Archive for June, 2018

UN foresees “surge” in humanitarian aid to North Korea

Thursday, June 28th, 2018

Benjamin Katzeff Silberstein

In an interview by UN News, the UN resident coordinator for North Korea foresees that humanitarian aid will increase dramatically as relations (may) warm with the international community:

“For the UN, obviously it would mean a lot,” Tapan Mishra, the UN Resident Coordinator in the Democratic People’s Republic of Korea (DPRK), told UN News, explaining that the 12 June summit between the leaders of DPRK and the United States not only opens up new opportunities for denuclearization and global peace, but would also help UN agencies to raise more funding to meet the country’s humanitarian needs.

He said that humanitarian funding for North Korea has declined dramatically since 2012. In 2017, only 31 per cent of the requested funding has been received. In 2018, the funding situation is even more alarming. Today, only 9 per cent or $10 million of the requested $111 million has been received to assist 6 million vulnerable people in DPRK through the 2018 Needs and Priorities Plan.

The lack of funding has already forced UN agencies to prioritize and scale down lifesaving programming. Chronic food insecurity and malnutrition remains widespread. Around 10.3 million people, or 41 per cent of the total population, are undernourished.

In this exclusive interview, Mr. Mishra talked about how the UN aid operations have continued to deliver despite the operational constraints, how economic sanctions have had unintended consequences for the lives of ordinary North Koreans and how the recent breakthrough to the political deadlock is giving rise to optimism among the people there.

Mr. Mishra leads the UN Humanitarian Country Team, consisting of six agencies on the ground – the UN Development Programme (UNDP), UN Children’s Fund (UNICEF), the World Food Programme (WFP), the UN Population Fund(UNFPA), the Food and Agriculture Organization (FAO), and the World Health Organization (WHO); international non-governmental organizations and other international organizations engaged in humanitarian activities – with many other agencies supporting from outside.

Tapan Mishra: It’s a very important time. Regarding the recent summit that happened in Singapore between the leaders of DPR Korea and the US: it opens up new opportunities for global peace and hopefully stability and denuclearization. And for the UN, obviously, it would mean a lot. This is what we’ve been looking forward to: to have a diplomatic dialogue replace the possible threats of confrontation. And therefore, we hope to see a lot of support of the United Nations in DPRK to serve the people who are most needy and vulnerable, especially from a humanitarian perspective, right away.

The work of the UN could change depending on the “asks” that are made on the UN. The Secretary-General mentioned that the UN stands ready to serve. I see immediately there’ll be a huge surge in terms of humanitarian support that is needed.

As the Secretary-General has noted in his statement, relevant parts of the UN system stand ready to support this process in any way, including verification if requested by the key parties.  If there are other opportunities in the future moving from humanitarian to development, we would be able to look forward to making adjustments in our presence and our work in the future as well.

UN News: Can you describe what the UN country team does now to provide support to ordinary people there?

Tapan Mishra:At the moment, the United Nations Humanitarian Country Team in DPRK is primarily focused on providing humanitarian support to the most needy and vulnerable people. Of the 25.1 million people that are there, we are targeting in 2018 to support about 6 million people who need support – in terms of food security, nutrition, health, water, sanitation and hygiene. That’s what the UN country team and various agencies are providing in DPRK, with the support of the Office for the Coordination of Humanitarian Affairs (OCHA).

UN News: There is a UN strategic framework for DPRK that looks ahead to 2021. So, does that have to be changed according to the recent evolving diplomatic situation?

Tapan Mishra:We, all UN agencies, have signed the strategic framework with the Government of DPRK for the five years from 2017 to 2021. This strategic framework is the equivalent of the UN Development Assistance Framework (UNDAF) in a normal country. The situation in DPRK is quite unique. We could expand from humanitarian to possibly development in the future when the opportunity is right.

The strategic framework is more towards food and nutrition; security; social development services, which includes health, education, water, sanitation, hygiene, et cetera; and resilience sustainability, which includes energy, environment, climate change and disaster risk management.

So, when this scenario changes in terms of moving away from the humanitarian, which is our primary work currently, it may need to be adapted accordingly.

UN News: Do you mean that the recent political situation will be reflected on the strategic framework in the future?

Tapan Mishra:It depends. As you see, the Secretary-General has very clearly stated that the relevant UN agencies stand ready to serve, whether it’s for the verification, or for other support required. If there are adjustments that need to be made, it will be made at the appropriate time.

