In-depth Business Intelligence
Books on North Korea
22,224,195 (July 2002 est.)
North Korean won (KPW)
Update No: 024 - (29/04/05)
Looking inward, snarling outward
A month of self-absorption
In a state always more inward-looking than most, April is a month especially
full of self-regard in North Korea. It contains two major anniversaries. One is
Sun's Day: April 15, birthday of the late Kim Il-sung - the DPRK's founding
leader and (despite being dead) "eternal president." North Korea dates
its juche calendar from 1912, the year of his birth: on the very day the Titanic
sank, as it happens. The other big day is April 25, said to be the foundation
date of the Korean People's Army (KPA) in 1932. In reality the KPA was founded
in 1948 on February 8, and celebrated on that date until 1978; when Kim Il-sung
found it politic to obscure these Soviet origins and claim he started it
himself, aged 20.
According to official myth, Kim had already formed a Down-with-Imperialism Union
in 1926, at age 14; upon which his mother Kang Pan-sok - whose 113th birthday
was duly celebrated on April 21 - allegedly gave him two pistols that had
belonged to his father, Kim Hyong-jik. Still another, less imaginary anniversary
is April 9; on which date Kim Jong-il became chairman of the National Defence
Commission (NDC) - the DPRK's top executive organ, ranking above the Cabinet -
in 1993, a key step in his rise to power.
The usual April celebrations duly unfolded. A highlight was the 7th Kimilsungia
festival, from April 13-22. Kimilsungia is a variety of orchid, first bred in
Indonesia and named in honour of the Great Leader when he visited Jakarta in
1965 by then president Sukarno. Guests of honour in Pyongyang for the 40th
anniversary were Sukarno's widow and his daughter, ex-president Megawati.
According to the official Korean Central News Agency (KCNA), "more than
750,000 servicepersons, working people, school youth and children including
senior officials of the Party, the state and the army visited the festival"
to view "at least 10,000 potted Kimilsungias and a variety of rare flowers
contributed by organs of the armed forces, ministries and national institutions,
all provinces of the country, service persons of the Korean People's Army,
working people and school youth and children." Over 100 cups, medals and
diplomas were awarded for the best blooms.
Eccentric egotism aside, making everybody compete to raise orchids in the Korean
winter is a scandalous waste of time and scarce electricity (for 250 greenhouses
nationwide). In the late 1990s, at the depth of the famine and power crisis,
KCNA reported loyal citizens as asking for their home heating to be shut down so
that Kimilsungias could take priority for electric power. Needless to add, the
dear leader too now has his own special flower: Kimjongilia, a large red begonia
bred and presented by a Japanese botanist in 1988.
Another, older spring perennial was the 23rd April Spring Friendship Art
Festival. This, as ever, mixed serious music - including " 'Duet of Polinna
and Liza' from opera 'Queen Spade'", as KCNA had it - with hagiography like
" 'General, Please Don't Travel along the Snow-covered Road in Cold
Weather' of the Mongolian art troupe" and variety acts such as
"illusionary jugglery 'Mystery' of the Portuguese magic group."
Diplomatically, Kim Jong-il attended performances by both Russian and Chinese
ensembles; the latter, but not the former, saw him accompanied by almost the
entire top DPRK leadership.
Parliament postponed, unusually
It says much for Pyongyang's priorities that, while the Kimilsungia and arts
festivals each last over a week, what passes for a parliament takes just one
day. The Supreme People's Assembly (SPA)'s spring plenary session used to last
2-3 days, but recently a single day has become the norm. Debate not being the
done thing, this suffices to pass the budget - unanimously, of course - and hear
the prime minister report on the economy in general.
This year, unusually and perhaps unprecedentedly, parliament was postponed. That
was announced on March 4, a mere five days before the third session of the 11th
SPA was due to convene. No reason was given, except that this was "at the
requests made by deputies to the SPA in all domains of the socialist
construction" - rather implying that these hard-working people had better
things to do than to sit around and chat. On April 1, almost as abruptly, it was
reported that the session would now be held on April 11, as it duly was.
A powerful troika
Hopes that all this meant something new afoot were in vain. As reported by KCNA,
there was little to distinguish this session from its many predecessors over the
years. Kim Jong-il attended; he had missed last year, which was unusual. The
only other platform figures named - but with no mention of the offices they
held, oddly - were (in order) Kim Yong-nam, Jo Myong-rok, and Pak Pong-ju. Kim,
in the past a long-serving foreign minister (1983-98), is President of the SPA
Presidium: its standing committee, which meets to approve legislation when the
full SPA is not sitting - i.e. most of the time. As such, Kim is the DPRK's
titular head of state: he receives most foreign envoys, and is the nominal
number two to Kim Jong-il (whose own formal power derives from chairing the NDC).
