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Kalma Coastal Tourist Area Update

Thursday, March 15th, 2018

Planet Labs (@planetlabs) has posted some March 2018 imagery of construction of the Kalma Coastal Tourist Area construction site which help bring the project into greater focus.

There appear to be two staging areas for the construction site where workers live and supplies are stored.

Below are close-ups of the two large staging areas circled in yellow in the image above:

 

I overlaid recent Planet images onto Google Earth and outlined the building and facility construction site. The coastal resort is taking place in the area outlined in yellow below:

Here are a couple of Planet images of the construction site where we can see a few building foundations have been set:

I believe this project is supposed to be completed in about a year, so it will be worthwhile to check in on it periodically with Planet images to see how the project is developing.

See previous (and updated) blog post on this topic here.

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Posted in Construction, Economic Development Zones (2016), Special Economic Zones, Wonsan-Kalma Coastal Tourist Area | Comments Closed

North Korean markets insulated from sanctions, but not forever

Wednesday, March 7th, 2018

Posted by Benjamin Katzeff Silberstein

Analysis at Daily NK:

In 2017 alone, the United Nations Security Council passed four major sanctions resolutions against North Korea: Resolutions 2356, 2371, 2375, and 2397. Under the measures, the North’s crude oil imports were restricted, and coal and mineral exports were banned. Additionally, the North was prohibited from sending its laborers to work abroad – one of the key ways in which the regime earns foreign currency.
“One cannot say that, on a macro level, sanctions against North Korea have been ineffective,” said Lee Seok Ki, a senior researcher at the Korea Institute for Industrial Economics and Trade (KIET). “Since around August or September of 2017, the North’s exports have dropped significantly, and we have seen a major impact from sanctions on their industrial output. The country’s anthracite (coal) exports are down 66% compared to the previous year, which is a devastating hit to their mining sector, and the trend is expected to continue.”
Lee added that while most indicators point to declining imports, it remains difficult to conclude that sanctions have had the same effect on the North Korean manufacturing sector. Despite this, Lee noted that “sanctions are having an effect on the trade sector and we will continue to see both quantitative and qualitative effects in the long term.”
Other experts support the opinion that sanctions are working against the North’s overall trade. “North Korea’s exports to China are down 37%, which has led to a further 1.8% drop in growth for the North’s economy over the last year,” said Kim Byung Yeon, a professor at the Department of Economics at Seoul National University.
“If the North is unable to get sanctions lifted, the growth rate for their economy could drop to as low as minus 5% in the next year,” Kim added, explaining that the effects on economic growth will be significant due to the structure of the North’s economy and the relatively high proportion that exports contribute to it.
Kim said that citizens working in the trade sector have been most affected by sanctions, though he points to the government as taking the most damage. “Most trade has been conducted by state-owned and party- or military-run companies, meaning that the elite class and government officials take a big hit from sanctions,” Kim said. “Kim Jong Un relies heavily on trade as a source of income (for his regime), which means that the person most impacted by sanctions is none other than Kim Jong Un.”
But while sanctions appear to be having a significant effect on the North’s trade and industry, experts are noting that the local markets in the country have not been affected as heavily.
“When you look at the price of rice or the exchange rate over time, it’s hard to see any major effect of sanctions (on local markets),” KIET researcher Lee said.
Daily NK’s own research has come to the same conclusion, finding that the price of rice in North Korea’s markets has remained steady at around 4,000 to 5,000 KPW per kg since the beginning of the recent surge in international sanctions.
“People have been relying on themselves, actively participating in the markets and smuggling since the end of the Arduous March (great famine of the 1990s), which means that sanctions do not yet seem to be having an effect on the markets,” said a source in North Hamgyong Province, pointing to the steady availability of consumer goods as evidence.
“Kim Jong Un has instituted improvements in the quality of domestic-made goods, leading to these products in many cases pushing out Chinese versions from the markets,” said Lee Geun Young, Professor at the Yanbian University Department of Political and Public Administration. “There are now fewer items being brought in from China, so these products are having less influence on market prices.”
However, experts also believe that the damage inflicted by sanctions will inevitably reach the markets. “It’s not easy to precisely predict when the effect of sanctions will reach the markets,” Professor Kim said. “But one thing is clear: because many items rely on some form of importation, the long-term effects of a continuing decline in trade will inevitably lead to a reduction in the volume of available goods and a decrease in consumer purchasing power.”
Article source:
North Korean markets insulated from sanctions, though not forever
Jang Seul Gi
Daily NK
2018-03-07
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Posted in Agriculture, China, Economic reform, International trade, Political economy, South Korea | Comments Closed

North Korea’s largest overseas restaurant closed down

Friday, February 16th, 2018

By Benjamin Katzeff Silberstein

The largest of North Korea’s overseas restaurants has closed, and its workers have gone home, reports Daily NK. Those formerly employed in North Korea’s overseas joint ventures abroad, and as overseas labor with other companies, have been returning home in stages since sanctions passed by the UNSC last September forbade joint ventures with North Korea.

These restaurants are (were?) an interesting phenomenon. I’ve visited them in Vietnam, Cambodia, and China, and the last time I went to one was in 2013. At the time, it was packed with tourists, mostly from South Korea, and some locals. This was generally my experience with these restaurants from the first time I visited one in 2008, but of course I can’t say for sure whether that impression was representative of a general picture.

