North Korean Economy Watch

According to the Daily NK:

Even though some of North Korea’s farmland including much around Shinuiju was flooded this year, in other provinces food production has been greater than in previous years, according to sources.

One source from South Pyongyang Province told The Daily NK yesterday, “There have been heavy rains and rivers overflowing in some places this year, but the rice crop is better than last year’s. It seems to be thanks to imported fertilizer from China.”

The Food and Agriculture Organization (FAO) and World Food Program (WFP) also reported last month that North Korea’s grains yields had increased by 3 percent over last year, to 4.48 million tons in total.

The source explained, “In April and May this year fertilizer came just in time, so it helped with the farming. Since the situation in that period decides the number of ears of grain, if you don’t provide fertilizer production can be halved.”

Another source from Yangkang Province agreed, saying, “This year in the jangmadang in Hyesan, 50 kilos of fertilizer was selling for 220 Yuan. The price was quite expensive, but people used it even on their private fields because it was so beneficial for production.”

However, the source said angrily, “Even though farming was better than last year, the year’s distribution for farmers was a mere 30kg of rice and 50kg of corn, 20kg of rice and 30kg of corn short of last year’s distribution. So farmers complained about it but the only answer was ‘more food should go to the military’. They were lost for words.”

The source said, “The authorities keep reiterating that thanks to the Youth Captain we will live better in the future, but then give us less distribution; who would believe this? Does this not mean that the Youth Captain will also try only to feed the military?”

He added, “In the end, the vicious circle where farmers on collective farms steal rice from the farm continues. Farm cadres have already siphoned off what they want, and then farmers also do that in groups.”

The source explained, “Due to the lack of electricity and frequent machinery failures, the threshing is still going on now. Military trucks are always waiting by the threshing location, and as soon as it is done, the rice goes to military bases.”

Furthermore, he added, “Rice provided for the military is also stolen by high officials, so normal soldiers are provided only with corn.”

Previous stories about the DPRK’s food and agricultural production can be found here and here.

Stories about the UN World Food Program and FAO can be found here and here.

Read the full story here:
Higher Yields and Lower Distribution
Daily NK
Shin Joo Hyun and Kang Mi Jin
12/17/2010

Pictured Above (Google Earth): Pyongyang Information Center and Annex

* AKA Pyongyang Informatics Center

Choi Sung, Professor of computer science at Namseoul University, writes in the IT Times:

I have been writing about North Korea’s IT industry since the start of this year. In this installment, I would like to introduce North Korea’s major information and communications institution. If the Choson Computer Centre (KCC) is called the centerpiece of North Korea’s IT R&D, Pyongyang Information Centre (PIC) is the mecca of their software development. The PIC, founded on July 15, 1986, was jointly funded by the United Nations Development Programme (UNDP) and Jochongnyeon (the pro-Pyongyang federation of Korean residents in Japan). It is situated in Kyong-Heung dong near the Botong River in Pyongyang.

The PIC was created as the Pyongyang Program Development Company and changed its name to Pyongyang Electronic Calculator Operator in October of 1988 and then again to Pyongyang Information Centre (PIC) in July of 1991. As of now, the best and the brightest of North Korea’s IT talent is developing various kinds of programs and devices at the PIC: nearly 300 IT professionals, who graduated from the North’s most prestigious universities such as Kim Il-sung University, Kim Chaek University of Technology and Pyongyang University of Science and Technology (PUST), are on the payroll of the PIC.

