UNDP to resume DPRK operations in February 2010

December 27th, 2009

According to Yonhap:

The U.N. development agency plans to restart its operations in North Korea in February after a two-year hiatus, a U.S. radio station reported Saturday.

Stephane Dujarric, spokesman at the U.N. Development Program (UNDP), told Voice of America that the remodeling of its Pyongyang office was completed in September and works are underway to install furniture and other equipment as well as to connect the Internet.

The office will become “fully operational” by the end of February, he said.

Currently, Jerome Sauvage, head of the UNDP’s Pyongyang office, and two other foreign staffers stay there, with two others due to arrive in Pyongyang in February, according to the spokesman. The UNDP has already recruited 13 North Korean employees, he added.

The UNDP launched development projects in the North in 1981 — including agricultural development, human resource development and economic reform programs. But it withdrew from Pyongyang in early 2007 after suspicions arose over the reclusive communist regime’s misappropriation of development funds.

On her visit to Seoul last month, UNDP Administrator Helen Clark said that her agency will reopen the office “with a small program — around $2.5 million a year and a very small number of employees.”

The UNDP, meanwhile, shut down its office in Seoul earlier this month as South Korea has transformed itself from a recipient of international assistance to donor.

Read the full article here:
UNDP to resume operations in N. Korea in February
Yonhap
12/26/2009

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US Treasury Department issues advisory on DPRK’s Kumgang Bank

December 27th, 2009

According to the US Treasury Department’s Press Release (h/t One Free Korea):

FinCEN Updated Advisory:
North Korea Government Agencies’ and Front Companies’ Involvement in
Illicit Financial Activities

VIENNA, Va. – The Financial Crimes Enforcement Network (FinCEN) today added an additional North Korean bank to its June 18 guidance to financial institutions regarding the involvement by Democratic People’s Republic of Korea (“North Korea”) government agencies and front companies in illicit activities. Based on new publicly available information, Kumgang Bank has been added to the list of North Korean banks. This update amends the FinCEN issuance of FIN-2009-A002, on June 18, 2009.

As further described in the guidance, the U.N. Security Council has called for enhanced monitoring of financial transactions, to prevent the financing of North Korea’s nuclear, ballistic missile, and other weapons of mass destruction (“WMD”)-related programs or activities. The Security Council’s action, combined with the potential that North Korea will attempt to evade these financial measures, illustrates the increased risk that North Korea and North Korean entities, as well as individuals acting on their behalf, pose to the international financial system and financial institutions worldwide.

FIN-2009-A002 can be read here.

Links to previous posts on sanctioned DPRK organizations (US and UN) can be found here.

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DPRK claims food output at 5 million tons

December 27th, 2009

According to the Choson Ilbo:

North Korea in late October informed the UN its food output this year was 5.01 million tons, it emerged on Tuesday. The yield included 2.34 million tons of rice, 1.7 million tons of corn, 560,000 tons of potatoes, 240,000 tons of wheat and barley and 150,000 tons of beans.

The figure represents an increase of 330,000 tons over the 4.68 million tons the North claimed last year. The original estimate was about 4 million tons.

North Korea’s rice harvest increased this year thanks to little harm from floods and droughts, according to North Korea sources. Corn output was poor due to cold-weather damage in the border region with China and Kangwon Province. “Kim Jong-il appears to have carried out the shock currency reform out of confidence that the food situation next year won’t be worse than expected,” speculated a source.

If it is not in urgent need of food aid, the North can afford to be tougher in its dealings with the South and the U.S. for the time being. But there is a chance that the North exaggerated the food output in a bid to demonstrate the success of a “150-day struggle” and a “100-day struggle” where people were swept off urban streets and forced into labor on the collective farms.

With 5.01 million tons of staples, the North would face little problem in feeding its population of 24 million for a year. Its late leader Kim Il-sung once said, “Daily food consumption is about 10,000 tons. If we had 5 million tons of grains a year, we would be able not only to dole out food rations but feed the people with sugar and candy.”

But the food shortage in the North arises not only from a chronic quantitative shortfall but also from uneven distribution and supply. The authorities place priority in food supply on the party and the military. The burgeoning merchant class can also manage. But the old, the weak and the urban poor, estimated at 10 to 20 percent of the population, are marginalized. “Organizations aiding North Korea also need to improve monitoring of distribution,” said a South Korean government official.

