Archive for the ‘RoK Ministry of Unification’ Category

Ministry of Unification not keeping up with ROK business in the DPRK

Monday, May 16th, 2011

According to the Choson Ilbo:

A panel of experts says the Unification Ministry has a cavalier attitude to South Korean companies doing business with North Korea. The panel, led by Kim Young-yoon of the Korea Institute for National Unification, tried to find out how many firms there are and what they do.

The experts say that according to ministry figures, 1,017 South Korean companies are doing business in the joint Korean Kaesong Industrial Complex, Mt. Kumgang, Pyongyang, as well as Nampo, Haeju, Rajin and Sinuiju. But the ministry does not even have contact numbers for 188 of those companies, and the phone numbers of 259 are wrong, meaning it only has accurate numbers for 570.

That begs the question whether the tally is even remotely accurate. “Even if businesses have an office in North Korea, most of them are headquartered here,” said one of the experts. “So it shouldn’t be very difficult to assess the status of these businesses, and inaccurate statistics show that the ministry has not done its job properly.”

The probe was prompted by a request from some firms doing business with North Korea to the National Assembly’s Foreign Affairs and Unification Committee to review business in the North and give them a clear picture after the government halted all trade with the North except the Kaesong complex on May 24 last year.

The panel had planned to publish a white paper on May 24 this year, but apparently scrapped the idea due to the lack of basic information.

A response from a Unification Ministry official only adds to the confusion. “We gave them a list of 720 companies, including 584 that are involved in trade with North Korea, 122 that are based in the Kaesong Industrial Complex and 20 in Mt. Kumgang,” he said. “I don’t know where they got the 1,017 figure from.”

Read the full story here:
Ministry ‘Confused’ Over Firms Doing Business with N.Korea
Choson Ilbo


Inter-Korean mining projects suspended

Monday, April 25th, 2011

Pictured above on Google Earth: Ryongyang Mine Ore Dressing Plant (Pre-renovation)

According to the Hankyoreh:

“We invested a lot of money, and now we cannot even find out the present status.”

Korea Resources Corporation (KORES) President Kim Shin-jong let out a deep sigh as he explained about the development status of the Hwangnam graphite mines in North Korea at a forum held by the corporation on Apr. 15. The event was organized amid a sense of profound concern, with a number of North Korean mineral resources development efforts running aground amid worsening inter-Korean relations.

According to accounts Sunday from officials with the Ministry of Unification and KORES, South Korea is currently involved in a total of ten North Korean coal mine development efforts. Investment for seven of these comes from the government, including the ministry and KORES, while the other three involve private sector investments. None of them has followed their original schedule since the Lee Myung-bak administration came into office.

The most representative case is that of the Hwangnam graphite mines. This was the first North Korean resource development effort undertaken as an inter-Korean economic cooperation venture, and progress was quick enough that the graphite produced there was being imported into the South right up until the Lee administration came into office. Now, the situation has changed completely.

A company official conveyed the situation by saying, “Since 2008, the Hwangnam Coal Mine has been forgotten completely.”

The situation is the same for the Komdok, Ryongyang, and Taehung coal mines in the area of Tanchon, South Hamgyong Province, an effort spearhead directly by the Unification Ministry.

An official with the ministry said, “We had already finished the third feasibility examination by February 2008, but since then there has been no further progress as inter-Korean relations have worsened.”

The Ryongyang mine contains large deposits of the rare metal magnesite, a material South Korea does not produce.

Exploration has also been effectively halted at the Ayang mine in Sinwon County, South Hwanghae Province, where KORES completed an on-site investigation following the signing of a September 2007 memorandum of understanding on mineral development with North Korea, and the Pungchon mine in Yonan County, South Hwanghae Province, where the first inter-Korean joint drilling effort was undertaken in October 2008.

The situation has been particularly severe for the privately invested projects.

