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Canada to adopt DPRK sanctions

Thursday, October 28th, 2010

UPDATE (10/31/2010): According to CTV News:

The head of the Canadian Security Intelligence Service quietly told a crowd of insiders he’s worried about North Korea and Iran surreptitiously trolling Canada for components to build an atomic bomb.

In a speech to academics and former intelligence officials, CSIS director Dick Fadden spoke of the spy service’s “active investigations” of people trying to procure nuclear materials.

The threat of weapons of mass destruction is an “area where we have to worry far more than we did not too long ago,” Fadden said.

“North Korea and Iran being people that we worry about the most.”

Fadden made the unusually candid comments in a previously unreported — and still partly secret — address to a late May gathering in Ottawa of the International Association for Intelligence Education.

The CSIS director also elaborated on his concerns about foreign interference in Canadian politics, as well as the threat of cyberterrorism. In addition, Fadden mused aloud on whether simply jailing homegrown terrorists is a real solution to the problem of radicalization. And he told the audience India has more influence in Afghanistan than Canada and its major coalition partners combined.

ORIGINAL POST: According to CTV:

Canada is adopting tough new sanctions against North Korea intended to demonstrate to Pyongyang that “its aggressive actions will not be tolerated.”

Foreign Affairs Minister Lawrence Cannon announced the new restrictions Thursday.

Under the new controlled engagement policy Canada’s relations with North Korea will be restricted to just a few areas, Cannon said.

Regional security concerns, human rights and humanitarian issues, inter-Korea relations and consular issues are now the only acceptable topics of contact between the two countries, Cannon said.

“All government to government co-operation or communication on topics not covered under the controlled engagement policy have now stopped,” Cannon said.

Cannon also announced new economic sanctions that will soon be put into place.

He said all imports from and exports to North Korea will be halted, apart from certain humanitarian exceptions.

There is also a ban on investment in North Korea by Canadians or people in Canada.

The sanctions also restrict the provision of financial services and the transfer of technology to North Korea.

All North Korean ships and aircraft are also banned from either landing in Canada or passing through its airspace, Cannon said.

“Canada takes a principled stand against those who recklessly commit acts of aggression in violation of international law,” Cannon said.

“The adoption of a controlled engagement policy and the imposition of special economic measures send a clear message to the North Korean government that its aggressive actions will not be tolerated.”

Canada has taken a tough stance with North Korea following the sinking of the Cheonan, a South Korean navy ship, earlier this year.

Forty-six sailors were killed when the ship went down. A multi-national investigation concluded the warship was sunk by a North Korean torpedo.

In the wake of the attack, Ottawa announced tougher diplomatic and trade restrictions, suspended high-level visits from officials and joined in the international condemnation of the attack.

Cannon on Thursday called on Pyongyang to “improve its behaviour in complying with its obligations under international law.”

“These sanctions are not intended to punish the North Korean people. The sanctions we are announcing today are aimed directly at the North Korean government,” he said.

The level of trade between the DPRK and Canada is minimal, so these actions are more symbolic than anything else.

Though the two countries exercise diplomatic relations, there is no DPRK embassy in Canada and vice-versa.

Read the full story here:
Ottawa drafting ‘tough’ new sanctions for North Korea
CTV
10/28/2010

Posted in Foreign direct investment, International trade, Nuclear | Comments Closed

Six party dance continues…

Friday, October 15th, 2010

News from North Korea:

1. North says it will abide by 2005 denuking pact, N.Korea ‘Ready to Implement Six-Party Agreement’

2. N.Korea Seeks to Woo U.S. Through Private Experts

News from the US:

1. U.S. says won’t remove sanctions on DPRK for nuclear talks

And from South Korea:

1. North Korea’s ‘Peace Offensive’ Won’t Yield Dialogue, Hyun Says

2. Seoul urges North Korea to ‘play up’ to what it received

Posted in Nuclear | 1 Comment »

Lankov on the DPRK’s nuclear history

Sunday, October 10th, 2010

According to the Korea Times:

In Oct. 2006, a nuclear test was conducted in the remote mountainous area of North Hamgyeong Province, North Korea. This test did not come completely out of the blue. The North Korean government issued an official warning, thus becoming the first nation in history that gave prior notification about a coming nuclear weapons test. This openness might sound strange since we are talking about the world’s most secretive country, but it agrees well with the general character of the North Korean nuclear program. From its inception, the program was largely (but not exclusively) for show, it was aimed at impressing the outside world in order to manipulate it and get what the North Korean leaders wanted to get.

Even though North Korea joined the nuclear club only recently, its nuclear program has long history. It has remained the center of international attention since around 1990, but it began much earlier.

It was the mid-1950s when the first North Korean scientists arrived to work and study in the Joint Institute of Nuclear Research in the Soviet city of Dubna, not far from Moscow. This institution was created by the USSR or former Soviet Union for joint international research in nuclear physics, and until the early 1990s some 250 North Korean scientists underwent training there. Soon afterwards, in 1959 the former Soviet Union and North Korea signed their first agreement on cooperation in nuclear research. A similar agreement was concluded with China as well (Pyongyang never puts all its eggs in one basket!).

In the 1960s, the North Korean version of Los Alamos began to take shape. This role was assigned to the city of Yongbyon, a rather small town, located some 90 kilometers to the north of Pyongyang. It is interesting that, for reasons of greater secrecy, the nuclear research facility was called the “Yongbyon furniture factory.” The major article of infrastructure of this “furniture factory” was not a saw-mill but rather a small Soviet-designed research reactor, completed in 1965. In the 1970s, the North Korean scientists independently modernized the reactor, increasing its output.

