Archive for the ‘Central Committee’ Category

UN report explains sanctions decisions

Friday, August 6th, 2010

According to the Daily NK:

The 1718 Committee of the UN Security Council has published the final version of its “Report to the Security Council from the Panel of Experts established Pursuant to Resolution 1874,”

In the report, of which the Daily NK has obtained a copy, the 1718 Committee revealed North Korean overseas accounts which had likely been used for North Korea’s illicit activities such as conventional weapons transactions and luxury goods, and the names of entities and individuals involved in those activities. The lists were submitted by UN member states.

The report singles out 17 North Korean officials thought likely to violate UN Resolutions 1718 and 1874, and outlines the reasons why they were designated by the UN member states.

They are Jang Sung Taek, Vice-chairman of the National Defense Commission and the closest associate of Kim Jong Il, Vice-chairman of the National Defense Commission Oh Keuk Ryul, Kim Young Chun, the Minister for the People’s Armed Forces, Director of No. 39 Department Kim Dong Woon, Military Supplies Secretary in the Central Committee of the Party Jeon Byung Ho, former Yongbyon technical director Jeon Chi Bu, First Vice-director of the Ministry of the Munitions Industry Chu Kyu Chang, Standing Vice-director of the People’s Army’s General Political Department Hyun Cheul Hae, President of the Tanchon Commercial Bank Kim Dong Myung, Member of the National Defence Commission Baek Se Bong, Deputy Director of the General Political Department of the People’s Armed Forces Park Jae Kyung, President of the Academy of Science Byeon Youong Rip, Director of the General Bureau of Atomic Energy Ryeom Young, Head of the Department of Nuclear Physics of Kim Il Sung University Seo Sang Il, President of Kohas AG Jacop Steiger and Alex H.T. Tsai, who is known to have provided financial, technological and other support for KOMID, and his wife, Su Lu-chi.

It also released a list of autonomous designations provided by member states, covering 19 North Korean entities. That list was made based on information collected as of April 30th this year.

They are Amroggang Development Banking Corporation, Global Interface Company Inc., Hesong Trading Corporation, Korea Complex Equipment Import Corporation, Kohas AG, Korea International Chemical Joint Venture Company, Korea Kwangson Banking Corp, Korea Kwangsong Trading Corporation, Korea Pugang Trading Corporation, Korea Pugang Mining and Machinery Corporation ltd., Korea Ryongwang Trading Corporation, Korea Ryonha Machinery Joint Venture Corporation, Korea Tonghae Shipping Company, Ponghwa Hospital, Pyongyang Informatics Centre, Sobaeku United Corp., Tosong Technology Trading Corporation, Trans Merits Co. Ltd., and Yongbyon Nuclear Research Centre.

13 out of the 19 have direct or indirect links to Tanchon Commercial Bank and Korea Mining Development Trading Corporation (KOMID).

Amroggang Development Banking Corporation is the financial arm of KOMID and related to Tanchon Commercial Bank, which has also been designated by the 1718 Committee. Additionally, Global Interface Company Inc. is owned by Alex Tsai, who is thought to have provided, or attempted to provide, support to KOMID.

Sobaeku United Corp. is involved in activities related to natural graphite, producing graphite blocks that can be used in missiles.

The report points out, “North Korea has established a highly sophisticated international network for the acquisition, marketing and sale of arms and military equipment, and arms exports have become one of the country’s principal sources for obtaining foreign exchange,” and goes on to say, “Agencies under the National Defense Commission (NDC), the Workers’ Party of Korea (WPK) and the Korean People’s Army (KPA) are most active in this regard.”

The report explains, “The Second Economic Committee of the National Defense Commission plays the largest and most prominent role in nuclear, other WMD and missile-related development programs as well as in arranging and conducting arms-related exports.”

It adds, “The General Bureau of Surveillance of the Korean People’s Army is involved in the production and sale of conventional armaments.”

The report points out that North Korea has opened 39 accounts with 18 overseas banks in 14 countries. 17 of which are held with Chinese banks.

Besides China, 11 banks in eight European and former Soviet countries (Russia, Switzerland, Denmark, Hungary, Poland, Italy, German, Belarus and Kazakhstan) hold 18 North Korean accounts. There is one account in Malaysia.

“The DPRK also employs a broad range of techniques to mask its financial transactions, including the use of overseas entities, shell companies, informal transfer mechanisms, cash couriers and barter arrangements,” the report notes.

According to experts on North Korea, since North Korean overseas illegal activities are all led by the loyal group surrounding Kim Jong Il, U.S. financial sanctions in accordance with UN Security Council resolutions 1817 and 1874 and also U.S. Executive Order (E.O.) 13382 have the potential to be a great pressure on the Kim Jong Il regime.

The Panel of Experts, which was appointed by the UN Secretary-General on 12 August 2009 to author the report, are David J. Birch (United Kingdom of Great Britain and Northern Ireland, coordinator), Masahiko Asada (Japan), Victor D. Comras (United States of America), Erik Marzolf (France), Young Wan Song (Republic of Korea), Alexander Vilnin (Russian Federation), and Xiaodong Xue (People’s Republic of China).