UN News: Can you describe what life is like for average citizens in North Korea?

Tapan Mishra:The humanitarian situation remains grim for millions of civilians in the country. There are children who are affected by acute malnutrition. Chronic food insecurity and malnutrition remains widespread, driven by the limited availability of arable land – only 17% of land is arable – lack of access to modern agricultural equipment and fertilizers, and recurrent natural disasters. Chronic malnutrition is devastating to young children. A staggering number of children – over a quarter (27.9%) of children under-five –  are stunted.

This will affect them for the rest of their lives. And we have programmes for supporting kindergartens, children, infants, as well as pregnant and lactating mothers, the elderly, and people with disability. So, for them, life is challenging and difficult. There are gaps that need to be met with humanitarian assistance. Therefore, we are – you may have seen the needs and priorities document for 2018 – looking for support from donors to provide us financial assistance to be able to provide humanitarian aid to the people in need.

UN News: How much have economic sanctions affected everyday life in North Korea?

Tapan Mishra:I have raised this issue, not only with the Chair of the UN Sanctions Committee (1718 Committee) that there are unintended consequences of the sanctions that are being seen in terms of the work that we do in the UN and other humanitarian agencies. And we have received good support from the Committee to look into these issues.

UN News: Looking over the last two decades, how has the UN humanitarian operation coped with the fluctuating political situation on the Korean Peninsula?

Tapan Mishra:That’s a very insightful question. In the last two decades, there has been ups and downs. Right now, we’re on a down. In the last three years, the receipt of humanitarian funding has been between only 20 and 30 per cent of the funding that we have requested. And this year, despite all these positive political directions, the funding currently is only at 9 per cent of the $111 million we are seeking.

UN News: So, do you expect that if the positive political development continues, more humanitarian funding will come?

Tapan Mishra:I really hope so. Now that the positive political doors are opening, the summit that perhaps opened the door of complete and verifiable denuclearization, we are hoping that Member States will support the UN and other agencies in providing humanitarian support to the most vulnerable population. And again, hopefully, that will lead to a new increase in the humanitarian support that we are receiving.

UN News: How does a deterioration in the political situation impact the humanitarian operation?

Tapan Mishra:Two or three things. First, humanitarian funding was very badly affected. That really impedes our ability to provide the support needed. So, agencies had to cut down on their programmes because there has been no funding. Second, we’ve had unintended consequences of sanctions. Even humanitarian aid has got affected. Third, the banking channel that we had for getting money in the country completely collapsed. We don’t have an option right now and we are looking for one. So, these three have been major challenges for us if we are to be able to provide the humanitarian assistance in the most effective manner.

UN News: Have you seen any changes in the level of cooperation or contact you have with the Government since last year?

Tapan Mishra: Over the past years, the UN and partners have invested heavily in building confidence and understanding by the government for humanitarian actors and humanitarian interventions. Agencies work according to “no access, no aid”, an approach which is understood and accepted by the authorities. This continued, principled and robust engagement has translated into better access, better monitoring, better programming, and better cooperation.

UN News: Have you seen any optimism among the ordinary North Koreans recently?

Tapan Mishra: Certainly. I haven’t been to DPRK after the summit but I will be going there soon. But what I hear from people, and I’ve been noticing there is a visible optimism and I’m sure everybody is looking forward to moving towards a better and more prosperous future with peace and stability ahead. So, I’m sure there is optimism, not only among the people in DPRK, but among the people in the world. So, this is an era of new peace and stability on the Peninsula, which will bring in hopefully global peace and development.

UN News: Any message you’d like to convey?

Tapan Mishra:The UN has been working there for a long time and, despite all the challenges, we have been serving on the mandates that we’ve had. We stand ready on the ground to do more as needed and we look forward to the support of all Member States in carrying out our mandate, by helping us get more humanitarian funding support, by helping us ensure that the unintended consequences of sanctions is reduced or completely overcome. And hopefully, peace and development will come in the future on the Peninsula. And hopefully, we will have a much better situation globally.

Article source:
INTERVIEW: UN’s top official in North Korea foresees ‘surge’ in humanitarian aid
UN News
2018-06-28

Share

Two Koreas agree on railway improvements

Wednesday, June 27th, 2018

Benjamin Katzeff Silberstein

AP reports on talks between North and South Korea to improve North Korean railways, including a great overview of current railway systems in the country:

North Korea’s state media on Wednesday acknowledged inter-Korean discussions on “issues arising in reconnecting, updating and using the railways on the east and west coasts,” but did not describe that South Korea would be sending officials and experts to examine the country’s aging rail system.

