Archive for the ‘Economic reform’ Category

Kaesong Site to House 40 More Manufacturers

Thursday, January 11th, 2007

Korea Times
Lee Jin-woo
1/11/2007

Unification Minister Lee Jae-joung said Thursday that some 40 small factories, mostly clothing manufacturers, will move into the joint industrial complex in North Korea this year.

But he said it would take more time for the ministry to fully resume the halted expansion of the Kaesong Industrial Complex.

Last September, the South Korean government decided to hold off expanding the inter-Korean business venture because of heightened tension on the Korean Peninsula after the North’s launching of ballistic missiles in July. After the Stalinist state’s first-ever nuclear test on Oct. 9, tensions increased further.

“We’ve decided not to postpone helping small South Korean manufacturers, which have been struggling with adverse domestic business conditions, especially high wages,” Lee said during a press briefing at the ministry.

The manufacturing companies will move into a new five-story building constructed by the state-run Korea Industrial Complex Corp. involved in a pilot project for the industrial complex.

Construction of the building will be completed by June. It is not related to the postponed sale of the second section of the industrial complex, the minister said.

The number of North Koreans working for the 18 South Korean firms at the industrial complex surpassed 10,000 last year.

When fully expanded by 2012, the complex is expected to house about 2,000 South Korean manufacturers employing about half a million North Koreans, according to the Ministry of Unification.

The minister, however, said more progress in the stalled six-party talks is necessary for the government to resume expansion of the project.

He said he will continue discussing the matter with the Korea Land Corp., a state-run land developer, which has been involved in the Kaesong project, and Hyundai Asan, the business arm of Hyundai Group that handles the Mt. Kumgang tourism project.

Lee said the government would not provide medical aid to the Stalinist state to help stem the spread of scarlet fever, an infectious disease.

“Scarlet fever is not a fatal infectious disease. Given the significance of the disease, we believe that North Korea itself will be able to solve the problem,” Lee said.

The ministry considered providing medical aid to the North after scarlet fever broke out in the northern part of North Korea last October.

Earlier, South Korean humanitarian aid groups shipped 36 types of medicine including penicillin and other antibiotics to Pyongyang.

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No More Free Work for State

Wednesday, January 10th, 2007

Daily NK
Kim Min Se
1/10/2007

An increasing number of North Koreans now depend on markets as international aid to North Korea sharply plummeted after nuclear test, evidence shows.

Particularly, a popular “market-friendly” mind is growing as the authorities’ control over the populace is weakening.

J, resident of Hamheung, North Korea, told the Daily NK on Monday via telephone “Though TV and newspapers boast ‘military first policy’ and ‘strong nation’ after the nuke test, people are only interested in money.”

The Daily NK was able to have a telephone interview with J, who was visiting Sinuiju, a Sino-Korean border city in which electromagnetic waves of Chinese cell phones could reach. NK businesspeople often use them for communication.

J said “Hamheung citizens are well aware of the cutoff of international aid. When they were forced into serving in the public industrial labor force, they could not go to work in markets and must then starve. Therefore, they are now asking for some money instead of compensation for the loss in work when they are serving for the public work.

Originally, such work in state-run factory used to be compulsory under the industrial mobilization of workforce policy. This is the first known case of being paid in mobilized labor and evidence of spread in popular market-economy-oriented mind.

“The vulnerable died well before and those who can run are already in China or South Korea. The leftovers are hard ones; they can even plow rock mountains,” J said sarcastically.

“People don’t trust the state anymore. They live on their own.”

J, a middleman, buys TVs, radios or bicycles and sells them back in market. On lucky days, he earns up to fifty thousands NK won (equivalent to 20 US dollars). According to J, as of January 2007, rice price is ranging from 1000 won to 1100 won (less than .5 US dollar) per kilogram.

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Filling North Korea’s bare shelves

Wednesday, January 10th, 2007

Asia Times
Ting-I Tsai
1/10/2007

North Korea’s nuclear test has been a hot topic among analysts around the world. But inside the isolated Stalinist state, getting a hold of a pair of running shoes, a bicycle or a television set is still what most excites ordinary citizens.

And Chinese businesses continue to cash in on these material desires by selling goods manufactured at home or in North Korea at prices higher than their quality justifies, sparking much criticism.

When Pyongyang publicized its intention to initiate economic reforms in July 2002, most people had doubts about how far the policy would be taken. Four years later, the regime is still struggling to implement its reforms, but it has at least partly satisfied some of the daily demands of citizens by allowing more Chinese products to be manufactured in North Korea and more Chinese goods to be imported.

Shoes, bicycles, TV sets, beverages and clothes made in China or by Chinese companies in North Korea are helping to satisfy demand, but some disreputable Chinese companies are ruining their country’s reputation by dumping factory seconds and damaged goods on the market.

Over decades of isolation, North Koreans have been suffering not just from food shortages, but from a scarcity of basic consumer goods. In past years, Pyongyang has reportedly asked the South Korean government to donate thousands of tons of soap and clothes, as well as material for the production of 60 million pairs of shoes. In a visit to Pyongyang in November, products such as Colgate toothbrushes, toothpaste and a Japanese facial cleaner were carefully displayed in glass cases bearing price tags equivalent to US$2.60-$5.90, well beyond the financial reach of all but a few North Koreans.

After years of studying China’s experiences, Pyongyang is now gearing up to solicit foreign investment and advanced technologies to modernize its decades-old manufacturing base.

