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Politics, blood ties trump trump profits in north

Thursday, June 22nd, 2006

Joong Ang Daily
6/22/2006

In the ground floor ballroom of the Yanggakdo Hotel annex in Pyongyang, the North Korean Chamber of Commerce hosted a trade information and investors’ relations conference on May 16. Senior North Korean trade ministry officials gave presentations on North Korea’s economic policy and investment climate. Rim Tae-dok, chief counselor of the trade ministry, said Pyongyang protected property rights of foreign investors and guaranteed the independence of their management. The North Korean official stressed that foreign investors would enjoy tax benefits and that the legal process of establishing companies in the North has been largely simplified.

Another senior North Korean official, Kim Ha-dong, also gave a presentation about Pyongyang’s export policy. Mr. Kim, a senior researcher at the trade ministry, said the communist country had been issuing permits for exports and imports after only a short review process. He encouraged investors to participate in trade.

The North Korean presentations were not very different from those given in any capitalist country, but the concept of “self-reliance” was prominent.

“We will build a self-reliant economy of Koreans and carry out trade on top of that,” Mr. Kim said. He added that North Korea’s self-reliance must not be damaged or controlled by foreign economies through trade.

During the JoongAng Ilbo’s 10-day survey of the reclusive communist country’s economic sites, Pyongyang’s dilemma ― self-reliant socialism versus economic development by attracting foreign investments ― was apparent. Some North Korean officials showed skepticism about China’s model of partially opening its economy, claiming that their country had to be run in a different manner.

“I have toured special economic zones in China several times,” said Ju Tong-chan, the North’s chairman of the National Economic Cooperation Committee. “But we have different ways of managing our economy than China, and I believe we should run our special economic zones in different ways. We are still researching our options, but we will not do it that [Chinese] way.”

China was able to expand its economy at high speed after the central government opened up the economy. It gave local governments enough independence to run business autonomously in their areas and attract foreign investment. But Mr. Ju was obviously unconvinced by the success of China’s model. The opening of the economy could boomerang, becoming a threat to the North’s system, he worried.

On factories and farms, North Koreans were still caught up – or at least gave the outward appearance of being caught up ― in a personality cult centered on the nation’s founding family. At cooperative farms and factories, the senior managers’ introductory briefings were always about the lessons taught by Kim Il Sung, North Korea’s first president, and Kim Jong-il, who succeeded him but did not assume the title of national president. These managers’ presentations began with the number of visits by the Kims to the site. There were always paeans to the communist regime’s “military first” policy and slogans to that effect were emblazoned everywhere, making it clear that the military and politics take priority over the economy.

North Korean officials were also reluctant to lay out all pertinent information to investors and journalists.

Kim Yong-il, 45, the manager of the port at Nampo on the country’s west coast, refused to cite specific numbers about the port’s freight-handling capacity. He said only that it could deal with “large amounts” of cargo.

Mr. Rim, the trade ministry chief counselor, said North Korean politics were extremely stable, which guaranteed the security of foreign investments. He gave no data or examples to support that claim of stability, however, and completely ignored the question of North Korea’s nuclear programs and how they might or might not affect stability.

Reacting to the journalists’ remarks that South Korean firms were reluctant to invest in the North because it has been difficult to make profits there, Mr. Ju, the chairman of the National Economic Cooperation Committee, said, “Why is money the priority? Inter-Korean business must be about something more than just monetary calculations.”

He was also visibly upset about Seoul’s policy on economic cooperation. “We made extremely sensitive military restricted areas at Mount Kumgang and Kaesong available to the South,” Mr. Ju said. “But the South has just given us a lot of excuses and failed to cooperate.”

He continued, “To nurture the Kaesong Industrial Complex into a world-class production facility, electronic and advanced technology industries are crucial. But labor-intensive industries are the majority in Kaesong. In this information era of the 21st century, the South has failed to bring in computers for administrative use in Kaesong.”

He also vented some spleen about the United States, asking the journalists why Seoul was so careful not to irritate Washington. He cited the U.S. restrictions on the re-export without prior approval of so-called “dual-use” goods, those with civilian and military applications, to countries it has blacklisted, including North Korea. Other international accords, such as the Wassenaar Agreement, also prevent South Korea from providing the North merchandise and commodities that have “strategic” applications.

But Mr. Ju sounded firm about continuing operations at Kaesong. “It is the nucleus of inter-Korean economic cooperation, and we must make it a success first. Then we can move on to other projects.”

He also dismissed the U.S. concerns that workers in Kaesong were laboring under harsh working conditions, but seemed to sidestep the basic question. “It is a matter that we should deal with,” Mr. Ju said. “Since we manage businesses differently, we are trying to come up with the best resolution to make direct [wage] payments to the workers.”

South Korean economists and businessmen who listened to similar presentations and looked at some of the North’s accounts were troubled by Pyongyang’s rigidity in opening up the economy. That, they said, coupled with the simmering nuclear weapons problem, is the most serious obstacle to attracting foreign investments. Unless U.S. diplomatic ties with North Korea are established, investing in facilities in North Korea and selling “made in North Korea” products on global markets would be difficult and risky, they agreed.

