Archive for October, 2012

The credible commitment problem of economic reforms

Tuesday, October 16th, 2012

We have all been watching whether the DPRK will implement economic policy adjustments that strengthen material incentives to farmers, workers and enterprise managers to increase production. I have cataloged many of these stories/articles/observations here.

Today the Daily NK offers a scenario as to why the DPRK has not implemented more generous agricultural production incentives:

A Hyesan-based source explained today, “Cooperative farm cadres are saying that none of the experimental farms will be given 30% of their production this year because it has become difficult to meet the target. They are saying that the harvest is not good and they need to feed the military as a matter of priority, so first they’ll guarantee the military rice then give the rest to the farmers.”

A Shinuiju source corroborated the story, saying that the authorities “haven’t said they are going to take all the production from the farms, but nobody actually thinks they are going to get very much. People who trusted the official words are feeling quite stupid, and nobody is working very hard.”

Back in July, each province designated a number of ‘model farms’ that were to be used to test the policy. These farms were supposed to receive their initial inputs of fertilizer and machinery from the state, and then be given 30% of their production in return.

“They are saying that the state does not have enough rice right now and that there is no choice but to give it to the military, so please try to understand,” the source said. “Farm workers, many of whom had been buoyed by talk of food distribution, are really disappointed, especially since prices are sky high in the market these days.”

Anyone who has taken a game theory class will note the presence of credible commitment problems and backwards induction.

If a game consist of two players (the state, farmers) operating in an environment where credible commitment is not attainable, one could argue that an outcome where the state promises to increase agricultural incomes yet farmers work less is the predictable result. Here is why: If at the beginning of the game the state says “we will raise your incomes if you produce more” and farmers respond by producing more, in the absence of credible commitment, at the end of the game the state can simply take all the increased production and pay no more. There is nothing to force the state to actually keep its word once the increased output has already been produced (assuming policy makers with short time horizons). Of course by utilizing backwards induction farmers realize this and do not increase production despite the promise of higher incomes. In the limit case, the DPRK announces economic policy adjustments, nobody believes them, and nobody moves to increase labor supply in the official sector of the peoples’ economy.

If the DPRK wants to offer effective policy adjustments that lead to real increases in output it must not only promise greater material incentives to workers and managers but it must do so in a believable way. Unfortunately there are no simple mechanisms to credibly bind the hands of the North Korean policy makers within the DPRK. In the absence of suitable constraints on state power (broadly defined), this means that reputation capital is even more important for achieving desired policy goals. This is why the decision to back-peddle on the 6.28 agricultural policies, if this is indeed what happened, is perhaps the most damaging move of all in terms of improving economic performance. Taking the North Korean government at its word (reputation capital), the farmers who increased effort in the fields (expecting a 30% ownership of their output in return) have instead given the state a free lunch. They will not be so inclined to increase output the next time the government comes knocking on their door offering dreams of a chicken in every pot.

If the DPRK government hopes to induce workers to increase labor supply through official channels, relying on nothing more than reputation, it is going to have to pay for failing to live up to its economic commitments in the past. In other words, it is going to have to slowly build up its reputation capital again by increasing the incomes of workers through a policy that is not likely to pay off for several years. It is only after workers again feel confident that the state will not back-peddle on the promise to let them retain 30% of their output that they will increase labor supply and output.

Read the full story here:
6.28 Agriculture Policy on the Back Foot
Daily NK
Lee Sang Yong


Hoeryong: New Chinese tourist destination

Monday, October 15th, 2012


Pictured Above (Google Earth): Two Google Earth satellite images of Hoeryong (L: 2002-4-27, R: 2008-12-25) which show the construction of residential apartments buildings as well as the town’s new main market.

Hoeryong is a town in North Hamgyong Province that lies across the Tumen (Tuman) River from China.  According to North Korean political narratives it is also the childhood home of Kim Jong-il’s mother, Kim Jong-suk.  It has been the the site of a large construction boom in the last five years, and now, according to the Daily NK, Chinese tourists are being brought in on very limited itineraries. According to the article:

The Hoiryeong source explained, “North Hamkyung Province ‘shock troops’ and military unit construction teams have been here for three years on Kim Jong Il’s orders for the construction, and now it is finished.” Local households were asked to contribute 12,000 North Korean Won each to the construction effort, he added.

