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Archive for February, 2012

Japanese police bust computer smuggling operation

Sunday, February 19th, 2012

UPDATE 1 (2012-2-28): The Japanese police have raided the heaquarters of Chongryun (Chosen Soren), the Pro-DPRK General Association of Korean Residents in Japan, over its alleged ties to the computer smuggling ring. According to the BBC:

Japanese police have raided the offices of a pro-North Korean organisation suspected of a role in the illegal shipment of computers to North Korea.

Japan maintains a total ban on exports to North Korea.

It is part of a range of sanctions over North Korea’s nuclear programme and its abduction of Japanese nationals in the 1970s and 80s.

Earlier this month police arrested a businessman accused of exporting PCs to North Korea through China.

On Tuesday, about 100 riot police entered the Tokyo offices of an organisation connected to the Pyongyang-affiliated General Association of Korean Residents in Japan, officials say.

Because there are no diplomatic relations between the two countries, the association has functioned as North Korea’s de facto embassy in Japan.[

The raid came after prosecutors last week indicted Lee Soon-Gi, 49, who is accused of illegally exporting 100 second-hand personal computers to North Korea through China, officials said.

The affiliate organisation may be involved in the shipments, police say.

But the association has strongly criticised the raid which it described as an “unjustified and illegal investigation”.

ORIGINAL POST (2012-2-19): According to the Yomuri Shimbun:

The president of a Tokyo-based dealer in secondhand personal computers exported more than 4,000 items to North Korea, according to investigation sources.

Many of the items are believed to have been sold on the black market to senior members of the ruling Workers’ Party of Korea, the sources said.

Lee Sungi, president of Popura-Tec, was arrested earlier this month by the Metropolitan Police Department’s Public Safety Department on suspicion of violating the Foreign Exchange and Foreign Trade Law.

The 49-year-old has been arrested on suspicion of exporting 100 notebook computers to North Korea. In addition, Lee has told police that he shipped more than 4,000 personal computers and liquid-crystal displays to that country on four occasions from 2008 to 2009.

A North Korean trading company based in Dalian, China, brokered the deals, selling the products to a computer shop in Pyongyang, the sources said.

The shop was run by a North Korean computer engineer who once worked at a Chinese company as a software developer. He reportedly contacted Lee in March 2007, saying: “There’s demand for about 1,000 personal computers a month [in North Korea]. I’m interested in buying Japanese products,” according to the sources.

E-mails he sent to Lee suggested there were hundreds of computer shops throughout North Korea, of which 20 were in the capital. However, most of the country’s computer users do not use these shops because they cannot afford to buy their products.

Instead, they usually buy their computers through the black market, the sources said.

Most of the personal computers Lee exported from Japan were secondhand products, including some that had been leased to central and local government offices, according to the sources.

The North Korean computer engineer reportedly sold about 500 products per month to the black market, setting prices at 200 dollars or less for a desktop computer, and a maximum of 300 dollars for a notebook computer, the sources said.

This was still expensive for North Korea, which meant only senior members of North Korea’s ruling party and other wealthy individuals could purchase them, according to the sources.

It is reportedly common for North Korean computer users to buy new products when their items break down because there are almost no after-sales services in the country, according to the sources.

On February 2, 2012 we learned about a separate PC smuggling ring which moved computers from Japan to the DPRK.

Read the full story here:
4,000 PCs, displays said exported to North Korea
Yomuri Shimbun
2012-2-19

Posted in Black markets, Computing/IT, International trade, Japan | Comments Closed

Song Hye-rim

Saturday, February 18th, 2012

Pictured above: Yonhap photo of Song Hye-rim’s tomb stone in Moscow

Michael Rank writes in the Asia Times:

She died a lonely death, and she lies in a lonely grave. Once close to the center of power in highly secretive North Korea, she died in a Moscow hospital, spurned by her former lover, the Dear Leader Kim Jong-il, after suffering from paranoia and depression.

