Archive for the ‘International Governments’ Category

« Older Entries
Newer Entries »

China offers large-scale food aid to North Korea from February

Friday, June 22nd, 2012

Institute for Far Eastern Studies (IFES)
2012-6-22

China began to provide large-scale food assistance to North Korea from late February, reported KOTRA (Korea Trade-Investment Promotion Agency) in its recent report.

The Korea Business Center (KBC) in Canton, KOTRA’s overseas branch, released a report about the details of China’s food assistance to North Korea. “China is the largest supplier of material goods to North Korea but even the major North Korean experts in China do not have the exact figures of aid provided to North Korea.” Based on the information gained from local media and interviews with experts, “North Korea requested food assistance of at least 200,000 tons, as well as assistance in construction materials. The amount is estimated at more than 600 million yuan RMB.”

According to Chian Grain Reserves Corporation and Dalian Commodity Exchange, 6,600 million yuan RMB is equivalent to 150,000 tons of rice or 26.5 million tons of corn, calculated with the wholesale price in the Northeast China region. 600 million yuan RMB of rice exported to Shinuiju from Dandong can purchase about 17.1 million tons of rice.

Old rice and flour is being gathered in Dandong from all over China, and is being sold to North Korea at a very low cost without ever entering the Chinese domestic market. The KBC report evaluates that this is a welcomed change because North Koreans are not selective about their food, since they do not have enough money to buy food. It reports, “Cheap food is considered the best food,” and “North Korean customs automatically allows the food to enter the country and small amounts of a few tons of food is not even tariffed,” said an unnamed North Korean trader.

China’s recent food aid to North Korea was conducted largely in two ways: First, it was provided quietly without the public being notified; second, it went via the World Food Programme (WFP) and other international organizations. According to the WFP China Office, the recent 600 million yuan food aid to North Korea was not related to WFP aid to North Korea.

China is careful about releasing information related to its food aid to North Korea. However, what is known is that the aid consists of selling food at a low-cost and through nongovernmental exchanges. There are several trading companies in Dandong that ships food and other materials to North Korea when charitable organizations in Beijing make the request for shipment.

On the other hand, the May 24 (2010) Measures (of South Korea) has suspended all trade between North and South Korea. This has propelled North Korea-China trade to expand and the trade volume between the two nations increased 32 percent or 1.9 billion USD from January to April, compared to the same period of the previous year, according to the Korea International Trade Association.

During this period, North Korea’s export to China recorded 793 million USD, which also jumped 33 percent against last year and the revenues from import also increased 32.8 percent equalling 1.16 billion USD.

Share

Posted in 2012 food shortage, China, Food, Foreign aid statistics, International Aid, International trade, Korea Trade-Investment Promotion Agency (KOTRA), Statistics, Trade Statistics, UN, UN World Food Program | Comments Closed

White House issues statement on DPRK

Tuesday, June 19th, 2012

Here is the statement as posted on the White House web page (2012-6-18):

Notice — Continuation of the National Emergency with Respect to North Korea

NOTICE
– – – – – – –
CONTINUATION OF THE NATIONAL EMERGENCY WITH
RESPECT TO NORTH KOREA

On June 26, 2008, by Executive Order 13466, the President declared a national emergency pursuant to the International Emergency Economic Powers Act (50 U.S.C. 1701-1706) to deal with the unusual and extraordinary threat to the national security and foreign policy of the United States constituted by the existence and risk of proliferation of weapons-usable fissile material on the Korean Peninsula. The President also found that it was necessary to maintain certain restrictions with respect to North Korea that would otherwise have been lifted pursuant to Proclamation 8271 of June 26, 2008, which terminated the exercise of authorities under the Trading with the Enemy Act (50 U.S.C. App. 1-44) with respect to North Korea.

On August 30, 2010, I signed Executive Order 13551, which expanded the scope of the national emergency declared in Executive Order 13466 to deal with the unusual and extraordinary threat to the national security, foreign policy, and economy of the United States posed by the continued actions and policies of the Government of North Korea, manifested by its unprovoked attack that resulted in the sinking of the Republic of Korea Navy ship Cheonan and the deaths of 46 sailors in March 2010; its announced test of a nuclear device and its missile launches in 2009; its actions in violation of United Nations Security Council Resolutions (UNSCRs) 1718 and 1874, including the procurement of luxury goods; and its illicit and deceptive activities in international markets through which it obtains financial and other support, including money laundering, the counterfeiting of goods and currency, bulk cash smuggling, and narcotics trafficking, which destabilize the Korean Peninsula and imperil U.S. Armed Forces, allies, and trading partners in the region.

On April 18, 2011, I signed Executive Order 13570 to take additional steps to address the national emergency declared in Executive Order 13466 and expanded in Executive Order 13551 that will ensure the implementation of the import restrictions contained in UNSCRs 1718 and 1874 and complement the import restrictions provided for in the Arms Export Control Act (22 U.S.C. 2751 et seq.).

Because the existence and risk of proliferation of weapons-usable fissile material on the Korean Peninsula and the actions and policies of the Government of North Korea continue to pose an unusual and extraordinary threat to the national security, foreign policy, and economy of the United States, the national emergency declared in Executive Order 13466, expanded in scope in Executive Order 13551, and addressed further in

Executive Order 13570, and the measures taken to deal with that national emergency, must continue in effect beyond June 26, 2012. Therefore, in accordance with section 202(d) of the National Emergencies Act (50 U.S.C. 1622(d)), I am continuing for 1 year the national emergency declared in Executive Order 13466.

This notice shall be published in the Federal Register and transmitted to the Congress.

BARACK OBAMA

Share

Posted in Statistics, Trade Statistics, USA | Comments Closed

PRC approves international cooperative demonstration zone in Jilin

Monday, June 18th, 2012

UPDATE 1 (2012-6-18): According to Yonhap:

South Korean firms and China’s Jilin Province agreed to engage in joint venture projects worth 3.9 trillion won (US$3.4 billion), a local business organization said Monday.

Under the memorandum of understanding reached in Seoul, 48 South Korean companies and 48 Chinese regional government agencies and businesses will form partnerships to move forward on various business projects, the Korea Chamber of Commerce and Industry (KCCI) said.

The two sides will engage in such areas as agriculture, construction, energy, distribution and tourism, South Korea’s largest private economic organization said.

Lotte Group, the Korea Software Enterprise Association and HS Machinery Co. have expressed interest in business tie-ups with Jilin, which is located in northwestern China and includes Yanbian Korean Autonomous Prefecture. The province also borders North Korea to the south.

The KCCI said Jilin is one of China’ main heavy industrial hubs with average annual growth in the past three years reaching 13 percent. Such growth promises considerable business opportunities for South Korean companies wanting to diversify into emerging markets.

ORIGINAL POST (2012-5-3): According to China Daily:

The Chinese government announced Wednesday that it has approved the establishment of an international cooperative demonstration zone in Northeast China’s Jilin province to boost cross-border cooperation in the region.

In a document posted on the central government’s official website, the State Council said the zone is expected to expand investment cooperation in northeast Asian regions.

Located in the port city of Hunchun, the demonstration zone will cover 90 square km and include an international industrial cooperation zone, a border trade cooperation zone and economic cooperation zones — one between China and the Democratic People’s Republic of Korea (DPRK) and another between China and Russia, it said.

The demonstration zone will focus on the development of local manufacturing and processing industries, including those for auto parts, agricultural and animal products, seafood, new materials, medicines, textiles and garments, the document said.

The Tumen River in Hunchun straddles the borders of China, Russia and the DPRK. In 1992, China, Russia, the DPRK, the Republic of Korea (ROK) and Mongolia launched a joint development project in the Tumen River area, a move made to strengthen regional cooperation in the area.

The State Council has called for more efforts to boost the construction of Sino-DPRK and Sino-Russia international transit corridors and promote cross-border economic cooperation between China and the two countries.

More supporting policies, including fiscal and taxation support, will be implemented to encourage the development of new energy, new material equipment manufacturing and other projects in the demonstration zone, according to the State Council.

