North Korean Economy Watch

According to Arirang News:

It has emerged that five North Korean defectors entered the United States as refugees during the months of October and November.

A U.S. State Department report published on Monday shows the five individuals were admitted into the states of Colorado, Illinois and Utah.

Four North Korean refugees were admitted into the U.S in July.

The number of North Korean refugees allowed into the U.S. peaked in 2008 at 37 and has been on a downslide since then, recording just eight last year.

Since 2006, when North Korean nationals were first granted refugee status in the U.S., a total of one-hundred-91 have started new lives in the United States.

Read the full story here:
Five refugees from N. Korea entered U.S. in Oct. & Nov.: U.S. State Dept.
Arirang News
2015-12-8

UPDATE 7 (2016-8-18): I recently received a KOTRA report on the DPRK’s international trade in 2015. You can download the report here. Below are two images that show North Korea’s 2015 trade in relation to previous years and a second of North Korea’s top ten trading partners in 2015:

UPDATE 6 (2016-6-21): N. Korea’s economic reliance on China deepens in 2015. According to Yonhap:

North Korea’s economic reliance on China deepened last year as prolonged international sanctions and frozen economic exchanges with South Korea further jolted its moribund economy, a report showed Tuesday.

Bilateral trade between North Korea and China was estimated at US$5.71 billion in 2015, accounting for 91.3 percent of the North’s total trade, according to Hyundai Research Institute.

The amount jumped from $488 million in 2000, with the ratio more than tripling from 24.8 percent, the Seoul-based think tank said.

“North Korea’s trade is relying more on China in the wake of continued international sanctions and soured inter-Korean relations,” the institute said.

China’s share in North Korea’s exports had skyrocketed from 6.7 percent in 2000 to 92.1 percent in 2015, with the amount rising from $40 million to $2.48 billion.

Imports from China rose from $450 million in 2000 to $2.95 billion in 2015, with the reliance ratio increasing from 31.9 percent to 77.6 percent.

The share of raw materials in North Korea’s export to China rose from 37.9 percent in 2000 to 53.3 percent in 2015, while the share of raw materials in the North’s imports from China tumbled from 28 percent to 1.5 percent during the period.

Sales of mineral resources, such as iron ore and coal, were the biggest source of hard currency for the reclusive state, while Chinese electronics topped the list of imports last year, the institute said.

“North Korea have expanded imports of intermediate goods and sold them as finished goods,” said Lee Yong-hwa, a researcher at Hyundai Research Institute. “North Korea’s income level is believed to have improved as it has expanded imports of Chinese consumer goods and capital goods.”

Pyongyang’s reliance on China is expected to further rise this year as it was slapped with additional U.N. sanctions in early March following its fourth nuclear test and long range missile launch earlier this year.

The U.N. sanctions ban exports of mineral resources, including coal, iron, gold and rare earth metals, from North Korea, if the proceeds are used for its nuclear or arms program.

UPDATE 5 (2016-5-23): According to UPI:

North Korea’s trade with China shrank for the first time in six years, according to a South Korean government think tank.

According to a report from the Korea Institute for International Economic Policy, bilateral trade stood at $5.43 billion in 2015, down by 14.7 percent from 2014.

North Korea exports to China were estimated to total $2.95 billion, a decrease of 16.4 percent, and imports, excluding crude oil, were reported at $2.49 billion, a 12.6 percent decrease from 2014, local newspaper Kyunghyang Shinmun reported.

…

But the data from 2015 indicates North Korea was hit hard by a collapse in coal and iron ore prices in the commodities markets, according to the report.

North Korea iron ore initially remained competitive in the Chinese market, staying at a price that was 73 percent of market rates, but became less of a bargain in 2015 when it was priced at 84 percent of market rates, which also dropped precipitously last year.

The report stated China’s economic slowdown and new environmental policies targeting the coal industry played a role in the decline in North Korea coal and other exports, local newspaper Maeil Business reported.

In 2015, commodity prices dropped by more than 20 percent for coal and about 31 percent for iron ore.

Note that these trade data were recorded before new sanctions were implemented in 2016.

Read the full story here:
North Korea trade with China shrinks 15 percent
UPI
2016-5-23

UPDATE 4 (2016-2-1): DPRK – China trade is down. According to Yonhap:

North Korea’s trade with China dipped nearly 15 percent last year apparently due to a chilly bilateral relationship between the two neighboring countries, a report showed Sunday.

The North-China trade volume reached US$4.9 billion in the January-November period, down 14.8 percent from $5.76 billion a year earlier, marking the first double-digit on-year drop since 2000, according to a report by state-run think tank Korea Development Institute (KDI).

Pyongyang’s shipments to its neighbor sank 12.3 percent to $2.28 billion over the cited period, while imports from China plunged 16.8 percent to $2.63 billion.

The trade between the allies has risen an average of 22.4 percent between 2000 and 2014. Only in 2009 and 2014 did it shrink on-year.

The KDI report attributed the sharp decline to sluggish raw material exports, as shipments of anthracite coal and iron ore fell 6.3 percent and 68.5 percent, respectively.

“The chilly relationship between Pyongyang and Beijing and a slowdown in the Chinese economy seemed to affect North Korea’s sluggish trade with China,” said the report. “North Korean leader Kim Jong-un’s New Year message, which called for using home-made products and rejecting foreign-made ones, also had some influence on the downbeat trend.”

The alliance between Pyongyang and Beijing had been described as being “forged in blood,” since China fought alongside North Korea in the 1950-53 Korean War. China is the only country that provides crude oil to the reclusive North.

But their political relations have become strained since 2013, partly because of the North’s defiant pursuit of nuclear weapons and a series of purges of pro-Chinese officials in North Korea.

