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DPRK establishing yearly economic development plans

Monday, January 12th, 2009

Institute for Far Eastern Studies (IFES)
NK Brief No. 08-1-9-1
1/9/2009

The Jochongryeon mouthpiece, Chosun Sinbo, reported on January 5 that North Korea is working to boost economic production by establishing “concrete attainment goals” in each sector in a “yearly, phased plan” from last year until 2012 in order to reach the goal of establishing a “Strong and Prosperous Nation” by the 100th anniversary of the birth of Kim Il Sung. The paper reported that the North had not made an official announcement regarding this plan, but that it was currently in the process of implementing a 5-year economic development plan

In the textile industry, North Korea is focusing efforts on upgrading equipment in five weaving factories, including major sites in Pyongyang and Sariwon, with the goal of increasing cloth production 400 percent by 2012. The newspaper also reported that North Korea is aiming to increase coal production over the next few years, with the goal of reaching 1980s-levels of production. Coal production peaked in 1989 at 43 million metric tons, and it is estimated that North Korea has over 20 billion metric tons of coal reserves, but the Bank of (South) Korea estimates that in 2007, the North mined a mere 24.1 million metric tons of coal due to a lack of electricity and spare parts. Many of North Korea’s coal reserves are below the waterline, and require constant electricity in order for pumps to maintain an environment in which mining can take place. Last year, in order to boost coal production, North Korea increased budget allocations for energy, coal and metal industries by nearly 50 percent.

This year’s New Year’s Joint Editorial placed heavy emphasis on the metals industry, and emphasized that efforts last year to modernize equipment and improve technology increased 2008 steel production by 150 percent at the Chollima Steel Complex and the Kim Chaek Iron and Steel Complex. The newspaper stressed that these plans were not merely wishful thinking, but that they were “the basis for meaningful achievements,” pointing out that last year, the North Korean cabinet increased investment into both basic industries and vanguard enterprises 49.8 percent. In 2008, North Korea either refurbished or newly constructed over 140 new production facilities, and, “in particular, actively promoted metal, instrument, science, and light industrial sectors.”

According to the newspaper, North Korea would continue to promote economic development in the new year, as well, citing the current global economic crisis and the need to build an independent economic foundation not reliant on South Korea.

Posted in 2012 Strong and Prosperous Nation (Kangsong Taeguk), Chollima Steel Kombinat, Chongryun, Domestic publication, Institute for Far Eastern Studies, Japan, Kim's New Year Address (Joint editorials), Light Industry, Manufacturing | 1 Comment »

DPRK Law on Foreign Investment

Thursday, January 1st, 2009

From Naenara:

Adopted by the resolution of the Standing Committee of the Supreme People’s Assembly (SPA) on Oct. 5, 1992, and revised and supplemented by the decree of the SPA Presidium on Aug. 19, 2008

_________________________________

Article 1. Mission and status

This Law contributes to encouraging investment by foreign investors in the DPRK and protecting legal rights and interests of foreign-invested businesses.

The Law is the basic law relevant to foreign investment.

Article 2. Definition of terms

1. A foreign investor is a corporate body or an individual of a foreign country that invests in the territory of the DPRK.

2. Foreign-invested businesses include foreign-invested enterprises and foreign enterprises.

3. A foreign-invested enterprise stands for an equity or contractual joint venture or a wholly foreign-owned enterprise that are set up in the territory of the DPRK.

4. A foreign enterprise indicates an institution, enterprise, individual or other economic organizations from foreign countries with a source of income in the territory of the DPRK.

5. A contractual joint venture is a form of business activity in which investors from the DPRK and a foreign country jointly invest, the management is assumed by the partner from the host country and, depending on the provisions of the contract, the portion of the investment made by the foreign investor is redeemed or the share of the profits to which the foreign investor is entitled is distributed to him.

6. An equity joint venture is a form of business activity in which investors from the DPRK and from a foreign country invest jointly, operate the business jointly, and profits are distributed to the investors in accordance with the shares of their investment.