Much remains mysterious about Song Hye-rim, but a journalist from South Korea’s Yonhap news agency recently discovered her grave in Moscow’s Troyekurovskoye cemetery, where she was buried under an assumed name after fleeing Pyongyang following the breakdown of her relationship with Kim Jong-il.

She was suffering from mental illness and fled for medical treatment to Moscow, where she was admitted to hospital as O Sun Hui, the name under which she was originally buried.

But her gravestone now bears her real name, as well as her dates of birth and death – January 24, 1937-May 18, 2002 – and, on the other side of the headstone are inscribed the words “mother of Kim Jong Nam”.

It’s not known if her son has ever visited his mother’s grave, but Kim Jong-nam is certainly the black sheep of the family. The oldest son of Kim Jong-il was born in 1971 and was at one time his heir apparent, but he was disgraced when he was barred from Narita airport in 2001 when he was found to be travelling on a false passport on a trip to Tokyo Disneyland.

He now lives in Macau and southern China, and was recently quoted by a Japanese journalist as saying he expects the North Korean regime to fail because its new leader, his half-brother Kim Jong-eun, is too inexperienced. He said he had never even met his all-powerful half-brother, who is aged about 28.

The South Korean-born Song Hye-rim was an actress and a divorcee with a child when she became Kim Jong-il’s first mistress around 1970. She is said to have entered Pyongyang Film Academy in 1955, but left the following year to give birth to a daughter. She later re-enrolled and graduated, making her film debut in 1960.

Somewhat spookily, she is buried just 10 meters away from Stalin’s son Vasily Dzhugashvili, who died aged 40 in 1962.

When the Yonhap reporter visited Song’s grave in 2009 it was decorated with a single carnation, left by – who knows. “As you can see the grave has few visitors,” a cemetery official remarked.

Song was the first mistress of Kim Jong-il, who died last December, and was five years older than him. Her friend, Kim Young-soon, has said that Kim Jong-il did not tell his father, the Great Leader Kim Il-sung, that he was living with a formerly married woman as that would have caused a huge scandal.

Song’s sister, Song Hye-rang, managed to defect in Geneva in 1996, bringing with her nothing but her medicines, a volume of Chekhov short stories and her diary. She has told how the Dear Leader, an ardent film buff, was at first besotted with his movie star mistress but his ardour later cooled, and his father ordered him to marry a woman he never really loved, although the marriage did not last long.

His next liaison was with Ko Yong-hui, a Japanese-born ethnic Korean and a dancer, who was the mother of North Korea’s youthful new leader, Kim Jong-eun. She is believed to have died in Paris in 2004 and the Dear Leader replaced her with his personal secretary, Kim Ok, who reportedly accompanied him on a visit to China in 2006.

The ruling Kim family is enshrouded in mystery and rumor, and what little we know for reasonably sure is based largely on defectors’ accounts such as Song Hye-rang’s autobiography and an unpublished memoir by Kim Jong-il’s stepdaughter, the niece of Song Hye-rim, who defected in 1992 after visiting her aunt in hospital in Moscow.

The stepdaughter, Ri (Li) Nam-ok, tells in her autobiography how the then crown prince Kim Jong-nam was sent to school in Switzerland, accompanied by his uncle, Jang Song-taek.

The young Kim was at first reluctant to go, but “Jang Song-taek cajoled him, ‘Come on, come with me, we will see lots of strange and funny things. Let’s go!’ The thought of spending time with his uncle must have pleased him, and Jong-Nam consented.”

So writes Ri in her memoir, according to the respected North Korea-watcher Selig S Harrison, who says that although she originally intended it to be published, she changed her mind and had publication blocked through legal action in the French courts.

Jang stayed with Kim Jong-nam in Switzerland for six months, returning to Pyongyang in August, 1981, says Harrison.

Jang has emerged as a crucial figure since the death of Kim Jong-il because he is reported to be the mentor of the new leader, Kim Jong-eun.

Jang’s stay in Switzerland was fairly short and it occurred a long time ago, Harrison notes, but he believes that it fits in with other indications that he is reform-minded.

