Worker’s Party « North Korean Economy Watch

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Another one bites the dust

Wednesday, March 16th, 2011

UPDATE (3/17/2011): According to the Choson Ilbo:

A South Korean security official said, “Kim Jong-il had full confidence in Ju, as you can see from Ju’s recent meeting with his Chinese counterpart Meng Jianzhu in Pyongyang. It remains to be seen whether he’s also been dismissed from the NDC and the Politburo.”

The sacking could be either a sign of a generational shift related to the succession of power to Kim’s son and heir Jong-un or the result of an internal power struggle, a North Korean source speculated.

Another source said Ju may have taken the fall for recent isolated instances of public unrest.

ORIGINAL POST (3/16/2011): According to KCNA:

Ju Sang Song, minister of People′s Security of the National Defence Commission of the DPRK, was dismissed from his post due to illness.

The NDC of the DPRK released a decision on it on Wednesday.

Michael Madden has a biography of General Ju here.

Joseph Bermudez recently wrote an article for 38 North on the DPRK’s intelligence and security reorganization.

Posted in Military, Ministry of State Security (MPSS, NSA, SSD), National Defense Commission, Worker's Party | Comments Closed

DPRK issues KWP commemorative coins–now being traded

Wednesday, March 9th, 2011

UPDATE: The Daily NK (2011-3-7) reports that the DPRK’s recently minted commemorative coins have been been appearing in the markets:

Chosun Workers’ Party cadres who attended the Delegates’ Conference in Pyongyang on September 28th were each presented with a commemorative gold coin. Now, however, some of the same coins have begun to appear on the open market, according to a source from North Pyongan Province who spoke with The Daily NK on Sunday.

The commemorative coins were minted from gold, silver and nickel by the Chosun Central Bank, and form part of a tradition of coin presentation for state events or to commemorate notable national achievements which began with the 75th birthday of Kim Il Sung in 1987 and continued with the joint 50th anniversary of the Party founding and 50th anniversary of the liberation of the country from Japanese rule in 1995.

The money needed to obtain the raw materials for the 2010 coins was apparently gathered by Bukang Trading Company, which operates under the Workers’ Party.

“The Delegates’ Conference commemorative coins which have appeared on the market are mostly being sold by people who trade with China,” the source explained. “They are not pure gold, but there is a good amount of gold in them, so the price is reasonably high.”

Kim, who defected to South Korea in the second half of the 1990s, said that such coins used to be treated with the greatest of respect, explaining, “When I was in North Korea, I saw a number of commemorative coins. Even until the end of the 1990s, people looked after them at home as a precious thing and a source of great pride. The coin itself was evidence of a person’s status.”

However, recently people’s values have changed a great deal. The source from North Pyongan said, “In those days, even a starving man wouldn’t sell a ‘gift’ from the Suryeong or the General. But now, no matter how precious the gift may be, people will sell it in the market without a second thought.”

“Watches with Kim Il Sung’s name on and various commemorative coins do appear in the market sometimes,” he went on, adding, “Things which were beyond our wildest dreams in the olden days are becoming normal. Sellers point out, ‘What am I supposed to do with possession of this kind of thing?’ Having something to eat is better.”

More than being a simple indication of difficult economic times, the act of selling something which was intended to be thought of as a personal gift from a benevolent leader appears to present compelling evidence of the deteriorating authority of the regime and its control of social discipline. This seems to be particularly so given that the commemorative coins must be being sold by cadres, in theory the most loyal group of North Korean citizens and certainly one which needs to remain loyal if the regime is to maintain its grip on power in the long term.

ORIGINAL POST (2010-10-4): The DPRK is issuing gold and silver coins to commemorate the 65th anniversary of the founding of the Worker’s Party.

Images courtesy of Daylife.com.

Posted in General markets (FMR: Farmers Market), Gold, Mining/Minerals, Political economy, Worker's Party | Comments Closed

Office 38 reportedly back in business–and other changes

Sunday, February 20th, 2011

UPDATE 4 (2/20/2011): Kim Tong-un (김동은) named Kim Jong-il’s fund manager. According to Yonhap:

A senior official of North Korea’s ruling party has been named to lead a special party bureau, code-named Office 38, that oversees coffers and raises slush funds for its leader Kim Jong-il and the ruling elites, a source on North Korea said Sunday.

Kim Tong-un, formerly head of Office 39 in the Workers’ Party of Korea, assumed the post in May last year, when North Korea revived Office 38, which was merged with Office 39 in 2009, the source said on condition of anonymity. Office 39 is believed to be another organ that governs a wide network of business operations both legal and illegal.

