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DPRK military strenghtens hold on economic interests

Wednesday, June 10th, 2009

UPDATE: IFES has contacted us with an update to this report:

“North Korea exports between 2-3 million tons of coal, collecting approximately 200 million USD.”

Original Post:
Institute for Far Eastern Studies (IFES)
NK Brief No. 09-6-9-1
6/9/2009

The North Korean military, which has recently taken a hard-line position internationally with rocket launches, a nuclear test and inter-continental ballistic missile (ICBM) launch preparation, appears to be strengthening its position domestically, as well. It has reportedly taken charge of coal exports, previously the responsibility of the Cabinet, and other key economic interests.

According to sources inside North Korea, authority to export anthracite, the North’s most valuable export item, was transferred from a trading company under the control of the Cabinet to a military trading company earlier this year. North Korea exports between 200-300 tons of coal each year, collecting approximately two billion USD in foreign currency. Previously, this was shared among branches of the government, with the military, the Korean Workers’ Party and the Cabinet all similar export quotas.

One source stated, “Recently, China’s trade minister signed a contract for 60,000 tons of coal from a military-run trading company, and delivered one million USD-worth of corn as payment,” noting, “previously, North Korea’s trade partner [with China] was the Cabinet-controlled trade company.” The same source went on to note that it was “exceptional that as North Korea suffers from foreign capital shortages, it demands payment not in cash, but in corn…it looks like it is measure for military use.”

Other sources reported that, as of this year, the military has also taken control of the Bukchang Thermoelectric Power Plant, the country’s largest steam-powered electrical station. The Bukchang plant, built with Soviet supplies in 1968, can produce up to 2 million kW of electricity. It was formerly operated by the Ministry of Electric Power Industry, which is under the control of the Cabinet, but at the beginning of year, some authorities were purged on charges of bribe-taking and providing power designated for government facilities to foreign capital enterprises and other businesses. Since then, the military has run the plant.

The increased number of economic assets in control of the military reflects the military’s recently-strengthened position within the regime. The North Korean economy can be divided into several sectors: Kim Jong Il’s private fund, managed by Party operations; the military-industrial ‘second economy’; and the official economy, under the control of the Cabinet. The military’s increasing control over the official economy appears to be a move to completely implement ‘Military-first Politics.’

Posted in Coal, Electricity, Energy, Institute for Far Eastern Studies, International trade, Military, Mining/Minerals, Ministry of Coal Industry, Ministry of Power and Coal, Political economy | 5 Comments »

South Korea sanctions DPRK firms

Tuesday, June 9th, 2009

Earlier this year the UN Security Council issued a Presidential Statement in response to the DPRK’s April rocket (missile) test. In the Presidential Statement, three North Korean firms were blacklisted–Korea Mining Development Trading Corporation, Tanchon Commercial Bank, and Korea Ryongbong General Corporation–all of whom are suspected of having ties with the North’s missile and nuclear programs.

According to Yonhap, the South Korean government has also blacklisted these firms, though no South Korean firms have realtions with any of them:

This is the first time that South Korea has imposed financial sanctions on a North Korean company in relation to Pyongyang’s ballistic activity, the ministry said.

The ministry said that it will consider taking additional measures if the U.N. comes up with separate actions against the North for conducting its second nuclear test on May 25.

Read the full sotry here:
Seoul slaps sanctions on N. Korean firms for missile test
Yonhap
Koh Byung-joon
6/9/2009

Posted in Korea Mining Development Trading Corporation (aka Kapmun Tosong, KOMID), Korea Ryongbong General Corp, South Korea, Tanchon Commercial Bank | 2 Comments »

The Party Cell

Monday, May 18th, 2009

Daily NK
Yoo Gwan Hee
5/18/2009

In North Korea, the Korean Workers’ Party (KWP) cell is the lowest ranked organizational unit. The KWP is composed of the Central Committee, provincial committees, city and county committees, primary party committees, sectional party committees, and the party cell at the lowest level. The party cell, as the fundamental unit, carries out the Party’s aims and implements its decisions.

