North Korean Economy Watch

According to Senator Lugar’s web page:

On October 22, 2010, Senator Lugar, U.S. Senate Foreign Relations Committee Ranking Member, released a Congressional Research Service (CRS) report on implementation of sanctions for North Korea.

Following renewed interest in sanctions against North Korea in the wake of the sinking of South Korea’s Cheonan ship, which killed 46 individuals, Lugar asked the CRS to evaluate the implementation of the U.N. sanctions already in place.

You can read Sen. Lugar’s original request for the report here. (PDF)

The CRS report he received can be found here. (PDF)

I have added this report to my growing collection of DPRK-focused CRS reports found here.

According to the APF:

North Korea is heading for a “chronic” new food crisis with drought and floods in different parts of the country exacerbated by cuts in international aid, the United Nations said.

UN Secretary General Ban Ki-moon expressed concern “that the acute humanitarian needs” of at least 3.5 million women and children in North Korea would worsen because of food shortages.

Even though North Korea is considered by many to be the world’s most isolated state, Ban said in a report to be discussed Friday that “the global economic crisis is further increasing the levels of hardship” adding to the “chronic food insecurity”.

South Korea on Friday said it had no immediate plan to resume large-scale food aid to North Korea despite the UN warning on the food crisis.

“The government stance is that in order for the massive government food aid to be resumed, overall inter-Korean relations must be taken into account,” Unification Ministry spokeswoman Lee Jong-Joo told AFP.

She stressed, however, that Seoul allows smaller-scale “humanitarian aid” to the North, including 5,000 tonnes of rice and other aid supplies currently being shipped victims of floods that devastated northwestern North Korea in August.

…

There has been a shortage of rainfall in some parts of the country but in August torrential downpours caused floods in the north, near the Chinese border.

The UN predicted that the cereal yield would be nearly a fifth lower than in 2009.

It said the country needs 3.5 million tons of cereals a year to feed its population and would have to import 1.1 million tons. In addition, UN agencies had raised only 20 percent of the 492 million dollars they estimated in 2009 would be needed for the North.

Ban quoted the UN Children’s Fund (UNICEF) as saying that each year, some 40,000 children under five become “acutely malnourished” in North Korea, with 25,000 needing hospital treatment.

“The lack of maintenance of water and sanitation systems increases rates of diarrhoea and acute respiratory infections, which are leading causes of child death.

“In addition, one third of women of childbearing age suffer from anaemia, a nutrition deficiency that is also a major cause of maternal mortality.”

The poor diet across the country leads to widespread “infectious diseases, physical and mental development disorders, poor labour productivity and an increased risk of premature death,” said the grim report.

A survey carried out by the government with UN support showed that about one third of the population suffer from stunting — below normal body growth. In some regions the figure was 45 percent.

The report was intended to be on human rights in North Korea and the UN chief said there was an “urgent need” for Kim Jong-Il’s regime to take steps to provide the basic right to food, water, sanitation and health.

The UN reported little change in the “comprehensive restrictions” on freedom of speech, religion and opinion in the tightly policed state. “The government’s control over the flow of information is strict and pervasive.”

Ban highlighted the difficulty in getting reliable information on events in the North.

But he said: “There are a number of reports concerning public executions, the use of torture, forced labour and the ill-treatment of refugees or asylum-seekers repatriated from abroad.”

His report said North Korea’s UN delegation had acknowledged that public executions were carried out for “very brutal violent crimes.”

It added that the UN envoy on rights in North Korea had raised concerns with the North’s mission about conditions in six prisons and detention centers reportedly used for political prisoners.

With the North embroiled in a dispute with South Korea over the sinking of a warship and in a nuclear arms standoff with the international community, Ban said humanitarian aid should not be restricted “on the basis of political and security concerns.”

Though unrelated to the UN findings, South Korea is shipping 5,000 tons of rice to the DPRK today. According to Yonhap:

The Red Cross aid, which is aimed at helping the North cope with the aftermath of floods, marks South Korea’s first government-funded provision of rice to the North since President Lee Myung-bak took office in early 2008 on a pledge to link aid to progress in efforts to end Pyongyang’s nuclear programs.

