North Korean Economy Watch

UPDATE 3:  Executive Order: Continuing Certain Restrictions with Respect to North Korea and North Korean Nationals

By the authority vested in me as President by the Constitution and the laws of the United States of America, including the International Emergency Economic Powers Act (50 U.S.C. 1701 et seq.) (IEEPA), the National Emergencies Act (50 U.S.C. 1601 et seq.) (NEA), and section 301 of title 3, United States Code,

I, GEORGE W. BUSH, President of the United States of America, find that the current existence and risk of the proliferation of weapons-usable fissile material on the Korean Peninsula constitute an unusual and extraordinary threat to the national security and foreign policy of the United States, and I hereby declare a national emergency to deal with that threat. I further find that, as we deal with that threat through multilateral diplomacy, it is necessary to continue certain restrictions with respect to North Korea that would otherwise be lifted pursuant to a forthcoming proclamation that will terminate the exercise of authorities under the Trading With the Enemy Act (50 U.S.C. App. 1 et seq.) (TWEA) with respect to North Korea.

Accordingly, I hereby order:

Section 1. Except to the extent provided in statutes or in regulations, orders, directives, or licenses that may be issued pursuant to this order, and notwithstanding any contract entered into or any license or permit granted prior to the date of this order, the following are blocked and may not be transferred, paid, exported, withdrawn, or otherwise dealt in:

all property and interests in property of North Korea or a North Korean national that, pursuant to the President’s authorities under the TWEA, the exercise of which has been continued in accordance with section 101(b) of Public Law 95-223 (91 Stat. 1625; 50 U.S.C. App. 5(b) note), were blocked as of June 16, 2000, and remained blocked immediately prior to the date of this order.

Sec. 2. Except to the extent provided in statutes or in regulations, orders, directives, or licenses that may be issued pursuant to this order, and notwithstanding any contract entered into or any license or permit granted prior to the date of this order, United States persons may not register a vessel in North Korea, obtain authorization for a vessel to fly the North Korean flag, or own, lease, operate, or insure any vessel flagged by North Korea.

Sec. 3. (a) Any transaction by a United States person or within the United States that evades or avoids, has the purpose of evading or avoiding, or attempts to violate any of the prohibitions set forth in this order is prohibited.

(b) Any conspiracy formed to violate any of the prohibitions set forth in this order is prohibited.

Sec. 4. For the purposes of this order:

(a) the term “person” means an individual or entity;

(b) the term “entity” means a partnership, association, trust, joint venture, corporation, group, subgroup, or other organization; and

(c) the term “United States person” means any United States citizen, permanent resident alien, entity organized under the laws of the United States or any jurisdiction within the United States (including foreign branches), or any person in the United States.

Sec. 5. The Secretary of the Treasury, after consultation with the Secretary of State, is hereby authorized to take such actions, including the promulgation of rules and regulations, and to employ all powers granted to the President by IEEPA as may be necessary to carry out the purposes of this order. The Secretary of the Treasury may redelegate any of these functions to other officers and agencies of the United States Government consistent with applicable law. All agencies of the United States Government are hereby directed to take all appropriate measures within their authority to carry out the provisions of this order.

Sec. 6. The Secretary of the Treasury, after consultation with the Secretary of State, is hereby authorized to submit the recurring and final reports to the Congress on the national emergency declared in this order, consistent with section 401(c) of the NEA (50 U.S.C. 1641(c)) and section 204(c) of IEEPA (50 U.S.C. 1703(c)).

Sec. 7. This order is not intended to, and does not, create any right or benefit, substantive or procedural, enforceable at law or in equity by any party against the United States, its departments, agencies, instrumentalities, or entities, its officers or employees, or any other person.

GEORGE W. BUSH

THE WHITE HOUSE,

June 26, 2008.

UPDATE 2: How much plutonium does the DPRK have?

