Archive for the ‘International Organizaitons’ Category

Recent DPRK market restrictions extended to mobility of the people

Tuesday, November 27th, 2007

Institute for Far Eastern Studies
NK Brief No. 07-11-27-1
11/27/2007

Following Kim Jong Il’s August 26 announcement that, “Markets have become anti-Socialist Western-style markets,” measures to increase restrictions on markets across North Korea have also restricted individuals’ ability to migrate.

The Central Committee of the (North) Korean Workers’ Party released a statement in October, revealing that Kim Jong Il had stated, “The current state of anti-socialism should not be moderately opposed. A strong and concentrated attack must be laid out in order to thoroughly eliminate [this anti-socialist behavior].”

According to the Daily NK, an informant inside North Korea revealed that authorities are “contacting people who have applied for permission to travel to other regions at their trip destination and setting up interviews in order to verify that interviewees are conforming with their [stated] intentions,” and, “ultimately, long distance wholesalers are restricted in their movements, cause a reduction in the amount of goods circulating on the markets.”

Good Friends, a South Korean NGO for North Korean aid, also reported, “In North Hamgyung Province, if someone is absent from work for two days or not seen in their neighborhood, that person’s actions are carefully investigated,” and, “if someone does not check out, each of their family members are called in for interrogation.”

After the ‘Arduous March’, as market activity grew in North Korea, the number of whole-saling ‘middle-men’ grew considerably. These traders received travel permits by applying under the guise of visiting authorities, family matters, special occasions, or other personal reasons. Long-distance traders need a travel permit. In order to get such a permit, cash or goods were frequently offered as bribes.

Now, as it is becoming more difficult to receive travel documents, not only long-distance traders but also even normal vacationers are facing growing difficulties. In particular, people who need to travel to China for family visits are especially worried due to the increasingly strict issuance of travel permits.

The insider reported, “As markets grow, because wholesalers are gaining power as they make large amounts of money, authorities seem to be strongly restraining them,” and “if a wholesaler is caught, his goods are taken, leading to difficulties for market traders.”

According to a North Korean defector in the South with access to DPRK information, university students in Pyongyang are also being subjected to increasingly strict personnel inspections and restrictions. Even when they go to the library, they must fill out an exit record and can only remain out for one day before student leaders pay a visit to their home.

Students not strictly obeying school policies have their bags and pockets searched while being put under investigation and being further restricted. Of course, in the past, as well, students with problems faced inspections of their dormitory or personal goods, but recently, inspections of even everyday students are on the rise.

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The North Korean Authorities Control Sales Items And Prices at Markets

Friday, November 16th, 2007

Daily NK
Lee Sung Jin
11/16/2007

It is reported that the North Korean authorities have been regulating Jangmadang (markets) by placing age limit on who can do business in the market and controlling sales items and prices.

45-year old Ahn Hyuk Jun said in an interview with DailyNK conducted on Wednesday, “A decree is posted at the entrance to many markets in Pyongyang that the state would control sales prices and the quantity of sales items.” Ahn, a resident of Pyongyang, came to Yanji, China on November 4th to visit his relatives.

Mr. Ahn said, “According to the decree, the state forbids merchants from bringing out more than 15 items for sale and selling more than 10 kg of sea products in the market.”

The decree is another controlling measure of markets adopted by the state. Previously, the state has conducted a campaign to fight anti-socialist trends appearing in many market places. Moreover, it has banned female merchants who are under the age of 39 from doing business in the market. In Pyongyang, the age limit is 49. It seems that North Korea has adopted a rather extreme measure as both the number of people engaged in business and products circulated in the markets continue to increase.

However, few merchants would follow the new measure which limits sales items and prices because they cannot make a profit that way. It is certain that the new decree would likely turn out futile.

Mr. Ahn said, “For example, the decree lowered the price for octopus from 3,700 won/kg to 2,200 won/kg, and the price for flatfish from 3,500/kg to 1,800/kg.”

Ahn said, “No one in the market would abide by the state decree at the risk of losing profit,” adding, “many merchants would bring out items for sale that are low in quality and matches the state-imposed price anyway. However, a real business is done in a clandestine manner.”

