How to run a “private” bus company in the DPRK

April 1st, 2015

According to the Daily NK:

More independent transportation companies, run by the donju, or new affluent middle-class, are springing up in North Korea’s main transit hubs and driving up fares.

“There is a growing number of bus and truck companies operating not only in Pyongyang but nationwide,” a source from North Hamkyung Province told Daily NK last Friday. “People are buying buses or trucks and then paying the state a certain fee to open up transportation companies authorized by the central authorities.”

She explained that those members of the donju with significant amounts of money establish contacts with central bodies and win over the right to operate. “The ‘Pyongyang Transit and Trade Company’ and the ‘General Bureau of Transportation,’ which fall under the Cabinet, write up permits for individual donju and are authorizing the operations in exchange for a certain amount of the profits,” she said, adding that each region has bus companies that come from those two Pyongyang-based offices, creating a de facto public-private collaborative operation.

The donju, by importing second-hand buses from China for 3,000 to 4,000 USD, are overtly raking in profits and revolutionizing bus transportation in North Korea; personal bus transportation was only available in two to three cities in the early 2000s, including Pyongyang, but now it has spread nationwide. According to the source, some companies own anywhere from dozens to hundreds of buses.

“The fare between Chongjin and Musan used to be 8,000 KPW [1 USD] until just two years ago, but now it has jumped to 50,000 KPW [6.25 USD]. The bus that runs between Chongjin and Kim Chaek is currently 80,000 KPW [10 USD] – ten times the original price,” she noted. “Donju are raising the fares to whatever they want depending on the oil prices and exchange rate with the Chinese yuan.”

In the North’s main cities, state-run trams, trolleys, and long-distance buses do operate, but the vehicles are old and the companies beset by economic difficulties. The number of donju-run companies, however, is increasing by the day, leaving the state no choice but to accept their money and grant them license to operate.

“People are happy that there are more options for transportation but there are a lot of complaints about the expensive fares,” the source said. “Some say it’s not unusual for such companies to be operating in the way they do considering the dilapidated condition of state companies, but in the end it’s the regular people who bear the brunt of it all.”

Additional posts on the DPRK’s bus networks here.

Read the full story here:
Transportation Options Taking Off
Daily NK
Choi Song Min
2015-04-01

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Dandong businesses propose lowering trade duties

March 30th, 2015

According to Yonhap:

Chinese firms have proposed establishing a non-tariff trade market with North Korea where cheap goods can be traded without tariffs between the two nations, according to the Chinese border city of Dandong on Monday.

The proposal was made by representatives of Chinese firms in Dandong on Thursday when they met with a North Korean trade delegation, led by Pak Ung-sik, director of the North’s Korean International Exhibition Corporation, according to a statement posted on the Chinese city’s website.

More than 70 percent of bilateral trade between North Korea and China is conducted through Dandong.

Pak reacted positively to the proposal, saying he would relay it to the relevant North Korean authorities and hopes to hold more discussions over the proposal, according to the statement.

Another Chinese border city, Tumen, in the northeastern Jilin province, opened a non-tariff trade market with North Korea in 2010, but the market was quickly suspended as North Korea banned civilians from participating in it due to concerns over the spread of banned materials that may enrage the North’s leadership.

At that time, Tumen had pledged not to impose tariffs on the trade of goods worth less than 8,000 yuan (US$1,287) per person.

China’s is the economic lifeline of North Korea, but their political ties remain strained over the North’s defiant pursuit of nuclear ambitions.

North Korea’s annual trade with China fell 2.4 percent from a year ago in 2014, marking the first decline since 2009, according to data compiled by the Beijing unit of the South’s Korea Trade and Investment Promotion Agency (KOTRA).

The North’s trade with China totaled US$6.39 billion last year, compared with $6.54 billion in 2013, the data showed.

