Archive for September, 2011

Friday Fun: Fashion, Beer and Coca-Cola

Friday, September 30th, 2011

North Korean Fashion Archives

Choson Exchange posted the following on their web page:

During our last trip, we met with Korea Daesong Bank, which kindly provided a product catalog from the 80s/90s of their parent company – Korea Daesong Economic Group (KDEG). While fashion definitely has moved on in Pyongyang, we thought that it might be good to share some of the products they display in their catalog – for old times sake. In case you decide that the retro look is for you, do note that KDEG is currently under international sanctions.

Choson Exchange posted the pictures to their Facebook Page, but since there are many people who cannot (or do not) access Facebook, I thought I would post the pictures here:

American beer popular in the DPRK?

Pictured above (left) is a bottle of Budweiser served with dry fish aboard the recent Mangyongbong-92 “cruise” from Rason to Kumgangsan.  Learn more here. Pictured above (right) is a can of Pabst Blue Ribbon (PBR) which has been converted into a candle holder and placed next to a bottle of “domestic” Taedonggang Beer. Click image for source. Maybe the number of hipster visitors to the DPRK has increased?

Coca Cola
Forbes Magazine has a very interesting article on talks between the North Koreans and Coca-Cola! Read the full article here.  I thought this would be a good time to remind readers about the DPRK’s indigenous cola:

Image source here

The soda is “Crabonated” which is a pretty funny typo. Also worth noting are the lengths they have gone through to copy the Coca-Cola brand–as if they are trying to win back market-share from the firm. The colors, red, black, silver and white are the same. The familiar cursive English “C” at the beginning of the word is a close copy. They even tried to replicate the Coke “wave” by adding a literal wave in a similar curve along the bottom of the advert.



More hacking attempts…

Friday, September 30th, 2011

As is well known at this point, DPRK researchers, journalists, aid workers, business partners, etc. have all been targeted by similar attempts to hack into their computers.  I have posted many, though not all of the emails that have targeted me or were sent to me by other individuals (see here, here, and here). The attacks are not targeted at individuals in any specific geographic region or individuals of any specific political persuasion.  I have recently been made aware of two more recent attacks (including one this week).  They are posted below for your edification.  Please keep an eye out for similar emails.

Email 1:

From: She Hui <[email protected]>
Date: Wed, Sep 28, 2011 at 5:37 PM
Subject: [interview request]This is Shehui from eChinaDaily.

Dear Sir,
My name is Shehui, from eChinaDaily news.
I would like to interview with you as a feature story.
Would you have some time to do a short interview?
You can review the interview topics with attachments.
I’m looking forward to getting your reply.

Warm regards,Shehui


The attachment is a PDF document called “interview.pdf”.  The document is blank, but it contains embedded javascript  that uses the Adobe reader to download a packet to your computer.


Email 2:

From: Grace lee
Sent: Mon, Sep 5, 2011 1:09 PM
Subject: 2011 DPRK economy trend and society report

Dear Boris,
Service completed, please refer to attached service report and details.
Best Regards,

Grace lee
DISCLAIMER: This e-mail and attachments there to are intended for the sole use of the recipient(s) named above and may contain information that is confidential and/or proprietary to the nkorea. Any use of the information contained herein (including, but not limited to, total or partial reproduction, communication, or dissemination in any form) by persons other than the intended recipient(s) is prohibited. If you have received this e-mail in error, please delete it immediately.
Company Registration No.: 2011090561E

The attachment is labeled “2011 DPRK”. I have been unable to determine how this one operates.


DPRK-China Trade Volume Reaches Record High at 3.1 Billion Dollars

Thursday, September 29th, 2011

Institute for Far Eastern Studies (IFES)

This year’s trade volume between China and the DPRK reached an all time high.

According to the (South) Korea Trade Investment Promotion Agency, the trade volume between China and North Korea between January and July of 2011 recorded 3.097 billion USD, surpassing last year’s 3.472 billion USD by 88 percent.

This is the second year since 2008 for the yearly trade volume to continue to break the record of the previous year.

During the same period, China exported 1.783 billion USD and imported 1.314 billion USD to North Korea. Compared to the same period last year, exports increased by 53.3 percent while imports increased by 169.2 percent, and its trade surplus decreased by 30.4 percent.

