North Korean Economy Watch

According to the Associated Press:

North Korea opened this year’s massive dance and gymnastics performance known as the Arirang Festival, turning to propaganda to unite its people amid new U.S. sanctions on the isolated country to squeeze its nuclear program.

Named after a traditional Korean love song, the show typically features thousands of gymnasts in synchronized maneuvers and giant mosaics formed by children turning pieces of colored paper. Versions of the mass games have been staged in 2002, 2005, 2007, 2008, and 2009.

Senior North Korean officials, including Yang Hyong Sop, vice president of the Presidium of the Supreme People’s Assembly, watched the opening performance at Pyongyang’s May Day Stadium on Monday evening, according to the North’s official Korean Central News Agency. The festival will run through to Oct. 10.

KCNA said spectators were mesmerized by performers who presented dynamic gymnastic movements, beautiful music, elegant dances, ever-changing background scenes and gorgeous electronic displays.

“It’s very great, really great, fantastic theater here and performing is perfect. That’s one of the best things in North Korea I have seen,” Andreas Heckes, a German tourist told international TV news agency APTN.

The festival came as the United States seeks to cut off North Korea’s illicit moneymaking sources by freezing the assets of those who help the regime fund its nuclear weapons program.

The U.S. measures will pinpoint “illicit and deceptive” activities such as drug trafficking, currency counterfeiting and the banned trade in conventional arms, Robert Einhorn, the State Department’s special adviser for nonproliferation and arms control, said in Seoul on Monday.

Kim Yong-hyun, a professor of North Korean affairs at Seoul’s Dongguk University, said the festival is aimed at solidifying the North’s internal unity.

The festival made its debut in 2002 to commemorate the birth of the North’s late founding leader Kim Il Sung, father of the North’s current leader Kim Jong Il.

It has been criticized as a propaganda tool achieved through the rigid and disciplined training of its young performers.

Over the years, the festival has attracted more than 12 million people, including 118,000 foreigners, according to a recent report of the North’s Rodong Sinmun newspaper.

In 2000, Kim Jong Il took visiting then U.S. Secretary of State Madeleine Albright to a mass performance that was a precursor to the Arirang show, the highlight of which was a giant mosaic displaying a rocket flying into the sky.

This year’s Mass Games features CNC technology—the first time it has made an appearance.

Photo via NK Leadership Watch.

Previous Mass Games posts here.

Read the full story here:
North Korea begins massive dance performance
Associated Press
Kim Kwang-Tae
8/3/2010

According to the AFP:

North Korea has found Chinese partners to make up for losses in trade with South Korean firms, weakening the impact of Seoul’s measures to punish the communist country, a report said Sunday.

South Korea banned most cross-border trade in May after a multinational investigation concluded that a North Korean torpedo sank one of Seoul’s warships with the loss of 46 lives.

Before the ban was announced, the North had produced goods after receiving raw materials from more than 500 South Korean firms, Yonhap news agency said.

“After the South Korean companies became unable to send the raw materials, North Korean factories have been manufacturing products ordered by China,” a source familiar with North Korean affairs told Yonhap.

Seoul partially lifted the ban to allow South Korean firms to proceed on deals which had been signed earlier.

“North Koreans said they already signed contracts with Chinese firms and told us they will manufacture the orders from the Chinese side first,” the source was quoted as saying.

Most of the goods made on consignment trade with China are for export to Europe, Yonhap said.

The ban would cost the impoverished North hundreds of millions of dollars a year, a state think-tank here said last month.

Washington announced further sanctions last month to stop the North from selling nuclear weapons or related material as well as blocking money laundering and other illicit activities.

Read the full story:
Trade ban prompts N.Korea to find Chinese partners: report
AFP
8/1/2010

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:

Remember it’s not official DPRK merchandise unless it says “Made in the DPR of Korea” on the bottom.

A woman in Poland  was rummaging through her kitchenware and stumbled on a bowl made in the DPRK:

Can anyone translate the Hangul?  “An tuk Gang”?  Maybe the name of the factory?  Mt. Paektu is featured in the logo.  I am not sure what the “7” means.

Henrik offers a better translation of the logo in the comments:

As far as I can see, the stamp says “압록강” which translates as “Amnok gang”, meaning the Amnok (or Yalu) river.

The stamp might actually show the bridge between Dandong and Sinuiju, with boats going under it too.

