NK Economy Shrinks 1.1% in 2006

August 16th, 2007

Korea Times
Na Jeong-ju
8/16/2007

North Korea’s economy posted negative growth in 2006 for the first time in eight years on decreased production of agricultural and fisheries goods, the Bank of Korea (BOK) said Thursday.

In its estimate for the North’s economic growth, the central bank said the North’s real gross domestic product (GDP) shrank 1.1 percent in 2006 from a year ago, a turnaround from a 3.8 percent expansion in 2005. Until 2006, the North’s GDP had grown for seven years in a row since a 6.2 percent rise in 1999.

The GDP is the total output of goods and services produced within a country.

“Due to bad weather, North Korea’s agricultural, forestry and fisheries production fell with the construction industry remaining sluggish,” the BOK said. “North Korea seems to have suffered a blow as its international relations deteriorated due to its nuclear issues on top of a shortage of energy.”

The economic gap between the two Koreas grew larger last year.

North Korea’s nominal GDP increased 5.8 percent from a year ago to $25.6 billion last year, while South Korea’s GDP rose to $887.3 billion. South Korea’s GDP is 34.7 times larger than that of North Korea, widening from a 32.6-fold difference in 2005.

North Korea’s per-capita gross national income (GNI) came to $1,108 last year, up from $1,056 a year earlier, while South Korea’s per-capita GNI of $18,372 was 16.6 times bigger than that of the North, expanding from a 15.5 fold-difference. The North’s population reached 23.1 million, while the South’s was 48.3 million.

North Korea’s trade remained unchanged year-on-year at $3 billion last year, compared with South Korea’s $634.9 billion. The South’s trade was 212 times bigger than the North’s last year, rising from a 182-fold difference in 2005.

Pyongyang saw its exports dip 5.2 percent year-on-year to $950 million in 2006 as outbound shipments of animal products, non-metal goods and machinery decreased, while imports gained 2.3 percent to $2.1 billion.

Inter-Korean trade increased 27.8 percent from a year earlier to $1.4 billion. South Korea’s shipments to North Korea advanced 16 percent to $830.2 million, mainly on increased rice and fertilizer aid.

Inbound shipments from the North jumped 52.7 percent to $519.5 million on a hike in inter-Korean projects and mineral imports, the BOK said.

North Korea’s agricultural, forestry and fisheries industry declined 2.6 percent year-on-year last year, a turnaround from a 5 percent gain in 2005. The construction industry dipped 11.5 percent after gaining 6.1 percent the previous year.

The mining sector growth decelerated to 1.9 percent from 3.5 percent. Its manufacturing sector expansion slowed to 0.4 percent from 4.9 percent. The services industry grew 1.1 percent last year after increasing 1.3 percent in 2005, the central bank said.

North Korean economy posted 2006 downturn
Joong Ang Daily
Jung Ha-won
8/17/2007

North Korea’s economy shrank for the first time in eight years last year as agricultural production declined due to natural disasters and sluggish infrastructure development, according to estimates by South Korea’s central bank.

The Bank of Korea said yesterday that it believes North Korea’s 2006 gross domestic product declined 1.1 percent from a year earlier, the first downturn since 1999. The BOK, since 1991, has estimated the figures based on data from South Korean intelligence agencies and other research institutes. North Korea does not release economic data.

According to the estimate released yesterday, North Korea’s agriculture and marine industries last year declined 2.6 percent from 2005, when production rose by 5 percent.

“North Korea suffered from a serious flood last year, in stark contrast to 2005 when there was no major flood and farm production was good,” said a BOK official who refused to be named.

Growth in mining production, one of North Korea’s major industries, slowed to 1.9 percent from 3.5 percent in 2005. Manufacturing inched up 0.4 percent, down from 4.9 percent growth in 2005.

Construction sector production showed the biggest downturn at 11.5 percent from a year earlier, compared to 6.1 percent growth in 2005, as road and railway construction slowed, the central bank said.

Using satellite data, the bank estimated North Korea built just 49 kilometers (30.4 miles) of new roads last year, a sharp decline from 310 kilometers built in 2005.

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Flooding news

August 16th, 2007

Youtube video of the flooding 

KIS square.jpg

North Korea: Deadly Rains Ruin Big Part Of Farmland
Washington Post

Burt Herman
Associated Press
Thursday, August 16, 2007; A11

North Korea on Wednesday detailed the devastation caused by some of the country’s heaviest-ever rains, saying more than one-tenth of the impoverished country’s farmland had been wiped out during peak growing season.

The North Korean government reported that hundreds of people were killed or missing in this month’s floods, with as many as 300,000 left homeless.

Footage from Associated Press Television News showed citizens working to rebuild roads, clear debris and shore up sandbags along rivers in flood-affected areas outside Pyongyang, the capital. Video images also showed a farmhouse that appeared to have been swept down a hillside by the rain.

If the government’s numbers on agricultural damage are confirmed, the destruction would be about one-quarter of that suffered in massive flooding in 1995. That disaster, coupled with outdated farming methods and the loss of the country’s Soviet Union benefactor, sparked a famine that is estimated to have killed as many as 2 million people.

The vivid portrait of damage, in reports from the North’s state-run media, appeared to be a cry for help from a desperate government that maintains strict secrecy of its internal affairs. But the North has previously exaggerated the extent of disasters to obtain aid and to cover up ineptitude in providing for its people in a centrally controlled economy.

The official Korean Central News Agency reported Wednesday that downpours along areas of the Taedong River were the “largest ever in the history” of measurements taken by the country’s weather agency.

