Archive for the ‘Foreign aid statistics’ Category

North Korea juggles South, Japan, Russia, and US

Tuesday, September 30th, 2008

The DPRK’s recent efforts to reconstruct the Yongbyon 5MW nuclear reactor seem to have brought implementation of the “second” Agreed Framework to a halt, though it was already behind schedule.  This week the US sent Chris Hill to Pyongyang to try and rescue the process which is hung up on verification protocol.   The North claims to have sufficiently declared their nuclear capabilities and believe they should be removed from the US list of state sponsors of terror.  The US does not believe this condition has been met and seeks to establish a protocol to verify if the North’s declaration is accurate.

Japan is also set to extend sanctions (due to expire) on the DPRK.  According to Bloomberg:

Japan’s ruling Liberal Democratic Party decided to extend sanctions against North Korea for six months after their Oct. 13 expiration date, Jiji Press reported.

LDP lawmakers agreed to extend the sanctions because North Korea took steps to reactivate its nuclear program and made little progress in an investigation into Japanese nationals abducted by North Korean agents, Jiji reported.

Prime Minister Taro Aso’s Cabinet is likely to endorse the extension by Oct. 10., the Japanese wire service said.

The sanctions include a ban on North Korean imports and the entry of North Korean ships into Japanese ports. The extension will be the fourth since sanctions began after North Korea’s October 2006 nuclear test, Jiji said.

Just as the DPRKs hopes of restoring/establishing relations with Japan and the US start to dim, however, they have reached out to South Korea, with whom political relations had recently gone sour due to the South’s policy change from unsupervised aid provision under the “sunshine policy” to a quid-pro-quo relationship under a “policy of mutual benefits and common prosperity“.  Additionally, the fatal shooting of a South Korean tourist in Kumgangsan led to a deterioration in cooperation between the two governments and suspension of the inter-Korean project (a cash cow for the North).

How much was the Sunshine Policy worth to the North?  South Korean GNP lawmaker Jin Yeong, who analzed data submitted by the Unification Ministry and the Export-Import Bank of Korea, claims that the Kim and Roh administrations oversaw the transfer of 8.38 trillion South Korean Won in aid and loans since 1998.

Taking office in February 2003 after the second North Korean nuclear crisis emerged in September 2002, Roh doled out 5.68 trillion won to Pyongyang over his five-year term, double that of his predecessor Kim (2.70 trillion won).

Kim and Roh gave to North Korea 2.4 trillion won for building light-water reactors and in food aid; 2.5 trillion won to pin the price of rice aid to that of the global market; 2.8 trillion won for other aid including fertilizer; and 696 billion won in aid from advocacy groups and provincial governments.

In 2003, South Korean aid to the North reached a high of 1.56 trillion won. Then after North Korean leader Kim Jong Il declared that his country had gone nuclear in 2005, the Roh administration sent 1.48 trillion won to the North.

Jin said, “South Korea gave a loan with rice first in 2000. Payments on the loan are deferred for 10 years. Thus, we are to receive the first repayment installment in 2010. But most of the 2.4 trillion won in loans seem irrecoverable.”

PricewaterhouseCoopers Korea audited the fiscal 2007 accounts of Seoul`s inter-Korean cooperation funds, saying, “Considering the characteristics of the North Korean government, grave uncertainty exists over the possibility of redeeming the loans given to the regime. The ultimate outcome depends heavily on the conditions around the Korean Peninsula.”

Since President Lee Myung-bak took office this year, exchanges between the two Koreas have been rare. Still, aid to the light-water reactor and the Gaesong industrial complex projects and civilian donations have continued, amounting to a combined 211.3 billion won. (Donga Ilbo)

It appears the Russians are doing their part to bring the North and South together through a project they can all agree on—building a natural gas pipeline from Russia to South Korea via the DPRK:

South Korea plans to import $90 billion of natural gas from Russia via North Korea, with which it shares one of the world’s most heavily fortified borders, to reduce its reliance on more expensive cargoes arriving by sea.

State-run Korea Gas Corp. signed a preliminary agreement with OAO Gazprom, Russia’s largest energy company, to import 10 billion cubic meters of natural gas over 30 years starting in 2015, the Ministry of Knowledge Economy said in a statement. The accord was signed in Moscow during President Lee Myung Bak’s three-day visit that began yesterday.

Gazprom Chief Executive Officer Alexei Miller said after talks today between Lee and Russian President Dmitry Medvedev that the exact delivery route hasn’t been determined and that shipments could begin as early as 2015.

