Archive for the ‘Statistics’ Category

Latest reunification study puts cost at US$3 trillion

Tuesday, September 14th, 2010

Here is the report (in Korean) on the KFI web page.   Here is that page translated with Google Translate.

The report was also carried in the English language media. 

According to Reuters:

The cost of reunifying the two Koreas, split since shortly after World War Two, would tot up to about 3,500 trillion won ($3 trillion), the Federation of Korean Industries said on Tuesday.

Not one of 20 economists surveyed by the federation expected reunification in the next five years but almost half said it would happen in 10 to 20 years.

Nearly half also said the largest cost associated with reunification would be in efforts to cut the wealth gap between the wealthy South and the impoverished North.

“The costs to minimize the gap between South and North Korea over the long-term are expected to be greater than the initial cost of reunification,” the federation said in its report.

South Koreans earn an average about $19,230 a year while North Koreans earned about $1,065 in 2008, according to South Korea’s Unification Ministry.

Concerns about the costs prompted South Korean President Lee Myung-bak to propose a “reunification tax” last month.

“In the short term the shock to the Korean economy will be great but in the long-term reunification will be positive,” the survey said.

The two Koreas are still technically at war as hostilities in 1950-53 Korean War conflict ended in a truce, not a peace treaty.

Yonhap also covered the report:

Most of the experts also said the divided Koreas will likely be reunified within the next 30 years, according to the survey conducted by the Federation of Korean Industries (FKI), the largest business lobby in South Korea.

The questions raised by the FKI came after President Lee Myung-bak proposed introducing a new “unification tax,” which he said will help lessen the financial burden of reuniting with the communist North.

Of the 20 experts surveyed, 63.1 percent said the reunification of the two Koreas will cost more than that of Germany, about $3 trillion. The amount includes the initial costs of stabilizing the nation following a reunification, but also the costs of eradicating any economic and social disparities between the two Koreas.

Half of the respondents said the country needed to begin discussing ways to pay such enormous costs of reunification, while 20 percent said such discussions must begin immediately.

“It also showed every respondent saw the need for such discussions as no one answered such discussions were unnecessary,” FKI said in a press release.

None of the respondents said the reunification will take place within the next five years, but 95 percent, or 19 out of the people surveyed, said the two Koreas will likely be unified before 2040.

They all agreed the unification with North Korea will be a great burden on the South Korean economy in its near future, but a great opportunity in the long term.

Here are links to previous posts on this topic.

Read the full stories here:
The cost of reunifying Korea? About $3 trillion
Reuters
9/14/2010

Experts say Korean unification will cost over US$3 trillion
Yonhap
9/14/2010

Share

US offers flood aid to DPRK (2010)

Thursday, September 2nd, 2010

According to the Choson Ilbo:

The United States is offering $750,000 in emergency aid to North Korea to help aid recovery from devastating floods.

The U.S. Special Envoy for North Korea Human Rights, Robert King, told VOA Wednesday that the money will be given to three U.S. non-governmental organizations — Samaritan’s Purse, Global Resource Services, and Mercy Corps.

He said the organizations will use the money primarily for medical supplies and will fly the aid into Pyongyang beginning later this week.

Read the full story here:
U.S. Offers Flood Aid to N.Korea
Choson Ilbo
9/2/2010

Share

U.N. plans to spend $290M on aid to DPRK

Wednesday, September 1st, 2010

According to Fox News:

As the xenophobic North Korean regime of Kim Jong Il appears to be inching toward a murky transition of power, the United Nations is laying plans to spend more than $290 million on a welter of programs in the communist state—including a scheme to produce an algae sold in the U.S. as tropical fish food–provided someone else comes up with much of the money.

The money is by no means a sure thing, especially if the unpredictable North Korean dictator rejects any of the stringent oversight conditions attached to money from some of the important donors the U.N. hopes will chip in.

The U.N. plans, however, demonstrate the determination of the world organization and its most influential backers—notably, the U.S. government, which is the biggest single financial supporter of most U.N. aid and development organizations– to keep dangling carrots of assistance before the North Korean regime, even at its most provocative.

