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S. Korea to complete fertilizer aid to N. Korea late this month

Monday, June 11th, 2007

Yonhap
6/11/2007

South Korea will complete shipments of 300,000 tons of fertilizer aid to North Korea late this month, the Unification Minister said Monday.

“As of last week, 233,800 tons of fertilizer had been shipped to North Korea. By June 20, the planned shipments will be completed,” said a ministry official on the usual condition of anonymity.

South Korea resumed shipments of fertilizer and other emergency aid to the North in late March, but it withheld rice aid as an inducement for North Korea to fulfill its promise to shut down its main nuclear reactor as part of the landmark February 13 agreement.

South Korea suspended its food and fertilizer aid to North Korea after the North conducted missile tests in July. Resumption of the aid was blocked due to the North’s nuclear bomb test in October.

According to a recent think tank report, North Korea could run short of up to one third of the food it needs this year if South Korea and other countries withhold aid.

Data from the World Food Program and the Unification Ministry show that the North will need between 5.24 million tons and 6.47 million tons of food this year. Depending on the weather, the availability of fertilizer and other factors, the communist state may only be able to produce 4.3 million tons of food by itself, the report said.

Posted in Agriculture, Foreign aid statistics, International Aid, RoK Ministry of Unification, South Korea, UN World Food Program | Comments Closed

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

Thursday, May 24th, 2007

Yonhap
5/24/2007

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

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

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

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

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

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

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

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

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

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

Koreas, Russia to Discuss Rail Link

Thursday, May 17th, 2007

Korea Times
Kim Yon-se
5/17/2007

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

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

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

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

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

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

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

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

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

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

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

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

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

Posted in Railways, Russia, South Korea | Comments Closed

Agency to give the North raw goods

Tuesday, May 15th, 2007

Joong Ang Daily
Lee Young-jong
5/15/2007

With a one-time test run of an inter-Korean railroad set this week, South Korea’s Ministry of Unification said yesterday it will create an organization designed solely to provide $80 million worth of raw materials to North Korea.

The South promised to provide the materials, for light industry, in return for security assurances over the inter-Korean train line.

South Korea hopes the line will be permanent, but North Korea has only agreed to one test run.

The new organization will be jointly operated by related South Korean government agencies, Unification Ministry spokesman Kim Nam-sik said in a briefing yesterday. The agency will also represent South Korea in talks with the North over the joint development of a mine in North Korea.

The government is scheduled today to hold a meeting hosted by Unification Minister Lee Jae-joung to endorse a 2 billion won yearly budget for the organization, Kim said. The money will come from the Inter-Korean Cooperation Fund.

“The fund the government will provide to the organization is a kind of commission for doing state affairs instead of the government,” Kim said.

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

Koreas fail to agree on details for swapping of raw materials, resources

Thursday, May 3rd, 2007

Yonhap
5/23/2007
Koreas fail to agree on details for swapping of raw materials, resources

South and North Korea on Wednesday failed to settle remaining differences over how to boost cooperation in light industry and natural resource development, the Unification Ministry said.

“The two sides just agreed to continue to discuss details regarding the issue,” the ministry said in a statement. The ministry did not provide details about when they will meet again.

Working-level officials could not agree on the list and price of raw materials the South is to provide the North in exchange for the right to develop natural resources in the communist country.

The North called for more than the South has earmarked for the shipment on the last day of the two-day talks held in the North Korean border city of Kaesong, according to South Korean officials.

Last month, South Korea agreed that it will provide raw materials to the North in June to help revive its threadbare light industry in return for the North’s natural resources. The two Koreas reached a similar swapping agreement in 2005, but it has not been implemented due mainly to the North Korean nuclear dispute.

In the agreement, the rice shipment, which will consist of 150,000 tons of domestic rice and 250,000 tons of imported rice, will be sent to the North late this month in the form of a loan to be paid back over the next 30 years with a 10-year grace period. Seoul hopes to link it with Pyongyang’s promise to take initial steps toward nuclear disarmament.

Last Tuesday, the South Korean government endorsed the spending of funds needed to provide rice and raw materials for light industry to North Korea. The South’s planned shipment of 400,000 tons of rice is worth US$170 million, while the provision of raw materials for light industry is worth $80 million.

In 2005, South Korea agreed to offer raw materials to the North to help it produce clothing, footwear and soap starting in 2006. In return, the North was to provide the South with minerals, such as zinc and magnesite, after mines were developed with South Korean investments guaranteed by Pyongyang.

