North Korean Economy Watch

North Koreans working on Qatar construction projects

November 7th, 2014

In the sprawling construction zone that will eventually become Qatar’s gleaming $45bn (£28bn) Lusail City, where the 2022 World Cup final will be held, four construction sites are said to be using North Korean workers, although there is no suggestion they are involved in building World Cup stadiums.

On one site, North Koreans battled biting desert sands and searing heat to construct a luxury residential tower. They laboured on as day turned to night, long after workers from other nationalities had left the site.

One North Korean worker helping to build the high-rise said: “People like us don’t usually get paid. The money does not come to the person directly. It’s nothing to do with me, it’s the [North Korean recruitment] company’s business.”

A project manager of the lavish development said the workers “don’t have a single rial themselves” and “borrow money from us if they need small things like cigarettes”.

“The descriptions of the conditions North Korean workers endure in Qatar – abuse of vulnerability, withholding of wages and excessive overtime – are highly indicative of state-sponsored trafficking for forced labour,” a modern form of slavery, said Aidan McQuade, the director of Anti-Slavery International.

Sources in Qatar estimate there may be as many as 3,000 North Koreans working on projects across the emirate. They are part of an army of workers the North Korean regime exports around the world to bring in much-needed foreign currency. According to defectors’ groups, there may be as many as 65,000 North Koreans abroad, mainly working in Russia, China, Mongolia and the Middle East.

Kim Joo-il, a former army officer who escaped North Korea in 2005, estimates that the Pyongyang government typically takes 70% of the total salary of workers abroad, and that after all “fees”, notionally for food and accommodation, have been paid, workers will be left with only 10% of their salary.
…
Two employees of state-run North Korean recruitment firms operating in Qatar admitted that their workers do not receive their salaries in person, but insisted a proportion of their wages are sent back to the workers’ families in North Korea.
…
A spokesperson from the ministry of labour and social affairs said: “We take all issues around worker payment extremely seriously. There are currently 2,800 North Korean guest workers registered in Qatar and we have no recorded complaints about their payment or treatment. Qatar is determined to continually improve labour conditions for all who work in the country, and will continue to work with NGOs, businesses and other governments to achieve this.”

North Koreans are alleged to have participated in construction of facilities at South Africa’s World Cup as well.

Here are previous posts involving Qatar.

You can read the full story here:
North Koreans working as ‘state-sponsored slaves’ in Qatar
The Guardian
2014-11-7

Posted in Construction, Labor conditions/wages, Qatar | Comments Closed

Tourism opens in North Phyongan Province’s Chongsu Tourist Development Zone

November 7th, 2014

Institute for Far Eastern Studies (IFES)

The opening ceremony for the Chongsu Tourist Development Zone, an area designated as one of North Korea’s economic development zones (EDZ), took place on October 30, 2014.

According to a report on October 31 by the Korean Central News Agency (KCNA), the Chongsu Tourist Development Zone is an EDZ which was developed under the July 23, 2014 decree of the Standing Committee of the DPRK Supreme People’s Assembly, and covers nearly 3,800 hectares in various parts of Pangsan-ri and the Chongsong Workers’ District in Sakju County, North Phyongan Province.

It was reported that the Chongsu Tourist Development Zone was opened through cooperation between North Korea’s North Phyongan Provincial People’s Committee and China’s Liaoning Province, Dandong City People’s Government, and Dandong Overseas Travel Co. Ltd.

In an interview with the KCNA, Kwak Jin Ho, director of the North Phyongan Provincial People’s Committee’s Department for Economic Zone Development, said about the development prospects of the Chongsu tourist zone: “This area will be developed into a tourist zone equipped with modern tourism and service facilities while also highlighting the distinct characteristics of Korean folklore.”

Director Kwak also stated, “The zone’s infrastructure, public facilities and tourist service facilities will all be built to meet modern standards. Currently there are plans to construct factories for special product manufacturing, as well as areas for livestock, orchards and fisheries. With these targets, there are also plans for a cultural recreation district, Korean folk village, general services area, Korean folk hotel, as well as processing plants for spring water, fruits, wild greens and kimchi.”

In addition, Director Kwak said in the interview, “The hillsides will be transformed into orchards to create a tourist destination filled with scarlet and white peaches and other high quality fruit trees.” With regards to visiting the area, Director Kwak stated, “Due to the geographical location of the tourist zone being along the border, tours are generally half-day or one-day trips.”

It was also noted that the Chongsu and Youlgol Revolutionary Historic Sites will be included among visitor destinations, and that there are plans to include the Chongsong Bridge, which was used in the Korean War, and other Pangsan-ri locations as tourist destinations.

With regards to the tourist development zone, the KCNA expressed its anticipation, saying, “When it begins, tourism will attract many tourists to this zone and will therefore form an international tourism link between Chongsu and Dandong, China.”

Here is coverage in KCNA (2014-11-1):

Chongsu Tourist Zone Opens in DPRK

Pyongyang, November 1 (KCNA) — A ceremony took place on Thursday to open the Chongsu Tourist Zone in the DPRK to visitors.

