North Korean Economy Watch

According to Yonhap:

Despite persisting political woes, a new South Korean company has begun operating in North Korea’s border industrial complex that combines superior South Korean capital and know-how with the North’s cheap local labor, a government official said Thursday.

The company, known as DSE, completed building its factory in Kaesong in early May and is therefore exempt from the investment ban on North Korea that Seoul imposed later that month over the sinking of a South Korean warship, the Unification Ministry official said.

…

The ministry official, who spoke on customary condition of anonymity, said DSE began operating on Jan. 3 and is employing 160 North Korean workers, part of the 44,000 workforce in the Kaesong complex, to produce lighting apparatuses and other metallic products.

The number of South Korean companies operating in Kaesong now stands at 122, the official added.

…

South Korea has since sharply cut down on the number of its workers allowed to stay in Kaesong. The North, in an apparent act of desperation to revive its economy, has since called for lowering tension and holding cross-border dialogue. South Korean officials are demanding that the North first show “sincerity,” indicating Pyongyang must apologize for the series of provocations blamed on it.

Read the full story here:
New S. Korean company begins operating in N. Korean factory park
Yonhap
Sam Kim
1/6/2011

According to AFP:

A pony-tailed worker taps on a laptop while, not far away, rosy-cheeked children sport baseball caps. Both vistas are part of a rare exhibition of contemporary North Korean art, nowadays on display at a trendy Moscow gallery.

The exhibition, titled “Water Still Flows under Ice,” addresses such themes as World Cup football, new technology and Western fashion. It is running at Winzavod, a brick-walled former factory that usually hosts cutting-edge shows.

In one painting, children wearing T-shirts and baseball caps gaze at monkeys at a zoo.

In another, a female engineer with a helmet over her pony tail taps on a laptop. There’s no sign of any brand name.

None of the works have been shown before outside the isolated Stalinist state, organizers of the show said.

They called the exhibition “unprecedented” and “attempt to break the ideological ice.”

The art is “post-socialist realism,” said Winzavod gallery’s director, Sofiya Trotsenko, referring to the Soviet idea of carrying a political message to the masses through folksy scenes of socialist triumphs.

She stressed the exhibition, which opened this month and runs to the end of January, was not intended as propaganda, despite being endorsed by the North Korean government.

“This exhibition is not propagandizing anything,” Trotsenko told AFP. “We do not make any judgments. We just show [the art] and it’s your business to draw conclusions on what you see.”

Much of the art dates from 2009 and this year. A painting from 2009 shows North Korea’s football team wildly celebrating a win. It was presumably commissioned after the country qualified for the 2010 World Cup.

Titled “Winners,” it shows crowds cheering and footballers waving a giant national flag. In reality, North Korea took one goal against Brazil but then lost 7-0 to Portugal.

All the art comes from the Mansude studio in Pyongyang, the vast workshop of the most favored official artists, who create public art such as patriotic mosaics in the metro.

The organizers said they tried to select works that were not overtly political, however.

“We wanted to show domestic things, Trotsenko said. “We wanted specifically to show daily life.”

She said she got the idea for the exhibition after she visited North Korea as a tourist and went on an excursion to the art studio in Pyongyang.

“There isn’t a single portrait of the Great Leader. Everything here is about private life,” said one of the curators, artist Oleg Kulik.

“We thought it was interesting to do an exhibition that was not ideological,” Kulik added.

Nevertheless, scenes such as those featuring plump babies lying in a hi-tech maternity ward look unlikely in a country where it is feared that malnutrition has stunted generations.

Kulik, an outrageous artist best known for his naked performances as a dog, designed the exhibition’s layout, with pink neon lighting and an installation that shows army helmets hanging over a bowl of rice.

He called it “a metaphor for the condition of North Korea.”

Read the sull story here:
Official art from North Korea comes to Moscow
AFP
1/5/2011

Click image to see the Chinese, Russian, and North Korean piers

UPDATE 5: No more intra-Chinese coal shipments  through Rason have been reported following this 2011 experiment.

UPDATE 4 (2011-6-4): KCNA reports some additional details on the coal being shipped from Hunchun to Shanghai via Rason. According to the article:

It was against this backdrop that China was in the process of transporting 20,000 tons of coal to Rason Port via Hunchun from May 14 and then transporting it to Shanghai by a cargo ship.

