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Some Chinese weary of supporting Pyongyang

Wednesday, March 31st, 2010

According to Voice of America:

Peking University Professor Zhu Feng, one of the forum participants, issued a frank warning to the North not to expect any large handouts from China.

“Bailing out North Korea’s economy [is] easy.  We have the capability.  We have no intention,” said Zhu.

Three decades after opening its economy and encouraging market activity, Beijing is one of the three largest economies in the world.  In November, Pyongyang enacted what economists say is the mirror opposite of the Chinese reforms; clamping down on markets, and extinguishing the savings of small traders with a surprise currency revaluation.

Reports from North Korea indicate the measures strangled economic activity and sparked hyperinflation in prices for basic foods.

Zhu says Pyongyang needs to adjust its course, and unless it does, China will not help.

“Offering North Korea sizable aid, and keeping it [afloat], without any change to their very bizarre policy, is detrimental to the China national interest,” said Zhu.

Soon after North Korea invaded the South in 1950, China sent hundreds of thousands of troops to aid the North.  In the past, the two countries have said their relationship was as close as “lips and teeth.”  Zhu says times have changed.

“The Korean War is over.  Beijing changed tremendously.  Our relation also altered almost completely,” he said.

Zhu says China will continue to engage with the North on humanitarian issues to prevent mass starvation.  However, he says Beijing’s North Korea policy is not centered on preserving Kim Jong Il’s rule.

“China is now ready for any form of very substantive change in North Korea – including collapse,” he said.

It is not clear if the Chinese government backs Zhu’s comments. But such blunt language from China about North Korea is unusual. Beijing has been Pyongyang’s biggest economic supporter for nearly 20 years, and, regional security experts say, it wants to avoid an economic collapse in North Korea that would send hundreds of thousands of refugees across the border.

Read the full story here:
Chinese Continued Financial Support of N. Korea Questioned
Voice of America
Kurt Achin
3/31/2010

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Posted in Banking, China, Finance, Fiscal & monetary policy, Uncategorized | Comments Closed

Russia and Japan extend DPRK sanctions

Wednesday, March 31st, 2010

According to the Associated Press:

Russia’s president has signed an order formally implementing U.N. Security Council-approved sanctions against North Korea.
The sanctions were passed in June by the Security Council, which includes Russia, after the country conducted a nuclear test. The sanctions are aimed at pushing North Korea to give up its nuclear weapons program.

To conform with the sanctions, Russian President Dmitry Medvedev on Tuesday ordered that all sales or imports of North Korean weapons and materials connected to them are forbidden.

It also bans weapons exports to the reclusive Communist country and bars transport of North Korean weapons through Russian territory, including its waters and airspace.

And according to Reuters:

Japan will extend sanctions against North Korea first imposed after the reclusive country tested a nuclear device and ballistic missiles in 2006, a senior official said on Tuesday.

The sanctions, previously set to expire on April 13, ban imports from North Korea and prohibit North Korean ships from calling at Japanese ports.

“Basically, I don’t see any reason for not extending (the sanctions),” Chief Cabinet Secretary Hirofumi Hirano told a news conference.

Asked whether the government would consider shortening the duration of the sanctions to six months from one year, Hirano said it would assess the outlook for multilateral talks that seek to persuade North Korea to roll back its nuclear program.

Japan has called for Pyongyang to return to the disarmament-for-aid talks hosted by China, in addition to pressing the country to reveal the fate of Japanese citizens abducted by North Korean agents in the 1970s and 1980s.

Japan also banned exports to the country last year although the impact was seen as being small given limited trade flows.

Read the full stories here:
Russia implements North Korea sanctions
Associated Press
3/30/2010

Japan to extend sanctions against North Korea
Reuters
Chisa Fujioka
3/31/2010

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Posted in Arms shipment, Illicit activities, International trade, Japan, Russia, UN, UN Security Council | Comments Closed

RoK cuts DPRK trade quotas in agriculture

Sunday, March 21st, 2010

According to Yonhap:

South Korea has significantly reduced import quotas for eight North Korean agricultural goods, government officials said Sunday, amid the enforcement of strong U.N. economic sanctions on the communist nation.

