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An Employee from the Emperor Hotel in Rajin Out to Do Business in a Market Place

Monday, November 14th, 2005

Daily NK
Kim Young Jin
11/14/2005

Employees from the Emperor Hotel in the city of Rajin in North Korea are said to make their livings by doing business in market places. The hotel is well known for its casino.

On the 13th day of this month I had an interview with a manager of the hotel, who I will call Kim Myung Chul (alias, 42 years of age) for the sake of his safety. “The hotel has had much difficulty paying wages to its employees since it closed its casino in February,” he said. “It laid off about half of its 300 employees, and even some of the remaining half had to open restaurants near the hotel or start business in market places for their livings.”

The Emperor Hotel is a five star hotel founded by the Emperor Group in Hong Kong that invested about 24 million dollars in it. It is well known for the finest casino in North Korea.

For the last two years, two high raking Chinese officials have lost a large sum of government money to the casino and the Chinese government complained to the North pressing it to close it. Thus, it was closed in February, and the hotel lost many Chinese tourists. The number of Chinese tourists had been almost 20 thousands a year before. Virtually the hotel is out of business now.

Chae Moon Ho, a former head of Traffic and Transportation Office of Yanbian Autonomous Prefecture in Jilin, China squandered 3,510,000 yuan (more than 434,000 dollars) of government money in the casino and was sentenced to 8 year imprisonment at the first trial. Mr. Wang, a former superintendent of highway construction, wasted 870,000 yuan (about 107,000 dollars) of government money in the casino and was taken into custody.

After these incidents, the Chinese government had prevented travel agencies around Yanbian area from holding North Korean tourism in March this year. It lifted the ban last September.

The following is some excerpts from the interview.

– When did you start to work for the Emperor Hotel?

I have been working in the hotel since 2000. People in Rajin call it Bipa Hotel or the Five Star Hotel. When the hotel was first opened, it was run in a capitalistic way. Even hostesses from Russia and China were recruited. But they have all returned now because they could no longer get paid. It took 3 years to complete its construction. I heard that it had been intended to be a 30 story building, but it is 7 stories high because the Emperor Group cut spending. Visitors were usually foreign gamblers and those Chinese who enjoyed fish and other seafoods.

– How is business now?

Business situation became very tough after the Chinese stopped coming. Usually thousands of Chinese people visited for the summer, and Russian and Chinese gamblers constantly came and went. But since the casino was closed and the Chinese stopped coming, it has been difficult for the employees to be paid. The hotel even laid off half of its employees. At frist 300 people were recruited, but there are less than 150 employees now. Among them, less than 50, mostly janitors, cooks, Karaoche coordinators, massagists, come to the hotel to work.

– Does the owner not pay the employees?

I do not know. Even though the owner is Emperor Group from Hongkong, the employees are controlled by the Administrative Committee of Rajin city. I suppose that wages must be distributed by the civil authorities. Anyhow, I have not been able to be paid since last spring.

– What kind of people are employed in the hotel?

High ranking people were eliminated from the recruit lest they be contaminated by capitalism brought in by foreign gamblers. For example, Kim Il Sung University graduates, partisans, workers involved with law and national defense and their family members were all eliminated. Mostly tall and good looking people from Rajin were accepted.

– How are the employees paid?

At first, we were well paid. We were not rationed but received wages. Until 2000, I received 300 yuan a month. At that time, 1 yuan($0.1237) was equivalent of 25 Chosun(NK) won($0.0125), and rice was quite cheap. Hence 300 yuan made a sound pay. Moreover, we were fed three times a day and allowed to sleep in the hotel, which was considerable benefits for us. But while business was getting difficult, employees were being turned into 8.3 workers one after another. Finally, payment started to be incomplete from last February. We could just take three meals a day thanks to the money the 8.3 workers gave to the hotel.

– What is 8.3 worker?

The hotel forced some of its employees to earn money all by themselves and to give some part of it to the hotel. 8.3 worker is called so because Kim Il Sung ordered the system during a factory visit on a third day of August.

– How do 8.3 workers earm money?

Some workers opened restaurants near the hotel, and others merchandize in market places. There are people like me who are out here in China and do business with old customers. Chinese tourists like to eat fish and other seafoods in Rajin. That’s why 8.3 workers like to open seafood restaurants near the hotel calling them branch restaurants of the hotel. There are more than 10 such restaurants near the hotel. There are also a few souvenir shops. If they earn money, they give some of it to the hotel. Those who merchandize are just like that. If you give some money to the hotel every month, you are not required to go there to work.

– Does the money go to Emperor Group?

No. It goes to the Administrative Committee of Rajin city. The hotel is just a Work Place: we are not under the owner’s control. We are required to take permission from the Administrative Committee to work outside the hotel.

– Do 8.3 workers make much money?

It is advantageous for business to be an employee for the hotel. We do not pay such heavy taxes as ordinary merchandizers do. It is also easier for us to occupy stalls in market places than for ordinary merchandisers.

– What is people’s life like in Rajin recently?