Yanbian Ribao, conveying this news on May 18, reported that the Shanghai branches of the Hunchun Mining Group and the Chungjiang Group would transport 500,000 tons of coal to Shanghai by this method this year. This would be tantamount to more than 14,000 truck loads. An official concerned of the Mining Group said that transport of loads to various provinces of Southern China by this method would help sharply cut down the time and transport charges, etc. as compared with the inland transport.

So apparently the 20,000 tonne pilot project what supposed to pave the way for a 500,000 tonne project that never materialized.

UPDATE 3 (2011-1-25): China ships coal from North Korean port for first time. According to Michael Rank:

China has for the first time shipped coal from the North Korean port of Rajin following a deal by a Chinese company to renovate the port, a Chinese website reports.

The 20,000 tonnes of coal, mined in Hunchun, about 80 km north of Rajin, was shipped to Shanghai last month. After going through customs inspection at Hunchun, it was transported by road via the Wonjeongri border post near Dumangang, the report said.

It noted how shipping the coal from Rajin saved the cost of transporting it to the nearest suitable Chinese port of Yingkou or further afield by train and how the deal to renovate and expand Rajin’s no 1 dock would help to boost trade from northeast China more generally.

It said the Dalian-based Chuangli Group reached a deal to lease the dock in 2008 and the following year agreed to renovate it and expand its capacity to one million tonnes a year, although news was not announced until last spring.

But when this reporter visited Rajin last September there was no sign of the port being renovated and expanded, and although a couple of small North Korean vessels were moored at the port, there was little sign of any activity and the area was largely deserted.

China does have ambitious hopes for Rajin, however, and last month a Chinese company, Shangdi Guanquan Investment Co, was reported to have signed a letter of intent to invest $2 billion in an industrial zone in the region.

The Wall Street Journal quoted an assistant to the managing director to Shangdi Guangqun as saying the plan was to develop infrastructure, including docks, a power plant and roads over the next two to three years, followed by various industrial projects, including an oil refinery, over the next five to 10 years. He said the company was waiting for a response from the Pyongyang government before applying for approval from China’s Ministry of Commerce.

“It’s all pending at this stage, and it’s really up to the Korean side to make the decision,” the assistant, named only as Han, said, according to the WSJ. He added that the $2 billion figure was what the North Korean side had hoped for, not necessarily what his company could deliver.

North Korea has implausible dreams of turning the city into an international freight brokerage, export processing and finance hub, and has even made a computerised promotional video about its plans to build glitzy skyscrapers along the seafront.

Photo of Rajin port here.

UPDATE 2 (2011-1-14): According to Every China:

As the first cross-border cargo ship for domestic trade in China, 10,000 tonner “Jinbo”, loaded with 21,000 tons of coal, arrived safely at Shanghai and docked steadily at the pier of Waigaoqiao Terminal at 4 p.m. on January 14. This marked the success of the maiden sail for cross-border domestic trade in our nation.

It is introduced that this 10,000 tonner Jinbo is a freight ship serving for Hunchun Chuangli Shipping Logistics Co., Ltd. of Jilin Province. There was totally 20,000 tons of coal in this cross-border transport produced by Hunchun Mining Group, departing from Hunchun Quanhe Port on December 7, 2010 to Rajin Port of North Korea and cargo concentration in port was accomplished there after one month. Special purpose vessel Jinbo ship docked at No.1 pier of Rajin Port of North Korea at 15 o clock on January 6 this year. The shipment began on 7th and the ship departed from Rajin Port at local time 10:30 on January 11 and arrived safely at the pier of Waigaoqiao Terminal, Shanghai after over 3 days voyage. Currently, related procedures for customs and inspections are in process.

Successive notices on pilot cross-border domestic trade transport in Jilin Province have been issued by General Administration of Customs, Ministry of Transport and General Administration of Quality Supervision, Inspection and Quarantine of the People s Republic of China since last year. Now, the successful arrival of the first cargo ship at the destination is an important achievement gained by Hunchun City or even Yanbian Autonomous Prefecture from implementing the forerunning policy of The Planning Outline of Cooperation in the Exploitation of Tumen River Zone, China. It is also a significant breakthrough in new international land-sea joint transport passage of Hunchun City or even Jilin Province, marking a crucial progress in the Launching out to sea through borrowed port strategy of Jilin Province.

