DPRK imports US$644m of luxury goods in 2013

October 7th, 2014

According to Yonhap:

North Korea imported US$644 million worth of luxury goods last year despite U.N. sanctions banning the transfer of such goods to the country, a South Korean lawmaker claimed Tuesday, citing Chinese customs data.

Luxury goods, including certain kinds of jewelry, precious stones, yachts, luxury automobiles and racing cars, have been banned from transfer to North Korea under a U.N. Security Council resolution adopted in response to the North’s nuclear test in February 2013.

Still, North Korea continues to buy luxury items from China, Europe and Southeast Asia, Rep. Yoon Sang-hyun of the ruling Saenuri Party said, citing Chinese customs data on two-way trade with North Korea and studies on North Korean trade patterns.

“(North Korea) is increasing the supply of goods at department stores for Pyongyang’s elite, while also increasing the import of goods to be used as gifts for senior party and military officials who form the core class that preserves the regime,” Yoon said.

In recent years, the communist country has especially bought more liquor, watches, handbags, cosmetics, jewelry and carpets, leading to a doubling of imports of luxury goods under the current leader, Kim Jong-un, from an average of $300 million under his father and former leader Kim Jong-il, who died in December 2011.

North Korea also spends about $200,000 annually on imports of purebred pet dogs, such as shih tzus and German shepherds — which are not classified as luxury goods — and related care products from Europe, Yoon said.

With the money spent on importing luxury goods last year, North Korea could buy more than 3.66 million tons of corn or 1.52 million tons of rice, far more than the country’s food shortage of 340,000 tons estimated by the U.N. Food and Agriculture Organization and World Food Program for the year 2013-2014, he added.

Here is coverage in the Daily NK.

Read the full story here:
N. Korea imports US$644 mln worth of luxury goods in 2013: lawmaker
Yonhap
2014-10-7

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Recent CRS reports on the DPRK

October 7th, 2014

The Congressional Research Service “recently” published two reports which relate to the DPRK:

The U.S.-South Korea Free Trade Agreement (KORUS FTA): Provisions and Implementation
September 16, 2014: 2014-9-16-KORUS-Kaesong
June 2, 2011: Imports-from-North-Korea-2011

(Although this report focuses mostly on US-ROK issues, there is detailed discussion of the complex negotiations around the Kaesong Industrial Complex (KIC).)

Iran-North Korea-Syria Ballistic Missile and Nuclear Cooperation 
April 16, 2014: 2014-4-16-Iran-Syria-Missile

You can download most former CRS reports dealing with the DPRK here.

 

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Senior DPRK officials to visit Seoul for close of Asian Games

October 3rd, 2014

UPDATE 2 (2014-10-9): AEI’s Nick Ebestasdt offers analysis on the delegation visit:

Once again the Democratic People’s Republic of Korea (aka DPRK or North Korea) is back in the news—and this time it did not secure global headlines by testing a nuclear device, or shooting rockets near its neighbors, or threatening to turn Seoul/Tokyo/Washington/etc. into a sea of fire.

Instead the world’s only ever Communist-dictatorship-cum-hereditary-Asian-dynasty has piqued international curiosity through the conjuncture of a carefully staged diplomatic event and a potentially important domestic non-event.

The event was the surprise visit by an 11 person North Korean delegation to the South—ostensibly to attend the 2014 Asian Games in Incheon, but in reality to propose a resumption of inter-Korean dialogue, which has been in a deep freeze since the 2013 inauguration of President Park Guen Hye.

The non-event is the disappearance from public view of North Korea’s “Dear Respected Leader” Kim Jong Un. At this writing, Dear Respected was last seen in public on September 3—over a month ago. Although North Korean footage of Dear Respected is always carefully doctored, he was last seen walking with a limp. He was a no-show for the Supreme People’s Assembly on September 25, a ceremony whose pageantry he would ordinarily be expected to figure in, if not center around. North Korean authorities, a group not known for indulging in glasnost, have offered no official explanation for this prolonged public absence. The most the officialdom has had to say so far is that Kim Jong Un is “suffering from discomfort,” as state television put it last week.

Unsurprisingly, both Western media and those who call themselves “North Korea experts” have been in an economy-class dither over these two developments, speculating about what each of them might mean—and also trying to fabricate a link between them. By one rumor, Dear Respected has gotten so fat that he has broken both his ankles falling off his fancy elevated shoes. No, says another whisper—he is gravely ill and his sister is in charge. Wrong again, insists a third—there has been a coup, and he has been deposed by the military. That is why the North Koreans have sent all these military types to Seoul for talks!