In practice the real number two may be vice-marshal Jo, the KPA's political
director who since Kim Il-sung died in 1994 has become the most powerful
military figure. In 2000, as a special envoy from Kim Jong-il to Bill Clinton,
Jo took tea in the White House in full KPA uniform, having arrived in civilian
clothes and changed on-site. A former air force commander, he ranks above both
the defence minister Kim Il-chol (a navy man) and the chief of general staff,
Kim Yong-jun. Twice in recent years reported as hospitalized for a serious
kidney condition, Jo's reappearance now signals that he is still in the frame.
For Pak Pong-ju to be singled out is a rare honour for a premier. Hitherto the
cabinet was seen as very much subordinate to both the Party and military. But
Pak, a technocrat and former chemicals minister who impressed his hosts on a
fact-finding visit to South Korea in 2002, seems to have Kim Jong-il's favour.
Since becoming premier in September 2003 he is regarded as the main force
driving the economic reforms introduced in mid-2002.
Still no numbers in the budget
Yet Pak's review of the cabinet's work last year and tasks now - an economic
overview, in effect - was disappointingly old-style. He gave no numbers; just
percentages, such as claiming that electricity production in 2004 was 50% higher
than in 2002 (sic, not 2003). This year "agriculture is the main front ...
to decisively settle the food problem." Specific tasks here are "to
widely introduce high yielding seeds, implement to the letter the Party's
policies of cultivating two crops a year, bringing about a radical turn in
potato farming and successfully cultivating bean and decisively boost the
per-hectare yield of grains."
To attain this, finance minister Mun Il-bong said in his budget speech that
investment in the farm sector will rise 29% from 2004, which sounds substantial
(depending what last year's figure was, which is unknown; in the past
agriculture long played second fiddle to industry, one reason for its present
malaise). More generally, Mun gave a breakdown - again, only percentages - of
last year's spending. 15.6% went on defence, "to cope with the more frantic
moves of the US-led imperialists to isolate and stifle the DPRK." (Most
analysts reckon the real proportion is twice as high, since much spending
classified as economic is military-oriented.) Elsewhere "41.3% of the total
state budgetary expenditure was allocated to the national economy and 40.8% of
it to social and cultural fields." That leaves 2.3%, presumably for
administration, which in the past was itemized separately.
For 2005 - the calendar year is the financial year, thus already under way -
both sides of the ledger are set to rise far more than in 2004: spending by
11.4% and revenue by fully 15.1%. (Last year the plan was for expenditure to go
up 8.6%, but revenue by only 5.7%; unlike in the past, Mun Il-bong was not
reported as saying if these targets were met.) This year's revenue gain is to
come mainly from profits of state enterprises (up 13.5%); profits of
cooperatives are set to rise by 8.4%, and social insurance revenue by 3%.
Ominously, local budgetary revenue is earmarked for "a considerable
increase;" implying that the gap may be plugged by Pyongyang squeezing the
provinces. Hopes of large gains in output - and hence revenue - by both heavy
and light industry seem optimistic, absent investment.
Nothing was said of rumoured radical changes to the whole way enterprises are
financed: supposedly moving from the old system of central funding by the state
to require firms to raise funds from banks, as in capitalism. While such a shift
would be a logical next step in the reform process, with no official
confirmation it is hard to assess the state of play.
A budget with no numbers is obviously of limited use. While Pyongyang has
suppressed most statistics for 40 years, until 2002 broad budget aggregates were
given; which could be combined with the slightly more numerous percentages
mentioned to calculate at least a few further figures, for instance by sector.
The complete absence of real numbers since 2003 presumably reflects the problem
of admitting and handling the de facto drastic (and still ongoing) devaluation
of the DPRK won since July 2002's wage and price reforms.
Still no fresh nuclear talks
All the above went almost unreported outside North Korea. As ever, the rest of
the world focused overwhelmingly on the nuclear issue. Nearly a year after
six-party talks were last held in Beijing in June 2004, this forum may now be
defunct. Christopher Hill - who just months into a stint as US ambassador in
Seoul was appointed assistant secretary of state, replacing James Kelly - warned
on April 27 while on a quick tour of the region that "the future of talks
is very much uncertain at this point." On April 18 White House spokesman
Scott McClellan hinted that unless Pyongyang returns to the table soon, the US
may take matters to the UN Security Council. South Korea was quick to oppose
this, highlighting the tactical (if not strategic) gap between these
increasingly estranged allies. Such splits of course benefit North Korea, as do
the current rows between Japan and both China and South Korea over history texts
and territorial claims. On April 26 China's ambassador to the UN, Wang Guangya,
said that any bid for UNSC sanctions would destroy the 6-party process. Since
China wields a UNSC veto, the US may have to remain patient.
Reactor shutdown: more nukes?
