North Korean Economy Watch

Pictured above (Google Earth): The Musan Mine, the DPRK’s largest.  See in Google Maps here.

According to the JoongAng Daily:

During his surprise May visit to China, North Korean leader Kim Jong-il secured free fertilizer and discounted food to help alleviate the impoverished country’s chronic food shortages.

A source in Beijing who monitors North Korea-China relations told the JoongAng Ilbo on Monday that Chinese officials agreed to provide 200,000 tons of fertilizer free of charge as well as 500,000 tons of corn at a discount in exchange for rights to North Korea’s abundant natural resources.

“When 200,000 tons of fertilizer is planted on North Korean soil, it can bring about a three-fold increase in the harvest,” the source said. “This can be the equivalent of giving 600,000 tons of food.”

The source added that China agreed to sell the 500,000 tons of corn for half of the international rate, which would be $30 per ton.

The corn, the source said, had already crossed the border into North Korea from northeastern China.

In exchange, Kim will allow China access to his country’s natural resources.

“The two parties agreed to participate in the extraction of buried rare earth minerals in Musan in Hamgyong Province,” the source said. “It’s quite a profit for China as it is thirsty for materials.”

North Korea is estimated to have around 20 million tons of rare earth minerals, which are vital in the production of high-tech goods.

The Beijing-based source said the agreement gives China the responsibility for the cost of building roads to transport the natural resources as well as lending equipment.

In exchange, North Korea will hand over 50 percent of the extracted rare earth minerals free of charge to China, with the rest to be sold to China at international market rates.

Meanwhile, other sources said that Kim also received a health checkup during his stay in China.

“When Kim Jong-il was visiting Yangzhou, he received a special examination from an oriental medicine doctor that the highest Chinese elite have gone to over the years,” a source familiar with North Korean issues said

The source added: “Kim Jong-il has never trusted China’s Western medicine. I heard from a Chinese official that Kim received an oriental medicine diagnosis by taking his pulse and that it did not involve drawing blood.”

Additional Information:

1. Here is a post linking to all the major DPRK food stories this year.

2. The media has reported on other DPRK food barter deals with Cambodia and Myanmar.

3. The role of the Musan Mine in DPRK-PRC relations has been quite interesting.  Here are previous posts on the mine.

Read the full story here:
North got fertilizer on Kim’s trip to China
JoongAng Daily
Chang Se-jeong
2011-8-19

Pictured above (Daily NK): A DPRK ID card from 2004.  Click image for larger version.

UPDATE 2 (2011-8-3): According tothe Daily NK:

North Korea is apparently gearing up to make one of its regular changes to the nationwide system of ID cards. According to inside sources, the authorities have been gathering in the current ID cards from citizens, a process that has been completed in some areas including parts of Yangkang Province.

Notably, the new ID cards are set to include information on an individual’s job. For more than ten years, North Korea has kept watch on the activities of the people via their places of work, meaning that the inclusion of a person’s job on his or her ID card implies modifications to the existing system of controls.

A Pyongyang source explained, “People’s unit chairpersons have been taking IDs from the people and presenting them to the People’s Safety Ministry (PSM) since earlier this year. The rumor is that a new card clearly recording a person’s job, family and marital relations will come out, just like the old card.”

Another source from northerly Yangkang Province confirmed the story, saying, “We already gave in all our ID cards,” and adding, “I just heard from the PSM agent in charge of citizen registration that the new ID cards would be exactly the same as the old style ID card, including family, marriage and job.”

Understandably, having to give in existing ID cards has made life difficult for those people needing permission to travel, since every time they want to go anywhere they have to visit the local People’s Safety Ministry office to retrieve their card and explain the situation in order to get a permit.

Similarly, people had to retrieve their cards in order to vote in local elections on the 24th of last month, before returning them to the security authorities.

All the sources The Daily NK spoke to about the changeover regard the addition of job information as the most interesting aspect of the new card. As the Pyongyang source explained, the current ID cards do not include job information, meaning that the authorities “don’t know what work we are doing, and so are unable to control us properly. As a result of this, talk about the release of the new card is doing the rounds.”

