Archive for August, 2014

Choson Exchange on HGP master plan

Saturday, August 30th, 2014

Choson Exchange posted a picture taken of a billboard in China that shows the master plan for the development of Hwanggumphyong (HGP) Economic Zone.

HGP-master-plan-choson-exchange

Click image for larger version, or visit Choson Exchange here

Here are larger photos of the same billboard:

Choson-exchange-2014-HGP-map-1

Choson-exchange-2014-HGP-map-2

As was revealed in Andray Abrahamian’s report “The ABCs of North Korea’s SEZs“, there is a new construction project underway at the Hwanggumphyong SEZ:

HGP-construction-Google Earth-2014-9-24

It is not known for sure what this building is just yet, but it seems to fall within the “Finance Area” of the master plan.

Share

DPRK still owes Sweden for old Volvos

Friday, August 29th, 2014

According to Newsweek:

North Korea’s foremost trade debt to the western world is bizarre even by North Korean standards. Each time the administration misses a payment, as it has done every year for the past 40 years, we are reminded of one of the most unexpected political twists of the last century: Kim Il-sung scamming Sweden out of 1,000 Volvo 144 sedans.

Each fiscal year, the Swedish Export Credits Guarantee Board calculates interest on a single debt that accounts for more than half of all its political claims. It’s been a tradition since 1974, when the government agency was advised to insure Volvo, Atlas Copco, Kockum, and other Swedish companies’ exports to an entirely new buyer: Supreme Leader Kim Il-sung. For nearly half a century, the Board has been in charge of the Sisyphean task of coaxing €300m from a nation that thinks international law is an elaborate gambit designed by capitalist pig-dogs.

“We semi-annually advise when payments fall due,” Stefan Karlsson, the board’s head of risk advisory, tells Newsweek. “However, as is well known, North Korea does not fulfil their part of the agreement.” Sweden being Sweden and North Korea being North Korea, that’s about as hardball as it gets.

Small wonder that a regime so impressed with itself soon developed expensive taste. “Inside the 144 GL you sit on leather,” reads the unambiguous 1970s marketing material that Volvo likely sent its North Korean buyers. Together with contemporary industry giants Atlas Copco and Kockums, Volvo was one of the first European companies to foray into the North Korean market, and promptly received an order for 1,000 vehicles, the first of which were delivered in 1974. But less than a year later, the venture blew up at a Swedish-Korean industrial trade fair in Pyongyang, where it suddenly became clear that the Kim regime wasn’t actually paying for the goods it was importing – not even the machines it ordered for the expo. The bills were simply piling up.

Exporters realised that the venture had gone horribly wrong. But for the past few years, Sweden had had North Korea fever, with countless hours and funds spent on diplomatic and industrial ties. Acquiescing in a massive failure was not easy. “Many had been blinded by North Korea’s impressive economic growth – people had raced to get there first,” Lamm Nordenskiöld says. “Sweden was supposed to be the first country to unlock this new market.”

While many companies pressed on with payment negotiations in an effort to save face, Swedish media was having a blast unraveling one of the most bizarre trade debacles in recent memory. In an indignant spread featuring a photo of the supreme leader with the caption “Kim Il-sung – Broke Communist,” Åge Ramsby of the newspaper Expressen in 1976 went all out listing reports of other debts the Kim regime shirked, including a cool €5m to Swiss Rolex, from whom it had allegedly ordered 2,000 wristwatches with the engraving “donated by Kim Il-sung”.

“North Korea had expected to pay their foreign debts with deliveries of copper and zinc,” the Swedish newspaper Dagens Nyheter wrote in 1976, referring to the reserves the imported mining equipment was supposed to unlock. “But the North Korean economists had been too optimistic in their calculations, and the international market price for these ores had also dropped ­catastrophically.”