According to Ahn’s explanation, the real business is done as follows. Many merchants on their way to the market stop at neighboring households and unload their sales items. Then they pay the households to keep their items there. At the market, they bring out low-quality items on sales stand, and post a sign with a list of real sales items right next the stand.

When there are customers checking the list, merchants approach to them and begin bargaining. Once it is done, they both come out of the market and go the household where the merchant hands over the asked item to their customers.

Ahn said, “Overall, many markets of Pyongyang are stagnant due to the state regulation on market transactions.” He added, “Many Pyongyang citizens argue that the state, instead of distributing food, should allow them to do business in the market so that they can make a living.”

“There is a rumor that Kim Yong Il was appointed as the prime minister because he pledged to close all markets,” Ahn said, “Many people worry that a man who lacks knowledge about how money works is now in charge of the nation’s economy.”

Good Friends, the Seoul-based relief organization dedicated to North Korea also reported yesterday that the North Korean authorities have lately produced a great amount of lecture material which bans business activities across the country.

According to the lecture material, the authorities asserted that market transactions would destroy North Korea’s own socialism from within and facilitate the infiltration of capitalism into the society. They urged that the state should strengthen mass ideological training in order to educate the public about why it is important to place age limit on who can do business in the market.

As mentioned earlier, North Korea has banned females under the age of 39 from doing business in the market. There is a rumor that the state would increase the age limit to 45 at the end of this year.

In North Korea most working age females are forced to work at factory complexes. In Pyongsung of South Pyongan Province, the state sends out a dispatch to local females under the age of 30 in order to have them work at neighboring factory complexes. However, few would actually work at the designated complexes because many complexes already have enough workers. Even if they could get a position at factories, it is reported that those employed barely receive wages and food distribution.

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Ignoring Buffett, Fabien Pictet Eyes North Korea Fund

Sunday, November 11th, 2007

Bloomberg
Bradley Martin
11/2/2007

Fabien Pictet & Partners Ltd., a British money manager that specializes in emerging markets, plans to establish a fund focused on joint ventures in North Korea.

Fabien Pictet has applied to North Korea’s embassy in London for permission to visit Pyongyang to explore opportunities, Chief Executive Officer Richard Yarlott said in an interview. The closely held firm initially would buy into South Korean companies doing business in the north, he said.

“It would be very difficult to put more than $50 million directly into North Korea,” said Yarlott, 47, who helps manage $750 million of bonds and equities. “But it would be very easy to put $500 million into listed South Korean companies and then later, as we see specific private equity opportunities, go with them.” He declined to give further details.

A North-South agreement on economic cooperation, signed Oct. 4, may foster cross-border projects in industries such as mining and shipbuilding. Still, that prospect isn’t enough to lure billionaire investor Warren Buffett to a northern plunge.

“Things would have to change a whole lot before we can make investments,” said Buffett, chairman and CEO of Berkshire Hathaway Inc., during a visit to South Korea last week.

Buffett, who owns shares of South Korea’s Posco, Asia’s biggest steelmaker by market value, rates the nation’s stocks as “modestly cheaper” than most around the world. The benchmark Kospi index’s price-to-earnings multiple of 15.4 for current year estimated earnings is the lowest in Asia-Pacific after Thailand.

London-based Fabien Pictet, set up in 1998, invests in countries from Brazil to the Ukraine.

It started a South Korean equity fund, Three Kingdoms Korea Fund Inc., in 2004 partly to be ready for a northern push, Yarlott said.

LG Corp., Hyundai

South Korean companies — including units of LG Corp., the country’s fourth-largest industrial group, and Hyundai Corp. — have $2 billion to invest over the northern border, he said.

Three Kingdoms Korea has had a total return of 88.5 percent from April 30, 2004, to Sept. 28 this year. South Korea’s Kospi has risen 126 percent in the same period.

Foreign investment in North Korea has been legal since 1984 and repatriation of profits since 1992. The country doesn’t permit private ownership of assets and hasn’t established a stock exchange.

South Korea’s closely held Hyundai Asan Corp., which started a northern tourism business in 1998, has been reported to be struggling to avoid or reduce operating losses.