The main exports of China are oil, diesel freight vehicles, nitrogenous fertilizers, and grains while the top imports were anthracites, steel, and non-alloy pig irons.

The total amount of fertilizer North Korea imported between January and June totaled 193,960 tons (equaling about 39.88 million USD), a hike of 91 percent against last year’s 99,588 tons (25.4 million USD).

The price per ton of imported fertilizers was 188 USD for ammonium sulfate fertilizer (164,456 ton) and 346 USD for urea fertilizers (25,577 ton). Last year, 59,110 tons of ammonium sulfate fertilizer and 45,310 tons of urea fertilizer were imported. A drastically higher amount of ammonium sulfate fertilizer was imported this year compared with the previous year, the cause of which is speculated to be either a radical decrease in the fertilizer production in North Korea or an attempt to improve the country’s food production.

The total amount of grains imported from China from January to June totaled 149,173 tons, a boost of 5.5 percent from the previous year. The price of grain per ton went up from 372 USD to 404 USD, a rise of 8.6 percent. The cost of imported grain increased 14.4 percent against last year, an increase from 52.7 million USD to 63.1 million USD.

The grains imported were corn (38.2 percent), flour (37.5 percent), rice (16.9 percent), and bean (7.2 percent). Compared to last year, corn and flour imports rose while rice and bean slightly decreased. This year’s average price per ton of grain was 661 USD for bean, 538 USD for rice, 395 USD for flour, and 304 USD for corn.


DPRK increases grain imports from China

Thursday, September 29th, 2011

According to Yonhap:

North Korea imported nearly three times as much grain from China in August as last year, an expert said Thursday, an unusual increase that may suggest food shortages in the impoverished nation have worsened.

The North purchased 47,978 tons of corn, flour and rice in August, up from 16,723 tons in the same period of last year, said Kwon Tae-jin, a North Korea expert at the Korea Rural Economic Institute.

“It is unusual that the North increased grain imports sharply in August ahead of the harvest season in fall,” Kwon said. “It is believed that the North increased imports as its grain stock is falling low.”

The North imported 216,535 tons of grain from China in the first eight months, a rise of 20 percent compared to the same period last year.

China is the North’s key ally, economic benefactor and diplomatic supporter.

North Korea suffered devastating floods in recent months that washed away tens of thousands of hectares of farmland, damage that is feared to threaten its already fragile food situation.

The North has relied on international handouts since the late 1990s when it suffered a massive famine that was estimated to have killed 2 million people.

Back in June 2011, Yonhap reported:

North Korea imported more than 50,000 tons of grains from its key ally China in May, an expert said Thursday, amid chronic food shortages in the North.

The North purchased 50,328 tons of corn, flour and rice in May, up 31.5 percent compared to the same period last year, said Kwon Tae-jin, a North Korea expert at the Korea Rural Economic Institute.

The North also imported 114,300 tons of fertilizer from China in the first five months, a rise of 39 percent compared to the same period last year, Kwon said, citing figures from Seoul’s Korea International Trade Association.

China is the North’s last remaining ally, key economic benefactor and diplomatic supporter.

In March, the U.N. food agency appealed for 430,000 tons of food aid to feed 6 million vulnerable North Korean people, a quarter of the country’s population.

Washington sent its delegation to North Korea in May to assess the food situation, though no decision on food aid has been made yet.

The North has relied on international handouts since the late 1990s when it suffered a massive famine that was estimated to have killed 2 million people.

However, the outside aid has dwindled following the North’s missile and nuclear tests and other provocations.

There are basically two conflicting narratives being played out in the media in regards to this kind of news. The first narrative is that heavy seasonal floods and typhoon damage wiped out a large percentage of North Korea’s fall harvest and they are in desperate need of food assistance. The second narrative is that the DPRK is boosting food stocks in advance of 2012, the year the country is supposed to transition into a “Strong and Prosperous Country” (according to official propaganda). Since the DPRK’s appeal for large-scale food aid has gone largely ignored by the international community (despite the best efforts of organizations like the UNWFP and charities like Samaritan’s Purse), the country is forced to increase food stocks through international trade if it wants to live up to the expectations it has created among the domestic population.  Meeting these expectations is especially important right now as they will play an important role in facilitating the leadership  transition to Kim Jong-il’s designated successor, Kim Jong-un.