From the Daily Times (Pakistan):

But there may be problems ahead with the declaration. Japan’s Asahi Shimbun newspaper reported an informed source as saying the North declared it produced around 30 kg (66 lbs) of plutonium, while US officials have said they think it is closer to 50 kg. Sung Kim, a State Department envoy who witnessed the cooling tower blast, told reporters in Seoul on Saturday that there might not be enough time to complete the North’s denuclearisation before President George W Bush leaves office in January 2009.

‘Emotionally attached’: Kim said North Koreans engineers appeared to have formed an “emotional attachment” to their atomic programme that has become apparent during international efforts to dismantle it. Kim told reporters that he saw emotion in Ri Yong-ho, head of the Yongbyon nuclear reactor, and his colleagues when they all witnessed Friday’s demolition of the plant’s cooling tower. “I think I detected a sense of sadness when the tower came down but I thought he put it well when he was asked what this all meant for him and he said that he just hoped this would contribute to peace and stability,” said Ri.  

UPDATE 1:
“US Treasury says N.Korea sanctions remain in place”
Reuters via Guardian
David Lawder
6/26/2008

U.S. Treasury financial sanctions aimed at ending North Korean money laundering, illicit financing activities and weapons proliferation remain in effect despite the easing of other sanctions against Pyongyang, a Treasury spokesman said on Thursday.

The move by the Bush administration to lift some sanctions after North Korea delivered a long-delayed account of its nuclear activities will not restore the country’s access to the international banking system, Treasury spokesman John Rankin said.

North Korea was largely cut off from the international banking system in 2005 when the Treasury named Banco Delta Asia, a small bank in the Chinese gambling enclave of Macau, as a primary money laundering concern.

The Treasury accused the bank of circulating counterfeit U.S. currency produced by North Korea, and of knowingly handling transactions by North Korean entities involved in illicit activities, including the narcotics trade and sales of counterfeit cigarettes and other goods.

Both North Korea and Banco Delta Asia have denied the Treasury’s allegations.

Although about $25 million in frozen North Korean funds in Banco Delta Asia was released last year, the sanctions against the bank, which prohibit transactions with U.S. banks, remain in effect, Rankin said. International banks have largely shunned Banco Delta Asia as well.

As recently as April, Treasury officials said so called “supernotes” — high quality counterfeit $100 bills produced by North Korea, were still surfacing.

“The lifting of sanctions associated with the Trading with the Enemy Act, and removing North Korea from the list of state sponsors of terrorism does not represent North Korea’s re-integration into the international financial system,” he said.

Sanctions that prohibit U.S. companies from owning, leasing, operating, insuring North Korean-flagged shipping vessels, as well as registering vessels in North Korea, remain in place. 

ORIGINAL POST: Today North Korean made the nuclear declaration required by the February 2007 six-party agreement.  This web site does not focus on the nuclear issue, but this turn of events represents a significant US policy shift with economic implications for the DPRK.  The coverage has been overwhelming, so below are media excerpts that cover most of the angles:

“Pyongyang Submits Nuclear Declaration”
Wall Street Journal
Evan Ramstad
6/26/2008

After keeping the U.S. and other countries waiting for 15 months, North Korea delivered a description of its efforts to develop nuclear weapons, setting up the next – and more difficult – stage in an international effort to disarm and reshape the isolated, authoritarian country.

North Korean diplomats gave a declaration of its nuclear-weapons program to Chinese counterparts in Beijing who have been coordinating the six-nation talks. In return, U.S. President George W. Bush announced the lifting of some trade sanctions and beginning of the process of removing North Korea from its list of state sponsors of terror. (Read the text of the White House statement here).

Under the February 2007 deal, North Korea also agreed to disable a nuclear plant that provided fuel for its nuclear weapons, a step that’s also nearly complete. On Friday, it plans to blow up the cooling tower at the nuclear plant and invited TV crews from several countries, including the U.S. and South Korea, to record the event.

The contents of North Korea’s declaration weren’t immediately disclosed. In recent weeks, U.S. diplomats have said they didn’t expect it to include a key piece of data – how many nuclear weapons the country has built. The document also is believed to be limited to North Korea’s efforts to develop plutonium as a nuclear fuel, but doesn’t mention suspected research into highly-enriched uranium as a fuel nor its suspected proliferation efforts to Syria.

