Archive for April, 2011

Kim Jong-il actively making field guidance visits in the economy sector

Friday, April 29th, 2011

Institute for Far Eastern Studies (IFES)
(NK Brief 11-04-27)

Kim Jong Il is continuing to make field guidance visits around Ryanggang and the Northern Hamgyong Province.

The Rodong Sinmun reported on April 23 that Kim Jong Il visited Rajin Shipyard. Rajin Shipyard is known for producing ships necessary for advancing fishing, marine transportation, and foreign trade industries. Chairman Kim emphasized the importance of self-reliance, especially on the need to adopt the latest science and technology and partake in the mass technical innovation movement by implementing CNC (Computer Numerical Control) technology into ship design, assembly, and manufacturing.

According to the Korean Central News Agency (KCNA) on April 20, Kim also gave field guidance at Kim Chaek Iron and Steel Complex and newly built Susongchon General Foodstuff Factory in Northern Hamgyong Province. The Rodong Sinmun on April 22 also reported that the DPRK leader provided field guidance at Hyesan Youth Mine in Ryanggang Province. At the Hyesan Youth Mine, he said “The major project of the Party is to complete the technological modernization to radically increase the production of mineral ores.”

At the recent visitation to Songjin Steel Complex at Kim Chaek City, Kim once again emphasized self-reliance. Kim stated, “The self-reliance of the metal industry is the permanent path of our economy.” He further added, “Despite the imperialist’s sanctions and blockade, we reached the highest level of metal production from the revolutionary spirit of self-reliance. The Party’s traditional slogan of self-reliance is the only weapon of victory leading to our nation’s triumph and prosperity.”

North Korea announced that Songjin Steel Complex established Juche steel production system at the end of 2009. At the complex, Kim gave praise to the facility by saying, “The completion of steelmaking process of Juche steel with our own technology is a greater victory than the success of a third nuclear test.”

However, Kim Jong Un, the vice-chairman of the Central Military Commission and the named successor of the DPRK was not included in the list of entourage in the recent field guidance given by the senior Kim at Kim Chaek Iron and Steel Complex, Hyesan Youth Mine and Najin Shipyard.

Kim Jong Il is reported to have conducted 35 official activities in the first quarter of 2011. Although it is a decrease from last year’s number of 41, it is still higher than the average of 21(1999-2010) in the first quarter. The breakdown of the activities of Kim is as follows: 12 economy-related visitations, 10 attendances at performances, 9 inspections at military bases or other military related activities and lastly, 4 meetings with diplomatic delegations.

The economy-related inspections were the highest in the first quarter since 2009. This trend reflects Kim’s intentions of concentrating on inspecting the economic sectors early on in the year to encourage results in this sector. A notable point is that self-reliance and incorporation of CNC was mentioned at all industrial facilities that Kim inspected.

Among the entourage, Kim Jong Il’s sister, Kim Kyong Hui, director of the Light Industry Department of the Korean Workers’ Party (KWP), accompanied the leader 28 times on his recent inspections. Kim Ki Nam, the KWP Secretary and Director of Publicity and Information Department made 24 trips, Kim Jong Un and Tae Jong Su, KWP Secretary and Director of the General Affairs Department made 22 trips each, and Chang Song Taek (Jang Song Thaek), the husband of Kim Kyong Hui and vice-chairman of the National Defence Commission, is known to have made 20 accompaniments.

Recently, North Korea has been making changes in the planned economy by naming the new Central Bank chief, upgrading the State Price Bureau to the State Price Commission, and establishing the State General Bureau of Economic Development.

Kim Jong Il has conducted a total of 161 official activities last year, his most active year since the official launch of the Kim Jong-Il regime in 1998.


SPA designates Kumgang resort intl tourism center

Friday, April 29th, 2011

UPDATE: DPRK to Set Up Special International Tour Zone at Mount Kumgang
Institute for Far Eastern Studies (IFES)
NK Brief (11-05-2)

According to KCNA news agency, the Presidium of the DPRK Supreme People’s Assembly issued a decree on April 29 to set up a special zone for international tours at Mount Kumgang. It reported the special zone in Kangwon Province would include Kosong-eup and Onjong-ri of Kosong County; Samil-po, Hae-Kumgang, and Nae-Kumgang areas in Kumgang County, and Thongchon County.

