Tag Archive for 'Economy'

Declare your nukes now… OK, OK, we can wait.

Published
by
Jack
on January 13, 2008
in Diplomacy, Economy, News, North Korea, Nukes, ROK and United States
. 0 Comments

I have been really engaged on the Beyond Belief series, but I think this blog needs something Korea related today. It has been a pretty slow news cycle, and while the DPRK balks, all the rest can do is wait to see what happens. However, it does not mean the negotiations are not going on, and right now, it seems despite the hard-line placed on the agreed framework, it was absolutely no surprise North Korea would not deliver, and it was also not a surprise despite the hard talking from the other sides of the table, they are now willing to wait. How long are they willing to wait? The Korea Times seems to have more:

The plan calls for North Korea to disable its key nuclear facilities no later than March and disclose details of its nuclear programs, according to the sources.

Seoul wants to draw up a timetable for the full dismantlement of the North’s nuclear programs and initiate negotiations on building a peace mechanism on the peninsula in the first half of the year, they said.

“We expect the disablement of North Korea’s nuclear plants including the removal of nuclear fuel rods to be completed by March,” a ministry official told reporters, asking not to be named. ``Pyongyang should provide a full list of its nuclear programs by that time.”

(Emphasis mine) Timetables are great and wonderful, but from what I see, where are the consequences if the DPRK does not hold its end of the deal? A sulk? That’s what it looks like to me. The U.S. wants one sooner, but I am sure all sides agree sooner is better. Whatever the case may be, it is in North Korea’s court, and Kim Jong Il is holding the ball.

U.S. chief nuclear envoy Christopher Hill urged the North to declare the list before the inauguration of the Lee Myung-bak government Feb. 25.

“There is no reason why we cannot finish the job in 2008,” he told reporters in Seoul after a meeting with President-elect Lee.

Nope, there was also no reason why the North could not give the list at the end of December, but it was not delivered, right? It is understandable removing of fuel rods is dangerous and takes time, but it does not mean a piece of paper cannot be delivered in the meantime. Of course, the North claims the declaration was given in November, but somehow got lost en route. I wish I could do that with my bills without consequence. Furthermore, the North is slowing down the process until it gets more goodies on top of it.

This part of the article does not make much sense:

Seoul has been trying to initiate talks over establishing a peace regime on the peninsula, replacing the current armistice signed by the United States, China and North Korea at the end of the 1950-53 Korean War.

The war ended in a truce, not a peace treaty, leaving the two Koreas technically at war. South Korea wants to issue a joint declaration with parties to the truce for putting an end to the war, which it sees as a preliminary step to a permanent peace treaty.

However, the U.S. government is skeptical about a war-ending declaration before Pyongyang’s full denuclearization.

Seoul calls for a peace treaty in 2010. So does this imply the U.S. is willing to wait until 2010? I’ll ponder over this one for a while.

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What is the real story behind the supernotes (update)?

Published
by
Jack
on January 10, 2008
in Defectors, Economy, Humanitarian Topic, North Korea, Questions To Readers, ROK and United States
. 5 Comments

Update: One Free Korea has a much better commentary on this story and is well worth the read.
Supernote?

There have been questions and charges raised regarding the so-called supernotes that supposedly came out of North Korea. I do not know the validity of these charges because I am not a currency expert. However, there are two articles today that may raise doubts. Apparently, according to one article by AZCentral.com:

WASHINGTON - Two years ago, as he was ratcheting up a campaign to isolate and cripple North Korea’s dictatorship financially, President Bush accused the communist regime there of printing phony U.S. currency.

“When someone is counterfeiting our money, we want them to stop doing that. We are aggressively saying to the North Koreans just that - don’t counterfeit our money,” Bush said on Jan. 26, 2006.

If I recall correctly, I think one of the reasons for the frozen cash ($25 million) was because of the counterfeiting and money laundering. That is understandable. In return to start disabling the Yongbyon reactor, North Korea wanted that money back. So the United States released the money with some minor complications, but the DPRK did get it. As usual, North Korea keeps moving the goal posts, but will throw a fit if others do it real or imagined. Several posts have covered this already, so that is not news.

However, a 10-month McClatchy Newspapers investigation on three continents has found that the evidence to support Bush’s charges against North Korea is uncertain at best and that the claims of the North Korean defectors cited in news accounts are dubious and perhaps bogus. One key law-enforcement agency, the Swiss federal criminal police, has publicly questioned whether North Korea is even capable of producing “supernotes,” counterfeit $100 bills that are nearly perfect except for some practically invisible additions.