So does Ri Nam-ok’s reference to a visit to China by Jang on behalf of Kim Jong-il in 1989. When the subject of a visit by Ri to China came up, “My father told us he had sent Uncle Jang there and he had reported back that it ‘should be seen’,” she is quoted as saying in her ghost-written memoir, The Golden Cage.

Harrison has further evidence for claiming that Jang is a reformer, citing comments by the late Hwang Chang-yop, former international secretary of the Korean Workers’ Party, and the most senior North Korean official ever to defect.

Harrison met Hwang three times in Pyongyang, and twice more after he defected to South Korea in 1998.

“Jang Song-taek is the smartest one there [in Pyongyang], and he understands that change is urgent and imperative,” Hwang told Harrison. “He has good relations with the army because three of his brothers are generals. He’s the best hope for reform, but it won’t be easy for him.”

That is an understatement, but perhaps there is hope that North Korea will launch much-needed reforms to its sclerotic political and economic system under its mysterious new leader.

Read the full story here:
North Korean secrets lie six feet under
Asia Times
Michael Rank
2012-2-18

Posted in Kim Jong Un, Kim Jong-il's death, Political economy, Russia | Comments Closed

New DPRK restaurant opens in Dandong

Friday, February 17th, 2012

According to the Daily NK:

The largest of a collection of overseas restaurants run by the North Korean authorities,‘Pyongyang Koryogwan’ opened for business in Dandong, China on Thursday. An opening ceremony was held in front of the restaurant, which is located at the entrance to Dandong’s development zone.

The ribbon-cutting, which lasted for 30 minutes beginning at 9:30AM, included North Korean and local Chinese government officials, the restaurant management team and more than 50 female staff members, over 100 people in total. Staff must have been freezing after spending the whole time in Korean traditional dress despite sub-zero temperatures.

The restaurant is staffed by more than 200 workers from North Korea, 120 of whom are general staff, with the remainder working in the kitchens or on administrative tasks. The menu is mostly a collection of different sets, with the cheapest item being cold noodles at around USD$4.75.

Read the full story here:
Dandong Opening for New NK Restaurant
Daily NK
Choi Cheong Ho
2012-02-17

Posted in Hwanggumphyong and Wihwado Economic Zones (Sinuiju), International trade, Restaurants | Comments Closed

Seoul to ease some Kaesong investment regulations

Thursday, February 16th, 2012

According to the Donga Ilbo:

The South Korean government will allow companies operating in the Kaesong industrial complex in North Korea to bring new facilities or build plants there. Against this background, regulations banning new investment in the complex under a sanction against North Korea, which made May 24 last year, will be massively eased.

Park Soo-jin, vice spokeswoman of the Unification Ministry in Seoul, said Wednesday, “We will ease sanctions on North Korea imposed May 24 last year to support the operations of plants operating (in the Kaesong complex), including allowing the entry of necessary facilities and construction of warehouses.” “We will also actively examine working-level talks with Pyongyang to resolve the issue of supply of North Korean workers. We are willing to negotiate with the North on building dormitories and tackling passage, customs and telecommunications matters and personal safety.” The ministry is also mulling putting artificial grass on a soccer field within the complex to improve living conditions of South Korean staff.

The latest decision is a follow-up measure after members of the special parliamentary committee for inter-Korean relations development and the National Assembly`s Foreign Affairs, Trade and Unification Committee visited the Kaesong complex Friday and urged the resolution of difficulties facing companies operating there. Having offered Tuesday working-level talks to Pyongyang for family reunions, Seoul apparently hopes to expand amicable relations through this deregulation.

The Unification Ministry said last year`s sanctions will remain in force since expansion of large-scale investments will still be banned, including new corporate advances into the complex and plant construction. The latest measure, however, is still a big step forward because until now, Seoul had approved just facility entry into the complex for repair purposes, while going forward, additional facilities could be allowed for production activities. Plant construction was initially allowed for seven companies, which had been suspended due to last year’s sanctions.