The Central Tourist Guidance Agency expressed its intentions of increasing new tourist destinations depending on the progress made in the special zone. In addition, it also announced the annulment of October 2002 decree on the Kumgang Special Tourism Zone, which rescinded the exclusive rights of Hyundai Asan.

Previously on April 8, the DPRK’s Korean Asia-Pacific Peace Committee (KAPPC) informed Hyundai Asan that it would retract the monopoly rights of Hyundai. Instead, it expressed plans of entrusting the tours from the North through foreign businesses while Hyundai will continue to lead the tours from the South. The North announced the Mt. Kumgang tours will be renewed through appropriate national measures.

The KCNA explained, “The DPRK’s sovereignty will be exercised in the special tour zone.” Additionally, the DPRK is encouraging free investment in the special zone by corporations, individuals and other economic bodies and such investments are protected by law.

On the May issue of South Korean monthly magazine Minjog 21, the Committee of Investment and Joint Ventures of the DPRK and Kempinski Group was reported to have reached an agreement on its entrance into the Kumgang tourism project. The magazine also reported the Kempinski Group’s plans of modernizing the Wonsan Airport, development of Wonsan City into a resort town, and building roads connecting Wonsan with Kumgang.

Kempinski Hotels is a luxury hotel group known for its five-star hotels and resorts and recently expanded into Asia with current projects underway with India and China. Kempinski is majority owned by the Crown Property Bureau of Thailand and the royal family in Bahrain. Once the Kempinski Hotel is completed in Wonsan, it is expected to become an international resort town linked with Mt. Kumgang Special Zone.

The Mt. Kumgang tours from the North are expected to be managed by the Kempinski Hotels while the tours from the South will be still managed from Hyundai. An interview on April 13 by Ri Jong Hyok, vice-chairman of the KAPPC commented, “The buildings and facilities built by Hyundai will come to ruins if left at its current unoccupied stage. This is the reason why we are attempting to restart the tours, but only until the South decides to resume the tours.”

The Committee of Investment and Joint Ventures was upgraded from Joint Venture and Investment Guidance Bureau last July, becoming a central state organization in charge of all projects related to investments and joint ventures from overseas.

ORIGINAL POST: According to Yonhap:

North Korea’s rubber-stamp parliament said Friday that it will set up a special zone for international tours of the country’s troubled mountain resort in an apparent move to induce foreign investment.

The North “will encourage free investment in the development of the special zone by corporate bodies, individuals and other economic bodies and will protect by law the invested capital and properties and income and other profits to be gained through business,” the North’s Supreme People’s Assembly said in a decree carried by the country’s official Korean Central News Agency (KCNA).

The legislature said North Korea’s sovereignty will be exercised over the zone that includes several areas on Mount Kumgang, a scenic resort on the country’s east coast.

It also said the agency in charge of tourism will take relevant measures to increase new tourist destinations, depending on the progress in the special zone development. No details were provided.

Lee Jong-joo, a spokeswoman for South Korea’s Unification Ministry handling inter-Korean affairs, said the North’s move appears to be aimed at attracting foreign capital to develop the resort.

A spokesman for Hyundai Asan, a key South Korean tour operator in the mountain resort, said his company had no immediate comment on the North’s announcement. He asked not to be identified as he was not authorized to speak to media.

The decree came weeks after Pyongyang terminated exclusive tourism rights for Hyundai Asan, citing skepticism over the resumption of the joint venture.

The two Koreas launched the joint tour program in 1998 as part of moves to boost cross-border reconciliation and cooperation, providing a legitimate source of hard currency to the cash-strapped North.

However, Seoul suspended the tour program in 2008 when a female South Korean tourist was shot dead after straying into an off-limits military zone near the resort.

Pyongyang claims it has done everything to shed light on the shooting and guarantee the safety of future tourists, but Seoul says it has yet to receive a formal apology for the shooting or government-to-government promises to enhance safety.

Here is the KCNA statement:

Pyongyang, April 29 (KCNA) — A special zone for international tour of Mt. Kumgang will be established in the DPRK.

A decree on this decision was issued by the Presidium of the DPRK Supreme People’s Assembly on Friday.

