North Korean Economy Watch

Asia Times
Ting-I Tsai
12/5/2007

The likelihood that North Korea’s nuclear disarmament will be completed just a year after Pyongyang announced that it had tested a nuclear bomb has been widely welcomed around the world, with the exception, perhaps, of China.

There are increasing concerns among Chinese academics that Pyongyang’s actions are hurting Chinese interests. Last October’s nuclear test not only unmasked the contradictions of a relationship frequently described as being “as close as lips and teeth”. It may have led to a further downturn in bilateral ties.

As the host nation of the Six Party Talks and once North Korea’s closest ally, China has reacted to the prospects for disarmament in a decidedly cool manner, with its North Korea experts debating how Pyongyang will harm China’s interests.

“There is no doubt that Pyongyang will create conflicts between China and the United States once it improves its relationship with Washington,” said Zhang Liangui, professor of international strategic research at the Central Party School in Beijing. He predicted that it was only a matter of time before Pyongyang took revenge on Beijing for China’s vote to impose sanctions on North Korea at the United Nations last October.

Zhang Yushan, researcher at the Jilin Academy of Social Sciences, however, doubts that North Korea could develop a close relationship with the US in the upcoming months.

After a year of dialog, North Korea agreed in October to shut its main nuclear reactor and provide detailed descriptions of all its nuclear programs by the end of the year. Furthermore, it has pledged not to transfer nuclear materials, technology or knowledge to other countries. Pyongyang fulfilled one of those promises in July by shutting down the reactor in Yongbyon. It has yet to make any substantial moves toward providing a description of its nuclear programs.

Chinese academics who question whether North Korea’s pledges to completely abandon its nuclear program are sincere also worry about Washington’s lack of determination to shape a nuclear-free Korean Peninsula after having received Pyongyang’s assurance that it would not transfer nuclear materials, technology or knowledge to other countries.

“China has always seen North Korea’s nuclear weapon issue as the Americans’ problem and has never adopted any strategic plan for itself in the Six Party Talks, which have led to where we are now,” said Jin Linbo, a research professor at the Beijing-based China Institute of International Studies. Jin argued that Beijing might have gained nothing but a security threat from its neighbor by hosting the talks.

What has particularly frustrated Beijing has been North Korea’s selfish neglect of China’s interests. The Central Party School’s Zhang noted that the latest developments have led some Chinese academics who originally had sympathies for North Korea to change their attitudes.

“Some of them have started to argue that North Korea is outrageous,” Zhang said.

Scoot Snyder, senior associate at the Washington based Asia Foundation, noted that North Korea’s traditional strategy is to play larger parties against each other; having found their country over-reliant on China for critical inputs, North Korean leaders would certainly like to stimulate a competition between China and the United States and South Korea to see who can most effectively win influence in Pyongyang. He pointed out in particular that DPRK negotiator Kim Kye-gwan’s public criticism of the United States for relying too much on China to carry out its Korea policy, US negotiator Christopher Hill’s sudden visit to Pyongyang without passing through Beijing, and the “three- or four-party” phrase in the inter-Korean summit declaration had all caused speculation and concern in Beijing.

In a study titled, “How North Korea threatens China’s interests“, conducted by Gregory Moore, assistant professor of political science at the St. Petersburg, Florida-based Eckerd College, the start of the decline in PRC–DPRK amity coincided quite closely with the rise of Kim Jong-Il in the late 1980s and the early 1990s. It was sealed with the passing of Kim Il-Sung in 1994, and contact between Beijing and Pyongyang broke down almost completely between 1994 and 1999.

Kim Jung-il, Moore suggested in his study, revealed his willingness to affront China in 1990-91 by conducting a dialog with China’s rival Taiwan and making a deal in which Pyongyang would have been paid to accept Taiwan’s nuclear waste. He played the same “Taipei card” again in 1996 when Beijing offered one-tenth of the grain that Pyongyang had asked for. In 1997, North Korea again opened discussions with Taiwan on direct flights between the island’s capital of Taipei and Pyongyang after another quarrel with China. At the time, Chinese agricultural experts publicly encouraged Pyongyang to adopt Chinese-style reforms, which led Pyongyang to call Deng Xiaoping a traitor to socialism. That jibe prompted Beijing to mull cutting off food aid to North Korea.

Other factors have also caused the relationship to sour. North Korea’s admission to US diplomat James Kelly in October 2002 that it was indeed pursuing a uranium enrichment program, its plan to establish the free trade zone and gambling city of Sinuiju, its counterfeiting of US$100 bills and Chinese currency, and China’s cutting off of an oil pipeline and deploying troops to the border in 2003 have all caused friction. In addition, rumors have surfaced that Pyongyang’s Chinese-built Taen Friendship Glass Factory resulted from Kim Jung-il’s flirtation with the “Taipei card”.

According to a Pyongyang-based foreign diplomat, bilateral relations “are mainly close in commercial and economic matters, especially with neighboring Liaoning province” in China. Bilateral trade in the first three quarters of 2007 reached US$1.44 billion, representing 16.6 growth year-on-year. The Chinese are reportedly operating three major coal mining sites in North Korea, although related government agencies in Pyongyang have denied this.

It remains to be seen how Pyongyang will handle its relationship with China. But both governments have made efforts to demonstrate their friendship.

On November 26, Liu Xiaoming, China’s ambassador to the DPRK, delivered a speech to students at Kim Il-sung University in Pyongyang, sharing the success of the Chinese Communist Party’s 17th congress, the significant accomplishments of its 29-year-long period of liberalization and reform, and China’s appreciation of its historical friendship with North Korea. The speech, which the embassy described as “a new page in the bilateral friendship”, came shortly after the visit of Liu Yunshan, member of the Secretariat of the Communist Party of China’s Central Committee and head of the Publicity Department of the CPC Central Committee, to Pyongyang on October 29. In July, Chinese Minister of Foreign Affairs Yang Jiechi made North Korea the first nation he visited after taking office.

In return, Pyongyang authorities issued a series of stamps featuring the 2008 Beijing Olympics in mid-November, and Kim Jung-il paid a visit to China’s embassy on the occasion of the Chinese lantern-festival holiday Yuan Xiao Jie.

In the eyes of South Korea, which has aggressively sought to improve its ties with the North, ties between China and North Korea remain unquestionably close.

Haksoon Paik, senior fellow at the Seoul-based Sejong Institute, argued that the US-PRC relationship is the key factor shaping East Asian international politics, and North Korea has simply “tried to just find some breathing space in between”.

Having dealt with North Koreans for more than a half-century, Chinese academics are now preparing for North Korea’s eventual tilt away from Beijing because of the landscape change in East Asian politics.