7. A wholly foreign-owned enterprise is a business enterprise in which a foreign investor invests and manages on his own account.

Article 3. Location

A foreign investor shall be permitted to set up and operate an equity or contractual joint venture within the territory of the DPRK, and a wholly foreign-owned enterprise in the specified area.

Article 4. Protection of rights and interests, provision of their management conditions

The State shall guarantee the legal rights and interests of foreign investors and foreign-invested businesses, as well as the conditions of their management activities.

Article 5. Parties to investment

Institutions, enterprises, individuals and other economic bodies of foreign countries shall be permitted to invest within the territory of the DPRK.

Overseas Korean compatriots shall also be allowed to invest within the territory of the DPRK, subject to the relevant laws and regulations.

Article 6. Sectors and forms of investment

A foreign investor shall be allowed to invest in various sectors such as industry, agriculture, construction, transport, telecommunications, science and technology, tourism, commerce and financial services in various forms.

Article 7. Priority sectors

The State particularly encourages investment in sectors that introduce modern technologies including the high technology, sectors that produce internationally competitive goods, the sectors of resource development and infrastructure construction, and the sectors of scientific research and technical development.

Article 8. Preferential treatment

Those foreign-invested enterprises that invest and operate in priority sectors stipulated in the previous Article shall receive preferential treatment, including the reduction of and exemption from income and other taxes, favourable conditions for land use, and the preferential supply of bank loans.

Article 9. Preferential treatment in the Rason economic and trade zone

Those foreign-invested enterprises that are established in the Rason economic and trade zone shall receive preferential treatments as follows:

1. No customs duty shall be levied on export and import goods other than those items that are prescribed by the State.

2. For an enterprise in a production sector, no income tax shall be payable for 3 years from the first profitable year and income tax may be reduced by up to 50 per cent for the following 2 years. The rate of income tax shall be 14 per cent, which is lower than in other areas.

Article 10. Immigrations in the Rason economic and trade zone

The State shall ensure that the relevant institutions make convenient the immigration formalities and methods for foreign investors entering or leaving the country with the purpose of setting up or operating business enterprises in the Rason economic and trade zone.

Article 11. Prohibition and restrictions on investment

The projects where investment shall be prohibited or restricted are as follows:

1. Projects which endanger the national security or injure public morals of the nation

2. Projects geared to resource export

3. Projects that are inconsistent to the specific standards for environmental protection

4. Technically obsolete projects

5. Projects with low profit

Article 12. Investment property, property rights

A foreign investor may invest in the form of currency, property in kind, industrial property rights, technical know-how and other assets and property rights. The value of assets and property rights invested shall be determined through an agreement between the partners on the basis of the international market prices prevailing at the time of the valuation.

Article 13. Establishment of a branch office, representative office and agency

Foreign-invested enterprises shall be permitted to open branch offices, agencies or liaison offices and to establish subsidiaries in the DPRK or other countries. They shall also be permitted to conduct joint operations with companies in other countries.

Article 14. Legal capacity

Equity or contractual joint venture enterprises and wholly foreign-owned enterprises shall become corporate bodies of the DPRK. Foreign enterprises and their branches, agencies and liaison offices that are set up within the territory of the DPRK shall not become corporate bodies of the DPRK.

Article 15. Term of land lease

The State shall lease the land required for foreign investors and the establishment of foreign-invested enterprises for a maximum period of 50 years.

Land so leased may be transferred or inherited during the period of lease with an approval of the relevant organ.

Article 16. Employment and dismissal of labour

A foreign-invested business shall employ its labour force from the host country. Managerial personnel, technicians and skilled workers for special jobs that are prescribed in the contract may be employed from abroad in agreement with the central trade guidance organ.

Labour force of the DPRK shall be employed or dismissed according to a contract made with the relevant labour service agency.

Article 17. Taxation

Foreign investors and relevant foreign-invested businesses shall pay income tax, turnover tax, property tax and other taxes.