Outsiders envy Rajin and Seonbong because they compose the free trade zone, but the situation is on the contrary. The government takes more from Rajin and Seonbong because of the free trade. Rice is also more expensive. They are good places for the rich to live in but not for the poor.

Posted in China, Economic reform, Foreign direct investment, Gambling, Hoteling, Labor conditions/wages, Rason Economic and Trade Zone (Rajin-Sonbong), Tourism | Comments Closed

Rallying round to boost Korean harvest

Friday, October 28th, 2005

BBC
Andrew Harding
10/28/2005

It was early on Sunday morning, but Roh Buk-chong, a 39-year-old postman, was already striding down the road leading north from Pyongyang.

“I am a volunteer,” he said. “I am going to help the farmers with the harvest – full of patriotic enthusiasm.”

He was not alone. In a scene strangely reminiscent of a 1950s Soviet propaganda film, the road was clogged with pedestrians and cyclists, heading for the nearby rice fields in the bright sunshine.

A government van passed by with loudspeakers on the roof, playing a rousing tune.

“They call me the girl who works well,” went the lyrics. “They call me the girl who works faster than the fastest horse.”

All this is part of what observers say is a concerted push by North Korea’s isolated regime to boost domestic food production, in a country where a third of the population is chronically malnourished.

It may be working. According to some predictions, this year’s harvest will be 10% larger than in 2004.

But that will not be enough, warned the UN World Food Programme’s country director, Richard Ragan.

“North Korea is chronically food insecure, so it’s unlikely in the near term that it will ever produce enough food,” he said.

Aid withdrawal

For the past decade, international food aid has helped bridge the gap for millions of North Koreans, many of whom starved to death during a famine in the mid-1990s.

The WFP now has 19 food processing plants in the country, helping to feed 6.5 million people.

It is backed up by a team of foreign monitors, who keep track of malnutrition rates.

But all that is about to change. North Korea’s heavily politicised drive for a bigger domestic harvest has been coupled with a new and more controversial move to end international food aid, and restrict the number of foreign aid workers in the country.

Although the details are being negotiated, all the WFP’s food plants are due to close within the next month.

“North Koreans are proud people,” said Mr Ragan. “They don’t want to create a culture of dependency, which makes a lot of sense.

“But there are still real humanitarian needs here, and it remains to be seen now they deal with them.”

Some aid is expected to continue in the form of development assistance next year.

China and South Korea are also likely to help make up any shortfall in food supplies.

But North Korea’s most vulnerable groups are now facing a period of uncertainty.

A key concern is how food will be distributed, and whether the army’s needs will be put ahead of the rest of the population.

High inflation recently prompted the authorities to abandon a market system for grain distribution, in favour of the old state-controlled policy – which the WFP has described as “inoperable”.

Posted in Agriculture, Civil society, Foreign aid statistics, International Aid, Public Distribiution System (PDS), UN World Food Program | Comments Closed

N Korea admits South kidnappings

Tuesday, October 25th, 2005

BBC
10/25/2005

North Korea has admitted it is holding 21 South Koreans either captured during the 1950-53 Korean War or subsequently, the South Korean government has said.
Seoul had pressed the North about 52 POWs and 51 citizens it believes were abducted after the war.

Seoul has been raising the issue for decades, but has recently been wary of campaigning too hard for fear of damaging relations, analysts say.

It is not clear why the normally secretive North Korea has responded.

“North Korea has confirmed there are 11 abductees and 10 prisoners of war alive in the North,” a South Korean Unification Ministry official told Reuters news agency on condition of anonymity.

Of the other South Koreans whom Seoul had inquired about, the North said 10 kidnapped citizens and six POWs were dead, and the rest unaccounted for.

Many people in South Korea believe around 1,000 South Koreans are alive in the North.

These include more than 540 POWs, according to the Red Cross.

Reunions

A number of the kidnapped South Koreans will be able to see their families again during the next round of reunions between relatives who ended up on different sides of the Korean border after the war ended, Yonhap news agency reported. This is scheduled for 5-10 November.

Japan also believes its citizens are being held in the North against their will.

It has been much more vociferous in its inquiries, and in 2002 Pyongyang admitted it had abducted 13 Japanese citizens in the 1970s and 80s, but said eight of them had since died.

The five still alive returned to Japan three years ago, but Tokyo questions whether the others are really dead, and believes there may be yet more held captive in the North.

Posted in Civil society, Political economy, South Korea | Comments Closed

The North Korean ‘Salaryman’

Tuesday, October 11th, 2005

Korea Times
Andrei Lankov
10/11/2005

“How much do they earn there, in the North?” “What are North Korean salaries now?” These questions come naturally, even if people are aware that in a socialist economy the formal size of one’s salary is less significant an indicator of wealth than it is in capitalism.
Under socialism, access to goods is at least as important as the amount of money in somebody’s possession. Since retail prices in the socialist economies tend to be subsidized, this means that many goods are not readily available in shops, but are distributed by the state bureaucracy instead. Thus, people who are deemed more deserving get such goods… goods that are not available to the “less valuable” people.