There are few doubts that from the very early stages Pyongyang leaders seriously considered the possible military applications of their nuclear research program. But it seems that the North Korean nuclear program made a decisive turn towards military applications in the 1970s. At that time, South Korea was working hard to develop nuclear weapons of its own. For the North, which has always had good intelligence about its arch-enemy, these intentions was hardly a secret, so it seems that around 1975 the North Korean political leaders decided not to lag behind and sped up their own nuclear program.

However, the major obstacle on the path to the acquisition of nuclear weapons was the position of the former Soviet Union. Moscow took non-proliferation seriously, and did everything to control Pyongyang’s nuclear ambitions (incidentally, Washington treated Seoul’s nuclear plans in much the same manner). China also did not want a nuclear power across its border, so the usual North Korean strategy of playing Beijing against Moscow would not work in this case.

The Soviets made their continuing cooperation conditional on full-scale participation in the non-proliferation regime. In exchange for compliance, North Korea was promised technical assistance in building a nuclear power station of its own. Such a station was indeed a good option for a country which heavily depended on imported oil for power generation. Thus, Pyongyang bowed to the Soviet pressure complied and in 1985 signed the Non-Proliferation Treaty while secretly continuing with its nuclear weapons development efforts.

But soon the world changed. The communist bloc that both controlled Pyongyang’s nuclear ambitions and provided it with aid, collapsed around 1990. The foreign aid almost disappeared, and Pyongyang had to survive somehow in an increasingly hostile world.

The North Korean leaders came to a conclusion that in their peculiar situation the Chinese style policy of reforms would be too risky. Indeed, in a divided country, with South doing so much better than the North, attempted reforms were likely to produce German-style collapse, not Chinese-style economic boom. So, in order to keep their power and privileges the North Korean leaders had to avoid any changes in the system. It was a rational choice for them, even though this policy choice condemned hundreds of thousands to death by starvation and completely ruined the already weak economy.

Since the country was stuck with a remarkably inefficient economic system, it could not feed itself, so it badly needed foreign aid ― a lot of it. But the ruling elite, the few hundred families around the Kim’s hereditary dictatorship, also knew that the aid should come without too many conditions attached and, above all, with as little monitoring as possible. They needed food, above all, to feed the privileged and politically significant regions and social groups, leaving others to their sorry fate. Since a riot in the capital would be deadly dangerous for the regime, Pyongyang should be given some food. The police and elite military units should eat well, too, since their loyalty was vital for the stability of the regime. At the same time, the survival of, say, miners at some distant mining town was never a high priority for Pyongyang decision makers.

However, getting large-scale aid without many conditions would be a difficult, almost impossible task had not Pyongyang had in its disposal the already well advanced military nuclear program. From around 1990, the program became the major diplomatic tool which was used with the greatest skill in order to insure the continuous influx of foreign aid.

This is not to say that the nuclear program had no military significance whatsoever ― Pyongyang had some reasons to be afraid of a foreign attack. Pyongyang leaders were correct when they say privately that Hussein would probably still be living in his palace, if Iraq indeed had nuclear weapons. Nonetheless, from the early 1990s the major rationale behind the program has been not military deterrence, but rather diplomatic blackmail.

From around 1990, Pyongyang began to arrange leaks about its nuclear weapons program, while officially denying its existence. It threatened to withdrew from the non-proliferation treaty, and its officials promised to transform Seoul into a “sea of fire” if their demands would not be met.

The strategy worked. In 1994 the strangely named “Agreed Framework” treaty was signed in Geneva. An international consortium where the U.S. and South Korea were major donors, agreed to provide North Korea with light water reactors for power generation (those reactors cannot be used for production of weapon-grade plutonium) and also promised regular shipments of fuel oil. In exchange, North Korea promised to freeze its military nuclear program and accept international inspections of its nuclear facilities. It is widely believed that the U.S. negotiators were ready to give generous concessions because at that time they assumed that the North Korean regime would collapse soon. They were wrong: to the surprise of foreign observers, Kim Jong-il managed to stay in control of his starving country.

The indirect impact of the nuclear program was great as well. In the late 1990s and early 2000s, North Korea got what it needed: a lot of foreign aid without too many monitors. One can doubt whether the amount of aid would have been so large, had North Korean not been seen as a potentially nuclear country.

The so-called “second nuclear crisis” erupted in 2002 when it was discovered that North Koreans were cheating: they were secretly pursuing a uranium enrichment program. This was used as a pretext to the discontinuation of aid. After few years of unsuccessful negotiations, the North Korean diplomats decided to raise the stakes, and in October 2006 the first nuclear test was conducted. It worked: in merely few months, the U.S. agreed to make important concessions and aid was resumed. A new hike in tensions produced a new nuclear test in 2009.

So, by now the nuclear crisis has continued for two decades, and it seems that it might easily continue 25 years. The North Korean government understands that a nuclear weapon is their major diplomatic card, and they are unlikely to surrender it under any circumstances. The outside world is disunited and, frankly, lacks any means to influence Pyongyang. So, we are quite likely to see more nuclear tests (largely successful) and more nuclear negotiations (largely unsuccessful) in the years or even decades to come.

Satellite imagery recently revealed new construction at the Yongbyon facility.

Read the full story here:
North Korea conducted first nuclear test in 2006
Korea Times
Andrei Lankov
10/10/10

Posted in China, Energy, Nuclear, Russia | Comments Closed

Myanmar-DPRK collaboration

Monday, September 27th, 2010

There is an interesting article in the Bulletin of Atomic Scientists:

Article Highlights
1. The idea that North Korea and Myanmar are collaborating on a nuclear weapons programs represents only one possible scenario among several that deserve closer examination.

2. Myanmar’s goal might be to improve its missile program or trade in illicit technology rather than build nuclear weapons.

3. Myanmar’s receipt of illegally-exported or questionable dual-use items should cause the international community to reexamine export controls and policies specific to trade with the Southeast Asian country.