For 2016, the KDI report noted that there is a higher possibility that bilateral trade will contract further following Pyongyang’s nuclear tests on Jan. 6, as the global community including the United Nations is set to impose sanctions against the reclusive regime.

“North Korean trade will be dragged down by international economic sanctions sparked by the North’s latest nuclear test in the first half of this year,” the KDI said. ” North Korea-China trade has shrank to some extent, following sanctions by the U.N.”

Output at the Kaesong Industrial Complex is up in 2015. According to the Yonhap (via Korea Herald):

Production of companies at the inter-Korean industrial complex in North Korea exceeded $500 million last year for the first time since its opening in 2004, the government said Sunday.

According to the Unification Ministry, a total of 124 South Korean factories operating in the complex produced $515.49 million worth of goods in the first 11 months of last year, up more than 20 percent from the previous year and the highest yearly output even excluding the December tally.

The figure for the entire year is estimated to reach $560 million, given that their monthly production averaged around $50 million in the year, it said.

“The Gaeseong Industrial Complex managed to grow stably, recording more than a 20 percent increase in total output despite North Korea’s shelling in August across the border and various other incidents in and out of the country,” a ministry official said.

There were 54,763 North Korean workers and 803 South Korean managers at the factories in the industrial park located in the North’s border city of Gaeseong as of November.

Here is additional information in the JoongAng Ilbo.

Read the full story here:
N Korea’s trade with China contracts in 2015
Yonhap
Kim Boram
2016-1-31

UPDATE 3 (2016-1-12): Arirang News reports that DPRK-China Trade is off 15% in 2015 to $4.9 billion. China’s exports and imports to North Korea fell 17% and 13%. North Korea’s exports of iron ore to China fell 68%, while shipments of anthracite fell 6.3%.

UPDATE 2 (2015-8-17): Marcus Noland weighs in on the H1 2015 KDI report.

UPDATE 1 (2015-8-11): KDI reports that DPRK-China trade continues to fall in 2015. According to Yonhap:

North Korea’s trade with China plunged more than 10 percent in the first five months of 2015 due mainly to a drop in raw material prices, a report showed Tuesday.

North Korea’s outbound shipments to its neighbor sank 10.3 percent on-year to US$954 million in the January-May period, while imports plunged 14.3 percent to $1.09 billion, according to the report by the Korea Development Institute (KDI).

“Bilateral trade was down 12.5 percent compared to the year before with exports of anthracite coal and iron ore affecting overall numbers,” KDI said. “Compared to the year before, when trade fell 4.8 percent, this year’s drop is more pronounced.”

The think tank based its assessment on data provided by the International Monetary Fund, the United Nations and the Korea International Trade Association.

North Korea’s exports of coal to China declined 1.6 percent in dollar terms, with the number for iron ore nosediving 70.3 percent.

Falling exports and a subsequent drop in earnings were probably felt by Pyongyang, which will have to consider other means of generating hard currency.

Compared to 2013, when the North’s exports of coal reached its peak, this year’s numbers represent a 24.6 percent drop.

“The contraction is noteworthy because the North actually diversified the places it shipped coal to in China,” the KDI said.

In regards to iron ore, exports declined, both in terms of volume and prices, with the weakening of China’s steel industry directly impacting trade. Exports stood at 600,000 tons, down from 1.11 million tons, with the value standing at $22.96 million.

The KDI said Pyongyang’s No. 1 import item from its neighbor was filament yarn, followed by cargo trucks and petroleum products. Imports of yarn and petroleum products were down, while shipments of cargo trucks rose.

In bold above I have highlighted what appears to be bad news for North Korean coal exporters. I was surprised to see this because an earlier report by Bloomberg indicated that North Korean coal exports to China had increased by 25% this year (over 2014).  However, it is worth pointing out that the Bloomberg report focuses on the actual quantity of coal crossing the border and KDI  reports on the value of the coal crossing the border. The only way both reports can be true is if the North Koreans are again taking lower prices from the Chinese for their coal compared to their international competitors. Another explanation for the conflicting reports could arise if there was a significant difference between Chinese customs data (Bloomberg) and that used by the International Monetary Fund, the United Nations and the Korea International Trade Association (KDI). I don’t have enough experience with these data sets to know how consistent they are.

Benjamin Katzeff Silberstein offers a link to the report here (in Korean only).

Read the full story here:
N. Korea’s trade with China tumbles this year: KDI
Yonhap
2015-8-11

ORIGINAL POST (2015-4-26): Yonhap reports that DPRK – China trade has fallen in the first quarter of 2015:

Trade between North Korea and China, its economic lifeline, slipped 13.4 percent on-year in the first three months of this year amid frayed bilateral ties, data showed Sunday.

Bilateral trade volume fell to US$1.1 billion in the January-March period, compared with $1.27 billion for the same period last year, the Beijing unit of South’s Korea Trade and Investment Promotion Agency (KOTRA) said, citing Chinese customs data.

China is North Korea’s top economic benefactor, but its political ties with Pyongyang have been strained since the North’s third nuclear test in February 2013.

No crude oil was officially sent to North Korea from China for all of last year.

China’s shipments of crude oil to North Korea were also absent during the first quarter of this year.

South Korean diplomatic sources in Beijing, however, have cautioned against reading too much into the official Chinese trade figures because China has provided crude oil to North Korea in the form of grant aid in the past and such shipments were not recorded on paper.

Read the full story here:
N. Korea’s trade with China dips 13.4 pct in Q1
Yonhap
2015-4-26

According to NK News:

A Chinese-state affiliated and Singaporean investment group, the latter of which is allegedly directly connected to the DPRK, is calling for large-scale investment in 12 projects spanning nearly every major sector in North Korea, from transport to mining to internet and cable television development.

The ambitious plans, outlined in an August 2 press release from China Railway Investments Group, welcome foreign participation in 12 “world class opportunities” in North Korea.