But the economic accord was not implemented, as North Korea abruptly cancelled the scheduled test runs of inter-Korean railways in May last year, apparently under pressure from its powerful military.

Last Thursday, two trains crossed the Military Demarcation Line for the first time since the end of the 1950-53 Korean War. But critics said the test run of two railways, one in the east and the other in the west, is not likely to lead to the formal opening of the railways or to rail services for a joint industrial complex in Kaesong or for tours of the North’s Mount Geumgang.

As part of efforts to accelerate the formal opening of the inter-Korean rail service, the South plans to sound out the possibility of providing raw materials via reconnected railways during the working-level dialogue or the upcoming ministerial talks.

Koreas hold talks on swapping of raw materials for light industry
Yonhap
5/22/2007

South and North Korea on Tuesday held talks to work out details for boosting cooperation in light industry and natural resource development, the Unification Ministry said.

The aim of the working-level dialogue, being held in the North Korean border city of Kaesong for two days until Wednesday, is to focus on procedures for the South’s shipment of raw materials to the North in exchange for the right to develop North Korea’s natural resources.

During the talks, South and North Korea are scheduled to exchange agreement documents, which will then take effect immediately since the two sides successfully conducted test runs of cross-border railways, a precondition for the implementation of the accord, government officials said.

The South also plans to sound out the possibility of providing the materials via reconnected railways in a prelude to the formal opening of the inter-Korean rail service, according to sources.

“We are studying various ways of speeding up the formal opening of the Gyeongui (Seoul-Sinuiju) and Donghae (East Coast) tracks. The use of the tracks for the promised shipment of light industry raw materials could be an option,” a government source said, asking to remain anonymous because of the sensitivity of the issue.

On Thursday, trains crossed the Military Demarcation Line for the first time since the end of the 1950-53 Korean War. But critics said the test run of two railways, one in the east and the other in the west, is not likely to lead to the formal opening of the railways or to rail services for a joint industrial complex in Kaesong and tours of the North’s Mount Geumgang.

Earlier this month, South Korea said it will ship the first batch of light industry materials to the North via ship on the Incheon-Nampo route, but the mode of transportation for the rest has yet to be decided.

Last month, South Korea agreed that it will provide raw materials to the North in June to help revive its threadbare light industry in return for its natural resources. The two Koreas reached a similar swapping agreement in 2005, but it has not been implemented due mainly to the North Korean nuclear dispute.

But the economic accord was not implemented, as North Korea abruptly cancelled the scheduled test runs of the railways in May last year, apparently under pressure from its powerful military.

Posted in Foreign aid statistics, International Aid, International trade, Light Industry, Mining/Minerals, Railways, Sea shipping, South Korea, Transportation | Comments Closed

The North Korean Economy: Between Crisis and Catastrophe

Thursday, May 3rd, 2007

American Enterprise Institute Book forum
4/17/2007

A couple of weeks ago, I had the opportunity to attend a book forum at the American Enterprise Institute on Nicholas Eberstadt’s new book, The North Korean Economy: Between Crisis and Catastrophe. It was very informative to hear three different perspectives on the direction of North Korea’s economic reform.

Panelists included:

Nicholas Eberstadt, AEI
Andrei Lankov, Kookmin University
Deok-Ryong Yoon, Korea Institute for International Economic Policy

In summary, Mr. Eberstadt and Mr. Lankov are pessimistic about the North Korean leadership’s desire to enact reforms–knowing that information leakages will undermine their political authority. As Mr. Lankov pointed out, the North Korean nomenklatura are all children and grandchildren of the founders of the country who are highly vested in the current system. They have no way out politically, and as such, cannot reform.

They argue that the economic reforms enacted in 2002 were primarily efforts to reassert control over the de facto institutions that had emerged in the collapse of the state-run Public Distribition System, not primarily intended to revive the economy. Lankov does admit, however, that North Korea is more open and market-oriented than it has ever been, and Mr. Yoon was by far the most optomistic on the prospects of North Korean reform.

