Archive for the ‘Central Committee’ Category

North Korea Resumes Military Rice Procurement Drive from January

Wednesday, March 23rd, 2011

Institute for Far Eastern Studies (IFES)
NK Brief No. 11-03-23
3/23/2011

A nationwide drive for military rice procurement was reported to have resumed from January this year in North Korea. The DPRK authorities halted the collection of rice for the military early last year with a sharp decrease in food production after suffering from repeated flood damages. However with their efforts to find aid from China and other foreign means to little avail, restarted the military procurement from early this year, collecting 2 to 3 USD worth of rice per person on a national level. North Koreans are reported to be strongly against the resurgence of the collection.

According to the Daily NK, sources from Pyongyang revealed that “Orders came from the Central Committee of the Party last December to begin a nationwide collection from January on the grounds of deficient military food supply. Although the order encouraged the drive to be voluntary and not obligatory, the department in charge of procurement is placing pressure on merchants and workers and officials of various corporations for donation.”

The Pyongyang source added, “In the case of Jung District Market (Jungguyeok Market) [satellite image here], the merchants were coerced into paying additional forty to fifty thousand KPW per person. The police are pressuring people that those who fail to pay will be forced to leave their lucrative spot in the market and replaced by those that paid.” Given the price of rice at the end of February was 1,900 KPW per/kg, each merchants was donating about 20 to 25kg of rice to the military.

On the other hand, workers in corporations were paying about 10 kg/person while the cadres were instructed to pay 30 kg/person. “The authorities did not hesitate to criticize and condemn those who dawdled on paying,” the source disclosed.

Another source from Sariwon in North Hwanghae Province also confirmed the account, “The Central Committee instructed the donations to be based on people’s consciences, but local authorities are demanding ‘each person must give specified kilos of rice,’ and ‘those that paid over a ton (1,000 kg), were given party membership right there and then with no inquiries about the source of the rice.”

Thus far, two people were reported to have given ten tons of rice and corn each, 50 people offered two tons of rice, and 200 people donated one ton of rice.

The source further added, the Party’s original target of 800 tons of rice for Sariwon was exceeded by a large margin, reaching over 2,400 tons.

However, disgruntled voices of North Koreans are also reported to be heard for the half-forced “military rice procurement drive,” raising questions about “where the food was going,” and “unhappy about taking rice for the military when there are no food rations for the people and factories no longer in operation.”

Previous stories on the DPRK’s food situation this year can be found here.

Share

Office 38 reportedly back in business–and other changes

Sunday, February 20th, 2011

UPDATE 4 (2/20/2011): Kim Tong-un (김동은) named Kim Jong-il’s fund manager.  According to Yonhap:

A senior official of North Korea’s ruling party has been named to lead a special party bureau, code-named Office 38, that oversees coffers and raises slush funds for its leader Kim Jong-il and the ruling elites, a source on North Korea said Sunday.

Kim Tong-un, formerly head of Office 39 in the Workers’ Party of Korea, assumed the post in May last year, when North Korea revived Office 38, which was merged with Office 39 in 2009, the source said on condition of anonymity. Office 39 is believed to be another organ that governs a wide network of business operations both legal and illegal.

Both Offices 38 and 39 belong to the Secretariat of the Workers’ Party, which Kim Jong-il chairs, according to a diagram of the North’s power structure released by the Unification Ministry, which handles inter-Korean affairs. Last year, the ministry had only included Office 39 in a similar diagram.

In a meeting with reporters last week, a ministry official said Office 38 has been spun off from Office 39 and is now running on its own again. The official, who would speak only on the condition of anonymity citing the sensitive nature of his comments, described “a stream of information” that has come through since mid-2010.

Office 38 mainly oversees transactions involving foreign currency, hotels and trade, the official said, while Office 39, headed by Jon Il-chun, drives revenue by dealing in narcotics, arms, natural resources and others.

The North’s revival of Office 38 is interpreted as an effort to cover the increasing cost of leader Kim Jong-il’s ceding of power to his youngest son, Jong-un.

The story was also reported in Yonhap.

UPDATE 3: Here are links to the Ministry of Unification‘s English language organization charts of the North Korean leadership in which some of the changes mentioned below are listed (though not all): Workers’ Party, State Organs, Parties and Organizations

UPDATE (2/15/2011): According to the Daily NK:

The number of Special Departments under the Secretariat of the Chosun Workers’ Party has been increased from 18 to 20, a move that includes the revival of the No. 38 Department, which previously served as Kim Jong Il’s private bank vault, and the foundation of a film department.

The Ministry of Unification revealed the news yesterday in its 2011 North Korean Power Structure and Index of Figures, Agencies and Organizations. It incorporates North Korean changes from December, 2009 up to the present day, completed after consultation with relevant agencies and experts.

The revival of the No. 38 Department and founding of a film department

The report states, “The No. 38 Department, which was merged with the No. 39 Department in 2009, was spun off again last year. Kang Neung Su, who was appointed Deputy Prime Minister in June of 2010, was introduced as head of the film department at the same time. The exact foundation date of the film department is unknown; however, it appears to be newly established.”

No. 38 and No. 39 Departments are directly controlled by Kim Jong Il and serve as a private vault for his ruling funds. The No. 38 Department manages hotels, foreign currency stores and restaurants etc, while illegal weapons trading through foreign trade companies, the smuggling of gold, illegal trade in drugs and the distribution of counterfeit dollars, so-called supernotes, are handled by the No. 39 Department.

“They combined two offices which had different functions, and it appears that this did not result in the intended efficiency,” a knowledgeable source commented.

Meanwhile, on the establishment of a film department, the source added, “North Korea’s cultural art is a political means by which to carry out Party policy and a policy tool to implant policy in the North Korean citizens.”

Among the reshuffled special departments, the existing ‘Munitions Industry Department’ has been renamed the ‘Machine Industry Department’, and the ‘Administration and Capital Construction Department’ has been scaled back to simply ‘Administration Department’.

Elsewhere, the existing National Resources Development and Guidance Department under the Ministry of Extractive Industries has been promoted to National Resources Development Council and, as reported, the Joint Investment Guidance Department rose to become the Joint Investment Committee, while the National Price Establishment Department became the National Price Establishment Committee. Again, as reported, the ‘People’s Safety Agency’ under the Cabinet became the People’s Safety Ministry under the National Defense Commission, while the Capital Construction Department was downsized to become the General Bureau of Capital Construction.

The Central Court and Central Prosecutors Office were also renamed the Supreme Court and Supreme Prosecutors Office respectively.

The Ministry of Unification report also notes that North Korea added Nampo City to its list of eleven cities and provinces, increasing the total number to twelve.

The newly designated Nampo City includes five former parts of South Pyongan Province; Gangseo, Daean, Oncheon, Yonggang, and Chollima districts. Previously, Nampo was under the direct control of the central government as part of South Pyongan Province proper.

At the same time, North Korea also transferred the existing Kangnam-gun, Joonghwa-gun, Sangwon-gun, and Seungho-district, all formerly southern sections of Pyongyang City, to North Hwanghae Province.

