North Korean Economy Watch

Daily NK
Park Young Nam
7/14/2007

Even in North Korea, there are special schools for the gifted and talented. In particular, talented students are selected for high schools and special education. The writer also attended a special high school while in North Korea.

I enrolled at an elementary school in `92. Since 3rd I was taught separately and received special education. Under the care of my class teacher, I studied math and nature subjects in detail until 6 o’clock at night.

After completing 4 years of elementary school, I was selected as a representative for Musan and entered Chongjin No.1 High School in April `96. No. 1 high schools are special schools for the talented and are located in Pyongyang and each province.

I arrived at Chongjin No. 1 High School to find many other students as bright as me. On top of that, these students all came from good backgrounds.

Undoubtedly, I was no different. My father worked for the People’s Committee and my mother was a doctor. At the time, my family lived an abundant life and had all the necessary electrical goods such as a TV and refrigerator.

High school days, shirking going to school

Unlike average high schools, we often missed classes and went on day trips. Again, punishment is severe at average high schools but we were not treated to harsh punishment because of our respectable backgrounds. Even if you were caught drinking alcohol on the streets and taken to the police, you were let go once you informed them that you attended “Chongjin No. 1 High School.”

Despite playing like this, I studied very hard at the end of each month in order to sit for the exams. I studied 10 days prior to each exam. During the summer, I could study a lot as the days are long, however in the winter, I couldn’t study because the sun set early and there was no electricity.

The winter was the worst as there was no central heating in the dormitories. Even if you wanted to cook rice, you couldn’t. The moment you placed a heater, which was made with twisted nicrome wire, in the socket and, the dismal light only became dimmer and if you put three of these wires into the wall socket the fuse went out. In the end, I became so frustrated that I shoved a spoon into the fuse socket only to find that it didn’t black out but operated fine.

Expelled for watching a video

That’s how I spent my days at school. Then things began to go wrong from about 4th grade.

In February `99, after I had begun 4th grade and sat for an entry exam for Pyongyang No. 1 High School. I sat for the test with the desire to go to a slightly better school but it ended in failure. At the time, I fell into misery and for a while I went around playing and my grades continued to drop.

In August `99, I went to visit a friend’s home who had come from Hoiryeong with 4 other mates. He had a TV and video player in his home. To be honest, the house had been under inspection by the National Security Agency because of this, but at the time, I didn’t even consider this. We watched three videos at that friend’s home.

I watched the old South Korean drama “Men from 8 Provinces,” and other American movies, “Titantic” and “Six Days, Seven Nights.”

I was alarmed after watching “Titantic” and “Six Days, Seven Nights.” The foreign movies were really enjoyable but what clearly remains in my memory is the thrill I had from simply watching the films. We watched the complete and unabridged version of Titanic, even the scene where the two main characters have an affair in the car. As part of the audience, I found this shocking.

While watching these characters traveling freely in the movie, I thought, why can’t we travel on boats like that and why can’t we play freely like that. It was inevitable that I felt culture shock.

However we were caught and were sent to the detention centre in early October. All 4 of my friends who watched the videos were also caught and we sat in the centre for about 10 days.

I wasn’t even sure what the crime was, but I had a feeling it was because we had watched foreign movies. Whether or not it was because we were young, we were let go after a few beatings with something like a broomstick.

After returning to school, there was no reason for us to be the centre of attention. We didn’t tell anyone where we had been but I think everyone generally knew. At the same time, my grades were really low and in the end I was expelled from school.

From expulsion until arriving in South Korea

Following that incident, I went to live with relatives in Pyongyang for 1 year.

I had a business in Pyongyang. When my mother brought clothes from China, I sold them in Pyongyang. With this money, I bought rice and then made profits by acting as an intermediary and selling the rice to Musan. Compared to Pyongyang, rice was expensive in Musan and as a result, I was able to reap in a lot of profits.

However, I couldn’t continue to do this. I felt bad living with my relatives. In the end, I returned to my home in Musan.

Having returned to Musan, I began to associate with children from the wealthy class and one day heard that they traveled in and out of China and in 2001, I crossed over to China in search of a better life.

I crossed the borders, not because I was hungry or because I was in danger. I was merely worried about my uncertain future and found living in North Korea suffocating. I yearned for a more abundant life.

Currently, I am preparing to enroll at POSTECH. However, for the 5 years since my expulsion, I have not had any opportunity to study while traveling from Pyongyang to China, then Korea. Re-starting my studies is not easy. The time I lost while defecting is such a shame.

Studying is something I had forgotten for a long time. I must acclimatize myself to an education system very different to that of North Korea. Nonetheless, I believe I will be able to do well if I try very hard.

Asia Times
Andrei Lankov
7/13/2007

Over the past couple of weeks, the small community of Seoul-based Pyongyang watchers was busy discussing a minor professional sensation. The Wolgan Chungang monthly, widely known for its good insights on all things North Korean, published a lengthy transcript of a speech, allegedly delivered last December, by a high-level Central Committee official. He was obviously talking to a group of prominent academics and engineers. The official’s name is cited as Chang Yong-sun, but he seems to be a complete unknown to the North Korea experts.

