Archive for the ‘Railways’ Category

China building new railway lines to DPRK border

Thursday, June 6th, 2013

According to the Wall Street Journal:

On a vast construction site outside this northeastern Chinese city, engineers are working around the clock on a project that could transform the economic—and geopolitical—dynamics of the region: a 223-mile, high-speed rail link to the North Korean border.

The $6.3 billion project is one of three planned high-speed railways designed to bring North Korea closer into China’s economic orbit, even as Beijing supports sanctions aimed at Pyongyang. China is also sinking millions of dollars into new highways and bridges in the area, and the first cross-border power cable.

China’s vision for closer economic integration with North Korea runs counter to a U.S. strategy aimed at piling pressure on Pyongyang to abandon its nuclear-weapons program and refrain from further threats.

(more…)

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DPRK strengthens travel restrictions along Chinese border

Sunday, April 28th, 2013

…More signs of “forward to the past”?

Last week the Daily NK reported that the DPRK had been distributing enough rice to lower the price. It is still unclear if this practice will continue.  This week the Daily NK reports that the DPRK has stepped up travel restrictions along the Chinese border:

The North Korean authorities are operating enhanced controls on transit through the region of the country closest to China, including close checks on the documentation of travellers passing through in the direction of the Sino-North Korean border.

Part of the process means it has become more difficult to obtain travel permits. Although the issuance of such permits was recently resumed following months of combat mobilization and other activities that limited movement, the process of traveling through the border is making life difficulties.

A North Hamkyung Province source told Daily NK on the 26th, “The issuance of travel permits resumed on the 21st of last month, but the procedure when moving in the border region has gotten more demanding than ever. Travel permits need to be approved with not just the signature but also the seal of a person’s local PSM (Ministry of People’s Safety), relevant security agency and workplace, and if the trip is for a traditional ceremonial occasion such as a funeral then they must get a further confirmation letter saying so.”

“In the past, they did not ask for the confirmation letter, or the seal of the local security forces and NSA (National Security Agency, the state security organ) for that matter. But now they are asking for this and that certificate; it’s as if travellers are criminals,” the source said, recalling, “We used to be able to easily get travel permits by bribing people or having close associates in certain positions.”

Even for those with a permit there are still multiple layers of security and checks on the way to the border.

“Even after you get a travel permit by paying bribes, there are still the PSM agents on the trains and railway staff doing hourly checks,” the source said. “People say it is worse than the customs checks on the border.”

“Stations are being locked down by soldiers and then intensive body and baggage checks are taking place at Gomusan (the station before Musan and Hoiryeong on the Musan Line (train 9-10) and Sariwon-Rajin Line (train 113-114)) and at Huchang (the station before Rajin on the Pyongyang-Tumen River Line (train 7-8)),” the source noted. “They even have magnetic detectors for the body checks.”

Travellers ensnared by the checks are supposed to be detained locally until a security agent from his or her area of residence arrives to deal with the case. However, payments of 50,000 to 100,000 Won are apparently sufficient to attain release for those who simply don’t have the right transit permits. The only ones whose release cannot be obtained so easily are those caught with South Korean materials in their baggage; they face re-education or labor camp sentences, sources say.

Read the full story here:
Strain on the Border Trains
Daily NK
Choi Song Min
2013-4-29

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Tanchon Port reconstruction completed

Thursday, April 25th, 2013

Tanchon-port-2012-12-19

Pictured Above (2012-12-13): Tanchon Port

UPDATE 2 (2013-4-25): Yonhap reports on the DPRK’s plans for the Tanchon Port:

North Korea is scurrying to develop the resources-rich city of Tanchon on the east coast as part of the country’s efforts to make it a source of foreign currency income, recent news reports from the North showed.

Tanchon will become a key transit point in shipping goods to and from Russia’s Siberia, the northeastern part of China and Mongolia, said the Wednesday issue of the Choson Sinbo, a Korean language newspaper published by North Korean nationals in Japan.

The newspaper, a mouthpiece of North Korea, said the port city of Tanchon should become the source of finance for the country’s broader policy line of pursuing both economic development and nuclear capacities.
In a bid to boost exports, the country completed the construction of a port in May last year in the city with rich reserves of magnesite, zinc and other mineral resources, which sits about in the middle of the country’s east coast line. the Choson Sinbo said the city has about 5.4 billion tons of magnesite deposit, possibly the third biggest reserve in the world.

The news outlet also highlighted the country’s planned ways to increase earnings in the resources-rich city from which the country used to export mineral resources to China for meager profits.

“North Korea will move to manufacture processed magnesite goods in order to make high-value added goods,” the Choson Sinbo noted. “To that end, many plants will be built in the Tanchon region and the areas will become a new industrial zone.”

North Korean leader Kim Jong-un has also underlined the country’s plan to boost profits from the Tanchon development, saying in a national meeting of light industrial workers last month that profits from Tanchon development should be exclusively used to prop up the livelihood of North Korean people.

UPDATE 1 (2012-5-3): KCNA announces the completion of  the Tanchon Port:

A modern trading port made its appearance in the area of Tanchon in South Hamgyong Province on the occasion of the 100th anniversary of President Kim Il Sung’s birth.

The construction of the port with a cargo traffic capacity of millions of tons provides a guarantee for greatly contributing to developing the nation’s foreign trade and improving the people’s living standard.

A ceremony for the completion of the construction was held on the spot Thursday.

Present there were Choe Yong Rim, Kwak Pom Gi, Ro Tu Chol and other officials concerned, officials of the Ministry of Land and Marine Transport, builders and working people of industrial establishments in Tanchon City.

Read out there was a joint congratulatory message sent by the Central Committee of the Workers’ Party of Korea and the Cabinet of the DPRK to the officials and members of shock brigades who performed labor feats in the construction of the port.

The message highly praised them for successfully building another giant structure in the era of Songun greatly conducive to building an economic power true to the life-time desires and last instructions of President Kim Il Sung and leader Kim Jong Il.

It expressed belief that they would perform greater feats in the efforts for the country’s prosperity united close around the WPK Central Committee headed by the dear respected Kim Jong Un.

Minister of Land and Marine Transport Kang Jong Gwan, in his speech made for the occasion, said the construction of the port was a brilliant fruition of the wise leadership of Kim Jong Il who initiated the construction of the port and worked heart and soul to translate the desire of the President into a reality till the last moments of his revolutionary life and the clear-sighted guidance and meticulous care of Kim Jong Un.

Speakers at the ceremony pledged themselves to carry out their tasks including dredging in a short span of time in the same spirit as displayed in the construction of the port.

At the end of the ceremony the participants looked round different places of the port.

You can see video of the port inauguration here. (KCNA)

Just a few days ago, the Choson Sinbo reported the following (via Yonhap):

The North is estimated to have 15 billion tons of anthracite coal, a key mineral Pyongyang uses to produce steel, the Choson Sinbo newspaper said.

The North also has an estimated 5.4 billion tons of magnesite in Tanchon, a home to mines in South Hamgyong province, and other areas, according to the newspaper.

North Korea is set to open Tanchon as a modern trade port, the newspaper said, without giving any specific time frame for the opening.

ORIGINAL POST (2010-12-9): On December 2, KCNA announced that Kim Jong-il visited the port in Tanchon County, South Hamgyong County (40.412522°, 128.917731°) where he gave guidance on the port’s reconstruction.

