Archive for the ‘DPRK organizations’ Category

Some interesting recent publications and articles

Thursday, October 20th, 2011

1. “Relying on One’s Strength: The Growth of the Private Agriculture in Borderland Areas of North Korea”
Andrei Lankov,Seok Hyang Kim ,Inok Kwa
PDF of the article here 

The two decades which followed the collapse of the communist bloc were a period of dramatic social and economic transformation in North Korea. The 1990-2010 period was a time when market economy re-emerged in North Korea where once could be seen as the most perfect example of the Stalinist economic model. The present article deals with one of the major areas of socioeconomic change which, so far, has not been the focus of previous studies. The topic is about the growth of private agricultural activities in North Korea after 1990. This growth constitutes a significant phenomenon which has important social consequences and also is important from a purely economic point of view: it seems that the spontaneous growth of private plots played a major role in the recent improvement of the food situation inside North Korea.

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3. Korea Sharing Movement anti-malarial program (Via Cancor)
Read a PDF of on the project here

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4. What is it like to teach at the Pyongyang University of Science and Technology (PUST)?
Find out from one instructor here. More on PUST here.

 

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DPRK air force short on capital

Wednesday, October 19th, 2011

Pictured above (Google Earth): The DPRK’s underground air force base under construction near Wonsan.

According to Strategy Page (2011-10-19):

South Korea recently revealed that North Korea had gone looking for someone to sell them new combat aircraft, and had been turned down by China and Russia. South Korean diplomats were pleased to find this out, and South Korean Air Force officers were not surprised that the North Koreans were desperate to upgrade their air force.
This was it had earlier been revealed that in late 2010, after North Korea artillery fired on South Korea (Yeonpyeong Island), North Korea quickly made preparations for war. These preparations were apparently ordered without much warning. So too, apparently, was the attack on Yeonpyeong Island.

What the South Korean intel analysts were particularly amazed by was the poor performance of the North Korean air force during this hasty mobilization. It was known that North Korean pilots had been getting less and less flying time in the past decade, but when ordered into the air on a large scale for this hasty mobilization, the results were amazingly bad. The flying skills of combat pilots were particularly unimpressive, as was the performance of many aircraft (indicating poor maintenance). There were several crashes, and many near misses in the air, and a general sense of confusion among the North Korean Air Force commanders and troops.

While North Korea was apparently trying to impress, and intimidate, South Korea with this display of aerial might, the impact was just the opposite. With the exception of ten MiG-29s, the North Korean air force consists of several hundred Cold War era Russian and Chinese warplanes. The Chinese aircraft are knockoffs of older Russian designs, and most of the North Korean fleet consists of aircraft designs that were getting old in the 1970s. The North Korean Air Force training exercise merely confirmed what many South Korean and American intelligence analysts already suspected; that the North Korean Air Force could barely fly, and hardly fight.

Neither China nor Russia wants to encourage North Korea to undertake any more such misadventures; thus the refusal to provide new aircraft. Moreover, North Korea is difficult to do business with, often refusing to pay, or delaying payment for a long time. North Korea is not a good customer, and even China and Russia, who supported the north for over half a century, are fed up with North Korea’s increasingly bizarre behavior.

Kim Jong-il visited an aircraft factory in Russia on his last visit there.  See a satellite image of that factory here. Some speculated he was trying to make a deal for the procurement of Russian fighter jets.

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Daepung International Investment Group established in North Korea: Goals for economic development from 2010 to 2020 set

Friday, October 14th, 2011

Institute for Far Eastern Studies (IFES)
2011-10-13

North Korea’s Daepung International Investment Group, Ltd (Daepung Group) has announced its “Main Target Areas for Economic Development,” with plans to attract foreign investments for the next decade.

Daepung Group presented the “The DPRK’s Main Areas of Economic Development (2010 to 2020)” which included an outline of “Main Targets of Economic Development.” In it were specific plans outlining economic development projects. The projects are separated into industrial, transportation, energy and agricultural development sectors.

North Korean media has reported on the “Ten-year Strategy Plan for National Economic Development,” which was passed by the DPRK Cabinet earlier this year. As a part of the national economic development strategy plan, North Korean authorities commissioned the Daepung Group to fully take the lead in achieving the major targets of the national economic development plan which include substructure construction, agriculture, power, coal, oil, and metal; with heavy emphasis placed on basic industries and regional development as the main sectors for development.