A party bureaucrat and a skilled worker often might have roughly similar salaries in a socialist economy, but their actual consumption levels may be vastly different. Apart from bureaucrats, another group of people who have privileged access to commodities are people employed in the retail system. They always can divert some goods from the public distribution system and use them either for their own consumption, or for barter with those who control other valuable commodities. Thus, the position of a sale clerk is seen as very prestigious occupation in the North.

The 2002 reforms (never called “reforms” in the North Korean press) dramatically changed the structure of wages and prices in the country. For a while it was not clear what the current price and wages levels were, but recent research by the World Food Program seems to answer a few questions. Now we know what was regarded as “normal” wages in 2004.

According to the survey, most types of low-paid workers earn between 1,700 and 2,500 won per month, with an average estimated at 2,100. Low-level professional jobs such as clerks and teachers at nursery and primary schools earn between 1,400 and 2,000 won per month. The average old age pension is just 900 won; women, in particular housewives, sometimes get pensions as low as 300_400 won.

The official exchange rate is 1,700 won per Euro (they to play down the significance of the imperialist dollar, so exchange rates are usually quoted in euros). However, throughout 2004, the actual exchange rate fluctuated between 1,600 and 2,200. This means that the average pension was something like 50 cents a month, with a nursery teacher earning as little as one dollar a month. This is not as bad as it sounds, since prices are also relatively cheap. But this is still pretty bad…

Most of the people who draw salaries live in the cities (some 70% of the North Koreans are inhabitants of urban areas), and rely on the public distribution system for their survival. The system, which almost ceased to function a few years ago, obviously has made a moderate comeback. Since all data in the secretive North is classified, nothing is known for sure, but it seems that in early 2005, the Public Distribution System was “the main source of cereals for the 70 per cent of the population living in urban areas” (such was an estimate by the FAO, a U.N. food agency).

Still, the official rations are hardly generous. According to the WFP, in early 2005 rations were cut to 250 grams per person per day _ 40 per cent of the internationally recommended minimum. People have to purchase food on the markets, and this food is expensive, with rice costing some 500 won a kilo.

According to the FAO report, “the income of cooperative farmers from the annual obligatory crop sales to the Government varies greatly from one farm to another, resulting in monthly incomes per person ranging from 500 won to 4000 won.” But farmers can also substantially increase their income by selling the produce from their kitchen gardens, and by hillside farming which is done on the steep slopes of the mountains. The latter activity has become common in the North over the past decade. It is formally forbidden but done nonetheless, and it seems that a large part of the hillside produce goes outside the public distribution system.

Unemployment is quite high, but it is hidden. Formally, everybody has a job, but a persistent shortage of raw materials, spare parts, machinery, and power supplies means that few factories actually operate at full capacity. In many cases people come to their factories and offices and sit there idly, spending just a couple of hours a day doing some meaningful work. They still have to come, since otherwise they could lose access to food rations, and this would make their situation impossible, probably even threatening their physical survival.

According to interviews with officials, and other information garnered, the WFP estimated that some 30 percent of the North Korean workers are either permanently or temporarily underemployed or unemployed.

As usual, women are more likely to become unemployed. But perhaps they do not mind. Why? Well, is it possible for a family to survive, even on two salaries, if the official income can merely buy eight kilos of rice to augment the distributed 200 grams? Of course, the answer is “no”, and even in the most difficult circumstances people need more than just rice. Hence, the survival strategy of most families depends heavily on the efforts of their women. While formally seen as “unemployed housewives”, women produce most of the income, ensuring the family’s survival. Indeed, the new-born North Korean capitalism has a female face. But that is another story…

Posted in 2002 Economic reforms, Agriculture, Civil society, Labor conditions/wages, Political economy, Public Distribiution System (PDS), UN Food and Agriculture Organization | Comments Closed

IRA ballad hero accused by US of superdollar plot

Monday, October 10th, 2005

London Times
David Sharrock
10/10/2005

Sean Garland, president of the Workers’ Party and alleged leader of the Official IRA, was arrested on Friday evening as he was preparing to deliver the keynote speech at his party’s annual conference in Belfast. The US Government is seeking his extradition, arguing that he and others have “engaged in buying, transporting and either passing as genuine or reselling large quantities of high-quality counterfeit $100 notes”.

It further alleges that Mr Garland “arranged with North Korean agencies for the purchase of quantities of notes and enlisted other people to disseminate” the money in the UK.

The 71-year-old IRA veteran was arrested by Police Service of Northern Ireland officers and appeared in Belfast Magistrate’s Court the next morning.

The so-called “superdollars” have been tracked for decades by FBI officers. Defectors from North Korea involved in their production have revealed that the secretive communist state intended to flood the world with the near-perfect notes in an attempt to destroy the US economy, a project which shared equal importance with the nuclear missiles programme.

Mr Garland, who lives in Navan, Co Meath, in the Irish Republic, was the subject of a briefing to the US’s top intelligence chiefs in the late 1990s, according to a BBC Panorama documentary of last year.