On the overseas front, the PIC has its branches in China, Japan and Singapore, where PIC IT experts are working on software development, and has teamed up with foreign companies to jointly develop software programs and expedite technology transfers. The PIC, North Korea’s major software developer, has been at the vanguard of these following areas: language information processing, machinery translation, document editing, global IMEs (Input Message Editor), computer-aided design (CAD), networks, database systems, fonts, multimedia, dynamic images, etc. For instance, the PIC’s database development taskforce consists of about 40 IT experts, who are all working on the development of information management systems for production lines, companies and other institutions. The PIC’s publishing group has been engaged in various R&D projects from the development of Chang-Deok, a PC word processor, to DTP (desk top publishing) systems for Mac computers. Last but not least, the PIC’s application software group is keen on CAD, virtual reality and the development of project management devices. The PIC has been developing a plethora of software products: embedded software, CAD, image processing, Korean-language information processing and systems, network management systems, multimedia dynamic images, etc. The PIC’s 3D CAD has been widely employed by North Korean and foreign architectural design companies and more sophisticated versions of it are coming out. What’s more, the PIC is ramping up its joint R&D efforts with overseas IT developers with a focus on the development of diverse image processing programs. Korean-language information processing and systems are about developing the technologies for character recognition, voice recognition, natural language processing and primary retrieval while the development of network management systems includes fire walls, security solutions, encryption, e-commerce, IC cards, instant messenger programs, mobile game programs, etc. They are also working on the development of multimedia and dynamic images: technologies for producing 3D materials, 2D cartoon production and the technology for adding accompaniments to images are being developed. The PIC’s font development team has developed 300 Korean fonts and a myriad of calligraphic styles for imported mobile phones and dot fonts for PDAs.

The PIC has thus far scaled up its IT exchanges with overseas information and technology companies as well as R&D institutions. A case in point is the North-South joint venture, HANA Program Center, which is located in Dandong-si in Liaoning, China and was jointly invested in May of 2001 by the PIC and North-South HANA Biz, a subsidiary of South Korea’s Dasan Network. Another showpiece of the PIC’s effort for joint R&D is the software development for fonts and Chinese character recognition in collaboration with Soltworks (an e-publishing software developer). On top of that, the PIC’s IT exchanges with overseas institutions have been on the rise.

As such, inter-Korean cooperation projects will serve as the driving force behind the PIC’s IT exchanges with South Korea. To that end, non-military sanctions imposed on Pyongyang should be eased, such as the Wassenaar Arrangement (a multilateral export control regime (MECR) with 40 participating states) should be eased to move US – North Korea relations forward and the US’s EAR (Export Administration Regulation) on the North should be scaled back. Above all, IT-initiated unification of the two Koreas should be preceded by pragmatic dialogues with the North and North Korea’s efforts for reaching out to other nations. As of now, the North needs to draw up a future blueprint to embark on phased cooperation with the S. Korean government and companies in a bid to open its doors to the international community.

UPDATE from a reader who has spent some time there:

[T]hey are an interesting institution that not everyone has a chance to see from the inside. What was interesting is that they really work on software for foreign markets (i.e. mobile software for well known international cell network providers). In addition to that they have an impressive library of books on all topics of software development which was up-to-date at the time I visited.

In contrast to the other institutions they immediately showed commercial accomplishments instead of where the leaders have walked. Employees have access to a gym too. A place out of place in Pyongyang. What I found interesting in the article is that the mentioned developments match some of those the KCC presents in their building. The PIC made much more an impression of a service unit for foreign customers than for the country itself. However, they are training hardware specialists for the infrastructure there.

Read the full story here:
North Korea’s IT Application Software Development Center – Pyongyang Information Centre (PIC)
IT Times
Choi Sung
12/6/2010

Institute for Far Eastern Studies (IFES)
NK Brief No. 10-11-30
11/30/2010

North Korea has recently revised the Pyongyang City Management Law in order to support ongoing modernization efforts by increasing the management and operational authority of the Cabinet and of the State Planning Committee. On October 21, the Cabinet newspaper ‘Minju Chosun’ ran an article emphasizing the need to ensure that necessary capital and supplies were guaranteed for the construction of 100,000 new residences in Pyongyang and now it appears the North is backing up this modernization drive with the law.

The legal code was revised in accordance with Order No. 743, passed down by the standing committee of the Supreme People’s Assembly on March 30 of this year, but was just recently made public in South Korea. What stands out in this newly revised law is that the central government has strengthened its hold on management and operations within the city.

