According to the Daily NK:
Information from inside North Korea suggests that jurisdiction over border security has been moved from the Ministry of People’s Armed Forces to the National Security Agency(NSA), in a special order given by new leader Kim Jong Eun which has seen border security units undergoing an administrative switch to the NSA on April 16.
Read more below:
Below I have posted a summary of stories from the Fifth session of the 12th SPA. The stories cover the lead up to the SPA, the completion of Kim Jong-un’s succession (inheriting the title “First Chairman” of the National Defense Commission), and KCNA reports of the official DPRK state budget.
UPDATE 20 (2012-4-21): 38 North has posted three articles on the Party Conference and SPA meeting in Pyongyang. Read the articles by James Church, Aidan Foster-Carter, and Bruce Klinger.
UPDATE 19 (2012-4-20): Stephan Haggard, Luke Herman, and Jaesyung Ryu on the SPA meeting
UPDATE 18 (2012-4-19): Kim Jong-un calls for new industrial revolution at the Supreme People’s Assembly (Institute for Far Eastern Studies):
Kim Jong Un, the first secretary of the Workers’ Party of Korea (WPK) made his first public speech in front of thousands of people gathered to commemorate the centenary of his grandfather, Kim Il Sung. In his speech, he emphasized the importance of songun or military-first politics, construction of a powerful economy, and the need for a new industrial revolution in the military.
The fifth session on the 12th Supreme People’s Assembly was held on April 13. Premier Choe Yong Rim told the legislators the nation’s top priority is to build up the light and agricultural industries to become an economically powerful nation.
According to the KCNA, Premier Choe also reported on the results of last year’s accomplishments while presenting this year’s goals. He elaborated, “The total industrial production rose by 102 percent against last year (2011) and production of hydroelectric power, iron ore, zinc, generators, fertilizers, and magnesia clinker has significantly increased.”
Other achievements of 2011 were announced, completion of Huichon Power Station, technological improvements in three major chemical factories (Hungnam Fertilizer Complex, 2.8 Vinalon Complex, and Namhung Youth Chemical Complex), and construction of high-rise apartments in the Mansudae area in Pyongyang.
It also stressed that the development and joint venture of special economic zones (SEZ) will be strengthened to promote economic and technological cooperation with foreign countries.
Finance Minister Choe Kwang Jin reported on the state budget, stating that last year’s revenue was 101.1 percent, while local government budget reached 112.8 percent. The national budget expenditure was 99.8 percent. For this year’s national budget, revenue was set higher at 108.7 percent and expenditure at 110.1 percent.
Out of the targeted state budget revenue of 108.7 percent, the detailed for budget revenue increase is as follows: transaction revenue (107.5 percent), national corporation profit (110.7 percent), cooperative organization profit (105.3 percent), real estate usage revenue (101.9 percent), and social insurance (101.7 percent).
As for the aimed 110.1 percent increase for this year’s national budget expenditure, the breakdown of the increase is as follows: light and agriculture industries (109.4 percent); power, coal, metal, railroad industries (112.1 percent); basic construction (112.2 percent); science and technology development (110.9 percent); education (109.2 percent); health (108.9 percent); social insurance and welfare (107 percent); sports (106.9 percent) and culture (106.8 percent).
From the total budget expenditure, 15.8 percent will be allocated to national defense and special scholarships and aid will continue to be provided to ethnic Korean children in Japan.
More below…
According to the International Business Times (2012-4-3):
Last month, North Korea invited 14 scientists from eight different countries — five alone from the U.S. — to attend a conference with 75 North Korean scientists, and provide their expertise on restoring the country’s environment and securing domestic food supplies. Dr. Margaret Palmer, executive director of Socio-Environmental Synthesis Center at the University of Maryland and one of the scientists who appeared at the conference, recently spoke with the New York Times about her assessment of North Korea’s ecological crisis and its government’s capability to deal with it.
“It’s a depressing landscape, especially this time of year,” Palmer told the Times. “Everything is just mud and everything is being farmed, or attempted to be farmed. But their ability to produce food is being dramatically compromised by a cascade of effects caused by deforestation.”
