North Korean Economy Watch

UNSC blacklists three DPRK companies

April 24th, 2009

In response to the DPRK’s rocket launch, the UN Security Council issued a presidential statement containing the following:

The Security Council reiterates that the DPRK must comply fully with its obligations under Security Council resolution 1718 (2006).

The Security Council demands that the DPRK not conduct any further launch.

The Security Council also calls upon all Member States to comply fully with their obligations under resolution 1718 (2006).

The Security Council agrees to adjust the measures imposed by paragraph 8 of resolution 1718 (2006) through the designation of entities and goods, and directs the Committee established pursuant to resolution 1718 (2006) to undertake its tasks to this effect and to report to the Security Council by 24 April 2009, and further agrees that, if the Committee has not acted, then the Security Council will complete action to adjust the measures by 30 April 2009.

(Read the full text of the statement here)

Today the Security Council followed up this statement (and resolution 1718) by voting to blacklist three North Korean companies. According to Reuters (via the Washington Post):

The North Korea sanctions committee met a Friday deadline set by the Security Council on April 13 to produce a list of goods and North Korean entities to be blacklisted under Security Council resolution 1718, passed after Pyongyang’s October 2006 nuclear test.

The three companies put on the list are Korea Mining Development Trading Corp., Korea Ryongbong General Corp. and Tranchon (Tanchon) Commercial Bank, according to a copy of the committee’s decision obtained by Reuters.

The decision said the three companies were linked to the military and active in procuring equipment and financing for North Korea’s ballistic missile and other weapons programs.

The blacklisting prohibits companies and nations around the world from doing business with the three firms, but the impact of the action might be largely symbolic.

One Western diplomat said the three blacklisted firms had subsidiaries that also would be subject to U.N. sanctions.

Committee members also decided to ban the import and export of items on an internationally recognized list of sensitive technologies used to build long-range missiles capable of delivering weapons of mass destruction.

The US imposed sanctions on three North Korean companies in the Federal Register earlier this year. Of these three companies, one has made the UNSC list: the Korea Mining and Development Corporation. I can only speculate as to the fate of the other two mentioned in the US Federal Register, Mokong Trading Corporation and the Sino-Ki company.

Read more below:
UNSC Presidential Statement

U.N. committee puts 3 North Korea firms on blacklist
Reuters (via the Washington Post)
Louis Charbonneau
4/24/2009

Posted in Korea Mining Development Trading Corporation (aka Kapmun Tosong, KOMID), Korea Ryongbong General Corp, Mokong Trading Corporation, Sino-Ki, Tanchon Commercial Bank, UN, UN Security Council | 2 Comments »

Kim Jong Il, Urban Planner

April 24th, 2009

Daily NK
Lee Sung Jin
4/24/2009

Hyesan, Yangkang Province: If it had been any other day, on April 18th the entire city would be buzzing with People’s Unit evaluation meetings and cadre lectures. On this particular day, however, influential officials in Yangkang Province, including Kim Kyung Ho, Chief Secretary of the provincial committee of the Party, were gathered together around the railroad tracks in Sungwoo-dong.

The “Ground-Breaking Ceremony” for a project to clear residences near the railroad, so as to fulfill “Supreme Commander Kim Jong Il’s March 4th Decree,” was being held. However, the expressions on the faces of the officials carrying out the decree were grim. The ceremony ended with a few civilians who had been mobilized for the event demolishing an old farmhouse near the railroad and without the top official present making the planned speech. The faces of the bystander officials as well as the gathered civilians betrayed their distress; removal of houses near the railroad has already started, while new homes for residents, whose houses are to be demolished, are not yet prepared.

All of this started with Kim Jong Il’s onsite inspections at Samjiyeon, also in Yangkang Province, on March 4th. Kim, who entered the county along the road connecting Bukchung in North Hamkyung Province and Hyesan, had some choice words for the homes haphazardly clustered around the railroad.

“Why is it so disorderly around here? Get rid of all of the houses surrounding the railroad within the year!”

He also apparently expanded on his beliefs, “Clearing the area around the railway is an important project which improves the image of our country.” Since Kim Jong Il’s words and “instructions” surpass all laws and institutions, his words immediately formed the “March 4th Decree” and were subsequently relayed to all officials in the Yangkang Province region.

Railways in North Korea

In North Korea, there is no protection surrounding railroads, which frequently cut across the center of cities. There are rules that prohibit the construction of public buildings, including residential homes, within 50 meters of railroad tracks, but such rules have existed in name only for a long time.