Supply and demand
“Because the supply can’t satisfy the demand, prices of most of the Chinese products simply soar in the North Korean market,” said Su Xiangzhong, chairman of a Tianjin company that founded a beverage-manufacturing joint venture, Lungjin, with a North Korean.

Trade between the two countries increased by 35.4% in 2004, followed by a 35.2% increase in 2005. By the end of October 2006, bilateral trade had reached $1.38 billion, a 4% increase over 2005.

Beijing-based Winner International Industries Ltd was one of the Chinese companies that foresaw North Korea’s consumption potential in 2000. By then, the company had co-founded a joint-venture running-shoe and clothing-manufacturing presence in North Korea. With advanced machinery from Taiwan, its shoe-manufacturing division is now capable of producing 8 million pairs of running shoes, according to an official from the company, who declined to identify himself. The clothing-manufacturing division, he said, has been a supplier to South Korean and Japanese companies. However, he added that orders from the two countries had recently decreased for unknown reasons.

Leather shoes for soldiers are of high quality, but they are not available to the average person. In Pyongyang shops catering exclusively to foreigners, a pair of leather shoes could cost as much as $326. The North Korean government is still soliciting foreign investment and purchasing shoemaking equipment via Chinese companies.

To get around in a country with underdeveloped public transportation, getting a pair of shoes is not enough. Taking advantage of that situation, Tianjin’s Digital Co started making bicycles in Pyongyang in October 2005, after the North Koreans agreed to let the Chinese take a 51% controlling share in the joint venture, virtually a monopoly, for 20 years.

It is estimated that the nation’s demand for bicycles is about 7 million, according to the Chinese media. The company now manufactures some 40 models and 60,000 bicycles annually, with the most popular model costing $26. In coming years, it plans to produce 300,000 bicycles annually and construct another three bicycle plants.

Aside from daily necessities, there are few entertainment options for North Koreans, which means there is a high demand for TV sets. Nanjing Panda, a TV maker, appeared to be the only Chinese company to foresee the emergence of the North Korean market when it invested $1.3 million there in 2002. After four years of operation, its 17-inch black-and-white and 21-inch color TV sets are reportedly the hottest items available in Pyongyang. With Panda products beginning to dominate the local market, it is becoming increasingly difficult for others to import TV sets into North Korea, according to Chinese business people.

The Panda joint venture is now digging up another potential gold mine by manufacturing personal computers (PCs) in North Korea.

In 2003, Chinese non-financial investments in North Korea amounted to just $1.12 million. That total, however, soared to $14.13 million in 2004, and reportedly reached $53.69 million in 2005. According to the Chinese media, there are now about 200 Chinese investment projects operating in North Korea. A Pyongyang-based foreign businessman described the Chinese investors as “by far the largest group by country doing business there, in all kinds of fields – plus they are from one of the few countries with the protection and representation of a big embassy”.

In March 2005, Chinese Premier Wen Jiabao signed an investment-protection agreement with his North Korean counterpart, and the two nations inked five bilateral economic-cooperation agreements between 2002 and 2005.

During North Korean leader Kim Jong-il’s visit to China last January, Wen introduced new economic-cooperation guidelines.

Despite these positive moves, controversy over the role of Chinese businesses has emerged. A Pyongyang-based Western businessman suggested that quite a few disreputable companies “go there with the intention of getting rid of old or damaged goods they can’t sell in China, and rip off North Koreans, who have no way to get their money back”.

“Also, a lot of fake goods come from China,” he added.

Still, more and more Chinese business people are rushing to Pyongyang. Su Xiangzhong, chairman of a Tianjin-based company, noted that his firm is creating a new beverage brand, like China’s Wahaha, in Pyongyang. North Koreans are also very interested in cooperating with Chinese enterprises in manufacturing and mining.

Chinese-made clothes for women and children, low-end and generic-brand household products and sundries, color TVs and PCs are popular products in North Korea.

Li Jingke, a Dandong-based Chinese businessman who runs the China-DPR Korea Small Investor Association, suggested that natural-resource exploitation and manufacturing are the best industries for foreigners to invest in, adding that more investment-friendly policies would likely be introduced in April. By then, he said, Chinese business people might need to become more concerned about unprofessional conduct.

“When North Korea introduces more liberalized policies, competent companies from everywhere will enter the market, which would likely eliminate the existence of those Chinese businessmen who don’t have modern commercial ideas in mind,” Li said.

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Entrepreneur tries to breathe life into the North

Tuesday, January 9th, 2007

Joong Ang Daily
Lee Jung-min
1/9/2007

One of North Korea’s capitalist experiments may be awakening from hibernation. “The North’s National Economic Cooperation Federation and Tumen River Development Limited Company of South Korea have reached an agreement to build a heavy and chemical industry complex in Rajin-Sonbong district,” Oh Myoung-hwan, the president of the South Korean company, said yesterday. “We also agreed to carry out jointly a Mount Paektu tour project.” A letter of intent will be signed in Vladivostok, Russia, today, Mr. Oh said.

Mr. Oh, whose company is headquartered in Vladivostok, said Russian natural resources would be processed by North Korean workers in plants built with South Korean capital and technology. He added that he has informed the Unification Ministry in Seoul of his plans.

The National Economic Cooperation Federation is a North Korean foreign economic agency. Mr. Oh said Ryo So-hyon, the federation’s Vladivostok office head, will sign the letter of intent for the North Koreans.

