North Korean Economy Watch

Pictured Above (Google Earth):  State (Drama) Theater before its most recent renovation

According to KCNA:

Pyongyang, October 8 (KCNA) — General Secretary Kim Jong Il gave on-the-spot guidance to the newly built State Theatre and visited artistes’ new flats.

He provided on-the-spot guidance to the newly built State Theatre.

The more than 620-seater theatre has all facilities necessary for art creation, performing activities and audience ranging from stage, latest sound and lighting facilities, rehearsal rooms, make-up rooms to an annex and welfare and service amenities.

He went round the exterior and interior of the theatre to learn in detail about its construction.

The theatre good in its interior structure and built on a high level is flawless in its architectural substance and style as a cultural and art edifice, he said, highly appreciating the feats performed by soldier- builders in successfully building the theatre of eternal value and extending thanks to them.

Noting that it is an astonishing miracle indeed that they completed the construction of such modern theatre to be proud of in a matter of little over four months, he stressed that this signal success is a striking manifestation of the inexhaustible mental power of the soldiers of the Korean People’s Army, the creators of the revolutionary soldier spirit.

The theatre which is a good combination of national and classical beauty and contemporary beauty and looks elegant, magnificent and exquisite is an excellent cultural edifice meeting the need of the new century, he noted, expressing great pleasure over the fact that it has become possible to hand one more valuable treasure to posterity.

He set forth tasks to be carried out to manage and operate the theatre.

He visited the families of the artistes who have just moved to the new apartment houses on the bank of the River Taedong.

He looked round the exterior and interior of the flats for hours to acquaint himself in detail with their construction.

The apartment houses for artistes are ultra-modern flats built according to the party’s plan and intention to provide the people with the best living conditions, he said, adding that these flats are a model and standard for the construction of the houses to be used by all the people in a thriving nation.

Noting that the flats for artistes were designed well and built on the highest level, he highly appreciated the feats performed by the soldier-builders in completing them in a short span of time and extended thanks to them.

Then he visited the families of Paek Sung Ran, Choe Kum Hyang and Kim Chol Jin, actresses and actor of the State Theatrical Troupe, and Ri Ji Yong, head of the troupe, who have just moved to the new flats.

After congratulating them on their moving to the new flats and having cordial talk with them, he took deep care of every aspect of their living as a real father would do. He bestowed upon them such great benevolence as presenting them with household articles in token of his visit.

He praised the artistes, noting that the artistes intensely loyal to the Party and the leader are the reliable sentinels standing on the ideological front to powerfully encourage the masses in the drive to implement the Party’s policies.

Noting that the Korean people’s age-old ideal and wishes are becoming a brilliant reality thanks to the high-pitched drive for effecting a great surge, he said that this stirring event in the era of the Workers’ Party has put on the horizon a rosy future of a thriving nation of Juche which will stand imposingly on this land.

Making the rounds of streets of the capital city taking on new looks day by day on the same day, he advanced highly important tasks which would serve as guidelines for turning Pyongyang into a more magnificent and beautiful city.

Noting that housing construction is of very weighty significance in settling the issue of the people’s living, he stressed that as an immediate task it is necessary to complete in the shortest possible period the construction of flats for 100,000 families in the city as modern as the apartment houses now standing in Mansudae Street and the newly built apartment houses for artistes.

He expressed great expectation and conviction that all the builders of the capital city would work new miracles in its construction in the new century and thus once again demonstrate the revolutionary spirit of the service persons and people of the DPRK, the successors to the great history and tradition.

He was accompanied by Kim Yong Nam, Choe Yong Rim, Ri Yong Ho, members of the Presidium of the Political Bureau of the WPK Central Committee, Kim Yong Chun, Kim Ki Nam, Choe Thae Bok, Yang Hyong Sop, Kim Kyong Hui, Kang Sok Ju, Ju Sang Song and Hong Sok Hyong, members of the Political Bureau of the WPK Central Committee, and Jang Song Thaek, Kim Yang Gon, Kim Yong Il, Pak To Chun, Choe Ryong Hae, Ju Kyu Chang, Ri Thae Nam, Thae Jong Su, Kim Phyong Hae, U Tong Chuk, Kim Jong Gak, Kim Chang Sop and Mun Kyong Dok, alternate members of the Political Bureau of the WPK Central Committee.