Military Commission placed under the Central Committee of the Party

The relationship of the Central Committee and Central Military Commission, which was formerly said to be in parallel, has been changed, reflecting the idea that the Military Commission is now under the Central Committee of the Party.

The Ministry of Unification commented, “By revising the Party regulations, the Central Military Commission and Central Committee were marked as parallel in 2009 and 2010. However, after confirming the revised Party regulations at the Chosun Workers’ Party Delegates’ Conference on September 28th last year, this relationship was adjusted, and an election is now held for the Central Military Commission via a plenary session of the Central Committee.”

Also, the ‘Bureau of General Staff’ under the National Defense Commission was judged to be below the Ministry of the People’s Armed Forces, but is now shown to be in a parallel relationship with the Ministry of the People’s Armed Force and ‘General Political Department’.

ORIGINAL POST (2/14/2011): According to Yonhap:

North Korea has revived a special party bureau, codenamed Office 38, that oversees coffers and raises slush funds for its leader Kim Jong-il and the ruling elites, South Korea said Monday in its annual assessment of the power structure in the communist country.

In 2009, the bureau had been merged with Office 39, another organ that governs a wide network of business operations both legal and illegal, according to the Unification Ministry in Seoul.

In a meeting with reporters, however, a ministry official said Office 38 has been spun off from Office 39 and is now running on its own again. The official, who would speak only on the condition of anonymity citing the intelligence nature of his comments, cited “a stream of information” that has come through since mid-2010.

The official would not elaborate on how the information has been obtained, only saying the ministry works closely with “related government bodies” to outline the North’s power structure.

Office 38, whose chief remains unknown, mainly oversees transactions involving foreign currency, hotels and trade, the official said, while Office 39, headed by Jon Il-chun, drives revenue by dealing in narcotics, arms, natural resources and others.

A source privy to North Korea matters said the spin-off suggests that North Korea has been experiencing difficulties in earning foreign currency since merging the two offices.

“Efficiency was probably compromised after the two, which have different functions, were combined,” the source said, declining to be identified citing the speculative nature of the topic. “More importantly, it seems related to the current state of foreign currency stocks. The North is apparently trying to address those difficulties.”

In August last year, the United States blacklisted Office 39 as one of several North Korean entities to newly come under sanctions for involvement in illegal deeds such as currency counterfeiting.

North Korea is also believed to have been hit hard financially after South Korea imposed a series of economic penalties last year on Pyongyang when the sinking of a warship was blamed on it.

Both Offices 38 and 39 belong to the Secretariat of the Workers’ Party, which Kim Jong-il chairs, according to a diagram of the North’s power structure released by the Unification Ministry. Last year, the ministry had only included Office 39 in a similar diagram.

Both offices have often been referred to as Kim Jong-il’s “personal safes” for their role in raising and managing secret funds and procuring luxury goods for the aging leader.

Read the full story here:
North Korea Splits No. 38 and 39 Departments Up Again
Daily NK
Kim So Yeol
2/15/2011

N. Korea revives ‘Office 38’ managing Kim Jong-il’s funds: ministry
Yonhap
Sam Kim
2/14/2011

Share

DPRK, NGO to film Paek Son Haeng film

Monday, January 17th, 2011

Pictured above: Paek Son Haeng Memorial Hall, Pyongyang (Google Earth)

According to the Daily NK:

North Korea has apparently agreed to accept foreign funding to produce a movie which shows Christians in a positive light. It will be the first movie made in North Korea to show the life story of a Christian.

An activist working in New Zealand for “Team and Team International”, a South Korean NGO working on international disaster relief, reported today, “A North Korean movie import-export company (Chosun Movie Company) has decided to produce a movie, ‘Paek Sun Haeng’, with the support of an organization from New Zealand,” and added, “They are at the last stage of working on the scenario and plan to start filming this coming September.” A budget production, it will cost a reported $1.5 million.

The activist said that the two sides have agreed to show the movie in movie theaters across the country and on Chosun Central TV. The purpose behind the investment is apparently to depict the positive side of Christianity and Christians to the North Korean people.

He explained, “Based on the idea that the figure, Baek Sun Haeng, has been defined as a good capitalist in North Korea, the organization has been negotiating production of a movie about her with North Korea since 2008.” Additionally, he said “They will describe fully the image of Baek as a philanthropist as well as a Christian in the movie.”

The scenario was reportedly written by the head of Chosun Movie Company, Choi Hyuk Woo, but there has been conflict over the degree of Christian content.

The source explained, “Problems when the North Koreans tried to change one line or scene have not been small.” However, “They were able to persuade the North Korean staff by sticking stubbornly to the fact that it would have been impossible to invest in the movie without Christian content.”

North Korea’s bad situation vis a vis foreign currency may have influenced the North’s decision-making, the source agreed, saying, “I am aware that North Korea’s internal capital situation is rather difficult. That economic difficulty may have influenced this contract somewhat.”

Chosun Movie Company oversees the export and import of movies under the Culture and Art Department of the Propaganda and Agitation Department, which is within the Central Committee of the Party.

The activist emphasized, “Aid activities for North Korea should give dreams and hope for new things to the North Korean people through diverse cultural approaches beyond food or essential aid.”

The movie’s main character, Baek Sun Haeng (1848-1933) is a well-known philanthropist in North Korea who has been mentioned in North Korean textbooks, in Kim Il Sung’s memoirs and elsewhere.

After her husband died when she was 16 years old, she is said to have accumulated wealth relentlessly. After that, she built both “Baek Sun Bridge” across the Daedong River and a three-story public meeting hall in Pyongyang. She also donated real-estate for Pyongyang Gwangsun School and Changdeok School.

Baek, as the deaconess of a church, also contributed to the education of Korean Christians by donating capital and land for Pyongyang Presbyterian Church School, which was built by Rev. Samuel Austin Moffett, the then-reverend at the First Church of Pyongyang, and Soongsil School, the forerunner to Soongsil University in Seoul, which was established by Dr. W. M. Baird, an American missionary, in Pyongyang on October 10th, 1887.

Additionally, she dedicated all of her property to an organization dedicated to the relief of poverty in 1925, so the Japanese government general tried to present her with a commendation, but she refused it. Therefore, she has been praised highly as a “people’s capitalist” in North Korea.

In 2006, the North Korea media reported that an existing monument to Baek had been restored and moved into “Baek Sun Haeng Memorial Hall” in Pyongyang on the instructions of Kim Jong Il.

Read the full story here:
Christian Movie Being Shot inside North Korea
Daily NK
1/17/2011

Share

Worker’s Party regulations revised

Thursday, January 6th, 2011

According ot Yonhap:

In an apparent bid to facilitate its hereditary power succession, North Korea has rewritten major regulations governing its ruling party, allowing its leader-in-waiting to take full control of the state with greater ease, a government source said Thursday.

The revisions were approved at the landmark convention of the top Workers’ Party delegates in September, during which Kim Jong-un, the youngest son of leader Kim Jong-il, rose as a vice chairman of the Central Military Commission, the source said.