Both Offices 38 and 39 belong to the Secretariat of the Workers’ Party, which Kim Jong-il chairs, according to a diagram of the North’s power structure released by the Unification Ministry, which handles inter-Korean affairs. Last year, the ministry had only included Office 39 in a similar diagram.

In a meeting with reporters last week, a ministry official said Office 38 has been spun off from Office 39 and is now running on its own again. The official, who would speak only on the condition of anonymity citing the sensitive nature of his comments, described “a stream of information” that has come through since mid-2010.

Office 38 mainly oversees transactions involving foreign currency, hotels and trade, the official said, while Office 39, headed by Jon Il-chun, drives revenue by dealing in narcotics, arms, natural resources and others.

The North’s revival of Office 38 is interpreted as an effort to cover the increasing cost of leader Kim Jong-il’s ceding of power to his youngest son, Jong-un.

The story was also reported in Yonhap.

UPDATE 3: Here are links to the Ministry of Unification‘s English language organization charts of the North Korean leadership in which some of the changes mentioned below are listed (though not all): Workers’ Party, State Organs, Parties and Organizations

UPDATE (2/15/2011): According to the Daily NK:

The number of Special Departments under the Secretariat of the Chosun Workers’ Party has been increased from 18 to 20, a move that includes the revival of the No. 38 Department, which previously served as Kim Jong Il’s private bank vault, and the foundation of a film department.

The Ministry of Unification revealed the news yesterday in its 2011 North Korean Power Structure and Index of Figures, Agencies and Organizations. It incorporates North Korean changes from December, 2009 up to the present day, completed after consultation with relevant agencies and experts.

The revival of the No. 38 Department and founding of a film department

The report states, “The No. 38 Department, which was merged with the No. 39 Department in 2009, was spun off again last year. Kang Neung Su, who was appointed Deputy Prime Minister in June of 2010, was introduced as head of the film department at the same time. The exact foundation date of the film department is unknown; however, it appears to be newly established.”

No. 38 and No. 39 Departments are directly controlled by Kim Jong Il and serve as a private vault for his ruling funds. The No. 38 Department manages hotels, foreign currency stores and restaurants etc, while illegal weapons trading through foreign trade companies, the smuggling of gold, illegal trade in drugs and the distribution of counterfeit dollars, so-called supernotes, are handled by the No. 39 Department.

“They combined two offices which had different functions, and it appears that this did not result in the intended efficiency,” a knowledgeable source commented.

Meanwhile, on the establishment of a film department, the source added, “North Korea’s cultural art is a political means by which to carry out Party policy and a policy tool to implant policy in the North Korean citizens.”

Among the reshuffled special departments, the existing ‘Munitions Industry Department’ has been renamed the ‘Machine Industry Department’, and the ‘Administration and Capital Construction Department’ has been scaled back to simply ‘Administration Department’.

Elsewhere, the existing National Resources Development and Guidance Department under the Ministry of Extractive Industries has been promoted to National Resources Development Council and, as reported, the Joint Investment Guidance Department rose to become the Joint Investment Committee, while the National Price Establishment Department became the National Price Establishment Committee. Again, as reported, the ‘People’s Safety Agency’ under the Cabinet became the People’s Safety Ministry under the National Defense Commission, while the Capital Construction Department was downsized to become the General Bureau of Capital Construction.

The Central Court and Central Prosecutors Office were also renamed the Supreme Court and Supreme Prosecutors Office respectively.

The Ministry of Unification report also notes that North Korea added Nampo City to its list of eleven cities and provinces, increasing the total number to twelve.

The newly designated Nampo City includes five former parts of South Pyongan Province; Gangseo, Daean, Oncheon, Yonggang, and Chollima districts. Previously, Nampo was under the direct control of the central government as part of South Pyongan Province proper.

At the same time, North Korea also transferred the existing Kangnam-gun, Joonghwa-gun, Sangwon-gun, and Seungho-district, all formerly southern sections of Pyongyang City, to North Hwanghae Province.

Military Commission placed under the Central Committee of the Party

The relationship of the Central Committee and Central Military Commission, which was formerly said to be in parallel, has been changed, reflecting the idea that the Military Commission is now under the Central Committee of the Party.

The Ministry of Unification commented, “By revising the Party regulations, the Central Military Commission and Central Committee were marked as parallel in 2009 and 2010. However, after confirming the revised Party regulations at the Chosun Workers’ Party Delegates’ Conference on September 28th last year, this relationship was adjusted, and an election is now held for the Central Military Commission via a plenary session of the Central Committee.”

Also, the ‘Bureau of General Staff’ under the National Defense Commission was judged to be below the Ministry of the People’s Armed Forces, but is now shown to be in a parallel relationship with the Ministry of the People’s Armed Force and ‘General Political Department’.

