North Korean Economy Watch

The Pyongyang Times reports that Oxfam Hong Kong is providing farming assistance to the DPRK:

Oxfam Hong Kong is increasing aid to the DPRK’s agricultural sector.

The Hong Kong charity founded in 1976 is dedicated to helping victims of famine and natural disasters and is engaged in rendering humanitarian aid and education.

It has been giving aid to the DPRK since 1997.

In recent years it has supplied farming materials and food on several occasions via the Korean Committee for Promotion of International Trade to the Ryonghyon Cooperative Farm in Suan County, North Hwanghae Province and other farms.

The farms and the KCPIT are very grateful to the Hong Kong charity for their kind-hearted aid and hope for a wider range of relief activities.

The Oxfam Hong Kong webpage is here. I cannot find any information on their projects in the DPRK.

Institute for Far Eastern Studies (IFES)
2011.05.26

On May 23, the DPRK released the “Outline of DPRK-China Joint Development Plan for Rason and Hwanggumpyong Economic and Trade Zone” consisting of detailed blueprint of two countries’ recent bilateral joint development deal.

According to Yonhap News, China and North Korea are planning to turn the Rason and Hwanggumpyong areas into a comprehensive industrial complex of tourism and manufacturing producing automobiles, mobile phones, agricultural and chemical products.

In addition, the Law on Rason Economic and Trade Zone and the Special Law on Hwanggumpyong Zone will adopt market economy principles which will permit foreign bank investments and independent contracts between corporations and workers. Although the development plans are not definite yet, it is significant since it hints at North Korea’s shifting position on opening up and economic development.

The bilateral development plan between Pyongyang and Beijing will stretch from Rajin, Sonbong, Ungsang, to Gulpo areas.

In the Rajin area, four major industrial complexes will be constructed consisting of storage, logistics and distribution centers, state of the art technology, and equipment, clothing and food manufacturing. In the Ungsang area, comprehensive a wood processing complex will be built while in the Gulpo area, a high-efficiency agriculture zone will be constructed. In the Sonbong area, truck manufacturing factories will be built along with other metal producing factories. In Rajin, docks will be built for ship building and maintenance.

There are also plans of developing the Rason area into an international tourism zone. There are immediate plans to build basic tourism infrastructure such as hotels, resorts, and roads for sightseeing. The long-term goal is to build a grand Northeast Asia tour course, which will include Yanbian of China; Rason, Chongjin, Mount Chilbo and Mount Kumgang of North Korea; Vladivostok and Sakhalin of Russia; Sapporo and Nakata of Japan; and Sokcho and Busan of South Korea.

As for the Hwanggumpyong area, four major industrial complexes will be established: one each for information, tourism and culture, modern protected agriculture, and food processing. More specifically, Hwanggumpyong will connect information between Hwanggumpyong and the border city of Dandong in China. In addition, culture and tourism will be developed through promotion of Arirang and other cultural performances and exhibitions.

As for the high-efficiency agriculture zone, a modern agriculture technology research center will be established and China-DPRK joint markets will be set up to serve as a central commerce center.

To assist with the industrial development in the area, land and sea routes will be developed where roads and railroads will be built and Rajin will be upgraded to a comprehensive and multi-purpose port.

There are additional plans of constructing a coal power station to replace the current thermoelectric power plant in Sonbong. There is also discussion of possibly developing other alternative energy plants, such as wind and solar. There are also plans of building basic facilities of mobile telecommunication to promote international communication.

Hwanggumpyong is an island on the Yalu River and the new developments in building ports and roads along with distribution network, Internet, and mobile telecommunication will become a link connecting North Korea with China.

Pyongyang is pursuing development through multiple cooperation channels. It has plans of establishing three-tiered cooperative system with joint management committee, joint development management committee and investment development corporation with Beijing. These committees will be responsible for amending and negotiating any issues that may arise during the process of development and supervise various areas of investments, enterprises, and environment and as well as inspect land and commerce development and basic facility operations.

