Archive for the ‘Labor conditions/wages’ Category

US citizens: If you want NOKO jeans you need to go through OFAC

Thursday, December 10th, 2009

NOKO Jeans are finally for sale on their web page here.  However they include a not-so-subtle warning to American shoppers:

Important regarding ordering from the USA: at this time, goods of North Korean origin may not be imported into the United States either directly or indirectly without prior notification to and approval of the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC). You need to apply for this in order to import goods produced in North Korea. Contact OFAC here: http://www.treas.gov/offices/enforcement/ofac/. It is the buyer’s responsibility to get this approval.

OFACS is the same outfit that is supposed to go after you if you visit Cuba.  I am not recommending you do so, but it semes to me that it would just be a lot easier to have a friend in Europe order them for you…

Read previous NOKO posts here.

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North Korean labor market data (qualitative)

Wednesday, December 9th, 2009

I thank a reader for pointing out an interesting article in the Korean Political Science Association Journal which contains a plethora of qualitative data on the North Korean labor Market–survey data from a cross section of defectors.

Here is the citation:

Park, Young-ja, “‘Marginal Work’ and ‘Labor Market’ in North Korea after the 2003 General Market System”, Korean Political Science Association Journal Vol. 43, No. 3, September 2009

Read the full article here, or here.

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Kaesong exports grow, labor shortages worsen

Monday, November 23rd, 2009

Institute for Far Eastern Studies (IFES)
NK Brief No.09-11-23-1
11/23/2009

Companies in the inter-Korean joint Kaesong Industrial Complex (KIC) have recorded a growth since North Korea abolished restrictions on traffic to and from the complex, as well as on the number and length of visits by South Korean workers.

According to the South Korean Ministry of Unification, companies in the KIC recorded September exports worth 3.42 million USD, 21.5 percent higher than the 2.82 million USD-worth of goods exported in September 2008. From May 2008 to July of this year, KIC exports were lower than the previous year every single month, but finally showed a 29% jump in August, the first time in 15 months. The increase in the value of the complex’s exports was helped by exports of machinery and household electrical appliances now being produced there.

There are currently 116 companies operating in the KIC, but according to the Ministry of Unification, at the end of September there were only 40,848 North Korean laborers working there, and the problems revolving around hiring more workers are clouding future prospects for the complex. As there are only around 40,000 North Korean workers living in Kaesong City and the surrounding area, it appears that the KIC cannot currently accommodate any new businesses. This poses a dilemma for the 18 construction projects currently underway, and puts on hold another 105 projects that have been allotted land within the KIC, but have not yet begun construction of any factories.

Furthermore, despite the fact that managers in the KIC are trying to maintain a sense of stability in order to attract further orders, if the North decides to close the door on friendly policies, the beginning of next year could see a reversal of the growth. The KIC is, at best, enjoying an ‘uneasy peace.’

KIC officials say that the primary issue at the moment appears to be whether roads to and from the complex will be constructed and whether the inter-Korean agreement reached during the Roh Moo-hyn administration to provide dormitories for 15,000 workers will be implemented. According to a survey of businesses, companies already in operation and/or under construction want to hire an additional 26,000 workers. However, with the current government closely linking the North Korean nuclear issue with inter-Korean relations, the road and dormitory construction, which would cost tens of millions of dollars, would have to be based on progress toward denuclearization, the likelihood of which, at this point, is cloudy.

The incumbent government also seems to put more weight on maintaining the current, relatively stable state of things in the complex than on further developing the group project. One problem they are working to solve is that officials managing the KIC are now prepared to rent out space in one ‘apartment-style factory’ in which many different companies operate production facilities under one roof, but are having difficulties finding willing clients, while current tenants complain about close quarters and a lack of space.

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Korea Business Consultants Newsletter

Thursday, November 19th, 2009

Korea Business Consultants has published their October 2009 newsletter.  You can read it here.

