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Pyonghwa Motors Producing Trucks in the DPRK

Friday, August 3rd, 2007

Institute for Far East Studies (IFES)
8/3/2007

Pyongwha Motors, the South Korean company producing automobiles in North Korea will expand into truck manufacturing from this year. According to an official from the company, the manufacturer, currently producing six models, plans to begin truck production within the year, and is working together with Hwacheon Motors and other enterprises in the Chinese city of Shenyang.

Pyongwha Motors currently manufactures three models in the ‘Bukkuki’ (Cuckoo) SUV series, a pickup truck, the mid-size sedan ‘Wuiparam II’ (Whistle II), and the minibus ‘Samchunri’ (Throughout Korea). As of yet, the company has not decided what type of truck it will produce. The company’s truck production is a result of demand in North Korea. Farms, organizations, factories and other consumers have been asking Pyongwha Motors to “produce a truck that will allow a little bit more to be loaded” onboard, and the company has been listening.

An official from the company stated, “if truck production gets underway, last year’s production of 600 to 700 vehicles will be surpassed and more than 1000 vehicles [will be produced] this year,” and went on to explain that the next step is to decide on an exact model through cooperation between North Korean and Chinese counterparts.

Pyongwha Motors, operated through an equity joint venture between South Korea’s Pyongwha Motors Group and North Korea’s Chosun People’s Leisure Group, first produced an automobile based on a model of an Italian Fiat, and in its second stage of operations, produced SUVs and pickup trucks. Today, the company is in its third stage of operations, producing minibuses, trucks, and mid-size sedans.

Posted in Automobiles, Manufacturing, Pyonghwa Motors, Transportation | Comments Closed

North Korean Grade 1 Driver’s License Near Impossible to Obtain

Friday, August 3rd, 2007

Daily NK
Kim Min Se
8/3/2007

“There is no better way to make a living than being a driver in North Korea. By delivering food, vegetables and even lumber for winter use to companies, one can take a portion as a driver too. Even when transporting radishes or cabbages for Kimchi (Korean cabbage pickles) one can always put aside the ones of best quality in a plentiful amount.”

Defector Kim Choong Il [pseudonym] who had come to South Korea due an unavoidable situation had worked in North Korea as a driver for a company. Reminiscing his days as a driver in North Korea he smiled and even said that he missed the life.

“People who need cars come ask and even bring gas so there are no expenses on my part. I just need to drive. I rarely even ate at home. Most of the time I was treated out. Because there are no means of transportation, everyone wants to use cars. I even make some business when I drive long distances for company-related work. Sometimes when I drive a couple merchants on the road because they beg me to give them a ride, I get drinks and cigarettes for free.”

In South Korea, any healthy adult – male or female – is eligible for driver’s license. However in North Korea, there are several classes of driver’s licenses and they limit the training of drivers. Driver’s licenses are that much recognized in North Korea.

In South Korea, being a driver is not the ideal profession but in North Korea, a “car driver” is very popular. Once you obtain your driver’s license and get assigned to a truck, you never have to worry about making a living again. The income is fairly good.

Kim said, “There is just one time that I faced a difficult situation working as a driver.”

A Conscientious Accountant is the First to Starve

He said, “While transporting radishes and cabbages for the company employees’ use, I put aside 2 tons for an accountant and myself. If a driver takes it alone then he’ll be caught by the accountant so the two collaborate to embezzle goods. But the new accountant was a conservative and nice woman. She refused the 1 ton of cabbages that had been allotted to her and demanded that I bring back my portion too. I begged her “to turn the other way” but it didn’t go through. I ended up restoring the cabbages and radishes.

Moreover, he said, “this nice accountant was the first to starve when the food rations ended in 1995. She had been conservative and waited for rations from the Party but ended up dying. I survived. Even in the Great Starvation period, none of the drivers starved to death.”

To obtain a driver’s license in North Korea, one must learn about the basic structure of the car and simple maintenance operations along with a year of driving practice at an automobile driving school. After a year of education and passing the test, a diploma is given.

