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1 Out of 5 N. Korean Defectors Swindled

Tuesday, January 30th, 2007

Korea Times
Kim Rahn
1/30/2007

One-fifth of North Koreans who defected to South Korea have gotten swindled here, according to the Korean Institute of Criminal Justice Policy. The majority of the swindlers were other North Korean defectors.

The report released Tuesday was based on a survey of 214 defectors over 20 years old conducted between July and September.

According to the report, 50 of the 214 polled had been the victims of fraud, theft or burglary. The victims constituted 23.4 percent of the total. Only 4.3 percent of South Koreans report having been the victim of similar crimes.

Most of the defectors who reported the crimes were affected once, but one defector was the victim of eight crimes. The 50 who reported crimes were involved in 91 crimes. Of the 91, 46 involved fraud and 11 involved violence.

The percentage of the victims who fell prey to fraud was 21.5 percent. About 0.5 percent of the South Korean population has reported fraud.

Among the 46 fraud victims, 28.6 percent lost money through a business or investment, 26.6 percent lent money to others and were not paid back and 19 percent gave money to someone who said they would bring the defectors’ family in the North to South Korea and didn’t do so.

Most of the victims of business-related fraud lost money after investing in multi-level marketing companies. Those who invited the victims to the join the businesses were mainly other North Korean defectors, according to the report.

Six of the eight cases related to bringing relatives here from the North were committed by North Korean defectors.

Those with more education were more subject to fraud. Some 42 percent of defectors with college degrees and 14.1 percent of high school graduates were swindled, but none of those who had elementary school education was a victim of fraud.

Most of the surveyed defectors did not trust people, with 63.9 percent saying they should be wary of others in South Korean society.

“The government has to prepare counseling centers and give more detailed law education to North Korean defectors when they leave Hanawon, a state-run settlement facility for defectors,” a researcher said.

N. Korean defectors shift attitude to adapt to capitalism
Yonhap
1/11/2007

For a growing number of North Korean defectors to South Korea, the stark reality of capitalism might offset their long-held dream of living in a free, affluent country.

In a capitalistic society like South Korea, a measure of freedom and independence can come only with ability to compete for decent jobs and willingness to adapt to new circumstances.

“They have a sheer illusion that if they arrive in South Korea, the people will treat them well. But they get disillusioned soon, and their lives get devastated if they don’t try hard to adapt themselves,” said Kim Seung-chul, a researcher at the Institute of North Korea Studies.

The total number of North Korean defectors will likely top 10,000 sometime this year, according to government officials.

So far, 9,265 North Koreans have settled down in the South after finishing all the procedures and obtaining social security numbers, while some 400 are receiving adaptive education at a state-run institute. More than 500 defectors are currently under the custody of South Korean embassies or consulates in Thailand, Mongolia and other countries.

“This year, a lot more North Koreans will likely escape and attempt to come to the South because the food situation is expected to worsen following the missile and nuclear device tests,” said a senior official at a Seoul-based aid group for the defectors on condition of anonymity.

Since heavy floods hit the North in the mid-1990s, the annual number of North Korean defectors reached double digits and in 1999 it swelled to a triple-digit level. In 2002, as many as 1,139 defectors arrived in the South, a sharp rise from 583 the previous year, government data showed.

“In the past, we provided direct help, or unilaterally protective aid, but the policy is shifting to an indirect one aimed at helping them stand on their own. The government will provide more job training and employment opportunities,” a Unification Ministry official said, asking to remain anonymous.

Since 2005, South Korea has introduced an incentive system for North Korean defectors on the basis of their performance in job training and the level of adaptation, aside from the money provided to help them settle in the South.

But the prevailing sentiment among the defectors is that they cannot survive in the South only with government subsidies or state-offered jobs.

“What matters is attitude. They should make efforts to understand the South Korean society and prepare themselves for competition,” said Kim Young-hee, 43, president of an aid group for North Korean defectors.

Park Cheol-yong, 32, who fled the North and arrived here in 2002, had difficulties adapting to the different work culture, but he decided to soldier on, believing that he would have a chance to get recognition after years of experience.

“The cultural differences are far greater than expected, but I tried hard to overcome the problem by adjusting to new circumstances,” said Park, who works at a stationery company.

Park, who is married with a three-year-old son, graded himself “mediocre” in the level of adaptation and expressed hope that life will get much better here as time goes by.