Hoiryeong used to have few buildings with five floors, but now it has a considerable number of new four and five floor apartment buildings built around the center of the city, as well as a number of newly built commercial facilities. Buildings in the downtown core have also been spruced up with external lighting, a project that began last April.

There are a number of new restaurants in the area. One, ‘Hoiryeonggwan’, has been decorated in the style of Pyongyang’s famous ‘Okryugwan’, something that Kim Jong Il is said to have ordered in December 2010 when he visited the construction site. Elsewhere, restaurants serving spicy marinated beef, duck, dog and Chinese food have also opened their doors.

However, these restaurants only currently open on the weekend or when Chinese tour groups make an advanced reservation, according to the source, who revealed that local people regard the construction effort more as an attempt to generate tourist revenue than to make it a real ‘model city’, as the official propaganda claims.

“Chinese tourists come, then they visit the statue of Kim Jong Suk and the place where she grew up, and then they are taken to one or other of the restaurants,” the source said. “They drink and make merry then go, all without visiting any scenic spots; thus, the authorities make money.”

As with other tourist operations, it is possible that this small step will lead to a softening of restrictive tourism regulations and potentially the arrival of Western tourists.  But don’t hold your breath!  Chinese tourists have been visiting Sinuiju on a regular basis, but westerners are generally still prohibited from touring the city

Additional Information: 

1. On the opening of Hoeryong’s “Food Avenue”

2. Succession not popular in Hoeryong

Read the full story here:
Model City or Tourist Trap: Hoiryeong Sparkles
Daily NK
Choi Song Min


1st annual China-DPRK Economic, Trade, Culture and Tourism Expo

Sunday, October 14th, 2012

UPDATE 5 (2012-11-7): The China Daily’s English-language Dandong page offers additional details of the expo:

Despite the global economic slowdown, more than 6,000 business representatives from 20 countries signed agreements on more than 200 cooperative projects. Some 72 of the largest projects have a total combined value of $1.26 billion.

During the 11th Five-Year Plan period (2006-2010), total trade value between Dandong and DPRK amounted to $3 billion. Imports and exports between Dandong and the DPRK reached $1.86 billion in 2011.

So far, trade between Dandong and DPRK accounts for 40 percent of total China-DPRK trade, and the volume of the cross-border cargo trade via Dandong port makes up 80 percent of the total Sino-DPRK trade volume.

UPDATE 4 (2012-10-16): Xinhua reports on the closing of the expo:

The five-day 2012 China-DPRK Economic, Trade, Culture and Tourism Expo, held in the border city of Dandong, concluded on Tuesday with 72 agreements of cooperation intent signed. They have a combined value of 1.26 billion US dollars.

Pan Shuang, vice mayor of Dandong, said more than 6,000 Chinese and overseas people from over 20 countries and regions exhibited at and attended the expo. There were talks on 200 projects.

He said the projects related to industries ranging from aquaculture, clothes manufacturing, chemical production, wind power generation equipment, iron steel production to hotel construction.


At the exhibition, the DPRK delegation exhibited ginseng products, food specialties, hand-made Hanbok, a traditional Korean costume, as well as mining and machinery equipment.

Ri Yong Chol, sales manager of Korea Roksan General Trading Corp., which is a ginseng supplier, said “I came to look for Chinese friends and potential business partners. Our company is also seeking opportunities to set up a subsidiary in China to get better access to the Chinese market.”

A Korean girl wearing brightly-colored Hanbok and traditional ornaments was selling costumes. “Our factory can make 20 such hand-made Hanboks a day. The clothes are for important occasions with exquisite workmanship and high-quality material,” she said.

Liu Songyu, chairman of a Korean garment firm from Yanbian Korean Autonomous Prefecture of Jilin Province, was interested in the business.

“Chinese labor costs have been rising fast. In Yanbian, a garment-factory worker’s salary has risen to 2,000 yuan (319 US dollars) a month. While, if the company had a factory in DPRK, it would save a considerable amount on labor costs. I would give a serious thought to that,” he said.

Yanbian is a heavily Korean ethnic populated region in China, where people also wear Hanbok during important occasions.

Elsewhere, Huang Zijun, an authorized dealer of Total Petrochemcial, was overwhelmed to obtain 20 orders from the DPRK delegation during the expo.

“I felt their enthusiasm in promoting business at the expo. I believe the DPRK is a big market for petrochemical products like lubricating oil,” he said.

Here is coverage of the closing in the Daily NK.

