North Korean Economy Watch

According to the Daily NK:

Three North Korean Senior Middle School students have been caught trying to carry explosives into North Korea, according to a Radio Free Asia (RFA) report today.

Citing a source from Hyesan, RFA reported, “On the 11th, immediately after Chosun Workers’ Party founding day, 15-year old Songbong Senior Middle School student Kang and two others were caught trying to bring explosives in from China,” adding, “As a result of this, the security authorities have been put on emergency alert and the border totally closed.”

The RFA report explains that the three crossed the border into China with the help of border guards and smuggled back 10kg of explosives in two bags, but were caught at the entrance to a village by a community watch guard unit consisting of workers.

According to another source, “I’ve heard a number of rumors, including that they brought the explosives to destroy the bridge that passes by Wangdeok Station.” However, the source added, “Whether this is true or not I cannot say.”

Wangdeok Station is among a number of stations in North Korea on lines reserved for the exclusive use of Kim Jong Il.

The North Korean authorities are apparently at a loss to explain the case, because the students were just the children of normal workers; they did not have criminal records and were only interested in literature and reading.

Since the event occurred, the Yangkang Province authorities have stepped up security, with provincial committee cadres and students from Hyesan Agriculture University patrolling in the area around Bocheonbo Combat Victory Monument and the local statue of Kim Il Sung. They have also dispatched tens of guards to idolization sites such as Hyesan Revolutionary Museum and Kim Il Sung Revolutionary Activities Institute.

The report also added information on further similar cases: in 1997, a group of people were arrested after smuggling explosives into the country, allegedly in order to blow up the city’s statue of Kim Il Sung, and there has also been an arson case involving Kim Jong Suk Art Theatre and persons with complaints against the Kim Jong Il system.

It should be stated that stories such as these should be regarded with some skepticism since almost all of the facts are unverifiable.

For what it is worth, here is a satellite image of the  Wangdeok Leadership Train Station in Hyesan ( 41.448124°, 128.277445°):

UPDATE 4: Chinese government confirms Kim Jong-il visit.  According to Evan Ramstad in the Wall Street Journal:

North Korean dictator Kim Jong Il met Chinese President Hu Jintao during his five-day visit to northeast China, the Chinese government confirmed Monday night as Mr. Kim left the country, in a surprise get-together that underscored their solidarity as they cope with pressure from the U.S. and other countries to act more responsibly.

The announcement was the climax of what appeared to be a coordinated public-relations push by China on Monday, beginning with stories in several media outlets praising the China-North Korea relationship while also saying Beijing shouldn’t be held responsible for Pyongyang’s provocative actions.

The meeting happened Friday, though China, as it has done with Mr. Kim’s previous visits, waited until he left the country to say he had been there.

In the initial reports confirming the meeting between Messrs. Kim and Hu, China’s state media said that Mr. Kim wanted a resumption of the six-nation talks aimed at striking a bargain for denuclearizing North Korea. They also hinted that Mr. Kim was interested in the economic overhauls that opened China to the world, though they didn’t say he endorsed or would follow them.

Mr. Kim for years has resisted requests of Chinese leaders to open up North Korea’s economy. Late last year, his regime tried to clamp down on market activities but halted the effort when the government couldn’t feed people.

Mr. Hu said on state TV that China should expand its economic cooperation with North Korea. Since Mr. Kim’s entourage was spotted in China on Thursday, analysts have speculated that one reason he made the trip was to seek more money and assistance for the impoverished North.

Analysts also speculated that Mr. Kim brought his expected heir-apparent, son Kim Jong Eun, to meet Chinese officials ahead of a political meeting in Pyongyang next week that may be the son’s public debut in North Korea. The Chinese news reports about the visit did not mention the son, however.

“I think there are other two issues Kim wants to talk about with China,” said Jin Hanyi, head of Northeastern Asian Research Institute at Yanbian University in Jilin. “North Korea recently had a bad flood and, with international sanctions against it and the failure of monetary reform, Kim wants to discuss how to deal with these awful messes,” Mr. Hanyi said. “Second, North Korea will hold a Workers’ Party meeting next month and he wants support from China for new policies.”

Mr. Kim’s entourage twice during the trip stopped in places associated with his father, North Korean founder Kim Il Sung, moves that are likely to be portrayed in North Korea as highlighting the importance of the Kim family as another potential succession looms.

For outside diplomats, the greatest significance of the trip is the symbolism of Messrs. Kim and Hu going to great lengths to meet each other in the aftermath of criticism both countries took following the sinking of a South Korean earlier this year, an incident that South Korea, the U.S. and others blame on a North Korean attack.

China has refused to blame North Korea publicly for the sinking, which killed 46 South Korean sailors, or to examine the results of the South Korea-led investigation.

Instead, North Korea and China have, since late May when the investigation first produced the accusation against North Korea, called for the resumption of the six-party denuclearization talks. The talks began in 2003, producing two agreements that North Korea dragged out and ultimately failed to keep. Pyongyang formally walked away from them last year.

Japan, South Korea and the U.S. have said North Korea damaged the potential for the talks with its attack on the South Korean ship.

The message to restart the talks was also given last week by a different North Korean official to former U.S. President Jimmy Carter when Mr. Carter went to Pyongyang to retrieve an American teacher who entered North Korea illegally in January. Mr. Kim skipped the opportunity to meet Mr. Carter to go to China instead.Mr. Kim doesn’t like to fly and travels by train that is easily monitored by satellite by foreign governments. His entourage is then tracked on the ground by reporters who follow the highly visible security cordons that go up along his route.