“For the upcoming decade, the relationships among the six-party-talk members will put the US, Japan and North Korea on one side, and China, South Korea and Russia on the other,” predicted a Chinese expert on North Korea, who spoke under the condition of anonymity.

Yonhap
12/2/2007

The two Koreas have agreed on the daily schedule for a cross-border freight train that will resume service later this month for the first time in over 50 years, the South Korean Unification Ministry said on Sunday.

The prime ministers of South and North Korea met in Seoul last month and agreed to restart the railway service, which will traverse the heavily armed border, on Dec. 11. The train will run between the South’s Munsan station and the North’s Bongdong station as a follow-up to the October summit between their leaders in Pyongyang.

The ministry said a freight train will depart from Munsan at 9:00 a.m. each weekday and reach the North Korean border station of Panmun before returning to the South at 2:00 p.m.

The train, which will not operate during weekends, will extend its route to Bongdong once the construction of a cargo-handling facility there is completed, the ministry said. The Bongdong station serves as a gateway to an inter-Korean industrial park in Kaesong.

The soon-to-be-resumed service is expected to facilitate transportation of raw materials and manufactured goods between South Korea and the North’s Kaesong park, the ministry said.

The 19.8-km route between the two Koreas was severed in the midst of the 1950-53 Korean War and has since remained closed.

Korea Times
Lee Hyo-sik
11/29/2007

The government has decided to finance training programs next year to educate North Korean officials and scholars about the free market economy as part of efforts to smoothly implement planned cross-border business projects.

According to the Ministry of Finance and Economy Thursday, the government has set aside 300 million won ($322,000) in next year’s budget to financially support education programs through which North Korean officials can learn about market economy principles and the financial market system.

The ministry is considering organizing a series of workshops for North Koreans to study how former communist countries, including China and Vietnam, opened their doors and successfully transformed into market economies.

It is also planning to arrange study tours to Europe to offer North Koreans opportunities to learn first hand about macroeconomic policies and the government’s role in advanced economies.

“It will be the first time for the government to help North Korean officials and scholars learn about market economic management and development experiences. If it bears fruit, we plan to expand the economic education program in the future to have more North Korean participants,” a ministry official said.

The government will not be directly involved in the training, and instead it will entrust the program to a private education institution, he said, expressing hope that the training will help government officials carry out scheduled inter-Korean business projects more smoothly with their northern counterparts.

During the second inter-Korean summit early October, President Roh Moo-hyun and North Korean leader Kim Jong-il agreed on a number of cross-border development projects, including the establishment of a special peace zone in the West Sea and operation of the inter-Korean railways.

On its own, the communist state has been dispatching a large number of government officials to Germany and other European nations over the past few years on economic training programs. The government estimated the number of North Korean officials visiting advanced economies in Europe totaled 220 in 2004, compared with 237 in 2003, 227 in 2002, 186 in 2001 and 158 in 2000.

Market Economy for NK
Korea Times
11/29/007

Seoul’s Program to Help Pyongyang Learn New System

The South Korean government plans to launch an education program next year to help North Korean officials and scholars learn about the market economy. It is the first time that Seoul has organized such a program. The plan followed recent developments in improving inter-Korean relations after the second South-North summit held in Pyongyang from Oct. 2-4.

According to the Ministry of Finance and Economy, a budget of 300 million won ($320,000) has been set aside for the 2008 program, which will include cross-border information sharing workshops and education on a transition to a market economy and how to adapt to the new system. The budget is only a small sum at this initial stage. But it could increase if the program produces tangible results.

We welcome the education program as it is expected to encourage the stalwart socialist country to shake off its aversion to the market economy system. And furthermore, the program could create a favorable atmosphere for North Korean policymakers and economists to usher in reform and an open door policy. It’s time for the North to realize that inter-Korean economic cooperation packages cannot succeed if it fails to introduce economic reform.

South Korean officials are well aware that it is still difficult to change the mindset of the North Korean leadership that sticks to the old ways of socialism. Regrettably, President Roh Moo-hyun was disappointed that North Korean leader Kim Jong-il and his inner circle refused to discuss reform and openness during the summit.

However, we have to be more patient with the hard-line North Korean regime and make more effort to persuade it into acknowledging the need to join many socialist countries in their effort to move toward a market economy. During the summit, President Roh agreed to build railroads, ports and other infrastructure in the North as well as an industrial park and a peace zone for inter-Korean cooperation. These development packages require huge investments from the South.

Such big-budget projects are expected to inject fresh air into the moribund North Korean economy. But they are not enough for the North to realize its ultimate goal of economic reconstruction. In addition to massive investment, the South will have to teach North Koreans how to do business, make money and become rich.

North Korea has recently shown interest in Vietnam. In October, a Hong Kong-based weekly reported that Kim Jong-il expressed the intention of following Vietnam’s reforms and openness during a meeting with Nong Duc Manh, secretary-general of the Vietnamese Communist Party. A delegation from the North led by Prime Minister Kim Yong-il visited Hanoi to learn about the “Doi Moi” reform policy.

The Seoul government plans to select a research institute that will take charge of the education program for the North. An official said candidate institutes might include the Chinese Academy of Social Sciences in Beijing. We hope the North will learn a lesson from Chinese or Vietnamese style reform to end its isolation, bring prosperity to its people and promote peace on the Korean Peninsula.

Korea Times
Andrei Lankov
11/27/2007

The great and immortal idea of Juche, the most advanced social theory the world has ever known, was created by Kim Il-sung in 1930 when the ever-victorious general was 18 years old. Since then, the theory has been embraced by political and intellectual leaders across the world.

This is what North Koreans are required to believe. The idea of a high school graduate developing such a breakthrough social theory might sound strange, but after all the official line is that Kim Il-sung became a leader of the entire Communist movement at the tender age of 14 when in 1926 he allegedly founded the first truly communist group in the country.

However, early references to Juche are almost certain to be faked. The text of the speech which Kim Il-sung allegedly delivered in Manchuria in 1930 was first published in the 1960s, when Juche featured prominently in North Korean propaganda. There are good reasons to think that the entire text of the speech was actually written around the same time, to suit the political situation of the 1960s.

Actually, nothing was known about Juche until December 1955 when Kim Il-sung first used the word in a long speech, addressing a group of high-level party officials. In those days, Pyongyang was waging its first anti-Soviet campaign, still very mild by later standards. Nonetheless, in the mid-1950s the Soviet Union was liberalizing itself, so Kim Il-sung decided to move away from his erstwhile ally and patron. He did not want to be ousted and disgraced by local Korean reformers.