An official with one company engaged in a fertilizer effort said, “We carried out three rounds of working-level discussions in North Korea and China regarding the mining of apatite, but all of them have been suspended since the current administration took office.”

“If these projects had just gone ahead properly, we would not have had to buy apatite at high prices from faraway places like Nauru,” the official lamented.

Apatite, one of the key ingredients in fertilizer, is one of the mineral resources for which South Korea depends entirely on imports.

With South Korea’s development projects in North Korea at a standstill, China’s have taken flight. According to KORES figures, Chinese exports of North Korean military, which stood at the $300 million level in 2005, showed a sharp rate of annual increase to reach more than $900 million in 2010. In the space of five years, the amount of North Korean minerals purchased by China rose more than threefold. Industry observers are calling the situation “hoarding” of North Korean minerals by China. Government authorities are known to have determined that even strategic minerals listed as forbidden for overseas export, including uranium, have been going into China since late last year.

The problem is that the situation is becoming more severe as time passes. Because North Korea’s mineral transportation infrastructure of highways and ports is still deficient, the focus has been on developing minerals in areas near the North Korean-Chinese border, but there is a strong chance that China will extend its reach further into the country going ahead.

“China wants to seize North Korea’s mineral resource industry through expanded infrastructure cooperation with North Korea,” said Jeong U-jin, head of the natural resource strategy office at the Energy Development Institute.

Many observers are saying that thawing inter-Korean relations is an urgent priority if South Korea is to take full advantage of the value of North Korean mineral resources. Noting that the potential value of North Korean mineral resources is as much as 7 quadrillion won, a KORES official said, “Suffice it to say that as improvements in inter-Korean relations get put off, North Korean resources will all head overseas.”

According to the North Koreans, production at the mines is up nonetheless!

Read the full story here:
Inter-Korean coal mine projects suspended during Lee administration
Ki Kyung-rok


Increase in North Korean Male Workers in Kaesong Industrial Complex

Tuesday, March 8th, 2011

Institute for Far Eastern Studies (IFES)
NK Brief No. 11-03-07

The number of male workers in Kaesong Industrial Complex (KIC) increased according to the Ministry of Unification (MOU). Since the establishment of the complex, women made up 84-85 percent of the total work staff. But from last May, the number fell below 80 percent and currently is around 74 percent.

In contrast, the number of male workers steadily increased from 15 percent from last year to 26 percent, an increase of over 10 percent.

Out of the new hires of all of last year, 56 percent were male. Even sewing factories generally dominated by female employees began to accept male workers.

Many of the South Korean companies in Kaesong preferred young female workers over male for higher work efficiency; but with declining manpower, more male workers are being hired than previously.

An official from the MOU stated, “We are facing difficulties with labor supply lately,” and added, “Many are even coming from Pyongyang in addition to the nearby areas of Kaesong.”

The total production output of Kaesong Complex reached 323.32 million USD last year, an increase of 26 percent against the previous year.

Kaesong is a popular employment spot for the North Koreans due to its higher wages and extra perks including coupons exchangeable for daily necessities and free coffee and snacks.

The MOU official also noted that even in times of troubled inter-Korean relations, North Korean officials and workers on several occasions have expressed their hopes for the KIC to continue. “KIC is a space we acquired from the North for the purpose of fulfilling our national strategy. We need to be more proactive in utilizing this opportunity to its full potential.”

On the other hand, North Korea sent a letter proposing working-level talks on the industrial complex to the South earlier last month. In the letter the North expressed, “We hope for your active support to resume the working-level talks of the Kaesong Industrial Complex at the earliest possible date to revitalize the currently stagnant business. We look forward to your positive response.”

On January 8, the DPRK officially proposed for the resumption of KIC working-level talks at the earliest possible date through a statement made by the spokesperson of the Committee for the Peaceful Reunification of Korea. Specifically, late January or early February was suggested.

On January 18, the Central Special Zone Development Guidance of North Korea also proposed through its representative for working-level talks related to the KIC to be held in Kaesong on February 9.