ORIGINAL POST (2/14/2011): According to Yonhap:

North Korea has revived a special party bureau, codenamed Office 38, that oversees coffers and raises slush funds for its leader Kim Jong-il and the ruling elites, South Korea said Monday in its annual assessment of the power structure in the communist country.

In 2009, the bureau had been merged with Office 39, another organ that governs a wide network of business operations both legal and illegal, according to the Unification Ministry in Seoul.

In a meeting with reporters, however, a ministry official said Office 38 has been spun off from Office 39 and is now running on its own again. The official, who would speak only on the condition of anonymity citing the intelligence nature of his comments, cited “a stream of information” that has come through since mid-2010.

The official would not elaborate on how the information has been obtained, only saying the ministry works closely with “related government bodies” to outline the North’s power structure.

Office 38, whose chief remains unknown, mainly oversees transactions involving foreign currency, hotels and trade, the official said, while Office 39, headed by Jon Il-chun, drives revenue by dealing in narcotics, arms, natural resources and others.

A source privy to North Korea matters said the spin-off suggests that North Korea has been experiencing difficulties in earning foreign currency since merging the two offices.

“Efficiency was probably compromised after the two, which have different functions, were combined,” the source said, declining to be identified citing the speculative nature of the topic. “More importantly, it seems related to the current state of foreign currency stocks. The North is apparently trying to address those difficulties.”

In August last year, the United States blacklisted Office 39 as one of several North Korean entities to newly come under sanctions for involvement in illegal deeds such as currency counterfeiting.

North Korea is also believed to have been hit hard financially after South Korea imposed a series of economic penalties last year on Pyongyang when the sinking of a warship was blamed on it.

Both Offices 38 and 39 belong to the Secretariat of the Workers’ Party, which Kim Jong-il chairs, according to a diagram of the North’s power structure released by the Unification Ministry. Last year, the ministry had only included Office 39 in a similar diagram.

Both offices have often been referred to as Kim Jong-il’s “personal safes” for their role in raising and managing secret funds and procuring luxury goods for the aging leader.

Read the full story here:
North Korea Splits No. 38 and 39 Departments Up Again
Daily NK
Kim So Yeol
2/15/2011

N. Korea revives ‘Office 38’ managing Kim Jong-il’s funds: ministry
Yonhap
Sam Kim
2/14/2011

Posted in Administration Department, Banking, Bureau 38, Bureau 39, Film, Finance, Fiscal & monetary policy, General Bureau of Capital Construction, International trade, Joint Venture Investment Committee (JVIC), Machine Industry Department, Ministry of People’s Security (Criminal Police), National Price Establishment Committee, National Resources Development Council, Secretariat, Supreme Court | 1 Comment »

KJU supporter takes over Rajin-Sonbong (Rason)

Monday, February 14th, 2011

According to the Donga Ilbo:

North Korea has reportedly appointed Vice Trade Minister Jo Jong Ho as chairman of a civic committee for Rajin-Sonbong Special City, a major post in the North, to succeed Kim Su Yol, who was dismissed late last year.

Jo is a member of a group that supports Kim Jong Un, the youngest son of North Korean leader Kim Jong Il and heir apparent, and reportedly has helped set the North’s new economic policy.

A source on North Korean affairs said Sunday, “Jo Jong Ho has been named the new chairman of the people’s committee, a post which has remained vacant after the dismissal of former chairman Kim due to sluggish foreign investment.”

“Since Jo used to work with former Trade Minister Im Kyong Man, chief secretary of the ruling Workers’ Party for Rason City, he will likely enjoy a harmonious working relationship with Im.”

Pyongyang has apparently deployed a key member of the power elite among supporters’ groups of Kim Jong Un to an important economic region to lay the foundation for a successful power succession based on economic achievements.

The source said, “The North deployed a Kim Jong Un supporter at a time when Pyongyang is striving to establish the structure for power succession,” adding, “Since Jo is fluent in English, activities to attract foreign investment from overseas enterprises will likely gather momentum.”

Read the full story here:
NK appoints heir apparent`s supporter to key post
Donga Ilbo
2/14/2011

Posted in Ministry of Foreign Trade, Rason Economic and Trade Zone (Rajin-Sonbong), Special Economic Zones (Established before 2013), Worker's Party | Comments Closed

North Korea increasing coal production – seeking to ease power shortages and boost exports

Wednesday, February 2nd, 2011

Pictured Above: Pongchon Coal Mine (Google Earth)

Institute for Far Eastern Studies (IFES)
NK Brief No. 11-01-18
1/28/2011

The DPRK Workers’ Party’s newspaper, the Rodong Sinmun, recently featured a front-page editorial urging the North Korean people to increase coal production. On January 26, the KCNA reiterated the call, reporting that the newspaper editorial highlighted fertilizer, cotton, electricity, and steel as products suffering from a lack of coal, and that “coal production must be quickly increased in the Jik-dong Youth Mine, the Chongsong Youth Mine, the Ryongdeung Mine, the Jaenam Mine, Bongchon Mine [Pongchon Mine] and other mines with good conditions and large deposits.”