Before this news release, the theater was known as the “State Drama Theater”.  KCNA reports only two performances here since 1996: here and here.

What is strange is that this is the second major renovation of the rarely-used theater in a decade.  Below is a satellite image of the theater’s first renovation in June 2000 (Google Earth):

Here is a picture of the facility as it appears today (Daylife.com):

The new housing for the theater’s “artistes” does not appear on available satellite imagery, but its location is easy enough to determine using KCNA photos.  Below is a picture of the new buildings as well as a photo of the location next to the Pyongyang’s central district market:

Even when the official marketplace is closed, there is still plenty of street trading.

Click image for larger version
38°21’32.50″N, 125°29’1.18″E
Sept 9, 2009
Google Earth/GeoEye

Sinchon also appears to be getting some 2012 construction support.  The city is building a new stadium and park with open air theater and pavilion:

Click images for larger versions
38°21’16.36″N, 125°28’48.94″E
October 2, 2006 (L), Sept 9, 2010 (R)
Google Earth/GeoEye

For the same reasons that President Obama has a tendency to take visiting dignitaries to my favorite hamburger restaurant in Arlington, VA, the North Koreans have designated “friendship farms” for countries the North Koreans enjoy or expect to enjoy cozy relations.  Below I have identified a few for you to check out on Google Earth.

DPRK-Iran Friendship Ripsok Cooperative Farm

Coordinates: 39°28’34.69″N, 125°29’48.92″E
This farm has been mentioned in this capacity in KCNA four times: here, here, here, and here.
Date first mentioned: May 17, 2007

DPRK-Russia Friendship Kochang Cooperative Farm

Coordinates: 38°58’3.82″N, 125°36’4.67″E
It has been mentioned in KCNA at least 26 times.  See here.
Date first mentioned:  June 23, 1999

DPRK-China Friendship Thaekam Cooperative Farm

Coordinates: 39°15’4.41″N, 125°41’53.06″E
This farm has been mentioned at least 29 times in KCNA.  See here.
Date first mentioned: June 1, 1997

I have also located friendship farms for: Laos, Poland, Cuba, Bulgaria, Vietnam, Malaysia,  Indonesia, Germany, Palestine, Cambodia, Mongolia, India, Syria, Nigeria, Libya, Egypt, New Zealand, Yugoslavia, and Pakistan.

The United States does not yet have a friendship farm in the DPRK, but maybe someday it will be Osan-ri in Sunan-kuyok, Pyongyang. This is where the Fuller Center plans to launch a housing project. Their planned location and site plans are posted below.

Jimmy Carter, who founded Habitat for Humanity, has recently endorsed this project. (UPDATE: more here and here)

Thanks again to Google Earth and GeoEye.

According to Arirang News:

South Korea’s Unification Ministry on Wednesday finally endorsed the Inter-Korean Cooperation Fund worth 8 billion won, or roughly 7 million US dollars in an effort to help North Korea recover from the aftermath of summer floods.

The total cost of aid to be sent is about 12.2 million dollars with about 7 million donated by the Council for the Promotion of Inter-Korean Exchange and Cooperation, chaired by Unification Minister Hyun In-taek and the rest coming from Seoul’s agriculture ministry.

The money will buy 5-thousand tons of rice to be shipped on October 25th from Gunsan Port to the North Korean city of Sinuiju.

Other aid includes 10-thousand tons of cement, three million cases of cup noodles and medicine.

