North Korean Economy Watch

Martyn Williams writes in IT World:

The girl in the video looks like she’s about 12 years old. Thin, dirty and with a vacant look on her face, she tells the cameraman that she’s actually 23 and she survives by foraging for grass to sell to wealthier families for their rabbits.

The sobering footage was shot in June this year in the province of South Pyongan, North Korea, and provides a glimpse into the life of one person who lives far from the military parades and fireworks last month marking the 65th anniversary of the Workers’ Party of Korea.

It was shot on a cheap camera by a man who goes by the pseudonym Kim Dong-cheol, a North Korean with a double life. In addition to his job as a driver for a company, Kim also works as a clandestine reporter for AsiaPress, a Japanese news agency that’s taken advantage of the digital electronics revolution to get reports from inside North Korea.

AsiaPress works with six North Koreans they’ve trained as journalists. They’re given instruction in operating cameras, using PCs and how to use cell phones so they don’t attract the attention of authorities. Then, every few months, they meet with AsiaPress representatives just over the border in China to hand over their images.

“When we started training journalists in 2003 or 2004, getting cameras into North Korea was a real problem,” said Jiro Ishimaru, chief editor of the news agency, at a Tokyo news conference on Monday. “Nowadays, within North Korea you are able to have your pick of Sony, Panasonic or Samsung cameras.”

The material they produce is often startling and documents a side of the country the government doesn’t want the world to see.

In another clip also captured by Kim, a North Korean woman argues with a police man. Asked for a bribe, she screams at him and pushes him. “This cop is an idiot,” she shouts.

For most journalists, getting into North Korea is a tough task. Getting outside of the capital Pyongyang to see the lives of average people in the countryside is very difficult. Seeing the sort of poverty or disagreement with authority that Kim caught on camera is impossible.

Most of the shots are recorded surreptitiously and the small digital cameras make smuggling images easier than from older tape-based models.

“You used to have to tape video cassettes to your stomach,” he said. “But it’s very easy to hide an SD Card somewhere on your body.”

AsiaPress isn’t the only media working with reporters or informants in North Korea. Outlets including Open Radio for North Korea and Daily NK also receive reports from correspondents inside the country that add additional information, understanding and sometimes rumor to what’s happening inside the country.

The reports are typically sent via cell phones connected to a Chinese mobile network. Signals from Chinese cellular towers reach a few kilometers into North Korea and are difficult to monitor by the state’s telecom surveillance operation.

Recently, North Korean authorities have woken up to the flow of information across the border and are trying to stop it.

“The greatest headache I face is telecommunications,” Ishimaru said.

Mobile detection units patrol the border looking for signals from within North Korea and, if found, attempt to triangulate their source.

“The number of these units has been increasing, so if you spend a long time on the phone the police will come and search your house,” said Ishimaru. “People have become frightened of using the phone.”

If caught the punishment can be severe. Earlier this year a man faced a public firing squad after he was caught with a cell phone and admitted to supplying information to someone in South Korea, according to a report by Open Radio for North Korea.

The risk such reporters face leaves their agencies open to criticism that they are putting people in unnecessary danger, but Ishimaru said his reporters all want to provide a true picture of life inside North Korea to the rest of the world. He pays them between $200 and $300 per month.

The digital media revolution isn’t one way. It’s estimated that half of all young people in major cities have watched pirated South Korean TV dramas.

“Media around the world has gone digital and that’s also happened with North Korean propaganda,” said Ishimaru. “But even the wealthy and those in authority don’t want to watch propaganda films and movies about Kim Il-Sung and Kim Jong-Il. They want to watch something that’s more entertaining.”

The shows are recorded from South Korean satellite TV broadcasts in China and burned onto DVDs or Video CDs that soon make it over the border and into North Korean markets.

There are occasional crackdowns, but even the police want to watch the dramas.

“Although there are crackdowns and things are confiscated,” he said, “I don’t think there is anyway the leaders can put a stop to this.”

Read previous posts about Rimjinggang here

Read the full story here:
How digital technology gets the news out of North Korea
IT World
Martyn Williams
11/2/2010

Read the full report here (PDF)

Executive Summary
The International Federation of Red Cross and Red Crescent Societies (IFRC) is the largest humanitarian organization in the Democratic People’s Republic of Korea (DPRK) for many years, thanks to its close collaboration with the DPRK Red Cross to assist to the most vulnerable in the country. In the coming years, the DPRK Red Cross, with support from IFRC, plans to strengthen its programmes based on existing needs and available funding, with a strong emphasis on long-term development.

Despite the DPRK government’s focus on improving people’s livelihoods through investments both in industry and agriculture, the humanitarian situation is fragile, while the political situation surrounding the Korean Peninsula remain tense. Key challenges include:

• ongoing economic difficulties(food, energy, drug supply, water, etc)

• disasters (flood damage in most areas)

• initial problems following monetary Reform

• worsening north-south relations

The challenging humanitarian situation demands the full support from the DPRK Red Cross and IFRC. The DPRK Red Cross, with,support of the IFRC, will continue to support the most vulnerable groups, ensuring access to essential drugs and basic health care, to prevent malnutrition and a further deterioration in the overall health situation. The disaster management and health programmes aim to help prevent further loss of life during disasters and health emergencies, promote community resilience and understanding of the Red Cross Red Crescent Movement.

Read the full report here (PDF)

Institute for Far Eastern Studies (IFES)
NK Brief No. 10-11-01-1
11/1/2010

The North Korean Ministry of People’s Security (MPS) recently issued an order restricting the use of automobiles and warning that any car or truck used to earn private income would be confiscated by the State. There were a few cases of authorities cracking down on the use of private buses in the mid-2000s, but this is the first time there has been a widespread crackdown on the private use of all vehicles.

According to a report from the Daily NK, a source from North Hamgyeong Province has revealed that “on an order from the MPS, a crackdown on privately-owned cars, buses, and 1.5-2 ton small trucks began last month,” and, “all traffic police were mobilized and are checking all registrations, car-use permits, and driving licenses.” According to the source, each regional transportation authority is filing comprehensive situation reports, which show that with the exception of cars used by the elite, all illegally-used cars are being confiscated. Even cars used by military-run foreign capital organizations are subject to inspection by police.

