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Japan tightens controls on DPRK cash flows

Monday, May 31st, 2010

According to Bloomberg:

Japan tightened controls on sending money to North Korea and authorized the Coast Guard to search the communist regime’s ships in response to the deadly attack on a South Korean naval vessel.

The cap on undeclared cash transfers will be lowered to 3 million yen ($32,800) from 10 million yen, Chief Cabinet Secretary Hirofumi Hirano said today in Tokyo. Parliament passed a bill allowing the boarding of ships in international waters suspected of carrying North Korean nuclear or missile technology.

The toughened sanctions come a week after an international report concluded that a North Korean torpedo sank the 1,200-ton Cheonan in March, killing 46 sailors. Japan banned almost all trade with Kim Jong Il’s regime last year in response to a second nuclear weapon test and several missile launches.

“The cabinet has decided to take these new measures prompted by the unforgivable torpedo attack,” Hirano said. Japan also reduced the amount of money an individual can legally take into North Korea to 100,000 yen from 300,000 yen, he said.

Prime Minister Yukio Hatoyama will hold a two-day summit with South Korean President Lee Myung Bak and Chinese Premier Wen Jiabao starting tomorrow on South Korea’s Jeju Island. Japan and the U.S. are pushing Wen to acknowledge and condemn North Korea’s role in sinking the ship.

Koreans in Japan

Japan is home to about 589,000 Korean nationals, based on 2008 data, most of them the descendents of forced laborers brought back from the peninsula during Japan’s 1910-1945 occupation. South Koreans number almost 400,000 and North Koreans about 40,000, according to the Korean Residents Union, a pro-South group in Tokyo. Chosensoren, a Japan-based group that supports North Korea, doesn’t disclose its membership numbers.

North Korean residents in Japan have sent billions of yen in money and goods back home to relatives since the 1953 end of the Korean War, much of it derived from their operation of pachinko gambling parlors. Sanctions imposed last year and in 2006 have reduce the amount.

“Japan has imposed so many sanctions in the past that the new measures won’t have much impact,” said Pyon Jin Il, author of the “The Truth of Kim Jong Il” and chief editor of the Tokyo-based monthly Korea Report. “This is more symbolic, to show the world that Japan is doing something.”

In the 11 months through February, 55 million yen was wired or brought to North Korea from Japan, down from 280 million yen in the April to March 2006 fiscal year, according to Ministry of Finance data.

Trade between Japan and North Korea fell 97 percent to 793 million yen in 2008 — all in Japanese exports — from 21.4 billion yen in 2005. Last year’s sanctions added to a previous ban on exports of luxury goods imposed in 2006 following the communist nation’s first nuclear test.

Read full story here:
Japan Tightens Control on Sending Cash to North Korea
Bloomberg
Takashi Hirokawa and Sachiko Sakamaki
5/28/2010

Posted in Banking, Chongryun, Finance, International Aid, International trade, Japan, Sea shipping, Statistics, Trade Statistics, Transportation | 1 Comment »

DPRK IT update

Sunday, April 4th, 2010

According to the Korea IT Times:

The number of science and technology institutions in North Korea is estimated to hover around 300; about 200 institutions have been officially confirmed. Therefore, the North is unable to focus on building the hardware industry, which requires massive capital input and long-term investment, and is left with no choice, but to be keen on nurturing IT talent geared toward software development. As a result, the North has been producing excellent IT human resources in areas like artificial intelligence, needed for controlling man-made satellites and developing arms systems, and programming languages.

The following IT institutions are in charge of fostering the North’s software industry: DPRK Academy of Sciences, Korea Computer Center (KCC), Pyongyang Information Center (PIC) and Silver Star, which is currently under the KCC.

In particular, the creation of the PIC, modeled on the Osaka Information Center (OIC) at Osaka University of economics and law, was funded by Jochongnyeon, the pro-North Korean residents’ league in Japan, and was technologically supported by the UNDP. The Jochongnyeon-financed KCC has been responsible for program development and distribution; research on electronic data processing; and nurturing IT talent.