Article Text:

Is Myanmar developing nuclear weapons, perhaps with the help of North Korea? That worrisome possibility, prompted by Myanmar’s receipt of dual-use technology via an illegal North Korean procurement network, has garnered considerable speculation. Compelling evidence amassed in reports published this year by the Institute for Science and International Security (ISIS), the Democratic Voice of Burma (DVB), Jane’s Intelligence Review, and Al Jazeera indicates that, as the ISIS report put it, “There remain sound reasons to suspect that the military regime in Burma [Myanmar] might be pursuing a long-term strategy to make nuclear weapons.”1

The possible existence of such a program cannot and should not be discounted, but it is far from the only explanation that can account for Myanmar’s unusual imports. The dual-use technology sent to Myanmar — including a cylindrical grinder and magnetometer — are considerably beyond the country’s current technical capabilities, according to the DVB report. Such sophisticated devices, which could be used to produce nuclear- or missile-related parts, may point to a well-planned, long-term nuclear weapons program, perhaps assisted by North Korea.

However, alternate explanations also warrant consideration to better understand the nature of DPRK-Myanmar trade in such technologies. Plausible alternative scenarios include the use of Myanmar as a transshipment hub for items ultimately destined for North Korea, an evolving conventional missile program, procurement errors or other planning missteps, or some combination of these possibilities.

Myanmar as a transshipment hub. In late 2009, the Yokohama District Court in Japan found the president of Toko Boeki (a small Tokyo-based trading company) guilty of coordinating illegal WMD-related exports to Myanmar.2 Investigators determined that Toko Boeki had acquired cylindrical grinders and a magnetometer at the behest of New East International Company, a North Korean front company based in Hong Kong.3 Although New East International directed Toko Boeki to deliver the equipment to Myanmar, it is possible that the devices were not intended to remain there; Myanmar may have been a transfer point before the goods were shipped to another location — perhaps even North Korea.

Indeed, Myanmar has distinct advantages to North Korean procurement networks that want to circumvent sanctions and illegally divert dual-use equipment to Pyongyang. (See Editor’s Note.) Although it is also subject to sanctions, Myanmar is not as isolated as North Korea, and legitimate shipments originating from Japan, for example, can provide suitable cover for WMD-related deliveries.

In addition, Myanmar’s flourishing illegal trade networks — including drug and human trafficking — represent a familiarity with the kind of knowledge required to covertly transship deliveries to countries with more advanced WMD programs (such as North Korea). The rampant corruption associated with the military regime further enables illicit trade.

The revival of diplomatic and military relationships between Myanmar’s ruling junta and Pyongyang is another reason to consider whether North Korea, and not Myanmar, may have been the final destination for the dual-use equipment.4 Chartered or diplomatic air transport, necessary to ferry officials between capitals, is less susceptible to interdiction, offering an ideal conduit for the transfer of some types of dual-use equipment from Myanmar to North Korea. A UN panel of experts on Resolution 1874 (which strengthened sanctions on North Korea after its second nuclear test) highlighted such a scenario in a May 2010 report PDF, suggesting that Pyongyang may turn to illicit air cargo shipments as a preferred mode of transport for its illegal trade.

A conventional missile program. Myanmar may be an ideal transshipment hub, but reports from ISIS and DVB indicate that dual-use machine tools from Japan and Europe are not simply being stored in Myanmar, but also used there. This could indicate that the devices may actually be intended for use in Myanmar’s indigenous missile program.

Although Myanmar’s overall technological development appears limited in comparison with North Korea, the majority of the questionable dual-use items received by Myanmar may truly be for its own missile development effort. Acquisition of conventionally armed short- and medium-range ballistic missiles would provide the junta with a significant strategic advantage over regional and domestic rivals, and short-range missiles could be useful to fight insurgent groups that challenge the junta’s authority.5

Further, Myanmar’s defense industry already produces artillery and mobile rocket launchers, and the country reportedly has spent more than a decade improving its missile production capabilities.6 This practical experience could facilitate Myanmar’s eventual creation of larger missiles, such as Scarabs or early Scud derivatives. Myanmar cannot yet produce these missiles, but the equipment identified in the Toko Boeki case and in the DVB report could be used to help it develop more advanced missile designs.

Alternative scenarios. It is also possible that, after some of the questionable dual-use equipment had already been received, a North Korea-Myanmar proliferation relationship fell into disarray due to the enormous complexity that plagues all WMD programs. Payment disputes (similar to those PDF that held up Myanmar’s negotiations with Russia for a 10 megawatt research reactor) could be one cause.7 Myanmar’s acquisition of equipment beyond its technical capabilities could also be explained by a procurement error or an overestimation of indigenous know-how, as the DVB report acknowledges. In 2002, Myanmar expressed interest in buying a mini-submarine from Pyongyang, according to Jane’s, but abandoned the idea due in part to its lack of expertise.8

The transfer of such advanced equipment could also be an example of aggressive sales of unsuitable technology to a naïve junta, similar to Geoffrey Forden’s suggestion that North Korea has been selling subpar missile technology to states in the Middle East. It is also plausible that a core group of scientists has the ear of the junta — as well as its funding — and may have over-promised deliverables. These scientists might include U Thaung, the pro-nuclear energy minister of science and technology, and Ko Ko Oo, who is director general of the Department of Atomic Energy and former director of the Department of Technical and Vocational Education (DTVE). The two departments shared the same address, phone number, and fax number until Myanmar’s capital was moved to Naypidyaw, and the DTVE is an end-user of some of the questionable dual-use equipment that Myanmar has acquired, according to ISIS.9

Another possible scenario is that Myanmar could be “warehousing” devices for North Korea under a barter agreement that allows Myanmar to train personnel on the dual-use equipment (and thereby gain valuable hands-on experience with the devices) before it is ultimately moved to North Korea. It is possible that Myanmar may even be viewed as an offshore production hub for transfer of items to North Korea or other interested parties. Sanctions make it nearly impossible for Pyongyang to acquire controlled, technically advanced equipment that requires installation and maintenance by foreign technicians; North Korea and Myanmar may have therefore collaborated to purchase the equipment, install it in Myanmar, and use the machines to produce advanced missile or nuclear parts that could then be more easily routed via air cargo to North Korea (or elsewhere).