Read the full story here:
S. Korea Endorses US$7 Mil. Inter-Korean Cooperation Fund
Arirang News
9/30/2010

According to the Daily NK:

There have been grievances reported amongst residents of provincial areas that are part of North Korea’s renovation efforts to become a “strong and prosperous state” by 2012.

North Korean authorities announced a plan last September to reconstruct old houses in regional cities. However, a lack of construction materials and electricity has pushed back the start date. After the currency redenomination last November, rumors amongst residents suggest that construction could end before a single plough dug into the ground.

Construction efforts were revitalized in April this year as authorities set specific targets for city construction teams and state owned enterprises to build large residential buildings holding ten to thirty households. October 10 was set as the deadline before which all construction was to be complete, the same day as the founding date of the Chosun Worker’s Party.

However without sufficient resources, including labor, it remains to be seen whether the project will finish. Furthermore, large and small accidents have raised some concerns amongst local populace.

On July 12 a three-story brick building at Sariwon, North Hwanghae Province, collapsed in the middle of construction. Seven workers were injured by the accident. A source cited the mixing of excessively brackish sand with cement was the reason behind the collapse.

North Korea is currently suffering from a lack of cement. Not only is supply from the authorities non-existent but following the construction of 100,000 houses in Pyongyang, the market no longer has any consistent supply. With prices rising, cement is being smuggled from regional construction sites and sold in markets. This is one another key reason for the shoddy construction.

A source stated that, “Construction workers pretend to work,” because there is no payroll to even feed them. This creates serious obstacles for workers, forcefully mobilized for construction, who cannot provide for their families.

The source added, “In a situation where selling on the jangmadang is a prerequisite to earning a living, you can only suffer losses if you are chosen to work on construction sites.”

Accidents arising from a lack of safety precautions are also a concern. A source said, “Many people that are brought to work become ill due to dust particles. When this is ignored, they end up coughing blood and taken to hospital.” With a chronic scarcity of medicine there is no cure for those suffering from respiratory illnesses.

Basic safety is also not being met due to lose security at construction sites leading to a passer-by being struck by a falling brick and injured.

Local residents have voiced their discontent regarding prolonged construction projects due to their relocation to neighboring households since April. At the time, North Korean authorities had promised to assign new houses to both the residents who were forced to move and the neighbors who had accommodated them but with no end of construction in sight, tensions between families are rising to the point where the People’s Safety Ministry has to intervene. The winter season will only add to the collective anxiety.

To make matters worse, residents living near construction sites must pay money for project support. Members of the people’s unit must always have 100 to 500 won on hand for project funding.

Local residents are increasingly worn out by the construction that has spanned for over twelve months, since last year’s 150-day Battle. Their suffering has increased due to the unsuccessful nationwide economic and social plan, implemented from April to September of last year by North Korean authorities to revive the failing and chaotic economy.

Read the full story here:
Residents Anxious of Accidents on Construction Sites
Daily NK
Park In Ho
7/29/2010

I have previously posted about residential construction in the DPRK in Ryongchon (here) and Pyongyang (here and here).

Apparently Hamhung is on the government’s list of urban areas that need to be rebuilt. KCNA reported on May 2o:

After touring Hamhung City, [Kim Jong-il] examined a miniature of the city construction layout plan and other plans for the development of major economic fields in South Hamgyong Province and guided the work in this domain on the spot.

Underscoring the need to build Hamhung City under a long-term plan by thoroughly applying the socialist principle, the principle of popular character as it is the industrial city with a large number of workers, he specified the orientation and ways to do so.

Here is a photo of Kim Jong-il inspecting that very miniature mentioned in the KCNA piece.

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Here is a Google Earth satellite image of this same area as it appears today–taken from the same angle:

The ghost of Ceauşescu is lurking.  Who knows if they will ever get around to completing this task, but it is apparent they intend to remake Hamhung in the image of Kwangbok Street or Rakrang in Pyongyang.

Jane Jacobs is rolling in her grave.