The construction of the demonstration zone will also make border regions more open to the outside and strengthen the social and economic development of local areas, the document said.

And according to the Daily NK:

The authorities in China’s Jilin Province are investing billions of Yuan in multiple projects along the Sino-North Korean border. The construction is concentrated in areas adjacent to major North Korean border towns in the mountainous region, giving it the hypothetical potential to provide massive opportunities for future Sino-North Korean economic growth.

According to Jilin Shinmun and other local media outlets, the high-speed train, which will allow travel from Hunchun to Changchun in two hours at speeds of up to 250kph, is under construction at a predicted cost of 37.7 billion Yuan.

Jilin Province is also planning a “five border region highway” in its 12th Five-Year Plan from 2011 to 2015. The Changchun to Hunchun leg is already open, while legs from Changchun to Huyinan, Songjangheo to Changbai, Changchun to Mt. Baekdu to Yanji, Changchun to Linjiang and Changchun to Jibian are under construction with the typical degree of Chinese speed. Among these locations, Changbai, Linjiang and Jibian all face major North Korean towns (Hyesan (Yangkang Province), Chungkang (Jagang Province) and Manpo (Jagang Province).

The province is also putting weight behind railway construction travelling towards North Korea; from Nanpin to nearby Musan (in North Hamkyung Province), Kayisan to Sambong (in North Hamkyung Province) and Changbai to Hyesan.

When all the construction is complete, there will be a bridgehead connecting the Tumen to the Yalu and linking all North Korea’s major cities with the Chinese economic miracle. If trade and cooperation between the two countries grows more active than it is now, the newly built highways and railways will form the core pathway for commercial distribution.

However, there are also major concerns with the plan. First and foremost, defection will become more difficult when the new developments are complete. The regions where highways and railways are now appearing have long been major defection routes or hiding places for new defectors.

In particular, a warning device installed by Jilin police in border villages, while an improvement in terms of public security, can also be used to report North Korean defectors to the authorities. The device, known as the ‘BF-01’, has been installed in 6,000 homes along the border at a cost of 5 million Yuan, connecting them with public security offices in an emergency. When pressed, names, addresses and the sound from the scene is transmitted to the local police station, border guards and neighbors.

“Regardless of whether North Korea conducts a nuclear test, it seems that North Korea and China are developing the northeastern region,” Shin Jong Ho, a research fellow with the Center for Northeastern Asian & Inter-Korean Affairs, part of the Gyeonggi Research Institute, commented. “In the future, if cooperation between North Korea and China gets better then these transportation routes will be very useful.”

Read the full stories here:
China approves int’l border cooperation zone
China Daily (Xinhua)
2012-4-25

Border Region Getting Huge Boost
Daily NK
Park Seong Guk
2012-5-3

Share

Posted in China, Economic reform, Foreign direct investment, Tonghua-Dandong Economic Zone, Tumen River Area Development Programme (TRADP) | Comments Closed

Statistics Without Borders in the DPRK

Wednesday, June 13th, 2012

UPDATE 1 (2013-1-18): The Wall Street Journal has published a couple of pieces on statistics education in the DPRK. The first piece is here.  The second piece is here.

Here is a blurb from the first piece:

The Pyongyang Summer Institute in Survey Science and Quantitative Methodology last year began teaching students at North Korea’s first private university about such topics as probability, correlation and survey methodology. More than 250 students, mostly in their 20s, learned from 13 instructors from the U.S. and Europe. This summer, the institute hopes to have 30 teachers instructing 250 students and 100 government workers.

…

Funded in part by the International Strategy and Reconciliation Foundation, a small Washington, D.C., nonprofit that focuses on North Korea, the institute has an annual budget of about half a million dollars, Dr. Chun said. The group sent an email this week to members of statistical organizations—including the American Statistical Association, which helps run the institute through its international outreach arm—soliciting instructors for the summer. The institute made clear it wouldn’t be able to fund most travel costs. Dr. Chun expects 60 to 70 applications for 30 spots.

Here is a blurb from the second piece:

The institute’s organizers steer well clear of politics. “PSI stays away from controversial courses,” said Yena Lee, co-founder of PSI. She added, “Through dialogue over these nonpolitical issues, we hope to pave the way to greater scholarly and professional engagement with DPRK and to long-term sustainable science diplomacy.”

“I had to change some of my ‘go-to’ examples about political polling, but discussion of politics and religion were off limits,” said Fisher, who in addition to — and unconnected to — his work in North Korea is a statistician at the U.S. Government Accountability Office. “Our purpose was one of science diplomacy and we all viewed it as an educational humanitarian mission.”

Governmental constraints extend to instructors while they’re in the program — for instance, barring them from leaving campus unaccompanied. Rules also kept students from PSI and PUST from being interviewed about the program. “That would not be allowed” by the North Korean government, said Norma H. Nichols, director of the International Academic Affairs Office at the institute’s host university, PUST. “If I were in Pyongyang and had the students nearby, it would still be a near impossibility to get permission even for one of them to participate with me in a Skype call.”

Instructors spoke positively about their students in the stats classes. The institute’s director, Asaph Young Chun, described how in one of his two classes last summer, students had to share textbooks because there weren’t enough to go around. “Most of the students now know by heart what survey is about, why pretest is essential and how data analysis should be planned in advance,” Chun said. And most, Chun said, “were so engaged, responsive, and interactive, I observed. They did not hesitate asking questions when in doubt or when I gave them opportunities to ask questions.”

ORIGINAL POST (2012-6-13): According to the group’s press release:

Statistics Without Borders Participates in Unprecedented Science Diplomacy Program between North Korea and the US/International Community
Alexandria, VA (PRWEB) June 13, 2012

Statistics Without Borders (SWB), an outreach group of the American Statistical Association (ASA), this summer will provide pro-bono instructors for the Pyongyang Summer Institute (PSI) in Survey Science and Quantitative Methodology in North Korea. The PSI is an intensive, international teaching program at the Pyongyang University of Science and Technology (PUST), the first and only private and international university, which was launched in North Korea in the fall of 2010.

PSI is the first program of its kind in North Korea, which has now approved visas for 15 visiting faculty. PSI students are expected to be upper level undergraduates and graduate students whose academic credentials are comparable to those students in Ivy plus schools.

The Summer Institute is jointly administered by the International Strategy and Reconciliation Foundation (ISRF), PUST and SWB. The ISRF is a 501(c)(3) organization recognized by the U.S. Departments of Treasury and Commerce for its humanitarian and educational programs in the Democratic People’s Republic of Korea (DPRK). The PSI will begin as a three-year pilot program that will take place from July 2012—July 2014.

SWB members make up the majority of the 15 instructors who will provide pro-bono instruction during July for seven four-week courses that will provide training in areas including sampling, statistics, survey methods, census methods, questionnaire design, computer-assisted data collection and analysis, both fundamental and advanced courses. The courses are modeled after those of the 65-year-old Michigan Summer Institute, a renowned international survey training program.

PSI instructors with expertise in survey research methods are: Sunny Bak, statistical consultant; Dr. Annelies Blom, Germany; Dr. Woody Carter, University of Chicago; Dr. Young Chun, an alumnus of Michigan Summer Institute and PSI Director; Bob Colosi, an alumnus of the Joint Program in Survey Methodoloy of the University of Maryland; Michael Costello, RTI International; Justin Fisher, George Washington University; Dr. Mark Griffin, Australian Development Agency for Statistics and Information Systems; Professor Patricia Gwartney, University of Oregon; Professor Ryung Kim, Einstein College of Medicine; Adam Molnar, University of Georgia; Dr. Rene Paulson and Dr. Jacquelyn Pennings, Elite Research in Texas; Pinar Ucar, Qatar Statistics Authority; and Elena Zafarana, Swiss Federal Office of Communications.