“If a foreign investor wants to visit a factory in the North that he has put money into, he has to obtain an invitation every time, and his schedule and movements in the North are strictly controlled,” said Kwon Yeong-wuk, the trade promotion director at the Korea International Trade Association of Seoul. “Under such circumstances, the North should not expect much in the way of foreign investments.” He said Pyongyang had a “my way or the highway” approach to the economy: If you’re here, follow our rules. The rigidity, he reiterated, is a serious obstacle to investors.

Other experts and businessmen in South Korea said Pyongyang’s attitude toward inter-Korean business in particular makes it hard to earn profit. They complain about the stress North Korean officials put on the concept that business between the two Koreas should be based on the maxim “blood is thicker than water” and not on market principles. An official at North Korea’s National Reconciliation Council argued that South Korean conglomerates should make large investments there based on that concept.

A South Korean businessman who has been looking for business opportunities in the North said he has run into a series of dead ends. “South Korean firms are doing businesses in the global market,” he said. “The largest market is the United States, and not many people would want to give that up to do business with the North.” He added that North Korea’s cheap but skilled manpower is an attractive point, but that poor infrastructure, extremely low purchasing power and the difficulty of obtaining raw materials make China and Vietnam much more attractive investment locales. Kim Yeon-chul, an academic at Korea University in Seoul, agreed with that assessment. “Large companies in South Korea have already automated their production facilities, so labor costs are not important in deciding on investments,” he said. “North Korea must improve other conditions instead of stressing the merits of its manpower or blaming outside causes.”

Posted in Chamber of Commerce (DPRK), Economic reform, Foreign direct investment, International trade, Kaesong Industrial Complex (KIC), Labor conditions/wages, Mt. Kumgang Tourist Special Zone, National Economic Cooperation Federation, Sea shipping, South Korea | Comments Closed

WFP asks ROK for DPRK AID

Friday, May 12th, 2006

any letters I missed in that title?

From the Korea Times:

WFP Asks South Korea to Contribute Food to North
By Christopher Carpenter

A representative of the United Nations World Food Program said on Friday that South Korea was considered a potential donor in the new North Korean food aid program.
At a press conference in Seoul, Tony Banbury, the WFP’s regional director for Asia, said he met with officials Friday at the South Korean Ministry of Unification and the Ministry of Foreign Affairs and Trade about contributing to the program.

“Our discussions were very positive,’’ Banbury said. “They are ongoing and I think I’ll leave it at that.’’

Bae Young-han, a spokesman for the Ministry of Foreign Affairs and Trade said that while he could not confirm the meeting with Banbury, South Korea was discussing participating in the WFP effort.

“In the past, we contributed through the WFP channel,’’ Bae said.

Banbury came to Seoul on the heels of signing a letter of understanding with Pyongyang Wednesday to resume aid to the North. It was discontinued in December 2005 when North Korea asked that food aid be replaced with developmental aid.

Banbury said assistance will not be on the scale it was when they left North Korea last year, but that the assistance being provided was better than discontinuing the program completely. Around 1.9 million people will benefit under the new agreement, down from the 6.5 million the WFP was feeding when it left in December.

“The alternative to this was closing down the operation entirely and walking away,’’ he said.

The new program will provide three types of assistance. Roughly half of the 150,000 tons of food that will go to the North over the next two years will be designated for pregnant and nursing mothers, and for babies that are younger than six months of age.

Primary aged school children will receive daily packages of enriched biscuits that provide 75 percent of their daily vitamin and mineral requirements. Finally, communities involved in projects that will increase their ability to produce food will be rewarded with food aid.

“As they do the work, we will pay them in food,’’ Banbury said.

The new program, which Banbury said the North considers a transitional program that will lead to development aid, allows the 10 WFP staff who will be in North Korea to monitor the food distribution system.

The staff will have access to the institutions where food is being distributed, to the community development projects, to areas of the country that may need further assistance and to the logistical operation that brings food into the country and stores it.

Banbury said the WFP would strictly enforce its monitoring policy of “no access-no food.’’

While Banbury said North Korean officials never admitted they needed emergency food assistance, the WFP offered to increase the scope of the program if it were wanted.

“That’s a conversation we might continue in the future,’’ he said.

Posted in Public Distribiution System (PDS), South Korea, UN World Food Program | Comments Closed

World Food Program back to DPRK

Friday, May 12th, 2006

From the Washington Post:

After a government-imposed shutdown of more than four months, the World Food Program announced Thursday that it would resume food aid to hungry North Koreans, but on a sharply reduced scale.

Tony Banbury, the U.N. agency’s regional director for Asia, said he signed an accord with the government in Pyongyang that will allow 10 staff members to operate a $102 million feeding program, helping 1.9 million of the neediest North Koreans over the next two years.

The accord, reached Wednesday after prolonged negotiations, ended the uncertainty that has prevailed since the DPRK government announced in August that it would accept development aid but no longer wanted food aid. That forced the World Food Program, which runs North Korea’s main feeding operation, to halt work at the end of December.