The authenticity of the transcript cannot be proved beyond doubt, but the Seoul expert community tends to believe that this tape was indeed secretly recorded somewhere in Pyongyang a few months ago and then smuggled to the South.

Being a former Soviet citizen, this author is inclined to believe this view as well. The tape rings true. This is how a high-level official would talk when lecturing lower layers of elite on the current situation, and such regular lectures were typical for many communist countries.

The semi-privileged met the bigwigs to get instructions on recent events, as well as some alleged insiders’ stories and anecdotes. The semi-privileged cadres felt themselves partaking in the enigmatic world of grand politics, and also learned something about the new trends in their leadership’s thinking about the world.

Most people who deal with “Chang’s lecture” concentrate on those parts of the lengthy presentation that deal with US-North Korea relations and the six-party talks on nuclear disarmament. Indeed, such issues are treated at great length by this document. Many others pay attention to rather unfavorable depictions of the Chinese or outbursts of threats against Japan.

However, I believe that there are more important things in the transcript than merely a North Korean version of what happened during former assistant secretary of state James Kelly’s visit to Pyongyang or during the first rounds of the six-party talks. The tape allows us to have one more glimpse at the world view held by the North Korean elite or, at least, by its lower reaches.

What are the features of the world as seen from Pyongyang? First of all, the significance of North Korea is blown out of all proportion. Somebody would describe this as Pyongyang megalomania, but perhaps author Bruce Cummings found a better term when he talked about “North Korean solipsism”, an assumption that North Korea lies at the center of the world, and that the world itself surely must be aware of this.

The North Korean press now tells its readers that the major international conflict of the modern world is the ongoing struggle between US imperialism and heroic North Korea. Chang Yong-sun even told his audience that the development of North Korean missiles has produced a serious impact on the public-health issues in the US: “Nobody can intercept our missiles now. All the people in the US are aware of this.

“This is why all the people in the United States are completely allergic to missiles of our republic. Once they learn that we test-fired missiles, they become so worried about the rockets changing their directions and exploding over them and killing them, so they develop nervous diseases and nettle rash breaks out all over their bodies. This is what is happening in the United States.”

One should not feel too sorry about the bastards, however. According to the official North Korean world view, once again reiterated by Comrade Chang, the US is responsible for everything that goes badly in Korea, and the constant military threat from the warmongering Washington is the major fact of North Korean life.

The audience was reminded that in 1950 it was the Americans who attacked North Korea, bringing death and destruction to the country (this official version of 1950 events seems to be almost universally believed by North Koreans). This great crime of 1950 has not been avenged yet, Comrade Chang reminded his listeners.

Many people in the US want to believe that such hostility stemmed from President George W Bush’s policies, but Comrade Chang reminded his audience a number of times that there is no real difference between the Republicans and Democrats: both US parties are pathologically hostile to the Country of the Beloved General. The differences between them are of a purely tactical nature, Chang Yong-sun told his audience. He said Republicans rely more on brute force, while Democrats are more canny and more willing to use ideological subversion and economic pressures.

Chang Yong-sun repeated a number of times that the major threat from the US is not that of a sudden military attack. The imperialists are not that simplistic: these days their major weapon is internal subversion. He said: “Although it appears as if the Americans do good things to us, their real nature has not changed at all. Their primary objective is, from start to finish, to undermine us from within and melt us down by disarming us ideologically.”

Chang Yong-sun repeated the message that has been delivered countless times by North Korean leaders big and small: the ideological threat of the outside world constitutes a greater danger than all imaginable military threats. He alleged that the foreign enemies have designed some grand plan of subversion. Chang said specially designated think-tanks work on this issue day and night. If his fantasies are to be believed, one of such centers is somewhere in Washington and employs no fewer than 370 retired generals whose only job is to find ways to undermine North Korea from within.

Being an enthusiastic supporter of soft power, the present author knows perfectly well that there is no coordinated plan of applying soft pressure on Pyongyang. The amount of money and efforts spent on broadcasts aimed at North Korea, on support of refugee groups and other similar activities, is ridiculously small. It is a dream to have a US research center specifically dealing with North Korean issues and stuffed with even, say, five post-doctoral candidates (let alone with 370 ex-generals).

But this raises a question: If this the case, why do Pyongyang politicians keep repeating similar statements? Why do they refer to a non-existent threat? Perhaps because they know what they should be really afraid of. They know only too well how potentially precarious against such a challenge their position is, and they probably cannot even believe that their adversaries fail to appreciate the major vulnerability of Pyongyang and do nothing to exploit the related opportunities. Comrade Chang would be really surprised to learn how weak and disorganized are actual efforts of the “class enemies” in the area that he (perhaps correctly) considers decisive.

