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China’s tax windfall on DPRK border

Thursday, August 7th, 2008

In the last several months the Daily NK has reported on North Korea’s anti-corruption campaigns, particularly in Sinuiju and Hyesan, major DPRK/China trade hubs. Additionally, we have seen stories of how the Chinese are making life harder for resident North Koreans in the run up to the Olympics.

These measures, both of which should have an adverse impact on trade volume between the two coutries—and thus on tax revenues—made this recent report in the Daily NK all the more surprising. China’s Yanji Customs House (along the North Korean border) has reportedly seen a 226% increase in tax revenue this year from trade with North Korea.

How can China and the DPRK make life difficult for traders/entrepreneurs and still see an increase in the value of traded goods and corresponding tax revenue? According to the article:

Jilin Newspaper in China reported on the 4th that “[…]For the first half of this year, tax revenues vis a vis North Korea totaled 34.22 million Yuan, up 226.2 percent from the year before.

The newspaper continued, “During this period, entrepreneurs in Yanji imported 64 thousand tons of iron ore from North Korea; that is a 2.3 percent increase from the same period a year ago. Accordingly, the tax amount of collected was 29.13 million Yuan, which is 66.1 percent of the total tax revenue derived from North Korea.”

The Yanji Custom House covers seven border gateways with North Korea, such as Juanhe-Wonjeongri, Shazi-Saebyul, Tumen-Namyang, Sanhe-Hoiryeong, Kaishantun-Sambong, Naping-Musan, and Guchengli-Samjangri.

According to the Yanji Custom House statistics, the Naping-Musan border gateway, where iron ore collected from the Musan mine enters China, is the first ranked for commercial traffic, and Guchengli-Samjangri, the gateway for North Korean timber, is second.

Tonghua Steel Group, Yanbian Tianchi Trade Incorporated Compay, and Zhonggang Group purchased 50-year mining rights for North Korea’s Musan mine in 2005. Since late 2007 they had been discussing a seven billion Yuan additional investment in it but that failed due to conflicting views on cooperative investment rate proportions, methods of withdrawing invested funds and other issues. As a consequence of the stalled investment, the Musan mine’s exports to China have not grown relative to last year’s figures.

So most of the trade that goes through Yanji is in raw natural resources, particularly iron ore and timber, and trade in these resources seems to be carried out by Chinese companies and is probably supported (protected) by senior policy makers on both sides of the border. Rather than looking at politics as an explanation, it might simply be another result of rising global commodities prices.

The tax windfall could come from one of two sources: A volume (unit) import tax (ex: $1 for each ton of iron) or an ad valorem import tax (ex: tax on the monetary value of the goods). It is not likely they impose much of an export tax to make a difference.

If China imposed a unit tax, the revenue gains would have to come from surging imports. In this case, it would be likely that the Chinese companies had fixed-price contracts with their North Korean suppliers, and that the increase in global commodity prices simply made DPRK iron ore comparatively very cheap. When (if?) global iron prices fell, we would expect to see China decrease imports from North Korea. But according to the article, iron imports are up only 2.3%—not enough to explain the surge in revenue.

It is more likely that China imposes an ad valorem tax on North Korean imports and the contracts between the Chinese companies and North Korean suppliers are set at (near) market prices. Simply put, taxing the monetary value of increasingly valuable imports has been beneficial for the Chinese government. Even though production at the Musan Mine has not increased much, revenues are probably way up.

Given the status of the Musan Mine as the DPRK’s largest, it is likely that funds raised from this mine are firmly under control. It would be interesting to know the customs receipts in Dandong, Laioning Province, across the river from North Korea’s Sinuiju. Sinuiju seems to have suffered the brunt of the DPRK’s anti-corruption drive, and it is the main railway and trade artery between North Korea China. Most of the companies targeted for inspection were in Sinuiju. Have Chinese tax collections/trade rebounded there?

Read the full story here:
226% Rise in Tax Revenues at Yanji Custom House
Daily NK
Lee Sung Jin
8/6/2008

Posted in China, Forestry, International trade, Iron Ore, Lumber, Manufacturing, Mining/Minerals, Trade Statistics | 1 Comment »

DPRK economy shrinks for second year: Bank of Korea

Tuesday, June 17th, 2008

North Korea does not publish economic data. The size of North Korea’s economy is estimated by South Korea’s Central Bank (Bank of Korea), the US Central Intelligence Agency (CIA), and other think tanks such as the Sejong Institute (Lee Jong Seok).