A further question which a Korea linguist might be able to explain to me is why  “압록강” is translated as “Amnok River” and not “Abrok River”…

Here is a picture of the bowl.  It appears to be a pressed metal sheet with an enamel coating.  They still make bowls this way today in the DPRK.

(h/t MR)

According to the Choson Ilbo:

According to RFA, the company announced a plan to open outlets selling its jeans in many locations outside of Sweden.

Encouraged by growing sales, the company has been carrying out aggressive marketing activities since the beginning of this year, including promoting products, expanding outlets, and seeking overseas markets.

The Swedish firm signed a contract with North Korea to produce the jeans in 2008. Available from both online and offline stores since last December, they come in one style for men and one for women with a price tag of US$210.

Read the full story here:
Market for N.Korea-Made Jeans to Expand
Choson Ilbo
7/22/2010

According to Yonhap:

Production at a South Korea-financed factory park in North Korea fell for a second straight month in May, figures showed Tuesday, as manufacturers complained of a decrease in orders amid tension between the divided states.

Production at the joint complex in the North Korean border city of Kaesong stood at US$27.79 million in May, a 1.2 percent decrease from a month earlier, according to the Unification Ministry in Seoul.

The number, however, marked a 56 percent increase from a year earlier, the ministry said, a sign that the complex is expanding on a yearly basis.

Despite the deadly March sinking of a South Korean warship, which was blamed on North Korea and ignited the ensuing tension along the border, the number of North Korean workers in the complex topped 44,000 recently. More than 120 South Korean companies employ the workers to produce labor-intensive goods such as utensils and garments.

The companies have recently called on the Seoul government to ease its restrictions on their operations, including a cap on the number of South Korean workers allowed to travel to Kaesong daily.

South Korea has also banned the companies from new investments in their businesses within the complex, which opened in 2004 and represents the last remaining major symbol of reconciliation between the Koreas.

According to Yonhap:
Output at inter-Korean factory park declines for second month
Yonhap
7/13/2010

For those of you who have recently visited the DPRK or who spend too much time perusing Elufa.net or reading KCNA, you are undoubtedly aware of the DPRK’s recent emphasis on something called “CNC”.  I had no idea what CNC was, so I began collecting as much information as I could find on the net and I have posted it below.

Here is the Wikipedia page for CNC.  For those of you in China, here is what it says:

Numerical control (NC) refers to the automation of machine tools that are operated by abstractly programmed commands encoded on a storage medium, as opposed to manually controlled via handwheels or levers, or mechanically automated via cams alone. The first NC machines were built in the 1940s and ’50s, based on existing tools that were modified with motors that moved the controls to follow points fed into the system on paper tape. These early servomechanisms were rapidly augmented with analog and digital computers, creating the modern computed numerically controlled (CNC) machine tools that have revolutionized the design process.

In modern CNC systems, end-to-end component design is highly automated using CAD/CAM programs. The programs produce a computer file that is interpreted to extract the commands needed to operate a particular machine via a post processor, and then loaded into the CNC machines for production. Since any particular component might require the use of a number of different tools—drills, saws, etc.—modern machines often combine multiple tools into a single “cell”. In other cases, a number of different machines are used with an external controller and human or robotic operators that move the component from machine to machine. In either case, the complex series of steps needed to produce any part is highly automated and produces a part that closely matches the original CAD design.

That description is not nearly as helpful as this video on CNC: Click here (Might not work for readers in China).

The Asia Times ran a story which included a short history of CNC in the DPRK:

The name of the game is CNC – Computer Numerical Control – machine tools that have revolutionized the design process and said to be developed in the DPRK and already exported, for example, to China. Top exponents are the Korea Ryonha Machine Tool Corporation and the Taean Heavy Machine Complex. CNC billboards are all over Pyongyang. Inevitably CNC has its own dedicated patriotic song (no music video yet). Here are the lyrics, as translated by Andray Abrahamian, a doctoral candidate at the University of Ulsan in South Korea:

If you set your heart on anything
We follow the program making the Songun era machine technology’s pride
Our style CNC technology

(chorus)

CNC – Juche industry’s power!
CNC – an example of self-strength and reliance!
Following the General’s leading path
Breakthrough the cutting edge

Arirang! Arirang! The people’s pride is high
Let’s build a science-technology great power
Happiness rolls over us like a wave

So the narrative of building a “socialist paradise” is now being supplanted by the narrative of developing and producing state-of-the-art technology to, as the Pyongyang Times indelibly put it, “improve the people’s living standard on the word level”. This is how the DPRK is mobilizing its people to “open the gate to a thriving nation in 2012”. South Korea, watch out.