In North Korea, the lack of electricity has led, since the mid~2000s, to the sharp drop in the use of trains and a rise in reliance on the so-called ‘service car’ as the primary method of moving people and goods around the country. This crackdown on service cars will be carried out in two phases: Phase 1 will run until the end of the year, then Phase 2 will be carried out until April 2011. The ownership and use of cars by organizations and businesses will also be investigated, while other cars will be inspected one at a time as they travel the roads. If any illegal use is discovered, the car will be impounded.

This kind of measure appears to be one aspect of North Korean authorities’ on-going battle against “anti-socialism.” Cars and other government property being put to private use is problematic, but a crackdown of this size indicates that organizations and government workers are abusing the rules on such a scale that the government can no longer tolerate their corruption. In order for these service cars to exist, authorities must break laws, forge documents, and pay bribes to get a car registered, purchase gas, and handle profits.

However, a crackdown on these cars is expected to have many side-effects. Service cars began replacing trains in 2004, but the people’s reliance on them grew so quickly that they are now the primary means of transportation throughout North Korea.

Ultimately, the North can not avoid significant aftershocks of the measure; without service cars, not only will businesses suffer production problems, those people who make their living through wholesale and retail markets will suffer, and the standard of living for people across the country will take a hit.

Previous posts on this topic cna be found here and here.

According to the Korea Times:

North Korea’s information technology (IT) industry, especially in the field of computer-based animation production, is well on its way to achieve success, according to a Dutch outsourcing specialist currently conducting IT business with North Korean companies.

Speaking to an audience in Seoul for the launch of a book, “Europe-North Korea, Between Humanitarianism and Business,” Paul Tjia said France and Italy are two big users of North Korean animators.

He said that his Dutch clients also outsource animation to North Korea. European cartoon versions of classic literature such as “Arabian Nights” and “Les Miserables,” which aired on European television, were animated partly in North Korea.

The ceremony was organized by the Hanns Seidel Foundation, a German organization.

Clients of animation produced in the isolated communist regime aren’t just Europeans.

In early 2000 when the inter-Korean relations were at a peak, even a few South Korean animations were made in North Korea.

“Pororo the Little Penguin,” an animated cartoon series, was an inter-Korean project completed in 2002. Also the same year, Akom, a South Korean company, also outsourced the production of “Empress Chung” to North Korea. The animation was released in 2005.

Tjia mentioned that some of the American Walt Disney animations were created by North Koreans, purely by accident. Politically North Korea and America have a thorny relationship and the American government prohibits the private sector from doing business with North Korean companies.

“There was a time when Walt Disney outsourced their animation production to countries in Asia like Vietnam or the Philippines. But the company didn’t have complete control over exactly which country the work was created, and found out later that some was produced in North Korea,” he said, adding that this was discovered after the animations had aired on TV.

An official at the Seoul Animation Center verified some of what the Dutchman said, confirming that Walt Disney’s outsourcing to Asia was true, and that’s precisely how South Korea’s animation industry took off.

The news of a burgeoning animation industry in North Korea comes as a surprise to many who are used to hearing mainly about food scarcity, human rights violations and the regime’s nuclear ambitions.

People in the North Korean IT industry are given far more freedom than regular people in traveling abroad. They freely travel to “learn new skills,” Tjia said, showing a group photo with North Korean IT engineers in Europe.

Apart from animations, he added, North Korea is also keen on developing computer games, cell phone applications and banking systems for clients from the Middle East.

Cell phone applications, in particular, were devised even though not a single cell phone was available in Pyongyang.

“They made them to target European clients,” he said.

Yet for some the emergence of North Korea as an animation producer isn’t without alarm.

One European diplomat at the venue expressed concern over security, raising the possibility that the IT business with Europe could empower North Korea to become a cyber attacker.

North Korea already has a record of carrying out cyber attacks against South Korean websites, the most recent of which took place last July.

“They (North Koreans) say they are capable of producing computer viruses,” Tjia said, and he has seen anti-virus programs made by the North. The chief of the South’s National Intelligence Service was quoted last year as saying that North Korea had a force of 1,000 hackers who could engage in cyber warfare. He also said the North had “remarkable” cyber skills to carry out a massive attack on the South.

Read the full story here:
North Korea emerges as animation producer
Korea Times
Kim Se-jeong
11/1/2010

UPDATE 18 (11/08/2010): South Korean aid will finally be delivered to the DPRK on 11/09.  Here is more from the PRC’s People’s Daily:

Some of South Korea’s first government-financed rice aid in almost three years will be delivered to the flood-hit Democratic People’s Republic of Korea ( DPRK) starting Tuesday, the unification ministry said Monday.

Some of the 5,000 tons of rice currently in the Chinese city of Dandong will be sent to the northwestern DPRK city of Sinuiju, a city reeling from heavy rains in August, and the delivery will be completed by the end of next week, according to the ministry.

Three million cups of instant noodles, also part of the flood aid, have already been sent to Sinuiju, while some of the pledged one million tons of cement will reach the city later in the day, the ministry said.

As he took office in 2008, South Korean President Lee Myung-bak cut a free flow of rice aid to Pyongyang, which once amounted to 300,000 to 400,000 tons each year. A hard-liner toward Pyongyang, he also ended a decade of rapprochement under his liberal predecessors by linking aid to dismantlement of the DPRK’s nuclear programs.

UPDATE 17 (1o/29/2010): Here and here are photos of the aid arriving in China. 

UPDATE 16: According to the Korea Times, the shipment was delayed due to weather.

UPDATE 15: First aid shipment to go today (10/25).  According to Yonhap:

A shipment of rice was to depart a South Korean port en route to North Korea Monday, which will mark Seoul’s first government-financed rice aid to the communist nation in more than two and a half years.

A cargo ship carrying 5,000 tons of rice was scheduled to depart the port city of Gunsan for the northeastern Chinese city of Dandong on the border with North Korea. Another ship was also set to head from the port of Incheon to the Chinese city, carrying 3 million packs of instant noodles.