The last time I went to one was in 2016, in Beijing. On a regular Saturday night, the place was virtually empty, save for a couple of middle-aged men donning Kim Il-sung badges, drinking beer and chain smoking. Our party got our own room, complete with karaoke, even though we didn’t ask for one, simply because the place was so empty. I got a hint about what the reasons might have been earlier in the day when I called to make a reservation: since I spoke to the staff in Korean, they felt obligated to inform me that customers from South Korea were no longer welcome. This business-killing restriction was likely imposed after the mass defection to South Korea, from one of the restaurants earlier that year. For what it’s worth, this particular one – in central Beijing – seemed like a dying endeavor over a year before the sanctions, though one can’t generalize from just one data point.

Here’s Daily NK’s story:

Ahead of the Lunar New Year holiday, Daily NK obtained photos of employees of a recently-closed North Korean restaurant called Pyongyang Koryo Pavilion in the Chinese border city of Dandong returning home to North Korea.

Pyongyang Koryo Pavilion was the largest of North Korea’s overseas restaurants, and originally employed 200 people. However, the restaurant shut down in November due to intensifying international sanctions targeting North Korea for its nuclear and missile development. Its employees have continued to return to North Korea in groups.

“Management started repatriating the workers in groups following the Pyongyang Koryo Pavilion’s closure, but some of them went to work at other restaurants,” a source in China close to North Korean affairs told Daily NK on February 14. “The 30 people returning ahead of the Lunar New Year holiday were part of the contingent that had been working at other establishments following the shutdown of Pyongyang Koryo Pavilion.”

In September 2017, China’s Commerce Ministry ordered the closure of North Korean companies operating inside the country within 120 days of UN Resolution 2375, which passed on September 11, 2017. The ministry also announced that Chinese joint ventures with North Koreans and North Korean companies would be closed.

Upon the realization that the Pyongyang Koryo Pavilion would likely not be resuming operations, the North Korean authorities began to exfiltrate the workers in stages.

“They’re heading back to their hometowns, where their families live, but they don’t look very happy about it because they’re losing the opportunity to earn money abroad.

Article source (with pictures):
More North Korean overseas workers return home
Seol Song Ah
Daily NK
2018-02-16

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Posted in China, Economic reform, Joint Ventures, Restaurants | Comments Closed

Advance payments in the Pyongyang housing market

Tuesday, February 6th, 2018

By Benjamin Katzeff Silberstein

Daily NK reports an interesting trend on the Pyongyang real estate market (or is it a countrywide phenomenon?) of construction companies selling apartment units before construction is finished, requiring what to me sounds like a regular deposit. First construction companies require the equivalent of $10,000 for the initial phase, and later, for interior work, at least another installment of the same amount.

I’m not sure this is an entirely new system or phenomena in the North Korean housing market, which, like virtually all spheres of the economy, has been increasingly guided by market mechanisms since the late 1990s. Nevertheless, the trend is interesting for several reasons. For example, advance payments suggest a trust in the system itself, despite a lack of transparency and formal rules. It’s unclear what would happen to customers who have made advance payments on apartments if construction doesn’t come through, but since the real estate market is still formally illegal, there is likely no judicial mechanism for people to demand their money back. It’s also unclear how widespread these practices are – obviously, most North Koreans can’t put up $10,000 for a new apartment.

Full article at Daily NK:

Real estate companies in Pyongyang are pushing ahead with construction projects in the new year after receiving permission from the North Korean authorities. These companies are reportedly securing construction funds by demanding upfront payments for spaces in the buildings.

“Owners have already been determined for half of the units in the apartment building in the Sadong area of Pyongyang, set to finish construction in the spring,” a source in the capital told Daily NK on February 1. “Typically, construction project managers announce the planned location and expected completion date, and then people who want to buy a unit are required to pay in advance in (US) dollars.”

According to the source, the advance payment system was created by individual construction project managers who lacked the private funds to begin building. They are demanding at least $10,000 USD for each advance payment, and are using these funds to begin construction.

Project managers must first gain permission to build in certain locations, and they cannot expect to raise the necessary capital through advance payments unless the location is central. This has led to intense competition between project managers to curry favor with the influential figures in charge of granting local building permits.

“Construction companies cannot earn the funds to start building unless they get a good location for the project,” the source said. “Although the new 12-floor apartment building is being built in the outskirts (of Pyongyang), they were able to secure advance payments because of the location’s convenient transport options to the city center.”

“Generally, prices for spaces in the planned buildings are set depending on the floor number and usage, such as for underground vs. upper-floor units, or for spaces intended to be used for a business,” she added. “Developers thus have to plan according to expected customer demands.”

A 1st-floor apartment may require a $10,000 advance payment, $30,000 for a mid-level unit, and $8,000 for an 11th-floor unit. Mid-level apartments are the most popular and therefore most expensive in North Korea, as they are considered a good balance between safety from burglary and ease of access by stairs during the country’s frequent power outages.

Once the building’s framework is complete, customers, who must be issued usage permits for new apartment units by the Pyongyang People’s Committee. must then pay about twice the initial payment for the interior construction of their unit to proceed.

The construction companies must also save a portion of the funds to give to the government. “For this building (in Sadong), units on the 12th-floor were deliberately withheld from sale. They are saving the entire space to give to the government upon completing construction,” said a separate source in Pyongyang, adding that this can be seen in the context of the fact that the real estate market remains illegal under North Korean law.

According to the Article 6 Section 44 of the Real Estate Administration Law (adopted by the Supreme People’s Assembly on November 11, 2009), “All revenue gained from unapproved real estate ventures are to be forfeited to the state.”

