Archive for the ‘South Korea’ Category

North Korea joins in World Cup fever

Friday, June 9th, 2006

Yonhap
Kim Hyun
6/9/2006

North Korea, which has shunned Western entertainment, has given in to World Cup fever and started efforts to satiate people in the country who yearn to watch the imminent tournament.

Pyongyang is seeking to broadcast World Cup matches live across the country with Seoul’s support. North Korea’s state-run broadcaster, Korean Central Broadcasting Station (KCBS), sent a letter to the Korean Broadcasting Commission of South Korea last month asking it to share its World Cup footage with the North that could not pay for the broadcast rights. The request came as the Koreas were politically at odds over testing of newly connected inter-Korean railways.

The South Korean broadcasting commission is in talks with FIFA as part of efforts to assist with Pyongyang’s request, said a public affairs official in the broadcasting commission requesting anonymity because a contract had not yet been signed.

When the deal is reached early next week with FIFA and its Switzerland-based business representative Infront Sports & Media, the North will be able to provide its people with a live broadcasts of the games via satellite from Seoul, the commission official said.

North Korea has candidly expressed on its television programs its people’s desire to watch the football tournament. A KCBS announcer said, “This year’s World Cup competition will really be worth seeing.”
Pyongyang has published four kinds of stamps in commemoration of the tournament, according to the (North) Korean Central News Agency on Tuesday. The stamps depict football players from different countries who distinguished themselves in previous tournaments, it said.

North Koreans in and around Pyongyang who watched the 2002 World Cup games, co-hosted by South Korea and Japan, via free satellite distribution with the South’s help, were thrilled by the South’s unexpected progress, said Kim Jong-chol, a reporter with the Minju Chosun, the North’s Cabinet newspaper.

“The South’s advance to the semifinals in 2002 boosted the morale of the Korean people,” Kim told a Yonhap News Agency reporter.

North Korea failed to advance to the World Cup in the regional qualifier after winning one game and losing five.

After their team lost 2-0 to Iran, angry North Korean players offended the referee and fans threw bottles onto the pitch. As punishment, they had to play Japan in Bangkok without spectators.

The communist country is revving up efforts to gain global status in the next World Cup finals in South Africa in 2010. It has strengthened international exchanges to sharpen the team and established football training grounds with artificial grass supplied by FIFA earlier this year.

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Seoul says no DPRK aid without railways test

Thursday, June 8th, 2006

From the Korea Times:

South Korea’s chief delegate for the inter-Korean economic talks yesterday reaffirmed the North will not be getting any new economic support unless it pushes ahead with the railways test-run.

In a radio interview, Vice Finance Minister Bahk Byong-won said, “We created a structure in which the additional economic cooperation is only possible after the railways test-run.”

The two Koreas closed their 12th Economic Cooperation and Promotion Committee meeting in Jeju on Tuesday with a nine-article agreement on support for light industries, natural resources development and others.

The two sides concurred such agreements will only be implemented when “conditions are met,” which they verbally confirmed referred to the cancelled cross-border test-runs.

North Korea abruptly cancelled the scheduled testing last month, prompting an angry response from the South.

The South, remaining steadfast to its policy of engaging more economically with its communist neighbor, believes staunch military authorities to be behind the cancellation.

“(The North’s) military authorities are closely connected with the procedures of implementing many of the inter-Korean agreements. And the (preconditioning) clause refers to just that,” Bahk said, emphasizing that the North Korean military must take visible measures such as preparing a military guarantee for the railways operation.

The two railways, on the east and west of the Korean Peninsula, run through heavily fortified borders. It would be the first time in over five decades that the trains run.

“Although we said ‘conditions’ in the agreement, both sides made clear when we read out the agreement that the conditions referred to the railways test to avoid any conflicting interpretations in the future,” Bahk said.