According to the decree, the special zone is to be set in the area of Mt. Kumgang in Kangwon Province and the zone will include the township and some areas of Onjong-ri in Kosong County, Lagoon Samil, Sea Kumgang area, Inner Kumgang area of Kumgang County and some areas of Thongchon County.

The DPRK sovereignty will be exercised over the zone.

The DPRK will encourage free investment in the development of the special zone by corporate bodies, individuals and other economic bodies and protect by law the invested capital and properties and income and other profits to be gained through business.

The Central Tourist Guidance Agency shall take relevant measures to increase new tourist destinations, depending on the progress made in the SZ development.

The decree of the SPA Presidium on “Setting Up Mt. Kumgang Tourist Zone in the DPRK” issued on Oct. 23, 2002 is no longer valid.

Aside: So there are two DPRK agencies that deal with tourism: KITC and the “Central Tourist Guidance Agency”?

Historical information:

The Kumgangsan resort was the scene of a terrible tragedy, the shooting of a South Korean tourist.  Allowing a joint-Korean investigation of the murder became a precondition by the South Korean government for resuming tourism to the resort.

On March 4th 2010, the DPRK first threatened to revoke contracts with the South Korean Hyundai-asan stating that a future guarantee of safety was sufficient for resuming tourism.

Later in th month, Hyundai-asan’s chief offered to resign.

In April 2010, the DPRK “seized” the Hyundai properties in the Kumgangsan resort.

Shortly afterwards, Chinese tourists began arriving at the resort (here and here).

The Donga Ilbo reported that the NDC took over the properties and put them in the Korea Taepung International Investment Group portfolio.  If the property was under Taepung control and has now been put under normal ministerial control, then this signals that Taepung’s sun might have set.

If possible, I would expect that Hyundai-asan will attempt to bring suit in South Korea against whichever company chooses to set up in the zone.

Read the full sotry here:
N. Korea to set up special int’l tour zone at Mount Kumgang


Some more changes in Wonsan…

Thursday, April 28th, 2011

Pictured above is the Wonsan Revolutionary Museum (source here). Under the Japanese colonial government this site was the home of the Wonsan Customs Office.  A visitor posted some very helpful information:

Former Wonsan Customs Office, built in 1907 by the Japanese. This is a reconstruction – the original building was destroyed during the Korean War. It houses an exhibition about the “triumphal return” of Kim Il Sung to Korea on September 19th, 1945.

In the early 1970s, when the personality cult around the “Great Leader” reached a peak, the sites of his “triumphal return” were refurbished as “revolutionary sites”. Unfortunately, most of them had been destroyed during the Korean War or the postwar reconstruction, so the propaganda department had to put up replications. Thus, Wonsan Customs Office, the former railway station, an inn and a Japanese residence were carefully reconstructed following the original design. It is a certain irony of history that all these buildings (which had been designed and used by the Japanese) now serve as silent witnesses of Korea’s colonial past to the knowledgeable observer.

Below is a satellite picture of the facility on Google Earth taken on December 23, 2007 (39.168226°, 127.439217°):

The museum was an important part of the narrative of Kim Il-sung’s triumphant return to Korea after World War II.  It sits right next to Pier No. 2 where Kim Il Sung disembarked on September 19th, 1945.  A new monument to this pier was apparently installed in September 2008,  however, according to new satellite imagery, both the museum and the monument vanished sometime in 2009.

The above satellite picture is dated 2009-10-3.  Neither the museum nor the monument remain.

KCNA only mentions the museum once.  Here is the article dated 2002-7-15:

The Wonsan revolutionary site is the first stop in President Kim Il Sung’s triumphal return home after the country’s liberation. Located in Wonsan city, Kangwon Province, the revolutionary site consists of the Wonsan Revolutionary Museum, lodgings and former Wonsan railway station and Tongyang (Orient) Hotel, etc. In the museum there are historical materials and relics and a room where the president presided over the first meeting to carry out the three tasks of building the party, the state and the army.

At that conference room, he had a historic talk with political workers to be dispatched to local areas about the building of new Korea in September 1945.

A monument to his revolutionary activities was built at Wonsan railway station where a train used by him is preserved in the original state. There is also a monument of a poem that tells about his revolutionary exploits and noble virtues.