Read the full story here:
Chinese firms propose non-tariff trade of cheap goods with N. Korea
Yonhap
2015-3-30

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Outline for development of Wonsan-Kumgangsan Tourist Region revealed

March 26th, 2015

Institute for Far Eastern Studies (IFES)

North Korea has recently revealed an outline of its plans for the Wonsan-Kumgangsan Tourist Region. In May an information session regarding the development of this project will be held on-site in Kumgangsan.

The Chinese newspaper Liaoning Daily reported on March 21, 2015: “North Korea recently held a briefing session regarding its development plans for the Wonsan-Kumgangsan Region at the Grand Metropark Hotel in Shenyang. The meeting was attended by professionals, scholars and businesspeople from several neighboring Northeast Asian countries.”

According to the newspaper, at the event North Korea revealed development plans for a tourist region of approximately 430 square km in area. It also revealed that there will be six major scenic spots throughout the Wonsan-Kumgangsan Tourist Region, namely, Wonsan, Tongchon, Mount Kumgang, Sogwangsa, Masikryong Ski Resort and Ullim Falls.

North Korean authorities explained, “This year the Wonsan-Kumgangsan Tourist Region development project is considered the most important element of our country’s international economic development efforts. The region is being designed at the government level as a world scenic spot that combines the beauty of the ocean, lake, and city.”

The authorities went on to explain that “Geographically, the Wonsan-Kumgangsan Tourist Region is situated on the eastern part of the Asian continent and the central part of the Choson [Korean] Peninsula. Within a 3-hour flight of that region there are a total of 40 cities with populations exceeding 1 million people […] The region contains a total of approximately 670 tourist sites, 140 historical sites, 10 sand beaches, 4 mineral springs, 10 natural lakes, and 3 million tons of muds that are highly effective in the treatment of neuralgia and enteritis of the small and large intestines.”

While North Korea repairs and expands the existing road network connecting each tourist site (focusing first on Wonsan), North Korean authorities have decided to construct a transportation network by establishing a high-speed railroad between Pyongyang and Wonsan, as well as opening passenger routes between Wonsan Harbor and Rason and Wonsan Harbor and Vladivostok. They will also introduce a series of measures for attracting tourists, including a no-visa system, which is currently being studied.

The authorities also explained that North Korea “guarantees the free economic activity of investors and will offer fixed, regular benefits in areas such as land use, labor employment, and taxes.”

“Tourism, manufacturing, and service businesses will be exempt from corporate income taxes for four years, three years, and one year respectively. Meanwhile, real estate businesses that invest in infrastructure will be exempted from land use taxes for ten years, and those that invest in other areas will be exempt for five years.”

The Liaoning Daily reported that at the information session, O Ung Gil, president of North Korea’s Wonsan District Development General Corporation, said, “I hope that by participating this May at Mount Kumgang in the international seminar regarding the development of the Wonsan-Kumgangsan Tourist Region, everyone will have the opportunity to witness and experience Mount Kumgang first-hand. […] North Korea’s door is always open and investors are welcome any time.”

Various Chinese companies and private organizations hosted the information session. Approximately 50 Chinese professionals and business people, who were invited beforehand, attended the program. Only a few Chinese and Japanese media outlets that were chosen by the organizers were permitted to cover the event.

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Japanese police raid home of Chongryun chairman

March 26th, 2015

UPDATE 1 (2015-5-29): Office 39 has been connected to the Japanese investigation. According to the Daily NK:

An investigation launched by Japanese police has revealed that Office 39, a special department charged with raising funds for Kim Jong Un’s use, is involved in illegal operation exporting pine mushrooms to Japan, Yomiuri Shimbun, a Japanese daily, reported on May 27th.

During a police raid on the home Huh Jong Do, the son of the head of the pro-North General Association of Korean Residents in Japan [Chongryon], the authorities uncovered documents revealing correspondence between the group and Office 39, revealing that North Korea has been exporting pine mushrooms to Japan in conjunction with Chosun Specialty Sales, an affiliate of Chongryon.

An official with the investigation said it was the first time documents explicitly stating “Office 39” have come to light, leading police to push ahead with the investigation and assert the shadowy agency’s direct involvement in the illicit operation.