“Life will be much more difficult if I quit the job so easily because of the stress I get from work now. I will do my best to succeed,” said Park, who works for the sales of stationery in the morning and delivers stationery in the afternoon.

Posted in Civil society, Emigration | Comments Closed

Last US defector in North Korea

Tuesday, January 30th, 2007

The folks who brought us “The Game of their Lives” and “A State of Mind” have delivered their third DPRK-based documentary, “Crossing the Line” about four American soldiers that defected to the DPRK. It was shown at the Sundance Film Festival this week, and sorry to Simon, Nick and Dan that you did not win.

A section of the interview with the last remaining defector, James Dresnok, was aired on CBS this week. It was very interesting, not only because we get a glimpse into the life of Dresnok, but also his children. Click here to see the video clip.

The story below was also published in the BBC.

BBC
1/23/2007

In the 1960s four US soldiers separately defected to North Korea, and were little heard from again.

Now one – the last known former American GI left in the country – has spoken for the first time to British documentary-makers.

James Dresnok is something of a celebrity around the North Korean capital Pyongyang, his home for the last 44 years.

Unmissable thanks to his 6ft 5in height and bulky frame, the 64-year-old has appeared in North Korean films, taught English at university and been a propaganda hero for the Communist nation.

“I have never regretted coming to [North Korea]. I feel at home,” he says, in the documentary Crossing the Line, which premiered at the US Sundance Film Festival on Monday.

James Dresnok was a 21-year-old army private when he decided to leave his post in South Korea one August afternoon in 1962 to cross into the North.

Three months earlier, Private Larry Abshier had become the first known US soldier to defect to the North, while patrolling the demilitarised zone between the two Koreas.

In the three years that followed, Specialist Jerry Parrish and Sergeant Charles Jenkins would follow Abshier and Dresnok across the border.

The four, who initially lived in the same house, found their new life tough in the early years. Mr Dresnok admits he did not want to stay. “I didn’t think I could adapt”.

A joint bid for asylum at the Soviet embassy in 1966 was rejected and the four were forced to undergo intense re-education, which included learning North Korea’s official Juche ideology.

It was at that point, Mr Dresnok says, that he decided he would try to fit in. “Man is the master of his life, and little by little I came to understand the Korean people,” he said.

All four married, were granted North Korean citizenship and – apart from starring as evil capitalists in a propaganda film called Nameless Heroes in 1978 – appeared to drop off the face of the earth.

In fact, so little was known about them that Larry Abshier had been dead for 13 years when the US defence department said, in 1996, it believed all four men were still alive. Jerry Parrish had in fact died in 1996.

Persistence

UK documentary-maker Daniel Gordon and his Beijing-based co-producer Nick Bonner were already familiar to North Korea’s film-making authorities when they asked them about the rumours of the four defectors.

Their 2002 film, The Game of Their Lives – about the North Korean football team that beat Italy in the 1966 World Cup and qualified for the quarter finals – had been a huge hit in the country.

They were working on their second film, A State of Mind – following two North Korean schoolgirls preparing for the mass games – when they asked for permission to make a film about Mr Dresnok and the others.

“We were initially told it was absolutely impossible,” Mr Gordon explained, “but we took that to mean it was possible.”

In June 2004, at a meeting they thought would be with the North Korean authorities, the filmmakers were brought face-to-face with James Dresnok and Charles Jenkins for the first time.

“The two men weren’t wholeheartedly keen on making the film. It had the potential to blow up in their faces. But at the end of the two-and-a-half hour meeting, they had come round,” Mr Gordon said.

Within five weeks of the meeting, however, Charles Jenkins’ story became known to the whole world when he left North Korea to be reunited with his wife in Japan.

Privileged

While the documentary is about all four defectors, the focus is undoubtedly on James Dresnok who is filmed fishing, going to a restaurant, the opera and having a medical check-up.

“I found him a fascinating guy,” Daniel Gordon says. “He has had such a unique experience of life.

“It is hard to understand from our perspective why an American soldier would choose to make his life in arguably the biggest US-hating nation on earth.”

James Dresnok describes how an unstable childhood and his first wife’s infidelity left him with a sense of hopelessness before he crossed the line into the North.

Since his defection, he has been married twice and has three children.

He taught languages and carried out translating work even though he, like the other three, had dropped out of school by the age of 15.