The U.N. plans persist despite such incidents as the March 26 sinking of a South Korean warship, the Cheonan, most likely by a North Korean submarine, and the regime’s continued nuclear saber-rattling, especially toward South Korea. Just last month, for example, North Korea threatened a “powerful nuclear deterrence” in response to a joint U.S.-South Korean antisubmarine exercise prompted by the Cheonan incident.

All those uncertainties fade, however, alongside a bigger one: rumors that the ailing and reclusive Kim, who returned on Sunday from his second trip to China in three months, hopes to install his youngest son, Kim Jong-Un, as his successor– a process that could already be well under way.

Whatever the outcome of the succession process, at least a dozen U.N. agencies and offices clearly hope to be deeply involved over the next five years in North Korea’s national welfare, in areas ranging from health care and education to sanitation and civil service training, “strengthening knowledge networks” in agriculture, alternate energy development, and transportation, not to mention improving North Korean export trade.

A significant number of the efforts will also go to bolstering the capabilities of the North Korean government, which is not surprising, since they are prepared in close collaboration with various departments of the ruling apparatus. These efforts include a strong focus on health care delivery and education (already problematic in a totalitarian state burdened with a smothering cult of the personality).

But they also include more ambiguous activities in a brutal and thorough-going dictatorship such as North Korea. Among them: coordinating “national knowledge networks and practices,” “management and specialist training,” and—in a country that regularly threatens its neighbors with nuclear and conventional war—a “disaster preparedness and response strategy” spurred by North Korea’s famines and floods. All of these activities are depicted by the U.N. documents as being strictly humanitarian in nature.

The array of plans is laid out in schematic form in a 22-page “United Nations Strategic Framework Results Matrix” for North Korea, which is being presented to members of the supervisory Executive Board of the United Nations Development Program (UNDP), the U.N.’s principal development coordinating agency, at a meeting in New York this week.

Click here for the matrix.

The framework is buttressed by UNDP’s own country program for North Korea, which is a $38.3 million portion of the larger total. Both documents cover the period from 2011 to 2015.

Click here for the UNDP Country Program.

The UNDP contribution is noteworthy, among other things, for the fact that most of the money–$34 million—can be counted on to exist. That amount is described in the annex to the country program as coming from “regular” UNDP resources, meaning its core budget. Only $4 million of UNDP’s spending in North Korea comes from other contributions.

A UNDP spokesman underlined—as does the country program—the extent to which UNDP claims to be adhering to newly strengthened safeguards in relation to its North Korean program.

UNDP activities in North Korea exploded into scandal in 2007, leading to suspension of its program until 2009. Among other things, an independent investigative panel subsequently determined that UNDP had wrongfully provided millions in hard currency to the North Korean regime, ignored U.N. Security Council sanctions in passing on dual-use equipment that could conceivably be used in the country’s nuclear program, and allowed North Korean government employees to fill key positions.

In the current program, UNDP emphasizes that it has revamped its hiring and currency policies, but adds that “a proper monitoring and evaluation plan is necessary to ensure accountability and transparency in project implementation.” The careful wording indicates that at least some of that planning remains to be done.

While UNDP has actual cash to spend, however, nearly $119 million of some $128 million that UNICEF plans to spend in North Korea over the next four years—about 93 per cent—is expected to come from outside donors, according to UNICEF’s own country plan for North Korea. That is, as UNICEF delicately puts it, “subject to the availability of specific purpose contributions” from those willing to put up the money.

Click here for the UNICEF Country Program.

Much of that volunteer UNICEF money would go toward building up North Korea’s grievously neglected clinical health care facilities, bolstering maternal and early childhood care, early childhood education and large-scale vaccination and medication campaigns to fight AIDs, malaria and tuberculosis.

Most of the anti-disease money is supposed to come from the Global Fund to Fight AIDS, Tuberculosis and Malaria (GFATM), a Geneva-based institution financed in part of Microsoft Found Bill Gates and his wife, Melinda. Nowadays, the U.S. government contributes 28 percent of the GFATM’s funds.