According to the Joong Ang Daily:

Two men near the top of the North Korean power structure are competing against each other to become foreign investment czar for the cash-strapped country, according to sources with knowledge of North Korea.

North Korea experts say the contest could influence who eventually succeeds Kim Jong-il.

The sources told JoongAng Ilbo yesterday that Jang Song-thaek and O Kuk-ryol, both vice chiefs of North Korea’s National Defense Commission, are competing over who can attract more foreign investment to the North. The National Defense Commission, the country’s top state organization, is chaired by Kim.

“O Kuk-ryol dominated the foreign investment coming into the North because of his military power,” said one of the sources, “but he is in a hegemony struggle in that area with Jang Song-thaek, who thrust himself into foreign investment promotion later than [O Kuk-ryol].”

Jang is the husband of Kim Kyong-hui, Kim’s younger sister, and is one of Kim’s close confidants. Jang was also promoted to vice chairman of the National Defense Commission on June 7 at the Supreme People’s Assembly.

The sources said O, since being appointed a vice chairman of the National Defense Committee in February 2009, has capitalized on his position to expand his influence in attracting foreign investment.

O and his aides established Choson Kukje Sanghoe (Korean International Trading Company) as the organization solely responsible for foreign investment promotion and received approval for the organization from the presidium of the Supreme People’s Assembly on July 1, 2009.

Meanwhile, Jang named Park Chol-su, a Korean-Chinese businessman, president of Korea Taepung International Investment Group, which he re-purposed to attract foreign investment.

The company initially belonged to the cabinet, but Jang absorbed it into the National Defense Commission and announced the establishment of the re-purposed company in a January 20 report from the official Korea Central News Agency. The news report said Kim Jong-il issued an “order” that the state guarantee that Taepung be able to attract foreign investment.

“O Kuk-ryol is very displeased that Jang jumped into the foreign investment business that he led,” said the sources. “Currently, Choson Kukje Sanghoe and Korea Taepung International Investment Group are vying against one another.”

The sources said that the power struggle is already being watched with concern by the State Security Department, the North’s supreme intelligence agency.

The agency, the sources said, suspects that China is behind Taepung and is trying to control the North Korean economy by injecting capital through Park and the group. The sources said the agency is hesitant to report its suspicions to Kim, given his close relationship to Jang.

Jang has cultivated power through economic projects Kim has entrusted him with, such as a project to build 100,000 houses in Pyongyang. Since he was promoted to vice chairman last month by Kim, he is thought to have increased his political clout as well.

Ri Je-kang, a rival with Jang, also died in a mysterious, recent traffic accident.

“If a rivalry between Jang Song-thaek and O Kuk-ryol, both key axes of North Korean power, becomes a full-fledged power struggle, it could have a subtle effect on a North Korean succession scenario,” said Kim Yong-hyeon, professor of North Korean Studies at Dongguk University.

Read the full story here:
Bigwigs in North vie for power over investments
Joong Ang Daily
7/5/2001

According to the Daily NK:

North Korea has earned more than $160 million in the last ten years thanks to the construction of sculptures and other edifices in countries across Africa.

A Daily NK source in China revealed on the 18th, “Since 2000, North Korea has been earning colossal quantities of dollars through contracts for the Mansudae Overseas Project Group of Companies under the Mansudae Art Institute to construct sculptures.”

Mansudae Art Institute is an organization primarily dedicated to the idolization of Kim Il Sung and Kim Jong Il through public works, one whose construction of edifices such as the Juche Tower and Arch of Triumph in Pyongyang has added to the status of the country.

It has also been building revolutionary monuments in African countries such as Ethiopia since the 1970s in order to maintain cordial relations with socialist states, but in the early 2000s started doing work in African countries to earn foreign currency as well.

According to the source, North Korea has earned $66.03 million from Namibia alone thanks to the construction of the Presidential Palace ($49 million); the Cemetery of National Heroes ($5.23 million); a military museum ($1.8 million); and Independence Hall ($10 million).