Not only the coal resource of Hunchun City, but also that of Heilongjiang Province, closely adjacent to Yanbian area, can be transported to South China after Rajin Port exit is available. Because of the relatively low transport cost compared with that of other ports at home, this sea passage may become the Golden Passage for transporting coal from the north to the south until then.

UPDATE 1 (2011-2-22): According to the China Daily:

A city in Northeast China is aiming to import coal from the Democratic People’s Republic of Korea (DPRK) as part of its effort to establish an international coal production base in the border area.

Hunchun, a city wedged between the DPRK and Russia, has coal reserves of 1.2 billion tons, and supplies the fuel to Jilin, Liaoning, Jiangsu and Shangdong provinces. It currently produces about 6 million tons of coal annually.

“We plan to raise our production to more than 10 million tons a year by importing and exploiting coal both from the DPRK and Russia,” said a senior Hunchun city official, who declined to be named.

In January, coal was shipped for the first time from Hunchun to Shanghai via the DPRK port of Rajin, following a deal made by a Chinese company to renovate that port.

The 20,000 tons of coal mined in Hunchun reached Shanghai in three days in the transportation trial. Normally, it takes more than 10 days to transport that amount of coal by train from Hunchun to Shanghai.

“We will try to deliver coal by this new shipping route in the future, because it saved a lot of money in transportation costs,” the government officer said.

The city government also intends to transmit the electricity power generated by its coal-fired power plant to the DPRK.

China has been striving to establish an international sea route through the two countries to boost bilateral trade.

Dalian-based Chuangli Group invested 30 million yuan ($4.6 million) in improvements to Rajin last year, according to officials.

The Dalian group expanded the port’s annual shipping capacity to 1 million tons last year, after reaching a deal to lease and reconstruct it in 2009.

Hunchun officials said the city’s foreign trade volume has quadrupled in the past three years, thanks to improved international shipping.

By taking advantage of cross-border energy production and transportation, Huchun expects its coal production to rise by 22 percent during the 12th Five-Year Plan (2011-2015).

The Seoul-based Yonhap News Agency reported earlier that the DPRK plans to cooperate with Chinese enterprises on exploiting mineral resources in Hamgyeongbuk-do in the DPRK, which has about 200 million tons in coal reserves.

ORIGINAL POST (2011-1-4): Rason is being used to transport coal from Hunchun to Shanghai. According to the Choson Ilbo:

In official confirmation that closer China-North Korea business ties have come to fruition, the state-run Xinhua news agency and local media in Jilin on Monday said China has transported 20,000 tons of coal from a mine in Jilin to Shanghai and Ningbo through North Korea’s Rajin-Sonbong Port since Dec. 7.

The coal produced in Hunchun was carried by some 570 35-ton trucks across the Duman (or Tumen) River and transported to the port along a 60 km unpaved road between Hunchun and Rajin-Sonbong.

A source in Hunchun said, “Since a month ago, dozens of trucks a day have been going to the North” through Quanhe Customs Office.

The abundant coal deposits in the northeastern China are mainly used for heating homes in southern China in winter, but with no access to the East Sea, China had to transport it overland to Yingkou Port in the Bohai Bay, some 800 km to the west, incurring logistical costs.

China has long tried to get the right to use Rajin-Sonbong and Chongjin ports in North Hamgyong Province in North Korea in a bid to secure an East Sea route.

In 2009, Chuangli Group, an environmental facilities manufacturer in Dalian, obtained the right to use a pier in the Rajin-Songbong port for 10 years in collaboration with a North Korean trading company. Another Chinese firm in Tumen is also reportedly seeking the right to use Chongjin Port.

Prof. Yoon Seung-hyun of Yanbian University said Chongjin Port, has better facilities than Rajin-Sonbong. “The North is more open and aggressive” because it is groaning under international sanctions and aid from South Korea has dried up, he added.

Recent posts on Rajin (Rason) can be found here.