The DPRK Working Group of SWB, all ASA members, was formed for planning and implementing the PSI. Co-chairs of the working group are Dr. Gary Shapiro, chair of Statistics without Borders and former mathematical statistician, U.S. Census Bureau; Justin Fisher; and Dr. Young Chun. Other members of the group are: Professor Duncan Thomas, Director of the Biostatistics Division, and Verna R. Richter Chair in Cancer Research, University of Southern California; Dr. Griffin; Dr. James Cochran, professor, Louisiana Tech University; Michael Costello; Professor Sunghee Lee, University of Michigan Joint Program in Survey Methodology; Professor Dominique Haughton, Bentley University; and Professor Mary Gray, American University, Washington, D.C.

About Statistics Without Borders
Statistics without Borders is an apolitical group that was formed in late 2008 to provide pro-bono statistical support to organizations involved in not-for-profit international efforts, mostly involving survey planning and/or analysis of survey data. The goal of the group is to achieve better statistical practice, including statistical analysis and design of experiments and surveys. SWB has more than 500 members from some 30 countries.

About the American Statistical Association
Headquartered in Alexandria, Virginia, the American Statistical Association is the world’s largest community of statisticians and the second oldest continuously operating professional society in the United States. For more than 170 years, the ASA has supported excellence in the development, application, and dissemination of statistical science through meetings, publications, membership services, education, accreditation, and advocacy. Its members serve in industry, government, and academia in more than 90 countries, advancing research and promoting sound statistical practice to inform public policy and improve human welfare. For additional information about the American Statistical Association, please visit the ASA web site at http://www.amstat.org or call 703.684.1221.

For more information:
Rosanne Desmone
703.302.1861 (direct)
703.946.3820 (mobile)
Rosanne (at) amstat (dot) org

Share

Posted in 2012 DPRK engagement, Education, USA | Comments Closed

Ari Sports Factory

Monday, June 11th, 2012

The Hankyoreh has published an interesting about a inter-Korean economic project in Dandong, China.

According to the article:

Taking its name from the traditional song “Arirang,” Ari Sports was established in Nov. 2011 with a 500 million won investment from the city of Incheon and 23 workers from North Korea. It is managed not by a North or South Korean organization, but by China’s Yunnan Xiguang Trade.

…

The football sneaker and sports clothing production plant was originally planned for Pyongyang’s Sadong District. Efforts began in 2008, and the building was nearly complete when the May 24 measures were passed in 2010 and it had to be abandoned. The factory in Dandong is a temporary structure erected in its stead.

Inter-Korean Athletic Exchange Association standing committee chair Kim Gyeong-seong said, “It’s frustrating not to be able to use the good land and facilities we had in Pyongyang.”

“I hope we are soon able to produce and sell soccer shoes and clothes in Pyongyang,” Kim added.

Song said, “Things are difficult right now between North and South Korea, but if we all work together we can overcome it.”

He added that the company was a “small but meaningful project taking place at a time when economic cooperation has been shut off.”

The company has received orders for three thousand pairs of soccer shoes as of May. It currently plans to produce and sell two to three thousand pairs a month. To achieve this, it is organizing a football contest for working people nationwide at the first Incheon Peace Cup event to commemorate the June 15 Summit on June 16 and 17.

I have never heard of this project and I have been unable locate any other articles on the factory. Despite its relative obscurity, however, the North Korean workers know how to deal with the foreign press (they stay on message):

On June 9, the company was visited by around fifty participants in the Incheon-Dandong-Hankyoreh West Sea Cooperation Forum, including Incheon Mayor Song Young-gil and Hankyoreh Foundation for Reunification and Culture chairperson and former Unification Minister Im Dong-won. Located in a farming village on the outskirts of Dandong in China’s Liaoning Province, Ari Sports has 1,600 square meters of floor space on a plot of land also measuring 1,600 square meters.

North Korean workers expressed their frustration with the inability of economic cooperation projects to move forward due to the state of inter-Korean relations. Workers Kwon Ok-kyong, Kim Kum-ju, and Kim Myong-hwa said they wished production and sales could proceed smoothly.

When asked about working at the company, Cho Sang-yon said, “Well, it’s not as good as working in my home country.”

Pak Hyok-nam said, “I’d like to see bigger economic cooperation projects between North and South.”

I have been unable to learn anything else at all about this project.  If you are able to find company logos, web page, photos, or even factory locations on Google Earth, please let me know.

Read the full story here:
Factory in China continues producing soccer shoes in spite of frosty relations
Hankyoreh
Kim Kyu-won
2012-6-11

Share

Posted in Economic reform, Football (soccer), Foreign direct investment, Light Industry, Manufacturing, South Korea, Sports | Comments Closed

ROK investigates firms doing business with DPRK

Thursday, June 7th, 2012

According to the Hankyoreh:

Prosecutors carried out a large-scale investigation of companies involved in inter-Korean trade over the past year. They were seeking evidence of violations of the Inter-Korean Exchange and Cooperation Act (IKEC Act) in their remittances to North Korea. Around 200 such companies were found to have been fined.

The fined companies argue that their penalties are attributable to differing interpretations and application of the law by the Lee Myung-bak administration. The same actions were not deemed problematic under the administrations of Kim Dae-jung and Roh Moo-hyun (1998-2008). Those governments took a softer line on North Korea; things changed significantly when the conservative Lee Myung-bak government took office in 2008.

The Inter-Korean Economic Cooperation Promotion Committee, under chairman Jeong Yang-geun, estimated that as many as 200 companies involved in inter-Korean trade had been fined as of late May. A biggest change was the Lee government’s May 24 measures, put in place after the March 2010 sinking of the Cheonan warship. The measures suspended almost all transactions with North Korea.

Companies that were already on the brink of bankruptcy were stuck with fines ranging from one million to eight million won. Companies with high transaction volumes were fined the legal limit of 10 million won (about US$8500).

They were accused of violating Article 13, Item 1 of the Exchange and Cooperation Act, citing Article 4 of a Jan. 2008 Unification Ministry notice stating that anyone sending a third-party remittance to North Korea through a Chinese bank account must receive separate permission from the Unification Minister.

The president of Company “H,” identified by the initial “K,” has been called and visited several times since late last year by police public security officers and detectives from in and around Seoul and elsewhere investigating items brought in from North Korea. In April, he was summoned to a police station in South Gyeongsang province.

K had been involved in transactions since before the Kim and Roh administrations. He said there were no problems because the items in question were subject to blanket approval by the Unification Minister and had already passed through normal procedures.

The president of Company T, identified as Lim, was investigated on the same charge between January and April of this year. He confessed being cowed by the demand to travel from Seoul to a police station in Incheon and report to the security division there. He said he wasted time and suffered hardship submitting three rounds of documentation at the police’s request. Five companies had already been investigated by that same police station, Lim said.

“The police asked for an authoritative interpretation, and the officials at the Unification Ministry couldn’t make a proper judgment about whether there had been a violation. It was as though they had no idea such a rule existed,” he added.

The president of Company C, who goes by the initial “G,” paid a visit to Korea Exchange Bank in late 2007 to send a remittance to pay for sand, and was told that a third-party remittance was not possible. G went to the Bank of Korea. There, he was told they wouldn’t be able to do a remittance either. So he put one of the employees there in touch with the Unification Ministry. After that, he was able to notify the Bank of Korea and send remittances within their limit without a problem.

Some time around March of 2011, police launched an investigation and began calling him in. He asked them just what kind of permission he was supposed to receive. There was no information in the Jan. 2008 ministry notice about the procedure or documents for remittances. He also asked what kind of law for exchange and cooperation the IKEC Act was. G was fined according to another law after lawfully sending the remittance according to the Foreign Exchange Transactions Act.

Experts and attorneys countered that the transactions in question were already approved according to Article 13, Item 4 of the IKEC Act, which empowers the Unification Minister to issue blanket approvals to “items involved in transactions with North Korea, forms of transactions, and methods of payment.” And since North Korea does not have an international financial system, nearly all the companies’ remittances took the form of third-party transactions through Chinese banks.

Experts and attorneys said the fines could only be interpreted as prosecutors taking issue with the very notion of money being sent to North Korea. The businesspeople in question had also agreed with the ministry to follow a normal procedure of reporting third-party remittances to the Bank of Korea in accordance with the Foreign Exchange Transactions Act, they said.