According to a recent report by the Bank of Korea, North Korea sufferd its second full year of economic contraction (as defined by GDP), 1.1% in 2006 and 2.3% in 2007. The bank estimates North Korea’s 2007 gross national income (GNI/GNP) at $26.7 billion, per capita GNP at $1,152 (assuming population of 23 million). If you are interested in knowing the difference between GNP and GDP, click here.

Here are some highlights from the report:

Agriculture, forestry & fisheries marked a 9.4% decrease following a 2.6% decrease in 2006

Mining increased 0.4% in 2007, down from 1.9% increase in 2006

Manufacturing increased 0.8%, higher than 0.4% 2006 increase. -1.7% growth in light industry, due to the decrease in food products and beverages. +2.3% growth in heavy industries led by expansion of metal and machinery products.

Electricity, gas & water production increased 4.8%, (+2.7% in 2006), from hydroelectric and steam power generation.

Construction production -1.5%, (-11.5% in 2006), from reduced non-housing construction and civil engineering.

Services +1.7%, (+1.1% in 2006). Hotel, restaurant, transport, post & telecom industry expanded.

Trade volume (goods) fell 1.8% to $2.941 billion, 1/248 South Korea’s. Exports fell 3.0%, imports fell 1.3%.

These estimates are based on trade figures obtained from the Korea International Trade Association, Korea Trade and Investment Promotion Agency, fuel and food aid figures from aid groups such as the International Red Cross and the World Food Program, as well as information provided by frequent visitors.

More information here:
Full report by Bank of Korea and data (recomended)

North Korea’s Economy Shrank in 2007, Second Annual Contraction
Bloomberg
Heejin Koo
6/17/2008

Posted in Agriculture, Agriculture statistics, Bank of Korea, Construction, Copper, Dams/hydro, Demographics, Energy, Forestry, GDP statistics, Hoteling, International trade, Light Industry, Lumber, Manufacturing, Mining/Minerals, Real estate, Restaurants, Statistics, Tourism, Trade Statistics, Transportation | Comments Closed

DPRK Energy Experts Working Group Meeting

Saturday, May 10th, 2008

From the Nautilus Institute (presentations at bottom):

Background
Energy insecurity is a critical dimension of the North Korean (DPRK) nuclear challenge, both in its making, and in its reversal. One of the Six-Party Talks working groups, the Economy and Energy Working Group, is largely devoted to this topic, and energy assistance will play an important role in the process of denuclearization of the DPRK. Nautilus Institute maintains a unique database and set of quantitative and qualitative analytic tools to evaluate and track the DPRK’s energy economy, and has maintained working relations with North Korean scientists and technical personnel from the energy sector for more than a decade. With this capacity, Nautilus has provided a stream of policy analyses and briefings at their request to US, ROK and other officials on the DPRK’s energy needs, its likely negotiating postures and demands, and possible negotiable options. The need for such expertise in support of the Six-Party Talks is increasing.

This project ensures that the underlying data and technical analysis available at Nautilus is as up-to-date as possible, and that analysis and policy advice are available when needed by US and other officials.
The Second DPRK Energy Experts’ Working Group (2008) served to provide information and views from key experts in the field to inform the Nautilus DPRK energy sector analysis update. Experts in attendance at the meeting provided both pertinent, recent data and special insights that are being used to help to make the database as reflective as possible of actual conditions in the DPRK. This in turn provides crucial input to the analysis needed to help to inform the parties to the 6-Party talks regarding possible approaches to DPRK energy sector redevelopment.

In addition, the DPRK Energy Experts Study Group Meeting served, as did the first Meeting, as an opportunity for experts on the DPRK to exchange views on the appropriate “next steps” in DPRK energy sector redevelopment. Key outcomes of this discussion are being reflected in the updated DPRK Energy Sector Analysis. In the process of discussions, the experts in attendance helped to further develop and elaborate-as well as providing input on the prospects for-the activities and means by which the various parties concerned with Korean peninsula affairs might engage and work with the DPRK to help resolve both the DPRK’s energy problems, and, in so doing, begin to address and ameliorate the regional and global insecurities of which the DPRK’s energy problems are a key part. In particular, through the focus of the second day of the meeting on Building Energy Efficiency, progress was made on consideration of possible benefits from and approaches to improving the effectiveness of energy use in the crucial DPRK buildings sector.