“Russia suggested a pipeline via North Korea, which is expected to be more economical than other possible routes,” the minister said in a news briefing. “Russia will contact the North to discuss this.”

“Transporting gas through North Korea could be risky for South Korea,” said Kim Jin Woo, a senior research analyst at Korea Energy Economics Institute. “But the project will ease tensions on the Korean peninsula if Russia successfully persuades North Korea” to accept the plan.

North Korea could earn $100 million a year from the gas- pipeline project, the Ministry of Knowledge Economy said.

“Russia will supply the fuel in the form of LNG or compressed natural gas if negotiations with North Korea do not work out,” according to the ministry’s statement. South Korea and Russia will sign a final agreement in 2010 when a study on the route is completed.

South Korea is turning to Russia, holder of the world’s biggest proven gas reserves, as it faces intensifying competition for energy resources from China and Japan. Asia’s fourth-largest economy depends on gas for 16 percent of its power generation.

Under the agreement, a pipeline to South Korea will be laid via North Korea from gas fields on Sakhalin Island in Russia’s Far East. The pipeline would initially carry 10 billion cubic meters of gas a year, or about 20 percent of South Korea’s annual consumption. The cost of the gas link’s construction is estimated at $3 billion, the ministry said.

Read the full articles here:
South Korea Seeks $90 Billion of Russian Natural Gas
Bloomberg
Shinhye Kang
9/29/2008

Liberal Gov`ts Gave W8.38 Bln to North Korea`
Donga Ilbo
9/30/2008

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New CRS reports on North Korea available

Tuesday, September 23rd, 2008

I have updated the list of Congressional Research Service (CRS) reports published on North Korea and posted them here.  I have also added a hyperlink under “pages” on the menu tab to the right.

Updates include:
US Assistance to North Korea: July 31, 2008
North Korean Ballistic Missile Threat: January 24, 2008
North Korea’s Nuclear Weapons Program: January 21, 2008
North Korea’s Abduction of Japanese Citizens and the Six-Party Talks: March 19, 2008
The Kaesong North-South Industrial Complex: February 14, 2008
The North Korean Economy: Leverage and Policy Analysis: August 26, 2008

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South Korea energy assitance to DPRK

Tuesday, August 12th, 2008

Despite tensions between North and South Korean this year, South Korea is still delivering promised energy aid to the North:

Under a six-nation accord signed last year, South Korea has started delivering energy assistance to North Korea.

This week’s shipment included 600 tons of round steel bars.

Seoul has so far provided assistance worth 124,000 tons of heavy fuel oil.

Read the full story here:
South Korea supplies the North with energy
Birmingham Star
08/08/08 

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A Dangerous Opportunity in North Korea

Thursday, July 31st, 2008

United Methodist Church: Kentucky Annual Conference
Dr. Bill Moore
7/31/2008

Dr. Bill Moore, the pastor of Southern Hills United Methodist Church in Lexington, was in North Korea May 14-29.  The son of United Methodist missionaries, he is a member of a humanitarian aid group called Christian Friends of Korea.  He offers a perspective on a deepening crisis.

I traveled to North Korea during the last two weeks of May as a member of a six-person delegation from a non-government organization (NGO) called Christian Friends of Korea. We flew into the capital city of Pyong Yang to confirm the arrival and proper distribution of donated goods, to deliver donors lists and greetings, and to build relationships and trust. The Board of Directors for this group, of which I am a member, is composed of former missionaries to Korea, the children of missionaries, and others with a concern to relieve the suffering and hardships of the people of this grim Communist dictatorship called the Democratic People’s Republic of Korea.  It is often hard to see the suffering faces of the 23 million North Koreans hidden behind the headlines of international diplomatic struggle and nuclear intrigue.  Famine, floods (two devastating events in 2007), and mismanagement have left the nation in economic ruin. Christian Friends of Korea (CFK) has been quietly working in the DPRK for 13 years, meeting some of the most basic needs of thousands of people struggling with the life-threatening, but curable disease of tuberculosis. CFK’s efforts to show love and compassion to people who continue to endure food shortages, poverty, disease, and oppression are building trust and chipping away at long-standing hostility.   
 
North Korea is a beautiful place in May.  Everything had greened up nicely.  The cottonwood trees had deposited wind-blown piles of downy fluff in the roadways, blanketing the bushes and spider webs.  The guest house on the banks of the Taedong River near Pyong Yang where our Christian Friends of Korea Team stayed for most of the visit had a dense backdrop of vegetation, populated by ring neck pheasant, which appeared unfazed by the foreigners nearby and sounded off regularly.  The acacia trees were in full bloom.

