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S. Korea to postpone rice aid until N. Korea acts on denuclearization

Thursday, May 24th, 2007

Yonhap
5/24/2007

South Korea has decided to put off food shipment to North Korea until the communist country fulfills its promise to shut down its main nuclear reactor, government sources said Thursday.

South Korea had planned to start sending 400,000 tons of rice to the impoverished North late this month in the form of a loan to be paid back over 30 years after a 10-year grace period.

In inter-Korean economic talks in April, however, South Korea made its food aid conditional on the North’s fulfillment of its obligation to start denuclearization steps in return for energy aid within 60 days of a Feb. 13 six-party deal.

The North failed to meet the April 14 deadline, citing a banking dispute with the United States over $25 million of its funds frozen at a Macau bank, Banco Delta Asia. In a separate deal, the North Korean money was unblocked but the communist country has yet to withdraw it.

Hoping that the banking dispute would have been resolved by the end of May, South Korea’s government last Tuesday approved budget spending for the rice aid worth $170 million and raw materials worth $80 million for the North to make soap, footwear and clothing.

“As we made clear in inter-Korean economic talks last month, however, we will wait and see if North Korea will carry out the Feb. 13 agreement,” a government official said, asking that he remain anonymous.

The South Korean government has yet to sign a commercial contract to purchase rice aid for North Korea, so it would be next to impossible to keep the inter-Korean agreement to start shipment in late May.

South Korean officials have expressed frustration over the prolonged financial dispute which was touched off by Washington’s accusations that North Korea laundered illicit money through the Macao bank.

North Korea has been free to withdraw the money but it reportedly insists that it gets it back through a U.S. bank. The U.S. government said last week that arrangements were being made to address the North Korean demand.

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Posted in Agriculture, Foreign aid statistics, International Aid, South Korea, Statistics | Comments Closed

More Help Needed to Improve NK’s Public Health

Wednesday, May 23rd, 2007

Korea Times
Lee Jin-woo
5/23/2007

A middle-aged American doctor who grew up in South Korea has stressed that it’s time to move on to helping North Korea with public health issues.

“North Korea’s food situation is at least better. We need to move on to public health issues including rebuilding the North’s nine provincial and 200 county hospitals,” John A. Linton of Yonsei University’s Severance Hospital in Seoul told The Korea Times in an interview on Monday. The 47-year-old doctor heads the hospital’s international health care center.

Linton, who is well-known for his Korean name Yin Yo-han and thick South Jeolla Province accent, proposed a three-stage medical support program for North Korea from the South Korean government.

“Number one, we need to help them with a vaccination program, which should be followed by supplies of diagnostic equipment,” he said. “The final stage should be an exchange of doctors between the two Koreas.”

He said North Korean doctors need basic diagnostic equipment _ ultrasound and x-ray machines, and clinical pathology supplies _ as well as more operating theaters.

“You have to have a healthy population in the North, for them to survive and become competitive enough to receive economic finance and business opportunities.”

He hoped that large-scale medical support to the North on a regular basis would be discussed during ministerial talks between the two Koreas in the near future.

“Nobody can argue with health care,” he said. “North Korea has been an enemy, but now at the same time they are brothers. Even if they are an enemy, you must help them.”

Linton, who visited the North 17 times between 1997 and 2003 to help eradicate tuberculosis in the Stalinist state, said it should be South Korea, not the United Nations or the World Health Organization (WHO), that needs to take the lead in helping the North.

“You have to be very, very careful with the U.N. and WHO. They treat the two Koreas as two separate countries differently,” he said. “Eventually policy should be looking towards unification. South Koreans should take the lead.”

Asked whether he is a big fan of South Korea’s engagement policy toward Pyongyang, dubbed the `Sunshine policy,’ he said he supports it wholeheartedly. Linton, however, emphasized the need to guarantee transparency in the process.

“We should not encourage some of the North Korean leadership as middle management is very corrupt. We should not reward corrupt people there. That’s not for us that’s for North Korea.”

His dedication toward helping the North was initiated by his mother, who worked to eradicate tuberculosis in Suncheon in South Jeolla Province for some 40 years. She decided to donate ambulances to North Korea in 1997.

“When we got there in Pyongyang, we suddenly received a special request from North Korea asking for assistance treating TB throughout the whole country,” he said. “We visited the entire country while helping them fight TB.”

In his autobiography published last year, Linton recalled his unforgettable experiences as an interpreter during the bloody Kwangju pro-democracy movement in May 1980.

He served as a translator to people who occupied the provincial capital against the then military regime led by former President Chun Doo-hwan.

“Immediately following this experience, I was labeled as an insurgent ,” he said. “The American embassy in Seoul asked me to leave Korea, just for translating for three to four hours for reporters.”

He said his experience in Kwangju changed his personal life and made him understand what injustice is and how dangerous newspapers are.