Read the full story here:
Report Explains Sanctions Decisions
Daily NK
Kim Yong Hun
8/6/2010

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Aidan Foster-Carter offers DPRK current events summary…

Thursday, July 8th, 2010

In the East Asia Forum:

June 2010 saw two major anniversaries on the Korean peninsula. On June 25 sixty years ago the Korean People’s Army (KPA) invaded the South launching a bitter three-year war. North Korea still denies culpability, claiming it was repelling a Southern invasion; despite overwhelming evidence, now backed by Soviet archives, that it was the aggressor. No less mendaciously Pyongyang nonetheless celebrates the July 27, 1953 Armistice which ended open hostilities as a ‘brilliant victory in the Fatherland Liberation War’ — even though this left the North bombed and napalmed to ruination.

China still formally backs the North’s version, but this year some brave soul decided to take seriously the late Deng Xiaoping’s instruction to ‘Seek truth from facts.’ The International Herald Leader, an affiliate of Xinhua news agency let the cat out of the bag. It featured interviews with Chinese historians telling the true story, and a timeline stating that ‘The North Korean military crossed the parallel on June 25 1950 and Seoul was taken in four days.’ Naturally, the article rapidly vanished from the web. But many Chinese now are openly critical of the DPRK, and embarrassed that Beijing continues to toe Pyongyang’s line.

North Korea itself sticks to the old tunes. On June 22 the Korean Central News Agency (KCNA) reported what it headlined as ‘Revenge-vowing Meetings.’

Youth and students and agricultural workers gathered in Susan-ri… and in Sinchon … Tuesday to vow to take revenge upon the U.S. imperialists on the occasion of the ‘June 25, the day of the struggle against the U.S. imperialists’.

The reporters and speakers at the meetings recalled that the U.S. imperialists brutally destroyed cities, villages, factories and farms and killed innocent civilians…denouncing the Yankees as a herd of wolves in human skin and the Koreans’ sworn-enemy with whom they cannot live under the same sky…

They bitterly condemned the U.S. imperialists and the Lee group of traitors for totally negating the historic June 15 North-South Joint….

If the U.S. imperialists intrude into the DPRK even an inch, all the servicepersons and people will mercilessly wipe out the aggressors.

Rhetoric like the above is clearly intended to fan the flames of hatred.

A further KCNA item on June 24 purported to list the ‘Tremendous Damage Done to DPRK by US.’ The KCNA, with unusual precision, computed a total of nearly 65 trillion dollars for human and material losses inflicted from 1945 up to the present. Considering the state of US public finances, Kim Jong-il should not expect a cheque any time soon. There is also a degree of inflation; last time KCNA published such an exercise, in November 2003, the bill was a mere US$ 43 trillion. One can only wonder what is the point of such grandstanding.

So savage a mood has torpedoed a second anniversary; one which should have been happier. On June 13 2000 South Korea’s then president, the veteran democrat Kim Dae-jung flew to Pyongyang for the first ever inter-Korean summit with the North’s leader, Kim Jong-il. On June 15 they signed a North-South Joint Declaration; Kim Dae-jung was awarded that year’s Nobel Peace Prize. Thus began a decade of unprecedented North-South cooperation, albeit patchy and one-sided. This ‘sunshine’ policy was ended by South Korea’s current president, Lee Myung-bak, who insists that the North must give up its nuclear weapons first if it wants better ties with the South. That sounds fine in theory, but few expect it will ever happen.

North Korea made much of the June 15 anniversary, even while excoriating the ‘traitor’ Lee Myung-bak for trampling on it. Pyongyang warmly welcomed a South Korean radical priest, Han Song-ryeol, who made the trip illegally to mark the occasion.

South Korea by contrast played up the war anniversary more than the inter-Korean one. Lee Myung-bak used this occasion to once again call on the North to admit that it sank the ROK corvette Cheonan on March 26, and to apologise.

Will the Cheonan go unpunished?
Nevertheless, it looks increasingly like Pyongyang has got away with it. June brought Lee Myung-bak little joy on the issue, at home or abroad. Local elections in South Korea on June 2 saw his ruling Grand National Party (GNP) rebuffed. Many voters saw Lee’s tough first reactions, which roiled global markets, as adding to rather than reducing risk.

Abroad too Lee has met obstacles. Assured of firm US and other Western support he is struggling to convince Russia and China. That was predictable: for Beijing and Moscow, unwillingness to paint Pyongyang into a corner was always going to trump the facts. A Russian naval team visited Seoul to inspect the Cheonan wreckage, including DPRK torpedo parts, but is not expected to report until July. In this light the ROK government will be relieved that the G-8 summit in Canada on June 25 issued a strong statement on the Cheonan – after energetic lobbying by Japan’s new prime minister Naoto Kan, which will get his relations with Lee Myung-bak off to a good start. Connoisseurs of diplomatic wordplay noted that while the G-8 condemned the attack, noted that an international team had blamed it on Pyongyang, and called on the DPRK to avoid any attacks against the ROK, it did not quite join up all those dots; doubtless at Moscow’s behest. Lee may lobby similarly when he arrives for the ensuing G-20 summit; although since South Korea chairs the group and will host its next jamboree in Seoul in November, it may look bad if he were perceived as acting in too particularist a way.

