Archive for May, 2011

The blueprint for the development of the Rajin-Sonbong (Rason) economic and trade zone is released

Tuesday, May 31st, 2011

Institute for Far Eastern Studies (IFES)

On May 23, the DPRK released the “Outline of DPRK-China Joint Development Plan for Rason and Hwanggumpyong Economic and Trade Zone” consisting of detailed blueprint of two countries’ recent bilateral joint development deal.

According to Yonhap News, China and North Korea are planning to turn the Rason and Hwanggumpyong areas into a comprehensive industrial complex of tourism and manufacturing producing automobiles, mobile phones, agricultural and chemical products.

In addition, the Law on Rason Economic and Trade Zone and the Special Law on Hwanggumpyong Zone will adopt market economy principles which will permit foreign bank investments and independent contracts between corporations and workers. Although the development plans are not definite yet, it is significant since it hints at North Korea’s shifting position on opening up and economic development.

The bilateral development plan between Pyongyang and Beijing will stretch from Rajin, Sonbong, Ungsang, to Gulpo areas.

In the Rajin area, four major industrial complexes will be constructed consisting of storage, logistics and distribution centers, state of the art technology, and equipment, clothing and food manufacturing. In the Ungsang area, comprehensive a wood processing complex will be built while in the Gulpo area, a high-efficiency agriculture zone will be constructed. In the Sonbong area, truck manufacturing factories will be built along with other metal producing factories. In Rajin, docks will be built for ship building and maintenance.

There are also plans of developing the Rason area into an international tourism zone. There are immediate plans to build basic tourism infrastructure such as hotels, resorts, and roads for sightseeing. The long-term goal is to build a grand Northeast Asia tour course, which will include Yanbian of China; Rason, Chongjin, Mount Chilbo and Mount Kumgang of North Korea; Vladivostok and Sakhalin of Russia; Sapporo and Nakata of Japan; and Sokcho and Busan of South Korea.

As for the Hwanggumpyong area, four major industrial complexes will be established: one each for information, tourism and culture, modern protected agriculture, and food processing. More specifically, Hwanggumpyong will connect information between Hwanggumpyong and the border city of Dandong in China. In addition, culture and tourism will be developed through promotion of Arirang and other cultural performances and exhibitions.

As for the high-efficiency agriculture zone, a modern agriculture technology research center will be established and China-DPRK joint markets will be set up to serve as a central commerce center.

To assist with the industrial development in the area, land and sea routes will be developed where roads and railroads will be built and Rajin will be upgraded to a comprehensive and multi-purpose port.

There are additional plans of constructing a coal power station to replace the current thermoelectric power plant in Sonbong. There is also discussion of possibly developing other alternative energy plants, such as wind and solar. There are also plans of building basic facilities of mobile telecommunication to promote international communication.

Hwanggumpyong is an island on the Yalu River and the new developments in building ports and roads along with distribution network, Internet, and mobile telecommunication will become a link connecting North Korea with China.

Pyongyang is pursuing development through multiple cooperation channels. It has plans of establishing three-tiered cooperative system with joint management committee, joint development management committee and investment development corporation with Beijing. These committees will be responsible for amending and negotiating any issues that may arise during the process of development and supervise various areas of investments, enterprises, and environment and as well as inspect land and commerce development and basic facility operations.

Both Pyongyang and Beijing will attract foreign investments through market-based tax and financial policies in the Rason and Hwanggumpyong zones. Specifically, tax refund policy will be implemented and tariffs will be lifted from any imported equipment and materials necessary for production. The foreign investment companies will be allowed to choose their own banks or even establish financial institutions to assist in their business management.

In addition, workers and companies will be permitted to sign their own labor contracts. The companies will be granted autonomy in hiring and firing, pricing, bankruptcy, liquidation and other business practices based on market principles.

As for investment protection policy, foreign investors will be permitted to transfer or inherit profits and assets and foreign investor’s investments and assets will not be collected as national property by North Korea.


DPRK struggling with smoking

Tuesday, May 31st, 2011

According to Yonhap:

At least a decade has passed since North Korea’s official media began urging its people to quit smoking ahead of 2012, the year it aims to become a “great, prosperous and powerful nation,” but recent reports suggest the smoking rate among North Koreans remains high.

In a report marking World No Tobacco Day, which falls on May 31, Pyongyang’s official Korean Central Television reported Tuesday on the government’s anti-smoking campaign without mentioning its stated aim of lowering the smoking rate to 30 percent by 2010.

According to earlier North Korean media reports, 54.7 percent of the population smoked in 2008.

The North Korean regime, however, has been persistent in its efforts to reach its goal, enacting a law in 2005 to restrict smoking and banning advertisements in public places that relate to smoking.

