Developing countries work to lower trade barriers

November 19th, 2009

Ever since President Clinton left office the US has lost its leadership role in the movement towards liberalized global trade.  Yes American politicians publicly talk about their support for free trade, but for the last nine years American (and European) politicians have thrown their support behind narrow regional interests rather than behind the interests of the nation (or continent) at large.  Agriculture and manufacturing lobbies in developed countries especially have successfully opposed trade agreements which would give all consumers more choice and bring much needed capital to developing countries.

So I am happy to see a group of developing countries buck the developed world and work towards liberalizing trade without us.  According to Reuters:

As the World Trade Organisation’s Doha round stumbles into its ninth year with no end in sight, a group of 22 developing countries are poised to clinch their own deal to cut tariffs and boost trade among themselves.

The deal to expand the General System of Trade Preferences (GSTP) could be announced during the WTO’s own three-day ministerial conference starting Nov. 30, when trade ministers from most of its 153 members will be in Geneva.

The 22-member GSTP includes heavyweights such as Brazil, India and South Korea, as well as some of the poorest countries including North Korea and Zimbabwe. China and South Africa are not involved.

The GSTP is one of the few forums where both North and South Korea sit and negotiate together.

Trade officials and diplomats said the likely deal would involve countries cutting their actual, or “applied”, tariffs by 20 percent or more, on 70 percent of goods.

This outline deal, or formula, known in trade jargon as “modalities”, would then be implemented in the coming months in detailed work applying the tariff to individual products.

Countries could also negotiate deeper cuts with each other that would then be available to the whole group.

A study by the United Nations Conference on Trade and Development (UNCTAD), which is providing technical assistance to the GSTP talks, estimates that a 30 percent cut in tariffs by the 22 countries would boost their exports by $11.7 billion, while a 20 percent cut would increase them by $7.7 billion.

Read the full story below:
Developing countries ready tariff deal without WTO
Reuters
11/19/2009

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Posted in International trade | Comments Closed

After Kim Jong il

November 19th, 2009

UPDATE:  The full transcript of Mr. Kim’s presentation at the Brookings Institution has been posted to the Brookings web page in PDF format here.

ORIGINAL POST: Kim Kwang Jin’s  curriculum vitae is one of the more interesting I have seen.  He received a bachelor’s degree in English from the Pyongyang Foreign Language Institute and a degree in British literature from Kim Il Sung University.  His work experience includes time spent on a Three Revolution Work Team, a professorship at Pyongyang Computer College, and finally posts at the DPRK’s Foreign Trade Bank and the Korean Foreign Insurance Company.  At the Korean Foreign Insurance Comany, Mr. Kim’s job performance garnered international headlines (here and here) .

Today Mr. Kim is a fellow at the US Committee for Human Rights in North Korea where he has written a paper on potential scenarios that might emerge in a post-Kim Jong il DPRK. This paper draws on Mr. Kim’s unique knowledge of the relevant actors and political institutions — as well as a thorough understanding of DPRK culture — to assess the viability of competing visions of the DPRK’s future.

US Committee for Human Rights in North Korea has given me permission to post a PDF of the paper below for you to download:

After Kim Jong-Il:
Can We Hope for Better Human Rights Protection?
Kim Kwang Jin
HRNK
October 2009
(Click here to download PDF)

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Posted in Political economy | 2 Comments »

UN panel claims DPRK evading sanctions

November 18th, 2009

The UN panel responsible for implementing UNSC resolutions pertaining to the DPRK has written a report (which is not yet publicly available) claiming that the DPRK continues to evade UN sanctions. According to two different Bloomberg stories :

“The Democratic People’s Republic of Korea has established a highly sophisticated international network for the acquisition, marketing and sale of arms and military equipment,” said the report by a Security Council panel established in June to assess the effectiveness of UN sanctions.

The report said arms sales banned by the UN “have increasingly become one of the country’s principal sources for obtaining foreign exchange.” North Korea has used “reputable shipping entities, misdescription of goods and multiple transfers” to hide arms smuggling, according to the report, which has been circulated within the Security Council and not yet publicly released.