Having followed North Korean affairs for over thirty years myself, I have to confess that there is nothing new about the current jumble of conflicting and sometimes outlandish guesses that passes as commentary on North Korean current events. Given the DPRK government’s ruthless control and manipulation of information—two of the few things Pyongyang can actually do well—outsiders are often left more or less divining signs from chicken entrails. Add to the mix the South Korean intelligence community’s unhealthy but longstanding history of attempting to play the local and global press in accordance with its own short term agenda, and one can see how easy it is for unseasoned reporters, or even more inveterate “North Korea hands,” to get caught up in a hologram of lies.

Early on in my own research, I realized that one had to approach the North Korean puzzle as if one were in a Miss Marple murder mystery, that is to say, by proceeding under the assumption that everyone is a liar and has their own reason for misrepresenting the truth. If one starts with that premise, and takes William of Ockham as one’s guiding star, you have a chance of figuring out what is going on—but only a chance.

With this in mind, let’s start by trying to make sense of Dear Respected’s continuing absence from the propaganda stage. Is this the first time he has gone missing from action in this fashion? No. In his brief reign—since the Dear Leader’s passing in late 2011—he has been secluded from his adoring local fans at least twice before. Moreover, both his father and his grandfather made it a habit of disappearing from public view, too. Of course, rumors would fly: Kim Il Sung is dying of cancer from the big wen on the back of his neck; Kim Jong Il has died in a car crash; no, Kim Jong Il has fallen off a horse and is now a zombie. Such speculation—or should we say, wishful thinking?—always proved to be wrong. Each and every time, the Supreme Leader has come back on camera. We outsiders must recognize the obvious truth that we know so little about the dynamics of North Korean rule that we cannot even explain ex post facto why these various and repeated Kim eclipses took place. Of course, there is always a first time. This time, Dear Respected’s public hiatus may be different. But this would be a first.

And what about the North Korean delegation’s surprise visit? To begin, the North always tries to do things by surprise—that is how Pyongyang keeps control of the show. (It’s no surprise that the South Korean side would do anything they could to accommodate a North Korean official delegation—any open democracy would likewise do whatever it could to accommodate the possibility of dialogue with an implacably hostile neighbor.)The North Korean delegation certainly came south to do something more than admire the sports show—but the notion that they were coming to announce a change of regime, as some have suggested, is silly season at its silliest.

Many writers have noted the heavy military and security complexion of the visiting team, which reportedly includes the number two man in the DPRK military, the former head of the North Korean People’s army, and a fellow who might be the spy chief of the police state. Military plot? Hardly. In a state like the DPRK, most of the important jobs perforce are military, security, and intelligence. And note, inter alia, that all of these heavyweights are members of the DPRK Workers’ Party Central Committee. They’re Party boys, though not in the sense we use in Western universities. Like all other Marxist-Leninist states, North Korea’s political Party keeps the military on a tight choke chain: no one in command wants to see their regime overturned by an Asian variant of Julius Caesar or Napoleon Bonaparte. Highly decorated as they may be, these men are errand boys sent south to do their masters’ bidding.

And just what might that bidding be? If William of Ockham were wielding his famous Razor, the parsimonious surmise might whittle our guesses down to be: money. As we know from other sources, the North Korean state has become desperately dependent on the largesse of just one power: China. As we know from other sources, North Korea has never in its entire history been as desperately dependent on the largesse of a single benefactor as it is on China today. Since North Korea is perennially in need of external support, diversifying those sources of subvention is now a state imperative. To judge from early reportage, the visiting North Korean fundraising show has not done so badly on its southern tour: according to news accounts, Seoul has already been talking about easing economic sanctions, and even possibly resuming the lucrative tours to the North that were shut down after that unfortunate deadly shooting of a South Korean visitor by a guard on a beach.

The DPRK delegation may of course have more in mind than just money—South Korea has so much more to give, including its territory and its very sovereignty! But as a first guess, extracting money for the mothership may not be such a bad one.

Long ago, a memorable South Korean booklet described North Korea as “the land that never changes.” Appealing as that title may be, it is highly misleading. North Korea is constantly—in fact, almost incessantly—in flux. It has buried two Supreme Leaders, and may be working on a third. It has experienced the first-ever mass famine in any urbanized literate society during peacetime. It has achieved the most epic long-term economic fail of any standing state in the modern era. It is the first country with a Sahelian-style international trade performance profile to test nuclear weapons. And just last December, with great fanfare, it publicly announced its first-ever execution of an inner member of the royal family.