Banbury called the new agreement “an important breakthrough” for North Korea’s undernourished poor. But he said the number of people receiving food would drop considerably under restrictions laid down by North Korean officials — from 6 million in 163 counties under last year’s $200 million-plus program to 1.9 million in 30 counties under the new program.

“They explained this by saying they needed less food, that their crops were getting better and that they did not want to create a culture of dependency,” Banbury told reporters during a stop in Beijing.

Because Kim’s government is highly secretive, its assertion that more food aid was unnecessary could not be verified, Banbury said. But he expressed skepticism, noting that North Korea recently sought 500,000 tons of grain from South Korea and in recent years has consistently produced nearly 1 million tons less than its annual requirement of 5.3 million tons.

Economic reforms that began in 2002 have gradually loosened North Korea’s rigidly Stalinist system and injected some life into the economy, according to reports from Pyongyang. In particular, private food markets have been allowed in recent years, providing previously unheard-of choices for those with money. Food prices soared, however, prompting farmers to sell their crops in the private sector rather than to the public distribution system at controlled state prices. This in turn made life harder for the poorest among North Korea’s 23 million people, who rely on public rations.

In response, the government announced recently that the public distribution system would resume its monopoly on food grains. How this step ties in with the economic reforms was not explained. But Banbury said the agreement to resume U.N. food aid suggested that North Korean officials realized the public distribution system could not get food to everyone who needed it despite their earlier assertion that it was time to move on to development aid.

Production and distribution of U.N. food aid will resume immediately, he said, but it will take several weeks to get operations up to speed. As it was previously, most of the food aid will be in the form of vitamin-enriched biscuits for children, enriched porridge mixes for infants and supplements for pregnant women and the elderly.

Although the number of staff members has been shaved from 48 to 10, Banbury said U.N. officials would be able to verify that the food was going to the poor and not government officials or the military. Diversion of food has been a major concern of the United States and other U.N. donor countries since Kim proclaimed that soldiers and other officials have priority in North Korea.

“We will not be providing food to any areas of the country where our staff does not have full access,” Banbury said.

Posted in Agriculture, General markets (FMR: Farmers Market), Public Distribiution System (PDS), UN World Food Program | Comments Closed

Food aid update

Thursday, May 4th, 2006

From Yonhap:

A U.S. human rights organization on Thursday urged North Korea to allow international monitoring of food distribution, saying its recent policy changes on outside aid may cause renewed hunger among its people.

Recent decisions by Pyongyang to suspend the operations of the World Food Program in the country and revive the food rationing system may leave many in hunger, said Washington-based Human Rights Watch in a press conference in Seoul.

“North Korea has gone back to precisely the same place, when the famine began,” said Tom Malinowski, Washington advocacy director of the organization, referring to the mid 1990s in which two million North Koreans supposedly died of hunger.

North Korea adopted a series of policies last year that irked international human rights organizations. It asked the U.N. relief agency to end emergency food aid and its monitoring in September and then announced the reinstatement of the public distribution system, in which the government provides rationing of food and equipment to individuals.

Citing interviews with North Korean defectors and World Food Program officials, the rights watchdog said the food rationing system operates on a priority basis, feeding Workers’ Party members and military and police officers while leaving many ordinary people in hunger.

Despite its improved harvest in recent years, North Korea still suffers from a chronic food shortage, it said, with the country needing approximately 6 million tons of grain a year to provide basic nutrition for its 22 million people.

The North’s grain production hovers at 4.5 million tons and it receives 750,000 tons in aid from South Korea and China, but still falls short of demand, the organization said, citing statistics from the South Korean government.

It urged Seoul to strengthen the monitoring in the North to make sure the needy people get the food.

South Korea shouldn’t “simply passively accept that it is inevitable that North Korea cannot be influenced,” Malinowski said.

North Korea experts in Seoul, however, said the recent decisions by the communist country suggest it is making efforts to stand on its own rather than depend on emergency donations. And the revival of the public distribution system illustrates its improved food situation, they said.

“When the rationing system was reduced (in the late 1990s) it was because the government didn’t have food to distribute. Now that it has expanded the rationing system, it is in a better situation,” said Chon Hyun-joon, senior research fellow with the Korea Institute for National Unification, a public research body on North Korea in Seoul.

Posted in Public Distribiution System (PDS), UN World Food Program | Comments Closed

North Korean Food Rations Uncertain

Wednesday, April 26th, 2006

According to the Manilla Times and ABS/CBN Interactive:

North Korea could suspend food rations for ordinary citizens in Pyongyang next month due to its worsening famine, a South Korean aid group warned Sunday. The North Korean capital has had a better food supply than other areas despite a chronic food shortage since the 1990s.

“Pyongyang is no longer a safe zone in food supply,” Good Friends, a Seoul-based aid group for North Koreans, said in a newsletter. “Food supply officials in Pyongyang say food rations lasted only 10 days in April and will be suspended for ordinary citizens beginning in May,” the group said. The aid group said big businesses and state organizations would remain unaffected.