Article 18. Reinvestment

Foreign investors shall be permitted to reinvest the whole or part of their profit within the territory of the DPRK.

In such cases the whole or part of the income tax already paid on the reinvested portion may be refunded.

Article 19. Protection of invested property

Foreign-invested enterprises and assets invested by foreign investors shall not be subject to nationalization or seizure by the State.

Should unavoidable circumstances make it necessary to nationalize or seize such enterprises and assets, fair compensation shall be paid.

Article 20. Remittance

Legal profit and other incomes earned by a foreign investor in its business may be remitted abroad, subject to the laws and regulations of the DPRK relating to foreign exchange control.

Article 21. Confidentiality

The State shall protect by law the business secrets of foreign-invested enterprises and shall not disclose them without the consent of the foreign investor.

Article 22. Settlement of disputes

Any disagreement concerning foreign investment shall be settled through consultation.

In case of failure in consultation, it shall be settled by arbitration or legal procedures provided by the DPRK or may be brought to an arbitration agency in a third country for settlement.

Preferential Treatment for Investment in Priority Sectors
From Naenara:

Article 8 of the Law of the Democratic People’s Republic of Korea on Foreign Investment specifies that the foreign-invested enterprises that invest and operate in priority sectors shall receive preferential treatment, including the reduction of and exemption from income and other taxes, favourable conditions for land use, and preferential supply of bank loans.

In accordance with the law, the DPRK government grants such preferential treatment as the reduction of and exemption from taxes and favourable conditions for land use to foreign-invested enterprises that invest in priority sectors, enterprises that are established and operated with the investment by overseas Koreans with the citizenship of the DPRK and foreign-invested enterprises that are operated in the special economic zone.

Preferential treatment in the rate of enterprise income tax is as follows.

1) Preferential treatment

– The rate of enterprise income tax of a foreign-invested business is 25 per cent of the taxable income but that of a business funded by an overseas Korean holding the citizenship of the DPRK is 20 per cent. (No. 1 of Article 20 of the Regulations for the Implementation of the Law of the Foreign-invested Business and Foreign Individual Tax)

– The rate of enterprise income tax of a foreign-invested business operating in the Rason economic and trade zone is 14 per cent of the taxable income but that of a business funded by an overseas Korean with the citizenship of the DPRK is 10 per cent. (No. 2 of Article 20 of the Regulations for the Implementation of the Law of the Foreign-invested Business and Foreign Individual Tax)

– The rate of enterprise income tax of a foreign-invested business engaged in the State-encouraged sectors—high technology, development of underground resources, infrastructure construction, scientific research and technological development is 10 per cent of the taxable income. This rate is 10 per cent lower than that of other income taxes of a foreign-invested business. (No. 3 of Article 20 of the Regulations for the Implementation of the Law of the Foreign-invested Business and Foreign Individual Tax)

– When a foreign enterprise earns other incomes such as income from dividends, interests, rent, royalties or other sources in the territory of the DPRK, such incomes shall be taxable at the rate of 20 per cent in other parts of the country and 10 per cent in the Rason economic and trade zone. (Article 10 of the DPRK Law on Foreign-invested Business and Foreign Individual Tax)

2) Privilege

Article 29 of the Regulations for the Implementation of the Law of the Foreign-invested Business and Foreign Individual Tax stipulates that:

-Tax may not be imposed on the dividends earned by a foreign-invested enterprise through business activities inside the DPRK.

– In case the government of a foreign country or an international financial organization grants loans to the government of the DPRK or a State bank, or in case a foreign-invested bank gives loans to a bank or an enterprise of the DPRK on favourable terms such as low interest rates (lower than the LIBOR) and the return period of at least 10 years including a grace period, the enterprise income tax on the interest on the loan may be exempted.