On Monday, South Korean and Japanese news agencies reported the action as Mr. Kim took his specially outfitted train from Harbin, the capital of China’s most northeastern province Heilongjiang, to a smaller city called Mudanjiang and then down to the border crossing at Tumen.

Mr. Kim called himself a “witness” to the success of China’s “reform and opening up,” Chinese television reported, but it was unclear whether that meant the North would follow that model. Last year, Chinese Premier Wen Jiabao, in a visit to Pyongyang, proposed development projects valued at several billion dollars to North Korea, but none have gotten off the ground.

Early Monday, Chinese state media rang with praise for North Korea but also tried to draw a line in the two countries’ relationship.

The state-run Xinhua news agency published a commentary talking about Chinese men who sacrificed their lives for North Korea, during the Korean War of the 1950s and afterward. Its latest example was the tale of a Chinese man who drowned this month after rescuing three North Korean girls adrift at sea.

The man’s “sacrifice led us again to recollect the long history of friendship between the two peoples,” Xinhua wrote.

Another nationalist newspaper, Global Times, wrote an editorial that called the China-North Korea relationship both “special” and “normal.”

“The biggest negative impact the China-North Korea relationship has on China is that the U.S, Japan and South Korea all request that China be responsible for North Korea’s ‘irrational behaviors,'” the newspaper wrote. “However, China has no ability to shoulder such responsibility.”

UPDATE 3: Kim Jong il departs from Harbin and returns home.

UPDATE 2: Kim Jong-il in Changchun. According to Yonhap:

North Korean leader Kim Jong-il arrived in a Chinese industrial city Friday, a day after making a pilgrimage to sites bearing footmarks of his late father, on an abrupt trip seen as related to his leadership succession plan.

A convoy of some 30 vehicles, believed to be carrying the reclusive leader, arrived at the South Lake Hotel in the northeastern Chinese city of Changchun, about an hour and a half after leaving the nearby city of Jilin.

Earlier in the day, Kim’s convoy appeared to be traveling to a Jilin train station, where security was heavy, to allow the leader to board his personal armored train to Changchun. However, instead of stopping, the convoy took a highway to the capital city of Jilin province. About 10 police vehicles provided escort for the group of limousines and mini-buses.

Kim’s stay in Changchun is expected to include a tour of advanced industrial facilities.

Kim, 68, began the latest secrecy-shrouded trip a day ago, crossing into China around midnight Wednesday aboard his luxurious special train.

The trip was a surprise because it came as former U.S. President Jimmy Carter was in Pyongyang for a widely speculated meeting with him. It was also Kim’s second visit to China in about three months, an unusual move for the isolated leader who rarely travels abroad.

Carter arrived in Pyongyang Wednesday to win the release of an American citizen detained in the North since January for illegal entry. Carter headed home Friday with the freed American, Aijalon Mahli Gomes, Pyongyang’s Korean Central News Agency said.

It was apparent that he failed to meet with Kim Jong-il.

On Thursday, Kim paid a visit to Jilin’s Yuwen Middle School, which his father and national founder, Kim Il-sung, attended for two and a half years starting in 1927. Kim also visited Beishan Park in the city of Jilin where the remains of anti-Japanese independence fighters are buried.

North Korea has lavishly lauded Kim Il-sung for his anti-Japanese activities during the 1910-45 colonial rule. The late leader, who founded North Korea in 1948, is still revered as eternal president and is subject to a strong cult of personality even after his death in 1994.

Kim’s move suggests that he visited the two sites considered sacred to his family dynasty ahead of handing power over to his youngest son, Jong-un, analysts said. Unconfirmed reports said the heir-apparent could be accompanying his father on the rare trip.

North Korea’s ruling Workers’ Party is scheduled to convene a rare leadership meeting early next month in which the younger Kim could be given a key position in the run-up to formally taking over the communist dynasty.

On Thursday, Pyongyang’s state media reported that the country has started holding lower-level meetings of party delegations in the run-up to next month’s conference.

“The meetings were unanimous in saying that the WPK conference … will be a significant conference which will be a landmark of an epochal turn in strengthening the party and a great jubilee of great significance in ushering in a new surge in the revolution and construction,” the KCNA said.

Kim’s trip came as tensions still run high in the wake of the March sinking of a South Korean warship and China pushes to jump start six-nation talks on ending North Korea’s nuclear programs.

Beijing’s chief nuclear envoy has been in Seoul for talks on his trip to North Korea last week.

China is pushing for a “three-step” proposal for resuming the nuclear talks.

The proposal calls for Pyongyang and Washington first holding bilateral talks before all six parties hold an informal preparatory meeting and then an official session. The talks, which involve the two Koreas, China, Japan, Russia and the U.S., have been stalled since late 2008.

South Korea has expressed its reluctance to reopen the dialogue unless the North shows a “responsible” attitude over the sinking and proves through action that it is serious about abandoning its nuclear programs.

UPDATE 1: Here is KCNA coverage of Cater’s visit to secure the release of Gomes

ORIGINAL POST: Former President Jimmy Carter is in Pyongyang to secure the release of American Aijalon Gomes.  Past stories about his detention can be found here. President Carter last traveled to Pyongyang in 1994  and met with Kim Il-sung (the North Koreans made a propaganda video out of the trip which they sell to foreigners), and discussed terms to freeze the country’s nuclear program. Many were speculating that President Carter might meet with Kim Jong-il while in the DPRK, but Kim appears to be in China.

