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U.N. relief agency considers stepping up food aid to N. Korea: report

Saturday, July 21st, 2007

Yonhap
7/21/2007

A U.N. relief official said North Korea currently receives only a small portion of the food aid it needs and his agency is considering stepping up aid to feed almost 2 million more people, a U.S. government-funded radio station reported Saturday.

In an interview reaching here Saturday through the Korean version of the VOA’s Web site, Robin Lodge, a spokesperson for the World Food Program (WFP), said international relief agencies, including the Office of Food for Peace, recently gathered in Rome, Italy and discussed the possibility of sending the communist state additional food that could feed 1.9 million people there.

Lodge was also quoted by the U.S.-funded broadcaster as saying North Korea currently receives from his agency only about 10 percent of what it needs to feed the 7 million believed to be suffering from starvation.

North Korea does not release any official data on its food situation but many outsiders believe that more than 2 million people died when famine swept through the country in the late 1990s.

Good Friends, a Seoul-based relief group dedicated to North Korea, said in its latest weekly newsletter on Wednesday that a growing number of North Koreans died of starvation or hunger-caused diseases recently, especially in remote areas.

“Famine-driven deaths began to occur across North Korea in late June,” the report said. “In some cities and counties in the provinces of North Pyongan, Ryanggang, Jagang and South and North Hamkyong, the number of deaths is on the increase daily.”

The reports contradict widespread reports that the North’s food situation has improved significantly in recent years.

On Friday, Seoul started sending 50,000 tons of rice aid to North Korea overland as part of its promised loan of 400,000 tons of rice aid.

Over the next five weeks, the South is to deliver 30,000 tons of rice to the North via a road passing through the border town of Kaesong, while another 20,000 tons will be transported across a paved road on the east coast. South Korea is delivering 350,000 tons of rice to the communist country by sea.

South Korea resumed shipping rice aid to North Korea in late June after more than a one-year hiatus, as the North shut down its nuclear facilities in the first step toward eventual nuclear dismantlement.

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Posted in Foreign aid statistics, Good Friends, International Aid, UN World Food Program | Comments Closed

Foreign Sales of Drugs Decline, North Korean Citizens Surface as Consumers

Tuesday, July 17th, 2007

Daily NK
Kim Min Se
7/17/2007

Only six, seven years ago, drugs inside North Korea secretly circulated among a portion of the upper-level officials and the specially affluent class, such as Chinese emigrants. Opium or heroine, produced in North Korea, were sold abroad to make foreign currency.

North Korea produces and exports drugs at the national level. Events where North Korean vessels and diplomats, through drug transport or charges of sales, are prosecuted by third-party countries is common. South Korean government, in the midst of North Korea’s breakdown in foreign currency supply in 1998, has deduced at one point that foreign-currency earners through illicit drug sales and illegal activities had amassed 100 million dollars.

From year 1970, North Korea’s drug sales, which secretly began on a small-scale, by the decree of Chairperson Kim Jong Il, rose in reality as a national enterprise and began official productions. In the August of same year, Chairperson Kim named the opium seed cultivation work as “White Bellflower Business.”

Further, he bestowed the appellation, “White Bellflower Hero,” to the person who sold over 1 million dollars of drugs, and ordered, “For the acquisition of foreign currency, export opium on a large scale (information reported by the National Intelligence Service, Lee Jong Chan former Chair at the inspection of National Intelligence Service on November 6, 1998).” As for North Korea’s drug production factories, the Nanam Pharmaceutical Factory in Chongjin and Hamheung’s Heungnam Pharmaceutical Factory are well-known.

Drugs, which are costly to average civilians preoccupied with making a living, were considered as a portion of the special class’ acts of aberration. The North Korean government, besides the foreign-currency earners, strictly inspected acts of drug circulations, so one could not even dream about this as a means of making money.

After the collapse of national provisions, drug sales also increase.

However, the food shortage brought a huge change to North Korea’s drug production and circulation. When the planned-economy system, where the nation was in charge of the provisions, broke down, the citizens started doing sales for survival. In North Korea where means of making money are not abundant, the place where one can smell money is at the market.

The revitalization of the jangmadang (black market) and general markets gave citizens in the cities a certain of opportunity to make a living. Further, they learned the mentality that money is best for survival. The custom began to spread where the citizens went through thick and thin if it meant working at a money-making job. Drugs infiltrated this opening.