-The foreign-invested business which operates for at least 10 years either in the priority sectors or in the manufacturing sectors inside the Rason economic and trade zone may receive immunity from enterprise income tax for 3 years from the first profit-making year and reduction of up to 50 per cent during the two ensuing years.

Enterprise income tax may be exempted or reduced on an income earned by a financial business through offshore banking transactions.

-For a foreign-invested business that makes a total investment of at least 4 500 000 000 won in infrastructure construction projects such as railways, roads, telecommunications, airports and seaports inside the Rason economic and trade zone, enterprise income tax may be exempted for 4 years from the first profit-making year and reduced up to 50 per cent during the three ensuing years.

Posted in DPRK Policies, Economic reform, Foreign direct investment, Law on Foreign Investment | Comments Closed

DPRK to continue economic slide

Saturday, December 27th, 2008

Quoting from The Nation:

“North Korea had a little boost this year, due largely to its farm, mine and electricity and gas sectors,” the Hyundai Research Institute (HRI) said in its 2009 report on the communist nation’s economy.

North Korea’s farm production increased by 7.5 per cent, from 4.01 million tonnes in 2007 to 4.31 million tonnes forecast for 2008, according to South Korea’s Rural Development Administration (RDA).

“This year, North Korea’s weather conditions have enabled modest harvest growth,” said Ha Un-Gu, a researcher at RDA.

The delivery of energy aid from the United States, China and Russia was cited by the HRI report as a boost for North Korea’s gas and electricity sectors.

In 2008, North Korean trade with China has grown at a pace strong enough to offset its shrinking trade with Thailand. “So North Korea is forecast to post a record trade volume of 3 billion US dollars in 2008,” the HRI said.

However, North Korea’s 2012 target is becoming elusive, as the country’s trade volume is forecast to slide back from its peak of 3 billion dollars in 2008.

Liquidity problems of key trading partners China and Thailand will make it hard for them to maintain their economic ties with North Korea.

North Korea’s business ties with China were forecast to undergo a particularly steep decline, the HRI said.

North Korea’s trade volume with China increased by 25 per cent to 1.19 billion dollars during the January to June period in 2008, compared to same period in 2007, according to Shin Jeong-Seung, the South Korean ambassador to China.

Download the study (PDF in Korean) here.

Read the full article here:
North Korea’s economy is forecast to resume its slide
The Nation
12/27/2008

Posted in 2012 Strong and Prosperous Nation (Kangsong Taeguk), Agriculture, Agriculture statistics, Foreign aid statistics, International Aid, International trade, Mining/Minerals, Statistics, Uncategorized | Comments Closed

North Korean Revolutionary Merit Competition

Tuesday, December 23rd, 2008

Daily NK
Lee Sung Jin
12/23/2008

North Korea, since December 3rd, has been holding a “Competition for Revolutionary Descendants” in each province, over two days. The competition is the third of its kind, following on from 1998 and 2002.

A source confirmed in a phone conversation with the Daily NK on the 21st, “In Hyesan, Yangkang Province, from December 3rd, there was a “Competition for Revolutionary Descendants.” This competition took place simultaneously in each province.”

Another source said, “There was a competition in Chongjin, North Hamkyung Province in early December and many gifts, including clothing, were given out to the participants.”

The competition was held to stabilize the volatile state of affairs, spurred by rumors of Kim Jong Il’s illness, issues of food shortages, and the distribution of flyers in North Korea, by intercepting in advance any possible unrest among the core class.

(* North Korea categorized the population into the “core class (3,915,000),” the “unstable class (3,150,000),” and the “hostile class (7,935,000)” in 1971)

The Yangkang-based source said, “The competition was held with participation from the Party Chief Secretary of the province, the key officials in the province, city and county and chairpersons of the Peoples’ Units, descendants of revolutionaries and war veterans were invited to the competition.”

He then said, “Rather than being a real competition, it was a gathering to provide meals and distribute gifts. On the morning of the third day, after a flower-basket presentation ceremony at the Kim Il Sung memorial at the Bocheonbo Combat Victory Monument, a meeting was held at the Kim Jong Suk Arts Theater.”