Certain projects are already in place, including the construction of fire stations and emergency medical facilities, as well as repair of roads for commuting by North Korean workers. The South Korean ban on visiting North Korea excluding the Kaesong complex and Mount Kumgang area, which was effected last year, was also eased following approval of trips to North Korea for social and cultural exchanges, including the recovery of Kaesong Manwol pavilion.

Read the full story here:
Seoul to partially lift restrictions on biz complex in N. Korea
Donga Ilbo
2012-2-16

Posted in Economic reform, Foreign direct investment, Kaesong Industrial Complex (KIC), RoK Ministry of Unification, South Korea, Special Economic Zones (Established before 2013) | Comments Closed

North Korea modifies laws to attract foreign investments

Thursday, February 16th, 2012

Institute for Far Eastern Studies (IFES)
2012-2-16

The KCNA announced on February 9 that the “Foreign Investment Bank Law” was modified and supplemented. According to the report, the amended law included “those businesses in operation for over ten years are exempt from income tax on the profit collected in the first year and Bank of Chosun [Bank of North Korea] will be exempt from business taxes on the interest revenue collected from loans provided to companies on favorable terms.”

The previous law already had regulations about exemption of transaction taxes but nothing on business tax. The foreign investment company and foreigner tax law regulated that two to ten percent of profit to be paid by the foreign companies in service and construction sectors.

While the prior law stated, “tax exemption will be provided for the first year for income tax on those businesses over ten years old, and 50 percent exemption will be given in the next two years,” the “50 percent limit” was omitted in the amended legislation.

According to the KCNA, “The law has 5 chapters and 32 articles which included the contents of categorization and specification for areas to establish foreign investment banks, property rights, and autonomy on business management.”

On February 10, the KCNA announced that the Foreign Investment Company Registration Law, Foreign Investment Company and Foreigner Tax Law, and Foreign Investment Company Bankruptcy Law were amended.

In reference to the ordinance of the Supreme People’s Assembly Standing Committee signed on December 21, 2011, provided that this law consisted of 6 chapters and 34 articles with specifics on business establishment, address, tax, and tariff registrations. However, no other details were given.

On January 30, the KCNA also reported the “Labor Law of Foreign Investment Company” was amended and supplemented. This law consists of 8 chapters and 51 articles on hiring and labor contracts, rest, protection, social insurance, and security.

In addition, the “Financial Management Law of Foreign Investment Company” and “Fiscal Law of Foreign Investment Company,” was also modified. However, no other details were provided.

The KCNA has reported that North Korea modified foreign investment laws previously in 1992, 1999, and 2004. This year marks the fourth amendment.

The news elaborated, “The DPRK is encouraging foreign companies to investment in our country based on complete equality and reciprocity and will not nationalize or collect the invested asset,” reiterating the safety and security of foreign investment.

Some analyze the recent amendment as an effort to attract more foreign investment into the country. Similarly, North Korea has recently announced the Special Economic Zone Act for the development of Hwanggumpyong and Wiwha Islands. In addition, the state-run Academy of Social Sciences published a newsletter emphasizing the rational tax investigation for foreign companies.

The Daily NK also reported on this development:

On February 10th, Choson Central News Agency (KCNA) reported fresh amendments to North Korea’s laws governing foreign investment.

KCNA revealed, “Chosun’s law on the registration of foreign-funded enterprises has changed. 34 articles in 6 chapters of the law, which was made according to a December 21st, 2011 decision of the Standing Committee of the Supreme People’s Assembly to cover the founding, residence, taxation and customs of businesses, have been amended.”

As is ordinarily the case, specific amendments were not included in the report.

On February 9th, North Korea also announced revisions to its Foreign Investment Bank Law issuing exemptions from consumption tax. Last month also saw revisions to banking as well as labor and financial management laws.

The amendments appear aimed at assuaging the fears of Chinese enterprises over issues such as the threat of expropriation. Indeed, China is said to have last month rejected initial laws governing the management of special economic zones at Hwanggeumpyeong and Wihwa Island nr. Shinuiju for a variety of reasons.