Drugs that are most highly circulated in North Korea are philopon and heroine. The center of philipon productions is in Hamheung, South Hamkyung.

Hamheung is considered as a chemical industry synthesis base within North Korea where companies related to the chemistry branch can be abundantly found.

The representative place is the 2.8 Vinyl Chemical Complexes. Besides this, there are Hamheung Chemical Industry College (in its 5th year), the Heungnam Fertilizer Factory, and the Heungnam Pharmaceutical Factory, which are the providers of North Korea’s top chemical researchers.

The reason why Hamheung became the main place of philopon production

The raw materials for the vinyl complex are limestones of the Ounpo Mine in Hongwon-gun and the raw materials of the Heungnam Fertilizer Factory are ramrods of Huhcheon-gun and emulsified steel of the Manduk Mine.

For this reason, many chemistry-related researchers and workers are residing in Hamheung. The problem is that after the food provisions were cut off, they turned their eyes to Philopon production when making a living became difficult.

They can produce high-quality philopon, if they just have a good laboratory and raw materials. In particular, outside demand for Philopon was explosive in early 2000, when there were no huge restraints in the North Korea-Japanese trade and when the North Korea-Chinese trade became active.

Hamheung citizen Choi Myung Gil (pseudonym) said, “In the initial stage, if the businessmen provided raw materials and funds to researchers, they made high-quality Philipon and kept half of the profit. Do poor researchers have any money? They made them because businessmen received orders from China and Japan and sold them. Also, there was nothing to fear because bribes kept the mouths of the National Security Agency and the Social Safety Agency shut. There is nothing one cannot do with money, so what kind of a researcher would crush such a money-making scheme?”

Mr. Choi said, “The cost of production of philopon is no more than 3,000 dollars per kilogram in North Korea. If one sells this, he or she can receive 6,000 dollars on the spot. Manufactured Philopon can be handed over to middlemen or if it directly enters Shinuiju and is given to dealers, it can bring in from 9,000 to 10,000 dollars.”

He said, “My friend, who worked as a researcher in the Hamheung Branch Laboratory, also lived poorly, but became wealthy overnight by making philopon. I also am benefitting from him. There are many people who have become wealthy in Hamheung by making philopon.”

Ultimately, when the North Korea-Chinese traders bring the raw materials from China, the Hamheung chemical researchers make the philopon and the merchants take these to China for sale. In this process, the Chinese crime syndicate have also intervened.

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Posted in Black markets, China, Civil society, Economic reform, Heung Nam Pharmaceutical Company, International trade, Nanam Pharmaceutical Factory, Trade Statistics | Comments Closed

Oil Is Shipped to North Korea Under Nuclear Shutdown Pact

Friday, July 13th, 2007

NY Times
CHOE SANG-HUN
7/13/2007

A South Korean ship loaded with 6,200 tons of heavy fuel oil left for North Korea on Thursday under an agreement intended to end the North’s nuclear program.

The United Nations’ chief nuclear inspector said the North was expected to begin shutting down its main nuclear facilities early next week, after four and a half years of operation, during which time enough plutonium was thought to have been produced to make several atomic bombs.

The ship is expected to arrive at Sonbong, a port in northeastern North Korea, on Saturday, the same day a team of inspectors from the United Nations International Atomic Energy Agency is scheduled to arrive in the North to monitor and verify the shutdown.

Mohamed ElBaradei, the director general of the atomic agency, told reporters in Seoul that shutting down five nuclear facilities in Yongbyon, 62 miles north of Pyongyang, the capital, would not be difficult and should be completed “within maybe a month or so.” His agency and North Korea have already agreed on the procedures.

The shutdown would be significant because it would halt the North’s only declared program for producing fuel that can be used in nuclear weapons. The five facilities to be frozen in Yongbyon, including the country’s sole operating nuclear reactor and a radiochemical laboratory, can yield more than 13 pounds of plutonium a year, enough for one atomic bomb, according to experts.

But the steps to be taken after the initial freeze of the nuclear program remain “very much open questions,” Dr. ElBaradei said. Those include whether North Korea will provide the agency with a complete inventory of its nuclear materials, and when it might return to the Nuclear Nonproliferation Treaty.