He further noted, “At the meeting, there was a political lecture given by the new Propaganda Secretary of the Party in the Province Kim Bong She, after the congratulatory address by the Chief Secretary of the Province. Kim closed the event with a speech urging emulation of the lofty example of the first generation of revolutionaries, who devoted everything to the General.”

According to the source, after the event wrapped up its main events on the afternoon of the 3rd, it continued until the evening on the 4th with a special performance by the Yangkang Provincial Performing Arts Troupe, a special banquet, a visit to the Yangkang Province Revolutionary Historical Site, and a ceremony for presenting gifts.

The source said, “The authorities put in a lot of preparation for the event. They even brought beer, luxury alcohol and cigarettes from Pyongyang for the competition participants. Also, there were special performances at the Yalu Restaurant, a famous restaurant in Hyesan, at the Hyesan Shopping Center restaurant, and at restaurants in various train stations.”

The source explained, “The officials went out of their way to shake hands with the competition participants and urged, ‘In such difficult times, we have to submit to the guidance of the General.”

He said, “At the competition, the issue of the Party’s active support for the children of deceased revolutionaries and needing to look after their needs was raised more than once. In particular, the provision for and subsistence of the descendants, due to difficult economic conditions, had been neglected, but the promise was made that, from now on, the Party in Yangkang Province would take an interest in and resolve the issue.”

Posted in Political economy, Songbun, Worker's Party | Comments Closed

North Korea between collapse and reform

Friday, December 19th, 2008

Asian Survey Vol. 39, No. 2 (Mar. – Apr., 1999), pp. 287-309
Kongdan Oh and Ralph Hassig

Download PDF here or download from Jstor.org here

The refusal of North Korea’s letters to institute serious economic reforms has frustrated those who study the country and those who seek to alleviate the suffering of the North Korean people. Two French medical aid organizations have withdrawn from the country complaining that the Pyongyang government interfered with their work. This is but one sign of a growing donor fatigue. The muddling through plan that the Kim regime has adopted involves soliciting foreign aid, bargaining with its military and nuclear products, making minimal unofficial changes in the domestic economy, and waiting for the international environment to become more favorable—perhaps even expecting a resurgance of international communism. Equally important, Kim and his ruling cohorts are willing to sacrifice the economic health of their nation for the security of their regime, just as other dictators, both communist and non-communist have done. The painful difference in North Korea’s case is that it is half of a divided nation, posing an immediate humanitarian dilemma for the millions of Koreans in the Southern half of the penninsula whose families are suffering in the north. For this reason more than any other, the future of North Korea cannot be ignored.

Posted in 1990s Famine, 2002 Economic reforms, Agriculture statistics, Arduous March, Black markets, Demographics, DPRK Policies, Economic reform, Emigration statistics, Food, Foreign aid statistics, GDP statistics, General markets (FMR: Farmers Market), Juche, Rason Economic and Trade Zone (Rajin-Sonbong), Special Economic Zones (Established before 2013), Statistics, Trade Statistics | Comments Closed

DPRK reemphasizes priority development of national defense industries

Monday, December 8th, 2008

Institute for Far Eastern Studies (IFES)
NK Brief No. 08-12-8-1
12/8/2008

The North Korean online magazine ‘Our Nation (uri minjokkiri)’ emphasized on January 1 that development of national defense industries would be prioritized, stating that it was “the best way to move forward and harden a strong national defense while at the same time developing the entire economy.”

In an article titled, “The Path to Economic Construction of the Military-first Era,” the website reminded the reader of the goal of building a strong and prosperous nation by 2012, and stated that Kim Jong Il had said that building up the economy was the “main line of construction for the building of a Strong and Prosperous Nation.” It went on, “Today’s era is the era in which the national economic strength is determined by the amount of development of the national defense industries,” and, “National defense industries are in a leading position, while the independent establishment of the core economic structure is necessary, and a strong economic base can be constructed.”