Judging by the satellite imagery of the area on Google Earth, it appears that the project had already begun by May 13, 2009, where we can see concrete blocks ready to be used to extend the jettys (breakwaters).  I have outlined the proposed port project on Google Earth imagery below and provided a picture of the completed project from KCTV:

After the jettys are extended, the major construction work and dredging can begin.  Below are images of the port’s main construction site as it appears on Google Earth and a prediction of the project’s conclusion from KCNA:

It appears from the picture that the port will be connected to the railway system—likely via the nearby Tanchon Smeltery and Magnesia Plant (both recently renovated) whose products will probably be exported from the port.

Tanchon is also home to the DPRK’s Komdok and Taehung Youth Hero Mines (among others).  As is well known to readers, raw materials exports are the DPRK’s most significant (legal and transparent) source of hard currency.  According to Yonhap’s North Korea Handbook 2002:

Geomdeok [Komdok] Mine is a special company in Bonsan-dong, Dancheon, South Hamgyeon Province, and is very famous for about 300 million tons of deposited leads and zincs. This mine annually produces 52,000 tons of lead, 124,000 tons of zinc, both of which account for 47% of total production in North Korea, and more than twice as much as the production of Eunpa Mine, North Korea’s second largest mine, in Eunpa-gun North Hwanghae Province. Concentrates of lead and zinc produced from Geomdeok Mine are processed into electric zinc at Dancheon refinery. Opened in 1932, this mine produces 14,200 tons of raw ore annually with three ore dressing plants. Annual production capacity can reach up to 11 million tons. The first dressing plant was completed in July 1953, near the end of the Korean War. It now processes a million tons of ore a year. The second dressing plant was opened with a production capacity of 3,200 tons of ore. The third one constructed in September 1983 can process 10 million tons of ore.

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2013 plenary meeting of WPK Central Committee and 7th session of Supreme People’s Assembly

Monday, April 1st, 2013

On March 31, KCNA reported on the recent plenary meeting of the Korean Worker’s Party:

The historic March, 2013 plenary meeting of the Central Committee of the Workers’ Party of Korea took place at the building of the WPK Central Committee, supreme staff of the Korean revolution, on Sunday.

First Secretary of the WPK Kim Jong Un guided the meeting.

Present at the meeting were members and alternate members of the WPK Central Committee and members of the Central Auditing Commission of the WPK.

Present there as observers were senior officials of ministries, national institutions, provincial, city and county committees of the WPK, complexes, major munitions factories and enterprises.

The participants paid silent tribute to President Kim Il Sung and leader Kim Jong Il.

Taken up for discussion at the meeting were the following agenda items “1. On tasks of our Party on bringing about a decisive turn in accomplishing revolutionary cause of Juche as required by the present situation and the developing revolution”, “2. On personnel affairs issue to be submitted to the 7th Session of the 12th Supreme People’s Assembly” and “3. On organizational matter”.

Kim Jong Un made a report and concluding speech on the first agenda item.

The plenary meeting set forth a new strategic line on carrying out economic construction and building nuclear armed forces simultaneously under the prevailing situation and to meet the legitimate requirement of the developing revolution.

This line is a brilliant succession and development onto a new higher stage of the original line of simultaneously developing economy and national defence that was set forth and had been fully embodied by the great Generalissimos.

It was stressed at the meeting that the party’s new line is not a temporary countermeasure for coping with the rapidly changing situation but a strategic line to be always held fast to, in the supreme interests of the Korean revolution.

The nuclear weapons of Songun Korea are not goods for getting U.S. dollars and they are neither a political bargaining chip nor a thing for economic dealings to be presented to the place of dialogue or be put on the table of negotiations aimed at forcing the DPRK to disarm itself.

The DPRK’s nuclear armed forces represent the nation’s life which can never be abandoned as long as the imperialists and nuclear threats exist on earth. They are a treasure of a reunified country which can never be traded with billions of dollars.

Only when the nuclear shield for self-defence is held fast, will it be possible to shatter the U.S. imperialists’ ambition for annexing the Korean Peninsula by force and making the Korean people modern slaves, firmly defend our ideology, social system and all other socialist treasures won at the cost of blood and safeguard the nation’s right to existence and its time-honored history and brilliant culture.

When the party’s new line is thoroughly carried out, the DPRK will emerge as a great political, military and socialist economic power and a highly-civilized country which steers the era of independence.

The meeting set forth tasks for carrying out the new line and ways for doing so.

All the officials, party members and other people should wage bold offensive and all-people decisive battle with faith in sure victory and strong determination and thus make the flame of miracle and innovation sweep all fields of national economy.

The pilot fields of the national economy, the basic industrial fields should be drastically developed and production be increased to the maximum. Forces should be directed to agriculture and light industry, key fields in building an economic power to improve and put on a stable basis the people’s living standard at the earliest possible date.

The self-reliant nuclear power industry should be developed and the work for developing light water reactor be dynamically promoted to actively contribute to easing the strain on the electricity problem of the country.

Spurs should be given to the development of space science and technology and more advanced satellites including communications satellites be developed and launched.

The country’s economy should be shifted into knowledge-based economy and the foreign trade be made multilateral and diversified and investment be widely introduced.

The economic guidance shall be fundamentally improved as required by the new situation and Korean-style advantageous economic management methods be completed by embodying the Juche idea.

The DPRK’s possession of nukes should be fixed by law and the nuclear armed forces should be expanded and beefed up qualitatively and quantitatively until the denuclearization of the world is realized.

The People’s Army should perfect the war method and operation in the direction of raising the pivotal role of the nuclear armed forces in all aspects concerning the war deterrence and the war strategy, and the nuclear armed forces should always round off the combat posture.

As a responsible nuclear weapons state, the DPRK will make positive efforts to prevent the nuclear proliferation, ensure peace and security in Asia and the rest of the world and realize the denuclearization of the world.

Institutions in charge of security and safeguard, judicial and prosecution and people’s security and the Korean People’s Internal Security Forces should resolutely foil the vicious moves of the imperialist reactionaries and class enemies, devotedly defend the party, social system and people and surely guarantee the new line of the party with arms and by law.

The party and working people’s organizations and power bodies should increase their militant function and role in every way in the struggle for implementing the party’s line.

The meeting entrusted the Presidium of the SPA and the Cabinet with the matters of taking legal, administrative and technical measures for implementing the tasks.

At the meeting a decision on the first agenda item “On carrying out economic construction and building nuclear armed forces simultaneously and thus bringing earlier the final victory in the cause of building a thriving socialist nation” was adopted with unanimous approval.

The second agenda item, personal affairs issue to be submitted to the 7th Session of the 12th SPA, was discussed and decided at the meeting.

The meeting also dealt with an organizational matter, its third agenda item.

Members of the Presidium of the Political Bureau of the WPK Central Committee, members and alternate members of the Political Bureau were recalled and new ones were elected to fill vacancies.

Pak Pong Ju was elected to fill a vacancy of a member of the Political Bureau of the WPK Central Committee.

Hyon Yong Chol, Kim Kyok Sik and Choe Pu Il were elected to fill vacancies of alternate members of the Political Bureau of the WPK Central Committee.

Members and alternate members of the WPK Central Committee were recalled and new ones were elected to fill vacancies.

Upon authorization of Kim Jong Un, Paek Kye Ryong was appointed as director of the Light Industrial Department of the WPK Central Committee and Yun U Chol as editor-in-chief of Rodong Sinmun, organ of the WPK Central Committee.

Members of the Central Auditing Commission of the WPK were also recalled and new ones were elected to fill vacancies.