Huh? How is that so? I did read an article a while back regarding the question regarding the supernote producing capability (based on their own currency being very low quality), but in my mind, that does not prove a lot. I cannot find the link, but I will post it once I do find it. But to see more information on it, you can see this link (PDF). Personally, I do not doubt supernotes exist, and I also do not doubt North Korea produced counterfeit notes because they are well known for producing other things like pharmaceuticals, cigarettes and other things for quick cash. After all, any way to make money is a good thing for a collapsed economy. However, there is a story suggesting a defector may have been telling stories:

Many of the administration’s public allegations about North Korean counterfeiting trace to North Korea “experts” in South Korea who arranged interviews with North Korean defectors for U.S. and foreign newspapers.

The defectors’ accounts, for example, were cited prominently in a lengthy July 23, 2006, New York Times magazine story that charged North Korea with producing the sophisticated supernotes.

The McClatchy investigation, however, found reason to question those sources. One major source for several stories, a self-described chemist named Kim Dong-shik, has gone into hiding, and a former roommate, Moon Kook-han, said Kim is a liar out for cash who knew so little about American currency that he didn’t know whose image is printed on the $100 bill. (It’s Benjamin Franklin.)

The Secret Service, the Federal Reserve Board and the Treasury Department all declined repeated requests for interviews for this story.

(Link mine) Hm, that is interesting, but that does not mean the entire story regarding the supernotes may be bogus:

Although banks around the world are still seizing supernotes, the Bush administration is no longer publicly accusing North Korea of producing them and has dropped the subject from talks on halting North Korea’s nuclear-weapons program, according to State Department officials.

This story seems a bit slanted, but reading in between the noise, it seems there may be more questions than answers regarding the supernotes. So the question I have for you readers is, if a defector claiming to make these notes is lying (he obviously was if he does not know the person on the bill), what is the real story behind the notes?

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Matching the South with the North and other news

Published
by
Jack
on January 6, 2008
in Diplomacy, Economy, Humanitarian Topic, News, North Korea, Nukes, ROK, Speculation and United States
. 0 Comments

The game continues with the new president of the ROK to entice the reclusive leader of the socialist paradise to come clean and get some goodies. So far, Pyongyang remains defiant. If the North will accept the deal or not is one thing, but if this is talking billions to help shore up the already crumbled economy, maybe it is time for Kim to realize his regime survival depends on such outside help. The downside to all of this is, it means the leader has to make a full declaration which most likely will never come. Does this mean the outside will succumb to a partial list? It is hard to say how the North will play the cards, but it is very clear the North will drag its heels for as long as it can. So far, not much has been done. According to this story:

[...]

He said that as part of President-elect Lee’s plan to persuade the North to abandon its nuclear weapons, the next administration will establish an international cooperation fund of up to $40 billion.

(Emphasis mine) That is a lot of money for the impoverished North, and the plan is the following:

Spokesman Lee says the funds would be raised with the World Bank and the Asian Development Bank to support the impoverished North’s economic growth. He did not name specific projects, but experts say the fund would first be used to rebuild tattered North Korean infrastructure such as railroads, highways, and shipping facilities.

The question is, with all that money, will there be oversight to see where this money really goes? That is pretty doubtful because it is so difficult if not impossible to have an account of what the Dear Leader does with the money once he does get it. Also, the process of getting the North in line with the South will be a very expensive and long process. I really doubt this is an attempt to get the North in line with the South as much as it may be to keep the regime afloat for a little while longer. It has been that way for decades anyway. On the other hand, until such action has taken place and the North responds to the incentives, it is very difficult to know how it will play out. I am going to guess that amount of cash is going to be very difficult to resist considering the serious quagmire of the collapsed Juche economic plans. At this stage, it is damage control and has been that way for a pretty long time. Both sides have to be aware of this,especially Kim.

Continue reading ‘Matching the South with the North and other news’

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If you cannot get enough DPRK propaganda…

Published
by
Jack
on January 2, 2008
in Cult Of Personality, Economy, Kim Il Sung, Kim Jong Il, News, North Korea, Policy Elites, Politics, propaganda and wtf
. 0 Comments

Then I have to suggest you take a gander at http://dprk-economy.com. The web site is colorful and sort of tries to keep up with the times. Unfortunately, there are some bugs in it and I have no idea if they will be fixed (such as the header picture is broken in places), but no matter. The content is kind of interesting if you like propaganda:

1. In the bookshop, do not miss the “best sellers” Idle Pig and Japan’s War Crimes-Past and Present (Warning: this automatically downloads a PDF). Of course, one cannot pass one day without the latest mis-adventures of the Dear Leader in the state run periodicals Pyongyang Times and Korea Today. lastly, no DPRK bookstore is complete without the biographies of Kim Jong Il, Kim Il Sung and Kim Jong Suk. After all, they are the focus of everything.