The industrial districts under the target for development are Kim Chaek Mine and Refinery Complex, Chongjin Heavy Industrial Complex, Nason [Rason] Petrochemical Industrial Complex, and Nampo IT Industrial and Technology Complex.

Among the four, Chongjin Industrial Complex will be developed in an area of 50 square kilometers and investments running over 18 to 20 billion USD will be brought in over the next ten years for the construction of a shipyard, automobile manufacturing, electric equipment, and machinery factories and as well as a heavy industrial complex. As for the Nason Petrochemical Industrial Complex, it will be developed in an area of 20 square kilometers over the next ten years with similar amount of investments put in to construct a 20 million-ton capacity oil refinery, 1.2 million-ton capacity ethylene factories, and 1 million-ton fertilizer factories. The initial investments for the following projects are expected to be worth 1.5 million, 1.4 billion, and 8 billion USD, respectively.

Nampo IT Industrial and Technology Complex is expected to be developed at a 30 square kilometer site and is expected to receive 10 to 12 billion USD worth of investment over the next ten years. The development plans for Nampo will mainly focus on research and a combination of different industries in the areas of optical science, microsystems, information media, environmental biology, microelectronic and electronic information, energy science, and renewable energy development.

Kim Chaek Mine Refinery is expected to occupy about 500,000 square kilometers of land and 8 billion USD worth of investment will be brought in to build large-scale facilities such as a 120 million-ton harbor and 5 million-ton iron manufacturing factories. In the first stage of its development, Kim Chaek Iron and Steel Complex was to receive a capacity upgrade of 3 million tons, its harbor a 200,000-ton upgrade, and Musan Iron Ore Mine a 7 million-ton reconstruction upgrade from 2009 to 2011, with the cost expected to be worth 3 billion USD. However, the status of these reconstruction projects has not yet been confirmed.

According to the source, construction of transportation network will take place over the next ten years which includes building of double tracks in the railroad stretching 2,386 km, with the total distance running at 4,772 km. It is expected to cost about 9.6 billion USD. The specific route plans include tracks running from Pyongyang to Nason (780 km), Kim Chaek to Haesan (180 km), Pyongyang to Kaesong (186 km), for trains to run at the speed of 120 to 140 km/hr. In addition, other railroad linking projects are underway.

As for the highway routes, the Pyongyang-to-Nason highway will run about 870 km, Pyongyang to Shinuiju 240 km, Pyongyang to Kaesong 180 km, and other connection roads to mines are expected to stretch about 1,200 km. The entire cost of construction and reconstruction of highways is estimated to be about 15 billion USD.

Although most of the railway and roads have already been built, they are in serious need of repair and widening. This also includes linking the Tumen and Tonghua cities of China to North Korea.

In addition, there are also plans to upgrade Pyongyang International Airport, with an investment of 1.2 billion USD to be used to expand the airport’s capacity to accommodate up to 12 million people a year.

Agricultural development will mainly focus on increasing the size of agricultural pesticides factories to a capacity of 30,000 tons as well as improving the farming machinery and livestock industries.

As for electrical power development, 4 billion USD will be invested over the three years to develop coal mines which will be capable of producing 40 million tons. Specifically, mines in Anju will be upgraded to produce 30 million tons, mines in Bukchang 5 million tons, mines in Ryongdong 2 million tons, and mines in Onsong 5 million tons.

In addition, ten 60 kW thermoelectric power plants will be built across the nation including two in Pyongyang, two in Chongjin, four in Bukchang, two in Anju, one in Kim Chaek, and one in Najin. The plan is to secure 600kW of electric power over the five-year period by investing 50 billion USD.

In a written document, out of a total of 100 billion USD of investments, Daepung Group is planning to allocate 10 billion USD to the Industrial Development Bank, 54.5 billion USD to the Industrial Bank and 35.5 billion USD to basic energy and power sectors. The Industrial Development Bank was established in 2010 and has registered capital of about 10 billion USD and loan volume of 120 billion USD.

North Korea’s Daepung Group is pursuing the economic development plans under the guidance of the State General Bureauof Economic Development, as a part of the larger effort of the “Ten-year Strategy Plan for National Economic Development.” Although it is premature to measure the specific results of the plan, it is clear that focus has been placed on attracting more investments from China.