Seoul also plans to send a shipment of 10,000 tons of cement to the North later this week.

A total of 13.9 billion won (US$12.3 million) came from the government coffers to finance the flood aid.

Also Monday, three Red Cross officials prepared to fly to the Chinese city to receive the rice and instant noodles there and transport the relief supplies by truck to the flood-hit North Korean border city of Sinuiju, according to officials from the Red Cross and the Unification Ministry.

The cargo ships are expected to arrive in Dandong around Wednesday.

Rice will be delivered in five-kilogram packages, and each package is marked with “Donation from the Republic of Korea,” South Korea’s official name.

In August, South Korea first offered to provide relief aid to the North after devastating floods hit the communist nation. North Korea later asked for rice, heavy construction equipment and materials.

Stories about South Korean aid in 2010 can be found here.

China has also pledged food assistance. According to KBS:

A Japanese daily says China pledged 500-thousand tons of rice aid to North Korea during Kim Jong-il’s visit to China in August.

The New York Times raises the concern that food aid may be diverted.  According to the article:

Rice, a staple of the diets in both Koreas, is also a highly symbolic item in terms of food aid throughout Asia. The 5,000 tons of rice in the shipment on Monday can feed about 325,000 people for a month, according to Red Cross estimates.

Some analysts and aid workers expressed concern that the rice would likely be diverted to political elites, loyal party members and the military rather than delivered to the neediest in the North. That has been the pattern, they said, of previous government aid deliveries.

“I’m not unhappy about food going up, but I fear that this kind of government-to-government distribution to Pyongyang will be carried out along loyalty lines,” said Tim Peters, founder of the civic group Helping Hands Korea. “Distribution through small NGOs that are more strategically placed and can get the food into the interior and places like remote mining towns, that is the more intelligent strategy.”

Mr. Peters said his group, which primarily assists North Korean refugees, has received numerous reports from defectors from what he called “the Siberia of North Korea” that residents in the hinterlands “never see any of this kind of food aid.”

Five weeks ago, a truck convoy delivered 203 tons of rice to North Korea, the first rice donations of any kind from the South in nearly three years. That nongovernmental assistance, which was donated by charity groups and opposition political parties, came one day after a shipment of 530 tons of flour was sent by a South Korean provincial government and civic groups.

According to Fox News:

In an eerie replay of a scandal that enveloped the United Nations Development Program, an internal audit by the U.N.’s World Food Program shows significant “lapses,” “anomalies,” and unexplained variations last year in the way the relief agency reported its financial and commodity management in North Korea.

The holes in WFP’s humanitarian reporting raise questions of whether a U.N. agency has allowed money and supplies intended for starving North Koreans to end up in the hands of the country’s brutal communist rulers, who are under international sanctions aimed at halting their aggressive atomic weapons program.

According to WFP itself, in response to questions from Fox News, the confidential audit “highlighted a small number of inconsistencies in commodity accounting that have subsequently been addressed.” All the issues involved have since been “closed,” the agency added.

However, Fox News obtained a copy of a summary of projects undertaken by WFP’s internal watchdog Office of Internal Audit between July and September of last year, which lists the North Korean lapses first among its audit highlights. Among other things, it notes:

–“inconsistent data and unreliable information systems used for reporting [WFP] commodity movements, stock balances and food utilization” in North Korea;

–“lapses…in financial and commodity management processes.”

—“numerous anomalies…in information systems used for reporting commodity movements and food utilization in the CO [WFP local country office].”

See summary document here (PDF).

The full extent of the management lapses and their consequences cannot be determined without the unexpurgated audit report—and the WFP is not willing to make that public. The agency flatly turned down a request by Fox News for the document.

In fact, WFP has not even supplied a copy of the audit report to nations, including the U.S., that supervise its operations through a 36-member executive board. (The U.S. government gave about $1.76 billion to WFP in 2009, and has so far contributed $959 million this year.)

A Fox News query to the U.S. Mission to the U.N. in Geneva got confirmation that the U.S. government did not have the report, and that “WFP does not currently share its internal audit reports with the WFP Executive Board members.”

