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DPRK tightening domestic travel

Thursday, August 3rd, 2006

From the Daily NK:

“Regulation of People Due to Concern over Flooding”
Newspapers will not report the real conditions

The North Korea support organization ‘Good Friends’ alleged that the aftereffects of the recent flood in North Korea seem more severe than the flood of the late 1990’s. However, North Korean authorities are attempting to regulate people so that the truth does not become public.

Good Friends recently reported that “Each town and province in North Korea is taking measures not to authorize travel certificates until further directions are given.”

The restrictions have not only suspended railway operations, but have affected flood victims as well. During the period of unrest due to the current quasi-war, these restrictions have been enacted in order to prohibit flood victims from spreading the news of damage as they go from place to place looking for food.

In addition, military bases in Yangduk, Maengsan, Shinyang, Yoduk and Gumkang were most severely affected. However, as the country remains in a state of tension, newspapers have not been reporting details of the damage, in an attempt to lessen feelings of anxiousness.

The newsletter also reported that North Korea does not seem to be taking any countermeasures against the flooding.

Following the flood in late July, many elderly citizens and children in areas of North Korea such as Kowon, Dancheon, and Wonsan have contracted diseases and more are dying everyday. As there is no medical support or preventative measures against such epidemics, the number of deaths continues to rise.

Moreover, as the North Korean regime has been thrust into a “situation of quasi-war”, it has neglected to support those in need.

Although action has been taken to begin reconstruction, there is little machinery and equipment, so people have resorted to manually rebuilding. In addition, as roads and railroads are disconnected it is difficult for emergency equipment to be delivered to disaster areas. Currency is also not circulating easily, and it is predicted that the cost of market supplies and the price of food will rise.

Good Friends reported that approximately 130,000~150,000 people have suffered damages due to the flood, and that at present, 4,000 people have been reported missing. The number of deaths and missing persons totals more than 10,000.

Posted in Agriculture, Arduous March, Good Friends, Railways, Transportation | Comments Closed

DPRK refusing official food aid

Thursday, August 3rd, 2006

Red Cross In S. Korea Says North Rejects Aid
Washington Post
Kwang Tae Kim
Associated Press
Thursday, August 3, 2006; Page A18

SEOUL, Aug. 2 — The South Korean Red Cross said Wednesday that its North Korean counterpart had rejected an offer of aid for flood victims.

North Korea “expressed thanks for Seoul’s offer” but said “it will handle the recovery efforts from recent floods by itself,” a senior North Korean Red Cross official said, according to the South Korean Red Cross.

Floods caused by heavy rains in mid-July killed at least 154 North Koreans and left more than 127 missing, according to the United Nations. North Korea’s official media have said the disaster caused hundreds of deaths and cut off roads, bridges, railroads and communications.

However, the Good Friends group, a Seoul-based aid organization for North Korean refugees, said in a statement Wednesday that about 10,000 people were dead or missing and 1.5 million were left homeless by the floods.

The project coordinator for Good Friends, Lee Seung Yong, declined to identify sources for the information, but previous reports of activities in North Korea from the group have since been confirmed.

North Korea has relied on foreign donations of food since the 1990s, when natural disasters and decades of mismanagement led to the deaths of as many as 2 million people.

South Korea, a key provider of rice and fertilizer to the North, recently suspended aid shipments to protest the county’s refusal to discuss its missile launches in early July. The tests drew international condemnation and raised regional tensions.

North Korea protested the South’s decision and cut off government-level exchanges. But civilian-level exchanges remain intact, leading the North to seek civilian assistance from the South for flood victims while rejecting the offer of aid from the government-run Red Cross.

The South’s Korean Council for Reconciliation and Cooperation, which is composed of civic groups and ruling Uri Party members and is partly funded by the government, said it would send aid to the North by next weekend. It said the aid would probably be accepted but declined to give details.

JTS Korea, a private relief agency based in Seoul, also said Tuesday that it would ship emergency goods to the North. The agency’s spokeswoman, Hyun Hee Ryun, said North Korea had specified what kind of supplies it needed, suggesting that the aid would be accepted.

N. Korea declines aid from Red Cross after flooding
Korea Herald

North Korea, which was hit by torrential rain and flash floods last month, declined offers of aid from the International Red Cross and its South Korean branch, an official said.