It will be interesting to see what they do with the space.

Wonsan military elite compound updated: (39.188339°, 127.478190°)

The picture on the left is dated 2002-11-11. The picture on the right is dated 2009-10-3.

Additionally, some of the housing units bordering the Wonsan AFB runway have been upgraded.

In a previous post I pointed out the growth of Wonsan’s markets.


PRC claims to have helped build Pyongyang Metro

Thursday, April 28th, 2011

According to the Choson Ilbo:

China said that North Korea has been at the forefront of its international foreign aid efforts which it has been carrying out for the past 60 years.

Speaking at a press conference on Tuesday, China’s Vice Commerce Minister Fu Ziying spoke in detail for the first time about the aid his country has given to the North.

He said that China helped to build Pyongyang’s public infrastructure such as its subway system, but he emphasized that no cash aid has been given.

Beijing issued a white paper last week that outlines its foreign aid policy to Africa and Asia.

Read the full story here:
China Releases Details on Aid to N.Korea
Choson Ilbo


ROK denies labor groups’ visit to DPRK

Thursday, April 28th, 2011

According to Yonhap:

South Korea has turned down a request by two umbrella labor unions to visit North Korea for talks with their counterparts, an official said Thursday, attesting to ongoing hostilities between the sides.

South Korea’s two main umbrella unions — the Korean Confederation of Trade Unions (KCTU) and the Federation of Korean Trade Unions — applied for permission earlier this week to send four of their members to the North Korean border town of Kaesong for talks with their northern counterparts. They hoped to discuss possibilities for another general meeting among their members, the last of which was held in 2007 before inter-Korean relations grew tense.

South Korea’s Ministry of Unification, which handles inter-Korean affairs, rejected the visit planned for Thursday, citing a breach of regulations enforced after last year’s deadly sinking of a South Korean warship. Seoul blames Pyongyang for the March torpedo attack that killed 46 South Korean sailors, an allegation that the North vehemently denies.

“Not only is it required by law to apply for permission at least a week in advance, but our nationals are currently prohibited from visiting North Korea” under a set of post-attack measures that also ban cross-border trade, a ministry official said on customary condition of anonymity.

The two labor groups were informed of the decision on Wednesday, he added.

In protest, the KCTU held a rally outside the main government complex in Seoul earlier in the day, saying the ministry denied “the earnest request of workers from the South and North who long for peace on the Korean Peninsula.”

“We will achieve a South-North workers’ general meeting at all costs even if we can’t be together in one place,” the KCTU said in a statement, indicating it may issue a joint statement with its North Korean counterparts after holding separate meetings in Seoul and Pyongyang.

The South Koren government has been allowing some private aid to be delivered to th DPRK.

Read the full story here:
Gov’t rejects labor groups’ request to visit N. Korea


Chinese in DPRK, Koreans in PRC

Thursday, April 28th, 2011

According to Yonhap:

The number of North Koreans officially visiting China reached 28,600 in the first three months of the year, up 35 percent from the same period last year, a news report said Wednesday.

More than half of them visited China to work in either factories or restaurants, while 6,000 people visited China for conferences or businesses, the Voice of America reported, citing Chinese government data.

The VOA also said 700 North Koreans toured China for sightseeing, while fewer than 100 North Koreans visited China to meet relatives or friends and 7,300 visitors had other purposes. The report did not elaborate.

The data did not include information on North Koreans staying illegally in China after defecting, the VOA said.

Tens of thousands of North Korean defectors are believed to be hiding in China, a major land route through which many North Korean defectors travel to Thailand and other Southeast Asian countries before resettling in South Korea.

According ot the Choson Ilbo:

Chinese tourists will start visiting Russian and North Korean cities without visas on Wednesday under a formal agreement between Beijing and the two countries. The tour course starts in the Chinese border city of Hunchun in the lower reaches of the Duman (Tumen) River and goes on to eastern Russia and the Rajin-Sonbong special economic zone in North Korea.

A group of 21 tourists left Changchun, the capital of northeast China’s Jilin Province, on Tuesday for the Hunchun. Travelers will then visit Slavyanka, Vladivostok and Khasan, the official Xinhua news agency said. They then go to North Korea by train and tour the cities of the Duman River and the Rajin-Sonbong area.