([email protected])

By Lee Joo-hee

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Joint railway tests still on the agenda…

Wednesday, June 7th, 2006

From the Joong Ang Daily:

South Korean delegates at the inter-Korean economic talks here won a victory of sorts early yesterday morning; North Korea agreed to Seoul’s linkage of the completion of test runs of the newly reconnected railroads across the Demilitarized Zone to its offer of raw materials for the North’s light industries.

But in what apparently was a face-saving gesture to the North, the linkage was not made explicit in the joint announcement of the results of the four-day meeting. South Korea agreed to supply a package of raw materials for the North’s shoe, soap and textile industries worth $80 million, which will be delivered “when necessary conditions are met.” The agreement said nothing more about the conditions, but the rail tests, most recently cancelled by North Korea the day before they were to be conducted last month, were clearly the point at issue. Kim Chun-sig, the Seoul delegation’s spokesman, made that explicit. “The trial train runs are linked with the supply of raw materials, and the agreed announcement was issued with that understanding by the North.” He said agreement to the linkage was not easily won from the North; Seoul’s delegates stressed the uproar that would break out here if that condition were not attached.

The aid will be in the form of a loan to be repaid in kind ― North Korean natural resources ― over a 15-year period with an interest rate of 1 percent. The two delegations met the press to announce the agreement, saying they had signed a nine-point agreement and a 10-point supplemental document dealing with the aid package.

In the agreement, the aid is to be delivered in August. Mr. Kim said that meant that the necessary military-to-military agreement on safeguards required before travelers cross the Demilitarized Zone must be in place and the rails tests completed.

The strings attached to the aid package are something of a departure for the Roh administration, which has been tolerant ― far too tolerant, critics in the South contend ― of North Korea’s penchant for accepting aid donations while failing to keep promises it had made in return. Pyongyang’s cancellation of the railroad tests in late May was, apparently, too much for Seoul to stomach politically. The tests were cancelled the day before they were to take place, and the North blamed “political instability” in the South and the lack of a military safeguards agreement that the North itself has blocked.

A Seoul delegate said proudly, “Unlike in the past, we focused on enforcement of the agreement and secured some leverage over North Korea.” The two sides made some modest progress on other issues. They agreed to conduct negotiations on a joint project to mine gravel from the mouth of the Han River inside the Demilitarized Zone. They agreed that military-to-military agreements would be necessary for safety and security reasons. The project had been suggested by Seoul in April, and reflects the dwindling supply of such material here because of South Korea’s 30-year construction boom.

Other agreed meetings will address administrative procedures at the Kaesong Industrial Complex, flood control on cross-DMZ rivers and exchanges of weather data, especially on the yellow dust storms that originate in China’s Gobi Desert.

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Koreas agree on business contracts

Wednesday, June 7th, 2006

From the Korea Herald:

JEJU – The two Koreas yesterday agreed on a set of contracts to stimulate North Korea’s light industries and mining operations, but only when “conditions are met.” South Korean officials say the expression is a diplomatic term being used to describe the North’s obligation to allow the test run of trains on two cross-border rail links.

Economic delegates from Seoul and Pyongyang ended their four-day meeting on Jeju Island early yesterday morning, working out a nine-point agreement on various economic cooperation plans.

The talks were held against a background of hostility in the South following North Korea’s unilateral cancellation of the landmark testing of cross-border railways on May 25.

After marathon talks, the two sides managed to achieve a reluctant consensus on how to describe Pyongyang’s duty to revive the cancelled railway test-runs in return for a package of business cooperation deals.

The two sides resorted to indirectly referring to Pyongyang’s railway obligation by using the term “when conditions are met,” instead of using more direct language. Some observers said the “ambiguous” preconditioning leaves room for Pyongyang to pull out from the agreement later on.

The North apparently faces opposition from the military authorities who are apparently against opening the railways to the South. The North Korean military has demanded the two Koreas first conclude a full military guarantee.