He said such a great sacrifice should never ever happen again on the Korean Peninsula.

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Posted in Disease prevention, Epidemics, Health care, Pediatrics, UNWHO | Comments Closed

NKorea food crisis complicated by politics: WFP

Tuesday, May 22nd, 2007

AFP
Philippe Agret
5/21/2007

After being ravaged by famine in the 1990s, North Korea again faces serious food shortages, with a UN official based here saying that politics are making things worse.

On the road from the capital Pyongyang to Kaesong in the south, every hill lot is developed for agriculture, with all farm work done by hand.

But only 17 percent of the land in North Korea is arable, one of the lowest ratios in the world, according to the UN’s World Food Programme (WFP).

“North Korea is suffering a chronic food shortage due to structural problems and limited food imports and food aid,” said Jean-Pierre de Margerie, the WFP’s representative in the communist state.

He lamented the international community’s lack of commitment to North Korea amid the deadlock in six-nation talks on disarming Pyongyang, and what some consider to be “hidden sanctions” linking a large part of aid to politics.

“There is no evidence that holding back food or humanitarian aid destined to civilian populations would have an impact on the government or its behaviour,” he said.

North Korea’s worst period came from 1995 to 1999 when drought, flooding and the disappearance of Soviet aid led to a famine that killed between 800,000 and two million people, according to independent estimates.

The scars of the famine still run deep, with a 2004 United Nations study finding that 37 percent of North Korean children suffered chronic malnutrition.

Some experts use the term “7, 8, 9, 10” — as an adult, a seven-year-old born during the famine will be eight kilograms (18 pounds) lighter, stand nine inches (23 centimeters) shorter and live 10 years less than a South Korean of the same age.

The groups most at risk are young children and women who are pregnant or breastfeeding.

After a record harvest in 2005, 2006 was “very difficult” due to heavy floods in the summer and a dramatic drop in food aid and food imports; 2007 could also be dire, de Margerie warned.

Amid the international furore over Pyongyang’s nuclear and missile tests last year, China reduced its aid by half and        South Korea temporarily halted shipments.

Seoul has since resumed fertiliser aid and promised to provide 400,000 tons of rice to North Korea starting in late May.

But the food aid is linked to political conditions, such as Pyongyang shutting its nuclear reactor in line with a multilateral disarmament deal reached in February.

The impoverished country faces a shortfall of one million tons of food this year, or 20 percent of its needs, according to the WFP and the UN’s Food and Agriculture Organisation.

Up to one third of North Korea’s 23 million people may need assistance ahead of the next harvest, warns the WFP.

So is there a danger of another famine?

“No, not yet,” said de Margerie. “But if the trend continues, pockets of severe malnutrition could develop.”

In Pyongyang, not everyone is pessimistic as there is a lack of reliable agricultural data. Some observers say the problems lie in the distribution system and access to food, rather than in actual production.

North Korea’s leaders — whose ruling motto is “juche,” or self-reliance — say they have made food security their priority, but Pyongyang has nonetheless relied on foreign help.

The WFP has collected two billion dollars in 10 years, supplying four million tons of food between 1995 and 2005 that assisted one-third of North Korea in its biggest operation at the time.

Since 2001, multilateral aid from the WFP has been gradually replaced by assistance from China and South Korea. While bilateral aid goes to the government and may be distributed to the elite, the WFP says it closely monitors its aid so that it reaches those most in need.

This year, donor countries have promised only 12,000 tons of food.

The WFP has received only 20 percent of the financing for its programme up to March 2008, assisting three percent of the population, or 600,000 people, instead of the initial objective of reaching nearly two million North Koreans.

De Margerie says he hopes the international community will set aside political concerns to focus on the human tragedy unfolding in North Korea.

“You only see negative images of North Korea. But it has a human face,” he stressed.

“An eight-month-old child or pregnant woman does not engage in politics. It’s the most vulnerable in the civilian population who pay the price.”

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Posted in 1990s Famine, Agriculture, International Aid, Juche, Pediatrics, UN World Food Program | Comments Closed

Swiss authorities question U.S. counterfeiting charges against North Korea

Tuesday, May 22nd, 2007

McClatchy Newspapers
Kevin Hall
5/22/2007

Swiss police who closely monitor the circulation of counterfeit currency have challenged the Bush administration’s assertions that North Korea is manufacturing fake American $100 bills.

President Bush has accused North Korea of making and circulating the false bills, so perfect they’re called supernotes, and in late 2005 the U.S. Treasury took measures to block that country’s access to international banking. North Korea subsequently halted negotiations over dismantling its nuclear weapons program, a process that remains in limbo because of the dispute.

The Swiss federal criminal police, in a report released Monday, expresses serious doubt that North Korea is capable of manufacturing the fake bills, which it said were superior to real ones.