2. Next, you need to take a look at the vibrant economy of the Stalinist Utopia. Nothing is broken down, things are getting produced, and they want your investment today! Make sure to take a close look at some of these products: Pyongyang Daesong Tyre Factory, Pyongyang Cosmetics Factory and the Pyongyang Essential Oil Research Centre (they have oil to research?).

3. Look, a more colorful version of the KCNA!

4. Lastly, open your wallets and buy some stuff today! I have no idea if Americans are allowed to buy things, but it sure looks like it. Why not buy a painting, a movie, bearings, or “daily necessities” such as these beautiful boxing gloves (people working the fields and near starvation need these?)!

There is only one question in all of this. Why was this site not launched on the .kp domain? I mean after all, it would make the DPRK really look like it is finally in the 21st century.

Oh wait, never mind.

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Food woes in the DPRK (Resources included)

Published
by
Jack
on December 17, 2007
in Defectors, Diplomacy, Economy, History, Humanitarian Topic, Interesting reading, Kim Il Sung, Kim Jong Il, North Korea, Policy Elites, Politics, ROK, Speculation, The region and United States
. 0 Comments

North Korea farmThis article got me thinking a lot, and the food shortages in North Korea seem to be getting worse and worse.

[...]

According to the survey results, which were announced Thursday, North Korea’s gross production of grains such as rice, corn and wheat, was about 4.01 million tons in 2007, down about 470,000 tons from the year before.

North Korea reportedly needs 6.5 million tons of grain to meet domestic demand, meaning it is facing a shortfall of about 2.49 million tons.

Especially devastating were torrential rains in August and a typhoon in September that hit the Korean Peninsula, which resulted in the flooding of about 11 percent of rice paddies in the country. As a result, rice production was 1.53 million tons, down by 360,000 tons from the previous year.

[...]

(Emphasis mine) North Korea’s food shortages are not new, and while I am not a farmer, I have read several places the land has been so overworked and the hills so stripped bare for fuel, the floods made the crops fare even worse. This article shows an eerie foretelling of the events of August 2007:

Photographs which depict a lush, rural environment are misleading. The country needs an average of 1m metric tonnes in food aid a year.

Yes, we have heard about the model farms before, but after the flooding, even some of the best crops were eradicated. Yes, in North Korea, image is everything, but it seems to me the facade is fading fast with the walls cracking and the real face showing behind it. The more that is shown, the bleaker it becomes. After a while, no amount of “spin” will make it better. In my mind, it is only a matter of time before everything is clear to everybody, and that will not be pretty for anybody.

“North Korea is not an agrarian country,” said Kathi Zellweger, a frequent visitor to the country with aid organisation Caritas. It is mostly rugged mountain terrain, and only about 18% is arable.

It is dependent on fertilizer and machinery to make that land productive, both of which are expensive.

Fertilizer and spare parts seem to be a very serious problem. With a growing population, the demand for more food rises (and you guessed it), the State cannot deliver when there is little to farm the land with. As the article goes on to suggest not only natural disasters takes its toll on food production, but decades of political central mismanagement of the Kims made things even worse (Among other things: see One Free Korea’s review of Marcus Noland and Stephen Haggard’s book on the famine - Markets, Aid and Reform as must read):

[...]

“If their farm produces five times as much, they don’t get five times as much food,” he said. Instead, they concentrate on their own private plots, which they use to feed themselves and to produce food for the markets.

The problem with this system is that market reforms, instituted in 2002, have sent prices soaring at a higher rate than wages. “Who can afford this stuff in the markets?” asked Mr French.

The answer: only the elite. Government officials, senior managers of state enterprises, security forces, and the leadership of the army are all unlikely to go hungry.

But a typical urban family can now only afford to buy 4kg of maize - the cheapest commodity - a month.

[...]

As Children of the Secret State suggested, the poor are only left with crumbs. The article only goes further to show a bleaker picture:

The urban diet is partly made up of a ration provided by the government, but this has dropped from 300-250g of cereals per person per day. North Korean officials have told the WFP they expect it to slump to 200g a day.

