Archive for July, 2020

North Korea’s convenient but remarkable admission of likely Covid-19 case

Sunday, July 26th, 2020

By: Benjamin Katzeff Silberstein

So, it finally happened: North Korea has officially admitted the suspected existence of a Covid-19 case in the country. State media claims the virus was brought over by a so-called re-defector, who first left for South Korea a few years ago only to return now, reportedly by swimming across the Imjin river. Some South Korean media speculation seems to confirm that a re-defection did happen, reportedly by someone swimming across the Imjin river, though none of this is confirmed. Here is the North Korean statement in full:

Pyongyang, July 26 (KCNA) — Amid the intensified anti-epidemic campaign for thoroughly checking the inroads of the world’s threatening pandemic, an emergency event happened in Kaesong City where a runaway who went to the south three years ago, a person who is suspected to have been infected with the vicious virus returned on July 19 after illegally crossing the demarcation line.

The anti-epidemic organization said that as an uncertain result was made from several medical check-ups of the secretion of that person’s upper respiratory organ and blood, the person was put under strict quarantine as a primary step and all the persons in Kaesong City who contacted that person and those who have been to the city in the last five days are being thoroughly investigated, given medical examination and put under quarantine.

The Political Bureau of the Central Committee of the Workers’ Party of Korea convened an emergency enlarged meeting in the office building of the Central Committee of the WPK on July 25 as regards the dangerous situation in Kaesong City that may lead to a deadly and destructive disaster.

Kim Jong Un, chairman of the WPK, chairman of the State Affairs Commission of the Democratic People’s Republic of Korea and supreme commander of the armed forces of the DPRK, was present at the meeting.

Attending the meeting also were members and alternate members of the Political Bureau of the C.C., WPK.

Present there as observers were members of the Central Emergency Anti-epidemic Headquarters.

Party and administrative leading officials of the Cabinet, ministries and national institutions, members of the executive committees of provincial Party committees and senior officials of the leading institutions at provincial level were present in the video conferencing rooms as observers.

Upon authorization of the Political Bureau of the C.C., WPK, Supreme Leader Kim Jong Un presided over the meeting.

Despite the intense preventive anti-epidemic measures taken in all fields throughout the country and tight closure of all the channels for the last six months, there happened a critical situation in which the vicious virus could be said to have entered the country, the Supreme Leader said, adding that he took the preemptive measure of totally blocking Kaesong City and isolating each district and region from the other within July 24 afternoon just after receiving the report on it.

To tackle the present situation, he declared a state of emergency in the relevant area and clarified the determination of the Party Central Committee to shift from the state emergency anti-epidemic system to the maximum emergency system and issue a top-class alert.

He specified tasks for each sector to be immediately implemented by Party and working people’s organizations, power organs, public security and state security institutions, anti-epidemic and public health institutions.

The meeting unanimously adopted a decision of the Political Bureau of the Central Committee of the WPK on shifting from the state emergency anti-epidemic system to the maximum emergency system.

He instructed all the participants to immediately conduct follow-up organizational work to carry out the decision of the Political Bureau of the Party Central Committee in their fields and units, and party organizations at all levels and every field to ensure and guarantee the most correct implementation of the directions and assignments of the Party Central Committee with a sense of boundless responsibility, loyalty and devotion.

He underscored the need to thoroughly maintain tough organizational discipline and ensure the unity in action and thinking throughout the Party and society, to keep order by which everyone absolutely obeys and moves as one under the baton of the Emergency Anti-epidemic Headquarters and the need for party organizations at all levels to perfectly perform their role and duty.

Saying that everyone needs to face up to the reality of emergency, he appealed to all to overcome the present epidemic crisis by not losing the focus of thinking and action, practicing responsibility and devotion to be faithful and true to the leadership of the Party Central Committee, being rallied closer behind it so as to defend the welfare of the people and security of the country without fail.

The meeting sternly took up the issue of the loose guard performance in the frontline area in the relevant area where the runaway to the south occurred, and decided that the Central Military Commission of the WPK would get a report on the results of an intensive investigation of the military unit responsible for the runway case, administer a severe punishment and take necessary measures. -0-

(Source: “Supreme Leader Kim Jong Un Convenes Emergency Enlarged Meeting of Political Bureau of WPK Central Committee,” Korean Central News Agency, July 26th, 2020.)

This is of course makes for extremely convenient optics for the North Korean regime, and raises lots of questions.

