Archive for the ‘Economic reform’ Category

No Changes to the Cost of Rice And Corn at Jangmadang

Friday, July 20th, 2007

Daily NK
Kim Min Se
7/20/2007

A newsletter published on the 18th by “Good Friends” a North Korean aid organization claimed that “On average 10 people die of starvation throughout North Korea.”

However well informed North Korea defectors and North Korean tradesmen who travel to China refute the organization’s claim and argue, “It would be difficult for that to happen.”

The organization published in its newsletter, “Since the end of June, starvation has been occurring in each province throughout North Korea” and informed, “The number of people dying in North Pyongan, Yangkang, Jagang, South and North Hamkyung continues to rise everyday.” 

In particular, Good Friends stated, “In South and North Hamkyung, about 10 people are dying of starvation in each city and province” and “On the whole, the people dying are aged 40~65 years.”

“Though the cause behind the deaths is different for each person, most of the complications are related to malnutrition” informed Good Friends. They added, “A mass famine has not yet begun, however authorities and people feel the threat of the situation” stressing the urgency of North Korea’s food crisis. 

An affiliate of Good Friends said, “Presently, only 20,000 tons of South Korea’s food aid is offered (to North Korea)” and commented, “This rate of aid is too slow in saving the lives of the dying people.” 

However, there are criticisms against this claim. Some argue that Good Friends had excessively inflated North Korea’s food crisis. 

Choi Young Il (pseudonym) questioned this claim by Good Friends after a telephone conversation with his family in North Korea on the 16th. He said, “Even up to two days ago, I spoke to my family on the phone but they didn’t mention anything about a food crisis.” 

Moreover, Choi said, “Alleging that about 10 people on average are dying in the cities and province of South and North Hamkyung is no different to saying that nearly 400 people are dying throughout the whole region of South and North Hamkyung every day” and added, “In that case, this is similar to the early period of mass starvation in the early 90s.” 

“Only looking at North Hamkyung, most of the people living in the border regions live off illegal trade through China and though they may not be living well, I was aware that they got by without having to eat porridge” Choi said and remarked, “I don’t believe the claim that 10 people are dying of starvation every day.” 

On the same day, Hwang Myung Kil (pseudonym) a North Korean citizen who came to Yanji to visit his relatives in China said in a telephone conversation with a reporter, “I cannot believe the rumor that people are starving to death around the border areas of the Tumen River” and commented, “I haven’t even heard stories of more people starving to death in the mines and they live in masses around Musan.”

Hwang said, “Even amongst the people in Musan, there are only a small number of people who live off corn for three meals a day… Nowadays, people look for quality rather than quantity.” Further, he said “Though life is tough, people have found their own way of survival. It’s not to the point of starvation.”

If according to Good Friends, 10 people are dying on average due to starvation, this situation would indicate signs similar to the mass starvation in the early 90s. However, the cost of rice claimed by Good Friends clashes with their claim. 

When North Korea faced their mass crisis in the mid-90s, the cost of corn rose dramatically. In October 1995, 1kg of corn cost 16won, but this doubled to 30won. However, there has not been much change to the cost of food in North Korea.

According to a recent survey by the DailyNK on the cost of goods in North Korea’s Jangmadang (markets), 1kg of corn rice at Hoiryeong markets sells for 450won and 1kg of rice produced in North Korea costs 900won. 

More importantly is the cost of cigarettes. A packet of Sunbong, a North Korean brand of cigarettes sells for 1,000won and “Cat” cigarettes for 1,300won. The cost of a kilo of rice is still cheaper than a packet of cigarettes. 

If North Korea’s starvation was on the brink of a massive food shortage, then it is expected that the cost of rice and corn would escalate dramatically as an onset to the crisis. 

On the other hand, Kim Il Joo (pseudonym) a Chinese tradesman and expert on North Korean markets said, “I can’t say that North Korea’s food situation is smooth, but I don’t think it will get any worse than this.” Kim said “Now you can eat new potatoes and soon new corn will be available on the markets” and added, “Then, I think we will be able to get through another year.”  