A government official in Seoul speculated that North Korea is looking for new projects because its nuclear test in October triggered a drop in the number of South Korean tourists visiting Mount Kumgang and U.S. criticism of the Kaesong Industrial Complex has grown.

Mr. Oh said that when the new complex is running, train tours to Mount Paektu would be the next step. Tourists would travel by ship from Sokcho on South Korea’s east coast to Hoiryong and Musan, two harbors in the Rajin-Sonbong area of North Korea’s far northeast.

North Korea established the Rajin-Sonbong Free Economic and Trade Zone in 1991 on the western side of the Tumen River to attract foreign investment. It has been a near-total failure in attracting foreign investment. Mr. Oh said work on the new project would begin in 2-3 months.

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Inter-Korean Visits Jump 15.1% in 2006

Thursday, January 4th, 2007

Korea Times
1/4/2007

The number of inter-Korean cross-border visits climbed 15.1 percent last year from a year earlier despite escalating tensions over North Korea’s test-fire of missiles and the underground detonation of nuclear devices, the Ministry of Unification said Thursday.
A total of 101,708 South and North Koreans visited each other’s country, compared with 88,341 in 2005, according to the ministry.

It said the number did not include South Korean tourists to scenic Mt. Kumgang in the North. Last year, 234,446 South Koreans traveled to the mountain resort, down 21.4 percent from 2005.

The ministry said that 100,838 South Koreans visited the North, while 870 North Koreans visited the South.

It added that the increasing inter-Korean economic exchanges drew 87,845 South Korean visits to the North.

The inter-Korean trade volume jumped 27.8 percent year-on-year to $1.3 billion last year, according to the ministry.

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N. Korea Stresses Economic Revival

Monday, January 1st, 2007

Korea Times
Park Song-wu
1/1/2007

North Korea’s New Year joint newspaper editorial on Monday underlined that it will strive to modernize its economy.

The editorial also said Pyongyang will continue strengthening its defense power by focusing on “songun” or “military-first” policy that enabled it to conduct an underground nuclear test last October.

But the editorial, titled “Usher in a Great Heyday of Songun Korea Full of Confidence in Victory,” did not specifically mention Pyongyang’s nuclear plan or its relations with the United States.

As for ways to revive its economy suffering from sanctions imposed by the U.N. Security Council following the nuclear test, the editorial stressed the importance of agriculture.

“We should, as in the past, keep up farming as the great foundation of the country and make an epoch-making advance in solving the problem of food for the people,” it said.

In a reaction to the North’s emphasis on its economy, South Korea’s Ministry of Unification hoped to see Pyongyang try to improve soured inter-Korean relations to attract economic aid from the South.

“The editorial’s contents are not very much different from last year’s text, but it mentioned economic issues earlier than others,” a ministry official said, asking not to be named. “It seems that Pyongyang will pay more attention to its economy with an idea that it is now a nuclear power.”

The editorial also called for more production of consumer goods and the development of power, coal-mining, metal and rail transport industries to better the life of North Koreans.

The South Korean Ministry of Foreign Affairs and Trade interpreted the North’s failure to mention the future of its nuclear programs as an attempt to take advantage of the six-party talks that came to a halt again after a five-day meeting ended with no tangible results on Dec. 22.

“It is believed that North Korean leaders are taking a wait-and-see attitude because discussions about U.S. financial sanctions are set to resume sometime soon,” a ministry official said, requesting anonymity.

In September 2005, Washington blacklisted Banco Delta Asia in Macau as a “primary money laundering concern” because of suspicions that it was helping the North conduct illegal activities, including counterfeiting and money laundering.

As a result, the bank severed its relations with Pyongyang and froze $24 million in North Korean assets.

Regarding the presidential election to be held in South Korea in December, the North Korean editorial stressed the importance of cooperation between people in the two Koreas to get rid of conservatives in the South who used to back the United States.

The Pyongyang regime also called for loyalty to its leader Kim Jong-il, who will turn 65 this year.

The editorial was carried by the North’s Korean Central News Agency (KCNA), several hours after Kim visited the Kumsusan Memorial Palace in Pyongyang where the embalmed body of his father is kept, Yonhap news agency reported.

Kim was accompanied by several top military leaders, including Vice Marshal Kim Yong-chun, who serves as chief of the army’s general staff, and Vice Marshal Kim Il-chol, a member of the National Defense Commission and minister of the People’s Armed Forces, the KCNA said in a separate report.

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DPRK joint editorial 2007

Monday, January 1st, 2007

Every January 1, three leading DPRK publications (Rodong Sinmun, Josoninmingun and Chongnyonjonwi ) issue a “joint editorial” that is the North Korean equivalent of the “State of the Union Address”…So here are some excerpts from 2007:

Usher In a Great Heyday of Songun Korea Full of Confidence in Victory
Naerna

1/1/2007

A worthwhile advance has begun in the country at the hope-filled New Year.

Last year, 2006, was adorned as a year of great victory, a year of exciting events, in which the dawn of a great, prosperous and powerful socialist nation was ushered in.

Cheers over the victorious Songun idea and politics resounded all over the land last year.

The invincibility and rosy future of the Korean revolution rest on Songun. The army and people of Korea, under the unfurled banner of Songun, have won victory after victory in the showdown with the United States and in safeguarding socialism, and consolidated their self-defensive capabilities for the supreme interests of their country and the destiny of their nation.