“Private businesses must give about 10% of the revenue from a construction project to the government, and they also have to give them the entire top floor,” the second source said, “but the top floor is generally not very popular anyway, the companies do not see this as a huge loss.

Article source:

Real estate companies in Pyongyang use advance payments to fund construction
Seol Song Ah
Daily NK
2018-02-06

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Posted in Economic reform, Real estate | Comments Closed

Wonsan-Kalma Coastal Tourist Area

Wednesday, January 31st, 2018

UPDATE 6 (2018-3-15): Planet Labs (@planetlabs) has posted some March 2018 imagery of construction of the Kalma Coastal Tourist Area construction site.

There appear to be two staging areas for the construction site where workers live and supplies are stored.

Here are close-ups of the two large staging areas circled in yellow in the image above:

 

I overlaid recent Planet images onto Google Earth and outlined the building and facility construction site. The coastal resort is taking place in the area outlined in yellow below:

Here are a couple of Planet images of the construction site:

I believe this project is supposed to be completed in about a year, so it will be worthwhile to check in on it periodically with Planet images to see how the project is developing.

UPDATE 5 (2018-2-2): The web page DPRK Today conducted an interview with a North Korean official about the Kalma project.  NK News offers a good English-language article about the interview here.

UPDATE 4 (2018-2-1): The Pyongyang Times offers information on the Kalma tourist area (like construction is expected to be completed in one year):

Wonsan-Kalma area shows promise as seaside resort

The development of the Wonsan-Kalma coastal tourist zone is a priority project in the DPRK this year.

Seaside resorts are tourist destinations that are found by the coast.

The most suitable places for them are those with conditions favourable for such seaside tourist activities as swimming, sunbathing, angling, yachting, boating, motorboating, surfing and scuba diving in terms of the percentage and duration of sunshine, number of days with average temperature of 18-20℃ and with no or weak wind and the condition of seashore. Especially those with sandy beaches are so suitable for coastal tourism that many countries develop such areas into seaside resorts.

Currently, such resorts hold a significant proportion of the world-class natural tourist destinations and most of summer vacationers tour the seaside.

In the DPRK, many renowned seaside scenic attractions, including Songdowon and Lake Sijung of Kangwon Province, Majon of South Hamgyong Province and Ryongsupho of South Hwanghae Province, turned into coastal tourist centres.

The Wonsan-Kalma area in Kangwon Province is also a very promising seaside resort.

The Kalma peninsula in the southern part of the Wonsan Bay is an attached island which was formed by the wave-driven accumulation of granitic sand from the Namdae River.

The northern part of the peninsula which stands long from south to north consists in gently rolling hills and the coastline is mostly straight and smooth.

To the north lies the Hodo peninsula which stretches out from the opposite direction and in between there are Sin, Tae and other islets, serving as a natural breakwater that protects the port of Wonsan.

There is a scenic attraction called Myongsasipri which means a famous sand beach stretching for 4 kilometres in the Kalma peninsula.

A goldenrain tree rare to be found in the eastern coastal areas of the country stands at the entrance to the beach which is dotted with sweet briars. The red flowers in full bloom along the seaside surrounded by tall pines and clear blue waves of the East Sea form a harmonious whole to present a spectacular beauty.

The construction of the seaside resort in the Wonsan-Kalma area with Kalma airport will help satisfy the demands of local and foreign tourists and provide an ideal place for stopover between different tourist destinations and Wonsan-Mt Kumgang International Tourist Zone.

At present, preparations are being pushed ahead to complete as early as possible the Wonsan-Kalma project which will mark a turning point in raising the country’s tourism to the world level.

UPDATE 3 (2018-1-31): The Daily NK reports that construction on the Kalma tourist zone has started, and it looks like they are right. According to a recent article:

The North Korean authorities are mobilizing ordinary citizens and military conscripts alike in a push to accelerate construction of the “Wonsan Kalma Shore Tourist Zone” situated on the country’s east coast. Sources inside North Korea report that the authorities have conveyed their intentions to complete the project before the July 27 “Victory Day” holiday, which is referred to as National Korean War Veterans Armistice Day in South Korea.

The beach resort project, along with Kalma Airport and the Masik Pass Ski Resort, all appear to be part of a larger plan by Kim Jong Un to address economic difficulties by generating more tourism revenue. He made this clear in his 2018 New Year’s address, saying, “This year, service personnel and residents should join efforts to complete the construction of the Wonsan-Kalma coastal tourist area in the shortest period of time.”

“The authorities have mobilized 120,000 military members and 20,000 ordinary citizens for the Wonsan construction project,” a source in China close to North Korean affirms told Daily NK on January 28. “People are worried over implications of another ‘speed battle’ (intense construction mobilization) after Kim Jong Un’s order to complete the project by July 27.”

Read the rest of the article here. 

If North Korea was engaging in this sort of work, we should see evidence of it–and we can via Planet Labs. Pictured below is a plot of land on the south end of the Kalma Airport runway. On the top is the Google Earth image dated 2017-5-19. On the bottom is the Planet Labs image dated 2018-1-31:

The bottom photo clearly shows a large compound of temporary housing for construction workers. This kind of facility can be seen at all of North Korea’s large scale construction projects. The coordinates are  39.144608°, 127.503932° for those that are interested.