Earlier, on June 4 South Korea formally referred the Cheonan incident to the UN Security Council (UNSC). On June 14 both Korean states briefed the UNSC, with the North as ever denying all responsibility and urging the Council not to consider the matter. No official response is expected until July. With Russia and China likely to abstain at best, whatever the Security Council eventually comes up with looks set to be a damp squib. South Korea has already said it will not seek further sanctions, on top of those already in force under earlier UNSC resolutions from 2006 and 2009 after the North’s two nuclear tests. But it would like a clear, resounding condemnation, preferably in the form of a resolution.

Looking ahead, it is not too soon to wonder how the two Koreas will get past Cheonan. Record numbers of DPRK workers at the Kaesong Industrial Zone (KIZ) – 44,000 as of June, according to the ROK unification ministry (MOU) – are seen in Seoul as a sign that at some level Pyongyang remains committed to this joint venture at least.

A big event in September
Meanwhile North Korea looks more preoccupied with the succession issue than in reaching out to South Korea.

On June 26 KCNA reported that ‘the Political Bureau of the WPK [Workers’ Party of Korea] Central Committee decides to convene early in September … a conference of the WPK for electing its highest leading body reflecting the new requirements of the WPK.’

Though nominally it is North Korea’s ruling communist party, and still an important tool of control at lower echelons, the WPK has seen its topmost organs atrophy under Kim Jong-il. Neither the rarely mentioned Politburo nor the Central Committee (CC) is known to have met at all in the 16 years since Kim Il-sung died. Kim Jong-il has favoured the army, ruling through the NDC and informally via a kitchen cabinet of trusted cronies. The dear leader is also of course secretary-general of the WPK, but he acquired that post irregularly: by acclamation at a series of local Party meetings, rather than being duly elected by the CC.

Hence while the precise nature of September’s meeting remains vague, like its exact date, it looks like a long overdue effort to restore a measure of due process to the Party. If this is in fact a full formal WPK congress, it would be the first since the Sixth Congress thirty years ago in October 1980. It was then that Kim Jong-il, hitherto veiled behind coded references to a mysterious ‘Party Centre’, was finally revealed in the flesh. The speculation is that this new meeting similarly will finally give the world a glimpse of the enigmatic Kim Jong-eun.

While all rumours emanating from Seoul should be treated carefully it’s hard not to link this news with reports that Kim Jong-il’s health is worsening. There are claims that on some aides including his son are duping him with Potemkin factories to hide from him how dire the economy really is. An already tardy succession can clearly brook no further delay, or else regime stability and continuity may be gravely imperilled.

The economy shrank again last year
If Kim Jong-il wants to know how his economy is really doing, he could look at the latest estimates from the enemy.

The (southern) Bank of Korea (BOK) published its latest estimates, covering 2009, on June 24, just in time for Seoul to crow about them as it marked the Korean War anniversary. By this reckoning North Korea’s real annual gross domestic product (GDP) shrank by 0.9 per cent last year. Unlike most other countries this had little to do with the global financial crisis. Rather it reflected local conditions, natural and man-made.

The gaps just get wider
The result is a huge and ever widening gap. North Korea’s gross national income (GNI) in 2009 was a mere 2.7 per cent of the South’s. BOK cites Northern GNI in 2009 was US$22.4 billion, compared to US$837 billion for the South. True, the South has over twice as many people. But the average North Korean per capita income too is a minute fraction of the South’s, with the ROK topping US$17,000 while the DPRK’s is a paltry US960. (Some experts, including a former unification minister, think even this is too high and posit a figure nearer US$300, putting North Korea among the poorest nations on earth.)

With trade figures the gap is even wider. This year inter-Korean trade will fall, since Seoul has banned most of it (except the Kaesong zone, which accounts for over half) as punishment for the Cheonan. Peanuts to the South, this has been crucial for the North: South Korea is its largest market, taking almost half of its meagre total exports. Last year inter-Korean trade like DPRK trade overall fell slightly, from US$1.82 to US$1.68 billion. Yet Northern exports crept up, from US$932 to 934 million.

In 2009 North Korea’s real trade totals were just under US$2 billion in exports and US$3.1 billion in imports. They are still dwarfed by South Korea’s respective figures of US$364 and US$324 billion – and this in a bad year for the South, due to the downturn.

Every year the gap widens further, yet still Kim Jong-il refuses economic reform. It is hard to fathom a mind-set which can inflict such disaster and tragedy on a once proud land and people – and whose idea of a way out of its self-dug hole is to fire a sneaky torpedo.

Good losers
It was left to North Korea’s footballers to remind the world that their country does not lack for talent and virtue. As one would expect, North Korea were a disciplined team. They kept to themselves and avoided the press – with one striking exception, Jong Tae-se. Born in Japan to a South Korean father and a pro-North Korean mother, and having attended schools run by Chongryun – the organisation of pro-North Koreans in Japan – he elected to play for the DPRK; although he still holds ROK nationality, lives in Japan and plays in the J-League for Kawasaki Frontale.

A young man whose talk is as uninhibited as his style of play, Jong cried when the DPRK anthem was played before the Brazil match. Yet his love for his adopted homeland is not uncritical. ‘Everybody thinks about our country as being closed and mysterious, so we have to change that,’ he told AFP. ‘We can change for the better if we are more open with the way we talk to people and it would make a better team.’

It would make a better country too. If North Korea’s fate must rest in the hands of an untried youth, better it were the warm-hearted and wised-up Jong Tae-se than Kim Jong-eun.