Meanwhile, the UN Food and Agriculture Organization said the grain output North Korea informed it of in mid-November was 3.53 million tons. A source said this was because potatoes and beans, which are included in ordinary grain yield estimates, were omitted. “The aim may be to get the maximum possible food aid from the international community,” the source speculated.

Previous posts citing DPRK agriculture statistics can be found here.

Previous posts about the DPRK’s agriculture policies and outcomes can be found here.

Previous posts about the DPRK’s food situation can be found here.

Read the full article here:
N.Korea’s Claims Food Output of 5 Million Tons
Choson Ilbo
12/23/2009

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Farmers Receive First Cash Since 2004

December 24th, 2009

Daily NK
Jung Kwon Ho
12/24/2009

The North Korean authorities apparently started paying farmers as of the 16th, starting with Migok Collective Farm in Sariwon, North Hwanghae Province.

In North Korea, the amount of work each farmer does is calculated and expressed in a numerical value, which is called “labor grade (노력공수).” After the harvest has been gathered, the state’s requirement is handed over, and then farmers are distributed food according to their labor grade, while surplus cash is also supposed to be distributed dependent upon a farmer’s labor grade and the profits of the farm as a whole.

Around the time of the July 1st Economic Management Reform Measure in 2002, cash was distributed in this way, but between 2005 and 2008 there was nothing.

For office and factory workers, payment began on the 17th at approximately the level of the July 1st Economic Management Reform Measure.

A source from South Pyongan Province reported to The Daily NK on the 23rd, “From the 16th, they started delivering cash to those farms which fulfilled the state’s grain production plan. For other farms, which could not accomplish the state’s plan, the authorities gave a subsidy.”

Since some collective farms have received an unusual amount of cash, it has become the talk of the town. In the case of the Migok Collective Farm in Sariwon, an average of 150,000 won per farmer was paid in cash.

Kim Jong Il conducted an onsite inspection of Migok Collective Farm in October, and it is considered a model case because it exceeded its state production target. Hence the unusually generous payments.

Farmers working for the Ryongyeon Collective Farm, which also achieved the state’s plan, got around 100,000 won each.

Despite this apparent state generosity, the source pointed out, “This cash distribution covered only those farms which accomplished state production targets. Since this year’s farming went sour, there are less than ten farms that achieved their targets across the whole country.”

Collective farms which failed to achieve the state’s goals got just 5,000 won per worker.

“This cash distribution seems to be just a one-off measure to straighten out the confusion after the redenomination and to soothe farmers,” the source also asserted.

Regardless, the cash will slow the entry of food into the markets, the source pointed out, saying, “This cash distribution and subsidies will make food circulation difficult in the short term.”

“When farmers do not hold any cash in their hands, their grain flows into the markets. For the time being farmers will not sell rice and food in the market because they have enough pocket money. It causes rising food prices.”

Additionally, the North Korean authorities still have not announced state prices since the redenomination, and they continue to heavily regulate the market. Therefore, food traders are watching the market situation without selling any food.

The logical market principle, that when harvested grain circulates in the market food prices go down, may therefore not hold true this year, and vulnerable classes’ will become more food insecure as a result.

However, the authorities are trying to assure farmers that there will be continuous measures to give them further benefits.

According to the source, “more benefits for farmers” implies a revised grain procurement policy.

He explained, “Until now, the authorities purchased rice for 20 won per kilogram from the farm and sold it for 45 won to the people. However, from now on, the procurement price will be 44 won and supply price to workers and the people will be 18-20 won.“

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2009 Inspections by Kim Jong Il focus on economic, military sites

December 22nd, 2009

Institute for Far Eastern Studies (IFES)
NK Brief No.09-12-22-1
12/22/2009

The latest on-site visit by Kim Jong Il, in mid December, marked the 156th inspection of the year. This is an increase of approximately 170 percent over last year. Among those accompanying the ‘Great Leader’, Secretary of the Central Committee of the Korean Workers’ Party Kim Ki-nam was seen most frequently, traveling with Kim Jong Il on 107 different occasions. Others seen frequently with Kim include Jang Sung-taek, brother-in-law and right-hand man, as well as Party Central Committee Vice-chairman Pak Nam-ki.

According to North Korean media officials, Kim Jong Il’s on-site inspections this year include 64 visits to economically important locations, 43 to military installations, 13 to sites related to foreign affairs, and 36 to other sites, for a total of 156 visits. Kim made only 90 visits during 2008.