That we have come to possess a nuclear deterrent was an auspicious event in the national history, realization of our people’s centuries-long desire to have a national strength no one could dare challenge. Last year’s victory testifies that our army and people were right out and out to have invariably followed the road of Songun over the past 10-odd years in the face of severest trials.

Last year was a year filled with pride, a year in which an epoch-making phase was opened for the building of a great, prosperous and powerful nation.

Gaining great confidence from the dawn of victory ushered in by the Party, our servicepersons and people waged a heroic struggle and thus achieved brilliant successes in all fields. In the tempest of the general advance of Songun revolution, the single-hearted unity of the servicepersons and people around the leadership of the revolution was consolidated in every way possible, and a springboard for a fresh leap forward in economic construction was secured.

Last year witnessed successes indicative of the resourcefulness and superiority of our nation.

Our scientists and technicians, with burning revolutionary enthusiasm and creative talent, performed exploits noteworthy in history–they broke fresh ground for the cutting-edge science and technology and consolidated the country’s strength. Our proud sportspersons achieved outstanding successes in women’s football and other international sports games, displaying to the full the mettle of the nation and bringing a great joy and encouragement to our servicepersons and people. Masterpieces demonstrating the new looks of art and literature of the Songun era were created, and traditions and customs unique to the nation greeted further efflorescence in all domains of social life.

The fact that 2006 was adorned with successes and exploits worthy of recording in the annals of our revolution and nation is a demonstration of the sagacity of our Party’s leadership.

Our Party steadfastly maintained its independent and principled stand even in the trying situation in which the country’s security faced grave challenges, and led the entire Party, the whole country and all the people confidently to a general advance for a fresh leap forward. The leadership of respected Kim Jong Il, who, by dint of correct strategy and tactics, art of outstanding leadership, and unexcelled courage and pluck, coped with the encountering challenges and turned unfavourable circumstances into favourable ones, was a decisive factor in all successes and miraculous events.

On the road of his tireless Songun-based leadership, the overall strength of our nation was remarkably consolidated and the day of a great, prosperous and powerful nation has dawned. The grand celebration last year of the 80th anniversary of the founding of the Down-with-Imperialism Union was a proud display of the fact that continuity of the Korean revolution is definitely assured by Kim Jong Il.

The true record of revolutionary activities of respected Kim Jong Il and his imperishable historical exploits of having raised the position of socialist Korea to a highest level by braving all manner of difficulties in the van holding aloft the great banner of Songun, and adorned the year 2006 as a most glorious year in the history of the building of a Juche-oriented great, prosperous and powerful country, will be handed down to posterity.

The year 2007 will be a year of great changes, a year which will usher in a new era of prosperity of Songun Korea.

Kim Jong Il said:

“It is an unshakable determination of our Party and unanimous desire of our army and people to demonstrate to the whole world the dignity of the nation by building on this land a great, prosperous and powerful socialist country which embodies the Juche idea in an all-round way.”

This year we are greeting the 95th birthday anniversary of President Kim Il Sung as a grand national event.

Kim Il Sung is the founder of socialist Korea, and the eternal Sun of Juche in the cause of the masses for their independence. The glorious history of victorious advance of our socialist Korea and today’s prosperity of Songun Korea, which is demonstrating its dignity to the whole world, are associated with his august name. We must make this year a year of greater efflorescence of his wish for a prosperous and powerful country, a year of brisk activities across the country.

The sacred revolutionary career of Kim Il Sung is a history of Songun-based leadership in that he devoted his greatest effort to the strengthening of the country’s military capabilities. We must celebrate the 75th anniversary of the founding of the Korean People’s Army as an all-people event that demonstrates the invincibility and bright future of the Songun revolution.

Our revolution which started under the banner of the great Juche idea, Songun idea, has greeted a new historic phase. The present new era is a worthwhile era of ushering in an all-round efflorescence of national prosperity on the basis of the victories and success of the Songun revolution registered in the history of the nation. We have the great guiding ideology, invincible single-hearted unity and powerful war deterrent tempered in the flames of the Songun revolution. The present reality, in which all conditions for leaping higher and faster are created, demands that we launch the revolutionary advance more vigorously to achieve the high objectives of the building of a great, prosperous and powerful socialist nation.

“Usher in a great heyday of Songun Korea full of confidence in victory!”–this is a slogan we should hold in struggle and advance.

We should wage a dynamic offensive campaign to build a socialist economic power.

Building an economic power is an urgent demand of our revolution and social development at present times and a worthwhile and historic cause of perfecting the looks of a great, prosperous and powerful nation. We should concentrate national efforts on solving economic problems, so as to turn Songun Korea into a prospering people’s paradise.

The main task in the present general march is to direct primary effort to rapidly improving the people’s standard of living and at the same time to step up technical reconstruction to put our economy on a modern footing and display its potentials to the full.

We should brilliantly realize the noble intention and plan of our Party, which regards the improvement of the people’s standard of living as the supreme principle in its activities.

We should, as in the past, keep up farming as the great foundation of the country and make an epoch-making advance in solving the problem of food for the people. The officials and working people in the agricultural sector should fully discharge their responsibility and role as masters in implementing the Party’s policy on making a revolution in agriculture, and bend a dynamic effort to doing farm work on their own.