As we moved through the countryside, the workers on the collective farms were transplanting rice plants into the paddy fields.  This is a critical phase of life in the north, and everyone is expected to take part.  Backs bent, barefooted workers move slowly across the fields.  On the mud dikes of the water-filled paddies there are often patriotic slogans on placards, revolutionary red flags flying, and even sound trucks playing inspirational songs.  This idyllic picture of a worker’s paradise belies a truth that is not readily apparent.  The coming fall harvest, which is vital to a nation where one-third of the people suffer from malnutrition, is already in jeopardy.  Previous large shipments of fertilizer from South Korea have been withheld this year for political reasons.  China has pledged to fill the gap, but nothing has arrived yet.  Aid workers from other countries told us that the potato crop is already stunted, and predicted that the rice crop will be twenty-five percent less this year.  Even in years of good harvests, North Korea still falls about 1 million metric tons short of food, out of an estimated 5 million tons needed.    This year the shortfall is expected to exceed 1.6 million metric tons.  For those receiving rations, the daily government ration of grain per person was reduced from 250 grams to 150 grams in June.  Uncertain food aid, coupled with poor food security (effective agricultural production) means an increase among the populace in susceptibility to disease, particularly tuberculosis, which afflicts an estimated five percent of the North Korean people.  In fact, since last year, the registered cases of TB have risen from 52,000 to 100,000 cases.

This was the backdrop for our journey to the Democratic People’s Republic of Korea as an NGO working to provide medicine (specifically tuberculosis treatment drugs), medical equipment, farm machinery, vehicles, construction materials and food for the people of the DPRK.  The needs are real, and the urgency is intensifying. The Chinese character for “crisis” is composed of two other characters: “danger” and “opportunity.” As we traveled to fourteen different medical facilities, we could see that there is a “dangerous opportunity’ to make a difference in this land, and bring hope to many lives.

Our team was a diverse, ecumenical mix of six people.  Our Executive Director, Heidi Linton, grew up in Alaska, married into a famous Presbyterian missionary family, and has effectively immersed herself in the work of Christian Friends of Korea for the last 13 years.  By her indomitable spirit, genuine integrity, and meticulous attention to detail for providing aid and assistance, she has endeared herself to the North Korean leaders assigned to us through the Ministry of Public Health and forged a working relationship which is highly effective.  Dr. John Somerville, retired Presbyterian missionary, was our official Korean speaker on the trip.  A Harvard graduate in Asian studies, Dr. Somerville spent many years teaching in South Korea, and has visited the north on 10 previous visits.  Paul Moffett, a pastor at Lighthouse Christian Center in Puyallup, WA, is the great-grandson of pioneer Presbyterian missionary Samuel Moffett, who came to Pyong Yang in 1905.  Lee Wheeler is an agricultural engineer from Hesston, KS, representing the Mennonite Central Committee, a CFK partner.  He is a greenhouse expert who has also made 10 trips to the DPRK.   Terry Smith, Heidi’s able assistant, came from Memphis, TN and now lives in Black Mountain (headquarters of CFK).  I rounded out the team.  I’m the son of United Methodist missionaries, James and Margaret Moore.  My grandfather, Dr. Stanley Martin, was a Canadian Presbyterian medical missionary in China and Korea.  I grew up in Seoul, South Korea.

Our purpose in traveling to North Korea for Christian Friends of Korea was to make a “confirming” visit, checking to make sure that the supplies and equipment (more than three million dollars worth sent since January) had been properly received, inventoried and distributed; to present lists of donors to the facility directors; and to build relationships and trust with everyone with whom we had contact.  We were accompanied at all times by young government officials who were both personable and efficient, and escorted us to every location.  They shared with us a passion and concern for the welfare of their people.  Part of this work was to visit two warehouse locations to make sure supplies were moving out to the facilities.  This is important also to make way for incoming shipping containers.  It is noteworthy that our North Korean counterparts in the Ministry of Public Health value the aid assistance of CFK and a similar NGO so much that they actually built a spacious warehouse just for receiving shipments to be distributed to CFK ministry sites.  A forklift sent by CFK donors was in use there. The other main task of confirming was to visit the actual facilities, interview directors, staff, and patients, and assess the priorities and needs of each place.  These visits were the heart of our schedule.

