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South will give money directly to North Korea

Sunday, March 11th, 2007

Update: the money went missing.

South Korea criticizes North Korea for failing to disclose how aid was used
Herald Tribune
2/11/2008

South will give money directly to North Korea
Joong Ang Daily
Lee Young-jong and Ser Myo-ja
3/12/2007

Although South Korea does not allow cash to be given directly to North Korea, it made a deal of its own.

The two countries announced Saturday that Seoul would give Pyongyang cash to buy video conference equipment. A South Korean official said yesterday the amount will be $400,000.

North Korea will use the money to set up video conference calls between families separated during the Korean War, according to a joint statement issued Saturday by the two countries.

The South Korean government has strictly banned humanitarian groups ― as well as all residents ― from giving cash to the North due to concerns the money could be spent for other purposes.

“We decided to assist the North to smoothly resolve the separated family issue,” the official said, adding that the government will thoroughly monitor the spending of the money and the use of the equipment.

The cash payment agreement was first made at a Red Cross meeting in June 2006, but never publicly announced. The money was not exchanged because North Korea conducted a missile test the next month, temporarily freezing inter-Korean relations.

After progress in the recent six-party talks designed to make North Korea nuclear-free, South Korean Red Cross officials pledged again on Saturday at a meeting at a Mount Kumgang resort to give Pyongyang the money, the official said on condition of anonymity.

According to the joint statement, the two Koreas agreed that video conference call reunions will be expanded. The two Koreas also agreed a video conference call reunion center will be built in Pyongyang, separately from the reunion center under construction at Mount Kumgang, and that Seoul will provide construction material and equipment. The material and money will be released at the end of March, the agreement said.

Neither the joint statement nor the press release specified the amount of money, but the Seoul official said it will be $400,000. The construction material to be provided to the North is worth another $3.5 million, he said.

The South Korean government was unable to give the video conference call equipment, such as liquid crystal display monitors and computers, directly to the North because of United States regulations banning the export of dual-use goods to North Korea. Under the United States export administration regulations, strategic goods that include more than 10 percent of United States-made components or technology, are banned for export to state sponsors of terrorism, which include North Korea.

According to the official, South Korea advised the North to purchase the items from China with the cash. Washington could make an exception to the export ban, presumably at Seoul’s request, but it would take time to do so.

In addition to the cash, the $3.5 million worth of goods, such as trucks, construction materials, air conditioners, heaters and cables, will be provided to build a video conference call center in Pyongyang.

At the Red Cross talks, the North also agreed to resume the construction of the reunion center on Mount Kumgang on March 21. The two Koreas began the construction in August 2005, but the work stalled last July. The buildings are about 30 percent complete.

Last week’s Red Cross meeting was scheduled for only one day, for about two hours. Due to the North’s persistent demands for cash and materials, the talks went on for a second day, the government official said.

Posted in Civil society, Counterfeiting, International/Korean Red Cross, Mt. Kumgang Tourist Special Zone, South Korea | Comments Closed

Chinese Entrepreneurs Poised to Pounce on North Korean Border

Thursday, March 8th, 2007

Bloomberg
Bradley Martin, Allen Cheng
3/6/2007

Chinese entrepreneur He Ho was burned by his first North Korean investment, a bakery in the shabby border city of Sinuiju. He lost his entire $20,000 when the plan to make the city a special economic zone stalled in 2003.

If another opportunity comes along, though, “I’ll be the first to go in,” the 34-year-old said in an interview in Dandong, the bustling Chinese city facing Sinuiju across the Yalu River. “North Korea’s a good investment because so many things are lacking.”

Business executives in Dandong, one of the main conduits for trade in and out of North Korea, see opportunity in the recent six-nation agreement to end Kim Jong Il’s nuclear-weapons program. They think the 65-year-old North Korean leader will now focus on fixing his country’s nearly flattened economy and may revive plans for a special economic zone — an area designed to promote foreign investment, with fewer rules and regulations than elsewhere in the country — on the western border with China.