The Swiss report includes color enlargements that show the differences between genuine bills and counterfeit supernotes. The supernotes are identical to U.S. banknotes except for added distinguishing marks, which can be detected only with a magnifying glass. In addition, under ultraviolet or infrared light, stripes appear or the serial numbers disappear on the supernotes.

The Bundeskriminalpolizei didn’t hazard a guess as to who’s been manufacturing the supernotes, but said experts agreed that the counterfeits weren’t the work of an individual but of a government or governmental organization.

The U.S. Secret Service, the lead federal agency in combating counterfeiters, declined to provide details or respond to the Swiss report. But spokesman Eric Zahren said the agency stood by its allegations against Pyongyang.

“Our investigation has identified definitive connections between these highly deceptive counterfeit notes and the North Koreans,” Zahren said. “Our investigation has revealed that the supernotes continue to be produced and distributed by sources operating out of North Korea.”

The Swiss report says the Secret Service has refused to provide any information about its investigations. It notes that if the United States produced concrete evidence to back up its allegations, “it would have a basis for going to war.” Under international law, counterfeiting another country’s currency is considered a cause for war.

But if the U.S. has a reason to go to war, against whom?

The Swiss police noted that before charging North Korea with counterfeiting, U.S. officials had mentioned Iran, Syria and East Germany as possible manufacturers. North Korea’s capacity for printing banknotes is extremely limited, because its banknote printing press dates from the 1970s. Its own currency is of “such poor quality that one automatically wonders whether this country would even be in a position to manufacture the high-quality `supernotes,’ ” the report says.

For years, analysts have wondered why the supernotes – which are detectable only with sophisticated, expensive technology – appear to have been produced in quantities less than it would cost to acquire the sophisticated machinery needed to make them. The paper and ink used to make U.S. currency are made through exclusive contract and aren’t available on the open marketplace. The machinery involved is highly regulated.

In theory, if North Korea were producing the notes, it could print $50 million worth of them within a few hours – as much as has been seized in nearly two decades, the report said.

“What defies logic is the limited, or even controlled, amount of `exclusive’ fakes that have appeared over the years. The organization could easily circulate tenfold that amount without raising suspicions,” says the Swiss police report, which also says Switzerland has seized 5 percent of all known supernotes.

Moreover, it noted that the manufacturer of the supernotes had issued 19 different versions, an “enormous effort” that only a criminal organization or state could undertake. The updates closely tracked the changes in U.S. currency issued by the Federal Reserve Bank.

The fact that the Swiss are questioning the veracity of the U.S. allegations against North Korea carries special weight in the insular world of banknote printing.

“The producers of the most sophisticated products used in banknote printing are Swiss or at least of Swiss origin. That goes for the (specialty) inks and that goes for the machines,” said Klaus Bender, a German foreign correspondent and the author of “Moneymakers: The Secret World of Banknote Printing.”

“Can the North Koreans do it, are they doing it? The answer is couched in diplomatic language, (but) the answer is clearly no,” Bender said.

—

EXCERPT FROM THE REPORT:

“According to the US Secret Service, $50 million worth of `super-fakes’ were confiscated worldwide over the past 16 years, only a small portion of them within the United States. Measured against the US annual counterfeit damage of $200 million, the damage from $50 million worth of `super-fakes’ is not that significant. The Federal Reserve Bank produces genuine $100 dollar bills mainly for the foreign market. On their return to the U.S., the issuing bank after examination can easily distinguish the `supernotes’ from originals using banknote testing equipment, due to altered infrared characteristics. For this reason, the United States over the years has hardly suffered economic damage due to the `super dollar.’

“A (banknote) printing press like the one in North Korea can produce $50 million worth of bills in a few hours. Using its printing presses dating back to the 1970’s, North Korea is today printing its own currency in such poor quality that one automatically wonders whether this country would even be in a position to manufacture the high-quality `supernotes.’ The enormous effort put into the making of the 19 different `super-fakes’ that we know of is unusual. Only a (criminal) governmental organization can afford such an effort. What defies logic is the limited or even controlled amount of `exclusive’ fakes that have appeared over the years. The organization could easily circulate tenfold that amount without raising suspicions.”

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Posted in Banking, Counterfeiting, Finance, Fiscal & monetary policy, Illicit activities, Switzerland | Comments Closed

Teaching with the ‘enemy’

Tuesday, May 22nd, 2007

The Japan Times (Hat tip to the Marmot)
Jason Williams
5/22/2007

In February this year over 300 people attended the performing arts festival at a junior high school in Okayama. It was much the same as any other arts festival at any other junior high school in Japan; the students sang, danced, played music and performed skits for an audience made up of family and friends.

There was, however, one major difference — the program wasn’t Japanese. It was Korean. Korean in song, Korean in dance and Korean in language.