It is still difficult to see any significant construction taking place on the northern end of the peninsula. Planet imagery in this case is rather limited, but it also appears the construction project itself is rather recent. In the Planet image below, dated 2018-1-12, we can see just how much worker housing has been constructed in just the last two weeks.

(Note: Planet Labs created a .gif of the construction site. You can see it on Twitter here.)

If the Daily NK is correct, and this is the “Wonsan Kalma Shore Tourist Zone,” and not part of the “Wonsan-Mt. Kumgang Tourist Zone,” then this indicates that plans for the area are still changing. This will be an interesting area to watch.

Here are previous posts I have done on the Kalma Peninsula and Wonsan-Mt. Kumgang International Tourist Zone. Here is a relevant article I wrote for NK News back in 2013.

UPDATE 2 (2018-1-31): KCNA releases some propaganda posters for the Kalma project:

   

These posters  give the impression that this project as ambitious as any of the major construction projects they have done in Pyongyang (Mansudae parts 1 and 2, Unha Scientist Street, Satellite Scientist Street, Mirae Scientist Street and Ryomyong Scientist Street). I previously posted about Part 2 of the Satellite Scientists Street, but it looks that that project will take a back seat to this one.

The previously announced (2015) “Kalma Street” project appears to have stalled in 2017, and this new tourist zone is apparently unrelated. It is unclear if the Kalma Street project will be completed or if it has been scrapped.

UPDATE 1 (2018-1-25): KCNA announces more information on the Wonsan-Kalma Coastal Tourist Area:

Wonsan-Kalma Coastal Tourist Area to Be Built in DPRK

A tourist resort is to be built in the Wonsan-Kalma coastal area in Kangwon Province, the DPRK on a large scale.

The Wonsan-Kalma area is good for coastal tourism.

The Kalma Peninsula in the southern part of Wonsan bay is the connecting bar formed with granite sand.

The northern part of the peninsula ranging north and south is low hill and its coastline is straight and smooth as a whole.

It faces the Hodo Peninsula to the north and Sin, Tae and other islets are located between them which serve as seawall of Wonsan Port.

There are four-kilometer-long famous sandy beach resorts called Myongsasipri and modern Kalma Airport in the peninsula.

When the tourist area is built, it will satisfy the demand of domestic and foreign tourists and will be the most ideal place to link various tourist destinations to the Wonsan-Mt Kumgang international tourist zone.

Now, a preparatory work is brisk for completing the construction of the Wonsan-Kalma coastal tourist area, a radical turn in putting the country’s tourism on world level.

ORIGINAL POST (2016-7-15): KCNA announces new special economic zone:

Kalma Area of DPRK to Turn into Tourist Resort

Pyongyang, July 15 (KCNA) — The Kalma area, located on the central east coast of Korea, will be turned into a tourist resort.

The area boasts of four-kilometer-long beach resort, not far away from such scenic spots as Mt. Kumgang, Lake Sijung, Chongsokjong and Lagoon Samil and the Masikryong Ski Resort.

The DPRK Law on Economic Development Parks, enacted in May Juche 102 (2013), is applicable to the area. Under this law, foreign investors are allowed to conduct their business activities independently in the area.

An international friendship air festival is to take place in Wonsan City, adjacent to the Kalma area, at the end of September.

The official media hinted at this project a few days prior in a report on the Mubong Mubong Special Zone for International Tourism.

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Posted in Construction, Economic Development Zones (2016), Google Earth, Special Economic Zones, Wonsan-Kalma Coastal Tourist Area | Comments Closed

Authorities initiate nationwide crackdown on Chinese products in the markets

Tuesday, January 30th, 2018

Benjamin Katzeff Silberstein

The North Korean authorities have reportedly begun a nationwide crackdown on Chinese products in the country’s markets. The unprecedented change now puts them in the same category as South Korean products, which are illegal to buy and sell.

“In a meeting last week, People’s Unit leaders informed us that all Chinese food products and home appliances, excluding industrial goods, are part of a new crackdown. Enforcement began immediately afterwards,” a source in Ryanggang Province told Daily NK on January 24. “Merchants who make a living selling Chinese products were suddenly very nervous.”

A source in Pyongyang said on January 22 that the effort had begun in the capital city and other regions including the northwest trading hub of Sinuiju by the end of 2017.

A source in Sinuiju confirmed this, saying on January 20 that “from last December, the crackdown on Chinese products in the markets has become more intense with each day. Across town in markets like the Chaeha market, the authorities are preventing merchants from doing any business with Chinese products.”

Full article:
Authorities initiate nationwide crackdown on Chinese products in the markets
Kang Mi Jin
Daily NK
2018-01-30

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Posted in Economic reform | Comments Closed

Kim Jong-un’s 2018 new year address

Monday, January 1st, 2018

Below I have posted the economic section of Kim Jong-un’s 2018 new year speech in English and Korean:

Comrades,

동지들！

This year we will mark the 70th anniversary of the founding of the glorious Democratic People’s Republic of Korea. To mark the 70th anniversary of their state with splendour is of real significance for the great people, who have raised with dignity the status of their socialist country, the greatest patriotic legacy of the great Comrades Kim Il Sung and Kim Jong Il, to that of a strategic state recognized by the world. [Translation note: In the Korean version below, Kim Il-sung and Kim Jong-il are not mentioned by name, only by title]

올해에 우리는 영광스러운 조선민주주의인민공화국창건 일흔돐을 맞이하게 됩니다.위대한 수령님과 위대한 장군님의 최대의 애국유산인 사회주의 우리 국가를 세계가 공인하는 전략국가의 지위에 당당히 올려세운 위대한 인민이 자기 국가의 창건 일흔돐을 성대히 기념하게 되는것은 참으로 의의깊은 일입니다.