North Korea’s environmental crisis started in the 1950s during the Korean War, which resulted in massive forest fires and widespread deforestation. The situation was exacerbated during the 1990s when droughts and floods destroyed crops and caused a major famine that killed hundreds of thousands of people. Recovering forests were raided by desperate villagers for food and fuel, many surviving by eating grass and tree bark.
Although the major environmental problems were clear to Palmer, she expressed doubts about the North Korean scientists’ approach to them.
“The presentations were almost exclusively about how to promote agriculture … It felt like [the North Korean scientists] had a sense of the direction of the scientific community in the rest of the world but that they lacked the technology and understanding to implement any of it,” Palmer said.
In contrast, Peter Raven, president emeritus of Missouri Botanical Garden in St. Louis, offered praise for North Korea’s efforts to reforest through planting crops alongside trees.
“They had a fine understanding of agroforestry principles and were applying them in a very understanding way to reforestation,” Raven told Science Magazine.
Norman Neuriter, director at the American Association for the Advancement of Science, who selected the American experts for the conference, said the gathering was heavily monitored and restricted, and expressed disappointment with the limited communication between the advisory team and North Korean scientists.
“One would like to have had more individual interaction, one-on-one or two-on-two, but that wasn’t possible,” Neureiter told the Atlantic Wire.
“We weren’t allowed to talk informally with the scientists,” Palmer told the Times. “We were escorted to separate rooms during coffee breaks and there was no time to casually chat and ask questions.”
Despite the restrictive atmosphere of the conference, the scientists are hoping to move forward with environmental restoration projects, though it is not yet clear how political tensions over North Korea’s nuclear program will impact future collaboration efforts. It is clear that the government must mobilize quickly if it is to avoid another disaster like it experienced during the 1990s.
Further resources below:
1. Q. and A.: North Korea’s Choked Environment
2. Seeking Cures to North Korea’s Environmental Ills
3. The Environment Is So Bad in North Korea, They’ll Even Let Americans Help
Aidan Foster-Carter wrties in the Asia Times:
The first quarter of 2012 is almost over. Where did it go, so fast? And for those parts of the world where the calendar is marked by four distinct seasons – which doesn’t apply to much of Asia, but very much includes the Korean peninsula – spring has begun to arrive. Welcome warmth and relief, after the rigors of chilly winter: an especially harsh one in North Korea.
Pictured Above (Google Earth: 39.018532°, 125.728943°): The Central Committee of the Kim Il-sung Socialist Youth League in Pyongyang (청년동맹중앙위원회)
According to the Daily NK:
Chosun Central News Agency reported today that Ri Yong Cheol, the 1st Secretary of the Kim Il Sung Socialist Youth League, has been dismissed, replaced by Jeon Yong Nam.
Ri was removed by the 47th plenary session of the organization’s central committee in Pyongyang yesterday for reasons related to his age, according to the report. Ri, the son of former Workers’ Party Guidance Department Vice Director Ri Hwa Seon, had been in the job since December, 2007. He was also on the funeral committee at the death of Kim Jong Il.
The Kim Il Sung Socialist Youth League is among the first political organizations with which young North Koreans come into contact. Acting as the youth wing of the Chosun Workers’ Party, its membership, comprised of persons aged 14-30, is estimated at approximately five million.
Here is coverage in Rodong Sinmun:
The 47th plenary meeting of the Central Committee of the Kim Il Sung Socialist Youth League was held in Pyongyang on March 22.
At the meeting former First Secretary Ri Yong Chol was relieved of his post and recalled for his age reason and Jon Yong Nam was posted instead.
Here is what Wikipedia has to say about the Kim Il-sung Youth League:
Kim Il Sung Socialist Youth League (Korean: 김일성사회주의청년동맹, Hanja: 金日成社會主義靑年同盟) is a Korean youth organization. It is the main youth organization in DPR Korea.
It was founded by Kim Il-sung on January 17, 1946 as the Democratic Youth League of North Korea. It became the youth wing of the Workers Party of North Korea, later the Workers Party of Korea. It was renamed the Democratic Youth League of Korea and in May 1964 renamed as the League of Socialist Working Youth of Korea.[1] It assumed its present name on its 50th anniversary in 1996.[2]
The 47th plenary meeting of the Central Committee of the Kim Il Sung Socialist Youth League was held in Pyongyang on March the 22th of 2012. At the meeting former First Secretary Ri Yong Chol was relieved of his post for his age reason and Jon Yong Nam was elected to the post.
