Swiss banking association denies any dealings with Kim Jong-il

February 10th, 2007

Yonhap
2/10/2007

An official of Switzerland’s banking industry denied accusations that the country’s banks are involved in dealings with North Korea’s leader Kim Jong-il, saying such involvement would taint the industry’s image, a report said.

“There is no way a Swiss bank would be running a bank account for Kim Jong-il knowing that he is a dictator. The reputational risk is simply too high,” James Nason, a spokesman for the Swiss Bankers’ Association, told Washington-based Radio Free Asia (RFA) on Friday.

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Settling in

February 10th, 2007

Korea Herald
2/10/2007

What was once a trickle of defectors from North Korea has now become a steady stream, forcing the South Korean government to reexamine how it handles settlers from its communist neighbor.

Gone are the days when defectors were given a hero’s welcome, used as propaganda to demonstrate the failure of the totalitarian communist system, and given large sums of money as a reward. These days, news of individual defectors hardly receives any attention, and without much fanfare their numbers have been growing rapidly. The number of defectors who arrived in the South totaled 148 in 1999. Last year, more than 2,000 North Koreans settled in the South. By the end of this month, the total number of North Korean settlers here is expected to reach 10,000.

To deal with the prospect of a surge in the number North Korean defectors in the future, as food shortages and poverty continues to ravage that country, the South Korean government has revamped its settlement policy. By cutting its one-time settlement aid from 10 million won to 6 million won and increasing job subsidies to a total of 15 million won spread over a three-year period, the government is hoping to encourage the settlers to seek gainful employment rather than relying on government support.

For the new settlers, life in the capitalist South is harsh. Many of those who risked their lives to escape hunger and poverty, live in a state of poverty even in the South. Three months of training at a settlement center is insufficient to equip these people for our highly competitive capitalist society.

Some settlers are cheated out of their settlement awards and end up alcoholic and destitute. Most of the settlers are semi-skilled laborers, making it difficult for them to find permanent jobs. Difficulties in finding employment are exacerbated by prejudices harbored by South Koreans who perceive North Koreans as lazy and unmotivated.

According to a report by the Database Center for North Korean Human Rights which surveyed 1,336 settlers over the age of 13 who arrived between 1997 and 2004, more than 28 percent of the settlers are unemployed, significantly higher than the national average of 3.5 percent as of the end of last year. Of those who are employed, about 78 percent earn 1 million won or less a month.

To assist the North Korean settlers in seeking employment, the Unification Ministry and the Labor Ministry plans to jointly set up an individual job plan system. Employment subsidies, paid to businesses that hire North Koreans to cover 50 percent of their wage, will be extended to three years from the current two years.

However, government policies can only go so far in assisting North Korean settlers to make a life in the South. In a society that harbors regional prejudices even within its own borders, the discrimination suffered by North Koreans who speak with a different accent and who may still be regarded as an enemy must be enormous.

As much as the settlers need training to adjust to a new way of life here, South Koreans also need to receive sensitivity training on how to deal with the North Korean settlers. Understanding each other will go a long way toward helping the settlers become full, productive members of this society.

Government to raise subsidies for defectors here
Joong ang Daily
2/9/2007

South Korea will nearly double the amount of cash incentives that North Korean defectors receive after working here for one year, the Unification Ministry said yesterday.

Under the plan, the government will grant a total of 15 million won ($16,040) to defectors over a three-year period after they are registered on an employer’s payroll for one year. Previously, defectors received 9 million won over three years.

“The incentive is designed to increase support for North Korean defectors who are trying hard to adapt to South Korean society,” said Kim Joong-tae, chief of the social and cultural exchange bureau at the ministry.

Since 2005, Korea has reduced its cash payment to defectors to 10 million won from 28 million won per one-person household.

Under the new plan, which considers the rise in rental fees, the housing subsidy will be increased to 13 million won per one-person household from the current 10 million won, while the cash subsidy will be further cut to 6 million won, he said.

The total number of North Korean defectors to the South since the end of the 1950-53 Korean War will likely top the 10,000 mark sometime this year, according to government data.

When heavy floods hit North Korea in the mid-1990s, the annual number of North Korean defectors reached double digits. In 1999, the number swelled to a triple-digit level. In 2006, as many as 1,578 defectors arrived in the South, a rise from the previous record of 1,139 in 2002, according to the data.

About 9,700 North Koreans have been resettled in the South after finishing procedures and obtaining government identification, while some 300 are now receiving adaptive education at a state-run institute. More than 500 defectors are currently believed to be in the custody of South Korean embassies or consulates in Thailand, Mongolia and other countries.