We should make constant innovations and continued progress until we win the final victory of the revolution by carrying on the tradition of heroic struggle and collective innovation which adorned the founding and course of development of Juche Korea. A revolutionary general offensive should be launched to achieve fresh victory on all fronts of building a powerful socialist country by taking the historic victory in the building of the DPRK’s nuclear forces as a springboard for fresh progress.

우리는 주체조선의 건국과 발전행로에 빛나는 영웅적투쟁과 집단적혁신의 전통을 이어 혁명의 최후승리를 이룩할 때까지 계속혁신,계속전진해나가야 합니다.공화국핵무력건설에서 이룩한 력사적승리를 새로운 발전의 도약대로 삼고 사회주의강국건설의 모든 전선에서 새로운 승리를 쟁취하기 위한 혁명적인 총공세를 벌려나가야 합니다.

“Let us launch a revolutionary general offensive to achieve fresh victory on all fronts of building a powerful socialist country!” This is the revolutionary slogan we should uphold. All officials, Party members and other working people should launch an all-people general offensive to frustrate the challenges of the hostile forces who are making last-ditch efforts and raise the overall strength of our Republic to a new stage of development as they brought about a great upsurge in socialist construction overcoming all difficulties through the great Chollima upswing after the war.

《혁명적인 총공세로 사회주의강국건설의 모든 전선에서 새로운 승리를 쟁취하자！》 이것이 우리가 들고나가야 할 혁명적구호입니다.모든 일군들과 당원들과 근로자들은 전후 천리마대고조로 난국을 뚫고 사회주의건설에서 일대 앙양을 일으킨것처럼 전인민적인 총공세를 벌려 최후발악하는 적대세력들의 도전을 짓부시고 공화국의 전반적국력을 새로운 발전단계에 올려세워야 합니다.

A breakthrough should be made in reenergizing the overall economic front this year, the third year of implementing the five-year strategy for national economic development.

국가경제발전 5개년전략수행의 세번째 해인 올해에 경제전선전반에서 활성화의 돌파구를 열어제껴야 하겠습니다.

The central task facing socialist economic construction this year is to enhance the independence and Juche character of the national economy and improve the people’s standard of living as required by the revolutionary counter-strategy put forward by the Second Plenary Meeting of the Seventh Central Committee of the Party.

올해 사회주의경제건설에서 나서는 중심과업은 당중앙위원회 제7기 제2차전원회의가 제시한 혁명적대응전략의 요구대로 인민경제의 자립성과 주체성을 강화하고 인민생활을 개선향상시키는것입니다.

We should concentrate all efforts on consolidating the independence and Juche character of the national economy.

인민경제의 자립성과 주체성을 강화하는데 총력을 집중하여야 합니다.

The electric-power industry should maintain and reinforce the self-supporting power generation bases, and direct a great deal of efforts to developing new power sources. A dynamic campaign should be conducted to drastically increase thermal power generation, and lower the loss of electric power and increase its production as much as possible by maintaining and reinforcing imperfect generating facilitates. Provinces should build power generation bases to suit their local features and put power generation at the existing medium and small-sized power stations on a normal footing to satisfy the needs of electric power for local industry by themselves. Alternated production should be organized scrupulously throughout the country, and a vigorous struggle waged against the practices of wasting electric power to make effective use of generated electric power.

전력공업부문에서는 자립적동력기지들을 정비보강하고 새로운 동력자원개발에 큰 힘을 넣어야 합니다.화력에 의한 전력생산을 결정적으로 늘이며 불비한 발전설비들을 정비보강하여 전력손실을 줄이고 최대한 증산하기 위한 투쟁을 힘있게 벌려야 합니다.도들에서 자기 지방의 특성에 맞는 전력생산기지들을 일떠세우며 이미 건설된 중소형수력발전소들에서 전력생산을 정상화하여 지방공업부문의 전력을 자체로 보장하도록 하여야 합니다.전국가적인 교차생산조직을 짜고들며 전력랑비현상과의 투쟁을 힘있게 벌려 생산된 전력을 효과적으로 리용하기 위한 된바람을 일으키도록 하여야 합니다.

The metallurgical industry should further improve the Juche-oriented iron- and steel-making technologies, increase the iron production capacity and drastically raise the quality of metallic materials in order to satisfy the needs of the national economy for iron and steel. It is necessary to ensure a preferential, planned and timely supply of electricity, concentrated iron ore, anthracite, lignite, freight wagons, locomotives and funds for the metallurgical industry. By doing so, we can fulfil next year’s iron and steel production plans and make the industry Juche-oriented without fail.

금속공업부문에서는 주체적인 제철,제강기술을 더욱 완성하고 철생산능력을 확장하며 금속재료의 질을 결정적으로 높여 인민경제의 철강재수요를 충족시켜야 합니다.금속공업부문에 필요한 전력,철정광,무연탄,갈탄,화차와 기관차,자금을 다른 부문에 앞세워 계획대로 어김없이 보장하여 다음해 철강재생산목표를 무조건 수행하며 금속공업의 주체화를 기어이 완성하도록 하여야 하겠습니다.

The chemical industry should step up the establishment of the C1 chemical industry, push the projects for catalyst production base and phosphatic fertilizer factory as scheduled, and renovate and perfect the sodium carbonate production line whose starting material is glauberite.