“It’s going to be a very long process,” he said. “It’s going to be a complicated process. How smoothly the rest of the operation will go very much depends on how progress will be made in six-party talks.”

Chief envoys to the six-nation nuclear talks will meet in Beijing next Wednesday and Thursday, the Chinese Foreign Ministry said. The envoys, gathering for the first talks since March, were expected to discuss moves beyond the reactor shutdown.

North Korea agreed to shut down its Yongbyon facilities in a February agreement with the United States, South Korea, China, Russia and Japan. The deal called for shipping 50,000 tons of fuel oil to North Korea, and South Korea volunteered.

It plans to complete shipping the oil by early August, starting with the installment on Thursday.

North Korea indicated last week that it would undertake the long-delayed shutdown after the first shipment arrived.

When United Nations inspectors return to Yongbyon, they will face the same problems they had faced there before they were expelled in late 2002. They will put in seals, install cameras and leave monitors to ensure that the facilities remain shut. But they will not be allowed to collect samples or access North Korean data, much less travel around the country, to determine how much nuclear material North Korea has produced in Yongbyon or elsewhere.

The five-megawatt reactor in Yongbyon began operating in the mid-1980s. When suspicions about North Korea’s nuclear activities emerged in the early 1990s, a key dispute was how much plutonium had been produced at Yongbyon until then — 90 grams, about 3 ounces, as North Korea reported to the I.A.E.A., or up to 10 kilograms, about 22 pounds, as the agency suspected.

The dispute has never been resolved, although North Korea agreed to suspend operations at Yongbyon in an agreement with the United States in 1994. The accord collapsed in late 2002, when North Korea expelled the United Nations inspectors and restarted the Yongbyon operation.

North Korea has since claimed to have taken spent fuel unloaded from the reactor and reprocessed it into plutonium. Last October, it conducted its first nuclear test.

“It remains an unanswered question: how much plutonium has North Korea so far produced?” said Lee Un-chul, a nuclear scientist at Seoul National University. “North Korea won’t easily give up its operational data.”

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Posted in Energy, Foreign aid statistics, International trade, Oil, Rason Economic and Trade Zone (Rajin-Sonbong), South Korea | Comments Closed

The North Korean Rice Price Narrowly Increased after the Spring Shortage

Thursday, July 12th, 2007

Daily NK
Kim Young Jin
7/12/2007

prices.jpgThe North Korean jangmadang’s (market) rice price has narrowly increased after the spring shortage season.

As a result of DailyNK’s investigation of price levels in Northern cities of North Korea at the end of June and beginning of July, the price of North Korean rice is 900 won per kilogram which has increased 80 won compared to its price at the end of March.

At the jangmadang in Shinuiju, North Pyongan, the price of rice, compared to three months ago, has been sold at a 120 won higher price at 980 won. North Korea’s spring shortage season is around March to May before the barley harvest, after the passage of spring.

The reason why the price of rice has shown a narrow upward tendency of 100 won domestically is that along with the effects of the spring shortage season, the nationwide “farm supporting combat” was implemented last May. During the farm supporting period, the jangmadang was closed out, so it became difficult to obtain rice.

Further, with the delay in South Korea’s support of 40,000 tons of rice to North Korea, the increase in the price of rice seems to have been fueled. The price of South Korean rice, compared to the end of March, increased over 150 won. South Korean rice was sold at the increased price of 1,100 in the Shinuiju region.

Along with the increase in the price of rice, the exchange rate seems to show a slight increase as well. In Hoiryeong, it increased by 50 won, compared to the end of March, according to the basis of 3,100 won per dollar. The Chinese Yuan was sold at a 390 won line, having increased 20 won.

Besides this, the staple of North Korea’s lower-class, corn, compared to the end of March, increased by approximately 80 won to 450 won per kilogram. With the rise in the price of rice, the demand for corn as a substitute ration seems to have increased as a result. Frozen pollack, which cost 4,000 won per one, went down to 3,500 won.

Chinese-made shoes, compared to March, is being sold for 7,000 won per pair, having decreased around 5,000 won. In addition, the price of Chinese industrial products as a whole is showing a decline.

Due to North Korean merchants who received goods through Korean-Chinese peddlers in the past going over to China themselves and obtaining goods through dumping, the drop in prices has been continuing.