Last year, 55 percent (50 visits) of Kim Jong Il’s on-site inspections were to military sites, while 26 percent (24 visits) of trips were to sites related to the economy. This year, 41 percent of site visits were to economically-relevant sites, while only 27 percent were to military sites.

These visits are linked to the recent ‘100-day Battle’ and ‘150-day Battle’ to boost domestic production in order to meet North Korea’s goal of being a ‘strong and prosperous nation’ by 2012.

North Korean authorities are undertaking massive construction projects across the country, such as the building the Huicheon Thermoelectric Plant, tens of thousands of new housing units, and other large-scale construction projects.

Broken down monthly, Kim Jong Il has ventured out to on-site visits 10-19 times per month, with the exception of July (8 visits). He has made 8 visits in December up until the 17th.

It is also important to note those who have travelled with Kim. As mentioned previously, Kim Ki-nam was seen 107 times and Jang Sung-taek travelled with Kim 82 times. In addition, Hyon Chol-hae, a former bodyguard of Kim Il Sung and confidant of Kim Jong Il, made 56 visits, General Ri Myong-su was seen with Kim 48 times, and Vice Marshal of the Korean People’s Army Kim Yong Chun was seen on 30 different occasions.

Of particular interest among all of Kim Jong Il’s public appearances this year is that in November he made a visit to the headquarters of the Ministry of People’s Security. Kim also visited the naval complex in Nampo in mid November, and made his first visit to the North’s very first free-trade zone, in Rason, North Hamgyong Province, inspecting the Rasong Dae-heung Trade Fishery Complex. Both of these followed the inter-Korean naval clash in the Yellow Sea on November 10th.

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North Korea revises economic management laws

December 22nd, 2009

Institute for Far Eastern Studies (IFES)
NK Brief No.09-12-21-1
12/21/2009

The Korean Central Broadcasting Station (KCBS) announced on December 16 that the North Korean Supreme People’s Assembly Standing Committee has revised the North’s Real Estate Management Law, the Commodities Consumption Level Law, the General Equipment Import Law, and other laws related to economic management. This on the heels of the November 30th announcement, when authorities announced across-the-board currency reform measures, apparently in an attempt to regain control of the country’s market economy.

The KCBS reported that the Real Estate Management Law “regulates fundamental issues of real estate registration and inspection, use, and payment of user fees,” but offered no further details.

Since 2006, North Korean authorities established new offices in each city, county, and region throughout the country. These offices were responsible for surveying property, occupied and vacant, claimed by organizations and businesses, as well as recording the size of each structure on these lands.

In the mid-1990s, with the onset of serious food shortages, food rations to workers were halted and North Korean authorities from every branch and level (including the military, railway, business enterprises) were encouraged to distribute foodstuffs in ways more beneficial to themselves. These authorities planned to resolve food distribution issues through agricultural moves.

The new Real Estate Management Law appears to be aimed at labeling land used for private purposes as strategic nationalized land and strengthening the state’s ability to collect real estate taxes. However, the broadcaster failed to explain in detail how this restructuring would occur.

By enacting the Commodities Consumption Level Law, North Korean authorities can control the basis at which goods are injected into each production sector. This appears to be in preparation for taking cost-reduction measures for enterprises related to production in each region. The broadcaster explained that there were legal demands for the enactment and enforcement of regulations on the level of consumption.

The General Equipment Import Law newly regulates import plans, contracts, and the use of goods by factories, schools, hospitals, ships and broadcasters in an effort to control quality. In each sector, the measure prevents double-investment and controls consumption competition.

As these economic control measures are focused on factories and other bases of production along with importers, it appears that, in conjunction with the recent currency reform, North Korean authorities are attempting to control production quality on all levels. For example, as the North is suffering ongoing supply difficulties due to a lack of materials, the law on consumption levels is an attempt to restrict goods by forcefully managing demand. The law on imports appears to be in an effort to regulate general-use goods in light of the increased reliance on foreign equipment.

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Kaesong production value up, export value down

December 22nd, 2009

According to Yohnap:

Production at the Kaesong complex reached US$27 million in October, up 12.1 percent from $24 million a month earlier, the Unification Ministry said. The October figure also represents a 16.9 percent increase from a year ago.