A typical trip to one of the hospitals or TB rest homes began with a convoy of vehicles traveling to the locations scheduled for the day.  The road surface usually began with paved roads of varying quality that soon gave way to a washboard gravel road, a muddy track snaking up into the hills, or even a rocky stream bed that had to be forded.  Once we arrived, we were greeted by the director, doctors, nurses, and various local officials.  We would be seated around a table with refreshments provided for the visitors (strawberries, peanuts, tea), introductions would be made, the donor list presented in Korean with an explanation, and Heidi Linton would begin the process of inquiry.  What is the current situation in this place?  How many TB patients are there?   How did the devastating floods of 2007 affect the facility and patients?  What are your priorities here?  Is there enough food for the patients?  Local Communist party officials who attended the meetings were visibly uncomfortable about discussions of flood damage or food shortages.  Furtive glances were sometimes exchanged before hospital staff would answer such questions.  The stock answer: “The government provides us with food.” 

Questions would be asked about the arrival of vitamins, health kits, bedding, laundry soap, Pedialyte, doctor’s kits, hospital beds, and TB medicine.  Food shipments of canned meat, soy beans and dry vegetable soup mix were checked on.  A list of donors was presented to the directors at each location.  New equipment was sometimes delivered, including new electronic microscopes and a “Lab in a Suitcase,” a sophisticated package of diagnostic equipment to identify infected TB patients.  Some sites had cargo tri-motorcycles to transport supplies slated for delivery.  A new kind of greenhouse, which does not require an additional heat source even in frigid temperatures, was offered at each place.  A tour of the facilities meant a chance to meet the patients, to inquire about their health, and to offer best wishes and prayers for swift recovery.  Outside, the greenhouses, which are so important for supplementing meager government rations, would be inspected. Walking tractors and bicycles provided by CFK were noted.

One of the highlights of the journey was to see the wonderful progress that has been made in the construction of modern surgical facilities at both the North Hwangae TB Hospital in Sariwon and the South Hwangae TB Hospital in Haeju.  The surgical suites, built with the expertise and direction of CFK Technical Teams, feature new anti-microbial tile on the walls, non-skid floor tiles, power conditioners and new electrical wiring, heating/AC, lighting, and new surgical equipment and supplies enabling more complicated procedures and greatly improved surgical outcomes.  One patient, who had been brought to Sariwon for an operation from a TB rest home, remarked when he saw the gleaming facility, “I feel like I am cured already!”  The result of the renovations is stronger confidence among patients that healing will occur, and the number of patients willing to undergo surgery has tripled.  Because of the sterile conditions, post-operative infection has been greatly reduced.  Eighty percent of the patients used to have post-op infections.  Now it is down to 1 in 5 patients.  We also saw the preparations for a similar renovation at the Kaesong Provincial Pediatric Hospital (serving 144,000 children) where the surgery area has been stripped to the bare stones in preparation for the $200,000 make-over made possible by a CFK donor.  In earlier days this was a Methodist mission hospital, visited by my grandfather who installed x-ray equipment there in the early 1920’s.  At Hwangju TB Rest Home construction is under way to build new facilities that will house150 or more patients.  The buildings will replace two others that were destroyed in last year’s floods.  They need a roof right away, followed by windows and doors.  This is a critical need, and participation from United Methodist Churches would be most welcome in raising funds for this vital construction need.

While there are very encouraging signs of progress at CFK projects, there are specific needs that must be immediately addressed.  There is an expected shortfall in TB medicine, especially in terms of DOTS (Directly Observed Treatment Short Course) drugs which, when given under supervision, are very effective.  Because of a loss of funding by the World Health Organization, CFK is being asked to provide 12,000 treatments in our regions (North and South Hwanghae and Kaesong) which will cost in excess of $245,000.  In response to the deepening food crisis, two 40-foot containers of canned meat will be shipped before the end of the year in a joint effort with the Mennonite Central Committee, who generously provides $500,000 worth of this commodity to CFK projects annually.

Everywhere the CFK Team went on this confirming visit there were expressions of gratitude.  When one director was asked what further assistance he needed for his facility, he exclaimed, “You have already sent a lot!”  Heidi Linton responded that God in His love had provided these things.  The director’s response: “Please send thanks to our Christian friends in America.”

