North Korean Economy Watch

So, it looks like Hummel, a Danish sports apparel company is sponsoring the North Korean national soccer team.

http://www.hummel.dk/Company/Sponsorships/Football/North%20Korea.aspx

KCNA
5/23/2007

Chondoism is the national religion of Korea. The Chondoists are enjoying their religious life to the full under the protection of the DPRK.

It was founded in 1860 with the idea “Man and God are one” as its principle, for the purpose of building an “earthly paradise” under the banner of “Poguk anmin” (defending the country and providing welfare for the people). From the outset, however, it had to undergo suppression of feudal ruling classes and foreign invaders.

Choe Je U, the founder of the religion who had been called the Most Venerable Suun, and the second leader of the religion were killed by the feudal state of Ri dynasty for their anti-feudal and anti-aggressive spirits. During the Kabo Peasant War (1894 – 1895) and the March First Popular Uprising against the Japanese imperialists, hundreds of thousands of believers were arrested, imprisoned and killed cold-bloodedly.

It was the early winter in Juche 25 (1936) that the religion met its true guardian.

President Kim Il Sung appreciated the patriotic nature of Chondoism and met Tojong (a title of a local leader of Chondoist religion) Pak In Jin. He called for firmly uniting under the banner of the national liberation, transcending differences in ideology, religious faith and political view and led a great number of believers to the sacred war against the Japanese imperialists. After national liberation, he aroused them to building of a new country.

Moved by the noble benevolence of the President who embraced and warmly looked after all the people of the country, the wife of Pak In Jin called him as “Heaven” when she was honored with his audience in 1992.

The Chondoists are also enjoying a happy life under the care of Kim Jong Il.

They are leading a free religious life with the building on a beautiful bank of the River Taedong. Chondoists who were elected deputies to the Supreme People’s Assembly are taking part in the political affairs of the country and are doing a lot of good things for the DPRK.

Pak In Jin, Kang Je Ha, Pak U Chon, Ryo Pung Gu and others who contributed to the liberation, prosperity and development of the country were laid to rest in the Patriotic Martyrs’ Cemetery.

Korea Herald
5/23/2007

North Korea’s first film bidding for buyers at the Cannes market provides a rare look at the fortress nation seen through teenage eyes, according to a news report.

“The Schoolgirl’s Diary,” one of only two films produced from Pyongyang last year, chronicles a girl’s life through her school years, grappling with peer pressure and family problems much the same as those the world over, AFP reported.

“It is not pure propaganda,” said James Velaise of Pretty Pictures, who snapped up distribution rights at the Pyongyang filmfest last September, a two-yearly event barred to US movie types but open to a handful of European and Communist nations.

“It’s the first time North Korea has been shown on the market,” Velaise told AFP. The film, which reportedly saw eight million admissions at home last year, or roughly one out of three North Koreans,will be released in France at the end of the year.

The movie, described by trade magazine Variety as “well-lensed,” debuts unexpectedly with schoolgirls in uniform carrying Mickey Mouse bags.

Korea Times
Andrei Lankov
5/20/2007

It’s tough to serve in a foreign mission in Pyongyang. One has to survive difficult conditions, the boredom of long official gatherings, the near absence of a social life. And police surveillance, of course!

The major assumptions on which the North Korean authorities act in their dealings with diplomats and foreign officials is simple: all diplomats are spies, sent to Pyongyang to inflict harm (to a slightly lesser extent, this is applicable to all foreigners). Thus, they should be isolated from any interaction with locals, constantly monitored and fed only with the (dis)information their hosts find suitable.

Such an approach began to develop a long time ago: as early as the mid-1950s the embassies of the supposedly friendly Communist countries complained about restrictions and harassment. Initially, the victims were the likes of Hungarians and Poles, but from the late 1950s, even the Chinese and Soviet Embassies, representatives of Pyongyang’s powerful sponsors, found themselves under constant surveillance.

Every veteran of diplomatic Pyongyang is able to produce his share of anecdotes and stories _ and I think about collecting them one day. For example, Erik Cornel, a Swedish ambassador to the North, related how some diplomats discovered that the newly built embassy buildings were equipped with a network of underground tunnels which would allow the North Korean operatives to get into any compound unnoticed and unopposed. A wife of the Indonesian ambassador noted how she discovered a face staring at her from a hatch in their residence. Obviously, somebody on a covert patrol in the tunnel network lost his way…

This is a rather typical North Korean approach: to compensate for the shortage of expensive high technology with some low-tech ingenuity and resourcefulness!