Pork (2,300 won per kg) or cabbage (300 won per kg) and the price of other vegetables, compared to the end of March, declined by 200 won. In the case of fruits, the price of apples skyrocketed by 1,400 won from three months ago to 2,900 won per kilogram.

Also, among North Korean cigarettes, a product with the brand “Dog” recently surfaced. The price is the same as “Sunbong” at 1,000 won. The representative foreign brand “Craven (called ‘Cat’ in North Korea)” narrowly declined to 1,300 won.

Cost of DPRK grains up as lean season continues
Institute for Far Eastern Studies (IFES)
NK Brief No. 07-7-16-1
7/16/007

The results of a general survey of market prices in the northern region of North Korea carried out by the “Daily NK” show that grain prices continue to rise. The survey, taken from the end of June to the beginning of July, showed that the price per kilogram of domestic rice was 900 Won, 80 Won higher than at the end of March. Sinuiju market prices have risen 120 Won over the last three months, with rice now selling for 980 Won per kilogram.

The ‘lean season’ in North Korea runs from the spring and lasts 3 to 5 months into the summer until barley crops are ready for harvesting. The rise in rice costs by around 100 Won appears to be due to a combination of factors, one being the influence of the lean season, and another being the mobilization of city residents to farming communities to help with harvesting. During harvesting season, markets are closed as workers are sent to the fields, making it difficult to purchase rice. In addition, the decision by Seoul to delay delivery of 400 thousand tons of aid has further aggravated the situation. The price of South Korean rice in the North has also risen, up 150 Won since March in some areas, and up as much as 250 Won in Sinuiju, where a kilogram of ROK rice sells for 1,100.

The rising cost of rice is fueling demand for substitute grains, causing their prices to rise as well. Corn, a staple food for low-income DPRK families, has risen 80 Won since March, to now sell for 450 Won per kilogram. In addition to rising grain prices, currency exchange rates also appear to be on the rise. In the city of Hyeryung, one USD is worth 3,100 Won, 50 Won more than in March. The Chinese Yuan has risen 20 Won, and now trades for 390 Won.

On the other hand, the prices of some goods in the markets are falling. In particular, Chinese goods are becoming more available, thus lowering costs. Chinese shoes have fallen to 7,000 Won, 5,000 Won less than the price in March. Previously, goods were brought into the country only through Chinese-Korean cross-border traders, but now North Korean vendors have direct access to Chinese goods being ‘dumped’ in the North, causing their prices to continue to decline.

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Posted in Advertising, Economic reform, General markets (FMR: Farmers Market), International trade, Price liberalization, Tobacco, Trade Statistics | Comments Closed

North Korea Sells Fishery Licenses in Chulsan’s Coastal Sea to China

Wednesday, July 11th, 2007

Daily NK
Yang Jung A
7/9/2007

A North Korean insider source said on the 5th that the North Korean government sold the fishery licenses of coastal waters at Chulsan, North Pyongan during the crab catching season between May and July for a moderate price.

Chinese marine traders who bought the fishery licenses from North Korea are large marine companies based on Donggang in Lianoning.

The ship-owners and fishermen of North Korea, due to a huge decline in fishes with the Chinese ships’ competitive entry into Chulsan’s offshore waters after receiving the North Korean government’s fishery licenses, are supposed to be going through a hard time.

The source said, “Recently, with the exclusion of the neighboring sea off the coast of Chulsan near the People’s Army’s marine head where the fish farms are located, the fishery licenses to the offshore of the Chulsan-Donggang (China) have been sold to Chinese businessmen. Tens of Chinese fishermen have bought the rights.”

The source said, “The organization in charge who has issued the fishery licenses is not the marine products association, but the No. 64 naval squadron in charge of the this region’s seashore boundary.

Donggang in Liaoning in China located in the mouth of Yalu River, is a small-size city across from Bidan Island.

He said, regarding the price of the fishery licenses, “A small boat is 1,000 Yuan (US$133) per day and a large boat which can accumulate over 100 ton is around 7,000 Yuan (US$ 922) in Chinese currency.”

He added, “The rumors say besides the costs of the licenses, a lot of money has been handed over to North Korea in the negotiations process.”

“Due to monopolizing of the Chinese fishing boats, North Korea’s ships anchored at decks of Donggang are barely seen. North Korean businessmen who have smuggled marine products using small-size boats are having a difficult time because they cannot go out to sea where the current is rough and a lot of gas is required.”