Read the full story here:
NK Investment Laws Get Another Makeover
Daily NK
Kim Tae Hong
2012-2-13

Posted in Banking, Finance, Institute for Far Eastern Studies, Law on Foreign Investment, Law on Foreign-funded Banks, Supreme Peoples Assembly | Comments Closed

DPRK 2010 trade stats

Wednesday, February 15th, 2012

According to the BBC:

But the UN Conference on Trade and Development estimates that foreign direct investment in 2010 was $38m (£24m; 29m euros) and that the total amount invested in North Korea over the past few decades comes to $1.475bn (£940m; 1.13bn euros).

Most of that comes from China.

…

China doesn’t publish details of its economic relationship with North Korea, but the Bank of Korea estimates trade between the two Communist nations has been steadily rising, and reached $3.5bn (£2.2bn / 2.7bn euros) in 2010.

South Korea, meanwhile, has set up the Gaesong Industrial Complex with its northern neighbour, which now employs 50,000 people and contributed heavily to $1.7bn (£1.1bn / 1.3bn euros) of trade between the two Koreas last year.

Read the full story here:
Made in North Korea: Business in a ‘communist monarchy’
BBC
Lucy Williamson
2012-2-15

Posted in Foreign aid statistics, Statistics, Trade Statistics | Comments Closed

China does [not?] commit to new infrastructure investment in Rason

Wednesday, February 15th, 2012

UPDATE 2 (2012-4-12): North Korea and China attracting investors for Rajin Port development (IFES):

China is currently actively recruiting investors to build additional wharfs in Rajin Port.

China’s Dandong City Industrial and Information Association (丹东市信息协会) announced that it is seeking investments for the construction of tanker wharf under 10,000 ton and affiliated facilities. This organization has received 45 year usage rights from the Rason City People’s Committee and stated that it needed 330 million CNY (52 million USD) to cover the construction cost. According to the association, the investment is attractive because of its geographic location, reduced transit time and costs, and tax-free benefits, for which a special permit was obtained from the North Korean authorities granting trade goods coming from Jilin Province at the Hunchun Port to be allowed entry tax-free. In addition, cargo will be permitted to be sent from Rajin Port to other ports in China.

Meanwhile, North Korea is also planning to build a new port in the Rajin-Sonbong area with a state-of-the-art container distribution capacity. According to the “Rajin New Port Development Plan,” Rajin port development will undergo major transformation as an international hub port, similar to Busan Harbor, unlike the previous small-scale renovations of Piers 1, 2, and 3. This new port is expected to be built across from the current Rajin Port.

Rajin Port development was initially considered as a remodeling project to update the existing wharfs. In 2003, China began to implement construction of Piers 1, 2, and 3. However, the piers began to deteriorate and for the lack of railway and road infrastructure in the area, it delayed the transportation and distribution and could not perform its full function. As a solution, in 2008, North Korea transferred the usage right of Pier 1 to China and Pier 3 to Russia. At that time, Pier 1 was developed to primarily transport chemical fertilizers but it was recently updated as a transportation dock for coal. Russia, in addition to the port, also carried out a modernization project of the Rajin-Hassan railway system to improve the transport of containers.

The new port development plan as suggested by North Korea indicates Jian Group of China as the responsible party for developing the new port into a container port. However, considering that North Korea’s industry does not call for container ports, it is more likely that North Korea is expanding the port to make it a hub port to ship cargo to China, Russia, and Europe. Considering Rajin Port’s geographical advantage, it is likely that North Korea is striving to make it into an international hub port that connects the Pacific with Northeast Asia.

China’s recent advertisement of investment is also considered to be linked with the new port development in Rajin Port.

UPDATE 1 (2012-3-1): Accoridng to Stratfor, the Chinese have denied they plan to make this investment.

The Chinese Foreign Ministry denied allegations made in a Feb. 16 South Korean media report regarding its agreement with North Korea to jointly develop the Rajin-Sonbong Special Economic Zone (SEZ), a port area in northeast North Korea commonly referred to as the Rason Special Economic Zone.

