Return to *North Korean Studies*

Pyongyang Watch (August ~ September 2002)

The Associated Press reported that donation shortfalls are forcing the UN to cut grain rations to nearly 3 million people in the DPRK, threatening years of work to end starvation in that country, a UN official said Monday. The halt will take effect over the next two months, with another 1.5 million people threatened with cutoffs early next year, said Rick Corsino, World Food Program country director for the DPRK. Such cutbacks "would cause suffering on a massive scale," Corsino said at a news conference in Beijing. He said about 100,000 metric tons (110,000 tons) of grain were urgently needed to cover the immediate shortfall. The WFP provides food assistance to about one-third of the DPRK's 23 million people.

Hundreds of thousands of DPRK citizens have died from hunger caused by the withdrawal of Soviet-era subsidies and failed harvests since the mid-1990s. The WFP provided almost 1 million metric tons of food to DPRK in 2001, but will probably provide only half that amount this year, Corsino said. While primary donors ROK and the US have provided about the same amounts as last year, Japan, which gave 500,000 metric tons (550,000 tons) in 2001, hasn't provided any so far this year. Corsino said that beginning in September, almost 1 million primary school children and 140,000 elderly people lost grain rations that had provided much of their daily food. Next on the list are 460,000 kindergarten children and 250,000 pregnant and nursing women. About 1 million more children of nursery-school age are to lose their rations in November.

Corsino said remaining aid will go to the most vulnerable, such as orphans and sick children. They too could face cuts once supplies are exhausted, he said. "We're very much concerned that the really important strides that have been made over the past five or six years - consistently feeding those groups of the population - will be diminished or even lost," Corsino said. Corsino said it wasn't clear how good the DPRK's fall harvest would be. While rainfall has been better than in past years, he said, pests and typhoons have also caused losses. The DPRK recent economic reforms freeing some prices and allowing more private food markets may encourage additional food production, he said. However, because those reforms were taken after crops were planted, they were too late to have any substantial effect this year. Japan suspended food aid after relations soured over the DPRK government's handling of conflicts between the sides, especially the kidnappings of Japanese citizens to train DPRK spies. (Christopher Bodeen, "DROP IN DONATIONS FORCES U.N. TO CUT GRAIN RATIONS TO 3 MILLION IN NORTH KOREA," Beijing, 09/30/02)
 

NORTH DENIES SOUTH KOREAN, JAPANESE REPORTS ENTRY TO SINUIJU

Joongnag Ilbo reported that DPRK rejected an application Monday by a group of ROK journalists for an entry visa to the newly designated Sinuiju special economic zone. The DPRK Consulate General in the northeast PRC city of Shenyang explained it rejected the visa application because "South Koreans are not foreigners." South Korean journalists applied for visas through the Europe-Asia Group owned by Yang Bin. Yang, the chief administrator of the free trade zone, declared last Friday that he and his staff control the consular affairs of the district. But the rejection of the journalists' application proved that to be untrue. Suspicions are growing that the group deliberately asked for ROK to apply for visas knowing they would be rejected in order to avoid any direct blame. A group of Japanese journalists that applied for visas the same day was also rejected. ("NORTH DENIES SOUTH KOREAN, JAPANESE REPORTS ENTRY TO SINUIJU," Seoul, 09/30/02)
 

Traders, relatives sit and wait for promised border opening

by Choi Hyung-kyu, Ko Soo-suk,

September 30, 2002. DANDONG, China -- There was a near-complete lack of any preparations or information Sunday to suggest that entry to the North Korean district of Sinuiju from here would be unrestricted beginning Monday. Chinese and South Korean authorities on this side of the border said they knew nothing about changes in border procedures. Chinese residents in Dandong are free to cross the Yalu River into Sinuiju, a Dandong official said, "but we haven't heard anything about simplified border processing or giving passes to foreigners."

Bae Jin-ho, a Korean who runs a trading company here, had planned to enter Sinuiju as soon as the border opened Monday. The Chinese customs and border patrol officers he had contacted also said no authorization had come from Beijing, Mr. Bae said. Chinese nationals with recognized business ties are granted passes to enter Sinuiju. An official at the Korean consulate in Shenyang, northwest of here, said there had been no notification from Beijing about any changes.

Yang Bin, the minister for Sinuiju, had told reporters in Shenyang on Friday that passage to Sinuiju from Dandong would require no entry visa beginning Monday. Sinuiju had been designated a near-autonomous special administrative district on Sept. 12. The Chinese-Dutch entrepreneur was chosen to head the administrative body in Sinuiju by Pyeongyang.

A North Korean official stationed here said he had no word from Pyeongyang, but a source familiar with the Sinuiju project and close to Mr. Yang insisted the change would be made on schedule. With the international spotlight on him, the source said, Mr. Yang would not have talked publicly about it without a go-ahead from both governments.

South Koreans and Japanese were already congregating in Dandong in expectation of the border opening, packing local hotels. They included merchants hoping to get an early look at Sinuiju; a few others are people with family members believed to be in the region. One man said he arrived from Busan after hearing reports of Mr. Yang's announcement and was hoping to see relatives in Sinuiju.

Separately, a government official in Seoul said Sunday that a North Korean mobilized infantry brigade stationed in Yeomju county, which includes the Sinuiju district, had been relocated further south in North Pyeongan province last year. The move suggested that the Sinuiju district idea had been evolving for some time, the official said.

N. Korea Zone Eases Visa Restrictions

[LatelineNews: 2002-9-28] BEIJING - North Korea's newly announced special economic zone will allow foreigners to enter without visas beginning next week, a spokesman for the China-based entrepreneur recruited to lead the project said Saturday. The move comes as North Korea's insular government, denounced by U.S. President Bush as part of an ``axis of evil,'' edges toward opening its economy and society. If true, it would be extraordinary given North Korea's years-long reluctance to allow foreigners access to its territory and people.

The vice president for press at Euro-Asia Agricultural Holdings Co., who gave only his surname, Bian, said details were still being worked out with the Pyongyang government but that he expected visa-free access to the Sinuiju Special Administrative Region to begin Tuesday. Bian could not say if there would be any restrictions on who could enter or how free their access and movement would be.

Euro-Asia is the flagship company of Yang Bin, the Chinese-born orchid exporter named by North Korea last week to oversee the special administrative region. China's communist government is North Korea's major remaining ally and occasional patron. Yang is widely expected to model Sinuiju, a small city that abuts northeastern China, after Hong Kong, now a special administrative region with different economic and political rules than the mainland - and a special charter that promises it autonomy for 50 years.