The Second DPRK Energy Experts Study Group Meeting convened by Nautilus and its partners will was attended by experts in a variety of areas related to energy supply and demand in the DPRK-including electricity, coal and other minerals, the DPRK economy as a whole, trade into and from the DPRK, and the DPRK’s rural household and agricultural sectors, and energy use in buildings in general in the DPRK and elsewhere (the primary topic of the second day of the Meeting)-to review and discuss the results of existing and newly-commissioned research, and to provide insights from their own experience and their own research. A total of approximately 15 experts on the DPRK and on matters related to DPRK issues attended the Meeting, not including an additional 15 experts, representatives from the organizations partnering to fund and organize the meeting (Nautilus, Tsinghua University, USDOE), including observers from bilateral aid agencies associated with a number of countries, from international organizations, from the business sector, and others, who also lent their expertise to the workshop. On the second day of the workshop, supported by funding from a private foundation, a five-member delegation from the DPRK also attended the meeting, providing presentations and insights of their own on energy use in DPRK buildings, and on related energy sector problems and plans in the DPRK.

Presentations:
Presentation: North Korea’s Mineral Resources and Inter-Korean Cooperation
By Woo-jin Chung

Presentation: Nautilus Institute’s Analysis of the DPRK Energy Sector and DPRK Energy Paths: Update
By David von Hippel

Presentation: Analysis on DPRK Power Sector Data & Interconnection Option
By Yoon Jae-young

Presentation: DPRK Energy and Energy-Related Trade with China: Trends Since 2005
By Nate Aden

Posted in Coal, Copper, Dams/hydro, Electricity, Energy, Environmental protection, Forestry, Gasoline, Gold, Graphite, Iron Ore, Lumber, Mining/Minerals, Natural Gas, Nuclear, Oil, Wind | Comments Closed

South Korea launches reforestation campaign in North

Thursday, March 6th, 2008

Anyone who has spent time visiting North Korea on Google Earth will have noticed the acute shortage of trees. I am not alone in this observation. Dr. Lankov recently reported that South Korean tourists to Kaesong also sense this.

Donating trees to the North might sound like a particularly harmless form of aid–all the symbolism of inter-Korean cooperation without the messy politics of monitoring food aid or investment. But the reality is far more pragmatic:

[H]elping North Korea to plant more trees is one of President Lee’s campaign pledges.

He said the South will send seedlings to the North but no details were given as to whether or when the two Koreas will meet for the forestry project.

The spokesman said when the Kyoto Protocol takes effect, the South can buy the right to emit CO2 from North Korea.(Korea Times)

The South Korean government is not alone in hoping to make money off increasing North Korea’s stock of trees. Singaporean entrepreneur Richard Savage started a tree farm in the DPRK back in 2002:

Richard Savage kneels in the rich brown earth of a field on the outskirts of Pyongyang and reverentially spreads out the broad, green leaf of a young paulownia tree. The saplings have been in the ground for only a month but already they are a meter high; the first harvest could take place in just five years. Eyes shaded by his black cowboy hat, the Singaporean native gazes down the rows of juvenile trees, each worth thousands of dollars at maturity, with a satisfied grin. The experimental lumber crop has survived the harsh North Korean winter and is flourishing in the loamy soil. “The paulownia loves this,” he says. Glancing at another leafy plant, a new hybrid, he confides, “We’re going to let the Dear Leader name it.” (Time)

UPDATE 2002 (Via Werner Koidl):

The IHT wrote on Oct. 27th, 2006:
“Richard Savage, executive director of Maxgro, a company based in Singapore, is probably one of the most ambitious foreigners in North Korea. He is developing a hardwood plantation on 1,500 hectares, or 3,700 acres, manufactures Snow Pine cigarettes for the local market and is building an eight-story financial center in Pyongyang in a joint venture with the government and other investors.”

Even the North Korean government, though, has noticed that the forests are not as dense as they used to be. Bradley Martin reported in Bloomberg that Kim Jong il has been pushing a reforestation program for some time:

North Korea’s deforestation program dates back to a 1961 speech by Kim Il Sung. In a mostly mountainous country, he proclaimed, “it is necessary to obtain more land through the remaking of nature.” Not only tidelands but “hills throughout the country and plateaus” should be “brought under the plough,” he said.