UPDATE 3 (2012-10-14): Martyn Williams pointed out this video to me which readers may also find interesting:

Click image to see video at CCTV web page

UPDATE 2 (2012-10-14): According to Xinhua:

An economic, trade, culture and tourism expo jointly initiated by China and the Democratic People’s Republic of Korea (DPRK) opened Friday in the border city of Dandong in northeast China’s Liaoning Province.

A delegation of 500 members from the DPRK is attending the 2012 China-DPRK Economic, Trade, Culture and Tourism Expo, which is scheduled to run from Friday to Tuesday, the event’s organizers said.

Over 400 Chinese companies from 12 industries are also attending the expo.

With the theme of “friendship, cooperation and development,” the expo consists of commodity exhibitions, trade fairs, DPRK art performances, craftwork exhibitions, a border trip to the Yalu River and an exhibition for the tourism resources of the two countries.

Supported by the China Council for the Promotion of International Trade, the event is being organized by the Liaoning Provincial Government.

China is DPRK’s biggest trade partner. Statistics show that bilateral trade volume went up 62.4 percent year on year to 5.64 billion U.S. dollars last year.

Xinhua posted these official photos.

CCTV also covered the expo.  Here is their English-language report:

Here is KCNA coverage of the expo:

The Daily NK also reported on the expo:

A source from Dandong described the unusually vibrant scene to Daily NK yesterday, saying, “The North Korean authorities have mobilized companies from Pyongyang and from here in China to sell goods and pitch for joint venture opportunities. There are loads of people; it’s standing room only.”

The source added that North Korean companies attending the event are pushing very hard to attract investment; notably, by distributing their own promotional literature expounding upon the given company’s superior virtues and providing exact contact details for follow-up inquiries. It is not hard to find meetings continuing in local North Korean eateries, as the North Korean side tries to woo potential sources of capital.

Chinese companies are keen to hear about the joint venture opportunities available, the source also said; and with most of the larger enterprises from China’s three northeastern provinces sending representatives to Dandong for the event, which runs until the 16th, most of the city’s hotels are apparently full to bursting.

However, due to past and present cases of lip service being paid to contractual obligations by North Korean companies whose only goal has been to attract funding rather than build business, Chinese representatives are still very cautious about actually signing on the dotted line.

One such representative from a Dandong-based company with a 10-year history of doing business with North Korea pointed out to Daily NK, “We have seen countless examples of companies making contracts and then there being little contact between the partners thereafter. Unbelievably, one manager I tried some minerals business with last year just changed the name of the company and came back again this year.”

Additional Information:

1. Here is IFES coverage of the expo.

2. The DPRK also held investment seminars back in late September.

UPDATE 1 (2012-6-7): The expo appears to have been pushed back to October 2012. According to KBS:

North Korea and China will jointly hold a fair on economy, trade, culture and tourism in the Chinese border city of Dandong for five days from October 12th.

A Dandong-based newspaper reports that this will be the first comprehensive fair covering several fields that the two countries hold. The paper said the fair will exhibit products, offer trade consultations, hold cultural and art performances and introduce both nations’ tourist attractions.

Roughly 400 Chinese companies exporting to North Korea will participate in the event. About 100 North Korean companies and cultural troupes will partake.

Dandong is China’s largest base for trade with North Korea, with 70 percent of its trade with North Korea running through the border city.

Read the full story here:
N.Korea, China to Hold Joint Industrial Fair in October

ORIGINAL POST (2011-12-3): Dandong to host Sino-DPRK economic and cultural expo. According to Xinhua:

The northeastern Chinese city of Dandong, which borders the Democratic People’s Republic of Korea (DPRK), will host a Sino-DPRK economic, trade and cultural exposition in June next year, a local Chinese official said Saturday.

A series of activities, including a commodity fair, investment and trade talks, tourism exhibition and arts exhibition, will be staged during the exposition, said a spokesman with the Publicity Department of the Dandong Municipal Committee of the Communist Party of China.

The Phibada Opera Troupe of the DPRK, an artists group well known to Chinese people, will give performances during the event, he said.

Adam Cathcart took the time to send me this interesting link to the official Dandong web page.  It contains some videos (in Chinese) in which local officials promote the changes they expect to come to this city as it transitions into a regional trade hub.