North Korea’s fishermen are saying they have no choice but to go out to the far sea, because they cannot go near the oceanic region operated by Chinese ships.

The source also said, “Chinese ships surreptitiously attacking North Korean ships in their permitted region and beating people have been occurring frequently.”

The Korea Martime Institute, in a report which was announced early this year, said, “The C
hinese government is promoting advancement of North Korea’s operations when the complaints of the country’s fishermen climaxed due to the reduction of ships in the Yungeun Sea and the decline in their income.”

On one hand, besides the oceanic operation rights, the situation is that China’s direct investment in North Korea’s resource development, such as the mining rights being handed over to China, is increasing.

China, instead of investing 70 hundred million Yuan at Musan Mine in 2005, is exercising its 50-year mining licenses to take 10bn tons of iron ore annually.

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Posted in Advertising, Black markets, China, International trade, Sea shipping, Trade Statistics | Comments Closed

Japanese Cars Banned, a Fallacy?

Wednesday, July 11th, 2007

Daily NK
Yang Jung A
7/11/2007

Earlier this year, North Korean authorities banned the importation of cars made from Japan. However, it seems that Japanese cars are still being imported into North Korea.

Moreover, due to Japan’s sanctions on North Korea which prohibits the entry of North Korean cargo ships into Japanese ports, it seems that 3rd countries’ ships are being used to import the cars.

On the 8th, the Sankei Shimbun reported, “The Japanese government placed a measure prohibiting the entry of the “Mankyungbong 92” and other North Korean ships into Japanese ports. However, North Korea is using foreign cargo ships to import second hand goods made from Japan.”

In relation to this, the Sankei Shimbun reported, “From January until June this year, a total of 13 foreign cargo ships have entered North Korea loaded with Japanese goods” and informed, “These ships come from 5 countries including Russia, China, Georgia, Cambodia and Belize, with the majority of staff Russian or Chinese.”

Further, the newspaper stated, “1,000 second hand refrigerators and hundreds of small second hand trucks have been imported into North Korea through 3rd countries’ ships.”

In particular, “Last January, a Cambodian cargo ship carrying 9,000 second hand Japanese bicycles entered North Korea and in April, a Berlize cargo ship containing 11,000 second hand Japanese bicycles entered North Korea” the newspaper reported.

The fact that North Korea has continued to import Japanese cars is a clear sign that the measure to ban all Japanese vehicles was more or less a bluff.

A number of North Korean sources revealed this month, “Authorities made an order to confiscate all Japanese made vehicles including trucks and cars until 2009, and to change all the vehicles to cars made from South Korea or China.”

A source informed “This order was notified by the secretarial department of the central authorities around February 16th, as a directive from the transportation division in the form of lectures” and said, “In Pyongyang, the city traffic security agencies are in charge of the inspections whereas in the country, the provincial traffic security agencies are in charge.”

However, the drivers and conductors of Japanese cars and trucks in North Korea question whether all the Japanese cargo vehicles will be confiscated considering they make up 95% of North Korea’s vehicles. Rather, the atmosphere tends to be leaning towards the measure diminishing away sometime in the near future.

North Korea experts speculate that the order to confiscate Japanese vehicles is an attempt to aggravate antagonisms against Japan in response to Japan’s abductees issue and progression of six party talks. Nonetheless, Japanese goods beginning with cars are used and spread widely across North Korea. In reality, it may be difficult to see any results in attempt to confiscate the vehicles.

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S. Korean group donates medicines to N. Korea

Wednesday, July 11th, 2007

Yonhap
Tony Chang
7/11/2007

A South Korean pharmaceutical association said Wednesday it had provided North Korea with drugs worth about 3 billion won (US$3.25 million) in May in response to a request from the impoverished country.

In February, the North Korean Red Cross Society sent a letter requesting antibiotics, tuberculosis medicine, pneumonia medications, and other basic drugs, the Korea Pharmaceutical Manufacturers Association (KPMA) said.

“Drugs made in the South are precious to us because medicines from China are often fake and not fitting to the North Korean constitution,” the society was quoted as saying in the letter.

The North even requested drugs that have outlived their shelf life, underscoring its urgent need for basic drugs, the KPMA said, adding that it had rejected the request for safety reasons.

