NK Economics

November 13, 2018

North Korea’s mining industry is collapsing, and steel may be next

OVER THE LAST YEAR, THE BRAVE COVERT CORRESPONDENTS of the Daily NK and Rimjin-gang have reported from inside North Korea on the effects of sanctions on North Korean industry. It’s now clear that those effects have been severe. That’s good news, because North Korea’s mining and steel industries are closely linked to its military and its WMD programs. It’s also terrible news, because a lot of people who depended on those industries are now living through some very hard times....

NK Economics/Sanctions

May 8, 2017

The PUST hostage crisis is a fitting symbol of the futility of engaging Pyongyang

Just one week after I predicted that the misbegotten experiment known as the Pyongyang University of Science and Technology would soon be at the center of a hostage crisis, the inevitable has happened. North Korean state media reports the country has detained a U.S. citizen ” the fourth U.S. citizen being held there amid rising tensions between the two countries. The official Korean Central News Agency identifies the man detained Saturday as Kim Hak Song, an employee of Pyongyang University...

Engagement/Foreigners in N. Korea/Sunshine/Terrorism (NK)

February 6, 2017

The Commerce Department should review PUST’s export licenses for North Korea

Last week, several news outlets reported that representatives of PUST, the Pyongyang University of Science and Technology, are in the United States, seeking support to expand their curriculum in North Korea. PUST didn’t say what kind of support it seeks, but recent reports suggest that PUST has lost donors and had to slash its budget. PUST is probably looking for money. Donors, however, would be wise to keep their checkbooks closed until the Commerce Department and a U.N. Panel of...

Cyberwar/Engagement/Technology

February 24, 2016

Yonhap: Chinese company stops buying North Korean coal

In what could be the latest financial hit to Pyongyang, Yonhap reports that an important Chinese customer has stopped buying coal from North Korea: A Chinese company in the northeastern border city of Dandong has been ordered by China’s commerce ministry to halt its coal trade with North Korea starting next month, according to a state-run Chinese newspaper Wednesday. Citing an unnamed Chinese businessman who operates a coal business with North Korea, the state-run Global Times newspaper said the order...

China/NK Economics

February 16, 2016

In The Weekly Standard: Kaesong, where life imitated Monty Python & the Holy Grail

In Monty Python and the Holy Grail, the Knights of Camelot are on a quest for the Holy Grail, but find their way barred by a group of ornery French knights – never mind what they are doing in England – who have walled themselves inside an impregnable castle. After a pathetic attempt to breach the walls fails, Sir Bedivere the Wise devises a scheme to do through guile what could not be done through force. He persuades King Arthur...

Appeasement/Engagement/Kaesong/Sunshine

February 10, 2016

The End of Sunshine: S. Korea suspends ops at Kaesong, “suspected” of funding N. Korea’s WMD programs

Year after year, and almost alone, I have argued that the Kaesong Industrial Park was incompatible with U.N. Security Council resolutions sanctioning Pyongyang. At Kaesong, “South Korea has 124 companies … employing 54,700 North Korean workers … whose wages are paid to a North Korean state agency.” All told, those fees, taxes, and “wages,” which the North Korean workers probably never saw after Kim Jong-un took his cut, totaled $110 million last year alone. Contrary to Kaesong’s founding purpose of promoting North-South engagement and people-to-people...

Engagement/Kaesong/North-South/Sunshine

January 24, 2016

Did a U.S. university teach North Korea to track down dissidents?

Just after Christmas, Reuters reported on the analysis of two German IT experts who downloaded a copy of North Korea’s Linux-based Red Star operating system and analyzed its code. Inside, they found something both horrifying and completely predictable. Red Star contains code for “tagging, or watermarking, every document or media file on a computer or on any USB stick connected to it.” Meaning? That means that all files can be traced. “It’s definitely privacy invading. It’s not transparent to the user,”...

Censorship/Engagement

December 16, 2015

Attention North Korean generals: You have exactly six months to plot your coup.

Notwithstanding some reports to the contrary yesterday, it looks like Kim Jong-Un’s big party congress will proceed in May, as planned. According to the Korean Institute for National Unification, a South Korean think tank, personnel changes will be on the agenda: North Korean leader Kim Jong-un is expected to reveal his new aides in a major community party convention to be held in May next year, a South Korean government think tank said Tuesday. [….] Chances are high that it will set...

Engagement/Kremlinology/NK Economics

December 8, 2015

Inter-Korean phone calls can keep the promises of the Sunshine Policy

Twenty years of state-to-state engagement between North and South Korea have not lived up to Kim Dae-Jung’s promises. Pyongyang has taken Seoul’s money, nuked up, and periodically attacked South Korea for good measure. Rather than reforming, it has invested heavily in sealing its borders. Pyongyang sustains itself on foreign hard currency, even as it cuts off the flow of people, goods, and information to its underprivileged classes. It knows that if it fails to do this, members of those classes will...