Conclusion. The possibility that Myanmar is pursuing a nuclear weapons program is just one of many potential explanations for its importation of technologically advanced dual-use items. The alarming prospect of a nuclear-armed Myanmar cannot be ignored, but neither should it prevent the assessment of other feasible scenarios. More research is needed to determine precisely why Myanmar received questionable dual-use items and to discover their final destination, if Myanmar is a transshipment point. Export control regimes should take note of the potential for diversion of dual-use items through Myanmar, and to protect regional stability, governments in Asia should reexamine their trade policies toward the Southeast Asian country.

Read the full article here:
North Korea and Myanmar: A match for nuclear proliferation?
Bulletin of the Atomic Scientists
Catherine Boyle, Melissa Hanham, Robert Shaw
9/27/2010

Posted in Korean People's Army, Military, Myanmar, Nuclear | Comments Closed

Recent fees and taxes in the DPRK

Monday, September 6th, 2010

According to the Daily NK:

North Korea is a “Tax-free country,” according to one of its many propaganda slogans, but this is contradicted by defector testimony, which suggests that residents carry a very heavy burden. According to defectors leaving the country after the North’s currency redenomination, North Korean people pay at least 20 to 30 percent of their monthly living expenses in the form of quasi-taxes to the state.

Since the redenomination, the minimum cost of living for a family of four has been in the vicinity of 50,000 to 60,000 won: around 35,000 for food and some 10,000 for other day-to-day necessities.

Next, North Korean residents pay at least 15,000 won for electricity and other utilities to the state.

Water and sewage and electricity cost, in total, around 1,000 won. Additionally, people have to give 30 percent of the earnings from their private fields every year. For a private field of around 40 pyeong (approximately 132m²), which is the general area for a single household, the farmer of the land has to pay around 3,000 won on average per month in usage fees, according to defectors.

In addition, if one adds other kinds of funding such as that for various kinds of local construction, military aid, fees for child education etc, the sum easily surpasses 10,000 won.

One defector, who arrived from Onsung in North Hamkyung Province in July of this year, said, “An elementary school in Onsung is instructing students to collect 10kg of apricot stones. If they cannot do that, the school forces them to give 5,000 won in cash. There are many cases of students who are unable to provide the apricot stones quitting school since they do not want to suffer under the burden.”

Another defector, who escaped from Hoiryeong in December last year, said, “Kim Ki Song First Middle School students had to pay 30,000 won every each three months for a school beautification project. However, many workers’ children were not able to tolerate that situation and quit.”

Another, who arrived in June from Hoiryeong, explained, “Even though the people were having to get food for themselves because of the absence of food distribution, the authorities took dogs, rabbits, leather or scrap from us all the time and, in addition, for the construction of a road, they pushed us to provide them with cement and bricks, so we had to offer all our income for several days.”

Besides all of this, the around 30 percent of people who do not have their own house have to pay at least 30,000 won in monthly rent.

Then, those who do businesses in the jangmadang have to pay between 300 and 2,000 won for each stall per day.

A defector, who did business in Chongjin until she defected in July last year, said, “The Provincial Committee of the Party took 300 won from each stall every day, and used 60,000 won of that for official expenses, gas for cars and entertainment for other cadres.”

Defectors say that the reason why the number of vagrants, so called kotjebi, has been increasing is also that they cannot afford to pay those fees.

Needless to say, while general people are weighed down by this heavy burden, high cadres in the Party, military or foreign currency earning bodies accumulate property through corruption, privilege, access to foreign currency earning businesses and the like, and enjoy their luxurious lives in high-class apartments in Pyongyang.

One defector who escaped from Pyongyang in February this year explained, “Since the currency redenomination, the preference for products rather than cash has been striking, so the price of apartments has risen a lot. In 2007, an apartment by the Daedong River was around $60,000, but now it is around $80,000 or $90,000.”

“While running errands, I visited one such apartment where high officials lived several times. It was amazing. They had foreign TVs, refrigerators and many other appliances. They used Korean or Japanese cosmetics and their shoes were all designer.”

A diplomat from the U.K. who visited Pyongyang in April, recently told the media that when he dropped by a fast food restaurant in Pyongyang most of the guests were students and some of them were wearing blue jeans and carrying cell phones.

The defector from Pyongyang criticized, “Newly built pizza or fast food restaurants in Pyongyang are like a playground for high officials’ children,” and concluded, “General local people are now struggling to feed this privileged class.”

The Daily NK conducted the interviews with defectors in this article with people who had just passed through the education course at Hanawon (the South Korean resettlement education center for North Korean defectors).

Read the full story here:
Tax Free North Korea Exists Only on Banners
Daily NK
Shin Joo Hyun
9/2/2010

Posted in Black markets, Civil society, Energy, Finance, Fiscal & monetary policy, Food, Price liberalization, Real estate | Comments Closed

North Korea expanding farming areas

Friday, July 30th, 2010

Institute for Far Eastern Studies (IFES)
NK Brief No.10-07-30-1
7/30/2010

North Korean media outlets are reporting large-scale development of tidelands as part of ongoing economic projects. There have been reports on a land reclamation project in the tideland area of Daekye-do, in North Pyongan Province, that was completed on June 30. The Korea Central News Agency (KCNA) and the Workers’ Party newspaper Rodong Sinmun both ran stories on July 1 stating that the Central Committee of the Workers Party sent a letter of congratulations to the construction workers and supporters of the project, calling it, “A massive project of reclaiming Mother Nature, no less significant than the construction of the West Sea Flood Gates.”