United Nations food aid to North Korea ended late last year after Pyongyang said it no longer needed emergency shipments from the World Food Program (WFP) and other international humanitarian agencies. The North Korean government said it instead wants development assistance and a smaller operation with fewer international staff whose monitoring activities would be restricted.

WFP has proposed a downsized aid plan to feed 1.9 million people, largely women and children vulnerable to malnutrition and disease. It used to feed 6.5 million people.

North Korea’s grain production rose 5.3 percent to 4.54 million tons last year, still far short of its annual demand of six million tons, South Korea’s unification ministry report says.

According to the Daily NK:

North Korean sources have claimed that since April only some areas of Pyongyang have gotten food rations, and local areas were already cut off. North Korea recently relaunched rationing on the Workers’ Party Foundation Day (10/10/2005), yet from the beginning, the program did not meet its objectives, and furthermore, from this spring even Pyongyang is seeing a shortage of food.

Mr. Kim, who is a North Korean trader and now stays in Dandong, China said, “Officials working at the central agencies (the Party, Ministries, Court) in Pyongyang have gotten rations, but workers in general factories and small companies in local cities have to resolve their April and June food prooblmes themselves.”

Mr. Kim stated, “Despite a severe shortage of food, some wealthy, powerful people are persisting well. Yet other people who rely on the food rationing of factories mainly go to local areas to exchange goods for food.” It led to a situation where North Koreans have to withstand starvation by all means, before new potatoes come out.

At the same time, price of rice at the Jangmadang 9farmers markets) began rising.

Rice prices at the Shinuiju Jangmadang are:

1,000W ($0.33) to 1,200W($0.4) per 1kg
Yongcheon rice is 1,200W 1kg
Chinese rice is 900W($0.3) to 930W($0.31) per 1kg

Corn is 300W($0.1) to 400W($0.133).

Shinuiju rice is a little more expensive than that of other cities, and its wheat flour is cheaper. It is because rice comes in from other cities, and Chinese wheat flour is distributed to each city via Shinuiju.

Mr. Lee hinted that travel permits to China are issued “conditionally.” That is, after visitors to China come back to North Korea, they have to offer some food to the National Security Agency, and people with no relatives have a harder time getting passes.

Mr. Lee said, “As for me, it is better because I found my older brother. However, other people living in our village go out to rivers to dig for gold and to mountains to dig for edible plants.”

March and April, called the ‘Barley Period (Borigogae)’ are the months when food crunches are most severe. This is when the crops and edible plants (side dishes) harvested last year begin to run out. When edible plants run out, North Koreans prolong their lives by eating grass or wild plants. However, because of death by starvation in the mid 90’s, which resulted in massive foraging, even wild plants like bracken are not easily found now.

Posted in Agriculture, Public Distribiution System (PDS), UN World Food Program | Comments Closed

Dock No. 2 of Ryongnam Ship Repairing Factory Commissioned

Friday, March 24th, 2006

KCNA
3/24/2006

A commissioning ceremony of the Dock No. 2 of the Ryongnam Ship Repairing Factory took place on the spot on Friday. With the building of the large computer-aided dock capable of repairing tens of thousands of tons of several ships simultaneously at the factory the capacity of ship repairing has remarkably increased and firmer material and technological foundations have been laid to develop the shipping industry of the country as required by the new century. A message of thanks sent by the Central Committee of the Workers’ Party of Korea to officials and builders of the Ministry of Land and Marine Transport who performed great labor feats in the construction of Dock No. 2 was conveyed at the ceremony. The message said that the officials and builders of the ministry who turned out as one true to the behests of President Kim Il Sung on further increasing the capacity of the factory and the militant tasks of the WPK performed the great labor feats in completing the construction of Dock No. 2 in a big and bold way with their own efforts in a short span of time.

It highly appreciated the officials and builders of the ministry for displaying intense loyalty to the Party and the leader and patriotic devotion and successfully building Dock No. 2 as a monumental edifice of the Songun era.

Speeches were made at the ceremony.

Present there were Vice-Premier of the Cabinet Ro Tu Chol, Minister of Land and Marine Transport Kim Yong Il and other officials concerned.

Posted in Manufacturing, Ministry of Land and Marine Transport, Sea shipping, Transportation | Comments Closed

North Korean Grain production up 5.3% in 2005

Wednesday, January 25th, 2006

According to Financial Express:

North Korea’s grain production rose 5.3 per cent to 4.54 million tonnes in 2005, helped by better harvests and fertilizer shipments from South Korea, South Korean data showed today.

The 2005 harvest was still far short of the impoverished country’s annual demand, estimated at six million tonnes, South Korea’s unification ministry said in a report. North Korea received 500,000 tonnes of rice from South Korea last year, together with humanitarian food aid from the World Food Programme (WFP) and other international agencies.

UN’s food aid to North Korea, however, ended on December 31 after Pyongyang said it no longer needed emergency shipments from international agencies. Instead, Pyongyang called for long-term development assistance to end its chronic food shortages. But some experts regard the shift to development-oriented assistance as a tactic to dodge the WFP’s request for transparency in food distribution.