You might be asking: what does the work of Christian Friends of Korea have to do with The United Methodist Church?  It is difficult to do any kind of Christian ministry in North Korea since traditional denominational mission work is not allowed, but an effort through a non-government organization makes it possible.  When needs are critical, we must find mission partners wherever we can.  The mission of CFK also addresses two of the priorities coming out of General Conference: engaging ministry with the poor (preventing starvation) and making the world malaria free, AIDS-free, and tuberculosis free.  Here’s a piece of good news—the US government is in the process of shipping a total of 500,000 tons of food to North Korea as a result of some movement in the nuclear negotiations.  The United Nations World Food Program will distribute 400,000 tons throughout the DPRK.  As a part of this initiative, on June 30 it was announced that the U.S. Agency for International Development’s (USAID) office of Food for Peace will work with 5 aid agencies to distribute 100,000 metric tons of food to 550,000 people at risk, mostly children, elderly and nursing mothers, in two North Korean provinces.  The agencies involved in this effort are World Vision, Mercy Corps, Global Resource Services, Samaritan’s Purse, and Christian Friends of Korea.

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(UPDATED) UN World Food program gearing up for operations

Wednesday, July 30th, 2008

Update 3: The second shipment of US food aid has arrived in North Korea.  Also, DPRK has suffered terrible rains in August.  Story here and here. 

UPDATE 2: The Daily NK reports some good news on the DPRKs food production:

With the stabilization of food prices in North Korea, which had skyrocketed during the first half of the year, the potato harvest which began at the end of June has been lifting the food burden of the citizens.

A source from North Korea said in a conversation with the Daily NK on the 26th, “In the border regions of North Hamkyung Province the first round of harvesting was successful. Accordingly, the price of new potatoes has fallen below 300 won since mid-July.”

The source added, “In the market in Hyesan, Yangkang Province, potatoes cost 280 won per kilogram. Newly-harvested barley has also been appearing; it’s a huge help to the civilians.”

Until the first week of June, the jangmadang price of potatoes in North Korea was 300 won in Pyongyang, 400 won in Hoiryeong, and 450 won in Chongjin per kilogram.

Regarding the price of rice and corn, the source continued, “In the North Hamkyung and Yangang Provinces, the price of rice is 2,200~2,400 won (per kg) and the price of corn 1,200~1,400 won. Originally, during the collective farm’s harvest distribution in December, 4kg of potato was equivalent to 1kg of corn, so the prices of rice and corn are not actually any more expensive now.”

UPDATE 1: Here (link) are the results of the UN World Food Program/FAO June DPRK survey. Some highlights:

The RFSA covered 53 counties in eight provinces (Ryanggang, North Hamgyong, South Hamgyong, Kangwon, North Hwanghae, South Hwanghae, South Phyongan, Pyongyang). Experts visited hundreds of households, child institutions and hospitals across the country in the most comprehensive assessment on food and nutrition conducted in DPRK since 2004. Key findings indicate:

  1. Food availability, accessibility and utilization have deteriorated sharply since 2007.
  2. Close to three quarters of the households have reduced their food intake.
  3. More malnourished and ill children are being admitted to hospitals and institutions.
  4. Diarrhoea caused by increased consumption of wild foods was one of the leading causes of malnutrition amongst children under five.

The experts found that the majority of the families surveyed have cut out protein from their diet, and are living on cereals and vegetables alone. Food prices have soared — rice now costs almost three times more than a year ago, and maize has quadrupled. Heavy reliance on support from relatives as a means of coping with food shortages is widespread in areas such as North Hamgyong Province, one of the worst affected regions.

Donors to WFP’s current programme in DPRK include the United States (US$60 million), Republic of Korea (US$20 million), Russian Federation (US$8 million), Switzerland (US$6.6 million), Germany (US$3.4 million), Australia (US$4.2 million), UN CERF (US$2.3 million, for CERF see: http://ochaonline.un.org), Multilateral funds (US$1.9 million), Cuba and Italy (US$1.5 million each), Canada, Denmark, Ireland, Luxembourg and Norway (US$1 million each), Finland (US$737,000), Turkey (US$150,000), Greece (US$ 45,000) and private donors (US$17,000).

ORIGINAL POST: North Korea’s food crisis has been out of the headlines since US food aid arrived a couple of weeks ago followed by the destruction of the Yongbyon cooling tower, six-party talks progress, ASEAN non-aggression treaty, and Kumgang shooting incident.  But now that the UN World Food Program is preparing operations, the crisis is back in the news.  From the Wahsington Post:

The main U.N. aid agency in North Korea, the World Food Program, will resume emergency operations there in the next two weeks to help feed more than 5 million people over the next 15 months at a cost of $500 million, said Jean-Pierre de Margerie, the agency’s country director in Pyongyang.

“The situation is indeed very serious,” de Margerie said at a news conference in Beijing.