Both Pyongyang and Beijing will attract foreign investments through market-based tax and financial policies in the Rason and Hwanggumpyong zones. Specifically, tax refund policy will be implemented and tariffs will be lifted from any imported equipment and materials necessary for production. The foreign investment companies will be allowed to choose their own banks or even establish financial institutions to assist in their business management.

In addition, workers and companies will be permitted to sign their own labor contracts. The companies will be granted autonomy in hiring and firing, pricing, bankruptcy, liquidation and other business practices based on market principles.

As for investment protection policy, foreign investors will be permitted to transfer or inherit profits and assets and foreign investor’s investments and assets will not be collected as national property by North Korea.

UPDATE 13 (2011-6-1): KCNA has posted video of Ambassador Robert King leaving the DPRK with Mr. Jun.  You can see it at the new KCNA web page in an article titled, “Delegation of U.S. State Department Leaves” (May 28, 2011).   There are also pictures here, here, here, here, and here.

UPDATE 12 (2011-5-27): The DPRK has announced that they released Mr. Jun.  According to KCNA:

American Young-su Jun Released

Pyongyang, May 27 (KCNA) — As already reported, American Young-su Jun has been under investigation by a relevant institution after he was arrested in Nov. 2010 on charges of anti-DPRK crime.

The investigation proved that Jun committed serious crime against the DPRK which he frankly admitted himself.

Robert King, special envoy for Human Rights and Humanitarian Issues, U.S. State Department on a visit to the DPRK, expressed regret at the incident on behalf of the U.S. government and assured that it would make all its efforts to prevent the recurrence of similar incident. Earlier, former U.S. President Jimmy Carter and Reverend Franklin Graham visited the DPRK and repeatedly asked it to leniently pardon him. Taking all this into account, the DPRK government decided to set him free from the humanitarian stand.

During his detention, the DPRK allowed him to make regular contacts with the consul of the Swedish embassy representing the U.S. interests in the DPRK as well as correspondence and phone call with his family. It also gave him hospital treatment for his health reason.

You can read more in the Wall Street Journal and the Los Angeles Times.

UPDATE 11 (2011-5-18): The Daily NK asserts that Jun has been beaten and was supporting a network of underground churches n the DPRK.

UPDATE 10 (2011-5-11): The AP (via Washington Post) reports Eddie Jun has been visited by Swedish diplomats six times since March.

The U.S. government says that an American detained by North Korea since November is being well cared for and has been permitted to speak to his family by phone.

State Department spokesman Mark Toner said Wednesday Swedish diplomats have visited Eddie Jun six times since March and were continuing at U.S. request to ask for regular consular access.

(more…)

According to KBS:

South Korean firms doing trade with North Korea must will soon make payments only at government-designated banks.

The Unification Ministry said it will revise the law on inter-Korean cooperation and exchange to this effect. It said the measure aims to provide a greater understanding of the monetary flow of inter-Korean trade and secure transparent transactions.

The ministry has announced the qualifications a bank must meet to deal in inter-Korean trade payments and through June third, any of the 18 commercial banks in the country can apply for the designation. Two or three banks will be selected.

The revised law will also state in clearer terms the conditions and procedures relating to cross-border exchanges. It further calls for obtaining government approval when South Korean residents wish to transfer money to families in North Korea or when overseas chapters of South Korean firms seek to invest in North Korea.

The South Korean government is also seeking to gain control over remittances to families of DPRK defectors.

Read the full story here:
Designated Banks to Process S-N Trade Payments
KBS
2011-05-25

Andrei Lankov recently wrote a paper on the rise of China and the implications for Korean unification for a Korean-language publication.

You can download a PDF of the paper in English here.

Abstract
The rise of China can be seen as the single most important strategic problem which Korea faces currently. In the late 1970s, China entered a phase of high-speed economic growth, which still seems to be almost unstoppable. According to World Bank estimates, the average annual increase in China’s GDP in the years 2000-2009 was 9.7%. This is the world’s highest growth rate. Perhaps for the first time in modern history, the country which has the highest growth rate is the country with the largest population.