“We asked the North Korean government what it would need in terms of relief aid to help in their efforts to recover after last month’s heavy rains,” said Kim Hyung-sup, a spokesman at South Korea’s National Red Cross. “North Korean authorities replied that while they appreciate the offer, they are able to manage on their own. I seriously doubt that.”

The International Committee of the Red Cross – to which the South Korean Red Cross belongs – also offered aid, which North Korea declined, Kim said.

Hundreds of people are dead or missing in North Korea after the rains, the country’s official Korean Central News Agency said on July 21. Floods last week also damaged farmland, tens of thousands of shelters and public buildings. Hundreds of roads, bridges and railways were destroyed, it said. South Korea was also hit and damages in the South are estimated at around 2 trillion won ($2.1 billion).

North Korea canceled two festivals this month, citing relief efforts. It postponed its Arirang Festival, featuring its mass games, as well as an annual festival with South Korea to mark their independence from Japanese colonial rule at the end of World War II.

“The biggest problem for North Korea will be food shortages, especially in winter and next year, because most of its farmlands were flooded,” Kim said. “Water and medical supplies are likely to be in demand, either because of the wounded as well as concerns of infectious diseases that may spread in the aftermath of the rains.”

A South Korean civic group said Tuesday that it plans to provide emergency aid to North Koreans.

The Join Together Society, a humanitarian aid group in Seoul, said it will send eight TEUs filled with relief goods, including 100 tons of flour, to the North from Aug. 3-9. TEUs, or 20-foot equivalent units, are a measure of containerized cargo capacity.

It is the first time that a South Korean civic group is providing aid to the communist state since Seoul stopped all efforts in the wake of the North’s recent missile tests and its ongoing boycott of six-way nuclear talks.

North Korea has depended on outside aid since the 1990s. More than a million people have died from famine because of years of flooding, drought and economic mismanagement. One in three North Koreans is chronically malnourished and many are forced to scavenge for food, resorting to ferns, acorns, grass and seaweed.

International food aid for North Korea reached 1.08 million tons last year, the world’s second largest after Ethiopia’s 1.1 million tons, according to the United Nations’ Food and Agriculture Organization. South Korea sent 394,000 tons of food aid to North Korea last year.

Daily NK:

It has been learned that serious damage has been incurred in North Korea due to heavy rain, which has also led to the cancellation of the Arirang festival.

Due to the heavy rain, hundreds of people have died, and 100,000 tons of food was lost. The Food and Agriculture Organization (FAO) estimated that necessary food aid would amount to 830,000 tons between November 2006 to October 2007.

High production agruicultural areas such as Hwanghae and South Pyongan provinces have already complained about likely food shortages next year. North Korean traders from China said that, “due to the damage from the heavy rain, the whole country will face loses”. Many international organizations have voiced a desire to aid the North Korean people after learning of the flooding, keeping the missile conflict a separate issue.

Although international organizations, including the International Red Cross, have offered to aid the North Korean people, North Korea has refused the aid. The World Food Program (WFP) offered to provide 74 tons of food to the Yeungsan district of North Hwanghae province, but due to the WFP condition of monitoring distribution of the food aid, North Korea has refused to accept it.

It was also confirmed that North Korea refused aid offered by the International Red Cross offices in Europe and the U.S., and has not yet responded to an offer of aid made by the Korean National Red Cross. It seems unlikely that the North will accept the aid, as the government has firmly refused external aid, in order to keep the international community ignorant to the situation in the North.

If the North Korean government continues to take this attitude, the number of victims will no doubt increase, particularly as the international community increases the level of isolation against North Korea.

Last December, when the U.N. General Assembly passed the North Korean Human Rights Resolution, North Korea asked the U.N. office in North Korea to withdraw. During that time, when North Korea refused food aid from the WFP, it was criticized as using its people as hostages to pressure the international community.

The South Korean government officially took the stand that it would not aid North Korea. Although some people have said that ignoring the need for aid is a bad decision, others believe that sending aid when the North did not request it would only it would only invite misunderstanding.

If the government rushes to aid North Korea, it will be criticized for supporting the North, while leaving domestic flood sufferers to fend for themselves.