Posted in Agriculture, Foreign direct investment, Public Distribiution System (PDS), UN World Food Program | Comments Closed

what is stopping DPRK reform?

Wednesday, January 18th, 2006

According to Han Young Jin, Reporter, Defector from Pyongyang
in the Daily NK:

Interview 1:
Kang Min Jun (pseudonym, age 65), a former executive of “Keumgang Jewelry Processing Co.”, a North Korea-China state cooperative factory asserted that Kim Jong Il’s visit to China is a mere gesture.

“I participated in the National Economic Sector Officials Seminar held in Pyongyang, and it was before the 2002 7.1 Economic Measure was announced. The central party officials who came to educate us said, “Reformation and liberalization does not fit into our revolution reality so do not expect it to happen.” Unless the North Korean regimes changes, reformation and liberalization will remain as a dream,” Kang said.

“After his 2001 visit to China, Kim Jong Il praised China’s changes calling it, “heaven and earth reversed” and called on three hundred professors and experts from Pyongyang People’s Economy University and Wonsan Economics University and made them visit China and study economics. They came back and during their discussion for reformation, their study was abandoned due to the four principles the Party insisted never to be violated.”

The four principles Kang presented are as the following.
1. Planned economy must never be abandoned.
2. Private ownership by the people cannot be permitted.
3. Liberalization of individual economy must not be allowed.
4. The Public Distribution System (food distribution system) must not be abandoned.

Interview 2:
“Whenever he is in trouble, Kim Jong Il makes an event. Right now, Kim Jong Il is in a deep trouble. Nuclear issue, counterfeit issue, Banco Delta Asia fund freeze, human rights issue, food issue and all the problems are now come together. The only way to solve these problems is siding with China. If North Korea is determined to reform, it could be have just made foreign investment attraction policy instead of making a trip all the way to China.”

Posted in Economic reform, Foreign direct investment, Private property, Public Distribiution System (PDS), UN World Food Program | Comments Closed

Let’s Reform and Liberalize, Please!

Friday, January 13th, 2006

Daily NK
Kim Young Jin
1/13/2006

The North Korean people feel they have reached a limit in enduring daily hardships.

The North Korean defectors recently found in China all say, “There is no other way to live unless (North Korea) opens up.” They are “tired of living.”

Last October, the North Korean state officially announced a restart of the food distribution system. It requested the halt of food aid from the WFP and demanded for a withdrawal of international rescue NGOs in Pyongyang.

However, the North Koreans who escaped to China testify that the empty promise for the good distribution system was never fulfilled.

Hur Chul Min who defected from Musan said, “They said they will distribute food starting in October, but all I got was 9 kg of corn in November.” Hur, who was a miner, must have received 900g of corn per day, which makes 27kg a month according to regulations. However, he received enough for only ten days.

The North Korean state last year put out a slogan saying, “Farming Prioritization” and the same slogan prevails this year. Hur says the only reason why the state returned the food distribution system is to earn loyalty from the people. The North Korean people already know all about it.

The following is the interview with Hur in full text.

– How is the situation of food distribution for Musan Mine this year?

On the October 10 holiday, they gave all the companies an order to make food cards. They said because farming this year was successful, they will give us food. They gave us food for ten days in November, but after that, they kept telling us to wait because there is not enough of food at the distribution centers. Those who started working again because the state promised food distribution, started to talk again, that they will only get “word distribution.”

– What do you mean by “Word distribution”?

It means they only give us words instead of food. People were deceived so many times that they no longer believe in the government promises.

– Did the government control of the people intensify?

The National Security Office orders the people to go to work. The people’s committee conducts family counts and reports the people who do not work. It is better to disappear from home. If you don’t come to work for two days, the mine patrol come to your home to take you. Even when you eat gruel, they demand you to work.

– How long did you work at Musan Mine?

I worked for 18 years. There was a lack in the workforce, so when I graduated middle school, I was “levied” to the mine by the state. None of my peers could go to the military. Starting in 1994, we did not receive any wages. Until 1997, we lived on grass. Starting in 1998, people started to sell things, and found ways to survive.

– Is it true that the farming last year was a success?

I do not know because I worked in a mine. After they ordered the “farming prioritization” policy, people were not allowed to stay jobless. Those who were selling things were forced to work. The road patrol caught those who hitchhiked to do their business. Those without travel permits were taken to the farms to pull out weeds.

– Did the situation improve after the 7.1 Economic Management Measure?

Immediately after the government implemented the 7.1 Economic Management Measure in 2002, the wages increased instantly. At the time my status was a level 4 technician, so I received 2,500 Won ($1.25) a month. Those who had level 6 status received 4,500 Won ($2.25). It made everyone happy at first. However, in less than two months, the price of goods increased more than 50 times.