“North Korea removed from US ‘axis of evil'”
London Times
Jeremy Page and Richard Lloyd Parry
6/26/008

The US move, which will also see a lifting of long-running sanctions, would mark the most significant thaw in relations between Washington and Pyongyang since the 1950-53 Korean War. Mr Bush said that it was intended to reward and encourage North Korean co-operation and accelerate the tangled negotiations on the country’s nuclear disarmament.

In the first instance, America will exempt North Korea from sanctions under the Trading with the Enemy Act, a piece of First World War legislation that was employed during the Korean War, and which restricts trade with Pyongyang by US companies and citizens. The only other country subject to its provisions is Cuba.

It also gave notice that it would start the 45-day process of removing North Korea from its list of state sponsors of terrorism, where it stands alongside Cuba, Iran, Sudan and Syria. Sanctions against them include a ban on arms sales, economic assistance, and an obligation on the US Government to oppose loans to listed countries by such international institutions as the World Bank.

“Diplomacy Is Working on North Korea”
Wall Street Journal
Condoleeza Rice
6/26/2008; Page A15

In its declaration, North Korea will state how much plutonium it possesses. We will not accept that statement on faith. We will insist on verification. North Korea has already turned over nearly 19,000 pages of production records from its Yongbyon reactor and associated facilities. With additional information we expect to receive – access to other documents, relevant sites, key personnel and the reactor itself – these records will help to verify the accuracy and completeness of Pyongyang’s declaration. North Korea’s plutonium program has been by far its largest nuclear effort over many decades, and we believe our policy could verifiably get the regime out of the plutonium-making business.

Getting a handle on North Korea’s uranium-enrichment program is harder, because we simply do not know its full scale or what it yielded. And yet, because of our current policy, we now know more about North Korea’s uranium-enrichment efforts than before, and we are learning more still – much of it troubling. North Korea acknowledges our concerns about its uranium-enrichment program, and we will insist on getting to the bottom of this issue.

Similarly, we know that North Korea proliferated nuclear technology to Syria, but we do not know whether that is the end of the story. Rather than just trying to address this threat unilaterally, we will be more effective in learning about North Korean proliferation and preventing its continuation through a cooperative effort with Japan, South Korea, China and Russia.

And in return for these steps, what have we given thus far? No significant economic assistance. No trade or investment cooperation. No security guarantees or normalized relations. And our many sanctions on North Korea, both bilateral and multilateral, remain in place.

“‘Good start’ to UN’s Syria probe”
BBC
6/25/2008

The head of a UN team investigating allegations that Syria has been working on a secret nuclear weapons programme says their work is off to a good start.

The IAEA official, Olli Heinonen, said inspectors had taken samples at the al-Kibar site in the Syrian desert.

“It was a good start, but there’s still work that remains to be done,” he said.

“For this trip we did what we agreed to. We achieved what we wanted on this first trip. We took samples which we wanted to take. Now it’s time to analyse them.”

Mr Heinonen also said he was generally satisfied with the level of co-operation by Syria.

Additional information: 

To read a hawk perspective, see Josh’s post at One Free Korea.  Also, the Telegraph (UK) reports that Vice President Cheney tried to block the deal.

David Kang spoke to NPR’s Market Place.

US move reduces Japan’s negotiation leverage over DPRK.

Although political tensions have risen between North and South Korea (list here), Yonhap reports trade between the two countries has increased this year!

According to Yonhap:

South Korea’s trade with North Korea in the first five months of this year surged 30 percent on-year thanks to brisk industrial exchanges that offset a sharp drop in humanitarian aid, the Unification Ministry said Tuesday.

Inter-Korean trade volume increased to US$734.25 million in the January-May period, up from US$562.92 million during the same period last year, according to ministry data. The increase was notable in the commercial sector, which posted US$685 million worth of trade over the months, up 52 percent year-on-year.

However, exchanges in non-commercial areas significantly contracted due to strained inter-Korean political ties. Non-commercial trade dropped by 56 percent to US$49.2 million.