However, many people point out that even though they maintain an alliance against the North in regard to the missile conflict, the South Korean government should still offer humanitarian assistance. Cooperation through international organizations, such as the WFP, with monitoring of distrubution, could ensure that the North Korean people receive the aid that they need.

Posted in Agriculture, International/Korean Red Cross, Join Together Society (ROK), South Korea, UN World Food Program | Comments Closed

Arirang 2006 cancelled

Saturday, July 29th, 2006

from the BBC:

N Korea cancels gymnastics gala

North Korea has cancelled a massive festival featuring thousands of gymnasts, soldiers and performers because of flooding earlier this month.

The two-month long Arirang festival has in the past been popular with western tourists and visitors from South Korea.

The event features spectacular synchronised acrobatic displays and is seen by Pyongyang as a way of boosting leader Kim Jong-il’s popularity.

Floods in North Korea this month killed more than 100 people.

According to the UN’s food agency, some 60,000 people were left homeless by the floods, which followed torrential rains.

Strained relations

Han Song Ryol, a North Korean envoy to the United Nations, told the Associated Press news agency the festival had been “cancelled due to flood damages”.

He did not say whether the event would be rescheduled.

Pyongyang had planned to invite up to 600 tourists every day from South Korea to see the festival, South Korean news agency Yonhap reports.

The agency said South Korean officials were concerned that the cancellation of the festival could lead to contacts between the two Koreas being curtailed.

Relations between the two countries are already strained over Pyongyang’s recent decision to test new, long-range missiles, ending a self-imposed moratorium on such tests.

Froom Joong Ang Daily:

Citing flooding, North pushes back a festival
July 31, 2006

The North Korean Arirang festival, which was to have begun on Aug. 15, was postponed until next spring, according to the president of the Korean American National Coordinating Council. Rain damage in North Korea was cited as the reason for the delay.

Yoon Kil-sang, the president of the council, posted the postponement announcement Friday (in the United States) on Minjok, an Internet news site there. He said he was notified by the North Korean mission to the United Nations of the postponement.

But South Korean groups said they knew nothing of the change of plans. An official at the South Korean committee preparing for a joint celebration of Liberation Day, Aug. 15, said the committee had not been told.

“In order to prepare for the Arirang festival, working-level meetings should have been nearly finished, but we have not heard from the North,” the official said.

Despite the recent North Korean missile test salvo, Seoul said last week that it would allow a private South Korean delegation to participate in the holiday commemoration and the festival.

Chosun Shinbo, published by a pro-Pyongyang group in Japan, reported on Friday that an area where the festival was to be held was hit hard by recent flooding. It said 1,200 trees were down and roads had been destroyed.

The Arirang Festival, which was first held in 2002, is a patriotic festival praising the country’s leaders and system using phalanxes of people with flash cards, dances and circus shows. Last year, in its second staging, 7,000 South Koreans attended. The festival was originally scheduled to run from mid-August to mid-October.

Separately, in a relatively rare admission of problems in paradise, the Chosun Shinbo also reported in detail on the flood damage in the North. Reportedly, the Pyongan provinces near Pyongyang were hit hard, with 10,000 people affected by floods and 30 bridges destroyed. North Hwanghae province, the agricultural center for much of the country, also suffered substantial damage, the newspaper reported.

Last week, the United Nations World Food Program estimated that 60,000 North Koreans had been left homeless and 30,000 hectares of farmland were destroyed in the recent flooding.

Kwon Tae-jin, a researcher for the Korea Rural Economic Institute, said yesterday that it took several years for the North to repair damage from a flood in the mid 1990s and that the recent flood was likely to cut into food production substantially. But he said if paddy walls could be rebuilt quickly and quarantine measures taken to prevent the spread of disease, damage could be minimized.

Posted in Agriculture, Mass games, Tourism | Comments Closed

China #1 food donor to DPRK, #3 in world

Friday, July 21st, 2006

From the Financial Times:

China’s food aid to North Korea soars
By Mure Dickie in Beijing
July 21 2006

China’s soaring cereal shipments to politically isolated North Korea made it the world’s third largest food donor last year, according to the United Nations World Food Programme.

The scale of China’s supplies of wheat, flour and coarse grains highlights the sensitive issue of Beijing’s support for a Pyongyang regime whose recent missile test launches have drawn international opprobrium.