An attorney for Corporation “T” said, “Not only is there ample room for debate about judicial authorities punishing activities deemed lawful by Article 13, Item 4 of the IKEC Act on the basis of the Unification Minister’s notice, but it also shows a disregard for what the ministry has recognized over the past years.”

Indeed, a trade company sent a question to the ministry asking whether any of the 500 firms it knew to be involved in inter-Korean economic cooperation had requested approval from the minister for third-party remittances to North Korea. None, the ministry replied.

The ministry was also found not to have taken any follow-up measures on documentation or procedures in its presiding offices after specifying in its notice that the minister’s approval was required for third-party remittances.

University of North Korean Studies professor Yang Mu-jin, a onetime secretary to the Unification Minister, said, “After the May 24 measures, now they’re killing these businessmen twice.”

But a senior ministry official said there was no problem with application of the law in the prosecutors’ investigation, although it was done without prior discussion with the ministry.

Another senior official said the notice was issued “in the interest of ensuring transparency in remittances to North Korea.”

Those on the receiving end of the fines said the measures were tantamount to using the Exchange and Cooperation Act to kill off the companies involved in exchange and cooperation.

“They’re about to keel over anyway because of the state inter-Korean relations are in,” one said. “What good is the law once all the companies are gone?”

Unification Ministry figures show a steady increase in the amount of North Korean items brought in through inter-Korean trade (including consignment processing), rising from US$258 million win 2004 to a peak of US$645 million in 2007. The level stayed above US$600 million as recently as 2008, the first year of the Lee administration.

But as relations with North Korean headed downhill, the numbers plummeted below US$500 million starting in 2009, finally bottoming out at US$4 million in 2011 after relations were severed with the May 24 measures.

Read the full story here:
When it comes to trading with North Korea, it’s no longer business as usual
HK
Kang Tae-ho
2012-6-7

Share

Posted in Banking, Finance, International trade, South Korea | Comments Closed

Smoking in the DPRK

Tuesday, June 5th, 2012

According to the Daily NK:

May 31st was also the 26th ‘World No Tobacco day.” According to Rodong Shinmun, North Korea also observed ‘No Tobacco Day’ at an event held at Pyongyang People’s Palace of Culture. It was attended by WHO officials, government agency and affiliated union representatives and ordinary workers.

However, North Korea’s smoking rate is still one of the highest in the world. WHO reports claim that North Korea’s smoking rate among those age 15 years and older is 52.3%, the highest in Asia. This is partly because smoking in the streets and all major public facilities is allowed. Restaurants, parks, offices, theatres and public gathering areas are all places in which people are free to smoke. There are ‘no-smoking’ signs on trains, but many ignore these warnings as well.

Read previous posts on tobacco here.

Read the full story here:
No Smoking Day Lacking NK Traction
Daily NK
Choi Song Min
2012-06-05

Share

Posted in Tobacco, UNWHO | Comments Closed

KOTRA on DPRK trade

Friday, June 1st, 2012

UPDATE (2012-9-19): The South Korean government is offering compensation to companies affected affected by the South Korean government’s policy decisions. According to the JoongAng Daily:

The Ministry of Unification announced a plan yesterday to pay cash to local firms financially distressed by the suspension of inter-Korean trade and economic cooperation.

The unprecedented aid totaling 7.5 billion won ($6.7 million) will go to South Korean businessmen who have financially suffered from Seoul’s imposition of economic sanctions on North Korea on May 24, 2010 in the wake of the North’s sinking of the South’s naval vessel Cheonan earlier that year, said Kim Hyung-suk, a unification ministry spokesman. The 7.5 billion won comes from the Inter-Korean Cooperation Fund.

The offer of cash aid to companies doing business with North Korea is a first. Previously, authorities provided loans worth a total of 56.9 billion won to 221 companies on two occasions in 2010 and this year.

The decision comes as all economic cooperation between Seoul and Pyongyang has been put on hold except at the Kaesong Industrial Complex, since the implementation of measure announced by the Lee Myung-bak administration in May 2010.

The sanctions on trade with North Korea in the wake of the sinking of Cheonan, which killed 46 naval officers in March 2010, stopped all business partnerships.

“As it is mainly small- and medium-sized companies that are in financial difficulties due to the halted economic activities in the North, we expect the funds to help them recover,” said Yoon Min-ho, director of the economic cooperation division at the ministry.

To be eligible, companies must have investment records in the North during the two years before May 2010 or a history of trading with Pyongyang one year before May 2010.

The ministry will provide between 5 million won and 20 million won to each company that invested in the North following due diligence. Business groups that invested more than $3 million in the North will be given the maximum amount of 20 million won.

For traders with volumes of trade of over $1 million, aid of 15 million won will be given.

Companies that invested in the Mount Kumgang tourism business, which was curtailed after a North Korean guard shot a South Korean tourist in 2008, can also apply for assistance.

Article citation: Kang Jin-kyu, “Cash aid for ailing investors in North”, JoongAng Daily, 2012-9-19

ORIGINAL POST (2012-6-1): Along with the anniversary of the “May 24 Measures”  we have seen many reports on the status of the DPRK – ROK trade relationship. I have previously blogged about the reports by the Korea Development Institute (KDI), Hyundai Research Institute and  Korea International Trade Association.

Now we have a new report by the Korea Trade-Investment Promotion Corporation (KOTRA).

Because I am unable to locate the original report (in Korean), I have posted commentary on the report below.

According to the Hankyoreh:

Seoul’s attempts to handle North Korean provocation by isolating it economically appear to have been ineffective. A report on 2011 North Korean trade trends released May 30 by the Korea Trade Promotion Corporation (KOTRA) had the country’s exports up by 84.2% and its imports up by 32.6% from the year before. The numbers did not include inter-Korean trade figures.

North Korea had trade of US$6.3 billion for 2011, comprised of US$2.8 in exports and US$3.5 in imports. This marked a 51.3% increase from the year before.

Its biggest export was coal, at US$1.17 billion, followed by minerals (US$400 million) and textiles (US$390 million). The largest import was petroleum and other fuels (US$810 million), followed by machinery (US$300 million) and electronics (US$270 million).

The country’s largest trading partner was China, with US$2.46 billion in exports and US$3.17 billion in imports last year, for total trade of US$5.63 billion, or 89.1% of all North Korean trade. In 2004, only 48.5% of North Korea’s trade was with China. The next largest trading partners were Russia, Germany, India, and Bangladesh, in that order.

Meanwhile, trade with South Korea slid amid Seoul’s efforts to isolate Pyongyang. A report on inter-Korean trade by the Unification Minister showed a total of US$1.7 billion last year, down nearly US$200 million from the US$1.9 recorded in 2010.

The numbers show that while inter-Korean economic cooperation is being stymied by the South Korean government‘s policies, North Korea has been making up the difference and then some by trading with other countries.

University of North Korean Studies professor Yang Mu-jin said, “Not only are the government’s isolation policies completely ineffective, but they’ve increased [North Korea’s] reliance on China. These policies have been proven ineffective and should be abandoned immediately.”

Here are some additional details from the Financial Times:

Trade with China increased 62.4 per cent from a year earlier to $5.63bn.

…

“The increased trade does not mean a better life for North Koreans because the hard currency earned from mineral exports to China was mostly spent on the large-scale events to promote the regime,” said Suh Jae-pyong, a North Korean defector who works for the Committee for the Democratisation of North Korea, a civic group.

Stephan Haggard comments on the KOTRA report on his blog:

So how important is China to North Korea? The numbers cited are often wildly exaggerated in the policy debates, largely because of the difficulty of getting accurate information on the DPRK’s overall trade. The government of North Korea regards economic statistics as state secrets; as a result, all trade data has to be reconstructed by examining the “mirror statistics” of the country’s trade partners: by adding up what other countries say that they import from the country.

But even such an apparently simple exercise is fraught. First, a number of countires—including Iran—also do not provide reliable trade statistics. Second, nearly every year the statistical agency of some country around the world gets North and South Korea confused and reports an amazing spike in trade with North Korea, consisting of imports of North Korean cell phones and automobiles. Not!

