North Korean Economy Watch

According to Yonhap:

North Korea’s Cabinet premier is visiting northeastern China to meet with ranking officials there and speed up joint economic projects between the communist allies, sources here said Wednesday.

Choe Yong-rim arrived in the city of Harbin in Heilongjiang Province earlier this week and visited the city of Changchun in a nearby province on Wednesday, the diplomatic sources said.

Choe, promoted by North Korean leader Kim Jong-il at a parliamentary convention in June, is seen as trying to consolidate the ties between Pyongyang and Beijing as the two countries seek to develop a joint economic bloc that draws from resources in China.

His visit comes after Kim visited the area in late August. During a summit between the North Korean leader and Chinese President Hu Jintao, the countries promised to boost their political and economic cooperation.

Choe’s trip, also reported by a local daily here, comes after 12 of the highest-ranking North Korean mayoral and provincial chiefs visited the same region in October, touring food, chemical and agricultural factories along with other major facilities.

Believed to be a key aide to North Korea’s next leader, Kim Jong-un, the premier inspected electronics and medicine companies and a agricultural research center in Harbin on Tuesday, the sources said.

Choe, 79, formerly chief of the Pyongyang department for the ruling Workers’ Party, has been noted for his rise to power in the past several months. He gave a speech at a mass rally on May 30, where as many as 100,000 North Koreans reportedly denounced South Korea and the United States for blaming Pyongyang for the sinking of a South Korean warship in March.

Read the full story here:
DPRK premier in northeastern China for economic cooperation
Yonhap
11/3/2010

Richard Stone writes in 38 North:

The curtain is rising on a bold experiment to engage North Korea’s academic community—and possibly shape the country’s future. On October 25, 2010, Pyongyang University of Science and Technology, or PUST, opened its doors to 160 elite North Korean students. By improving North Korea’s technical prowess, PUST might nudge the country’s tattered manufacturing-based economy toward an information-based economy.

“Our purpose is the globalization of North Korea through PUST. In that way, their economy can gradually develop, which will make it easier for reunification later,” says Park Chan Mo, former president of the National Research Foundation of Korea and one of four founding committee chairs of PUST. More initiatives are in store after South-North relations improve, says Oh Hae Seok, Special Adviser on Information Technology (IT) to South Korea’s President Lee Myung Bak. “The South is ready to assist the North by building an IT infrastructure and supporting IT education, as long as the North opens its door,” he says.

PUST will test North Korea’s appetite for engagement. Perhaps most discomfiting to the North is that the new university is led and bankrolled by devout Christians. The North Korean government espouses atheism and takes a dim view on South Korean evangelists, particularly for their role in an “underground railway” in northeastern China that steers defectors to safe havens. PUST leaders and professors, primarily ethnic Koreans, have promised not to proselytize.

PUST’s main mission therefore is to lead North Korea out of a scientific wilderness. The North is light-years behind industrialized nations in many areas of science and technology. It excels in a few spheres. For instance, North Korea is notorious for its skill at reverse-engineering long-range missiles and fashioning crude but workable plutonium devices. Less well known, the North has developed considerable expertise in information technology—and has staked its future on it. “North Korea has chosen IT as the core tool of its economic recovery,” says Park. But it has a poor grasp on how to translate knowledge into money. “Instead of just giving them fish, we will teach them how to catch fish,” Park says.

There are serious risks in giving North Korea a technical assist, according to PUST’s critics. Opinion in South Korea is split on PUST; many people have voiced concerns. The chief worry is that PUST students could feed information or lend newfound expertise to the North Korean military. To minimize these risks, PUST’s curricula have been vetted by government and academic nonproliferation experts.

To proponents, the new venture’s benefits far outweigh the risks. PUST has been promised academic freedom, the likes of which has been virtually unknown in North Korea, including campus-wide internet access. “We hope that PUST will open channels to the outside,” says Nakju Lett Doh, an assistant professor of electrical engineering at Korea University in Seoul and member of PUST’s academic committee.

Few people of university age or younger can imagine a world without internet. But it’s rare a North Korean of any age has tasted this forbidden fruit. The government takes infinite care to shield innocent minds from corrosive facts about the Korean War, descriptions of life in modern South Korea, and western notions of freedom of expression, among other things. Instead, the Garden of Juche offers Guang Myung, or Bright Light: an Intranet not connected to the outside world.

When I visited Pyongyang on invitation from the DPRK Academy of Sciences in July 2004, my hosts gave me a tour of the Central Information Agency for Science and Technology’s computing center and showed me the Guang Myung home page, which reminded me of Yahoo. They claimed the system has tens of millions of records, including digital tomes on agriculture and construction as well as the complete writings of Kim Il Sung.

Since then, fiber optic cables have spread Guang Myung to the far corners of the nation. “The main purpose is to disseminate scientific and technological information,” says Lee Choon Geun, chief representative of the Korea-China Science & Technology Cooperation Center in Beijing. On a visit to Pyongyang a few years ago, Lee, an expert on North Korea’s scientific community, witnessed Guang Myung in action, including a live lecture broadcast over the Intranet. At the time, he says, Kim Chaek University of Technology had around 500 Pentium 4’s and 5’s connected to the system. He estimates that nationwide, tens of thousands of computers of all types are now linked in. However, it’s not clear how effective Guang Myung is outside Pyongyang, where clunky routers funnel information to ancient machines—remember 386s and 486s? Another major woe is an unstable electricity supply that regularly fritzes electronics. Lee, who has visited North Korea 15 times, says that when he asks what scientists need most, they request laptops, whose power cord adaptors and batteries can better handle electrical fluctuations.

Indeed, it’s a formidable job to erect an IT infrastructure inside a cocoon. South Korea has lent a hand. With the government’s blessing, private organizations in the South have sent approximately 60,000 IT publications—periodicals and books—to North Korean universities, and IT professors from the South have visited the North for lecturing stints, says Oh. South Korean groups have also helped train North Korean computer scientists in Dandong, China, just across the border from North Korea. The training center had to close earlier this year due to budget cuts, says Lee.

The juche philosophy embraces self-reliant efforts to gather technical information from abroad. North Korean diplomats are one set of eyes and ears. They collect journal articles, textbooks and handbooks, surf the Web and ship any seemingly useful information to Pyongyang, where analysts evaluate it and censors clear it for posting. When sent via internet, information is routed primarily through Silibank in Shenyang in northeastern China. North Korea has also deployed abroad around 500 IT specialists in the European Union and dozens more to China—in Beijing, Dalian, Shanghai, and Shenyang—to acquire knowledge for the motherland. “Through them a lot of information goes to North Korea,” says Park.

Such activity may seem like a packrat cramming its nest with equal portions of usable materials and shiny baubles. But it has paid off in at least one area: software development. “They are developing their own algorithms,” says Doh, an expert on control system theory. Even though North Korea’s programmers are almost completely isolated from international peers, they lag only about 5 to 6 years behind the state of the art in South Korea, Doh says. “That’s not that bad.” The Korean Computing Center and Pyongyang Information Center together have around 450 specialists, and universities and academy institutes have another 1,000 more experts on computer science, says Lee. And all told there are about 1,200 specialized programmers.

The programmers have enjoyed modest commercial success. The state-owned SEK Studios in Pyongyang has done computer animation for films and cartoons for clients abroad. And software developers have produced, among other things, an award-winning computer version of the Asian board game Go. “Their software is strong,” says Park, a specialist on computer graphics and simulation. “They are very capable.”

But the resemblance to IT as we know it ends there. “In North Korea, IT is quite different from what most people think,” says Lee. Most computing efforts these days are focused on computerized numerical control, or CNC: the automation of machine tools to enable a small number of workers to produce standardized goods. “Their main focus is increasing domestic production capacity,” says Lee. North Korea’s CNC revolution is occurring two to three decades after South Korean industries adopted similar technologies. And North Korea is struggling to implement CNC largely because of its difficulties in generating sufficient energy needed to make steel—so its machinery production capacity is a fraction of what it used to be—and it lacks the means to produce sophisticated integrated circuit elements.

Antiquated technology may be the biggest handicap for North Korea’s computer jocks. North Korea “doesn’t have the capacity to make high technology,” says Kim Jong Seon, leader of the inter-Korean cooperation team at the Science and Technology Policy Institute in Seoul. North Korea is thought to have a single clean room for making semiconductors at the 111 Factory in Pyongyang. Built in the 1980s—the Stone Age of this fast-paced field—the photomask production facility is capable of etching 3 micron wide lines in silicon chips. South Korean industry works in nanometer scales. The bottom line, says Kim, is that in high technology, “they have to import everything.”