Read the full story here:
Chinese Shipping Through N.Korean Port in Full Swing
Choson Ilbo
2011-1-4

According to the Daily NK:

North Korean trading companies operated by several organs have been selling steel to China in exchange for food.

One Chinese trader who does business with North Korea reported to The Daily NK on Monday, “China-based North Korean workers in charge of trading with China for Cheongusan Trading Company (under the Escort Command), say that this year Chosun is expanding the volume of its steel sales with China.”

The trader said, “In November last year, the analysis table of steel quality was delivered to us, and accordingly a contract has also already been signed.” He added, “In Chosun, the company is waiting for a permit to trade from an upper organ after having loaded materials on freight trains.”

He explained further, “For the price of the steel, Chosun has asked for rice, flour, noodles and also construction materials,” adding, “Food in bulk can enter Chosun.”

He explained that since North Korea is facing a serious lack of food, cement and other construction materials due to isolation from the international community, the country is trying to barter steel for food with China, from which the North is able to import.

Another trader in China verified the story, explaining, “Recently in Dandong, workers from Kangsung General Trading Company (under the General Staff) and other companies visited China for the purpose of selling steel.”

He added, “From now on, our company is going to do only steel trade with Chosun. We have decided not to do business in other things because our experiences have shown that there is no credit there.”

He went on, “North Korean trading units may have suffered from limitations put on items by Chinese companies,” going on, “If Chosun does not make a deal with us, they will starve to death this year. Even though they emphasize independent rehabilitation, when have they ever been rehabilitated?”

North Korea’s media frequently emphasizes the glorious production of “Juche” steel at Kim Chaek Steel Mill and Gangsun Steel Mill. Indeed, the Common Editorial issued on the first day of this year stated that, “By the power of the realization of the faith and model of Kim Steel (steel from Kim Chaek Steel Mill) and Juche steel, let’s have waves of victories.”

According to KOTRA, South Korea’s trade statistics agency, from January to October, 2010, North Korea exported steel to China worth $82 million.

One potentially positive aspect to this story is the recognition by the DPRK of the benefits of comparative advantage in trade.  Rather than aiming to produce all of its own food, the DPRK can instead specialize in steel production and trade for Chinese produced food.  Through trade, China and the DPRK could both consume more steel and food than if each country practiced autarchy.  Unfortunately the DPRK’s recent history has demonstrated a callous disregard for comparative advantage and has instead focused on increasing domestic food production and aid while limiting international trade.  Lets hope to see more rational policies prevail in the future.

Read the full story here:
North Korea Bartering Steel for Food
Daily NK
Im Jeong Jin
1/3/2011

According to the New York Times:

But on Sunday, The Associated Press reported, North Korean television audiences were given a rare break from this routine when the British comedy “Bend It Like Beckham” was shown there. The film, which stars Parminder Nagra as a young woman from a Sikh family with dreams of soccer stardom; Keira Knightley as her best friend; and Jonathan Rhys Meyers as the dreamy coach they both have eyes on, was shown over the weekend by the arrangement of the British Embassy. According to the BBC, a message was shown during the film saying that the broadcast was done to mark the 10th anniversary of diplomatic ties between North Korea and Britain.

In a message on his Twitter account, Martin Uden, the British ambassador to South Korea, wrote: “Happy Christmas in Pyongyang. On 26/12 Bend it like Beckham was 1st ever western-made film to air on TV.” The A.P. said the North Korean broadcast of the two-hour movie was only an hour long, so please, no spoilers about the film’s subplots about religion and sexuality, or which of the women Mr. Rhys Meyer’s character ultimately chooses.

UPDATE from a Koryo Tours newsletter:

In 2004 Koryo Tours together with Ealing Studios and the British Embassy screened the film Bend it Like Beckham at the Pyongyang International Film Festival, it was seen by over 12,000 Pyongyang citizens and was the film they raved about…during the festival we were inudndated with requests for tickets from the Yanggakdo hotel staff. During the film the coach tells the heroine of the film to make a decision about her life…and this was translated as her following the Juche way!