According to a public notice posted by the Unification Ministry, the amounts of six North Korean goods allowed to be shipped to the country, including crab, shrimp and peanut products, have been reduced to half from those of last year while the import quota for sesame seed has been reduced from 300 tons to 100 tons.

An official at the ministry, Seoul’s key office on North Korean affairs, said the move had little to do with the U.N. sanctions that were imposed shortly after the North’s second nuclear detonation test last year.

“The items, whose import quotas have been reduced this year, are the ones we had little imports of in the past five years,” the official said, asking not to be identified. “The change was only to reflect the actual amount of imports.”

The import quota for mung beans doubled from 1,000 tons last year to 2,000 tons while that of soybeans also increased from 2,000 tons to 3,000 tons, according to the official.

The government places import quotas on certain items to protect domestic markets and producers, he noted.

This comes as South Korea ends imports of North Korean sand.

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Posted in Agriculture, Agriculture statistics, International trade, South Korea | Comments Closed

Seoul moves to halt imports of DPRK sand

Friday, March 19th, 2010

According to the Financial Times:

South Korea is to phase out its main import from North Korea, delivering a heavy blow to an impoverished regime already reeling economically from confiscated arms shipments and bungled currency reforms.

Sand was the biggest export to South Korea from the north in 2008, earning Pyongyang $73m (£47m). That represents about twice as much as it gains annually from wages at factories in Kaesong, a cross-border industrial zone for South Korean companies.

South Korean officials told the Financial Times that Seoul would phase out sand exports when existing contracts with its northern neighbour expired.

“Once those companies receive their sand, for which they have already paid, that will be the end,” a senior South Korean security official said.

It could have a profound political impact – but South Korean officials insist the decision was taken because Seoul increasingly dredges its own sand domestically.

Officials admit that South Korea has long worried that money paid for sand goes to the military, but they say increased dredging and the imminent conclusion of numerous outstanding contracts have given it the opportunity to end the trade.

…

North Korea is trying to compensate for South Korea’s decision by seeking alternative sand markets in Russian construction projects.

Russia’s Itar-Tass news agency reported late last year that North Korea would ship sand to Vladivostock for use in building projects for the Asia-Pacific Economic Co-operation summit in 2012.

Sand shipments to South Korea started in 2002 amid inter-Korean rapprochement – but were suspended last March while North Korea prepared to fire a long-range missile over Japan.

Pressed by construction companies that have been affected by the import ban, Seoul resumed imports from North Korea in November. The current flow, however, is less than one-fifth of previous levels.

In an effort to salvage the trade with South Korea, Pyongyang has offered to provide sand to South Korean companies in exchange for other building materials and fuel.

But the South Korean unification ministry said domestic companies were not interested and had not applied for export licences to conduct such swaps.

Previous posts on North Korean sand can be found here. 

Read the full story here:
North Korea hit by Seoul move to end valuable sand imports
Financial Times
Christian Oliver and Song Jung-a
3/19/2010

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Posted in International trade, Mining/Minerals, Sand, South Korea, Statistics, Trade Statistics | 2 Comments »

North Korean logger detained in Russian east

Friday, March 19th, 2010

According to the Associated Press (via Los Angeles Times):

The North Korean’s note, scrawled in pen, was simple: “I want to go to South Korea. Why? To find freedom. Freedom of religion, freedom of life.”

The ex-logger, on the run from North Korean authorities, handed the note over to a South Korean missionary in the Russian city of Vladivostok last week in hopes it would lead to political asylum.

Just before he was to meet Thursday with the International Organization for Migrants, a team of men grabbed him, slapped handcuffs on him and drove off, rights activists in Moscow said Friday. He was spirited away to the eastern port city of Nakhokda, where he is sure to be handed back over to North Korean officials and repatriated to his communist homeland, activists said in Seoul.