And he also appeared in several other films, apart from Nameless Heroes, and is still referred to as Arthur after a character he once played.

Mr Dresnok admits he lives a privileged life by North Korean standards, confessing that he got rice rations during the deadly famines of the late 1990s while others were starving.

“The government is going to take care of me until my dying day,” he tells the documentary team.

Posted in Film, Tourism, USA | 1 Comment »

Korean Dramas Regulated, 109 Groups Dispatched

Thursday, January 25th, 2007

Daily NK
Kwon Jeong Hyun
1/25/2007

Since last year, North Korean authorities have been attempting to cut off all kinds of capitalist culture. Hence, another extensive hunt for Korean videos and radio broadcasts continues on.

North Korean authorities formed “109 Inspection Team” consisting of authority officials, inspectors from the National Safety Agency and Social Safety Agency, who have been focusing on regulating the major cities for watching and selling foreign VCDs. As of this year, the regions for inspection has extended to the provinces, an inside source informed. The regulations seem to have become an annual event.

The source from North Korea said “About 50 people who were caught watching foreign videos in the district of Woonsan, North Pyongan and now are being investigated” and “The preliminary hearing for about 10 people with no connections or who could not offer bribes, also the people found to be directly circulating the videos has ended and are now waiting a sentence.”

During the 80’s, video tapes were controlled by intercepting with electricity and any family found with videos in their video players were individually restrained. However, many families with video players also had chargers and so this method was ineffective. Now inspector groups consisting of 10~20 people have search warrants to thoroughly check all parts of the home.

The source said “The people sentenced will probably get sent to the labor training corps but of these repeaters if any person has issues with ideologies or are condemned as responsible for selling the videos, then they will be sentenced to jail.” The source added “People who are sentenced to jail because of videos are normally imprisoned for 4~5 years, but many are released after 2~3 years on special occasions like Feb 16th (Kim Jong Il’s birthday) or April 15th (Kim Il Sung’s birthday).”

On a different note, the latest issue of Democratic Chosun (issued on January 13), the government paper, obtained on the 20th stated “Imperial activists are sticking to us from within until death in order to sow the seeds of capitalist” and ordered a firm response “We must stick to them (capitalists) and austerely cut them off.”

Posted in Animation, Art, China, Civil society, Film, International trade, Music, Television | Comments Closed

Citizens Exploited As the Nation Cannot Produce Its Own Income

Wednesday, January 24th, 2007

Daliy NK
Yang Jung A
1/24/2007

North Korean authorities are requesting “implied” voluntary offerings to be made to the army, placing a greater burden on the North Korean citizens who are battling a tough winter due to the bitter cold and dire food crisis.

The first journalist to report about North Korea Lee Joon said that at a people’s unit meeting held in the rural district of Dancheon, North Hamkyung from January 7th to the 13th, orders were made from the central committee indicating a “severe food crisis amidst the people’s army,” reported Japan’s Asia Press on the 22nd.

Lee Joon is the first underground journalist to work in North Korea and has exposed the daily lives of North Korean citizens through video footages, collections of still life photos and voice recordings both nationally and worldwide.

At the people’s unit, an order was made “The food shortage in the people’s army is severe. With a devoted heart to the nation, every family must voluntarily offer food to the army.” Though the orders imply donations as a voluntary act, it is in fact forced upon the citizens or as it implies otherwise, suffer the consequences.

Lee informed “The exact amount of donations were not specified, though citizens are being pressured to increase their offerings as one person was said to have offered 600kg and another even up to 1tn.”

Lee said “Though the army declares a shortage in food, the cost of rice and corn at the markets has not risen in comparison to late November and early December” and commented “There does not seem to be a great shortage in supply as merchants at the markets sell rice imported from China.”

Contrastingly, Lee explained “From a national perspective, it seems that the supply of food had been considered low as international aid was terminated and crop output minimal.”

In addition to this “As the nation does not have any funds, an order was made for each family to invest their money into banks” and again “Though the exact amount was not specified, this order was indisputably forced” upon the citizens, Lee said.

Lee continued “Even 3 years ago, as a 10 years redemption national loan, the people had to support the nation with their funds” and “As there were many complaints from the people, the idea was changed to a look like a savings account. I believe that forcibly collecting money is no different to the national loan.”

