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DPRK light industrial production grows with ROK material aid

Wednesday, February 13th, 2008

Institute for Far Eastern Studies (IFES)
NK Brief No. 08-2-13-1
2/13/2008

As South Korean materials used in light industry make their way to the North, some DPRK factories appear to returning to normal manufacturing operations. A source in North Korea recently reported, “Raw rubber, talcum (used for soap), perfumes, textiles, and other ROK raw materials made their way to a Sinuiju shoe factory and cosmetics factory, and production has returned to normal.”

South Korea is providing raw materials for light industry worth 80 million USD in return for mined goods from the Danchun and Kumduk areas of North Korea. According to the source, “9 containers of soap powder came to the soap department of the Sinuiju cosmetics factory. The factory is in full operation and most workers are reporting for work…Workers are receiving monthly wages and food rations, and [they] almost never come out to the traditional market.”

The workers at the Sinuiju cosmetics factory are mostly women, and up until now there were no materials or power, so there could be no production and business was off. However, since the middle of last November, as materials began to flow in, this factory was identified as a ‘special’ factory, power was turned back on, and the manufactured goods began to roll out. An inside source also reported that the goods have already begun to turn up on Sinuiju markets. “Sneakers began appearing in Sinuiju’s Chaeya and Chinsun Markets; The quality is good, and the residents have received them well … The response seen is that it is thanks to the South Korean shoe materials that the quality is good. Chinese shoes are not able to compete, and are not selling well.”

The source went on to report that the scent of laundry detergent was nice, and that it was only being used to wash undergarments. “Everyone knows that the light industrial raw materials are from South Korea …Everyone already knows that South Korea has flourished, so they publicly praise ROK goods.”

As production normalizes at the Sinuiju shoe factory, cosmetics factory, and other light industrial factories, factory workers are becoming objects of envy. Among residents, some worry about not being able to enter the factories, because in the factory, monthly wages and rations are received, and some products can be stolen and privately sold.

Goods now found in Sinuiju markets include some given to factory workers based on their piece rates, and some that are snuck out and find their way to vendors. However, in this first stage of production normalization, the North is not yet at a level at which large-scale rationing to the people is possible.

Posted in Institute for Far Eastern Studies, International Aid, International trade, Labor conditions/wages, Light Industry, Manufacturing, Mining/Minerals | 1 Comment »

ROK business optomistic about inter-Korean cooperation after nuke resolution

Tuesday, February 12th, 2008

Institute for Far Eastern Studies (IFES)
NK Brief No. 08-2-12-1
2/12/2008

South Korean businesses currently involved in inter-Korean economic cooperation are facing many difficulties, both due to and in spite of the system in place, so that at the moment, investment in North Korea does not look much more appealing than in Vietnam or China.

The Korea Chamber of Commerce carried out a survey, titled “Business Perspective on the Direction of South-North Economic Cooperation Policy”, targeting 300 successful businesses (170 companies responded) and 200 companies currently involved in inter-Korean economic cooperation (132 companies responded). According to the results of the survey, 79.4 percent of companies involved in inter-Korean cooperation responded that they are “currently facing systemic and procedural difficulties.”

More specifically, 44.7 percent pointed to the “3-C” (commute, communication, and customs) issues, 22.4 percent pointed to “claim resolution procedures,” 14.3 percent highlighted “difficulties with financial transactions,” 11.8 percent chose the “ban on the import of strategic materials,” and 5 percent indicated that “limited markets” were the main issue.

In addition, 58 percent of responding companies noted issues not related to the system set up for inter-Korean cooperation. 36.6 percent pointed to difficulties resulting from the “lack of understanding of market economics,” 28.7 percent noted a “lack of supervision by managers,” 24.8 percent chose “uncooperative, highly tense attitudes,” and 8.9 percent pointed out “demands for quick production.”

When asked about the relative attractiveness of investment in North Korea if the current situation were maintained, as compared to Vietnam and China, only 27 percent responded, “more attractive”, while 53.7 percent, or twice as many companies, responded that investment was “impossible.”

However, 58 percent responded that, in the event the North’s nuclear issues were resolved, investment in North Korea would be “more attractive than China and Vietnam”, while only 21.7 percent responded that investment in the North would still be “impossible.”