“The revisions paved the way for the Kims to monopolize every part of the North Korean system while making it official that the country is a dynasty,” the source said, asking not to be named because of the intelligence nature of the documents he cited.

North Korea removed a clause that made it mandatory for the party to hold a general convention every five years, the source said. Instead, the party can now elect senior members and revise its regulations just by holding a top delegates’ meeting.

“Another measure that makes it easy for Kim Jong-un to take power is to automatically appoint the party secretary as head of the Central Military Commission,” the source said, adding that the move suggests Kim Jong-un, a four-star general, may be on track to succeeding his father as party secretary.

“This allows Kim Jong-un to control both the party and the military just by rising to the top of the party, the source said.

Kim is believed to be no older than 28. His birthday is this Saturday, Jan. 8.

The Central Military Commission within the party has also been given more power, the source said, as it now “governs all defense and military programs conducted between each party convention.”

The revision signals that the commission may grow more powerful than the National Defense Commission, the highest seat of power headed by Kim Jong-il but not yet joined by Kim Jong-un, he said.

Read the full story here:
N. Korea rewrites party regulations to boost hereditary power succession: source
Yonhap
Sam Kim
1/6/2011

Share

Pyongyang 1946 and today

Sunday, January 2nd, 2011

I recently came across this map of Pyongyang printed in 1946:

Click map to see full size version

According to the map, it is “For use by War and Navy Department Agencies only.  Not for sale or distribution”.

I thought it would be fun to add the map to Google Earth so I could compare the pre-Korean War city infrastructure with what we see today.  Some interesting information emerges:

1. The Omura Silk Mill is now the Kim Jong Suk Pyongyang Silk Mill. Satellite image here.

2. The Kanegajuchi Spinning Mill is now the Pyongyang Textile Mill.  Satellite image here.

3. Fuji Iron Works is now the Pyongyang Cornstarch Factory. Satellite image here.

4. What was the Pyongyang Airport is now Taedonggang-district in East Pyongyang.

5. Much of what we call the  “Forbidden City” (Korean Workers Party Offices) were military barracks.

6. The former Pyongyang Medical College is now … the Kim Il-sung University College of Medicine. Satellite image here.

7. The Supreme People’s Assembly sits on the grounds of the former Pyongyang Women’s Prison.

8. The Namsan School was torn down and is now either the Organization and Guidance Department (according to one defector) or the Democratic Women’s Union Hall. Satellite image below:

I also might have discovered several Japanese colonial-era prisons that may very well still be prisons and/or factories. According to the map, this was the shape of the Pyonysang (Heijo) Prison:

There are a handful of buildings in the DPRK which still retain this distinctive shape (or the obvious remnants of this shape)—as well as walls and guard towers.  They are in Phyongsong, Hamhung, and Sariwon:

I have made the 1946 map available as a Google Earth download. You can obtain the KMZ file by clicking here. Please let me know if you make any interesting discoveries of your own.

By coincidence, Andrei Lankov wrote an article about the history of Pyongyang last week in the Korea Times (as I was comparing the maps). According to the article:

Pyongyang enjoyed boom in colonial era
Korea Times
Andrei Lankov
12/30/2010

This city is long gone. No, it is still on the maps, and all our readers know its name ― Pyongyang, the capital of the Democratic People’s Republic of Korea.

But the Pyongyang of the Kims’ dynasty does not have much to do with the old city, wiped out in the social turmoil of the late 1940s and inferno of the American bombing of the early 1950s.

People who nowadays inhabit the North Korean capital, are overwhelmingly newcomers, and not much physical evidence is left from the city past.

It was once a capital of Goguryeo, one of the three ancient kingdoms which fought over the domination of the Korean Peninsula in the first centuries of the Christian era. Pyongyang remained important for centuries. During the Joseon Kingdom (1392-1910) it was the second or third largest city in the entire country.

The city remained surrounded by the stone walls which by the 1890s had been in a state of disrepair for a long time (they had lost any military significance since a much earlier date, one has to admit). The majestic Taedong Gate, facing the river, was seen as a masterpiece of traditional architecture.

Throughout the colonial period, the city’s population increased from 40,000 around 1910 to 285,000 in 1940. It was roughly one third of the then size of Seoul, but this still made Pyongyang one of the largest cities in the nation.

As was the case with nearly all major cities of both the to-be North and to-be South, the railway was instrumental in Pyongyang’s growth.

Pyongyang was located straight on the Busan-Seoul-Sinuiju line, built in the early 1900s. This line became a backbone of the country’s transportation network, and old cities which were bypassed by this railway, eventually went into decline. Pyongyang was lucky to avoid such a fate.

Nowadays Pyongyang Station is located close to the center of the North Korean capital. However, in the early 1900s it was located some distance away from the old walled city, so the space between the station and walls became a new part of Pyongyang, with rectangular grid of streets and the numerous houses of the Japanese settlers who comprised about 13 percent of the city population in 1945.

The army barracks and a large military area appeared near the station as well. Meanwhile, the Koreans were left within the space once occupied by the old walled city.

The fast growth of the city made public transportation necessary, and indeed in May 1923 a tram service ― or “streetcars” as Americans would say ― was introduced, to remain in operation until the autumn of 1950 (the present-day tram system was built anew in the early 1990s, and has no continuity with the old trams of the colonial era).

Since time immemorial and until the late 1920s, Pyongyang was located on the eastern (left) bank of the Taedong River, but from the late 1920s the city crossed to the opposite bank as well.

In 1921, an airfield was built there, to be used by both the Japanese air forces and civilian planes which landed there for re-fueling on their way from Japan to China and back. This airfield, located roughly where the “embassies quarter” is now, remained in operation until the late 1950s, if not longer.

Pyongyang underwent a major industrial boom in the colonial era. Huge coal deposits were discovered around the city, so by the 1920s the mines of the Pyongyang area provided about a half of all coal produced in Korea. This economy of the era was largely an economy of coal and steel, so these mines attracted heavy industry.

The Mitsubishi Group built a large steel mill in Nampo, not far away from Pyongyang. Another major consumer of high-quality coal was the Imperial Navy ― and the ship engines of the era were very demanding when it came to the coal quality.

Pyongyang itself also had a number of smaller businesses, including textile and footwear factories. Their presence also meant a presence of powerful labor unions, so Pyongyang was a place of some of the largest strikes of the period.

For the Koreans of the colonial time, Pyongyang was a city of Christianity. Indeed, Protestants constituted up to 25-30 percent of its population.

In a time when nationwide the share of Christians did not exceed 1 percent, this was a truly remarkable figure. This implied a large missionary presence but also existence of first-class educational facilities: Protestant schools played a major role in introducing modern science and technology to Korea.

The result was strength of the nationalist movement then closely associated with Christianity. Contrary to what one might expect, prior to 1945 Pyongyang was a stronghold of the nationalist Right while the Communists position appeared much stronger in Seoul.

The city also boasted a number of museums, including a large archeological museum with the findings made during the excavations of the 1920s.

Not much is left of that city. Most of Pyongyang’s population left in 1945-53, fleeing either religious persecution by the new regime or U.S. bombing raids. These raids virtually wiped the city off the face of earth, so in the mid-50s Pyongyang was built anew without any references to the then rejected past.