And so far, GFATM has only handed over $12.45 million to UNICEF, according to the U.N. agency’s spokesman, Chris de Bono, for its anti-malarial and TV campaign. (According to GFATM’s website, UNICEF has received $18.35 million, out of about $31.5 million approved so far.) According to de Bono, another $56 million is due to come from GFATM starting in 2013, provided a “number of conditions” laid down by the Global Fund are met.

Those conditions, according to Global Fund communications director Jon Liden, largely bear on whether the money is meaning the health goals set by the donors. Among them, for example, is a commitment to cut in half the North Korean death rate from malaria by 2013, using the death rate in 2007 as a baseline (0.31 per 1,000 people, vs. 0.62.).

Click here for Global Fund report on North Korea.

Failure to meet the targets could result in reduced funding for the next three years, or a cutoff.

The additional “other” revenues required by UNICEF for 2011-2015 will be raised “as we get into our program,” according to spokesman De Bono, “as is our usual practice.”

The same apparently applies to the bulk of $101 million or so to be spent in North Korea by the World Health Organization (WHO). WHO activities include supporting UNICEF on the malaria and TB campaigns, but also building up North Korean health care, supplying equipment and drugs, and helping institute telemedicine.

But WHO’s own “country cooperation strategy” for North Korea extends only to 2013, meaning all of its fundraising plans for the 2011-2015 have not yet been written.

In the current strategy document, completed in 2009, WHO notes that it will need to use about $3 million of its regular budget and mobilize $20 million annually from voluntary contributions to meet North Koreas needs. This, the document says, “will be a challenging task.”

Just how challenging, perhaps, can be seen in the case of the struggling World Food Program (WFP), whose efforts are outlined in the U.N. Strategic Framework as trying to provide “fortified locally produced nutritious foods” to young children.

In fact, WFP has been running a dwindling operation to provide emergency food to many more of North Korea’s desperately hungry population. But donors stampeded away from the WFP fundraising effort, especially after the Kim regime detonated a nuclear device last year, and questions were raised about whether the government was profiting from the food effort.

Questioned Raised About Who Profits From Aid to North Korea

Currently, WFP has dialed back the goal of its emergency food aid operation from $500 million in 2008-2009 to $91 million.

In the 2011-2015 strategic framework, UNDP and the Rome-based Food and Agriculture Organization will be working on amplifying North Korea’s meager food supply, enhancing, among other things, areas where “double-cropping” is possible, and adding to fruit orchards and livestock herds. UNDP’s project documents say it will spend $13 million on “seed production in alternative cereals” –defined as wheat, barley, soybeans, potatoes—as well as “wild fruit processing and protein-rich production.”

Some of UNDP’s protein projects, however, seem decidedly outside the mainstream, or even bizarre. In its program document, for example, UNDP says it will “support pilot production of protein-rich plans, such as spirulina and pistia statiotes, which will supply nutrients.”

Spirulina is an algae that has gained a reputation in alternative food circles as a diet supplement. In the U.S., health food websites offer a powdered form for anywhere from $24 to $33 per pound—hardly a cheap source of protein for starving people. It is also sold in the U.S. as tropical fish food. But whether North Korea needs a “pilot project” to produce spirulina is debatable.

As far back as October, 2003, a North Korean news agency declared that the Kim government’s botanical institute had, “after years of researches [sic] completed the method of artificially cultivating spirulina at low cost.” The agency added, “It can be cultivated easily in greenhouses too.” Indeed, spirulina is currently listed as a marketable product on a North Korean export website. And on Aug. 6, a Chinese news agency announced that North Korean researchers had created a new spirulina vaccination “which prevents and treats domestic animals’ diseases and increases their weight.” Whether there was any independent verification of that claim was not mentioned in the news article.

As for pistia statiotes, also known as water lettuce, according to the website of the Center for Aquatic and Invasive Plants at the University of Florida, the floating plant is a fast-growing weed, which can block waterways, deplete oxygen supplies in water, and threaten fish populations. It is described as an obnoxious invader in West Africa and Australia. While pistia can survive in temperate climates, it abhors cold and thrives mainly in tropical and semi-tropical environments—not exactly what North Korea is known for.

One of the few places where it is cultivated for its nutritional value is apparently southern China, where it is sometimes used as a supplemental carp food.