The magazine emphasized, “The might of heavy industry can be further strengthened following the completion of the basis of the national defense industries, also ceaselessly developing light industry and agriculture.” The article also stressed that as North Korea’s national defense industries are at a comparatively high level internationally, matching that of the United States, and that he national economy overwhelming potential is easy to see.

The article noted that today’s military competition between nations is practically scientific and technological competition, and, “strengthening of national defense in every way based on science and technology, and establishing a framework of science and technology and deciding to quickly develop a strong and prosperous nation by focusing on science is really the path for building the economy in the Military-first Era.”

The magazine emphasized that this military-first era economic building plan was “truly for the people, and was the most civic path to prepare national economic strength for public services.” “In accordance with changes in the political atmosphere and actual conditions, the amount of energy applied to building of national defense and economic construction, citizens’ livelihoods, or other realms could vary, but the true requirement of the building of the socialist economy is to ceaselessly raise the level of the livelihoods of the people, and ultimately, this goal can never waver.”

Posted in Domestic publication, Economic reform, Light Industry, Manufacturing, Military, Songun | Comments Closed

Idolization Ever Increasing

Friday, December 5th, 2008

Daily NK
Park Hyun Min
12/5/2008

The North Korean authorities have been expanding the construction of facilities that laud and idolize Kim Il Sung and Kim Jong Il throughout North Korea, in order to unite the people in spite of the severe economic crisis.

Up until the end of the 1990s, North Korea had been focusing on creating “revolutionary memorial halls” or ‘historic sites,’ or erecting statues in order to idolize the Kim family.

The main structure of idolatry, above all, is the Kim Il Sung statue. Among all the statues, the one in front of the Museum of Korean Revolution on the top of Mansudae hill in Pyongyang, erected in April 1972 to celebrate Kim Il Sung’s 60th birthday, is best-known. It is 23 meters (75.5 feet) high, including a 3 meter pedestal. The statue was once covered with gold, but it was removed.

Similar, less grandiose statues are located in all 70 major cities of North Korea. In total, there are 140,000 structures designed to idolize the Kim regime.

Especially after the death of Kim Il Sung, and the succession of Kim Jong Il three years later, in 1997, many mosaic murals were created throughout North Korea with the father and the son as the theme, and many of the revolutionary monuments were erected.

Mosaic murals mainly feature Kim Il Sung, the father with Kim Jong Il and Kim Jong Il’s mother, Kim Jung Sook, made with glass or tiles of natural rocks baked at 1,200.

According to reports from the North Korean state-run media since 2000, one mural was made in 2000, four in 2002, then the number increased to 19 in 2003, 49 in 2004, and a sharp increase to 70 in 2005. Then in 2006, 55 murals were made while 67 were made last year. 88 murals have been made this year alone.

Furthermore, the size of the mosaic murals is growing. On average, the length and height of a mural is 5–10 meters. However, bigger murals with dimensions of 30 meters by 20 meters have been under construction.

The most well-known murals are located on Tongil (Unification) Street in Raknang district and on Kwangbok Street in Mankyungdae district in Pyongyang. The one on Kwangbok Street was made to celebrate Kim Sung Il’s 95th birthday in April, 2008, and goes by the name of “My great country, my nation, live forever.” The height and length of the murals are respectively 42 meters and 25 meters.

The other mural that was completed on Tongil Street the day before that was 33.7 meters long and 22 meters high.

Chosun Sinbo reported with great fanfare, “These murals are the biggest mosaic murals in the nation.”

Revolutionary monuments or historic memorials at places where Kim Il Sung or Kim Jong Il are known to have been, are being made constantly.

North Korea put up 31 revolutionary memorial slabs last year in places such as Pyongyang Music School or Pyongyang Shoe Factory, and 37 so far this year, in places like Suncheon First Middle School and Kangkye Pig Factory. Last year, revolutionary monuments were erected in five places, including the public building of the People’s Safety Agency in North Hamkyung Province and so far four monuments have been erected in places like Pyongyang 3.26 cable factory.