An average of 20.6 inches of rain fell across the country from Aug. 7 through last Saturday, 2.1 inches more than downpours in August 1967, KCNA said.

The recent rains have submerged, buried or washed away more than 11 percent of rice and corn fields in the country, KCNA reported, citing Agriculture Ministry official Ri Jae Hyon. “It is hard to expect a high grain output owing to the uninterrupted rainstorms at the most important time for the growth of crops,” KCNA said.

The U.N. World Food Program estimated that the amount of damage the North Koreans reported to their fields would result in losses of about 450,000 tons of crops — adding to the 1 million ton annual shortage that the country already faces.

The amount is less than the 2 million tons that the North said was lost in the 1995 floods at the start of the famine, said Paul Risley, a spokesman for the U.N. agency. “Nonetheless, this would be an extremely serious reduction in the amount of the harvest,” he said.

The North is especially vulnerable to the annual heavy summer rains that soak the Korean Peninsula because of a vicious cycle in which people strip hillsides of natural vegetation to create more arable land to grow food, increasing flood risks.

U.S. Assistant Secretary of State Christopher R. Hill said the U.S. government was considering how it could help the North Koreans.

The disaster reports precede a planned summit this month between leaders of the two Koreas. South Korea’s government has been criticized by opponents at home and abroad for having given unconditional aid to the North during an international standoff over the communist state’s nuclear weapons program.

Aid was already expected to be a key topic at the summit. Marcus Noland, senior fellow at the Washington-based Peterson Institute for International Economics, said the latest disaster gives Seoul justification to expand assistance to its neighbor.

North Korea’s flooded ‘rice bowl’
BBC

8/16/2007

The UN World Food programme’s acting country director, Michael Dunford, has just returned from a visit to one of North Korea’s flood-affected areas, in the south of the country.

He told the BBC news website what he saw and how the floods are affecting a country already dependent on food aid.

“We went to Sogon, driving for about two hours to get there, and we saw extensive examples of flooding as we went down, with widespread inundation of arable lands which, of course, creates concerns as regards the long-term food implications.

We have been told by the government that the Kangwon province is one of the areas that is worst affected. The impression we are getting is that there is severe damage throughout the southern half of the country, across to the east.

The southern part of the country is the main food-producing area. As you go further north it is more mountainous and hence their ability to produce is limited.

The area that has been inundated is part of the ‘rice bowl’, hence this creates additional concerns as to what impact that may have.

We estimate that annually there is a food deficit of about a million tons of cereals – that’s maize and rice. So, in the past, North Korea has relied on bilateral, from China and South Korea predominantly, and also and multilateral support through the World Food Programme.

Collapsed houses

Last year, the amount of food that entered the county did not meet the food gap and hence we were concerned about the implications that was going to have for food security in the country and potentially the impact that may have on the most vulnerable.

Certainly for them to have the floods this year is only going to exacerbate the already food insecure situation in the country.

People are managing as best they can. We understand from the government that those who have lost their homes are now residing in either their place of work or some form of community shelter – either a schools or nursery, we expect.

We were dealing with local officials. They tell us that the waters have inundated houses, houses have collapsed, factories have been completely inundated and roads and bridges have been washed away. Certainly the impression we are getting is that this is very severe flooding.

We saw bridges that were knocked down, we saw roads that had been washed away. The infrastructure is typically old and anything that damages it further is going to have implications.

Wiped out

The landscape in the southern area is a combination of flatlands with quite dramatic mountains, there are fields with hills and mountains shooting up.

There are small villages and co-operative farms. These are very rudimentary houses – typically handmade.

People may have a small plot in the front of the house in which they try to grow their own vegetables – potatoes, beans, carrots, tomatoes – they are then surrounded by more extensive farmlands which have been damaged by flooding.

In one area, we were looking at what we thought was a river running through a field of maize but it was in fact the offshoot of a flooded river. Crops have just been wiped out.

We also saw a lot of areas that were completely underwater, knowing that the rice would not be able to recover.

This is the period of pollination and, hence, because the rice is underwater during this period, it won’t germinate and hence won’t produce for the harvest due in September-October.

N Korea floods devastate farmland
BBC

8/15/2007

Severe flooding in North Korea has destroyed more than one-tenth of the country’s farmland, according to the state news agency KCNA.

“As of 14 August, more than 11% of rice and maize fields were submerged, buried or washed away,” Ri Jae-Hyon, director of the Ministry of Agriculture, said.

Government officials also told aid workers in the region that 300,000 people may have been left homeless.

Aid teams visiting the area warned of a need for emergency shelter and food.

“Going forward, the crop damage is of major concern,” Michael Dunford, of the UN World Food Programme, told the BBC.

He added that he had been to see some of the damaged areas, and described the situation as “pretty grim”.

Food aid

“Areas of the capital, Pyongyang, have been inundated,” he said, “but certainly as you move out into the countryside there is widespread damage, and it is going to have a negative impact on DPRK [North Korea] most certainly.”

North Korea already suffered from severe food shortages, even before the floods.

About two million people are thought to have died from famine in the mid-1990s in North Korea, and the country remains dependent on foreign food aid.

United Nations Secretary General Ban Ki-moon has ordered a full evaluation of the needs of North Koreans and has promised assistance to the communist nation.

“I assured him that the United Nations will be prepared to render whatever possible humanitarian assistance and help to the DPRK (North Korean) government and people overcoming this difficulty,” he said after a meeting with North Korea’s UN envoy Pak Gil-yon.