Read the full story here:
North Korea: Unhappy anniversaries
East Asia Forum
Aidan Foster-Carter
7/6/2010

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Mansudae Overseas Development Group Projects

Wednesday, June 23rd, 2010

According to the Daily NK:

North Korea has earned more than $160 million in the last ten years thanks to the construction of sculptures and other edifices in countries across Africa.

A Daily NK source in China revealed on the 18th, “Since 2000, North Korea has been earning colossal quantities of dollars through contracts for the Mansudae Overseas Project Group of Companies under the Mansudae Art Institute to construct sculptures.”

Mansudae Art Institute is an organization primarily dedicated to the idolization of Kim Il Sung and Kim Jong Il through public works, one whose construction of edifices such as the Juche Tower and Arch of Triumph in Pyongyang has added to the status of the country.

It has also been building revolutionary monuments in African countries such as Ethiopia since the 1970s in order to maintain cordial relations with socialist states, but in the early 2000s started doing work in African countries to earn foreign currency as well.

According to the source, North Korea has earned $66.03 million from Namibia alone thanks to the construction of the Presidential Palace ($49 million); the Cemetery of National Heroes ($5.23 million); a military museum ($1.8 million); and Independence Hall ($10 million).

It has also earned almost $55 million from Angola via the António Agostinho Neto culture center ($40 million); Cabinda Park ($13 million); and the Peace Monument ($1.5 million).

Additionally, the North has constructed a basketball stadium ($14.4 million) and an athlete academic center ($4.8 million) in the Congo, earning almost $20 million dollars in total.

Thanks to the Monument to the African Renaissance in Senegal, the North has made another $12 million dollars.

There are around 19.8㎢ set aside for a vacation spot for the president of Equatorial Guinea, which is supposed to earn Mansudae around $800,000, not to mention a government office building ($1.5 million), Luba Stadium ($6.74 million) and conference halls ($3.5 million).

The source also reported, “The money earned from these construction projects is managed by the No. 39 Department. Some of these dollars are used for domestic governance, while the rest go to secret accounts in Switzerland or Macau to become Kim Jong Il’s secret funds.”

Here are the images from the story including a table of financial data (which I would take with a grain of salt):

dnk-mansudae-1.jpg dnk-mansudae-2.jpg dnk-mansudae-3.jpg dnk-mansudae-4.jpg dnk-mansudae-5.jpg dnk-mansudae-6.jpg dnk-mansudae-7.jpg

Additional Information:

1. I blogged here about the Derg Monument in Ethiopia.

2. I have located some of the Mansudae Overseas projects mentioned in this story (as well as numerous other places not menioned in this story: Egypt and Syria, Zimbabwe, DR Congo). However, here are GeoEye satellite images of some of the Namibia and Angola projects mentioned above courtesy of Google Earth:  

Namibia National Heroes Acre (22°39’46.02″S,  17° 4’41.06″E):

national-heroes-acre-namibia-thumb.jpg

Namibia State House (22°35’28.83″S,  17° 6’2.76″E)

namibia-state-house-thumb.jpg

Cultural Center of António Agostinho Neto (Mausoleum) (8°49’24.73″S,  13°13’8.52″E)

angola-nehro-thumb.jpg

 

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Room (Bureau) 38 allegedly restored

Wednesday, June 23rd, 2010

According ot the Choson Ilbo:

North Korea in March restored a special department in the Workers Party codenamed Room 38 which manages leader Kim Jong-il’s coffers and personal slush funds, it emerged Monday. The North last fall merged Room 38 with Room 39, which manages party slush funds.

“Rooms 38 and 39 were merged to simplify Kim Jong-il’s slush funds,” said a North Korean source. “But when it became difficult to secure hard currency due to international sanctions, Room 38 seems to have been restored because there was a feeling that Room 39 alone can’t meet the need.”

Room 38 is reportedly led by Kim Tong-il, who heads three regional departments in charge of earning hard currency.

Room 39 tries to maximize earnings from gold and zinc mining and farming and fisheries. It also manages stores and hotels exclusively for foreigners in Pyongyang. Room 39 seems to have suffered badly due to the recent suspension of inter-Korean trade. “Taesong Bank and Zokwang Trading, which received remittances from Mt. Kumgang tourism, are both controlled by Room 39, and is also in charge of the exports of agricultural and fisheries products,” said a government source.

Kim Jong-il needs dollars to maintain the party elite’s loyalty to him and his heir presumptive. He is said to have told party bigwigs in February, “From now on I will judge your loyalty based on the amount you contribute to the fund.” His son Jong-un is also said to be amassing separate slush funds for his own use.

But international sanctions on exports of weapons, counterfeit dollars, fake cigarettes and drugs remain in place, and the United States is pushing ahead with additional financial sanctions over the North’s sinking of the South Korean Navy corvette Cheonan in March. Pyongyang was dealt a heavy blow in 2005 when the U.S. froze US$25 million in the Banco Delta Asia in Macao which was apparently for Kim’s personal use.

Kim earlier this year appointed his high school friend Jon Il-chun head of Room 39. Jon was also named chairman of the National Development Bank, established early this year with a view to conducting normal international financial transactions to induce foreign investment. “North Korea seems to be planning to divert part of foreign investment to Kim’s slush fund,” said a government official.