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Plans for SEZ between China and the DPRK to Come Out at Year’s End

Thursday, October 13th, 2011

Institute for Far Eastern Studies (IFES)
2011-10-5

Dai Yulin, secretary of the Dandong Committee of the Communist Party of China, said in his interview with the China Daily on September 28 that concrete plans for the joint development projects between China and North Korea in the Hwanggumpyong and Rajin-Sonbong regions will be announced at the end of the year.

This past June, Dai stated both countries agreement to jointly develop Hwanggumpyong and Rajin-Sonbong as an economic development zone and reported smooth progress in its plans.

According to Secretary Dai, “The joint management committee between China and North Korea has already been formed to promote the Hamggumpyong development project. Both countries are getting up steam to advance the project.”

In addition Dai explained, “China has secured 10 square kilometers of national land to be used to support the joint development of Hamggumpyong.” He also added, “A think tank comprised of 72 experts was also established to advise and buttress the project.”

When DPRK Cabinet Premier Choe Yong Rim visited China last month, Dai commented, “Choe’s visit to China is underlined with North Korea’s strong interest in economic reform. All the high level officials in the economic sectors accompanied him on the trip.”

While visiting China for five days, Choe met with Premier Wen Jiabao and expressed strong motivation for strengthening trade and cooperation with China, especially to improve its infrastructure. He stated, “For those Chinese companies investing in North Korea, we will provide special accommodations to encourage more investments.” In response, Wen Jiabao commented, “China will do all it can to support North Korea, so that they may seek development method most appropriate for them.”

After the meeting between the two top officials, the two nations came to an agreement to cooperate in trade, investment, and infrastructure, resources and agriculture development.

Prior to meeting with Wen, Choe visited Lanxing Chemical Industrial Machine Co. After he paid his courtesy visit to President Hu Jintao of China in Beijing, he continued to make economic related visits to Baoshan Steel Group, Bailian Xijiao Goods Purchasing Center, and industrial facilities in Jiangsu Province.

After North Korea designated Hwanggumpyong Island as a free trade zone, China has signed a 50 year-lease agreement to develop the island. Despite being a “joint development” in name, in actuality, China has the exclusive development rights based on Chinese capital.

However, North Korea is requesting for revision of the name to “co-development between China and the DPRK,” a request that China is expressing some uneasiness over. The initial agreement was to “lease Hwanggumpyong Islands to China,” which gave exclusive and autonomous development and management rights to China in the zone.

China has articulated on many occasions the Hwanggumpyong project must be strictly based on market principles and expressed apprehension that Chinese businesses may be unwilling to invest in the area if North Korea continues to pursue to change it as a joint development.

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Koryo Bank unveils new debit card

Wednesday, October 12th, 2011

Dr. Bernhard Seliger of the Hanns Seidel Foundation writes in to notify us about the DPRK’s new Koryo Bank (고려은행) debit card.

Click image above to see the front and back of the card.

There is an information flyer available in the DPRK:

According to the translator this is what it says:

Electronic Paying Card (Debit Card)

1. Introduction
* Electronic Paying Card is a cash card with which cardholders can make a payment when buying a merchandise or receiving a service instead of money. We provide the very best customer service, convenience and security.
* Cardholders (including foreign cardholders) can freely make a payment in foreign currency at electronic paying card affiliates.

2. Instruction
*Issuing a card and making a deposit: Card is issued at Koryo card issuing branches. Foreign currency is converted into equivalent North Korean won at a current exchange rate (purchasing price) when cardholders or to-be make a deposit. Issuing a new card is free of charge. Issuing a card, cardholders should register a private password to prevent use of a third party. Using the card cardholders should remember the password to verify identity.

*Procedure of the payment: Card holders are allowed to purchase goods and services within the available balance of the account. Card payment machine verifies identity by crosschecking with the password you enter. If the information is confirmed to be correct upon identification, merchants or acquirers proceed to make the payment. After purchasing, the balance is diminished by the payment.

*Cash Withdrawal: Cardholders who want to withdraw a part or the entire of the remaining balance can be served at Koryo Bank Card issuing branches. The exchange rate is the current selling price.

3. Notice: Cardholders observe the followings as regards to using the card.
*Due to its delicate electronic procedure while the card is to be used, it is recommended not to damage the electronic part of the front.
*Remembering and entering the password correctly is important, since the payment procedure is suspended after 3 times of password errors.
*If the card is destroyed or lost, cardholders should go to the Koryo bank where the card is issued and report the loss and the damage.
*With verifying identity and the balance of the card, a new card is issued.
*Cardholders shall remain liable for the loss incurred by their negligence.

