North Korean Economy Watch

UPDATE:  A few weeks ago we were speculating as to whether DPRK women were getting tattoos (see original post below), but it seems this is sadly not the case.  It is more likely that these colorful icons are logos of some kind.  Another visitor to the DPRK this year sent in the following picture:

Click image to see stocking logo on the ankles

Do any readers from China recognize this logo?  I find it hard to believe that stockings made in the DPRK would be so brazen. As an aside, the woman in the picture above is wearing the same shoes as some of the women below.  It looks like thick souled shoes are in this year.

ORIGINAL POST: A recent visitor to North Korea with a very keen eye snapped this photo at Kamsusan Palace:

I have seen tattoos on North Korean men but never on women.  True, these may only be temporary tattoos (more likely since they all seem to match–both in design and in place of application), but this is also interesting.  Given the way the girls went about applying these tattoos it is likely they are trying to signal something.  What?  If anyone can find out more on North Korean tattoos–or where the Pyongyang tattoo parlor is (if there is one)–I will be eternally grateful.  I am not optimistic at this point.

Check out the full set of photos here.

UPDATE: Some readers think these could be logos on stockings.  This would also be interesting.  So would these be a local fashion innovation or imported from China?

UPDATE 2: NOKO Jeans are on sale here and here.

UPDATE : It looks like the NOKO Jeans launch did not go off as expected. The Swedish department store in which the jenas were to go on sale has pulled the plug on NOKO’s retail space at the last minute.  According to the AFP (Via Singapore’s Straits Times):

A SWEDISH department store on Saturday cancelled what was to be the sale of the ‘first ever’ brand of jeans made in North Korea, the Swedish company behind the communist-made dark denims said.

‘Apparently PUB has censored our exhibition/store by shutting it down and ‘confiscating’ the jeans because of the ‘working conditions in North Korea’,’ Jakob Ohlsson of company Noko Jeans told AFP in an email. ‘At first i thought it was a joke but everything has been removed from the store,’ he added.

Mr Ohlsson, along with Jacob Aastroem and Tor Rauden Kaellstigen – all under the age of 25 and with no previous experience in business or fashion – started Noko Jeans in mid-2007, prompted by a desire to enter in contact with isolationist North Korea.

Their designer jeans were to be sold starting on Saturday at Aplace, a boutique that is a tenant of the trendy PUB department store in central Stockholm. ‘A half-hour before opening, we got a call from the head of the department store and he explained to me… that PUB cannot sell the Noko Jeans,’ Kalle Tollmar, the founder and CEO of Aplace told AFP.

‘The explanation I got was that (the store’s management) had taken the decision… that PUB is not the right place, or platform, for this kind of political discussion,’ he said, confirming his store was hoping to continue distribution of the controversial duds at another location.

The Noko sales space at PUB was deserted on Saturday, the jeans removed and and surrounding photo exhibition taken down by the department store’s security. ‘They have it in a locked room at PUB but we have been promised to get everything back on Monday, it’s only for security reasons, they don’t want us to sell the jeans,’ Ms Tollmar said. — AFP

According to the AP:

A Stockholm department store says it won’t carry a new line of North Korean-made designer jeans because it doesn’t want ties to the isolated communist nation.

PUB store spokesman Rene Stephansen says it is “a political issue that PUB doesn’t want to be associated with.”

The Noko Jeans line is the brainchild of three Swedish entrepreneurs who hoped to help break North Korea’s isolation through increased trade with the West.

A spokesman for the retail space where Noko Jeans was selling its product says the jeans were taken off shelves early Saturday.

Noko Jeans spokesman Jacob Astrom says he regrets the decision is looking for a new shop location. The jeans will be available online.

The NOKO web page says that the jeans will be available on Monday, but in Sweden, Monday has nearly come and gone and the jeans are still not for sale on the web.

ORIGINAL POST: NOKO Jeans go on sale today.  According to Reuters:

Designer jeans labeled “Made in North Korea” will go on sale this Friday at a trendy department store in the Swedish capital, marking a first foray into Western fashion for the reclusive communist state.

The jeans, marketed under the “Noko” brand, carry a price tag of 1,500 Swedish crowns ($215) and will share shelf space at Stockholm’s PUB store with brands such as Guess and Levi’s.

Noko’s founders told Reuters they had spent over a year trying to gain access to factory operators in North Korea, and struggled with poor communications and an unfamiliar approach to doing business once inside the country.

“There is a political gap, there is a mental gap, and there is an economic gap,” said Jacob Astrom, one of three Swedish advertising executives behind the project. “All contacts with the country are difficult and remain so to this day.”