Here is the newsletter table of contents:

COVER
– China eyes DPRK’s mineral wealth
– SinoMining acquires 51% of DPRK’s Hyesan Copper Mine
– Transformation and Modernization of North Korea
– DPRK sees peace pact with US as key to disarmament
– US “willing to engage DPRK directly”
– “DPRK Energy Sector Assistance to – Accompany Progress in… Discussions”
– Billy Graham’s son visits DPRK to deliver aid
– Lang visits Seoul

ECONOMY
– DPRK vows to expand trade
– China poised to give substantial aid
– DPRK films looking for joint producers

INTER KOREAN
– Buddhists from south, north call for reopening of Mount Kumgang tour
– Kaesong factory recognized for quality
– Frayed relations hindering development of mineral resources
– ROK aid to north falls
– Lawmakers call for use of rice surplus as DPRK aid
– Farmers demand rice price stabilization

POLITICAL
– Kenya establishes diplomatic relations with DPRK

CULTURE & SPORTS
– Eriksson to coach DPRK?
– DPRK’s Hong battles for gold at World Gymnastic Championships
– DPRK begins preparations for World Cup

KOREA COMPASS
– Mangyongdae
– Korean Proverb

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North Korean workers leave the Czech Repblic…

Monday, November 2nd, 2009

According to the Choson Ilbo:

Nachod is a small village in the Czech Republic around three hours by car from the capital Prague. It is an isolated place sparsely dotted with farm houses. On the outskirts of the village is a two-story factory called Snezka that manufactures sheets for cars and travel bags. Until 2007, the factory was filled with North Korean women who had gone there to work.

The European press described the women as “21st century slaves,” being watched 24 hours a day by North Korean minders and required to wire most of their earnings back to North Korea. The Czech government eventually sent back all North Korean workers by 2007, including the 90 women who had been working for Snezka.

As orders from European automakers skyrocketed, the number of staff at Snezka rose to around 700, but it was difficult to find cheap and dependable workers in such a remote place. That was when the North Korean Embassy in the Czech Republic called to offer the services of “loyal” workers. The first handful of North Koreans who were hired proved to be excellent workers and the factory kept on hiring more. “From an employer’s perspective, they were ideal workers,” one executive recalls. “Unlike Czech or Ukrainian workers, the North Koreans never wasted time drinking coffee and chatting. They were very good with their hands too. They were extremely accurate in their sewing, as if machines had done it.”

The executive objects to the term “21st century slaves.” The North Koreans worked eight hours a day, five days a week in two shifts — 6 a.m. to 2 p.m. and 2 p.m. until 10 p.m. Weekends earned them an extra 75 percent of their daily incomes, a standard uniformly applied to both North Korean and other workers. Factory staff say the North Koreans led a dull existence. Three or four lived in a house supplied by Snezka, and they traveled in groups of five or six even when they were going for a short walk around the factory.

They rarely talked to other workers. One worker from Poland says, “I never heard them say a single word about their family, friends or hometowns.” In time, around half of the 90 North Korean workers were able to communicate in Czech, but they were still said to be “quiet.”

Here is the town of Nachod.  I have not located the factory yet.

Previous posts on this story here (first) and here (second).

Also, North Korea gets trams from the Czech Republic.

Read the full sory below:
Czech Factory Regrets Departure of N.Koreans
Choson Ilbo
10/28/2009

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Campaign to sell Kaesong goods in Pyongyang

Tuesday, October 27th, 2009

Institute for Far Eastern Studies (IFES)
NK Brief No. 09-10-26-1
10/26/2009

Companies in the Kaesong Industrial Complex (KIC) are pushing for permission to transport goods manufactured within the complex along the railway running from Kaesong to Sinuiju and the highways connecting Kaesong, Pyongyang, Sinuiju and the Chinese city of Dandong.