We should decisively improve the production of consumer goods by waging a revolution in light industry. We should run light-industry and local-industry factories at full capacity and steadily increase the variety and quality of consumer goods by tapping to the maximum the latent resources and potentials in all sectors of the national economy. We should ensure that the bases of stockbreeding, fish farming and production of primary seasoning built through much effort prove effective so that the people can enjoy their benefit. We should continuously improve distribution of commodities and service work as required by the intrinsic nature of a socialist society and thus evenly provide the people with essential consumer goods of high quality. The officials of all units should pay close attention to supply service work for their employees. The public health sector should implement the Party’s policy on public health to ensure that the people can enjoy more benefit of the socialist health care system.

Power, coal-mining and metal industries and rail transport, the four vanguards of the national economy, must take the lead in building an economic power. Bearing deep in mind a high sense of responsibility they have assumed in the building of an economic power, the officials in the power and coal-mining industries should decisively ease the strain on electricity and coal. The sector of metal industry should increase the production of iron and steel by consolidating its Juche character and accelerating technical reconstruction. The sector of rail transport should fully meet the ever-growing demand for transport through efficient organization and command and iron discipline and order. National efforts should be geared to bolstering up the four vanguard sectors with the whole country engaged in giving an active assistance to them.

With a foresight into the distant future of economic development, we should give priority to geological prospecting, develop energy and other resources under a long-range programme, and treasure and protect the country’s resources as best as we can. Mining, machine-building, chemical, building-materials and forestry sectors should make steady efforts to revitalize their production.

Monumental edifices and other major projects of the Songun era should be built on the quality-first principle as required by the new century. The building sector should observe technical regulations and apply standard building methods in construction, and make buildings formative and artistic.

Cities, including Pyongyang, and rural villages across the country should be built up as required by the Songun era and land administration should be undertaken efficiently, to turn the country into a socialist fairyland.

The Juche-oriented idea, theory and policy of our Party on the economy are a definite guideline in the construction of an economic power. We should solve all problems arising in improving the economic work and the people’s standard of living on the basis of our Party’s idea and theory on the economy, which reflect the requirements of the Songun era, the IT era.

We should run the economy by our own efforts, our own technology and our own resources with a determination that we must build a socialist paradise by ourselves. We should make the most of the solid foundations of production and potentials existing in all sectors of the national economy. We should smash the imperialists’ despicable schemes for sanctions and blockade by dint of strong self-respect and pluck.

Thoroughgoing implementation of the Party’s policy of attaching importance to science and technology is a sure guarantee for the construction of an economic power. Latest science and technology, combined with the great revolutionary ideas of our Party, will bring about startling changes. All sectors and units should put themselves on a modern footing by drawing on the latest science and technology. Scientists and technicians should develop the cutting-edge science and technology in a short span of time in the revolutionary spirit of soldiers and in their way of work, so as to definitely guarantee the building of a great, prosperous and powerful nation by means of science and technology. All sectors and units should bring science and technology close to production, and unfold a mass drive for technical innovation.

We should undertake technical upgrading of the national economy, production and management activities by the method of motivating competent scientists and technicians. Effort should be channelled to education, so as to train in a great number talented people who will shoulder the building of a great, prosperous and powerful nation.

Holding aloft the banner of Songun, we should continuously exert a great effort to strengthening the defence capabilities.

Songun is the life and soul of our country and people and the dignity of our nation. In the future, too, we must hold fast to the Juche-based Songun idea and line as an invariable guiding principle of the Party and the revolution. We must never forget the trying days when we had to defend the lifeline of socialist Korea with a do-or-die determination, and defend the achievements of the Songun revolution gained at the cost of blood.

The People’s Army that constitutes the key force in the independent defence capabilities should be steadily strengthened politically and ideologically, militarily and technically.

It is the pillar of the socialist military power and the strong vanguard for national prosperity.

It should make a sweeping turn in its efforts for combat readiness and efficiency this year marking the 75th anniversary of its founding, so as to continually brighten its glorious history and tradition as an elite revolutionary army that has won victory after victory under the command of the generals of Mt. Paektu.

The patriotic zeal and militant mettle of the People’s Army should be given full play in the place of the Party’s concern, the forefront of socialist economic construction. The men and officers of the People’s Army must give full scope to their revolutionary soldier spirit, the might of which has been tempered in the crucible of the Songun-based revolution, exalting their honour as the major driving force of the Songun-based revolution in the struggle for national prosperity and people’s welfare.

It is important to develop rock-solid our great army-people unity, the first of its kind in the world. The climate of people supporting the army and the latter helping the former and the oneness of army and people in terms of ideology and fighting spirit should be promoted. Constant importance should be attached to the military affairs so that all the people would acquire military knowledge and the entire country be turned into an impregnable fortress. Primary efforts should be concentrated on the development of munitions industry for steady consolidation of the material foundations of our military capabilities.

We should strengthen in every way the unity of revolutionary ranks in ideology and purpose, so as to demonstrate the might of our country as a political and ideological power.

The revolutionary leadership is the centre of unity, centre of leadership, and also the symbol of strength and dignity of Songun Korea. The whole Party, the entire army and all the people should loyally uphold the idea and guidance of the leadership, cherishing an unshakable spirit of defending their leader at all costs. They should all become ardent fighters, who trust and follow only their leader and share his idea, purpose and destiny on the road of arduous struggle for accomplishing the Juche-oriented revolutionary cause.