“The hills and mountains still had trees, and I never heard of floods,” said Hiroko Saito, a Japanese woman who moved with her Korean husband to North Korea in 1961. Her husband joined one of Kim’s vast mountain work teams in the early 1970s, said Saito, now 66 and back in Japan.

…

Following Kim’s death in 1994 — just before a flood-linked famine gripped the nation — his son and successor Kim Jong Il continued the sacrifice of forest cover until 2000, when he began encouraging reforestation. But the shift hasn’t reversed the damage, and some analysts warn that another famine, close to the scale of the 1990s disaster that may have killed millions of people, might occur as soon as next year.

The government’s agricultural policies launched a cycle of events that lead to greater and greater numbers of trees being culled. Clearing the forests contributed to seasonal flooding. The floods exacerbated the food shortage, and pushed people to adopt coping mechanisms to meet their minimum caloric intake for survival. These coping mechanisms take a toll on what remains of the forests–which exacerbates the flooding. Repeat annually. This cycle of destruction has seemingly frustrated Mr. Kim’s plans to bring back the forests:

“For the past few years, I have been telling you to work hard afforestation and have encouraged you at every opportunity.”

“However, an forestation has not met the criteria of authorities and is not going according to plan.”

What Kim Jong Il is trying to say is that, “The reason afforestation is not working is because of the people’s reckless slash-and-burn cultivation, as well as the inefficiency of officers unable to block it.”

After the food crisis in ’95, people uprooted vines and trees to suffice their underfed diets, as well as cultivating illegal farms for food. Further, to save themselves from freezing to death, people used trees as firewood.(Daily NK)

Spontaneous coping mechanisms aside, efforts at increasing forrest cover might prove more difficult than the government expects. Even if it resolves the food shortage (which does not seem likely in the near term), it has seemingly lost control of its technocrats who have no problem selling DPRK lumber overseas:

…Oh Moon-hyuk, branch manager of the Ruengra 888 trading company in Yunsa, North Hamkyung Province, was executed after being implicated in the smuggling of timber. The trading company was responsible for the export of timber, and operates under the control of the Party’s accounting bureau. The inside contact stated that because of this incident, North Korean authorities carried out further inspections, leading in October of last year to the dismissal of one official receiving vice-minister pay, and the broadening of the inspections nationwide. (Institute for Far Eastern Studies)

The full articles can be found here:
S. Korea to Help N. Korea Plant More Trees
Korea Times
Kim Yon-se
3/5/2008

Kims’ Clear-Cutting of Korean Forests Risks Triggering Famine
Bloomberg
Bradley Martin
Hideko Takayama
11/21/2007

Cause of Barren Mountains: Imperialism-Natural Disaster-Officers
Daily NK
Han Young Jin
3/16/2007

Institute for Far Eastern Studies (IFES)
NK Bfrief No. 08-2-5-2
2/5/2008

Light from the North?
Time
Donald MacIntyre
8/11/2002

Posted in Black markets, Energy, Forestry, Lumber, Maxgro holdings, Singapore, Uncategorized | 1 Comment »

DPRK crackdown on trading offices finds corruption

Tuesday, February 5th, 2008

Institute for Far Eastern Studies (IFES)
NK Bfrief No. 08-2-5-2
2/5/2008

It appears that from the end of last year through this January, North Korean Party, regional, cabinet and People’s Committee officials have been carrying out inspections of trading companies, ordering massive layoffs and closings of companies where mis-management or other abnormalities are found.

In Yonhap News, a North Korean insider in Beijing, China was quoted on the 31st as saying, “Since November of last year, North Korean authorities have carried out inspections on trading companies under the control of each organization, with layoffs at most trading firms with abnormalities, deficits, or other mismanagement.”

According to the source, over 100 trading companies are registered in Chungjin, South Hamkyung Province, but after the current housecleaning measures are enforced, only around 15 will remain in operation, with practically all problematic offices being closed down.

Another North Korean source in Shenyang, China reported, “These inspections include trading offices run by the Party, military, and other so-called ‘powerful institutions’, so across the board, there are no exceptions, and as to the growing intensity [of the inspections], they are much stronger and wider in scope than formal annual inspections that have been carried out in the past.” “The order handed down at the end of last year to greatly reduce staff in the Party, military and Cabinet happens every year, but this year massive lay-offs in the workforce at trading companies appears to related to a different kind of personnel liquidation.”

