North Korean Economy Watch

According to the Daily NK:

An inside North Korean source has reported the launch of a renewed movement to expose and punish drug crime.

The source explained during a phone interview with The Daily NK on August 26th, “Starting August 20th, a compulsory public lecture has been given by National Security Agency personnel in each neighborhood office. Party instructions regarding a mass struggle to prevent drug and smuggling crime were introduced there.”

The lectures were attended by people’s unit members, with the exception of workers. It is standard practice for the same lecture to be given in work places separately.

The source added, “As the Chosun Workers’ Party Delegates’ Conference approaches, the number of cases in which National Security Agency agents are directing the education of citizens is increasing. Here, they emphasized that there will be strict legal action and punishment for those who take, sell or smuggle drugs in that jurisdiction.”

The People’s Safety Ministry has apparently also dispatched separate task forces to major cities along the Yalu River to hinder smuggling. They are currently trying to bring the border area under control.

The source reported, “Just within Hoiryeong there are 40 ‘task force’ personnel under the People’s Safety Ministry cracking down on illegal immigration and drug smuggling.”

The fact that North Korean citizens living in the border area regularly take drugs or engage in smuggling is not news.

The smuggling route between Sinujiu, Hyesan, Hoiryeong and Onsung to China came into being during the March of Tribulation in the late 1990s. Pharmacists and doctors started mass-producing methamphetamines (known locally as “Ice”) and sold it in China to survive, but now many, indeed some say most, foreign currency earning units are producing, distributing, and smuggling the drug.

Among the more affluent people living in the border area near the Tumen River, “Would you like some Ice?” is a common greeting. Many such people also take Ice as a painkiller, not least because it is among the few widely available drugs which can do the job. Furthermore, use of the drug has also spread to affluent teenagers, which is creating even more concern.

Currently, in major regional cities like Hamheung and Chongjin, one dose of Ice sells for between 3,000 and 5,000 North Korean won.

Read the full story here:
North Korea Launches Drugs Crackdown
Daily NK
Yoo Gwan Hee
8/27/2010

According to the Daily NK:

Despite the implementation of UN Security Council Resolution 1874 in June, 2009, North Korea’s weapons exports last year earned the country approximately the same amount as they have since Resolution 1718 was passed in 2006.

Song Young Sun, a lawmaker sitting on the National Defense Committee of the National Assembly, told reporters on Wednesday, “South Korea’s intelligence organizations have obtained a figure of around $50 million, and they assume that in practice the North has exported much more than that.”

Intelligence authorities apparently believe that the reason is that North Korea has exported parts and supported foreign munitions factories in other ways, rather than exporting finished weapons.

In September of last year, a Georgian cargo plane containing 35 tons of weapons parts including those for the Taepo-dong 2 was intercepted in Bangkok. Two months later, a ship heading for Congo was also revealed by South Africa to contain parts of the T-54 and T-55, North Korean tanks based on Soviet designs.

Meanwhile, the most successful period for the sanctions regime was immediately after UN Resolution 1718 was imposed on North Korea in 2006, when North Korean exports are estimated to have been reduced to $30 million, just 1/7th of the previous year’s total.

Read the full story here:
North Korea’s Arms Exports Stay Steady
Daily NK
Kim Min Su
8/5/2010

I stumbled on a set of photos taken by a Myanmar military delegation which visited the DPRK to shop for military accessories.  The visit was from Nov 21-28, 2008, but there are no KCNA stories which report on the visit.  I am not sure how the pictures made it out of Myanmar, but I am sure somebody got into trouble (UPDATE: See Tad in the comments).  They have been in the public domain for some time I gather, but I had never seen them until recently.

I received the photo set in PDF format with Burmese captions.  The image resolution was not great.  You can see the original PDF here. I had the photo captions translated and matched up with a publication of the group’s membership and itinerary and I even took the time to locate some (though not all) of the group’s destinations on Google Earth. You can see the photos and translated captions here (PDF). It is a large file, so give it a minute to download.  Apologies for any grammatical mistakes in this document.  There are some small typos which I could not be bothered to fix.  I relied on friends (and friends of friends) for all the translation work, but I believe it is all reasonably accurate.

Surprisingly, many of the stops on the delegation’s visit were typical tourist locations: Myohyangsan, West Sea Barrage, Tower of the Juche Idea, Arch of Triumph, Puhung and Yangwang Metro Stops.  But below I identify some of the more unique shopping destinations.