Rice that used to cost 70 Won ($0.035) per kilo was now 1,200 Won ($0.6) per kilo. Meat enough for a meal cost more than 2,000 Won ($1). Wages were not given on time. They told us to consider the wages not given to have been saved, and gave us a ticket. They said, once the production takes place, they will give us the accumulated wages. But we never received them. Actually, after taking out support fees for the People’s Army and health insurance fees, there isn’t much left anyway. If you don’t have your own business, you will die.

– Have you ever received rice from South Korea?

I saw rice sacks that had “Republic of Korea” printed come into the Chongjin Port. However, for us, they are only cakes in pictures. They took all of them to the military in three days. On a day like that, you have so much rice in the market. The price of rice drops dramatically and those who can afford it buy a lot of rice to store. Their intention is to sell it when the price increases.

Now the people know why they are so poor. Whenever people gather, they openly say they want reformation and liberalization to take place at last.

Posted in 2002 Economic reforms, Agriculture, Civil society, DPRK Policies, Labor conditions/wages, Mining/Minerals, Public Distribiution System (PDS) | Comments Closed

Price information

Saturday, December 31st, 2005

Here is more commodity price information courtesy of Open Radio for North Korea:

Agricultural and houselhold commodities:
1) Rice
-Shin Eui Joo: The price rose from 850 won/kg (18th) to 900won/kg (31st)/ whole sale price: 620won/kg
-Bak Chun Gun: October: 1000won/kg, November 800won/kg (trading rice was banned in October with resumption of food distribution system, which caused the rising price.)
-Pyeongyang: Honammi 800won/kg Annammi 680won/kg

2) Corn
-Shin Eui Joo: 400won/kg (December)
-Bak Chun Gun: 350won/kg (November)

3) Pork
-Shin Eui Joo: 3,300won/kg (December)
-Bak Chun Gun: 3,500won/kg (November)

4) Beef: 7,000won/kg (Beef is seldom sold at markets, but was temporarily out in the black market for new year’s holiday season.)

5) Cooking Oil
-Shin Eui Joo: 2,300 won/kg (November)/Yellow Oil
-Bak Chun Gun: 2,500won/kg (November)/Yellow Oil

6) Seasoning
-Same in the region of Shin Eui Joo, Sah Ree Won, Bak Chun Gun: 2000won/bag(200g)

7) Underwear
-Bak Chun Gun: Brassiere: 4,000~6,000won, Children’s underwear: 5,000~6,000won
-Shin Eui Joo : Underclothes: 10,000~15,000won/piece, 20,000~30,000won/set

8) Socks
-Bak Chun Gun: 500~2,000won/pair (socks for winter)

9) Shoes
– Bak Chun Gun: high quality: 15,000won, poor quality: 3,000~4,000won/ Handmade: 2,500won

10) T.V
-Shin Eui Joo: the same as November

11) Price of house and rent
-Shin Eui Joo: One storied house (1 Room, 1 Kitchen): $600, Apartment (2 Rooms, 1 Kitchen): $1,500, Well-located apartment (3 Rooms, 1 Kitchen): $10,000~15,000(able to bargain), 100 Sq.m- apartment: $12,500 (90,000~100,000 Chinese Yuan)
-Sa Ree Won: 100 Sq.m apartment $8,750 (70,000 Chinese Yuan)
-Bak Chun Gun: One storied house (2 Rooms, 1 Kitchen): around $100, Three storied apartment: around $150~200

Footnotes:
1. A middleman receives 10% of the purchase as compensation. If one moves to a purchased house, one needs to receive a certificate which records that you are allowed to live in the house from a police officer in charge of registration in the neighborhood, usually the payment is one mal(10du/15kg) of rice.
2. Expense for making Kimchi(Bak Chun Gun): Chinese cabbage 200won/head, Red pepper powder 2500won/kg, garlic 3,000won/100heads, ginger 300won/kg, salt 350won/kg, sugar 1,000won/kg, salted anchovies 1,500won/kg, scallion is raised at home. Approximately 40,000~45,000won is expended for making 150 heads of Kimchi (usually consumed with rice, and is made with pepper, scallion and salted anchovies), for family of four.

Local Fees and Markets:
1) Electricity- Bak Chun Gun: 10won/lightbulb, 70won for black and white TV (per quarter)

2) Water- Bak Chun Gun: flat rate of 200won per house (per quarter)

3) Tax on land – Bak Chun Gun: 200won/2.5 Sq.m (per month)

4) Payment for spot at markets (Bak Chun Gun)

5) Exchange rate for Renminbi and US dollar
Shin Eui Joo: 2,900won/$ (November 1: 2,715)/ Rinminbi 360won/yuan (November 1:320)/ 3600won/Euro

Footnotes:
1. No payment at markets, but general tax is imposed. 20won/day for agricultural products, and tax for industrial products vary according to the goods.
2. Spots in Markets are rarely traded. For people starting their business at the market, relationship with the manager is important. When business with the manager was successful, managers make a spot for them by making others’ spots smaller.