The Presidium of North Korea's legislative Supreme People's Assembly issued a decree Sept. 12 setting up the region, which would encompass 50 square miles near North Korea's northwestern coast. A city of 400,000 on the banks of the Yalu River, Sinuiju links North Korea to China by rail and bridge. It has chemical, metal and food factories and has often been cited as a potential candidate for a free-trade zone. Foreign investment in the North thus far has been restricted to a few industrial parks, including the 11-year-old Rajin-Sonbong free-trade zone in the country's isolated northeastern region, widely regarded as less than successful. Today only a few empty hotels remain.

Since July, North Korea has raised wages and loosened price controls in moves that outside observers have viewed as significant because they include elements of a market-based economy in one of the world's most tightly controlled countries. In a news conference in Pyongyang last week, Yang said the North Korean government was committed to keeping its hands off Sinuiju, which it said would use either Chinese yuan or U.S. dollars as currency. Yang said a wall would be built to separate the region from the rest of the country and that part of the work force would be imported from China.

Next week, the United States plans to send an envoy, Assistant Secretary of State James Kelly, to North Korea to resume long-stalled security talks - an apparent first step toward a possible thaw in relations between Washington and Pyongyang. AP
 

INTER-KOREAN FLIGHT FROM YANGYANG TO SEONDOK TAKE OFF ON MID-OCTOBER

Joongang Ilbo reported that the direct inter-Korean flight route established in July 2002 will officially start its operation in mid-October to transport people working on a light-water construction project in DPRK, officials in Seoul said Wednesday. A DPRK plane carrying over 60 construction workers and staff members will arrive at Yangyang Airport in Gangwon Province from Seondok Airport on October 15. The members expected to arrive will be those who have completed their given task in DPRK's construction site. The plane will carry new workers back to Seondok. The authority of the two sides is yet to agree on the time schedule for the take off and arrival plus the model of the plane to be launched. ("INTER-KOREAN FLIGHT FROM YANGYANG TO SEONDOK TAKE OFF ON MID-OCTOBER," Seoul, 09/25/02)

NORTH RECRUITS FROM ABROAD

Joongang Ilbo reported that the North Korean agency for economic diplomacy signed a deal with a Chinese-Dutch businessman Monday, giving his company the job of developing and managing its most ambitious economic project in more than a decade. DPRK's state-run Central News Agency reported Tuesday that the deal had been signed in Pyongyang by Yang Bin, who heads the Netherlands-based Euro-Asia Group, and the head of the Committee for the Promotion of Economic Cooperation, Kim Yong-sul. Reports originating from Pyongyang and Hong Kong also named Yang as having been confirmed to head the district's autonomous administration as the first minister.

The DPRK state news agency confirmed the appointment late Tuesday evening. Mr. Yang told the foreign press corps in Pyongyang that he was to be named first minister of the district. "The first justice minister will be a European," he was also reported to have said. "More than half of the 15-member preliminary legislature will be filled by foreigners." He told the US cable network CNN that the project would be strictly a capitalist operation, unlike the socialist system of DPRK. Its currency will be the US dollar. Korean, English and Chinese will be the official languages, he added. (Lee Young-jong, "NORTH RECRUITS FROM ABROAD," Seoul, 09/25/02)

Secretive N. Korea shows off monuments, as lights go out in Pyongang

By Anna Malpas, Vladivostok News, September 24, 2002

Our hotel in Pyongyang was situated on an island in the middle of the Taedong river, so that to get to the city you needed to walk along the island, and then across a long road bridge. This inaccessible location seemed no accident, and we were only given free time in the late evening.

The hotel had a casino run by Chinese from Macau, who also provide the serving staff - presumably so North Koreans don't corrupt their morals. However, in a move of ideological chutzpah, a display in the vestibule listed Japanese atrocities during the occupation. The hotel had a golf course which attracted Chinese tourists.

I decided to escape from the hotel one night when the guides were busy with other tourists. It was dark and raining, and due to the lack of street lighting, I felt pretty sure no one would spot me as a foreigner. I put on a black skirt, white top and sandals to look like a Korean, and put a scarf over my fair hair, which didn't look too odd since it was raining.

I crossed the long road bridge with treacherous holes in the pavement. People cycled past me and a few cars caught me in their headlights, but no one reacted. I went down a footbridge into an unlit street with uneven pavements, passed a large institutional building, and had a look at some apartment blocks, which had entranceways designed just for bicycles...
 

The Carrot and North Korea's Kim

By Brian Bremner
Daily Briefing: EYE ON JAPAN (Sat Sep 21,12:01 AM ET)

I've always felt a little uncomfortable about President's Bush inclusion of North Korea ( news - web sites) in his now fabled "axis of evil." That's not because I regard Pyongyang with anything less than contempt for what it has done to its own citizenry or for its massive proliferation of weapons technology around the world. And at the summit between Japan and North Korea on Sept. 17, this regime finally admitted to the kidnapping of a dozen or so Japanese citizens during the 1970s and 1980s.

When I look at pictures of Saddam Hussein ( news - web sites), I get the sense he's a ruthless strongman who wouldn't think twice about obliterating Israel, the Saudis, or an American city or two if he thought he could get away with it. By contrast North Korea's Kim Jong Il looks like a paunchy auto mechanic with a really bad haircut. Saddam's designs on his people and his neighbors have a certain kind of rationality. It boils down to self-preservation and raw power. The international community has every reason to worry about this guy.

When you look at Kim, you're far less sure. Since coming out of the shadows of Pyongyang two years ago during the now famous inter-Korean summit -- during which South Korean President Kim Dae Jung made a historic visit to the North -- Kim has feinted left and right, sending out mixed messages. He veers from being somewhat conciliatory to outright hostile...
 

SELF-RULE FOR NORTH ZONE

Joongang Ilbo reported that in an unprecedented transfer of authority away from the central government, the DPRK has given the new special economic zone of Sinuiju near-autonomy. DPRK's Central News Agency reported over the weekend that the Presidium of the Supreme People's Assembly had adopted legislation setting up legislative, judicial and administrative authorities for the northwestern border city. Pyongyang would retain diplomatic and defense functions covering the city, the report said.