Indeed, technology is often in short supply. Another story by Erik Cornel is probably worth quoting in full: “The cleaner [of the Swedish embassy] was a youngish, reserved but agreeable lady, who was treated with great respect by others. The gardener once came with a dirty lamp globe which needed cleaning. When he realized that it was she _ and not one of the foreign women _ that he had to ask for help, he crouched down and respectfully lifted up the globe towards her. She also served tables when we gave formal dinner parties and wore the traditional, wide Korean dress of beautiful silk cloth. On one of the first occasions, as ill-luck would have it, a sudden cracking noise emanated from under her skirts as she served dinner _ it sounded like someone was trying to tune into a station on an old-fashioned radio. She abruptly stopped serving and rushed back into the kitchen _ evidently, the tape recorder was malfunctioning.’’

The diplomats had to hire all their own maids, drivers, secretaries, and other local personnel via a special government agency whose main task was to plant as many police agents as possible in these not-so-numerous nests of foreign subversion. Major embassies, like those of Russia and China, avoided the problems by avoiding the local personnel altogether: every single person in the embassy, from the gardener or janitor up, was an ex-pat. This makes sense, especially because the major embassies are probably the only ones that really have secrets to keep (it’s hard to imagine what sort of apocryphal secrets might be kept in the missions of, say, Romania or Austria).

All telephone conversations are intercepted. Pyongyang does not try to deny this _ officials sometimes cite records of intercepted phone talks while dealing with foreigners. Recently, most foreign missions have come with a separate network, which allows their staff to talk to other missions, but restricts their ability to make calls to the North Korean institutions, let alone to private citizens.

On their rare outings, diplomats are frequently followed by plain-clothes police. These guys’ job is not too difficult, since foreigners are highly visible in the Pyongyang crowd.

No diplomat has ever been allowed to meet North Koreans in private. All interactions take place at official receptions, where only a handful of trusted and screened Northerners are allowed to attend.

The attempts to get any meaningful statistics or other data are frustrated by the government, which has not published any hard statistics for four decades. One of my favourite responses explaining this phenomenon is the answer given to the wife of a Cuban ambassador. When she tried to inquire about North Korean burial customs, her counterpart answered: “You know, here, in the Democratic People’s Republic of Korea, people do not die that much!’’ In the late 1980s North Korean diplomats briefly acquired the habit of answering potentially troublesome questions by reading in full the relevant clippings from Nodong Sinmun. If one was unreasonable enough to ask about the expected harvest, he had to spend a long time listening to a reading of a Nodong Sinmun editorial on the flourishing of Korean agriculture under the wise leadership of the “Great Leader.’’

However, some old Pyongyang hands developed techniques which helped them make sense of very subtle hints to be found in the changes of their hosts’ behaviour, or in between the lines of the seemingly meaningless grumbling of the official press.

Bloomberg
Bradley Martin
5/16/2007

For decades, tourists visiting North Korea have been brought to a 200-room, 70,000-square-meter palace completed in 1978 that displays presents to Kim Il Sung, the “Great Leader,” who died in 1994.

Starting with Joseph Stalin’s 1945 gift of a bulletproof railway carriage, the items include a stuffed bird from American evangelist Billy Graham and a piece of the Berlin Wall donated by a German writer.

These days most visiting foreign dignitaries bring gifts for Kim’s eldest son and successor, Kim Jong Il, 65. The junior Kim’s loot is housed in a 20,000-square-meter (215,278-square- foot) annex that was completed in 1996 — a time when a famine was starving tens of thousands of North Koreans.

Why would the country have spent vast sums on four-ton bronze doors and polished marble floors? “Our people couldn’t display all these precious gifts in a poor palace,” says tour guide Hong Myong Gun. “So we built this palace with our best.”

The gifts in the windowless “International Friendship Exhibition” at Mt. Myohyang, a two-hour drive north of the capital, Pyongyang, range from the trivial to the grandiose.

Cable News Network founder Ted Turner donated paperweights with the CNN logo. A tribal chief in Nigeria offered a throne featuring carved lions, with matching crown and walking stick. Romanian communist dictator Nicolae Ceausescu brought the stuffed head of a bear he had hunted and killed.

Giving and Receiving

In Asia, the protocol of gift-giving has been well established since Chinese emperors began expecting visitors to bear tribute. The Chinese know how to give as well as to receive: Pride of place in the exhibit goes to one of their presents, a life-sized wax figure of Kim Il Sung standing on a three-dimensional representation of a lake shore.

Reverent music, calculated to induce bowing, plays in the background of the posthumous gift, the final exhibit viewed by visitors to the hall.

The elder Kim’s title of President for Eternity makes him the world’s only dead head of state, and Hong says he continues to receive gifts. As of last year, his presents numbered 221,411.