According to the Yonhap news agency, Beijing agreed in late 2011 to invest about 19 billion yuan ($3 billion) into Rason, for which it would receive the lease of three piers for 50 years. Under the agreement, Beijing would also build an airfield, a thermal power plant and a 55-kilometer (34-mile) railway track connecting Rason to Tumen, China. The Chinese Foreign Ministry claimed that the specific details of the report are untrue and that China and North Korea had agreed only in principle to develop the zone.

China has long exerted its economic influence in North Korea and has an interest in the strategically important Rason Special Economic Zone. Chinese involvement in Rason dates back to the 1990s, though Beijing increased its involvement considerably in 2005 when it secured the rights to one of the port’s piers. Beijing has been particularly involved over the past few years. While the details of the deal remain unknown, it is clear that Beijing has arranged to help Pyongyang develop Rason, possibly by connecting the remote port to northwest China. Such a development would revitalize the zone — to the benefit of both countries.

ORIGINAL POST (2012-2-15): China has committed to infrastructure projects in Rason. According to Yonhap:

China has secured the rights to build three new piers in a special economic zone in North Korea’s northeast and use them for 50 years, sources said Wednesday.

China will also build an airfield and a thermal power plant in the special economic zone known as Rason, as well as a 55-kilometer railway track between China’s northeastern city of Tumen and Rason.

North Korea and China reached an agreement late last year to build infrastructure in Rason with Chinese investment of about US$3 billion, according to the sources in Seoul and Beijing.

The Daily NK offers some more data:

China has agreed to dig out dock 4 at Rasun to make it possible for 70,000 ton vessels to dock and to construct a runway long enough to accommodate passenger and cargo aircraft within the SEZ; the railroad is due to be complete by 2020, while the development of dock 5 and 6 will follow that of dock 4, Yonhap sources claim.

This agreement was reportedly signed quietly by North Korea’s Joint Ventures Committee and the Chinese government shortly before Kim Jong Il’s death.

The North Koreans have sought the construction of an airport and expansion of the port for some time.

KITC published the image above in 1995 (Source here). If you look carefully on the right side of the picture you will see the site of a proposed airport.

Above is a more recent map of Rason published by the DPRK. In the middle of the above map you can see a small airplane which represents the desired location of a future airfield. It is in the same location as shown on the KITC map.

Here is the approximate location on Google Earth (42.397884°, 130.592084°):

If you look at the left side of the KITC photo you can also see that there are many piers, however today there are only three. I suspect that the new piers will be constructed south of the current piers and will look something like this:

The railway and power plant projects are intereting as well. There is already a thermal power plant in Sonbong, so I expect that the Chinese are simply renovating it so that it generates more power or is simply more reliable (Google Earth: 42.327275°, 130.382585°):

At a presentation at the Korea Economic Institute in Washington, DC, Andray Abrahamian reported that increased electricity supplies for the Rason Zone could come from China.

As for the Tumen (China) – Rason railway line…this already exists as well. The DPRK’s Hambuk Line (함북선) runs from Chongjin to Namyang (border with Tumen) to Rason:

The Tumen to Rason leg of this railway line, however, is approximately 156km (according to Google Earth) and likely runs pretty slowly. The proposed new Chinese-built Tumen-Rason line is intended to be just 1/3 the distance!

Additional Information:

1. The Russians built a railway line from their border to the Rajin Port. Learn more here.

2. The Chinese and Russians have already rented two of Rajin’s three ports.

Read the full stories here:
China secures right to use 3 piers to be built on N. Korean port for 50 years
Yonhap
2012-2-15

China Reportedly Grabs 3 Docks and More
Daily NK
2012-2-15

Posted in Aviation, China, Economic reform, Foreign direct investment, Joint Venture Investment Committee (JVIC), Railways, Rason Economic and Trade Zone (Rajin-Sonbong), Russia, Sea shipping, Special Economic Zones (Established before 2013), Transportation | Comments Closed

On DPRK remittances

Wednesday, February 15th, 2012

Chico Harlan writes in the Washington Post:

Recent North Korean defectors in South Korea sometimes joke that their transition to capitalist life begins with two key steps. First, they buy a smart phone. Then, they get a lesson about phone banking.