The Chongsu Tourist Zone is an economic zone to be developed under the July 23, Juche 103 (2014), decree of the Presidium of the DPRK Supreme People’s Assembly, which covers some parts of Pangsan-ri and Chongsong Workers’ District in Sakju County, North Phyongan Province. Its total area is more than 3 800 hectares.

The work for opening the zone has been pushed ahead under the cooperation between DPRK’s North Phyongan Provincial People’s Committee and China’s Liaoning Province, Dandong City People’s Government and Dandong Overseas Travel Co. Ltd.

According to Kwak Jin Ho, director of the Economic Zone Development Department of the North Phyongan Provincial People’s Committee, the zone will turn into a tourist development zone equipped with modern facilities.
Its development project includes the construction of tourist service establishments and supply bases such as cultural recreation district, Korean folk village, folk hotel and production bases for specialties, livestock and marine products and fruits. Hillocks of the zone will be changed into orchards of high-yielding fruit trees as a tourist destination.

Half-day or one-day tour is mainly encouraged in the zone while its development going on as it is located in a frontier. The tourist destinations will include Chongsu and Youlgol revolutionary sites associated with activities of Kim Hyong Jik, an indomitable revolutionary fighter, and Chongsong Bridge used during the 1950-1953 Korean War.
The tourism in the zone will provide an international tourist link between Chongsu and Dandong, China.

Here is video coverage:

Here is coverage in the Pyongyang Times:

An inaugural ceremony was held on October 30 at Pangsan wharf to signal the start of tour of the Chongsu Tourism Development Zone in Sakju County, North Phyongan Province.

The participants got aboard a pleasure boat and went up the Amnok River enjoying sightseeing.

The Chongsu Tourism Development Zone was set up by a decree of the Presidium of the DPRK Supreme People’s Assembly on July 23 2014, and it covers part of Pangsan-ri and Chongsong workers’ district in Sakju County.

The zone faces part of Dandong, Liaoning Province, China on the other side of the Amnok River.

It is spread over some 3 800 hectares, with 1 413 hectares in Pangsan-ri and 2 330 hectares in Chongsong district.

It is to be developed with much emphasis on the Korean folk taste and equipped with latest service facilities for tourists.

The project includes building of infrastructure, public amenities, service facilities and bases for processing specialities, animal husbandry, and fruit and fish farming.

Major objects to be developed are amusement district, folk village, service district, folk inn, spring water factory and other establishments for processing fruit, wild edible greens and kimchi.

A variety of good fruit tree species will be planted on hills to add to the green scenery of the zone.

Tour of sites will be conducted in parallel with development of the zone.

A tour spans half or one full day, given that the zone borders China.

On the list of the tourist sites are the Chongsu and Youlgol revolutionary sites associated with activities of Kim Hyong Jik, an outstanding leader of Korea’s anti-Japanese national liberation movement, the broken Chongsong bridge which had been used by Chinese People’s Volunteers when they entered the Korean front during the Fatherland Liberation War (June 1950 – July 1953), the seat of Pangsan-ri, historical relics from the period of the feudal Joson dynasty in the Chongsong workers’ district.

The start of tour of the zone will help forge an international tourist link between Chongsu and Dandong and promote regional tourism and economic development.

Posted in Chongsu tourist development zone, Economic Development Zones (2014), Economic reform, Foreign direct investment, Special Economic Zones, Tourism | 1 Comment »

DPRK oil imports from China in 2014 (UPDATED)

November 4th, 2014

UPDATE 8 (2014-11-14): Yonhap speculates on Chinese oil exports to the DPRK:

China appears to be continuing to provide North Korea with crude oil, contrary to its customs data, officials here said Friday.

China exported not a single drop of crude oil to North Korea in the first nine months this year, according to formal data.

If true, it might reflect widespread speculation that the relations between the communist allies have been strained to some extent due to Pyongyang’s repeated provocative acts.

South Korean officials, however, believe China is continuing to send crude oil to North Korea either in hidden trade or in the form of aid.

“Without China’s provision of crude oil, the operation of many of North Korea’s industrial facilities and vehicles would be suspended. But there has been no such indication yet,” an intelligence official said.

Beijing may be deliberately excluding its crude oil shipments to Pyongyang from the customs data in a bid to give the world the impression that it is joining the international community’s efforts to put pressure on it, another government official said.

He dismissed the view that the North has replaced China with Russia as its main source of crude oil imports.

“North Korea has brought in more crude oil from Russia this year, but the total amount is still less than 100,000 tons,” he said.

North Korea used to import an annual average of half a million tons of crude oil from China. (Yonhap)

UPDATE 7 (2014-11-4): According to Yonhap, North Korea’s jet fuel imports from China have begun to rebound this year.

North Korea imported 13,000 tons of jet fuel from China between January and September, a sharp rise from 359 tons in the same period last year, the unification ministry official told reporters.

