2008 « North Korean Economy Watch

Archive for 2008

Russia sends fuel to DPRK

Wednesday, July 9th, 2008

According to Yonhap:

Russia will deliver another 100,000 tons of fuel oil to North Korea by October as a reward for the country’s shutdown of its nuclear power facilities, Itar-Tass news agency reported Wednesday, quoting a top Russian envoy to the six-party nuclear talks.

North Korea has been promised energy aid equivalent to a million tons of heavy fuel oil as part of economic and political rewards for declaring all its nuclear programs and disabling its main nuclear plants under a six-party deal on ending the North’s nuclear activities.

“We’ve fulfilled our promises — delivered 100,000 tons of fuel oil in two batches by the middle of the year,” Russian Deputy Foreign Minister Alexei Borodavkin was quoted as telling journalists in Beijing Wednesday. “We are preparing to fulfil our obligations further and send another 100,000 tons by October,” he said.

Read the full article here:
Russia to send more fuel oil to N.K. by October: report
Yonhap
7/9/2008

Posted in Energy, Foreign aid statistics, International Aid, Nuclear, Oil, Russia | Comments Closed

Some enterprising Swedes are attempting to manufacture and export jeans from North Korea. As far as western countries go, Sweden has been one of the leaders in commercial interaction with the DPRK. Although, according to Erik Cornell, they were frequently burned.

The project, Noko Jeans, would be the first jeans manufacturer in North Korea. Here is some info from their website:

Noko Jeans – jeans from North Korea

Noko Jeans began with an e-mail sent to North Korea, fueled by the enthusiasim of being able to contact the country directly. We thought Noko Jeans would end there, before it even began. It didn’t. Instead, and despite our lack of experience in international trading, it swiftly grew to a much more serious level.

Initiated and managed by three Swedes with a background in advertising and PR, Noko Jeans is our attempt to approach and get closer to North Korea, and it is our attempt to answer the question: is it possible to do what no one has ever done before? Is it possible to design, produce and import jeans from North Korea?

Greetings from North Korea!

After months of research, loads of headache and, lastly, several meetings with North Korean government representatives, we are finally allowed into the country. As official visitors, and by invitation of the state. Take off: 27th of July.

We are just now beginning to sense that this experiment actually might come true. Please stay with us as we tell you the unique process – and story – that is Noko Jeans.

Posted in Clothing, Economic reform, Foreign direct investment, International trade, Joint Ventures, Light Industry, Manufacturing, Sweden | 3 Comments »

Pyongyang Autumn International Trade Fair announced

Tuesday, July 8th, 2008

From the European Business Association (EBA) web site:

4th Pyongyang Autumn International Trade Fair
September 22nd – 25th, 2008, 9:30am-6:00pm
Further details here

Information flyer here: eba.pdf
Registration flyer here: registration.doc

The European Business Association (EBA) in Pyongyang issues this bulletin in order to inform about special conditions for participation by European businesses in the upcoming international trade fair in Pyongyang.

EBA Pyongyang and Korea International Exhibition Corporation (KIEC) will co-organise a special collective booth to host European businesses for the third time.

European companies interested in taking advantage of this opportunity are invited to visit the EBA website www.eba-pyongyang.org to see reports about the EBA booths in October 2007 and May 2008, which both were very successfull. Please also click through to membership and consider becoming a member of EBA.

The collective EBA booth has proven to be a convenient and cost-effective way to introduce European companies to the North Korean market. The participation fee is 600 or 700 Euro.

Posted in Chamber of Commerce (DPRK), European Business Association, Foreign direct investment, Joint Ventures, Ministry of Foreign Trade, Pyongyang International Trade Fair | Comments Closed

(Updated) Inter-Korean trade up this year

Tuesday, July 8th, 2008

According to Yonhap (citing a Ministry of Unification report), trade volume between the two Koreas increased 23% to US$880 million (up from $718.2 million) in the first half of 2008. This is due to an increase in commercial trade (not official exchanges), which were up 47% to $823.6 million from $558.7 million. Commercial trade comprises 94% of trade volume, up from 78% last year. The number of firms conducting inter-Korean trade reached 526, up from 324, and and they manufactured 736 items (up from 686).

Goods traded in larger volume than a year ago: plate glass, clams, brackens and textiles from the Kaesong complex.