In his attempts to counter the liberal trends, Kim Il-sung decided to use nationalism as his preferred weapon. After all, the liberal wind was blowing from the north, from Russia, and hence it made sense to remind officials about their “Koreanness.” If we have a more careful look though the 1955 speech and other early references to Juche we will see that this was what Kim Il Song meant: not a coherent ideology, not even the idea of “self-reliance,” but rather need to emphasize one’s national identity as a Korean, a need to see Korea’s national interests as the top priority.

I have spent a long time reading through the pages of the Nodong sinmun of the 1950s, and it is clear that references to Juche remained rare until 1960. In the “Popular Dictionary of Political Terms,” published in Pyongyang in 1959, the term Juche is conspicuous in its absence, while in the large Dictionary of the Korean Language (1961-1962) the present-day ideological meaning of the term as a name for a political ideology is featured, but still occupies a modest place as a secondary interpretation. It took a large and concerted effort on the part of the Pyongyang ideologues in the mid and late 1960s to re-define Juche as a coherent ideology and the official philosophy of the DPRK.

Things began to really change in 1965 when the Juche promotion campaign was cranked up. While visiting Indonesia in April 1965, then still under a left-leaning nationalist dictatorship, Kim Il-sung delivered a speech which can be seen as the first Juche speech (the 1955 statement used the word in a different meaning). It was when Juche was first posited as the basic ideological principle of North Korean politics. This happened when the Sino-Soviet quarrel had reached its greatest intensity, and North Korea strove to stay neutral in the noisy feud of its two major sponsors. Nationalism in this situation had to promoted. So Kim Il-sung observed that the leading principles in North Korea were “independence in politics, self-reliance in the economy, and Juche as the ideology.”

Only in 1970 was Juche officially promoted as the leading ideology of the ruling Korean Workers Party. The KWP’s Fifth Congress stated that the Party would be guided by Marxism-Leninism and Juche. Judged by the standards of the Communist bloc, this was heresy. The local ideology was put on an equal footing with Marxism! However, by that time it did not really matter. The statement did raise eyebrows in the ideological departments of some ruling Communist parties, above all, in Moscow. However, nobody had either the will or the means to enforce orthodoxy, and everybody knew about the rampant nationalism of North Korea.

The next step came in 1980, when the Sixth KWP congress deleted references to Marxism-Leninism, leaving Juche as the sole official ideology of the Party. Thus the KWP became the only part of the Communist bloc which did not actually claim itself to be an adherent of Marxism-Leninism, even though its practical policy was still perfectly in line with the Stalinist tradition. This was the clearest possible declaration of ideological independence, a break with the official traditions of the Communist camp.

Nowadays, Juche is considered to be not only the girding principle of the KWP, but also the state ideology of the DPRK. The North Korean Constitution makes this clear in Article 3.

It is quite common to say that one has to understand Juche in order to understand North Korea. Well, I would not subscribe to that opinion. Juche is simply too vague to be taken seriously, and the interpretation of its philosophy has changed countless times. In a sense, Juche is an empty shell, a term which includes everything the North Korean leadership considers “correct” at any given moment in time, but hardly anything else.

Reuters
11/26/2007

A U.S. embassy spokesman on Monday denied a report by South Korea’s biggest daily that the State Department has stationed an employee in Pyongyang to lay the groundwork for opening a permanent liaison office in North Korea.

The State Department has an employee in Pyongyang but only to manage equipment for a team that is overseeing the disablement of North Korea’s nuclear facilities. The employee will be in the North through the disablement process.

“This is not for normalisation,” spokesman Max Kwak said.

There has been a rise in exchanges between the two countries after reclusive North Korea agreed this year to a multinational deal to freeze and then roll back its nuclear arms programme in return for massive aid and better international standing.

The Chosun Ilbo newspaper quoted an unnamed source in Washington as saying: “A U.S. State Department diplomat who handles administrative affairs has checked into a room in Koryo Hotel and has been using it as an office and accommodation.”

The State Department employee has been acting as an administrative liaison between the United States and North Korea, the source said.

The Koryo is one of the few hotels in Pyongyang open to foreign guests.

The United States has said if North Korea completely ends its nuclear weapons programme, Washington is willing to establish diplomatic ties with Pyongyang.
U.S. Diplomat ‘Permanently’ Stationed in Pyongyang
Choson Ilbo (h/t One Free Korea)
11/26/2007

A U.S. diplomat has been stationed permanently at the Koryo Hotel in Pyongyang since mid-November, a source said Sunday. The development comes as U.S.-North Korea relations are improving as Pyongyang implements its promise to disable its nuclear facilities at Yongbyon by the end of the year.

A source in Washington said that the U.S. plans to dispatch another permanent diplomat to Pyongyang soon, with the Koryo Hotel likely to serve as a de facto U.S. liaison office in North Korea. This is the first time the U.S. has ever stationed a permanent diplomat in Pyongyang, and it suggests the possible normalization of relations between the two sides.

The Washington source said, “A foreign service officer in charge of administrative affairs from the U.S. State Department has been staying at the Koryo Hotel in Pyongyang, using his room as both an office and living quarters. He is mainly carrying out administrative liaison efforts between the U.S. and North Korea.”

The diplomat is apparently serving as a liaison officer for U.S. delegations to Pyongyang and figuring out their staying expenses there. The temporary U.S. office at the Koryo Hotel is said to be fitted out with exclusive telephone and fax lines and a computer with an Internet connection.

The U.S. is expected to dispatch a senior diplomat to Pyongyang who will handle political affairs when North Korea completes the disablement of its nuclear facilities. This senior diplomat will also participate in talks with Pyongyang and visit the nuclear sites at Yongbyon on a non-regular basis to inspect the progress of the disablement and dismantlement of the facilities.

Washington and Pyongyang agreed on this through meetings between chief U.S. negotiator to the six-party talks Christopher Hill and his North Korean counterpart Kim Kye-gwan and through “a channel in New York,” the source said.

The U.S. is expected to operate its temporary office in Pyongyang with a staff of two diplomats for the time being, with a view to upgrading the office to a regular liaison office or a permanent mission if North Korea clearly shows its intention to fully dismantle its nuclear programs.

The agreement to operate a de facto U.S. liaison office in Pyongyang suggests that the two sides strongly intend to improve their relations. Washington and Pyongyang agreed at the 1994 Geneva Accords to open a liaison office in Pyongyang upon concluding talks on the first North Korean nuclear crisis, but that agreement was never realized.

Daily NK
Yang Jung A
11/24/2007

It turns out that the North Korean regime asserts to its people that the South has decided to invest in the North because the South’s shipping industry is doomed.

The North Korean authorities argued such at public lectures held in October to report on the results of the second Inter-Korean Summit, according to a report released on Wednesday by Good Friends, a Seoul-based aid organization for North Korea.