Read the full story here:
KIS Youth League Gets New Head
Daily NK
Kang Mi-jin
2012-3-23
Click image above to see KCNA video of interview with Yun Yong-sok, vice department director of DPRK Joint Venture Investment Committee
According to KCNA (2012-3-23):
The Democratic People’s Republic of Korea is willing to further improve its environment for foreign investment, Yun Yong Sok, a vice department director of the DPRK Committee for Investment and Joint Venture, told KCNA.
He said:
The nation’s economy is gaining momentum, with many industrial establishments and power stations being built across the country.
It is a consistent policy of the DPRK Government to enhance economic cooperation with other countries, while beefing up its self-reliant national economy.
In December last year, the government amended investment-related laws, including the DPRK Law and Regulations on Foreign Investment, laws on joint venture and joint collaboration and the Law on Foreign-funded Businesses and Foreigners’ Tax Payment, in step with the nation’s developing economy and international practices.
It enacted the law on economic zone on Hwanggumphyong and Wihwa islets in the River Amnok and revised and supplemented the law on the Rason economic and trade zone.
The joint development and management in the two economic zones takes on a new way of cooperation. Now it has been under way in a creditable way, driven by the active efforts of both sides of the DPRK and China.
Contracts on joint venture and joint collaboration have been on increase with the investment environment changing for the better.
Rare earth abundant in the country and infrastructure projects lure foreign investment in the DPRK.
The committee will pay deep attention to ensuring the interests of foreign investors, while invigorating the exchange and cooperation with governments, investors and businesses.
In other news, KCNA has adopted the American colloquialism “beefing up”.
According to the Daily NK:
The North Korean authorities have ordered the formation of ‘Day of the Sun Gift Preparation Committees’ at the provincial Party level and subordinate ‘Day of the Sun Gift Subcommittees’ at the city and county scale, Daily NK has learned.
A Yangkang [Ryanggang] Province source who spoke with Daily NK on the 6th explained, “The ‘Day of the Sun Gift Preparation Committee’ was formed at the start of this month by the provincial Party Committee to prepare for the Suryeong’s birthday, and groups of areas were banded together to form the ‘Day of the Sun Gift Subcommittees’.”
“There was no distribution for February 16th,” the source recalled. “Possibly because the central Party received reports of popular discontent about this and asked some searching questions of provincial cadres, now they are running around trying to get ready for April 15th holiday distribution.”
“Enterprise traders are mostly bringing in soy bean oil, soap and towels via Chinese customs. They are printing ‘Day of the Sun 100th Anniversary’ on the towels,” he added.
The formation of the committees has also reportedly had a noticeable influence on levels of public expectation of the April 15th festivities, representing as it does the first time that ‘Gift Preparation Committees’ have been formed since they disappeared without a trace in the mid 1990s.
“They are already saying that each household is going to receive a huge gift for this Day of the Sun, so people are really expecting a lot,” the source said, adding, “The rumor among jangmadang traders is that every house is going to get a DVD player made by Hana Electronics in Pyongyang.”
As the source noted, the move comes following significant public discontent at the lack of gifts on February 16th (Kim Jong Il’s birthday).
On February 21st, Daily NK reported new of that discontent, citing a Yangkang Province source as saying, “There was a flood of criticism about the total lack of holiday distribution for Gwangmyungsung Day, so they began telling every organ, enterprise and people’s unit meeting, ‘That is because we are close to the 100th anniversary of the Suryeong’s birth, and the Party is preparing big gifts for that.’”
North Korea began giving snacks, rice and other foodstuffs to the people every year on the birthdays of Kim Il Sung and Kim Jong Il, along with things like school uniforms and blankets every 5th and 10th year, in the 1970s. However, the system ceased to function in the 1990s as the country was gripped by famine and economic disintegration.
Meanwhile, sources also report that with the arrival of the early spring lean season, a time when many people on the Korean Peninsula have traditionally struggled to find sufficient sustenance, prices in the market are beginning to creep up.
