begun twice-weekly direct flights between Shanghai and Pyongyang, a Chinese website reports.

The flights will run each Tuesday and Friday until October 5, leaving Shanghai at 1700 hours, arriving Pyongyang at 1950 and leaving Pyongyang at 1300 hours with the arrival time in Shanghai given rather vaguely as 16 hours.

It quotes the Korean Travel Agency as saying many Chinese [so-called] volunteers want to visit North Korea for the 60th anniversary of the Korean war, while August-October is the Arirang [Mass Games] season, so now is the time to come.

The report also says there is strong interest in visiting North Korea in eastern China around Shanghai, but it until now passengers had to change planes in Beijing or Shenyang which added to the cost and was inconvenient.

It says the first flight was on July 16 and gives the flight numbers as JS522/21. It also gives phone numbers, etc for tourists interested in booking a seat.


ROK raises barriers to trade with DPRK

Wednesday, July 28th, 2010

According to Yonhap, the South Korean government is subsidizing firms as they transition away from trade with North Korean firms:

South Korea will provide low-interest loans worth a total of about 60 billion won (US$50 million) to companies troubled by a government ban on trade with North Korea, an official said Monday.

The loans are aimed at alleviating the financial trouble of the companies, which started when South Korea implemented a ban in May in retaliation for the March 26 sinking of its warship near the Yellow Sea border with North Korea, Unification Ministry spokesman Chun Hae-sung said in a briefing.

“Each company will be eligible to receive a loan of up to 700 million won with a 2 percent interest rate, based on the volume and type of trade the companies have been doing for the past year,” he said, adding the measure will take effect next week.

Hundreds of companies had to stop trading with North Korea after South Korea announced that a multinational investigation found the communist state responsible for the Cheonan sinking, which claimed the lives of 46 sailors.

Yonhap also reports  South Korean companies operating in the DPRK will once again be banned from shipping goods and materials for consignment trade with the DPRK from early next month:

The application deadline was set for Aug. 10, when the temporary lift of the existing ban will end, the ministry said.

On May 24, South Korea prohibited all shipments to the North as part of punitive actions against the communist neighbor it blamed for a deadly torpedo attack on one of its warships. The March 26 sinking in the Yellow Sea killed 46 sailors.

More than 500 hundred South Korean companies were doing consignment trade with the North, in which they send raw material and bring back processed goods. Such trade amounted to US$254 million in 2009.

Seoul’s shipment ban seriously affected South Korean businesses operating at the North’s border city of Kaesong, where some 120 firms from the South operate manufacturing lines using the North’s relatively cheap labor costs.

The companies’ complaints forced the government to temporarily lift the ban, on condition that the business contracts were made before May 24.

Read the full stories here:
S. Korea to offer loans to companies banned from trading with N. Korea

S. Korea to re-impose ban on materials shipments to N. Korea after temporary lift