Article 47 of the city management law states, “The Cabinet must naturally take control of and supervise Pyongyang management operations,” and Article 48 stipulates that the State Planning Committee and the Pyongyang People’s Committee establish and strictly follow detailed plans for each sector of management operations within the capital city. Article 47, of the former law (enacted on 26 Nov. 1998), which covered management projects within Pyongyang, was removed while five new articles were added. Article 17 covers housing construction, Article 27 covers management of street lighting, Article 43 covers the delivery of publications, Article 46 stipulates basic working conditions, and Article 51 guarantees that goods will be produced for Pyongyang markets.

Article 17 stipulates that “the construction of housing must completely guaranteed,” and Article 51 states that planning for and production of commercial goods for Pyongyang must be ensured “without fail.” Housing, goods, electricity, capital and other necessities for the modernization of Pyongyang have now been essentially legally guaranteed. New housing in the capital has been a priority for the North, with construction already underway and plans for 30,000 additional units next year and 35,000 more in 2012. In order to show off these new renovations day and night, Article 27 calls for the “logical installation of street lights” to brighten walkways, roads, and national monuments. The new legal revision appears to be yet another step toward shoring up the framework for establishment of a ‘Strong and Prosperous Nation’ and transition of power to yet a third generation of Kims.

The new law reinforces Pyongyang’s centrality in North Korea’s revolutionary ambitions, referring to the capital as “the home of Juche,” “the heart of the Korean people,” and “the face of the nation.”

Institute for Far Eastern Studies (IFES)

NK Brief No. 10-11-26-1
11/26/2010

North Korea has recently revised its law governing the planning of the People’s Economy, significantly strengthening the state’s ability to oversee and control economic activities throughout the country. The South Korean Ministry of Unification recently released the contents of the law, which the North revised on April 6, as well as details of two laws created by the Supreme People’s Committee Standing Committee on July 8; the Law on Labor Protection (Order 945) and the Chamber of Commerce Law (Order 946).

The new law on economic planning contains seven new articles, but since the details of the August 2009 revision were never made public, it is unclear when the new articles were added. What is clear, however, is how different the new law is when compared to the Law on Planning the People’s Economy that was passed in May, 2001 and the Economic Management Reform Measure enacted on July 1, 2002, both of which significantly boosted the autonomy of business managers and eased government restrictions on economic activity.

With the July 1 Measure, the authority of the National Economic Planning Committee was downgraded, central allocations were graduated based on managerial autonomy and profits, the central rationing system was dismantled, and wages were increased. While the economic planning law of 2001 and the July 1 Measure of 2002 eased restrictions on, and oversight of, the people’s economy, the newly-revised law strengthens state control. The new law appears to not only return but also bolster the central control mechanisms that were eliminated by the 2001 law.

Article 16 of the new law states that the planned economy will be based on prepared figures, while Article 18 states that enterprises, organizations and companies will operate on the principle of ensuring regulated numbers, and Article 24 requires the people’s economic plan, drafted by the Cabinet, State Planning Organization, and regional authorities, to be broken down in detail, by timeframe and indexes, and distributed to enterprises, organizations and companies by the end of October. The planning law passed in 2001 called for economic plans to be drawn up based on production statistics provided from ‘below’ and passed up through chains of command (Article 17), but this has been eliminated from the new law.

With the revision of the law on labor protection, North Korea has added more specific language to Article 12 of the ‘Socialist Labor Law’, which was established in April 1978. Article12 of the Law on Labor Protection states that the protection of laborers’ work is the primary demand of the socialist system, which sees the people as the most precious resource. The law strengthens the role of the state in protecting laborers, and identifies ‘difficult and strenuous’ jobs, including mining, fishing, and earthquake investigation. Workers in these fields are to be given favorable treatment, including the issuance of additional clothing, food and other rations.