But the amount is still far short of past tallies: 38,000 tons in the same period of 2011 and 39,000 tons in that of 2012, he noted, citing formal data from China’s customs authorities

UPDATE 6 (2014-8-23): For what it is worth, China recorded zero oil exports to North Korea in July. According to Yonhap:

According to the Chinese data analyzed by the Beijing unit of the Korea Trade and Investment Promotion Agency, there were no shipments of crude oil from China to North Korea from January to July.

…

Diplomatic sources with knowledge of the matter cautioned against reading too much into the official trade figures because China has been providing crude oil to North Korea in the form of grant aid and such shipments have not been recorded on paper.

In the first seven months of this year, China’s exports to North Korea rose 1.8 percent from a year ago to US$1.95 billion, while imports fell 4.3 percent to $1.57 billion, according to the data.

UPDATE 5 (2014-8-4): The Hankyoreh weighs in on Chinese oil exports to the DPRK:

However, there are also other experts who counter that suspending the supply of crude oil ought not to be read as a sign of deteriorating relations between North Korea and China. They say that, while the statistics read zero, the supply of crude oil is actually continuing. In fact, the price of gasoline and other petroleum products in North Korea remains stable, reports have indicated.

Radio Free Asia reported that gasoline was selling recently for around 10 to 11 won per kilogram at North Korea’s markets, around the same as the 11 won price from 2012. The price of diesel also remained steady at 6 to 7 won, the broadcaster said.

The South Korean government believes that while China may have reduced its crude oil exports, it is continuing to supply North Korea with oil as a form of aid. “China has been supplying North Korea with 500,000 tons in trade, along with a similar amount of free oil. It appears to be providing North Korea with enough crude oil to prevent problems from occurring in North Korean society,” said a senior Ministry of Unification official on condition of anonymity.

…

But many experts believe that relations between North Korea and China are not in such a bad state that China would shut off the supply of crude oil. “Relations between North Korea and China are not normal, but they should not be seen as especially bad, either. From the viewpoint of a superpower, China appears to be steadily observing North Korea’s behavior, without grief or joy,” said Lee Hui-ok, professor at Sungkyunkwan University.

Indeed, aside from interaction between senior officials, other sectors appear to be operating normally without any major disturbances. Trade between North Korea and China in the first half of the year remained at levels similar to 2013. Chinese exports to the North from January to May of this year were US$1.27 billion, down slightly from US$1.33 billion last year. But a big rebound in June brought the first half figures up to US$1.58 billion, nearly the same as the US$1.59 billion posted last year.

In the area of tourism, China also appeared to be taking a more aggressive attitude in the first half of the year than in 2013, running new tourism programs using bicycles and trains, reports said. In the area of personnel exchange, working-level contact is continuing, despite the lack of meetings between senior officials.

“There are virtually no senior political officials from North Korea visiting China. However, technical and economic officials continue to visit China for inspections and training,” said an official at the South Korean embassy in China, on condition of anonymity.

“It is dangerous to read too much into the temporary fluctuations and the sluggish mood recently affecting relations between North Korea and China. That would be a false diagnosis of their relationship,” said Lee Nam-ju, professor at Sungkonghoe University.

“Since North Korea and China understand each other, it does not appear likely that their relations will be suddenly damaged,” Lee said.

UPDATE 4 (2014-7-14): NK News reports on Chinese petrol exports to the DPRK:

China has increased deliveries of oil products to North Korea during the first five months of 2014 according to the latest Chinese customs data, which also confirms the widely reported halt in crude oil shipments.

However, data from the Chinese General Administration of Customs shows that the oil-products being delivered to North Korea only cover a fraction of the supplies of crude once shipped, with total deliveries falling by over 60 percent.

Experts were unsure over whether this constituted a warning from Beijing in response to North Korea’s regional provocations or whether the slow-down was due to the DPRK’s aging refineries. Crude oil must be refined into petroleum products such as fuel oil, diesel and aviation fuel before being used.

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In total, China exported more than 88,000 tons of refined products to the DPRK between January and May 2014, with more than half of the growth caused by spikes in gasoline and kerosene shipments. Gasoline, is primarily used as a fuel for motor vehicles, while kerosene is used to power jet engines and as a heating fuel in North East Asia.

“[This] is somewhat over half of the recorded exports from China to the DPRK in 2010, and somewhat over a quarter of the net petroleum products imports that we estimated for the DPRK from all nations in 2010. So there may be a real shift in petroleum products exports going on,” David Von Hippel a Senior Associate at the Nautilus Institute for Security and Sustainability told NK News.

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Kerosene, used as an aviation fuel, saw the sharpest spike in exports increasing by 5131% when compared to the same period last year. The North Koreans imported more than a hundred thousand barrels, mostly in one bulk shipment in March, amidst news published in early July by Reuters that the DPRK was looking to restart domestic flights.

Gasoline exports also rose by 84% to approximately 280 thousand barrels when compared to the January – May period in 2013.

DPRK imports of diesel rose to 63,000 barrels and mark the first time China has exported the petroleum product since 2011, although no data is available before this point. The exports remain at a low level however, representing only a few percent of total DPRK yearly usage.