“The Democratic People’s Republic of Korea (DPRK) through its window company Daegian Pte Limited of Singapore in cooperation with China Railway Investments Group Ltd (CRIG) has established a joint venture investment company in Hong Kong,” the press release says.

The joint venture, called Heuimang Investments Group Limited, will be capable of providing a “direct and exclusive conduit to the highest levels of decision making in the government of the DPRK,” the release continues. “Only the most significant of opportunities will be available through this channel which can only be accessed through Heuimang/Han Wang.”

Here is a PDF of the press release posted to the China Railway Investment Group Web Page.

Here is the full text:

韩旺投资集团有限公司
Heuimang Investments Group Ltd (In Chinese pinyin Han Wang Touzi Jituan Youxian Gongsi)
公告 Announcement:
发布时间：2015-8-2

朝鲜民主人民共和国（朝鲜）致力于大力推进其经济发展，并欢迎外国投资参与该国的世界级的机会, 促进经济发展.
The DPRK is committed to progressing its economic development, and welcomes the participation of foreign companies in investing in world class opportunities in the country.

朝鲜欢迎中国的公司投资参与. 朝鲜通过它在新加坡注册的窗口公司Daegian 私人有限公司, 与中铁多经投资集团有限公司合作在香港建立了融投资平台—招商公司.
The Democratic People’s Republic of Korea (DPRK) through its window company Daegian Pte Limited of Singapore in cooperation with China Railway Investments Group Ltd (CRIG) has established a joint venture investment company in Hong Kong.

朝鲜政府已正式批准Daegian 与中铁多经投资集团有限公司(CRIG)合作成立旺投资集团有限公司.
The DPRK Government has formally approved the joint venture between Daegian and CRIG and their joint venture company called Heuimang (or Han Wang in Pinyin Chinese) Investments Group Limited.

Daegian和韩旺是朝鲜”走出去“、”引进来“的直接和专属通道，是朝鲜政府最高等决策层的直属机构. 只有最显著的机遇将可通过这一渠道，而且只能通过韩旺办理.
Daegian provides a discrete, direct and exclusive conduit to the highest levels of decision making in the government of the DPRK. Only the most significant of opportunities will be available through this channel which can only be accessed through Heuimang/Han Wang.

朝鲜决定与中方共同搭建经贸等合作更方便更快捷的工作平台，利用香港的优势宣传推广、项目招商、商务服务，支援朝鲜建设。韩旺将在中朝两国间发挥经贸合作的强大和充满活力的桥梁作用.
Heuimang/Han Wang will concentrate on creating a strong and robust platform for economic and trade co-operation between the countries. It will also take advantage of the flexibility afforded to a commercial entity registered in Hong Kong.

各方股东及合作公司将依照国际法和国际惯例运作，在透明的基础上配套韩旺发展.
All parties to this joint venture are committed to supporting Heuimang/Han Wang in operating on a transparent basis within international laws and practices.

其主要目标是优势互补、资源共享、利益均沾、合作共赢、商业运作.
The primary objective is commercial engagement through mutual cooperation for shared benefit.

里程碑:
Milestones:

2015年1月29日: 中铁和Daegian 签订了框架合作协议, 其中确定了互惠和显著利于中国和朝鲜，尤其是基础设施发展的若干项目. 通过韩旺, 中铁致力于引领中国企业组成的联合体参加朝鲜民主人民共和国的经济和基础设施发展.
January 29, 2015: CRIG and Daegian executed a framework cooperation agreement which identified certain projects of mutual and significant benefit to China and the DPRK, particularly infrastructure development. CRIG is committed to lead through Heuimang/Han Wang a consortium of investors from China to participate in the economic and infrastructure development of the Democratic People’s Republic of Korea.

2015年3月20日：中铁和Daegian签署公约设立融投资控股公司，以协调和管理投资朝鲜.
March 20, 2015: CRIG and Daegian signed a convention to establish an investment holdings company to coordinate and manage investment in the DPRK.

2015年4月8日: 朝鲜政府的执行委员会正式批准为创建韩旺作为的中铁和Daegian 之间的合作平台公司.
April 8, 2015: The Executive Committee of the DPRK Government granted formal approval for the creation of Heuimang/Han Wang as the joint venture company between CRIG and Daegian.

这是中国- 朝鲜最高领导人讨论2010年5月的巅峰之作, 于经贸合作，成立一个指导委员会，共同开发和管理提名的项目, 包括特别经济贸易区.
These represent the culmination of China-DPRK economic and trade cooperation discussions dating back to May 2010, when the top leaders of both countries established a steering committee to jointly develop and manage nominated projects,including special economic trade zones.

基本的经济发展计划是底层要求支持能力建设，机构规划和物流相关立法的起草工作。此外，为提高海关程序，通信和赞助农业和其他指定项目在朝鲜.
Fundamental to the programme is the underlying requirement to support capacity building, institutional planning and logistics and the drafting of relevant legislation. Also, to improve customs procedures, communications and sponsor agriculture and other specified projects in the DPRK.

中国和朝鲜都致力于取得进展的合作和友谊通过鼓励基于一个企业的市场经济的互利两国人民.
China and the DPRK are committed to progressing their cooperation and friendship by encouraging an enterprise based market economy for the mutual benefit their two peoples.

韩旺利用中国政府鼓励中国企业“走出去”、以及建立境外经济贸易合作区的各种优惠政策，支持朝鲜建设，开发前述项目。
In supporting the DPRK in the development of the nominated projects (see below), China Railway will be taking advantage of the preferential policies of the Chinese Government’s ‘Go Global’ strategy and its model of ‘co-operation between nations’ to create Economic and Trade Cooperation Zones.