Both Huh and Kim Yong Jak, head of Chosun Specialty Sales, were arrested on May 12th for violating laws administration of foreign currency. Police investigations revealed that these two men had imported approximately 1,800 kg of pine mushrooms from North Korea in September of 2010–a clear violation of Japan’s ban on trading with North Korea, implemented after North Korea’s second nuclear test in 2009.

Meanwhile, Washington D.C.-based Voice of America, quoting Japanese daily Sankei Shimbun, that Office 39, Huh, and Chosun Specialty Sales were all involved in the pine mushroom smuggling ring, dividing the profits among the involved parties.

ORIGINAL POST (2015-3-26): According to the Japan Times:

The head of the pro-Pyongyang General Association of Korean Residents in Japan, or Chongryon, had his home searched by police on Thursday, and two South Korean men were arrested on suspicion of illegally importing matsutake mushrooms from North Korea.

Raids took place at six locations, including the Tokyo home of Ho Jong Man, chairman of Chongryon, a body which has functioned as a de facto North Korean embassy for many decades in the absence of diplomatic ties between Tokyo and Pyongyang.

Observers said the raid on the chairman’s home could affect stalled bilateral talks on Pyongyang’s abductions of Japanese nationals in the 1970s and 1980s.

Police arrested Lee Tong-chol, 61, president of a Tokyo-based trading house, and Yoshihiko Kin, 42, an employee of the company. They are suspected of illegally importing about 1,200 kg of matsutake mushrooms worth around ¥3 million via China in September 2010.

The mushrooms are believed to have been sold in Japan, mislabeled as Chinese-grown produce.

Japan has banned imports from North Korea since October 2006 as part of economic sanctions imposed in response to Pyongyang’s missile and nuclear programs.

Both suspects are residents of Japan, and both denied the allegation. Investigators quoted Lee as saying he does not understand why he should be arrested, while Kin denied all knowledge of the matter.

Police are investigating the relationship between the suspects and Ho, who is a member of North Korea’s top legislature.

After the early morning raid on his home in Tokyo’s Suginami Ward, Ho told reporters angrily he does not even know the name of the trading company.

“The investigation is done unlawfully and this would lead to serious problems in the relationship” between North Korea and Japan, he said.

“This is political suppression against the General Association of Korean Residents in Japan,” he said.

Touching on the ongoing investigation into the fate of Japanese citizens abducted by North Korea, Ho said the Japanese authority is making things worse, interfering with the investigation by deliberately worsening relations with North Korea.

Meanwhile, a senior police investigator said authorities suspect a link between the illegal trade and Chongryon, and that they will do everything they can to investigate.

To that end, police have so far searched more than 10 locations, including the trading house and the homes of Lee and of Ho’s son last May.

The locations searched Thursday include the Tokyo home of the pro-Pyongyang group’s vice chairman.

Read the full story here:
Police search home of Chongryon leader over suspected North Korea mushroom shipment
Japan Times
2015-3-26

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Gravity-fed tap water system established in DPRK

March 22nd, 2015

According to KCNA:

Gravity-fed Tap Water System Established in DPRK

Pyongyang, March 22 (KCNA) — Today marks World Water Day.

In this regard, Ri Nam Hyon, section chief of the DPRK Ministry of Urban Management, noted that the government has striven to supply quality drinking water to citizens on a normal basis.

He told KCNA:

The DPRK government has made big efforts to the introduction of gravity-fed water supply system.

This introduction began in the township of Pukchong County, South Hamgyong Province, in 2003 while a brisk work was launched to explore the headstreams throughout the country.

At present, the gravity-fed water supply system has been established in 35 cities and counties, including Rason and Wonsan, across the country.

The establishment of this system was carried out in cooperation with the United Nations Children’s Fund and other international bodies and governmental and non-governmental agencies of various countries.

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DPRK-Russia look to boost business ties

March 22nd, 2015

According to Voice of America:

A Russian official said Moscow and Pyongyang have agreed to discuss the creation of advanced development zones in Russia’s Far East and North Korea.