In 2000, the leaders of the two Koreas held the first-ever summit since the end of the Korean War. The war ended in an armistice, not a peace treaty, meaning the two Koreas are still technically in a state of war.

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DPRK population: $23 million- economy: $20.8 billion

February 9th, 2007

Companies Must Grow in Size
Joong Ang Daily
Song Byung-nak
2/9/2007

Ethiopia has a population of 70 million and its economy is valued at $7.7 billion, while North Korea has a populace of 23 million and an economy worth $20.8 billion. Meanwhile, Samsung Electronics has 70,000 workers, and its sales amount to $72 billion, with value added assessed at $21.6 billion, according to a 2004 issue of Fortune magazine. Value added produced by Samsung Electronics is larger than that of North Korea’s economy and three times larger than that of Ethiopia.

Ethiopia used to be better off and assisted us during the Korean War. But now it has become the second-poorest nation in the world. Due to socialist policies that impede corporate activities, Ethiopia has no large companies with an international presence and few medium- or small-sized companies. Its per-capita income is only $110.

Let’s take a look at the United States, the world’s richest country. Bill Gates, the founder of Microsoft, has accumulated assets worth $50 billion. The assets of General Electric are larger than those of the 227 affiliates of Korea’s top 10 companies combined. The sales value of the world’s largest company, Exxon Mobile Corporation, is $380 billion and its net profit is $39 billion. Washington prioritizes the protection of national interests when devising its foreign policies. At the core are measures to protect and boost its companies.

Advanced countries have many companies that represent them. Among Fortune’s list of 500 global corporations, there are 170 U.S. companies and 70 Japanese. France and Britain combined have 38 companies on the list. Twelve Korean companies appear, the same number as Switzerland, even though the European country has only one- sixth of our population.

As there are many global companies in the United States, people can choose between many alternatives when they look for a job. As wages are good, Americans have stable finances. As there is a system to make money through stocks, people do not spend excessive energy and time on trying to find ways to make more money, the kind of thing that creates instability in Korea.

According to the World Bank’s annual World Development Report, Korea’s economy is the world’s ninth-largest among advanced countries, but it ranks 11th if China and India are included. The International Monetary Fund also included Korea in its list of the 28 most advanced countries.

However, Korea has too few large-scale companies to compete effectively on the global stage. In order to become a truly competitive country, Korea needs to develop and foster its companies.

There is another reason the country needs to develop big companies: a shortage of jobs. Every year, 630,000 people with degrees come on to the labor market. But the number of available jobs is only half of the number of job-seekers.

The government plans to create jobs to fill this gap, but it is not the right body to create jobs. The number of government civil servants is now 1 million.

Even if the number doubles, that cannot resolve the problem of long-term unemployment. As civil servants are paid with taxpayers’ money, to increase their numbers means an increase in taxes and bureaucracy. That is something that we should avoid.

We need to nurture companies to increase our penetration of global markets and we need to make partnership companies become listed enterprises in order to create more jobs. There are three things to do.

First, we need to grant prizes and honor to world-class companies and entrepreneurs, just as we grant medals and lifetime bonuses to athletes who become world champions.

These days, young people flock to become government officials, members of the judiciary or lawyers. Instead, we should encourage them to become world-class entrepreneurs if we want to win any battles in the economic war.

Second, most of Korea’s global companies have been founded and developed by conglomerates.

Peter Drucker advised that Korea should develop its current conglomerates into global ones, instead of dismantling them.

These days, there is no such thing as one correct way to run a company or an organization. We should help a company that is not part of a large conglomerate to become big enough to represent the country.

Third, in preparation for a free trade agreement with Washington, we should develop a more competitive corporate environment that is like the one in the United States. We must lift regulations on all forms of investment. The government, companies and the people should do their best to develop companies that can represent the country on the international stage.

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Foreign Rating Agency Executives Visit Kaesong

February 9th, 2007

Korea Times
Lee Jin-woo
2/9/2007
 
A group of 17 people including high-level executives from Moody’s Investors Service and Goldman Sachs made a half-day visit to the joint industrial complex in the North Korean border city of Kaesong on Friday, the Ministry of Unification said.

Three executives from each company were accompanied by officials from the Ministry of Finance and Economy as well as the Ministry of Unification.

The short trip was part of the foreign rating agencies’ annual meeting on South Korea’s sovereign rating.

During the visit, they received a briefing from officials of the Kaesong Industiral District Management Committee, which manages the site’s development process, and looked around the first completed district of the industrial complex.