…

North Korean companies and banks that have been barred from foreign transactions are circumventing the prohibition through subsidiaries, according to “indications” from some member governments, the report said. The Korea Mining Development Trading Corp., cited in April for violations of UN sanctions, “continues to operate through its subsidiary companies,” according to the report.

The Kwangson Banking Corp. and Amroggang Development Bank substitute for or act on behalf of Tanchon Commercial Bank and the Korea Hyoksin Trading Corp., the UN panel said authorities in unspecified countries have determined. The U.S. earlier this year froze the assets of the Kwangson and Amroggang banks.

The UN panel said North Korea is believed to have exported arms to countries in Africa, Southeast Asia, the Middle East and Latin America. Only a “very small percentage” of North Korea’s illegal arms trade has been reported or discovered, the report said.

An example of attempted trade in contraband was reported in August by the United Arab Emirates, which seized a ship carrying North Korean-manufactured munitions, detonators, explosives and rocket-propelled grenades bound for Iran.

According to Reuters:

The Security Council imposed the sanctions, including arms embargoes, asset freezes and travel bans, in resolutions in 2006 and 2009, in response to North Korean nuclear tests and ballistic missile launches. This year for the first time, it listed eight entities and five people who were being targeted.

A report obtained by Reuters on Wednesday was the first to be written by an expert panel set up by the Security Council in May to vet implementation of the sanctions. It is due to be discussed in closed-door council consultations on Thursday.

The six experts said there were several different techniques employed by the isolated communist state to conceal its involvement.

“These include falsification of manifests, fallacious labeling and description of cargo, the use of multiple layers of intermediaries, ‘shell’ companies and financial institutions to hide the true originators and recipients,” the report said.

“In many cases overseas accounts maintained for or on behalf of the DPRK are likely being used for this purpose, making it difficult to trace such transactions, or to relate them to the precise cargo they are intended to cover.”

The experts said North Korea likely also used correspondent accounts in foreign banks, informal transfer mechanisms, cash couriers “and other well known techniques that can be used for money laundering or other surreptitious transactions.”

On illicit arms shipments, the report raised the case of the seizure of a “substantial cargo” of weapons from North Korea. It was apparently referring to arms seized in August by the United Arab Emirates from an Australian-owned ship.

The report also said the North continued to import luxury goods intended for its leadership, despite a U.N. ban. It noted that in July, Italy blocked the sale of two yachts that police said were destined for North Korean leader Kim Jong-il.

The panel, which began work just two months ago, said it would work on recommendations to the Security Council for further firms and individuals to be put on the sanctions list as well as goods whose import by North Korea should be banned.

It also promised more exact definitions of small arms — the only kind of arms Pyongyang can import under existing sanctions — as well as of luxury goods.

Marcus Noland has cleverly named the strategy of tracking down North Korean military financiers and arms dealers “Wac-a-mole“.

Read the full stories below:
North Korean Global Arms Smuggling Evades Ban, UN Panel Says
Bloomberg
Bill Varner
11/18/2009

North Korea Arms Trade Funds Nuclear-Bomb Work, UN Panel Says
Bloomberg
Bill Varner
11/19/2009

North Korea maneuvers to evade U.N. sanctions: experts
Reuters
11/18/2009

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Posted in Amroggang Development Bank, Hyoksin Trading Corporation, International trade, Iran, Korea Kwangson Banking Corp., Korea Mining Development Trading Corporation (aka Kapmun Tosong, KOMID), Military, Tanchon Commercial Bank, UN, UN Security Council | Comments Closed

DPRK ship sinks off coast of China

November 18th, 2009

According to Bernama of Malaysia:

Chinese maritime authorities launched a search for six seamen from the North Korea on Wednesday, who went missing after their cargo ship sank off China’s coast, Xinhua reported.

Altogether 20 North Korean crew members were aboard the vessel when it sank due to strong winds about 90 nautical miles southeast of Dalian, in northeast China, at noon on Tuesday, said Zheng Jian, of the Ministry of Transport’s Rescue and Salvage Bureau.

The Ministry’s Beihai Rescue Bureau immediately dispatched a helicopter to the area after receiving an SOS signal from the ship, and rescuers picked up one survivor two hours later, Zheng said.

The rescued seaman said 14 colleagues on two life rafts had been swept away by waves, Xinhua quoted as saying.