The resumption of emergency operations, which were scaled back in 2005 on a request from the North Korean government, was decided after a U.N. survey last month showed the most severe and widespread hunger among North Koreans in a decade. The survey was taken after the Pyongyang government, in an unusual gesture, officially acknowledged a growing hunger crisis and appealed for international aid.

and

[…] the United States recently pledged to give North Korea 500,000 tons of food over the next six months, most of which will be distributed by the World Food Program as part of its emergency effort. De Margerie said the first delivery, 37,000 tons of wheat, arrived in a North Korean port two weeks ago, and more shiploads are expected soon.

In contrast to past practice, the North Korean government has been willing to allow U.N. aid workers more leeway to monitor delivery of the new food supplies, de Margerie said. Similarly supple oversight rules were negotiated by the United States as a condition for its 500,000-ton donation.

The ballooning food crisis began mainly because of flooding last summer that damaged fields, leading to insufficient crops and soaring food prices. At the same time, de Margerie said, imports dropped dramatically this spring, particularly from South Korea and China.

This exacerbated a perennial shortfall of around 20 percent, or 1.6 million tons, in the amount of food needed to adequately nourish North Korea’s 23 million inhabitants. As a result, prices of such staples as rice, eggs and corn doubled, tripled and even quadrupled, de Margerie said.

Now, de Margerie said, resumption of emergency operations will aim at getting food to between 5 million and 6 million people by September, which is considered a critical period because this autumn’s crops will not have entered the government-run distribution system. Quick donations of about $20 million are needed to get the new program running swiftly, he added.

And where are these funds going to come from.  Well, New Zealand has made public its intentions to fund the effort:

New Zealand will provide half a million dollars to the United Nations to help North Korea which is facing a food shortage.

New Zealand previously gave $500,000 via the Red Cross after last year’s floods.

New Zealand established diplomatic relations with North Korea in 2001.

According to Yonhap:

The areas undergoing the crisis include the Hamgyong and Ryanggang provinces, the site said, adding that the World Food Programme plans to launch a new project to address the food needs in these northeastern regions. 

Read the full stories here:
U.N.: Millions Hungry in North Korea
Washington Post Foreign Service
Edward Cody
7/30/2008

NZ to give aid to North Korea
National Business Review
6/29/2008

Northeastern NK in serious food crisis: UN Web site
Yonhap
7/26/2008

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Russia-DPRK economic relations

Thursday, July 24th, 2008

From Dr. Leonid Petrov in the Asia Times:

Russia cooperation with North Korea
Since the early 2000s, overall relations between Russia and the DPRK have been improving. The DPRK’s importation of refined oil from Russia saw its first increase in 2002-2003 (from $20 million to $96 million) and was caused by the beginning of the US-DPRK nuclear confrontation and the subsequent demise of the international Korean Peninsula Energy Development Organization project that was to construct a light water reactor nuclear power plant in North Korea.

During 2004-2005, petroleum trade between Russia and North Korea grew from $105 million to $172.3 million. Until the six-party talks produced their first results, in the list of Russia’s exports to the DPRK, oil products dominated at 63%. Rampant corruption in both countries also let a trickle of Russian oil to be smuggled to North Korea unaccounted for.

In 2006, Russia was the DPRK’s third-largest trading partner after China and South Korea and absorbed 9% of the total $3.18 billion spent by the North on imports (approximately $286 million). The Kremlin’s approval of international sanctions against the former communist ally was accompanied by the curtailment of trade with the North. At the time of North Korea’s nuclear test in October 2006, Russia’s trade statistics showed that exports of petroleum had dropped 91.1% compared to the same period of the previous year.

The pragmatic mood in bilateral relations prevails, and these days Russia delivers oil and food to North Korea only in accordance with its obligations associated with progress at the six-party talks. This year, Russia has already delivered 100,000 tonnes of fuel oil to the DPRK in two batches and, according to Russian Deputy Foreign Minister Alexei Borodavkin, a top Russian envoy to the six-party talks, will deliver another 100,000 tonnes by October 2008. In June, the Russian government announced it would provide 2,860 tonnes of flour to the DPRK. According to an official KCNA news agency report, this food aid arrived at the border city of Sinuiju in the DPRK’s northern Pyongan province in early July.

Recently, for the first time in the post-Soviet era, North Korea saw a major Russian investment. In the city of Pyeongseong, the Russian auto plant KamAZ opened its first assembly line, specializing in the production of medium-size trucks named “Taebaeksan-96”. Although less than 50 trucks were assembled in 2007, this cooperation became an important milestone in the development of bilateral relations. While the project doesn’t violate United Nations sanctions on North Korea, it shows Moscow’s drive to expand its influence in the country. Ironically, the more trucks assembled the heavier North Korea’s dependence on imported fuel, engine oils and other petrochemical products.