According to the New York Times:

The man Mr. Carter is seeking to free is Aijalon Mahli Gomes, a 30-year-old Christian from Boston who was arrested in January for crossing into North Korea and sentenced in April to eight years of hard labor and fined $700,000. Last month, North Korea said he tried to kill himself out of “frustration with the U.S. government’s failure to free him.”

The visit by Mr. Carter, an evangelical Christian, is the second to North Korea by a former American president in a year on what the United States described as a private humanitarian missions. Last August, Bill Clinton flew there and met with the reclusive North Korean leader, Kim Jong-il, to secure the release of two American journalists held for five months for illegal entry.

The Obama administration kept its distance, emphasizing that Mr. Carter not an envoy. “I’ll just say that President Carter is on a private humanitarian mission and I’m not going to comment more beyond that,” said Mark Toner, a State Department spokesman.

But as with Mr. Clinton’s visit, Mr. Carter’s has deeper diplomatic undercurrents. The North Koreans have used the captive Americans as bargaining chips, promising to release them in exchange for visits from specific high-profile Americans. North Korea can portray the meetings domestically as evidence of its international importance, while the United States has a high-level direct encounter that it cannot officially engage in.

But Mr. Carter has a long history as an independent agent, and some administration officials worried that he might undercut their policy in some way and make it harder to keep up the pressure on Pyongyang to give up its nuclear program.

It was not immediately clear who among the North Koreans would meet with Mr. Carter. The North Korean media reports said that he was greeted at the airport in Pyongyang, the capital, by Kim Kye-gwan, a senior diplomat who has been the North’s main envoy to the six-nation talks on its nuclear weapons program. The talks have been stalled for more than two years, but the North recently said it was willing to return to the discussions.

Higher-level meetings would appear to be likely, since Mr. Carter’s visit comes at a fraught time for North Korea. Its economy remains deeply troubled, and its ravaged agricultural sector has been further damaged by recent flooding. A March torpedo attack that sank one of the South’s warships, killing 46 sailors, drove inter-Korean relations to their lowest point in years and added to tensions with the United States. In addition, there may be a struggle over succession within the government of Kim Jong-il, who has had serious health problems.

The case of Mr. Gomes also touches on efforts of Christians in South Korea and the United States on behalf of North Koreans. His illegal entry was made in support of Robert Park, a fellow Christian from the United States who crossed from China in December to call attention to the dismal conditions in the North’s prison camps. Mr. Park was expelled after about 40 days.

Mr. Carter has been a contentious figure among South Korean conservatives. “Carter is idealistic, not realistic when it comes to North Korea,” said Hong Kwan-hee, director of the Institute for Security Strategy in Seoul. “North Korea always has tried to use prominent Americans, preferably Democrats, as a medium to engage the United States and drive a wedge between Seoul and Washington.

In another development, the South Korean authorities on Thursday morning were looking into indications that Mr. Kim, the North Korean leader, might be visiting China, an official in the presidential office of South Korea said. News media in South Korea, including the national news agency, Yonhap, and the mass-circulation daily, Chosun, reported the same on their Web sites.

“We have signs that Kim Jong-il is visiting China,” said the official, who spoke on condition of anonymity, citing the sensitivity of the matter. “It’s unclear whether he has arrived or is still on the move.”

If true, this would be Mr. Kim’s sixth trip to China and his second in three months. North Korea and China usually do not confirm a trip by Mr. Kim until after it is over. His previous trips were often preceded by weeks of media speculation. Many journalists waited on the Chinese side of the border to wait for his train to cross. This time, there was no such activity.

According to Bloomberg:

Carter yesterday also met with Kim Yong Nam, president of the Presidium of the Supreme People’s Assembly of North Korea, KCNA said. The pair had a “cordial talk” in the Mansudae Assembly Hall, the official news agency said.

Regarding Kim Jong-il’s visit to China, I turn to the Los Angeles Times:

In a trip shrouded in mystery and speculation, North Korean leader Kim Jong Il traveled to China by train with his youngest son, according to two South Korean government officials.

An official in the South Korean Blue House confirmed late Thursday that Kim’s train had crossed the border into China around midnight Wednesday, but said the North Korean leader did not take the usual route through the city of Dandong.

We “detected indications a few days ago,” the official told reporters, asking not to be named. “Chairman Kim’s special train has been confirmed to have left Manpo for China’s Jilin around midnight Wednesday.”

Another official, who asked not to be named because he was not authorized to discuss the matter, said earlier that intelligence had detected movement by the reclusive Kim.

South Korea’s Yonhap news service quoted an official speculating that the trip might be associated with the anticipated handover of power in the secretive regime.

“Signs have been detected that Chairman Kim visited China early Thursday morning,” the second unnamed official told the agency. “We are still trying to grasp his exact destination and the purpose of the visit.”

This was Kim’s second trip to China since May, when he embarked on a five-day journey for a summit with Chinese President Hu Jintao.

The Chinese government Thursday had no immediate comment on the visit. Because of security concerns, Kim’s rare trips outside North Korea to the ally nation are publicly confirmed only after they end.

The Yalu River crossing between North Korea and the Chinese city of Dandong was badly flooded last weekend, disrupting the railroad lines over which Kim normally travels in an armored, luxury train, reportedly equipped with conference rooms, bedrooms and high-tech communication facilities.