The report says that a cadre from Pyongsung delivered a public lecture saying, “South’s shipbuilding industry is on the verge of doom, and that is why it has decided to build a shipyard in Anbyun of Kangwon and to establish cooperative complexes for shipbuilding in Nampo in the West Sea.” The cadre also announced that two Koreas have agreed to transform the military demarcation line in the waters of the West Sea into ‘peace line’ and create a joint fishing zone there, the report says.

Nevertheless, the report says, “Most participants had no interest in the lecture. They could only care about putting some bread on the table and making money, instead of wasting time on discussing the country’s affairs”

According to the report, the North Korean people strongly oppose the recently market regulatory measures. It has been reported that the number of individuals who violate the measures is increasing.

“Lately, the chairman of People’s Committee in Pohang district of Chongjin was fired and demoted to a regular worker’s position because the chairman had complained about the state’s measure, which bans females under 45 years old from doing business in the market starting with December 1st this year,” the report says. The chairman is quoted as saying, “In today’s society, women are breadwinners. If women under 45 are banned from making a living in the market, who is going to earn bread and butter for their households?”

“In Sinam district of Chungjin, a female was arrested after having expressed discontent about the regulation. She was pulled along to a Social Safety office and underwent all sorts of hardships. Later, she was made to take criticism at a regular evaluation meeting of a women’s unit in her district, and then released,” says the report.

“In Pyongyang, agents on a mission to crack down anti-socialist activities are going the rounds of the households of individuals who do business in the market. The agents ask the individuals when and how they started business, what their children do, and where they procure sales items,” says the report.

The report also tells an account of an old couple who has retired from the party and recently visited by inspection agents. The report says, “Although the couple spent most of their life serving the party, they had to come to the market to make a living at their old age. The old couple felt very bitter about their situation. They grumbled against the regime saying that it frequently regulates the market and inspects those engaged in the business. The old couple was at a loss what to do.”

Korean PMs ‘agree rail-link deal’
BBC
11/15/2007

A regular freight train service over the heavily-armed border between North and South Korea could start before the end of the year, officials say.

The deal, on the second day of talks between prime ministers from the two countries, marks the first agreed schedule for the train link.

The South has pushed for reliable transport links to supply the factories its firms run in the North.

It follows an agreement made last month at a summit of the countries’ leaders.

‘Shared understanding’

North Korean Prime Minister Kim Yong-il and his counterpart from the South, Han Duck-soo, are spending three days in discussions in the South’s capital, Seoul.

The South’s Unification Ministry spokesman, Kim Nam-shik, said the two sides were now trying to set a specific date for starting the rail service.

The 25km (16 mile) track runs from the heavily-guarded border to a joint industrial complex in the North’s city of Kaesong.

“Both sides shared an understanding that it would be meaningful in further vitalising the Kaesong industrial complex,” said the spokesman.

The meeting – the first at prime ministerial level for 15 years – follows October’s historic summit in Pyongyang between the two countries’ leaders.

Divided families

The summit between the North’s Kim Jong-il and the South’s President Roh Moo-hyun was only the second such meeting since the Korean peninsula was partitioned over half a century ago.

The two leaders signed an accord calling for greater peace and economic partnership, despite the two countries remaining technically at war with each other.

They also agreed in principle for the regular cargo rail service to be established.

The prime ministers are using their meeting to discuss more specific proposals.

One key issue is the establishment of a joint fishing area around the disputed western sea border – the scene of naval clashes in the past – and a new economic zone around the North Korean port of Haeju.

The South also hopes to increase the number of reunion meetings for families separated when the peninsula was split.

Prime ministerial meetings between the two Koreas were suspended in 1992 amid growing concern over Pyongyang’s nuclear ambitions.

Ministerial infidelity
Joong Ang Daily
11/16/2007
Lee Yang-soo

The prime minister of North Korea holds one of the top positions in the country’s hierarchy, officially fourth in political power.

Many believe, however, that the prime minister may actually be about 20th in actual influence, as there are plenty of hidden power elites in the political and army circles.

The post of prime minister in North Korea was created after the introduction of the state president in 1972. Since then, eight people have occupied the post. Among them, the person who impressed us the most was Yeon Hyung-muk, who held the job from 1988 to 1992.

The prime minister of North Korea faces tough and dangerous working conditions.

Kim Il Sung emphasized the significance of the post by insisting that the “prime minister is the general of the nation’s economy.” The prime minister, in turn, has often been made the scapegoat for the people’s discontent about the country’s struggling economy.

And to make a bad situation worse, the public economy always took a backseat to the military economy, which led to nuclear and missile development.

One after another, numerous ministers have stepped down in dishonor or suffered incurable illness.

After the dishonorable withdrawal of former Prime Minister Li Gun-mo (1986-1988), Li’s successor, Yeon Hyung-muk, was demoted after four years to the post of candidate member for the Political Bureau Presidium, or secretary of Jagangdo Provincial Party. In addition, Prime Minister Park Bong-ju was demoted last April to manager of a small-town company.

Since assuming the reins of government, Kim Jong-il has recruited people who know the economy well to the top posts.

However, he took a “military first” attitude whenever the cabinet, the Workers Party, and army were in discord over the issue of opening and reform.

In contrast, the president of the People’s Republic of China, Jiang Zemin, gave Zhu Rongji, premier of the state council, a carte blanche to decide every affair in public administration and the national economy.

For example, when rumors spread that the yuan would be further devalued, he consulted Zhu. At that time, Zhu’s nickname was “emperor of the Chinese economy.” China has shown great fidelity to the principle that the “prime minister is the general of the national economy.”

Come to think of it, South Korea has had 27 prime ministers since 1972, representing its own infidelity to the prime minister. Six of one, half a dozen of the other.

Koreas agree to open cargo railway, but key issues remain unresolved
Yonhap
Kim Hyun
11/15/2007

South and North Korea agreed Thursday to open a cross-border cargo railway by the end of this year — resuming the service halted more than half a century ago — as part of economic cooperation projects agreed upon in their leaders’ recent summit.

Seoul proposed Dec. 11 as the date to start the railway service through the demilitarized zone, a Unification Ministry official said on condition of anonymity. But North Korea’s response was not yet known.

The agreement to open a freight railway came on the second day of talks between South Korean Prime Minister Han Duck-soo and North Korean Premier Kim Yong-il in Seoul. The rare prime ministerial talks were aimed at devising concrete plans to implement wide-ranging accords reached between the leaders of the Koreas.

In their summit in early October, President Roh Moo-hyun and North Korean leader Kim Jong-il agreed on a slew of economic cooperation and peace projects. They also agreed that the agreements should be implemented through two follow-up talks — one between prime ministers and the other between defense ministers.