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China also upped exports of Butane by 28%, which is used primarily as fuel gas or in gasoline blending. “[Butane] is more likely used as an input to bottled gas (for example, liquefied petroleum gas, LPG), which is, we have heard, increasingly used for cooking in urban households that can afford it in the DPRK.” Von Hippel told NK News.

UPDATE 3 (2014-5-24): This Daily NK article further highlights why we should be skeptical of official reports of the DPRK’s oil imports from China:

Daily NK has confirmed that China is currently supplying oil to North Korea through a pipeline running between the two. Though there have been cases where Beijing has suspended such shipments in response to North Korean intransigence, particularly over nuclear issues, but this has not happened recently.

On April 10th, Daily NK visited an oil storage and pipeline facility in Dandong. There, our team interviewed Chinese Ministry of Public Security officials guarding the facility, which is owned by a subsidiary of China National Petroleum Corporation, or CNPC.

When asked about oil assistance to North Korea, one of the officers acknowledged, “We are continuously supplying oil (to North Korea),” but “cannot say how much we send each month or how much remains as of now.”

Oil deliveries to be transferred to North Korea are received at this facility from a larger nearby facility, Basan, and then are shipped to a partner storage facility at Baekma in Pihyun Couunty, North Pyongan Province. The pipeline is 11km long.

According to sources, these deliveries are not recorded in Chinese customs data, or in foreign trade statistics. The oil from the pipeline is rather characterized as de facto aid, either in the form of low interest loans or free of charge.

This is why, on April 24th, Korean agency KOTRA released a figure of ‘zero’ for oil exports from China to North Korea for the first quarter of 2014, basing it on Chinese customs data. The data says zero for commercial transfers; however, supplies in the form of aid and assistance may not have stopped at all.

In this regard, a diplomatic source said, “China has the ability to stop the oil supplies whenever they want, but they’ve never done so for a long period of time.” He went on, “Above all, China places as much importance on security as North Korea places on nuclearization, and it doesn’t want to see disorder in the North Korean regime. This explains why China keeps providing this assistance.”

Meanwhile, Chinese trade statistics show that 520,000 tons of oil was exported to North Korea every year from 2009 to 2012. Mostly small North Korean tankers shipped this oil.

UPDATE 2 (2014-5-26): The DPRK officially did not import any oil from China as of April 2014. According to Yonhap:

China sold no crude oil to North Korea in the first four months of this year, data compiled by South Korea’s government trade agency showed Monday, in an unusual four-month absence of oil shipments amid the North’s threats of a nuclear test.

The Beijing unit of the South’s Korea Trade and Investment Promotion Agency (KOTRA) said in a report, citing data from China’s customs authorities, that there were no oil shipments from China to North Korea from January to April this year.

A four-month absence of oil shipments from China to North Korea was also reported in 2009, when the North conducted its second nuclear test.

However, a diplomatic source in Beijing cautioned against reading too much into the official trade figures.

“The Chinese side has provided crude oil to North Korea in the form of grant aid, which is not recorded on paper,” the source said on condition of anonymity.

North Korea also appears to have been trying to diversify its source of oil imports, through countries such as Russia, the source said.

UPDATE 1 (2014-4-24): DPRK official imports from China in Q1 of 2014: zero.

According to Yonhap:

China did not export any crude oil to North Korea in the first three months of this year, data compiled by South Korea’s government trade agency showed Thursday, in an unprecedented three-month absence of oil shipments amid North Korea’s threats of a nuclear test.

Monthly shipments of crude oil from China to North Korea were absent in February, June and July last year, but it was the first time that China apparently stopped exports of crude oil to North Korea for three consecutive months.

The Beijing unit of the South’s Korea Trade and Investment Promotion Agency (KOTRA) said in a report, citing data it collected from China’s customs authorities, that there were no oil shipments from China to North Korea from January to March this year.

“To my knowledge, it is the first time that China did not export crude oil to North Korea for three consecutive months and that would impact the North Korean economy,” a diplomat at the South Korean Embassy in Beijing said on the condition of anonymity.

Also worth highlighting from the report:

China’s total trade with North Korea fell 2.83 percent to US$1.27 billion in the January-March period, compared with the same period a year ago, according to the KOTRA report.

Additional information:

1. DPRK – China trade statistics following the Jang Song-thaek purge.

2. DPRK – China trade at all time high in 2013.

3. DPRK diversifying energy sources.

4. DPRK does not import any oil from China in January 2014.

Read the full Yonhap story here:
China didn’t export crude oil to N. Korea in Q1
Yonhap
2014-4-24

ORIGINAL POST (2014-3-10): DPRK oil imports from China in January 2014: Zero!

According to Yonhap:

North Korea did not import any crude oil from China in January, marking the first absence of monthly deliveries from China in five months, a Seoul government report showed Monday.

It was not immediately clear whether the January absence of crude shipments to North Korea from China was linked to Beijing’s growing frustration with Pyongyang over its nuclear program, but it followed the execution of the once-powerful uncle of North Korean leader Kim Jong-un last December.