London-based Anglo-Sino Capital Partners Ltd., which in 2005 created Chosun Development and Investment Fund to focus on direct investment in North Korea, last month doubled its investment target, citing strong interest.

“We have raised the fund from $50 million to $100 million,” Colin McAskill, chairman in London of Koryo Asia Ltd., the Chosun fund adviser, said in an interview.

The fund will concentrate on direct transactions with North Korean companies that have been active internationally and have track records as foreign currency earners, he said.

Some investors say it’s too early to call North Korea an emerging market.

“I’m 77 years old and the thought that the day would come in my time — it’s very flattering but it’s a long way off,” said Buffett, also known as the “Sage of Omaha.”

Yarlott said the country was changing. “North Korea, like China, will develop a stock market,” he said.

“At this rate, even the sage will get a look-in.”

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American Tourists in the DPRK 2008

Wednesday, November 7th, 2007

According to the Koryo Tours website, the DPRK will once again be performing Arirang in 2008.  This time around, American tours have been extended by a full day.  Where as previous tours ran from Saturday to Tuesday, now they will run from Tuesday to Saturday (matching the days that Air Koryo flies to Beijing).

I saw the Mass Games in 2005 with Kim Jong Il himself (official coverage, Simon’s coverage).  It was quite an experience.  You will never see anything like it.

Traditionally the Mass Games have only been held on big holidays (typically on notable anniversaries: 10,15, 20, etc.)  This is now the fourth year in a row that Arirang will be performed (2005, 2006, 2007, 2008), a show that was first performed in 2003 (I think).

To the Americans out there: it is not illegal and will not put you on any kind of watch list.

Warning: flooding in October has interrupted trips the last two years!

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The Number of Children Who Drop out of School Increases Due to Hardships

Monday, November 5th, 2007

Daily NK
Yang Jung A
11/5/2007

In North Korea where free education is espoused, the number of students dropping out of school due to economic issues has been continuously increasing.

An North Korean aid organization, Good Friends, said in an informational material distributed on the 31st of October, said, “In Wonsan, Kangwon Province, there are a lot of children who do not even get to attend elementary school. They stop out of school due to difficulties in living and follow their parents to the market or sustain an existence from digging medicinal herbs from mountains and fields.”

In the midst of such a reality where the students’ attendance rate is increasingly falling, the source relayed that “At such a rate, voices of complaint among some officials of Kangwon Province that have said that all of Kangwon Province will become illiterate are high.”

”When actually walking around the streets or in the market of Wonsan, one can easily meet children who are selling water. It is easier to meet children in the markets than in schools.”

The source also relayed, “In a high school in Pohang District in Chongjin, North Hamkyung Province, three objects worth 2,000 won per person, among the list of notebook, writing utensils, winter vest, belt, and winter socks, are required under the pretext of classroom decorations.”

”In elementary schools in Hoiryeong, 500g of sunflower seeds per person were collected for Kim Jong Il’s birthday preparation on February 16th of next year. In other regions, elementary schools and middle schools are collecting each kind of products and upper-levels students are required to bring 20kg of scrap iron, 4 strips of rabbit leather and 1kg of white peace seed and the lower-levels 500g of scrap-iron, 500g of peace seed and 200g of castor-bean.”

It added, “Students whose family situations are difficult cannot keep up with school education. The number of students who do not go to school due to the shortage of funding are increasing.”

Further, “teachers prefer children who come from well-to-do families and give up on the children from poor families. Before, teachers would visit the homes of every student and try to persuade the families to allow the children to return to school, but nowadays, no one takes that kind of an initiative.”

The source also revealed that starting last October, street beggars have been increasing in the vicinity of the Chongjin markets.

The source stated, “Around the market area, young beggars daily fighting for the food that the restaurants have thrown away can be seen daily. During the day, they ask for alms near the market or look for things to eat in the garbage dump and in the winter, since the weather is cold and there are no places to sleep, people gather near steel mills, so they end up being completely covered with dust and dirt.”