화학공업부문에서 탄소하나화학공업창설을 다그치고 촉매생산기지와 린비료공장건설을 계획대로 추진하며 회망초를 출발원료로 하는 탄산소다생산공정을 개건완비하여야 합니다.

The machine-building industry should modernize the Kumsong Tractor Factory, Sungri Motor Complex and other factories to develop and produce world-level machinery in our style.

기계공업부문에서는 금성뜨락또르공장과 승리자동차련합기업소를 비롯한 기계공장들을 현대화하고 세계적수준의 기계제품들을 우리 식으로 개발생산하여야 합니다.

The coal and mineral production and rail transport sectors should make concerted efforts to make the country’s self-reliant economic foundations prove their effectiveness.

나라의 자립적경제토대가 은을 낼수 있게 석탄과 광물생산,철도수송에서 련대적혁신을 일으켜야 합니다.

Notably, the rail transport sector should make the best use of the existing transport capacity by making transport organization and control more scientific and rational, and maintain discipline and order in the railways as rigid as in the army, so as to ensure an accident-free, on-schedule rail traffic.

특히 철도운수부문에서 수송조직과 지휘를 과학화,합리화하여 현존수송능력을 최대한 효과있게 리용하며 철도에 군대와 같은 강한 규률과 질서를 세워 렬차의 무사고정시운행을 보장하도록 하여야 합니다.

A turn should be brought about this year in improving the people’s standard of living.

올해에 인민생활향상에서 전환을 가져와야 합니다.

Light-industry factories need to transform their equipment and production lines into labour- and electricity-saving ones and produce and supply more diversified and quality consumer goods with domestic raw and other materials, and provinces, cities and counties should develop the local economy in a characteristic way by relying on their own raw material resources.

경공업공장들의 설비와 생산공정을 로력절약형,전기절약형으로 개조하고 국내원료와 자재로 다양하고 질좋은 소비품들을 더 많이 생산공급하며 도,시,군들에서 자체의 원료원천에 의거하여 지방경제를 특색있게 발전시켜야 합니다.

The agricultural and fishing fronts should effect an upswing. We should introduce seeds of superior strains, high-yield farming methods and high-performance farm machines on an extensive scale, do farming scientifically and technologically so as to fulfil the cereals production plan without fail, and boost the production of livestock products, fruits, greenhouse vegetables and mushrooms. We should enhance our ship building and repair capacities, launch scientific fishing campaigns, and reenergize aquatic farming.

농업과 수산전선에서 앙양을 일으켜야 하겠습니다.우량종자와 다수확농법,능률적인 농기계들을 대대적으로 받아들이고 농사를 과학기술적으로 지어 알곡생산목표를 반드시 점령하며 축산물과 과일,온실남새와 버섯생산을 늘여야 합니다.배무이와 배수리능력을 높이고 과학적인 어로전을 전개하며 양어와 양식을 활성화하여야 하겠습니다.

This year the service personnel and people should join efforts to complete the construction of the Wonsan-Kalma coastal tourist area in the shortest period of time, push ahead with major construction projects including the renovation of Samjiyon County, the construction of the Tanchon Power Station and the second-stage waterway project of South Hwanghae Province, and channel steady efforts into the construction of houses.

올해에 군민이 힘을 합쳐 원산갈마해안관광지구건설을 최단기간내에 완공하고 삼지연군꾸리기와 단천발전소건설,황해남도물길 2단계 공사를 비롯한 중요대상건설을 다그치며 살림집건설에 계속 힘을 넣어야 합니다.

Building on the success we achieved in the forest restoration campaign, we should properly protect and manage the forests that have already been created, improve the technical conditions of roads, conduct river improvement on a regular basis, and protect environment in a scientific and responsible manner.

산림복구전투성과를 더욱 확대하면서 이미 조성된 산림에 대한 보호관리를 잘하는것과 함께 도로의 기술상태를 개선하고 강하천정리를 정상화하며 환경보호사업을 과학적으로,책임적으로 하여야 합니다.

Every sector and every unit of the national economy should enlist their own technical forces and economic potential to the maximum and launch a dynamic struggle to increase production and practise economy, so as to create a greater amount of material wealth.

인민경제 모든 부문과 단위들에서 자체의 기술력량과 경제적잠재력을 총동원하고 증산절약투쟁을 힘있게 벌려 더 많은 물질적재부를 창조하여야 합니다.

A shortcut to developing the self-sufficient economy is to give precedence to science and technology and make innovations in economic planning and guidance.

자립경제발전의 지름길은 과학기술을 앞세우고 경제작전과 지휘를 혁신하는데 있습니다.

The scientific research sector should solve on a preferential basis the scientific and technological problems arising in establishing Juche-oriented production lines of our own style, ensuring domestic production of raw and other materials and equipment, and perfecting the structure of the self-supporting economy. Every sector and every unit of the national economy should make a contribution to achieving production growth by intensifying the dissemination of science and technology and waging a brisk technological innovation drive.

과학연구부문에서는 우리 식의 주체적인 생산공정들을 확립하고 원료와 자재,설비를 국산화하며 자립적경제구조를 완비하는데서 제기되는 과학기술적문제들을 우선적으로 풀어나가야 합니다.인민경제 모든 부문과 단위들에서 과학기술보급사업을 강화하며 기술혁신운동을 활발히 벌려 생산장성에 이바지하여야 하겠습니다.