The request from the DPRK is analyzed to be an attempt to relax restrictions prohibiting new businesses and investments in the KIC from the “May 24 Sanctions” that the South Korean government put into effect in 2010 following the sinking of the South Korean naval corvette Cheonan in March of last year.


Trade in Kaesong drastically increases to $ 1.4 billion in 2010

Friday, February 18th, 2011

Institute for Far Eastern Studies (IFES)
NK Brief No.11-02-18

Despite the severed inter-Korean relations, Kaesong Industrial Complex related trade reached USD 1,442,860,000, surpassing last year’s figure (USD 940 million) by 53.4 percent.

Trade at Kaesong continuously rose since 2004, almost reaching USD 1 billion by 2009. Then it sharply jumped over the one billion mark last year in 2010.

A closer look at the numbers is as follows: 2004 (USD 41.69 million); 2005 (USD 176.74 million); 2006 (USD 298.79 million); 2007 (USD 440.68 million); 2008 (USD 884.40 million); 2009 (USD 940.55 million); 2010 (USD 1.44 billion).

This rise in trade brought the total trade figure up to USD 1.912 billion by 2010, an increase of 13.9 percent against last year’s total of USD 1.679 billion.

The number of total workers in North Korea reached 42,397 in March 2010, steadily increased to 44,958 in October, and reached 45,332 by November.

However, after the Cheonan incident, South Korea issued a suspension on inter-Korean trade, causing a drop in general trade and processing on commission.

General trade declined by 54 percent from 2009 to USD 117, 860, 000 while processing on commission was down by 22.5 percent to USD 317, 560, 000.

Consequently, the composition of the inter-Korean trade changed, contributing to the proportion of the trade in Kaesong to increase to 75.5 percent from 56 percent in 2009. General trade on the other hand, fell from 15.3 percent to 6.2 percent and processing on commission dropped from 24.4 percent to 16.6 percent from 2009.

In addition, commercial transactions — such as general trade and processing on commission — in Kaesong comprised 98.8 percent of total inter-Korean exchange while noncommercial activities like humanitarian assistance only reached 1.2 percent.

Also in 2010, a total of 13,119 South Koreans visited North Korea, which is an increase of 7.9 percent from the previous year (12,616 people). This is due to the rise in the number of people visiting the Kaesong Industrial Complex.

According to the Ministry of Unification, 94.5 percent (123,023) of the total visitors to the DPRK had involvement with the Kaesong Industrial Complex. This is an increase of 7.9 percent from 2009 (111,811 people).

In comparison, most of the noneconomic related visits to the DPRK declined since the Cheonan incident including socio-cultural exchanges and humanitarian assistance. With the implementation of the May 24 sanctions against North Korea, noneconomic related visitation to North Korea decreased 23 percent from 2,313 people to 1,773 from the previous year.


ROK spending on inter-Korean exchanges at record low

Sunday, January 23rd, 2011

According to Yonhap:

In another reflection of frayed inter-Korean relations, South Korea last year used the smallest amount of funds earmarked for exchanges with North Korea since the sides held their first summit in 2000, the Unification Ministry said Sunday.

The ministry, the main South Korean government arm handling affairs involving North Korea, spent 86.25 billion won (US$76 million), or 7.7 percent of the 1.12 trillion won designated as the “South-North Cooperation Fund,” officials said this week.

The fund was created in 1991 to support humanitarian and economic exchanges between the divided Koreas, which remain technically at war after the 1950-53 Korean War ended in a truce.

Last year’s spending was the smallest since 2000 when the sides held their landmark summit talks and agreed on a wide range of cooperation projects as part of their reconciliation efforts.

But the cross-border ties deteriorated to the worst level in more than a decade when the North bombarded a South Korean island and was also found responsible for sinking a warship last year.

South Korea has suspended humanitarian aid and cross-border trade in retaliation, pressing North Korea to apologize if the impoverished communist country seeks to restore their relations.