Some twists of Pyongyang’s official mindset might come as a surprise to many readers. For example, Comrade Chang found a source of great pride in the North Korean penchant for secrecy. He used one peculiar example to explain why this secretiveness is great. According to him, the Americans defeated the Iraqis because they imitated the voice of Saddam Hussein and then sent fake orders to Iraqi troops in his name.

However, as he proudly reminded everyone, Marshal Kim Jong-il had spoken in public only once, so Americans will never find enough material for their perfidious schemes. The entire secrecy is necessary to keep foreigners at a disadvantage: “A long time ago, the Great General taught us to make sure that our internal things appears to be hazy as if covered by fog when the Americans spy on us. So we have made sure that internal things of our country appear really hazy as if in a fog when our country was viewed from outside.”

It is remarkable that the country’s economic woes are explained in a novel way, which was made possible by the nuclear test. Until 2006, North Koreans were supposed to believe that the only reasons for the recent famine were huge floods that “might happen only once a century”. Now it is admitted that the government needed money for missile and nuclear development, and hence had no other choice but to sacrifice some people to save the nation.

Chang Yong-sun said: “To be frank with you, even if one sells 50 plants as large as Kim Ch’aek Steel Mill, the money is not enough to develop a missile. During the ‘arduous march’ [Pyongyang-speak for the famine of the late 1990s], if there [was] a bit of money, it had to be spent on developing missiles, even though the generals knew that factories did not work and people were starving. This is why we have survived, and were not eaten up by those bastards. Had it not been like this, the bastards would have eaten us a long time ago.”

This line of argument is psychologically more powerful than the earlier version. Nowadays, people’s suffering can be presented not as the result of some blind misfortune caused by nature, but as a part of heroic sacrifice. People died because their country was at war and needed everything to save itself from complete destruction by the brutal enemy. Their deaths were those of heroes.

Such a change of tune is indeed typical of North Korean propaganda during the past few months. However, it might have some political consequences. This propaganda line makes it more difficult to surrender nuclear weapons even if such a notion will ever be seriously entertained by Pyongyang. If North Korea chooses to give up its nuclear arsenal, these sacrifices will be rendered meaningless.

Another propaganda line is that now people should expect a certain improvement of their lot, since the major work has been done: “Now we have conducted a nuclear test and other things, so we have to improve the people’s living standards by concentrating on economic construction.”

Still, Comrade Chang does not want his audience to entertain an excessively optimistic picture of their country’s future. Improvement will be minor and, as one might guess from some other parts of the speech, is likely to be limited to, say, complete reintroduction of Kim Il-sung-era consumer standards, which were not exactly luxurious (550 grams or cereal a day, plus a few pieces of meat on special occasions, four or five times a year).

Chang Yong-sun explained that North Korean industry is surely capable of producing quality consumption goods but cannot do it, because the ever present threat of an imperialist attack deems austerity and sacrifices necessary. He also made clear that his listeners should not await serious improvement of their lot any time soon.

The statement resonates very well with what another life-long analyst of North Korean propaganda, Tatiana Gabroussenko, wrote recently: unlike earlier eras when masses were extolled to make sacrifices for the sake of some identifiable future, nowadays North Korean leaders tell their people that no significant improvement is in sight. Comrade Chang even made a joke of this: “Since the end of the Korean War, we have lived with our belts tightened … One thing I can assure you: we’ll have to live with our belts tightened until the day our country is unified. If we do not have any more holes in our belts, let us make them.”

However, the audience was reminded that in the final count it is again the foreign forces who are to be blamed for these hardships. To quote Comrade Chang once again: “It is not because we do not know how to live better that we are not well off. Who is responsible for this? The US imperialists are responsible for this. That is why we call the US imperialists our mortal enemy with whom we cannot live under the same sky!”

Most of the speech consisted of US-bashing and Japan-bashing, but what about South Korea? Here Comrade Chang used the new tactics that have become typical for North Korean propagandists since the 2002 inter-Korea summit. Brian Myers, another remarkable specialist on North Korean culture and propaganda (not quite distinguishable areas, actually), recently wrote at length about a change of tune in Pyongyang propaganda: South Korea ceased to be depicted as the living hell, the land of depravation. The new image of the South is that of the country whose population secretly (or even not so secretly) longs to join its Northern brethren in their happiness under the wise care of the Beloved General.

This society might be relatively affluent, but it is inherently corrupt and lacks integrity, so its population knows that the only way to regain the moral purity is to join the spiritually superior North Korean civilization. The only force that prevents the South from achieving such happiness is the brutal US occupation army and a tiny handful of traitors on the Central Intelligence Agency payroll, but even those perverts are losing control over South Korean society.

Sometimes Chang’s fantasies went positively wild. He said, for example: “A portrait of the General is [respectfully] placed on the wall of the Main Hall on the fourth floor at the [Seoul] Government Building. Right now!” Then the flight of fantasy goes even further: “These days, South Korean publications do not sell in South Korean society if they do not carry the images of the General … 45% of the entire population in South Korea say that in case of a war they will fight on the side of the General.”