One Chinese-Korean who regularly visits China for trade agreed, adding, “The absence of jobs from the current ID makes management of citizens difficult, so word is that they will completely return to the old style cards.”

Until 1999, North Korea included all the information now being mooted on ID cards in the shape of a small passport shaped book; however, the authorities then moved to a single card-based system featuring just name, birth date, address, marital status, an image and an ID number.

In North Korea, everyone over the age of 16 has an ID card, a system that began on September 1st, 1946. They have been regularly changed as part of official record keeping for the purposes of control. Previous known changeovers occurred in 1953, 1958, 1964, 1974, 1984, 1999, and 2004.

UPDATE 1 (2010-5-12): According to the Daily NK:

A source from Pyongyang reports that a new national identification card will begin to be issued on May 17th in the capital, and thereafter the project to replace old cards and issue the new version is supposed to begin in the provinces.

This project is the culmination of a project begun in 2004, when the North Korean authorities tried to computerize citizen databases and issue a new form of ID card but were apparently not able to complete the project due to a lack of funds. Now, they have resumed the project for those who did not receive the new ID card in 2004 and those who turned 17, the legal age for receiving the card, between 2004 and 2010.

The source explained during a phone call with a Daily NK journalist today, “Since early May, people’s unit chairpersons have been calling door to door to let residents know about the new ID card and check the record of who lives where.”

He added, “Those who are away from their recorded locations for any reason have been instructed to return and receive the new ID cards.”

The new ID card is plastic, and contains a picture and personal information such as name, gender, race, birthplace and residence. Alongside the process of issuing the new ID card, computerization of resident records will also resume. Therefore, families of defectors and people in China temporarily are about to get in hot water.

The source said, “This must be a risk to households which are found to contain missing persons or absent members. Some of those whose family members already left for China or elsewhere will doubtless go to local People’s Safety Ministry offices to explain their situation and offer bribes.”

In the case of defector families, if they have not previously reported missing family members, they will be treated as suspicious, and be placed under increased monitoring. However, the families of those who are visiting China legally with permits will also have problems.

The basic permit issued by the authorities is generally like a single entry visa, valid for at least thirty days plus a ten-day extension. However, most visitors tend to stay in China to earn money for up to a year. After returning home, they have to offer bribes to the National Security Agency (NSA), which polices the border, to avoid punishment.

However, if the situation is revealed during the new ID card project, it will be a bigger issue which might not be solved with a bribe for the local NSA. Therefore, such people face a serious worry.

In North Korea, the People’s Safety Ministry is in charge of management and control of the residents’ database. In the mid-1990s, when the precursor to the Ministry, the People’s Safety Agency, was registering all residents’ identifications, the Shimhwajo Case, one of the biggest purges in North Korean history, took place.

Read the full story here:
New ID Card Project Ready for Launch
Daily NK
Yoo Gwan Hee
2010-5-12

ORIGINAL POST (2010-3-5): According to the Daily NK:

A rumor that the North Korean authorities are working towards issuing a new form of identification card to all citizens is circulating, according to sources inside North Korea.

This rumor has been reported from some areas of Shinuiju and Yangkang Province. However, there has been no word from Pyongyang or any other provinces.

To date, North Korea has tended to issue new ID cards once every 10-15 years. However, the last time was in 2004, which has led some to suggest that there might be additional reasons for the changes this time besides standard administrative requirements.

Indeed, this may have been borne out by a Daily NK source from Shinuiju, who cited a cadre from a neighborhood government office as saying to him, “We decided to change the form of the ID card because spies from the South Korean intelligence agency (National Intelligence Service) are trying to infiltrate our society by copying our cards,” leading another source to comment, “We are so busy and the situation is so terrible, so why must we try to switch it?”

Free North Korea Broadcasting (Free NK) has released the same news, citing a source from Daehongdan in Yangkang Province. “The authorities are reorganizing and confirming all identification records,” the source explained to Free NK, “We presume that once the process is complete; they will change the ID card system.”

One defector familiar with the system added a further rationale for the possible move. “The reorganization is designed to confirm whether residency records are correct by making citizens re-register their residency in their locality,” he said, “This can also be a measure used to identify defectors and vagabonds.”