1. The Myanmar military delegation stayed in a “special hotel” for dignitaries behind Kamsusan Palace.  Previous guests have included the former King of Cambodia.  Below are frontal and satellite images:

2. The delegation visited a facility called the “Model of Command Post”  (Command Control System and National Air Defense Command System – PLUTO – 4S).  Judging by the satellite imagery, this is a new facility.

3. Judging from the pictures, the delegation seems to have visited the Pipagot Naval Base near Nampo. The South Koreans allege this base was involved in the sinking of the Cheonan.  We are not given this location in the pictures but we do know that the group was near Nampo at the time and that the pictures and satellite imagery of Pipagot are consistent.

4. I believe that the pictures also confirm the Myanmar delegation visited the Onchon Air Force Base.  Again this is because we know the group was near Nampo, the photos and the satellite imagery of the area are consistent, and in the fourth photo below, the Burmese language caption acknowledges the existence of Onchon’s underground aircraft hangar.

5. And finally, the photos claim that the delegation visited a number of facilities in a place called “Tackwon”:  A Women’s military unit, AA ammunition factory, anti-tank-laser-beam-guided-missile factory, radar factory, and Igla factory.  This location is is actually Taegwan (Daegwan, 대관) in North Pyongan Province (40°13’10.48″N, 125°13’27.32″E).  Of all the facilities mentioned in the itinerary, the only one from which we have ground-level photographs is the “Women’s Artillery Unit” and the  “Radar Factory”.

As of 12/8/2010 the imagery for this location is in high resolution on Google Earth and we can now pinpoint these locations.  The “Women’s Artillery Unit” is located at 40.218949°, 125.231670° and the “Radar Factory” is located at 40.228778°, 125.237964°.  They are pictured on the left- and right-hand sides of the following image:

UPDATE (8/9/2010): The Washington Post hosted a discussion on this topic which was interesting:

Michael Scheuer, a former CIA analyst who once ran the agency’s bin Laden unit, doubts that the Taliban has bought North Korean’s version of the Stinger.

It doesn’t need them, he says.

“They have the weapons from non-North Korean sources, but why bother using them?” he said. “They are beating the U.S. and NATO with a smaller array of weapons than they needed to drive out 40th [Soviet Red] Army, so why use the stockpiled weapons if we are going to beat ourselves?”

Even if the Taliban has them, says Gary Berntsen, a former CIA officer in Afghanistan, the rebels would risk their lives every time they turned them on.

Instead, he said, “They have, and try to use, dishkas,” Russian heavy anti-aircraft machine guns “that can knock down a helicopter with troops.”

As soon as a spy reports the rebels dragging one forward for an attack, he said, NATO forces’ electronic ears and eyes start looking for it.

“It’s a dangerous game of cat and mouse,” said Bertnsen, who has returned to Afghanistan as a military adviser in recent years but is now the Republican candidate for the U.S. Senate in New York.

Of course, the report of the North Korea visit by Hekmatyar and bin Laden aide Amin al-Haq (or ul-Haq) might well have been false — or even fabricated to implicate Pyongyang, some sources said.

As one former senior CIA officer put it, “You are right to distrust information on this topic, since every serious intelligence organization in the world, and certainly our own, is probably engaged in disinformation as part of a general psy-ops program.”

Hekmetyar, he pointed out, could “get in touch with the North Koreans without a traceable trip to Pyongyang, like by sending an emissary to [their] embassy in Islamabad or some other Third World country nearby, including Iran.”

When the first reports of the helicopter shoot-down arrived in 2007, word spread in intelligence circles that the culprit was an Iranian-supplied weapon, one person familiar with the incident recalled. It was a time when hardline elements in the Bush administration were pushing for regime change in Iran, he noted.

A military intelligence officer also theorized the report was fabricated, but by different parties, for a different reason.

“My thoughts are that perhaps the intelligence report might have been provided by a HUMINT [human intelligence] source under the hostile control of either Iran or Pakistan, to deliberately mislead us and turn attention away from them as the providers of such weapon systems and blame the North Koreans.”

The silence of the Taliban missiles, in short, remains a mystery.

Except, perhaps, to U.S. military officials in Kabul, who sound grateful.