That’s a challenge, because no country—China included—openly flouts UN sanctions on high-tech exports to North Korea. Any advanced computing equipment entering the country is presumably acquired through its illicit missile trade and disappears into the military complex. North Korea’s civilian computer scientists are left fighting for the scraps. One of only five Ph.D. scientist-defectors now known to be in South Korea, computer scientist Kim Heung Kwang, fled North Korea in 2003 not for political reasons or because he was starving—rather, he hungered to use modern computers.

To help North Korea bolster its budding IT infrastructure and not aid its military, PUST will have to walk a tightrope. School officials have voluntarily cleared curricula with the U.S. government, which has weighed in on details as fine as the name of one of PUST’s first three schools. The School of Biotechnology was renamed the School of Agriculture and Life Sciences because U.S. officials were concerned that biotech studies might be equated to bioweapons studies, says Park. North Korean officials, meanwhile, forbid PUST from launching an MBA program—a degree too tightly associated with U.S. imperialism. “So we call it industrial management,” Park says. “But the contents are similar to those of an MBA.”

Besides cleansing PUST of any weapons-grade information, Park and university representatives are working with the U.S. Commerce Department to win export licenses for advanced computing equipment and scientific instruments not prohibited by dual-use restrictions. Approval is necessary for equipment consisting of 10 percent or more of U.S.-made components. “You can attach foreign-made peripheral devices and reduce U.S. components to less than 10 percent, but that’s a kind of cheating,” Park says. “We want to strictly follow the law.”

This improbable initiative in scientific engagement was a long time in the making. PUST’s chief architect is founding president Kim Chin Kyung, who in 1998 established his first venture in higher education: Yanbian University of Science and Technology in Yanji, the capital of the Yanbian Korean Autonomous Prefecture in northeastern China’s Jilin Province, just across the border from North Korea. A businessman who studied divinity in university, Kim, who goes by his English name James, was accused of being a spy on a visit to North Korea in 1998 and imprisoned there for six weeks. He stuck with YUST, however, and in 2001, North Korean education officials visiting the university stunned Kim by inviting him to establish a similar university in Pyongyang. Kim got a rapturous response when he pitched the idea to YUST’s sponsors.

Progress came in fits and starts. PUST was originally envisioned to open in 2005, but work on the initial 17 buildings of the $35 million, 100-hectare campus in southern Pyongyang’s Rakrang district was completed only last year. North Korean education officials have promised the school academic freedom and internet access. Such startling privileges will be doled out byte by byte. “In the beginning, they are allowing us to do emailing,” says Park. Full internet access is expected to come after PUST earns their keepers’ trust. “To do research, really you have to use the internet. The North Korean government realizes that. Once they know students are not using the internet for something else, it should be allowed,” Park says.

While YUST and PUST may both have ardent-Christian backers and cumbersome acronyms, the atmosphere on the two campuses will be markedly divergent. In Yanji, encounters outside the classroom are common: faculty and students even dine together in a common hall. “YUST professors and students are like one family,” says Park.

In contrast, PUST students and faculty will inhabit two entirely different worlds that only merge in the classroom. The North Korean government handpicked the inaugural class of 100 undergraduates and 60 graduate students, including 40 grads who will study IT. All will study technical English this fall, then in March a wider roster of courses will become available after key professors and equipment arrive on campus. A student leader will shepherd students to and from class to ensure that no lamb goes astray. “There will be no way to teach the gospel,” says Doh.

PUST professors expect to be impressed with the students, selected from Kim Il Sung University and Kim Chaek University of Technology. “These are the most brilliant students in North Korea,” says Doh. PUST plans to ramp up enrolment to 2,000 undergrads and 600 graduate students by 2012. To expose these young, agile minds to a wide range of ideas, PUST plans to fly in a number of visiting professors during the summer terms. They also intend to seek permission for students from other Pyongyang universities to attend the summer sessions. As trust develops, PUST hopes that some of its students will be able to participate in exchange programs and study abroad.

PUST’s success may hinge on the disposition of North Korea’s leader in waiting. Kim Jong Un was tutored privately by a “brilliant” graduate of Université Paris X who chaired the computer science department at Kim Chaek University of Technology before disappearing from public view in the early 1980s, says Kim Heung Kwang, who studied at Kim Chaek before working as a professor at Hamhung Computer College and Hamhung Communist College. After defecting and settling in Seoul, Kim founded North Korea Intellectuals Solidarity, a group of university-educated defectors that raises awareness of conditions in North Korea.

According to internal North Korean propaganda, Kim Jong Un oversees a cyberwarfare unit that launched a sophisticated denial-of-service attack on South Korean and U.S. government websites in July 2009. South Korea’s National Intelligence Service blamed the North, which has not commented publicly on the attack. Kim Jong Un’s involvement cannot be confirmed, says Kim Heung Kwang. “But Kim Jong Un is a young person with a background in information technology, so he may desire to transform North Korea from a labor-intense economy to a knowledge economy like South Korea is doing.”

Another big wildcard is North-South relations. After the sinking of the Cheonan, South Korea froze assistance to the North. In the event of a thaw, “the South wants to build a digital complex” in the Demilitarized Zone (DMZ) or in South Korea similar to the Kaesong industrial complex, says Oh. This, he says, “would be the base camp of North Korea’s IT industry development.” North Korea has reacted lukewarm to the idea: It would prefer that such a venture be based in Pyongyang, says Lee. To facilitate denuclearization and help skilled North Korean workers adapt to market economics, the Science and Technology Policy Institute in Seoul has proposed the establishment of an Inter-Korean Science and Technology Cooperation Center modeled after similar centers established in Kiev and Moscow after the Soviet breakup.

Such projects, if they were to materialize, along with well-trained graduates from PUST, may help pull North Korea’s economy up by its bootstraps. “We are trying to make them more inclined to do business, to make their country wealthier,” says Park. “It will make a big difference once they get a taste of money. That’s the way to open up North Korea.”

Additional information:
1. Here are previous posts about PUST.

2. Here are previous posts about the DPRK’s intranet system, Kwangmyong.

3. Here is a satellite image of PUST.

Read the full story here:
Pyongyang University and NK: Just Do IT!
38 North
Richard Stone
11/1/2010

According ot the Union of Catholic Asian News:

The Catholic Church in South Korea has sent rice aid to flood-hit areas of North Korea, the first aid since a South Korean naval ship was sunk reportedly by a North Korean torpedo.

The Korean Bishops’ Committee for the Reconciliation of the Korean People committees delivered 50 tons of rice worth 95 million won(US$85,000) on Oct. 22.

Uijeongbu diocese, the Korean Conference of Major Superiors of Men’s Religious Institutes and Societies of Apostolic Life and the Korean Catholic Farmers’ Movement also assisted with the shipment.

The rice was sent to the (North) Korean Roman Catholics Association, which organized distribution of the rice in the Kaesong (Gaeseong) district.

“This is the first rice support to North Korea since the Cheonan naval ship incident last March,” said Father Baptist John Kimm Hun-il, executive secretary of the Subcommittee for Aid to North Korea under the bishops’ committee for the reconciliation.

“The food condition of North Koreans is worsening and their government is unable to support them. We need to offer more help,” he added.

Following the sinking of the naval vessel, the South Korean government banned all economic exchanges with North Korea, except for the minimum humanitarian aid.

Read the full story here:
Bishops send food aid to flood-hit North Korea
Union of Catholic Asian News
John Choi
10/26/2010

According to the Choson Ilbo:

North Koreans were given the most extra supplies on Oct. 10, the 65th founding day of the Workers Party, since nation founder Kim Il-sung’s death in 1994, Radio Free Asia in the U.S. claimed last Friday.

The so-called “holiday supplies” are various daily necessities sold at state prices or about 1/100 of market prices on major holidays such as Kim Il-sung’s and current leader Kim Jong-il’s birthdays.

On the day, two days’ supply of food and daily necessities were supplied at state prices, a senior party official in Daehongdan-gun in Yanggang Province was quoted by RFA as saying.

Each of about 9,500 homes in the county received two bottles of liquor, 1 kg of potato noodles, 1 kg of potato starch syrup, a bottle of vinegar, a bottle of soybean oil, 1 kg of pork, a cake of soap, a pair of shoes, toothbrushes and toothpaste, the official said.

Another North Korean source said the sudden bounty led to drunken accidents and an inebriated gang fight between youngsters, several of whom were taken to hospital. The source said a tractor carrying potatoes keeled over, killing four people.

