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Category: NK Economics

July 7, 2009

North Korea’s Great Leap Backward

It’s not just on this blog where the ill-informed and the self-deluded continue to defy years of bitter experience and advocate “engagement” with the North Korean regime as a way to encourage economic reform.  You can still hear academics in Washington cite the potential for economic reform in North Korea as a reason not to impose sanctions after North Korea’s nuke and missile tests.  Some day, we must make a point of tabulating the amount of money spent on this...
Categories China & Korea/Famine & Food Aid/NK Economics
July 2, 2009

Where Does North Korea’s Economy Stand Now?

Time has an interesting analysis.  The short-term picture has improved, though perhaps not sustainably: Estimates from South Korea’s central bank, released on Monday, suggest that North Korea’s gross domestic product recovered in 2008 after two years of contraction, with 3.7% growth. The bank attributed the increase to “one-off factors,” such as an improved harvest.  [Time, Michael Schuman] Still, I have to wonder if the regime would be clamping down on private trade if it was truly pinched for cash: Marcus...
Categories NK Economics
June 30, 2009

Orascom Watch

The Egyptian conglomerate that is rebuilding the Ryugyong Hotel, and whose relationship with North Korea showed signs of trouble several months ago, is reporting that it’s actually selling mobile phones to North Koreans: Egypt-based mobile operator Orascom Telecom earned US$312,000 in first-quarter sales this year from its mobile service in North Korea on surging demand among the communist nation’s upper class, a company press release said Thursday. More than 19,200 people have signed up for Orascom’s mobile phone service as...
Categories NK Economics
June 29, 2009

WaPo on China’s Trade with North Korea, and Its Rulers’ Darkest Fears

China, which the unmitigated chutzpah we’ve come to expect of it, reassures us that it is “deeply committed” to the enforcement of UNSCR 1874.  Today, Blaine Harden of the Washington Post reports the facts that shatter that mendacious claim.  In a new report, he provides fresh evidence of China’s economic colonization of North Korea, which fits neatly with its agenda of undermining U.N. sanctions against the North.  It’s a must-read, but here’s a money quote: As U.N. sanctions mount and...
Categories China/NK Economics/NK Military/Proliferation/WMD
June 18, 2009

Breaking News: Treasury Issues Money Laundering Alert Against North Korea

This is going to be a big deal.  By the time I have time to update this post, the world financial system will have started purging itself of its links to North Korea.  More later. Update:   Call it Plan B light, and quite possibly a prelude to better things, but this by itself will have a significant effect. Why, you ask?  After all, this alert doesn’t freeze anything.  It’s merely a warning: The U.N. Security Council’s adoption of specific...
Categories Counterfeiting/Money Laundering/NK Economics/Sanctions
June 18, 2009

WaPo on North Korea’s Global Insurance Scam

For Kim Jong Il’s birthday, North Korean insurance managers prepared a special gift. In Singapore, they stuffed $20 million in cash into two heavy-duty bags and sent them, via Beijing, to their leader in Pyongyang, said Kim Kwang Jin, who worked as a manager for Korea National Insurance Corp., a state-owned monopoly. Kim said he helped arrange the shipment and watched in February 2003 as the cash was packed. After the money arrived, Kim Jong Il sent a letter of...
Categories NK Crime/NK Economics
June 9, 2009

Kaesong Death Watch

For new readers, I am not a fan of the Kaesong Industrial Complex, a zone in North Korea that uses South Korean management and capital, and North Korean laborers that aren’t actually paid wages, so to speak, as much as they’re given food rations as compensation.  The idea was that Kaesong would change North Korea’s society and economy — in the original German, that’s “arbeit macht frei” — but at the first hint of that, the North Korean government predictably...
Categories Appeasement/NK Economics/North-South/Sunshine
June 5, 2009

Obama Gears Up for “Plan B;” John Kerry Blocks Terror Re-Listing

I really don’t know what to make of this.  A young, inexperienced president, one whom the North Koreans arguably endorsed, comes into office showing every sign of being easier meat than Lance Bass in Riker’s Island.  The North Koreans, true to Joe Biden’s prophetic gaffe, and with their exquisite sensitivity to American weakness, don’t even let the man get inaugurated before they begin the noisy repudiation of every agreed framework, U.N. resolution, and armistice they can stuff into a shredder....
Categories "United" Nations/China/Counterfeiting/Money Laundering/NK Crime/NK Economics/Proliferation/Sanctions/U.S. Politics
June 3, 2009

Kaesong Death Watch: Fleeing for the Exits

South Korean companies are packing up their equipment and leaving Kaesong while they still can. Even by the Hanky’s low standards, this is an exceptionally dishonest bit of spin.  The reporter tries to place the blame for the exodus on President Lee for joining the PSI, while making only cryptic references to the events that brought that decision about.  But it’s the glaring omissions that are the most striking:  the Hanky makes no mention at all of North Korea blocking...
Categories Media Criticism/NK Economics/Sunshine
June 2, 2009