The editorial also emphasized that “priority must be placed on the equipment and materials necessary for coal production,” and, “the Cabinet, national planning committee, government ministries and central organizations need to draft plans for guaranteeing equipment and materials and must unconditionally and strongly push to provide,” ensuring that the mines have everything they need. It also called on all people of North Korea to assist in mining endeavors and to support the miners, adding that those responsible for providing safety equipment for the mines and miners step up efforts to ensure that all necessary safety gear is available.

In the recent New Year’s Joint Editorial, coal, power, steel and railways were named as the four ‘vanguard industries’ of the people’s economy. Of the four, coal took the top spot, and all of North Korea’s other media outlets followed up the editorial with articles focusing on the coal industry. On January 15, Voice of America radio quoted some recent Chinese customs statistics, revealing that “North Korea exported almost 41 million tons of coal to China between January and November of last year, surpassing the 36 million tons exported [to China] in 2009.” It was notable that only 15.1 tons were exported between January and August, but that 25.5 tons were sent across the border between August and November.

North Korea’s coal exports to China earned it 340 million USD last year, making the coal industry a favorite of Pyongyang’s economic and political elites. Increasing coal production is boosting output from some of the North’s electrical power plants, while exports to China provide much-needed foreign capital. However, even in Pyongyang, where the electrical supply is relatively good, many houses lack heating and experience long black-outs. Open North Korea Radio, a shortwave radio station based in the South, reported on January 24, “As electrical conditions in Pyongyang worsen, now no heating is available.” Farming villages can find nearby timber to use as firewood, but because prices are so high in Pyongyang, even heating has become difficult. Some in the city even wish for rural lifestyles, just for the access to food and heat.

Posted in Cabinet, China, Coal, Domestic publication, Energy, Google Earth, International trade, Mining/Minerals, Planning and Fiscal Affairs (KWP), Railways, Statistics, Trade Statistics, Transportation | Comments Closed

Worker’s Party revises charter

Saturday, January 22nd, 2011

According to Voice of America:

North Korea has revised the charter of its only political party, apparently to ensure a smooth transition of power from father to son in the reclusive communist state.

VOA correspondent Steve Herman has obtained a copy of the document, which has not been made public in or outside North Korea.

It is worth pointing out that although the Worker’s Party is the only one that matters, technically it is not the only political party in North Korea. There is also the Korean Social Democratic Party and the Chondoist Party.

Here is a PDF of the new charter. I am afraid th my Korean is not that good and I do not have a copy of the former charter. If anyone can do or find a comparison, I would like to see it.

Posted in Kim Jong Un, Political economy, Worker's Party | Comments Closed

DPRK, NGO to film Paek Son Haeng film

Monday, January 17th, 2011

Pictured above: Paek Son Haeng Memorial Hall, Pyongyang (Google Earth)

According to the Daily NK:

North Korea has apparently agreed to accept foreign funding to produce a movie which shows Christians in a positive light. It will be the first movie made in North Korea to show the life story of a Christian.

An activist working in New Zealand for “Team and Team International”, a South Korean NGO working on international disaster relief, reported today, “A North Korean movie import-export company (Chosun Movie Company) has decided to produce a movie, ‘Paek Sun Haeng’, with the support of an organization from New Zealand,” and added, “They are at the last stage of working on the scenario and plan to start filming this coming September.” A budget production, it will cost a reported $1.5 million.

The activist said that the two sides have agreed to show the movie in movie theaters across the country and on Chosun Central TV. The purpose behind the investment is apparently to depict the positive side of Christianity and Christians to the North Korean people.

He explained, “Based on the idea that the figure, Baek Sun Haeng, has been defined as a good capitalist in North Korea, the organization has been negotiating production of a movie about her with North Korea since 2008.” Additionally, he said “They will describe fully the image of Baek as a philanthropist as well as a Christian in the movie.”

The scenario was reportedly written by the head of Chosun Movie Company, Choi Hyuk Woo, but there has been conflict over the degree of Christian content.

The source explained, “Problems when the North Koreans tried to change one line or scene have not been small.” However, “They were able to persuade the North Korean staff by sticking stubbornly to the fact that it would have been impossible to invest in the movie without Christian content.”