The agreement Tuesday to start joint inspections of North Korea’s railways on July 24 was apparently as far as the rivals could go at the moment. The vows to upgrade the North’s railways and roads will remain purely aspirational until international sanctions against North Korea are lifted and the South is freed to take material steps.

The talks at the border village of Panmunjom were the latest to discuss ways to carry out peace commitments made by North Korean leader Kim Jong Un and South Korean President Moon Jae-in.

During their April 27 summit, when they issued a vague commitment to denuclearize the Korean Peninsula, Kim and Moon expressed a desire to modernize North Korea’s railways and roads and reconnect them with the South. The Koreas are to hold another meeting on Thursday to discuss roads.

South Korean officials say better transport would greatly improve North Korea’s economy by facilitating trade and tourism. It may also provide the South with cheaper ways to move goods in and out of China and Russia. However, some experts say updating North Korean trains, which creak slowly along rails that were first laid in the early 20th century, would require a massive effort that could take decades and tens of billions of dollars. It might be impossible to embark on such projects unless North Korea denuclearizes, which isn’t a sure thing.

THE WEST SIDE

In their summit, Kim and Moon called for “practical steps” toward the “connection and modernization” of railways and roads between South Korea’s capital, Seoul, and North Korea’s Sinuiju, a port town on its border with China, and also along the peninsula’s “eastern transportation corridor.”

During the meeting on April 27, Kim went against the grain of North Korean propaganda by describing the country’s transport conditions as poor and praising South Korea’s bullet train system, clearly communicating an eagerness to improve his country’s rail networks, according to comments provided by South Korea’s presidential office.

In Tuesday’s meeting, the Koreas agreed to start inspections of the North Korean portion of a railway that once connected Seoul and Sinuiju before moving on to railways in the eastern region.

Japan completed a 499-kilometer (310-mile) railway line connecting Seoul and Sinuiju in 1906, mainly to move soldiers and military supplies, before it annexed the peninsula in 1910. The Gyeongui line was separated in 1945 at the end of World War II, when the peninsula was liberated from Japanese colonial rule but also divided between a U.S.-controlled southern side and a Soviet-controlled north. The peninsula remains in a technical state of war after the 1950-53 Korean War ended in an armistice, not a peace treaty.

The Gyeongui line was temporarily reconnected during a previous era of rapprochement between the rivals in the 2000s. The Koreas in December 2007 began freight services between South Korea’s Munsan Station in Paju and North Korea’s Pongdong Station, which is near the border town of Kaesong. The South used the trains to move construction materials northbound, while clothing and shoes manufactured from a factory park jointly operated by the Koreas in Kaesong were sent southbound.

The line was cut again in November 2008 due to political tensions over North Korea’s nuclear program and the hard-line policies of a new conservative government in Seoul.

___

THE EAST SIDE

Japan during its colonial rule completed a 193-kilometer (120-mile) rail line between North Korea’s Anbyon county and South Korea’s Yangyang along the peninsula’s eastern coast in 1937. The Koreas temporarily reconnected the cross-border part of the line between 2007 and 2008 to move South Korean tourists in and out of the North’s scenic Diamond Mountain resort. However, the project never advanced beyond a trial run before South Korea pulled out in June 2008 amid worsening ties.

South Korea has ambitions to significantly extend the eastern “Donghae” line so that it connects its southernmost port of Busan with North Korea’s northernmost industrial cities of Chongjin and Rajin. Seoul hopes the line will eventually link South Korea with Russia and the trans-Siberian railway. South Korea also hopes to eventually reopen a railway between Seoul and North Korea’s eastern coastal town of Wonsan which ran through the middle of the peninsula.

Article source:
Koreas agree to improve North’s railways, but work must wait
Kim Tong-Hyung
AP News
2018-06-27

Share

Shockingly, China’s sanctions enforcement on North Korea eases after the summit

Tuesday, June 19th, 2018

By Benjamin Katzeff Silberstein

In perhaps the least surprising news there ever were, reports are now coming in regular intervals that Chinese enforcement of sanctions on North Korea is becoming less and less strict following the summit between Donald Trump and Kim Jong-un. Kim’s visit today in Beijing will likely speed up the process, but the Chinese enforcement of the sanctions regime would like have become less vigilant in due course regardless.