First, to state the obvious: this would make for an extremely convenient way for the regime to admit the existence of Covid-19 in the country. I have written previously about how unlikely the regime claim of zero cases is. The message is: our anti-epidemic measures, such as closing the northern border, were flawless. But one case still slipped through the cracks. Having a first confirmed case coming in from the south relieves the regime of any awkwardness vis-a-vis China.

Second: this is all still very strange. How can the political and strategic cost be smaller of admitting a glitch in the southern frontline defenses? Look at the text in the statement: “loose guard performance in the frontline area” is not a small thing to admit. It’s far from unprecedented criticism, but still. What does it say about morale and readiness within the army that even at a time of relatively high tensions, “loose guard performance” can happen?

Third and relatedly: this is a lot of fuss for a suspected case. Kim Jong Un not only called an emergency politburo meeting, a major event in its own right. The state has also placed all of Kaesong under lockdown and required anyone that traveled to the city within the past five days to go into quarantine. Just imagine how many people in North Korea must be going around with symptoms that should cause suspicion of Covid-19. The sniffles and a subpar sense of smell and taste should be enough. And yet, this is the first time we’ve seen this sort of alarm.

Fourth: how was this detected, and why was this person specifically taken in for testing? Judging from the statement, he was able to slip back into North Korea undiscovered, only to proceed to move around freely in Kaesong and potentially spread the virus. Was he brought in for testing because he came in from South Korea, or because of specific symptoms? What happens to the undoubtedly more numerous arrivals from China – are they all placed under stringent quarantine? Kaesong is far less connected to the outside world than are other parts of North Korea. The chances of it spreading there but not in the north are…extremely, incredibly slim, at best.

In short, it’s very difficult to buy this as a credible explanation or excuse for a Covid-19 outbreak in North Korea. The virus has most likely been around for some time, perhaps something has now prompted the authorities to need to make an official admission. As always, all we can do is await more information and hope that some questions are answered.

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The Pyongyang General Hospital and Kim Jong Un’s “Benevolent Dictator” Economics

Tuesday, July 21st, 2020

By: Benjamin Katzeff Silberstein 

On Monday (July 20th), Kim Jong Un visited the construction site for the Pyongyang General Hospital and unleashed some rather scathing criticism against the management of the project. An excerpt from KCNA:

Noting that it is making a serious digression from the Party’s policy in supplying equipment and materials to go against the intention of the Party which initiated the construction for the people and mapped out its operation, he severely rebuked it for burdening the people by encouraging all kinds of “assistance”.

Saying that the construction coordination commission failed to solve all the problems in conformity with the Party’s policy line, he said in the strong terms that if such situation is left to go on, the noble plan and intention of the Party which initiated the glorious and worthwhile construction for the good of the people could be distorted and the image of the Party be tarnished.

He instructed the relevant departments of the Party Central Committee to investigate the performance of the construction coordination commission as a whole and replace all the officials responsible and make strict referral of them.

Pointing out that though the construction work of the hospital was being pushed ahead thanks to the patriotic zeal and devoted efforts of the builders […].

(Source: “Supreme Leader Kim Jong Un Gives Field Guidance to Pyongyang General Hospital under Construction,” Korean Central News Agency, July 20th, 2020.)

The Pyongyang General Hospital project was destined for hurdles from the very beginning, as this article explores. Kim has personally emphasized how central it is to finish hospital construction by the deadline of October 10th this year, when the Korean Worker’s Party will celebrate its 75th anniversary.

With such time pressure for construction, worksite conditions were always going to be problematic. The politically motivated deadline, moreover, increases the risk of shoddy construction work. Rather than serve the general public at large, the hospital, whenever finished, is likelier to cater to the sociopolitical elite who can pay their way and, perhaps, to medical tourism.

Kim’s criticism against construction officials, however, is about much more than the hospital construction project itself. It relates to the very structure of the North Korean system, and of communist economies in general. This sort of criticism really is a standard performance in a decades-old genre, where the supreme leader shows himself to be on the side of the people by pinning the blame for any problems and suffering among the population on lower-ranking officials.

Kim’s public criticism of the construction management officials is, in other words, not exceptional, but a standard mechanism and a feature of North Korea’s economic system. Much in North Korean governance may be subject to dynamic change, but the one constant is that the leader can hardly ever be at fault.* To hold this constant, someone else must be blamed when economic plans don’t go the way they should. Never mind that the leader often rules by directives that are often vague and given in off-the-cuff-statements, left to subordinates to interpret and implement as best as they can. Problems like this are almost inevitable in an economy like North Korea’s, still in structure very much a command economy despite significant relaxations over the past few decades.