Holiday rations/gifts are a time honored tradition in the DPRK, though their significance to the North Korean people has declined since the “arduous march” and the rise of markets.

Paradoxically, their importance to foreign observers of the DPRK has in fact grown since the “arduous march”.  This is because the composition of the gifts, or lack thereof, is important data for estimating the strength of the Public Distribution System and by extension the state’s finances.  By giving the most generous gifts since Kim Il-sung’s death, the DPRK government wants us, and the North Korean people, to believe its fiscal position is improving.

Here, here, here, here, and here are previous posts about holiday rations.

Here is a story in the Daily NK featuring pictures of holiday rations.

Read the full story here:
N.Korean Regime in Rare Show of Generosity
Choson Ilbo
10/25/2010

UPDATE: The New York Times also covers the opening.  According to the article:

In spite of all this, classes in technical English started Monday at the Pyongyang University of Science and Technology. A fuller curriculum in information technology, business management and agriculture is supposed to get under way in March.

“It’s amazing, and kind of a miracle,” said Park Chan-mo, one of the founders of the school, which was largely financed by contributions from evangelical Christian groups in the United States and South Korea. “Many people were skeptical, but we’re all Christians. We had faith.”

The driving force behind the school was Kim Chin-kyung, an American born in Seoul who founded a university in China in 1992. He made periodic trips from China into North Korea and in 1998 was arrested at his hotel in the capital and thrown into prison, accused of being an agent for the C.I.A.

The relentless interrogations went on for six weeks and almost broke him. “I was ready to die,” he said in a 2001 interview, even writing out a will and bequeathing his organs for transplants and medical study in Pyongyang.

He was finally released, he said, after convincing the authorities that “I was not the kind of person who would spy on them.”

In November 2000, a man appeared in his university office in China — oddly, the same man who had ordered his arrest for espionage in Pyongyang in 1998. But this time he had a proposal from the North Korean government: could he duplicate his Chinese technical university in Pyongyang?

“Doing business with North Korea is not for the faint of heart,” Mr. Kim said on the school’s Web site, “but the effort is ennobling and necessary.”

The first group of 160 undergraduate and master’s students has been chosen by the North Korean government, selected from its top colleges and from the political and military elite. Their tuition, room, board and books are all free, financed by foreign donors and individual sponsors. The plans call for an eventual student body of 2,600 and a faculty of 250, with classes in public health, architecture, engineering and construction.

Sixteen professors from the United States and Europe arrived in Pyongyang over the weekend. For now, no South Korean professors are allowed because of recent political tensions between the Koreas.

It seems an unlikely marriage — the hard-line Communist state and wealthy Christian capitalists — and it remains to be seen how well the match has been made.

North Korea, while reluctant to expose its citizens to the outside world, has been seeking foreign investment for its decrepit educational system. For their part, the evangelicals, who have antagonized the North by encouraging defections and assisting refugees after they cross over, are seeking a foothold inside the churchless state.

North Korea has made a similar bargain before. The Unification Church of the Rev. Sun Myung Moon, not only a Christian but staunchly anti-Communist, operates a car factory in Pyongyang, for instance. But the church is allowed to make only cars, not Christians or capitalist converts.

There is no campus chapel at the new university, Dr. Park said, and there is not one in the plans. But neither, for now, are there any official portraits of the North Korean leader, Kim Jong-il, or his father, the late Kim Il-sung, which hang in every school and public building in the North.

The $35 million, 240-acre campus includes a faculty guesthouse and world-class dormitories and classrooms, all of which are said to have running water, power and heat. The school has its own backup generators, but with so little diesel and gasoline available in the North, fuel has to be trucked in from neighboring China.

Classes will be taught in English, and Internet access has been promised to all students. The campus has sirens that go off before rolling electrical blackouts, so work on computers can be saved.

“The Internet will be censored, and we can’t imagine that it won’t be,” said Dr. Park, who has been involved in educational exchanges with the North since 2000. “Even in South Korea things are blocked. I’m sure North Korea has been looking at my e-mails. I keep them businesslike.”

Dr. Park, the former president of the prestigious Pohang University of Science and Technology in South Korea, said the university project could not have been completed without the approval of the United States government. Officials at the school, eager not to run afoul of international sanctions in place against the North, have even sent its curriculum to the State Department for vetting.

One request from Washington was that the name of the biotechnology course be changed for fear that it might be seen as useful in developing biological weapons, Dr. Park said. So the course title was changed to “Agriculture and Life Sciences.”

The United States government also was also “very sensitive,” Dr. Park said, about young North Korean scientists learning skills that could be used by the military or in developing nuclear weapons. “We can’t be fooled into teaching them those kinds of things.”

Several conservative lawmakers from South Korea called for Seoul, which gave $1 million to the school in 2006, to cut off all support. One legislator, Yoon Sang-hyun, was angered that the North insisted that future economics classes include lessons about juche, or Kim Il-sung’s founding philosophy of self-reliance.

Some critics also have suggested that there must have been heavy payoffs made to the North Korean government to move the project along, but Mr. Kim insisted that no deals had been made.

“Every brick we used, every bit of steel, every bit of equipment, we brought in from China,” Mr. Kim, who was in Pyongyang for the opening, said in an interview in Fortune last year. “I have never brought any cash into North Korea.”

“I have unlimited credit at the Bank of Heaven,” he added.

ORIGINAL POST: According to Yonhap:

The first university founded jointly by South and North Korea is scheduled to open next week in Pyongyang, a school official said Friday.

The project to build Pyongyang University of Science and Technology was launched in 2001 after the two countries’ governments approved a South Korean nonprofit organization to participate in it. The university’s stated aim is to promote reconciliation and prosperity among the Korean people, separated since the 1950-53 Korean war, and “help North Korea develop the necessary economic and intellectual infrastructure to function as a member of the international community,” according to its Web site.

“All the facilities and staff are ready, and we will officially open (next Monday),” said James Chin-kyung Kim, the school’s founding president and co-chairman. Kim, a U.S. citizen, also founded the Yanbian University of Science and Technology in the Chinese city of Yanji, a major Korean-Chinese population center.

“In time for the opening, 17 foreign professors will fly to Pyongyang from Shenyang (on Saturday). These professors come from the U.S. and Europe,” he said.

South Korean staff will also be able to teach, starting next semester, according to the school.

Instruction will be in English, and 160 students have been selected for the school’s undergraduate and master’s degree courses in agriculture, information and communication technology, and industry and management. Forty doctorate-level students began studying with four foreign academics in the summer.

The university plans to increase the number of students to 500 and open more departments to teach architecture, engineering, construction and public health care.

Here are previous posts about PUST including satellite imagery of the facility’s construction.

Read the full story here:
First university founded by two Koreas to open in Pyongyang next week
Yonhap
10/22/2010

According to Medical News Today:

In a country where good news is scarce, a pioneering agroforestry project in the Democratic People’s Republic of Korea is restoring heavily degraded landscapes and providing much-needed food for communities living on the sloping lands.

Jianchu Xu, East-Asia Coordinator for the World Agroforestry Centre, which has been providing technical expertise and training for the project since 2008, said agroforestry – in this case the growing of trees on sloping land – is uniquely suited to DPR Korea for addressing food security and protecting the environment.

“What we have managed to achieve so far has had a dramatic impact on people’s lives and the local environment,” Jianchu explains.

“Previously malnourished communities are now producing their own trees and growing chestnut, walnut, peaches, pears and other fruits and berries as well as medicinal bushes,” Jianchu explains. “They have more food and vitamins and are earning income through trading”.

Following the collapse of the socialist bloc in 1989 and a lack of subsidies for agriculture in DPR Korea, famine and malnutrition became widespread in rural areas.

DPR Korea is a harsh mountainous country where only 16% of the land area is suitable for cultivation. In desperation in the 1990s, people turned to the marginal sloping lands but this had a price: deforestation for cropping land and fuelwood left entire landscapes denuded and depleted of nutrients.

In an effort to reverse the situation, an innovative and pioneering project began in 2002 involving the Swiss Agency for Development and Cooperation (SDC) and Korea’s Ministry of Land and Environmental Protection. The World Agroforestry Centre was later brought in to provide technical advice.

Suan County has since expanded to 65 user groups in seven counties, with several hundred hectares of sloping land now under sustainable management. And the project is still growing.

A system of establishing user groups with one representative from each family has enabled demonstration plots to be set up and a large number of households to benefit from knowledge about growing multi-purpose trees. Such trees can improve and stabilize soils as well as provide fertilizer, fodder or fruits.