From the perspective of common citizens, the areas around the railways are some of the most active zones for economic activity. Of course, it is very dangerous when trains are passing, but since they run only once or twice a day at most, the danger is short-lived.

The railroad is a more direct route than the roads, which are in any case not always paved, so it helps conserve time for commuters or those going to markets. It is also convenient to travel on the rails on wooden blocks during the winter! In the border cities of Yangkang and North Hamkyung Provinces, railways running alongside the Yalu and Tumen Rivers serve as important smuggling routes to and from China.

Since the early 2000s, when citizens began to prefer convenient locations around railroads for selling goods or commuting to and from work, the North Korean authorities permitted the construction of residential homes, though bribes had to be offered to officials. In small and mid-size cities, many homes were built within 10 meters of railway tracks.

A source from Yangkang Province explained in a phone conversation with Daily NK on the 23rd while relaying the news of the groundbreaking ceremony, “Workers have to spend most of the year constructing homes. Many people will then be forcibly evacuated from the danger areas.”

The source further commented, “In Hyesan, several hundred households have to be relocated even if only the residential homes within 50 meters of the railway are demolished. Since land is available only on the outskirts of the cities, citizens slated for evacuation have been putting up strong resistance.”

The source also commented dryly, “In resettlement projects, homes are usually built very sloppily. It would be better if the state provided resources to the individuals to build the homes themselves.”

In the areas surrounding the railroad in Hyesan proper, where one-bedroom rentals by university students recently discharged from the army are commonplace, frustration has been running high. The source relayed that while the People’s Units around the railways have been holding daily meetings to decide on the households to be relocated, angry words and even fistfights have been rampant, making mutual agreement difficult if not impossible.

The Party in Hyesan allotted responsibility for the construction of new residences to each factory and enterprises. However, the construction materials provided by the North Korean authorities amounted to just 300kg of cement, which is barely enough for the under-floor heating of a house. Additional materials and means of transportation have to be provided in their entirety by the factories and the enterprises.

Even the citizens who do not live in the vicinity of the railways are incensed by the recent decree. Each household in Hyesan was ordered to make and offer 500 bricks of mud and straw. The factories, in order to secure fuel and other materials, have had to reduce the wages of workers, which at best are not even equivalent to two kilograms of rice, by half.

The source explained, “In 1992, 1,000 homes were built for the discharged soldiers who had been stationed in the Hyesan mine, but in less than three years, at least half had abandoned their homes. Residential homes built in Potae-ri, Samjiyeon or in Daehongdan look great on the outside, but they were all built sloppily, so the soldiers are living in poor conditions to this day.”

Posted in Construction, Railways, Real estate | Comments Closed

DPRK seeks to “renegotiate” Kaesong contracts

April 22nd, 2009

According to Yonhap (excerpts):

The two Koreas met Tuesday for their first government-level talks in more than a year, during which the North demanded negotiations begin on operational changes at the joint complex in its border town of Kaesong. Pyongyang said it will reconsider all “special benefits” that have been granted to South Korean firms, such as low wages for North Korean employees and free land use.

The proposed measure, if actualized, is expected to deal a serious blow to more than 100 South Korean firms in Kaesong, mostly small manufacturers producing garments, utensils, watches and other labor-intensive products and already struggling to survive the global economic downturn.

Under a contract signed between Hyundai and the North Korean government in 2000, South Korean firms pay their North Korean employees between US$70-$80 on average a month, but the wages are wired directly to North Korean government bank accounts. The annual wages last year amounted to $26 million, according to ministry data. About 39,000 cheap but skilled North Korean workers are employed there.

North Korea also said it will begin charging land fees starting next year. North Korea initially set a 10-year grace period on rent when the complex opened, allowing the South Korean firms to use its land in Kaesong for free until 2014.

The [South Korean Unification] minister criticized North Korea’s prolonged detention of a South Korean worker as “against justice.” Pyongyang officials did not answer questions about the Hyundai Asan employee during Tuesday’s talks, he said.

The inter-Korean talks opened after a half-day delay due to procedural disputes but lasted only 22 minutes, during which the two sides exchanged documents laying out their demands and positions.

Read the full story here:
S. Korea reviewing N. Korea’s call to revise industrial contracts: minister
Yonhap
4/22/2009

Posted in Economic reform, Foreign direct investment, Kaesong Industrial Complex (KIC), Labor conditions/wages, Special Economic Zones (Established before 2013) | 3 Comments »

Art in the DPRK

April 22nd, 2009

The Art Newspaper published an interesting piece on how artists are trained and art is produced in the DPRK.