Personally, I think it makes sense to think about North Korean politics as one would in any other country–as composed of political factions that each seek their own goals. Although the range of policy options is limited by current political realities, there are North Koreans who are interested in reform and opening up–even if only to earn more money. In this light, even if the new market institutions recognized in the 2002 reforms were acknowledged only grudgingly, they were still acknowledged, and their legal-social-economic positions in society are now de jure, not just de facto. The North Korean leadership might be opposed to wholesale reform, but that is economically and strategically different than a controlled opening up on an ad hoc basis–which is what I believe we are currently seeing. Anyway, dont take my word for it, check out the full commentary posted below the fold:

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Posted in Arms shipment, Black markets, China, Counterfeiting, Drug smuggling, Economic reform, Energy, Fiscal & monetary policy, Foreign direct investment, General markets (FMR: Farmers Market), Illicit activities, International Aid, Kaesong Industrial Complex (KIC), Mt. Kumgang Tourist Special Zone, Price liberalization, Rason Economic and Trade Zone (Rajin-Sonbong), Sinuiju Special Administrative Region, South Korea, Special Economic Zones (Established before 2013), UN Security Council, USA | Comments Closed

S. Korea proposes joint exploration of N. Korean mines: S. Korean official

Wednesday, May 2nd, 2007

Yonhap
5/2/2007

South Korea on Wednesday proposed a joint survey of two North Korean mines in part of efforts to facilitate cross-border economic exchanges, a South Korean official said.

The proposal was made when working officials of the two Koreas met in the North Korean border city of Kaesong to discuss the South’s agreement to provide the North with raw materials in return for natural resources, said the official at the Unification Ministry.

The South suggested the two Koreas conduct a joint exploration of mines in the mountains of Ryongyang and Geomdeok, both in the North’s northeast Hamkyong Province, the official said on condition of anonymity.

“The two mines are the best place for cooperative projects for underground resources both economically and geographically,” the official said, adding Ryongyang is rich in magnesite and Geomdeok in lead and zinc.

Last month, South Korea agreed to provide raw materials worth US$80 million to the North to help it produce clothing, footwear and soap in exchange for its natural resources. Wednesday’s meeting was the first of two-day talks, with both sides sending an eight-member delegation.

The two Koreas reached a similar swapping agreement in 2005, but it has never been implemented amid the North Korean nuclear dispute.

Posted in International trade, Mining/Minerals, South Korea | Comments Closed

Uri Party lawmakers leave for N. Korea to propose new economic projects

Wednesday, May 2nd, 2007

Yonhap
5/2/2007

A group of lawmakers from the pro-government Uri Party left for North Korea on Wednesday with a package of new proposals to boost economic and sports exchanges, including the construction of a second joint industrial park.

The five-member delegation, accompanied by agricultural and coal industry officials, will meet with top North Korean officials, including the North’s No. 2 leader Kim Yong-nam, during its four-day visit until Saturday, party officials said.

High on the agenda of the meetings will be the South’s proposals to create another South Korea-developed industrial complex such as one under operation in Kaesong; designate the mouths of the North’s Imjin River and the South’s Han River as a “joint security area”; and jointly collect sand from their beaches and build a cross-border canal linking Seoul and Kaesong.

The sides will also discuss the North’s proposed entry into the International Monetary Fund and the World Bank, the hosting of a joint academic forum and the possibility of North Korean footballers playing in the South Korean professional league, he said.

“I hear some critics asking what right our party has to do this, but we can play a role as a messenger between officials of the South and the North about important current issues,” Rep. Kim Hyuk-kyu, the delegation’s leader, said before departing at Incheon International Airport.

There have been a series of visits to North Korea by Uri Party lawmakers in recent months, prompting speculation that they were laying the groundwork for a summit between President Roh Moo-hyun and North Korean leader Kim Jong-il. The first and only inter-Korean summit, which took place in 2000, generated a series of economic and cultural exchanges.

Kim said the summit issue was not on the agenda, but acknowledged the delegation will respond if Pyongyang brings it up.

Accompanying the lawmakers are Nam Kyong-woo, livestock director of the National Agricultural Cooperative Federation, and Kim Weon-chang, head of the state-run Korea Coal Cooperation.

Posted in Agriculture, Coal, Football (soccer), International trade, South Korea, Special Economic Zones (Established before 2013) | Comments Closed

Burma, North Korea restore diplomatic ties

Friday, April 27th, 2007

Joong Ang Daily
ser Myo Ja
4/27/2007

North Korea and Burma, two of the world’s harshest dictatorships, agreed yesterday to restore diplomatic ties 24 years after Pyongyang was implicated in a deadly bomb attack which targeted South Korean President Chun Doo Hwan, who was visiting Rangoon.

North Korea’s vice foreign minister, Kim Young-il, arrived in Rangoon, the former capital of Burma, also known as Myanmar, on Wednesday. Kim and Kyaw Thu, Burma’s deputy foreign minister, signed an agreement yesterday to reestablish relations between the two countries, Thu said.