At present, as there are many cases where North Korean banks cannot pay interest or capital from investments, any person that does invest in banks is called as a fool. Even though the government enforces a directive, it is unlikely that the people will invest their money in banks.

Lee said “Each person must gather 2.5tn’s of provisions and offer it to the local farms because a task was assigned to increase the output of fertilizer.” and remarked “It’s something that happens often, but it did come earlier than expected.”

“The poor collect excrement from their homes or public places whereas the rich slip through the cracks by either buying goods from the markets or offering bribes” Lee explained.

Complaints are rising against the government’s frequent tasks of offering goods, though “with feelings of discontent (resulting from international sanctions) the government exploits the people as they cannot make any money” Lee said.

In particular, “There is a general consensus amongst the people who now believe that the government is not trying to change the economy (through openness and reform) but only making their lives more difficult” revealed Lee.

Posted in Agriculture, Banking, Central Miltary Committee, Civil society, Finance, Military, Worker's Party | Comments Closed

Female Ratio in KPA Now More Than 10%

Tuesday, January 23rd, 2007

Daily NK
Kim Min Se
1/23/2007

What is the gender ratio in Korean People’s Army?

A 28-year old recent defector Kim and a 38-year old former KPA Air Force engineer Choi said that female members of KPA could take up to ten percent of the total armed forces from administrative positions to front battalions.

Kim testified “Most of small-caliber anti-aircraft guns are operated by women and there are even all-female independent brigades and regiments.”

“North Korean authorities encourage women to be enlisted in coastal artillery by advertising ‘recruiting songs.’”

Kim also said that virtually all of the North Korean train tunnels and bridges were guarded by women forces armed with 14.5mm machine gunnery.

Korean People’s Army, according to the South Korean Ministry of Defense’s White Paper, boasts 1.17 million soldiers, and the government in North Korea has increasingly enlisted women since the population shrank in mid-90s.

Kim is a former female member of the KPA 4-25 Training Camp (equivalent to a corps) 331st Brigade 6th Mechanized Battalion. She had served since 1997, the peak of starvation period. At that time many North Korean parents sent their daughters to the army for them to avoid hunger.

Female officers have been mass-recruited since 1995 among women NCOs of proven party loyalty and good family background. They were trained for two years and then stationed in each unit.

For the enlisted, both men and women are conscripted at their age of 17 while the female soldiers receive trainings specialized in anti-aircraft guns.

However, some others, as their male compatriots, are more fortunate, due to their superb ancestral or family background, to be stationed in army hospitals or other more comfortable places than coastal artillery.

“In more recent days,” another defector Choi said, “even aircraft pilots of Soviet-built IL-28 Bombers are filled with women.”

North Korean enlisted women usually serve six to seven years, in contrast with ten to thirteen years of men’s service.

Female veterans automatically become KWP member as they are discharged and enjoy higher chance to be selected as junior party official, but not as preferable marriage partner.

Posted in 1990s Famine, Automobiles, Civil society, Military, Railways | Comments Closed

Family Planning Campaign

Monday, January 22nd, 2007

Korea Times
Andrei Lankov
1/22/2007

Old-style Communism had no doubt about the birthrate. Its approach to fertility was simple and straightforward: the higher, the better. There could be no such a thing as too many soldiers or too many workers.

Thus, Communist states went to great lengths to stimulate the birth rate. Of course, material incentives of all kinds were used widely: an additional tax levied on childless people, heavily subsidized kindergartens and creches, long maternity leaves.

Large families enjoyed special access to goods and services, a significant privilege in an economy based on distribution, and plagued by scarcity.

The material incentives were augmented by intense propaganda.

In the USSR from 1944, a mother who raised more than seven children was decorated with a special order and provided with many privileges. The caveat was that it was not enough to just give birth seven times: the decoration could only take place when the youngest of the seven children reached the age of one year.

The same approach was adopted by North Korea in the early stages of its history. Any other policy would be strange: the country suffered huge population losses in 1945-1953, partially due to the war and partially due to the large-scale migration to the South.

The population was believed to be 9.3 million in 1946, but by 1953 it had declined to 8.3 million.

In 1966 the fertility rate in North Korea reached the very high level of 6.5 children per woman. This was higher than the fertility rate in the South where it had already begun to decline, not least due to a government- sponsored campaign.