These inspections reportedly stem from an incident at the end of last July in which Oh Moon-hyuk, branch manager of the Ruengra 888 trading company in Yunsa, North Hamkyung Province, was executed after being implicated in the smuggling of timber. The trading company was responsible for the export of timber, and operates under the control of the Party’s accounting bureau. The inside contact stated that because of this incident, North Korean authorities carried out further inspections, leading in October of last year to the dismissal of one official receiving vice-minister pay, and the broadening of the inspections nationwide.

Through the inspection-broadening measures, trade officials under the North Pyungan Province trade office also received an inspection party from the central government, causing many problems for Chinese traders who could not travel in from Dandong. Through these inspections, North Korean authorities reportedly uncovered several cases of embezzlement and misappropriation of company finances while the trading companies were exporting marine products or coal, iron ore, and other mining materials.

The goal of these inspections appears to have been the restoration of public order, just as the recent measures preventing women under the age of 45 from working in markets was a reaction to diminishing public discipline. In the future, price controls, regulations on export goods, or other government regulations regarding international trade are likely to be strengthened.

Posted in Companies, Forestry, Labor conditions/wages, Lumber, Manufacturing, Political economy | 1 Comment »

North Korea Google Earth (Version 7)

Friday, December 14th, 2007

The most authoritative map of North Korea on Google Earth
North Korea Uncovered v.7
Download it here

This map covers North Korea’s agriculture, aviation, cultural locations, manufacturing facilities, railroad, energy infrastructure, politics, sports venues, military establishments, religious facilities, leisure destinations, and national parks. It is continually expanding and undergoing revisions. This is the sixth version.

Additions to the latest version of “North Korea Uncovered” include: A Korean War folder featuring overlays of US attacks on the Sui Ho Dam, Yalu Bridge, and Nakwon Munitians Plant (before/after), plus other locations such as the Hoeryong Revolutionary Site, Ponghwa Revolutionary Site, Taechon reactor (overlay), Pyongyang Railway Museum, Kwangmyong Salt Works, Woljong Temple, Sansong Revolutionary Site, Jongbansan Fort and park, Jangsan Cape, Yongbyon House of Culture, Chongsokjong, Lake Yonpung, Nortern Limit Line (NLL), Sinuiju Old Fort Walls, Pyongyang open air market, and confirmed Pyongyang Intranet nodes.

Disclaimer: I cannot vouch for the authenticity of many locations since I have not seen or been to them, but great efforts have been made to check for authenticity. These efforts include pouring over books, maps, conducting interviews, and keeping up with other peoples’ discoveries. In many cases, I have posted sources, though not for all. This is a thorough compilation of lots of material, but I will leave it up to the reader to make up their own minds as to what they see. I cannot catch everything and I welcome contributions.

Posted in Architecture, Art, Automobiles, Aviation, Cell phones, Civil society, Coal, Committee for Cultural Relations with Foreign Countries, Communications, Computing/IT, Construction, Dams/hydro, Department Store No. 1, Education, Electricity, Email, Energy, Film, Finance, Football (soccer), Forestry, Gambling, General markets (FMR: Farmers Market), Golf, Google Earth, Hana Electronics Company, Health care, Hoteling, Hwanggumphyong and Wihwado Economic Zones (Sinuiju), Hyesan Youth Cooper Mine, International Aid, Internet, Intranet, Juche, Kaesong Industrial Complex (KIC), Kim Chaek University of Technology, Kim Il Sung University, Korea Computer Center (KCC), Korean Buddhist Association, Korean People's Army, Light Industry, Lumber, Mansudae creative Company (art studio), Manufacturing, Mass games, Maternity Hospital, Military, Mining/Minerals, Ministry of foreign Affairs, Ministry of Foreign Trade, Mt. Kumgang Tourist Special Zone, Musan Mine, Nuclear, Pyongyang Embroidery Institute, Pyongyang Film Studio, Pyongyang Informatics Center (PIC), Pyongyang International Information Center of New Techn, Pyongyang International Trade Fair, Pyongyang Metro, Pyongyang University of Medicine, Radio, Railways, Rason Economic and Trade Zone (Rajin-Sonbong), Real estate, Religion, Restaurants, Sea shipping, Sports, Television, Transportation, Wind | Comments Closed

Kims’ Clear-Cutting of Korean Forests Risks Triggering Famine

Wednesday, November 21st, 2007

Bloomberg
Bradley Martin
Hideko Takayama
11/21/2007

In some parts of the world, floods and famine are acts of God. In North Korea, they’re acts of government.