The four-day tour starts every Wednesday and costs 2,300 yuan (approximately W390,000). Only Chinese travelers are eligible for the visa-free arrangement.

Read the full stories below:
Number of N. Korean visitors to China rises in first quarter

Chinese Tourists Visit Russia, N.Korea Visa-Free
Choson Ilbo


EU restrictions on Air Koryo

Tuesday, April 26th, 2011

According to the Korea Herald (4/26/2011): The EU has announced it is maintaining the policy established last year.

Antiquated North Korean airliners have been banned from operating in European countries for six years in a row as part of the European Union’s prohibition on 21 states that have failed to meet its safety standards, a U.S.-funded private radio station reported Tuesday.

Under the EU ban, Pyong­yang’s Air Koryo can only fly two new airliners it purchased from Russia last year to the E.U. member states, according to Radio Free Asia.

Read the full story here:
EU prohibits N. Korea’s aged planes for six years
Korea Herald

According to the Daily NK (3/31/2010): Recently purchased Tupolev’s allowed to fly to EU.

Air Koryo, North Korea’s flag carrier, has been given back partial permission to fly in EU airspace following the quarterly update to the EU’s list of banned airlines.

The lifting of restrictions against the airline is highly conditional, only allowing for entry by two of the airlines’ mostly Soviet-era fleet.

According to European Commission press release IP/10/388 which was released yesterday, March 30th;

“With this update, the Air Koryo licensed in the Democratic People’s Republic of Korea, subject to an operating ban since March 2006, is allowed to resume operations into the EU with two aircraft which are fitted with the necessary equipment to comply with mandatory international standards and following appropriate oversight by its authority. The rest of its fleet remains barred from operating into the EU.”

The two aircraft permitted to operate in EU airspace are a Tupolev Tu-204-300 delivered to Air Koryo in 2007 and currently serving on the Pyongyang-Beijing route, and a Tu-204-100B.

European Commission Vice-President Siim Kallas also said in yesterday’s statement, “Safety comes first. We are ready to support countries that need to build up technical and administrative capacity to guarantee the necessary standards in civil aviation. But we cannot accept that airlines fly into the EU if they do not fully comply with international safety standards.”

It is unclear whether Air Koryo plans to exercise its right to enter the EU, though there have been rumors that it plans to begin some kind of service between Pyongyang and Berlin.

Read the full article here:
Two Air Koryo Jets Back in EU Good Books
Daily NK
Chris Green

According to Yonhap (3/25/2010):

The European Union is expected to relax its four-year ban on the North Korean state carrier, Air Koyro, from all operations in its member states, a source at the European Commission said Wednesday.

Air Koryo has been on the EU’s blacklist of airlines failing to meet international safety standards since the list was first put together in 2006. Currently, five individual carriers, including Air Koryo, and all carriers from 15 countries — 228 companies in total — are on the blacklist.

The EU’s Air Safety Commission met last week to review the list and recommended that the restrictions on the North Korean airline be relaxed to “Annex B,” which means that the carrier can operate in the region under “specific conditions,” the source said.

Air Koryo officials attended last week’s meeting to brief the commission on the safety measures they have taken so far, the source said. It was unclear what conditions would be imposed for Air Koyro if the ban is relaxed.

The Air Safety Commission is an advisory panel without decision-making power, but its recommendations are usually reflected when the blacklist is updated. The list is revised three times a year, with this year’s first update slated for late this month.

Read the full story here:
EU expected to relax ban on N. Korean carrier Air Koryo

According to Yonhap (1/9/2010):

Air Koryo, North Korea’s air carrier, has been banned from offering flight services to Europe for a fifth year after having failed to meet international safety requirements, U.S. international broadcaster Radio Free Asia (RFA) said Saturday.

The North Korean carrier has been involved in the list of carriers prohibiting from flying to the 27 members of European Union that was released this year, RFA said.

Air Koryo reportedly has a fleet of about 20 planes made between the 1960s and 1970s in the Soviet Union.

Read the full story here:
N. Korean airline banned from flying to Europe


What military unit is most desired by DPRK soldiers?

Tuesday, April 26th, 2011

According to the Daily NK:

Which military unit is the most popular for North Korean soldiers about to serve their ten-year term in the army?