Shi Yinhong, a professor at Beijing’s Renmin University, speculated that Kim “must need China’s help in reducing tensions and ensuring a good environment for the succession of his son.”

The visit may signal that North Korea is prepared to return to six-party talks hosted by China on its nuclear program. North Korea also badly needs humanitarian assistance as a result of a series of economic blunders, as well as poor harvests and damage to cropland caused by the recent flooding.

Kim, who is 68 and in poor health after suffering a stroke in 2008, is in the process of naming his youngest son, the little-known Kim Jong Eun, 26, as his successor, a decision which should be announced at a special congress next month of North Korea’s ruling Workers’ Party.

“It’s likely that Kim Jong Il wants to end the debate on the succession issue in Pyongyang ahead of a meeting next month of the North Korea’s Workers’ Party,” said Yang Moo-jin, a professor at the University of North Korean Studies in Seoul.

“There’s been plenty of succession talk between working-level and senior-level officials in Beijing and Pyongyang where they have failed to reach an agreement. Kim Jong Il now seems to be taking matters into his own hands.”

Kim Jong Eun, who was educated in Switzerland and speaks several languages, did not accompany his father during the previous trip to China in June. His presence on this visit might be something of a courtesy call to introduce the future leader to the Chinese.

“China will have no choice but to deal with Kim Jong Eun. Their regime is traditionally a family dynasty and, like it or not, if you deal with North Korea, you have to deal with their ruler,” said Shi.

Kim Jong Il assumed power in North Korea with the death of his father, Kim Il Sung, in 1994.

The rumors come amid tensions on the Korean Peninsula following the deadly sinking of a South Korean warship in March. The south has blamed North Korea for an unprovoked torpedo attack.

The trip also comes the day after former U.S. President Jimmy Carter arrived in Pyongyang to secure the release of a U.S. citizen imprisoned for illegally entering the country.

Here is the original Yonhap story.

Here is more in the New York Times.

Here is more in the Los Angeles Times.

The Road less taken: DPRK railway crossings into China

Click image for larger version

The DPRK does not have many railway crossings into China. From West to East: Sinuiju, Sakju, Manpho,  and Namyang.  Historically there were additional crossings at the Unbon Dam,  Hyesan, and Saepyol, but these do not appear to be used anymore.  Namyang is in the furthest reaches of North Hamgyong Province, so if Kim is going to cross into China by rail, he has to do so from Sinuiju, Sakju, or Manpho.  Coincidentally, he has a private railway station and secure residential compound near each of these border crossings–though the closest leadership compound and train station to Manpho is in nearby Kanggye and the closest compound to the Sakju Bridge is in Changsong County.

Given that the Sinuiju crossing is most convenient, it is a bit of a mystery why he chose to cross at Manpho when Sakju/Changsong is so much closer.  Maybe the Sakju/Changsong railway crossing is not as convenient for some unknown reason?  Maybe the “smaller” Kanggye leaderhip compound is more exclusive and Kim prefered hiding this trip from as many of his cohorts as he could?  Maybe the Changsong elite compound (which is also on the water) is also flooded?  I do not know the reason, but there has to be one…

UPDATE: This story was picked up by the Financial Times (8/11/2010):

North Korea has offered the Czech Republic 20 tonnes of ginseng in lieu of payment for some of its debts.

However, Prague has turned down the deal, instead suggesting that Pyongyang pays in the valuable mineral zinc, which can be resold on international markets.

North Korea owes the Czech Republic $10m from the days when the Czech Republic was under communist rule and the two countries traded with each other regularly. Communist Czechoslovakia was a leading supplier of trucks, trams and machinery to North Korea, creating a large pile of debt.

Pyongyang reportedly offered $500,000 worth of ginseng, a root which is reputed to boost memory, stamina and libido, as a down payment.

However, consumption of ginseng in the European country is low, with just 1.4 tonnes used each year.

North Korea’s economy is struggling as international sanctions tighten and it hopes to be able to barter its way out of handing over valuable cash.

Non-cash transactions between socialist countries is common, with Cuba sending Venezuela doctors in exchange for discounted oil.

A Czech government spokesman has said that the countries were in negotiation over how the debt would be paid.

“We have been trying to convince them to send, for instance, a shipment of zinc,” the deputy finance minister told the MF Dnes newspaper.

ORIGINAL POST: According to the Korea Times:

North Korea has offered to pay its debt to the Czech government with ginseng, according to a local Czech daily newspaper.

MF DNES, a daily newspaper based in Prague, reported last Saturday that North Korea has recently suggested to the Czech Finance Ministry that it would pay 5 percent of its debt — approximately $500,000 — with ginseng.

“We are trying to persuade them (North Korea) to give us, for example a bulk of Zinc instead, so that we could sell it to someone else,” Tomas Zidek, deputy finance minister, told the newspaper in Czech.

North Korea is believed to have a significant amount of zinc in deposits.

The paper went on to say the consumption of ginseng in the Czech Republic is very small, and it only imported 1.4 tons last year. The amount of ginseng worth $500,000 will be roughly 400 tons, securing the supply for more than 200 years.

But, to Czech’s disappointment, North Korea seemed to have made up its mind, as it sent a delegation with samples of ginseng.

North Korea is known to be Czech’s 10th biggest debtor, which goes back to the communist governments. The North bought many trams and vehicles from former Czechoslovakia.