For decades, the late North Korean dictator Kim Il Sung mobilized vast work teams to fell trees and turn the mountainsides into farmland, allowing rainwater to wreck roads, power lines and agricultural fields.

Following Kim’s death in 1994 — just before a flood- linked famine gripped the nation — his son and successor Kim Jong Il continued the sacrifice of forest cover until 2000, when he began encouraging reforestation. But the shift hasn’t reversed the damage, and some analysts warn that another famine, close to the scale of the 1990s disaster that may have killed millions of people, might occur as soon as next year.

“Next year’s food situation is quite serious,” said Kwon Tae Jin, a researcher at the Korea Rural Economic Institute in Seoul. The famine risk is greatest starting next spring, after the current harvest is used up, he said; North Korea’s best hope may be for more food aid from abroad as a result of its agreement to begin dismantling its nuclear-weapons program.

Floods in August and September left 600 people dead or missing by official count, and 270,000 homeless. “Corpses were dug out of the silt” still clutching vinyl-wrapped photos of the Kims, the official Korean Central News Agency reported.

`Bad Governance’

South Korea has similar rainfall but has largely avoided such calamities. The North’s flooding “is a product of bad governance, economic mismanagement, poor agricultural policy and haphazard short-term survival strategies of the starving, desperate population,” Alexandre Y. Mansourov, a Korea specialist at the Asia-Pacific Center for Security Studies in Honolulu, said in a study.

North Korea’s deforestation program dates back to a 1961 speech by Kim Il Sung. In a mostly mountainous country, he proclaimed, “it is necessary to obtain more land through the remaking of nature.” Not only tidelands but “hills throughout the country and plateaus” should be “brought under the plough,” he said.

“The hills and mountains still had trees, and I never heard of floods,” said Hiroko Saito, a Japanese woman who moved with her Korean husband to North Korea in 1961. Her husband joined one of Kim’s vast mountain work teams in the early 1970s, said Saito, now 66 and back in Japan.

Workers and Soldiers

The crews included “city workers, students, soldiers of the Korean People’s Army and anybody else who could move,” said Lee Wo Hong, a pro-communist Korean agricultural expert living in Japan who began spending time in North Korea as a teacher and adviser in 1981.

What he saw there turned him into a critic of Kim Il Sung’s agricultural policy, he said. The country “was filled with bald mountains” on which the North Koreans had planted fast-growing maize; even relatively light rain would wash the crop away.

Reclaiming marginal land appeared successful for a while as North Korea’s overall crop yields increased, agriculture specialist Edward Reed wrote in a 2001 University of Wisconsin study. “Yet from the mid-1980s on, there appears to have been a slow decline in production, probably due to soil depletion from overintensive production,” he said.

By the early 1990s, yields dropped so low that hungry North Koreans went to the mountains to bring even more land under cultivation. Meanwhile, increased demand for firewood — the result of an energy shortage caused when former communist trading partners halted cut-rate fuel exports — added a new incentive to strip the mountainsides.

Death Toll

The results came to the world’s attention in 1995, with the worst floods in a century. The lost farmland contributed to a famine — already under way — that killed somewhere between 600,000 and 1 million North Koreans, according to “Famine in North Korea: Markets, Aid, and Reform,” by Stephen Haggard and Marcus Noland. Other estimates put the death toll as high as 4 million.

As floodwaters poured into coal mines, the energy shortage worsened and the state-run economy all but collapsed. Economic recovery — which didn’t begin until 1998 — was halted by further catastrophic floods in 2006, when the economy again shrank, according to an estimate by South Korea’s central bank.

A report on North Korea’s environment as of 2003, jointly prepared by North Korean government agencies, the United Nations Environment Program and the United Nations Development Program, blamed severe “land degradation” on “conversion of forest land in hilly areas to agricultural land.”

Enthusiast

The report portrayed Kim Il Sung as a forest-planting enthusiast from as early as six decades ago. Nick Nuttall, a spokesperson at UNEP headquarters in Nairobi, said the agency was “not in a position to comment” on why the report didn’t mention Kim’s mountain-clearing policy.