The cooperation fund’s implementation rate had ranged from 37 to 92.5 percent between 2000 and 2007, but nosedived after a conservative government took power in 2008 with a hard-line policy on the North. That year, the rate stood at 18.1 percent before dropping further to 8.6 percent in 2009.

Read the full story here:
Spending on inter-Korean exchanges lowest since 2000: ministry


ROK spends 5.6 pct of inter-Korean cooperation fund

Sunday, December 26th, 2010

According to Yonhap:

South Korea has spent only 5.6 percent of its funds earmarked for promoting humanitarian and economic ties with North Korea this year, the unification ministry said Sunday, as inter-Korean relations tumbled to their worst in decades.

As of the end of November, the ministry said it had endorsed spending worth some 62.6 billion won (US$54.4 million) from its South-North Cooperation Fund, or 5.6 percent of the total allocated for this year.

Just over half the sum, or about 32.8 billion won, went toward financing loans for inter-Korean trade and economic cooperation, while another 27.8 billion won was spent on improving exchanges among families separated across the border and other humanitarian projects.

The low spending rate apparently reflects the ban on cross-border exchanges following the deadly March sinking of a South Korean warship, blamed on a North Korean torpedo attack, and escalated tensions on the peninsula since the North’s artillery attack on a southern island last month.

The fund’s implementation rate ranged from 37 to 92.5 percent between 2000 and 2007, but nosedived after President Lee Myung-bak took power in 2008 with a hard-line policy on the North. That year, the rate stood at 18.1 percent before dropping further to 8.6 percent in 2009.

Read the full story here:
S. Korea spends 5.6 pct of inter-Korean cooperation fund


Kim Jong-il focuses on economic sites for ‘field guidance’ trips this year

Monday, December 6th, 2010

According to Yonhap:

North Korean leader Kim Jong-il paid more visits to factories and other economy-related sites than to military units and other locations this year in a sign that the autocratic leader is trying to improve internal unity, Seoul’s Unification Ministry said Monday.

Kim has made a total of 148 “field guidance” trips across the country this year, with 58 of them, or 40 percent, made to economic sites and 33 visits to military units, ministry spokesman Chun Hae-sung told reporters.

In particular, Kim made 16 public appearances in November, and only one of them was a visit to the military while seven were to economic sites, a ministry official said on condition of anonymity.

“This is seen as an attempt to promote internal unity or to demonstrate he is in charge,” the official said.

Kim’s sister, Kim Kyong-hui, and his brother-in-law, Jang Song-thaek, accompanied Kim on most of the field trips in November, the official said.

Since the North’s deadly shelling of South Korea’s Yeonpyeong Island on Nov. 23, Kim has made a dozen public appearances, with seven of them to economic sites.

Kim’s heir-apparent and youngest son, Kim Jong-un, accompanied his father on 28 of the 148 field trips this year, according to the ministry.

Read the full story here:
Kim Jong-il focuses on economic sites for ‘field guidance’ trips this year


DPRK defectors to South reaches 20,000

Monday, November 15th, 2010

According to the AP:

The number of North Koreans defecting to South Korea has surged in recent years because of economic suffering in the North, with more than 10,000 defections over the past three years, South Korea’s Unification Ministry said Monday.

About as many North Koreans have defected to the South since the end of 2007 as the number who had fled over the entire previous period since the 1950-53 Korean War ended with an armistice, the ministry said in a statement. The overall total stands now at 20,050.

Ministry official Han Dong-ki said the rise in defections reflects North Korea’s worsening economy.

North Korea has relied on outside food aid since natural disasters and mismanagement wrecked its economy in the mid-1990s, when an estimated 2 million people died of famine. The North’s economic troubles are thought to have worsened following a botched attempt at currency reform last year.

Most defectors reach South Korea after crossing over a shared border with China, where activists say tens of thousands of North Koreans are hiding. About 2,500 defectors arrived in the South in 2007, and the number has risen each year since. More than 2,900 defected last year, the ministry statement said.