The overall increase was attributed notably to strong output from machinery and electronics manufacturers, which climbed 26.2 percent and 25.5 percent, respectively. Foodstuff and textile goods also enjoyed 24.9 percent and 8.6 percent increases, respectively.

Exports from the complex, however, shrank 9.1 percent from a month ago to $3.11 million, mostly due to a decline in machinery shipments, according to the ministry.

There are currently 116 South Korean firms operating in Kaesong, matching their capital and technology with the cheap but skilled labor of 42,000 North Korean employees.

Read the full article below:
Production at Kaesong complex rises in October
Yonhap
12/29/2009

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Official Government-set Prices Are Publicly Announced in the Markets

December 17th, 2009

Good Friends (h/t Northeast Asia Matters)
North Korea Today No.316 Hot Topics December 2009

North Korean authorities publicly announced the official national prices in the markets. Contents of announcement are as follow: 22 to 23 won per Kg for rice, 8 won for corn, 12 won for crushed maize, 10 won for corn noodle, 22 won for flour, 9 to 13 won for tofu soy, 50 won for soy oil, 12 won for red bean, 10 Won for string bean, 21 to 22 won for potato starch, 15 to 18 won for millet, 45 won for pork, 50 won for chicken, 40 won for dog meat, 45 won for rabbit meat, 30 to 50 won for whiting fish, 35 to 45 won for sea bass (a set of 2), 50 to 100 won for clams, 60 to 100 won for Atka mackerel, 3 won for an egg, 30 to 40 won for dried pepper, 40 won for powdered-sugar (sugar), 3 won for a cake of tofu, 30 to 40 won for a fresh octopus, 3 won for cabbage, 5 won for radish, 35 to 45 won for a package of food seasoning, 300 to 550 won for a ready-made men’s suit, 350 to 500 won for a ready-made women’s dress, 200 to 300 won for men’s underwear, 250 to 350 won for women’s underwear, 35 won for a pair of men’s jogging shoes, 30 won for a pair of women’s shoes, 200 to 300 won for a pair of men’s shoes, 250 to 400 won for a pair of women’s shoes, 10 50 15 won for market fee, 0.5 won for bicycle storage at market.

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North Korea announces new official prices: rice now 23 won per kilogram

December 16th, 2009

Institute for Far Eastern Studies (IFES)
NK Brief No.09-12-16-1
12/16/2009

In accordance with the recent currency reform in North Korea, new state-controlled prices were officially announced on December 9. South Korean NGO ‘Good Friends’ announced on December 13th that rice is now selling for 23 won per Kg, corn at 8 won per Kg, flour at 22 won per Kg, pork at 45 won per Kg and ‘matnaegi’, a common flavor-enhancing food additive, is selling for 45 won per bag. Other prices were also listed per kilogram, including crushed maize at 12 won, corn noodles for 10 won, soybeans from 9-13 won, soybean oil for 50 won, radishes at 5 won, artificial meat for 15 won, and cowpeas for 10 won.

On December 4, the Choson Sinbo, a newspaper printed by the pro-North Korean General Association of Korean Residents in Japan (Jochongryeon), reported that North Korean authorities were planning to lower prices to the same level as was seen when the July 1, 2002 Economic Management Reform Measure was enacted.

At the end of November, prior to the currency reform, rice was selling for 1,850 won in Hamheung, 2,000 won in Cheongjin, and 1,700 won in Pyongyang and Sariwon.

In the markets of these four major cities, corn averaged 737.5 won/Kg, flour was sold for 1,687 won/Kg, and pork was 5,450 won/Kg. Pork is the only item now being sold more cheaply, while the price of all other goods went up with the currency reform.

A source inside North Korea has reported that most market traders are not following government pricing guidelines, however, and that the majority of goods are being sold at even higher prices than Pyongyang has set. In the market in Cheongjin, North Hamgyeong Province, rice was being sold for 50 won/Kg, and corn went for 18 won/Kg, more than double government prices. These high prices appear to reflect supply shortages and hoarding.

After the currency reform was announced, North Korean miners received raises, from a basic monthly wage of 6,000 won to the equivalent of 8,000 (pre-reform) won. Miners in North Hamgyeong Province can now put enough food on the table without needing second jobs. On December 4, the Choson Sinbo also reported that the government has guaranteed that living expenses distributed by factories will be distributed in the new currency.

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