You’ll have to excuse the sarcastic tone of the title and content of this post, but this is precisely the sort of development that not just this blog, but a whole host of others too, have predicted all along. Trump’s idea that “maximum pressure” would survive through the summit and general process, regardless of what is decided, was always unfounded. That’s just not how these things work. Chinese enforcement of sanctions on North Korea depend much more on political circumstances in the region than on what sanctions the UNSC decides to level. China was always going to let down its guard once tensions de-escalated. Pressure could certainly get back on if things go back to the way they were earlier in the year, but to count on it as a matter of policy, as if it could be done easily or somehow automatically, is unwise or even naive.

To be sure, we shouldn’t draw any far-reaching conclusions from a small number of scattered news reports. But no one should be surprised if the number of reports continues to grow over the coming weeks, and if, one day in a not too distant future, Chinese customs figures of imports from North Korea also start to point upward.

I’ll be gathering articles on the matter in this post. First out is Radio Free Asia from a few days ago:

China is relaxing customs inspections and allowing restricted goods to flow across its border with North Korea, according to sources, despite making assurances that it will continue to enforce sanctions against the reclusive nation until it fully dismantles its nuclear arsenal.

A trader in China’s Dandong city, located in Liaoning province across the Yalu River from the city of Sinuiju in North Korea, recently told RFA’s Korean Service that inspections on trucks heading across the border to the North “have eased significantly,” and that customs officers who “used to check every single item following x-ray scans” are now searching “only around half of all vehicles.”

“In the past, when a truck driver got caught bringing restricted items on the sanctions list, the truck was impounded for a day and could only pass through the border if a fine was paid,” the source said, speaking on condition of anonymity.

“These days, those kinds of trucks [smuggling restricted goods] are fined, but can go through customs right away.”

The trader added that as customs officers have become less rigorous about their checks, “North Korean truck drivers are beginning to regularly smuggle items that are not on their manifestos.”

A resident of Dandong, who also asked to remain unnamed, told RFA that the customs process for North Koreans who travel to his city for personal reasons is also “now much easier,” noting that Chinese customs officers used to require them to open their luggage for inspection, “but they can now pass through after a routine x-ray screening.”

“Alcohol and tobacco products are limited to one bottle of alcohol and one carton of cigarettes, but the custom officers don’t make an issue out of having two or three bottles and a couple of cartons of cigarettes,” the source said.

A businessman based in Dandong, who said he exports clothing illicitly assembled in North Korea to Japan and other countries, told RFA that crackdowns on illegal trade between China and North Korea had also been reduced in recent months, making it easier for him to earn a profit.

“I use illegal vessels to send materials into North Korea and bring out processed clothes via the Yalu River, and it has been so much easier for me to operate these days,” he said.

“It always used to take me a long time to transport the clothing, due to China’s tight security along the border area, but now it doesn’t take long at all.”

Sources in Dandong and the Yanbian Korean Autonomous Region, in northeast China’s Jilin province, said that Chinese border guards ended their tight monitoring of smuggling after Kim made a rare visit to Beijing at the end of March and met with Chinese President Xi Jinping.

At that time, North Korea stopped repatriating workers it had based in China to generate foreign currency for the Kim regime, and even dispatched some additional workers to the country, the sources said.

And ever since Chinese authorities relaxed their controls on smuggling activities, they added, North Korean organizations tasked with generating foreign currency have begun steadily trafficking sanctions-restricted items into China, including iron, non-ferrous metals, chemicals, and seafood.

Trump-Kim summit

Reports of the reduced inspections follow a historic summit between U.S. President Donald Trump and North Korea’s leader Kim Jong Un, held on Tuesday in Singapore, during which Trump “committed to provide security guarantees” to the North and Kim had reaffirmed his “firm and unwavering commitment to complete denuclearization of the Korean Peninsula.”

On Thursday, U.S. Secretary of State Mike Pompeo met with his Chinese counterpart State Councilor Wang Yi in Beijing and told reporters after the talks that “China has reaffirmed its commitment to honoring the U.N. Security Council resolutions” for sanctions leveled against the North for repeated ballistic missile and nuclear weapons tests.

After Tuesday’s summit, China had suggested that international sanctions on North Korea could be lifted, but Pompeo on Thursday said Washington had “made very clear that the sanctions and the economic relief that North Korea will receive will only happen after the … complete denuclearization of North Korea.”

