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Failed state index

Tuesday, June 24th, 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

Posted in Political economy | Comments Closed

Kim invited to attend Olympics

Sunday, June 22nd, 2008

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

Posted in Japan, Political economy, Sports, USA | Comments Closed

Russia donates food to DPRK

Thursday, June 19th, 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

Posted in Foreign aid statistics, Political economy, Railways, Rason Economic and Trade Zone (Rajin-Sonbong), Russia | 1 Comment »

The People’s Safety Agency’s Authority Is Strengthened

Tuesday, June 17th, 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.

Posted in Cabinet, Central Committee, Korean People's Army, Ministry of Administration, Ministry of People’s Armed Forces, Ministry of People’s Security (Criminal Police), Ministry of State Security (MPSS, NSA, SSD), Political economy | Comments Closed

Lim Dong Won book published

Thursday, June 12th, 2008

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

Posted in Communications, Film, Inter-Korean summit, Political economy, Telephones | Comments Closed

Kim Jong Chol leading anti-corruption campaign in North Hamgyong

Monday, June 9th, 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

Posted in Banking, Finance, Fiscal & monetary policy, Political economy | Comments Closed

Update: Jang Song Taek’s anti-corruption campaign

Tuesday, May 20th, 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

Posted in Banking, China, Chongryun, Finance, Fiscal & monetary policy, International trade, Japan, Political economy | 3 Comments »

Hyundai projects picking up this year – still not profitable

Monday, May 19th, 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

Posted in 2002 Economic reforms, Economic reform, Foreign aid statistics, Foreign direct investment, International trade, Kaesong Industrial Complex (KIC), Manufacturing, Mt. Kumgang Tourist Special Zone, Political economy, RoK Ministry of Unification, Statistics, Tourism, Trade Statistics | Comments Closed

North Korea propaganda museum opens in South

Saturday, May 10th, 2008

From the New York Times (h/t MR):

In early April, when North Korea called President Lee Myung-bak of South Korea an “impostor,” a “traitor” and an “American running dog,” the verbal barbs sounded all too familiar to Jin Yong-seon. He has a museum filled with them.

Sounds like a great place to visit if in South Korea.

Read the full article here (requires free on-line registration):
Koreans Recall an Era of Propaganda Battles
New York Times
Choe Sang Hun
5/2/2008

Posted in Political economy | Comments Closed

They don’t believe…

Friday, May 9th, 2008

UPDATE: Follow up by Dr. Petrov in the comments.

One of the big question marks for policy makers (both inside the DPRK and internationally) is the state of knowledge and public opinion inside North Korea. How much do North Koreans know about the outside world? How much of the propaganda do they believe?

Being able to answer these questions scientifically is not possible. Political expression has never been encouraged in the DPRK except through state-sponsored solidarity events. Additionally, the role of the media in North Korea is to broadcast information from the top down, not to let it percolate from the bottom up.

Numerous scientific efforts at extrapolating North Korean public opinion have been made by journalists and scholars conducting surveys in northern China along the North Korean border (most recent examples here and here). However, these surveys are subject to various sample biases: the interviewees have already decided to leave the DPRK, most of them come from the provinces along the Chinese border, and most of them are not mid- upper- level cadres. So extrapolating the opinion of the median ri-level party secretary in a small village near the DMZ is not possible.

In the absence of a scientific survey, we are forced to resort to anecdotes and ethnographic data (usually with a very small “n”). A single anecdote is not so valuable, but multiple anecdotes taken together help us paint a more comprehensive picture. The opinions of most “North Korea watchers” on this topic are formed by this kind of ethnographic analysis.

I rely on personal anecdotes collected from North Koreans, visitors to North Korea, and former residents of North Korea, supplemented by stories in the media such as the popularity of South Korean films in the DPRK. These lead me to conclude that though North Koreans are generally not internationally savvy, they do not believe the official propaganda and do not pay attention to political speeches (if they can help it) for many of the same reasons that Americans do not pay attention to political speeches: namely that they have little to do with one’s day-to-day needs, and they get very old very fast.

This story in the Daily NK is one more anecdote:

A source from Yangkang Province told DailyNK in a phone interview on May 1st, “At the Union of Democratic Women (UDW) conference, commemorating the founding of the Chosun People’s Army on April 25th, a speaker humiliated herself when she blamed South Korean President Lee Myung Bak [for the crisis].”

The source told our reports that “during the conference, a speaker explained the international and domestic state of affairs, saying that ‘the U.S. and the puppet regime (the Lee administration) have overridden the peaceful agreements between the North and South (referring to the June 15th Joint Declaration and the October 4th Agreement) in order to create a serious food crisis in our Republic (North Korea)’.”

The source described an awkward atmosphere at the conference: When a chairperson of the People’s Unit of Hyehwa-dong in Hyesan asked outright, “We can understand that fact that Americans and Lee’s puppet factions are not aiding us with rice, but, why won’t China help us, as our closest ally?” The speaker’s face turned pale at the question and a sudden silence and tension filled the hall.

“At that moment, the lady next to the chairperson started chuckling, putting her head down, people began to chuckle here and there, and eventually, the entire hall was engulfed in laughter,” the source told DailyNK.

The speaker reportedly responded through his own laughter, “’You know the lecture material always reads like this. You can well understand the situation and know what I am saying, right?’” The source said that “his comment sent people rolling in the aisles,” and pointed out, “The situation showed how absurd the propaganda released by the authorities is.”

Read the full story here:
Government Lectures are Losing Effect
Daily NK
Lee Sung Jin
5/8/2008

Posted in Civil society, Political economy | 1 Comment »

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