Jane Portal, the author of “Art under Control in North Korea” visited North Korea twice and assessed this idolatry as the world’s most intense, saying that Stalin and Mao Zedong’s idolatry cannot be compared with Kim Il Sung’s hunger for praise.

Additionally, North Korea is focusing on boosting people’s loyalty and revolutionary consciousness through collective visits to these historic sites, and by excavating or renovating them.

Chosun (North Korea) Central Broadcasting (the state-controlled radio station) last month hinted at the strengthened idolization process, saying that “Plans to revive historic sites in North Hamkyung province and the efforts of party members and laborers working on these projects are processing well.”

Posted in Advertising, Juche, Political economy | Comments Closed

Pyongyang changes official narrative on South

Monday, December 1st, 2008

In a recent Korea Times article, Andrei Lankov (citing Brian Myers) highlights how the DPRK has changed the narrative of its raison d’être in response to the growing realization among its people that South Korea is not the poor, exploited US colony the propaganda portrays it to be.

Quoting from the article:

Until some time a decade ago, the North Korean populace was expected and required to believe in a very simple world picture.

The North, led by the glorious dynasty of omniscient and benevolent rulers, was the best society on the face of the Earth, much envied and glorified by the less fortunate peoples of other countries.

The rest of the world was inferior, though people in the socialist countries admittedly fared better than the helpless inhabitants of the capitalist hell.

But worst of all was South Korea, the colony of the U.S. imperialists who exploited it with unparalleled brutality.

However, around 2000 the North Korean watchers (well, actually a handful of them with the time and ability to read the official press systematically) began to notice a new image of the South emerge.

Brian Myers, the ever observant reader of North Korean press and fiction first noticed the signs of this quiet transformation when it was only beginning.

Soon it became clear that he was right. A new propaganda line was being born. Interestingly, this time the new line was introduced not through newspapers, but in a more subtle way, through works of fiction, which also have to be approved by the supreme ideological authorities.

The new South Korea which emerged in these writings wasn’t so poor. Actually, it was not poor at all. The characters in recent North Korean novels, which deal with the imaginary life of the South, enjoy a lifestyle far superior to that of the average North Korean. They drive cars, dine out easily and live in expensive houses.

As Myers pointed out, the North Korean authors have poor ideas of how expensive Seoul real estate has become, so they sometimes overestimate South Korean’s income levels. In one novel, a young South Korean journalist buys a house in a very expensive neighborhood after merely a few years of work.

Does this mean that the new image of the South is positive? Of course not! South Korean society might be rich, the propaganda operators say, but it is still inferior to the North.

The South Koreans had to pay a terrible price for their success: they were deprived of their precious national identity.

The cultural uniqueness and racial purity of the great Korean nation has become endangered. Mixed marriages are mentioned frequently and in a way that makes readers believe they are between the same lusty Americans and young Korean women.

However, the propaganda insists, the South Koreans themselves are not happy about this situation. They dream about liberation and purification, and their hopes are pinned on Pyongyang and, above all, the Dear Leader himself. In recent years, North Korean propaganda has insisted that Kim Jong -il is worshipped in the South. Similar statements were made earlier as well.

According to this new logic, the North is a torchbearer, a proud protector of nationhood and racial purity. South Korean prosperity is tainted and hence should not be envied.

The North must fight for the ultimate salvation of the South, and such salvation can be achieved only through unification under the North Korean auspices, so all South Koreans will be able to enjoy the loving care of the Dear Leader. Only American troops and a handful of national traitors prevent this dream from coming true.

Lankov (and Myers) speculate that the North Korean government changed the narrative in response to unauthorized information permeating the country. In a related note, the overt propaganda in many North Korean films has also been reduced in recent decades.