It is likely to spur calls from the US and elsewhere for China to do more to push North Korea to rejoin international talks aimed at ending its nuclear weapons programme.

Pyongyang received more than 90 per cent of the 576,582 tons of cross-border food aid provided by China in 2005, according to data from the WFP’s International Food Aid Information System.

The shipments meant China’s total food donations climbed 260 per cent year-on-year and were surpassed only by those of the US and EU.

Beijing has long been North Korea’s most important supplier of fuel and food, but the World Food Progamme figures suggested a sharp increase in Pyongyang’s reliance on its traditional communist ally.

Chinese officials argue that they have little influence over Pyongyang, as shown by the limited results of their years of effort to persuade North Korean leaders to emulate Beijing’s economic reform and opening policies.

However, food aid from China and South Korea, which supplied nearly 400,000 tons, last year allowed North Korea to order international aid agencies out of the country, curtailing the work of the WFP itself. Seoul recently suspended shipments of humanitarian aid to the North in a response to the missile tests that was also linked by some observers to Pyongyang’s ejection of aid groups. Fears have since grown of another food crisis in North Korea, after typhoons and floods that have wiped out crops in some areas.

Chinese officials yesterday declined to comment on their plans for food donations to North Korea, with one official of the Ministry of Commerce saying: “I can’t tell you. It’s a state secret.”

From the New York Times:

The biggest recipient of [UNWFP aid] was Ethiopia, followed by North Korea and Sudan. The report is at www.wfp.org/interfais.

Posted in Agriculture, China, International trade, UN World Food Program | Comments Closed

Hundreds dead and homeless after flooding

Friday, July 21st, 2006

From the BBC:

About 60,000 people have been left homeless by recent flooding in North Korea, according to the UN food agency.

The floods have also destroyed 30,000 hectares (74,000 acres) of farmland, causing the loss of 100,000 tonnes of food, the World Food Programme said.

On Friday North Korea’s official media admitted that “hundreds of people” were thought to be dead or missing after last week’s torrential rain.

The North already relies on outside aid to support its impoverished people.

Food aid from neighbouring South Korea is currently suspended after talks between the two sides collapsed last week, in the wake of Pyongyang’s 5 July missile tests.

South Korea has also been hit by the seasonal storms, with around 60 people dead or missing after last week’s rains.

Vulnerable population

The World Food Programme said it would initially help 1,300 people in the worst-hit region of South Pyongan, providing 74 tonnes of food.

According to the agency, the government is still trying to assess the situation, but “overall, the updates indicate rising levels of damage”.

North Korea has relied for more than a decade on foreign donations to feed its people.

The WFP began working in the country in the mid 1990s, after about two million people died from famine.

According to the most recent large-scale survey in October 2004, the WFP found that 37% of young children were chronically malnourished, and one-third of mothers were malnourished and anaemic.

from the BBC:

Hundreds are dead or missing in North Korea after days of heavy rain, according to state media.

Torrential rain has swept through the Korean Peninsula in recent days, causing flooding and landslides both sides of the border.

This is the first confirmation from Pyongyang that the severe weather has led to human casualties.

On Wednesday, state news agency KCNA said flooding had caused “tremendous” economic losses.

The Red Cross said in a statement on the same day that 100 people were dead or missing and entire villages had been swept away.

“This heavy rain left hundreds of people dead or missing in many parts of the country,” KCNA said in its latest statement, although it did not give specific figures.

Tens of thousands of houses have been destroyed and infrastructure such as roads and bridges has been badly hit, the agency said.

The worst damage was in central and eastern parts of the country. In South Pyongan Province, about 6,200 houses and 490 public buildings were damaged and large tracts of agricultural land under water, KCNA said.

Damage to farming land would be a blow for North Korea, which has in the past experienced severe food shortages caused by natural disasters and outdated agricultural methods.

Food aid from neighbouring South Korea is currently suspended after talks between the two sides collapsed last week in the wake of Pyongyang’s 5 July missile tests.

South Korea has also been hit by the seasonal storms, with around 60 people dead or missing after days of rain.

From Reuters 7/20/2006 (via Korea Liberator):

Floods could push North Korea back into famine
Jon Herskovitz
7/20/2006

North Korea, constantly battling food shortages, could be tipped into famine after heavy flooding this month in key farming regions hit its potato and rice crops, experts said on Thursday.