The specifics of the agreement were not released.

The October 9, 1983 bombing was one of the most audacious acts of terror ever attributed to a nation-state. During an official visit, Chun planned to lay a wreath at a mausoleum dedicated to Aung San, the founder of modern Burma. Chun was delayed by traffic, but 21 people were killed, including three Korean cabinet ministers, when bombs in the roof of the mausoleum exploded. Burma quickly blamed the attack on North Korea.

Shortly after the bombing, Burmese authorities arrested three North Korean agents, one of whom killed himself. The other two were convicted and sentenced to death. Jin Mo was executed in 1985, but Kang Min-chol’s sentence was reduced to life in prison because he confessed.

Kang, 51, has been held at Insein prison near Rangoon. Irrawaddy, a magazine published by Burmese exiles, reported in its current issue that Kang did not wish to return to either Korea if he is released from prison. A former inmate told the magazine, “Kang said he did not want to go to the North because he would be treated as a traitor and he did not want to go to the South because he would be punished for the terror.”

North Korea has denied responsibility for the incident, claiming that it was a South Korean conspiracy to frame the North.

South Korea respects Myanmar’s decision to restore ties with N. Korea
Yonhap
4/26/2007

South Korea respects Myanmar’s decision to restore diplomatic ties with North Korea, a government spokesman said Thursday.

The spokesman said that South Korea expects the reestablishment of diplomatic relations between the two countries after 24 years will provide momentum for North Korea’s opening and contribute to peace and stability in the region.

Myanmar severed ties with North Korea following a bomb attack by North Korean agents on the entourage of then South Korean President Chun Doo-hwan at the Aung San Mausoleum in Yangoon in October 1983.

Meanwhile, North Korea confirmed foreign news reports that the two sides agreed to reopen diplomatic relations, quoting a joint communique on the reestablishment of diplomatic relations between the DPRK and the Union of Myanmar.

DPRK is the acronym for Democratic People’s Republic of Korea, the North’s official title.

The North’s official Korean Central News Agency reported, “According to the joint communique, the government of the Democratic People’s Republic of Korea and the government of the Union of Myanmar, desirous of developing friendly relations and bilateral cooperation between the two countries and peoples, based on the principles of respect for each other’s sovereignty, non-interference in their internal affairs, and equality and mutual benefit, as well as the norms of international law and the objectives and principles of the United Nations Charter, have agreed to reestablish diplomatic relations at the ambassadorial level in accordance with the provisions of the Vienna Convention on Diplomatic Relations of 18th April 1961.”

Posted in Myanmar, South Korea | Comments Closed

Gaeseong to be exempt from labor laws

Sunday, April 22nd, 2007

Korea Herald
4/23/2007

South Korea and the United States have agreed not to apply International Labor Organization regulations to an inter-Korean industrial park in North Korea’s border city of Gaeseong, a South Korean lawmaker claimed yesterday.

Kim Won-woong, head of the National Assembly’s unification, foreign affairs and trade committee, said the Gaeseong industrial park is certain to remain an exception to the ILO’s labor rules, paving the ground for Seoul and Washington to designate Gaeseong as an “outward processing zone” (OPZ) on the Korean peninsula.

Gaeseong, located just north of the inter-Korean border, currently houses 23 manufacturing plants, which combine South Korea’s capital with North Korea’s cheap labor.

Under an FTA deal concluded at the beginning of this month, South Korea and the United States agreed to set up a joint OPZ review committee that will identify areas in North Korea that might be designated as OPZs and consider their qualifications if they meet the necessary criteria, including labor and wage practices. But the labor sector was expected to pose a dilemma as North Korea is not a member of the ILO, which stipulates three basic labor rights, namely the right to unionize, collective bargaining and industrial action.

“South Korea and the United States agreed to consider North Korea’s non-ILO member status and unique labor circumstances in the designation of OPZs in the communist state,” said Kim, citing a document he obtained from the Foreign Affairs and Trade Ministry.

In related news, the two Koreas agreed yesterday at the 13th economic cooperation talks in Pyongyang to continue discussing how to fortify the operations at the industrial complex from next month.

Gaeseong park is considered a signature inter-Korean project symbolizing the efforts of expanding exchanges.

South Korea, under the engagement policy of President Roh Moo-hyun, aims to gradually open up North Korea towards market economy for an eventual reform.

Posted in Economic reform, International trade, Kaesong Industrial Complex (KIC), Labor conditions/wages, Light Industry, Manufacturing, South Korea, USA | Comments Closed

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