“No other president could draw so many presents, so our people live in pride,” she says. “Except for this place, where can you see such a sight?”

The annex for Kim Jong Il, whose titles include secretary general of the Workers’ Party and chairman of the Military Commission, houses 55,423 additional presents, Hong says. As with his father’s gifts, most of them were never used but were immediately donated to the exhibition.

A Dynasty Sedan

Some highlights in the annex: a 1998 luxury sedan from the founder of South Korea’s Hyundai group — the model named, appropriately enough, Dynasty — and two roomfuls of carved, gilded furniture from South Korea’s Ace Bed Co.

From time to time, groups of uniformed soldiers troop past to see the gifts. A high percentage of them are five feet tall or shorter. In the 1990s, North Korea reduced the minimum height for military service to 148 centimeters (4 foot 9 inches) from 150 centimeters and the minimum weight to 43 kilograms (95 pounds) from 48 kilograms, according to South Korea’s National Intelligence Service.

A 2004 World Food Program nutritional survey found that 37 percent of North Korean children suffered chronic malnutrition. The state “bears central responsibility” for the shrinking of North Koreans, says Marcus Noland of Washington’s Peterson Institute for International Economics, co-author of a new book about the famine.

Freeing Up Foreign Exchange

“As aid began arriving, the North Koreans cut commercial food imports, freeing up foreign exchange,” Noland said in an e-mail exchange.

The saved money was used to purchase surplus military aircraft from Kazakhstan and to build monuments “to the recently departed Great Leader Kim Il Sung and his son,” Noland says. If the regime had maintained the rate of commercial food imports during the 1990s, using aid as a supplement instead of a substitute, he says, “the famine could have been avoided.”

Noland estimates the death toll at 600,000 to 1 million; others have said as many as 4 million people may have died.

Tour guide Hong, 27, places the blame elsewhere. “From 1993 to 2000 our people suffered from countless natural disasters and also from other pressure in the economic field owing to the U.S. aggressors,” she says, referring to sanctions. Even during such hardships, she says, constructing the annex with the best materials was “the greatest desire of our people.”

As she speaks, there is a brief power blackout, a frequent occurrence in the energy-short country. When the lights come back on, Hong continues.

“Our people are very grateful because the Great Leader Kim Jong Il sent all the gifts here for the people to look at freely,” she says. “It was our duty to preserve them and show them to the new generation.”

Korea Herald
5/16/2007

A group of Korean-Americans will fly to North Korea on Wednesday for what will be the first family reunion for those living abroad, Yonhap News Agency said.

The group of 15 people will enter Pyongyang through Shenyang, China, by airplane and begin an eight-day visit that will include face-to-face reunions with family members, a view of the North Korean Arirang Festival and a tour of the Panmunjom truce village.

South and North Koreans began family reunions in 1985, but this is the first time that ethnic Koreans living abroad have been officially allowed into the North to see their kin.

Shin Nam-ho, head of the Los Angeles branch of South Korea’s National Unification Advisory Council, visited Pyongyang in February to negotiate the reunion.

The group takes with it some 2,000 bags of fertilizer and vitamin sets for children in the North.

Daily NK
Kwon Jeong Hyun
5/16/2007

National Safety Agency rounds up an arrest

On the 11th, robbers raided the Haeju Historical Museum in Haejoo, North Hwanghae, stealing golden statues of Buddha and ancient Korean pottery worth a large amount, an inside source disclosed.

The source said, “On the night of 11th, golden statues of Buddha and ancient Korean pottery were stolen from Haeju Museum. The exact identity of which Buddha statues and rare artifacts were stolen has not been revealed, however, it appears the goods were rather important considering a special order was given to the border guards and the National Safety Agency has become involved.”

Haeju Historical Museum opened in 1949 and has maintained its heritage for 60 years. The museum displays a collection of ancient Korean pottery from the area and a variety of golden Buddha statues. This museum falls under the same category as the top 5 museums located in North Korea including the Central Historical Museum in Pyongyang and Kaesong Museum, Sariwon Museum and Chongjin Museum.

“If the thief escaped Hwanghae on the day of the raid, then he will be difficult to catch. However, if that is not the case, there is a high chance that the thief will be caught within the next couple of days,” said the source.

He said, “An order has already been made to strictly control the smuggling routes around the border of Shinuiju.” He added, “Stealing historical artifacts and exporting them out of the country is a crime punished with death.”

Following the food crisis in the 90s and early 2000, there were many cases where military officials, security agents and the elite frequently stole historical artifacts. The whole city was affected especially if there were many people living in the area who had inherited historical artifacts from ancestors.