A few historical monuments of ancient times have been restored (or rather built), but almost nothing has survived from the colonial era Pyongyang. Only the old Taedonggyo Bridge still crosses the river, handling a large part of very heavy Pyongyang traffic.

Share

Daedong Credit Bank Press Release

Monday, December 20th, 2010

On November 18, 2010, the US Treasury Department issued the following press release:

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

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

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

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

You can learn more about the Treasury’s press release here.

Here is the US Treasury Department’s new North Korea resource page.

In response, the Daedong Credit Bank issued the following press release:

FOR IMMEDIATE RELEASE:

US Treasury Press Release 18th November 2010

London UK/Pyongyang DPRK, December 20th 2010

Daedong Credit Bank (DCB) has noted the press release of 18th November 2010 by the US Treasury and makes the following comments:

1.    Korea Daesong Bank (KDB) is a 30% shareholder in DCB.  DCB is not, and never has been, aware of any activity by KDB which is in breach of any of its obligations, domestic or international.  In particular, DCB is not aware of KDB having acted in breach of any sanctions.  DCB is not aware of any cause of concern about the conduct of KDB.

2.    KDB has no executive control of DCB.

3.    DCB is majority owned by overseas investors and is foreign-managed.

4.    DCB does not act and has never acted in breach of any of its domestic or international obligations.  DCB acts in a manner consistent with domestic and international law.

5.    DCB is apolitical and promotes foreign investment in the DPRK as a positive development.

The Daedong Credit Bank looks forward to playing a significant part in facilitating normal commercial relationships between the DPRK and the international business community.

About Daedong Credit Bank

Daedong Credit Bank is a joint venture retail bank based in Pyongyang. It was established in 1995 as “Peregrine Daesong Development Bank”. The Bank underwent a change of name and foreign ownership in 2000.

Daedong Credit Bank is the first, by fifteen years, foreign majority held bank in the DPRK. DCB considers itself a flagship successful joint venture in the DPRK, and a key part of the infrastructure needed to assist the foreign-invested ventures, which drive the country’s economic reforms.

The bank’s principal function is to offer normal “high street” banking facilities in hard currency to; foreign companies, joint ventures, international relief agencies and individuals doing legitimate business in the DPRK.

Daedong Credit Bank was the first bank in the DPRK to introduce, and vigorously implement, a comprehensive set of anti-money laundering procedures. DCB’s anti-money laundering procedure manual was introduced seven years ago, and subsequently updated based on anti-money laundering guidelines provided by the Asian Development Bank. The manual has been sent to, and accepted by, DCB’s international correspondent banks.

Daedong Credit Bank also maintains strict procedures for the detection and rejection of counterfeit bank notes; it uses regularly updated note checking machines, and has personnel with over 10 years’ of experience of handling notes. DCB have encountered and impounded the so-called ‘superdollar’ notes, proving that these notes (despite media misconceptions) are not undetectable.

The wealth of experience garnered over Daedong Credit Bank’s 15 years of successful operation is unrivaled.

Daedong Credit Bank has a significantly strong position in relation to the future economic development of the DPRK and, being the oldest established foreign invested commercial bank in the DPRK, it is the intention of the bank to capitalise on these advantages.

CONTACT INFORMATION:

Daedong Credit Bank office address in Pyongyang is:

Daedong Credit Bank
401, Potonggang Hotel
Ansan-dong
Pyongchon District
Pyongyang
Democratic People’s Republic of Korea

Phone Switchboard  +850 2 381 2228/9    ext 401
Direct line     +850 2 381 4866
Mobile          +850 193 801 8400 *
*Note, the mobile number may not be obtainable from certain countries (eg UK and Hong Kong).
Corporate Website www.daedongcreditbank.com

FOR IMMEDIATE RELEASE:

US Treasury Press Release 18th November 2010

London UK/Pyongyang DPRK, December 20th 2010

Daedong Credit Bank (DCB) has noted the press release of 18th November 2010 by the US Treasury and makes the following comments:

1. Korea Daesong Bank (KDB) is a 30% shareholder in DCB. DCB is not, and never has been, aware of any activity by KDB which is in breach of any of its obligations, domestic or international. In particular, DCB is not aware of KDB having acted in breach of any sanctions. DCB is not aware of any cause of concern about the conduct of KDB.

2. KDB has no executive control of DCB.

3. DCB is majority owned by overseas investors and is foreign-managed.

4. DCB does not act and has never acted in breach of any of its domestic or international obligations. DCB acts in a manner consistent with domestic and international law.

5. DCB is apolitical and promotes foreign investment in the DPRK as a positive development.

The Daedong Credit Bank looks forward to playing a significant part in facilitating normal commercial relationships between the DPRK and the international business community.

About Daedong Credit Bank

Daedong Credit Bank is a joint venture retail bank based in Pyongyang. It was established in 1995 as “Peregrine Daesong Development Bank”. The Bank underwent a change of name and foreign ownership in 2000.

Daedong Credit Bank is the first, by fifteen years, foreign majority held bank in the DPRK. DCB considers itself a flagship successful joint venture in the DPRK, and a key part of the infrastructure needed to assist the foreign-invested ventures, which drive the country’s economic reforms.

The bank’s principal function is to offer normal “high street” banking facilities in hard currency to; foreign companies, joint ventures, international relief agencies and individuals doing legitimate business in the DPRK.

Daedong Credit Bank was the first bank in the DPRK to introduce, and vigorously implement, a comprehensive set of anti-money laundering procedures. DCB’s anti-money laundering procedure manual was introduced seven years ago, and subsequently updated based on anti-money laundering guidelines provided by the Asian Development Bank. The manual has been sent to, and accepted by, DCB’s international correspondent banks.

Daedong Credit Bank also maintains strict procedures for the detection and rejection of counterfeit bank notes; it uses regularly updated note checking machines, and has personnel with over 10 years’ of experience of handling notes. DCB have encountered and impounded the so-called ‘superdollar’ notes, proving that these notes (despite media misconceptions) are not undetectable.

The wealth of experience garnered over Daedong Credit Bank’s 15 years of successful operation is unrivalled.

Daedong Credit Bank has a significantly strong position in relation to the future economic development of the DPRK and, being the oldest established foreign invested commercial bank in the DPRK, it is the intention of the bank to capitalise on these advantages.

CONTACT INFORMATION:

Daedong Credit Bank office address in Pyongyang is:

Daedong Credit Bank
401, Potonggang Hotel
Ansan-dong
Pyongchon District
Pyongyang
Democratic People’s Republic of Korea

Phone

Switchboard +850 2 381 2228/9 ext 401
Direct line
+850 2 381 4866
Mobile
+850 193 801 8400 *
*Note, the mobile number may not be obtainable from certain countries (eg UK and Hong Kong).