The Red Cross aid, which is aimed at helping the North cope with the aftermath of floods, marks South Korea’s first government-funded provision of rice to the North since President Lee Myung-bak took office in early 2008 on a pledge to link aid to progress in efforts to end Pyongyang’s nuclear programs.

Seoul also plans to send a shipment of 10,000 tons of cement to the North later this week.

A total of 13.9 billion won (US$12.3 million) came from the government coffers to finance the flood aid.

Also Monday, three Red Cross officials prepared to fly to the Chinese city to receive the rice and instant noodles there and transport the relief supplies by truck to the flood-hit North Korean border city of Sinuiju, according to officials from the Red Cross and the Unification Ministry.

The cargo ships are expected to arrive in Dandong around Wednesday.

Rice will be delivered in five-kilogram packages, and each package is marked with “Donation from the Republic of Korea,” South Korea’s official name.

In August, South Korea first offered to provide relief aid to the North after devastating floods hit the communist nation. North Korea later asked for rice, heavy construction equipment and materials.

UPDATE 14: S. Korea to send rice aid to N. Korea next month.  Accrording to Yonhap:

South Korea’s Red Cross will begin the shipment of 5,000 tons of rice and other aid materials next month to North Korea, which has been battered by summer floods, officials here said Sunday.

It would mark South Korea’s first government-funded provision of rice to the hunger-stricken communist neighbor since the conservative president, Lee Myung-bak, took office in early 2008 on a pledge to link inter-Korean ties to Pyongyang’s denuclearization.

The South’s government plans to convene a committee on inter-Korean exchanges on Tuesday to approve the use of taxpayers’ money earmarked for projects to improve relations with the North, the officials said.

“(The government) will report to the National Assembly on Sept. 28 and the committee will approve the aid worth 8 billion won (US$6.9 million) from the South-North Cooperation Fund (on the same day),” a Unification Ministry official said.

The rice shipment will depart from the port of Incheon, west of Seoul, on Oct. 25 and it will be delivered to the North Korean city of Sinuiju bordering China via Dandong, an adjacent Chinese town, he added.

Other aid items to be sent to the North in stages include 10,000 tons of cement, three million packs of instant noodles and some medical goods.

South Korea has ruled out the shipment of construction equipment, which the North requested, taking into account the possibility of the equipment being used for military purposes.

Seoul’s rice aid, although officials here stressed it is purely a humanitarian move, has been seen as a possible sign of a thaw in chilled inter-Korean relations. Military tensions have risen sharply since the sinking of a South Korean warship in March, which the South attributed to a North Korean torpedo attack.

South Korea suspended an annual shipment of 300,000-400,000 tons of rice to the North in 2008, citing little progress in efforts to end the North’s nuclear program.

UPDATE 13: Incheon Gov’t, Civic Group Sign MOU on NK Aid.  According to KBS:

The Incheon city government has signed a memorandum of understanding with a civic group to send 700 tons of corn to North Korean flood victims in Sinuiju.

The aid is worth 300 million won.

The city government and the Korean Sharing Movement obtained permission to provide the food aid from the Unification Ministry on September 14th.

The first shipment of corn will arrive late this month via an overland route linking the city of Dandong in China to the North Korean city of Sinuiju.

The remaining food aid will be delivered to North Korea by year’s end.

Previously, the Incheon city government announced a plan to send six shipments of milk and infant formula by December. The aid is valued at 100 million won.

The first shipment left Incheon port for North Korea on Saturday.

UPDATE 12: First shipment of aid has headed north.  According to the New York Times:

The nine trucks in the convoy carried 203 tons of rice that civic groups and opposition political parties in South Korea had donated for the victims of recent flooding in North Korea. The flooding is expected to worsen food shortages in the North, which even in a year of good harvests, cannot produce enough to feed its estimated population of 23 million people properly.

The shipment, coming just before the Korean harvest festival of Chuseok next week, also seemed to symbolize a newfound South Korean good will toward the North. It followed 530 tons of flour that a South Korean provincial government and civic groups sent on Thursday.

After President Lee Myung-bak came to power in Seoul in early 2008, South Korea had been reluctant to provide rice or any other major aid shipments to the North until its government in Pyongyang took significant steps to give up its nuclear weapons. The sinking of the warship, the Cheonan, further soured relations.

But in the past week, the South approved the civic groups’ donations, as well as a separate Red Cross plan to send 5,000 tons of rice. The approval followed conciliatory gestures by North Korea, including a plan to resume a Red Cross program of arranging temporary unions of families split by the 1950-53 Korean War.

The nine trucks in the convoy carried 203 tons of rice that civic groups and opposition political parties in South Korea had donated for the victims of recent flooding in North Korea. The flooding is expected to worsen food shortages in the North, which even in a year of good harvests, cannot produce enough to feed its estimated population of 23 million people properly.

The shipment, coming just before the Korean harvest festival of Chuseok next week, also seemed to symbolize a newfound South Korean good will toward the North. It followed 530 tons of flour that a South Korean provincial government and civic groups sent on Thursday.

After President Lee Myung-bak came to power in Seoul in early 2008, South Korea had been reluctant to provide rice or any other major aid shipments to the North until its government in Pyongyang took significant steps to give up its nuclear weapons. The sinking of the warship, the Cheonan, further soured relations.

But in the past week, the South approved the civic groups’ donations, as well as a separate Red Cross plan to send 5,000 tons of rice. The approval followed conciliatory gestures by North Korea, including a plan to resume a Red Cross program of arranging temporary unions of families split by the 1950-53 Korean War.

UPDATE 11: North Korea complains that it did not receive enough aid from South Korea.  According to UPI:

North Korea complained Sunday that a planned shipment of flood-relief aid from South Korea is much smaller than expected.

The state-controlled weekly Tongil Sinbo said the rice shipment the South Korean Red Cross said would feed 200,000 people for 50 days was not nearly adequate.

“After the lid was removed from the box of aid, there was only 5,000 tons of rice in it,” Tongil Sinbo said in a posting on the North’s official Web site.

The statement, which was monitored by South Korea’s Yonhap news agency, said the shipment would not last “even for a day.”

The Red Cross aid package, which includes rice and cement, was consigned to Sinuiju, a town near the Chinese border in a region hit hard by rain and flooding last month.