These actions came after Korean Central Television made a broadcast in June 2000 that called on the North Korean people to give up smoking and contribute with their healthy bodies to building a “great, prosperous and powerful nation.” The year 2012 marks the centenary of the birth of North Korea’s late founder, Kim Il-sung.

Here is the previous KCNA coverage of “World No Tobacco Day”: 20032004, 20052006-A, 2006-B, 20072008, 2009-A, 2009-B,  2010, 2011-A, 2011-B.

The DPRK has a tobacco factory in Pyongyang, Hoeryong and commissioned a tobacco JV company in 2008.


Women compose 80% of defections

Saturday, May 28th, 2011

In a May 28th article, the Choson Ilbo reported the DPRK’s National Defense Commission (NDC) is trying to make it harder for women to defect by more stringently enforcing domestic travel restrictions.  According to the article:

The North Korean regime has reportedly ordered border guards to stop all women from traveling on railways and roads to the North Korea-China border. The order, which targets all girls and women between 10 and 60, came recently from the powerful National Defense Commission.

Whether the story is true or not remains to be seen, but the article does highlight the significant gender imbalance among North Korean defectors:

More than 400 defectors arrive in South Korea every month, and about 80 percent of them are women.

There are several reasons given for this lopsided sex ratio.  I have supplemented the list of those items and classified them below:

On the supply side (push factors):

1. Women, as the primary bread-winners in the DPRK’s markets (the place to go for unsanctioned rumors), are exposed to more information about the outside world.

2. The DPRK’s efforts to reign in market activity have made many women despondent.

3. Women, who in many cases do not need to appear at an official job every morning, face lower monitoring costs, and thus have an easier time disappearing.

Demand side (pull factors):

1. Since there is a market for North Korean women in China, smugglers have an economic interest in facilitating defections.

2. It is easier for North Korean women to marry South Korean men than for North Korean men to marry South Korean women.

Of course Haggard and Noland have done systematic surveys of North Korean defectors.  You can learn more here.


American, Jun, released by DPRK

Friday, May 27th, 2011

UPDATE 13 (2011-6-1): KCNA has posted video of Ambassador Robert King leaving the DPRK with Mr. Jun.  You can see it at the new KCNA web page in an article titled, “Delegation of U.S. State Department Leaves” (May 28, 2011).   There are also pictures here, here, here, here, and here.

UPDATE 12 (2011-5-27): The DPRK has announced that they released Mr. Jun.  According to KCNA:

American Young-su Jun Released

Pyongyang, May 27 (KCNA) — As already reported, American Young-su Jun has been under investigation by a relevant institution after he was arrested in Nov. 2010 on charges of anti-DPRK crime.

The investigation proved that Jun committed serious crime against the DPRK which he frankly admitted himself.

Robert King, special envoy for Human Rights and Humanitarian Issues, U.S. State Department on a visit to the DPRK, expressed regret at the incident on behalf of the U.S. government and assured that it would make all its efforts to prevent the recurrence of similar incident. Earlier, former U.S. President Jimmy Carter and Reverend Franklin Graham visited the DPRK and repeatedly asked it to leniently pardon him. Taking all this into account, the DPRK government decided to set him free from the humanitarian stand.

During his detention, the DPRK allowed him to make regular contacts with the consul of the Swedish embassy representing the U.S. interests in the DPRK as well as correspondence and phone call with his family. It also gave him hospital treatment for his health reason.

You can read more in the Wall Street Journal and the Los Angeles Times.

UPDATE 11 (2011-5-18): The Daily NK asserts that Jun has been beaten and was supporting a network of underground churches n the DPRK.

UPDATE 10 (2011-5-11): The AP (via Washington Post) reports Eddie Jun has been visited by Swedish diplomats six times since March.

The U.S. government says that an American detained by North Korea since November is being well cared for and has been permitted to speak to his family by phone.

State Department spokesman Mark Toner said Wednesday Swedish diplomats have visited Eddie Jun six times since March and were continuing at U.S. request to ask for regular consular access.



New DPRK status symbols

Thursday, May 26th, 2011

According to the Daily NK, motorcycles, computers, and “big dogs” have replaced the rice cooker and wristwatch as the cutting edge status symbols among North Koreans.

According to the article:

In today’s North Korea, where wealth inequality is growing more and more extreme, what is a symbol of upper class income status? Just a few years ago, the answer was a branded South Korean rice cooker, the ‘Cuckoo’. So much so, indeed, that the brand name has totally usurped the dictionary description, ‘pressurized electric rice cooker’, altogether.

However, according to a new interview with a cadre from an enterprise in Chongjin published in the new, June edition of NK Vision, the most potent recent symbols of a wealthy family are motorcycles, notebook computers and military dogs!

“Nowadays in Chongjin, transport agents are being stationed here and there because of motorcycle accidents. There are usually around three motorcycle accidents per day, and people are losing their lives,” the cadre explained.