Here is a video of Kim Jong-un’s speech:

Here is a transcript of the speech in English.

The strategy of pursuing both economic development and nuclear power was highlighted in both the DPRK and international media: Pyongyang Times, Joong Ang Ilbo, New York Times, Yonhap, Choson Ilbo.

Here is analysis from IFES:

Central Committee of the Workers’ Party of Korea Stresses Development of Agricultural, Light, and Nuclear Industries
Institute for Far Eastern Studies (IFES)
2013-4-4

The Korean Central News Agency (KCNA) reported on March 31 that a plenary meeting of the Central Committee of the ruling Workers’ Party of Korea was held. At the meeting, a new strategic line was announced to have been set, which called for building a stronger economy and nuclear arsenal. This meeting is drawing attention as it is suspected that Pyongyang will pursue a new economic policy.

The news described the new strategic line as, “most revolutionary and people oriented policy for the construction of a powerful socialist nation by consolidating defense capacity through development of defensive nuclear weapons and economic construction.”

It stressed that this policy is significant as a “creative and parallel policy for defense and economy continuing the policies of Kim Il Sung and Kim Jong Il, which must be adopted as a permanent strategy.”

At the plenary meeting, the main agendas for the parallel policy of economy and defense were announced as: 1) Improvement of the production of people’s economy and capacity enhancement for agricultural and light industries to stabilize prices to improve the lives of the people; 2) development of self-reliant nuclear power industry and light water reactors; 3) development and launch of more satellites including communication satellites through advancement in space science and technology; 4) transition to knowledge economy and diversification of foreign trade to vitalize foreign investments; and 5) establish legislation to be recognized as a nuclear state and develop nuclear arsenal both in quantity and quality until denuclearization is realized worldwide.

At the plenary, the new parallel policy was commended, “The supremacy of the policy is demonstrated by expanding capability in war deterrence and national defense without increasing defense budget and enabled concentration on economic development and improvement of the lives of the people.”

The statement released by the KCNA stated that the plenary meeting’s emphasis on transition to knowledge economy and diversification of foreign trade as the main tasks and appears to be pursuing a “fundamental improvement in economic leadership.”

In addition, the plenary assigned the presidium of the Supreme Peoples’ Assembly and the Cabinet to serve as the economic control tower to oversee the future projects decided at the plenary meeting.

North Korea is continuing to place emphasis on light and agricultural industries. The Kim Jong Un regime entered its second year. The leader was reported to have attended the light industry conference, which was held for the first time in ten years and underscored the importance of concentrating on development of the capacity of light industry.

The new Korean line, 병진 (Pyongjin, Byungjin) is the simultaneous development of nuclear weapons and the economy. Learn more about it here.

Following the central committee plenary meeting, the 7th Session of the 12th Supreme People’s Assembly was held. According to KCNA:

The Seventh Session of the 12th Supreme People’s Assembly (SPA) of the DPRK took place at the Mansudae Assembly Hall Monday.

Kim Jong Un, first secretary of the Workers’ Party of Korea, first chairman of the National Defence Commission of the DPRK and supreme commander of the Korean People’s Army, was present at the session.

Present there were deputies to the SPA.

Also present there as observers were officials of party, armed forces and power bodies, public organizations, ministries and national institutions and those in the fields of science, education, literature and art, public health and media.

All the participants observed a moment’s silence in memory of President Kim Il Sung and leader Kim Jong Il in humblest reverence.

The session decided the following agenda items of the Seventh Session of the 12th SPA of the DPRK:

1. On amending and supplementing some contents of the Socialist Constitution of the DPRK

2. On adopting the DPRK Law on the Kumsusan Palace of the Sun

3. On adopting the ordinance of the SPA of the DPRK “On Consolidating the Position of Nuclear Weapons State for Self-Defence”

4. On adopting the DPRK Law on Developing Space

5. On adopting the decision of the SPA of the DPRK “On Setting up the DPRK State Space Development Bureau”

6. On the work of the DPRK Cabinet for Juche 101 (2012) and its tasks for Juche 102 (2013)

7. On the review of the fulfillment of the DPRK’s state budget for Juche 101 (2012) and state budget for Juche 102 (2013)

8. Organizational matter

The session discussed the first and second agenda items.

Deputy Kim Yong Nam, president of the Presidium of the DPRK SPA, made a report on amendment and supplement to some contents of the Socialist Constitution of the DPRK and on adopting the law on the Kumsusan Palace of the Sun.

Then followed speeches on the first and second agenda items.

Deputy Kim Ki Nam, secretary of the WPK Central Committee, spoke on behalf of the WPK, Deputy Choe Ryong Hae, director of the General Political Bureau of the KPA, on behalf of the KPA and Deputy Jon Yong Nam, chairman of the C.C., the Kim Il Sung Socialist Youth League, on behalf of the youth.

The speakers fully supported and approved of deliberation and adoption of the draft amendment and supplement to the Socialist Constitution of the DPRK and the law on the Kumsusan Palace of the Sun at the current SPA session reflecting the unanimous feelings of all party members, service personnel and youth across the country.

The ordinances of the SPA of the DPRK “On Amending and Supplementing Some Contents of the Socialist Constitution of the DPRK” and “On Adopting the DPRK Law on the Kumsusan Palace of the Sun” were adopted at the session with the approval of all deputies.

The session discussed the third, fourth and fifth agenda items.

The ordinances of the SPA of the DPRK “On Consolidating the Position of Nuclear Weapons State for Self-Defence” and “On Adopting the DPRK Law on Developing Space” and the decision of the SPA of the DPRK “On Setting Up the DPRK State Space Development Bureau” were adopted at the session with the approval of all deputies.

Deputy Choe Yong Rim, premier of the Cabinet, made a report on the sixth agenda item.

Deputy Choe Kwang Jin, minister of Finance, made a report on the seventh agenda item.

Then followed speeches on the sixth and seventh agenda items. Written speeches were presented at the session.

The speakers noted that the Cabinet work and the fulfillment of the state budget for last year were correctly reviewed and summed up, clear tasks of the Cabinet were set forth to meet the requirements of the general offensive to open an epochal phase in building an economic power at the final stage of the all-out action against the U.S. and the state budget was correctly shaped. They expressed full support and approval of them.

They expressed their determination to reenergize the overall economy of the country, step up the grand advance for improving the standard of people’s living to make loud shouts of hurrah for the Workers’ Party and socialism heard this year marking the 65th anniversary of the DPRK and the 60th anniversary of the victory in the Fatherland Liberation War, true to the historic New Year Address of Kim Jong Un and the decision of the March, 2013 plenary meeting of the WPK Central Committee.

The decision of the SPA of the DPRK “On Approval of the Report on the Work of the DPRK Cabinet and the Review of the Fulfillment of the State Budget for Juche 101 (2012)” and the ordinance of the SPA of the DPRK “On the DPRK’s State Budget for Juche 102 (2013)” were adopted at the session with the approval of all deputies.

The session discussed the organizational matter.

At the session Deputy Choe Yong Rim was recalled from the post of premier of the DPRK Cabinet and Deputy Pak Pong Ju was elected premier of the DPRK Cabinet at the proposal of the WPK Central Committee.

Choe Yong Rim was elected honorary vice-president of the Presidium of the DPRK SPA.

Deputies Kim Jong Gak and Ri Myong Su were recalled from the posts of member of the DPRK National Defence Commission (NDC) due to the transfer to other jobs.