One US investigator conservatively estimates the number of “superdollars in circulation in the US alone at $30 million”.

Mr Garland was released on bail of three sureties of £10,000 each and on condition that he remained at an address in Co Down, Northern Ireland.

A solicitor for Garland told Judge Tom Burgess that his client “strenuously protests his innocence”, but the Crown lawyer argued that if released there was a “substantial risk” that Garland would not come back to face his extradition.

He told the court: “We say in simple terms that the defendant would have a strong incentive to flee back to the Republic of Ireland.”

The warrant for his arrest was issued on May 19, posing questions as to why the US authorities did not simply seek him through the Republic’s courts. It is estimated that around 20 extradition warrants for Irish citizens have been turned down by Irish courts in the past five years.

The US authorities now have more than 60 days in which to seek his extradition.

Mr Garland has previously described the accusations as “gross slanders and lies”, but the allegations first surfaced in a book by Bill Gertz, national security correspondent for the the Washington Times.

In 2002 a former KGB agent and two British criminals were jailed by a Birmingham court for their part in distributing the superdollars. Mr Garland was described in court as “the top jolly” of the Official IRA, the group from which the Provisional IRA split in 1969, and accused of acting as the middleman for the notes.

Mr Garland is a major IRA figure of the past century. He joined the British Army in the 1950s in order to steal weapons and later took part on a botched attack on Brookeborough barracks in Co Fermanagh, in which Sean South and Fergal O’Hanlon were shot dead.

Under fire Mr Garland carried the dying South on his shoulder back across the border, earning a place in a famous Republican ballad commemorating the deed.

Posted in Counterfeiting, Illicit activities, Ireland | Comments Closed

Often-gloomy North Korea shows a sunnier side

Monday, October 10th, 2005

Herald Tribune
Choe Sang-Hun
10/10/2005

Here in the North Korean capital, where ubiquitous slogans posted on deserted boulevards and carved into mammoth towers give the city the look of an off-season theme park dedicated to a bygone ideology, one message is conspicuously absent these days.

There is no mural showing muscular North Korean soldiers stabbing American troops with bayonets, as there once was. No longer is there a billboard depicting a North Korean missile slamming into Capitol Hill in Washington. And there are no shrill slogans exhorting North Koreans to prepare for “a final battle with American imperialist aggressors,” as they did in the past.

“It is true that we have removed anti-American slogans,” said Hong Sung Chul, one of the North Korean officials who recently escorted a group of South Koreans on a tour of the North. “We hope the Americans reciprocate our good will.”

Hong said the removal of anti-American slogans was part of North Korea’s effort to cultivate a favorable atmosphere amid six-party talks aimed at ending North Korea’s nuclear weapons program. A new round of negotiations is scheduled for November.

But it is still a toss-up as to whether the banished imagery was part of an official campaign to recast the most enduring feature of North Korean psyche, the fear and loathing of Americans, or just a publicity effort for visitors.

Either way, the revamping of propaganda in North Korea’s showpiece capital was as much a sign of change here as the busloads of foreign tourists rushing through the once-forbidden city. These modest indicators offer a glimpse into a country that is gradually regaining confidence after years of famine and after tentatively increasing its contacts with the outside world.

Pyongyang is not a mirror of the rest of the country. The government stocks the city with politically reliable citizens and keeps its living standard much higher than elsewhere. But in the sales pitches and bargaining of store clerks and the relaxed manner of Communist minders escorting visitors, eager to polish their government’s image, a new measure of optimism was palpable among the country’s elite.

The government minders, part tour guides and part public relations officers for the regime, talked about the importance of rebuilding the North Korean economy and attracting foreign investment with the same rehearsed spontaneity that North Koreans once recited anti-American diatribes.

As North Korea prepared to celebrate Monday the 60th anniversary of the ruling Workers’ Party, throngs of students and citizens have been mobilized daily to rehearse for a massive outdoor rally. Streets were festooned with red-and-yellow party flags emblazoned with the images of a hammer, sickle and calligrapher’s brush.

For almost two months, the authorities have also brought thousands of people into Pyongyang in North Korea’s version of a pilgrimage to Mecca. Here, the faithful were treated with an “Arirang” extravaganza, the closest thing to an Olympic opening ceremony in North Korea, but one with a decidedly totalitarian flavor.

In an unusual gesture of openness, the North Koreans this year opened the show to outsiders, accepting hundreds of them daily, mostly from South Korea, in a scheme driven not simply by a desire to educate outsiders on North Korean socialism, but also by commercialism.

For these outsiders, the trip was an occasion to witness the country’s cautious and clumsy steps into the outside world even as the North is still burdened with the ideas of an outmoded era. Unwittingly or not, North Korea, by opening itself to well-fed South Koreans wielding digital cameras and bursting with U.S. dollars, was casting itself as one of the world’s weirdest tourist destinations.