The overall impression of these companies regarding inter-Korean cooperation is that “improvement of inter-Korean relations offers opportunities for new enterprises and is a positive influence on the South Korean economy” (65.3 percent), and 19 percent felt that cooperation would “in the future, serve as a springboard for the relaunch of the South Korean economy.” 15.7 percent of responding companies felt, however, that “there would be no substantial positive influence on the economy.”

Currently, a resolution to the North Korean nuclear issues is the most important factor, but it is imperative that pledges of the incoming ROK administration such as strengthening investment security, preparing claim resolution measures and other issues to placate business interests, and nurturing North Korean exporters, are institutionalized.

Posted in Automobiles, Economic reform, Foreign direct investment, Institute for Far Eastern Studies, International trade, Kaesong Industrial Complex (KIC), Manufacturing, Railways, South Korea, Special Economic Zones (Established before 2013), Transportation | Comments Closed

IFES DPRK monthly recap: January 2008

Tuesday, February 5th, 2008

Institute for Far Eastern Studies (IFES)
NK Brief No. 08-2-5-1
2/5/2008

Kim Jong Il’s first visit of the year was reported on January 6 to have been to the Ryesonggnang hydro-electric power plant. Generally, the leader’s visits in the first months of the year, along with the New Year’s Joint Editorial, which focused on economic recovery, set the tone for the coming year’s policies. His second inspection of the year was to a military unit.

Defectors claim that prostitution is on the rise in North Korea, and on January 9, the aid group ‘Good Friends’ reported that the DPRK has begun to close massage parlors as part of a crackdown on prostitution. The agency reported that in the DPRK there was a “steady campaign to weed out decadent foreign culture,” and that in September, DPRK soldiers were ordered to avoid alcohol, sex, and money.

On January 16, it was reported that Kim Jong Il had instructed all DPRK institutions to reduce their bureaucracies, including senior staff, by thirty percent.

Figures released by North Korea’s Korean Central News Agency indicate that the DPRK’s population had increased to 23.6 million in 2004, the latest available figures. According to DPRK figures, the population has grown from 22.1 million in 1996.

North Korea announced the closure of its Australian embassy on January 22. While the DPRK will continue to maintain diplomatic relations with Australia, it apparently can no longer afford to maintain an embassy in Canberra.

According to a report released by the International Red Cross, North Korea has the largest number of people in the world killed by natural disasters over the past decade. The report states that 458 thousand North Koreans have died from natural disaster, 38 percent of the disaster-caused deaths in 220 countries from 1997-2006.

A U.S. Senate investigation reported that the DPRK funneled as much as 2.7 million USD through a bank account set up from UN development projects. The report stated that North Korea used the UN account due to fears that the United States would block its ability to transfer money internationally.

DPRK Nuclear Negotiations

2008 opened with the United States and Japan releasing statements expressing their disappointment at North Korea’s failure to meet its December 31 deadline to fully disclose the extent of its nuclear programs, while North Korea’s New Year’s Joint Editorial called for “stability on the Korean Peninsula and peace in the world” as well as an end to hostile U.S. policies. A U.S. White House spokesman stressed that there was still opportunity to move forward with negotiations, stating, “the important thing is that we get a declaration that…needs to be full and complete,” not whether the declaration is made by the deadline.

On January 4, North Korea claimed it had met its obligations to come clean on its nuclear programs, and that it had provided Washington with a list of its nuclear programs in November. Pyongyang also threatened to bolster its “war deterrent” because Washington had failed to provide promised aid following the declaration. Washington denied that any complete declaration had been made.

A senior Russian diplomat was quoted on January 11 as saying that while Russia regrets the slowed state of progress in talks on DPRK nuclear issues, Russia will fulfill its promise to provide the North with fuel oil. 50,000 tons of fuel oil were delivered on January 20~21.

According to a book of figures recently published by the National Statistical Office, ”Comparison of North and South Korean Socio-economic Circumstances”, the DPRK”s crude imports over the past several years bottomed out at 2,325,000 barrels in 1999, then rose to 4,244,000 barrels by 2001. Since 2001, imports have steadily fallen until only 3,841,000 barrels were imported in 2006, recording the least imports in the last five years.