The US and South Korea have both said that they would consider sending aid.

‘Huge damage’

North Korea made the rare plea for help after it announced late on Monday that storms since 7 August had led to “huge human and material damage”.

State news agency KCNA said hundreds of people were dead or missing.

Many areas were affected but worst hit were the three provinces of Kangwon, North Hwanghae and South Hamgyong, it said.

Television pictures from the capital Pyongyang showed people wading along streets through thigh-deep water after rivers burst their banks.

These floods are thought to be worse than the ones that hit last year. Hundreds of people are thought to have died in August 2006, but exact figures are not known.

Heavy rainfalls render 17,000 North Koreans homeless
Yonhap
8/15/2007

Hundreds of people were killed or missing in North Korea in heavy downpours that battered the impoverished communist country last week, a North Korean official said in a report on Wednesday.

The downpours, which flooded even the center of its capital, Pyongyang, and wide sections of the country’s western region, also left about 17,000 people homeless, said the official from Pyeongan Province in a report carried by Pyongyang Radio. 

South to Help North Recover From Floods
Korea Times
Jung Sung-ki
8/14/2007

South Korea is considering sending relief supplies to help the North recover from severe flooding, the Ministry of Unification said Tuesday.

Hundreds of people are dead or missing in North Korea following week-long torrential rain that has destroyed thousands of houses, and damaged roads and railway tracks, the North’s state media reported.

“North Korea seems to be suffering a greater loss of lives and property than it did during July’s flooding last year,” Seo Sung-woo at the ministry’s intelligence analysis bureau told reporters.

“I don’t think the inter-Korean summit will be affected by the floods. However, if the rains continue, it is hard to predict,” said Seo.

In 2006, monsoons rains hit much of the impoverished state, killing hundreds of people.

Floods in July that year left over 500 people dead and nearly 300 people missing, according to the Chonson Sinbo, a Japan-based pro-North Korean newspaper.

In the following month, Seoul sent $82 million worth of aid to Pyongyang. The South provided the North with 100,000 tons of rice and cement, five tons of iron, construction equipment, 80,000 blankets and 10,000 emergency kits, according to the ministry.

The North’s official Korean Central News Agency said this year’s heavy rain destroyed at least 30,000 homes of 63,300 families, and more than 540 bridges and sections of railway.

The agency said heavy downpours had caused “huge human and material damage.” Many parts of the country received between 30 and 67 centimeters of rain from Aug. 7 to 12, it said.

Gangwon Province was hit the hardest, with more than 20,000 homes damaged or destroyed.

Pyongyang and neighboring provinces including South Hwanghae and South Pyeongan were also badly affected, according to the report.

Experts blamed decades of reckless deforestation for North Korea’s flood problems, saying the country has been stripped of tree cover that provides natural protection.

The International Federation of the Red Cross (IFRC) emergency operations staff is on a 24-hour alert to monitor flood damage in North Korea and has distributed aid kits to some 500 families, its Web site said.

“People have been evacuated and brought to safety,” it said, and county governments are “appealing to cooperative farms to donate emergency food for homeless people.”

International Red Cross goes on alert in North Korea on flood damage
Yonhap

8/13/2007

The International Federation of Red Cross (IFRC) emergency operations staff is on a 24-hour alert to monitor flood damages in North Korea and has distributed aid kits to some 500 families, its Web site said Monday.

A bulletin dated Sunday said the torrential rain that started Aug. 5 has caused serious flooding in many parts of North Korea.
“People have been evacuated and brought to safety,” the IFRC Web site said, and county governments are “appealing to cooperative farms to donate emergency food for homeless people.”

“Warnings of high tides have been issued on national television. Indeed, weather forecasts predict continued heavy rains until Aug. 17.”

The Red Cross emergency operations room is on a 24-hour alert, it said, with its staff in the field assessing damage.

In a rare admission of a crisis, North Korea’s state run news agency said Monday the downpour so far has left hundreds of people dead or missing and destroyed more than 30,000 homes for 63,300 families.

The Korean Central News Agency said hundreds of public buildings, bridges and railway sections also were destroyed.

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N. Korea to Connect to Rest of World via Web

August 16th, 2007

Korea Times
Cho Jin-seo
8/16/2007

Internet will be the first gateway to outside world for North Korea when the tension on the Korean peninsular eases after the South-North summit, an expert said Thursday.

It will be a natural choice for the self-enclosed nation to connect its network to the global Internet if it wants to be a member of global society, said Koh Yoo-hwan, professor of Dongguk University.

“Kim Jong-il has great interest in the information technology sector,” Koh said. “Pyeongyang has kept its network closed from the outside because it was concerned about the Web’s possible influence on its regime. But if it wants to come out to the international society, it is inevitable to utilize the Internet, first of all.”

North Korea is one of few nations in the world where the Internet is not open to the public. But Koh said that there already are broadband networks set up in North Korea. A computer technology center was also opened by the order of Kim, he said.

Like South Korean Web sites use “.kr” for their internet domain address and Chinese sites have “.cn,” the “.kp” domain was allocated to North Korea but the country never officially asked for the use of the dormant domain.

“.kp” stands for “Korea, Democratic People’s Republic.” “kr” is a short for “Korea, Republic of.”

“’.kp’ has been allocated as North Korea’s country-code domain. That said, at the present time there is no delegated operator of the `.kp’ domain,” said Jason Keenan, media adviser of the Internet Corporation for Assigned Names and Numbers (ICANN).