The Beihai Rescue Bureau also sent two rescue vessels to the area, and rescuers saved another 13 sailors from a raft late Tuesday afternoon, Zheng said.

“We are still searching for another raft and the other six crew members,” he said.

The cargo ship was en route from the North Korea port city of Nampo to Dalian when it sank, he said.

This week Somali Pirates also captured a North Korean crewed vessel.

In 2008 another DPRK ship sank in the Black Sea.

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Posted in International trade, Sea shipping, Transportation | Comments Closed

Koryolink continues to expand customer base

November 17th, 2009

At the end of Q2-2009 Koryolink had signed up nearly 48,000 subscribers.  At the end of Q3-2009, this number has grown to more than 69,000.  According to Telegeography:

North Korea’s only mobile operator, CHEO Technology, which offers services under the Koryolink brand, has signed up 69,261 customers as at 30 September 2009. The company was awarded a 25-year licence to operate 3G services in January 2008, with the first four years on an exclusive basis. It is owned by Orascom Telecom Holding of Egypt (75%) and state-owned Korea Post and Telecoms Corporation (25%). Koryolink launched services in December 2008 in the capital Pyongyang, but the network has since been expanded to include the main road running up to the northern city of Hyangsan, with the company currently working on expanding services nationwide. In the first nine months of 2009, the cellco reported revenue of USD18.5 million, while earnings before interest, tax, depreciation and amortisation (EBITDA) reached USD9.99 million with a margin of 54%. Average revenue per user (ARPU) for the third quarter of 2009 totalled USD21.6, down from USD22.8 in the previous quarter. With a focus on network rollout and network quality improvement, Koryolink invested USD25 million in the first nine months of 2009.

Thoughts and additional information:

1. For the record, Koryolink is not the only mobile phone operator in the DPRK.  It is the only 3G operator. A little research on this site will turn up plenty of information on the DPRK’s first cell phone provider.

2. See past Koryolink and Orascom posts here.

3. It is interesting that the DPRK and Orascom have expanded 3G service from Pyongyang to Myohyangsan.  Though a popular spot for North Korean elites and tourists, it is not a commercial hub by any means…

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Posted in Cell phones, Communications, Orascom Telecom Holding, Telephones | 1 Comment »

Inter-Korean trade sees second monthly increase

November 16th, 2009

According to Yonhap:

Trade between South and North Korea grew for the second consecutive month in October amid improving global economic conditions and eased cross-border tensions, customs data showed Tuesday.

According to the data provided by the Korea Customs Service, inter-Korean trade totaled US$172.6 million last month, up 5.9 percent from the same month a year ago.

Shipments to the North totaled $71.9 million in October, while those from the communist country came to a monthly record $100.7 million, the data showed.

This marked the second straight month of expansion since September when trade turned positive after declining for the previous 12 months.

See the September trade increase story here.

See analysis of the previous year here.

Read the full article below:
Inter-Korean trade grows for 2nd straight month in Oct.
Yonhap
11/17/2009

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Posted in International trade, South Korea, Statistics, Trade Statistics | 1 Comment »

Pyongyang shouts at Seoul, but demand for money is louder.

November 15th, 2009

Friday, November 13, 2009 (KCNA):

The head of the north side delegation to the North-South General-Level Military Talks on Friday sent the following notice to the south side, clarifying the truth behind the recent armed provocation in the West Sea and the principled stand of the Korean People’s Army on it in connection with the south side’s sophism making profound confusion of right and wrong over the incident:

It is the politically motivated shameless provocation to resort to a futile military adventure to preserve the illegal “northern limit line” still today when the times have changed.

Warships of the navy of the south Korean forces described the exercise of the right to self-defence by a patrol boat of the north side as “an act of trespassing on the above-said line” and preempted the firing of direct sighting shots and “shots aimed at destroying it”, not “warning shots” though they were well aware that the patrol boat and its crew sailed to confirm an unidentified object. This was an inexcusable deliberate and open military provocation.

The rash action perpetrated by them, firing thousands of bullets and shells with several warships involved at a time was a premeditated action of the rightwing conservative forces and bellicose military group of the south side to stem the trend of the situation on the Korean Peninsula which has shown a sign of detente through the third skirmish in the West Sea.