The festival was at the Okayama Korean Primary and Middle School, a school for Korean residents of Japan run by the General Association of Korean Residents in Japan, or Chongryun, which has close ties to North Korea.

As a teacher and “insider” at a Korean school in Japan, I would like to share some of my experiences and observations to demonstrate how these schools are at the same time similar to and uniquely different from other schools here.

When I mention to others that I teach at a Korean school, I can usually expect one of three reactions. First, most people, Japanese and non-Japanese alike, are surprised to learn that such schools exist. In fact, Chongryun operates about 70 schools throughout Japan, from kindergarten to university, and in 2006 the organization celebrated the 60th anniversary of the founding of its schools.

Second are those who have at least heard of the schools but say that they know very little about them.

The third, and most damaging, reaction is rooted in the misconception that the schools are similar to the way that North Korea is portrayed in the Japanese media. I am often asked if the school is militaristic or if the students and teachers are brainwashed, communist fanatics who hate Japan and America. I have even been asked if the school has spies or if I feel safe being at the school. I can’t help thinking, “Why don’t you just come see for yourself?”

The school I teach at is located near Kurashiki in Okayama Prefecture. The school building, as I approached it for the first time nine years ago, looked like others I had seen in Japan but a bit smaller and older. When I arrived at the school, I was met with the usual pointing, giggling and staring from students that most foreigners experience when they go to a local school.

The first difference I noticed was the clothes of the female students and teachers. They were all wearing the traditional Korean “chima chogori.”

“The chima chogori is a symbol of our natural culture, national pride and history. To wear it is to recognize ourselves as Korean,” explains Pak Kum Suk, a former English teacher at the school.

I also noticed was that the Korean language was ubiquitous in the school. Writing on chalkboards and bulletin boards, announcements and conversations were all in Korean.

Knowing almost nothing about the Korean community in Japan at that time, I assumed that the students and teachers were from Korea and were living in Japan because of work, study or some other reason. Later on I learned about the history of ethnic Korean residents of Japan, known as “zainichi” Koreans in Japanese, and that all of the students and teachers were actually born and grew up in Japan.

Other than the uniforms and language, is there a lot that distinguishes this school from other elementary and junior-high schools in Japan?

Well, yes and no. Like most schools, the students study a basic curriculum that includes math, science, history, Japanese and English. Unlike other schools, the classes, except for English and Japanese, are all taught in Korean. Korean is not just the language of communication at the school; it is the language of instruction as well.

“The original purpose of the schools founded by the first generation of Koreans in Japan was to teach their children Korean language,” says Pak.

This does not mean that students are unable to speak Japanese. On the contrary, the combination of Korean-language immersion in school and the Japanese-language world outside the school mean that the children tend to be naturally bilingual.

“When I say I’m Korean,” says the school’s English teacher, Kang Yun Hwi, “some Japanese ask me why I can speak Japanese so well. I have to explain that I was born in Japan.”

The school also has clubs for students to participate in. In addition to soccer and volleyball there are Korean dance and music clubs. Such activities play an important role in helping students develop a sense of ethnic identity. Events at the school include sports festivals, parents’ day, field trips and graduation ceremonies. These are similar to the ones I have seen at Japanese schools, but with an emphasis on Korean language and culture.

The students are typical middle-schoolers. The boys talk about sports and computer games, the girls about singers and idols. Both worry about high-school entrance exams.

“When I was a junior high school student, my classmates and I talked about popular musicians like Hikaru Utada, Namie Amuro and Mr. Children. We also took “purikura” (photo booth snaps) whenever we went out,” recalls Kim Woo Ki, a recent graduate of Chongryun-operated Korea University.

The unconventional thing about the school is that staff and students make an open effort to maintain their ethnic identity and cultural heritage. Once when the students were making the Korean food “chijimi,” I mentioned that it is Korean “okonomiyaki” only to be lightheartedly corrected — okonomiyaki is Japanese chijimi.

In the teachers’ room there are pictures of the late North Korean dictator Kim Il Sung and his son, current leader Kim Jong Il, which surprised me the first time I saw them. However, they are the only ones I have seen in the school.

“From the beginning, North Korea has given a lot of funding, educational aid like musical instruments, and concern to the schools,” explains Pak.

Conversations I have with teachers tend to focus on current events and culture rather than politics. The one time a political topic did come up was after the admission of the abduction of Japanese nationals by North Korea. I taught at the school just after this news broke and the staff all expressed seemingly honest shock and sincere remorse and regret. They seemed to be just as surprised as everyone else I knew. Nobody denied the facts of these incidents as many Japanese people I have talked to believe.

After the 9/11 terrorist attacks in the U.S., teachers and students expressed shock and worry, asked if my family and friends were OK and offered me, an American, their condolences.