With those two things, defectors can then transfer money back to North Korea, where many still have family or friends. The money doesn’t go directly to the North; rather, it’s channeled through a series of brokers, routed through China, and trimmed by handling fees and commissions.

But as underground systems go, this one is quite functional. Some 50 percent of North Korean defectors have transferred money back home. Those who try once almost always do it again.

Just a decade ago, almost no money flowed back to the North in the form of remittances. But the number of defectors here has skyrocketed, and the amount of cash they send back home has surged as well.

Some 23,000 defectors now live in South Korea, with the number jumping more then 2,500 every year. (Just 12 years ago, a total of 1,400 North Koreans lived in the South.)

The defectors don’t make much money — about $1,000 per month on average — but that doesn’t stop them from sharing it generously, shipping it back to a country where $1,000 can feed a family for a year.

According to a January 2011 survey from the Database Center for North Korean Human Rights, some 56 percent of defectors who send money give more than $900 (1.01 million won) annually. Another 12.5 percent give more than $4,500 (5.01 million won) annually.

North Korea scholar Andrei Lankov, in this April 2011 essay, estimated that the total money given each years totals $10 million–an enormous influx of cash into the extremely impoverished North.

One recent defector, Ju Kyeong-bae, described during a recent interview at his apartment in Seoul how he transfers money to his friends in the North, who live in a village some 25 miles from the Chinese border.

First, one of his friends — let’s call him Mr. Jeong — calls Ju from North Korea, using a Chinese cell phone that gets a signal from towers just beyond the border.

Mr. Jeong provides a telephone number for a broker in China. Ju calls the broker.

The broker then gives Ju the name of a bank in South Korea, along with a particular account number.

Ju determines the amount of money he wants to send, punches a few buttons on his iPhone, and transfers the money, which then pinballs from the South Korean bank to a Chinese bank, using two brokers.

The Chinese bank account belongs to a businessman (let’s call him Mr. Kim) who does frequent work in North Korea — and who holds lots of private wealth stashed away in the North. When Ju’s money lands in Mr. Kim’s account, Kim just lets it sit there. He never withdraws it and takes it across the border. Rather, he distributes money he already has stashed in North Korea to Mr. Jeong, who in turn gets it to the person Ju’s payment is intended for.

Mr. Jeong then places another call to Ju — a confirmation.

“Some of the middle men, I never even know their names,” Ju said. “It’s all based on trust. If you don’t trust the system, you’re better off not even sending money.”

According to the 2011 survey of defectors, the commission on transfers is generally between 21 and 30 percent. It’s almost never higher than 50 percent. Some 90 percent of defectors say they receive a phone call from their friend or family member confirming that they received the payment.

One of every two defectors thinks his or her money transfers will spark admiration toward the South. About one in every 10 thinks the money will raise resistance against North Korean society.

South Korea technically bans the transfers, but an official at Seoul’s Ministry of Unification, which handles North Korea policy, says that the government has little incentive to stop the remittances.

“They fall into a gray area,” said the official, requesting anonymity because he was unauthorized to speak about the policy on record. “We always say no money should be sent to North Korea in case it is diverted for military purposes. But in this case, we’re not talking about huge amounts. And it’s for humanitarian purposes. So long as that’s the case, we won’t pursue it.”

Additional posts on remittances:

1. ROK moves to control inter-Korean remittances (2011-5-26)

2. ROK seeks to gain greater control of sanctioned cash flows to DPRK (2011-05-25)

3. Remittances from North Korean defectors (2011-4-21)

4. Defectors remit US$10m a year to DPRK (2011-2-23)

Read the full story here:
North Korean defectors learn quickly how to send money back home
Washington Post
Chico Harlan
2012-2-15

Posted in Banking, Black markets, Emigration, Finance, International Aid, South Korea | Comments Closed

New Kim Jong-il statue unveiled

Tuesday, February 14th, 2012

Following the unveiling of the Kim Jong-il memorial carved into Mt. Sokda last week, today KCNA announced the unveiling of a Kim Il-sung and a Kim Jong-il statue at the Mansudae Art Studio in Pyongyang.