While the report said reversing the environmental damage through reforestation has become “an all-out campaign,” hungry people have continued cultivating crops between the tree seedlings, according to Han Young Jin, a defector from the North who lives in South Korea.

As the branches spread, “people would tie the sprigs together so the trees could not grow,” Han wrote on a defector-staffed Web site, Daily NK. “When the trees inevitably died, new saplings would be planted.”

Posted in 1990s Famine, Agriculture, Arduous March, Civil society, Forestry, Lumber | Comments Closed

NK Projects: Chance or Risk for Businesses?

Tuesday, October 2nd, 2007

Korea Times
Jane Han
10/2/2007

Economic cooperation topping the agenda for the inter-Korean summit, plus the van of corporate decision makers traveling to the North together, begs the question: Will the trip bear fruit for two-way business?

Chung Mong-koo of Hyundai-Kia Automotive Group, Chey Tae-won of SK Group, Koo Bon-moo of LG Group and Hyun Jeong-eun of Hyundai Group, who are among the 18 CEOs accompanying President Roh Moo-hyun as part of a special entourage, showed signs of hope as they departed for Pyongyang on their three-day trip that started Tuesday.

“I hope the talks will go well and further the ongoing business between the two Koreas, while opening doors to new areas as well,” said Hyundai Chairwoman Hyun.

Unification Minister Lee Jae-joung was also optimistic as he detailed some of the items, including North Korea’s expansion of social overhead capital (SOC) and construction of railroads, which may be discussed among leaders of both sides.

“As there has been much progress in the peninsula over the past seven years, we’re hoping that this experience will set a milestone in history,” he said in a television interview.

These hopes may be translated into reality through at least two scheduled business leader meetings during the summit period.

“The definition of economic cooperation between the two Koreas, so far, has implied one-way support from Seoul,” said Koh Il-dong, a research fellow of the Korea Development Institute (KDI). “But now, it’s time to break free of that old understanding and move toward real cooperation.”

And “real cooperation” is what the North bound corporate executives are looking to, as they hint some of the possibilities they have in mind.

Among the top three business topics expected for discussion _ natural resource developments, roadway and railway distribution system expansions and dockyard construction _ Hyundai-Kia Automotive Group is said to be interested in building railroad cars through its shipping affiliate Glovis, and also measure the feasibility of SOC businesses, while POSCO showed interest in forestation.

Although company officials said forestation is just a possibility, as the steel maker has shown its interest in securing carbon credit overseas, industry insiders say the opportunity will be advantageous for POSCO if cooperation comes through.

And as speculations rose that SK Group may be considering communication and energy projects in the North, company officials said plans are open for review if the right offer is made.

LG and Samsung, which are said to be mulling over their specialty areas of electronics, seem to be in the same scouting stages as others.

“Each company needs to be given the time and circumstances to carry out through market research,” said Dong Yong-sueng, a research fellow of the Samsung Economic Research Institute (SERI), implying that those are some of the accommodations that must be worked out if business is to happen.

Contrary to the high hopes, economic experts pointed out that some corporations would be wary of cooperating with North Korea, as it may ruin their reputation in the global market.

Posted in Automobiles, Communications, Energy, Environmental protection, Foreign direct investment, Forestry, Inter-Korean summit, International Aid, Lumber, Mining/Minerals, Railways, Sea shipping, Transportation | 1 Comment »

Summit Negotiations for Co-Development of Kaema Plateau

Tuesday, September 18th, 2007

Daily NK
Jeong Jae Sung
9/18/2007

North Korea has requested for negotiations to begin at the Inter-Korean Summit Talks on the co-development of the Kaema Plateau, also known as “the roof of Korea.” The request was taken into consideration by the Ministry of Unification.

In light of North Korea’s request, the Ministry has recently conducted a survey of North Korean defectors from South Hamkyung, Yangkang and Jagang, where the Kaema Plateau is located, regarding the significant geographical features, the status of current development at the plateau, and the intentions of the North Korean government.

Kim Hyung Seh (pseudonym), a North Korean defector from Yangkang, stated that “I was told by interested parties at the Ministry of Unification that right after the Summit Talks North Korea will deliberate the Kaema Plateau development issue and that they needed my cooperation for a sound investigation.”

According to Kim, the questions asked focused on the North Korean government’s purpose in developing the Kaema Plateau, the potential value of this site as a tourist resort, and wether or not there is enough possibility for tourism given the ever increasing number of visitors from Mongolia.