…

Last year, monthly shipments of crude oil from China to North Korea were absent in the months of February, June and July. However, annual shipments of crude oil to North Korea from China rose 11.2 percent on-year to 578,000 tons in 2013.

Read the full story here:
No crude import from China to N. Korea in Jan.: report
Yonhap
2014-3-10

Posted in China, Energy, International trade, Oil, Statistics, Trade Statistics | 2 Comments »

“Securing economic profit,” fundamental to economic management

October 31st, 2014

Institute for Far Eastern Studies (IFES)

North Korea recently announced that the legitimacy and vitality of the “Economic Management in Our Style” policy has been clearly proven at many factories and business, and that ‘socialist principles’ and the ‘securing economic profit’ based on objective economic laws are the fundamental demands which must be adhered to in economic management.

On October 22, 2014, the Rodong Sinmun published an independently written article entitled, “The Fundamental Demands of Establishing Economic Management in Our Style,” which stated, “In a socialist society where the means of production are socially owned and where the economy develops according to the guiding plans of the country, the problem of how the economy is lead and managed carries an especially important meaning.”

The article first mentions, “With relation to means of production, socialist ownership is the foundation of a socialist economy, and a socialist economy is developed through collective labor.” The article continues, emphasizing, “Adhering to socialist principles in an economic enterprise means to support and hold fast to socialist ownership and to thoroughly realize the principles of collectivism.”

More specifically, the article stated, “In terms of economic leadership and management, we must adhere to and support socialist ownership, put national and societal gains above all else while also securing as much profit as possible for producers.” It continues, “The entire process of production and management must become one which fosters the spirit of collectivism in workers and laborers and which elevates the public’s willpower and creativity so that they may fulfill their roles and feel ownership responsibility.”

The article also mentioned, “Economic guidance and management must coincide with objective economic laws and scientific logic in order to guarantee the highest amount of real economic profit.” This was pointed out as another one of the fundamental demands of the “Economic Management in Our Style” policy.

With regards to economic law, the article says, “Objective economic laws affect a socialist economy, and the process of satisfying those demands is equal to ‘economic construction’ or an ‘economic development process’.” The article continues, “In order to guarantee real economic profits, economic laws and related economic spaces must be put to use effectively. Such economic laws include the law of value, the law of distribution through labor, and the law of planned, balanced development of the people’s economy through economic leadership, management, production and economic activities.

Moreover, the article specifically emphasized production relations with scientific technology. “In terms of economic guidance and company management, efforts first must be made to advance scientific technology, and all processes and factors relating to production and management must be made scientific. All businesses should actively pursue research and development in new technology and progress towards becoming a company where scientific technology and production are integrated – a technology-intensive business.” It also argues that today’s rapid economic development spurs further development in scientific technology, which occurs through the processes of wide acceptance in production and the active realization of technological guidance in production.

Posted in Economic reform | Comments Closed

New satellite imagery of Pyongyang (2014-9-21)

October 31st, 2014

Google has offered some beautiful new satellite imagery of the Pyongyang area dated September 21, 2014. The imagery shows the Pyongyang region remains an area undergoing tremendous transformation that has taken place over the last decade. Below I have highlighted some of the more interesting changes that have appeared in the last few months.

1. The nearly completed Wisong (Satellite) Scientist Street (위성과학자거리) in Unjong District, Pyongyang: 39.231244°, 125.870377°

The Satellite Scientist Street is in Unjong District next to the State Academy of Sciences and inside the newly-announced Unjong Cutting-Edge Technological Development Zone. The area is approximately 900m x 360m and consists of 24 residential blocks (each seven stories, appx 13m x 80m) of alternating green and yellow. There are also approximately eight parks (of one kind or another), nursery, kindergarten, primary school, junior secondary school, standard North Korean retail outlets, hospital, polyclinic, health complex, greenhouses and vegetable gardens. Also constructed nearby is the new Natural Energy Institute of the State Academy of Sciences and a new Paesomjon train station.

After being out of public view for over a month this fall, Kim Jong-un made a notable appearance here on October 14. It was completed and opened on the 17th. Officially the compound is for scientists at the State Academy of Sciences.

2. Pyongyang Baby Home and Orphanage (평양육아원,애육원): 39.042442°, 125.794987°

This new orphanage in Pyongyang is by far the country’s largest and nicest. It sits on a plot of land approximately 110m x 250m. Kim Jong-un visited the completed facility on October 27.

During the construction, many visitors to Pyongyang were unaware of the location of this project (I know because I asked). This is because it lies secluded behind exclusive leadership residencies (Undok Housing Complex and and United Front Department Housing) in northern Taedonggang District.

3. New luxury restaurant boat on Taedong River: 39.014252°, 125.755015°

A large restaurant boat is under construction on the banks of the Taedong River in central Pyongyang. Not much is known about this boat yet, but it is approximately 118 meters long–nearly twice the length of the largest restaurant boat in the DPRK, the Taedonggang Restaurant Boat. The investors in this project must have high expectations. It will be interesting to see if these boats will all be managed by the same organization, and whether the Pyongyang consumer economy can support two such operations.