However, for the past 3~4 years, there was a decrease in stolen articles as the number of ancient artifacts had been depleted and furthermore because authorities immediately punished those who stole and sold the goods overseas with capital punishment.

However, as this case shows, stealing a number of articles from museums has continued. In particular, imitations of artifacts have been sold outside the country, and North Korean authorities are facing complaints from foreign buyers. Consequently, there have been cases where affiliated persons have also been executed.

A defector who has experience in selling antiques said, “In 1993, a picture of a Great Monk Seosan was sold in Hong Kong but then returned to North Korea after it was discovered to be a fake. Parties concerned were punished.”

He said, “Precious artifacts are either sent to Pyongyang to be exhibited at the Central Historical Museum or stored separately. A curator affiliated to Mansudae Art Institution then makes a copy and sends it to either the country or, in most cases, puts it on display in Pyongyang.”

He said, “Even if the Japanese buy $10,000 worth of Nihontou (Japanese swords) with the carved seal of a Japanese Emperor, there are still many people who want to possess artifacts from the Chosun Revolutionary Museum. Even I went around until my feet were worn out carrying antiques to make money. However, most of these goods were imitations copied by Mansudae Art Institution.”

Last year, there was one case where a group of 22 people were caught stealing tombstones off royal tombs. Though it is difficult to transport these tombstones, since they weigh a minimum of 500kg and as much as 2-3tons, once they are secretly transported to China, the tombstones sell at a very high price.

The moment North Korean authorities discovered the case, Chinese authorities were contacted and a cooperative investigation begun. The tombstones were redeemed from a storage area in Dandung. At the time, the Chinese dealers were given a heavy fine and the organizer of the North Korean exports, a national security agent, was known to have committed suicide.

Freedom House
5/1/2007

North Korea comes in last place again: 197

Asia-Pacific Region: The Asia-Pacific region as a whole exhibited a relatively high level of freedom, with 16 countries (40 percent) rated Free, 10 (25 percent) rated Partly Free, and 14 (35 percent) rated Not Free. Nevertheless, Asia is home to two of the five worst-rated countries in the world, Burma and North Korea, which have extremely repressive media environments, as well as several other poor performers such as China, Laos and Vietnam, all of which use state or party control of the press as the primary tool to restrict media freedom.

Several bright spots worth noting include Nepal, where wide-ranging political change led to a dramatic opening in the media environment, and Cambodia and Indonesia, which also featured positive movement. Asia saw many negative developments in 2006, however, continuing the downward regional trajectory noted in last year’s survey. Coups and military intervention led to the suspension of legal protections for press freedom and new curbs imposed on media coverage in Fiji and Thailand. Intensified political and civil conflict during the year contributed to declines in Sri Lanka, East Timor and the Philippines. Heightened restrictions on coverage, as well as harassment of media outlets that overstepped official and unofficial boundaries, negatively impacted press freedom in Malaysia, China and Pakistan.

Bloomberg
Bradley Martin
5/10/2007

Since 2002, North Korea has invited visitors every few years to a festival featuring 60,000 dancers, gymnasts, acrobats and musicians, along with card-flippers who create vast pictorial mosaics covering one entire side of the 150,000-seat May Day stadium in the capital, Pyongyang.

The previous performance, in 2005, included noisy and bloody tableaux of North Korean soldiers making mincemeat of enemy soldiers. Last week’s Arirang production — named for a famous Korean love song — was different. Battlefield carnage was replaced with scenes of people seeking higher living standards by rebuilding factories and growing crops.

While North Korea is hardly going pacifist seven months after testing an atomic device, the propaganda shift may signal a significant change in policy, according to expatriate businessmen living in the isolated country. Now that it is a nuclear power, North Korea appears to be directing more resources to improving an economy on its knees after decades of sanctions and isolation, they say.

Korean officials “are now confident they can defend their country,” said Felix Abt, the Swiss president of PyongSu Pharma Joint Venture Co. Ltd., which recently started manufacturing painkillers and antibiotics in Pyongyang. “Their next priority is economic development.”

Consumer Goods

The policy emphasizes light industry to produce consumer goods. It was formally expressed in a joint editorial that was run at the beginning of the year in three major newspapers published by the regime, Abt said.

Getting verifiable information about policies in North Korea is still almost impossible, especially on tightly organized trips for foreigners in which government guides keep visitors on a short leash.

And if the propaganda on display during one of these visits last week can be believed, the government continues to conceive any new economic policy along the lines of a traditional, planned economy, focused on state-owned enterprises where workers are inspired to redouble their efforts and produce miracles of socialist endeavor.