ICANN discussed about the delegation of the “.kp” code in its board meeting on August 14. The minutes are soon to be released.

“Using of the domain suffix indicates that North Korea is now ready to jump into the ocean of information and it wants to prepare for the change,” Koh, the professor, said.

“The opening can only be possible when the political climate gets warmer in the Korean peninsular. If the North Korea-U.S. relations improves, reforms and opening will follow.”

The North Korean government operates a handful of official and unofficial Web sites on computer servers based in other nations. Most of them are to promote the country to foreigners. But the access to the sites from South Korea is blocked by the South’s authorities due to its decades-old laws on national security.

The closest relationship between South and North Koreans on the Web was probably formed between 2003 and 2004, when a North Korean cyber casino started distributing a computer program to its South Korean users, a step aimed at nullifying the access ban imposed by South Korea. The site was closed afterward.

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IT business delegation to visit DPRK

August 16th, 2007

October 20-27, 2007 (Beijing/Pyongyang)
GPI Consulting

GPI Consulting (Netherlands) is one of the few western companies that has done an audit of the DPRK’s IT capabilitites and has published about them.

They are organizing an IT delegation to visit the DPRK this October.  Here is their marketing flyer and itinerary: NK-IT-tour.pdf

From the Marketing Flyer:

North Korea offers interesting business opportunities in several fields, such as software development, production of computer games, animation and cartoons, data entry en digitization. In order to provide detailed information about the IT opportunities in North Korea, a unique IT Study Tour will take place from 20 – 27 October 2007.

The trip to North Korea will focus on offshoring in the field of IT and BPO (Business Process Out-sourcing). We expect participants from IT- and software organizations that are investigating offshoring, or from consultants researching new offshore locations. Companies interested in exploring a new potential export market are also welcome to join the tour.

Europe still lacks sufficient knowledge about the promising North Korean IT sector. The goal of the business mission is to give the participants detailed information about offshoring, and especially about the opportunities in North Korea. We will strive to have participants from large, small and medium sized companies taking part in the IT study tour.

In order to make a business trip of 7 days attractive, the delegation will visit various companies in Pyongyang in the field of IT, animation, cartoons, computer games and BPO. The business mission will have an informal character with a visit to a university and also with attention to cultural and tourist elements. The participants of the tour will meet in China (Beijing); after returning from North Korea, an extension of the stay in China is possible.

The organizer of this mission is KCC (Korea Computer Center), a major IT services provider in North Korea with offices in several cities, including Pyongyang and Beijing. The European contact for this business mission will be Mr. Paul Tjia, founder and director of GPI Consultancy, Rotterdam, The Netherlands.  Established in 1995, GPI Consultancy is a specialized Dutch consultancy firm in the field of offshore sourcing. It is regularly involved in IT study tours to various offshore countries in Asia.

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3rd Pyongyang Autumn International Trade Fair

August 16th, 2007

European Business Association
September 24-27, 2007

The European Business Association (EBA) in Pyongyang and DPRK Chamber of Commerce are orgaizing a booth for European business at the upcoming international trade fair in Pyongyang.  European companies are invited to make use of this opportunity to introduce their business to the North Korean market.

European companies interested in taking advantage of this opportunity are invited to visit the EBA website www.eba-pyongyang.org – please click through to membership for the statutes. The membership fee of 500 Euro will include the following services for companies who would not send their own representative to the trade fair:

  • Poster display (maximum size DIN A2)
  • Distribution of flyers (maximum size DIN A4)
    Feedback for Korean inquiries by e-mail: any contact request and any inquiry by a Korean company will be registered in a special format and will be supplied asap by   e-mail to your company.
  • Photos documenting the participation of your company in the fair.

If a representative will take part, the joint European booth is of course open for him/her to be used during the fair and EBA will support and assist you actively in making contacts and business meetings with potential Korean partners. According to a special arrangement between the EBA Pyongyang and the DPRK Chamber of Commerce, the deadline for visa application has been extended for European businesses to August 20, 2007.

Learn more here

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The gentle decline of the ‘Third Korea’

August 16th, 2007

Asia Times
Andrei Lankov
8/16/2006

By Chinese standards, the city of Yanji is rather small, with a population of nearly 400,000. About a third of them are ethnic Koreans: Yanji is the capital of Yanbian autonomous prefecture in the northeastern province of Jilin.

From the first few minutes in Yanji it does not feel completely like China. The streets and shops have signs both in Korean and Chinese, the people (well, many of them) speak Korean among themselves, and restaurants advertise dog meat, a traditional Korean delicacy. But it also feels different from South and North Korea. Yanji is much too poor if compared with the South and much too rich if measured against meager North Korean standards.

The Korean migration began as a trickle in the 1880s, and by the early 1920s it had developed into a large flow. Some of those settlers fled the persecution of the Japanese colonial occupiers at home, but many more were attracted by lands easily available to migrant farmers in what then was known as Manchuria.

An overwhelming majority, some 80%, came from the areas that after 1945 became parts of North Korea. During the Chinese Civil War, most local Koreans sided with the communists, and this helped boost their standing after 1949. The local Koreans were officially recognized as a “minority group”, and in 1952 the entire area was made into an autonomous prefecture, with the Korean language co-official with Mandarin.

Yanbian is a large area, roughly half the size of South Korea, but its current population is merely 2.2 million. South Korea has 48 million people, so the density of population in Yanbian is remarkably low. Indeed, while traveling through the area one can drive for few kilometers without encountering any signs of human settlement – a picture that is unthinkable in most of South Korea or coastal China.