The law was adopted on September 12, the same day that Sinuiju was designated as the first such special zone in DPRK since the Rajin-Seonbong on the east coast 10 years ago. It said that DPRK's cabinet, assembly and other central government agencies "will not interfere with the Sinuiju special administrative district project." Still, the district will be entitled to conduct external business under its own mandate and will have the power to issue passports. It will also be represented to the world by its own flag. Referring specifically to "investor climate" and "support for economic activities," the agency reported that equality of those who engage in activities in the district will be guaranteed "regardless of their wealth, degree of knowledge and religion." The rights and obligations that belong to residents of the district will be extended to "foreigners," it said. Only DPRK labor will be used in the area, however. (Lee Young-jong, "SELF-RULE FOR NORTH ZONE," Seoul, 09/23/02)

NORTH KOREA APPOINTS CHINESE TO LEAD ITS FIRST MAJOR FORAY INTO CAPITALISM

The Associated Press reported that the DPRK on Monday introduced the PRC-born entrepreneur who will head its first major experiment in capitalism - a walled-off region designed to stimulate foreign investment in the insular communist nation. Yang Bin, an orchid exporter and property developer, said the "Sinuiju Special Administrative Region" would demonstrate the DPRK's willingness to foster global trade. "The special zone is totally capitalist. It is separated from the socialism," said Yang, speaking at a news conference held in the capital.

Waxing enthusiastic about Northeast Asia's economic potential, he said his appointment as chief executive of the experimental zone by DPRK leaders "shows their willingness to be involved in the international community and international politics." The Presidium of North Korea's legislative Supreme People's Assembly issued a decree September 12 setting up the region. The capitalist corner of the DPRK would encompass 132 square kilometres (50 square miles) near the country's north-western coast, an hour's train ride from Pyongyang. Sinuiju, a city of 400,000 on the banks of the Yalu River, links the DPRK and the PRC by rail and bridge. It has chemical, metal and food factories, and has often been cited as a potential candidate for a free-trade zone as the DPRK experiments with elements of a market economy. The government intends to remove the zone's current residents and replace them with DPRK citizens from elsewhere, Yang said. He didn't give a reason or details, but said it would take place over the next few years. ("NORTH KOREA APPOINTS CHINESE TO LEAD ITS FIRST MAJOR FORAY INTO CAPITALISM," Pyongyang, 09/23/02)

Kim Jong Il Orders Chosensoren Changes

by Kwon Dae-yeol ([email protected]) 2 September 2002

The Sankei Shinbun reported Monday that North Korean National Defense Commission Chairman Kim Jong Il abolished "Study Groups," operational organizations in the pro-Pyongyang federation of Korean residents in Japan, or Chosensoren and ordered that his and the deceased Kim Il Sung’s portraits be removed.

Chairman Kim ordered Huh Jong-man, vice-president of the federation, to abolish the study group when Huh visited North Korea last August 9-17 said the newspaper. It added that Chosensoren was planning to disperse the groups' members around the country within two weeks. According to internal data, a Study Group was a "revolutionary organization of Kim Il-sung principles that serve the country." At one time, there were 5,000 members and most officers of Chosensoren are from these organizations.

The newspaper also said that Chairman Kim said Chosensoren must change to an organization with closer ties to Koreans living in Japan, and ordered the portraits, which had strong political characteristics, be taken down. The newspaper analyzed this as a part of an "environmental improvement" before the North Korea- Japan summit talks coming up on September 17.

About "capitalist experiments" in the Democratic People's Republic of Korea

 by Alejandro Cao de Benos de Les y Perez

President of the Korean Friendship Association (KFA)

Special Delegate of the Committee for Cultural Relations with Foreign Countries -Government of the DPRK

DPRK Consultant to the House of Asia – Ministry Foreign Affairs, Spain

IT Consultant for Business Schools  - 22 August 2002

Since the creation of the Democratic People’s Republic of Korea, the USA, through its intelligence agency and South Korean sponsored organizations, are trying to isolate and destroy the public image of the country by preparing an orchestrated campaign against it. These groups are continuously fabricating false facts by distorting the reality with the aim of creating confusion among the people. Below are some examples that show how far the imperialist media will go to manipulate the minds and influence the public that have no knowledge about the real situation in North Korea.

Institute of Peace -USA, October 1996:

“The food and energy crises have raised critical questions about the need for contingency planning to prepare for any sudden changes that might occur in North Korea in the absence of reforms. Likewise, advance preparations are critical for refugee flows that might result from further economic decline and/or widespread famine in North Korea”

Major David S. Maxwell  -United States Special Forces, 1996:

“It is possible that North Korea is near collapse. Recent statements by key officials show that US and ROK national leadership are becoming increasingly concerned with this possibility, although the focus remains on the possibility that such disintegration may lead to a desperation attack. In a recent article in Jane's Defense Weekly, the Director of the Defense Intelligence Agency, Lieutenant General Kenneth Minihan said, "North Korea is collapsing economically. North Korea is implosion and explosion going on at the same time"

After six years, the ‘sudden changes’ failed to materialize - even though many really believed in the danger of ‘North Korea’. The articles use the fear to give some consistency to the tale. This is the same fear that President Bush Jr. is using as an argument to create the National Missile Defense and deploy it in South Korea. The same excuse is used to keep more than 37.000 US soldiers and 1,000 nuclear weapons near the DMZ.

Channel News Asia -June 2002:

Japan has started work to salvage a suspected North Korean spy ship from the bottom of the East China Sea, with the permission of Beijing….

Japan claims it needs to raise the ship to find out what country it came from.

In this kind of news, we can clearly see the manipulation of the information. So Japan doesn’t know at all the identity of the ship, but since the beginning, it was accusing North Korea to the international community. Although two months passed since this report, there’re no comments or news talking about the ship or showing any evidence that links it to North Korea. ‘Throw the stone while hiding the hand’ is a typical gesture of the capitalist media that no serious investigator should accept.

The Guardian, UK, -May 2001:

Kim Jong-nam (son of Chairman Kim Jong Il), his wife, son and another relative were deported to Beijing three days after immigration officials at Tokyo's Narita airport detained them for attempting to enter Japan on false passports.

 The only 'proof' of this case was a picture of ‘Kim Jong Nam’at the airport. The picture doesn’t match at all with the real son of Chairman Kim Jong Il.

The news was published in all the media worldwide and was never questioned its veracity. In this case, the big lie is easy.  98% of the readers believed it because they don’t know what the son of the Dear Leader looks like. But I know, and he wasn’t the one in the picture.