The Arirang show made this abundantly clear. In an act called “Power and Prosperity,” the audience was urged to emulate “youth shock brigade” members and other working people in North Pyongan Province who recently completed Thaechon Youth Power Station No. 4 in spite of catastrophic shortages of food, energy and most other materials that became evident in the early- to-mid-1990s.

`The Power’

The performance illustrated that North Korea needn’t depend on foreign donations, said Kim Song Ho, 32, one of the tour guides assigned to foreign visitors this month. “Our country has the power to live by ourselves,” said Kim, who worked for the World Food Program’s Pyongyang office until the government reintroduced rice rationing in 2005 and told foreign-aid organizations it could manage mainly on its own.

In Thaechon, Kim said, “workers constructed a power station despite the bad situation without any help. Now the slogan is, `We will work like Thaechon Power Station workers.’ We renovated factories, built new factories and now the economy is booming more and more.”

Evidence of such economic change wasn’t included on the tour Kim was guiding. Kim said he would happily show such sites to the foreign visitor another time.

Different Conditions

The development schemes aren’t directly modeled on those of China or Vietnam, locals stressed. “The conditions of the Chinese and Koreans are different,” said Kim Hyon Chol, the 32- year-old chief guide of the tour group. “The biggest difference is that our country is not united.”

The regime has kept its propaganda options open on its military direction.

Billboards in the capital city showed a U.S. and a Japanese soldier both skewered on the same bayonet. And while there was no sequence in the Arirang show celebrating the country’s nuclear explosion or missile tests, a military parade on April 25 to which foreign residents were invited showed off a missile said to be capable of hitting U.S. bases on Guam.

At the Demilitarized Zone, which has divided North from South Korea since the Korean War armistice agreement was signed in 1953, Korean People’s Army Captain Han Myong Gil was asked whether North Korea is safer since its nuclear test. He replied that U.S. and South Korean forces had held huge military exercises even as diplomats talked of trying to bring peace to the Korean peninsula.

`Hostile Attitude’

“The saying goes in Korea, `If there are many clouds, it will soon rain,”’ the 28-year-old career officer said. “We can’t feel safe until the U.S. gives up its hostile attitude.”

Han eventually responded to a question about what he thought of his government’s spending money on a huge military apparatus – – North Korea’s troop strength is the world’s fourth largest — while people don’t have enough food.

“We receive fright and oppression from the U.S., so I cannot hide that our living standard is not high,” Han said. “We were on an arduous march for a long time. Now we are very proud because we defended socialism with the military-first policy. A strong country can defend itself, but the weak will be beaten down.”

Daily NK
Han Young Jin
5/9/2007
“If you have a second child, your rations become equivalent to a family of 4”…citizens respond apath 
 
North Korean authorities have been scrutinizing over the decreasing number of birthrates by young couples and as a result have proposed to increase the amount of rations to families having children.

If a couple gives birth to a second child in the district of Hamheung, South Hamkyung, the whole family will receive 6 months worth of distributions, a source informed. If a third child is born, the rations increase all the more.

After giving birth to a child in a hospital, a married woman from Hamheung can obtain a birth certificate, which is then submitted to the local district office, to receive distributions equivalent to a family of 4. These proposals resemble policies implemented by local district offices in South Korea.

Though Hamheung city has made efforts to increase the birthrate with distributions, the people’s response is all but cold, the source said. How many people would really have a second child just to scavenge off a few months worth of distributions.

One of the main reasons that the birthrate is decreasing in North Korea is due to the fact that women are avoiding giving birth, informed the source.

The source said, “Nowadays, North Korean women engage in businesses and are the breadwinners of the family. They are not satisfied with just having children and bringing them up” and added, “Everyone knows that it is hard enough to live and even harder if you have a lot of children.”

North Korea’s birthrate has continued to decline since the late 1990’s. The average birthrate in North Korea in 1993 was 2.1 births per family and in 2002, 2.04. Comparatively, in South Korea the birthrate per family in 1970 was 4.53 and 1.19 in 2003. Within a period of 33 years, the number of childbirths per family had reduced to 3.34 persons.

In an interview with the Jochongryeon last December, Kang Nam Il, head of the North Korea Population Research Center said, “The decrease of birthrates in our country (North Korea) is no different to that of other nations” and remarked, “Women want to have 2 children, though in the cities women have either 1 or 2 children.”

The source said, “There may be slight differences in each district. Nonetheless, most of the larger cities have adopted this proposal” and added, “This policy was implemented as North Korean authorities are finding it difficult to reach the quota for conscription and the number of students enrolling in schools.”