Socialist construction advances amidst sharp class struggle. We should deal a merciless blow to the enemy’s psychological warfare and their attempt for ideological and cultural infiltration aimed at undermining socialism of our own style from within. The revolutionary principle, the principle of the working class, should be strictly maintained in all fields of the revolution and construction.

The present stirring situation demands that a radical innovation be made in ideological education. We should get rid of formalism and stereotype in ideological work, to conduct all types of ideological work in a novel manner as required by the Songun era. Positive examples manifested among Party members and other working people should be found out and given wide publicity. Art and literary works, mass media and all other information and motivational means should be enlisted in aggressive ideological education.

A decisive guarantee for victory in this year’s campaign is in undertaking the organizational and political work and command in a revolutionary way, arousing the entire Party, the whole country and all the people to the general advance for the thriving country.

The Party should be strengthened, and the militant role of Party organizations enhanced continuously.

The entire Party should display to the full a strong sense of organization and discipline by which it moves as one in accordance with the ideas and intention of its leader.

Our Party is a party striving to build a great, prosperous and powerful nation, and a mother party that serves the people. All Party organizations, in line with the mission of our Party and its fighting objectives, should gear their work to bringing about radical innovations in economic work and improving the people’s standard of living.

To work miracles and make innovations in this year’s general advance, Party organizations at all levels should conduct the Three-Revolution Red Flag Movement as the work of Party committees and push ahead with the movement by motivating the working people’s organizations.

It is important to develop a higher sense of responsibility among the officials of economic institutions, including the Cabinet, and enhance their role in bringing about a fresh turn in the building of a great, prosperous and powerful socialist nation.

The Cabinet should carry on economic operation and management in a responsible manner with strategic insight in conformity with its important position and mission to steer the socialist economic construction.

This year’s general advance is calling on young people to make unprecedentedly heroic efforts and perform great feats.

They are masters of a great, prosperous and powerful nation of the future and the most vital combat unit in implementing the cause of the Party. Greeting the 80th anniversary of the formation of the Young Communist League of Korea, youth league organizations and young men and women should staunchly defend President Kim Il Sung’s achievements in the Korean youth movement and the traditions of the movement and add brilliance to their honour as a reserve force and a special detachment of the Supreme Commander.

The youth should volunteer to work at labour-consuming sectors including the construction site of the Paektusan Songun Youth Power Station to display their mettle and feats. They should render distinguished services for the Party and motherland to become youth heroes and patriotic youth praised by the people.

Organizations of trade union, agricultural workers’ union and women’s union should intensify ideological education of their members in line with the requirements of the developing reality and inspire them to the general march for the building of a great, prosperous and powerful nation.

The dawn of reunification is breaking on this land with over six-decade history of division.

Last year witnessed the demonstration of the vitality of the independent reunification movement and the might of the June 15 reunification era. Holding aloft the banner of the North-South Joint Declaration, and under the slogan of independent reunification, peace against war and great national unity, all the fellow countrymen unremittingly followed the road to national reunification, foiling the frantic anti-reunification moves towards war of bellicose forces within and without. Last year’s reality reaffirmed that the Korean people of the same stock are a dignified nation with a strong sense of national self-respect and no force on earth can check the current of national history advancing towards a great, prosperous and powerful reunified nation.

The three principles of national reunification–independence, peaceful reunification and great national unity–put forth by President Kim Il Sung, the Sun of the nation, are the immutable guideline in the cause of reunification, and it is the unshakeable will of Kim Jong Il to realize reunification in our generation true to the instructions of the President.

This year all the fellow countrymen should hold high the slogan, “Add brilliance to the June 15 reunification era by attaching importance to the nation, maintaining peace and achieving unity!”

The stand of attaching importance to the nation should be maintained steadfastly.

To attach importance to the nation is a basic stand and motto the Korean compatriots who are subjected to division and war by foreign forces should hold fast to. Neither outside forces nor ideal can be put before national interests. National demand and interests should be regarded as an absolute yardstick in dealing with all the affairs, and the principles of maintaining independence and giving priority to and defending the nation in the face of any pressure and blackmail of outsiders should be advocated. Inter-Korean relations and reunification movement should be developed in accordance with the ideal of “by our nation itself”. Proud of being a homogeneous nation with a 5,000-year-long history, all the Korean compatriots should preserve the Juche character and national identity and categorically reject the US interference in, and obstructive manoeuvres against, the internal affairs of the nation.

The banner of defending peace should be upheld.

Peace is a key to the reunification of the country and common prosperity of the nation. Today the United States is desperately clinging to war moves against the DPRK and the country’s reunification in an attempt to check the current trend on the Korean peninsula towards reunification by the Korean nation itself and realize its wild ambition for domination of the whole of Korea. Due to the vicious schemes of the United States, peace and security on the Korean peninsula are under grave threat.

To safeguard peace is a just patriotic undertaking to defend the land for the existence of the nation, and victory in this effort is in store for the Korean people who are ready to sacrifice themselves to the defending of national independence. The entire Korean people should turn out in the struggle for peace against war in order to smash the military pressure, war exercises and military buildup that threaten our nation. They should see through the US hegemonic and aggressive nature, and launch a dynamic campaign to drive the US occupation troops, the root cause of war, out of south Korea.

The entire nation should unite.