Deputies Kim Kyok Sik and Choe Pu Il were elected members of the DPRK NDC to fill vacancies at the proposal of the WPK Central Committee and the WPK Central Military Commission.

Deputy Thae Hyong Chol was recalled from the post of secretary general of the Presidium of the DPRK SPA and Deputy Hong Son Ok was elected secretary general of the Presidium of the DPRK SPA.

Some members of the Cabinet were relieved of their posts and appointed at the session.

Deputy Pak Pong Ju, premier of the DPRK Cabinet, took an oath at the SPA.

Michael Madden does a great job summarizing the personnel changes made at the party and SPA in this 38 North piece.

The elevation of Pak Pong-ju received much attention in the west: Daily NK, Washington Post, Yonhap, Reuters,

KCNA also issued several reports that stemmed from the SPA meeting:

Report on Adopting Draft Amendment and Supplement to Socialist Constitution and Law on Kumsusan Palace of Sun

Pyongyang, April 1 (KCNA) — Kim Yong Nam, president of the Presidium of the Supreme People’s Assembly, made a report on adopting the draft amendment and supplement to the Socialist Constitution of the DPRK and the law on the Kumsusan Palace of the Sun.

According to the report, the draft amendment and supplement to the Socialist Constitution and the law on the Kumsusan Palace of the Sun to be submitted to the session for discussion will legalize the plan and intention of the Workers’ Party of Korea to fix by law the shining achievements made in accomplishing the cause of perpetuating the memory of the leaders and complete it on a new higher stage.

To be supplemented to the preface of the Socialist Constitution is the sentence which says that the Kumsusan Palace of the Sun where President Kim Il Sung and leader Kim Jong Il lie in state is a grand edifice for the immortality of the leaders, a symbol of the dignity of the whole Korean nation and its eternal sacred temple.

The law on the Kumsusan Palace of the Sun specifies that its noble mission is to preserve and glorify forever the palace, which is the supreme temple of Juche, as the eternal temple of the sun of the entire Korean nation.

The law stipulates that Kim Il Sung and Kim Jong Il will be held in high esteem forever as in their lifetime at the Kumsusan Palace of the Sun and that it is the obligation of all the Koreans to regard the Palace as a symbol of dignity and a great pride of the nation.

It also specifies the state duty to spruce up the Palace in a sublime and perfect way with the state, all-people and nationwide efforts and devotedly safeguard the Palace in every way so that no one can violate.

Also stipulated in the law are matters for carrying out the work of eternally preserving the Palace as the most important state work with consistency, organizing the committee for the eternal preservation of the Palace and preserving for photos, train coaches, cars, boat and other relics and orders which represent the noble lives of the great Generalissimos.

Orders were also set so that Korean people, overseas Koreans and foreigners can pay respects to the great Generalissimos at the Kumsusan Palace of the Sun.

Also mentioned in the law are the matters of establishment of special sanctuary of the Palace for its protection and management as well as the management of buildings in the premise of the palace, park, arboretum, outdoor lighting and lighting facilities and orders concerning the operation of the plaza and the park of the Palace.

It was specified in the law that electricity, facilities, materials and other supplies needed for the Palace shall be planned separately and be provided without fail on a top priority basis. The law also set the duty to be fulfilled by relevant institutions to strictly supervise and control on a regular basis the work for safeguarding, eternally preserving and providing the conditions for the management and operation of the Palace.

The reporter said that the law on the Kumsusan Palace of the Sun is the unique code for the immortality of the leaders, adding that it is the biggest honor for the army and people of the DPRK to have the legal weapon for the immortality of the leaders.

The adoption of the law will serve as a historic occasion for defending and further glorifying the idea on perpetuating the memory of the leaders clarified by the dear respected Kim Jong Un, he stressed.

The reporter said that the Presidium of the Supreme People’s Assembly of the DPRK submits the draft amendment and supplement to the Socialist Constitution and the draft law on the Kumsusan Palace of the Sun to the SPA session for discussion according to Article 95 of the Socialist Constitution.

And…

DPRK’s Law on Kumsusan Palace of Sun Adopted

Pyongyang, April 1 (KCNA) — The DPRK’s Law on the Kumsusan Palace of the Sun was adopted.

The ordinance of the DPRK Supreme People’s Assembly on it was promulgated Monday.

The Kumsusan Palace of the Sun where President Kim Il Sung and leader Kim Jong Il lie in state is the
eternal temple of the sun of the whole Korean nation.

The ordinance says that the SPA decides to adopt this law to eternally preserve and glorify forever the
Kumsusan Palace of the Sun as a grand edifice for the immortality of the leaders symbolic of Kim Il Sung’s and Kim Jong Il’s Korea.

And…

Law on Consolidating Position of Nuclear Weapons State Adopted

Pyongyang, April 1 (KCNA) — A law on consolidating the position of nuclear weapons state for self-defence was adopted in the DPRK.

An ordinance of the Supreme People’s Assembly of the DPRK in this regard was promulgated on Monday.

The ordinance said as follows:

The DPRK is a full-fledged nuclear weapons state capable of beating back any aggressor troops at one strike, firmly defending the socialist system and providing a sure guarantee for the happy life of the people.

Having an independent and just nuclear force, the DPRK put an end to the distress-torn history in which it was subject to outside forces’ aggression and interference and could emerge a socialist power of Juche which no one dares provoke.

The Supreme People’s Assembly of the DPRK decides to consolidate the position of the nuclear weapons state as follows:

1. The nuclear weapons of the DPRK are just means for defence as it was compelled to have access to them to cope with the ever-escalating hostile policy of the U.S. and nuclear threat.

2. They serve the purpose of deterring and repelling the aggression and attack of the enemy against the DPRK and dealing deadly retaliatory blows at the strongholds of aggression until the world is denuclearized.

3. The DPRK shall take practical steps to bolster up the nuclear deterrence and nuclear retaliatory strike power both in quality and quantity to cope with the gravity of the escalating danger of the hostile forces’ aggression and attack.

4. The nuclear weapons of the DPRK can be used only by a final order of the Supreme Commander of the Korean People’s Army to repel invasion or attack from a hostile nuclear weapons state and make retaliatory strikes.

5. The DPRK shall neither use nukes against the non-nuclear states nor threaten them with those weapons unless they join a hostile nuclear weapons state in its invasion and attack on the DPRK.

6. The DPRK shall strictly observe the rules on safekeeping and management of nukes and ensuring the stability of nuclear tests.

7. The DPRK shall establish a mechanism and order for their safekeeping and management so that nukes and their technology, weapon-grade nuclear substance may not leak out illegally.

8. The DPRK shall cooperate in the international efforts for nuclear non-proliferation and safe management of nuclear substance on the principle of mutual respect and equality, depending on the improvement of relations with hostile nuclear weapons states.

9. The DPRK shall strive hard to defuse the danger of a nuclear war and finally build a world without nukes and fully support the international efforts for nuclear disarmament against nuclear arms race.

10. The related institutions shall take thorough practical steps for implementing this ordinance.

And…

DPRK Law on Developing Space Adopted

Pyongyang, April 1 (KCNA) — The Law on Developing Space was adopted in the DPRK.

The ordinance of the DPRK Supreme People’s Assembly on it was promulgated Monday.

And…

DPRK SPA Decides to Set Up State Space Development Bureau

Pyongyang, April 1 (KCNA) — The DPRK decided to set up the State Space Development Bureau.

The decision of the Supreme People’s Assembly (SPA) of the DPRK promulgated on Monday said:

The DPRK is a full-fledged satellite manufacturer and launcher.