Appeasement/Border Control/Capitalism/Engagement/Refugees/Sunshine

December 7, 2015

Defectors: PUST is training North Korean hackers

Not for the first time, the Pyongyang University of Science and Technology, a showpiece for academic engagement between North Korea and the Outer Earth, stands accused of teaching its elite students to work as hackers in Kim Jong-Un’s notorious cyberwarfare units. North Korea is reportedly recruiting graduates from Pyongyang University of Science and Technology for cyber warfare. North Korean defector Jang Se-yul, who worked in the North’s electronic warfare command, and another defector Yi Chol claimed on Wednesday in a news conference...

Cyberwar/Engagement

November 29, 2015

Orascom’s Big Turkey Drop: Why the SEC should require disclosure of investments in N. Korea

For years, Koryolink was the showpiece of economic engagement with the North Korean government. The service, a partnership between Pyongyang and the Egyptian conglomerate Orascom, provided cell phone service to North Korean officials, elites, security forces, and a few other customers with enough cash and connections to afford them. As a sweetener for Kim Jong-Un, Orascom also clothed the Ryugyong Hotel, the awkwardly naked (and still vacant) colossus of an embarrassment to Pyongyang’s economic system. According to the Daily NK, taxing Koryolink has become...

Engagement/Sanctions

November 25, 2015

The Great Engagement Debate: Stanton v. Delury at NCNK

On October 22nd, the National Committee for North Korea invited me and Professor John Delury of Yonsei University to a debate, in which we each offered three proposals for the next president on North Korea policy, all premised on a delusion of grandeur that Donald Trump really cares what either of us thinks. The debate was held in a beautiful conference room on the top floor of the Hart Senate Office Building overlooking the Capitol. There was a great crowd — probably...

Engagement/Sunshine/Washington Views

November 24, 2015

Jeffrey Fowle’s mission to N. Korea no dumber than the rest of them

In this age of click-bait listicles, The Atavist has published a rare example of real journalism, in which reporter Joshua Hunt traces the story of Jeffrey Fowle from its origins (in a dream!) to its anticlimax. Fowle, you will recall, is the Ohio municipal worker who went to North Korea, “certain that God had a plan for him,” left a Korean-language Bible next to a toilet in Chongjin, got himself arrested and detained for six months, and nearly lost both his job and his wife. Later, asked if...

Engagement/Foreigners in N. Korea

November 19, 2015

Of fools and their money: Martyn Williams on Orascom’s North Korea fiasco

Martyn Williams of the North Korea Tech blog has a must-read story at IT World about how Orascom’s investment in North Korea’s Koryolink mobile phone service “went horribly wrong.” That such a headline can be written is, by itself, a stunning reversal. During the early years of Kim Jong-Un’s reign, Koryolink was the poster child for more sanguine North Korea watchers, who believed that once a Swiss-educated reformer had taken the throne, a Pyongyang Spring must surely follow. For the first few years, Koryolink really did look like...

Engagement/NK Economics

November 2, 2015

Tourists put $43M in Kim Jong-Un’s pockets last year

Despite a string of high-profile arrests of foreign tourists recently, Darwin’s light continues to draw slummers — and record hauls of their money — into Pyongyang: North Korea earned tens of millions of dollars from foreign tourists in 2014, around half of the hard currency it won from the lucrative inter-Korean industrial park, a researcher said Sunday. North Korea’s income from foreign tourists is estimated at US$30.6 million to $43.6 million last year, considering about 95,000 Chinese tourists and 5,000...

Engagement/Foreigners in N. Korea

October 13, 2015

The more North Korea trades, the more it reforms, right? Wrong.

Yesterday, I questioned the premises of economic engagement with Pyongyang — that Pyongyang is socialist, that trade is capitalism, that capitalism inexorably erodes socialism, and that capitalism (least of all, state capitalism) is inherently liberal and peaceful. I argued that Pyongyang adopted state capitalism decades ago, and that it has grown steadily more menacing and repressive ever since. It feigns socialism to feed our false hopes of reform and arguments against sanctions, to tempt investors, to recruit apologists who embrace its socialist pretenses, and to justify the...

Border Control/Capitalism/Censorship/Class Warfare/Engagement

October 12, 2015

The Myth of North Korean Socialism: How Pyongyang’s Profiteers Fooled the World

Over this long weekend, I’ve been reading Brian R. Myers’s new book, “North Korea’s Juche Myth,” a copy of which Prof. Myers was kind enough to send. Myers argues that juche, that cryptic ideology reporters often mention but never explain, is a sham ideology that is both overblown and seldom understood, by foreigners as well as North Koreans. Very roughly translated, juche means that man must be the master of his own destiny (in contrast to North Korea’s reality, in which individuality is uniquely suppressed). Myers argues...

Class Warfare/Engagement/Propaganda/Sunshine/Useful Idiocy

May 14, 2015

N. Korea’s expatriate labor needs ethical and financial limits

N. Korea increasingly relies on expat labor for hard currency A series of new reports suggests that the export of labor has become a major source of income for Pyongyang. The Financial Times cites an NGO estimate that the regime earns $1.5 to $2.3 billion a year from contract labor, in line with educated estimates of its annual revenue from missile sales ($1.5 billion) or arms deals with Iran ($1.5 billion to $2 billion). (Update: Marcus Noland questions that estimate,...

Engagement/Human Rights/Kaesong/Russian Far East/Sanctions

Category: NK Economics