Thus, when the Soviet Union’s industrialization plan didn’t proceed as intended, it had to be the fault of wreckers working for foreign powers. Stalin himself could never be at fault. In the same way, it cannot, by definition, be Kim’s fault that people are overburdened with requests for “assistance” to help build the hospital. Lower-level bureaucrats have to be the ones to blame, for overburdening the people, because the leader can never be associated with direct pain and suffering in people’s daily lives.

In fact, such “assistance” – often termed “voluntary” – is a mainstay of the North Korean economic system and pretty much has been ever since the beginning. Kim surely cannot have missed the pictures and news reports in his own state media about “active support” from “the people”, and different localities sending construction materials. This sort of “voluntary labor” to gather materials for state projects or work on construction sites is of course not voluntary at all, as staying away would be punishable.

It is a facet of everyday life in North Korea that doesn’t get nearly the attention it deserves, as it often takes up a substantial number of hours. It is also not a new phenomena. The North Korean state has always demanded such “voluntary” contributions from the people to make up for materials and labor that the state cannot produce. Naturally, officials will use whatever means required to make their deliveries, even if these means are forcible. This applies to financial assets as well. The wealthier the trading middle class grows, the more the state will subject them to loyalty payments and the like.

In North Korea’s current situation, what choice does Kim really have but to blame lower officials for failures, and admonish them to do better? The Pyongyang General Hospital is not the only grandiose, heavily publicized project that is doing poorly. The Wonsan-Kalma resort has also been plagued by shortages and delays. The government needs these projects not least for propaganda value, to show to the country that although difficulties abound, all is not hopeless, the economy is still making progress, and people’s living standards will improve. So when none of the projects carrying this message are working out, the government has a problem.

In normal times, the state could have dismantled more economic regulations to make it easier for people to conduct trade and private economic activity. Indeed, though it is difficult to quantify, the state giving room for market mechanisms has been the most important factor for the significant improvements in the North Korean economy over the past few years.

Right now, this is difficult to do, because the state needs to extract more resources, not fewer. Over the past few years, the state has grown increasingly short of foreign currency and other assets, first because of sanctions, and later because of the Covid-19 border shutdown (which has partially ended). As a result, we’ve seen the state cracking down more and more on private business and market actors, to bring in resources as other avenues dry up.

The more difficult things get for the North Korean economy, the more demands increase for “loyalty payments” from private citizens, to fund the mega-projects that Kim has staked so much credibility on. We can expect to see more officials lose their jobs in the future in the same manner as those who got axed after Kim’s hospital construction field guidance.

 

*Such self-criticism does of course happen, but its rarity is attested to by the fact that it (rightfully) makes news headlines. One recent example is Kim Jong Un’s 2017 New Year’s Address.

 

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What explains North Korea’s puzzling price stability?

Friday, July 17th, 2020

By Benjamin Katzeff Silberstein

Looking at the latest market price data from North Korea, things do not look like external conditions dictate that they should. Food prices are…low. Very low. In fact, for the July 1st price report, the average rice price for the three North Korean cities was the lowest on record since April 2019. Gasoline prices haven’t been this low since June of 2018. (Click for larger graphs.)

Average rice prices for Pyongyang, Sinuiju, and Hyesan. Data source: Daily NK.

Average gas prices for Pyongyang, Sinuiju, and Hyesan. Data source: Daily NK.

 

By themselves, these prices are not so surprising. Prices generally fluctuate with seasonal variation, in North Korea as everywhere else. Both gas and rice prices tend to drop around this time of year, at least over the past few years.

But there is nothing normal about 2020. In addition to harsh sanctions, Covid-19 has made almost everything more difficult to acquire from abroad, from fertilizer and food, to machine parts for industry. So these lower prices are puzzling, in a way because they would seem to indicate stability and normalcy at a time when there is nothing stabile and normal about the situation.

There are (at least) two possible explanations:

One is that North Korea’s external conditions are indeed steadily improving, and returning to some sort of normalcy. Strong signs suggest that trade between North Korea and China is picking back up, as relations deteriorate between the US and China and the North Korean issue becomes less and less central on the global stage. As Daily NK has reported, North Korea has been importing items such as construction materials and food from China, both in June and July. Gas prices, moreover, may partially be untouched by Covid-19 because much of the trade goes through a pipeline near Dandong.