Two major storms over the past 10 days have hit the impoverished country with some of the heaviest rainfalls in years just as it faces greater international isolation over missile tests this month and the prospect of less food aid from its major donor, South Korea.

“Conditions have never been that good in North Korea and this could push them over the edge again,” said Peter Beck, an expert in Korean affairs for the International Crisis Group.

“This has increased the probability of a famine returning to North Korea,” he said.

Up to 2.5 million North Koreans, or about 10 percent of its population, died in the 1990s due to famines caused by droughts, flooding and mismanagement of the agriculture sector, the United Nations World Food Program (WFP) said studies have indicated.

Anthony Banbury, director of the WFP’s Regional Bureau for Asia said the floods hurt the potato crop, which is used as a filler until the rice crop comes in.

The floods will also likely hurt rice production and come with the North already short of fertilizer.

“There is a real risk that this combination of factors is going to have a very negative impact on the food security situation in the coming months,” Banbury said by telephone from Bangkok.

He said Pyongyang’s main benefactor China probably shipped North Korea far less food in the first quarter of this year than it did in the same period of last year.

South Korea has sent huge amounts of rice and fertilizer aid to North Korea over the past several years. But it has rejected the North’s latest request for 500,000 tons for rice for this year, unless Pyongyang returns to stalled talks on ending its nuclear weapons programs.

Beck said if North Korea faces a real humanitarian crisis, it would be difficult for South Korea and other countries not to donate food.

Even in a good year, North Korea’s harvest falls about 1 million tons short of its needs, experts have said.

FLOODING IN RICE BASKET

The Red Cross said floods struck North Korea’s South Pyongan province and Hwanghae province. Both surround the capital Pyongyang and are part of the country’s rice basket.

“Extensive areas of arable fields have been inundated, wiping out much of the anticipated harvest,” the International Federation of Red Cross and Red Crescent Societies said this week.

South Korean Unification Minister Lee Jong-seok told reporters on Thursday that Seoul is sticking by its decision to suspend food aid for now. He added South Korea will still push for peaceful engagement with its neighbor.

Ties between the two Koreas, which have warmed considerably in recent years, have been severely tested by the missile tests. North Korea stormed out of a cabinet-level meeting last week after Seoul pressed Pyongyang to explain why it defied international warnings by firing seven missiles on July 5.

Severe winters keep North Korea to a single food producing season that runs from June to October.

Even then, it has a difficult time raising food because of outdated and dilapidated farm equipment, energy shortages and a lack of fertilizer and pesticide.

Posted in Agriculture, UN World Food Program | Comments Closed

ROK suspends aid until missle issue resolved

Saturday, July 8th, 2006

From the Joong Ang Daily:

Flows of aid to stop until crisis abates
South willing to meet North only on missiles, weapons
July 08, 2006

A senior government official said that Seoul would withhold promised aid to the North until the missile crisis is over. That decision did not include a delay in the provision of the last promised fertilizer shipment to North Korea, however; a ship left port yesterday bound for North Korea with the last 20,000 tons of that assistance.

Although the Unification Ministry said that it would not cancel the ministerial talks, which are to be held in Busan from Tuesday through Friday, there is no guarantee that they will actually be held. A former senior ministry official noted that Pyongyang could well boycott the talks themselves in a tit-for-tat response to Seoul’s rejection of working-level military talks it proposed two days before it launched seven missiles on Wednesday. In response to those launches, Korean conservatives have also publicly burned the North Korean flag, another sore point with Pyongyang.

The additional promised 100,000 tons of fertilizer and 500,000 tons of rice aid would not be sent to the North. “We made public what we want to address at this meeting so that the North will hear it,” he said. Echoing the former official’s comments, he added, “It is difficult to say whether the North will actually come.”

While Seoul was pondering how to respond to the missile launches, Pyongyang warned against retaliatory sanctions. Kyodo News Agency reported yesterday that Song Il-ho, the North’s representative for normalization talks with Japan, demanded that Japanese sanctions imposed after the missile tests be lifted. From Yonhap:

North Korea warned on Saturday that Japan could face “stronger physical measures” after it banned a Pyongyang ferry from entering its ports for six months in response to the communist state test-firing seven missiles last week.