Full article and source:
China Relaxes Customs Inspections on Border With North Korea, Despite Sanctions Assurances
Jonhoo Kim
Radio Free Asia
2018-06-15

 

Dong-a Ilbo reports that several Chinese factories near the border, employing North Korean workers, have started operations back up after being forced to a halt due to the sanctions implementation:

More than 10 Chinese factories located in the border area between North Korea and China resumed operation around Tuesday’s U.S.-North Korea summit. The number of dispatched North Korean workers that showed a downward trend this year started increasing from last month. There are concerns that China would break away from coordination for North Korea sanctions before detailed agreements about denuclearization are concluded.

According to multiple diplomatic sources, a clothing company in Dandong, Liaoning, halted operation at the end of last year when the sanctions of the global community were strengthened but started to operate again in the middle of this month. “They hired more than five North Korean workers before resuming its operation,” said one of the sources. Among more than 600 businesses in Dandong trading with North Korea, more than 100 of them stopped operation last year but a lot of them have recently resumed operation or are preparing to do so.

The number of North Korean workers in China increased by 40 to 50 last month compared to early this year, and by more than 100 this month because of more active trade between China and North Korea. The United Nations Security Council resolution 2397, which was adopted in December last year, states that North Korean workers should return home within 24 months. China actively implemented the sanctions and sent an announcement to factories to return North Korean workers until early this year, but it reportedly has not put a pressure to send them back at all recently.

Full article and source:
More than 10 Chinese factories in border area with N. Korea resume operation
Jin-woo Shin
Dong-a Ilbo
2018-06-19

Share

Does the Trump-Kim summit and declaration mean anything for the North Korean economy?

Tuesday, June 12th, 2018

By Benjamin Katzeff Silberstein

The short answer is: no. One of the most notable absences from the US security perspective was that of CVID – complete, verifiable, irreversible dismantlement of North Korea’s nuclear weapons. From a North Korean perspective, diplomatic hardliners may be asking: what about sanctions relief? Neither the statement at the end, nor Trump’s press conference, gave any word on sanctions relief. The US has said that such relief will only come when CVID is completed, but to get North Korea to go along, it will likely need to make at least partial concessions along the way.

Sanctions relief may well come sooner than that in practice. No one should be under the illusion that Chinese sanctions enforcement, which has been the real key over the past ten months or so, is about adhering to international norms and UN resolutions. China evaluates whether such enforcement is beneficial to its own interests, and up until the late summer or early fall of last year, the consistent answer was “no”. With Trump’s increased pressure, that changed, as trade statistics have shown, with Chinese imports from North Korea plunging. Now that tensions have eased, China’s assessment may well ease too. We’ve already seen signs that goods as well as North Korean guest workers are once again crossing the border. Surely, China will see the Singapore summit’s very occurrence as a sign that it might be far less risky to let up more on sanctions enforcement. It will be crucial over the coming weeks and months to monitor trade flows, reported as well as unreported ones, over the Sino-Korean border.

For anyone curious about Kim Jong-un’s potential as a reformer in the economic realm, the following story by the Daily NK should be of interest:

The North Korean authorities held a video conference with high-ranking Party cadres ahead of the summit with the U.S. instructing them not to use the terms “reform and opening up.” This appears to be a precautionary measure implemented in response to the heightened expectations of North Korean residents for “greater freedoms” arising from the inter-Korean and U.S.-NK talks.

“In order to prevent ideological wavering that may occur among party executives and residents, the authorities organized a meeting on June 4 with organs directly under the authority of the Central Party Secretariat (Chairperson of the Provincial Party Committee, Chairperson of the Provincial People’s Committee, Director of the Provincial Public Security Bureau, etc.), a source in Ryanggang Province told Daily NK on June 10.

“This meeting was conducted via online video conference, hosted by the first vice director of the Organization and Guidance Department of the Central Committee of the Workers’ Party of Korea. The participants were provincial heads and secretaries across major organs, including Party and People’s Committees and the Ministry of State Security; however, the Ministry of People’s Security was not called upon to participate.”

According to the source, at the meeting, the first vice director said that the talks with the U.S. were planned out of necessity.

“He said that we shouldn’t mention reform and opening up from now on and that North Korea will never follow that path,” he explained.