It is an invariable stand of the DPRK to develop the country into a world-class space power by exercising its legitimate right to space development for peaceful purposes.

To step up economic construction and improve the people’s standard of living by radically developing the space science and technology of the country and guide and manage all the space activities of the DPRK in a uniform way, the SPA decides as follows:

1. The DPRK State Space Development Bureau shall be set up.

2. The bureau is a state central institution which guides and manages the supervision and control over the working out of a space development program and its implementation and space development work in a uniform way.

3. The Cabinet of the DPRK and other institutions concerned shall take practical measures to implement this decision.

And…

Work of Cabinet for Last Year and Tasks for This Year

Pyongyang, April 1 (KCNA) — At the 7th Session of the 12th Supreme People’s Assembly held on Monday, Deputy and Premier Choe Yong Rim made a report on the last year’s work of the DPRK Cabinet and this year’s tasks.

According to the report, last year electricity and coal production and the volume of railway freight transport increased amid the endeavors to shore up the four pilot fields of the national economy. Increase was also made in the production of a variety of industrial goods, the report said, and went on:

The Kumsusan Palace of the Sun was remodeled to be the supreme temple of Juche, the National Gifts Exhibition House, Pyongyang Folklore Park, Changjon Street, Rungna People’s Pleasure Park and other big edifices in the era of Songun have been built.

Big industrial projects such as the Huichon Power Station, Tanchon Port, Taedonggang Building Materials Factory were completed and technological updating and modernization of major factories and enterprises in the field of metal, machine, chemical and light industries have been pushed forward, consolidating the material and technological foundation of the national economy.

Satellite Kwangmyongsong 3-2 was successfully manufactured and launched and the third underground nuclear test by the use of smaller and lighter A-bomb of great explosive power was successfully conducted.

The bases for the production of cutting-edge technical goods were built and projects for the development of science and technology have been successfully carried out and the modernization of the information and communications field have been stepped up.

A law on the enforcement of the universal 12-year compulsory education was promulgated. This paved a wide avenue for consolidating the socialist education system and raising the quality of education.

In the field of health care, a telemedicine service has been successfully introduced. The DPRK’s players glorified the honor of the country at major international sports events including the 30th Olympic Games and other signal achievements were made in the field of cultural construction.

The reporter said that this year’s tasks are to realize at an early date the lifetime desire of President Kim Il Sung and leader Kim Jong Il, who devoted their whole lives to putting the country’s economy on the level of a prosperous and powerful country and to making the people live with no more to desire in the world.

According to the report, this year the Cabinet will organize the economic work with a main emphasis on solving issues arising in the people’s living by shoring up the pilot fields, the basic industrial field, consolidating the springboard for building an economic power and concentrating all efforts on agriculture and light industry while regarding coal industry and metal industry as key fields.

It is necessary to increase the production of coal.

Technological updating and modernization of iron works and steel works will be stepped up while improving the bases for the production of Juche iron which have already been built in the field of metal industry. Strict measures for supplying raw materials and fuel should be taken to increase the production of rolled steel more than 3.5 times as compared with last year and thus meet the need for steel.

The field of railway transport will ease strain on transport by consolidating the material and technical foundation of railways.

The grain production plan for this year should be carried out without condition.

The whole country should make efforts for the reclamation of Sepho Tideland and the construction of stock-breeding bases and thus complete the creation of grassland within this year.

The production should be put at a high rate at major chemical factories and the percentage of locally available raw materials should be significantly increased. The production at mines, factories and enterprises in Tanchon area should be increased and exports be boosted to ensure in a responsible manner funds for improving the people’s living standard.

Big efforts should be directed to the construction of dwelling houses. Wonsan area should turn into a world-level resort and tourist destination and living environment and conditions be improved in provinces, cities and counties.

The state investment in the field of science and technology should be increased and the flame of industrial revolution in the new century be raised so as to bring about a decisive turn in building an economic power by dint of science and technology.

Ultra-modern technological goods of high competitiveness should be massively researched and developed. Scientific and technological issues arising in the technological updating and modernization of the national economy should be satisfactorily solved.

The state investment will be increased in education and the preparations for enforcing the universal 12-year compulsory education system be rounded off within this year and fresh progress be made in education, public health, literature, arts, sports and all other fields of cultural construction.

All the fields and units of the national economy should build under a long-term plan export bases for producing second-stage and third-stage processed goods and finished goods of high competitiveness at international markets by relying on locally available resources and indigenous technology. Latest scientific and technological achievements should be positively introduced to increase the varieties of exports and remarkably raise their quality.

Trade should be made diversified and multilateral while conducting a variety of trade activities. The joint venture and collaboration should be actively promoted and the work for setting up economic development zones be pushed forward.

And…

Review of Fulfillment of State Budget for Last Year and State Budget for This Year

Pyongyang, April 1 (KCNA) — Deputy Choe Kwang Jin, minister of Finance, made a report on the review of the fulfillment of state budget for last year and the state budget for this year at the 7th Session of the 12th Supreme People’s Assembly held on Monday.

According to the report, the state budgetary revenue last year was over-fulfilled by 1.3 percent, an increase of 10.1 percent over the previous year.

The plan for local budgetary revenue was carried out at 113.8 percent.

The state budgetary expenditure was implemented at 99.6 percent, an increase of 9.7 percent over that in the previous year.

44.8 percent of the total state budgetary expenditure for the economic development and improvement of people’s living standard was used for funding the building of edifices to be presented to the 100th birth anniversary of President Kim Il Sung, the consolidation of the material and technological foundation of Juche-based, modern and self-supporting economy and the work for face-lifting the country.

38.9 percent of total expenditure was spent for enforcing popular policies and measures for social culture under socialism such as the universal free compulsory education system, free healthcare, social insurance and social security, recuperation and relaxation systems as well as those for development of literature and art and building of a sports power.

Some of the total state budgetary expenditure went to national defence.

According to the report, this year’s state budgetary revenue and expenditure have been shaped in such a way as keeping the overall economy afloat and bringing about a decisive turn in stabilizing and improving the standard of people’s living.

The state budgetary revenue is expected to increase 4.1 percent over that last year.

Out of this, the transaction tax, main source of budgetary revenue, is expected to grow 3.5 percent, the revenue from the profits of state enterprises 6 percent, revenue from the profits of cooperative enterprises 5.3 percent, the revenue from the depreciation 2.8 percent and revenue from real estate rent 3.4 percent.

In the total state budgetary revenue, national budgetary revenue will account for 83 percent and local budgetary revenue 17 percent.

Provinces, cities and counties are envisaged to ensure expenditure with local import and put a huge amount of fund into national budget.

The state budgetary expenditure is expected to grow 5.9 percent over last year.

It was decided to increase expenditure in the field of coal, electricity, metal and railway transport 7.2 percent, the field of agriculture and light industry 5.1 percent, basic investment in capital construction and big overhaul 5.8 percent, the field of science and technology 6.7 percent, the field of education 6.8 percent, the field of public health 5.4 percent, the field of social insurance and security 3.7 percent, the field of sports 6.1 percent and the field of culture 2.2 percent.

Some of the total state budgetary expenditure will go for national defence.

A large amount of educational aid fund and stipends will be sent for the education of Korean children in Japan to promote the development of the democratic national education of the General Association of Korean Residents in Japan.

The reporter called for working hard to glorify this significant year marking the 65th anniversary of the DPRK and the 60th anniversary of the victory in the Fatherland Liberation War as a year of gigantic creation and innovations, in hearty response to the historic New Year Address by Kim Jong Un and the decision made at the March, 2013 plenary meeting of the WPK Central Committee.