North Korea’s bad situation vis a vis foreign currency may have influenced the North’s decision-making, the source agreed, saying, “I am aware that North Korea’s internal capital situation is rather difficult. That economic difficulty may have influenced this contract somewhat.”

Chosun Movie Company oversees the export and import of movies under the Culture and Art Department of the Propaganda and Agitation Department, which is within the Central Committee of the Party.

The activist emphasized, “Aid activities for North Korea should give dreams and hope for new things to the North Korean people through diverse cultural approaches beyond food or essential aid.”

The movie’s main character, Baek Sun Haeng (1848-1933) is a well-known philanthropist in North Korea who has been mentioned in North Korean textbooks, in Kim Il Sung’s memoirs and elsewhere.

After her husband died when she was 16 years old, she is said to have accumulated wealth relentlessly. After that, she built both “Baek Sun Bridge” across the Daedong River and a three-story public meeting hall in Pyongyang. She also donated real-estate for Pyongyang Gwangsun School and Changdeok School.

Baek, as the deaconess of a church, also contributed to the education of Korean Christians by donating capital and land for Pyongyang Presbyterian Church School, which was built by Rev. Samuel Austin Moffett, the then-reverend at the First Church of Pyongyang, and Soongsil School, the forerunner to Soongsil University in Seoul, which was established by Dr. W. M. Baird, an American missionary, in Pyongyang on October 10th, 1887.

Additionally, she dedicated all of her property to an organization dedicated to the relief of poverty in 1925, so the Japanese government general tried to present her with a commendation, but she refused it. Therefore, she has been praised highly as a “people’s capitalist” in North Korea.

In 2006, the North Korea media reported that an existing monument to Baek had been restored and moved into “Baek Sun Haeng Memorial Hall” in Pyongyang on the instructions of Kim Jong Il.

Read the full story here:
Christian Movie Being Shot inside North Korea
Daily NK
1/17/2011

Posted in Agitation and Propaganda Department, Art, Film, Google Earth, New Zealand, Religion | 1 Comment »

Worker’s Party regulations revised

Thursday, January 6th, 2011

According ot Yonhap:

In an apparent bid to facilitate its hereditary power succession, North Korea has rewritten major regulations governing its ruling party, allowing its leader-in-waiting to take full control of the state with greater ease, a government source said Thursday.

The revisions were approved at the landmark convention of the top Workers’ Party delegates in September, during which Kim Jong-un, the youngest son of leader Kim Jong-il, rose as a vice chairman of the Central Military Commission, the source said.

“The revisions paved the way for the Kims to monopolize every part of the North Korean system while making it official that the country is a dynasty,” the source said, asking not to be named because of the intelligence nature of the documents he cited.

North Korea removed a clause that made it mandatory for the party to hold a general convention every five years, the source said. Instead, the party can now elect senior members and revise its regulations just by holding a top delegates’ meeting.

“Another measure that makes it easy for Kim Jong-un to take power is to automatically appoint the party secretary as head of the Central Military Commission,” the source said, adding that the move suggests Kim Jong-un, a four-star general, may be on track to succeeding his father as party secretary.

“This allows Kim Jong-un to control both the party and the military just by rising to the top of the party, the source said.

Kim is believed to be no older than 28. His birthday is this Saturday, Jan. 8.

The Central Military Commission within the party has also been given more power, the source said, as it now “governs all defense and military programs conducted between each party convention.”

The revision signals that the commission may grow more powerful than the National Defense Commission, the highest seat of power headed by Kim Jong-il but not yet joined by Kim Jong-un, he said.

Read the full story here:
N. Korea rewrites party regulations to boost hereditary power succession: source
Yonhap
Sam Kim
1/6/2011

Posted in Central Committee, Central Miltary Committee, Worker's Party | Comments Closed

Pyongyang 1946 and today

Sunday, January 2nd, 2011

I recently came across this map of Pyongyang printed in 1946:

Click map to see full size version

According to the map, it is “For use by War and Navy Department Agencies only. Not for sale or distribution”.

I thought it would be fun to add the map to Google Earth so I could compare the pre-Korean War city infrastructure with what we see today. Some interesting information emerges:

1. The Omura Silk Mill is now the Kim Jong Suk Pyongyang Silk Mill. Satellite image here.

2. The Kanegajuchi Spinning Mill is now the Pyongyang Textile Mill. Satellite image here.

3. Fuji Iron Works is now the Pyongyang Cornstarch Factory. Satellite image here.

4. What was the Pyongyang Airport is now Taedonggang-district in East Pyongyang.

5. Much of what we call the “Forbidden City” (Korean Workers Party Offices) were military barracks.

6. The former Pyongyang Medical College is now … the Kim Il-sung University College of Medicine. Satellite image here.

7. The Supreme People’s Assembly sits on the grounds of the former Pyongyang Women’s Prison.

8. The Namsan School was torn down and is now either the Organization and Guidance Department (according to one defector) or the Democratic Women’s Union Hall. Satellite image below:

I also might have discovered several Japanese colonial-era prisons that may very well still be prisons and/or factories. According to the map, this was the shape of the Pyonysang (Heijo) Prison:

There are a handful of buildings in the DPRK which still retain this distinctive shape (or the obvious remnants of this shape)—as well as walls and guard towers. They are in Phyongsong, Hamhung, and Sariwon:

I have made the 1946 map available as a Google Earth download. You can obtain the KMZ file by clicking here. Please let me know if you make any interesting discoveries of your own.

By coincidence, Andrei Lankov wrote an article about the history of Pyongyang last week in the Korea Times (as I was comparing the maps). According to the article:

Pyongyang enjoyed boom in colonial era
Korea Times
Andrei Lankov
12/30/2010

This city is long gone. No, it is still on the maps, and all our readers know its name ― Pyongyang, the capital of the Democratic People’s Republic of Korea.

But the Pyongyang of the Kims’ dynasty does not have much to do with the old city, wiped out in the social turmoil of the late 1940s and inferno of the American bombing of the early 1950s.

People who nowadays inhabit the North Korean capital, are overwhelmingly newcomers, and not much physical evidence is left from the city past.

It was once a capital of Goguryeo, one of the three ancient kingdoms which fought over the domination of the Korean Peninsula in the first centuries of the Christian era. Pyongyang remained important for centuries. During the Joseon Kingdom (1392-1910) it was the second or third largest city in the entire country.

The city remained surrounded by the stone walls which by the 1890s had been in a state of disrepair for a long time (they had lost any military significance since a much earlier date, one has to admit). The majestic Taedong Gate, facing the river, was seen as a masterpiece of traditional architecture.

Throughout the colonial period, the city’s population increased from 40,000 around 1910 to 285,000 in 1940. It was roughly one third of the then size of Seoul, but this still made Pyongyang one of the largest cities in the nation.

As was the case with nearly all major cities of both the to-be North and to-be South, the railway was instrumental in Pyongyang’s growth.

Pyongyang was located straight on the Busan-Seoul-Sinuiju line, built in the early 1900s. This line became a backbone of the country’s transportation network, and old cities which were bypassed by this railway, eventually went into decline. Pyongyang was lucky to avoid such a fate.

Nowadays Pyongyang Station is located close to the center of the North Korean capital. However, in the early 1900s it was located some distance away from the old walled city, so the space between the station and walls became a new part of Pyongyang, with rectangular grid of streets and the numerous houses of the Japanese settlers who comprised about 13 percent of the city population in 1945.

The army barracks and a large military area appeared near the station as well. Meanwhile, the Koreans were left within the space once occupied by the old walled city.

The fast growth of the city made public transportation necessary, and indeed in May 1923 a tram service ― or “streetcars” as Americans would say ― was introduced, to remain in operation until the autumn of 1950 (the present-day tram system was built anew in the early 1990s, and has no continuity with the old trams of the colonial era).

Since time immemorial and until the late 1920s, Pyongyang was located on the eastern (left) bank of the Taedong River, but from the late 1920s the city crossed to the opposite bank as well.

In 1921, an airfield was built there, to be used by both the Japanese air forces and civilian planes which landed there for re-fueling on their way from Japan to China and back. This airfield, located roughly where the “embassies quarter” is now, remained in operation until the late 1950s, if not longer.

Pyongyang underwent a major industrial boom in the colonial era. Huge coal deposits were discovered around the city, so by the 1920s the mines of the Pyongyang area provided about a half of all coal produced in Korea. This economy of the era was largely an economy of coal and steel, so these mines attracted heavy industry.

The Mitsubishi Group built a large steel mill in Nampo, not far away from Pyongyang. Another major consumer of high-quality coal was the Imperial Navy ― and the ship engines of the era were very demanding when it came to the coal quality.

Pyongyang itself also had a number of smaller businesses, including textile and footwear factories. Their presence also meant a presence of powerful labor unions, so Pyongyang was a place of some of the largest strikes of the period.

For the Koreans of the colonial time, Pyongyang was a city of Christianity. Indeed, Protestants constituted up to 25-30 percent of its population.

In a time when nationwide the share of Christians did not exceed 1 percent, this was a truly remarkable figure. This implied a large missionary presence but also existence of first-class educational facilities: Protestant schools played a major role in introducing modern science and technology to Korea.