North Korea opened its first online shopping mall in January. The site offers items from fourteen categories ranging from machinery and building materials to stamps and artworks. The site, www.dprk-economy.com/en/shop/index.php, is based in China.

Orascom Telecom, a Cairo-based phone operator, has been granted the first commercial license for provision of mobile phone services in North Korea. The license was granted to CHEO Technology, a subsidiary that is 25 percent-owned by the state-run Korea Post and Telecommunications Corporation.

DPRK Abduction Issue

The Cambodian Foreign Minister announced on January 16 that his country had been working behind the scenes to find a resolution to the DPRK-Japan abduction issue. The minister stated, “Cambodia is in a position where it can hold high-level meetings with North Korea, and it has the ability to persuade North Korea.”

Inter-Korean Affairs

The incoming Lee Myung-bak administration announced on January 4 a plan to develop an international cooperative fund to support North Korea’s economy. The plan is said to call for World Bank and the Asia Development Bank to help, and for South Korea to provide 40 billion USD.

On January 7, it was reported that Lee Myung-bak’s presidential transition team had asked the ROK Unification Ministry to slow the pace of inter-Korean economic projects and to link them to progress in the six-party talks. The incoming administration has promised not to link humanitarian projects such as rice and fertilizer aid to nuclear negotiations.

The Lee Myung-bak administration announced plans for downsizing the South Korean government, including disbanding of the Ministry of Unification. Opposition to the plan points out the role played by the ministry in improving inter-Korean relations, while proponents to the plan of relegating the ministry’s duties to the Ministry of Foreign Affairs and Trade applaud the move to align North Korea policy with standing foreign policy directives.

On January 14, it was reported that Lee Myung-bak had asked the United States to further engage in talks with DPRK military leaders, while presenting a balanced approach, stating that “our people don’t support the idea of giving lavish aid to the North nor do they want to irritate it too much, I believe.” He went on to add that the United States holds the key to easing DPRK fears of opening up.

The net worth of inter-Korean exchanges totaled 1,797,890,000 USD in 2007, up 33% from the 1.35 billion USD in the previous year. The almost 1.8 billion dollars in trade recorded in 2007 is the highest to date, and is equal to 65 percent of the DPRK”s non-Korean trade volume of 2.996 billion USD in 2006.

The Seoul-based International Vaccine Institute announced on January 14 that it will soon begin inoculating approximately six thousand North Korean children against bacterial meningitis and Japanese encephalitis.

The two Koreas began working-level military talks on January 25, marking the first talks of the year. During talks, the North proposed reducing the frequency of the inter-Korean rail services, citing a lack of cargo. The Southern delegation felt that the frequency was an important indication of inter-Korean cooperation. The two sides agreed to continue daily runs, but to reduce the number of empty carriages in the future.

North Korea is still not as attractive to businesses as other Asian neighbors. A survey released by the (South) Korea Chamber of Commerce and Industry on January 28 indicated that China and Vietnam are more attractive to ROK businesses. According to the survey, 80 percent of businesses have difficulties starting or operating businesses in North Korea.

An ROK special envoy returned on January 23 from Moscow after proposing a joint ROK-DPRK-Russian cooperative project in eastern Siberia. President-elect Lee Myung-bak sent a letter to Russian President Vladimir Putin pushing for cooperation of “North Korea’s workforce, Russia’s resources and capital, and [South] Korean technology.”

U.S.-DPRK Relations

On January 9, amidst reports concerning possible DPRK-Syria nuclear connections, it was reported that in 1991 Israel was posed to strike a ship suspected of delivering missiles from the DPRK to Syria, but was dissuaded by Washington.

A U.S. State Department official stated on January 22 that North Korea had met the legal criteria to be removed from the U.S. list of state sponsors of terrorism. This came just after reports of conflicting opinions within the Bush administration, with Secretary of State Condoleezza Rice sharply rebuking Special Envoy on North Korean Human Rights Lefkowitz, who stated that North Korea is not serious about nuclear disarmament. Rice went so far as to say that Lefkowitz “certainly has no say on what American policy will be in the six-party talks,” dismissing his negative position on the failure of North Korea to meet its obligations. The White House later stated that North Korea must make a full declaration of its nuclear activities before being removed from the list.