4. Questions and hot line
*When there is a question, a loss, duplication or a lost electronic paying card, Call 462-6315.

Koryo Bank

This is not the only debit card available to foreigners in the DPRK. Dr. Seliger also wrote in earlier this year to inform us of the DPRK’s Narae (나래) debit card.

Here are previous posts on Koryo Bank.

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DPRK courting Coca Cola?

Wednesday, October 5th, 2011

Pictured above, the DPRK’s local cola logo. Image source here.

UPDATE 1: Stephan Haggard believes this is a non-story.

ORIGINAL POST (2011-10-5): According to Forbes:

Global capital is an inherently lonely trade, but as Gabriel Schulze ambles into the conference room of Yanggakdo International Hotel, a towering edifice separated by a ring of water from the rest of Pyongyang, the most impenetrable capital in the world, it’s hard to imagine a more isolated business meeting.

“We warmly welcome you, the Coca-Cola delegation, with Mr. Schulze as your leader,” says Park Chol Su, the president of North Korea’s Taepung International Investment Group, singling out the 6-foot-7 American from his entourage of four people. “I hope this will be a good opportunity to make progress in the relations between the U.S. and Korea.”

Why is a U.S. businessman in Pyongyang pitching America’s most iconic consumer brand to the world’s most inhospitable marketplace? Because, surprisingly, the Democratic People’s Republic of Korea is ready to buy, and eager enough to flex its atrophied capitalistic muscles that it let a FORBES reporter follow along–and record everything–as the Coca-Cola discussions heated up.

Park says his Taepung Group, established by Kim Jong Il himself, wants to bring market principles to a planned economy, even down to setting what price a bottle of Coke made in Pyongyang would go for–sort of. “Costs are based on the demands of the market, but we will respect your price,” Park tells Schulze’s delegation. “If the price is too high, it will be restricted.”

North Korea, the most hidebound and repressive of socialist states, is slowly inviting not only China but also the wider Western World to invest in its near-moribund economy. Officials claim the country is open for business with outsiders, and that the political stripes of the investors do not matter as much as the money in their pockets and the willingness to deal. Chinese companies have signed a number of multimillion-dollar deals to extract resources and build and repair infrastructure, such as making port improvements in the northeastern region of Rason and paving a road from there to the Chinese border. Taepung also claims to have inked billiondollar contracts, including one to develop a huge coal mine, but those deals haven’t been nailed.

American signature brands may actually be most welcome, despite or perhaps because of decades of propaganda casting the U.S. as the devil incarnate. Pyongyang’s economic representatives made clear in this and other meetings, with focus and determination, that they want Yum Brands to open up KFC franchises.

Extreme wishful thinking though this may be, it’s linked to a planned ten-year revamp of the North Korean economy to expand national GDP from a meager $30 billion last year to $1 trillion by 2020. (The country can’t even feed its people; there is severe malnutrition in the countryside.) That all but impossible goal cannot be approached without an unshackling of enterprise, which may never occur, and massive help from the outside world, which may never come. The expression “reform and opening,” so familiar in China, is not yet politically acceptable language in Pyongyang. But North Korea’s courtship of the West has begun.

“Coke is strategic. I hope that Coke will serve as a bridge for relations between the two governments,” says Park, a slight man with a toothy smile and a taste for liquor, over a traditional Korean hot pot lunch and beer. Then, perhaps, sanctions could be lifted and more substantial investments could follow. “The door will be open to the whole world, not only China–even the U.S., even Western countries.”

But so far the West hasn’t come calling. North Korea remains in the dysfunctional totalitarian grip of Kim Jong Il. The regime is a defiant nuclear provocateur linked to proliferating weapons, drugs and counterfeit cash abroad, while operating a terrifyingly effective police state at home. Western companies will require more than the usual amount of persuasion. They will want something the North Koreans can’t possibly provide: a blessing from the White House.

That’s where Gabriel Schulze, scion of the Newmont Mining fortune, with a prospector’s taste for risk and opportunity, comes in. He has been surveying this forbidden market on the strength of informal connections to Coke and one of its bottlers, SABMiller, without either company’s toplevel approval–a Cold War-style mission that affords the higher-ups plausible deniability.