I have been unable to locate this information on the MoU website.  Perhaps it is not listed in English.  If you find it, please send me the link. 

Read the Yonhap article, see below:
Inter-Korean trade rises despite political chills
Yonhap
6/25/2008

Foreign Policy has published the 2008 Failed State Index.  North Korea comes in 15th place.  Ahead of it:

1. Somalia
2. Sudan
3. Zimbabwe
4. Chad
5. Iraq
6. Congo
7. Afghanistan
8. Cote d’Ivoire
9. Pakistan
10. Central African Republic
11. Guinea
12. Bangladesh 
12. Burma
14. Haiti

North Korea’s score was based on the following rankings (out of 10):

Domestic Pressures 8.2
Refugees and displaced persons 6.0
Group Grievance 7.2
Human Flight 5.0
Uneven Development 8.8
Economy 9.6
Deligitimization of state 9.8
Public services 9.6
Human rights 9.7
Security apparatus 8.3
Factionalized elites 7.6
External intervention 7.9

Acording to the Korea Times, China invited Kim Jong il to attend the opening ceremony of the 2008 Olympics.  President Bush and Japan’s Prime Minister, Yasuo Fukuda, are still mulling their invitations.

Read the full article here:
‘North Korean Leader Invited to Beijing Olympics’
Korea Times
Kim Sue-young
6/22/2008

After China and the USA made high-profile food donations to North Korea, the Russians finally joined the game.  Russia’s Foreign Minister claims that by the end of June his country will have sent 3,000 tons of flour to UN World Food Program distributors in North Korea. The first aid deliveries arrived in North Korea by train on June 11.

I am surprised Russia waited so long to get into the game.  Russia has been prodding North Korea to link its Trans-Siberian rail traffic to South Korea, and they want to make sure the Chinese don’t squeeze them out of North Korea’s Raijin Port (which does not freeze in the winter).  Food aid might not have helped these processes along, but waiting so long to jump on the bandwagon can’t have helped. 

In March of this year, the Russians inked a deal to renovate the railway lines between their border and Raijin (the tracks are different gagues).

Read about the aid here: 
Russia to deliver 3,000 tons of flour to North Korea
Novosti
6/9/2008

Russia sends food aid to North Korea
Associated Press
6/19/2008

Daily NK
Moon Sung Hwee
6/17/2008

The Central Committee of the Chosun (North Korea) Workers’ Party recently commanded the People’s Safety Agency (PSA) to increase its authority.

A source from North Korea reported in a telephone interview with Daily NK on the 11th that “According to a document from the Central Committee of the Party, the legal authority of agents of the PSA is being strengthened.”

The source explained that “From now on, agents of the PSA can investigate every criminal offense committed by the military, the National Security Agency, the public prosecutors and cadres of courts. This command from the Party was delivered to the cadres’ lectures over the country on May 10.

The most remarkable part is that in every field except anti-nation or anti-regime crimes the PSA can inspect and search the houses of suspects from the military, the Party, the NSA and the public prosecutor’s office.

Through this, control over the military, which abused its power and was acknowledged as a public enemy by average residents for a decade under the military-first policy, is being systematized.

The document stated clearly that the PSA has the right to detain anyone who disobeys the agents’ onsite inspections in their homes and even to arrest them, according to the source.

One proviso only was added that when the agents undertake a house search of the cadres of the Party, they have to receive prior approval from upper levels within the PSA and they do not have the authority to arrest cadres of the Party on the spot as a suspect.

The source explained that up to this point general crimes committed by soldiers were just dealt with by the military police or the Defense Security Command of the People’s Army. Since the Shimhwajo Case in 1998, the PSA has not examined the cadres of the NSA or prosecutors.

The source relayed that regulations regarding punishment towards agents who intentionally overlook an inspection or who leak information on an inspection are specified in the document.

Since Jang Sung Taek, a brother-in-law of Kim Jong Il, led the Ministry of Administration of the Chosun (North Korea) Workers’ Party, the political authority of the PSA accordingly started being strengthened. The source explained that “In the past, the PSA was not able to intervene in any case without the permission of the prosecutors, but since October 2007 the agents of the PSA were granted the authority to deal with the arrest of criminals and with sending them to court themselves.