In between visits to Communist monuments, tourists were ushered into souvenir shops where smiling beauties sold everything from mushrooms to “adder liquor,” a leaky bottle of fiery alcohol with a dead snake in it. The women extolled the concoction’s purported effectiveness as an aphrodisiac and only accepted euros and U.S. dollars.

The South Korean tourists spent profusely, buying goods whose main attraction was neither quality nor prices, but rather the flimsy packaging and outdated design: perfect I-have-been-there mementos from the world’s last remaining “socialist paradise.”

North Korea demands that all visitors start their trip to Pyongyang by bowing before the 23-meter-tall, or 75-foot-high, brass statue of Kim Il Sung, the first ruler of North Korea.

On a recent trip, however, South Korean tourists stood upright before the statue, some with hands in pockets, some clicking digital cameras, as an official solemnly bid them to bow. If North Korean minders were enraged, they did not show it.

But questioning revealed the minders’ unique take on their country’s problems with the outside world.

“People in South Korea and the rest of the world don’t understand us,” complained Hong. “We know some countries ridicule us for our economic difficulties. We want to rebuild our economy fast. How good will it be if we can use the money spent for our nuclear weapons to buy rice for our people. But we can’t.

“We saw what the Americans did to Iraq,” Hong continued. “What option would a small country like us have but to build nuclear weapons when a big bully is determined to strangle us and gang up on us?”

Park Man Gil, a North Korean official, stressed his country’s desire for greater contact with its neighbor. “We want more economic cooperation with South Korea,” he said.

The North’s desire to make connection to the outside world was confirmed – vigorously, in fact – by a South Korean executive.

“You always hear two voices here. On one hand, they lash out at the United States; on the other hand, they are conciliatory,” said Park Sang Kwon, president of Pyeonghwa Motors of South Korea, which runs an auto-assembly factory in North Korea. “As a person who has dealt with the North Koreans more often than any other from the outside, I can say with certainty that the North Koreans really want to be accepted by, and live with, the Americans.”

Posted in Civil society, Mass games, USA | Comments Closed

Still Waters Run Deep

Tuesday, October 4th, 2005

Korea Times
Andrei Lankov
10/4/2005

During the 50-odd years that followed the armistice of 1953, both Korean states have been locked in an intense rivalry. It was a local cold war, a minor version of the global Cold War, but much more emotional since it was a war between the same people. During some periods, this cold war became very hot. Indeed, those decades were an era of daring raids, complicated intrigue, botched and successful assassinations and, of course, of covert naval warfare.

The major role in this quiet warfare was played by North Korean infiltration craft, used to land agents on the South Korean coast. There are three major types of vessels used by the North Korean navy for this purpose. Throughout the history of quiet naval warfare, two ships of each type were lost due to enemy action.

The most unusual and imaginative contraptions are the semi-submersible boats. These can be described as a poor navy’s submarines. They are small boats, with a displacement of some 5-10 tons and a top surface speed of 40-50 knots. They have ballast tanks, and when these tanks are filled with water, the craft submerges almost completely with only the small conning-tower visible above the water. In this semi-submerged state, the craft is much slower, but it is also almost invisible both to both human eyes and radar. Perhaps it is not as good as a real midget submarine, but it is much cheaper and easier to maintain, and it can carry up to six people.

The first battle with such a craft took place in December 1983, when one was discovered not far away from Pusan, and after a chase was sunk by the South Korean navy.

Another semi-submersible was lost in action in 1998. The South Korean signal intelligence discovered the semi-submersible near Yosu in the early hours of the morning of Dec. 18. The South Korean Navy mobilized a number of planes and ships, which approached the boat, demanding that the crew surrender. But North Korean special forces are famous for their unwillingness to give themselves up alive, so they opened fire using small arms. There was no possible doubt about the outcome: the boat was hit by artillery shells and it sank, to be salvaged the following year.

A semi-submersible infiltration boat cannot operate at a great distance from its base, and in most cases it is carried close to the target destination aboard a specially designed mother ship. Such ships are disguised as fishing boats, but they have powerful engines and a built-in dock for a semi-submersible or a more conventional speedboat. The dock is equipped with outward-opening double doors on the stern, allowing the boat to be safely hidden inside the hull.

There have been two cases in which such a ship has been discovered and sunk by hostile forces. The first incident of this kind happened in August 1983, when a South Korean patrol boat discovered just such a ship operating near Ullung-do Island. The ship was sunk after a short shootout.

Another incident took place in December 2001, and this time, the ship was found by the Japanese navy near the Japanese coast. This was not the first discovery of this kind, but on previous occasions, the North Koreans ships managed to flee using their superior speed. This time, however, the ship could not move fast enough _ perhaps the disintegration of economy has influenced the navy as well. As to be expected, the ship’s crew refused to surrender and opened fire, injuring two Japanese sailors. They returned fire and in less than four minutes the ship sank with its entire crew.

The North Korean Navy also possesses a number of submarines, including the Yugo class vessels. These are specially designed midget submarines whose major task is infiltration. The Yugo boats are small, with a displacement of merely 70 tons when submerged.