The most widely cited source on North Korean trade is a South Korean public agency, KOTRA, which carefully screens the mirror data for such obvious anomalies. But KOTRA adopts a number of other conventions that distort the overall trade picture. In calculating North Korean trade it excludes the country’s trade with South Korea (on the constitutional grounds that inter-Korean trade is within the nation) and oddly ignores trade with many Middle Eastern countries that do in fact report trade with North Korea to the UN statistical agencies. We have never figured out why they do this, and it may have reasonable motivations, such as beliefs about the reliability of the data. But simply throwing the data out makes now sense.

The upshot is that the prominence of the trade partners that KOTRA does count is greatly exaggerated. The New York Times and Washington Post, for example, have both reported that China accounts for 80 percent of North Korea’s trade; even with smuggling that is wildly exaggerated given the ongoing important of Kaesong for North Korea’s balance of payments.

The actual figure, once North-South and other missing entries are accounted for, is roughly half as much by our estimates (see the figure above). But over 40% reliance on China is not trivial. Moreover, the prevalence of private firms in this trade—as we have reported in two recent working papers (here and here)—is high. Moreover, state-owned enterprises are themselves profit-driven. Even if Chinese authorities were aggressive in enforcing sanctions—which they do not appear to be—the opportunities for mischief are high.

Scott Snyder comments on the numbers here.

Read the full stories here:
North Korea keeps doing business in spite of isolation
Hankyoreh
Lee Jeong-hun
2012-1-1

N Korea trade soars on Chinese demand
Financial Times
Song Jung-a
2012-1-1

Sanctions Busing
Stephan Haggard
2012-6-12

Share

Posted in China, International trade, Korea Trade-Investment Promotion Agency (KOTRA), RoK Ministry of Unification, South Korea, Statistics, Trade Statistics | Comments Closed

On DPRK efforts to join UN carbon market

Thursday, May 31st, 2012

UPDATE 14 (2016-12-8): The Pyongyang Times reports on the CDM project:

Various CDM projects obtain CERs

The UN Framework Convention on Climate Change CDM Executive Board recently issued certified emission reductions for the DPRK’s clean development mechanism projects.

Today many countries make great efforts to reduce greenhouse gas emissions as part of the worldwide bid to prevent global warming, the root cause of climate change.

The DPRK also proactively joins in the international efforts.

It signed the Kyoto Protocol, which took effect in 2005, and joined the Paris agreement on climate change signed by 174 countries in August this year.

The agreement, adopted at the UN Conference on Climate Change in Paris in 2015, is aimed at reducing the world’s greenhouse gas emissions to the maximum so that the global average temperatine would not rise more than 2 degrees over that in the 1850s, the pre-industrialization period.

As a signatory to the Paris agreement, the DPRK has worked out 2024 and 2030 greenhouse gas reduction plans and pushed ahead with them.

In keeping with the trend when the sales of carbon dioxide emission rights have emerged as CDM and CDM activities are brisk in the world environmental protection market, a non-permanent CDM committee has been set up in the Cabinet and the General Bureau for Cooperation with International Organizations of the Ministry of External Economic Relations plays the role of its secretariat.

While coordinating all CDM project activities in the country, the secretariat also undertakes issuance of CERs for various CDM project activities on the basis of agreements on cooperation for the development of CDM projects with CER buyers, Topic Energo of the Czech Republic and Ohana LLP, Britain.

In the course of this, several projects were registered as CDM projects by the CDM Executive Board. They include Ryesonggang Youth Power Station units 3, 4 and 5, Hamhung Youth Power Station unit 1, Kumyagang Power Station unit 2, Paektusan Hero Youth Power Station unit 2 and package projects for “Treatment of waste water from chemical factories in the DPRK” and “Collection and use of methane gas from coal mines in the DPRK”.

The secretariat ensured that Paektusan Hero Youth Power Station unit 2 and Ryesonggang Youth Power Station unit 4 obtained CERS for the first time after receiving international certification for their power generation in May.

Their CERs issued amount to 15 800 and 27 807 tons respectively.

The secretariat now works to achieve international certification of other registered CDM projects.

By Jong Hwa Sun PT

UPDATE 13 (2014-11-28): The Ryesonggang Youth Power Station No.4 has been completed. According to KCNA:

New Power Station Goes Operational

Kumchon, November 27 (KCNA) — Ryesonggang Youth Power Station No. 4 went operational.

President Kim Il Sung indicated the orientation of building the power stations on the Ryesong River. Leader Kim Jong Il visited the construction sites several times, setting forth tasks and ways for the construction and bestowing loving care and benevolence on the builders.

Marshal Kim Jong Un appreciated the achievements of the people in North Hwanghae Province when he visited Ryesonggang Youth Power Station No. 1. He not only took measures for finishing the construction of Ryesonggang Youth Power Station No. 2 by the concerted efforts of the army and people but also led the construction of Ryesonggang Youth Power Station No. 4.

The completion of Ryesonggang Youth Power Station No. 4 is another success in implementing the behests of Kim Il Sung and Kim Jong Il to settle the acute shortage of electricity in the North Hwanghae Province by building power stations on the Ryesong River. It also helped lay a more solid foundation for developing economy and improving the living standard of the people in the province.

The completion ceremony took place on Thursday.

Present at the ceremony were Tong Jong Ho, minister of Construction and Building-Materials Industry, Pak Thae Dok, chief secretary of the North Hwanghae Provincial Committee of the Workers’ Party of Korea, and others.

Here is KCTV footage (7:21). Here is UNFCCC data.

UPDATE 12 (2012-12-13): Robert Winstanley-Chesters has some additional data here.

UPDATE 11 (2012-11-25): The DPRK has registered four more power plants with the UNFCCC CDM project.

1. Paekdusan Songun Youth Power Station No. 2 (백두산선군청년2호발전소)
Registered July 13, 2012

Pictured Above (Google Earth): The approximate location of the Paekdusan Songun Youth Power Station No. 2

The UNFCCC documents on the registration of the power plant can be seen here.

Total installed capacity of the project will be 14 MW, consisting of two sets of 7 MW hydropower turbines and associated generators.

According to the UN documents, the project is expected to be put into operation on January 1, 2014.

The organizations listed on the document are the Namgang Hydropower Construction Complex and Topič Energo s.r.o. (Czech Republic)

2. Ryesonggang Youth Power Station No. 4 (례성강청년4호발전소)
Registered July 20, 2012

Pictured Above (Google Earth): The approximate location of the Ryesonggang Youth Power Station No. 4.

The UNFCCC documents on the registration of the power plant can be seen here.

The installed capacity of the project is 10 MW, which consists of 4 sets of generating facilities with a capacity of 2.5 MW each. The project will generate the electricity energy of 40,030 MWh and supply 38,640 MWh to the WPG in a year.

According to the UN documents, the project is expected to be put into operation on December 1, 2012. This facility was last featured on the DPRK evening news on 2012-11-8. See the footage here.

The organizations listed on the document are the Kumchon Electric Power Company  and Topič Energo s.r.o. (Czech Republic).

3. Ryesonggang Youth Power Station No. 5 (례성강청년5호발전소)
Registered August 22, 2012

Pictured Above (Google Earth): Construction work on the Ryesonggang Youth Power Station No. 5.

The UNFCCC documents on the registration of the power plant can be seen here.

The installed capacity of the project is 10 MW, which consists of 4 sets of generating facilities with a capacity of 2.5 MW each. The project will generate electric energy of 41,150 MWh and supply 40,616 MWh.

Organizations listed in the document include the Kangdong Hydro Power Construction Company and Topič Energo s.r.o. (Czech Republic).

According to the documents, the project is planned to be put into operation on May 1, 2012. The most recent Google Earth satellite imagery is dated Spetember 5, 2011 and the last time the project was featured on North Korean television was November 5, 2011. I am skeptical that the project was finished on time since the opening of the dam has yet to be announced publicly.