On artistic training:

All DPRK artists are members of state-run studio complexes where the art is actually created, and every artist has a formal ranking. These start at level C, move up through B and A, followed by “Merited Artists”, then “People’s Artist”. There are around 50 “Merited Artists” still working today and perhaps 20 “People’s Artists”, the best known being Son U Yong, Kim Chun Jon, Jong Chang Mo, Li Chang and Li Gyong Nam. Almost all artists working in oil and brush-and-ink are men but there are exceptions—for example Kim Song Hui, well known for her brush-and-ink work, is also a People’s Artist. There is also the Kim Il Sung Prize but artists normally have to be at least over 50 to receive this highest accolade, the most famous recipient being Jong Yong Man.

The top art institute is the Pyongyang University of Fine Art with various sections: brush-and-ink, oil, sculpture, ceramics, mural painting and industrial arts. Young artists are selected from around the country and if they are judged sufficiently skilled they will study here. Pyongyang University requires a minimum of five years study: at the moment there are 7-10 students studying oil painting and around 20 studying Korean brush-and-ink painting. In total there are around 150 students a year in the fine art department. Students enjoy class outings to local factories and much time is devoted to object and life drawing although not with nude models but, for example, girls in swimming costumes.

After finishing university the students are selected by various art studios—the Paekho or Central Art Studio, the Songhwa established in 1997 for retired artists, and the most active studio-compound, the Mansudae in Pyongyang.

On artistic style:

The art itself looks like classic Social Realist propaganda, that Beaux Arts technical tradition received through Russia, maintained by the Soviet Union and now, with the transformation of China, only being practised in North Korea, unchanged for more than 50 years. Abstract painting does not exist as it is deemed bourgeois and anti-revolutionary, and if some representational art can be purely aesthetic without political overtones, many landscapes do portray places of the revolution or of political significance.

Obedience to the ideology and excellence in its clear communication to others are what matter rather than any individual glory. This ensures an anonymity to much DPRK production that only its cognoscenti can penetrate. Experts can not only assign an artist’s name to a work, they can also determine whether it is an “original” or one of endless “copies” of an image.

Ever since the founding of the state in 1948, certain themes have maintained their place in the officially approved iconography of the “Fatherland” and it is hard to establish which artist first produced a specific image and when. These same images can be reproduced countless times over the decades. Thus much detective work is required to trace the origin of an image, the only real source being the annual “Yearbook” cataloguing official production.

As [Nick] Bonner explains: “The skill level is very high in academic drawing and painting, but the production is massive and it’s hard to find ‘pure’ pieces, you have to know the provenance or where things were first found.” Indeed, even the museums display copies, ostensibly to “preserve” the quality of the originals kept in storage.

More information on the Mansudae Art Company:

Here visitors, especially foreign tourists, are welcome to see the artists working in their small studios, watch the instructional video on the operation of the company, and buy some work from the large gift shop. Prices at the very top end for a “People’s Artist” can reach as high as €15,000, the favoured currency for all foreign transactions.

Woodblocks are a North Korean speciality, though nowadays they have been almost entirely replaced by lino prints with an attractive rich ink finish. The first ever exhibition of such prints in the United States, loaned from Bonner’s collection, opened last year at New York’s Korea Society, which is currently touring through the country. Initial editions are often very small, less than ten, but if the image proves popular the lino is either re-cut by the same artist or by a “copy” artist and signed by him.

At Mansudae there are also small-scale ceramic sculptures available, naturally of a propagandist nature, as well as more classical ceramics. There is even a startlingly realistic sculpture, reminiscent of Duane Hanson, of North Korea’s most famous ceramicist Uchi Soun (1919-2003) and examples of his widely-exhibited work for as much as €10,000 a pot. There are also striking large-scale figurative watercolours on paper and the highest-quality work, local ink paintings called “Chosonhwa”, some of which will be “thematic art” on revolutionary themes, as each artist will produce at least one a year for the state to show his support for the country. Mansudae employs some 150 of these ink-artists, compared with perhaps 60 oil painters. With some 1,000 members Mansudae produces at least 4,000 top level original works a year, though it also has a factory-style section producing copies for western hotels. Employees, who work a five day eight-hour week, are paid, dependent on level, at a similar rate to the national average, €35 a month for a worker and €70 for a technician.