“There’s been no recent activity suggesting that these weapons are a threat,” an unidentified U.S. official told CNN, “as attested by the volume of our daily air activity and the causes of aircraft incidents, which we report.”

ORIGINAL POST (6/27/2010): According to the Washington Post:

A powerful Afghan insurgent leader and a man identified as Osama Bin Laden’s financial adviser purchased ground-to-air missiles from North Korea in 2005, according to an uncorroborated U.S. intelligence report released by Wikileaks on Sunday.

“On 19 November 2005, Hezb-Islami party leader Gulbuddin Hekmatyar [sic] and Dr. Amin [no last name], Osama Bin Ladin’s financial advisor, both flew to North Korea departing from Iran,” the undated report said.

“While in North Korea, the two confirmed a deal with the North Korean government for remote controlled rockets for use against American and coalition aircraft,” said the report, whose origin could not be determined from the version published on the Wikileaks site.

Wikileaks had previously said it planned to strip any markings from the documents that might help U.S. law enforcement agencies identify who leaked them.

The intelligence report said, “The shipment of said weapons is expected shortly after the New Year,” meaning the beginning of 2006.

The terms of the deal were not reported.

“The two men stayed in North Korea for two weeks, returning to Helmand, Afghanistan around Dec. 3,” the report said. Hekmatyar proceeded to eastern Afghanistan.

Then, about 18 months later, according a previously undisclosed after-action military report obtained by Wikileaks, a CH-47 Chinook helicopter was downed by a missile “shortly after crossing over the Helmand River.”

“The impact of the missile projected the aft end of the aircraft up as it burst into flames followed immediately by a nose dive into the crash site with no survivors,” the May 30, 2007 report added.

“Based on description of launch, size of round, and impact force of the projectile,” the report said, “it is assessed to be bigger then an RPG [rocket propelled grenade] and possibly a Surface-to-Air Missile.”

It added, “Witness statements from (troops) suggest (it) was struck by a MANPAD and is consistent with MANPAD event described by Arrow 25.”

The name of the alleged Bin Laden financial adviser who went to North Korea, “Dr. Amin,” could not immediately be found in media reports, scholarly papers or books. If such a man exists, he would be the latest of several individuals identified as filling that role over the years.

Nor could any previous reports linking North Korea to the Afghan insurgency be immediately located.

If true, it illustrates the length to which North Korea will go to kick the United States — and generate cash for its sanctions-strapped economy, experts said.

“If they are a paying customer, that would help the North Korean cash flow,” said one of them, Terence J. Roehrig, a professor of national security decision-making at the Naval War College who has written about North Korea. “Arms sales are an important source of income for the regime.”

The United States and and South Korea are conducting joint naval maneuvers in a show of force to North Korea. Pyongyang has vowed to respond with “a sacred war and a powerful nuclear deterrence.”

Read the full story here:
Wikileaks documents: N. Korea sold missiles to al-Qaeda, Taliban
Washington Post
Jeff Stein
7/26/2010

By Michael Rank

China has launched a fleet of patrol boats to combat drug trafficking on the North Korean border, a Chinese website reports.

The report shows pictures of the four boats, which are being deployed on a stretch of the Yalu river known as Badaojiang八道江, but gives few details.

The only drug named in the report is opium, which North Korea is reported to produce in large quantities. It says officers warn local people not to become engaged in drug smuggling by showing them pictures of opium and other banned substances.

“The creation of the anti-drugs speedboat force is not just a foundation in the people’s war against drugs, it also increases our strength in banning drugs on the river border and will be a force for us in building a harmonious border and in contributing to a drugs-free border,” an official from the new force is quoted as saying.

A separate Chinese newspaper report names a methamphetamine (known as magu 麻古) as another of the main drugs smuggled between North Korea and China, and says a haul of 13,775 magu pills, seized in winter 2004, was the largest amount of drugs ever confiscated by Dandong border guards. It says smuggling reached a peak in the years 2000-2006 and gives little information about the current situation, probably because this is politically too sensitive.

But it does mention the killing of three Chinese smugglers by North Korean border guards in June, and says the dead men were members of a gang led by a man known as Sun Laoer who controls much of the smuggling on one particular stretch of the Yalu. One man was injured in the incident, for which China demanded an apology. North Korea said it was “an accident”, while according to a Chinese television report the North Koreans suspected the smugglers of being South Korean spies.