Upon the authorization, I notify the south side of the following principled stand of the KPA on the gravity of the incident:

1. The south side should make an apology to the nation for orchestrating the recent incident and putting it into practice and take a proper measure to promptly punish the prime movers of the incident as maniacs of confrontation with fellow countrymen and harassers of peace.

2. The south side should behave with discretion as required by the times and the desire of the nation, clearly mindful that its stand to preserve the “northern limit line” no longer works.

3. Reminding again that there exists in the West Sea of Korea only the extension of the Military Demarcation Line in the waters set by the KPA side, it will take merciless military measures to defend the extension from this moment.

4. The south side will be held fully accountable for having disturbed the reconciliation and unity of the nation and hamstrung the efforts to achieve peace and reunification and have to pay a dear price for them.

Just one day later–from the Associated Press:

A North Korean cargo ship entered South Korean waters Saturday — a sign that trade has been unaffected by a recent deadly naval clash off their western coasts, an official said.

The ship dropped anchor west of Seoul just one a day after North Korea’s military threatened to “take merciless military measures to defend” itself and warned that South Korea would be forced to pay a heavy price for the recent firefight over their disputed maritime border.

A Unification Ministry spokesman says, however, that neither side has taken any measures to restrict inter-Korean trade — one of few legitimate sources of foreign currency for the impoverished communist North.

The naval skirmish was the first in seven years and came ahead of a trip to Seoul by President Barack Obama, who arrives Wednesday. A senior South Korean military officer said one North Korean officer died in the fight and three others were wounded. South Korea suffered no casualties.

South Korea responded by putting its 680,000-member military on guard, though officials said they have seen no evidence of unusual North Korean moves.

The cargo ship, delivering silica to a South Korean company, passed through the disputed border Saturday and is scheduled to enter Incheon port on Monday, said a Port Authority official. He asked not to be identified because he was not authorized to speak to media.

The decision to permit the North Korean ship entry was made before the clash, Unification Ministry spokesman Chun Hae-sung said. North Korean ships have docked 35 times at the port the in the first nine months of the year, according to the Port Authority.

South Korea is the No. 2 trading partner of North Korea, with trade volume reaching $1.1 billion in the first nine months of this year, according to the Ministry, which handles inter-Korean affairs.

“Silica” is silicon dioxide, and it is more commonly known as sand.  Read past posts about the DPRK – RoK trade in sand here.

UPDATE: According to the Washington Examiner:

The ship unloaded 1,750 tons of silica at Incheon Port, west of Seoul, and sailed back to the North later Monday, according to port official Lee Jin-wu. The ship departed from a North Korean port last Thursday, two days after the neighboring countries clashed along their disputed western sea border.

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Posted in International trade, Mining/Minerals, Sand, Sea shipping, South Korea, Transportation | Comments Closed

Recent DPRK trade and aid stories…

November 15th, 2009

1. Dutch import DPRK clothing and machinery (via Yonhap):

Dutch companies gave purchase orders to clothing and machinery firms in North Korea following their visit there organized by the Chamber of Commerce of the Netherlands in September, said the Japan-based Choson Sinbo in a dispatch from Pyongyang.

“Exchange and cooperation projects that were agreed to in meetings between the Dutch business delegation and the DPRK Commercial Office are entering the stage of implementation,” the report said. DPRK is short for the North’s official name, the Democratic People’s Republic of Korea.

“Production by the (North) Korean clothing and machinery trade firms is underway according to the agreements,” it added.

Dutch businesses along with firms from 14 other countries participated in the Pyongyang Autumn International Fair held Sept. 21 to 24. North Korea holds a trade fair twice a year to draw foreign investment and boost technology exchanges.

The Choson Sinbo said the Dutch firms then showed interest in the information technology area, machinery parts and clothing goods and held talks with pertinent North Korean companies, such as the Joson Computer Center and Unha Clothing Company.

After returning home, the Dutch produced a report on North Korea’s international economic relations for distribution at home and in other Western European countries, the newspaper said.

2. Seoul sets DPRK official assistance budget.  According to Yonhap:

According to its 2010 budget plan submitted to the National Assembly unification, foreign affairs and trade committee, the Unification Ministry allocated 1.18 trillion won (US$1.02 billion), about the same as the earmarked budget for this year, for inter-Korean relations and exchanges.