“Most of North Korea’s trade with China is via Dandong, so a special zone in this corridor could make sense,” said Marcus Noland, senior fellow at the Peterson Institute for International Economics in Washington. “This could be the North Korean equivalent of the Chinese coastal SEZs in the early years of the Chinese reform.”

No Guarantee

There’s no guarantee against another disappointment for entrepreneurs like He Ho, said Peter Beck, Seoul-based Northeast Asia project director for the International Crisis Group, a Brussels-based organization that works to resolve crises around the world.

“The eternal optimist in me hopes that Kim will see the light and recognize the direction in which he needs to lead the economy,” Beck said in a telephone interview. “But the jury’s still out.”

At the same time, “the North Koreans have been talking about putting a special economic zone in the far northwest aimed at China for a decade,” said the Peterson Institute’s Noland. “If they get the politics right, this venture could work.”

China is North Korea’s top trading partner, with 2006 exports of $1.23 billion and imports of $468 million, according to its Ministry of Commerce.

A little over a year ago, Kim visited six booming Chinese cities, including the special economic zone of Shenzhen, bordering Hong Kong. North Korea’s Central News Agency described the nine-day trip as a visit to places “where the cause of modernization is being successfully carried out.”

Executives’ Speculation

Business executives in Dandong speculate that North Korea will develop a new zone in Cholsan County, a peninsula on the east side of the mouth of the Yalu some 50 to 60 kilometers (31 to 37 miles) south of Dandong and Sinuiju. China’s commerce and foreign ministries and North Korea’s embassy in Beijing didn’t respond to faxed requests to comment on their plans.

In 1991, North Korea built a special economic zone at Rajin-Sonbong, in the remote northeast of the country, which has failed to attract much foreign investment because of its location. Another zone near the southern border at Gaeseong, only 60 kilometers from Seoul, has proven more popular, especially with South Korean manufacturers in search of low-cost labor.

In 2002, North Korea announced plans for the zone in Sinuiju, which would have included export factories and casinos to lure gamblers from China. Kim named Dutch-Chinese businessman Yang Bin governor of the zone. China, which hadn’t given its approval, squelched the plan by arresting Yang and jailing him in 2003 on charges of fraud and illegal land use.

Strained Relations

Kim’s test of a nuclear device in October, which strained relations with the Beijing government, didn’t halt commerce on the border, according to Shen Yuhai, general manager of Dandong Jade Ocean Trade Co. “We didn’t stop trading at any time,” he said in a recent interview.

Shen’s office overlooks a busy parking lot where Chinese customs officials examine trucks departing neon-lit, high-rise Dandong for the run-down and darkened Sinuiju.

The trucks cross on the Friendship Bridge’s single lane in the morning with manufactured goods and return in the evening, either empty or carrying minerals, silkworm cocoons and seafood, Shen said. Four trains a week cross in each direction, connecting the North Korean capital of Pyongyang with Beijing.

China is supplying its neighbor with “daily necessities, home electrical appliances and, in this season, farming tools and chemical fertilizer,” said Shen.

While business is booming, he said he’s still cautious about the risks. He requests payment in yuan, dollars or euros, not North Korean won, and accepts bank transfers only after business relations have been established.

Even then, he said, “sometimes we are cheated.”

–With additional reporting by Hideko Takayama in Tokyo and Lee Spears and Dune Lawrence in Beijing.

For a copy of a list of banned goods to North Korea: http://www.state.gov/t/isn/76138.htm

Posted in Agriculture, China, Foreign direct investment, International trade, Sinuiju Special Administrative Region, Trade Statistics | Comments Closed

Koreas to hold Red Cross talks to resume construction of family reunion center

Thursday, March 8th, 2007

Yonhap
3/8/2007

Red cross officials from South and North Korea are to meet this week on resuming the construction of a family reunion center on the North’s scenic mountain bordering the South along the east coast, South Korean officials said.

The one-day meeting, slated to be held at the North’s Mount Geumgang resort on Friday, will also address the next family reunions via video link to be held on March 27-29.

Last week, the two Koreas agreed to resume reunion events for families separated by the border since the end of the Korean War. The next face-to-face family reunions will be resumed in early May.