Unity is a way to national existence and prime mover of the cause of the country’s reunification. Koreans in the north, south and abroad should bring the atmosphere of reconciliation and unity to a crescendo under the banner of independent reunification, and further promote solidarity and alliance between different reunification movement organizations with the June 15 All-Korean Committee as the parent body.

Opposition to conservatives in south Korea is part of the effort for realizing great national unity and a decisive factor for the advance of society and reunification movement there. The “Grand National Party” and other reactionary conservatives are now making desperate efforts to realize their traitorous attempts and ambition for regaining of power with the help of the outside forces. Broad segments of the south Korean people desirous of independent and democratic society and the country’s reunification should realize a broad anti-conservative alliance and launch an energetic campaign on the occasion of this year’s “presidential elections” to decisively destroy the treacherous pro-US conservative forces.

The June 15 North-South Joint Declaration is a beacon of hope that has paved the way for national prosperity. All the Koreans in the north, south and abroad should strive to implement the joint declaration without letup in the face of any trials and difficulties, and smash every attempt to emasculate and obliterate it.

Songun politics is an all-powerful sword for national defence that has proved its invincible might and patriotic character in the practical struggle to shape the destiny of the nation. Cherishing the boundless national pride and self-respect in the present reality in which the national dignity is being demonstrated worldwide on the strength of Songun politics, all the fellow countrymen should staunchly support Songun politics.

All the fellow Koreans in the north, south and abroad should bring about a heyday of the cause of independent reunification by turning out as one in implementing the three tasks–attaching importance to the nation, defending peace and achieving unity–with confidence in and optimism about the rosy future of a reunified country.

The present trend of global situation shows that the strong-arm policy and high-handedness of the imperialists are doomed to failure and that the people’s struggle for independence can never be checked. We will remain faithful to the last to our historic mission in safeguarding global peace and security and advancing the cause of independence of humanity, and continue to intensify international solidarity with the progressive peoples under the ideals of independence, peace and friendship.

A great era of prosperity is smiling on our motherland.

Kim Il Sung’s Korea is a formidable socialist power that is dignified by a great idea, powerful with the single-hearted unity and ever-victorious with the strong military capabilities. No force can obstruct the vigorous advance of our army and people, who are endeavouring to bring earlier the day when they would enjoy happiness in socialist paradise with nothing to envy in the world.

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Inter-Korean Projects Gasping for Air

Friday, December 29th, 2006

Korea Times
Kim Yon-se
12/29/2006

Hyundai Group is struggling to normalize its inter-Korean businesses, including tours to Mt. Kumgang and operation of the Kaesong Industrial Complex in North Korea.

Due mainly to North Korea’s nuclear test last October, the number of South Korean tourists to Mt. Kumgang stood at less than 250,000 this year, falling short of the group’s initial goal of 400,000.

The figure is smaller than 301,822 posted in 2005 and 272,820 posted in 2004.

Furthermore, Hyundai Asan, the tourism unit of the group, had to conduct manpower restructuring and delayed monthly payments to some employees amid worsened profitability this year.

The Mt. Kumgang tours accounts for about 70 percent of the total sales of Hyundai Asan and the company expects it will manage to avoid seeing operating losses, compared with operating profits of 5.6 billion won last year.

Amid political factors, such as complaints from the United States about the inter-Korean business, company officials are concerned that Hyundai Asan is facing another deficit.

It reported operating losses of 10 billion won or more per annum over the past few years _ 29.04 billion in losses in 2001, 38.54 billion won in 2002, 57.34 billion won in 2003 and 10 billion won in 2004.

Regarding the Kaesong Industrial Complex, the U.S. had speculated that payments to North Korean employees there are flowing into military funds to produce weapons. But the allegations have been said to be groundless after the Ministry of Unification made public relevant documents.

A major difficulty is that the South’s conglomerates including Samsung have little willingness to invest in the complex amid the growing uncertainties.

Expressing anxiety over external and internal difficulties, a Hyundai Group official said, “We don’t care about interference from the U.S. The development of inter-Korean businesses and relations are assignments for Koreans in the South and North. No group except us will do that.’’

In the free trade agreement (FTA) talks between South Korea and the U.S., the latter said it will not regard goods from Kaesong as free trade deal items.

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Graphite mine in North open in ’07

Wednesday, December 27th, 2006

Joong Ang Daily
Jung Ha-won
12/27/2007

In early 2007 South Korea is expected to begin its first graphite shipments from a new mine in North Korea that has been co-developed by the two countries since 2003.

The mine development project in Jeongchon, which cost $10.2 million, was completed in April, but electricity shortages and diplomatic tension over North Korea’s nuclear test delayed testing operations for months.

According to Korea Resources Corp., South Korea’s state-run mineral developer that took part in the project, the new mine, located near the western part of the border with South Korea, recently began test operations, and graphite shipments will begin early next year.

“North Korea authorities recently guaranteed a stable supply of electricity,” said an official with Korea Resources.

The mine is expected to produce about 3,000 tons of graphite a year, and Korea Resources Corp. plans to bring about 1,830 tons of graphite, or 20 percent of annual production, to South Korea each year for next the 15 years. The firm is also involved in an iron ore mine development project in the North’s Deokhyun, North Pyeongan province.