I have seen no flags, military drills, marches or propaganda at the school. The only open, perhaps hopeful, political statement I see are maps of the Korean Peninsula that have no border separating North and South.

“The relationship between the North and South is better than most Japanese people think,” argues Pak.

I have noticed that everyone refers to themselves, their clothes, language and customs as “Korean” — not “North” or “South,” just “Korean.”

“The term ‘pro-Pyongyang’ (for Chongryun) is not completely appropriate,” says Pak. “Everyone in Chongryun and all people who send their children to our schools do not necessarily support the North. Some people simply place an importance on Korean ethnicity and identity, support our curriculum, and emphasize ties among community members.”

The school is very open to people who would like to visit and has welcomed my mother, wife (Japanese), and friends and coworkers from Australia, Canada, America and Japan. I have seen exchanges with Japanese schools and visits by community groups.

“We would like to have friendship with whoever wants to sincerely know about us and not people who are interested in gossip,” Pak says.

Even though I have mentioned that many people are unaware of the existence of the Korean schools, certain people, unfortunately, are. Beginning with the admission of the abduction of Japanese nationals, acts of aggression toward Chongryun schools and their students have increased. The number of recorded incidents nationwide since October of last year has already exceeded 150 and includes attacks on students, damage to the schools, and threatening telephone calls and mail.

“We have had our windows broken and (rightwing) sound buses drive around the school,” explains Pak.

Unfortunately, due to the lack of media interest in these schools, many people are unaware of these incidents.

I hope that in this article I have not idealized the school I teach at or my experiences there. Also, I am not trying to justify or support any of the political policies of North Korea. My intent is to help people understand what the Chongryun schools and their students are actually like and to encourage others to visit the schools and discover more first-hand.

I do not want people to develop misconceptions based on political affairs between North Korea and Japan. The Chongryun schools are not about politics. They are about older generations helping younger generations learn their traditional culture and appreciate their ethnic identity.

Whenever I go to the school, I can’t help thinking how much easier it would be if the students to went to Japanese schools. The building would be bigger, there would be more facilities and more classmates to get to know.

But at what cost? The loss of language, history, culture and ethnic identity is a heavy price to pay. The desire and ability of the teachers, students and parents to preserve and promote their heritage is certainly to be admired and, I hope, respected by others in Japan.

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Posted in Chongryun, Education, Japan | Comments Closed

Due to China’s protest, North Korea’s drug production facility partly closed

Monday, May 21st, 2007

Daily NK
Han Young Jin
5/21/2007

Well-informed sources say Heungnam manufacturer’s production facility shuts down.

Several well-known sources relayed on the 20th that as North Korean drugs flow into China in large amounts, it strongly protested to North Korea and requested that the Heungnam Pharmaceutical Manufacturer in Hamheung be shut down.

Following suit, the North Korean government authorities was known to destroy the Heungnam Pharmaceutical Manufacturer used in producing bingdu (the alias for “ice” classified in the category of Philopon in North Korea).

The well-informed source said, “China’s judicial authorities are strongly coping with the situation by imposing three years of penal servitude to those who sell 10g of Bingdu (so called “Ice” in North Korea) or a penalty of 20,000 yuan. When North Korea demonstrated a lax response, China expressed strong discontent.”

In North Korea, the Nanam Pharmaceutical Manufacturer in Chungjin, North Hamkyung is famous as a representative drug manufacturing company. The source evaluated that Hamheung, which has recently risen as a drug production base, had weak means of living which produced the highest number of deaths during the 90s’ mass starvation and the stimulant “Ice” was misused due to the lack of medical products.

$3,000 per kilogram…dealt for $10,000 at the border

An internal source said, “During the March of Suffering, a part of citizens who even sold raw materials and factory equipment earned big money by selling drugs. Since then, everyone has followed the trend. The people in Hamheung started handling drugs with great ambition due to the fact that at the Heungnam Pharmaceutical Manufacturer, the prime cost for a kilogram is $3,000 dollars and the profit exceeds $5,000.”

The source said, “In the past, people touched drugs hoping to make a big fortune with a single swoop, but everyone is thinking about making money by selling drugs nowadays. Inevitably, the number of civilians who have become ‘ice’ addicts has significantly increased.”

Ice can be produced for $3,000 per kilogram and sold on site for $7-8,000 and at the border region where smuggling is possible, it can be sold for up to $10,000.

Another source said, “Civilians have fallen to the bedazzlement of making a jackpot with drugs, so they have gone to the border region carrying drugs and seeking dealers. However, fakes that have been manufactured ingeniously are also making a wave.”

In North Korea, as drug sales have been unyielding, it was known that teenagers who are touching “ice” are not only seriously in Hamheung but in all regions. They are not showing immediate signs of addiction, but they can be presumed as “high-risk” people for addiction.