The latest project to be discussed between Russia and North Korea would call for a trilateral project, with South Korea’s participation, said Alexander Galushka, Russia’s minister for the development of the Russian Far East.

In an email sent to the VOA Korean news service, Galushka said Moscow and Pyongyang agreed to “discuss the creation of advanced development zones in the Russian Far East and on the territory of the DPRK with the participation of the Russian Federation, the DPRK and South Korea.”

Economic delegation

The agreement was reached during a visit by a North Korean economic delegation to Moscow in late February. The North Korean delegation was led by Ri Ryong Nam, Pyongyang’s Minister for Foreign Economic Affairs.

Ri and Galushka co-chair a commission tasked with promoting economic ties between Moscow and Pyongyang.

The move is an example of a series of ambitious economic projects recently launched by Moscow and Pyongyang in their efforts to enhance economic ties.

In November, the two sides expanded the Khasan-Rajin project, a project connecting the railways of Russia’s border town and the North Korean port, by conducting a test shipment of Russian coal from Russia to the South Korean port city of Pohang through the Rajin.

In October, the two countries launched a rare joint project that calls for Russia to overhaul North Korea’s railway system in return for access to the North’s mineral resources. The project involves reconstruction of more than 3,000 kilometers of railroads over 20 years.

Galushka said the railway project would pave the way for a significant increase in bilateral trade between Russia and North Korea.

Some analysts are skeptical that the project can be sufficiently financed. So far, Moscow is known to have attracted one domestic investor for the project.

Read the full story here:
Russia, North Korea Boost Economic Ties
Voice of America
Yonho Kim
2015-3-22

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Effort to prevent outflow of capital into markets

March 20th, 2015

Institute for Far Eastern Studies (IFES)

Since the start of the Kim Jong Un era, North Korea has introduced elements of a market economy while at the same time sought ways to mitigate the side effects caused by the rapid spread of market mechanisms.

The Choson Sinbo, mouthpiece of the General Association of Korean Residents in Japan (also known as Chongryon), revealed on February 22, 2015 that on a number of cooperative farms there are now ‘purchasing sites’ where farmers can barter and exchange goods. The newspaper explained that “[On the cooperative farms] there are purchasing sites where cheap goods are displayed and farmers are able to trade distributed agricultural products […] Through these sites it can prevent farmers from liquidating their produce and thus prevent funds from flowing into the market.”

Through the introduction of the ‘field responsibility system,’ North Korea has reportedly been able to meet demand for daily necessities at these purchasing sites. The state controls these sites in order to prevent farmers from taking goods to the jangmadang or the market when the surplus, which returns to the farmers, increases. Since entering the Kim Jong Un era, the field responsibility system has been expanded throughout the country and is credited with having contributed to North Korea’s increase in agricultural production. The system divides the bunjo (the small production teams on the cooperative farm) into family-sized units of 3 to 5 people and entrusts these units with the work of cultivating small-sized fields.

A system similar to the purchasing sites of the cooperative farms can be found in the city as well. The Choson Sinbo revealed that “[North Korean factories] are purchasing items like food and basic commodities produced in the country and are distributing them to workers as a portion of their wages.” In the years following Kim Jong Un’s rise to power, wages increased exponentially due to the introduction of incentives and the increase in the autonomy of factories and businesses. But because the threat of inflation becomes significant if those increased wages are paid entirely in cash, it is reported that businesses pay a part of workers’ wages in goods and commodities.

The Choson Sinbo added that the ‘Hwanggumbol Shop,’ a convenience store that has been appearing here and there in Pyongyang since December of last year, is also an effort by the state to prevent the rapid expansion of the market. The newspaper explained that the state-operated store focuses on supplying “cheaper prices than the market” and that the goal of the store is to guarantee “the circulation of money through state-operated stores.”