Song Il-ho, North Korea’s ambassador in charge of normalizing diplomatic ties with Japan, told a pro-Pyongyang newspaper in Japan that, “If anyone tries to put us under pressure, we will have no choice but to take stronger physical measures.”

Regarding the sudden ban on the North Korean ferry Mangyeongbong 92, he said, “Such (an) anti-humanitarian measure is causing a significant anti-Japanese sentiment among our people,” Song was quoted as saying by the Chosun Sinbo.

Posted in Agriculture, Chongryun, International Aid, Japan, Military, South Korea | Comments Closed

Missle test could affect ROK aid to DPRK

Thursday, July 6th, 2006

From Joong Ang Daily:

One ROK official said yesterday that shipments of 100,000 tons of fertilizer and 500,000 tons of rice, the remainder of assistance promised this year, would be suspended at least temporarily.

“There should be no misunderstanding on this,” the official said. “We told the North that actions would be taken if they fired a missile.”

Other projects, such as manufacturing at the Kaesong Industrial Complex and tours to the resort area of Mount Kumgang, will probably not be touched. Mr. Lee, the Unification Minister, said the two projects had long-term goals and involved private capital, and so were not appropriate instruments of retaliation.

Posted in Agriculture, Foreign direct investment, International Aid, Kaesong Industrial Complex (KIC), South Korea | Comments Closed

Missle test does not stop last shipment of ROK aid

Thursday, July 6th, 2006

from the Joong Ang Daily:

South Korean workers loading fertilizer sacks yesterday at a dock in Ulsan. The ship and another ship from Yeosu, South Jeolla province, will head today to Haeju Port and Nampo Port to transport the last 20,000 tons of 200,000 tons of fertilizers South Korea promised to send to North Korea. Despite North Korea’s missile tests, the South Korean government decided to send the last fertilizers as a humanitrian aid.

Posted in Agriculture, International Aid, Military, Sea shipping, South Korea | Comments Closed

DPRK economic battle-groud between ROK/PRC

Monday, June 26th, 2006

From the Joong Ang Ilbo:

During the JoongAng Ilbo’s 10-day survey of North Korean economic venues in May, North Korea’s high dependence on China was very prominent. Noting that trend, North Korea experts in Seoul recommended that South Korea make efforts to increase its industrial investment in the North to assist the failing economy and allow it to make ends meet. Donating food and other aid, they said, was contrary to the aphorism, “Give a man a fish and he can eat for a day; teach him to fish and he can eat for a lifetime.”

Throughout the trip from May 11-20, North Korean officials proudly displayed a series of automated factories, calling them the models of the reclusive communist country’s modernization. The Daean Friendship Glass Factory was on the tour; officials said China had built the factory at no cost to North Korea. Similarly, production lines in several other plants were overwhelmingly “made in China.”

The March 26 Cable Factory in Pyongyang used Chinese machines; its raw materials appeared to be from China as well. The Pyongyang Cosmetic Factory, which produces cosmetics, toiletries and toothpaste, was also equipped with Chinese machines. The toothpaste production line used equipment from Nanjing Machinery, and the soap production facility was equipped by companies in Quingtao.

At the International Trade Fair in Pyongyang, most booths were set up by Chinese firms. Among the 217 companies that participated in the fair, more than 80 percent were Chinese or joint ventures that included a Chinese partner.

North Korea’s trade is also overwhelmingly skewed toward China: in 2004, nearly half of the North’s trade was with its neighbor. “North Korean industries are 90 percent dependent on China,” said Kim Suk-jin, a North Korean economy researcher at the Korea Institute for Industrial Economics and Trade.

That’s not entirely a bad thing, some economists here said; joining the world economy through China could become a catalyst for reform and opening of the North Korean economy. But they also said they were somewhat uneasy that China’s influence on the Korean Peninsula would become “unnecessarily” strong, reflecting deep-seated Korean unease about foreign influences on the peninsula. Referring to South Korea’s dependency on Japan in the 1960s and 70s for raw materials and facilities, they said that trade with Japan is still skewed in Japan’s favor.