“The implication of the agreement is that if there is no test run for the railways, there will be no economic support,” said Kim Chun-sig, spokesman for the South Korean delegation, during a press briefing.

Underscoring that the agreement is strong enough to encourage North Korea fulfill its part of the bargain, Kim said that the two Koreas would soon begin to discuss the military guarantees.

Based on the agreement, South Korea will provide some $80 million worth of raw materials needed for the destitute state to manufacture garments, shoes and soaps from August this year. North Korea will repay 3 percent of the loans in the form of minerals such as zinc. The interest rate was set at a low 1 percent.

The two Koreas also agreed to jointly develop North Korean mines and designate an organization to take charge of the project within one month from now.

Seoul officials argue that this agreement raises the level of inter-Korean cooperation to a mutual and commercial relationship from one-sided aid from Seoul to Pyongyang.

Other agreements included a joint excavation of aggregates in the Han River estuary that is located along the demarcation line, and to open working-level contacts from June 26-27 to discuss how to prevent the Imjin River from flooding nearby areas.

The two Koreas also saw eye-to-eye on advancing their joint businesses into third countries.

Another working-level meeting on the Gaeseong industrial park will be held from June 20-21.

The next Economic Cooperation and Promotion Committee meeting will be held in September in Pyongyang.

South Korean delegation was headed by Vice Finance Minister Bahk Byong-won and the North Korea team was led by Ju Tong-chan.

By Lee Joo-hee

From Yonhap:

The following is the full text of a joint press statement issued by South and North Korea at the end of their four-day economic cooperation meeting on the southern South Korean island of Jeju, Tuesday.

South and North Korea held the 12th meeting of the Inter-Korean Economic Cooperation Promotion Committee in Jeju Island on June 3-6, 2006.

During the meeting, the two sides discussed the issues to further develop the inter-Korean economic cooperation project in the interest of the Korean people in the spirit of the June 15 joint declaration, and agreed on the followings.

1. South and North Korea agree to adopt an accord on South-North Cooperation in Light Industry and Natural Resource Development and enforce it at the earliest possible time in favorable conditions.

2. South and North Korea agree to discuss and then implement a project to extract sand from the Han River’s estuary as military safety measures are taken.

3. South and North Korea agree to make necessary conditions for making the Kaesong Industrial Park globally competitive. To that end, the two sides will hold the second meeting of working-level officials for Kaesong industrial park construction and discuss ways of introducing an ID system, simplifying customs and passage procedures, securing a stable source of workers and building dormitories and convenient facilities to solve problems stemming from an increase in the number of workers.

4. South and North Korea agree to hold the first working-level meeting in Kaesong on June 26-27 to prevent flooding in shared areas near the Imjin River to review each other’s survey reports, discuss joint survey plans and ways of establishing a flood warning system.

5. South and North Korea agree to cooperate actively in preventing such natural disasters as flood, forest fires and yellow dust storms and discuss concrete issues at a working-level meeting in Kaesong sometime in July.

6. South and North Korea agree to discuss their advance into third countries in the field of natural resource development at a working-level meeting in Kaesong sometime in July.

7. South and North Korea agree to exchange economic observation delegations when an accord on South-North Cooperation in Light Industry and Natural Resource Development takes place.

8. South and North Korea agree to discuss and finalize the schedules of working-level meetings for fishery, science and technology cooperation, as well as a timetable for business arbitration committee talks, visits to Kaesong and Mount Geumgang and exchange of lists and other things, in the form of exchanging documents.

9. The 13th meeting of the Inter-Korean Economic Cooperation Promotion Committee will be held in Pyongyang in September 2006 and the date will be determined after consultation in the form of exchanging documents.

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South Korean dramas “permitted” in Sinuiju

Friday, June 2nd, 2006

From the Daily NK:

In North Korea, South Korean dramas are confidentially distributed through VCDs(‘Flat eggs’, as the Cds are known).  Previously, North Koreans were only allowed to watch films from the DPRK, China and USSR.  Posessing VCDs was also illegal.