I have been posting stories about this year’s food shortage here (though neglected for a couple of weeks).

Read the full stories here:
N. Korea’s grain imports from China increase threefold

N. Korea increases grain imports from China


On the DPRK’s growing use of markets

Wednesday, September 28th, 2011

Pictured above (Google Earth): A street market in Rakrang District (락랑구역), Pyongyang.

According to the Korea Herald:

A market economy and new business class have emerged in North Korea since the 1990s even though their government will not acknowledge it publicly, a panel of experts said Wednesday.

Speaking at a luncheon hosted by the Center for Free Enterprise in Yeouido, Seoul, professor Andrei Lankov of Kookmin University said that the populace was forced into adapting to a new market economy after the fall of the Soviet Union in 1991.

Following the collapse of its main benefactor, there are sources that suggest that the North’s industrial output was halved by 2000 compared to what it had been in 1990, and that half a million to 1 million North Koreans perished, he said.

Unlike in former communist countries where the government chose to adopt capitalism or the people demanded it, “in North Korea it was just a way to stay alive,” he said.

“Only top officials survive on salary,” he added.

Walter Klitz of the Friedrich Naumann Foundation for Liberty said that in his periodic visits to North Korea he has seen the effects of the new market economy on the populace, as those in some rural areas of the nation are relatively well off.

“They don’t have a food problem, they have a distribution problem,” he said. Furthermore, he has witnessed traffic jams in urban areas apparently spurred by increased economic activity, something unheard of just a few years ago.

This also indicates that sanctions imposed on the North have been bypassed, particularly through increased investments from China.

The increase in this market activity, however, does not mean that the nation is no longer a planned economy, as the main institutions are still in place, they said. For example, laws against activities such as traveling outside of one’s home county or exchanging foreign currency are no longer enforced.

The North Korean government attempts to contain such market activity, but no longer attempts to clamp down on it since the botched currency reform of late 2009, Lankov said.

Furthermore, the presence of this new business class ― primarily made up of women because men are required to keep up appearances at their state-approved jobs ― does not mean the nation is more prepared for reunification than before. Lankov said that North Koreans who have succeeded in business would likely be swamped by competition for the South, and much of the nation would form a “permanent underclass” should unification take place.

“You would see much of North Koreans disadvantaged and never recover,” he said.

After each member of the panel made their remarks, they took questions from guests, with many questions relating to the succession process from current leader Kim Jong-il to his son and heir apparent Kim Jong-un.

Lankov said that he does not like to talk about succession often.

“I don’t know anything about Kim Jong-un, period,” he said. Whether or not he is more reform-minded than his father or grandfather, though, may not matter.

“His logic … will be much more defined by the political situation than by his own inclinations,” he said.

Another panel member was Donald Kirk, Korea correspondent for the Christian Science Monitor. In response to a question comparing the unification of the two Koreas to East and West Germany in 1990, Kirk called a comparison between North Korea and East Germany “fallacious.”

“East Germany was the most powerful economy in Eastern Europe,” he said. “It was not a starving country. It was certainly not a failed state.”

Read the full story here:
Signs of market economy in N.K. emerging: expert
Korea Herald
Rob York


Japan launches new satellite to watch DPRK

Wednesday, September 28th, 2011

According to Strategy Page:

Japan recently launched another photo reconnaissance satellite, replacing a radar equipped spy satellite that failed last year. A Japanese rocket was used for this launch. Four years ago Japan launched its fourth spy satellite into orbit, also using a Japanese-made rocket. The third bird was launched five years ago. The first two were launched in 2003. The 2006 launch was the second of three optical reconnaissance satellites. The cameras on board can make out objects as small as one meter (39 inches) in diameter. The new photo satellite can detect objects .6 meters (two feet) in size. The best U.S. spy satellites can make out much smaller objects, but for Japan’s needs, .6-1 meter is adequate. At this point, none of the four birds carry radar, to provide all weather coverage. Technically, the satellites are in violation of a 1969 Japanese law, which mandated Japan only use space for non-military purposes. To get around this, these satellites are technically non-military, and are not controlled by the military.