Shortly after the North conducted its missile tests in July, the South suspended food and fertilizer aid. In retaliation, the communist nation immediately suspended inter-Korean talks, family reunions and the construction of the family reunion center.

“The construction has been put on hold for about eight months, so we will have to resume construction after checking whether there are technical problems. The construction will likely be completed next year, far later than the originally scheduled April of this year,” a South Korean Red Cross official said on condition of anonymity.

High on the agenda will be discussions on when to resume construction, how to check the facilities needed for construction, and how to provide supplies and dispatch engineers, the official said. The South Korean delegation will be headed by Hwang Jeong-ju, while Pak Yong-il will lead the North Korean team.

The two sides started the construction at a village near the scenic mountain resort in August 2005. The envisioned 12-story building will house two reunion halls and serve as the venue for family reunion events.

The two Koreas have held 14 rounds of family reunions. More than 90,000 people from South Korea alone have remained separated from their loved ones since the end of the 1950-53 Korean War.

Posted in Civil society, Foreign direct investment, International/Korean Red Cross, Mt. Kumgang Tourist Special Zone | Comments Closed

Chinese Merchants in North Korea – Cure or Poison to Kim Jong Il?

Wednesday, March 7th, 2007

Daily NK
Kim Min Se
3/7/2007

90% daily goods made in China, 50% circulated by Chinese merchants

While some prospect that North Korea may be an affiliated market of China’s 4 provinces in the Northeast, the real focus is on the merchants who actually control North Korea’s markets. Recently, North Korean citizens have been asserting that markets would immobilize if Chinese merchants were to disappear.

Lately, Chinese merchants are nestling themselves with their newly found fortune in North Korea, undeniably to the envy of North Korean citizens.

In a recent telephone conversation with the DailyNK, Kim Chang Yeol (pseudonym) a resident of Shinuiju said “Most of the tiled houses in Shinuiju are owned by Chinese merchants in Shinuiju are upper class and the rich.” Unlike Pyongyang, tiled houses in Shinuiju are greater in value than apartments. In particular, the homes owned by Chinese merchants are luxurious and impressing.

Kim said “At the moment, 90% of daily goods that are traded at Shinuiju markets are made in China.” What Kim means by 90% of goods is basically everything excluding agricultural produce and medicinal herbs. Apparently, about half of the (90% of) supplies are circulated by Chinese merchants.

Kim affirmed that the market system could be shaken if supplies were not provided by the Chinese merchants. Hence, Chinese merchants have elevated themselves in North Korea’s integrated market system, to the extent that the market could break down without their existence.

In addition to this, Chinese merchants are playing a vital role in conveying information about the external world into North Korea. Even in 2004, it was Chinese merchants to first telephone China through mobile phones relaying the news about the Yongcheon explosion. As a result, rumors say that the movement of Chinese merchants can either be a “cure” to the economic crisis in which the North Korean government seems unable to fix, or “poison,” as more and more foreign information flows into the country.

How many Chinese merchants are there in North Korea?

A report by China’s Liaoning-Chosun Newspaper in 2001 sourcing data from North Korea, states that immediately after WWII, approximately 80,000 overseas Chinese were residing in the Korean Peninsula. Then following the Korean War and the formation of a Chinese government, the majority of people, approximately 60,000 Chinese, returned home. In 1958, statistics show that 3,778 families of overseas Chinese were living in North Korea, totalling 14,351 people.

These Chinese engaged in business related to farming, home made handicrafts and restaurant business, and in the late 50’s, lost all this due to the implementation of economic planning and dictatorial regime. Since then, the majority of merchants continued to return to China until the early 80’s.

In 2001, Liaoning-Chosun Newspaper confirmed that approximately 6,000 Chinese were living in North Korea. Of this figure, more than half were residing in Pyongyang, approx. 300 families living in North Pyongan and approx. 300 families residing throughout Jagang and northern districts of South Hamkyung.