In late 2006, the North was hit by an outbreak of scarlet fever, which led to travel bans and school closings, according to reports. The country’s east coast was also reported to have been struck by a series of infectious diseases in January, affecting up to 4,000 people.

North seeks medicine, even if expired for a year
Joong Ang Daily
Kim Young-hoon
7/11/2007

A letter from a Red Cross hospital official in North Korea did not mince words. “We welcome any donation of medicine, even if its expiration date has passed,” the official said.

Moon Kyung-tae, vice chairman of the Seoul-based Korea Pharmaceutical Manufacturers Association, said yesterday the official sent the letter through a civic group, Unification Affairs Research Institute, in February.

The North is willing to take medicine that has expired for up to a year, Moon said, and also was willing to accept responsibility for any problems that might arise.

However, Moon said, “We just cannot do that.”

The association sends about 5 billion won ($5.4 million) worth of medical aid packages to the North every year, but the amount is not nearly enough for what is needed.

In 2005, the South provided support to build pharmaceutical factories in the North, but the facilities could not operate properly due to water and electricity shortages.

The country is extremely vulnerable to epidemics. In October, scarlet fever, which can be treated by taking three pills a day for 10 days, broke out in the North. A significant number of children and the elderly died because they lacked the proper medicine, sources well-informed about the North’s situation said.

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Posted in Foreign aid statistics, Health care, International Aid, Pharmaceutical Manufacturers Association (ROK), Pharmaceuticals | Comments Closed

Unification Ministry Lax in North Korean Aid Monitoring

Wednesday, July 11th, 2007

Donga
7/11/2007

When natural hazards like floods occur in North Korea, the South Korean government sends “humanitarian assistance.” But it has turned out that the government failed to monitor whether the emergency relief aid was being used appropriately.

The government spent 221 billion won (229 million dollars) from August last year to June this year to help North Korea repair damage from last July’s flood. But the Ministry of Unification said on July 10 that the after-monitoring of its use has not yet started.

After a massive flood hit North Korea last year, the ministry announced a plan to send relief aid to the North. At that time, the ministry pledged to visit the affected areas from time to time and see whether the sent items are used for the right purposes. The pledge has not yet been delivered.

The items that the government sent to Pyongyang via the Korean Red Cross include: 100,000 tons of rice, 100,000 tons of cement, 5,000 tons of iron reinforcing rods, 210 relief machines, 80,000 blankets, 10,000 emergency kits, and medicines.

“While sending the relief aid, Pyongyang conducted the nuclear test, so we had to stop; assistance was resumed this year. Due to this change in schedule, it was difficult for us to monitor the use of the aid. We will continue to negotiate with the North regarding field monitoring and access to their rationing lists,” said one official at the unification ministry.

However, many think that the monitoring, in effect, will be of no use, since the rationing of the relief aid might have already been finished.

After a railway station explosion had occurred in Ryongchon in North Pyongan Province in April 2004, the ministry also sent relief aid such as rice and cement. But the monitoring was done one year after the delivery, drawing criticism from the public.

Some point out that we should strengthen the monitoring of our rice aid, which is provided in return for Pyongyang’s scrapping of its nuclear program.

Seoul and Pyongyang made an agreement to visit three places on the east coast and two places on the west coast to oversee the allocation of aid whenever Seoul sends 100,000 tons of rice. The World Food Program, however, has an office in Pyongyang and monitors whether North Korean officials are making disproportionate allocations to the military.

In the meantime, the government sent 10 billion won (10.87 million dollars) worth of road paving materials to help proceed with the Mt. Baekdu tour project planned by Hyundai Asan and the Korea Tourism Organization. However, its usage has not yet been confirmed.

A total of 16,000 tons of materials were sent to the North in August 2005 and March 2006, but Pyongyang has not responded since July last year. Currently, the project is on hold.

“To push the project forward, we are contacting the North via several channels. But because there has not been any response from the North, we are having difficulties,” said one unification ministry official.

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Some rice will be sent by rails to Pyongyang

Tuesday, July 10th, 2007

Joong Ang Daily
7/10/2007

South Korea will start sending 50,000 tons of rice aid to North Korea by road next week, as part of its promised loan of 400,000 tons of rice, officials said yesterday.

While 350,000 tons of rice will be delivered by sea, 30,000 tons will be delivered via rail in the west of the Korean Peninsula, and another 20,000 tons will be delivered via an east coast rail line, a Unification Ministry official said.