State-operated stores are an attempt to prevent the market from taking a central place in the circulation of money. This is accomplished by having state-run stores supply goods at a lower price than the market and thereby attract consumers. Different from the past, the current regime intends to utilize the market rather than restrict it. It is believed that North Korea will try to keep the market in a condition in which it can be suitably managed.

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Friday fun: My first Yeon-mi Park post…

March 20th, 2015

*All of the videos referenced in this post were deleted by YouTube in September 2017*

UPDATE 1(2016-2-23): The North Koreans have re-released the original documentary in Korean. Here are links to parts one, two, and three.

ORIGINAL POST (2015-3-20): Though Yeon-mi Park is arguably one of the most well-known North Korean defectors these days, for numerous reasons I have not devoted much of my time to her work. I was also surprised when Uriminzokkiri released two videos discredit Ms. Park (Video one in three parts is here. Video two is here). Maybe someday the North Koreans will catch onto the fact that these videos actually raise the status/profile of those they are trying to vilify, but in the meantime we can have some fun with them.

Ms. Park is the third North Korean defector (of whom I am aware) about which the DPRK has made these sorts of films. She now joins company with Shin Dong-hyuk and and Ma Yong-hae, though doubtless there are more.

The second video attacking Ms. Park was interesting to me due to the use of geography to try and discredit her story. So I thought I would write about what the video claims and examine whether its assertions hold up to some basic scrutiny. As was the case with the videos attacking Mr. Shin, the North Koreans appear to unintentionally verify some Ms. Park’s claims. So let’s begin.

The video states at the 3:33 mark:

In one of her lies, Park said that about eight kilometers from Hyesan in Ryanggang Province there is a “Juche Rock” in a peak of a mountain called “Kot-dong-ji (?)” in Komsan-ri (검산리). She said if you look down from that mountain peak you can see Pongsu-ri (봉수리) of Pochon County and [the] Amnok River. She said she took that route to escape.

Juche-rock-Hyesan-Uriminzokkiri

But in fact there is a highway from Hyesan to Pochon County and just on its left side there is a small rock called “Juche Rock.” And if you look down from there the opposite side is Changbai  County of Jilin Province, China.

Yonpung-dong-Uriminzokkiri

On the far other side of [the] Amok River, you can see not the Pongsu-ri of Pochon County but Yonpung-dong, Hyesan City.  So how on earth did she manage to find a mountain here in the region which she is said to have crossed at the risk of her life?

The video was indeed filmed in Hyesan, but unfortunately for the North Koreans, when I combine (a) data in the video with (b) administrative data published in North Korea with (c) satellite imagery, I get results that verify claims made by Ms. Park (as described in the video).

Here is a Google Earth satellite image  of the area described in the video (where Ms. Park is alleged to have crossed the Amnok River):

Juche-rock-hyesan-2015-3-20

To begin with, “Juche Rock” (41.449298°, 128.247329°) can clearly be seen on top of a mountain in Hyesan, Ryanggang province. I am not sure why the North Koreans wanted to bother disproving the existence of a mountain–especially if they are going to record a video from the top of it.

Secondly, “Juche Rock” is on the outer border of Komsan-ri:

Komsan-ri-Hyesan-2015-3-20

Thirdly, later in the video (6:16), the North Koreans identify a house they claim was Ms. Park’s in Sinhung-dong, Hyesan City. Here is a satellite picture of that house (Marked in yellow: 41.397725°, 128.171969°):

Park-house-sinhung-2015-3-20

I have no idea if the Park family actually lived here, but this house is exactly 8.48 km from “Juche Rock”. It’s a bit further on foot. So again, the satellite data is confirming what the video asserts Ms. Park claimed.

Finally, the point about the village to the north of “Juche Rock” being Yonpung-dong, Hyesan City, not  Pongsu-ri of Pochon County, was the most difficult to for me to untangle. This confusion stemmed from two causes. The first was because Ms. Park is technically wrong about “Pongsu-ri” being the next village north of Juche Rock. The second source of confusion is because the North Koreans recently changed the border between Hyesan City and Pochon County and have apparently done some renaming in the process.