In 2009 Koryo Tours was asked by the British Embassy in Pyongyang to assist with ideas for marking 10 years of diplomatic relations- and football was what we came up with. In October 2010 we took Middlesbrough Women’s football team to play two local Korean sides (to a total of 14,000 fans and nationwide tv broadcast) and on Boxing Day the film Bend It Like Beckham was broadcast in Pyongyang- and that is a massive ‘first’ with everyone in Pyongyang talking about it!

Our colleague Hannah Barraclough is working on bringing over the April 25th women’s team in 2012 to play in Europe. If you want any details or have any ideas on how to help with this project please let us know.

Here is a link to the ambassador’s Twitter feed.

To be honest, I am not sure about the claim that it is the first western-made film shown on DPRK TV. I know that the Bonner/Gordon film The Game of Their Lives was shown unedited on DPRK television, though it is about the DPRK and they were involved in the filming.  Tom & Jerry is on DPRK TV to this day, though it is not a film. Titanic was shown in DPRK cinemas.  Any other examples?

Read the full story here:
North Korea Gets a Special Kick Out of ‘Bend It Like Beckham’
New York Times
Dave Itzkoff
12/20/2010

Image from KCTV via Yonhap

According to Yonhap:

North Korea has deployed new battle tanks and bolstered the size of its special forces by 20,000 over the past two years, deepening the threat of unconventional warfare against South Korea, the South’s new defense white paper said Thursday.

The biennial defense paper also defined the North Korean regime and its military as the “enemy” of South Korea, a description stronger than before but short of reviving the symbolic tag of “main enemy” for the communist neighbor.

The new white paper was released as the South’s military resolved to strike back hard against future provocations by the North, which last month bombarded the South’s front-line island of Yeonpyeong, killing two marines and two civilians.

“Threats from North Korea’s asymmetric warfare capabilities such as special forces, artillery pieces and weapons of mass destruction have been on a steady rise since 2008,” Deputy Minister Chang Kwang-il told reporters.

Military officials here have said the North is increasingly focused on unconventional or “asymmetric” weapons, such as improvised explosives or low-cost missiles because the regime knows its aging conventional weapons are no match for the technologically superior South Korean and U.S. forces

The white paper confirmed for the first time that North Korea deployed its new battle tank, called the “Pokpung-ho,” which in Korean means “Storm Tiger,” believed to have been developed in the 1990s based on the Soviet Union’s T-72 tanks.

The North’s new tank is presumed to be equipped with either a 125- or 115-millimeter main gun, similar to that of the T-50 battle tank of the Russian Army, defense ministry officials said.

The paper didn’t say how many of the new tanks North Korea has “deployed for operational use,” but said the number of North Korean tanks rose to some 4,100 units as of November this year, from 3,900 in 2008.

Also, the paper said the number of lightly equipped North Korean special forces, who are trained to quickly infiltrate South Korea, increased to 200,000 from 180,000.

Overall, the total number of North Korean soldiers remained unchanged at about 1.19 million, but the North has reorganized its military to add four new divisions, the paper said.

Although its number of artillery pieces changed little over the past two years, its 170mm self-propelled artillery and 240mm multiple rocket launchers deployed on the front line are capable of carrying out a “massive surprise bombardment” on the South Korean capital of Seoul and its neighboring areas, the paper said.

North Korea is “presumed to have secured about 40 kilograms” of weapons-grade plutonium by reprocessing spent nuclear fuel rods four times by 2009, the paper said.

Concerns about the North’s nuclear weapons program deepened last month when Pyongyang, which conducted two nuclear tests in 2006 and 2009, revealed a uranium enrichment facility to a visiting U.S. scientist. The uranium enrichment program could give the North a second route to build a nuclear bomb.

“Given that North Korea claimed that some 2,000 centrifuges are operational in November 2010, the North is presumed to have pushed for the highly enriched uranium (HEU) program,” the paper said.

Early this week, Chang told reporters that his ministry decided not to revive the “main enemy” tag for the North to “minimize controversy,” because the defense white paper is an official government document that is “used internally and externally.”

Thursday’s defense paper clarified that the “North Korean regime and military are our enemy” that poses a “grave threat” to the South’s security by “staging military provocations such as the torpedo attack on the Cheonan warship and the shelling on Yeonpyeong Island.” Forty-six sailors were killed when the North allegedly torpedoed the Cheonan warship in March in the Yellow Sea.