The position that Jang Sung Taek took in October 2007 was that the Director of the Ministry of Administration of the Chosun (North Korea) Workers’ Party is responsible for general public security organizations such as the National Security Agency, the People’s Safety Agency, the Central Prosecutor Office and the Special Court.

The source analyzed that “The Party did not push legislation on the expansion of the authority of the PSA, because political conflicts with other governmental organizations would be brought out.”

Some say that the background to the promotion of the PSA stems from Kim Jong Il’s fear that the authority of the NSA and of the military were too big while the Party’s power was extraordinarily weakened.

One other source said that “Although the military or information organizations have attempted many coups in human history, the police force has always sided with the government. Therefore, Kim Jong Il drastically strengthened the authority of the PSA.”

The source added that “Regarding the promotion of the PSA, the cadres of the Party took concrete examples of assassinations such as Nicolae Ceauşescu of Romania and Park Chung Hee of South Korea, emphasizing the Romanian police’s fight against the military in order to protest Ceauşescu.”

“The People’s Safety Agents,” which is a newspaper circulated just in the PSA, and lecture materials for the PSA lately describe the PSA as the “escort warrior for the General” or “the second Escort Bureau,” the source explained, regarding the change of the PSA’s state.

Today, the Daily NK publishes a review of Peacemaker: South-North Relations and the North Korean Nuclear Issue over the past 20 years,  by Lim Dong Won, “evangelist of the Sunshine Policy” and former director of South Korea’s National Intelligence Service.

The book (not available in English) publicizes dialogues between Kim Jong Il and the author when he visited Pyongyang for the first Inter-Korea Summit in 2000 and as a South Korean delegate in 2002.  

Actually, the Daily NK’s article is not so much a review of the book as it is a series of interesting excerpts:

[Kim Jong il speaking] Joint Security Areais a good movie. I showed it to the generals of the military and cadres of the Party.’ All of sudden, [KJI] asked [the] general of the People’s Army Lee Myung Su and secretary Kim Yong Soon how many series of a South Korean historical drama, “Petticoat Government” they had watched. [KJI] said that ‘South Korea produces historical dramas well. I’ve instructed the Director of the Propaganda Department of the Party to learn the South Korean way of making historical dramas.’

Lim Dong Won also revealed that at the Inter-Korea Summit in 2000, Kim Jong Il agreed with Kim Dae Jung’s comment, “Even after the unification, the U.S. military presence in South Korea will be needed.” The former president Kim asked him “Why are you insisting through your media on the withdrawal of the U.S. military from the South?” and Kim Jong Il replied to him that he wanted President Kim to understand it was just to soothe the peoples’ feeling.

When Lim asked Kim Jong Il to visit Seoul in April of 2002, Kim Jong Il said that “In fact, I tried to visit Seoul in the spring of 2001, but the situation was changed due to George Bush, who looked on us as an enemy, being elected President of the U.S. Furthermore, the situation of the South was such that the leftists demanded that the North apologize to them for the Korean War and the explosion of KAL, and my visiting Seoul would have deteriorated the relations between the North and the South. Therefore, my close associates held me back from going to the South.”

According to his book, Lim revealed that a hot line has been set up since the first Inter-Korea Summit in 2000 and has been used when crises happened between the South and the North. In June, 2002, when a battle occurred in the West Sea, the North sent an urgent telephone-notice, saying “I heard with regret that it happened accidently.”

Read the full story here:
Veiled Dialogues with Kim Jong Il Revealed
Daily NK
6/12/2008

North Korea’s anti-corruption campaigns have been thoroughly covered by North Korean Economy Watch (see here).  It is possible that these campaigns are simply efforts to stem financial leakages within the complex North Korean bureaucracy–making sure money continues to roll up hill.  It is more likely, however, that there is a political motivation behind them. 

