US to Announce More Sanctions on NK Entities

September 26th, 2007

Korea Times
Jung Sung-ki
9/26/2007

(UPDATE: On Oct. 23, [2008] the State Department blacklisted two North Korean companies, Korea Mining Development Corp. and Korea Taesong Trading Co., for violating U.S. bans on the sale of equipment used in building missiles or other weapons of mass destruction to Iran and Syria. Citation: “North Korean Plane Was Grounded at U.S. Request “, Wall Street Journal, Jay Solomon, 11/1/2008 ) 

The U.S. State Department is expected to announce additional sanctions on North Korean entities connected to missile proliferation, Yonhap News reported Wednesday.

Some of the entities are believed to be linked to the Korea Mining Development Corporation (KOMID), which was designated in June 2005 in an executive order for supporting weapons of mass destruction proliferation, it said.

The measure would come at an awkward moment as envoys from six nations _ South and North Korea, the U.S., China, Russia and Japan _ gather in Beijing from Wednesday for a fresh round of negotiations aimed at disabling and eventually dismantling Pyongyang’s nuclear weapons and programs.

The U.S. Treasury had frozen some $25 million in North Korea-related money held in a Macau bank in late 2005, a punitive measure imposed as the six countries were signing an agreement toward denuclearization. That led to more than a year’s suspension in negotiations with the North.

The new round of six-party talks is already on shaky ground with suspicions that Pyongyang may have transferred nuclear-related material to Syria, prompting the unexplained Israeli air incursion into Syria earlier this month.

Tom Casey, a State Department spokesman, said Tuesday the new sanctions are related to missile technology transfers and downplayed possible negative repercussions on this week’s talks.

“The company that was sanctioned has been sanctioned previously for the same thing. So the net effect of this is really pretty minimal,” he said. “I don’t see…any reason why this should impact on the six-party talks.”

North Korea accused the United States of defending Israel’s recent airstrike against Syria, calling the strike a grave crime that undermines regional peace and stability.

The North’s main Rodong Sinmun newspaper said, “Israeli warplanes’ intrusion into the territorial airspace of Syria and bomb-dropping are an outright violation of Syria’s sovereignty and a grave crime that destroys regional peace and security,” according to Yonhap.

The North’s comments came days after high-level talks between North Korea and Syria. The two countries, which deny the allegation of a secret nuclear connection, did not provide details of Pyongyang talks.

Andrew Semmel, acting U.S. deputy assistant secretary of state for nuclear nonproliferation policy, said earlier this month that North Koreans were in Syria, and that Syria might have had contacts with “secret suppliers” to obtain nuclear equipment.

Semmel did not identify the suppliers. However, he said he could not exclude the possibility that a nuclear black-market network, run by the disgraced Pakistani nuclear scientist A.Q. Khan, might have been involved.

Semmel’s comments raised speculation that an alleged Sept. 6 Israeli incursion into Syrian airspace was a strike targeting a nuclear installation. U.S. officials have said Israeli warplanes struck a target. One U.S. military officer said the strike was aimed at weapons being shipped to Hezbollah militants in Lebanon.

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Posted in Arms shipment, Illicit activities, International trade, Korea Mining Development Trading Corporation (aka Kapmun Tosong, KOMID), Mining/Minerals, USA | 1 Comment »

Oppressive regime’s ID cards pave path to liberty

September 24th, 2007

Joong Ang Daily
Jeon Jin-bae
9/22/2007

North Korean resident identification cards have become a hot item on the black market in China for ethnic Koreans who want to live in Europe.

Mr. Kim, an ethnic Korean man from China, moved to Paris last year and obtained a resident permit from the French government a few months ago allowing him to stay in the country for 10 years. He asked not to be identified by his full name, because he obtained his permit illegally.

His resident permit states that he is a North Korean refugee and identifies him as a North Korean citizen, not a Chinese national. Kim said he purchased a North Korean resident’s ID card and pretended to be a refugee from China when he sought asylum in France.