The domestic situation did not attract much of Chang Yong-sun’s attention, but he still made some comments on these issues. He admitted that even last December, in spite of all the government’s efforts, it was impossible to provide rations for the entire population, and that most people had to rely on the market for their needs, which is not good but was unavoidable.

He also explicitly stated that growth of the markets is not compatible with the socialist system: “All the people’s talk is money and again money. Is this socialism?” It is remarkable, however, that the virtues of socialism were seldom mentioned in the speech: its rhetoric was overwhelmingly nationalistic.

Chang Yong-sun also admitted that some North Koreans are very rich, and that their fortunes are now measured as a few hundred million North Korean won (100 million won is roughly equivalent to US$50,000). He did not make a secret that under less critical conditions the government would strike these reactionary elements hard, but under the current circumstances such a radical solution is impossible because of ongoing economic difficulties.

In essence, he admitted that government is not capable of controlling society as tightly as it wishes (or as it used to in the good old days of Kim Il-sung’s ultra-Stalinist rule): “Those ideological perverts are no longer counted as our people. Why are we not able to strike [them]? We are not able to strike them because we are not able to provide rations to the entire population.”

So the picture is quite clear. North Korea as depicted by Comrade Chang is a small but proud state that lives under the constant threat of annihilation by brutal enemies, betrayed by money-hungry allies. It fights for a great goal of national unification. There are signs that this goal is getting nearer, but people should not expect too much: life will not become easy any time soon.

Compromise with enemies is impossible since they, especially the Americans, will never change their nature, will never stop dreaming about destroying the small and proud republic led by the Beloved General. However, the country has finally developed military means that make all enemies’ schemes powerless. This project required great sacrifice, but the people who died during famine were in essence soldiers: their deaths saved many more lives.

There are internal problems in this society, largely because the government lacks resources to make sure things move smoothly (and it is assumed that government should be ultimately responsible for everything). However, these problems should not distort the larger view of ongoing heroic struggle and new victories.

Dr Andrei Lankov is an associate professor in Kookmin University, Seoul, and adjunct research fellow at the Research School of Pacifica and Asian Studies, Australian National University. He graduated from Leningrad State University with a PhD in Far Eastern history and China, with emphasis on Korea. He has published books and articles on Korea and North Asia.

Korea Herald
7/12/2007

North Korea has ordered the closure of karaoke bars in an apparent attempt to stem outside influences on the isolated communist country, AP reported, quoting a South Korean civic group as saying Wednesday.

Separately, the North’s Ministry of People’s Security conducted house-to-house overnight inspections in areas near the border with China earlier this month to search for cell phones and illegal video CDs, the Good Friends aid agency said in a newsletter, according to the report.

It reported that the ministry said in a directive last week that the move against karaoke outlets was a ”mopping-up operation to prevent the ideological and cultural permeation of anti-socialism,” according to the aid group.

Violators were warned they would face punishment, including deportation to other regions within North Korea.

The group did not say how it obtained the information. Its previous reports on the North’s isolated regime have been reliable.

It was not clear how many karaoke bars the country has.

AP said officials at South Korea’s top spy agency, the National Intelligence Service, were not immediately available for comment.

NY Times
CHOE SANG-HUN
7/13/2007

A South Korean ship loaded with 6,200 tons of heavy fuel oil left for North Korea on Thursday under an agreement intended to end the North’s nuclear program.

The United Nations’ chief nuclear inspector said the North was expected to begin shutting down its main nuclear facilities early next week, after four and a half years of operation, during which time enough plutonium was thought to have been produced to make several atomic bombs.

The ship is expected to arrive at Sonbong, a port in northeastern North Korea, on Saturday, the same day a team of inspectors from the United Nations International Atomic Energy Agency is scheduled to arrive in the North to monitor and verify the shutdown.

Mohamed ElBaradei, the director general of the atomic agency, told reporters in Seoul that shutting down five nuclear facilities in Yongbyon, 62 miles north of Pyongyang, the capital, would not be difficult and should be completed “within maybe a month or so.” His agency and North Korea have already agreed on the procedures.

The shutdown would be significant because it would halt the North’s only declared program for producing fuel that can be used in nuclear weapons. The five facilities to be frozen in Yongbyon, including the country’s sole operating nuclear reactor and a radiochemical laboratory, can yield more than 13 pounds of plutonium a year, enough for one atomic bomb, according to experts.

But the steps to be taken after the initial freeze of the nuclear program remain “very much open questions,” Dr. ElBaradei said. Those include whether North Korea will provide the agency with a complete inventory of its nuclear materials, and when it might return to the Nuclear Nonproliferation Treaty.

“It’s going to be a very long process,” he said. “It’s going to be a complicated process. How smoothly the rest of the operation will go very much depends on how progress will be made in six-party talks.”

Chief envoys to the six-nation nuclear talks will meet in Beijing next Wednesday and Thursday, the Chinese Foreign Ministry said. The envoys, gathering for the first talks since March, were expected to discuss moves beyond the reactor shutdown.