It has also earned almost $55 million from Angola via the António Agostinho Neto culture center ($40 million); Cabinda Park ($13 million); and the Peace Monument ($1.5 million).

Additionally, the North has constructed a basketball stadium ($14.4 million) and an athlete academic center ($4.8 million) in the Congo, earning almost $20 million dollars in total.

Thanks to the Monument to the African Renaissance in Senegal, the North has made another $12 million dollars.

There are around 19.8㎢ set aside for a vacation spot for the president of Equatorial Guinea, which is supposed to earn Mansudae around $800,000, not to mention a government office building ($1.5 million), Luba Stadium ($6.74 million) and conference halls ($3.5 million).

The source also reported, “The money earned from these construction projects is managed by the No. 39 Department. Some of these dollars are used for domestic governance, while the rest go to secret accounts in Switzerland or Macau to become Kim Jong Il’s secret funds.”

Here are the images from the story including a table of financial data (which I would take with a grain of salt):

Additional Information:

1. I blogged here about the Derg Monument in Ethiopia.

2. I have located some of the Mansudae Overseas projects mentioned in this story (as well as numerous other places not menioned in this story: Egypt and Syria, Zimbabwe, DR Congo). However, here are GeoEye satellite images of some of the Namibia and Angola projects mentioned above courtesy of Google Earth:  

Namibia National Heroes Acre (22°39’46.02″S,  17° 4’41.06″E):

Namibia State House (22°35’28.83″S,  17° 6’2.76″E)

Cultural Center of António Agostinho Neto (Mausoleum) (8°49’24.73″S,  13°13’8.52″E)

…and it is stunningly clear. 

We can finally see the galss starting to go up on the Ryugyong Hotel:

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I also blogged a few weeks ago about new housing construction near the Potongang Gate (see here).  Well this project is nearing completion (at least from the outside).

Click image for larger version

We can also see the new Pyongyang Folk Village taking shape (39° 3’40.12″N, 125°49’28.42″E).  Here is an overview of the facility:

Here are the replicas of Pyongyang landmarks under construction:

As I mentioned in a previous blog post, there seem to be replicas of different burial mounds, the West Sea Barrage, Monument to Party Founding, Ryugyong Hotel, Mangyongdae Children’s Palace, and much more.  There even appears to be a miniture Korean Penninsula that visitors can walk around.

According to the Donga Ilbo:

North Korea seeks to directly handle tours to the Mount Kumgang area after forcing South Korea out of the venture, said a source on North Korean affairs yesterday.

Korea Taepung International Investment Group, an agency under the North’s powerful National Defense Commission, has reportedly recruited Chinese companies to help operate the tour since January this year.

The source said, “Negotiations have significantly progressed in certain aspects,” adding, “I understand the North Korean leadership is considering directly operating the Mount Kumgang tour by getting Taepung or an agency under the National Defense Commission to hire multiple Chinese companies as agencies after forcing the Hyundai Group out of Mount Kumgang and Kaesong.”

Another informed source said, “Since Taepung is an agency that holds overall authority over attracting investment for the North’s national development, the group is believed to be advising and supervising efforts to resume the Mount Kumgang tour as well.”

On this, a South Korean government source said, “Even if the North severs ties with Hyundai Asan Corp., complicated legal action will continue over the North’s violation of the contract,” adding, “No Chinese company will seek to serve as a comprehensive business operator, so the new plan appears to be the most practical alternative for North Korea.”

If Taepung or an agency under the defense commission starts to operate the tour directly, the tour program will likely be operated under a completely different system.

The tour’s South Korean operator, Hyundai Asan, has wielded comprehensive and monopolistic rights to the venture, but North Korea appears to have taken over as the operator, with multiple foreign companies taking part.

An agency under the North’s defense commission or military will likely step forward to operate the tour in lieu of Pyongyang’s Asia-Pacific Peace Committee under the ruling Workers’ Party or the Landmark General Development Bureau under the North Korean Cabinet.

