North Korean Economy Watch

Institute for Far Eastern Studies (IFES)

From early on, Kim Jong Un has attempted to strengthen his political power through emulating his grandfather, Kim Il Sung. Recently political slogans from Kim Il Sung era are reappearing.

North Korea’s propaganda website Uriminzokkirir (based in China) claimed in an article entitled “Great Victory Based on Self-Development-First Principle” (posted on January 12) that “the revolutionary spirit of self-reliance through the revolutionary historical course has sublimated into powerful policy of self-development-first principle of today that produced miraculous and dazzling reality surprising the entire world.”

In his New Year speech, Kim Jong Un used the expression “self-development-first principle” for the first time. This slogan is reminiscent of the Kim Il Sung era slogan “self-reliance.”

According to Tongil Sinbo, North Korea’s state-run weekly publication based in Japan, “self-development (jagangryok) refers to the power to empower oneself through his own strength,” and added, “the great Kim Il Sung has created our republic to be a model nation, recognized as a powerful state of self-reliance.”

Kim Jong Un’s new year’s speech emphasized the spirit of ‘self-development-first policy’: “The principle of giving priority to self-development should be maintained in building a thriving socialist country. Worship of big countries and dependence on foreign forces is the road to national ruin; self-development alone is the road to sustaining the dignity of our country and our nation and to paving a broad avenue for the revolution and construction. With affection, trust, dignity and pride in everything of our own, we should achieve the great cause of building a thriving nation and realize the people’s beautiful dreams and ideals without fail by our own efforts, technology and resources.”

Kim Il Sung, in his lifetime coined the term “jaryokgaengsaeng” or “self-reliance” to signify “self-reliance in economy” and stressed that “to build an independent national economy signifies the creation of a nation that can live on its own, a self-sufficient nation.” Kim Il Sung’s “jaryokgaengsaeng” (“self-reliance”) and Kim Jong Un’s “jagangryok” (“self-development first”) are in essence parallel terms.

Since taking the helm of leadership, Kim Jong Un has emulated the appearance of his grandfather Kim Il Sung, including his gait, clothing, and style, in order to draw loyalty from his people.

Not surprisingly, North Korean media has used the term “self-development-first principle” on a daily basis since it was first iterated in Kim Jong Un’s new year’s speech.

I noticed the construction of this area some time ago and reported it in 38 North last month. Now the North Koreans have told us something about it. According to KCNA (December 22):

Sinuiju-River Amnok Tourist Zone of DPRK Opened to Visitors

The Sinuiju-River Amnok tourist zone in the DPRK was opened to visitors with due ceremony on Sunday.

The zone, developed in the shore of the River Amnok jointly by the Korea Myohyangsan Travel Company and the Dandong International Travel Agency of China, has modern all-round service facilities.

Present at its opening ceremony were Ri Ung Chol, deputy director-general of the State General Bureau of Tourism, and other officials concerned of the DPRK and officials concerned and tourists from China.

An inauguration address and a congratulatory speech were made at the ceremony before cutting the tape for the completion of the tourist zone.

Then its participants went round the zone.

Here is some additional information from the Yonhap (2016-1-1):

Chinese media reports said the Chinese travel agency invested 50 million yuan ($7.6 billion) to build the facilities and construction begun in April last year.

The Chinese tourists arrived at the North Korean tourism zone on Wednesday, according to Chinese media reports.

The North Korean city of Sinuiju sits just the opposite of the Chinese border city of Dandong, where about 70 percent of bilateral trade between the allies is being conducted.

About 60,000 Chinese people are estimated to travel to North Korea via Dandong a year, with another 10,000 Chinese making tours to the North a year via Hunchun, according to Chinese industry estimates.

And according to the Choson Ilbo:

North Korea has opened a riverside passport-free, visa-free zone where Chinese tourists can shop duty-free has opened on the shore of the Apnok River in Sinuiju, China News Service reported Wednesday.

Visitors can stay for a day and also enjoy North Korean food and various performances, but they will have no access to the rest of the country.

The tourism zone sits at the point where a recently completed bridge crossing the Apnok River starts. “It was developed jointly by North Korean authorities and a travel agency in Dandong,” the news agency said.

It measures 130,000 sq.m and has cost 50 million yuan since construction began in April. It contains restaurants, duty-free shops, a theater and a cruise boat terminal.

It can accommodate up to 10,000 tourists at a time and a full tour can take up to five hours.

The passport-free rule is a huge departure for North Korea, which normally confiscates the passports of Chinese day visitors until they leave.