The future of Korea depends on its ability to find how to handle the Chinese challenge. It is going to be difficult, but there are hopeful signs, too: Chinese political elite may be remarkably realist, even Machiavellian, in their outlook but also rational and averse to adventurism. This gives Korea some hope that compromises with China will be possible. Without such compromises no unification of Korea will be possible in a new world where China is bound to be a major player.

UPDATE 7 (2011-5-30): According to the Choson Ilbo, the Hwanggumpyong Island groundbreaking ceremony was cancelled without any announcement.

UPDATE 6 (2011-5-27): According to the Irrawaddy, KJI’s delegation visit to Beijing overlapped with a Myanmar delegation.  Maybe the two met?

UPDATE 5 (2011-5-25): According the Choson Ilbo, Kim Jong-il’s security in China is facing an all new challenge: Yoku!

UPDATE 4 (2011-5-25): According to Yonhap and the Choson Ilbo, Kim Jong-il’s consort, Kim Ok, is traveling with him.

UPDATE 3 (2011-5-25): KJI is now in Beijing for talks with PRC President Hu Jintao (Yonhap).  According to a colleague, Xinhua claims KJI also met with Singapore’s Lee Kuan Yew in Beijing.

UPDATE 2 (2011-5-24): China confirms that Kim Jong-il is in the PRC (Nanjing on Tuesday).  China usually waits until KJI has returned to the DPRK before announcing his visits.  See the Wall Street Journal: China Real Time, Yonhap, AFP.

UPDATE 1 (2011-5-23): More coverage is coming out on KJI’s trip to the PRC:

1. Aidan Foster-Carter writes about Kim Jong-il’s previous trips to China in 38 North.

2. China claims Kim’s trip is focused on economic issues (WSJ):  “China invited North Korean dictator Kim Jong Il, who began his seventh trip there on Friday, to learn more about its economic development, Chinese Premier Wen Jiabao told South Korean President Lee Myung-bak Sunday.”

3. PRC-DPRK trade up significantly in the last year (Bloomberg): “North Korea’s trade with China jumped 30 percent last year even after the United Nations stepped up sanctions following its second nuclear test in May 2009, according to China’s commerce ministry.”

4. Yonhap reports that Kim Jong-il will possibly attend a groundbreaking ceremony for development of the Hwanggumpyong Island (see more here) .  This ceremony is supposedly scheduled for May 28th.

5. The Hankyoreh has an update of KJI’s travel itinerary as of today.

ORIGINAL POST (2011-5-20): This morning there were dozens of conflicting stories about whether Kim Jong-il and/or Kim jong-un had traveled to China.  Right now, the emerging view seems to be that Kim Jong-il is definitely in China and Kim Jong-un is possibly (probably not) in China.

So let’s back up a couple of days.  Kim Jong-il was just reported to have given on the spot guidance visits to the Ryongjon (룡전과수농장) and Toksong  (덕성과수농장) Fruit Farms on May 18th.  The Ryongjon Fruit Farm is located in Pukchon County (북청군, 40.172649°, 128.338476°) and the Toksong Fruit Farm is located in neighboring Toksong County (덕성군, 40.325806°, 128.262423°).  Those are the coordinates of the farms themselves if you want to check them out on Google Earth.

These farms lie on railway lines that indicate KJI was traveling north to cross into China at either Manpho (만포시) or Namyang, Onsong County (남양로동지구, 온성군).

So was Kim Jong-un traveling with Kim Jong-il?  Maybe, but I don’t think so…

KCNA reports from Kim’s guidance tours:

[Kim Jong-il] was accompanied by Kim Ki Nam and Choe Thae Bok, members of the Political Bureau and secretaries of the C.C., WPK, Thae Jong Su, alternate member of the Political Bureau and secretary of the C.C., WPK, and Kwak Pom Gi, chief secretary of the South Hamgyong Provincial Committee of the WPK.