“He told us to just follow our General’s (Kim Jong Un) orders and that the demolition of the Punggye-ri site does not mean we are giving up our nuclear weapons, but that it is the final step in the completion of our General’s nuclear strategy. He said that we shut down the Punggye-ri site because we have to get rid of unnecessary things.”

A source in South Pyongan Province informed Daily NK on June 10, “In a recent high-level executive meeting, there was mention that there will be absolutely no reform or opening up. We have decided not to use these terms.’”

Meanwhile, according to a separate source in Ryanggang Province, the participants of the meeting took part using computers in their own private offices. “In North Korea, there is an intranet called ‘Cheongbong Maeari (Blue Peak Echo)’, whose use by ordinary residents can be grounds for arrest, but can be used freely by party-level agency executives inside the agencies,” the source explained.

In North Korea, where internet use is restricted, it is also known that a nationwide intranet operated by the government called ‘Kwangmyong’ is commonly used. However, it is presumed that there is a separate intranet used only by party executives and government officials.

“After the announcement on the Central Committee’s video conference was made, a Provincial Party plenary meeting was held the next day. The chairperson of the Provincial Party Committee also gathered key officials in the province and urgently passed on the message of the meeting and told them to stay focused and speak and act according to our General’s plans, especially in times like this,” the additional Ryanggang Province-based source said.

“The Chairperson emphasized that regardless of how the talks go, things are going well according to our General’s plans and we should stand together more closely by our General. This video conference seems to be intended to provide assurance that North Korea will not be pushed around by the United States and to prevent unrest and confusion among party executives.”

Article source:
North Korea convenes meeting ahead of talks with U.S. to prohibit use of the terms ‘reform and opening’
Daily NK
2018-06-12

Share

South Korean companies gearing up to rush north

Sunday, June 10th, 2018

By Benjamin Katzeff Silberstein

These days, it seems that scarcely no South Korean company isn’t looking north. Hopes are high that with a diplomatic opening – if this time is different, which we really don’t know – North Korea will be open for business. And aside from some Chinese companies and entities, no other have the know-how and language skills to make investments in North Korea profitable. Indeed, those that have happened have largely been in the realm of “adventure capital”, that is, high risks with the potential of high rewards. It seems that relatively few have reached the latter.

Many South Korean businesses will likely ask that the government underwrite potential investments, given the vast political risk. Moon’s government doesn’t seem completely adverse to this, despite the questions it raises about moral hazard and market fairness.

Looking at the types of investments that companies are talking about, it is hardly a given that they will – if they happen – have a positive, broad impact on the North Korean system and society. See below for the sorts of investments being talked about:

SM Group said it has set up a task force to check the country’s mineral resources, particularly in iron ore. The group said its ownership of South Korea’s sole operational iron ore mine effectively gives it an edge over others in terms of processing know-how and facilities it has on hand.

North Korea’s iron ore deposits are estimated at 50 billion tons worth some 213 trillion won (US$197.7 billion).

Besides resources, companies such as Keangnam Enterprises Co. and Dong Ah Construction Industrial have said they are moving to secure a foothold in the North’s building business once all sanctions are lifted.

Dong Ah said its past experience as a builder for the defunct Korean Peninsula Energy Development Organization that moved to build a light water reactor for Pyongyang could help it win future orders, especially in power infrastructure work areas.

Keangnam said that its participation in Seoul’s Official Development Assistance program for emerging economies will make it easier for it to engage in similar projects in the North if conditions permit.

SM Line Corp said it wants to ship North Korean resources using the country’s cheap labor and explore the opening of new shipping routes and related shore infrastructure.

“Work in the North will be a win-win development for all sides, and this is the reason why the company is looking into the matter,” a source at the shipping line said.

Besides medium-size companies, the large conglomerate Lotte said it has set up a team that can expand business ties not only with North Korea but also Russia and China.

Meanwhile, there has been growing interest by local companies who want to set up operations at Kaesong Industrial Complex in North Korea, which has been shuttered following the North’s nuclear and long-range missile provocations.

Dong-a Publishing said it wanted to take advantage of the low labor costs to set up business in Kaesong.

The company said due to the labor intensive work in the publishing field it makes sense to move its plant to the North.

Related to such moves, a business group representing South Korean firms that had operated factories in Kaesong said recently that upwards of 20 companies a day have called to make inquiries about opening new factories in the special economic zone.