Every member of the Party is officially affiliated with a party cell. In principle, even the “Great Leader” Kim Il Sung and the “General” Kim Jong Il are included in the party cell structure and must carry out their roles and responsibilities such as reporting to the party cell secretary, undergoing reeducation sessions, and strictly adhering to party rules.

The rules and regulations of the KWP stipulate, “The party cell is the basis of life in the Party and, as such, concentrates the masses on the Party and is the combat unit of the Party which directly implements the party line and policies.”

The party cell has between 5 and 30 members; units with 31 or more members form a primary party committee with further cells beneath.

General meetings of the cells, as the leading organization of the Party, must be held at least once a month. The party cell secretary is an unpaid official.

The rules and regulations also delineate the duties of party cells as follows: ▲ establish the one-ideology system among the party members and the working masses; ▲ expand the lower ranks; ▲ enhance the party involvement of the members; ▲ strengthen the ideological education of both newly-admitted and candidate members and working masses; ▲ accept the requests of the working masses and combat counterrevolutionary elements; ▲ strengthen the societal organization of the working masses; ▲ embody the Cheongsan-ri spirit and the mindset of anti-Japanese guerillas in all business activities; ▲ toughen the Worker and Peasant Red Guard and prepare for mobilization; and ▲ report the party expenditures of the members and the candidate members to the party committees.

For the purpose of strengthening the party cells, the first party cell secretaries competition was held in the Pyongyang Gymnasium in March 1994. The second such competition was held 13 years later over a two-day period on October 27 and October 28, 2007 at the April 25 Cultural Hall.

In 1990, after the Chosun Central News Agency’s (KCNA) No. 5 Bureau No. 2 Cell members sent a letter pledging their utmost devotion to Kim Jong Il, the “Party Cell of Loyalty” concept was launched.

To stimulate the “Party Cell of Loyalty” idea, meetings, recitals of official speeches, decisions and decrees and research discussions were emphasized upon.

In this year’s New Year’s Editorial, the party cell was designated as the advance offensive vanguard unit and it was demanded that party members and workers collectively stir up reform.

Posted in Central Committee, Political economy, Worker's Party | Comments Closed

On the North Korean legal system

Monday, May 18th, 2009

From Slate (regarding the upcoming trial of Euna Lee and Laura Ling):

We do have some basic understanding about how the North Korean justice system is organized. The journalists will be tried by the Central Court, the nation’s highest judicial body. Usually, the Central Court only hears appeals cases from the lower, provincial courts, but for grievous cases against the state, it has initial jurisdiction. The Central Court is staffed by judges elected by the Supreme People’s Assembly, North Korea’s one-party parliament. The North Korean Constitution stipulates that each trial is to be conducted by one judge and two “people’s assessors”—i.e., lay judges—though special cases may be heard by a three-judge panel. (Appeals cases usually get the panel.) Legal education or experience is not an official prerequisite for becoming a judge, and rulings from the Central Court are not subject to appeal.

North Korean law does recognize the right of the accused to defend herself and to be represented by an attorney. According to the country’s penal code, either the defendant, her family, or her “organizational representatives” may select the defense attorney. As the two arrested journalists were not allowed access to any counsel during pretrial investigation, however, there are doubts that they will actually be allowed to select their own counsel. According to the U.S. State Department, there is “no indication that independent, nongovernmental defense lawyers [exist]” in North Korea in the first place.

The proceedings will be conducted in Korean, but the North Korean Constitution does grant foreign citizens the right to use their own languages during court proceedings. Trials are supposed to be open to the public, unless they might expose state secrets or otherwise have a negative effect on society. According to testimony from North Korean defectors, though, trials are often closed in practice. Announcements of the court’s findings and executions of sentences are often carried out in public as a means of educating the citizenry.

Thursday’s announcement from North Korea’s news agency did not specify what crime the two journalists are being charged with, though Pyongyang has previously accused them of “hostile acts” and illegal entry into the country. If they were prosecuted under a law regarding foreigners who “abuse” or “provoke national difficulty in order to antagonize” the North Korean people, they would face five to 10 years of “re-education” in a labor camp. Illegal entry carries a sentence of two to three years.