(UPDATE) Much of this is due to brisk activity in the Kaesong Industrial Zone, which employs 30,084 North Koreans (as of July 4, 2008), up from 225 in 2004. The zone comprises 72 South Korean firms.

Total production at the complex has been on a steady rise from US$15 million at the end of 2005 to $373.8 million as of the end of May, up 147 percent from last year, the Kaesong Industrial District Management Committee said.

“Such a rise in production is notable in that 33 of the 72 firms in the complex are start-ups operating there for less than one year,” said Kim Min-kyong, a public relations official of the committee.

To learn more, read the full articles below:
Number of N.K. workers at Kaesong complex tops 30,000
Yonhap
Shim Sun-ah
7/8/2008

Inter-Korean trade rises sharply in first half despite political chill
Yonhap
Shim Sun-ah
7/7/2008

Posted in Economic reform, Foreign direct investment, International Aid, Joint Ventures, Kaesong Industrial Complex (KIC), Light Industry, Manufacturing, Price liberalization, RoK Ministry of Unification, Statistics, Trade Statistics | 1 Comment »

Korea Business Consultants Bulletin: June 2008

Monday, July 7th, 2008

Korea Business Consultants publishes a monthly newsletter. The June issue has languished in my “inbox,” but I have finally gotten around to posting the PDF.

The articles are on the following subjects:

Bush Responds to DPRK Nuclear Gesture
China Urges ROK to Loosen US Military Ties
“NK Orchestra May Play in US”
Foreign Funds Boosting NK Schools
Russia Donates Flour to DPRK
China Surges Ahead of ROK in DPRK Trade, Aid
DPRK Wants Japanese Funds for Gas Plant
DPRK, ROK, Russia to Build Power Project
“Lack of Fertilizer NK Farmers’ Biggest Headache”
N, S Educators Meet
Low–Key Celebrations of June 15 Summit
ROK Eyeing DPRK Iron Ore
ROK Offers Corn Aid to DPRK
“N-S Trade Surging”
“Solar Energy Park for DMZ”
China’s VP Xi Jinping Visits DPRK
NK Women Defend Boxing Titles
NK Bans Tobacco Ads
Golf Course Opens at Mt Kumgang
Striker Jong Dubbed “NK Wayne Rooney”
NK Women Win Asian Soccer Cup
Kumsusan Memorial Palace

Posted in Korea Business Consultants | Comments Closed

Aid Agencies to Deliver U.S. Food Assistance to DPRK

Sunday, July 6th, 2008

UPDATE: Below is a list of organizations that are distributing US aid in the DPRK:

Mercy Corps works amid disasters, conflicts, chronic poverty and instability to unleash the potential of people who can win against nearly impossible odds. Since 1979, Mercy Corps has provided more than $1.5 billion in assistance to people in 106 nations.

World Vision is a Christian humanitarian organisation dedicated to working with children, families and their communities worldwide to reach their full potential by tackling the causes of poverty and injustice. We serve all people, regardless of religion, race, ethnicity or gender.

Samaritan’s Purse provides immediate, no-red-tape response to the physical and spiritual needs of individuals in crisis situations, especially in locations where few others are working. The organisation is working in more than 100 countries to provide aid to victims of war, disease, natural disaster, poverty, famine and persecution.

Global Resource Services is dedicated to going beyond charity to find real solutions to complex global crisis where peace and security are in jeopardy. Our mission is driven by an end vision of reconciliation. Relationships, respect and reconciliation are the common threads that empower our cause.

Christian Friends of Korea (CFK) has been working since 1995 to bring hope and healing to the people of North Korea. To date, CFK’s efforts to build trust and relationships and meet real human needs at tuberculosis and healthcare facilities have resulted in the delivery of over $35 million USD in humanitarian assistance to the DPRK.

From the World Vision web page:

Five aid agencies today announced that they have signed an agreement with the Democratic People’s Republic of Korea to deliver U.S. government food assistance to North Koreans suffering from severe food shortages. The partnership will distribute 100,000 metric tons of food to more than a half-million needy people over a twelve-month period.

Mercy Corps is leading the programme, with World Vision as co-lead, pending final agreement. Partner agencies are Samaritan’s Purse, Global Resource Services and Christian Friends of Korea. Daily rations will be provided for approximately 550,000 vulnerable people – mostly children, the elderly and pregnant and nursing women – in two North Korean provinces. The programme, funded by the U.S. Agency for International Development’s (USAID) office of Food for Peace, is the first U.S. food assistance programme for North Korea since 2000.