提名项目:
Nominated Projects:

下面的项目已被选定为首批发展:
The following have been selected for initial development:
1. 罗先经济贸易区等经济贸易区
Rason Economic Trade Zone and other Special Economic Trade Zones
2. 罗津港, 运输和物流
Rajin Port, Transport and Logistics
3. 东海岸高铁和互连服务
East Coast High-speed Rail and interconnecting services
4. 发电厂和服务
Power Generation
5. 国家石油和天然气战略计划，包括
National Oil and Gas Strategy, including
a. 现有的两个炼油厂和技术升级翻新
Refurbishment of the two existing refineries and technological upgrade
b. 更多的处理能力，存储和仓储设施建设，以满足当地和出口需求
Construction of more processing capacity and storage and warehousing facilities to meet local and export demand
c. 贸易销售和市场营销
Trade sales and marketing
d. 勘探和开采当地资源
Exploration and exploitation of local reserves
6. 黄金开采和加工;以及建立金银行
Gold mining and processing; and establishment of a gold bank
7. 稀土的开采和加工
Rare earth elements mining and processing
8. 金属和矿物开采和加工，包括:
Metals and minerals mining and processing including:
a. 铁钢 Iron and steel
b. 锌Zinc
c. 钨Tungsten
d. 锡Tin
e. 菱镁矿 Magnesite
f. 石墨 Graphite
g. 煤Coal
9. 电信和有线电视
Telecommunications & cable television
10. 互联网服务, 国家经济信息电子中心及电子支付平台
Internet services, a national information centre and electronic payment platforms
11. 金融服务，包括一个完整的商业全服务银行和保险
Financial Services including a full commercial full services bank and insurance
12. 农业包括菌草种植, 牛羊养殖和捕鱼,
Agriculture including bacteria grass, sheep and cattle breeding and fishing
和等项目，招商引资开发.

附加信息:
Additional Information:
罗先经济贸易区和罗津港: 由罗先经济合作局管理，位于朝鲜北东部，毗邻中国吉林省延边地区. 罗先的主要商业机会是罗津港，该港作为主要的物流和交通枢纽为东北亚的潜力. 中国、俄罗斯、蒙古承认其优点，罗津港可提供最北端的全年温水冷冻自由港. 俄罗斯和蒙古已经从罗津港运送大宗商品，通过铁路连结由俄罗斯建造的港区.
The Rason Economic Trade Zone and Rajin Port: is managed by the Rason Economic Cooperation Bureau, located in the North-East of DPRK, adjacent to the Yanbian area, Jilin province, China. The major commercial opportunity in Rason is the potential that Rajin port offers as a major logistics and transport hub for north-east Asia. China, Russia and Mongolia acknowledge the advantages that the northern most all-year round port can provide. Russia and Mongolia are already shipping bulk commodities from Rajin through a railway link built by Russia.

拟议的铁路连接新丝路网络，将为中国东部、俄罗斯、韩国、日本, 进入中亚欧洲及其他新兴经济体. 一个便捷的陆路货物通道，这将减少旅行时间只需15天，而不是原来45天的海上运输，太有吸引力了, 区域商家不能忽视.
A proposed rail connection to the New Silk Road network will provide Eastern China, Russia, South Korea and Japan access to the emerging economies of Central Asia and Europe beyond. A land route for the transport of goods that will reduce travel time to just 15 days as opposed to 45 days by sea will be too attractive for regional manufacturers to ignore.

罗先的潜力作为一个主要的工业和商业中心，是由计划的石油和天然气管道从西伯利亚到韩国釜山而增强. 坐落在通往发展最快、最具活力的世界经济区域上，它是一个可预见的展示，可以肯定的未来，罗先会成为最重要的区域之一。
Rason’s potential as a major industrial and commercial centre is further enhanced by the planned oil and gas pipeline from Siberia down to Pusan in South Korea. Situated as it is at the gateway to the fastest growing and most dynamic economic region in the world, it is a virtual certainty that Rason will become one of the most important cities in the region.

有许多小到中型中外合资企业已经建立在罗先. 这是肯定的, 由于贸易的增加, 这将很快被更大的企业来加盟。
There are many small to medium sized foreign joint ventures already established in Rason, which will soon be joined by larger enterprises that will inevitably follow as trade increases.

中国企业有数十家与朝鲜公司在进行经济和贸易活动，在建材、食品加工、机械、金融、投资、物流等领域谈判合作。交通运输集团，中国铁建集团，中国招商局集团，亚洲集团等大型企业纷纷表示了在罗先经贸等各领域的兴趣.
Dozens of Chinese enterprises are in negotiations with North Korean companies for economic and trade activities in building materials, food processing, machinery, finance, investment, logistics and other fields. Transportation Group, China Railway Construction Group, China Merchants Group, the Asian Group and other large enterprises have expressed interest in the Rason economic and trade areas.

中国的北大荒集团在朝鲜建立了一个高效的农业科技示范园区500公顷的水稻种植实验.
The Beidahuang Group of China set up a highly efficient agricultural demonstration zone, 500 hectares of rice growing experiments.

该商业机会将只能通过韩旺可用.
The commercial opportunities will only be available through Heuimang.

朝鲜国家石油和天然气战略: 是赖以投资者可以利用朝鲜的优越位置，并推出营销活动成为东北亚地区的重要平台。朝鲜有两个炼油厂，其中只有一个目前正在运作。
DPRK’s National Oil and Gas Strategy: is the platform upon which investors could take advantage of the DPRK’s location and launch a marketing campaign into north-east Asia. The DPRK has two refineries only one of which is currently operational.