More information on art in the DPRK:

1. The Paekho Art Studio has partnered with Felix Abt to sell their art internationally. Their web page is here. The Mansudae Art Studio also launched a web page (click here).

2. Nick Bonner has a huge collection of North Korean art. I have seen quite a bit of it, and it is impressive. He also sells North Korean art through the Pyongyang Art Studio.

3. There are a couple of books on North Korean Art. They are very different: North Korean Posters: The David Heather Collection and Art Under Control in North Korea.

4. (h/t Werner) The Mansudae Overseas Development Group, which has been building monuments and buildings across the developing world (mostly in Africa) is part of the Mansudae Art Studio.

Read more below:
Inside the Democratic People’s Republic of North Korea
The Art newspaper
Adrian Dannatt
3/18/2009

Posted in Art, Koryo Tours, Mansudae creative Company (art studio), Mansudae Overseas Development Group | 2 Comments »

North Korea’s revolutionary operas

April 22nd, 2009

I was looking at the Koryo Tours web page and found the following information on North Korea’s revolutionary operas:

In the DPRK there are five revolutionary operas, all created in the early 1970s, which have been termed in North Korea as ‘immortal classics’. In order of production date these are; Sea of Blood, The Flower Girl, A True Daughter of the Party, Tell O’ the Forest! and The Song of Mt. Kumgang. These operas are still performed to this day and on the occasions that performances take place it is even possible for tourists to attend the shows, the performing language is of course Korean but when foreigners are in attendance English language supertitles are beamed onto a wall beside the stage so that the narrative can be followed by visitors. All operas are full-scale, large cast efforts with amazingly high production values and these 5 shows have sustained their popularity over the decades. All of them of course contain strong political messages that reflect the issues concerning the country at the time of their writing up until the present day and people of all ages attend the shows frequently. For complete information on what comprises and constitutes a Revolutionary Opera and what characteristics and values it must have then there is only one book to read; On the Art of Opera by Kim Jong Il.

I have posted descriptions of the five operas below (each also from the Koryo Tours web page):

Read the rest of this entry »

Posted in Art, Film, Koryo Tours, Music, Tourism | 2 Comments »

DPRK cell phone subscribers top 20,000- costs, services detailed

April 22nd, 2009

Institute for Far Eastern Studies (IFES)
NK Brief No. 09-4-22-1
2009-04-22

Since 3G cellular phones were first offered in North Korea last December, more than 20,000 customers have signed up for service. According to a recent report by the Choson Sinbo’s Pyongyang correspondent, the North’s cellular network is capable of providing voice and SMS services to as many as 126,000 customers in the Pyongyang area and along the highway between Pyongyang and Hyangsan, and is available to North Korean residents as well as foreigners in the North.

Anyone can procure a cell phone in the North by submitting required information on an application to a service center, along with an application fee of 50 Yuan, or approximately one Euro, or 130 Yen. Currently, telephones are selling for between 110 Euros for basic handsets, to as much as 240 Euros for phones with cameras and other functions. When a phone is turned on, a white ‘Chollima’ horse graphic appears over ‘Koryolink’ in blue, all with a red background. The trademark is said to mean, “The Choson spirit, moving forward at the speed of the Chollima to more quickly and more highly modernize the information and communication sector.”

To use one’s phone, a pre-paid phone card must be purchased. Three types of phone cards are sold for 850 won (A), 1700 won (B), and 2500 won (C), with ‘B’ and ‘C’ cards offering 125 and 400 minutes ‘free air time’, respectively. In order to see to it that its customer base continues to grow, the communications company plans to adjust prices, and offer services such as television and data transmission. Video and picture transmission and other technological preparations have already been made.

As has been previously reported, the service is provided by CHEO Technology Joint Venture Company, owned by the Choson Posts and Telecomm Corporation (KPTC) and Egypt’s Orscom Telecom Holding. There are now two service centers within Pyongyang. In December of last year, only one International Communications Center was established, but as service grew, a temporary sales office was set up in mid-March. The North Korean government purports to provide cellular service as part of its plan to improve the lives of the masses, and the number of subscribers is climbing daily. CHEO Technology plans to extend the coverage area to every major city, along all highways and along major rail routes throughout the country by the end of the year, with the ultimate goal of providing cellular service to every residential area in the nation by 2012.