Kim said he is not alone. “At least 100 people have sought refugee status in the last year using the same means,” he said.

According to other ethnic Koreans in China, North Korean IDs were traded in cities near the China-North Korea border, such as Yanbian and Dandong. The prices range between 1,000 yuan and 1,500 yuan ($134 to $199), they said.

“As far as I know, there are many North Koreans who want to sell their IDs,” said an ethnic Korean who lives in China.

North Koreans who manage to escape to China are anxious to sell their IDs, because they are afraid of being captured, identified as North Korean and then send back to their homeland.

According to sources, ethnic Koreans who want to live in Europe prearrange their trips through middlemen who transport them through China’s Shenzhen Province to Hong Kong.

From there they fly to Thailand and meet with South Korean middlemen who provide fake South Korean passports.

Using these documents, the ethnic Koreans will often fly to Switzerland and then move to the country of their destination, often France or Italy, via overland routes.

Reaching Europe is seen as being more than half way to success, sources said, because the process of seeking refugee status is relatively simple.

In France, immigrants only have to submit an application along with a North Korean ID card to qualify. The French government then provides a temporary three-month residence permit, which is extended until a final decision is made.

Four months after applying for refugee status an interview will take place. A French official who speaks Korean will question the applicant, but most ethnic Koreans are well prepared to pass this simple screening, the sources said.

Europe is a popular destination because it only costs 10,000 euros for a Korean-Chinese to buy refugee status and various organizations often provide them with extra protection and assistance.

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Posted in Black markets, China, Civil society, Emigration | 2 Comments »

North Korea says Typhoon Wipha destroyed 107,910 hectares of crop field

September 24th, 2007

Yonhap
9/24/2007

Heavy rains caused by last week’s typhoon have destroyed some 107,910 hectares of crop field in North Korea, the country’s state media reported Monday.

Many parts of southwestern North Korea, including its capital Pyongyang, were flooded, leaving at least 14,000 homes and 8,000 buildings submerged or damaged from rains spawned by Typhoon Wipha, the North’s official Korean Central News Agency (KCNA) said. However, it didn’t report on possible human casualties.

Last month, North Korea was hit by its heaviest rainfall in 40 years, leaving some 600 people dead or missing and about 100,000 people homeless.

“Many parts of road destroyed in August were repaired in a short time, but some 90 bridges and roads were buried or destroyed again by heavy rains last week,” KCNA said.

In the southwestern part of North Korea such as South Hwanghae, North Hwanghae, South Pyongan provinces and Pyongyang, the total rain from Sept. 18-21 averaged between 250 millimeters and 470 millimeters, KCNA reported.

The floods in August damaged some 200,000 hectares of farmland in North Korea, according to KCNA report on Aug. 26.

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Posted in Agriculture, Transportation | Comments Closed

Unintended Separation of Young Married Couples

September 24th, 2007

Daily NK
Yang Jung A
9/24/2007

Choi (25) from Hamheung, South Hamkyung Province, married with his fiancé last Spring. Wedding ceremony was accompanied by his neighbors, friends and relatives. Happy life afterwards seemed awaiting the newly wed couple.

All of sudden, serious problem emerged. As in South Korea, North Korean married man provides housing while married woman brings furniture and other basic goods. Rarely a newly wed couple lives with their parents.

However in these days, due to rising house prices, couples have hard time finding new homes. Even if they are fortunate enough to find one, sometimes police or local government officials intervene and confiscate houses for private sales of property, which is, in principle, still illegal in communist North Korea.

Confiscated houses are distributed to Army officers or discharged veterans. Choi’s house was forfeited, too. He went to the police office and protested, but police guards bluntly replied; “Then you can live with your parents.”

The Chois are now in debt to buy another house. And for a while, since there is no house to live together, the newly weds are residing in their parents’ houses separately.

Faulty construction in Yongcheon

Kim (female, 55) live with fear. Her little apartment in Yongcheon, North Pyongan Province, is so weak that it might crumble to ground someday.