“There is a growing understanding between the sides for the start of the cargo rail service,” Kim Nam-shik, a spokesman for the Unification Ministry, told reporters. He said that the project “seemed highly possible,” even though more consultations are needed to secure a military guarantee by North Korea.

The 20-km cross-border route between South Korea’s Munsan and the North’s Bongdong will allow the mass transport of goods from a joint industrial complex in North Korea to the South, Seoul officials say.

The Koreas also agreed to set up a joint committee to create a peace zone in the disputed border area in the West Sea, part of key summit accords to reduce tension, the ministry spokesman said. Bloody skirmishes occurred in 1999 and 2002 near the disputed sea border, which North Korea does not acknowledge. The western sea border was unilaterally drawn by the U.S.-led United Nations Command at the end of the 1950-53 Korean War. Pyongyang has called for a new line to be drawn further south.

The peace project in the West Sea will likely include the creation of a joint fishing area in the western sea border area, and the establishment of an economic special zone in Haeju in southwestern North Korea, which will transform the naval base area into an economic stronghold.

The Koreas also made progress in social and cultural areas, the spokesman said, without elaborating on specifics.

But key issues remained unresolved.

The top item on North Korea’s agenda is South Korea’s heavy investment in the renovation of its antiquated railways and roads, said the Chosun Sinbo, published by ethnic Koreans in Japan.

The North Korean premier said in the talks that such South Korean support will help implement the summit accords “in a relatively short amount of time,” the paper said.

Pyongyang also expects Seoul’s money to develop shipbuilding facilities in the country, Seoul officials said.

South Korea is expected to seek North Korea’s support in improving the business environment in the Kaesong industrial complex, where communication facilities are poor and border customs inspections are highly restrictive.

The Kaesong complex, where scores of South Korean factories produce garments, shoes and other labor-intensive goods with North Korea’s cheap but skilled labor, emerged from agreements at the first-ever inter-Korean summit in Pyongyang in 2000. But business restrictions and political strains have limited its development.

Other issues include reunions of families separated since the 1950-53 Korean War, with South Korea pushing to regularize the sporadic events.

The two Koreas are expected to issue a joint statement wrapping up their three-day talks on Friday. To settle outstanding details, Seoul has proposed to hold follow-up economic talks between vice prime ministers in the second week of December, a Unification Ministry official said on condition of anonymity.

The Koreas held eight rounds of prime ministerial talks until 1992, when they signed an accord calling for an end to Cold War hostilities on the Korean Peninsula. But the talks were suspended afterward as relations soured over a dispute on North Korea’s nuclear weapons program.

This week’s talks, covering economic projects, will put aside thorny issues on military tension, which will be dealt with in defense ministers’ talks set for Nov. 27-29 in Pyongyang, Seoul officials said.

Unification Minister Lee Jae-joung said on the first day that this week’s talks were “a bit more flexible, a bit more amicable” than previous inter-Korean meetings.

South Korea expects that improved inter-Korean ties will facilitate progress in ongoing multilateral talks to persuade North Korea to abandon its nuclear ambitions.

The communist nation has shut down five key nuclear facilities under an aid-for-denuclearization accord signed in early October in talks involving the two Koreas, the U.S., Japan, China and Russia.

Pyongyang is also supposed to disable its key nuclear facilities at Yongbyon and submit a full list of its nuclear programs by the end of the year in return for the normalization of ties with the U.S. and Japan, as well as economic and energy assistance from the other parties involved.

N.K. asks for help in repairs to facilitate implementation of summit agreement: report
Yonhap
Byun Duk-kun
11/15/2007

North Korea has asked South Korea to help repair its dilapidated railways and roads so the agreements at the recent inter-Korean summit can be quickly implemented, a pro-Pyongyang newspaper published in Japan reported Thursday.

In a rare report from Seoul, the Chosun Shinbo said North Korean Prime Minister Kim Yong-il proposed the modernization of North Korea’s railway between the border town of Kaesong and the northwestern city of Shinuiju at his talks with South Korea’s Han Duck-soo.

Kim, 63, was also quoted as saying that projects to modernize railways and roads will enable the joint declaration from the inter-Korean summit to be implemented “in a relatively short amount of time.”

The North Korean arrived here Wednesday for three days of talks to follow up on the summit held in Pyongyang on Oct. 2-4.

At the summit, President Roh Moo-hyun and North Korean leader Kim Jong-il called for a quick expansion of economic cooperation and an end to military hostilities between the divided Koreas.

This week’s talks had been expected to focus on economic issues as separate talks between the defense ministers of the two countries are to be held in Pyongyang later this month.

Seoul is also calling for an early opening of cargo rail service between the North’s border town of Kaesong, where dozens of South Korean businesses are producing over US$1 million worth of goods each month, and its border town of Munsan.

Still, the Seoul government is placing more weight on the opening of other areas in the reclusive North to South Korean businesses as well as establishing a joint fishing area in the West Sea, where a maritime border dispute led to deadly clashes between the navies of the divided Koreas in 1999 and 2002. The Koreas technically remain at war as the 1950-53 Korean War ended with an armistice, not a peace treaty.

Seoul officials are also calling for easier access for South Korean businesses to the South Korea-funded industrial complex in Kaesong as well as the relaxing of customs and quarantine inspections at the border.

The North Korean premier said his country is ready to resolve the difficulties facing the South Korean businesses operating in Kaesong, according to the report.

“The North side believes what the leaders (of the two Koreas) agreed are not mere economic cooperation projects, but projects that will lead to the reconciliation, unification and prosperity of the nation,” the report said.

Asia Times
Andrei Lankov
11/15/2007

For six decades, the myth of unification as Korea’s supreme goal has been enshrined in the official mythology of both nations. The lip service to this myth is still paid by virtually all political forces in both Koreas, but the actual policy of both Pyongyang and Seoul nowadays is clearly based on a very different set of assumptions and hopes: both sides try to avoid situations which might lead to unification.

There are good reasons for this quiet change of policy. The gap between the Koreas is too great; depending on which calculations you believe the per capita gross domestic product in the South is between 15 and 40 times higher than that of the North. Perhaps, nowhere in the world one can find two neighboring countries whose income levels would be so vastly different – and in this case the two countries happen to speak the same language.

The North Korean rulers know perfectly well that in a unified country they would be unable to keep their privileges, and also are likely to be held responsible for decades of gross human-rights abuses and economic mismanagement. South Koreans are no more willing to unify with their impoverished brethren – unification of Germany where the initial situation was much better, became an ordeal, so the unification of Korea would clearly become a disaster.