Fair enough – but two things suggest that botched calculations and sheer lack of funds only partially explain North Korea’s failure to pay up. First, it is widely accepted among biographers and manufacturers that the Kim regime conducted extensive industrial espionage during the trade fair. Colluding to cop specs from technology you’re paying for would be weird even by Kim’s standards.

More importantly, Erik Cornell, a diplomat and former Swedish ambassador to North Korea, recalls in his book North Korea: Emissary to Paradise a widespread local belief that the Western world had finally “seen the light” in the global struggle against the American imperialist – that Europe had recognised its duty to assist the brave People’s Republic, and that quibbles regarding who owed whom money would soon dissolve in grand efforts to crush capitalism as a whole.

Adjusted for interest and inflation, the debt to the Swedish state now exceeds three billion Swedish kronor, or €300m. It is an astronomical claim, particularly on capital that has depreciated to a fraction of its original value.

If Kim Jong-un and his officers rounded up all 1,000 vehicles and sold each of them at the current book value of about €2,000, they would raise 0.6% of the debt.

Read the full story here:
North Korea Owes Sweden €300m for 1,000 Volvos It Stole 40 Years Ago – And Is Still Using
Newsweek
John Ericson
2014-8-29

Share

Vietnam recalls traditional North Korean medicine

Friday, August 29th, 2014

Mannyon-rx-factory-2014-8-29

Pictured above: The Mannyon Pharmaceutical Factory in North Korea which produced the banned medicine.

According to Vietnamnet Bridge:

The Bureau of Food Safety of the Ministry of Health on Wednesday decided to take Angunguhwanghwan (안궁우황환), a functional food produced by North Korea, off the market. It will also destroy all of the products, which contained high concentrations of mercury, arsenic and lead.

Test results of this product revealed that it contained mercury and arsenic exceeding the allowed limits. The Central Institute of Drug Testing collected the samples from the LC Tacy Red Ginseng Showroom in Hanoi.

The bureau has asked the firm to stop circulation, revoke and destroy the Angunguhwanghwan product and report the results to the department before August 29.

The product, produced by the Korea General Mannyon Health Corporation Chongryu No2, North Korea, was imported by Mannyon Vietnam. The product was licensed by the Bureau of Food Safety in July 2013.

As reported by the importer, it imported 30 boxes of this product in June 2014, with the purpose of introducing it to the local market. Four of the boxes were tested.

Here is a photo of the product:

Mannyon-rx-factory-product-banned-2014-8

Read the full story here:
N. Korean functional-food item taken off market
Vietnamnet Bridge
Le Ha
2014-8-29

Share

Norwegians seeking to set up art school in DPRK

Thursday, August 28th, 2014

According to the Art Newspaper:

The North Korean government has approved plans by two Norwegian artists to open an art academy in the country. Henrik Placht and Morten Traavik travelled to North Korea together for the first time in August to flesh out the proposal and to look for potential sponsors. So far they have received financial support from the Prince Claus Fund.

The academy is due to be called DMZ after the term for the Korean demilitarised zone. It will primarily be an academy for North Korean students, but the plan is to open it up for international exchange programmes, Placht says.

“One of the reasons for us going to North Korea is that we don’t believe in sanctions and the boycott of art,” Placht tells The Art Newspaper. “Next year we are planning an exhibition and workshop in North Korea, in co-operation with the North Korean government, which will feature well-known international artists as well as North Korean artists,” he adds.

The artists already have good contacts in North Korea thanks to Traavik, who has produced several art projects in the country—some in response to North Korea’s dictatorship. In 2012, Traavik organised The Promised Land, a performance in Kirkenes, northern Norway, in which North Koreans holding flags instructed more than 200 Norwegian soldiers to create sequences of images using individual placards.

That same year, Traavik also produced the first Norwegian arts festival in North Korea, “Yes, we love this country”, named after Norway’s national anthem. Meanwhile, earlier this year, he arranged for musicians from the Kum Song Music School to come to Bergen in western Norway to perform a Norwegian children’s play.