The idea for the project was born out of curiosity for North Korea, which has grown increasingly isolated in recent years under Western criticism of its human rights record and nuclear ambitions.

“The reason we did this was to come closer to a country that was very difficult to get into contact with,” Astrom said.

North Korea, a country better known for its reclusive nature than fashionable clothes, rarely allows outsiders within its borders and has virtually no trade or diplomatic relations with most Western countries. Sweden, one of only seven countries to have an embassy in North Korea, is an exception.

But the process of agreeing a deal to produce just 1,100 pairs of jeans — the first ever produced by the country, according to the founders — often proved baffling. E-mails vanished into a void and communications were strained.

At one point they were asked to bring a zinc smelting oven into the country, and a trade representative once asked them to help him find a pirated version of the computer program Adobe Acrobat so he could read files they were sending him.

“Everyone is a manager. Even our chauffeur was some sort of manager,” said founder Jakob Ohlsson, adding that North Korean titles were often confusing.

After being turned down by North Korea’s largest textile company, the group managed to secure a manufacturing deal with its largest mining company, Trade 4, which also happens to run a small textile operations on its site.

“This is often the way it works in North Korea,” said Ohlsson. “Companies seldom specialize and therefore often manage several operations that differ completely from one another.”

During the summer, the trio traveled to the factory in North Korea to oversee the production process and ensure that workers there were treated according to Noko’s guidelines.

“We were forced to operate by micro-management,” Ohlsson said, referring to his experience on the factory floor.

Fashionable novelty seekers can order Noko jeans from the company’s website www.nokojeans.com after December 4, but you are not likely to see a pair on the streets of Pyongyang, North Korea’s capital, anytime soon.

Socialist dress code forbids them.

According to the BBC:

Mr Ohlsson explained black denim was chosen because North Koreans “usually associate blue jeans with America. That’s why it’s a little taboo”.

But the high ticket price for the jeans is not simply aimed at finding an exclusive niche in the market.

Mr Ohlsson admitted: “The reason they are so expensive is that we didn’t have any experience in fashion, trading, or anything like that.”

Read previous NOKO Jeans posts here, here, here and here.

Korea Today Turns 60.  According to Korea Today:

December 4 this year marks the 60th founding anniversary of The Foreign Language Magazines, DPRK.

On the occasion we extend heartfelt gratitude to our readers.

We began to publish our journal, titled New Korea, in January 1950, hoping to help the readers understand how the Koreans had lived before they got free from the Japanese colonial rule and engaged in building a sovereign independent state, what they were aspiring after and what course they would take in the future.

Later the title changed to Korea Today.

The monthly magazine has so far carried policies the Workers’ Party of Korea set forth in each stage of socialist construction, achievements the Korean people made in their implementation, independent and creative life of the working masses and their happiness as well as the history, geography and culture of Korea.

Also introduced are the struggle of the Koreans and other progressive people for reunifying the nation that has been divided into the north and the south for over 60 years and building a new independent world—in various styles and methods.

Published in Russian alone in the initial years, the monthly is now available in English, Chinese, French, Spanish and Arabic, too.

You can get access to Korea Today on the Naenara site.

We’ll do our best to help you know the realities of Korea where building of a thriving nation is on its height, the efforts of the Korean people for national reunification and the struggle of Koreans and other progressive people around the world for a new, free and peaceful world.

It is interesting that Korea Today would remind everyone that their first publications were in Russian and featured Pyongyang’s  Liberation Tower (located here) on the cover.  It removes all doubt about who was actually in control at the time (i.e. not Kim Il Sung). (Новая Корея=New Korea).

Korea Today is full of all sorts of interesting and useless tid-bits on the DPRK–such as this.

Korea Today, Korea, and Kumsukangsan are all published by the Pyongyang Foreign Languages Printing House (also turning 60) located here.

The Soviet equivalent of Korea Today, named Soviet Russia Today, published a piece about the early days of the DPRK by American communist Ana Louise Strong, who was one of the first Americans allowed into the country.  Learn more here.

UPDATE 6 (October 15, 2010): The restaurant has opened a second branch in the Kaeson Youth Park.  This Voice of America article reports on the restaurant’s popularity and offers a bunch of other information that I do not necessarily see at accurate.

UPDATE 5 (November 29):  The origins of the project were featured in a recent article in the Straits Times:

It began two years ago when Mr Quek, managing director of the Aetna Group, which deals in metal and minerals, was approached by his North Korean business partners to invest in the country.