Another possibility is that prices are going down because people simply cannot afford higher prices. This report on train ticket prices is perhaps instructive. In the words of one source inside North Korea: “Despite the fall in the number of train passengers, [black market vendors] seem to believe that raising prices would [make it harder to sell tickets],” the source said. “In other words, you could say that a ‘market price’ [for tickets] has appeared that train riders are willing to accept.” In other words, if consumers on a given market have a reservation prices – the highest price they’re willing to pay – underneath what sellers would really charge given the supply at hand, sellers can either cut down on their profit or minimize their losses by selling at a lower prices than those dictated by economic conditions.

As always, information is in short supply, and these market prices raise more questions than they answer.

Update, 23/7/2020:

Part of what’s so puzzling about all this is that reports keep suggesting that the regime is cracking down continuously and with growing vigor against cross-border smuggling and the like. According to this report by Daily NK, Pyongyang recently ordered provincial authorities to intensify their border monitoring.

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North Korea promoting Mt Kumgang tourism

Thursday, July 16th, 2020

By: Benjamin Katzeff Silberstein

Clearly, now is not the best time for tourism promotion. One might wonder what target audience is for the North Korean promotion website for tourism to Mt Kumgang. The website itself isn’t new, but as Yonhap/Korea Herald reports here, it’s recently been updated for the first time in a while. The update of a website perhaps isn’t the most riveting piece of news, but at the very least, it means that someone in some office in North Korea took time out of their day to keep this website maintained and updated with new pictures.

Even in non-Covid times, however, the success of Mt Kumgang under fully North Korean management is doubtful. Without cooperation with foreign partners, Mt Kumgang may meet the same fate as Masikryong, not exactly overcrowded with foreign visitors even before Covid hit. As I wrote in this column when North Korea confiscated Mt Kumgang, the success of the resort likely hinges upon South Korean and Japanese visitors coming in addition to tourists from China.

You can find the North Korean website in question here.

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North Korea gearing up for hard times

Friday, July 10th, 2020

By: Benjamin Katzeff Silberstein

An editorial in today’s Rodong Sinmun emphasizes that fighting the “global pandemic” is more important than economic construction. For Korean-speaking readers, the message comes near the end of the editorial on Friday July 10th, and reads:

그것은 인민들의 생명과 건강을 보호하고 증진시키는것을 최급선무로, 가장 영예로운 혁명사업으로 간주하고있기때문이다.그 어떤 경제건설성과보다 대류행전염병의 침습을 막는것을 더 중요하게 여기고 이 사업에 최선을 기울여야 한다는것이 우리 당의 요구이다.

(Source: 김병진, “인민의 생명안전을 굳건히 지키는것은 우리 당의 제일중대사,” Rodong Sinmun, July 10th, 2020.)

This is not a new message, and it’s been re-stated in various forms in North Korean state media over the past few months. As I write in this article at 38 North, the recent emphasis on the chemical industry carries the same message: don’t expect any major changes in the external economic environment anytime soon, whether it be in conditions relating to sanctions or Covid-19.

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More anti-smuggling measures by the North Korean government

Wednesday, July 1st, 2020

By Benjamin Katzeff Silberstein 

The North Korean government is reportedly clamping down even further on smuggling across the Chinese border. As Daily NK notes, it’s a measure partially directed against corruption, which will most likely just increase bribery amounts. It’s also part of a broader state drive to assert its power over economic activity. Daily NK:

North Korean authorities recently ordered that ships travelling near the Sino-North Korean border must have a security official on board as part of efforts to crack down on smuggling, Daily NK has learned.

“The order concerns ships travelling along the Yalu River and states that they must have a Ministry of State Security [MSS] agent on board,” a source in China told Daily NK on June 25. “The order applies to all ships, regardless of whether they are container ships or fishing boats, and irrespective of their affiliation or purpose.”

Earlier this month, the MSS announced that anyone caught engaging in criminal activity near the border, including smuggling and attempting to defect, will be subject to strong punishments rather than rehabilitative measures, such as time at a forced labor camp.

The announcement of several measures pertaining to illegal activity near the border in the space of a month demonstrates how sensitive North Korean authorities are to smuggling and information leaks in the area.

BREAKING CORRUPTION

The order is also aimed at preventing corruption between local security officials and smugglers, according to the source.

Since it is common for smugglers to bribe local security officials, the MSS will reportedly send agents from the central government rather than local officers to work on the ships.

Smugglers say that the new order will only lead to more expensive bribes.

“You can earn up to RMB 10,000 [around USD 1,412] a day taking goods across the Yalu River,” the source said. “Because there’s so much money to be made, the measures won’t stop the smuggling. Smugglers will just have to pay higher bribes to the security officials.”

(Source: Jang Seul Gi, “N. Korea focuses on ending ship-based smuggling on border,” Daily NK, June 29, 2020.)

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