ORIGINAL POST:
From the Mercy Corps web site (July 1, 2008):

Mercy Corps is taking the lead in a yearlong distribution of 100,000 metric tons of food to quell rampant hunger in North Korea.

We have been asked by the U.S. government to spearhead a partnership of five non-governmental organizations (NGOs) that will implement a major food assistance program for North Korean families. Distribution of the food aid – provided by the U.S. government and funded by the U.S. Agency for International Development’s (USAID) Food for Peace program – is taking place over the course of twelve months beginning in June 2008. Alongside our partner organizations, we will distribute food such as cereal grains, vegetable oils and beans through schools, hospitals, orphanages and other institutions.

…

Our food distribution programs are expected to reach more than 550,000 people – primarily children, the elderly and the extremely poor – in two provinces. We will have staff residing in North Korea to visit families, monitor distribution and assess impact.

Since 1996, Mercy Corps has promoted cross-cultural exchange and worked with the country’s vulnerable families and communities to help meet health and nutritional needs, as well as collaborate on long-term agricultural and economic solutions. Our late co-founder, Ells Culver, reached out to the North Korean people in the aftermath of drought, flooding and food shortages. That cooperation was strengthened last year when we hand-delivered $13 million of medicines for flood survivors, and earlier this year when we received a USAID grant to install emergency generators and medical equipment in six county hospitals.

Your gift to our Global Food Crisis fund will help us deliver assistance to even more families in some of the world’s most challenging places.

To learn more, visit their website (link).

To make a donation, click here.

To read the press release, see below:
Aid Agencies to Deliver U.S. Food Assistance to North Koreans
Reuters Alert Net
7/2/2008
Contact: Geraldine Ryerson-Cruz, +1.202.572.6302, [email protected]

Posted in International Aid, Mercy Corps, Samaritan's Purse, USA, World Vision | 2 Comments »

US ready to pay for more cooperation. DPRK claims it is owed arrears…

Saturday, July 5th, 2008

According to the Associated Press, the Bush administration is ready to pay $20 million to North Korea to complete the last 3 steps (of 12—not to be confused with these 12 steps) to permanently disable its Yongbyon nuclear reactor.

North Korea for its part, says it does not want to address future dismantling work until it receives the goodies it was promised for the first nine stages of Yongbyon decomission.

The North Korean Foreign Ministry said in a statement that it had disabled 80 percent of its main nuclear complex, but that the six countries involved in disarmament talks had made only 40 percent of the energy shipments they had promised. North Korea said it would move to the next phase of the denuclearization process, abandoning and dismantling its nuclear weapons programs, only when it has been awarded all the energy and political benefits it had been promised.

Read the full articles here:
US has $20M to disable NKorean reactor
Associated Press
7/4/2008

North Korea: Foreign Quid Wanted Before Providing the Nuclear Quo
Associated Press (via the New York Times)
7/5/2008

Posted in Energy, Ministry of foreign Affairs, Nuclear, USA | Comments Closed

DPRK small-scale private commerce and industry growing

Friday, July 4th, 2008

Institute for far East Studies (IFES)
NK Brief No. 08-7-4-1
7/4/2008

It appears that the number of people involved in handmade goods manufacturing, trading, and other small-scale, individual businesses is steadily increasing among North Korean citizens.

According to a source inside North Korea on June 30, ever since North Korean authorities announced the ‘Market Stimulation Measure’ in March 2003, the number of small-scale private businesses employing between 1~8 people has continued to grow as citizens in the North have taken to markets aggressively in order to earn money,

As the North’s economic woes continue to stretch over time and the government is unable to provide basic living necessities, the people are looking for other ways to support themselves.

In March of 2003, North Korea expanded farmers’ markets into general markets, allowing not only the sale of agricultural goods, but of manufactured goods as well. At the same time, the state introduced ‘market use fees’ for vendors wishing to rent space to hock their wares, thus bringing about a tax-like ‘state payment’.

Small-scale commercial and industrial businesses took on the form of family manufacturing or collaboration between factories, enterprises and engineers working together, but ‘Chinese-model’ small enterprises hiring just one or two workers also appeared.