Health Care and clothing:
1) Medicine for cold and antibiotics (Bak Chun Gun)
-Medicine for cold: Chung Yeong Poong 10won/pill (Adults consume 2 pills)/ Antibiotics: Penicillin 100won per ampoule/ Distilled water: 30won
-Antibiotics: when one receives an injection of 1 ampoule of Penicillin mixed with distilled water, the doctor is paid 100won aside from the price of medicine.

2) Bribe paid for medical examination and basic treatment (Bak Chun Gun)
-5000won for releasing a medical certificate, 350won for 1 injection (ex, glucose 500g), 100won for Penicillin

3) Stationaries (Bak Chun Gun)
-Won Joo Pil( Ball Pen): 250won, Notebook (paper made of straw): 5won/20pieces, Hand-made bag in North Korea, 2,000~3,000won, Uniforms used to be purchased at a flat rate set by the government with a coupon, but uniform is seldom sold at a shop these days. People usually purchase fabrics of appropriate color and size, and hand made the uniforms. (official state rate for elementary school uniform used to be 1,500won)

Monthly tuition and expense (Bak Chun Gun) :
-No monthly tuition is officially required, but some parents give some money to the teachers privately and school requires the students to prepare various materials.
– Club activity: the students need to pay 5,000won every month. (If one participates in cell activity, he/she is exempted from external labor or social labor ).
– Monthly payment is 10 bundles of firewood/Iron 3kg/Vinyl 1kg/Rubber 1kg
– -Students who fail to bring the materials are returned home without being allowed into the class.

Electricity:
-Shin Eui Joo: same as November
-Bak Chun Gun: Electricity was provided throughtout all day despite frequent blackouts occurred in the summer. / Since the beginning of the winter, electricity was provided only between 10:30pm~ 4am due to poor supply. (Mostly, candles are used at night. Candles are 40won each).
– Pyeongyang: electricity is provided for 24 hours, but blackouts occur often. Sometimes, 3~4 hours of blackout occur.

Water Supply:
-In case of Bak Chun Gun downtown, water pipes freeze in the winter. People dig wells for water.
-In case of Pyongyang, peripheral area is provided with water only once or twice a week. (The time when water is supplied is not announced beforehand. People have to watch the faucet on all the time).

Railway system and transportation fee:
-The fare for train from Bak Chun~ Won San with a transfer at Gaema Highland (Where Pyong Buk Sun and Gang Won Sun meets) is 35won, but most of the officials at the station hide the tickets and sell them for 1,000won.
-In order to buy train tickets, one needs to make a reservation a day ahead and stand in line to buy the ticket on the day. However, honored soldiers, soldiers on service and school teachers have priority, and it is hard for common people to buy tickets.
-What is interesting is that a lot of people take the train without paying the fare when moving from Bak Chun Gun to Ahn Joo Gun by Shin Eui Joo-Gae Sung train. It is because no body checks the tickets in this block.

Cars, buses and car fare between major cities:
-Pyongyang: same fare of 5won for subway, train without track
-Bus between Bak Chun ~ Shin Eui Joo runs once a day, and the fare is 2,500~2,800won. Additional 1,000won needs to be paid for one luggage.
-Shin Eui Joo~Nampo/ Roundtrip, once a day, 10,000won
-Shin Eui Joo~Won San/ Roundtrip, once a day/ 12,000won (10,000won possible after bargaining)
-Shin Eui Joo~Sa Ree Won/ Roundtrip, once a day/ 12,000won (10,000won possible after bargaining)
Footnote: No departure time is designated. The train leaves when the train is full.

Lodging:
-Shin Eui Joo: Same as before. Some of the private inns are as well organized as hotel. Chinese Koreans usually use them, and it costs 5,000won per night.
-Bak Chun Gun: State owned inns lacked heating system and was filled with lice, which is why they rarely exist now. Individuals run lodging facilities now (similar to lodging at a private residence)/ they come out to the station in order to invite guests, and it costs 100won per night.