She and her family lost home in 2004 Ryongchun station exploision. They had lived in tents for several months until local government finally told them a plan to build new houses for refugees. Delight soon turned to disappointment, however. The apartment was well built outside but faultily done so inside.

Rumors spread that new houses built after Ryongchun incident was so hastily constructed that vulnerable to sudden collapse. Materials were poor and construction phase was too quick. Some houses were not even equipped with proper electricity. Cracks emerged soon.

A neighbor of Kim told her that some party officials embezzled money and materials provided upon Ryongchun residents after the explosion.

For Kim who is living in anxiety, state and the Dear Leader are no more venerable.

Photo market in NK

Hwang (male, 20) from Chongjin, North Hamkyong Province, has father who is involved in Sino-Korean trade. Thanks to his rich dad, Hwang seldom goes to work and instead hangs out with friends. He owns a lot of foreign stuff, which attracts many friends.

His most precious is a Japanese digital camera. While walking down the street with the camera on his hand, every girl looks upon him with envies.

Even in Chongjin, there are an increasing number of people who bring digital cameras. Using digital camera grew fast since three to four years ago. And some people take and sell pictures of customers, 2000 NK won (less than a US dollar) per pic.

According to a friend in Hwoiryeong, it is sold five hundred won per picture taken from digital camera, taking five days.

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Posted in Black markets, Civil society, Dating/Courting, Price liberalization, Real estate | Comments Closed

Expert says N.K. becoming more open, better at dealing with national disasters

September 24th, 2007

Yonhap
9/24/2007

North Korea is becoming more transparent and effective in dealing with disasters, spurred by both internal and external factors, an Asia-Pacific regional specialist said in his latest paper.

Dr. Alexandre Mansourov, a securities studies professor at the Asia-Pacific Center for Security Studies (APCSS) in Hawaii, noted five trends in the North Korean government’s responses over the past decade to nationwide shocks, including floods, typhoons, drought and avian influenza outbreaks.

Increasing transparency is one of the trends, with Pyongyang more quickly admitting to disasters that have struck the nation, he said in a paper (download here) released last week through the Korea Economic Institute in Washington.

It took North Korea several years to admit the impact of natural disasters in the mid-1990s that led to massive starvation and chronic food shortages. But in August 2000, when it was hit by Typhoon Prapiroon, North Korea released the news three weeks after it occurred, and in the two following years, when other typhoons struck, North Korea reported it within three to six days, Mansourov said.

Pyongyang immediately acknowledged flooding in August 2007, he said.

“Observers agree that the timeliness, details, and amount of coverage of flood damage and rehabilitation work in August 2007 is unprecedented.”

North Korea is also showing institutional knowledge and a capacity for disaster management, with new organizations growing out of a decade of learning and experience, such as various provincial centers, the professor said.

The North Korean Red Cross Society has been exceptional, he said, working with the International Federation of Red Cross and Red Crescent Societies, and has made itself the leading agency in disaster preparedness and response.

Inter-agency coordination has also increased, with deputy prime minister-level working groups working closely together in each disaster since the flood of 2001, as there are preventive programs through which basic relief supplies are stored in town and villages.

For example, the 10-year strategy against avian influenza, worked out by the emergency commission in 2005, would have been unthinkable a decade ago, Mansourov wrote.

Another notable trend is the increasing cooperation between the North Korean government and international humanitarian community, gradually allowing joint needs assessments and monitoring, he noted.

Mansourov argued that external factors helped bring about the changes.

“International factors did make a difference in what happened in (North Korea), especially through the introduction of innovative ideas and dissemination of best humanitarian practices,” in addition to foreign aid, he said.

The scholar also argued that while the country’s top leader, Kim Jong-il, does control any institutional changes, there is also adaptation driven by needs.

“There has been some degree of autonomous institutional learning and adaptation; it is incremental in nature and caused by both positive and negative feedback from the environment regarding institutional performance in crisis situations,” he said.