North Korean businessman Mr. Kim, who is engaging is trade between North Korea and China, wore a sorry expression and said, “Nowadays, children who are not yet fully grown use ‘ice.’ Not too long ago, my friend’s 12-year old son was found while secretly using his father’s ‘ice.’ After severely beating him, the father asked, “Do you like ‘ice’ so much? The son responded, ‘it is a cure-all.’”

In the mid-1990s, due to deteriorated medical facilities and a shortage of medical goods, citizens started to depend on folk remedies. Civilians who started using ‘ice’ in lieu of cold medicines started using it as emergency medicine even for the flu and strokes.

Mr. Kim said, “Ice has a stimulant quality, so it is used to as a stimulant and a stress-releaser. Even children have come to regard it as a panacea and think that a little suck of ice will instantly get rid of pain and make one refreshed.”

Narcotic squads hardly have any strength

The North Korean authorities issued a narcotics degree in March of last year to prevent drug abuse. It has even issued the threat of putting to death related parties of drug deals. However, businesses that have earned money through drugs feed bribes to inspection organs, so sources said that these institutions cannot exert any strength.

One domestic source said, “Recently, a Central Party inspection group was organized in Shinuiju and came forward to regulate drugs, but authorities such as the National Security Agency, the National Security Office, and others have become implicated. However, exposing them in increasing measures makes punishment difficult, because complicit individuals can come forward in hordes.”

Drug sellers in the border region have divided left-over profits from handing over to China with participating National Security officers. The source said, “If a drug dealer is arrested, if back-money is given, even the ring-leader will be immediately released.”

The source also said that upper-class drug inspection groups can instantly become conspirators due to the high amount of money to be handed over to their superiors.

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Posted in Black markets, China, Drug smuggling, Health care, Illicit activities, International trade, Pharmaceuticals | Comments Closed

Inter-Korean railroad faces huge obstacles

Monday, May 21st, 2007

According to the Joong Ang Daily (2007-5-21):

It must have been the most expensive train ride in history. A ticket to cross the border between the two Koreas, a 90-minute journey over 30 kilometers, cost more than 2.7 billion won ($2.9 million) per person last week.

On Thursday, 200 South Koreans boarded two trains on the reconnected Gyeongui and Donghae lines on the west and east sides of the peninsula to chug across the Demilitarized Zone in a show of potential unity. The cost to South Korea, so far, has been 545.4 billion won to reconnect the sections of the cross-border railway severed by the Korean War.

While there are no concrete plans for further runs, the South Korean government has dreams of an inter-Korean rail network that would help the peninsula, cut freight shipment costs dramatically and link Korea by rail to the vast markets of China and the natural resources of Russia.

But to get there from here, the money spent so far on the test run is a pittance. Assuming that the enormous political obstacles to dealing with the North could be overcome, experts say it could cost as much as $10 billion to overhaul the slow, obsolete and backward rail infrastructure of North Korea.

That has not stopped some officials from insisting it can happen. On May 14, Unification Minister Lee Jae-joung announced a three-step plan for an inter-Korean railroad.

The first step would be to use a section of the Gyeongui Line, connecting Seoul and Shinuiju in the North, to serve the Kaesong Industrial Complex project. Transporting goods in and out of Kaesong and allowing North Korean workers to commute to the inter-Korean industrial complex by train is part of the plan.

The next step would be expanding use of the Gyeongui Line up to Kaesong for South Koreans, so that commuters to the complex and South Korean tourists visiting Kaesong could ride the train.

And finally, the South wants to operate trains on a regular basis between Seoul and Pyongyang.

“As of now, providing transportation for goods and commuters to Kaesong and allowing Mount Kumgang tourists to travel by train are current demands,” Lee said at the briefing. The Donghae Line, running between Yangyang and Anbyon in the North, will be used for the Mount Kumgang trip.

“More than 10 billion won worth of goods is produced in Kaesong,” Lee said. “More than 13,000 North Koreans are working there and commuting has become a serious issue.”

Lee has even more ambitious dreams ― the building of a rail line to connect Korea with Europe. “The reconnected inter-Korean railroad will be connected to Russia, one of the largest reserves of natural resources in the world, and China, to provide new economic opportunities,” Lee said. “We need a serious discussion on this with the North.”

Lee, however, admitted that there are enormous obstacles. Gaining the cooperation of the North’s hard-line military, which has been reluctant to open the border to train crossings, and modernization of the outdated North Korean rail infrastructure are among them.

Continuing his drumbeat for the project, after the test run, Lee said South Korea will gladly pay for updating the North’s railroad network ― and cost is no object. “No matter how much it will cost, it is an investment for our economy,” Lee said Friday. “The research is ongoing to estimate the cost, so it is hard to make the number public.”

Estimates vary widely about the cost of modernizing the North’s railroads. Lim Jae-gyeong, a researcher at the Korea Transport Institute, estimated that upgrading the North’s sagging rail networks, for both the Gyeongui and Donghae lines, would cost from 6.5 trillion won to 8 trillion won.

