NK NEWS BRIEF | November 6, 2013

Toys and other small items are tagged with their prices based on grey market rates in a shop in downtown Pyongyang in this recent, undated handout picture | Photo: Reuters

NK INTERNAL

• In a rare public admission, NKorean media acknowledged that one of its vessels sank during an exercise off its east coast last month. KJU visited the new cemetery and graves for the sailors on board the ship, though the exact number of casualties is unknown. Chosun Ilbo reported that a submarine and a patrol boat sank.

• UNFPA: At 24.9 million people, NK’s population ranks 49th in the world. The NK population is expected to grow 0.5% during the 2010-2015 period. Males born during this period are expected to live an average of 66 years, while for females life expectancy is estimated at 73 years.

• NK’s mineral reserves are estimated to be worth over 6.3 trillion USD–24 times greater than SK’s reserves. Currently, 80 out of 89 foreign companies involved in the NKorean mining sector are Chinese.

• Daily NK: The KWP and Democratic Women’s Union of Korea have increased their membership fees. Members of both organizations are expected to pay a small percentage of their wages to the organizations on a monthly basis.

• FIFA has provided funds worth 500,000 USD to build infrastructure to update The International School of Football, a soccer academy in PY.

• RFA: Medicines donated to NK by the UN and international aid groups are making their way to local markets and being sold at lower prices than medicines smuggled in from China. Even with the decreased prices, the medicine is unaffordable for most NKoreans.

ECONOMY & FOOD SECURITY

• Daily NK: Wage levels for workers in some larger industrial enterprises have risen by a factor of approximately one hundred times. The move, which was put forward as part of the “June 28th Policy” in mid-2012 and is designed to bring wages more into line with market price levels, appears designed to improve the productivity and competitiveness of major industrial concerns.

• Reuters: Once reserved for official exchange only in zones aimed at attracting foreign investment, and in illegal underground market deals elsewhere, black market rates are being used more frequently and openly in NKorean cities. Publicly advertised prices at rates close to the market rate – around 8,000 won to the dollar versus the official rate of 96 – could signal Pyongyang is trying to marketise its centrally planned economy and allow a burgeoning “grey market” to thrive. This could boost growth and capture more of the dollars and Chinese yuan circulating widely to pay for imports of oil and food.

• The SK delegation to the KIC was not able to meet with NK government officials, instead receiving a briefing of the current situation at the KIC and meeting several company representatives. Members from the delegation voiced their disappointment in the lack of access, with one lawmaker stating that “The National Assembly, businesses, the government and academia need to communicate with each other and develop plans to increase the competitiveness of the complex.”

• Daily NK: Despite a recent push, NK will have a difficult time attracting investors for its new SEZs due to its 120 to 150 billion USD in foreign debt. In order to gain access to international financial institutions and receive FDI, NK needs to improve its sovereign credit rating and gain the trust of potential investors.

• WSJ: At least nine SKorean firms have ended or have decided to end business at the KIC because of uncertain investment prospects and financial difficulties. The UM confirmed two of the 123 SKorean firms at the KIC had fully withdrawn from NK after selling all their business assets there.

• Daily NK: In another effort to bring in foreign currency, NK is sending its doctors to China.  Despite more doctors, the manager of an oriental medicine clinic in Yanbian province believes “North Korean doctors are not well-regarded in China. No one wants to get treated by a doctor from a backward country, so the authorities can’t form an official agreement with China to send them.”

REFUGEES

• Lankov: “Now the price of border-crossing has increased to some $4-5,000, an exorbitant sum for the average North Korean…So, it is not surprising that the numbers of refugees has decreased dramatically… At the same time, the efforts of the North Korean authorities have so far had little impact on the movement of information and, increasingly, money… It seems that there has been a rapid increase in the amount of money sent to North Korea by refugees from the South.”