Thanks to such efforts, nearly 200,000 IT talents were fostered and about 10,000 IT professionals are currently working in the field. Approximately 100 universities such as Kim Il-sung University, Pyongyang University of Computer Technology and Kim Chaek University of Technology (KUT) – and 120 colleges have produced 10,000 IT human resources every year. At the moment, the number of IT companies in the North is a mere 250, while the South has suffered from a surplus of IT talent. Therefore, inter-Korean IT cooperation is of great importance to the two Koreas.

As aforementioned, the North has set its sights on promoting its software industry, which is less capital-intensive compared to the hardware industry. Above all, the North is getting closer to obtaining world-class technologies in areas such as voice, fingerprint recognition, cryptography, animation, computer-aided design (CAD) and virtual reality. However, the North’s lack of efficient software development processes and organized engineering systems remains a large obstacle to executing projects aimed at developing demand technology that the S. Korean industry wants. What is more, as the North lacks experiences in carrying out large-scale projects, doing documentation work in the process of development, and smoothing out technology transfer, much needs to be done to measure up to S. Korean companies’ expectations.

Thus, the North needs to build a system for practical on-the-job IT training that produces IT talent capable of developing demand technology- which S. Korean companies need. In addition, it is urgent for both Koreas to come up with an IT talent certification system that certifies both Koreas’ IT professionals.

Read the full story here:
North Korea Needs to Set Up Practical IT Training and Certification Systems
Korea IT Times
Choi Sung
4/2/2010

Posted in Chongryun, Communications, Computing/IT, Education, Internet, Intranet, Japan, Kim Chaek University of Technology, Korea Computer Center (KCC), Pyongyang Informatics Center (PIC), UN, UNDP | Comments Closed

Chosen Soren schools face image problem

Wednesday, February 24th, 2010

According to Park Ju-Min writing in the Los Angeles Times:

The portraits of North Korean leader Kim Jong Il have been taken down from the classrooms in the run-down Tokyo Chosen No. 2 Elementary School.

But a quick look into the teachers lounge reveals the Dear Leader in all his glory.

The school for ethnic Koreans in Japan, one of about 60 in the country that are funded by North Korea, faces a delicate balancing act as money from the reclusive regime has decreased amid economic turmoil there.

Since the 1950s, the schools have been run by the General Assn. of Korean Residents in Japan, or Chosen Soren, whose Tokyo headquarters acts as North Korea’s unofficial embassy.

At Chosen No. 2, the eight teachers and 54 students face a life of political isolation as they try to preserve their ethnic identity in Japan, a country many people believe is in the sights of North Korea’s nuclear missiles.

Former Principal Song Hyon-jin knows the school spreads what many Japanese consider communist propaganda. Activists have surrounded the school with megaphones shouting for students and teachers to leave the country, threats that increased after North Korea tested a nuclear device last year. A student at another Chosen school was accosted on the subway, her traditional hanbok robe, worn by many North Koreans, ripped by her attacker.

“Even though the Korean community has changed much in the past 20 years, it’s still tough to live as a Korean in Japan,” said Song, a longtime Chosen member.

The schools get no funding from the Japanese government, which doesn’t officially recognize them.

….

Because there are no diplomatic ties between Tokyo and Pyongyang, the ethnic Koreans cannot apply for North Korean passports. They must be content to send their children to Chosen schools.

Since the 1970s, enrollment in the schools has fallen to less than 12,000 from 40,000, and fees have risen dramatically. In an effort to improve the schools’ image, administrators removed portraits of Kim Jong Il and his father, Kim Il Sung, from classrooms. They also added South Korean history to the curriculum, along with Japanese language and history.

Another change was softening the emphasis on North Korean propaganda, relying instead on a more straightforward history. To avoid undue attention, middle and high school students were ordered not to wear traditional Korean school uniforms after class.

“Schools have to be more open and acceptable for non-Chosen Soren affiliates for the sake of their existence,” said Han Young-hae, an associate professor at the Graduate School of International Studies at Seoul National University. “They need to reestablish their historical views and educational direction.”