“The rural folk have already learned how to cope,” said Tim Peters, director of aid agency Helping Hands Korea. “But the urban people are so dependent on the government for distribution.”

As a result, foreign donations that have helped to prop North Korea up in previous years are doubly important this year.

To date, only 270,000 of the 500,000 tonnes of food needed for 2005 has arrived, the WFP says.

Then the prediction comes:

And there is always the risk of natural disaster.

Floods exacerbated the extreme food shortages 10 years ago, and North Korea’s ability to cope with them “is now probably worse”, said Mr French.

Ongoing land clearance has destroyed natural water breaks, “so it all just comes flooding down”.

…and that is precisely what happened with the major floods of August 2007. Then a little while later, a typhoon hits making the situation even worse. Not a lot has been said as to the result of the 2006 floods and how many people are perishing as a result of it, but the ROK did deliver tons and tons of food/medicine aid to the stricken North. If that helped, I am not sure of. However, one thing is clear. North Korea cannot continue to go on like this, and the people at some point are going to rebel especially if the food shortages hit the elite and/or KPA. It seems like it is happening already.

The DailyNK also paints the same shortfall with some reservations. What was the reservation?

[...]

A North Korean expert observed, “Due to the flood this year, the overall crop yield was reduced, but the products from North Korea’s paddy fields which are spread all over the place do not count in official statistics. When considering the food support from the outside world, the food shortage is not at a worrisome level.”

[...]

So this quote suggests the aid seems to be helping some, but I have to say this is still only a band-aid. I simply cannot see this level of suffering going on much longer without a lot of problems. However, I could be wrong, and have been wrong before. Also:

A majority of defectors insisted that the agricultural production level from North Korea’s individually cultivated lands (including paddy fields and fields attached to homes) will surpass the cooperative farms’ 30% standard.

So again, time will only tell, but along with the other news and rumors floating around including a lot of “firsts” for the reclusive regime tells me volumes. Something is changing in North Korea, and it may be bittersweet.

Also, see:

Country Studies

Food Security in North Korea: Designing Realistic Possibilities (PDF)

Famine and Reform in North Korea (PDF - Marcus Noland)

Hunger and Human Rights- The Politics of Famine in North Korea (PDF Haggard, Noland)

Edit: See One Free Korea

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Nukes, Mt. Paekdu and peace treaties (Update)

Published
by
Jack
on November 3, 2007
in Diplomacy, Economy, Kim Jong Il, Korean War, News, North Korea, ROK, The region and United States
. 0 Comments

Kind of interesting news today which includes opening sacred Mount Paekdu to visitors via direct flights:

The decision comes a month after only the second summit between leaders of the two Koreas, divided by a fortified border since the end of the 1950-53 Korean War.

The North’s state-run news agency KCNA said South Korea’s Hyundai Group had been granted the right to conduct package tours to Mt. Paektu from May 2008 using direct flights from Seoul.

Personally, I never, ever thought something like this would ever happen, and this caught me by surprise. On the other hand, a lot of changes are happening in North Korea, yet at the same time, nothing changes. The DPRK is such a strange oxymoron.

A top Hyundai official met North Korean leader Kim Jong-il in Pyongyang on Saturday, KCNA said.

At present, South Koreans can only visit the Chinese side of the 2,744 metre (9,000 feet) mountain, which Koreans consider sacred because they believe it is the place of their ancestral origin. The mountain is on the northern tip of the Korean peninsula.

…and of course the supposed birthplace of Kim Jong Il (Link and emphasis mine). This is just speculation on my part, but Kim looking elsewhere at different economic models (see Vietnam post), opening/planning special economic zones, and now opening places not previously opened to the outside world may be an inkling (and from my view obvious) of Kim’s need for more hard needed cash. Is this a foreshadow of more dire things to come? Is North Korea finally realizing the very serious problems it faces? That I cannot answer, but that trip to Vietnam and other globe-trotting has me wondering. As with everything in North Korea, I am not going to place any bets.

Continue reading ‘Nukes, Mt. Paekdu and peace treaties (Update)’

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The Vietnam trip: North Korea to change?

Published
by
Jack
on October 30, 2007
in Economy, News, North Korea and Other Regimes
. 1 Comment

There are some things that I simply cannot imagine, and one of those things is serious economic reform within the secluded state. While economic reforms changes have been taking place and is one of the key factors for the South’s plan for reunification, it has been slow going and full of red tape. Kim Jong Il loves red tape and having the upper hand. It’s his defining personality. I ran into an interesting article from the BBC regarding a trip to Vietnam.