4. Ryesonggang Youth Power Station No. 3 (례성강청년3호발전소)
Registered October 23, 2012

Ryesonggang-power-station-no-3

Pictured Above (Google Earth): Construction work on the Ryesonggang Youth Power Station No. 3.

The UNFCCC documents on the registration of the power plant can be seen here.

The project with an installed capacity of 10 MW, 4 sets of generating facilities with a capacity of 2.5 MW
respectively. The project will generate the electricity energy of 42,800 MWh and supply the electricity of 41,310
MWh.

Organizations listed in the document include the Tosan Electric Power Company and Topič Energo s.r.o. (Czech Republic).

Though the plant is supposed to go into operation on July 1, 2012, the most recent Google Earth imagery from 2012-11-8 shows the plan remains uncompleted. The last time the plant was featured on North Korean television was 2011-6-25.

UPDATE 10 (2012-10-23): The DPRK has registered its second CDM project: Kumya Hydro Power Plant. (AKA Kumyagang Power Station No. 2, 금야강2호발전소)

Here is the official UN web page containing all of the technical information.

Here is a Google Earth satellite image featuring the dam and power station (39.552132°, 127.156062°):

Kumya-plant-2

The Hanns Seidel Foundation (Facebook page here) visited the site and took this photo:

KCTV footage dated 2014-9-16 shows a completed Kumya Hydro Power Plant (AKA Kumyagang Power Station No. 2). See the footage here.

UPDATE 9 (2012-8-16): The DPRK’s first CDM project registered: Hamhung Hydro Power Plant No. 1 (AKA Hamhung Youth Power Station No. 1)

Hamhung-plant-UNFCCC-Bing

Pictured above (date unknown): On Bing Maps (coordinates: 39.648086°, 127.269219°) we can see construction is underway

A valued reader notified me this morning that the DPRK’s first CDM project was registered in July: The Hamhung Hydro Power Plant No.1.

You can read more about the project on the UN web page here. As I understand it, the CER (the emissions rights) from the plant do not go directly to North Korea but to a Czech company who co-registered the project. It will become operational on January 1, 2013.

UPDATE 8 (2012-6-5): In addition to the seven power plants submitted for approval below, the DPRK is involved in several other “Programmes of Activities (POAs)“. You can see all the POAs by clicking here and selecting DPRK as “Host Country”.

Here is a summary:

1. Methane Utilization and Destruction Programme from Animal Waste Management System (AWMS) in DPR Korea

2. Methane Utilisation and Destruction Programme from Industrial Wastewater in DPR Korea

3. CarbonSoft Open Source PoA, LED Lighting Distribution: Emerging Markets

4. Coal Mine Methane Utilisation and Destruction Programme in DPR Korea

5. International water purification programme

6. CFL Lighting Scheme in Democratic People’s Republic of Korea (DPRK)

UPDATE 7 (2012-6-2): The creator of Nord Korea Info passed along the following information on the DPRK’s CDM projects:

1. Naenara, one of the DPRK’s official news outlets, has posted numerous CDM documents. You can see them here.

2. Information posted to the UNFCCC web page on specific CDM projects:

A. Kumya Hydropower Plant (AKA Kumyagang Power Staiton No. 2)
B. Ryesonggang Hydropower Plant No.3 (Comments) (AKA Ryesonggang Youth Power Station N. 3)
C. Ryesonggang Hydropower Plant No.4 (Comments) (AKA Ryesonggang Youth Power Station N. 4)
D. Ryesonggang Hydropower Plant No.5 (Comments) (AKA Ryesonggang Youth Power Station N. 5)
E. Paekdusan Songun Youth 14MW Hydropower Project No.2 (AKA Paektusan Songun Youth Power Station No. 2)
F. Wonsankunmin Hydropower Project No.1 (Comments) (AKA Wonsan Army People Power Station No. 1)
G. Hamhung Hydropower Plant No.1 (AKA Hamhung Youth Power Station No. 1)

No new information is available on the Hamhung 20MW Hydropower Plant No. 2 (AKA Hamhung Youth Power Station No. 2). So I am unsure what has happened to it.

UPDATE 6 (2012-5-31): Bloomberg Businessweek reports on the DPRK’s efforts to sell carbon credits:

[U]nder the terms of the [Kyoto] protocol, North Korea, as a developing country and a member of the United Nations, has the right to build clean energy projects that may apply for Certified Emission Reductions, or CERs, popularly known as carbon credits. The North Koreans can then sell them to a rich country or company that needs the credits to offset its own greenhouse gases. Dig into data from the UN’s Framework Convention on Climate Change, and you will find seven North Korean projects registered for carbon trading.

This is where Miroslav Blazek comes in. Blazek, director of Czech company Topic Energo, acts as a link between North Korea and potential carbon credit buyers. He says his experience as manager of a tractor factory in socialist-era Czechoslovakia is invaluable for doing business with the communist North Koreans. “I can work with them because I understand how their system works,” he says. “If I send an e-mail and still don’t have a reply in several days, I know it’s not because they didn’t see it but because it had to work its way through the chain of command. For me it’s like a trip down memory lane.”

North Korea is now building seven hydroelecrtric plants, which provide some of the cleanest energy going. Most can earn tradable carbon credits. Blazek says the North Koreans “jumped” at the opportunity to get into carbon trading: “They immediately grasped that this is a way to make money.” Korea’s seven dams may generate as many as 241,000 CERs a year, worth almost €1 million ($1.3 million). “The projects are already in a relatively advanced phase,” says Ondrej Bores, director of carbon advisory services at Virtuse Energy in Prague, who’s worked with Blazek on other deals.

Still, selling anything made in North Korea has its challenges. More than 30 potential buyers pulled out because of the U.S. embargo on trade with North Korea. Blazek finally struck a deal with a Chinese-controlled conglomerate that needs credits to offset emissions from facilities in Europe. He won’t name the company, citing a confidentiality clause.

The Prague Post also reported on this story.

UPDATE 5 (2012-2-14): I have been notified that the certification program is proceeding. From a reader:

There has been a statement by the 1718 committee (on sanctions) that CDM projects in NK do not violate UN rules.

[Seven] hydropower plants did get their validation and underwent a process of “clarifications and corrections” as foreseen by UN rules. After the final report (which might have been already issued or might be issued soon) they will go for final vote to the UNFCCC.

Currently, North Korea works on projects as diverse as methane gas from coal mines, bio-gas and electricity-saving light bulbs.

UPDATE 4 (2011-7-11): I just checked the UNFCCC web page, and it appears that in addition to the hydro power plants mentioned below, the North Koreans also submitted the “Energy Efficiency Improvement Project in Pyongyang Textile Factory” [sic] for carbon offsets on May 23, 2011. According to the UNFCCC web page, the project is in the portfolio of the Carbon-Trade Division, GBCIO, Ministry of Foreign Trade.

UPDATE 3 (2011-7-11): DPRK begins construction of Ryesonggang Power Stations 3 and 4

On June 25th the DPRK evening news featured footage of the construction of the Ryesonggang Youth Power Station No. 3 (례성강청년3호발전소). I have uploaded the footage to YouTube and you can see it here.

On June 28th the DPRK evening news featured footage of the construction of the Ryesonggang Youth Power Station No. 4 (례성강청년4호발전소). I have uploaded the footage to YouTube and you can see it here.

UPDATE 2 (2011-3-11): The DPRK has apparently registered eight power plants with the UNFCCC. According to Reuters:

North Korea has registered eight hydroelectric plants with the United Nations, and if approved, could allow the world’s most reclusive state to sell carbon offsets to earn precious hard currency.

These hydropower projects were registered with the United Nations Framework Convention on Climate Change (UNFCCC) for prior consideration in getting carbon credits, some of which have a capacity of 20 megawatts, the UNFCCC website showed.

Prior consideration is the first step for accreditation toward the U.N.’s Clean Development Mechanism that allows developing countries to earn tradeable carbon credits for emissions from clean-energy projects.

Bernhard Seliger, a messenger for North Korean officials on these projects, said the United Nations uploaded the information on Thursday after he submitted related forms on behalf of the North Korean government’s carbon trade division in late February.