Read the full story here:
North Korea wants to pay back debt in ginseng
Korea Times
Kim Se-jeong
7/26/2010

According to Breitbart (via Breitbart):

Former North Korean Railways Minister Kim Yong Sam was executed in March last year for failing to maintain locomotive trains that had been in store for wartime, Radio Free Asia, a nonprofit radio station, reported Wednesday on its Internet edition.

A source on North Korean affairs said Kim got into trouble during an inspection by the National Defense Commission for scrapping locomotive trains that were in store for wartime.

After the inspection, carried out after celebrations were held to mark the country’s 60th birthday on Sept. 9, 2008, Kim was handed over to the State Security Department, report said.

He had been railways minister for 10 years from September, 1998.

The Choson Ilbo has more:

A nationwide campaign is underway recently in North Korea to get rid of photos and publications of executed former senior officials, Radio Free Asia claimed Tuesday.

This campaign was ordered by leader Kim Jong-il on July 2. The North’s Press Censorship Bureau is reportedly destroying documents and materials collected from across the country.

According to RFA, the campaign’s targets include Pak Nam-gi, the former director of the North Korean Workers Party’s Planning and Finance Department who was executed in March over the disastrous currency reform, and former railways minister Kim Yong-sam.

“Railway workers suffering from the food shortage stole copper and aluminum parts from locomotive trains that were in store for wartime and sold them as scrap metal. As a result, about 100 locomotives were scrapped,” it claimed. “This was revealed in an inspection by the National Defense Commission in 2008.” Kim Yong-sam was then taken to the State Security Department and executed in March the following year, it added.

Kim Yong-sam was appointed railways minister in September 1998 but has not been seen in public since October 2008, when he was replaced by current minister Jon Kil-su.

A Unification Ministry official said rumors about his execution are “rampant.”

Read the full stories here:
Former N. Korean railways minister Kim Yong Sam executed: report
Kyodo (via Breitbart)
7/14/2010

N.Korea’s Ex-Railways Minister Executed
Choson Ilbo
7/15/2010

According to the Press Trust of India:

A Chinese tourist train entered North Korea for the first time today, carrying more than 400 passengers including a group of Finnish students, Chinese state news agency Xinhua reported.

The train embarked on the four-day tour from the Chinese province of Liaoning under a new arrangement with North Korea expected to attract tens of thousands of tourists, the agency reported from the provincial capital Shenyang.

The first train is mostly carrying tourists from China but also includes foreigners living in China, notably the Finns, resident in Guangzhou.

The tour comes amid heightened tensions between reclusive North Korea and South Korea, as Seoul has appeared increasingly suspicious that the North was behind the sinking of one of its naval ships last month.

It also follows reports that North Korean leader Kim Jong-Il plans to visit China soon.

Read the full story here:
Chinese tourist train makes first North Korea tour
Press Trust of India
4/25/2010

According to KCNA:

Report on Implementation of 2009 Budget and 2010 Budget
 
Pyongyang, April 9 (KCNA) — Deputy Pak Su Gil, vice-premier and minister of Finance, delivered a report on the results of the implementation of the DPRK state budget for last year and its state budget for this year at the 2nd Session of the 12th Supreme People’s Assembly held on Friday.

According to the report, the state budget for last year was successfully implemented and, as a result, the state budgetary revenue was overfulfilled 1.7 per cent, an increase of 7 per cent over the previous year.

Ministries, national institutions, management bureaus and complexes overfulfilled the national plans for budgetary revenue and all provinces, cities and counties across the country also overfulfilled their plans for local budgetary revenue.

Last year’s plan for state budgetary expenditure was carried out at 99.8 per cent.

An investment from the state budget was focused on the development of metal industry while a huge financial allocation was made for the power and coal industries and the railway transport.

8.6 per cent more funds than the previous year were spent for capital construction and expenditure was increased for agriculture and light industry.

A 7.2 per cent greater financial disbursement than the previous year was made for the field of science and technology, surpassing the level of the latest science and technology in domains of space technology, nuclear technology and CNC technology and putting the key industries of the national economy on a high scientific and technological basis.

A large amount of fund went to the field of cultural construction and 15.8 per cent of the total state budgetary expenditure was spent for national defence.

The reporter said that the scale of revenue and expenditure in the state budget for this year has been set on the principle of improving the people’s standard of living to meet the requirements of the policy of the Workers’ Party of Korea on conducting a great offensive to bring about a decisive turn in the above-said work.

This year’s plan for state budgetary revenue is expected to grow 6.3 per cent over last year. The revenue from the profits of state enterprises, the main source of state budgetary revenue, is expected to go up 7.7 per cent over last year, that from the profits of cooperative organizations 4.2 per cent, that from the fixed asset depreciation 2.5 per cent, that from real estate rent 2 per cent and that from social insurance 1.9 per cent.

This year’s plan for state budgetary expenditure is expected to show an 8.3 per cent increase over last year.

The spending for the light industry is expected to go up 10.1 per cent, that for agriculture 9.4 per cent and that for metal, power and coal industries and railway transport 7.3 per cent as compared with last year.

The expenditure for the machine-building industry is expected to go up and an 8.5 per cent bigger financial allocation will be made for scientific researches and the introduction of new technologies.

A 6.2 per cent bigger financial disbursement than last year is expected to be made to more successfully enforce the popular policies, a proof of the advantages of Korean-style socialism centered on the popular masses.