Corporate Website www.daedongcreditbank.com

#004

Share

Jon Il-chun re-surfaces

Wednesday, December 15th, 2010

According to the Choson Ilbo:

South Korean intelligence officials breathed a sigh of relief on Sunday. They had finally located Jon Il-chun, the head of a special department in North Korea’s Workers Party that manages Kim Jong-il’s slush fund. Jon, who had eluded intelligence officials for the past six months, was finally spotted on a North Korean TV broadcast featuring one of leader Kim Jong-il’s so-called on-the-spot guidance tours in Pyongyang.

The 69-year-old Jon went to high school with Kim (68) and was appointed head of the department, known as Room 39, early this year. It manages 17 overseas branch offices and around 100 trading companies and even owns a gold mine and a bank. The US$200-300 million those companies make each year is funneled into Kim’s secret bank accounts around the world.

Room 39 is targeted each time the U.S. and other foreign governments apply financial sanctions against North Korea. Kim replaced its head early this year because the former director, Kim Tong-un, was put on an EU list of sanctioned individuals late last year, making it impossible for him to manage the leader’s secret overseas bank accounts.

Due to the importance of the department and the clandestine nature of its business, the director of Room 39 rarely appears in public, but he sometimes accompanies Kim Jong-il on guidance tours when they involve organizations linked to Kim’s slush funds, an intelligence official said.

In the TV clip on Sunday, Jon is seen with Kim on an tour to Hyangmanlu, a popular restaurant, and Sonhung food manufacturing plant. A North Korean defector who used to live in Pyongyang, said the restaurant was built in the 1990s by a wealthy ethnic Korean from Japan and is located in a busy part of Pyongyang. “It was always packed with wealthy party officials,” the defector said, adding the party manages the restaurant so the entire proceeds probably go into Kim Jong-il’s coffers. He added there is a strong possibility that the food factory also belongs to the party.

The last time Jon appeared on North Korean TV was on June 20, at the opening of a mine in Yanggang Province. A North Korean source said the Huchang Mine is a famous copper mine that had been closed for some time but must have reopened. “Judging by the fact that Jon took part in the opening ceremony, it appears to be one of many mines run by Room 39.”

Jon was also spotted at Kim’s inspections of two fisheries companies last year and one this year. A Unification Ministry official said, “North Korean exports of fisheries products are handled by the party or the military and they’re sources of revenue for Kim Jong-il’s slush fund.” Fisheries products accounted for the second largest North Korea’s W1.64 trillion exports to South Korea last year, amounting to W173 billion or 16.3 percent. Textiles totaled W477 billion or 44.8 percent.

“This is one of the reasons why we blocked imports of North Korean fisheries products” following the North’s sinking of the Navy corvette Cheonan, the official said.

Additional Information:

1. Michael Madden has written a biography of Jon Il-chun here.

2. Here is a satellite image of the Hyangmanru Restaurant.  Here is a satellite image of the Sohung Foodstuff Factory (right next door).

Read the full story here:
Elusive Manager of Kim Jong-il’s Slush Funds Pops Up Again
Choson Ilbo
12/15/2010

Share

US sanctions two more DPRK organizations

Thursday, November 18th, 2010

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

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

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

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

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

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

ORIGINAL POST: According to Reuters:

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Share

RoK flood aid to the DPRK (2010)

Friday, October 29th, 2010

UPDATE 18 (11/08/2010): South Korean aid will finally be delivered to the DPRK on 11/09.  Here is more from the PRC’s People’s Daily:

Some of South Korea’s first government-financed rice aid in almost three years will be delivered to the flood-hit Democratic People’s Republic of Korea ( DPRK) starting Tuesday, the unification ministry said Monday.

Some of the 5,000 tons of rice currently in the Chinese city of Dandong will be sent to the northwestern DPRK city of Sinuiju, a city reeling from heavy rains in August, and the delivery will be completed by the end of next week, according to the ministry.

Three million cups of instant noodles, also part of the flood aid, have already been sent to Sinuiju, while some of the pledged one million tons of cement will reach the city later in the day, the ministry said.

As he took office in 2008, South Korean President Lee Myung-bak cut a free flow of rice aid to Pyongyang, which once amounted to 300,000 to 400,000 tons each year. A hard-liner toward Pyongyang, he also ended a decade of rapprochement under his liberal predecessors by linking aid to dismantlement of the DPRK’s nuclear programs.

UPDATE 17 (1o/29/2010): Here and here are photos of the aid arriving in China. 

UPDATE 16: According to the Korea Times, the shipment was delayed due to weather.

UPDATE 15: First aid shipment to go today (10/25).  According to Yonhap:

A shipment of rice was to depart a South Korean port en route to North Korea Monday, which will mark Seoul’s first government-financed rice aid to the communist nation in more than two and a half years.

A cargo ship carrying 5,000 tons of rice was scheduled to depart the port city of Gunsan for the northeastern Chinese city of Dandong on the border with North Korea. Another ship was also set to head from the port of Incheon to the Chinese city, carrying 3 million packs of instant noodles.

The Red Cross aid, which is aimed at helping the North cope with the aftermath of floods, marks South Korea’s first government-funded provision of rice to the North since President Lee Myung-bak took office in early 2008 on a pledge to link aid to progress in efforts to end Pyongyang’s nuclear programs.

Seoul also plans to send a shipment of 10,000 tons of cement to the North later this week.

A total of 13.9 billion won (US$12.3 million) came from the government coffers to finance the flood aid.

Also Monday, three Red Cross officials prepared to fly to the Chinese city to receive the rice and instant noodles there and transport the relief supplies by truck to the flood-hit North Korean border city of Sinuiju, according to officials from the Red Cross and the Unification Ministry.

The cargo ships are expected to arrive in Dandong around Wednesday.

Rice will be delivered in five-kilogram packages, and each package is marked with “Donation from the Republic of Korea,” South Korea’s official name.

In August, South Korea first offered to provide relief aid to the North after devastating floods hit the communist nation. North Korea later asked for rice, heavy construction equipment and materials.

UPDATE 14: S. Korea to send rice aid to N. Korea next month.  Accrording to Yonhap:

South Korea’s Red Cross will begin the shipment of 5,000 tons of rice and other aid materials next month to North Korea, which has been battered by summer floods, officials here said Sunday.

It would mark South Korea’s first government-funded provision of rice to the hunger-stricken communist neighbor since the conservative president, Lee Myung-bak, took office in early 2008 on a pledge to link inter-Korean ties to Pyongyang’s denuclearization.

The South’s government plans to convene a committee on inter-Korean exchanges on Tuesday to approve the use of taxpayers’ money earmarked for projects to improve relations with the North, the officials said.

“(The government) will report to the National Assembly on Sept. 28 and the committee will approve the aid worth 8 billion won (US$6.9 million) from the South-North Cooperation Fund (on the same day),” a Unification Ministry official said.

The rice shipment will depart from the port of Incheon, west of Seoul, on Oct. 25 and it will be delivered to the North Korean city of Sinuiju bordering China via Dandong, an adjacent Chinese town, he added.

Other aid items to be sent to the North in stages include 10,000 tons of cement, three million packs of instant noodles and some medical goods.

South Korea has ruled out the shipment of construction equipment, which the North requested, taking into account the possibility of the equipment being used for military purposes.