North Korea agreed to shut down its Yongbyon facilities in a February agreement with the United States, South Korea, China, Russia and Japan. The deal called for shipping 50,000 tons of fuel oil to North Korea, and South Korea volunteered.

It plans to complete shipping the oil by early August, starting with the installment on Thursday.

North Korea indicated last week that it would undertake the long-delayed shutdown after the first shipment arrived.

When United Nations inspectors return to Yongbyon, they will face the same problems they had faced there before they were expelled in late 2002. They will put in seals, install cameras and leave monitors to ensure that the facilities remain shut. But they will not be allowed to collect samples or access North Korean data, much less travel around the country, to determine how much nuclear material North Korea has produced in Yongbyon or elsewhere.

The five-megawatt reactor in Yongbyon began operating in the mid-1980s. When suspicions about North Korea’s nuclear activities emerged in the early 1990s, a key dispute was how much plutonium had been produced at Yongbyon until then — 90 grams, about 3 ounces, as North Korea reported to the I.A.E.A., or up to 10 kilograms, about 22 pounds, as the agency suspected.

The dispute has never been resolved, although North Korea agreed to suspend operations at Yongbyon in an agreement with the United States in 1994. The accord collapsed in late 2002, when North Korea expelled the United Nations inspectors and restarted the Yongbyon operation.

North Korea has since claimed to have taken spent fuel unloaded from the reactor and reprocessed it into plutonium. Last October, it conducted its first nuclear test.

“It remains an unanswered question: how much plutonium has North Korea so far produced?” said Lee Un-chul, a nuclear scientist at Seoul National University. “North Korea won’t easily give up its operational data.”

Daily NK
Kim Young Jin
7/12/2007

The North Korean jangmadang’s (market) rice price has narrowly increased after the spring shortage season.

As a result of DailyNK’s investigation of price levels in Northern cities of North Korea at the end of June and beginning of July, the price of North Korean rice is 900 won per kilogram which has increased 80 won compared to its price at the end of March.

At the jangmadang in Shinuiju, North Pyongan, the price of rice, compared to three months ago, has been sold at a 120 won higher price at 980 won. North Korea’s spring shortage season is around March to May before the barley harvest, after the passage of spring.

The reason why the price of rice has shown a narrow upward tendency of 100 won domestically is that along with the effects of the spring shortage season, the nationwide “farm supporting combat” was implemented last May. During the farm supporting period, the jangmadang was closed out, so it became difficult to obtain rice.

Further, with the delay in South Korea’s support of 40,000 tons of rice to North Korea, the increase in the price of rice seems to have been fueled. The price of South Korean rice, compared to the end of March, increased over 150 won. South Korean rice was sold at the increased price of 1,100 in the Shinuiju region.

Along with the increase in the price of rice, the exchange rate seems to show a slight increase as well. In Hoiryeong, it increased by 50 won, compared to the end of March, according to the basis of 3,100 won per dollar. The Chinese Yuan was sold at a 390 won line, having increased 20 won.

Besides this, the staple of North Korea’s lower-class, corn, compared to the end of March, increased by approximately 80 won to 450 won per kilogram. With the rise in the price of rice, the demand for corn as a substitute ration seems to have increased as a result. Frozen pollack, which cost 4,000 won per one, went down to 3,500 won.

Chinese-made shoes, compared to March, is being sold for 7,000 won per pair, having decreased around 5,000 won. In addition, the price of Chinese industrial products as a whole is showing a decline.

Due to North Korean merchants who received goods through Korean-Chinese peddlers in the past going over to China themselves and obtaining goods through dumping, the drop in prices has been continuing.

Pork (2,300 won per kg) or cabbage (300 won per kg) and the price of other vegetables, compared to the end of March, declined by 200 won. In the case of fruits, the price of apples skyrocketed by 1,400 won from three months ago to 2,900 won per kilogram.

Also, among North Korean cigarettes, a product with the brand “Dog” recently surfaced. The price is the same as “Sunbong” at 1,000 won. The representative foreign brand “Craven (called ‘Cat’ in North Korea)” narrowly declined to 1,300 won.

Cost of DPRK grains up as lean season continues
Institute for Far Eastern Studies (IFES)
NK Brief No. 07-7-16-1
7/16/007

The results of a general survey of market prices in the northern region of North Korea carried out by the “Daily NK” show that grain prices continue to rise. The survey, taken from the end of June to the beginning of July, showed that the price per kilogram of domestic rice was 900 Won, 80 Won higher than at the end of March. Sinuiju market prices have risen 120 Won over the last three months, with rice now selling for 980 Won per kilogram.

The ‘lean season’ in North Korea runs from the spring and lasts 3 to 5 months into the summer until barley crops are ready for harvesting. The rise in rice costs by around 100 Won appears to be due to a combination of factors, one being the influence of the lean season, and another being the mobilization of city residents to farming communities to help with harvesting. During harvesting season, markets are closed as workers are sent to the fields, making it difficult to purchase rice. In addition, the decision by Seoul to delay delivery of 400 thousand tons of aid has further aggravated the situation. The price of South Korean rice in the North has also risen, up 150 Won since March in some areas, and up as much as 250 Won in Sinuiju, where a kilogram of ROK rice sells for 1,100.