In addition, the law covers the installation and maintenance of safety equipment, the issuance of protective gear, and additional protections for female workers. It also restricts work to eight hours per day and guarantees holidays and time off, health care, and protection of property. These and other articles in the law increase state management of workers, but defector testimonies paint a different picture. Most workers save their wages with the assumption that they will have to pay bribes, medical costs and other expenses out-of-pocket.

The law on commercial activity further details the ‘Chamber of Commerce Regulation’ handed down by the Cabinet in 2008. The law covers a range of duties and rights regarding commercial operations, including contracts and operations regarding joint ventures with foreign firms; legal letters of confirmation, certificates of country of origin and other paperwork related to trade issues; as well as exhibitions and conventions held in conjunction with foreign businesses.

UPDATE 2: Here is the actual Treasury Department Press Release (11/18/2010):

Treasury Designates Key Nodes of the Illicit Financing Network of North Korea’s Office 39

11/18/2010
WASHINGTON – The U.S. Department of the Treasury today designated Korea Daesong Bank and Korea Daesong General Trading Corporation pursuant to Executive Order (E.O.) 13551 for being owned or controlled by Office 39 of the Korean Workers’ Party.  Office 39 is a secretive branch of the government of the Democratic People’s Republic of Korea (North Korea) that provides critical support to North Korean leadership in part through engaging in illicit economic activities and managing slush funds and generating revenues for the leadership. Office 39 was named in the Annex to E.O. 13551, issued by President Obama on August 30, 2010, in response to the U.S. government’s longstanding concerns regarding North Korea’s involvement in a range of illicit activities, many of which are conducted through government agencies and associated front companies. Korea Daesong Bank is involved in facilitating North Korea’s illicit financing projects, and Korea Daesong General Trading Corporation is used to facilitate foreign transactions on behalf of Office 39.

“Korea Daesong Bank and Korea Daesong General Trading Corporation are key components of Office 39’s financial network supporting North Korea’s illicit and dangerous activities,” said Under Secretary for Terrorism and Financial Intelligence Stuart Levey.  “Treasury will continue to use its authorities to target and disrupt the financial networks of entities involved in North Korean proliferation and other illicit activities.”

E.O. 13551 targets for sanctions individuals and entities facilitating North Korean trafficking in arms and related materiel; procurement of luxury goods; and engagement in certain illicit economic activities, such as money laundering, the counterfeiting of goods and currency, bulk cash smuggling and narcotics trafficking. As a result of today’s action, any assets of the designated entities that are within U.S. jurisdiction are frozen and U.S. persons are prohibited from conducting financial or commercial transactions with these entities.

UPDATE 1: Here is the US Treasury Department’s web page on North Korea.

ORIGINAL POST: According to Reuters:

The United States sanctioned on Thursday two North Korean companies linked to a group it accuses of drug smuggling and other “illicit” activities to support the nation’s secretive leadership.

U.S. sanctions against North Korea aim in part to persuade Pyongyang to abandon its nuclear programs, which the United States views as a threat to its allies South Korea and Japan. The North tested nuclear devices in 2006 and 2009.

The Treasury Department’s moves against Korea Daesong Bank and Korea Daesong General Trading Corporation will freeze any assets belonging to them that fall within U.S. jurisdiction as well as bar U.S. companies from dealing with them.

Their main aim is not to block North Korean assets in U.S. banks — analysts say there are unlikely to be any — but to discourage other banks from dealing with North Korea, thereby cutting off its access to foreign currency and luxury imports.

Perks and luxuries such as jewelry, fancy cars and yachts derived from North Korea’s shadowy network of overseas interests are believed to be one of the main tools Pyongyang uses to ensure loyalty among top military and party leaders to North Korean leader Kim Jong-il.

The Treasury described the two entities as “key nodes of the illicit financing network” of Office 39 of the Korean Workers’ Party, which it accuses of producing and smuggling narcotics to earn foreign exchange for the government.