Seoul’s rice aid, although officials here stressed it is purely a humanitarian move, has been seen as a possible sign of a thaw in chilled inter-Korean relations. Military tensions have risen sharply since the sinking of a South Korean warship in March, which the South attributed to a North Korean torpedo attack.

South Korea suspended an annual shipment of 300,000-400,000 tons of rice to the North in 2008, citing little progress in efforts to end the North’s nuclear program.

UPDATE 13: Incheon Gov’t, Civic Group Sign MOU on NK Aid.  According to KBS:

The Incheon city government has signed a memorandum of understanding with a civic group to send 700 tons of corn to North Korean flood victims in Sinuiju.

The aid is worth 300 million won.

The city government and the Korean Sharing Movement obtained permission to provide the food aid from the Unification Ministry on September 14th.

The first shipment of corn will arrive late this month via an overland route linking the city of Dandong in China to the North Korean city of Sinuiju.

The remaining food aid will be delivered to North Korea by year’s end.

Previously, the Incheon city government announced a plan to send six shipments of milk and infant formula by December. The aid is valued at 100 million won.

The first shipment left Incheon port for North Korea on Saturday.

UPDATE 12: First shipment of aid has headed north.  According to the New York Times:

The nine trucks in the convoy carried 203 tons of rice that civic groups and opposition political parties in South Korea had donated for the victims of recent flooding in North Korea. The flooding is expected to worsen food shortages in the North, which even in a year of good harvests, cannot produce enough to feed its estimated population of 23 million people properly.

The shipment, coming just before the Korean harvest festival of Chuseok next week, also seemed to symbolize a newfound South Korean good will toward the North. It followed 530 tons of flour that a South Korean provincial government and civic groups sent on Thursday.

After President Lee Myung-bak came to power in Seoul in early 2008, South Korea had been reluctant to provide rice or any other major aid shipments to the North until its government in Pyongyang took significant steps to give up its nuclear weapons. The sinking of the warship, the Cheonan, further soured relations.

But in the past week, the South approved the civic groups’ donations, as well as a separate Red Cross plan to send 5,000 tons of rice. The approval followed conciliatory gestures by North Korea, including a plan to resume a Red Cross program of arranging temporary unions of families split by the 1950-53 Korean War.

The nine trucks in the convoy carried 203 tons of rice that civic groups and opposition political parties in South Korea had donated for the victims of recent flooding in North Korea. The flooding is expected to worsen food shortages in the North, which even in a year of good harvests, cannot produce enough to feed its estimated population of 23 million people properly.

The shipment, coming just before the Korean harvest festival of Chuseok next week, also seemed to symbolize a newfound South Korean good will toward the North. It followed 530 tons of flour that a South Korean provincial government and civic groups sent on Thursday.

After President Lee Myung-bak came to power in Seoul in early 2008, South Korea had been reluctant to provide rice or any other major aid shipments to the North until its government in Pyongyang took significant steps to give up its nuclear weapons. The sinking of the warship, the Cheonan, further soured relations.

But in the past week, the South approved the civic groups’ donations, as well as a separate Red Cross plan to send 5,000 tons of rice. The approval followed conciliatory gestures by North Korea, including a plan to resume a Red Cross program of arranging temporary unions of families split by the 1950-53 Korean War.

UPDATE 11: North Korea complains that it did not receive enough aid from South Korea.  According to UPI:

North Korea complained Sunday that a planned shipment of flood-relief aid from South Korea is much smaller than expected.

The state-controlled weekly Tongil Sinbo said the rice shipment the South Korean Red Cross said would feed 200,000 people for 50 days was not nearly adequate.

“After the lid was removed from the box of aid, there was only 5,000 tons of rice in it,” Tongil Sinbo said in a posting on the North’s official Web site.

The statement, which was monitored by South Korea’s Yonhap news agency, said the shipment would not last “even for a day.”

The Red Cross aid package, which includes rice and cement, was consigned to Sinuiju, a town near the Chinese border in a region hit hard by rain and flooding last month.

The shipment had been seen by diplomatic analysts as an easing of tensions between the two Koreas, Yonhap said. North Korea relies heavily on donations of rice and other supplies to prop up its economy.

Also, see this Yonhap story.

UPDATE 10: The Ministry of Unificaion is opposed to large scale food assistance—drawing a distinction between flood relief and large-scale food aid.  According to KBS:

Unification Minister Hyun In-taek says he is opposed to large-scale food aid to North Korea.

He said large-scale food aid is separate from humanitarian aid, and that all aspects of inter-Korean policy and the sinking of the “Cheonan” naval vessel should be considered.

Hyun made the remarks at a budget committee meeting on Friday when a main opposition Democratic Party member urged the government to send 500-thousand tons of rice to North Korea.

Hyun said that South Korea had sent large amounts of food aid on multiple previous occasions for what was called humanitarian assistance, but it is doubtful whether the rice had been distributed to people in need.

Adding to political pressure against further donations, the Choson Ilbo reports that the North Korean military is warehousing quite a bit of rice:

In a party caucus at the National Assembly on Thursday, Grand National Party floor leader Kim Moo-sung said calls for humanitarian food aid for the North are “inappropriate” at a time when the North “has as much as 1 million tons of rice in storage in preparation for war. We have to take this into consideration.”

The figure apparently comes from a report by the National Intelligence Service for the ruling-party leadership.

South Korea worries about a rice surplus when it stores only about 1.49 million tons this year. If it is true that the North is really holding back 1 million tons of rice for the military, it could have a profound effect on the ongoing debate over whether to increase aid for the North.

UPDATE 9: The first aid shipment has arrived.  According to Arirang News:

The first round of civilian emergency aid since recent flooding in North Korea was delivered to the border town of Gaeseong on Thursday.

The transport of 530 tons of flour on two dozen large trucks by Gyeonggi Province and non-governmental groups is also the first aid package from the South after it enforced punitive measures on Pyeonyang in May, in response to its sinking of the warship Cheonan.

And five South Korean personnel were permitted to cross the border to transfer the goods.

Kim Moon-soo, Governor Gyeonggi Province: “Many South Koreans have been wanting to provide assistance and there’s been a delay but we’re finally sending aid today. There are factors other than intent to consider.”

The group had been waiting since July for the government to give the green light to supply food aid worth about 240-thousand US dollars… enough to feed some 30-thousand children and other vulnerable groups for a month.

It is estimated that some 28 million square meters of agricultural land was swamped by rainfall of up to 324 milimeters in Gaeseong.

Kim Deog-ryong, Co-chair, Korean Council for Reconciliation & Cooperation: “Following the first round of aid, we plan to send additional second and third rounds in October. We hope nongovernmental efforts will eventually lead to continuous government-level assistance.”

The resumption of aid delivery to the North on humanitarian grounds will likely be succeeded by a series of foodstuffs, such as rice and corn, being transported through the Dorasan Customs, Immigration and Quarantine office, on top of the South Korean Red Cross’ pledged shipments of rice, cement and other supplies.

On Friday, more civilian aid consisting of 203 tons of rice is scheduled to be delivered to the flood-ravaged Shinuiju region.