The government has had to hold off its plan to sell the first batch of some 1 million pyong (3.3 million square meters) of land to South Korean companies that wished to move into the industrial complex.

The plan was initially scheduled in June last year, but was suspended indefinitely due to signs of a North Korean missile test. Pyongyang pushed ahead with its plan and test-fired seven ballistic missiles on July 5, which was then followed by its first-ever nuclear test on Oct. 9.

Moody’s upgraded South Korea’s rating to A3 in March 2002, its seventh-highest investment grade.

Officials, however, were cautious about the chances for a higher sovereign rating.

“It remains to be seen whether Moody’s will upgrade South Korea’s credit rating, but it’s true that they react quite sensitively to geopolitical issues related to North Korea,” said a ranking official of the finance ministry.

Another official expected a positive effect from the visit, saying “The outcome of the ongoing six-party talks in Beijing is most important without a doubt, but this trip will help officials of the foreign rating agencies have a better understanding of our efforts and faith in inter-Korean business projects.”

The number of North Koreans working for the 18 South Korean firms at the industrial complex surpassed 10,000 late last year.

By 2012, the complex is expected to house about 2,000 South Korean manufacturers employing about half a million North Koreans, according to the Ministry of Unification.

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Pyongyang Wants Diplomatic Ties With Washington

February 9th, 2007

Korea Times
Park Song-wu
2/9/2007

A draft accord, circulated by China after resuming the six-party talks on Thursday, reportedly contains the key phrase: North Korea will shut down its nuclear facilities in Yongbyon within 60 days in return for energy alternatives.

Declining to confirm the report, however, a senior South Korean official indicated on Friday that there might be another key subject the North wants to include in the draft.

“I think it is inappropriate to characterize the draft simply as a nuclear freeze with energy aid,” he said, referring to initial steps to implement a 2005 deal under which the North pledged to dismantle its nuclear programs in return for economic and diplomatic benefits.

As envoys were keeping quiet, the question of what else the North wants to put into the draft needs to be identified from what Kim Gye-gwan, Pyongyang’s top envoy to the denuclearization talks, told reporters upon arriving at Beijing on Thursday.

“We are ready to discuss the initial steps, but whether the United States will give up its hostile policy against us and come out for mutual, peaceful co-existence will be the basis for our judgment,” he said.

Even though it looks like just another cliche, what he apparently made clear was that Washington’s “carrots,” such as energy, food and the lifting of sanctions, could not satisfy Pyongyang.

Two U.S. scholars recently said in a co-authored article for the Nautilus Institute that Pyongyang’s fundamental goal is to improve its relations with Washington by using the six-party framework.

“Above all, it wants, and has pursued steadily since 1991, a long-term, strategic relationship with the United States,” said John Lewis, a professor emeritus at Stanford University, and Robert Carlin, a former U.S. State Department analyst who participated in most of the U.S.-North Korea negotiations between 1993 and 2000.

A pro-Pyongyang newspaper in Japan also said on Friday that North Korea wants the United States to make an “irreversible” decision to drop its hostile policy toward the Stalinist state.

“The North holds the position that it can take corresponding steps only after it confirms the United States takes the first irreversible steps toward dropping the hostile policy,” the Chosun Sinbo reported.

Technically, it is possible to dismantle the North’s reactors irreversibly.

But political decisions can always be reversed. That is why Pyongyang may want Washington to make a big political concession during the initial stage of denuclearization so that it can gain trust in the United States.

The concession could include replacing the 1953 armistice with a peace treaty, as U.S. President George W. Bush indicated during his summit with President Roh Moo-hyun in Vietnam late last year. Pyongyang may also want Washington to erase its name from the list of state sponsors of terrorism.

But a lingering question is whether the North will really decide to give up its nuclear programs that have served as a lifeline for the country.

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Korean-American Aid Group to Send More Medical Aid to North Korea

February 9th, 2007

Korea Times
2/9/2007

A Korean-American aid group based in the United States said Thursday it was sending its 17th shipment of medical relief goods worth $4.8 million to North Korea, according to the Yonhap News Agency.

The Institute for Strategy and Reconciliation (ISR), a think tank also active in international assistance, said the shipment this month will go to helping more than 20,000 North Korean children and the handicapped by providing antibiotics, wheelchairs and crutches.

Yonhap reported the aid will also include stethoscopes and various surgical and medical equipment.

“The latest assistance will leave from San Francisco and will reach North Korea’s Nampo Port by the end of March,” the group said in a press release.

The group will also provide individually tailored artificial limbs while the staff is in the North, the first American relief group to do so.