“Korea Daesong Bank and Korea Daesong General Trading Corporation are key components of Office 39’s financial network supporting North Korea’s illicit and dangerous activities,” Treasury Under Secretary Stuart Levey said in a statement.

Heroin Production?
The Treasury designated the two under a recent executive order that targets entities that support North Korea’s arms trafficking, facilitate its luxury goods purchases and engage in illicit economic activities such as money laundering, drug and bulk cash smuggling and counterfeiting goods and currency.

President Barack Obama signed the executive order on August 30 allowing the Treasury to block the U.S. assets of North Korean entities that trade in arms or luxury goods, counterfeit currency or engage in money laundering, drug smuggling or other “illicit” activity to support the government or its leaders.

When that executive order was announced, the Treasury accused Office 39 of producing opium and heroin and of smuggling narcotics such as methamphetamine.

U.S.-North Korean relations have deteriorated since Obama took office, with his aides deeply unhappy about Pyongyang’s decision to conduct nuclear and missile tests last year as well as the March 26 sinking of the South Korean corvette Cheonan.

Forty-six South Korean sailors were killed in the incident, which the United States, South Korea and other nations blame squarely on North Korea. Pyongyang denies responsibility.

In the August 30 executive order, Obama cited the Cheonan’s sinking as well as 2009 nuclear and missile tests by North Korea as evidence it poses “an unusual and extraordinary threat” to U.S. national security, foreign policy and economy.

The Obama administration has been skeptical about returning to so-called six-party negotiations with the two Koreas, China, Japan and Russia under which Pyongyang committed in 2005 to abandon its nuclear programs.

U.S. officials say they do not want to talk for the sake of talking and North Korea must show some commitment to abandoning its nuclear programs.
Read the full story here:
U.S. sanctions two North Korean entities
Reuters
Arshad Mohammed
11/18/2010

Acording to Reuters:

North Korea is facing a grain deficit of 542,000 tonnes in the 2010/11 marketing year after the government only partially provided for grain import cover, the United Nations’ food agencies said on Tuesday.

North Korea’s cereal import requirement in 2010/11 is estimated at 867,000 tonnes, while the government plans to import commercially only about 325,000 tonnes, the Food and Agriculture Organisation and the World Food Programme said .

“The mission recommended to provide some 305,000 tonnes of international food assistance to the most vulnerable population,” the FAO and WFP said in a report after a joint mission to the country.

According to the New York Times:

Despite a relatively good autumn harvest in North Korea, the reclusive communist nation remains in dire need of food aid, especially for its youngest children, pregnant women and the elderly, according to two United Nations agencies.

In a new joint report, the World Food Program and the Food and Agriculture Organization said that North Korea, even after substantial imports, would have a shortfall in staple crops — mostly rice, grains and soybeans — of more than half a million tons.

The 2010 harvest was 3 percent higher than last year, the agencies said, despite an unusually harsh winter and alternating drought and flood conditions over the summer.

But even in the best of years North Korea is unable to feed itself. Government food distribution provides only half the necessary daily calories, the report said. People are thus left to fend for themselves with small hillside plots, kitchen gardens and the buying of or bartering for food on the black market.

Aid officials have estimated that the food aid program for North Korea was 80 percent underfunded and that nearly half the country’s children are malnourished.

“I saw a lot of children already losing the battle against malnutrition,” said Josette Sheeran, executive director of the World Food Program, after a visit to North Korea earlier this month.

“Their bodies and minds are stunted, and so we really feel the need there,” she said. , Agriculture is “the main contributor to the national income” in the North, the agencies said, although its percentage of gross domestic product has declined in the past decade to 21 percent from 30 percent. A lack of foreign currency and credit, made worse by international sanctions against the regime, prevented significant imports of fertilizer and pesticides as well as tires and spare parts for farm trucks and tractors.

In remarks before the Group of 20 summit meeting in Seoul last week, U.N. Secretary General Ban Ki-moon said he had “very serious concerns about the humanitarian situation” in North Korea, “especially for the very young children.”