NK Leadership Watch has more

Read the full story here:
Kim Jong-il Restores Special Department to Swell Coffers
Choson Ilbo
6/24/2010

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DPRK abandons food rations, orders self-sufficiency

Thursday, June 17th, 2010

Institute for Far Eastern Studies (IFES)
NK Brief No. 10-06-17-1
6/17/2010
 
As North Korea’s food shortages worsen and reports of starvation continue to grow, the Workers’ Party of Korea have acknowledged the failure of the central food ration program. Since the end of May, the Party has permitted the operation of 24-hour markets, and the regime has ordered the people of the North to provide for themselves.

The human rights organization Good Friends reported this move on June 14. According to Good Friends, the Workers’ Party organization and guidance bureau handed down an order on May 26 titled ‘Relating to Korea’s Current Food Situation’ that allowed markets to stay open and ordered North Koreans to purchase their own food. This order, recognizing that the food shortages in the North have continued to worsen over the last six months, since the failed attempts at currency reform, acknowledged the difficulty of providing government food rations. It calls on those who were receiving rations to now feed themselves, while also calling on the Party, Cabinet, security forces and other relevant government agencies to come up with necessary countermeasures. Now, authorities officially allow the 24-hour operation of markets, something that most had already tacitly permitted, and encourage individuals, even those not working in trading companies, to actively import goods from China.

It has been reported that government food rations to all regions and all classes of society, even to those in Pyongyang, were suspended in April. The last distribution of food was a 20-day supply provided to each North Korean on April 15, the anniversary of the birth of Kim Il Sung. Because of the difficulty of travelling to markets, the suspension of rations caused many in farming communities to starve to death. When Kim Jong Il’s recent visit to China failed to secure expected food aid, the Workers’ Party had no choice but to hand down the ‘May 26 Party Decree’. While the suspension of rations has considerably extended the economic independence of North Korean people, the regime has significantly stepped up other forms of control over society. Public security officers have begun confiscating knives, saws and other potential weapons over 9 centimeters long in an effort to stem murder and other violent crimes. Additionally, state security officials are cracking down on forcefully resettling some residents of the age most likely to defect, while sending to prison those thought to have contacted relatives in South Korea.

According to Daily NK, North Korean security officials are pushing trading companies to continue trading with China, while calling on Chinese businesses to provide food aid. It also appears that North Korean customs inspections along the Tumen River have been considerably eased, and there is no real attempt to identify the origin or intended use of food imported from China. Sinheung Trading Company has asked Chinese partners investing in the North to send flour, corn and other foodstuffs. The Sinheung Trading Company is operated by the Ministry of State Security, and is responsible for earning the ministry foreign capital. It appears that food acquisition is now a matter of national security, as North Korea is expecting South Korea and the rest of the international community to economically isolate the country.

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DPRK shakes up elite in order to meet 2012 “strong and prosperous” goal

Tuesday, June 15th, 2010

Institute for Far Eastern Studies (IFES)
NK Brief No. 10-06-14-2
6/14/2010

During the third session of the 12th Supreme People’s Assembly, convened on June 7, Kim Jong Il promoted his brother-in-law Jang Sung Thaek to vice-chairman of the National Defense Commission (NDC), named a new premier, and replaced several department heads and ministers. This appears to be an attempt to shore up the regime as it seeks to “open the door to a strong and prosperous nation” by 2012, the 100th anniversary of the birth of Kim Il Sung. Kim Jong Il made a personal appearance at this latest assembly meeting, unlike the SPA meeting held in April. The leader’s presence hints at the importance of the latest gathering.

This promotion of Jang Sung Thaek and shake up of Cabinet positions appears to be part of efforts to realize the quickly approaching goal of establishing a ‘strong and prosperous nation’ by 2012, assigning those most able to positions of responsibility, regardless of age or experience. Most notably, Jang, widely thought to be second-in-command in North Korea, was promoted to vice-chairman of the NDC. He was first appointed to the NDC at the first meeting of the 12th SPA in April 2009, making his climb to vice-chairman in a mere 14 months.

Before the latest promotion, Jang held the position of vice-director of the Workers’ Party of Korea, a newly created position that he was the first to hold. In this position, Jang oversaw national security offices, police, and the courts, putting him in a position of power difficult for anyone else to achieve. Having traveled to both South Korea and China, Jang Sung Thaek was likely promoted to present the image of a strong military and, at the same time, establish stable relations with the international community in order to ensure a smooth transition of power as well as to resurrect the economy by 2012. When Kim Jong Il led a delegation to China last May, the Chinese government treated Jang very well, ignoring standard protocol for someone in his position.

In addition, Choe Yong Rim was named the North’s new premier, and eight new vice-ministers were appointed. Regional Party secretaries were allowed to participate directly, allowing those who are most knowledgeable of local conditions to impact the decisions of the administration. Most of the new appointments were very experienced elites, including Choe Yong Rim (80) as premier, and Kang Neung Su (80), Kim Rak Hui (77), Ri Thae Nam (70), and Jun Ha Chul (82). The regime is promoting a number of veterans who are making their “last stand for the motherland” as part of the effort to ensure stable transformation of power after Kim Jong Il.