“The ministry has reflected the government’s policy to continue to proceed with humanitarian projects despite the strained phase in inter-Korean relations,” the ministry proposal said.

Broken down to specifics, 616 billion won has been set aside for the possible resumption of rice and fertilizer aid that was suspended after President Lee Myung-bak took office last year. The sum is slightly less than the 718 billion won for this year but remains mostly untouched. The ministry cited the fall of grain prices as the reason for adjustment.

The amount will be worth 400,000 tons of rice and 300,000 tons of fertilizer that had been annually provided to the North over the past decade. But Seoul officials have said they there is no immediate plan yet to resume the rice and fertilizer aid.

The ministry also set aside 18 billion won and 25 billion won to assist North Korea through non-governmental organizations or international agencies like the World Food Program.

For economic projects, including a joint industrial park in the North’s border town of Kaesong, the proposed budget earmarks 144.8 billion won, up 17 percent from the previous year.

“Massive economic cooperation projects were considered in preparation for the possibility of progress in the North Korean nuclear issue,” the ministry said.

It should be pointed out that Seoul has hardly touched its current inter-Korean assistance budget (here and here).  These sorts of policy moves are intended to offer Pyongyang a highly visible carrot.

3. Pyongyang’s 2009 Kaesong antics have unfortunately scared away more foreign direct investment from the Kaesong Zone, despite significant South Korean subsidies.  According to Yonhap:

Romanson Co., a South Korean watchmaker, said Thursday it has no intention to further invest in an inter-Korean industrial complex because of the political risks.

Romanson operates a plant in the industrial park in the North Korean border town of Kaesong, which turns out 40,000 watches per month. In 2005, the company invested 6.1 billion won (US$5.3 million) to build the factory.

4. And the first shipment of NOKO Jeans have arrived in Europe!  Learn more at their Facebook Page.  Here is a photo of the shipment on Flickr.

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Posted in Economic reform, Foreign aid statistics, Foreign direct investment, International Aid, International trade, Kaesong Industrial Complex (KIC), Special Economic Zones (Established before 2013), Statistics, Sweden | 1 Comment »

Friday grab bag

November 12th, 2009

North Korean defector poetry: I am personally not a big fan of poetry, but some poetry written by North Korean defectors has been translated into English and published.  Read it in Radio Free Asia.

North Korean Leadership Compounds: We have pretty much located all of the “easy to find” leadership complexes in North Korea on Google Earth.  However, not all of them are visible with high resolution imagery.  Here are a few I have recently taken care of:

1. Sinchon Compound (written about by Keji Fujimoto)

sinchon-elite-copound.JPG

Click image for larger version

Download Google Earth overlay here.

2. Island getaway: For the leader who has everything

island-getaway.JPG

Click image for larger version

Download Google Earth overlay here.

3. Sugnam

sugnam-elite-area.jpg

Click image for larger version

Download Google Earth Overlay here

Eight Scenic Views of the Songun Era:

1. Sunrise over Mt. Paektu. (See here)

2. Snow Covered Tapak Sol guard post in Mangyongdae.  (See here – Actually not sure where the guard post is, but this is Mangyongdae)

3. Royal Azaleas on the Chol Pass. (See here)

4. Illuinated night view of the Jangja River in Kanggye. (See here)

5. Ulim Waterfall. (See here)

6. Rezoned Handre (Handure) Plain on the Unhung Cooperative Farm in Thaechon County. (See here)

7.  Potato flowers in Taehongdan. (See here)

8. Poman-ri fish farm. (See here)

A Song was even written about these places.

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Posted in Construction, Google Earth, Real estate, Songun | 2 Comments »

UN simultaneously issed two reports on the DPRK

November 11th, 2009

The first report is by Vitit Muntarbhorn, a Bangkok law professor who works pro bono as the U.N.’s special rapporteur on human rights in the DPRK.  Download the Muntarbhorn Report here (PDF).

The second report is from the office of secretary General Ban-ki Moon. Download the Moon report here (PDF).