By now, however, it was supposed to. A policy that allowed the WFP’s executive director, Josette Sheeran, to give such audit reports to executive board members on demand was up for approval by the board at its last meeting in June. However, it was withdrawn from the board’s agenda; it is now up for consideration at the next Board meeting in November.

Even then, however, the wording of a draft version of the decision underlines that the sunlight provisions “will not be applied retroactively.”

The audit references to lapses in relief aid reporting practices are not the first indicator that the regime of ailing dictator Kim Jong Il might have the opportunity to exploit WFP resources in North Korea.

In June 2009, Fox News got an admission from the relief agency that its food supplies were carried from China to North Korea on vessels owned by the Kim regime. The potential transportation costs for those relief supplies appeared to be enormously high to outside shipping experts asked by Fox News to analyze the agency’s relief program documents. No mention of the regime’s role in transporting WFP goods appeared in the documents or on the agency’s website.

Click here to read an earlier Fox News article on this topic.

WFP has delivered more than $1 billion worth of food aid to North Korea since 2000, but the amount of donated money available for that effort has dwindled sharply as the Kim regime has exploded two nuclear bombs, threatened neighboring Japan and South Korea with war, and even sunk a South Korean warship on the high seas, according to the best forensic evidence available.

Its current plans call for spending about $91 million for food for about 2.2 million North Koreans this year.

The WFP audit reference to lapsed internal controls in North Korea, and the agency’s pooh-poohing of them, also bears a disturbing resemblance to the early stages of a battle over the role of the United Nations Development Program in North Korea, which led to the closure of UNDP’s North Korea office for two years, from 2007 to 2009. The WFP was later named as the U.N.’s lead agency in the country.

In 2006, a whistleblower named Artjon Shkurtaj revealed that UNDP procedures in North Korea had funneled millions of dollars in hard currency to the Kim regime, allowed North Korean government nominees to occupy sensitive UNDP positions in the local country office, kept thousands of U.S. dollars counterfeited by North Korea without informing U.S. authorities, and other transgressions.

All were flatly denied by the U.N. agency, though many of the accusations were later revealed to have been mentioned in internal audit reports — which UNDP refused to make public, on the same grounds currently used by WFP, that they were internal management tools. The existence of the audit criticisms were only made known through an external board of auditors’ investigation in 2007.

A further outside investigation revealed that UNDP’s transgressions were even worse than the auditors had suggested. Not only had UNDP routinely continued to hand over millions in hard currency to the Kim regime, use government nominated officials in sensitive positions, and transfer sensitive equipment with potential for terrorist use or for use in creating weapons of mass destruction, it had done so in violation of U.N. Security Council sanctions in force at the time, and also contravened its own basic financial rules and regulations.

Click here to read an earlier Fox News article on this topic.

In the midst of the furor over its North Korean activities, UNDP finally agreed to make future internal audit reports public—at least to governments on its executive board, and as long as they applied in writing. Since then, it has also amended its internal procedures and is now relaunching itself in North Korea. (To date, the U.N. has not paid recompense to Shkurtaj that was mandated by its own ethics officer in the wake of the UNDP scandal.)

Is the World Food Program following the unsettling trail blazed by UNDP in North Korea, before it mended its ways?

Without the full internal audits, it is hard to tell—but the stonewalling of those audits looks very familiar.

Read the full story here:
U.N. Audit Finds ‘Lapses’ in Managing Food Program Aid to N. Korea
Fox News
George Russell
9/28/2010

According to Kathimerini:

Authorities in Piraeus today were to continue their inspection of a German-flagged French-owned vessel that had been en route to Syria from North Korea with a cargo believed to comprise banned weapons.

Following a tip-off from another country, which was not identified, Greek authorities intercepted the vessel and ordered its mooring at the port of Piraeus so checks could be carried out. Coast guard officers, military experts and members of the National Intelligence Service (EYP) participated in the inspection, which did not result in the discovery of any weapons but did turn up a large quantity of what a government source yesterday described as “nonmilitary material that could have a dual use.” This material reportedly included pieces of metal and pipes that could be used in the construction of missile launchers.

The United Nations Security Council agreed in June last year to ban the export of all weapons from North Korea.