In the end, the answer is undoubtedly the Escort Bureau.

Although all North Korean middle school students submit an application, in which they write which unit they want to serve in to their city or county’s Military Mobilization Department before they graduate, the Escort Bureau is literally the only corps they “want.” Placement in the bureau, however, depends entirely on the applicant’s family background.

Only those students who have passed the military physical exam and have a good family background are allowed to participate in the two-month educational training sessions that are offered when students graduate from middle school around the age of seventeen. These sessions are offered to recruits at the training center of each unit or division and differ according to the branch of the military that the recruit will be serving in. However, the branches have in common the fact that if a recruit comes from a family of good political or economic standing or has a strong family background, he will be able to serve in a favorable unit.

Once soldiers serve in the Escort Bureau, they can live in Pyongyang and, if lucky, be allowed to remain in the capital after their discharge from the military. Additionally, they may receive a recommendation for college due to Kim Jong Il’s especial consideration for discharged soldiers from the Escort Bureau.

In addition, since it is a well-known fact that discharged soldiers from the Escort Bureau have good family backgrounds in politics and the economy, they become sought after by women as desirable bridegrooms.

The military attire of the Escort Bureau, including its hat, uniform, shoes, and belt, for even regular privates are furthermore special on a level similar to that of generals’ attire.

When they are discharged from the army, these soldiers must pledge not to expose what they have seen, listened to, and felt to the rest of society.

Lee Young Kuk recalls the time when he was being discharged from the army in his book I Was Kim Jong Il’s Bodyguard (Zeitgeist 2004), “When bodyguards are discharged from the army, they have to attend a debriefing lecture and sign a written pledge with their thumb, avowing that they will never disclose the secrets they know about Kim Jong Il .”

The border guard units dispatched to Shinuiju, North Hamkyung Province, Yangkang, North Hamkyung Provinces, and other border areas have also emerged recently as units popular with incoming recruits. The head officers of the border guard even come directly to the Military Mobilization Department of each area to select recruits for themselves.

Parents tend to do their best to have their children serve in border guard units through the use of human networking as well as bribes. The reason for this is that soldiers in border guard units are able to earn enough money to afford a wedding after their discharge from the military through the taking of bribes from traders and smugglers.

Choi Cheol Ho, who served in a border unit stationed in Manpo, Jagang Province, and defected in 2007, stated that, “Parents try to send their children to border units even if it means they must give up all of their property because they believe that the cost will be worth it for their children after just three years in the border unit.”

He added that he also offered a substantial bribe in order to enter the unit.

The next most popular areas of the military are the air force and navy. In order to serve in both the air force and navy, applicants must have a good family background and be in good health. If any of their relatives have crossed over to South Korea, they are automatically disqualified from serving in the air force and navy.

On the other hand, if a suspected criminal has relatives serving in air force or navy, they may be able to escape punishment.

Kim Dong Il, who defected to the South from Hamheung, South Hamkyung Province, in 2009, testified to this situation, “A friend of mine, Cheol Nam, went through a preliminary trial on suspicion of selling ‘Bingdu’ (methamphetamines) and was sentenced to a few months in a labor-training camp, which is like a detention center, while his accomplice was sentenced to three years in a reeducation camp, which is tantamount to being sentenced to time in a regular prison in most countries. The reason for the leniency Cheol Nam was shown was that his brother was a pilot in the air force.”

Some applicants attempt to serve in the Civilian Affairs Administrative Police Unit, which is located in the Panmunjom area and along the border with South Korea, out of curiosity.

The Civilian Affairs Administrative Police Unit and light infantry are special branches, so life for these soldiers is tough. However, soldiers discharged from these units are often able to receive a recommendation to enter a university after their military service.

“While I was serving in the Civilian Affairs Administrative Police Unit, I was able to listen to South Korean broadcasts. Therefore, we had to sit through ideology lectures every day,” Park Cheol, a defector who came to South Korea in 2009, recalled about his military service.

He added, “After they discharge soldiers from these units, the authorities send them to local universities. If they want to enter a university in Pyongyang, their family background must be superior to that of others. Entering even a regular university is quite advantageous because most discharged soldiers are sent to mines or other rural areas.”