The project, completed at the end of last month, reclaimed tideland in North Pyongan Province from Dasa-do, off the coast of Yeomju and Cholsan villages, to Kacha-do, Soyondong-do, Daekye-do, Tokye-do, and the Cholsan peninsula. It comprises 13.7 km of shoreline and more than 87 million square meters of land.

On July 22, the Choson Sinbo reported that North Korea planned to reclaim more than 59.9 million square meters or farm land by the end of 2012. The story also noted that the second phase of the land reclamation project in North Pyongan Province was in full swing, and that the first phase of a second project around Ryongmae-do, South Hwanghae Province, was scheduled to be completed by 2012.

The massive Daekye-do project completed at the end of June would be more than 10 times the size of Seoul’s Yeoui-do area, with more than two thirds of the area being reclaimed land. As background for the article, the newspaper explained, “As one way to expand crop production in [North Korea], the focus is being placed on the expansion of farmland through tideland reclamation.”

Related to this, the KCNA reported on July 15 that Kim Jong Il had visited the Daekye-do project, and said, “Land reclamation is an important project in the nation’s rich and powerful development.” Such a statement is tantamount to ordering the expansion of reclamation activities. Kim Jong Il also called for focusing national interest on difficult and massive reclamation projects to be carried out in the future, demanding that “policies necessary to support these projects must be thoroughly implemented.”

It was reported that Kim expressed ‘extreme satisfaction’ over the successfully completed Daekye-do project. After inspecting the area, he stated that the reclaimed farm land needed to be used “to full effect,” while at the same time more land reclamation projects should be carried out in order to completely resolve the North’s food shortage. North Korean media reported that Kim Jong said, “What is important here is to continue strongly extending the land reclamation project.” The KCNA also reported that North Korean state authorities, Party and Cabinet ministers, and supervisors from central government agencies accompanied Kim Jong Il on his tour of the Daekye-do land reclamation site.

On July 4, Korea Central Television (KCTV) reported, “Power plants throughout the country produced 1.2 times more electricity in the first half of this year than they did last year,” and the KCNA emphasized increased production in a number of factories, stating that compared to production plans, “In the Bakchon Silk Factory, rug production was 101%, regular cloth production was 107%, and ramie cloth liner production was 130%” of production quotas. In addition, “Along with the Pyongyang Daily Goods Factory production increase of 120%, the Nampo Glorious Soldier Shoe Factory, Hyeechon Silk Factory, Pyongyang Textile Factory and others are all meeting production goals.”

Posted in Agriculture, Energy, Institute for Far Eastern Studies | Comments Closed

India-DPRK trade expanding

Sunday, July 25th, 2010

According to Forbes:

Last year India exported roughly $1 billion to North Korea, up from an average of barely $100 million in the middle of the past decade, reports the Confederation of Indian Industry, a trade organization–most of that in refined petroleum products. The trade group says that North Korea’s exports to India were a minuscule $57 million, including silver and auto parts. (South Korean trade figures suggest India’s exports are much lower.)

The commercial tie has no deep historical roots and is curious, to say the least, given Pyongyang’s closeness with China, India’s commercial rival, and its connection to the A.Q. Khan nuclear network in Pakistan, India’s enemy.

North Korea needs oil to maintain power plants and to keep its outsize military on the move. It apparently has enough hard- currency reserve from its murky export trade to buy on the spot market. India, for its part, has ramped up refining but gotten ahead of domestic demand. Further, by keeping an artificial lid on pump prices until recently, Indian policy encouraged these oil sector producers to look for clients overseas. “India is the largest exporter of refined products east of the Suez [meaning the Middle East and Asia],” says Fereidun Fesharaki, chairman of Facts Global Energy in Singapore. A lot of enhanced supply came online in 2009, mostly from Reliance Industries, which has the world’s largest refinery, and the Essar Group, the Mumbai steel and energy giant. At current usage and demand “India needs 15 years of demand to absorb this current supply,” he adds.

Until June the New Delhi government kept a cap on domestic gasoline prices, running up a $10 billion subsidy bill, or roughly 7% of its budget. While state-owned companies were compensated for their losses, those in the private sector were on their own, causing them to look for other markets, especially since the price for crude has doubled, to $78 per barrel since 2004. “Their incentive is [to find] who in the world is desperate enough to take the products, and it’s usually Iran or North Korea,” says Fesharaki.

Some North Korea watchers are caught off guard. “I was flabbergasted by the increase in trade,” says Stephan Haggard, director of the Korea-Pacific Program at UC, San Diego. “North Korea is basically engaged in close to barter trade.” No one seems more surprised than Pratap Singh, India’s ambassador to Pyongyang, who says he has no idea of trade volume because the North Koreans won’t supply credible data, much less working phone lines. “How did you manage to get through?” he asks a reporter.

Like other oil refiners, neither Reliance nor Essar exports fuel to North Korea directly. That’s too much of a risk politically (even though this trade isn’t barred under current UN sanctions) and economically, as Pyongyang has been known to slip on its payments. Instead, the fuel is sold through a network of traders and banks in Dubai and elsewhere. Trade data nevertheless record the origin of the refined petro goods.

Curiously, both New Delhi and the U.S. State Department, which have bumped along in relations complicated by India’s own nuclear development, show no alarm. A spokesman for India’s Ministry of Foreign Affairs says all international strictures are observed and nothing sinister is at hand. Washington won’t comment without verifying the data.