Is North Korea changing to capitalism?

The answer is No.

Stories like this are repeated in the history. Take a look at the newspapers of some years ago. Since the changes to capitalism started in some socialist countries (we’re talking about 20 years back), the media argued that North Korea won’t last more than a few months and that a flooding of refugees and even civil war were imminent. Now in the year 2002 and after the difficult time of the ‘arduous march’,  the country is recovering fast and becoming stronger than ever, demonstrating that the citizens fully support the Leader Kim Jong Il and the Worker’s Party of Korea.

Where are now all the articles from ‘prestigious academicians or self-claimed specialists?’ Now, they try to be more cautious and they have started saying… ‘well could be that it will take some years to North Korea to adopt the free market system’ and other rubbish like ‘Chairman Kim Jong Il visited Shanghai to apply Chinese reforms in his country…. Chairman Kim Jong Il visits Far East Russia to study the transition to capitalism’.

For some people, it’s really easy to be an armchair North Korean expert in the Ivory towers, while drinking coffee and  guessing the future of a country. But curiously most of those North Korea "experts  haven’t been to Pyongyang, or at best, they took a one-week guided visit of North Korea decades ago.

The government of North Korea isn’t going to change its socialist system based in the Juche Idea, created by Great Leader President Kim Il Sung and now carried forward under the direction of Dear Leader Kim Jong Il. The recent reforms in the economy were made inside the own socialist economy for the only purpose of increasing production. The Free Market System (Capitalism) isn’t going to invade the country, and North Korea won’t follow ‘the transition of other socialist countries’ like some newspapers claim.

‘They’ll have to kill each one of us if the capitalists pretend that the free market system will enter in the socialist land of the DPRK, we’ll sacrifice every drop of our blood and we’ll never surrender even under the most difficult conditions’, this is the phrase that I hear in the universities, the government and the villages. The convictions and strength of the citizens of the DPRK is clear, and any news referring to a capitalist change is just a rubbish.

Absolutely all the welfare systems (kindergarten, schools, universities, libraries,  hospitals and medical treatments, culture centers, free housing, holidays, etc.) will continue to be covered by the government, assuring the dignity and quality of life of all the citizens in North Korea under the care of the Worker’s Party of Korea. Any foreigner visiting North Korea can attest to this truth.

N Korea prepares some babes for Koizumi's visit

According to an ex-North Korean intelligence agent, who we'll call Aoyama, beautiful North Korean women are usually put at the beck and call of visiting foreign VIPs. So who's going to be on hand when Prime Minister Junichiro Koizumi visits Pyongyang next Tuesday for his one-day summit with Kim Jong Il. Generally, women receptionists are assigned to each member of a visiting delegation. The receptionists take care of guests assigned by their bosses, do miscellaneous things such as changing ashtrays and create a relaxed atmosphere while waiting near the guests.

Aoyama says the receptionists are told to take care of their guests' needs from morning to midnight. Indeed, one Japanese politician, who has visited North Korea in the past, said that the services of these women left nothing to be desired. According to Aoyama, the North Korean intelligence department thoroughly investigates the background, food preferences and interests of Japanese politicians and bureaucrats. This information is then provided to the women receptionists.

In preparation for Koizumi's visit, a study group of the Ministry of Foreign Affairs has already gone to Pyongyang and set up a liaison office there. Most likely, each member of that group was given a North Korean receptionist. Of course, the rank of receptionists rises depending on the importance of the visitor. The women all come from a well-known group called Yorokobi-gumi (group of joy). Yorokobi-gumi was started in the mid-1970s for the benefit of Kim who was then chief secretary. It was divided into three groups — one to sing and dance to entertain guests at banquets; one to give guests massages; and one to provide sexual services.

The selection of women is done by the personnel section of North Korea's labor party which dispatches officers all over the country looking for beautiful women. After taking a thorough physical examination, selected women receive a summons to the central committee. Then the final 50 are brought to Pyongyang as members of Yorokobi-gumi. Said an ex-dancer, who took asylum in South Korea, "The dancers all had to have pretty much the same appearance — small and round-faced. That's how Kim Jong Il prefers them."

After being taught necessary manners, massage techniques, singing and dancing, the women gain titles such as escort bureau second lieutenant and are assigned to guest houses that Kim visits to carry out their "duties." Usually, these women are called up at age 18 and "retired" from the group at 25. Aoyama estimates that at any given time there are about 350 women in Yorokobi-gumi.

Many of the aforementioned receptionists are graduates of Yorokobi-gumi. Since the state spends so much money and time to turn them into charming women, they are the best suited to receive VIP guests. Considering the importance of Koizumi's visit, we can expect the most stunning women to be on duty next Tuesday. (September 13, 2002 Volume 34 Number 37)
 

"A Breakthrough: Reform-minded Kim and Koizumi Open a New Chapter in DPRK-Japan Relations."
 

by Dr. Alexandre Y. Mansourov

The news of the day is an upcoming trip by the Japanese Prime Minister Koizumi to North Korea on September 17, 2002.  If it succeeds, this visit may open the door for the full normalization of diplomatic relations between the DPRK and Japan by the end of 2002.  By inviting Koizumi to Pyongyang and normalizing state-to-state relations with Japan, Kim Jong Il is apparently intent to kill two birds with one stone: namely, to stall George W. Bush's anti-DPRK diplomatic offensive and use Tokyo as a gateway to Washington, as well as to obtain Japanese financing for deepening economic reforms in the north.

As for the Japanese calculations, Koizumi is said to have agreed to go to Pyongyang because of his strong expectation of success and serious results, which could positively affect his domestic popularity (his job approval rating went up by ten points after the initial announcement of the visit). Furthermore, Tokyo is concerned about the rapidly deteriorating U.S-NK relations and does not want to see the second Afghanistan, in its own neighborhood.  Moreover, Tokyo believes that normalization must be done prior to the ROK President Kim Dae-jung's departure from office, because DJ is very supportive of the improvement in the Japanese-DPRK relations, whereas Tokyo is not certain about the next ROK President's attitude in
this regard.  Finally, as the North-South relations quickly improve, Japan does not want to be left out the process of the inter-Korean reconciliation, and, further, it wants to preserve its seat at the table, by being part of an international effort to shape the North Korean domestic reforms from inside.