NK News was the first to report on this boat back on September 11. You can see a photo of the ship here.

UPDATE: Kim Jong-un visited this boat on 2015-9-28. It is called the “Combined Service Boat Mujigae”.

4. Progress made on Mansudae Underground Convenience Store (만수대 지하편의상점): 39.026505°, 125.749284°

A Koryo Tours delegation in March of 2013 was the first to report that the Hakdanggol Fountain Park had been torn down to make way for a new facility in the heart of the central district. The DPRK has yet to announce much information related to the project, but tourist photos indicate it will be an underground shopping center below a park.

5. Progress made on high-rise shopping center near Tongil Market: 38.982815°, 125.733247°

Situated just north of Pyongyang’s most popular market (for foreigners), the Tongil Street Market, and just south of the failed investment project KKG Avenue, this large high-rise construction project continues to make progress. The building appears to have an “H” shaped base approximately 110m x 70m. This project is likely being supported by foreign investors, however we do not know who they are or anything substantive about this project.

6. Progress made on East Pyongyang Shopping Mall (동평양지구 상업거리): 39.030246°, 125.775913°

The groundbreaking ceremony for this project was held on January 16th, 2014, but little substantive work had been done as late as April. The construction site is approximately 270m x 110m and was unoccupied as far back as 2000. When launched, this shopping center was under the auspices of the State Economic Development Commission (SEDC–the same organization responsible for the nation’s new economic development zones) and a Chinese consortium named “Great China International Group”. Since the launch, the SEDC, Ministry of Foreign Trade, and the Joint Venture Investment Corporation (JVIC) have been merged into the Ministry of External Economic Affairs (Not to be confused with the External Economic Affairs Commission which was dissolved in the late 1990s).

7. Closure of east Pyongyang tram depot and removal of tracks

According to new satellite imagery, one of Pyongyang’s tram lines has been removed. The tracks, which were inlaid into the road, seem to have been completely pulled up and the roads repaved. The tram depot remains in eastern Pyongyang, but it can be easily be re-purposed to serve as storage or manufacturing needs in the future.

It will be interesting to see if this has any effect on the Sadong Market which lies directly next to the former tram depot. It would have been relatively easy for customer to travel to the market with such convenient public transport, but will people make the effort when the commute becomes more complicated?

UPDATE: Reader Gag Halfrunt sent in the following helpful information:

Judging by this map from Transphoto.ru the closed tram line is the eastern portion of line 1. Line 1 has another depot at the western terminus in Mangyongdae, which is still open in the latest Google satellite photo.s.

Indeed there’s a note on Transphoto.ru saying the line will be converted to a trolleybus line. Translated by Google, it says:

Tram line 1 of route to the east of the city Songsin and depot at the end of the line are closed. The tram is expected to be replaced by trolley. This line was the only one in the city where the tram followed by the middle of the carriageway and not along the roadside, which is not the North Korean standards. Previously the line had already been shortened to Sintra area-Dong, before the bridge, on the east bank of the river Tedogan, before you reach the town center . Tram Pyongyang also begins to experience significant deficits with operational rolling stock.

Posted in Construction, Google Earth | 2 Comments »

Second firm in KIC bows out

October 30th, 2014

According to Yonhap:

One of South Korea’s small and mid-sized manufacturing companies (SME) at the inter-Korean industrial complex has applied for business closure due to falling sales, officials said Thursday.

…

An unidentified small manufacturer for watch and mobile phones cases on Wednesday submitted an application for dissolution to the committee handling affairs at the joint park, according to officials from Seoul’s unification ministry.

It marked the second case since June 2009 that South Korean firms operating at the Kaesong Complex have closed their businesses. It also marked the first time since the operation of the park had been halted briefly last year.

The company, which had employed about 100 North Korean workers, has been suffering from business setbacks since 2012 as its annual sales fell to US$300,000 from its peak of some $700,000.

The Yonhap report does not mention the name of the company that is closing up shop.

The first firm to go bankrupt in the KIC was the Living Art/Sonoko Factory.

Read the full story here:
S. Korean firm at Kaesong park faces biz failure
Yonhap
2014-10-30

Posted in Kaesong Industrial Complex (KIC) | Comments Closed

DPRK visitors to China in 2014

October 30th, 2014

According to Yonhap:

The number of North Korean visitors to China fell more than 6 percent on-year in the first nine months of this year, a U.S. news report said Thursday, in an apparent sign of chilled relations between the two ideological neighbors.

Some 139,800 North Koreans traveled to China between January and September this year, down 6.5 percent from the same period last year, Radio Free Asia reported, citing China’s National Tourism Administration.

It marked the first decline in three years, possibly due to frayed ties between the two countries.

The figure rose 18.6 percent in 2012 and continued to grow 14.4 percent last year.

Employment was the most common reason to travel to China this year with 47 percent, followed by conferences and business with 19 percent. Less than 1 percent went there for tourism.

The vast majority, or 113,000, of them were men, compared with just 26,800 women, according to the report.