But then something happened. Around 1970, fertility rates nose-dived in the North, supplying one of the most dramatic reductions in the world’s demographic history. They dropped to 4.5 in 1974 and then to 3.5 in 1976. The crude birth rate, measured in the number of live births per 1000, declined from 35 in 1970 to 18 in 1976, thus halving in merely seven years.

All these figures are quite reliable since demographic statistics are probably the only kind of North Korean statistics decently known to the outside world. We know this through a blunder by the North Korean authorities who, in the early 1990s, invited a group of foreign experts on demographics to the country and provided them with full access to the relevant data. This was done to get their advice on the forthcoming population census.

To make sure that the foreigners would not create any harm, the data was slightly doctored, but the North Korean officials obviously did not realize that demographic data is, by its very nature, remarkably consistent, so an expert can easily reconstruct missing sections. When they understood their mistakes, the authorities tried to prevent the data from being published, but it was too late.

This statistics which became available in the 1990s confirmed what was long suspected: in the early 1970s, North Korea waged a highly intensive and highly successful family planning campaign. The information about this campaign has filtered out through defectors, but few if any experts understood how dramatic and decisive it actually was.

In the early 1970s, abortions were legalized and education about contraceptive procedures became obligatory in all kinds of health centers. Despite increasing difficulties with all kinds of goods, the contraceptive devices were widely manufactured and freely distributed.

The three-child family was proclaimed an ideal, and from 1978 the desirable number of children was further cut to two.

Around the same time, the marriage age was increased dramatically. The legal marriage age remained the same, but the public North Korean laws are not necessarily written to be followed.

The actual life of the country is determined by instructions, of which the instructions by the Great Leader himself are by far most important. And the Great Leader said in 1971, and said in no uncertain terms, that the youth should be sacrificed for the sake of revolution, not for raising families. In his wisdom he said that a good time to marry would be when a woman reached 28 and a man reached 30. Needless to say, a wish of the Great Leader became instantly the law of the land.

But it was never stated that all these measures were aimed at curbing birth rates. This was the major peculiarity of the entire campaign: in spite of its huge scale, it remained essentially secret. Perhaps, the North was unique in being the world’s only state which was in position to wage an invisible campaign of this kind.

The existence of very efficient and non-transparent channels of influence created such a unique opportunity: orders could be transmitted through party bureaucracy to every family without attracting anybody’s attention, while incentives could be distributed and punishment could be inflicted without much noise.

It is not clear what made Pyongyang undertake such a dramatic reversal of its earlier policies. From the officially published documents of the 1970s it seems that Kim Il-sung began to worry whether grain production was growing fast enough. Perhaps, it was decided to curb population growth because the government was not sure whether it would be able to feed more mouths in the future.

Perhaps, the impact of the intense South Korean family planning campaign was also felt in the North. Unlike lesser beings, North Koreans leaders have always been careful readers of the South Korean press, and they often imitated their adversaries in everything from dress fashions to ideological trends.

Finally, the changing mood of the developing world may have played a role. The early 1970s was the period when developing countries came to see population growth as a problem rather than an opportunity.

At any rate, the program was remarkably successful. Nothing like it could happen these days, when Pyongyang is gradually loosing its ability to monitor and direct all activities of its subjects. The days of Stalinism with North Korean characteristics are long gone.

Posted in Agriculture, Civil society, Health care, Pediatrics | Comments Closed

North Koreans cut off and freezing to death

Sunday, January 21st, 2007

Daily Telegraph
Sergey Soukhorukov
1/21/2007

The men who finally made it into the remote highland village of Koogang were greeted by an eerie silence and a gruesome sight.

Lying among the simple wooden huts and burnt remnants of wooden furniture, they found the bodies of 46 North Korean villagers, including women and children, all of whom had frozen to death. Cut off from the outside world by one of the harshest winters in many years, the villagers had suffered a macabre fate that has exposed both the desperate poverty and callous misrule blighting the Stalinist state.

More than 300 people are thought to have perished from cold so far this winter in North Korea’s mountainous north, victims of temperatures as low as -30C and of an arrogant ruling clique.

“Nobody got out of the trap alive,” said an official at the Chinese embassy in the capital, Pyongyang, who confirmed the events of Koogang. “After heavy snowfalls, there was a severe frost. The inhabitants were doomed.”