What do we expect to see happen at the Kim-Koizumi summit?  Kim is sure to roll out a red carpet for the Japanese Prime Minister, with millions of cheering and flower-wavering Pyongyangites lining up the roads along the way of his motorcade.  Koizumi is likely to formally apologize for the crimes committed and sufferings inflicted upon Korea by Japan during its colonial rule (expect the same language as PM Murayama used in his apology a few years ago).  In a Joint Declaration, Kim Jong Il is likely to present Koizumi with a "gift," namely his agreement to extend a moratorium on missile tests, so worrisome for the Japanese, for a few more years.  On the abductions issue, Kim is likely to plead ignorance and promise to "find and punish those responsible." On the spy boat issue, Kim is likely to call it a misunderstanding and to vow to stop similar incidents in the future, since they cause so much anxiety to the Japanese people.  As for the strategic issues of WMD proliferation and regional stability, these are likely to be left intact for the U.S.-DPRK talks in the future.  I do not expect Koizumi to bring home anyone of the eleven alleged abductees along with him.  But, he is likely to get Kim's promise to resolve all these issues in the short run at the bilateral inter-agency level.

The big question, of course, will be the Japanese monetary compensation to NK for its colonial rule.  I believe Koizumi will agree in principle to settle this account, without committing himself to any concrete figure, which will be negotiated later on during bilateral financial talks.  Both sides are likely to end up with a present day equivalent of 0.5 billion U.S. dollars, discounted by the factor of two (difference in population size between the north and the south), plus almost 40-year interest accrued, which would make this compensation comparable to the amount paid by Japan to the ROK at normalization in 1965.  The Japanese government is likely to provide this money to Pyongyang in the form of grants, structural adjustment loans, infrastructure rehabilitation loans, in-kind and tied loans, private loan guarantees, all linked to the North Korean domestic economic restructuring efforts.

I would expect the two sides to agree on some kind of a roadmap, i.e., a series of bilateral steps that would lead them to the establishment of formal diplomatic and consular relations in the next few months, including a possible exchange of visits by Foreign Ministers later in the fall of 2002 and Koizumi's invitation for Kim Jong Il to visit Japan in early 2003. The bottom line is that although the risks appear to be great for North Korea and Japan, too much is at stake for both Kim Jong Il and Koizumi personally, so that they cannot afford a failure.  In some sense, they are doomed to success.

Of course, a prompt successful normalization of relations between North Korea and the U.S. key strategic ally in the APR, Japan, will put the United States in a jam.  Washington will be left alone in the entire Northeast Asia with adamant pursuit of its hard-line "axis of evil" kind of policy toward North Korea.  And, although some conservative voices in Asia give credit to the Bush administration's hard-line rhetoric, by suggesting that "the more Washington pushes, the more Pyongyang bends in the current international climate of global war against terror," it is obvious that they themselves clearly prefer more conciliatory and constructive approaches for their own sake.  It is hard to avoid the impression that Tokyo is exploiting the U.S. hard-line policy towards the North in order to obtain more concessions from Pyongyang for itself, even at the expense of the broader strategic interests of the United States.  In general, the United States is widely advised to adopt a more conciliatory and pragmatic stance toward the DPRK.  Many wonder, "How many times can you reinvent the wheel?" They advise the United States to re-package the Perry process under some Bush labels and start selling it again as a brand new wine, in order to make it acceptable both in Washington and Pyongyang.

As for the "significant others," relations between North Korea and Russia are "on the upswing," with President Putin personally encouraging Kim Jong Il to continue his "Gorbachev-style reforms," and North Korean-Chinese relations are back to normal, despite Kim Jong Il's personal resentment at the way the Chinese leadership "mishandled" in the North Korean defectors' issue.  The most important point about these two sets of relationships is that both Russia and China support any economic policy changes in North Korea (big or small), whatever Pyongyang does, because any change is better than the existing status-quo in their estimates.  Regarding the strategic balance of power and threats in the region, some Chinese officials draw the
attention of the United States to the fact that the PRC and DPRK are still bound by mutual defense obligations in accordance with the 1961 Mutual Defense Alliance Treaty between Beijing and Pyongyang.  They state bluntly that those hawks in Washington who talk about pre-emptive strikes against targets in North Korea, following Iraq's expected defeat, must learn history first and read the mutual defense provisions of the above-mentioned treaty, which is still in full force.  In other words, if the United States attacks North Korea, it'd better be prepared to fight China, too: the 1950 deja-vu!  In some quarters, the Cold War mentality is still live and well! (NORTHEAST ASIA PEACE AND SECURITY NETWORK * SPECIAL REPORT * September 16, 2002)
 

N.KOREA SEEKS FOREIGN INVESTMENT BY RAISING CEILING

Reuters reported that the DPRK has adopted a new policy allowing foreign investors to take more than a 50 percent stake in joint ventures in order to boost investment, an ROK trade promotion official said on Thursday. The new rule follows a DPRK move in June to adopt some market-oriented economic policies. "In the case of joint ventures, foreign companies could take only up to 50 percent of stake in the past, but now there is no problem if their stake goes above the level," the Korea Trade-Investment Promotion Agency (KOTRA) said, quoting DPRK's vice trade minister Kim Yong-sul. Kim Yong-sul explained the economic changes in the DPRK at a seminar recently held in Tokyo where about 50 Japanese businessmen interested in doing business with the DPRK attended, KOTRA said in a statement. "The measure is an effort by Pyongyang to expand trade and business with other countries," Kim Sang-shik, a KOTRA official in charge of trade with the DPRK stated. "It's a sign that North Korea is trying to improve conditions to attract more foreign investments." He said the DPRK had drawn just US $120 million of foreign investment into a special trade zone as of the end of 2000. Latest figures are not available. (Song Jung-a, "N.KOREA SEEKS FOREIGN INVESTMENT BY RAISING CEILING," Seoul, 09/05/02)

MONEY IS FLOWING INTO NORTH KOREAN POCKETS, IN REFORM

Joongang Ilbo reported that Daeseong Department Store is one of three shops in Pyongyang that accept foreign currency. The two story building was crowed with foreign customers and a few privileged DPRK citizens on Friday afternoon despite sultry heat on the street. The sales clerks were talking to customers in Japanese or Chinese and trying to sell as many goods as possible. Tourists from PRC and ROK were regretting that some items, including oriental medicine pills said to cure chest problems, were sold out. Signs of change were everywhere in Pyongyang during a reporter's five-day visit last week. DPRK leader Kim Jong-il's new open-door policy is seen as a decision to attract foreign investment. The first step to that end is opening a special economic zone. Pyongyang began reviewing the option in the late 1990s; Sinuiju, Wonsan and Cheongjin were the candidates. The project for the special economic zone gained impetus when Pyongyang decided to carry out economic reform in July.  (Jung Chang-hyun, "MONEY IS FLOWING INTO NORTH KOREAN POCKETS, IN REFORM," Pyongyang, 09/04/02)