ISR began its North Korea program in 1998 with the approval of the U.S. Treasury. As of this month, the group has provided medical assistance valued at approximately $27.4 million.

The group is also recruiting volunteers through the end of this month to help post-surgery rehabilitation programs for children and the handicapped in North Korea.

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NK Imports 15,000 Tons of Rice From China in Late 2006

February 9th, 2007

Korea Times
2/9/2007

North Korea purchased about 15,000 metric tons of rice from China late last year, reflecting a severe food shortage in the communist state, according to South Korea’s state-run trade agency Friday.

The impoverished communist country imported 7,423 tons of rice in October, 3,910 tons in November and 3,928 tons in December, the Korea Trade Investment Promotion Agency (KOTRA) said.

The amount of rice imported over the three-month period is about 2.6 times more than that of the same period in 2005, and it accounted for almost half of its annual rice imports totaling 38,479 tons, KOTRA said.

“North Korea’s massive rice imports following the harvest season means that its food situation is so severe. Due to the imported rice, North Korea’s market rice prices are stable so far,’’ said Kwon Tae-jin, a senior researcher at the state-run Korea Rural Economic Institute.

Another North Korea expert said the communist country might have had to take such measures because of United Nations sanctions on the North following its nuclear weapon test in October as well as South Korea’s suspension of its food and fertilizer aid to North Korea since July.

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Efforts Redoubled to Build Economic Power

February 8th, 2007

KCNA
2/8/2007 

Redoubled efforts are being made to build a socialist economic power in the DPRK. The people are turning out in the grand march for perfecting the looks of a great, prosperous and powerful nation, full of confidence in sure victory and optimism.

The DPRK has consolidated the foundation for building an economic power over the last years.

The Workers’ Party of Korea has developed in depth President Kim Il Sung’s idea on economy as required by the developing revolution and thus provided unswerving guidelines for building an economic power.

While implementing the revolutionary economic policies of the WPK such as the line on economic construction in the Songun era with main emphasis on the development of the munitions industry and the policy of putting the national economy on a modern footing and IT, the Korean people have been firmly convinced that they will certainly build an economic power in this land when they work as indicated by the Party.

The army-people unity has developed as the oneness of army and people in terms of ideology and fighting spirit in the Songun era. It constitutes a powerful impetus to the construction of the economic power.

The Kanggye spirit, torchlight of Songgang and the Thaechon stamina have been created while the whole society following the revolutionary soldier spirit. The efforts have brought about a great change in the overall socialist construction.

Through the heroic endeavors, the people replete with faith in the future of prosperity have put industrial establishments, once stopped, on normalization of production and erected many monumental edifices including the Thaechon Youth Power Station No. 4.

An importance has been attached to science. A large army of intellectuals are paving the shortcut to the construction of an economic power with an extraordinary revolutionary enthusiasm.

A solid material and technical foundation for the construction of an economic power has been laid in the country.

All the sectors of the national economy have pushed ahead with the work of perfecting production structures, renovating technique and putting them on a modern footing, with the result that the number of such model factories in technical renovation and modernization as the Pyongyang 326 Electric Wire Factory is increasing as the days go by.

Production bases such as foodstuff factory, chicken farm, catfish farm, beer factory and cosmetic factory, which are directly contributing to the improvement of the people’s living standard, have mushroomed in different parts of the country.

The DPRK, with all the conditions for leaping higher and faster, will demonstrate the might of an economic power in the near future.

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Food aid key to N Korea talks

February 8th, 2007

BBC
2/7/2007

As six-party talks on North Korea’s nuclear programme resume in Beijing, the BBC’s Penny Spiller considers whether food shortages in the secretive communist state may have an impact on progress. 

Negotiators for the US, North Korea, China, Japan, South Korea and Russia are meeting in Beijing amid signs of a willingness to compromise.

While the last round of talks in December ended in deadlock, bilateral meetings since then have brought unusually positive responses from both North Korea and the US.

Such upbeat noises were unexpected, coming four months after North Korea shocked the world by testing a nuclear bomb.

The test brought international condemnation and UN sanctions, as well as a significant drop in crucial food aid.

South Korea suspended a shipment of 500,000 tonnes of food supplies, while China’s food exports last year were sharply down.

The World Food Programme has struggled to raise even 20% of the funds it requires to feed 1.9 million people it has identified as in immediate need of help.

Aid agencies warned at the time of a humanitarian disaster within months, as the North cannot produce enough food itself to supply its population. It also lost an estimated 100,000 tonnes-worth of crops because of floods in July.