The shipment had been seen by diplomatic analysts as an easing of tensions between the two Koreas, Yonhap said. North Korea relies heavily on donations of rice and other supplies to prop up its economy.

Also, see this Yonhap story.

UPDATE 10: The Ministry of Unificaion is opposed to large scale food assistance—drawing a distinction between flood relief and large-scale food aid.  According to KBS:

Unification Minister Hyun In-taek says he is opposed to large-scale food aid to North Korea.

He said large-scale food aid is separate from humanitarian aid, and that all aspects of inter-Korean policy and the sinking of the “Cheonan” naval vessel should be considered.

Hyun made the remarks at a budget committee meeting on Friday when a main opposition Democratic Party member urged the government to send 500-thousand tons of rice to North Korea.

Hyun said that South Korea had sent large amounts of food aid on multiple previous occasions for what was called humanitarian assistance, but it is doubtful whether the rice had been distributed to people in need.

Adding to political pressure against further donations, the Choson Ilbo reports that the North Korean military is warehousing quite a bit of rice:

In a party caucus at the National Assembly on Thursday, Grand National Party floor leader Kim Moo-sung said calls for humanitarian food aid for the North are “inappropriate” at a time when the North “has as much as 1 million tons of rice in storage in preparation for war. We have to take this into consideration.”

The figure apparently comes from a report by the National Intelligence Service for the ruling-party leadership.

South Korea worries about a rice surplus when it stores only about 1.49 million tons this year. If it is true that the North is really holding back 1 million tons of rice for the military, it could have a profound effect on the ongoing debate over whether to increase aid for the North.

UPDATE 9: The first aid shipment has arrived.  According to Arirang News:

The first round of civilian emergency aid since recent flooding in North Korea was delivered to the border town of Gaeseong on Thursday.

The transport of 530 tons of flour on two dozen large trucks by Gyeonggi Province and non-governmental groups is also the first aid package from the South after it enforced punitive measures on Pyeonyang in May, in response to its sinking of the warship Cheonan.

And five South Korean personnel were permitted to cross the border to transfer the goods.

Kim Moon-soo, Governor Gyeonggi Province: “Many South Koreans have been wanting to provide assistance and there’s been a delay but we’re finally sending aid today. There are factors other than intent to consider.”

The group had been waiting since July for the government to give the green light to supply food aid worth about 240-thousand US dollars… enough to feed some 30-thousand children and other vulnerable groups for a month.

It is estimated that some 28 million square meters of agricultural land was swamped by rainfall of up to 324 milimeters in Gaeseong.

Kim Deog-ryong, Co-chair, Korean Council for Reconciliation & Cooperation: “Following the first round of aid, we plan to send additional second and third rounds in October. We hope nongovernmental efforts will eventually lead to continuous government-level assistance.”

The resumption of aid delivery to the North on humanitarian grounds will likely be succeeded by a series of foodstuffs, such as rice and corn, being transported through the Dorasan Customs, Immigration and Quarantine office, on top of the South Korean Red Cross’ pledged shipments of rice, cement and other supplies.

On Friday, more civilian aid consisting of 203 tons of rice is scheduled to be delivered to the flood-ravaged Shinuiju region.

Choi You-sun (reporter) “The South Korean government is maintaining a firm stance concerning its set of stringent measures against North Korea. But officials here say there are more applicants wishing to send provisions forecasting that there will be a significant increase in the amount of nongovernmental aid to the impoverished North.

UPDATE 8: The Ministry of Unification seems to have approved the private aid donations mentioned in UPDATE 7.  According to the AFP:

South Korea’s government said Wednesday it has approved a plan by local groups to send flood relief aid to North Korea, amid growing signs of a thaw after months of tension on the peninsula.

The Unification Ministry said it approved Tuesday requests to send emergency supplies worth a total of 2.24 billion won (1.2 million dollars) including 203 tons of rice.

The aid for flood victims in Sinuiju and Kaesong also includes flour, bread, blankets and instant noodles, said spokesman Chun Hae-Sung, adding the first shipment of 400 tons of flour would be sent Thursday.

It was the second time this week that Seoul groups have announced help following floods that hit the city of Sinuiju on the China border and the town of Kaesong, just north of the inter-Korean frontier.

UPDATE 7: In addition to the aid offernd by the South Korean government (in the posts below),  private organizations in South Korea are offering flood assistance.  According to Yonhap:

The Korea Sharing Movement and the Join Together Society (JTS) plan to ship 400 tons of flour to the North Korean border city of Kaesong via an overland route on Thursday, an official said. The Gyeonggi provincial government helped fund the assistance.

Separately, the Korean Council for Reconciliation and Cooperation, a coalition of pro-unification civic and social groups, also plans to send 130 tons of flour to the North on Thursday.

And in another Yonhap story:

An umbrella trade union said Wednesday it seeks to send about 100 tons of rice, possibly by land, to North Korea to help the flood-hit nation.

The Federation of Korean Trade Unions (FKTU), which claims up to 900,000 members across the country, said it is in talks with its North Korean counterpart to determine the exact delivery route and size of the aid.

UPDATE 6: The South Korean government is trying to figure out how to prevent aid from being diverted to the military.  According to the Choson Ilbo:

“Rice can be stored for a long time and is easy to divert to the military,” the official said. “But rice flour or noodles are harder to store for longer and are more likely to be given to the victims instead of being transported to military warehouses.”

The government offered the North 10,000 tons of corn following the reunion of separated families on the occasion of Chuseok or Korean Thanksgiving last year reportedly because this was less likely to be used for military rations. North Korean defectors say they were rarely given any rice supplied by the South, while rice bags with the lettering of the South Korean Red Cross stamped on were seen in military facilities close to the heavily armed border.

During the famine in the late 1990s, the North received corn flour aid from the U.S which the authorities then distributed through ration stations, a defector recalls.

But processing over 100,000 tons of rice into flour and other products may not be realistic as it would cost a lot of time and money, a Unification Ministry official said.