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Posted in 1990s Famine, Arduous March, Avain Flu, Disease prevention, Epidemics, Foreign aid statistics, Health care, International Aid, International/Korean Red Cross, Korea Economic Institute, Statistics, UN, UN Food and Agriculture Organization, UN World Food Program, UNDP, UNICEF, UNWHO | Comments Closed

North Korean Citizens Are Differentiated into Six-Levels

September 21st, 2007

Daily NK
Lee Kwang Baek
9/21/2007

The expansion of Jangmadang’s private economy

Several years ago, I met a defector from North Korea and is currently residing in Japan. He frequently meets people coming and going from North Korea.

The change he relayed regarding North Korea was interesting and vivid. Although hundreds of people are not dying from starvation as in the past, transformation brought about by the expansion of the private economy, such as the Jangmadang (markets).

I asked him what the most significant change in North Korea was after the mass starvation of the mid-90s.

It was the reorganization of North Korean society’s class system. According to him, there are currently six levels of classes forming in North Korea.

First is the top privileged class based on Kim Jong Il. It is the class that feeds and lives on Kim Jong Il’s administrative funds, all kinds of support coming in from South Korea, and extractions from civilians.

The second is the power class engaging in the area of foreign currency earning activity. A portion of money gained from the foreign currency earning business is offered to the Kim Jong Il regime and the rest are accumulated as their own wealth.

The third is the “moneybag” class who has earned money from exchanges with the products from Jangmadang and China. They use “violence” and “money,” like the Russian mafia, to secure the commercial rights of each region via the Jangmadang.

The fourth is the class whose sustenance depends on provisions. It can be deduced that people in the middle-class take up approximately 20~30% of the civilian population.

The fifth is the common class who depend on Jangmadang and individual patches. Approximately 60% of the total population falls into this class. They live day to day on their labor power.

The lowest class is the elderly, the handicapped, Kotjebi (begging children), city migrants, and diseased patients.

The most outstanding class is the 5th class. They are a class who has started living independently without depending on the Kim Jong Il regime and counts as 60% of the population.

South Korean administration believes that there is a need to seek a North Korean policy while considering the size and characteristics of the lower class.

That is, direct support or loans to the North Korean government should be reduced and a direct commercial transaction with North Korean citizens should be increased. Gradually, Kim Jong Il regime’s political position should be weakened and the status of self-sufficient lower-class citizens have to be elevated. This can become an important foundation for North Korean society’s move towards a market economy.

The second eye-catching element is the most venerable people in the lower class. Approximately 10% of people who fall under this class are humanitarian aid recipients of our government and international society. The latter two have steadily continued their support to them.

Despite this, according to a recent North Korean source, a significant amount of people are suffering from malnutrition among those who have been admitted to hospitals, long term reeducation camps, and concentration camps for beggar children. Why are such events occurring?

The defector said that when the rice that the South Korean government sends arrives at the North Korean harbor, North Korean authorities or organizations immediately sell them for money.

Similar testimonies have come forth from North Korean civilians. Rice which is sold at the harbor can only be bought with foreign currency. People who can purchase rice by paying foreign currency are “moneybags” for a portion of bureaucrats who have accumulated wealth. Moneybags and corrupt officials hand over this rice to the Jangmadang and collect the enormous balance.

The humanitarian aid provided by the outside, before they are even relayed to the lowest class who should be receiving support, are flowing into the hands of moneybags and corrupt bureaucrats. If such defectors’ testimonies are true, the South Korean government’s humanitarian rice support has lost its original function.

The solution regarding this is two-fold. First is directly relaying medical products and rice to North Korea’s lowest class. Through civilian and organizational efforts, a humanitarian support team jointly based on South Korean civilians and government should be formed and they should initiate humanitarian aid activity by directly going into North Korea.

Further, a large-sized South Korean humanitarian support activity inspection team should observe the activities of the North Korean Red Cross and raise the transparency of distribution. If this is difficult, there is a need to simplify the window through the support of international society whose monitoring is much ahead of our government’s monitoring of formality.