According to the Yangkang Province source, “Until late last week the Yuan price was 607 won, but now it is up to 635 won. The price of rice has also gone from 3,300 won to 3,800 won.”
Read the full story here:
North Forms Party 4.15 ‘Gift Preparation Committees’
Daily NK
Lee Seok Young
2012-3-5
Institute for Far Eastern Studies (IFES)
2012-2-29
North Korea is likely to make an official announcement of its new economic development plan in April to commemorate the centennial anniversary of Kim Il Sung’s birthday, which is also celebrated as a national holiday in North Korea as the “Day of the Sun.” In addition to the new economic plan, North Korea is also planning to align organizations and establish appropriate legislations in the foreign economic sector. The Daepung Group was recently consolidated with the Joint Venture and Investment Committee (JVIC).
According to an unnamed North Korean source, “many organizations in North Korea with overlapping functions or with unsatisfactory performance were merged as a part of promotion of North Korean socialism. The Daepung Group was merged as a bureau under the JVIC.”
The two chiefs of the Daepung International Investment Group (Daepung Group) were Workers’ Party of Korea (WPK) Unification Strategy Department Director Kim Yang Gun, who served as the chairman of the board, and Pak Chol Su, a Korean-Chinese businessman, who headed the group as the president and elected standing vice-chairman. They were in charge of attracting large foreign investment needed for the “10-Year State Strategic Plan for Economic Development (2011-2020).”
The WPK Director of Administration Jang Song Thaek is in charge of the Daepung Group and the JVIC and is likely to have ordered the merge of the two organizations to increase work efficiency. Kim Yang Gun’s position as the head of Daepung weakened after the souring of inter-Korean relations despite his efforts to bring investment from the South. As a result, Kim will likely step down from his position and Pak Chol Su and the executive management of the JVIC will likely manage the Daepung Group in the future.
The JVIC has also faced changes in its organization with the appointment of Ri Gwang Gun as the new head of the JVIC. Other foreign investment companies and related organizations were merged and the roles of the directors were revised.
The Beijing office of the JVIC has opened its doors in December 30 last year. North Korea is likely to dispatch experts and professionals from various organizations to provide “one-stop service” to attract more investment to North Korea, starting from this April.
Kim Chol Jin is the person in charge of the JVIC Beijing Office. The Rason Special Economic Zone (SEZ) and Hwanggumpyong SEZ will have a change in leadership, as Hong Suk Hyong will replace Kim Il Young as the new vice-chairman.
The previous chairman of the JVIC, Ri Su Yong, who was also the former ambassador of the DPRK to Switzerland, is now serving as the new advisor to Kim Jong Un at the Secretary’s Office.
*Addendum: Choson Exchange has been talking about this for a couple of months. See posts here (2012-3-4), here (2010-2-13) and here (2012-1-10).
Institute for Far Eastern Studies (IFES)
2012-2-16
The KCNA announced on February 9 that the “Foreign Investment Bank Law” was modified and supplemented. According to the report, the amended law included “those businesses in operation for over ten years are exempt from income tax on the profit collected in the first year and Bank of Chosun [Bank of North Korea] will be exempt from business taxes on the interest revenue collected from loans provided to companies on favorable terms.”
The previous law already had regulations about exemption of transaction taxes but nothing on business tax. The foreign investment company and foreigner tax law regulated that two to ten percent of profit to be paid by the foreign companies in service and construction sectors.
While the prior law stated, “tax exemption will be provided for the first year for income tax on those businesses over ten years old, and 50 percent exemption will be given in the next two years,” the “50 percent limit” was omitted in the amended legislation.
According to the KCNA, “The law has 5 chapters and 32 articles which included the contents of categorization and specification for areas to establish foreign investment banks, property rights, and autonomy on business management.”
On February 10, the KCNA announced that the Foreign Investment Company Registration Law, Foreign Investment Company and Foreigner Tax Law, and Foreign Investment Company Bankruptcy Law were amended.
In reference to the ordinance of the Supreme People’s Assembly Standing Committee signed on December 21, 2011, provided that this law consisted of 6 chapters and 34 articles with specifics on business establishment, address, tax, and tariff registrations. However, no other details were given.