Five officials from the DPRK recently visited the United States in order to learn how to treat and prevent tuberculosis, a serious concern for the North that is “practically non-existent in most developed countries.” The officials were invited by The Korea Society, which is based in New York.

DPRK-PRC Relations

According to the PRC General Administration of Customs, China’s oil exports to North Korea were the same in 2007 as they were in 2006. China sent 523,160 tons of oil to North Korea in 2007.

A senior PRC Communist Party official traveled to Pyongyang for a meeting with Kim Jong Il on January 30. Wang Jiarui, director of the International Liaison Department of the Chinese communist party, was to convey a message to Kim, inviting him to the opening ceremony of the Beijing Olympics. While Kim reportedly told Wang that there would be no change in the DPRK stance on nuclear negotiations, he also assured the Chinese envoy that North Korea had no intention of harming DPRK-PRC relations.

Posted in China, Civil society, Dams/hydro, Dating/Courting, Demographics, Disease prevention, Energy, Health care, Institute for Far Eastern Studies, Inter-Korean summit, International trade, International/Korean Red Cross, Labor conditions/wages, Nuclear, Pediatrics, Political economy, Trade Statistics, UNDP, USA | Comments Closed

Inter-korean resource deveopment growing

Saturday, February 2nd, 2008

Institute for Far Eastern Studies (IFES)
NK Brief No. 08-12-1-1

Much time and energy has been devoted recently to the promotion of a scheme to further develop North Korean natural resources. In July 2005, the Committee for the Promotion of South-North Economic Cooperation agreed to cooperate in the joint development of the North’s underground resources, and in July of last year a project was launched. A total of 17 agreements with the North have been reached, through which target mines have been selected and inspection methods, time-frames, and other details have been worked out. Many difficulties were faced during negotiations, but through continuous information gathering, it was decided that there was sufficient cause to invest in the project, so a proposal was made and the very first inter-Korean resource development enterprise was launched.

Since last August, forty-seven experts in mining, infrastructure, and other areas have carried out general as well as detailed inspections of all aspects of the Kumduk Zinc Mine and Ryongyang and Daeheung magnesite mines, including infrastructure such as railway and road access, harbor facilities, and electrical capacity. The North was convinced to allow photography and surveying of mining sites, as well as the 90km of rails and roads stretching between the mines and Danchun Station and the nearby Kim Chaek Harbor. Through these surveys, enough information was gathered to satisfy investors, and to publish three volumes worth of inspection reports and pictures.

The Danchun region mining project is one that has been thouroghly prepared through long negotiations and numerous inspections and surveys. Now, based on the results of last year’s surveys, the project’s feasibility study is scheduled to be completed by the end of March. The on-site inspections confirmed the quality and marketability of the mining resources, and the potential for mining development.

In addition, because the mines are currently operational, the risk is much lower than that of an exploratory project. It was assessed that only some parts of the power and railway systems need improvement. Of course, full investment in the project would come about only after completion of the feasibility study currently underway.

A DPRK natural resource development project is necessary for both North and South Korea. For the South, mineral resources can be expanded through investment in production, while the North can benefit economically by increasing production through South Korea’s capital infusion and the introduction of mining technology.

This venture can also play an important role in accomplishing the denuclearization and development plans of the incoming Lee Myung-bak administration. Direct investment in locations in North Korea is the preferred method for advancement of the North’s resources. In particular, investment into energy infrastructure necessary for the processing and transport of these mined goods is preferred over other forms of investment. It is important for South Korea to invest in developing the North’s resources before other outside investors take advantage of the opportunity.

Posted in Institute for Far Eastern Studies, International trade, Mining/Minerals | Comments Closed

DPRK’s largest copper mine flooded with difficulties

Saturday, February 2nd, 2008

Institute for Far Eastern Studies
NK Brief No. 08-1-29-1

It is being reported that North Korea’s Chungnyun Mine, in Hyesan, Ryanggang Province, is facing severe economic difficulties due to floodwater. Hyesan mines produce 80 percent of all North Korean copper, and the North had estimated that it will be able to continue mining copper there for the next forty years. Chinese firms in Hebei’s Luan River region had wanted to import 51 percent of Hyesan Chungnyun Mine’s product, but the deal fell through due to opposition from North Korea’s committee overseeing its second (military) economy.