Despite entreaties from all and sundry, the DPRK remains obdurate that it will
not attend unless the US ceases to be hostile and says sorry for calling it
nasty names. (This is rich, given the insults that Pyongyang routinely heaps on
the US and others.) In April North Korea upped the ante. Selig Harrison - a US
academic and ex-journalist with high-level access in Pyongyang, which often uses
him as a conduit - reported after his latest trip that his hosts had warned they
might "unload the reactor to create a situation." South Korean
intelligence duly confirmed on April 18 that a 5 megawatt reactor at Yongbyon,
the main known nuclear site, had indeed been shut down. (One would imagine - or
hope - that US spy satellites had already spotted this; but they would not
normally publicize the fact.)
The risk here is of spent fuel being reprocessed to make plutonium. Each batch
of 8,000 rods can produce enough to make six nuclear bombs. Pyongyang is
generally assumed to have squirreled away enough plutonium for two bombs by
1992, before the International Atomic Energy Agency (IAEA) gained access to
Yongbyon; and to have got the materiel for a further half-dozen since early
2003, after it expelled IAEA inspectors and restarted Yongbyon in the second,
ongoing nuclear crisis. But then again, this latest closure could be for
maintenance, or repair - or sheer bluff. As usual, North Korea is raising
tension in order to gain US attention. Kim Jong-il must wonder just what will do
the trick with a Bush administration which in practice appears oddly unfazed by
Might they test a bomb?
One way, of course, would be to test a nuclear device. North Korea has never yet
done so - though there are allegations that Pakistan did one on its behalf. On
April 22 the Wall Street Journal claimed that the US has warned China that
Pyongyang may be preparing a test. Although this was denied, the fact that South
Korea's foreign minister urged North Korea not to do this implies that Seoul too
is worried. Aside from possible US retaliation, testing carries other risks for
the DPRK. Like its Taepodong missile launch over Japan in 1998, a nuclear test
would reveal its hand: showing US satellites what it has got. It might also go
embarrassingly wrong. Where to do it, in a small country, is another issue: it
can only be underground in a mountainous area, but even that risks polluting
water sources. This would also blow all further chance of playing nuclear bluff.
On the other hand, Kim may conclude that nothing else will get the US to pay
attention and take him seriously.
North and South get together in Jakarta
While North Korea's nuclear foot-dragging has some logic, more puzzling and
perverse has been its parallel boycott - also for nearly a year - of most
dialogue with South Korea; even though these days Seoul seems more often to
stand up for Pyongyang than to it. But late April brought fresh hope that the
main channels of regular inter-Korean dialogue may soon resume. In what was
formally the highest-level North-South meeting for five years - in fact since
June 2000's summit in Pyongyang - Kim Yong-nam met with South Korea's prime
minister Lee Hae-chan. Both were attending the Afro-Asian summit in Jakarta,
marking the 50th anniversary of the 1955 Bandung conference which led to the
founding of the Non-Aligned Movement (NAM). In its 1970s heyday Pyongyang was
very active in the NAM. Besides resisting Cuban attempts to have the NAM take a
pro-Soviet stance, in a rare diplomatic victory the DPRK succeeded in excluding
the ROK - on the reasonable grounds that the latter's close ties with the US
Inter-Korean dialogue may soon resume
Such sparring is now history. Although neither Kim nor Lee wields as much power
as their rank might imply, the fact that they met twice on successive days
(April 22 and 23) suggested serious intent. Kim Yong-nam gave no ground on the
nuclear issue: reasserting the DPRK's right to nuclear deterrence, and saying it
will resume six-party talks only "if the climate is mature." But he
did commit to resuming North-South dialogue. Lee called it "a good meeting
… we had a great deal of frank discussions on important issues ...going beyond
scheduled time" - although the talks lasted only some 30 minutes.
It remains to be seen if, and when, the North is as good at its word. As of late
April, most of the formal institutions of inter-Korean dialogue created after
the Pyongyang summit remained suspended. Cabinet-level and economic meetings,
formerly held quarterly, have not taken place for almost a year. There have also
been no family reunions since last July, even though the elderly cohort of those
separated for more than half a century since the 1950-53 Korean War is rapidly
dying off. With any luck, all this may now resume in time for NGOs on both sides
(who had continued to meet) to celebrate the fifth anniversary of the Pyongyang
summit in June more cheerfully than would otherwise have been the case.
A further incentive may be North Korea's urgent need for fertilizer. In January
the DPRK Red Cross requested 500,000 tonnes of fertilizer from the ROK: almost
twice the usual amount. A month later South Korea said it will consider this -
if the North asks via the inter-Korean economic committee, which it has
boycotted for almost a year. There the matter rested as of late April, with the
planting season fast approaching. With agriculture identified as its top
economic priority this year, Pyongyang can ill afford further delay.