Most of the people farming the sloping lands are pension workers with little agricultural experience. The agroforestry systems they are now implementing and the techniques they have learnt are significantly increasing tree cover on the slopes as well giving them a diversity of crops.

Several of the user groups have started their own nurseries so that they can be self-sufficient and produce their own planting materials.

Initially a European consultant was engaged to provide advice on sloping land management, but in 2008 SDC brought the World Agroforestry Centre’s China office into the project.

“With similar experiences and history, our Chinese staff were well-placed to work in DPR Korea,” explains Jianchu. “It was important to have people with an understanding of the technical, institutional and socio-political context.”

There are very few international organizations operating in DPR Korea, and most of these are providing emergency relief. “With our strong focus on capacity development, we have established a good reputation,” adds Jianchu. So much so that the Centre is now negotiating a memorandum of understanding with the government and there are plans to establish an office in the country.

According to Jianchu, one of the most important aspects to ensuring the project is sustained is capacity development at all levels.

“As well as the user groups, we are providing training to multi-disciplinary working groups comprising representatives from the national academy, agricultural universities, forestry research and planning institutes, and staff of the Ministry.”

“There is an enormous need to improve knowledge and skills in DPR Korea in the area of natural resource management and to nurture young scientists,” says Jianchu. SDC is now investing in this area. Each year over the past few years, a handful of students from DPR Korea have undertaken studies with the Center for Mountain Ecosystem Studies, jointly run by the World Agroforestry Centre and the Chinese Academy of Sciences and hosted by the Kunming Institute of Botany in China. Some could be considered for a doctoral program in the future.

To further support the up-skilling of DPR Korea scientists and the up-scaling of agroforestry, the Centre will soon publish an agroforestry manual. Work is also underway on an agroforestry policy for sloping lands management and an agroforestry inventory.

Read the full story here:
Agroforestry A Success In North Korea
Medical News Today
Kate Langford
8/31/2010

UPDATE 4: The following statement appeared on the Treasury Department web page:

In joint actions, the U.S. Departments of Treasury and State today announced the designations of five North Korean entities and three individuals under Executive Order (E.O.) 13382 for supporting North Korea’s Weapons of Mass Destruction (WMD) program. Executive Order 13382 is an authority aimed at freezing the assets of WMD proliferators and their supporters thereby isolating them from the U.S. financial and commercial systems.

Also today, President Obama signed an Executive Order that directs the Secretary of the Treasury, in consultation with the Secretary of State, to target for sanctions individuals and entities facilitating North Korean trafficking in arms and related materiel; procurement of luxury goods; and engagement in illicit activities, including money laundering, the counterfeiting of goods and currency, bulk cash smuggling and narcotics trafficking. The new Executive Order supplements E.O 13382, under which North Korean entities have been designated to date, and is consistent with measures required in UNSCRs 1718 and 1874.

The following individuals have been added to OFAC’s SDN list:

KIM, Yong Chol (a.k.a. KIM, Yong-Chol; a.k.a. KIM, Young-Cheol; a.k.a. KIM, Young-Chol; a.k.a. KIM, Young-Chul); DOB circa 1947; alt. DOB circa 1946; POB Pyongan-Pukto, North Korea (individual) [DPRK]

RI, Hong-Sop, c/o General Bureau of Atomic Energy , Haeudong, Pyongchen District, Pyongyang, Korea, North; DOB 1940; nationality Korea, North (individual) [NPWMD]

RI, Je-Son (a.k.a. RI, Che-Son), c/o General Bureau of Atomic Energy, Haeudong, Pyongchen District, Pyongyang, Korea, North; DOB 1938; nationality Korea, North (individual) [NPWMD]

YUN, Ho-Jin (a.k.a. YUN, Ho-Chin), c/o Namchongang Trading Corporation, Pyongyang, Korea, North; DOB 13 Oct 1944; nationality Korea, North (individual) [NPWMD]

The following entities have been added to OFAC’s SDN list:

GREEN PINE ASSOCIATED CORPORATION (a.k.a. CHONGSONG YONHAP; a.k.a. CH’O’NGSONG YO’NHAP), Nungrado, Pyongyang, Korea, North; c/o Reconnaissance General Bureau Headquarters, Hyongjesan-Guyok, Pyongyang, Korea, North [DPRK]

KOREA HEUNGJIN TRADING COMPANY (a.k.a. HUNJIN TRADING CO.), Pyongyang, Korea, North [NPWMD]

KOREA TAESONG TRADING COMPANY, Pyongyang, Korea, North [NPWMD]

MUNITIONS INDUSTRY DEPARTMENT (a.k.a. MILITARY SUPPLIES INDUSTRY DEPARTMENT), Pyongyang, Korea,
North [NPWMD]

OFFICE 39 (a.k.a. BUREAU 39; a.k.a. CENTRAL COMMITTEE BUREAU 39; a.k.a. DIVISION 39; a.k.a. OFFICE #39; a.k.a. OFFICE NO. 39; a.k.a. THIRD FLOOR), Second KWP Government Building (Korean – Ch’o’ngsa), Chungso’ng, Urban Town (Korean – Dong), Chung Ward, Pyongyang, Korea, North; Chung-Guyok (Central District), Sosong Street, Kyongrim-Dong, Pyongyang, Korea, North; Changgwang Street, Pyongyang, Korea, North [DPRK]

RECONNAISSANCE GENERAL BUREAU (a.k.a. CHONGCH’AL CH’ONGGUK; a.k.a. KPA UNIT 586; a.k.a. “RGB”), Hyongjesan-Guyok, Pyongyang, Korea, North; Nungrado, Pyongyang, Korea, North [DPRK]

SECOND ACADEMY OF NATURAL SCIENCES (a.k.a. 2ND ACADEMY OF NATURAL SCIENCES; a.k.a. ACADEMY OF NATURAL SCIENCES; a.k.a. CHAYON KWAHAK-WON; a.k.a. CHE 2 CHAYON KWAHAK-WON; a.k.a. KUKPANG KWAHAK-WON; a.k.a. NATIONAL DEFENSE ACADEMY; a.k.a. SANSRI; a.k.a. SECOND ACADEMY OF NATURAL SCIENCES RESEARCH INSTITUTE), Pyongyang, Korea, North [NPWMD]

SECOND ECONOMIC COMMITTEE, Kangdong, Korea, North [NPWMD]

UPDATE 3: According to the Wall Street Journal:

The Obama administration outlined new financial sanctions on North Korea aimed at further choking off Pyongyang’s arms trade and the illicit businesses funding dictator Kim Jong Il’s government.

The U.S. specifically targeted a secretive unit of Pyongyang’s ruling Korean Workers’ Party, known as Office 39, which American officials believe serves as a private slush fund for Mr. Kim.

Washington also blacklisted nearly a dozen North Korean individuals and entities alleged to be overseeing Pyongyang’s development of conventional arms and weapons of mass destruction, as well as their sales to third countries.

Among those designated are the Second Economic Committee of the Workers’ Party and Yun Ho-jin, Pyongyang’s onetime ambassador to the United Nations’ nuclear watchdog, the International Atomic Energy Agency. The U.S. also named to its sanctions list two top officials from Pyongyang’s General Bureau of Atomic Energy, Ri Je-son and Ri Hong-sop.

“When it comes to focusing on illicit activity, we have seen that the world reacts to this kind of thing very, very positively,” said Stuart Levey, the Treasury Department’s undersecretary for terrorism and financial intelligence. “We believe that this sort of program can have a very powerful impact.”

The new U.S. measures freeze any assets of the designated persons or entities inside the U.S. and bars American companies from conducting business with the listed North Koreans. Mr. Levey also said that any foreign entities conducting business with the sanctioned North Koreans could also face U.S. penalties.

Secretary of State Hillary Clinton announced in June that the U.S. would enact new financial penalties on Pyongyang, in part, in response to the North’s alleged torpedoing of a South Korean naval vessel. The March sinking of the Cheonan killed 46 South Korean servicemen and has led to heightened tensions on the Korean peninsula.

U.S. officials fear the attack could be linked to a political succession process inside Pyongyang and could presage other provocative acts by the North. U.S. and Asian officials believe Kim Jong Il is seeking to pass power to his third son, Kim Jong Eun.

…U.S. officials said the targeting of Office 39 is among the most direct assaults on Kim Jong Il’s finances to date and illustrates Washington’s support for the North Korean people. Office 39 has been directly involved in procuring luxury goods for Mr. Kim and Pyongyang’s political elite, even as many North Koreans face starvation.