Only with this diploma the Automobile Management Bureau of the provincial Safety Agency (County Police Agency) gives out an official driver’s license. At this time a Grade 4 is given. With this “Grade 4”, one can’t automatically start driving.

There are heavy equipment driver’s license to operate excavators and tractors and automobile driver’s license. Heavy equipment driver’s license has 7 grades and automobile driver’s license has 4 grades.

Most “Grade 4” drivers work as assistant drivers to drivers with much experience for at least 3 to 5 years and gain experience and skills on driving and car repair. Even afterwards, one must give bribes to the affiliated company (factory) to receive one’s own car and drive.

Grade 1 License is Nearly Impossible

Once a driver who has been distributed a car drives without any accidents, their grade is raised once every 3 to 5 years. If they get into an accident, the promotion rate slows down.

According to the testimony of another defector Choi Young Chul [pseudonym] who had worked as a car driver, most drivers obtain a “Grade 4” status after 10-15 years of experience. However, from “Grade 3” it’s not just driving that one must excel at. From “Grade 3” regardless of years of experience and lack of accidents, one must pass the National Public Official Exam to obtain [higher levels].

“Grade 3 drivers are given the same license as a college graduate. In Kimchaek City where I lived there were only two people who had a Grade 2 driver’s license,” he said.

Choi said, “To obtain a “Grade 1”, you must be able to build a car. Realistically even if most drivers drive long-distance for more than 30 years, they remain at “Grade 4”. Even if you graduate from Dukcheon Automobile College (3 years), you’re only given a “Grade 4″. If you graduate with flying colors, you’re given a Grade 3.”

The reason it’s hard to obtain a “Grade 3″ driver’s license in North Korea is because drivers must have overall knowledge about maintenance as well as thorough knowledge and skills on repair.”

With a highway system that is deteriorated and the absence of a car repair system, the frequency of break downs or troubles are very high. Also, most civilian cars excluding military cars have a severe deterioration.

Choi also exposed, “There is an item that North Korean drivers never forget when they leave for a long distance trip. Lighters, rice, drinking water and a pot are integral. It’s like our life. When there’s a severe problem and it’s impossible to fix on the spot, they survive off of the rice and call the factory and wait. Most drivers who have driven for 10 years struggle from gastroenteric trouble.

It’s Choi’s explanation that if a car breaks down in an uninhabited area in the winter or a mountainous road, it can eventually lead to a human casualty. Thus it is the driver’s burden to take care of the damages and repair as well as the casualties from it.

On the other hand, the North Korean military trains army drivers for the military through a separate driving school in each troop. Recruits who had just graduated from middle-high school receive education for a year at the driving school to work as army drivers. In “Ohro Driving School” in Youngkwang, South Hamkyung Province and “Lanam Driving School” in Lanam-district, Chongjin, North Hamkyung are representative army driving schools in the Hamkyung Province areas.

Once they finish their rookie training and dispatched to a base, they fulfill their army duty by working as a car driver. After being discharged, these military drivers must go to the corresponding Defense Department Automobile Management Bureau and exchange their licenses with societal driving licenses.

The amusing fact is that at this time most army drivers receive societal driving licenses that is a grade lower than one that was given in the military. It is also evidence that the North Korean society does not trust the discharged soldiers who tend to cause accidents frequently.

Posted in Automobiles, Civil society, Labor conditions/wages, Transportation | Comments Closed

Pyeonghwa Motors, China’s Brilliance in talks to produce trucks in North Korea

Wednesday, August 1st, 2007

Yonhap
8/1/2007

Pyeonghwa Motors Corp., a South Korean automaker with exclusive rights to produce cars for the North Korean market, said Wednesday it has been in talks with Chinese automaker Brilliance Automotive Holdings Ltd. to assemble trucks in North Korea, a company official said Wednesday.

In North Korea, Pyeonghwa Motors is assembling some 600-700 vehicles, including sport-utility ones, sedans and mini buses, a year at its plant in Nampo, near the capital Pyongyang.

The North has requested Pyeonghwa Motors to produce trucks for farmers and factory workers, the official said.