In a country notorious for its secretiveness, the regime of President Kim Jong-il has made no mention of the deaths. As the rest of the population struggle to stay warm, 50,000 members of his ruling elite continue to live in splendid isolation in a compound in central Pyongyang – enjoying the benefits of hot water, central heating and satellite television.

Elsewhere in the city, though, the scene could have been lifted from the pages of a Charles Dickens novel. The air is thick with the smell of coal dust, as families light fires on the floors of their apartments to keep out the bitter, cold winds that blow south from Siberia.

Outside Pyongyang, the situation is yet more desperate. A six-mile drive from the city, poor farmers trudge through the snow with bundles of brushwood on their backs.

A massive process of deforestation, begun in the 1990s by Kim Jong-il’s father and predecessor, Kim il Sung, has resulted in huge swathes of forest being chopped down to clear land for farming. The disastrous policy led to large-scale soil erosion, believed by many to have been a leading cause of mass famine of the 1990s, when up to three million people starved to death.

It has made the bitter winter, when the temperature in the capital routinely falls to -13C, even more dangerous as the rural poor struggle to gather enough firewood to sustain them.

The inhabitants of Koogang, around 200 miles north-east of the capital, set fire to tables and chairs, even tearing down the wood from their own homes in a desperate attempt to keep warm.

The World Food Programme estimates that North Korea will be 900,000 tons short of the amount of food needed to feed its 23 million population this year. Aid efforts have been complicated by sanctions, imposed after Kim Jong-il’s regime carried out a nuclear test in October last year. Last week, the country held negotiations with US diplomats aimed at re-starting six-party peace talks, which also include China, South Korea, Japan and Russia.

Christopher Hill, America’s chief envoy at the talks in Berlin, signalled progress, saying that the US looked forward “to establishing a normal relationship with North Korea”.

But while there may be signs of a thaw in the country’s frosty relationship with the West, in Pyongyang there is no respite from the sub-zero temperatures.

The electricity supply is notoriously unreliable and as evening falls the city streets are plunged into darkness.

The only constant source of light is the giant illuminated copper statue of Kim il Sung on a hill top overlooking the city – cold comfort for those living through the bleak North Korean mid-winter.

Posted in Agriculture, China, Civil society, Coal, Electricity, Energy, International Aid, UN World Food Program | Comments Closed

North Korea’s golden path to security

Thursday, January 18th, 2007

Asia Times
Bertil Lintner
1/18/2007

While the West and Japan have targeted North Korea’s overseas bank accounts to curtail its weapons program, Pyongyang has recently turned to more ingenious ways of maintaining its international businesses through substantial exports of gold, silver and other valuable metals.

Pyongyang has apparently found a willing conduit to global buyers through its many business connections in Thailand, which has recently emerged as the isolated state’s third-largest trading partner after China and South Korea. According to official Thai Customs Department statistics, North Korea shipped 500 kilograms of gold worth 398 million baht (US$11 million) to Thailand last April.

The following month, another 800kg of gold worth 635 million baht landed in Thailand courtesy of North Korea. Also, in June, 10 tons of silver worth 148 million baht was sent from North Korea to Thailand, followed by 12 tons worth 166 million baht last October.

In sum, North Korea exported 1.35 billion baht – or nearly $40 million – worth of precious metals to Thailand last year.

That is a substantial figure for North Korea, a country with an estimated gross domestic product of about $22 billion and whose total exports amounted to just over $1 billion, according to official statistics. Thailand is bound by the international sanctions imposed last October against North Korea by the United Nations in response to Pyongyang’s exploding an atomic bomb.

According to official Thai statistics, the gold and first consignment of silver were shipped to Thailand before the UN sanctions were imposed. But there is nothing illegal in North Korea exporting precious metals, unless, of course, the income from the sale can be tied directly to the country’s controversial weapons programs, which anyway would be extremely hard to prove.

Untapped riches
North Korea’s gold and silver mines remain largely untapped. According to Tse Pui-kwan, a Chinese-American chemist who joined the US Bureau of Mines in 1990, North Korea has significant deposits of copper, gold, graphite, iron, lead, magnesite, tungsten and zinc. When the Cold War ended and North Korea lost large amounts of foreign aid from both the Soviet Union and China, its mining industry fell into disrepair and extraction activities sharply declined.