The two Koreas conducted a historic test of the reconnected railways across the border in mid-May.

South Korea resumed shipping rice aid to North Korea in late June after more than a year’s hiatus, as the North took steps toward nuclear dismantlement. The aid, which consists of 250,000 tons of imported rice and 150,000 tons of domestic rice, will be made over the next five months.

“The rice aid to North Korea via the overland route will be made over five weeks starting next Friday,” the official said.

North Korea is supposed to pay back the $152-million rice loan over 20 years after a 10-year grace period at an annual interest rate of 1 percent.

South Korea resumed shipments of fertilizer and other emergency aid to the North in late March, but withheld the loan of 400,000 tons of rice as an inducement for North Korea to start implementing a landmark agreement reached in the six-nation talks in February.

In early June, inter-Korean ministerial talks ended without tangible results after North Korea protested the South’s decision to withhold rice aid until the North took steps toward nuclear dismantlement.

South Korea suspended all food and fertilizer aid to North Korea after the North conducted missile tests in July.

Resumption of aid was stymied due to the North’s nuclear bomb test last October, but the two sides agreed to put inter-Korean projects back on track in early March. The last rice shipment was made in early 2006.

A poor harvest in 2006, disastrous summer flooding and a 75 percent fall in donor assistance from abroad have dealt severe blows to the impoverished North, according to World Food Program officials.

A recent think tank report said North Korea could run short of up to one-third of the food it needs this year if South Korea and other countries withhold aid. Data from the WFP and the Unification Ministry show that the North will need between 5.24 million tons and 6.47 million tons of food this year.

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Posted in Agriculture, Automobiles, Foreign aid statistics, International Aid, Railways, RoK Ministry of Unification, Sea shipping, South Korea, Transportation | Comments Closed

Gov’t signs contract with refinery SK for fuel oil aid to N. Korea

Tuesday, July 10th, 2007

Yonhap
Sohn Suk-joo
7/10/2007

South Korea has signed a contract with a local refinery to provide heavy fuel oil to North Korea for shipment next week as part of a multilateral aid-for-disarmament deal, the Unification Ministry said Tuesday.

The contract comes on the heels of international nuclear watchdog monitors preparing for entry into the North next week for verification of the North’s shutdown of its nuclear facilities. Reports also said China is planning to host a fresh round of six-party talks on the North’s denuclearization next Wednesday.

“On Monday, the government signed a contract with SK Energy to provide 50,000 tons of heavy fuel oil to North Korea valued at 22.2 billion won (US$22 million),” Unification Ministry spokesman Kim Nam-sik said. The contract includes transportation fees and insurance premiums.

The first shipment of 6,200 tons will be sent to North Korea next Thursday as part of a six-party deal calling for the communist state to take steps to denuclearize in exchange for economic rewards and other incentives.

The date of delivery, originally set for July 14, has been advanced as North Korea is moving to shut down its main nuclear reactor under the Feb. 13 agreement with South Korea, the United States, China, Japan and Russia. The five regional players have engaged North Korea in the six-party nuclear disarmament talks since 2003.

With the earlier than expected oil delivery, South Korea expects that North Korea will accelerate its process of shutting down its nuclear reactor at Yongbyon, about 90 kilometers north of Pyongyang.

North Korea is entitled to one million tons of heavy fuel oil as a reward for a series of steps to shut down and disable its key nuclear facilities. South Korea is responsible for the first shipment of 50,000 tons.

In late June, working-level officials from the two Koreas agreed on the shipping arrangements. The South Korean portion of the aid should be sent within two weeks. The remaining 950,000 tons, to be split equally between the five parties involved in the six-way talks, will be given when the North takes further steps to disarm.

The cost of the aid is to be shouldered equally by the other nations in the six-party talks. But Japan has vowed not to provide any assistance to the North until the decades-old issue of Japanese citizens abducted by Pyongyang is resolved.

Implementation of the February deal had been delayed pending resolution of a banking dispute over US$25 million of the North’s funds that were frozen in a Macau bank. The issue was resolved in June after the money was transferred to Pyongyang with the help of the U.S. and Russian central banks.

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Posted in Energy, Foreign aid statistics, International Aid, Oil, South Korea | Comments Closed

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