According to Reuters:

The expanded sanctions were aimed at cutting off its arms sales, a vital export estimated to earn it more than $1 billion a year.

North Korea’s biggest weapons sales come from ballistic missiles, with Iran and other Middle Eastern states as customers, according to U.S. government officials.

Read the full stories here:
Ship checked for weapons
Kathimerini
9/29/2010

Greece searches ship for North Korean arms – source
Reuters
9/28/2010

According to the Choson Ilbo:

North Korea and China are already starting economic cooperation projects in the border area across China’s northeast and the North’s Rajin-Sonbong region.

The Chinese Ministry of Transport recently designated Jilin Province as a pilot region for international trade and logistics encompassing the three northeastern provinces of China and the Duman (or Tumen) River area, the China Shipping Gazette reported last Friday.

The decision is aimed at facilitating transport of goods from China’s northeast to Shanghai and the south via customs points in the Chinese city of Hunchun and the North’s Rajin-Sonbong Port, the weekly added.

A representative of the Yanbian Korean Autonomous Prefecture in Jilin also signed an agreement on bilateral economic cooperation with Kim Su-yol, the chairman of the Rajin-Sonbong special city people’s committee, at the sixth Northeast Asia Trade Expo in Changchun last Thursday.

Read the full story here:
N.Korea, China Promote Business in Border Area\
Choson Ilbo
9/6/2010

According to the Wall Street Journal:

That’s a headline we never expected to write—especially in the context of the United Nations Development Program’s scandal-ridden operations in North Korea. In 2007, the U.S. mission to the U.N. shined a light on the U.N. agency’s record of gross mismanagement while operating in that rogue dictatorship, including large sums of money that vanished after being transferred to Pyongyang and dual-use technology shipped to the North without U.S. export licenses.

These abuses came to light thanks in part to a whistleblower by the name of Artjon Shkurtaj, an Albanian-born accountant who served as chief of operations for all U.N. operations in North Korea in the mid-2000s. Mr. Shkurtaj was outraged at the violations he saw and after two years of trying to get his superiors at UNDP headquarters in New York to take corrective action, he took his information to the U.S. mission to the U.N.

The UNDP responded by firing him and taking every opportunity to malign his integrity. When Mr. Shkurtaj complained, a UNDP-sponsored investigation found that his firing had not been in retaliation for blowing the whistle. What a surprise. The U.N. bureaucracy and its diplomatic coterie also circled the wagons and attacked the U.S. mission for daring to raise the subject.

Now, more than three years later, Mr. Shkurtaj has been substantially vindicated. On Tuesday the U.N. Dispute Tribunal ordered the UNDP to pay its former employee $166,000 in compensation for its failure to give Mr. Shkurtaj the opportunity to respond to its adverse findings against him. Judge Memooda Ebrahim-Carstens ruled that the UNDP violated Mr. Shkurtaj’s “due process rights, damaged his career prospects and professional reputation, and caused him emotional distress.” She let stand the UNDP’s finding that the firing had not been retaliatory.

Beyond Mr. Shkurtaj’s case, the judge’s 24-page opinion is worth reading for its inside look at the imperious manner in which the U.N. bureaucracy operates. The infighting and buck-passing are world-class—even in the office of Secretary-General Ban Ki-moon, who presents himself as a reformer. The ruling in Mr. Shkurtaj’s case suggests that the Dispute Tribunal, established a little over a year ago, is serious about its mandate to be “independent, professionalized, expedient, transparent and decentralized.” The panel has already clashed with Mr. Ban’s office over other rulings.

The finding also vindicates Mark Wallace, the U.S. official who led the charge for transparency at UNDP despite hostility from the media and from Michigan Democrat Carl Levin, and with very little support at the State Department.

At yesterday’s daily press briefing, a spokesperson said that the U.N. is “studying” the panel’s latest decision. It’s possible the Secretary-General will decide to appeal. If Mr. Ban were truly serious about cleaning up his own house, he would write Mr. Shkurtaj a letter of apology, thank him for having the courage to alert the U.N. to instances of wrong-doing, and give him his job back.

Past posts which reference the UNDP can be found here. 