UPDATE 5: According to the Donga Ilbo:

Yoo Chong-ha, head of the (South) Korean National Red Cross, said in a news conference Monday that the Red Cross will send 10 billion won (8.6 million U.S. dollars) worth of aid comprising 5,000 tons of rice, 10,000 tons of cement, three million packages of instant noodles, and medicine.

He also suggested a working-level meeting of Red Cross organizations from both sides in Kaesong Friday on Pyongyang’s proposal for reunions of separate inter-Korean families.

On the volume of rice aid, Yoo said, “Around 80,000 to 90,000 people in (the North Korean city of) Shinuiju are known to be displaced, and 5,000 tons of rice can feed 100,000 people for 100 days,” translating into 500 grams a day per person.

The South’s Red Cross said it set the amount given that international aid organizations allocate 300 to 500 grams per person when they send rice assistance to the North.

The budget for buying the rice was 7.7 billion won (6.6 million dollars), or 1.54 million won (1,330 dollars) per ton based on the price of rice Seoul purchased in 2007.

Even if the South Korean government provides rice aid to the North, the combined amount will be around 10 billion won as the South’s Red Cross proposed to the North last month.

Excluded from the aid package was heavy equipment that the North requested. Most of the 10 billion won in aid will come from a South Korean government fund for inter-Korean cooperation.

UPDATE 4: And the picture becomes clearer.  According to the Guardian:

The $8.5m (£5.5m) package, to be funded by the government, is the south’s first aid shipment to its neighbour since the sinking of a warship in March reduced bilateral relations to their lowest point for years. Seoul says its vessel was sunk by a North Korean torpedo, a claim Pyongyang denies.

The countries may also resume reunions for families separated by the 1950-53 Korean war, which ended in an uneasy armistice but no peace treaty. The reunions were suspended after a South Korean woman was shot dead by a guard during a visit to the North Korean tourist resort of Mount Kumgang, in 2008.

UPDATE 3: Some specifics come out.  According to Yonhap:

S. Korea’s Red Cross announces 5,000 tons of rice aid for N. Korea’s flood victims

UPDATE 2: South Korean farmers demand ROK government send aid to DPRK to keep rice prices high.  According to the AFP:

Thousands of South Korean farmers rallied Friday, demanding the government stop a fall in rice prices by shipping surplus stocks in state silos to North Korea.

The farmers urged President Lee Myung-Bak to resume an annual shipment of 400,000 tonnes of rice to the North, which suffers severe food shortages. The shipment was suspended in 2008 as relations soured.

About 3,000 farmers took part in morning rallies in a dozen cities and counties, said the Korea Peasants’ League, which represents farmers, adding more were under way or planned in the afternoon.

“Resuming rice aid to North Korea is a short cut to stabilising rice prices and also improving inter-Korean ties,” league spokesman Kang Suk-Chan told AFP.

The government makes an annual purchase of rice from farmers to stabilise prices amid falling national demand, but is predicting a bumper harvest this year.

Unless some stocks are sold off, the agriculture ministry says the South’s strategic rice reserve will soon reach an all-time high of 1.49 million tons, twice the 720,000 tonnes considered necessary for emergencies.

Last week minister Yoo Jeong-Bok said the government would sell about 500,000 tons of the reserve this year to companies that make alcoholic beverages and processed food ingredients.

Farmers claimed the ministry’s move would fail to stop the fall in prices. They want the government to lift the 2008 ban and to purchase this year’s harvest at higher prices.

Subsidised farmers grow more rice than South Koreans want to eat. The country’s consumption of the staple fell in 2007 to its lowest level for decades as people ate more meat and vegetables.

Cross-border tensions this summer have run high over the sinking of a South Korean warship with the loss of 46 sailors. The North vehemently denies involvement but the South has cut off most cross-border trade.

Read the full story here:
S.Korea farmers demand rice shipment to N.Korea
AFP
9/10/2010

UPDATE 1: The DPRK accepts the ROK’s aid offer.  According to the BBC:

North Korea has responded to an offer from South Korea of emergency food and medical aid, saying it would prefer to receive rice and building materials.

The South Korean offer, worth more than $8m (£5m), was made last week after severe flooding in the North.

South Korea says it is considering the North’s request.

The aid would be the first large-scale shipment since South Korea blamed its impoverished northern neighbour for sinking one of its warships in March.

South Korea blames Pyongyang for sinking the Cheonan with a torpedo, killing 46 crew.

North Korea denies any role in the incident and has demanded its own investigation.

Food aid

North Korea’s Red Cross said it would prefer rice, cement and heavy construction equipment – items it said were necessary for flood recovery efforts, according to Seoul’s Unification Ministry and Red Cross.

The South’s offer excluded rice – a staple which Seoul has stopped sending to Pyongyang amid strained relations.

North Korea has been hard hit by floods caused by heavy rains in July and August, especially in its northern areas bordering China.

This week a South Korean newspaper published pictures of people sleeping in tents and queuing for water in the city of Shinuiju.

They were taken by an undercover source who also reports rare public complaints that the North Korean leadership is not doing enough to help.

Read the full story here:
North Korea accepts flood aid offer from South
BBC
9/7/2010

ORIGINAL POST: South Korea offers flood aid to the DPRK. According to the BBC:

South Korea has made its first offer of aid to North Korea since it accused Pyongyang of sinking one of its warships in March.

South Korea’s Red Cross has offered 10bn won ($8.3m, £5.3m) worth of flood aid to its impoverished neighbour.

The offer came hours after the United States imposed new sanctions on the North in response to the sinking.

South Korea blames North Korea for sinking the Cheonan on 26 March with a torpedo, killing 46 crew.

North Korea denies any role in the incident and has demanded its own investigation.

FOOD AID
North Korea has relied on food aid from China, South Korea and aid agencies to feed millions of its people since a famine in the 1990s resulted in the deaths of hundreds of thousands.

But the communist country has been hard hit by floods caused by heavy rains in July and August, especially in its northern areas, bordering China.

“The aid includes medical kits, emergency food and supplies,” a Unification Ministry official said, quoting the Red Cross message sent to North Korea.

The offer has yet to be accepted by the North.

Under President Lee Myung-bak, the South has stepped back from its earlier “sunshine” policy of unconditional aid and has linked the provision of aid to progress from the North on ending its nuclear programme.