As a result, the atmosphere here has lightened. South Korea also has begun taking up the financial slack, donating computers.

“I hope to teach here forever,” said Lee Young-sim, a 25-year-old art teacher who is a product of Chosen schools.

Song is heading a fundraising drive to build a new wing at the school, in hopes of stemming the defection of ethnic Koreans to Japanese schools.

“It is difficult to protect the school when many Korean kids are going to Japanese schools,” said Song, whose two children attend Chosen schools. “But I will do my best until the good day comes.”

Read the full article here:
North Korea-funded schools in Japan have an image problem
Los Angeles Times
Park Ju-Min
2/23/2010

Posted in Chongryun, Education, Japan | 2 Comments »

DailyNK series on Chongryon

Sunday, February 7th, 2010

The Daily NK did a series of articles on the General Association of Korean Residents in Japan (Chongryon or Chosen Soren). Below are links to all seven parts:

Part 1: Chongryon feels the pinch

Part 2: Debts, Mergers, Collapses and Foreclosures

Part 3: Homecoming Project Speeds Chongryon Demise

Part 4: South Korea Visits Weakened Chongryon

Part 5: Chongryon Remittances and Investments

Part 6: “Study Group,” the Core of Chongryon

Part 7: Study Group Money Laundering Machine

Posted in Banking, Chongryun, Finance, Fiscal & monetary policy, Foreign direct investment, Japan | Comments Closed

DPRK scholar admits currency reform goal was expanded public finances

Sunday, January 31st, 2010

Institute for Far Eastern Studies (IFES)
NK Brief No.10-01-29-1
2010-01-29

The director of the (North) Korea Institute of Social Sciences has publically stated that the shocking currency reforms announced last November were aimed at filling the state’s public finance coffers.

In an interview for the Choson Sinbo, a newspaper distributed by the pro-North ‘General Association of Korean Residents in Japan,’ director Kim Cheol Jun revealed, “[last year’s] currency exchange program in [North Korea] was effectively carried out…through the currency exchange, socialist economic management principles could be better realized and a public finance foundation was prepared on which leaping advancements in the lives of the people will be achieved.”

Many experts in South Korea and abroad had speculated that the North’s objective in revamping its currency was to boost public coffers, but this was the first time that anyone from North Korea had publicly alluded to such goal. Director Kim stated that last year was a year ‘carved into history’ as the year in which the nation was turned around toward the realization of the goals set for 2012, noting that new seeds had been developed to boost crop yields, and that double- and triple-cropping as well as improved potato and bean crops had been accomplished.

Director Kim also stated that a decisive turn-around had been made in resolving food shortage problems, noting the successful development of Lyosell as one example of improved production in North Korea. Lyosell is a silk-like material made from wood pulp transformed into cellulose, and is softer and more hygroscopic than cotton, yet almost as strong as polyester.

Director Kim added that last year also saw the completion of the Yeoungwon Powerplant, the Yeaseong River No. 1 Youth Powerplant, and the Keumya River Powerplant, as well as the installation of Computer Numerical Control (CNC) systems in the Taean Heavy Machinery Complex, the Cheollima Steel Complex, and the Hyecheong Construction Machinery Factory.

Following the currency reform, there was a total lack of policy to stabilize the lives of the North Korean people, and the ban on foreign currency, closing of markets and other control measures only pushed residents to the brink. On December 28, North Korean authorities released a memorandum completely banning the use of foreign currency, and since the beginning of the new year, markets throughout the country have been closed, causing people in the North to turn to barter in order to obtain food. However, the schedule for the closing of markets varies by region, and the state authorities have been unable to enforce state-set pricing as the government has been faced with more than a little resistance to the currency reforms.

Posted in Chongryun, CNC, Finance, Fiscal & monetary policy, Japan, Manufacturing | Comments Closed

10,000 apartments under construction in Pyongyang

Wednesday, November 11th, 2009

Institute for Far Eastern Studies (IFES)
NK Brief No. 09-11-10-1
11/10/2009

North Korea is pouring all efforts into the construction of 10,000 family homes in Pyongyang by 2012. Whether this construction plan can be completed within the next three years will weigh on the success or failure of the regime’s goal of establishing a ‘Strong and Prosperous Nation.’