在新义州的蓬华炼油厂每年生产的柴油和汽油约150万吨, 这是满足本地区的需求远不够的. 该炼油厂坐落在一个很好的位置，跨过鸭绿江丹东，那里有一个油码头和管道组成的国际网络的支线
The Bungwha [Ponghwa] Refinery in Sinuiju [Note: it is in Phihyon, not Sinuiju] produces about 1.5 million tonnes of diesel and gasoline a year which is well below local demand. It is well situated across the Yalu River from Dandong where there is an oil terminal and a spur line of an international network of pipelines.

韩旺拥有的授权权利，新指定的特殊经济贸易区，位于在鸭绿江河口的新都岛。这里是理想的建立一个油库和新的处理设施之地.
Heuimang holds rights to a newly designated special economic trade zone which is Sindo Island in the Yalu estuary. The site is ideal to create a tank farm and new processing facility.

罗先的胜利炼油厂在东北部，已有20多年经营，现停止，由于缺乏原料和适当保养及维修。它最初被设计为每年生产各种石油化工产品2.0万吨。罗津和罗先潜力将见证燃料和某些石化产品必须满足该地区日益增长的需求.
The Seungri Refinery in Rason in the north-east, has been silent for 20 years for a lack of feedstock and proper maintenance and repairs. It was designed to produce 2.0 million tonnes a year of a variety of petrochemical products. The potential that is Rajin/Rason will see a growing demand for fuel and certain petrochemical products in the region which must be met.

金属和矿物: 矿产开采和加工是朝鲜经济的支柱. 通过韩旺的国家协议的过程中，任期安全是有保证的，因为它的设计满足国际融资需求。有铁矿石，煤，金，菱镁矿，石墨，稀土元素和许多世界级的沉积物。
Metals and Minerals: mining and processing is the backbone of the DPRK economy. There are world class deposits of iron ore, coal, gold, magnesite, graphite, rare earth elements and many more. Through Heuimang’s state agreement process security of tenure is assured as it is designed to satisfy international financing requirements.

详细信息，请联系:
For more information, please contact:

(1) 与中铁投资集团有限公司, 主席, 王先生
Mr. Wang Jing, Chairman of China Railway Investments Group Ltd
电子邮件Email: crighk1@gmail.com

(2) Daegian 私人有限公司, 主席, Rudi Sirr先生
Rudi Sirr, Executive Chairman of Daegian Pte Ltd
电子邮件Email: rudi.sirr@daegian.com

(3) 韩旺投资集团有限公司, 首席执行官, 沈思翠小姐
Jyn Sim Baker, Chief Executive Officer of Heuimang Investments Group Limited
电子邮件Email: jynbaker@crimsonant.com

Here is additional reporting in NK News and by Marcus Noland.

By Benjamin Katzeff Silberstein

During the past few months, the World Food Program (WFP) has made reoccurring pleas for increased food assistance to North Korea to alleviate the food shortages expected from a severe summer drought. The North Korean government made similar statements and claimed that the drought was the worst one to occur in 100 years. Aid to the country was subsequently increased from the originally planned level, due to the drought. But now, one North Korean official is saying that food production ended up increasing, after all, thanks to agricultural reforms.

A recent brief by the Institute for Far Eastern Studies at Kyungnam University (IFES) cites a July issue of Tongil Sinbo, a North Korean state-run weekly newspaper. There, Chi Myong Su, director of the Agricultural Research Institute of the Academy of Agricultural Sciences in the country, says that

“the effectiveness of field management system (pojon) from cooperative farm production unit system (bunjo) is noticeable and succeeded in increasing grain production despite the adverse weather conditions.”

The article cited by IFES highlights the smaller work-team structure as key to the success of the reforms. Also, it almost outright states that greater economic incentives were the main factor (although they call it “enthusiasm” and “patriotism”):

“Despite the adverse weather conditions last year, the high grain yield was possible due to implementation of scientific farming methods and field management system to increase enthusiasm of farmers,” and “based on this experience, many cooperative farms across the country will expand subworkteam management system to field management system.”

This is interesting for several reasons.

First, the agricultural reforms seem increasingly pronounced. Though other reforms were reportedly backtracked earlier this year, the government seems eager to claim success for the road travelled in agriculture.

I have written elsewhere that the data doesn’t necessarily support a claim that reforms are working. There is still reason to be skeptical – after all, a North Korean government official claiming that his government’s policies are working is not surprising – but even the claim itself is interesting.

Second, the statement raises questions about monitoring and data gathering capacities, both of the regime and relief organizations in Pyongyang. Again, just a few months ago, alarm bells were ringing about a potential food shortage, and now, a regime official claims that food production has increased. What was the basis of the WFP and regime claims that a food shortage was imminent a few months ago, and what has changed since those claims were made?

Another recent IFES brief also deals with North Korean press reports about the agricultural reforms. It quotes a Rodong Sinmun article from earlier in the summer that brings up some adjustment problems that farmers have had, such as learning how to properly use fertilizers. The most interesting part in my opinion is the following:

The newspaper stressed that “when all farmers claim ownership of their field and subworkteam, one can create innovation in the farming operations.”

Thus, it seems like Pyongyang wants to encourage experimentation and diversity in production methods. This would be a potentially important step towards more efficient agriculture. Perhaps it is part of a pattern. Provinces have reportedly gotten significant leeway in setting up their respective special economic development zones, which could also be a way to encourage experimentation in policies and management methods.

According to the Tongil Sinbo article, reforms are set to expand further in the country given the alleged success. Perhaps it won’t be too long before we can learn more about them through assessments by multilateral organizations like WFP.

According to UPI:

A New York marine insurance firm has agreed to pay fines for violating U.S. sanctions against North Korea, Cuba and Iran.

Insurance provider The Navigators Group, Inc. admitted the company provided North Korea vessels with marine insurance, according to a statement from the U.S. Treasury’s Office of Foreign Assets Control on Thursday.