Placht also has experience setting up academies in extreme political contexts. In 2002, he founded the International Academy of Art Palestine, where he was a project director until 2009. “I will be able to draw on my experiences in Palestine when it comes to fundraising, curating and co-operating with the government,” Placht says. “But I will also seek to create trust with North Korea so that they will have a natural ownership of the academy.”

More information here.

Read the full story here:
Norwegian artists plan to open art academy in North Korea
Art Newspaper
Hanne Cecilie Gulstad
2014-8-28

Share

German Government offers TB assistance to DPRK

Tuesday, August 26th, 2014

According to Yonhap:

The German government has provided North Korea with US$600,000 in medical aid via [Caritas International], a U.S. media reported Tuesday.

The Roman Catholic group Caritas International, which was launched in Germany in 1897, has been campaigning to help the needy in the impoverished communist nation, especially those infected with tuberculosis (TB) and hepatitis.

“The German government is providing 450,000 euros [$600,000] to be used for the TB patients in the DPRK,” Reinhard A. Wurkner, a Caritas official in charge of Asia, was quoted as telling the Voice of America. DPRK is the acronym for the Democratic People’s Republic of Korea, North Korea’s official name.

Caritas began its North Korea project in 1996. It has since offered medical and nutritional assistance to TB and hepatitis patients in the country.

Read the full story here:
German gov’t offers US$600,000 in N. Korea aid
Yonhap
2014-8-26

Share

DPRK rice imports from China increase

Monday, August 25th, 2014

According to Yonhap:

North Korea bought US$7.02 million worth of rice from the neighboring country last month, up 115 percent from $3.27 million a year earlier, according to Chinese trade data from the Seoul-based Korea International Trade Association.

The amount also represents an on-month increase of 53 percent from $4.57 million.

The sudden increase in imports comes amid reports that the price of rice has risen sharply in the North.

According to the South Korean online newspaper DailyNK on Aug. 12, rice cost 5,800 won per kilogram in Pyongyang, up 1,550 won from the middle of July.

Read the full story here:
N. Korea’s imports of Chinese rice more than double
Yonhap
2014-8-25

Share

DPRK curtailing family visits to China

Monday, August 25th, 2014

According to the Daily NK:

The number of North Korean residents permitted to visit relatives in China is down significantly from last year’s statistics during the same period. Yet another attempt to regain control, this move is another attempt by the paranoid leadership to block exchanges with the outside world and the plethora of information available there.

A source in China reported to Daily NK on August 22, “In August, there are usually no large events taking place in North Korea, so it’s usually easier for people to visit family members in China then; this year though, that doesn’t seem to be happening.” He went on to explain the reasoning behind the decline, “There is testimony that the North Korean authorities are actively curtailing the number of those going to China for this purpose.”

North Korean residents traversing the border to visit family members in China began in 2000, just after the period of the famine, referred to as the “Arduous March.” As the authorities could no longer provide regular food rations to the people, it resorted to dispatching them to “go abroad and seek help.” Naturally, China presented as the simplest option.

The currency reform on November 30, 2009 sought to curb inflation and monetary overhang but resulted in the inverse, hyperinflation. Residents took to seeking out their brethren in China for assistance to cope with the additional financial hardship. The outcome of the 100:1 redenomination fostered increased mistrust in the authorities by residents as well as mass panic on the ground; most watched helplessly as hard-earned savings were reduced to worthless bits of paper.

The situation this year is vastly different, the source explained. This month has seen daily averages of five North Korean travelers pass through Dandong Customs House, a sharp decline from the 50-100 individuals who moved through on a given day in past years, an indication that the North Korean authorities have drastically reduced visas permitting these visitations.

A similar dip in numbers arose shortly after events commemorating the anniversary of Kim Il Sung’s birth on April 15th, 2014; the daily average of North Koreans advancing through Dandong Customs House was approximately 10 people. This is the busiest time of year in North Korea, as rice-planting season runs from May to June and the entire population is mobilized to work on farms, explaining the decline in those headed to China.