The importance of the DPRK’s Rajin-Seonbong special economic zone to Russia’s national interests continues to grow. The state-run monopoly OAO Russian Railways is currently upgrading its railway connections with North Korea in Khasan-Tumangang, investing at least 1.75 billion roubles (US$72 million) into this project, and plans to participate in an ambitious plan to rebuild a trans-Korean railway. By connecting Rajin (and the rest of northern Korea) to its Trans-Siberian railroad, Russia hopes to benefit form the transit of South Korean and Japanese cargo which could be sent via its territory to Central Asian and European markets. Pyongyang seems to endorse these plans and other Russian initiatives, but does not commit any financial resources.

Eighty percent of overall bilateral economic trade between Russia and North Korea consists of cooperation, barter and investment-in-kind between the regional areas. The most active Russian regions trading with the DPRK are Eastern Siberia and the Far East. Maritime province (Primorsky Krai) itself exports to North Korea more than $4 million worth of refined oil per year. There are no oil fields in Maritime province and oil has to be borrowed through a chain of federal bureaucratic structures from the oil-rich areas of Eastern Siberia. Instead of money, the local governments agree to receive the labor of North Korean workers.

North Korean laborers in Siberia and the Far East were common under the Soviet system and they are still visibly present. In 2004, the Russian Federal Immigration Service issued 14,000 visas for foreign laborers, of whom North Koreans numbered 3,320 in 2005 and 5,000 in 2006. Since the DPRK has no other way to pay in goods or services, its government started paying for oil imported from Russia by dispatching thousands of laborers at zero cost. Following strong demand from local companies, just in 2006 regional authorities of Primorsky Krai agreed to issue an extra 5,000 working visas to North Koreans. This openness is contrary to local government policy that normally restricts the entry of labor from China.

DPRK citizens are sent to Russia to work as woodcutters and builders but some have also managed to find work in the agricultural and marine industry. Through the presence of these laborers, Russia has enjoyed a partial repayment of the DPRK’s post-Soviet debt through North Korean workers being contracted to work in mines and lumber mills in Russia’s Far East.

The wages they are able to make in Russia are far greater than what they would make at home. However, the foreign worker quota is set not by provincial governments but by Moscow, which often tries to put a stop to these programs due to the complexity of the matter. Part of this opposition stems from the fact that the North Korean workers in Russia still fall under DPRK laws and, therefore, are subject to intrusive supervision.

Among the most difficult but negotiable issues in the way of Russia-North Korea cooperation remains the problem of external debt. During the Soviet era, the DPRK incurred a debt of approximately $8 billion, which Pyongyang still owes to Moscow but cannot repay. This debt remains a stumbling block in most negotiations on new aid and development programs. However, this debt can potentially make trilateral Russian-Korean relations closer and stronger.

In January 1991, soon after the opening of diplomatic relations with South Korea, Moscow received $3 billion from Seoul in the form of a three-year loan. The collapse of the Soviet Union left this loan largely unpaid. The new Russian government in the 1990s provided South Korea with armaments worth $150 million to be counted as payment in kind for the remaining debt. In 2003, after bilateral negotiations on this issue were completed, part of this Russian debt was canceled and the remainder was rescheduled to be paid over the next 23 years.

Taking into account its own debts to the South, Russia could easily write off a significant portion of North Korean debt. To resolve this question, a certain agreement between all three parties is needed. To engage in a mutual and reciprocal round of debt cancelation, Russia might choose to see the North and the South as one country. Such an agreement would have unblocked the road for broader cooperation between Russia and the two Koreas, and simplified Russia’s energy cooperation with China and Japan.

The full article is worth reading here:
Russia is key to North Korea’s plight
Asia Times
Leonid Petrov
7/24/2008

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Russia sends fuel to DPRK

Wednesday, July 9th, 2008

According to Yonhap:

Russia will deliver another 100,000 tons of fuel oil to North Korea by October as a reward for the country’s shutdown of its nuclear power facilities, Itar-Tass news agency reported Wednesday, quoting a top Russian envoy to the six-party nuclear talks.

North Korea has been promised energy aid equivalent to a million tons of heavy fuel oil as part of economic and political rewards for declaring all its nuclear programs and disabling its main nuclear plants under a six-party deal on ending the North’s nuclear activities.

“We’ve fulfilled our promises — delivered 100,000 tons of fuel oil in two batches by the middle of the year,” Russian Deputy Foreign Minister Alexei Borodavkin was quoted as telling journalists in Beijing Wednesday. “We are preparing to fulfil our obligations further and send another 100,000 tons by October,” he said.