According to Mr. Lee, a Chinese-North Korean who often visits Shinuiju, “Recently, Kim Jong Il has allowed North Koreans to see films only on the flat eggs(CDs) produced by Hana Electronic [the state-owned production monopoly]”. He added “Hana Electronics VCDs are all North Korean movies, Chinese movies featuring fighting with Japanese soldiers, and the Soviet Union movies”.

However, North Koreans are enthusiastic about South Korean dramas such as Love Song in Winter and Autumn Story and obsolete Western movies Rambo and ‘Bruce Lee’.

Mr. Lee said that “Recently South Korean dramas have been distributed widely, and because North Koreans see religious activities and adult materials through the flat eggs(CDs), the North Korean government dispatched an extensive censors group to crack down them”.

In North Korea, every kind of VCD was prohibited. However, realizing that North Koreans took pleasure in secretly watching the widely distributed VCDs, the North Korean government changed its policy and “partially” allowed its people to watch.

Mr. Lee said that, “These days, the punishment for [watching videos] has lightened, so watching VCDs except religious materials is just fined or orally warned”, adding, “The government does not take violators to political prison camps, but maybe Nodon Danryeondae (Labor facility), or Gyohwaso (long-term labor camp)”. Subsequently, he said that, “Because all officials of the National Security Agency and officials of the People’s Safety Agency see the dramas, the government can not unconditionally prevent from watching like the past”.

He said that, “Recently, the numbers of religious people have increased, and because of it, some people were caught watching religious films”, and “It is hard to survive in the religious cases”.

Meanwhile, shortwave radios are illegally traded at around 2,000 won($0.67) at Jangmadangs. Until 3 or 4 years ago, the government had carried out the reporting system about the illegal trades, but after the news that South Korea and the U.S sent radios, the trades at Jangmadangs were officially inhibited.

Now it was known that the small radios sold in secret are carried in through smuggling vessels generally in Jagangdo province, North Korea.  financial problems are resolved, a broker is introduced and guidance to an exile route is given.

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Reflections on Kedo

Thursday, June 1st, 2006

Joong Ang Daily
6/1/2007

The Korean Peninsula Energy Development Organization, or KEDO, announced yesterday that the project to build light water reactors at Sinpo, North Korea, has been scrapped. The infiltration of a North Korean submarine into Gangneung, South Korea, in 1996 and the firing of a Daepodong missile in 1998 were all incidents that cast a shadow on the project. In particular, the admission in 2002 by North Korea that it was working on a nuclear program using enriched uranium was the final straw in the Bush administration’s decision to halt a project that it was already skeptical about. In response, the North withdrew from the Nuclear Proliferation Treaty in 2003 and went on to declare in 2005 that it possessed nuclear weapons. Such developments led to today’s situation.

The confrontation between North Korea and the United States does give us something to think about. While agreeing with us on the denuclearization of the Korean Peninsula, the North secretly hung on to developing nuclear weapons. In response, in 1994, we cooperated with the United States but were not even allowed into the negotiations yet we still agreed to cover 70 percent of the cost of the light water reactor project. That may have been inevitable, because South Korea was the country most threatened. Nevertheless, it is debatable whether the negotiations in which Seoul paid the bills but had no say in the matter were the best method. This is an issue that the government needs to ponder seriously.

It has also become clear that the changes in U.S. foreign policy with a new administration are too much for us to deal with. Even though we threw away $1.1 billion, a solution to the North Korean nuclear problem seems to be even further away, Washington continues to cling stubbornly to its new policies.

So the administration should think about what it has learned from this experience and how it should use that knowledge. One good example is the announcement by Seoul last year that it would provide 2 million kilowatts of electricity to the North even before figuring out what the North’s answer would be.