At present, there are 4 middle and high schools for children (11~17 years) of Chinese merchants, located in Pyongyang, Chongjin, Shinuiju and Kanggae. In addition to these schools, there are a number of elementary schools (for children aged 7~11 years) located sporadically throughout each province.

Wang Ok Kyung (pseudonym) a resident of Shinuiju attended Chongjin Middle School for children of overseas Chinese in 1981~86. Wang said “At the time, there were about 40 students in each year. Now there is only about 5~6 students.” Nowadays, many Chinese children complete their elementary studies in North Korea, but the general trend is to send the children to China for middle school. She said “In order to enter a Chinese university, students must have completed their middle school studies in China and must be fluent in Chinese. He/she can also go to private institutes in China.”

Fortunes made through trade between North Korea-China during the food crisis

Even until the early 80’s there were no such thing as a wealthy North Korean-Chinese merchant. They were no different to North Korean citizens.

However, in the 80’s, many people began importing and selling goods such as socks, handkerchiefs, hand mirrors and cards from China, literally through their sacks. As the 90’s approached North Korean-Chinese merchants began to experience great wealth, the time where North Korea-China trade fundamentally kickstarted.

Today, Son Kwang Mi (pseudonym, 52) falls under the top 10 wealthiest Chinese merchants in Dandong, characterizing an unique rags to riches story. In the past, Sun lived in Chongjin and was one of the first figures to trade with China in the 80’s.

In the beginning, Son was so poor that she had to sell her watch received as a wedding gift in order to buy goods to sell.

Fortunately, Son found her money smuggling gold. In North Korea, gold is considered a public good or simply put Kim Jong Il’s personal inheritance, so private trade of gold is strictly regulated. Nonetheless, there are still some laborers who export gold secretly and a great number of people still collect gold through dubious ways. In particular, after the 80’s as North Korea began to experience economic decline, more and more people sold gold secretly.

Hence, a small number of Chinese merchants infiltrated the market of secretly trading gold with China. Chinese smugglers were able to take advantage of North Koreans by greatly raise their market margins, as the supply of gold and North Koreans wanting to sell their gold was high yet the demand in North Korea low.

Son said “Of the Chinese merchants in North Korea, 60% earned a great fortune at that time through illicit trade.”

She says that there were two opportunities for overseas Chinese to make a great fortune. The first was in 1985~89 through illicit trade of gold and the second, during North Korea’s mass food crisis in 1995~98.

“During the mass famine, everything in North Korea was in shortage and so Chinese merchants began to provide the daily necessities of life. At the time, if you brought large amounts of goods such as fabric and sugar, you could make a profit of 1 million Yuan (US$137,000),” she said.

Son was fortunate enough not to miss these two opportunities which led her to great wealth and allowed her to possess a fortune of 50 million Yuan (US$6.31 million).

Chinese merchants can relatively enter and exit China freely. Also, with the ability to speak Chinese fluently and the possibility of staying in the homes of many relatives in China, the occupation possesses ideal conditions.

Posted in 1990s Famine, Black markets, Cell phones, China, Communications, Economic reform, Education, Foreign direct investment, Gold, International trade, Labor conditions/wages, Light Industry, Manufacturing, Real estate | Comments Closed

Outlook for Inter-Korean Business Bright

Wednesday, March 7th, 2007

Korea Times
Park Hyong-ki
3/7/2007

The outlook for inter-Korean trade this year seems bright, as North Korea agreed to dismantle its nuclear weapons programs at the six-party talks in Beijing last month.

According to a survey conducted by the Korea International Trade Association (KITA), about 45 percent of South Korean companies doing business with North Korea were optimistic that the volume of inter-Korean trade will grow this year. The survey was conducted on 150 firms in February.

Some 35 percent believe that the bilateral trade will remain the same as last year’s, while only 15 percent showed negative responses toward this year’s trade, saying that the volume will “drastically” decrease.

Only two companies said they will pull out of North Korea this year, while five companies were undecided.

Last year, inter-Korean trade amounted to about $1.3 billion, up 28 percent from 2005. Key trading commodities were agricultural, chemical and textile products.