A South Korean offer of about 10,000 tonnes of corn to North Korea in October 2009 was the first official aid to its hungry neighbour for almost two years.

The year before, the South had offered 50,000 tons of corn but the North rejected the shipment amid high tensions.

‘TOO EARLY’
The offer came after North Korea reportedly indicated it was ready to return to six-party talks over ending its nuclear ambitions.

Parts of North Korea have been badly affected by severe flooding Leader Kim Jong-il told the Chinese president that he wanted to see negotiations resumed during a visit to China last week, Chinese state media said.

The talks – which involve the two Koreas, China, Russia, Japan and the US – have been stalled since December 2008 over Pyongyang’s missile and nuclear tests.

But South Korea is demanding an apology for the warship sinking before any return to the negotiations.

Japan also says the time is not right to resume talks.

On Tuesday its foreign minister, Katsuya Okada, told China’s visiting nuclear envoy, Wu Dawei, that it was still “too early” to think about a return to talks.

On Monday the US imposed additional sanctions on North Korea, targeting trade in arms, luxury goods and narcotics.

Read the full story here:
South Korea offers aid to flooded North
BBC
8/31/2010

Accordign to Yonhap:

South Korea’s Red Cross is pushing to set up its own communications channel with its North Korean counterpart so that it can carry out humanitarian missions independent of cross-border political tensions, the organization’s chief said Thursday.

“We’re talking with the government on the need to work with the North Korean Red Cross through an independent means of communication,” Yoo Chong-ha, president of the Korean National Red Cross, said in an interview with Yonhap News Agency.

“Government-level dialogue is between governments. The role of the Red Cross has to be separate,” Yoo said.

The Red Cross, although tasked with non-political projects such as relief aid and family reunions, has at times served as an alternative track for contact and talks between the two Koreas, who are technically still at war after the 1950-53 Korean War ended in a truce.

“The Red Cross is not a subsidiary agency to the Unification Ministry. It is not appropriate for all concerned that the Red Cross should work on behalf of the government,” Yoo said in the interview. The chief will be heading to the North to oversee a round of family reunions that begin on Friday.

Currently, there is no channel linking the Red Cross chapters of the two Koreas. Their sole hotline at the truce village of Panmunjom was severed as part of Seoul’s package of punitive measures announced in May after holding the North responsible for the deadly sinking of a warship that killed 46 sailors.

Yoo said he would tell his North Korean counterpart, Jang Jae-on, of the importance of resuming humanitarian exchanges, regardless of political tensions, when he visits North Korea.

In Red Cross talks this week that reopened for the first time in a year, the North asked Seoul to provide tens of thousands of tons in rice and fertilizer aid in exchange for expanding family reunions.

“This is not an issue for the Red Cross” to deal with, said Yoo, with skepticism on whether such aid draws results.

Read the full story here:
S. Korean Red Cross seeks independent communications channel with Northern counterpart
Yonhap
10/28/2010

According to China Economic Review:

Could North Korea be saved by Chinese-style reforms? In return for its continued support, China is pushing the rogue state to liberalise its economy, and Chinese firms are making inroads into various sectors, especially infrastructure and mining. Earlier this week, I interviewed Felix Abt, a Swiss business consultant who was appointed managing director of a pharmaceutical joint venture in Pyongyang with a brief to turn around the loss-making company, about his experiences over the last eight years.

How open is North Korea to foreign investment, and how many foreign companies are operating on the ground?

In 1992 the Supreme People’s Assembly adopted three laws allowing and regulating foreign investment — the Foreign Investment Law, the Foreign Enterprise Law, and the Joint Venture Law.

Since then, foreign investors have become active in a variety of industrial and service industries. There are a few hundred foreign-invested companies operating at present, mainly smaller sized ventures ($100,000 to $3 million) and of Asian origin (with China ranking No.1).

There are a few very large foreign investments, mainly in the telecom and cement industries. Western multinationals have been shying away from North Korea for fear of ending up on a sanctions list in the world’s largest economy. BAT sold its highly profitable tobacco factory due to political pressure in Great Britain to a Singaporean company a few years ago.

What sort of person sets up business in North Korea? What sort of industries have arrived and what sectors are not represented?

The domestic market is still very small and limited and and not much growth can be expected in the foreseeable future. So to talk about a promising emerging market at present would be a silly exaggeration.

However, North Korea is a very interesting location for the processing of products from garments to shoes to bags where you send the cloth or the leather and the accessories and they send you the finished products back.

The same goes for the extraction of minerals and metals, abundantly available in North Korea, in which case you would send equipment and get the mining products.

In addition, the manufacturing of low to medium technology items is very competitive and such products are already being made with foreign investment in North Korea from artificial flowers to furniture to artificial teeth. I was involved in making the business plan for the artificial teeth joint venture and know therefore that such products can be manufactured with a much better profit margin than for example in the Philippines where the artificial teeth had been produced before.

A particularly promising industry is IT due to the extraordinary quantity and quality of mathematicians unmatched by other countries. The first and only software JV, Nosotek, has seen remarkable successes within a very short time from its foundation and could become a subject of interest to investors who would never have thought of putting any money in North Korea until now.

How easy is it to do business there? Are most foreigners concentrated in Pyongyang or are they spread around?

It depends on the expectations, on the choice of the local partner and on the expatriate staff a company sends there. You need to thorougly select the most suitable local partner and an expatriate manager that is not only professionally competent but also can adapt to and cope with a demanding business environment.

The success of the pharmaceutical joint venture I was running in the past depended on a fast capacity building of the Korean members of the board of directors, managers and staff. I brought them to China where they visited the first foreign and Chinese invested pharmaceutical JV and I convinced its Chinese octogenarian architect to become a member of our company’s board of directors.

Since he faced very similar problems decades earlier he could convince the North Koreans quite easily why certain things had to be done in a certain way to make the business successful. We visited a great number of pharmaceutical companies, wholesalers, pharmacy chains in China and some of our staff even worked in a Chinese factory for some time.

When I wanted to set up the marketing and sales function I was first told that “companies in the DPRK usually don’t have a sales dept.”. I was asked to send a letter to the cabinet to explain my reasons to get the permit for doing so. The visits in China were surely important eye openers and helped getting things organised like in any other country.