The rising cost of rice is fueling demand for substitute grains, causing their prices to rise as well. Corn, a staple food for low-income DPRK families, has risen 80 Won since March, to now sell for 450 Won per kilogram. In addition to rising grain prices, currency exchange rates also appear to be on the rise. In the city of Hyeryung, one USD is worth 3,100 Won, 50 Won more than in March. The Chinese Yuan has risen 20 Won, and now trades for 390 Won.

On the other hand, the prices of some goods in the markets are falling. In particular, Chinese goods are becoming more available, thus lowering costs. Chinese shoes have fallen to 7,000 Won, 5,000 Won less than the price in March. Previously, goods were brought into the country only through Chinese-Korean cross-border traders, but now North Korean vendors have direct access to Chinese goods being ‘dumped’ in the North, causing their prices to continue to decline.

Daily NK
Yang Jung A
7/9/2007

A North Korean insider source said on the 5th that the North Korean government sold the fishery licenses of coastal waters at Chulsan, North Pyongan during the crab catching season between May and July for a moderate price.

Chinese marine traders who bought the fishery licenses from North Korea are large marine companies based on Donggang in Lianoning.

The ship-owners and fishermen of North Korea, due to a huge decline in fishes with the Chinese ships’ competitive entry into Chulsan’s offshore waters after receiving the North Korean government’s fishery licenses, are supposed to be going through a hard time.

The source said, “Recently, with the exclusion of the neighboring sea off the coast of Chulsan near the People’s Army’s marine head where the fish farms are located, the fishery licenses to the offshore of the Chulsan-Donggang (China) have been sold to Chinese businessmen. Tens of Chinese fishermen have bought the rights.”

The source said, “The organization in charge who has issued the fishery licenses is not the marine products association, but the No. 64 naval squadron in charge of the this region’s seashore boundary.

Donggang in Liaoning in China located in the mouth of Yalu River, is a small-size city across from Bidan Island.

He said, regarding the price of the fishery licenses, “A small boat is 1,000 Yuan (US$133) per day and a large boat which can accumulate over 100 ton is around 7,000 Yuan (US$ 922) in Chinese currency.”

He added, “The rumors say besides the costs of the licenses, a lot of money has been handed over to North Korea in the negotiations process.”

“Due to monopolizing of the Chinese fishing boats, North Korea’s ships anchored at decks of Donggang are barely seen. North Korean businessmen who have smuggled marine products using small-size boats are having a difficult time because they cannot go out to sea where the current is rough and a lot of gas is required.”

North Korea’s fishermen are saying they have no choice but to go out to the far sea, because they cannot go near the oceanic region operated by Chinese ships.

The source also said, “Chinese ships surreptitiously attacking North Korean ships in their permitted region and beating people have been occurring frequently.”

The Korea Martime Institute, in a report which was announced early this year, said, “The C
hinese government is promoting advancement of North Korea’s operations when the complaints of the country’s fishermen climaxed due to the reduction of ships in the Yungeun Sea and the decline in their income.”

On one hand, besides the oceanic operation rights, the situation is that China’s direct investment in North Korea’s resource development, such as the mining rights being handed over to China, is increasing.

China, instead of investing 70 hundred million Yuan at Musan Mine in 2005, is exercising its 50-year mining licenses to take 10bn tons of iron ore annually.

Korea Herald
7/10/2007

An increasing number of foreigners have visited an inter-Korean industrial complex in the North Korean border city of Gaeseong this year as the North’s relations with foreign countries thaw after the communist state took steps to denuclearize, Yonhap News Agency reported.

In the first half of this year, 324 foreigners, including ambassadors and potential investors, toured the capitalist enclave where South Korean businesses use low-cost, skilled North Korean workers to produce goods, according to government data released Tuesday.

“The Gaeseong industrial complex combines the South’s capital and technology with the North’s labor and land to show foreigners the future of the Korean Peninsula,” a Unification Ministry official said.

Only five foreigners visited the complex in 2005 when the North first permitted foreign visits. In the first half of last year, the number increased to 295, but it dwindled to 104 in the second half as North Korea conducted missile and nuclear weapons tests.

The industrial complex, the crowning achievement of a landmark summit between the leaders of the two Koreas in 2000, is one of two major cross-border projects that South Korea has kept afloat in spite of United Nations sanctions against the the North following its nuclear weapons test in October. The two Koreas also run a joint tourism project at the North’s scenic Mount Geumgang on the east coast.

N. Korea Refuses to Accept Visitors
Korea Times
Jung Sung-ki
7/10/2007

South Korea’s Unification Ministry said Tuesday that the operation of the inter-Korean industrial complex in North Korea’s border city of Gaeseong will be not affected by Pyongyang’s abrupt cancellation of scheduled events for South Korean visitors this week.