Perhaps a little more attention is in order since India is selling more than mere oil to North Korea. Last year, according to Indian trade data, India also exported $2 million in goods in a category called “nuclear reactors, boilers, machinery and mechanical appliances”–most likely water pumps, computer data storage units, ball bearings and machine tools. Could they be used to maintain a nuke plant in some way? Maybe.

“North Korea, over the years, has attained skills to disguise their trade activities and also to utilize materials they have for other purposes,” says Jennifer Lee, a research analyst at the Peterson Institute for International Economics in Washington. “Countries need to be especially careful in what they export to North Korea.”

Read the full story here:
Look Who’s Helping North Korea
Forbes
Megha Bahree
7/22/2010
(Magazine date: 8/9/2010)

Posted in India, International trade, Oil, Trade Statistics | Comments Closed

Janes Intelligence Review confirms Myanmar nuke program

Sunday, July 25th, 2010

According to Bloomberg:

Allegations by a Myanmar defector that the military-run country is pursuing a nuclear program are corroborated by newly available commercial satellite images, Jane’s Intelligence Review said in an article released yesterday.

The photos of buildings and security fences near the country’s capital, Naypyidaw, confirm reports by Major Sai Thein Win of machine tool factories and other facilities alleged to be part of a nascent program to build nuclear weapons, the magazine reported from London.

“They will not make a bomb with the technology they currently possess or the intellectual capability,” Jane’s analyst Allison Puccioni said in an interview. “The two factors do make it possible to have a route to one.”

U.S. Secretary of State Hillary Clinton expressed concern about reports that North Korea and Myanmar are expanding military ties and sharing nuclear technology at a meeting of Southeast Asian foreign ministers in Thailand last year.

Clinton said the U.S. would remain “vigilant” against any military cooperation between the two countries. Yesterday, Clinton announced further sanctions against North Korea in an effort to halt the country’s nuclear-weapons program.

Sai said he worked at two factories involved in the nuclear program. His report to a Burmese opposition news website, Democratic Voice of Burma, based in Norway, included documents and color photographs of the interior of the installations.

The satellite imagery reviewed by Jane’s showed only the exterior of the buildings, Puccioni said.

‘Overly Ambitious’

Jane’s said Myanmar’s nuclear program is “overly ambitious with limited expertise,” in a statement yesterday. While Myanmar is a signatory to international agreements to control nuclear weapons use, it hasn’t agreed to more recent changes in the treaties and therefore isn’t subject to international inspections, the magazine said.

“With Myanmar’s current freedom from sanctions and relative economic prosperity, the junta may be able to outsource the technical know-how and tools to reach its goals far sooner than expected,” Christian Le Mière, editor of Jane’s Intelligence Review, said in a statement.

“Someone had to be assisting them, that’s the frightening thing,” said David Kay, a former United Nations weapons inspector and now a fellow at the Potomac Institute for Policy Studies in Arlington, Virginia, in an interview. “Myanmar is uniquely incapable of carrying this through.”

North Korea could be the country providing aid, said Michael J. Green, an adviser at the Center for Strategic and International Studies and former senior director for Asia on the National Security Council under President George W. Bush.

North Korea

During the Bush administration, North Korea discussed delivering short-range missiles and nuclear capability to Myanmar, Green said.

“We worry about the transfer of nuclear technology” and indications of clandestine military cooperation between two of Asia’s most secretive regimes, Clinton said last year. “I’m not saying it is happening, but we want to be prepared to stand against it.”

State Department spokesman Philip J. Crowley said on July 12 that the U.S. continues “to have concerns about Burma’s relationship with North Korea. It’s something that we watch very, very carefully and consistently.”

Last year, the U.S. Navy followed the Kang Nam I, a North Korean freighter headed in the direction of Myanmar with unknown cargo. The ship turned around and returned home.

The evidence points to a method of uranium enrichment, laser enrichment, that the North Koreans have never used, Kay said. “If it is laser enrichment the finger points more toward Chinese assistance or some place in the former Soviet Union,” he said.

Read the full story here:
Myanmar Nuclear Weapon Program Claims Supported by Photos, Jane’s Reports
Bloomberg
Peter S. Green
7/21/2010

Posted in Military, Myanmar, Nuclear | Comments Closed

DPRK-PRC trade up 18.1% from January to May 2010

Tuesday, July 13th, 2010

Institute for Far Eastern Studies (IFES)
NK Brief No.10-07-08-2
7-8-2010

As inter-Korean commerce has all but dried up in the wake of the Cheonan incident, trade between North Korea and China appears to have continued to grow. According to Chinese customs statistics released on July 6, trade with North Korea from January to May amounted to 983.63 million USD; 18.1 percent more than the 833.07 million USD reported for the same period last year.

North Korea imported 727.192 million USD-worth of Chinese goods (29 percent increase over the same period last year), but exports dropped by 4.9 percent, amounting to only 256.438 million USD. This indicates a 60 percent increase in North Korea’s trade deficit with China, which was 470.757 million USD in the first part of 2009. With South Korean sanctions against the North halting all inter-Korean trade outside of the Kaesong Industrial Complex following the sinking of the Cheonan, it is expected that Pyongyang will become even more economically dependent on Beijing.

During this period, crude oil accounted for most of North Korea’s imports from China, as Pyongyang bought 254,000 tons (slightly more than the 247,000 tons in early 2009). However, due to rising international fuel prices, this oil cost the North 157.097 million USD, a 76 percent increase over what Pyongyang spent during this period last year.

In addition, rice (24,400 tons), corn (31,400 tons), beans (20,500 tons), flour (34,000 tons) and other necessary food imports totaling 11,300 tons reflected a 41 percent increase over the same period in 2009. The cost of fertilizer imports also jumped sharply, amounting to 81,943 tons, or 115.6 percent more than the 38,004 tons imported from January to May 2009. Increasing imports of food and fertilizer are a result of the growing agricultural difficulties being faced in the North. Based on current prices, aviation fuel imports also grew by 46.8 percent, freight trucks by 98.7 percent, automobile fuel by 47.4 percent, and bituminous coal by 137 percent.