“Not using the expression ‘main enemy’ does not mean that we softened our stance,” Chang said.

The new description is aimed at sending a strong message of warning to the North and clarifying that the North Korean regime and its military, not the people, are aggressors, according to the official.

South Korea first used the label “main enemy” for North Korea in its 1995 white paper after North Korea threatened to turn Seoul into a “sea of fire” a year earlier. Seoul stopped using the expression in 2004 in an apparent bid not to antagonize Pyongyang amid then-thawing ties.

In its defense paper published in 2008 under the government of President Lee Myung-bak, South Korea called North Korea an “immediate and grave threat” to its national security.

The two Koreas are still technically at war because the 1950-53 Korean War ended in a truce, not a peace treaty. About 28,500 U.S. troops are stationed in the South, a legacy of the three-year war.

The New York Times has more.

Additional information:
1. This web page does not focus on military affairs (except when it overlaps with Google Earth research or broader economics), but I have put some military information resources here for the convenience of readers.  Please let me know if anything should be added.

2. I have kept a chronological list of Yonpyong stories here.

3. I have kept a chronological list of stories related to the DPRK’s new uranium facilities here.

Read the full story here:
N. Korea deploys new battle tanks, boosts special forces
Yonhap
Kim Deok-hyun
12/30/2010

The Choson Ilbo begins this story with “Rumor has it”….

Rumor has it that China is getting directly involved in the development of North Korea’s Rajin-Sonbong Port, once the center of the UN Development Programme’s Duman (or Tumen) River project in 1991. A source in Beijing said Wednesday, “As far as I’m aware, North Korea and China’s Commerce Ministry recently signed a memorandum of understanding outlining Beijing’s investment of US$3.5 billion over five years beginning next year” in the special economic zone there. The source said China is investing in roads, ports and gas facilities in the region.

The Rajin-Sonbong area, at the mouth of the Duman River, is a strategic point of economic cooperation between the two countries, but neither bank is Chinese territory. One side is in North Korea and the other in Russia, so to get to the East Sea China had to borrow a port from either side. China did nothing about the UNDP initiative in the 1990s, but since the mid-2000s, it has set its eyes on the area.

North Korea for some reason rented out the best equipped dock there to Russia in 2008 but since last year it has been seeking investment from China to overcome dried-up aid from South Korea amid international sanctions. North Korean leader Kim Jong-il urged Chinese President Hu Jintao when he visited China in May this year to invest in the region.

But the rumor of direct investment from the Chinese government has not been confirmed. One diplomatic source in Beijing said, “I’ve heard nothing about the Chinese Commerce Ministry’s direct involvement in negotiations. It’s just one of many rumors since North Korea became active in developing the Rajin-Sonbong area.”

UPDATE from the Choson Ilbo:

Chinese officials with close ties with North Korea say the North has used to demand hard cash for business deals but is now taking a more flexible approach. The Global Times, a sister publication of the People’s Daily, published a series of reports Saturday about the Rajin-Sonbong special economic zone of North Korea.

It said street lights and neon signs powered by windmills have appeared in the region, which had earlier been pitch dark at night, while the previously ubiquitous soldiers have vanished.

North Korea allowed 4,000 Chinese residents in the area to rent commercial property and agreed to designate an area in the Rajin-Sonbong special economic zone to be jointly administered by the two countries.

North Korea had offered China to develop one or two islands in the estuary of the Apnok River on a 50-year lease, but when China demurred it apparently offered a 100-year lease and even allowed construction of golf courses and other recreational facilities.

…

Many private Chinese companies are reticent about investing in North Korea. Not only is there a lack of business laws to protect their investment, there are also too many political uncertainties. As a result, the Chinese government is not playing a very active role. In the case of the bridge across the Apnok River, North Korea apparently wanted Chinese state-run companies to take part in construction, but Beijing declined.

One source in Beijing said some Chinese companies are showing great interest in developing the Rajin-Sonbong area, but most are biding their time. “Chinese businesses still don’t seem to trust the sincerity of North Korea’s desire to open up its economy,” the source added.

Additional Information:
1. The Chinese and Russians currently lease docks at Rajin. You can see a satellite image of them here.