Currently, the majority of goods exported from the KIC flow through the South Korean port of Incheon. They are then distributed elsewhere after arriving at the Chinese port of Dalian. This route is expensive and slow. Shipping by sea costs 1,900 USD per container and takes as many as 10 days, while if the railway infrastructure was built up between Kaesong and Sinuiju, both the cost and the time could be significantly reduced.

Seventeen percent of Kaesong goods are exported not only to China, but to Europe, the Middle East and Russia. In the mid- to long-term, Kaesong needs to be connected with Rajin-Sunbong, so that goods can be distributed throughout Russia and Europe via the Trans-Siberian Railway. In order to make this happen, companies within the KIC are seeking to attract foreign joint-ventures and investments while at the same time lobbying North Korean authorities in an effort to convince them of the need for such land transportation infrastructure.

These companies are also pushing for improvements in the highway spanning the 160 km between the KIC and Pyongyang and the injection of KIC goods into the Pyongyang markets, where they could compete with Chinese imports. One part of this effort is promoting the attachment of ‘Made In DPRK’ labels to goods produced in these factories.

It appears that North Korean authorities have been receptive to these ideas, but questions still remain on the logistics of the project. One source has said that the North Korean Central Special Direct General Bureau has shown interest recently in the idea of including KIC goods in the annual Pyongyang International Trade Fair.

On the one hand, the number of North Korean workers in the KIC has now topped 40,000; but on the other hand, given the number and size of the factories in the complex, the factories are about 26,000 workers short of full capacity. The effort to find suitable workers means that now people from Sariwon, Pyongyang and Hamheung have been brought in. Companies in the KIC are adamant that construction of dormitories in the complex needs to be sped up. At the same time, North Korean authorities are demanding that workers be paid according to their level of education, job description, and experience.

For the first time in 13 months, trade between the two Koreas began to rise again. In September 2009, inter-Korean trade amounted to 173.17 million USD, a 2.6 percent rise over the 166.86 million USD recorded in 2008. The economy has shown signs of recovery since last July, and as inter-Korean relations have inched toward improvement, trade has also risen.

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“150 Day Battle” production campaign stories

Monday, October 12th, 2009

150-speed.jpg

Photo by Eric Lafforgue

North Korean claims record production gains through ‘150-day battle’
Institute for Far Eastern Studies (IFES)

NK Brief No. 09-10-12-1
10/12/2009

It has been boasted that North Korea’s ‘150-day Battle’ to boost the economy (April 20-September 16) resulted in record-breaking jumps in DPRK production numbers, and it has been suggested that that by 2012, some enterprises will “attain production numbers higher than the best numbers recorded at the end of the 1980s.” This claim was made by Ji Young-il, the director of the Chosun University Social Science Research Institute, which is run by the pro-Pyongyang “General Federation of Korean Residents in Japan.”

In “Professor Ji Young-il’s Monthly Economic Review: The 150-day Battle and Prospects for Building an Economically Powerful Nation,” an article in the federation’s newspaper, Choson Sinbo, the author wrote, “There are more than a few enterprises that have set production goals for 2012 at more than three times the current level of production.” He also claimed that some enterprises in the mining, energy and railroad transportation sectors had set goals of as much as 6 times today’s production numbers.

Professor Ji went on to write, “Basically, it is an extraordinary goal ensuring growth of 1.3-1.5 times (a growth rate of 130-150%) per year.” He also explained that surpassing production rates as high as those seen in the late 1980s is one of the fundamental markers on the road toward “opening the door to a Strong and Prosperous Nation.”

Citing North Korea’s “Choson Central Yearbook,” he gave production numbers in various sectors of the DPRK economy at the end of the 1980s: electricity, 55.5 billion kWh (1989); coal, 85 million tons (1989); steel, 7.4 million tons (1987); cement, 13.5 million tons (1989); chemical fertilizer, 5.6 million tons (1989); textiles, 870 million meters (1989); grain, 10 million tons (1987).