Click image for a larger version.

You can watch the unveiling in video format on the KCNA page here. You can watch the video on YouTube here.

According ot KCNA:

The statues of President Kim Il Sung and leader Kim Jong Il riding on horses together were erected at the Mansudae Art Studio with approach of the Day of the Shining Star.

Their construction, the first of its kind in the history of the Workers’ Party of Korea and the Korean revolution, is a great glory and pride of Kim Il Sung’s nation and Kim Jong Il’s Korea.

A ceremony of unveiling the statues took place on Tuesday.

Present there were senior party, state and army officials Kim Yong Nam, Choe Yong Rim, Ri Yong Ho, Kim Yong Chun, Kim Ki Nam, Choe Thae Bok, Yang Hyong Sop and Kang Sok Ju, officials of party, military and power bodies, social organizations, ministries and national institutions, men and

officers of the Korean People’s Army and the Korean People’s Internal Security Forces, officials and employees of the Studio and working people in the city of Pyongyang.

Senior officials of the party, state and army and officials of the studio unveiled the statues.

Laid at the statues is a floral basket from Kim Jong Un, supreme leader of the WPK and the people and KPA supreme commander.

Placed were floral baskets in the name of the WPK Central Committee, the Presidium of the DPRK Supreme People’s Assembly, the DPRK Cabinet, the Ministry of the People’s Armed Forces, the Ministry of People’s Security, working people’s organizations, ministries and national institutions,
units of the KPA and party and power organs in the city.

The participants made bows to the statues.

Kim Yong Nam, member of the Presidium of the Political Bureau of the C.C., the WPK and president of the Presidium of the SPA, made an address at the ceremony.

It was the unanimous desire and ardent wish of all the Party members, servicepersons and people to erect a statue of Kim Jong Il as well as Kim Il Sung’s in order to hand down for all ages the prominent traits and revolutionary feats of the illustrious great man, the speaker said, adding:

This ardent desire has been realized thanks to Kim Jong Un’s boundlessly noble loyalty and meticulous guidance.

He called for glorifying the revolutionary careers and undying feats of Kim Il Sung and Kim Jong Il forever with the immutable faith that they are always with us.

The participants looked round the statues after being briefed on them.

Though the unveiling displayed BOTH Kim Il-sung and Kim Jong-il statues, there was previously a Kim Il-sung statue located at this exact spot. I am not sure if this statue has been decommissioned, moved, or incorporated into the new sculpture:

This is only the third Kim Jong-il statue of which I am aware–and the first located outside.

There is a Kim Jong-il statue at the International Friendship Exhibition in Myohyangsan:

The other Kim Jong-il statue is in the Ministry of the Peoples’ Armed Forces:

Both the Kim Il-sung statue and the Kim Jong-il statues were manufactured on location at the Mansudae Art Studio:

Pictured above (Google Earth): The Mansudae Art Studio in Pyongyang. The blue roofs indicate that most of the buildings have recently been renovated.

At the same time, the Daily NK reports that Kim Jong-un has asked that the costs of memorializing his father not be passed on the people (like this).

UPDATES related to the celebrations of Kim Jong-il’s 70th birthday:

1. Kim Jong-il also named “Generalissimo” — a title previously reserved for his father, Kim Il-sung. This clears the way for Kim Jong-un to be promoted to “Marshal”. Many officers were also promoted and awarded the Kim Jong-il Prize. Daily NK coverage here.

2. Commemorative gold and silver coins were issued to celebrate Kim jong-il’s 70th birthday. See more here and here.

3. New stamps were issued.

4. A military tribute was held in Kumsusan Palace (which was renamed Kumsuan Palace of the Sun). See video here.

5. The KCNA web page added a Kim Jong-il photo album. See it here.

6. A new Kim Jong-il badge is issued.

7. NK Leadership Watch coverage here.

8. Here is my lengthy collection of material published when Kim Jong-il passed away.

Posted in Art, Construction, Mansudae creative Company (art studio), Political economy | 4 Comments »