Despite North Korea’s nuclear and missile tests as well as chilly inter-Korean relations last year, South Korean companies operating in the Kaesong Industrial Complex saw their sales grow 69 percent to $298 million.

The Kaesong site is one of the major cross-border projects symbolizing economic ties between the two Koreas, which utilize North Korea’s cheap labor and South Korea’s technological skills.

The Ministry of Unification is hoping to attract about 2,000 manufacturers to Kaesong by 2012. Currently, there are 55 South Korean firms operating in the joint economic zone, which account for 22 percent of overall South-North business, according to the trade association.

The other joint business _ the Mt. Kumgang tour managed by Hyundai Asan _ suffered from the aftermath of North Korea’s nuclear weapon test. The tourism project recorded only $57 million in sales, down 35 percent from the year before.

Specifically, a total of 477 South Korean companies participated in inter-Korean trade last year, down from 523 firms in 2005, due to heightened risks following Pyongyang’s nuclear test.

About 44 percent of those surveyed said that the test had negatively affected their business with the North. The report showed that only 39 percent reaped a “little” profit last year while doing business with North Korea.

Half of firms upbeat for North trade
Joong Ang Daily
3/8/2007

Almost half of South Korean companies doing business with North Korea said they have a bright outlook for inter-Korean trade this year due to expectations for better ties with the North, a poll said yesterday.

According to a survey of 67 companies conducted by the Korea International Trade Association, 45 percent of the respondents said inter-Korean trade will likely increase this year. Thirty-five percent expected trade to remain at the same level as last year while 15 percent said it will likely decline.

The poll also said 75 percent of local companies operating in the industrial park in the North’s border city of Kaesong had an optimistic outlook for trade. The industrial complex, mainly for smaller South Korean firms, is considered a model for reconciliation and cooperation between the two Koreas. Currently, 21 garment and other labor-intensive South Korean plants are operating there, employing about 11,000 low-paid North Korean workers.

The survey said among the firms that forecast inter-Korean trade to rise, 17 percent said their continued trust in North Korean firms was the reason for their upbeat outlook, while 16 percent and 14 percent said it was a rise in new orders and expectations for inter-Korean reconciliation. The survey was conducted before a deal on dismantling North Korea’s nuclear program was reached, reflecting that local firms have maintained a positive view toward inter-Korean trade. The agreement calls for Pyongyang to shut down and disable its main nuclear reactor and dismantle its atomic weapons program.

Posted in Foreign direct investment, International trade, Kaesong Industrial Complex (KIC), Korea International Trade Association (KITA), Mt. Kumgang Tourist Special Zone, South Korea, Trade Statistics | Comments Closed

Shinuiju Customs Strictly Controlled by North Korean Authorities

Monday, March 5th, 2007

Daily NK
Kim Min Se
3/5/2007

North Korea customs at Shinuiju is under strict control by Central Committee of North Korea Workers Party.

An inside source from Shinuiju said on the 4th, “Authorities are currently undergoing investigations at Shinuiju customs, looking for tax evasions and illicit acts. The parties subject to these crimes include customs officers at Shinuiju customs and merchants engaging in North Korea-China trade.”

The source added that the investigations had virtually terminated North Korea-China trade between Shinuju and Dandong.

Shinuiju customs is critically important for North Korea as 80% of food and daily necessary goods between North Korea and China are imported and exported from here.

According to Kim Young Hee (pseudonym), a North Korea-China tradeswoman in Shinuiju, “Trade merchants have given up on trade and are in a state of panic because of authorities making investigations at Shinuiju.”

Kim said “At times like this, keeping is a low profile is the way to survive” and expressed her concern, “They have made orders to arrest at least 10 people. Who knows, anyone could be unlucky and caught.” She said “Like there is any trade merchant who does not engage in some sort of illegal act” and retorted “Simply obtaining a permit from authorities is generating money.”

“Prior to authority investigations, on average 50~100 cars would pass through Shinuiju-Dandong, per day. Now the figures have drastically reduced with only 5~10 cars passing through” she said.