• The Hankyoreh has accused a foundation within the UM of providing millions of won in “river crossing money” to a human rights group in July 2012 that helped two NKoreans pay off border guards. The UM has denied the claims, asserting that the foundation’s program provides immediate support for NKoreans who have already escaped NK and are in danger of being repatriated.

• Daily NK: NKorean authorities are beefing up its surveillance of families with missing members or defectors by ordering heads of local people’s units to watch such families and report any strange activity immediately. Source: “Families with members who have defected or whose whereabouts are unconfirmed must register with their local People’s Security bureau,. They are watched over by either a case officer that checks on them in person, or via the chief of their people’s unit or another neighbor.”

• Kim Yong, one of the most materially successful NK defectors ever, says that when he was in NK he “was educated not to trust anything about capitalism.” Even though Yong has earned more than enough money to retire, he keeps working “to prove to the North Korean people that the capitalist world is a world in which any person can live well and that capitalism is a world of opportunity.”

• The Kim Il Sung University Alumni Association in Seoul began in 2011 and has 30 members. Unlike most defectors, many members of the association sought asylum while working in NK’s overseas diplomatic and trade missions or on business trips to foreign countries. The association meets once every quarter to discuss how they can contribute to the two Koreas.

HUMAN RIGHTS

• WSJ: Kenneth Bae has officially been detained in NK for one year, becoming the first known US citizen to be detained longer than a year since the Korean War.  Reasons for his extended detainment are uncertain, but analysts suggest that poor US-DPRK relations may be playing a part.

• Speaking at a news conference in New York last week, the COI appealed to NK to allow access to its prison camps.

• Noland to the COI on the famine: “The North Korean government did not and continues not to use the resources available at its disposal to address the lack of food among the populace, and when aid was offered, it hindered and continues to hinder the operation of relief programs… This was a man-made, preventable tragedy. These people died needlessly, and the government is culpable.”

INTERNATIONAL POLITICS & SECURITY

• Last week, after initially telling a French daily that “we are ready to help North Korea. My position is that I can hold a meeting at any time if it is necessary for development in the South-North relations or peace on the Korean Peninsula,” PGH asked people not to read too much into her comments. Due to PGH’s remarks, speculation about a change in policy towards NK has arisen; however the UM recently denied any shifts. In the same interview, PGH expressed her disinterest in holding a summit with Japan.

• Minister of Unification Ryoo on lifting the 5.24 Measures: “Seoul is looking into the issue carefully, but public opinion is clearly divided on sanctions.” The sanctions were put in place three years ago after the Cheonan sinking. They halt all inter-Korean economic exchange–not including the KIC–and are believed to be an obstacle to the KIC achieving international competitiveness. Jung Cheong-rae of the Democratic Party claimed the sanctions have caused 9.4 trillion KRW in direct damages to the SK economy.

• Antonio Inoki, a Japanese politician, was denied permission by the Japanese parliament to travel to NK; however, Inoki, who has visited NK 26 times before, still went to PY to attend a sporting event and hold talks with high-ranking officials. Inoki has worked to build bridges with NK for some time, urging Japan to downplay the issue of NK’s abduction of Japanese citizens in hopes of improving bilateral relations.

• NK criticized SK for pursuing an inter-Korean trust-building policy, claiming that PGH’s policy is based on hostile intent and will only fuel tensions on the peninsula.

• SK’s chief delegate to the Six Party Talks is currently in the US to discuss nuclear issues, including preconditions for resuming the Talks.

• WSJ: Despite strengthening ties, Mongolia’s president finished his trip to NK without meeting KJU.

MISC.

• Joongang Ilbo: 15 years ago, Ko Yong-suk, KJU’s maternal aunt, sought political asylum from the US. Before seeking asylum in 1998, Ko spent two years in Switzerland looking after KJU.  An intelligence source said that the couple defected because they knew so many secrets about the regime and were afraid. Ko and her husband have received new identities and are living in the US with special safeguarding by the CIA’s witness protection program.

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