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Ignoring Buffett, Fabien Pictet Eyes North Korea Fund

Friday, November 2nd, 2007

Bloomberg (via DPRK studies)
Bradley Martin
11/2/2007

Fabien Pictet & Partners Ltd., a British money manager that specializes in emerging markets, plans to establish a fund focused on joint ventures in North Korea.

Fabien Pictet has applied to North Korea’s embassy in London for permission to visit Pyongyang to explore opportunities, Chief Executive Officer Richard Yarlott said in an interview. The closely held firm initially would buy into South Korean companies doing business in the north, he said.

“It would be very difficult to put more than $50 million directly into North Korea,” said Yarlott, 47, who helps manage $750 million of bonds and equities. “But it would be very easy to put $500 million into listed South Korean companies and then later, as we see specific private equity opportunities, go with them.” He declined to give further details.

A North-South agreement on economic cooperation, signed Oct. 4, may foster cross-border projects in industries such as mining and shipbuilding. Still, that prospect isn’t enough to lure billionaire investor Warren Buffett to a northern plunge.

“Things would have to change a whole lot before we can make investments,” said Buffett, chairman and CEO of Berkshire Hathaway Inc., during a visit to South Korea last week.

Buffett, who owns shares of South Korea’s Posco, Asia’s biggest steelmaker by market value, rates the nation’s stocks as “modestly cheaper” than most around the world. The benchmark Kospi index’s price-to-earnings multiple of 15.4 for current year estimated earnings is the lowest in Asia-Pacific after Thailand.

London-based Fabien Pictet, set up in 1998, invests in countries from Brazil to the Ukraine.

It started a South Korean equity fund, Three Kingdoms Korea Fund Inc., in 2004 partly to be ready for a northern push, Yarlott said.

LG Corp., Hyundai

South Korean companies — including units of LG Corp., the country’s fourth-largest industrial group, and Hyundai Corp. — have $2 billion to invest over the northern border, he said.

Three Kingdoms Korea has had a total return of 88.5 percent from April 30, 2004, to Sept. 28 this year. South Korea’s Kospi has risen 126 percent in the same period.

Foreign investment in North Korea has been legal since 1984 and repatriation of profits since 1992. The country doesn’t permit private ownership of assets and hasn’t established a stock exchange.

South Korea’s closely held Hyundai Asan Corp., which started a northern tourism business in 1998, has been reported to be struggling to avoid or reduce operating losses.

London-based Anglo-Sino Capital Partners Ltd., which in 2005 created Chosun Development and Investment Fund to focus on direct investment in North Korea, last month doubled its investment target, citing strong interest.

“We have raised the fund from $50 million to $100 million,” Colin McAskill, chairman in London of Koryo Asia Ltd., the Chosun fund adviser, said in an interview.

The fund will concentrate on direct transactions with North Korean companies that have been active internationally and have track records as foreign currency earners, he said.

Some investors say it’s too early to call North Korea an emerging market.

“I’m 77 years old and the thought that the day would come in my time — it’s very flattering but it’s a long way off,” said Buffett, also known as the “Sage of Omaha.”

Yarlott said the country was changing. “North Korea, like China, will develop a stock market,” he said.

“At this rate, even the sage will get a look-in.”

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S. Korean biz leaders to inaugurate body for inter-Korean economic cooperation

Thursday, November 1st, 2007

Yonhap
11/1/2007

South Korean business leaders are set to inaugurate a forum next week to facilitate economic cooperation between the two Koreas’ private sectors, a South Korean business body said Thursday.

The Korea Chamber of Commerce and Industry (KCCI), which has spearheaded the the forum’s establishment, said about 70 business and financial figures, including KCCI chief Sohn Kyung-shik, and Unification Minister Lee Jae-joung, will get together on Monday to launch the private forum for inter-Korean economic cooperation.

Sohn will take the helm of the 60-member forum that will include representatives of the South’s leading conglomerates that have taken part in inter-Korean economic projects — Samsung Electronics Co., Hyundai Motor Co. and Hyundai Asan Corp.