Director Ji claimed that during the recent ‘battle’, production in the metals industries was up several times that of the same period in previous years, while energy producers generated several hundred million kWh of electricity, coal production was up 150%, and cement and other construction materials were up 140%. He pointed out that in 14 years of the Chollima movement, beginning in 1957, during which socialist industrialization took place in the North, the yearly average production growth was 19.1%, and he stated that the annual growth of 9 to 10% in industrial production over the past several years was a noteworthy record.

Moving to the agricultural sector, Director Ji also noted that while overseas experts have critiqued this year’s harvest, there has been a definite breakthrough in grain production with land cultivation hitting previously unseen levels over the past several years.

Previous 150-day battle stories below:
(more…)

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Kaesong factory recognized for quality

Thursday, October 1st, 2009

Institute for Far Eastern Studies (IFES)
NK Brief No. 09-30-1
9/30/2009

North Korean laborers in the Kaesong Industrial Complex are gaining attention as they are awarded with the government’s certificate of high quality, a certification difficult for even South Korean companies to earn. It is very rare for the North Koreans to earn in only about one year what it takes South Korean small and mid-sized businesses 2~3 years to get.

On September 25, the Korea Chamber of Commerce and Industry presented the food container-producing Sungrim factory, located in the KIC, with the Chamber’s ‘Single PPM Quality Certification’. This certification is awarded to the company that, during the last six months, have found less than 10 out of 1,000,000 products (0.001%, 10PPM) to be defective. To date, only 1,664 factories throughout Korea have earned the certificate, and this is the first time it has been awarded to a factory in the Kaesong Industrial Complex.

The Sungrim factory launched a ‘Single PPM’ project to boost the quality of its output in July of last year, and received the Korea Chamber of Commerce and Industry’s award just 14 months later. The KIC Sungrim factory was opened in April 2008, and manufactures food container lids for the CJ Corporation. It employs 88 North Korean workers and 3 South Korean supervisors.

When the factory first opened, the skill level of the workers was considerably lower than counterparts elsewhere, and this was reflected in the dissatisfaction of customers and large number of defective products. It appeared that workers were indoctrinated with the North Korean system of equality, in which production numbers were less important than providing meals, exercise facilities, and other benefits. However, as the workers became more loyal to the company, their efficiency improved as well, and employees even began repairing their own equipment in the event of a failure. The CJ management recognized this, and allowed the North Korean laborers to improve at their own pace, sparing no expense to support their efforts.

The result was that the factory which had produced as many as 650 defective goods per month at the beginning was able to reduce the number of maligned goods to 15 within a year, and eventually down to 1.8 PPM. This placed the factory more than 17 times higher than the 31.3 PPM average for the 111 companies receiving one of Korcham’s three certificates (Single PPM, 100 PPM, and 1000 PPM).

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Capitalism spreads among DPRK laborers in Vladivostok

Monday, September 28th, 2009

From Voice of America (excerpts):

In Russia’s largest port city on the Pacific Ocean, Vladivostok, several small-framed Asian men are bustling around a half-built apartment building, trying to move large metal beams. They are North Koreans sent out by their government to earn much-needed foreign currency for the country.

Kim Dong Gil came from North Korea’s second largest city of Hamhung. He brags that North Korean workers have the best skills in the Russian construction market, which is also filled with laborers from Central Asia and Vietnam.

The estimated 5,000 North Koreans in Vladivostok come from various backgrounds and even include doctors.

“I didn’t have any construction skills since I used to be with the military,” said Kim Soon Nam, who served in the army back home. “I learned from scratch when I arrived here. I got trained by a really young person who used to curse and swear at me all the time.”

Despite the stress of living and working in a foreign country, the North Koreans have come to appreciate the culture of capitalism.

“Back home I couldn’t make money even if I wanted to. But here if I work hard, I can make a dozen times more,” explained Han Jong Rok.

Choi Jong-kun, an assistant professor of political science at Yonsei University in Seoul, says money is just one reason to leave home. The other is improving one’s status among North Korea’s political elite.