Now I know that Kim Jong-un has reportedly accompanied his father on guidance trips without being listed as part of the official entourage and that he could have been omitted from official coverage precisely to hide his presence on the train to China.  In these situations I generally look to occam’s razor for the answer, and the razor says “no”.  Now I will just wait to be proven wrong.

The Wall Street Journal has more.

Here is coverage of the trip in the Washington Post.

Here is a headline (but no story) from Yonhap.

2012 DPRK tour dates: Koryo has posted travel dates for 2012, including a tour for Kim Il-sung’s 100th birthday.  Check the dates and itineraries here.

2011 Ultimate Frisbee tourney: Pyongyang will be home to its first ever Ultimate Frisbee tourney this summer.  August 27th.  Sign up now.

Ultimate Frisbee in North Korea. The most interesting sports thing you’ve ever done. Unless you’re Usain Bolt, who isn’t responding to my friend request.

The cost will be 890 Euros. This includes flights from and back to Beijing, tourist stuff Saturday and Monday, pizza, all other food that isn’t pizza, hotel, fields, entertainment. Visa fee (not optiona, 50 Euro) and ticket to the mass games (optional, but would be weird not to go: 80, 100, 150 or 300 Euro options) will be extra. North Korean microbrewed beer will be extra, but cheap (and good).

The itinerary includes two full days and three nights of touring. The tournament is a one day hat. We leave Beijing early Saturday and return early Tuesday. Participants should be in Beijing by Friday afternoon in order to collect visas get final info at Koryo Tours.
All nationalities except South Korean can participate.

Write an email to pyongyanghat@gmail.com if interested in attending and want more info.

If you know you’re in, write simon@koryogroup.com and ask for the necessary forms to get it going.

It ain’t cheap, but it will be amazing. We’re looking to get deposits by June 30th.

Tentative Itinerary for Ultimate Frisbee Tour
Thurs 25th Aug: Pickup in Beijing -Introduction to “Extreme Pollution Ultimate”, dinner at Dong Bei Ren Restaurant (Not included in tour fee)

Fri 26th Aug: Briefing/Collect Visas at Koryo Tours office in Beijing

Sat 27th Aug: N/A Arrival by Air Koryo flight from Beijing at 14:20, Fountain Park, Mansudae Grand Monument, Kim Il Sung Square, ARIRANG MASS GAMES

Sun 28th Aug: Taesongsan Park for Frisbee Tournament, picnic lunch Frisbee tournament, evening trip to Kaeson Youth funfair, dinner at Korean restaurant

Mon 29th Aug: Juche Tower, Mansudae Art Studio, Pyongyang Metro (extended ride on the subway), Arch of Triumph, USS Pueblo, Pizza Restaurant Lunch, FRISBEE CLINIC AT LOCAL MIDDLE SCHOOL. Paradise Micro-Brewery, Foreign Languages Bookshop, Farewell dinner at Duck BBQ restaurant, evening Karaoke option.

Tues 30th Aug: 9:00 Air Koryo Flight to Beijing. End of tour.

Previously, Koryo Tours hosted the first cricket match (2008) and first golf tournament (2005) in the DPRK.

Middlesbrough Women’s Football Team booklet: It has been posted to the Koryo Tours web page. You can download it here (PDF).  Learn more about this effort here and here.

According to Yonhap:

A Seoul appeals court ruled Thursday the South Korean government should pay 120 million won (US$110,000) to a North Korean defector over an identity leak case that he claimed led to the disappearance of his 22 relatives in the North.

The Seoul High Court said the government claimed media reports on defection were intended to satisfy the people’s right to know, but the need to accept the defector’s request for confidentiality takes precedence over the people’s right to know or the freedom of press.

Lee Kwang-su, 42, sailed into South Korean waters along with his wife, two children and a friend aboard a small barge in 2006. He claimed he had initially planned to go to Japan and seek political asylum at the U.S. embassy there.

Lee currently lives in California after he won asylum in the United States in 2008.

He has said South Korean investigators released his identity as well as that of four others to media despite his request for confidentiality for fear of retaliation against their relatives in North Korea.