There is a market for North Korean ID cards in China.  Find out why here.

Read the full story here:
North Korea Changes ID Cards
Daily NK
2010-3-5

Pictured above: Photos from Korean Central Television of Kim Jong-il and Kim Jong-un voting.

KCNA is now reporting the completion of the DPRK’s “elections” to local peoples assemblies.

According to Yonhap:

The Korean Central News Agency said 99.97 percent of all registered voters voted for a total of 28,116 candidates for deputies in people’s assemblies across the country.

In North Korean elections, turnout is usually near 100 percent and candidates, hand-picked by the ruling party, are elected with absolute support.

North Korean leader Kim Jong-il also cast his ballot at a polling station in Pyongyang, along with his heir-apparent son Kim Jong-un and a senior party official, according to the KCNA.

According to the APF:

During their four-year term, the local assemblies convene once or twice a year to approve budgets and endorse local leaders appointed by the communist party.

Analysts have said this year’s elections were aimed at revamping official bodies before a major political event next year to mark the 100th anniversary of the birth of founding president Kim Il-Sung.

According to Itar-Tass (Russia):

Foreign reporters – correspondents of Itar-Tass, the Chinese Xinhua news agency and Chinese central television – were invited to polling station No.134, located at the North Korean National Economy University. The chairman of the North Korean Central Election Commission told Itar-Tass that “our country will mark the centenary of Kim Il-Sung’s birth date when the country will flung open its doors to the building of the mighty and prosperous state”.

Therefore, the present elections, he continued, “are called upon to consolidate people’s power and to demonstrate the nation’s unity”.

The chairman said that any candidate over 17 had the right to participate in the campaign. In compliance with the republican Constitution, the term of office of deputies of local bodies of self-rule who are called here “servants of people”, is four years. Sessions of these bodies of power, called once or twice a year, confirm local budgets and an economic action plan as well as elect chairmen of people’s and administrative committees, judges and assessors.

Here are KCNA articles about the election: here, here, here, here, and here.

Institute for Far Eastern Sudies (IFES)
2011-7-19

Kim Jong Il has made a total of 63 official activities in the first half of 2011, focusing mainly on providing field guidance at economic related facilities. On contrast, only one onsite inspection was given at a military base.

According to an official report from the Ministry of Unification, Kim Jong Il was witnessed to have made 63 official appearances this year thus far, already reaching 80 percent of total activities made last year, a record all-time high in the number of official activities for Kim

Specifically, he has made 28 economic related activities which encompassed 45 percent of the entire official activities. Only 14 military related activities were made, the lowest number ever recorded. Out of the 14 military activities, 9 consisted of attendance at military performances and only one trip was entirely associated with military inspection. Alongside these inspections, Kim also made 7 foreign-related activities.

The monthly breakdown of Kim’s official activities was 15 in January, 11 in February, 9 in March, 13 in April, 10 in May and lastly, 5 in June.

Since 2009, Kim made consistent official appearances and the reports of his official activities were found regularly on a bi-weekly basis, except for June when his activities were not reported for two weeks between 14th to 30th.

Kim is accompanied by several officials on his official activities, in which 54 officials were recorded to have accompanied this year. Kim Kyong Hui escorted Kim the most at 48 times. Following Kim Kyong Hui; Jang Song Taek, vice chairman of National Defence Commission (NDC) accompanied 45 times; Kim Ki Nam, secretary of Workers’ Party of Korea (WPRK) accompanied 43 times; Tae Jong Su, secretary of WPK made 43 trips; Ju Kyu Chang, Director of WPK 38 times; Kim Jong Un, vice chairman of Central Military Committee of WPK 35 times; Park Do Chun, secretary of WPK 29 times; Choi Tae Bok, secretary of WPK, 27 times; Hyun Chul Hae, director of Korean People’s Army 26 times; Moon Kyong Duk, Pyongyang, secretary of Pyongyang City Party Committee 25 times; and lastly, Lee Myong Su, director of People’s Safety Ministry made 25 trips.