Mr. Ban said the South Korean president, Lee Myung-bak, had pledged to him that the South would provide humanitarian assistance to the North’s children.

…

The two U.N. agencies said their report, which was released Tuesday, was produced by teams that went to most of North Korea’s principal agricultural regions.

As the teams traveled around, the report said, “it was evident that there were no cereals in stock in the warehouses visited.”

…

Additional Information:
1. Here is a link to stories about South Korean aid provided this year. 

2. The DPRK has recently expressed skepticism over the motivations of foreign aid agencies.

3. Here is a PDF of the UN Special Report.  It is full of data and has been added to my Economic Statistics Page.

4. Here is a link to the UN report which you can read on line.

Read the full sotries here:
N.Korea faces 542,000 t grain deficit in 2010/11-UN
Reuters
11/16/2010

U.N. Urges Food Aid for North Korea
New York Times
Mark McDonald and Kevin Drew
11/17/2010

According to the Choson Ilbo:

The North Korean regime is enacting sweeping changes to the law to bolster state control. A source familiar with North Korean affairs on Tuesday said four North Korean laws covering economic planning were revised in April and laws governing management of Pyongyang were revised in March.

The revised laws, which the source claims to have seen, “show the central regime’s intention to control everything, from the economy to the daily lives of the people.” North Korea has changed or enacted at least 17 different laws since November last year, just before a botched currency reform.

The revised economic planning law deletes a phrase in Article 17, which stipulated that the economy is planned “in line with methods that are presented from lower levels.” According to the source, the regime inserted the phrase when it announced timid economic reforms in July 2001 in order to give more authority over production to individual factories and businesses. “The deletion of the phrase demonstrates the intention to retrieve that authority,” the source said.

Instead, the terms “provisional figures” and “control figures” were revived after their omission in 2001. “The term ‘provisional figures’ refers to the potential output each factory sets, while ‘control figures’ represent the actual output amount assessed by the central government,” the source said. “So the terms strengthen the centralized economic planning regulations of the past.”

In Article 27, a new clause was inserted which reads, “The planning of the people’s economy is a legal task.” The source said, “This means that the partial freedom given to individual factories over production has now been taken away completely.”

The law on the management of Pyongyang, which was revised on March 30, also stresses the role of the state. Originally, maintenance and management of the capital were up to the Pyongyang City People’s Committee. But under the revision it falls into the hands of the State Planning Committee and the Cabinet. Also, all Pyongyang residents over the age of 17 have been ordered to carry their resident identification cards at all times.

Also added were articles that bind the central government to guarantee housing and the supply of necessities for the residents of Pyongyang. This shows the clear intention of the regime to take charge of housing and goods supply. “Labor and commercial laws also contain clear intentions to bolster government control,” the source said.

Kim Yong-hyun of Dongguk University, said as conditions worsened after the failed currency reform and North Korean leader Kim Jong-il’s son has been lined up to succeed his father, “the regime seems to feel that tighter internal control is better than aggressive reform. Even if North Korea is looking to partially open up through economic cooperation with China, this will be difficult to achieve with such a conservative approach.”

The Donga Ilbo also covered the story.

Read the full story here:
N.Korea Reverts to Hardline State Control
Choson Ilbo
11/17/2010

According to the Choson Ilbo:

A senior researcher at North Korea’s National Academy of Sciences has been arrested on espionage charges, it emerged on Tuesday.

A high-level North Korean source quoted rumors that Kim So-in, who is believed to have been in charge of the North’s nuclear and missile development, and his family were arrested by the State Security Department and taken to the notorious Yodok concentration camp in May.

A math prodigy who received his doctorate in his early 20s, Kim was said by the state media to have been behind the supposed launch of the North’s first satellite — an event widely believed to have been a long-range ballistic missile test.

The source said Kim is accused of assisting his father Kim Song-il, a researcher at the Yongbyon Nuclear Complex, in delivering top secret documents on nuclear development to a foreign agency.