The Chinese newspaper report says the main goods smuggled between China and North Korea are drugs, scrap metal, cigarettes, DVDs, chemicals and secondhand cars.

The most notorious gang was led by an individual called Jiang Weijia, who specialised in smuggling cigarettes and oil products from North Korea into China. Between June and December 1999 Jiang smuggled 45.8 million yuan worth of cigarettes. The gang was finally smashed in 2003.

The article in Southern Weekend, one of China’s more adventurous newspapers, also mentions human trafficking across the border. It says that “in 1996 you could exchange 50 jin [25 kg] of rice for a Korean daughter-in-law” and adds that the women had to pretend to be deaf and dumb since if they opened their mouths and were found to be from North Korea they would be sent straight back.

It notes that “world opinion suspects that North Korean government departments are covertly involved in smuggling on the Chinese-North Korean border, the reason being that in a country where power is highly concentrated, it would otherwise be almost impossible for large-scale smuggling to take place on the Yalu river border. But despite such suspicions, there is no complete proof.”

The report recalls how in the 1990s North Koreans, in the wake of the famine, would exchange scrap copper for rice at a rate of one kg of metal for one kg of rice and that many North Korean factories were stripped bare of all their metal fittings.

It also recalls how in the 1960s North Korea was richer than China, which suffered through years of Mao-induced famine, and people from Dandong would cross the Yalu at night in search of food.

“This shouldn’t be called smuggling, should it. People were bartering for food in order to survive,” it quotes one man as saying. It quotes another man as saying the border was largely unguarded until recently and when he was a boy (in the 1990s apparently) he would cross the frozen river in winter and North Korean guards would give him sweets.

The report says border trade with North Korea stopped during the Korean war, was revived in 1958 and faded during the Cultural Revolution of the late 1960s and 70s. It was officially revived in September 1981 with an agreement between China’s Liaoning province and North Korea’s Pyeong’an Bakdo. Most of the trade from the early 1980s consisted of China bartering oil for fish.

The article says China-Korean smuggling goes back centuries, and in the 1930s an area of Dandong near the river called Shahezi 沙河子 was a famous smuggling centre under the Japanese. It also says a Qing dynasty customs office has been restored in Jiuliancheng 九连城, some 20 km from Dandong, and the area remains a smuggling centre.

North Korea has been widely reported to be a significant producer of illicit drugs. The CIA World Factbook notes  that for years, from the 1970s into the 2000s, citizens of North Korea, many of them diplomats, were apprehended abroad while trafficking in narcotics and police investigations in Taiwan and Japan in recent years have linked North Korea to large illicit shipments of heroin and methamphetamine, including an attempt by the North Korean merchant ship Pong Su to deliver 150 kg of heroin to Australia in April 2003.

In 2004 the Jamestown Foundation published a report by a North Korean defector who says he “learned of and witnessed first-hand the drug trafficking activities of the North Korean regime” when he worked for the North Korean National Security Agency from 1983 until 1998.

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

According ot the Choson Ilbo:

North Korea in March restored a special department in the Workers Party codenamed Room 38 which manages leader Kim Jong-il’s coffers and personal slush funds, it emerged Monday. The North last fall merged Room 38 with Room 39, which manages party slush funds.

“Rooms 38 and 39 were merged to simplify Kim Jong-il’s slush funds,” said a North Korean source. “But when it became difficult to secure hard currency due to international sanctions, Room 38 seems to have been restored because there was a feeling that Room 39 alone can’t meet the need.”

Room 38 is reportedly led by Kim Tong-il, who heads three regional departments in charge of earning hard currency.

Room 39 tries to maximize earnings from gold and zinc mining and farming and fisheries. It also manages stores and hotels exclusively for foreigners in Pyongyang. Room 39 seems to have suffered badly due to the recent suspension of inter-Korean trade. “Taesong Bank and Zokwang Trading, which received remittances from Mt. Kumgang tourism, are both controlled by Room 39, and is also in charge of the exports of agricultural and fisheries products,” said a government source.

Kim Jong-il needs dollars to maintain the party elite’s loyalty to him and his heir presumptive. He is said to have told party bigwigs in February, “From now on I will judge your loyalty based on the amount you contribute to the fund.” His son Jong-un is also said to be amassing separate slush funds for his own use.