After making his appearance at the KWP Convention on September 28, 2011, Kim Jong Un has made a total of 73 official activities, and 35 of these activities took place this year.

In detail, Kim Jong Un made 20 military, 18 economic, and 7 foreign-related activities. Monthly breakdown of activities are 2 times in September, 16 times in October, 11 times in November, 9 times in December, 5 times in January, 9 times in February, 8 times in March, 7 times in April, 4 times in May and 2 times in June.

Kim Jong Un’s activities were chiefly military related in which 86 percent comprised of accompanying senior Kim on his visits to political and military sectors. This is a natural outcome, considering his official position as the vice-chairman of Central Military Committee of WPK. The high number of military activities is in sharp contrast with his father, who began to focus mainly on economic activities since 2008.

The New Year’s Message delivered at the beginning of this year placed “improvement of North Korean people’s lives and development of light industry” as the top agenda for the nation. Correspondingly, Kim Jong Il official activities were mainly economic-related to light industry and agricultural sectors.

Kim Jong Il’s official activities are noteworthy indicator which exhibit the direction of leadership and the changes occurring amongst the main elites

A couple of new publications came out on the DPRK by some well known scholars:

“Hitting Below the Belt: Pyongyang Spills the Beans on Secret Summit Talks”
38 North
Aidan Foster-Carter

“Political Change in the DPRK: An interview with Stephan Haggard and Daniel Pinkston”
National Bureau of Asian Research

Last night on the KCTV evening news (July 6), the DPRK unveiled the propaganda posters for the upcoming elections:

Click on the image for a larger version*.

The slogan at the bottom of the painting reads “일심단결의 위력을 시위하자”.  Thanks to a helpful reader, this translates to “Let’s demonstrate the power of single-hearted unity”.

Click on image for a larger version*.

The slogan at the bottom of the painting reads “모두다 찬성 투표하자”. Again with thanks to a reader, this means “Let’s all vote yes”.

See translated KCTV footage here.

Marcus Noland writes about the elections as a form of social control.

The Daily NK has more on the elections:

North Korea has confirmed the date of the country’s next local People’s Committee elections. According to a report put out by Chosun Central News Agency (KCNA) today, the poll is set to take place on the 24th of next month.

Citing a June 13th release put out by the Standing Committee of the Supreme People’s Assembly, KCNA reported this morning, “According to Article 139 of the Socialist Constitution of the Democratic People’s Republic of Korea and the decision of local People’s Committees, province, city and county People’s Committee delegate elections will proceed on July 24th.”

North Korea’s constitution demands that it conduct elections to local committees every four years. The last, which occurred almost exactly four years ago, in July, 2007, saw 26,635 delegates elected to various committees.

At the end of May, The Daily NK cited an inside North Korean source as suggesting that the elections were likely to be in June, and that the authorities were involved in the process of voter registration.

However, such elections are a formality, while the process of voter registration is used partly as a way to threaten the families of defectors. One inside source, reporting on the contents of a people’s unit meeting in late May, cited a security official, “He said, ‘We will punish or exile families who either fail to take part in or miss it because they are not here. Contact people who have gone to China for trade or gone to live there illegally and tell them to come back without fail.”

According to the Voice of Russia,  the election campaign is aimed at drawing the maximum turnout which in 2007 was officially 99.82% voters.

* Originally I used the images from KCTV, but since Yonhap later published better versions, I ammended the post to include them.

According to Yonhap:

North Korean leader Kim Jong-il has focused his inspection tours on economic facilities in the first six months of the year, an official said Wednesday, indicating that he wants to improve his country’s faltering economy ahead of next year’s landmark centennial anniversary of his late father’s birth.

Kim made 63 public appearances during January and June, the largest number ever compared to the same period in previous years.

On 28 of the outings, the North Korean leader inspected economic facilities, Unification Ministry spokeswoman Lee Jong-joo told reporters.

Kim “has been increasing activities on economic areas since 2008,” she said.

The North has vowed to improve light industries and agriculture as part of its stated campaign to build a prosperous and powerful nation next year, the centennial of the birth of the country’s late founder, Kim Il-sung, the father of current leader Kim.