Jeon Jong-mu, the president of HUM Construction Company, was in a party that traveled to North Korea for the international trade show with the journalists. He said North Korean officials had offered him the opportunity to participate in a project to mine aggregate ― rock, gravel and sand ―from the Chongchon River. In return for dredging the river, the offer reportedly went, the North would supply the material to his company.

According to the North Korean officials, the dredging is important to them because frequent flooding of the river damages nearby agricultural areas. “I thought the dredging work would be better for increasing rice production in the North than giving fertilizer,” Mr. Jeon said.

At the Chongsan Cooperative Farm, Ko Myong-hee, its manager, said no South Korean experts have ever visited there but that South Korea has provided it with rice and fertilizer. Lee Kyung-han, the manager of the Korean Standards Association, thought that was a symptom of a problem. He said experts from here should meet with their North Korean counterparts to improve productivity.

Others agreed that for the most part, the South has just been “giving fish” to the North. They said of the $1.6 billion in trade volume between the two Koreas, the South’s rice and fertilizer aid amounts to 35 percent. In the name of helping the poor, sick North Koreans, Seoul just ships rice, fertilizer and medicines.

Both Koreas should learn more about each other, said Kim Dong-ho of the Korea Development Institute. Some North Koreans believed that designating special economic zones would bring large foreign investments instantly, and complained that South Korean businessmen were not making investments in Kaesong Industrial Complex even after visiting the site. He said South Koreans also had a poor understanding of the North’s economy. He blasted the South Korean government and businesses here for making investments based on “rosy anticipations.”

Experts here said the government should focus more on building manufacturing facilities in the North. The March 26 Cable Factory in Pyongyang was modernized by a $2 million donation from North Koreans living overseas, said Kim Sok-nam, the plant’s manager. The Daean Glass Factory was also built with $24 million provided by China.

It would be asking too much, those experts said, to expect South Korean businesses to line up to make investments in the North after watching the woes of the Hyundai Group and the financial problems it faced after making its large investment in Mount Kumgang tourism.

If businessmen are reluctant to invest, perhaps the government should shift tactics. Rather than increase the amount of aid, which cost $365 million in rice and fertilizer alone in 2005, Seoul could offer investment assistance. That $365 million, after all, could have financed 15 Daean Glass Factory plants.

Mr. Lee of the Korean Standards Association proposed that government companies in the South might consider building factories in the North. Others agreed.

“The Kaesong Industrial Complex will take time to settle in,” said Kim Yeon-chul of the Asiatic Research Institute at Korea University. “On the other hand, Pyongyang, Nampo and other important economic venues in the North will be under China’s influence in as little as five years.”

Mr. Kim said South Korea should find ways to exercise its influence in core economic zones of the North. Instead of depending on the pioneer sprits of private firms, a state-run corporation in charge of industrial cooperation with the North should be formed to make profitable investments in the North’s industries, Mr. Kim suggested. “If such a firm existed, the South would have been able to carry out sustainable industrial projects in the North instead of providing light industry materials as aid,” he said. “There is a financial burden at the early stages, but that will eventually be reduced when the investment environment in the North improves, and the state-run corporation will be able to add resources from the international financial market on its own. That is why we need a state company for inter-Korean economic cooperation.”

Posted in Agriculture, China, Economic reform, Foreign direct investment, International trade, South Korea | Comments Closed

Economic aid and the 6/2006 missle test

Thursday, June 22nd, 2006

From the Joong Ang Daily:

In Seoul yesterday, Lee Jong-seok, the unification minister, told the opposition Grand National Party’s interim leader, Kim Young-sun, that it would be “difficult” to continue economic aid to North Korea if it tested a missile.

But he said that Seoul’s action would be “limited sanctions” only. He did not elaborate, except to say that operations at the Kaesong Industrial Complex would not be affected.

North Korea has asked for 450,000 tons of fertilizer this year, of which 150,000 tons has been already been delivered. Another 200,000 tons is being readied for shipment.

A Unification Ministry official said plans to ship the remaining 100,000 tons of fertilizer and shipments of rice could be withheld if the North’s missile lifts off. “We have told the North that there will be consequences and we are firm on this,” the official said.

Posted in Agriculture, Foreign direct investment, International trade, Kaesong Industrial Complex (KIC), Military | Comments Closed

North Korean Economy Watch