The majority of the motorcycles ridden in North Korea are Chinese brands such as Jangbaeksan costing around 2,000-3,000 Yuan (with 1 Yuan worth 400 North Korean won). Meanwhile, even second-hand versions of Japanese brands including Yamaha and Honda cost considerably more than 5,000 Yuan.

The cadre continued, “The bicycle is still the basic means of transport, as it has been until now. But the bicycle is now just a really ordinary means of transport; it is no longer a symbol of wealth.”

A notebook computer is another symbol of economic good health. Among other reasons, this is because in random inspections by the North Korean authorities they check computers, and since notebook computers can be hidden easily, they are enjoying great popularity.

The source explained, “On average, computer checks crop up once every two or three months, and since this happens without warning, we cannot get rid of things like foreign movies or Korean songs. Seeing these checks getting more serious, nowadays notebook computers are the most popular thing.”

Big dogs are, similarly, growing in popularity, even though one dog can cost as much as 100,000 North Korean won, or more than 50kg of rice. According to the cadre, there is sound logic to this, too.

“Affluent households need dogs to deter thieves, and a military dog can be raised for around seven years then it leaves meat to the house,” he explained.

Yesterday, Martyn Williams informed us about the DPRK’s juche laptop!

Read thee full story here:
Motorcycles and Notebook Computers
Daily NK
Kim So-yeol


Retail competition in the DPRK

Wednesday, May 25th, 2011

A visitor to the DPRK sends in a picture of a 10% discount coupon received at a hard currency shop in Pyongyang.

The coupon is issued by the 6.17 Trading Company, and according to a member of my crack translation team it reads:

One coupon per party is given when the party has spent more than 50 Euros at our restaurant during their visit. The next time you visit our restaurant, 10% discount will be applied to your bill.  This coupon cannot be used twice or split over visits. The expiration date of this coupon is in two months.

I am also told that the coupon lexically equates “discount” with “service” as in “we will serve you at 10% lower price”.

The coupon is interesting because it signals that there seems to be some real price competition among hard currency shops in the capital. These shops not only cater to foreigners, but also to North Koreans with sufficient forex balances, so they don’t just have to compete against each other, but also with the black market.

Do other readers have any experience with discount coupons in the DPRK, or is this a relatively new phenomenon?


ROK seeks to gain greater control of sanctioned cash flows to DPRK

Wednesday, May 25th, 2011

According to KBS:

South Korean firms doing trade with North Korea must will soon make payments only at government-designated banks.

The Unification Ministry said it will revise the law on inter-Korean cooperation and exchange to this effect. It said the measure aims to provide a greater understanding of the monetary flow of inter-Korean trade and secure transparent transactions.

The ministry has announced the qualifications a bank must meet to deal in inter-Korean trade payments and through June third, any of the 18 commercial banks in the country can apply for the designation. Two or three banks will be selected.

The revised law will also state in clearer terms the conditions and procedures relating to cross-border exchanges. It further calls for obtaining government approval when South Korean residents wish to transfer money to families in North Korea or when overseas chapters of South Korean firms seek to invest in North Korea.

The South Korean government is also seeking to gain control over remittances to families of DPRK defectors.

Read the full story here:
Designated Banks to Process S-N Trade Payments


DPRK appears to be manufacturing laptops

Wednesday, May 25th, 2011

Martyn Williams reports in PC World (2011-5-25):

North Korea might be an unlikely place to find a PC factory, but the country has started manufacturing three models of computers, according to a recent state TV report.

The three computers consist of two for educational use and one for office use.

The educational computers each run the same custom software and come in two versions: one is a netbook-sized laptop, and the other is a bland-looking box with a keyboard and mouse, that’s designed to be connected to a television.

“You can use multimedia educational materials,” said Pae Myong-sok, a factory representative interviewed in the TV report. “For example, you can view elementary and middle schools textbooks, do intellectual training exercises, view various types of dictionaries, edit documents and even learn foreign languages.”

The office computer is a laptop and runs productivity software and includes a web browser, Pae said. It’s also netbook-sized and has dual USB ports — something that’s not included on the educational machines — for data transfer. The battery lasts about two and a half hours, the report said.

No other specifications or details were offered in the report. The operating system was unclear from the TV images, but it didn’t appear to be Windows. North Korea has developed its own version of Linux called “Red Star” and it’s possible the computers are running that.

“The devices and programs of these computers were designed and developed purely using our own expertise,” said Pae. “These computers have low prime cost but are designed to carry out all the necessary functions without difficulty.”

The factory was identified as belonging to the “Information Technology Institute.” No other affiliation was provided, but the name matches a unit of Pyongyang’s Korea Computer Center (KCC). The KCC is one of North Korea’s centers for information technology study and learning and has successfully marketed a handful of software applications overseas.