Article source:
S. Korean mid-tier companies interested in biz opportunities in N. Korea
Yonhap News
2018-06-10

Much of what’s being talked about, in other words, is extraction of natural resources. Sure, this would be done with North Korean labor, but even though the domestic economy could get an upswing through these sorts of operations, North Korea wouldn’t necessarily reap the full potential benefits of its mineral assets, which could be sold for much higher prices if they were locally refined and processed. This is likely something that the North Korean leadership is very well-aware of, and Kim Jong-un talked about it in speeches in the 1990s. But given the need for hard currency, they may not see that they have much of a choice in the matter.

Other companies want to get in on the cheap labor. That’s all fine and good for the companies and the potential prospective North Korean employees, but factories of this sort can be set up pretty easily without sourcing raw materials locally, and with few connections with overall North Korean society.

In other words, if these investments come to see the light of day (again, a big “if”), it’s not a given that it’ll be in any way transformative for the North Korean economy. We have seen much of this before, and we know from Kaesong that the state is indeed both capable and willing to contain economic development to specific areas, keeping it separated and in check from broader North Korean society.

Share

China’s economic openings to North Korea after summit(s)

Saturday, June 9th, 2018

Benjamin Katzeff Silberstein

A recent Reuters report looks at some of the ways, including tourism and the restaurant business, through which economic contacts between North Korea and China have increased after the spring of summits:

North Korean officials have toured China to discuss economic development. Speculators are snapping up property along their common border. And South Korea is studying ways to boost engagement with its isolated neighbor to the north.

Across the region, there are signs that U.S. President Donald Trump’s campaign of “maximum pressure” on Pyongyang to give up its nuclear weapons is weakening ahead of his summit with North Korean leader Kim Jong Un in Singapore on Tuesday.

Trump, along with leaders like South Korea’s President Moon Jae-in, have credited the pressure campaign with bringing Kim to the negotiating table through a combination of international sanctions, political isolation, and threats of military action.

However, unless there is a major provocation or resumption of nuclear testing or missile launches by North Korea, strategists and academics say it is unlikely that maximum pressure will ever fully return.

“Trump’s campaign is over,” said Kim Hyun-wook, a professor at the Korea National Diplomatic Academy. “The diplomatic openings with North Korea have already been taking a toll on the maximum pressure campaign.”

Trump has himself said he doesn’t want to use the term “maximum pressure” any more because of improving relations with North Korea.

Joseph Yun, the United States’ former top negotiator with North Korea, told a Senate hearing on Tuesday: “Practically it is not possible to continue maximum pressure when you’re talking with your adversary. I don’t think you can have serious engagement as well as maximum pressure.”

Preparations are already underway in China, South Korea and Russia, which share land borders with North Korea, for better ties with the isolated nation.

[…]

Along China’s border with North Korea, speculators are buying land and traders are stockpiling cheap North Korean coal amid hopes that restrictions will soon be lifted.

“It’ll be good if North Korea opens up,” said a hat seller in the border city of Dandong, who only gave her name as Yang. “The people there are so poor, it’s like China in the 1980s.”

She said the number of North Koreans shopping in the city had dropped in recent months after the sanctions were tightened. But now, she said, property prices in Dandong were being driven up by speculators betting that trade would revive.

Other local people in Dandong said North Korean workers were returning, prompting the opening of some restaurants and hotels.

The owner of one Korean restaurant was training staff on presenting a new menu in preparation for more visitors from other parts of China, including people intending to visit North Korea.

The Liuji Restaurant, which was shut after its owner was investigated in 2016 for dealings with North Korea, reopened in March after Kim’s visit to China, his first trip out of the country since taking office.

It was not clear what happened to the investigations or who the new owner was.

The restaurant’s North Korean staff explained the closing as “renovations.”

On June 5, state carrier Air China announced it would resume regular flights between Beijing and Pyongyang, which officials had indefinitely suspended in November, citing poor demand.

Although the first Air China flight had only around 20 passengers, tour operators said busloads of Chinese tourists were in Pyongyang, their numbers surging in recent weeks because of the lowered tensions.

“I went to the train station (in Pyongyang) and it was the busiest I’ve ever seen it,” said the founder of the Dandong-based INDPRK tour company, who goes by the name Griffin Che. “I’d guess about 100 Chinese tourists arrived by train today. In the past I would see a maximum of 30-40 tourists.”

Che said the prospect of new economic opportunities in North Korea has him interested in branching out beyond tourism into investment and coal trading.