Kim Gyeong-jung, the team leader for inter-Korean railroad networks at the Ministry of Construction and Transportation, cited a Russian report that estimated it would cost up to $3.5 billion “to modernize the railroads in the North and connect them with the Trans-Siberian Railroad.”

Ahn Byung-min of the Korea Transport Institute put the figure at $10 billion for the project, also citing previous Russian reports.

Russia is enthusiastic about the prospects, though, and it conducted three surveys of the North’s railroad infrastructure between 2001 and 2003. The project may accelerate when the two Koreas and Russia begin railroad talks next month.

“We are pushing to hold talks with Kim Yong-sam, the North’s railroad minister, and Vladimir Yakunin, president of the state-run Russian Railways company, at the end of next month in Pyongyang,” said Lee Chul, head of the Korea Railroad Corporation. “The South and Russia have already agreed and the North responded positively.”

The meeting will focus on linking a trans-Korean railway with the trans-Siberia railway. By linking to the Russian lines, Vladivostok could be reached directly by rail from Busan. Researchers say the connection would enable freight to be shipped from Busan to Moscow by rail in just eight days. The transportation cost would be half of the current rate for sea shipments, which is about $600 for a 20-foot container.

The immediate challenge is the infrastructure. Rail is the backbone of North Korea’s transportation system, Ahn said. About 60 percent of passenger traffic and 90 percent of freight is carried by train. With two main rail lines running on the east and west sides of the country, Ahn said, the North Koreans have tried unsuccessfully to connect the systems since the 1970s.

“As of late 2005, the North had about 5,248 kilometers of rail, but 98 percent of them are single-track lines,” Ahn said, meaning that the traffic that can be carried is limited to one train at a time. “Most of the other infrastructure, such as bridges, tunnels, stations and communication systems, is also extremely outdated.”

The trains also run at very slow speeds, between 30 and 60 kilometers an hour. “The speed has not changed much since 1956,” Ahn said. “From Pyongyang to Shinuiju, the distance is 223.6 kilometers. By express, it would take about five hours and five minutes, so the average speed is about 40 kilometers per hour,” Ahn said. “But the regular trains take more than 11 hours.” He noted that there are also no set timetables and service is erratic and sometimes dangerous.

Ahn, who has visited North Korea several times to examine the fraying rail network, provided some extreme examples of how the North tries to cope. “Russia and China often provide food aid to the North via trains,” Ahn said. “When train cars from the two countries arrive, the North, under bilateral treaties, must send back the trains within six months. Rarely are the actual train cars returned, instead China and Russia often receive older train cars ready to retire from service.”

About 2,000 train cars sent from China and Russia have thus been marked as “made in North Korea” and put to use, Ahn said.

“North Korea’s founder Kim Il Sung once said the operation of a railroad is like the circulation of blood in the human body,” Ahn said, “Based on that expression, you could say that North Korea’s rail network is a patient suffering from a serious circulatory disease.”

Read the full story here:
Inter-Korean railroad faces huge obstacles
Joong Ang Daily
Ser Myo-ja
5/21/2007

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Posted in China, Railways, Russia, Transportation | Comments Closed

Nicaragua embraces North Korea

Friday, May 18th, 2007

TvNZ
5/18/2007

Nicaraguan President Daniel Ortega, once a Cold War enemy of the United States, has re-established diplomatic relations with former ally North Korea just four months after he bounced back to power.
 
Ortega says his country has a special relationship with North Korea because the communist country helped train his left-wing Sandinista guerrilla army in the years before a 1979 revolution that first carried him to power.

Weakened by a civil war against US-backed rebels, 0rtega was toppled by voters in 1990 and ties with North Korea were then broken off. But Ortega won a presidential election last November after 16 years in opposition and returned to office in January.

He has since moved Nicaragua closer to several leftist and anti-US governments such as Cuba, Iran and Venezuela and has now announced the resumption of diplomatic ties with North Korea.

“We’re going to strengthen relations,” Ortega said.

North Korea’s deputy foreign minister was to visit Nicaragua this week.

Ortega says he wants to stay on good terms with the US but the closer ties with North Korea are likely to worry Washington, which is trying to push North Korea to shut its nuclear facilities.

When Ortega led Nicaragua in the 1980s, his main international support came from communist Cuba and the Soviet Union.    

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Koreas, Russia to Discuss Rail Link

Thursday, May 17th, 2007

Korea Times
Kim Yon-se
5/17/2007

Senior officials of South Korea, North Korea and Russia will likely meet soon to discuss linking the Trans-Korean Railway (TKR) and the Trans-Siberian Railway (TSR), the chief executive of the Korea Railroad Corp. (KORAIL) said Thursday.