The top ten official imports of Chinese goods by North Korea were as follows: crude oil (21.6 percent); aviation fuel (3.1 percent); freight trucks (2.9 percent); automobile fuel (2 percent); bituminous coal (1.9 percent); fertilizer (1.8 percent); beans (1.6 percent); flour (1.6 percent); rice (1.5 percent); and corn (1.1 percent).

North Korea’s exports to China were mainly underground natural resources. The top ten exported goods were: iron ore (17.1 percent); anthracite (16 percent); pig iron (9.6 percent); zinc (5 percent); Magnesite (3.6 percent); lead (2.4 percent); silicon (2.3 percent); men’s clothing (2.2 percent); frozen squid (2.1 percent); and aluminum (1.9 percent).

Posted in China, Energy, Food, Foreign aid statistics, Institute for Far Eastern Studies, International trade, Oil, Price liberalization, Statistics, Trade Statistics | 1 Comment »

Burma-North Korea Ties: Escalating Over Two Decades

Wednesday, July 7th, 2010

According to the Irrawaddy:

A recent New York Times op-ed article by Aung Lynn Htut, formerly a high-ranking Burmese military intelligence officer who defected in 2005 while he served as an attaché at the Burmese embassy in Washington, shed new light on the history of the still murky relationship between Burma and North Korea, two of the world’s most isolated, secretive and oppressive regimes.

Burma broke diplomatic relations with North Korea in 1983, when North Korean agents attempted to assassinate the South Korean president on Burmese soil. But according to Aung Lynn Htut, shortly after current junta-chief Snr-Gen Than Shwe assumed power in 1992, he surreptitiously moved to renew ties with Pyongyang.

“Than Shwe secretly made contact with Pyongyang. Posing as South Korean businessmen, North Korean weapon experts began arriving in Burma. I remember these visitors. They were given special treatment at the Rangoon airport,” Aung Lynn Htut said in his June 18 article.

The junta kept its renewed ties with North Korea secret for more than a decade because it was working to establish relationships with Japanese and South Korean businesses, Aung Lynn Htut said. By 2006, however, “the junta’s generals felt either desperate or confident enough to publicly resume diplomatic relations with North Korea.”

In November 2008, the junta’s No 3, Gen Shwe Mann, visited North Korea and signed a memorandum of understanding, officially formalizing military cooperation between Burma and North Korea. Photographs showed him touring secret tunnel complexes built into the sides of mountains thought to store and protect jet aircraft, missiles, tanks and nuclear and chemical weapons.

According to Aung Lynn Htut, Lt-Gen Tin Aye, the No.5 in the Burma armed forces and the chief of Military Ordnance, is now the main liaison in the relationship with Pyongyang. Tin Aye has often traveled to North Korea as well as attended ceremonies at the North Korean embassy in Rangoon.

In September 2009, The New Light of Myanmar reported that Tin Aye went to the anniversary celebration of the Democratic People’s Republic of Korea (DPRK), held in a hotel in Rangoon. In February, Tin Aye, along with other senior officials, attended the birthday event of the Dear Leader of North Korea at the embassy.

Flights and ships from North Korea to Burma have been carrying more than just Burmese generals. Analysts, including Burma military expert Andrew Selth, say that for years Burma and North Korea have used a barter system whereby Burma exchanges primary products for North Korean military technologies.

In June 2009, a North Korean ship, the Kang Nam I, was diverted from going to Burma after being trailed by the US navy. Then in April, another North Korean ship, the Chong Gen, docked in Burma carrying suspicious cargo, allegedly in violation of the UN Security Council Resolution 1874, which restricts North Korea from arms deals and from trading in technology that could be used for nuclear weapons.

In May, the seven-member UN panel monitoring the implementation of sanctions against North Korea said in a report that Pyongyang is involved in banned nuclear and ballistic activities in Iran, Syria and Burma with the aid of front companies around the world.

According to the UN report, a North Korean company, Namchongang Trading, which is known to be associated with illicit procurement for Burma’s nuclear and military program and is on the US sanctions list, was involved in suspicious activities in Burma.

The report also noted three individuals were arrested in Japan in 2009 for attempting to illegally export a magnetometer—a dual-use instrument that can be employed in making missile control system magnets and gas centrifuge magnets—to Burma via Malaysia allegedly under the direction of another company known to be associated with illicit procurement for North Korea’s nuclear and military programs.

The UN experts also said that the Korea Kwangson Banking Corporation has handled several transactions involving millions of dollars directly related to deals between Burma and the Korea Mining Development Trading Corporation.

With this string of events and the suspicions surrounding them as a dramatic lead in, on June 4, Al Jazeera aired a news documentary prepared by the Democratic Voice of Burma (DVB) which was written by Robert Kelley, a nuclear scientist and former director of the International Atomic Energy Agency (IAEA). The DVB report claimed that the ruling military junta in Burma is “mining uranium, converting it to uranium compounds for reactors and bombs, and is trying to build a reactor and/or an enrichment plant that could only be useful for a bomb.”

The IAEA wrote to Burma’s agency representative, Tin Win, on June 14 and asked whether the information provided in the DVB report was true. Burma, which is a member of the IAEA, a party to the Nuclear Non-Proliferation Treaty and a signatory to the Southeast Asia Nuclear-Weapon-Free Zone Treaty, responded with a letter stating that the DVB report allegations are “groundless and unfounded.”

“No activity related to uranium conversion, enrichment, reactor construction or operation has been carried out in the past, is ongoing or is planned for the future in Myanmar [Burma],” the letter said.