U.S. lawmakers have raised concerns that traders in China are already skirting sanctions, but Beijing-based diplomats say that there is no evidence that China is abandoning its U.N. Security Council commitments.
[…]

Some of that political isolation has been reduced, however, by Kim Jong Un’s meetings with leaders of China and South Korea, and this week’s summit with Trump.

At the end of May, Russian Foreign Minister Sergei Lavrov landed the first meeting between a Russian official and Kim as head of state, and extended an invitation for the North Korean leader to visit Russia.

Russia has long been skeptical of the sanctions regime, and South Korea’s Moon has proposed a three-way study on potential joint projects, including railways, gas and power linking Siberia to the Korean peninsula.

“Even if the summit fails and U.S.-North Korea tensions resurface, Russia is unlikely to support new rounds of sanctions on North Korea,” said Artyom Lukin, a professor at Far Eastern Federal University in Vladivostok.

“If previously adopted U.N. sanctions continue to be in effect, Russia will abide by them, but it will probably find some legal ways and loopholes to make their enforcement as mild as possible.”

Kim has met Chinese President Xi Jinping two times in recent months and analysts say Beijing’s willingness to maintain last year’s level of pressure on North Korea is waning.

[…]

Two North Korean restaurants in Jakarta have shut down.

In Vietnam, two North Korean restaurants in Ho Chi Minh City closed in October last year, but there is still one in Hanoi, owned by a Vietnamese businessman who also runs a shipping company.

The country’s once-close ties with North Korea have been strained over North Korea’s alleged use of a Vietnamese citizen in the assassination of Kim Jong Un’s half brother, Kim Jong Nam, in Kuala Lumpur in February last year.

In March, Vietnam filed a report to the United Nations in which the country said it has “always fully implemented” sanctions on North Korea.

In response to U.S. pressure, Thailand said annual trade with North Korea fell by 94 percent, although some North Korean businesses have continued to operate in the country, including two restaurants in Bangkok.

At the Pyongyang Haemaji Restaurant, North Korean waitress Pak Il Sim said tables were routinely full of customers, most of them Japanese.

When asked if the restaurant had come under pressure from Thai authorities to close, she said: “No, business as normal”.

Full article and source:
Door already ajar: Trump may struggle to isolate North Korea again
Brenda Goh and Josh Smith
Reuters
2018-06-09

Share

South Korea asks for immunity for officials stationed in Kaesong

Tuesday, June 5th, 2018

Benjamin Katzeff Silberstein

While the world gears up for the summit (yes, The Summit), things are moving along on the peninsula as well. Moon promised in the election campaign that he would not only re-open Kaesong, but work to enlarge the zone as well. Last week, South Korea asked that North Korea grant diplomatic immunity for the officials it plans to station in the liaison office the two countries are in the process of establishing in the city:

The two Koreas agreed last week to open a liaison office in the city “at an early date” at high-level talks to discuss steps for implementing promises made by their leaders in the historic April and May summits.

South Korea plans to station its officials there in order to keep communication channels open around the clock as part of efforts to support cross-border exchanges, which are likely to increase.

According to the sources close to the matter, South Korea’s government recently proposed the North grant immunity from arrest and detention for its officials to be stationed in the office, just as the Vienna Convention grants such privilege to diplomats.

In addition, it also proposed that the North guarantee safety of passage and communications for its officials, while exempting them from checks on their bags and pouches, the sources said.

Kaesong is the western border city in the North where the two Koreas operated a joint industrial complex since 2004. It was hailed as a successful example of economic cooperation between the two Koreas as it married South Korea’s capital with the North’s cheap and skillful labor.

South Korea, however, closed its operations there in early 2016 and brought its officials and workers back in protest at the North’s continued missile and nuclear provocations.

Though there was an agreement regarding the safety of South Korean personnel at the time, there was no clear legal ground for the South Korean government to ask for the return of its people in case of their arrest or detention, experts said.

Article source:
S. Korea asks N. Korea to grant immunity to officials at liaison office to open in North
Yonhap News
2018-06-05

It wouldn’t be surprising if moves to open Kaesong come relatively soon, pending the overall diplomatic situation and sanctions regime. Kim Jong-un’s predilection for SEZs is well known and natural, they bring opportunities for making hard currency for the state while keeping systemic changes and capitalist incursion (in the North Korean lingo) contained within a specific geographic area. Some hope that they will eventually bring systemic changes to the broader North Korean society as well, but with Kaesong, we’ve seen no evidence that that is the case.

Share