Continue reading ‘The Vietnam trip: North Korea to change?’

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When Marcus Noland speaks, we should listen

Published
by
Jack
on October 23, 2007
in Communism, Economy, Humanitarian Topic, Kim Jong Il, North Korea, Nukes and ROK
. 0 Comments

When it comes to economics of North Korea and the region, the man to look to is Marcus Noland. An interesting story came down the pike today on the DailyNK.

“This week KREI released a report indicating that North Korea faces famine. The staff at KREI are serious researchers. They are not necessarily right, but they are serious…”

Taken from an on-line interview with Daily NK in October, the words of Marcus Noland, renown American economist and author of award winning book Avoiding the Apocalypse: the Future of the Two Koreas, remind us all that history may repeat itself if NGO, KREI, and WFP figures ring true. (I added the links)

If you have not read One Free Korea’s excellent report on Marcus Noland and Stephen Haggard’s book, Famine in North Korea, then it is a must read to get a general overview on it.

Continue reading ‘When Marcus Noland speaks, we should listen’

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Kim Jong Il’s bellyaches will not change (updated)

Published
by
Jack
on October 12, 2007
in Diplomacy, Economy, Humanitarian Topic, Kim Jong Il, Korean War, North Korea, Nukes, ROK and United States
. 0 Comments

Sorry for the lack of updates. First it was integrating forums, now it was the lack of funds to pay for the Internet connection. The fun never stops. I apologize for that, so I have to catch up with some of the developments. Looks like there is some despite the slow news days for North Korea because it is hot or cold. No in between.

Kim Jong Il is hurt. He is not happy Bush called his rule a “brutal regime”. The truth hurts, but sometimes, it has to be said. That was one of the things Roh refused to do at the summit, which is to tell it like it is. No, I am not a huge fan of Bush, but left wing or right wing, there should be unanimous agreement Kim Jong Il is a brutal dictator. Kim just needs to be told this more often.

North Korea charged U.S. George W. Bush with tarnishing its dignity and hurting talks aimed at ending it nuclear arms programme by describing the communist state as a brutal regime, its official media said on Friday.

Six party talks or not, nuclear disablement or not, peace treaty or not, Kim Jong Il as long as he remains at the helm will still be a brutal dictator. I do not see him releasing any prisoners from his gulags, giving back POW’s, kidnapped people, letting people worship the way they want, go from one place to another freely, listen to broadcasts, or have a say in how the government is run. Until those and many other things change, it is the truth.

According to a text posted on the White House Web site, Bush told the U.N. General Assembly in September: “In Belarus, North Korea, Syria, and Iran, brutal regimes deny their people the fundamental rights enshrined in the Universal Declaration”.

North Korea typically unleashes rhetorical attacks against those who criticise its human rights record, widely considered to be among the worst in the world.

Not a lot has changed in the last 60 or so years. The rhetoric keeps coming, so I do not know what news that is. I am sure he knows others have a basic idea of what is going on inside his walled la-la land. Jumping up and down screaming foul is not going to change the wide perception on his regime. I doubt this is going to keep the process from going forward at least for now, because there is gold at the end of this rainbow. As long as he appears to be a good boy, he can get his aid, energy assistance, economic cooperation and maybe even a delisting from the terror list. That should make his mouth water.

In the meantime, as long as the reactor making everybody nervous stops, he can continue his human rights abuses. That to me, is a tragedy.

Also, read this related article.

Update: I missed this KCNA link. Check it out.

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Joseph Dresnok syndrome?

Published
by
Jack
on October 10, 2007
in Defectors, Diplomacy, Humanitarian Topic, Kim Il Sung, Kim Jong Il, Korean War, North Korea, Policy Elites, ROK and Speculation
. 0 Comments

Joseph DresnokThere is the lingering and little talked about issue regarding kidnapped South Koreans according to the DailyNK. Apparently, these poor souls got tired of living in South Korea and wanted to defect to the socialist paradise that is the DPRK according to Kim Jong Il:

At the Inter-Korea Summit which was held in Pyongyang on the 3rd, Kim Jong Il insisted regarding the abducted South Korean, “They came to the North voluntarily and we received them through welcoming ceremonies.”

I guess human rights activists were wrong about Roh and he asked about some human rights issues. So it seems to me they should all calm down, “take a chill pill” and understand Roh is doing all he can to make North Korea play nice. In my opinion, if you believe that, I have some ocean front property in Kansas to sell.

Continue reading ‘Joseph Dresnok syndrome?’

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