In 1945 about 1.7 million Koreans lived in China, overwhelmingly in its northeastern area. About 500,000 of those chose to move back to Korea in the late 1940s, but a million or so decided to stay. Nowadays, the Korean population has reached 2 million, of whom some 800,000 reside in Yanbian.

Economically, the area has not been very successful – perhaps because it is landlocked, so the import-oriented development strategy does not really work there. The breathtaking economic growth of the past two decades in the country as a whole has changed the looks of the local cities and towns, but Yanbian is still poor by contemporary Chinese standards. Sometimes in the villages around the city one can even see a derelict hut with a thatched roof – a sight that is almost impossible to see more prosperous areas of China. Still, changes are everywhere: the old gray buildings of the Mao Zedong era are being demolished and giving way to new, posh apartment complexes. Construction is everywhere, the number of hotels is astonishing, and good roads criss-cross the area, though motor traffic is still very thin.

Beijing’s policy toward ethnic Koreans has always been somewhat contradictory. On one hand, the Chinese central government follows the Leninist principles it learned from the Soviet Union. According to these principles, the ethnic minorities should be given manifold privileges, often at the expense of the majority group.

Indeed, this is frequently the case with the ethnic Koreans. But there were periods of unease and even open persecution, especially in the crazy decade of Mao’s Cultural Revolution beginning in 1966. A middle-aged ethnic-Korean businessman told me, “Back in the late 1960s, I seldom saw my parents. Because they were members of an ethnic minority, they had to go to ideological-struggle sessions every day and had to stay until very late.”

However, that period was an exception. The same person, who said he is not a fan of the current Chinese system, still admitted when asked about discrimination: “Discrimination? Well, almost none, to be frank. They appoint some Han Chinese officials to supervise the administration, but basically I don’t think Korean people here have problems with promotions or business because of their ethnicity. Sometimes being a minority even helps a bit – it’s easier to get to a university if you come from a minority group.”

It is clear that many Korean community cultural institutions rely on generous subsidies from the central government. The Chinese state sponsors a large network of the Korean-language schools, so until recently nearly all Korean children received secondary education in their ancestors’ tongue. If they wish, they can attend Yanbian University, where ethnic Koreans are given preferential treatment for the entrance exams.

The local television network broadcasts in Korean and the newsstands in the area sell a number of Korean-language periodicals. Some of these publications hardly need sponsorship, since they deal with the ever popular topics of sex, crime and violence, but many others, such as high-brow literary magazines or rather boring local dailies, would go out of business without their state subsidies.

A local law requires every street sign in the prefecture to be written in both Korean and Chinese, and it explicitly stipulates that Korean letters should not be smaller or placed below the Chinese characters. This even applies to advertisements.

The Korean heritage (or rather those parts of the heritage that are deemed politically safe) is much flaunted in the area because it is one of factors that make Yanji attractive to potential tourists. So Korean restaurants are everywhere and local advertisements frequently use images of beautiful girls clad in the Korean national dress or hanbok.

However, it would be a mistake to depict the Chinese policy in the area as an ideal to be emulated. The potential threat of irredentism has never been completely forgotten, and it is an open secret that radical Korean nationalists have dreamed about annexing this area since at least the early 1900s. They often say Yanbian is actually a “third Korea” (the other two being North and South), so it should be included into a Greater Korea that they believe will emerge one day.

Until recently such threats were not much pronounced, since the impoverished and grotesquely dictatorial North Korean regime could not inspire much longing for the lost homeland among the Chinese Koreans. Perhaps most local Koreans share the feelings of a middle-aged Korean with whom I had a long talk in the town of Tumen on the North Korean border. While pointing to the barren hills of North Korea, easily seen from a restaurant window, he said, “I am so lucky that my grandparents chose to get out of that place. I think we all would be dead had our grandfather stayed there. It is such an awful place. I do not understand how they manage to survive in North Korea.”

This seems to be the common feeling toward North Korea. There might be a lot of genuine sympathy, as demonstrated in the late 1990s at the height of North Korea’s great famine, when there was widespread grassroots support for the illegal migrants from that country. However, in most cases the North Korean regime is seen by local Koreans as an object of contempt and ridicule, and its unwillingness to emulate the Chinese example is often mentioned as the major reason for the disastrous situation of the country.

However, in 1992 China established formal diplomatic relations with prosperous South Korea, and soon the Yanbian area was flooded with South Korean business people, missionaries, students and tourists. These people were usually attracted by the opportunities to do business without dealing with a language barrier, but some of them began to preach the nationalist gospel as well. Their work was made much easier by the fact that South Korea came to be seen not as a land of destitution but one of prosperity and opportunity. South Korean nationalists love to stress that the lands of Yanbian once were part of the ancient Korean kingdom of Koguryo that lasted 700 years, from 57 BC to AD 668. Koguryo is presented by them – as well as many other Koreans outside of the area – as the most successful of the three ancient Korean kingdoms.
 
Therefore, Chinese authorities are on guard against this nationalist fervor and ensure that a Korean-language education does not mean an education in the spirit of Korean nationalism. At the Korean schools, children study exactly the same curriculum as their peers in the Chinese-language schools. Their textbooks are exact translations of the Chinese textbooks used at the same levels.

“We are a minority group of China, China is our country, so there is no need to study Korean history or literature,” one ethnic Korean told me. “When they teach national history at our schools, it means the history of China, and China only.”