The security department is nervous because many senior officials in various areas are suspected of attempting to earn dollars by selling confidential information, with top secret documents about the regime’s nuclear and missile development being leaked abroad, the source added.

Pak Kyong-chol, an official in the Committee for the Peaceful Reunification of the Fatherland, has also recently been sent to a labor camp for spying, and Kim Won-bom, the chief of the Wonsan office of the North Korean military bureau in charge of earning hard currency, has been arrested after US$1.5 million was found at his home.

And a senior official at the Kumgang bureau of the Majon Mine has been taken into custody for stashing away $100,000 after selling confidential information in conspiracy with military officers.

Senior officials are trying to sell confidential information because of economic difficulties since the botched currency reform late last year and the Chinese government’s recent crackdown on drug and counterfeit dollar transactions.

The security services have been ordered by regime heir Kim Jong-un to look out for “unusually rich” senior officials, the source added.

Read the full story here:
N.Korea’s Chief Nuke Scientist ‘Held for Spying’
Choson Ilbo
11/10/2010

Institute for Far Eastern Studies (IFES)
NK Brief No. 10-11-8-1
11/8/2010

North Korea held an extended meeting of the entire Cabinet in order to discuss the types of projects to be pursued in the last quarter of the year, and to strategize on how these projects should be implemented.

On October 28, the CHOSUN SHINBO reported on an article in the MINJU CHOSUN, which is under the control of the North Korean Cabinet. According to the article, efforts are being made to strongly construct the foundation upon which exemplars of the ‘military-first’ era will be erected. Production lines and facilities in all realms of the People’s Economy need to come into alignment with CNC, and efforts need to be made toward modernization, environmental protection, and reforestation. In particular, the Cabinet has pledged to decisively improve city management and restore socialism in cities and agricultural villages. Efforts will be focused on restoring socialist principles to economic management and ensuring that the centrally planned national economy is implemented.

The newspaper also reported that the North’s Cabinet held discussions on how to successfully fulfill all the goals set for the third quarter while creating a strategy to meet all of the targets set for the annual People’s Economy. It is unknown exactly when this meeting was held, but Premier Choi Yong-rim and other Cabinet members were all in attendance, as were city and town People’s Committee representatives, committee members from factories and farming communities, economic planners, and managers from critical factories and organizations.

As officials discuss economic reforms, the sixth annual autumn Pyongyang International Trade Fair was held from October 18-21, and it saw a greater Chinese presence than the thirteenth annual spring trade fair held last May. This could be the result of Kim Jong Il’s August visit to China. According to the newspaper, seventeen countries were represented by over 140 companies (48 from North Korea, 93 from abroad) — This was three countries and over twenty companies more than were at the spring fair. India participated for the first time this fall.

An official from the trade fair told the newspaper that the increased participation from Chinese companies was a direct result of Kim Jong Il’s recent visit to China’s northeastern region and the improved economic relations between Pyongyang and Beijing that came out of that visit. From machinery and equipment to steel products, electronic goods and light industrial products, food, pharmaceuticals, traditional herbal medicines and chemical products, over 57,000 products in over 2,300 different categories were on display. This is more than 600 categories of goods not seen last year.

Foreign companies participating in the fair signed contracts with North Korean offices for sales, technology exchanges, joint ventures, and investment opportunities, building on the ‘Introduction and Negotiations on the Investment Environment of the Democratic People’s Republic of Korea’ held on October 18.

Michael Rank

North Korean officials have claimed that there are 500 “house churches” where Christians can worship in a country that has been widely accused of ruthlessly persecuting believers, sometimes to death.

Two British parliamentarians who visited North Korea late last month quote officials of the Korean Christian Federation as making the claim, although they note that “other sources question this and we were unable to verify these figures.”

At Bongsu Protestant church in Pyongyang (satellite image here) they were told that 20,000 Bibles and hymnals had been printed and that there were 13,000 Protestants in North Korea.