“I have no idea when the U.N. makes a decision… North Korea has to finish the power plants, which up to now are only half-finished dams,” Seliger, Hanns Seidel Foundation’s representative in South Korea, told Reuters via email.

Analysts questioned the demand for carbon credits from North Korea, concerned the money might be siphoned off to nuclear arms or other military projects.

According to the UNFCCC web page (select Democratic People’s Republic of Korea in the “Host Party” box), these are the eight power stations that have been submitted for consideration:

Hamhung Hydropower Plant No.1 (AKA Hamhung Youth Power Station No. 1)
Hamhung 20MW Hydropower Plant No. 2 (AKA Hamhung Youth Power Station No. 2)
Kumya Hydropower Plant (AKA Kumyagang Power Station No. 2)
Paekdusan Songun Youth 14MW Hydropower Project No.2 (AKA Paektusan Songun Youth Power Station No. 2)
Ryesonggang Hydropower Project No. 3 (AKA Ryesonggang Youth Power Station N. 3)
Ryesonggang Hydropower Project No. 4 (AKA Ryesonggang Youth Power Station N. 4)
Ryesonggang Hydropower Project No. 5 (AKA Ryesonggang Youth Power Station N. 5)
Wonsangunmin 20MW Hydropower Project No. 1 (AKA Wonsan Army People Power Station No. 1)

And according to an email from the UNFCCC:

This list contains all the projects which have already started and for which a notification of CDM prior consideration has been submitted. This notification is necessary to prove that the incentive of the CDM was a decisive factor for taking up the project when a project has started before a project design document (PDD) has been published for global stakeholder consultation or a new methodology in connection with the project has been submitted. However, kindly note that these projects have not yet entered the CDM project cycle as lined out in the CDM rules, requirements and procedures, and to submission for registration has yet been made.

Further details on the CDM project cycle are available here: http://cdm.unfccc.int/Projects/diagram.html

UPDATE 1 (2011-3-8): According to the Guardian:

North Korea hopes to earn much-needed hard currency by selling UN-backed carbon offsets from a series of hydro-power projects, as the country faces sanctions over its nuclear weapons programme.

If approved and registered by the UN, these would be the first projects for North Korea under a scheme called the Clean Development Mechanism (CDM). This allows developing countries to earn tradeable carbon credits for emissions reductions from clean-energy projects.

Some analysts questioned the demand for carbon credits from North Korea, with fears the money might be siphoned off to nuclear arms or other military projects.

The government has asked the Hanns Seidel Foundation of Germany, which focuses on humanitarian issues, to act as a go-between by working with UN-approved verification agency TUV Nord.

According to Bernhard Seliger, the foundation’s representative in South Korea, North Korea is initially looking at trying to get approval for three hydro power plants of 7-8 megawatts (MW).

Seliger visited the three hydro-plant construction sites in the north-east corner of the country in January.

In a statement, TUV Nord confirmed the foundation had engaged their services.

“In this respect, TUV Nord intends to verify hydropower dams in North Korea once pre-registered with United Nations framework conventions on climate change [UNFCCC] via the Beijing branch of its Chinese subsidiary TUV Nord Guangzhou,” it said.

If registered, the plants could yield millions of euros over several years.

Beijing-based lawyer Tom Luckock, who specialises in projects that curb greenhouse gas emissions, estimated that an 8 MW hydro plant could yield about 23,000 UN offsets a year.

The offsets, called Certified Emissions Reductions (CERs), are generated from registered CDM projects, such as wind farms, that are rewarded for reducing greenhouse gas emissions.

The offsets currently trade at nearly €12 (£10) each and are bought by governments in rich nations that need to meet UN emissions reduction targets.

Europe is the biggest buyer, with large polluting firms allowed to buy the offsets to meet a portion of their emissions reduction targets under the EU’s emissions trading scheme.

“Finding ways to secure foreign currency is the priority for North Korea, which is linked to everything from food to raw material imports to boost reduced productivity,” said Cho Myung-chul, a senior researcher at the Korea Institute for International Economic Policy.

…

Seliger said North Korea, which signed the UN’s Kyoto Protocol climate pact in 2005, was also interested in biomass power generation projects under the CDM.

The UN-approved national agency that assesses and approves CDM projects in North Korea was not available for comment.

Questions remained on demand for North Korean CERs.

“Even if they open up, who in the world wants to pay for North Korea that is blamed for its nuclear weapons programme?” said Choi Soo-young, a senior researcher at the Korea Institute for National Unification.

Cho said the UN needed to prevent outside cash going into its nuclear development activities, while Luckock, of global law firm Norton Rose, said: “Their limited access to hard currency has to be a concern for buyers – the damages clauses will carry limited weight without some security there.”

Another challenge is that North Korea would have to make public its energy consumption and generation data and disclose information on the amount of energy linked to the hydro project.

“Annual inspection, constant measurement and energy flow posting on the [UNFCCC] website – all these things are new for North Korea,” Seliger said.

According to the AFP:

“We are talking about eight power plants, with the smallest size about 7.5 megawatts. These are not big projects but small or medium-sized projects,” Bernhard Seliger told AFP.

None has yet been completed, he said.

“I saw some (construction) sites in South Hamkyong province but that’s not all. There are other plants in other regions,” Seliger said, adding that some of the projects are led by the UN Development Programme.

The Hanns Seidel Foundation has been working since 2003 to build the North’s development capacity, and in 2008 organised a seminar on carbon trading for Pyongyang officials at their request.

The tradeable credits, called Certified Emissions Reductions, are awarded for approved clean-energy projects such as hydropower plants or wind farms.

Big polluters elsewhere in the world can buy them as part of their efforts to cut emissions.

Seliger said his foundation is helping the North to prepare for the auditing process required to join the UN carbon credit trading system known as the Clean Development Mechanism.

“One good thing about this project is that it is very transparent, involving monitoring and auditing on an annual basis… I think it is very good for North Korea to participate in such an international regime,” said Seliger.

An official at a South Korean state agency, the Korea Energy Management Corp, said registration would take at least a year or two and it was unclear how much the North would be able to earn if approved.

The official, who declined to be identified, said a typical eight-megawatt hydropower plant could yield about 19,500 carbon credits each year, each of which was currently traded at 12 euros in global markets.

This would amount to around $327,000 a year.

But some buyers may shun the communist state, given its history of nuclear and missile development which has led to international sanctions.

“Government buyers will certainly shy away from dealing with the North,” said Koo Jung-Han, a researcher at the Korea Institute of Finance.

“But private companies have few reasons not to buy credits from the North as long as it can offer a competitively low price. However, the big question is whether the North will be able to build the plants without outside financiers.”

Koo said that countries hoping to buy carbon credits from upcoming overseas projects often encourage investment in the ventures by their own finance companies.

“But what kind of financial companies will take a plunge in projects in such a volatile, politically risky country like North Korea?”

The North suffers persistent power shortages even in the showpiece capital Pyongyang.

Many rural areas receive power only during key agricultural seasons, and must rely for the rest of the year on alternative fuels, according to a recent policy paper published by the Nautilus Institute think-tank.

Here are the web pages for the Hanns Seidel Foundation and the UNFCCC Clean Development Mechanism (CDM) Program.

A reader writes in with the following comments:

I would like to share some comments on the potential CDM projects in north Korea as i have been working on this field for many years now.

Concerning existing hydro-power plants:
To be eligible as a CDM project, one of the first criteria is the additionality of the project. You have to prove (the rules are very strict) that the project would not have been launched without the consideration of the revenues from the reselling of the CERs. So the dams that have already been buit are not eligible.

Concerning hydro-power plants that are being implemented:
The first step of a CDM project is to notify to the UNFCCC secretariat and to Designated National Authority (in this case the Secretariat of the National Coordinating Committee of Democratic People’s Republic of Korea for Environment) that you are seeking to establish your project as a CDM project. Up to now, no such notification has been received by UNFCCC so it would be quite difficult for projects being implemented to ask for the CDM status (I mean nearly impossible).