As a result of this policy, the younger generations of Koreans are increasingly out of touch with their Korean heritage. Ko Kyong-su, a professor at Yanbian university, himself an ethnic Korean, remarked: “Nowadays, the Korean youngsters here do not learn about Ch’unhyang and Hong Kil-dong [characters from Korean classical novels] until they enter college, and only then if they chose to specialize in Korean studies.”

To what extent does this dualistic policy of support and restrictions work? This is a somewhat difficult question, but it seems that the overwhelming majority of the local Koreans indeed see themselves as “hyphenated Chinese”, not as proud overseas citizens of either Korean state. Their loyalties are, in most cases, firmly with Beijing.

Still, it is clear that the ongoing nationalist propaganda produces some response. A number of times my Korean conversation partners inquired whether I had seen the Koguryo remains, and once a woman in her early 30s, a fellow traveler on a train from Yanji to Shenyang, said nostalgically, “Two thousand years ago this used to be Korean land. We were so big then!”

This is not exactly a feeling that Chinese authorities would like to nurture, so it comes as no surprise that in official publications, Koguryo is mentioned as a “minority regime” that once existed as a part of multi-ethnic but unified Chinese nation. This nation, according to Beijing propagandists and court historians, existed since time immemorial.

In spite of all those problems and potential challenges, until recently Yanbian prefecture could be seen as a poster case for China’s “nationality politics”. Indeed, unlike the situation in Russia, Japan or the United States – three other major countries with sizable ethnic-Korean communities – the Korean-Chinese have remained fluent in their ancestors’ language, though they overwhelmingly belong to the third or even fourth generation of immigrants. They are also quite socially successful. If measured by such indicators as life-expectancy and infant-mortality rates, Koreans are the second-most-prosperous ethnic group in China. Their educational achievements are also well above average.

However, nowadays things are not that rosy – at least if judged from Korean nationalist perspectives. Beginning in the mid-1990s, the ethnic Korean population of Yanbian began to shrink, with its share dropping to 36.3% in 2000 (from 60.2% in 1953), and is still falling.

Local Korean schools are being closed for the lack of students, and Korean parents are increasingly unwilling to send their children to the ethnic schools. Until a decade ago, more or less every Korean family chose to educate their children at a Korean school, but this is not the case anymore. The number of children enrolled in Korean schools in 2000 was merely 45.2% of the 1996 level. In the 1990-2000 period, 4,200 Korean teachers, or some 53% of the total, left their jobs because of school closures. This does not mean Koreans are more poorly educated – on the contrary, the past two decades have witnessed a great education boom. But their education is increasingly conducted in Mandarin, not Korean.

Contrary to what many China-bashers want to believe, this process is not a result of some deliberate discrimination or the cunning policies of Beijing. No doubt some Chinese policy planners might feel a bit of relief when they see how a potentially “separatist” area is losing its explosive potential, but it seems they have done nothing to speed up such development. Rather, Koreans are becoming the victims of their own social success.

In the past, the aspirations of the average ethnic Korean was to graduate from a high school, settle down in his or her local village, and become a good farmer who could afford to have rice on the table for every meal. Now, success is increasingly associated with a university degree. However, the university education is in Mandarin, as are the entrance exams. Korean parents know that Chinese-language schooling gives their children better educational advantages.

This process is easy to see even without statistics. It is clear that a large proportion of younger people speak Korean, but it is also clear that many youngsters do not feel too comfortable when communicating in their parents’ tongue, and are happy to switch back to Mandarin at the first opportunity. It was instructive to see two Korean families who sat next to me on a train: the youngsters, in their 20s, spoke Korean to the parents but preferred Mandarin among themselves.

Another part of the crisis is the low fertility rate of the ethnic Koreans. The Koreans’ birth rate has always been lower than that of the Han Chinese, even though, as an ethnic minority, they are exempt from the “one-child policy”. In 2000, the average Korean woman in Yanbian had 1.01 births in her lifetime. This again reflects the higher education levels of the ethnic Koreans: better-educated groups tend to have less children.

Migration is also taking its toll. A large number of ethnic Koreans have moved away from their village communities. Some of them even went to South Korea – either for good, or just to make some money doing unskilled jobs. But for most of them the destinations of choice are the large Chinese cities, such as Shenyang or Beijing. While in the city, Korean settlers tend to maintain close relations with other Koreans, but they still live in a Chinese-language environment, and speak little Korean. The chances of marriage with a Han Chinese are high, and children from such marriages are usually monolingual – Mandarin.

So it seems that the days of the “Third Korea” are numbered. Even the infusion of South Korean money is not enough to reverse the unavoidable process of assimilation. Koreans are not subjected to forced Sinification; they are making a rational choice, even if it is one that Korean nationalists do not approve of. If things continue as such, in a few decades only hanbok-clad girls and the obligatory signs in Korean shops and restaurants will remind one of the Korean community that once thrived in Yanbian. But I hope it will always be a good place to feast on dog meat.

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Kim Jong Il, “Eat Fruits by Planting Fruit Trees in Every Home.”

August 15th, 2007

Daily NK
Han Young Jin
8/15/2007

The Kim Il Sung Socialist Youth League magazine, “Youth Vanguard” maintained, “Every household should plant at least five stumps of fruit trees, according to Kim Jong Il’s command. A beautiful landscape made up of persimmon, apple, and pear orchards and houses peace is unfolding in the fatherland.”