Many North Korean defectors have trouble adjusting to their new lives in the South, which is one of Asia’s richest countries. They report job discrimination and difficulty finding work, and say they aren’t being paid fairly or getting promotions.

South Korea runs resettlement centers where North Korean asylum-seekers take a three-month course that teaches them computer skills and such everyday lessons as how to use ATMs and shop in supermarkets. South Korean intelligence officials typically question defectors for about three months before they are sent to the centers.

The two Koreas share a common language, but there are often differences in word meanings after more than a half-century of division following the war. The South is also awash in Western influences compared to the isolated North.

The Unification Ministry said it is working to help defectors resettle in the South more smoothly, offering greater tax reduction and medical benefits.

Defectors are a point of friction between North and South Korea. Two North Korean army majors were sentenced to prison in South Korea earlier this year for plotting to assassinate a high-profile defector. The defector later died of heart failure, and police said there was no connection between his death and the plot.

North Korea denies involvement, accusing South Korea of staging the arrests to stoke public anger against the North.

The defector, Hwang Jang-yop, was one of the North’s most powerful officials when he fled in 1997. He was chief architect of North Korea’s guiding “juche” philosophy of self-reliance and had tutored North Korea’s supreme leader, Kim Jong Il, on the ideology.

UPDATE 1: The New York Times also published a story on this trend.

UPDATE 2: The Economist offers coverage.

Read the full story here:
Number of NKorean defectors to SKorea tops 20,000
AP (via Washington Post)
Kim Hyung-Jin


POSCO enlisted to assist DPRK defector transition

Wednesday, November 10th, 2010

According to

Top South Korean steelmaker POSCO pledged Thursday to provide more jobs to North Korean defectors struggling to settle in their newfound capitalist homeland.

Under a memorandum of understanding (MOU) signed with the Unification Ministry, POSCO promised to hire more defectors at its “social enterprise” subsidiaries set up in part to help the underprivileged.

POSCO’s Songdo SE, one such firm, now employees 105 people from the needy classes of society, including 35 defectors from North Korea, and plans to increase the number of defector employees to 50 by next year.

The firm is in charge of building maintenance for POSCO Engineering & Construction’s new headquarters and POSCO Global R&D Center located in Songdo Free Economic Zone in the western port city of Incheon.

“What is most important for North Korean defectors is to help them to stand on their own economically,” Unification Minister Hyun In-taek said in a speech at the MOU signing ceremony attended by some 200 people, including the 35 defectors employed at Songdo SE and POSCO CEO Chung Joon-yang.

Chung said that Songdo SE will put priority on hiring North Korean defectors living in Incheon.

Since the 1950-53 Korean War, nearly 20,000 North Koreans have defected to the South to escape from hunger and political suppression in their communist homeland. But many of them have a hard time getting decent jobs due to their lack of South Korean-style education and social discrimination.

Read the full story here:
POSCO pledges to provide more jobs to North Korean defectors


ROK launches DPRK trade bribery case

Monday, October 25th, 2010

According to Yonhap:

The Unification Ministry said Monday it will ask law enforcement authorities to look into allegations that government officials took bribes in exchange for helping local traders bring in agricultural products from North Korea.

Rep. Choi Jae-sung of the main opposition Democratic Party claimed last week that the trading firms used the bribes after the ministry rejected their request to import shiitake mushrooms from North Korea for violating import conditions.

Choi claimed that multiple officials of a government agency, which he did not identify, exercised influence to help the traders win approval for the import, and received money in kickbacks. The lawmaker did not say how much money was given to them.

On Monday, Unification Ministry spokesman Chun Hae-sung said that the ministry will refer the case to investigation authorities but denied that the ministry was involved in the alleged bribery.

Read the full story here:
Unification ministry calls for investigation into bribery allegations over inter-Korean trade