Therefore, South Korean politicians are doing everything possible to support the dictatorship in Pyongyang, assuming that “stability” in the North is necessary for South Korean economic prosperity. Sufficient to say that some 40% of all grain consumed in North Korea is either received from the South or produced with the help of the mineral fertilizer shipped by Seoul free of charge.

This policy is usually explained as a way to “create the environment for Chinese-style reforms”. This indeed might be its long-term goal, but for all practical reasons the major immediate outcome of massive South Korean aid is a continuous survival of the Pyongyang dictatorship. The statement that a “German scenario is unacceptable” has become a mantra of Seoul politicians.

However, over the past decades, Kim Jong-il’s regime has not shown the slightest inclination to reform itself. Obviously, the Pyongyang elite believes that the Chinese model, so enthusiastically extolled by the good-wishers from Seoul, is not acceptable for them. Perhaps they are correct in their fears. The existence of a rich and free South, always presented as another part of the same nation, makes the situation in Korea quite different from that of China or Vietnam.

Chinese-style reforms, if undertaken by Pyongyang, are bound to produce a certain openness of the country and certain relaxation of political control. As a result, the North Korean populace will soon learn about South Korean prosperity and will be less afraid of the regime’s repressive machine. It’s questionable to what extent the North Koreans would be willing to obey a government whose track record has been so bad after they see an attractive alternative of the South.

Hence, North Korean leaders have made a rational decision: to keep stability and their own privileges, in recent years they have used foreign aid to roll back the changes which happened in the mid-1990s. Instead of reforms, they now do everything possible to limit or ban private economic activity and reassert their control over society.

Despite the government’s resistance to reform, the North Korean system is gradually crumbling from below, and this slow-motion disintegration might turn into an uncontrollable collapse in any moment. A sudden death of even a serious illness of Kim Jong-il is almost certain to trigger a serious crisis. If this happens, all bets are off, but it seems that a collapse of the system, Romanian or East German style, is one of the most likely outcomes.

This is what people in the South fear most. Indeed, unification might indeed spell economic and social disaster for the rich South. There are different estimates of the “unification costs”, the amount of money that would be necessary to close the yawning gap between the two Korean economies. The most recent estimate was made public last October. A report prepared by a committee at the South Korean National Assembly states that if unification happened in 2015, it would cost US$858 million to raise North Korean per capita income to half of the South Korean level. This is guesswork, of course, but everybody agrees that the amount of money necessary for reconstruction of the impoverished North could ultimately be counted in trillions of US dollars.

The “unification cost” is a hot topic, but many problems are of a social nature and have nothing to do with money issues. For decades, North Korea has remained one of the world’s most isolated regimes whose rulers once perfected Stalinism to the level undreamt of by Joseph Stalin himself. The population, with the exception of a tiny elite, has very vague and distorted ideas about the outside world.

North Korea is a well-educated society, but the technology and science they teach at the colleges is of 1950s vintage. The average North Korean engineer has never used a computer. Society has been conditioned to perceive the total distribution of goods and services as the norm, and experts seem to agree that the average North Korean defector in the South has serious problems when it comes to making consumer or career decisions for oneself (no such decisions are necessary or even possible under the North Korean system).

So, it is easy to see why South Koreans are so afraid of unification. However, history does not flow in accordance with human desires. If the North Korean state collapses, South Koreans will have few choices but to prepare themselves for unification at time and under circumstances which they would not be too happy about.

As the East European revolutions of 1989-1990 (or, for that matter, of nearly all popular revolutions) have demonstrated, once changes begin, nobody can control the pace and direction of events. Now it is time to think what should be done if an emergency happens and the North Korean regime follows the fate of nearly all regimes which once were its models and aspirations – Albania, Romania and the Soviet Union itself. When a crisis starts unrolling, it doesn’t leave much time for rational thinking.

Alas, any open media discussion of this subject remains taboo in the South. There are fears that such discussions might annoy the North, undermining inter-Korean detente. The Korean nationalist left, now (barely) in power, still believes that the Chinese solution is possible and “progressive”, and also perceives any talks about regime collapse in the North as a reminder of the official anti-communism of the past. The right is slightly more realistic, but it seems that its supporters are not too eager to discuss the difficulties such a turn of events could bring about.

It will be a simplification to think that South Koreans are completely unprepared for such an eventuality. Seoul government agencies do not like to talk about it, but it is clear that somewhere in government there are secret files with short-term contingency plans, to be put in motion in case of a power collapse in the North. However, these plans deal with immediate consequences of the crisis, especially with handling of refugees, and not with the long-term strategy of reconstruction, and this strategy is actually the hardest part of the task.

The major task is to smooth the transition, to make the shock of unification less painful and more manageable. It seems that one of the possible solutions is a confederation. The idea of confederation has been suggested many times before, but in most cases it was assumed that the two existing Korean regimes would somehow agree to join a confederative state. Needless to say, one has to be very naive to believe that the North Korean rulers could somehow co-exist with South Korea, which even in its worst times was a relatively mild dictatorship committed to a market economy (and become a liberal democracy two decades ago).

Such confederation is plainly impossible. However, in this case we mean a different type of state union, a provisional confederation, whose sole and clearly stated task would be to lay the foundations for a truly unified state and to cushion the more disastrous effects of North Korea’s transformation.

Such a confederation will become possible only when and if the North Korean regime changes dramatically, and a new leadership in Pyongyang will have no reasons to fear the influence of the democratic and capitalist South. In other words, only a post-Kim government can be realistically expected to agree to such a provisional confederation. It does not really matter how this government will come to power, whether through a popular revolution, a coup or something else. As long as this government (most unlikely, bowing to pressure from below) would be genuinely willing to unite with the South, it might become a partner at these negotiations and a participant of the confederation regime.

The confederation regime should make North Korea a democracy, one that introduces political freedoms and basic political rights. There should be an explicit statement about the length of the provisional confederation regime, and 10 to 15 years seems to be ideal. A longer period might alienate common North Koreans who will probably see it as an attempt to keep them from fully enjoying the South Korean lifestyle while using them as “cheap labor”. On the other hand, a shorter period might not be sufficient for any serious transformations.

One of the tasks of such a provisional system will be to control cross-border movement. South Koreans are now haunted by nightmarish pictures of millions of North Koreans flooding Seoul and other major cities, where they will push the South Korean poor from unskilled jobs or resort to robbery and theft. Such threats are real, and the confederation will make it relatively easy to maintain a visa system of some kind, with a clearly stated (and reasonable) schedule of gradual relaxation. For example, it might be stated that for the first five years all trips between the two parts of the new Korea will require a visa, and North Koreans will not be allowed to take jobs or long-time residency in the South. In the following five years these restrictions could be relaxed and then finally lifted.