Police in Vladivostok refused to comment. A senior South Korean diplomat in Vladivostok said he had no information. Officials from the U.S. consulate in Vladivostok could not be reached for comment.

The 51-year-old would be the third North Korean logger in Russia in a week to make a bid for asylum. On March 9, two other North Koreans who had fled their jobs as loggers managed to get into the South Korean consulate in Vladivostok.

Russia’s RIA Novosti news agency reported last week that two North Koreans climbed a fence, ran past the guards and entered the consulate, saying they wanted political asylum. ITAR-Tass carried a similar report.

The incidents focused attention on the precarious existence of tens of thousands of North Koreans sent by the impoverished regime to work in neighboring Russia.

Russian government figures from 2007 put the number of North Korean laborers at 32,600, most of them working in logging in the remote east.

The Rev. Peter Chung, a Seoul-based activist, said there are about 40,000 North Korean loggers in Russia, but that some 10,000 of them have fled their work sites. Some are finding work as day laborers while others are in hiding as they try to map out how to win asylum in foreign diplomatic missions.

The North Korean described the conditions as unbearable. His government took half his meager wages, while the North Korean company operating the logging camp took 35 percent. He kept just 15 percent — about $60 a month — an arrangement that rendered him “virtually a slave,” he told activists.

He eventually fled the logging camp, taking odd jobs to survive. He also became a Christian, Chung and Kim Hi-tae said, which could draw severe punishment, even execution, back home.

The successful asylum bid of two other former North Korean loggers inspired Kim to make a similar attempt, Chung said.

Previous posts on the North Korean loggers in Russia can be found here. More here. And here. And here.

Read the full story below:
3rd North Korean logger attempts to defect in Russia, propelled by dream of ‘freedom of life’
Associated Press (via Los Angeles Times)
Kim Kwang Tae
3/19/2010

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Posted in Association No.2, Emigration, Emigration statistics, Forestry, International trade, Lumber, Ministry of Forestry, Russia, Statistics, Uncategorized | 1 Comment »

Inter-Korean trade jumps in Feb 2010

Wednesday, March 17th, 2010

According to Yonhap:

Inter-Korean trade soared 52.1 percent from a year ago to US$153.49 million in February, according to the report by the Korea Customs Service.

South Korea’s outbound shipments came to $77.14 million while its imports from the communist country amounted to $76.35 million for the South’s trade surplus with the North reaching $792,000, the report said.

The surge came as the global economy is on the road to recovery. Inter-Korean trade is expected to soar this year thanks to rising demand amid an economic turnaround, the customs office said.

Nearly half of the companies participating in inter-Korean trade responded that two-way trade will increase this year, according to a survey by the Korea International Trade Association.

In January, the country ran a deficit of $9.55 million from its trade with the North after posting a surplus of $23.91 million in December 2009 for the first time in 16 months.

Bilateral trade has increased steadily over the past decade from $328.65 million in 1999 to $651.68 million in 2002 and surpassing the $1 billion mark for the first time in 2005.

Inter-Korean trade reached $1.79 billion in 2007 and peaked at $1.82 billion the following year. But it fell slightly last year to $1.66 billion.

Read the full article here:
Inter-Korean trade jumps 52 percent in Feb.
Yonahp
3/17/2010

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Posted in International trade, South Korea, Trade Statistics | 1 Comment »

Altai to begin supplying flour to North Korea

Tuesday, March 16th, 2010

According to Itar-Tass:

The Altai Territory will supply a test batch of flour to North Korea weighing 2,000 tons. The concern Altaiskiye Melnitsy (Altai Mills) signed a corresponding contract with the foreign trade state amalgamation of North Korea, ITAR-TASS learnt at the enterprise on Tuesday.

“Further increasing of volumes of supplies will mainly depend on the export price of flour,” general director Sergei Klinov said. The currently in force railway tariff from the Altai Territory to the border with North Korea, and this is about 3,600 roubles per ton, exceeds half the cost of flour in the export price structure. In such a situation, the issue of quality may become secondary for North Korea, and it will continue buying flour in China.”