15.8 per cent of the total state budgetary expenditure for this year is expected to be spent for national defence.

It is expected that a large amount of educational aid fund and stipends will be sent for the children of Koreans in Japan this year, too.

In order to successfully implement this year’s state budget, all domains and units of the national economy should work out enterprising and realistic business strategy and management strategy and tenaciously carry them out by relying on a high degree of mental power of the producer masses and thus fulfill the plans for budgetary revenue without fail, stressed the reporter.

And according to the Choson Ilbo:

North Korean leader Kim Jong-il can freely dispose of 20 percent of his country’s budget, a former secretary of North Korean Workers’ Party has said that. Hwang Jang-yop told the Asahi Shimbun, “Only 30 percent of the budget is spent on public services, while 50 percent is earmarked for military spending.” Hwang defected to South Korea in 1997.

Hwang was interviewed by the daily during his visit to Japan on April 4-8. “Kim Jong-il’s dictatorship is 10 times worse than his father’s. People have a painful life,” he said.

Asked if the North is likely to abandon its nuclear weapons program, he said, “There is no such possibility. But the North won’t use the weapons. They’re a means to maintain the regime.”

To the question why Kim’s eldest son Jong-nam was passed over for the succession, he said, “At first, Kim Jong-il thought of choosing his eldest son as his successor. But he seems to have changed his mind as he fell in love with Ko Young-hee, the mother of Jong-un, his third son, after Jong-nam’s mother Song Hye-rim died.”

Commenting on the North’s bizarre abductions of Japanese citizens in the 1970s and 80s, he said, “The North needed native Japanese to train agents who would work in Japan.”

Read the full story here:
Kim Jong-il ‘Gets 20% of N.Korea’s Budget for His Own Use’
Choson Ilbo
4/12/2010

Jin Hualin, dean of the College of Economics and Management at Yanbian University, talks about Chinese investment in Rason in China’s Global Times.  Here is an excerpt:

GT: If China does continue to rent Rajin harbor for another 10 years, what will the effects be?

Jin: China has reached an agreement to rent a pier at Rajin Port for another decade. A Dalian-based Chinese company has invested 26 million yuan ($3.8 million) in the reconstruction of Rajin Port No.1 Pier. Park also said that China may enjoy more favorable conditions there, such as more berths.

I think Chinese companies’ participation is good for promoting the North Korean economy and building logistical infrastructure in the area, which is beneficial to China, North Korea and the Northeast Asian countries.

When the Sino-Mongolia route is finished, raw materials and natural resources from Mongolia can be shipped to Japan and South Korea via Rajin harbor, and then China’s northeastern regions and North Korea can both benefit.

GT: What should China do to promote Northeast Asian cooperation and devel-opment?

Jin: I suggest Chinese governments at all levels consider the following issues. They should accelerate trade and tourism and build cooperation on logistics, and support Chinese companies going global and investing in North Korea.

Actually, China now has many companies capable of investing abroad. The point is foreign countries’ investment environment.

We should strengthen cooperation on education with North Korean universities and colleges, sending students to study there and exploring research in new areas together.

We can also strengthen regional cooperation. We can designate China’s Hunchun city and North Korea’s Rason city as pilot cities and permit China’s commercial banks to open yuan-based accounts in Rason’s commercial banks.

Relations between Northeast Asian countries are subtle and complicated because of geopolitical contradictions, different political systems, the influence of the Cold War, historical issues, territorial disputes and sentiments caused by historical and territorial issues.

Mutual distrust fundamentally hinders cooperation. China needs to take the responsibility to promote regional cooperation and make it institutionalized and legally guaranteed as soon as possible.

GT: How do you evaluate the political and economic risks for Chinese companies going into North Korea? What advantages do Chinese companies have?

Jin: There are always political and economic risks involved in trade between different countries. The first major solution is to establish a mutual investment guarantee agreement, so that the two countries’ economic cooperation will be protected legally.

We hope that North Korea can keep the stability and consistency of its policies and issue development policies that is in line with international conventions. As long as North Korea adopts consistent policies, Chinese companies won’t encounter great political and economic risks there.

China and North Korea are believed to enjoy good mutual trust. China has experience from its reform and opening-up and plenty of investment capability. North Korea has a good educational foundation, low labor costs, and rich natural resources.

Chinese companies are active participants in investing in North Korea and I believe they’ll do well there.

Read the full interview here. Hat tip to Adam.

UPDATE 2 (2011-9-8): According to the Donga Ilbo:

Hyundai Group Chairwoman Hyun Jeong-eun, who met North Korean leader Kim Jong Il in Pyongyang in 2007, is known to have said Kim believes the 2004 train station explosion in the North Korean town of Ryongchon was an attempt to assassinate him.

According to a diplomatic report released recently by WikiLeaks, Hyun told U.S. Ambassador to South Korea Kathleen Stephens in 2009, “Kim believed that the explosion at Ryongchon Station was a failed attempt to assassinate him, and the (North Korean) People’s Army became his most trusted group after the incident.”

Hyun was quoted as saying, “After the time when his train was to pass Ryongchon Station was revealed through mobile phones, North Korean leader Kim Jong Il believed that the explosion occurred when his train almost reached the station, and after the incident, the introduction of mobile phones in the North was markedly delayed.”

According to the report, the chairman said, “Kim Jong Il fears assassination and a coup the most. He was not an irrational person in the past, but I feel he has changed recently in certain aspects.”