South Korean fears of a North Korean crime wave might be well-founded – notoriously tough North Korean commandos indeed make ideal mafia enforcers. However, the North Koreans also should be protected from the less scrupulous of their new-found brethren – for example, from South Korean real estate speculators. In the case of uncontrolled unification, South Korean dealers will rush to buy valuable property in the North, a task which will not be too difficult in a country where $10 a month is seen as a good income.

South Korean dealers vividly remember what happened in Kangnam, former paddy fields which were turned into a posh neighborhood in southern Seoul. In some parts of Kangnam land prices increased more than a thousandsfold within a decade or so, making a lucky investor super-rich, and there are good reasons to believe that the price of land in Pyongyang or Kaesong could sky-rocket as well.

However, it is easy to predict the resentment of those North Koreans who will lose their dwellings for what would initially appear to be a fortune, but soon will come to be seen as small change. If real estate speculations are left uncontrolled, in a few years entire North Korean cities could become the property of South Korean dealers – with predictable consequences for relations between northerners and southerners. Hence, the provisional confederation regime, while encouraging other kinds of investment, should strictly control or even ban the purchase of arable land and housing in the North by South Koreans.

Another painful issue is that of land reform, distributing the land of state-run agricultural cooperatives among individual farmers. One of the major challenges would be claims of land owners who lost their property during the North Korean radical land reform of 1946. A majority of the dispossessed landlords fled to the South in 1945-1953 when some 1.5 million inhabitants of the North crossed the border between the two Koreas. Their descendants now live in the South and, as both anecdotal evidence and some research testify, carefully kept the old land titles. It is just a minor exaggeration to say that an arable plot in the North usually has an aspiring landlord residing in Seoul. These claims remain technically valid since the Republic of Korea has never recognized the North Korean land reform of 1946.

For generations, the North Koreans have been told by their government that the collapse of the communist regime will bring back the nasty landowners who have been laying in wait in the South. If in this particular case the propaganda statements are correct, this would produce a very serious negative impression on North Koreans, further increasing their alienation and disappointment.

Under protection of the confederation regime, a land property system could be redesigned, or rather created from scratch. The recognition of the 1946 land reform and its results is a necessary first step. To placate former owners, some partial compensation might be paid, even though the present author is not certain whether grandchildren of former landlords, usually rich and successful men and women, are really in dire need of such compensation.

As the next step, the cooperative property should be distributed among its members, preferably among the people who are really present in their villages (perhaps, a free rent system might be the first step). At any rate, by the end of the confederation period, land and real estate in North Korean should be safely privatized, with North Korean residents (and, perhaps, recent defectors) being major or even sole participants in this process.

One of the more controversial parts of the package might be a general amnesty for all crimes committed under the Kim family regime. This is especially necessary because the fear of persecution seems to be one of the reasons which keeps the North Korean elite, including its lower ranks, united around the inefficient and brutal regime. They believe that collapse of the Kims’ rule will mean not only the bend of their privileges (which actually are quite small – only a handful of top officials enjoy a really opulent lifestyle in North Korea), but they are more afraid of judicial persecution and even mob violence.

It is not incidental that North Korean officials and guides in Pyongyang ask one foreign visitor after another about the fate of former East German bureaucrats. Indeed, despite considerable liberalization in recent years, the regime remains exceptionally brutal, and its officials have no illusions about this. Unfortunately, this fear of persecution has kept the murderous regime going for the past decade or so and led to many more deaths.

One might argue that such unconditional amnesties to all Koreans is probably “unethical”. Perhaps, but let’s face it: the sheer scale of the crimes committed makes any serious and fair investigation impossible. About half million people have been in prison during those decades, and many more exiled, and nobody will be capable of investigating all these cases carefully and impartially. A great number of people have been directly or indirectly involved with the human-rights abuses, and again, it is impossible to investigate a few hundred thousand former officials who by the nature of their job might have been responsible for some criminal actions. Hence, only partial, selective symbolical (and therefore largely politically motivated) justice can be served at best.

A general amnesty would solve two problems: first, it will make former North Korean bureaucrats less willing to resist changes; second, it would diminish the scale of intrigue and manipulations, since people would not be fighting to avoid the fate of arbitrarily chosen scapegoats. It should become part of the law, and to be taken seriously the amnesty should be made as straightforward and unequivocal as possible.

Of course, amnesty does not mean complete forgiveness. There might be restrictions for former party and secret police officials to occupy certain positions in a post-Kim Korea (a policy pioneered by Eastern Europe). It might be a good idea to create non-judiciary commissions to investigate former abuses, like it was done in post-apartheid South Africa. This commission might lead to truly awful discoveries, but the promise of amnesty should be kept even if it will become clear that North Korean prison camps were not much different from Adolf Hitler’s Auschwitz or Pol Pot’s Tuol Sleng in Cambodia.

The confederation treaty also should include some legal measures which will make certain that North Koreans will not remain the source of “cheap labor”, to be used (and abused) by South Korean businesses.

For example, the military of the two Koreas should be integrated first, and there should be large quotas reserved for former North Korean servicemen in the united army. Politically, the North Korean military might become a hotspot of social discontent: the 1.2 million-strong North Korean armed forces probably lack the skills necessary for modern warfare, but this force consists of professionals who have not known anything except the barracks life and intense nationalist indoctrination. If former military officers are given commissions in the post-unification forces, their skills and zeal will find a good and useful outlet. Otherwise, the very same people are likely to join the ranks of organized crime.

It is also important to provide large admission quotas for North Korean youngsters at major South Korean universities. Korean society is both hierarchical and meritocratic, and being a graduate of a major Seoul school is a necessary condition of entry for nearly all important jobs. It is not incidental that the entire life of a middle-class South Korean family is often designed to facilitate exam preparations for the children.

Unfortunately, for decades to come even the most gifted North Koreans will be unable to compete on equal terms with much better prepared South Korean students, and this means that they can realistically hope to get only to lower-level universities, usually in the North. Both actual and perceived quality of education in those schools will remain relatively low for decades, and this will ensure that North Koreans, even with “new” college-level education, will be permanently relegated to subaltern positions. Hence, affirmative actions are necessary, even if such measures are certain to provoke an hysterical outcry from Seoul and Busan parents.

The confederation regime will help to solve another important problem – that of the North Korean middle class. As East Europe demonstrated, a majority of active supporters of democracy and reform has come from local-educated urban groups, a close analogue of the Western “middle class”. The same is likely to happen in Korea.