Below I have added some links to recent blog posts that a re related to Dandong:

1. Dandong customs house is busy, busy, busy (2011-9-13)

2. Chinese foreign ministry publication frank on Rason and Hwanggumphyong (2011-8-31)

3. New Yalu River bridge in south-west Dandong (2011-6-25)

4. Some alleged guidelines for the Hwanggumphyong SEZ (2011-6-24)

5. DPRK and PRC launch joint Yalu patrols (2011-6-15)

6. Sinuiju SEZ Version 5: Hwanggumphyong-ri and Wihwa Island (2011-6-14)

7. Dandong-DPRK trade and growth (2010-12-2)

8. Future Sinuiju development affecting Dandong today (2010-10-19)

9. DPRK-China trade and investment growing (2010-10-1)

10. Dandong launches DPRK trade program (2010-8-19)


Over 4,000 North korean workers in Kuwait

Sunday, October 14th, 2012

According to Yonnhap:

Some 4,000 North Koreans are estimated to be working at major construction sites in a suburb of the Kuwaiti capital and living in military-style camps run by the North’s government, a Seoul diplomat said Monday.

Impoverished North Korea has recruited its people to work abroad and reportedly kept most of their earnings, one of the few sources of hard currency for the isolated regime. Along with China and Russia, the Middle East is a major destination for North Korean laborers.

“We have figured out that there are around 4,000 North Koreans working at major construction sites to build homes, hospitals and other facilities in a suburb area of Kuwait City, including Jahar,” the diplomat said on the condition of anonymity.

A North Korean worker in Kuwait earns up to US$500 per month, but nearly four-fifths of the worker’s monthly salary is directly deposited into accounts controlled by the North’s government, according to the diplomat.

“A North Korean worker is believed to actually receive $100 per month, with their jobs ranging from plasterers, carpenters, welders to drivers at the construction sites,” the diplomat said.

In April this year, eight North Korean workers were arrested by Kuwaiti authorities for allegedly bootlegging alcoholic beverages, the diplomat said. Alcohol is illegal in Kuwait, making the illicit business of alcohol bootlegging highly profitable.

Additional information:

1. The North Korean company involved might very well be the Korea General Corporation for External Construction (GENCO). Learn more about GENCO here.

2. The Kuwaitis have funded some development projects in the DPRK.

3. Air Koryo has reportedly flown to Kuwait.

4. Michael Madden notes that the DPRK’s ambassador to Kuwait is Ho Jong, who served for many years at the New York (UN) embassy.

Read the full story here:
About 4,000 N. Koreans work at construction sites in Kuwait: diplomat
Kim Deok-hyun


DPRK and the ivory trade

Sunday, October 14th, 2012

As is well known, North Korean embassies self-finance their operational revenue and salaries.  They also remit funds back to Pyongyang.  As far as I am aware, the DPRK may have the only foreign service that is not a drain on the treasury.

Many times, however, the operations in which DPRK officials get involved take palce in the gray and black markets.  I have previously posted about this here, here, here, here, here, here.

This weekend, news surfaced that a North Korean was involved in trading elephant ivory in Africa. According to

The Mozambican customs service on Thursday seized 130 items of carved ivory, valued at about 36,000 US dollars, that a North Korean citizen named Jong Guk Kim was attempting to smuggle out of the country.

According to a press release from the Mozambican tax authority (AT), Jong was returning to Korea, via South Africa, and had already checked in for his flight, when customs officers intercepted him in the departure lounge of Maputo International Airport, and demanded that he open his hand baggage.

The ivory was hidden in several plastic bags. The 130 carved pieces weighed about three kilos.

Ivory can only be exported with the authorisation of the Ministry of Agriculture – if, as seems more than likely, Jong Kim has no such authorisation, the ivory will be confiscated and revert in favour of the state.

The Korean was also carrying 133,300 US dollars in banknotes in his hand baggage. Under current Mozambican exchange regulations, the maximum that anyone can take out of the country without declaring it is 10,000 dollars.

Anything above this sum must be authorised by the Bank of Mozambique.

Jong Guk Kim must now explain how he obtained this money. If he can prove that it came from a legitimate source, he will be allowed to export it – but only through normal banking channels.

The AT also revealed that it had recently seized in Maputo, seven rhinoceros horns, and about a tonne of abalone. Abalone is a genus of marine mollusks, threatened with extinction, due partly to overfishing, and partly to acidification of the oceans arising from climate change.