On Monday, North Korea asked South Korea to postpone South Koreans’ visits to the economic zone without specifying any reasons, ministry officials said.

Some local media reported various speculations about the North’s ulterior motive. The DongA Ilbo newspaper said North Korean leader Kim Jong-il could visit Gaeseong and that might be a reason for the cancellation.

“The North didn’t specify reasons, but company executives and workers in Gaeseong are commuting to the complex freely as usual,’’ ministry spokesman Kim Nam-sik told reporters.

About 100 South Korean government officials and journalists were scheduled to visit the business compound Tuesday, followed by visits by hundreds of South Korean business officials on Wednesday and Thursday.

The Gaeseong complex, just north of the heavily fortified Korean border, is considered one of the main achievements of the landmark inter-Korean summit in 2000. The zone is called a testing ground for mixing South Korean capitalism and technology with the North’ cheap labor.

Twenty three South Korean firms produce goods ranging from clothes to kitchenware there, employing about 15,000 North Korean workers. The number of North Korean employees is expected to increase to more than 350,000 when the complex becomes fully operational by 2012, officials said.

Monthly production in the complex exceeds $10 million.

The inter-Korean economic zone has gained attention from foreign countries with the number of foreign tourists steadily increasing, according to the ministry.

Korea Times
Ryu Jin
7/6/2007

A campground in the Mt. Geumgang resort complex in North Korea will be open again for the hot summer season from July 10 to Aug. 25, according to Hyundai Asan, the South Korean operator of the tour program.

Visitors can spend two nights and three days on the Geumgang-san Beach in the scenic resort area at 180,000 won ($195) for an adult, which includes breakfasts and trips to the mountain area.

Seated at the lower edges of the mountain, the sandy beach stretches some 1.2 kilometers along the East Coast and can accommodate various sizes of tents for a combined number of about 250 to 300 campers per night.

Groups of visitors can sit around a campfire in the night after enjoying various daytime water activities such as motorboat, jet-sking and rock-climbing with additional fees. A pass for all the aquatic rides cost $25 per adult ($20 for a group of more than 30).

Mt. Geumgang, which has long held both aesthetic and spiritual allure for Koreans, can be divided into three parts: Naegeumgang (inner, western part), Oegeumgang (outer, eastern part) and Haegeumgang (seashore part).

Since the first tour to Mt. Geumgang in 1998, a growing number of visitors have made the trip from the South to the resort area. Hyundai Asan said the cumulative number of tourists exceeded 1.5 million in early June, after it began the new Naegeumgang tour.

The Geumgang-san Beach was open to South Korean visitors from 2002 and the campground has been available since 2005. Last year, however, it didn’t draw many visitors from the South due to the rainy spell as well as the political situation in the aftermath of North Korea’s missile tests.

“We expect a larger number of visitors would go camping in the Mt. Geumgang resort complex this year since inter-Korean ties are relatively good,’’ a Hyundai Asan spokesman said.

But he added cooking would be banned in the campground this year. “Campers were able to use portable burners for instant noodles last year,’’ he said. “However, cooking won’t be allowed this year for environmental and safety reasons. Visitors can use restaurants for lunch and dinner.’’

Usual prices for Mt. Geumgang are set from 420,000 won to 450,000 won including two nights hotel stay. But those for the camping tour are relatively lower though it also includes climbing the mountain.

Daily NK
Kim Song A
7/5/2007

“In North Korea, the up and coming wealthy class is increasing with each day. They will try to preserve the military regime to keep their property.”

A Russian expert analyzed that while a majority of North Korean citizens are barely sustaining their livelihoods and are suffering from extremely grim realities of life, the rich who are eating and living well are consistently rising and will become the main foundation for the maintenance of North Korea’s military-first ideology and political power.

Sergey Kurbanov, a Korean Studies Research Head at Russia’s University of Petersburg, participated in a seminar held by Seoul University’s Reunification Research Institute on the 4th. “In North Korea, in the minds of “socialist capitalists” which is what the up and coming wealthy class are called, socialist ideology already does not exist.”

Kurbanov pointed out the reality of their living situation, “I have seen students going to China from North Korea and as soon as they arrive in China, they take off their red tie. When they return to the North, they do not even touch the in-flight meals, saying they are no good.”

The newly rising wealthy class who have amassed their money from North Korea’s and China’s trade, etc., despite the fact their confidence in political power has already dissipated, resist regime change because their gains from the Kim Jong Il regime is significant.”

Kurbanov said related to North Korea’s plan for a successor, “As Kim Il Sung remains an eternal Leader, Kim Jong Il will also remain as an eternal general. Even if there is no successor, they will ensure that the regime will work well.”

He said, “Whether it is Kim Jong Il’s son or somebody else is not important. To whomever Kim Jong Il hands the rights of a successor, that power cannot surpass Kim Il Sung nor Kim Jong Il.”