Here is what Yonhap had to say about the DPRK’s defense budget:

North Korea is expected to spend 16 percent of its budget on national defense in 2013, up 0.2 percentage point from the year before, the country’s state media said Tuesday.

According to the Rodong Sinmun, an organ of the North’s ruling Workers’ Party, Finance Minister Choe Kwang-jin reported to a meeting of the Supreme People’s Assembly in Pyongyang on Monday that the money is needed to effectively cope with “indiscriminate” provocations by the United States and its followers.

The paper, however, did not disclose the exact size of the defense budget, although South Korea’s unification ministry speculated that last year’s military budget totaled US$910 million.

The proportion of the spending plan compared to the overall budget, is the highest tallied since 1998, according to South Korean analysts.

From 1998 through 2002, the North is estimated to have spent 14.4 percent to 14.5 percent of its annual budget on defense, with numbers going up and being fixed at 15.8 percent in the 2007-2012 period, they said.

Additional information:
1. Here and here is KCTV footage of the SPA meeting.

2. Here is a link to all the info for the 6th session of the SPA. It contains links to sessions 1-5 as well.

3. On 5.31 news of economic adjustment measures announced during the meetings was published.

4. The Choson Ilbo and Yonhap report on the new cabinet members.

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China-North Korea railway links to undergo upgrade

Tuesday, March 26th, 2013

Tumen-namyang-rail-2011-9-23

Pictured Above (Google Earth): The Namyang (DPRK) – Tumen (PRC) rail and bridge crossings. I suspect that this is the specific area that will see renovation

According to the Global Times:

The government of northeast China’s Jilin Province announced Tuesday plans to upgrade railways links to neighboring North Korea, aiming to boost cross-border economic and trade ties.

The China Tumen-North Korea Rajin Railway and China Tumen-North Korea Chongjin Railway will be upgraded under the Jilin government plan. A special highway passenger line linking Tumen to North Korea is also set to be opened in coming years.

The plan aims to improve the industrial cooperation between China and North Korea’s Rason and push the development of the Tumen Korean Industrial Park to a higher level.

Jin Qiangyi, director of the Asia Research Center of Yanbian University, told the Global Times that the industrial cooperation between China and North Korea has been going on for many years and does not breach international sanctions against Pyongyang.

Such cooperation could improve employment in border areas of both countries and contribute to development and stability in the area amid heightening tensions, said Jin.

Read the full story here:
China-North Korea railway links to undergo upgrade
Global Times
2013-3-27

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Nuke test does not deter China’s economic interests in the DPRK

Thursday, February 28th, 2013

According to Reuters:

While Beijing has not made clear whether the test would disrupt its investment plans for the Rason economic zone, an official at the zone’s joint management office told Reuters that all previously announced Chinese projects for the zone remain on track, including a power line from China to ease acute electricity shortages there.

“All the people of the management office are still here working as usual… If there is any major impact (from the nuclear test), do you think we would still be here?” he said by phone from Rason, which lies near where North Korea, China and Russia converge. “All works are proceeding as planned.”

There are about 60 Chinese and North Korean people working at the management office, and the number may grow with the launch of more projects, said the official, who declined to be identified as he was not authorized to speak to the media.

China and North Korea jointly set up the Rason management committee in October to handle the planning, construction and development of the zone, also known as Ranjin-Songbong, one of the country’s highest profile economic projects.

“China has normal relations with North Korea. We will conduct normal trade and economic exchanges with North Korea,” Hua Chunying, China’s foreign ministry spokeswoman, said when asked whether China would continue to work with North Korea to develop its special economic zones after the nuclear test.

Led by China’s commerce ministry, Chinese firms, including State Grid Corp, Jilin Yatai (Group) and China Railway Construction Group and other state enterprises, have indicated interest in investing in power, building materials, transport and agriculture projects in the zone.

Yatai, a Shanghai-listed cement and coal producer, signed a framework agreement last year with the North Korean government to construct a 500,000-square-metre building materials industrial park, including a cement plant, in Rason.

State Grid finished the final review of the feasibility study of the 97.8-kilometre power line early this year, but has not started construction as it has not yet won all approvals, the official and a source close to the plan said.

The planned line would cut through a Siberian tiger natural reserve, and State Grid is awaiting a green light from China’s National Development and Reform Commission and coordinating with various other authorities, the source told Reuters.

There is no timetable for the project as State Grid is unsure when it would receive government approvals, he added. State Grid was not immediately available for comment.

Jilin Yatai may delay its cement project in Rason — which is critical to the construction of other projects such as the railway there — due to “issues on the North Korean side,” said an official at Yatai’s securities office.

But the likely delay of the project was not related to the nuclear test, the official said by phone from Changchun, capital city of Northeast China’s Jilin province, which borders North Korea. He declined further comment.

In a filing with the Shanghai bourse in August, Yatai said it planned to complete the construction of its first cement plant in North Korea by September this year only if there is sufficient power capacity available.

Read the full story here:
China moves ahead with North Korea trade zone despite nuclear test
Reuters
2013-2-28

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Taedonggang Fruit Processing Factory Railway Line

Friday, September 14th, 2012

Pictured above (Google Earth): The new Taedonggang Fruit Processing Factory Railway Line (in yellow). I previously blogged about this railway line here.

On August 31, KCNA announced “Railway line of Taedonggang Combined Fruit Processing Factory goes operational” and that the opening ceremony was attended by staff from the Ministry of People’s Security (MPS) and Korean People’s Internal Security Forces (KPISF). The KPISF is part of the MPS.

The presence of so many security personnel might seem odd for the opening of a railway line that is intended to provide fruit products to North Korean consumers. However, because this very same railway line connects the Kim family compound in Kangdong with the city of Phyongsong by rail (See above map), the heavy security presence seems understandable.  This railway line will be heavily watched.

The interesting (and speculative) takeaway is that it might be the case that security for the Kim family is now under the portfolio of the KPISF and not the State Security Department (SSD, Ministry of State Security, anjon-bowibu), KPA, or Military Security Command.

To learn more about the North Korean security services, check out: Coercion, Control, Surveillance, and Punishment: An Examination of the North Korean Police State by Ken E. Gause.

Below is the complete report featured in KCNA:

Railway Line of Taedonggang Combined Fruit Processing Factory Goes Operational

Pyongyang, August 31 (KCNA) — A new railway line branching into the Taedonggang Combined Fruit Processing Factory went operational with due ceremony on Friday.

The operation of the railway line helps satisfactorily carry fruits and processed goods produced by the Taedonggang Combined Fruit Farm and factories in this area and materials necessary for their management and operation.

Present at the ceremony were officials of the Ministry of People’s Security, servicepersons of the Korean People’s Internal Security Forces, officials concerned, builders and employees of the factory.

At the end of the ceremony the first train carrying fruits to be supplied to Pyongyang citizens left the factory.

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China does [not?] commit to new infrastructure investment in Rason

Wednesday, February 15th, 2012

UPDATE 2 (2012-4-12): North Korea and China attracting investors for Rajin Port development (IFES):

China is currently actively recruiting investors to build additional wharfs in Rajin Port.