The forum’s inauguration comes on the heels of the Oct. 2-4 inter-Korean summit. At the close of the summit, South Korean President Roh Moo-hyun and North Korean leader Kim Jong-il issued a joint declaration calling for massive investment from the South in the North’s key industrial sectors, including shipbuilding and tourism.

The forum plans to serve as a mediator for exchanges and cooperation between the two Koreas’ private firms. After receiving information and feedback from South Korean firms on their investments in the North, the forum also plans to make recommendations to the two governments on inter-Korean economic projects.

In addition, the forum envisions the dispatch of a delegation to the North, which will examine the investment climate in the communist country and establish a dialogue channel for inter-Korean economic cooperation in the private sector.

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‘Bad apples’ sour relief in North Korea

Thursday, November 1st, 2007

Asia Times
Sunny Lee
11/1/2007

The people in Dandong in China’s northeast Liaoning province know more about North Korea than any other people on the planet. They see it every day – literally. Dandong neighbors North Korea just across the Amnok River (Yalu River in Chinese). Even on a foggy day, one is able to see North Korean fishermen at work.

This city of 2.4 million people is, once in a while, highlighted in the international media because it is the major land route where China’s aid to North Korea – both food and fuel – is shipped. It also becomes a major destination for foreign journalists when a rumor of an imminent visit by the secretive North Korean leader Kim Jong-il to China smokes up. Dandong is a place where Kim’s train has to pass through when he visits China.

Given its special geographical proximity to North Korea, naturally this is also a key outpost to which many non-governmental organizations (NGOs) involved in North Korean refugees are paying keen attention.

In Dandong, the name “NGO” is almost a synonym for “groups working on North Korean refugees”. Unfortunately, it often carries a negative overtone. This may sound odd, but that’s how things are here. “If you really know what NGOs actually do, you will feel quite turned off,” said a local resident.

He said many of these NGOs are commercial brokers in disguise. That is, they help North Korean refugees to flee from China. But they do it, really, for money. They charge money and even take advantage of the refugees’ vulnerability. He indignantly said he knows an NGO representative who slept with North Korean female refugees in his care.

That’s just one of the examples that he shared. In fact, he said he had seen so many depraved NGOs that it now gives him goose-bumps when he hears the word “NGO”.

Stories about bad NGOs are also coming out from those who are in the know – journalists. But they seldom write about it because doing so makes them unpopular among some interest groups or even backfire. For example, a writer could be accused of maligning the good work that most NGOs do, and worse, being a “pro-North Korea” figure who closes his eyes to the human-rights tragedy of North Korean refugees. That is a very powerful argument.

With increasing international attention on North Korean human-rights conditions and widely circulated harrowing stories of North Korean refugees in the news media, NGOs working on this field usually receive strong moral support from the mainstream media that provide them with legitimacy, which in turn helps NGOs receive financial support from sympathetic supporters.

Critics, however say that as NGOs rely on donations, when they are cash-strapped they sometimes resort to publicity stunts to raise their profile, and more importantly, to raise money.

Some NGOs even go as far as to deliberately put the refugees in danger to draw international attention, critics argue. One of the most controversial cases was a January 2003 incident in which a group of as many as 78 North Korean defectors was caught by Chinese police while they were attempting to escape on boats from China’s east coast shores to South Korea and Japan respectively.

A South Korean reporter later trailed the same route and deplored: “It’s a place you don’t want to choose. The Chinese North Sea Navy Fleet of the People’s Liberation Army base is just around the corner. How would anyone in his sane mind choose this place as an escape route unless you wanted to get caught?” he fumed.

The Durihana Mission, probably the most well-known group in Seoul that helps North Korean refugees to come to South Korea, is also alluded to in that criticism. The group’s founder, Cheon Gi-won, is dubbed as the “Godfather of Refugees”. He has reportedly brought more than 500 North Korean refugees to the South.

Cheon himself was once arrested by Chinese police and served a 220-day prison term. His incarceration, however, also helped him to become known internationally. After this year’s recipient for Nobel Peace Prize was announced, for example, the Asian Wall Street Journal ran an article mentioning Cheon as someone who deserved the prize for his work on North Korean refugees.