Previously, prisoners could be sentenced to death for a number of vague crimes, such as “ideological divergence” or “opposing socialism.” But subsequent to the enactment of a new penal code in 2004, the death penalty is reserved for four crimes: participating in a coup or a plot to overthrow the state, terrorism, treason, or “suppressing the people’s movement for national liberation.” In practice these four crimes seem to cover a wide range of activities, including, in one reported case from 2007, the making of international phone calls. Judicial proceedings are apparently not required for executions to be carried out.

As supplemental material, I have posted numerous DPRK statutes on this web page. To see the full list, scroll down the menu to “DPRK policies,” under which you can see them all. Of course, the DPRK is not a “rule of law” country, so the statutes themselves and even the constitution are not worth that much in terms of defining the “rules of the game” or defining/predicting the scope of “legitimate” government activity.

There have been several foreign law firms that have attempted to set up shop in the DPRK. Currently the only firms with legal offices or a periodic presence are: Hay, Kalb, and Associates, Kelvin Chia Partnership, and Chiomenti of Italy (formerly Birindelli e Associati ).

Read the full article below:
Objection, Dear Leader!
Slate.com
Nina Shen Rastogi
5/14/2009

Posted in DPRK Policies, Supreme Court, Uncategorized | Comments Closed

KPA takes over party and intel offices

Sunday, May 10th, 2009

According to Yonhap:

North Korea has carried out a reshuffle of government organizations, shifting the jurisdiction over its overseas espionage and cash cow operations from the Workers’ Party to the military, sources said Sunday.

The North has separated its two major spying and cash-generating overseas trade units — Room 35 and Operation Unit — from the Workers’ Party and transferred them to the People’s Armed Forces, the sources said on condition of anonymity.

The Operation Unit is known to train and send agents to South Korea, the United States and Japan, but its recent operations are believed to have shifted toward trades of arms, drugs and fake bills.

Room 35 is North Korea’s intelligence unit in charge of collecting information from South Korea, Japan, China, Southeast Asia and Europe.

Kim Hyon-hui, one of the two North Korean agents who blew up a Korean Air flight over Myanmar in 1987, was believed to have belonged to the Room 35 and to have been trained in the Operation Unit.

“North Korea’s Operation Unit handles a large amount of cash through illegal activities such as counterfeiting currency, manufacturing drugs and exporting arms,” a source said. “With the Operation Unit now under its wing, the North Korean military will have a major source of independent financing.”

The latest shakeup appears to be intended to address overlapped functions among government organizations and raise their overall efficiency, according to North Korea watchers.

The sources said North Korea may be trying to shed a terrorism-related image from its ruling Workers’ Party, which has tagged along since the 1987 flight bombing.

The full article can be found here:
N. Korea puts spy agencies under military control in major shakeup
Yonhap
5/10/2009

Posted in Korean People's Army, Worker's Party | 1 Comment »

UNSC blacklists three DPRK companies

Friday, April 24th, 2009

In response to the DPRK’s rocket launch, the UN Security Council issued a presidential statement containing the following:

The Security Council reiterates that the DPRK must comply fully with its obligations under Security Council resolution 1718 (2006).

The Security Council demands that the DPRK not conduct any further launch.

The Security Council also calls upon all Member States to comply fully with their obligations under resolution 1718 (2006).

The Security Council agrees to adjust the measures imposed by paragraph 8 of resolution 1718 (2006) through the designation of entities and goods, and directs the Committee established pursuant to resolution 1718 (2006) to undertake its tasks to this effect and to report to the Security Council by 24 April 2009, and further agrees that, if the Committee has not acted, then the Security Council will complete action to adjust the measures by 30 April 2009.

(Read the full text of the statement here)

Today the Security Council followed up this statement (and resolution 1718) by voting to blacklist three North Korean companies. According to Reuters (via the Washington Post):

The North Korea sanctions committee met a Friday deadline set by the Security Council on April 13 to produce a list of goods and North Korean entities to be blacklisted under Security Council resolution 1718, passed after Pyongyang’s October 2006 nuclear test.