OFAC said Navigators had committed a total of 48 violations: The firm was found in violation of North Korea sanctions including Executive Order No. 13466 and various sanctions against Iran, Cuba and Sudan.

The firm has agreed to pay a reduced fine of $271,000 — down from an initial penalty of $750,000. Of the $750,000 amount, $570,000 was a fine for North Korea sanctions violations.

OFAC said the penalty was reduced after Navigators voluntarily disclosed information of its violations and cooperated with investigators.

Navigators earned $1.1 million in insurance premiums between 2008 and 2011 from 24 individual policies for North Korea vessels.

Between 2009 and 2010, the firm delivered $12,000 in payouts.

Despite sanctions, North Korean ships remain active at sea.

Read the full story here:
New York marine insurance company fined for North Korea dealings
UPI
Elizabeth Shim
2015-8-7

According to UPI:

The United States is now home to 186 North Korean refugees who first began to arrive in 2006 – two years after the North Korean Human Rights Act of 2004 was signed into law by President George W. Bush.

The North Korean refugee population in the U.S. is still small and just a fraction of other communities, Voice of America reported on Tuesday.

Major refugee communities in the U.S. include 1,078 Burmese, 879 former nationals of the Democratic Republic of the Congo and 818 Somalis.

In fiscal year 2015 – which began in October 2014 for the State Department – Washington granted asylum to one or more North Koreans per month.

In July, the United States accepted four North Korean refugees, the second highest for the fiscal year.

As refugees North Koreans receive some financial support, including a monthly stipend between $200 and $300 for eight months to cover food and medical expenses, South Korean news agency Yonhap reported.

After a year of residence, refugees are eligible for permanent resident status and after five years are permitted to apply for U.S. citizenship.

But the financial support Washington provides North Korean refugees pales in comparison to the support South Korea provides similar defectors.

Seoul’s resettlement dollars awarded to North Koreans have decreased over the years as more North Koreans find their way to the South, but a North Korean defector still qualifies for $5,967 in financial grants, in addition to $11,000 that goes toward long-term housing.

In some cases the U.S. government works with NGOs to resettle the North Koreans, but problems have surfaced in recent years.

In July, The Washington Post reported how a U.S.-based North Korean refugee was deprived of food by his American foster family in Richmond, Va., because they wanted to make their budget stretch.

Joseph Kim, who was then 16, said he found himself hungry in the world’s wealthiest country after years of surviving on weed soup and roasted grasshoppers in North Korea.

Read the full story here:
State Department: 186 North Korean refugees now reside in the United States
UPI
Elizabeth Shim
2015-8-4

According to UPI citing World Food Program sources, aid to North Korea increased by more than 100 percent from June to July of this year:

Food aid to North Korea more than doubled from June to July and over 3,000 tons were distributed to pregnant women and children, according to the World Food Program.

Damian Kean said Monday the July delivery of 3,231 tons of highly nutritional food items for infants and expectant and nursing mothers is this year’s largest, Voice of America reported.

In June, the World Food Program said 1,528 tons of food was sent to North Korea, and aid reached a low in February when only 1,187 tons of food reached the reclusive country.

South Korean news agency Yonhap reported the July food aid package was the biggest in 19 months, but the number of aid recipients decreased from 632,000 to 620,000 between June and July.

The World Food Program’s fundraising goal of $168 million – needed to provide highly nutritional food packages to 1.8 million hungry North Koreans – has only reached half, or $82.9 million, of its target number.

The U.N. organization has postponed the termination of its North Korea food aid program, due to an ongoing drought in the country that is posing risks to the food supply.

According to Yonhap:

Scud missiles fired into Saudi Arabia by Yemeni rebels in recent months came from North Korea, a South Korean intelligence official said Wednesday, in the latest case that illustrated North Korea’s support for the weapons programs of some countries in the Middle East.

Saudi Arabia has shot down about 40 percent of some 20 Scud missiles fired by Yemen’s Houthi rebels, said the official, who is familiar with the issue.

He did not give further details on how South Korea reached the conclusion that the missiles originated from North Korea. He spoke on condition of anonymity because he was not authorized to speak to media.

Missile exports have long been a major source of hard currency for North Korea.

“North Korea has sold missiles to Yemen and sent missile engineers to that country in the 1990s,” said a former North Korean official, who was in a position to know about the arms deals.

Another former North Korean intelligence official in Seoul said North Korea sold many Scud missiles to countries in the Middle East, noting Egypt was the hub of North Korea’s arms trade in the region.

The two former North Korean officials, who later defected to South Korea, asked not to be identified, citing the issue’s sensitivity.

North Korea’s Scud-B missiles and Scud-C missiles have a range of 300 kilometers and 500 kilometers, respectively, according to South Korea’s Defense Ministry.

Read the full story here:
Scud missiles fired into Saudi Arabia from Yemen traced to N. Korea: official
Yonhap
2015-7-29

According to Yonhap:

The Unification Ministry said Monday it has decided to overhaul ways to operate a government fund designed to promote inter-Korean cooperation in a bid to offer humanitarian aid to North Korea on a project basis.

South Korea set up the Inter-Korean Cooperation Fund in 1991 in order to facilitate inter-Korean exchanges and economic cooperation. As of end-June, the fund stood at an outstanding 12.4 trillion won (US$10.7 billion).

The ministry said it will overhaul ways to run the fund so as to provide project-based assistance to the North, a departure from its current practice of offering only emergency relief.

To this end, the government plans to specify the areas where civilian groups could offer humanitarian aid such as healthcare, agriculture and forestation.

“Through the overhaul, necessary aid including food and others could be delivered (to the North) on a project basis,” Jeong Joon-hee, the ministry spokesman, said in a regular press briefing.

South Korea has almost suspended its massive assistance to North Korea at the government level since 2010, when it imposed economic sanctions on Pyongyang following the North’s attacks on a South Korean warship and a border island that year. But Seoul has continued to allow civilian groups to extend aid to the North.