“We will soon select a truck model after consultations with North Korean and Chinese sides,” the official said on the condition of anonymity, citing protocol.

If the North Korean plant begins production of trucks, annual vehicle sales of Pyonghwa Motors in North Korea will exceed 1,000 units, the official said.

The North’s economy went into a steep decline in the early 1990s after the collapse of the Soviet Union, according to reports released by South Korea’s Bank of Korea.

However, since the late 1990s, the North Korean economy has been growing again, helped by an influx of foreign aid and better weather, the South’s central bank said.

Posted in Automobiles, China, Manufacturing, Pyonghwa Motors | Comments Closed

IFES Monthly report

Wednesday, August 1st, 2007

Institute for Far Eastern Studies (IFES)
8/1/2007

INTER-KOREAN RELATIONS

Following two days of talks between economic representatives of the two Koreas at the Kaesong Industrial Complex, South Korea announced on July 7 that it would begin shipping raw materials to the North in exchange for DPRK natural resources. South Korea shipped 800,000 USD of polyester fabric on July 25, and is set to send the rest of the materials by the end of November. North Korea accepted South Korean prices for the goods, and will pay transportation, cargo working, and demurrage costs, as well. South Korea will pay for shipping, insurance, and the use of port facilities. On 28 July, a South Korean delegation left for the North in order to conduct on-site surveys of three zinc and magnesite mines. The team will spend two weeks in North Korea.

It was reported on 17 July that North Korea proposed a joint fishing zone north of the ‘Northern Limit Line’ dividing North and South territorial waters to the west of the peninsula. Seoul turned down the offer.

Inter-Korean military talks broke down early on 26 July after only three days of negotiations as North Korea insisted on the redrawing of the Northern Limit Line.

North Korea demanded on 27 July that workers in the Kaesong Industrial Complex be given a 15 percent pay raise. The North Korean workers will not work overtime, weekends or holidays beginning in August unless the raise is granted.

It was reported by the Korea International Trade Association on 26 July that inter-Korean trade was up 28.6 percent in the first six months of 2007, totaling 720 million USD.

RUSSIA-DPRK INVESTMENT

It was reported on 19 July that Russia and North Korea have agreed to connect Khasan and Najin by rail, enlisting investment from Russian oil companies interested in an inactive refinery at Najin Port capable of processing up to 120,000 barrels per day. The project is estimated to cost over two billion USD.

MONGOLIA-DPRK RELATIONS

During a four-day visit to Mongolia by Kim Yong-nam beginning on 20 July, the two countries signed protocols on cooperation on health and science, trade and sea transport, and labor exchange issues. This follows on the heals of an agreement to allow South Korean trains to travel through North Korean territory on to Mongolia in route to Russia and Europe.

JAPAN-DPRK PROPAGANDA

Japan took one step further to recover abductees in North Korea this month when the government began broadcasting propaganda into the DPRK intended for Japanese citizens. The broadcasts are made in Korean and Japanese (30 minutes each) daily, and updated once per week.

U.S.-DPRK PEACE PROSPECTS

U.S. Ambassador to the ROK Alexander Vershbow stated that Washington was prepared to negotiate a permanent peace regime on the Korean Peninsula by the end of the year if North Korea were to completely abandon its nuclear ambitions.

EGYPT-DPRK INVESTMENT

The Egyptian company Orascom Construction Industries announced a 115 million USD deal with North Korea’s state-owned Pyongyang Myongdang Trading Corporation to purchase a 50 percent state in Sangwon Cement. To put this in perspective, the deal in worth more than four times the amount of frozen DPRK funds that had caused six-party talks to break down and delayed the implementation of the February 13 agreement.

NORTH KOREAN SOCIETY

The Economist reported on 7 July that, according to foreigners living in the North’s capital, concern for petty law appears to be weakening. Citizens are reportedly smoking in smoke-free zones, sitting on escalator rails, and even blocking traffic by selling wares on the streets.