Posted in Cell phones, CHEO Technology Joint Venture Company, Communications, Foreign direct investment, Ministry of Post and Telecommunications, Orascom Telecom Holding | 2 Comments »

US Senate bill seeks to add DPRK to terrorism list (again)

April 21st, 2009

US Senator Sam Brownback (R-KS) has introduced legislation which would require the the US governmet to add the DPRK back to its list of state sponsors of terror. If passed by the legislature and signed by the president, this would reverse the decision by Republican President George W. Bush, who had the DPRK removed from the list in October of last year.

The bill is S. 837. It has been referred to the Senate Committee on Foreign Relations. I am not a political insider, so I do not have any insight into how long it will remain there or if it has any chance of passing a committee vote. Joshua ~~will probably be following the bill closely~~ will be actively seeking the bill’s passage, so we can expect updates at One Free Korea.

I cannot offer any analysis of the proposed legislation since the Government Printing Office has not yet published the bill’s text (so it is not on line at the moment). You can track the bill’s progress here. Thomas has a list of cosponsors, etc.

UPDATE: Joshua has a link to a copy of the Senate bill as well as information on the corresponding House bill.

Posted in International trade, USA | 3 Comments »

Lankov on DPRK Social Change II

April 19th, 2009

Andrei Lankov writes in Newsweek:

North Korea will never follow the Chinese path because its circumstances are profoundly different. The biggest factor is the existence of a rich and free South Korea across the border. Southerners share the same language and culture as the dirt-poor North, but their per capita income is at least 20 times higher—and at the moment, average North Koreans are ignorant of the gap. The regime’s self-imposed isolation is so draconian that even owning a tunable radio set is a crime. If North Korea started reforming, it would be flooded with information about South Korea’s prosperity. This would make North Koreans less fearful of the authorities and more likely to push for unification with their far richer cousins, just as the East Germans pushed to rejoin the West.

Knowing all this, North Korea’s rulers will do whatever they can to maintain control. Given the weakness of its Stalinist economy, this means coming up with new ways to squeeze aid from the outside world. In order to keep the money flowing—with as few conditions as possible—Kim is likely to continue engaging in risky brinkmanship and blackmail. To survive, Pyongyang has to be, or appear to be, dangerous and unpredictable.

But such tactics could easily lead to disaster. The only way to avoid this is to replace the regime.

That’s easier said than done: Military options are unthinkable. And sanctions won’t work either, since China and Russia are unlikely to cooperate fully. Even if Moscow and Beijing did go along, the only likely result would be a lot of dead farmers. North Korea’s great famine of 1996–99 demonstrated that the locals do not rebel when oppressed, even under terrible circumstances. North Koreans are terrified, disorganized and still largely unaware of any alternative to their misery.

But there’s a way to change that equation. The past 15 years have seen the spontaneous growth of grassroots markets in the North and partial disintegration of state controls. Rumors of South Korean prosperity have begun to spread, assisted by popular smuggled DVDs of South Korean movies. The world’s most perfect Stalinist regime is starting to disintegrate from below.

The best way to speed things up is for Washington and its allies to push for active engagement with the North in the form of development aid, scholarships for North Korean students and support for all sorts of activities that bring the world to North Korea or take North Koreans outside their cocoon. Such exchanges are often condemned as a way of appeasing dictators, but the experience of East Europe showed that an influx of uncensored information from the outside is deadly for a communist dictatorship.

Pyongyang understands the danger of such exchanges, but it needs money and technology badly enough that it might allow them nonetheless—so long as they fill its coffers and don’t look too dangerous. This is even more the case when exchanges ostensibly benefit members of the elite. For example, a scholarship program to study overseas would go mostly to students from top families. Yet this wouldn’t limit its impact: experience of the outside world will change these young people and turn some of them into importers of dangerous information. A similarly small step helped to unravel the Soviet Union: the first group of students allowed to study in the U.S., in 1957, numbered just four and were carefully selected. Yet two grew up to become leading reformers, and one of them—Alexander Yakovlev—is often credited as having been the real mastermind behind perestroika.

Read the full article here:
Newsweek
Andrei Lankov
4/18/2009

Posted in Economic reform, Education, Uncategorized | 2 Comments »

North Korea’s programming industry

April 19th, 2009

I came across this video (in Dutch with some English) featuring Leonid Petrov and Paul Tjia. It contains some interesting information on North Korea’s computer programming industry.

Click on image to see film

Paul Tjia of GPI Consultancyin the Netherlands has been running technology business delegations to the DPRK for several years. Their next delegation will be taking place this May. To learn more, you can read the marketing leaflet in PDF here.

Posted in Computing/IT, GPI Consultancy | Comments Closed