The Cabinet and other economic guidance organs should work out a realistic operational plan to carry out the national economic plan for this year and push forward the work for its implementation responsibly and persistently. Positive measures should be taken by the state to ensure that the socialist system of responsible business operation proves its worth in factories, enterprises and cooperative organizations.

내각을 비롯한 경제지도기관들은 올해 인민경제계획을 수행하기 위한 작전안을 현실성있게 세우며 그 집행을 위한 사업을 책임적으로 완강하게 내밀어야 합니다.국가적으로 사회주의기업책임관리제가 공장,기업소,협동단체들에서 실지 은을 낼수 있도록 적극적인 대책을 세워야 합니다.

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Posted in Agriculture, Cabinet, Coal, Dams/hydro, Electricity, Energy, Five Year Plan (Announced 2016-5), Forestry, Kim's New Year Address (Joint editorials), Light Industry, Manufacturing, May 30 Measures (5.30), Mining/Minerals, Railways, Transportation, Wonsan-Kalma Coastal Tourist Area | Comments Closed

Kangnam Economic Development Park Announced

Saturday, December 23rd, 2017

I am on Christmas holiday, but took a quick minute to write this blog post about North Korea’s newest Special Economic Zone.

According to KCNA (2017-12-23):

SPA Presidium Decides to Establish Kangnam Economic Development Park

Pyongyang, December 23 (KCNA) — The Presidium of the Supreme People’s Assembly of the Democratic People’s Republic of Korea decided to establish Kangnam Economic Development Park in several parts of Koup-ri, Kangnam County of Pyongyang.

The DPRK is to exercise sovereignty over Kangnam Economic Development Park.

A decree on the decision of the SPA Presidium was promulgated on Thursday.

North Korea announced fourteen new SEZs in 2013, seven new SEZs in 2014, and 3 new SEZs in 2015. None were announced in 2016. This is the first SEZ to be announced in 2017, and it was announced just a day after UNSC voted to tighten sanctions on the country.

Although the article does not give many specifics, I believe this project aspires to be a manufacturing/ processing/ shipping hub built on the Taedong River. But we will learn more later, no doubt.

See Google Earth image of the area below:

Koup-ri has over 4km of waterfront property along the Taedong River and a partially completed port at  38.876443°, 125.572246°.

It also has a new fish farm constructed sometime after September 2015:

North Korea and SEZs:

My impression is that to date North Korea had scaled back expectations on their many SEZs to focus on Rason Economic and Trade Zone and Wonsan-Mt. Kumgang International Tourist Park (neither of which are expected to see much growth owing to international sanctions measures, North Korea’s corrupt business environment, poor infrastructure, and poor human human rights record). A few other SEZs have seen some construction progress or are occasionally mentioned in the official media, but have seen little progress (nothing to make up for losses at the Kaesong Industrial Zone). These include the Hwanggumphyong and Wihwado Economic Zone (Management Commitee Building constructed), the Sinuiju International Economic Park (Chinese Tourist Zone constructed), the Kangryong International Model Green Park (advertised in official media), the Unjong Hi-Tech Development Park (advertised in official media), and the Mubong Special Park for International Tourism (new border crossing and limited construction).

Seeing this announcement was a surprise to me.

More later. Happy holidays.

 

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Posted in Economic Development Zones (2017), Kangnam Economic Development Park, Special Economic Zones | Comments Closed

On the Nov 21st US Treasury Sanctions against North Korea

Tuesday, November 21st, 2017

By: Benjamin Katzeff Silberstein

Today, the Treasury Department’s Office of Foreign Asset Control (OFAC) announced new sanctions against a number of Chinese and North Korean entities. The sanctions “target third-country persons with long-standing commercial ties to North Korea, as well as the transportation networks that facilitate North Korea’s revenue generation and operations,” said a press statement.

Overall, these additional measures seem designed to clamp down on avenues for North Korea to circumvent current UN sanctions. Among those sanctioned are three Chinese companies that have traded with North Korea in goods that are covered by UN sanctions from this and last year:

OFAC designated Dandong Kehua Economy & Trade Co., Ltd., Dandong Xianghe Trading Co., Ltd., and Dandong Hongda Trade Co. Ltd. pursuant to E.O. 13810.  Between January 1, 2013 and August 31, 2017, these three companies cumulatively exported approximately $650 million worth of goods to North Korea and cumulatively imported more than $100 million worth of goods from North Korea.  These goods have included notebook computers, anthracite coal, iron, iron ore, lead ore, zinc ore, silver ore, lead, and ferrous products.

Also targeted are companies that have traded in goods that are either covered by sanctions, or (it seems) fall under the dual-use category of goods that can be used in nuclear weapons/missile development:

OFAC designated Sun Sidong and his company, Dandong Dongyuan Industrial Co., Ltd. (Dongyuan), pursuant to E.O. 13810.  Sun and Dongyuan were responsible for exporting over $28 million worth of goods to North Korea over several years, including motor vehicles, electrical machinery, radio navigational items, aluminum, iron, pipes, and items associated with nuclear reactors.  Dongyuan has also been associated with front companies for weapons of mass destruction-related North Korean organizations.

The sanctions also target vessels that are suspected of having transferred oil to North Korea via other ships (ship-to-ship transfer) in violation of sanctions (this part contains some pretty impressive pictures):

All in all, these new sanctions appear to try to fill the gaps left by current sanctions. Surely, they will cause added trouble for North Korea. But the problem, to begin with, is that North Korea has historically been good at adapting to new sanction’s frameworks and finding new methods to circumvent them. Only time will tell whether these skills of North Korea still hold up in the current sanctions environment.