Instead they can get a travel pass by simply presenting their ID card. It is in theory issued the same day.

“The zone is an island-like area that has been built after part of the Apnok River shore on the side of Sinuiju was reclaimed,” a source in Dandong said. “It’s impossible for Chinese tourists to enter the North Korean mainland from there because soldiers block the road to Sinuiju.”

According to NK News:

Tour operator Young Pioneer Tours (YPT) told NK News the new zone was currently open to Chinese tourists who will not require a visa to cross into the DPRK when visiting the area.
…
“The tour will cost Chinese nationals 300RMB ($46) and that includes the return trip on the boat,” YPT guide Rowan Beard said.
…
“It’s just a typical little holiday zone that the Chinese visitors would enjoy. Shopping and food,” Beard said.

See this additional post on the Sinuiju International Economic Zone.

For what it is worth, here is the route taken by Ri Ul-sol’s funeral procession:

It started at the Central Worker’s Hall and ended at the Patriotic Martyr’s Cemetery. The route is approximately 17.5km (10.87 miles).

Michael Madden has info on Ri Ul-sol here, here, here, and here.

Institute for Far Eastern Studies (IFES)

The September issue of the North Korean foreign magazine Kumsugangsan revealed that Kaesong ginseng is selling well at Pyongyang International Airport’s duty-free shops.

According to the magazine, there are a variety of goods and shops on the second floor departure waiting area of the airport, including souvenir shops, duty-free shops, magazines, coffee, soft drinks, and ethnic restaurants. “The souvenir shops are particularly popular with customers and are full of natural medicinal ingredients like the indigenous ginseng,” the magazine explained.

Salesperson Choi Jin Hyang commented, “Ginseng is divided into grades of chon, ji, and in. The chon-grade ginseng is very good […] In the case of Kaesong Koryo ginseng, the popularity of the chon-grade red ginseng is growing every day.”

Ginseng products like Kaesong Koryo ginseng tea, Kaesong Koryo red ginseng powder, ginseng extract, Kaesong Koryo ginseng pollen, as well as indigenous natural products from Mt. Kumgangsan and Mt. Myohyang are sold in these shops.

The airport’s ethnic restaurants serve dishes such as sinseollo (Korean casserole), Pyongyang naengmyeon (cold noodles), and nokdu jijim (mung bean pancake), while duty-free shops sell hanbok (Korean traditional dress). There are also duty-free shops in the arrival area of the airport.

In the departure procedure area on the second floor, there are shops that sell food, watches, makeup, and bags, as well as booths that sell plane tickets and an international communications office. Various products are sold in the food shops, including Pyongyang Soju and products produced by Rason Daehung Trading Company.

The third floor is a professional service zone that non-travellers can also use. It includes an Asian restaurant, a European restaurant, electronic products, shoes, clothes, and a children’s shop.

The magazine added, “Two brave white tigers, adorned on the outside walls [of the Pyongyang International Airport], and gable roof doorposts preserve Choson’s native ethnic characteristics […] There are also ground and underground parking lots each with the capacity to accommodate over 100 vehicles.”

According to Reuters:

It’s much more dangerous, and twice as expensive, to defect from North Korea since Kim Jong Un took power in Pyongyang three and a half years ago, refugees and experts say, and far fewer people are escaping from the repressive and impoverished country.

With barbed-wire fencing erected on both sides of the Tumen River that marks the border with China, more guard posts and closer monitoring of cross-border phone calls, the number of North Koreans coming annually to the South via China has halved since 2011.

Most defections are arranged through brokers, usually Chinese citizens who are ethnically Korean, and their charges have doubled to about $8,000 per person, beyond the reach of most North Koreans – and that gets them only as far as China.

“Intelligence has stepped up monitoring (of phone calls) on border passages, dampening brokers’ activities,” said Han Dong-ho, a research fellow at the government-run Korea Institute for National Unification in Seoul, who regularly interviews defectors.

“The more dangerous, the more expensive. Many connections with brokers, which North Koreans call ‘lines’, have been lost.”

The crackdown on defections under Kim has come even as his government has eased restrictions on economic activity, resulting in a slight improvement in livelihoods for many, and providing less reason to escape.

The hundreds of miles of barbed wire strung across T-shaped concrete pillars on the banks of the Tumen were put in place in 2012, according to residents on the Chinese side and historical satellite imagery.

On the North Korean side, guard posts, dogs and shabby concrete watch towers dot the banks of the river, where locals said children from both sides once played together on the winter ice.