In 1996, during the North’s ‘Arduous March’, electricity was not provided to the mine, leading to flooding in the mineshafts. Since 1998, Kim Jong Il has budgeted 8.2 million USD to dewater the mine, and the mine was recovered using electricity and equipment provided by China.

The mine resumed operations in May, 2004, and in March of last year even an ore-dressing plant and crushing facility were constructed, indicating that there were high expectations that production would grow. However, as water filled up at the dam for the near-by Samsoo Powerplant, completed in May, the mines began to flood again.

There was no end to criticism that the powerplant, located in Jangan-Ri, Hyesan, Ryanggang Province, was to be constructed on a limestone foundation that would leech massive amounts of water, however, as a result of its construction, despite this opposition, water leaks out of the power station and has flooded the mine.

In the event that North Korea abandons the Hyesan Chungnyun Mine, it will be faced with the difficulty of needing to import the large amounts of copper required by the manufacturing industry. As this mine began to flood, North Korea has begun to import most of the copper necessary for its economy from Chile.

Currently, there is no feasible way to technically restore the mine, so as senior authorities in the North are demanding that the mine be saved at any cost, those in charge of operations are said to be uneasy.

Posted in China, Copper, Finance, Foreign direct investment, Institute for Far Eastern Studies, Mining/Minerals | Comments Closed

DPRK Unification Front envoy tours ROK industries

Friday, December 7th, 2007

Institute for Far Eatern Studies
NK Brief No. 07-12-5-2
12/7/2007

Kim Yang-gon, head of the DPRK Workers’ Party Unification Front department, led a North Korean delegation to the South, and after two nights and three days, returned to the North on December 1. The last time a North Korean head of the KWP’s Unification Front department visited the South was seven years ago, when, in September 2000, Kim Yong-soon visited Cheju Island. Government authorities are saying that Kim’s trip to the South was publicized in order to facilitate the smooth implementation of the 2007 inter-Korean Summit Declaration

On the day Kim’s delegation arrived, the group visited the Songdo Free Trade Zone, where he and his delegation were moved by a presentation by officials explaining the value of an Inchon-Kaesong-Haeju ‘West Sea Belt’. On the second day, the group visited Daewoo shipyards in Koje, the Busan Customs House, and other facilities.

The trip was reminiscent of when DPRK Cabinet Prime Minister Kim Young-il led a group of more than thirty North Korean entrepreneurs to Vietnam last October, spending four nights and five days walking around tourist areas, an export-processing zone, port facilities, and other industrial areas.

The Unification Front department is but one department within the Workers’ Party responsible for policies toward the South and other countries. Unlike the foreign liaison department, Office 35, and the strategy office, the Unification Front operates openly, but distribution of propaganda leaflets, management of pro-North groups, enticement of overseas Koreans, and other activities are also underway.

The trip South by Kim’s delegation happened just before ROK presidential elections, and highlights the fact that there is barely a month left before North Korea must have its nuclear program frozen and fully disclosed. Kim’s trip to the ROK was promoted and publicized from the beginning, but little information was given to the press, other than coverage of tours of economic facilities.

Posted in Economic reform, Institute for Far Eastern Studies, Political economy, United Front Department | Comments Closed

First underground DPRK journal launched

Friday, November 30th, 2007

Institute for Far Eastern Studies (IFES)
NK Brief No. 07-11-30-1
11/30/2007

The first bi-monthly magazine reporting internal news directly through North Korean undercover journalists was launched on November 20th. The Korean language magazine, “Rimjingang,” is also expected to launch in English and Japanese by the end of this year. The inaugural issue contains interviews with staff members of the central state enterprise on current North Korean economic issues, public sentiment following the North Korean missile launch last year, interpretations of the North Korean internal image, as well as reports on local occurrences and accidents.