SABMiller sent a regional executive, at Schulze’s invitation, to the May meeting with Taepung Group, adding in a statement for this story, “We have no plans to invest in North Korea.” Coke turned down a request from Taepung Group (via Schulze) to visit this summer, and distanced itself from the remotest hint of soft-drink summitry with this statement: “No representative of the Coca-Cola Co. has been in discussions or explored opening up business in North Korea.”

Coke’s skittishness is striking from a company with a history of selling into almost any market–including such villainous or pariah states as Hitler’s Germany in the 1930s, Franco’s Spain and Pyongyang’s historical sponsors, China and the Soviet Union, in the 1980s (though Pepsi got to the Soviet Union first). North Korea is one of the last frontiers. “That is your task, to become a pioneer,” says Jang Gwang Ho, the senior North Korean official in the coterie greeting Schulze’s group.

Tall, blue-eyed and devout, Schulze is full-blooded pioneer. The great-great-grandson of Newmont founder William Boyce Thompson, he runs a family investment office out of Beijing, Schulze Global Investments, which specializes in China and difficult emerging markets.

While he has close ties to Republicans in U.S. politics, Schulze’s forays abroad, such as a cement plant in Ethiopia, are far from conservative. Schulze Global seeks “double bottom-line returns,” he says, profiting while helping poor emerging markets develop. Bringing Coke to North Korea would be historic, but he knows engagement with Pyongyang might be seen as a folly back home, both financially and politically.

“We understand that there’s a high likelihood that there could be all sorts of trouble and that we could end up losing money,” Schulze tells me after his trip. “There’s a lot of [U.S.North Korea] mistrust, there’s a lot of gamesmanship, and for us it’s not about pretending that that’s not there. We’re not in a little bubble of happiness.”

Would it even be legal for Coca-Cola to do business in North Korea, given international and U.S. sanctions? Those sanctions have proven to be narrow and permissive in practice, and there is no stricture against soft drinks (a sip of CocaCola is already imported, mostly from China, and sold to the few with disposable hard currency).

Hundreds of foreign businesses, most of them Chinese, have come into North Korea despite cautionary tales of investments gone bad, of officials changing the terms or the rules, soliciting bribes, demanding substantially higher payments or expropriating joint ventures.

And these businesses have made money. In a 2007 survey of 250 Chinese operations in North Korea, scholars Stephan Haggard and Marcus Noland found 88% saying they could turn a profit. (A majority also reported paying bribes.) Enterprises routinely encounter difficulties, yet many persist, hopeful for economic liberalization.

At least one American investor has profited in North Korea as well: Schulze Global. Three times in 2008 it made loans of hundreds of thousands of dollars to mining companies to buy equipment and expand, and each was repaid. This summer Schulze lent an additional $1 million to finance a North Korean conglomerate’s purchases of corn to feed its workers. (He consulted with sanctions lawyers in America before making the loans and has filed notices with the U.S. Treasury Department.)

“That opened the doors” to the Coke project, Schulze says. Making the world’s favorite carbonated beverage in Pyongyang would be quite another matter, though. The country still operates on a planned economy and has difficulty even manufacturing plastic bottles and cans. The government barters for sugar from Castro’s Cuba and would probably have to import steel to build a Coke factory. And although the estimated per capita income is $1,200 a year, the Coke factory’s workers would be paid barely more than a dollar a day (low wages are a key selling point to foreign investors). Further, the nation is plagued with persistent food shortages that force the regime to rely on international aid. Does a country this poor have consumers for the iconic American drink?

The answer is yes, at least in the capital. Home to the privileged upper crust, or an eighth of the nation’s 24 million people, Pyongyang has a visibly robust elite economy. The city’s wide Stalinist thoroughfares, bereft of private automobiles five years ago, are now filled with tens of thousands of foreign cars, including American and Japanese brands.

Mobile phone use is common, with more than 300,000 accounts in the capital using the 3G network built by Egyptian telecom Orascom. That includes some of the city’s traffic women, famous for white gloves and powder-blue uniforms. With traffic lights now doing most of their work for them, one was spotted on the sidewalk jabbering into her cellphone.