Office 39 was blacklisted under a new executive order signed by President Barack Obama on Monday that specifically seeks to end North Korea’s ability to raise hard currency through illicit activities like drug smuggling and counterfeit $100 bills. The Treasury said Office 39 was directly involved in a 2009 scheme to illegally export into North Korea two luxury yachts valued at $15 million for Kim Jong Il.

UPDATE 2: According to the Wall Street Journal:

A North Korean arms chief and Pyongyang’s former ambassador to the United Nation’s nuclear agency have emerged as key figures in an intensifying international effort to curb North Korea’s weapons-trading activities.

The global dealings of the two men, Chun Byung-ho and Yun Ho-jin, whom North Korea analysts believe to be related through marriage, date back to the 1980s. They have played leading roles in North Korea’s development and testing of atomic weapons, according to current and former U.S. officials, Asian intelligence analysts and U.N. nonproliferation staffers.

More troubling to officials, Messrs. Chun and Yun also oversee Pyongyang’s vast arms-trading network, which appears to be spreading. They have shipped components for long-range missiles, nuclear reactors and conventional arms to countries including Iran, Syria and Myanmar.

On Monday, the Obama administration announced economic sanctions against various individuals and entities involved in Pyongyang’s nuclear work and in alleged illicit trading activities. The Treasury Department named Mr. Yun and the North Korean body headed by Mr. Chun—the Second Economic Committee of Pyongyang’s ruling Korean Workers’ Party. The sanctions freeze any U.S. assets of those named and bar Americans from conducting business with them. Treasury also warned that foreign firms doing business with them risked sanctions.

The Second Economic Committee oversees a little-known foreign trade office with the Orwellian name of Office 99. The proceeds from the Office’s arms sales go directly to North Korean dictator Kim Jong Il and Pyongyang’s senior leadership, according to these officials and recent North Korean defectors.

“It is broadly believed that the Second Economic Committee…plays the largest and most prominent role in nuclear, other WMD and missile-related development programs, as well as arranging and conducting arms-related exports” for North Korea, says a report issued in May by the U.N. committee tasked with enforcing international sanctions on Pyongyang.

The U.S. and U.N. recently have intensified efforts to combat the Second Economic Committee and Office 99, alarmed by Pyongyang’s two nuclear-weapons tests and its alleged role in sinking a South Korean naval vessel in March. Last year, the U.N. formally sanctioned Mr. Yun and his arms company, Namchongang Trading Co.

North Korean arms shipments moving through Thailand, the United Arab Emirates, South Africa and the South China Sea have been seized or turned back by the U.S. and its allies over the past few years. A Japanese court convicted a Tokyo-based trading company in November of procuring military technologies for Pyongyang with the intent of shipping them to Myanmar.

Still, Messrs. Chun and Yun’s decades of experience in the weapons trade pose a challenge to an international community keen to disrupt Pyongyang’s proliferation activities, say U.S. and Asian officials. “There is no reason to assume that Chun and Yun won’t sell nuclear weapons,” says David Asher, a former Bush administration official who has tracked Pyongyang’s arms trade for a decade. “There needs to be an active effort to disrupt their WMD networks and drive them out of business now, before it’s too late.”

The two men have established a network of front companies in Asia, Europe and the Middle East and have partnered with Southeast Asian, Japanese and Taiwanese criminal syndicates to move cash and contraband, say U.S. officials. And Mr. Yun has used the political cover provided by Pyongyang’s closest ally, China, to openly conduct business in cities such as Beijing and Shenyang, drawing official rebukes from Washington.

North Korean diplomats at Pyongyang’s U.N. mission in New York did not respond to requests for comment. Messrs. Chun and Yun couldn’t be reached.

Current and former U.S. officials say North Korea’s operations resemble in both scale and tactics those of Pakistan’s Abdul Qadeer Khan—one of the most notorious arms dealers in recent years. U.S. officials fear that isolated North Korea, desperate for hard currency, could accelerate its arms exports in a bid to prop up Kim Jong Il’s finances.

Mr. Chun, now 84 years old, and his Second Economic Committee emerged as major global arms exporters in the 1980s, as North Korea shipped as much as $3 billion worth of rockets, pistols and submarines to Tehran during the eight-year Iran-Iraq war, say recent defectors and North Korea analysts.

Pyongyang assisted some communist and socialist countries militarily during the 1960s and 1970s, and provided fighter pilots to aid Egypt and Syria in their wars against Israel. But North Korea found a largely captive market in Iran, which faced a U.S.-led weapons embargo as the West threw its support behind Iraqi strongman Saddam Hussein.

One senior North Korean defector who worked in Pyongyang’s munitions industries says he was dispatched to Iran by the Second Economic Committee in 1987 with the task of constructing missile batteries on the Iranian island of Kish to help Tehran better control the movement of ships through the Straits of Hormuz.

His main interlocutor was Iran’s elite military unit, the Islamic Revolutionary Guard Corps. The former hydro-mechanic says camaraderie developed between his 100-man team and the Guard, despite their different backgrounds.

Mr. Chun’s control over the Second Economic Committee was tied to his close relationship with Pyongyang’s ruling Kim family, say defectors and North Korea experts. The Russian-trained bureaucrat served as a member of North Korean founder Kim Il Sung’s bodyguard unit. He rose up the ranks of the Korean Workers’ Party with the political support of Kim Jong Il, eventually securing a position on Pyongyang’s most powerful political body, the National Defense Commission.

North Korea’s high-level defector, Hwang Jang-yop, has identified Mr. Chun as the broker of a key barter trade in the 1990s with Pakistan that significantly advanced Pyongyang’s nuclear infrastructure. The agreement resulted in North Korea shipping parts for long-range missiles to Islamabad in exchange for A.Q. Khan sending centrifuge equipment used in producing nuclear fuel.

As Mr. Chun pushed forward North Korea’s nuclear program from Pyongyang, Mr. Yun, believed to be the husband of Mr. Chun’s second daughter, emerged as a key player in procuring technologies for the Second Economic Committee from Europe, according to U.S., U.N. and European officials.

Mr. Yun, 66, arrived in Vienna in 1985 as Pyongyang’s ambassador to the International Atomic Energy Agency. The English and German speaker led negotiations with the U.N. agency aimed at forging a nuclear-inspection agreement with North Korea, and he helped oversee a 1992 tour of his nation’s Yongbyon nuclear facility for Hans Blix, the IAEA’s then-managing director.

“Yun was dedicated to turning things around. I truly believe that,” says Willi Theis, who worked closely with Mr. Yun as the head of the IAEA’s safeguards unit overseeing North Korea. Mr. Theis is now retired.

Still, concerns grew inside the IAEA about Mr. Yun’s activities, as relations between Pyongyang and the international community deteriorated, according to IAEA officials.

In 1993, North Korea broke off talks with the IAEA over the agency’s demands for an inspection of the country’s nuclear operations, and the U.S. charged Pyongyang with secretly stockpiling plutonium for atomic weapons. The next year, the Clinton administration threatened to bomb the Yongbyon facility if North Korea didn’t explain where the plutonium had gone. Mr. Yun grew embittered with the diplomatic process and mistrustful of the U.S. and its allies, according to IAEA staff and journalists who met with him.

Mr. Theis says he spent hours discussing the process with Mr. Yun and pressed the Agency to remain engaged with Pyongyang. The West German-born nuclear inspector says he grew suspicious of Mr. Yun’s many trips to other European cities and his contacts with local companies. Mr. Yun even hinted to Mr. Theis that he might have no choice but to directly support North Korea’s nuclear-weapons programs if relations with the IAEA collapsed.

“He came to the conclusion that dealing with the international community was totally disappointing,” said Mr. Theis in a phone interview from Austria. “Mr. Yun had definitely learned how to establish contacts with all types of people [while in Vienna]—not just from the IAEA, but managers of companies.”

Mr. Theis’s concerns about Mr. Yun would be borne out in 2003, when a German businessman, Hans Werner Truppel, was arrested and eventually convicted by a Stuttgart court of selling 22 metric tons of aluminum tubes to Mr. Yun.

The North Korean and his company, Namchongang Trading, used offices in Beijing and Shenyang, China, to place orders for the equipment, which is critical to building centrifuges needed to enrich uranium, according to a German Customs Bureau report. U.S. officials briefed on the case were alarmed that Mr. Yun conducted some of his business through the offices of Shenyang Aircraft Industry Co., a Chinese state-owned firm.

In the ensuing months, the State Department aired its concerns about Mr. Yun’s activities to China’s government, according to former U.S. officials. But Beijing took no action.

China’s ministries of foreign affairs and commerce didn’t respond to requests for comment. Shenyang Aircraft says it had no recollection of any dealings with Mr. Yun.