The Only American Who Scares Kim Jong Il Goes to Seoul

Forget Hillary Clinton; I’ve been telling you that if you want to see whether the U.S. government is serious about bringing the pain to Kim Jong Il, keep an eye on Stuart Levey. And did I not tell you that President Obama would thank himself for renominating the architect of the financial constriction strategy that briefly struck fear into Kim Jong Il’s dessicated heart? A United States government official who played a key role in freezing North Korean assets in...
Categories NK Economics/Sanctions
May 31, 2009

Korean War 2, Day 5: Gates Calls for a ‘Plan B,’ The Next Missile Test, and More Calls for Military Action

GATES LOOKS FOR A “PLAN B:” Mr. Gates raised “the notion that we should think about this as we are pursuing the six-party talks,” said a senior defense official who asked for anonymity because he was not authorized to speak publicly on the issue. “We ought to think about what more we need to do should they not prove successful.   [N.Y. Times, Elisabeth Bumiller] Better late than never, and he’s welcome to order from this menu. MISSILE TEST UPDATE: ...
Categories NK Economics/Proliferation/Sanctions/WMD
May 26, 2009

The Ryugyong Hotel: Still Worth Its Weight in Infant Formula

Presenting the worst building in the world, now with glass.  It looks … different.  Curtis Melvin writes that it’s now officially less ignored and more a source of pride in Pyongyang, but I still think it brings to mind Churchill’s famous reply to Bessie Braddock.  And then there are the persistent rumors that it’s structurally unsound.  So how much of the cavity space in this gargantuan concrete tusk will ever be occupied?  It’s not as if they’re feeding the North...
Categories NK Economics
May 19, 2009

North Korea Shoots a Messenger

Surely there is some sensible middle ground between these two extremes of personnel management — in America, diplomats who push for policies that fail get promoted.  We learn today that pressing for bold diplomatic initiatives turns out to be less career-enhancing in the Foreign Ministry of the Democratic Peoples’ Republic of Korea: North Korea executed its pointman on South Korea last year, holding him responsible for wrong predictions about Seoul’s new conservative government that has ditched a decade of engagement...
Categories Diplomacy/Inside NK/Kremlinology/NK Economics
May 17, 2009

Kaesong: Dead or Just Pining?

[Updated below] The headline is pretty much what I’d predicted three years ago:  “North Korea announces nullification of all ‘Kaesong agreements,’” and that’s from the Hanky: North Korea’s military leadership has made statements hinting they would demand a withdrawal of businesses from Kaesong, but this is the first time the Bureau has brought up the possibility. In this notification, North Korea said, “We announce the nullification of all Kaesong Industrial Complex agreements made between the two Koreas which gave preference...
Categories Appeasement/NK Economics/Sunshine
April 28, 2009

Kaesong Death Watch

There’s enough bile circulating in my veins as it is, so it’s a burden lifted to read reports like this, via G.I. Korea, and have the confidence that the behavior will be terminated and deterred in due course. These days, Kaesong isn’t shipping much merchandise, but a lot of karma is about to arrive on some manufacturers’ loading docks. Exhibit A: Amid North Korean demands to increase “wages” for Kaesong workers — the workers themselves probably see little or any...
Categories NK Economics/Sunshine
April 7, 2009

The OFK Plan Hits Mass Circulation

Recently, I wrote a post offering effusive praise for a piece by Chris Badeaux in The New Ledger, a publication I hadn’t yet heard of, but which features such first-class talent as Badeaux, Ben Domenech, and Pejman Yousefzadeh. After a series of friendly e-mails, I’ve published a ten-point plan for dealing with North Korea’s WMD threat there, and I’m told that it will be published in Real Clear World tomorrow. Hopefully, this will answer some of the false laments that...
Categories Missiles/NK Economics
April 1, 2009

South Korean Man Still Held at Kaesong

That South Korean man arrested at Kaesong continues to be held incommunicado. It’s staggering that South Korea would invest so much economic and political capital on something as poorly thought through as Kaesong. I didn’t have time to find an estimated total cost for the entire Kaesong fiasco, but this UPI report puts the cost of Kaesong’s recent expansion alone at $2.5 billion, just a small portion of more than $11 billion committed by Roh Moo Hyun to upgrade North...
Categories Appeasement/NK Economics
March 31, 2009

Is Hostage-Taking North Korea’s New Business Model?

This should do wonders for North Korea’s foreign direct investment: North Korea told South Korea on Monday it put a South Korean worker at the joint industrial zone of Kaesong under probe on suspicion of violating relevant regulations, South Korea’s Unification Ministry said. North Korea sent a notice to South Korea, saying the South Korean worker, detained at around 11:50 a.m., has criticized the North’s political system, ministry spokesperson Lee Jong Joo said at a press briefing. [Kyodo News] I...
Categories Appeasement/NK Economics