UPDATE 1 (2010-3-23): Adam Cathcart tracks down the original Chinese source and offers a translation:

Curtis, I believe the original source is an article in the Chongqing (Sichuan, PRC) Evening News.  I’ll include the relevant Chinese text in two separate blocks and then translate it:

2004年4月22日中午时分，朝鲜平安北道龙川郡发生了一起严重的火车爆炸事故，导致近200人死亡，1500多人受伤，另有8000多幢房屋被毁。有分析认为，这次造成灾难性后果的朝鲜火车爆炸案，是一次针对朝鲜领导人金正日的暗杀企图。4月22日龙川爆炸事故时，有线索表明不良分子使用了手机，唯恐内部情报外泄，所以手机业务被停了。

On April 22, 2004, around noon, the story is that in North Korea’s North Pyong’an Province, Ryongchon County, a serious train explosion caused the deaths of nearly 200 people and injured more than 1,500 people, while more than 8000 homes were destroyed.

Some analysts believe that the catastrophic consequences of this North Korean train explosion followed from a attempted plan to target North Korean leader Kim Jong-Il for assassination.

At the time of the April 22 Ryongchon explosion, clues collected along the tracks indicated that unhealthy elements had used mobile phones. For fear that internal information would leak [to the outside], the mobile phone business would be stopped.

[Note: The last sentence is pretty interesting; the phrase used is “唯恐” which means “for fear that,” but it can also lead into the idiomatic expression 唯恐天下不乱 which means “in order that all under Heaven remain unchaotic,” which seems to be a tactful dynastic-type allusion to the idea that the DPRK could ignite whenever.]

停止移动电话服务举措的命令由朝鲜国防委员会直接下达，特别是在权力机关或特殊行业就职的人员使用手机受到了严格的限制，原先持有的手机也被没收。朝鲜在境内全面禁止使用手机之后，花大笔钱购置手机的居民大为不满，因为1台手机机身和入网费共约1300美元，在一夜之间就成了废品。

The order to stop mobile phone services came down directly from the [North] Korean National Defense Committee, particularly [stating] that the authority/rights of those in special business sectors to use mobile phones was [henceforth] strictly limited and that previously held mobile phones [should be] confiscated.

After North Korea totally banned mobile phone use within its borders, many residents/citizens, having spent big money (about 1300 USD for everything including accessories and network access fees) to purchase mobile phones, became dissatisfied due to the fact that their cell phones had been rendered into scrap overnight.

[As a side note, I wonder why this news is leaking out of the PRC at a time when Kim Jong Il is said to be mulling over a return trip to China, which would almost certainly be taken by train (through the same station?). It’s a bit mystifying. But then again, Chinese readers probably have more sympathy for North Korea’s striving elites than is often acknowledged and Xinhua, perhaps, puts this story out as a gentle reminder (at a time when people are getting arrested for downloading “unharmonious content” onto their mobile phones) that life in the PRC could be much, much worse. Just my two cents — hope this helps, and thanks for the post.]

ORIGINAL POST (3/22/2010): According to the Donga Ilbo:

A 2004 explosion at a railway station in North Korea was an attempt to assassinate leader Kim Jong Il, China’s state-run Xinhua News Agency quoted an analysis as saying yesterday.

“The train explosion at Ryongchon Station in North Pyongan Province on April 22 that year killed nearly 200 people, injured more than 1,500, and destroyed more than 8,000 homes. The explosion is believed to have been an attempt to assassinate Kim,” Xinhua said.

Though Xinhua quoted an analysis, it is quite unusual for the news agency to say the explosion was an assassination attempt on Kim. Xinhua mentioned the incident while reporting on mobile phone use in North Korea.

The report said the number of mobile phone users in North Korea surged to 20,000 a year after mobile telecom service was launched in November 2002. Pyongyang, however, banned the use of mobile phones following the explosion.

Xinhua said the ban was imposed directly by the National Defense Commission, North Korea’s highest-ranking body, due to fears over the leak of news on the explosion outside of the communist country.

In the early days of mobile phone use, only officials at the people’s committee of the ruling Workers’ Party and the ministries of public safety, national security and defense could use them. After the explosion, however, as many as 10,000 mobile handsets were seized by authorities.

The cost of a mobile handset and registration was as high as 1,300 U.S. dollars when the greenback was traded at 1,200 to 1,300 North Korean won, equal to more than 600 months of monthly wages for the average North Korean worker (2.20 dollars).

In the face of mounting complaints over the ban, North Korean authorities re-allowed the use of mobile phones in March last year.

An estimated 120,000 North Koreans use mobile telecom service. Considering North Korea’s population of an estimated 24 million as of 2008, this translates into one handset per 200 people.

Xinhua added that mobile phones have brought about many changes in the lives of North Koreans.

I am taking this with a grain of salt until I find the source.  I post it here so you can judge for yourself.

Here are before/after images of the Ryongchon explosion.

Read the full srticle here:
“2004 Explosion Was Attempt on Kim Jong Il`s Life”
Donga Ilbo
3/22/2010

By Michael Rank

Chinese officials have announced plans to increase the number of Chinese tourists visiting North Korea from the border region of Yanbian 延边 and are hoping to involve South Korean airlines and to include Vladivostok on the itinerary, a Chinese website reports.