The announcement was billed as an “important proposal,” but the North has turned a blind eye to it and says it wants a light water reactor. With an astronomical amount of tax money already having disappeared, isn’t offering to provide electricity to the North another burden? Whether it’s North Korea or the United States, others have an ability to think strategically and look into their opponents’ minds. Why not us?

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In Deep South, North Koreans Find a Hot Market

Thursday, May 25th, 2006

New York Times
NORIMITSU ONISHI
5/25/2006

TAEJON, South Korea — At the Pyongyang Moran Bar on a recent Friday evening, a large video screen showed uplifting images of rocky mountains and an open blue sky. A slogan appeared at the bottom: “Kim Jong Il, a man who comes along only once in a thousand years.”

The North Korean waitresses wore traditional dresses in the bright colors that were fashionable in the South some years back. The singer’s interpretation of “Whistle,” a North Korean standard of the 1980’s, was shaky and off-key. Service was bad and included at least one mild threat. Drinks were spilled, beer bottles left unopened and unpoured.

But the South Korean customers could not get enough of the Pyongyang Moran Bar.

“Encore!” cried Bae Seong Wan, 44, at the end of “Whistle.”

The Pyongyang Moran Bar is located, not north of the demilitarized zone, but here in downtown Taejon, a city in the South Korean heartland.

The 120-seat bar opened in February, complete with inferior North Korean beverages, North Korean landscape posters, North Korean songs, a photo of Mr. Kim above the bar counter with his South Korean counterpart and, most important, North Korean waitresses — or, as a sign outside announced, “beautiful girls from North Korea!”

Until the 1990’s, South Korean schoolchildren were awarded prizes for drawing posters depicting diabolical North Koreans. Then the South’s so-called sunshine policy of engagement transformed North Koreans into real human beings in the minds of South Koreans and in popular movies like “Joint Security Area.”

Now, after more than half a decade of rapprochement, the North is all the rage, in a retro-kitschy fashion, and North Koreans are seen not as threatening aggressors but as country bumpkin cousins, needing an introduction to big-city life.

North Korean defectors and South Koreans alike are opening North Korean-themed restaurants, selling North Korean goods and auctioning off North Korean artwork on www.NKMall.com.

Half a century of division has turned the South into the world’s most wired society, as its consumer products and pop culture increasingly shape the tastes of youth across Asia.

North Korea, meanwhile, has remained frozen in time, a repository — at least to someone with a sharp nose for marketing — of an unchanged Korea.

“North Korea is retro,” said Jong Su Ban, 42, a North Korean defector who plans to open a North Korean restaurant, Ok Ru Ok, in Seoul soon. “It reminds South Koreans of the 1950’s and 1960’s, before South Korea industrialized. They see handmade crafts that are not sophisticated, and they think, ‘It’s like us before we developed.’ ”

The timing was right, Mr. Jong said, pointing out that only a few years ago a restaurant in Seoul with a waiter dressed as a North Korean soldier went belly up fast. “He made people uncomfortable,” he said.

At a company called NK Food, Hong Chang Ryo, 45, a South Korean who opened two North Korean restaurants in Seoul this year and is planning to open a third here, agreed.

“Even two or three years ago,” he said, “we couldn’t have done this. We would have been fingered as commies.”

Mr. Hong’s first restaurant, Nalrae, Nalrae — or fast, fast in the North Korean dialect — “invites you to a different taste” with more than 27 dishes named after places in the North. Shelves stocked with mushrooms, alcoholic beverages, seaweed — “straight from Pyongyang” — are the main attractions in the restaurant, which is painted organic green. A menu promises “nonpolluted, well-being dishes using natural resources from North Korea.”

“It feels rural, natural, unpolluted,” said one first-time customer, Lee Sae Mie, 23, a university student.

While about 40 percent of the dishes’ ingredients come from the North, Mr. Hong said, the flavors had to be adjusted, considerably, to appeal to South Korean palates.

“We had to rack our brains,” Mr. Hong said. “We all know they just eat cornmeal over there. Well, we just don’t know what they’re eating over there. So we mixed and matched. Dishes may look North Korean but actually taste South Korean.”