Such a submarine was caught in a fishing net near Sokcho on the east coast on June 24, 1998. Its propeller and periscope had been fouled. The vessel was captured by the South Korean navy but sank while being towed. The submarine was soon salvaged but all crew and commandos (nine of them – more than usual for a submarine of this type) were found dead after committing group suicide.

Larger Sango class submarines are also sometimes used for infiltration. It was this submarine that was involved in the most high-profile case of military confrontation between the two Koreas in the 1990s. In mid-September 1996, a North Korean Sango submarine was on a routine infiltration mission: a group of commandos were to conduct surveillance of the military installations on the east coast. However, in the early hours of Sept. 18, the submarine ran ashore and was discovered by a taxi driver. The crew and commandos attempted to breakthrough to the DMZ. A long spy hunt ensued, with heavy losses of life on both sides (among the victims there were farmers whom the commandos killed as dangerous witnesses) as well as with the usual group suicide of the North Korean soldiers.

Indeed, one of the most remarkable features of this quiet war is the unwillingness of the North Korean soldiers to surrender. Few sailors and commandos have ever been taken alive. Does this reflect the exceptional valor of the North Korean warriors? To some extent it may, but also there are other reasons behind such behavior. But that is another story…

Posted in Military, Political economy, Sea shipping, South Korea | Comments Closed

Last orders, please

Monday, October 3rd, 2005

The Guardian
Jonathan Watts
10/3/2005

Of all the bars in all the world, there is probably none as exclusive, surreal or intriguing as the Random Access Club in Pyongyang. There are also few institutions that are quite so necessary to the mental well-being of the customers.

Open for business only on Friday nights, the RAC is a watering hole for North Korea’s tiny expatriate community; the 300 foreign residents allowed to live among the 22 million population of the planet’s most reclusive nation.

At first sight, the club inside the compound of the United Nations World Food Programme could not look more mundane nor the clientele appear less exotic. Apart from the decor – mostly copies of Chinese contemporary artworks – the simple bar, concrete walls and well-worn pool table might as easily belong to a church hall in Croydon as an expat hang-out in Pyongyang. The few dozen customers seem so earnest and engaging that they too could be mistaken for a suburban congregation rather than the disaster and war hardened aid workers and diplomats they really are.

What is bizarre is the context. The RAC is an oasis of modern globalised normality inside a land where time has not only stood still but gone backwards. North Korea exerts more control over its citizens than the Soviet Union in the dark days of Stalinism. It takes the ideology of 1984 to levels that George Orwell could not have dreamed of. It is rusting proof that the engine of industrial development has a reverse gear. And it is a dark and uncomfortable warning of what could happen to the world if we ever run out of oil.
To find a place like the RAC in the midst of this is like seeing a tiny postcard of Brighton beach stuck on Picasso’s Guernica, or having the latest Peter Greenaway film interrupted by a few seconds of Neighbours.

The bar’s short history is the story of the gradual opening of North Korea since the government reluctantly requested outside help to feed a population racked by famine, droughts and floods.

When it started in 1995, the WFP had just two representatives running a small aid project from rooms in the Koryo hotel. By 1997, North Korea had become the biggest humanitarian operation on the planet, with international organisations providing food and medicine to more than a quarter of the population.

In the meantime, the resident aid community – which included other UN agencies and about a dozen NGOs – had swollen to more than a hundred and been moved to the diplomatic district. The RAC emerged in response to the growing need among this group for a communal gathering point and a place to let off steam about the frustrations of working in such a difficult political and humanitarian environment.

Foreigners in Pyongyang arguably face more restrictions than their counterparts in any other country. They cannot make private visits to the homes of North Koreans, they cannot travel outside of Pyongyang without permission and they are not supposed to exchange their dollars and euros for local currency.

The work can be harrowing. Although the worst of the food crisis passed more than five years ago, some areas still suffer from poor nutrition and a lack of basic medicines. In remote outposts, WFP monitors can be extremely isolated. In Hyesan – a four-day drive from Pyongyang – the organisation’s representative lives alone for eight weeks in a basic hotel where the temperature in the lobby can fall as low as minus 17 degrees in the winter. There are no other foreigners, their local guides leave them at the weekends, and they are not allowed to socialise privately with Koreans.

In Pyongyang, the situation is not nearly as bad. Many visitors are surprised at the beauty of this showcase city. Compared to most capitals, it is clean, quiet and safe. There is sufficient food, some fine duck and noodle restaurants and even a little capitalist entertainment in the form of the casino, karaoke bar and golf course at the Yanggakdo hotel.

In addition, years of pure ideology – the utter subjection of the individual to the collective will of the state embodied by the leader Kim Jong-il – have produced some impressive (or scary, depending on your point of view) cultural marvels, such as the circus and the performances by young dancers and musicians at the children’s palace.

Those looking on the positive side of life in North Korea also point out the friendliness, innocence and high levels of education of many of the people they meet, as well as the cleanliness of the air in a country starved of energy and short on traffic. Because of this, and the frequent blackouts, Pyongyang is probably the best capital in the world for stargazing.