The government should urgently restore the original capacity of humanitarian support in order to avoid falling into a policy of failure geared only towards a dictatorship regime.

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Posted in Black markets, Civil society, Dating/Courting, Economic reform, Foreign direct investment, International Aid, International trade, Price liberalization, Private property, Songbun | Comments Closed

Flood-stricken N. Korea likely to suffer from contagion of infectious diseases

September 21st, 2007

Yonhap
9/21/2007

North Korea is at serious risk from contagious diseases following damage from recent floods, an official from North Korea’s Red Cross told a newspaper in Japan on Friday.

In an interview with the Chosun Sinbo, a pro-North Korean newspaper in Japan, Kim Eun-chul, a vice secretary-general at the Red Cross Society of North Korea, said, “What we are most concerned with now is the spread of infectious diseases in the severely damaged areas.”

“The destruction of the water supply facilities could result in various diseases including skin diseases and diarrhea, as well as flue.”

Kim showed his anxiety, saying that the communist country would not be able to cope with the diseases when they broke out, as many of the North’s public health centers are also destroyed from floods.

“More than 560 hospitals were destroyed and 2,100 medical offices were damaged. The medical supplies were wet and useless. We can’t even read charts as they were soaked,” he said.

“New patients with diarrhea are reported one after another. We are now relying solely on the emergency medicines provided by the International Federation of the Red Cross and Red Crescent (IFRC).”

The IFRC shipped US$1,69 million worth of medical aid to North Korea earlier this month, which can be used for three months, according to Kim.

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Posted in Disease prevention, Foreign aid statistics, Health care, International Aid, International/Korean Red Cross | Comments Closed

What Are N. Koreans Up to?

September 21st, 2007

Korea Times
Marcus Noland, Stephan Haggard
9/21/2007

Last summer North Korea conducted provocative missile and nuclear tests. Yet only four months later, Pyongyang signed on to a roadmap that included a return of international inspectors, a full declaration of contested nuclear activities, closing down existing facilities and ultimately disabling them.

American negotiator Christopher Hill predicted this last step could take place as early as the end of the year.

What are the North Koreans up to?

The cynical, some would say realistic, view in the United States _ advanced by departed Bush administration hawks such as John Bolton _ is that Kim Jong-il is raising false hopes.

The appearance of cooperation has several tactical advantages. Sanctions and ongoing uncertainty have had substantial economic costs. The February agreement was preceded by secret meetings in Berlin to resolve the Banco Delta Asia issue.

In return, the North Koreans closed their nuclear facilities, but they have not firmly committed to the difficult aspects of the agreement _ providing a full accounting of their programs, disabling their programs, and giving up actual stores of fissile material and weapons.

Cooperation also drives wedges between the U.S., South Korea and China. If North Korea appears to be making concessions, it is easier for South Korea and China to continue diplomatic and financial support.

Next month, President Roh Moo-hyun will travel to Pyongyang for a summit with Kim Jong-il. Expect him to come bearing gifts to cement his legacy as a peacemaker.

Other politicians in the presidential race have also offered extraordinarily ambitious and generous programs of support for the North as well.

Recent studies we have done on North Korea’s changing external economic relations are consistent with some of this cynical picture, but also suggest a sliver of hope for more substantial change.

To understand why, requires a brief tour of the miserable history of North Korea over the last two decades. Following the collapse of the Soviet Union, the North Korean economy went into a steep decline ending in full-blown famine.

By our estimates, as many as one million people _ five percent of the entire population _ perished in the mid-1990s. Out of the human ashes of this tragedy, however, the North Korean economy began to undergo a profound transformation.

As households and work units scrambled for food, they engaged in barter, trade and new economic activities.

The desperation of the famine also saw an upturn in illicit activities, from missile sales to drugs and the counterfeiting of U.S. currency. But trade and investment also started to flow across the Chinese border.

Chinese companies, small-scale traders and North Korean firms pursued business opportunities, from large-scale mining operations to the import of South Korean videos.