Those who are rich but have been deprived of the chance to send their children to popular and advantageous military units because cadres’ children have taken all of the spots in these units tend to choose a different route, which is to have their children enter an infantry unit in Pyongyang. To achieve this, they need to offer bribes to the Military Mobilization Department. Units in Pyongyang have better food provisions than those in the provinces, and parents also have the chance to see the capital when they visit their children.

Read the full story here:
What Military Unit Is Most Sought After by North Korean Soldiers?
Daily NK
Lee Seok Young


Inter-Korean mining projects suspended

Monday, April 25th, 2011

Pictured above on Google Earth: Ryongyang Mine Ore Dressing Plant (Pre-renovation)

According to the Hankyoreh:

“We invested a lot of money, and now we cannot even find out the present status.”

Korea Resources Corporation (KORES) President Kim Shin-jong let out a deep sigh as he explained about the development status of the Hwangnam graphite mines in North Korea at a forum held by the corporation on Apr. 15. The event was organized amid a sense of profound concern, with a number of North Korean mineral resources development efforts running aground amid worsening inter-Korean relations.

According to accounts Sunday from officials with the Ministry of Unification and KORES, South Korea is currently involved in a total of ten North Korean coal mine development efforts. Investment for seven of these comes from the government, including the ministry and KORES, while the other three involve private sector investments. None of them has followed their original schedule since the Lee Myung-bak administration came into office.

The most representative case is that of the Hwangnam graphite mines. This was the first North Korean resource development effort undertaken as an inter-Korean economic cooperation venture, and progress was quick enough that the graphite produced there was being imported into the South right up until the Lee administration came into office. Now, the situation has changed completely.

A company official conveyed the situation by saying, “Since 2008, the Hwangnam Coal Mine has been forgotten completely.”

The situation is the same for the Komdok, Ryongyang, and Taehung coal mines in the area of Tanchon, South Hamgyong Province, an effort spearhead directly by the Unification Ministry.

An official with the ministry said, “We had already finished the third feasibility examination by February 2008, but since then there has been no further progress as inter-Korean relations have worsened.”

The Ryongyang mine contains large deposits of the rare metal magnesite, a material South Korea does not produce.

Exploration has also been effectively halted at the Ayang mine in Sinwon County, South Hwanghae Province, where KORES completed an on-site investigation following the signing of a September 2007 memorandum of understanding on mineral development with North Korea, and the Pungchon mine in Yonan County, South Hwanghae Province, where the first inter-Korean joint drilling effort was undertaken in October 2008.

The situation has been particularly severe for the privately invested projects.

An official with one company engaged in a fertilizer effort said, “We carried out three rounds of working-level discussions in North Korea and China regarding the mining of apatite, but all of them have been suspended since the current administration took office.”

“If these projects had just gone ahead properly, we would not have had to buy apatite at high prices from faraway places like Nauru,” the official lamented.

Apatite, one of the key ingredients in fertilizer, is one of the mineral resources for which South Korea depends entirely on imports.

With South Korea’s development projects in North Korea at a standstill, China’s have taken flight. According to KORES figures, Chinese exports of North Korean military, which stood at the $300 million level in 2005, showed a sharp rate of annual increase to reach more than $900 million in 2010. In the space of five years, the amount of North Korean minerals purchased by China rose more than threefold. Industry observers are calling the situation “hoarding” of North Korean minerals by China. Government authorities are known to have determined that even strategic minerals listed as forbidden for overseas export, including uranium, have been going into China since late last year.

The problem is that the situation is becoming more severe as time passes. Because North Korea’s mineral transportation infrastructure of highways and ports is still deficient, the focus has been on developing minerals in areas near the North Korean-Chinese border, but there is a strong chance that China will extend its reach further into the country going ahead.

“China wants to seize North Korea’s mineral resource industry through expanded infrastructure cooperation with North Korea,” said Jeong U-jin, head of the natural resource strategy office at the Energy Development Institute.

Many observers are saying that thawing inter-Korean relations is an urgent priority if South Korea is to take full advantage of the value of North Korean mineral resources. Noting that the potential value of North Korean mineral resources is as much as 7 quadrillion won, a KORES official said, “Suffice it to say that as improvements in inter-Korean relations get put off, North Korean resources will all head overseas.”