Messrs. Chun and Yun have sought to accelerate North Korea’s weapons sales and procurement in recent years and allegedly have played important roles in strengthening Pyongyang’s military ties to countries such as Syria and Myanmar, say current and former U.S. officials.

North Korea analysts believe most of these transactions have been conducted through Office 99, which they describe as an international sales office and slush fund for Kim Jong Il.

“Anything that has to do with the imports and exports of weapons flows through Office 99,” says Oh Kongdan, a North Korea expert at Virginia’s Institute of Defense Analyses, a Pentagon-funded think tank. “It’s a royal patronage system.”

U.S. officials say that since the late 1990s they detected through intelligence channels intensifying military cooperation between North Korea and Syria, focused on everything from the development of chemical weapons to missiles.

In September 2007, Israeli jets bombed a facility in eastern Syria that U.S. officials say was a nearly operational replica of North Korea’s Yongbyon nuclear reactor. As many as 10 North Koreans died in the Israeli attack, according to U.S. officials. Mr. Yun and Namchongang Trading are believed to have played a central role in brokering development of the facility.

“That particular company was all over the nuclear trade. There’s no question about it,” says John Bolton, who served as the Bush administration’s top non-proliferation official. Both Syria and North Korea have denied cooperating on developing nuclear technologies.

Over the past two years, U.S. and U.N. officials have also voiced concerns about North Korea’s deepening military ties with Myanmar, the Southeast Asian country formerly known as Burma.

North Korea engineers have helped Myanmar build a maze of fortified bunkers to house senior government officials and military installations, according to Burmese defectors and commercial satellite photos. Current and former U.S. officials say Washington has intervened to block the transfer of Scud missiles to Myanmar from Pyongyang.

In June, Japan’s Ministry of Economy and Trade banned Tokyo-based Toko Boeki Trading Co. and device maker Riken Denshi from conducting international trade after three of their affiliated executives, one of them an ethnic Korean, were arrested trying to send machine tools on an export-control list to Myanmar using a dummy company in Malaysia. The equipment could be used to develop either ballistic missiles or centrifuges for a uranium-enrichment program, according to weapons experts. And the U.N. in its May report said it was examining “suspicious” ties between Mr. Yun’s Namchongang Trading and Myanmar, possibly linked to these activities in Japan.

The Obama administration, in response, has announced a stepped-up campaign to block North Korea’s ability to raise funds through the arms trade. In addition to the new sanctions, the Pentagon has said it will intensify the interdiction of ships and planes believed to be carrying North Korean arms.

Still, Mr. Theis and other North Korea experts believe that it is only through dialogue that the West will be able to curb the North’s proliferation threat. Mr. Theis says he is recently lobbied the IAEA to allow him to return to Pyongyang to hold meetings with Mr. Yun. So far, he says, the IAEA hasn’t agreed.

UPDATE 1: According to Reuters:

President Barack Obama on Monday broadened U.S. financial sanctions on North Korea, freezing the U.S. assets of eight North Korean companies or agencies and four individual citizens.

The U.S. Treasury released a fact sheet detailing U.S. allegations against the North Korean entities and individuals targeted under the new U.S. executive order and a previous one. The following is a summary:

Companies and Agencies

The Reconnainance General Bureau
The Reconnaissance General Bureau (RGB) is North Korea’s premiere intelligence organization, created in early 2009 by the merger of existing intelligence agencies. The RGB trades in conventional arms and controls the North Korean conventional arms firm Green Pine Associated Corporation, which was also identified for sanctions under Obama’s order for exporting arms or related materiel from North Korea, the Treasury said.

Green Pine Associated Corp.
Green Pine was brought under the control of the RGB in 2009. The Treasury said it specializes in the production of maritime military craft and armaments, such as submarines, military boats and missiles systems, and has exported torpedoes and technical assistance to Iranian defense-related firms.

Green Pine is responsible for approximately half of the arms and related materiel exported by North Korea and has taken over many of the activities of the Korea Mining Development Trading Corporation, according to the Treasury.

Office 39
Office 39 of the Korean Workers’ Party engages in illicit economic activity to support the North Korean government, the U.S. Treasury fact sheet said. Office 39 has branches throughout the nation that raise and manage funds and is responsible for earning foreign currency for senior party leaders through illicit activities such as narcotics trafficking.

Office 39 controls a number of entities inside North Korea and abroad through which the Treasury said it is involved in the production, smuggling, and distribution of narcotics, and it has also been involved in the attempted procurement and transfer to North Korea of luxury goods.

Office 39 produced methamphetamine and was also involved in its supply to small-scale North Korean smugglers for distribution through China and South Korea. It also operates poppy farms and produces opium and heroin, the Treasury said.

In 2009, Office 39 was involved in the failed attempt to purchase and export to North Korea — through China — two Italian-made luxury yachts worth more than $15 million and destined for North Korean leader Kim Jong-il, the Treasury said.

Korea Mining Development Trading Corp. (KOMID)
KOMID is Pyongyang’s main arms dealer and main exporter of goods and equipment related to ballistic missiles and conventional weapons, with offices located in multiple countries around the world with the primary goal of facilitating weapons sales and seeking new customers for its weapons, according to the Treasury.

KOMID uses Korea Taesong Trading Company and Korea Heungjin Trading Company for trading purposes. Korea Taesong has acted on behalf of KOMID in dealings with Syria, and Korea Heungjin acts as the procurement arm of KOMID, the Treasury fact sheet said. Korea Heungjin is also suspected to have been involved in supplying missile-related goods to Iran’s Shahid Hemmat Industrial Group, it said.

Korea Taesong was previously sanctioned by the U.S. Department of State in 2008 under the Iran, North Korea, and Syria Nonproliferation Act.

Munitions Industry Department
The Treasury said the Munitions Industry Department is responsible for overseeing the development of North Korea’s ballistic missiles, including the Taepodong-2 which was first test-launched in 2006 and has a possible range of 4,100 miles.

The Second Economic Committee
The Second Economic Committee is responsible for overseeing production of North Korea’s ballistic missiles. It also directs the activities of KOMID, according to the U.S. Treasury.

The Second Academy of Natural Sciences
The Second Academy of Natural Sciences is a national-level organization responsible for research and development of North Korea’s advanced weapons systems, including missiles and probably nuclear weapons. It uses a number of subordinate organizations, including Tangun Trading Corporation, to obtain technology, equipment, and information from overseas for use in North Korea’s missile and probably nuclear weapons programs, the U.S. Treasury said.

Individuals

Kim Yong-chol
General Kim Yong-chol commands the Reconnaissance General Bureau.

Ri Je-son and Ri Hong-sap
The U.S. Treasury fact sheet said Ri Je-son and Ri Hong-sop act for or on behalf of the General Bureau of Atomic Energy (GBAE), which is responsible for North Korea’s nuclear program and manages operations at the Yongbyon Nuclear Research Center. GBAE was designated by the United Nations in July 2009 for its involvement in North Korea’s nuclear program and subsequently sanctioned by the State Department.

Ri Je-son is the director of GBAE and is responsible for facilitating several nuclear endeavors including GBAE’s management of Yongbyon Nuclear Research Center and Namchongang Trading Corporation, according to the Treasury.

Ri Hong-sop is a councilor for GBAE. He is also the former Director of Yongbyon Nuclear Research Center. In that capacity he oversaw the three core facilities that North Korea used to produce weapons-grade plutonium, the Treasury said.

Both Ri Je-son and Ri Hong-sop are also subject to the asset freeze and travel ban provisions under an earlier United Nations Security Council resolution.

Yun Ho-jin
Yun Ho-jin acts for or on behalf of Namchongang Trading Corporation (NCG), a North Korean trading company subordinate to GBAE. NCG has been involved in the procurement of Japanese- origin vacuum pumps that were identified at a North Korean nuclear facility, as well as nuclear-related procurement associated with a German individual.

Yun Ho-jin has acted on behalf of NCG in various capacities since the 1980s. As a senior official at NCG, he oversaw the import of items needed for North Korea’s uranium enrichment program.

Through an NCG office in China, Yun Ho-jin was also involved in purchases of sensitive material linked to the construction of a nuclear reactor in Syria, the Treasury fact sheet said.

He is also under U.N. Security Council asset freeze and travel ban sanctions.