Things are always changing in North Korea. It is instead our inability to understand this country that seems to be the unchanging factor in the equation.

UPDATE 1 (2014-10-6): Following the buzz of speculation around the DPRK delegation visit to the ROK, ships exchange warning shots. According to the BBC:

North and South Korean ships exchanged warning shots after a North Korean patrol boat crossed a disputed maritime border, say officials from the south.

The incident happened around 10:00 local time (03:00 BST) on Tuesday, said South Korea’s Yonhap news agency.

It comes three days after North Korean officials agreed to resume high-level talks with the South.

Here is coverage in the JoongAng Ilbo.

Original Post (2014-10-3): According to Reuters:

Three senior North Korean officials will make a rare visit to South Korea on Saturday to attend the Asian Games closing ceremony in what could potentially bring a breakthrough in tense ties between the rival Koreas.

Heading the delegation will be Hwang Pyong So and Choe Ryong Hae, who are senior aides to North Korea’s supreme leader Kim Jong Un, South Korea’s Unification Ministry spokesman told a news briefing.

The announcement of the visit comes as a surprise because Pyongyang has been issuing invectives toward the South and President Park Geun-hye, criticising her calls for Pyongyang to end its arms programme and improve human rights conditions.

Hwang is the head of the North Korean army’s General Political Department, a powerful apparatus loyal to the secretive country’s leader and a key post overseeing the 1.2-million-member military.

Here is coverage in the Associated Press.

Here is coverage in Yonhap.

Here is coverage in the New York Times.

Here is coverage in the Korea Times.

Here is coverage in the Washington Post.

Here is Aidan Foster Carter in NK News.

Interesting analysis on the story in the Daily NK which provides a rational for the visit based on domestic politics.

Here is coverage in The Diplomat.

Additional Information

1. NK Leadership Watch has bios of the men: Hwang Pyong So, Choe Ryong HaeKim Yang Gon

2. Here are bios on Wikipedia: Hwang Pyong So, Choe Ryong hae, Kim Yang Gon

3. Here is the South Korean MOU leadership organization chart where you can see these individual’s positions within the system.

4. Andray Abrahamian writing in 38 North last year on sports.

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ROK agricultural assistance heads to DPRK

October 1st, 2014

The Hankyoreh reports on some agricultural aid heading to the DPRK:

ace-Gyeongnam-Hanky-2014-10-1

Picture above via the Hanhyoreh

The article reports:

Trucks carrying materials for greenhouses, fertilized soil and plant seeds for North Korea crosses Unification Bridge in Paju, Gyeonggi Province, Sept. 30. The 200 million won worth of goods were donated by Ace Gyeongnam.

Greenhouses have been constructed all across the DPRK in the last few years.

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DPRK animators join industry fair in China

October 1st, 2014

SEK-studio-2014-9-21

Pictured Above (Google Earth): SEK Studios in Pyongyang

According to Yonhap:

North Korean animation films have been put on display at an international animation fair in China, with a North Korean official admitting that the country’s animators have been increasingly sub-contracted by foreign studios, according to a Chinese state media report on Wednesday.

About 200 companies from South Korea, North Korea, Australia, Canada, Japan, Russia and other nations joined the five-day animation fair in Shijiazhuang, the provincial capital of Hebei, starting Tuesday, the China News Service said.

North Korea’s state-run SEK studio set up a special exhibition hall at the fair, according to the report.

Ho Yong-chol, head of SEK’s office in Beijing, told the Chinese media that the SEK studio employs more than 1,500 animators and has “an annual production of up to 8,000 minutes” of animated films.

“OEM (overseas export market) has become a main source of productions for North Korean animation studios,” Ho said, adding that the North can produce an animated film with “even less than half” of a European studio’s budget.

North Korea has quietly developed its animation industry. One of South Korea’s popular animation films, “Pororo the Little Penguin,” was produced jointly with North Korean cartoonists.

Read the full story here:

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Private aid driven to DPRK from ROK

October 1st, 2014

According to the JoongAng Ilbo:

Twenty container trucks from Ace Gyeongam, a charity foundation fund by bed manufacturer Ace, cross the inter-Korean border yesterday to provide agricultural aid to North Korea. About 200 million won ($190,000) of farming goods will be sent to North Hwanghae Province, marking the first time aid was delivered on a round trip using inland highways between the two Koreas.

Read the full story here:
Aid on the way
JoongAng Ilbo
2014-10-1

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Hillside farming

October 1st, 2014

The US State Department’s Humanitarian Information Unit put out the following map of hillside farming in the DPRK.