The Korean managers and staff quickly acquired all the necessary skills and were able to run the day to day business (factory, import and wholesale of pharmaceuticals, pharmacies) alone when my term ended as managing director.

Many foreign business people are based in Pyongyang, but there are also many working in different places throughout the country, e.g. near mines in the mountains.

Hu Jintao has urged North Korea to speed up its economic reform, using China as a model. Could North Korea open up in the same way over the next few years?

The Chinese are better informed than the scholar and North Korea expert who recently wrote in the Wall Street Journal that the country’s elite would never agree to reform its economy as they fear the system would then collapse.

Together with the Chinese, I believe the risk of a collapse is much bigger if no reforms are carried out than if there are slow and controlled changes.

Once the economy starts taking off and people’s living standards rise the people will hardly challenge the system and the leadership even though the North Korean people know that South Korea’s economy is much more advanced.

Read the full story here:
Can North Korea embrace Chinese-style reforms?
China Economic Review
Malcolm Moore
9/23/2010

According to the Mainichi Daily News:

A magazine composed almost entirely of materials smuggled out of North Korea by reporters living inside the country has just launched its first English edition in an effort to reach a wider audience.

The quarterly Rimjingang has been available in Korean and Japanese since 2008. The English edition will be published about twice a year from now on, chief editor Jiro Ishimaru said at a recent meeting in New York University, adding that digital editions in various formats will be available from 2011, including one from Apple Inc.’s iBook store.

Published by Asiapress International, a Japan-based journalists’ organization, the magazine is named after a river in the Korean Peninsula flowing north to south across the demilitarized zone. It operates with eight North Koreans who report clandestinely while living in such capacities as driver, factory worker and mother.

All of the reporters left North Korea because of economic hardships but returned to the country after being recruited to work for the magazine, which provides them with journalistic training and recording equipment.

In a country that tightly regulates information, taking images of street-level North Koreans for outside distribution would most likely be construed as treason. For safety, the identities of the North Korean reporters are completely shrouded in secrecy — they do not know each other or what their colleagues are doing, Ishimaru said.

The reporters periodically cross the China-North Korea border to deliver what they have recorded. The materials include digital images of people who foreigners would rarely have access to — a woman making merchandise at home to sell at a market, homeless children looking for food in a dump, clothing regulation enforcers on the lookout for youngsters wearing unacceptable fashions such as tight-fitting pants, and young soldiers scavenging for food from a farm.

“The reporters are taking risks because they have a strong will to let the outside world know the reality in North Korea and inspire a desire to improve the situation there,” Ishimaru said.

Some of the recent materials cover the paralyzing effect of the November 2009 currency redenomination in which North Korea slashed the value of the won, setting the exchange rate between the old and new bills at 100 to 1 and imposing restrictions on the quantity of old bills that could be swapped for new ones. The move was widely seen as the state’s attempt to reinforce control of the economy.

The magazine shows one of those affected, a woman identified as “Ms. Kang,” who is in her 50s and makes a living selling general goods such as plates and bowls procured in China.

Shortly before the devaluation, “Ms. Kang” reportedly took out a loan of 10 million won, worth about $3,000 at the time, from an acquaintance. Now she struggles with a huge debt as no currency trader will exchange her old won into Chinese yuan, leaving her unable to buy goods in China. She is also unable to convert them into the new won beyond the 100,000-won limit.

“Because the Americans don’t know very much about North Korea, we wanted to include some introductory pieces that explain people’s everyday lives there, including the impact the market is having,” said Bon Fleming, an American editor who translated the bulk of the material for the English edition.

Suzy Kim, assistant professor of Korean history at Rutgers University, said she was most impressed by the abundance of visual footage in the magazine. But she added, “Many of the stories in the magazine are anecdotal — there is as yet no way to collect enough information to present a statistical context for the stories.”

In order to make up for its heavy dependence on a handful of reporters, Kim suggested that the magazine can improve by incorporating a wider variety of views about North Korea from people with different backgrounds, experiences and opinions.

Ishimaru said North Korea is a nation changing fast and so are its people, contrary to the oft-reported images of brainwashed citizens. One of the forces behind the change is the increasing availability of digital media, a trend fueled by the influx of Chinese electronics, including VCD players, which are much more affordable than DVD players, he said.

Illegal copies of South Korean TV dramas crossed the border into North Korea en masse around 2003 via ethnic Korean communities in northeastern China, where watching South Korean satellite broadcasting programs became popular in the late 1990s, according to Ishimaru.

“What allowed the North Korean government to exert tight control over the daily lives of its people was the state’s food rationing system, which taught everyone to remain submissive as long as they were fed,” Ishimaru said.

Since the collapse of the public distribution system in the famine of the 1990s, however, people have been forced to fend for themselves and have become less afraid of the authorities, he said.

“You can no longer talk about North Korea without talking about the expansion of the market economy there,” Ishimaru said.

“The question is not about food — it’s whether North Korea will open up to the outside world or not.”

Previous posts about Rimjingang can be found here.

I have added Rimjingang to my list of North Korea media outlets all of which can be found here.

Read the full sotry here:
Undercover magazine on North Korea launches English edition
Mainichi Daily News
10/28/2010

Pictured Above: Love North Korean Children Bakery (Sonbong, DPRK)

Michael Rank writes in the Asia Times:

North Korea is a land of hunger and poverty but the children of Hahyeon primary school look reassuringly healthy, thanks to a small, British-based charity that runs three bakeries in this isolated and highly secretive country.

The children receive their midday meals courtesy of Love North Korean Children, [1] which bakes 2,500 mandu or steamed buns each day for pupils in 20 schools in and around the northeastern coastal city of Sonbong, near the Chinese border.

“If we did not provide these buns the children would go hungry,” said the charity’s founder and powerhouse, South Korean-born George Rhee.

Rhee works indefatigably to make sure that his bakeries have sufficient supplies of flour and other essential items, all of which have to be imported from China, something of a logistical and bureaucratic nightmare.