Kim continued “There is not an article that falls through the cracks of authority officers. All goods approved by customs, whether it be minerals to seafood is confirmed by authorities… All things are left up to the hands of authority officials.”

On the other hand, the source also informed that despite recent investigations placing trade between North Korea and China in a state of lull, apparently counteracting effects such as dramatic rises in Shinuiju markets have not yet occurred.

Posted in Black markets, China, Economic reform, International trade, Trade Statistics, Worker's Party | Comments Closed

UNDP pulling out of DPRK for now…

Monday, March 5th, 2007

Kim Jong Il’s Word
A U.N. agency yanks its cash and people from North Korea.
Wall Street Journal (Hat Tip One Free Korea)
3/5/2007

North Korean officials arrived in New York over the weekend for discussions on normalizing relations with the U.S. as part of the nuclear disarmament accord struck last month. Chief U.S. negotiator Christopher Hill is scheduled to meet today and tomorrow with his counterpart, Vice Foreign Minister Kim Kye Gwan.

May we suggest that, before he sits down, Mr. Hill take a look at the brief statement issued quietly Thursday by the United Nations Development Program (UNDP). There is no better guide to Kim Jong Il’s negotiating style, nor to the North Korean dictator’s habit of breaking his word. Nuclear negotiators, beware.

The agency announced, in an item on its Web site, that it is suspending all operations in North Korea because the “necessary conditions set out by the Executive Board on 25 January 2007 have not been met.” The UNDP’s 20 or so projects will be shut down, we’re told, and its eight international staffers will be pulled out of the country. The U.N. isn’t known for its tough love, and no one we’ve talked to can recall another example of the UNDP suspending operations in a country that refused to comply with the regulations.

The “necessary conditions” were imposed at the last board meeting in response to an outcry over the UNDP’s lack of oversight over its programs in North Korea. U.N. documents, produced reluctantly after prodding by the U.S. mission to the U.N., showed numerous irregularities dating back into the late 1990s. Tens of millions of dollars for programs that were supposed to help the poor appear instead to have been handed over to Kim’s dictatorship.

As the March 1 deadline for compliance approached, North Korea decided to throw a tantrum to see if it could get excused from its obligations. It deemed the conditions politically motivated–especially the one that limits aid to programs that directly help the people and bans assistance that could aid the government–and demanded a renegotiation.

Never mind that North Korea sits on the Executive Board and had agreed to abide by the terms thrashed out in January. To its credit, the UNDP refused to be bullied into extending the deadline and is holding Pyongyang to its commitments. The suspension applies to all existing projects; the board had already suspended new projects until an audit could be completed and better oversight provided.

The U.N. has another deadline fast approaching in North Korea. At the end of January, Secretary General Ban Ki Moon ordered a full investigation of all U.N. programs in North Korea, to be completed within three months. Those include Unicef, the World Food Program and the U.N. Population Fund. As the end-of-April deadline for that audit comes closer, it will be instructive to watch Pyongyang’s degree of cooperation.

Meanwhile, the talks on North Korea’s nuclear program are moving ahead, with the U.S., South Korea and Japan all holding bilateral meetings with Pyongyang this month toward the goal of normalizing relations. At the top of Japan’s agenda is the whereabouts of its citizens who were kidnapped by North Korean agents in the late 1970s and 1980s and forced to train North Korean spies. Negotiations with Pyongyang have so far yielded the return of only five abductees along with preposterous explanations for how the rest have supposedly died.

The preference in some diplomatic circles, including the U.S. State Department and perhaps now in the White House, is to dismiss the U.N. corruption in North Korea as well as the abductee and other human-rights violations as side-issues to the more vital objective of getting Kim to give up his nuclear program.

We’d argue that international focus on these issues is an essential part of keeping up the pressure on Kim’s regime. But even if you buy the argument that these are ancillary issues, there’s still an important lesson here: If Kim won’t abide by the pledges he made regarding UNDP aid to his country, how can he be expected to keep his promises on nuclear disarmament?