The three companies put on the list are Korea Mining Development Trading Corp., Korea Ryongbong General Corp. and Tranchon (Tanchon) Commercial Bank, according to a copy of the committee’s decision obtained by Reuters.

The decision said the three companies were linked to the military and active in procuring equipment and financing for North Korea’s ballistic missile and other weapons programs.

The blacklisting prohibits companies and nations around the world from doing business with the three firms, but the impact of the action might be largely symbolic.

One Western diplomat said the three blacklisted firms had subsidiaries that also would be subject to U.N. sanctions.

Committee members also decided to ban the import and export of items on an internationally recognized list of sensitive technologies used to build long-range missiles capable of delivering weapons of mass destruction.

The US imposed sanctions on three North Korean companies in the Federal Register earlier this year. Of these three companies, one has made the UNSC list: the Korea Mining and Development Corporation. I can only speculate as to the fate of the other two mentioned in the US Federal Register, Mokong Trading Corporation and the Sino-Ki company.

Read more below:
UNSC Presidential Statement

U.N. committee puts 3 North Korea firms on blacklist
Reuters (via the Washington Post)
Louis Charbonneau
4/24/2009

Posted in Korea Mining Development Trading Corporation (aka Kapmun Tosong, KOMID), Korea Ryongbong General Corp, Mokong Trading Corporation, Sino-Ki, Tanchon Commercial Bank, UN, UN Security Council | 2 Comments »

Art in the DPRK

Wednesday, April 22nd, 2009

The Art Newspaper published an interesting piece on how artists are trained and art is produced in the DPRK.

On artistic training:

All DPRK artists are members of state-run studio complexes where the art is actually created, and every artist has a formal ranking. These start at level C, move up through B and A, followed by “Merited Artists”, then “People’s Artist”. There are around 50 “Merited Artists” still working today and perhaps 20 “People’s Artists”, the best known being Son U Yong, Kim Chun Jon, Jong Chang Mo, Li Chang and Li Gyong Nam. Almost all artists working in oil and brush-and-ink are men but there are exceptions—for example Kim Song Hui, well known for her brush-and-ink work, is also a People’s Artist. There is also the Kim Il Sung Prize but artists normally have to be at least over 50 to receive this highest accolade, the most famous recipient being Jong Yong Man.

The top art institute is the Pyongyang University of Fine Art with various sections: brush-and-ink, oil, sculpture, ceramics, mural painting and industrial arts. Young artists are selected from around the country and if they are judged sufficiently skilled they will study here. Pyongyang University requires a minimum of five years study: at the moment there are 7-10 students studying oil painting and around 20 studying Korean brush-and-ink painting. In total there are around 150 students a year in the fine art department. Students enjoy class outings to local factories and much time is devoted to object and life drawing although not with nude models but, for example, girls in swimming costumes.

After finishing university the students are selected by various art studios—the Paekho or Central Art Studio, the Songhwa established in 1997 for retired artists, and the most active studio-compound, the Mansudae in Pyongyang.

On artistic style:

The art itself looks like classic Social Realist propaganda, that Beaux Arts technical tradition received through Russia, maintained by the Soviet Union and now, with the transformation of China, only being practised in North Korea, unchanged for more than 50 years. Abstract painting does not exist as it is deemed bourgeois and anti-revolutionary, and if some representational art can be purely aesthetic without political overtones, many landscapes do portray places of the revolution or of political significance.

Obedience to the ideology and excellence in its clear communication to others are what matter rather than any individual glory. This ensures an anonymity to much DPRK production that only its cognoscenti can penetrate. Experts can not only assign an artist’s name to a work, they can also determine whether it is an “original” or one of endless “copies” of an image.

Ever since the founding of the state in 1948, certain themes have maintained their place in the officially approved iconography of the “Fatherland” and it is hard to establish which artist first produced a specific image and when. These same images can be reproduced countless times over the decades. Thus much detective work is required to trace the origin of an image, the only real source being the annual “Yearbook” cataloguing official production.

As [Nick] Bonner explains: “The skill level is very high in academic drawing and painting, but the production is massive and it’s hard to find ‘pure’ pieces, you have to know the provenance or where things were first found.” Indeed, even the museums display copies, ostensibly to “preserve” the quality of the originals kept in storage.