“There are some North Koreans who are still going to China, but most of them are involved in business or trading; general residents are nowhere to be seen. Compared to the annual crowds pouring out after ‘Victory Day,’ [July 27th celebrations marking the signing of the Korean War Armistice signed in 1953, perceived as a victory in the North] this is quite unusual,” he said.

The source interpreted this not as an anomaly, but rather as a measure instigated by a regime gaining confidence in its economic status. This year did see record breaking trade activity between China and North Korea and the relative stabilization of market prices in the North. Rather than seeking help abroad, the North Korean authorities are trying to solve these matters domestically; with concurrent attempts to cultivate a better image internationally.

Most notably, residents’ exposure to outside information in China has given the authorities new pause in their willingness to send them abroad; potential economic gains in China are not worth North Koreans breaking away from state ideology.

“In the past, people only had to offer up the proper amount in bribes to the State Security Department to get them to overlook activities by Christians or others entrenched in ideas acquired on the outside, but now it’s certain they would get caught,” he explained. Now that the authorities are aware of the effects, they are ratcheting up their efforts to stem them, “There are so many who don’t return these days that the authorities fear even bigger problems will arise if they allow people to go [to China].”

“The stringent controls placed on border security and outside phone calls are so much more severe since Kim Jong Eun came to power. The latest in this series of attempts at mind control is to do away with any chance for North Koreans to meet freely with relatives in China,” he concluded.

The upcoming September 9th holiday, which marks the founding date of the state, and the day the Chosun Workers’ Party was founded, October 10th, are both expected to yield even fewer able to enter China to visit family members. While there is always the possibility for the North Korean authorities to expand permission again after the events end, the downward trend is expected to continue.

Read the full story here:
NK Authorities Slash China Visits
Daily NK
Lee Sang Yong
2014-08-25

Share

North Korea increases production of consumer goods according to consumer demands and preferences

Monday, August 25th, 2014

Institute for Far Eastern Studies (IFES)
2014-8-25

Due to the strengthening of capitalism and competition in North Korean society, it appears that the status of consumers has risen considerably.

In the North Korean economy — which has clung to a supply-oriented, planned economic model — it is extremely rare to see production change in response to consumer demands and preferences.

The Rodong Sinmun, the official newspaper of the Central Committee of the Workers’ Party of Korea, published an editorial on August 3, 2014, calling for the “Brisk Opening of the August Third Consumer Goods Production Movement.” This editorial encourages the public by assuring that the consumer products will be made according to the needs and demands of the people.

“A socialist society cannot think about the production of consumer goods that are above the reaches of the people,” the editorial emphasizes, and that “the peoples’ demands and interests are [the Party’s] absolute top priority, and it is the noble duty of the Party to create these desired consumer goods for the people to enjoy.”

Through the use of various media, North Korea has propagandized the “consumer-focused” policy, claiming to have spurred competition and the increase in quality of products and services throughout the nation.

Joguk (Motherland), a media outlet of the pro-North Korean General Association of Korean Residents in Japan, published an article in their August 2014 issue entitled, “The Standard of Competition Is Determined by the People.” The article emphasizes production tailored to consumer demands, saying that “Product evaluation is something which can be done only by those who demand and directly use the product; it can only be done by the general public.”

The article further states that “Products popular among the general public and used by the masses are evaluated accordingly for their high quality.” It also mentions the cosmetic brands “Eunhasu” and “Pomhyanggi” as examples.

In a July 30, 2014 article, the Choson Sinbo introduced the Potong River Shoe Factory, which is responsible for the production of popular products such as the so-called “kill heel” high-heeled shoes, wedge-heeled shoes, and pointed stilettos. By working together with a department store and periodically reviewing customers’ feedback, the Potong River Shoe Factory can produce shoes to cater to shoppers’ preferences.