The abalones seized in Maputo probably came from South Africa. Abalones occur along much of the South African coast, and the South African authorities require permits for any export of this shellfish.

A tonne of abalone is valued at about five million dollars. It is believed that the ultimate destination of the Maputo abalone was Hong Kong.

I tried to locate the press release by the Mozambique Tax Authority but was unsuccessful.

Read the full story here:
Mozambique: North Korean Caught Smuggling Ivory


New statues of the Kims in Kanggye

Thursday, October 11th, 2012

UPDATE: A friend sent in a link to the video of the unveiling that appeared on North Korean television:


Pictured above (Google Earth:  40.971557°, 126.588980°) the old Kim Il-sung statue in Kanggye, Jagang Province.

Satellite imagery is not recent enough to show the change, but KCNA reports that Kanggye City, the capital of Jagang Province, has received new statues of the deceased Kims:

Pyongyang, October 11 (KCNA) — Statues of President Kim Il Sung and leader Kim Jong Il were erected in Kanggye City, Jagang Province.

The statue of Kim Il Sung depicts him standing in his military uniform whose coat flying in the wind, his right hand held high and left hand taking a pair of binoculars. He seems to dynamically arouse the army and people of the DPRK to provide a turning-point in the Fatherland Liberation War. The statue of Kim Jong Il imposingly standing in his padded dress conveying so many stories about the Songun revolution depicts him with one of his hands placed on his waist. His face beaming with a broad smile looks as if he were wishing the great Paektusan power a rosy future.

An unveiling ceremony took place on Thursday.

Present there were Kim Yong Nam, Choe Yong Rim, Choe Ryong Hae, Kim Jong Gak, Kim Ki Nam, officials concerned, service personnel, officials and employees of the units who contributed to the erection of the statues, members of the shock brigades and people and school youth and children in the province.

The statues were unveiled by senior party, state and army officials and leading officials of the province.
A floral basket sent by the dear respected Kim Jong Un was laid before the statues.

Laid there then was a floral basket in the joint name of the Central Committee of the Worker’ Party of Korea, the Presidium of the Supreme People’s Assembly and the DPRK Cabinet.

Also placed there were a floral basket in the name of Jagang Province and floral baskets in the name of the party and power organs, bodies of different levels, enterprises, factories and farms, KPA units, etc. in Jagang Province.

All the participants paid tribute in profound reverence to the statues of Kim Il Sung and Kim Jong Il.

Kim Yong Nam, member of the Presidium of the Political Bureau of the Central Committee of the WPK and president of the Presidium of the SPA, made an unveiling speech.

He said the great Generalissimos paved the way of turning the province, which had been considered as unfit for human habitation, into a good place to live in and made sure that the province took the lead in the drive for building a thriving nation.

Recalling that it was the ardent desire of the people in the province to have statues of the great Generalissimos, he said the statues were erected in a brief span of time on the highest level thanks to their loyalty.

After being briefed on the statues, the participants looked round the statues.

A valued reader pointed out to me some some peculiar language (in the English version of the story). I point it out below:

He seems to dynamically arouse the army and people of the DPRK to provide a turning-point in the Fatherland Liberation War. The statue of Kim Jong Il imposingly standing in his padded dress conveying so many stories about the Songun revolution depicts him with one of his hands placed on his waist.

I have to laugh at the phrase “dynamically arouse”. Someday I will need to work that into a conversation.  And just what would you make of a statue of Kim jong-il “imposingly standing in his padded dress”? If only I was proficient with Photoshop…

This will be the 11th Kim Jong-il statue of which I am aware. At this point we can probably expect new Kim Il-sung and Kim Jong-il statues to go up in all of the provincial capitals.

All of these statues are constructed by the Mansudae Art Studio in Phyongchon, Pyongyang.


Weekend Grab Bag: Chocolate bust, Comrade Kim goes south, Korean War archive footage, Pyongyang Sinmun advert

Thursday, October 11th, 2012

Chocolate bust: On 2012-8-16 this chocolate bust of Kim Jong-un was on display in the Museum of the famous Chocolate supplier Ritter in Waldenbuch, Germany.

Comrade Kim goes Flying: [Official web page here] The new North Korean film got an audience at the Busan International Film festival. According to Yonhap:

The film, which cost approximately 1 million euros to produce, is a three-way collaboration between North Korea filmmaker Kim Gwang-hun, Daelemans, and British entrepreneur Nick Bonner, whose Beijing-based company, Koryo Tours, has been taking global tourists into North Korea since 1993.