“Since Kim Jong Un came in, there have been times where local brokers have refused to go to certain areas on the Chinese side because of the increased security risk,” said Sokeel Park of Liberty in North Korea (LiNK), which works with defectors.

There are 27,810 North Koreans resettled in South Korea, according to Seoul’s Unification Ministry.

The annual number of defections rose steadily from the late 1990s, according to South Korean government data, when a devastating famine sent desperate North Koreans into China in search of food. It peaked in 2009, when 2,914 North Koreans arrived in the South – the greatest influx since the end of the 1950-53 Korean War.

But in Kim Jong Un’s first year in power in 2012, just 1,502 North Koreans made it to the South – a 44 percent decrease on the previous year. Last year, the number was 1,396.

Disguises and secret codes
From his smoke-filled office in Seoul, human rights activist and defector middleman Kim Yong-hwa manages secret hideouts in China for North Korean refugees, sending them South Korean clothes for disguise and secret codes to communicate with brokers.

“There are still many people who want to cross over to China and to South Korea, but the reality has changed,” said Kim, who is himself a defector and heads the NK Refugees Human Rights Association of Korea.

Kim connects North Koreans hiding in China with brokers there, asking the defectors to get new mobile phones or wipe their contacts to keep traceable calls to a minimum.

Tighter border controls, however, have significantly increased the risk – and therefore the cost – of defecting.

Kim, who says he has helped thousands of North Koreans flee the country over the last decade, has considered closing his business this year due to his network of willing brokers dwindling to 20 from about 60 in the past.

“They demand advance payments now, given the risks they have in China,” Kim said, adding that he has resources to help only half of the 40 or 50 North Koreans who call him every month.

The overwhelming majority of defectors are female, and come from just two neighboring provinces in the northeast of the country, far from the capital Pyongyang, in an area bordering China where North Koreans considered disloyal under the country’s political class system have traditionally been sent.

Unlike men, who tend to have obligations to the state and workplace, North Korean women often have more flexibility and are freer to trade, smuggle, or secretly flee. Women accounted for a record-high 83 percent of the 292 defections to South Korea in the first three months of 2015.

Those who make the illegal crossing risk being shot, or repatriated and possibly tortured, according to a United Nations report last year.

But beyond the danger of getting caught at the border, an improvement in living conditions in some parts of North Korea may affect anyone’s resolve to leave the country. Economically, North Korea has changed since the famine years of the nineties, and a burgeoning market economy means food is easily obtained.

“All things being equal, an improving economy in North Korea, especially in the northeast provinces, would also lead to a decline in defector numbers,” said Park of LiNK.

But a gradual improvement in living standards cannot account for the 44 percent drop in defections under Kim Jong Un, Park said, pointing to the ramped-up border security.

“Compared to 10 years ago the primary motivation for defection has gone from food, to freedom,” he said.

Read the full story here:
It now costs $8,000 per person to defect from North Korea
Reuters
Ju-min Park and James Pearson
2015-5-21

According to Yonhap:

Chinese firms have proposed establishing a non-tariff trade market with North Korea where cheap goods can be traded without tariffs between the two nations, according to the Chinese border city of Dandong on Monday.

The proposal was made by representatives of Chinese firms in Dandong on Thursday when they met with a North Korean trade delegation, led by Pak Ung-sik, director of the North’s Korean International Exhibition Corporation, according to a statement posted on the Chinese city’s website.

More than 70 percent of bilateral trade between North Korea and China is conducted through Dandong.

Pak reacted positively to the proposal, saying he would relay it to the relevant North Korean authorities and hopes to hold more discussions over the proposal, according to the statement.

Another Chinese border city, Tumen, in the northeastern Jilin province, opened a non-tariff trade market with North Korea in 2010, but the market was quickly suspended as North Korea banned civilians from participating in it due to concerns over the spread of banned materials that may enrage the North’s leadership.

At that time, Tumen had pledged not to impose tariffs on the trade of goods worth less than 8,000 yuan (US$1,287) per person.

China’s is the economic lifeline of North Korea, but their political ties remain strained over the North’s defiant pursuit of nuclear ambitions.

North Korea’s annual trade with China fell 2.4 percent from a year ago in 2014, marking the first decline since 2009, according to data compiled by the Beijing unit of the South’s Korea Trade and Investment Promotion Agency (KOTRA).

The North’s trade with China totaled US$6.39 billion last year, compared with $6.54 billion in 2013, the data showed.

Read the full story here:
Chinese firms propose non-tariff trade of cheap goods with N. Korea
Yonhap
2015-3-30