By way of luck, I managed to obtain a copy of the DPRK’s CNC song. You can download the MP3 by right clicking here.

UPDATE: A reader did find this DPRK karaoke version of the CNC song complete with lyrics (in Korean).  Watch it here.

UPDATE 2: A reader also sends in this acoustic version of the CNC song (YouTube).

If you are itching to know what the DPRK’s CNC machines look like, here is one display at the Three Revolutions Museum in Pyongyang:

Click images for larger versions

And here is some CNC propaganda that has appeared around Pyongyang:

Click images for larger versions

UPDATE: here is an additional photo taken by an anonymous tourist:

UPDATE: Here are some CNC postage stamps:

UPDATE: And CNC made part of the 2010 Mass Games (You Tube at the 1:25 mark). See a photo here.

KCNA has published plenty of news stories about CNC.  You can see them here courtesy of the Stalin Search Engine. CNC was first first mentioned on January 15, 2002 (KCNA) .  One phrase that is frequently mentioned is that thanks to innovations like CNC the DPRK is “Pushing back the frontiers of science”.  Indeed North Korean economic policy seems hell-bent to do just that.  Hopefully we will soon see them change their policies to “push back the frontiers of ignorance”.

CNC machines are produced by the Ryonha Machine [Tool] Factory (KCNA) and they have been widely promoted in the official media (here, here, here, here, and here for example).  It appears also that the Ryonha Machine Tool Factory has partnered up (with someone) to form a JV company which focuses on international trade, the Ryonha Machinery Joint Venture Corporation. Here is a PDF flyer of their products taken from the KFA web page, and some of the items they are selling can be seen here and here.

They Ryonha Machine Joint Venture Company, however, seems to have a history that might scare away many potential customers.  According to the US Treasury Department:

The U.S. Department of the Treasury today designated eight North Korean entities pursuant to Executive Order 13382, an authority aimed at freezing the assets of proliferators of weapons of mass destruction (WMD) and their delivery vehicles.  Today’s action prohibits all transactions between the designated entities and any U.S. person and freezes any assets the entities may have under U.S. jurisdiction.

“Proliferators of WMD often rely on front companies to mask their illicit activities and cover their tracks,” said Stuart Levey, the Treasury’s Under Secretary for Terrorism and Financial Intelligence (TFI).  “Today’s action turns a spotlight on eight firms involved in WMD proliferation out of North Korea.  We will continue to expose and designate these dangerous actors.”

Today’s action builds on President Bush’s issuance of E.O. 13382 on June 29, 2005.  The Order carried with it an annex that designated eight entities – operating in North Korea, Iran, and Syria – for their support of WMD proliferation.  The President at that time also authorized the Secretaries of Treasury and State to designate additional entities and individuals proliferating WMD and the missiles that carry them.

Korea Mining Development Corporation (KOMID), which was designated in the annex of E.O. 13382, is the parent company of two of the Pyongyang-based entities designated today, Hesong Trading Corporation and Tosong Technology Trading Corporation.  These direct associations meet the criteria for designation because the entities are owned or controlled by, or act or purport to act for or on behalf of KOMID.

Korea Ryonbong General Corporation, also named in the annex, is the parent company of the remaining six Pyongyang-based entities designated today.  These entities include Korea Complex Equipment Import Corporation, Korea International Chemical Joint Venture Company, Korea Kwangsong Trading Corporation, Korea Pugang Trading Corporation, Korea Ryongwang Trading Corporation, and Korea Ryonha Machinery Joint Venture Corporation.

As subsidiaries of KOMID and Korea Ryonbong General Corporation, many of these entities have engaged in proliferation-related transactions.

I have been unable to locate the Ryonha Machine Tool Factory on Google Earth. If anyone has any pointers, please let me know.