The letter also noted that Burma is a signatory of the Nuclear Non-Proliferation Treaty and the agency’s so-called safeguards agreement. “As stated in the safeguards agreement, Myanmar will notify the agency if it plans to carry out any nuclear activities,” the letter said.

The regime, however, has not signed the IAEA’s Additional Protocol, meaning that the agency has no power to set up an inspection of Burma’s nuclear facilities under the existing mechanism known as the Small Quantities Protocol.

Previously, on June 11, Burma’s state radio and television news had reported the Foreign Ministry’s denial of the allegations in the DVB report. The denial claimed that anti-government groups in collusion with the media had launched the allegations with the goal of “hindering Burma’s democratic process and to tarnish the political image of the government.”

The Foreign Ministry denial also addressed Nyapyidaw’s relationship with Pyongyang. “Following the re-establishment of diplomatic relations, Myanmar [Burma] and the DPRK, as independent sovereign states, have been engaging in promoting trade and cooperation between the two countries in the same way Myanmar is dealing with others,” the ministry said in its statement.

The regime did acknowledge that the Chong Gen docked at Thilawa Port near Rangoon in April. But the statement said the North Korean vessel was involved in importing cement from North Korea and exporting rice from Burma.

But in an article for Asia Times online, Burma analyst Bertil Linter noted that, “if carrying only innocuous civilian goods, as the statement maintains, there would seemingly have been no reason for authorities to cut electricity around the area when the Chong Gen, a North Korean ship flying the Mongolian flag of convenience, docked on the outskirts of Yangon.”

“According to intelligence sources, security was tight as military personnel offloaded heavy material, including Korean-made air defense radars. The ship left the port with a return cargo of rice and sugar, which could mean that it was, at least in part, a barter deal. On January 31 this year, another North Korean ship, the Yang M V Han A, reportedly delivered missile components also at Yangon’s Thilawa port,” Linter said.

Strategypage.com, a military affairs website covering armed forces worldwide, said, “Indications are that the North Korean ship that delivered a mysterious cargo four months ago, was carrying air defense radars (which are now being placed on hills up north) and ballistic missile manufacturing equipment. Dozens of North Korean technicians have entered the country in the last few months, and have been seen working at a military facility outside Mandalay. It’s unclear what this is for. Burma has no external enemies, and ballistic missiles are of no use against internal opposition.”

In his Asia Times online story, Lintner noted that on June 24, the DVB reported that a new radar and missile base had been completed near Mohnyin in Myanmar’s northern Kachin State, and he reported that work on similar radar and missile bases has been reported from Kengtung in eastern Shan State,160 kilometers north of the Thai border town of Mae Sai.

“Since Myanmar is not known to have imported radars and missile components from any country other than North Korea, the installations would appear to be one of the first visible outcomes of a decade of military cooperation,” Lintner said.

Lintner also reported that Western intelligence sources know that 30 to 40 North Korean missile technicians are currently working at a facility near Minhla on the Irrawaddy River in Magwe Division, and that some of the technicians may have arrived overland by bus from China to give the appearance of being Chinese tourists.

North Korea has also issued adamant denials with respect to allegations regarding its relationship with Burma.

According to the Korean Central News Agency (KCNA), on June 21 Pyongyang said, “The US is now making much fuss, floating the sheer fiction that the DPRK is helping Myanmar [Burma] in its nuclear development.”

The KCNA often highlights the close relationship between North Korea and Burma.

On June 20, the Pyongyang news agency reported that ex-Col Than Tun, deputy chairman of the Union of Myanmar Economic Holding Ltd., sent a statement cheering Kim Jong Il’s 46th anniversary at the Central Committee of the ruling Workers’ Party of Korea.

On April 18, Korean state-run- media reported that Than Tun also issued a statement cheering the 17th anniversary of Kim Jong Il’s chairing of North Korea’s National Defense Commission.

“Kim Jong Il’s field inspection of KPA [Korean People’s Army] units served as a main source that helped bolster [North Korea’s] self-reliant defense capability in every way,” the statement noted.

Military sources said the Union of Myanmar Economic Holding Ltd, managed by the junta, is responsible for purchasing imported weapons for Burma’s armed forces, including transferring money to overseas banks such as Korea Kwangson Banking Corporation.

Meanwhile, in addition to its escalating relationship with North Korea, the Burmese military regime has recently boosted ties with Iran, which according to the UN report is also allegedly receiving nuclear and missile technologies from North Korea.

In recent years, Burmese and Iranian officials visited their counterparts homeland for the purported purpose of improving economic ties. Observers, however, said Than Shwe has made a tactical decision to develop relationships with other “pariah states,” particularly enemies of the US, to relieve Western pressure on his regime.

Iranian Deputy Foreign Minister Mohammad Ali Fathollahi met Burmese Foreign Minister Nyan Win and Minister of Energy Lun Thi during his trip to Burma on June 15-17.

“The two sides reiterated their desire to further expand the ties of friendship and economic cooperation and to increase cooperation in the regional international forums such as [the] United Nations and Non-Aligned Movement,” The New Light of Myanmar reported on June 18.

Fathollahi’s visit came three months after Maung Myint’s visit to Iran on March 8-11, when he met Iranian Foreign Minister Manochehr Mottaki and Deputy Minister of Petroleum H. Noghrehkar Shirazi.

Read the full story below:
Burma-North Korea Ties: Escalating Over Two Decades
Irrawaddy
Wai Moe
7/7/2010

Posted in Arms shipment, Energy, Illicit activities, Korea Kwangson Banking Corp., Korea Mining Development Trading Corporation (aka Kapmun Tosong, KOMID), Military, Mining/Minerals, Myanmar, Namchongang Trading Corporation, Nuclear, Sea shipping, UN Security Council | Comments Closed

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