Some facts concerning future hydro-power projects:
From the day you send the notification that you are seeking the CDM status to the day you are actually given the status, it takes in average 2 to 3 years (they would have to build the plants during this period). Then it can be at least another year before you receive the CERs. The price of 12 euro for a CER is for secondary market. The price for primary CER (directly sold by the producer) would be much less than 8 euro.

The figure of 20 000 CERs/year is completely unpredictable for the moment, here is a simplification of the calculation: One CER is equal to one tonne of CO2 equivalent that would be avoided by producing clean electricity. For example when you produce 1 MW electricity from coal, the process releases X tonnes of CO2 in the atmosphere but when you produce 1 MW from a hydropower plant, you do not release CO2. In order to calculate what the CDM project would be able to claim, we would have to know the CO2 emission factor of the North Korean grid and then multiply it by the amount of MWh produced by the CDM project. If most of the electricity produced these days in North Korea already comes from hydro-power plants, then the national emission factor will be low and the CDM project will not avoid a lot of CO2 emission (and so not earn a lot of €) Without the capacity of the future project and the national emission factor, it is impossible to estimate the amount of CERs the project could generate.

The CDM status seems quiet unrealistic to obtain for North Korean projects but other international agreements are discussed these days and their outcome may be more adapted.

ORIGINAL POST (2011-1-31): According to Radio Free Asia:

Nuclear-armed but cash-starved North Korea has expressed interest in joining the world carbon market in an apparent bid to earn precious hard currency and avoid international sanctions, an expert told RFA.

But the secretive Kim Jong Il regime has to disclose critical information, such as energy consumption data as well as methods by which it derives energy, to be eligible for funding under the United Nations’ Clean Development Mechanism (CDM), said the North Korea expert, speaking on condition of anonymity.

The CDM is aimed at encouraging companies or organizations in the developed world to invest in carbon dioxide emissions-saving projects in developing countries.

In return for funding and technology transfer, investors receive carbon credits, which can then either be traded on carbon markets or used to reduce their own emissions tally if they are subject to a domestic cap.

The Kyoto Protocol set emission caps for 38 countries through 2012, establishing the CDM as a worldwide carbon market. It is a cornerstone of the group’s efforts to tackle global warming.

The North Korea expert told RFA on Jan. 13 that Pyongyang intended to apply for funding via the CDM and that the regime might list its proposed hydro-electricity power projects under the U.N. mechanism.

UN refrains from comment

When contacted on the North Korea move, the U.N. Framework Convention on Climate Change (UNFCCC), the secretariat charged with implementing the global environmental treaty to stabilize greenhouse gas concentrations, said it would refrain from commenting on individual country projects.

The North Korea expert estimated that one ton of carbon dioxide would trade for about U.S. $26 dollars and if a hydro-electric power project was registered under the CDM, depending on the carbon credit bid price, about U.S. $1 million dollars could be earned annually.

A hydro project registered under the CDM would need to be evaluated by U.N. inspectors for it to qualify for carbon credits. Usually, it would be evaluated continuously for about 14 years.

Details, including the amount of energy linked to the hydro project and potential reduction of greenhouse gas emissions, would have to be submitted.

North Korea has been mostly reluctant to share information about its energy generation activities.

According to the expert, North Korea has recently displayed “great interest” in the possibility of operating hydro-electric power stations to alleviate its domestic energy shortages and to acquire “carbon credits” that it could, in turn, sell on the international carbon market.

Hard currency

As North Korea’s economic crisis worsens, Pyongyang is seeking ways to earn hard currency following a failed currency reform and due to sanctions imposed by the international community over its nuclear and missile developments and provocations targeting South Korea.

The interest in the CDM is likely to be part of this search.

The North Korea expert also said that earning hard currency through “carbon credits” would not be subject to sanctions imposed on Pyongyang under UN Security Council resolutions, and that any North Korea’s application for participation under the CDM “may stand a chance.”

“For North Korea, this could be an opportunity to earn hard currency without engaging in illegal armament sales, while operating an electric power station in transparent fashion, and accepting strict monitoring by the UN, and abiding by applicable international standards.”

The United States has been pressing China to use its influence to persuade North Korea regime to end recent provocations and return to disarmament talks involving the three countries and South Korea, Russia and Japan.

The six-party nuclear talks were last held in 2008. The impoverished North has been seeking a restart to the nuclear negotiations, which propose to reward its gradual nuclear disarmament with phased infusions of economic aid.

In a bid to renew dialogue and ease chances of conflict, South Korea recently proposed holding a preliminary meeting with North Korea on Feb. 11 to prepare for high-level defense talks. On Friday, the North suggested parliamentary talks between the two sides.

Read the full story here:
North Korea Eyes Carbon Market
Radio Free Asia
1/29/2011

Share

Posted in Dams/hydro, Electricity, Energy, Environmental protection, Finance, Fiscal & monetary policy, Forestry, Google Earth, Hanns Seidel Foundation, International trade, Lumber, Ministry of Foreign Trade, UN, UN Security Council, UNFCC | Comments Closed

Fewer Japanese cars reported on DPRK roads

Thursday, May 31st, 2012

According to the Daily NK:

Japanese-made vehicles are disappearing from the streets of North Korea, six years after Kim Jong Il decreed that it should happen. Indeed, just two years ago it seemed that a majority of the vehicles on the streets were still those made by Toyota, Nissan and Mitsubishi, but this is no longer the case.

According to a Chongjin source who spoke with Daily NK yesterday, “In accordance with a 2010 National Defense Commission order saying that all Japanese cars had to be off the streets by last December, now you can hardly see any Japanese private cars or vans in the entire country.”

The NDC order reportedly pertained to private cars and vans of 1.5T or less, although the source said that trucks of Japanese origin are also meant to be phased out over the next couple of years as well.

The move is said to relate to a decree issued by Kim Jong Il in 2006 in which he demanded that all Japanese cars had to be gotten rid of. He apparently issued it after watching unhappily as a Japanese car overtook his own on the Pyongyang-Wonsan highway.

Another case is instructive in showing the degree of official dislike. In 2008, Namkang Trading Co. had already been importing second hand Japanese cars through Rasun for some time. However, a provincial Party secretary received a report on the removal of Japanese cars, and as a result more than 300 such cars were gathered in a local stadium and turned into scrap metal using fork cranes as cadres watched on.

But it was not really until four years after Kim’s original decree that implementation hit its stride, because it took some time to secure sufficient replacement vehicles. Pyongyang municipal, Party, state and security organs were the first to lose theirs in 2010, followed in 2011 by factories, enterprises and foreign currency earning units.

According to the source, “At the time, there were more than 100 perfectly good vehicles taken from North Hamkyung Provincial Party Committee alone.” The transportation head in the province apparently commented that “tens of thousands of perfectly sound vehicles have been gotten rid of nationwide.”

However, in October, 2010, Kim Jong Il delivered cars as gifts to key individuals and organizations. There were nationwide events held to celebrate receipt of the vehicles. Cadres at provincial Party departmental head and above received Chinese vehicles, while local Party secretaries and people’s committee chairmen received Russian ones. Factories and enterprises were subsequently ordered to purchase vehicles produced domestically in Nampo by ‘Pyeonghwa Motors’, a joint venture with the Seoul-based Unification Church, but this didn’t always happen.

The relative popularity of Japanese vehicles in North Korea stems in part from their build quality, which allows them to traverse the often sketchy North Korean roads, and in part from the fact that they used to represent a good trading opportunity in the 1980s and 90s. At that time, such vehicles could be imported from Japan and sold on to Chinese businesses at a profit margin of up to 400%. Domestic popularity was one of the inevitable side-effects of this trade.

Previous posts on this topic here (2007-7-11) and here (2007-7-27).

Read the full story here:
Japanese Cars Crashing Out
Daily NK
Choi Song Min
2012-5-31

Share

Posted in Automobiles, Japan, National Defense Commission, Pyonghwa Motors, Rason Economic and Trade Zone (Rajin-Sonbong), Transportation | Comments Closed

« Older Entries
Newer Entries »