On January 30, the KCNA also reported the “Labor Law of Foreign Investment Company” was amended and supplemented. This law consists of 8 chapters and 51 articles on hiring and labor contracts, rest, protection, social insurance, and security.
In addition, the “Financial Management Law of Foreign Investment Company” and “Fiscal Law of Foreign Investment Company,” was also modified. However, no other details were provided.
The KCNA has reported that North Korea modified foreign investment laws previously in 1992, 1999, and 2004. This year marks the fourth amendment.
The news elaborated, “The DPRK is encouraging foreign companies to investment in our country based on complete equality and reciprocity and will not nationalize or collect the invested asset,” reiterating the safety and security of foreign investment.
Some analyze the recent amendment as an effort to attract more foreign investment into the country. Similarly, North Korea has recently announced the Special Economic Zone Act for the development of Hwanggumpyong and Wiwha Islands. In addition, the state-run Academy of Social Sciences published a newsletter emphasizing the rational tax investigation for foreign companies.
The Daily NK also reported on this development:
On February 10th, Choson Central News Agency (KCNA) reported fresh amendments to North Korea’s laws governing foreign investment.
KCNA revealed, “Chosun’s law on the registration of foreign-funded enterprises has changed. 34 articles in 6 chapters of the law, which was made according to a December 21st, 2011 decision of the Standing Committee of the Supreme People’s Assembly to cover the founding, residence, taxation and customs of businesses, have been amended.”
As is ordinarily the case, specific amendments were not included in the report.
On February 9th, North Korea also announced revisions to its Foreign Investment Bank Law issuing exemptions from consumption tax. Last month also saw revisions to banking as well as labor and financial management laws.
The amendments appear aimed at assuaging the fears of Chinese enterprises over issues such as the threat of expropriation. Indeed, China is said to have last month rejected initial laws governing the management of special economic zones at Hwanggeumpyeong and Wihwa Island nr. Shinuiju for a variety of reasons.
Read the full story here:
NK Investment Laws Get Another Makeover
Daily NK
Kim Tae Hong
2012-2-13
UPDATE 2 (2012-4-12): North Korea and China attracting investors for Rajin Port development (IFES):
China is currently actively recruiting investors to build additional wharfs in Rajin Port.
China’s Dandong City Industrial and Information Association (丹东市信息协会) announced that it is seeking investments for the construction of tanker wharf under 10,000 ton and affiliated facilities. This organization has received 45 year usage rights from the Rason City People’s Committee and stated that it needed 330 million CNY (52 million USD) to cover the construction cost. According to the association, the investment is attractive because of its geographic location, reduced transit time and costs, and tax-free benefits, for which a special permit was obtained from the North Korean authorities granting trade goods coming from Jilin Province at the Hunchun Port to be allowed entry tax-free. In addition, cargo will be permitted to be sent from Rajin Port to other ports in China.
Meanwhile, North Korea is also planning to build a new port in the Rajin-Sonbong area with a state-of-the-art container distribution capacity. According to the “Rajin New Port Development Plan,” Rajin port development will undergo major transformation as an international hub port, similar to Busan Harbor, unlike the previous small-scale renovations of Piers 1, 2, and 3. This new port is expected to be built across from the current Rajin Port.
Rajin Port development was initially considered as a remodeling project to update the existing wharfs. In 2003, China began to implement construction of Piers 1, 2, and 3. However, the piers began to deteriorate and for the lack of railway and road infrastructure in the area, it delayed the transportation and distribution and could not perform its full function. As a solution, in 2008, North Korea transferred the usage right of Pier 1 to China and Pier 3 to Russia. At that time, Pier 1 was developed to primarily transport chemical fertilizers but it was recently updated as a transportation dock for coal. Russia, in addition to the port, also carried out a modernization project of the Rajin-Hassan railway system to improve the transport of containers.
The new port development plan as suggested by North Korea indicates Jian Group of China as the responsible party for developing the new port into a container port. However, considering that North Korea’s industry does not call for container ports, it is more likely that North Korea is expanding the port to make it a hub port to ship cargo to China, Russia, and Europe. Considering Rajin Port’s geographical advantage, it is likely that North Korea is striving to make it into an international hub port that connects the Pacific with Northeast Asia.