But the political problems undermine most of these benefits. Most foreigners accept their phones are bugged. Some suspect that much of what they see during inspections is staged. Even among the old-hands who have been in the country for years, many say they have never made a Korean friend.

This is largely because North Korea is gripped by a siege mentality – and not without justification. The country has been in a state of hot and cold war with the US since 1950. Outsiders are seen as potential spies or sources of ideological impurity.

There is good reason for the government to fear charity. Every smile or hand-out from a foreign aid worker undermines the state’s xenophobic propaganda and philosophy of “juche” self-sufficiency.

The WFP’s mission in North Korea is the only one where aid monitors do not have unrestricted access to the entire country. But the UN organisation has gradually widened its focus, pushing back the boundaries where it operates, expanding its presence to 42 foreign and 70 domestic staff, and meeting regularly with thousands of local officials who might otherwise never come into contact with a foreigner. Its monitoring ambitions remain the same as when the RAC was named: random access to all parts of the country.

This is the aspect of aid work that North Korea fears the most. Although the food and drugs are humanitarian, their side-effect is political. As most of the customers in the RAC will testify, one of the biggest changes since the aid operation began is in attitudes. Ten years ago, most North Koreans would turn their backs on a foreigner. Now they are almost as likely to smile.

That, more than anything, may be why the RAC could soon be losing most of its customers. The government has ordered all humanitarian work to end by the end of the year. Negotiations are still under way regarding what that will mean, but one resident’s estimate is that as many as 80 of the 120 aid officials in Pyongyang will have to pack their bags and leave by December 31.

The mood in the RAC has never been more gloomy. Out will go most of the young blood. Those who remain are likely to be diplomats, a sharply reduced corps of aid workers, five English teachers and a handful of businessmen.

“It’ll be like going back to 1994,” commented one regular at the bar.

“The jokes these days are black ones about all the second-hand fridges and cars that will flood into Pyongyang’s markets at the end of the year,” said another.

It is still possible that as one door closes others will open. North Korea welcomes economic development in the form of investors and technical support for infrastructure projects. The government wants to boost the tourist industry. A new railway is about to open across the demilitarized zone that will increase the flow of visitors from South Korea. The growing influence of Beijing is bringing in more people and goods from China. Progress in six-nation nuclear talks could also mean more atomic energy agency inspectors and diplomats from Japan and the US.

But ready or not, North Korea wants its independence back. It wants its future foreign guests to be visiting town on short-term visas, not moving in for years on end and setting up their own social club. For North Koreans and expats, there will be plenty of other bars, but at the RAC, it is time to drink up. The government may soon be calling last orders.

Posted in Agriculture, Civil society, International Aid, Restaurants, UNDP | Comments Closed

North Korea Reinstates Controls on Grain Sales

Monday, October 3rd, 2005

Los Angeles Times
Barbara Demick
10/3/2005

North Korea Reinstates Controls on Grain Sales Rice and other foods will be distributed by the government and banned at markets.

Rolling back some of its economic reforms, North Korea is banning the sale of rice and other grains at private markets and strengthening its old communist-style public distribution system under which all citizens are supposed to get rations, aid groups and North Korea experts say.

The changes were supposed to be implemented Oct. 10, a holiday in North Korea marking the 60th anniversary of the ruling Workers’ Party. But reports from the World Food Program office in Pyongyang, the capital, indicate that merchants have been told already that they can no longer sell grain.

The United Nations agency said in a statement on its website that “as of Oct. 1, reports are that cereal sales in the markets will cease and public distribution centers will take over countrywide distribution.”

North Korea experts say the moves do not necessarily indicate an abrupt U-turn in the impoverished country’s economic policies, so much as concern that change was taking place too quickly.

“I think it is a transitional necessity. You can’t move too fast into free—market economics without softening the blow for people who have grown up in a planned economy,” Richard Ragan, who heads the World Food Program office in Pyongyang, said in a recent telephone interview. “This is not that different from what you saw happening in China in the 1990s.”

Lee Young Hwa, a Japan—based human rights worker who has close contacts with traders at the Chinese—North Korean border, believes the new restrictions on markets are designed to boost the power of the Workers’ Party and curb the role of the military in the economy.

“The military people control the food sold at the market. Nobody else has the trucks or the access to gasoline to move food around the country. The leadership fears that their economic reforms aren’t working because everything is controlled by the military, and they want to take back control,” Lee said.

For years, there have been accusations that the military was pilfering humanitarian shipments of rice and other aid, keeping the best for its own and selling the rest at markets. Secretly taped video footage obtained last year by human rights workers shows apparently unopened sacks of rice given by the U.S. and other donors being sold illegally at a market in the northern city of Chongjin.

On the open market, a pound of rice costs 15 to 25 cents — an impossible sum for many North Koreans, whose average salary of $1 per month keeps them on the verge of starvation.

Under the new rules, rice, as well as other staples such as corn, is to be sold at public distribution centers at subsidized prices and in rationed quantities. Markets, which have been gradually legalized since 2002, will still be permitted to sell vegetables, produce, clothing and other goods.