In the past, we have speculated that these anti-corruption campaigns could be setting the stage for a purge, which is necessary before any serious policy change can occur within North Korea’s socialist system.  We have also speculated that these campaigns are related to the succession issue (who will take over after Kim Jong il).  Kim Jong il’s family members are disproportionately represented in party and government organizations, not the military.  After years of songun politics, in which the military was in ascention, it is now time to reign in their business operations and bring them under the scrutiny/control of the party and government (Kim’s family). 

Three weeks ago, we learned that Jang Song Taek (Kim Jong il’s brother-in-law) was running the campaign from Sinuiju.  Today, the Daily NK reports that Kim Jong il’s son, Kim Jong Chol (the Eric Clapton fan), has been running a parallel campaign in North Hamgyong Province.  Jang and Kim III have been mentioned as possible successors to Kim Jong il, and the fact that both of them are competing so directly leads the Daily NK to speculate that Kim Jong il is watching to see who is more adept at these tasks.

According to the Daily NK, Kim’s son is not doing well.  His anti-corruption campaign merely stoked local resentment, so he and his team were pulled before anybody knew Kim III was in charge.  Jang’s efforts in Sinuiju, however, seem to have been greeted with admiration.  If this is the case, things are looking up for Jang at the moment.

Details and the full story can be found here:
Kim Jong Cheol Left off the Inspection Due to Absence of Leadership
Daily NK
Moon Sung Hwee
6/9/2008

UPDATE: 
The Daily NK brings us up-to-date on the DPRK’s  anti-corruption drive.  The Daily NK analysis, however, gives the impression that Kim Jong Il is clamping down on the military, which again raises speculation that this policy is driven by concerns greater than financial leakage:

A source from Shinuiju reported in a telephone interview with Daily NK on May 14th that, “Director Jang Sung Taek has been staying at the Yalu River Hotel in Shinuiju since March, and has been directing inspections at Shinuiju Customs covering imports and exports made by rail, foreign currency-making activity organizations, and trade companies belonging to the army.”

“This inspection is decidedly different in scale and scope from previous inspections which are usually carried out every spring at Shinuiju Customs and various trading companies. The inspection usually targets simple private corruption as well as all fields related to business with China,” said the source.

The inspection group reportedly consists of some 100 agents dispatched from the Ministry of Administration, the Central Prosecutor’s Office, the National Security Agency, the People’s Safety Agency, and the Imports & Exports Guidance Bureau of the State External Economic Affairs Commission. Some 50 other agents were sent as reinforcements in late April.

…

The inspection group withdrew all trade certificates with exception of those certificates belonging to the families of anti-Japanese guerilla fighters, and those certificates issued by the Ministry of Finance or the Shinuiju Municipal Administrative Committee.  Therefore, presently at Shinuiju Customs, all import items without trade certificates issued by the above mentioned three groups have to be sent back to China.

The whole article is worth reading here.  If any readers have a thoughtful take on these events, please share them.

ORIGINAL POST:
North Korean Economy Watch has thoroughly covered news of the DPRK’s anti-corruption drive (here, here, here, here, and here).  We have speculated as to whether this campaign is motivated by primarily fiscal concerns or whether it is a broader realignment of state, party, and military portfolios necessary for a policy/personnel change within North Korea’s socialist system.

Hideko Takayama at Bloomberg highlights the fiscal aspect of the anti-corruption campaign and is the first to announce the Kim Jong Il’s brother-in-law is leading it:

Jang, 62, was sent to Beijing and the Chinese city of Dandong near the border with North Korea in February to root out corruption at North Korean corporations operating in China, the businessmen and officials said.

Jang, who was dismissed from Kim Jong Il’s power circle in 2004, was rehabilitated in December 2005 and appointed to be Director of Administration of the Workers’ party last October, an official at Chosensoren, a North Korean organization in Japan which acts as a de facto embassy, said, requesting anonymity.

The leader’s brother-in-law is also responsible for the State Security Department, the People’s Security Ministry and the Central Prosecutor’s Office, according to the Chosensoren official. In addition, Jang runs a campaign against what the government calls anti-socialist activities.

Jang’s mission was to find and punish people who were diverting profits that were supposed to be repatriated to the North Korean capital, Pyongyang.