Choi You-sun (reporter) “The South Korean government is maintaining a firm stance concerning its set of stringent measures against North Korea. But officials here say there are more applicants wishing to send provisions forecasting that there will be a significant increase in the amount of nongovernmental aid to the impoverished North.

UPDATE 8: The Ministry of Unification seems to have approved the private aid donations mentioned in UPDATE 7.  According to the AFP:

South Korea’s government said Wednesday it has approved a plan by local groups to send flood relief aid to North Korea, amid growing signs of a thaw after months of tension on the peninsula.

The Unification Ministry said it approved Tuesday requests to send emergency supplies worth a total of 2.24 billion won (1.2 million dollars) including 203 tons of rice.

The aid for flood victims in Sinuiju and Kaesong also includes flour, bread, blankets and instant noodles, said spokesman Chun Hae-Sung, adding the first shipment of 400 tons of flour would be sent Thursday.

It was the second time this week that Seoul groups have announced help following floods that hit the city of Sinuiju on the China border and the town of Kaesong, just north of the inter-Korean frontier.

UPDATE 7: In addition to the aid offernd by the South Korean government (in the posts below),  private organizations in South Korea are offering flood assistance.  According to Yonhap:

The Korea Sharing Movement and the Join Together Society (JTS) plan to ship 400 tons of flour to the North Korean border city of Kaesong via an overland route on Thursday, an official said. The Gyeonggi provincial government helped fund the assistance.

Separately, the Korean Council for Reconciliation and Cooperation, a coalition of pro-unification civic and social groups, also plans to send 130 tons of flour to the North on Thursday.

And in another Yonhap story:

An umbrella trade union said Wednesday it seeks to send about 100 tons of rice, possibly by land, to North Korea to help the flood-hit nation.

The Federation of Korean Trade Unions (FKTU), which claims up to 900,000 members across the country, said it is in talks with its North Korean counterpart to determine the exact delivery route and size of the aid.

UPDATE 6: The South Korean government is trying to figure out how to prevent aid from being diverted to the military.  According to the Choson Ilbo:

“Rice can be stored for a long time and is easy to divert to the military,” the official said. “But rice flour or noodles are harder to store for longer and are more likely to be given to the victims instead of being transported to military warehouses.”

The government offered the North 10,000 tons of corn following the reunion of separated families on the occasion of Chuseok or Korean Thanksgiving last year reportedly because this was less likely to be used for military rations. North Korean defectors say they were rarely given any rice supplied by the South, while rice bags with the lettering of the South Korean Red Cross stamped on were seen in military facilities close to the heavily armed border.

During the famine in the late 1990s, the North received corn flour aid from the U.S which the authorities then distributed through ration stations, a defector recalls.

But processing over 100,000 tons of rice into flour and other products may not be realistic as it would cost a lot of time and money, a Unification Ministry official said.

UPDATE 5: According to the Donga Ilbo:

Yoo Chong-ha, head of the (South) Korean National Red Cross, said in a news conference Monday that the Red Cross will send 10 billion won (8.6 million U.S. dollars) worth of aid comprising 5,000 tons of rice, 10,000 tons of cement, three million packages of instant noodles, and medicine.

He also suggested a working-level meeting of Red Cross organizations from both sides in Kaesong Friday on Pyongyang’s proposal for reunions of separate inter-Korean families.

On the volume of rice aid, Yoo said, “Around 80,000 to 90,000 people in (the North Korean city of) Shinuiju are known to be displaced, and 5,000 tons of rice can feed 100,000 people for 100 days,” translating into 500 grams a day per person.

The South’s Red Cross said it set the amount given that international aid organizations allocate 300 to 500 grams per person when they send rice assistance to the North.

The budget for buying the rice was 7.7 billion won (6.6 million dollars), or 1.54 million won (1,330 dollars) per ton based on the price of rice Seoul purchased in 2007.

Even if the South Korean government provides rice aid to the North, the combined amount will be around 10 billion won as the South’s Red Cross proposed to the North last month.

Excluded from the aid package was heavy equipment that the North requested. Most of the 10 billion won in aid will come from a South Korean government fund for inter-Korean cooperation.

UPDATE 4: And the picture becomes clearer.  According to the Guardian:

The $8.5m (£5.5m) package, to be funded by the government, is the south’s first aid shipment to its neighbour since the sinking of a warship in March reduced bilateral relations to their lowest point for years. Seoul says its vessel was sunk by a North Korean torpedo, a claim Pyongyang denies.

The countries may also resume reunions for families separated by the 1950-53 Korean war, which ended in an uneasy armistice but no peace treaty. The reunions were suspended after a South Korean woman was shot dead by a guard during a visit to the North Korean tourist resort of Mount Kumgang, in 2008.

UPDATE 3: Some specifics come out.  According to Yonhap:

S. Korea’s Red Cross announces 5,000 tons of rice aid for N. Korea’s flood victims

UPDATE 2: South Korean farmers demand ROK government send aid to DPRK to keep rice prices high.  According to the AFP:

Thousands of South Korean farmers rallied Friday, demanding the government stop a fall in rice prices by shipping surplus stocks in state silos to North Korea.

The farmers urged President Lee Myung-Bak to resume an annual shipment of 400,000 tonnes of rice to the North, which suffers severe food shortages. The shipment was suspended in 2008 as relations soured.

About 3,000 farmers took part in morning rallies in a dozen cities and counties, said the Korea Peasants’ League, which represents farmers, adding more were under way or planned in the afternoon.

“Resuming rice aid to North Korea is a short cut to stabilising rice prices and also improving inter-Korean ties,” league spokesman Kang Suk-Chan told AFP.

The government makes an annual purchase of rice from farmers to stabilise prices amid falling national demand, but is predicting a bumper harvest this year.

Unless some stocks are sold off, the agriculture ministry says the South’s strategic rice reserve will soon reach an all-time high of 1.49 million tons, twice the 720,000 tonnes considered necessary for emergencies.

Last week minister Yoo Jeong-Bok said the government would sell about 500,000 tons of the reserve this year to companies that make alcoholic beverages and processed food ingredients.

Farmers claimed the ministry’s move would fail to stop the fall in prices. They want the government to lift the 2008 ban and to purchase this year’s harvest at higher prices.

Subsidised farmers grow more rice than South Koreans want to eat. The country’s consumption of the staple fell in 2007 to its lowest level for decades as people ate more meat and vegetables.

Cross-border tensions this summer have run high over the sinking of a South Korean warship with the loss of 46 sailors. The North vehemently denies involvement but the South has cut off most cross-border trade.

Read the full story here:
S.Korea farmers demand rice shipment to N.Korea
AFP
9/10/2010

UPDATE 1: The DPRK accepts the ROK’s aid offer.  According to the BBC:

North Korea has responded to an offer from South Korea of emergency food and medical aid, saying it would prefer to receive rice and building materials.

The South Korean offer, worth more than $8m (£5m), was made last week after severe flooding in the North.

South Korea says it is considering the North’s request.

The aid would be the first large-scale shipment since South Korea blamed its impoverished northern neighbour for sinking one of its warships in March.