Read the full article here:
Russia to send more fuel oil to N.K. by October: report
Yonhap
7/9/2008

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US food aid arrives in DPRK

Sunday, June 29th, 2008

According to CNN:

A U.S. ship has arrived at a North Korean port carrying 38,000 tons of food aid to be distributed to some of the millions living in hunger, U.N. sources said Sunday.

The delivery is part of a new deal signed by U.S., U.N., and North Korean officials and others, which gives outsiders — including the U.N. World Food Program — much greater access to the country.

From the New York Times:

The ship’s visit and the North Korean agreement to invite an additional 50 international relief experts from the World Food Program, as well as a consortium of U.S. relief agencies, followed recent progress in six-nation talks on ending the North’s nuclear weapons programs.

For years, North Korea has guarded its people from contact with outside aid workers. The WFP, the largest international aid group operating in North Korea, currently has only 10 international personnel based in North Korea.

After sailing for several weeks from the U.S. west coast, the American-flagged M/V Baltimore arrived in Nampo, the North’s main port near Pyongyang, the North Korean capital, on Sunday evening.

On Monday, it began unloading half of its cargo of 37,000 tons of U.S.-grown wheat, Risley said. The ship will discharge the other half of its cargo at Hungnam and Chongjin, ports on the North’s eastern coast.

The shipment is the first installment of 500,000 tons in promised U.S. aid that will be distributed by the WFP and U.S. aid groups, such as Mercy Corps.

Before the ship’s arrival, North Korea agreed on Friday to allow the WFP to deploy the largest number of international workers since it began operations there in 1996 amid a famine that eventually killed an estimated 2 million North Koreans.

Until now, the WFP has had access to only 50 of the North’s 200 counties, distributing its aid through nurseries, schools, hospitals and orphanages. Under the new agreement, the agency will have access to 128 counties, including the remote and traditionally deprived northeast region and some counties never before accessible to humanitarian agencies.

The wheat shipment arrived just days after North Korea delivered a long-delayed nuclear declaration.

Meanwhile, the North rejected a South Korean offer to ship 50,000 tons of corn, the Seoul government said on Monday.

From the Associated Press

Sunday’s wheat shipment will be enough for the WFP to expand its operations to feed more than 5 million people, up from 1.2 million people now getting international aid.

On the supply side, anticipation of this aid, plus Russian aid, and increased Chinese grain exports could be behind recent reports that grain prices are falling in North Korea’s markets

Read the full articles here:
Seoul offers corn aid to Pyongyang
Yonhap
6/30/2008

Food aid reaches North Korea
CNN
6/29/2008

U.S. Food Aid Arrives in North Korea
New York Times
Choe Sang-Hun
7/1/2008

UN: US food aid arrives in North Korea
Associated Press
Burt Herman
6/30/2008

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Russia donates food to DPRK

Thursday, June 19th, 2008

After China and the USA made high-profile food donations to North Korea, the Russians finally joined the game.  Russia’s Foreign Minister claims that by the end of June his country will have sent 3,000 tons of flour to UN World Food Program distributors in North Korea. The first aid deliveries arrived in North Korea by train on June 11.

I am surprised Russia waited so long to get into the game.  Russia has been prodding North Korea to link its Trans-Siberian rail traffic to South Korea, and they want to make sure the Chinese don’t squeeze them out of North Korea’s Raijin Port (which does not freeze in the winter).  Food aid might not have helped these processes along, but waiting so long to jump on the bandwagon can’t have helped. 

In March of this year, the Russians inked a deal to renovate the railway lines between their border and Raijin (the tracks are different gagues).

Read about the aid here: 
Russia to deliver 3,000 tons of flour to North Korea
Novosti
6/9/2008

Russia sends food aid to North Korea
Associated Press
6/19/2008

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World Food Program appeals to South

Monday, June 2nd, 2008

From the Choson Ilbo:

The UN World Food Program is asking Seoul to send food aid to North Korea. North Korea asked the WFP for food aid in mid-May, and the WFP sent a letter to South Korea last Monday, the Ministry of Unification said on Sunday.

-and-

Seoul gave about 100,000 tons of corn to North Korea every year through the WFP from 2001 to 2004. In 2007, Seoul sent about 32,000 tons of food, including soybean and corn, to the North through the WFP.

Read the full article here:
WFP Asks Seoul for Food for N.Korea
Choson Ilbo
6/2/2008

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