US-DOS-HIU-DPRK-Food-shortage-2014-9-24

Click image for larger (PDF) version.

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DPRK Foreign Minister Ri visits UN

September 27th, 2014

UPDATE 1 (2014-9-27): Martyn Williams has posted video (translated into English) of Minister Ri’s full speech.

For those who do not wish to listen to the whole speech, here is a transcript (English, PDF).

ORIGINAL POST (2014-8-30): According to KBS:

North Korea’s Foreign Minister Ri Su Yong is scheduled to visit the United States in mid-September for a United Nations general assembly in New York. This marks the first time a North Korean foreign minister will visit the U.S. in 15 years.

Sources have said Ri has personally requested to make a keynote address at the session as a state representative.

The last time a North Korean foreign minister was present for a United Nations general assembly was in 1999 when Paek Nam Sun held the position. In 1992, Kim Yong Nam had visited the U. S. to attend the session.

As these were the only occasions a high-ranking North Korean foreign ministry official had taken part in the UN general assembly since the North became a member state in 1991, speculations have risen over Ri’s pending visit.

One South Korean diplomatic source said Ri was not attending the assembly “just to make a keynote speech,” but rather to engage in negotiations with Washington for a change in chilled relations.

Read the full sotry here:
N. Korea Foreign Minister to Visit U.S. For First Time in 15 Yrs
KBS
2014-8-30

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Kaesong Industrial Complex: One year after resuming operations

September 26th, 2014

Institue for Far Eastern Studies (IFES)

The Kaesong Industrial Complex (KIC) was reactivated on September 16, 2013 after a five-month shutdown due to North Korea’s withdrawal of North Korean workers from the complex. One year has passed without interruption of operations. However, while most of production activities were resumed to pre-shutdown levels, previously discussed agreements between the two Koreas are not meeting expectations in terms of transportation, customs, communications, security for personnel and vehicles, upgrades to meet international standards, and normalization for development of the KIC.

The tentative suspension of the KIC lasted from April 8 to September 16, 2013. During this period, all aspects of both production and export were frozen completely. After restarting operations, gradual progress was made, with production in October 2013 down only 32.7 percent compared to March of the same year (pre-suspension), totaling approximately 30.8 million USD. By May 2014, average monthly production totaled nearly 42.8 million USD, showing a strong recovery to a total of 93.5 percent of pre-suspension production capacity.

After resuming operations, companies at the KIC experienced problems such as loss of capital, cancelled contracts by buyers, order quantity reduction, and other problems which caused uncertainty about the future of the complex. In spite of this, companies at the complex were quickly able to recover due to their own efforts and the support of various related organizations.

However, since the reactivation, not much progress has been made toward achieving the goal of “developmental normalization” of the KIC. This goal is aimed at expanding and improving the complex through cooperation between the two Koreas. Agreements have been made between the North and South to work together to make the complex better than it was before the shutdown by solving several issues related to safe entry and stay of personnel; transportation, customs, and communication in the KIC; and internationalization of the complex.

For some time after restarting operations, the agreements between the North and South were actively being pursued, and the process of developmental normalization progressed steadily. In January 2014, construction of the Customs, Immigration and Quarantine (CIQ) facilities were completed alongside the implementation of a Radio Frequency Identification (RFID) electronic entrance system, and in the following month, progress was made on agreements related to the provision of an Internet service at the KIC.

Furthermore, the joint North-South Commercial Arbitration Committee was created. In March 2014, the committee had its first meeting, which dealt with commercial disputes arising at the complex. Recently, over twenty companies from the United States, Germany, China, Russia and other countries have made inquiries to the South Korean government with regard to investing in the KIC. The Foreign Investor Support Center was also opened to attract and manage investments from abroad.

However, due to the joint ROK-US military exercises, inter-Korean relations have become strained. North Korea also has taken a passive stance toward the Kaesong agreements, leading to a situation where no real progress has since been made. South Korea has been calling out for a subcommittee in order to enforce the RFID card system, continue discussion on the introduction of Internet service, and address the problems of passage, communication and transport at the complex. Seoul has been demanding continuously for North Korean authorities to cooperate on these issues.

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North Korea’s donor fatigue

September 25th, 2014

The Wall Street Journal reports on the difficulties the UN World Food Program faces trying to find supporters for its operations in North Korea:

The United Nations aid program for malnourished North Koreans may close after raising only a fraction of the money it needs to operate in the country, a senior U.N. official said in a call for donations.