The regime was always hesitant about the emergence of the market. In July 2002, the government initiated economic policy changes that decriminalized some private activities. But reforms have taken a zig-zag path, always subject to reversal.

Sanctions and closer scrutiny have limited the country’s arms sales and illicit activities.
With these sources of revenue increasingly foreclosed, North Korea has two alternatives _ open the economy and increase normal commercial activities or cooperate primarily to obtain aid. In terms of internal change, these two options may actually push North Korea in opposite directions.

Consider the aid tack. Given the regime’s concerns about internal stability, aid could provide a lifeline, allowing the regime to sustain a modicum of current consumption while forgoing deeper reforms. Under this option, North Korea trades away its nuclear program for assistance precisely to maintain the political and economic status quo.

Alternatively, North Korea could use the resolution of diplomatic tensions to deepen the economic reform process.

The military has been engaged in commercial activities and could potentially benefit from such a course. But real reform will reshuffle power and influence within North Korea in ways that are unpredictable and risky.

So what can we expect from Pyongyang? The nuclear program is the regime’s one major asset and we should not expect them to bargain it away easily.

Rather we should expect prolonged and difficult negotiations as they try to extract tribute for their “Dear Leader.”

In the end, we may eliminate North Korea’s capacity for making additional nuclear weapons, but this will not necessarily be accompanied by economic or political reforms.

An important lesson learned elsewhere in the developing world is that aid is not a substitute for reform.

Ambitious schemes for infrastructure and other investment in North Korea will only generate large economic pay-offs if they are accompanied by genuine opening and a more aggressive embrace of the market.

The key issue, therefore, is how tightly South Korea will link its offer of aid to progress in the resolution of the nuclear issue. Properly conditioned, South Korean aid could be a powerful carrot in the nuclear negotiations, whether it ultimately encourages internal reforms or not.

But if the South Korean offers at the summit are large, unconditional and open-ended, they could permit the regime in Pyongyang to stall the nuclear negotiations while actually discouraging deeper reform.

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Posted in 1990s Famine, Arduous March, Black markets, China, Economic reform, General markets (FMR: Farmers Market), International Aid, Mining/Minerals, Political economy, South Korea, USA | Comments Closed

Kim Jong-il Plays Democratic Politics

September 21st, 2007

Korea Times
David Kang
9/21/2007

There has been widespread speculation as to why, after repeated calls for a summit by South Korean President Roh Moo-hyun, Kim Jong-il decided to meet at this time.

Some have argued that Kim is only meeting because of improved U.S.-North Korean relations. Others feel that Kim hopes to gain further aid and trade from South Korea.

Although we do not know the exact reasons, one possibility is that Kim sees two major elections looming on the horizon: the South Korean and U.S. presidential elections.

A summit provides Kim the opportunity to influence these elections. Were Kim to wait until there were new presidents in both countries, his influence on the new presidents’ goals and strategies would be minimized.

As to South Korea, it is quite likely that Kim Jong-il hopes be an influence by presenting a moderate and reasonable image of himself.

Indeed, if Kim can speak the right rhetoric and portray himself as flexible, make a few token concessions to increased economic or social exchanges with South Korea, and repeats rhetoric about “uri minjok ggiri (we, Koreans, by ourselves),” there is a good chance that many South Koreans will feel reassured and sentiment favoring engagement may solidify.

This would be a good chance of binding the next South Korean administration into continuing its engagement with the North, regardless of who actually wins the presidency.

As for the United States, Kim has less ability to influence the election, simply because Americans pay far less attention to North Korea than they do to other foreign policy issues, such as the continuing troubles in the Middle East.

However, if Kim can present a moderate face, and also help forge a solid consensus in South Korea about the best way to solve the North Korean problem, Kim may be hoping to bind any new U.S. president to a path of reconciliation, as well.

Indeed, many observers think that Kim has already won, simply by agreeing to a summit meeting with Roh. Especially with Roh so clearly hoping to cement his place in history with this summit, they fear that there is little that Kim can do that would harm his image in South Korea.