Seoul said in May that it will encourage more civic groups to increase support to North Korea in non-political areas if they are deemed to promote national unity and reconciliation.

Read the full story here:
S. Korea to overhaul fund on inter-Korean cooperation
Yonhap
2015-7-27

UPDATE 2 (2015-8-3): The Singaporean firm is being prosecuted. According to the Straits Times:

In the first case of its kind, a Singapore-registered company was prosecuted on Monday for facilitating payment for costs related to the shipment of arms and related material bound for North Korea from Cuba.

Chinpo Shipping Company is alleged to have transferred US$72,017 from its Bank of China account to that of a shipping agent in Panama – C.B. Fenton and Co – on July 8, 2013.

Under the United Nations (Democratic People’s Republic of Korea) Regulations 2010, it is an offence to transfer financial assets that could help North Korea in its nuclear and ballistic programmes, or efforts to produce other weapons of mass destruction.

Chinpo, whose representative is Mr Tan Cheng Hoe, 82, a director of the company, also faces a second charge of carrying on a remittance business without a valid licence between April 2, 2009 and July 3, 2013 .

The court heard that a North Korean Cuba-bound cargo ship, the Chong Chon Gang, docked in Mariel, Cuba, on June 20, 2013, and loaded 25 containers and six trailers of arms and related material weighing 474 tons.

This included two MiG-21 jet fighters, anti-tank rockets and SA-2 and SA-3 Russian surface-to-air missile systems and their parts.

All were bound for North Korea and hidden in the cargo hold under 10,500 metric tons of sugar, said the prosecution in its opening statement.

The company that managed the ship, Ocean Maritime Management (OMM), wanted someone to make payments for them to hide the fact that the money was coming from a DPRK entity.

Chinpo stepped in to help. On May 28 that year, it transferred US$54,270 to pay for the passage of Chong Chon Gang to and from Cuba through the Panama Canal. Another payment of US$72,017 was made on July 8 that year.

Deputy Public Prosecutor Sandy Baggett said that was not the first time Chinpo had transferred money for North Korean companies or OMM.

For at least four years, Chinpo remitted a total of over US$40 million without a licence and without regulation by the Monetary Authority of Singapore.

MAS requires companies to exercise due diligence when dealing with customers and to guard against money laundering.

Mr Edmond Pereria is defending the company, which can be fined up to $1 million if convicted under the UN Act. The penalty for operating a remittance business without a licence is a $100,000 fine.

A joint Ministry of Foreign Affairs and Ministry of Home Affairs statement last week said Singapore takes a serious view of its obligations to prevent the illicit trafficking of weapons of mass destruction, their means of delivery and related materials.

“We will not hesitate to take action against individuals and/or companies that fail to comply with the relevant Singapore legislation that we have put in place to give effect to measures prescribed by United Nations Security Council regulations,” it said.

UPDATE 1 (2015-7-24):  Blacklisted Singapore shipping firm denies arms link to North Korea. According to the AFP (via Straits Times):

A Singapore shipping firm blacklisted by the United States government for allegedly supporting illicit arms shipments into North Korea strongly denied the allegation Friday (July 24) and vowed to clear its name.

Senat Shipping and Trading Pte Ltd said it had “for many years chartered North Korean vessels to operate on the global spot market” but all these were legitimate commercial transactions.

“Senat wishes to stress that all its dealings were legal and involved commercial shipments of commodities on behalf of international commodity traders. These transactions have always been transparent and can survive any form of scrutiny,” it said in a statement.

In imposing sanctions on Senat and its president, Leonard Lai, on Thursday, the US Treasury Department alleged that the company was providing “extensive support” to Ocean Maritime Management Company (OMMC), a North Korean firm that already was under sanctions.

The blacklist freezes any US assets held by Senat and Lai, and prohibits US citizens from conducting any transactions with them.

Chong Chon Gang, a ship operated by OMMC, was seized in July 2013 near the Panama Canal carrying undeclared Soviet-era weapons and fighter jets under thousands of sugar sacks.

The cargo, which came from Cuba, was intended for North Korea.

The US Treasury Department on Thursday claimed that Senat provides support to OMMC by “arranging the purchase, repair, certification, and crewing” of ships for that company.

“Arms shipments transported by OMMC serve as a key resource for North Korea’s ongoing proliferation activities. Sales from these shipments contribute to North Korea’s other illicit programmes,” said Adam Szubin, the Treasury’s acting undersecretary for terrorism and financial intelligence.

Senat in its statement said that it had chartered the Chong Chon Gang on a regular basis but stressed that it was not the charterer at the time the vessel was intercepted in Panama.

“We strongly stress that Senat was not the charterer of the vessel at the time of its arrest and Senat has not chartered the vessel at all since its arrest,” the company said.

OMMC was blacklisted by the United Nations after the ship was caught, and Senat said that Chinpo Shipping Services, a Singapore firm which had acted as the agent for the vessel, was prosecuted by local authorities at that time.

Senat said it “strongly refutes these groundless and unwarranted allegations” and that it was in the process of contacting the US Treasury Department to explain its side.

ORIGINAL POST (2015-7-23): According to the Wall Street Journal:

The U.S. imposed sanctions on Thursday against a Singaporean company and its president for their links to a North Korean shipping firm that allegedly helped an attempt to move weapons from Cuba to Pyongyang.

Senat Shipping Ltd., the U.S. Department of Treasury said, helped arrange the purchase, repair, certification and crewing of vessels belonging to North Korea’s Ocean Maritime Management Co., which the U.S. targeted last year with sanctions for allegedly managing a vessel sailing from Cuba to Pyongyang that carried illicit cargo falsely declared to be sugar and spare plastic. The vessel was interdicted by Panama in July 2013 on suspicion of moving drugs; it was freed in February 2014 to sail back to Cuba after Pyongyang paid a fine.