The result was strength of the nationalist movement then closely associated with Christianity. Contrary to what one might expect, prior to 1945 Pyongyang was a stronghold of the nationalist Right while the Communists position appeared much stronger in Seoul.

The city also boasted a number of museums, including a large archeological museum with the findings made during the excavations of the 1920s.

Not much is left of that city. Most of Pyongyang’s population left in 1945-53, fleeing either religious persecution by the new regime or U.S. bombing raids. These raids virtually wiped the city off the face of earth, so in the mid-50s Pyongyang was built anew without any references to the then rejected past.

A few historical monuments of ancient times have been restored (or rather built), but almost nothing has survived from the colonial era Pyongyang. Only the old Taedonggyo Bridge still crosses the river, handling a large part of very heavy Pyongyang traffic.

Posted in Bureau 39, Construction, Google Earth, Organization and Guidance Department, Worker's Party | 5 Comments »

Daedong Credit Bank Press Release

Monday, December 20th, 2010

On November 18, 2010, the US Treasury Department issued the following press release:

Treasury Designates Key Nodes of the Illicit Financing Network of North Korea’s Office 39

WASHINGTON – The U.S. Department of the Treasury today designated Korea Daesong Bank and Korea Daesong General Trading Corporation pursuant to Executive Order (E.O.) 13551 for being owned or controlled by Office 39 of the Korean Workers’ Party. Office 39 is a secretive branch of the government of the Democratic People’s Republic of Korea (North Korea) that provides critical support to North Korean leadership in part through engaging in illicit economic activities and managing slush funds and generating revenues for the leadership. Office 39 was named in the Annex to E.O. 13551, issued by President Obama on August 30, 2010, in response to the U.S. government’s longstanding concerns regarding North Korea’s involvement in a range of illicit activities, many of which are conducted through government agencies and associated front companies. Korea Daesong Bank is involved in facilitating North Korea’s illicit financing projects, and Korea Daesong General Trading Corporation is used to facilitate foreign transactions on behalf of Office 39.

“Korea Daesong Bank and Korea Daesong General Trading Corporation are key components of Office 39′s financial network supporting North Korea’s illicit and dangerous activities,” said Under Secretary for Terrorism and Financial Intelligence Stuart Levey. “Treasury will continue to use its authorities to target and disrupt the financial networks of entities involved in North Korean proliferation and other illicit activities.”

E.O. 13551 targets for sanctions individuals and entities facilitating North Korean trafficking in arms and related materiel; procurement of luxury goods; and engagement in certain illicit economic activities, such as money laundering, the counterfeiting of goods and currency, bulk cash smuggling and narcotics trafficking. As a result of today’s action, any assets of the designated entities that are within U.S. jurisdiction are frozen and U.S. persons are prohibited from conducting financial or commercial transactions with these entities.

You can learn more about the Treasury’s press release here.

Here is the US Treasury Department’s new North Korea resource page.

In response, the Daedong Credit Bank issued the following press release:

FOR IMMEDIATE RELEASE:

US Treasury Press Release 18th November 2010

London UK/Pyongyang DPRK, December 20th 2010

Daedong Credit Bank (DCB) has noted the press release of 18th November 2010 by the US Treasury and makes the following comments:

1.    Korea Daesong Bank (KDB) is a 30% shareholder in DCB. DCB is not, and never has been, aware of any activity by KDB which is in breach of any of its obligations, domestic or international. In particular, DCB is not aware of KDB having acted in breach of any sanctions. DCB is not aware of any cause of concern about the conduct of KDB.

2.    KDB has no executive control of DCB.

3.    DCB is majority owned by overseas investors and is foreign-managed.

4.    DCB does not act and has never acted in breach of any of its domestic or international obligations. DCB acts in a manner consistent with domestic and international law.

5.    DCB is apolitical and promotes foreign investment in the DPRK as a positive development.

The Daedong Credit Bank looks forward to playing a significant part in facilitating normal commercial relationships between the DPRK and the international business community.

About Daedong Credit Bank

Daedong Credit Bank is a joint venture retail bank based in Pyongyang. It was established in 1995 as “Peregrine Daesong Development Bank”. The Bank underwent a change of name and foreign ownership in 2000.

Daedong Credit Bank is the first, by fifteen years, foreign majority held bank in the DPRK. DCB considers itself a flagship successful joint venture in the DPRK, and a key part of the infrastructure needed to assist the foreign-invested ventures, which drive the country’s economic reforms.

The bank’s principal function is to offer normal “high street” banking facilities in hard currency to; foreign companies, joint ventures, international relief agencies and individuals doing legitimate business in the DPRK.