His company has been trading with the North Koreans in steel and minerals for more than 25 years.

Mr Quek then roped in his business friend Mr Tan, whom he had met eight years ago in Shanghai.

Together, they set up Sinpyong International to invest in North Korea.

Asked if he was worried about investing in North Korea, Mr Tan admitted that he prepared himself mentally for red tape.

Initially, the two men mulled over business ideas such as opening a supermarket. But after market research, they were drawn to the idea of a fast-food restaurant.

‘There was nothing like that there at that time. It was probably the only country in the world that doesn’t have fast food,’ said Mr Tan.

Despite neither of them having any experience in the fast-food business, the pair quickly got down to work.

They roped in a third person, Mr Patrick Soh – who holds the franchise in several Asian countries for Waffletown USA – to help them set up the operation and train the local staff in Pyongyang.

Waffletown USA is not a big regional player and it currently has only two franchise outlets in Singapore, in Balmoral Plaza and in Ngee Ann Polytechnic.

Samtaesong, however, is not a Waffletown franchise, Mr Quek stressed. ‘We borrowed the concept and menu, and tapped Mr Soh’s expertise, but it’s not a Waffletown franchise,’ he said.

Early this year, a four-man team from North Korea discreetly came to Singapore to sample the fare at the Balmoral Plaza outlet in Bukit Timah.

‘They tried the food and especially liked the waffle, burgers and fried chicken,’ said Mr Soh, 56, beaming.

Mr Quek said the restaurant’s site was picked by his North Korean business partners. Located in the heart of Pyongyang, it is next to a subway station and within walking distance of various universities and foreign embassies.

In November last year, the Singaporean partners began making trips to North Korea to set up the 246 sq m restaurant. It occupies one floor in a twostorey building and can seat about 80 people.

Furniture, styled after fast-food joints in Singapore, was shipped in from China.

Kitchen equipment and ingredients, such as the seasoning for the fried chicken and the waffle mix, were flown in from Singapore.

The beef and the chicken are sourced in North Korea, while a local factory supplies the burger buns and patties according to Mr Soh’s recipe.

In all, Mr Quek and Mr Tan spent about US$200,000 (S$276,500) to set up the shop.

Mr Soh let on that the menu was modified to appeal to North Korean tastebuds. For instance, the side dish coleslaw was substituted with kimchi, the

spicy pickled cabbage popular among Koreans. The burgers also come with more vegetables.

‘They don’t like the idea of junk food, so we made the menu more healthy,’ Mr Soh said.

Local draught beer is also served along with soft drinks like Coke.

The restaurant has 14 staff members, mostly young women, who don colourful aprons while flipping burgers and cooking french fries.will promote tourism in northeast Asia.

Download a PDF of the Straits Times article here.

Read previous posts about this restaurant below:

(more…)

Back in 2005, the North Korean media was mocked in the western press for encouraging its population to maintain hairstyles consistent with a socialist lifestyle.   Judging by the imagery, this was no laughing matter!

Well, the AFP reports that Rodong Sinmun has once again taken on the task of reminding the population of the importance of tidy hair:

Rodong Sinmun, the ruling-party newspaper, said men should keep their hair short and women should have it tied up.

“To keep your hair tidy and simple… is a very important matter for setting the ethos of a sound lifestyle in the country,” the paper said in its Saturday edition, quoted Thursday by South Korea’s Yonhap news agency.

“A short haircut is the basic style for men,” it said, adding that trimmed hair makes men look “elegant, neat, ambitious and passionate.”

The paper added that “for women to have their hair down and mussed up” does not suit the “people of the revolutionary age.”

Rodong recommended that female students keep their hair short or plaited, middle-aged women have their hair permed or tied and the elderly wear their locks in a traditional bun.

It is too bad the Rodong Sinmun is not on line and in english.  I would love to know how often the public is urged to look after its hair.

Read the full article here:
North Koreans told to keep hair short, tidy
AFP
11/19/2009

Kangsong Taeguk 2012 comes to Hyesan! According to the Daily NK:

According to an inside source, the North Korean authorities have, at the behest of Kim Jong Il, been using the “Mt. Baekdu Tourism Fund’ for improving areas in and around the city of Hyesan in Yangkang Province.

The source relayed the news in a phone conversation with The Daily NK on the 11th, saying, “Recently, many changes have been taking place in Hyesan. At the General’s suggestion, the ‘Mt. Baekdu Tourism Fund’ was channeled to the city, and has been used to dramatically improve the road to and beautify the area around the Samsu Powerplant, as well as creating parks around the Kim Jong Suk Performing Arts Theater.”