“We may need to scale down or think about closing altogether,” Dierk Stegen, the Pyongyang-based North Korea head for the U.N. World Food Program, said in an interview.

The agency, which has operated in North Korea since 1995, could shut early next year if there is no indication it will be able to raise needed funds by the end of October, he said. One complication is that North Korea’s humanitarian crisis has been overshadowed by the conflict in Syria and Ebola outbreak, he said.

While North Korea is getting better at feeding its people, hundreds of thousands of young infants and their mothers remain chronically malnourished, he said.

Contributions from private organizations and the South Korean government in recent weeks have helped, but the program is far from its goal of $50 million, already a significant reduction from the original target of $200 million it set last year.

The North Korea food-assistance program has drawn flak from critics who say the regime takes advantage of the agency’s largess, devoting its resources to developing its nuclear weapons program and constructing amusement parks while its people suffer. Critics also say the agency can’t be sure its assistance is reaching the intended recipients.

Nicholas Eberstadt, a political economist at the American Enterprise Institute in Washington who has studied North Korea’s food situation, said that the WFP’s work in the country was “a disappointment—perhaps a terrible disappointment,” arguing that the agency has put up little resistance even as Pyongyang restricts oversight from foreign aid groups.

“Outside humanitarian assistance will not work in North Korea unless it is ‘intrusive’—and the WFP has no stomach for such work,” Mr. Eberstadt said.

Mr. Stegen acknowledged past shortcomings in its ability to monitor the distribution of its aid, but blamed a lack of funding and cited recent improvements in its access inside the country. He said that the WFP can now get permission within 24 hours to visit any school or household that is receiving its aid. In the past, two weeks’ notice was required.

Mr. Stegen said that criticism of a government’s priorities isn’t unique to North Korea, and urged donors to prioritize vulnerable infants over politics.

“Intervention and assistance on a humanitarian basis should be separated from political things,” he said.

Earlier this month, South Korea’s government approved $7 million in new funding to the WFP, its first such contribution since 2007. While South Korea’s conservative government has talked tough on North Korea, it has also pursued a policy of “humanity” toward the North, particularly infants and young mothers.

The U.S., by far the largest donor to the WFP’s North Korea work, hasn’t contributed since 2009, when Pyongyang tightened its rules on monitoring food aid by restricting the number of Korean-speaking monitors allowed into the country, according to a U.S. Congressional Research Service report published in April.

The WFP’s fundraising efforts have also been hampered by rising awareness of North Korea’s human-rights violations. Earlier this year, a special U.N. commission published a landmark 400-page report which said the regime selectively starves its population based on factors like political loyalty, and recommended the U.N. Security Council refer Kim Jong Un and other senior officials to the International Criminal Court.

Ahead of the U.N. General Assembly, U.S. Secretary of State John Kerry on Wednesday called North Korea’s system of prison camps “unfathomable” and a sign of what he described as “barbarity, inhumanity—I think you can call it evil.”

Mr. Stegen said North Korea had markedly improved its capacity to produce food for its people since a devastating famine in the 1990s. He said that fewer people in the country remain hungry today, even as the population has increased.

But he cautioned that the country’s agricultural efforts have focused too much on producing rice and other grains, at the expense of protein. That has led to malnourishment of infants and children under the age of four, he said, putting them in danger of stunting, even as Kim Jong Un has made a public show of encouraging fisheries as a potential source of protein.

“For many of the children of North Korea, it’s already too late,” said John Aylieff, the WFP’s deputy regional director for Asia. “They’ve been dealt a life sentence of impaired mental functioning and impaired physical development.”

A drought earlier this year has also meant a throttling back of government rations to ordinary citizens, which fell to about 250 grams a day, Mr. Aylieff said. That is less than half the targeted rations, and the lowest in several years.

As a result, the aid agency is expecting a surge in acute malnutrition this year. “We hope potential donors will see the humanitarian imperative,” Mr. Aylieff said.

Marcus Noland, an economist and North Korea expert at the Peterson Institute for International Economics in Washington, said that given the WFP’s funding problems, its ability to monitor its work would be limited.

“Trying to maintain an underfunded program in that environment is practically inviting an aid diversion scandal,” he said. But the WFP’s absence from North Korea would also likely exacerbate any food crisis.

“The advantage of having the WFP in-country in even a limited capacity is that they are pre-positioned to monitor conditions and respond if there is an emergency,” Mr. Noland said.

Read the full story here:
U.N. North Korea Food Program in Danger
Wall Street Journal
Jonathan Cheng
2014-9-25

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