2. Here is more information on China’s 10-year lease of Rajin.

3. Here is information on the Yalu Islands China is reportedly leasing.

4. The Russians are also building Russian gauge railway line from the Russian border to the port in Rajin.

5. Here are all previous Rajin (Rason)posts

Read the full stories here:
Beijing ‘Pouring Money into N.Korea’s Special Economic Zone’
Choson Ilbo
12/30/2010

N.Korea’s Cross-Border Business with China Picking Up
Choson Ilbo
12/30/2010

According to Yonhap:

Closing a tense year in cross-border relations, North Korea is faxing New Year’s greetings to South Koreans likely to support the resumption of cross-border aid next year, an official said Thursday.

A total of 35 organizations, including local governments near the border with the North, and 15 South Korean activists, have so far received such faxes, the government official said, asking not to be identified by post or name.

North Korea has often used fax documents this year to deny its involvement in the deadly March sinking of a South Korean warship and its responsibility for the artillery exchange between the two countries in the Yellow Sea in November.

Two South Korean marines and two civilians were killed in the artillery attack on the island of Yeonpyeong. The latest North Korean fax offensive did not refer to the attack, but contained calls for the South to honor their past two summit deals promising economic aid and cooperation for the North, the official said.

“We are here sending New Year’s greetings. We wish you success in your patriotic activities toward the reunification of the (Korean) nation and the defense of peace and stability under the banner of the inter-Korean declarations,” the fax was quoted as saying.

North Korea has sent similar faxes to South Korea annually since 2001, according to the official. The two countries held their first summit in 2000, and the second one took place in 2007.

The official said the recipients this year included the Incheon city government and the Gangwon provincial government, both of which are headed by liberals supporting assistance to North Korea.

“The North also appears to be trying to create a rift and trigger an anti-government struggle among us,” the official said.

The ties between the Koreas deteriorated after a conservative government took power here in early 2008, suspending unconditional aid and pushing the North harder to take denuclearization steps.

The two Koreas remain technically at war after the 1950-53 Korean War ended in a truce rather than a peace treaty. South Koreans are banned by law from contacting North Koreans without prior approval.

Read the full story here:
N. Korea faxing New Year’s greetings to S. Koreans
Yonhap
Sam Kim
12/30/2010

According to Yonhap:

South Korea has spent only 5.6 percent of its funds earmarked for promoting humanitarian and economic ties with North Korea this year, the unification ministry said Sunday, as inter-Korean relations tumbled to their worst in decades.

As of the end of November, the ministry said it had endorsed spending worth some 62.6 billion won (US$54.4 million) from its South-North Cooperation Fund, or 5.6 percent of the total allocated for this year.

Just over half the sum, or about 32.8 billion won, went toward financing loans for inter-Korean trade and economic cooperation, while another 27.8 billion won was spent on improving exchanges among families separated across the border and other humanitarian projects.

The low spending rate apparently reflects the ban on cross-border exchanges following the deadly March sinking of a South Korean warship, blamed on a North Korean torpedo attack, and escalated tensions on the peninsula since the North’s artillery attack on a southern island last month.

The fund’s implementation rate ranged from 37 to 92.5 percent between 2000 and 2007, but nosedived after President Lee Myung-bak took power in 2008 with a hard-line policy on the North. That year, the rate stood at 18.1 percent before dropping further to 8.6 percent in 2009.

Read the full story here:
S. Korea spends 5.6 pct of inter-Korean cooperation fund
Yonhap
12/26/2010

According to the Choson Ilbo:

The European Union has decided to renew and extend its list of people and entities in North Korea who are subject to restrictive measures.

One individual and six entities were added to the list due to their involvement with the North’s nuclear arms program or other weapons-related activities.

The measures include both a visa ban and an asset freeze. The list, which currently contains 18 individuals and 12 entities, was published in the EU Official Journal on Thursday.

The EU says “the decision also limits financing activities and trade” with Pyongyang, particularly of arms and related materials that could be used in the development of weapons of mass destruction.

The official EU publication, featuring all of the specifics, can be found here (PDF).

Read the full story here:
EU Extends Visa Bans and Asset Freezes on N.Korea
Choson Ilbo
12/24/2010