An article run on November 4 in the Chosun Sinbo, a newspaper of the Jochongryeon, the pro-Pyongyang Korean residents’ association in Japan, stated, “Currently, the construction of 10,000 family dwellings is underway in Pyongyang, and the efforts poured into this over the next 3 years will show the strength of the country.” It was also reported that “North Korean authorities are devising policies to concentrate all efforts into the construction area in order to see this through.”

The article also confirmed that the apartment construction project was part of the “effort to open the door to a ‘Strong and Prosperous Nation’,” and that completion of the project “would mean the complete solution of the people’s housing problems in Pyongyang.”

The newspaper claimed that the project is the largest project ever undertaken by the North. In the 1980s and 1990s, 5,000-unit apartments were built along Kwangbok Street and Unification Street over 4 to 5 years, but the current project is twice as large. The aim is to complete the project in 3 years. Each unit is said to be 100 square meters.

North Korean authorities are reportedly pledging that the ‘Strong and Prosperous Nation’ will not just be reflected through economic statistics or increased production, but that they are putting all efforts into increasing the standard of living for the people.

In order to meet the expected increase in demand for electricity, a hydroelectric power plant is being built in Huicheon, Chagang Province, and is expected to be complete by 2012.

It is expected that it will be difficult for the North to complete 10,000 apartments in the next 3 years, and so authorities are also conducting campaigns to repair and upgrade old production lines in factories and companies in order to meet the demand for materials. As well, Preparations are also underway to create a system of factories and businesses to produce needed materials within Pyongyang. The construction project has meant the removal of some military barracks in the area, causing some conflicts between soldiers and civilians.

Posted in 2012 Strong and Prosperous Nation (Kangsong Taeguk), Chongryun, Construction, Real estate | Comments Closed

FDI and JVCs in the DPRK…

Thursday, June 25th, 2009

The General Association of Koreans in Japan (Chongryun) have made a video about foreign direct investment and joint venture companies in the DPRK. I have posted links to the video below. It features the PyongSu pharmaceutical factory among other things. It is in Korean and Japanese (with Japanese subtitles), so if there are any readers who care to translate, please let me know if there is any interesting information in the videos:

Part 1:

Part 2:

Part 3:

Posted in Chongryun, European Business Association, Health care, Japan, Manufacturing, Pharmaceuticals, Pyongyang International Trade Fair, Railways, Transportation | 4 Comments »

DPRK establishing yearly economic development plans

Monday, January 12th, 2009

Institute for Far Eastern Studies (IFES)
NK Brief No. 08-1-9-1
1/9/2009

The Jochongryeon mouthpiece, Chosun Sinbo, reported on January 5 that North Korea is working to boost economic production by establishing “concrete attainment goals” in each sector in a “yearly, phased plan” from last year until 2012 in order to reach the goal of establishing a “Strong and Prosperous Nation” by the 100th anniversary of the birth of Kim Il Sung. The paper reported that the North had not made an official announcement regarding this plan, but that it was currently in the process of implementing a 5-year economic development plan

In the textile industry, North Korea is focusing efforts on upgrading equipment in five weaving factories, including major sites in Pyongyang and Sariwon, with the goal of increasing cloth production 400 percent by 2012. The newspaper also reported that North Korea is aiming to increase coal production over the next few years, with the goal of reaching 1980s-levels of production. Coal production peaked in 1989 at 43 million metric tons, and it is estimated that North Korea has over 20 billion metric tons of coal reserves, but the Bank of (South) Korea estimates that in 2007, the North mined a mere 24.1 million metric tons of coal due to a lack of electricity and spare parts. Many of North Korea’s coal reserves are below the waterline, and require constant electricity in order for pumps to maintain an environment in which mining can take place. Last year, in order to boost coal production, North Korea increased budget allocations for energy, coal and metal industries by nearly 50 percent.