Deaths from hunger rise across N. Korea: civic group
Yonhap

7/18/2007

A growing number of people have died of starvation across North Korea since late last month, a South Korean civic group working to defend rights of North Koreans said Wednesday.

“Famine-driven deaths began to occur across North Korea in late June,” Good Friends said in a commentary carried in its weekly newsletter. “In some cities and counties in the provinces of North Pyongan, Ranggang, Jagang and South and North Hamkyong, the number of deaths is on the increase daily.”

In North Hamkyong Province, a daily average of ten people, mostly those aged between 40 and 65, died of starvation, the group added.

“The leading cause of death varied for each case, but most people are dying of famine-driven malnutrition and its complications,” the commentary said.

The price of rice rose steadily this month, with North Korea facing a crisis of massive deaths from hunger, it said.

The group then called on the Seoul government and the international community to send more emergency food aid to help North Koreans, especially through the just-reconnected cross-border railways.

In mid-May, the two Koreas conducted the historic test of the railways, reconnected for the first time since the 1950-53 Korean War. But it remains unclear when regular train service might start.

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EU Rejects Inter-Korean Industrial Zone

Thursday, July 19th, 2007

Korea Times
7/19/2007

The European Union shunned South Korea’s request to include goods made in an inter-Korean industrial park in North Korea in a potential free trade agreement between the two sides, Seoul’s chief negotiator said.

South Korea launched free trade talks with the 27-country economic bloc in Seoul in May, only a month after it successfully concluded similar trade talks with the United States. A second round of South Korea-EU free trade talks began in Brussels on Monday.

“The EU side told us that it’s difficult for trade negotiators to deal with the Gaeseong issue because it’s complex legally and politically,” Deputy Trade Minister Kim Han-soo told reporters on the third day of the five-day negotiations this week, referring to the South Korean-built industrial complex in the North Korean border city of Gaeseong.

But the EU left open the possibility of a compromise, depending on the progress both sides will make in upcoming meetings, Kim said.

Before the second round began, Kim had expressed optimism over the Gaeseong issue.

“The Gaeseong issue is one of our top priorities. So we will keep pushing the EU to accept our request,” he said.

South Korea considers the industrial park, located just north of the world’s most heavily fortified border, to be a model for inter-Korean economic cooperation. About 15,000 North Korean workers are employed by 23 South Korean companies, producing garments, kitchenware and a number of other goods.

The industrial park is one of the prominent symbols of inter-Korean reconciliation efforts following a landmark summit in 2000 between then South Korean president Kim Dae-jung and North Korean leader Kim Jong-il.

The Gaeseong matter was one of thorniest issues during the 10 months of tough negotiations between South Korea and the U.S., but the two sides made an artful compromise, allowing them to discuss the issue later, depending on progress in international efforts to dismantle the North’s nuclear weapons program.

Kim and his European counterpart, Ignacio Garcia Bercero, director of bilateral trade relations at the European Commission, are leading the negotiations to move a deal forward between South Korea and the EU.

This week’s talks were centered on the pace of tariff reductions on automobiles. The EU asked South Korea to phase out its 8 percent tariff on auto imports within three years, instead of the seven years suggested by Seoul. according to a South Korean delegate who asked not to be named.

Other potential sticking points in the negotiations are South Korea’s protective pharmaceuticals and cosmetics markets. In addition, the EU wants better access to South Korea’s services market, particularly for law firms and hospitals, Kim said earlier.

Some progress has been reported, as the EU agreed to soften its anti-dumping rules for South Korean goods.

“So far, talks have been underway at a pace that we expected,” Kim told reporters. However, he admitted this week’s negotiations were aimed at clarifying each side’s positions, rather than bargaining.

No discussion was held on the agriculture sector. South Korea initially offered to exclude some 250 agricultural products such as rice, pork and chicken.

Officials at the EU delegation were unavailable for comment.

The EU is the second-largest trading partner of South Korea, with US$79 billion in bilateral trade in 2006. Unofficial studies suggest a deal would boost the figure by as much as 40 percent.

A third round of talks was scheduled for September in Brussels.