Во-первых, уровень средней заработной платы жителей Пхеньяна очень низок. Помимо стоимости услуг сотовой связи есть еще одна серьезная для здешних властей проблема. По мнению аналитика Пола Бадди, мешает отсутствие средств эффективно вести мониторинг сети: «Самое серьезное препятствие на пути быстрого развертывания этой системы связано с тем, что устройства, выполняющие мониторинг переговоров по сотовым телефонам, пока недостаточно надежны, а правительство считает, что нельзя открыть систему мобильной связи, не имея возможности ее контролировать». (Источник: Computerworld, #32/2002 , 03.09.2002, Мартин Уильямс in Russian)

Collect Call for Kim

by Hideko Takayama

North Korean leader Kim Jong Il may be willing to talk shop with Russian President Vladimir Putin as he did last week, but for the rest of the world, it is extremely difficult to get even the smallest glimpse into North Korean life. So difficult, in fact, that the hottest item among Japan's North Korea-watchers these days is one weathered copy of the North Korean telephone directory circa 1995. According to popular Japanese weekly
Shukan Bunshun, the directory was smuggled out and recently surfaced in the hands of a small group of local North Korea experts.

The 300-page directory lists the telephone numbers of some 50,000 North Korean organizations and government corporations. Experts believe they have found a looking glass into North Korea's opaque systems: the book has written notes in it next to certain new numbers where changes had been made, which imply that it was used until recently, and two numbers listed under government departments with uclear titles.

Analysts have also found a network of telephone numbers listed under tongbo (meaning 'reporting' for snitches. Analysts are equally intrigued by what they have found regarding  life-style details: the only hospitals listed for emergency treatment are in Pyongyang, and restaurants and public bathhouses are listed (each with a number for a party secretary and the establishment's manager). While these details may seem unimportant, analysts are clearly excited the directory is being bootlegged at W25,000, about $210 per copy, within an elite circle. But is it really worth it? After all, there's no number for the reclusive Kim Jong Il himself.
 

Pyongyang on the Line

A phone book smuggled out of North Korea offers revealing clues about the country's secret workings
 

BY VELISARIOS KATTOULAS / TOKYO  (TIME Asia)
 

Late one night this summer, an anonymous North Korean slipped across the Tumen River into China. He risked death if collared—but so do all of the desperate souls trying to escape the world's last Stalinist hellhole. What distinguished this man from his compatriots—dozens get across the border every month—was an incredibly rare item that he had stashed in his luggage: a phone book available only to high-ranking North Korean officials.

The identity of the escapee has not been disclosed; it's also unclear how the smuggled phone book ended up in Japan. But one thing is certain about the 373-page, dog-eared volume with 50,000 names and numbers, a copy of which was obtained by TIME: since its arrival in Japan some five weeks ago, it has been treated by North Korea watchers as a combination of the Rosetta Stone and Enigma, the machine used by the Nazis to encode messages during World War II. "It's amazing that a phone book should offer important insights into the nature of any government on the face of the earth today," says Nicholas Eberstadt, a North Korea expert at the American Enterprise Institute in Washington D.C. "But that tells you how successfully the North Korean leadership has suppressed information that might allow outsiders to draw an independent assessment of it." Kim Choong Nam, a North Korea specialist at the East-West Center, a think tank in Hawaii, agrees: "This phone book gives us the best picture yet of how North Korea works."

Can a mere phone directory really shed light on the most shadowy corner of the so-called Axis of Evil? There is a precedent: four years ago, a North Korean dissident based in China sneaked home to shoot film of a farmers' market, and the tape wound up in Japan. At first, it got little attention. But after intelligence agencies finished studying it they reached a startling conclusion: Pyongyang had lost faith in central planning and was cautiously embracing capitalism. Indeed, this summer, Pyongyang finally announced a raft of market-based economic reforms.

The purloined phone book was apparently printed in 1995. And yet a Japanese academic who has scrutinized it over the past month contends that it is of even greater significance than the video. The very fact that it was smuggled out suggests dissent at the pinnacle of North Korean society, says the academic, who declined to be identified for fear of retribution from North Korean agents: "The phone book can only have come from somebody within the establishment—and someone opposed to it."

Early analysis suggests there is plenty of raw intelligence to be found in the book. For one thing, it provides an intriguing glimpse into some of North Korean leader Kim Jong Il's methods of controlling his people. His government runs informant hotlines that remain open day and night in case snitches want to rat out their neighbors or colleagues. According to the academic's analysis, the hotline can be reached by dialling local area codes and then 82. The book also suggests that the ruling party has a previously unknown outlet for its relentless propaganda: cable television. Most important, the book provides a comprehensive listing of government ministries, intelligence bureaus, and some military offices—precisely the kind of information outside intelligence agencies have long been denied. There are 18 pages in the Pyongyang section devoted to government offices—a sign that power is highly centralized in North Korea and that the nation's bloated bureaucracy is alive and well, even if its economy is dying. (Restaurants fill only one page.)

One of the first things the Japanese academics examining the phone book did was to start dialling numbers to North Korea's Elite haunts. In most cases, they found the numbers couldn't be dialled from overseas. But even when they got through, hard-nosed operators quickly brush-ed them off every time.

North Korea watchers say it could take months to finish wringing the phone book for information. But already they hope for another refugee to flee with a more recent edition. "If we have ones from different years," says Kim at Hawaii's East-West Center, "we can see whether North Korea is changing." One thing they have not found is Kim Jong Il's direct line. He is unlisted.
 