Cho Myong Chol, a former North Korean economist who lives in Seoul, said he believed North Korea would continue with market reforms but at a slower pace. “Since the economic reforms in 2002, the gap between the haves and the have—nots has become so extreme that there is an imbalance that is causing social unrest and dissatisfaction. I think they needed to do something about food to keep control.”

It remains to be seen whether the changes will help ordinary North Koreans. The government recently informed U.N. aid officials that it was cutting back their operations and no longer needed large donations of rice and other foodstuffs. Experts believe North Korea is concerned about the U.N. ‘s monitoring requirements and prefers direct aid from countries such as South Korea and China, which place fewer restrictions on donations.

Until the 1990s, the public distribution system introduced by North Korean founder Kim Ii Sung was the hallmark of a nation that claimed to provide its people with everything from rice to shoes. But the system collapsed in the early l990s, exacerbating a famine that killed an estimated 2 million people — about 10% of the population. The public distribution system still operates, but at reduced capacity.

Although North Koreans today buy much of what they need at markets, the government doesn’t like to admit it and insists that the cradle—to—grave system of social welfare remains.

“We are still a communist country. Nothing has changed. I get everything I need through the public distribution system,” said Yoon So Jung, 25, a guide interviewed last week at Mt. Kumgang, one of the few areas of the country open for tourism.

But pressed about her pink windbreaker, Yoon admitted hesitantly, “Well that, I bought at the market.”

Posted in Black markets, Economic reform, General markets (FMR: Farmers Market), Military, Political economy, Price liberalization, Public Distribiution System (PDS), UN World Food Program, Worker's Party | Comments Closed

North Korea rejects UN food aid

Friday, September 23rd, 2005

BBC
9/23/2005

North Korea has formally told the UN it no longer needs food aid, despite reports of malnutrition in the country.

Deputy Foreign Minister Choe Su-hon said the country now had enough food, due to a good harvest, and accused the US of using aid as a political weapon.

Top UN relief co-ordinator Jan Egeland said an “abrupt” end to food aid would harm North Korea’s most vulnerable.

Pyongyang’s move comes as the world community continues to urge it to give up its nuclear ambitions.

Analysts say North Korea might be worried that accepting more food aid now could be perceived as a sign of weakness.

The North may also have lost patience with efforts by foreign agencies to monitor deliveries of food, according to the BBC’s Seoul correspondent, Charles Scanlon.

In recent years, the UN and other international agencies have been feeding up to six million of the poorest and most vulnerable North Koreans.

But these organisations have long struggled for access to one of the world’s most closed societies.

Even at the height of a famine in the mid-1990s, which may have killed two million people, they were tightly restricted and refused entry to large parts of the country.

Now the authorities are cracking down altogether, our correspondent says.

After meeting UN Secretary General Kofi Annan in New York on Thursday, Choe Su-hon told reporters: “We requested him to end humanitarian assistance by the end of this year.”

He said that the North wanted all foreign NGOs out by the end of the year, and added that the UN was to stop delivering food aid and to focus on long-term development instead.

Mr Egeland urged North Korea to reverse its decision, saying he was especially worried about the country’s children.

“Our concern is they (North Koreans) will not be able to have enough food. We are very concerned because we think this is too soon and too abrupt,” he said.

Gerald Bourke, a spokesman for the WFP, said that UN staff were currently discussing with the North Korean government what this meant in practice – adding that he was hopeful that current food-for-work and other community-based projects would class as longer-term development.

“We’re also talking to donors to see how much they still want to help us in this way,” he added.

Mr Bourke said that despite Mr Choe’s assertion of a better harvest in North Korea this year – and his pledge that the government was “prepared to provide the food to all our people” – there was still a considerable need for food aid.

“North Korea has a substantial and chronic food deficit,” Mr Bourke said, adding that malnutrition rates, especially for mothers and young children, were still very high.

Political issue?

Mr Choe also accused other countries, especially the US, of attempting to “politicize humanitarian assistance, linking it to the human rights issue”.

He said this constituted interference in the internal affairs of the country.

Washington rejected the suggestion it was mixing politics with relief work.

“All US decisions are based on… the need of the country involved, competing needs elsewhere and our ability to ensure that the aid gets to people who need it most,” a State Department statement said.

Another problem which analysts believe may have led to the North’s decision to ask foreign organisations to leave is the extensive surveying these groups are required to do, to ensure their money is being well-spent.

“Part of the problem is with our monitoring people moving around the country,” Mr Bourke conceded. “This is and has been a concern for them.”

In contrast, China and South Korea provide huge food shipments to North Korea without overseeing where it ends up.

The South says it gives such aid as part of a strategy to promote political reconciliation.

But diplomats and aid workers say these generous shipments have undermined the multilateral effect.

According to our correspondent, there is concern that if monitoring stops, so too will surveys to check the food gets to those most in need.

Posted in Agriculture, International Aid, UN, UN World Food Program | Comments Closed

North Korean Economy Watch