“If they bring in more money, then they would sort of have sort of upward mobility in their social class,” explained Choi Jong-kun.

North Korea does not reveal significant economic data, but exporting workers is considered a key source of hard foreign currency.

A report by the Korea Institute for International Economic Policy in Seoul estimated in 2007 that Pyongyang earns at least $40 million to $60 million a year from labor exports. Outside of Russia, the institute has tracked North Korean workers in Kuwait, the United Arab Emirates, Qatar, Bangladesh, China and Mongolia.

In Vladivostok, every North Korean worker is required to pay the Pyongyang government around $800 each month.

Kim Soon Nam says he works extra hours to make sure he has money for himself.

“If we want to save some money, we have to work Sundays and holidays, too,” he said. “We must earn a lot of money no matter what. North Koreans have to work from 8 am to 10 pm.”

The North Koreans in Vladivostok usually get a five-year visa, but many get extensions to earn more money. They sleep in dormitories and live to work, spending much of their time outside the construction sites doing extra jobs in local Russian homes.

Kim Chul Woong, a welder, says he is willing to sacrifice time from his family back in Pyongyang to give his son opportunities few North Koreans enjoy, like a computer.

“The video footage on the computer can enhance children’s intellectual development, but I don’t have the kind of money,” he said. “When I go back home after working in Russia I’ll have a good amount of money. I can buy expensive stuff for my son. If he wants to do music I can buy him a violin or a guitar.”

He says he is taking advantage of the work while he can get it. Kim Chul Woong says the construction jobs are dwindling in Russia because of the economic crisis. There is also greater competition from newly arriving Central Asians who are as hungry for dollars as he is.

Read the full story here:
N. Korean Workers Earn Dollars for Construction Work in Russia
Voice of America
Young Ran-jeon
9/28/2009

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2009 bad year for Kaesong Zone

Wednesday, September 16th, 2009

UPDATE 9/16/2009: Despite the downward trajectory that business in the Kaesong Zone seemed to be taking this year, things appear to have bottomed out.  According to Yonhap, the Koreas have signed a Kaesong wage increase.  According to the article:

South and North Korea agreed to a 5 percent wage hike at a joint industrial park on Wednesday, the Unification Ministry here said, in the latest sign of inter-Korean projects returning to normal.

North Korea earlier demanded a 400 percent raise in monthly wages for its workers at the South Korean-run park in Kaesong, just north of the border.

South Korea’s management office in Kaesong “signed an agreement on a 5 percent wage increase” with its North Korean counterpart, ministry spokesman Chun Hae-sung said in a brief statement.

The North voluntarily withdrew its earlier demand last week in a striking shift from its unyielding attitude in four rounds of negotiations from April to July. The demand called for monthly wages be raised to US$300 from the average $70-80, apparently in retaliation against Seoul’s hard-line policy toward Pyongyang.

The Kaesong park opened in late 2004 as an outcome of the first inter-Korean summit four years earlier. It houses 114 mostly small-sized South Korean firms producing clothing, electronic equipment, kitchenware and other labor-intensive goods with about 40,000 North Korean workers.

The venture is seen as a much-needed source of dollar income for the North, which is currently under U.N. sanctions for its May nuclear test that bans cash flows to the country.

The 5 percent rate hike will increase the minimum wage to about $58 from the current $55.

Separately, North Korea was conducting a door-to-door survey on South Korean businesses at the joint park, said ministry spokeswoman Lee Jong-joo.

North Korea asserted that the two-day survey that continues until Thursday was to examine the firms’ output and “listen to their complaints and difficulties regarding tax and accounting,” Lee said. Such on-site surveys have been done sporadically, she added.

Although tensions might have eased, it remains to be seen whether the business community can be coaxed into making serious capital investments in the DPRK.

Read previous Kaesong Industrial Zone news below:

(more…)

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