China’s Dandong City Industrial and Information Association (丹东市信息协会) announced that it is seeking investments for the construction of tanker wharf under 10,000 ton and affiliated facilities. This organization has received 45 year usage rights from the Rason City People’s Committee and stated that it needed 330 million CNY (52 million USD) to cover the construction cost. According to the association, the investment is attractive because of its geographic location, reduced transit time and costs, and tax-free benefits, for which a special permit was obtained from the North Korean authorities granting trade goods coming from Jilin Province at the Hunchun Port to be allowed entry tax-free. In addition, cargo will be permitted to be sent from Rajin Port to other ports in China.

Meanwhile, North Korea is also planning to build a new port in the Rajin-Sonbong area with a state-of-the-art container distribution capacity. According to the “Rajin New Port Development Plan,” Rajin port development will undergo major transformation as an international hub port, similar to Busan Harbor, unlike the previous small-scale renovations of Piers 1, 2, and 3. This new port is expected to be built across from the current Rajin Port.

Rajin Port development was initially considered as a remodeling project to update the existing wharfs. In 2003, China began to implement construction of Piers 1, 2, and 3. However, the piers began to deteriorate and for the lack of railway and road infrastructure in the area, it delayed the transportation and distribution and could not perform its full function. As a solution, in 2008, North Korea transferred the usage right of Pier 1 to China and Pier 3 to Russia. At that time, Pier 1 was developed to primarily transport chemical fertilizers but it was recently updated as a transportation dock for coal. Russia, in addition to the port, also carried out a modernization project of the Rajin-Hassan railway system to improve the transport of containers.

The new port development plan as suggested by North Korea indicates Jian Group of China as the responsible party for developing the new port into a container port. However, considering that North Korea’s industry does not call for container ports, it is more likely that North Korea is expanding the port to make it a hub port to ship cargo to China, Russia, and Europe. Considering Rajin Port’s geographical advantage, it is likely that North Korea is striving to make it into an international hub port that connects the Pacific with Northeast Asia.

China’s recent advertisement of investment is also considered to be linked with the new port development in Rajin Port.

UPDATE 1 (2012-3-1): Accoridng to Stratfor, the Chinese have denied they plan to make this investment.

The Chinese Foreign Ministry denied allegations made in a Feb. 16 South Korean media report regarding its agreement with North Korea to jointly develop the Rajin-Sonbong Special Economic Zone (SEZ), a port area in northeast North Korea commonly referred to as the Rason Special Economic Zone.

According to the Yonhap news agency, Beijing agreed in late 2011 to invest about 19 billion yuan ($3 billion) into Rason, for which it would receive the lease of three piers for 50 years. Under the agreement, Beijing would also build an airfield, a thermal power plant and a 55-kilometer (34-mile) railway track connecting Rason to Tumen, China. The Chinese Foreign Ministry claimed that the specific details of the report are untrue and that China and North Korea had agreed only in principle to develop the zone.

China has long exerted its economic influence in North Korea and has an interest in the strategically important Rason Special Economic Zone. Chinese involvement in Rason dates back to the 1990s, though Beijing increased its involvement considerably in 2005 when it secured the rights to one of the port’s piers. Beijing has been particularly involved over the past few years. While the details of the deal remain unknown, it is clear that Beijing has arranged to help Pyongyang develop Rason, possibly by connecting the remote port to northwest China. Such a development would revitalize the zone — to the benefit of both countries.

ORIGINAL POST (2012-2-15): China has committed to infrastructure projects in Rason. According to Yonhap:

China has secured the rights to build three new piers in a special economic zone in North Korea’s northeast and use them for 50 years, sources said Wednesday.

China will also build an airfield and a thermal power plant in the special economic zone known as Rason, as well as a 55-kilometer railway track between China’s northeastern city of Tumen and Rason.

North Korea and China reached an agreement late last year to build infrastructure in Rason with Chinese investment of about US$3 billion, according to the sources in Seoul and Beijing.

The Daily NK offers some more data:

China has agreed to dig out dock 4 at Rasun to make it possible for 70,000 ton vessels to dock and to construct a runway long enough to accommodate passenger and cargo aircraft within the SEZ; the railroad is due to be complete by 2020, while the development of dock 5 and 6 will follow that of dock 4, Yonhap sources claim.

This agreement was reportedly signed quietly by North Korea’s Joint Ventures Committee and the Chinese government shortly before Kim Jong Il’s death.

The North Koreans have sought the construction of an airport and expansion of the port  for some time.

KITC published the image above in 1995 (Source here).  If you look carefully on the right side of the picture you will see the site of a proposed airport.

Above is a more recent map of Rason published by the DPRK. In the middle of the above map you can see a small airplane which represents the desired location of a future airfield. It is in the same location as shown on the KITC map.

Here is the approximate location on Google Earth (42.397884°, 130.592084°):

If you look at the left side of the KITC photo you can also see that there are many piers, however today there are only three.  I suspect that the new piers will be constructed south of the current piers and will look something like this:

The railway and power plant projects are intereting as well.  There is already a thermal power plant in Sonbong, so I expect that the Chinese are simply renovating it so that it generates more power or is simply more reliable (Google Earth:  42.327275°, 130.382585°):

At a presentation at the Korea Economic Institute in Washington, DC, Andray Abrahamian reported that increased electricity supplies for the Rason Zone could come from China.

As for the Tumen (China) – Rason railway line…this already exists as well.  The DPRK’s Hambuk Line (함북선) runs from Chongjin to Namyang (border with Tumen) to Rason:

The Tumen to Rason leg of this railway line, however, is approximately 156km (according to Google Earth) and likely runs pretty slowly.  The proposed new Chinese-built Tumen-Rason line is intended to be just 1/3 the distance!

Additional Information:

1. The Russians built a railway line from their border to the Rajin Port. Learn more here.

2. The Chinese and Russians have already rented two of Rajin’s three ports.

Read the full stories here:
China secures right to use 3 piers to be built on N. Korean port for 50 years
Yonhap
2012-2-15

China Reportedly Grabs 3 Docks and More
Daily NK
2012-2-15

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Rason update

Thursday, December 22nd, 2011

Andray Abrahamin and John Kim worte a comprehensive summary of the current state of Rason. The article appears in The Diplomat:

In 1991, the North Korean government dubbed Rajin-Sonbong (Rason) a free trade zone to attract foreign capital. However, less than a decade later, the zone lost its free trade status. According to local businessmen, the party secretary of Rason, a relative of the late Kim Jong-il himself, was charged with corruption and eventually executed, a harbinger for the long period of isolation ahead. Since the end of 2009, signs of renewed commitment to Rason have sprouted. While it may be too early to say whether the region will succeed in drawing investment and reform, our recent trips to Rason lead us to believe that developments on the ground may eventually warrant a shift in foreign policy by governments around the globe.

China has long eyed Rason as a potential import/export center for the landlocked provinces of Jilin and Heilongjiang. However, from Rason’s inception, the Middle Kingdom held little influence or interest in the region’s success. In 2002, North Korea establishedanother special economic zone in Shinuiju and instated businessman Yang Bin, then China’s second richest man, as the SEZ’s Chief Executive. The Chinese authorities promptly placed Yang Bin under house arrest. Perhaps as a lesson learned from this episode, the North Koreans have made the Chinese government a major stakeholder in Rason’s development.

The Chinese have moved 80,000 metric tons of coal this year through a pier they leased at the Rajin port.They are also reportedly sending regular delegations of senior officials, including the Chairman of the China Development Bank, and they have invested $30 million to repave the road from the border town of Wonjong to the Rajin Port. This road was 60 percent paved during a visit in October, and recent reports from businessmen inside the region confirm that the road is now 95 percent paved, allowing for large trucks to pass through. The Chinese have also constructed a new road on their side of the border, part of the support this area has received after the Chinese central government designated it “The Changjitu Development Region” in November of 2009.Officials from the North explained that the Chinese will have a say in everything from zoning of real estate to port customs and investment policies.