Japan had long refrained from launching military satellites, but this changed when North Korea fired a ballistic missile over Japan in 1998. Japan promptly set out to get eight surveillance satellites in orbit by 2006, in order to keep an eye on North Korean nuclear weapons and ballistic missile efforts. This proved impossible to do. While two Japanese satellites were launched in early 2003, another two were destroyed during late 2003, when the rocket malfunctioned.

Japan has long relied on commercial photo satellites, and whatever they could get from the Americans. But for high resolution shots, on demand, of North Korea, and electronic eavesdropping from space, they need their own spy satellites. It is believed that the Japanese spy satellites are also being used to watch military developments in China and Russia.

The Japanese program has cost nearly three billion dollars. The optical satellites weigh about a ton, while the radar one weighs about a third more. The United States provided a lot of technical assistance on the design and construction of the satellites. Japan built its own rockets to launch them. Like most spy satellite users, Japan does not report on how effective they are. It is known that Japan could get more detailed photos from commercial satellites. But those are not controlled by the Japanese government.

Read the full story here:
Japan Has Another Eye On North Korea
Strategy Page


DPRK looks to capitalize on high gold prices

Tuesday, September 27th, 2011

Back in 2002 the price of gold was approximately US$300/oz. Today it is closer to US$1,600/oz. Here is a chart:

The rapid increase in the price of gold is having a supply side effect of stimulating more gold mining across the planet, and North Korea is no exception.  Though the DPRK leadership has traditionally kept a watchful eye on the nation’s gold mines, reports began surfacing back in March that individual North Koreans were getting into the prospecting business:

Located at the base of Mt. Nokbong, near Hyesan in Yangkang Province, one particular village of 24 households saw its schools, public facilities and all other vestiges of welfare disappear following the construction of the Samsoo Power Station in 2004, which deprived the area of power.

And yet this village is now overflowing with people. They are here from all over the country, cramming homes and the nearby valley with one purpose in mind; searching for gold. Housewives, workers, university students, farmers, children, drifters, criminals, soldiers and bureaucrats; men and women alike from all different classes are living in this one place with the same aim.

The majority of people dig, without permission from the authorities and with only rudimentary tools. Their only wish is to avoid having to leave town and, hopefully, find some gold. The soldiers and bureaucrats, on the other hand, do not dig, instead using their authority to cream a share of others’ profits. (Daily NK)

It appears that the gold rush continues to this day, though it may be a bit more organized, at least officially.  A recent visitor to the DPRK took the following picture:

The caption of the photo reads:

“There are hundreds of people working certain rivers in North Korea in what can only be described as a gold rush. The government is buying gold from people who work the rivers. This has expanded considerably from past years when dozens were working the rivers. In one area I saw heavy equipment used to mine the river. The guides explained what was going on yet I cannot help but think this is a form of individual capitalism since it is individuals and families doing the mining.”

I would be interested to know more about what mechanisms the DPRK is employing to manage (control) “spontaneous” gold prospecting–an industry that would be hard for any central authority to police (particularly a poor country with high levels of corruption).  Given the limited amount of information, I can conceive of  two broad institutional arrangements:

Option number 1: Individual families and/or groups are simply registering their “mining companies” as branch enterprises or subsidiaries of existing state owned enterprises and mines.  In this way they take on the legal protection of the state in exchange for some defined percentage of their output.  This is the way many de-facto private North Korean businesses are run.   Under conditions of weak oversight (likely), this would imply that substantial profits from mining can be retained at the lower levels of production (with the firm “owner” or the miners themselves).  Pyongyang would have to be policing the rivers pretty hard and effectively auditing all the enterprises involved if expected to see a substantial increase in revenue from these “spontaneous” mining operations.

Option number 2: The North Korean government has essentially set up a “gold board” that sets a single legal domestic price for the purchase of gold from its people (just as many [exploitative] agriculture boards are set up in developing countries).  The DPRK government would earn revenue by keeping the difference between the amount paid to the domestic miners and the international price at which it sells the gold abroad. This option might make more fiscal sense in a weak institutional environment because the only thing the DPRK needs to police really well is the Chinese border. Under this system, the government does not need to worry about who mines the gold (or where or how) since the “gold board” would ultimately be selling it abroad and retaining the earnings.