Here is a list of factories the DPRK claims to be using CNC technology:

Amnokgang Daily Necessities Factory (KCNA)
Amnokgang Gauge and Instrument General Factory (KCNA)
Cholima Steel Complex (KCNA, Naenara)
Chonma Electrical Machine Plant (KCNA)
Feb 8 Vinalon Complex (KCNA)
Hamhung Wood Processing (KCNA)
Huichon Machine Tool Plant (KCNA)
Kangdong Weak Current Apparatus Factory (KCNA)
Kanggye General Tractor Plant (KCNA) (Underground)
Kanggye Knitted Goods Factory (KCNA)
Kanggye Wine Factory (KCNA)
KimChaek Iron and Steel Complex (KCNA)
Kusong Machine Tool Factory (KCNA)
Kwanmobong Machine Building Plant (KCNA)
October 10 Factory (KCNA)
Pukjung Machine Complex (KCNA)
Pyongyang Cornstarch Factory (KCNA)
Rakwon Machine Complex (KCNA)
Ryongsong Machine Complex (KCNA)
Sinuiju Spinning Machine Factory (KCNA)
Suphung Bearing Factory (KCNA)
Sungri Motor complex (KCNA)
Taean Heavy Machine Complex (KCNA)
Taedonggang Brewery (KCNA)
Tahungsan Machine Plant (KCNA)
Unsan Machine Tool Factory (KCNA)

I know the locations of many of these factories but not all.  If anyone has any information on their coordinates, please let me know.

According to Reuters:

There are no private cars in North Korea and countless factory chimneys have not belched smoke in years, but state media said on Tuesday scientists were inventing new ways to cut air pollution and protect the environment.

The country “has directed a great effort” to research environmental protection, the state news agency KCNA reported.

“Researchers have developed a new material for removing exhaust fumes from automobiles so as to cut the greenhouse gas emissions and reduce air pollution 35-40 percent,” it said, without elaborating.

It also said “units” in the capital, Pyongyang, that caused pollution had been registered, suggesting that dirty industries were under pressure to get clean.

“They are now developing a gas and dust arrester necessary in production processes and new materials needed to secure environmental safety of products,” it said.

The isolated communist country’s state-run media periodically boasts revolutionary innovations in science and technology, despite a moribund economy and chronic food shortages.

Perhaps the most visible in recent years have been related to the relatively well-funded — and well-fed — military. North Korea has conducted two nuclear tests since 2006 and several missile launches, upsetting its neighbours.

North Korean scientists also invented a device using “locally available materials” to incinerate hospital waste, KCNA said, and the Environmental Protection Institute of the Ministry of Land and Environmental Conservation had intensified research into pollution-free vegetable production.

Here is the original KCNA story:

Scientific Achievements of Environmental Protection
 
Pyongyang, June 22 (KCNA) — The Democratic People’s Republic of Korea has directed a great effort to scientific researches for environmental protection.

Researchers have developed a new material for removing exhaust fumes from automobiles so as to cut the greenhouse gas emissions and reduce air pollution 35-40 percent.

They have also put the environmental management of industrial establishments on IT basis.

Meanwhile, they have registered units causing environmental pollution in Pyongyang and confirmed methods and procedures for preventing pollution. They are now developing a gas and dust arrester necessary in production processes and new materials needed to secure environmental safety of products.

Besides, they have invented a new device to destroy by fire such wastes from hospitals as contaminated injector and bandage with locally available materials.

Scientists of the Environmental Protection Institute of the Ministry of Land and Environmental Conservation have intensified a research in pollution-free vegetable production.

Read the full Reuters story here:
N.Korea says puts “great effort” into environment
Reuters
6/22/2010

Institute for Far Eastern Studies (IFES)
NK Brief No. 10-06-14-2
6/14/2010

During the third session of the 12th Supreme People’s Assembly, convened on June 7, Kim Jong Il promoted his brother-in-law Jang Sung Thaek to vice-chairman of the National Defense Commission (NDC), named a new premier, and replaced several department heads and ministers. This appears to be an attempt to shore up the regime as it seeks to “open the door to a strong and prosperous nation” by 2012, the 100th anniversary of the birth of Kim Il Sung. Kim Jong Il made a personal appearance at this latest assembly meeting, unlike the SPA meeting held in April. The leader’s presence hints at the importance of the latest gathering.

This promotion of Jang Sung Thaek and shake up of Cabinet positions appears to be part of efforts to realize the quickly approaching goal of establishing a ‘strong and prosperous nation’ by 2012, assigning those most able to positions of responsibility, regardless of age or experience. Most notably, Jang, widely thought to be second-in-command in North Korea, was promoted to vice-chairman of the NDC. He was first appointed to the NDC at the first meeting of the 12th SPA in April 2009, making his climb to vice-chairman in a mere 14 months.