In a country full of starving or semi-starving people, of course, almost anything may be viewed as edible. But in the U.N.’s renewed desire to pour money into North Korea, the value of at least some of the projects it is pushing for approval may be hard to swallow.

Read the full story here:
U.N. Lays Plans to Spend $290M on Aid to North Korea
Fox News
George Russell
9/1/2010

Share

South Korean religious organizations donate flour to DPRK

Friday, August 27th, 2010

According to Yonhap:

A joint delegation of five major religious organizations in South Korea traveled to North Korea Friday to deliver food aid, the second civilian visit to the communist state since Seoul imposed a travel ban in May.

The nine-member delegation of the Catholic, Protestant, Cheondo, Buddhist and Won-Buddhist orders drove to the North from this western border town of Paju, Gyeonggi Province, accompanied by about a dozen trucks carrying 300 tons of flour.

The 250 million won (US$209,170) worth of aid was the second inter-Korean assistance since Seoul imposed a North Korea travel ban in May in protest of the sinking of a South Korean warship two months earlier. North Korea denied involvement in the sinking that killed 46 sailors.

Seoul allowed the first civilian visit on Aug. 17, in which an aid organization delivered 400 million won worth of anti-malaria aid to North Korea.

“The denuclearization of the Korean Peninsula is important, but the lives of the people on the Korean Peninsula take priority over any other issue,” the group said in a joint statement at a ceremony attended by some 150 people, ahead of its departure. “We religious communities from the left and the right are taking a step toward opening the door for reconciliation and peace in the inter-Korean relations.”

During its one-day visit, the delegation will deliver the flour to Kaesong, just north of the inter-Korean border, which will be distributed to inhabitants in the border town and counties in North Hwanghae Province.

Read the full story below:
S. Korea’s pan-religious delegation travels to N. Korea with flour aid
Yonhap
8/27/2010

Share

World Food Program donations to DPRK shrink

Thursday, August 26th, 2010

According toYonhap:

The World Food Program is struggling to keep its project of feeding malnourished children in North Korea from shrinking, its director for the communist state said in an interview on Thursday.

Torben Due, who represents the WFP office in Pyongyang, said his organization set out to raise US$500 million two years ago to provide basic nutrition for North Korean children.

In reality, what the WFP ended up with was $100 million. Due said his team in Pyongyang has re-designed its operation for the next two years to value at $96 million because of grim expectations for funding.

“The most difficult obstacle is that we don’t get the resources we need. We don’t get the money we need,” said Due, who was in Seoul this week to meet with government officials to discuss food needs in North Korea.

“We had to reduce (our program) because we could see we would not get the money. We had to design a program small and realistic in terms of what we would be able to do,” he said.

The WFP is a U.N. organization heavily dependent on donation. In North Korea, it supplies cereal-type food mixed with soybeans, milk powder, sugar and others rich in protein and minerals, specifically aimed to fight nutritional deficiencies in growing children.

“The child who is chronically malnourished will be damaged in a way that lasts a whole life. He will be physically stunted, and mental and intellectual development will also be harmed,” Due said, adding North Korean children “particularly” like biscuits.

Due said political tensions appear to be one reason why the WFP operation is not receiving enough donations for North Korea, which has conducted two nuclear tests since 2006, defying warnings.

“This is a pure humanitarian issue. Children suffer more than anybody else if there is no food,” he said, adding that the WFP office in Pyongyang had to cut the number of counties it was supporting from 130 to 65 this year.

“You are talking about roughly a third of the population that has problems with insufficient food intake, both in terms of quantity and quality. What we’re providing is supplement for a small part of the population. The problem is much bigger than what the WFP program is about,” he said.

North Korea has a population of about 24 million. Due said quantity matters as much as quality when it comes to helping North Korean children.

“If you have a country with 5 million children, if you want to contribute and solve the problem, you must think in terms of what is needed,” he said.

Due declined to disclose his discussions with the South Korean government officials he met here. South Korea has suspended sending large-scale food aid to North Korea unless Pyongyang moves to denuclearize under a multinational agreement.