I have three maps (published in North Korea) that identify ‘Yonpung-dong, Hyesan City’ as ‘Hwajon-ri (화전리), Pochon County.’ You can see the area for yourself on Google Earth at  41.460212°, 128.231495°. Apparently sometime recently (I don’t know when), the North Koreans shifted the border of Hyesan City further north into Pochon County. At this time I suspect that Hwajon-ri was renamed Yonpung-dong. The only evidence that I have of the border change is a blurry map that the North Koreans produced to show the location of Hyesan’s new economic development zone. It shows the Hyesan border has moved north from its original location, however even it retains the name “Hwajon-ri.” The only source I have that the area has been renamed “Yonpung-dong” is this Uriminzokkiri video. But all of this certainly took place after Ms. Park had left the DPRK.

Here are approximate before and after pictures of the Hyesan – Pochon border changes:

2Hyesan-old-2015-3-20

Hyesan-new-2015-3-20

To Ms. Park’s credit, however, there is an area just north of Yonpung-dong/Hwajon-ri called ‘Pongsu’ (봉수). It is not a ‘ri’, but it used to have a train station with the same name. The train station has since been torn down, but that may be the reason she remembers the area as “Pongsu.”

Pongsu-Station

So to recap: The North Koreans published a video in which they called Ms. Park a liar (among other things) and used geography to prove that she had mislead people. The geographic points they raise in the video, however, tend to support comments Ms. Park is alleged to have made.

There is a separate question as to whether Ms. Park made the claims referenced in the video, and to that I have no idea. As I mentioned, I have not paid particular attention to her story.

However, I am delighted that digging into this video has taught me that the border between Hyesan and Pochon has changed.

There are other claims in the video that I don’t want to address because, frankly, I am not qualified–and it is Friday.

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Two new books out on North Korea…

March 19th, 2015

Two new books are out on North Korea. Together they “book-end” North Korea’s history. One takes place in the beginning. The other takes place in current times. Info and links below.

North Korea Confidential: Private Markets, Fashion Trends, Prison Camps, Dissenters and Defectors
By Daniel Tudor and James Pearson

North-Korea-Confidential

You can learn more about the book and order it from Amazon.com.

I have read bits of this book and found it very interesting.

______________

The Great Leader and the Fighter Pilot: The True Story of the Tyrant Who Created North Korea and The Young Lieutenant Who Stole His Way to Freedom
By Blaine Harden

Leader-and-pilot

You can learn more about this book and order it at amazon.com.

Media coverage of the book here and here.

______________

Other books, videos, blogs, etc are here.

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Shopping at a socialist department store

March 19th, 2015

Many of us imperialists have not had the chance to purchase goods in a socialist shop or department store. I did in the former Soviet Union, Eastern Europe and in the DPRK. Rather than collecting the items you want and taking them to a single check out line, you are required to stand in three separate lines. I never really saw a published source explaining it all (though I am sure Lankov has written about it in one of his books), but happened upon a declassified (FOUO) document published on May 18, 1979 (the bracketed and italicized sections are my own comments).

[Line 1: Ordering] It is said that at the state-operated North Korean store the customer requests to the sales clerk what he wishes to purchase and have the name of the product and the price written on a small piece of paper. [Line 2: Paying] Then the customer goes to the cashier. After paying for his purchase in cash [and ration coupon if necessary] he gets his paper stamped; then [Line 3: collection] he goes back again to the clerk who [gets] the paper.

The purchased item is then finally handed to the customer.

I am not sure how many official retail establishments in the DPRK still practice these archaic control procedures. This practice is not used in the markets. In one encouraging sign, the recently refurbished Kwangbok Area Supermarket has transitioned to market-style shopping where individuals collect goods and pay for them in a single line.

Here is the citation for the quote:

“Translations on Korean Affiars (FOUO 1/79)”, U.S. Joint Publications Research Service, 18 May 1979. Release 2007/02/09: CIA-RDP82-00850R000100050036-6

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