In May 2007, after five years under construction, the North Korean authorities held a ceremony for the completion of the Samsu Powerplant. Subsequently, in preparation for an onsite inspection by Kim Jong Il, the beautification of the area around the plant was completed and a new, 24km section of the No. 1 Road running from nearby Wangduk Station (one of a number for the exclusive use of Kim Jong Il) up to the powerplant was constructed.

Construction of the road was apparently extremely difficult, involving removing mountainsides and filling in streams to facilitate the construction of the road, part of that which connects Hyesan with Samjiyeon.

North Korea mobilized around 100,000 people in the period between January 2007 and May 2008 for the work, including 30,000 members of the June 18th Shock Troop, workers from a nearby collective farm, Hyesan Factory and other enterprise laborers.

The construction funds, said to be in the region of $800,000, were sent directly, in cash, to the Party Provincial Secretary and the Provincial Trading Bureau in 2007. They even brought in iron rods, gasoline and diesel fuel from China.

It is apparently difficult for even the vehicles of officials to pass down the No. 1 Road due to the existence of an Escort Bureau checkpoint.

The source also explained about other projects, “Separate from this construction, the project to renovate the road which goes around Wangduk to the Chundong district of Hyesan (where the No. 10 Army Corps Headquarters is located) also began recently (in 2009), and $80,000 has been invested in a beautification project in the area around the Kim Jong Suk theater.”

The road construction project connecting Wangduk and the Samsu Powerplant and the project to repave the existing road from Wangduk Station to the No. 10 Army Corps Headquarters in Chundong were both completed between May 2008 and the end of the “150-Day Battle” in preparation for Kim Jong Il’s inspection of army units in the area.

The beautification of the area around the newly constructed Kim Jong Suk Theater is also noteworthy. The surrounding area contains the No. 7 and No. 8 apartments, which until recently were extremely worn out. Additionally, when an 8-floor apartment next to the No. 7 apartment collapsed in July 2007, some 30 people are said to have lost their lives.

The authorities, while remodeling the No. 7 and No. 8 apartments in an effort to clean up the area, renovated dilapidated apartments and even started a project to lay down Chinese paving blocks in the area.

The Daily NK’s source could not be sure what the original source of the funds was, but confirmed in particular that “it was first tapped under the General’s instructions. Most officials are aware of this.”

On a related note, work on the incomplete Mt. Baekdu-Samjiyeon Railway has still not resumed since its interruption in May. This would seem to indicate that even the Mt. Baekdu Tourism Fund was insufficient for the work.

Read the full story here:
Intensive Public Works Reported in Hyesan
Daily NK
Lee Sung Jin
11/20/2009

Korea Business Consultants has published their October 2009 newsletter.  You can read it here.

Here is the newsletter table of contents:

COVER
– China eyes DPRK’s mineral wealth
– SinoMining acquires 51% of DPRK’s Hyesan Copper Mine
– Transformation and Modernization of North Korea
– DPRK sees peace pact with US as key to disarmament
– US “willing to engage DPRK directly”
– “DPRK Energy Sector Assistance to – Accompany Progress in… Discussions”
– Billy Graham’s son visits DPRK to deliver aid
– Lang visits Seoul

ECONOMY
– DPRK vows to expand trade
– China poised to give substantial aid
– DPRK films looking for joint producers

INTER KOREAN
– Buddhists from south, north call for reopening of Mount Kumgang tour
– Kaesong factory recognized for quality
– Frayed relations hindering development of mineral resources
– ROK aid to north falls
– Lawmakers call for use of rice surplus as DPRK aid
– Farmers demand rice price stabilization

POLITICAL
– Kenya establishes diplomatic relations with DPRK

CULTURE & SPORTS
– Eriksson to coach DPRK?
– DPRK’s Hong battles for gold at World Gymnastic Championships
– DPRK begins preparations for World Cup

KOREA COMPASS
– Mangyongdae
– Korean Proverb

Institute for Far Eastern Studies (IFES)
NK Brief No. 09-11-04-2
11/4/2009

The North Korean monthly publication “Chollima” stressed in a recent (September, 2009) edition the need to improve efficiency in production and administrative activities, emphasizing that if the North is to succeed at becoming an “economic power,” then economic management and administrative activities need to become “informationalized.”

In an article titled “Informationalization of Economic Management and Administrative Activity,” the magazine stated, “In order to meet the demands for science and technology development in the era of the information industry, improvement of the socialist economic management has emerged as an important issue.”