Read the full story here:
N. Korean visitors to China drop 6.5 pct in 2014
Yonhap
2014-10-30

Posted in China, Labor conditions/wages, Tourism | Comments Closed

North Korean “Superman” robs Fort Knox

October 29th, 2014

I received a strange email from an anonymous source (so of course I opened it) containing the following information:

This is a piece of exciting news that has been leaked from an anonymous source in North Korea and it might be of your interest: some images from the storyboard of the latest film production by the Korean Feature Film Studio, based in the capital of the country, Pyongyang.

…

The images that we have received show a scene of what appears to be the North Korean version of a Marvel superhero story. He is less muscled than his American counterparts; his clothes are not so tight or shiny but recall the military apparel. He carries a hammer, a sickle and a brush, representing the Korean workers and uses a torch as a weapon. And he is not alone: he has a winged horse as his sidekick.

Apparently, the objective of this superhero is to destroy the capitalist system. In the images we can see him attacking Fort Knox, which holds the largest US official gold reserves, and then flying away with the money and throwing it into the ocean.

…

I have no idea if this is “real” or where it came from, but it is certainly interesting and entertaining. The people who sent this to me do not seem to know much about North Korea, or they would have easily recognized the Chollima Horse –if not the more obscure “Ranam Torch.” So given how little they appear to know about the DPRK, how would they have access to this information? It is also worth noting that the drawing of the bullion depository at Fort Knox is a very accurate representation of the actual building, but so far no Fort Knox set can be seen at Pyongyang Film Studio.

The story line is not too original–it is the plot of Goldfinger (or Die Hard 3), except of course “Goldfinger” has been replaced by a North Korean Superman, and he is the protagonist. For what it is worth, Kim Jong-il was also rumored to be a big fan of James Bond films.

Of course the US (and everyone else) went off what was left of the international gold standard (Bretton Woods) on August 15, 1971, so the economic implications of the plot are negligible nowadays (Fort Knox gold is an insignificant part of the US economy–it’s actually a drain on the US Treasury until the gold is sold off). Additionally, Fort Knox did not play a role in international gold clearing. That was done by the Federal Reserve. I doubt that these crucial bits of information will make it past the North Korean producers (if there are any).

Posted in Film | Comments Closed

Russian investment into DPRK railway

October 26th, 2014

Most of Russia’s current investment in the DPRK has been limited to Rason: Rason Port, Rason-Russia Railway. But there has been movement in bilateral relations this year.

In March of 2014, the North Koreans and the Russians announced bilateral trade would be conducted in Rubles and they discussed additional economic opportunities: Inter-Korean transportation, gas pipeline, and the Kaesong Industrial Complex.

On October 20, 2014, ITAR TASS reported the following:

Russian construction compnay NPO Mostovik has developed a plan of designing and upgrading railways and ore enriching plants, as well as developing and processing natural resources in North Korea, CEO Vladimir Shishov told PRIME on Monday.

“These are two interconnected and quite complex processes. But the NPO has lots of experience in designing, and we will promote our experience and technologies in this region,” Shishov said.

About 7,000 kilometers of North Korean railways require modernization, and 3,500 kilometers of them must be modernized urgently.

North Korea “has a large industrial and economic potential, the realization of which requires solving infrastructural problems.” Without the development of railways and roads and electrification, “it is impossible to solve the whole range of tasks, connected with the development of North Korea’s economy,” he said.

KCNA followed up on October 23:

Talks Held between DPRK Minister of External Economic Relations and Minister of Development of Far East of Russia

Pyongyang, October 23 (KCNA) — Talks between Minister of External Economic Relations Ri Ryong Nam who doubles as chairman of the DPRK side to the Inter-Governmental Committee for Cooperation in Trade, Economy, Science and Technology between the DPRK and Russia and Minister of Development of Far East of Russia Alexandr Galushka who doubles as chairman of the Russian side to the committee were held here on Thursday.

Present there from the DPRK side were Ju Jae Dok, vice-minister of Railways, and officials concerned and from the opposite side were the party of the minister of Development of Far East, Alexandr Timonin, Russian ambassador to the DPRK, and a staff member of his embassy.

Discussed at the talks were the issues of boosting the economic and trade cooperation between the two countries.

And on October 26:

Delegation of Ministry of Railways Back Home

Pyongyang, October 26 (KCNA) — The delegation of the Ministry of Railways led by Minister Jon Kil Su returned home Sunday after taking part in an international seminar held in Sochi, Russia.

However, while North Korea’s foreign minister and railway minister were in Russia, the North Koreans and Russians held a ground-breaking ceremony to announce the rebuilding of the Jaedong-Kangdong-Nampho railway line. According to KCNA:

A ground-breaking ceremony of rebuilding the section of Jaedong-Kangdong-Nampho railway stations took place at East Pyongyang Railway Station Tuesday.

Present there were Minister of External Economic Relations Ri Ryong Nam who doubles as chairman of the DPRK side to the Inter-Governmental Committee for Cooperation in Trade, Economy, Science and Technology between the DPRK and Russia, officials concerned and working people in the city.