I have not heard anything about such and institution existing, however, so until I am told differently I am more inclined to believe that option 1 is being utilized despite its fiscal shortcomings. This would imply that the increase in gold prices will translate to a real increase in wealth for a number of “ordinary” North Koreans. Though the work is not likely to be long lasting, it will provide some with savings or potential operating capital for the next business idea down the line.

Are you aware of other options or do you have some specific knowledge on how the DPRK is managing (controlling) freelance prospecting and mining? Please let me know.


Lankov on DPRK-Russian economic relations

Tuesday, September 27th, 2011

Andrei Lankov writes in the Korea Times:

In 2010, the volume of trade between these two countries was merely $110 million. As international trade goes, this volume is tiny. By comparison, in the same year North Korea’s trade with China was around $3.4 billion, some 30 times larger than its trade with Russia.

The reason for this inactivity is quite simple: Russian companies have no interest in dealing with North Korea. In the Soviet era, trade flourished because it was subsidized due to geopolitical concerns of Moscow. Currently, when it comes to pure economic considerations, North Korea has almost nothing to offer the new Russian economy.

North Korea has only two resources that can be sold on the international market. First, it has deposits of minerals (coal, iron ore). Second, it has a relatively large quantity of cheap labor ― or to put things in a less cynically capitalist way, there are millions of North Koreans willing to work for $10 a month.

But Russian companies are decisively uninterested in North Korean minerals. These mines may be attractive to resource-hungry China, but not to Russia, which has the riches of Siberia at its disposal. The chronic political instability in which North Korea is immersed is another reason which lessens Russian interest in North Korean minerals.

Cheap labor is more attractive, and indeed Russia has continuously used North Korean labor since 1967 but not in the North itself. Some Chinese companies began to outsource to North Korea, and built small factories there, in order to take advantage of the obscenely low local wages. This approach is not very attractive to Russia, since it is not a major player in producing winter parkas, wool hoods, or running shoes. Russian companies prefer to use North Korean workers inside Russia itself.

These workers are sent to Russia by the North Korean authorities and can be described as indentured labor. Their families are hostages who can be punished if a worker does something improper and the workers are also expected to ‘donate’ a significant part of their wages to the state. Despite these harsh conditions, one should not forget that these jobs are among the best paid regular jobs in the country. North Koreans compete for opportunities to become indentured laborers in Russia.

That said, the scale of these ventures is rather limited, as is the demand for cheap labor in the Russian Far East (the only part of Russia where the use of North Korean laborers really makes practical sense).

Aside from this, North Korea has something else to offer – its geographical location. This country blocks all land routes to the prosperous South. Russia has much interest in the South Korean market, especially when it comes to the sale of natural resources. Impeding this is the existence of North Korea, and the continued strained relations between the two Korean states, making sales of Russian commodities rather difficult.

So it is not incidental that the two most important potential projects are a railway and a gas pipeline. Both projects can hardly be described as “economic cooperation” between North Korea and Russia, since neither has much to do with the North Korean economy itself. North Korea, in these cases, is present merely as a space to be traversed. It would be no different if it were a dessert or jungle. Russia is willing to pay North Korea for facilitating Russia’s economic link with the South, and that is all.

So it is not surprising that an agreement on the pipeline construction was signed after the Russian-North Korean summit. This project is indeed acceptable to the North, since it will mean easy money for transit, it is favorable to Russia, and it will be good for the general situation since it will bind Russia, North and South Korea closer.

Yet, a word of caution is necessary. In spite of all official statements, we should not expect large-scale construction work to begin in the near future. The political risks remain huge, so it is likely that Russian companies will not rush headlong into the project. The recent agreement should rather be seen as a declaration of intent. In all probability, the trans-Korean pipeline and trans-Korean railway will be built eventually. But the completion of these important initiatives will probably take many, many years.

Read the full story here:
Russia-N. Korea Trade
Korea Times
Andrei Lankov


DPRK-China trade update

Tuesday, September 27th, 2011

According to Yonhap:

North Korea’s trade dependence on China deepened over the past four years, in contrast to a reduction in South Korea’s share in the North’s external trade, Seoul’s Unification Ministry said in a report Sunday.

The proportion of China in North Korea’s foreign trade is on the rise, increasing from 41.6 percent in 2007 to 49.5 percent in 2008, 52.7 percent in 2009 and 57.1 percent last year, the report said.