“All of our food gets to the children. None goes to the North Korean army or government,” said Rhee, and as he travels to North Korea from London up to 10 times a year, he is in a position to know.

Rhee, 52, told how he was inspired to found Love North Korean Children as a result of his own childhood experiences. He was one of eight children – he has six brothers and a sister – and when his father’s land reclamation business went bust, it left the family penniless. His parents were forced to put him and his twin brother in a children’s home.

The home was a cruel place and the children often went hungry, and it was this experience that made Rhee decide that he wanted to help the children of North Korea.

“At first I was thinking of opening an orphanage, but the government wouldn’t allow that. They say North Korean leader Kim Jong-il is our father, so there is no need for orphanages. So then I decided to open a bakery,” Rhee recalled.

Rhee first visited North Korea in 2002, and opened the charity’s first bakery the following year, in Rajin, close to Sonbong. I visited him there last month. He recently handed over responsibility for the Rajin bakery to a Korean-American group, but he also runs a bakery in Pyongyang, and this year opened a new bakery In Hyangsan, about 150 kilometers north of the capital.

He puts the cost of flour and equipment for the Sonbong and Pyongyang bakeries at about US$6,300 each per month, and for the Hyangsan bakery at almost double that, as it feeds twice as many children.

Rhee is a minister in the Assemblies of God Church and has its backing for his charity. Most of the costs are borne by three Dutch Christian foundations, the Barnabas Fund, Stichting Ora and Dorcas Aid International, but Rhee hopes to build more bakeries in North Korea and recently went on a fundraising trip to South Korea to talk to local companies and churches.

“There is a lot of interest in what we are doing. I am hopeful that we will be able to raise more money to open more bakeries,” he said.

Rhee said he hopes to open a fourth bakery in Haeju, the hometown of his late father, who escaped by boat to South Korea at the height of the Korean War in 1951.

“The North Korean government says we can. The only question is money,” he added.

Although the children at the Sonbong school looked healthy and well fed, they are among the lucky ones. Rhee said some of the children whom his bakeries feed are thin and pale, even with the extra food they receive from Love North Korean Children.

“I have even seen dead children in the streets. The situation for children in North Korea is terrible,” he stressed.

The United Nations World Food Program (WFP) bears this out. It says 33% of the population is undernourished and 23% of children under five are under-weight for their age.

“Public rations are reportedly far from sufficient and daily food consumption for most households is poor”, the WFP reports. Many people are forced to survive by cutting down on the number of meals per day, eating more wild foods – grass and bark in some cases – and less maize and rice, and reducing portion sizes for adults so that children can eat.

Although conditions have improved since the mid-1990s, when hundreds of thousands, possibly millions, of people died in a terrible famine, North Korea remains one of the world’s poorest countries.

Aid workers and diplomats say the government bears much of the blame, with an inflexible, highly centralized food-distribution system that results in a large proportion of the population going permanently hungry.

The WFP tactfully avoids blaming the government, referring to “a lack of arable land, poor soil management, insufficient water reservoirs to combat drought, shortages of fuel and fertilizer, outdated economic, transport and information infrastructure, and a general vulnerability to natural disasters”.

It quotes the Food and Agriculture Organization as saying North Korea needs to import 25% of its grain requirements, “but economic constraints mean the DPRK [Democratic People’s Republic of Korea] will struggle to meet its food import needs.”

All this means that small organizations like Rhee’s do a valuable job in feeding people who would otherwise go hungry, although the paranoid, xenophobic nature of the regime makes their work extremely challenging.

Until recently, a number of South Korean charities were active in North Korea, but the Seoul government ordered them out after the sinking of the naval ship the Cheonan in March in which 46 South Korean sailors died.

The South Korean government blamed North Korea for the sinking, and relations between the two countries, cool at best, went into the deep freeze.

Surprisingly perhaps, Rhee strongly supports the Seoul administration’s tough line, as he believes most of the South Korean charities were naive and were unable, or unwilling, to prevent the North Korean government from diverting much of the food they provided to the million-strong army.

“I support President Lee Myung-bak in this,” Rhee said. “These South Korean organizations were foolish” in not monitoring where food and other supplies were going.

Love North Korean Children was not affected by the ban, however, as it is a British-registered charity and Rhee, who has lived in the UK for 20 years, is a British citizen.

“The North Koreans cooperate well with us. It isn’t easy but we help to make sure that people get fed,” he said.

I had unexpected proof that the North Koreans appreciate Rhee’s efforts. During my visit to North Korea, officials constantly complained to me about photographs I was taking and at one point deleted some pictures on my camera.

I was concerned that they would delete more photographs when I left the country, as frequently happens.

I need not have worried, however. The customs officer who checked my camera at the North Korean-Chinese border was well disposed towards us, as his children were fed by Love North Korean Children. He took just a quick look at my photographs and waved us through.

You can see the author’s photos from Rason here.

Read the full story here:
British bakeries a lifeline in North Korea
Asia Times
Michael Rank
10/27/2010

According ot the Union of Catholic Asian News:

The Catholic Church in South Korea has sent rice aid to flood-hit areas of North Korea, the first aid since a South Korean naval ship was sunk reportedly by a North Korean torpedo.

The Korean Bishops’ Committee for the Reconciliation of the Korean People committees delivered 50 tons of rice worth 95 million won(US$85,000) on Oct. 22.

Uijeongbu diocese, the Korean Conference of Major Superiors of Men’s Religious Institutes and Societies of Apostolic Life and the Korean Catholic Farmers’ Movement also assisted with the shipment.

The rice was sent to the (North) Korean Roman Catholics Association, which organized distribution of the rice in the Kaesong (Gaeseong) district.

“This is the first rice support to North Korea since the Cheonan naval ship incident last March,” said Father Baptist John Kimm Hun-il, executive secretary of the Subcommittee for Aid to North Korea under the bishops’ committee for the reconciliation.

“The food condition of North Koreans is worsening and their government is unable to support them. We need to offer more help,” he added.

Following the sinking of the naval vessel, the South Korean government banned all economic exchanges with North Korea, except for the minimum humanitarian aid.

Read the full story here:
Bishops send food aid to flood-hit North Korea
Union of Catholic Asian News
John Choi
10/26/2010