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Foreign Sales of Drugs Decline, North Korean Citizens Surface as Consumers

Tuesday, July 17th, 2007

Daily NK
Kim Min Se
7/17/2007

Only six, seven years ago, drugs inside North Korea secretly circulated among a portion of the upper-level officials and the specially affluent class, such as Chinese emigrants. Opium or heroine, produced in North Korea, were sold abroad to make foreign currency.

North Korea produces and exports drugs at the national level. Events where North Korean vessels and diplomats, through drug transport or charges of sales, are prosecuted by third-party countries is common. South Korean government, in the midst of North Korea’s breakdown in foreign currency supply in 1998, has deduced at one point that foreign-currency earners through illicit drug sales and illegal activities had amassed 100 million dollars.

From year 1970, North Korea’s drug sales, which secretly began on a small-scale, by the decree of Chairperson Kim Jong Il, rose in reality as a national enterprise and began official productions. In the August of same year, Chairperson Kim named the opium seed cultivation work as “White Bellflower Business.”

Further, he bestowed the appellation, “White Bellflower Hero,” to the person who sold over 1 million dollars of drugs, and ordered, “For the acquisition of foreign currency, export opium on a large scale (information reported by the National Intelligence Service, Lee Jong Chan former Chair at the inspection of National Intelligence Service on November 6, 1998).” As for North Korea’s drug production factories, the Nanam Pharmaceutical Factory in Chongjin and Hamheung’s Heungnam Pharmaceutical Factory are well-known.

Drugs, which are costly to average civilians preoccupied with making a living, were considered as a portion of the special class’ acts of aberration. The North Korean government, besides the foreign-currency earners, strictly inspected acts of drug circulations, so one could not even dream about this as a means of making money.

After the collapse of national provisions, drug sales also increase.

However, the food shortage brought a huge change to North Korea’s drug production and circulation. When the planned-economy system, where the nation was in charge of the provisions, broke down, the citizens started doing sales for survival. In North Korea where means of making money are not abundant, the place where one can smell money is at the market.

The revitalization of the jangmadang (black market) and general markets gave citizens in the cities a certain of opportunity to make a living. Further, they learned the mentality that money is best for survival. The custom began to spread where the citizens went through thick and thin if it meant working at a money-making job. Drugs infiltrated this opening.

Drugs that are most highly circulated in North Korea are philopon and heroine. The center of philipon productions is in Hamheung, South Hamkyung.

Hamheung is considered as a chemical industry synthesis base within North Korea where companies related to the chemistry branch can be abundantly found.

The representative place is the 2.8 Vinyl Chemical Complexes. Besides this, there are Hamheung Chemical Industry College (in its 5th year), the Heungnam Fertilizer Factory, and the Heungnam Pharmaceutical Factory, which are the providers of North Korea’s top chemical researchers.

The reason why Hamheung became the main place of philopon production

The raw materials for the vinyl complex are limestones of the Ounpo Mine in Hongwon-gun and the raw materials of the Heungnam Fertilizer Factory are ramrods of Huhcheon-gun and emulsified steel of the Manduk Mine.

For this reason, many chemistry-related researchers and workers are residing in Hamheung. The problem is that after the food provisions were cut off, they turned their eyes to Philopon production when making a living became difficult.

They can produce high-quality philopon, if they just have a good laboratory and raw materials. In particular, outside demand for Philopon was explosive in early 2000, when there were no huge restraints in the North Korea-Japanese trade and when the North Korea-Chinese trade became active.

Hamheung citizen Choi Myung Gil (pseudonym) said, “In the initial stage, if the businessmen provided raw materials and funds to researchers, they made high-quality Philipon and kept half of the profit. Do poor researchers have any money? They made them because businessmen received orders from China and Japan and sold them. Also, there was nothing to fear because bribes kept the mouths of the National Security Agency and the Social Safety Agency shut. There is nothing one cannot do with money, so what kind of a researcher would crush such a money-making scheme?”

Mr. Choi said, “The cost of production of philopon is no more than 3,000 dollars per kilogram in North Korea. If one sells this, he or she can receive 6,000 dollars on the spot. Manufactured Philopon can be handed over to middlemen or if it directly enters Shinuiju and is given to dealers, it can bring in from 9,000 to 10,000 dollars.”