More information on the Mansudae Art Company:

Here visitors, especially foreign tourists, are welcome to see the artists working in their small studios, watch the instructional video on the operation of the company, and buy some work from the large gift shop. Prices at the very top end for a “People’s Artist” can reach as high as €15,000, the favoured currency for all foreign transactions.

Woodblocks are a North Korean speciality, though nowadays they have been almost entirely replaced by lino prints with an attractive rich ink finish. The first ever exhibition of such prints in the United States, loaned from Bonner’s collection, opened last year at New York’s Korea Society, which is currently touring through the country. Initial editions are often very small, less than ten, but if the image proves popular the lino is either re-cut by the same artist or by a “copy” artist and signed by him.

At Mansudae there are also small-scale ceramic sculptures available, naturally of a propagandist nature, as well as more classical ceramics. There is even a startlingly realistic sculpture, reminiscent of Duane Hanson, of North Korea’s most famous ceramicist Uchi Soun (1919-2003) and examples of his widely-exhibited work for as much as €10,000 a pot. There are also striking large-scale figurative watercolours on paper and the highest-quality work, local ink paintings called “Chosonhwa”, some of which will be “thematic art” on revolutionary themes, as each artist will produce at least one a year for the state to show his support for the country. Mansudae employs some 150 of these ink-artists, compared with perhaps 60 oil painters. With some 1,000 members Mansudae produces at least 4,000 top level original works a year, though it also has a factory-style section producing copies for western hotels. Employees, who work a five day eight-hour week, are paid, dependent on level, at a similar rate to the national average, €35 a month for a worker and €70 for a technician.

More information on art in the DPRK:

1. The Paekho Art Studio has partnered with Felix Abt to sell their art internationally. Their web page is here. The Mansudae Art Studio also launched a web page (click here).

2. Nick Bonner has a huge collection of North Korean art. I have seen quite a bit of it, and it is impressive. He also sells North Korean art through the Pyongyang Art Studio.

3. There are a couple of books on North Korean Art. They are very different: North Korean Posters: The David Heather Collection and Art Under Control in North Korea.

4. (h/t Werner) The Mansudae Overseas Development Group, which has been building monuments and buildings across the developing world (mostly in Africa) is part of the Mansudae Art Studio.

Read more below:
Inside the Democratic People’s Republic of North Korea
The Art newspaper
Adrian Dannatt
3/18/2009

Posted in Art, Koryo Tours, Mansudae creative Company (art studio), Mansudae Overseas Development Group | 2 Comments »

DPRK cell phone subscribers top 20,000- costs, services detailed

Wednesday, April 22nd, 2009

Institute for Far Eastern Studies (IFES)
NK Brief No. 09-4-22-1
2009-04-22

Since 3G cellular phones were first offered in North Korea last December, more than 20,000 customers have signed up for service. According to a recent report by the Choson Sinbo’s Pyongyang correspondent, the North’s cellular network is capable of providing voice and SMS services to as many as 126,000 customers in the Pyongyang area and along the highway between Pyongyang and Hyangsan, and is available to North Korean residents as well as foreigners in the North.

Anyone can procure a cell phone in the North by submitting required information on an application to a service center, along with an application fee of 50 Yuan, or approximately one Euro, or 130 Yen. Currently, telephones are selling for between 110 Euros for basic handsets, to as much as 240 Euros for phones with cameras and other functions. When a phone is turned on, a white ‘Chollima’ horse graphic appears over ‘Koryolink’ in blue, all with a red background. The trademark is said to mean, “The Choson spirit, moving forward at the speed of the Chollima to more quickly and more highly modernize the information and communication sector.”

To use one’s phone, a pre-paid phone card must be purchased. Three types of phone cards are sold for 850 won (A), 1700 won (B), and 2500 won (C), with ‘B’ and ‘C’ cards offering 125 and 400 minutes ‘free air time’, respectively. In order to see to it that its customer base continues to grow, the communications company plans to adjust prices, and offer services such as television and data transmission. Video and picture transmission and other technological preparations have already been made.