Former U.S. Ambassador to the U.N. John Bolton lays out the troubling case of changing American intelligence judgments toward North Korea in The Wall Street Journal today (article available here). His point about the need for an intrusive inspection and verification regime is especially important. Under the six-party agreement announced on February 13, North Korea has 60 days to account for all of its nuclear programs. If it doesn’t, or if Kim attempts to renegotiate the terms at the last minute, we’d like to think the U.S. would show at least as much fortitude as the United Nations, and tell Kim to take a hike.

Posted in Economic reform, Foreign direct investment, Japan, South Korea, Tumen River Area Development Programme (TRADP), UNDP, USA | Comments Closed

The Political Economy of Sanctions Against North Korea

Sunday, March 4th, 2007

Ruediger Frank
Asian Perspective, Vol. 30, No.3, 2006 pp. 536

PDF Here: DPRK sanctions.pdf

Abstract:
This article explores sanctions as a policy tool to coerce North Korea’s behavior, such as by discontinuing its nuclear weapons program. It discusses the characteristics of sanctions as well as the practical experience with these restrictions on North Korea. It becomes clear that the concrete goals of coercion through sanctions and the relative power of the sending country to a large extent determine the outcome. Nevertheless, the general limitations of sanctions also apply, including the detrimental effects of unilateral and prolonged restrictions. It appears that the imposition of sanctions against the DPRK is unlikely to succeed. As an alternative way of changing the operating environment for North Korea, assistance deserves consideration. Despite many weaknesses, this instrument is relatively low in cost and risk, and can be applied continuously and flexibly.

Highlights below the fold:
(more…)

Posted in 2002 Economic reforms, Black markets, Economic reform, Foreign direct investment, International Aid, International trade, Japan, Kaesong Industrial Complex (KIC), Political economy, Rason Economic and Trade Zone (Rajin-Sonbong), USA | 1 Comment »

S. Korea Refuses North’s Request for Restored Aid

Saturday, March 3rd, 2007

washington Post
3/3/2007

South Korea on Friday added pressure on North Korea to comply with an international disarmament agreement, refusing the impoverished nation’s demand to restore full aid shipments until after its main nuclear reactor is shut down.

At the first high-level talks between the two Koreas since the North’s underground nuclear test in October, the communist nation “agreed to make joint efforts for a smooth implementation” of its pledge last month to take initial steps toward dismantling its atomic program, according to a final statement.

The North and South also agreed to resume family reunions of relatives split by their border and planned test runs of railway lines between the countries.

North Korea and the International Atomic Energy Agency have agreed on March 13 as the starting date for a two-day visit by the agency’s chief, Mohamed ElBaradei, U.N. officials said Friday. The officials asked for anonymity because they were not authorized to reveal specifics of the trip, which is expected to help alleviate some misgivings that the unpredictable regime might renege on its agreement to shut down its nuclear facilities.

This week’s meetings in Pyongyang were part of the historic reconciliation launched between the Koreas since their leaders met in their first and only summit in 2000. The countries remain technically at war because the cease-fire that ended the 1950-53 Korean War has never been replaced by a peace treaty.

But attempts to bring the countries together have been complicated since 2002, when Washington accused North Korea of secret uranium enrichment efforts that the Bush administration said violated an earlier disarmament deal.

The situation deteriorated further last July when North Korea test-launched a series of missiles, prompting South Korea, one of the North’s main sources of aid such as rice and fertilizer, to put the shipments on hold.

Relations worsened after North Korea’s Oct. 9 nuclear test. But a breakthrough came last month after a revival of six-nation nuclear negotiations — including China, Japan, Russia, the United States and the two Koreas — in which the North pledged to make moves toward abandoning its nuclear program.

Two Koreas agree on fertilizer aid, reunions
Joong Ang Daily
Ser Myo-ja
3/3/2007

A May reunion of some family members separated since the Korean War and the resumption of fertilizer aid to North Korea are among the agreements the two Koreas announced yesterday in Pyongyang.

Video conference calls will take place March 27 to 29, and the face-to-face reunions will happen in early May at the Mount Kumgang resort in North Korea, according to Unification Minister Lee Jae-joung and his North Korean counterpart, Kwon Ho-ung.