But international sanctions on exports of weapons, counterfeit dollars, fake cigarettes and drugs remain in place, and the United States is pushing ahead with additional financial sanctions over the North’s sinking of the South Korean Navy corvette Cheonan in March. Pyongyang was dealt a heavy blow in 2005 when the U.S. froze US$25 million in the Banco Delta Asia in Macao which was apparently for Kim’s personal use.

Kim earlier this year appointed his high school friend Jon Il-chun head of Room 39. Jon was also named chairman of the National Development Bank, established early this year with a view to conducting normal international financial transactions to induce foreign investment. “North Korea seems to be planning to divert part of foreign investment to Kim’s slush fund,” said a government official.

NK Leadership Watch has more. 

Read the full story here:
Kim Jong-il Restores Special Department to Swell Coffers
Choson Ilbo
6/24/2010

Draft paper by Robert Schmucker and Markus Schiller
May 5, 2010

Download the PDF here. 

Summary
Today, there are at least seven different missile types of longer range available in North Korea – Scud B, Scud C, Scud D, Nodong, R-27/BM-25, Taepodong 1 and Taepodong 2/Unha-2. All were developed during the last three decades, each of them within a few years, and six are subject to the INF treaty. Some of the missiles have common roots, but their diameters vary significantly, ranging from 0.88 m over roughly 1.3 m and 1.5 m to about 2.5 m. This means that North Korea managed to develop at least four completely different lines of missiles to perfection and serial production, all of them with a negligible number of test launches. A total of roughly a dozen missile tests was actually observed before 2009, a number that is even today insufficient for only one military missile development in the USA, Russia, China or France. The repeating reports of North Korean “short range missile tests” are irrelevant – at those tests, the DPRK launches small anti ship missiles that were purchased in China or Russia. This has nothing to do with ballistic missiles.

It is often argued that the North Korean missiles are tested in other countries, namely Syria, Pakistan and Iran. This argument is insufficient. Combining all Scud B, C, D and Nodong launches in these countries, they are still not enough for a respective indigenous development, and the other missile types were never launched outside the DPRK. The choice of launch sites in the respective countries also is a clear indication: Pakistan tests its missiles close to Cashmere at the border to India, and as previously mentioned, Syria launched Scud D at the Israeli border. If the missiles head in the wrong direction – what is not uncommon at development tests –, this would have catastrophic consequences. Therefore, it must be assumed that these missiles had already had finished their development programs.

Aside of their small number, the sequence of North Korean tests is also noteworthy. There were only sporadic launches from 1984 to 2006, with a total of roughly ten. This was followed in 2006 and 2009 with an event of about a half dozen missile launches within a few hours, respectively, both including a large satellite launch vehicle. There might be a link to Iran’s and Pakistan’s orientation towards modern solid rocket technology. Russia can offer nothing on this market because of the imposed restrictions of the INF treaty – there are no old Soviet solid fueled missiles of this performance class, and new developments in this class are not allowed by INF – the required tests might be observed by the USA. Iran also increases its indigenous activities, resulting in a foreseeable loss of this source of funding. No wonder that the DPRK now has to demonstrate larger systems to stay in the proliferation game.

Conclusion
This is the visible North Korean situation: A country that has absolutely no other technical and economic merits offers a variety of quickly reverse engineered and indigenously developed high tech weapons, all of them with typical Soviet characteristics.

Every other country in the World had to rely on outside help of experienced institutions for their missile programs: China on Russia, India on the US and France, Pakistan on China and France, and so on. Even the US and the Soviets acquired German expertise after World War 2. Every country had foreign support for their missiles – except the DPRK.

It should be noted here that the common view of North Korea’s reverse engineering capabilities seems to come from one single source in the late 1980s, without any further proof. Today, this source is reported to see these claims with different eyes.

To get back to the analysis method that was introduced at the beginning: The three aspects country, program and missile are not compatible. The DPRK has no capabilities on any other area than rocketry, the programs are invisible or nonexistent, but a selection of operational missiles is offered that should even have countries like France, for example, go green with envy.

It is also strange that Russia silently watches the DPRK cloning and selling Soviet products, thus earning hundreds of millions of dollars, and doing this without any financial compensation for the Russians.

These antagonisms can be explained on several ways. Some claim that in the age of computer simulations, a single test is enough to proof functionality of highly complex machines such as missiles. After that, the missile goes straight into serial production. But this obviously only works in the DPRK: The new Russian submarine missile Bulava, for example, seems to have failed in 7 of its 12 flight tests so far – operational deployment is far from any discussion.