“Arms shipments transported by OMMC serve as a key resource for North Korea’s ongoing proliferation activities. Sales from these shipments contribute to North Korea’s other illicit programs,” said Adam Szubin, acting undersecretary of Treasury for terrorism and financial intelligence, in a statement.

Leonard Lai, president of Senat, was also targeted Thursday with sanctions, as was the vessel “Dawnlight,” which Treasury identified as blocked property of Senat.

Neither Senat nor Mr. Lai could be reached.

Treasury also said Thursday it updated its sanctions designation on OMMC, saying the company has continued to operate through multiple front companies and representative offices to evade sanctions. It also updated its listings on two officials who work for Tanchon Commercial Bank under aliases.

The US Treasury Department sent out this information:

North Korea Designations and Updates; Non-proliferation Updates
7/23/2015
​
OFFICE OF FOREIGN ASSETS CONTROL
Specially Designated Nationals List Update
The following individual has been added to OFAC’s SDN List:

LAI, Leonard (a.k.a. LAI, Yong Chian); DOB 16 Jun 1958; Passport E3251534E (Singapore) expires 20 Mar 2018 (individual) [DPRK].

The following entity has been added to OFAC’s SDN List:

SENAT SHIPPING LIMITED (a.k.a. SENAT SHIPPING & TRADING PTE LTD; a.k.a. SENAT SHIPPING AGENCY LTD; a.k.a. SENAT SHIPPING AND TRADING LTD; a.k.a. SENAT SHIPPING AND TRADING PRIVATE LIMITED), 36-02 A, Suntec Tower, 9, Temasek Boulevard, Singapore 038989, Singapore; 9 Temasek Boulevard, 36-02A, Singapore 038989, Singapore; Panama City, Panama; PO Box 957, Offshore Incorporations Centre Road Town, Tortola, Virgin Islands, British; Identification Number IMO 5179245; alt. Identification Number IMO 5405737 [DPRK].

The following vessel has been added to OFAC’s SDN List:

DAWNLIGHT General Cargo Mongolia flag; Vessel Registration Identification IMO 9110236 (vessel) [DPRK].

The following changes have been made to OFAC’s SDN List:

KIM, TONG-MYO’NG (a.k.a. KIM, CHIN-SO’K; a.k.a. KIM, TONG MYONG; a.k.a. “KIM, JIN SOK”), c/o Tanchon Commercial Bank, Saemul 1-Dong Pyongchon District, Pyongyang, Korea, North; DOB 1964; nationality Korea, North (individual) [NPWMD]. -to- |KIM, Tong-Myo’ng| (|a.k.a. KIM, CHIN-SO’K; a.k.a. KIM, HYOK CHOL; a.k.a. KIM, TONG MYONG; a.k.a. “KIM, JIN SOK”|)|; DOB 1964; alt. DOB 28 Aug 1962; nationality Korea, North; Passport 290320764| (individual) [NPWMD] (|Linked To: TANCHON COMMERCIAL BANK|).

OCEAN MARITIME MANAGEMENT COMPANY LIMITED (a.k.a. EAST SEA SHIPPING COMPANY), Dongheung-dong Changgwang Street, Chung-ku, PO Box 125, Pyongyang, Korea, North; Donghung Dong, Central District, PO Box 120, Pyongyang, Korea, North; No. 10, 10th Floor, Unit 1, Wu Wu Lu 32-1, Zhong Shan Qu, Dalian City, Liaoning Province, China; 22 Jin Cheng Jie, Zhong Shan Qu, Dalian City, Liaoning Province, China; 43-39 Lugovaya, Vladivostok, Russia; CPO Box 120, Tonghung-dong, Chung-gu, Pyongyang, Korea, North; Bangkok, Thailand; Lima, Peru; Port Said, Egypt; Singapore; Brazil; Identification Number IMO 1790183 [DPRK]. -to- OCEAN MARITIME MANAGEMENT COMPANY LIMITED (|a.k.a. EAST SEA SHIPPING COMPANY; a.k.a. HAEYANG CREW MANAGEMENT COMPANY; a.k.a. KOREA MIRAE SHIPPING CO. LTD.|)|, Dongheung-dong Changgwang Street, Chung-ku, PO Box 125, Pyongyang, Korea, North; Donghung Dong, Central District, PO Box 120, Pyongyang, Korea, North; No. 10, 10th Floor, Unit 1, Wu Wu Lu 32-1, Zhong Shan Qu, Dalian City, Liaoning Province, China; 22 Jin Cheng Jie, Zhong Shan Qu, Dalian City, Liaoning Province, China; 43-39 Lugovaya, Vladivostok, Russia; CPO Box 120, Tonghung-dong, Chung-gu, Pyongyang, Korea, North; Bangkok, Thailand; Lima, Peru; Port Said, Egypt; Singapore; Brazil; Hong Kong, China; Shenzhen, China; Identification Number IMO 1790183| [DPRK].

RA, Kyong-Su, Beijing, China; Tanchon Commercial Bank Representative to Beijing, China (individual) [NPWMD]. -to- RA, Kyong-Su (|a.k.a. CHANG, MYONG HO; a.k.a. CHANG, MYO’NG-HO; a.k.a. CHANG, MYONG-HO|), Beijing, China; Tanchon Commercial Bank Representative to Beijing, China (individual) [NPWMD] (|Linked To: TANCHON COMMERCIAL BANK|).

Here is additional coverage in The Guardian, and Channel News Asia.

Read the full story here:
U.S. Targets Singaporean Supporter of North Korean Maritime Firm
Wall Street Journal
Samuel Rubenfeld
2015-7-23