North Korean defectors in the South claim that North Korea harshly punishes relatives of defectors and sends them to prisons.

Lee believed his relatives were sent to a political prison camp, though it is nearly impossible to independently verify the claims due to lack of free access to the isolated country.

The ruling raised the amount of compensation to Lee, who was awarded 55 million won in a lower court in October. He had demanded 1.15 billion won when he filed a suit against the South Korean government in 2008.

Lee said he will consult with his lawyer before deciding whether or not appeal the ruling.

“I cannot expect justice will be served even if I appeal to the Supreme Court,” Lee said after the ruling, adding he plans to sue the South Korean government in a U.S. court. He did not give a specific time frame.

South Korean prosecutors were not immediately available for comment.

Read the full story here:
Appeals court orders S. Korean gov’t to pay W120 mln to defector
Yonhap
2011-5-19

According to the Choson Ilbo:

North Korean Embassy officials in India are being investigated for involvement in a luxury car smuggling case worth W100 billion (US$1=W1,091).

Senior officials of the North Korean and Vietnamese embassies are suspected of smuggling luxury sedans and motorcycles, evading customs duties estimated at 5 billion rupees (approximately W120 billion) over the past years, the Indian Express reported Monday.

According to India’s Directorate of Revenue Intelligence, Sumit Walia, alias Sunny (32) imported stolen or second-hand foreign cars using the embassy officials as frontmen to evade customs duties and sold them as brand-new.

In India, second-hand foreign cars are subject to tariffs of 160 percent and new cars to 109 percent. But diplomats are exempt.

Walia bought stolen cars chiefly from the U.K, and forged their registration documents to disguise them as new cars. He imported them in the name of the diplomats and allegedly sold them to businessmen, politicians, and celebrities.

Indian authorities have confiscated 41 cars. Most of them are top brand cars such as BMW, Ferrari, Lexus, and Porsche.

The DRI estimated the amount of customs duties Walia and his gang have evaded at 5 billion rupees. The agency has asked the Indian Foreign Ministry for cooperation with the investigation to find out what role the North Korean and Vietnamese embassy officials played.

The more things change, the more they stay the same.  As regular readers are aware, North Korean embassies self-finance their operations through business opportunities in their host countries.  Sometimes these are legitimate business ventures…sometimes not.  Plenty of similar stories are archived on this web page.

Read the full story here:
N.Korean Diplomats in India Investigated for Car Smuggling
Choson Ilbo
2011-5-17

According to Reuters:

Pororo, who first debuted in 2003, is ubiquitous in South Korea, featured on everything from stick-on bandages to coffee mugs. Stamps with his image have sold more than those bearing the image of Olympic figure-skating champion Kim Yu-na, according to local media.

But few knew that North Korean cartoonists worked with their Southern counterparts to jointly produce part of the first two seasons of the television series that launched the bird to fame.

“This isn’t something that needs to be secret but by accident people found out that Pororo was partly produced in the North,” said Kim Jong-se, a senior official at Iconix Entertainment, the South Korean production company that developed Pororo.

“They gave us many responses, from very negative to very positive — we are a collaborator of the North or, it is great that both Koreas made the show together.”

After the leaders of North and South Korea signed a landmark peace pact in 2000 pledging new cooperative steps, Pororo was one of the inter-Korean businesses that developed, Kim said.

South Korean technicians went to the North to train their colleagues there. Production hit a snag when the North suddenly replaced its staff for the second season, forcing Kim’s company to repeat the teaching process, Kim said.

The North Korean participation took place between 2002 and 2005, ending when ties deteriorated between the two nations and the North could no longer join the project.

Pororo was probably developed at the Scientific and Educational Film Studio (SEK) or its affiliated April 26th Children’s Film Studio in Central District.  Guy Delisle worked there on an animation contract as well.  You can read about his experience here.

Read the full story here:
Iconic South Korean penguin character actually half-North Korean
Reuters
Ju-min Park
2011-5-6