The two released a joint statement yesterday wrapping up their four-day meeting. The reunions will be the 15th held; the last round took place in June of last year.

In the talks, which had been stalled since North Korea tested a missile in July, the two Koreas also agreed to quickly resume a project to build a permanent reunion center. Working-level Red Cross officials from both countries will meet Friday at Mount Kumgang to discuss it.

More Red Cross talks are scheduled April 10 to 12 at the same venue to address issues associated with “those who have gone missing since the Korean War.” The term refers to the South Korean war prisoners and kidnap victims still alive in the North.

Although there was no specific mention of rice and fertilizer aid in the statement, Mr. Lee said Seoul will provide them as it has done in the past. Speaking to journalists after wrapping up the talks, Mr. Lee said, “The North will fax its request for fertilizer aid, and the South will provide it accordingly.” He added that “spring is coming fast, so we probably need to hurry.” Seoul has been providing an average of 150,000 tons of fertilizer, used in spring farming, per year. It will provide 300,000 tons this time.

According to the pool report from North Korea, Mr. Lee also said “the matter about rice will be discussed at the economic talks in April and an official decision will be made there.”

The two ministers agreed to expand economic cooperation ― including finalizing of 400,000 tons of rice aid ― during economic talks April 18 to 21 in Pyongyang.

“Since we agreed to meet in Pyongyang in April for economic talks, we will be able to discuss rice aid, taking into account how far the North implemented the Feb. 13 nuclear agreement,” a South Korean official said on the condition of anonymity.

He was referring to the agreement reached last month at the six-nation nuclear talks, in which Pyongyang promised to shut down its main nuclear facility within 60 days in return for aid and economic assistance from other countries.

The two Koreas also agreed to conduct test-runs of inter-Korean railroads before the end of June, as soon as both sides’ military arms are comfortable with the safety measures in place. On March 14 and 15, economic committee representatives will meet in Kaesong to address the plan. The military guarantee is the key for the trains to cross the demilitarized zone between the two Koreas.

Mr. Lee and Mr. Kwon agreed the next round of ministerial meetings will take place in Seoul for four days starting May 29.

Posted in Civil society, Foreign aid statistics, International Aid, Mt. Kumgang Tourist Special Zone, South Korea, Special Economic Zones (Established before 2013) | Comments Closed

North Koreans make rare visit to Oregon

Saturday, March 3rd, 2007

Associated Press (Hat tip DPRK Studies)
3/3/2007

Three North Koreans ended a rare and discrete visit to Oregon this week after visiting Oregon State university scientists, orcharists in the Hood River area, the Nike campus, Gov. Ted Kulongoski and attending a Trail Blazers basketball game.

Because of sensitive six-way talks on North Korea’s nuclear program, Mercy Corps, which hosted the visit, declined to release the officials’ names.

Portland-based Mercy Corps is among a handful of humanitarian agencies running programs involving North Korea, which has no diplomatic relations with the United States.

Over 12 years, Mercy Corps has supplied fish and fruit trees for farm projects in North Korea, which has chronic food shortages.

The North Koreans, representing Mercy Corps’ main partner organization, the Korean American Private Exchange Society, arrived Tuesday and were to leave Saturday.

Mercy Corps President Nancy Lindborg said the three visited OSU, which has made scientists available to advise on the agricultural projects. On the way back they met with Kulongoski. They visited orchards in the Hood River area Friday.

At Nike headquarters near Beaverton, they met with managers who gave a presentation on e-commerce, an Internet activity with undetermined relevance in a socialist nation with limited Web penetration.

“I don’t have a specific point of view to share on their visit and the possible opportunities North Korea may present,” said Bob Applegate, a Nike spokesman.

The visit was perhaps the 10th in a series of low-profile North Korean delegations here over the years, Lindborg said. In North Korea, she said, “Oregon is very well-known.”

At the Rose Garden on Thursday the visitors watched the Trail Blazers dismantle Charlotte.

“They’re fans,” said Lindborg, who also attended the game. “Two of them actually play basketball.”

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