By contrast, South Korea saw its share of the North’s trade declining from 38.0 percent in 2007 to 33.0 percent in 2009 to 31.4 percent last year, it noted.

In terms of trade volume, too, bilateral trade between North Korea and China jumped from US$1.97 billion in 2007 to $2.68 billion in 2009 and $3.47 billion in 2010, the report said, adding the inter-Korean trade volume slightly increased from $1.8 billion in 2007 to $1.91 billion last year.

I looked on the Ministry of Unification’s web page, but I was unable to find the report mentioned above.  It  has obviously not been published in English.

As this information was released in South Korea, the DPRK’s premier, Choe Yong-rim, is in China.  According to the Korea Times:

The North’s Premier Choe Yong-rim and his Chinese counterpart Wen Jiabao “pledged to promote trade, investment and economic cooperation” between the nations during a meeting held on Monday night during Choe’s official visit to China, Xinhua news agency said.

“Under the context of the complicated regional and international situation, the parties, governments and peoples of China and the DPRK (North Korea)…made joint efforts to push forward bilateral ties,” Xinhua quoted Wen as telling Choe during the talks.

Wen hailed the North’s achievements in developing its economy and vowed that Beijing will continue to offer assistance within its capability, according to the report.

He then called on the two sides to speed up mutually beneficial cooperation in fields such as trade, investment, infrastructure, natural resources and agriculture, the report said.

Here is the Xinhua report.

Scott Snyder had some interesting comments on the DPRK-PRC trade relationship:

South Korea’s perceived failure to compete with China for economic influence in the North as a result of heightened tensions in inter-Korean relations remains an active subject of frustration in South Korea, especially among progressives, but North Korea’s continued pursuit of nuclear and missile tests and other tension-raising provocations against the South make it clear that China has been unable to use the North’s economic dependency on Beijing as a tool for imposing political restraint on Pyongyang.

Read the full stories here:
N. Korea deepens trade dependence on China

Premiers of NK, China vow to boost economic cooperation
Korea Times


Pyongyang International Film Festival 2012

Monday, September 26th, 2011

Pictured above (Google Maps): Pyongyang International Cinema Hall, home of the Pyongyang International Film Festival.

Koryo Tours sent out the following press release today:

Dates announced for the 13th Pyongyang International Film Festival – Pyongyang, DRPK (North Korea), 20th – 27th September 2012.

Koryo Tours has been the official Foreign Representative for the biennial Pyongyang International Film Festival since 2002 when they first submitted their film on the North Korean World Cup football team of 1966 The Game of Their Lives to a packed North Korean audience. “It was the first time that the North Koreans had seen just how their fans were received in 1966 – and the first foreign-made documentary about their country to be shown in their country. Myself and director Dan Gordon were pinched by the girls in the hotel restaurant as they wanted us to help get tickets to the best screenings” said Nicholas Bonner, co-producer of the film. “It will be some time before the festival becomes the Cannes of the East but we hope to get one or two film stars for the experience of a lifetime… probably one of the few places they can avoid being mobbed. The motto of the festival is independence, peace and friendship and is a great way of showing locals what is going on in the world of cinema.”

Perhaps the festival’s biggest achievement was the screening of the British Film Bend It Like Beckham at the festival in 2004 (seen by an audience of 12,000 locals) which cleared the path to make it the first western film to be broadcast nationwide on December 26th 2011. “We spoke to Gurinder Chadha, the Director, who was thrilled her film had been seen by a country who just adore football and of course it was the ideal film to show, full of hope – it has become unbelievably popular in the country and a talking point for everyone.

Koryo Tours director Nicholas Bonner is asking for submissions:

“Ealing Studios, The Goethe Institute and various embassies have all presented films but there is always room for more. Romantic comedy and period dramas are popular and we have managed to show films as diverse as Mr. Bean, the Swedish horror comedy Frostbiten to the South African drama Cry, The Beloved Country and UK’s Elizabeth I: The Golden Age.

Koryo Tours will run an exclusive tour for tourists during the festival and will include screenings of North Korean films such as the classic Flower Girl (very popular in China during the 1970’s), a visit to the North Korean film studio with mock up streets and meeting various North Korean film celebrities.

For further information and images contact: [email protected]
Tel: +86 (10) 6416 7544