South Korea blames Pyongyang for sinking the Cheonan with a torpedo, killing 46 crew.

North Korea denies any role in the incident and has demanded its own investigation.

Food aid

North Korea’s Red Cross said it would prefer rice, cement and heavy construction equipment – items it said were necessary for flood recovery efforts, according to Seoul’s Unification Ministry and Red Cross.

The South’s offer excluded rice – a staple which Seoul has stopped sending to Pyongyang amid strained relations.

North Korea has been hard hit by floods caused by heavy rains in July and August, especially in its northern areas bordering China.

This week a South Korean newspaper published pictures of people sleeping in tents and queuing for water in the city of Shinuiju.

They were taken by an undercover source who also reports rare public complaints that the North Korean leadership is not doing enough to help.

Read the full story here:
North Korea accepts flood aid offer from South
BBC
9/7/2010

ORIGINAL POST: South Korea offers flood aid to the DPRK. According to the BBC:

South Korea has made its first offer of aid to North Korea since it accused Pyongyang of sinking one of its warships in March.

South Korea’s Red Cross has offered 10bn won ($8.3m, £5.3m) worth of flood aid to its impoverished neighbour.

The offer came hours after the United States imposed new sanctions on the North in response to the sinking.

South Korea blames North Korea for sinking the Cheonan on 26 March with a torpedo, killing 46 crew.

North Korea denies any role in the incident and has demanded its own investigation.

FOOD AID
North Korea has relied on food aid from China, South Korea and aid agencies to feed millions of its people since a famine in the 1990s resulted in the deaths of hundreds of thousands.

But the communist country has been hard hit by floods caused by heavy rains in July and August, especially in its northern areas, bordering China.

“The aid includes medical kits, emergency food and supplies,” a Unification Ministry official said, quoting the Red Cross message sent to North Korea.

The offer has yet to be accepted by the North.

Under President Lee Myung-bak, the South has stepped back from its earlier “sunshine” policy of unconditional aid and has linked the provision of aid to progress from the North on ending its nuclear programme.

A South Korean offer of about 10,000 tonnes of corn to North Korea in October 2009 was the first official aid to its hungry neighbour for almost two years.

The year before, the South had offered 50,000 tons of corn but the North rejected the shipment amid high tensions.

‘TOO EARLY’
The offer came after North Korea reportedly indicated it was ready to return to six-party talks over ending its nuclear ambitions.

Parts of North Korea have been badly affected by severe flooding Leader Kim Jong-il told the Chinese president that he wanted to see negotiations resumed during a visit to China last week, Chinese state media said.

The talks – which involve the two Koreas, China, Russia, Japan and the US – have been stalled since December 2008 over Pyongyang’s missile and nuclear tests.

But South Korea is demanding an apology for the warship sinking before any return to the negotiations.

Japan also says the time is not right to resume talks.

On Tuesday its foreign minister, Katsuya Okada, told China’s visiting nuclear envoy, Wu Dawei, that it was still “too early” to think about a return to talks.

On Monday the US imposed additional sanctions on North Korea, targeting trade in arms, luxury goods and narcotics.

Read the full story here:
South Korea offers aid to flooded North
BBC
8/31/2010

Share

Lankov offers party conference wrap-up

Sunday, October 10th, 2010

Writing in the Korea Times:

So, in late September North Korea’s ruling Korea Workers’ Party (KWP) had its third conference, the first such high level conference to take place in 30 years, since a party congress in 1980.

It was an interesting show, so for the next few weeks or months North Korean specialists will be busily analyzing the new information which emerged, as well as the conference significance and its likely impact on the future of North Korea.

But one thing should be admitted now: the conference turned out to be not exactly what most people expected (albeit, admittedly, it came close enough).

Since congresses and conferences are exceptional events in North Korea, it was widely predicted that this conference was convened to make some extraordinary statements ― otherwise, why would they have it? However, as it turned out, the results of the KWP conference ― while interesting and important ― can hardly be described as extraordinary.

Most observers expected that the decision to convene the conference had something to do with a dynastic succession which has begun to unroll in North Korea. There were even speculations that Kim Jong-il himself would abdicate, thus giving power to his third son and successor Kim Jong-un. This theory was seen as wild by all serious observers, but it was sort of assumed that Kim Jong-un would be explicitly designated as a successor ― like it was the case with his father in 1980, during the last Party gathering of the comparable level.

However, this did not happen. The conference was the first time when Kim Jong-un’s name was mentioned in the open media (before that, all talk about him was in classified publications only), and photos of the overweight and seemingly emotionless youngster appeared in the North Korean newspapers. He was also given a rank of the full (five-star) general and made the vice-chairman at the KWP Military Committee. These are serious hints at the special standing for somebody who is merely 27 or 28 years old, to be sure, but this is not his formal anointment which was expected to happen by many people, including the present author.

Another small mystery is the relatively low profile of Jang Song-thaek, who since last years has been seen as the most likely prince regent, a person whose job will be to instruct and tutor (I’d say, to run) Kim Jong-un in case of his father’s premature death. Jang’s wife (who also is the younger Kim’s aunt) also became a full general ― an unusual promotion for a lady who has been dealing with the light industry all her life and hardly can tell a howitzer from a mortar. So, the couple is not out of favor, and Jang kept his positions, but was not featured that prominently at the conference.

This might be unusual, since throughout the last year or so we have seen many signs of hurried preparations for formal succession. However, by some unknown reasons, these preparations might have slowed down recently.

The recent changes are clearly steps towards the eventual emergence of Kim Jong-un as Kim the Third, but so far these measures do not appear quite sufficient to completely ensure a smooth transition. Kim Jong-il’s intentions about his son are now public, but if the Great Leader dies tomorrow, his son will be merely one of a dozen full generals and marshals, not an explicitly designated “successor to the great Juche revolutionary course.”

So, if the elder Kim decides to continue with the power transition within his family (and this seems to be almost certain), more steps might be expected – like, say, a formal Party congress to be convened a couple of years later.

What else unusual could we see at the conference? It might sound strange, but by the North Korean standards it was almost a triumph of openness and transparency. As expected, many vacant positions were filled in, and at first time in many decades North Korean newspapers published short official biographies of the top officials.

In many cases the conference materials made public the names of the people who hold senior bureaucratic positions ― until now in most cases the names of the departmental heads in the Central Committee (roughly equivalent to cabinet ministers) have been largely known ― if known ― through hearsay.

Nonetheless, the main question remains: why did they have this unusual show if the actual results do not appear that significant? We cannot rule out that some last minute changes were made in the conference agenda (after all, the conference opening was delayed by some unknown reasons for some 20 days), so its initial agenda was made less radical.

However, it seems more likely that the major goal of the conference was to confirm the partial move of power back to the party from the military, and also to increase the legitimacy of the current elite as a group. Succession is, of course, an issue as well, even though it seems that by some reasons the preparations for power transition have moved to lower gear ― for the time being, at least.

Read the full story here:

Aftermath of succession show
Korea Times
Andrei Lankov
10/10/10

Share