This year’s New Year’s Joint Editorial placed heavy emphasis on the metals industry, and emphasized that efforts last year to modernize equipment and improve technology increased 2008 steel production by 150 percent at the Chollima Steel Complex and the Kim Chaek Iron and Steel Complex. The newspaper stressed that these plans were not merely wishful thinking, but that they were “the basis for meaningful achievements,” pointing out that last year, the North Korean cabinet increased investment into both basic industries and vanguard enterprises 49.8 percent. In 2008, North Korea either refurbished or newly constructed over 140 new production facilities, and, “in particular, actively promoted metal, instrument, science, and light industrial sectors.”

According to the newspaper, North Korea would continue to promote economic development in the new year, as well, citing the current global economic crisis and the need to build an independent economic foundation not reliant on South Korea.

Posted in 2012 Strong and Prosperous Nation (Kangsong Taeguk), Chollima Steel Kombinat, Chongryun, Domestic publication, Institute for Far Eastern Studies, Japan, Kim's New Year Address (Joint editorials), Light Industry, Manufacturing | 1 Comment »

What is the DPRK’s strategy for international economic integration?

Tuesday, November 4th, 2008

Although removal from the US list of state sponsors of terror carries little economic significance for the DPRK, its government has made this one of its top policy priorities. Now that this has been accomplished, we must ask what the DPRK’s next move is in terms of international economic integration. Will they push for removal of more economically-significant legal barriers which isolate them, to a large degree, from global markets (indicating reform is an important policy goal), or will we continue to see mixed signals and muddle-through policies (indicating a desire to maintain the status quo)?

We cannot answer this question without knowing the DPRK’s overall strategy. Today, however, a North Korean academic quoted in the Japanese media acknowledges that de-listing changes little economically, and signals that we should not expect to see much change in the DPRK’s economic environment:

Ri Gi Song, professor at North Korea’s Academy of Social Sciences, told Kyodo News in an interview that other international sanctions are still in place and “there should be no illusions” about the country’s trade environment.

“The delisting from the terror list is expected to have a certain level of beneficial impact, but this does not mean that all (international) economic restrictions have been taken away,” he said.

Ri also said Japan’s sanctions against North Korea have not had a major impact on the country’s economy but are hurting Korean residents of Japan who do business with North Korea.

“There is little impact from these restrictions on the economic development of the country, but I think there is an impact on businessmen of Chongryon,” he said, referring to the pro-Pyongyang General Association of Korean Residents in Japan.

“The Korean residents of Japan cannot come and go as they please,” Ri said.

Japan’s sanctions include a ban on port calls by North Korean vessels including a cargo-passenger ferry that provided a major means of transportation for Koreans in Japan traveling to North Korea. The sanctions also ban imports from North Korea and exports of luxury goods to the country.

The sanctions were first imposed in 2006 in the wake of an impasse in the issue of past abductions of Japanese nationals by North Korea. The sanctions are subject to review every six months and were extended in October for the fourth time.

Ri said he does not think North Korea’s centrally planned economy will be affected by the current global financial turmoil that began with the U.S. subprime mortgage meltdown.

“I don’t think it will have a direct impact on our economy, as our economy is not part of the capitalist market mechanism,” he said. (Kyodo – link requires subscription)

As an aside, Mr. [Dr.?] Ri might be surprised to learn just how exposed his country is to the “capitalist market mechanism”.

(Hat tip to Oliver for the article)

The full article can be read here:
N Korea Trade To Gain From U.S. Terror Delisting: N Korea Expert
Kyodo (subscription required)
11/4/2008

Posted in Chongryun, Economic reform, Foreign direct investment, International trade, Japan | Comments Closed

Returned to North Korea

Friday, September 19th, 2008

The above image is from Returned to North Korea, a documentary on the 1959 program to repatriate Japanese-Koreans to the newly founded Democratic People’s Republic of Korea. Watch the video here.

Posted in Chongryun, Japan | 3 Comments »

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