North Korea has relied on international handouts since it suffered massive famine in the 1990s, when as many as 2 million people reportedly died.

The country is vulnerable to natural disasters. Earlier this month, heavy rains along its border with China raised the level of rivers and led to the evacuation of 23,000 North Koreans, Due said.

“In the areas affected, it’s quite devastating,” he said. But Due said North Korea had yet to appeal for international assistance as “the impact is very limited” and “localized.”

“The government can probably handle it themselves. We are, along with the Red Cross, providing some items,” including 1,300 tons of food, he said, adding he had no knowledge of human losses yet.

Earlier Thursday, South Korea’s Red Cross proposed sending aid to North Korea to help it recover from the flooding.

Read the full story here:
WFP feeding fewer N. Korean children as donation shrinks: director
Yonhap
Sam Kim
8/26/2010

Share

Chinese investment blurb

Monday, August 23rd, 2010

According to an article in the Korea Times:

Approximately 100 small Chinese companies out of 150 that have investments in North Korea are based in Jilin and Liaoning Provinces near the northeastern border with the North.

Read the full story here:
Investments in NK limit China’s policy choices
Korea Times
Kang Hyun-kyung
8/20/2010

Share

First half of 2010 sees record inter-Korean trade

Thursday, August 19th, 2010

Institute for Far Eastern Studies (IFES)
NK Brief No 10-08-19-1
8/19/2010

Despite the ongoing inter-Korean tensions, and the stand-off over the Cheonan incident in particular, the first two quarters of 2010 saw an all-time record of 980 million USD-worth of inter-Korean exchange. However, with the South Korean government ceasing all inter-Korean trade outside of the Kaesong Industrial Complex in reaction to the investigation results finding North Korea responsible for the sinking of the South Korean naval corvette Cheonan, cross-border trade between the North and South has fallen and is expected to remain approximately 30 percent lower during the second half of the year.

According to South Korean customs officials, inter-Korean trade in the first half of the year was worth 983.23 million USD, with ROK imports worth 430.48 million USD and exports worth 552.75 million USD; a 122.27 million USD trade surplus. This is a 52.4 percent rise over last year’s first two quarters of trade, worth 645 million USD. In the first six months of 2009, South Korea exported 259.91 million USD (66%)-worth of product, and imported 385.1 million USD (44%) in goods. This year’s trade volume was nearly 100 million USD higher than the previous record, set in 2008, of 884.97 million USD. It was also around six times more than the 161.63 million USD recorded in 1999, when inter-Korean trade first became significant.

In 1999, North-South trade totaled 328.65 million USD. Despite rocky inter-Korean relations at the time, cross-border trade continued to grow, and with the expansion of the Kaesong Industrial Complex and other projects, first topped one billion USD in 2005, squeezing above the marker at 1.08872 billion USD. This growth continued in the latter half of the decade, hitting nearly 1.38 billion USD in 2006, 1.795 billion USD in 2007, and 1.82 billion USD in 2008. Repercussions from the North’s second nuclear test in 2009 caused trade to fall off to 1.666 billion USD in 2009.

On May 24, the South Korean government announced that all inter-Korean trade outside of the Kaesong Industrial Complex would be halted due to North Korea’s sinking of the Cheonan. If this trade ban continues, cross-border trade during the second half of the year is expected to be down 30 percent. The inter-Korean project in Kaesong makes up 70 percent of inter-Korean trade, so that other individual projects add up to only about one third. It is the suspension of these projects that is lowering North-South exchanges by 30 percent.

Actually, there was a decline in trade during the first six months of the year. In June, exports totaled 56.88 million USD, while imports were worth 66.18 million USD (total: 123.06 USD). This is 21 percent (33.31 million USD) less than in May. Exports were down 4 percent and imports dropped by 32 percent. Compared to trade prior to the ROK government’s measures, the trade of electric and electronic goods, transportation, and other capital goods actually raised from 19.31 million USD to 21.21 million USD, while mined goods and other consumables dropped from 76.81 million USD to 36.86 million USD.

Share

DPRK’s external debt

Thursday, August 19th, 2010

According to the Korea Herald:

North Korea watchers in the West estimate the North’s outstanding debts to be around $12 billion, two thirds of which is owed to former communist states.