Once news is directly gathered and prepared by North Korean residents, the manuscript is then sent to the outside world where it is printed as the “Rimjingang” magazine. This magazine’s inaugural press conference was held at the Seoul Press Center on the afternoon of November 20th. The conference attracted enthusiastic coverage, with over 30 domestic and international press corps members in attendance, including Fuji TV and international wire services such as AP and Reuters.

With the help of Japan’s Asia Press, the North Korean journalists involved in the production of “Rimjingang” have been filming local footage, conducting interviews with residents, and recording the daily debriefing sessions of citizens for the past five years. Much of the video footage currently distributed to South Korea and Japan has been recorded by the journalists themselves.

Magazine publication officials revealed that the “Rimjingang” would also be distributed within North Korea. They added, “the North Korean reporters seek subject matter that reflects how North Korean people live, what they think, and what they want,” and, “the only real evidence that reflects how North Korea is changing is given through the North Korean people.”

There are currently 10 North Korean journalists affiliated with “Rimjingang.” The diverse list includes a staff member of the central state enterprise, a schoolteacher in his thirties, a worker from a foreign currency earning company, the first journalist to release his pen name to the outside world, a resident in her forties from Pyongan Province, and journalist in his thirties from South Hamkyeong Province.

An official from Asia Press said, “Over the years, more than 600 North Korean defectors have been interviewed around the China-North Korea border,” and, “there have been a few among them with intentions, like us, of delivering news from within North Korea to the outside world, so we have been training them in journalism since 2002.”

“We explained to them what ‘journalism’ was, and taught them the format of news articles as well as the operation of video camera..they then returned to North Korea and began gathering news, and since 2004, some of the news they collected has been released through Japanese and Korean press, as well as U.S. and European press.”

Posted in Civil society, Domestic publication, Institute for Far Eastern Studies, Rimjingang | Comments Closed

Recent DPRK market restrictions extended to mobility of the people

Tuesday, November 27th, 2007

Institute for Far Eastern Studies
NK Brief No. 07-11-27-1
11/27/2007

Following Kim Jong Il’s August 26 announcement that, “Markets have become anti-Socialist Western-style markets,” measures to increase restrictions on markets across North Korea have also restricted individuals’ ability to migrate.

The Central Committee of the (North) Korean Workers’ Party released a statement in October, revealing that Kim Jong Il had stated, “The current state of anti-socialism should not be moderately opposed. A strong and concentrated attack must be laid out in order to thoroughly eliminate [this anti-socialist behavior].”

According to the Daily NK, an informant inside North Korea revealed that authorities are “contacting people who have applied for permission to travel to other regions at their trip destination and setting up interviews in order to verify that interviewees are conforming with their [stated] intentions,” and, “ultimately, long distance wholesalers are restricted in their movements, cause a reduction in the amount of goods circulating on the markets.”

Good Friends, a South Korean NGO for North Korean aid, also reported, “In North Hamgyung Province, if someone is absent from work for two days or not seen in their neighborhood, that person’s actions are carefully investigated,” and, “if someone does not check out, each of their family members are called in for interrogation.”

After the ‘Arduous March’, as market activity grew in North Korea, the number of whole-saling ‘middle-men’ grew considerably. These traders received travel permits by applying under the guise of visiting authorities, family matters, special occasions, or other personal reasons. Long-distance traders need a travel permit. In order to get such a permit, cash or goods were frequently offered as bribes.

Now, as it is becoming more difficult to receive travel documents, not only long-distance traders but also even normal vacationers are facing growing difficulties. In particular, people who need to travel to China for family visits are especially worried due to the increasingly strict issuance of travel permits.

The insider reported, “As markets grow, because wholesalers are gaining power as they make large amounts of money, authorities seem to be strongly restraining them,” and “if a wholesaler is caught, his goods are taken, leading to difficulties for market traders.”

According to a North Korean defector in the South with access to DPRK information, university students in Pyongyang are also being subjected to increasingly strict personnel inspections and restrictions. Even when they go to the library, they must fill out an exit record and can only remain out for one day before student leaders pay a visit to their home.

Students not strictly obeying school policies have their bags and pockets searched while being put under investigation and being further restricted. Of course, in the past, as well, students with problems faced inspections of their dormitory or personal goods, but recently, inspections of even everyday students are on the rise.