Before the latest promotion, Jang held the position of vice-director of the Workers’ Party of Korea, a newly created position that he was the first to hold. In this position, Jang oversaw national security offices, police, and the courts, putting him in a position of power difficult for anyone else to achieve. Having traveled to both South Korea and China, Jang Sung Thaek was likely promoted to present the image of a strong military and, at the same time, establish stable relations with the international community in order to ensure a smooth transition of power as well as to resurrect the economy by 2012. When Kim Jong Il led a delegation to China last May, the Chinese government treated Jang very well, ignoring standard protocol for someone in his position.

In addition, Choe Yong Rim was named the North’s new premier, and eight new vice-ministers were appointed. Regional Party secretaries were allowed to participate directly, allowing those who are most knowledgeable of local conditions to impact the decisions of the administration. Most of the new appointments were very experienced elites, including Choe Yong Rim (80) as premier, and Kang Neung Su (80), Kim Rak Hui (77), Ri Thae Nam (70), and Jun Ha Chul (82). The regime is promoting a number of veterans who are making their “last stand for the motherland” as part of the effort to ensure stable transformation of power after Kim Jong Il.

With Kim Rak Hui’s appointment as vice-premier and new appointments to the Ministry of Foodstuff and Daily Necessities Industry as well as the head of the Light Industry Ministry, North Korea seems to be pursuing the improvement of standards of living promised in the 2010 New Year’s joint editorial. Pyongyang Party officials appear to be attempting to reassert a centrally planned economy in the aftermath of botched currency reform efforts; however those witnessing regional economic conditions appear much more able to come up with appropriate economic policies. North Korea has been unable to make any significant progress in resolving its food shortages or its inability to provide daily necessities to the public, leading the regime to scapegoat some high-ranking officials. Now, many in and outside of North Korea are watching closely to see if the regime can launch economic efforts capable of successfully ‘opening the door to a Strong and Prosperous Nation’ in the next two years.

Evan Ramstad writes in the Wall Street Journal about some interesting developments in the North Korean media:

North Korea’s state media over the last two weeks stepped up an anti-South Korea campaign after being accused of sinking a South Korean warship, with reports repeatedly portraying angry citizens vowing to work harder to “get back” at the South.

The reports have dominated TV newscasts monitored in Seoul and appeared in newspapers that arrive in South Korea more than a week after publication.

The volume ramped up when Seoul on May 24 announced penalties, including a trade ban, against the North, which it blames for sinking a warship in March and killing 46 South Korean sailors.

Amid the heightened tension between the two Koreas, the North’s reports are not focused on the prospect of conflict but instead seek to connect its government’s anger at Seoul with the need to improve the North’s impoverished economy.

That shows the North Korean regime has latched onto the sinking incident not just to preach about perceived external threats but as a new way to shift responsibility for the country’s troubled economy away from itself, said Brian Myers, an American professor in South Korea who has studied the North’s propaganda operations since the early 1990s.

“They’re using hatred of the outside world to inspire people to work harder,” he said. “The extent of it is quite striking.”

In a typical example of the reporting, Kim Myung Ho, manager of a collective farm, said on a state TV newscast last Friday that workers now “dash to work in the mindset of destroying the enemy’s schemes by doing the work of two or three men. As a result, the speed of rice planting is getting better everyday.”

…”They’ve been vilifying Lee Myung-bak for two years, but this is the first time I’ve seen it connected to growth in production,” said Mr. Myers, who teaches at Dongseo University in Busan and recently published a book on the history of the North’s propaganda. The reporting underlines the view in the North Korean regime that economic growth is not an end in itself but a means to strengthen the country, he said.

Many of the workers portrayed in North Korean media over the past two weeks directed their criticism at Mr. Lee, often in the same words used by government statements, and said their anger at him inspired them to work harder.

“We will churn out as much steel as possible in the spirit of tossing the Lee Myung-bak group of traitors in a warmongering frenzy into the burning furnace,” Ri Myung Nam, a worker at a steel factory said on a TV newscast on June 3.

This Monday, another TV report showed soldiers at a construction project who, an anchorwoman said, were “flaming with hatred” against “Lee’s group of traitors.”

“Enraged by traitor Lee Myung-bak, we sped up our work,” soldier Kim Nam Il said in the report, adding his group last month achieved 150% of its goal, which was unspecified. “We will keep speeding up and mercilessly knock out their plot.”

Read the full story here:
Pyongyang Shifts Rhetoric at Home
Wall Street Journal