Expense for obtaining travel document:
-Travel document: it costs 10,000won to travel from Bak Chun to Pyeongyang (ten box of cigarettes branded “Cat”)/ if using other ways, 6,000won~8,000won (Jagangdo 7,000won/Chungjin 8,000won/Pyeongsung 6,000won)/ 500won from Bakchun to Shin Eui Joo (Within a province)
-Travel document is not supposed to cost any money, but Municipal adminisrative committee, county administrative committee and officials in charge of the process publicly asks for money/ Only expense for travel documents to Pyongyang is flat rate of 10,000won, and expense for other provinces differ by person.
-Travel document to cross the river: Valid for one month, and cannot be extended/ costs around $100~200, which is not much more than passport or visa. (more money paid, the document is more quickly issued)/ Fee for travel document to cross the river is set for 20,000won by the government.
-When Chinese citizen visited North Korea with the document, extension is only available with a cost of $100 a day. (When one has good relationship with people of National Security Agency or any other relevant organizations, he/she can pay $50 a day) Because of the fee, they rarely extend the document.
-Passport and visa: DPRK passport is valid for 2 months and Chinese visa is valid for 90 days (In North Korea, expiration date on DPRK passport is more important than that on Chinese visa)/ Extension can be made twice, but extension is rarely requested by anyone (Specific reason for extension needs to be provided, which is a lot of work)/ Also, certificate of health is only valid for 4 months, which means that the passport cannot be extended twice/ fee for issuance of passport is set by the government for 40,000won (Some people say 150,000won). But actual expense is $100~500, and the expense varies depending on the region, person (interpersonal skills, ability, relationship with others) and the waiting time to get the passport (1 month~1year)/ Passport is issued in 1~2 months with a payment of $500 for Pyongyang, and 2~3months with a payment of $300 for other regions. / DPRK passport is valid for 2 months, but it is actually issued 1 month after the issue date.
-When visiting China to visit relatives, applicants for passport and travel document to cross the river are classified separately. In case of crossing Yalu River, if the applicant intends to stay in Dandong Province (Dandong, Bongsung, Donggang, Gwanjun) they need to apply for travel document, and if they intends to go farther than Dandong Province and for example, visit relatives in Shenyang and Fushun, they need to apply for passport.
-A case of procedure to obtain travel documents to cross the river and visa (with purpose of visiting the relatives)
-Application and procedure -> Mid March, Fill out the application (Hand $200 to officials at the office of foreign works: Confirmation of the relatives at the office of foreign works, military security office, and military police office, confirmation by a chair of women’s committee, Approval from Provincial Police Office and National Security Agency) -> Issuance of travel documents to cross the river in the beginning of November -> Two-day education in the beginning of November (First day: Exhibition on battle against espionage/ Second day: special education by the deputy of military security offic / Lastly, write out the oath) -> entered China on 23 November

Price of a business spot at the market (Bak Chun Gun)
-In case of the market at Bak Chung Eup, they don’t have the price of business spots.

Food Distribution System
-Bak Chun Gun: Distribution was carried out twice in the beginning and the end of October/ Distribution was halted in November/ The amount distributed was 15kg and did not meet the assigned amount of 57kg/ Official amount: 700g for workers, 300g for housewives, 500g for 15 year old child, 400g for 13 year old child/ rice/other crops ratio is 3:7
-Pyongyang: Food distribution was not halted except for the three months period of April~June 2005./ The amount distributed is 485g(official: 700g) for workers, 300g for housewives, 200g for students (official amount 300~500g)/ ratio of rice and other crops was 5:5. The ratio was sometimes 7:3 when things are better than the usual/ The price was 36won for Annammi, 54won for Honam rice (received from South Korea)/ Price at Yangjungso(Place where rice is gathered) was 20won less than market price/ Everyone is supposed to purchase rice from Yangjungso, but because of poor quality of rice, some well-off people buy rice at market.
-Shin Eui Joo and Sa Ree Won is similar to Bak Chun Gun.

Events, accidents, things to pay attention to

1) Penalty for listening to foreign broadcasting or watching illegal recordings
Case1> There was a public trial and punishment in July~August 2004 for 5 people for watching illegal recordings at a conference room of Gun Management Committee of Bak Chun Gun, located in downtown. / The penalty was expulsion of the family of the involved party to the mountains.
Case 2> A person who sold and showed VCD in Pyongyang in November 2005 was arrested. During investigation, the person committed suicide using a string on his bag while the investigator was absent. Reason for the suicide was not to harm the rest of his/her family/In Pyongyang as well, when one gets caught while watching illegal recordings, the penalty is usually an expulsion.

2) Wire telephone and charge for phone calls
– Installation of wire telephone: $200 at Sa Ree Won and Bak Chun Eup, $300 at Shin Eui Joo for obtaining a phone number as well/ customer needs to purchase the wire separately
-User of private wire telephone: There are relatively a lot of users of private wire telephone at Bak Chun Eup because there are a lot of Returnees from Japan and traders. Among 120 households, there are 11 households with telephone./ When somebody want to use wire telephone in a neighborhood, around 500won is paid.
-Common people use telegram for communication. 10won is charged for one page, and .5won is charged for each additional word.

3) Others
-Bak Chun Gun: There was a rumor that private cultivation would be allowed starting from this year, but instead of private cultivation, a group farming was adopted. Each group pay the assigned amount to the government, and the rest was left for the individuals to take care of. However, the groups needed to take care of fertilizer and pesticides which caused decline of the yield/ Phrase including “Communism” is gradually decreasing (example, “Communist Ethics” was replaced with “Socialist Ethics” in textbooks for elementary, middle and high school. “Rice is Communism” was replaced with “Rice is Socialism” as well/General atmosphere is that people do not believe what government and the party says.

-Pyongyang: Broadcasting criticized the resolution on situation of human rights in DPRK at the UN, but it is heard that the criticism has caused side effects/ Many of the people think that the resolution must have been adopted because there is a problem of human rights in DPRK/People in Pyongyang are known to be unhappy with Kim’s regime but have no way to change it. So they try to be patient and endure.

Posted in Agriculture, China, Communications, Emigration, Energy, General markets (FMR: Farmers Market), Hoteling, Price liberalization, Public Distribiution System (PDS), Transportation, UN World Food Program | Comments Closed

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