Increasingly, though, people are parting with South Korean won to buy goods from www.NKMall.com, which Park Young Bok, a South Korean, set up in 2003. The site sells mostly food products, which shoppers can also buy at 70 stores nationwide.

Last September, Mr. Park added an auction for North Korean paintings, which have been selling briskly, reaching $115,000 in sales in April. With South Korean officials still banning artwork with political content, most of the imports are of landscapes — though, oddly, a tapestry of the Virgin Mary was auctioned off recently for $80.

At his warehouse just outside Seoul, Mr. Park showed off some of the 30 North Korean alcoholic beverages he sells — some of them with labels slapped crookedly on the bottles, others with the contents partly evaporated because of poor bottling.

But to hear some of the patrons at the Pyongyang Moran Bar here tell it, leaking bottles, even bad service, are part of the North Korean appeal.

“I don’t know how to open this,” said one waitress struggling with a bottle of Budweiser. The waitress — who had worked at the bar for only two days and who, like many North Koreans, had never opened a bottle before — tried to get the top off, then handed the bottle to the customer, who opened it himself.

Another customer, Kim Chung Sig, 39, said, “I don’t expect the service to be good here.”

Choi Jung Hee, 37, the manager, said she had trouble training her North Korean staff of five waitresses. “At least, they should say, ‘Hello!’ properly when customers come in, but they don’t,” she said.

“Things are very different in North Korea,” she said. “Over there, waitresses and salespeople are kings because they have access to goods. But here you have to treat customers like kings. You have to bow to them and be polite even if they are rude.”

Reaction to the bar is decidedly split, an indication, said Mr. Jong, the North Korean who is opening up Ok Ru Ok, that South Koreans see in North Korea what they want to see.

Older South Koreans, who still look upon the North as an enemy, want to see images of starving North Korean babies, Mr. Jong said. Younger people, who often want friendly relations with the North, want to see the clean streets of Pyongyang.

“Both sides want to satisfy their beliefs,” Mr. Jong said, standing inside his soon-to-open restaurant. “That’s why I’ll put up only neutral images of North Korea in my new restaurant.”

Everything has fallen into place now for Mr. Jong, who came to South Korea in 2000 and earned a living writing pornography before plunging into food. He has even secured a supply of the North’s coveted Taedong River beer.

“When I lived in North Korea,” Mr. Jong said, “I never knew that this beer even existed. I’ll have North Korean beer for the first time in South Korea. I lived in a very funny country.”

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Moody’s pessimistic on DPRK reform

Wednesday, May 24th, 2006

Will this have repercussions in the south’s credit rating?

From the Daily NK:

On May 22, an official of Moody’s Investor Service, a Credit Rating Agency, announced that despite Kim Jong Il’s visit to China early this year, North Korea did not show indications for internal economic reformation.

On May 22, Vice-president Thomas Byrne of Moody’s Investor Service rated the possibility of North Korea towards economic reformation negative in the North Korean Economic Outlook Symposium held by Institute for Corean-American Studies(ICAS) in the Rusell Senate Building.

Vice-president Byrne estimated that North Korea failed to adjust its currency and exchange rate, and its trade environment was not improved, so that rather its economic situation was worse. Plus, he emphasized that North Korea did not show any signs of internal economic reformation.

He said about Gaesung Industrial Complex that, “If 5 more complexes like Gaesung Industrial Complex develop, we can see North Korea be in the economic reformation’s process, yet the Complex is no more than a symbol”. He emphasized that if North Korea has a strong resolute for economic reformation, “it should follow the economic model of South Korea because the way to Seoul is easier than the train to Shanghai for it”.

Vice-president Byrne warned that if South Korea would continue to support North Korea economically, it would face economic crisis soon.