“Where this film differs from North Korean movies, though there are North Korean romantic comedies, is that this is a film about girl power,” said Bonner. “It is a film about a young girl achieving her dream — for herself.”

“When we wrote the script it was never our intention to put propaganda in but to make a movie for North Korean people, that is why we had to make those lines,” conceded Daelemans. “We tried to avoid putting a Western stamp on the movie, we wanted to stay as close to North Korean culture as possible.”

The filmmakers say they suffered no censorship from Pyongyang authorities, but there were cross-cultural issues — one of which appears specially designed to sink a romantic comedy.

“In Europe, a kiss is nothing on film, but in North Korea, a kiss is not possible,” said Daelemans. “But that is not so strange — in Bollywood films they don’t kiss either.”

While no romantic comedy might be expected to focus on the North Korean issues that capture headlines — missiles, nuclear programs, human rights abuses, malnutrition — the film’s publicist is working to ensure that cynical reporters pick up the film’s positive vibe.

The Busan audience on Wednesday, largely youthful South Koreans, appeared charmed, laughing at all the right moments.

“It was a bit like South Korean soap operas and home dramas with family settings,” said audience member Hwang Yun-mi, a 32-year-old teacher of English and film studies. “It was not alien to me.”

It is too early yet to discuss commercial releases. Their North Korean partners hold the rights in North Korea, while Bonner and Daelemans have the rights for the rest of the world.

They may hope to fare commercially better than the last European-North Korean co-production: The forgettable Italian-North Korean actioner “Tenzan: The Ultimate Mission” (1988) was described by one reviewer as “truly lamentable.”

However, a key market may be tricky to enter. With South and North Korea technically at war, all Pyongyang media is blocked by Seoul authorities, making it uncertain whether “Comrade Kim” can be viewed by South Koreans outside film festivals, where censorship is lifted.

Even so, Bonner said that South Korean authorities last month granted special permission for the film’s cast to visit South Korea for the festival; unfortunately, there was no time to arrange their visit. And he was delighted at South Koreans’ reaction to the film’s Busan premiere.

“Showing this film here, right now, having Han Jong-shim being loved in the north of the country and for you in the south to love her too — that is more than Anja and me could ever have dreamt,” he said following the screening.

The Associated Press has also released some more footage of the film:

Korean war footage: While exploring YouTube, I found this video made from USAF archival footage.  It shows USAF pilots planning and executing an attack on railway bridges in Anju and what used to be the Nampho Smelter. Quite interesting:

Pyongyang Sinmun Advert: According to the Korea Times:

The ads in the Pyongyang Sinmun include those for flowers and flowerpots; “hanbok” or traditional Korean dress; and a water-heating device using solar power. Analysts say new leader Kim Jong-un is tinkering with the economy after pledging to improve living conditions.

Flower kiosks have gone up in several places in Pyongyang–most notably at the Pyongyang Maternity Hospital (how thoughtful). I suppose flower consumption is on the rise!

The solar powered water heaters are produced in a factory in Mangyongdae. Based on discussions with former North Koreans I assume these water heaters are valued for providing warm bathing water–a rarity for many North Koreans.

This is what wikipedia has to say about the Pyongyang Sinmun:

Pyongyang Sinmun (Pyongyang News) is a North Korean newspaper founded on 1 June 1957 by Kim Il-sung.[1] It launched an online version on 1 January 2005.[2] It is published by the Workers’ Party of Korea Pyongyang Municipal Committee[3] six times per week under the editorship of Song Rak Gyun.[4]

I am not sure where it is found online.


K-Pop: The new ping-pong diplomacy to North Korea?

Tuesday, October 9th, 2012

Date: October 18th (Thursday), 6:30pm
Location: New York: Learning Center, Unification Church, 4W 43rd Street (2 blocks from Grand Central Station)

Tickets are free but seating is limited. To RSVP, please visit us at

There are increasing evidence of outside media trickling into the tightly locked country- South Korean dramas are a hit in the North Korean black markets. Will Korean popular culture (K-pop) be the new ping-pong diplomacy? Will the increase in informational flow have an impact in the general North Korean psyche- is a North Korean Arab Spring to be expected?