He said, “My friend, who worked as a researcher in the Hamheung Branch Laboratory, also lived poorly, but became wealthy overnight by making philopon. I also am benefitting from him. There are many people who have become wealthy in Hamheung by making philopon.”

Ultimately, when the North Korea-Chinese traders bring the raw materials from China, the Hamheung chemical researchers make the philopon and the merchants take these to China for sale. In this process, the Chinese crime syndicate have also intervened.

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Chinese Government Demands Abolition of North Korean Drug

Tuesday, July 17th, 2007

Daily NK
Kim Min Se
7/17/2007

Researcher Raphael Pearl at the U.S. Congressional Research Service (CRS) maintained that recently, the Chinese crime syndicate has interfered in North Korean drug manufacturing and deals. Through the steady appearance of the up and coming wealthy class who have amassed a lot of money through sales, a significant amount of drugs began to be circulated in China.

North Korea-Chinese businessman Kim Myung Guk (pseudonym), who is in charge of North Korean mineral exports, frequently enters Hamheung to get minerals (uranium concentrate). Presently, Mr. Kim is in Dandong, China to meet Chinese businessmen.

Mr. Kim said, “The philopon from Hamheung is the best. In Pyongyang, Shinuiju, and Chongjin, Hamheung-made philipons are the most trusted. So I frequently receive requests to deal Hamheung philopon from other businessmen.”

Mr. Kim said, “It got to the point that the Chinese government requested inspection of the Hamheung factory, so the North Korean authorities carried out partial abolition. Nowadays, there is hardly anyone among the North Korean businessmen who do not know about the fact that Hamheung is the center of drug production.”

The Chinese government, when North Korean drugs started coming in on a mass-scale, pointed out the Heungnam Pharmaceutical Factory in Hamheung as a drug production factory in North Korea and demanded the abolition of the factory.

With exports to the outside closing, the great enterprise sold in North Korea

Currently in Shinuiju, philopon made in Hamheung is being sold for 9,000 to 10,000 dollars per kilogram. Drug dealers bring these into China and resell them at three times the higher price to Chinese drug dealers.

However, foreign sales of North Korean drugs is significantly decreasing as a whole.

In recent years, PSI and other international surveillance network have been strengthened regarding North Korea’s illegal actions, so drug exports have remarkably decreased. Further, North Korea-Japan relations have become worsened, so it seems to have exerted an influence on control of North Korean drug sales.

In Dandong, Chinese-North Korean businessman Kim Jong Man (pseudonym), who does trade with North Korea, said, “North Korea, before it ceased trade with Japan due to bad relations, sold a lot to Japan. It is a well-known fact that they were sold at high prices to Japanese yakuza via regular traders.”

However, with the worsening of relations, most avenues for drug sales have been closed. Also, the Chinese government, while proclaiming an all-out war with drugs recently, have significantly intensified control and inspections.

The Chinese government has shown a strong intention to control by broadcasting live via China’s CCTV the trial process of drug criminals through recent unconventional circumstances.

Mr. Kim said, “Due to the circumstances, the significant decrease in North Korean drugs going into China, compared to a year or two ago, can be felt.” Such an atmosphere is collectively acknowledged by other businessmen.

Inevitably, since routes for foreign sales have been closed, drug sales are increasing inside North Korea recently.

If such a trend continues, the day when North Korea will become one of the handfuls in the world known for its drug production and consumption does not seem too far off.

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Expelled for Watching Videos at Chongjin High School

Saturday, July 14th, 2007

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.

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The world according to Pyongyang

Friday, July 13th, 2007

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.

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N.K. orders shutdown of karaoke bars

Friday, July 13th, 2007

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.

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Oil Is Shipped to North Korea Under Nuclear Shutdown Pact

Friday, July 13th, 2007

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.”

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The North Korean Rice Price Narrowly Increased after the Spring Shortage

Thursday, July 12th, 2007

Daily NK
Kim Young Jin
7/12/2007

prices.jpgThe 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.

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North Korea Sells Fishery Licenses in Chulsan’s Coastal Sea to China

Wednesday, July 11th, 2007

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.

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