The city’s new Pothonggang Department Store was fully stocked with imported fare to be had at prices in North Korean won that are affordable only at the black-market exchange rate (2,500 won to the dollar at the time, compared with the official rate of 100 won). Name brands like Heinz Ketchup (the equivalent of $4 a bottle), Mars bars (a little more than $4 per bag) and all manner of high-end liquors and cigarettes are on offer, usually imported from Europe or Asia. On another floor you can find imported sweaters, dresses and shoes.

The checkout lines run briskly in midafternoon, the shopping done mostly by women, many of them likely the wives of government officials and army officers. (Kim Jong Il showcased the store with a visit in December.) Out on the streets the proles shop for snacks and locally made sodas–typically fruity concoctions in glass bottles–at hundreds of kiosks throughout the city, mostly priced at the black market rate of 20 cents to 40 cents.

Those prices would be 25 times higher at government exchange rates and thus out of reach for almost all North Koreans on their official salaries–but hard currency is flowing into the capital, “through this and that channel,” Jang says, and is spent. “Although officially they are not receiving the salaries from the government in hard currency, they have! So they like to spend the hard currency for their children because the children like to drink the Coke,” he explains.

Jang, of course, is not a commoner or for that matter a typical North Korean apparatchik. He speaks fluent if idiosyncratic English, was educated partly in the U.K. and is married to a doctor. First vice president of Taepung Group, he has a dual appointment on a government body overseeing economic development. Over two days of meetings Jang exudes an almost relaxed air of detachment. He typically parries questions with humor and stories while puffing on Dunhill cigarettes and flashing a Longines watch. (The president of Taepung, Park Chol Su, is a Chinese national, chosen in part for his Chinese contacts and experience.)

Do North Koreans like to drink beer? asks Anton van Heerden, a South African who runs SABMiller’s Asian supply chain. Yes, especially a growing cadre of retirees. “I can see so many old men, over 60, normally in the evening if we look around the city, they are making a queue to buy the beer,” Jang says, adding with a laugh: “There are crazy people! A lot of people drink the beer–30 bottles in the evening! I don’t know how.”

Friendly though they are with Schulze, Jang and Park both make clear that they answer to a higher power, the leader they refer to only as “the top man,” “the General” or the “Dear Leader”: Kim Jong Il. Park was born to Korean parents in northeastern China in 1959, as Kim Il Sung’s regime recovered from the Korean War. Park built relationships with North Korean officials by selling them much-needed gasoline in the 1990s. He is a salesman again, puffing up his chest as he blusters about the will of the General to change North Korea’s economy, led by his Taepung Group.

Parse the bombast and you get a rare glimpse inside the complexities of power relationships. Park says he has never met the top man and instead takes his instructions from a close Kim confidant, 73-year-old Kim Yang Gon, who is chief of the United Front Department, an intelligence arm of the Korean Workers’ Party, and chairman of the Taepung Group. Still greater power at Taepung likely lies with another member of the board of directors, Kim Jong Il’s brother-in-law Jang Song Taek, who as vice chairman of the National Defense Commission is considered North Korea’s second-most-powerful man. The National Defense Commission, chaired by Kim Jong Il, is also Taepung’s controlling shareholder.

To some Western analysts the tight control of Taepung signals that Kim’s coterie is not an agent of change and reform but precisely the opposite–a means to tighten its grip over the North Korean economy. The reasoning: Kim wants Taepung to bring in multibillion-dollar deals for resources, power plants, ports and roads, they say, so that he and his cronies can control the spoils.

Schulze hears the skeptics. But he notes that a Coca-Cola investment would be far more symbolic than lucrative. The total ante probably wouldn’t exceed $10 million (with Schulze Global’s share at $2 million)–tiny by comparison with some resource deals. He also argues that the only realistic way to engage with North Korea is precisely through those in power. “People say this is the leadership looking to benefit itself, and I would say yes, that is absolutely true.” But, he adds, “it doesn’t negate the fact that selfish ambition can still drive positive change and development, particularly in the economy, which can make a real difference in the lives of North Koreans.”

His groundwork laid in North Korea, Schulze will continue his quixotic quest to lobby not only Coke but also Capitol Hill and the Obama Administration. He is, in a way, following in the footsteps of his great-great-grandfather Thompson, the mining magnate. Thompson shocked his friends in the business establishment when, after returning from Russia after a trip in the fall of 1917, he urged that the U.S. and Britain engage with the new communist regime there to moderate the impulses of Lenin and Trotsky. No one, obviously, followed that advice.