And according to Yonhap:

Dozens of South Korean business officials will visit North Korea this week to comply with Pyongyang’s demand that they be present when the communist state freezes their assets at a joint mountain resort, officials said Monday, amid fears of further confiscation.

North Korea already confiscated five South Korean government-run facilities, including a family reunion center and a fire station, at its Mount Kumgang resort on the east coast last week.

The move reflected Pyongyang’s anger over Seoul’s refusal to resume cross-border tours that were halted in 2008 after the fatal shooting of a South Korean tourist by a North Korean guard near the resort.

North Korea insists it has done everything to explain the shooting and guarantee safety for future South Korean visitors. South Korea doubts the genuineness of the gestures, demanding an on-site probe participated in by its officials and tangible safety measures.

The tours earned millions of U.S. dollars for the sanctions-hit North Korean regime before they were suspended. The North Korean demand for their resumption comes as the isolated state struggles to curb its economic troubles that deepened under U.N. sanctions imposed for its two nuclear tests, the latest in May last year.

An official at Hyundai Asan, the chief South Korean operator of the now-suspended tours, said 40 people from 31 companies, including his own, applied for permits to visit North Korea on Tuesday.

The North last week demanded “real estate proprietors and agents” attend the implementation of its plan to freeze their assets, which include hotels, a golf course and a variety of shops.

Officials at the Unification Ministry in Seoul said they plan to grant the permits.

“It is our basic stance that we respect the decisions of the companies,” spokesman Chun Hae-sung said.

Dozens of South Korean firms possess 360 billion won (US$320 million) worth of real estate in the mountain tourist zone.

During a meeting with Hyundai Asan officials stationed at the resort Monday morning, North Korea did not specify which companies should attend the freeze this week, a ministry official here said.

“The North Korean authorities remained ambiguous,” the official said, declining to be identified. “That will leave the door open for anyone wanting to visit North Korea this week.”

South Koreans fear Pyongyang may be taking steps to confiscate more South Korean assets. The North seized the Seoul government-run facilities 10 days after freezing them and expelling personnel.

South Korea has pledged retaliatory measures without being specific. A senior Unification Ministry official, who spoke on the condition of anonymity, said Monday the measures would be announced by early May.

South Korea also warned North Korea will be to blame for any further deterioration of relations between the divided states.

The Korea Herald speculates on how the South Korean government might retaliate:

The government is reportedly considering limiting the volume of agricultural and marine products from North Korea or tightening regulation of imports in other ways.

Certain North Korean items, such as sand, hard coal and mushrooms, already require the unification minister’s approval each time someone wants to bring them into the South. Seoul could expand the number of such items, making the import process more troublesome.

Currently, South Korean materials going into the joint industrial park in the North’s border town of Gaeseong and products rolled out from factories there account for more than 60 percent of inter-Korean trade.

Last month’s inter-Korean trade volume amounted to $202 million, 63 percent of which were goods going in and out of the Gaeseong park.

Since cross border tours to Mount Geumgang have been stalled, most of the remaining inter-Korean trade volume (35 percent) consists of agricultural and marine products.

Although the growth of inter-Korean trade has slowed under the Lee Myung-bak administration, South Korea is still the North’s second largest trading partner after China, according to the Unification Ministry.

Inter-Korean trade accounts for about 30 percent of the North’s trade with other countries, while China takes up about half.

The Seoul government could also further restrict nongovernmental aid to the North, which it has limited ever since Pyongyang launched a rocket in April last year.

It could also engage to the international community about the North’s “wrongful measures.”

Read the full stories here:
N. Korea to Directly Take Over Mt. Kumgang Tour
Donga Ilbo
4/26/2010

S. Koreans to visit N. Korea as Pyongyang moves to freeze their assets
Yonhap
Sam Kim
4/26/2010

Seoul may cut trade with N. Korea
Korea Herald
Kim So-hyun
4/25/2010