Most importantly, Lankov reminds us that nationalism is not a viable long-term political strategy—even in North Korea. North Korean Juche was supposed to liberate the Korean people and deliver on material progress, but it has not succeeded. From top to bottom, many North Koreans already know this.

Posted in Advertising, Animation, Domestic publication, Film, Juche, Political economy, Television | 1 Comment »

DPRK authorities reclaim plots for tree planting

Tuesday, November 18th, 2008

Institute for Far Eastern Studies (IFES)
NK Brief No. 08-11-18-1
11/18/2008

The South Korean civic organization ‘Good Friends’ recently reported that North Korean authorities have prohibited North Koreans from working private plots in the mountains which had been cleared and used for grain production, and have recently begun replanting trees in these areas.

A source for Good Friends stated, “The Central Party decreed last September 29th, ‘The Fatherland’s mountains and fields must be adorned with green so that not one single desolate plot exists by the year 2012.’” Accordingly, garden plots are already being reclaimed from individuals and planted with trees.

North Korea is declaring 2012, the year which marks the 100th anniversary of the birth of Kim Il Sung and the 70th birthday of Kim Jong Il, ‘The Year Opening the Gates to a Strong and Prosperous Nation’.

The source stated that local residents in Booryung, North Hamm planted corn, potatoes, beans, and millet on those plots, relying on them for between 3 and 6 months worth of food, and that with the new decree prohibiting farming, more people would die.

*NKeconWatch: The DPRK just recently replaced its Minister of Forestry. This is his first large-scale policy initiative.

Posted in 2012 Strong and Prosperous Nation (Kangsong Taeguk), Agriculture, Environmental protection, Food, Forestry, Good Friends, Institute for Far Eastern Studies, Lumber, Ministry of Forestry | 1 Comment »

Pyongyang remodeling underway

Tuesday, November 18th, 2008

Institute for Far Eastern Studies (IFES)
NK Brief No. 08-11-17-1
11-17-2008

North Korea’s capital city of Pyongyang appears to be getting a facelift. The (North) Korean Central Broadcasters has reported that a city beautification project is underway in Pyongyang.

An apartment-erecting crane is building a new skyscraper, while construction has been restarted on the 16-year old remains of the shell of the Ryukyung Hotel as large-scale construction equipment and barges crowd the river as piles of construction materials can be found at each construction site.

Pyongyang insiders report that efforts getting underway in this anniversary year marking 60 years since the founding of the country are part of an effort to make Pyongyang a completely new city by 2012, when the North will mark the 100th birthday of its eternal president, Kim Il Sung.

Pyongyang is being developed as a ‘showcase capital’ for international visitors to the poverty-stricken North, as the North Korean people refer to Pyongyang as the ‘capital of the revolution.’

Recently, South Korean representatives from organizations providing aid to the North have reported being been surrounded by new construction of hotels and other buildings and the refurbishment of older buildings such as the Pyongyang Grand Theater.

What is curious is that the origin of the capital needed for these large-scale construction projects appears to indicate growing investment from foreign enterprises. The Ryukyung Hotel construction is reportedly being supported by a United Arab Emirates (UAE) company.*

A South Korean entrepreneur recently in Pyongyang quoted a Pyongyang official as saying, “The Ryukyung Hotel will be complete within three years,” and that the Daedong River Hotel construction was almost in the finishing stages with the help of foreign investment.

In January of this year, the Egyptian wireless communications company Orascom announced it would invest 400 million USD in order to construct the North’s first wireless communications network.

Also, North Korea’s foreign trade appears to have grown this year, especially because, as energy demand has sharply increased, the North’s export of mined materials to China appears in early calculations to have expanded considerably.

* NKeconWatch: This is the first I have heard about a UAE firm. Previously, discussion centered only around Orascom.

Posted in 2012 Strong and Prosperous Nation (Kangsong Taeguk), Architecture, Finance, Hoteling, Institute for Far Eastern Studies, Orascom Telecom Holding | 1 Comment »

North Korean Economy Watch