Read the full story here:
Invading North Korea
Forbes
Gady Epstein
2011-10-5

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Friday Fun: Fashion, Beer and Coca-Cola

Friday, September 30th, 2011

North Korean Fashion Archives

Choson Exchange posted the following on their web page:

During our last trip, we met with Korea Daesong Bank, which kindly provided a product catalog from the 80s/90s of their parent company – Korea Daesong Economic Group (KDEG). While fashion definitely has moved on in Pyongyang, we thought that it might be good to share some of the products they display in their catalog – for old times sake. In case you decide that the retro look is for you, do note that KDEG is currently under international sanctions.

Choson Exchange posted the pictures to their Facebook Page, but since there are many people who cannot (or do not) access Facebook, I thought I would post the pictures here:

American beer popular in the DPRK?

Pictured above (left) is a bottle of Budweiser served with dry fish aboard the recent Mangyongbong-92 “cruise” from Rason to Kumgangsan.  Learn more here. Pictured above (right) is a can of Pabst Blue Ribbon (PBR) which has been converted into a candle holder and placed next to a bottle of “domestic” Taedonggang Beer. Click image for source. Maybe the number of hipster visitors to the DPRK has increased?

Coca Cola
Forbes Magazine has a very interesting article on talks between the North Koreans and Coca-Cola! Read the full article here.  I thought this would be a good time to remind readers about the DPRK’s indigenous cola:

Image source here

The soda is “Crabonated” which is a pretty funny typo. Also worth noting are the lengths they have gone through to copy the Coca-Cola brand–as if they are trying to win back market-share from the firm. The colors, red, black, silver and white are the same. The familiar cursive English “C” at the beginning of the word is a close copy. They even tried to replicate the Coke “wave” by adding a literal wave in a similar curve along the bottom of the advert.

 

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New facts about the DPRK’s informal economy

Wednesday, September 21st, 2011

Pictured above (Google Earth): An unofficial street market in Sinchon (신천) is bustling while the nearby official marketplace is closed.  See in Google Maps here.

The Choson Ilbo posted a few factoids about the official and unofficial economies of the DPRK:

The rationing system, the backbone of the socialist planned economy, has nearly collapsed. Some 4 million people still live on rations — 2.6 million in Pyongyang and 1.2 million soldiers.

But a senior South Korean government official said 20 million North Koreans rely absolutely on the underground economy.

“A North Korean family needs 90,000-100,000 North Korean won for living costs per month, but workers at state-run factories or enterprises earn a mere 2,000-8,000 won,” the source said. “So North Koreans have no choice but to become market traders, cottage industrialists or transport entrepreneurs to make up for shortages.”

Many stores, restaurants, and beauty parlors are privately owned. Private tutors teach music or foreign languages. Carpenters have evolved as quasi-manufacturers who receive orders and make furniture on a massive scale. They earn 80,000-90,000 won per month on average.

It is common to find people in front of railway stations or in markets who wait to earn a few extra won by carrying luggage or purchases in their handcarts. Like taxis, their fees are calculated on a basic fee and the distance covered.

In the countryside, people earn money by selling corn or beans grown in their own vegetable gardens in the back yard or in the hills. They can harvest 700 kg of corn a year from a 1,600 sq.m. lot. And by selling 50 kg of corn a month they make 30,000-40,000 won on top of their daily living costs.

“Ordinary North Koreans have become so dependent on the private economy that they get 80-90 percent of daily necessities and 60-70 percent of food from the markets,” the security official said.

Noland and Haggard’s recent book, Witness to Transformation, contains thorough and revealing data on market utilization in the PDRK. More here.

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DPRK expands arsenal over last decade

Sunday, September 18th, 2011

Pictured above (Google Earth): 1.18 Factory (January 18 Factory), which I am told manufactures tanks

According to Yonhap:

According to the Joint Chiefs of Staff (JCS), North Korea added about 300 tanks and 1,200 artillery guns over the past decade. The report comparing the armed forces of the two Koreas was submitted to the National Assembly ahead of the annual parliamentary inspection.

The report claimed that over the same period, the number of North Korean troops went up from 1.17 million to 1.19 million. The JCS noted that financial difficulties haven’t prevented the North from bolstering its military.

On the other hand, North Korea slashed the number of its vessels from about 900 to 740, and its submarines from about 90 to 70. There were 870 fighter jets in the North in 2000, but 820 last year.

You can read the full article here.

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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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