In-home food preparation or handmade goods manufacturing, restaurants, bus services, repair work and other service-related industries grew. There also appeared examples of those leasing import rights from organizations or enterprises and making a living through trade.

Authorities have given these businesses tacit permission to operate, recognizing their role in increasing public revenue and supplying the people with daily necessities, but at the same time, they have laid down some restrictions, criticizing those “bitten by the capitalist bug, working only to make money for themselves.”

Small-scale private commerce and industry has the positive benefit of expanding the provision of daily necessities and absorbing unemployed labor in the North, but on the other hand, anti-socialist side effects such as the increasing gap between the rich and the poor and mammonism are also on the rise.

Posted in Economic reform, Fiscal & monetary policy, General markets (FMR: Farmers Market), Labor conditions/wages, Light Industry, Manufacturing, Market Stimulation Measure (March 2003), Price liberalization, Private property | Comments Closed

Kim Jong il steps up economic activities

Wednesday, July 2nd, 2008

Institute for Far Eastern Studies (IFES)
NK Brief No. 08-7-29-1
7/29/2008

Of North Korean leader Kim Jong Il’s public appearances during the first half of the year, fully half of them were to military installations or other defense-related sites, making it the most frequented sector, but compared to previous years, the number of visits to sites related to the economy rose considerably.

According to North Korean media sources, from January through June, Kim Jong Il made a total of 49 public visits. Of these, 25 (51%) were to military facilities, while 15 (31%) were to factories, cooperative farms, and other sites related to the nation’s economy. 3 (6%) public appearances were meetings with foreign dignitaries, and 6 (12%) were to public performances and other events.

In January, Kim made five on-site visits to economically important areas, after which there was a lull until May, when Kim appeared at six sites, and then made another 4 economy-related visits in June. In July, Kim has already made three visits to Jangan and North Pyongan Provinces, showing up at production facilities in those areas.

Between January and July of 2007, Kim made only six visits to sites related to the economic sector, less than a third the number of visits this year. In fact, with only 19 site visits for all of 2007, Kim’s appearances in the first half of this year have almost surpassed last year’s total, which itself was an increase over the 16 visits made in 2006.

The first public appearance made by Kim Jong Il in 2008 was at the Yaesung River Power Plant construction site on January 6, and was followed up by an appearance on January 21 the ‘18th National Program Contest and Exhibition’, emphasizing the government’s drive to resolve economic difficulties.

In the same month, Kim Jong Il visited a poultry and pork processing plant, a mushroom plant, a food processing facility, a rabbit breeding farm, and a youth mine, directly inspecting sites related to the lives and livelihoods of the people, appearing to emphasize the slogan announced in this year’s New Year’s Joint Declaration, “Prioritization of the People’s Lives”. Kim’s ‘economic walk’ was seemingly put on hold by a flurry of negotiations between the United States and North Korea regarding the North’s declaration of its nuclear programs and the attempt by the new South Korean government’s revamped policy towards North Korea between February and April, but then regained traction in May, with a visit on the 4th to a mountain orchard in Kangwon Province.

This year, Kim Jong Il’s on-site instructions at facilities related to building the economy and improving the lives of the people appear to be focused on stressing the need to resolve food shortages and ensure that everyone is fed.

Posted in Economic reform, Institute for Far Eastern Studies, Military, Political economy | Comments Closed

Factory in Kaesong complex closed down over dispute

Tuesday, July 1st, 2008

Excerpt from Yonhap:

A South Korean factory operating in the joint industrial complex in Kaesong has been closed for nearly 20 days over a feud with a North Korean controller, government and company officials said Monday.

The company, which employs around 300 North Korean workers, took the measure on June 12 after South Korean employees and North Korean officials scuffled over supplies, they said.

The firm demanded the North Korean authorities replace the North Korean controller who allegedly assaulted South Koreans in the fight, but the demand was not met.

It was not known exactly what caused the fight.

A total of 28,277 North Koreans were working for 70 South Korean labor-intensive manufacturers in Kaesong as of the end of May, according to the Unification Ministry.

Read the full article here:
Factory in Kaesong complex closed down over dispute
Yonhap
Shim Sun-ah
6/30/2008

Posted in Kaesong Industrial Complex (KIC), Labor conditions/wages | Comments Closed

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