However, if Kim hopes to be an influence on the presidential election in the south, this presents a genuine opportunity to further expose Kim to pressures and influences of the outside world, which is a move in the right direction.

For decades, the North Korean leadership had only concerned itself with internal regime politics, and even ignored the voices and needs of its own citizens.

If Kim realizes that his image among the South Korean public will have a direct effect on his own rule, this may affect his actions and policies.

In this way, Kim is taking more of a gamble by agreeing to a summit than is generally recognized.

If South Korean sentiment turns against Kim after the summit, this will restrict the new South Korean president’s foreign policy options, and it will also make it harder for Kim to delay, obstruct and avoid dealing with nuclear and other issues.

As such, Roh has more leverage than generally believed, if he is adroit in his negotiations.
If Roh goes into the summit determined to come away with some agreement with the North, he will have no bargaining power whatsoever, and Kim will win. But if Kim is seen by the South Koreans as the one obstructing progress, it will make North Korea’s situation more difficult in the future.

Thus, Roh absolutely must go into the summit prepared to return empty-handed. Only when Roh is prepared to walk away, will he have any leverage on Kim.

Roh must be willing to confront Kim on serious issues, such as the nuclear issue, and press Kim to make a public statement that he supports denuclearization. Ironically, Roh’s reputation may even improve if he can show that he met Kim with a flexible and reasonable set of issues and options.

Roh must also pay attention to not only the public opinion of South Koreans but also the U.S, and in particular the policymakers inside Washington.

Roh needs to realize that managing expectations and framing the summit in a positive way is critical for him to be seen in Washington as enhancing, and not obstructing, the nuclear negotiations.

There is little chance that Washington will allow Roh to set the agenda for denuclearization, as revealed in the embarrassing episode at the recent APEC meeting.

If Roh wanders too far from Washington’s stance, he will not have Washington comply, but rather he will merely be left alone.

Thus, it is critical that Roh and Cheong Wa Dae pay as much attention to how the summit is viewed in Washington as how it is viewed in South Korea.

I am in favor of this summit, only because it further exposes Kim to South Korean public sentiment, and increases the leverage the outside world has on this reclusive regime.

I hope that Roh does not squander his opportunity to further draw out the North Korean leadership and expose them to the outside world.

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Posted in Political economy, South Korea, USA | Comments Closed

Class Divergence on the Rise as Market Economics Spred in DPRK

September 21st, 2007

Institute for Far East Studies (IFES)
NK Brief No. 07-9-21-1
9/21/2007

The recent growth in the private-sector economy in DPRK markets and other areas of society has brought with it some significant social changes worth noting. According to most defectors from the North, following the massive famine suffered in the mid 1990s, the biggest change to emerge in the DPRK was the reshuffling of the social class structure. In North Korean society, there are reportedly five identifiable social classes.

The first of these classes is the ruling class, made up of those elite surrounding Kim Jong Il. This class survives off of Kim Jong Il’s government funds, aid sent from South Korea, and from exploitation of the general public.

The second class is made up of business traders with access to foreign capital. A portion of money earned through foreign currency exchange businesses is turned over to the Kim Jong Il regime, while the rest can amassed in order to lead a relatively comfortable life.

The third class is made up of organized thugs who make their money through public trading and markets. These people control regional markets and local trading by using money and violence to employ extortion tactics much like the Russian mafia

The fourth class scrapes by on government rations. This mercantile class comprises an estimated 20~30 percent of the North’s overall population.

The fifth distinct class in North Korea is made up of commoners who support their way of life through farming private plots and selling goods in markets. An overwhelming majority of the population falls into this class; more than 60 percent of the people in North Korea live hand-to-mouth each day on the fruits of their own labor.

The remainder of the population falls beneath even these classes, because they either lack labor skills or are feeble elderly, handicapped, hospitalized, homeless, or wandering from city to city.

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Posted in 1990s Famine, Arduous March, Black markets, Civil society, Economic reform, Foreign direct investment, Institute for Far Eastern Studies, Price liberalization, Private property | Comments Closed

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