Read the full stoy here:
Altai to begin supplying flour to North Korea
Itar-Tass
3/16/2010

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Posted in Food, International Aid, Russia | Comments Closed

DPRK Merchants (1)* vs. Somali Pirates (1)

Tuesday, March 16th, 2010

UPDATE: Well I am very surprised. Someone (probably a Singaporean) paid the ransom for the North Korean crew. According to the AFP:

Somali pirates on Tuesday freed a chemical tanker with 28 North Korean sailors on board after receiving 3.5 million dollars in ransom, a maritime official said.

The Virgin Islands-owned, Singapore-operated MV Theresa VIII was hijacked on November 16 some 180 nautical miles northwest of the Seychelles.

“It was freed today. The crew is safe,” said Andrew Mwangura, the head of the East African Seafarers Assistance Programme.

Mwangura said a 3.5 million-dollar ransom was paid to free the tanker.

The European Union naval force off the Somali coast confirmed the payment of a ransom.

“An unknown ransom was exchanged on the morning of 16 March and the ship is now underway and heading out to sea,” the EU NAVFOR said in a statement.

“No immediate assistance has been requested but EU NAVFOR will continue to monitor the situation,” it added.

The ship had been moved between the pirates’ stronghold coastal villages of Garaad and Harardhere in northern Somalia.

Its captain, whose nationality was not revealed, died a few days after the hijacking in which the pirates opened fire.

The MV Theresa VIII was headed to the Kenyan port town of Mombasa, its initial destination, Mwangura said.

The Somali pirates, who raked in at least 60 million dollars in ransom money last year, currently hold at least six ships and around 120 seamen hostage.

There is also a DPRK flagged vessel that was hijaked by Somali pirates in February.  As best I can tell, this vessel is still being held for ransom.

ORIGINAL POST: In October 2007 the US Navy assisted some North Korean merchants in their victory over Somali pirates.  In a grudge match this week, however, the North Koreans succumbed to the new Somali pirate team.  The score is now 1-1.

According to the BBC:

A chemical tanker with a crew of 28 North Koreans has been hijacked by pirates in waters off Somalia, the EU’s naval force (Navfor) says.

The MV Theresa VIII, a Singaporean-operated tanker, was taken on Monday in the south Somali Basin, 180 nautical miles north-west of the Seychelles.

It had been heading for Mombasa, Kenya, but was diverted north, Navfor said.

The MV Theresa VIII, the owner of which is based in the Virgin Islands, is a tanker of 22,294 deadweight tonnes, said Navfor, the EU naval force operating in the region to protect shipping.

Some thoughts:

1. Globalization in action: The ship is owned by someone in the Virgin Islands, managed by a Singaporean company, operated by a North Korean crew, and taken hostage by Somali pirates.

2. As sad as it sounds, hiring North Korean crews might be an effective anti-piracy strategy.  Here is why: Pirates hold (a) the ship, (b) the cargo, and (c) the crew as hostages to be traded for ransom. Using simple expected value calculations, this means that the rational pirate will pillage if:  [P(probability of success)] x [$(a+b+c)] > the next best opportunity to earn income.  This ignores risk tolerance, but you get the idea. If you lower the $ value of the payload by hiring workers who will not earn a ransom, then the expected value of the captured ship falls and fewer pirates will attack.  If this plays out in a way that the Somalis lose money on North Korean crews (because who is going to pay their ransom), we should expect to see more shipping companies hiring North Korean crews and painting North Korean flags on their vessels! Old ships + North Korean crew + agricultural goods = waste of time for pirates.

*  win with assistance from the US Navy.

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Posted in International trade, Sea shipping, Singapore | 3 Comments »

North Koreans working on South African football stadiums

Sunday, March 14th, 2010

UPDATE:  Football officials deny DPRK laborers working on stadiums. South Korea trying to confirm.

ORIGINAL POST: Over the last few years I have developed a growing catalogue of North Korean-made buildings and monuments in Africa (like this)–so I was very interested to read that North Korean laborers are working on South Africa’s World Cup football stadiums.