In 2008, a ruling Grand National Party lawmaker had suggested allowing North Korea to pay back its loans from South Korea with mineral resources or development rights.

Rep. Kwon Young-se said during a parliamentary audit two years ago that North Korea’s debts amount to $18 billion, nearly as much as the country’s economic output in the year 2007.

About five percent of it, or $920 million, was borrowed from South Korea.

“Loans for North Korea’s economic development from socialist countries in the 1950s and 60s, and Western nations in the 1970s have accumulated with overdue interest on outstanding debts,” Kwon said.

“North Korea’s per capita debt is around 930,000 won, slightly less than the country’s annual per capita income of 1.07 million won.”

Last year, a top South Korean government official said Seoul could pay for tours to North Korea with commodities instead of cash.

He said the issue of paying cash to North Korea had to be reconsidered based on the U.N. Security Council Resolution 1874, which slapped tightened sanctions on the reclusive state as punishment for its nuclear and missile programs.

The crossborder tours have been suspended for the past two years after a South Korean tourist was shot to death in the North’s mountain resort.

Read the full sotry here:
North Korea cornered with snowballing debts
Korea Herald
Kim So-hyun
8/17/2010

Share

DPRK asks Hungary to write off debt

Wednesday, August 18th, 2010

According to the Financial Times:

Hungary has revealed that it was asked by North Korea to write-off more than 90 per cent of its outstanding debt in the latest indication of the secretive totalitarian regime’s financial distress.

Hungary’s economy ministry told the Financial Times that North Korean negotiators had tabled the request in November 2008 during a meeting in Pyongyang.

“They asked [us] to take good consideration of the Democratic People’s Republic of Korea’s current economic difficulties and asked for cancellation of over 90 per cent of the total debt amount,” the ministry said.

The revelation follows a report in the FT last week that Pyongyang had asked the Czech Republic to write-off 95 per cent of its Kc186m ($10m) debt.

The cash-strapped totalitarian state offered to settle 5 per cent of the debt in ginseng, a root that is said to combat lethargy and impotence.

North Korea appears to be struggling to meet its financial obligations owing to the pressures of a moribund domestic economy and international trade sanctions imposed over its nuclear weapons programme.

Following the mysterious sinking of a South Korean warship in March, Washington vowed to further crack down on North Korea’s international financing, money laundering and narcotics operations.

Pyongyang’s outstanding debts are estimated at about $12bn, about two-thirds of which is owed to former communist states.

Its Hungarian debt emerged from a trade surplus between the two countries, mostly in the period before the fall of the Iron Curtain, an official said.

The total debt is 29.6m clearing roubles – an accounting unit used in the former Soviet Bloc.

Hungary said North Korea had agreed in principle to pay the debt in cash, with partial cancellation.

Details such as the clearing-rouble conversion rate and the size of the cancellation must still be settled, however.

Officials were unable to say when the negotiations would resume. Ginseng was not mentioned during previous talks.

Read the full sotry here:
Hungary reveals North Korean debt request
Financial Times
Chris Bryant
8/18/2010

Share

DPRK-PRC trade statistics

Monday, August 16th, 2010

According to the Daily NK:

Trade between North Korea and China for the first half of 2010 was $1.29 billion, a 16.8% increase over the corresponding period of last year.

Using Chinese customs statistics, the South Korean embassy in China revealed the details of Sino-North Korean trade on Monday. According to the statistics, North Korean exports to China fell by 1.1% in the same period to $350 million, while imports from China increased by 25.2% to $940 million.

As a result, North Korea’s trade deficit with China was $590 million, a 48.5% increase over the previous year.

According to the statistics, North Korea imported 140,000 tons of food, 300,000 tons of oil and 100,000 tons of fertilizer during the period. Notably, flour imports rose by 383%.

Reduced inter-Korean trade and other economic exchanges following the Cheonan sinking and reduced international humanitarian aid due to UN sanctions were two of the most significant causes of the burgeoning reliance upon China.

Read the full story here:
Sino-North Korean Trade Deficit Rises
Daily NK
8/16/2010

Share