But with new foreign cooperation, production has resumed, which the recent exports to Thailand clearly demonstrate. North Korea’s main gold mine is in Unsan county in North Pyongan province, about 150 kilometers north of Pyongyang. It was originally opened by a US firm in 1896, when Korea was still an independent and unified kingdom, and was later taken over by a Japanese company when the peninsula became a colony ruled by Tokyo in 1910.

Nearly a century later, consultants from Clough Engineering of Australia in 2001 inspected the same mine under the sponsorship of the United Nations Office for Project Services. They estimated that Unsan held 1,000 tons of gold reserves, which if true would make it one of the world’s major gold mines. Silver is also mined in the same area, while iron ore and magnesite are found in North and South Hamgyong provinces in the northeast.

North Korea’s extraction techniques are sometimes controversial. According to witnesses interviewed by the US Committee for Human Rights in North Korea for its 2003 report “The Hidden Gulag: Exposing North Korea’s Prison Camps”, there is a gold-mining labor camp near Danchun in South Hamgyong province, where thousands of prisoners are being held and forced to work under abysmal conditions.

In that same report, several witnesses claimed that “some of the mine shafts dated back to the early days of the Japanese occupation of Korea in the early 1900s. Accessing the veins of minable gold required descending and, later, ascending a wooden staircase 500 meters in length, using gas lanterns for light. Deaths from mining accidents were a daily occurrence, including multiple deaths from the partial collapse of mine shafts.”

The first attempt to modernize North Korea’s gold-mining industry was made by an Italian financier and former Foreign Ministry official, Carlo Baeli, who traveled to the country in the early 1990s and claims to be the first Westerner to do business with Pyongyang since the Korean War. He later wrote a book called Kim Jong-il and the People’s Democratic Republic of Korea, which was published in Pyongyang in 1990, obviously with official permission as it was printed by the state-owned Foreign Languages Publishing House.

Apart from painting a flattering portrait of the North Korean leader, the book describes Baeli’s first trip to Pyongyang in 1990, of which he wrote, “We were interested in investing in the mining industry, mainly in the extraction of gold and granite.” Baeli later signed a contract for a loan of $118 million to purchase mining equipment, and the goal was to resurrect no fewer than six gold mines across North Korea. The money was to be provided by international banks such as Midland Bank and the Naples International Bank. He also arranged for the mining equipment to be shipped from Italy.

But heavy flooding in the mid-1990s damaged both the equipment and the mines and, according to a 2006 report in Forbes magazine, Baeli today works as an adviser to the Pyongyang government at a tire-recycling plant. The car and truck tires are imported from Japan, get ground into granulate in North Korea, and are sold to China for road resurfacing, car mats and shoe soles. A lucrative business, perhaps, but not quite the golden dream Baeli had when he first arrived in Pyongyang nearly 17 years ago.

Another unusual partner in North Korea’s gold trade may have been the late Philippine dictator Ferdinand Marcos. In August 2001, the right-wing South Korean newspaper Munhwa Ilbo published a story claiming that Marcos in September 1970 had deposited 940 tons of gold bars at a Swiss bank in the name of the late North Korean dictator, Kim Il-sung. The report came from a former Marcos aide, and Munhwa Ilbo carried a copy of the bank-account certificate on its front page. The alleged gold bars were part of what a Japanese army general had looted from Asia during World War II, Munhwa Ilbo claimed.

That report was never independently confirmed, but it nevertheless reflects the mystique and speculation that still surround North Korea’s gold industry – and how little the outside world actually knows about it.

Financial pressures
When the US took action against Banco Delta Asia in Macau in September 2005, labeling it a “primary money-laundering concern” for North Korean funds, very little evidence to substantiate the charges was ever produced. North Korea lost $24 million when the accounts it held with the bank in the name of a front company, Zokwang Trading, were frozen. Zokwang, which had been operating in Macau for decades, also closed its office and relocated to Zhuhai province across the border in China proper.

The action against Banco Delta Asia, a privately owned bank that the Macau government later had to prop up to prevent it from collapsing, was the second move against North Korea’s assets abroad. In a much less publicized action, North Korea’s only bank located in a foreign country – the Golden Star Bank in Vienna – was forced to suspend its operations in June 2004. The Golden Star was 100% owned by the Korea Daesong Bank, a state enterprise headquartered in Pyongyang, and was allowed to set up a branch in the Austrian capital in 1982.