This method of setting the focus on consumer evaluation can also be found in North Korea’s education system.

On August 7, 2014, the Rodong Sinmun introduced the “bottom-up evaluation” system at Kim Jong Suk Middle School. This process, touted as one of the successes of educational reform, allows students to evaluate their teachers once per semester. By creating competition among educators, this system is expected to have effects all across the nation.

These types of changes are said to have close relations to the Kim Jong Un regime’s policy focusing on light industry, which also accounts for the improvement of standards of living for the people.

It appears that unlike the heavy chemical industry previously emphasized by the Kim Il Sung and Kim Jong Il regimes, light industry must consider not only production amounts, but the quality of the products as well. This inevitably leads to the emphasis being put on consumer product reviews.

Through consumer reviews, competition arises and productivity is increased, leading to the production of consumer goods with higher added value. Despite being called a “Socialist Competition,” in reality this system may not be so different from capitalism.

Share

4th Rason International Trade Fair (UPDATED)

Wednesday, August 20th, 2014

UPDATE 4 (2014-8-22): KCNA reports the following:

DPRK Products Win Popularity at Int’l Trade Exhibition

Pyongyang, August 22 (KCNA) — Products from the DPRK won popularity at the 4th Rason International Trade Exhibition.

Those products, presented by 20 companies, include fur goods, fine art works, handicrafts, different kinds of drinks made with natural vegetables and garments.

The Rajin Drink Factory displayed Paekhwa Liquor, brewed with 100 species of flowers, which is very good for health as it contains rich amino acids and vitamins.

The Rason Samdaesong J.V. Company exhibited various trucks.

Pak Yong Gun, president of the company, told KCNA:

My company manufactures various types of trucks. It also produces containers and others by itself.
We will boost production to the maximum by introducing streamlined process.

Among the popular products were also tens of kinds of health foods, made of edible herbs, wild fruits and honey.

UPDATE 3 (2014-8-21): KCNA reports on investment forum at the trade fair:

Investment Forum Held in Rason of DPRK

Pyongyang, August 21 (KCNA) — A forum on investment in the Rason economic and trade zone of the DPRK took place on the spot on Aug. 19.

It draws companies from Russia, China, Italy, Thailand and other countries taking part in the 4th Rason International Trade Exhibition.

The participants in the forum viewed a video on the natural and geographical conditions of the zone and its development situation and long-term plan.

They were also briefed on the legal guarantee for the zone development, business establishment and management regulations for foreign investors, the situation of foreign companies which have already invested in the zone, the vitalization of tourism, etc.

Then, speeches were made by businessmen of different companies who are willing to invest in the zone.

UPDATE 2 (2014-8-20): KCNA reports that the fair is going well (surprise!):

4th Rason International Trade Exhibition Draws Attention of Businessmen

Pyongyang, August 20 (KCNA) — The 4th Rason International Trade Exhibition is going on in Rason City, the economic and trade zone in the northeastern part of the DPRK.

In this regard, KCNA had an interview with Kim Hyon Chol, deputy director of the Department of Economic Cooperation of the Rason City People’s Committee.

Kim said:

More than 100 local and foreign companies are taking part in the exhibition. The annual exhibition is intent on achieving the economic development common to the DPRK and other countries.

Through the exhibition, businessmen have been acquainted themselves with the development of the Special Economic Zone (SEZ). And they are having discussions on the possibilities of efficient trade while making import and export contracts.

The Rason City has been developed into an international region for relay transport, trade and investment, financial transactions and tourism.

The president of the Rason Noviymir Co. under the Russia-Far-east Investment Co. Ltd, told KCNA:

It is the third time for my company to take part in the exhibition.

I have felt that progress has been made in every exhibition. And it has been well organized.

I hope that the exhibition will boost the cooperation between countries and regions. Especially, I want Russia and the DPRK to further develop the friendly cooperation in the fields of economy and trade.