ORIGINAL POST: Here is the full statement by the US Treasury Department:

August 30, 2010
TG-840

United States Designates North Korean Entities and Individuals for Activities Related to North Korea’s Weapons of Mass Destruction Program

WASHINGTON – In joint actions, the U.S. Departments of Treasury and State today announced the designations of five North Korean entities and three individuals under Executive Order (E.O.) 13382 for supporting North Korea’s Weapons of Mass Destruction (WMD) program. Executive Order 13382 is an authority aimed at freezing the assets of WMD proliferators and their supporters thereby isolating them from the U.S. financial and commercial systems.

Also today, President Obama signed an Executive Order that directs the Secretary of the Treasury, in consultation with the Secretary of State, to target for sanctions individuals and entities facilitating North Korean trafficking in arms and related materiel; procurement of luxury goods; and engagement in illicit activities, including money laundering, the counterfeiting of goods and currency, bulk cash smuggling and narcotics trafficking. The new Executive Order supplements E.O 13382, under which North Korean entities have been designated to date, and is consistent with measures required in UNSCRs 1718 and 1874.

Korea Taesong Trading Company and Korea Heungjin Trading Company
Pyongyang-based entities the Korea Taesong Trading Company and Korea Heungjin Trading Company, are used by the Korea Mining Development Trading Corporation (KOMID) for trading purposes. Korea Taesong Trading Company has acted on behalf of KOMID in dealings with Syria, and Korea Heungjin Trading Company acts as the procurement arm of KOMID. Korea Heungjin Trading Company is also suspected to have been involved in supplying missile-related goods to Iran’s Shahid Hemmat Industrial Group.

KOMID is Pyongyang’s premier arms dealer and main exporter of goods and equipment related to ballistic missiles and conventional weapons, with offices located in multiple countries around the world with the primary goal of facilitating weapons sales and seeking new customers for its weapons. It was listed in the Annex to E.O. 13382 of June 2005 and has been sanctioned by the United States repeatedly over the last 10 years for trading in missile technology. KOMID was also designated by the UNSCR 1718 Committee to be subject to the asset freeze provisions of UNSCR 1718.

Korea Taesong Trading Company was previously sanctioned by the U.S. Department of State in 2008 under the Iran, North Korea, and Syria Nonproliferation Act (INKSNA). INKSNA provides for the imposition of measures on entities or individuals for the transfer to or acquisition from Iran, Syria, or North Korea of equipment or technology controlled under multilateral export control lists or otherwise having the potential to make a material contribution to the proliferation of WMD or cruise or ballistic missile systems.

Second Economic Committee, Munitions Industry Department and Second Academy of Natural Sciences
The Munitions Industry Department and Second Economic Committee are involved in key aspects of North Korea’s missile program. The Munitions Industry Department is responsible for overseeing the development of North Korea’s ballistic missiles, including the Taepo Dong-2.

The Second Economic Committee is responsible for overseeing the production of North Korea’s ballistic missiles. The Second Economic Committee also directs the activities of KOMID.

The Second Academy of Natural Sciences is a national-level organization responsible for research and development of North Korea’s advanced weapons systems, including missiles and probably nuclear weapons. The Second Academy of Natural Sciences uses a number of subordinate organizations to obtain technology, equipment, and information from overseas, including Tangun Trading Corporation, for use in North Korea’s missile and probably nuclear weapons programs.

Tangun Trading Corporation is subordinate to the Second Academy of Natural Sciences and is primarily responsible for the procurement of commodities and technologies to support North Korea’s defense research and development programs and procurement, including materials that are controlled under the Missile Technology Control Regime (MTCR) or the Australia Group. Tangun Trading Corporation was designated by the Department of State pursuant to E.O. 13382 in September 2009. Tangun Trading Corporation was also designated by the UNSCR 1718 Committee to be subject to the asset freeze provisions of UNSCR 1718.

Ri Je-son and Ri Hong-sop
Ri Je-son and Ri Hong-sop act for or on behalf of the General Bureau of Atomic Energy (GBAE), which is responsible for North Korea’s nuclear program and manages operations at the Yongbyon Nuclear Research Center. GBAE was designated by the United Nations in July 2009 for its involvement in North Korea’s nuclear program and subsequently sanctioned by the Department of State under E.O. 13382 in September 2009.

Ri Je-son is the Director of GBAE and is responsible for facilitating several nuclear endeavors including GBAE’s management of Yongbyon Nuclear Research Center and Namchongang Trading Corporation.

Ri Hong-sop is a councilor for GBAE. He is also the former Director of Yongbyon Nuclear Research Center. In that capacity he oversaw the three core facilities that the DPRK used to produce of weapons-grade plutonium: the Fuel Fabrication Facility, the 5MWe Experimental Reactor, and the Radiological Laboratory (Reprocessing Plant).

Ri Je-son and Ri Hong-sop were also designated by the UNSCR 1718 Committee to be subject to the asset freeze and travel ban provisions of UNSCR 1718.

Yun Ho-lin
Yun Ho-jin acts for or on behalf of Namchongang Trading Corporation (NCG), a North Korean trading company subordinate to GBAE. NCG has been involved in the procurement of Japanese- origin vacuum pumps that were identified at a North Korean nuclear facility, as well as nuclear-related procurement associated with a German individual. NCG was designated by the State Department pursuant to E.O. 13382 in June 2009.

Yun Ho-jin has acted on behalf of NCG in various capacities since the 1980s. As a senior official at NCG, he oversaw the import of items needed for North Korea’s uranium enrichment program.

Through an NCG office in China, Yun Ho-jin was also involved in purchases of sensitive material linked to the construction of a nuclear reactor in Syria.

Yun Ho-jin was also designated by the UNSCR 1718 Committee to be subject to the asset freeze and travel ban provisions of UNSCR 1718.

Identifying Information:
Entity: Korea Taesong Trading Company
Location: Pyongyang, North Korea

Entity: Korea Heungjin Trading Company
AKA: Hunjin Trading Co.
Location: Pyongyang, North Korea

Entity: Second Economic Committee
Location: Kangdong, North Korea

Entity: Munitions Industry Department
AKA: Military Supplies Industry Department
Location: Pyongyang, North Korea

Entity: Second Academy of Natural Sciences
AKA: 2nd Academy of Natural Sciences
AKA: Che 2 Chayon Kwahak-Won
AKA: Academy of Natural Sciences
AKA: Chayon Kwahak-Won
AKA: National Defense Academy
AKA: Kukpang Kwahak-Won
AKA: Second Academy of Natural Sciences Research Institute SANSRI
Location: Pyongyang, North Korea

Individual: Ri Je-Son
AKA: Ri Che-Son
DOB: 1938

Individual: Ri Hong-Sop
DOB: 1940

Individual: Yun Ho-jin
AKA: Yun Ho-chin

According to Yonhap:

North Korea’s former Premier Pak Pong-ju appears to have returned to power with the Workers’ Party, more than three years after he was ousted due to his economic reform drive, according to a Pyongyang broadcast report on Saturday.

The North’s Korean Central Broadcasting Station introduced Pak as the “first deputy director of the Central Committee of the Workers’ Party of Korea,” reporting on the 50th foundation ceremony of Pyongyang’s flagship Okryu Restaurant held Friday with a number of senior officials and workers.

There is no other known figure with the same name among the North Korean power-holding elite.

Pak, a long-time industry technocrat and pragmatist, was named premier of the North’s Cabinet in September 2003. He spearheaded the North’s so-called July 1st Economic Measure reform drive toward market economy, which aimed to give more autonomy to state firms and gradually reduce state rationing of food and daily necessities.

But his strong initiative triggered a backlash from the party and the military that resulted in his dismissal. Pak was suspended from duty in June 2006 on charges of fund apprehension and was fired in April the following year. Kim Yong-il, then land and marine transport minister, replaced him.

Pak is believed to have been demoted to a managerial post at a clothing factory outside Pyongyang.

Cho Myung-chul, a senior researcher at the Korea Institute for International Economic Policy who has defected from North Korea, viewed Pak’s reinstatement as a signal of a shifting North Korean economic policy toward pragmatism, following its failed currency reform last year.

“Pak is an emblematic figure of the July 1st Economic Measure that promoted pragmatism. His reinstatement could be connected with an economic policy shift back to pragmatism after the anti-market currency reform failed.”

In a bid to curb the burgeoning merchant class and strengthen its socialist system, North Korea implemented a surprise currency reform in November, knocking two zeros off its denominations. But the move backfired, worsening food shortages and triggering social unrest.

Apparently taking responsibility for the botched reform, Premier Kim Yong-il was replaced by Choe Yong-rim in June.

The broadcast report on Saturday did not specify which department of the Workers’ Party Pak joined, but it is likely that he was posted to the light industry department, considering the ceremony involving a restaurant and the fact that he was the department’s first deputy director in 1993.