While saying that, “The difference between the approaches of South Korea and the U.S is not great enough to make an impact on the credit rating of South Korea”, he stated, “Due to North Korea, South Korea always gets a lower credit rating than its original rating”.

Meanwhile, a special correspondent informed that North Korean-Chinese trader Lee Dae Kil(pseudonym, 49) who recently came back from North Korea showed a negative opinion about North Korean economy.

Mr. Lee said that, “There has been little profit in spite of trades with North Koreans for a few years”, and “North Koreans buy and sell only for living, not for investment for profits. He said that, “The North Korean government does not show even such efforts”,.

Mr. Lee said that, “After it was known that the U.S blocked banks banking with North Korea, dollar transactions sharply decreased”, and “There were people who even asked me about what happened outside”.

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Seoul may face fiscal challenge to future DPRK aid

Tuesday, May 23rd, 2006

From Yonhap:

By Lee Dong-min
WASHINGTON, May 22 (Yonhap) — South Korea is fiscally able to handle its economic aid to North Korea, but the situation may change in the future when it will be required to spend more on its social welfare system, a senior official at Moody’s suggested Monday.

Speaking at a symposium by the Institute for Corean-American Studies (ICAS), Thomas Byrne, vice president of the international credit rating agency, said he does agree that North Korea is headed to meaningful economic reforms.

South Korea is one of three nations whose geopolitical risks are considered in judging its credit rating. Israel and Taiwan are the others.

Divided since the end of the three-year Korean War in 1953, the Korean Peninsula remains tense and volatile as Pyongyang seeks nuclear weapons it claims it needs as a deterrent against possible U.S. attack.

According to Byrne, the situation keeps South Korea one notch below the credit rating it normally deserves.

In trying to ease the tension, Seoul has been trying to engage Pyongyang by providing food and other types of economic assistance. A recent project involves an industrial complex in the North Korean border city of Kaesong where South Korea’s smaller firms have built manufacturing plants to use North Korea’s cheap labor force to make their products more price-competitive.

Byrne said Moody’s assesses the fiscal implications of South Korea helping to keep North Korea’s debilitated economy afloat.

“In fact, the North Korean economy is more unstable now,” he said, citing hyperinflation, backfired currency reform efforts and minuscule international trade hovering at US$3 billion a year.

Seoul, along with Beijing, is a major donor to Pyongyang, but it may be pressured to think otherwise, according to the Moody’s official.

With its aging society and expected large expenditures in social welfare and health care, South Korea will need a larger domestic budget, he said.

“Domestic social welfare demands would compete with sunshine/co-prosperity policy if the latter continues to increase, or increase sharply in the future,” said Byrne.

Despite North Korean leader Kim Jong-il’s visits to China that many saw as his study of Beijing’s economic reform path, the Moody’s official didn’t see any significant signs.

“I don’t see any internally generated reform process,” he said. “North Koreans aren’t anywhere near the positions of embarking on policies of China… or Vietnam.”

Kaesong is, at least for now, more important for South Korea than North Korea and not enough to show that Pyongyang is changing, he said, “If there were five other Kaesongs in North Korea, then it may mean something to North Korea… then, maybe North Korea is changing,” Byrne said.

The tension over North Korea’s nuclear problem intensified with U.S. accusations that Pyongyang was counterfeiting American currency and dealing in contraband.

In September, the U.S. Treasury designated Macau’s Banco Delta Asia (BDA) a primary money laundering entity working for North Korea, saying the bank was abetting Pyongyang’s illicit financial activities.

Daniel Glaser, deputy assistant secretary of treasury, said there is “very little question” that North Korea was involved in counterfeiting U.S. dollars, mostly $100 notes commonly called “supernotes.”

“Every seizure of these notes has been linked to each other… all of them have involved distribution by North Korean diplomats,” he told the ICAS symposium.

He again denied that the action against BDA was in any way meant to affect the nuclear negotiations with North Korea.