It was reported on July 11 that a letter sent earlier in the year by the North Korean Red Cross indicated severe shortages of medical supplies. The letter stated that North Korea would accept any medicine, even if it was past expiration, and accept all consequences for any problems that arose from using outdated supplies. The (South) Korea Pharmaceutical Manufacturers Association had no choice but to reject the request.

Events were held on July 11 in North Korea in order to promote women’s health and well-being issues. Marking World Population Day, a North Korean official stated that the DPRK has cooperated with the UN Population Fund since 1986, and is now in the fourth phase of cooperation.

Seeing entertainment venues as a “threat to society”, North Korean security forces have been implementing a shutdown of karaoke bars and Internet cafes. These venues mainly cater to traders in the northern regions of the country.

It was reported on July 13 that construction of North Korea’s first all-English language university was nearing completion. The Pyongyang University of Science and Technology, funded largely by ROK and U.S. Christian evangelical groups, will hold 2600 students and offer undergraduate and post-graduate degrees in business administration, information technology, and agriculture.

Local elections were held on 29 July for DPRK provincial, city, and country People’s Assemblies. 100 percent of 27,390 candidates were approved with a 99.82 percent turnout reported.

Posted in Agriculture, Civil society, Disease prevention, Egypt, Foreign direct investment, Health care, Institute for Far Eastern Studies, International trade, Japan, Kaesong Industrial Complex (KIC), Korea International Trade Association (KITA), Labor conditions/wages, Manufacturing, Mining/Minerals, Mongolia, Music, Pyongyang Myongdang Trading Corporation, Pyongyang University of Science and Technology, Radio, Railways, Russia, Sea shipping, Trade Statistics, Transportation | 2 Comments »

Kim Jong Il’s Yacht, UNESCO, Golf, and the Taean Glass Factory

Tuesday, July 31st, 2007

Now available on Google Earth!
(click above to download to your own Google Earth)

North Korea Uncovered v.3

Google Earth added a high-resolution overlay of the area between Pyongyang and Nampo. In it, most of the Koguryo tombs listed with UNESCO are now distinguishable. In addition, viewers can see the latest Kim Jong Il palace (including a yacht), the DPRK’s premier golf course, and the Chinese-built Taean Glass factory. I have also made some progress in mapping out the DPRK electricity grid.

This is the most authoritative map of North Korea that exists publicly today. Agriculture, aviation, cultural institutions, manufacturing, railroad, energy, politics, sports, military, religion, leisure, national parks…they are all here, and will captivate anyone interested in North Korea for hours.

Naturally, I cannot vouch for the authenticity of many locations since I have not seen or been to them, but great efforts have been made to check for authenticity. In many cases, I have posted sources, though not for all. This is a thorough compilation of lots of material, but I will leave it up to the reader to make up their own minds on the more “controversial” locations. In time, I hope to expand this further by adding canal and road networks.

I hope this post will launch a new interest in North Korea. There is still plenty more to learn, and I look forward to hearing about improvements that can be made.

Posted in Architecture, Automobiles, Aviation, Banking, Coal, Communications, Computing/IT, Dams/hydro, Education, Electricity, Energy, Football (soccer), Forestry, Gambling, Gasoline, General markets (FMR: Farmers Market), Golf, Google Earth, Health care, Hoteling, Hwanggumphyong and Wihwado Economic Zones (Sinuiju), Kaesong Industrial Complex (KIC), Leisure, Library, Light Industry, Manufacturing, Mass games, Military, Mining/Minerals, Mt. Kumgang Tourist Special Zone, Railways, Rason Economic and Trade Zone (Rajin-Sonbong), Real estate, Religion, Restaurants, Sea shipping, Sports, Tourism, Transportation | 1 Comment »

Ban on Japanese Cars Stronger Than Expected

Friday, July 27th, 2007

Daily NK
Kwon Jeong Hyun
7/27/2007

An order was made by North Korean authorities prohibiting the use of all Japanese cars until the year 2009. Though this only applies to old cars manufactured before 2003, it seems that the orders are being enforced stronger than expected.

The drivers seat of cars manufactured after 2004 are being changed to the right hand side by the Japanese Chongryon (General Association of North Korean Residents in Japan), informed a source on the 25th.