Pak is believed to be a close confidante to Jang Song-thaek, vice chairman of the National Defense Commission and brother-in-law of North Korean leader Kim Jong-il. Jang is seen as the central figure in grooming Kim’s third and youngest son, Jong-un, as the next leader.

Japan’s Mainichi Shimbun reported on Aug. 15, quoting multiple sources, that Pak and about 20 other figures close to Jang had been reinstated within the past two years. The report also said Pak has risen to the second highest spot in the party’s light industry department, which is headed by Kim Kyong-hui, Kim Jong-il’s sister and Jang’s wife.

According to the New York Times:

He is the latest among senior North Korean officials whose sudden banishment and equally unexpected reinstatement have sparked outside speculation about Mr. Kim’s intentions. Mr. Pak appeared to have fallen from Mr. Kim’s favor when he was fired from the premiership in 2007 and sent to work as a factory manager in a provincial town.

“His reinstatement could signal the return of pragmatists and reformists,” said Cheong Seong-chang, a North Korea analyst in the Sejong Institute south of Seoul. “We may be able to see him push the economic reform and openness he had once championed.”

Analysts in Seoul say that few North Korean officials wield much individual influence in Mr. Kim’s government. But they say that they can infer Mr. Kim’s plans from the way he punishes and rewards officials identified with various policy approaches.

“Pak’s reinstatement indicates that North Korea is shifting back to market reforms, even if grudgingly, after its botched attempt to re-enforce state control on the economy,” said Baek Seung-joo, the head of North Korea research at the government-financed Korea Institute for Defense Analyses in Seoul.

Mr. Pak, a lifetime technocrat, was best known as the architect of “Measures to Improve Economic Management Order.” Issued on July 1, 2002, they indirectly acknowledged the failure of the North’s ration system by instructing factories, collective farms and other economic units to provide their own daily necessities and give incentives for workers.

In September 2003 Mr. Pak was made prime minister, a post in charge of carrying out economic policies.

His reforms were necessitated by the collapse of the centrally planned economy after a famine in the mid-1990s. But they also coincided with — and fueled — the spread of private markets, which quickly emerged as a key source of food and other necessities for North Koreans.

But Mr. Pak’s reform programs irked the government’s old guard, especially in the hard-line military, which had grabbed the lion’s share in trade under the old system. The markets facilitated the influx of DVDs and other smuggled goods the government considered a capitalist threat.

Around 2005, North Korea began controlling markets. Its attempt to reinforce state control on the economy peaked late last year when it replaced its banknotes with a new currency, shut down markets and ordered people to buy goods only from state-run stores. The currency reform was aimed at stifling the markets by drastically reducing traders’ personal wealth in the old currency.

The moves quickly backfired. Inflation surged as traders hoarded their goods and government stores failed to meet demand. Sporadic protests were reported. Earlier this year, Pak Nam-gi, head of finance and planning who led the failed currency reform, was executed, according to South Korean news reports. North Korean markets began coming back to life, according to recent defectors.

Pak Pong-ju, the former prime minister, returns as North Korea prepares for a party caucus early next month. Officials and analysts in Seoul say they will monitor the meeting for changes in the cabinet and party leadership that might provide clues to Mr. Kim’s plans to hand over power to his third son, Kim Jong-un, who is in his late 20s.

Mr. Pak’s reinstatement adds to the growing influence of Jang Song-taek, Mr. Kim’s brother-in-law, said Mr. Baek, the researcher.

In June, Mr. Kim presided over a session of the rubber-stamp Supreme People’s Assembly where Mr. Jang, a potential caretaker for his son, was elevated to the No. 2 post in the ruling hierarchy. In the same meeting, Mr. Pak’s successor as prime minister, Kim Yong-il, who reportedly made a rare apology in February for the botched currency reform, was fired.

Mr. Pak, as first deputy director, is believed to report directly to Kim Kyong-hee, Mr. Kim’s younger sister and Mr. Jang’s wife, who works as party director in charge of the North’s light industries, Mr. Cheong said.

Read the full stories here:
N. Korean ex-PM Pak Pong-ju appears to be back in power
Yonhap
8/21/2010

North Korea Reinstates Market-Oriented Official
New York Times
Choe Sang-hun
8/23/2010

UPDATE 8/9/2010: According to Yonhap:

A state-run North Korean bank has lost a lawsuit for not paying back a loan it borrowed from a Taiwanese bank nine years ago, the New York district court said Friday.

The District Court of New York confirmed it ordered the Foreign Trade Bank of Korea to pay compensations of just under US$6.77 million to the Mega International Commercial Bank (MICB) in a ruling made earlier in the week.

And as Josh notes: “By which they really mean the U.S. District Court for the Southern District of New York.”

Some additional case information may be found here.

As an aside, North Korea also recently lost another court case in the US.  Read more here.

ORIGINAL POST (5/6/2010): According to KBS:

The Taiwanese bank filed its lawsuit to claim some five million dollars in interest and principal on August 25th, 2001.

It is unclear whether the North Korean bank will repay the Taiwanese plaintiff, but North Korea experts say this will at least add to the crunch on North Korean finances.

Some reference information can be found here.

According to the Korea Times:

A state-run North Korean bank is facing trial in the United States for failing to pay a $5 million loan that it borrowed from a Taiwanese bank in 2001, according to sources Wednesday.

The District Court for the Southern District of New York ordered the Foreign Trade Bank (FTB) of North Korea to make a court appearance on May 17 and submit a proposed case management plan and scheduling order.

The FTB reportedly borrowed $5 million from the Mega International Commercial Bank (MICB) in Taiwan on Aug. 25, 2001 on the promise to amortize the principal and interest in three installments by Sept. 15, 2004.

No repayment was made until December 2008, when the FTB paid the MICB $100,000 to cover some of the interest. The North Korean bank has thus far paid off a total of $462,000 to the MICB, still owing $1.78 million in interest and $4.7 million in principal.

“It has been almost unprecedented for North Korea to be sued in a commercial dispute, though there were occasions that the North was asked to stand in U.S. courts for terrorist activities,” an official of the South Korean Consulate General in New York told Yonhap News.

The official said the litigation will hamper Pyongyang’s recent move to aggressively attract foreign investment in an effort to revive its flagging economy, given that obviously doubt will arise over its debt repayment capacity.

Despite a recent currency reform, the North’s economy remains in a parlous state as the U.N. sanctions have cut off virtually all sources of foreign currency.

Seoul has also suspended tours to the North’s popular tourist destination of Mt. Geumgang, following the shooting death of a South Korean tourist in the mountain resort in July 2008. The tours were a cash cow for the North, generating more than $500 million between 1998 and 2008.

On May 1, the FTB’s official exchange rate was 96.9 won per dollar, but it was traded at 180 won in Pyongyang and higher in other areas, demonstrating the instability of the North’s economy, according to the sources.

Since established in 1959, the bank has served as the reclusive regime’s main foreign exchange bank, they said. It has branch offices in France, Australia, Kuwait, Hong Kong and Beijing.

Read the full story here:
NK trade bank sued for failure to settle debt
Korea Times
5/5/2010

According to Naenara:

The Pyongyang International Insurance Seminar on “Marine Insurance & Reinsurance: the Challenges of the Time” ran between June 7 and 8, 2010.

Present at the seminar were Yang Hyong Sop, vice-president of the Presidium of the DPRK Supreme People’s Assembly, Pak Su Gil, vice-premier and minister of Finance, So Tong Myong, president of the Korea National Insurance Corporation (KNIC) and chairman of the organizing committee of the seminar, officials from the KNIC, insurance workers from the provinces and officials concerned.

Among those present were Ezzat Abdel-Bary, secretary general of the Federation of Afro-Asian Insurers and Reinsurers, and his party, Roberto Quinto Martinez, permanent secretariat of the Association of Insurance and Reinsurance in Developing Countries, delegates from companies of China, Morocco, Sudan, Switzerland, the United Arab Emirates, Britain, India and Egypt, officials of foreign embassies and missions of international organizations in the DPRK.

A delegation from the Kumgang Insurance Company of the General Association of Korean Residents in Japan was also present at the seminar.

The seminar heard papers on marine cargo insurance, marine cargo claims and adjustment—an overview, the art of adjusting catastrophe claims, new trend in the reinsurance market and other papers. Then speeches were made.

The seminar provided the participants with an opportunity to find a way out of instability in the field of insurance affected by the global financial crisis and let each country make an effective use of its own financial resources in the field of insurance and strengthen the international cooperation and exchange.

Unfortunately, when I hear the words “DPRK” and “insurance,” I think of this.