“This is a new approach to U.S. national security,” Glaser said, emphasizing that it was under new laws and newly created offices that steps like those against BDA were coordinated.

Wendy Cutler, assistant U.S. trade representative, focused on upcoming free trade agreement (FTA) negotiations with South Korea that she hopes will have far-reaching effects beyond the two nations.

“This agreement will help underscore U.S. commitment to engage the Asian region … the U.S. is committed to developing robust trade relationships in Asia,” she told the symposium.

Seoul and Washington will hold their first formal FTA talks next month in Washington and hope to come up with a final draft by end of this year.

Cutler, who heads the U.S. side in the negotiations, noted that FTAs require political decisions that defy strong domestic opposition.

FTA opponents in South Korea plan to come to Washington to protest the launch of the negotiations, alarming law enforcement officials of both countries.

Cutler said despite press reports of such opposition, polls indicate general support.

“It’s important to know that the Roh (Moo-hyun) administration and the majority of the Korean population and business community support the FTA,” she said.

A U.S. trade official, reacting to reports of protesters coming to Washington, cited the same polls.

“You need to keep in mind that based on polls in Korea, overall sentiment in Korea is strong support for the FTA,” the official said.

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9th Pyongyang International Trade Fair news (5/2006)

Friday, May 19th, 2006

PYONGYANG ― In a rare visit to this reclusive communist country, a group of South Korean government officials, journalists, businessmen and economic experts attended a series of investment promotion events arranged this week by the North Korean government.

At a trade fair, South Koreans toured bustling booths set up by North Korean and foreign firms, and witnessed North Koreans buying goods there with U.S. dollars in their hands ― an indication that Pyongyang’s limited foray into capitalism, which began in 2002, is slowly progressing in the North’s strictly controlled economy.

The delegates on Wednesday visited the 9th Pyongyang International Trade Fair, where 196 companies from 12 countries set up booths. The delegates were allowed to look around the fair freely. Of the participating firms, 21 were from North Korea and the rest came from 12 other countries, including China, Russia, Spain, Sweden, Syria, Italy and Thailand.

At the fair, Jeil Trust Bank, a North Korean bank, advertised its savings account programs for foreign currency deposits. Cars, bicycles, tires and machinery made in the North were also displayed.

About 1,000 Pyongyang residents and North Korean businessmen also attended the fair, and most flocked around the sales booths of Chinese appliances. Some North Koreans purchased handbags, pots and other goods, making payments with dollars.

The 72-member delegation also visited a glass manufacturing facility southwest of Pyongyang on Wednesday. Daean glass factory, completed in October, was built with a $20 million investment from China. About 30 Chinese technicians are also training North Korean workers at the plant.

“In early 2000, North Korea decided to shut down all its glass factories, and decided to build a new plant,” Pak Jong-ung, deputy manager of the plant, said. “China learned about the plant and invested in it.”

The South Koreans also toured a ship repair plant in Nampo, South Pyeongan province. At the Yongnam factory, Cha Son-mo, senior North Korean maritime affairs official, gave a presentation. “Last year, we finished the second dock, capable of repairing a 50,000-ton ship,” Mr. Cha said. “Please use our facility to promote inter-Korean economic exchange.”

Jeong Nam-su, senior planning manager of STX Corporation, a South Korean ship maintenance firm, said the facility was better equipped than he expected. “It is also surprisingly modernized,” Mr. Jeong said. “I am considering asking the North Korean factory to repair one or two ships after I return to the South.”

On Tuesday, the group attended an investor-relations session hosted by the North’s Trade Ministry, with simultaneous translations into Chinese and English available. About 70 foreign investors attended. It is the first time South Koreans were invited to such an event. Rim Tae-dok, the trade ministry’s councilor, gave the presentation, promising tax benefits and land leases at low prices.

The delegation visited Kim Chaek University of Technology and Kim Il Sung University and toured Mount Myohyang. The group, which began its trip on Monday, will return to Seoul Saturday.

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