Daedong Credit Bank was the first bank in the DPRK to introduce, and vigorously implement, a comprehensive set of anti-money laundering procedures. DCB’s anti-money laundering procedure manual was introduced seven years ago, and subsequently updated based on anti-money laundering guidelines provided by the Asian Development Bank. The manual has been sent to, and accepted by, DCB’s international correspondent banks.

Daedong Credit Bank also maintains strict procedures for the detection and rejection of counterfeit bank notes; it uses regularly updated note checking machines, and has personnel with over 10 years’ of experience of handling notes. DCB have encountered and impounded the so-called ‘superdollar’ notes, proving that these notes (despite media misconceptions) are not undetectable.

The wealth of experience garnered over Daedong Credit Bank’s 15 years of successful operation is unrivaled.

Daedong Credit Bank has a significantly strong position in relation to the future economic development of the DPRK and, being the oldest established foreign invested commercial bank in the DPRK, it is the intention of the bank to capitalise on these advantages.

CONTACT INFORMATION:

Daedong Credit Bank office address in Pyongyang is:

Daedong Credit Bank
401, Potonggang Hotel
Ansan-dong
Pyongchon District
Pyongyang
Democratic People’s Republic of Korea

Phone Switchboard +850 2 381 2228/9    ext 401
Direct line     +850 2 381 4866
Mobile          +850 193 801 8400 *
*Note, the mobile number may not be obtainable from certain countries (eg UK and Hong Kong).
Corporate Website www.daedongcreditbank.com

FOR IMMEDIATE RELEASE:

US Treasury Press Release 18th November 2010

London UK/Pyongyang DPRK, December 20^th 2010

Daedong Credit Bank (DCB) has noted the press release of 18th November 2010 by the US Treasury and makes the following comments:

1. Korea Daesong Bank (KDB) is a 30% shareholder in DCB. DCB is not, and never has been, aware of any activity by KDB which is in breach of any of its obligations, domestic or international. In particular, DCB is not aware of KDB having acted in breach of any sanctions. DCB is not aware of any cause of concern about the conduct of KDB.

2. KDB has no executive control of DCB.

3. DCB is majority owned by overseas investors and is foreign-managed.

4. DCB does not act and has never acted in breach of any of its domestic or international obligations. DCB acts in a manner consistent with domestic and international law.

5. DCB is apolitical and promotes foreign investment in the DPRK as a positive development.

The Daedong Credit Bank looks forward to playing a significant part in facilitating normal commercial relationships between the DPRK and the international business community.

About Daedong Credit Bank

Daedong Credit Bank is a joint venture retail bank based in Pyongyang. It was established in 1995 as “Peregrine Daesong Development Bank”. The Bank underwent a change of name and foreign ownership in 2000.

Daedong Credit Bank is the first, by fifteen years, foreign majority held bank in the DPRK. DCB considers itself a flagship successful joint venture in the DPRK, and a key part of the infrastructure needed to assist the foreign-invested ventures, which drive the country’s economic reforms.

The bank’s principal function is to offer normal “high street” banking facilities in hard currency to; foreign companies, joint ventures, international relief agencies and individuals doing legitimate business in the DPRK.

Daedong Credit Bank was the first bank in the DPRK to introduce, and vigorously implement, a comprehensive set of anti-money laundering procedures. DCB’s anti-money laundering procedure manual was introduced seven years ago, and subsequently updated based on anti-money laundering guidelines provided by the Asian Development Bank. The manual has been sent to, and accepted by, DCB’s international correspondent banks.

Daedong Credit Bank also maintains strict procedures for the detection and rejection of counterfeit bank notes; it uses regularly updated note checking machines, and has personnel with over 10 years’ of experience of handling notes. DCB have encountered and impounded the so-called ‘superdollar’ notes, proving that these notes (despite media misconceptions) are not undetectable.

The wealth of experience garnered over Daedong Credit Bank’s 15 years of successful operation is unrivalled.

Daedong Credit Bank has a significantly strong position in relation to the future economic development of the DPRK and, being the oldest established foreign invested commercial bank in the DPRK, it is the intention of the bank to capitalise on these advantages.

CONTACT INFORMATION:

Daedong Credit Bank office address in Pyongyang is:

Daedong Credit Bank
401, Potonggang Hotel
Ansan-dong
Pyongchon District
Pyongyang
Democratic People’s Republic of Korea

Phone

Switchboard +850 2 381 2228/9 ext 401
Direct line +850 2 381 4866
Mobile +850 193 801 8400 *
*Note, the mobile number may not be obtainable from certain countries (eg UK and Hong Kong).

Corporate Website www.daedongcreditbank.com

#004

Posted in Banking, Bureau 39, Daedong Credit Bank, Daesong Bank, Daesong-BAT JV Company, Finance, Foreign direct investment, USA | Comments Closed

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