According to the North Koreans, production at the mines is up nonetheless!

Read the full story here:
Inter-Korean coal mine projects suspended during Lee administration
Ki Kyung-rok


Lankov on private farming in the DPRK

Monday, April 25th, 2011

Pictured above on Google Earth: hill-side farming plots in the DPRK

Lankov writes in the Korea Times:

Every visitor to North Korea who has passed through mountainous areas in the country has seen some peculiarities of the modern North Korean landscape.

Somewhere high in the mountains one can see small fields of strange, irregular shapes which look quite different from the orderly, rectangular shapes of the cooperative farm fields. If asked about these fields, North Korean minders will probably avoid giving a straight answer. This is understandable ― even though the existence of such fields is tacitly accepted by the authorities, from a purely ideological view, which minders are obliged to present, these fields are not supposed to exit.

We are referring to sotoji, private plots, which have been spreading across North Korea over the last 15 years and now play a major role in food production in North Korea.

It would be only a minor exaggeration to say that in his policies, Kim Il-sung tended to be more Stalinist than Joseph Stalin himself. He took the state-run economy to its natural (or unnatural) extreme and collective farming was no exception. Once upon a time, the North Korean peasantry was herded into so-called “agricultural cooperatives.” The description of these institutions as cooperatives is actually misleading because they were essentially state-run farms, where farmers had basically no influence over management or income distribution.

But North Korea has one important peculiarity: unlike Stalin’s Soviet Union, in North Korea farmers were not allowed to cultivate even small private plots. In the Soviet Union a farming family would be allowed a plot which might have been as large as a few thousand square meters. In North Korea, the maximum size of an individual plot was limited to a paltry 100 square meters – barely enough to grow some pepper and spice and clearly not enough to make any meaningful economic difference.

This was done on purpose ― North Korean policy planners assumed that farmers, being deprived of any alternative means of existence, would work more efficiently in state-owned fields. In agricultural cooperatives farmers essentially worked for their daily ration ― one full day of work was rewarded with 700g of grain (similar to the ration of the average worker in a city).

This system was never especially efficient but for a few decades it managed to exist and function somehow. However the collapse of the North Korean economy in the early 1990s produced a devastating blow to state-run agriculture. In 1995 and 1996 the harvests were around half of what was necessary to keep the North Korean population alive, so many North Koreans starved to death (the exact numbers are disputed but it seems that between 500,000-1,000,000 perished) and the survivors began to look for ways to make a living outside the state-run-economy. Predictably enough, farmers did what one would expect them to do ― they began to develop their own food production.

Unlike their Chinese counterparts, the North Korean elite refused to disband the state-run agricultural cooperatives. Therefore farmers had no choice but to acquire land on their own, outside of what would be normally considered arable land. Usually they went to the mountains, since all arable land in the valleys had long been cultivated within state-run farms.

In some cases, farmers would make agreements with local forestry departments whose officials agreed to turn a blind-eye to unlawful activities in protected forest areas. In some other cases the local authorities tolerated and even encouraged the sotoji cultivators.

A quick look through satellite images of North Korea shows the widespread nature of the sotoji phenomena. In some counties near the Chinese border, the percentage of land under the cultivation of sotoji owners roughly equals that under cultivation by state-run farms. In other areas the level of private production may be smaller but it seems clear that private food production makes a major contribution to North Korea’s food supply today.

Indeed, in the above-mentioned borderland counties, sotoji fields seem to produce as much as 60 percent of all food sold on the local market. This might be an exception because the current county in question is covered by mountains and contains a lot of places where people can hide from police. Nonetheless sotoji produced food is found widely in the country’s markets.

In the last 15 years or so, North Koreans have developed a large and successful private economy of which the sotoji phenomenon is an important part. However their cultivators are not high on the newly emerging social ladder. Sotoji are usually tilled by people who do not have the money, skills or inclination to start a more conventional business. Some of them are essentially market-orientated enterprises which make profit but the majority lose money.

Nonetheless, the random new shapes of North Korean mountains nowadays are yet another reminder of how much the country has changed over the last two decades.

Read the full story here:
Sotoji — small private plot
Korea Times
Andrei Lankov