Youth Vanguard said on the 5th,”Every home should plant fruit trees. The great General has ordered that each farm plant over five stumps of fruit trees and he has now ordered that agricultural households start a fruit tree planting movement.”

Further, it stressed, “It is the esteemed General’s heart’s desire and the Father’s, who has sacrificed his entire life to provide a life for us citizens, noble will to help expand persimmon or pear houses in every village.”

Also, it said, “The esteemed General has offered his whole heart and energy to nourish this lofty goal into a reality,” and introduced the following anecdote.

It was a day in Juche 87 (1998), January.

The esteemed General, who has provided high-powered leadership in several areas of business through strenuous efforts while fighting the strong snowstorm in the northern region, told a person in charge of a district that he did well in ceaselessly managing the area, but a fruit-tree planting movement should take place in every household.

After saying so, he ordered the construction of 55 homes and to plant fruit trees in every home. At that moment, the worker could not stop his passions from flowing.

The 55 homes were cozy homes, which supported the teaching of the esteemed General, and were built next to a mid-size powerplant.

The homes were newly built and since this is the coldest season of winter, the home owners had not yet thought about how to decorate the surroundings.

The worker in charge had felt touched by the warm grace of the esteemed General who let us civilians to live in such nice houses and even taught us about planting fruit trees, so that we could enjoy delicious fruit and perspire under scenic fruit trees.
The esteemed General, while looking at the workers, re-emphasized that every home should plant fruit trees this spring.

The Youth Vanguard relayed, “The children who are starting new lives in order to observe the will of the Party have started a new custom of sending and receiving young fruit tree plants whenever given the chance.”

Regarding this, North Korean defector Lee Min Bok, whose background is the Academy of Science for Agriculture, said, “In 1978, an order also came down to plant five stumps of fruit trees in domestic homes.”

Lee said, “The party said to plant five stumps of fruit trees, so I planted them diligently, but after a little while, my mother had chopped down all of the trees. When the trees bear fruit, it is easy to be stolen, so my mother exhibited wisdom.” Other houses also cut them away before the trees started bearing fruit.

He reminisced, “We could not even eat corn and life was so hard, so how people could plant trees and eat fruit from them? They even told us not to plant corn, but I planted them anyway in secrecy.”

One defector said, “The North Korean authorities, under the pretext of dissolving the food shortage, created plots of grass all over the country and made us breed goats and rabbits. They also made us pursue a fish-farming business.”

He pointed out, “Who would create a pasture for raising goats in a matter of few years while he or she is in the midst of starvation? Would goats provide several days worth of food? If there is available land, our situation dictates that we plant an additional row of corn.”

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N. Korea urges concerted efforts for economic reconstruction

August 15th, 2007

Yonhap
8/15/2007

North Korea, celebrating the 62nd anniversary of Korea’s liberation from Japan’s 1910-45 colonial rule on Wednesday, called on its people to make concerted efforts to build a strong socialist economy.

The Rodong Sinmun, the official newspaper of the North’s Workers’ Party, said in an editorial that there is no more urgent task than reconstructing the national economy and improving the people’s livelihood.

“On the economic front, the principles of socialism and utilitarianism should be thoroughly observed … All potentials and resources should be fully mobilized to boost production and construction,” said the paper.

“Food problem has to be addressed, while the light industry sector has to be revolutionized in order to mass-produce high-quality consumer products. Economic reconstruction and improvement of public livelihood are the most urgent tasks facing the nation.”

But the editorial still allotted much of its space to eulogizing the accomplishments of the North’s late founding leader Kim Il-sung and his Songun (military first) policy.

“The president’s plan for building a rich and powerful country is being carried out in all fields thanks to the Songun leadership of Kim Jong-il. The country in which the great Songun politics is being successfully applied will make ceaseless creations and leaping progresses and the president’s behest will come true in the socialist country,” said the paper, referring to the elder Kim as the president.

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Lifting US Sanctions Key to NK’s Economic Revival

August 15th, 2007

Korea Times
8/15/2007

To understand what is at stake, we need to look back at key events in the past that led to North Korea’s isolation in the global economy.

U.S. economic sanctions against North Korea began on June 28, 1950, only three days after North Korea invaded South Korea, when the United States invoked a total embargo on exports to North Korea. Over the years, many more U.S. sanctions have been imposed against North Korea, and North Korean companies. Three of these sanctions have had a significant impact.

The first was the suspension of the Most Favored Nation (MFN) trade status, imposed on September 1, 1951. This sanction, which is still in effect, made it impossible for North Korea to even consider exporting its products to the United States.

The second is the placement of North Korea on the list of countries that support international terrorism. This sanction, imposed on January 20, 1988, followed North Korea’s blowing up of Korea Air Lines 858 on November 29, 1987, off the waters of Thailand.

This sanction has entailed many restrictions, including denial of North Korea’s ability to borrow money from international financial institutions.

The third measure is not a single action, but has taken the form of a tightening grip around the financial network used to fund North Korea’s illicit financial activities.

Although the ultimate target is North Korea, the threat of actual sanctions has been targeted against banks, including Banco Delta Asia, which deal with North Korea’s accounts. These financial sanctions involving Banco Delta Asia have been the focus of recent overt and covert negotiations between North Korea and the United States.

On September 17, 1999, President Clinton agreed to the first significant easing of economic sanctions against North Korea since the Korean War ended in 1953.

The U.S. easing of sanctions against North Korea, announced on June 19, 2000, may have been too little to persuade the leaders of North Korea to give up their prized long-range missile technology. North Korea carried out a nuclear test on October 9, 2006, and the United Nations passed Resolution 1718, further tightening North Korean economy.