I have posted the segment from the North Korean evening news that features the computers to YouTube.  You can watch it here (2011-3-10).

A reader later pointed out on Martyn’s blog that the DPRK computer is identical to a discount computer sold in the USA. According to Martyn:

Son has posted a comment noting the similarity of the office laptop to a $99 netbook sold in CVS stores in the U.S. The netbook carries the Sylvania brand of Siemens.

From the looks of the two machines, they are identical. It’s either the same or similar basic hardware.

The North Korean manufacturer could be supplying them to Sylvania, or both companies could be buying the laptops from another manufacturer, likely in China, and customizing them. (Just because the Sylvania model runs Windows CE, it doesn’t necessarily mean the North Korean laptop has the same software.)

Below are pictures of the two computers via North Korea Tech:


KWP worried about deterioration of information controls…

Tuesday, May 24th, 2011

According to the Daily NK:

…Now, The Daily NK has confirmed the existence of this initiative to control information circulation in the form of an education document for Party cadres, ‘On thoroughly eliminating anti-socialist phenomena in every area of community life’.

The 15-page document appears to have been published by the Chosun Workers’ Party’s own publishing house in advance of the Party Delegates’ Conference in September last year for circulation by the Propaganda and Agitation Department of the Workers’ Party.

In it, the Party states three broad goals: “We must pull out the roots of individualism and selfishness, and firmly arm ourselves with group awareness”; “We must thoroughly eliminate the illusion of money and the illusion of foreign currency”: “We must battle fiercely against the invasion of imperialist ideology and culture.”

The document even outlines the schedule and approach which should be adopted for lectures on the subject, ordering that Party cadres receive a 90-minute and Party members and laborers a 60-minute lecture on these ‘anti-socialist phenomena’ occurring both in the community and in their specific work area, methods of discovering those phenomena and ways of eliminating them.

“You must find and explicate cases of the phenomenon of failing to concentrate on the revolutionary mission and trading for the purposes of earning money; the phenomenon of diverting state organ and enterprises’ materials and products or focusing solely on the organ, the phenomenon of working-age women who fail to attend work in order to trade etc.”

It states, “Now, cadres and laborers are getting caught up in the illusion of money and foreign currency, meaning that their economic activities, morals, and worse still their ideology, are lacking.”

This frank admission of the problems being caused by illicit capitalist trade and the need to stop it are clear evidence of the worries felt by the authorities.

It states, “We must absolutely not allow the selling in markets of items which encroach upon the state or public good, including those which spread undesirable trends, products produced by state factories and enterprises, products unhygienic or otherwise threatening to human health.”

“Transferring imported goods to private traders and earning money through their sale in the market on the part of trade and foreign currency earning enterprises, which also helps the market to develop, must be eliminated, and selling by the entire state sector must be reinvigorated.”

Again, later, it reaffirms, “The phenomena of promoting the transferring of products to private traders, thereby earning money secretly and promoting this secret trade, must be thoroughly eliminated.”

This, the documents claim, are serious issues because the outside world is striving to undermine the socialist system of the country, with the ‘imperialists’ ideological and cultural invasion capturing the people and leaving them “ugly beings knowing nothing but themselves and nothing but money, an animalistic existence.”

Elsewhere, the document also attacks the circulation of foreign information, asserting, “Here the important thing is to thoroughly eliminate the circulation of, watching of and listening to of these foul recordings. In particular, we must avert the eyes of housewives and young people.”

The circulation of such information, it alleges, must be stopped “so as not to become tangled in the enemies’ psychological scheming” and to cease the “circulation of capitalist ideology and culture.”

To which end, it concludes, “The role and responsibility of the Party and enterprise cadres must be enhanced, while community watch guards and security under people’s units must be strengthened.”

Read the full story here:
Party Reveals Worries over Foreign Wind
Daily NK
Choi Cheong Ho and Jeong Jae Sung


Lankov on the rise of China and Korean unification

Monday, May 23rd, 2011

Andrei Lankov recently wrote a paper on the rise of China and the implications for Korean unification for a Korean-language publication.

You can download a PDF of the paper in English here.

The rise of China can be seen as the single most important strategic problem which Korea faces currently. In the late 1970s, China entered a phase of high-speed economic growth, which still seems to be almost unstoppable. According to World Bank estimates, the average annual increase in China’s GDP in the years 2000-2009 was 9.7%. This is the world’s highest growth rate. Perhaps for the first time in modern history, the country which has the highest growth rate is the country with the largest population.

The future of Korea depends on its ability to find how to handle the Chinese challenge. It is going to be difficult, but there are hopeful signs, too: Chinese political elite may be remarkably realist, even Machiavellian, in their outlook but also rational and averse to adventurism. This gives Korea some hope that compromises with China will be possible. Without such compromises no unification of Korea will be possible in a new world where China is bound to be a major player.