For more than two decades, Austrian police kept a close eye on the bank, but there was no law that forbade the North Koreans from operating a bank in the country. Nevertheless, Austria’s police intelligence department stated in a 1997 report: “This bank [Golden Star] has been mentioned repeatedly in connection with everything from money-laundering and distribution of fake currency notes to involvement in the illegal trade in radioactive material.”

Eventually the international pressure to close the bank became too strong. Sources in Vienna believe the US played an important behind-the-scenes role in finally shuttering Golden Star’s modest office on 12 Kaiserstrasse in the Austrian capital. Until then, Vienna had been North Korea’s center for financial transactions in Europe and the Middle East. Visitors to North Korea have noted that euro coins in circulation in the country – the US dollar is not welcome in Pyongyang – invariably came from Austria. (Euro notes are the same in all European Union countries, but coins designate individual member countries.)

Last October, in response to Pyongyang’s nuclear tests, Japan froze a dollar-denominated account that North Korea’s Tanchon Commercial Bank held with an unnamed Japanese bank. The account had a balance of $1,000 and had not been active for nearly a decade, so the move was mainly symbolic: to demonstrate to North Korea that it cannot use banks in Japan for any deposits, big or small.

So it is hardly surprising that North Korea is looking for new ways to manage and maintain its international business interests and for new partners when it is increasingly locked out of most foreign countries. That is where Thailand apparently comes into the picture.

In 2004, trade between Thailand and North Korea for the first time overtook trade between Japan and North Korea. Previously, a string of North Korean-controlled front companies, managed by the Chosen Soren, or the Pyongyang General Association of Korean Residents in Japan, had supplied North Korea with computers, electronic goods and other vital items.

In 2003, North Korea’s total trade volume to Japan was just over $265 million and fell even lower in 2004. At the same time, trade between Thailand and North Korea rose to more than $331 million in 2004. Two-way trade between Thailand and North Korea totaled $328 million in 2005, with Thai exports to North Korea amounting to $207 million and North Korean imports to Thailand totaling $121 million.

During January-November 2006 – the latest statistics available from the Thai Customs Department – trade totaled about $345 million, with Thai exports accounting for $200 million and North Korean imports $145 million. Thai imports of gold and silver have pushed those trade figures higher.

North Korea’s trade with Thailand grew mainly under the previous government of Thaksin Shinawatra, who at one point proposed signing a free-trade agreement between the two countries. In August 2005, Thaksin was formally invited by Kim Jong-il to visit Pyongyang. The visit never materialized, and since Thaksin was ousted last year in a military coup, the future of Thai-North Korean relations is very much in doubt.

But gold and silver are highly fungible and North Korea apparently has lots of the commodities. It appears Kim Jong-il has for now found at least one golden path around the international sanctions imposed against his regime’s nuclear tests.

Posted in Chongryun, Copper, Daesong Group, Domestic publication, Gold, Graphite, International trade, Iron Ore, Mining/Minerals, Statistics, Tanchon Commercial Bank, Thailand, Trade Statistics, Zokwang Trading Company | Comments Closed

Who pays retail for DPRK media anymore?

Thursday, January 18th, 2007

Well, if you are tired of paying all those middlemen for your treasured copies of The Great Leadership for the Victory of Building the Powerful State or The Great Leader Kim Jong Il Gives on-the-Spot Guidance to Various Sectors (Part 11), then www.NKeconWatch.com would like to point out where you can get these and other fine publications right from the horses mouth: Korean Publications (their site is a little slow).

Posted in Domestic publication | Comments Closed

North Korea’s Kim wants to cancel handshakes

Wednesday, January 17th, 2007

NKeconWatch: I actually agree with Kim Jong Il with this one. Call me neurotic, but after shaking many peoples’ hands, I head straight for the sink at the first opportunity!

ITAR-TASS
1/17/2007

North Korean leader Kim Jong Il has urged his countrymen to abstain from shaking hands and greet people with a traditional Korean slight head bow.

The Rodon Sinmun newspaper published Kim’s article where he wrote in particular, “it is necessary to great each other Korean style. Handshake is a European custom and it is no good hygienically.”

However, a day after the publication many North Koreans, especially males, continued to shake hands as they used to do this before, a Tass correspondent reported from the capital of North Korea Tuesday.

Posted in Civil society | Comments Closed

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