Read the full story here:
Hooray for the U.N.
Wall Street Jounral
9/2/2010

According to Fox News:

As the xenophobic North Korean regime of Kim Jong Il appears to be inching toward a murky transition of power, the United Nations is laying plans to spend more than $290 million on a welter of programs in the communist state—including a scheme to produce an algae sold in the U.S. as tropical fish food–provided someone else comes up with much of the money.

The money is by no means a sure thing, especially if the unpredictable North Korean dictator rejects any of the stringent oversight conditions attached to money from some of the important donors the U.N. hopes will chip in.

The U.N. plans, however, demonstrate the determination of the world organization and its most influential backers—notably, the U.S. government, which is the biggest single financial supporter of most U.N. aid and development organizations– to keep dangling carrots of assistance before the North Korean regime, even at its most provocative.

The U.N. plans persist despite such incidents as the March 26 sinking of a South Korean warship, the Cheonan, most likely by a North Korean submarine, and the regime’s continued nuclear saber-rattling, especially toward South Korea. Just last month, for example, North Korea threatened a “powerful nuclear deterrence” in response to a joint U.S.-South Korean antisubmarine exercise prompted by the Cheonan incident.

All those uncertainties fade, however, alongside a bigger one: rumors that the ailing and reclusive Kim, who returned on Sunday from his second trip to China in three months, hopes to install his youngest son, Kim Jong-Un, as his successor– a process that could already be well under way.

Whatever the outcome of the succession process, at least a dozen U.N. agencies and offices clearly hope to be deeply involved over the next five years in North Korea’s national welfare, in areas ranging from health care and education to sanitation and civil service training, “strengthening knowledge networks” in agriculture, alternate energy development, and transportation, not to mention improving North Korean export trade.

A significant number of the efforts will also go to bolstering the capabilities of the North Korean government, which is not surprising, since they are prepared in close collaboration with various departments of the ruling apparatus. These efforts include a strong focus on health care delivery and education (already problematic in a totalitarian state burdened with a smothering cult of the personality).

But they also include more ambiguous activities in a brutal and thorough-going dictatorship such as North Korea. Among them: coordinating “national knowledge networks and practices,” “management and specialist training,” and—in a country that regularly threatens its neighbors with nuclear and conventional war—a “disaster preparedness and response strategy” spurred by North Korea’s famines and floods. All of these activities are depicted by the U.N. documents as being strictly humanitarian in nature.

The array of plans is laid out in schematic form in a 22-page “United Nations Strategic Framework Results Matrix” for North Korea, which is being presented to members of the supervisory Executive Board of the United Nations Development Program (UNDP), the U.N.’s principal development coordinating agency, at a meeting in New York this week.

Click here for the matrix.

The framework is buttressed by UNDP’s own country program for North Korea, which is a $38.3 million portion of the larger total. Both documents cover the period from 2011 to 2015.

Click here for the UNDP Country Program.

The UNDP contribution is noteworthy, among other things, for the fact that most of the money–$34 million—can be counted on to exist. That amount is described in the annex to the country program as coming from “regular” UNDP resources, meaning its core budget. Only $4 million of UNDP’s spending in North Korea comes from other contributions.

A UNDP spokesman underlined—as does the country program—the extent to which UNDP claims to be adhering to newly strengthened safeguards in relation to its North Korean program.

UNDP activities in North Korea exploded into scandal in 2007, leading to suspension of its program until 2009. Among other things, an independent investigative panel subsequently determined that UNDP had wrongfully provided millions in hard currency to the North Korean regime, ignored U.N. Security Council sanctions in passing on dual-use equipment that could conceivably be used in the country’s nuclear program, and allowed North Korean government employees to fill key positions.

In the current program, UNDP emphasizes that it has revamped its hiring and currency policies, but adds that “a proper monitoring and evaluation plan is necessary to ensure accountability and transparency in project implementation.” The careful wording indicates that at least some of that planning remains to be done.

While UNDP has actual cash to spend, however, nearly $119 million of some $128 million that UNICEF plans to spend in North Korea over the next four years—about 93 per cent—is expected to come from outside donors, according to UNICEF’s own country plan for North Korea. That is, as UNICEF delicately puts it, “subject to the availability of specific purpose contributions” from those willing to put up the money.