North Korea's quest for 'normalization'

The word "normal" has a different meaning to North Korea than it does for everyone else. It means reneging on scheduled diplomatic meetings and perpetuating an inconsistent, insubstantial "normalization" schedule. It's a long process and more meetings have been arranged, but the results are yet to be seen. - Aidan Foster-Carter  (Aug 27, '02)
 

NORTH KOREA REFORM WILL WIDEN RICH-POOR DIVIDE: OBSERVERS

Agence France-Presse reported that the DPRK devalued its currency in early August, slashing the value of the won to 150 against the dollar from a theoretical rate of 2.15, according to North Korean government officials. The devaluation, together with the partial abolition of rationing, is seen by foreign diplomats and analysts as part of landmark, market-based reforms aimed at breathing life into the state-planned economy. Wages, fixed for decades, surged more than 20-fold this month in line with the reform, but prices at shops also shot up in proportion. At the capital's Ok Nyu Guan restaurant, the price of a bowl of what is reputed to be the nation's best cold "reng myong" noodles rose to between 150 and 230 won from 15 won last month. The wide range of food, clothes and electronics at the well-stocked Dae Song Department Store in suburban Pyongyang were all newly tagged with the marked-up prices, but the dimly lit, steamy store was quiet, even at the weekend. 

Experts on the Korean peninsula warned that DPRK leader Kim Jong-Il seemed to be embarking on a high-risk strategy to salvage the troubled economy. "It is good for North Korea to introduce the market-oriented system, which sets prices according to supply and demand, not the government," said a South Korean source who has visited the north a number of times. "But the system has a dangerous aspect -- inflation," said the source, who asked not to be identified. "Also, those who are already rich can take advantage of the system, which allows them to sell things when prices are high and buy back when prices are low," the source said. "In other words, the rich will be richer, and the poor will be poorer, this is our major concern." ("NORTH KOREA REFORM WILL WIDEN RICH-POOR DIVIDE: OBSERVERS," 08/29/02)
 

N Koreans in China to study banking system

By James Kynge (Financial Times) in Beijing

North Korea has dispatched a delegation of central bank officials to study China's financial system and commercial banking in one of the first signs that Pyongyang may be considering financial reform. The delegation, which comprises eight people from the upper echelons of the North Korean central bank, arrived in Beijing this month and was scheduled to spend three months in seminars and on-the-job training at each of China's "big four" state banks, Chinese banking officials said. The study tour was supposed to be confidential, in keeping with Pyongyang's preoccupation with secrecy and its aversion to foreign advice, the officials said. A spokesman for the People's Bank of China (PBOC), the central bank, said he had not heard of the delegation. The PBOC is the delegation's host organisation. "They are keen to learn," said an executive at one of the big four. "But it feels a bit strange for us as we are students of financial reform too. The student has become the teacher."

Questions asked by the North Koreans had touched on rudimentary notions of commercial banking, including how many customers a bank branch would need to justify its existence, one Chinese banker said. The big four state banks are Bank of China, Industrial and Commercial Bank of China, China Construction Bank and Agricultural Bank of China. Little is known about North Korea's banking system but the Chinese bankers said it seemed clear from the questions asked that the country had not yet taken its first steps to set up a commercial banking system. Nevertheless, the duration of the stay in China and the thorough nature of the study programme requested by Pyongyang suggested that financial reforms are under serious consideration in the world's last Stalinist state.

The visit comes after North Korea, goaded by grinding poverty, took its first clear step toward economic reform last month, scrapping its state rationing system for a more market-based way of distributing goods. It abolished the state-issued coupons that people used to buy goods, diplomats in Pyongyang have said. Farmers and enterprises, previously funded by the state, must now collect revenues from customers in cash. Workers' salaries have been increased to give them purchasing power and to encourage productivity. There are signs in Beijing of increased trade. The streets around the North Korean embassy throng with shops displaying signs in Korean script, doing a substantial trade with Korean nationals who take home products such as fridges, televisions and garments for sale on Pyongyang's black market. On the streets of Pyongyang too signs of private ownership are starting to spring up. Residents have learned to tell a privately owned car by the colour of its number plate. (FT.Com  August 27 2002 21:57)
 

N.Koreans Say Reforms Are Perfection of Communism

By George Nishiyama, Reuters

PYONGYANG (Reuters) - Salaries have soared, prices skyrocketed and the currency been slashed in value. North Koreans say this isn't reform, this the perfection of communism. But Pyongyang's unprecedented move to boost wages, hike the price of rice and other staples and charge rent seems to sit uneasily with its commitment to the Marxist principles of "from each according to his ability, to each according to his need." Residents of the capital of this reclusive state whose economy has for years been guided by Stalinist-style central planning repeat the official mantra that this is a step on the road of communism.

Menus tell a different story. At a pub in the center of the capital, stickers with the new post-reform prices were pasted onto the menu, hiding the old figures. "The recent changes are aimed at giving incentives for producers to produce more," said one official. Under the new measures, salaries will be paid depending on the productivity of each worker, introducing competition, a concept at odds with communism. "Having competition among the workers leads to increased productivity. Is that a bad thing?" said the official, who declined to be identified.

Rice prices in the communist North jumped by 50 times in July and ration coupons used for decades were abruptly scrapped in unannounced changes that narrowed the gap between official prices and those on the black market. In one Pyongyang store catering mainly to the better-off resident, powdered milk, imported from Japan, was being sold at $17.2 per packet, about the same price as in Japan where it costs $12.66 to $16.88. One woman in her 40s paid for her shopping with U.S. dollars. How she obtained them was not a question she would answer. Salaries are reported to have been increased dramatically to cope with the drastic price increases. One Pyongyang resident said his salary had shot up 14 times.

PERFECTING COMMUNISM

North Korea's 22 million people have been in the grip of famine since the mid-1990s and the country relies on food and aid from abroad. Its economy, which once prospered through close ties with China and the former Soviet Union, has withered for a decade. Under the secretive leadership of Kim Jong-il, last month's price changes were not announced, though aid and diplomatic sources confirmed they had taken place. Officials stressed that the changes were not part of a gradual shift to a market economy, adding that the moves were within the framework of a centralized planned economy.

One said prices of goods would not be set by supply and demand as they are in a market economy. "You may disagree, but we believe that socialism, and communism as a higher level of that, are better than capitalism," the first official said. "Outsiders seem to be making a big fuss of the recent changes, calling them the 'beginning of reform', but the Republic has been reforming ever since it was founded," he said.