China’s recent advertisement of investment is also considered to be linked with the new port development in Rajin Port.
UPDATE 1 (2012-3-1): Accoridng to Stratfor, the Chinese have denied they plan to make this investment.
The Chinese Foreign Ministry denied allegations made in a Feb. 16 South Korean media report regarding its agreement with North Korea to jointly develop the Rajin-Sonbong Special Economic Zone (SEZ), a port area in northeast North Korea commonly referred to as the Rason Special Economic Zone.
According to the Yonhap news agency, Beijing agreed in late 2011 to invest about 19 billion yuan ($3 billion) into Rason, for which it would receive the lease of three piers for 50 years. Under the agreement, Beijing would also build an airfield, a thermal power plant and a 55-kilometer (34-mile) railway track connecting Rason to Tumen, China. The Chinese Foreign Ministry claimed that the specific details of the report are untrue and that China and North Korea had agreed only in principle to develop the zone.
China has long exerted its economic influence in North Korea and has an interest in the strategically important Rason Special Economic Zone. Chinese involvement in Rason dates back to the 1990s, though Beijing increased its involvement considerably in 2005 when it secured the rights to one of the port’s piers. Beijing has been particularly involved over the past few years. While the details of the deal remain unknown, it is clear that Beijing has arranged to help Pyongyang develop Rason, possibly by connecting the remote port to northwest China. Such a development would revitalize the zone — to the benefit of both countries.
ORIGINAL POST (2012-2-15): China has committed to infrastructure projects in Rason. According to Yonhap:
China has secured the rights to build three new piers in a special economic zone in North Korea’s northeast and use them for 50 years, sources said Wednesday.
China will also build an airfield and a thermal power plant in the special economic zone known as Rason, as well as a 55-kilometer railway track between China’s northeastern city of Tumen and Rason.
North Korea and China reached an agreement late last year to build infrastructure in Rason with Chinese investment of about US$3 billion, according to the sources in Seoul and Beijing.
The Daily NK offers some more data:
China has agreed to dig out dock 4 at Rasun to make it possible for 70,000 ton vessels to dock and to construct a runway long enough to accommodate passenger and cargo aircraft within the SEZ; the railroad is due to be complete by 2020, while the development of dock 5 and 6 will follow that of dock 4, Yonhap sources claim.
This agreement was reportedly signed quietly by North Korea’s Joint Ventures Committee and the Chinese government shortly before Kim Jong Il’s death.
The North Koreans have sought the construction of an airport and expansion of the port for some time.
KITC published the image above in 1995 (Source here). If you look carefully on the right side of the picture you will see the site of a proposed airport.
Above is a more recent map of Rason published by the DPRK. In the middle of the above map you can see a small airplane which represents the desired location of a future airfield. It is in the same location as shown on the KITC map.
Here is the approximate location on Google Earth (42.397884°, 130.592084°):
If you look at the left side of the KITC photo you can also see that there are many piers, however today there are only three. I suspect that the new piers will be constructed south of the current piers and will look something like this:
The railway and power plant projects are intereting as well. There is already a thermal power plant in Sonbong, so I expect that the Chinese are simply renovating it so that it generates more power or is simply more reliable (Google Earth: 42.327275°, 130.382585°):
At a presentation at the Korea Economic Institute in Washington, DC, Andray Abrahamian reported that increased electricity supplies for the Rason Zone could come from China.
As for the Tumen (China) – Rason railway line…this already exists as well. The DPRK’s Hambuk Line (함북선) runs from Chongjin to Namyang (border with Tumen) to Rason:
The Tumen to Rason leg of this railway line, however, is approximately 156km (according to Google Earth) and likely runs pretty slowly. The proposed new Chinese-built Tumen-Rason line is intended to be just 1/3 the distance!
Additional Information:
1. The Russians built a railway line from their border to the Rajin Port. Learn more here.
2. The Chinese and Russians have already rented two of Rajin’s three ports.
Read the full stories here:
China secures right to use 3 piers to be built on N. Korean port for 50 years
Yonhap
2012-2-15
China Reportedly Grabs 3 Docks and More
Daily NK
2012-2-15