New cross-border roads little used yet, and railways not at all
Almost five years after the two Koreas agreed to reconnect two cross-border
roads and railways, progress remains slow. Construction continues, but usage
remains limited. The new highways to Kaesong in the west and Mt. Kumgang in the
east of the peninsula are now finished; they are used, respectively, by South
Korean workers commuting daily to the Kaesong industrial zone, and by Hyundai
Asan's tour buses. There is no other regular traffic. Hyundai's hopes of taking
Southern tourists also to Kaesong, an ancient capital, and of letting South
Koreans drive their own cars to Mt. Kumgang, have yet to bear fruit.
Symbolically, North Korea is refusing to hold opening ceremonies for the new
As for railways: in the western corridor the cross-border link is now complete,
but that in the east still has a gap on the northern side. On April 19 the ROK
unification ministry said it will send materials and equipment worth Won
26billion (US$25.8 million) to build six stations in North Korea. Designs and
lists of materiel had been sent to Pyongyang in November; that the North has
only just agreed - documents were exchanged on April 19 at Panmunjom - suggests
it is in no hurry. South Korea has budgeted W142 billion to complete
inter-Korean railways and roads this year, up from W86.4 billion in 2004.
In the western corridor there is now no physical obstacle to trains running from
Seoul to Beijing and beyond, via Pyongyang. Nonetheless the unification
minister, Chung Dong-young, cautiously told the ROK national assembly on April
18 that he hoped it will prove feasible for South Koreans to travel to the 2008
Beijing Olympics by rail. It is unclear why the South is not pressing to
expedite fuller usage of the new rail (and indeed road) links, beyond Kaesong.
The potential transit freight traffic alone between South Korea and China could
generate much-needed revenues for North Korea; although for this to be on any
scale would require major upgrading of the North's road and rail infrastructure.
Slow to accept Southern help with bird flu
South Korea's eagerness to assist the North is often rebuffed. In March, an
outbreak of avian influenza - a milder strain than the one that has killed 51
people in Southeast Asia - forced North Korea to cull 210,000 birds. This was
bad news for the confusingly named Porky Products, a Southern firm which had
just arranged to import some 2,000 tonnes of Northern chicken; it hastily
cancelled the order. South Korea at once offered help, but the North turned
instead to the UN Food and Agriculture Organisation (FAO). Not till April 8 did
North Korean veterinary authorities contact their Southern counterparts, giving
the necessary details - quarantine against cross-border spread being one
Southern concern - and accepting help. South Korea sent quarantine equipment
supplies worth W723m to the port of Nampo - surely slower than overland - which
were due to arrive on April 23. A day earlier, in the first government-level
inter-Korean encounter since July 2004, a team from the ROK Ministry of
Agriculture and Forestry drove across the Demilitarized Zone (DMZ) for talks in
Kaesong. It remains to be seen if the DPRK will allow further more concrete
cooperation, such as joint teams on the ground in affected areas.
The UN again criticizes human rights abuses
For the third year running, the UN Commission for Human Rights in Geneva - UNCHR,
not to be confused with UNHCR, the refugee body - passed a resolution condemning
North Korean human rights abuses, by 30 votes to 9 on April 14. Sponsored by
Japan and EU member states, this for the first time included demands for the
return of abductees. As before, Pyongyang denounced this as a malignant
political plot: warning that "the DPRK has invariably maintained the
principle of reacting with the toughest stand to anyone who dares slander and
provoke it … hostile forces should know that their despicable anti-DPRK human
rights racket is as foolish an act as trying to sweep the sea with a
South Korea abstained. With similar sensitivity - or cravenness - the first ever
videotape apparently of public executions in North Korea, shown in full and
discussed at length on Japanese TV and around the world, was shunned by all
major ROK broadcast networks; they merely transmitted fragments for about a
minute. Awkward as it is for Seoul to find effective responses to Pyongyang's
many challenges, emulating the three monkeys of the Chinese proverb - hear,
speak and see no evil - looks awful, and is not a policy solution.
Hydroelectric power station launched in North Korea
A hydroelectric power station was launched in a festive ceremony on April
21st, in the Hangyong-Namdo province in North Korea's northeast.
The commissioning of the hydroelectric power station has made it possible to
normalize energy supply to local plants and residential areas, supply them with
drinking water as well as supply enough water for irrigation, the Korean Central
News Agency of DPRK reported.
A message by North Korean leader Kim Jong Il to the constructors of the power
station was read out at the ceremony. The president thanked them for work done
in just a few years. He also gave high marks to efforts of young people
participating in the construction, stressing that they had proved "there is
nothing impossible in the world".
The commissioning of the hydroelectric power plant comes within the framework of
the ruling Workers' Party course aimed at solving a long-standing energy crisis.
As the country is rich in rivers and mountains, it was decided to build small
and medium-size hydroelectric power stations, which can supply local settlements
with electricity. However, major hydroelectric power stations are also built in