With Kim Rak Hui’s appointment as vice-premier and new appointments to the Ministry of Foodstuff and Daily Necessities Industry as well as the head of the Light Industry Ministry, North Korea seems to be pursuing the improvement of standards of living promised in the 2010 New Year’s joint editorial. Pyongyang Party officials appear to be attempting to reassert a centrally planned economy in the aftermath of botched currency reform efforts; however those witnessing regional economic conditions appear much more able to come up with appropriate economic policies. North Korea has been unable to make any significant progress in resolving its food shortages or its inability to provide daily necessities to the public, leading the regime to scapegoat some high-ranking officials. Now, many in and outside of North Korea are watching closely to see if the regime can launch economic efforts capable of successfully ‘opening the door to a Strong and Prosperous Nation’ in the next two years.

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Lankov on succession

Tuesday, June 15th, 2010

Writing in the Asia Times

A few days ago, a new session of the Supreme People’s Assembly – North Korea’s rubber-stamp parliament – was convened in Pyongyang. In most cases, such sessions do not attract much attention outside a tiny circle of the full-time Pyongyang watchers: few people would be excited by the sight of monotonously and tastelessly dressed men and women sitting in rows and raising their hands to signal their unanimous approval of the laws and resolutions that – as everybody understands – seldom bear any relation to reality.

However, this time observers suspected that something unusual was going to happen. The assembly’s last session took place in April, and was not supposed to meet again so soon. As we learned on June 7, parliament was convened to authorize (with the expected 100% approval rate) a major reshuffle of the North Korean leadership – and, judging by the urgency of gathering, this reshuffle was seen as a pressing matter.

A few days earlier, on June 3, the official North Korean wire agency reported that one day before, Yi Che-kang, the first deputy chairman of the ruling Korean Workers’ Party, had been killed in a traffic accident. The victim of a car crash was, formally speaking, second only to Dear Leader Kim Jong-il in the party hierarchy.

This news had to be suspicious: North Korea’s traffic is arguably the thinnest in Asia, but the country has a long tradition of traffic incidents taking the lives of high officials. The first such incidents occurred in the early 1970s, during the transition of power from the country’s founding father Kim Il-sung to his son.

Nowadays, the new dynastic transition is unrolling. In early 2009, after long delays and much hesitation, Kim Jong-il decided that his youngest son, Kim Jong-un, would become the next great leader of the country. So far, no reference to the “Young General” has appeared in the open media, but one can come across accolades to his greatness and superhuman wisdom in classified materials that are published for the benefit of officials (and distributed widely).

The events of the past week allow us to surmise how the power structure of North Korea will look like in the first years after Kim Jong-il’s death. It seems that North Korean political heavyweights have finally begun to prepare for the unthinkable – the demise of the Dear Leader.

The choice of Kim Jong-un as a heir designate serves, above all, the interests of the North Korean elite, so one can even suspect that the choice was somehow pushed on Kim Jong-il by his entourage. The “Young General” really is young, being merely 27 or 28 years old. Even North Korean propaganda mongers find this embarrassing, so they insist General Kim is in his early 30s.

The choice of such an exceptionally young candidate serves, above all, the interests of the old guard, Kim Jong-il’s own entourage. A young crown prince has no power base and no allies. Thus, even if he technically becomes the supreme leader, he will have no choice but to follow the advice of his father’s entourage, that is, people who are running the country now. He is doomed to become a puppet – at least for some while.

However, a weak crown prince will require an able prince regent. For the past few years, most Pyongyang watchers agreed that the most likely candidate to take such a position is Jang Song-taek, a brother-in-law of Kim Jong-il.

Born in 1946, he is 64 and hence young by the standards of North Korea, where a majority of the top leaders are in their 70s and 80s. The recent Supreme People’s Assembly session confirmed these speculations. At the session, Jang was appointed vice chairman of the National Defense Commission. The North Korean constitution stipulates that the chairman of this body is head of the state, and Kim Jong-il runs the country exactly in this capacity. Therefore, Jang officially became the second-placed person in the country.

The car incident that killed Yi Che-kang was also timely for Jang Song-taek. Yi was widely believed to be a rival of Jang. Now, with Yi dead, Jang seems to have no serious rivals left. The recent assembly session also appointed a new head of the North Korean cabinet. In North Korea, the prime minister is essentially a top technocrat, but it is still significant that this position went to Choe Yong-rim, who is rumored to be close to Jang.

Jang’s position remains precarious: Kim Jong-il is still the supreme leader, and in North Korea even blood connections with the highest family do not always secure a person from august wrath. In the past, family members have been exiled a number of times, and in one case a young relative of the Dear Leader was assassinated in Seoul, where he had defected. A few years ago, Jang Song-taek disappeared from public sight for a year, and he is widely believed to have spent this time in exile.

At any rate, the North Korean elite – with at least tacit approval of Kim Jong-il – began to work on the architecture of a post-Kim Jong-il regime. It seems that the future power structure will consist of Kim Jong-un, a much extolled Star of Revolution and Shining Comrade (or whichever flowery titles they will invent) who will essentially be a powerless puppet while real authority will dwell with a council of technocrats and generals presided over by Jang Song-taek. In all probability, it means that the death of Kim Jong-il will not bring about much change: for a while the country will be steered by the same people who have been running it for the past two or three decades.

However, power transitions do not always go as intended. To start with, Kim Jong-un’s personality cult is still in its infancy, and it will take few years to develop it to the usual North Korean levels. We are yet to see pages of all newspapers filled with countless stories of the “Young General’s benevolence”. However, before the personality cult is developed enough, not only Kim Jong-un’s position but the entire system will remain insecure. We do not know whether Kim Jong-il and his old guard have enough time at their disposal: at the latest Supreme People’s Assembly session the Dear Leader did not look particularly well.