Lord Alton and Baroness Cox visited a new Protestant seminary in Pyongyang with 12 students and 10 teachers, as well as Catholic and Russian Orthodox churches in the capital.

In their report, Building Bridges, Not Walls they describe how seminary students “pursue a five-year course and are then admitted to the Korean Christian Fellowship as pastors upon graduation.”

“The Protestant church expressed a desire to establish links with Protestant, particularly Presbyterian, churches in the UK, and appears to receive support from Korean-American Christians in some parts of the United States.”

Alton and Cox, both devout Christians, said North Korean officials had reiterated an invitation for the Archbishop of Canterbury, Dr Rowan Williams, to visit Pyongyang. The invitation was first extended by the speaker of the Supreme People’s Assembly, Choe Tae-bok, when he visited Williams at Lambeth Palace in London in 2004 and whom Alton and Cox met again last month.

The invitation seems to have caused some embarrassment to the archbishop. A spokeswoman for Dr Williams told NKEW she had no knowledge of it and failed to respond when asked to check further into the matter.

Alton and Cox, who were paying their third visit to Pyongyang, said Choe had accepted an invitation to visit Britain again next year.

The group also visited the Supreme Court, where “it was evident that the defendant in a trial is already deemed a suspect, as reflected in the structure of the courtroom in which the defendant is placed in small, wooden enclosure, seated on a small, very uncomfortable stool, in contrast to more comfortable chairs for others.

“The Senior Law Officer confirmed to us that the principle of innocent until proven guilty does not apply in the North Korean judicial system.

“‘Most defendants are those whose crime has already been revealed, before indictment, by investigation by the police. When a person comes to court, we do not think of them as innocent,’ he said.

“Furthermore, it appears that the legal defence available for the defendant would only become actively involved in the process once the ‘suspect’ is brought to trial and all the relevant evidence has been prepared.

“We would urge the DPRK authorities to ensure that the accused receives legal assistance before the trial stage,” Alton and Cox say in their report.

They frequently asked whether they, or any foreigners, could visit a prison, including the notorious Yodok prison camp, and were told emphatically “no”.

Alton and Cox also discussed security issues with North Korean officials, including Vice Minister for Foreign Affairs Kung Sok-ung.

who told them that his government’s position on peace and security “remains unchanged – to settle the issues through negotiation and dialogue, and to secure stability through peaceful means.”

There do seem to be signs of internal change, however. Senior North Korean officials told the group that the country is entering a period of “momentous change”, and the report notes that “It is also interesting that the emphasis in North Korea has changed, from a focus on its ‘Songun’ or ‘military first’ policy, to a new objective of establishing a ‘great, prosperous and powerful nation’ by 2012.

“This was set out in a communiqué by the Workers’ Party of Korea on 11 October, marking its sixty-fifth anniversary, in which it spoke of building a ‘dignified and prosperous’ nation.

“This change of emphasis is very welcome, and presents the international community with another important opportunity.”

“We believe the time has come for North and South Korea and the United States, with assistance from others in the international community including the United Kingdom (as a former combatant nation which saw 1,000 of its servicemen lose their lives in the Korean War), a neutral country such as Switzerland or Sweden (who were among the countries given responsibility in 1953 to oversee the armistice), and, above all, China, to work to find ways to turn the armistice into a permanent peace.

“A Beijing Peace Conference at which North and South could resolve their differences should be convened once the necessary preliminary brokering has been completed.

“We also believe grave human rights concerns should be discussed through a process of dialogue and constructive, critical engagement, in parallel with a resumption of the Six-Party Talks concerning security, in the same way as the Helsinki Process was established by President Ronald Reagan and Margaret Thatcher with the Soviet Union. It is time for peace, and it is time for Helsinki with a Korean face”.

They add that “DPRK officials made it clear that a permanent peace, and reunification of Korea, is their priority, and they emphasised their commitment to negotiating a peaceful resolution through dialogue.”

For an interview with Baroness Cox after her previous visit to Pyongyang in 2009 click here.