My company is making investments in producing foodstuffs like sea foods and planning to expand their production and volume of export. I want many more Russians to participate in the exhibition.

Willam Zhao, director of the UNAFORTE Ltd of Italy, said:

It is the first time for my company to attend the exhibition and it feels good.

The DPRK people’s living standard and rate of consumption are high as evidenced by the fact that new goods are popular among them.

I was going to make an investment in the zone from a long ago and have invested in commercial buildings in the city. I hope that the economic trade zone would rapidly develop.

Michael Basset also tweeted a photo of HBOil participating in the fair.

UPDATE 1 (2014-8-18): The trade fair has opened. According to KCNA:

4th Rason International Trade Exhibition Opens

Rason, August 18 (KCNA) — The 4th Rason International Trade Exhibition opened with a due ceremony in Rason City Monday.

The participants in the opening ceremony placed a floral basket before the portraits of smiling President Kim Il Sung and leader Kim Jong Il displayed in the Rason Exhibition Hall and paid tribute to them.

Attending the ceremony were Jo Jong Ho, chairman of the Rason City People’s Committee who is also chairman of the organizing committee of the exhibition, officials concerned, people in the city, and delegates of different countries, those who displayed products in the exhibition and foreign businessmen active in the Rason economic and trade zone.

An opening address was made at the ceremony to be followed by congratulatory speeches.

Speakers noted that the DPRK is dynamically pushing ahead with economic construction and has already laid an institutional and legal groundwork for developing and revitalizing the zone.

They said that the zone is providing economic bodies and companies of various countries and the region with a favorable environment for conducting transit trade, processing trade and tourism in line with their will and wishes. They noted that the exhibition would offer a good opportunity for promoting the friendship and solidarity among countries and further developing wide-ranging and multi-faceted economy and trade.

At the end of the ceremony, the participants looked round electric and electronic goods, light industrial products, foodstuff, daily necessities, medicines, vehicles, etc. displayed by at least 100 companies from the DPRK, China, Russia, Italy, Thailand and other countries.

KCTV footage of the opening can be seen here:

ORIGINAL POST (2014-6-8): Choson Exchange has posted the marketing flyer for the 4th annual Rason International Trade Fair. I repost a larger scan below

4th-rason-trade-fair-1

  4th-rason-trade-fair-2

The 2014 flyer text is nearly identical to the 2013 flyer. All of the names/contacts/accounts/prices are identical. The only difference that I noticed was that two of the domestic phone numbers for the Rason Exhibition Corp. have changed.   Two more remained unchanged.

Here are the event details:
4th Rason International Trade Fair
Exhibition Period: August 18-21, 2014
Venue: Rason Exhibion House
Opening Hours: 9:00-17:00
Application Deadline: July 20th, 2014

Here are posts on previous Rason International Trade Fairs: 2011, 2012, 2013.

Share

North Koreans attend Russian arms expo

Tuesday, August 19th, 2014

According to Yonhap:

North Korea sent a delegation to a Russian arms exposition last week, a news report said Tuesday, in an apparent sign of Pyongyang’s continuing interest in trading arms despite U.N. sanctions.

North Korean government officials attended this year’s Oboronexpo held in Zhukovsky, near Moscow, from Aug. 13-17, Radio Free Asia (RFA) reported, quoting the Russian news agency ITAR-TASS.

The annual arms show puts missile systems, tanks, artillery, and other advanced weapons and relevant technologies on display.

More than 300 defense firms from 11 nations took part in the event.

The RFA, a Washington-based network, said it is possible that the North’s participation was aimed at purchasing weapons.

It has not confirmed whether Pyongyang signed any contracts during the expo, however.

The isolated nation is prohibited from weapons trading under U.N. sanctions imposed in response to long-range rocket and nuclear tests.

Read the full story here:
N. Korea joins Russian arms expo despite sanctions
Yonhap
2014-8-19

Share