Cheon pioneered the so-called “Mongolian route”. That is, his team takes North Korean refugees in China to the Sino-Mongolian border and helps them to escape to Mongolia, from where they go to another country, usually South Korea.

“There was a case where his team took a group of North Korean refugees to near the Mongolian border from China. But instead of taking them safely to the border and making sure they crossed it, they simply dropped the North Korean refugees in the middle of nowhere near the border on a dark night and just drove away,” said a person who has knowledge of the incident. They reportedly didn’t even give them a flashlight or anything that could help them orient their direction in the dark.

Confused and fearful, the North Koreans tried to find their own way to freedom. But their panic drew attention from Chinese border patrols. Some got shot, the rest were arrested.

“They then made an all-out media stunt, letting the world know the atrocity and how China mistreats North Korean refugees. We also used to run articles on it. But after we got an idea of how the thing had played out, we stopped writing about it,” a South Korean journalist said.

With the dropping of media coverage in South Korea, he said Cheon has recently turned to the Western media and is now actively working in the US, where he set up a branch office last year.

Cheon was not available for comment. But Lee Chung-hee of Durihana, who answers inquires during Cheon’s absence, said: “That doesn’t even make the slightest sense.”

“It’s very difficult to engage in a constructive dialogue with such critics. Think about it from a common sense point of view The consequence of a failed escape would mean death for North Koreans. If there was any deliberate intention, it would be beneath human dignity to do so,” Lee said. Those who follow this logic believe that NGOs simply didn’t plan the escape well enough.

In Dandong, Cheon is a well-established name. People who know Cheon said that even though the allegations might be true, Cheon himself is not likely to be involved. One pointed out that as Cheon has become internationally known, there are people who become jealous and want to undermine him.

A former official with a major South Korean NGO said that he strongly doubts whether Cheon himself was part of any alleged incidents. But he pointed out that some NGOs act without considering how their irresponsible acts harm others who are sincerely helping North Korean refugees.

Critics point out that NGOs’ media stunts and big-scale, organized escapes also draw the Chinese authorities’ attention to the many North Korean refugees who are hiding in China.

Some view that it’s unfair to blur the big picture of the good work that most NGOs do. They also point out that most NGOs are victims of some “bad apples” or commercial brokers who pose as NGOs or even as missionaries.

A good number of commercial brokers are former North Korean refugees. As many NGOs were arrested or deported from China in recent years, North Korean refugees who have settled in South Korea began to take the job. The reason they take up this risky business for themselves, and even are willing to walk again the same route that they themselves had escaped from, is because of the economic difficulties and job discrimination they face in South Korea.

Some of these commercial “pay-for-escape” brokers demand as much as one third of the “settlement money” that North Korean refugees expect to receive once they arrive in South Korea. Unfortunately, things have started to have a chain effect. Looking at some “NGOs” making money, now even those NGOs which otherwise do the same work non-profit, have started to charge a minimum of US$2,000 to $3,000 as a “logistical fee”.

Sunny Lee is a writer/journalist based in Beijing, where he has lived for five years. A native of South Korea, Lee is a graduate of Harvard University and Beijing Foreign Studies University.

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Korea allows aid group to reach flood victims directly: RFA

Wednesday, October 31st, 2007

Yonahp
Sam Kim
10/31/2007

North Korea has allowed an international relief group to bring supplies directly to the North’s southeastern region hit hard by recent floods, Radio Free Asia (RFA) has reported.

The U.S.-funded broadcasting station cited Tom Henderson of England-based civic group, Shelter Box, Tuesday as saying that North Korean authorities made the rare decision, allowing aid officials to deliver food and other supplies to flood victims in the region southeast of capital Pyongyang.

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Economic doldrums, restrictions on hawking cost jobs in N. Korea: aid group

Friday, October 26th, 2007

Yonhap
10/26/2007

North Koreans have been suffering from chronic job shortages due to worsening economic conditions and a recent move by North Korean authorities to limit the number of hawkers for fear of capitalism spreading in the isolated, communist state, an aid group said Friday.

The North has recently forbidden women under the age of 40 from selling merchandise on their own, Good Friends said in its latest newsletter. The previous age limit was 30.

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