Celeste Headlee (NPR, Host/Correspondent)

L. Gordon Flake (Mansfield Foundation, Executive Director)
Nathaniel Kretchun (InterMedia, Associate Director)
Lucas Dixon (Google Ideas, Engineering Lead)


North Korea-China economic, trade, culture, and tourism expo to be held

Tuesday, October 9th, 2012

Institute for Far Eastern Studies (IFES)

North Korea-China Economic, Trade, Cultural, and Trade Expo is scheduled to be held from October 12 to 16, 2012 at Dandong City, Liaoning Province. The expo will be jointly hosted by the China Council for the Promotion of International Trade, Liaoning Provincial Committee, Liaoning People’s Friendship Association, and Dandong Municipal People’s Government.

China accounts for 90 percent of North Korea’s foreign trade. Approximately 70 percent of this trade comes through Dandong. Currently, Dandong is gaining both domestic and international attention as the construction of the New Yalu River Bridge is nearing completion and progress on the Hwanggumpyong and Wihwa Islands Special Economic Zone is advancing.

North Korea-China Economic, Trade, Cultural, and Trade Expo will provide a place for not only product exhibits but will provide consultation for economic and trade cooperation, cultural exchanges and tourism. From the North Korean side, the largest trade investment company and government agency in charge of overseas labor export will be in attendance.

Over 500 booths and sections are ready for the expo and over 5,000 participants from foreign buyers are expected to attend. Over 100 companies and a 300-member economic-and-trade delegation will be coming from North Korea.

North Korea has recently held briefing sessions in Beijing for North Korean SEZs in Rajin and Hwangumpyong and Wihwa Islands from September 26 to 27. This two-day event was organized by the North Korean Committee for the Promotion of Economic Cooperation and China’s private GBD Public Diplomacy and Culture Exchange Center.

This event was an exclusive, invitation-only event, inviting major Chinese companies with investment interest in North Korea. There were over 100 officials from 30 different state-run corporations from North Korea present at the session to provide detailed information about 50 investment projects. The participants were required to pay an entrance fee and news media were prohibited from the event.

China’s Overseas Investment Federation (COIF) and North Korea Investment Office (NKIO) signed an agreementon September 22 to jointly launch the “Special Fund for Investment in North Korea.” NKIO is an overseas investment body subordinate to the Joint Venture and Investment Committee of North Korea (JVIC).

According to a Chinese media source, both states have set 3 billion RMB (476 million USD) as the goal for the fund; but in the initial stage, 1 billion RMB (159 million USD) will be utilized first to develop urgently needed urban infrastructure facilities focusing on mining, real estate, and port industries.


Kim Il-sung Square gets a [relatively] new look

Monday, October 8th, 2012

This is a joint-post with Tad Farrell (

Although North Korean television has yet to profile the recent changes made to the appearance of Kim Il-sung square, we have put the pieces together from a mix of recent tourist photos.

To begin with, the large painting of an austere-looking Kim Il-sung which overlooked the square for decades has been taken down. In addition, the banners featuring the symbol of the Korean Workers’ Party (which flanked the painting of Kim) have been replaced with DPRK national flags.

Top: Removal of Kim Il-sung painting [Before (R), After (L)]
Bottom: Korean Workers Party drape replaced with DPRK flag [Before (R), After(L)]

Kim Il-sung’s image is not absent from the square, however. Newly mounted to the base of the square’s official observation platform are paintings of a now jovial Kim Il-sung joined by a new painting of Kim Jong-il.

Two new portraits replace the previously austere profile of Kim Il-sung

More interestingly, it appears that the square’s paintings of Marx and Lenin have been permanently removed, as first tweeted about by AP’s Jean Lee earlier this summer.

Marx and Lenin no longer adorn the square

Just how long the paintings would remain in the square has been a subject of speculation for years. Beginning in the 1970s Marxism-Leninism was deemphasized in favor of Juche, Kim Il-sung ideology, and Kimilsungism. In 1980 the Workers’ Party’s Sixth Convention formally struck “Marxim-Leninism” from the party charter and amended it to read “The Korean Workers’ Party struggles to practice Kim Il-sung’s ideology”. Finally, as part of the constitutional changes that were announced in 2009, Articles 29 and 40 were amended so they no longer referred to “공산주의” (Communism). The paintings of Marx and Lenin remained through all of this.  It is unclear why now they are no longer appropriate.

UPDATE: Andrei Lankov has written more extensive comments on the DPRK’s treatment of Marxism in  in the Asia Times.