Also on hand were Minister of Development of Far East of Russia Alexandr Galushka who doubles as chairman of the Russian side to the Inter-Governmental Committee for Cooperation in Trade, Economy, Science and Technology between the DPRK and Russia, and his party, Alexandr Timonin, Russian ambassador to the DPRK, staff members of his embassy and foreign diplomatic envoys here.

Oleg Shishov, director general of the Russian Bridzh Group, and Won Phil Jong, senior vice-minister of Railways of the DPRK, made speeches at the ceremony.

They said that they were pleased that the ceremony of weighty significance in economic development between the two countries was being held in Pyongyang this year marking the 66th anniversary of the establishment of diplomatic relations between the DPRK and Russia.

The project for remodeling railways, the first stage of realizing the large-scale cooperation project which is in line with the common development and interests of the peoples of the two countries, marked an important occasion in developing economic cooperation between the two countries, they noted.

Alexandr Galushka and Ri Ryong Nam made congratulatory speeches.

They said that Marshal Kim Jong Un is paying deep attention to boosting the bilateral friendly relations.

The relations of economic cooperation between the two countries are growing stronger with each passing day, they said, hoping for bigger successes in the work to develop the bilateral cooperative relations in the future, too.

A reception was given that day.

According to supplementary information in Yonhap:

A Russian broadcaster earlier reported that Pyongyang and Moscow signed a US$25 billion deal to modernize a combined 3,500-kilometer stretch of railways in North Korea. If confirmed, it would cover 60-70 percent of the North’s railways.

Russia Beyond the Headlines reports the following information:

The implementation of the Russian-North Korean project Pobeda (Victory) will make it possible for North Korea to start exporting metallurgical coal in 2015, one of the participants in the project, LLC NPO Mostovik CEO Oleg Shishov believes.

“We’re already discussing this with the North Korean government, that everything will go to [third countries], and they agree. The volume is tens of millions of tonnes at the initial stage, and then we’ll see. Let’s take the first step,” Shishov told reporters.

He said the North Korea stands out by its almost complete absence of sulfur. “This is a very important indicator for metallurgical production, particularly for production of high quality steels,” Shishov said.

“Mining is already underway there, only with such methods that little is being mined. the methods are very inefficient, unproductive. Modern mining equipment will be delivered there and this will increase production manifold. The reserves there are huge,” Shishov said.

He did not specify who would be investing in the development of North Korean coal fields or the countries that would be importing the coal.

Russia and North Korea are now beginning to implement the Pobeda project, which calls for the development of mineral resources and comprehensive reconstruction of North Korea’s railway network. A number of Russian companies are participating in the project, including Mostovik. The other participants have not been named.

Here is a Google Earth image of the proposed train route:

The total length of this route is approximately 175km.

Here is the proposed route relative to other railway lines in the area:

The obvious interpretation of the image is that the railway renovations will be used to facilitate coal exports. Jaenam Station exclusively serves the Sinchang Youth Coal Mine under the Sunchon Area Youth Coal Mine Complex Enterprise. Additoinally, the area surrounding Jaenam Station is doimated by coal mines. The Kangdong Station is not in the town of Kangdong, but just to the east where it services the Kangdong Area Coal Mine Complex Enterprise. Coal in these areas will supposedly be carried more efficiently to the port of Nampho where a coal terminal already exists.

If indeed this is the primary purpose of the project, then the obvious loser will be China (on multiple fronts). Currently Chinese state-owned mining companies are the only serious investors in North Korea’s extraction industries. Because of their unique relationship with and proximity to the DPRK, they are able to purchase coal and other resources at a bargain price (monopsony). North Korea can only strengthen its bargaining position with these companies by finding other buyers of its produce. Russia’s investment could help them accomplish this goal.

However there are two domestically-related uses that renovation of this railway route could facilitate.

The first is domestic steel production. Russian sources highlight the importance of sulfur-free coal for the production of steel, and this railway line passes directly by the Chollima Steel Mill, one of the largest smelters in the country. Increased steel production has long been a goal of North Korea’s economic policymakers going back to the “heavy-industry” days of the 1950s. With a renovated railway track that connects the correct kind of coal with Chollima Steel Mill, the DPRK may be able to produce more steel for both domestic use or for export.

A second potential domestic use could be the increase in energy supply to Pyongyang. As I highlighted in 38 North, the DPRK is constructing a new coal power plant in Kangdong. This new power plant, as well as the Pyongyang and East Pyongyang Thermal Power Plants lie along the Jaenam-Nampho line. Increased coal supplies to these mills could have significant impact on power supply in Pyongyang.

Are there any other potential uses? Maybe, but these are more difficult to see right now and may only become evident at a later date. After examining the composition of facilities along the track between Pyongyang and Jaenam, I cannot identify any other specific industries that may benefit, other than potential military factories that lie along the route. These, of course, are worth of examination, but I am not the most qualified to carry that out.

On November 6, 38 North Published this article on DPRK-Russia relations.

Posted in Coal, Energy, Foreign direct investment, International trade, Railways, Russia, Transportation | Comments Closed