However, the same people will become very vulnerable after unification. Who will hire an engineer who has not seen a computer? What can be taught by a social science teacher who spent his or her college years memorizing Kim Il-sung’s genealogical tree and the “Dear Leader’s” asinine pronouncement on everything, from rice planting to nuclear physics? Who will visit a former North Korean doctor whose medicine is essentially on the 1950s level?

During the confederation regime, special efforts could be made to re-educate those people, at least partially, preparing them for a new environment while still allowing them to continue their professional work in the North. Most of them will be unable to adjust, unfortunately, but at least the 10 or 15 years leniency will give a chance to the lucky and determined few, and will also provide others with time to find other ways to make a living.

The confederation model does have serious shortcomings. For example, there are good reasons to believe that the new North Korean political elite will consist largely of Kim-era officials (or their children) who will retain their old habits, including that of corruption and inefficiency. A Northern democratic government would be prone to populist decisions, based on pressure from below, and North Koreans are likely to have particularly naive views on how their society and economy can and should operate, so some mistakes introduced via popular vote might become ruinous and costly.

But no ideal solution is possible. One should not harbor too many illusions. The recovery of North Korea will be prolonged and painful. Even if unification happens tomorrow, the difference between the two Koreas will remain palpable until 2050, if not longer. Tensions, misunderstanding and even outright hostility between northerners and southerners are bound to continue for a long time.

There are no easy and simple solutions. But the current state of affairs cannot continue indefinitely, and it is time to think how unavoidable problems can be mollified. The current policy of Seoul administrations merely helps to postpone the problems created by Korea’s division, and the disastrous choices made by the North half of the country. But sooner or later, Korea and the entire world will have to face these problems – and solve them.

Yonhap
11/14/2007

North Korea’s prime minister arrived here Wednesday to hold talks with his South Korean counterpart on implementing agreements reached at the second-ever inter-Korean summit last month.

In last month’s summit in Pyongyang, President Roh Moo-hyun and North Korean leader Kim Jong-il called for denuclearization of North Korea, the establishment of a permanent peace regime on the peninsula and a range of economic cooperation and rapprochement measures.

Kim Yong-il is the first North Korean premier to visit here in 15 years. The prime ministers of the Koreas held eight rounds of talks until 1992. Inter-Korean minister-level talks resumed in 2000 following the first-ever summit between the leaders of the Koreas earlier that year.

Premier aims to build North Korean economy with inter-Korean cooperation
Yonhap
11/14/2007

North Korea’s prime minister is expected to make inter-Korean economic projects a top priority in the prime ministerial talks this week, watchers forecast on Wednesday.

Kim Yong-il, North Korea’s top official in overall economic policy, was due to arrive in Seoul on Wednesday for three-day talks with South Korean Prime Minister Han Duck-soo.

The talks follow last month’s inter-Korean summit held in Pyongyang, as well as Kim’s trip earlier this month to Vietnam, Malaysia, Cambodia and Laos. Kim’s Southeast Asian trip was aimed at finding ways to boost North Korea’s failing economy through regional cooperation.

Kim replaced his predecessor, Pak Pong-ju, as prime minister earlier this year after spending most of his career in maritime affairs and transport.

The 63-year-old career administrator served nine years in the military beginning in 1961 and graduated from the Rajin University of Marine Transport, leading to his bureaucratic career as a rank-and-filer in the Ministry of Land and Marine Transport.

He became head of the ministry in 1994, a position he held until he was appointed as prime minister on April 11.

The premier was praised by the North Korean people in 2005 for successfully modernizing the Ryongnam Ship Repair Factory near the western port of Nampo.

Kim is also well-known for having forged maritime communications and transportation agreements with North Korea’s allies, including China, Pakistan and Syria.

Some South Korean experts say Kim’s background represents a shift in North Korea’s economic policy, suggesting a move from isolation to economic expansion in the international community, as well an emphasis on reform and technology.

Daily NK
Yang Jung A
11/5/2007

Forty-year old Park Sung Jin (pseudonym), a cloth merchant in Chongjin lately went to Tumun in Jilin Province, China under the pretext that he would visit his relatives there. He looked for Chinese business partners and tried to find items he can sell.

It took guts for Mr. Park to venture a trip to China. However, his efforts might turn out to be fruitless.

Mr. Park needed to get a border pass to go to China, and it costs him a great fortune. The pass allowed Mr. Park to visit his pre-determined destination only once. He paid 1 million North Korean won (approx. US$340) for the pass which he applied for in February, 2006 and received in August, 2007. If he wanted to have it within six months, he had to pay about 4,000 Yuan (approx. USD560).

Applicants for the pass also need to bribe the officials of People’s Committee and Security Agency because they are in charge of issuing visas to China. In fact, Mr. Park had to spend extra money on bribery to go to China for business.

Since it was Mr. Park’s first time to apply for the visa, he went through a relatively simple visa procedure. As for those who apply for the visa more than once, more complicated procedure is waiting. They are asked to state what they had done during their first visit to China.

If Mr. Park is issued a passport by any chance, he can go to many places for long periods of time. Unfortunately those over the age of 45 are more likely to get a passport (Mr. Park is forty). Moreover, the eligibility for the issue of a passport is much more complicated and it costs big fortune to get one. For instance, those who apply for the issue of a passport are supposed to pay $40 for application fee. However, the applicants need to spend extra money on bribes and other things, and for the most time end up spending more than $500 to get a passport.

Mr. Park is now busy visiting relatives and business partners. He is determined to make money as much as possible during his stay in China so that he can get his money’s worth upon his return home.

There are more theft incidents in Hoiryeong than ever

Lately, 45-year old An Myong Sook, a resident in Hoiryeong city, never hangs out the wash to dry outside. She tells her 15-year daughter not to forget to lock the doors when she leaves home because there are so many thieves in her neighborhood.

Since last year, the construction of apartments and roads has been underway around her area in order to commemorate the 90th birthday of Kim Jong Suk (the late mother of Kim Jong Il). For the construction, many outside workers came to her area, and some of them have broken into neighboring houses.

After having repaired the road laid behind the statue of Kim Jong Suk, the workers have started building the road between Hoiryeong and Chongjin since June. Many workers came to Hoiryeong from Rajin, Chongjin, Kilju, and Hamheung.

However, ever since the outside workers came to Hoiryeong in June, the number of households which lost their belongings or livestock has increased. The local people of Hoiryeong are increasingly complaining that the increase in rice price and theft has to with the presence of the outside workers.

Accordingly, the North Korean authorities have strengthened the punishment for theft. In the past, stealing was considered as a petty misdemeanor. Nowadays, that guilt of theft is sent to labor training facilities. The authorities confiscate all stolen items sold to the third person.

However, it is difficult to get back basic supplies such as clothes once they are stolen, and therefore every household in Hoiryeong is on the alert for theft.