Though Russia’s involvement doesn’t run as deep, it also maintains a keen interest in Rason’s ice-free port and has pledged an investment of $200 million to refurbish a railway from the border town of Khasan and to upgrade pier three at the Rajin port, which it has leased for 49 years. Rason’s third port at Oongsang was once a major exporter of lumber from the Soviet Union, and though Oongsang looks far from reviving the Soviet involvement of its heyday, Russia clearly has an interest in Rason’s success as well.

In addition to neighboring countries’ newfound interest in the zone’s success, the North Korean leadership has also shown a renewed desire in luring investment into the region. In December 2009, Kim Jong-il made a visit to the area, sent his former trade minister to run the region as party secretary, and reinstated Rason’s status as a special city, wresting it out of provincial control. Any potential investor who visits the SEZ would experience the thirst of the local government to develop the region, as reflected by the words of an official with the Rason Economic Cooperation Bureau, Rhee Sung Hye: “The future of my career depends on how much investment I can bring.”

At the national level there are also signs that the regime is increasing its focus on economic development as a source of legitimacy. In 2009, the Joint Venture Investment Commission was formed as a one stop shop for foreign investors, while the Taepung Group and State Development Bank were created to attract foreign investment. In the first half of 2011, Kim Jong-il made more appearances related to the economy and less related to defense than in prior years, and a focus on improving lives through focus on light industry and agriculture was emphasized in joint editorials that signaled policy direction at the beginning of 2010 and 2011.

The alignment of simultaneous commitment from North Korea, China, and Russia sets the scene for a North Korean special economic zone with higher chances of success than perhaps ever before. However, interest and desire may not necessarily translate into results without knowledge of markets and how to create a stable investment environment. After a recent tour of his 200MW fuel oil powered generation facility, the President of Songbong Power, Rhee Kang Chul, expressed that the reason for his plant’s inactivity and the subsequent blackouts in the region was the rise in feedstock costs. When asked about mechanisms for electricity pricing, Rhee responded that the government had set power prices at 6.5 euro cents/kwh, but he couldn’t provide further details on how the number was arrived at and when it might change again. Though Rhee was clearly an expert on the technical aspects of power generation, he hadn’t had the chance to consider that potential investors, after getting comfortable with country risk, would have little clarity on the revenue side of their equation. When this was expressed to the Vice Mayor of Rason, he replied, “We can change the price of electricity here. Rason is not under the same restrictions as the rest of the country.”

North Korea could theoretically piggyback off the market knowledge that their Chinese partners have gained over the last 30 years, but Rason’s neighbors are only likely to share when it suits their interests. In the case of Sonbong Power, Kang told us that every Chinese official who has visited stated that the most effective solution would be to pipe in power from the Chinese grid. “We plan to have a power line installed from the border by the end of 2013.” As power is as strategic asset like food or water, dependence on Chinese power clearly leaves the North Koreans in a vulnerable position.

China is clearly North Korea’s closest ally, but their relationship has a thorny history and Pyongyang is acutely aware of its reliance on big brother Beijing. With China’s rise, many other countries in the region are increasingly dependent on trade but increasingly cautious of dependence, welcoming a stronger presence from the United States, which is in the midst of a strategic pivot towards Asia.

In December 2009, the Asia Society and the Institute on Global Conflict and Cooperation published a report arguing that economic engagement of Pyongyang by the United States would result in creation of vested interests in continued reform, a changed perception of self-interest and a less confrontational foreign policy from North Korea. Against the backdrop of a more uncertain domestic environment after the death of Kim Jong-il, and the shifting dynamics in Asia generally, a North Korea that trades more and engages with the outside world may necessitate a change in foreign policy of governments around the world, most specifically the United States, South Korea, and Japan.

The Rajin-Sonbong SEZ has a checkered past and it would be naïve to say that North Korea is embarking on late 1970’s style Chinese economic reforms. However, we believe that the unprecedented alignment of interests in the region make it a likely starting point for any lasting directional change, which is why the world should watch Rason.

Read the full story here:
Why World Should Watch Rason
The Diplomat
John Kim & Andray Abrahamian
2011-12-22

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North Korea Encourages Investment in Rajin-Sonbong (Rason) Economic and Trade Zone

Friday, September 16th, 2011

Institute for Far Eastern Studies (IFES)
2011-9-14

At the seventh China Jilin and Northeast Asia Investment and Trade Expo (NEASIAEXPO), the North Korean delegation actively promoted the Rajin-Sonbong (Rajin) Economic and Trade Zone to attract investment.

During the expo, the DPRK’s Ministry of Trade and China’s Ministry of Commerce and People’s Government of Jilin Province co-sponsored the “(North) Korean Business Day and China-DPRK Trade and Investment Session” at the Changchun International Conference and Exhibition Center on September 7. Hwang Chol-nam, the vice mayor of Rason City, briefed the attendees on the current situation, advantages, and special benefits of his city.

According to Hwang, “The spacious 470 square-kilometer Rason Economic and Trade Zone is one of the largest economic trade zones,” and advertised the geographic and economic advantages of Rason as the “transportation hub of Northeast Asia that connects China and Russia via Tumen River and with Japan across the East Sea.”

He also introduced the three ports in the region. “Rajin Port is equipped with the annual loading capacity of 3 million ton and Sonbong Harbor is able to transport 2 to 3 million ton of oil while Ungsang Harbor is able to handle up to 600,000 cubic-meter of lumber annually.” He also boasted the ports to be deep enough where it does not freeze during the winter.

Rason was also introduced to have received the “special city” designation in 2010 and will grow to have a population of one million. The recently amended “Law on the Rason Economic and Trade Zone” was revised and supplement with over 50 articles.

Hwang also elaborated on the eight preferential policies providing special tax benefits to foreign investors. He asserted, “The government of North Korea will guarantee the investment of the foreign investors by not nationalizing or demanding requisitions. For inevitable cases where such demands occur, proper compensation will be provided.”

The income tax is also at 14 percent, which is 11 percent lower than other areas in North Korea. For companies with business plans over ten years, foreign capital companies will receive three years of tax-free benefit starting from the profit earning year and two years thereon after will receive 50 percent tax-free benefits. According to Hwang, over 100 foreign companies and offices are operating businesses currently in the special economic zone.

He also announced that the current highway construction project connecting Rajin with Wonjung is expected to be completed in October, and that the Tumen-Rajin port railway system is to be upgraded to a broad gauge railway next month.

Specifically, Russian Railways reached an agreement with North Korea to repair the Hasan-Rajin Railway and improve the Rajin port facilities, especially focusing on Pier 3. The plans include upgrading Rajin as a container harbor to be capable of transporting twenty-foot equivalent units annually. Russia and the DPRK have already conducted measurement and geological surveys and reached the process design phase.

However, Seo Gil-bok, the DPRK’s vice minister of commerce, stated in a speech that North Korea would “actively work hard to make the Rason region a successful collaboration between the DPRK and China,” saying further that they would “pull out all the stops to realize the goals agreed by the best leaders from both nations.”

Many foreign media and correspondents were present at the event to cover the “Korean Business Day.” At the event, North Korea actively promoted the Rason Economic and Trade Zone by also presenting a promotional video of the zone.

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