The three countries plan to hold a second round of talks for railway cooperation in Pyongyang in late June, said KORAIL President Lee Churl.

In a meeting with reporters in Munsan, north of Seoul, Lee said, “We’ve already reached an agreement with Russia and received a positive reply from the North.”

If the North accepts the proposal, Lee will meet his North Korean and Russian counterparts to discuss the matter on the basis of the first tripartite meeting in Russia in March 2006.

The connection of TKR and TSR, dubbed the “Iron Silk Road,” is expected to bring enormous economic benefits to the two Koreas and Russia.

Experts say it is expected to cut logistic costs as well as freight delivery times substantially.

First of all, inter-Korean projects including tours to Mt. Geumgang or Gaeseong, an ancient capital city in North Korea, will likely be activated .

Freight transportation fares between Incheon and Nampo in the North are expected to fall by 25 percent on average by utilizing the railway instead of ships.

It takes about 30 days and costs $2,213 for conveying 1 TEU (20-foot equivalent units) of freight between Busan and Moscow by ship. In comparison, it would take about 15 days and $1,822 if the railways were linked.

The Busan New Port has recently been designed to make Korea a logistics hub in Northeast Asia.

The port is likely to provide another advantage when the railroad among the two Koreas and Russia is connected.

It will become both the starting and ending point of the “Iron Silk Road,” crossing the Eurasian continent via the Trans-Siberian, Trans-Manchurian and Trans-China railways.

The port authority plans to build a logistics complex on a 1.2 million-square-meter lot in the northern container pier of the new port by 2008.

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Transfer of N. Korea Money Sought

Thursday, May 17th, 2007

Washington Post
Glenn Kessler
5/17/2007

Wachovia Bank Considering State Department Request

Wachovia Corp. said yesterday that it is considering a request from the State Department to transfer tainted money tied to North Korea from an overseas bank blacklisted earlier this year by the Treasury Department.

The State Department has scrambled to persuade banks around the world — including U.S. banks — to transfer the money, but financial institutions have been unwilling to shoulder the risk, because they do not want to run afoul of the Treasury Department. The failure to find a willing bank has left in limbo a deal inked in February that the Bush administration had called a breakthrough in the impasse over North Korea’s nuclear ambitions.

Pyongyang was supposed to shut down its reactor at Yongbyon by April 14, but has refused to do so until $25 million it holds in the blacklisted bank, Banco Delta Asia, is released. The bank is located in the Chinese special administrative region of Macao.

In response to an inquiry, spokeswoman Christy Phillips-Brown of Wachovia said that the Charlotte-based bank had “been asked, on a nonprofit basis, by the U.S. State Department to help them process an interbank transfer of funds held at other banks, which are the subject of negotiations with North Korea,” adding: “We have agreed to consider this request, and our discussions with various government officials are continuing.”

Phillips-Brown said that Wachovia, which had been a U.S. correspondent bank for the Macao bank, is “fully compliant” with sanctions involving North Korea but that “we take any request for assistance from our government seriously and endeavor to cooperate whenever possible.” She added that the bank “would not agree to any request without appropriate approvals from our regulators.”

The United States agreed in February to end a banking investigation that had frozen about $25 million in North Korean money, but in March the Treasury Department cut off the Macao bank from the U.S. financial system. Treasury officials said that nearly half of the money was obtained through illicit activities, such as money laundering and counterfeiting. But in an effort to win North Korea’s cooperation, U.S. officials agreed to return all of the money to Pyongyang. Yet the transfer has proved impossible to arrange.

U.S. government officials first disclosed the request made to Wachovia. Treasury officials declined to comment, but sources said that many officials are dismayed that the administration is now asking a major U.S. bank to work around an order issued two months ago. Some White House officials have also objected to using a U.S. bank, but Secretary of State Condoleezza Rice supports the possible deal with Wachovia.

“I can assure you . . . we are not going to allow $25 million or even $26 million to get between us and a deal that will finally do something about nuclear weapons on the Korean peninsula,” Assistant Secretary of State Christopher R. Hill told the Korea Society on Tuesday. “We are going after this problem until we solve this problem.”

The Treasury Department has not been involved in the effort to find a financial institution to handle the money, leaving the search to the State Department. But Treasury would need to grant significant waivers, such as special permission for a U.S. bank to deal with Banco Delta Asia. One senior U.S. official said that it is not clear “what universe of waivers” would be needed to ease the bank’s concerns that it would not be putting its reputation at risk.

Deputy Russian Foreign Minister Alexander Losyukov told the RIA Novosti news agency yesterday that Russian banks had refused to handle the transfer. “Until the U.S. Treasury lifts restrictions on operations with Banco Delta Asia, no sensible banks will deal with transfers of North Korean funds,” he said.

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Posted in Banking, Finance, USA | Comments Closed

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