‘Queues for rations’

Kathi Zellweger, of the Swiss Agency for Development and Cooperation in Pyongyang, said the present food situation in the country was unclear.

No figures are yet available for last year’s harvest, and it was difficult to assess what impact the lack of food aid was having on supplies, she said.

However, the UN’s Food and Agriculture Organisation estimated the country was short of one million tonnes of food – a fifth of the annual requirement to feed its 23 million people.

South Korea-based Father Jerry Hammond said there were signs of shortages – not only in food but also in fuel – when he visited the North with the Catholic charity Caritas in December.

He described seeing long queues for rations, and ordinary people selling goods in the street for money to buy the basics.

“You do expect to see more shortages during the winter time,” the US-born priest, who has visited North Korea dozens of times in the past decade, said.

“But I did see a noticeable difference this time.”

High malnutrition rates

Paul Risley, of the World Food Programme, said people in North Korea may still be cushioned by the November harvest and the pinch will be felt in the coming months.

“We have great concerns,” he said, pointing out that North Korea was now in its second year of food shortages.

He says “stabilising food security” in the country will be very relevant to the talks in Beijing.

“It is certainly the hope of all who are observing the situation in [North Korea] that imports of food can be resumed and returned to prior levels,” he said.

“Malnutrition rates are still the highest in Asia, and we certainly don’t want to see those rates rise any further.”

Father Hammond thinks Pyongyang may be persuaded to consider compromises in Beijing, but is unlikely to do so as a result of any pressure from the people of North Korea.

“People are very cut off from the outside world, and there is constant propaganda about national survival. Even if they go hungry, it will be considered patriotic,” he said.

There have been signs of possible compromise from both sides in the run up to the talks.

Washington has reportedly hinted at flexibility over its offer of aid and security guarantees, as well as showing a willingness to sit down and discuss North Korea’s demands to lift financial sanctions.

Meanwhile, North Korea reportedly recently told visiting US officials it would take the first steps to disband its nuclear programme in return for 500,000 tonnes of fuel oil and other benefits.

And South Korea is keen to resume its shipments of rice and fertiliser aid – if Pyongyang agrees to freeze its nuclear programme, the Choson Ilbo newspaper has reported.

As the nuclear talks resume, all sides will be looking to translate such pressures into progress.

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N. Korean Defectors to Get More Job Incentives

February 8th, 2007

Korea Times
Lee Jin-woo
2/8/2007
 
The government has decided to slash the amount of cash provided to North Korean defectors who come to South Korea and to focus more on helping them find jobs here, the Ministry of Unification said Thursday.

According to the plan, the subsidy provided in cash for the settlement of North Korean defectors will be cut from the current 10 million won ($9,500) to 6 million won. The amount is based on a one-person family and varies according to the number of people in the family.

Those who have come to Seoul since Jan. 1 this year will be subject to the new regulations, the ministry said.

The ministry, which deals with inter-Korean affairs, said it would almost double incentives to encourage North Korean defectors to find workplaces in the South.

Regardless of their annual income, a North Korean employee will get up to 15 million won for three years.

Some 4.5 million won would be provided after the first year of labor, which will increase by 500,000 won per year up to 5.5 million won for the third year.

Previously, the labor incentive was 9 million won over three years.

The new measure will be effective retroactively to defectors who have arrived from the beginning Jan. 1 of last year.

Despite the cut, the total amount of subsidies will be slightly lower than now, as the ministry decided to provide 13 million won, up from 10 million, for each one-man family to help find housing in the South, the ministry said.

Those who are handicapped or suffer from a serious disease will get up to 15.4 million won, it said.

“North Koreans should no longer sit idle in South Korean society,’’ Kim Joong-tae, acting chief of the ministry’s social and cultural exchange bureau, told reporters. “The incentive is aimed at increasing support for North Korean defectors who are trying to adapt to South Korean society.’’

Life is getting more challenging for North Koreans arriving in the South. As the number has surged, the government subsidy for each defector has plummeted.

Many North Korean defectors have complained that the government’s decision lacks an understanding of the harsh reality that they face in Korean society.

“Officials are ignoring the fact that the majority of North Korean defectors who come here after years of hardship in China and other Southeast Asian countries are not able to work normally for a certain period of time,’’ Lee Hae-young, an official of an association of North Korean defectors in Seoul, told The Korea Times.

Lee said it takes about five years for defectors adjust to a completely different market society.

“I think only about three out of 10 defectors who arrive in the South are healthy enough to work,’’ Lee said.

The total number of North Korean defectors to the South since the end of the 1950-53 Korean War is presumed to have surpassed 10,000 early this year, according to the ministry.

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