The move comes amid doubt about whether the North can make any economic breakthrough by next year.

North Korea has built some 500 houses in its capital of Pyongyang, far short of its goal of building 100,000 houses by next year, according to the National Intelligence Service, Seoul’s spy agency.

…

During the first half of this year the North Korean leader inspected just one military unit and made 13 other military-related public appearances, including art performances, Lee said.

Meanwhile, Kim’s son and heir apparent, Kim Jong-un, accompanied his father on 35 inspection trips, more than 80 percent of which were related to the military.

This year I have actually been keeping a spreadsheet of KJI’s guidance trips.  I have a list of 80 public appearances by Kim Jong-il and 47 could be considered economic.  It is kind of hard to determine since many facilities are actually dual-use and provide goods for both the civilian and military economies.  Also, many “cultural” activities in which Kim Jong-il partakes are actually military-related since he attends them with KPA leaders.  Anyway, I have provided the full list of KJI’s public appearances and links to the relevant KCNA stories in this Excel spreadsheet.  You can do your own calculations.

According ot the DailyNK:

The North Korean authorities are conducting an extensive investigation into the actions of soldiers attached to border guard units, based on the presumption that such guards are frequently guilty of aiding and abetting defection. Those found to have done so are being arrested and severely punished.

A source from Yangkang Province explained the news yesterday, “For the third time they are conducting an investigation along the border in Kim Jong Eun’s name, but this time it is focused on the soldiers.”

“The decree says to arrest and severely punish soldiers who have aided and abetted in defection, to pull out the roots; so the investigation has been harsh from the very beginning.”

The two previous investigations into defection from the border region, both said to have been launched in the name of the successor, happened in February and April this year, as reported by The Daily NK. However, this is the first time that attention has turned away from defectors themselves and towards those soldiers who help facilitate a lot of the escapes.

“There are two members of an investigation team from Defense Security Command going to every guard post, and they are questioning the soldiers one by one,” the source said.

It is well known both within and without North Korea that border guards are commonly bribed to turn a blind eye to defection. Through very serious questioning and the threat of severe punishment, the authorities are presumably hoping to kill two birds with one stone; both hindering further defections and re-instilling military discipline.

However, the new investigation has already inspired at least two guards from one post to desert instead of face censure, according to the source.

“Two men from a guard post in the Hyesin-dong area of Hyesan took their weapons and deserted, so now they are in the middle of a house-to-house investigation,” the source explained, adding, however, “People are saying, ‘They’ve already fled to China, why the hell would they still be in the country?’”

Although nobody knows why the two men chose to desert, the source said he had heard that they were indeed involved in defections, and feared punishment.

Across the Tumen River in Changbai, China, meanwhile, there is also an unusually intense investigation going on, according to sources there. It is suspected that the two events are related.

A source explained, “Public security officers and soldiers are stopping and investigating cars one by one. I heard that soldiers from North Korea deserted with their guns, so maybe it is because of that.”

Of course, the investigation is hurting small traders, too.

“Big-time smugglers are not having problems,” the Yangkang Province source explained. “But day-to-day small scale smugglers are complaining about the investigation. Border guards are telling them to put up with it just a little more.”

Read the full story here:
Border Investigators Turned on Soldiers
Daily NK
Lee Seok-young
2011-6-3

Andrei Lankov recently wrote a paper on the rise of China and the implications for Korean unification for a Korean-language publication.

You can download a PDF of the paper in English here.

Abstract
The rise of China can be seen as the single most important strategic problem which Korea faces currently. In the late 1970s, China entered a phase of high-speed economic growth, which still seems to be almost unstoppable. According to World Bank estimates, the average annual increase in China’s GDP in the years 2000-2009 was 9.7%. This is the world’s highest growth rate. Perhaps for the first time in modern history, the country which has the highest growth rate is the country with the largest population.

The future of Korea depends on its ability to find how to handle the Chinese challenge. It is going to be difficult, but there are hopeful signs, too: Chinese political elite may be remarkably realist, even Machiavellian, in their outlook but also rational and averse to adventurism. This gives Korea some hope that compromises with China will be possible. Without such compromises no unification of Korea will be possible in a new world where China is bound to be a major player.