“Jang is familiar with how the business is done outside the country and knows all about money and corrupt ways of making money,” Lee Young Hwa, professor of developing economies at Osaka’s Kansai University, said. “His assignment is like sending a thief to catch a thief.”

Read the full stories here:
Kim’s Brother-in-Law Heads North Korea Anti-Corruption Campaign
Bloomberg
Hideko Takayama
5/2/2008

Shinuiju Inspectors Investigate Corruption
Daily NK
Jung Kwon Ho, Park In Ho
5/16/2008

UPDATE: Although the Daily NK originally reported stellar growth rates in 2008 for Hyundai’s North Korea projects, today the Choson Ilbo highlights that profits are still elusive:

According to the Financial Supervisory Service on Sunday, Hyundai Asan suffered a net loss of W9.64 billion (US$1=W1,041) in the first quarter this year, three times greater than the W3.34 billion in the corresponding quarter last year.

Despite the large number of tourists, which, at 125,000 as of mid May this year, nearly doubled since last year, it is the largest loss reported since the tours to Mt. Kumgang began in 2004. Over 45,000 people have traveled to the North Korean city of Kaesong since the tour program began in December 2007, and it is almost certain that the company would reach its goal of 100,000 tourists for this year.

So what is the explanation given for this?

The reason for such struggle is the weakness of the won against the U.S. dollar, since North Korea charges admission fees to Kaesong and Mt. Kumgang in dollars — US$ 100 for one and $80 for the other per person for three days and two nights. As the dollar has risen more than 10 percent since the beginning of the year, from W940 to W 1,040, so has the initial cost. The tour program to Kaesong has reportedly gone into the red already. Moreover, Asan has to pay off $200 million of North Korean foreign debt in return for the license to develop Mt. Kumgang granted in 1999.   

ORIGINAL POST
From the Daily NK:

According to the Ministry of Unification, despite the stalemate between North and South Korea, cooperation and exchange at the civilian level have increased rapidly in the months of January to April compared to the previous year.

Compared to the same period last year, North-South trade increased by 37% (corresponding to USD 410.099 million the same period last year) and the coming and going of people and the tour of Geumgang Mountain increased by 144% and 76% respectively, contributing to a significant rise in civilian cooperation and exchange.

Related to the North-South trade, following the expansion in economic cooperation, commercial transactions (regular trade + processing of brought-in materials + economic cooperation) increased by 53.3% (to USD 531,960,000) compared to the same period last year (USD 346,990,900). Only, uncommercial trade decreased by 53.8%, recorded at USD 29,570,000 according to the reduction in aid to North Korea.

69 enterprises are operating in the Kaesong Industrial Complex as of April 2008 and 44 of them seem to be constructing factories. It is anticipated that 100-some enterprises will be operating by the end of the year.

The first quarter production volume increased 71% or by USD 6,770,000 compared to the same period last year. The export amount declined 58% to USD 13,280,000. The total number of North Korean workers is 26,885 and South Korean sojourners 1,018, the latter rising by 52.6% from the previous year, despite the evacuation of South Korean personnel.

The Mount Geumgang and Kaesong tours, compared to last year, are maintaining a huge growth rate. The number of Mt. Geumgang tourists have increased 76% to 100,510 and the Kaesong tour, which began in December of last year, logged 40,525 visitors thus far.

The number of coming and going of people, excluding the Mt. Geumgang and Kaesong Complex tourists, increased by 144% within the year to 93,019 and such a growth rate seems to have originated from the hike in visitors related to economic cooperation and North-South trade as well as the Complex itself. Only, the number of visitors related to aid to North Korea was reduced from 2,935 to 1,129.

Although the increase in tourism numbers was expected, the positive spin put on the Kaesong Zone contradicts earlier reports.  

Read the full stories here:
North and South, Politics at a Stalemate, Economic Cooperation Is Bright
Daily NK
5/14/2008
Jeong Jae Sung

Hyundai Asan Losses From N.Korea Tours Mounting
Choson Ilbo
5/19/2008