In addition, all Japanese cars have been banned from entering Pyongyang excluding cars with permits (such as governmental or company cars). As a result, many Japanese delivery services are experiencing hardship.

This kind of order was made around Kim Jong Il’s birthday on February 16th by central authorities with inspection conducted by the transportation department of the Social Safety Agency in both the rural districts and Pyongyang.

These orders were made amidst a time when relations between North and South Korea had worsened and when a broken down Japanese car blocked the road while Kim Jong Il was on his way to worship at his the Kim Il Song Memorial.

Regarding this, one safety traffic official of Pyongyang city informed, “Cars which have been produced with the South such as the “Hweparam (whistle)” and “Arirang” are being regulated by the nation. National income is being increased by selling these. Further, the regulations were enforced to control the people who were making lots of money by trading cars illegally.”

The Pyeonghwa Motors which operates under the control of the Unification Church has been working in collaboration with North Korea. Since 2002, cars and mini buses have been supplied after parts had been put together at the factory.

This order by North Korean authorities has been enforced strongly and has lasted much longer than expected. Hence many traders and individuals are expressing discontent.

Japanese cars are being sold at ridiculously low prices with yet another year and 2 months remaining until the ban is lifted. People who took out loans in order to purchase the cars are being pressured by their debtors, a source informed.

Posted in Automobiles, Chongryun, International trade, Japan, Pyonghwa Motors, Transportation | 1 Comment »

Drivers Employ Guards to Prevent Theft

Thursday, July 26th, 2007

Daily NK
Han Young Jin
7/25/2007

More and more North Korean delivery drivers have been employing guards in preparation for theft by soldiers.

On the 24th, Kim Kyung Min (pseudonym) a defector who entered Korea in February said, “Lately, there have been many incidents where the military get into brawls with young kids employed by delivery drivers and chauffeurs” and added, “This was something unthinkable in the past, but delivery drivers who transport wholesale goods are now hiring guards in order to protect their goods.”

As Jangmadang (markets) revitalized and more drivers began to load cargo onto their trucks to deliver goods to rural districts via road, protective measures such as guards have been employed as the number of theft by the military becomes more common.

Kim said, “In the past, drivers used government cars and so they were always attacked. However, things have changed now. Drivers bring their cars registering them at factories and businesses, and as a result, 2~3 guards are hired as a proactive way to protect themselves.”

According to Kim, these “bodyguards” employed by drivers were once militants who served in the army. Hence, they are trained in martial arts and fighting skills so that it is possible for a person to combat 2~3 people on his own.

Kim said, “Last year, soldiers put their baggage in the middle of the road on Pyongyang-Hyangsan Highway and wanted for a delivery truck. Thinking that the goods had fallen from a passing truck, the driver stopped his vehicle when three to four soldiers came and threatened him to hand over the goods. At that moment, the kids hired by the driver who were in hiding came and took care of the situation. Businessmen and drivers felt refreshed on hearing this story.”

Secretary general Lee Hae Young of the Association of North Korean Defectors said, “Since the past, soldiers would frequently steal household goods and corn from the country” and explained, “It seems that people have become conscious of protecting their assets.”

This kind of response by the people is a reflection of the real decline in power by the People’s Army.

Following the food crisis in North Korea, corruption amidst governmental officials worsened and soldiers increasingly stole goods from homes. People are widely recognizing the People’s Army as a violent group which steals goods.

Last year August, one Japanese broadcast captured and exposed a footage where a driver and security agent got into a fight in the vicinity of Sariwon, North Hwanghae, after the security agent had smashed a car window. This is what the majority of defectors mean when they respond, “This was something unthinkable in the past.”

These incidents may be a result of increasing individualism and property awareness as the distribution system collapsed. North Korean people analyze that different to the past, people are now increasingly asserting their own authority and not following the ways of the government or military.

Posted in Automobiles, Civil society, Military, Transportation | 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.

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.

Posted in Automobiles, International trade, Sea shipping, Trade Statistics, Transportation | Comments Closed

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.

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

North Korean Economy Watch