On the streets of Pyongyang, home to North Korea's wealthiest residents, little change was evident. Asked whether North Korean liquor sold at the Pyongyang Koryo Hotel shop would make a good souvenir, another official said: "I can't tell you because I've never had it." One bottle of the clear liquor cost 1,200 won, or $8.00 -- a fortune in a land where the government devalued the won to 150 per dollar from around 2.15 in the past few weeks, a 98.6 percent cut in its value. (Reuters, Thursday, August 22, 2002; 3:06 AM)
 

NORTH KOREA DEVALUES CURRENCY

The Associated Press reported that the DPRK slashed the official exchange rate for its currency last week as the latest step in a new reform program aimed at reviving the economy, foreign residents say. The official value of the won dropped from 46 US cents to just two-thirds of a cent, the residents reported, speaking on condition of anonymity. That's still overvalued compared to the black market, where a won is worth only a half cent. A Western diplomat in the North Korean capital said efforts to change money at the new rate were mixed. He said a colleague was unable to change dollars for won at the state Foreign Trade Bank, but could do so in a department store. The diplomat said the few shops he had visited that take payment in dollars had not raised their prices, but dollar prices for hotel rooms had increased. Shops and hotels that cater to foreigners demand US dollars to meet the DPRK's need for hard currency to pay for imported goods. The devaluation is unprecedented in the DPRK, where the government long argued that the state distribution system meant residents had no need for money. (Christopher Torchia, "NORTH KOREA DEVALUES CURRENCY," Seoul, 08/10/02)

Would you like a Taedonggang Beer?

People's Korea (Tokyo), 27 July 2002
 

People enjoy drinking Taedonggang Beer in a bar in Pyongyang At last, summer has come. It will be unusually hot this year. How do the Pyongyangites bear the heat of summer? To seek cool air, do they go to seashores or rivers? Of course, they will do that. But this summer, there is a drink that makes people feel cool and refreshed. Since this spring, Taedonggang Beer has become very popular with Pyongyangities. "I have never drunk such terrific beer," "I won't be able to drink any beer but Taedonggang beer"...Most drinkers fell for the Taedonggang Beer magic.What is the secret of Taedonggang Beer? We visited the Taedonggang Beer Brewery and a Taedonggang beer bar in Pyongyang city.

Beer Brewery computerized

  
The Taedonggang Beer Brewery was constructed a little over a year ago in January last year. The factory produces 70,000 kiloliters of beer a year. "This beer tastes good, and this is because our brewery is equipped with most advanced facilities and we have technical experts who are well experienced in this field. Also we use good-tasting water from the Milim area because water is decisive for the quality of beer." Sin Song Bo, 46, chief engineer, said.

In the brewing room, a few workers operate their computers. The actual conditions of beer as it is processed in tanks and pipes, are displayed on the screen. This process control system was developed by Kim Chaek University of Technology and was manufactured by the Hamhung Equipment Assembly Enterprise. The taste of beer and the production speed are guaranteed by it. In a laboratory, there are samples of raw materials for beer such as barley, malt, hop, and so on. At present, the brewery uses Australian malt. The facilities for barley processing are not yet installed there, as it takes times to manufacture and assemble them. "We will use barley grown in Taehondan County, Ryanggang Province, or in Ongjin County, South Hwanghae Province, as soon as possible." Kim Thae Ung, chief engineer at the brewery said. "Although we use imported equipment, we aim to make our beer suit the tastes of Koreans by using ingredients from our land," he added.

There is a sample room where various beer brands in the world are displayed. We can taste Taedonggang beer fresh from the tank. "We will refine the taste of our beer to a world level. I want to serve the best beer to the Korean people who have surmounted difficulties and trials for several years in a row in the past," a waitress said, pouring beer into a glass.  

Inside of shop changed 

This April, this Chollima Street Soft Drink Shop put up a "Taedonggang Beer" signboard. The board was painted in red. After that, the atmosphere inside the shop remarkably changed. "Most customers used to be women and children when the shop sold soft drinks, bread and ice cream. But now, men have the shop all to themselves." Pae Son Bi, 52, female manager of the shop, said. She has learned to talk easily with drunken men, as 3 months have passed since the opening of the Beer Bar. "Our work is harder than before. But seeing customers' satisfied faces, I really feel this work worth doing."

There had been some "beer bars" around Chollima Street before. Then, they used to serve Pyongyang Beer, which was produced by Pyongyang Beer Brewery, and there were only a few regular customers there. But this year, Taedonggang Beer Brewery was newly constructed with the most advanced facilities in the Sadong District, Pyongyang, and began to mass-produce beer, and over hundred Taedonggang Beer Bars mushroomed in the central parts of the city.  

A day closes with sauna and beer  

Taedonggang Beer has caused a storm of sensation among Pyongyang people. Beer bars used to be only for a few beer enthusiasts because it couldn't be said that Pyongyang Beer was much better than ordinary bottled beer people generally drink at home. Kim Gwang Ho, 35, dropped at a Taedonggang Beer bar in Chollima Street with his fellow worker after work. They work at Pyongyang Gymnasium near the bar. They are engaged in the transportation and installation of sports equipment. It is their daily routine to go to a sauna to sweat and refresh themselves after work, and then go to a beer bar.

"Taedonggang Beer has a unique taste, anyway. This beer is stronger than Pyongyang Beer. When I feel thirsty and I drink that beer, I feel...what can I say...cool and refreshed. Anyway, I can't stop drinking another glass after a glass of that beer." Pyongyangites generally call beer a "soft drink". This means that they don't recognize beer as a liquor, though it is an alcoholic drink. But now, Taedonggang Beer has dispelled this concept. Taedonggang Beer has a special taste and a high alcohol content. Its alcohol content is 5.7%. If you drink it without restraining yourself, you will get quite high.

Kim, who had already got drunk, said, "I had never got drunk before, but today, I feel tipsy on a glass of this drink. Indeed, this alcohol is so strong." "It is because you have drunk so much, isn't it? Look at the table. How many glasses are there on the table?" Paek, manager of the beer bar, said with a smile. A glass of beer has a volume of about 500ml and costs 1won 50 jon. People can drink beer as much as they like. The quantity of beer consumed by the beer bar on Chollima Street in a day is over 1,000 liters. Taedonggang beer bars are sure to be filled with Pyongyangites on hot summer days.  

Charcoal heroes

In North Korea, innovation in the face of shortage and hardship is encouraged. No power saws for the timber industry? No problem; use axes. No oil to transport the hewn timber? No problem; use charcoal. Very heroic, except that the shortage and hardship was caused not by bad luck but by a government that refuses to accept modern realities. - Aidan Foster-Carter  (Aug 13, '02)