As has been previously reported, the service is provided by CHEO Technology Joint Venture Company, owned by the Choson Posts and Telecomm Corporation (KPTC) and Egypt’s Orscom Telecom Holding. There are now two service centers within Pyongyang. In December of last year, only one International Communications Center was established, but as service grew, a temporary sales office was set up in mid-March. The North Korean government purports to provide cellular service as part of its plan to improve the lives of the masses, and the number of subscribers is climbing daily. CHEO Technology plans to extend the coverage area to every major city, along all highways and along major rail routes throughout the country by the end of the year, with the ultimate goal of providing cellular service to every residential area in the nation by 2012.

Posted in Cell phones, CHEO Technology Joint Venture Company, Communications, Foreign direct investment, Ministry of Post and Telecommunications, Orascom Telecom Holding | 2 Comments »

Jang moves to NDC

Thursday, April 16th, 2009

A couple of weeks ago, the DPRK anounced that Jang Song taek had been appointed to the National Defense Commission.

Today, Michael Madden sent me a biography (CV) of Jang he put together. You may download it here in PDF format.

Also, the Los Angeles Times published an article about Jang. You can read the LA Times piece here.

Posted in National Defense Commission | Comments Closed

Last week in North Korea’s government

Sunday, April 12th, 2009

Jang Song-taek, Kim Jong il’s brother in law, and his senior aid were promoted to the DPRK’s top governing body the National Defense Commission. Jang was recently elected to the Supreme People’s Assembly last month.

Of slightly less interest was the fact that Kim Jong il was reappointed to the National Defense Commission as well.

According to Yonhap, the Supreme People’s Assembly, which formally “elected” Kim and Jang to the NDC also unanimously voted to revise the DPRK’s constitution for the first time in 11 years. They did not announce what those changes were intended to be.

This session of the Supreme People’s Assembly saw the first video appearance by Kim Jong il since last summer when he is reported to have suffered a stroke.

And according to IFES, the SPA approved the state budget:

DPRK sets 2009 budget at USD$3.45 billion
Institute for Far Eastern Studies (IFES)
NK Brief No. 09-4-13-1
2009-04-13

On April 9, North Korea opened the first session of the 12th Supreme People’s Committee, at which this year’s budget, 5.2 percent larger than that of last year, was passed. Pyongyang set the 2009 budget at 482.6 billion Won (1 USD=140 Won).

At this meeting, North Korea’s newly appointed Minister of Finance Kim Whan-su reported on last year’s budget and introduced the spending plan for 2009. While details were not revealed, it was noted that the overall budget had grown by 5.2 percent, with expenditures up 7 percent. The 2008 budget had been set at 451.5 billion won. It was also reported that last year’s spending was 1.6 percent over-budget, but that 99.9 percent of budgeted expenditures had been carried out.

Minister Kim reported that taxes from Chinese enterprises and related national businesses had grown by 5.8 percent, and that cooperative organizations were up 3.1 percent, production earnings were up 6.1 percent, real estate income had grown 3.6 percent, and social insurance had brought in an addition 1.6 percent.

As for the expenditure plan, city administration was allotted an additional 11.5 percent, while mining of metal, coal, steal, and other natural resources was boosted by 8.7 percent, education received an additional 8.2 percent, public health care grew by 8 percent, farming was bumped by 6.9 percent, physical education by 5.8 percent, light industry by 5.6 percent, and cultural activities by 3.2 percent. National defense accounted for 15.8 percent of the overall budget, just as it did last year, meaning that 545 million USD will be put toward the military.

Kim explained that the 2009 budget was based on the idea of “reducing unproductive expenditures in order to find the utmost source of revenue to ensure perfect support for the funds necessary to strengthen national security, improve the lives of the people, and build an economically strong nation.”

At this meeting, Kim Jong Il was reappointed to the post of chairman of the national defense commission, and Kim Yong Nam was reaffirmed as the head of the Cabinet.

Posted in Cabinet, Fiscal & monetary policy, National Defense Commission, Supreme Peoples Assembly | 3 Comments »

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