He asserted that “the Kaema Plateau is a huge forest which has no value as a tourist attraction at the moment. All the particular tourist attractions in North Korea retain villas owned by Kim Il Sung and Kim Jong Il, but there are none at Kaema Plateau, which speaks for itself.”

Kim also added that the affiliates of the Ministry of Unification did not know where the Kaema Plateau was.

“It is difficult for North Korea to develop the area around Kaema Plateau, which is why they followed the shoreline to develop their railways. In order to make this project possible, the basic transportation infrastructure such as airline facilities, roads and railroads must be established first” advised Kim.

The Ministry of Unification has denied every having conducted these surveys. Regarding the interviews with defectors, one affiliate of the Ministery said “We have not held such meetings,” and another said that “We have met [with the defectors], but we never asked about the Kaema Plateau issue.”

Kim Joong Tae, the Director of the Ministry of Unification’s Inter-Korean Economic Cooperation Team, who interviewed Kim, told the DailyNK that “North Korea has never suggested the development of Kaema Plateau. The Ministry merely asked North Korean Defectors about tourism development at Mt. Baekdu.”

The Kaema Plateau is situated across the Middle and Southern region of Yangkang Province, South of Northwest Hamgkyung and East of Jagang. The total area is 14,300 km2 and the height is 1,340m. It is the highest and widest plateau in the entire peninsula, also known as “the roof of Korea.”

Kaema Plateau has abundant forest resources which provide avariety of material lumber. There is also a rich supply of mineral resources, including steel, magnesite, gold, apatite, and copper.

The only source of transportation infrastructure is the military airfields in Pungseo and Jangjin.

It is probable that North Korea’s reason for suggesting the development of Kaema Plateau is to make it tourist site, showcasing various amusment parks and ski resorts. As it is now, this area is completely restricted to civilian traffic. If transportation in the high region is developed, this could be applied for military purposes.

Lee Jin Young (pseudonym), a defector currently residing in South Korea’s Yangcheon district, explained that “the Kaema Plateau is so treacherous that it is only used as a military training field for Special Forces. This was the one area that allied forces could not get control of, even during the Korean War.”

She also added that, “rather than developing Kaema Plateau as a tourist attraction, they should develop the Baekmoo Plateau which includes Mt. Baekdu. The suggestion to develop the Kaema Plateau can only be seen as their intention to construct a better transportation infrastructure.”

Therefore, even if South Korea were to agree to the co-development of Kaema Plateau, there will be huge difficulties regarding the expansion of the social infrastructure and compromising with the military. In particular, the construction of Korean roads, railroads and airfields in the region is sure to cost a lot of money.

Posted in Economic reform, Foreign direct investment, Forestry, Lumber, Mining/Minerals, Political economy, Railways, South Korea, Tourism | Comments Closed

North Korea Uncovered v.4 on Google Earth

Wednesday, August 29th, 2007

The most authoritative, publicly available map of North Korea
Version 4: August 29, 2007

Download it here

Additions to the latest version of “North Korea Uncovered” include the city of Manpo along the Chinese border, KEDO, Kumgang Resort expansion, Kaesong Industrial Zone, as well as a few more parks, antiaircraft sites, dams, mines, canals, etc. I have also added more links in the menu which will tell the viewer a bit about the locations themselves. I have also changed the color scheme to make the collage easier to view.

I hope this map will increase interest in North Korea. There is still plenty more to learn, and I look forward to receiving your additions to this project.

Posted in Agriculture, Architecture, Automobiles, Aviation, Biotech, Dams/hydro, Education, Electricity, Energy, Environmental protection, Fiscal & monetary policy, Forestry, Gasoline, General markets (FMR: Farmers Market), Google Earth, Health care, Hoteling, Hwanggumphyong and Wihwado Economic Zones (Sinuiju), International trade, Kaesong Industrial Complex (KIC), Labor conditions/wages, Leisure, Library, Light Industry, Lumber, Manufacturing, Military, Mining/Minerals, Mt. Kumgang Tourist Special Zone, Political economy, Pyongyang International Trade Fair, Pyongyang Metro, Railways, Rason Economic and Trade Zone (Rajin-Sonbong), Real estate, Sea shipping, Special Economic Zones (Established before 2013), Tourism, Transportation, Water, Wind | 1 Comment »

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