There is no doubt that all these sanctions are having an impact on the North Korean economy. For instance, the North Korea’s annual trade deficit has averaged between $800 million and $1 billion in recent years, depending on whether deficits against South Korea are included.

The huge trade deficit is not sustainable, and it will eventually lead to a decrease in North Korea’s trade and gross domestic product. Studies indicate that the entire trade deficit appears to have been financed by weapons sales, illicit activities, and funds flowing from South Korea through joint projects. With the two UN resolutions adopted during 2006 and the tightening of North Korea’s financial transactions that began in 2005, North Korea should find it increasingly more difficult to pay for its trade deficit.

The key issue is not whether North Korea deserves the lifting of all the sanctions imposed against the country on the basis of its behavior since 1950, but how to bring about a peaceful resolution of pending security and humanitarian issues without military confrontation. This brings us to the importance of the upcoming summit between President Roh and North Korean leader Kim.

My assessment is that the collapse of the Soviet Union in 1989 led to an important change in the approach of North Korean leaders toward a better calculation of costs and benefits.

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2nd Inter-Korean Summit and Prospects for Discussion of Economic Cooperation

August 14th, 2007

Institute for Far Easter Studies
NK Brief No. 07-8-14-1

The second inter-Korean summit meeting is coming up soon, scheduled to open on August 28 in Pyongyang, and interest is building regarding discussion on economic cooperation. It is true that the North is prioritizing political and military issues in order to shore up its government by normalizing relations with the United States. However, considering its serious economic woes, the ability of South Korea to offer a ‘gift package’ can significantly influence the success or failure of this summit.

It is not yet clear how economic cooperation will fit into the agenda, but Seoul and Pyongyang have been constantly discussing this issue, so some insight has been given. In particular, the ‘consumer’ North has been referring to domestic and international cooperation, and through Pyongyang’s requests, some clarity has been added to what goals could unfold during the upcoming meeting.

Energy Sector

The North Korean economy is saddled with severe shortages of electricity and fuel oil, causing production to slow and therefore stagnating consumption, putting the country into an ongoing vicious circle of economic depression. North Korea possesses facilities to produce 7.7 million kW of steam- and hydro-electric power, but in reality is incapable of operating these facilities at more than 30%.

The opinion that expansion of North Korea’s electrical infrastructure is necessary, not only for the North, but also for South Korea, is gaining strength. South Korean projects to develop North Korean mines and import its coal have been delayed due to a lack of electrical power. In the future, enterprises looking to set up in North Korea will also require a steady supply of electricity.

In what way the two Koreas will cooperate on energy is not yet known, but North Korea is sticking to its demand for light-water nuclear reactors. If construction were restarted on the reactors begun by the now-defunct Korean Peninsula Energy Development Organization (KEDO), North Korea could quickly have not only the energy production amount currently available, but an additional 2 million kW, as well.

North Korea’s power facilities are in a state of deterioration, but the number of facilities in the North are adequate for the current state of the economy, so a plan for the restoration of generation and transmission facilities, or the 2 million kW of electrical power offered by the South Korean government two years ago could be considered sufficient.

Natural Resource and Infrastructure Development

One other highly probable agenda item on inter-Korean economic cooperation will be development of natural resources. This is because a model in which North Korea’s relatively abundant underground natural resources are developed, and in which these resources being used by South Korean businesses, would create a ‘win-win’ result for both Seoul and Pyongyang.

According to a report given by the Korea Resources Corporation at a conference last year, North Korea possesses upward of forty different valuable minerals, including iron-ore. Analysis of these North Korean resources shows that a considerable amount of South Korea’s 40 trillion won (430 billion USD) worth of mineral imports per year could be brought in from North Korea instead.

As development projects in North Korea’s graphite mines are already underway, and the import of North Korean anthracite is being considered in order to meet quickly growing demand for charcoal in the South, cooperation in the natural resource sector appears to be one of the core points to inter-Korean economic cooperation.

As for North Korea’s railways, the heart of the country’s distribution infrastructure, completion of the section of track on the Kyungui Line between Kaesong Station and Moonsan Station, as well as the section of the East Sea Line between Mt. Kumgang Station and Jejin Station, means that the infrastructure for regular service between the two countries is now in place, although talks regarding the details of such regular service are not being held.

If regular service on these two lines between North and South Korea can be achieved, expensive transportation costs can be reduced, and of course, in the future, connection of the railway with continental rail networks such as the Trans-Siberian Rail and the Trans-China Rail would help to enable the Korean Peninsula to emerge as the hub of North East Asian distribution.

Furthermore, considering the fact that North Korea’s mining facilities and technology, as well as its ports, loading facilities, and other transportation infrastructure, are severely lacking, a plan linking development of natural resources to projects developing infrastructure also appears viable. It is also already known, to some extent, the nature of North Korean needs in its infrastructure sector, and if this upcoming summit closes successfully, it is expected that an inventory of these needs will become more concrete.

Vitalizing Kaesong Industrial Complex

The Kaesong Industrial Complex (KIC) is also an important undertaking. At the moment, a problem has arisen concerning the construction of a second KIC, but even if only the originally planned 26.4 million square-meter complex is built, the fact is that currently the first 3.3 million square-meter stage is complete, and considering that it employs North Korean labor, this is no easy feat. Companies moving into the KIC are asking that easy communication with South Korea and simplified import procedures be prioritized.

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