Click here for the UNICEF Country Program.

Much of that volunteer UNICEF money would go toward building up North Korea’s grievously neglected clinical health care facilities, bolstering maternal and early childhood care, early childhood education and large-scale vaccination and medication campaigns to fight AIDs, malaria and tuberculosis.

Most of the anti-disease money is supposed to come from the Global Fund to Fight AIDS, Tuberculosis and Malaria (GFATM), a Geneva-based institution financed in part of Microsoft Found Bill Gates and his wife, Melinda. Nowadays, the U.S. government contributes 28 percent of the GFATM’s funds.

And so far, GFATM has only handed over $12.45 million to UNICEF, according to the U.N. agency’s spokesman, Chris de Bono, for its anti-malarial and TV campaign. (According to GFATM’s website, UNICEF has received $18.35 million, out of about $31.5 million approved so far.) According to de Bono, another $56 million is due to come from GFATM starting in 2013, provided a “number of conditions” laid down by the Global Fund are met.

Those conditions, according to Global Fund communications director Jon Liden, largely bear on whether the money is meaning the health goals set by the donors. Among them, for example, is a commitment to cut in half the North Korean death rate from malaria by 2013, using the death rate in 2007 as a baseline (0.31 per 1,000 people, vs. 0.62.).

Click here for Global Fund report on North Korea.

Failure to meet the targets could result in reduced funding for the next three years, or a cutoff.

The additional “other” revenues required by UNICEF for 2011-2015 will be raised “as we get into our program,” according to spokesman De Bono, “as is our usual practice.”

The same apparently applies to the bulk of $101 million or so to be spent in North Korea by the World Health Organization (WHO). WHO activities include supporting UNICEF on the malaria and TB campaigns, but also building up North Korean health care, supplying equipment and drugs, and helping institute telemedicine.

But WHO’s own “country cooperation strategy” for North Korea extends only to 2013, meaning all of its fundraising plans for the 2011-2015 have not yet been written.

In the current strategy document, completed in 2009, WHO notes that it will need to use about $3 million of its regular budget and mobilize $20 million annually from voluntary contributions to meet North Koreas needs. This, the document says, “will be a challenging task.”

Just how challenging, perhaps, can be seen in the case of the struggling World Food Program (WFP), whose efforts are outlined in the U.N. Strategic Framework as trying to provide “fortified locally produced nutritious foods” to young children.

In fact, WFP has been running a dwindling operation to provide emergency food to many more of North Korea’s desperately hungry population. But donors stampeded away from the WFP fundraising effort, especially after the Kim regime detonated a nuclear device last year, and questions were raised about whether the government was profiting from the food effort.

Questioned Raised About Who Profits From Aid to North Korea

Currently, WFP has dialed back the goal of its emergency food aid operation from $500 million in 2008-2009 to $91 million.

In the 2011-2015 strategic framework, UNDP and the Rome-based Food and Agriculture Organization will be working on amplifying North Korea’s meager food supply, enhancing, among other things, areas where “double-cropping” is possible, and adding to fruit orchards and livestock herds. UNDP’s project documents say it will spend $13 million on “seed production in alternative cereals” –defined as wheat, barley, soybeans, potatoes—as well as “wild fruit processing and protein-rich production.”

Some of UNDP’s protein projects, however, seem decidedly outside the mainstream, or even bizarre. In its program document, for example, UNDP says it will “support pilot production of protein-rich plans, such as spirulina and pistia statiotes, which will supply nutrients.”

Spirulina is an algae that has gained a reputation in alternative food circles as a diet supplement. In the U.S., health food websites offer a powdered form for anywhere from $24 to $33 per pound—hardly a cheap source of protein for starving people. It is also sold in the U.S. as tropical fish food. But whether North Korea needs a “pilot project” to produce spirulina is debatable.