On one hand, Kurbanov upheld regarding North Korea’s military politics, “Historically, this has risen due to the threat received from the Han and Tang Dynasties in China,” and the reign of the military was for the protection of the regime.

He said, “The reason why North Korea has stressed “sovereignty and the juche” is that historically, their mentality of fear is strong regarding threat from the outside. In order to prevent this, the individual, no matter what kind of a difficulty he is going through, can make a sacrifice.”

From such a perspective, he stipulated, “North Korea is not socialist, but a traditional society wearing socialist clothing.”

He emphasized, “Kim Jong Il received the seat of power as a military leader and the Military-first politics is the background for which Kim Jong Il is legally a North Korean leader.”

Daily NK
Kim Min Se
7/5/2007

A counselor of Korean Association against Drug Abuse, Lee Mee Young said, “Drugs are a snare of destruction which give huge suffering to addicts themselves, families, relatives, and neighbors.”

Such drug addicts are rapidly increasing in North Korea. Misuse of drugs with the spread to average civilians as well as the newly rich upper class has become very serious.

Situation #1. Handle drugs due to stress.

Hong Mun Hwa (pseudonym), who became wealthy all of a sudden by acquiring a large sum of money from North and Chinese trade in Chongjin, was a man who was faithful to his family. Three years ago, Mr. Hong started backsliding when he put his hands on Philopon (called “ice” in North Korea).

Jung Myung Ki (pseudonym), brother-in-law of Mr. Hong, said, “Ever since he started touching drugs, his business also became ruined. Mr. Hong was not able to keep appointments and his eye for business became totally went downhill. He turned into a stupid person.”

The story Mr. Jung revealed was this.

“I realized that my brother-in-law was addicted to drugs when I rode together with him a year ago from Chongjin to Shinuiju. Of course, I knew that most people who have money do drugs, but I was frankly quite surprised that a good person such as my brother-in-law became addicted. He ultimately died from a heart attack due to drugs. I even hid the fact from his wife that he was addicted to drugs until after his death.”

However, Mr. Hong, who started drugs at his first try, was gradually dissatisfied with Philopon alone, so started trying “pills” (heroine). According to Mr. Jung, Mr. Hong, in the course of the trade car ride from Chongjin to Shinujui, took Philopon at 5~8 hour increments.

Mr. Hong died from heart attack at the beginning of June in Shinujui, saying, “I will try to make up for lost sleep” and took a large quantity of “pills.”

Situation #2: Taking drugs in private steam baths…even prostitution

The evil influence of drugs in Hamheung, relayed by North Korean civilian Kim Myung Gil (pseudonym), who came to China from Hamheung to visit relatives, is even more shocking. Hamheung is the mass production center of Philopon.

Mr. Kim said, “People who are selling Philopon by trade and are making a living is increasing in Hamheung. The mother of a middle school classmate sold Philopon and even though she initially earned money, the mother and my friend both became addicted later. Not only my peer, but there are many cases where families had to scatter and sell their houses due to drug addiction.”

According to Mr. Kim, the steam bath business is currently booming in Hamheung.

In the steam bath, electricity comes on for 24 hours. Electricity is transferred via a power cable which is connected by giving a bribe to the power distribution plant. Mostly, there are private baths or rooms in the steam baths, and inhalation and prostitution are supposed to take place here. If one gives money to the steam bath operators, then they provide Philopon and even bring a female prostitute.

He said, “One does not have to show his or her citizen card when entering the steam bath and do not need to leave their names, so it is an ideal place for delinquent men and women to do drugs.”

The inspection unit haphazardly handles situation while taking bribes…decrees repeat, “Absolutely Executions”

The current North Korean government has not come up with a way regarding the civilians’ drug sales and taking dosages. Occasionally, the Party issues the decree and inspection unit to prevent drug sales and usage, but they have not been able to exterminate drug deals.

Mr. Kim said, “The Party issued the order last year to capture drug offenders and carry into execution, but even they sweep matters under the table upon receiving bribes.”

He added, “If inspection occurs because drug smugglers earn such a significant amount of money, then the dealers give 3,000~5,000 dollars worth of money at one time. Even if inspection units have come down from the Party, people are easily won over if they receive such a large sum of money.”

Kim Jung Ae (pseudony), Korean-Chinese businesswoman who goes to Pyongyang and Shinuijui often said North Korea’s drug offense regulations cannot be known.”

Mr. Kim said, “In China, a rule exists which decrees drug sales or possessions over 20g to be punishable by death. However, North Korea does not seem to have a regulation about the exact number of grams of possessions or sales which are punishable.”

He explained, “In order to control drugs, punishment has to differ for one-time usage, two-time usage and above, and the amount of grams of possessions or sales. However, because North Korea repeats every time it announces a decree, “A person who makes or sells drugs is punishable by death,” “we cannot kill all drug takers and proper regulation cannot even be carried out.”

Mr. Kim lamented, “If detailed laws regarding the North Korean government’s strong will for regulation is not made, the evil influence of the citizens’ drug use cannot help but to increase at a fast speed.”