It is also possible that after Kim Jong-il’s death some cracks in the top leadership, now invisible, will lead to intense infighting and thus undermine the cohesion that is essential for the stability of the system.

And even if the transition goes smoothly enough, the resulting system will remain inherently unstable. Kim Jong-un might be young, inexperienced and compliant now, but he will get stronger and wiser, and in all probability will not be too happy about the control of the old dignitaries. Many young kings ended up challenging and removing their regents.

On the other hand, the likely members of the future regent council are quite old, with an average age of 75 or so, hence in a decade many of the present-day top dignitaries will be dead from natural causes (and, perhaps a car crash or two).

Finally, Jang Song-taek might be tempted into assuming all power for himself. Nasty things are known to have happened to young crown princes in the past – from food poisoning to riding incidents and, perhaps, even good old car crashes.

But, whatever happens, the first days of June saw the contours of post-Kim Jong-il North Korea emerge.

Read the full story below:
Son rising for a post Dear Leader era
Asia Times
Andrei Lankov
6/16/2010

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The effects of the DPRK’s currency revaluation

Thursday, June 10th, 2010

The New York Times published a lengthy article on the DPRK’s currency reform effort launched last year.  Excerpts below:

Like many North Koreans, the construction worker lived in penury. His state employer had not paid him for so long that he had forgotten his salary. Indeed, he paid his boss to be listed as a dummy worker so that he could leave his work site. Then he and his wife could scrape out a living selling small bags of detergent on the black market.

It hardly seemed that life could get worse. And then, one Saturday afternoon last November, his sister burst into his apartment in Chongjin with shocking news: the North Korean government had decided to drastically devalue the nation’s currency. The family’s life savings, about $1,560, had been reduced to about $30.

Last month the construction worker sat in a safe house in this bustling northern Chinese city, lamenting years of useless sacrifice. Vegetables for his parents, his wife’s asthma medicine, the navy track suit his 15-year-old daughter craved — all were forsworn on the theory that, even in North Korea, the future was worth saving for.

“Ai!” he exclaimed, cursing between sobs. “How we worked to save that money! Thinking about it makes me go crazy.”

North Koreans are used to struggle and heartbreak. But the Nov. 30 currency devaluation, apparently an attempt to prop up a foundering state-run economy, was for some the worst disaster since a famine that killed hundreds of thousands in the mid-1990s.

(more…)

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DPRK market price of grains stabilizing

Thursday, June 10th, 2010

According to the Daily NK:

rice-price-6-7-2010.jpg

Today, the North Korean markets seem to have returned to the days before the currency redenomination. The price of rice appears to be rather stable, especially when compared with that of February or March. Especially, following Kim Jong Il’s trip to China, rumors indicating that food would be imported began to circulate, and this has made declining prices even more marked.

According to inside sources, the price of rice in Hoiryeong, North Hamkyung Province is now 480 won per kilo (June 4th), 420 won in Sinuiju (June 7th), 360 won in Sunam-district of Pyongyang (June 2nd), and 380 won in Sariwon (June 7th). The price of corn is approximately 50% that of rice, although recently in Hwanghae Province, households using corn as feed for pigs drove an unusual situation where the corn price reached almost 70% that of rice.

The exact nature of Chinese support for North Korea cannot be confirmed officially, however, the North Korean regime’s encouraging foreign currency earning enterprises to import food from China since March seems to have contributed to rice price stabilization.

One inside source added that the “reactivation of food smuggling on the border between North Korea and China” has also helped.

However, the main overall reason for the failure of the initial prediction, “When the farm hardship period comes in May and June, food prices will skyrocket” appears to have been the normalization of the market.

The source commented, “Compared with the situation prior to the currency redenomination, trading in industrial goods has decreased slightly, however, it is close to its previous condition. Since buyers and sellers can access that market any time, price volatility is not that great anymore.”

That being said, the opening hours of the market have been reduced since the authorities handed down a “rice planting battle order” in early May which stated, “Everyone must participate in the rice planting battle. The market should only be used for the purchase of food, side dishes and those necessities required for the day.”

The source explained, “Markets everywhere now open between 2 and 4 P.M. and close at sunset,” adding that there are small differences depending on the particular market. In North Hamkyung Province, the market normally closes at sunset; however, markets in Hwanghae Province and Pyongan Province, which are under heavier pressure due to the rice planting, close earlier, at around 6 P.M.

But concerns about food will not be solved even if the price of rice remains stable. Merchants are still watching prices with a concerned look since rumors constantly assert that food prices will increase again in July. The North Hamkyung Provincial Party Committee held a cadres meeting last May in which it released news that food distribution for the months from July to October must be prepared by each unit individually, meaning that the central authorities have no plans to assist.

The agricultural situation is one concern. North Korea has been suffering from a severe fertilizer crisis since the beginning of spring farm preparations. After Kim Jong Il’s visit to China, Chinese fertilizer was imported which temporarily alleviated the situation, but the rumor is that fertilizer for the summer has yet to arrive.