Posted in Arduous March, Black markets, Civil society, Domestic publication, Economic reform, Education, General markets (FMR: Farmers Market), Institute for Far Eastern Studies, Worker's Party | Comments Closed

Unemployment Grows as DPRK Businesses Reject Hiring Regulations

Tuesday, October 23rd, 2007

Institute for Far Eastern Studies
NK Brief No. 07-10-23-1
10/23/2007

DPRK authorities are quick to stress that not one single unemployed worker can be found in Socialist North Korea. The truth is, however, unemployment has existed in the past, and now out-of-work laborers are taking on a new form.

With the exception of a small minority of North Koreans, most citizens are assigned professions and dispatched to their place of employment by DPRK authorities with no regard to personal aptitude or skills. This has led to the refusal of some to take assignments in mines, shipyards, and other undesirable factories, creating a group of ‘non-workers’.

However, today’s unemployed are different from the unemployed found in the 1980s and 90s. In the past, these workers refused positions at undesirable factories. In the late 1990s, with the cessation of food rations and lack of job positions, a good number of factories and businesses shut down operations, leading to an increase in unemployment. Now, it is the mines, companies, and yards that are refusing to take on new workers.

Currently, North Korean authorities are tasking managers of organizations and companies with the responsibility of feeding employees. Anyone with the skills and the money can become a manager. Authorities assess whether someone can provide wages and rations for employees, and if so, will put them in charge. However, the order that “Managers not able to carry out the task of feeding [employees] will be released or demoted” has been passed down, putting a considerable burden on executives and managers. As they are now responsible for both the wages and the rations of their employees, these managers are not looking to take on new workers. This is problematic for those dismissed from military service with little or no trade skill, and for those receiving only a middle-school education, especially women. These citizens are turning to trade to provide a living.

Posted in Civil society, Institute for Far Eastern Studies, Labor conditions/wages, Light Industry, Manufacturing, Political economy | Comments Closed

DPRK Economic Policy One Year after Nuclear Test

Thursday, October 18th, 2007

Institute for Far Eastern Studies (IFES)
NK Brief No. 07-10-18-1
10/18/2007

One year after the DPRK nuclear test, North Korea is still focusing all of their policy efforts on restoring their economy. North Korean leaders are convinced that an economic revival is crucial for the survival and stability of their regime.

The DPRK stated in this year’s New Year Joint Editorial, a publication that presents the regime’s policy direction for the year, that “the founding of a strong national economy is a crucial requirement for the revolution and advancement of our society, and is a historic undertaking toward becoming a fully prosperous and powerful nation.” The emphasis on “focusing all the state’s efforts on solving the economic issue,” was indicative of their sense of imminence regarding economic revival.

The Joint Editorial presenting the DPRK’s national goal of “founding a strong national economy” came out three months after the October nuclear test, which took place just over one year ago. Since its publication, the North Korean media has been stressing that the DPRK already realized powerful military strength and strong political ideology, and must now strive to establish a strong national economy. The military might of the nation was epitomized by the success of the nuclear test.

A copy of the North Korean quarterly publication “Politics & Law Review” obtained on September 14th emphasized the need to establish a strong national economy, stating that “without a strong national economy, it is impossible to strengthen the forces of political ideology and military power,” and, “the only way to block the infiltration of economic imperialism is by strengthening economic power.” It also added that “if we are weaker than South Korea, we will naturally look to them and depend on them.”

North Korean press claims that Kim Jong Il’s decision to carry out a nuclear test was the reason the 6-party talks have been working since January’s meeting between the United States and the DPRK in Berlin, thus easing tensions on the Korean peninsula by ameliorating the U.S.-DPRK relationship and advancing inter-Korean relations. The fact that 18 out of 55 public appearances (a significantly higher proportion than that of last year) made by Kim Jong Il this year were visits to economic bureaus also reflects North Korea’s economic ‘all-in.’ North Korea’s pro-active movement toward ameliorating relations with the United States, and its determination to expand inter-Korean economic cooperation, all stem from its urgency to develop their economy in order to stabilize their regime.

Posted in Domestic publication, Economic reform, Institute for Far Eastern Studies, Juche, Kim's New Year Address (Joint editorials), Songun | Comments Closed

North Korean Economy Watch