The magazine also offered a solution, suggesting that computers and IT resources be ensured first in order to “informationalize” economic management and administrative activities, and that communications equipment be modernized, stating that construction of basic facilities was an urgent task.

In addition, program industries used in the economic sector should be developed, and planning, statistical, and accounting programs, in particular, need to be connected across the country.

Along with this, the magazine noted that the development of information science is closely related to that of information technology, and that research efforts regarding information science need to be strengthened. The article called for further development of basic elementary management systems education, information theory research, and, of course, systems engineering, legal administration, and other economic science fields.

“Informationalization” of economic management and administrative activities is based on IT resources, and focuses on automating statistical and accounting practices in order to strengthen economic management controls and to boost productivity and efficiency.

On August 11, the Rodong Sinmun also emphasized “informationalization,” referring to the current times as the “information economy age” and the “informationalization age,” stating that “today’s war, absent the sound of gunfire, is a war of brains, a technology war,” and, “technological revolution is bravely marching forward at breakneck speed.”

Apparently Kim Jong il is growing intolerant of North Korean television advertising anything other than how great he and his father are.  According to Yonhap:

“Recently, Kim saw the commercials while watching TV. He was enraged, asking where the commercials came from and describing them as the prototype of China’s early reforms,” one source said.

Starting July 2, North Korea’s television played commercials that showed young women in traditional clothes serving frothy mugs of Taedonggang beer billed as “Pride of Pyongyang.”

Other products, including ginseng and quail, soon followed in television advertisements, which had rarely been seen in the country, generating outside speculation that North Korea may be starting to embrace the capitalist mode of life.

But according to Yonhap News Agency’s own analysis, the commercials disappeared as of the end of August. The sources said Cha Sung-su, the North’s top broadcaster, has also been discharged.

One source said Cha may have been unduly victimized in the case because the commercials were a product of Kim’s earlier instruction to create “more interesting and diverse” television programs.

Cha, 69, is one of Kim’s closest aides, having accompanied him on public inspections at least six times since the leader reportedly had a stroke last year and then recovered.

He is the North’s top television man, having served on the communist country’s broadcasting committee for about four decades. He is also known in North Korea for his numerous poems.

I previously blogged about the beer commercials (as did most other K-bloggers) and included a link to a longer 10-minute “infomercial”.

Here is the actual commercial courtesy of the BBC. Here is the commercial on YouTube (without commercial interruption).

Here is the ginseng commercial (Koryo Insam).

Here is the quail restaurant commercial.

From a recent article in Time:

In recent years, bootlegged South Korean dramas have been flooding into the northern neighbor — part of a recent explosion across Asia in the popularity of South Korean TV shows and music known as the Korean Wave. On the black market in North Korea, American DVDs go for about 35¢; South Korean ones go for $3.75, because of the higher risk of execution for smuggling them in, according to two recent defectors from Pyongyang. The nation’s films and dramas have become so widespread across North Korea that the regime launched a crackdown this fall on North Korean university students, the movies’ biggest audience, and smugglers at the Chinese border, charging some with promoting the ideology of the enemy state.

It seems plausible that South Korean films are more expensive than American films due to political risk, but this cannot be the only factor.  DPRK politics aside, South Korean and American films are not perfect substitutes.  I am willing to bet that some of the price difference can be explained by the language barrier.  North Koreans can watch South Korean films and dramas without reading subtitles.  Some of the stories, characters, and motivations probably make more sense as well.

We can make apriory assumptions all day, however.  We need some data. There is a paper in here for an enterprising economics student living near Dandong.

Read the full story here:
Soap-Opera Diplomacy: North Koreans Crave Banned Videos
Geoffrey Cain
Time
10/29/2009

According to the Daily NK the answer is simple: they won’t get the joke teller in trouble.  For as the article states, “A short tongue can lose a long neck.”

For many years I have been on the lookout for North Korean jokes.  Economic theory tells us that if the penalties are high, then only hysterical jokes will circulate.  The higher the “tax” on jokes, the higher their “quality”.  Kind of like the effects of prohibition on alcohol or drug use.

In the past, I have posted some North Korean humor.  Here is the equivalent of a North Korean stand-up routine (which no South Korean has been able to translate for me yet).  Here are a bunch of jokes that supposedly circulate in the DPRK, though most of them were also told throughout the socialist world.

I know there is humor in the DPRK; I have seen it first-hand.  Every time I have asked a North Korean for examples, however (defectors and those still on the inside), I get nothing. If any North Koreans or friends of North Koreans are reading, please send in some North Korean jokes.