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Posted in China, Foreign direct investment, International trade, Political economy | Comments Closed

Sanctions, and the weakness of North Korean food security

Wednesday, October 18th, 2017

By Benjamin Katzeff Silberstein

While some Pyongyangites started off the week by checking out plasma-screen TV’s at a consumer goods fair, Daily NK published an ominous story that reminds the reader of the dark 1990s. Rumors are now circulating of a starvation death in Hyesan:

An increasing number of North Koreans are suffering from the effects of food insecurity and malnutrition, according to inside sources who spoke with Daily NK. A rumor is circulating in Ryanggang and North Hamgyong provinces that the body of someone who starved to death has been seen near the train station in Hyesan City.
“More than a handful of people have come forward and said that they saw the body of someone who starved to death near the Hyesan train station. The food situation was relatively good for the past few years, so it’s such a shame that we’ve returned to dire circumstances so suddenly,” a source in Ryanggang Province told Daily NK.
A source from North Hamgyong Province similarly reported that “a rumor is swirling around the market that a starved body was discovered. There are so many people talking about it that it’s being viewed as a fact.”
The source added that the credibility of the rumors is high, saying, “There was a severe drought at the beginning of the year in North and South Hamgyong provinces and Ryanggang Province. The corn and rice harvest did not meet its targets, amounting to approximately half the volume produced last year.”
Full article:
Food insecurity riles North Korea’s poorest provinces
Kim Chung Yeol
Daily NK
2017-10-18

As crude as it may sound, one cannot draw sharp conclusions from one unconfirmed death by starvation in a North Korean city. But the fact that people think conditions bad enough to believe such rumors to be true says something about the instability of food supply in North Korea right now.

For several years, the supply of food in North Korea has looked remarkably stabile compared to the 1990s. A combination of more freedom for the markets to operate, more leeway for farmers in how they operate, produce and sell their goods (and procure inputs such as fertilizer), larger and more consistent imports from China – these are all factors that have led to better food security overall in North Korea. Market prices have sent a clear message on this.

But perhaps “stabile” was the wrong way to describe food supply. “Consistent” may have been a better way of looking at it. A system is hardly stabile when a combination of relatively usual events for the country – bad weather and changing geopolitical conditions – can shake its core.

As usual with these dynamics, it would be wrong to attribute the changes to one single factor. That is, we cannot say that sanctions –> starvation in some automatic fashion. Rather, several trends have coincided and caused the dire situation:

First, North Korea has experienced a very troubling drought early on in the farming season. As Andy Dinville shows at 38North, using satellite data, weather conditions have been particularly bad this year, significantly harming this year’s harvest.

In any normal year since the early 2000s, when market mechanisms seriously became a routinized part of North Korea’s agricultural economic system, it seems that the effects of a drought could have been offset at least in part by increased imports from China, or other sorts of shifts.

Which brings us to a second factor, namely sanctions and the current tensions, and China’s enforcement of economic pressure on North Korea. Not only does this mean that overall trading conditions are difficult, and that Chinese sellers are wary of trusting that they’ll actually receive payments from North Korean buyers. It also means that goods such as fertilizer for farming are more difficult to acquire. Like the Daily NK article notes:

“Last year, North and South Hamgyong and Ryanggang provinces endured a flood of epic proportions and this year there was a drought, so the agricultural situation in both regions is poor. Additionally, because of the sanctions, it has been harder to procure different kinds of fertilizer necessary for farming, so this has exacerbated the damage.” he continued.
Third, the geopolitical instability naturally makes for a nervous market overall. The price of corn, for example, is up by 47 percent compared to last year. It is important to note that this sort of change in market prices has not been observable during the many instances in the past when international aid organizations have warned of food shortages in North Korea. Hoarding is a natural behavior on any market when actors believe a shortage is looming in the near future. It is a stark sign of the shift in China’s behavior from previous rounds of sanctions that North Korean markets now seem to confirm that China is putting real and heavy economic pressure on the country. The loopholes may still be there but they are much more narrow than usual.
As winter approaches, things aren’t likely to get any easier. Fuel shortages will make heating more difficult and expensive than usual for average North Koreans, particularly as the state soaks up oil and fuel from the market, raising prices further. Things may well get much worse before they get any better.
UPDATE 2017-10-24: 
A reader with extensive experience working on North Korean food security emailed a somewhat skeptical note regarding the food production decrease estimates I cite above. The main point is: even if food production goes down, it may not spell disaster as the past few years harvests have been exceptionally good in comparative perspective. I quote an excerpt here with the reader’s permission:
It really doesn’t look like there is much difference between positive and negative trends, particularly if you just look at the end of August. And his [Dinville] data compares the 2017 harvest with the 2016 harvest, which was probably the best harvest in 30 years. So even if 2017 is a bit lower than 2016, it will still be a relatively stable year and much, much better than 2001. There were no major disasters in the country, as well, aside from the drought and the effects of the flooding from last fall in a few counties in the northeast. My takeaway from his [Dinville’s] data is that there were a few fields (the red “strongly negative” portion) that couldn’t be irrigated sufficiently but we shouldn’t extrapolate to the entire country harvest. Kitchen gardens have also expanded in the country and can help to mitigate a poor harvest, at least for some families.
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Posted in Agriculture, China, Economic reform, International Aid, International trade, Statistics | Comments Closed

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