According to the Joong Ang Daily:

When North Korean national football players take the field against the Ivory Coast in their final Group G match in the 2010 International Football Association’s World Cup in South Africa, they will be playing at a stadium their compatriots helped build.

South Korean sources said yesterday North Korean laborers are helping to put the finishing touch on stadiums across South Africa ahead of the World Cup, which will kick off in June.

“North Koreans have been put to work on four to five stadiums that require renovation, including Soccer City stadium in Johannesburg [satellite image here], where the opening and closing ceremonies, plus the final will be staged,” a source said. “There are an estimated 1,000 North Koreans there.”

One such stadium is Mbombela Stadium in Nelspruit (Location here but image takem before construction). The North will face the Ivory Coast on June 25 in this 43,500-seat stadium.The South African government has slated 12 billion rand, or $1.6 billion, for 10 stadiums in nine different cities, and North Korean laborers are expected to reap tens of thousands of dollars for their job.

“During the Kim Il Sung era, North Korea built football stadiums and even presidential halls in African nations,” recalled Lim Il, a North Korean defector who used to work for a construction company in the North. “Perhaps such experience helped secure the South African job.”

North Korea and South Africa established formal diplomatic ties in August 1998. This is their first major personnel exchange since then. It is not yet clear if the workers in South Africa will return home upon completing the World Cup work or will be dispatched to other construction projects.

Helping South Africa can be interpreted as an attempt to earn some much-needed foreign capital. North Korea has up to 30,000 laborers in China, Russia and some Middle Eastern countries. Last September, North Korea sent nearly 50 workers from the state-run Mansudae Art Studio in Pyongyang to construct the 160-foot, $27-million statue depicting a family rising from a volcano in Senegal.

One South Korean government official said, “The North government will likely demand loyalty from those workers and collect their wages to add to their foreign currency reserve.”

If anyone can help me identify the stadiums on which the North Koreans are working I would appreciate it.

Read the full story here:
North hard at work on Cup stadiums
Joong Ang Daily
Lee Young-jong
3/15/2010

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Posted in Football (soccer), International trade, Labor conditions/wages, South Africa, Sports | 1 Comment »

DPRK food imports from China triple in January

Friday, March 12th, 2010

According to Yonhap:

North Korea brought in 13,834 tons of grain from the neighboring ally in January, a 3.6-fold increase from 3,869 tons in January last year, said Kwon Tae-jin, a senior researcher on the North’s agricultural sector at the South’s Korea Rural Economic Institute in a posting on his blog.

Rice accounted for about 61 percent or 8,425 tons of the North’s grain import from China, followed by corn with 3,448 tons, beans with 1,553 tons and wheat with 304 tons, Kwon said, citing data from the Korea International Trade Association.

“The big rise in imports of corn and beans, which the North didn’t bring in last year, appears to be not only because corn harvests were not good, but it also suggests the North increased imports over concerns about possible food shortages,” he said.

Kwon also said that the North’s regime could have increased imports to enlarge state food rations after last year’s currency reform caused strains on the country’s food supply system.

North Korea has relied on foreign handouts to feed its 24 million population after natural disasters and mismanagement devastated its economy. The situation worsened in recent years as South Korea halted regular food aid to the North after President Lee Myung-bak took office in early 2008 under a policy to link aid to Pyongyang’s process in ending its nuclear weapons programs.

… 

The U.N. food agency, Food and Agriculture Organization, said early this month that the North is expected to be short of about 1-1.2 million tons of food this year.

I think the data for this story came from this KITA web page, but I can’t be sure since my Korean is exceptionally limited. Here is a description of the KITA page in English.

On a personal note, I wish the major South Korean media outlets  would get into the habit of posting links to their sources.  It is not difficult to do this.  

Read the full article here:
N. Korea’s food imports from China more than triple in January: expert
Yonhap
3/12/2010

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Posted in Agriculture, China, Food, International trade, Trade Statistics | Comments Closed

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