__________

The Muntarbhorn report is titled “Situation of human rights in the Democratic People’s Republic of Korea”.  Here is the summary:

This report covers the period from the latter part of 2008 to mid-2009. The analysis points to an array of rights and freedoms which are violated egregiously by the authorities on a daily basis, much to the pain and suffering of the ordinary population. The violations are evidently widespread, systematic and abhorrent in their impact and implications. The freedoms from want, from fear, from discrimination, from persecution and from exploitation are regrettably transgressed with impunity by those authorities, in an astonishing setting of abuse after abuse, multiplied incessantly. They compromise and threaten not only human rights, but also international peace and security. To counter these violations, the Special Rapporteur’s urgent call for action demands comprehensive responses at all levels, national and international.

The authorities in the Democratic People’s Republic of Korea are advised to take measures to respond effectively with regard to the right to freedom from want by ensuring effective provision of and access to food and other basic necessities for those in need and to cooperate constructively with United Nations agencies and other humanitarian actors on the issue; to enable people to undertake economic activities to satisfy their basic needs and supplement their livelihood without State interference; to respect the right to freedom from persecution by ending the punishment of those who seek asylum abroad and who are sent back to the country, and by instructing officials clearly to avoid the detention and inhumane treatment of such persons; to address the fear factor in the country by terminating public executions and abuses against security of the person by means of law reform, clearer instructions to law enforcers to respect human rights, and related capacity-building and monitoring of their work to ensure accountability; to cooperate effectively to resolve the issue of foreigners abducted to the country; to respond constructively to the recommendations of the Special Rapporteur; and to institute a democratic process, shifting the military budget to the social sector.

The international community is invited to underline concretely the need for an integrated approach to overcome the exploitation of the people by the State authorities by advocating for a “people first” rather than the current “military first” policy, coupled with an equitable development process; and to enable the totality of the United Nations system to activate measures to overcome key violations and help guarantee fundamental freedoms in the Democratic People’s Republic of Korea.

The report by Mr. Moon’s office is ALSO titled, “Situation of human rights in the Democratic People’s Republic of Korea”.  Here is the summary:

The present report is submitted pursuant to paragraph 6 of General Assembly resolution 63/190.

The Government of the Democratic People’s Republic of Korea has not recognized the resolutions adopted by the Human Rights Council and the General Assembly on the situation of human rights in the Democratic People’s Republic of Korea. It continues not to accept technical assistance from the Office of the United Nations High Commissioner for Human Rights (OHCHR) and has not granted access to the Special Rapporteur on the situation of human rights in the Democratic People’s Republic of Korea, appointed by the Human Rights Council. This situation has not allowed the Secretary-General to obtain the information necessary to report in full to the General Assembly regarding the subject in question.

The Secretary-General notes with serious concern continuing reports that the situation of human rights in the Democratic People’s Republic of Korea remains grave and that the Government of the Democratic People’s Republic of Korea has not taken significant steps to address persistent reports of systematic and widespread human rights violations and to provide safeguards for human rights. He highlights the fact that the Democratic People’s Republic of Korea continues to face complex humanitarian problems which hamper the fulfilment of human rights. The Secretary- General is deeply concerned at the continued decline of food assistance made available by the international community, despite the worsening shortage of food reported by humanitarian agencies.

The status of the engagement and cooperation of the Democratic People’s Republic of Korea with international human rights mechanisms such as the treaty bodies, the special procedures and the universal periodic review of the Human Rights Council is outlined in the report. The report also contains updates submitted by other United Nations agencies concerning the right to food, the right to health, the rights of the child and the rights of refugees.

The Secretary-General urges the Government to provide safeguards for human rights and ensure domestic legal reform, in accordance with its international treaty obligations. He calls again upon the Government to engage with OHCHR in technical cooperation and to cooperate with the Special Rapporteur on the situation on human rights in the Democratic People’s Republic of Korea. He further calls upon the Government to prioritize its resources in order to address the humanitarian needs of its population and to consider allowing United Nations agencies and their humanitarian partners on the ground to increase their operations, with appropriate monitoring conditions. The Secretary-General urges the international community to uphold its commitment to protecting human rights and helping address the critical humanitarian needs of the citizens of the Democratic People’s Republic of Korea. He strongly encourages all parties concerned to commit themselves in bilateral and multilateral settings to facilitating increased dialogue and cooperation on human rights.

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Posted in UN | Comments Closed

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