The head of the Yanbian tourism bureau, Jin Chengwen 金成文 (Kim Seong-mun), was quoted as saying they were investigating plans for tours starting in the main city in the region, Hunchun 珲春, which would take in the Russian Pacific port of Vladivostok and Baekdusan 백두산, a mountain on the Sino-Korean border that is the purported birthplace of leader Kim Jong-il, as well as tours from the North Korean port of Rajin 라진 to Pyongyang and Panmunjom.

He said he hoped Korean Air and other South Korean and Chinese airlines would become involved, but gave no details. It was hoped that Chinese tourists would not need passports to visit North Korea, he added.

Another Yanbian tourism official said there were already tours from the border town of Sanhe 三合 to the industrial city of Chongjin 청진 and Baekdusan and to Samji lake (Samjiyeon 삼지옌), a scenic spot near Baekdusan, and Pyongyang, and they were hoping to add a Rajin-Pyongyang-Panmunjom tour. “North Korea is hoping more Chinese tourists will come and tour their country,” he added.

The report said the tourism plans were connected to an agreement announced this month under which China gained the use of a pier at the port of Rajin 라진 for 10 years to help the development of the border region and give Jilin province access to the Pacific.

As NKEW reported last year, Chinese officials are also talking about cruises from Hunchun to the North Korean port of Raseon 라선 (Rasŏn/Naseon/Nasŏn) (which somewhat confusingly seems to be the same as Rajin), Sokcho 속초 in South Korea, just south of the DMZ, and Vladivostok.

North Korea is also hoping to attract tourists from southern China, and has cast its eye on Guangdong province as well as Shanghai.

Also see “China to Offer Railway Tours to N.Korea” in the Choson Ilbo:

A new train service is being offered in China for tours to North Korea. One news website based in China’s Zhejiang Province reported on Wednesday that a large travel agency in the region will offer railway trips from Hangzhou to Sinuiju from April 20.

The trains have 14 sleeper carriages and can transport 800 passengers. They pass Beidahu in Hebei Province and Dandong, Liaoning Province before arriving in Sinuiju, where Chinese passengers will transfer to a North Korean train and embark on an 11-day tour that includes stops in the border truce village of Panmunjom, Mt. Myohyang and the childhood home of former North Korean leader Kim Il-sung. The tours will cost 5,280 yuan for first-class compartments and 4,680 yuan for regular ones.

“Until now, people in Zhejiang Province visited North Korea by flying from Hangzhou either to Beijing or Shenyang and transferring to trains,” said a spokesman for the tour agency. “But the train tours are both cheaper than existing options and offer more sightseeing stops including Beidahu and Dandong, so more than 300 people have signed up already.” China halted tours to North Korea in February of 2006 but decided to start them again this year.

Chinese tourists will not be able to bring mobile phones into North Korea and will also be banned from carrying cameras with zoom lenses and face restrictions on traveling alone in the communist country.

Finally, more information on Chinese tourism has been published in the Donga Ilbo:

Tours of North Korea for Chinese tourists resuming next month have started to be sold in Beijing and Guangdong province, the China Daily said yesterday.

Five to six licensed tour agencies are recruiting Chinese tourists for travel in North Korea in mid-April. As many as 200 people from Beijing alone will visit next month, the daily said.

A few tour packages are up for grabs. A Chinese state-run travel agency is offering a six-day package and a three-day package. For both, tourists will travel by plane but must do so via Hangzhou, Beijing, the North Korean capital of Pyongyang, and Shenyang, so two full days will be needed to get to and from North Korea.

The three-day package is a brief visit to Pyongyang and costs 3,380 yuan (495 U.S. dollars). The six-day tour costing 6,280 yuan (920 U.S. dollars) covers many parts of North Korea. Tourists will visit the day after their departure Mansudae Grand Monument and Chollima Statue in Pyongyang. From the third day, they will go to Panmunjom in Kaesong, beaches in Wonsan, Mount Kumgang, and then back to Pyongyang.

The six-day package could also include a tour to Mount Myohyang. Tourists can also choose to attend a performance celebrating the birthday of North Korea’s late leader Kim Il Sung April 15.

The tourists will also receive a long list of “don’ts.” They will be banned from making noise, mimicking Kim’s postures in front of his statue, and commenting on North Korea’s leaders, politics, military and economy.

Another big no-no is the taking of photos on the trip from Shinuiju to Pyongyang, streets and markets, and images conveying a negative impression of the communist country.

Tourists also must call South Korea “South Korea” instead of the Republic of Korea. They will also be required to leave at immigration offices mobile phones, products with the South Korean or U.S. flag and other symbols of these nations on them, and magazines with open covers upon entering North Korea.

The list also says few public phones are on North Korean streets, adding tourists can make phone calls only at hotels for 16 yuan (2.30 dollars) per minute.

 
Click on images for larger versions

According to Yonhap:

China will mend a rail link between one of its border cities and a North Korean port, a source familiar with North Korean affairs said Sunday, a move that indicates stronger economic ties between the two allies.

North Korea and the municipal government of the Chinese city of Tumen, which borders the North, have recently agreed to repair the railway linking the city with North Korea’s northeastern port of Chongjin, the source said.

Additional Information: 

1. Above I have posted Google Earth images of the China-DPRK border area and a simple map of the DPRK’s North Eastern railway system.

2. Long-time readers will remember that Russia recently installed Russian-gague railway track from the North Korean border to the city of Rason (Rajin-Songbon). It looks like both Russia and China get their own ports in the DPRK.

3. Chongjin is also home to both Russian and Chinese consulates.