As far back as October, 2003, a North Korean news agency declared that the Kim government’s botanical institute had, “after years of researches [sic] completed the method of artificially cultivating spirulina at low cost.” The agency added, “It can be cultivated easily in greenhouses too.” Indeed, spirulina is currently listed as a marketable product on a North Korean export website. And on Aug. 6, a Chinese news agency announced that North Korean researchers had created a new spirulina vaccination “which prevents and treats domestic animals’ diseases and increases their weight.” Whether there was any independent verification of that claim was not mentioned in the news article.

As for pistia statiotes, also known as water lettuce, according to the website of the Center for Aquatic and Invasive Plants at the University of Florida, the floating plant is a fast-growing weed, which can block waterways, deplete oxygen supplies in water, and threaten fish populations. It is described as an obnoxious invader in West Africa and Australia. While pistia can survive in temperate climates, it abhors cold and thrives mainly in tropical and semi-tropical environments—not exactly what North Korea is known for.

One of the few places where it is cultivated for its nutritional value is apparently southern China, where it is sometimes used as a supplemental carp food.

In a country full of starving or semi-starving people, of course, almost anything may be viewed as edible. But in the U.N.’s renewed desire to pour money into North Korea, the value of at least some of the projects it is pushing for approval may be hard to swallow.

Read the full story here:
U.N. Lays Plans to Spend $290M on Aid to North Korea
Fox News
George Russell
9/1/2010

According to the AFP:

North Korea is forging trade documents and changing the names of its trading firms to try to dodge international sanctions, a Seoul intelligence official and a media report said Wednesday.

Pyongyang changed the name of the Korea Mining and Development Corp to Kapmun Tosong Trade after the UN Security Council blacklisted the firm following the North’s missile test in April 2009, Dong-A Ilbo newspaper reported.

The communist state also renamed weapons trader Tangun Trade as Chasongdang Trade when the company was put on the sanctions list after the North’s second nuclear test in May 2009.

The tests prompted the Security Council to impose tougher sanctions targeting Pyongyang’s weapons exports and blacklisting companies suspected of such dealings.

The sanctions also called on UN member states to inspect ships and planes suspected of carrying banned cargo to or from the North.

Since then, the North has mostly used China to transport its arms exports, Dong-A said.

It had forged trade invoices on military products, for instance by labelling torpedoes as fish processing equipment and anti-tank rockets as oil boring machinery, the paper added.

A spokesman for Seoul’s National Intelligence Service confirmed the report but declined to give details.

“Intelligence authorities in South Korea and the United States are trying to crack down on the North’s forging of company names and export invoices, but it is becoming increasingly difficult since the North keeps coming up with new schemes,” the paper quoted one South Korean official as saying.

The impoverished North faces multiple sanctions imposed by the UN and the United States and targeting its illegal trade in arms, drugs and luxury goods.

The US Treasury Department announced Monday it was imposing sanctions on four people and eight organisations accused of aiding the communist government through illicit trade.

Of course these games are nothing new. About this time last year DPRK sanctions enforcement was in the news.  Marcus Noland referred to the task as “Whac-a-mole”.

Read the full stories here:
N.Korea forges trade documents to dodge sanctions
AFP
9/1/2010

N. Korea Fakes Trade Documents to Export WMDs 
Donga Ilbo
9/1/2010

According toYonhap:

The World Food Program is struggling to keep its project of feeding malnourished children in North Korea from shrinking, its director for the communist state said in an interview on Thursday.

Torben Due, who represents the WFP office in Pyongyang, said his organization set out to raise US$500 million two years ago to provide basic nutrition for North Korean children.

In reality, what the WFP ended up with was $100 million. Due said his team in Pyongyang has re-designed its operation for the next two years to value at $96 million because of grim expectations for funding.

“The most difficult obstacle is that we don’t get the resources we need. We don’t get the money we need,” said Due, who was in Seoul this week to meet with government officials to discuss food needs in North Korea.

“We had to reduce (our program) because we could see we would not get the money. We had to design a program small and realistic in terms of what we would be able to do,” he said.

The WFP is a U.N. organization heavily dependent on donation. In North Korea, it supplies cereal-type food mixed with soybeans, milk powder, sugar and others rich in protein and minerals, specifically aimed to fight nutritional deficiencies in growing children.

“The child who is chronically malnourished will be damaged in a way that lasts a whole life. He will be physically stunted, and mental and intellectual development will also be harmed,” Due said, adding North Korean children “particularly” like biscuits.