Recently, Kim Jong Il visited a domestic fertilizer production facility, Namheung Youth Chemical Works in Anju City, South Pyongan Province. There, he complimented factory management, saying, “It is a relief to know that fertilizer is being produced in Namheung.” The incident displays North Korea’s concerns about fertilizer.

Other factors which destabilize food prices are the icy inter-Korean relationship and international community sanctions.

Recently, around the North Korean market, the number of street vendors, so-called ‘grasshoppers’ has greatly increased. One source explained, “This situation has been caused by the middle class being demoted to the lower classes due to the big damage they incurred during the currency redenomination.”

Sharply decreasing trade in higher priced goods like home appliances and furniture is derived from the same source.

The tumbling credibility of the North Korean currency is another ongoing worry, as is a lack of small denomination bills. One source explained, “If you purchase a 30,000 won jumper from Sungyo Market in Pyongyang, the cost is $30 (market exchange rate, the equivalent of 27,000 won on the day), but it is 30,000 won if you pay in North Korean currency.” That’s a ten percent mark-up for people using local currency, the material representation of a lack of trust in the won.

In areas of Pyongyang, Wonsan, Sariwon, and Haeju, dollars and then Euros are preferred over won, but in Jagang Province, Yangkang Province, and North Hamkyung Province, Yuan are preferable to dollars. Places where all four; U.S. dollars, Yuan, Euros and won are being used are Sinujiu and the port city of Nampo on the west coast. One source explained that due to this situation, high-priced products like televisions, DVD players and refrigerators are being sold only for U.S. dollars or Yuan.

Also, he added, “There is a shortage of small bills which is causing some inconveniences in market trading.”

At the time of the currency redenomination, North Korea displayed 7 kinds of small bills and coins; 1 chon, 5 chon, 10 chon, 50 chon, 1 won, 5 won, and 10 won. The source explained that demand for the ‘chon’ unit coins is practically non-existent; the problem is that 1 won, 5 won, and 10 won are frequently used in market trading but a shortage of bills is causing inconvenience. Merchants are setting the price of goods mostly in increments of 10 won and 50 won as a result.

Read the full story here:
Everything Is Stable, But for How Long?
Daily NK
Park In-ho
6-9-2010

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Political Life Launched by Chosun Children’s Union

Tuesday, June 8th, 2010

Daily NK
Min Cho Hee
6/7/2010

On June 6, 1946, the Chosun Children’s Union was founded. The Children’s Union, an organization for all children between seven and fourteen, is guided politically by the Science Education Department of the Central Committee of the Party.

Its hierarchical structure consists of a number of levels populated by students, including section committees of class and school, provincial and local school committees, and the national coalition of the Children’s Union. Within the structure, there is one head and two vice-heads of the Union in each school, one school committee member from each classroom, one head and two vice-heads of a section committee which exists within each class, and three to five committee members of each section committee.

The teacher who takes responsibility for the Children’s Union in a school is known as the Children’s Union Instructor, while the homeroom teacher of each class is generally also the section committee instructor. Based on the notion that a student’s political and organization life should be divided from his or her general school life, the teacher undertakes homeroom tasks and Children’s Union tasks under two different official positions.

Members of the Children’s Union must act according to the “regulations and obligations of the Chosun Children’s Union.” In order to “do good works,” part of the social activities of the Union, Union members make a “Kid’s Plan,” which specifies the kind and scale of the activities the member intends to carry out, be it collecting scrap iron, copper or paper, raising rabbits, participating in propaganda choirs or being a children’s watch guard (someone who monitors the activities of other students).

The symbols of the Children’s Union are the red scarf, like that of Young Pioneer organizations in other communist states, a badge showing a torch, and the greeting and slogan of the Union, “Let’s always be ready to become workers in the construction of socialism!” in long form, or, more pithily, “Always ready!”

Every student has to take part in one of three Union entrance ceremonies during their second year of elementary school.

The first entrance ceremony is held on Kim Jong Il’s birthday, February 16, the second on Kim Il Sung’s birthday on April 15, and the last one on June 6, the date of the organization’s founding. Model students who have a good family background can join the Union on Kim Jong Il’s birthday with his or her homeroom teacher’s recommendation, the next political class of students enter it on April 15 and the rest of students joint en masse on June 6th.

Entrance ceremonies are held regionally. First on the agenda at the ceremony is to recite the entrance oath; next, Union officials give badges and ties to new members; then the children shout the Union slogan with right arm aloft in salute.

The main concern of parents is the day of their child’s entrance ceremony. Students who are permitted to join on Kim Jong Il’s birthday have the best prospects, with a high possibility of becoming Union leaders of one kind or another. Activities within the Union are, of course, noted, so it is important to be successful from the beginning.

Therefore, the position of homeroom teacher of a second-year elementary class is desirable, since it allows the teacher access to bribes of money, clothes, rice and more from parents keen to see their child enter the Union on February 16.

Until the early 1990s, when the authorities stopped provided students with school uniforms, the red scarf was also provided by the state, but now, as with so much, it is the duty of parents.

Therefore, from February to June demand for the ubiquitous red scarf of the Children’s Union increases in North Korean markets. In the Sunam market in Chonjin, the red scarf of the Union sells for between 500 and 1200 won.

Yet even in the simple red scarf there is a symbol of inequality. Children from the upper classes have silk scarves manufactured in China, while the other students use cheap nylon versions or receive them from siblings.

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