UPDATE 7 (2011-5-30): According to the Choson Ilbo, the Hwanggumpyong Island groundbreaking ceremony was cancelled without any announcement.

UPDATE 6 (2011-5-27): According to the Irrawaddy, KJI’s delegation visit to Beijing overlapped with a Myanmar delegation.  Maybe the two met?

UPDATE 5 (2011-5-25): According the Choson Ilbo, Kim Jong-il’s security in China is facing an all new challenge: Yoku!

UPDATE 4 (2011-5-25): According to Yonhap and the Choson Ilbo, Kim Jong-il’s consort, Kim Ok, is traveling with him.

UPDATE 3 (2011-5-25): KJI is now in Beijing for talks with PRC President Hu Jintao (Yonhap).  According to a colleague, Xinhua claims KJI also met with Singapore’s Lee Kuan Yew in Beijing.

UPDATE 2 (2011-5-24): China confirms that Kim Jong-il is in the PRC (Nanjing on Tuesday).  China usually waits until KJI has returned to the DPRK before announcing his visits.  See the Wall Street Journal: China Real Time, Yonhap, AFP.

UPDATE 1 (2011-5-23): More coverage is coming out on KJI’s trip to the PRC:

1. Aidan Foster-Carter writes about Kim Jong-il’s previous trips to China in 38 North.

2. China claims Kim’s trip is focused on economic issues (WSJ):  “China invited North Korean dictator Kim Jong Il, who began his seventh trip there on Friday, to learn more about its economic development, Chinese Premier Wen Jiabao told South Korean President Lee Myung-bak Sunday.”

3. PRC-DPRK trade up significantly in the last year (Bloomberg): “North Korea’s trade with China jumped 30 percent last year even after the United Nations stepped up sanctions following its second nuclear test in May 2009, according to China’s commerce ministry.”

4. Yonhap reports that Kim Jong-il will possibly attend a groundbreaking ceremony for development of the Hwanggumpyong Island (see more here) .  This ceremony is supposedly scheduled for May 28th.

5. The Hankyoreh has an update of KJI’s travel itinerary as of today.

ORIGINAL POST (2011-5-20): This morning there were dozens of conflicting stories about whether Kim Jong-il and/or Kim jong-un had traveled to China.  Right now, the emerging view seems to be that Kim Jong-il is definitely in China and Kim Jong-un is possibly (probably not) in China.

So let’s back up a couple of days.  Kim Jong-il was just reported to have given on the spot guidance visits to the Ryongjon (룡전과수농장) and Toksong  (덕성과수농장) Fruit Farms on May 18th.  The Ryongjon Fruit Farm is located in Pukchon County (북청군, 40.172649°, 128.338476°) and the Toksong Fruit Farm is located in neighboring Toksong County (덕성군, 40.325806°, 128.262423°).  Those are the coordinates of the farms themselves if you want to check them out on Google Earth.

These farms lie on railway lines that indicate KJI was traveling north to cross into China at either Manpho (만포시) or Namyang, Onsong County (남양로동지구, 온성군).

So was Kim Jong-un traveling with Kim Jong-il?  Maybe, but I don’t think so…

KCNA reports from Kim’s guidance tours:

[Kim Jong-il] was accompanied by Kim Ki Nam and Choe Thae Bok, members of the Political Bureau and secretaries of the C.C., WPK, Thae Jong Su, alternate member of the Political Bureau and secretary of the C.C., WPK, and Kwak Pom Gi, chief secretary of the South Hamgyong Provincial Committee of the WPK.

Now I know that Kim Jong-un has reportedly accompanied his father on guidance trips without being listed as part of the official entourage and that he could have been omitted from official coverage precisely to hide his presence on the train to China.  In these situations I generally look to occam’s razor for the answer, and the razor says “no”.  Now I will just wait to be proven wrong.

The Wall Street Journal has more.

Here is coverage of the trip in the Washington Post.

Here is a headline (but no story) from Yonhap.