Due said political tensions appear to be one reason why the WFP operation is not receiving enough donations for North Korea, which has conducted two nuclear tests since 2006, defying warnings.

“This is a pure humanitarian issue. Children suffer more than anybody else if there is no food,” he said, adding that the WFP office in Pyongyang had to cut the number of counties it was supporting from 130 to 65 this year.

“You are talking about roughly a third of the population that has problems with insufficient food intake, both in terms of quantity and quality. What we’re providing is supplement for a small part of the population. The problem is much bigger than what the WFP program is about,” he said.

North Korea has a population of about 24 million. Due said quantity matters as much as quality when it comes to helping North Korean children.

“If you have a country with 5 million children, if you want to contribute and solve the problem, you must think in terms of what is needed,” he said.

Due declined to disclose his discussions with the South Korean government officials he met here. South Korea has suspended sending large-scale food aid to North Korea unless Pyongyang moves to denuclearize under a multinational agreement.

North Korea has relied on international handouts since it suffered massive famine in the 1990s, when as many as 2 million people reportedly died.

The country is vulnerable to natural disasters. Earlier this month, heavy rains along its border with China raised the level of rivers and led to the evacuation of 23,000 North Koreans, Due said.

“In the areas affected, it’s quite devastating,” he said. But Due said North Korea had yet to appeal for international assistance as “the impact is very limited” and “localized.”

“The government can probably handle it themselves. We are, along with the Red Cross, providing some items,” including 1,300 tons of food, he said, adding he had no knowledge of human losses yet.

Earlier Thursday, South Korea’s Red Cross proposed sending aid to North Korea to help it recover from the flooding.

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WFP feeding fewer N. Korean children as donation shrinks: director
Yonhap
Sam Kim
8/26/2010

According to the Choson Ilbo:

Academics from North Korea and Japan have unearthed a large tumulus from the Koguryo period in Pyongyang, providing valuable material for studying the history of ancient East Asia, Japan’s Kyodo news agency said Saturday. About 4.5 km away from the downtown Pyongyang, the tomb was discovered during construction work in Tongsan-dong, the Lelang District of the Koguryo era and is presumed to have been created around the 5th century.

According to the news agency, the mural paintings in the tomb show a man in horn-shaped headgear on horseback, a procession of men holding flags on armored horses, and warriors with swords. The antechamber and main chamber at the back are connected with a narrow passage, while the bones of a man and two women have been found in the back chamber. The tomb has some unique features, including the antechamber’s arched ceilings with three layers of triangular props and the mound created by piling up alternate layers of lime, charcoal and red clay to cover the stone chambers beneath, the report said. The mound is 35 m in diameter and 8 m high.

Pyongyang plans to register the tomb with UNESCO as a World Heritage site. Japanese scholars said the tomb’s murals are comparable to those of Tokhung-ri Tomb in Nampo, South Pyongan Province, which is included in the Complex of Koguryo Tombs inscribed in the World Heritage List in 2004.

The team also found relics offering a glimpse of how sophisticated Koguryo culture was, such as gold and silver ornaments, tiger-shaped pottery, bronze coins and nails for coffins. The celadon candlestick is the first of its kind to be excavated in the North, the report added.

The team consists of researchers with the Archaeological Institute of the North’s Academy of Social Sciences and Japanese scholars sent by Kyoto news agency including Prof. Masahiro Saotome, an archaeologist at the University of Tokyo, and Shigeo Aoki, a Cyber University professor specializing in the preservation of historic remains. Saotome said the tomb “was unearthed in an area where experts believed there would be no Koguryo mural tombs.”

Ahn Hwi-joon, a Korean art historian and professor emeritus at Seoul National University, echoed him saying, “It is the first time that Koguryo tomb murals have been unearthed in the area once controlled by the Chinese Han Dynasty Commander of Lelang. They are especially valuable as they were executed in the late fourth to the fifth centuries, immediately after Koguryo incorporated Lelang.”

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N.Korean-Japanese Team Finds Koguryo Tomb in Pyongyang
Choson Ilbo
8/16/2010