North Korea is known to have more than 200 varieties of minerals worth about 2.2 quadrillion won ($2.4 trillion) still unexplored in its mountainous areas. Chinese companies have wasted no time exploring those resources, with the North Korean government thirsty for cash and outside investment. China’s state-run steelmaker, Tonghua Iron and Steel Group, last year was granted rights to develop the Musan iron ore deposit in North Korea, the largest open-air iron mine in Asia, for the next 50 years. North Korea also granted exploration rights for more than 10 mines to China’s Wookwang Group and other Chinese developers.

South Korea has been sluggish by comparison, due to political issues and a lack of infrastructure, such as roads and electricity. There remain untapped resources in the reclusive North.

“There is a wealth of magnesite buried in the Dancheon area,” said the Korea Resources Corp. official. “We will carefully review the plan to explore the area.”

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Is Kim Jong Il signaling shift in policy?

Wednesday, December 27th, 2006

It depends on who you ask.

As many DPRK-watchers are aware, Kim Jong Il’s “On the Spot Guidance” trips (OSGs) are importnat for several reasons.  Aside from giving Kim the ability to bypass the normal bureaucratic informaiton chanels and get a better (although not accurate) impression of on-the-ground conditions, they serve as powerful signals to military and party functionaries who see them on TV or read about them in the media.  Not only do these OSGs signal where Kim is directing his energies, they signal who he is devoting them to.  Usually the names of functionaries who are joining him are reported in the North Korean press.

On 12/11/2006, the Daily NK reported that Kim has shifted his focus from military sites to economic development sites.  If so, this would be a positive developent (article available at bottom).

Today (12/27/2006), Yonhap reports another dake on the data:

North Korean leader Kim Jong-il appeared at 66 public functions related to his country’s armed services this year although he significantly cut back his appearances amid international unrest over the communist nation’s missile and nuclear tests.

As of Tuesday, Kim had made 99 public appearances, down from 121 during the same period last year.

 

Daily NK
12/11/2006
Kim Yong Hun

Kim Jong Il has been gathering much interest following the nuclear experiment. In the past, he was known for making visits to military grounds, but recently has been inspecting grounds of economic development such as the farms.

More specifically, since the reconvening of the six party talks last month, Kim Jong Il has been making vigorous public outings 3 times a week. This month already he has made 5 inspections alone. On the other hand, after the missile launch last July, Kim Jong Il concealed himself for 40 days and made only 3 public outings following the nuclear experiment in October.

Last month, Kim Jong Il made 13 onsite inspections, of which 4 were made to military grounds and 9 inspections focused on economic development areas such as industrial sites, power plants and farms.

He visited sites such as Ryongsung Machine Complex in Hamheung, Heungnam Fertilizer Complex, Hamheung Chemical Industry University, Geumjin River Heungbong Youth Power Station in Hamjoo-gun, the construction site of Gumjin River Guchang Power Station in Jeongpyong-gun, and Kwangpo Duck Farm. Further within this month of December, he is known to have made visits to sites such as the construction site of Yesung River Power Station in North Hwanghae-province, Rice Collective Farm in North Hwanghae-province.

North Korean Central News Agency proclaimed Kim Jong Il’s onsite visits, “Hamkyung is the heart of our industries such as chemical, machinery and mining. As a result, it is responsible for a greater part of our nation’s economic development.”

For now, it has been analyzed that Kim Jong Il’s active visits symbolize a sigh of relief having thrown the “reconvening six party talks” card on the table, following the threat of national decline from the U.N. Security Council’s North Korea resolution and the continuous U.S’ financial sanctions.

Also, it seems that he carries a hope that changes will inevitably be made to the Bush Administration’s North Korea policy with the victory of the Democrats at the recent election. In addition, it was suggested that these regional tactics would be employed until the end of the 2008 presidential election, while proclaiming reconvening of six party talks, “reduction of nuclear armaments” and removal of financial sanctions to subside the intensified threat from the missile launch and nuclear experiment.

Moreover, it has been analyzed that with the unexpected suspension of food assistance and increased economic sanctions by the international community resulting from the missile launch and nuclear experiment, this attempt to look after the military in association to military politics and showing interest in the economy is to further urge “self-revitalization” and intercept in the disturbances by citizens.

According to a North Korean inside document “Lecture materials for officials and military” that was publicized on Donga Ilbo last 6th contained the following information “Just as we succeeded in developing nuclear armaments and evaded U.S. threat, now we are able to focus on economic development and the improvement of our people’s lifestyle.”

Regarding this, Professor Nam Sung Wook of Korea University said in a telephone conversation with the DailyNK “Kim Jong Il’s active movement’s construes that the threat on the nation has pacified and suggests that in future he will go about with normal activities” and “In particular, he will probably focus on revitalizing the economy.” However, he predicted “There are always orders but it will be difficult to expect much” and “From now on, North Korea will probably move towards its old ways.”

In fact, according to sources inside North Korea, last month North Korean authorities held meetings around the nation targeting soldiers and citizens proclaiming that “With the success of the nuclear experiment, in future we will focus on reviving our republican economy.”

On the other hand, Kim Jin Chol (pseudonym) who defected in 2005 said “Kim Jong Il will only be making onsite visits to protect his image and show that he is looking out for the people who are experiencing difficult times due to the nuclear experiment and such” and alleged “On the whole, North Korean citizens know that these acts by Kim Jong Il are only for “show” and so did not anticipate very much.”

Kim said “Kim Jong Il’s onsite visits are basically to gather support and merely to make orders” and criticized “Until now, North Korea has not adopted any fundamental measures but has only advocated ‘Self-revitalization.’”

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