There is a different explanation that is much simpler – a connection to Russian institutions. All of the North Korean missiles were procured from Russia or at least realized with foreign support. Some, as Scud B, might come from old stocks, single remainders of old Soviet prototypes certainly were among them, and others might still be in production. A guided North Korean licensed production of simpler components can also not be excluded. In any case, the indigenous contributions of the DPRK are small at best. It is not said, though, that the Russian government or the leadership of the institutions in question know of this: Much happens in dark alleys, as was illustrated by the example of the Gharbiya gyros for Iraq.

The DPRK will of course try to reverse engineer parts and components, and it will try to acquire the capabilities for indigenous development and production. Due to this, single engine tests should be observable, not only to demonstrate indigenous activities, but also to learn and to slowly increase the DPRK’s competence on the missile sector.

But in the public opinion, this explanation is wrong, because – well, because it cannot be right. Because there is a well established view of North Korea that is also confirmed by defectors: The rockets are secretly designed, tested and produced in huge underground facilities, and these efforts are directed by an evil and megalomaniac villain who threatens the free world with his missiles.

How to best counter this type of threat should be known from the movies – just call James Bond.

More from CxI and NPR.

According to the Choson Ilbo:

South Korean activist Do Hee-yoon quoting a source in China on Monday said that a 33-year-old official surnamed Rim from the Sinuiju city government’s trade bureau was arrested by Chinese police on charges of drug trafficking in Dandong on the evening of March 2.

“North Korean agents targeting South Korea have been arrested before for their involvement in drug trafficking, but it’s unprecedented for a senior government trade official to be arrested for direct involvement,” Do said. “The Dandong Customs Office has mobilized customs officials from Dalian to probe all aspects of North Korea-China trade.”

The drug enforcement bureau of Anshan in Liaoning arrested four drug dealers based on a tip that Dandong drug dealers gained control of the trafficking network in Anshan, he added.

Under questioning, they revealed that a key figure in the drug ring in the Dandong area was a North Korean and that he was soon to arrive. Officers arrested Rim in Dandong on the evening of March 2 about after a month-long stakeout and took him to Anshan.

The bureau confiscated 2 kg of top-quality methamphetamine Rim had hidden in a kimchi container when he traveled from Sinuiju to Dandong, Do said. Rim was reportedly a very influential man in the North Korea-China trade. Despite the danger, he had traveled to China to buy goods necessary for his younger sister’s wedding scheduled for March 6 and take bribes.

“It seems Rim took a lot of bribes. There are rumors that he was going to take three large truckloads of goods back to the North,” Do said. “Rim’s arrest confirms that the North engages in international drug trafficking at the state level,” he added.

A South Korean official said the government has similar information but China has not officially confirmed it.

Read the full story here:
N.Korean Official Held in China for Drug Trafficking
Choson Ilbo
6/8/2010

According to the BBC:

A United Nations panel has accused North Korea of continuing to export nuclear and missile technology in defiance of a UN ban.

The experts said North Korea has used front companies and intermediaries to sell weapons and provide illegal assistance to Iran, Syria and Burma.

The preliminary report was compiled by a seven-member group that monitors Pyongyang’s compliance with sanctions.

…

The 47-page report outlined a broad range of techniques used by North Korea to evade sanctions imposed by the UN after the North’s nuclear tests of 2006 and 2009, the Associated Press reports.

The report said North Korea had moved quickly to replace banned individuals and entities with others to enable it to continue the nuclear trade.

Among a number of “masking techniques”, it said the North describes exports falsely, mislabels shipping container contents, falsifies information about the destinations of goods and uses “multiple layers of intermediaries, shell companies, and financial institutions”.

The report said North Korea has a range of legitimate trade offices but also sustains links with international criminal organisations to pursue the banned trades.

An unnamed diplomat told Reuters the findings were “not entirely surprising”.

“The point is that North Korea has been providing that kind of aid to Iran, Syria and Burma,” he said.

The report comes before a crucial day of talks in New York about the future of the Nuclear Non-Proliferation Treaty.

It also comes at a time of increased tension surrounding what international investigators say was a deadly North Korean torpedo attack on a South Korean warship in March.

Read the full article here:
North Korea ‘trading nuclear technology’ says UN panel
BBC
5/28/2010